ADR - general

1
ADR - general

• Arbitration one of the techniques of  ADR 
• others are eg mediation, conciliation, expert
  determination
• In the EU, access is simplified by the  ODR 
  Platform (Reg. 524/2013) there is some
  regulation of ADR esp. for consumer disputes (Reg
  11/2013) ADR entitites must also fulfill other
  functions (data collection, information and
  prevention)
• Uncitral
• Singapore Convention on International Settlement
  Agreements Resulting from Mediation (in force
  2020, 6 ratifications, no EU MS yet) on
  recognition of written international settlements
  in commercial disputes resulting from mediation
• promotes ODR for cross-border e-commerce
  transactions issued in 2016  Technical Notes on
  ODR  (rather descriptive)
• Informal forms of  contract governance  in
  cross-border contracts, creditors often do not
  even try state courts (or not even arbitration),
  and use e.g. monitoring reputation management.
• Recent proposals for blind arbitration through
  crowdsourcing

2
ADR escalation - general

• Sometimes  dispute escalation clauses  or
   multi-tier (arbitration) (dispute resolution)
  clauses  first negotiation, then
  mediation/conciliation, or a third party advice,
  then litigation (arbitration or courts)
• E.g. in art. 20 FIDIC Red Book first
  determination by the Engineer, then a  Dispute
  Adjudication Board  (DAB), then ICC Arbitration
  eg World bank standard forms eg NEC4 (New
  Engineering Contract version 4)
• Such a clause is binding, may lead to invalidity
  of next step if earlier not made (eg Swiss BG 16
  March 2016)
• See e.g. also Ebay dispute resolution system.

3
Arbitration - general

• Types of arbitration
• Arbitration based on international public law, eg
  ICSID (supra)
• Arbitration based on national law, this chapter
• Denationalised arbitration does not really exist.
• Double nature
• On the one hand on a contractual basis (more
  correctly 2 contracts 1 between the parties
  and 2with the arbitrator(s))
• On the other hand jurisdictional as to
• its procedure (procedure is analogous to
  judicial procedure), and
• its effects
• 1 impact normal judge has lack of
  jurisdiction
• 2 the arbitral decision is a jurisdictional
  decision (res iudicata) and not merely a
  contractually binding decision even if not
  enforceable yet (auctoritas, not yet potestas)

4
(National) arbitration statutes

• Where arbitration is based upon national law
  (esp. rules on judicial organisation and
  procedure)
• gt the national law of the  place of
  arbitration  contains the conflict rules
• gt which refer to the applicable national law on
  (aspects of) arbitration (to be distinguished
  from the question of the law applicable to the
  case itself)

5
(National) arbitration statutes

• Topics of (national) arbitration statutes are
• 1) the conflict of law rule and
• 2) substantive rules, such as rules concerning
• the arbitration agreement,
• the arbitrability (disputes capable of being
  settled by arbitration),
• the arbitral procedure,
• the supervision by (national) courts,
• the effects of the award (recognition,
  enforcement),
• the annulment of the award.
• Sometimes separate rules for domestic and
  transnational arbitration (eg Switzerland
  Australia International Arbitration Act 2010
  French case law identifying a French substantive
  international law of arbitration, Cass. 30 III
  2004 in Unikod)

6
Harmonisation of arbitration statutes ?

• Partial harmonisation of the arbitration statutes
  (successful Uncitral model law ICL 1985, revised
  2006, incorporated in many national statutes, in
  26 EU MS at least in part, in 13 in full, further
  i.a. Australia, in total at least 80 states)
• National statutes e.g. in Belgium in Judiciary
  Code (revised 2013) in NL in the CCP art. 1020
  ff. (since 1-1-2015) in France in CPC UK
  Arbitration Act 1996 in the US Federal
  Arbitration Act (FAA) 1925, OHADA uniform
  Arbitration Act, etc.
• Often inspired by the Uncitral model law
• Treaties on recognition and enforcement abroad
  see the NY Convention 1958 (successful)
  (predecessor Geneva Convention 1923/1927)

