YAR - Young Arbitration Review - Edition 10

1 • YAR • JULY 10, 2013

©2011. YAR - Young Arbitration Review • All rights reserved.

[PREFACE - SOME LIKE IT HOT…] by José Miguel Júdice • [INVESTMENTS AND QUANTUM METHODOLOGY IN THE LINE OF FIRE – LESSONS FROM ROMPETROL GROUP NV VS ROMANIA] by Robert Rothkopf • [NEIGHBOURS FRIENDLY PACT ON DISPUTE RESOLUTION] by Veeraraghavan Inbavijayan and Kirthi Jayakumar • [THE AFTERMATH OF THE REVOLUTION: AN ASSESSMENT OF THE COMPATIBILITY OF THE TUNISIAN LAW FOR INTERNATIONAL ARBITRATION WITH GENERAL CONTEMPORARY PRACTICE IN INTERNATIONAL COMMERCIAL ARBITRATION] by Henry Clarke • [MOTIVATION OF ARBITRAL AWARDS: A FEW NOTES] by Duarte Gorjão Henriques • [“28 USC § 1782”: AN AMERICAN “WINGMAN” FOR INTERNATIONAL ARBITRATION DISPUTES] by André Pereira da Fonseca • [THE 2010 REVISION OF THE ARBITRATION RULES OF THE CHAMBER OF ARBITRATION OF MILAN] by Chiara Catti • [THE LONG AWAITED PORTUGUESE MEDIATION LAW – FUNDAMENTAL PRINCIPLES] by Thomas Gaultier • [YAR BRINGS ICC YAF TO PORTUGAL FOR THE FIRST TIME] by Pedro Sousa Uva and Gonçalo Malheiro • [INTERIM RELIEF IN INTERNATIONAL ARBITRATION: EMERGENCY ARBITRATOR PROVISIONS] by Steven P. Finizio and Jeremy Bocock • [CONCURRENT POWERS BETWEEN ARBITRAL TRIBUNALS AND STATE COURTS REGARDING INTERIM MEASURES] Sofia Martins and Miguel Oliveira Martins • [ARBITRAL TRIBUNALS AND STATE COURTS: PARTNERS OR COMPETITORS?- SOME REMARKS ON PRELIMINARY ORDER FROM A PORTUGUESE LAW PERSPECTIVE] by Porfírio Moreira • [LEARNING TO DEAL WITH DIFFERENT LEGAL SYSTEMS. TAKING OF EVIDENCE IN INTERNATIONAL COMMERCIAL ARBITRATION] by Luis Fernando Guerrero • [STATE COURT’ ASSISTANCE OF ARBITRAL AWARDS ON THE TAKING OF EVIDENCE UNDER THE PORTUGUESE ARBITRATION LAW] by Pedro Sousa Uva • [GETTING TO KNOW ABEARB A BIT BETTER…] By Associação Brasileira de Estudantes de Arbitragem.

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2 • YAR • JULY 10, 2013



EDITION 10 • JULY 2013

DIRECTORSPedro Sousa Uva Gonçalo Malheiro

PREFACEJosé Miguel Júdice

AUTHORS Robert Rothkopf

Veeraraghavan InbavijayanKirthi Jayakumar

Henry ClarkeDuarte Gorjão HenriquesAndré Pereira da Fonseca

Chiara CattiThomas GaultierPedro Sousa UvaGonçalo MalheiroSteven P. FinizioJeremy BocockSofia Martins

Miguel Oliveira MartinsPorfírio Moreira

Luis Fernando GuerreroAssociação Brasileira de Estudantes de Arbitragem

EDITING Rita Pereira

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To subscribe to YAR – Young Arbitration Review, please contact [email protected]

Annual subscription: € 200 ©2011. YAR - Young Arbitration Review • All rights reserved.

3 • YAR • JULY 10, 2013


PREFACE - SOME LIKE IT HOT…by José Miguel Júdice

1 - INVESTMENTS AND QUANTUM METHODOLOGY IN THE LINE OF FIRE – LESSONS FROM ROMPETROL GROUP NV VS ROMANIA

by Robert Rothkopf

2 - NEIGHBOURS FRIENDLY PACT ON DISPUTE RESOLUTIONby Veeraraghavan Inbavijayan and Kirthi Jayakumar

3 - THE AFTERMATH OF THE REVOLUTION: AN ASSESSMENT OF THE COMPATIBILITY OF THE TUNISIAN LAW FOR INTERNATIONAL

ARBITRATION WITH GENERAL CONTEMPORARY PRACTICE IN INTERNATIONAL COMMERCIAL ARBITRATION

by Henry Clarke

4 - MOTIVATION OF ARBITRAL AWARDS: A FEW NOTES by Duarte Gorjão Henriques

5 - 28 USC § 1782 – AN AMERICAN “WINGMAN” FOR INTERNATIONAL ARBITRATION DISPUTES

by André Pereira da Fonseca

6 - THE 2010 REVISION OF THE ARBITRATION RULES OF THE CHAMBER OF ARBITRATION OF MILAN

by Chiara Catti

7 - THE LONG AWAITED PORTUGUESE MEDIATION LAW - FUNDAMENTAL PRINCIPLES

by Thomas Gaultier

[ARTICLES]

4 • YAR • JULY 10, 2013


REPORT ON ICC YAF & YAR EVENT IN LISBON – MAY 16 2013

8 - YAR BRINGS ICC YAF TO PORTUGAL FOR THE FIRST TIMEby Pedro Sousa Uva and Gonçalo Malheiro

9 - INTERIM RELIEF IN INTERNATIONAL ARBITRATION: EMERGENCY ARBITRATOR PROVISIONS

by Steven P. Finizio and Jeremy Bocock

10 - CONCURRENT POWERS BETWEEN ARBITRAL TRIBUNALS AND STATE COURTS REGARDING INTERIM MEASURES

by Sofia Martins and Miguel Oliveira Martins

11 - ARBITRAL TRIBUNALS AND STATE COURTS: PARTNERS OR COMPETITORS?- SOME REMARKS ON PRELIMINARY ORDER

FROM A PORTUGUESE LAW PERSPECTIVEby Porfírio Moreira

12 - LEARNING TO DEAL WITH DIFFERENT LEGAL SYSTEMS. TAKING OF EVIDENCE IN INTERNATIONAL COMMERCIAL ARBITRATION

by Luis Fernando Guerrero

13 - STATE COURT’ ASSISTANCE OF ARBITRAL AWARDS ON THE TAKING OF EVIDENCE UNDER THE PORTUGUESE ARBITRATION LAW

by Pedro Sousa Uva

14 - GETTING TO KNOW ABEARB A BIT BETTER…By Associação Brasileira de Estudantes de Arbitragem

[ARTICLES]

5 • YAR • JULY 10, 2013


[PREFACE]

Arbitral Tribunals are different animals as compared with

Judicial Courts. This does not intend to mean that Tribunals

are more qualified technically, specialized, efficient, fact specific,

pragmatic, open minded and business oriented, let alone less

prone to formal decision that don’t bring peace to the parties

conflict once and for all. This is often true, albeit the experience

of judges, their independence and impartiality, the honesty, of

the very large majority, create at least in Portugal a high pattern

that arbitrators should use for inspiration.

The point here is clearly another and is actually related

to counsel behavior in front of Judges or Arbitrators. As a rule

of thumb, if counsel thinks that Judges and Arbitrators (at least

in the international arena) are the same species of professionals

with similar or equivalent reactions, probably they are missing

the point and making mistakes that might jeopardize or

complicate even a strong case.

A Judge is a professional that begins his/her career very

young, quite often without any experience of different ways of

practicing law, insulated from lawyers, and they don’t want to

face appeal court decisions that would be avoided if they accepted

all the lawyers behavior albeit time consuming, irrelevant or

confrontational. They are normally prepared to accept waste of

time, tricks and fight on peripheral aspects of the case as for them

this is lawyers’ way and when made in a sophisticated mood

even brings good moments to enjoy and remember, as if it was

theatre and therefore the show requested acting. They have a

fixed salary and see no advantage to an entrepreneurial approach

to decisions and are proud of it. When faced with an imbalance

of quality and preparation between each side of the bench they

instinctively protect the weaker party and tend to disregard good

advocacy as a litmus test for each party’s case.

Arbitrators have diversified past experiences, quite often

SOME LIKE IT HOT...By José Miguel Júdice

6 • YAR • JULY 10, 2013


work or have worked as advocates, are business oriented,

are horrified with waste of time, have an agenda full of

commitments, are neither paid by fixed salary (as judges) nor

by the hour (as lawyers). They have a vested interest in being

efficient, prefer to solve the case once and for all, and are not

willing to find a formal way out that provides for an award but

keeps the conflict alive and unsolved. And they are older and

quite often with an ego big enough to be unprepared to accept

confrontation, without sound reasons, with younger lawyers.

They know by heart the usual counsel’s tricks, are

familiar with dilatory maneuvers, expect that well remunerated

professionals will be very well prepared and don’t consider his/

her duty to protect the possible weaker party or the one that has

been crazy enough not to appoint qualified and experimented

lawyers. They are trained to separate what is really nuclear for

the decisions from the paraphernalia of details and peripheral

issues, that clients press counsel to consider, that have been

from a personal point of view outrageous but have almost

nothing to do with what is at stake.

However, counsels in arbitration - as men, so the novel

says - come from Mars. The cursus honorum as a rule begins

with litigation in national courts, where the name of the game

is fighting, protesting, objecting, wasting time, defending the

indefensible, pressing the judges, appealing against his/her

decisions until they manage to have the judge paralyzed and

prepared to accept anything that the lawyers pretends, working

for the gallery or for the pleasure of the unprepared client. As

if this was not enough, Judges know that they risk having their

decisions annulled by appeal courts, and therefore take all the

care to avoid any small mistake that will bring a black ball to

his/her career.

When these lawyers come to the arbitration arena, they

tend to think of arbitrators the same that they use to think

of judges, forgetting all the differences mentioned above, let

alone the fact that arbitral awards are not appealable and

setting aside is almost impossible unless due process has not

been respected. And quite often these lawyers begin making

the usual mistakes, jeopardizing the case, creating bad will,

confusing the arbitrators about strong points they could have

evidenced for the case by mixing them with irrelevant ones,

and letting the other side to make all the possible points by

being just tough, professional and focused, and not histrionic,

aggressive and plainly out of touch.

Yes, some like it hot. And normally Clients love it, as they

look to lawyers as gladiators or mercenaries (well) paid to fight

and are not prepared to understand restraint, coolness, efficiency.

Client enjoy the smell of blood when confronted and lawyers

are normally more than happy to deliver. If in the end it turns

wrong, the judge was, inevitably, incompetent (but arbitrators

have been in a way or another nominated by lawyers…).

So, my good Colleagues, do as you like it. Have it hot.

Work for the audience. Provide fresh blood and adrenaline to

your Client. And you may finally receive what you deserve…

José Miguel Júdice1

Lisbon, June 2013

1- Founding Partner and Head of Arbitration (PLMJ, Lisbon), Visiting Associate Professor of Universidade Nova (Lisbon),

international arbitrator, member of ICC International Court of Arbitration, of the ICSID Roster of Arbitrators, Board of Directors

of Club Español de Arbitraje and Associação Portuguesa de Arbitragem.

7 • YAR • JULY 10, 2013


INVESTMENTS AND QUANTUM METHODOLOGY IN THE LINE OF FIRE

– LESSONS FROM ROMPETROL GROUP NV VS ROMANIA

By Robert Rothkopf

The recent Rompetrol Group NV v Romania

award provides important lessons for investors

as to (1) when State conduct against individual

company officers rather than the claimant investor itself might

constitute a breach of investment treaty protections; and (2)

how only partial success on liability might collaterally damage

proof of quantum if an “all or nothing” methodology is used.

Rompetrol claimed, inter alia, that the arrest, detention,

criminal investigations and wire-tapping of its directors

constituted State-sponsored harassment that breached BIT

guarantees enjoyed by its investment. The Tribunal held that

the State conduct directed against the company officers had to

have a sufficiently close link to the investment or investor to

fall within the zone of the treaty’s protection. The requisite

connection was found in relation to certain elements of

Romania’s conduct which amounted to a “pattern of disregard”

for the rights of Rompetrol’s employees and constituted a

breach of Rompetrol’s right to fair and equitable treatment. The

partial success on liability ultimately unravelled Rompetrol’s

submissions on economic damages, given that the quantum

methodology relied on the assumption that all of the acts

comprising Romania’s criminal investigations were breaches of

the investment treaty.

The award raises interesting questions regarding the

balance between a State’s legitimate interests in tackling crime

and the investor’s treaty rights, noting future tribunals’ likely

sensitivity to allegations that the arbitration itself is being

brought to deter a State from legitimate pursuit of criminal

investigations. It also serves as a reminder of the strategic

considerations that investors face in selecting a suitable

methodology for quantum of damages.

Background

Rompetrol claimed that Romania had breached its

obligations under Article 3(1) and 3(5) of the Agreement on

Encouragement and Reciprocal Protection of Investments

between the Kingdom of The Netherlands and Romania

(the “BIT”) to provide its investment in Rompetrol Rafinare

SA (“RRC”) fair and equitable treatment, full protection and

8 • YAR • JULY 10, 2013


security and non-impairment. The claims arose from measures

taken by Romanian anti-corruption and criminal prosecution

authorities against two individuals, Mr Patriciu and Mr

Stephenson, who directed the affairs of RRC, a company born

through the privatisation of the State oil-refining industry

after the fall of Ceausescu in 1989. Rompetrol alleged that

the investigations, which included the arrest, detention, travel-

ban and wire-tapping of Mr Patriciu, were politically and

commercially motivated and breached the guarantees in the

BIT. Romania’s response was that the investigations were a

legitimate part of its implementation of the National Anti-

Corruption Strategy that it had pursued in order to gain access

to the European Union.

A link between State conduct against individuals and the investor is required

The Tribunal emphasised the “special character” of

this case given that the claims arose from measures directed

against individuals linked to the investor rather than against

the investor itself, noting that these cases were rare amongst

reported awards. The individuals were not claimants under

the BIT and their rights were personal and distinct from those

of Rompetrol. As such, even if the alleged State-sponsored

harassment of the individuals through an unlawful criminal

investigation had breached the individuals’ personal rights,

Rompetrol had to show that there was a connection between

the State’s conduct against the individuals and State conduct

against the investment itself in order for that conduct to qualify

as a violation of the BIT protections. Rompetrol’s case would

“[stand or fall] by whether it is able to make out its claim

that the criminal investigations have breached the rights of

[Rompetrol] itself” [para 151].

The Tribunal concluded that three kinds of actions could

fall within the area of protection under the BIT: “(a) actions

against the investor itself (or its investment); (b) action against

the investor’s executives for their activity on behalf of the

investor; and (c) action against the executives personally but

with the intent to harm the investor” [para 200].

No co-ordinated campaign of harassment

The Tribunal recognised that its role was not “to

pronounce on the rightness or wrongness of the pending

criminal charges…” [para 174] but to determine whether the

authorities’ conduct constituted a breach of the BIT guarantees.

In so doing, the Tribunal examined whether the requisite link

to the investment was present. The Tribunal did find that there

had been “animus and hostility” towards Mr Patriciu on behalf

of the prosecutorial officials and that this may have affected the

authorities’ tactical approach [para 245 and 248]. As regards the

detention and attempted imprisonment, the Tribunal accepted

that there had been procedural irregularities but that it could

not find “anything wrongful” in the prosecutor’s execution of

its rights to apply for pre-trial detention [para 251].

In perhaps the clearest example of conduct that lacked

sufficient connection to the investment, the Tribunal found

that whilst the wire-tapping by the Romanian Intelligence

Service had been devoid of the necessary threat to national

security and that Mr Patriciu’s personal rights of privacy had

been affected, there had been no harm to his business activities

[para 260 – 261]. Overall there had been no co-ordinated

campaign of harassment [para 276].

A legitimate expectation during criminal proceedings

Nevertheless, the Tribunal recognised that “a State may

incur international responsibility for breaching its obligations

under an investment treaty to accord fair and equitable treatment

to a protected investor by a pattern of wrongful conduct during

the course of a criminal investigation or prosecution, even

where the investigation and prosecution are not themselves

wrongful.” It asserted further provisos: (1) the pattern must

be sufficiently serious and persistent that the interests of the

investor must be affected; and (2) there must be a failure by

the State to pay adequate regard to how those interests ought

to be duly protected. In the Tribunal’s view, the legitimate

expectations of a protected investor include the expectation

that the State authorities will seek means to avoid unnecessary

damage or at least to minimise or mitigate the adverse effects

on the investment if the investor’s interests become entangled

in the criminal process directly or indirectly [para 278].

It was on this point that Rompetrol obtained partial

success. The Tribunal found that there had been a “pattern

of disregard by the [prosecutorial and investigation agencies]

for the procedural rights of [Rompetrol’s] executives, and in

particular for the likely and foreseeable effects on the interests

of [Rompetrol] itself as a protected foreign investor”, as

demonstrated by, inter alia, the procedural irregularities during

the criminal investigation, the conduct of the prosecutors, and

the arrest and attempted imprisonment of the executives.

A crucial element in establishing the State’s failure to

pay adequate regard to the investment was the documentary

evidence showing that “from a certain point at least in the

lengthy saga of the criminal investigations, the [prosecution

and investigation authorities] knew that the interests of

[Rompetrol] as such stood directly or indirectly in the line

of fire”. [para 279] Indeed the prosecution’s request for

Mr Patriciu’s detention referred directly to the investment

arbitration and “the Dutch investor” i.e. Rompetrol.

Damages: Rejection of the ‘event study’ method

The Tribunal found that Romania had breached Article

3(1) of the BIT to a limited extent by virtue of only some of the

authorities’ conduct such as the “procedural irregularities during

the criminal investigations” and “the arrest and attempted

imprisonment of Mr Patriciu and Mr Stephenson”, dismissing

the remainder of Rompetrol’s claims [para 279 - 280]. This

determination, whilst positive for Rompetrol, proved to have

serious consequences for its submissions on damages which

relied wholly on the ‘event study’ method predicated upon

the Tribunal finding in favour of all of Rompetrol’s claims of

maltreatment.

9 • YAR • JULY 10, 2013


Rompetrol submitted that its damages comprised injury

to its reputation which had a deleterious effect on its existing

and future business, and caused actual loss of property rights.

Rompetrol argued that this damage was expressed through

legal expenses in defending against wrongful acts of the State

authorities, increased financing costs and loss of opportunity.

It sought to quantify these damages through the ‘event study’

method.

The “event study” method employed by Rompetrol is a

technique that seeks to measure price movements in publicly

traded shares and to attribute those movements to specific

events as they become known to the market, isolating such

price movements from the background fluctuations that would

be expected in the relevant market in the ordinary course.

Rompetrol argued that the market’s knowledge of each

successive wrongful action taken against Rompetrol’s directors

by Romania on 12 out of 32 “event days” negatively affected

the value of the shares of RRC listed on the Bucharest Stock

Exchange. Romania’s experts criticised this method on the basis

that only a minority of RRC shares were publicly traded, and so

could not be a reliable proxy for the majority controlling stake

held by Rompetrol. Among other things, Romania’s experts

criticised the exclusion of positive events such as the buy-out

by KazMunaiGaz in 2007 which triggered a large increase in

share price. Rompetrol’s model also failed to accommodate the

natural recovery in share price that is observed when a feared

event does not in fact transpire.

However, the central defect in Rompetrol’s quantum

methodology was to treat all of the acts by the Romanian

authorities in relation to the criminal investigations as breaches

of the BIT, whereas the Tribunal had found that only some of

these State interventions constituted BIT breaches. As noted by

the Tribunal, “this all-or-nothing approach ends up leaving the

analysis somewhat stranded” because a finding of partial illegality

requires the experiment to be reconfigured and re-run [para 286].

The Tribunal commented that the application of the

event study method to cases such as this was “fundamentally

misconceived” given that the alleged State misconduct was

extensive and took place over a number of years. The method

would be more appropriate in cases where an expropriation

or introduction of a specific regulatory measure by the host

State might result in a demonstrable proximate reaction by the

market. Furthermore, the method was not apt to distinguish

between the market effects of a legitimate investigation of a

company by State authorities and any supposed incremental

effects from an illegal investigation. [para 286]

Rompetrol made an alternative claim for moral damages to

“cover non-pecuniary injury for which monetary value cannot be

mathematically assessed…”, referring to the only two ICSID cases

in which such damages have been awarded. Whilst the Tribunal

accepted that the award of moral damages was permitted under

general international law, such damages would express themselves

here in the form of increased financing and transaction costs that

were simply examples of actual economic loss or damages and

subject to the usual burden of proof. [para 289]

As Rompetrol had only put forward a single quantum

method for its economic losses which the Tribunal rejected

entirely, no compensation was awarded. Rompetrol tried to

put forward alternative quantum evidence with its post-hearing

brief without prejudice to its initial quantification model but this

was without leave of the Tribunal and held to be inadmissible.

Conclusion

This award is a salutary tale to would-be claimants

considering how to prove damages and useful guidance as to

when the ‘event study’ method might be suitable in investment

treaty arbitration. Whilst some claimants may be concerned

that offering a tribunal alternative quantum methods might

undermine the strength of their primary position and thereby

encourage a more ambivalent result, this case highlights the

risk of submitting only a single “all or nothing” model. It may

be more appropriate to structure quantum calculations in a way

that equips the tribunal with the elements needed to award

damages that correlate with their findings on the merits.

Finally, this award provides useful guidance on the

treatment of a company’s officers that will likely be influential

in other treaty cases. As noted by the Tribunal, “association

with the management of a foreign investor or a foreign

investment cannot serve to immunize individuals from the

normal operation of the criminal law” [para 152]. However,

in situations where political and commercial motives may be at

play, investors would be wise to ensure that the State authorities

are on notice that their protected investments are in the line of

fire and that they owe a duty to mitigate the adverse effects

that might result from their enforcement activities.

Robert Rothkopf

1. ICSID Case No. ARB/06/3 dated 6 May 2013.2. SARL Benvenuti & Bonfant v People’s Republic of Congo, ICSID Case No. ARB/77/2, Award, 8 August 1980, and Desert Line Projects LLC v Republic of Yemen, ICSID Case

No. ARB/05/17, Award, 6 February 2008.

10 • YAR • JULY 10, 2013


NEIGHBOURS FRIENDLY PACT ON DISPUTE RESOLUTION

By Veeraraghavan Inbavijayan and Kirthi Jayakumar

Introduction

That India and Pakistan have a shared history

that goes beyond to a time that dates earlier than the partition

in 1947, is a given. Whether it is in the unsolved riddle of

sovereignty over Kashmir, or the question of who owns Sia

Chen, the glacier, or if it is a question of terrorism and concerns

of cross-border militancy, there have been plenty of issues that

have sparked debates and rhetorical questions on both sides.

And yet, there is a glimmer of hope when the two nations decide

not to let another question fester and snowball into a debate.

The Indus Valley was the genesis of civilization in the

region for as long as humanity can possibly remember, or even

date back. The fount of the region’s first tryst with development

soon became a breeding ground for multiple cultures. World

over, many countries were attracted to the Indus Valley

Civilization – whether in trade, or in conquest. From Porus to

Alexander the Great, from the Persians to the Mughals, from

the Dutch and Portuguese to the British – everyone wanted a

piece of India as it then was.

With the advent of British rule, the country remained

actively seized in its struggle for independence. India as

a country remained steadfast in its pursuit of justice by

demanding independence from a colonial leader that had been

too imperialistic to afford the nation its rights. At the stroke of

midnight, while independence was won, two children countries

were born from the original. These countries will remain

engaged and steadfast in their differences for years to come –

though hopeful remnants of peace and brotherhood would rear

their heads in the form of solidarity through cricket matches

and cinema, and through a motivated decision to arbitrate

differences.

Of this repertoire is the Kishenganga Project, and the

difference of opinion that arose from it.

The dispute

The Indus Waters Treaty is an international agreement

signed by India and Pakistan in 1960 that regulates the use

by the two States of the waters of the Indus system of rivers.

Pakistan instituted arbitral proceedings against India in

2010, requesting that a court of arbitration determine the

permissibility under the Treaty of a hydro-electric project (the

Kishenganga Hydro-Electric Project, or KHEP) currently under

construction by India on the Kishenganga/Neelum River, a

tributary of the Jhelum River. The KHEP is designed to generate

power by diverting water from a dam site on the Kishenganga/

11 • YAR • JULY 10, 2013


Neelum (within the Gurez valley, an area of higher elevation)

to the Bonar Nallah, another tributary of the Jhelum (lower in

elevation and closely located to Wular Lake) through a system

of tunnels, with the water powering turbines having a capacity

of 330 megawatts.

While water-sharing in the Indus system stands settled

by the Indus Treaty 1960, divergences are possible, and have

occurred, over the question of the compliance of Indian projects

on the western rivers with certain stringent provisions of the

Treaty which were meant to take care of Pakistan’s concerns as

a lower riparian.

The Treaty recognises three categories of such divergence:

‘questions’ to be discussed and resolved at the level of the

Indus Commission, or at the level of the two governments;

‘differences’ (that is, unresolved ‘questions’) to be referred

to a Neutral Expert (NE) if they are of certain kinds (that

is, broadly speaking, differences of a technical nature); and

‘disputes’ (going beyond ‘differences,’ and perhaps involving

interpretations of the Treaty) that are referable to a Court of

Arbitration. In the Kishenganga case, both ‘difference’ and

‘dispute’ come into play. Pakistan has proposed the reference of

certain technical issues to a Neutral Expert, and the submission

of a couple of other issues to a Court of Arbitrators.

The Kishenganga is a tributary of the Jhelum. It originates

in J&K, crosses the Line of Control, runs for some 150 km

in Pakistan-occupied Kashmir, and joins the Jhelum (in PoK).

India proposes to build a dam on the Kishenganga shortly

before it crosses the LoC, divert a substantial part of the waters

of the river through a tunnel to the hydroelectric project (330

MW, that is, 110 MW x 3) located near Bonar Nala, another

tributary of the Jhelum, and then return the diverted waters,

after they have passed through the turbines, to the Jhelum via

the Wular Lake.

An overview of the key contentions

The main ‘dispute’ to be referred to a Court of Arbitration

is on the issue of whether the diversion of waters from one

tributary of Jhelum to another is permissible under the Treaty.

Art. III (2) of the Treaty requires India to let flow all the western

rivers to Pakistan and not permit any interference with those

waters, and Art. IV (6) calls for the maintenance of natural

channels. If we go by these provisions, the diversion of waters

from one tributary to another seems questionable. On the other

hand, there is another provision (Ann. D, paragraph 15 (iii))

which specifically envisages water released from a hydroelectric

plant located on one tributary of the Jhelum being delivered

to another tributary; this seems to permit inter-tributary

diversion. The correct understanding of these provisions and

the determination of the conformity of the Kishenganga Project

to the Treaty is a matter for the two governments to agree upon,

or for the Court of Arbitration to decide.

Any diversion of waters from a river is bound to reduce

the flows downstream of the diversion point. It is true that

the diverted waters will be returned to the Jhelum, but there

will certainly be a reduction of flows in the stretch of the

Kishenganga (some 150 km) before it joins the Jhelum. This

will affect not merely certain uses of the waters but also the

river regime itself and the ecological system. It may be true that

only a small part of the waters (30 per cent or so) flows from

the Indian part to the Pakistani part and that the rest (70 per

cent) of the flows arise after the river crosses the LoC. However,

the diversion of a substantial part of the former by India will

undoubtedly have some impacts downstream.

Assuming that diversion from the Kishenganga to

another tributary is found permissible, there is a condition

attached: the existing agricultural use and use for hydro-electric

power generation on the Kishenganga in Pakistan must be

protected. There is indeed some existing agricultural use along

the Kishenganga (Neelum) in PoK. Pakistan is also planning

the Neelum-Jhelum hydroelectric project at a point on the

Neelum before it joins the Jhelum. These claims of existing uses

will probably be contentious issues between the two countries,

with reference to (a) the crucial date for determining ‘existing

use’ and (b) the quantum of existing use.

Pakistan’s contentions

Pakistan challenges, in particular, the permissibility

of the planned diversion by the KHEP of the waters of the

Kishenganga/Neelum into the Bonar Nallah, arguing that this

inter-tributary transfer will adversely affect the operation of

a hydro-electric project—the Neelum-Jhelum Hydro-Electric

Project or NJHEP—being built by Pakistan on the Kishenganga/

Neelum downstream of the KHEP (the “First Dispute”). The

transfer of water contemplated by India may be represented

graphically as in the attached diagram (Annex A). Pakistan has

also requested that the Court determine whether the Treaty

permits India to deplete or bring the reservoir level of “run-of-

river” hydro-electric plants below a level identified as “Dead

Storage Level” in the Treaty (the “Second Dispute”). Pakistan

submits that that such reservoir depletion would give India

impermissibly broad control over the flow of the river waters

allocated to Pakistan under the Treaty.

India’s contentions

For its part, India had stated its intent to use such reservoir

depletion to flush sediment out of the KHEP’s reservoir. India

maintains that both the design and planned mode of operation

of the KHEP are fully in conformity with the Treaty.

An overview

India and Pakistan are once again at loggerheads

over the issue of water-sharing. Pakistan is raising strong

objections to India’s construction of a hydropower project

on the Neelum River – known as Kishanganga in India – a

tributary of the Jhelum in the flashpoint territory of Kashmir.

While the dispute is only the latest in a long series of such

scraps, it is the first to be referred to international arbitration

under the 50-year old Indus Water Treaty (IWT), marking an

escalation in the race to take control of the Indus River.

12 • YAR • JULY 10, 2013


After bilateral negotiations collapsed in April last year, Pakistan

took the case over the 330-megawatt Kishanganga dam to the

International Court of Arbitration on the premise that India

had violated the World Bank-mediated IWT, which provides

a mechanism for resolution of disputes over waters originating

from the Indus basin. Under the 1960 treaty, the waters of

the eastern rivers of the Indus basin – Sutlej, Beas and Ravi

– are allocated to India, while Pakistan has unrestricted use

of the western rivers, Indus, Jhelum and Chenab.

This is the first case referred to international arbitration under

the provisions of the IWT. Despite persistent hostilities, India

and Pakistan have managed to uphold the treaty for decades.

Yet from time to time, the two south-Asian neighbours have

found themselves at odds over hydropower projects, as both

countries’ energy and irrigation needs continue to grow.

Pakistan has raised objections to a number of controversial

projects undertaken by India in Kashmir in the past,

including the Baglihar project on the Chenab River and the

Wullar Barrage on the Jhelum River. But the Kishanganga

dispute assumes a greater significance because Pakistan

is also vying to construct its own project – the Neelum-

Jhelum hydro scheme – on the Pakistani side of the Neelum

River. The IWT states that the country that completes its

project first will secure priority rights to the river.

Adding to tensions, the Neelum River flows across the militarised

Line of Control that separates the Indian and Pakistani

administered parts of Jammu and Kashmir and which has

witnessed the 1947-war between these two south Asian neighbours

and a number of military fire-exchanges since.

The dispute over the Kishanganga project itself centres on

the diversion of water from one tributary of the Indus River

to another. Pakistan said this violates the IWT, while India

argues the diversion is well within treaty provisions. India

maintains that it will only divert the Neelum to join the Jhelum

River, which also flows through Pakistan – and that therefore

the water will ultimately reach Pakistan anyway.

However, Pakistan has raised strong objections, saying

the diversion will turn the country’s Neelum Valley into a

desert. Pakistani experts also argue that the reduced flow

of the Neelum River will decrease the power generation

capability of Pakistan’s proposed 969-megawatt Neelum-

Jhelum hydropower project by more than 20%.

Last year’s floods in Pakistan forced it to halt construction

of the Neelum-Jhelum project, already delayed by problems

over land acquisition and failure to construct a bridge.

India, on the other hand, has speeded up work on the

strategically important Kishanganga project in order to finish

it by 2014, well ahead of the 2016 deadline. Pakistan plans

to complete the Neelum-Jhelum project by 2015.

India first developed plans for the 303-megawatt Kishanganga

project in 1984, but failed to build it for a long time. Egged on by

Pakistan’s progress on the construction of the Neelum-Jhelum

project on the other side of Line of Control, India made frantic

efforts to revive the 18-year old plans in 2008. “This project

is of strategic importance to India…we have to move heaven

and earth to ensure the earliest commissioning of the project,”

the then minister of state for power, Jairam Ramesh, told a

press conference in New Delhi in 2008. Pakistan is not the only

party that feels aggrieved. Kashmiri people feel “deprived” by

the fact India and Pakistan use their water resources without

allowing local people the benefits they deserve.

13 • YAR • JULY 10, 2013


The basis of the arbitration and its initiation

On 19 September 1960, the Government of the

Republic of India and the Government of the Islamic Republic

of Pakistan (the “Parties”) signed the Indus Waters Treaty 1960

(the “Treaty”).1 Article IX of the Treaty provides for a system

for the settlement of differences and disputes that may arise

under the Treaty. By Article IX the Treaty was also signed by

the International Bank for Reconstruction and Development

in respect of the World Bank’s role under certain provisions of

the Treaty. Instruments of ratification were exchanged between

the Parties on 12 January 1961; the Treaty entered into force

on that date with retroactive effect as of 1 April 1960 as stated

in Article XII (2).

Through a Request for Arbitration dated 17 May 2010,

Pakistan initiated proceedings against India pursuant to Article

IX and Annexure G of the Treaty. In its Request for Arbitration,

Pakistan stated that the Parties had failed to resolve the

“Dispute” concerning the Kishenganga Hydro-Electric Project

(the “KHEP”) by agreement pursuant to Article IX(4) of the

Treaty. Pakistan identified “two questions that are at the centre”

of the dispute in the following manner:

a. Whether India’s proposed diversion of the river Kishenganga

(Neelum) into another Tributary, i.e. the Bonar-Madmati Nallah,

being one central element of the Kishenganga Project, breaches India’s

legal obligations owed to Pakistan under the Treaty, as interpreted

and applied in accordance with international law, including India’s

obligations under Article III(2) (let flow all the waters of the Western

rivers and not permit any interference with those waters) and Article

IV(6) (maintenance of natural channels)?

b. Whether under the Treaty, India may deplete or bring the

reservoir level of a run-of river Plant below Dead Storage Level (DSL)

in any circumstances except in the case of an unforeseen emergency?

The court’s partial award

In its analysis, the Court emphasized at the outset that

its Partial Award, just as the Indus Waters Treaty itself, does

not have any bearing on any territorial claims or rights of the

Parties over Jammu and Kashmir. The Court’s findings pertain

solely to the Parties’ rights and obligations with respect to the

use of the waters of the Indus system of rivers, including with

respect to the use of the waters of those portions of the rivers

that flow through disputed territory.

Understanding the PCA

The Permanent Court of Arbitration (PCA), is an

international organization based in The Hague in the

Netherlands. It was established in 1899 as one of the acts of

the first Hague Peace Conference, which makes it the oldest

institution for international dispute resolution. The creation of

the PCA is set out under Articles 20 to 29 of the 1899 Hague

Convention for the specific settlement of international disputes,

which was a result of the first Hague Peace Conference. At the

second Hague Peace Conference, the earlier Convention was

revised by the 1907 Convention for the Pacific Settlement of

International Disputes. As of August 2009, 109 countries were

party to one or both of these founding Conventions of the PCA.

The PCA is not a court in the conventional understanding of

that term, but an administrative organization with the object

of having permanent and readily available means to serve

as the registry for purposes of international arbitration and

other related procedures, including commissions of enquiry

and conciliation. It is a permanent framework available to

assist temporary arbitral tribunals or commissions. The PCA

is housed in the Peace Palace in The Hague, which was built

specially for the Court in 1913 with an endowment from

Andrew Carnegie. From 1922 on, the building also housed the

distinctly separate Permanent Court of International Justice,

which was replaced by the International Court of Justice in

1946. Unlike the ICJ, the PCA is not just open to states but also

to other parties. The PCA provides services for the resolution of

disputes involving various combinations of states, state entities,

intergovernmental organizations, and private parties. In the

early 1980s, the PCA helped in setting up the administrative

services of the Iran-United States Claims Tribunal. The public

at large is usually more familiar with the International Court

of Justice than with the Permanent Court of Arbitration, partly

because of the closed nature of cases handled by the PCA

and to the low number of cases dealt with between 1946 and

1990. The PCA’s caseload has, however, increased since then.

The PCA administers cases arising out of international treaties

(including bilateral and multilateral investment treaties), and

other agreements to arbitrate. The cases conducted by the

PCA span a wide range of legal issues, including disputes over

territorial and maritime boundaries, sovereignty, human rights,

international investment (investor-state arbitrations), and

matters concerning international and regional trade. Hearings

are rarely open to the public and sometimes even the decision

itself is kept confidential at the request of the parties.

The three disputes

THE FIRST DISPUTE

1. The Permissibility of Inter-Tributary Transfers under the Treaty

In the First Dispute, the Court was approached and called

upon to determine whether India is permitted under the Treaty

to deliver the waters of the Kishenganga/Neelum River into the

Bonar Nallah in the course of the operation of the KHEP. The

contextual perusal of the case led to an observation. As an initial

matter, the Court observed that the Treaty expressly permits

the transfer of water by India from one tributary of the Jhelum

to another for the purpose of generating hydro-electric power,

subject to certain conditions. The Court first found that this

right is not circumscribed by the Treaty’s restriction of Indian

uses on the Western Rivers (which include the Kishenganga/

Neelum as a tributary of the Jhelum) to the drainage basin of

those rivers. This restriction relates to where water may be used,

and is not violated by the use outside of the drainage basin of

electricity generated from the water. The Court then examined

the Treaty provision requiring the Parties to maintain the natural

14 • YAR • JULY 10, 2013


channels of the rivers and its effect on inter-tributary transfers.

The Court found that this obligation involves maintaining the

river channels’ physical capacity to carry water, and does not

require maintaining the timing or volume of the flow in the

river. Accordingly, this obligation does not limit India’s right to

transfer water for the purpose of generating hydro-electricity.

