Arbitration - generalArbitration - general

Arbitration = one of the techniques of « ADR » Arbitration = one of the techniques of « ADR » others are eg mediation, conciliation, expert determinationothers are eg mediation, conciliation, expert determination Informal forms of « contract governance »: in cross-border Informal forms of « contract governance »: in cross-border

contracts, creditors often do not even try state courts (or contracts, creditors often do not even try state courts (or not even arbitration), and use e.g. monitoring + reputation not even arbitration), and use e.g. monitoring + reputation management.management.

Sometimes « dispute escalation clauses » or « multi-tier Sometimes « dispute escalation clauses » or « multi-tier (arbitration) clauses »: first negotiation, then (arbitration) clauses »: first negotiation, then mediation/conciliation, then litigation (arbitration or courts)mediation/conciliation, then litigation (arbitration or courts)

E.g. in art. 20 FIDIC Red Book: first a « Dispute Adjudication E.g. in art. 20 FIDIC Red Book: first a « Dispute Adjudication Board » (DAB), then ICC Arbitration.Board » (DAB), then ICC Arbitration.

Arbitration - generalArbitration - general Types of arbitration:Types of arbitration:- Arbitration based on international public law, eg ICSID Arbitration based on international public law, eg ICSID

((suprasupra) ) - Arbitration based on national law, this chapter Arbitration based on national law, this chapter Double nature :Double nature :- On the one hand on a On the one hand on a contractual contractual basis (more correctly 2 basis (more correctly 2

contracts: 1° between the parties and 2° with the contracts: 1° between the parties and 2° with the arbitrator(s)) arbitrator(s))

- On the other hand On the other hand jurisdictional jurisdictional as to:as to: its procedure (procedure is analogous to judicial its procedure (procedure is analogous to judicial

procedure), and procedure), and its effects: its effects:

1° impact: normal judge has lack of jurisdiction; 1° impact: normal judge has lack of jurisdiction; 2° the arbitral decision is a jurisdictional decision (2° the arbitral decision is a jurisdictional decision (res res iudicataiudicata) and not merely a contractually binding decision ) and not merely a contractually binding decision even if not enforceable yet (even if not enforceable yet (auctoritasauctoritas, not yet , not yet potestaspotestas))

(National) arbitration statutes (National) arbitration statutes Where arbitration is «based» upon national law (esp. rules Where arbitration is «based» upon national law (esp. rules

on judicial organisation and procedure):on judicial organisation and procedure):> the national law of the « place of arbitration » contains > the national law of the « place of arbitration » contains the conflict rules the conflict rules > which refer to the applicable national law on (aspects of) > which refer to the applicable national law on (aspects of) arbitration (to be distinguished from the question of the law arbitration (to be distinguished from the question of the law applicable to the case itself)applicable to the case itself)

(National) arbitration statutes (National) arbitration statutes Topics of (national) arbitration statutes are:Topics of (national) arbitration statutes are:1) the conflict of law rule and 1) the conflict of law rule and 2) substantive rules, such as rules concerning 2) substantive rules, such as rules concerning - the arbitration agreement, the arbitration agreement, - the arbitrability (disputes capable of being settled by the arbitrability (disputes capable of being settled by

arbitration),arbitration),- the arbitral procedure,the arbitral procedure,- the supervision by (national) courts, the supervision by (national) courts, - the effects of the award (recognition, enforcement),the effects of the award (recognition, enforcement),- the annulment of the award. the annulment of the award.

Sometimes separate rules for domestic and transnational Sometimes separate rules for domestic and transnational arbitration (eg Switzerland; French case law identifying a arbitration (eg Switzerland; French case law identifying a French substantive international law of arbitration, Cass. 30 French substantive international law of arbitration, Cass. 30 III 2004 in III 2004 in UnikodUnikod))

Harmonisation of arbitration Harmonisation of arbitration statutes ? statutes ?

Partial harmonisation of the arbitration statutes (successful Partial harmonisation of the arbitration statutes (successful Uncitral model law ICL 1985, revised 2006, incorporated in Uncitral model law ICL 1985, revised 2006, incorporated in many national statutes, in 26 EU MS at least in part, in 13 in many national statutes, in 26 EU MS at least in part, in 13 in full)full)

National statutes e.g.: in Belgium in Judiciary Code (revised National statutes e.g.: in Belgium in Judiciary Code (revised 2013); in France in CPC; UK Arbitration Act 1996; Dutch 2013); in France in CPC; UK Arbitration Act 1996; Dutch Arbitration Act 2014 (in force 1-1-2015), in US Federal Arbitration Act 2014 (in force 1-1-2015), in US Federal Arbitration Act (FAA) 1925, OHADA uniform Arbitration Act, Arbitration Act (FAA) 1925, OHADA uniform Arbitration Act, etc.etc.

