International Commercial Arbitration: Standard Clauses and Forms Commentary 9781472561381, 9781849464895, 9781782252030

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Preface Arbitration is becoming increasingly important in the field of international business. In the past, the typical parties to arbitration proceedings were big enterprises, represented by international law firms. As a consequence of globalization and the opening of markets in Asia, medium-sized enterprises can now become global players, joined by small and medium-sized law firms. While there are already many introductions to arbitration law to choose from, this book is different. It serves as a form book in which practitioners will find not only generic models but also models with commentaries for use in different jurisdictions. However, it is not the editors' intention to formalize or standardize arbitral proceedings. Rather, this book provides practical guidelines to help steer clients through arbitral proceedings. By using it to check submissions for completeness and formal accuracy, a practitioner can avoid pitfalls and thus improve the efficiency of the arbitration process. This publication aims to be n L I S C ~ U I 1001 for practitioners involveci in international arbitration proceedings. However. every case is different. The model forms must be adapted to take into account the specific ch;~rncteristicsof each individu;~lcacc.

The publication also focuses on institutional arbitration rules in Asia, introducing the reader to the SIAC, HKIAC, CIETAC, and KLRCA Rules in their current versions. The UNCITRAL commentary is based on the revised Rules adopted in 2010. The concept of the handbook has been developed at the Zurich University of Applied Sciences (ZHAW), School of Management and Law. The editors are proud to have won over 20 certified specialists for their vision of a form book on international arbitration law. Constructive feedback is most welcome and can be addressed to either the editors or the publishers. Winterthur, January 2013 The editors: Nicole Conrad Peter Miinch Jonathan Black-Branch

Authors' List LOIJISE BARRINGTON, JD, LLM, FCIArb, FHKIA Independent Arbitrator and Mediator; Director, Vis East International Commercial Arbitration Moot § 11

BARBARA BAUMANN, BSc. Zurich IJniversity of Applied Sciences (ZHAW), School of Management and Law, Department Business Law 55 2.3

JONATHAN BLACK-BRANCH, JP, FRSA Prof. D. Phil. Ph.D. Zurich University of Applied Sciences (ZHAW), School of Management and Law, Department Business Law; Royal Holloway University of London and University of Bedfordshire §§ 1.9

JENSBREDOW, RA, Secretary General German Institution of Arbitration DIS (Cologne) § 10

OMERCILINGIR, LL.B., LL.M. Zurich University of Applied Sciences (ZHAW), School of Management and Law, Department Business Law 902.3

NICOLE CONRAD, Prof. Dr., LL.M., RAin Zurich University of Applied Sciences (ZHAW), School of Management and Law, Department Business Law $5 2.3. 11

SANDRADt. V11.v BIEHI, RAin, Z.L.M. Bratschi Wiederkehr & Buob (Zurich) 5 16

ALEJANDRO GARCIA, RA, lic. iur., LL.M. Herbert Smith Freehills LLP (London) 15

KARINGRAF,RAin, LL.M. Wenger Plattner Attorneys at Law (Zurich) 5 16

HANNO KAMPF, Prof. Dr. University of Applied Sciences Mainz § 12

TIMOTHY KAUIZ,Prof. Dr. University of Applied Sciences Mainx §

12

List of Abbreviations AA AAA AALCO ACA ACCP ADR AGICOA

A0 Art. Arts ASA BAC BeckRS BGB BGH BSK BT-Drucksache CAS CCP CCP CEDR cf. CIArb ClETAC ClPAA CMAC CNlCA consid. CV DAB DAC DAC DFT DIAC DIFC DIS DRB e.g. e.V. EC ECHR

Arbitration Act American Arbitration Association Asian-African Legal Consultative Organization Arbitration and Conciliation Act, 1996 Austrian Code of Civil Procedure Alternative Dispute Resolution Association of International Collective Managcmcnt of Audiovisual Works (Association dc Gestion Internationale Collective des Oeuvres Audiovisuelles) Arbitration Ordinance article articles Association Suisse de 1'Arbitrage (Switzerland's Arbitration Association) Beijing Arbitration Commission Beck-Rechtsprechung Biirgerliches Gesetzbuch Bundesgerichtshof Base1 Commentary (Basler Kommentar) Deutscher Bundestag: Drucksachc Court of Arbitration for Sport (Lausanne) Swiss Code on Civil Procedure (Schweizerische Zivilprozessordnung vom 19. Dezember 2008, SR 272) French Code of Civil Procedure Thc Centre for Effective Dispute Resolution confer Chartered Institute of Arbitrators China International Economic and Trade Arbitration Commission Construction Industry Payment and Adjudication Act 2012 China Maritime Arbitration Commission Council for National and International Conlmercial Arbitration consideration curriculum vitae Dispute Adjudication Board Delhi High Court Arbitration Centre Department Advisory Committee on Arbitration Law Decision of the Swiss Federal Tribunal Dubai International Arbitration Centre The Dubai International Financial Centre German Institution for ArbitrationIDeutsche Institution fiir Schiedsgerichtsbarkeit e.V. Dispute Review Board exempli gratia (= for example) eingetragener Verein (Association) European Commission European Convention on Human Rights

Introtluclion to Arhitmtion

§

1

Introduction to Arbitration

I. Historical Background and Development . . . . . . . . . . . . . . . . . . . . .

II. Definition and Characteristics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1. Alternative to Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Private Mechanism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page 2 3 3 3 3 3

