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AIDA Reinsurance and Insurance Arbitration Society of the UK (“ARIAS UKARIAS”)

A concise overview of the key procedural features, advantages, disadvantages, and practical considerations associated with the AIDA Reinsurance and Insurance Arbitration Society of the UK (“ARIAS UK”).

Overview

Overview: advantages and disadvantages

ADVANTAGES DISADVANTAGES 
Privacy and confidentiality: All meetings and hearings are private and confidential to the parties (see Rule 12.5). In addition, the parties may agree that all arbitration materials and the award shall be confidential to the parties (see for example the ARIAS (UK) Direct Arbitration Clause).   Limited case management role: ARIAS UK has very limited involvement in case management. Instead, while ARIAS UK provides the Rules and maintains a panel of arbitrators (although the parties are not required to choose arbitrators from that panel), case management is left to the parties and the Tribunal.  
Ability to choose the arbitrator(s) with insurance expertise: The parties may choose arbitrators who have insurance and/or reinsurance expertise which is relevant to the subject matter of the dispute. No scrutiny: ARIAS UK does not scrutinise arbitral awards (unlike other institutions).
Enforceability of awards: ARIAS UK awards are enforceable under the New York Convention, and are often easier to enforce than the judgments of national courts. Limited appeal options: The Rules contain no express provision dealing with appeals (unless the parties choose to agree the optional “appeal amendment clause”).  
Flexibility: The ARIAS UK Rules enable parties to agree upon any procedure for the conduct of the arbitration (see Rule 10.1) and so the procedure under ARIAS UK arbitrations is more flexible than the procedure under the rules of most other arbitral institutions.
Limited institutional fees: There are only a couple of situations in which ARIAS UK may charge fees.   

Overview: Process

Procedural element Details
Rules
Commencing Proceedings
  • A Request for Arbitration is sent to the Claimant.
Answer to the Request
  • To be submitted within 14 days of receipt of the Request.
  • Must contain the information specified in Article 5.
Terms of Reference
  • No obligation for the Tribunal to draw up. 
Constitution of the Tribunal 
  • Rule 6 contains detailed provisions about composition of the Tribunal and default appointments.  
  • Rule 6.2 provides that if there is no agreement as to the number of arbitrators, the Tribunal shall consist of 3 arbitrators, one to be appointed by the Claimant, one to be appointed by the Respondent and the third to be appointed by the two appointed arbitrators.  
     
Procedural Order No. 1
  • The Rules recommend the Tribunal convene a preliminary meeting with the parties as early as possible after the Tribunal is constituted to consider directions for the conduct of the arbitration. 
  • The first procedural order is issued after the preliminary meeting.
Procedural measures
  • The Tribunal has sole discretion to make such orders and directions as it considers necessary for the final proportionate determination of the matters in the dispute.
Witness evidence 
  • Rule 13.1 provides that the Tribunal may in their sole discretion decide whether and to what extent there should be oral or written evidence or submissions. 
  • Witnesses can be cross-examined and asked questions by the Tribunal. 
Fees & costs
  • No fees are payable to ARIAS on commencing arbitration proceedings under the Rules.  
  • Fees are only payable to ARIAS where it is involved in making an appointment under the Rules or required to determine any question as to what fees and expenses of any arbitrator or Umpire (a neutral third party appointed to settle disputes between arbitrators) are appropriate. 
  • The reasonable and proportionate costs of the arbitration shall generally be borne by the unsuccessful party, except where it appears to the Tribunal that this is not appropriate.

Expedited arbitrations

ARIAS has issued the ARIAS Fast Track Arbitration Rules (“AFTAR”). AFTAR provides for speedy resolution by a sole arbitrator.  

ARIAS' model arbitration clause provides for a dispute to be referred to AFTAR if the amount in dispute is less than US$500,000.  

The default position under AFTAR is that the arbitration shall proceed on documents and written submissions alone, which must be submitted within 4 months of the commencement of the arbitration. The award is to be published within 14 days of the deadline for the submission of documents and submissions. 

Constitution of the tribunal

If there is no agreement as to the qualification of arbitrators, they shall be persons with not less than 10 years’ experience of insurance or reinsurance within the industry or as lawyers or other professional advisors serving the industry. 