Often inspired by the Uncitral model lawOften inspired by the Uncitral model law

Treaties on recognition and enforcement abroad – see the NY Treaties on recognition and enforcement abroad – see the NY Convention 1958 (successful) (predecessor: Geneva Convention 1958 (successful) (predecessor: Geneva Convention 1923/1927)Convention 1923/1927)

Arbitration – Arbitration – (dis)advantages(dis)advantages Reasons for arbitration – advantages and disadvantagesReasons for arbitration – advantages and disadvantages

Flexibility of procedure >< uncertaintyFlexibility of procedure >< uncertainty Parties can choose seat, number of arbitrators, language, Parties can choose seat, number of arbitrators, language,

division of costsdivision of costs Confidentiality (no public character of procedure)Confidentiality (no public character of procedure) Higher costs for a single instance (arbitratrors to be paid) >< Higher costs for a single instance (arbitratrors to be paid) ><

Single instance, in principle no appeal, usually quicker (not Single instance, in principle no appeal, usually quicker (not always)always)

Arbitrators usually more specialised than judges in the type of Arbitrators usually more specialised than judges in the type of disputedispute

Internationally easier to obtain recogition and enforcement than Internationally easier to obtain recogition and enforcement than for foreign judgments (success of NY Convention, for foreign judgments (success of NY Convention, infrainfra))

Not every type of relief can be granted by arbitratorsNot every type of relief can be granted by arbitrators Not automatically enforceableNot automatically enforceable Difficult to oblige third parties to join (but if linked contracts also Difficult to oblige third parties to join (but if linked contracts also

provide for arbitration, arbitration may be easier)provide for arbitration, arbitration may be easier) In jurisdictions with class actions: avoid class actionsIn jurisdictions with class actions: avoid class actions

Arbitration – Arbitration – questions of contract law questions of contract law

The arbitration agreement (agreement which obliges the The arbitration agreement (agreement which obliges the parties to use arbitration in case of dispute and makes the parties to use arbitration in case of dispute and makes the future award binding for the parties):future award binding for the parties):- can be a separate agreement (- can be a separate agreement (ad hocad hoc), ), - or a clause in a wider agreement - or a clause in a wider agreement

Possible issues (on following slides):Possible issues (on following slides):- Formation (offer & acceptance)Formation (offer & acceptance)- Validity and invalidity as a contract Validity and invalidity as a contract - Legal capacity of the parties to conclude such an Legal capacity of the parties to conclude such an

agreementagreement- Arbitrability of the issues to be settled (i.e.: can the issue be Arbitrability of the issues to be settled (i.e.: can the issue be

settled by arbitration ?)settled by arbitration ?)

Arbitration agreement Arbitration agreement – formation & validity– formation & validity

The formation and validity of the arbitration agreement are in The formation and validity of the arbitration agreement are in principle determined by the principle determined by the lex contractus lex contractus (proper law) of the (proper law) of the arbitration agreement, also called arbitration agreement, also called lex arbitrilex arbitri

Conflict rule for the Conflict rule for the lex arbitrilex arbitri? In most places of arbitration ? In most places of arbitration (countries) the conflict rule is: (countries) the conflict rule is: > 1° choice of law (express or implied), > 1° choice of law (express or implied), > 2° (subsidiary) place of arbitration (> 2° (subsidiary) place of arbitration ( lex forilex fori) or closest ) or closest connection (chosen seat being an important element – EWCA connection (chosen seat being an important element – EWCA in in SulamericaSulamerica, 2012) (in Belgium Rome-I is applied , 2012) (in Belgium Rome-I is applied ‘overshootingly’, except where national law has a special ‘overshootingly’, except where national law has a special conflict rule) conflict rule) > Q. whether a choice of law of the contract in general is also > Q. whether a choice of law of the contract in general is also an implied choice of law for that arbitration agreement.an implied choice of law for that arbitration agreement.

The The lex arbitri (lex contractus) lex arbitri (lex contractus) of an arbitration clause in a of an arbitration clause in a wider agreement is determined separately from the wider agreement is determined separately from the lex lex contractus contractus of the contract of which it is a partof the contract of which it is a part

Arbitration agreement Arbitration agreement – formation & validity– formation & validity

What do most applicable laws/statutes (What do most applicable laws/statutes (lex arbitrilex arbitri) provide? ) provide?

Separability:Separability:

The formation and validity of the arbitration agreement must be The formation and validity of the arbitration agreement must be judged separately from that of the contract it is part of (autonomy judged separately from that of the contract it is part of (autonomy or separability of the arbitration clause) (cfr. French Cass. 7 May or separability of the arbitration clause) (cfr. French Cass. 7 May 1963 1963 GossetGosset or SC US 1967 in or SC US 1967 in Prima Paint v Flood & ConklinPrima Paint v Flood & Conklin; in ; in the UK S.6 Arbitration Act and E&WCA 2012 in the UK S.6 Arbitration Act and E&WCA 2012 in Fiona Trust v. Fiona Trust v. PrivalovPrivalov))

Effect: where the clause is valid, only the arbitrator decides the Effect: where the clause is valid, only the arbitrator decides the validity of the rest of the contractvalidity of the rest of the contract

Where one element of the arbitration clause is invalid, the rest of Where one element of the arbitration clause is invalid, the rest of the clause remains valid (eg arbitration clause specifying an the clause remains valid (eg arbitration clause specifying an arbitral forum that does not exist)arbitral forum that does not exist)

Arbitration agreement – formation & Arbitration agreement – formation & validityvalidity

What do most applicable statutes (What do most applicable statutes (lex arbitrilex arbitri) provide? ) provide? Invalidities ?Invalidities ?