5. Binding Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. EnCorceable Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

Ill. Why Choose Arbitration? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

1. Advantages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a . Party Flexibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b . Less Formal than Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c. More Expedient Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d. Confidential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e . Nomination andor Appointment of Qualified Arbitrators . . . . . . . f.Cheaper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g. Greater Scope for Neutrality . . . . . . . . . . . . . . . . . . . . . . . . . . . . h . Binding Award Capable of Being Enforced . . . . . . . . . . . . . . . . . . 2. Disadvantages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a. Lack of Accountability and Quality Control . . . . . . . . . . . . . . . b.LimitedPowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c. Conflicting Awards - No Binding Precedent . . . . . . . . . . . . . . . . . d. Limited Grounds for Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . e . Multi-Party Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. International Arbitration Governing Framework. . . . . . . . . . . . . . . . 1. United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. The International Center for the Settlement of Investment Disputes Convention (ICSID) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Inter-American Convention on lnternational Commercial Arbitration 4 . European Convention on International Commercial Arbitration . . . . . V.Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jonathan Black-Branch

4 4 4

5 5 5 5 5 6 6 6 6 6 6 7

7 7

§

1

I. Historical Background and ~evelopmentl "Arbitration is the oldest method for the peaceful settlement ol international disputes" (Stuyt 1990). 1.1

Arbitration is by no means a new or recent concept, it has bcen uscd for thousands of years, in various forms and guises. It can be traced back to the ancient Greeks who would submit disputes between cities to arbitration and used arbitration clauses within the state-to-state treaties (Born 2009, p. 9 - 10). This tradition of inter-state arbitration continued and was developed throughout the centuries. It is not until the developments over the 18th and 191hCenturies, however, that saw it evolve into the manner in which it is recogniscd today.

1.2

That said, it is not only the inter-state method of arbitration which has an ancient history. Commercial arbitration, in a less defined form than today, can be traced back to the Middle East and Ancient Egypt wherc individual complaints wcrc resolved through the use of neutral third party involvement. Ancient Greeks used private arbitration to settle disputes outside the court system and considered arbitration decisions as binding; where the arbitration process was left largely under the control of the disputing parties. During the Middle Ages in Europe arbitration was routinely used. Indced within England at the time many of the guilds required arbitration clauses amongst their members. The nature of the business was international in character as merchants would come from outside of England to participate, making the English court system an ineffcctive mechanism for dealing with disputes. The court process could take time which the parties did not favour as many merchants would be travelling and were not within the jurisdiction for long periods of time. Notably, there was no method of enforcing a domestic court decision outside of its jurisdiction. It was during the period over the 1 4 ' ~to 1 6 ' ~Centuries that witnessed large scale codifications establishing arbitration as part of the procedural law of many Europcan countries which opened the way for the modern international and national arbitration law which we know today. (Born 2009, p. 21)

1.3

It was during the 201h Century, however, that saw the establishment of international instruments for governing arbitration. The business community and the legislative and judicial communities worked together enabling a vast range of efforts which were taken, some more successful than others, to regulate and codify arbitration law into a workable, trusted and effective form. The 1889 Montevideo Convention was the first modern treaty including arbitration, then saw the 1889 Hague Convention on the Pacific Settlement of Disputes, the 1907 Hague Convention on the Pacific Settlement of International Disputes. But, it was with the 1923 Geneva Convention which saw the first notable improvement in arbitration law. The International Chambcr of Commerce championed the Gcneva Convention and with it established the basis of international arbitration as it is known today. Subsequently, further legislative measures were undertaken to strengthen the growing recognition and the importance of a strong and effective international arbitration process that culminated in the present system with which this book is concerned.

1 I wish to express my sinccrc thanks to my Research Assistant, Dominique Mystris, for her work

on this submission. 2

Jonathan Black-Branch

92

Sample Clauses for International Arbitration Agreements

I. Standard Clause as Often Used in Arbitration Contracts . . . . . . . . . II. Necessary Elements: Scope. Exclusivity and Designated Dispute Resolution Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ill. Recommended Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1. Appointing Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Place of Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Choice of Substantive Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Number of Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Arbitrators' Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Language.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. Optional Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Amicus Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Arbitral Jurisdiction to Decide Arbitral Jurisdiction . . . . . . . . . . . . . 4. Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Baseball Arbitration Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . h . Complementary Arbitration and Litigation Clause . . . . . . . . . . . . . . 7. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. Costs and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. Currency of Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. Document and Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. Dispositive Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13. Entry of Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14. Expert Referral Clauses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16. Judicial Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17. Limitations Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18. Mediation as a First Step . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19. Negotiation as a First Step . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20. Negotiation and Mediation as Two Steps in a Three-step Clause . . . . . 21. Ofi'sets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22. Presentation of Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23. Punitive Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 . Sole Option Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25. Specifying the Current or Updated Rules . . . . . . . . . . . . . . . . . . . . . 26. Submission Agreements for Existing Disputes . . . . . . . . . . . . . . . . . .

