A RESPONSIVE AND DYNAMIC INSTITUTION
COMMENTARY ON THE RULES
Delos emphasises four features of its Rules that are designed to promote time and cost efficiency in the resolution of disputes through arbitration, and which distinguish it from other arbitration institutions. These features – known as principles – interlink in order to align the interests of Delos, arbitrators and counsel with the business needs of its users.
DELOS PRINCIPLE 1 focuses on the active conduct of proceedings by arbitrators, as distinguished from a purely adversarial model. Arbitrators are encouraged to (i) make early efforts at identifying the key issues in dispute and anticipate the post-hearing phase of the case, (ii) tailor the procedure accordingly, (iii) be proactive during the arbitration and (iv) make use, where appropriate, of interim decisions on the allocation of costs.
In doing so, arbitrators must take account of (i) the value of the dispute, (ii) the complexity of the issues, (iii) the importance of the dispute to any ongoing relationship between the parties and (iv) the time-limit set by Delos for submitting a draft of their award (be it interim, partial or final), known as a Time Notice.
The Rules provide indicative times for the Time Notice of 60 days for disputes with a value up to EUR 200,000, 120 days if the value is within EUR 5 million, 180 days if the value is between EUR 5 million and EUR 40 million, and 240 days otherwise for disputes with a value in excess of EUR 40 million (see Rules Appendix 4).
To support the active engagement of tribunals, DELOS PRINCIPLE 2 identifies seats or places of arbitration considered to be safe for the efficient and, if necessary, firm conduct of arbitrations, and which do not materially increase the cost of arbitrating disputes there. This second principle thus helps to address one of the contemporary issues in international arbitration described as 'due process paranoia'.
On the basis of the detailed analysis and assessment conducted for the purposes of the Delos Guide to Arbitration Places (GAP), Delos recommends the following places of arbitration as safe: Amsterdam (The Netherlands); Auckland (New Zealand); Berlin (Germany); Calgary (Canada); Copenhagen (Denmark); Frankfurt (Germany); Geneva (Switzerland); The Hague (The Netherlands); Hamburg (Germany); Helsinki (Finland); Hong Kong (PRC); Lisbon (Portugal); London (UK); Madrid (Spain); Miami (USA); Montreal (Canada); Munich (Germany); New York (USA); Oslo (Norway); Ottawa (Canada); Paris (France); Port Louis (Mauritius); Porto (Portugal); Rotterdam (The Netherlands); Seoul (South Korea); Singapore (Singapore); Stockholm (Sweden); Sydney (Australia); Toronto (Canada); Vancouver (Canada); Vienna (Austria); and Zurich (Switzerland). (see Model Clauses Schedule 1). This list is reviewed on an annual basis.
DELOS PRINCIPLE 3 calls for pragmatism in the formation of tribunals. For disputes with a value below EUR 5 million, preference is given to the appointment of a sole arbitrator. The parties are given about 10 days in disputes with a value below EUR 200,000 and about 17 days in disputes with a value of up to EUR 5 million to agree on a joint nomination, failing which Delos will make the appointment. Delos maintains a network of potential arbitrators, but no closed list.
For disputes with a value greater than EUR 5 million, parties may select a three-member tribunal, with co-arbitrators to be designated within about 2.5-3.5 weeks from the start of the arbitration. If either party fails to nominate a co-arbitrator, Delos will designate the entire panel.
The Delos approach to the formation of tribunals aims at encouraging early cooperation between the parties, as part of setting the tone for the proactive resolution of their dispute. This philosophy also informs DELOS PRINCIPLE 4, which incentivises parties to anticipate disputes early.
At the contract formation stage, Delos provides model clauses, including language for the governing law of the contract and the confidentiality of any arbitration. Delos also encourages users to register their contracts with the institution by simply e-mailing them to Delos, (i) as a means to ensure contracts are finalised and not subsequently lost, and (ii) for the network benefit of Delos being able to anticipate needs and ensure access to suitable arbitrators. In return, Delos offers parties a reduced cost schedule in the event of arbitration.
In case of dispute, the Delos model clause provides for pre-arbitration negotiation. To ensure that parties invest the necessary resources into dialogue and preparing their cases, the Rules provide (i) that the costs incurred at this stage can be recovered in case of arbitration, and (ii) for a short time limit, once an arbitration has started, for the respondent to answer the claimant's notice of arbitration and for the parties to nominate the members of the tribunal.
Finally, Appendices 1-3 of the Rules provide model notices of arbitration, of defence (and counterclaim) and of reply, with page and exhibit limits, and a requirement to indicate whether any witness and/or expert evidence is to be anticipated. In this manner, Delos seeks to streamline the initial steps of the arbitration while providing the tribunal with the key information required to take charge of the case efficiently from the start.
For a more detailed analysis, please refer to Hafez R Virjee's article Activating Arbitration (Delos, 2017) (also available in a Spanish translation, under the title Activación de Arbitraje (Delos, 2017)).