V. The Arbitral Procedure

5.1 Party Autonomy

5.1.1 Guiding Principle for the Arbitration

Generally, there are no fixed rules of procedure in arbitration; this provides a high degree of flexibility on how to conduct arbitral proceedings (see supra 1.1.). Even though institutional (and ad hoc) rules of arbitration (see supra 1.1.) provide for an outline of various procedural steps, the detailed regulation of the procedure to be followed is established either by agreement of the parties or by directions from the arbitral tribunal. The arbitrators’ discretion to determine the arbitral procedure, in the absence of agreement by the parties on such matters, is another foundation of arbitral proceedings.

Party autonomy is the guiding principle in determining the procedure to be followed in arbitration. On this basis, the parties may confer upon the arbitral tribunal such powers and duties as they consider appropriate regarding the specific case. They may choose e.g. (i) formal or informal methods of conducting the arbitration; (ii) adversarial or inquisitorial procedures; and (iii) documentary and/or oral methods of presenting evidence.

5.1.2 Limits

Once the procedure is agreed with the parties, or otherwise determined by the arbitral tribunal, the arbitral tribunal must conduct the arbitral proceeding in accordance with those rules of procedure. If it fails to do so, the award may be set aside or its recognition and enforcement may be refused (see infra VIII.). However, the autonomy of the parties to determine the procedure is not unrestricted. The procedure must comply with any mandatory rules and public policy requirements of the law of the judicial seat of the arbitration. The Austrian Code of Civil Procedure, for instance, provides that the parties shall be treated fairly and that each party shall be granted the right to be heard. Such a rule requires that each party should be given a fair hearing and, more generally, a reasonable opportunity to present its case. Moreover, the procedure should take into account the provisions of international arbitration conventions that aim to ensure that arbitral proceedings are conducted fairly (e.g. the New York Convention, see infra VIII.). Limitations may also be introduced by the arbitration rules chosen by the parties.

5.2 Control of the Proceedings

At the beginning of an arbitration, the parties are in control of the process. In ad hoc arbitration (see supra 1.2.), where no institution is involved, they may write a complete set of procedural rules to govern the way in which the proceedings are to be conducted. In institutional arbitration, the procedural framework is provided by the institution’s rules, to which the parties agreed when they signed the arbitration agreement referring to the rules of the institution concerned.

Upon establishment of the arbitral tribunal, day-to-day control of the proceedings moves to the tribunal. However, it is fair to say that the transfer of control is neither total nor immediate. The arbitral tribunal usually engages in a dialogue with the parties on procedural matters, and often a “Procedural Order No 1” is issued to determine the essential elements of the proceedings and the time limits within which each procedural step is to take place.

5.3 Commencement of the Proceedings

5.3.1 Request for Arbitration

In order to commence the arbitration, the first procedural step in most arbitration proceedings is the submission of a “request for arbitration” or “notice of arbitration”. The function of such a document is to inform the other party or parties – the respondent(s) – that (i) arbitral proceedings have been initiated against it/them; (ii) a particular claim has been submitted for arbitration; and (iii) to provide the general context of the claim asserted against it/them.

The required contents of a request for arbitration vary depending on the parties’ arbitration agreement, the applicable institutional rules and national law. Under the 2013 Vienna Rules for instance, only skeletal information is required, including the parties’ identities, specification of the arbitration agreement, a summary of the facts, a specific request for relief and particulars regarding the arbitrators and their nomination. As a practical matter, it may be advisable to include more detailed allegations about the claims, but this is usually optional, for tactical reasons, and is not often mandatory.

5.3.2 Reply and Potential Counterclaim

National law – like the Austrian Code of Civil Porcedure – does not address the procedures relating to replies to a request for arbitration or the assertion of counterclaims. Instead, it leaves this to the arbitration agreement or the arbitrators’ procedural discretion. Under most institutional rules (including under the 2013 Vienna Rules), the respondent will be granted an opportunity, within a specified time limit, to reply to the request for arbitration and assert counterclaims, if any. The time to submit a reply is generally rather short, and the arbitral tribunal, or arbitral institution (whichever is appropriate in the circumstances) often extends these deadlines upon request of the respondent.

