Before making a decision whether or not to invest in any particular claim, a third party funder will typically assess six key variables: jurisdiction, liability, quantum, duration, cost, and enforcement/recovery.

As to the fourth of these variables – duration – the question is simple: how long will it take to receive an award? As explained in Global Arbitration Review last month, Vannin Capital has released data on just how long it takes, on average, for a tribunal to render an award following the close of a final hearing in an ICSID arbitration. That period is 379 days, having reviewed the 231 ICSID Convention and ICSID Additional Facility arbitrations to result in an award from ICSID's inception to 31 December 2015.

The selection of the last day of a final hearing as the appropriate starting point to measure the amount of time taken by a tribunal to draft an award is simple: it is the first day when it can be reasonably expected that arbitrators are able to deliberate and work on an award. This is, of course, not the only date that could be chosen for this purpose. One could instead rely on the date post-hearing submissions are received by the tribunal, or the date reply post-hearing submissions (if contemplated) have been filed. The selection of such a date, however, does not significantly change the results, adjusting the period by approximately 30 – 60 days (the typical deadlines for post-hearing and reply post-hearing submissions following a hearing).

The purpose of the Global Arbitration Review study was straightforward: to assist parties and tribunals in formulating a reasonable and realistic schedule for deliberations and delivery of a final award. Consistent with this, procedural orders entered in two ICSID cases in recent months demonstrate how tribunals have started to commit to schedules, at least in principle, for the drafting of awards, including regular updates to parties on progress.

On 16 December 2015, the tribunal (Dupuy, Mantilla-Serrano, Thomas) in an ICSID Additional Facility arbitration, Corona Materials, LLC v. Dominican Republic (ICSID Case No. ARB(AF)/14/3), issued Procedural Order No. 1 following a first session held by telephone conference earlier that month. Section 5 of that order, entitled "Decisions and Procedural Rulings of the Tribunal" provided as follows:

5.3. The Tribunal will draft all rulings, including the award, within a reasonable time period. If a ruling has not been issued within three months after the final submission on a particular matter, the Tribunal will provide the parties with status updates every one month.

Less than two months later, on 10 February 2016, the tribunal (Pinsolle, Feit, Thomas) in an ICSID Convention arbitration, ACP Axos Capital GmbH v. Republic of Kosovo (ICSID Case No. ARB/15/22), entered its own Procedural Order No. 1 following a first session conducted by telephone nine days earlier. Section 5 of that order (entitled "Rulings of the Tribunal") includes language almost identical to that adopted by the Corona Materials tribunal.

The similarity in the procedural orders entered into by the Corona Materials and ACP Axos tribunals is not surprising. Leaving aside the relevance of the common arbitrator between the two arbitrations (Thomas), the near identical requirements track the text of the "Draft Procedural Order No. 1" prepared by ICSID and provided to parties (also available on its website):

5.3. The Tribunal will draft all rulings, including the award, within a reasonable time period. If a ruling has not been issued within [three – or as decided by the parties] months after the final submission on a particular matter, the Tribunal will provide the parties with status updates every [insert time – to be decided by the parties] months.

The language in ICSID's Draft Procedural Order No. 1 is consistent with its Practice Notes for Respondents (released on 10 December 2015), in which it explained that parties "should address their expectations for delivery of decisions and awards" in the first procedural order. ICSID also stated in those notes that at the conclusion of the final hearing, parties may "ask the tribunal to advise how long they expect to take before the award is rendered".

Of course, the question as to what constitutes a "reasonable time period" remains one that can only be answered in the context of a particular arbitration. In making that determination, a number of factors are likely to be relevant: the complexity of particular cases; the use of certain procedural mechanisms (such as challenges to arbitrators, bifurcation requests and amicus curiae applications); the need to translate the award in some cases; the emergence of post-hearing evidentiary or legal issues; suspensions of proceedings; changes in the composition of counsel or the tribunal; and dissents to a final award.

To be sure, the inclusion of a requirement along the lines of those adopted by the Corona Materials and ACP Axos tribunals does not guarantee the timely issuance of an award. Nor is such a requirement strictly necessary, since tribunals, and in particular, a tribunal president, are responsible for delivering orders and awards in a timely fashion. What these requirements do accomplish, however, is important: they may alleviate frustrations with the length and uncertainty of the award process. For this reason, it is in everyone's interest for requirements like those adopted by the Corona Materials and ACP Axos tribunals – as suggested by ICSID in its Draft Procedural Order No. 1 – to become standard practice in first session procedural orders.

Notes to Editors:

For more information on Vannin Capital, please contact: Meika Aysal, Marketing at Vannin Capital, T: +44 207 099 5180, E: ma@vannin.com