Summary dispositions are designed to empower arbitral tribunals to render prompt decisions on discrete claims, defences or issues, and thus achieve both time and costs savings. While summary dispositions have become an increasingly prominent procedural tool in international arbitration, they also present challenges and risks.
Summary Dispositions in International Arbitration – A Procedural Tool with Both Benefits and Risks
As part of ongoing efforts to make arbitral proceedings faster and more efficient, various procedures for summary disposition — also called dispositive motions or applications for early determination — have emerged as an increasingly prominent procedural tool in both commercial and investment arbitration. These procedures can save both time and costs by addressing clearly unmeritorious claims and defenses, as well as dispositive issues, at an early stage of the arbitral proceedings. Users should nonetheless be mindful that these procedures also present certain challenges and risks.
Overview of Summary Dispositions in International Arbitration
While there is no precise definition, summary disposition is usually understood to mean the use of an abbreviated procedure to arrive at a prompt decision on one or more issues relating to the merits, jurisdiction, or admissibility. Often, the arbitral tribunal will provide for a limited exchange of written submissions and a brief hearing for oral argument, but will dispense with document production, evidence from fact and expert witnesses, and a full evidentiary hearing.
Historically, there was a lack of interest in, and perhaps even hostility to, summary dispositions in international arbitration. More recently, however, a number of arbitral institutions have adopted new rules providing for such procedures. At a minimum, these rules empower tribunals to dispose of claims that are manifestly without legal merit through some form of summary procedure. But there are also variations in scope (some rules apply only to claims, while others also apply to defenses or even any “suitable” issues), timing (some limit applications to the initial stages of the proceedings), procedure (some impose procedural requirements on the parties and the tribunal), and grounds for dismissal (some permit dismissal only for manifest lack of legal merit, while others provide for additional grounds such as manifest lack of jurisdiction, lack of factual merit, or inadmissibility, and one imposes no limit of any kind). Notable examples of such rules include the following:
- Article 41(5) of the International Centre for Settlement of Investment Disputes (ICSID) Arbitration Rules (introduced in 2006) enables parties to “file an objection that a claim is manifestly without legal merit.” The objection must be filed within 30 days of the tribunal’s constitution and before the tribunal’s first session. While the text refers only to a lack of legal merit, several ICSID tribunals have held that parties may also raise objections under this provision based on a manifest lack of jurisdiction.i
- Rule 29 of the Singapore International Arbitration Centre (SIAC) Arbitration Rules (introduced in 2016) allows parties, at any time during the proceedings, to file an application for “early dismissal of a claim or a defense” if it is manifestly “without legal merit” or “outside the jurisdiction of the Tribunal.” Should the tribunal decide to proceed with the application, it must issue an order or award thereon within 60 days. In 2017, SIAC adopted a similar provision in its Investment Arbitration Rules (Rule 26).
- Article 39 of the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) Arbitration Rules (introduced in 2017) is similar to SIAC’s Rule 29 but broadens both the scope of and grounds for a decision to any issue “suitable to determination by way of summary procedure” without the need for the issue to be “manifestly unsustainable.” Also, there is no formal time limit for deciding on this type of application.
- Article 26 of the China International Economic and Trade Arbitration Commission (CEITAC) Investment Arbitration Rules (introduced, along with the rules themselves, in 2017) provides for the “early dismissal of claims and counterclaims” and closely tracks Article 41(5) of the ICSID Arbitration Rules.
- Article 43.1 of the Hong Kong International Arbitration Centre (HKIAC) Administered Arbitration Rules (introduced in 2018) addresses not only manifestly unmeritorious claims and defenses but also points of law or fact that, even if assumed to be correct, could not result in an award in favor of the party relying on that point. This provision also imposes time limits for (i) the tribunal’s decision on whether to proceed with the application (30 days) and (ii) the tribunal’s decision on the summary disposition itself (a further 60 days).
- Article 22.1(viii) of the London Court of International Arbitration (LCIA) Arbitration Rules (introduced in 2020) empowers tribunals to determine whether any claim or defense “is manifestly outside the jurisdiction of the Arbitral Tribunal, or is inadmissible or is manifestly without merit.” This provision is the most open-ended of its kind; it says nothing about the procedure to be followed and even leaves open the possibility that tribunals may embark on such procedures at their own initiative.
- Although the International Chamber of Commerce (ICC) Arbitration Rules do not address summary dispositions, the ICC’s Practice Note has specified since 2017 that applications may be made “for the expeditious determination of one or more claims or defenses, on grounds that such claims or defenses are manifestly devoid of merit or fall manifestly outside the arbitral tribunal’s jurisdiction.”
Challenges and Risks of Summary Dispositions
The growing acceptance of summary dispositions in international arbitration is a welcome development, but it also comes with certain challenges and risks that users should keep in mind:
- While many commentators liken summary dispositions to motions for summary judgment and motions to dismiss in domestic litigation, this comparison is unhelpful. These types of court procedures mainly exist in common law jurisdictions, and their impact is very different because the proceedings themselves are different. For example, parties can appeal summary judgments in most common law jurisdictions, but this is not generally possible for summary dispositions in international arbitration.
