Written by: Riccardo Aquilini
Reading time: 4 min.
International arbitration, by its nature, history and function, tends to adapt to the needs of society and of the parties who use it. For these reasons, the arbitration rules of the major permanent institutions are constantly evolving. In recent years, the demands of the parties have changed and therefore the structural rules of arbitration need to be revised.
Nowadays, when we talk about the needs of the parties who use the arbitration tool, we refer to the so-called “iron triangle”, i.e., a pyramid composed of two or more parties. a pyramid composed of three different vertices: cost, duration and quality.[1]
These three vertices are essentially the three units of measure on which to benchmark the actual and functional conduct of arbitration. Depending on the specific case and the dispute, the parties may prefer a longer duration to minimize costs and maintain an average standard of quality, or they may prefer to have an award in a shorter period of time, giving up quality or a lower price. The focus is on finding the balance for the most efficient arbitration process. This balance, as many authors have pointed out, can only be achieved through the proper use of flexibility[2].
The fundamental role in achieving balance and making the best use of this principle of flexibility belongs to the arbitrator. The arbitrator by definition possesses the qualities that make him ideal to be appointed by the parties to resolve the single dispute in question, he must have good analytical skills, judgment, interpersonal skills and a strong work ethic, as well as obviously possessing the characteristics of impartiality and third party to be able to decide the dispute. In addition to all these characteristics, many international authors now emphasize that it is of fundamental importance that the arbitrator possesses qualities that were once held only by business managers. In fact, it is now appropriate to speak of the arbitrator as a true project manager of the entire arbitration process. In this way, arbitration is no longer seen as a formal alternative process, but as a project, as defined by the PMI (Project Management Institute), which says that project management is: “a temporary endeavour undertaken to create a unique product, service or result”[3]. And so, according to this view, arbitration is a temporary effort, resulting from a specific agreement between two parties, undertaken to create a unique outcome, namely, the resolution of the particular dispute before the arbitrators. An arbitration therefore has no existence beyond the life of the case; it must be outcome-oriented, with an emphasis on what is to be delivered rather than what is to be done [4].
Obviously, this interpretation, above all, for civil law countries that have a strong legal tradition, cannot be completely correct, risking the institute drifting, transforming the entire project as if it were a package to be delivered in a short time to a low budget without taking into account the quality of the award.
However, while analyzing this new role that arbitration can take on, it must be stressed that every project must have a project manager, someone who makes the decisions, coordinates the work and controls the progress of each phase of the project; this task is carried out by the arbitrators and their staff. And here is how the role of the arbitrator must evolve, he must have the ability to take the content of the parties’ arbitration agreement and turn it into a concrete, real-world procedural structure. He or she must be able to plan a schedule that is functional and responsive to concrete needs, and prepare a budget plan accordingly, setting the costs of the entire proceeding. In addition, the leadership that arbitrators must demonstrate must allow them to have active and instant control of the schedule and its feasibility, to use all the tools available to make the arbitration as efficient as possible, and to achieve the highest degree of collaboration and dialogue between arbitrators and parties.
When we talk about staff, we are talking about the arbitration institution, which also plays a key role in managing and supporting the work of the arbitrator. In order to better understand the role of the arbitration institution, it is helpful to set out the PMI definition: “a management structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques.
In conclusion, it is right to emphasize that only through proper management of the process, planning and processing it in a concrete and rational way, it is possible to arrive at a fair and efficient dispute resolution able to ensure balance in the iron triangle.
As Lord Mustill said back in 1989: “… it is to my mind undeniable that international commercial arbitration faces some serious problems. At least in its larger manifestations it can be too slow, too formalised and too expensive. It also lacks the procedural teeth which are the prime advantage of the courts. Nobody has yet discovered why the dinosaurs became extinct, but it is a reasonable surmise that their bulk was a significant factor. It would be a pity if arbitration went the same way. This is unlikely to happen, but it is at least worth asking whether a course of slimming might be in order.”[5] And here is that the arbitration project management, can give the impulse to be able to solve the major problems of international arbitration, the road is still long but it seems to be able to be the correct one.
[1]This concept of iron triangle is now rooted for years in the international experience so as to focus the work of many authors (see for example: Jeorg Risse, “Ten Drastic Proposals for Saving Time and Costs in Arbitral Proceedings” (2013) vol. 29 n.3 Arbitration Intl ; Philipp A Habegger, “Saving Time and Costs in Arbitration” in Manuel Arroyo, ed, Arbitration in Switzerland: The Practitioner’s Guide , Alphen aan den Rijn: Kluwer Law International, 2013) and have a significant impact on arbitration regulations and legislative reforms in certain countries (see, for example, the amendment to the Indian Arbitration and Conciliation Act of 1996, which provides for a maximum duration limit of 12 months for arbitration proceedings).
[2] Elena Zucconi Galli Fonseca, Il processo flessibile (con il focus sull’istruttoria), Quaderni de “il giusto processo civile” 13, 2018
[3] A Guide to the Project Management Body of Knowledge, 5th ed (Newtown Square: Project Management Institute, 2013) at ch. 1.2 [PMBOK Guide].
[4] B. Giaretta, Project Management in International Arbitration, McGill Journal of Dispute Resolution, vol.3, 2016
[5] Michael Mustill, “Arbitration: History and Background” (1989) 6:2 J Intl Arbitration.