Nicole Conrud/Omer Cilingir/Burbara Baumann

Page 13 13 13 13 14 14 15 15 15 16 16 16 17 17 18 19 19 20 23 23 23 24 25 25 27 27 28 28 29 29 30 30 31 31 32 32

Samule Clauses for International Arbitration Agreements

02

I. Standard Clause as Often Used in Arbitration Contracts

rights and obligations of the parties shall be governed by the substantive laws of [specify]. The number of arbitrators shall be [onelthree]. All arbitrators shall be attorneys [specify qualification]. The language to be used in the arbitral proceedings shall be [specify]. FRIEDLAND 2007, PP. 1 - 5; MCILWRATH/SAVAGE 2010, PP. 413- 415; Swiss Chambers' Court of Arbitration and Mediation. Available at: http://www.scaam.org/sa/en/

II. Necessary Elements: Scope, Exclusivity and Designated Dispute Resolution Method Any dispute, controversy or claim arising out of or in relation to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the [specify rules] as at present in force. The arbitration laws do not make great demands on arbitration clauses. The clause must simply express the parties' intention to arbitrate and can contain a wording as short as: "the parties agree that all disputes and differences between us shall be resolved by arbitration" (BERGER 1992, p. 93). The arbitration agreement must identlfy what disputes are to be referred to arbitration (LEW/MISTELIS/KROLL 2003, p. 168). An arbitration clause referring all future disputes to arbitration without any reference to a specific contractual relationship may be void for uncertainty (LEW/MISTELIS/KROLL 2003, p. 170). A broad wording such as "all", "any dispute" or generally "disputes, controversies or claims" should be used to connect the disputes and the contract. A narrow wording may result in certain disputes falling outside the scope of the arbitration clause. If claims of tort are not classified as arising out of the contract, and are therefore not in the scope of the arbitration agreement, a party may be forced to bring one part of the claim in an arbitration and another part in a state court (LEW/MISTELIS/KROLL 2003, p. 169).

2.1

111. Recommended Elements 1. Appointing Authority

The appointing authority is [specify]. The task of the appointing authority is to ensure that a party cannot block or frustrate the composition of the Tribunal. While some authorities limit their function to the appointment, others also decide on challenges to arbitrators. The observation is more of

Nicole Conrad/Orner Cilingir/Barbara Baumann

2.2

S I ~ NON INTCRNATIONAI. TRADE LAW(UNCITRAL),2006. Settlement of commercial disputes: Revision of the LJNCITRAT. Arbitration Rulcs, Working Group 11 (Arbitration), Forty-sixth session. [online] New York: UNCITRAL. Availahlc at: ihttp://dacccss-dds-ny.un.org/doc/UNDOC/LTD/ V06/5901441PDFiV0659044.pdf?OpenElement~ [Accessed 8 February 20121; UNITED NATIONS COM~ MISSION ON INIEKNATIONAL TRAUL LAW(UNCITRAL). 2006. Report of the Working Group on Arbitration and Conciliation on thc work of its forty-fith session. [online] Vienna: UNCITRAL. Available at: ~http://daccess-dds-ny.un.org/doc/LINDOC/GEN/V06/575/26/Pr)F/VO657S26.pdf?OpenElcment, [Accessed 8 February 20121; ~ J N I T E D NATIONS COMMISSION ON INTCRNATIONAL TRADE LAW (UNCITRAL), 1996. UNCIT'RAL Notcs on Organizing Arbitral Proceedings. [online] Vienna: UNCITRAL. Available at: ihttp:/lwmv.uncitral.orgipdflcnglishitexts/arhitration/arb-notes/arbnotes-e.pdf>[Accessed 7 March 20121; UNI.IFD NAIIONS COMMISSION ON TNT~KNA.I.IUNAL TRAUF LAW (UNCI'TRAL). 1976. UNCI'I'RAL Arhitration Rules. [online] Vienna: UNCI'IRAL. Available at: ~hltp:/lwww.uncitral.org/pdfienglishltcxts/arbitration/arb-Rulcs/ar-Rules.pd€ [Accesscd 16 FebruNATIONS COMMISSION ON ~ N ~ . F R N A T ~ ~ N A TRADE I. L.4w (UNCITRAL), 1958. ary 20121; UNITED Convention on the Recognition and Enforcement of Foreign Arbitral Awards. [online] Vienna: ~http://~w.uncitral.orgipd~lishitexts/arbittionlNY-convl UNCITRAL. Available at: XXII-l_e.pdf>[Accessed 16 February 20121; UNITED NATIONS, 1976. Yearbook. International Trade Law. Chapter IV, pp. 822 - 827. [online] Vienna: UNCITRAL. Available at: .http:l1unyearbook.t1n.org/unyearbook.html?name=1976index.html.[Accesscd 23 March 2(!12]; U N sn ~ I NATIONS, 1966. Yearbook. Developnlent ol International Trade Law. Chapter VI, pp. 917 - 921 [online] Vienna: LJNCITRAL. Available at: ihttp://unyearhook.un.orgiunyearbook.html?name=1966index.html.~ [Accessed 23 Fcbruary 20121.