No or only few specific rules; the rules of general contract No or only few specific rules; the rules of general contract law on formation and validity normally apply (Implied law on formation and validity normally apply (Implied consent by a third party in Cass.Fr. 26 Oct. 2011 consent by a third party in Cass.Fr. 26 Oct. 2011 CMN / CMN / FagerdalaFagerdala))

Sometimes invalidity of unilateral optional arbitration Sometimes invalidity of unilateral optional arbitration clauses (eg Russia; California Appeal Court 19 March 2013 clauses (eg Russia; California Appeal Court 19 March 2013 Compton; comp. for forum clauses Cass.(Fr.) 26 Sep 2012; Compton; comp. for forum clauses Cass.(Fr.) 26 Sep 2012; but deemed valid in Belgium, UK, Germany, Italy, Spain)but deemed valid in Belgium, UK, Germany, Italy, Spain)

Some specific rules, e.g. validity of agreement for Some specific rules, e.g. validity of agreement for arbitration of disputes governed by « overriding mandatory arbitration of disputes governed by « overriding mandatory provisions »: discussed after arbitrabilityprovisions »: discussed after arbitrability

Arbitration agreement - capacityArbitration agreement - capacity Conflict rule:Conflict rule:Often (but not in common law) a separate conflict rule as to Often (but not in common law) a separate conflict rule as to

the law applicable to the legal capacity of the parties, the law applicable to the legal capacity of the parties, referring to the « personal law » of each party referring to the « personal law » of each party

What do most applicable statutes decide as to the capacity What do most applicable statutes decide as to the capacity required for an arbitration agreement ? required for an arbitration agreement ?

- In principle the same restrictions on capacity as in the case In principle the same restrictions on capacity as in the case of a settlement agreement (eg minors, insolvent party, ...)of a settlement agreement (eg minors, insolvent party, ...)

- Sometimes additional restrictions on the capacity for Sometimes additional restrictions on the capacity for arbitration agreements, such as restrictions to authority arbitration agreements, such as restrictions to authority granted to agents, directors, receivers (in bankruptcy), granted to agents, directors, receivers (in bankruptcy), public agencies, etc... to dispose of the rights at stake public agencies, etc... to dispose of the rights at stake

Arbitration agreement – Arbitration agreement –

arbitrabilityarbitrability

Conflict rule as to the issue of arbitrability:Conflict rule as to the issue of arbitrability: often a cumulative conflict rule leading to more than one often a cumulative conflict rule leading to more than one

law applicable. Enforcement may require:law applicable. Enforcement may require:- arbitrability under the law of the place of arbitration;arbitrability under the law of the place of arbitration;- arbitrability under the law applicable to the issue to be arbitrability under the law applicable to the issue to be

settledsettled- arbitrability under the law of the country of enforcement. arbitrability under the law of the country of enforcement. see art. V.2.a. NY Convention.see art. V.2.a. NY Convention.

E.g. Belgian conflict rule (as stated in Cass. 16 Nov 2006 E.g. Belgian conflict rule (as stated in Cass. 16 Nov 2006 Van HopplynusVan Hopplynus, and Cass. 14 Jan. 2010 , and Cass. 14 Jan. 2010 SebastianSebastian) refers to ) refers to the application of the Belgian law on arbitrability in all the application of the Belgian law on arbitrability in all disputes where the Belgian courts have jurisdictiondisputes where the Belgian courts have jurisdiction

Arbitrability and public policy Arbitrability and public policy Arbitrability may be limited in matters governed by rules of Arbitrability may be limited in matters governed by rules of

public order, but in general public order, but in general 1° a dispute is arbitrable even if rules of public policy apply;1° a dispute is arbitrable even if rules of public policy apply;2° the arbitrators may and must apply rules of public policy 2° the arbitrators may and must apply rules of public policy

that are relevant for the dispute (e.g. a party invokes that a that are relevant for the dispute (e.g. a party invokes that a contract is void because contrary to competition law), and contract is void because contrary to competition law), and

3° the judicial control takes place 3° the judicial control takes place a posteriori.a posteriori.Comp.:Comp.:- Cass. B. 2 Feb. 1973Cass. B. 2 Feb. 1973- ECJ in ECJ in Eco Swiss / BenettonEco Swiss / Benetton (1999): competition law is part (1999): competition law is part

of the public policy exception in exequatur procedures (of the public policy exception in exequatur procedures (a a posteriori posteriori control)control)

- SC.US in SC.US in Mitsubishi Motors v. Soler Chrysler-Plymouth Mitsubishi Motors v. Soler Chrysler-Plymouth (1985): arbitrable(1985): arbitrable

However, the arbitration agreement may nevertheless be However, the arbitration agreement may nevertheless be invalid (see next slide) (better to tackle the problem not invalid (see next slide) (better to tackle the problem not merely a posteriori)merely a posteriori)

Arbitrability & overriding mandatory Arbitrability & overriding mandatory lawlaw

Arbitration of disputes governed by «overriding mandatory Arbitration of disputes governed by «overriding mandatory provisions »: ex ante control or ex post ? (comp. Discussion provisions »: ex ante control or ex post ? (comp. Discussion on forum clauses) ?on forum clauses) ?