Having established that India’s right to inter-tributary transfer

is not prohibited by other provisions of the Treaty, the Court

considered whether the KHEP meets the express conditions on

such transfer.

The Court noted that for transfer to be permissible, the

KHEP must (1) be a “Run-of-River Plant”; (2) be located on a

tributary of the Jhelum; and (3) conform to Paragraph 15(iii) of

the Treaty Annexure governing hydro-electric power generation.

The Court observed that a “Run-of-River Plant” is a term of art

defined by the Treaty and that the KHEP is a Run-of-River

Plant within that definition. The Court further decided that on

the facts of the case the KHEP should be regarded as located

on the Kishenganga/Neelum notwithstanding that the KHEP’s

power house is situated at a distance of 23 kilometres from that

river. The Court also found that, by releasing water into the

Bonar Nallah after it has passed through the power house, the

KHEP complies with the requirement that the “water released

below the Plant” be delivered “into another Tributary.” Finally,

the Court found that the KHEP’s inter-tributary transfer is

“necessary,” as required by the Treaty, for the generation of

hydroelectric power, as power can be generated on the scale

contemplated by India in this location only by using the 665

metre difference in elevation between the dam site on the

Kishenganga/Neelum and the place where the water is released

into the Bonar Nallah.

2 The Interpretation of the Treaty with Respect to “then existing Agricultural Use or hydro-electric use by Pakistan”

In addition to the requirements described above, the

Court recognized that Paragraph 15(iii) requires that “then

existing Agricultural Use or hydro-electric use by Pakistan”

on the downstream reaches of the Kishenganga/Neelum not

be adversely affected by the KHEP’s inter-tributary transfer.

Pakistan argued that “then existing” uses are to be determined

on an ongoing basis, whenever water is transferred from one

tributary to another. India, in contrast, argued that such uses

must be determined at a fixed point during the design of its

hydro-electric project. In seeking to establish when a “then

existing” agricultural or hydro-electric use is to be determined,

the Court was guided in the interpretation of the Treaty by

Article 31(1) of the Vienna Convention on the Law of Treaties:

“[a] treaty shall be interpreted in good faith and in accordance

with the ordinary meaning to be given to the terms of the

treaty in their context and in light of its object and purpose.”

The Court first examined the text of Paragraph 15(iii), noting

the provision’s focus on the operation of hydro-electric plants

and the implication that the determination of “then existing”

uses should take place on an ongoing basis throughout the

operational life of a plant. The Court then considered the

context of Paragraph 15(iii) and noted that the provision falls

within a continuum of design, construction and operation.

The Court observed that the provisions of the Treaty must be

interpreted in a mutually reinforcing fashion, as it would make

little sense for the Treaty to permit a plant to be designed and

built in a certain manner, but then to prohibit the operation of

that plant in the very manner for which it was designed. Finally,

the Court examined the object and purpose of the Treaty and

found that the Treaty both gives Pakistan priority in the use of

the waters of the Western Rivers (including the Kishenganga/

Neelum) and India a right to generate hydro-electric power on

the Western Rivers.

Turning to the application of the Treaty to the KHEP,

15 • YAR • JULY 10, 2013


the Court first considered the implications of the approaches

advocated by the Parties. The Court observed that under the

“ambulatory” approach advocated by Pakistan, a project’s

design could be cleared for construction as being consistent with

the design specifications of the Treaty, but then be prevented

from operating by new uses by Pakistan. In the Court’s view,

the uncertainty created by this approach, and the potential

for wastage, would have a chilling effect on the undertaking

of any hydro-electric projects by India on the Western Rivers.

With respect to the approach advocated by India, under

which Pakistan’s uses would be determined at the moment

that India communicates a “firm intention” to proceed with

a project, the Court observed that identifying a critical date

will often be difficult, but that it may be possible to identify

a “critical period” in which design, tenders, financing, public

consultations, environmental assessments, governmental

approvals and construction come together to indicate a firm

intention to proceed with a project. Nevertheless, the Court

noted that a solely “critical period” approach could result in a

“race” in which each Party would seek to create uses that would

freeze out future uses by the other, an outcome the Court

rejected.

Having considered the approaches advocated by the

Parties, the Court concluded that neither the ambulatory nor

the critical period approach were fully satisfactory and that the

proper interpretation of the Treaty combines elements of both.

The Court considered that it must first establish for each of the

KHEP and the NJHEP the critical period in which the Parties not

only planned the projects, but took concrete steps toward their

realization. Reviewing the evidence provided by the Parties, the

Court concluded that the KHEP reached this period in 2004–

2006. In contrast, the Court found that Pakistan demonstrated

a comparable commitment to the NJHEP in 2007 and 2008.

Given this timing, the Court decided that India’s right to

divert the waters of the Kishenganga/Neelum by the KHEP is

protected by the Treaty.

However, the Court also decided that India’s right to

divert the Kishenganga/Neelum is not absolute—it is subject to

the constraints specified in the Treaty and, in addition, by the

relevant principles of customary international law. Paragraph

15(iii) gives rise to India’s right to construct and operate

hydro-electric projects involving inter-tributary transfers, but

also obliges India to operate those projects in such a way as to

avoid adversely affecting Pakistan’s then existing agricultural

and hydro-electric uses. Both Parties’ entitlements under the

Treaty must be made effective so far as possible. The Court

therefore found that Pakistan retains the right to receive a

minimum flow of water from India in the Kishenganga/Neelum

riverbed at all times. The Court noted that this right also

stems from customary international environmental law, and

that it considered that the Treaty must be applied in light of

contemporary international environmental law principles.

In this context, the Court recalled the commitment made

by India’s Agent in the course of the hearing that India would

ensure a minimum environmental flow downstream of the

KHEP at all times.

3. The Court’s Request for Further Data

Having concluded that the Treaty requires the

preservation of a minimum flow of water downstream of

the KHEP, the Court determined that the data provided by

the Parties are insufficient to allow it to decide the precise

amount of flow to be preserved. The Court therefore deferred

its determination of the appropriate minimum flow to a Final

Award, and requested the Parties to provide additional data

concerning the impacts of a range of minimum flows at the

KHEP dam on, (for India), (a) power generation at the KHEP;

and (b) environmental concerns from the dam site at Gurez to

the Line of Control; and, (for Pakistan), (a) power generation

at the NJHEP; (b) agricultural uses of water downstream of the

Line of Control to Nauseri; and (c) environmental concerns at

and downstream of the Line of Control to Nauseri.

THE SECOND DISPUTE

1. The Admissibility of the Dispute over the Depletion of Reservoirs below “Dead Storage Level”

Insofar as India had raised two objections to the

admissibility of the Second Dispute, the Court considered,

first, whether Pakistan had followed the Treaty procedure for

the submission of disputes to the Court; and second, whether

the Second Dispute, given its subject-matter, could properly

be heard by the Court. With respect to the first question, the

Court observed that the Treaty provides for disagreements

between the Parties to be resolved either by a seven-member

court of arbitration or by a single, highly-qualified engineer,

acting as a neutral expert. The Court concluded that the neutral

expert process is given priority only if one or the other Party

has in fact requested the appointment of a neutral expert. In

the present case, neither Party made such a request and the

Court was therefore not precluded from hearing the Second

Dispute. With respect to the second question, the Court found

that although the Treaty specifies the technical matters that

may be referred to a neutral expert, it does not give the neutral

expert exclusive competence over these listed matters. Once

constituted, a court of arbitration is empowered to consider

any question arising out of the Treaty, including technical

questions. Having rejected both objections, the Court found

that the Second Dispute is admissible.

2. The Permissibility of the Depletion of Reservoirs for Drawdown Flushing

In approaching the merits of the second dispute, the

Court observed that the question of reservoir depletion is

linked in the Parties’ disagreement with the permissibility of

controlling sediment through the procedure of drawing down

the reservoir and flushing accumulated sediment downstream.

The Court briefly reviewed the process of sedimentation in the

reservoirs of hydro-electric plants and the various techniques

available for sediment control, including drawdown flushing.

The Court then examined three aspects of the context of the

Treaty with respect to drawdown flushing. First, the Court

observed that one of the primary objectives of the Treaty was

16 • YAR • JULY 10, 2013


to limit the storage of water by India on the Western Rivers

and that the Treaty includes strict restrictions on the volume of

storage permitted to India. The Court noted that in contrast,

the volume of Dead Storage is not controlled, suggesting that

such storage was not intended to be subject to manipulation.

Second, the Court noted that the Treaty includes design

restrictions on the low-level outlets that would be required to

deplete a reservoir and that these restrictions make sense only

if depletion is also restricted. Third, the Court recalled that the

Treaty drafters intended for India to have the right to generate

hydro-electric power on the Western Rivers, and noted that

this right must be given effect by allowing India’s hydro-electric

development to be sustainable.

Reading the provisions of the Treaty in light of these

contextual aspects, the Court concluded that the Treaty prohibits

depletion below Dead Storage Level of the reservoirs of Run-of

River Plants (and, correspondingly, drawdown flushing) through

reference to a provision of the Treaty Annexure dedicated to

storage works, which states that “the Dead Storage shall not be

depleted except in an unforeseen emergency.” The Court also

noted that the Treaty includes restrictions on the permissible

variation in the volume of flow in a river above and below a

hydro-electric plant, and that these restrictions may also be

incompatible with drawdown flushing in certain reservoirs and

in certain flow conditions.

To complete its analysis, the Court examined whether the

sustainable generation of hydro-electric power on the Western

Rivers is possible without drawdown flushing. After reviewing

the technical documentation submitted by the Parties and the

testimony of the experts presented by them, the Court observed

that drawdown flushing is only one means of sediment control

and concluded that hydroelectricity may be generated without

flushing.

Finally, insofar as certain hydro-electric plants are under

construction or have been completed by India, the Court

stated that its decision on the Second Dispute may not be so

interpreted as to cast doubt retrospectively on any Run-of-River

Plants already in operation on the Western Rivers, nor as to

affect retrospectively any such Plant already under construction

the design of which (having already been duly communicated

by India under the relevant provisions of the Treaty) has not

been objected to by Pakistan as provided for in the Treaty.

Conclusion

This is the first time that a dispute under the Indus Waters

Treaty which is a rather significantly persistent legislation that

is surviving many wars for over 50 years now, has been referred

to arbitration. From the view point of international law and

international relations, arbitration as a means for dispute

settlement between India and Pakistan holds a lot of promise.

Veeraraghavan Inbavijayan (www.inbavijayan.com)

and Kirthi Jayakumar

17 • YAR • JULY 10, 2013


THE AFTERMATH OF THE REVOLUTION: An assessment of the compatibility

of the tunisian law for international arbitration with general contemporary practice

in international commercial arbitrationBy Henry Clarke1

ABSTRACT

This article assesses the need for reform of

Tunisian international arbitration law as a dispute resolution

measure for Tunisia’s international trade and inward

investment. The areas considered are contrasted to the

original and revised UNCITRAL Model Law on International

Commercial Arbitration and occasionally to other national

arbitration laws or considered as topics notably absent from

the Model Law such as public policy, liability of arbitrators and

arbitral institutions, multiparty and multi-contract arbitration,

set off, confidentiality, and costs and fees. The conclusions are

an agenda for reform of the international arbitration law for

Tunisia and the Arab world more widely.

1. INTRODUCTION

International commercial arbitration (“ICA”) has grown

in importance since the 1980s. It has sustained the creation of

specialist arbitration practice groups in leading international law

firms, the proliferation of academic journals and the expansion

of academic study in the field.2 This growth has tied in with the

acceleration of globalisation in commerce since the end of the

Cold War; with more international trade investment there is an

increased need to resolve international business disputes.

Not all disputes may be resolved informally by negotiation

between the parties. It may also be complex, costly and risky

to litigate in courts in various jurisdictions whose reputation

for efficiency, probity and impartial law may not be accepted

by one or all the parties. ICA provides an alternative, private

dispute settlement forum to a national court. It is selected

and controlled by the parties and resolves the parties’ rights

and obligations through decisions of arbitrators in a final and

binding manner with only loose supervision by national courts.

This flexibility is favourable to the Middle East and

North Africa. As the dust settles on the Arab democratic

upheavals it may be that these newly democratic countries try

to meet the demands of their young and growing populations

for prosperity through increased international business. If this

happens depends on various factors including the possibility

18 • YAR • JULY 10, 2013


of resolving business disputes efficiently and reliably. In this

bid for prosperity, ICA may provide an important fine tuning

instrument for trade and investment in these countries.

However, divergences amongst national provisions in arbitration

law create uncertainty and risk in ICA thus affecting its viability.

This dissertation concentrates on Tunisia, the first

Middle Eastern state to experience revolution and its aftermath

in the recent upheavals in the Middle East. Because of this

clear change of political regime and the economic aspirations

expressed by the Tunisian people during the revolution in

demonstrations, Tunisia can be seen as pioneering and thus

worthy of focused study.3 The country’s relationships with

foreign investors and markets will be critical to the rate of

national economic growth in the future. This will be influenced

to some degree by the legal framework in which foreign

investors and Tunisian business people operate, which includes

the resolution of disputes. An important part of this will be the

use of ICA under Tunisian arbitration law, thus this dissertation

will examine the suitability of Tunisian arbitration law for ICA.

2. SOURCES

To assess the suitability of the Tunisian arbitration

law for ICA, this dissertation will consider the original and

revised United Nations Commission for International Trade

Law (“UNCITRAL”) Model Law on International Commercial

Arbitration (“Model Law” or “ML”) before comparing and

contrasting it to the Tunisian international arbitration law.4 The

Model Law was original published in 1985 and subsequently

widely adopted by states across different legal traditions in

efforts to update arbitration laws. The Model Law’s revision

in 2006 is witness to the degree to which the original Model

Law has been used and discussed within ICA thus generating

the demand for its revision so it can continue to cater for the

evolving needs of parties. References will sometimes be made

in this dissertation to other national arbitration laws when

novel solutions to issues have been applied in aid of ICA in

a different manner to that of the Model Law or in areas not

covered by the Model Law.

3. UNCITRAL AND THE 1985 MODEL LAWUNCITRAL

Establishing UNCITRAL in 1966 was a step forward in

efforts to harmonise national commercial laws which eventually

led to the Model Law.5 ICA was considered as being within

its remit.6 UNCITRAL’s first ICA success was the UNCITRAL

Arbitration Rules 1976 (“1976 Rules”).7 The Rules resulted

from considerable liaison with arbitral institutions and experts

as well as much negotiation between common law and civil

law lawyers from developed and developing states. In ICA

the 1976 Rules have been widely used in ad hoc arbitrations.8

They have also been widely used, referred to and adapted by

arbitral institutions.9 They were updated in 2010 to retain their

relevance to international arbitration.

With the increasing number of ratifications of the New

York Convention on the Recognition and Enforcement of

Foreign Arbitral Awards 1958 (“NYC”), along with the success

of the 1976 Rules, the need to harmonise the diverse and

sometimes stringent requirements of national arbitration laws

was seen as the next ICA project.10 When UNCITRAL decided

to try to harmonise national arbitration law, a Protocol to the

NYC was proposed via a convention.11 However, on further

consideration UNCITRAL decided on the flexibility of the

model law format.12 Arguably this approach neatly followed on

from the consultative process used to produce the 1976 Rules

as a set of rules for adoption rather than as rules rigidly to be

imposed in arbitration practice.

The Model Law

The Model Law is not a classic form of international

vehicle for harmonising ICA law. The convention historically

has been the default method as borne out by the Geneva

Protocol 1923, Geneva Convention 1927, NYC, European

Convention 1961, Washington Convention 1965 and the

European Convention providing a Uniform Law on Arbitration

1966 (“Uniform Law”). A convention is intended to unify law

through agreeing binding obligations. It comes into force after

a requisite number of states ratify it. Conventions are useful

when a high degree of harmonisation of law is sought by states.

Reservations or declarations by states relating to conventions

are permitted by international law, however UNCITRAL

practice has been to prohibit such qualifications or limit them

in its convention negotiations so as to produce a high degree of

unification in the negotiated areas.13

A model law is a simpler document than a convention.

It does not require a diplomatic conference. There is not the

stark risk of failure inherent in conventions through trying

to implement a rigid structure. The Uniform Law being

implemented only by one signatory is such an example of

the failure of a convention.14 There is no need to wait for a

threshold number of ratifications before the document becomes

enforceable. It is less costly to produce in terms of elaborate

diplomatic conferences. Model laws as recommendations for

law have greater freedom for states to accommodate the new

international norms in their domestic law. Unlike treaties,

compromises do not have to be reached between negotiating

states to ensure agreement, signature and enforcement; a model

law is not an obligation on a state as a finished document, but

merely a recommendation of good practice.

A model law may omit local legal terminology by using

descriptive language.15 The drafters of the Model Law took

account of the descriptive language and content of the successful

NYC and the 1976 Rules, the latter being recognised as a neutral

and comprehensive set of rules.16 In turn, by using such language

in a consistent manner with these instruments, the UNCITRAL

Working Group buttressed the established position of these

instruments as pillars of the architecture of ICA.17 Furthermore,

it clarified various points in the NYC such as written form,

compatibility of interim measures with an arbitration agreement

and the choice of law.18 This language and model law structure is

also educational in layout and drafting, whilst being suitable for

legislation.19 Legislative guides may even be produced alongside

19 • YAR • JULY 10, 2013


a model law, as is the practice of UNCITRAL.20

States can take elements or modify elements of the

Model Law for enforcement to enact internationally compatible

legislation.21 Thus it enables improvement of national laws via

adoption so jurisdictions which have not legislated in that field may

quickly attain international norms in that field, whilst catering for

local circumstances.22 They also enable sophisticated jurisdictions

in that field to reconsider and, if necessary, amend their laws.23 In

other words model laws are a systematic attempt to create best

practice in potential legislation based on various laws, practice and

legal scholarship. Thus when a model law is adopted wholesale, or

nearly so, it is all the more conscious a step to take in modifying

the law; a break with the past sends out a clear message of the

intent of the lawmakers to regulate the particular subject matter

in accordance with international best practice.

At the time of the negotiation of the Model Law

between 1979 and 1985, the laws of many jurisdictions did

not appreciate the features and processes of ICA cases. Even

equal treatment with domestic arbitration did not sufficiently

serve ICA. This was due to inappropriate domestic provisions

applying to ICA and foreign parties not being familiar with

domestic law on arbitration.24 By contrast, uniformity and

predictability in arbitral procedure was thought to reduce risks

in conducting international business thus foster international

business relations.

A good ICA law is clear and known:

“This knowledge factor (or “high-fidelity” factor)

should be taken into account by any State desirous of hosting

arbitrations, not only arbitrations in which one of the parties is

from the host State but also other international arbitrations in

which all parties are foreign. Conversely, it would help parties

from the host State if an arbitration in which they might be

involved in another State were governed by the same or a

similar law familiar to them. . . .

“The above considerations suggest certain major

conditions that an acceptable law for international commercial

arbitration should meet. It should be of good quality, with

solutions that are both sound and suitable for the specific needs

of international arbitration; it should be easily recognisable by

and understandable to foreign users; and, building on these two

conditions, it should be similar to the law of many other States

embodying generally recognised principles.”25

The UNCITRAL Working Group included the input

of dozens of states and many arbitration institutions and

other interested organisations. It is robust for having been

drafted in consultation with experts across the world and in

conjunction with states with a wide variety of legal systems

and economies. The Model Law has crossed the divides of

civil law and common law, the Islamic and non-Islamic and

the developed and developing world.26 Its international origin,

design and acceptability is part of its attraction for adoption

as is its ease of use by foreign counsel, arbitrators or parties. 27 This diverse and detailed input is reflected in the extensive

travaux préparatoires which may be used by legislators, counsel,

arbitrators and courts for interpretation on adoption of the

Model law.28 Lord Dervaird in the Scottish context has noted

regarding the extensive travaux préparatoires:

“It appears to the Committee that there may be

circumstances in which in order that any matters of doubt or

ambiguity can be resolved in accordance with the spirit of the

Model Law parties should be entitled to draw the attention

of the court to the Travaux Preparatoires which went into

making of the Model Law. In this regard the Committee thinks

it appropriate that some legislative reference should be made to

this matter, in order to avoid the doubts generally in Scots Law

as to the extent to which regard may properly be had to such

matters in construing legislation.”29

Thus it is acknowledged that the Model Law preparation

had much more consideration than a national bill typically does

before being approved as law. In addition, the UNCITRAL

Secretariat to a degree assists national legislators in adopting

the Model Law.30

Furthermore, when updating a national arbitration

law, legislators have taken the Model Law into account.31 A

new national arbitration law should contain a number of

provisions modelled on the Model Law.32 It is aimed at enabling

jurisdictions to have comparable national arbitration laws

that minimise local peculiarities not justified for ICA.33 This

is because the negotiators strove for widely acceptable and

workable solutions.34 Modifications of the Model Law should

be minimal to gain the maximum effect from adoption, the

‘high fidelity factor’ so Lord Dervaird continued:35

“While certain changes to the Model Law are necessary in

every country in order to accommodate it to the legal structures

of that country, the main object of the Model Law is to provide

a framework for arbitration which is readily understandable by

people of very different legal cultures. Accordingly, the Committee

recommends that any legislation to give effect to its proposals

should depart from the language of the Model Law only where

essential. This is the course of action which has been taken in

those countries which have already adopted the Model Law.”36

Furthermore, the Model Law is based on the jurisdiction

providing a service to ICA, so adaption should be more of a

refinement than alteration:37

“Arbitration rests on confidence in the arbitration laws

of the venue, and both parties to an international contract

primarily only have confidence in their own laws and misgivings

about those of the other. The present result is, therefore, a

tussle which is often resolved in favour of some neutral venue

in a country with whose laws neither party is really familiar;

... The concept underlying the Model Law is to put an end to

this state of affairs by widening the parties’ choice of venue,

and thus their choice of arbitration clauses for incorporation

into their contracts. In so far as a country will have enacted

legislation based on the Model Law, both parties will be able to

find it easier to accept arbitration in that country, because they

will know basically where they stand.” 38

20 • YAR • JULY 10, 2013


No particular article of the Model Law has repeatedly

been amended, thus indicating a generally acceptable law.39

An added benefit of adoption of the Model Law with minor

alterations is the option for courts to rely upon the existence

of extensive commentary, including guiding case law on Model

Law provisions from many jurisdictions in the resource called

Case Law on UNCITRAL texts (“CLOUT”).40 Case law can also

be found in ICCA’s ‘Yearbook Commercial Arbitration’ and the

Model Arbitration Law Quarterly Reports. Recently, UNCITRAL

also produced a digest of case law on the Model Law that will

be of great use in Model Law adopting jurisdictions.41 Such case

law and commentary reduce the risk of interpreting Model Law

definitions and articles in diverging ways across jurisdictions.

The Model Law as a national law meets all three

necessary conditions for a good arbitral seat. It is harmonised

with other national laws, understandable to foreigners, and

amenable to ICA. The Model Law emphasizes party autonomy,

but is limited by certain mandatory provisions preserving

due process.42 As the Model Law states, it is “subject to any

multilateral or bilateral agreement which has effect” in the

jurisdiction.43 Arguably this is not necessary, but the wording

declares for the avoidance of doubt that it is a law relating to

international subject matter, that international instruments do

relate to the arbitration law and that international treaties and

conventions are also a means of harmonising law.44

The advantages of the Model Law to an adopting

jurisdiction are lengthy.45 It is a finished text for adoption and

available in six languages46 with wide coverage of ICA issues

structured in a manner following the stages of ICA. It covers

the essential issues and contains straightforward language.47

The Model Law has been favourably received and adapted

across the world.48 One national arbitration law based on the

Model Law may regulate domestic and international arbitration

thus harmonising two regimes and enabling parties to opt into

one regime from the other.49 It may be adopted by developed

states to update existing laws using the freedom to vary the

text inherent in the model law concept.50 With adoption there

would be a welcome public relations effect; the Model Law is

known and generally approved by arbitrators and counsel in

ICA practice, and so it sends a positive signal to parties, legal

professionals and arbitrators that a jurisdiction welcomes the

resolution of disputes by international arbitration.

The Model Law has been described as an “ambitious”

project51 and standing beside the NYC in significance in

the arbitration world52 with the 1976 Rules have similar

significance.53 The Model Law has proven to be a viable

alternative to creating a convention through its balance of

consensus drafting and flexibility for adoption.54 This has

been enhanced by its revision in 2006 to ensure it retains its

relevance with the evolution of ICA. By 2006 the requirements

of parties to arbitration had evolved from those of 1985 and

areas of further harmonisation were considered feasible. The

revised elements of this law are also considered in the analysis

of this dissertation.

4. CONTEXT OF THE TUNISIAN ARBITRATION

Turning to the Tunisian international arbitration law,

it is set in the Tunisian legal system which originates from

Islamic and civil law. The civil law derives from the creation

of the French protectorate in 1881 that led to a written legal

system.55 This civil law tradition was retained on independence

in 1956,56 however there is potential for a modernised Tunisian

national arbitration law based on the civil code tradition to

accommodate Islamic values in the conduct of the arbitration.57

21 • YAR • JULY 10, 2013


With increasing demands for democracy, reform of the law

must reflect cultural values for it to have legitimacy. This

may include justification on Shar’ia grounds for the changes.

Fortunately for lawyers there is much to consider in Shar’ia

to create such justification through its various legal schools of

thought.58 Yet, the success of the Model Law adoption in Egypt

and the use of arbitration rules based on the 1976 Rules at the

Cairo, Nigeria, Kuala Lumpur and Tehran regional arbitration

centres indicates arbitration law reform need not be diverted

into religious law debate in the Islamic world to provide a list of

areas for possible reform in Tunisian law to enhance recognition

and understanding of the law internationally.

This is contrary to a fear that has been expressed by some

commentators that widespread adoption of the Model Law

indicates a lack of cultural sensitivity.59 Culture is important in

business and dispute resolution so sensitivity needs to be used

to accommodate the business circumstances. In the context of

globalisation with the demand of ease of conducting business by

international investors on one hand and businesses acting for

the aspirations of the youthful, poor population of Tunisia on

the other, cultural accommodation may be best supported by

means of the administration and conduct of arbitration cases.60

Good practice in this field can be identified from the actions

of well-known arbitral institutions like the London Court of

International Arbitration (LCIA) which has set up local offices

in the West Indies and became a partner in a local arbitration

institution in Mauritius which broadly follows the LCIA Rules in

its own arbitration rules. In such centres the recruitment of staff

with appropriate language skills, local qualifications and religious

beliefs aid understanding. Arbitrators should consider the merits

of cultural training and be helped in obtaining this by institutions

they are associated with. Such measures in combination support

the benefits of ICA whilst accommodating local concerns.

Relating to culture, it is interesting to note that Tunisia

adopted the Model Law to replace an earlier arbitration code

which had great similarities to the French arbitration law

prior to the 1981 French reforms.61 French law was generally

supportive of international arbitration prior to 1981. This

was particularly based on the approach of the courts and their

inventive capacity rather than due to the incomplete, opaque

and confusing articles in the Code of Civil Procedure relating to

international arbitration. This inventive capacity consequently

resulted in complex, even contradictory, case law as the courts

attempted to produce the appropriate results on each occasion.

Even issues like the powers of a tribunal to decide by amiable

composition were not clear.62

Against this French influenced background the 1993

Tunisian law was an achievement as it ended disputes about: the

validity of clauses; the power to enter into arbitration agreements;

specific features of procedures; and the enforcement of awards.63

The Model Law adoption demonstrated Tunisian government

support for harmonising rules governing international

arbitration rather than following a more bespoke arbitration

law reform as France did in 1981.64 The Model Law adoption

by Tunisia significantly changed the Tunisian courts approach

to arbitration. The courts consistently applied key concepts of

effective arbitration such as the separability of the arbitration

agreement, party autonomy and competence-competence.65

The present law consists of three chapters. The first chapter

covers common rules with an influence from the Model Law. The

second chapter covers domestic arbitration. The third chapter is

based on the Model Law and covers international arbitration. It

refers back to the first two chapters on occasions.66

There are some advantages to having a domestic and

international arbitration regime in national law. There is

clarity in knowing the domestic and international status of a

particular case.67 Parties can opt into international arbitration

from domestic arbitration: this gives parties the opportunity

to opt into and experience the international regime, positive

experiences of which may assist in generating support for

domestic arbitration reform.68 Domestic pressures may make

it harder to carry out change in domestic arbitration. This

may be especially apt if the domestic regime can act as an

alternative arbitration method catering to local legal issues

using specific cultural understanding on issues that might vary

from international perspectives, such as the independence

and impartiality of arbitrators or the extent of a right to an

oral hearing. Having experienced the reformed international

arbitration regime, it may then be politically easier to introduce

a reformed domestic arbitration regime.

However, uncertainty can occur in the structure of

separate domestic and international arbitration regimes. This

can be avoided by not using cross references from sections of

one regime to sections of the other regime in the law. This then

creates effectively two laws. Sanders prefers one arbitration

law rather than a domestic and international dichotomy.69 It

provides a uniform, ‘high fidelity’ factor for parties. As Sanders

states, one regime for both can be successful as it has been

in Germany and the Netherlands.70 Tunisia has had 19 years

of Model Law based ICA. It would now seem appropriate,

after this period, the recent political upheaval and the need

for significant and long term economic growth to debate the

integration of Tunisian domestic and international arbitration

law into one arbitration law based on the Model Law.

5. ANALYSIS OF THE TUNISIAN INTERNATIONAL ARBITRATION LAW IN THE LIGHT OF THE MODEL LAW

In contrasting Tunisian law with the Model Law, this

dissertation considers only those Tunisian articles requiring

reform in the order in which the subject matter is dealt with

in the original and revised Model Law. Thereafter it considers

issues not covered by either the original or revised Model Law

nor adequately covered in Tunisian law. The first issue relates

to definitions.

Definition of ‘Commercial’

The Model Law does not define “commercial”, but there

is a footnote suggesting “wide interpretation”.71 The Tunisian

arbitration law excludes the definition of “commercial” to

broaden its application to include ‘civil’ and ‘mixed’ subject

22 • YAR • JULY 10, 2013


matter for arbitration.72 Therefore it seems unnecessary in

Tunisian article 48(1) to include a definition of commercial.73

Arguably this should be removed in a future law reform.

The arbitration agreement

On moving to key arbitration concepts, the original ML

Article 7 regarding an agreement to arbitrate in writing was

closely modelled on the wording of NYC article II. Article 7

adds to this by referring to an exchange of claim and defence

statements as an arbitration agreement.74 Also, a reference in a

contract to another document containing an arbitration clause

constitutes an agreement to arbitrate disputes.75 Electronic

forms of communication were not considered in the 1985 Model

Law, although writing in article 7(2) was expanded to include

forms of telecommunication.76 Thus article 7 broadens article

II NYC.77 The ‘in writing’ requirements were a significant part

of the 2006 review of the Model Law.78 New article 7 option

1 in article 7(4) extensively defines electronic documents by

illustrative example.

To absorb the current context of ML article 7, Tunisian

article 6 needs to refer to electronic communication.79 Electronic

mail is included in the Tunisian adoption of article 7(4) by virtue

of an amendment of the Code of Obligations and Contracts which

considers a document as written once the electronic document

is saved and signed electronically.80 Nevertheless, it might be

clearer to foreign parties if the arbitration law was specific on the

point in the spirit of a self-contained law for the use of foreign

parties as advocated by Hermann and Kerr.81 The revised ML

article 7 option 1 should be considered for adoption by Tunisia

to fully benefit from the widest scope for an agreement in writing

to arbitrate. This option is in keeping with Tunisian legal heritage

by referring to arbitral clauses and agreements, which ML option

2 does not make explicit, through that radical broad definition of

agreement does not even need to be in writing.

Court support

On examining the necessary tribunal – court relationship

for arbitration, it is clear the Tunisian arbitration law adheres to

ML article 5 in through article 51. The court powers are those

set out in the arbitration law. The Model Law accelerated a

trend to minimise court intervention in ICA through its “defined

and balanced” system of court supervision.82 UNCITRAL

consideration was given to excluding courts entirely. This would

have hindered party freedom to choose interim measures from

the court or the tribunal. The choice is also a practical matter in

light of the limitation on the tribunals’ powers of enforcement,

especially in relation to third parties.

ML article 6 requires a designated court for ICA decisions.

The Tunisian court appointed for international arbitration

duties is the Tunis Court of Appeals where a decision is made

within 3 months of request regarding validity of an arbitration

clause or agreement.83 Tunisian article 52 does not say the

arbitral proceedings continue pending a court decision.84 The

Model Law position under article 8(2) is more practical and

flexible in its allowing the tribunal to judge the wisdom of

continuing the arbitration pending a court decision in such

circumstances. This follows the free choice philosophy behind

the Model Law in the use of courts and tribunals.85 Any reform

of Tunisian law should fully apply this free choice approach

to maximise the prospects of efficient conduct of arbitration.

Furthermore, when the Tunisian Court of Appeal has to

decide whether to refer a matter to arbitration, it should be

able to show a pro-arbitration stance on a limited review of

the arbitration agreement as happens in most sophisticated

arbitration jurisdictions86 and aid efficiency by fixing a time

limit for the arbitration to commence if one has not already

been fixed by the parties, the tribunal or arbitral institution.87

Tribunal composition

Moving to the tribunal, Tunisian law avoids the issue

of an impasse caused by arbitrator disagreement by having an

odd number of arbitrators in a fully constituted tribunal.88 This

contrasts with ML article 10(1) that permits even numbers

of arbitrators if agreed by the parties. The Tunisian Court of

Appeal appoints arbitrators if parties fail to do so. The tendency

has been to appoint judges; no approved arbitrator list is

maintained by the court system.89 Under article 56(5) there

is no appeal from the decision. A more ICA friendly method

may be to follow Mauritius in selecting a prominent arbitral

institution such as the Permanent Court of Arbitration to give

it an arbitrator appointing function.90 This could entice such an

ICA institution into being permanently present in Tunisia and

thereby develop Tunisia as an international dispute resolution

venue. Alternatively a domestic arbitration institution could be

revitalised with the role.91 In light of the lack of a well-established

domestic arbitral institution with primacy, consideration

could be given to inviting an international arbitral institution

as a statutory appointing authority with the prospect of the

institution setting up a permanent office in Tunisia.

Challenge to an arbitrator

Arbitrators appointments may be challenged by parties

under Tunisian article 58. The challenge must be made within

15 days of the arbitrator appointment or the party becoming

aware of the ground for challenge. It can be to an arbitral

institution under article 58(4), thus making it compliant with

ICC Rules and other rules that require an arbitral institution to

consider arbitrator challenges.92

Notwithstanding this, Tunisian law under article 58(3)

permits a dissatisfied party to apply to the Court of Appeal if

the other party does not accept the challenge or the arbitrator

in question rejects it. This must be done within 45 days of the

rejection. Meanwhile the arbitral proceedings are stayed. In

justification it is argued the tribunal is based on contract and

has a collegial atmosphere in it, so for a tribunal to make such

a decision damages the relationships within the tribunal hence

the role of the court in these decisions.93

It is questionable if the Tunisian court process in this

instance is a good use of legal resources; the arbitration case is

suspended during the court arbitration challenge hearing under

23 • YAR • JULY 10, 2013


article 58(3). To always give the court final responsibility for

challenges to arbitrators puts dispute resolution matters back in

the hands of the court when the aim was to lighten the workload

of the courts and for the parties to resolve their own disputes.

The challenge decision can be reviewed at a later stage, namely

at a set aside application and/or at enforcement proceedings if

they wish. When the court does consider the matter, it may

well have less knowledge than the remaining arbitrators of the

context of the challenge or an associated arbitral institution

such as the ICC. The 45 days taken by the court to resolve

an arbitrator challenge at an early stage is also unnecessarily

lengthy when compared to the Model Law 30 day limit for

a court application and so may encourage dilatory tactics by

a party.94 Arbitrators in ICA are increasingly a professional

cadre, as are counsel in ICA, thus robust enough to consider

challenge applications when sitting in tribunals. Therefore the

role of the court may be unnecessary in this decision in some

cases so parties should be able to opt out of this requirement of

Tunisian law in the arbitration agreement.

Resignation or incapacity of an arbitrator

Appointed arbitrators may resign under the Tunisian

law and the Model Law. The resignation of a party appointed

arbitrator could be conducted to obstruct proceedings. This

scenario is not dealt with by the Model Law nor in Tunisian

law.95 ML Article 15 substitutes an arbitrator who fails to act.

Similiarly, if an arbitrator dies, he is replaced and the arbitration

continues.96 The substitution is to be by the same method

of selection as the first arbitrator. None of these solutions

guarantees improved tribunal performance. Selection in itself

delays matters,97 after which the replacement arbitrator may act

in a dilatory way. Then there is a risk of justice delayed being

justice denied.

A preferable option would be to have a decision by a

truncated tribunal when the truncated tribunal suspects

deliberate obstruction. This option exists in some institutional

rules.98 One option to support this may be for Tunisian law

to provide for a court application by a truncated tribunal to

empower them to render an award. A court could then consider

the reasonableness of this option in each instance whilst the

arbitration may proceed under the tribunal discretion until any

court rejection of the application occurs. If the application

is rejected, a third arbitrator could then be appointed by the

appointing party so a full tribunal to continue the arbitration.

Tribunal jurisdiction

The established tribunal has the competence to decide its

competence to determine a case under Tunisian article 61. An

action by a party in court within 30 days of the unfavourable

decision suspends the arbitration unlike the Model Law. The

court must give a decision within 3 months.99 In the interests

of efficiency the tribunal should have the discretion to proceed

with the case as ML article 13(3) permits whilst the court

application is heard.

Interim measures

The power and capacity to order interim measures

span the roles and powers of tribunals and courts. Tunisian

article 62 on interim measures corresponds to the original ML

article 17 regarding tribunal ordered relief. Tunisian article

54 corresponds with the original ML article 9 regarding court

ordered interim relief. Article 62 allows the tribunal to make

interim and conservatory measures ‘deemed necessary’.

