Workbook - 2014

Workbook: Introduction to International Arbitration
T + 44 (0)20 7421 7439
F + 44 (0)20 7404 4023
12 Bloomsbury Square, London, WC1A 2LP, UK
E education@ciarb.org
W www.ciarb.org
Registered Charity: 803725
The Chartered Institute of Arbitrators
Chartered Institute of Arbitrators
Workbook:
Introduction
to International
Arbitration
Introduction to
International Arbitration
Dr Emilia Onyema FCIArb, 2008

Louise Barrington FCIArb, 2012
Jason A. Crook MCIArb, 2014
Chartered Institute of Arbitrators 2014

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means including storage in any
retrieval system of any medium whether transiently or not without the prior written permission of the copyright owner, except for permitted
fair dealing under the provisions of the Copyright, Designs and Patents Act 1988, or in accordance with the terms of a licence issued by
the Copyright Licensing Agency in respect of photocopying and/or reprographic reproduction.
Applications for the copyright owners written permission to reproduce any part of this publication should be addressed to the
Chartered Institute of Arbitrators, 12 Bloomsbury Square, London, WC1A 2LP.
Any Crown copyright material is reproduced with the permission of the Controller of Her Majestys Stationery Office.

Introduction
Introduction
This core workbook has been prepared for candidates
registered on CIArbs Introduction to International
Arbitration course. The workbook does not provide all
the answers. It provides the basic fundamental concepts
of international arbitration. Candidates are expected to
supplement the Workbook with other materials from
the Reading List.
What is the aim of the course?
To provide an understanding of the general principles
of international (i.e. non-domestic) arbitration and its
relationship to other dispute resolution processes. The
course will provide candidates with an introduction to
the legal framework of, and good practice and
procedure in, international arbitration in their jurisdiction.
What are the learning outcomes?
On successful completion of this course candidates
will be able to:
n Understand the background to international
arbitration;
n Describe the process and procedure of
international arbitration;
n Understand international arbitration in the context
of other forms of dispute resolution.
What is covered within the syllabus?
n Comparison of dispute resolution procedures;
n Fundamental principles of the international
arbitration process;
n The arbitration agreement;

n Commencement of the arbitration;
n An arbitrators jurisdiction and powers;
n The arbitration process: obligations of the tribunal,
responsibilities and obligations of the parties;
n Managing the arbitration process:
communications, preliminary meeting,
interlocutory matters, dealing with factual and
opinion evidence and disclosure of documents
including introduction to the IBA Guidelines;
n Presenting the claim and the defence: alternative
methods;
n Procedure at a typical hearing, including
contrasting common and civil law jurisdictions;
n Costs and interest: alternative approaches in
different jurisdictions;
n Essentials of an enforceable award.
How will I be assessed?
Assessment consists of one assignment that is
distributed to candidates on the day of the course.
Candidates will be given 28 days to complete and
submit the assignment. The result is a pass or fail
based on understanding and knowledge. Results are
dispatched to candidates normally eight to twelve weeks
from the date of the submission of the assignment.
n The UNCITRAL Model Law and Arbitration Rules;

n Arbitration rules: time-limited, institutional, industry
standards, industry schemes and ad hoc
agreements;
n Arbitration procedures: documents only and oral
hearings;
n The legal framework: the importance of the seat,
the New York Convention, procedural laws, and
procedural rules;

Reading list
Reading List
We recommend that candidates read around the
subject, increasing their knowledge and understanding
to help prepare for the course and associated
assessments. The below reading list has been
provided to support candidate learning and has been
split into three categories:
1. Core workbook
This is the CIArb workbook. Candidates will be provided
with an electronic copy approximately 2 weeks before
the course start date by email and a hard copy on the
day of the course.
2. Essential reading
The book listed is strongly recommended for candidates
to read to ensure a deeper understanding of the subject.
3. Supplementary reading
This book is recommended for candidates to read if
they wish to extend their knowledge in the area of
alternative dispute resolution.
CIArb Branches are encouraged to use the below books
and where relevant make amendments to suit their
jurisdiction. Any such amendments must be approved
by CIArbs Education and Membership Committee.
CORE WORKBOOK
n Introduction to International Commercial
Arbitration, (2014)
ESSENTIAL READING
n No recommendation
SUPPLEMENTARY READING
n Jason A. Crook and Julio Cesar Betancourt (ed)
What is Alternative Dispute Resolution (ADR)?
CIArb (2010) ISBN 978 0951737224
n Susan Blake, Julie Browne, and Stuart Sime
A Practical Approach to Alternative Dispute
Resolution 2nd edn (2012) OUP ISBN 978
0199644988

Table of Contents
Table of Contents
Chapter 1
Fundamental Principles of the International
Arbitration Process
Chapter 3
Composition of the Arbitral Tribunal
Introduction ....................................................
13
Introduction ....................................................
Appointment Procedures ................................
13
Arbitration and Litigation ................................
One or Three? ..........................................
13
Competence and Expertise of the

Decision-Maker ........................................
Multi-party Arbitrations ..............................
13
The Appointing Authority ..........................
13
Privacy/Confidentiality ..............................
Appointment Methods ....................................
14
Enforceability ............................................
Direct ........................................................
14
Speed and Finality ....................................
List Procedure ..........................................
14
Neutral Forum ..........................................
Default and Institutional Appointments ......
14
Procedure ................................................
Cost..........................................................
Required Qualities and Qualifications of

Arbitrators ......................................................
14
Special Powers ........................................
Special Background or Expertise ..............
14
Representation..........................................
Agreed Qualifications ................................
14
Key Choices....................................................
Nationality ................................................
15
Ad hoc Arbitration ....................................
Challenge and Replacement ..........................
15
Institutional, or Supervised, Arbitration ......
Reasons for Challenge ..............................
15
The Seat of Arbitration ..............................
Procedure for Challenge............................
15
Questions........................................................
Disclosure Requirements ..........................
16
Other Grounds for Terminating

Arbitrator's Mandate ................................
16
Procedure for Replacement ......................
16
Possible Repetition of Hearings ................
16
Questions........................................................
16
Chapter 2
Laws & Rules of International Arbitration
Introduction ....................................................
Laws ..............................................................
The Model Law ........................................
Law of the Place of Arbitration (lex arbitri)..
The New York Convention ........................
10
Rules ..............................................................
10
UNCITRAL Rules ......................................
10
Institutional Rules ......................................
11
Soft Laws........................................................
11
UNCITRAL Notes......................................
11
Codes of Ethics ........................................
11
IBA Conflict Guidelines..............................
11
IBA Rules of Taking Evidence ....................
12
Questions........................................................
12

Table of Contents
Chapter 4
Powers and Jurisdiction of the Arbitral Tribunal
23
23
Introduction ....................................................
17
Timeliness of the Amendment or

Supplement ..............................................
Sources of Powers and Jurisdictions ..............
17
Prejudice and Other Considerations ..........
23
The Arbitration Agreement ........................
17
Possible Imposition of Costs ....................
23
Further Written Statements ............................
24
24
National Laws and Treaties or

Conventions..............................................
17
Stay of Court Proceedings ..............................
17
Requiring or Allowing Further

Submissions ............................................
Request for Stay or Dismissal ..................
17
Fixing Time Limits for Submissions ..........
24
Conditions of Stay or Denial of Jurisdiction
17
Questions........................................................
24
Continuation of Arbitral Proceedings ........
18
Determination of Own Jurisdiction ..................
18
Chapter 6
Organising the Proceedings
Objections to Jurisdiction..........................
18
Introduction ....................................................
25
Ultimate Control by National Courts ..........
18
Possible Procedural Points..............................
25
Powers of the Tribunal during Arbitral ..............

Proceedings....................................................
19
19
Deposits for Costs ....................................
25
The Language of Proceedings ..................
26
Power to Conduct Proceedings ................
19
Place of Arbitration....................................
26
Power to Order Interim Measures..............
19
Administrative Services ............................
26
Power to Make Final Award ......................
20
Communications ......................................
26
Limitations to Arbitral Powers..........................
20
Appointment of Expert Witnesses ............
26
Equal Treatment of the Parties ..................
20
Preparation for Hearing ............................
26
Opportunity to Present its Case ................
20
Assistance and Control by National Courts ....
20
Interim Measures of Protection and

Securities for Costs ..................................
27
Assistance in Composing the Arbitral

Tribunal ....................................................
20
Default Proceedings and Multi-Party

Arbitration ................................................
27
Question ........................................................
27
Control of Jurisdiction and Procedural

Compliance ..............................................
20
Recognition and Enforcement of

Awards ....................................................
21
Questions........................................................
21
Chapter 5
Statement of Claim and DefencePleadings
Introduction ....................................................
22
Function and Content of the Statement of

Claim ..............................................................
22
Chapter 7
Hearings
Introduction ....................................................
28
Logistical Matters ............................................
28
Procedures at the Hearing ..............................
28
Sequence of Oral Argument and Taking

of Evidence ..............................................
28
Testimony of Witnesses ............................
29
Expert Witnesses ......................................
29
Comparison with the Notice of Arbitration
22
Defining the Claim and Issues ..................
22
Presentation of New Arguments or

Evidence ..................................................
29
Documentation and Offers of Evidence ....
22
Default of a Party ......................................
29
Amendments to the Claim or Defence ............
Multi-Party Arbitration ..............................
29
Defence ..........................................................
23
Fundamental Requirements of Justice ............
30
Response to Claim....................................
23
Questions........................................................
30
Set-off or Counterclaim ............................
23

Table of Contents
Chapter 8
Costs and Interest
Chapter 10
Recognition and Enforcement of the Award
Introduction ....................................................
31
Introduction ....................................................
38
Costs of Arbitration ........................................
31
Recourse against an Award ............................
38
Constituent Costs ....................................
31
Appeal or Other Recourse ........................
38
Request for Deposits ................................
31
Setting Aside the Award............................
38
Fixing the Amount of Costs ......................
31
Time Period ..............................................
38
Apportionment of Costs Who Pays,

How Much? ..............................................
Grounds for Setting Aside ........................
38
31
Remission of the Award ............................
39
Interest............................................................
32
Recognition and Enforcement ........................
39
Questions........................................................
33
Recognition ..............................................
39
Recognition and Enforcement ..................
39
Formal Requirements ................................
39
Grounds for Refusing Recognition and

Enforcement ..................................................
39
Chapter 9
The Making of the Award
Introduction ....................................................
34
Awards and Other Decisions ..........................
34
Incapacity of Party ....................................
40
Procedural Orders ....................................
34
Lack of Valid Arbitration Agreement ..........
40
Interim Measures of Protection..................
34
Violation of 'Due Process' ........................
40
Awards ....................................................
34
Rules Applicable to the Merits ........................
34
Arbitration Tribunal Exceeding its

Authority ..................................................
40
Choice of Law ..........................................
34
Amiable Compositeur................................
35
Irregular Composition of the Tribunal

and Irregular Procedure ............................
40
Relevance of Contract and Trade Usage ..
35
Award Not Binding or Set Aside................
40
Decision-Making by the Panel of Arbitrators ....
35
Non-Arbitrable Subject Matter ..................
40
Exceptions for Questions of Procedure ....
35
Violation of Public Policy ..........................
41
Confidentiality of Deliberations ..................
35
Content of Award and Formal Requirements ..
35
Suspension of Enforcement Proceedings

and Order of Security ......................................
41
Holding and Reasons on All Claims ..........
35
Importance of the New York Convention ........
41
Consent Award ........................................
36
Questions........................................................
41
Written Form ............................................
36
Date and Place of Award ..........................
36
Signatures of the Arbitrators......................
36
Delivery to Parties - Publication of the

Award ......................................................
36
Limits to Publication of Award ..................
36
Correction, Interpretation, Addition..................
37
Correction of Clerical Errors ......................
37
Interpretation of Award..............................
37
Additional Award ......................................
37
Questions........................................................
37

Chapter One: Fundamental Principles of the International Arbitration Process
Chapter One
Fundamental Principles of the International Arbitration Process
By the end of this chapter, you should be able to:
Distinguish arbitration from litigation
Understand the key choices to make when opting for arbitration
Introduction
International arbitration is one of the many private
dispute resolution mechanisms parties involved in
international transactions can adopt in resolving their
disputes. Arbitration is a formal, private dispute
resolution mechanism. The outcome of the process is
a legally binding and enforceable decision with res
judicata effect.
Arbitration and Litigation
Several issues may arise when determining whether to
agree on a forum selection or arbitration clause1 in
negotiating international contracts. This section
examines some of the most important issues.
Competence and Expertise of the Decision
Maker
In litigation, parties generally do not have any
influence over the selection of the judge assigned
to hear their dispute and are therefore not in a
position to assess how technically competent he
or she is. In an arbitration, however, the parties are
able to select the arbitrators (or the entity which
will select for them in the event of disagreement)
and can select individuals with the relevant
technical expertise to decide their dispute2.
Privacy/Confidentiality
Litigation is generally open to the public, with the
documents filed and judgment of the court available
for public inspection. Arbitration proceedings,
documents and awards, however, are typically
private between the parties and arbitral tribunal
(and arbitral institution, if used)3. However, privacy

is not the same thing as confidentiality. An arbitral
award can enter the public domain when an
enforcement proceeding is commenced, or where
a party has a legal obligation to disclose. Some
courts have ruled that arbitral documents and
proceedings are not protected by confidentiality,
so the local law may be an important factor in
choosing the seat for the arbitration.
Enforceability
Court judgments are enforced through the
coercive powers of the state. Arbitration awards
do not have any such automatic powers of
enforcement, meaning that the award must be
voluntarily complied with by the losing party.
Where this does not happen, the winning party
can seek enforcement before a national court.
Court judgments have a territorial limitation,
however, and there are no multilateral conventions
for their enforcement except within the European
Union. Nevertheless, under the New York
Convention on the Recognition and Enforcement
of Foreign Arbitral Awards (the "New York
Convention"), an award made in one Convention
state can be enforced in any of the other
Convention states (currently 146) upon the
production of the arbitration agreement, the
award, and translations, if necessary.
Speed and Finality
A court judgment is generally subject to appeal on
the merits and usually becomes final only when it
Below is an example of an arbitration clause parties could incorporate into their contract:
"Any dispute or difference arising out of or in connection with this contract shall be determined by the appointment of a single arbitrator to be agreed
between the parties, or failing agreement within fourteen days, after either party has given to the other a written request to concur in the appointment
of an arbitrator, by an arbitrator to be appointed by the President or a Vice President of the Chartered Institute of Arbitrators."
For an example of how this selection process can operate within an institutional setting, see
http://www.adr.org/aaa/faces/arbitratorsmediators/arbitratormediatorselection?_afrLoop=1281053458824486&_afrWindowMode=0&_afrWin
dowId=3mv072psp_1#%40%3F_afrWindowId%3D3mv072psp_1%26_afrLoop%3D1281053458824486%26_afrWindowMode%3D0%26_adf.ctr
l-state%3Drmaqwpc62_4.

