2014 was an interesting year for the Arbitration Institute of the Finland Chamber of Commerce (“FAI”). Indeed, it was the first full year during which the new Arbitration Rules of the Finland Chamber of Commerce (the “FAI Rules”) and Rules for Expedited Arbitration (the “FAI Expedited Rules”) could be seen in full perspective.
The new FAI Rules and FAI Expedited Rules, which entered into force on 1 June 2013, are well-equipped to provide expeditious and cost-efficient resolution of commercial disputes for diverse businesses. With new provisions on multi-party and multi-contract proceedings, interim measures of protection and emergency arbitration, the FAI Rules and FAI Expedited Rules are suitable for all types of commercial disputes, including complex ones.
FAI statistics for the year 2014 have now been published at https://arbitration.fi/the-arbitration-institute/statistics/. The following is a brief summary of some of the statistics that may be of particular interest to our users.
FAI case load
2013 was FAI’s busiest year so far with 80 new arbitrations commenced. Although the case load did not reach quite the same level in 2014 (the number of fresh Requests for Arbitration being 63), the monetary value of the cases increased significantly from previous years.
Picture 1 below illustrates the yearly development of the number of FAI cases from 1998 to 2014.
As can be seen from Picture 2 below, the median duration of arbitrations governed by the FAI Rules was only 8 months in proceedings that ended in 2014. This is well in line with the provisions of the FAI Rules which call for efficiency of arbitration proceedings and require that, as a rule, the arbitral tribunal shall render the final award in no more than 9 months from receipt of the file. Furthermore, the median duration of cases conducted under the FAI Expedited Rules was only 3 months, which is equally well in line with the requirements set forth in the said Rules.
Consistent with the referred statistics, arbitration users have also praised FAI for its efficiency in the case administration. According to the feedback received, this is manifested both in the responsiveness of the FAI Secretariat and in the rapidity of the decision-making by the FAI Board.
Picture 2 above also shows that the vast majority of cases filed with FAI in 2014 were commenced under the FAI Rules (86%). Only 3% of the new arbitrations were governed by the FAI Expedited Rules. The number of ad hoc proceedings – where FAI is merely called upon to appoint the arbitral tribunal, if so agreed by the parties and requested by one of them – decreased to 11% in 2014, reflecting a declining trend in comparison with the increase in the number of institutional arbitration proceedings that has been apparent for the past few years.
Nationality of the parties
FAI arbitration users include both Finnish and non-Finnish companies and individuals. As illustrated in Picture 2 above, 22% of the cases filed in 2014 were of international nature, i.e., involving at least one non-Finnish party.
Picture 3 below contains more detailed information on the nationality of the parties to FAI arbitrations in 2014. Out of the total number of 164 parties, 17 originated from countries other than Finland. These included parties from the Nordic countries, Russia, Estonia, France, Germany, India, Poland, Switzerland, UK and USA.
Subject matter of the disputes
Picture 4 below illustrates the diverse subject matters of disputes resolved under the FAI Rules and FAI Expedited Rules in 2014. These include, e.g., company acquisitions and sale of business (17%), shareholders’ agreements (14%), franchising and cooperation agreements (8%), agency and distribution agreements (6%), delivery and supply agreements (6%) as well as IT agreements (5%).
Appointment of arbitrators
Historically, arbitral tribunals composed of one member only have been far more common than three-person panels in FAI proceedings. This trend continued in 2014 too. As shown in Picture 2 above, no less than 85% of the cases were heard by sole arbitrators, whereas only 15% of the cases involved a three-member tribunal.
When appointing arbitrators, the FAI Board pays particular attention to the quality of the prospective arbitrator candidates. FAI seeks to ensure that all arbitrators appointed in both domestic and international disputes have sufficient experience, expertise and other relevant qualifications to serve as an arbitrator in the specific case. Furthermore, mindful of the importance of expanding the “pool of arbitrators”, FAI does not hesitate to appoint also younger arbitration practitioners who are known for their talent, efficiency and user-friendliness.
Additionally, it should be noted that although arbitral awards issued in proceedings governed by the FAI Rules and FAI Expedited Rules are not formally “scrutinized” by the FAI Board, they are nevertheless carefully reviewed once rendered and submitted to FAI. Also, the FAI Secretariat seeks feedback from the parties in all cases that proceed until a final award on the merits. These practices serve to assist FAI in monitoring the quality of the work of different arbitrators, thereby contributing to the appointment of highly competent individuals in future cases.
FAI is dedicated to promote gender diversity in arbitrator appointments. In this regard, it may be noted that in 2014, 88% of all the arbitrators confirmed by FAI (including party-nominated ones) were male and 12% were female. However, as for arbitrators directly selected by the FAI Board itself, the figures were somewhat more positive: 20% of the appointees were female, whereas 80% were male. Finally, in ad hoc cases, no less than 29% of the appointed arbitrators were women.
The beginning of the year 2015 has been busy for FAI. At the time of writing, the number of new cases filed is 14, which augurs a good year for FAI.
In order to serve our users as effectively as possible, FAI has also updated its internet pages and taken various steps to increase the general awareness of FAI arbitration. For example, we have started publishing anonymous case comments, which address landmark decisions by both the FAI Board and arbitral tribunals in proceedings governed by the FAI Rules and FAI Expedited Rules. For further information, please refer to https://arbitration.fi/news/.
In addition, also the recently-published commentary on the FAI Rules – which is entitled “Guide to the Finnish Arbitration Rules”, and written by Chair of the FAI Board Mr. Mika Savola – contains many detailed references to actual FAI cases on a no-name basis. They serve to illustrate the practical operation of the FAI Rules and to provide solutions to concrete problems that the users may encounter in any FAI arbitration proceeding. For more information about the commentary, please visit https://arbitration.fi/2015/01/15/guide-finnish-arbitration-rules-published/.
To recap, FAI is strongly committed to enhance its reputation as a modern arbitration institution with a long and distinguished history. The statistics and the users’ feedback indicate that FAI has succeeded well in its efforts to provide effective and reliable arbitration services to Finnish and foreign corporations alike. Quality, timeliness and cost-efficiency will constitute the key focus areas for FAI also in the coming years.
Last but not least, the topic of efficiency in arbitration proceedings will be addressed also at our “Helsinki International Arbitration Day 2015”, to be held on 28 May 2015. The seminar features a number of speakers, who are all renowned international arbitration practitioners as well as in-house counsel with considerable arbitration experience. For more information about the seminar, please access the event site arbitration.fi/events. We look forward to welcoming you in Helsinki!