| 44TH EDITION

APR • SEP | 2022 • YAR • 26

|CHAPTER II
A RT I C L E S

A. CIARB PRACTICE
GUIDELINE ON PARTY
NON-PARTICIPATION:
REFLECTIONS
AND PRACTICAL
SUGGESTIONS
By Mino Han and Daae Kim
Liza Rusalskaya

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 | 44TH EDITION
APR • SEP | 2022 • YAR • 27

Mino Han (Peter & Kim)

Daae Kim (Peter & Kim)

I. Introduction

When a party in a lawsuit is not participating or otherwise dispute resolution, and therefore, the principle of equal
does not appear at a court hearing, there are often specific treatment of the parties is reflected in arbitration laws and rules
civil procedural rules provided for in legislation addressing the in various forms. Article 18 of the UNCITRAL Model Law
implications of that party’s non-participation. For example, expressly provides that “the parties shall be treated with equality
Article 148(1) of the Korean Civil Procedure Act states that when and each party shall be given a full opportunity of presenting his case.”4
a party fails to appear on the date of the hearing, matters stated
in such party’s written complaint, defence and other briefs will Challenges arise when one party refuses or fails to
be deemed stated, and the appearing party may be ordered to participate in arbitration proceedings. While most of the
make pleadings. Furthermore, under Article 150(1) of the same
1
arbitration laws and rules aim to ensure efficiency of the
act, if the non-participating party failed to submit any pleadings, proceedings by empowering the tribunal to continue the
the statements as alleged by the appearing party will be treated proceedings and issue an award even if one of the parties does
as an admission. 2
not participate,5 the tribunal must nonetheless ensure that the
proceedings are conducted in line with the principle of equal
In contrast, international arbitration rules, and arbitration treatment, and that fair and sufficient opportunity are provided
laws often provide only limited guidelines on the implications to both parties. Notably, under Article 5(1)(b) of the New York
of party non-participation. For instance, the International Convention, if a party against whom the award is invoked has
Arbitration Rules of International Chamber of Commerce is not received “adequate notice” of the arbitration proceedings
silent on the issue. Similarly, the only provision relevant to the or was unable to present his case, this may constitute a ground
issue under the 1985 UNCITRAL Model Law on International for refusal to enforce the award. In this regard, the tribunal may
Commercial Arbitration (“UNCITRAL Model Law”) is Article feel quite a burden when managing an arbitration in which one
25, which simply provides that the arbitral tribunal shall of the parties is absent.6
continue the proceedings without treating such failure in itself as
an admission of the claimant’s allegations if the respondent fails This is where CIArb Practice Guideline comes in.
to communicate his statement of defence. 3
Specifically, the Guideline, together with its detailed
commentaries, sets out some guidance on party non-
Against this background, a number of soft law instruments participation, namely: (1) general principles to be applied
have been developed by the arbitration community to close the (Article 1); failure of the claimant to proceed with its case
practice gaps. Most well-known and often referred to is the (Article 2); failure of the respondent to submit a statement
International Arbitration Practice Guideline on Party Non- of defence or to participate (Article 3); and a party’s non-
Participation published by the Chartered Institute of Arbitrators participation at a scheduled hearing (Article 4).
(“CIArb Practice Guideline” or “Guideline”).
A. Article 1 – General Principles
Still, arbitrators regularly face procedural and substantive
issues that are not sufficiently covered in the Guideline. The Article 1 consists of five paragraphs each dealing with
authors will therefore provide an overview of CIArb Practice different issues that may arise when a party is absent at different
Guideline, followed by some practical tips and suggestions for stages of proceedings – i.e., from the commencement till the
an arbitrator to consider in an arbitration where a party is not end of the proceedings.
participating.
1. Paragraph 1 (Arbitrators’ Discretion to Decide
II. CIArb Practice Guideline – A Brief Commentary what Constitutes Non-participation)

International arbitration strives for fair and neutral Under Paragraph 1, arbitrators are required to ensure,