I. Introduction 1. The United Nations Commission on International Trade Law (UNCITRAL) The Unitcd Nations Commission on Tntcrnational Trade Law (hereinafter called "UNCITRAL") was founded on 17 December 1966. The main goal of the UNCITRAL is the harmonization and unification of international tradc law. This also includes the harmonization and unification of international arbitration (UNITEDNATIONS1966, p. 917). On 28 April 1976, the United Nations Commission approved the UNCITRAL Arbitration Rules, which had been dralted by the Secretariat of the United Nations (UNI.I.ED NATIONS 1976, p. 823). The UNCITRAL Arbitration Rules (hereinafter called "the Rules") are a set of rules for international arbitration. The Rules are optional and only applicable for ad hoc arbitration. The Rules also include a model arbitration clause which can be used in an arbitration agreement if the parties wish t o apply the Rules (UNITED NATIONS 1976, p. 823). Again. the Rules are ad hoe rules that do not bind an institution and are not restricted to a specific legal systcm. Furtherrnorc, it is important to point out that the UNCITRAL i\ not an arbitration institution. nor is it an adminis2011, p. 720). In fact, the trator of arbitration proceedings (PATOCCHI/NIEDERMA~ER Rules arc applicable in different countries with different legal, social and economic systems. Furthermore, the application of the Rules in the settlement of disputes arising within the context of international commercial relations is recommended by the General Assembly because their application contributes to the harmonization of intcrnational economic relations ( U N I I ~NAIIONS D 1976, p. 823). After the first publication of the Rules on 15 December 1976, they were left unchanged for 34 years. Within that time, international arbitration has experienced an extensive evolution. As a result, the UN Commission published the rcvised version of the Rules on 25 June 2010. The main goal of the Commission during the revision process was to keep the "core" and the "character" of universally applicable rules (PATOCCHI/NIEDERMA~~K 201 1,pp. 718 - 719).

Nicole Conrud/Omer Cilingir/Barburu Bu~imunn

3.1

04

Arbilrulion Rules und Country Report.$

I. Introduction 1. National Legislation 4.1

On January 13, 2011, France adopted new laws on arbitration. Even though France's 1981 decree on international arbitration was one of the first modern arbitration laws, the time had come to codify thirty years of case law in order to make French arbitration law more accessible to both foreign and domestic practitioners (Decrees of 14 May 1980 and 12 May 1981).

4.2

The new decree (the "Decree") reformed the provisions of the French Code of Civil Procedure ("the Code" or CCP) in relation to arbitration. The new text is listed in Arts. 1442 through 1527 of the Code, which entered into force on May, 1"' 2011. An English translation of the Decree is available at: ~http:llwww.iaiparis.com/pdf/FRENCH-LAW-ON-ARBITRAT1ON.pdb [Acccsscd 13 August 20121.

4.3

A n overview of the main changes introduced by the Decree shows that the new provisions should improve the efficiency of international arbitration proceedings in France. In particular, it increases the freedom given to international arbitration parties to tailor the proceedings to their specific needs.

4.4

More precisely, the Decree inserts changes and improvements within all the steps of the arbitration process: the arbitration agreement (b), the arbitration proceedings (c), the arbitral award (d), the recognition and enforcement of arbitral awards (e) and recourse against awards (f). Before examining these issues, it seems necessary to focus on a few general points (a). a. General Points

4.5

It is essential to mention that the Decree has maintained the French approach, which distinguishes between domestic and international arbitration (the definition of international arbitration, now under Art. 1504 CCP, remains unchanged: an arhitration where international trade interests are at stake). The writers have chosen to follow the system adopted by the 1981 decree by which the provisions dedicated to international arbitration refer explicitly to the specific provisions of domestic arbitration that are applicable in the context of an international arbitration (Art. 1506 CCP). As previously provided by the 1981 decree, the new text allows a more flexible regime for international arbitration.

4.6

Furthermore, under the new law, parties to an international arbitration may rcqucst assistance from French state courts in a number of cases. In addition to the two sources of jurisdiction already provided by the 1981 decree - when the arbitration takes place in France or when the parties have agreed that the arbitration shall be governed by French procedural law -, Art. 1505 CCP has added two situations: where the parties have expressly appointed French courts as the supporting court with respect to disputes pertaining to the arbitral procedure, or one of the parties is exposed to a risk of denial of justicc cvcn when the case at hand has no connection with France (this last sentence codifies the recognition of this original ground by a decision of the Cour de cassation in the NIOC case: French Cour de cassation, Feb. lst, 2005, State of Israel v. NIOC, 2005, Revue de I'arbitrage, 693).

4.7

It should be noted that, where French courts have jurisdiction, if a difficulty arise before or at the time of the constitution of the Arbilral Tribunal, the parties may request the assistance of the President of the Tribunal de grande instance de Paris (Paris First

Sophie Lemnire/Arnaud Raynouard

§

6

Austria

I.lntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1. National Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a. Arbitrability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b . Arbitration Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c. Arbitral Tribunal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d . Conduct of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e . Interim or Protective Measures . . . . . . . . . . . . . . . . . . . . . . . . . . f . Challenge of the Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g. RecognitionlEnforcement of Foreign Awards . . . . . . . . . . . . . . . . 2 . Arbitration Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Currcnt Status of the Law of Arbitration . . . . . . . . . . . . . . . . . . . . . I1. Model Clause of the VIAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ill. Arbitration Check List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1. Institutional Rules or Ad Hoc Arbitration? . . . . . . . . . . . . . . . . . . . . 2. Date of Commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . Number of Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Timing of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . Neutrality and Qualifications of the Arbitrators (Technical Know-how) 7. Scat of the Tribunal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Language of the Arbitration Procedure . . . . . . . . . . . . . . . . . . . . . . . 9. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. Provisional Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. Existing Disputes Rcyond the Agreement and Arbitrability? . . . . . . . 13. Are there Cultural Factors to Respect by the Counsels and Arbitrators? 14. Existing Procedural Rules in Absence of the Agreement? . . . . . . . . . 15.Discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16. Expert Evidence Needed? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17. Court Procedurc under the New York Convention? . . . . . . . . . . . . . . 18. Must the Award State the Reasons upon Which It Is Based? . . . . . . .