7
Arbitration (dis)advantages

• Reasons for arbitration advantages and
  disadvantages
• Flexibility of procedure gtlt uncertainty
• Parties can choose seat, number of arbitrators,
  language, division of costs
• Confidentiality (no public character of
  procedure)
• Higher costs for a single instance (arbitratrors
  to be paid) gtlt Single instance, in principle no
  appeal, usually quicker (not always)
• In jurisdictions with class actions avoid class
  actions
• Arbitrators usually more specialised than judges
  in the type of dispute
• Internationally easier to obtain recognition and
  enforcement than for foreign judgments (success
  of NY Convention, infra)
• Not every type of relief can be granted by
  arbitrators
• Not automatically enforceable
• Difficult to oblige third parties to join (but if
  linked contracts also provide for arbitration,
  arbitration may be easier) and no injunctions
  against third parties (eg to produce documents)

8
Arbitration questions of contract law

• Possible issues (on following slides)
• Formation (offer acceptance), interpretation
• Validity and invalidity as a contract
• Legal capacity of the parties to conclude such an
  agreement
• Arbitrability of the issues to be settled (i.e.
  can the issue be settled by arbitration ?)

9
law applicable to arbitration agreement
formation validity

• The formation and validity of the arbitration
  agreement are in principle determined by the lex
  contractus (proper law) of the arbitration
  agreement, also called lex arbitri
• but conflict of law rule in CH NL is more
  favorable it is sufficient that it is valid
  according to the law chosen or the law of the
  seat of arbitration or, absent choice of law, the
  lex causae (law regulating the merits)

10
Law applicable to arbitration agreement
formation validity

• Conflict rule for the lex arbitri? In most places
  of arbitration (countries) the conflict rule is
• gt 1 choice of law (express or implied),
• gt 2 (subsidiary) place of arbitration (lex
  fori) or closest connection (chosen seat being an
  important element EWCA in Sulamerica, 2012) (in
  Belgium Rome-I is applied overshootingly,
  except where national law has a special conflict
  rule)
• gt Q. whether a choice of law of the contract in
  general is also an implied choice of law for that
  arbitration agreement.
• The lex arbitri (lex contractus) of an
  arbitration clause in a wider agreement is
  determined separately from the lex contractus of
  the contract of which it is a part

11
Arbitration contract formation

• What do most applicable laws/statutes (lex
  arbitri) provide?
• The arbitration agreement (agreement which
  obliges the parties to use arbitration in case of
  dispute and makes the future award binding for
  the parties)
• - can be a separate agreement (ad hoc),
• - or a clause in a wider agreement
• (art. 7 (1) Model law).
• In case of several agreement between the parties,
  some containing arbitration clauses, courts may
  apply an umbrella agreement test (is there an
  umbrella agreement that contains the clause)

12
Arbitration agreement formation validity

• Separability
• The formation and validity of the arbitration
  agreement must be judged separately from that of
  the contract it is part of (autonomy or
  separability of the arbitration clause) (cfr.
  French Cass. 7 May 1963 Gosset or SC US 1967 in
  Prima Paint v Flood Conklin in the UK S.6
  Arbitration Act and EWCA 2012 in Fiona Trust v.
  Privalov). Comp. Art. 16 (1) Model law.
• Effect where the clause is valid, only the
  arbitrator decides the validity of the rest of
  the contract
• Where one element of the arbitration clause is
  invalid, the rest of the clause remains valid (eg
  arbitration clause specifying an arbitral forum
  that does not exist)

13
Arbitration agreement formation validity

• What do most applicable statutes (lex arbitri)
  provide? Invalidities ?
• No or only few specific rules the rules of
  general contract law on formation and validity
  normally apply (Implied consent by a third party
  in Cass.Fr. 26 Oct. 2011 CMN / Fagerdala). Often
  a writing reguirement (flexible, art. 7 (2 ff.)
  Model law)
• Sometimes invalidity of unilateral optional
  arbitration clauses (eg Russia California Appeal
  Court 19 March 2013 Compton comp. for forum
  clauses Cass.(Fr.) 26 Sep 2012 v. 7 Oct. 2015
  but deemed valid in Belgium, UK, Germany, Italy,
  Spain)
• Consumer law next slide
• Some specific rules, e.g. validity of agreement
  for arbitration of disputes governed by
   overriding mandatory provisions  discussed
  after arbitrability