is no longer appealable. In contrast, an arbitral

award is final and subject to appeal on only very
limited grounds. Challenges to arbitral awards are
usually limited occasions where there has been a
procedural flaw or for reasons of public policy.
Under Article 34.3 of the UNCITRAL Model Law
on International Commercial Arbitration (the
"Model Law"), an arbitral award must be
challenged within three months.
Neutral Forum
Litigation takes place before national courts
connected to either the dispute or a party to the
dispute. A party litigating before a national court
must have standing to sue before the court. In
contrast, parties in arbitral proceedings can
arbitrate in any forum of their choice without the
necessity of a connection to the forum. Forum
neutrality is one of the major advantages of
arbitration since disputing parties from different
countries often prefer to have the arbitration take
place in a neutral third country to assure a level
playing field and to avoid one party getting a
"home advantage" and the perception of bias.
Procedure
The procedure adopted before national courts is
laid down in rules applicable before such courts4.
These rules are not necessarily tailored to individual
cases. Parties involved in an international
arbitration can tailor their procedural rules to their
particular dispute, even where the arbitration is
conducted under specified arbitration rules.
Cost
The cost of filing civil proceedings before national
courts may be minimal5. In comparison, the cost
incurred in arbitral proceedings is usually higher6.
One reason for this is that the parties pay for the
arbitrators, the arbitral institution (if any), and
administrative facilities, in addition to other
common legal costs, whereas in a civil proceeding
many of these costs are absorbed by the state.
Special Powers
In litigation, the powers a court can exercise and
the remedies it can offer are regulated by the
state's applicable law. However, an arbitrator may
exercise wider powers as conferred upon him/her
by the parties. An example is where the parties
empower the arbitrator to decide the dispute as
amiable compositeur or ex aequo et bono (that is,
without reference to the law but on the basis of
what s/he judges to be fair and just under the
circumstances)7.
Representation
To represent a party in court, legal practitioners
must often have that jurisdictions professional
qualification and be admitted under the rules of a
local bar or professional body. Parties to an
international arbitration can generally choose to be
represented by anyone they wish to engage. A
representative may be a lawyer or a technical
person with relevant expertise, but in most cases
s/he does not need to belong to any professional
body where the arbitration is held.
Key Choices
Once parties have decided to resolve their dispute by
arbitration, there are some fundamental decisions they
need to make, which are examined in this section. The
increase in the reference of disputes to arbitration has
led to the proliferation of arbitral institutions, which are
specialised organisations that administer arbitral
proceedings. For a fee, they render various services to
the disputing parties, their representatives and the
arbitrators. Parties experienced in international
arbitration (or where a state or state enterprise is
involved) may prefer, however, to organise the arbitral
procedure without the aid of an institution, by
choosing ad hoc rather than institutional arbitration.
Ad hoc Arbitration
Ad hoc arbitration refers to an arbitration
conducted without the assistance of an arbitral
institution. This may mean that the parties and
arbitral tribunal will make up the procedural rules
Certain investor-state arbitrations (such as proceedings conducted under the North American Free Trade Agreement, or NAFTA) publish documents
for reasons of public policy.
For a UK example, see http://www.justice.gov.uk/courts/procedure-rules/civil/rules.
See http://hmctscourtfinder.justice.gov.uk/courtfinder/forms/ex050-eng.pdf for a listing of civil court fees.
Please see the Costs of International Arbitration Survey, available at www.ciarb.org.
Given that the parties are essentially hiring the arbitrator(s) to resolve their dispute, there is more latitude for customisation than in a judicial
proceeding.

as they go along. An important consequence of

this option is that the arbitration law of the place of
arbitration may frequently establish the procedures
which will be used by the parties and tribunal. In
some jurisdictions, the national arbitration law
applies by virtue of the arbitral proceeding being
held there, such as Section 2 of the Arbitration Act
1996. National arbitration laws typically contain
certain mandatory rules from which the parties
and arbitrators may not derogate8. They may also
contain non-mandatory provisions which act as
default rules, which apply where the parties have
not provided for that particular circumstance.
These provisions also serve as guidance to the
parties and tribunal.
Institutional, or Supervised, Arbitration
In some arbitration agreements, the parties opt to
conduct their arbitration under the rules of a
particular institution. Institutions all over the world
provide administrative assistance to parties and
usually formulate their own sets of arbitration rules
and a standard arbitration agreement9. Parties
may decide to incorporate an institutions standard
arbitration clause into their contract and/or draft
their own agreement to conduct their arbitration
under the rules of a particular institution.
It is important to clearly identify the particular
institution in the arbitration agreement to avoid
ambiguity and to ensure that the agreement does
not become incapable of being performed. Once
an institution's arbitration rules are chosen, those
rules will be incorporated by reference into the
parties arbitration agreement. The institution will
administer the arbitration in accordance with its
rules, and the parties will be contractually bound
to comply with them. The rules applicable to the
arbitration will, in most cases, be the version of
the rules in use at the time the dispute is
submitted to the institution to administer.
The principal difference between ad hoc and
institutional arbitration is that in institutional arbitration,
the parties already have a set of arbitration rules
governing the arbitral procedure while the parties to
ad hoc arbitration may not. Very frequently, parties
in an ad hoc arbitration will adopt the UNCITRAL
Arbitration Rules to govern their procedure.

The Seat of Arbitration
The second key choice the parties must make is
the "seat" or legal venue of the arbitration
proceeding. This is important for various reasons.
The seat is the place to which the arbitration
procedure is legally connected. Courts with
supervisory jurisdiction at the seat will normally
render assistance to the parties before commencement and during the arbitral proceedings. These
courts can assist the parties in constituting the
arbitral tribunal and in granting emergency measures
of protection, amongst other things. Under ad hoc
arbitration proceedings, the national arbitration law
may act as a gap filler in situations where the rules
chosen by the parties are silent. In addition, the
award is deemed to have been made at the seat
of the arbitration for purposes of enforcement and
challenge under the New York Convention.
Where parties fail to choose a seat for the
arbitration, the arbitral tribunal, institution,
appointing authority or national court will make the
decision for them. The fact that parties have
directly or indirectly chosen the seat does not
mean they are bound to hold their hearings or
meetings there, however, and these may take
place anywhere the parties wish. This may be for
the convenience of the parties or to save on travel
costs for witnesses who would otherwise have to
travel to the seat, or for specific political or
personal circumstances. The physical move,
however, does not affect the choice or legal
relevance of the seat of the arbitration.
Questions
n What advantages does arbitration have over
litigation?
n What are some of arbitration's limitations
compared to litigation?
n What are the differences between ad hoc and
institutional arbitration?
n What is the relevance of the parties choosing the
seat of arbitration? What criteria should they use
in choosing the seat?
For example, the Model Law Article 18 provides for equal treatment of parties. The parties cannot agree to a procedure which fails to achieve this
equal treatment.
For an example of the types of standard clauses institutions commonly suggest, see
http://www.lcia.org/Dispute_Resolution_Services/LCIA_Recommended_Clauses.aspx.

Chapter Two: Laws & Rules of International Arbitration
Chapter Two
Laws & Rules of International Arbitration
Understand the importance of the lex arbitri and its components
Identify other relevant rules, practices and guidelines applicable
to arbitration
Introduction
The laws and rules that apply to the arbitral proceeding
must be determined at the outset, as they govern the
procedure and determine what powers are exercisable
by the arbitrators. This chapter commences with a
discussion of arbitration laws before moving on to
rules which the parties can apply to their proceeding.
The chapter then examines so called "soft law" which
can be incorporated
Laws
This section examines three primary laws relevant in
international arbitration proceedings. The Model Law
(when adopted) and the law of the forum state are
both forms of national laws while the New York
Convention is an international convention ratified by
various states.
The Model Law
In 1985, the United Nations Commission on
International Trade Law (UNCITRAL) drafted a
model law on international commercial arbitration
for adoption or adaptation by states as their
national arbitration law. Although it is only a
template or example of what an arbitration law
could look like (and therefore only has force of law
when adopted by a state), it has been adopted by
over 60 states as of 1st May 2013 and has
influenced the legislation of most modern
arbitration laws. The provisions of the Model Law
represent a modern pro-arbitration legal regime.
Law of the Place of the Arbitration (lex arbitri)
As noted previously, the parties to an international
arbitration may choose the seat of arbitration. This
choice is direct when the parties expressly make
such a choice, usually in their arbitration agreement.

The choice becomes indirect when the arbitral
tribunal or institution makes the choice for them. If
requested to do so by a party, appointing authorities
and national courts may also choose the seat of
arbitration in ad hoc arbitral proceedings.
Various reasons have been given to explain why
parties opt to arbitrate their dispute in one place
over another. These include neutrality and
convenience. Experienced parties tend to choose
a particular seat because of its arbitration laws.
What is generally accepted is that the juridical seat
may be different from the place of arbitration.
Thus, parties can hold all their hearings in a
geographical location which is not the legal seat
(such as an arbitration seated in London, but with
arbitral hearings held in Paris), though the relevant
applicable law is still the law of the seat and not of
the place where the arbitration physically occurs.
Nevertheless, those arbitrating in a jurisdiction must
still adhere to local laws regarding work visas,
qualifications of legal representatives and taxation.
Provisions of the law of the seat act as gap fillers
and come into play where parties have not made
any provisions about a particular issue or if their
selected arbitration rules are silent on the matter.
These provisions are usually non-mandatory so
that the parties can depart from them. This
departure takes place when the parties have
made express provisions on the relevant issue or
such is provided for in their chosen arbitration
rules. Where, however, the law of the seat
contains mandatory provisions, the parties and
the arbitral tribunal cannot derogate from them.

Examples of these include Article 18 of the Model

Law (equal treatment of parties) and Section 4
referring to Schedule I of the Arbitration Act 1996,
which contains a list of such mandatory provisions
applicable to arbitrations seated in England1.
The Arbitration Act 1996 was inspired by, but
not copied from, the Model Law. Likewise, the
arbitration provisions in the French Civil Procedure
Code do not copy the Model Law, but do
constitute a set of modern provisions to govern
arbitrations with a French seat. The Canadian
provinces adopted the Model Law verbatim. Hong
Kong, another Model Law jurisdiction copied
most of the Model Law but made a number of
additions to suit its unique legal situation within
China. In some jurisdictions, the same law applies
to both domestic and international arbitrations
while in other jurisdictions, different arbitration
laws apply to each. Hong Kong has just revised its
arbitration ordinance to provide a single regime for
both domestic and international arbitrations. In
jurisdictions with a dual regime, the laws will
specify the scope of each laws application.
The New York Convention
The New York Convention is the most important
convention in international commercial arbitration.
Ratified by 146 countries as of 1 April 2013, its
influence extends to nearly every trading nation in
the world. The New York Convention regulates the
recognition and enforcement of arbitration
agreements and foreign arbitral awards. Awards
made in jurisdictions which are members of the
Convention are recognised and enforced by the
courts of other member states of the New York
Convention. Because the Convention speaks of
foreign awards, even a domestic award may be
enforced under the Convention when enforcement
is sought in another Convention state.
The New York Convention has almost entirely
superseded the two Geneva Conventions of 1923
and 1927, which had regulated the recognition
and enforcement of arbitration agreements and
arbitral awards, respectively. Recognition and
enforcement of awards is simplified under the
10
New York Convention, with the onus of proof

shifting from the party seeking enforcement to the
party resisting enforcement. This shift and the
simplicity of the enforcement procedure have
contributed to international arbitration becoming
the preferred method of dispute resolution in
transnational cases. The New York Convention
regime ensures that all a party seeking recognition
and enforcement of a Convention award needs to
produce is (1) the original authenticated arbitral
award or a certified copy, (2) the original arbitration
agreement or a certified copy, and, where
applicable, (3) certified translations of these
documents. The party resisting enforcement can
attack the award only on the limited procedural
and public policy grounds listed under Article V of
the New York Convention. Even where a
challenging party has proved the existence of one
of these specific grounds, an enforcing judge may
nevertheless decide not to set aside or refuse to
enforce the award.
Rules
Arbitration rules regulate the arbitral procedure,
providing details of how the proceedings should be
conducted and what powers are exercisable by the
tribunal and parties. These rules deal with the way in
which the arbitration is conducted, rather than with
the determination of the parties' substantive dispute.
As previously mentioned, there are some arbitration
rules that are adopted for ad hoc proceedings, while
institutions draft their own rules applicable to
arbitrations conducted under their auspices. Some
institutions will act as appointing authorities in ad hoc
proceedings. In such cases, the institution does not
apply its rules and the parties are free to administer
their arbitration under whatever rules they (or, failing
agreement, the tribunal) may choose. The UNCITRAL
Arbitration Rules are a popular choice.
UNCITRAL Rules
The UNCITRAL Arbitration Rules were adopted in
1976 by the General Assembly of the United
Nations and recommended for use in the
resolution of international commercial disputes by
arbitration2. They regulate arbitral proceedings
from commencement to publication of the final
See http://www.legislation.gov.uk/ukpga/1996/23/schedule/1.
See http://daccess-ods.un.org/TMP/3673522.17435837.html for the text of the General Assembly resolution.