19. Time Limit for the Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20. Attorney's Fees and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 . Must the Tribunal Fix and Apportion the Costs of Arbitration in the FinalAward? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22. Limitation on Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23. FinalityiAppeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Christoph Stippl/Marguerita Sedrati-Muller

Page 237 237 238 238 239 240 240 240 241 241 243 244 245 245 245 245 245 245 246 246 246 247 247 248 248 248 249 249 249 250 250 250 250

Rendering of the Award in Multipartite Arbitrations - How to Overcome Lack of Unanimity. In: C'. Klausegger et al., eds. 2008. Austrian Arbitration Yearhook. Vienna: man^; STIPPL, C. and PICKL, G., 2009. Limiting Costs in Arbitration. In: C. Klausegger, et al., eds. 2009. Austrian Arbitration Yearbook. Vienna: Manz, pp. 213-23h; STIPPL, C. and STPINHOFFR, S., 201 1. Kein Verhraucherschutz fiir Gesellschaftcr im Schiedsrecht. ecolex, 2011, pp. 816-819; THELINE, U., 2006. In: R.A. Schiitze, ed. 2006. Cologne: C. Heymanns; TORGGLER, H., 2007. Praxishandbr*ch Schiedsgerichtsbarkeit. Vienna: Verlag Osterrcich; TRIEBEL, V., and HIINTER,M.. 2006. In: R.A. Schiitze, ed. 2006. Cologne: C. Heymanns; TRITTMAN, R. and Drrvt, C., 2002. In: F.B. Weigand. ed. 2002. Practitioner',~Handbook on International Arhitration. Munich: C.H. Beck Verlag; VONSAUCKEN, A,, 2004. Die Reform des usterreichischen Schiedsverfuhrensrechtes auf der Basis des UNCITRAL Modellgesetzes iiber die Internationale Handelsschiedsgerichtsbarkeit. Frankfurt et al.: Verlag Peter 1,ang; V(.ELOUCH, P., 2007. Interim and Protective Measures. In: C. Klausegger, el al., eds. 2007. Vienna: Manz; WEIGAND, F.B., ed. 2002. Pructitioner'.~Handbook on lnfernafional Arbitration. Munich: C.H. Beck Verlag; WEIMMANN, G., 2004. Drei Fragen zur Reform der Schiedsgerichtsbarkeit - Schiedsrichterqualifikation, Giiltigkcit dcs Schiedsverlrages, Schiedsrichlerhaftung. In: C. Fischer-Czermak, A. Kleteck, and S. Schaucr, eds. 2004. Festschrift Welser. Vienna: Manz; WILHELM, G., 2005. Der schmale Grat zum Schiedsgericht. ecolex, 2005, p. 89; WUSI,EMANN, T. and JERMINI, D., 2005. In.: T. Zuherhiihlcr, C. Miiller and P. Habcggcr, eds. 2005. Swiss Rules oI International Arbitration. Zurich: Schulthess; ZEILER, G., 2006a. Schiedsverfahren §§577-618 ZPO idF des SchiedsRAG 2006. ViennaIGraz: NWV; ZEILER,G., 2006b. Erstmals einstweilige MaUnahmen im Schiedsverfahren? Schied,sVZ, 2006, pp. 79-85; ZEILER, G., 2006c. Schiedsverfahren neu. Zeitschriftfiir Recht und Kechnungswesen (RWZ), 2006. p. 133; ZEILER, G., 2012. In: C. Liebscher, P. Oberhammer and W.H. Rechberger, eds. 2012. Schiedsverfahrensrecht Band I. Vienna: Springer; ZEILER,G. and STEINDL, B., 2007. Arhitrafion in Austria. 2nd ed. ViennalGraz: NWV; Z R I PIC, I G. and STEINOI., B., 2007. The new Austrian arbitration law. 2nd ed. Vienna: NWV; ZUBERBUHLER, T. MULLER,C. and HABEGGER, P., eds. 2005. Swiss Rules of International Arbitration. Zurich: Schulthess. Internet-Sources: ANJOMSHOAA, P., 2007. Costs awards in international arbitration and the use of

"sealed offers" to limit liability for costs. International Arbitration Law Review 2 (2007) [online]. Available at: ~http:/lwww.whitecase.comifileslPublication/c7~3eda4-360d-46b7-~0Y-ab4bllal4597/ Presentation/PuhlicationAttachmenti80458ad9-ac22-4hea-9h64-b139dhee156f/Art.%20CostAwards~ IntlARhit.pd6 [Accessed 14 August 20121; TCC COUMISSI~N ON ARBITRA-TION, 201 1. Techniques for Managing Electronic Document Production When it is Permitted or Required in International Arbrfrarion. ICC Dispute Resolution Library. [online] Available at: ~http:l/www.iccdrl.com/CODE/LevelThree.asp?tocxml=ltoc~CommReporlsAll.xml&page=Commission~20Reports&Ll =Commission %20Rcports&L2=&tocxsl=DoubleToc.xsl&contentxsl=arhSinge.xsl&Locator=9&contentxml=CR_ 0043.xml>[Accessed 24 April 20121; RIECHER, S., 2011. Streitbare Chinesen als Goldgrube. Dle Presse [online]. Available at: ~http://diepresse.com/home/wirtschaft/economis631073/Streitbare-Chinesenals-Goldgrube, [Accessed 7 May 20121.