Applications: labour law, some consumer contracts, rules Applications: labour law, some consumer contracts, rules protecting distributors or commercial agentsprotecting distributors or commercial agents

Belgian & German case law: ex ante control: where parties Belgian & German case law: ex ante control: where parties can waiver their right only after the dispute has arisen, they can waiver their right only after the dispute has arisen, they cannot on beforehand be bound to arbitration, unless the cannot on beforehand be bound to arbitration, unless the arbitrators are required to apply these mandatory arbitrators are required to apply these mandatory provisions irrespective of the otherwise applicable law.provisions irrespective of the otherwise applicable law.

- > Belgian case law: ‘conditional arbitrability’: disputes > Belgian case law: ‘conditional arbitrability’: disputes concerning termination of distributorship or commercial concerning termination of distributorship or commercial agency on Belgian territory (Belgian Distributorship Act agency on Belgian territory (Belgian Distributorship Act 1961 and Commercial Agency Act 1995) are not arbitrable 1961 and Commercial Agency Act 1995) are not arbitrable unless requiring the arbitrators to apply these provisions of unless requiring the arbitrators to apply these provisions of national law (Cass. 28 June 1979 & Cass. 14 Jan 2010 national law (Cass. 28 June 1979 & Cass. 14 Jan 2010 distributorship; Cass. 3 nov 2011 agency).distributorship; Cass. 3 nov 2011 agency).

- (continued)(continued)

Arbitrability & overriding mandatory Arbitrability & overriding mandatory lawlaw

Arbitration of disputes governed by «overriding mandatory Arbitration of disputes governed by «overriding mandatory provisions »: provisions »:

- Comp. German case law, OLG München 17 May 2006 (likely Comp. German case law, OLG München 17 May 2006 (likely danger that foreign tribunal will not apply the mandatory danger that foreign tribunal will not apply the mandatory provision; arbitration clause combined w/ choice of foreign provision; arbitration clause combined w/ choice of foreign law is presumption of likeliness). BGH 5 Sep 2012 (forum law is presumption of likeliness). BGH 5 Sep 2012 (forum clause in agency contract)clause in agency contract)

- Comp. English High Court in Comp. English High Court in AccentuateAccentuate (2009) (2009)

As within the EU, forum clauses cannot be set aside in eg As within the EU, forum clauses cannot be set aside in eg distribution contracts cases, a subsidiary forum clause distribution contracts cases, a subsidiary forum clause could help.could help.

Arbitration – who judges the validity ? Arbitration – who judges the validity ? Who judges the validity and scope of the arbitration agreement Who judges the validity and scope of the arbitration agreement

? ?

The nominated arbitrator has in principle jurisdiction over the The nominated arbitrator has in principle jurisdiction over the questions of: validity of the arbitration agreement, legal questions of: validity of the arbitration agreement, legal capacity to refer to arbitration, and arbitrability (‘provisional’ capacity to refer to arbitration, and arbitrability (‘provisional’ competence-competence - but subject to a possible annulment competence-competence - but subject to a possible annulment of the award by the court of the place of arbitration) of the award by the court of the place of arbitration)

Also jurisdiction over the interpretation of the arbitration Also jurisdiction over the interpretation of the arbitration agreement – whether the dispute or action is covered by the agreement – whether the dispute or action is covered by the arbitration agreement. Cfr. SCotUS 10th June 2013, arbitration agreement. Cfr. SCotUS 10th June 2013, Oxford v. Oxford v. SutterSutter «The arbitrator's construction holds, however good, bad, «The arbitrator's construction holds, however good, bad, or ugly». or ugly».

The otherwise competent* national court has also jurisdiction to The otherwise competent* national court has also jurisdiction to judge the validity of an arbitration agreement invoked by a judge the validity of an arbitration agreement invoked by a party to deny the jurisdiction of that courtparty to deny the jurisdiction of that court

The party contesting the validity has no obligation to The party contesting the validity has no obligation to participate in the proceedings (« Dallah »-principle, UKSC 2010)participate in the proceedings (« Dallah »-principle, UKSC 2010)

* (to this competence, Brussels-I does not apply)* (to this competence, Brussels-I does not apply)

Effects of a valid arbitration Effects of a valid arbitration agreementagreement

Effects of a (valid) arbitration agreement:Effects of a (valid) arbitration agreement:- arbitrators have jurisdiction over the dispute referred to - arbitrators have jurisdiction over the dispute referred to arbitrationarbitration- every other judge lacks jurisdiction. This has to be invoked - every other judge lacks jurisdiction. This has to be invoked « in limine litis » « in limine litis »

