The ADGM Arbitration Guidelines

The article is a comprehensive piece on the ADGM Arbitration Guidelines, right from their philosophy and purpose to their foreseeable objectives and impact.

Since the enactment of the ADGM Arbitration Regulations in 2015, which established ADGM as a new seat of arbitration in the UAE, ADGM has been making great strides to establish its standing as one of the world’s most progressive venues for the resolution of disputes by arbitration.

The Arbitration Guidelines of the ADGM Arbitration Centre (the Guidelines) are one of the latest steps in this process. The Guidelines aim to provide users of arbitration, their counsel and arbitrators with a set of procedures that they can choose to use in their arbitral proceedings, whether those proceedings take place at the ADGMAC or elsewhere.

The purpose of this brief article is not to describe the content of the Guidelines (they can be read), but to describe the philosophy behind them, because that philosophy is somewhat different from that of many of the other arbitration-related publications and sets of standards to which the Guidelines have been compared.

As a starting point, it is important to understand the genesis of the Guidelines. The essential question that ADGM sought to answer at the outset was “what can we do to help parties make the arbitration process better?” The way ADGM then tackled that question was to conduct a bottom-up analysis which first focused on extensive discussions with the end-users of arbitration in order to determine what it was that they saw as problematic in the arbitration process and what they wanted to see done differently. Only once ADGM had properly understood the needs of the end-users was pen then put to paper to develop a draft set of proposed guidelines, which was used to consult with the other actors who serve the arbitration world, i.e. counsel, experts, and arbitrators. That ‘user-driven’ starting point helps explain how the Guidelines differ from other arbitration-related publications and standards.

First, the Guidelines are truly agnostic as between the various different forms of practice in the arbitration world, and do not reflect a bias in favour of common law, civil law or any particular variant or derivative of one or other system. So, for example, to describe the Guidelines as “bridging the procedural divide between civil and common law arbitrations” is not quite the correct prism through which to view them. Instead, the Guidelines straddle common law and civil law practices and are equally suited, with modifications if desired, for arbitrations conducted under both systems. There are features of the Guidelines that the reader might at first blush recognize as deriving their inspiration in one system of law or another, but importantly there is only one agenda that underlies the text of the Guidelines: the desire to assist parties, their counsel, and arbitral tribunals to make the arbitration process better. There is no cultural dimension to, or dogma sitting behind, the Guidelines, besides the drive for greater efficiency and effectiveness in the arbitral process.

Secondly, whereas many arbitration ‘rules’ and ‘guidelines’ that have been published around the world in recent times tend to present themselves as the panacea for specific ills befalling the arbitration process (for example, uncontrolled document production), and purport to offer parties the binary choice of either adopting them wholesale and curing the ill in question, or not doing so and continuing to suffer; the Guidelines take a different approach entirely. They do not purport to provide a single solution to a series of problems. Rather, they provide the parties, their lawyers, and arbitrators with a multi-purpose toolkit to help them deal with some of the challenges that arise in modern arbitration. The Guidelines are best seen as templates that parties can use, customize, and adopt as they see fit and appropriate for their particular case.

Different cases will have different requirements, and the Guidelines are structured in a way that reflects this reality. It is this philosophy which explains the division of the Guidelines into “Modules” and indeed is the reason why they can be downloaded in Word format from the ADGM website – they are intended to be looked at, thought about, picked apart, edited and used only to the extent it is considered useful in a specific case. In that sense, the Guidelines are not best categorised under the rubric of procedural ‘soft law’, which is the term often used to describe the codification of procedural norms, such as the IBA Rules on the Taking of Evidence in International Arbitration, the IBA Guidelines on Conflicts of Interest in International Arbitration, the CIArb International Arbitration Practice Guideline on Party-appointed and Tribunal-appointed Experts, and other similar non-binding publications of other institutions and non-state actors. The Guidelines are in a category of their own: a useful multi-purpose toolkit for parties, their lawyers, and arbitrators who have a desire to make their particular arbitration more efficient and more in line with their expectations.

So, for example, it may be that a newly-constituted tribunal in a given case is particularly concerned about ensuring that the arbitration is kept as streamlined as possible, and proposes that the parties use Module 1 (Written Submissions, Issues and Applications) by integrating it into Procedural Order No. 1. In particular, the tribunal may incorporate the requirements that parties should submit their written submissions in electronic format only, that pleadings should be focused and limited in length, and that reply submissions are to be limited to responding to points raised in the submission to which it responds (with no new issues to be raised save where there is permission or agreement). The manner in which the Guidelines have been developed and presented grants the tribunal, and the parties, that degree of flexibility.