award. Revised in 2010, the Rules provide an

industry benchmark and have influenced the
drafting of many institutional arbitration rules.
Institutional Rules
Various institutions manage arbitral proceedings
under published arbitration rules. These institutions
review their rules at various times to keep them up
to date with arbitral practice. Examples include the
International Chamber of Commerce (ICC)
Arbitration Rules3, the London Court of
International Arbitration (LCIA) Rules4, the Swiss
Arbitration Rules5, the Chinese International
Economic and Trade Arbitration Commission
(CIETAC) Rules6 and the Hong Kong International
Arbitration Centre (HKIAC)s Administered
Arbitration Rules7. Both the ICC and CIETAC have
just finished major revisions to their rules. Whether
ad hoc or institutional, rules must operate within
the context of the applicable procedural law and
thus cannot grant to the parties or the tribunal
powers which, under that law, belong exclusively
to the state courts. An award obtained by a
procedure which contravenes the rules chosen by
the parties is vulnerable to challenge under the
New York Conventions Article V.
Soft Laws
Soft laws refer to those practices, standards, rules,
directions or guidelines which are not law but have a
persuasive force. They have to be agreed to by the
parties or incorporated into their arbitration agreement
to have effect as a contractual term. This section
introduces some of these soft laws.
UNCITRAL Notes
The UNCITRAL Notes on Organising Arbitral
Proceedings8 were drafted to assist parties and
tribunals involved in ad hoc arbitrations to
organise the arbitral proceeding. They provide a
useful checklist of the issues parties and the
tribunal need to consider, both before and during
the arbitration. Institutions may also take the
Notes into consideration when drafting their own

rules. The Notes do not have the force of law and
are rather like a roadmap to guide the arbitrators
and parties through the procedure.
Codes of Ethics
Although arbitration is not yet universally
recognised as a profession, practitioners of
arbitration are loosely regulated through various
codes of ethics applicable to members of the
institution which drafted them. Thus, the AAA/ABA
Code of Ethics for Arbitrators in Commercial
Disputes applies to members of the AAA and
ABA. The IBA Rules of Ethics for International
Arbitrators applies to IBA members but also
serves as a best practise guideline for arbitrators
generally. The SIAC Code of Conduct for
Arbitrators applies to arbitrators sitting under its
arbitration rules, the HKIAC Code9 for its
arbitrators; and so on.
IBA Conflict Guidelines
A fundamental aspect of modern international
arbitration is the neutrality of the tribunal. Parties
expect the arbitral tribunal to be independent and
impartial in arriving at its decision. An arbitrator
who lacks independence from a party, or who is
biased towards a party because of personal or
professional relationships, will have a conflict of
interest and should not accept the appointment to
the tribunal. The IBA Guidelines on Conflicts of
Interest in International Arbitration10 contain
guidelines on conflict situations and how they
should be treated. The Guidelines are drafted for
use by arbitrators as a guide on disclosure issues
and may also guide national courts and arbitration
institutions in deciding challenges to arbitrators.
The Guidelines, created by a broad-based group
of international experts, are a well-known
benchmark for best practice and also contribute
to the harmonised interpretation and application of
the principle of neutrality in international arbitration.
See http://www.iccwbo.org/Products-and-Services/Arbitration-and-ADR/Arbitration/Rules-of-arbitration/Download-ICC-Rules-ofArbitration/ICC-Rules-of-Arbitration-in-several-languages/.
See http://www.lcia.org/Dispute_Resolution_Services/LCIA_Arbitration_Rules.aspx.
See https://www.swissarbitration.org/sa/en/rules.php.
See http://www.cietac.org/index.cms.
See http://www.hkiac.org/index.php/en/aribtration-rules-a-guidelines/hkiac-administered-arbitration-rules.
See http://www.uncitral.org/pdf/english/texts/arbitration/arb-notes/arb-notes-e.pdf.
HKIAC Code of Ethical Conduct for Arbitrators, which can be found at http://www.hkiac.org/index.php/en/arbitrators/code-of-ethical-conduct
10 http://www.ibanet.org/Publications/publications_IBA_guides_and_free_materials.aspx#conflictsofinterest.
11

IBA Rules of Taking Evidence

The IBA Rules on the Taking of Evidence in
International Commercial Arbitration (revised in
2010)11 deal with evidentiary issues and provide
guidelines on what evidence is admissible in
international arbitral proceedings. It combines best
practices from civil and common-law legal
traditions. For these rules to apply, the parties
must agree to adopt them, although many
tribunals will be inspired by these rules in making
evidentiary rulings.
Questions
n How do you identify the rules and laws applicable
to an international arbitration?
n What is the relevance and role of soft laws in
international arbitration?
n A Brazilian company purchases chocolate from a
Swiss manufacturer, which is shipped on a vessel
registered in Rotterdam. Due to mechanical
difficulties of the ship, and then bad weather in
the last days of its voyage, the shipment is
delayed for a period of two weeks. Normally this
delay would not be serious but in this particular
case, the delay causes a substantial loss to the
Brazilian buyer, who commences arbitration
against the Swiss manufacturer for damages
caused by the late delivery. Identify as many rules
and laws as you can that may be applicable in
this scenario.
11 http://www.ibanet.org/Publications/publications_IBA_guides_and_free_materials.aspx#conflictsofinterest.
12

Chapter Three: Composition of the Arbitral Tribunal
Chapter Three
Composition of the Arbitral Tribunal
Understand how arbitrators are appointed and replaced
Appraise the qualities and qualifications required of arbitrators
Understand how and when to challenge arbitrators
Introduction
Until the arbitral tribunal is constituted, the arbitral
proceedings cannot effectively commence. The
parties first need to (directly or indirectly) appoint the
arbitrators, who then have to accept their
appointment and the mandate to make a binding
decision on the parties' dispute.
Appointment Procedures
Having a say in the appointment of arbitrators is one
of the most important advantages of arbitration over
litigation. Disputants in a state court cannot choose
their judge or decide how many judges will hear their
dispute. Parties can stipulate the number of arbitrators
they want to decide their dispute in the arbitration
agreement, with parties normally choosing either one
or three. There are advantages and disadvantages to
each choice. National laws make a default provision
for one or three arbitrators1. Some laws expressly
provide that where the parties provide for two
arbitrators, a third arbitrator will automatically be
appointed. The golden rule is that parties can always
agree on the number of arbitrators and how they
should be appointed. In contrast to state court judges
who are available to grant urgent measures in a case,
very little can be done in an arbitral proceeding until
the tribunal has been appointed. This has led a
number of institutions to provide in their rules for the
appointment of an emergency arbitrator in urgent
circumstances before the tribunal has been
constituted.
One or Three?
In an arbitral tribunal composed of a sole
arbitrator, the parties may jointly appoint the sole
arbitrator or mandate a third party to make such
appointment (such as the President of the

Chartered Institute of Arbitrators or another
institution). In an arbitral tribunal with three
arbitrators, each party appoints one arbitrator
known as a party-appointed arbitrator. The third
and presiding arbitrator is usually either jointly
appointed by the two party-appointed arbitrators
or chosen by a third party.
Multi-party Arbitrations
This refers to disputes with more than two
disputants. There are two primary methods of
appointing arbitrators in multi-party disputes.
Where the interests of the disputants can be
categorised into claimants and respondents, then
each "group" may agree on the appointment of
one of the arbitrators. Where their interests cannot
be so categorised, or they cannot agree on an
arbitrator, then an appointing authority, national
court or arbitration institution may make the
arbitrator appointments on behalf of all the parties.
The Appointing Authority
An appointing authority is an independent third
party to the arbitration who chooses one or more
members of an arbitral tribunal, and may also
render other assistance to the parties. The
appointing authority may be an individual, office or
arbitral institution. Examples of appointing
authorities include the Secretary General of the
International Centre for Settlement of Investment
Disputes (ICSID); the Secretary General of the
Permanent Court of Arbitration (PCA) and the
President of the International Court of Justice
(ICJ), for instance. The UNCITRAL Rules envisage
the presence of an appointing authority to assist
The umpire system is not the norm in international arbitration and therefore not considered in this Workbook.
13

the parties in the appointment of arbitrators and

determining arbitrator challenges and replacement
of arbitrators under ad hoc arbitral proceedings.
Where one party fails to make an appointment,
the appointing authority, institution or national
court may make the appointment on behalf of that
party so that the arbitration may proceed.
National courts can also assist the parties by
appointing arbitrators. The relevant court will be the
court at the seat of arbitration. Where the parties
have not chosen a seat, the party applying for the
appointment will ask a court with some connection
to the case to step in. Most courts will readily
assist parties, especially when there is no forum
more convenient to render such assistance or where
their failure to act would result in a denial of justice.
Appointment Methods
Direct
The parties (usually through their lawyers) will meet
with prospective arbitrators, interview them and
then choose one to act as either their partyappointed arbitrator or as their nominee in a jointly
appointed sole arbitrator tribunal. Many arbitral
institutions maintain a panel of recommended
arbitrators which a party can use in seeking
suitable candidates.
List Procedure
Under the list procedure, each party nominates
three or more arbitrators and either exchanges lists
directly with the other party or sends the list of
nominees to the appointing authority. The arbitrators
are ranked in order of preference or each party
may cancel out the arbitrators it does not wish to
appoint. Where there is an arbitrator nominated by
both parties, that person will usually be appointed.
Default and Institutional Appointments
National arbitration laws provide for default
arbitrator appointment rules to apply where the
method chosen by the parties fails or where the
parties have not made any arbitrator appointment
provisions. Under institutional arbitration, the
provisions of the institutions arbitration rules will
apply to the arbitrator appointment mechanism.
14
Required Qualities and Qualifications of

Arbitrators
Parties are, to a great extent, the masters of their
dispute and should know what professional
qualifications or expertise they want the persons who
are going to resolve their dispute to possess. The
parties should also know what they want out of the
arbitral process. Do they want a fair and amicable
resolution of the dispute? Do they want to frustrate
their erstwhile business partners? Do they want to
frustrate the arbitral process to buy as much time as
they possibly can? Do they want an arbitrator with
expertise in the subject matter of the dispute? Do they
want someone who interprets the law very strictly, or
someone who is open to novel interpretations to fit the
circumstances? Do they need someone with particular
technical knowledge? These are just some of the
questions which might influence the sort of arbitrator a
party will want to appoint.
Special Background or Expertise
In specialist or technical contract disputes, parties
may prefer to appoint an arbitrator with expertise
in the relevant sector. This assures the parties that
the arbitrator appreciates and understands the
dispute's issues and nuances. In a dispute that
turns on the interpretation of the contractual terms
or facts, it may not be necessary to appoint an
arbitrator with specialist or expertise knowledge.
On the other hand, it may be very useful to have
someone familiar with the customs of the industry
when evaluating the issues of that industry.
Agreed Qualifications
The parties may agree in their arbitration
agreement or subsequently after the dispute has
arisen, on the specific qualifications the arbitrator(s)
to be appointed should possess. This is usually
agreed with regard to a sole or presiding arbitrator.
Such qualifications may be categorised into:
Professional: In a technical disputefor
example, constructionparties may want to
appoint an architect, surveyor, or engineer as
arbitrator; and
Personal: Parties should look to appoint an
arbitrator who is a team player, flexible,

possesses common sense, and appreciates

cultural differences. Organisational skill and
solid drafting experience are key.
Some parties go as far as to name the specific
person they want to decide any dispute that may
arise. What drawbacks might hamper the
implementation of such an agreement?
Nationality
International arbitrations usually involve parties
from more than one country. The parties may
agree that a sole or presiding arbitrator will be
chosen with a neutral nationality. This leaves the
parties free to choose arbitrators that share their
respective nationalities if they so wish. The Model
Law expressly states that an arbitrator cannot be
disqualified purely on the basis of nationality.
However, the practice of most arbitration
institutions is to appoint a sole or presiding
arbitrator of a nationality unconnected to any of
the parties.
Challenge and Replacement
Challenge and replacement of arbitrators is one of the
rights parties have against arbitrators during the
arbitral proceeding. The provisions regulating
challenge and replacement are contained in both
arbitration rules and national laws. The grounds for
challenge are usually mandatory provisions. These
provide for the mechanism, applicable test and
grounds to sustain a challenge along with the
competent authority to decide whether the challenge
has succeeded. A challenge can be decided by four
different decision makers, depending on the
circumstances:
The arbitral tribunal itself (without the challenged

arbitrator)2;
The Appointing Authority;
The arbitration institution3; and
National courts in both ad hoc and institutional

arbitration proceedings.
Reasons for Challenge
Under the UNCITRAL Rules, challenge and
replacement is regulated under Articles 10-14. An
arbitrator can be challenged if circumstances exist

that give rise to justifiable doubts as to the
arbitrators impartiality or independence. Under
the ICC Arbitration Rules, a challenge can be
made for an alleged lack of impartiality or
independence or otherwise (Article 14.1).
The LCIA Arbitration Rules provide that parties
can challenge an arbitrator if circumstances exist
that give rise to justifiable doubts as to his
impartiality or independence. (Article 10(3)), whilst
under Swiss Rules, an arbitrator may be
challenged where circumstances exist that give
rise to justifiable doubts as to the arbitrators
impartiality or independence (Articles 10-11).
Arbitrations administered under HKIAC Rules
similarly provide that an arbitrator may be
challenged if circumstances exist that give rise to
justifiable doubts as to the arbitrators impartiality
or independence (Article 11.4).
Procedure for Challenge
Under the UNCITRAL Rules, the challenging party
shall, within 15 days of the cause of action arising,
send a notice of the challenge to the members of
the tribunal and the other party. The notice shall
be in writing and contain the reasons for the
challenge. Where the other party agrees to the
challenge or the challenged arbitrator withdraws, a
replacement arbitrator is appointed. Where the
challenged arbitrator fails to withdraw or the other
party disagrees with the challenge, the decision
will be made by an appointing authority.
Under ICC Rules, the challenging party shall
submit a written statement within 30 days from
the cause of action arising specifying the facts
and circumstances on which the challenge is
based to the ICC Secretariat, who will notify the
concerned arbitrator, other members of the
tribunal and the other party and receive comments
in writing from them. These will be communicated
to all parties before the ICC Court of Arbitration
makes a decision. The ICC Court does not state
the reasons for its decision, but either upholds or
rejects the challenge. In 2010, it heard challenges
in 34 cases against 46 arbitrators; of these, it
accepted six. The Court also replaced three
See the ICSID Arbitration Rules and the Model Law Article 13.2
In practically all institutional arbitral proceedings, the institution decides the challenge, at least in the first instance. For example, Article 11.7 of the
HKIAC Administered Arbitration Rules provides that the HKIAC Council will decide on the challenge in accordance with its Challenge Rules if the
arbitrator so challenged does not withdraw
15

arbitrators at the request of parties, and three

more upon its own initiative4. Similar procedures
exist for the LCIA, HKIAC, and other institutions.
Where the appointing authority or institution has
rejected a challenge application and the
challenging party is not satisfied with the decision,
the arbitration law at the seat of arbitration will
dictate the next step. An example is the Model
Law which in Article 13(3) provides that an
unsatisfied party may request from the national
court a final decision within 30 days of receiving
the first decision. This appeal applies to challenge
decisions emanating from both ad hoc and
institutional arbitration proceedings.
Disclosure Requirements
Every arbitrator is required to make certain
disclosures before accepting appointment or
immediately after when such information comes to
his or her notice. The time for a party to challenge
starts to run from the time the party becomes
aware of the circumstances that may give rise to a
sustainable challenge. This obligation of disclosure
and the right to challenge continues throughout
the arbitration process. The award may be set
aside or annulled on such grounds, or a national
court may refuse to enforce it.
Other Grounds for Terminating Arbitrators
Mandate
Other grounds for terminating the arbitrators
mandate include where the arbitrator does not
possess the required qualifications specified by
the parties, or can no longer act. An example is
under the LCIA Arbitration Rules (Article 10),
where the arbitrators appointment may be
revoked by the LCIA itself where the arbitrator
acts in deliberate violation of the Arbitration
Agreement (including the LCIA Rules) or does not
act fairly and impartially as between the parties or
does not conduct or participate in the arbitration
proceedings with reasonable diligence, avoiding
unnecessary delay or expense. Some high-profile
cases in recent years have encouraged tribunals
to act without delay to avoid an embarrassing
application for removal.
16
Procedure for Replacement

