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Dispute Resolution in Poland Issues and new developments in dispute resolution in Poland.

Time is more valuable than money

morek Posted in Arbitration

A few weeks ago – in the midst of the UEFA EURO 2012 Championship and with the Olympic Games almost upon us – I posted a blog entry on the fastest among all fast-track arbitrations. Today I’m staying on the same track to share again a few thoughts on the timing of arbitration – from a distinct, yet not distant, angle. My immediate and current inspiration has come from London, where just a few days ago the BLP law firm released its report entitled “International Arbitration: Research based report on perceived delay in the arbitration process”. See also the recent blog entry posted by Dr. W. Wąsowicz on July 3, 2012.

Time efficiency is traditionally listed among the key advantages of arbitration. While we take state court backlogs for granted, it is different for arbitration. Its users expect that arbitration – as with all professional commercial services – should not be tardy.

Sometimes this expectation leads the parties to include in their arbitration clause a provision imposing time limits for completion of the proceedings and/or delivery of an award by the tribunal. Arbitral institutions feel responsible for preventing delays in arbitration as well. This is reflected both in the arbitration rules (such as e.g. Article 30 of the ICC Rules providing that a final award must be rendered within 6 months of the date when Terms of Reference are signed) as well as their everyday operations.

The authors of the report suggest that while all of this is admirable in theory, the reality can be somewhat different. Two out of every three respondents in the survey indicated that they had at some time within the past five years felt dissatisfied with the length of time they had to wait for an award.

Unsurprisingly, the higher the amounts at stake, the greater the tendency for delays in the arbitral process. They tend to arise at all stages of the proceedings: from their very start until the end. As early as at the phase when an arbitral tribunal is constituted, one third of respondents indicated that parties/counsel who use all kinds of dilatory tactics are not solely responsible for the delays, but also that the arbitral courts and arbitrators should be blamed.

The strongest criticism relates to delays in the very last stage of the arbitral process: when the hearing is closed, and the only job for arbitrators is to agree on, draft and sign an arbitral award. The overwhelming majority (86%) of the respondents considered that 3–6 months for the publication of an award was an acceptable target time. The longer period of 6–9 months was still acceptable to a third. No-one considered a delay of more than a year to be appropriate.

Despite the fact that arbitral proceedings inPolandare usually much shorter than the proceedings in state courts (it is thus relatively easier to feel satisfied with them), the results of domestic respondents would probably be similar. Many deficiencies indicated in the report are of a universal nature. Hence it is certainly worth reviewing the report’s details.

“Time is money” is a saying first promulgated by Benjamin Franklin. It has been conjugated in all tenses, probably in all languages. In the language of arbitration, it also has an important meaning. While rushing is not good and could lead to the violation of the fundamental principles of arbitration, any tardiness cannot be justified. To decide on third parties’ disputes is a most ennobling task. To close the bracket with another famous maxim: Noblesse oblige