Interim measures facilitate the operation of the arbitration

by avoiding loss or damage and stabilising the parties’ relationship

for the duration of the arbitration.100 Interim measures in

the preparation of the original Model Law caused much

controversy.101 UNCITRAL decided against including provisions

for the scope or enforcement of interim measures in the original

article 17; implementing states could find appropriate methods

for their jurisdictions.102 Tunisia added to original ML article 17

by stating that if a party does not comply with a tribunal order,

the tribunal may go to court.103 This exists because there is no

other mention of tribunal enforcement powers relating to interim

measures in the Tunisian arbitration law.104 It should also be

noted that in Tunisia a summary judge has jurisdiction to order

any provisional or conservatory measure within his jurisdiction

provided that the tribunal has not been constituted.105

Malouche has argued that court ordered interim

measures run counter to tribunal powers in article 62.106 He

also believes Tunisian domestic arbitration article 19 would be

appropriate in ICA: there should be no court interim measures

once the tribunal is constituted.107 A more functional position

depends on what parties require. The tribunal may not have

power to provide interim measures relating to third parties for

example, hence an application to court for interim relief may be

appropriate during arbitral proceedings.

Yet in some jurisdictions courts may only provide

interim measures for cases seated within the jurisdiction.108

Consequently harmonisation regarding interim measures was

increasingly seen as necessary.109 There has been an increase

in requests for interim relief over the years highlighting the

need for reform because business has become more global.

Parties have also an increased understanding of their rights and

options.110 Where the law is uncertain, arbitrators are likely

to be cautious in giving interim measures and parties may not

risk asking for interim measures. This is not desirable where

the court option may be longwinded.111 Thus inclusion of

interim measures issuance and enforcement was considered but

declined by the UNCITRAL Working Group for the revised

Model Law.112

The revised Model Law amended article 17 and inserted

articles 17A-17J. These elaborated tribunal power to award

interim measures concurrent with that of the courts.113 The

UNCITRAL Working Group considered it desirable to have

clauses considering the terms, conditions and circumstances

of the issuance of interim measures.114 There was much

discussion of the extent of court and arbitral tribunal powers

and the procedures that should be followed by them.115 A flexible

approach was adopted in new articles for generic, broad categories

of urgent, ex parte ‘preliminary orders’ and more considered

24 • YAR • JULY 10, 2013


interim measures which are illustrative of what can be ordered.116

The revised Model Law requires circumstances whereby the

interim measures avoid “imminent harm or prejudice”, create a

balance of hardship or preserve assets or evidence.117 There is

also the requirement for a reasonable possibility of success on the

merits of the claim, and to avoid predetermination of the merits

of the case.118 The measure must be for a harm that cannot be

adequately recompensed by damages and the measure must not

outweigh the harm caused by the measure to the other party. 119

There appears to be a difference between interim

measures under revised ML articles 17(2)(a)-(c), and article

17(2)(d). Article 17(2)(d) has a threshold akin only to the

extent the arbitral tribunal considers “relevant”, whilst articles

17(2)(a)-(c) indicate an obligation to provide interim relief to

an applicant party if the necessary threshold of evidence is met.

The threshold levels are sensible and not onerous. The arbitral

decision may not be an award, but an order, but these categories

are judged by substance rather than name.120

The enforcement of interim relief as orders and awards

was also discussed during the revised Model Law drafting;

articles 35 and 36 relate to awards only. No mechanism was

included in the revised Model Law regarding enforcing interim

relief.121 In some quarters it was thought there was no need

for enforcement of such issues. It was argued that the moral

authority of the tribunal suffices to ensure performance.

Yet such powers are given in the Singapore International

Arbitration Centre and International Chamber of Commerce

emergency arbitrator processes relating to the parties.122

Furthermore, Singapore’s International Arbitration Act gives

wide powers to the tribunal to make orders for costs, discovery,

preservation of property, securing sums in dispute, interim

injunctions and to avoid dissipating assets. To provide powers

consistent with party expectation in contemporary ICA, Tunisia

should consider adopting articles 17-17J of the revised Model

Law with the additional provisions of Singaporean law.

Generally, ex parte preliminary orders are permissible

only in exceptional circumstances.123 There are opposing

arguments to tribunals having this power: it is contrary to the

trust and consensus inherent in the ICA process and outcome.

The right to a hearing is breached as one party does not have a

chance to put its case. Furthermore, parties should be equally

treated.124 Sceptics also note that the consensual nature of

arbitration means the tribunal must retain its impartiality and

there is also the question the effective enforcement of ex parte

measures by a tribunal or before a court.125 Some systems take a

strongly pro-court approach and do not permit tribunal ordered

ex parte interim relief. India is one such jurisdiction.126 Others

like Singapore differ notably from the revised Model Law in not

expressly permitting any ex parte interim relief.127

Some commentators argue ex parte orders are compatible

with ICA; due process will be adhered to. Some situations, usually

urgent, justify ex parte hearings to preserve evidence or assets.

The safeguards on the degree of issuance of interim relief are:

at any time the tribunal may modify, suspend or terminate the

order; appropriate security may be requested from the requesting

party for the order;prompt disclosure required from the requesting

party of any change in circumstance; party liability for costs and

damages caused by the order may be required; and an obligation

on the party to tell the court of any termination, suspension

or modification of the interim order given by the tribunal.

Although there are no enforcement powers of a tribunal for ex

parte preliminary orders, a tribunal is likely to take a negative

view of a party not enforcing the order.128 On reflection there

25 • YAR • JULY 10, 2013


should be an explicit mention of the tribunal power to make ex

parte preliminary orders in Tunisian arbitration law. This should

be in parallel to a party right to seek interim relief from the court

on the same criteria where tribunal power would not be effective

for enforcement of an order.

In summary, Tunisian arbitration law reforms on interim

measures should carefully consider adopting the revised ML

articles 17 and 17A-17J with the Singaporean International

Arbitration Act powers provided to the tribunal to order interim

relief. Tunisia may even consider going beyond it in permitting

tribunals and courts to issue ex parte preliminary orders for

case management efficiency.

Conduct of the proceedings

More broadly on procedural matters, the Tunisian law

gives freedom for parties to decide the procedure for arbitration,

failing which the tribunal may decide it.129 This parallels ML

article 24 and article 19(2). Thus Tunisian arbitration law

excludes national procedural rules and rules of evidence.130

Critics of this arrangement do not give due consideration

to the balance articles 63 and 64 paralleling ML articles 18

and 19. The articles preserve due process and equal treatment

respectively.131 Moreover an arbitrator has a duty to render

an enforceable award. More broadly, standards of due process

are the standards at the place of enforcement and that is

not always known in advance when a matter is resolved by

ICA. Due process includes “full opportunity” in articles 63

for a party to present its case. This should be replaced by an

appropriate opportunity to do so.132 This would enable efficient

management of arbitrations in all situations by tribunals and

accord with the English Arbitration Act 1996, a well-used and

often referred to national arbitration law.133

When a party fails to play its part in proceedings there

is a difference between Tunisian article 70 and ML article 25

covering this eventuality. Both articles 70(1) and article 25(a)

state a claimant failing to communicate its statement of claim

results in a tribunal terminating proceedings. Both article 70(3)

and article 25(3) state that if a party fails to attend a hearing

or produce documentary evidence, the tribunal may continue

the proceedings. Articles 70(2) and 25(c) differ regarding the

consequences of the respondent’s failure to communicate his

statement of defence. Tunisian article 70(2) requires the tribunal

to terminate proceedings without it being an admission of

the claimant’s case. ML article 25(b) allows the tribunal the

discretion to continue the case without the failure being an

admission of the claimant’s case. A business-like approach to

resolving the commercial disputes is better accommodated by

the approach in ML article 25(b) which allows termination or

continuation, with continuation not being an admission of the

claimant’s case. This avoids wasting additional time and cost in

further negotiation, arbitration initiation or court action.

Another aspect of arbitration conduct is the use of experts.

The tribunal may in civil law tradition appoint an expert under

the Model Law, but the Model Law does not mention party

appointed experts prevalent in the common law tradition.134

It would be helpful to include in the Tunisian law a provision

enabling party-appointed experts to cater for parties with

that expectation. In tandem, there should be a power for the

tribunal to order the party-appointed experts to convene before

the hearing to establish agreed points and differing views. This

should then be reported in writing to the tribunal.135

Applicable law

In conducting arbitration it is essential for the tribunal

to apply an applicable law to the substantive issues in dispute.

The Model Law uses Washington Convention 1965 wording

to decide applicable law; “such rules of law as are chosen by

the parties”.136 Under the Model Law the tribunal may choose

the law based on the conflict of laws rules it finds applicable.137

Article 28(2) envisages the indirect route of conflict of laws for

finding applicable law by the tribunal.138

It has been argued Tunisian article 73(2) regarding the

law applicable to the merits is more loosely worded than the

Model Law; when required the tribunal chooses a “law” that

is “most appropriate” to the case.139 This opinion ignores

the significance of the term “rule of law” for choosing the

applicability of transnational law and lex mercatoria to the

matter.140

In favour of Tunisian law it may be said that the reference

to law rather than law or rule of law, gives the parties some

certainty as to which applicable law may be chosen by the

tribunal in such circumstances. On balance though, this does

not counter the loss of the option for a tribunal to choose lex

mercatoria or transnational law. These are options that have

grown in sophistication and importance thus viability since

Tunisia’s Model Law adoption and thus an option to choose

a ‘rule of law’ should be included in Tunisian article 73(2).141

Terminating proceedings and making the award

At the end of proceedings under Tunisian law arbitral

hearings must be formally closed by the tribunal as the date of the

closure of proceedings is the date after which challenges for the

removal of arbitrators are no longer permitted.142 It is doubtful

if this adds to procedural efficiency and may even hinder due

process by preventing justified late stage challenges to arbitrators.

Therefore it should be removed in a future law reform.

Matters following the issuing of an award

On turning to issues relating to the award itself, Tunisian

article 79 requires reciprocity of enforcement for applying foreign

awards under the NYC.143 Article 79 is still an improvement

on the previous legislation which had “ambiguous” provisions

regarding recognition and enforcement of foreign arbitral

awards.144 Nevertheless it is questionable today how useful this

reciprocity is with almost universal ratification of the NYC.145

Its amendment should be considered in any future law reform

in light of the number of significant non-NYC ratifying states

in existence at that time, such as neighbouring Libya with

26 • YAR • JULY 10, 2013


which it has a bilateral treaty regarding recognition to which

article VII NYC applies enabling recognition and enforcement

by alternative means to those specified in NYC.146

More broadly, Tunisian articles 79-82 restate the ML

articles 35-36 on recognition and enforcement of arbitral

awards, although it may have been more straightforward to have

used the two article format of the Model Law.147 This two article

structure should be considered in any law reform. ML Article

35(2) sets ‘maximal conditions’ for obtaining enforcement

so the adopting state such as Tunisia may impose less strict

standards for recognition and enforcement.148 Essentially,

article 35 repeats article IV of NYC regarding recognition

and enforcement.149 ML article 36 aligns with NYC article V

regarding grounds for refusal of recognition or enforcement.

The alternative article VII NYV method has already been

mentioned above.150

An award may be enforced in Tunisia if an application

there for set aside fails.151 Set aside must be applied for by a

party within three months of the issuance of the award. This

makes setting aside impossible when it is based on a public

policy ground that does not reasonably become known within

3 months of receipt of the award under Tunisian 78(3), such

as bribery involved in obtaining the award. An amendment is

needed to cater for a limitation of three months after the public

policy issue reasonably became known to the party.152

There are no Model Law provisions regarding what

happens after setting aside of an award. Many national laws are

silent on the subject.153 In Germany under art 1059(5) setting

aside makes the arbitration agreement operative again thereby

allowing the arbitration process to restart.154 Interestingly

Tunisian under article 78(5), where agreed by the parties, the

law allows a court to decide the case on the merits when the

court has set aside the award under article 80(4). If necessary

this can be done by amiable compositeur if that was the parties’

instruction to the tribunal.155 Sanders prefers the novel Tunisian

revival of jurisdiction of the court; it avoids the loss of extra

time and cost to go through arbitration process again.156 What

has not been established is what happens if parties disagree

about applying to court for it to decide.157 Consideration in

that case should be given to the court being given the statutory

power to grant the request on the application of one party.

6. OTHER ISSUES FOR CONSIDERATION IN ARBITRATION LAW REFORM

Despite its generally comprehensive nature, the Model Law

does not cover various issues that parties increasingly encounter

in ICA. These include: public policy; liability of arbitrators and

arbitral institutions; multiparty and multi-contract arbitration;

confidentiality; set off; and costs and fees. Some of the provisions

added by Model Law adopting states to cover these areas were

considered in drafting the Model Law.158 Nevertheless, such

areas were not included for reasons of complexity, controversy or

lack of apparent contemporary need.159 As with the commentary

on the Model Law, the areas selected for discussion have been

included to highlight issues requiring consideration in any reform

of Tunisian international arbitration law.

Set Off

Set off is an important issue for the parameters of statements

of case and for shaping the content of awards. It is not mentioned

in the Model Law nor the Tunisian law, although UNCITRAL

Arbitration Rules 2010 (“2010 Rules”) regulates set off.160 It

has been considered as an area for Model Law revision.161 Set

off ensures efficiency of proceedings between parties taking into

consideration claims and entitlements of the parties more broadly

than solely the initial claims presented to the tribunal. Various

jurisdictions have different approaches to set off: the French article

1290 of the Civil Code applies set off to two countervailing debts,

although French judicial procedure requires the declaration by a

party of an intention to apply set off in a particular case. English

law covers set off in three ways: procedurally; by abatement as a

form of set off available in particular types of contracts for damage

suffered; and as an equitable measure.162 This short survey suggests

set off has very domestic foundations in law.

In contrast, as a procedural set of rules, 2010 Rules

permit set off in connection with the relationship under

scrutiny in the arbitration to enhance the value of the arbitral

award for the parties through its comprehensive coverage of

the parties’ relationship.163 If Tunisian international arbitration

law is to deal with set off, it should do so in this procedural

matter and only permit it no later than the latest statements of

case unless with tribunal permission after consideration of the

circumstances.

Public policy

Continuing the commentary relating to awards, international

public policy for recognition and enforcement respectively are

covered in Tunisian articles 78(2) and 81(2). A distinction should

be drawn between public policy and international public policy.

Both relate to the acceptability of the subject matter for arbitration.

Recent scholarship argues that arbitrability concerns the natural

limitations of arbitration as a means of resolving disputes whereas

public policy focuses upon a more limited area, the prohibitions

to arbitration stipulated in a particular jurisdiction for example

as reflected in ML article 34(2)(b)(ii) and article V(2)(b) NYC.164

International public policy is related to public policy. It is a

reflection of public policy across jurisdictions. Transnational public

policy may be an alternative description of this. This may concern

procedural matters or a substantive matter in dispute. International

public policy is a means of avoiding nebulous public policy that

can be used by national courts to set aside or to reject enforcement

awards which on first glance appear unwelcome on their merits.

Thus an international arbitration award may pass assessment under

international policy scrutiny to be enforced, where as a domestic

award scrutinized under domestic public policy may fall foul of

public policy and not be enforced by the courts.

The Tunisian public policy in international arbitration is

inspired in part by international public policy in pre-1981 French

article 1502 and similar Belgian law.165 With globalisation French

and Belgian courts considered that public policy did not relate to

27 • YAR • JULY 10, 2013


forbidding arbitration from occurring. In this line of thought the

arbitrator remains competent to deal with the matter, but he must

consider public policy. 166 International public policy represents

the common thinking of various jurisdictions and not parochial

obstacles hindering award recognition and enforcement.167 Thus

article 1514 of the current French Code of Civil Procedure now

states, “. . . manifestly contrary to international public policy”. To

indicate a Tunisian openness to recognising and enforcing arbitral

awards, consideration should be given to amending articles

79(2) and 81(2) to the French article 1514 wording so the use of

“manifestly” clearly demonstrates this point.

Costs and fees

A mundane, but important, element for parties, counsel

and arbitration in an award are costs and fees. National

arbitration laws rarely cover fees, costs or apportionment of

costs of proceedings.168 Tunisian law arbitration law does

not do so. This is normally governed by the arbitration rules

adopted.169 Where legislative provisions exist they often

duplicate arbitration rule provisions.170 Sanders proposes a

costs provision for arbitrators so the court can have control of

this if the arbitrators seek a court ruling.171

Such a provision could be inserted in Tunisian law to

enable arbitrators to fix their fees if no provision is made for

this in the arbitral clause or agreement or the arbitration rules

used.172 A survey of law reveals that New Zealand law permits

arbitrators to refuse to deliver the award until their fees are

paid. Hong Kong law permits payment of fees into court if a

tribunal refuses to deliver the award until its fees have been

paid.173 A tax officer of the court will review the fee to decide

a reasonable sum that should be payable. An additional award

may be rendered in Australia, Hong Kong, New Zealand and

Greece if costs of arbitrators are not included in the award.174

Germany and Bermuda repeat article 40(1) of the 1976 Rules

regarding arbitrator cost apportionment, essentially that costs

follow the loser.175 The 2010 Rules in article 42 contain similar

provision, albeit nuanced by the circumstances of the case.

With regard to counsel fees, unless the parties otherwise agree

in German arbitration law a tribunal may allocate between

parties the costs necessarily incurred for “proper pursuit of the

claim or defence” to temper expensive counsel fees.176

This brief survey shows that provision for costs and

fees for arbitrators and counsel fees by the tribunal should be

considered for inclusion in Tunisian law. Arbitrators should be

able to refuse to deliver the award unless they are paid. This

payment could be by payment into court and taxation on the

fees demanded in line with Hong Kong practice. Tunisian use

of Hong Kong practice would be in line with that of a Model

Law adopting state, thus keeping within range of achieving a

high fidelity arbitration law, as would additional adoption of

the 2010 Rules regarding counsel fee apportionment.

Liability of arbitrators, arbitral institutions and arbitrator appointing authorities

Concerning issues surrounding arbitration, the liability

of arbitrators has increasingly received attention in arbitration

scholarship.177 The values of particular cases have grown ever

larger and the expectations of parties with regard to arbitrators

and arbitration institutions is increasingly exacting.178 It

can also be measured in the perceived contemporary claims

culture in many countries, even though arbitration rules often

cover this area.179 Despite provision in arbitration rules, the

liability of arbitrators and arbitral institutions requires careful

consideration as a precautionary measure in any review of

national arbitration law to ensure the jurisdiction remains

viable for arbitrators and arbitral institutions to operate in. It

is desirable to exclude arbitrator liability, institution liability

and appointing authority liability unless an act was done in bad

faith or perhaps a wrongdoing that was intentional.180

The present Tunisian position in article 11 developed the

law by stating duties of an arbitrator: he may not resign unless

there is a valid reason on penalty of payment of damages. In

addition, an arbitrator is to comply with duties within 30 days

otherwise his mandate terminates by resignation or agreement

by the parties.181 The Model Law only refers in article 14 to

acting without ‘undue delay’. To align with the Model Law,

thought should be applied to whether the rigid 30 day limit

should be replaced in Tunisian law with ML article 14(1)’s less

rigid ‘undue delay’.

In terms of national laws there has been much variation

in approach in considering liability.182 Many common law

jurisdictions have inserted a provision on arbitrator liability.183

Particular examples of common law adoptions of the Model

Law that include liability are Australia ‘for fraud in respect of

anything done or omitted’,184 Bermuda where the law states ‘he

may be liable for the consequences of conscious and deliberate

wrongdoing’185 and Malta ‘where his action or omission is

attributable to malice or fraud’.186 These indicate a common

law tendency to address the issue. There is less tendency in

civil law to address the issue. An exception is Peruvian civil

law which states arbitrators are liable for damages caused by

delay or failure to comply with their obligations once they

accept the assignment187 Sanders proposes a good law should

cover both arbitrators and arbitral institutions rather like the

English Arbitration Act 1996 section 29 covering arbitrators

and section 74 covering the institutions.188

A third option exists. Even though the Model Law does

not fully address the liability of arbitrators, arbitral institutions

and arbitrator appointing authorities, the 2010 Rules do provide

some guidance to regulating this area. In these rules liability

is to be limited to liability for wrongdoing in bad faith.189 The

adoption of this approach by Tunisia would enforce its ‘high

fidelity’ factor by close adherence to general UNCITRAL

attempts to tackle arbitration difficulties as well as be consistent

with a benchmark set of international arbitration rules.

Confidentiality

Another issue surrounding arbitration is confidentiality.

There are no confidentiality provisions in the Model Law or

Tunisian law. Nevertheless, confidentiality is a key issue considered

28 • YAR • JULY 10, 2013


by parties when constructing their dispute resolution clauses.190

Variation exists in the approach to confidentiality in

statute, rules and case law. Section 14E of the New Zealand

Arbitration Act 1996 states that court permission is required

for a party to disclose confidential information relating to an

arbitration. Article 28(3) of 2010 Rules states hearings must

be held in camera unless the parties agree otherwise. Yet the

ICC Court regularly publishes awards in full text or sanitised.191

The 2010 Rules in article 34(5) imply a default position for

confidentiality; the award may only be made public by a party

to discharge a legal duty or protect a legal right. The Australian

High Court rejected confidentiality to side with the public

interest.192 A notable Swedish case provided a nuanced view that

confidentiality was procedural in nature and had to be expressly

agreed if confidentiality was to be honoured beyond that limit.193

Leading English judgments side with confidentiality.194

Court proceedings are often public, so legislative provision

for confidentiality is needed unless court procedure contains

in camera hearings anyway.195 Section 22 of the Singapore

International Arbitration Act 2002 and section 16(1) of the Hong

Kong Arbitration Ordinance 2010 state that hearings relating to

arbitrations are not be held in open court unless ordered by the

court on application of a party or, in the Hong Kong case, the

court decides the hearing ought to be in open court.

Arguably confidentiality is best left to a mix of party

autonomy reflected in party agreement, arbitration rules

such as the detailed provisions of World Intellectual Property

Organisation, soft law like that of the International Bar Association

Rules on Taking Evidence as well as national arbitration law.196

To facilitate the Tunisian position any reform should consider

paralleling a position akin to that in the Hong Kong law. Hong

Kong law has the added benefit of the Court deciding upon an

open hearing, which may be of significance where a Tunisian

state entity is party to an arbitration and questions of public

accountability can be addressed through a public court hearing.

Thus the scenarios of public accountability raised in the case

law of Australia, Sweden and England and Wales may be duly

considered by the court when they arise at court in its supervisory

capacity or in enforcement proceedings.197

Multiparty and multi-contract arbitration

Ranging more broadly, multiparty and multi-contract

arbitration are worthy of consideration in Tunisian international

arbitration. Both raise issues of the possibility to consider all issues

together either through the provisions of the arbitral clause or

agreement itself, or in the absence of such provisions in accordance

with the arbitration rules incorporated by reference into the arbitral

clause or agreement. A final, less likely option is to do so through

the terms of the national law of the seat of the arbitration.

There was general agreement that the Model Law should

not deal with third parties, consolidation or multi-contract

arbitration within the UNCITRAL Working Group.198 Yet

consolidation by court order has been introduced in several

UNCITRAL adopting states.199 In California it is “on terms the

court considers just and necessary” on the application of a party

and with consent of all the parties.200 In Georgia (USA) s 9.9.6 of

the Georgia Arbitration Code supplements s 9.9.3 on arbitration

agreement validity by stating that unless the parties have agreed

otherwise a party may apply to court to consolidate proceedings.

In the absence of any agreement the court appoints arbitrators of

the consolidated proceedings. If rules for the old proceedings are

inconsistent for the new consolidated proceeding, the court will

resolve the discrepancies.201 More consensually, North Carolina

allows consolidation with party consent by order of the court

“on terms the court considers just and necessary”. Like Georgia,

29 • YAR • JULY 10, 2013


the court as a consequent action may appoint arbitrators in

the absence of party agreement and decide other matters that

the parties cannot agree so as to create a viable consolidated

arbitration.202 In Hong Kong in an arbitration agreement it is

possible to opt into a discretionary court power to consolidate

proceedings and make consequent orders.203 Court supervision of

consolidation of cases has the advantage of greater enforceability.

In Tunisia case law has developed on consolidation and the

appointment of arbitrators. The court permits incorporation of

third parties into cases, even though it is argued it goes beyond

statutory powers to do so.204

In Australian and New Zealand205 and Floridian law,

consolidation is by the tribunal if all parties agree and the

tribunal determines it is in interests of justice and an expeditious

solution.206 If an arbitral tribunal cannot agree the issue, the

party will will have to go to court.207

In progressive, mainly common law jurisdictions it seems

that the most enforceable method of considering third parties,

case consolidation and multi-contract issues is through the

court “on terms the court considers just and necessary” on

the application of a party followed by orders for appointment

of arbitrators and for procedural matters where required.208

Providing these statutory powers to the Tunisian Court of

Appeal should be carefully considered in any reform of Tunisian

arbitration law. It would acknowledge developments in Tunisian

case law, but clearly set out recognisable and understandable

law for foreign investors, counsel and arbitrators in line with

the role of national arbitration law articulated by Hermann.209

7. CONCLUSIONS: ISSUES TO CONSIDER IN A REVISED TUNISIAN INTERNATIONAL ARBITRATION LAW

It has been noted that by adopting the Model Law Tunisia

ensured its international arbitration law contained generally

recognised arbitration principles. It also ensured it was of good

quality for foreign users in a more technical sense through

reliance on the Model Law travaux préparatoires and the case

law of the Model Law. Yet in the aftermath of the revision of

the Model Law, the 1976 Rules and more recently the political

revolution in Tunisia fuelled by economic aspiration of the

population, it is time to review a dispute resolution mechanism

that is likely to have an important part to play in the enhanced

economic development of Tunisia.

With this in mind, this dissertation has reviewed the

elements of Tunisian arbitration law that warrant consideration

for change in line with the revised Model Law and contemporary

ICA practice worldwide. It has questioned whether Tunisia

after 19 years of Model Law adoption in its international

arbitration law requires a separate domestic arbitration law

to accommodate domestic circumstances. It has queried the

necessity of a definition in article 48(3) of “commercial” if the

arbitration law is intended to cover generally civil and mixed

arbitrations. It suggests revision of Tunisian article 6 to directly

incorporate the broad definition of an arbitration agreement in

writing contained in option 1 of ML article 7 to enhance the

Tunisian law’s high fidelity on this issue, rather than relying on

the Tunisian Code of Obligations and Contracts.

It argues that the efficiency of international arbitration in

Tunisia will increase and be more bespoke to the circumstances

of each case if tribunals may decide whether to continue arbitral

proceedings when there are pending court decisions regarding

the validity of an arbitral clause or agreement or other matters.

Arbitration would also be made efficient by giving a truncated

tribunal the ability to apply to court for consent to continue the

arbitration to render an award. Furthermore, parties should be

given the opportunity to opt out of the entitlement to apply to

court regarding a challenge to an arbitrator, thereby giving the

tribunal greater influence over the management of the case, but

within the consent of the parties. Courts may also contribute

to efficiency and party needs if given the power to fix a time

limit within which an arbitration is to commence, if this has

not already been agreed by the parties.

In terms of interim relief, Tunisian arbitration law has

not embraced the revised ML articles 17 and 17A-17J. In an

era of higher party expectation of interim measures in ICA,

consideration needs to be given to providing ex parte preliminary

orders, interim measures, their appropriate circumstances

and evidential burdens and whether these powers should be

available only to the court or to the arbitral tribunal too. It is

suggested that the powers should be given to the court and the

tribunal. Through the court option, orders or measures relating

to third parties that the tribunal may not have the power to

decide can be considered. This would also fit the free choice

approach of the Model Law regarding the use of the court and

tribunal for supportive measures to the arbitration.

Although a tribunal appointed expert may be the most

efficient method of obtaining expert evidence for the tribunal,

it must be recognised that often parties have already instructed

an expert by the time arbitral proceedings commence.

Therefore sometimes it is more efficient or appropriate for a

tribunal to accept party expert evidence. Although tribunal

powers may exist relating to party experts in some cases through

incorporation of arbitration rules,210 the Tunisian international

arbitration law should contain non-mandatory final resort

provision for party experts to ensure efficient and fair arbitral

proceedings are conducted.

The aim of efficiency would also be obtained by adopting

the Model Law approach in article 25(b) allowing for the

tribunal to decide whether to continue the claimant’s case if

a respondent fails to communicate its statement of defence.

Time is then not lost in additional negotiation, relaunching

arbitration or taking the case to court.

If an award is set aside, Tunisia has a novel and practical

solution in requiring the court to decide the matter on its merits

with the agreement of the parties under article 78(5). This

mechanism could be given greater effect by reform by enabling

a party to appeal to court for such a resolution when the parties

disagree about resolving the matter in court. The court could

then consider if, in the circumstances, it would be appropriate

30 • YAR • JULY 10, 2013


for the court to proceed to decide the dispute.

The quality of arbitral decisions and awards may be

preserved by addressing in any arbitration law amendment the

liability of arbitrators and arbitral institutions. This should

focus upon excluding liability except for wrongdoing in bad

faith. This conveniently aligns Tunisian law with the 2010 Rules

thus providing a framework recognisable and understandable

to foreign parties, counsel, arbitrators and arbitral institutions.

Little benefit appears to derive from the Tunisian

requirement that the tribunal formally closes the arbitral

proceedings. Indeed, it may prevent meritorious late challenges

to arbitrators when information arises at the award writing

phase, so impacting upon the quality of arbitration. This

aspect of Tunisian law should be removed.

Arbitrators make decisions of greater value to parties

by being able to consider consolidated arbitral proceedings

and make consequent orders to achieve them. Therefore the

current court power reflected in Tunisian case law should be

codified on “just and necessary grounds” and available on a

party’s application with the ability to make consequent orders

as in Georgia, USA.

Part of a valuable outcome to parties may be considering

issues of set off. As a procedural law, Tunisian international

arbitration law is able to provide a procedural stage and means

by which set off issues can be raised. It is recommended

consideration is given to incorporating the wording of articles

21(3) of the 2010 Rules to facilitate this at the defence stage

of memorials with tribunal discretion to permit such issues at a

later stage if justified under the circumstances.

The completion of final elements of arbitration cases

may be made easier if, in the absence of provision between the

parties and arbitrators or within arbitration institutional rules

there is provision for payment of costs and fees in Tunisian

law. Disputed arbitrator fees could be resolved by arbitrator

application to court for taxation, meanwhile his award is

withheld until payment is made of the reasonable fees decided

by the court. An explicit power for the tribunal to consider the

necessity and allocation of counsel fees within a partial, interim

or final award should be made in the arbitration law paralleling

tribunal powers in the 2010 Rules.

The quality of arbitrations may also be enhanced by the

arbitrator appointments function being transferred from the

court to an arbitral institution as an appointing authority. The

quality of the conduct of arbitration may also be enhanced

by amending article 63 by removing “full opportunity” to

“appropriate opportunity” for a party to present its case so that

time in arbitral hearings is focused.

Tribunals may be able to better serve parties and the

issues upon which they are called to decide by being able to

consider rules of law as well as law when deciding applicable law

in the absence of party determination of the issue. Therefore

an arbitral law reform should consider amending article 73(2)

to that effect.

With regard to ease of recognition and enforcement,

Tunisian articles 79-82 should be rewritten to more closely

parallel the division of issues in ML articles 35 and 36 for ease of

recognition and understanding by foreign users. Consideration

should also be given to removing the requirement for reciprocity

of enforcement in the Tunisian law pursuant to Tunisia’s

ratification of the NYC. Such a statement would indicate

Tunisia’s unequivocal embrace of international investment.

In terms of setting aside after provision of the award,

to ensure full weight is given to any public policy matter, and

thus to ensuring the legitimacy of recognising arbitral awards

in Tunisian society, the time limit for making an application for

set aside should be amended from 3 months from the date of

the award to include three months from the date of any public

policy matter reasonably being known to a party. An effect

of this may be to enhance the ability of the courts to enforce

public policy matters such as curtailing corruption.

A further point on public policy is to reinforce in Tunisia’s

international arbitration law that it refers to international public

policy and to avoid a case by case extension of its meaning

for domestic benefit. This may be done by continuing the

Tunisian affinity to French law on international public policy

by incorporating into Tunisian international arbitration law the

wording in French article 1514 “ . . . manifestly contrary to

international public policy”.

The confidentiality of proceedings and awards is an

important issue in international arbitration. It is often covered

by arbitration rules, however a non-mandatory position under

Tunisian international arbitration law would assist parties. It

is suggested reforms follow Hong Kong law in which court

hearings relating to arbitrations are confidential unless ordered

by the court on the application of a party, or the court of its

own volition decides a matter should be heard in public. This

gives the court an option of delivering justice in public when it

considers it necessary, but otherwise respecting confidentiality.

A reform of the Tunisian arbitration law would assist in

fostering a favourable investment climate. The 1993 Tunisian

law is Model Law based with a French law foundation. It

is a good start: it is a law with many elements recognisable

and understandable to foreign participants in ICA in Tunisia

through recognition of elements of highly regarded French

arbitration law and the Model Law, but the law is 19 years

old. Much has developed in the practice of ICA in that time.

After 19 years of the law and such a major political event as a

revolution, it is time to review the Tunisian arbitration law.

Possible reforms have been discussed then summarised in

this dissertation. If considered in detail and implemented in a

reformed arbitration law, these reforms would ensure Tunisia’s

Henry Clarke, Associate, Construction and Projects

Group, Clyde and Co, Dubai and Riyadh

31 • YAR • JULY 10, 2013


1. This article derives from study of international commercial arbitration at the School of International Arbitration, Queen Mary University of London whilst on the Centre of Commercial Studies full time LLM programme 2011-2012.

2. See such law firms on Legal 500 http://www.legal500.com accessed on 20 July 2012. The journals include Arbitration International (1985-), ASA Bulletin (1983-), Journal of International Arbitration (1984-) and Revue d’arbitrage (1986-) amongst many others. The courses include the Masters in International Dispute Settlement associated with the University of Geneva, the Masters specialisation at the University of Stockholm as well as the expansion of the School of Arbitration at Queen Mary’s University of London as examples within Europe.

3. African Development Bank Economic Brief, 11 March 2011_The Revolution in Tunisia: Economic Challenges and Prospects_1. <http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/North%20Africa%20Quaterly%20Analytical%20Anglais%20ok_North%20Africa%20Quaterly%20Analytical.pdf> accessed 1 July 2012. See also B Whitaker_How a man setting fire to himself sparked an uprising in Tunisia <http://www.guardian.co.uk/commentisfree/2010/dec/28/tunisia-ben-ali> last visited on 10 July 2012).

4. For Tunisian international arbitration law in English see S Kallel, ‘The Tunisian Law on International Arbitration’, Arbitration Materials 369-391.5. S Lieberman and others, ‘UNCITRAL (United Nations Commission on International Trade Law): its workings in international arbitration and a new model conciliation law’,

(2004-2005) 6 Cardozo Journal of Conflict Resolution 73, 74. 6. E Horvath, ‘A Handy Tool for the Settlement of International Commercial Disputes’ (2008-2009) Pennsylvania State Inernational Law Review, 783, 785.7. Lieberman (n4) 78; G Herrmann, ‘UNCITRAL’s Work Towards a Model Law on International Commercial Arbitration’, (1983-1984) 4 Pace Law Review 537; Horvath (n5) 7858. Lieberman (n4) 799. Herrmann, ‘UNCITRAL’s Work Towards a Model Law on International Commercial Arbitration’ (n6) 538.10. Ibid 542-543; C A Esplugues and M E McNerney, ‘International Commercial Arbitration: The UNCITRAL Model Law’ (1986) 9 B. C. Int’l & Comp. L. Rev. 47.11. Esplugues and McNerney (n9) 48.12. Herrmann, ‘UNCITRAL’s Work Towards a Model Law on International Commercial Arbitration’ (n6) 544.13. UNCITRAL, The UNCITRAL Guide: Basic facts about the United Nations Commission on International Trade Law, United Nations Publications: Vienna, 2007 14-15.14. P Sanders, Quo Vadis Arbitration? (Kluwer Arbitration: The Hague 1999) 83.15. Lieberman (n4) 84.16. M F Hoellering, ‘The UNCITRAL Model Law on International Commercial Arbitration’ (1986) The International Lawyer 328, 329.17. Hoellering (n15), 328-329; Horvath (n5) 785.18. Herrmann, ‘UNCITRAL’s Work Towards a Model Law on International Commercial Arbitration’ (n6) 546.19. H Malouche, ‘A Brief Survey of the Tunisian Arbitration Code’, ICC Bulletin (1993) 63, 64; H D Gabriel, ‘The advantages of soft law in international commercial law: the role

of UNIDROIT, UNCITRAL, and The Hague Conference’, (2008-2009) Brooklyn Journal of International Law 663, 659.20. UNCITRAL, The UNCITRAL Guide: Basic Facts (n12) 16.21. Gabriel (n18) 665.22. Gabriel (n18) 658-66823. G Herrmann, ‘The UNCITRAL Arbitration Law: a Good Model of a Model Law’ Uniform Law Studies, (1998) 483, 489.24. Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 486-487.25. Ibid 487.26. Ibid 488; Hoellering (n15) 339.27. Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 488.28. Ibid 488; Lieberman (n4) 82; Hoellering (n15), 328; Sanders, Quo Vadis Arbitration? (n13) 147; A Broches, ‘A Model Law on International Commercial Arbitration?

A progress report on the work undertaken within the UN Commission on International Trade Law’, (1984-1985) George Washington Journal of International Law and Economics, 79, 80

29. Lord Dervaird , ‘Scotland and the UNCITRAL Model Law’ Arbitration International (1990) 6:1 ) 63 at 68 citing ‘Scottish Advisory Committee: Report to the Lord Advocate on the UNCITRAL Model Law on International Commercial Arbitration’, Stationary Office 1989.