1
Article 148(1) of the Korean Civil Procedure Act.
2
Article 150(1) of the Korean Civil Procedure Act.
3
1985 UNCITRAL Model Law, Article 25.
4
1985 UNCITRAL Model Law, Article 18.
5
For example, Article 25 of the UNCITRAL Model Law provides that the arbitral tribunal may continue the proceedings and make the award on the evidence
before it if any party fails to appear at a hearing or to produce documentary evidence. KCAB International Arbitration also provides that the Arbitral
Tribunal shall proceed with the arbitration and make an Award on the evidence before it if a party fails to appear at or participate in a hearing. As seen
from these examples, if there is a non-participating party, it is possible for the other party to take full advantage of the opportunity given to it.
6
New York Convention, Article 5(1)(b).

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 | 44TH EDITION
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to the extent possible, that the claimant has a prima facie case Another important practical issue is whether the
and that all parties are properly notified of the proceedings. arbitration has properly commenced when the respondent is
Arbitrators are also required to satisfy themselves that the silent, and therefore it is unclear whether delivery of service
non-participating party has no acceptable excuse for its non- to such party has been made. While some arbitration rules
participation. The commentary to Paragraph 1 recommends
7
provide that arbitration proceedings commence when the
arbitrators to set a time limit for the non-participating party relevant institutional secretariat receives the request for
to submit a justification of its non-participation. It further arbitration,10 it will be recommendable to ensure that the
allows arbitrators to extend the applicable time limit if the request for arbitration and relevant letters from the secretariat
non-participation was caused by unforeseeable circumstances and/or the tribunal are properly delivered to the party not
beyond the control of the concerned party. responding.

In concluding that a situation of non-participation exists, In particular, when a party does not participate in
it is important to ensure that the non-participating party had nominating an arbitrator, it may later challenge the tribunal’s
an opportunity to explain the reasons for its silence. However, jurisdiction by arguing that it had no proper opportunity to
there may be situations where a party never responds from the participate in appointing an arbitrator. Arbitrators should
outset. In that case, arbitrators should direct the (participating) hence be alive of this issue and resolve any potential challenges
claimant to make reasonable enquiries and confirm the most on the commencement of the proceedings or constitution of
recent contact information of the non-participating party for the tribunal through cooperation with the secretariat, or if
proper notice. Such information on contact details should be necessary, with the participating party.
regularly updated by the participating party.
Practical suggestions
In addition, a proper notice should be made to the (a) Cooperate with the secretariat or the participating
non-participating party. This notice should state that the party to ensure that all parties received the request for arbitration
proceedings will continue and that non-participation may and relevant correspondence regarding the commencement of
result in potential disadvantages which should be assumed by the proceedings.
the non-participating party.
3. Paragraph 3 (Fair Opportunity to Present Their Case)
Practical suggestions
(a) Direct the participating party to make reasonable Paragraph 3 requires an arbitrator to ensure that all
enquiries and confirm the most recent contact information of parties are given a fair opportunity to present their case. There
the non-participating party. are various procedural issues to be considered in connection
(b) Direct the participating party to regularly update to this.11
the information on contact details.
(c) Provide notice to the non-participating party clearly Addressing Party Admission in the Context of Party
stating that the proceedings will continue and that non- Non-Participation
participation may result in potential disadvantages which
should be assumed by the non-participating party. Under Paragraph 3, the failure of a party to appear or
to present its case is not to be treated as an admission of the
2. Paragraph 2 (Arbitrators’ Jurisdiction) participating party’s assertions. Specifically, the commentary
on Paragraph 3 underlines the importance of the arbitrators’
Paragraph 2 requires arbitrators to consider jurisdictional impartial and independent assessment of the case. It also
issues even if no challenge has been raised. 8
cautions not to make an award in favour of the participating
party without first considering the merits of the dispute.
In this regard, CIArb Practice Guideline on Jurisdictional
Challenges provides some helpful guidance for arbitrators in A tribunal must decide the case objectively and
considering its jurisdiction. For instance, the said guideline independently. It should consider whether the parties’ claims
suggests that it is prudent practice for arbitrators to proactively are factually and legally sound taking into account all claims
invite the participating party to make submissions on the issue and evidence presented. In other words, the tribunal should
before considering and ruling whether they have jurisdiction. 9
not unconditionally accept the claims of the participating

