Commercial Arbitration: Accessing Expedited Arbitration in the Wake of Covid-19

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In my last post, we reviewed a number of options to encourage greater efficiency in arbitration. Of those, expedited, or fast-track arbitration, was the option I received most inquiries on. So, here are some additional details on what expedited arbitration offers and possibilities to get there if it's not specifically referenced in your arbitration / dispute resolution provision.

Arbitral institutions' approach to expedited arbitration varies. Here is an overview of how the process is accessed under the AAA and ICDR rules.

What is the difference between an expedited process and standard procedures?

Simply put, expedited rules were designed to move cases along at a quicker clip than standard procedures. Here are examples of how an expedited process is truncated:

  • One arbitrator usually presides, instead of a panel of three arbitrators

  • Information exchange is more limited

  • Limitation of the opportunity for extensions

  • Possibility of foregoing the in-person hearing for a documents-only process

  • Deadlines are more strict, including time required for issuance of award

What triggers expedited arbitration?

Generally, expedited arbitration is triggered if one of the following conditions are met:

  • Amount in controversy falls within the threshold for the expedited process

  • Parties contracted for it in their agreement, regardless of amount in dispute

  • Parties agree to utilize expedited process by agreement after a dispute has arisen

The AAA Commercial Arbitration Rules provide that expedited procedures apply in any case where the claim or counterclaim does not exceed $75,000 (exclusive of interest, attorneys’ fees, and arbitration fees and costs). If no claim exceeds $25,000, the dispute will be resolved by submission of documents. Parties can, however, request an oral hearing, or the arbitrator can determine that an oral hearing is necessary. Unless otherwise agreed, AAA Expedited Procedures apply in two-party disputes only.

ICDR, the international division of AAA, in its International Expedited Procedures, has a slightly higher threshold for expedited arbitration, $250,000, though parties can agree to utilize the rules in cases of any size. Claims up to $100,000 are presumed to be heard via documents-only processes.

Is it possible to utilize expedited arbitration if the arbitration / dispute resolution clause makes no mention of it?

Here are some considerations as to whether expedited arbitration might be utilized even if it is not spelled out in your contract.

  1. Review the clause to determine which, if any, institutional rules are referenced. Depending on the rules selected, the amount in controversy may trigger an expedited process (as outlined above). Keep in mind that the threshold for triggering expedited arbitration varies by arbitral institution. While the arbitration or dispute resolution clause may make no mention of an expedited process, parties may be able to utilize it anyway if the amount in controversy puts the case within the purview of expedited arbitration according to the rules that are referenced in their contract.

  2. Parties can agree to use expedited arbitration. If the dispute is above the requisite threshold for triggering expedited arbitration, parties can memorialize their agreement to utilize the expedited process and then notify the institution.

  3. Parties can advocate for an expedited process. If the foregoing options are not viable, parties can apply to the arbitrator or panel to leverage expedited procedures in lieu of standard rules.

Is it possible to utilize expedited arbitration if the dispute resolution clause requires a visit to court?

Again, if the parties agree, they may enter into a submission agreement, indicating the expedited process they intend to utilize. By way of background, a submission agreement is made once a dispute has arisen in the absence of an underlying arbitration clause. Submissions agreements outline the parameters of the arbitration, similar to arbitration clauses.

Concluding Thoughts

Parties do have options for pursuing expedited dispute resolution while courts are still starting to re-open. The backlogs likely in many jurisdictions, coupled with predictions of an onslaught of disputes arising over experiences of past few months, lends to heightened creativity when it comes to reaching settlement expeditiously. This post is intended as food for thought for parties to consider in weighing dispute resolution options in the wake of Covid-19.