Does Bifurcation Promote Efficiency: Still a Difficult Question To Answer
In 2011 I wrote an article entitled “Does Bifurcation Really Promote Efficiency?” (Journal of International Arbitration 28(2): 105-111, 2011). This tested the “generally accepted view that bifurcation of proceedings promotes efficiency” by analysing the available data on the time taken for bifurcated cases to conclude and comparing that data with time taken for non-bifurcated cases. Eight years and numerous articles later, this article remains the one about which I am asked the most questions, so I thought I should get on and update it.
As regular readers of this blog will know, I am constantly frustrated by the lack of available data on international arbitrations. The principle of confidentiality in international arbitration frequently frustrates the researcher. Conducting empirical research into international commercial arbitration proceedings is almost impossible due to the paucity of available information. Traditionally, the major arbitral institutions have been reluctant to publish awards. The International Court of Arbitration at the ICC does publish extracts of selected redacted awards and procedural orders but they are often not very useful in terms of the information they contain. Extracts are generally not released until three years after the arbitration proceedings have closed. The Stockholm Chamber of Commerce also publishes selected redacted awards or decisions with the parties’ consent. The other major international arbitration institutions will not publish awards without the express consent of the parties.
So, as usual, for this research I was forced to rely on investment treaty cases published on the ICSID website (www.worldbank.org/icsid). By its nature, investment arbitration throws up particular challenges and it is almost impossible to validly translate findings in relation to investment treaty cases to commercial arbitration matters. In the absence of accessible data on commercial arbitration cases however, it is the best proxy available.
I revisited my original research and supplemented the research with additional analysis and I will publish my conclusions later this year, however I have reached the conclusion that the answer to the question whether bifurcating a matter promotes efficiency is, rather like Occam’s razor, a supremely obvious one.
Yes, bifurcated proceedings take less time, if the first phase becomes the last phase, i.e if the jurisdictional challenge succeeds. If it doesn’t succeed then bifurcated proceedings take significantly longer than cases where the jurisdiction and merits are heard together. So it must follow that only a tribunal which is sure a jurisdictional challenge will succeed should order bifurcation (on efficiency grounds), but in order to persuade a tribunal of the merits of its challenge to jurisdiction, a party must argue the challenge in detail, and the opposing party must respond in detail, which is effectively pre-empting the bifurcation itself. The single most important factor in deciding whether to bifurcate should be the likelihood of the bifurcated phase ending the proceedings, but a tribunal is simply not in the best position to assess this likelihood until the issue is properly argued before them. I welcome readers’ thoughts as to how there is a way out of this conundrum.