7
Chartered Institute of Arbitrators International Arbitration Practice Guideline: Party Non-Participation, Article 1(1) and its Commentary.
8
Chartered Institute of Arbitrators International Arbitration Practice Guideline: Party Non-Participation, Article 1(2) and its Commentary.
9
Chartered Institute of Arbitrators International Arbitration Practice Guideline: Jurisdictional Changes, Article 1(5).
10
ICC Rules, Article 4(5); KCAB Rules, Article 8(2).
11
Chartered Institute of Arbitrators International Arbitration Practice Guideline: Party Non-Participation, Article 1(3) and its Commentary.

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 | 44TH EDITION
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parties, but rather review and determine the validity of the 4. Paragraph 4 (Communication with a Non-
claims by the participating party in light of the evidence participating Party)
presented.
When there is a non-participating party, arbitrators
Of a particular note is how arbitrators should deal need to be wary that no ex parte communication is made, and
with the contentions raised by the non-participating party. that relevant directions are provided for in Procedural Order
The commentary recommends that it may be appropriate to No. 1.
invite the participating party to respond to these points and
refer to these responses in any subsequent award. In doing Ex Parte Communications
so, however, arbitrators should not advocate for the non-
participating party by arguing its case. Paragraph 4 of the Guideline requires arbitrators to avoid
any ex parte communications in order to minimize the risk of
In practice, it would be good practice to provide a list of an award being challenged. If an ex parte communication takes
questions posed by the tribunal to the participating party also place, arbitrators should produce or instruct the participating
to the non-participating party immediately after the hearing party to produce a written record, such as a hearing transcript,
to make sure that the concerned party has an opportunity to and share that with the non-participating party as soon as
make relevant submissions thereafter if it wishes. possible.12

Language and Timetable of Proceedings In this regard, it is advisable that the directions for the
participating party to include the non-participating party
A party’s opportunity to sufficiently present its case is in all correspondence are expressly stated in Procedural
closely interlinked with how the proceedings are conducted. Order No. 1, in addition to the no ex parte communication
In particular, arbitrators should ensure that the language of requirement. This is particularly so when the main method of
the arbitration and the procedural timetable do not prejudice communication is through courier, instead of email. In such
a non-participating party. circumstance, proof of delivery of service should be provided
to the tribunal following the delivery of any documents to the
When an arbitration is submitted to a sole arbitrator non-participating party.
who speaks the same language other than English as a
participating party, it might be procedurally more efficient to Delivery of Service
conduct the arbitration in that language. However, even then,
arbitrators should consider using English as the language of Relatedly, Paragraph 4 of Article 1 also requires arbitrators
arbitration and conduct all proceedings in English, or at least to inform the non-participating party of the proceedings and
leave all procedural records in English, so that the right of the record in writing all procedural steps and efforts to include
non-participating party is not hindered. the party in the proceedings. If necessary, arbitrators should
ask the participating party to notify the concerned party and
With respect to the procedural timetable, it is important produce evidence of delivery of the notice or other documents
to provide sufficient time intervals between each procedural to the non-participating party if necessary.
step so that the non-participating party who was not involved
in any discussion on the timetable may later meaningfully Upon receipt of such proof of delivery, the tribunal
participate if it desires so. should allow the participating party to review the evidence to
be satisfied that the recipient is indeed the non-participating
Practical suggestions party. Given that the participating party will be in a better
(a) Prepare a list of questions to be posed to the position to ascertain accurate and up to date contact
participating party and provide all parties with the list information of the non-participating party (as compared to
immediately after the hearing to ensure that the concerned someone at an arbitral institution), it will be more efficient to
party has had an opportunity to make relevant submissions seek assistance from the former.
thereafter if it wishes.
(b) Consider using English as the language of arbitration Practical suggestions
and conduct all proceedings in English. (a) Ensure that Procedural Order No. 1 expressly sets
(c) Leave all procedural records in English. out directions for the participating party to include the non-
(d) Provide sufficient time intervals between each participating party in all correspondence and not to engage in
procedural step so that the non-participating party may later ex parte communication with the tribunal.
meaningfully participate if it desires so. (b) Direct the participating party to provide a proof of

12
Chartered Institute of Arbitrators International Arbitration Practice Guideline: Party Non-Participation, Article 1(4) and its Commentary.