14
Arbitration agreement formation validity
consumers

• Validity of arbitration agreement with a consumer
  ?
• In EU in general arbitration clauses not per se
  invalid (in concreto evaluation whether unfair or
  not)
• Belgium as such not unfair
• France presumption of unfairness in domestic
  contracts, valid in international contracts
  (Cass. 1997 in Renault/V2000)
• England unfair for small claims (below 5000 )
• Austria only if concluded after dispute has
  arisen
• New ADR Directive 11/2013 art.10 consumer has
  always the right to take the initiative to go to
  Court business must inform consumer about ADR
  possibilities
• In practice thus often unilateral / asymmetrical
  arbitration (or other ADR) clauses
• E.g. in the UK the FOS (Financial Ombudsman
  Service) makes an assessment of what is fair and
  reasonable if the consumer accepts, this is
  binding on both parties, but the consumer can
  still refuse the proposal and go to Court
• unfair character of arbitration clause must be
  checked by judge judging the validity of the
  arbitral award (C-168/05 Mostaza Claro setting
  aside rule that this had to be raised in the
  arbitration proceedings itself)

15
Arbitration agreement formation validity
consumers

• Validity of arbitration agreement with a consumer
  ?
• US law
• - no invalidity of arbitration clauses (SC in
  2011 and 2013)
• - no invalidity of arbitration clauses in
  labour contracts excluding collective actions (SC
  21 May 2018, Epic systems)
• Some specific rules, e.g. validity of agreement
  for arbitration of disputes governed by
   overriding mandatory provisions  discussed
  after arbitrability

16
Arbitration agreement formation validity
sports

• ECHR 2 Oct 2018 in Pechstein / Switzerland on
  obligatory arbitration for all disputes
  concerning sport by professional sporters
  (jursdiction of the C.A.S T.A.S.)
• Clause is qualified as forced arbitration.
• Effect arbitration procedure must meet all the
  requirements of fair trail under art. 6 1 6 ECHR
  (which is not the case for truly voluntary
  arbitration), including a public hearing
  (transparency)

17
Arbitration agreement - capacity

• Conflict rule
• Often (but not in common law) a separate
  conflict rule as to the law applicable to the
  legal capacity of the parties, referring to the
   personal law  of each party
• What do most applicable statutes decide as to the
  capacity required for an arbitration agreement ?
  (also called arbitrability ratione personae)
• In principle the same restrictions on capacity as
  in the case of a settlement agreement (eg minors,
  insolvent party, ...)
• Sometimes additional restrictions on the capacity
  for arbitration agreements, such as restrictions
  to authority granted to agents, directors,
  receivers (in bankruptcy), public agencies,
  etc... to dispose of the rights at stake

18
Arbitration agreement arbitrability

• Conflict rule as to the issue of arbitrability
  (ratione materiae)
• often a cumulative conflict rule leading to more
  than one law applicable. Enforcement may require
• arbitrability under the law of the place of
  arbitration
• arbitrability under the law applicable to the
  issue to be settled (lex causae)
• arbitrability under the law of the country of
  enforcement.
• see art. V.2.a. NY Convention.
• Less cumulative is art. VI,2 ECICA (only lex
  contractus arbitri, and own law of the country
  refusing recognition)
• E.g. Belgian conflict rule (as stated in Cass. 16
  Nov 2006 Van Hopplynus, and Cass. 14 Jan. 2010
  Sebastian) refers to the application of the
  Belgian law on arbitrability in all disputes
  where the Belgian courts have jurisdiction

19
Arbitrability and public policy

• Arbitrability may be limited in matters governed
  by rules of public order, but in general
• 1 a dispute is arbitrable even if rules of
  public policy apply
• 2 the arbitrators may and must apply rules of
  public policy that are relevant for the dispute
  (e.g. a party invokes that a contract is void
  because contrary to competition law), and
• 3 the judicial control takes place a posteriori.
• Comp.
• Cass. B. 2 Feb. 1973
• ECJ in Eco Swiss / Benetton (1999) competition
  law is part of the public policy exception in
  exequatur procedures (a posteriori control)
• SC.US in Mitsubishi Motors v. Soler
  Chrysler-Plymouth (1985) arbitrable
• However, the arbitration agreement may
  nevertheless be invalid (see next slide) (maybe
  better to tackle the problem not merely a
  posteriori?)