I. Introduction 1. National Legislation

On 1 July 2006, Austria's new arbitration legislation came into force (KONRAD 2012, 6.1 p. 34). The Austrian Arbitration Law Reform Act 2006 (AA 2006) closely follows the UNCITRAL Model Law on International Arbitration (ZEILER2006a, p. 22; HAUSMANINGER 2007, Pre-5s 577 ff. recital 16), thus making Austria a 'model law country' and thereby further improving Austria's traditional position as an arbitration-friendly jurisdiction. Most provisions are not mandatory, providing for maximum party autonomy (ZEILER 2006a, pp. 197 - 198).

Christoph Sfippl/Marguerrta Sedrati-Miiller

§6

Arbitration Rules and Country Rel?or/s

6.2

The arbitration provisions of the AA 2006 are listed in the Austrian Code of Civil Procedure (ACCP; Sections 577 to 618) and are structured on the UNCITRAL Model Law (in 10 titles, which correspond to the first eight chapters of the UNCITRAL Model Law, complemented by a Title 9 on court proceedings and a Title 10 containing special 2006a, p. 22). The AA 2006 applies to all arbitration proceedings provisions) (ZEILER which commenced on or after 1 July 2006. Arbitration agreements concluded prior to 1July 2006 remain governed by the provisions previously in force (KONRAD 2012, p. 36).

6.3

The UNCITKAL Model Law applies to international commercial arbitrations only. In contrast, thc AA 2006 providcs for a uniform arbitration law: it applies to both domestic and international arbitrations as well as to commercial and non-commercial arbitrations. However, therc arc special provisions Tor consumer disputes and for labor law matters; these provisions severely limit the possibility of conducting arbitrations in these two areas ol dispute (STIPPL 2012; ~ I P Y L / S T E ~ N H2011; OFER KONRAD , 2012, pp. 36 - 37).

6.4

Court intervention in arbitration matters is strictly limited to those instances expressly mentioned in the AA 2006. Actions before an Austrian court to determine admissibility of arbitration proceedings are not permitted (KONRAD 2012, pp. 61 - 62). a. Arbitrability

6.5

Any pecuniary claim is arbitrable under the AA 2006; non-pecuniary claims are arbitrable if the parties are entitled to conclude a settlement on the matter in dispute. In both cases it is required that the claims, in the absence of an arbitration agreement, would fall within the jurisdiction of the courts of law. Corporate law disputes are 2007, therefore arbitrable in principle (KOLLER 2012, pp. 146 - 166; HA~JSMANINGER $582 recitals 30ff.). Claims to be decided by administrative authorities are not arbitrable.

6.6

Family law matters and disputes relating to tenancy, non-profit housing and condominium property are generally not arbitrable (Kor I FR 2012, pp. 166 - 169; HAUSMANINGFR, 2007, 5 582 recitals 49ff.). Most labor law matters and consumer disputes can be made the subject of an arbitration agreement only after the dispute has arisen; certain (collective) labor and social law matters are precludcd cntircly from arbitration. b. Arbitration Agreement

6.7

The AA 2006 requires a 'written' form for a valid arbitration agreement (HAUSMANINGFR 2007, 5 583 recitals 47ff.). This applies regardless of whether there is an Austrian place of arbitration; as concerns foreign awards (i.e., place of arbitration outside Austria), it is sufficient that the arbitration agreement satisfies the form rcquirements of the law applicable to the arbitration agreement in question. Specifically, arbitration agreements can be madc cithcr (i) by mcans of a written document signed by the parties or (ii) through the exchange of letters, faxes, e-mails and other means of telecommuniK p. 227). cation which provide a record of the agreement ( K O L L ~2012,

6.8

The law gives no guidance as to whether exchanged letters and faxes need to be signed; however, thcrc are strong arguments that this is not the case (KOLLER 2012, p. 229). Emails are also valid without safe electronic signatures (see discussion in ABURUMIEH/ KOLLERIPOLTNER. 2006; FREMUTH-WOLF 2007, $ 583 recital24). The reference in a contract which satisfies the formal requirements of an arbitration agreement to a document containing an arbitration agreement - general terms and conditions in particular constitutes an arbitration agreement, provided that the reference is such as -

238

Christoph Slipyl/Marguerita Sedrati-Mulhr

China

§7

China

Page 308 I.lntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 1. National Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309 2. Arbitration Commissions/Institutions in the PRC . . . . . . . . . . . . . . . 311 3. Current Status of the Law of Arbitration . . . . . . . . . . . . . . . . . . . . . 312 II. Model Clause (CIETAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 Ill. Arbitration Check List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 1. Institutional or Ad Hoc Arbitration'! . . . . . . . . . . . . . . . . . . . . . . . . 315 2. Date of Commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 3. Law Governing the Arbitration Agrccmcnt . . . . . . . . . . . . . . . . . . . 315 4. Applicable Substantive Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 5. Number of Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 6. Timing of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 7. Neutrality and Qualifications of the Arbitrators (Technical Know-how) 317 8. Seat (Place) of the Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 9. Place (Venue) of Oral Hearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 10. Language of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 11. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 12. Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 13. Interim Rclicf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 14. Time Limit for the Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 15. Attorney's Fccs and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16. Must the Tribunal Fix and Apportion thc Costs of Arbitration in the FinalAward? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17. Limitation on Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18. Finalityl Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19. Confirmation or Entry of Judgment Clause . . . . . . . . . . . . . . . . . . . . 20. Foreign Sovereign Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. Samples for Model and Standard Forms (CIETAC) . . . . . . . . . . . . . . 1. Request for Arbitration (and Statement of Claim) . . . . . . . . . . . . . . . 2. Statement of Defence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Challenge ol an Arbitrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Letter to CIETAC NominatinglAppointing an Arbitrator(s) . . . . . . . 6. Arbitrator's Declaration of Acceptance and Statement of Indcpcndence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. Agenda for First Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Terms of Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. List of Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subine Slricker-Kellerer/Peter Yuen