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 | 44TH EDITION
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delivery of service to the tribunal following the delivery of the record of delivery of service from the very initial stage
any documents to the non-participating party. of the proceedings. This can be regularly updated and
(c) Direct the participating party to review the proof of subsequently attached as an appendix to the arbitral award to
deliveries and confirm to the extent possible that the recipient evidence proper notice to the non-participating party.
is the non-participating party.
(d) Seek assistance from the participating party to Arbitration Costs
make reasonable inquiries and provide up to date contact
information of the non-participating party. A tribunal has the power to make a cost award in which
it decides which party will bear which costs in what proportion.
5. Paragraph 5 (Making Awards when Faced with a According to the KCAB Arbitration Rules, an arbitrator may
Party Non-participation) let the parties share the expenses that they incurred in an
arbitration, taking into account the various circumstances
Issuance of an Award of the case.16 The ICC Arbitration Rules state that, when
determining the cost of an arbitration, one should consider
Paragraph 5 requires arbitrators to provide to all parties a number of relevant circumstances, such as the extent to
a notice of its intention to make an award prior to making which each party participated in the arbitration promptly and
any award. It is suggested that a non-participating party be economically.17
given a reasonable notice that the tribunal may be making
an award in their absence unless they participate within a While the CIArb Guideline is silent on how arbitrators
specified period. 13
can and should decide on the allocation of arbitration costs, a
question arises whether the participating party be entitled to
In practice, when there is a non-participating party, the a full cost order when there is a non-participating party. In the
tribunal’s notice of its intent to issue an award can be made authors’ view, this is a matter to be decided by considering the
with closure of proceedings so that the concerned party is specifics of each individual case. Arbitrators might consider
aware that if it fails to participate in the arbitration within a that any potential prejudice on the part of the participating
certain period of time, the tribunal will make its award based party was due to the continued delay caused by the non-
on evidence (submitted by the participating party) and other participating party.
records of the case.
That said, arbitrators should holistically consider how
Relatedly, arbitrators may want to consider the efficiently the participating party proceeded with the case (i.e.,
possibility of the hearing being resumed ex officio or upon the whether there were any unnecessary expenses and whether
request of a party prior to the issuance of the award. 14
In such there were any excessive claims). By applying such standard,
a case, it is advisable to notify the non-participating party to arbitrators may decide not to order the non-participating to
make relevant requests within a certain period of time. bear the full arbitration costs as claimed by the party present.

Notice Practical suggestions

(a) Notify the parties of the tribunal’s intention to issue
Under Paragraph 5, arbitrators are also required to an award based on evidence and other records of the case.
recite its efforts to include the non-participating party in the (b) Reiterate the non-participating party’s right to
proceedings. 15
This can be achieved by describing in detail participate in the proceedings and potential disadvantages it
how the arbitration proceedings were conducted and how the may have to assume.
issue of party non-participation was addressed throughout (c) Notify the non-participating party to make relevant
the proceedings. By showing that proper notice and ample requests within a certain period of time if the hearing is
opportunity to present its case was provided to the non- expected to be resumed ex officio or upon request of a party
participating party, the tribunal will be able to avoid its award prior to the issuance of the award.
being successfully challenged. (d) Consider creating and regularly updating a table
summarizing the record of delivery of service. This can be attached
In this regard, the award should expressly indicate proper as an appendix to the arbitral award to prove proper notice.
notices were continuously given to the non-participating party. (e) When deciding cost allocation, consider any potential
Arbitrators should also consider creating a table summarizing prejudice on the part of the participating caused by the non-

13
Chartered Institute of Arbitrators International Arbitration Practice Guideline: Party Non-Participation, Article 1(5) and its Commentary.
14
For example, see Article 31(2) of KCAB Rules.
15
Chartered Institute of Arbitrators International Arbitration Practice Guideline: Party Non-Participation, Article 1(5) and its Commentary.
16
Article 53 of the KCAB Arbitration Rules.
17
ICC Rules, Article 38(5).