- Summary dispositions can improve efficiency by enabling tribunals to dispose promptly of frivolous claims or defenses. In the right circumstances, this can significantly reduce the time and costs associated with an arbitration. Even when only certain claims or defenses are dismissed at an early stage, this may lead the parties to narrow the issues in dispute or come to the negotiating table. That said, it can be difficult for a tribunal to ascertain in advance whether a particular application will dispose of all or a material part of the dispute. If it does not, litigating such applications can add to the overall time and costs required to resolve an arbitration.
- One of the major challenges of summary disposition procedures is to ensure due process. Certain tribunals, in seeking to be expedient, may fail to respect a party’s right to be heard. Given that many of these rules are relatively new and international best practices have yet to be established, there is some uncertainty as to how tribunals are to strike the right balance between efficiency and due process. For example, it remains unclear whether a tribunal must grant a hearing as part of a summary disposition procedure if requested by one of the parties. In these circumstances, unsuccessful parties can be expected to raise arguments about alleged due process violations in an effort to set aside or resist the enforcement of the resulting awards. While U.S. courts have frequently upheld the use of summary disposition procedures in domestic arbitration,ii there are very few court decisions addressing the use of these procedures in international arbitration. In one decision, the English High Court observed in obiter dictum that an ICC tribunal’s decision to dispose summarily of a claim likely did not violate due process, although the procedure in that arbitration involved two short hearings featuring witness testimony.iii
- There is also a risk that parties may file frivolous applications for summary disposition in order to delay and disrupt the arbitral proceedings. Even if acting in good faith, parties could file applications that are inappropriate or unlikely to result in time and cost savings. Nonetheless, the experience to date suggests that there has not been widespread misuse of summary dispositions. For example, since the introduction of Article 41(5) of the ICSID Arbitration Rules in 2006, parties have made applications for summary disposition in only 33 ICSID arbitrations, representing about 6% of all arbitrations over that period. And where a decision was rendered, the applicant was successful in whole or in part in 8 out of 18 cases.iv
Practical Guidance for Summary Dispositions
When considering whether to make an application for summary disposition or how best to respond to such application, the following practical guidance may be of assistance.
- If you consider that summary dispositions are an attractive feature of international arbitration, choose a set of arbitration rules that expressly provides for this procedure. This will limit the risk that the resulting award will be set aside or declared unenforceable, as national courts generally defer to party-agreed procedural rules when assessing whether there have been due process violations.
- If you plan to apply for summary disposition, select arbitrators who will actively manage the proceedings and who have the experience, judgment, and availability to do so effectively. Arbitrators who are too passive or overly busy may refuse to allow applications for summary disposition even when they could result in significant efficiencies. Alternatively, they may blindly proceed with applications that are spurious and merely intended to disrupt the proceedings. At the other end of the spectrum, an insufficiently prudent arbitrator could cut corners and jeopardize the parties’ due process rights, which may in turn put the enforceability of the award at risk.
- Carefully consider the strategic implications of applying for summary disposition. Certain arbitrators may be reluctant to dispose of the entire dispute at an early stage based on a limited understanding of the overall factual matrix and equities of the case. This could result in the tribunal rejecting an otherwise promising legal defense at the outset of the proceedings. For example, a defense based on a limitation period may be far more attractive to the tribunal at the end of a long and complicated arbitration, when that defense could offer a convenient and straightforward basis for dismissing the case.
- Instead of applying for summary disposition, consider requesting the bifurcation of a claim, defense, or issue in dispute. While bifurcation may involve a somewhat more extensive procedure, potentially including an evidentiary hearing, these proceedings can be fairly expeditious in the right circumstances. Bifurcation is most commonly used to address issues of jurisdiction or liability, but there is nothing to prevent a tribunal from bifurcating other discrete legal or even factual issues relevant to the merits. Accordingly, bifurcation may bring some of the efficiencies of summary dispositions without the same procedural constraints and due process risks.
- When faced with an application for summary disposition that is merely intended to delay or disrupt the proceedings, raise this concern squarely with the tribunal and press for the application to be rejected immediately. If the tribunal is unwilling to do so, consider requesting that the application proceed in parallel with the briefing on the merits of the dispute so as to minimize the delay and disruption that will result if the application for summary disposition is ultimately unsuccessful.
- Applications for summary disposition afford little room or time for inefficiencies and errors and can have dramatic consequences for the overall dispute. Consequently, the need for experienced and strategic international arbitration counsel is critical.
i See e.g., Global Trading Resource Corp. and Globex International, Inc. v. Ukraine (ICSID Case No. ARB/09/11), “Award” (1 December 2010) at paras. 30-31; Brandes Investment Partners, LP v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/08/3), “Decision on the Respondent’s Objection under Rule 41(5) of the ICSID Arbitration Rules” (2 February 2009) at paras. 44-55.
ii See e.g., Scott v. Prudential Sec, Inc., 141 F.3d 1007, 1017 (11th Cir. 1998); Campbell v. American Family Life Assurance Co. of Columbus, Inc., 613 F. Supp. 2d 1114 (D. Minn. 2009); Weirton Medical Center Inc v. Community Health Systems Inc (N.D. W. Va. Dec. 12, 2017).
iii Travis Coal Restructured Holdings LLC v. Essar Global Fund Limited (Formerly Known as Essar Global Limited),  EWHC 2510 (Comm), paras. 42-54.