The Finland Arbitration Institute (“FAI“) administers domestic and international arbitrations governed by its Arbitration Rules and the Rules for Expedited Arbitration. These rules were fully revised in 2013, and have now been updated with the revision that entered into force 1 January 2020 (the “2020 Rules”). The 2020 Rules contain individual improvements to the 2013 Rules, with the aim of speeding up and streamlining the arbitration process. Key changes include further possibilities to deliver documents by electronic means and more flexibility in the choice between standard and expedited arbitration proceedings.[1]
According to the Secretary General of the FAI, Mr. Santtu Turunen, the revision further strengthens the competitive advantages of FAI arbitrations: “From party perspective, speed and costs are often regarded as priorities, of course in addition to the quality of the procedure and award. In 2019, the median duration of FAI Arbitrations was 8 months and 3 months in expedited arbitrations (after transfer of the case file to the tribunal). Prior to the transfer of the case file to the tribunal, the median duration at the institute was 2 months. The FAI procedure was fast and cost efficient already according to the 2013 Rules, but the 2020 Rules help us serve our customers even better.”
1. Advances on costs now routinely required in all arbitrations
Under the 2013 Rules, only the parties in an international arbitration had to pay the advance on costs before the case was referred to the arbitral tribunal.[2] Under the 2020 Rules the FAI shall fix an advance on costs in connection with all arbitrations, domestic and international alike.[3]
2. Fixed filing fee
The new rules provide for a fixed filing fee. The fee is EUR 3,000 in standard proceedings and EUR 2,500 in expedited proceedings.[4] Previously the amount of the filing fee was based on the amount in dispute. The new fees correspond to the lowest level of filing fees under the 2013 Rules. The 2020 Rules do not include any changes to the tables regarding the administrative fees or fees to the arbitrators.
3. Electronic documents
A new attribute under the 2020 Rules, that particularly facilitates the procedure during the Covid-19 outbreak, is a simplified process for transmitting case documents.[5] Previously it was required that certain documents, such as the request for arbitration and the answer to the request for arbitration, were provided in hard copy. Under the 2020 Rules, case documents may be transmitted by electronic means only or, alternatively, in a single hard copy.
4. More flexibility in the choice between the Arbitration Rules and the Rules for Expedited Arbitration
In accordance with the 2020 Rules and subject to the consent of the parties, a case under the FAI Arbitration Rules can be referred to be conducted under the FAI Expedited Arbitration Rules, and vice versa, prior to the confirmation of any arbitrator provided that the parties include in the request for arbitration or answer any observations to the effect that the other set of Rules would be more appropriate for the conduct of the arbitration than the Rules agreed on in the arbitration agreement.[6]
The FAI also offers a new model arbitration clause to complement the revision of section 10 of the 2020 Rules:[7]
Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or validity thereof, shall be finally settled by arbitration in accordance with the Rules for Expedited Arbitration of the Finland Chamber of Commerce. However, at the request of a party, the Arbitration Institute of the Finland Chamber of Commerce may determine that the Arbitration Rules of the Finland Chamber of Commerce shall apply instead of the Rules for Expedited Arbitration, if the Arbitration Institute considers this to be appropriate taking into account the amount in dispute, the complexity of the case, and other relevant circumstances.
Note: Parties may wish to consider adding:
(a) The seat of arbitration shall be [town and country].
(b) The language of the arbitration shall be [ ].
5. Expediting the appointment of a three-member tribunal
Under the 2020 Rules, the default time limit reserved for the parties to nominate the presiding arbitrator in a panel of three arbitrators has been shortened from 15 days to 10 days. Where the parties have not agreed on the number of arbitrators, and the FAI has decided that the arbitral tribunal shall be composed of three arbitrators, the time limit for respondent to nominate an arbitrator has been slightly modified to commence from the date on which the respondent received the notification of the arbitrator nominated by the claimant. The time limit is thus no longer calculated from the confirmation of the arbitrator nominated by the claimant, as it was under the 2013 Rules.[8]
6. An indicative time limit for arranging a case management conference
To further promote the expeditiousness of the arbitration proceedings, the 2020 Rules has set a time limit to arrange a case management conference. The 2013 Rules did not contain any time limits for conducting a case management conference. The new rules entail that the arbitral tribunal will arrange a case management conference within 21 days from the date on which the arbitral tribunal received the case file from the FAI (14 days in proceedings under the Rules for Expedited Arbitration).[9]
7. Tribunals explicitly empowered to issue confidentiality orders
The 2013 Rules required that the parties undertake to keep confidential the documentation related to the proceedings, subject to certain exceptions. However, the powers of the arbitral tribunal to issue confidentiality orders have not previously been explicitly regulated. Now, the 2020 Rules state that upon the request of a party, the arbitral tribunal may issue orders concerning the confidentiality of the arbitration proceedings or any other matters in connection with the arbitration.[10]
The 2020 Rules clarify that the arbitral tribunal has the authority to issue such orders. The clause leaves much discretion to the arbitral tribunal in deciding whether to issue a confidentiality order. Ultimately, the arbitral tribunal’s decision will be based on a balancing of interests.[11]
8. Allocation of the costs of the proceedings
The 2020 Rules emphasise more clearly than before that the parties have a duty to promote efficiency. The 2020 Rules explicitly state that where a party has failed to comply with the orders or other directions of the arbitral tribunal, the tribunal may take such failure into account in its allocation of the costs of the arbitration. Despite the change in language, the tribunal continues to be entitled to take into consideration all relevant circumstances when deciding on the allocation of costs.[12]
[1] https://arbitration.fi/2019/12/17/revised-arbitration-rules-of-the-finland-chamber-of-commerce-to-enter-into-force-on-1-january-2020/
[2] Section 48.1, Rules of Arbitration, FAI, 2020
[3] Section 50, Rules of Arbitration, FAI, 2020
[4] Section 1 of the Appendix II, Rules of Arbitration, FAI, 2020
[5] Section 4 & 5, Rules of Arbitration, FAI, 2020
[6] Section 6 & 8, Rules of Arbitration, FAI, 2020
[7] https://arbitration.fi/arbitration/model-arbitration-clauses/expedited-arbitration-clause/
[8] Section 19, Rules of Arbitration, FAI, 2020
[9] Section 30, Rules of Arbitration, FAI, 2020 & Section 29, Rules of Expedited Arbitration, FAI, 2020
[10] Section 51, Rules of Arbitration, FAI, 2020 & Section 49, Rules of Expedited Arbitration, FAI, 2020
[11] https://arbitration.fi/2019/12/17/revised-arbitration-rules-of-the-finland-chamber-of-commerce-to-enter-into-force-on-1-january-2020/
[12] Section 49, Rules of Arbitration, FAI, 2020 & Section 47, Rules of Expedited Arbitration, FAI, 2020
