What Are Rules for Document-Only Arbitration?

Document-only arbitration is a simplified form of arbitration in which disputes are resolved solely through written submissions, without any oral hearings. This process is typically faster and more cost-effective than traditional arbitration because it eliminates the need for hearings, witness testimonies, and complex procedural steps. While this form of arbitration is suitable for certain types of disputes, it is not ideal for every situation, especially those requiring detailed witness testimony or complex legal arguments.

What are the Rules for Document-Only Arbitration?

Definition

Document-only arbitration is an expedited form of arbitration where all submissions (claims, defenses, evidence) are exchanged in writing. No oral hearings take place, and the arbitrator makes a decision based solely on the written material presented by the parties.

Key Features of Document-Only Arbitration

• No Oral Hearings: The most distinctive feature of document-only arbitration is that it completely omits oral hearings. The entire process is conducted through written submissions, including the statement of claim, defense, and any evidence or supporting documents.
• Simplified Procedure: The process is simplified in terms of procedural requirements, focusing only on written arguments and documents. There are typically fewer stages in the process compared to traditional arbitration.
• Reduced Timelines: Without the need for hearings, the overall arbitration process is typically completed much faster, sometimes in a matter of weeks or a couple of months, compared to traditional arbitration which can take up to a year or more.
• Limited Evidence: The amount of evidence presented is typically limited to what can be included in the written submissions. There are no in-person witnesses or expert testimonies to provide oral evidence.
• Cost-Effective: Since the process avoids costs associated with hearings, travel, and the use of expert witnesses, document-only arbitration is usually much cheaper than traditional arbitration.

Differences from Traditional Arbitration

• Traditional Arbitration: In traditional arbitration, the process includes multiple rounds of written submissions, followed by hearings where both parties present their cases, question witnesses, and submit further evidence. This can take many months or even years depending on the complexity of the dispute.
• Document-Only Arbitration: In contrast, document-only arbitration eliminates the need for oral hearings, and the arbitrator makes a decision based solely on the written documents exchanged between the parties. There is no oral testimony, and no in-person interaction with the arbitrator or other parties.

When is Document-Only Arbitration Used?

• Simple and Low-Value Disputes: This form of arbitration is best suited for simple, straightforward disputes where the facts are clear and the amount in dispute is low. For example, contractual breaches involving minor financial amounts or disputes where there is limited factual dispute.
• Disputes Without Complex Legal or Factual Issues: Document-only arbitration is ideal for cases where the legal issues are clear-cut, and the parties do not need to provide detailed evidence or expert testimony.
• Parties Seeking Cost-Effective and Quick Resolution: Parties who want to avoid high arbitration costs and long timelines, while still ensuring a fair resolution, may opt for document-only arbitration.

Arbitration Rules for Document-Only Arbitration

Institutional Rules

Several leading arbitration institutions have provisions for document-only or paper-based arbitration. These may be available under expedited or streamlined procedures.

• ICC (International Chamber of Commerce): The ICC has rules for expedited arbitration that allow for document-only procedures, particularly for lower-value claims. In such cases, the ICC tribunal may decide the dispute based entirely on written submissions without the need for a hearing.
• LCIA (London Court of International Arbitration): The LCIA offers fast-track arbitration procedures, which can include document-only arbitration for less complex disputes. The timeline is shortened, and the tribunal is given flexibility to decide the case based on documents alone.
• SIAC (Singapore International Arbitration Centre): SIAC’s expedited procedures also include provisions for document-only arbitration for cases of a certain value threshold.

Ad-hoc Arbitration

In ad-hoc arbitration, the parties can agree to a document-only arbitration in their arbitration agreement. The agreement should specify the process, including deadlines for submissions, the limits on evidence, and the scope of the arbitrator’s discretion to issue an award based on written submissions alone.

Advantages of Document-Only Arbitration

• Speed: Without the need for hearings or witness testimonies, document-only arbitration is generally completed much faster than traditional arbitration.
• Cost-Effectiveness: The lack of in-person hearings and expert testimonies reduces the overall costs of the arbitration process, making it more affordable for smaller claims.
• Simplicity: The process is simpler and more straightforward, as it eliminates the need for extensive procedural formalities and hearings.
• Finality: Like traditional arbitration, document-only arbitration awards are final and binding, providing certainty and enforceability.

Challenges and Drawbacks of Document-Only Arbitration

• Limited Opportunity to Present Evidence: The lack of oral hearings means that parties do not have the opportunity to present oral evidence or question witnesses, which may hinder a full presentation of the case in more complex disputes.
• Inability to Cross-Examine Witnesses: Since there are no hearings, cross-examination of witnesses, which can often be crucial in dispute resolution, is not possible. This may affect the fairness of the process in cases where witness credibility is important.
• Risk of Incomplete Information: Without oral hearings or live testimony, there may be risks that important facts or arguments are not adequately presented, leading to a less thorough decision.
• Limited Applicability: Document-only arbitration is not suitable for all types of disputes, particularly those with complex factual or legal issues, or where the dispute involves a significant amount of money.

Legal Protections and Consumer Actions

Agreeing on Document-Only Arbitration

Parties should carefully consider whether document-only arbitration is appropriate for their specific dispute. If they decide to use this method, they should clearly outline the procedures in the arbitration agreement, including timelines for written submissions and evidence, and agree on whether any flexibility will be allowed in the process.

Ensuring Fairness

To ensure a fair process, parties should agree to rules that balance speed and cost-effectiveness with fairness. For example, parties can agree on how documents should be submitted, whether there should be a possibility for supplementary submissions, and how the arbitrator can handle any disputes regarding evidence.

Choosing the Right Dispute Resolution Process

Before choosing document-only arbitration, parties should assess the complexity of the case. For disputes involving large sums of money or intricate legal issues, traditional arbitration may be a better choice to ensure a thorough examination of the facts.

Consumer Safety Tips

• Clarity in Agreement: Ensure the arbitration clause clearly specifies whether document-only arbitration will be used, as well as the rules for submitting and exchanging documents.
• Know the Limitations: Be aware of the limitations, such as the inability to present oral testimony or cross-examine witnesses, and decide if this is appropriate for your dispute.
• Monitor Submissions: Ensure timely and complete submission of all relevant documents, as the process is based entirely on written materials.
• Seek Legal Advice: If you are unsure whether document-only arbitration is right for your dispute, consult with a legal professional to assess the best course of action.

Example

Scenario:

A small business (Business A) and a supplier (Supplier B) have a disagreement over the delivery of faulty products. The value of the claim is relatively low, and both parties agree to resolve the issue quickly and affordably.

Steps in the Process:

• The arbitration agreement specifies document-only arbitration, and both parties agree to submit all their arguments, evidence, and supporting documents within 30 days.
• The arbitrator reviews the submissions, which include written claims, defenses, and product quality reports. No oral hearings are scheduled.
• After reviewing the written documents, the arbitrator issues a final and binding award in 6 weeks.
• The process is quick, cost-effective, and provides a resolution for both parties without the need for a lengthy or expensive hearing.