What is the case for Module 1 applies equally to the other Modules in the Guidelines, each of which addresses an important aspect of arbitral procedure.

Modules 2 (Fact Witness Evidence) and 3 (Expert Witness Evidence) provide guidance on the submission of fact witness and expert evidence respectively, in both cases with a view to avoiding what can sometimes be a significant waste of time and costs caused by excessive and unfocused evidence that at times can stray into submission. These Modules empower the tribunal to direct the parties to be disciplined and to identify early on the witnesses and experts they each intend to rely on, the issues that each witness and expert will address, and how such material would materially assist the Tribunal in deciding the claims before it. Module 4 (Documentary Evidence) covers, amongst other things, document requests and production, which are widely understood to have become unwieldy and overly expensive in modern arbitration. Again, there is no agenda beyond efficiency and effectiveness of the arbitral procedure – and so parties are able to limit or amplify the extent of document production as they see fit. A notable principle in Section 6(2) of Module 4 is to preclude a party from submitting document requests which seek the production of documents that support the other party’s own claims, thus preventing document requests from being used tactically as a means of identifying evidentiary gaps in the other party’s claims. Recognising that often very significant costs are incurred in connection with in-person hearings, Module 5 is essentially a protocol to ensure that hearings are organised and conducted in a fair, efficient, and cost-effective manner, having regard to the complexity and value of the issues in dispute. It places heavy emphasis on the use of technology and the avoidance of waste.

It is important to note that at the root of many aspects of the Guidelines is the “list of issues.” This is not meant to replicate the unhappy experience encountered in certain (mainly common law) arbitrations, whereby shortly before the hearing the tribunal delegates to the parties themselves the important function of identifying and defining the issues in dispute that emerge from the parties’ submissions, leading to limited agreement between the parties on anything other than the most anodyne of lists. Rather, the list of issues proposed in the Guidelines is to be developed early on, and is intended to become something altogether more meaningful, anchoring many of the other procedural steps throughout the arbitration – not only further pleadings, but also the extent of fact and expert witness evidence, and the extent of document production. As such, if done properly, the list of issues should be a powerful tool to drive efficiency and focus in the arbitration.

One of the more controversial features is Module 6 (Counsel Conduct), which has the objective of promoting procedural fairness between the parties by setting out the expected standards of conduct for party representatives, along with discussion of recourse and consequences in the event of a breach of these standards.

Module 6 is considered ‘controversial’ in the sense that it received much attention during the consultation process before the Guidelines were published, and indeed it has been the subject of much discussion in conferences since. At the same time, however, this Module was very widely supported during its development, and has been welcomed since its publication.

During ADGM’s consultation process, the end-users of arbitration expressed a particular concern about the ‘hijacking’ of the arbitration process by lawyers on both sides and the waste of money and time that can then cause, especially if one or both sides resort to underhand tactics aimed at undermining the arbitral process.

In light of this, Module 6 of the Guidelines expressly sets out best practice guidance in relation to the conduct of counsel in arbitral proceedings. If a complaint against a party representative is raised (whether by the opposing party or by the Tribunal on its own initiative), the Tribunal is empowered to order a series of sanctions, including: to issue a written reprimand or even a caution; to draw adverse inferences when considering the evidence relied upon or legal submissions made; to issue a costs award against the party instructing the party representative in question; or to take any other appropriate measures the tribunal considers necessary to preserve the fairness and integrity of the proceedings.

During consultation with lawyers and arbitrators, though, a different fear was expressed, namely that this process might become a new page in the guerilla tactician’s handbook, with intransigent parties launching baseless allegations against their opponents in a bid to distract from the core issues in play. This fear should be assuaged, though, by the provision in Section 9(8) of Module 6, which provides that if a party representative makes a complaint which is unsubstantiated, unparticularised or otherwise unfounded, then such an allegation will itself amount to a breach of the Guidelines. Module 6 therefore represents a self-reinforcing scheme that should not permit abuse.

Finally, it is worth noting that while much of the initial reaction to the Guidelines overall has been to focus, understandably, on the forward-looking approach they take to guide efficiency in arbitration, this tells only part of the story. Efficiency is, of course, part of the Guidelines’ raison d’etre, but there is another facet that is also important. By empowering tribunals to be focused and disciplined with submissions, evidence, applications, hearings and conduct, the Guidelines can help parties and tribunals avoid expensive procedural and tactical distractions and thereby ensure that tribunals are focused on deciding the matters before them, and only those matters, in a manner that respects due process at all times. This should have the effect not only of saving cost, but of reducing challenges to awards on the basis of infra petita, extra petita and other due process infringements. Ultimately, the utmost objective of the end user of arbitration is to secure an enforceable award vindicating their position.