Where the challenge is successful or an arbitrator
is removed for any other reason, a vacancy
results. A new arbitrator will normally have to be
appointed to fill the gap5. Arbitration laws and
rules provide for a repetition of the initial
appointment procedure in choosing the
replacement.
Possible Repetition of Hearings
Where an arbitrator is replaced, the laws and rules
provide for different solutions to the question of
whether to repeat the already concluded stages. A
great deal depends on the stage at which the
replacement occurred and which arbitrator was
replaced. If one of the party-appointed arbitrators
was replaced, as a matter of due process and fair
hearing, the affected party may wish the hearings
to be repeated (such as according to Article 14 of
the UNICTRAL Arbitration Rules). Where, however,
the presiding (or sole) arbitrator is replaced,
UNCITRAL Arbitration Rules provide that the
previous hearings shall be repeated. Where in a
panel of three (or more) arbitrators an arbitrator
resigns, becomes incapable of continuing with the
proceedings, is disqualified or fails to continue in
the proceedings, the arbitrator is removed and the
arbitral tribunal is said to be truncated.
Questions
n What are the advantages/disadvantages of
single-member tribunals and three-member
tribunals?
n What personal and/or professional qualities
should an arbitrator possess? Why?
n Compare the challenge provisions of UNCITRAL
Arbitration Rules and ICC Arbitration Rules.
n Under what circumstances should the arbitral
hearings be repeated after the replacement of an
arbitrator?
n Under what circumstances should an arbitrator
resign or be removed?
ICC Court Statistical Report 2010
Under Article 15.5 of the ICC Rules, if the arbitrator is removed after the proceedings have closed, the Court may allow the remaining two members of
the tribunal to render the award.

Chapter Four: Powers and Jurisdiction of the Arbitral Tribunal
Chapter Four
Powers and Jurisdiction of the Arbitral Tribunal
Determine what powers the arbitrator possesses in the arbitral proceeding
Understand how the jurisdiction of the arbitrator is determined
Understand the role national courts play in international arbitration
Introduction
The arbitral tribunal derives its jurisdiction its power
to decide from the agreement of the parties who
submitted the dispute to that tribunal. Without jurisdiction,
the tribunals actions and award are a nullity. Frequently,
the first reaction of a respondent is to deny the
jurisdiction of the tribunal. It is now a well-established
principle that an arbitral tribunal can determine its own
jurisdiction, although that determination is reviewable
by a national court. Arbitrators need to exercise certain
powers to perform their mandate, which must be
granted to them either by the parties (expressly or in
arbitration rules) or national law or applicable
international treaties.
Sources of Powers and Jurisdiction
The Arbitration Agreement
The primary source of the tribunal's powers is the
parties' arbitration agreement. Consensual arbitration
is contractual in nature as between the parties,
arbitrators and arbitral institutions. The arbitration
agreement is supplemented by provisions of the
arbitration rules incorporated into it. These rules
also contain specific powers and rights exercisable
by the arbitrators.
According to the doctrine of severability (or
separability for some), the arbitration agreement
contained in a contract can survive the invalidity or
termination of the main contract so that the
jurisdiction it confers on the tribunal allows it to
decide on the consequences of that invalidity. If
this were not the case, all a reluctant respondent
would need to do is allege invalidity, in order to
take the proceedings before a state court thus
putting the parties back into the very place they
sought to avoid by going to arbitration.

National Laws and Treaties or Conventions
National laws on arbitration also contain some
powers and rights exercisable by arbitrators where
the parties have not provided otherwise, and
provide for the recognition of the parties wish to
choose arbitration instead of litigation, as well as
for the recognition and enforcement of the
resulting arbitral award.
Stay of Court Proceedings
Where parties have contracted to arbitrate any present
or future disputes arising from their commercial
relationship, almost all national courts will recognise the
validity of this provision and give effect to it by denying
or declining to exercise jurisdiction over the case.
Request for Stay or Dismissal
Some courts will deny jurisdiction in the face of a
valid arbitration agreement whilst others will
merely stay their jurisdiction. The resulting effect is
the same: by refusing to deal with the matter, the
court respects the original choice of the parties
and sends them to arbitrate rather than litigate
their dispute.
Conditions of Stay or Denial of Jurisdiction
Each court will apply its own national arbitration
law or the New York Convention in determining
whether the conditions for it to stay or deny
jurisdiction have been satisfied by the applicant.
An example is Article II.3 of the New York
Convention which provides, The court of a
Contracting State, when seized of an action in a
matter shall at the request of one of the parties,
refer the parties to arbitration.
17

New York Convention states have undertaken to

recognise agreements in which the parties have
clearly agreed to arbitrate their disputes. Various
national courts have held that all this requires is
the existence of a prima facie arbitration
agreement1. It does not require the court to
conduct a detailed analysis into the validity of the
arbitration agreement because the arbitral tribunal
will, if challenged, examine the arbitration
agreement as part of its enquiry into its own
jurisdiction. Later, the courts may look at it again
on appeal. There is some debate on whether the
national court should at this stage also examine
the arbitrability of the dispute2 and whether the
relationship is contractual3.
Continuation of Arbitral Proceedings
Once the courts of a Convention state dismiss the
application or grant a stay of proceedings, the
court would generally refer the parties to
arbitration. Where an arbitral tribunal has been
constituted, the arbitral proceedings will resume or
if it was stayed, continue. Where the tribunal had
not been constituted, the parties will set about
doing so.
Determination of Own Jurisdiction
It is fully accepted by most national arbitration laws
that arbitrators are empowered to determine their own
jurisdiction, with national courts having the ultimate
power to adjudicate that decision on appeal. The
concept of Competence-Competence refers to the
power of the tribunal to determine its own jurisdiction
over a particular arbitral dispute. This power is
provided for in various laws and arbitration rules. An
example is Article 16.1 of the Model Law, which
includes the arbitral tribunal deciding on, the
existence or validity of the arbitration agreement to
the power to determine its jurisdiction.
Objections to Jurisdiction
A party can contest the jurisdiction of the arbitral
tribunal over either it (subjective arbitrability) or the
subject matter of the dispute (objective

arbitrability). An objection over the jurisdiction of
the tribunal is a waivable issue since it can be
cured by the objecting party voluntarily subjecting
itself to the tribunal's jurisdiction. Parties cannot,
however, create jurisdiction to adjudicate a
decision on a matter which is not arbitrable.
The arbitral tribunal may decide to bifurcate the
proceedings and give a ruling on the jurisdictional
phase of the dispute. Where the issues are so
intertwined that in arguing on jurisdiction the
merits will be entered into, the tribunal may decide
to hear the merits as well and decide on both its
jurisdiction and the merits in its final award. The
party challenging the jurisdiction of the arbitral
tribunal will have to reserve its right to mount its
jurisdictional challenge after the final award as a
ground for setting aside the award.
Ultimate Control by National Courts
Where a party is dissatisfied with the tribunals
decision on its jurisdiction and has not waived its
right of challenge, it can challenge the decision in
the relevant national court. After an award on the
merits has been made, the challenge will be in the
form of an application to nullify the award on the
grounds of lack of jurisdiction. If an award on the
merits has not been rendered, the party can
challenge the award on jurisdiction in an application
to set it aside. The existence of a challenge may
not stop the tribunal from continuing its work and
rendering an award. This reduces the temptation
to challenge jurisdiction merely in an attempt to
delay or derail the proceedings4.
Where an award on the merits has not been made
and the jurisdictional challenge is sustained, a
fresh arbitral tribunal may be constituted or
litigation commenced. Where the national court
accepts the challenge to an award, it will nullify the
final award and the parties can commence fresh
proceedings either by arbitration or litigation. An
Meaning an arbitration agreement which is valid at first sight.
With respect to the notion of arbitrability, certain disputes will be inappropriate for arbitration simply on account of their nature. One can imagine the
difficulties which would emerge from attempting to arbitrate a criminal homicide case or a divorce proceeding, for instance. Generally speaking, any
category of dispute in which the state has an interest in the proceedings (such as a case regarding a person's status or custody) may not necessarily
be appropriate for arbitration.
This will be relevant where the state concerned has made a reservation under Article I.3 of the New York Convention. This so-called commercial
reservation by which some states limit the application of the New York Convention to commercial disputes is an important feature to check when
evaluating possible arbitration seats. It is up to state law to establish whether a dispute is commercial and, as one would expect, this can vary from
one jurisdiction to another.
See Model Law Article 13.3.
18

enforcing judge who accepts a jurisdictional

challenge will refuse to enforce the resulting
award. Where the jurisdictional challenge is
dismissed, the award may be upheld or the
proceedings recommenced or continued. The
decision of the national court is a final
determination of the issue and most often is not
subject to appeal5.
Powers of the Tribunal during Arbitral
Proceedings
There are five principal stages in any arbitration
reference:
i)
The Commencement stage (before the tribunal is

constituted)
ii)
The Composition of arbitral tribunal
iii) The Hearing

iv) The Post-hearing stage up to the Award
v) The Post-award stage.
The arbitral tribunal is relevant from stages (ii) to (iv)
and arguably the early stages of (v). It is after the
tribunal has been composed that it enters into its
mandate of deciding the parties' dispute in
accordance with the arbitration agreement. The
powers examined in this section are those exercisable
during the hearing and post-hearing stages of the
arbitral reference. These powers are broadly divided
into three:
Power to Conduct Proceedings
All arbitration rules provide guidance on how the
tribunal should conduct the proceedings, since it
is recognised that they are responsible for
directing the arbitral proceedings. An example
under the UNCITRAL Arbitration Rules is Article
15.1 which opens with, Subject to this Rule, the
arbitral tribunal may conduct the arbitration in
such manner as it considers appropriate.
These wide powers are subject to its treating the
parties equally and giving them full opportunity to
present their case (natural justice or due
process) as provided under Article 15.1 of the
UNCITRAL Arbitration Rules. This can be
compared with Article 22.4 of the ICC Arbitration
Rules, which calls on the arbitral tribunal to act

fairly and impartially, and to give each party a
reasonable opportunity to present its case. It is
important to note, however, that if a party does
not take the opportunity of participating in the
proceeding, the arbitral tribunal can continue the
hearing, and even make an award against that
party.
Power to Order Interim Measures
After the arbitral tribunal has been constituted, a
party may need to seek interim measures of
protection. Under most arbitration laws, the
applying party can obtain such measures from the
tribunal or the relevant national court. If a party is
applying to the arbitral tribunal, it has to be for
relief which the applicable law empowers the
tribunal to grant.
Generally, interim orders cannot be enforced
under the New York Convention6. National courts
may, however, lend their support in various ways
to enforce such interim orders. The arbitral tribunal
cannot enforce its own orders since it lacks
coercive authority; it may, however, draw an
adverse inference from a partys non-compliance
with its orders and take that into consideration in
deciding the dispute. In some jurisdictions (such
as Italy, Brazil and Argentina), arbitral tribunals
cannot order interim measures, even if parties are
arbitrating under rules which give the tribunal
such power.
It should also be noted that this is an area where
the arbitral tribunal and national courts may
exercise concurrent powers. The relevant national
court can always grant an order for interim
measures at any time of the proceedings.
However, where the relief sought is available from
the tribunal, many courts will refer the parties back
to the tribunal. A party may require an interim
order before the commencement of the
arbitration. In such situations, the party may apply
directly to a national court, since there is as yet no
arbitral tribunal seized of the dispute. Some
arbitral institutions have adopted rules providing
for the constitution of an emergency tribunal or
arbitrator to determine the interim application and
See Model Law Article 13.3.
However, some jurisdictions, including France, will enforce orders as they would awards under the New York Convention.
19

make a decision which remains binding on the

parties until the tribunal is constituted. Examples
of such rules are the ICC Pre-Arbitral Referee
Rules, and the new Emergency Arbitrator facility
under Article 29 of the ICC Rules of 2012.
Power to Make Final Award
The power to make the final award deciding the
issues in dispute can be said to be the most
important power possessed by the arbitral
tribunal. The tribunal may be required or decide to
make different types of awards, such as interim or
interlocutory awards, partial awards, consent
awards, and final awards.
Limitations to Arbitral Powers
Limitations to the powers of the arbitral tribunal may
be contained in the arbitration agreement, arbitration
rules or national arbitration laws. In the arbitration
agreement, the parties may expressly exclude certain
powers usually exercisable by the tribunal. As
mentioned previously, national laws sometimes
reserve certain powers to state courts, thus tying the
hands of a tribunal operating under its mandatory
laws. Generally, the exercise of arbitral powers is
subject to the fundamental principles of natural justice
and due process, including fair and equal treatment
and an opportunity for the parties to present their
cases and respond to the case of the opponent.
Equal Treatment of the Parties
Parties appearing before the tribunal must be
treated equally. This includes putting parties on
notice of the proceedings, ensuring pleadings and
other written communications are despatched to
all parties in good time, and affording the parties
an equal opportunity to address issues and
evidence presented to the tribunal. This right,
however, does not require the parties to be
represented equally, and unbalanced legal
representation can hamper the tribunals attempts
to ensure a level playing field.
20
Opportunity to Present its Case

Each party must be heard and given the
opportunity to respond to its opponents case.
This right, however, does not entail unreasonable
requests from the parties. Examples of such
requests are unreasonable adjournments and full
American style discoveries, which may be
disproportionately onerous to a party.
Assistance and Control by National Courts
National courts may be relevant at all stages of the
arbitral proceedings but are principally so at the first
and last stages, that is, pre-commencement and
post-award. At the pre-commencement stage, courts
may be requested to stay proceedings or deny
jurisdiction. Courts may also assist the parties in the
appointment of arbitrators and in the granting of
interim measures of protection to maintain the status
quo or prevent dissipation of assets.
Assistance in Composing the Arbitral Tribunal
Parties can request a national court to appoint
arbitrators on their behalf or usually on behalf of
the defaulting party. National arbitration laws
empower courts to assist parties in constituting
the arbitral tribunal. This happens where the
appointing mechanism fails or never existed. The
particular circumstances of an international
arbitration may affect the choice of the national
court to which such a request is addressed.
Control of Jurisdiction and Procedural
Compliance
Where a party is dissatisfied with the
determination of the tribunal, it can appeal to a
national court for a final decision on the question
of jurisdiction. Under some laws, the tribunal can
request the assistance of the courts in ensuring
compliance with certain procedural requirements.
An example is Article 27 of the Model Law, which
includes the power to summon witnesses, take
witness statements and produce documents in
aid of arbitration.