20
Arbitrability overriding mandatory law

• Arbitration of disputes governed by overriding
  mandatory provisions  ex ante control or ex
  post ? (comp. discussion on forum clauses) ?
• Applications labour law, some consumer
  contracts, rules protecting distributors or
  commercial agents
• Case law in B, Austria, Italy, Germany ex ante
  control where parties can waiver their right
  only after the dispute has arisen, they cannot on
  beforehand be bound to arbitration, unless the
  arbitrators are required to apply these mandatory
  provisions irrespective of the otherwise
  applicable law.
• gt traditional Belgian case law conditional
  arbitrability disputes concerning termination
  of distributorship or commercial agency on
  Belgian territory (Belgian Distributorship Act
  1961 and Commercial Agency Act 1995) are not
  arbitrable unless requiring the arbitrators to
  apply these provisions of national law (Cass. 28
  June 1979 Cass. 14 Jan 2010 distributorship
  Cass. 3 nov 2011 agency).
• gt discussion whether still the case under new
  Arbitration Act 2013, art. 1676 Belgian Jud.C.
  Lower courts have accepted arbitrability in
  principle (subject to control a posteriori)

21
Arbitrability overriding mandatory law

• Arbitration of disputes governed by overriding
  mandatory provisions 
• Comp. German case law, OLG München 17 May 2006
  (likely danger that foreign tribunal will not
  apply the mandatory provision arbitration clause
  combined w/ choice of foreign law is presumption
  of likeliness). BGH 5 Sep 2012 (Virginia agency
  case, forum clause in agency contract)
• Comp. English High Court in Accentuate (2009) and
  in Fern Computers (2014)
• In Austrian OGH 1 March 2017 (T Gmbh /O Inc.),
  there was already a partial arbitral award (New
  York state) the arbitration clause with a choice
  of law referring to NY law was deemed invalid.
• As within the EU, forum clauses cannot be set
  aside in eg distribution contracts cases, a
  subsidiary forum clause could help.

22
Arbitration who judges the validity ?

• Who judges the validity and scope of the
  arbitration agreement ?
• 1. The nominated arbitrator(s)
• The nominated arbitrator has in principle
  jurisdiction over the questions of validity of
  the arbitration agreement, legal capacity to
  refer to arbitration, and arbitrability
  (provisional competence-competence - but
  subject to a possible annulment of the award by
  the court of the place of arbitration). Comp.
  Art. 16 Model law
• Also jurisdiction over the interpretation of the
  arbitration agreement whether the dispute or
  action is covered by the arbitration agreement.
  Cfr. SCotUS 10th June 2013, Oxford v. Sutter The
  arbitrator's construction holds, however good,
  bad, or ugly Swiss BG 9 Nov 2015 (not
  questioning decision on the facts of the
  arbitrator).
• 2. The otherwise competent national court (next
  slide)

23
Arbitration who judges the validity ?

• Who judges the validity and scope of the
  arbitration agreement ?
• The otherwise competent national court has also
  jurisdiction to judge the validity of an
  arbitration agreement invoked (as exceptio
  arbitrandi) by a party to deny the jurisdiction
  of that court, but not always to question an
  arbitral decision on the facts on which it bases
  jurisdiction.
• Some countries give also a  negative effect  to
  the competence-competence, suspending any
  judgment on the validity until there is an
  arbitral award, unless the arbitration agreement
  is manifestly/prima facie invalid (e.g. Swiss
  interpretation of art. 178 Swiss PIL French case
  law interpreting art. 1448 CCP Cass. 7 June
  2006, Tag Heuer case Portugal Malaysia) (in
  some arbitration agreements, there is an explicit
  clause Imposing the parties to postpone any
  judicial action until after an arbitral award
  Scott v Avery clause)
• (to this competence, Brussels-I does not apply)
• American law to some extent accepts that also
  this competence can be  delegated  to the
  arbitrators by a delegation clause
• The party contesting the validity has no
  obligation to participate in the proceedings
  ( Dallah -principle, UKSC 2010)