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 | 44TH EDITION
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participating party and how efficiently the participating party Practical suggestions
proceeded with the case. (a) Provide sufficient time intervals between each
procedural step so that a non-participating party may later
B. Article 2 – Failure of the Claimant to Proceed meaningfully participate if it desires so.
with its Case (b) Provide equal time intervals to the parties for
important procedural milestones.
Article 2 sets out the circumstance where the claimant
fails to proceed with its case without providing an acceptable D. Article 4 – Non-participation at a Scheduled
excuse. Under the Guideline, arbitrators may terminate Hearing
the proceedings if no counterclaim is filed, subject to the
applicable law or rules.18 Under Article 4 of the CIArb Guideline, if a party fails
to appear at a scheduled hearing, arbitrators can decide to
Even when no counterclaim is filed, a participating continue with the hearing on an ex parte basis or temporarily
respondent may want to continue defending its case against adjourn while enquiries are made regarding the non-
the claims put forward by the non-participating claimant. This attendance.20
is because the respondent may wish to enjoy the res judicata
effect of an award setting out that the claimant’s claims have There are multiple factors arbitrators need to consider
no merit and are therefore dismissed. Therefore, the tribunal in conducting various types of a procedural hearing.
should ask the (participating) respondent whether it wishes to
continue the proceedings and receive an award. Scheduling a Case Management Conference or a Hearing

Practical suggestions A Case Management Conference nowadays is generally

(a) When the claimant is not participating, the tribunal conducted virtually or via telephone conference. If a party is
should ask the respondent whether it wishes to continue the expected not to participate, it is advisable that the schedule
proceedings and receive an award. and the agenda of the procedural conference be provided
to all parties for comments prior to the conference taking
C. Article 3 – Failure of the Respondent to Submit place. After the conference, the tribunal should provide clear
a Statement of Defence or to Participate directions to the parties regarding the procedural issues that
were discussed.
Under Article 3, arbitrators may continue the
proceedings even when a respondent, who failed to provide It is important to remember that a non-participating
an acceptable excuse, did not submit a statement of defence party may belatedly confirm its intention to participate in a
within the period provided for in the arbitration rules or procedural conference or a hearing. As such, when scheduling,
set by the arbitrators. The commentary on Article 3 further arbitrators should consider this possibility and set a specific
provides that before continuing the proceedings, arbitrators deadline for the non-participating party to notify the tribunal
should request the respondent to provide an explanation for and the participating party that it intends to participate.
the delay in submitting the statement of defence and seek
a confirmation on whether it intends to participate in the Similarly, when a hearing is to be conducted virtually,
proceedings. The commentary notes that it is prudent to arbitrators should notify such arrangement to the non-
allow the party to substantiate its position before moving on participating party with a timeline amenable to the time
to the next stage of the proceedings and provide a warning on zone of where the non-participating party is located or
the consequences of non-participation. 19
expected to be located, in case the concerned party makes
a last-minute decision to participate. Arbitrators should also
In this regard, arbitrators should provide for sufficient consider providing a dial-in number in an unlikely event that
time intervals between each procedural step bearing in mind the non-participating party has no access to virtual hearing
the possibility that the non-participating party may later platforms such as Zoom, MS Teams, WebEx or Google Meet,
decide to participate. While the time interval will be decided but nevertheless wish to participate via telephone.
in light of the nature of the dispute based on the request of
arbitration and in consultation with the participating party, Record of a Hearing
equal time intervals should be given to both parties for
important procedural milestones (e.g., memorial submissions). When a party fails to appear at a scheduled hearing and

18
Chartered Institute of Arbitrators International Arbitration Practice Guideline: Party Non-Participation, Article 2 and its Commentary.
19
Chartered Institute of Arbitrators International Arbitration Practice Guideline: Party Non-Participation, Article 3 and its Commentary.
20
Chartered Institute of Arbitrators International Arbitration Practice Guideline: Party Non-Participation, Article 4 and its Commentary.

