NOMA introduces new fast track arbitration rules

The NOMA (Nordic Offshore and Maritime Arbitration) arbitration rules, also referred to as “Nordic Arbitration”, were introduced to the Scandinavian market in 2017 and have turned out to be popular.

From early on, NOMA planned to introduce separate rules for less complicated disputes, similar to what has been done by several other arbitration institutes and organisations.  An example is the LMAA Small Claims Procedure which has been in place for many years and widely used, but there are many others as well.  In October 2018, a working group was established within the Norwegian part of NOMA to consider and prepare draft rules. The group consisted of lawyers from some of the major Norwegian law firms, including Nordisk. From the outset, the working title was “Small and Medium Claim Guidelines” and as the name suggests, the aim was to make guidelines rather than firm rules.

The working group compiled a survey of major arbitration rules applicable in other jurisdictions such as the LMAA, ICC etc.  Using this survey, they prepared a recommendation which was circulated to the NOMA-representatives in the other Nordic countries for comments. The recommendation was to make separate Fast Track rules, not just guidelines, and a number of proposals were made as to what the rules should include, such as the monetary threshold for the rules to apply, whether they should apply automatically in NOMA arbitrations (opt-out) or only when agreed expressly by the parties (opt-in).

In October 2019, the working group received feed-back from NOMA-members in the respective countries and commenced drafting a new set of rules.  The first drafts were based on the idea that the regular NOMA Arbitration Rules would apply, and that the Fast-Track rules would be a separate chapter setting out applicable amendments to the ordinary rules.  It was also proposed that the Fast-Track rules should apply automatically when the parties agreed NOMA arbitration, unless the parties specifically agreed that they should not (opt-out).

However, after circulating a draft on this basis, it was decided that the rules should be stand-alone rules (i.e. not rely on references to the ordinary rules), and only apply if expressly agreed by the parties (opt-in).  As a result, a fresh draft was prepared, taking the ordinary rules as a starting point and amending and simplifying them as appropriate. The end result was adopted by NOMA in the early part of 2021 and can now be found on the NOMA web site Nordic Arbitration.

The NOMA Fast Track Arbitration Rules apply when the parties have expressly agreed so in their dispute resolution clause(s) or otherwise, and where the aggregate amount of the claim and/or counterclaim of a dispute does not exceed USD250,000.

As a main rule, the arbitration panel will consist of a sole arbitrator, but the rules are open for the parties to agree a panel of three arbitrators. The rules regulate certain aspects of how the arbitration proceedings shall be conducted, seeking to simplify and speed up the process compared to the ordinary rules, and to reduce the costs involved.  Accordingly, and by way of examples, the time limits for appointing the arbitrator and the service of submissions have been shortened, the number of submissions allowed is limited, as a starting point there shall be no oral hearing, and the fees of the arbitrator(s) and recoverable costs of the parties are subject to restrictions.

In summary, NOMA now has a comprehensive set of rules which will hopefully result in faster and less costly arbitration proceedings for disputes that involve relatively small amounts. It remains to be seen whether arbitrations conducted under the Fast-Track rules will be significantly more efficient and less costly than under the ordinary rules, and whether they will gain popularity in the industry.

It may be said that the end result perhaps includes too much content from the ordinary rules, by, for example, allowing flexibility to agree three arbitrators and permit oral hearings etc, which risks undermining the aspirations of the Fast Track Rules. Hopefully, these possible concerns will remain theoretical in practise.