- within the substantive scope of the arbitration agreement, - within the substantive scope of the arbitration agreement, it’s up to a second arbitrator to judge whether an earlier it’s up to a second arbitrator to judge whether an earlier arbitral award has arbitral award has res iudicatares iudicata concerning the new claim (in concerning the new claim (in the US: the US: BelcoBelco-rule, 2d Cir 1996)-rule, 2d Cir 1996)- the court of the place of jurisdiction has certain powers in - the court of the place of jurisdiction has certain powers in relation to arbitration proceedings in that place (relation to arbitration proceedings in that place (infrainfra). The ). The law of that place may provide the possibility of an anti-suit law of that place may provide the possibility of an anti-suit injunction prohibiting the other party to pursue court injunction prohibiting the other party to pursue court proceedings instead of arbitration (eg UK SC 2013 in proceedings instead of arbitration (eg UK SC 2013 in Ust-Ust-KamenogorskKamenogorsk) (but not against proceedings before courts in ) (but not against proceedings before courts in the EU, ECJ in West Tankers) the EU, ECJ in West Tankers) - provisional measures: next slide- provisional measures: next slide

Effects of a valid arbitration Effects of a valid arbitration agreementagreement

Effects of a (valid) arbitration agreement (cont.)Effects of a (valid) arbitration agreement (cont.)

Courts may still take provisional and protective Courts may still take provisional and protective measures (summary proceedings)*,**measures (summary proceedings)*,**

Parties may still take protective measures (e.g. Parties may still take protective measures (e.g. conservatory seizure) –after permission of the state conservatory seizure) –after permission of the state judge where such permission is required*judge where such permission is required*

• * Insofar as there is no Emergency Arbitrator * Insofar as there is no Emergency Arbitrator appointed with this task (cfr. New ICC rules); appointed with this task (cfr. New ICC rules);

• ** Eg art. 44 UK Arbitration Act; In the new Belgian ** Eg art. 44 UK Arbitration Act; In the new Belgian Act, art. 1691 Jud.C.: concurrent jurisdiction Act, art. 1691 Jud.C.: concurrent jurisdiction arbitrator/courtsarbitrator/courts

Effects of a valid arbitration Effects of a valid arbitration agreementagreement

Effects of a (valid) arbitration agreement (cont.)Effects of a (valid) arbitration agreement (cont.)

Effects for successors ?Effects for successors ?- assignee will normally be bound (see Ch. - assignee will normally be bound (see Ch.

assignment)assignment)- administrator in bankruptcy in principle bound (eg - administrator in bankruptcy in principle bound (eg

Belgium), but not necessarily always (eg a case Belgium), but not necessarily always (eg a case under Polish law accepted by the Swiss SBG 31 under Polish law accepted by the Swiss SBG 31 March 2009)March 2009)

Arbitration agreement - Arbitration agreement - contentcontent

Possible content of an arbitration agreement:Possible content of an arbitration agreement:

Definition of the disputes covered by arbitration Definition of the disputes covered by arbitration -often restrictive interpretation of arbitration clauses:often restrictive interpretation of arbitration clauses:-Clarify whether arbitrator has authority to decide on Clarify whether arbitrator has authority to decide on costs to be borne by the losing partycosts to be borne by the losing party

Possible reference to the procedural rules of an Possible reference to the procedural rules of an Arbitration Institute:Arbitration Institute:(next slides)(next slides)

Arbitration institutionsArbitration institutionsPossible reference to procedural rules - (1) of an Arbitration Possible reference to procedural rules - (1) of an Arbitration Institute:Institute:-Specialised (sector specific) international arbitration Specialised (sector specific) international arbitration institutions (e.g. commodity arbitrations (eg by GAFTA, Grain institutions (e.g. commodity arbitrations (eg by GAFTA, Grain and Feed Trade Association), WIPO arbitration center (IP), and Feed Trade Association), WIPO arbitration center (IP), T.A.S. = C.A.S Lausanne for Sports; ARIAS (Insurance and T.A.S. = C.A.S Lausanne for Sports; ARIAS (Insurance and Reinsurance arbitration society UK)Reinsurance arbitration society UK)-General international arbitration institute: ICC has a Court of General international arbitration institute: ICC has a Court of Arbitration that supervises arbitral proceedings (intervenes in Arbitration that supervises arbitral proceedings (intervenes in nominations, payment of costs, control of formal validity of nominations, payment of costs, control of formal validity of award, respect for time schedule) award, respect for time schedule) -Common Court of OHADA at Abidjan is also a « Court of Common Court of OHADA at Abidjan is also a « Court of Arbitration » in the same sense as the ICCArbitration » in the same sense as the ICC-National arbitration institutions and similar: next slideNational arbitration institutions and similar: next slide-the PCA (Permanent Court of Arbitration) in The Hague (NL), the PCA (Permanent Court of Arbitration) in The Hague (NL), specialised in disputes of public international law (s. infra)specialised in disputes of public international law (s. infra)

Arbitration institutionsArbitration institutions- National arbitration institutions and similar, main institutions:National arbitration institutions and similar, main institutions: LCIA (London Court of international arbitration)(an English company)LCIA (London Court of international arbitration)(an English company) CIETAC (CIETAC (China international Economic and Trade Arbitration China international Economic and Trade Arbitration

Commission)Commission) Swiss Chambers’ Arbitration Institution (Swiss rules)Swiss Chambers’ Arbitration Institution (Swiss rules) SCC (Stockholm Chamber of Commerce)SCC (Stockholm Chamber of Commerce) Paris Arbitration RulesParis Arbitration Rules VIAC (Vienna International Arbitral Centre)VIAC (Vienna International Arbitral Centre) Cepina (Belgium)Cepina (Belgium) AAA (American Arbitration Association) and its International Centre for AAA (American Arbitration Association) and its International Centre for

