Action aimed at setting aside an award. Modern arbitration laws permit only limited review of an award by local courts in setting aside actions, and they do not permit any review of its merits. Under French law, the conditions for setting aside an award in international matters are the same as those for refusing its enforcement. Awards set aside in their country of origin (cf Seat of arbitration) cannot be enforced in that country and also may lose the benefit of enforcement under the New York Convention. However, some countries (such as France) allow an award set aside in its country of origin to be enforced in their territory if the conditions for doing so are fulfilled.
Arbitration that is not administered by an arbitral institution (cf Institutional Arbitration). The parties do not benefit from any assistance in case of difficulty other than from the courts of the seat of arbitration, who may provide support if they have jurisdiction. Parties to an ad hoc arbitration may agree to the use of established arbitration rules, such as UNCITRAL Arbitration Rules, and may provide for an appointing authority to assist them in the constitution of the arbitral tribunal or the appointment of a sole arbitrator.
The most important arbitration institution in the United States. The AAA has numerous sets of rules for dispute resolution in many different fields (commercial, employment, labor union, consumer), including a specific set of rules devoted to international arbitration : the AAA International Arbitration Rules. The AAA established the International Centre for Dispute Resolution (the ICDR) to administer all of the AAA's international matters.
Power given by the parties to the arbitrators to seek an equitable solution to their dispute, by setting aside, if necessary the rule of law which would otherwise be applicable or the strict application of the contract. It is said that in this case, the arbitrator decides "ex æquo et bono", as "amiable compositeur", or in "equity", these three expressions being often considered interchangeable. The only limit to the power of the arbitrator lies in international public policy, a breach of which would constitute a ground for refusing to enforce the award or for setting it aside (cf Action to set aside).
Individual or institution selected by the parties to a dispute or determined by applicable arbitration rules to select the arbitrator or arbitrators who will hear a matter. The appointing authority may select the arbitrator or arbitrators in the first instance or only after the failure of one or more parties to nominate an arbitrator within an established timeframe.
The body of existing arbitral awards that may be referred to by parties in later disputes seeking a set of legal principles to support the arbitrators' decision. Prior awards are referred to in relation to both arbitral procedure and substantive law. The vast majority of commercial arbitration awards are unpublished, but excerpts from many awards are published. Public international law arbitral awards (including the majority of awards in investment treaty arbitrations) have, on the other hand, very often been published and are frequently cited by parties in later cases. Unlike certain judgments in common law systems, arbitral case precedent is non-binding and is referred to only in support of arguments.
Organisation that manages arbitral procedures, generally taking place under the arbitration rules it issues. Among the leading international arbitral institutions are the ICC, AAA (and its international arm, the ICDR), CIETAC, HKIAC, DFIAC, LCIA, SIAC, SCC, and Swiss Chambers. Some institutions have adopted the UNCITRAL Arbitration Rules, whereas most have developed their own rules. The institution's role is more or less extensive depending on its arbitration rules, but in no event does it have a jurisdictional function. The jurisdictional function of deciding on the merits of a dispute resides with the arbitral tribunal. In addition to the issuance of arbitration rules, the arbitral institution's role consists mainly in assisting the parties in resolving certain procedural difficulties, such as the constitution of the arbitral tribunal, and in supervising the proper conduct of the arbitration proceedings.
In contrast to a sole arbitrator, a collegial body generally consisting of three arbitrators. Usually each party nominates one arbitrator and the two arbitrators so nominated appoint the third, who acts as the chairman of the arbitral tribunal. In some instances, and in particular in multiparty arbitrations, it may be necessary or desirable to have all three arbitrators appointed directly by an arbitral institution or other appointing authority. It is possible to envisage an arbitral tribunal comprising more than three arbitrators, or two arbitrators only, subject to the mandatory provisions of some arbitration laws that prohibit an even number of arbitrators.
Way of resolving disputes whereby the parties withdraw their dispute from the jurisdiction of State courts to submit it to private individuals - the arbitrators - freely nominated by them and charged with the task of resolving the dispute by means of an enforceable decision.
Agreement in which parties agree that a dispute that has arisen (submission agreement) or that may arise between them in the future (arbitration clause) shall be resolved by arbitration.