30. See <http://www.uncitral.org/uncitral/en/technical_assistance_coordination.html> accessed on 10 July 2012.31. Sanders, Quo Vadis Arbitration? (n13) 81.32. Ibid 81.33. Herrmann, ‘UNCITRAL’s Work Towards a Model Law on International Commercial Arbitration’ (n6) 545.34. Ibid 489, 545.35. Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 491.36. Dervaird (n28) 67.37. Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 492, 499.38. Kerr, ‘Arbitration and the Courts: The UNCITRAL Model Law’ (1985) 34 International and Comparative Law Quarterly 1, 6. 39. P Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ Arbitration International (1995) 1, 36.40. P Sanders ‘UNCITRAL’s Model Law on International and Commercial Arbitration: Present Situation and Future’ (2005) Arbitration International 21:4 443; Herrmann ,

‘The UNCITRAL Arbitration Law’ (n22) 490; Horvath (n5) 789.41. UNCITRAL, 2012 Digest of Case Law on the Model Law on International Commercial Arbitration (1985 with amendments as adopted in 2006) United Nations

Publications: Vienna 2012.42. Esplugues and McNerney (n9) 47.43. Article 1(1) Model Law44. Herrmann, ‘UNCITRAL’s Work Towards a Model Law on International Commercial Arbitration’ (n6) 548. 45. Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 486, 490.46. Arabic, Mandarin Chinese, English, French, Russian, Spanish47. H Malouche, ‘A Brief Survey of the Tunisian Arbitration Code’ (1993) ICC Bulletin 63, 63; Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 486, 489; Hoellering (n15) 338.48. Horvath (n5) 786; Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 492; Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 36.49. Sanders, Quo Vadis Arbitration? (n13) 84.50. Horvath (n5) 787.51. H M Al-Baharna, ‘International Commercial Arbitration in a changing world’ (1994) 9 Arab L.Q. 144 52. Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 485.53. Ibid 486; Horvath (n5) 785, 790; H M Holtzmann, ‘The Conduct of Arbitral Proceedings’ in UNCITRAL’s Project for a Model Law on International Commercial

Arbitration, ICCA-Congress Series No 2 (1984) 125, 159.54. Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 499.55. A H El Ahdab and J El Ahdab , ‘Arbitration in Tunisia’ in A H El Ahdab and J El Ahdab (eds) , Arbitration with the Arab Countries, (Kluwer Law International 2011) 731.56. Ahdab and Ahdab (n54) 73157. F Kutty, ‘The Shar’ia Factor in International Commercial Arbitration’, International Journal of Arab Arbitration (2009) 63, 107.58. Ibid 108.59. K Qureshi, ‘Cultural sensitivity and international arbitration,’ International Journal of Arab Arbitration (2009) 1:2, 42.60. Ibid 45.61. Ahdab and Ahdab (n54) 733; Law No 93-42 of 26 April 1993; Sanders, Quo Vadis Arbitration? (n13) 82; Malouche (n46) 63.62. J-L Delvolvé , G H Pointon, et al, French Arbitration Law and Practice: A Dynamic Civil Law Approach to International Arbitration (Second Edition, Kluwer Law

International: the Hague 2009) 6-7.63. Malouche (n46) 64.64. Ibid 64; Kallel (n3) 369. The reform was also influenced by Belgian and Swiss arbitration law – see S Carmeli and S Feriani, ‘Tunisia’ in G De Palo and M B Trevor (eds),

Arbitration and Mediation in the southern Mediterranean Countries, 2009 Kluwer Law: The Hague 163.65. A Ouerfelli, ‘Recent Developments of Arbitration Law and Practice in Tunisia’ ASA Bulletin (2011) 29:2 296. 66. Malouche (n46) 63; Kallel (n3) 369; Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 6; Sanders, Quo Vadis Arbitration? (n13) 98.67. Sanders, Quo Vadis Arbitration? (n13) 92.68. Ibid 96.69. Ibid 99.70. Ibid 92.71. Esplugues and McNerney (n9) 49; Hoellering (n15) 329; Herrmann, ‘UNCITRAL’s Work Towards a Model Law on International Commercial Arbitration’ (n6) 54872. Kallel (n3) 370 and E Al Tamimi, The Practitioners Guide to Arbitration in the Middle East and North Africa, Juris: New York 2009 463.73. Malouche (n46) 6574. Sanders, The Work of UNCITRAL on Arbitration and Conciliation (2004) Kluwer Arbitration: The Hague 67.

32 • YAR • JULY 10, 2013


75. Ibid 67.76. Ibid 63; Broches (n27) 83; Esplugues and McNerney (n9) 50; Lieberman (n4) 85; Malouche (n46) 64.77. Sanders, The Work of UNCITRAL on Arbitration and Conciliation (n73) 67.78. Ibid 71.79. Ibid 67.80. Ahdab and Ahdab (n54) 737. 81. See text relating to footnotes 24 and 37.82. Esplugues and McNerney (n9) 54.83. Tunisian articles 61 and 62.84. Kallel (n3) 372; Sanders, Quo Vadis Arbitration? (n13) 109.85. J K Shafer, ‘New solutions for interim measures of protection in international commercial arbitration: English, German and Hong Kong law compared, Electronic Journal of

Comparative Law 2:2 27-29.86. In France a court only reviews an arbitration agreement if the arbitration has not yet commenced, and if it does review it, it will refer it to arbitration unless it is manifestly null

(article 1458 Code of Civil Procedure). In England under s32 of the English Arbitration Act a limited right of review exists by a court. A fuller review exists under the s4 of the US Federal Arbitration Act.

87. As argued for the Model Law. See Sanders, ‘UNCITRAL’s Model Law on International and Commercial Arbitration: Present Situation and Future’ (n39) 448 and 467.88. Sanders, Quo Vadis Arbitration? (n13) 105; Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 494.89. Tamimi (n71) 465.90. Section 8(3)(a)(ii) International Arbitration Act 2008 of Mauritius.91. For a list of these see Tamimi (n71) 459-460; Carmeli and Feriani (n63 )178-180. 92. Kallel (n3) 373.93. Ibid 371.94. Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 495.95. Broches (n27) 87.96. Ahdab and Ahdab (n54) 748; Sanders , ‘UNCITRAL’s Model Law on International and Commercial Arbitration: Present Situation and Future’ (n39) 477.97. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 176.98. Ibid 176. See article 17(2) Rules of the Arbitration Institute of the Stockholm Chamber of Commerce and article 12 of the London Court of Arbitration Rules.99. Article 61(3); Malouche (n46) 67; Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 15.100. S M Chao and S Menon, ‘Reforming the Model Law Provisions on Interim Measures of Protection’ (2006) Asian Intl Arb J 5.101. Lieberman (n4) 9.102. Broches (n27) 86; Chao and S Menon (n99) 2.103. Sanders, Quo Vadis Arbitration? (n13) 111; Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 100; Malouche (n46) 67.104. Tamimi (n71) 471.105. Ahdab and Ahdab (n54) 751.106. Malouche (n46) 66.107. Ibid 66.108. See the arbitration laws of China (article 68), Italy (article 818) and Argentina (article 753) for example.109. Chao and Menon (n99) 22.110. Ibid 2.111. Ibid 5.112. Ibid 3.113. Esplugues and McNerney (n9) 57; Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 99.114. Chao and Menon (n99) 6.115. Lieberman (n4) 9.116. Chao and Menon (n99) 7.117. Article 17(2) Model Law.118. Model Law article 17A(1).119. Article 17(2)(a) Model Law.120. Chao and Menon (n99) 7-9; case law typical of this view: Blumenthal v Merrill Lych, Pierce, Fenner, Smith Inc (1990) 910 F2d 1049; Publicis Communication and Publicis

SA v True North Communications Inc (2000) 206 F 3d 725 XXV YBCA 1152121. Lieberman (n4) 93; Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 99.122. See Rule 26.2 and Schedule 1 to SIAC Arbitration Rules 2010; Article 29 and Appendix V ICC Rules of Arbitration 2012.123. Chao and Menon (n99) 10.124. Ibid 10.125. Ibid 15.126. Chao and Menon (n99) 25; Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 65.127. Section 12, Singapore International Arbitration Act 2012.128. Chao and Menon (n99) 14.129. Article 64(2)130. Al-Baharna (n50) 153.131. Esplugues and McNerney (n9) 53.132. Sanders , ‘UNCITRAL’s Model Law on International and Commercial Arbitration: Present Situation and Future’ (n39) 453-454, 468.133. S 33(1)(a) English Arbitration Act 1996.134. Ahdab and Ahdab (n54) 753.135. Akin to a suggestion for the Model Law in Sanders , ‘UNCITRAL’s Model Law on International and Commercial Arbitration: Present Situation and Future’ (n39) 459, 468-

469; Model Law article 26 and Tunisian article 71.136. Broches (n27) 90.137. Sanders, The Work of UNCITRAL on Arbitration and Conciliation (n73) 117.138. Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 493.139. Malouche (n46) 67.140. Lieberman (n4) 87; Herrmann , ‘The UNCITRAL Arbitration Law’ (n22) 494.141. See J D M Lew, L A Mistelis and S M Kröll, Comparative International Commercial Arbitration, Kluwer Law International: The Hague 2003: 453-461.142. Article76(2).143. Tunisia signed the NYC in 1967.144. Kallel (n3) 375.145. Ahdab and Ahdab (n54) 767.146. Ibid 480.147. Malouche (n 46) 68.148. Herrmann, ‘UNCITRAL’s Work Towards a Model Law on International Commercial Arbitration’ (n6) 563; Hoellering (n15) 338.149. Sanders, Quo Vadis Arbitration? (n13) 122.150. Broches (n27) 93; Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 179.151. Malouche (n46) 68.152. As argued by for the Model Law in Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 128.153. Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 22.154. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 132.155. Kallel (n3) 374; Malouche (n46) 68; Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 22.156. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 133.157. Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 23.158. Sanders, Quo Vadis Arbitration? (n13) 123.159. H M Holtzmann and J E Nauhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary (TMC Asser

and Kluwer: The Hague and Boston 1989) 1118.

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160. Articles 21(3) and 22.161. Tamimi, (n71) 473.162. C Fountoulakis, Set Off Defences in International Commercial Arbitration: A Comparative Analysis, Hart: Portland 2011 216-228.163. Article 21(3).164. S L Brekoulakis, ‘On arbitrability: persisting misconceptions and new areas of concern’, in L Mistelis and S Brekoulakis (eds), Arbitrability: International and Comparative

Perspectives (2009) Kluwer Law International: The Hague 20.165. ‘If the recognition or execution is contrary to international public policy’, article 1502; Sanders, Quo Vadis Arbitration? (n13) 118; Malouche (n46) 68.166. A Ouerfelli, ‘Lights on the Tunisian Case Law and the Application of Public Policy in Arbitration’ Intl J of Arab Arb 51, 52167. Ibid 54.168. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 148, 151 and 154.169. Ibid 145.170. Sanders, Quo Vadis Arbitration? (n13) 128.171. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 155.172. Holtzamann and Nauhaus (n158) 1119.173. An idea set out relating to the Model Law in Sanders, ‘UNCITRAL’s Model Law on International Commercial Arbitration: Present Situation and Future’ (n39) 473.174. Ibid 473.175. Ibid 473.176. Section 1057.177. Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 34 178. See the parallel arbitrations: Yukos Universal Ltd (UK – Isle of Man) v Russian Federation; Hadley Enterprises (Cyprus) v Russian Federation; Veteran Petroleum Trust

(Cyprus) v Russian Federation accessed on 19 July 2012 at http://www.encharter.org/index.179. Sanders, Quo Vadis Arbitration? (n13) 149-150.180. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 165.181. Tunisian Article 59.182. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n 73) 161.183. Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 35.184. Section 28185. Section 34186. Section 20(3)187. Article 16(2); Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 35.188. Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 474.189. Article 16.190. 2010 International Arbitration Survey: Choices in International Arbitration, Queen Mary and White and Case 3, 29-31.191. Horvath (n5) 789.192. Esso Australia Resources and others v The Honorable Sidney James Plowman and others [1995] 193 CLR 10.193. Bulgarian Foreign Trade Bank v AI Trade Finance [2001] XXVI Ybk Comm Arb 291194. Ali Shipping Corporation v Shipyard Trogir [1998] 1 Lloyd’s Rep 643; Department of Economics Policy and and Development of the City of Moscow v Bankers Trust Co

[2005] 2 QB 207.195. Horvath (n5) 789.196. Sanders , ‘UNCITRAL’s Model Law on International and Commercial Arbitration: Present Situation and Future’ (n39) 476.197. See footnotes to 191 to 195.198. Sanders , ‘UNCITRAL’s Model Law on International and Commercial Arbitration: Present Situation and Future’ (n39) 471.199. Ibid 471.200. ss 1297.272 Californian Code of Civil Procedure.201. Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 31.202. s 569.11 North Carolina Revised Uniform Arbitration Act.203. Section 99 referring to sections 1 and 2 of Schedule 2 of the Hong Kong Arbitration Ordinance 2010.204. For commentary see Ouerfelli, ‘Recent Developments of Arbitration Law and Practice in Tunisia’ 304-305.205. Sanders, ‘UNCITRAL’s Model Law on International and Commercial Arbitration: Present Situation and Future’ (n39) 471.206. s684.12; Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 30.207. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 145; see s 4 New Zealand Arbitration Act 1996.208. Sanders, ‘Unity and Diversity in the Adoption of the Model Law’ (n38) 31.209. See text to footnote 24.210. Article 27 of the 2010 Rules or articles 22, 23 and 25 of the International Chamber of Commerce International Court of Arbitration Rules 2012

34 • YAR • JULY 10, 2013


MOTIVATION OF ARBITRAL AWARDS: A FEW NOTES

By Duarte Gorjão Henriques

“Decide promptly, but never give any reasons.

Your decisions may be right, but your reasons

are sure to be wrong.”

William Murray, 1st Earl of Mansfield

I. Giving reasons for any judicial, administrative

and even arbitral decision comes to our mind almost as an

intuitive requirement for such decisions and seems to be a

natural reflection of elementary principles of any rule of law.

Specifically in the arbitration context, motivating an award

enables the parties to understand the reasoning of the award,

persuades the parties to comply with it and helps to ensure the

award’s enforceability.

For the Portuguese legal culture and judicial system it

is rather unquestionable and patently obvious that any given

decision, being a judicial or an arbitral one, shall state its reasons

as any person or persons affected by such decision is entitled to

know exactly what the respective grounds are. Like the legal Latin

proverb stated, a decision has the power to turn white into black

and square into circle (‘facit de albo nigrum aequat quadrata

rotundis’) and as so, any person subject to that kind of change

should know exactly why the colour or shape has changed.

Somehow conversely there was a tradition that could be

found within some jurisdictions, some statutes on international

arbitration and also among some legal commentators, according

to which grounding and motivation was not required in order

to ensure a valid and enforceable award. Lord Mansfield’s

quote above is the reflection of this legal tradition and we

would easily concede to this point of view if we would thought

of the single and conspicuous advantage of having decisions

without motivation: if no motivation was required, no reason

or doubt would arise to substantiate an appeal and the decision

would be by itself peacefully sufficient to settle any dispute.

And this would be even more true if we thought of one of the

general and primarily rules of arbitration, which is precisely the

absence of appeal (at least by default).

But disregard motivation of the award has the enormous

danger of allowing the confusion between the service of

justice (or the settlement of disputes if we should so limit the

role of arbitration) and the individual discretion or even the

arbitrariness, specially when the arbitral tribunal may decide the

dispute “ex aequo et bono”. This is the reason that the motivation

of any decision is considered as an aspect of the right to a

‘fair trial’ according to Art. 6 of the European Convention on

Human Rights and is also reflected in various Constitutional

Laws, namely the Constitution of the Portuguese Republic

(Art. 205, par. 1). This principle extends not only to judicial

35 • YAR • JULY 10, 2013


decisions but also to administrative decisions and there is no

reason for being inapplicable to arbitral awards.

Accordingly, that tradition is being progressively

abandoned giving room to a trend on recent statutes of

international arbitration and recent arbitration laws where

the requirement of motivation of the award can be found.

For example, one can find such requirement under the

1961 European Convention on International Commercial

Arbitration, under the Belgian Law, under the German Law and

even under the English 1996 Arbitration Act. Giving a glance

at the rules of arbitration of some institutionalized centres of

arbitration, reasoning is required under the ICC 2012 Rules

(Art. 31, par.2), under the Swiss Chambers of Commerce

Association rules (Art. 32, par. 3), under the LCIA rules (Art.

26.1), under the AAA- ICDR Arbitration rules (Art. 27.2) and

under the SCC rules (Art. 36, par.1) among others.

II. The Portuguese Law is no exception to this

understanding. As a matter of fact, one can also find the

reasoning requirement under the Portuguese Civil Procedure

Code (Art. 668, par. 1, al. b) and Art. 158) and more particularly

under the new Portuguese Arbitration Act (Law No. 63/2011,

of December 14, 2011, simply “LAV”). However, also reflecting

a general trend, the “LAV” admits that the parties may agree

to dispense with reasons. According to Art. 42, par. 3 of the

“LAV”, ‘the award shall state the reasons upon which it is

based, unless the parties have agreed that no reasons are to be

given or the award is rendered on the basis of an agreement of

the parties under article 41’.

Reasoning is therefore required by default and the absence

of motivation, when the parties have not agreed to dispense

with reasons, is a specific and clear ground for annulment of

the arbitral award: ‘an arbitral award may be set aside by the

competent State court only if […] vi) the award was made in

violation of the requirements set out in article 42, paragraphs 1

and 3’ – cfr. Art. 46, par. 3, a) of the “LAV”.

The first cited legal provision of “LAV” matches exactly

the Art. 31 (2) of the UNCITRAL Model Law on International

Commercial Arbitration (2006 amendments) but under the

Model Law, absence of motivation is not an express ground

for set aside an award or even to refuse the recognition of an

arbitral award (cfr. Art. 34 and Art. 36 of the Model Law).

Nevertheless it is crystal clear that any arbitral award

drawn up under and submitted to the “LAV” shall state the

reasons upon which is based. This conclusion applies both

to “domestic” arbitrations and to international arbitration

procedures having its place in Portugal : ‘the provisions of

this Law on domestic arbitration shall apply to international

arbitration, with the necessary adjustments’ (par. 2 of Art. 49

of the “LAV”). Thus, no doubts arise concerning the necessity

of motivating any arbitral award subject to the Portuguese Law

(both domestic and international arbitrations held in Portugal).

The question remains as to the foreign arbitral awards that

are subject of a request for recognition and enforcement procedures

in Portugal. This is the key issue that I wish to address in this

article, which will be therefore related to determine the extension

of the reasoning required, if any, under the Portuguese law.

III. We shall firstly look at the Portuguese legal regime

concerning the recognition and enforcement of foreign arbitral

awards. This legal regime is primarily set out in the “LAV”.

The Art. 55 of the “LAV” provides that ‘without

prejudice to the mandatory provisions of the 1958 New York

Convention on the Recognition and Enforcement of Foreign

Arbitral Awards, as well as to other treaties or conventions that

bind the Portuguese State, the awards made in arbitrations

seated abroad shall only be effective in Portugal, regardless

of the nationality of the parties, if they have been recognized

by the competent Portuguese State court, under the present

chapter of this Law”.2

There is also a legal provision foreseeing the grounds

for the refusal of the recognition and enforcement of foreign

arbitral awards (Art. 56 of the “LAV”) which is identical to the

Art. 36 of the UNCITRAL Model Law and similar to the Art.

V of the 1958 New York Convention on the Recognition and

Enforcement of Foreign Arbitral Awards (“NYC 1958”).

However, none of these provisions addresses the question

of lack or insufficiency of reasoning as an explicit and specific

ground to refuse recognition and enforcement of an arbitral

award.

Furthermore, there is a peaceful understanding that

the legal provisions concerning the refusal of recognition and

enforcement of arbitral awards set out an exhaustive list of the

grounds for that refusal.3 The legal provisions of the Portuguee

“LAV” (Art. 56) are no exception to this understanding.4

Notwithstanding, looking at the range of possible

grounds for refusal of the recognition and enforcement of the

award provided for at the Art. 56 of the “LAV”, there are two

possible paths to explore, although none of them seems to be

solid ground at first sight.

The first one would be to consider that the absence of

motivation entails the violation of the principles of due process.5

The second would be to consider this failure as a breach of

public policy principles.

Considering the lack of reasoning as a breach of the

principles of due process is certainly a long shot with too many

shortcomings. In fact, the principles of due process are mostly

related to the right of both parties being treated equally and

have an equal chance to fairly and properly be heard during

the course of the proceedings (presenting its factual and legal

arguments in an adversarial manner) which clearly does not

have any connection with the award itself and the motivation

behind it. As this issue has been clearly place ‘[d]ue process

should not be confused with the requirement that arbitrators

give reasons for their award. (…) the failure to give reasons is

not in itself contrary to the principle of due process”.6

36 • YAR • JULY 10, 2013


This ‘due process’ theory does not seem to be a reasonable

argument to sustain.

IV. On the other hand, approaching the possible breach of

public policy principles would justify by itself a deeper analysis,

which is not within the scope of this article. Therefore, I will

limit myself to summarize some short ideas.

First of all, one should pay particular and careful attention

to the specific wording of the “LAV”.

The Art. 56, par. 1 of the “LAV” provides that ‘Recognition

and enforcement of an arbitral award made in an arbitration

taking place in a foreign country may only be refused (…) b) If

the court finds that: (…) ii) The recognition or enforcement of

the award would leads to a result clearly incompatible with the

international public policy of the Portuguese State.’

In this text there are some key words that I would like to

stress: ‘may only be refused’; ‘would lead to a result’; ‘clearly

incompatible’; and ‘international public policy’.

“May only be refused”, I should stress once again, entails

the conclusion that we are facing an exhaustive list of possible

grounds for the refusal of the recognition and enforcement.

But besides that, this conclusion also leads to a restrictive

interpretation of any of the provided grounds for the refusal.

All possible grounds as provided by this legal provision must

not be regarded with any broad meaning and wideness must

not be allowed. Even the breach of public policy, which has

a broad and vague scope by nature, should be construed and

interpreted with restrictions.

‘Would lead to a result’, establishes a direct connection

to the final result or determination of the award not the

logic process of construing and producing such award. What

should be regarded as producing a result (clearly incompatible

with the international public policy of the Portuguese State) are the

contents of the award, more precisely the dispositive part of the

award. What is able to produce a certain result is the effective

determination of the issues in dispute, not the reasons (or the

absence of reasons) of such determination.

‘Clearly incompatible’, in the sense that the incompatibility

shall be ‘manifest’, ‘notorious’ or even ‘egregious’. Any

incompatibility does not suffice. It must be a notorious one.

Finally, the result of the award must be incompatible with

the ‘international public policy’ of the Portuguese State. The

international public policy of a State is by nature narrower than

the domestic public policy as the latter comprises the former.

At least they are different. As Albert van den Berg wrote,

The distinction between domestic and international

public policy means that what is considered to

pertain to public policy in domestic relations does not

necessarily pertain to public policy in international

relations. According to this distinction, the number

of matters considered as falling under public policy in

international cases is smaller than that in domestic ones.

The distinction is justified by the differing purposes of

domestic and international relations.7

37 • YAR • JULY 10, 2013


Therefore, any approach to a possible breach of the

international public policy of the Portuguese State necessarily

entails a more restrictive assessment, to which is predominant

the consideration of the purposes and principles of the

international relations and international commerce.

Thus, the question that needs to be asked is whether

or not the lack of motivation of a foreign award necessarily

implies a breach of those purposes and principles (better said,

leads to a result violating those purposes and principles). And

is it clearly incompatible?

Considering those key points, I think that the lack

of motivation of a foreign award shall not produce a “clear”

incompatibility with the international public policy of the

Portuguese State. This understanding is broadly accepted:

The courts have likewise held that other procedural

rules are not matters of international public policy.

This is the case of the requirement that the arbitrators

should give reasons for their award. The ‘Cour de

Cassation’ held in one case that the failure to give reasons

is not “in itself contrary to the French understanding

of international public policy.” It is only where the law

applicable to the procedure or the arbitration rules stipulate

that reasons must be given to that non-compliance with

such requirement would justify the award being set aside

or refused enforcement, on the grounds that the arbitrators

failed to comply with their brief.8

Although it may not be a decisive argument, the fact is

that allowing a broad perspective and understanding of the public

policy is capable of open the door to discuss and review the merits

of the dispute which is a result that clearly has to be avoided.

On the other hand we might well consider the strength

that the international public policy may lay on this issue. It is

quite peaceful the understanding that public policy is considered

as a certain set of principles and legal provisions of an economic,

cultural, social, ethical and legal nature, being of fundamental

concern to the state and to the whole society. If those principles

and provisions are related to the relations between entities from

different countries or to the international trade in a general sense,

we may refer it as ‘international public policy’. Due to the nature

of the interests involved in such provisions (of public policy) it is

understood that those provisions cannot be derogated nor even

waived by the parties or the respective rightholder. But the fact is

that under the Portuguese Law, despite the fact that ‘motivation’

is a requirement that may find a constitutional harbor, arbitral

awards may not require their reasoning. The parties may

dispense with motivation (as seen above). By mutual consent,

it is true, but in any case they may dispense with. Which leads

us to the conclusion that ‘motivation’ is not of the same nature

or relevance as the interests beneath the public policy principles

and rules. And if this is accurate about domestic arbitration and

‘domestic’ arbitral awards more has to be about foreign arbitral

awards. There’s no reason here to treat differently domestic and

foreign arbitral awards.

Again, I don’t think that the principles and rules of

international public policy may set out a requirement of

motivating any arbitral award.

V. One should assert that under the “LAV” legal provisions

and specifically under the provisions for the recognition and

enforcement of foreign arbitral awards, lack of motivation is

not a ground for refusal such recognition and enforcement.

The Portuguese “LAV” intended to draw a parallel with

the “NYC 1958” where the absence of reasoning is not a ground

for refusal of foreign arbitral awards. Hence, the main issue that

we should assess here is whether the foreign award was made

and is valid and binding according to the law that applies to

the arbitration proceedings (“lex loci arbitri”). If the award was

not made according to those provisions, the award may well

be subject to an annulment law action in the state court of the

place of arbitration and such legal action will then be a ground

to refusal of recognition and enforcement under the Art. 56,

par. 1, a), v), of the “LAV”, even with the option of staying

the recognition or enforcement proceedings (cfr. the Art. 56,

par. 2 of “LAV”). If the “lex loci arbitri” allows awards with no

reasoning one should reasonably raise the question of whether

should the court of recognition or enforcement demand such

requirement. And I think that it should not.

In my opinion, this is the reasoning underlying the

“LAV’s” recognition and enforcement of foreign arbitral awards

legal framework, which tends to disregard such requirement in

what foreign arbitral awards are concerned.

VI. Nevertheless, we may reasonably discuss another

argument to consider the absence of reasoning as a ground

for refusal of recognition and enforcement of foreign arbitral

awards. This argument is found outside the legal framework

of the “LAV” and is of a constitutional nature. As above

mentioned, the Art. 205, par. 1 of the Constitution of the

Portuguese State provides that ‘court decisions that are not

merely administrative in nature shall set out their grounds in

the form laid down by law.’

Once again, the scope of this article will just allow me to

line out very short ideas, mostly collected from the strict literal

sense of this constitutional provision.

This constitutional provision grants the law (‘ordinary

law’ as we may categorize it under the Portuguese legal system)

the power to lay down ‘the how’ or ‘the manner’9 in which the

motivation of court decisions is required which means that a

certain amount of freedom was granted to the ‘ordinary legislator’.

Accordingly, the Art. 42, par. 3 of the “LAV” provides that the

motivation of arbitral awards is required unless the parties have

dispense with motivation. This new version matches exactly the

former Portuguese Arbitration Act (Law n º 31/86 of 29 August

– ‘LAV 86’). The contractual freedom that underlies the right

to resort to arbitration justifies and allows that the parties may

dispense with reasons of the award and no injunctive provision

was set out in this matter turning the right to motivation as of a

non-waivable or non-disposable of nature. These principles would

38 • YAR • JULY 10, 2013


also allow the legislator to generically dispense with reasons of the

arbitral awards (which was not the case of the Portuguese Law).

As far as the Portuguese jurisprudence is concerned,

I am not aware of any court decision that challenged the

constitutionality of such provision of the “LAV” (both new

“LAV” and “LAV 86”).

Thus, if a foreign arbitral award has no motivation in

compliance with a “lex loci arbitri” that requires no reasoning

for a valid and enforceable arbitral award, I don’t think that a

breach of this Portuguese constitutional provision arises.

But if I am seeing right, if a party is seeking in Portugal

the recognition or enforcement of a foreign arbitral award

that has no motivation in breach of a “lex loci arbitri” that

requires such requirement, we may well face a final result of a

decision violating this constitutional command. In other words,

if a foreign “lex loci arbitri” requires motivation of the arbitral

award, a Portuguese court decision that would interpret and

construed the Art. 56 of “LAV” in a sense that dispenses with

reasons, recognizing or enforcing an arbitral award in breach of

such “lex loci arbitri” provision would lead to a result materially

breaching the above cited constitutional provision. I am not

aware of any court decision or opinion that stands for this

understanding but I did not find any decision or opinion in the

reverse sense either and I can’t think of a reason to eliminate

it at its outset. Therefore, I think that preponderance has to be

granted to this ‘constitutional’ argument.

VII. Anyway, it is indisputable that a recognition and

enforcement proceeding of a foreign arbitral award in Portugal

will have to face and deal with the local legal tradition and with

a certain propensity of the local courts to apply the Portuguese

law in strictly and stiffly terms to any subject matter that is

submitted to its decision. That is, it is not unthinkable that

a court decision will require motivation of a foreign arbitral

award in any circumstance and regardless of the fact that such

requirement is not set out in the “lex loci arbitri”.

Therefore, a cautious approach is advisable specially

because using such caution does not involve a great deal of

effort. Motivation is therefore recommended. But what

is the extension of such reasoning? I will spare just a few

considerations.

Firstly, we should bear in mind that the “LAV” does not

set up any degree or extension of the motivation. It simple

provides that the arbitral award shall state the ‘reasons upon

which it is based’.

Secondly, there are court decisions that require just a

simple and mere motivation. For example, the decision from

the Portuguese Supreme Court of Justice dated of 10-07-2008

(available at www.dgsi.pt) determined that only total and

absolute lack of motivation would be a ground for annulment

of the arbitral award, but not the simple insufficiency or

shortcoming of the reasoning of the arbitral award. (ENDNOTE:

Nevertheless, applying the general principles of civil procedure

and the rules applicable to the judicial decision, I think that it

is possible to draw a conclusion according to which the flagrant

and irreconcilable contradiction between the reasoning and the

39 • YAR • JULY 10, 2013


determination of the award may be considered “absolute lack

of reasoning.” However, this is an issue that time and size of

this article does not allow me to deepen.) On the other hand,

although some decisions require the statement of the facts and

the evidence produced to ascertain those facts (for example the

decision from the Portuguese Supreme Court of Justice dated

of 15-05-2007), one very stiff and rigid decision can be found

requiring a ‘critical analysis’ of the evidence produced (decision

of the Oporto Court of Appeals dated of 11-11-2003, available

at the above referred website).

Generally, there is a common understanding that the legal

criteria applicable to the court final decisions should be also

applicable to produce a final arbitral award (for example the

decision from the Portuguese Supreme Court of Justice dated

of 17-05-2001 also available at dgsi’s webiste) and those legal

criteria are simply stated as follows: listing of the established facts,

designation, interpretation and application of the legal rules (cfr.

Art. 659, par. 2 of the Portuguese Civil Procedure Code).

Thirdly and following last note, any decision necessarily

involves a legal syllogism where the major premise is the law,

the minor premise is the fact (or bundle of facts) and the

conclusion is the determination itself. Giving this generic

notion, one can easily adhere to the idea of using the criteria

required under the Portuguese Civil Procedure Code as a (mere)

guideline where some basic milestones have to be verified, but

not as a mandatory roadmap.

Accordingly, the first requirement for the motivation shall

be a list of the facts established by the arbitral tribunal as a

result of the evidentiary activity taken during the proceedings.

I don’t think that a list of the facts that remain to be proven is

required nor even a ‘critical analysis’ of the evidence produced

shall be demanded. What is paramount is a set of facts that

shall be used by the arbitral tribunal to decide the dispute.

Further, finding, interpreting and applying the legal rules

is necessary. And afterwards, it will follow the legal reasoning

which is supposed to produce and afford an intelligible

determination.

Concerning this issue, it should be borne in mind that

produce reasoning is not deciding all the legal arguments

raised by the parties. As is common understanding, a decision

is supposed to determine legal issues, not legal arguments.

Further, Redfern and Hunter’s advice still remains accurate in

face of the Portuguese Arbitration Act: ‘The object should be

to keep the reasons for a decision as concise as possible and

limited to what is necessary, according to the nature of the

dispute. The parties want the essential reasoning underlying

the decision, not a lesson in the law’.10

VIII. In short: a) motivation of an arbitral award shall

be regarded as a mandatory requirement unless i) the “lex loci

arbitri” grants the parties the power to dispense with reasons

(which is the case of the Portuguese Law) and the parties

effectively have dispensed with reasons or; ii) the “lex loci

arbitri” does not set out motivation as requirement for the

validity and enforceability of the award; b) the motivation

should follow the Portuguese Civil Procedure Code provisions

as a guideline: listing of the established facts, designation,

interpretation and application of the legal rules (cfr. Art. 659,

par. 2 of the Portuguese Civil Procedure Code); c) it is crucial that

the arbitral award determines the issues at dispute (and all the

issues at dispute …) but not the legal arguments invoked by the

parties; d) any simple, concise but nevertheless conspicuously

thorough decision shall meet the legal requirements in what the

motivation is concerned.

Duarte Gorjão Henriques

1. According to paragraph 1 of art. 49 of the “LAV” ‘an arbitration is considered international when international trade interests are at stake’.2. There is a very disturbing decision from the Portuguese Supreme Court of Justice, dated of 19/03/2009 and available at http://www.dgsi.pt/jstj.nsf?OpenDatabase

which stated that foreign arbitral awards were not required to be recognized in Portuguese state courts as Portugal became party of the “NYC 1958”. This decision was (somehow) overruled or at least forgotten by a decision from Lisbon Court of Appeals dated of 08/06/2010 and available at http://www.dgsi.pt/jtrl.nsf?OpenDatabase that clearly stated that despite the fact that Portugal is a party bound to the “NYC 1958” this would not exempt the process of recognition of foreign arbitral awards. That Supreme Court decision was also sharply criticized by José Miguel Júdice and António Pedro Pinto Monteiro - Portuguese edition of “Do reconhecimento e execução de decisões arbitrais estrangeiras ao abrigo da Convenção de Nova Iorque – Anotação ao acórdão do Supremo Tribunal de Justiça de 19/03/2009”, in “Revista Internacional de Arbitegem e Conciliação”, 2010. Nevertheless, I think that now the new wording of the Art. 55 of “LAV” leaves no room for such bold interpretation of the “NYC 1958” and the Portuguese Law.

3. Nigel Blackaby and Constantine Partasides with Alan Redfern and Martin Hunter - Redfern and Hunter on International Arbitration, 5th edition, Oxford, 2009, pag. 639.

4. Cfr. inter alia, Manuel Pereira Barrocas, Portuguese edition of “Lei de Arbitragem Comentada”, Almedina, 2013, pag. 202.5. This principle is supposed to be construed from the Art. V, 1., (b) of “NYC 1958”, Art. 36, (1), (a), (ii) of the UNCITRAL Model Law and Art. 56, 1, a), ii) of the

Portuguese “LAV”.6. Fouchard Gaillard Goldman (“On International Commercial Arbitration”, Kluwer Law International, 1999), pag. 948.7. Albert van den Berg, ‘The New York Convention of 1958: An Overview’ available online at http://www.arbitration-icca.org/media/0/12125884227980/new_york_convention_of_1958_overview.pdf8. Fouchard Gaillard Goldman (“On International Commercial Arbitration”, Kluwer Law International, 1999), pag. 959.9. I should note that I collected this wording from an English version of the Constitution of the Portuguese State available at the official site of the “Assembleia da

República” - Parliament of the Republic of Portugal: www.parlamento.pt - and the word “form” is used here in a sense of “manner” or “way” but not in a sense of “formality”.

10. Nigel Blackaby and Constantine Partasides with Alan Redfern and Martin Hunter - Redfern and Hunter on International Arbitration, 5th edition, Oxford, 2009, pag. 557.

40 • YAR • JULY 10, 2013


28 USC § 1782An American “Wingman”

for International Arbitration DisputesBy André Fonseca

i) Introduction

“28 USC § 1782” is a statutory provision that

authorizes U.S. courts to grant discovery assistance to individual

persons/companies involved in disputes before a foreign or

“international tribunal”, outside the United States of America.

The statute provides the basic requirements and parameters

of the scope of discovery available for interested parties seeking

information/proof located in the United States for use in foreign

proceedings. In the words of Professor Hans Smit, principal

draftsman of the 1964 amendments to § 1782, “(…) in Section

1782 of the Judicial Code, the United States properly makes its assistance

available in connection with foreign proceedings irrespective of its own

interest or that of its nationals in those proceedings (…)”1.

The importance of § 1782 for international arbitration is

therefore obvious, as this mechanism may constitute a useful aid for

parties involved in arbitration proceedings. However, divergence

remains among U.S. courts regarding if this mechanism may or

not be used in the context of a commercial arbitration procedure.

Recently, the importance of § 1782 to international

arbitration has been particularly on the spotlight thanks to the

“Chevron v Ecuador saga”, having assumed a crucial role in the

latest and decisive turnover of events in the case.

The present article intends to provide a brief insight of

Section 1782 scope and key procedural issues by looking to

the most relevant jurisprudence, its interface with international

commercial arbitration, and the practical importance that it

can have in the context of international arbitration procedures.

ii) Scope of Section 1782

a) The Statute

The Statute, in its relevant part, provides the following:

28 U.S.C. § 1782: US Code - Section 1782: Assistance to foreign and international tribunals and to litigants before such tribunals

41 • YAR • JULY 10, 2013


(a) The district court of the district in which a person resides or

is found may order him to give his testimony or statement or to produce

a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted

before formal accusation. The order may be made pursuant to a letter

rogatory issued, or request made, by a foreign or international tribunal

or upon the application of any interested person and may direct that

the testimony or statement be given, or the document or other thing be

produced, before a person appointed by the court. […]

b) Scope of application

Since Section 1782 entered into force that there has

been much debate regarding its exact scope of application,

particularly, if the mechanism can allow ancillary discovery in

the context of foreign arbitration proceedings.