Recognition and Enforcement of Awards

At the end of the proceedings, the tribunal renders
a final award on the substantive issues in dispute,
with the losing party usually ordered to do or
refrain from doing something. The losing party can
voluntarily comply with the tribunal's order, but if
there is no spontaneous execution by the losing
party, the winning party may seek recognition and
enforcement of the award wherever the losing
party has assets against which enforcement
action is available. A party may also seek
recognition of the award without seeking its
enforcement, such as with a declaratory award or
to ensure that a finality of the award is achieved,
giving the issues a res judicata effect.
Questions
n Compare the powers granted to arbitrators under
the UNCITRAL Arbitration Rules and ICC Rules.
n What procedural issues might arise during an
arbitration?
n What interim measures can arbitrators grant? Are
they enforceable under the New York
Convention?
n Can you think of a situation in which the doctrine
of separability could not save an arbitration
clause?
n How would a claimant determine in which
national court it could request the appointment of
an arbitral tribunal if no law had been chosen to
govern the arbitration?
21

Chapter Five: Statements of Claim and Defence Pleadings
Chapter Five
Statements of Claim and Defence Pleadings
Understand the function and contents of written pleadings
Appreciate the use of other written statements in international
arbitrations
Introduction
Parties in international arbitration proceedings plead
their case by written statements. These written
statements contain accounts of facts relied on in
support of their claim or defence and the relief they
request from the arbitral tribunal.
Claim
The statement of claim1 may be contained in the
originating document (Request or Notice), but is more
often produced in a separate document after the
constitution of the arbitral tribunal. It contains the
factual history of the contractual relationship between
the parties and how the claim arose. It usually
contains allegations of wrongdoing against the
respondent, what the claimant wants the arbitral
tribunal to decide, and the relief requested. Supporting
documents or evidence may be annexed to the
statement. Article 23 of the Model Law recommends
that the statement of claim contain facts in support of
the claim, the points at issue and the relief or remedy
sought. Under Article 18.2 of the UNCITRAL Arbitration
Rules, the statement of claim should include (i) names
(descriptions) and addresses of the parties; (ii) a
statement of facts supporting the claim; (iii) the points
at issue; and (iv) the relief of remedy sought.
Comparison with Notice of Arbitration
The Notice of Arbitration notifies the other party to
the arbitration agreement (and arbitral institution, if
any) of the notifying partys intention to commence
arbitral proceedings. This notice may be referred
to as a request for arbitration under some
arbitration rules, for example Article 4 of the ICC
Arbitration Rules. An example of what should be
22
contained in a notice of arbitration is provided

under Article 3.3 and 3.4 of the UNCITRAL Rules.
The applicable rule or law will also usually contain
a provision on the time for submitting the
statement of claim. All other documents relied
upon to substantiate the allegations in the
statement of claim may be submitted with it2.
Defining the Claim and Issues
The claimant defines the claim in its statement of
claim and formulates what issues are in dispute.
These issues may be modified or amended either
by the claimant or arbitral tribunal after the
respondent has filed its defence. There may be
issues or claims that are admitted or agreed which
do not need to be determined by the tribunal.
Documentation and Offers of Evidence
Evidence on which the parties rely to substantiate
their claims or defence may be contained in
documents, plans, photographs, or any electronic
medium. These will need to be presented to the
tribunal. Experienced advocates strive to make
this presentation of the evidence as user-friendly
as possible by numbering, paginating and
arranging the material in bundles as appropriate.
Unlike many state courts, arbitral tribunals will
usually admit whatever relevant evidence is placed
before it (whether it is a copy or original) and then
decide on what weight to attach to such evidence.
The provisions of the IBA Rules of Evidence
contain very useful guidance in this regard3.
This may sometimes be known as a Statement of Case.
An example is Article 18.1 of the UNCITRAL Arbitration Rules.
These rules are available in fourteen languages at

http://www.ibanet.org/Publications/publications_IBA_guides_and_free_materials.aspx#takingevidence.


Defence
The statement of defence also contains facts
regarding the underlying transaction between the
parties and tells the story from the respondents view.
It specifically seeks to deny (or confirm) allegations
made in the statement of claim and may also raise its
own claims or counter-claims against the claimant.
Response to Claim
The statement of defence answers the allegations
or claims made against the respondent in the
statement of claim. The respondent submits the
statement of defence within the agreed time as
granted by the arbitral tribunal or provided in the
applicable arbitration rules. An example is Article
15.3 of the LCIA Arbitration Rules which provides
for the statement of defence to be sent to the
LCIA Registrar within 30 days from the receipt of
the statement of claim. The respondent may also
submit all other documents it relies on to
substantiate its defence or in repudiation of the
claims with the statement of defence.
Set-off or Counterclaim
The respondent may also have a claim against the
claimant or, in admitting the claim, demand a setoff against the claimant. The respondent is
permitted to make such claims for a set-off or
counterclaim in its statement of defence. It is a
form of consolidation of two possible proceedings
into one. The arbitration rules or applicable law
may establish conditions upon which a set-off or
counterclaim may be made. The respondent must
satisfy such conditions to properly bring its
application. An example is Article 19.4 of the
UNCITRAL Arbitration Rules.
Amendments to the Claim or Defence
The issue of whether to grant permission to amend
the statement of claim or defence is within the
exclusive power of the arbitral tribunal. The tribunal
exercises this power in its discretion, taking into
account its obligations to the parties and the principle
of due process. An example is Article 20 of the
UNCITRAL Rules which further provides that such
amendment may not be, in such a manner that the
amended claim falls outside the scope of the
arbitration agreement.
Timeliness of the Amendment or Supplement
The timing of applying for and the nature of the
amendment may be determinative of the fairness
of granting the application. The same
considerations will apply to applications to
supplement either the claim or defence. An
overarching consideration is the fact that any such
amendments must fall within the scope of the
arbitration agreement. Keeping in mind the
consensual origin of the arbitrators jurisdiction,
where an amendment raises new issues falling
outside the scope of the arbitration agreement,
the arbitral tribunal lacks jurisdiction over those
issues and they will have to be determined by
another arbitration or by a court.
Prejudice and Other Considerations
In deciding whether to grant an application to
amend or supplement a claim or defence, the
arbitral tribunal must consider the issue of due
process by giving each party an opportunity to
address it on whether to grant the request to
amend or supplement. This may be done in an
oral hearing or by written submissions, either of
which will culminate in a procedural order from the
tribunal. Where the parties all agree to the
amendment or supplement, there is no prejudice
nor can any allegation of lack of fair hearing be
sustained in attacking the final award. Where one
party opposes and is heard with a determination
made either way, the party cannot claim that it
was not heard. The arbitral tribunal protects its
award by ensuring that the parties are heard (or at
least have the opportunity of being heard).
Possible Imposition of Costs
In making any application before the arbitral
tribunal, the parties incur further costs for the
hearing and decision. The party opposing the
application can always ask for its costs to be
borne by the applying party. The tribunal may
grant such an application to balance the
inconvenience and interests of the parties. Such
interim costs may be awarded and reserved for
inclusion in the final award or granted immediately.
23

Further Written Statements

Parties can agree to the number of further written
statements but this is usually agreed with the arbitral
tribunal during the first preliminary meeting when a
timetable for the proceedings is agreed. Such further
statements may include replies, requests to produce,
closing statements, and briefs on legal authorities.
Requiring or Allowing Further Submissions
A party may apply to the arbitral tribunal to make
further oral or written submissions. Submissions
are usually written, especially after the close of oral
hearings. Where the other party opposes the
application, the tribunal will decide. The important
issue is to ensure that all parties are given the
opportunity to respond or simultaneously file
further submissions. This is to ensure that all
parties are treated equally and are given an
opportunity to defend allegations and claims
against them.
Fixing Time Limits for Submissions
The arbitral tribunal has an obligation to manage
the arbitral proceedings. In discharging this
obligation, the tribunal ensures that the interests of
the parties are balanced by ensuring that one
party does not unduly delay the proceedings and
that another party is not forced into an overly tight
time frame within which to present its case. With
all procedural issues, the key principles to observe
are those of due process or natural justice. The
tribunal agrees time schedules with the parties
within which various aspects of the proceedings
will be performed and documents submitted.
Such time limits are usually not set in stone and
can, for good reasons, be amended. In agreeing
to such time limits, the parties also commit to
complying with them.
24
Questions
n What are the advantages/disadvantages inherent
in submitting a full Statement of Case
simultaneously with (or as part of) the Notice or
Request for Arbitration?
n What should the arbitral tribunal do in the
following circumstances?
An application for amendment of the claim is

made after the close of hearings
An application to amend the statement of

defence is obviously made to delay the
arbitral proceedings
The amendment of claim or defence

introduces new issues not falling within the
scope of the arbitration agreement

Chapter Six: Organising the Proceedings
Chapter Six
Organising the Proceedings
Understand and appreciate the various procedural issues in
the organisation of an international arbitration
Introduction
This chapter examines some of the practical issues
encountered in organising arbitral proceedings. The
arbitral tribunal and the parties (and their lawyers) will
hold several meetings to agree on various procedural
issues at different times until after the closing briefs
have been filed and the arbitral tribunal takes time to
prepare its award. The preparation and organisation of
arbitral proceedings can be made by the parties or
their lawyers, in consultation with the arbitrators1. The
parties may also decide to leave such administrative
matters solely to the arbitral tribunal but by doing so,
they fail to take advantage of one of the benefits of
arbitration the opportunity to tailor the procedure to
suit their particular needs and preferences.
Parties can agree, even before constituting the arbitral
tribunal, necessary logistics for the arbitration
proceedings. This depends heavily on what past
arbitration experience the parties (and their lawyers)
possess. It also presupposes that the tribunal will
consent to conduct the proceedings in accordance
with the parties agreement. The more usual practice
is for the parties and tribunal to confer, either in person
or by teleconference, about the various procedural
issues which they anticipate, and the structure and
timing of each procedural step, bearing in mind the
value and complexity of the case and the availability of
parties, witnesses and the tribunal.
Upon constitution of the arbitral tribunal and where
parties have not made any arrangements regarding
the organisation of the proceedings, the tribunal will
make the necessary arrangements. The tribunal will
usually convene a meeting to consult the parties and
try to obtain consensus; failing this, it will issue a
procedural order informing the parties of its decisions.

By conferring with the parties, the tribunal assures
transparency and has the best chance to provide a
procedure suited to their needs. This also ensures that
the parties know what is expected of them and when
to perform, in addition to engendering congeniality
between the tribunal and the parties.
Possible Procedural Points
The UNCITRAL Notes on Organising Arbitral
Proceedings contain information on the logistics of
organising the proceedings and the various steps
necessary in their conduct. Questions may range from
whether an interpreter or site-visit will be needed, to
whether there will be a hearing at all, and if so, what
form it will take. The tribunal will draw up the timetable
of the proceedings including meetings, hearings,
exchanges of pleadings and site-visits. This will be
agreed (to the extent possible) with the parties and
communicated to them. If an amendment is required
due to changed circumstances, parties must all be
notified. Failing agreement, the tribunal will decide.
Deposits for Costs
At the beginning of the procedure, it is customary
for the tribunal or the arbitral institution to require a
deposit to cover all or part of the costs of the
arbitration. This is sometimes referred to as the
costs of the reference, and includes the tribunal's
remuneration and its travel and accommodation
expenses, the institutions administration fee (if
any) and other expenses that the tribunal may
incur in administering the proceedings. The
tribunal or institution will make disbursements for
administrative and other arbitral costs out of the
deposit paid and render an accounting at the end
Given that the parties to the arbitration may be represented by counsel at all stages of the proceeding, their presence may not be strictly required at
every stage (unless giving testimony, for instance) and the procedural details can be arranged by their representatives.
25

