P.R.I.M.E. Finance – Public Consultation on Draft Revised Arbitration Rules

In January 2021 P.R.I.M.E Finance announced a public consultation on its draft revised Arbitration Rules. In the most ambitious revision of its rules since its inception, P.R.I.M.E. Finance invited specialist firms, financial institutions, arbitrators and any interested parties to contribute their comments by 31 March 2021. Key features of the rules include central roles for the Permanent Court of Arbitration and the P.R.I.M.E. Finance panel of arbitrators, greater transparency, provisions to address complex arbitrations, emergency and expedited rules and an emphasis on efficiency.

By René Bösch (Reference: CapLaw-2021-20)

P.R.I.M.E Finance, the Hague-based Panel of Recognized International Market Experts in Finance, was launched in January 2012 to help resolve disputes concerning complex financial transactions. P.R.I.M.E. Finance’s strength lies in the knowledge of its more than 200 experts in finance and dispute resolution worldwide. In 2015 P.R.I.M.E Finance joined forces with the Permanent Court of Arbitration (PCA), the world’s oldest arbitral institution with over a century of experience. As a result, arbitrations brought under the P.R.I.M.E. Finance Arbitration Rules are administered by the PCA.

According to P.R.I.M.E Finance, from its inception it was envisaged that P.R.I.M.E Finance would offer a specialized forum for finance disputes to be resolved by arbitration. It was on this foundation that the P.R.I.M.E Finance Arbitration Rules (the Rules) were drafted. With its current revision project, P.R.I.M.E Finance aims to ensure that the Rules are fully fit-for-purpose for users, reflecting current best practice in arbitration while preserving and expanding features of particular interest to financial market participants. 

For that purpose P.R.I.M.E Finance established a Drafting Group and a Consulting Group, both composed of pre-eminent banking experts and dispute resolution practitioners representing the world’s leading legal systems. Having met several times since its establishment in July 2020 the Drafting Group prepared a draft set of revised Rules that reflects breakthrough innovations in international arbitration and draws on the vast experience of members of both the Drafting and Consulting Groups.

The draft Rules focus on five key features: coordination among the PCA and P.R.I.M.E Finance, transparency, complex arbitrations, emergency and expedited rules, and efficiency. The combination of the PCA’s efficiency in administering arbitral proceedings and the Panel’s subject-matter expertise bring significant advantages for users in the banking and finance sectors. To ensure and increase transparency, amongst other things parties are required to disclose any third-party funding arrangement of any claim or defence, and the identity of that third party and final awards are to be published in anonymized form, to permit the emergence of a body of jurisprudence similar to the case law of courts in major financial centers.

One of the pitfalls in the arbitral process is that expediency often requires that all claimants, on the one hand, and all respondents, on the other, be treated alike, regardless of their interests. The draft Rules include detailed revised joinder and consolidation provisions, and a provision enabling separate arbitrations that are not eligible for consolidation to be coordinated in certain cases. They also comprehensively address emergency situations both before and after the tribunal is constituted, with provisions on emergency arbitration, interim measures and expedited rules. And finally, the draft Rules are built on efficiency. 

Once the consultation period ends, the Drafting Group will analyse all comments received with the aim to finalize the new Rules and publish them later in 2021. 

The draft Rules are available to download here https://primefinancedisputes.org/page/review-of-p-r-i-m-e-finance-arbitration-rules-1. Please send any comments to secretary@primefinancedisputes.org.

René Bösch (rene.boesch@homburger.ch)