\Several initial U.S. court decisions followed a restrictive

approach regarding the “foreign or international Tribunal”

requirement2. However, although some decisions like National

Broadcasting Co, Inc. v. Bear Stearns & Co.3 began to pave the

way to include “intergovernmental arbitral tribunals”, the courts

still showed little willingness to also include private arbitration

tribunals within the scope of §1782 formula.

The “Intel landmark”:

The Intel Corp. v Advanced Micro Devices, Inc.4 decision by

the U.S. Supreme Court is often considered a “game-changer” in

the way that U.S. courts interpreted §1782.

In its ruling, the Supreme Court clarified several

important issues regarding the exact scope of application of

this mechanism. Specifically, the Court decided on 4 important

procedural issues:

First, it considered that Section 1782(a) does not impose

a “foreign-discoverability requirement” stating that “although

§1782(a) expressly shields from discovery matters protected by legally

applicable privileges, nothing in §1782(a)’s text limits a district court’s

production-order authority to materials discoverable in the foreign

jurisdiction if located there. Nor does the legislative history suggest that

Congress intended to impose a blanket foreign-discoverability rule on

§1782(a) assistance”;

Second, it stated that “the “proceeding for which discovery is

sought under §1782(a) must be within reasonable but need not be “pending” or “imminent”;

Third, it cleared who can be considered an “interested person” stating that “The Court rejects Intel’s contention that

“interested person[s] does not include complainants, but encompasses

only litigants, foreign sovereigns, and a sovereign’s designated agents

(…)”;

And finally it also made several important considerations

regarding what it could be considered a “foreign or international Tribunal”.

Regarding this last issue, although the Supreme Court

did not directly decide the question of whether a commercial

international arbitration tribunal would be considered a “foreign

or international tribunal” under §1782, the Court quoted with

approval a law review article by Professor Hans Smit that

stated «[t]he term ‘tribunal’ [ ... ] includes investigating magistrates,

administrative and arbitral tribunals, and quasi-judicial agencies, as

well as conventional civil, commercial, criminal, and administrative

courts”. In a footnote, the Court stated that “[i]n light of the

variety of foreign proceedings resistant to ready classification in domestic

terms, Congress left unbounded by categorical rules the determination

whether a matter is proceeding ‘in a foreign or international tribunal”.

In the context of Intel’s v Advanced Micro Devices specific

proceedings, the Supreme Court held that the Commission of

the European Communities qualified as a “foreign or international

tribunal” within the meaning of § 1782. In supporting its holding,

the court referenced the legislative history of §1782 and noted

that the legislature intended to include “quasi-judicial” bodies

within the meaning of the term (instead of limiting §1782 to

conventional courts). And also, that the European Commission

acted as a first-instance decision maker that had quasi-judicial

qualities, subject to review by a conventional court. Thus, for

these reasons, the European Commission qualified as a “quasi-

judicial” body under §1782.

Also, the «Intel” decision provided four important factors

in order to assist U.S. district courts in the future exercise of

their discretion in permitting (or not) discovery pursuant to

§1782:

Whether the documents or testimony sought are within

the foreign tribunal’s jurisdictional reach and thus accessible

absent §1782 aid;

“The nature of the foreign Tribunal, the character of the

proceedings underway abroad, and the receptivity of the foreign

government or the court or agency abroad to U.S. federal-court judicial

assistance”;

Whether the application “conceals an attempt to circumvent

foreign proof gathering restrictions or other policies of a foreign country

or the United States”;

Whether the application contains “unduly intrusive or

burdensome requests”.

The “Post-Intel Era”:

After the “Intel landmark” the U.S. courts have been

facing the question of whether the term “international tribunal”

can also include an arbitration tribunal in different ways, which

can be divided into two different main splits.

Accordingly, although the majority of court decisions

held that §1782 should be red broadly to include both “public

arbitrations” (brought pursuant the existence of a BIT or governed

by rules that had some form of international-government

sanction5), and also, “private” commercial arbitrations arising

42 • YAR • JULY 10, 2013


out of commercial contracts, there were still U.S. courts that

continued to follow a more restrictive approach6.

iii) The importance of Section 1782 reflected on the “Chevron saga”

As it was stated above, the well-known and public Chevron

v Ecuador “saga” is a case-study of how important Section 1782

can be in the context of a dispute.

In summary, in February 2011 a court in Lago Agria,

Ecuador ordered Chevron to pay $18 billion in compensation

for an alleged dumped oil-drilling waste in the Amazon River

basin more than 20 years ago, causing illness in indigenous

people. However, Chevron defended that such decision was

tainted by illegitimacy and fraud due to unethical action by the

plaintiffs’ lawyers as well as the Ecuadorian government and

judiciary.

The screening of the film “Crude” at the Sundance Film

Festival in Park City, Utah precipitated Chevron’s allegations of

denial of justice and triggered a turn of events in which §1782

had a decisive role.

The film depicted the case of indigenous Ecuadorian

plaintiffs in an uneven clash against Chevron over alleged

environmental damage in Ecuador. Scenes in the film depicted

an ex parte meeting between plaintiffs’ lawyers and a medical

expert working with the Ecuadorian court-appointed Special

Master, plaintiff lawyer Steven Donziger storming into an

Ecuadorian judge’s chambers, and Donziger declaring that

“you had to play dirty” with litigation in Ecuador. The Chevron

lawyers then wandered that if such behaviour was portrayed in

the film, other evidence could also be found in the backstage.

Thus, on the basis of these and similar scenes, Chevron

filed a §1782 motion in the Southern District of New York

against Crude director Joe Berlinger, requesting over six hundred

hours of film outtakes. The district court granted the motion

stating that “[r]eview of Berlinger’s outakes will contribute to the goal

of seeing not only tat justice is done, but that it appears to be done”7.

The evidence that was found through § 1782 allowed

Chevron to present startling revelations indicating the existence

of fraud and corruption. Between the direct quotes attributable

to the Ecuador plaintiff lawyers were: (1) “All the judges [in

Ecuador] are corrupt;” (2) “the only language . . . this judge is gonna

understand is one of pressure, intimidation, and humiliation;” (3) “[In] Ecuador . . . this is how the game is played, it’s dirty;” (4) “[The

court-appointed Special Master will have] to totally play ball with us

and let us take the lead while projecting the image that he is working for

the court;” (5) “[A]ll this bull***t about the law and facts . . . in the

end of the day it is about brute force;” (6) “[We] could jack this thing

up to thirty billion . . . in one day;” (7) “[Evidence of groundwater

43 • YAR • JULY 10, 2013


André Fonseca

1. Hans Smit, “Assistance Rendered by the US in Proceedings before International Tribunals”, 62 Colum. L. Rev. 1267 1962.2. In Re Application of Wilander (No 96 MISC 98, 1996; E.D. Pa. July 24, 1996) the court, finding no support in the statute or legislative history that would include

“a completely non-governmental private agency such as the International Tennis Federation”, ruled that this entity did not constitute a tribunal for purposes of§ 1782 and rejected the application for discovery. In Re Application of Medway Power Lt., 985 F. Supp. 402, 402-403 (S.D.N.Y. 1997) The court stated that: “Congress intended this statute to assist official, governmental bodies exercising an adjudicatory function. The legislative history of Section 1782 does not suggest an intent to encompass unofficial, private arbitrations which Congress and the courts have consistently treated as creatures of a contract which a court should enforce just like any other obligations imposed by private agreement”. In re Application of Republic of Kazakhstan (168 F.3 880, 881; 5th Cir. 1999) in holding that § 1782 did not apply to private international arbitrations, the court stated it was following the Second Circuit in NBC. Like the Second Circuit, it examined § 1782’s legislative history and found “no contemporaneous evidence that Congress contemplated extending § 1782 to the then-novel arena of international commercial arbitration”.

3. In National Broadcasting Co, Inc. v. Bear Stearns & Co. (165 F.3d 184, 488-191; 2d Cir. 1999) the court concluded: “The legislative history reveals that when Congress in 1964 enacted the modern version of § 1782, it intended to cover governmental or intergovernmental arbitral tribunals and conventional courts and other state-sponsored adjudicatory bodies. The legislative history’s silence with respect to private tribunals is especially telling because we are confident that a significant congressional expansion of American judicial assistance to international arbitral panels created exclusively by private parties would not have been lightly undertaken by Congress without at least a mention of this legislative intention”.

4. Intel Corp. v Advanced Micro Devices inc. 542 U.S. 241 (2004).5. In re Application of Roz Trading Ltd (469 F. Supp. 2d 1221; N.D. Ga. 2006); In re Application of Oxus Gold PLC (No. MISC 06-82, 2006 WL2927615, at *6 (D.N.J.

Oct. 11, 2006); In re Application of Hallmark Capital Corp. (534 F. Supp. 2d 951; D. Minn. 2007); In re Application of Babcock Borsig (Case No. 08-mc-10128, 2008 WL 4748208; D. Mass. Oct. 30, 2008); OJSC Ukrnafta v. Carpatsky Petroleum Corp. (No. 3:09 MC 265 (JBA), 2009 WL 2877156; D. Conn. Aug. 27, 2009); In Re Application of Winning (HK) Shipping Co. Ltd. (2010 WL1796579, at *10; S.D. Fla. Apr. 30, 2010); Consorcio Ecuatoriano de Telecomunicaciones S.A. v JAS Fowarding Inc. (No. 11-12897, 2012 WL 2369166, at*1; 11th Cir. June 25, 2012); In re Application of Mesa Power Group (Case No. 11-24335-CIVUNGARO/TORRES, S.D.Fl. July 13, 2012).

6. El Paso Corp. V. La Comision Ejecutiva Hidroelectrica Del Rio Lempa (341 F. App’x 31 (5th Cir. 2009); Norfolk Southern Corp. v. Gen. Sec. Ins. Co. (626 F. Supp. 2d 882; N.D. Ill. 2009); In re Application of Operadora DB Mexico, S.A. (DE C.V., No. 09-cv-383, 2009 WL 2423138 (M.D. Fla. Aug. 4, 2009).

“Ancillary Discover to Prove Denial of Justice”, Roger P. Alford, Virginia Journal of International law Digest, 2013 on Berlinger, 709 F. Supp. 2d at 299. Brief of Plainiff-Appelle a 20-23, Chevron v. Camacho, 667 F.3d. 232 (2d. Cir. 2012) (No. 11-1150).7. Chevron v. Ecuador, PCA Case No. 2009-23m Order for Interim Measures, 3 (Feb. 9, 2011). On January 25, 2012, the tribunal confirmed and reissued the February

9, 2011 Order as an Interim Award, ordering Ecuador “to take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment against [Chevron] in the Lago Agrio case. (Chevron v. Ecuador, PCA Case No. 2009-23, First Interim Award, 16 (Jan. 25, 2012). On February 16, 2012, the tribunal issued a second Interim Award finding that Chevron has made a sufficient case regarding “the Claimants’ case on the merits against the Respondent” and ordered Ecuador to prevent the Lago Agrio judgment from becoming final and binding by precluding “any certification by the Respondent that would cause the said judgments to be enforceable against” Chevron. (Chevron v. Ecuador, PCA Case No. 2009-23, Second Interim Award, 2-3 (Feb. 16, 2012). On 27 February 2012, a third interim award was issued in which the tribunal rejected a number of jurisdictional challenges presented by Ecuador (Chevron Corporation and another v Republic of Ecuador (PCA Case 2009-23) (Third Interim Award on Jurisdiction and Admissibility) (27 February 2012). And finally, on 7 February 2013, the Arbitral Tribunal issued a fourth interim award on interim measures in which was declared that Ecuador had “violated the First and Second Interim Awards in regard to the finalisation and enforcement subject to execution of the Lago Agrio Judgment within and outside Ecuador”. As a consequence, the Respondent was ordered to “show cause (…) why it should not compensate the First Claimant for any harm caused by the Respondent’s violations of the First and Second Interim Awards. The Tribunal also declared and confirmed “that the Respondent was and remains legally obliged under international law to ensure that the Respondent’s commitments under the Treaty and the UNCITRAL Rules are not rendered nugatory by the finalisation, enforcement or execution of the Lago Agrio Judgment in violation of the First and Second Interim Awards”; (Chevron Corporation and another v. Republic of Ecuador (PCA Case No. 2009-23 (Fourth Interim award on interim measures) (7 February 2013).

contamination] was smoke and mirrors and bull***t, it really is;” and

(8) “[I]f you repeat a lie a thousand times it becomes the truth8.

The material gathered following Section 1782 ancillary

discovery process caused several decisive legal consequences in

the procedure.

In a dramatic turn of events, the International Tribunal

adjudicating Chevron’s denial of justice claim concluded that

Chevron “[had] made out a sufficient case” for interim measures

and ordered Ecuador to “take all measures at its disposal to suspend or

cause to be suspended the enforcement or recognition within and without

Ecuador of any judgment against [Chevron] in the Lago Agrio case”9 .

Conclusion:

Thus, it is clear that Section 1782 may represent a

powerful mechanism in aid of foreign arbitration proceedings.

Since the “Intel landmark”, the receptiveness of U.S. courts

to allow ancillary discovery in the context of international

commercial arbitrations has changed and is becoming increasingly

wide in the sense that the term “foreign or international tribunal”

can also include “private” arbitration tribunals.

Also, regardless of the final outcome of the Chevron v.

Ecuador case, it is undeniable that Section 1782 portrayed a

fundamental role in the impressive overturn of events that

followed, allowing the discovery of precious evidences that

otherwise might never be within Chevron’s reach.

Section 1782 is therefore a very serious ally to consider

by any party involved in foreign arbitration proceedings that

may which to pursue discovery in American territory.

44 • YAR • JULY 10, 2013


THE 2010 REVISION OF THE ARBITRATION RULES

OF THE CHAMBER OF ARBITRATION OF MILAN

By Chiara Catti

CONTENTS

1. Introduction: Arbitration state of art in Italy

2. Bodies of the CAM: Arbitral Council and Secretariat

3. General provisions and commencement of the proceedings

4. Confidentiality under the 2010 Rules

5. The appointment of the Arbitral Tribunal and

the independence of Arbitrators

6. The arbitral proceedings

7. The arbitral award

8. Costs of the proceedings

9. Future challenges and conclusions

1. INTRODUCTION: ARBITRATION STATE OF ART IN ITALY

The new rules of the Milan Chamber of Arbitration

(“CAM”) entered into force on January 1st, 2010 in substitution

of the 2004 version of the rules. The new set of rules applies

to both domestic and international arbitration. The 2010 rules

(hereinafter, the “Rules”) is the third amendment since the

creation of the Chamber in 1985, and its aim is to adapt the

Rules to the development and globalization of international

transactions as well as updating the CAM administration

system to the Italian 2006 legislative reform on arbitration.

It should be noted that alternative resolution techniques

(meaning mainly arbitration and mediation) still play a

secondary role in the resolution of civil claims in Italy. The

2010 annual “ISDACI report on the use of alternative dispute

resolution methods in Italy” shows that most of the requests for

arbitration in Italy are filed with the Chambers of Arbitration

set up by the Chambers of Commerce.1 This survey also

highlighted that, notwithstanding the limited use of ADR in

Italy compared to other European countries such as England

or France, the total number of arbitration cases and value of

disputes have generally increased in the last years.2 Among

the arbitral institutions created by Chambers of Commerce,

the Milan Chamber of Arbitration has distinguished itself as

one of the most active both in North Italy and internationally.

45 • YAR • JULY 10, 2013


For instance in 2005, CAM launched a Mediterranean project

involving small and medium enterprises which led in 2009 to

the creation of the Institute for the Promotion of Arbitration

and Mediation in the Mediterranean Area (ISPRAMED): a

private organisation with the aim of creating a shared network

of commercial justice which protects entrepreneurs and

investors within the Mediterranean Area by fostering the use

of alternative dispute resolutions methods.3

In accordance with this slow but steady growing use of

arbitration in Italy, the Milan Chamber amended the 2004

Rules to provide both domestic and international parties

“with an expedited, transparent and effective administration of the

proceedings”.4 In order to follow this scope, the reform has

a) amended the internal function of the CAMS’s bodies, b)

strengthened the independence of arbitrators and fostered the

institution’s control over duration and costs, c) rendered the

text shorter and clearer.

2. BODIES OF THE CAM

In light of enhancing its competence both in the domestic

and international levels, the Arbitral Council - which is in charge

of the administration of the proceedings and issuance of all

related orders (an example being the challenge of the arbitrators

pursuant to article 19 of the Rules), is now composed of an

enlarged number of members (from a minimum of seven up

to a maximum of eleven) of both Italian and foreign “experts”

(mainly professor of International, Civil Procedure and

Comparative Law).5 Under the new Rules, a minimum quorum

of the meeting requires only three members (as opposed to five

members under the 2004 Rules) and the meetings may be held

“by any means of telecommunication” to facilitate the members in

achieving the quorum and avoiding any unnecessary delay.6

3. GENERAL PROVISIONS ANDCOMMENCEMENT OF THE PROCEEDING

In light of the Reform, the scope of application of the new

Rules has become wider as reflected in Art. 1 which provides:

“The Rules shall apply where so provided by the arbitral clause

or other agreement between the parties, however expressed”

(emphasis added). This new wording, as opposed to the old

one referring only “to the Milan Chamber of Arbitration or

the Milan Chamber of Commerce”, provides for a wider

application of the Rules whenever this reflects the intention of

the parties. Accordingly, any reference in the arbitral clause to

Milan Arbitration Rules or Milan Chamber will be deemed to

be sufficient to apply those Rules. This will help the institution

in deciding a prima facie test on the applicability of the Milan

Rules, notwithstanding the procedural right for a party to

object to the application pursuant to Art. 11 (Admissibility

of the arbitral proceedings). As for the procedural aspect of

the arbitral proceeding, the new Art. 2 provides for an equal

hierarchy of the CAM Rules and the rules chosen by the parties

provided that they are consistent with the CAM Rules (in the

2004 version of the CAM Rules these prevailed over the rules

chosen by the parties in case of conflict). In case of default, the

Arbitral Tribunal, once constituted, still retains the power of

setting the rules to fill any gap. The rationale of this change is to

provide parties with greater freedom without undermining the

core principles of the Milan institution which can be identified

as the control on arbitrator’s independence and impartiality,

the respect for due process and equal treatment of the parties

strictly connected to the previous principle, and efficient time/

cost management of the arbitral proceedings.7

A major amendment concerns the rules applicable

to the merits of the dispute by which CAM now provides

that, in case of failure of the parties to agree on applicable

substantive law, the Arbitral Tribunal shall apply the law that

it deems “appropriate” taking into account the nature of the

contractual relationship, the personal qualities of the parties,

and any other relevant circumstances of the case (Art. 3 of the

Rules). In departing from the principle of the rules with the

“closest connection” to the subject matter, CAM anchors the

arbitral decision to more objective criteria in line with current

international practices.8

While the 2004 Rules provided for a strict and regulated

timeline with regard to the request of arbitration, the statement

of defence and the filing of a counterclaim, the 2010 version

has deleted any time-limit for the counterclaim, leaving the

decision to the Arbitral Tribunal once constituted.

As previously mentioned, notwithstanding the principle

of a prima facie decision of the Arbitral Council on the

applicability of the Rules, CAM has inserted a new rule (Art. 12

– Lack of jurisdiction of the Arbitral Tribunal) which provides for

a waiver presumption on the existence, validity or effectiveness

of the arbitration agreement, or any lack of jurisdiction thereto,

failing any prompt objection by the parties.9

4. CONFIDENTIALITY UNDER THE 2010 RULES

In line with many international institutions, CAM has

decided to insert a clause devoted to confidentiality itself, which

under the new wording extends to the parties, in addition to

the Arbitral Tribunal and the expert witness.10 Changing the

generic wording of 2004 Rules providing for “all information

relating to the proceedings” to be kept confidential, the new

Art. 8 specifies that also the “arbitral award” shall be kept

confidential with the exception of where the information “has

to be used to protect one’s right”. This exception embodies the

classical scholar example of a justified breach of confidentiality

being the right to enforce or challenge the award and, without

doubt, when the party has a legal duty to do so because the law

requires the protection of public interests.

The issue of confidentiality in commercial arbitration

has been largely analysed and discussed by both doctrine and

jurisprudence; while most of scholars and practitioners agree

that confidentiality is a general accepted feature of arbitration,

its legal basis and scope of application are object of discussion.11

One interpretation, relying on the absence of a general duty of

confidentiality in the major arbitration conventions and, notably

the ICC Rules and the new UNCITRAL Arbitration Rules of

2010, considers that this should be a contractual aspect to be

46 • YAR • JULY 10, 2013


negotiated by the parties along with the determination of the

seat of arbitration or the applicable law. This interpretation

is sustained by the absence of a duty of confidentiality in the

principle European statutes on arbitration (namely, the most

recent arbitration acts of France, United Kingdom, Germany and

Italy) and the way confidentiality gives in when faced to the need

of publicity typical of judicial proceedings in national courts.12

On the other hand, there is a well affirmed movement that

considers confidentiality so truly and intrinsically connected to

arbitration itself that there is no need to regulate it. In view of this

general acceptance - that extends to considering confidentiality

in arbitration agreements as an implied duty – confidentiality

itself may be regarded as customary international law. This

duality of opinions is reflected also in the business community

and final users of arbitration. The 2010 School of International

Arbitration Survey reveals that 86% of interviewers (general

counsel, heads of legal department and other corporate counsel

from a variety of corporations) considered confidentiality to

be “very important” or “quite important”, while 50% of them

believed that arbitration is confidential even where the is no

specific clause to that effect in the arbitration rules adopted

or the arbitration agreement.13 However, some interviewers

believed that various corporation obligations may undermine

confidentiality so that the content and scope of it might vary

case by case and could be regarded as a non serious concern.

Having said that, the position of CAM is that confidentiality is

one of the main features of international commercial arbitration

and, therefore, should be preserved.14

Turning now to the issue of publication and transparency.

Art. 8.2 of the Rules provides that CAM “may publish the arbitral

award in anonymous format, unless during the proceedings,

any of the parties objects to publication”. Changing the opt-in

attitude of 2004 Rules, CAM has adopted an opt-out solution

for the publication of sanitized awards.15 This dual attitude

of respecting confidentiality during the proceedings and

ensuring transparency of publicity and publication is in no way

contradictory. To ensure the balance between confidentiality and

transparency, CAM together with Universita’ Carlo Cattaneo

(LIUC) has issued a set of guidelines for the publication of

sanitized awards and for the publication of other decisions such

as arbitrator challenges.16 Unlike the challenge, for which the

guidelines favour a systematic and updated publication, the

rationale behind the publication of the awards is to select the

most relevant ones in order to create an arbitral jurisprudence

to the benefit of both the general public and the arbitration

professionals. The publication of the awards would, inter alia,

provide: a) better selection of arbitrators and a better quality

of the awards, b) relevant background for the arbitrators,

especially the new generation and c) more reliable data on

arbitration in general, including the grey phenomenon of ad-

hoc arbitration.17

5. THE APPOINTMENT OF THE ARBITRALTRIBUNAL AND THE INDEPENDENCE OFARBITRATORS

The Rules provide for the parties to agree on the number

of the arbitrators, but, in case of an even number of arbitrators,

is the duty of the Arbitral Council to appoint an additional

arbitrator, unless the parties have agreed otherwise (Art. 13.3).

This strict requirement of an odd number of arbitrators which

no other European rules of arbitration require, has been inserted

pursuant to the Italian arbitration Law which precludes the

47 • YAR • JULY 10, 2013


constitution of an even-numbered Arbitral Tribunal (see Art.

809 Italian Code of Civil Procedure).18

The reform also aimed at enforcing the independence and

impartiality of the arbitrators as set out in Art. 18 of the Rules.

The statement of independence required by the arbitrators has

now a larger scope; as a result, the arbitrator shall in fact disclose

not only any relationships with parties and counsels but also with

“any other person or entity involved in the arbitration which may

affect his/her impartiality” (emphasis added). In addition, CAM

acknowledges that the Arbitral Council in making the decision

on arbitrators’ independence takes into consideration the IBA

Guidelines on conflict of interests in international arbitration.19

CAM has a Code of Ethics enclosed in the Rules which is

provided to the arbitrators upon appointment and in accordance to

which they should act, regardless of the party who appointed them.

As for the appointment criteria, the Rules still followed

the 2004 “third nationality rule” according to which where the

parties are of different nationalities, the sole arbitrator or the

chairperson of the tribunal shall be of a nationality different

from those of the parties. CAM further provides a ”list of

incompatibilities”: no members of Arbitral Council, auditors

and employees of CAM, professional partners and those with

an ongoing professional relationship can act as arbitrators,

unless the parties agree otherwise (the latter being a novelty of

the 2010 rules). Once again, the principle of parties’ autonomy

in choosing the procedural rules is fostered and enhanced.

One final remark concerns the appointing of the Arbitral

Tribunal in multi-party arbitration as provided in the new

formulation of Art. 15. Either the multiple parties act as two-

sides by appointing each an arbitrator and subsequently the

two arbitrators appoint the chairperson (or, following the will

of the parties, he is appointed by another institution) or, if this

bilateral scheme is not respected, the Arbitral Council shall

appoint the Arbitral Tribunal disregarding any appointment

made by the parties.

6. THE ARBITRAL PROCEEDINGS

Under section IV (The Proceedings of the Rules), a few

amendments have also been made with the aim of empowering

the arbitrators so that the arbitral process will become faster

and smoother.

Arbitrators can now attempt an amicable settlement of the

case referring this to the Mediation service of the CAM.20 Another

aspect concerns third party intervention, both in case it is required

by the parties or by the third-party joinder, the 2010 Rules gives

the Arbitral Tribunal the power to make the decision, after

consulting with the parties and after taking into considerations

all the circumstances. The decision is final, and the third-party

joinder has to accept how the Tribunal is constituted.21

Another amended Rule concerns evidence taking; the 2010

Reform gives the arbitrators the power to take “all the relevant and

admissible evidence adduced in the manner it deems appropriate”

and also to delegate the above powers to one member of the

Tribunal. In the previous version of the Rules, the arbitrators’ role

was limited to gathering evidence not excluded by mandatory

provisions while in the amended Rules they manage and lead the

evidence-taking process, having the final word as to the relevance

and admissibility of evidence.22 The same rationale applies to the

new Article 26 (Expert Witness) which specifies the arbitrators’

power to appoint witnesses on their own initiative in addition to

witnesses appointed following a party request.

The same short and clear wording that characterizes the

2010 Rules is used also with regards to new claims; without

specifying anything more, the specific conditions that the new

claims should meet to be admitted, Art. 27, provides for the Arbitral

Tribunal to decide on their admissibility by “taking into account

all circumstances, including the stage of the proceedings”.23

7. THE ARBITRAL AWARD

The provisions concerning the deliberation and form of the

award have been changed to adapt to the 2006 Italian Reform

that does not require a personal meeting (“conferenza personale)”

to deliberate on the award, unless requested by the parties.24

Accordingly, the new Art. 30 provides that all the members

of the Arbitral Tribunal shall participate in the deliberation

of the award but that the decision may be by majority votes

provided that it states the reasons of the “missing signature” i.e.

the reasons why the arbitrator does not sign it.

The six-month time limit running from the constitution

of the Arbitral Tribunal to render an award is reaffirmed with

the possibility for the Secretariat to extend the limit when the

parties agree or for the Council to do it ex officio whenever it

deems it appropriate. At this regard, the CAM statistics shows

that final awards were rendered in 2010, on average, in 12,6

months (improving from the 2009 and 2008 figures of 13,1

months) so ensuring a fast settlement of the disputes.25

Aimed at ensuring an efficient and fast proceeding, CAM

has also set a specific time-limit for the correction of the award:

30 days to file a request, and 60 days for the Tribunal to decide on

it. To avoid any confusion, Art. 34(3) specifies that the decision

on the correction of the award shall be considered “an integral

part of the award” for which the parties will not be charged.

8. COSTS

It is an established principle that the predictability of

costs is one of the advantages of arbitration, especially when the

alternative is a judicial process that can last many years and, as a

consequence, has unpredictable costs such as it happens in Italy.

For this reason, CAM still maintains the fixed criteria of the “value

of the dispute” to determine the costs of arbitration in accordance

to a schedule attached to the Rules which provide for a minimum

and a maximum fee within each value (Annexe A). Parties are

jointly and severally liable for the costs of arbitration which include

arbitrators’ fees, CAM fees, tribunal expert’s fees and expenses and

whose final determination is made by the Arbitral Council before

48 • YAR • JULY 10, 2013


Chiara Catti

1. “Quarto rapporto sulla diffusione della giustizia alternative in Italia” a national survey by ISDACI under the patronage of the Italian Minister of Justice, available at www.isdaci.it.

2. In 2009, 78% of the requests for arbitration filed in Italy were conducted by Chambers of Commerce with an increase rate of 30% with regard to 2008. In addi-tion, in 2009 all the international arbitral proceedings were managed by the Chambers of Arbitration belonging to the Chambers of Commerce with an increase of 30% with regard to 2008.

3. The ISPRAMED project is available at www.ispramed.com.4. For an overview of the 2010 revision please see Coppo B. The 2010 Revision of the Arbitration Rules of the Chamber of Arbitration of Milan in 2010, 14 “The Vin-

dobona Journal of International Commercial Law and Arbitration”, p.283-296 and Giovannini, T. – Renna,V. The Italian Experience of Arbitration and the ArbitrationRules of the Chamber of Arbitration of Milan: a Parallel View in 2010, 14, “The Vindobona Journal of International Commercial Law and Arbitration”, p. 297/313.5. A complete list of the members of the Arbitral Council is available at CAM’s website: www.camera-arbitrale.it.6. See the 2010 Rules - Arbitration Council (emphasis added).7. See in this respect the position expressed by Sali, R., Vice Secretary of the CAM, Arbitrato Amministrato in “Digesto delle discipline privatistiche, sezione civile,

aggiornamento”, 2007, Tomo I, UTET, Torino at p. 77.8. See Art. 17 of the ICC Rules, 1998 version.9. Art. 12 of the Rules provides that any objection: “shall be raised in the first brief or at the first hearing following the claim to which the objection relates, or shall be deemed to

be waived”.10. See World Intellectual Property Organization (WIPO) Arts. 73 and 76, London Court of International Arbitration (LCIA) Art. 30, and American Arbitration

Association (AAA) Art. 34 which all set a duty of confidentiality. The ICC Rules, instead, provides only for the privacy of the hearing in Art. 22(3).11 On the subject see, inter alia, Aboul-Enein, M., The need for establishing a perfect balance between confidentiality and Transparency in Commercial Arbitration, in (2007) 2.

“Stockholm International Arbitration review”, at p. 25 and Malatesta A. e Sali R., Arbitrato e Riservatezzza – Linee guida per la pubblicazione in forma anonima dei lodi arbitrali, CEDAM.

12. A comparative detailed study on the subject is Noussia, K., Confidentiality in International Commercial Arbitration. A comparative analysis of the Position under English, US, German and French Law, Springer, Heidelberg, 2010.

13. The 2010 International Arbitration Survey: Choices in International Arbitration conducted by the School of International Arbitration at Queen Mary, University of London and White & Case LLP. The entire survey could be found at http://www.arbitrationonline.org.

14. See supra Coppo B., The 2010 Revision of the Arbitration Rules of the Chamber of Arbitration of Milan in 2010, 14 “The Vindobona Journal of International Com-The Vindobona Journal of International Com-mercial Law and Arbitration”, p. 287.

15. On a European comparative point of view, The Swiss Chamber Court of Arbitration and Mediation 2006 Rules, adopt the same opt-out attitude in Article 43, while the LCIA prefers to follow an opt-in rule for publication of the awards (Art. 30).

16. For a detailed discussion on the subject see Malatesta A. e Sali R., Arbitrato e Riservatezzza – Linee guida per la pubblicazione in forma anonima dei lodi arbitrali, CE-DAM. A list of the sanitized awards can be found in the Milan Chamber website under Studies and Documentation Center (www.camera-arbitrale.it).

17. It is worth mentioning that, pursuant to the Italian arbitration law, the award, once filed with the tribunal for a declaration of enforceability, has the same effects of a court judgment, provided that it meets all the formal requirements (Art. 825 of the Italian Code of Civil Procedure, hereinafter, “CCP”). From this provision it stems that the award could be entirely published, like a judgment, unless a party asks for the sanitation of the relative personal data. Nevertheless, CAM adopts the view that if one party objects to the publication, the award will not be published. On this issue, see supra footnote 16, p. 97-98.

18. Art. 809 of the CCP provides that: “(1) There may be one or more arbitrators, provided their number is uneven. Where an even number of arbitrators is indi-Art. 809 of the CCP provides that: “(1) There may be one or more arbitrators, provided their number is uneven. Where an even number of arbitrators is indi-cated, an additional arbitrator shall be appointed by the President of the tribunal (...), unless the parties have agreed otherwise. Where the number of arbitrators is not indicated and the parties do not agree in that regard, there shall be three arbitrators; failing their appointment, the president of the tribunal shall proceed to such appointment (...), unless the parties have agreed otherwise”. This provision should be read in connection with Art. 823 CCP which requires that: “The award shall be deliberated by a majority vote (...)”. It follows that to ensure a majority vote in every case there should be an odd number of arbitrators. On this issue there is not a common approach even if the prevailing interpretation is that the odd number of arbitrators is a matter of public policy which cannot be waived by parties nor arbitral institutions. See inter alia Sangiovanni V., Numero e modo di nomina deglia rbitri tra arbitrato ordinario e arbitrato societario, in 2005/8 Corriere Giuridico and Punzi C., Disegno sistematico dell’arbitrato, I vol., Padova, 2000, p. 367.

19. The IBA guidelines are available at www.ibanet.org.20 For further reference see www.milanmediation.com.21. See Art. 22 of the Rules.22. Art. 25(1) of the Rules: “The Arbitral Tribunal leads the case by taking all the relevant and admissible evidence adduced in the manner it deems appropriate

(emphasis added)”.23. See Art. 27 – New Claims of the Rules.24. See Art. 823 CCP.25 The statistics are available on the CAM website at www.camera-arbitrale.it.26 A more detailed list of the included and not included expenses in the arbitration fees is provided in Annexe B of the Rules.27 See Art. 37(4) of the Rules.28 The one-month time limit applies also to the suspension of the single proceeding on the request to which the payment refers. See Art. 38 of the Rules.29 See Art. 37(6) of the Rules.30 A partial data concerning the average duration of the arbitral proceeding shows that, following the 2010 Revision, the goal of providing an expedited proceed- the average duration of the arbitral proceeding shows that, following the 2010 Revision, the goal of providing an expedited proceed-

ings has been met. See supra footnote 25.

the award is filed.26 On the other hand, when a separate advance

is required by the Secretariat and the latter determines different

values of the dispute in relation to the claims of the parties, each

party shall pay an amount proportionate to its claim and shall be

responsible only for that.27 To ensure an expedite administration

of the arbitration, the time of suspension of the entire proceedings,

in case of failure to pay, has been reduced from two months to one

month.28 Furthermore, in light of the principles of transparency

and control over costs which inspired the Reform, the new Art.

36(2) provides that, not only the arbitrators, but also the parties

are informed about the final determination made by the Arbitral

Council (emphasis added).

Finally, for the first time the Rules deals with the

possibility of accepting bank or insurance guarantee as a partial

payment of the arbitration fees, provided justifiable reasons.29

9. FUTURE CHALLENGES AND CONCLUSIONS

As described in the introduction, the Italian arbitration

market is gradually but steadily growing; in this context, the

quality of the services provided by the arbitral institutions, mainly

Chamber of Commerce, is crucial in enhancing the culture of

arbitration among the business and professional community both

at local and international level. The new set of Rules are serving,

on one side, the purpose of building trust in the Italian business

community in using arbitration as an expedited and efficient way

to resolve their disputes, as opposed to the unpredictable and

slow judicial system. On the other hand, the 2010 Revision, in

accordance with the 2006 Italian arbitration Law, aims at providing

a flexible, updated and in line with best international practice

arbitration system that should foster confidence in choosing Italy

as arbitration forum. It is too early to have data confirming if

these two purposes have been achieved, but it is undeniable that

the 2010 revision of the Rules provides an opportunity to serve

them both. The practical results will depend on the attitude of the

final arbitration users in seizing this opportunity.30

49 • YAR • JULY 10, 2013


THE LONG AWAITED PORTUGUESE MEDIATION LAW

– FUNDAMENTAL PRINCIPLESBy Thomas Gaultier

Mediation is not a new concept in Portugal.

Indeed, since 2001, Portugal has had legislation

governing this aspect of the law, although limited

to very specific branches. Indeed, Law No 78/2001 of 13 July,

the law of the Julgados de Paz (Justices of the Peace), sets forth the

framework for the use of public mediation in small claims cases. In

this first mediation legislation dating from over 10 years ago, and

the scope of which was limited to mediation taking place in small

claims court procedures, mediation is defined as “an extrajudicial

means of private, informal, confidential, voluntary, and non-adversarial

dispute resolution, in which the parties actively and directly participate, and

are assisted by a mediator to find, themselves, a negotiated and amicable

solution to the conflict opposing them”. Moreover, in conjunction with

this piece of legislation, a settlement is defined in Article 1248 of

the Civil Code as a contract in which the parties avoid or settle a

dispute through reciprocal concessions.

Since 2001, the public mediation system in Portugal has

been divided into four different systems: the Justices of the

Peace, the Family Mediation System, the Workplace Mediation

System, and the Criminal Mediation System, each covered by

their respective legislation, providing mostly for the procedural

rules regarding said systems.

Unfortunately, between 2001 and 2013, although public

mediation systems were put in place and granted legislative

protection and frameworks, private mediation in itself was

never the object of a law, and was thus neither recognized as a

private means of dispute resolution nor granted the necessary

guarantees for it to be able to function.