Dispute Resolution (ICDR)Dispute Resolution (ICDR) DIAC (Dubai International Arbitration Centre)DIAC (Dubai International Arbitration Centre) DIS (German Institution of Arbitration) DIS (German Institution of Arbitration) KLRCA (Kuala Lumpur Regional Centre for Arbitration)KLRCA (Kuala Lumpur Regional Centre for Arbitration) MKAS (Moscow International Commercial Arbitration Court)MKAS (Moscow International Commercial Arbitration Court) SIAC (Singapore International Arbitration Centre)SIAC (Singapore International Arbitration Centre)

Arbitration agreement - Arbitration agreement - contentcontent

Possible reference to procedural rules (2)Possible reference to procedural rules (2)-In case of In case of ad hocad hoc arbitration, parties have to regulate these arbitration, parties have to regulate these matters themselves in the agreement (supplemented by default matters themselves in the agreement (supplemented by default rules of the arbitration statute) rules of the arbitration statute)

-Intermediate solution: arbitration according to the UNCITRAL Intermediate solution: arbitration according to the UNCITRAL Arbitration rules (version 1976 revised 2010): detailed rules, eg Arbitration rules (version 1976 revised 2010): detailed rules, eg also possibility of nominating also possibility of nominating ad hocad hoc an « appointing an « appointing authority ». Since 2010, the PCA (Permanent Court of authority ». Since 2010, the PCA (Permanent Court of Arbitration) is the indirect appointing authority by default, i.e. Arbitration) is the indirect appointing authority by default, i.e. will appoint the appointing authority if parties have not agreed will appoint the appointing authority if parties have not agreed upon one (art. 6 Uncitral)upon one (art. 6 Uncitral)-The PCA also has its own rules for cases where a state or The PCA also has its own rules for cases where a state or international organisation is involved (consolidated in the PCA international organisation is involved (consolidated in the PCA Arbitration rules 2012) (dealing more in detail also with issues Arbitration rules 2012) (dealing more in detail also with issues of international public law)of international public law)

Place of arbitrationPlace of arbitration

Determination of the place of arbitration (seat). Determination of the place of arbitration (seat). The seat is a legal notion: it links the arbitration procedure The seat is a legal notion: it links the arbitration procedure

to a specific country (but does not oblige the arbitrators to to a specific country (but does not oblige the arbitrators to conduct procedures there). conduct procedures there).

Relevance:Relevance:- determines which court is competent to supervise the - determines which court is competent to supervise the arbitration, to decide an action for annulment of the award, arbitration, to decide an action for annulment of the award, etc.etc.- determines the conflict of law rules indicating the law - determines the conflict of law rules indicating the law applicable to the arbitration; applicable to the arbitration; - provides the default procedural rules (infra); but arbitrator - provides the default procedural rules (infra); but arbitrator not bound if not imperative;not bound if not imperative;- localises the arbitral award (this will eg determine whether - localises the arbitral award (this will eg determine whether it is localised in a country that has ratified a Treaty on it is localised in a country that has ratified a Treaty on recognition and enforcement of arbitral awards).recognition and enforcement of arbitral awards).

Arbitration agreement – Arbitration agreement – contentcontent

Determination of the number of arbitrators (in Determination of the number of arbitrators (in many countries must be uneven) many countries must be uneven)

Possibly rules on challenging impartiality (unless Possibly rules on challenging impartiality (unless left to the court), eg in the ICC rules within 30 left to the court), eg in the ICC rules within 30 days since obtaining the informationdays since obtaining the information

Choice of the language(s) of the procedure Choice of the language(s) of the procedure (language of the submissions; may be relevant (language of the submissions; may be relevant also for evidence) also for evidence)

Choice of the law applicable to the arbitration Choice of the law applicable to the arbitration agreement (supra)agreement (supra)

(NB. Choice of the substantive law to be applied (NB. Choice of the substantive law to be applied to the dispute, but this is strictly speaking not to the dispute, but this is strictly speaking not part of the arbitration agreement itself)part of the arbitration agreement itself)

Arbitration – conduct of Arbitration – conduct of proceedingsproceedings

Appointment of the arbitratorsAppointment of the arbitrators If 3 arbitrators, usually one nominated by each party, the 3rd If 3 arbitrators, usually one nominated by each party, the 3rd

(« umpire ») is either nominated by both of them together or by (« umpire ») is either nominated by both of them together or by the arbitration institutethe arbitration institute

Multi-party arbitration: Uncitral has specific rules on Multi-party arbitration: Uncitral has specific rules on appointment (also some national statutes do and some rules of appointment (also some national statutes do and some rules of arbitration institutions); also specific rules in the LCIA Rules;arbitration institutions); also specific rules in the LCIA Rules;

Acceptance by the arbitrator(s): requires independence and Acceptance by the arbitrator(s): requires independence and impartiality; duty to disclose possible conflicts of interests*. impartiality; duty to disclose possible conflicts of interests*. Possible « challenge » of an arbitrator.Possible « challenge » of an arbitrator.