24
Effects of a valid arbitration agreement

• Effects of a (valid) arbitration agreement
• - arbitrators have jurisdiction over the dispute
  referred to arbitration
• - every other judge lacks jurisdiction. This has
  to be invoked  in limine litis  (art. 16 Model
  law)
• - within the substantive scope of the
  arbitration agreement, its up to a second
  arbitrator to judge whether an earlier arbitral
  award has res iudicata concerning the new claim
  (in the US Belco-rule, 2d Cir 1996)
• - the court of the place of jurisdiction has
  certain powers in relation to arbitration
  proceedings in that place (infra). The law of
  that place may provide the possibility of an
  anti-suit injunction prohibiting the other party
  to pursue court proceedings instead of
  arbitration (eg UK SC 2013 in Ust-Kamenogorsk)
  (but not against proceedings before courts in the
  EU, ECJ in West Tankers)
• - provisional measures next slide

25
Effects of a valid arbitration agreement
provisional measures

• Arbitral tribunal normally has power to grant
  interim measures (art. 17 ff. Model law)
• Courts may still take provisional and protective
  measures (summary proceedings), (art. 17J
  Model law)
• Parties may still take protective measures (e.g.
  conservatory seizure) after permission of the
  state judge where such permission is required
• Insofar as there is no Emergency Arbitrator
  appointed with this task (cfr. New ICC rules) in
  Dutch law only insofar as arbitrator is not able
  to do it (or not timely). Question whether
  arbitrartion agreement cn prohibit the parties
  taking such actions in court.
• Eg art. 44 UK Arbitration Act In the new
  Belgian Act, art. 1691 Jud.C. concurrent
  jurisdiction arbitrator/courts

26
Effects of a valid arbitration agreement

• Effects of a (valid) arbitration agreement
  (cont.)
• Effects for successors ?
• - assignee will normally be bound (see Ch.
  assignment)
• - administrator in bankruptcy in principle bound
  (eg Belgium), but not necessarily always (eg a
  case under Polish law accepted by the Swiss SBG
  31 March 2009)

27
Arbitration agreement - content

• Possible content of an arbitration agreement
• Definition of the disputes covered by
  arbitration
• often restrictive interpretation of arbitration
  clauses
• Clarify whether arbitrator has authority to
  decide on costs to be borne by the losing party
• Possible reference to the procedural rules of an
  Arbitration Institute
• (next slides)

28
Arbitration institutions

• Possible reference to procedural rules - (1) of
  an Arbitration Institute
• Specialised (sector specific) international
  arbitration institutions (e.g. commodity
  arbitrations (eg by GAFTA, Grain and Feed Trade
  Association), WIPO arbitration center (IP),
  T.A.S. C.A.S Lausanne for Sports ARIAS
  (Insurance and Reinsurance arbitration society
  UK) LMA (London Maritime Association)
• General international arbitration institute ICC
  has a Court of Arbitration that supervises
  arbitral proceedings (intervenes in nominations,
  payment of costs, control of formal validity of
  award, respect for time schedule) Since 2016,
  ICC publishes composition of arbitral tribunals
  (more transparency)
• Common Court of OHADA at Abidjan is also a
   Court of Arbitration  in the same sense as the
  ICC
• National arbitration institutions and similar
  next slide
• the PCA (Permanent Court of Arbitration) in The
  Hague (NL), an international organisation
  specialised in disputes of public international
  law (s. infra)

29
Arbitration institutions

• National arbitration institutions and similar,
  main institutions
• LCIA (London Court of international
  arbitration)(an English company)
• CIETAC (China international Economic and Trade
  Arbitration Commission)
• Swiss Chambers Arbitration Institution (Swiss
  rules)
• SCC (Stockholm Chamber of Commerce)
• Paris Arbitration Rules
• VIAC (Vienna International Arbitral Centre)
• Cepani (Belgium)
• AAA (American Arbitration Association) and its
  International Centre for Dispute Resolution
  (ICDR)
• DIAC (Dubai International Arbitration Centre)
• DIS (German Institution of Arbitration)
• KLRCA (Kuala Lumpur Regional Centre for
  Arbitration)
• MKAS (Moscow International Commercial Arbitration
  Court)
• SIAC (Singapore International Arbitration Centre)
• CEAC (Chinese European Arbitration Centre
  Hamburg)
• HKIAC Hongkong
• Most important seats London, Paris, Hongkong,
  Singapore, Geneva, Stockholm, N York.

