Introduction to the Cut-off Date in Arbitration

In arbitration, the cut-off date is a customary procedural tool used by arbitral tribunals to control the submission of new facts, allegations and evidence by the parties. It is typically defined in the procedural rules or the first procedural order, usually after consulting with the parties. Its main purpose is to ensure the efficient conduct of the arbitration while ensuring fairness, equal treatment and the parties' right to be heard.

Legal Basis for the Cut-off Date

Most arbitration rules have no provision on cut-off date. Including  a cut-off date is thus rooted in several legal principles and procedural rules that govern the arbitration procedure:

Burden of Proof: The starting point is the burden of proof. One of the foundational principles of arbitration in many jurisdictions is that each party bears the burden of proving the facts on which their claims or defenses rely. For instance, Article 24 of the Swiss Rules of International Arbitration 2021 («Swiss Rules») explicitly states that each party must prove the facts supporting its claims or defenses. It further provides that the arbitral tribunal shall determine the admissibility, relevance, materiality, and weight of the evidence. At any time during the arbitral proceedings, the arbitral tribunal may require the parties to produce documents, exhibits, or other evidence within a period of time determined by the arbitral tribunal, which also flows from the power of the arbitral tribunal to define the proceedings. Procedural rules often contain similar language. 

Procedural Rules and Tribunal's Powers: Notwithstanding the above, procedural rules, such as the ICC Arbitration Rules 2021 («ICC Rules») and the Swiss Rules, empower the arbitral tribunal to define the arbitration proceedings as it deems appropriate, subject to ensuring equal treatment of the parties and their right to be heard (Article 15 Swiss Rules, Article 22(2]) ICC Rules). The tribunal usually set the procedural timetable, including the cut-off date, during the case management conference in accordance, or at least upon, consultation with the parties.

Efficiency and Equal Treatment of Parties: Efficiency is a crucial goal in arbitration, and adherence to the procedural timetable by the parties is essential.  Article 22(1) ICC Rules, e.g., highlights the importance of conducting the arbitration in an expeditious and cost-effective manner, taking into account the complexity and value of the dispute. The cut-off date helps ensure that the parties submit all their evidence and arguments within the specified timeframe, enabling a smooth and organized arbitration process. The respect for the procedural timetable is also linked to the principle of equal treatment of the parties, as it prevents one party from gaining a procedural advantage by delaying or introducing evidence after the established date.

The cut-off date must logically precede the closing of the taking of evidence and of the proceedings as such. Article 29(1) Swiss Rules, e.g., provides that when the arbitral tribunal is satisfied that the parties have had a reasonable opportunity to present their respective cases on matters to be decided in an award, it may declare the proceedings closed with regard to such matters. The arbitral tribunal may, if it considers it necessary owing to exceptional circumstances, decide, on its own initiative or upon the application of a party, to reopen the proceedings on the matters with regard to which the proceedings were closed pursuant to Article 29(1) at any time before the award on such matters is made.

Options and Impact of the Cut-off Date

The cut-off date has major procedural implications because it sets the final deadline for the submission of new facts and evidence (apart from real novae). The consequences of disregarding the cut-off date may vary depending on the applicable procedural rules and the arbitral tribunal's discretion thereunder. Non-compliance may result in the non-acceptance of evidence or new claims (Swiss Federal Court – «SFC» – 4A_274/2012 of 19 September 2012, reason 3.2).

Therefore, its establishment in arbitration proceedings requires striking a delicate balance between maintaining a strict regime and allowing for some flexibility to address exceptional circumstances. Too strict a cut-off regime may lead to adverse consequences, particularly when parties encounter unforeseen events or complexities during the arbitration process. In such cases, the inability to introduce new evidence or claims after the cut-off date can severely impact a party's right to present its case, resulting in a perception of unfairness and unequal treatment, potentially opening the way to annulment of the award or jeopardizing its enforceability, not only if no relief is granted to submit the evidence later, but also if such relief is actually granted: In case of strict procedural rules, e.g., a party may claim that the relief granted to the opposing party infringes the agreed procedural rules and the equal treatment between the parties. In an arbitration, the claimant had not submitted its statement of claim within the deadline set in the procedural timetable. The arbitral tribunal reminded the claimant of the expired deadline and set a grace period, although the arbitration rules stipulated a different procedure. Although the SFC did not set aside the arbitral award on that basis, claimant may have had less luck before a foreign enforcement court (see SFC 4A_405/2016 of 2 March 2017). 

Therefore, in order to draw legal consequences of non-compliance with the cut-off date, such consequences should be explicitly stated in the procedural rules and orders. 

To address these concerns, some arbitral tribunals adopt a more balanced approach by implementing a general deadline rather than an absolute and rigid cut-off date, explicitly allowing parties to seek relief from the arbitral tribunal in unforeseen and exceptional circumstances. Such flexibility may be all the more needed in complex cases, e.g. in consolidated or multi-party proceedings.

Respecting the Cut-off Date

In order to respect the cut-off date, parties must diligently adhere to and comply with the applicable procedural rules (see, e.g., SFC 4A_274/2012 of 19 September 2012, reason 3.2; ASA-Bull. 4/2013, page 821). Here are key ways to respect the cut-off date:

Timely Submission: Parties must submit their factual allegations, evidence, and requests «within the prescribed timeframes» as specified in the procedural timetable. Although this principle seems clear, in some instances, questions may arise as to whether a submission is timely made. This is so, e.g., in case of bifurcation: Some questions which pertain to liability may also relate to some degree to quantum, which raises the question as to what exactly the scope of the liability phase is and when exactly to bring what evidence. When for instance an agent’s commission rate is under dispute, the commission rate itself is in principle a quantum issue. Nevertheless, other elements of the agency’s agreement, such as the scope of the agency agreement (such as the agency objects which give rise to a commission right), may be relevant under both the liability and the quantum. The same holds true in construction contracts when damages are claimed because of defects: Whereas the existence and consequences of defects are dealt with in the liability phase, the extent and impact thereof may be relevant in both phases. 

