Upon constitution of the tribunal, the next step usually involves a preliminary hearing or meeting between the tribunal and the parties, during which the tribunal will issue directions identifying and timetabling the procedural steps that the parties must take. During this preliminary meeting, the parties discuss the number of submissions required and the timing for filing submissions. It will also be an opportunity to identify the issues between the parties (and to narrow the issues, if possible) and for the tribunal (usually the presiding arbitrator in the case of a panel) to begin meaningful and proactive case management.
Written submissions: pleadings/memorials
As a practical matter, the content, form and timing of written submissions vary. In some arbitrations (particularly smaller/lower value ones), written submissions are brief, informal documents submitted shortly before the evidentiary hearing and most of the parties’ submissions will be oral, made at the hearing itself. In other arbitrations (typically larger disputes), written submissions will require several months to prepare and will be hundreds of pages long (not including exhibits, which may entail thousands of additional pages). The timetables adopted for the arbitration will obviously vary substantially, depending on whether the written submissions fall closer to one end of this spectrum or the other.
Increasingly, one of the most important decisions the parties to an arbitration have to make is as to whether to adopt common law-style pleadings or the memorial system, which owes more to civil law in origin (although also the favoured approach in state-investor arbitration). At one time, the adoption of pleadings was the invariable choice in international commercial arbitration, but memorials are becoming more common now than they once were.
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International Arbitration: Process and Procedure
Where the parties have decided upon pleadings, the written submissions that make up the pleadings are generally more succinct than with a memorial. A pleading, in the form of a statement of claim, will set out the factual basis of the claimant’s case, but will not usually attach the evidence of witnesses or experts. Similarly, it will not usually contain detailed submissions on law. For its part, the respondent, in filing its defence, will also be factual, but again without attaching evidence or making submissions of law in reply to the statement of claim.
It is only after the closure of the exchange of pleadings that the parties then turn to the exchange of evidence, be it witness, expert or documentary. As to submissions on points of law, those will usually be found in the respective opening statements and/or in any skeleton arguments put before the tribunal in relation to a specific submission on law.
Conversely, if parties decide they will adopt memorials, they will be required to set out their claim (or defence in the case of the respondent) in full detail in the memorial that serves as the statement of claim. The effect of this is that all evidence, submissions (whether legal or factual) and all documents will be contained in the memorial. In the case of documents (including witness statements or reports by experts), they will be appended, along with any legal authorities that are to be relied upon.
There are arguments that may be advanced in support of either approach. Common law practitioners maintain that the use of pleadings is efficient in that a case is set out in full, at least as to its basis, before evidence is gathered, fully prepared and served. In reply, those who favour memorials will often say that it is that approach which is more efficient and expedient as it requires the parties to set out their case transparently at a very early stage. It will be said that it makes it less likely that a party will be ambushed in any way and that unmeritorious submissions (whether as to facts or law) will be discouraged as they will require an immediate basis to set out in the memorial itself. In addition, supporters of memorials argue that the prospect of settlement or, at least, a narrowing of the issues in contention is more likely because the need to present one’s case “up front” and at an early stage means that a party will have to evaluate its case at an initial stage, and that the other side will, similarly, have to consider the strength of its position without delay immediately thereafter.
Nevertheless, the rules of most arbitral institutions work on the basis that, even in the case of pleadings, a party will serve the documents on which it tends to rely at the same time as serving the pleadings. This is perhaps an indication that the distinction between memorials and pleadings should not really be any longer seen as a civil law/common law divide, but rather, as a choice of approach that depends on preference and tactics.
In deciding whether to adopt pleadings or memorials, parties may wish to consider the following:
Does the dispute include considerable factual disagreement? If so, the use of memorials will enable the parties and the arbitral tribunal to have an early and full understanding of each parties’ case?
Does the dispute encompass a number of separate issues or, in effect, disputes within disputes? If so, the use of pleadings may be of assistance to the parties in identifying and delineating the various issues at an early stage before time and expense is incurred in preparing voluminous evidence. It might be that, upon exchange of pleadings, those issues are able to be narrowed.
Do the parties wish to avoid incurring significant front-end costs? If so, the adoption of pleadings is likely to assist. By the same token, as a matter of tactics, it is not unknown for a party that enjoys significant funding to favour memorials, especially where the other party or parties are working to much tighter constraints.
Do the parties share a need or desire to progress resolution of the dispute within a short timetable? If so, use of memorials may assist this.
Is the matter one where, in the eyes of one or both parties, there is a real prospect of a settlement being reached? If so, memorials are likely to assist, as the strengths and/or weaknesses in each side’s case will be more readily apparent at an early stage and the overall picture of the case is likely to be more readily understood.
Whether pleadings or memorials are chosen, they must set out the case of the party submitting them. At the preliminary or procedural hearing (see below), the arbitral tribunal (typically the presiding arbitrator alone) will order when the pleadings are to be filed. Filing will consist of providing them to the tribunal and serving them on the other parties. Typically, the parties themselves will agree this timetable, but in the absence of agreement, the arbitral tribunal will take the initiative.
In the case of pleadings, the claimant’s key document will be the statement of claim, which will set out the duty or duties that it is said the other party owed, what is said to be the alleged breach and the damage that is said to have occurred as a result.
In answer to a statement of claim, the respondent will file a defence, which will admit, deny or neither admit nor deny each of the allegations pleaded by the claimant. It will also lay out what the respondent says its case is in answer to each of the allegations. The respondent may also serve a counterclaim. That is, effectively, a statement of claim by the respondent in respect of its own claim. Then it is down to the claimant to file its defence to the counterclaim. Whether a counterclaim dealing, for instance, with a claim arising out of a separate contract between the parties is able to be considered by the same tribunal will depend on national law, but the UNCITRAL Model Law on International Commercial Arbitration (1985), with amendments as adopted in 2006 (Model Law) is silent as to the position.
For completeness, as in litigation, there may be circumstances where the parties and the arbitral tribunal agree that a reply may be made to the defence that has been served. In such circumstances, the following line of written pleadings will be filed:
Statement of Claim
Statement of Defence
Statement of Reply, and
Statement of Rejoinder.
As indicated, a timetable will be agreed by the parties and/or the tribunal. Typically, between one and three months will be granted for the preparation of each pleading/submission. As evidence is usually provided at the same time in arbitration, each pleading/submission will be accompanied by the written evidence (including documents, witness statements and expert report), as well as legal authorities, on which the submitting party relies.
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International Arbitration: Process and Procedure
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