5.3.3 Advance on Costs

At the commencement of most arbitrations, the parties are required to provide in equal shares an advance on costs with respect to the fees of the arbitrators. Most institutional rules (including the 2013 Vienna Rules) contain provisions for payment of an advance on costs, and arbitrators often have the power under national laws to require payment of an advance, even absent an express provision to that effect. The amount of the advance on costs is based on the expected total amount of fees and expenses of the arbitrators (see infra VI.). If the parties do not pay the advance, the arbitration will usually not proceed; if one party (often the respondent) fails to make payment, the other party may do so on its behalf so that the proceedings may continue. Under the 2013 Vienna Rules, it is expressly provided that the tribunal may in such instances order the defaulting party to reimburse the party who has paid the full advance on costs.

5.3.4 Constitution of the Arbitral Tribunal

The constitution of the tribunal is a critical procedural step at the outset of any arbitration. There are a variety of mechanisms for appointing arbitrators, found in both institutional rules and in arbitration agreements (see supra III.).

5.4 Evidentiary Matters

5.4.1 Content

Evidentiary matters essentially include the admissibility and weight of evidence and the relevance of certain lines of questioning. In general, arbitration laws in numerous jurisdictions grant arbitrators broad authority to decide these evidentiary issues. Under certain institutional rules (the 2013 Vienna Rules for instance), the tribunal may (also) on its own initiative collect evidence, question parties and/or witnesses, request the parties to submit evidence, and call experts. In practice, tribunals typically do not apply strict rules of evidence that may be applicable under domestic litigation laws.

5.4.2 Basic Structure

In practice, the parties must – following the request for arbitration and the respondent’s answer thereto (if any) (see supra 5.3.) – as a first step present the case in writing in a comprehensive way including: (i) substantiated allegations of the relevant facts; (ii) the identification and submission evidence in support of the allegations; and (iii) legal reasoning of the remedies requested (see infra VI.). As a second step, the evidence is presented to the tribunal through the following procedures: (i) the questioning of the parties’ witnesses; (ii) hearing of the experts designated by the tribunal (if any) and/or the parties (again, if any); and (iii) concluding comments of the parties, mostly in writing (so-called post-hearing submissions or briefs).

5.4.3 Specific Features

Document production is an essential evidentiary instrument in most arbitrations. The IBA Rules on Taking of Evidence in International Commercial Arbitration provide guidelines pursuant to an international standard, which ensures that such procedure may be conducted in a fair and efficient manner. Moreover, it combines elements of document production of both the civil law and common law jurisdictions, which generally differ considerably.

In an arbitration, the preparation of witnesses is common practice in order to structure the evidentiary hearing more efficiently. Moreover, so-called witness statements, which are commonly used in English practice, are usually submitted to the tribunal with the parties’ submissions. This simplifies the preparation for the evidentiary hearing as it helps to achieve a focused questioning of the witnesses on the issues on which they have already given (written) evidence. In turn, this usually leads to a reduction of the length of the hearing (and, hence, a reduction of costs; see infra VI.).

5.5 Structure of a Typical International Arbitration

While there are many different variations, depending on a wide range of factors, a typical arbitration will usually proceed along a path such as:

  • Request for arbitration / answer to the request for arbitration;
  • Constitution of the tribunal;
  • Establishing Procedural Order No 1 to set out the procedural aspects of the arbitration;
  • Exchange of written submissions (usually in one or two rounds, and usually accompanied by supporting documents, e.g. witness statements and expert reports, on which the parties rely);
  • Requests for production of additional documents (typically, after the first round of written submissions and before a second round);
  • Pre-hearing administrative conference, often conducted by telephone;
  • Oral hearing;
  • Post-hearing submissions, including submissions on costs;
  • Closure of the proceedings by the tribunal;
  • Award; and
  • Proceedings after the award, as the case may be (correction, interpretation, or additional awards)

5.6 Judicial Assistance from State Courts

There are limited grounds for judicial intervention or assistance in an ongoing international arbitration. These include:

  • Challenge of an arbitrator(s);
  • Provisional measures in aid of arbitral proceedings;
  • Assistance in the taking of evidence for use in arbitral proceedings;
  • Annulment of awards; and
  • Recognition and enforcement of awards.

In each of these instances, judicial intervention or assistance is intended to facilitate the arbitral process by providing limited support or supervision.