30
Arbitration agreement - content

• Possible reference to procedural rules (2)
• In case of ad hoc arbitration, parties have to
  regulate these matters themselves in the
  agreement (supplemented by default rules of the
  arbitration statute)
• Intermediate solution arbitration according to
  the UNCITRAL Arbitration rules (version 1976
  revised 2010) detailed rules, eg also
  possibility of nominating ad hoc an  appointing
  authority . Since 2010, the PCA (Permanent Court
  of Arbitration) is the indirect appointing
  authority by default, i.e. will appoint the
  appointing authority if parties have not agreed
  upon one (art. 6 Uncitral)
• The PCA also has its own rules for cases where a
  state or international organisation is involved
  (consolidated in the PCA Arbitration rules 2012)
  (dealing more in detail also with issues of
  international public law)

31
Place of arbitration

• Determination of the place of arbitration (seat).
  
• The seat is a legal notion it links the
  arbitration procedure to a specific country (but
  does not oblige the arbitrators to conduct
  procedures there not necessarily the venue of
  hearings comp. 20(2) Model law).
• Relevance
• - determines which court is competent to
  supervise the arbitration, for challenges to
  arbitrators, to decide an action for annulment of
  the award, etc. (juge dappui) (the court will
  refuse to help if it deems the arbitration
  against its international public order)
• - determines the conflict of law rules
  indicating the law applicable to the arbitration
  
• - provides the default procedural rules (infra)
  but arbitrator not bound if not mandatory
• - localises the arbitral award (this will eg
  determine whether it is localised in a country
  that has ratified a Treaty on recognition and
  enforcement of arbitral awards). Art. V(1)(A) NY
  Convention requires the award to comply with the
  law of the country where it was made

32
Arbitration agreement content

• Determination of the number of arbitrators (in
  many countries must be uneven)
• Possibly rules on challenging impartiality
  (unless left to the court), eg in the ICC rules
  within 30 days since obtaining the information
• Choice of the language(s) of the procedure
  (language of the submissions may be relevant
  also for evidence) (see also art. 22 Model law)
• Choice of the law applicable to the arbitration
  agreement (supra)
• (NB. Choice of the substantive law to be applied
  to the dispute, but this is strictly speaking not
  part of the arbitration agreement itself)

33
Arbitration appointment arbitrators

• Appointment of the arbitrators
• Number default rule is 5 (art. 10 Model law)
• If 3 arbitrators, usually one nominated by each
  party, the 3rd ( umpire ) is either nominated
  by both of them together or by the arbitration
  institute (comp. Art. 11 (1) Model law)
• Multi-party arbitration Uncitral has specific
  rules on appointment (also some national statutes
  do and some rules of arbitration institutions)
  also specific rules in the LCIA Rules
• Acceptance by the arbitrator(s) requires
  independence and impartiality duty to disclose
  possible conflicts of interests. Possible
   challenge  of an arbitrator (art. 12 ff Model
  law).
• Art. 1686 Belgian Jud.C esp. in case of
   repeat arbitration Cass.Fr. 20 Oct. 2010 X v.
  Prodim Logidis
• See IBA Guidelines on Conflict of Interest in
  Internat. Arbitration (revised 2014), and the
  broader approach of the ICC Guidance on Conflict
  Disclosure by Arbitrators (2016)
• Since 1 Jan 2016, ICC publishes the appointments
  of arbitrators
• But parties must challenge shortly after
  obtaining the information that would allow an
  objection Cass. Fr. 17 June 2017, Orange /
  Guinée Equitoriale

34
Arbitration conduct of proceedings

• Agreement on fees expensens arbitrators (in
  case of institutional arbitration under
  supervision of the Institution)
• Possible arrangements at the start of
  proceedings, often in  terms of reference 
• - definition of the dispute and the claims of
  the parties (esp. a  Statement of claim )
• - establishment of a timetable / calendar
• - possible appointment of an administrative
  secretary (see ICC note 1995/2012)
• - manner in which parties will present their
  arguments, disclose documents, present evidence,
  etc.
• As to taking evidence, parties could refer to
  the IBA-Rules on taking evidence (1999, revised
  2010) (compromise between continental and
  American traditions). According to Art. 17 Model
  law, the arbitral tribunal may require
  disclosure. A more continental model are the
   Prague rules  2018
• If not already in the terms of reference,
  possible  case management conference  (required
  in new ICC rules)

