International Court of Arbitration

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1 ICA International Court of Arbitration

• the ICC International Court of Arbitration was established in 1923

• promotes the use of arbitration procedures in commercial disputes

• oversees all elements of arbitration process:

  • maintains lists of prospective arbitrators

  • confirms appointment of arbitrators

  • makes decisions about challenges to arbitrators

  • approves arbitrators’ awards

  • fixes arbitrators’ fees

  • the ICC Court administers cases and scrutinises awards; it does not decide the parties’ dispute itself

2 UNCITRAL Arbitration

• involves the settlement of a disputed contract by an independent third party, the arbitrator, or arbiter

• often involves compromise

• the two disputing parties may or may not be legally represented

• negotiation, mediation and conciliation are non-binding ADR processes; litigation gives a binding court judgment and arbitration gives a binding award

• an award is final and binding; it may be challenged or set aside only on narrow grounds, not by an appeal on the merits

• advantages

  • cost

    • no court costs

    • no costs of legal representatives

  • speed

    • generally much quicker decision than taking the dispute to court

    • flexibility of the process generally leads to quicker decisions

  • privacy

    • court proceedings are a matter of public record

    • arbitration is a private, unpublicised matter

  • informality

    • court proceedings can be extremely stressful

    • the informality of the arbitration process is much less stressful

  • expertise

    • the arbitrator should be an acknowledged expert in contract law area under dispute

    • a judge is an expert in law with possibly no experience in the disputed matter

  • decisions

    • because arbitration is not bound by precedent, decisions of an arbitrator are likely to be more innovative

3 UNCITRAL – arbitration

• the requirement of qualifications for an arbitrator should be established within the arbitration agreement

• if no qualification requirement has been agreed, then anyone may be selected

• no one should be prevented from serving as an arbitrator on the grounds of their nationality alone

• an arbitrator should be independent and unbiased

• any nominated arbitrator should disclose any relevant facts which may be seen to impair their independence

• similarly, if it becomes the case that independence is threatened, an arbitrator should disclose the circumstances

• if it becomes impossible for an appointed arbitrator to continue to act, they should withdraw from the position, or

  • both parties may agree that the appointment should be terminated, or

  • either party may challenge the arbitrator concerning independence

4 UNCITRAL – arbitration

• for a dispute to be submitted to arbitration, under the UN’s Model Law on International Commercial Arbitration the agreement to turn to arbitration must be in writing

• there should therefore by an “arbitration clause” agreement

• to qualify as “being in writing” one of the following requirements should be appropriate

• it should be contained in:

  • a document, signed by both parties

  • an exchange of documents clearly referring to such an agreement / clause

  • an exchange of documents of a legal nature clearly referring to such an agreement / clause

  • another written contract between the parties referring to the arbitration agreement / clause

• the arbitration tribunal

  • if the parties have agreed to have a sole arbitrator, the two parties should agree on that person’s identity

  • if the parties cannot agree, they will need to refer the matter to a nominated court or tribunal for them to decide the identity of the arbitrator

  • if the parties have not agreed on a sole arbitrator, the Model Law states that there should be three arbitrators

    • one chosen by each of the two disputing parties, and

    • one chosen by the two arbitrators

5 UNCITRAL – arbitration

• disadvantages

  • privacy!

    • one party in the dispute may actually want the publicity

  • application of the law

    • independent arbitrators do not necessarily have expertise in the interpretation and application of the law, whereas

    • judges in courts are experts in this field

  • predictability

    • arbitrators are not bound by precedent so may be inconsistent when compared with decisions in similar disputes, whereas

    • judges are bound to follow the principles of precedent so dispute resolution may be seen as predictable

  • precedent

    • resolution under arbitration creates no precedent so future similar dispute resolution could differ from the earlier arbitration decision, whereas

    • where a dispute lies beyond the scope of established precedent, a court decision could be seen to create a new precedent upon which later similar dispute resolution will be based

6 UNCITRAL – arbitration – application to have an arbitration award set aside / cancelled

• incapacity

  • occurs when one party in the dispute is suffering under an incapacity when the tribunal hearing took place

• notice

  • occurs when insufficient notice has been given of either

    • the appointment of an arbitrator, or

    • the date of the proceedings

• invalidity of the agreement

  • if the tribunal decision is invalid under the law governing the dispute contract

• public policy

  • where a decision from a tribunal is claimed to be against the public policy of the claimant’s state

• subject matter

  • tribunals are restricted to making awards only on matters included within the agreement to seek arbitration

• composition of the panel of arbitrators

  • if the proper requirements of panel selection have not been followed (normally three arbitrators)

7 UNIDROIT – International Institute for the Unification of Private Law

• independent inter-governmental organisation

• studies the need for and how to modernise, harmonise, standardise and co-ordinate private law in an international context

• of particular concern is international trade law

• three tier structure

  • secretariat

    • responsible for day-to-day running

  • governing council

    • supervises policy

    • draws up a work programme

    • supervises how the secretariat carry out the program

  • general assembly

    • the ultimate decision making body

    • approves the budget

    • approves the work programme

    • elects the governing council