* Art. 1686 Belgian Jud.C; esp. in case of « repeat arbitration: * Art. 1686 Belgian Jud.C; esp. in case of « repeat arbitration: Cass.Fr. 20 Oct. 2010 Cass.Fr. 20 Oct. 2010 X v. Prodim & LogidisX v. Prodim & Logidis

* * SeeSee IBA Guidelines on Conflict of Interest in Internat. Arbitration IBA Guidelines on Conflict of Interest in Internat. Arbitration (revised 2014)(revised 2014)

Agreement on fees & expensens arbitrators (in case of Agreement on fees & expensens arbitrators (in case of institutional arbitration: under supervision of the Institution)institutional arbitration: under supervision of the Institution)

Arbitration – conduct of Arbitration – conduct of proceedingsproceedings

Possible arrangements at the start of proceedings, often in Possible arrangements at the start of proceedings, often in « terms of reference »:« terms of reference »:

- definition of the dispute and the claims of the parties (esp. - definition of the dispute and the claims of the parties (esp. a « Statement of claim »)a « Statement of claim »)

- establishment of a timetable / calendar - establishment of a timetable / calendar - possible appointment of an administrative secretary (see - possible appointment of an administrative secretary (see

ICC note 1995/2012)ICC note 1995/2012)- manner in which parties will present their arguments, - manner in which parties will present their arguments,

disclose documents, present evidence*, etc.disclose documents, present evidence*, etc.* As to taking evidence, parties could refer to the IBA-Rules on * As to taking evidence, parties could refer to the IBA-Rules on taking evidence (1999, revised 2010) (compromise between taking evidence (1999, revised 2010) (compromise between continental and American traditions)continental and American traditions)

If not already in the terms of reference, possible « case If not already in the terms of reference, possible « case management conference » (required in new ICC rules)management conference » (required in new ICC rules)

Arbitration Arbitration – procedural rules– procedural rules

Procedural rules (incl. rules on supervision by state court) Procedural rules (incl. rules on supervision by state court)

Law applicable to the procedure ? (also called Law applicable to the procedure ? (also called lex curiaelex curiae))- Law indicated by the conflict rule of the place of arbitration; Law indicated by the conflict rule of the place of arbitration;

conflict rule usually refers to the conflict rule usually refers to the lex forilex fori, i.e. rules of the place , i.e. rules of the place of arbitration. Arbitrator may deviate if not mandatory. of arbitration. Arbitrator may deviate if not mandatory.

- Some countries have separate procedural rules for Some countries have separate procedural rules for international arbitration or refer to such rules, eg when the international arbitration or refer to such rules, eg when the ECICA is ratified (European Convention on International ECICA is ratified (European Convention on International Commercial Arbitration 1961, 31 ratifications incl. 11 EU Commercial Arbitration 1961, 31 ratifications incl. 11 EU member states, paneuropean)member states, paneuropean)

- Some Institutions have in their rules also detailed guidelines Some Institutions have in their rules also detailed guidelines on the conduct of the parties’ representatives (e.g. LCIA rules on the conduct of the parties’ representatives (e.g. LCIA rules 2014)2014)

Arbitration Arbitration – procedural rules– procedural rules

Procedural rules determine:Procedural rules determine: the basic rules for the proceedings (classical rules such as the basic rules for the proceedings (classical rules such as

adversary character, possibility to decide in absentia (by adversary character, possibility to decide in absentia (by default), whether partial awards possible, whether default), whether partial awards possible, whether dissenting opinions may be made public, duty to motivate dissenting opinions may be made public, duty to motivate award, notification of the award, ...) award, notification of the award, ...)

the rules on taking evidence and on valuation of proof. If the rules on taking evidence and on valuation of proof. If expert examination is required, the ICC Rules for Experts expert examination is required, the ICC Rules for Experts may help (deal with proposal of experts by ICC, may help (deal with proposal of experts by ICC, appointment rules, administration rules)appointment rules, administration rules)

in which cases the state court can help / intervenein which cases the state court can help / interveneE.g. parties can ask a court order where the arbitrator has E.g. parties can ask a court order where the arbitrator has no authority, eg for an no authority, eg for an Actio ad exhibendum Actio ad exhibendum (order to (order to produce documents)produce documents)E.g. replacement of arbitrator(s)E.g. replacement of arbitrator(s)

Arbitration Arbitration – the award– the award

In case of institutional arbitration, Institution may have the In case of institutional arbitration, Institution may have the power to check the award as to its form (scrutiny), not power to check the award as to its form (scrutiny), not substance (eg ICC rules art. 27)substance (eg ICC rules art. 27)

Some countries require the award to be filed (deposited) in Some countries require the award to be filed (deposited) in courtcourt

Challenging the arbitral Challenging the arbitral awardaward

In principle no appeal (unless agreed); some arbitration rules In principle no appeal (unless agreed); some arbitration rules provide an optional appellate procedure (eg new AAA rules)provide an optional appellate procedure (eg new AAA rules)

Challenging in court – action for annulment according to the Challenging in court – action for annulment according to the rules of the place of arbitration (seat)rules of the place of arbitration (seat)

In most countries only limited grounds for annulment: no valid In most countries only limited grounds for annulment: no valid arbitration agreement, no fair trial (incl. arbitrator not arbitration agreement, no fair trial (incl. arbitrator not independent*), award independent*), award ultra petitaultra petita (for Belgium, see art. 1717 § (for Belgium, see art. 1717 § 3 Jud.C (version 2013); for the UK S. 67 Arbitration Act, etc.)3 Jud.C (version 2013); for the UK S. 67 Arbitration Act, etc.)