of the proceedings.
The Language of Proceedings
Where the parties have not agreed on the
language of the arbitral proceedings, the tribunal
will have to determine the language in which the
proceedings, documents and award will be made.
This is an important issue which ideally should be
determined at the very outset before the
constitution of the tribunal, since the working
language of the arbitration will influence the choice
of the arbitrators. If translators and interpreters are
required, either the tribunal or the parties (or more
likely their counsel) will need to make adequate
arrangements in good time. The ability to
communicate its case effectively is an issue of due
process and natural justice.
Place of Arbitration
The arbitration will be held in one or more
geographical locations. Where the parties have
not agreed on a juridical seat, the arbitral tribunal
will make that decision. The arbitral tribunal, in
consultation with the parties, will also decide
whether hearings and inspections will be
conducted in other locations. The location of
evidence, witnesses and convenience of both
parties and arbitrators will all be taken into
consideration in deciding on relocating the venue
of arbitral hearings.
Administrative Services
In ad hoc arbitrations, the tribunal and the parties
are responsible for the administration of the
arbitration. The tribunal can engage the services of
a secretary to assist with this administration. Such
administrative services can include booking
hearing rooms, arranging translators, interpreters,
court reporters and other secretarial services, and
booking accommodation and flights for the
arbitrators. Other duties of the tribunal secretary
may include research, translations, taking informal
minutes and, in some cases, creating first drafts of
orders or awards. The tribunal must take care,
however, not to delegate any of its legal duties, as
this could give rise to a challenge to the award on
the grounds that the procedure was not in
accordance with what the parties agreed.
26
Communications
This includes the form and means of transmitting
written communications between the parties and
the tribunal. Examples include numbered bundles,
couriers, and email attachments. The important
point to note is that whatever the form of
communication, this should be agreed with the
parties and included in the procedural directions
or orders. All communications between a party
and the tribunal must be copied to the other party
to avoid any perception of bias and to prevent any
allegation that the tribunal based its decision on
information to which one party had no opportunity
to respond. Each party and the tribunal will
confirm its address for correspondence and
undertake to notify all concerned of any change
during the course of the arbitration; failing which,
any correspondence sent to the address in the
agreement will be deemed to be received.
Appointment of Expert Witnesses
The parties and the tribunal will discuss whether
there is a need for expert witnesses. It is
customary for the parties to appoint their own
experts. They may also agree on the scope of the
investigation to be conducted and the issue of
expert witness conferencing or examination and
when their report will be due for filing with the
tribunal. The party-appointed expert witness is
paid by the appointing party (as part of its costs in
the arbitration) while the tribunal-appointed expert
is paid by the tribunal as part of the costs of the
arbitration. There are a number of methods for
putting expert testimony before the tribunal,
ranging from the classical examination-in-chief
and cross-examination to written statements in
lieu of examinations or joint reports.
Preparation for Hearing
It is the responsibility of the parties to ensure that
their witness statements are received by the
arbitral tribunal and other parties within the agreed
time and to ensure that their witnesses are
present at the hearing, if required. Each party pays
the witnesses it calls as part of its arbitration
costs. The tribunal ensures that it is prepared for
and present at the hearings. In the event of any

eventuality requiring the cancellation of the arbitral

hearings, the tribunal must ensure that parties are
notified of any cancellations or changes in venue
or time. Such cancellations or changes also affect
the costs of the arbitration.
Interim Measures of Protection and Security
for Costs
Arbitral tribunals are empowered under most laws
and rules to order interim measures of protection.
The 2006 amendments to the Model Law contain
extensive provisions about the powers of the
tribunal to make interim orders. Article 26 of the
UNCITRAL Arbitration Rules empowers the
tribunal to order various interim measures it deems
necessary in respect of the subject matter in
dispute. This ensures that a party can apply to
the tribunal for an interim measure of protection
over the subject matter in dispute. The tribunal
has the discretion to grant the order if it deems it
necessary to preserve the subject matter of the
dispute. Remember that arbitrators lack this power
in some jurisdictions (for example, Italy, Brazil and
Argentina) and the limitation to the exercise of this
power differs under various arbitration laws and
rules. To balance the interests of the parties, the
tribunal may request the applying party to post
security for the costs of the application.
Default Proceedings and Multi-Party

Arbitration
In conducting arbitral proceedings in the absence
of one party, the tribunal must be very careful in
ensuring that the absent party is not prejudiced by
the mere fact of its absence. Some arbitration
rules empower the arbitral tribunal to conduct
default proceedings in the absence of one party.
The relevant point here is to ensure that the
absent party has been duly notified of the arbitral
proceedings and all appropriate documents have
been communicated. Where the claimant is the
party in default, the arbitral tribunal will dismiss the
claim; the proceedings continue where the
respondent is in default.
In multi-party arbitral proceedings, the tribunal
must ensure that each party is heard and given an
opportunity to present its case. An important
element of multi-party arbitrations is in the
appointment of arbitrators.
Questions
n In an arbitration between a Ukrainian employer
and a Hong Kong contractor, with the seat in
Singapore, the tribunal is composed of a French
lawyer, a Hong Kong lawyer and an English
quantity surveyor. The Hong Kong contractor
insists on full discovery, while the Ukrainian
party says that such disclosure is not the rule in
its country and it should not be forced to produce
documents that might harm its case. The
Ukrainian party maintains that it is up to the
claimant to prove its case and it is not going to
help it do that. The parties agree that a 10-day
hearing will be necessary. The tribunal thinks that
given the relatively low value of the claim and
counterclaim, this length is excessive. Draft a
procedural order that could be acceptable to
both parties.
27

Chapter Seven: Hearings
Chapter Seven
Hearings
Understand the relevant issues and stages in arbitral hearings
Understand the requirements of natural justice
Introduction
Some arbitration proceedings are conducted on the
basis of documents only, without any oral hearings. To
eliminate the hearing stage, parties under most
arbitration laws and rules will have to contract into a
documents-only proceeding. The norm is to hold an
oral hearing phase where witnesses of fact and
opinion (expert witnesses) are heard and the veracity
of their testimony may be tested by both the other
party and the arbitral tribunal.
dispute is of high-value or complex, it is usual to

obtain a verbatim transcript by a court reporting
service. Today, this may involve using a computer
programme which produces an immediate on-screen
record that can be highlighted and searched by
counsel and the tribunal. The arbitral tribunal
Logistical Matters
In an ad hoc arbitration, the parties and tribunal will
decide on where the hearings and further meetings
will be held. The parties or the tribunal may book the
hearing rooms as appropriate. The administrative
facilities of an arbitration institution may equally be
used. In institutional arbitrations, the institution
typically arranges these administrative matters. Usually
in two-party disputes, at least four rooms are booked:
the room where the hearing will take place, one room
for each party and one for the tribunal for private
meetings. In the hearing room, the seating arrangement
is organised with the tribunal sitting at one end of the
table and the parties on either side. Seating may be in
a conference or meeting style, whatever is convenient
for the parties and the arbitral tribunal along with the
number of people on either side1.
Where the language of the arbitral proceedings is

foreign to one or more parties or to an arbitrator, and
the services of translators or interpreters is requested
and granted, the arbitral tribunal should make
directions as to which of the parties will bear the
additional costs incurred by the translation and
interpretation3.
Where the parties and tribunal have engaged the

services of a court reporter, a record of the hearings is
produced at the end of each hearing day, crosschecked by the parties and the tribunal. The tribunal
takes its own notes, (perhaps assisted by the tribunal
secretary) as do the parties and their lawyers. If the
28
maintains custody of the documents and exhibits

presented and admitted by it during the proceedings.
Unless a party requests otherwise, those materials are
disposed of once the award has been rendered2.
Procedures at the Hearing

Sequence of Oral Arguments and Taking of
Evidence
The parties and tribunal will agree on the
sequence of oral arguments and the taking of
evidence. The claimant is usually heard first in an
opening speech, with the respondent replying.
These opening speeches give a summary of the
issues in dispute and what is claimed or denied. In
some cases, these speeches are submitted in
writing, and the opening remarks of counsel
limited to half an hour or so. If the respondent is
raising a preliminary objection, the tribunal will
likely want to hear the respondents application
and the claimants reply on the procedural issue
before evaluating the merits of the case4.
See UNCITRAL Notes, Paragraphs 24-25.
See UNCITRAL Rules, Article 25.3
See Article 22.2 of the Model Law, Articles 17.2 and 25.3 of the UNCITRAL Rules, and paragraphs 18-20 of the UNCITRAL Notes.
Keep in mind that the tribunal can reserve its ruling on a procedural issue such as whether it has jurisdiction over a party until the end of the
proceedings.

The claimant calls each witness of fact and

examines them, after which the respondent crossexamines each witness. The claimant then gets
another opportunity to re-examine each witness.
When the claimant closes its case, the respondent
opens its own case and presents its own
witnesses. The claimant cross-examines each
witness and the respondent re-examines
thereafter. Where witness statements are filed, the
parties and the tribunal can agree that such
statements will stand as the examination-in-chief,
which saves time. After the examination of the
witnesses of fact and expert witnesses (if any), the
parties may make closing speeches, with or
without post-hearing briefs which they submit
shortly after the end of the hearing. These are, of
course, communicated to both the tribunal and
the other side simultaneously and may be filed
consecutively or sequentially. The tribunal then
closes the hearing stage of the arbitral
proceedings. After this point, no further
submissions or evidence are permitted unless the
tribunal itself requires it.
Testimony of Witnesses
The fact witnesses tell the story of the transaction
within their knowledge in their witness statements.
It is common in some jurisdictions for the parties'
lawyers to assist these witnesses in preparing their
statements. There is a cultural divide in this
respect between civil and common-law traditions.
In the civil law tradition, lawyers generally do not
assist witnesses in preparing their statements, as
this is considered tampering with the witness.
Different jurisdictions also have differing views on
whether a party should be allowed to testify, and
whether witnesses (including parties who testify)
should be allowed in the hearing room while
others are giving evidence5.
Expert Witnesses
Expert witnesses can be appointed both by the
parties and the arbitral tribunal. It is presumed that
a party-appointed expert witness supports the
case of the appointing party. This explains why
such evidence is tested by cross- examination. A
tribunal-appointed witness, on the other hand, is
independent of the parties and files his report with

the arbitral tribunal, with each party having an
opportunity for cross-examination. The tribunal
can also ask the expert witness questions. The
tribunal is not bound to accept the evidence of the
expert witness. Such report assists the arbitral
tribunal in determining the issues in dispute, but
the decision on the liability of the parties must
always be made by the tribunal6.
Presentation of New Arguments or Evidence
As the arbitral hearing progresses, parties may
come upon new information or evidence which
may materially affect their case. The party would
then need to apply to the tribunal, putting the
other party on notice, for permission to admit
such evidence. The guiding principle in such
matters is ensuring that parties are heard and
treated equally. In deciding whether to admit new
evidence, the tribunal will have to weigh the
advantages of allowing it in against the potential
detriment to the other party and its ability to
respond to the new material.
Default of a Party
Where the claimant is in material default, for
example by not continuing with the claim, the
arbitral tribunal can dismiss the claim. Where the
respondent is in default, however, such as by not
continuing with its defence, the tribunal will
continue with the proceedings and make an
award in default. Again, the only caveat to such
proceedings is ensuring that the defaulting party
has been duly notified of the hearing and all
communications in the proceedings and given the
opportunity to defend itself. Unlike common-law
courts, there is usually no possibility of the tribunal
issuing a summary award which would effectively
treat the claimants submissions as unopposed by
the other side, and the claimant will be required to
prove each element of its case in order to obtain
an award.
Multi-Party Arbitration
The classic claimant/respondent structure of
arbitrations is the norm, mainly because of the
contractual nature of most arbitrations. In some
circumstances, however, there are multiple
See Article 4 of the IBA Evidence Rules, and paragraphs 59-68 of the UNCITRAL Notes.
See Articles 5-6 of the IBA Evidence Rules, and paragraphs 69-73 of the UNCITRAL Notes.
29

claimants or respondents, and their interests may

not be identical. There may also be situations
where parties to different contracts (with or
without compatible arbitration clauses) are
implicated in the arbitral proceedings. Once the
tribunal has been successfully constituted, it has
to effectively manage the proceedings again,
ensuring it has jurisdiction over all those parties
and the issues they present, and that all parties
get equal treatment and the opportunity to present
their cases.
Fundamental Requirements of Justice
All procedural matters are subject to any mandatory
procedural provisions of the law of the seat of
arbitration and the rules of natural justice. Sometimes,
the question is whether an issue is procedural or
substantive. What about a statute of limitations, for
example? Different legal systems have different
answers.
Questions
n A Moroccan owner is suing an English contractor
for damages resulting from the late completion of
a construction project in Casablanca, as well as
for faulty electrical installations which caused a
fire to the uncompleted premises. Because of the
problems, completion was delayed for two
months and the owner lost two months of rent.
The English contractor responds with a
counterclaim for unpaid invoices, and defends by
saying that the delays were due to errors in the
plans prepared for the owner by its Italian
designer, and because the owner changed its
mind several times about the finishings of the
building, requiring many phases to be repeated.
The electrical system was installed by a Tunisian
sub-contractor who was imposed on the English
contractor despite his objections, and who the
contractor considers to be inexperienced and
incompetent.
What administrative arrangements are going to
be needed for the arbitration? What procedural
issues do you anticipate?
30

Chapter Eight: Costs and Interest
Chapter Eight
Costs and Interest
Understand what constitutes an arbitral "cost" and how it is measured
Understand the basis for interesting being be awarded in an arbitration
Introduction
The issue of costs of the arbitration is regulated by
most arbitration laws and rules. However, most of
these do not stipulate details of these costs but simply
list what expenses are included.
Costs of Arbitration
Constituent Costs
The UNCITRAL Rules1 declare that, the arbitral
tribunal shall fix the costs of arbitration in its
award. The costs of arbitration include:
Fees and reimbursable expenses of the

arbitral tribunal
Administrative costs of the arbitral

proceedings
Fees paid to the arbitration institution or

appointing authority
Cost of expert advice or assistance required

by the arbitral tribunal
Legal costs of winning party if claimed during

the arbitral proceeding
Request for Deposits

Parties in both institutionally-administered and ad
hoc arbitral proceedings are usually required to
make deposits toward the cost of the arbitration,
either immediately after the commencement of the
proceedings or upon constitution of the arbitral
tribunal. Under institutional arbitrations, each
institution maintains a scale of fees or basis for
how fees are calculated in its rules or on its
website. These are incorporated into the parties'
arbitration agreement. The parties pay the arbitral
institution, which then pays the arbitrators. Some

institutions expressly forbid arbitrators from
discussing fees directly with the parties while others
expect arbitrators to award fees to themselves in
their award, as in ad hoc arbitral proceedings. They
also agree on the amount and the time deposits
should be paid into the arbitral tribunals account,
maintained for purposes of the arbitration2.
Fixing the Amount of Costs
In an institutional arbitration, the relevant institution
fixes the costs of arbitration and collects the sums
due from the parties for disbursement. In an ad
hoc arbitration, the tribunal fixes the costs of the
arbitration (in some cases, in consultation with the
appointing authority), sets up an account, makes
demands for deposits and further payments from
the parties and makes disbursements from the
account. At the conclusion of the proceedings, the
tribunal produces a statement of account to the
parties, refunding any excess monies paid or
demanding any outstanding sums due. Where a
party disputes the rate of fees or charges of the
arbitrators, such sums may in some jurisdictions
be assessed or taxed by an officer of the court3.
Apportionment of Costs Who Pays, How
Much?
The parties may agree on how arbitral costs will be
apportioned between them. In some jurisdictions,
this type of agreement is valid only if made after
the dispute arises. The parties in their pleadings
will usually claim the costs of the arbitration as
well as their legal costs for prosecuting the
arbitration. If the parties have not agreed, and
See Articles 38-39. See also Article 37.1 of the ICC Rules, Article 28 of the LCIA Rules, Articles 38-39 of the Swiss Rules, and Article 37.1 of the
HKIAC Rules.
See, for instance, Article 41 of the UNCITRAL Rules, paragraphs 28-30 of the UNCITRAL Notes, Article 37 of the ICC Rules, and Article 24 of the
LCIA Rules.
See Articles 39 and 41.5 of the UNCITRAL Rules.
31