In 2009, Portugal enacted legislation that would transpose

the Directive of the European Parliament and of the Council

of 21 may 2008 on certain aspects of mediation in civil and

commercial matters. On 29 June of that year, the Parliament

approved Inventory Law No 29/2009, which added three

articles related to the regulation of mediation: 249-A, C and

C, as well as 279-A to the Civil Procedure Code (CPC). These

articles mainly concern pre-trial mediation and the suspension

of prescription terms, the homologation (court confirmation)

of agreements obtained in pre-court mediation, confidentiality,

and the suspension of court proceedings by the judge.

Articles 249-A, B, C, and 279-A of the CPC transposing

50 • YAR • JULY 10, 2013


the Directive were a small step for mediation in Portugal,

although limited to very specific aspects of the process.

Portugal was therefore needing more extensive legislation on

the issue, which took place in early 2013 with the adoption of

Law 29/2013 of 19 April, establishing the general principles

applicable to mediation carried out in Portugal, as well as

the legal frameworks of civil and commercial mediation, of

mediators and of public mediation.

This article will focus on Chapters 1 and 2 of the new

mediation law (ML), and namely on the general principles that

now apply to all mediation that take place in Portugal.

Definitions and Scope

Article 2 of the new ML provides a definition of mediation

which is quite different from the previous one offered by Law No

78/2001 of 13 July. Indeed, the mediation is now defined as “a form

of alternative dispute resolution, carried out by public or private entities,

through which two or more parties who are in conflict seek to voluntarily

reach a settlement with the assistance of a mediator”. The mediator is

also defined in the same article as “an impartial and independent

third party, devoid of powers to impose upon the parties, who assists them

in trying to construct a final settlement regarding the object of the conflict”.

The first remark one can make regarding these definitions

is that they are quite broad. Indeed, regarding mediation itself,

this definition expressly includes both public and private

mediations, carried out within the public mediation systems

or before a private mediation entity. This constitutes a major

leap forward in Portuguese mediation, as prior to this new

ML, private mediation was neither recognized nor regulated

specifically. It now seems that private mediation is granted the

legitimacy it much needed, as it now has a general legislative

framework granting it the essential and fundamental protections

mediation and mediators need for it to develop, as we will see

in greater detail below.

Regarding mediators, the fact that a definition is given of

who mediators are suggests that they are now fully considered

as a professional category. Since their role is expressly defined

by law, alongside their rights and responsibilities as we will

also see below, this law will surely trigger a trend towards the

professionalization of mediators, which was not the case until

now. In fact, up the enactment of the new ML, anybody could

call themselves mediators, whether or not they had received

training, were certified, or even practiced. From now on,

mediators will surely be seen as a professional category and not

merely as individuals with abilities or skills.

Both above-mentioned definitions also reinforce one

of the core fundamentals of mediation, and remind us that

mediation is a process geared towards a possible settlement,

during which the neutral does not impose a solution to the

parties. One has to infer from this that outcome of a mediation

is controlled by the parties, who are the ones seeking resolution.

The mediator does not seek a resolution, and in no way is it his

or her role; rather, mediators simply assist the parties in seeking

their own settlement.

Regarding to scope of the mediations governed by the

new ML, article 3 provides that “the principles set forth in this

chapter apply to all mediations carried out in Portugal, regardless

of the nature of the conflict which is the subject of the mediation”.

Considering that the chapter this article refers to is entitled

“Principles”, we can assume that they will apply to any mediation

in Portugal, whether public or private, in Portuguese or in any

other language, by certified mediators and even by non-certified

mediators. The purpose of defining such a broad scope of which

mediations are to be governed by the principles laid out in the

new ML is truly to establish certain fundamental minimum

protections and guarantees to the mediation process, to the

mediators, as well as to the parties and other users of mediation

in Portugal. Whereas prior to this ML there were no transversal

principles of mediation applicable to all mediations in Portugal,

thus making it hard for mediation to be recognized as a

standalone process and as another credible means of alternative

dispute resolution, this new ML now provides all mediation

carried out in Portugal with the minimum protection it needed

so urgently. The main principles detailed in the new ML are

those of voluntariness, equality, impartiality, independence,

confidentiality, responsibility and enforceability.

Voluntariness, equality, impartiality and independence

Voluntariness is the first principle appearing in the new ML,

in article 4, which provides that the mediation process is voluntary,

albeit necessary for the parties to have given their informed

consent to carry out mediation. Article 4 further provides that

the parties are free to revoke this consent at any time during the

process, and that such revocation would not constitute a breach of

their duty to cooperate under the terms of the CPC.

This article poses a fundamental principle which has not

always been adopted in all countries. Indeed, voluntary mediation

can be opposed in principle to mandatory mediation, in which the

parties have an obligation to participate, to at least some extent, in

the mediation process. The choice to keep mediation voluntary in

Portugal can be explained by multiples factors.

One of the factors is that the legislator may have seen

mediation as a derivative of negotiation, whereby the parties

are not held to an obligation to negotiate a settlement. This

would explain why similarly to a negotiation process towards

finding a settlement, parties can leave or retract from mediation

at any time.

Another factor can be linked to the idea that in mediation,

the parties are the ones with control over the substance. As

such, they will be the ones to jointly and freely decide to be

held to an agreement. Since no one is imposing anything on

the parties in terms of the substance, unlike in judicial court

or arbitration, there is no reason to obligate them to mediate

towards an end they will not agree to or simply do not even

want to consider. The freedom to choose to be bound by the

mediated settlement agreement is closely linked to the degree

of commitment the parties will then have when fulfilling their

mediated obligations towards a resolution. Taking away some

of that freedom can be detrimental to the overall commitment

51 • YAR • JULY 10, 2013


to the process and to the outcome if an agreement is reached.

In addition, the fact that mediation is voluntary, meaning

that any party can leave the process at any time, puts the

parties on a more equal stand. If we consider two parties going

into mediation, where one of the parties has greater bargaining

power, for example due to more financial resources and better

legal defence, the fact that the other party has the possibility

to leave at any moment empowers said party throughout the

mediation and brings more balance around the mediation table.

This concept of equality is also another fundamental principle

of mediation set forth in the new ML.

Article 6 of the ML provides that the parties must be

treated equally throughout the entire mediation process,

whereby it is the mediator’s role to manage the process insofar

as to guarantee the balance of powers and the possibility for

both parties to participate.

Although it was explained earlier that the mediator had

no power to impose anything upon the parties, being a non-

deciding neutral, the mediator must nevertheless manage the

process to try and preserve the balance of powers between the

parties. It is this balance of powers coupled with the equality

of treatment of each party by the mediator that will give the

mediator the credibility he or she needs to assist them in trying

to reach an agreement. Treating each party equally will indeed

help creating trust between them and the mediator, enabling

a more open and constructive dialog. If such equality of

treatment disappears, then one of the parties will feel betrayed

and judged by the mediator, which is definitely not the finality

of mediation nor the reasons why parties choses mediation in

the first place rather than going before a court to be judged.

Article 6 of the ML also provides that the mediator must

act impartially, and is not an interested party in the mediation.

Once again, the mediator is not the one seeking a resolution,

it is the parties who are, with the help of the mediator to guide

and walk them through a process that will ultimately allow

them to build an agreement that is acceptable for them.

Confidentiality of mediation proceedings

One of the paramount guarantees necessary for

mediation to be successfully implemented is to ensure the

confidentiality of documents and communications arising out

of or in connection with the process. This allows the parties to

communicate freely towards reaching a settlement.

Portugal had initially provided for confidentiality in

mediation via article 249-C of the CPC, which states that “except

with respect to the obtained agreement, the content of the mediation

sessions is confidential, not susceptible to be evaluated as evidence in

court except in exceptional circumstances, namely when the protection of

the physical or moral integrity of any person is at issue”.

This already quite broad provision is revoked in favour

of the more complete provision contained in the ML, in article

5. Indeed, said article contains four sections on confidentiality,

the first restating that the mediation process is confidential

by nature, and that the mediator must keep confidential all

information obtained during the process, not being able to

make any use of such information for her or her benefit or for

the benefit of others. Section 2 further provides that anything

communicated to the mediator in confidence by one of the

parties cannot be communicated to the other parties without

the first party’s consent.

One of the most noteworthy evolutions from the

previous provision on confidentiality set forth in article 249-C

is definitely that anything communicated in confidence by one

party to the mediator cannot be shared with the other party.

This is especially relevant in the context of private sessions, or

caucuses, when the mediator has a meeting with just one of the

parties during the mediation process. This second section of

article 5 thus established the second degree of confidentiality

by law, which will surely reassure the parties to speak more

freely to the mediator during private sessions.

A surprising and somewhat disappointing omission in

this article regards information given by one party to another

party during the mediation. Indeed, whereas it is expressly

provided that anything communicated to the mediator during

the mediation process is confidential, the law is silent regarding

information exchanged by the parties themselves. Section 4

of article 5 of the ML tries to solve this omission by stating

that regardless of whether an agreement was reached or not,

the content of the mediation sessions could not be used before

a court or in arbitration. Nevertheless, this information is at

risk of being used by the parties outside of a courtroom or an

arbitral tribunal, for their benefit and to the detriment of other

parties.

Article 5 of the ML however provides a limit to the

confidential nature of mediation, namely for reasons of public

policy, for the protection of minors, when the physical or

psychological integrity of a person is at stake, or for the purpose

of enforcing the agreement in court.

One issue that is not covered by the ML with regard to

disclosure of confidential information by the mediator is the

case when the mediator is sued in court by one of the parties for

damages resulting from a violation of the mediator’s duties. In

such as case, as drafted, the law does not permit the mediator

to offer a defence using events or communications which took

place during the mediation. The first court decisions on the

matter will surely have to decide on this issue, namely whether

the disclosure of confidential information in order to protect

oneself in a lawsuit is justified by public policy or not.

Moreover, whereas article 249-C was silent regarding

sanctions in case of a breach of confidentiality during or after

mediation, article 8.2 of the ML provides that the mediator

is civilly liable for the damage caused by a breach of his or

her duties as a mediator under the new ML. This is also an

additional argument for the parties to trust in the process

of mediation, to speak freely to the mediator, to sometimes

share some sensitive information if relevant to the case, all

52 • YAR • JULY 10, 2013


this so that the mediator can better help the parties to reach

an agreement, which being responsible for his or her ethical

conduct as a mediator.

Enforceability of mediation agreements

Mediated settlement agreements consist of private

agreements signed by the parties to a dispute, and therefore lack

the legal effect that would allow them to be directly executed.

Prior to the ML, a mediated settlement agreement could

be enforceable if it gained the status of an ‘enforceable title’ by

meeting the requirements of sections 2 and 3 of article 46 of

the CPC. They state, respectively, that such titles require “the

specific documents, signed by the debtor, which contain the constitution

or the recognition of a pecuniary obligation, the amount of which must

be determined or determinable by simple arithmetic calculation as

established in its provisions, or an obligation to deliver a thing or to

perform an act” and “the documents which, by a special provision, are

attributed enforceable force”.

The second way a mediated settlement agreement

could become enforceable was to have it confirmed by a judge

pursuant to article 249-B of the CPC. This provision states that

“if the mediation results in an agreement, the parties may demand

its confirmation by a judge”. Section 3 of the same article adds

that “the judicial confirmation of the agreement obtained in pre-trial

mediation aims at verifying its conformity with the current legislation”.

It should be noted, however, that the confirmation by a

judge available under article 249-B of the CPC only seems to apply

to settlement agreements reached through public mediations. The

mew ML clarifies and sets forth a specific article to the end of the

enforceability of mediated settlement agreements.

Article 9 of the new ML indeed sets forth the provisions

on the enforceability of mediated settlement agreements. It

provides that such settlement agreements are automatically

enforceable, without the need for a homologation by a court, if

they fulfil certain requirements.

The first requirement enabling a mediated settlement

agreement to be automatically enforceable is if the law does not

require homologation for that type of dispute. One illustration

of this is the case when the settlement reached fulfils the

requirement of an enforceable title as mentioned above.

The second requirement is that the parties must have legal

capacity to execute the settlement agreement. This requirement

is consistent with the fact that settlement agreements are

private contracts binding the signing parties.

The two following requirements are that the mediation

was carried out under the terms provided by law, and that the

settlement agreement does not violate public policy.

The final requirement is that the mediator must be on

the list of mediators managed by the ministry of justice. This

means that settlement agreements will only be automatically

enforceable is the acting mediator is recognised and on the lists

of the Ministry of Justice. Conversely, if a foreign mediator

not registered on that list carries out mediation in Portugal

under the terms of the ML, the settlement agreement cannot

be automatically enforceable and will need to be homologated

by a judge.

This last requirement is quite surprising, as it seems

that it triggers a step backwards from the previously applicable

legislation, restricting the possibility of automatic enforceability.

Indeed, prior to the ML, if a settlement agreement fulfilled

the requirements of an enforceable title, it was automatically

enforceable, regardless of who the mediator was.

53 • YAR • JULY 10, 2013


It is also worth noting that a settlement agreement

reached in another European Union Member State, which

respects the first requirement and does not violate public policy,

is also automatically enforceable in Portugal provided it would

have been automatically enforceable in the Member State in

which it was reached.

Independence

Article 7 of the ML regards the principle of independence.

It provides that the mediator has a duty to safeguard the

independence inherent to his or her function, as well as to

conduct him or herself with independence, free from any

pressure, whether resulting from his or her own interests,

personal values or external influences.

The principle of independence is another fundamental

guarantee to the proper functioning of mediation as a process,

and it is coherent with the fact that the mediator is not an

interested party. Indeed, to best help the parties, the mediator

must treat them equally, and discover what they might need,

want, and be interested in, so that he can help both of them

mutually yet respectively maximize what they are seeking in

the mediation. If the mediator is not independent, it is very

unlikely that he or she equally helps both parties to reach what

they would consider an acceptable resolution for themselves,

regardless of what the mediator may want.

Although violations to the principle of independence are

more frequently associated with the mediator being motivated

by an external factor, a more frequent risk of violation of the

principle occurs when the parties are discussing issues which

are against the mediator’s beliefs or values. The mediator must

be particularly careful, during mediations, to set aside his or

her subjective and emotional reactions and emotions, and focus

on objective manners to assist the parties in what they came

to mediate. Oftentimes mediators can become uncomfortable

with a resolution being constructed by the parties during the

mediation process because said resolution is against what the

mediator believes is just, fair, acceptable, decent, or any other

personal interpretation of what is going on. However, the

parties are the ones who will have to live with the agreement,

not the mediator, so distance is sometimes necessary to remain

objective, professional and independent, even from one’s own

judgment, values or interests.

Competence and liability

Whereas the previous legislative framework of mediation

did not refer to any general duty for training or certification,

save for mediators acting in the public mediation systems, the

new ML, in article 8, sets forth certain provision regarding the

competence and responsibility of mediators. It provides that

mediators can participate in training in specific skills, both in

theory and in practice, in order to acquire the adequate skillset

for the exercise of their activity. The ML refers specifically

to courses approved by the Ministry of Justice, but is not

limitative.

It is worth noting that there does not seem to be a general

requirement to have attended a mediation course, nor to be a

certified mediator to do mediations in Portugal. As such, the

door is thus open to foreign mediator and to individuals with no

formal training who can be appointed as mediators. Although

there are legal limitations involved, namely the fact that

settlement agreements cannot be automatically enforceable in

Portugal, the legislator recognizes that anybody chosen by the

parties could potentially be appointed as mediator, similarly to

arbitrators.

Once again, as the parties are in control of the substance

of the mediation, they are free to choose anybody they wish,

and who would, according to them, best fulfil their needs during

the mediation process.

It is interesting to point out that on one hand, the

ML seems to be in favour of creating a professionalization

of mediators, and on the other, still keeps the selection of

mediators at the sole discretion of the parties, except in the

public mediation systems. Thus, anybody can potentially

become a mediator if selected by parties, and the ML could

potentially apply to all of such selected individuals.

With regard to the liability of mediators, as mentioned

above, article 8 provides that mediators are civilly liable for

any damage resulting from the violation of his or her duties in

mediation, namely under the terms of the ML.

Among some of these duties, which are listed in article

26 of the ML, and that are worth mentioning, mediators must

refrain from imposing an agreement on the parties, must inform

the parties on the nature, objective, fundamental principles and

procedural phases of mediation, and abide by the European

Commission’s European Code of Conduct for Mediators1.

Conclusion

In conclusion, Law 29/2013 of 19 April, establishing

the general principles applicable to mediation carried out in

Portugal, as well as the legal frameworks of civil and commercial

mediation, of mediators and of public mediation, with regard

to the general principles of mediation set for in Chapter 2 and

applicable to all mediation carried out in Portugal, now provide

a more complete base of fundamental rights and protections for

mediation, mediators and other users.

It will have taken over 10 years for Portugal to

recognize mediation as an autonomous means of alternative

dispute resolution, which can occur both in the public and

private sphere, and for which certain fundamental principles

such as voluntariness, confidentiality, equality, impartiality,

independence, competence, responsibility and enforceability

are the backbone enabling the growth of this increasingly

popular method of resolving disputes.

1 Available online at: http://ec.europa.eu/civiljustice/adr/adr_ec_code_conduct_en.pdfThomas Gaultier

54 • YAR • JULY 10, 2013


REPORT ON ICC YAF & YAR EVENT IN LISBON – MAY 16 2013

55 • YAR • JULY 10, 2013


YAR BRINGS ICC YAF TO PORTUGAL FOR THE FIRST TIME

By Pedro Sousa Uva and Gonçalo Malheiro

On 16 May 2013, YAR — Young Arbitration

Review co-hosted the first ICC Young

Arbitrators Forum (YAF) event in Portugal.1

The topic of the Conference was “Arbitral Tribunals and

State Courts – Partners or Competitors?” and included two panels

composed of foreign and Portuguese arbitration practitioners,

amongst whom YAR was proud to include recognized authorities

in international arbitration such as Steven Finizio and Dr.

Stavros Brekoulakis, who require no introduction.

The event took place at the premises of the Portuguese

Chamber of Commerce and Industry in Lisbon, where the main

Portuguese Commercial Arbitration Centre sits, and was attended

by approximately 80 young lawyers, arbitrators and practitioners.

The first panel of the conference addressed the topic of

Interim Relief in International arbitration. Gonçalo Malheiro,

Partner at PBBR, Co-Founder and Director of YAR — Young

Arbitration Review, was the Moderator of this first Panel.

Sofia Martins, Counsel at Uria Menéndez— Proença

de Carvalho, opened the proceedings and shared a brilliant

international perspective on the concurrent powers between

arbitral tribunals and state courts regarding interim measures. As

Sofia concludes in the article based on her presentation at the

Conference — which YAR publishes in this Edition —“In short,

state courts definitely play a key role in awarding interim relief in

respect of arbitral proceedings. However, their function should be to

complement and balance the merits of the arbitral proceedings.”2

Steven Finizio followed Sofia Martins and enlightened the

audience about the efficiency — or otherwise —of Emergency

Arbitrator provisions contained in the rules of several leading

arbitral institutions for purposes of obtaining interim relief. As

Steven Finizo explains, “Emergency Arbitrator procedures are now a

feature of the AAA/ICDR, SCC, SIAC, ICC, Swiss Chambers, NAI,

CANACO, ACICA, and HKIAC rules, with others likely to follow”.3

Amongst the several issues to take into account when thinking

about resorting to emergency arbitrators for interim relief, fees

are something to consider: “The fees that must be paid by a party

that seeks emergency relief can be substantial: the ICC Rules require an

applicant to pay a US$40,000 fee (and the ICC Court may increase

the amount); the SCC Rules require an applicant to pay a €15,000 fee

(subject to the SCC Board’s authority to modify that amount).”4

Later, Alejandro Lopez Ortiz, Counsel at Hogan Lovells

International LLP, Madrid, approached the topic of enforcement

and interim measures from two angles: on one hand, judicial

enforcement of interim measures issued by arbitrators; on

the other hand, interim measures issued in enforcement

proceedings. This presentation allowed the audience to gain a

56 • YAR • JULY 10, 2013


practical understanding of the raised issues.

The floor was then passed to Stamatios Tsetos, Partner at

Leboulanger & Associés, Paris and ICC YAF Regional Coordinator,

who provided the audience with a French flavor on the topic

of interim measures in international arbitration, specifically the

interaction between National Courts and Arbitral Tribunals.

Stamatios spoke about the overriding principles applicable to the

intervention of the French Courts, both prior to the constitution

of the Arbitral Tribunal and following the constitution of the

Arbitral Tribunal. The presentation concluded with the idea

that, under French law, the arbitrators have extensive powers

related to interim relief while national courts maintain their

supportive role. This conclusion is confirmed by the new French

law provisions on domestic and international arbitration: article

1468 and 1469 of the French CPC.

Porfírio Moreira, Associate at Cardigos & Associados,

closed the panel with interesting remarks on preliminary

orders from a Portuguese Law perspective. Porfírio addressed

the pros and cons of preliminary orders with reference to the

UNCITRAL Model Law and specifically to the new articles of

the Portuguese Law on voluntary arbitration. Porfirio made

the following observation: “At a national level, various questions

in connection with arbitral interim measures, and a fortiori with

POs, remain unanswered, among which the crucial issue of whether

contravening an interim measure (including a PO) delivered by

an arbitral tribunal may qualify as a crime under the Portuguese

jurisdiction.”5

On the second panel, the four speakers dealt with the

taking of evidence in international arbitration from several

perspectives. Nuno Lousa, Counsel at Linklaters, Lisbon,

moderated the panel.

Dr. Stavros Brekoulakis gave an insightful perspective

on organizing arbitral proceedings, document production,

fact and expert witnesses and cross-examination based on

the results published on the “2012 International Arbitration

Survey: Current and Preferred Practices in International Arbitration”,

conducted by the School of International Arbitration at Queen

Mary University of London, which is the second empirical

research project to have been sponsored by White & Case

LLP.6 Amongst the many interesting results of the Survey, Dr.

Stavros Brekoulakis referred to the significant reliance of the

arbitration community on the IBA Rules on the Taking of

evidence (adopted in 60% of arbitrations, either as guidelines

(53%) or as binding rules (7%), according to the cited Survey).

This empirical perspective was followed by an interesting

international perspective on written witness statements by

Stavroula I. Angoura, Partner at Katsica, Samoladas, Associates and

Academic research assistant at the International Hellenic University.

In her presentation, Stavroula commented, inter alia, on the use

of affidavits and especially the use of written witness statements

as a common practice in contemporary international commercial

arbitration; on the admissibility of written statements under the

LCIA Rules, WIPO Rules, UNCITRAL Rules and the IBA Rules

on the Taking of Evidence; and on good practice and on advantages

and disadvantages of written witness statements. Stavroula I.

Angoura concluded her presentation with some interesting remarks

on timings for submission of written statements.

The floor was then passed to Luis Guerrero, Partner at

Dinamarco, Rossi, Beraldo & Bedalque, São Paulo, who focused

on “Learning to deal with different Legal Systems. Taking of evidence in

international commercial arbitration”, the topic of his presentation.

Luis gave the audience both an international and a Brazilian

approach to the subject, making reference to the typical features

of common law and civil law countries which may mingle in the

taking of evidence in international arbitration.

Pedro Sousa Uva, Associate at Miranda Correia

Amendoeira & Associados, Co-Founder and Director of YAR

– Young Arbitration Review, closed the second panel with

the topic of State Court assistance in the Taking of Evidence

under Portuguese Arbitration Law. After some preliminary

remarks about party autonomy in the procedure applicable to

arbitration and on evidence and collection of evidence under

Portuguese Arbitration Law, Pedro addressed his topic in a

practical perspective in order to answer to five main questions:

(i) Who may request the taking of evidence?; (ii) From whom

may it be requested?; (iii) What exactly may be requested?; (iv)

Where is the evidence produced?; and (v) What if the request

comes from parties in an arbitration seated outside Portugal?7

YAR – Young Arbitration Review would like to thank the

International Chamber of Commerce (ICC), the Portuguese

Chamber of Commerce and Industry and our sponsors Uria

Menéndez – Proença de Carvalho; Wilmer Cutler Pickering

Hale & Dorr LLP and PBBR law firm for their support. YAR

would also like to thank all the speakers at the Conference for

their time and friendship, especially those coming from Brazil,

London, Greece and Paris

Pedro Sousa Uva and Gonçalo Malheiro

1. http://www.iccwbo.org/Training-and-Events/All-events/Events/2013/ICC-YAF-Conference-in-Lisbon/2. “Concurrent powers between arbitral tribunals and state courts regarding interim measures”, by Sofia Martins and Miguel Oliveira Martins, the latter also a Lawyer at Uria

Menéndez – Proença de Carvalho.3. “Interim Relief in International Arbitration: Emergency Arbitrator Provisions”, by Steven P. Finizio and Jeremy Bocock, Wilmer Cutler Pickering Hale & Dorr LLP.4. Idem.5. “Arbitral Tribunals and State Courts: Partners or Competitors? —Some remarks on preliminary orders from a Portuguese law perspective”, by Porfírio Moreira, Associate

at Cardigos & Associados.6. For more information on this Survey, please read the recent article of Dr.Stavros Brekoulakis “Analysis of the Survey on the School of International Arbitration on Choices

and Practices in international Arbitration”, published in Edition 9 of YAR – Young Arbitration Review (April, 2013).7. “State Courts’ assistance in taking evidence under Portuguese Arbitration Law”, by Pedro Sousa Uva, Associate at Miranda Correia Amendoeira & Associados, Sociedade

de Advogados, RL.

57 • YAR • JULY 10, 2013


INTERIM RELIEF IN INTERNATIONAL ARBITRATION: EMERGENCY ARBITRATOR PROVISIONS

By Steven P. Finizio and Jeremy Bocock

The rules of leading arbitration institutions

expressly authorize arbitral tribunals to grant

interim relief.1 In most circumstances, an

arbitral tribunal’s authority to do so is concurrent with that of

state courts. This means that, unless the parties to an arbitration

agreement have agreed otherwise, they may seek interim

relief from either the arbitral tribunal or a court of competent

jurisdiction, and this leaves it to the party seeking interim relief

to determine the forum (or forums) that it believes will be most

effective.2

Some arbitration rules suggest that, after the arbitral

tribunal has been constituted, the parties’ primary forum

for interim relief should be the tribunal,3 and a number of

institutions have taken steps to fill the (sometimes very lengthy)

gap that exists before the arbitral tribunal is constituted. In

particular, many institutions have introduced emergency

arbitrator procedures which provide that the parties can seek

interim relief from a specially appointed temporary “arbitrator”

before the arbitral tribunal is constituted. These provisions

make arbitration potentially a more self-contained process,

and, in theory at least, further reduce the role of state courts.

Some commentators have described this as an effort to provide

“all in one” services or “one stop shopping”.4

Emergency arbitrator procedures are now a feature

of the AAA/ICDR, SCC, SIAC, ICC, Swiss Chambers, NAI,

CANACO, ACICA, and HKIAC rules, with others likely to

follow.5 Some of the common features and notable differences

in these provisions are described below.

Opt out mechanism

In contrast to the ICC’s little-used Pre-Arbitral Referee

procedure, which only applies if parties opt in by expressly

incorporating it into their arbitration agreement, the recently

issued emergency arbitrator provisions all are default rules.

This means that the emergency arbitrator procedure is

incorporated into any arbitration agreement entered into after

the rule became effective - unless the parties expressly opt out.6

The SCC’s default provision goes even further than others - it

applies retroactively to arbitration agreements made before the

rule was enacted, applying to all SCC arbitrations commencing

after 1 January 2010.

58 • YAR • JULY 10, 2013


Time for application

All of the rules allow a party to request an emergency

arbitrator before the appointment of the tribunal.7 Both the

ICC and SCC go further and allow a request to be made

before the arbitration commences.8 The ICC Rules limit this

by requiring that a request for arbitration to be filed within

10 days of emergency relief application,9 while the SCC Rules

provide that the emergency arbitrator’s decision will expire if

no request for arbitration has been filed within 30 days from

the date of the emergency decision.10 Other rules only permit

an emergency arbitrator request to be made with or after the

notice of arbitration.11 All of the rules provide that requests for

an emergency arbitrator cannot be made after the tribunal has

been fully constituted.12

Limitations on scope

None of the recently issued emergency arbitrator rules

permit ex parte requests.13 Nor do any of the new provisions

purport to change the nature of the relief available to the

emergency arbitrator. Not surprisingly, none of the emergency

arbitrator provisions purport to permit relief against non-parties

to the arbitration, although this raises at least some potential

complications under the rules that permit interim relief to be

sought (and granted) before an arbitration is commenced.

Appointment of the emergency arbitrator

All of the rules provide for the arbitral institution to appoint

the emergency arbitrator, and to do so very quickly (within 24

hours under the SCC Rules;a business day under the AAA/ICDR

and SIAC Rules; or two days under ICC Rules).14 The rules

also generally prohibit an emergency arbitrator from acting as

an arbitrator in the same dispute (without the parties’ consent)

and require that the emergency arbitrator be independent and

impartial.15 The rules are less clear about how challenges to an

emergency arbitrator will be handled on an expedited basis or

whether institutions will be less concerned about conflicts given

the temporary nature of the emergency arbitrator’s mandate.

Identifying and appointing an emergency arbitrator may

not be a simple task for institutions, particularly if requests

become more routine. The number of arbitrators who are

immediately available, capable of acting as an emergency

arbitrator and appropriate for the particular dispute will likely be

limited. Over time, it will be important to see how an institution

identifies and selects emergency arbitrators, how wide its pool of

candidates is, and how transparent it is about the process.

While it may seem both obvious and necessary to have

the institution appoint emergency arbitrators, some less well-

informed parties may be surprised to find that a potentially

significant decision has been made on a very short deadline at

the outset of the case by a decision-maker selected in less than

a day and in a manner which may be very different from the

process the parties described in their arbitration agreement.16

Indeed, a party that expects the dispute to be decided by a

multi-national three-member tribunal selected at least in

part by the parties may be unhappy when a single arbitrator

appointed by the institution makes a decision that may affect

the conduct of its business. Whether or not they should have

been better informed about innovations in an institution’s

rules, those parties also may not be happy to be told that they

agreed to this procedure because they failed to opt out when

they adopted that institution’s rules.

Process and time for decision

The rules all generally require that the parties have the

opportunity to be heard and that the emergency arbitrator issue

a reasoned decision,17 but otherwise provide the emergency

arbitrator with broad discretion on how to proceed and to rule

on his or her own authority.18

The institutions vary in prescribing the time for a

decision: the SCC Rules provide for a decision within five

days;19 the ICC Rules provide 15 days,20 while the AAA/ICDR

and SIAC do not set any time limit.

Urgency requirement and standard of proof

Most emergency arbitrator provisions do not refer to the

standard for obtaining interim relief (although a number expressly

note that any relief may be subject to payment of security by the

requesting party).21 While some rules expressly require that the

applicant must show that relief is needed on an emergency basis,22

or that relief cannot await the constitution of the tribunal,23 it is

not clear what, if anything, this adds to the general formulation

for interim relief, which usually requires some showing of urgency.

It may be that some emergency arbitrators will decline to grant

relief where a the requesting party cannot meet a heightened

standard of “urgency,” knowing that the request can be pursued

further with the tribunal, but this is not yet clear.

Form of decision

Interim relief by definition is not final, and there are

significant issues with regard to enforcing interim relief granted

by arbitral tribunals in national courts under either the New

York Convention or national arbitration legislation. The nature

of the emergency “arbitrator” function – a temporary authority

granted to decision-maker who does not have the authority to

issue a final award – means that there is even greater uncertainty

about whether relief granted by an emergency arbitrator can be

enforced.24 This is true regardless of whether the decision is

characterized as an interim award or an order.

Institutions have anticipated, but not resolved, this

enforcement issue by providing that the emergency arbitrator’s

decision may be in the form of either an order or an award,25

although, notably, the ICC Rules provide that the decision is to

be made in the form of an order.26

End of mandate and binding effect of decision

The emergency arbitrator’s mandate does not end when

a decision is rendered. Rather, the mandate expires when the

59 • YAR • JULY 10, 2013


tribunal is constituted (which may be upon appointment or

upon receipt of the file, depending on the rules).27 Until that

mandate expires, the emergency arbitrator is authorized to

modify, terminate or annul any previous decision.28

None of the rules require that the tribunal reaffirm the

emergency arbitrator’s decision in order for it to remain in force

after the emergency arbitrator’s mandate ceases. Save for a couple

of very particular exceptions (e.g., where a request for arbitration

has not been filed or the tribunal has not been constituted),29

the emergency arbitrator’s decision remains binding until the

tribunal issues a final award or otherwise reconsiders the interim

relief granted by the emergency arbitrator.30

All the emergency arbitrator provisions make clear,

however, that the tribunal is not bound by the emergency

arbitrator’s decision, and the tribunal may reconsider, amend

or vacate that decision.31

Costs

The fees that must be paid by a party that seeks

emergency relief can be substantial: the ICC Rules require an

applicant to pay a US$ 40,000 fee (and the ICC Court may

increase the amount);32 the SCC Rules require an applicant to

pay a €15,000 fee (subject to the SCC Board’s authority to

modify that amount).33

Most rules expressly provide that the emergency

arbitrator may apportion the costs of the procedure, which may

include legal fees, subject to the tribunal’s final decision on cost

allocation.34 How tribunals will treat the costs relating to relief

that was granted by an emergency arbitrator and later vacated

or substantially modified by the tribunal is not clear.

Effect and use of emergency arbitrator provisions

Despite the proliferation of emergency arbitrator rules,

and the almost entirely favorable commentary on them, it is too

early to tell if parties will embrace these new provisions, whether

there will be a significant number of requests for emergency

relief or how these provisions will affect the relationship between

arbitration and national courts with regard to interim relief.

To date, there have only been a small number of emergency

arbitrator requests. The information that institutions have

provided about these first cases is useful, but it is not yet

possible to get a sense of important aspects of how these rules

will work. Based on information made available by the SCC

and SIAC, it appears that in the first few cases applying their

new rules, those institutions were able to appoint emergency

arbitrators very quickly and the emergency arbitrators very

quickly rendered decisions.35 It is perhaps also notable that in

one out of the four SCC cases administered in 2010, three out

of the first four reported SIAC cases, and 11 of the 14 reported

AAA/ICDR cases, the emergency arbitrator granted some form

of interim relief.36 It also appears that two out of three of the

first SIAC cases settled after emergency interim relief was

granted.37

These very first cases tell us little about how well

institutions will perform their appointment function if

emergency requests become routine (or how much information

they will continue to disclose about emergency arbitrator cases).

To date, emergency arbitrators seem willing to grant relief, but

it is not clear whether that reflects a more liberal approach

(perhaps due to the temporary nature of the mandate), or how

the interplay between the emergency arbitrator and the tribunal

may influence the decision-making of either (or of courts).38

Nor is it clear whether the settlements that have followed

grants of emergency relief in some of these initial emergency

arbitrator cases reflect a meaningful pattern, although it is not

60 • YAR • JULY 10, 2013


surprising that a significant interim relief order made shortly after (or

even before) a request for arbitration can create serious settlement

pressure. Whether this is a good thing is another question, and

some parties may be concerned that these new rules entrust such a

potentially influential decision to an emergency arbitrator hurriedly

appointed by the institution, not the parties. This may lead some

parties to avoid such provisions; others will likely view this as a

better alternative to a similar decision from a court.

The availability of an emergency arbitrator certainly will

mean that some particularly urgent interim relief requests will

now be made through arbitral institutions when before they

may have been made to a court (although it is also possible

that some of those requests would never have been made or

would have been made to the tribunal after it was constituted).

However, in many cases a party may not be able to meaningfully

enforce its legal rights without effective interim relief. While

some parties may be happy to have a third bite at the proverbial

fruit, unless and until interim relief granted by arbitrators can

be routinely enforced, a national court may be a party’s only

option for timely, effective interim relief. As things stand,

emergency arbitrator provisions cannot make arbitration “one-

stop shopping,” and parties will continue to need to weigh how

effective (and efficient) resort to an emergency arbitrator will

be within the context of their particular dispute.

Steven P. Finizio and Jeremy Bocock

1. This article uses “interim relief” generally to refer to interim, emergency, provisional, or conservatory measures intended to preserve the status quo pending a merits decision.

2. This often means balancing a number of competing considerations. Pursuing interim relief through an arbitral tribunal may mean greater confidentiality and may avoid unfamiliar and unfriendly courts in the place (or places) where the other party has assets or activities. At the same time, relief granted by an arbitral tribunal may not be enforceable and tribunals do not have the same coercive authority to compel compliance as courts.

3. For example, Article 28.2 of the ICC Rules refers to requests to a judicial authority “[b]efore the file is transmitted to the arbitral tribunal, and in appropriate circumstances even thereafter.” Similarly, Article 26.3 of the SIAC Rules suggests that parties may only seek interim relief from “a judicial authority prior to the constitution of the Tribunal” and “in exceptional circumstances thereafter.”

