International Commercial Arbitration

Questions of- i. governing laws

ii. conflict of laws

iii. different legal systems.

Power of arbitrator arises from-

i. the arbitration agreement

ii. The law applicable to the arbitration

Arbitration agreement

the perceived contractual and creative nature of

the arbitrator’s decision is said to require a
specific contract clause (all disputes arising out of
or in connection with this contract) that contains
an express authorization by the parties in addition
to the usual arbitration agreement. Authorization
can be derived from a hardship or other
adaptation or negotiation clause.

In absence of written clause it is up to the parties

to take precautions in their contract against
unforeseen circumstances.

The arbitration law

The party is free to adopt their own choice of law in

contract. No substantive and procedural law of
any specific party should govern the agreement.
The Law applicable to the substance

The canon of interpretation of arbitration

clauses and the method of adaptation to be
applied by the arbitrators if the contract
does not contain specific instruction for the
tribunal.
 Arbitration clause

The transaction contemplated in this Agreement has been

approved by New York Arbitration Board, whose ruling
with regard to commercial matters shall be final and
binding for the Parties. Neither Party shall be entitled to
raise any objections or defenses based on the basis that
the agreement, the transaction envisaged therein or
certain clauses contained therein, is not in compliance
with the principles of the international commerce.
Necessary provisions for drafting clause
Scope of arbitration
Arbitrator selection procedure
Choice of rules
Reference to emergency procedures
Location of arbitration
Choice of law
Choice of language
 Advantages
 Faster than litigation
 Private & confidential
 Avoids int’l jurisdictional dispute
 Allows choice of neutral forum
 Allows choice of place for arbitration, and thereby the applicable
procedural law
 Allows choice of language
 Avoids playing on adversary’s home court
 Allows selection of arbitrators who are not nationals of either party
 Due to NY Convention, arbitral awards are much easier to enforce
than court judgments
Disadvantages
 Less discovery
 Rules of evidence not followed
 Generally not reviewable
 Not necessarily cheaper than litigation
 Requires cooperation between parties
 Cannot coerce cooperation of third parties
 Sets no precedent
 Split-the-baby tendency may repel “total
victory” seekers
 Lacks message-sending/public-spectacle
value
 The New York Convention
Prepared in 1958 by the U.N., a foundational
instrument of international arbitration, the
Convention requires courts of contracting states to
enforce arbitral agreements and awards to the
same extent as awards made within their own
borders
 London Court of International Arbitration
• Based in London in 1891 to handle disputes
in all areas of international commerce
• Flexible rules to allow parties to agree on
procedural matters, other administrative
support varies on wishes/needs of parties
• Expedited procedures available
• Parties can nominate arbitrator(s), but
court makes final appointment
• Fixed registration fee, then hourly rates for
LCIA administration and arbitrator fees
 American Arbitration Association
 founded in 1922
 International Centre for Dispute Resolution was
established in 1996 as AAA’s international division
 Cooperative agreements with 62 arbitral
institutions in 43 countries
 AAA does not itself arbitrate, but provides
administrative support for arbitration
 Case managers assist in selection of arbitrators
and start case with conference call
 Administrative fees based on amount in dispute,
arbitrators set own fees
 ICC International Court of Arbitration
 Established in 1923 in Paris
 Procedures developed specifically for international
context
 National committees identify arbitrators – no pre-
established list
 Requires arbitrator(s) to file a Terms of Reference
document within two months
 Unique ICC Court monitors cases and reviews
awards
 Revised rules allow for injunctive relief
 Pre-arbitration procedure for urgent relief available,
but must be specified in arbitration agreement
 WIPO Arbitration and Mediation Center
 Established in 1994 in Geneva
 Procedures developed specifically for intellectual
property disputes
 Assists parties in selection of arbitrator from
database of 100 neutrals
 Separate expedited arbitration procedures available
 Allows for emergency interim relief
The China International Economic and Trade
Arbitration Commission, the Hong Kong
International Arbitration Centre, the
Arbitration Institute of the Stockholm
Chamber of Commerce, the Singapore
International Arbitration Centre, and The
Korean Commercial Arbitration Board are new
in this field.
 Arbitration Procedure
The typical international commercial
arbitration, whether influenced by the civil
law or common law tradition, is conducted in
a formal, adversary hearing unadulterated
by techniques associated with conciliation or
'alternative dispute resolution. Some are
 Discover
 Examination of witness
 joinder of parties and issues
 Award and its enforcement

To obtain the recognition and enforcement of an

award, the winning party must supply the following
two documents to the national court where
enforcement is sought: (a) the authenticated
original award or a certified copy, and (b) the
original arbitration agreement or a certified copy,
which must be "signed by the parties or contained
in an exchange of letters or telegrams.
The New York Convention allows national courts to
refuse to recognize or enforce an arbitral award only
if the losing party can prove one of the following
defenses: (a) the arbitration agreement is invalid; (b)
the party was denied procedural fairness or due
process in the arbitral proceedings the arbitrators
exceeded their authority;(d) the arbitral procedures
deviated materially from the parties' agreement or
the applicable procedural law; or (e) the award is not
yet binding or "has been set aside or suspended by a
competent authority of the country in which, or
under the law of which, that award was made.
Even if not raised by the party opposing
enforcement, the NY Convention permits national
courts to refuse to recognize or enforce awards
subject to the New York Convention if they find: (a)
the subject matter of the dispute cannot be settled
by arbitration under the law of that country; or (b)
"the recognition or enforcement of the award would
be contrary to the public policy of that country.
Federal law sets forth four grounds for vacating an
arbitration award rendered in the United States:(1)
where the award was procured by corruption,
fraud, or undue means;(2) where there was evident
partiality or corruption in the arbitrators, or either
of them;(3) where the arbitrators were guilty of
misconduct in refusing to postpone the hearing
,upon sufficient cause shown, or in refusing to hear
evidence pertinent and material to the
controversy; or of any other misbehavior by
which the rights of any party have been
prejudiced; or (4) where the arbitrators
exceeded their powers, or so imperfectly
executed them that a mutual, final and
definite award upon the subject matter
submitted was not made.