sometimes even when they have, the tribunal may

need to apportion the costs. Although the tribunal
has discretion in the apportionment of costs, the
usual practice in international arbitration is to
apportion costs at least to some extent between
the parties, on the basis that costs follow the
event; meaning that the successful party recovers
its costs from the losing party. Exceptions to this
custom may include reprehensible conduct by a
successful party, acting in bad faith, or
unreasonably lengthening or complicating the
proceedings. The award of costs is primarily left to
the discretion of the arbitral tribunal which will
justify its decision as part of its reasoned award4.
Interest
Arbitrators can award interest on any claim for
compensation or restitution awarded. The parties can
agree on the rate and basis of interest to be awarded
by the tribunal as a term of the main contract. In some
jurisdictions, the award of interest is treated as a
procedural issue while in others, it is treated as a
substantive issue. When the issue is treated as
procedural, the law applicable to the arbitration (the
law of the place of arbitration) will determine whether
the arbitrators can award interest and, if so, what the
rate of interest will be. If the issue is seen as a
substantive matter, the law applicable to the merits of
the dispute (the law of the contract) will determine the
issue. The rate of interest, start and end dates and
currency of payment are left to the discretion of the
arbitral tribunal under most national laws. Tribunals
may award interest from the date on which the cause
of action arose until the date of the award, if it has
been claimed, or only from the date of the award to
the date of payment of the award. The arbitral tribunal
typically invites submissions from the parties on these
matters just before the close of the proceedings. The
award of interest is to compensate the successful
party for the loss of its use of the money - not to
penalise the unsuccessful party.
It is more likely that a party will receive pre-award
interest if the amount awarded was a liquidated sum
or specific debt clearly due at a precise date. Interest
may be awarded as a general right accruing against
32
the party in breach. Post judgment interest

encourages the paying party to execute the award
promptly so as to avoid increasing its obligation to the
winning party. The power to award interest is usually
granted either expressly by the parties in their contract
or arbitration agreement or by applicable arbitration
rules and laws. The arbitral tribunal might decide that
compound rather than simple interest is justified either
because the parties have agreed to it, or because of
the circumstances of the case.
The parties may agree the rate of interest to be
applied by the arbitrator; it may be imposed by
statute; or the arbitral tribunal may determine the rate
on the basis of the circumstances of the case.
Different rates of interest may apply to different stages
of the time frame. The rate of post award interest is
sometimes the same as the rate that applies to
judgments of court at the place where the award was
made. However, it is important that the tribunal
choose a rate of interest that is suitable to the
currency in which the award is made. The arbitral
tribunal must justify the basis of the rate of interest
awarded as part of its reasoned award.
Simple interest refers to a percentage rate calculated
on the principal sum while compound interest is the
capitalisation of interest and further interest accrued
on the capitalised interest. Generally, in civil law
jurisdictions, arbitrators award a statutory, legal or
simple rate of interest while in common law
jurisdictions, the arbitrator is more likely to award
compound interest. There is no settled practice: the
tribunal will exercise its discretion subject to the
mandatory provisions of the law of the place of
arbitration. In awarding interest, the arbitral tribunal will
determine when the interest starts to accrue. It may
start from the date of the cause of the action or some
defined time thereafter, until full payment.
The arbitral tribunal must ensure that the basis on
which interest is awarded is reasonable and clearly
justified in order to assist the reviewing court. In Sharia
law jurisdictions where an award of interest is
prohibited, the arbitral tribunal must comply with that
restriction. The arbitral tribunal can, in such
circumstances, separate the award of interest from
See Article 40 of the UNCITRAL Rules. It is important to note, however, that the rule of "costs follow the event" is not always fully applied. In a recent
NAFTA investor-state arbitration brought against the United States, the tribunal found that, due to the novel nature of the arguments raised by the
claimant (which lost), it was appropriate to apportion only two-thirds of the winning party's costs.

other parts of the award, or find some other

justification for reimbursing a party for the losses
incurred from not having been paid at the rightful time.
Questions
n How would you apportion costs between the
parties in the scenario at the end of Chapter
Seven?
n What factors might influence an arbitral tribunal
to award compound interest rather than simple
interest?
33

Chapter Nine: The Making of the Award
Chapter Nine
The Making of the Award
Understand the arbitrator's decision-making process
Understand the content and formal requirements for a valid award
Introduction
The arbitrator is contracted by the parties to make a
binding decision over their dispute for a fee. This
decision of the arbitrator is contained in a document
called an award. The decision-making mechanism in
arbitration is examined in this chapter.
Awards and Other Decisions
The arbitral tribunal makes decisions about various
issues, both procedural and substantive. These decisions
may be contained in an award, order, or direction.
Procedural Orders
These are orders, rulings or directions made by
the tribunal over procedural matters on how the
arbitral process is managed and organised. The
tribunal may need to issue several procedural
orders or directions at various stages of the
arbitration. These evidence the decisions made to
move the arbitral process forward. In making
procedural orders, the tribunal must always be
aware of the fundamental necessity for fair and
equal treatment of parties.
Interim Measures of Protection
As previously mentioned, arbitral tribunals are
empowered to grant interim measures of
protection to varying degrees. The orders may be
described as an interim order or award. Orders
are not determinative of the issues in dispute
between the parties but are to maintain the status
quo and further the arbitral process.
Awards
An award may be interim or interlocutory, partial or
final. An award is a decision on a substantive
issue between the parties. The interim or
34
interlocutory award does not finally dispose of the

issues in dispute while a partial award is a final
determination of one or more of the substantive
issues in dispute. A final award is the last award
that finally determines all or the remaining
substantive issues in dispute between the parties.
Sometimes a tribunal will issue a partial award
which determines all the issues between the
parties except for costs, with the final award then
incorporating the partial award and the award on
costs in a single document for enforcement
purposes.
Rules Applicable to the Merits
The tribunal usually must decide the issues between
the parties on the basis of the governing law of their
contract. A rare exception is where the parties have
mandated the tribunal to decide the dispute on the
basis of fairness or without reference to law, as an
amiable compositeur or ex aequo et bono.
Choice of Law
Where the parties have made an express choice in
their contract, then the arbitral tribunal must apply
the law chosen by the parties. If the parties have
not made any choice or their choice does not
cover all the issues in dispute, then the tribunal
has to choose the law by which it will decide the
dispute. In some systems, the tribunal must use
the conflict of law rules of a given jurisdiction; in
others (for example, ICC Rule 21.1), the tribunal
can choose directly the system of law that it
considers most appropriate. In both situations, the
arbitral tribunal might need to decide which law or
rules of law should apply to fill gaps in the parties
agreement or their chosen rules1.
Please note that "law" is meant here to refer to a body of national law, whilst "rules of law" refers to non-national laws, standards or principles.

Amiable Compositeur
Under some international contracts, the parties
expressly agree not to apply a body of law or rules
in determining their contractual rights and obligations,
but empower the tribunal to decide their dispute
on the basis of what is fair and just. The arbitrator
would not need to justify this decision on the basis
of any law but solely on a perception of what is fair
between the parties2.
Relevance of Contract and Trade Usage
The UNCITRAL Rules provide that in all cases,
the arbitral tribunal shall decide in accordance with
the terms of the contract and shall take into
account the usages of the trade applicable to the
transaction. Even where the parties have made
an express choice of national law or rules, the
arbitral tribunal is mandated to interpret the
contractual provisions and to apply whatever trade
usages are relevant to the transaction. These trade
usages clarify and verify the contract terms being
usages within the relevant industry.
Decision-Making by the Panel of Arbitrators
An arbitral tribunal may consist of a single or multiple
arbitrators to decide the dispute. In arbitral tribunals
with more than one arbitrator, the arbitrators discuss or
deliberate the issues and make their decision. A sole
arbitrator does not need to deliberate with anyone in
making a decision. In either case, each arbitrators
decision is personal and cannot be delegated to
another arbitrator.
A panel of three arbitrators meet after the closure of
the proceedings to discuss and decide the issues. It is
at such deliberations that party-appointed arbitrators
may play a very important role in ensuring that the
tribunal understands and appreciates the case of its
appointing party. There is no rigid rule about drafting
the award. The president may circulate a first draft as
the basis for discussion. Alternatively, the tribunal may
divide up the work with each arbitrator drafting the
decision on one or more of the issues. The tribunal
may assign the member whose native language is the
language of the arbitration to write the final version of
the award. The presiding arbitrator plays an important
role at this stage and, under some systems, receives a
larger portion of the fees than the co-arbitrators to
reflect this extra effort.

In an arbitral tribunal of three or more arbitrators, if
unanimity is impossible, a decision by a majority is
accepted as the decision of the tribunal. The
dissenting arbitrator may decide to write a dissent
which might, in some systems, be attached to the
majority opinion. Most laws and rules do not allow
such attachments. One of the major advantages of an
odd-numbered tribunal comes into play where there is
a tie and the presiding arbitrator has to exercise a
casting vote. Such a vote automatically creates a
majority decision for purposes of the award of the
arbitral tribunal. Under ICC Rules, where there is no
majority, the presidents vote will decide the issue3.
Exceptions for Questions of Procedure
Decisions on procedural issues assist the conduct
of the arbitral proceedings and are not decisions
on the parties' substantive disputes. Arbitration
laws and rules often recognise and empower the
presiding arbitrator (or one of the arbitrators)
where the whole tribunal is unable to meet, to hold
procedural hearings and to make procedural
decisions in the name of the tribunal. These
decisions will be binding on the other members of
the tribunal4.
Confidentiality of Deliberations
In contrast to the earlier phases of the arbitration,
which are private but not necessarily confidential, the
tribunal's deliberations are confidential and not
divulged to third parties.
Content of Award and Formal Requirements
It is important to determine what law governs the
validity of the award so as to ensure that the final
award complies with its requirements. It is most likely
that the final award will be a Convention award, thus
the requirements of the New York Convention provide
the benchmark for compliance.
Holding and Reasons on All Claims
The final award determines all substantive issues
in dispute between the parties not already decided
in a partial award. Unless the parties have agreed to
dispense with reasons, the award must be reasoned
and dispose of all the issues submitted to the
tribunal, but none that have not been submitted.
See, for instance, Article 28.3 of the Model Law, Article 33.2 of the UNCITRAL Rules, and Article 21.3 of the ICC Rules.
See Article 31 of the ICC Rules.
See Article 31.2 of the UNCITRAL Rules.
35

Consent Award
During the arbitral proceedings before the final
award is issued, the parties may agree to a
settlement of their dispute. The terms of their
agreement may be adopted as an award by the
arbitral tribunal. By endorsing the agreement of
the parties, the arbitral tribunal gives it the same
force as an award made by the tribunal. Consent
awards are also known as awards on agreed
terms. An arbitrator is not obliged to sign a
consent award, and in some cases may have
good reasons for not doing so.
Written Form
The award must be in writing. The parties need a
record of what the arbitrators have decided, what
they have been ordered to do and what they have
been awarded. Where the award is not voluntarily
complied with and enforcement is sought before a
national court, the contents of the award record
for the enforcing court what the arbitrators have
decided and the reasons for their decision. Where
the award is challenged by one of the parties, the
court will need to read the award to determine
whether one of the conditions for sustaining such
challenge has been satisfied and how it will
exercise its discretion.
Date and Place of Award
The award must be dated and state the place
where it was made. The place of origin of the
award is necessary in determining whether it is a
Convention award under Article 1 of the New York
Convention. The dispositive part of the award
takes effect from the date on the award. If any
limitation period applies to enforcement, setting
aside or nullification of the award, that time begins
from the date of the award.
the absence of the third signature.

Delivery to Parties - Publication of the Award
After the award has been written, signed and
dated, it must be published and delivered to the
parties. Certain obligations begin to run from the
date on the award and not from the time the
award is delivered to the parties. This makes it
imperative that the award is delivered to the
parties immediately.
Under some institutional arbitration rules, the draft
award must be scrutinised and approved as to
form before it is signed by the tribunal and
published. Under some arbitration laws, the award
needs to be registered with the local courts before
becoming effective and ready for delivery to the
parties. It is for the arbitrator to check and comply
with whatever pre-conditions are necessary for the
delivery of its award.
Limits to Publication of the Award
An award is a private document of the parties until
it enters the public domain before a national court.
Some arbitration institutions publish sanitized
awards from proceedings, with the consent of the
parties. In arbitrations that affect the public,
especially where a state or state entity is a party
(notably in investment arbitrations), a case may be
made for the need to publish the awards for public
interest purposes. Parties still need to consent to
most such publications. The consent may be an
umbrella consent contained in the enabling
statute, applicable rules or treaty5.
Signatures of the Arbitrators

The award contains the decision of the arbitrators;
their signatures verify that the contents of the
award emanate from them. Their signatures also
signify the completion of their mandate from the
parties and their entitlement to any outstanding
fees owed by the parties. On rare occasions, an
arbitrator will refuse to sign an award. In that case,
the remaining two arbitrators will sign and explain
5
36
See http://www.state.gov/s/l/c3439.htm for a listing of awards made under the NAFTA investor-state arbitral regime.