4. See, e.g., Justin D’Agostino, “First aid in arbitration: Emergency Arbitrators to the rescue,” KluwerArbitration Blog 15 November 2011.5. There are alternative approaches to addressing the delay before the arbitral tribunal is constituted, including the LCIA’s procedure for expedited formation of the tribunal

(LCIA Rule 9.1) and expedited briefing (as found in ICSID Rule 39). This issue also is more difficult to address in ad hoc proceedings. 6. AAA/ICDR Rules, Art. 37.1; SIAC Rules, Sch. 1, Art. 11; ICC Rule 29.6(b).7. SCC Rules, App. II, Art. 1.1; SIAC Rules, Sch. 1, Art. 1.1; ICC Rules, Art. 29.1.8. SCC Rules, App. II, Art. 1.9. ICC Rules, App. V, Art. 1.6. The emergency arbitrator can determine that a longer time period is necessary.10. SCC Rules, App. II, Art. 9.4.(iii).11. See, e.g., SIAC Rules, Sch. 1, Art. 1.12. AAA/ICDR Rules, Art. 37.2; SCC Rules, App. II, Art. 1.1; SIAC Rules, Sch. 1, Art. 1; ICC Rules, Art. 29.1 and App. V, Art. 2.2;.13. ICC Rules, App. V, Art. 1.2, 1.5; SCC Rules, App. II, Art. 3; SIAC Rules, Sch. 1, Art. 1.14. AAA/ICDR Rules, Art. 37.3; SCC Rules, App. II, Art. 4.1; SIAC Rules, Sch. 1, Art. 2; ICC Rules, App. V, Art. 2.1. 15. AAA/ICDR Rules, Art. 37.3 & 37.6; SCC Rules, App. II, Art. 4.3 (referring to SCC Rules, Art. 15 on challenges of arbitrators), and App. II, Art. 4.4; SIAC Rules, Sch. 1,

Art. 3 & 4; ICC Rules, App. V, Art. 2.4, 2.5 & 2.6.16. SIAC contrasts an emergency arbitrator to a “conventionally-appointed” tribunal.17. AAA/ICDR Rules, Art. 37.4 & 37.5; SCC Rules, Art. 19 (by application of App. II, Art. 7 & Art. 8.2(ii)); ICC Rules, App. V, Art. 5.2 & 6.3; SIAC Rules, Sch. 1, Art. 5 & 6.18. For example, the AAA/ICDR and SIAC rules provide that the emergency arbitrator shall expeditiously establish a schedule providing a reasonable opportunity to all

parties to be heard, and may provide for proceedings by telephone conference or on written submissions as alternatives to a formal hearing. 19. SCC Rules, Art. 8.1.20. ICC Rules, App. V, Art. 6.4.21. AAA/ICDR Rules, Art. 37.7; SCC Rules, Art. 32.2 (referred to in App. II, Art. 1.2); SIAC Rules, Sch. 1, Art. 8; ICC Rules, App. V, Art. 6.7.22. SIAC Rules, Sch. 1, Art. 1.23. ICC Rules, Art. 29.7.24. Article 17 H of the 2006 version of the UNCITRAL Model Law provides that an interim measure issued by an arbitral tribunal shall be enforced upon application

to a competent court, but that provision does not exist in the 1985 version of the Model Law. This means that very few countries currently have an arbitration law expressly requiring enforcement of interim measures issued by an arbitral tribunal and, other than Singapore (which has modified its law to provide for the recognition and enforcement of relief granted by emergency arbitrators), it does not appear that any other jurisdiction expressly provides for enforcement of interim relief granted by an emergency arbitrator.

25. See AAA/ICDR Rules, Art. 37.5; SCC Rules, App. II, Art. 1.2 (referring to Art. 32.3, which provides that an “interim measure shall take the form of an order or an award”); SIAC Rules, Sch. 1, Art. 6.

26. ICC Rules, Art. 29.2, & App. V, Art. 6.1. 27. AAA/ICDR Rules, Art. 37.6; SCC Rules, App. II, Art. 1.2; SIAC Rules, Sch. 1, Art. 7. The ICC Rules do not include language expressly referring to the end of the

emergency arbitrator’s mandate, although such a limit is implicit in Article 29.1 of the ICC Rules.28. AAA/ICDR Rules, Art. 37.5 (“emergency arbitrator may modify or vacate the interim award or order for good cause shown”); SCC Rules, App. II, Art. 9.2 (emergency

arbitrator can amend or revoke the decision upon a reasoned request of a party); SIAC Rules, Sch. 1, Art. 6; ICC Rules, App. V, Art. 6.8.29. See, e.g., ICC Rules, App. V, Art. 1.6 (if a request for arbitration has not been filed within 10 days of receipt of the emergency application); SCC Rules, App. II, Art.

9.4(iii) (if a request for arbitration is not made within 30 days from the date of the emergency decision or the case has not been referred to a tribunal within 90 days); SIAC Rules, Sch. 1, Art. 7 (if the tribunal is not constituted within 90 days of the emergency order.

30. SCC Rules, App. II, Art. 9.4(ii); SIAC Rules, Sch. 1, Art. 7; ICC Rules, App. V, Art. 6.c).31. AAA/ICDR Rules, Art. 37.6; SCC Rules, App. II, Art. 9.5; SIAC Rules, Sch. 1, Art. 7; ICC Rules, Art. 29.3 & App. V, Art. 6.6.32. ICC Rules, App. V, Art. 7.33. SCC Rules, App. II, Art. 10. Neither the AAA/ICDR nor SIAC specify any fixed application fee. 34. AAA/ICDR Rules, Art. 37(9); SIAC Rules, Sch. 1, Art. 11; ICC Rules, Art. 29.4 (tribunal authority to reallocate costs fixed by emergency arbitrator); App. V, Art. 7.3 & 7.4

(emergency arbitrator authority to fix costs, including legal fees). The SCC Rules differ in that the decision on costs is reserved for the tribunal. See SCC Rules, Art. 10.5.35. See Lundstedt, “SCC Practice: Emergency Arbitrator, Decisions rendered 2010,” Arbitration Institute of the Stockholm Chamber of Commerce, p. 11. The AAA/ICDR

emergency provision, which came into force in 2006, had been invoked fourteen times as of October 2010 but few specific details are available. See Hosking & Valentine, “Pre-arbitral Emergency Measures Of Protection: New Tools For An Old Problem,” in Commercial Arbitration 2011: New Developments and Strategies for Efficient, Cost-Effective Dispute Resolution, 199, p. 5. The ICC has not released any statistics concerning the use of its emergency arbitrator provision, which came into force on 1 January 2012.

36. Lundstedt, p. 11; Hosking & Valentine, p, 5; Bose & Meredith, “Emergency Arbitration Procedures: A Comparative Analysis,” International Arbitration Law Review 2012 (5), pp. 188-190.

37. Bose & Meredith, pp. 188-190.38. Some of the questions that parties will want to consider include: whether an emergency arbitrator will be more inclined to grant relief knowing that the tribunal is not

bound by the decision or whether the opportunity for a party to pursue the requested relief from the tribunal will make the emergency arbitrator more reluctant to grant relief, particularly in the absence of a showing of true emergency; whether a useful opportunity to educate the tribunal in the parties’ view of the merits and/or equities is lost if an interim relief application is addressed to an emergency arbitrator rather than the tribunal; how much influence, if any, an emergency arbitrator’s decision will have an on the tribunal; and whether an emergency arbitrator’s decision will influence a court asked to order relief in aid of the same arbitration.

61 • YAR • JULY 10, 2013


CONCURRENT POWERS BETWEEN ARBITRAL TRIBUNALS AND STATE COURTS REGARDING

INTERIM MEASURESBy Sofia Martins and Miguel Oliveira Martins

Introduction

It is widely acknowledged that arbitration is

not self-sufficient. Somewhat ironically, arbitral proceedings

occasionally require the involvement of national courts to ensure

the proper conduct of the arbitration or even to overcome some

of the shortcomings that arbitration may present, particularly

when parties are recalcitrant or employ dilatory tactics or other

forms of obduracy, known to some as “guerrilla tactics”.

Inevitably, this paradox may lead to some troublesome

concerns regarding the rightfulness and extent of state courts’

intervention, as well as the fine line that separates intervention

from interference.

In practice, such concerns arise, for instance, when interim

measures are deemed necessary to uphold or maintain the status

quo during arbitral proceedings and until its outcome. As a result,

most modern arbitration legislation and institutional rules allow

arbitral tribunals to issue interim measures of relief. Nonetheless,

some situations may occur where it is necessary to resort to the

assistance of state courts to provide that “extra enforceability.”

Therefore, although the recourse to state courts is patently

obvious when national legislation prevents arbitral tribunals

from issuing interim measures1, the predicament comes to

surface in several situations, such as: (i) when interim relief is

necessary prior to the constitution of the arbitral tribunal; (ii)

when interim measures are intended to affect and bind third

parties not subject to the arbitration proceedings; (iii) when

international enforceability is required outside the scope of

the 1958 Convention on the Recognition and Enforcement of

Foreign Arbitral Awards (the “New York Convention”); and (iv)

when ex parte relief is truly relevant.2

As a result, the key role that state courts may play in

conjunction with arbitral proceedings is understandable. Even

so, this organic interaction between both courts cannot be

mistaken for a perfect symbiosis, as it is certainly not free from

idiosyncrasies.

62 • YAR • JULY 10, 2013


One of those quirks lies precisely in the fact that resorting

to a state court was historically considered by some to be a

breach of the arbitration agreement.

In this respect, the matter was put to rest by most

modern legislation and institutional rules, which state that

judicial interim relief is not incompatible with an arbitration

agreement. This compatibility is specially visible in the

International Chamber of Commerce (“ICC”) Rules3, the

London Court of International Arbitration (“LCIA”) Rules4,

the UNCITRAL Arbitration Rules (as revised in 2010), as

well as in the UNICTRAL Model Law5 and Model Law based

legislation, such as the PAL6 (“Portuguese Arbitration Law”)

and the Spanish Arbitration Act.

Some reservations are also made, however, regarding the

rightful receiver of the interim application, which raise some

doubts as to whether the application should be directly made

to state courts or to the arbitrators themselves and in what

circumstances.

Coordination of overlapping powers

In order to respond to this sensitive issue, both the ICC

and LCIA rules, for example, clearly establish the so called

restricted access approach, stating that interim measures may

only be applied for in state courts in limited circumstances once

the arbitral tribunal has been formed. Hence, the state court’s

role is considered as complementary prior to the appointment

of the arbitral tribunal, and subsidiary thereafter.

However, most of the UNCITRAL Model Law based

legislations (such as the PAL), establish the so called freedom

of choice approach, which appears to allow for a total overlap

of powers between arbitral and state court jurisdiction7.

Even so, such freedom cannot be construed as a true carte

blanche, as such prerogative shall, evidently, depend on the stage

of the arbitration itself. In fact, in the absence of emergency

arbitrator provisions prior to the formation of the arbitral

tribunal, for instance, the party seeking interim relief is forced

at that stage to resort to state courts8. Conversely, if the arbitral

tribunal has already been formed, it is paramount to take the

respective practical implications into consideration9, such as: (i)

the probability of the other party not abiding voluntarily by the

interim measure, thus requiring enforcement by state courts10;

(ii) the special technical and/or complex nature of the underlying

problem, thus requiring the expertise and knowledge of the

arbitral tribunal; (iii) the aforementioned necessity of seeking

interim relief against third parties, directing the applicant to

state courts; (iv) the range of each measure available to each

type of court; and (v) the sensitive nature of the issue at hand,

which may tilt the scale towards the confidentiality ensured by

arbitral proceedings.11

Moreover, one should not ignore the theoretical

implications of this alleged freedom of choice.

Firstly, emphasis must be given to the risk of conflicting

decisions and the existence, or not, of an effect of estoppel between

the decisions of both state courts and arbitral tribunals.12

Indeed, a party seeking interim relief could theoretically apply

for such measure in both types of courts, ultimately taking

advantage of the most favourable decision.

From the arbitral tribunal’s perspective, to prevent any

inconsistencies, the UNCITRAL Model Law based legislations13

(such as the PAL14) clearly state that an arbitral tribunal may

reconsider its own decisions, thus not bestowing any res judicata

effect on interim decisions. Still, the question remains open

regarding the power of the arbitral tribunal to reconsider a state

court’s interim measure and even reversing it.

A preeminent line of thought15 sustains that the principle

of party autonomy endows arbitral decisions with the power

ultimately to prevail over the state courts’ decisions, based on

the construction that if the parties chose to submit the merits

of the dispute to a specially created arbitral tribunal, this means

their intention was for that particular tribunal finally to rule on

the merits, not state courts. Consequently, a state court order is

deemed temporary in nature, not depriving the arbitral tribunal

from rendering further interim relief or a final remedy, even if

either of those might contradict a prior state court decision.

In addition, regardless of the principle of party autonomy,

common sense would still dictate a similar approach whenever

new facts or evidence arise after the decision of the state court,

when the underlying criterion to reach the decision differs in

both jurisdictions, or even when both courts analyse the matter

under a different law.

In any case, even though it seems that decisions of arbitral

tribunals should prevail over those of state courts, it is up to the

arbitrators themselves to decide each matter on a case-by-case

basis. As such, in practice, the freedom of choice mentioned

above is only a prerogative to the extent that a party may opt

for a certain path, even if one of the trails proves to be a dead-

end when conditioned by the principle of party autonomy.

Likewise, by this very same line of reasoning, a measure

granted by an arbitral tribunal cannot be reviewed by a state court.

From the state courts’ perspective, and despite the

UNCITRAL Model Law granting state courts the same

powers as arbitral tribunals in respect of interim relief16, in an

apparent total freedom of choice, case law has demonstrated

that state courts have chosen to interpret such freedom in a

restrictive manner. In, fact, on the one hand, some jurisdictions

have interpreted their roles as being complementary to the

arbitral proceedings. On the other hand, the decision-makers

have radically strived to avoid, at all cost, a multiplicity of

proceedings, thus refusing to issue any potentially-overlapping

decision.17

Conclusion

In a nutshell, although interim relief from state courts

is undoubtedly necessary, given particular circumstances of a

63 • YAR • JULY 10, 2013


practical or theoretical nature, even when there appears to exist

a total freedom of choice between arbitral tribunals and state

courts, this apparent freedom should not be taken literally.

From a practical and strategic perspective, the right

course of action and access to the most efficient remedy will

ultimately vary according to each case and the nature of the

relief sought. One must constantly take into consideration the

relevant arbitration rules and the applicable procedural law or

arbitral legislation so as to determine whether the power to

grant the relief sought is conferred upon the arbitral tribunal or

the courts and whether an application is best made to the one

or the other.

From a theoretical perspective, such an approach must

always consider the principle of autonomy of the parties

and must be cautiously interpreted to avoid an abusive or

unintended outcome. State courts should, in turn, interpret

the principle of compatibility as the power to grant provisional

measures and complement arbitral proceedings, simultaneously

resisting applications of these powers which may, in the end,

subvert the objectives of the powers themselves.

In short, state courts definitely play a key role in awarding

interim relief in respect of arbitral proceedings. However, their

function should be to complement and balance the merits of

the arbitral proceedings.

Sofia Martins and Miguel Oliveira Martins

1. As is the case in Italy, for example. See article 818 of the Code of Civil Procedure. 2.Many national laws on civil practise do not allow for ex parte applications and even the United Nations Commission on International Trade Law Model Law on

International Commercial Arbitration (the “UNCITRAL Model Law”) only allows for a very limited application of ex parte relief when dealing with preliminary orders. As is also the case of the UNCITRAL Rules (as revised in 2010), used both in ad hoc and institutional proceedings. See, in particular, article 26.

3. Article 28(2) of the ICC Rules on Conservatory and Interim Measures: “Before the file is transmitted to the arbitral tribunal, and in appropriate circumstances even thereafter, the parties may apply to any competent judicial authority for interim or conservatory measures. The application of a party to a judicial authority for such measures or for the implementation of any such measures ordered by an arbitral tribunal shall not be deemed to be an infringement or a waiver of the arbitration agreement and shall not affect the relevant powers reserved to the arbitral tribunal. Any such application and any measures taken by the judicial authority must be notified without delay to the Secretariat. The Secretariat shall inform the arbitral tribunal thereof.”

4. Article 25(3) of the LCIA Arbitration Rules on Interim and Conservatory Measures: “The power of the arbitral tribunal (...) shall not prejudice howsoever any party’s right to apply to any state court or other judicial authority for interim or conservatory measures before the formation of the arbitral tribunal and, in exceptional cases, thereafter. Any application and any order for such measures after the formation of the Arbitral Tribunal shall be promptly communicated by the applicant to the Arbitral Tribunal and all other parties. [...].”

5. Article 9 of the UNCITRAL Model Law on Arbitration agreement and interim measures by court: “It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure.”

6. Article 7 of the PAL, which simply translates into Portuguese the UNCITRAL Model Law.7. Article 17-J of the UNCITRAL Model Law on Court-ordered interim measures: “A court shall have the same power of issuing an interim measure in relation to arbitration

proceedings, irrespective of whether their place is in the territory of this State, as it has in relation to proceedings in courts. The court shall exercise such power in accordance with its own procedures in consideration of the specific features of international arbitration.”; similar to Article 29 of the PAL.

8. See Dana Renée Bucy, «How to Best Protect Party Rights: The Future of Interim Relief in International Commercial Arbitration Under the Amended UNCITRAL Model Law», American University International Law Review, Volume 25, Issue 3, Article 5, 2010, pp. 579-609.

9. See ReDfeRn & HunteR, in Redfern and Hunter on International Arbitration, Oxford University Press, 2009, §7‐18: “The answer to the question of whether to seek interim relief from the court or from the arbitral tribunal is likely to depend upon the particular circumstances of each case. If, for example, the arbitral tribunal is not yet in existence (or, in an ICC case, has not yet received the file), and the matter is one of urgency [or, alternatively arbitrators do not have necessary powers to grant the measure to be applied for], the only possibility is to apply to the relevant national court for interim measures, whilst at the same time taking steps to move the arbitration forward, so as to show that there is every intention of respecting the agreement to arbitrate. Where the arbitral tribunal is in existence, it is appropriate to apply first to that tribunal for interim measures, unless the measures sought are ones that the tribunal itself does not have the power to grant.”

10. See Joanna SimõeS, «Interim Measures Issued by National Courts in Aid of International Arbitration: A Brazilian Perspective», Warwick Student Law Review, Issue 1, Volume 1, 2011.

11. See Şeyda dursun, «A Critical Examination of the Role of Party Autonomy in International Commercial Arbitration and an Assessment of its Role and Extent», Yalova Üniversitesi Hukuk Fakültesi Dergisi, 2012.

12. See BeRnD D. eHle, «Concurrent Jurisdiction: Arbitral Tribunals and Courts Granting Interim Relief, Yorkhill Law Publishing, 2007.13. Article 17-D(1) of the UNCITRAL Model Law on Modification, suspension, termination of interim measures, which states the following: “The arbitral tribunal

may modify, suspend or terminate an interim measure or a preliminary order it has granted, upon application of any party or, in exceptional circumstances and upon prior notice to the parties, on the arbitral tribunal’s own initiative.”

14. See Article 24(1) of the PAL.

15. PouDRet, BeSSon (« Droit comparé de l’arbitrage international », 2002, p. 556), emmanuel GaillaRD and JoHn SavaGe (« foucHaRD, GaillaRD, GolDman on International Commercial Arbitration », Kluwer Law International, 1999, pp. 722/723).

16. Article 17-J of the UNICTRAL Model Law: “A court shall have the same power of issuing an interim measure in relation to arbitration proceedings [...].”17. In UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration (in respect of the interpretation of article 17 J): a Hong

Kong court dealing with provisions of similar nature ruled that such a power should be exercised sparingly and only if there are special reasons to do so; an Indian court also took the view that if a party elects to apply for an interim measure before the arbitral tribunal, it should not seek the same relief from a court on the basis that multiplicity of proceedings ought to be avoided at all causes; a New Zealand court considered that the purpose of court-ordered interim measures is to complement and facilitate the arbitration, not to forestall or to substitute for it.

64 • YAR • JULY 10, 2013


ARBITRAL TRIBUNALS AND STATE COURTS:

PARTNERS OR COMPETITORS? - Some Remarks on Preliminary Orders

from a Portuguese Law Perspective - By Porfírio Moreira

1. Introduction

A preliminary order (“PO”) may be defined as

an application, without notice to any other party, directing a party

not to frustrate the purpose of the interim measure requested.

POs have by their very nature a reserved place and a prominent

role at the intersection of the powers of arbitral tribunals and state

courts. Some authors take the view that POs are not a realistic

alternative in international arbitration and therefore state courts

will inevitably remain the key actors in this regard.2

The pros and cons of POs in arbitration based upon

the UNCITRAL Model Law (2006) (“UML”) will be briefly

addressed, followed by a few comments on the Portuguese

relevant legal framework. Lastly, some concluding remarks will

be sketched.

2. Pros, Cons and the Uncitral Model Law

2.1 Pros

One may make four basic arguments in favor of the use of

POs in arbitration: the need for urgency, the need for surprise,

the need to ensure the effectiveness of an interim application

(and thus of the final award), and the idea of arbitration self-

sufficiency.

The first two arguments are valuable for justifying

the existence of all POs, i.e., irrespective of their judicial or

arbitration nature. In a nutshell, POs are the only effective

way to deal with situations where the time required to hear the

other party(ies) would frustrate the purpose of the intended

measure (urgency) and/or situations in which a prior hearing,

by raising the other party’s awareness of the measure, would

undermine the effectiveness of the measure (surprise).

The other two arguments are, strictly speaking, arbitration

65 • YAR • JULY 10, 2013


related. In fact, there are some interim measures that are only

conceivable in arbitration proceedings if the parties are also

entitled to request a PO in the same proceedings to ensure the

effectiveness of the envisaged interim measure. Furthermore,

arbitration will be more appealing to the parties if, at least from

a theoretical point of view, all declaratory means available to

the parties before the state courts are also available before the

arbitral tribunal (self-sufficiency).

2.2 Cons

It is commonly argued that POs conflict with the

consensual nature of arbitration and that such measures

undermine the principle of equality of arms. As for the

consensual nature of the arbitration, it is submitted that,

provided that the parties were free to set a package of rules

whereby the inclusion or the exclusion of POs was established,

the consensual nature of the arbitration is preserved. This is

to say that a given PO will always be anchored in the parties’

contractual autonomy, at least indirectly.

Furthermore, the principle of equality of arms is not an

absolute principle. As a consequence, this principle must be

weighed against other principles. This balancing exercise does

not substantially differ from the one underlying the suitability

of having POs provided for in the procedural law governing the

activity of state courts, and the requirements to be set forth in

order to strike an optimal balance.

From a pragmatic standpoint, it is correctly noted that

POs are difficult to enforce and “virtually never accomplish[es] any

serious purpose” 3 as arbitral tribunals are deprived of coercive

powers. While it is unquestionable that the concourse of

declaratory and coercive powers places state tribunals in a

privileged position to deal with POs, it seems also consensual

to assert that this issue applies to all interim measures, whether

they are POs or not, even if the qualified urgency (and surprise

effect) that is congenital to POs exacerbates this difficulty.

2.3 Uncitral Model Law

The UML dedicates two articles to POs.4 As designed in

the UML, POs shall only be available if the parties did not agree

otherwise;5 their material requirements are: (i) fumus boni iuris;

(ii) periculum in mora arising out of prior disclosure to the other

party; and (iii) proportionality,6 and are subject to a procedural

requirement: they must be filed together with the request for

the interim measure to which the PO is ancillary.7

As for the regime of POs, the UML provides for: (i) a

differed adversarial principle8; (ii) a limited time of effectiveness

(20 days);9 and (iii) its possible conversion into an interim

measure.10 A PO is not an award, it is binding on the parties

but not enforceable.11

3. Portuguese legal framework on POs in arbitration

The new Portuguese arbitration law12 (“PAL”) dedicates

two articles to POs which mirror, almost word-for-word, the

UML provisions. Thus, the brief points made in connection

with UML are applicable in their entirety to the PAL.

It is worth noting that the prior Portuguese legal

framework on arbitration was silent as to the admissibility

of interim measures, let alone POs. Facing a silent law, the

appeal courts delivered conflicting decisions.13 As the focus of

courts, scholars and other lawyers was then on the fundamental

existential questions on interim measures, little attention has

been paid to the details of the legal regime of interim measures,

as one would expect. The following are some of the multiple

issues awaiting clarification.

What types of injunction are admissible under POs? Are

only negative injunctions permitted in order to preserve a given

situation or may positive injunctions also be permitted if they

are required to preserve a given situation?

Under Portuguese law, disobedience of interim measures

issued by state courts is a criminal act. This criminal feature is

undoubtedly a key element as to the effectiveness of interim

measures. At first sight it is controversial whether contravening

an interim measure issued by an arbitral tribunal is also a

crime, whereas, in the particular case of POs, it seems that the

exclusion of the use of any coercive state powers leads to the

conclusion that breaching such decisions does not qualify as a

crime.14 In any case, this ought to be clarified for the sake of

legal certainty, so that the agents may predict the consequences

of their conduct as postulated by the fundamental principles of

criminal law. One thing seems evident: if deprived of criminal

consequences, arbitral interim measures will have a minor role

compared to state court interim measures.

Another passionate discussion is the effective civil

consequences of contravening a PO, that is to say what exactly

means binding on the parties? Deprived of enforceability, POs

may solely be a source of civil liability. Theoretically, the general

liability requirements apply, and therefore once they are met,

the defaulting party is liable for the damages incurred by the

other party as a result of the violation of the PO. In practice,

the range of such situations that would not already be covered

by contractual or tort liability, i.e., those situations where the

PO would have a true effet utile, appears, to the say the least, to

be narrow.

4. Portuguese state courts and POs in judicial proceedings

The general legal seat of POs in the Portuguese Civil

Procedure Code (“CPC”) is article 385. In broad terms, POs

are subject to the same conditions as arbitral POs under

UML. They are similar to all other interim measures, with the

exception of the underlying differed adversarial principle.

However, judicial POs are fully enforceable and, as with

all other interim measures, their breach will lead to criminal

liability. Some judicial interim measures are by their very

nature POs, as it is the case of the precautionary attachment.15

A further manifestation of a differed adversarial principle is

66 • YAR • JULY 10, 2013


the procedural measure to challenge shareholder’s meeting

resolutions: when notified to reply to the request for the interim

measure, the relevant company is by virtue of law prevented

from taking any actions pertaining to the execution of the

resolution at issue.16

Interestingly, the CPC provides for an ex parte stricto

sensu measure: the suspension of construction order.17 Under

this measure, a party may directly request the other party

to immediately suspend a construction by means of a verbal

communication, provided that within five days judicial

ratification is requested.

5. Concluding (yet very preliminary) remarks

PO’s limits and problems derive from their very nature

and this discussion should therefore not be deemed as primarily

arbitration related. In fact, it is not unreasonable to say that

one has to balance common principles both in arbitration and

judicial proceedings.

As far as arbitral POs are concerned, PAL is almost a

carbon copy of the UML, therefore providing for a generous

approach to these measures.

At a national level, various questions in connection

with arbitral interim measures, and a fortiori with POs, remain

unanswered, among which the crucial issue of whether

contravening an interim measure (including a PO) delivered by

an arbitral tribunal may qualify as a crime under the Portuguese

jurisdiction.

Theoretically, nothing prevents national laws from

providing for enforceable arbitration POs: are these not

disposable rights, after all?

Porfírio Moreira

1. This article is merely a written summary of a brief oral presentation in the ICC-YAF conference “Arbitral Tribunals and State Courts: Partners or Competitors?” hosted by YAR that took place in Lisbon on 16 May 2013.

2. PeteR J.W. SHeRWin anD DouGlaS c. Rennie sustain that POs are “[…] truly dire situations where parties still must seek interim relief from a national court, particularly as ex parte relief is not a realistic alternative in international arbitration” Interim Relief Under International Arbitration Rules and Guidelines: a comparative analysis, in “The American Review of International Arbitration”, vol. 20, no. 3, 2009, pp. 317-366, p.319.

3. GaRy B. BoRn, apud PeteR J.W. SHeRWin anD DouGlaS c. Rennie, op. cit., note 78, p. 330.4. Articles 17 B and 17 C of UNCITRAL Model Law on International Commercial Arbitration 1985 with amendments as adopted in 2006.5. Article 17 B (1) of UML.6. Article 17 B (2) and (3) of UML.7. Article 17 B (1) of UML.8. Article 17 C (2) of UML.9. Article 17 C (4) of UML. Pursuant to the UML, the effectiveness period is counted as of the issuance of the PO, although it seems more logical to do so as of the

date of its service. 10. Article 17 C (4) of UML.11. Article 17 C (5) of UML.12. Law 63/2011 of 14 December.13. In this respect cf. JoSé miGuel JúDice, As Providências Cautelares e a Arbitragem: Em que Estamos?, in “Estudos em Homenagem ao Professor Doutor Carlos Ferreira de

Almeida”, Almedina, 2011, vol. III pp. 657-679, p. 659 et seq. and the summary of case-law therein.14. A detailed discussion on this topic is clearly beyond the scope of this article. Such a discussion would notably entail the assessment of the nature of the arbitral

tribunals under the Portuguese jurisdiction as well as an analysis on the (non) fulfilment of the requirements deriving form the principle of legal certainty nullum crimen sine lege.

15. Articles 406-408 of the CPC.16. Articles 396 and 397 of the CPC.17. Article 412 of the CPC.

67 • YAR • JULY 10, 2013


LEARNING TO DEAL WITH DIFFERENT LEGAL SYSTEMS

Taking of Evidence in International Commercial Arbitration

By Luis Fernando Guerrero

1. Introduction and Objective

This text aims to analyze the latest trends in

the proceeding taking of evidence in international commercial

arbitration processes, in light of civil law and common law legal

systems.

It seeks to determine how this information and systems

exchange deal with dispute resolution, which system has greater

influence over the other, and how its users try to adapt to this

new reality.

2. General Aspects

Doctrine has stressed, that civil law and common law

systems tend to be similar. As René David says, “In England

and France, although the pathways used to discover the rules of

law were different, there was always the same basic conception

of law: the law is, above all, reason, lex est aliquid rationis”.1

There is a clear demand for a pragmatic, and in certain

ways, even calculating, analysis of producing evidence. The

Lawyer should try to take advantage of the procedure with

minimal effort and expense to his client. A more effective legal

system may be the key to form this type of lawyer, ensuring his/

her survival between legal systems.

The focus on providing information and documents can

be the key to success in a case.

The fact is that practice changes this scenario of apparent

tranquility. In truth, what is seen in international commercial

arbitration is the adoption of common law rules rather than

civil law rules. Only under certain circumstances does civil

law rule prevail, perhaps due to a higher economic influx in

countries of common law tradition, which is the case of the

United States and England.

Therefore, the effort of civil law lawyers should be greater,

which has in fact been the case. Besides this reality, another

phenomenon observed is the creation of specific rules for

international commercial arbitration. In other words, when we

think of procedural techniques that are traditional in common

law, such as discovery, what we have in fact is a technical

68 • YAR • JULY 10, 2013


homonym, more suited to international commercial law.

Thus, the actions of civil law lawyers in common law

generates a new and different reality for operators in both

systems. Arbitration therefore has the power to to mix interesting

characteristics of different legal families, aiming to enhance its

efficiency and dynamic as a method of dispute resolution.2

3. Specific Aspects – Due Legal Process

The interaction between systems is merely a general part

of the problem.

Specific questions arise, demanding the attention of

those who act in international arbitration.

The first of these points is the use of new technologies.

Without a doubt, using new technologies is an important

aspect and represents a powerful instrument for the development

of international commercial arbitration. Technology reduces

distances and allows for more efficiency in this method of

dispute resolution.

On the other hand, the use of systems such as Skype

to perform hearings can generate doubts and risks of data

protection, creating problems regarding confidentiality in

arbitration processes.

The second point is the performance of the arbitrator

with regard to the arbitration process permeated by different

legal traditions.

The indication of experts, for instance, which is very

common in international commercial arbitration, can be a very

divergent issue. Who has this duty? The arbitrator or the parties?

In the civil law tradition, the arbitrators usually indicate

the experts since they are reliable professionals. In common

law, this indication, in general, comes from the parties and it

is up to the arbitrators to appoint a third, neutral choice who

will be responsible for technical analyses of the matter that the

Parties have referred to the arbitrator.

On the other hand, how will the production of oral

evidence be approached? Will a Cross Examination or a Direct

Examination be used? The arbitrator has the dilemma of

ensuring due legal process while maintaining economy of time

and money during the managed processes.

Arbitrators must analyze the parties and lawyers’

characteristics involved in the arbitration process. Therefore,

they must be concerned with using arbitration flexibility as

an advantage, and with the parties being able to elicit the

maximum in the shortest time possible.

The greater the will of arbitrators granting autonomy

to the parties, the simpler and more economical will be the

production of evidence . As it is a procedure that involves

emotions, arbitrators must know the reality that is placed

before them, using more familiar rules trying to increase the

degree of the Parties’ reliability in the process.

These two examples show that arbitrators will need

skills and knowledge to conciliate different perspectives of

the world. As was seen, arbitrators must be able to mitigate

against cultural differences and ensure an interpretation of due

legal process, between the parties, ensuring legal security and

efficacy in decisions.

4. ICA

The ICA has an important role to play when trying to

understand the taking of evidence and its trends in international

commercial arbitration. The lack of information regarding

arbitration awards makes the work accomplished by the ICA

an essential reference for students and professionals.

We would like to mention two interesting guidelines

related to the proceeding of taking evidence in international

commercial arbitration.

The first of these cases dates from 1990, 1998 to be

more precise, regarding a commission agreement involving two

companies, African and French. It was registered as Case No.

9333/1998.3

In this case, the importance of burden of proof and

limits that the arbitrators had to analyze was discussed. It was

recognized that arbitrators had powers to define only indications,

from the perspective of one of the Parties, that could be used as

basis for a ruling, and up to what point the arbitrator could or

should investigate, especially in a corruption situation.

The case is important, therefore, given its central idea

on burden of proof. It refers to an analysis designated to

arbitrators which can define the proper means for forming their

convictions, following the analysis of controversial facts.

The discussion can take a long time, especially when

there is discussion on which party lays the burden of proof in

the arbitration process. However, when it comes to international

commercial arbitration, a context in which there is a gradual

search for an improvement of the acts and conduction of

arbitration process, the burden of proof assessed by the arbitrator

becomes an important aid to analyzing and judging the case.

The second case refers to the development of seismic

machinery to explore petroleum blocs involving an African

State, a company of Hong Kong and a Chinese company,

registered as Case No. 10982/2001.4

In this situation, the falseness of a document that reveal

the parties’ intentions is subject of discussion. The parties’ good

faith and loyalty were tested as a necessary type of behavior.

The taking of evidence should be conducted by arbitrators

in light of the beginning of the due legal process. The parties,

69 • YAR • JULY 10, 2013


on the other hand, should act with loyalty and good faith in

order to perform the arbitrators’ procedure, which can only

occur with the cooperation of the State’s legal system.

5. Brazilian Reality

In Brazilian law, the arbitration law, does not indicate

trends that can be observed.

Nevertheless, the feasibility of the arbitrator’s decisions

is ensured by the Judiciary, under Article 22, §§ 2 and 4, of the

Arbitration Law, in a clear regime of cooperation.

On the other hand, the control of the due legal arbitration

process can be accomplished a posteriori by the Judiciary upon

a request filed by the party deemed damaged. The latter will

be able to handle the annulment of the arbitral award action,

based on Articles 32 and 33 of the Arbitration Law.

From the analysis of two annulment actions handled in

Brazil, it was seen that two relative points of the expert proof

were very important.

The first of these cases refers to the need for specialization

of the expert in the subject for which he was summoned to give

his judgment.5 In other words, an accounting expert cannot

judge an economic matter, and vice-versa.

On the other hand, friendship between an expert and

one of the companies’ directors who is part of the arbitration

process justifies the suspension on feasibility grounds of the

arbitral award entered.6

As can be seen, also in the context of national or

international arbitration in Brazil, the solution provided is

similar to the solution adopted in international commercial

arbitration

6. Conclusion

Simplicity seems to be a relevant principle when we deal

with evidence production in international arbitration.

On the other hand, the definition of acceptable rules is

urgently required. Knowledge and preparation avoid surprises

and, consequently, complaints.

Due legal process, regardless of the system involved,

should be applied to any analysis that arbitrators perform

regarding the taking of evidence in the arbitration process. In

the absence of strict rules and the validity of a dynamic system,

this is the only way to ensure justice in decisions, effectiveness

of sentences, and arbitrary processes.

In this regard, whenever necessary, cooperation between

arbitrators and robed judges will be essential to ensure a quiet

and effective opportunity of evidence production in arbitrary

processes.

Having said this, the final perspective is optimistic.

It seems to be a universal perspective of reasonability over

Probation Instruction in international commercial arbitration.

Luis Fernando Guerrero

1. RENE DAVID, Les Grands Systèmes du Droit Contemporains, HERMINIO A. CARVALHO (trad. Fr.), Os Grandes Sistemas do Direito Contemporâneo, São Paulo, Martins Fontes, 1998 p. 335.

2. JEAN-JACQUES ARNALDEZ, YVES DERAINS e DOMINICQUE HARSCER, Collection of ICC Arbitral Awards, The Hague Wolters Kluwer, 2009, pp. 575-587.3. JEAN-JACQUES ARNALDEZ, YVES DERAINS e DOMINICQUE HARSCER, Collection of ICC Arbitral Awards, The Hague Wolters Kluwer, 2009, pp. 677-688.4. TJSP - 17a São Paulo’s Civil State Court – Award, case n. 583.00.2005.005.059-7.5. TJSP – Interim Relief Appeal n. 0134527-69.2012.8.26-0000.6. TJSP – Interim Relief Appeal n. 0134527-69.2012.8.26-0000.

70 • YAR • JULY 10, 2013


STATE COURTS’ ASSISTANCE IN TAKING EVIDENCE UNDER

PORTUGUESE ARBITRATION LAWBy Pedro Sousa Uva

The present article is based on the author’s

presentation at the ICC YAF & YAR Conference

– “Arbitral Tribunal and State Courts – Partners

or Competitors?” – which took place on 16 May 2013 at the

Portuguese Chamber of Commerce and Industry, Lisbon.

I. Introduction

When submitting evidence, a party may be faced with

documents or witnesses that are unavailable for numerous

reasons, notably when documents related to the case are no

longer obtainable or simply because a witness refuses to testify. It

may become challenging for the strategy of a party in arbitration

when the counter-party or third parties to the arbitration

proceedings refuse to cooperate in the taking of evidence. It is

challenging because, unlike State Courts, Arbitral Tribunals lack

the coercive powers to enforce such requests for taking evidence.

Arbitral Tribunals obviously have the authority to conduct

the arbitration, give orders and render final awards, but they do

not have the power to enforce such decisions. They may even

draw adverse inferences against a party who refuses to cooperate,

but Counsels are aware that adverse inferences are not enough

to win a case as they merely represent indirect evidence that is

subject to the arbitrator’s assessment. The challenge becomes

even greater with regard to third parties to the arbitration because

Arbitral Tribunals have absolutely no control over entities that

are not bound by the arbitration agreement.

This means that in such cases a party will need the

assistance of a State Court to compel the counter-party or a

third party to produce a document or a witness. Court assistance

of this sort is, of course, available only when provided for by

national law. This is the case of the Portuguese Arbitration Law,

as we shall see later.