§

7

§7

Arbitraliorl Rules und Country Reports

10. Letter for the Appointment of a Secretary . . . . . . . . . . . . . . . . . . . . 11. Order for Limiting Written Pleadings. . . . . . . . . . . . . . . . . . . . . . . . 12. Letter of Application to Tribunal for Various Orders. . . . . . . . . . . . . 13. Discovery/Disclosure in CIETAC Arbitrations . . . . . . . . . . . . . . . . . 14. Order Governing Treatment of Foreign Languages and Translations . 15. Declaration by Expert. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16. Consent Award. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17. Rcqucst for Correction of the Award . . . . . . . . . . . . . . . . . . . . . . . . 18. Orders for Security for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19. Sealed Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V. Nice to Know . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

334 334 335 336 337 338 339 342 343 343 343

Bibliography: Asrlro~n,P., 2009. Handbook on International Commercial Arbitration. New York: JurisNet LLC; Black, A,, 2011. Law and Legal Institutions of Asia: Traditions. Adaptations and J., 2011. The International ArbitruInnovations. Cambridgc: Cambridge University Press. CAKTEK, tion Review. 2nded., London: Law Business Research L t d . ; C ~ o o ~J.c and , MOSER, M. J., 2011. Asia K. and WEERAMANTRY, J. R. Arbitration Ilandbook. Oxford: Oxford University Press; GREENBERG, 2011. lnternational Commercial Arbitration: A n Asia-Pacific Perspective. Cambridgc: Cambridgc University Press; LEUNG,R., 2011. China Arbitration Handbook, London: Sweet & Maxwell; MOSEK,M. J., 2011, Brtsiness Disputes in China. 31d ed. New York: Juris Publishing Inc.; MOFR M. J., 2007. Managing Bu.sine.s.s Disputes in Today's China: Duelling with Dragons. The Hague/ LondonINew York: Kluwer Law International. TAO,J., Arbitration Law and Practice in China 2008. znded. Alphen aan den Rijn: Kluwer Law International; WEIGAND, F. B., 2009. Practitioners Handbook on International Commercial Arbitration. 2"" ed. Oxford: Oxford University Press.

I. Introduction 1. National Legislation 7.1

Commercial arbitration in the People's Republic of China (PRC) is governed by the P R C Civil Procedure Law of 1991 (as revised in 2007; effective in 2008), and the PRC Arbitration L a w which came into force in 1995 (the PRCArbitration Law).

7.2

In addition, the Supreme People's Court (SPC) occasionally issues various "Opinions", "Interpretations" and "Notices" (and other such documents) covering a wide range of issues, including commercial arbitration and the enforcement of arbitral awards. Most are binding on the subordinate lower courts, others are highly persuasive and are likely to be followed by the courts; however, Chinese arbitration commissions and Tribunals are not directly bound by them, but will often use them as a reference.

7.3

The Interpretation of the Supreme People's Court on Certain Issues Relating to the Application of the Arbitration Law of the People's Republic of China (the Interpretation), which came into effect in 2006, is one such example, and it provides further clarification on a number of issues, for example, the requirements for a valid arbitration agreement, challenges to the validity of arbitration agreements and the procedures for enforcing an arbitral award.

7.4

PRC arbitration law makes a clear distinction between "domestic" arbitration and "foreign-related" (or international) arbitration. This split follows to some extent the bifurcated regime under the LJNCITRAL Model Law which splits arbitrations into

Sabine Stricker-Kellerer/Peter Yuen

28. Request for Correction and Interpretation of the Award (Art. 38 DIAC Arbitration Rules) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

403

29. Costs Capping Order [Arts. 2 (1) and 5 DIAC Arbitration Rules Appendix - Cost of Arbitration]. . . . . . . . . . . . . . . . . . . . . . . . . . . .

404

30. Orders for Security of Costs [Art. 31 ( I ) DIAC Arbitration Rules and Art. 4 (1) Appendix - Cost of Arbitration] . . . . . . . . . . . . . . . . . . . .

404

31. Sealed Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

405

V. Nice to Know . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

406

Bibliography: ASHFORD, P., 2009. Handbook on lnternafional Commercial Arbitration. New York: JurisNet, LLC: LIBORIO, V., 2009. Dubai Inlernalional Arfjitrafion Cenlre (DIAC). In: P . Gola, C. Gotz Staehelin and K. Graf, eds. 2009. Institutional Arbitration, Tasks, and Powers of Different Arbitration Institutions. Munich: sellier. european law publishers:

Dubai International Arbitration Centre website. [online] Available at: [Accessed 28 February 20121: Global Arbitration Review, United Arab Emirates reference page. [online] Available at: ihttp://www.globalarbitrationreview.comireference/ topics/6l/jurisdictions/33/united-arab-eniirates/ [Accessed 28 February 20121; International Bar Association Rules on the Taking of Evidence in International Arbitration, 29 May 2010. [online] Available at: ~http:i/www.ibanet.org/Publications/publications-IBA~guides_and_freematerials.aspx#takingevidetak>[Accessed 10 August 20121; linitcd Nations Commission on International Trade Law ("UNCITRAL") website. [online] Available at: [Accessed 28 February 20121. Internet Sources:

I. Introduction 1. National Legislation

There is currently no formal legislation within the United Arab Emirates ("UAE") regarding arbitration. Therefore, arbitrat~onis governed by the IJAE Civil Procedure Code Fedcral Law No. (11) of 1992. The relevant sections of the code are:

8.1

Chapter (111) Arbitration - Arts. 203 - 218 ([online] available at: ). 2. Arbitration Institutions in Dubai

There are two arbitral institutions in Dubai: The Dubai International Arbitration Centre ("DIAC") and the Dubai International Financial CentreILCIA Centre ("DIFC LCTA"). The following addresses only the DIAC.

8.2

The DIAC, created in 1994 as the "Centre for Commercial Conciliation and Arbitration," is an autonomous, pcrmanent, non-profit institution. The DIAC is located at the Dubai Chamber of Commerce and Industry, and its primary aim is to providc services for the settlement o l national and international commercial disputes through conciliation, arbitration and other alternative dispute resolution methods in accordance with the rules and by-laws issued under the provisions of the DIAC's Statute or the rules agreed upon between the parties to the dispute.

8.3

Vanessa A. Lihorio Garrido de Sousa

England & Wales

99

ARBITRATION RIII.PS. [onlinc] Available at: ihtlp:/lwww.lcia.org/DispulcCReso1utionnServices/ LCIA-Arbitration-Rules.aspx> [Accessed 22 August 20121; LCIA SCHED~JLE OF COSTS.[online] Available at: ~http://www.lcia.orgir)isput~~Resolution-Services/I,CIA~Arhitration-Costs.aspx~ [Accessed 22 August 20121; THFLONDON MARITIME ARBITRATORS ASSOCIATION website. [online] [Accessed 22 August 20121; HE CHARTERED INSTI~.UTE OF Available at: ~http:llwww.lmaa.org.uk~ ARBITKAIORS website. [online] Available at: ~http:/lwww.ciarb.org>[Accessed 22 August 20121; THE FOR EFFECTIVE DISPUT~. RFSOLUI.ION website. [online] Available at: ~http://www.cedr.com/, CENTRE [Accessed 22 August 20121; GAFTA website. [online] Available at: ~http:llwww.gafta.com~[Accessed 22 August 20121; THEF E D ~ R A ~OFOOILS, N S ~ E UAND S F M S AS~OC.IA.I.IONS (FOSFA) wcbsitc. [Accessed 22 August 20121. [online] Available at: ~http://www.fosfa.org~

I. Introduction 1 . National Legislation a. General Comments

The primary legislation in force governing arbitration in England and Wales is the Arbitration Act 1996 (1996 Act) which came into force on 31 January 1997, with the purpose of reforming the previous Arbitration Acts which had been enacted since 1889. The 1996 Act saw a morc independent, private and confidential system in which the courts' powers of intervention were reduced to only those situations when fairness or public interest dictated. The principles of the 1996 Act are summed up in s. I as fair resolution by an impartial Tribunal, with no unnecessary delay or expense, the parties involved should have autonomy to determine the conduct of the arbitration, and the court should have minimal levels of intervention.

9.1

The structure of the 1996 Act has been separated into four parts; Part I encompasses 9.2 arbitration pursuant to arbitration agreements; Part I1 governs domestic arbitration agreements; Part 111 is concerned with foreign awards recognition and enforcement; and, Part IV contains general provisions. Thc majority of the provisions of the Act are not mandatory, in the sense that they are capable of being waived by agreement of the parties, based on their mutual consent. Somc provisions, however, are mandatory. These mandatory provisions arc listed in Schedule 1 to the Act, and include, inter alia, the provisions on the immunity of the Tribunal and of the institutions, the challenging of awards for lack of jurisdiction and serious irregularity. From a practical point of view, when the parties to an arbitration seated in England agree to use the rules of arbitration of an arbitral institution (such as the ICC or the LCIA), the parties are deemed to have waived those non-mandatory provisions of the act that differ from the institutional rules. The 1996 Act refers to the seat of arbitration, which is meant as the juridical seat of the arbitration, and this can be located independent of the location of the hearings and award's determination [ss. 53 and 34 (2) (a) 1996 Act]. Part I of the 1996 Act is only applicable when England or Wales is the seat of the arbitration. Yct cvcn where the seat is neither of those, ss. 9 - 11 and 66 will be applied in cases where the seat is not already determined or designated [s. 2 (2) 1996 Act].

9.3

While thc 1996 Act reduces the level of intervention by the English courts, it by no means restricts it completely. The Court has bccn granted certain powers of intervention; it can support the arbitration process using Part 1 powers if no seat was previously designated or if there is a connection to England or Wales which the Court considers

9.4

Jonathan Black-Branch

1 10

Arbrtration

rule,^

and Guntrv I[Accessed 8 July 20121; STRANGE, T., 1830. Hindu Law: Principally with Reference to Such Portions of it as Concern the Administration of Justice, in the King's Courts, in India. Vol. 2 [c-book]. Available through: Harvard Collegc Library