35
Arbitration conduct of proceedings

• Some rules have an early determination
  procedure (eg Singapore IAC rule 29 if manifestly
  outside jurisdiction or without merits), or an
   Expedited procedure  for smaller claims (ICC
  rules 2016 sole arbitrator rules apply by
  default under 2 mio USD, unless parties
  explicitly opt for standard procedure)
• Under most arbitration laws, a defense of lack of
  jurisdiction must be raised in limine litis
  (comp. Model law art. 16 (2))

36
Arbitration law applicable to the procedure

• Procedural rules (incl. rules on supervision by
  state court)
• Law applicable to the procedure ? (also called
  lex curiae)
• Law indicated by the conflict rule of the place
  of arbitration conflict rule usually refers to
  the lex fori, i.e. rules of the place of
  arbitration. Arbitrator may deviate if not
  mandatory.
• Some countries have separate procedural rules for
  international arbitration or refer to such rules,
  eg when the ECICA is ratified (European
  Convention on International Commercial
  Arbitration, Geneva 1961, 31 ratifications incl.
  11 EU member states, paneuropean)
• Some Institutions have in their rules also
  detailed guidelines on the conduct of the
  parties representatives (e.g. LCIA rules 2014)

37
Arbitration procedural rules

• Procedural rules determine
• the basic rules for the proceedings (classical
  rules such as adversary character, possibility to
  decide in absentia (by default), whether partial
  awards possible, whether dissenting opinions may
  be made public, duty to motivate award,
  notification of the award, ...)
• the rules on taking evidence and on valuation of
  proof. Arbitrators may apppoint experts (art. 26
  Model law). If expert examination is required,
  the ICC Rules for Experts may help (deal with
  proposal of experts by ICC, appointment rules,
  administration rules)
• Whether curia novit ius or law has to be invoked
  (and possibly proven) by the parties
• Next slide

38
Arbitration procedural rules

• Procedural rules may determine in which cases the
  state court can help / intervene
• E.g. parties can ask a court order where the
  arbitrator has no authority, eg for an Actio ad
  exhibendum against a 3rd party (order to produce
  documents)
• E.g. replacement of arbitrator(s)
• See also Art. IV ECICA on remaining jurisdiction
  of courts in relation to arbitration
• The request may be within the jurisdiction of
  the courts of the place of arbitration
• If not, the question arises how to seize a
  foreign court having jurisdiction over that
  evidence. See Ch. 11 on taking evidence abroad.
  Question whether arbitrator or arbitrating
  parties can directly go to the foreign court or
  not depends on the rules of jurisdiction in
  that country. E.g. in the US foreign litigants
  can directly request such a court order on the
  basis of S. 1782 USC (now usually accepted that
  this is also possible in case of foreign
  arbitration). Idem art. 27 Model law.

39
Arbitration the award

• The award must be
• - signed by the arbitrators, at least by a
  majority (art. 31 (1) Model law)
• - stating reasons (motivated) (art. 31 (2) Model
  law)
• In case of institutional arbitration, the
  Institution may have the power to check the award
  as to its form (scrutiny), not substance (eg ICC
  rules art. 27, Cepani rules)
• Some countries require the award to be filed
  (deposited) in court

40
Challenging the arbitral award

• In principle no appeal (unless agreed) (34(1)
  Model law) some arbitration rules provide an
  optional appellate procedure (eg new AAA rules)
• Challenging in court action for annulment
  according to the rules of the place of
  arbitration (seat)
• In most countries only limited grounds for
  annulment no valid arbitration agreement, no
  fair trial (incl. arbitrator not independent),
  award ultra petita (for Belgium, see art. 1717
  3 Jud.C (version 2013) for the UK S. 67
  Arbitration Act, etc.). Comp. Art. 34(2) Model
  law.
• Eg Cassation (Fr) 20 Oct. 2010, Somoclest
  v. DV construction.
• An error of law is not an excess of power (eg UK
  HL 2005 in Lesotho Highlands)
• However, where the arbitration rules
  themselves contain a procedure to challenge
  impartiality, that must be followed first
  Cass.F. 25 June 2014 in Avax/Tecnimont
• In some countries annulment can be excluded
  contractually if none of the parties is domestic
  (CH, B, Sweden) (rare in practice)
• Usually short time periods (art. 34(3) Model law
  3 months)