Timely submission of facts and evidence may also be an issue under the right to be heard: Although in SFC 4A_277/2021 of 21 December 2021, the SFC emphasized that the right to reply to submissions of the other party is fundamental to Swiss arbitration law and is enshrined in Article 190(2)(d) of the Swiss Act on Private International Law (SPILA), Article 6 of the European Convention on Human Rights (ECHR) does not apply to such procedures in a strict sense (confirmed in SFC 142 III 521 reason 2.3.4). However, new allegations of a party shortly prior to the cut-off date may allow the other party to reply in due time, even if this is after the cut-off date (please note in this context that an expert report of one party does not necessarily allow the other party to file new evidence, see SFC 4A_105/2012 of 28 June 2012, reason 2.4). The same applies in case new facts are introduced as demonstrative exhibits or during the hearing of witnesses (although this is usually not foreseen in arbitration rules, it may happen in practice, and in my experience, arbitral tribunal often deal with such situations in a pragmatic way by granting the other party sufficient time to deal with this issue, e.g. by replying to it at a later stage of the hearing, or even by allowing the party to call new witnesses for examination to counter such evidence). 

Proper Form of Submissions: On top of that, the correct form of submissions is essential to meet the requirements of the cut-off date. For instance, when dealing with witnesses, parties are typically expected to submit written witness statements by the cut-off date (this principle is often stated in the procedural rules as well as in the procedural timetable). Similarly, if a party intends to present expert reports, these reports should be submitted along with the relevant evidence before the specified deadline. Also, when requesting the arbitral tribunal to commission an expert report on some issues, it might be necessary to submit all the relevant documents on which the expert should base its report in the form and within the applicable timetable, and before the cut-off date (see, e.g., SFC 4A_277/2017 of 28 August 2017, reason 3.2).

Payment of administrative cost, arbitral tribunal fees and advances on costs: In order for arbitral tribunals to accept the submission of facts, claims and evidence, the administrative cost, arbitral tribunal fees and other advances on costs, such as fees related to arbitral tribunal’s appointed experts or on-site inspections, must be paid. Failure to pay the filing fee is deemed to constitute a party’s waiver of its right to file the corresponding submission (SFC 136 II 380).

Novae and Demonstrative Exhibits: In some situations, crucial evidence may not have been accessible before the cut-off date. In such situations, the arbitral tribunal may accept new evidence under the exceptional circumstances rule mentioned above.

Seek Clarification: As we have seen above, various questions may arise on the timing and the formalities to respect deadlines, including the cut-off date. Therefore, in case of uncertainty or ambiguity regarding the procedural requirements or the cut-off date itself or its scope, parties are encouraged to raise such issues at the case management conference or seek clarification from the arbitral tribunal when the issue pops up at a later point in time. Clear communication and understanding of the procedural rules can help avoid inadvertent violations, promote procedural fairness and enhance acceptance or at least enforcement of the award. In case of bifurcation, clarification may be needed because of the binding effect of an interim award (on liability) (ATF 128 III 191, 4a).

In this context, it is to be noted that only awards, and not procedural orders rendered by arbitral tribunals, may be challenged before the SFC (SFC 4A_550/2009 of 29 January 2010; for the distinction thereof, see e.g. SFC 4A_424/2011 of 2 November 2011). On the other hand, a party must raise procedural objections immediately (Article 182(4) SPILA). Failure to do so is deemed to constitute a waiver, and later objections will be considered contrary to procedural good faith (i.e., «veniere contra factum proprium») and the SFC will not hear them (see recently SFC 4A_170/2023 of 28 June 2023; see also 4A_102/2016 of 27 September 2016). 

Conclusion

The concept of a cut-off date in arbitration plays an important role in maintaining the efficiency, fairness, and equal treatment of parties. However, various questions may arise in this context during an arbitration. Therefore, some flexibility may be advisable depending on the circumstances, allowing the arbitral tribunal to exercise some discretion and to consider exceptional situations when allowing late submissions. The assessment of such circumstances should be guided by the principles of due process, equal treatment, and procedural fairness, while ensuring the arbitration process remains expeditious and cost-effective. In case of uncertainty, it is advisable to early seek clarification form the arbitral tribunal. 

P.s.: The Role of ChatGTP in the Drafting of This Blog

Drawing upon my prior positive experiences with ChatGTP in various settings, I was intrigued to explore its capability in aiding my blog drafting process. My initial approach was to offer ChatGTP a comprehensive introduction, detailing my background, the blog's topic, its core content, and its anticipated readership. As I had expected, the initial result was sobering: ChatGTP produced a rather generic piece on arbitration, inadvertently mixing up themes like the cut-off date and the Redfern Schedule. I then supplied the AI with an extensive six-page input with various ideas, relevant case law, and preliminary text segments I had drafted beforehand. After pressing the «regenerate» feature a few times, ChatGTP furnished a well-organized draft that served as a sound foundation for my blog. However, due to the intricate nature and specificity of the legal vernacular involved, substantial revisions and elaborations were needed.

In concluding, ChatGTP proved helpful in providing first ideas, distilling vast content into concise and structured text and summarizing text extensions into suitable text modules which could then be easily inserted into the blog. Additionally, it helped me to polish my initial text, although in some instances, its draft was too «flowery» and I had to go back to my original text. The true intellectual work, however, undeniably remained with the author. Given AI's accelerated evolution and its ever-expanding knowledge base, though, I am keenly awaiting the outcome of a similar experiment in the near future. 

Stay tuned!