* Eg Cassation (Fr) 20 Oct. 2010, * Eg Cassation (Fr) 20 Oct. 2010, Somoclest v. DV constructionSomoclest v. DV construction.. However, where the arbitration rules themselves contain a However, where the arbitration rules themselves contain a

procedure to challenge impartiality, that must be followed first: procedure to challenge impartiality, that must be followed first: Cass.F. 25 June 2014 in Cass.F. 25 June 2014 in Avax/Tecnimont Avax/Tecnimont

In some countries annulment can be excluded contractually if In some countries annulment can be excluded contractually if none of the parties is domestic (CH, B, Sweden) (rare in none of the parties is domestic (CH, B, Sweden) (rare in practice)practice)

Effect of setting aside: same arbitrators, new arbitrators, state Effect of setting aside: same arbitrators, new arbitrators, state court ?court ?

Arbitration – enforcementArbitration – enforcement

Enforcement in the country of the award: Enforcement in the country of the award: exequaturexequatur can be can be obtained in simplified proceedings:obtained in simplified proceedings:

- on unilateral request (without notice procedure)- on unilateral request (without notice procedure)- merely a « marginal control » of the substance- merely a « marginal control » of the substanceE.g. S. 66 Arbitration Act (Engl & W)E.g. S. 66 Arbitration Act (Engl & W)

Third party involvement can simplify enforcement (third Third party involvement can simplify enforcement (third party holding the money in dispute)party holding the money in dispute)

Arbitration - enforcementArbitration - enforcement

Arbitration – enforcement Arbitration – enforcement abroadabroad

Enforcement on the basis of the NY Convention 1958 in member Enforcement on the basis of the NY Convention 1958 in member states of that Convention (153 in 2014) states of that Convention (153 in 2014)

Sphere of application: territorial or non-domestic test in art. 1Sphere of application: territorial or non-domestic test in art. 1 Eg Chinese Cupreme Court 18 Dec 2013 refused Korea arbitral Eg Chinese Cupreme Court 18 Dec 2013 refused Korea arbitral

award between 2 Chinese companies related to a joint venture in award between 2 Chinese companies related to a joint venture in ChinaChina

Simplified proceedings (Simplified proceedings (exequatur exequatur of the state of the place of of the state of the place of arbitration is not required, only in state of enforcement) arbitration is not required, only in state of enforcement)

National law determines whether appeal is possible against de National law determines whether appeal is possible against de decision on exequatur, and if appeal suspends enforceability or not. decision on exequatur, and if appeal suspends enforceability or not.

NB. Cases on NY Convention published in NB. Cases on NY Convention published in Yearbooks Commercial Yearbooks Commercial ArbitrationArbitration..

Arbitration enforcement Arbitration enforcement abroadabroad

NY ConventionNY Convention Art. 5 - only limited grounds for refusal (exceptions), esp.:Art. 5 - only limited grounds for refusal (exceptions), esp.:- (1a) Lack of capacity of a party (1a) Lack of capacity of a party - (1a) Invalidity of the arbitration agreement according to the (1a) Invalidity of the arbitration agreement according to the

lex contractuslex contractus))- (1c) Jurisdiction exceeded ((1c) Jurisdiction exceeded (ultra petitaultra petita))- (2a) Arbitrability of the dispute is excluded by the (2a) Arbitrability of the dispute is excluded by the lex lex

contractuscontractus, the , the lex forilex fori of the place of arbitration or the of the place of arbitration or the lex lex forifori of the place of enforcement of the place of enforcement

- (2b) Contrary to public policy of receiving country(2b) Contrary to public policy of receiving country

Esp. the public policy exception is widely used by some Esp. the public policy exception is widely used by some countries, eg Russia – practice statements of the Supreme countries, eg Russia – practice statements of the Supreme Arbitrazh Court (new version 2013, Information Letter no. Arbitrazh Court (new version 2013, Information Letter no. 156)156)

The ILA issued a recommendation to restrict the public policy The ILA issued a recommendation to restrict the public policy exception (ILA recommendation on public policy 2002)exception (ILA recommendation on public policy 2002)

Arbitration – enforcement Arbitration – enforcement abroadabroad

Enforcement in other countries (than the place of Enforcement in other countries (than the place of arbitration) –arbitration) –Enforcement can also take place on the basis of :Enforcement can also take place on the basis of :

- ECICA, ECICA, - other multilateral conventions, other multilateral conventions, - bilateral conventions, bilateral conventions, - possibly national law possibly national law

Enforcement despite annulment in the country of the seat ?Enforcement despite annulment in the country of the seat ?Exceptionally accepted by English Court in Exceptionally accepted by English Court in Yukos / RosneftYukos / Rosneft

(2014)(2014)