What is the FAI?
The Arbitration Institute of the Finland Chamber of Commerce (FAI) administers domestic and international arbitrations conducted under the FAI rules, i.e., the Arbitration Rules of the Finland Chamber of Commerce or the Rules for Expedited Arbitration of the Finland Chamber of Commerce.
The FAI is an autonomous arbitration body of the Finland Chamber of Commerce administering arbitrations and mediations. Although part of the organisation of the Finland Chamber of Commerce, the FAI carries out its functions in complete independence from the Finland Chamber of Commerce and its organs. The FAI does not itself resolve disputes, but administers proceedings in accordance with its arbitration and mediation rules.
What is arbitration and why is it a preferable method of resolving disputes?
Arbitration is an alternative method of dispute resolution to litigating in state courts.
Arbitration is widely used in resolving commercial disputes, as it is faster compared to litigation in state courts. Arbitration is also flexible: the parties have the ability to nominate the arbitrator or arbitrators themselves and tailor the process to meet their needs. Arbitration further provides the parties with an opportunity to secure particular expertise, as the parties may nominate an arbitrator or arbitrators with specific professional competence or qualifications to resolve their dispute.
Arbitration, unlike litigation in state courts, is not public, but the proceedings are confidential. An arbitral award is final and non-appealable. An arbitral award is enforceable in Finland and internationally.
How can parties submit their disputes to arbitration?
Arbitration is based on agreement. Therefore, the parties must have an arbitration clause or agreement in order to take their dispute to arbitration. Arbitration is typically agreed upon by inserting an arbitration clause in the main contract. It is also possible to submit a dispute to arbitration with a separate agreement and once the dispute has already arisen.
An arbitration clause or agreement must be in writing. The FAI recommends its Model Arbitration Clauses.
How fast is it possible to receive a final award in arbitration?
The average duration of an FAI arbitration conducted under the Arbitration Rules of the Finland Chamber of Commerce is approx. 12 months. The process is comprised of three main stages:
- commencement of the arbitration (duration approx. two (2) months);
- proceedings, i.e. the trial before the arbitral tribunal (duration approx. nine (9) months; and
- completion of the process (duration approx. one (1) month).
The average duration of an FAI arbitration conducted under Rules for Expedited Arbitration of the Finland Chamber of Commerce is approx. six (6) months. The expedited process is also comprised of three main stages:
- commencement of the arbitration (duration approx. two (2) months);
- proceedings, i.e. the trial before the arbitral tribunal (duration approx. three (3) months; and
- completion of the process (duration approx. one (1) month).
What are the costs of arbitration and is it possible to estimate the costs beforehand?
The costs of arbitration are comprised of:
- the Administrative Fee of the FAI, which includes the Filing Fee or Filing Fees paid in the case;
- the fees of the arbitral tribunal; and
- expenses, if any.
The costs of the arbitration in an individual case are fixed in the final award, order for the termination of the arbitration or in a consent award where the arbitral tribunal records a settlement of the parties.
The FAI determines the Administrative Fee and the fees of the arbitral tribunal in cases conducted under the FAI rules based on the amount in dispute, which makes it possible to estimate the costs beforehand. The FAI cost calculator provides the amount of the Administrative Fee and an estimate of the fees of the arbitral tribunal. The cost calculator thus assists parties in estimating the total costs of the arbitration without value added tax or the legal fees of the parties.
The Filing Fees in FAI arbitrations are the following:
- EUR 3 000 in cases conducted under the Arbitration Rules of the Finland Chamber of Commerce; and
- EUR 3 000 in cases conducted under the Rules for Expedited Arbitration of the Finland Chamber of Commerce.
If the parties have agreed to apply a version of the FAI rules that is not the most recent version of the rules in force from time to time, please check the correct amount of the Filing Fee from the version of the rules applicable to the dispute.
The Filing Fee is non-refundable even if a claim is withdrawn or the arbitration is terminated on other grounds. The Filing Fee(s) paid in the case constitute a part of the FAI’s Administrative Fee and shall be credited to the respective party’s share of the advance on costs fixed by the FAI.
The FAI will fix an advance on costs in all arbitrations conducted under its rules. The advance on costs is intended to cover the costs of the arbitration. Parties will be required to pay and advance on costs or their share thereof at the initial stages of the arbitration.
Can the FAI be designated as appointing authority without subjecting the arbitration to the FAI rules?
Parties may agree that the FAI shall act as appointing authority even if the arbitration is not subjected to the FAI rules. This means that the arbitration is conducted ad hoc. The fee of the FAI for the appointment of the arbitral tribunal to an ad hoc case is EUR 3 000. The fee is non-refundable.
The FAI may also act as appointing authority in arbitrations conducted under the UNCITRAL Arbitration Rules. Please contact the FAI Secretariat for futher information.