Rule 6 enables ARIAS to appoint (1) a sole arbitrator when the arbitration agreement provides for a sole arbitrator but the parties are unable to agree the identity of that arbitrator; (2) a second arbitrator when the arbitration agreement provides for party-appointed arbitrators but the Respondent fails to appoint an arbitrator; and (3) a third arbitrator when the arbitration agreement provides for a 3-person tribunal, but the 2 party appointed arbitrators are unable to agree upon a third member of the panel. 

Note: Emergency Arbitrators

There is no provision in the Rules or the AFTAR regarding emergency arbitrators. 

Arbitrator conflicts / disclosure of interest

Up to 14 days after the constitution of the Tribunal, either party may require any member of the Tribunal to provide a declaration of interest setting out any facts or matters that may reasonably raise doubts as to impartiality of that Tribunal member. 

Any objection to a member of the Tribunal must be made within 14 days of the matter coming to the attention of the objecting party.

Note:

The 2024 IBA Guidelines on Conflicts of Interest in International Arbitration are also applied in practice. A link to those IBA Guidelines can be accessed here.

Consolidation

Provided every party to an arbitration or arbitrations shall first have given their consent to the Tribunal in writing, the Tribunal may hear tripartite, multipartite or consolidated arbitrations and make a single award in respect of such consolidated arbitrations.

Pleadings or memorial approach?

The Rules do not mandate one approach over the other, but usually, parties to ARIAS arbitrations prefer the pleadings style.

Summary judgment

The Rules contain no express reference to summary judgment. 

However, unless otherwise agreed by the parties, for arbitrations seated in England and Wales or Northern Ireland, the Tribunal has the power under section 39A of the Arbitration Act 1996 to make an award on a summary basis in relation to a claim, or a particular issue in a claim, if the Tribunal considers that:

A party has no real prospect of succeeding on the claim or issue; or

A party has no real prospect of succeeding in the defence of the claim or issue.

 

Security for costs

The Rules contain no express reference to security for costs. 

However, unless otherwise agreed by the parties, for arbitrations seated in England and Wales or Northern Ireland, the tribunal has the power under section 38 of the Arbitration Act 1996 to order a Claimant to provide security for the costs of the arbitration.

Disclosure of documents

The Rules do not provide for the mandatory disclosure of documents. 

However, the Tribunal can order the disclosure of documents relevant to the dispute as it considers necessary and proportionate for the proper disposal of the dispute, and determine when those documents are to be disclosed.

Hearings

In the absence of written agreement, the parties have the right to be heard before a Tribunal. 

Note: The parties may agree in writing that the Tribunal proceed to issue an award on the basis of documents and written submissions alone (i.e. without a hearing). 

ARIAS' role in the scrutiny of arbitral awards

ARIAS does not scrutinise arbitral awards.   

Appeals

The Rules contain no express provision dealing with appeals unless the parties choose to agree the optional “appeal amendment clause”.

For ARIAS arbitrations seated in England, the parties’ rights to challenge or appeal against arbitral awards are limited to those set out in sections 67 – 69 of the Arbitration Act 1996.

Further information

    Model clause
    All disputes and differences arising under or in connection with this contract shall be referred to arbitration under ARIAS Arbitration Rules.

    The Arbitration Tribunal shall consist of three arbitrators, one to be appointed by the Claimant, one to be appointed by the Respondent and the third to be appointed by the two appointed arbitrators.

    The third member of the Tribunal shall be appointed as soon as practicable (and no later than 28 days) after the appointment of the two party-appointed arbitrators.  The Tribunal shall be constituted upon the appointment of the third arbitrator.

    The Arbitrators shall be persons (including those who have retired) with not less than ten years’ experience of insurance or reinsurance within the industry or as lawyers or other professional advisers serving the industry.

    Where a party fails to appoint an arbitrator within 14 days of being called upon to do so or where the two party-appointed arbitrators fail to appoint a third within 28 days of their appointment, then upon application ARIAS (UK) will appoint an arbitrator to fill the vacancy.  At any time prior to the appointment by ARIAS (UK) the party or arbitrators in default may make such appointment.

    The Tribunal may in its sole discretion make such orders and directions as it considers to be necessary for the final determination of the matters in dispute.  The Tribunal shall have the widest discretion permitted under the law governing the arbitral procedure when making such orders or directions.

    The seat of arbitration shall be ……………………..

    The proper law of this contract shall be the law of ………………………….

If you would like any further information about ARIAS (UK) arbitrations, please contact Anthony Menzies (amenzies@dacbeachcroft.com) or Franc Gozalvez (fgozalvez@dacbeachcroft.com). 

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