Time and Cost Management in Arbitration: Practical Solutions and Improvements

As commercial disputes become increasingly complex, effective time and cost management are

essential for arbitration to remain a viable dispute resolution method. The biggest concerns regarding the arbitration process are cost, time and efficiency; therefore, arbitration is subject to criticism in these aspects. Thus, it is important to face the criticism and take effective and reasonable steps to correct the existing problems. Being able to manage time and costs properly in arbitration is no longer just a choice; it is a requirement for the sustainability of arbitration. In this context, some practical solutions that will increase time and cost efficiency in the arbitration process are as follows:

I. Time Management Strategies

1. The Role of the Arbitration Agreement

A clear arbitration agreement will form the basis for a smooth arbitration process. Because the

uncertainties that will occur in the processes carried out without an arbitration agreement will cause delays and additional costs.

A clear arbitration agreement may contain:

• The applicable institutional rules and the place of arbitration,

• The number of arbitrators,

• The language of the proceedings chosen to avoid interpretation problems.

(ICC, 2018)

Following a valid and clear arbitration agreement, the most important element that will shape the quality of the process is the selection of the arbitrator.

2. Structuring an Effective Tribunal

The structure and approach of the arbitration tribunal significantly impacts the length and overall efficiency of the arbitration. While reputation is important, parties should focus on their

accessibility, subject matter expertise, and ability to proactively manage cases when selecting arbitrators. A tribunal with a robust and hands-on style is better equipped to maintain procedural discipline, limit unnecessary delays, and resolve disputes within reasonable timeframes.

Once suitable arbitrators have been selected, it is important for the parties to hold a case management conference together to structure the process.

3. Case Management Conferences

Early case management conferences (CMCs) provide a valuable opportunity to align the expectations of all parties and determine the procedure. Effective arbitration proceedings can

include:

• Establishing a robust but realistic procedural timetable,

• Narrowing down the legal and factual issues at the outset,

• Encouraging agreement on document production and witness presentation timelines.

(Hinchey & Thorpe, 2011)

Once the process is clarified, it becomes important to take advantage of technical opportunities that will support time management in arbitration.

4. Leveraging Technology

Technological tools play an increasingly vital role in streamlining arbitration. Their use enhances transparency, reduces costs, and improves time management. Key technological practices include:

• Conducting virtual hearings to minimize travel and logistical delays,

• Using secure, cloud-based platforms for document storage and access,

• Implementing online calendars and tracking systems to monitor procedural deadlines.

(Debevoise & Plimpton LLP, 2015)

Comparative Case Insights on Time Management

Real-life examples reveal how differences in tribunal engagement significantly affect both timing and outcomes. Consider two recent high-value arbitrations: both seated in London, governed by U.S. law, involving sophisticated parties and comparable sums in dispute. Yet the outcomes diverged dramatically due to differences in case management.

Case A:

• The tribunal was proactive and structured.

• Full hearing and award delivered within 6 months.

• No deadline extensions.

• Estimated total cost: $5 million.

• Use of video conferencing and virtual hearings streamlined the process.

Case B:

• The tribunal was passive and slow to engage.

• Nearly 4 years to reach a final award.

• 19 extensions granted (many on the due date).

• Estimated total cost: $9 million.

• Delays included 9 months post-hearing for final award and another 6 months for the costs award.

This stark contrast underscores the pivotal role arbitrators play in keeping cases efficient. An active tribunal that limits procedural sprawl and adheres to timelines can drastically reduce both the time and cost of arbitration.

(Bogart, 2024)

II. Cost Management Strategies

5. Control Document Production

Overly broad and unfocused document requests lead to increased arbitration costs. To avoid this, the IBA Rules for Taking Evidence should be considered. In the context of these rules:

• Allow only narrow and relevant document requests,

• Discourage speculative or excessive discovery,

• Encourage the use of electronic document management systems for efficient exchange.

(IBA Rules)

6. Budgeting and Transparency

Legal fees (usually billed hourly) account for over 80% of total arbitration costs, and delays only serve to increase these costs. (Bogart, 2024)

Effectively managing arbitration costs requires not only strategic planning, but also strong collaboration between the parties and their legal teams. According to the International Court of Arbitration (ICC), 82% of arbitration costs are covered by party expenses such as legal fees, expert reports, and witness expenses, while only 16% is attributed to arbitrator fees and 2% to administrative costs. (ICC, 2018)

Therefore, the most effective cost savings in arbitration fees can be achieved by better controlling party costs. Assessing the cost-benefit of each procedural step before initiation helps to avoid unnecessary expenditure.

To do this:

• Parties should develop budgets with their lawyers for each stage of the proceedings.

• Cost control mechanisms, such as fee caps for legal teams and experts, should be

introduced to ensure that costs remain within agreed limits.

• Courts can encourage periodic cost updates and set reasonable limits for excessive

submissions or unnecessary evidence.

Furthermore, encouraging an open dialogue between parties and lawyers about cost expectations ensures transparency and collective accountability.

(Martin, 2016)

7. Encourage Early Settlement

While arbitration is designed to reach a final and binding decision, parties should remain open to compromise at various stages of the process. Early resolution not only saves time and money but can also preserve business relationships. Mediation sessions can be scheduled during the arbitration timeline; early impartial assessments can be conducted to assess the strengths and weaknesses of each party’s position.

(Hinchey & Thorpe, 2011)

Time and cost continue to be the two most delicate balances in the arbitration process. The effective management of these two elements directly affects not only the efficiency of the process but also the trust in arbitration. Making effective choices from the beginning of the process, selecting appropriate arbitrators and using technology effectively are the main foundations of sustainability in arbitration. A sustainable and effective system in arbitration is only possible with the joint efforts of the parties, lawyers and institutions.

References

1. Bogart, C. (2024). A tale of two arbitrations: Burford’s Bogart on reducing time and costs.

2. Rivkin, D. W., & Rowe, S. J. (2015). The Role of the Tribunal in Controlling Arbitral Costs.

3. Hinchey, J. W., & Thorpe, R. W. (2011). Controlling time and cost in arbitration. JAMS Publications.

4. International Bar Association. (2010). IBA rules on the taking of evidence in international arbitration.

5. International Chamber of Commerce. (2018). Controlling Time and Costs in Arbitration.

6. Martin, C. (2013). Costs of Arbitration and the Options for Controlling Those Costs. DePaul Business & Commercial Law Journal