II. Party autonomy in the procedure applicable to arbitration

One of the advantages of arbitration lies in the freedom

of the parties to choose the adequate procedure rules to govern

their arbitration. The principle of a party’s procedural autonomy

is acknowledged on an international basis, notably under the

New York Convention on the Recognition and Enforcement

of Foreign Arbitral Awards (NYC) in Article V(1)(d),1 and on

a national basis, in most modern arbitration laws based on or

inspired by the UNCITRAL Model Law,2 the latter being the

case of the Portuguese Law on Voluntary Arbitration (PLVA):

Article 30.2 of the PLVA reads as follows:

“2 - The parties may, until the acceptance by the first

71 • YAR • JULY 10, 2013


arbitrator, agree on the procedure to be followed by the Arbitral

Tribunal in the conduct of the proceedings, respecting the

fundamental principles referred to in the preceding paragraph of

this article and the mandatory provisions of this Law.”

When choosing the procedure to follow, the parties will also be

choosing the set of rules on evidence, either in a particular law, the rules

drafted by the parties’ counsels or those contained in the regulations

of an arbitral institution.3 When choosing Portugal as the seat of

arbitration, one needs to be aware of rules on evidence that apply to

arbitration governed by Portuguese Law and those that do not.

In Portugal, it is commonly understood that the substantive

rules on evidence set out in the Civil Code,4 notably those which

deal with matters such as the burden of proof, the legal means

of evidence and their weight, apply to arbitration proceedings

governed under Portuguese Law. This could not be otherwise

for the security of parties when performing legal transactions.5

However, Arbitral Tribunals have the power to determine “the

admissibility, relevance and weight of any evidence”, as per article

30.4 of the PLVA, powers which Arbitrators should, however,

exercise with caution in order to avoid refusing evidence which is

essential for the process of getting to the truth.

On the other hand, it is commonly understood that the

rules on evidence set forth in the Civil Procedure Code regulating

the taking of evidence do not apply to arbitration, unless the

parties expressly agreed that they should.6

Naturally, the choice of procedure by the parties has

its limits. Article 30 of the PLVA sets out those limits when

establishing that party autonomy is subject to the mandatory

rules of the applicable national law, which under most developed

arbitration statutes are limited in scope (due process). Every

jurisdiction has its own standard of “due process”. In modern

European arbitration laws such as the Portuguese one they

usually do not differ that much in substance. The fundamental

principles under the PLVA are three:

- Respondent is summoned to present his defense (Article 30.1 a));

- Parties are treated with equality (Article 30.1 b)) ;- Each party is given an opportunity to present his

case (Article 30.1 c))7

III. State Court Assistance in taking evidence

When we talk about State Court assistance in taking

evidence under Portuguese Law we are basically dealing with

article 38 of the PLVA , which reads as follows:

Article 38

State court assistance in taking evidence

1 - When the evidence to be taken depends on the will of

one of the parties or of third parties and these refuse to cooperate,

a party may, with the approval of the Arbitral Tribunal, request

from the competent State Court that the evidence be taken before

it, the results thereof being forwarded to the Arbitral Tribunal.

2 - The preceding paragraph is applicable to the requests

to take evidence addressed to a Portuguese State Court, in case

of arbitrations seated abroad.

To address this subject from a more practical perspective

we can ask five main questions: (i) Who may request the taking

of evidence?; (ii) From whom may it be requested?; (iii) What

exactly may be requested?; (iv) Where is the evidence produced?;

(v) What if the request comes from parties in an arbitration

seated outside Portugal?

(i) Who may request the taking of evidence?

Portuguese Arbitration Law has followed a different

perspective from the one contained in the Model Law.

The Portuguese legislator understands that the requests

for obtaining evidence must come from the parties themselves

and not from the Arbitral Tribunals, because after all, arbitration

is a procedure of the parties. It has a contractual nature, and

therefore it should be the parties that decide what they need or

do not need to prove their case.

Despite such party autonomy, the Portuguese legislator

also understands that the Arbitral Tribunal should approve a

party’s request for taking evidence. In fact, if Arbitral Tribunals

did not control the parties’ requests, this could lead to abuses,

notably attempts from a respondent in arbitral proceedings to

block an arbitration by resorting to delay tactics (for instance,

requesting rogatory letters for obtaining statements from

witnesses living abroad) or any other ways that would represent

excessive court assistance. After all, arbitrators have the duty to

conduct the proceedings in an effective way.

Now, because there is no rule without exceptions, Arbitral

Tribunals may request the ex officio production of evidence to

Portuguese Courts in the following cases:

• Arbitration seated in foreign countries;

• The applicable (foreign) arbitration law allows it;

• The competent Portuguese Court allows it (Article 29.2

of the PLVA).

This means that contrary to the Model Law and many

other laws based on it, Portuguese Courts may very well assist

an arbitration taking place, for instance, in Spain, provided

that Spanish arbitration Law allows it and the Portuguese court

accepts the concrete production of evidence. (In international

arbitrations, Portuguese State Courts may depart from Portuguese

procedural rules, as per Article 29.2 of the PLVA.)

(ii) From whom may evidence be requested?

According to Article 59.4 of the PLVA, the request from a

party in a pending arbitral proceeding must be made before the

Court of First Instance (at the seat of arbitration) and not the

Court of Appeal.

The Court of Appeal is actually the competent court

72 • YAR • JULY 10, 2013


under the PLVA for most of the matters where court assistance

is required, among others: the refusal or removal of arbitrators;

the appeal against the arbitral award; the challenge of the arbitral

award; the recognition of the arbitral award handed down in an

arbitration located outside Portugal.

Thus, the competent Court of First Instance will deal with

only a few matters, one of which is the taking of evidence.

(iii) What assistance may be required?

The legal forms of evidence that a party may request are usually

documentary evidence and testimony, but any other legal form of

evidence is possible, provided that it is allowed in the Portuguese

Civil Code (e.g. inspection) or in any other applicable law.

Therefore, a party may request and the State Court may order,

for instance, the disclosure of documents; the Court may compel

witnesses to appear8 or order witness statements; it may order the

production of other legal forms of evidence, notably inspection

evidence or expert evidence; it may secure the preservation of

evidence;9 and it may anticipate the taking of evidence.10

It is worth mentioning what the rules of the Commercial

Arbitration Centre of the Portuguese Chamber of Commerce and

Industry (ACL Rules) say about legal means of evidence. Article

30 of the ACL Rules allows any evidence legally admissible or

agreed between the parties to be produced before the Arbitral

Tribunal, as follows:

Article 30

1. Any evidence legally admissible or agreed between the

parties may be produced before the Arbitral Tribunal.

2. On its own initiative or at the request or one or both

of the parties, the tribunal may:

a) Hear personal depositions from the parties;

b) Hear third parties;

c) Arrange for the delivery of documents in the possession

of the parties or third parties;

d) Appoint one or more experts, define their terms of

reference and receive their depositions or reports;

e) Conduct first hand examinations or inspections.

A major difference between this and the rules of the

Portuguese Civil Procedure Code is that in arbitrations under

the Commercial Arbitration Centre of ACL it is possible to hear

personal depositions from the parties (themselves), while under

the Civil Procedure Code, witnesses are always third parties, and

one may only request to hear the counter-party (depoimento de

parte), not the party itself.

(iv) Where is the evidence produced?

Certain arbitration laws establish that evidence should be

produced at the Arbitral Tribunal. The Portuguese legislator took

the opposite view: evidence must be produced at the competent

State Court, not in the Arbitral Tribunal, and the results should

then be sent to the Arbitral Tribunal.

This means that the arbitrators cannot participate in State

Court hearings, although nothing seems to forbid them from

being present at such hearings.

(v) What if the request comes from parties in an arbitration seated outside Portugal?

Regarding international State Court assistance in taking

evidence, Portuguese Arbitration Law is a step ahead of the

UNCITRAL Model Law and other arbitration laws as it admits

requests for taking evidence from foreign Arbitral Tribunals.11

As mentioned above, the Portuguese State Court must

comply with both: (i) foreign applicable procedural rules; and

(ii) applicable procedural rules for the obtaining of evidence in a

Portuguese Court.

IV. Final remark.

Parties in arbitration need the assistance of State Courts

in obtaining unavailable evidence. This means that State Courts

should be considered as a real partner to Arbitral Tribunals, not their

competitors. This partnership is as good as the arbitration law that

regulates court assistance in collecting evidence; the Portuguese

Arbitration Law did successfully provide such regulation.

Practice will show whether the mechanism and solutions

provided in the PLVA serve the purpose of collaboration between

Arbitral Tribunals and State Courts in a matter as crucial as the

taking of evidence in arbitration.

Pedro Sousa Uva

1. Article V(1)(d) allows non-recognition of an arbitral award if: [“… the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place.”

2. Article 19.1.3. Although arbitral institutions do not usually regulate the procedure for the taking of evidence.4. Articles 341 to 396 deal with document production, expert evidence, inspection evidence, and the testimony of third parties.5. Barrocas, Manuel Pereira in “A Prova no Processo Arbitral em Direito Português”, page 10, available at http://arbitragem.pt/estudos/a-prova-no-processo-arbitral-

em-direito-portugues--manuel-pereira-barrocas.pdf6. As Manuel Pereira Barrocas explains, this does not mean that arbitrators should ignore the typical procedural concepts, litispendence, exception, counterclaim, or

other solutions for taking of evidence provided for in the CPC (notably the request to anticipate the taking of evidence) - they should not. What arbitrators should ignore in arbitration is the relevant regime set out in the CPC, which does not apply to arbitration (vide study identified in note 5, page 7.)

7. These principles are basically the ones previewed in the Model Law.8. Under Portuguese Law, witnesses are always third parties as Portuguese law does not admit the testimony of the party itself, unless requested by the counter–party

(depoimento de parte).9. Article 29 of the PLVA sets forth that State Courts have the power to order interim measures in pending arbitral proceedings or in those that have not yet

commenced. Arbitral tribunals can also do this, as expressly stated in Article 20.2d) of the PLVA10. Produção antecipada de prova – Article 520 of the CPC.11. Vide articles 38.2 and 29.2 of the PLVA

73 • YAR • JULY 10, 2013


BRAZILIAN ASSOCIATION OF ARBITRATION STUDENTS

By Associação Brasileira de Estudantes de Arbitragem

In the context of the consistent growing support by Brazilian

courts and the huge expansion of its use as a dispute settlement

mechanism, it is also natural the growth of the academic

community dedicated to the study of arbitration. Such study

has found strong catalysts on the Willem C. Vis International

Commercial Arbitration Moot and recently on the Petrônio

Muniz Brazilian Arbitration Moot.

It was precisely under this context that in August 2011,

the Brazilian Association of Students of Arbitration – ABEArb

was created, in order to focus and meet the demands of the

growing number of Brazilian arbitration students.

Among its many projects, ABEArb organizes events,

coordinates collective works, such as listing Brazilian and international

institutions, young associations, case law, among others, promotes

network among Brazilian students and offers opportunities for

students to present and publish the result of their studies.

From an international perspective, ABEArb has been

a continuing contributor of the newyorkconvention1958.

org website, jointly organized by UNCITRAL, Columbia Law

School and Shearman & Sterling, submitting translations of

decisions from the Brazilian Superior Court of Justice on the

recognition and enforcement of international arbitral awards.

Also, ABEArb has the honor to employ all efforts contributing to

the YAR – Young Arbitration Review editions, in a partnership

that is already celebrating its second year.

ABEArb’s projects are only possible through the hard

work of its directors, supporters and volunteering members,

whose main focus is to promote arbitration among law students

from all over Brazil and to provide opportunities to those

students already engaged on its study.

74 • YAR • JULY 10, 2013


PRESIDENTJorge Vargas Neto is an associate of Pinheiro Neto Advogados, part of the Litigation and Arbitration Group and

the Infrastructure and Construction Law Group. He holds a L.L.B from the Law School of the Pontifical Catholic

University and a Master’s degree in Banking, Corporate, Finance, and Securities Law from INSPER. Jorge has

specialization in International Arbitration by the International Academy for Arbitration Law, being awarded the

Laureate of the Academy Prize:3rd Place (2012), and in Mergers & Acquisitions and Corporate Law by the Georgetown University

Law Center (2009). He is also ambassador of the International Academy for Arbitration Law in Brazil and member of the editorial

board of Group of Studies in Arbitration – GEArb. Jorge is a former member of UFMG’s study groups on international law and on

international trade law and former participant of the 18th Willem C. Vis International Commercial Arbitration Moot, 4th Annual

Foreign Direct Investment Moot and 2nd Petrônio Muniz Brazilian Arbitration Moot Competition.

VICE-PRESIDENT Rodrigo Moreira received his law degree from the Pontifical Catholic University of Rio de Janeiro (PUC-Rio) in July

2010. He is a partner at Laudelino da Costa Mendes Neto Advocacia at the complex litigation and contracts areas. He

was one of the founders of the Research Group on International Arbitration and International Commercial Contracts

at PUC-Rio, which represents the University on the Willem C. Vis International Commercial Arbitration Moot. He participated as

a mootie on the 16th and 17th editions of the Vis Moot and as assistant-coach on the 18th and 19th editions. He was part of the

local committee for the organization of the 3rd edition of the Petrônio Muniz Brazilian Arbitration Moot Competition and is the

assistant coach of the Fundação Getúlio Vargas team for the 4th edition. He is also in the last semester of the LL.M on Corporate

at the Fundação Getúlio Vargas.

SECRETARYAline Henriques Dias received her law degree from Mackenzie Presbiterian Univesity, São Paulo, Brazil and is

specialized in Arbitration by the Law School of Fundação Getúlio Vargas – DIREITO GV. She is an associate in the

litigation team at Mattos Muriel Kestener Advogados and a founding member of the Arbitration Study Group of the

Mackenzie Presbiterian Univesity – GEAMACK. As member of this Study Group, Aline participated as a speaker in the two firsts

editions of the Petrônio Muniz Brazilian Arbitration Moot Competition and, more recently, she also participated as coach in the

third edition of this same Brazilian competition and in the 19th Willem C. Vis International Commercial Arbitration Moot. Aline is

member of Young International Arbitration Group of the London Court of International Arbitration.

TREASURERDaniel M. C. Barbosa received his law degree from Universidade Federal de Minas Gerais (UFMG), Belo Horizonte,

Brazil. He interned in different law firms in Belo Horizonte, having mainly focused on contract law and arbitration,

and was also an intern at the Secretariat of the International Court of Arbitration of the International Chamber of

Commerce in Paris. During his studies, he was a member of UFMG’s study groups on international law and on international trade

law and represented the university in the 15th and 16th Willem C. Vis International Commercial Arbitration Moot, in the 51st

Philip C. Jessup International Law Moot Court Competition, and in the 4th Annual Foreign Direct Investment Moot, in which he

received the Thomas Wälde Award for Best Oralist. Daniel is also one of the founders and organizers of the Petrônio Muniz Brazilian

Arbitration Moot Competition.

2013 Executive Board

75 • YAR • JULY 10, 2013


ACADEMIC OFFICERAgatha Brandão de Oliveira is a last year law student at the Federal University of Espirito Santo (UFES). She is

specialized in International Law by the The Hague Academy of International Law, develops four Research Initiation

Scholarship Projects and is a researcher for UNESCO and the International Law Center (CEDIN). Agatha is also

assistant Director at Harvard National Model United Nations Latin America (HNMUN-LA 2013), coordinator of the

Academic Group in Private International Law and Arbitration’s Extension Research group at UFES «Center of specialized studies in

International Arbitration and Civil Procedure – NEAPI». She is member at New York State Bar Association – NYSBA, International

Section, and is part of the Organization Committee created for the Petrônio Muniz Brazilian Arbitration Moot Competition.

EVENTS OFFICERAna Carolina Dall’Agnol holds a degree in International Relations from UniCuritiba and is a law student at the

same institution (graduation expected on December 2013). She was an intern at the law firm Lee Taube Gabardo

Sociedade de Advogados for two and a half years. During her study at UniCuritiba, she was a member of the Study

Group on Arbitration and International Contracts for five years and has participated as a speaker (16th and 17th editions) and as

a coach (18th and 19th editions) on the Willem C. Vis International Commercial Arbitration Moot. Ana has also participated as a

speaker on the IV and V editions of the Foreign Direct Investment Moot.

OFFICERBernard Potsch Moura is a bachelor and a LLM (Master of Law) candidate at University of the State of Rio

de Janeiro’s (UERJ) Law School. He is currently an associate at Batista Martins Advogados, law firm specialized

in arbitration. Bernard is member of the Brazilian Arbitration Committee and also is coach of the University of

the State of Rio de Janeiro’s team for the Willem C. Vis International Commercial Arbitration Moot and for the Petrônio Muniz

Brazilian Arbitration Moot Competition.

OFFICERIsabelle Ferrarini Bueno is currently in the last year of law school at Federal University of Rio Grande do Sul

(UFRGS), working as an intern in the corporate team at Souto, Correa, Cesa, Lummertz & Amaral. She is a member

of the academic group “Arbitration and International Contracts” coordinated by Professor Vera Fradera, at Federal

University of Rio Grande do Sul. Isabelle is member of the teams that represented the Federal University of Rio Grande do Sul in

the 18th, 19th and 20th editions of Willem C. Vis International Commercial Arbitration Moot, and member of the current team

representing Souto, Correa, Cesa, Lummertz & Amaral at the Petrônio Muniz Brazilian Arbitration Moot Competition.

OFFICERLaura Gouvêa de França Pereira is currently in the last year of law school at University of Sao Paulo (USP). She

works as an intern in the arbitration team at L. O. Baptista – Schmidt, Valois, Miranda, Ferreira & Agel and is

specialized in International Arbitration by the International Academy for Arbitration Law. Laura completed a one-

year academic exchange at Institut d’Études Politiques de Paris (Sciences Po Paris), being placed on the Dean’s List of International

Students (Mention Summa Cum Laude). She is coordinator of the Academic Group “Arbitration and International Contracts”

(ABCINT) of USP’s Faculty of Law and is also member of the team that represented the University of Sao Paulo in the 20th edition

of the Willem C. Vis International Commercial Arbitration Moot, and coach in the 21st edition of the same competition.

INTERNATIONAL OFFICERDaniel Tavela Luis has law degree by the São Paulo Law School of Fundacao Getúlio Vargas – DIREITO GV. He holds

a Master’s degree in International Law by the University of São Paulo. Daniel is partner at Manuel Luís Advogados

Associados, President of the Direito GV Alumni Association and specialist in International Arbitration by the International

Academy for Arbitration Law. Daniel is member of the Brazilian Arbitration Committee and ICC Young Arbitrators Forum and of the

Young-OGEMID. He is coach of the São Paulo Law School of Fundacão Getúlio Vargas – DIREITO GV for the Willem C. Vis International

Commercial Arbitration Moot and Petrônio Muniz Brazilian Arbitration Moot Competition. He is also a founding member and coordinator

of the Study Group in Arbitration, Investments and International Contracts of the DIREITO GV – GEArbICIDGV.

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Pedro Sousa Uva (born 1979) is an Associate Lawyer at Miranda Correia Amendoeira & Associados.His practice focuses on litigation and arbitration.

Pedro is a Graduate of the Lisbon Law School of the Portuguese Catholic University (2003). Pedro was admitted at the Portuguese Bar in 2006.

Before joining the Firm in May, 2013, Pedro worked for almost ten years as an Associate at Abreu Advogados law firm, where he focused his practice in the areas of litigation and arbitration.

Between 2009 and 2010, he participated in the International Arbitration Group’s Intern Program, in London, at Wilmer Cutler Pickering Hale and Dorr LLP.

Pedro is a former scholarship student of the Katolieke Universiteit Leuven, Belgium, where he pursued studies in International Arbitration (2001/2002). He completed an LL.M in Comparative and

PEDRO SOUSA UVA

International Dispute Resolution at Queen Mary University of London (2008/2009), where he focused on International Commercial Arbitration, International Trade and Investment Dispute Settlement and Alternative Dispute Resolution.

He is a member of the Portuguese Bar Association, a member of the Alumni & Friends of the School of International Arbitration (AFSIA), University of London. He is a co-founder of AFSIA Portugal (created in June, 30 2010).

Pedro has published several articles notably “A comparative reflection on challenge of Arbitral awards through the lens of the arbitrator’s duty of impartiality and independence”, published in The American Review of International Arbitration, Volume 20, No. 4, in January 2011 (an updated version of the Author’s LLM Dissertation); Co-Author of the Portuguese Chapter of the International Comparative Legal Guide to International Arbitration 2010, 2011, 2012 and 2013 - Global Legal Group (GLG) – and “Settlement in International Arbitration: the CEDR Rules”, March 19 2010, Executive View, Litigation and Dispute Resolution, Digital Guide 2010, http://www.executiveview.com.

Pedro will Co-Chair the Sub40 Committee of the Portuguese Association of Arbitration (APA) from September, 1 2013 onwards. He is co-founder of YAR - Young Arbitration Review.

Gonçalo Malheiro is Junior Partner at PBBR Law Firm and co-head of its Litigation Arbitration Department, currently acting as counsel in both ad hoc and institutional arbitration proceedings (domestic and international arbitration).He is a graduate from the Catholic University Law School of Lisbon. He has an LL.M from Queen Mary - University of London, School of Law, where he focused on the following subjects:

GONÇALO MALHEIRO

International Commercial Arbitration, International Commercial Litigation, Alternative Dispute Resolution and International Trade and Investment Dispute Settlement (subject grouping: Commercial and Corporate Law).

Gonçalo is a member of the Portuguese Bar Association, the Catholic University Alumni Association, the Chartered Institute of Arbitrators and the Alumni & Friends of the School of International Arbitration (AFSIA), University of London.

He is a co-founder of AFSIA Portugal. Gonçalo was Chairman of the Young Member Group of the Chartered Institute of Arbitrators.

Besides publishing in English and Portuguese on different arbitration subjects, Gonçalo is also Co-Founder of YAR - Young Arbitration Review.

[BIOGRAPHIES]

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José Miguel Júdice is the Founding Partner and Head of Arbitration (PLMJ, Lisbon), a Visiting Associate Professor of Universidade Nova (Lisbon), international arbitrator, member of ICC International Court of Arbitration, of the ICSID Roster of Arbitrators, Board of Directors of Club Español de Arbitraje and Associação Portuguesa de Arbitragem.

He has more than 35 years of experience in litigation and arbitration, covering almost all the fields of law (Public and Private Law, International Contracts and Investments, Corporate Law, Environment, Finance, Real Estate, Construction, Health, Energy, Concession contracts, Procurement, PPP’s, Constitutional) .

As Counsel in Arbitration, José Miguel Júdice has intervened in more than 50 ad hoc, UNCITRAL, ICC, OHADA, ICSID and NAI, national and international arbitrations, since 1979 (telecommunications, construction and zoning,

JOSÉ MIGUEL JÚDICE

Robert is a solicitor advocate in Herbert Smith Freehill’s New York office specialising in international arbitration, with a focus on the energy sector. Robert was previously based in the international arbitration team in Moscow and in London where he was seconded twice to BP’s dispute resolution team. Whilst at BP, Robert advised a number of global BP entities on contentious matters in multiple jurisdictions and forums. Robert’s recent experience includes advising on an ICC arbitration relating to an off-shore West African field, and an ICDR arbitration relating to physical coal trading.

ROBERT ROTHKOPF

finance and banking, international contracts, agency and distributorship, investment disputes, oil, hotel and tourism, labor, shareholders agreements and corporate, industrial law, M&A).

José Miguel Júdice has sat as Arbitrator in more than 40 ad hoc/UNCITRAL and ICC, national and international arbitrations, as co-arbitrator, sole-arbitrator (1) and Chairman (24), submitted to Portuguese, Brazilian, Angolan, Spanish, BIT’s and International Law (telecommunications, construction, banking and finance, international contracts, agency and distributorship, mining, tourism, ppp’s, investment disputes, pharmaceutical, oil, hotel management, BIT disputes, etc). He is currently Chairman of one UNCITRAL investment treaty arbitration (Rurelec vs Bolivia).

As member of the Board of Directors of Portuguese Arbitration Association, he has been one of the authors of the new Portuguese Arbitration Law.

Amongst his many publications, José Miguel Júdice was author of “Portuguese Arbitration Law – A commentary (2012)”. As Professor, he teaches now Arbitration and Dispute Resolution, Energy and Politics and Business Law

Duarte G. Henriques is a Lawyer, Arbitrator and Legal consultant, with experience on Litigation and Arbitration, IT Law, IP Law, Copyright Law, Corporate Law, Commercial Law and Civil Law.

Graduated at Faculty of Law of University of Lisbon (1988).

Duarte G. Henriques is Arbitrator at “Arbitrare – Arbitration Centre”, Lisbon, Portugal (www.arbitrare.pt).

Duarte G. Henriques is a Member of Portuguese Bar Association since 1990; Member of “APA” Portuguese Arbitration Association; Member of the London Court of International Association European Users’ Council; Member of the International Bar Association – Arbitration Committee.

DUARTE GORJÃOHENRIQUES

78 • YAR • JULY 10, 2013


Henry Clarke is an Associate at Clyde and Co, Dubai and Riyadh. Henry is a Fellow of the Chartered Institute of Arbitrators and an English solicitor advocate (civil and criminal)

Henry Clarke concluded a LLM with Distinction (commercial, construction and investment law and arbitration), at Queen Mary University of London

Henry Clarke is member of the Young International Arbitration Group; ICC Young Arbitrator Forum; Law Society; Solicitors Association of Higher Court Advocates.

Before, Henry Clarke worked for the British Army February 2005 - September 2011 as legal officer and Major; worked at Clarke Willmott, as corporate solicitor ( April 2004 – January 2005) and was a Trainee solicitor at Clifford Chance (February 2002- March 2004).

As notable achievements, it should be mentioned the following activities:

· In a team researching, reviewing and editing next edition of International Comparative and Commercial Arbitration (Kröll, Lew and Mistelis).· Advising on grounds and conduct of a claim in an arbitration regarding a security contract for a higher education institute in Saudi Arabia· Advising on enforcement of judgments and arbitral awards of various nationalities within Saudi Arabia· Advising on the grounds for a sub-contractor’s claims for payment on a Saudi international airport construction project· An audit of the compliance of Tunisia’s national arbitration law with the revised UNCITRAL Model Law on International Arbitration and contemporary best practice in international commercial arbitration· Contributing to the drafting of the memorial, witness statements and collating of evidential submissions for an ICC arbitration with a German seat relating to an electricity grid project in the Horn of Africa under World Bank funded procurement and project terms.

HENRY CLARKE

Chiara Catti is an Italian attorney with experience in Dispute Resolution and Commercial Law Practice. She has worked in the commercial litigation department of Baker & McKenzie. In 2010 she joined the pharmaceutical company of J&J as legal counsel, supporting the sale and regulatory department in drafting commercial contracts and in complying with the Holding procedures. Before she was Business Development Coordinator for Clearly Gottlieb Steen & Hamilton.

She is a mediator according to the Italian Legislative Decree and with the New York Peace Institute, serving at the Brooklyn and Manhattan Civil Courts.

Chiara graduated with honors from the University of Milan in 2001 and she was an Erasmus visiting student at Université René Descartes, Paris V. In 2012 she received an LL.M. in Dispute Resolution from Cardozo School of Law, New York. Ms Catti is fluent in English and French. She has a fair knowledge of Spanish.

CHIARA VALENTINA CATTI

Luis Guerrero is Master of Laws and Phd Candidate at Universidade de São Paulo and a Mediation Specialist at Northwestern University.

Luis is a Visiting Scholar at Columbia Law School of Columbia University. Mr. Guerrero is a Member of CBar, ICC’s YAF, LCIA’s YAG. He is also a Pannelist of Painel II do Comitê de Controvérsias sobre Registro de Domínio do Centro de Arbitragem e Mediação da Câmara de Comércio Brasil-Canadá (CCRD-CAM/CCBC).

Currently, Luis is a Partner at Dinamarco, Rossi, Beraldo e Bedaque Advocacia.

LUIS FERNANDO GUERRERO

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Kirthi is a legal researcher and lawyer. A Peace and Conflict studies enthusiast, Kirthi is a volunteer with the UN.

She is presently a Commissioning Editor with e-IR, an online International Relations portal, the Logistics and Constituents Head at The Channel Initiative, working for post-conflict reconstruction in the DR Congo, specifically targeting women. Kirthi works with DeltaWomen, as a writer and with CAAGLOP, as a Managing Editor and writer on African Policy.

Recently, Kirthi was part of the UNICEF-UN Women Global Thematic Consultation on Addressing Inequalities through her paper titled The Rule of Law to combat Sexual Violence in a Conflict

KIRTHI JAYAKUMAR

V. Inbavijayan was educated at Dr.Ambedkar Govt. Law College, University of Madras. After completing his legal education, he took up litigation practice at High Court of Madras (1997). His enthusiasm towards Arbitration made him to pursue whole time arbitration practice since 2001.

So far he has presided as sole arbitrator and represented as counsel in over 250 domestic cases, several Documents–only small claims finance arbitrations and 10 international arbitrations.

His areas of practice includes international commercial arbitration, maritime arbitration, international trade & contracts, intellectual property rights, construction disputes, finance disputes, securities arbitration, joint ventures, banking law, documentary credits (L/Cs), ADR, sale of goods, domain name disputes and investment disputes.He has been accredited as an arbitrator in HKIAC, CIETAC, RCAKL, CRCICA, ICADR, ICA, CIDRA and various other regional and national arbitration

VEERARAGHAVAN INBAVIJAYAN

institutions. To add up, he is a co-founder and former Secretary of an arbitration institution, CNICA and inducted as member of ICCA.

Recently he has been approved as Tutor of Chartered Institute of Arbitrators, UK and has been listed in the 2008 edition of International Who’s Who of Commercial Arbitrators. To add up

Chambers Asia Directory 2010 refers as “Veeraraghavan Inbavijayan is active in commercial arbitration and described as “excellent – he handles matters in a highly professional manner and can achieve fast results.” and 2011 refers as “ Veeraraghavan Inbavijayan is a respected figure, who focuses on handling international arbitrations on a wide range of disputes, including those relating to distributorship agreement, construction and satellite right Chambers Asia Directory 2012 refers as “Veeraraghavan Inbavijayan earns accolades for his “noteworthy knowledge in arbitration.” He undertakes both domestic and international arbitration, particularly in international trade and commercial disputes”.

In addition he is promoting the concept of ADR by way of writing articles and books, providing training courses and gives lecture on Arbitration and ADR in law schools, Universities and conferences worldwide.

Environment. Kirthi dabbles with Intelligence and Security Analysis with Open Briefing, as an Associate Researcher, at the Asia-Pacific Desk, and runs an International Law Consultancy and Academic Journal called A38.

Kirthi has written ad-hoc features for forums that include TransConflict, WorldPulse and PeaceXPeace and is a member of the TrustLaw Network.

Kirthi is a legal researcher and lawyer. Her interest and experience over all lie in Peace and Conflict, Public International Law, Gender issues, International Humanitarian Law, and in terms of a regional focus, in Afghanistan, the Middle East, DR Congo and South-Asia.

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Porfírio Moreira is a Senior Associate at Cardigos Law Firm, working in the Corporate Group. His practice focuses on corporate, EU law, and employment related matters.

Porfirio has wide experience in business reorganization, involving private and state-owned companies as well as in litigation and arbitration, frequently in cross-border disputes.

Porfirio studied at College of Europe, LL.M in EU Law, 2012 and at Université Paris Panthéon-Sorbonne, Postgraduate Studies in EU Law, 2007.

PORFÍRIO MOREIRA

André Pereira da Fonseca is a Visiting Attorney at the New York office of Herbert Smith Freehills and an Associate of Abreu Advogados in Lisbon. He has also worked in Abreu Advogados local offices / partnerships in Angola and Mozambique.

He is a graduate from the Faculty of Law of the University of Lisbon and has an LL.M in Comparative and International Dispute Resolution from Queen Mary - University of London, School of Law.

André is a member of the Portuguese Bar Association and a member of the Alumni & Friends of the School of International Arbitration, University of London.

Andre’s practice focuses on national and international dispute resolution, notably representing clients in complex cross border litigations and arbitrations.

ANDRÉ PEREIRA DA FONSECA

Thomas is a New York qualified attorney and counselor-at-law, currently Of Counsel at AAA Advogados in Lisbon. He is a graduate from the University of Paris X Nanterre Law School.

He has an LL.M in Alternative Dispute Resolution of the University of Texas in Austin (2008/2009), during which he focused on International Arbitration and Litigation and Alternative Dispute Resolution, and Mediation, as well as became a certified mediator, and where he participated in the Graduate Portfolio Program in Alternative Dispute Resolution, presenting his research on the theme of “Cyber- Arbitration”.

Thomas co-Authored of the Portuguese Chapter of EU Mediation Law and Practice (published by Oxford University Press in October 2012), the Portuguese Chapter of the International Comparative Legal Guide to International Arbitration 2010 / Portugal – Global Legal Group (GLG) – (Published in August 2010) and has won the Consulegis Thomas Marx award for 2010 with his paper in the topic of “Cross-Border Commercial Mediation”.

He is the Vice-President and co-founder of the ICFML – Instituto de Certificação e formação de Mediadores Lusófonos, a non-profit organization aimed at training and certifying Portuguese-speaking mediators. Thomas teaches mediation and negotiation with the ICFML.

THOMASGAULTIER

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Steven P. Finizio is a partner at Wilmer Cutler Pickering Hale and Dorr, LLP. He is a member of the International Arbitration and Securities Litigation and Enforcement Practice Groups. Prior to joining the London office in 2000, Mr. Finizio practiced in the firm’s Washington, DC office. He joined the firm in 1993.

Finizio’s practice focuses on complex commercial and regulatory disputes, and concentrates primarily on international arbitration. Mr. Finizio also serves as an arbitrator in international commercial arbitrations.

Finizio has advised clients on matters arising under the rules of all the major international arbitration institutions, and in disputes sited in both common law and civil law jurisdictions and governed by the laws of jurisdictions in Europe, Asia and the US. Mr. Finizio also frequently advises on the drafting of dispute resolution clauses for commercial agreements. Mr. Finizio is recognized as a leading practitioner in guides such as Chambers, Legal 500, Global Arbitration Review’s Who’s Who in International Arbitration and Euromoney’s Guide to the World’s Leading Experts in Commercial Arbitration.

Finizio teaches International Commercial Arbitration as an Adjunct Professor at Pepperdine University Law School in London and is on the faculty at the Cologne

STEVEN P. FINIZIO

Academy of Arbitration and for AILA’s annual International Treaty Law and Arbitration Programme. He speaks regularly on international arbitration at conferences and seminars, including at events held by the ICC, ICSID, AAA, German Arbitration Institute (DIS), Swedish Arbitration Association, Swiss Arbitration Association (ASA), LCIA India, and the British Institute of International and Comparative Law (BIICL).

Finizio is co-author of A Practical Guide to International Commercial Arbitration: Assessment, Planning and Strategy (Sweet & Maxwell 2010; new edition forthcoming) and also of “International Commercial Arbitration” in The Law of Transnational Business Transactions (West 2004) and is a contributing editor to the International Comparative Legal Guide to International Arbitration (Global Legal Group). Topics of recent articles include the taking of evidence, the Energy Charter Treaty, arbitrator appointment, anti-suit injunctions, arbitrator conflicts, provisional measures in investor-state arbitration, a comparative law discussion of the “plain meaning” rule of contract interpretation, and expert determination clauses.

Finizio is a member of the California and District of Columbia bars and a registered foreign lawyer, Law Society of England and Wales.

Jeremy Bocock participated in the International Arbitration Group’s Intern Program, in London, at Wilmer Cutler Pickering Hale and Dorr LLP between April and June 2013; Jeremy previously worked in Paris for the ICC International Court of Arbitration between January and March 2013 and for Freshfields Bruckhaus Deringer from July 2011 to December 2012.

JEREMY BOCOCK

Jeremy attended the Paris Bar School between 2011 and 2013 and studied at the Institut des Hautes Etudes Internationales (IHEI) – Paris II Panthéon-Assas (International law, investment law and arbitration, 2nd diploma, Cum laude) where he prepared the Thesis: « Economic necessity in the Argentinean ICSID awards, CMS v. LG&E

82 • YAR • JULY 10, 2013


Sofia Martins joined Uría Menéndez in 2008 when it joined forces with the Portuguese firm Fraústo da Silva & Associados, of which she was a founding partner. Before that, she was an associate at Fraústo da Silva Mendes Martins & Associados, which she joined in 2004 from Henrique Abecasis, Andresen Guimarães & Associados, where she worked from 1996 to 2004. Sofia has also been a legal adviser to the Ministry of Agriculture.

She mainly represents clients in civil and commercial litigation and arbitration at all levels of the Portuguese court system and arbitral tribunals in Portugal and abroad. She is also listed in the rosters of prestigious arbitral institutions, participating regularly in colloquiums, seminars and conferences onarbitration matters, frequently as a speaker.

Sofia also advises clients on regulatory and supervisory aspects of insurance law, as well as in insurance related disputes. Sofia assists clients in the negotiation of insurance plans and policies, insurance distribution and reinsurance agreements.

SOFIA MARTINS

Miguel de Oliveira Martins is a Trainee Lawyer at Uría Menéndez – Proença de Carvalho. Miguel is a graduate at the Portuguese Catholic University, School of Law, in Lisbon (2005). Before joining the firm, Miguel was a Trainee Lawyer at NGSL & Associados, Attorneys at Law (2010-2012). He was a DRPA Certified Mediator at the Superior Court of California (2007-2008), a Member and Contributor to the American Bar Association (2007-2008), a Legal Consultant at OECD (2005-2006) and a Junior Deputy to the European Parliament (1999). Miguel also completed an LL.M. - Master of Laws in International Comparative Law at the University of San Diego, School of Law (California, USA) and a post-graduation in International Law at the University of Montpellier, School of Law, France (2005)

MIGUEL OLIVEIRA MARTINS

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The First Under 40 Portuguese International Arbitration Review