Correction, Interpretation, Addition

These are actions taken on the award after it has been
delivered to the parties. Other than these, once the
tribunal has published its award to the parties, it is
functus officio meaning it has no further power to
deal with the dispute.
Correction of Clerical Errors
A party to the proceedings may apply, within the
time allowed in the rules or law, to the tribunal (or
institution), on notice to the other party, for the
tribunal to correct any errors in computation, or
errors of a clerical or typographical nature. The
arbitral tribunal shall make such corrections in
writing.
Interpretation of Award
A party to the proceedings may, within the time
allowed by the relevant rules or laws and on notice
to the other party, request the tribunal to give an
interpretation of the whole or a portion of the
award. The interpretation shall be given in writing
and form part of the award. Most arbitrators are
very sceptical about these requests, which
frequently amount to nothing less than a request
by an unhappy party for a different decision.
Additional Award
A party to the proceedings may, within the time
allowed by the relevant rules and law and on
notice to the other party, request the arbitral
tribunal to make an additional award on claims
presented and argued in the arbitral proceedings
but omitted in the award. The party cannot use
this mechanism to raise new issues not put before
the arbitral tribunal during the arbitral proceedings.
Any such additional award must comply with all
formal requirements for a valid award6.
Questions
n How would you determine the law to apply to the
merits of a dispute in the case at the end of
Chapter Seven?
n Draft an outline of an award, ensuring that it
contains all the necessary elements for
enforcement.
See Article 33 of the Model Law and Articles 35-37 of the UNCITRAL Rules.
37

Chapter Ten: Recognition and Enforcement of the Award
Chapter Ten
Recognition and Enforcement of the Award
Assess the conditions for recognition and enforcement of an award
Identify the relevant forum (or fora) for enforcement purposes
Understand the grounds for recourse against an award
Introduction
At the conclusion of the arbitral proceeding, the final
award is delivered to the parties. The losing party may
opt to comply voluntarily with the award
(spontaneous execution), but if this fails to occur, the
winning party will need to seek the assistance of a
national court to recognise and enforce the arbitral
award. On the other hand, the losing party may seek
the assistance of national courts to set aside or nullify
the arbitral award.
Recourse against an Award
A losing party does not need to wait for the winning
party to seek recognition and enforcement before
challenging the award, but can challenge the award to
nullify it or set it aside in whole or in part. In an application
to set aside, a court may suspend its own proceedings
to allow a tribunal to cure the defect and thus
eliminate the grounds for setting the award aside1.
Appeal and Other Recourse
Most arbitration rules provide that an arbitral award
will be final. This means that to the extent they are
legally able to do so, the parties renounce their
right to appeal the award. Nevertheless, all national
arbitration laws provide some limited and exhaustive
grounds of recourse against awards made in
international proceedings. There may be recourse
to an internal review mechanism in the arbitration
rules (for example, ICSID) or to a competent court.
The traditional reference in civil law jurisdictions is
to have recourse to a court of law against an
award. The Model Law refers to recourse against
an award. Whatever the terminology, the goal is
the same: to challenge the award in the hope it
will not be recognised and enforced.
38
See Model Law Article 34(4).
Setting Aside the Award

By setting aside an award, the competent court at
the seat of arbitration declares that the award is a
nullity and is to be disregarded in whole or in part.
The expectation is that other courts will treat the
award as invalid and unenforceable. However,
there are a number of cases where the courts of
one country have recognised and enforced an
award even after it was set aside by a court in the
jurisdiction where it was rendered. This apparent
anomaly stems from the permissive language of
the New York Convention, which states that a
judge who finds that grounds exist may refuse
recognition and enforcement. A judge in one
country may find that a judge in another country
has wrongly set aside the award, and so proceed
to enforce it nonetheless.
Time Period
Each law provides the time period within which an
applicant seeking to challenge the award may do
so. It is for the applying party to ensure that its
application is within time. Time usually begins to
accrue when the award has become final in the
sense that there is no internal appeal system or
remission by a court.
Grounds for Setting Aside
The grounds for setting aside an award are similar
to the grounds for refusing recognition and
enforcement under the Model Law and New York
Convention. The grounds for setting aside an
award under Article 34 of the Model Law are
grouped into two broad categories of jurisdictional
and procedural issues.

Jurisdictional Issues
between the parties (res judicata).
Incapacity of a party to the arbitration

agreement
Arbitration agreement invalid under the law

which the parties have chosen, or if no such
choice, under the law of the state where the
award was made
Recognition and Enforcement

In some jurisdictions (e.g. Brazil), an award must
be recognised in the first instance (by one court)
and enforcement granted in the second instance
(and possibly by another court). In most
jurisdictions, both orders are granted at the same
time by the same court.
Decision was on dispute outside the scope of

arbitration agreement or fails to deal with all
issues submitted by the parties to the tribunal
Composition of arbitral tribunal or arbitral

procedure not in accordance with the parties
agreement, or in breach of a mandatory
provision of law
Lack of objective arbitrability
Award in conflict with public policy of the

state.
Formal Requirements
The applying party makes a written application for
recognition and enforcement before the
competent court and supplies the following
documents in support of its application:
Authenticated original award or a duly certified

copy
Original arbitration agreement or a duly

certified copy
Certified translations if the award or arbitration

agreement is not in the official language of the
state where recognition and enforcement is
sought
Any necessary court fees.
Procedural Issues
Lack of proper notice of the appointment of

the arbitrator or arbitral proceedings or a party
was otherwise unable to present its case.
Remission of the Award

Arbitral awards may be remitted back to the
arbitral tribunal to cure a defect which might
otherwise cause a court to set aside the award.
Recognition and Enforcement
The losing party may comply with the award
voluntarily or negotiate with the winning party with a
view to complying with the award. Informal studies
indicate that the majority of awards are voluntarily
complied with since, under most arbitral rules, the
parties bind themselves contractually to comply with
the resulting award2. Moreover, where the losing party
fails, neglects or refuses to voluntarily comply, it can
be compelled by law to do so.
Recognition
A party may choose to seek only recognition of
the award, such as a declaratory award
determining the issues in dispute between the
parties. Recognition of such an award may be
sought for finality regarding the issues determined
2
The Model Law does not contain a time period

within which the winning party may apply for
recognition and enforcement. The award
represents a debt due and should be subject to
whatever limitation periods apply in the relevant
jurisdiction. These periods may vary from as short
as three months to an unlimited time, according to
the statute of limitation in the country where
enforcement is sought. Parties anticipating
enforcement proceedings must take care to
complete their application process within the
necessary time. This can be difficult in cases
where, for example, an award of several hundred
pages must be translated before the application
can be filed to enforce it.
Grounds for Refusing Recognition and
Enforcement
The losing party can challenge the recognition and
enforcement of an award by way of defence to the
application. An award will ordinarily be recognised and
For example, see ICC rules Article 22.5.
39

enforced unless the losing party can prove any of the

grounds for refusing the recognition and enforcement.
Where one or more of the grounds is proved by the
losing party, the enforcing court will exercise its discretion
in deciding whether to enforce or nullify the award.
Incapacity of Party
Parties to any contract must have capacity to
enter into that contract. The same applies to
arbitration agreements. If a party lacks capacity to
enter into the arbitration agreement, this
incapacity can be raised at the very beginning or
in challenging the award as affecting the validity of
the agreement. For individuals, the governing law
is their personal law while for corporations it is the
law of its place of incorporation. States and state
entities may be restricted by their law from
concluding arbitration agreements.
Lack of Valid Arbitration Agreement
The arbitration agreement must meet any formal
validity requirement imposed by law, including
those imposed by Article II of the New York
Convention. The agreement should be in writing,
clearly state the parties intention to finally resolve
all (or any) resulting disputes between them by
arbitration. Modern arbitration laws have recognised
various forms of writing which can fulfil this
requirement, including exchanges of correspondence, emails, and reference to extra-contractual
documents containing an arbitration clause3.
Violation of Due Process
Due process or natural justice represents the
minimum procedural standards for fair and proper
conduct of arbitral proceedings. This ensures that
parties are given a fair hearing with the opportunity
to present their case and respond to the case of
their opponent(s). It also involves giving the parties
the opportunity to attend any sittings, be present
at the taking of evidence, be represented or
assisted by a representative of their choice, and to
see and comment on all materials placed before
the arbitral tribunal. The tribunal must not base its
decision on any evidence or argument that the
parties have not had an opportunity to address.
40
Arbitral Tribunal Exceeding its Authority

Where the arbitral tribunal exceeds its authority, it
acts without power or authority and so falls outside
the scope of the parties agreement. The award
may be set aside to the extent of such excess of
authority, except where it affects the whole award.
Irregular Composition of the Tribunal and
Irregular Procedure
The composition of the arbitral tribunal and the
procedure adopted by the arbitral tribunal must
comply with the parties arbitration agreement or,
if the agreement is silent, with the lex arbitri.
Examples of irregularity are where the arbitrator
does not fulfil any particular qualifications expressed
in the arbitration agreement, or renders an award
without reasons. Whatever the parties agree to is
always subject to the mandatory provisions of the
law of the seat of arbitration; this implies that the
arbitral tribunal may disregard the parties
agreement in favour of such a mandatory provision.
Award Not Binding or Set Aside
If the period for recourse against an award has not
yet run, or the award has been set aside or
nullified by the competent court at the place of
arbitration, a court may refuse to enforce it.
Non-Arbitrable Subject Matter
The subject matter of the dispute must be capable
of resolution by arbitration under the law of the
seat of arbitration. All states reserve certain
matters for resolution by its national courts. These
usually involve issues of status or the relationship
of a person with the state. The list of non-arbitral
matters is shrinking, however, as more and more
courts acknowledge the competence of arbitral
tribunals to decide disputes which the disputing
parties could have settled by negotiation. For that
short list, however, it would breach a states public
policy principles to arbitrate these non-arbitrable
issues. Examples of non-arbitrable disputes are
disputes regarding the validity of patents and
trademarks, tax disputes between citizens and
government, changes to personal status such as
divorce and adoption, and criminal matters. Almost
without exception, commercial matters are arbitrable.
The Model Law Article 7 as amended in 2006 offers two options for defining the arbitration agreement. The first contains a very liberal definition of
writing, while the second does not require writing at all.

Violation of Public Policy

Generally, public policy refers to principles which
are fundamental to the legal or economic system
of any given state. A breach of such a principle is
a violation of the states public policy. Different
states have different concepts of public policy, so
an act that breaches the public policy of one state
may not breach that of another state. Some
commentators have called for a very restricted
harmonized definition of international public policy
principles to apply to international commercial
arbitrations. This narrow interpretation of
international public policy would include universal
principles of fundamental rules of natural law and
justice, such as fair and equal treatment of parties,
and the right of a party to present its case before
a neutral judge.
Suspension of Enforcement Proceedings and
Order of Security
On the application of a party, the competent court
may suspend the setting aside proceedings for a
period of time stated in the suspension order, and
remit the award back to the arbitral tribunal to cure the
grounds for the setting aside application. This
obviously has a bearing on what ground was raised.
Where it is a ground alleging lack of jurisdiction,
validity of the award, due process, non-arbitrability or
public policy, it may not be curable. However, if the
ground is excess of authority and the issues are
separable then setting aside can be suspended and
cured.
The competent court may require the party applying
for remission to post security for the award whose
enforcement has been suspended upon remission of
the award. This order of security safeguards the
award, discourages frivolous proceedings designed to
delay the final day of reckoning, and compensates the
winning party for the lack of immediate benefit of the
award in its favour.
Importance of the New York Convention

The New York Convention regulates the recognition
and enforcement of Convention awards made in one
Convention state and sought to be enforced in
another Convention state. Courts have enforced
foreign awards, international awards and domestic
awards made in another Convention state. The
requirements to be satisfied for recognition and
enforcement or challenge of an award under the New
York Convention are the same as those we have
discussed in both Section 10.2.3 and Section 10.2.4.
These requirements and conditions are exhaustive
and represent maximum standards. A final award
made in any of the 146 Convention states can be
recognised and enforced on satisfying the same
requirements in any of the Convention states. This
makes for ease of enforcement and engenders
harmonisation of the enforcement regime of foreign
arbitral awards. The New York Convention has given
arbitration one of its important advantages: the
portability of the award.
Questions
n Assuming an award from an arbitration with its
seat in Country A is annulled by the state court of
Country A. The winning party takes it to Country
B and asks a judge there to enforce the award
anyway, stating that Country As reasons for
annulling the award were erroneous. Should
Country B refuse to enforce the award? Why or
why not?
n If you are counsel hoping to enforce an award
under the New York Convention, what factors
must you take into consideration? Will you need
local counsel?
41
42
T + 44 (0)20 7421 7439
F + 44 (0)20 7404 4023
12 Bloomsbury Square, London, WC1A 2LP, UK
E education@ciarb.org
W www.ciarb.org
Registered Charity: 803725
The Chartered Institute of Arbitrators
Chartered Institute of Arbitrators
Workbook:
Introduction
to International
Arbitration

Workbook - 2014

Transféré par

Informations du document

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Workbook - 2014

Transféré par

Droits d'auteur :

Formats disponibles

Workbook: Introduction to International Arbitration

T + 44 (0)20 7421 7439

F + 44 (0)20 7404 4023

12 Bloomsbury Square, London, WC1A 2LP, UK

The Chartered Institute of Arbitrators

Chartered Institute of Arbitrators

Workbook: Introduction to International Arbitration

Dr Emilia Onyema FCIArb, 2008

Workbook: Introduction to International Arbitration

Chartered Institute of Arbitrators 2014

Workbook: Introduction to International Arbitration

n The arbitration agreement;

n The UNCITRAL Model Law and Arbitration Rules;

Workbook: Introduction to International Arbitration

Workbook: Introduction to International Arbitration

Appointment Procedures ................................

Arbitration and Litigation ................................

One or Three? ..........................................

Competence and Expertise of the

Multi-party Arbitrations ..............................

The Appointing Authority ..........................

Appointment Methods ....................................

Speed and Finality ....................................

List Procedure ..........................................

Neutral Forum ..........................................

Default and Institutional Appointments ......

Required Qualities and Qualifications of

Special Powers ........................................

Special Background or Expertise ..............

Agreed Qualifications ................................

Ad hoc Arbitration ....................................

Challenge and Replacement ..........................

Institutional, or Supervised, Arbitration ......

Reasons for Challenge ..............................

The Seat of Arbitration ..............................

Procedure for Challenge............................

Disclosure Requirements ..........................

Other Grounds for Terminating

Procedure for Replacement ......................

Possible Repetition of Hearings ................

The Model Law ........................................

Law of the Place of Arbitration (lex arbitri)..

The New York Convention ........................

UNCITRAL Rules ......................................

Institutional Rules ......................................

Codes of Ethics ........................................

IBA Conflict Guidelines..............................

IBA Rules of Taking Evidence ....................

Workbook: Introduction to International Arbitration

Timeliness of the Amendment or

Sources of Powers and Jurisdictions ..............

Prejudice and Other Considerations ..........

The Arbitration Agreement ........................

Possible Imposition of Costs ....................

Further Written Statements ............................

National Laws and Treaties or

Stay of Court Proceedings ..............................

Requiring or Allowing Further

Request for Stay or Dismissal ..................

Fixing Time Limits for Submissions ..........

Conditions of Stay or Denial of Jurisdiction

Continuation of Arbitral Proceedings ........

Determination of Own Jurisdiction ..................

Ultimate Control by National Courts ..........