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 | 44TH EDITION
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the tribunal, after consideration, decides to proceed without Practical suggestions

the non-participating party, the hearing should be recorded (a) If a party is expected not to participate, provide the
(either in audio or video format) or transcribed in order to schedule and the agenda of the procedural conference to all
minimize procedural challenges. While some institutions parties for comments prior to the conference taking place.
request the tribunal to provide a summary of what was After the conference, provide clear directions to the parties
discussed at a hearing, a recording or transcript should be regarding the procedural issues that were discussed.
preferred as they will more accurately capture the nuances of (b) When scheduling, set a specific deadline for the non-
the hearing. This recording or transcript should be provided participating party to notify the tribunal and the participating party
to the non-participating party immediately after the hearing whether it intends to participate in the procedural conference.
so that the concerned party may respond as necessary and in (c) For a virtual hearing, notify the non-participating
a timely fashion. party of the relevant arrangement with a timeline amenable to
the time zone of where the non-participating party is located
Witness Examinations or expected to be located. Consider providing a dial-in number
in case the non-participating party wishes to participate via
In principle, a witness who has submitted a witness telephone in case it has no access to virtual hearing platforms
statement in an arbitration procedure should attend the such as Zoom, MS Teams, WebEx or Google Meet.
hearing and undergo an examination if the other party wishes (d) Have the hearing recorded (either in audio or video
to cross-examine that witness. If a witness does not appear format) and/or transcribed to minimize procedural challenges.
at the hearing without a justifiable cause, the tribunal may The recording or transcript should be provided to the non-
exclude the witness’s statement from the evidence. 21
In participating party immediately after the hearing.
practice, it is common for a tribunal to give such witness (e) Arbitrators may require the participating party’s
statement only a low degree of evidentiary weight. witness(es) to appear at the hearing to confirm the authenticity
of witness statements.
In practice, when a party fails to appear at a scheduled (f) When examining witness(es), try to limit the scope
hearing, and hence no request by that party to cross-examine of questions to seeking confirmation of unclear and disputed
the participating party’s witness(es) is made, the tribunal may matters, and avoid cross-examining the witness(es) in place of
still require the participating party’s witness(es) to appear the non-participating party.
at the hearing. This is because the authenticity of witness
statements will need to be confirmed at the hearing in front of III. Conclusion
the tribunal unless the other party agrees otherwise or waives
its right to do so. When faced with party non-participation, arbitrators
have a difficult task of ensuring that the non-participating
It is often difficult to determine all relevant factual party is not deprived of its rights to present its case. There
circumstances based on a witness statement alone and are also other considerations relevant to protecting the
arbitrators often want to hear some oral evidence directly participating party’s rights.
from a witness. In such case, arbitrators should try to limit
their scope of questions to seeking confirmation of unclear Since its publication in 2016, the CIArb Guideline has
and disputed matters, rather than almost cross-examining the been by far the most important guideline arbitrators could
witnesses in place of the non-participating party. refer to on this subject. Nevertheless, arbitrators with limited
experience would appreciate benchmarking best practice that
The same is true for cross-examination of expert is not already set out in the Guideline. While undertaking a
witness(es). If no request for cross-examination of the full update of the Guidelines may be desired in the long term,
participating party’s expert witness(es) was made due to the efforts in further developing the Guideline at this juncture
other side’s non-participation, the tribunal needs to ensure would prove necessary and useful. The authors hope that this
that the expert is present at the hearing to establish the article will spark and promote the relevant discussion in the
authenticity of the expert reports. However, even here, the international arbitration community.
goal of the tribunal should not be to cross-examine the expert,
but to mainly clarify points necessary for making an award.

Mino Han (Peter & Kim),

Daae Kim (Peter & Kim)

21
IBA Rules on the Taking of Evidence in International Arbitration, Article 4, paragraph 7.

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