41
Challenging the arbitral award

• Effect of setting aside ? same arbitrators, new
  arbitrators, state court ?
• gt In principle the case has to be settled by a
  new arbitration procedure.
• Challenge by a third party ?
• According to Belgian law, third party opposition
  is possible as against a judgment (decision of
  Constitutional Court of 16 Feb 2017) (which Court
  has jurisdiction ? Probably the same court as for
  annulment)

42
Arbitration domestic enforcement

• Enforcement in the country of the award
  exequatur can be obtained in simplified
  proceedings
• - on unilateral request (without notice
  procedure)
• - merely a  marginal control  of the substance
• E.g. S. 66 Arbitration Act (Engl W)
• Third party involvement can simplify enforcement
  (third party holding the money in dispute)

43
Arbitration enforcement abroad

• Enforcement abroad can take place alternatively
  on the basis of
• the NY Convention 1958 (159 member states in
  2018)
• national law
• any other convention

44
Arbitration enforcementNY Convention (159)
45
Arbitration enforcement abroad

• Enforcement on the basis of the NY Convention
• In member states of that Convention (159 in 2018
  missing i.a. Taiwan, Iraq)
• Sphere of application territorial or
  non-domestic test in art. 1
• gt Eg Chinese Supreme Court 18 Dec 2013 refused
  Korea arbitral award between 2 Chinese companies
  related to a joint venture in China
• Only arbitral awards, eg no international
  commercial settlement agreements resulting from
  conciliation (UNCITRAL is developing an
  instrument on recognition and enforceability of
  ICSAs).
• Quid awards for interim measures, etc ? Disputed

46
Arbitration enforcement abroad

• Enforcement on the basis of the NY Convention
  1958 in member states of that Convention
• Simplified proceedings (additional exequatur of
  the state of the place of arbitration is not
  required, only exequatur in the state of
  enforcement)
• National law determines whether appeal is
  possible against the decision on exequatur, and
  if appeal suspends enforceability or not.
• NB. Cases on NY Convention published in Yearbooks
  Commercial Arbitration.

47
Arbitration enforcement abroad

• NY Convention
• Art. 5 - only limited grounds for refusal
  (exceptions), esp.
• (1a) Lack of capacity of a party
• (1a) Invalidity of the arbitration agreement
  according to the lex contractus)
• (1c) Jurisdiction exceeded (ultra petita)
• (2a) Arbitrability of the dispute is excluded by
  the lex contractus, the lex fori of the place of
  arbitration or the lex fori of the place of
  enforcement
• (2b) Contrary to public policy of receiving
  country
• Esp. the public policy exception is widely used
  by some countries, eg Russia practice
  statements of the Supreme Arbitrazh Court (new
  version 2013, Information Letter no. 156)
• The ILA issued a recommendation to restrict the
  public policy exception (ILA recommendation on
  public policy 2002)

48
Arbitration enforcement abroad

• The NY Convention is not exclusive (art. VII.1),
  enforcement can also be asked (and take place) on
  the basis of
• ECICA (more restricted list of grounds for
  setting aside award)
• other multilateral conventions,
• bilateral conventions, eg the 1925 Belgian-Dutch
  jurisdiction and enforcement convention also
  covers arbitral decisions
• possibly national law
• gt Choice to be made by the defendant (clearly,
  otherwise NY Convention applies) and in toto
  (no cherry-picking)
• Enforcement despite annullment in the country of
  the seat ?
• Exceptionally accepted by English Court in Yukos
  / Rosneft (2014)
• Art. 5 NYC states that in such case recognition
   may  be refused (Court in country of
  enforcement has to judge whether it recognises
  the annulment)