Independent body of the Chamber of Commerce of Stockholm devoted to dispute resolution, its mission is to lend assistance, in accordance with the arbitration rules of the Arbitration Institute of the Stockholm Chamber of Commerce, or other rules that it may adopt in the resolution of domestic or international disputes.
Legal system applicable to arbitration in a particular country. It deals in particular with the validity and effects of the arbitration agreement, the functions of the arbitrator, the constitution of the arbitral tribunal, the mandatory procedural rules and actions to set aside the awards and their enforcement. It should not be confused either with the substantive law or the procedural law. It is sometimes referred to as the lex arbitri. French arbitration law is codified in the Book IV of the Civil Procedure Code and was updated by a Decree No. 2011-48 of 13 January 2011.
Set of provisions that determine the main rules regarding the establishment and conduct of the arbitration, facilitate the constitution of the arbitral tribunal or the appointment of the sole arbitrator and govern the powers and obligations of the arbitrators. They are usually issued by the arbitral institutions and used in arbitration proceedings conducted under their aegis. UNCITRAL offers arbitral rules devoted to ad hoc arbitrations.
Private individual, in principle a natural person, to whom the parties submit a dispute which has already arisen or which may arise with a mandate to decide the dispute and who accepts this mandate. Unless the arbitration agreement provides otherwise, no restriction under French law limits the choice of the arbitrators by the parties except that they must be independent from the parties. Some national laws require that arbitrators be lawyers when they are deciding matters based on the law. Where more than one arbitrator (usually three arbitrators) together decide a dispute, they act together as an arbitral tribunal.
Written decision of the arbitral tribunal or sole arbitrator that finally settles the dispute, in whole or in part, whether on the merits, on jurisdiction or on any other procedural issue that may lead to the end of all or a portion of the proceedings. The award is binding on the parties and terminates the arbitrators' jurisdiction over the dispute or portion of the dispute that they have resolved. It is generally acknowledged that the award is res judicata with regard to that dispute. An award is said to be partial when it settles only part of the dispute (jurisdiction, applicable law, one contested issue …) and final when it disposes of all the issues. In principle, the award is not subject to appeal but may be subject to an action to set aside.
Award whereby the arbitrators record a settlement entered into by the parties. It has the authority and effect of an arbitral award.
Formerly known as the Foreign Trade Arbitration Commission, CIETAC is the most important international arbitration institution in China. It was established in April 1956 under the China Council for the Promotion of International Trade (CCPIT). Headquarted in Beijing, CIETAC has sub-commissions in Shanghai, Shenzhen, and Tianjin. CIETAC has its own set of arbitration rules.
Generally accepted principle according to which the arbitrators have jurisdiction to decide on their own jurisdiction when a party to the arbitral proceedings challenges it, without having to suspend the proceedings until a State court determines whether the dispute it to be arbitrated. In its "negative" sense, acknowledged by some national laws only, especially in France, competence-competence further means that the jurisdiction of the arbitrators to decide on their own jurisdiction is exclusive of the jurisdiction of the State court, which, when faced with an arbitral agreement, does not have any jurisdiction either to decide the dispute or to decide on the validity of the agreement unless it is prima facie null and void and cannot be applied. This does not mean that the State court is prevented from ever assessing the validity or the subject matter of the arbitration agreement; but this assessment is postponed until the review of the award in connection with either its enforcement or an action to set it aside.
Arbitral awards may, and in principle should, be subject to immediate enforcement by the losing parties, from the time of their notification to the parties; otherwise they may be subject to legal enforcement once they are declared enforceable (via exequatur proceedings or other locally applicable procedures) by a judicial decision rendered in the country where enforcement is sought.
See Amiable composition.
See Amiable composition.
Procedure whereby the State courts make an arbitral award enforceable in the territory of that State. States Parties to the New York Convention undertake not to refuse the enforcement of awards issued in other States Parties (referred to as foreign awards) unless it is established that they do not comply with certain conditions, which should not be stricter than those provided by the Convention. Under French law, which is more liberal than the Convention, the exequatur of foreign awards can be refused only on the following five grounds: the arbitrator has decided in the absence of an arbitration agreement or on the basis of a void or expired agreement; there was an irregularity in the constitution of the arbitral tribunal or in the appointment of the sole arbitrator; the arbitrator's decision does not conform to the terms of his reference; the principle of due process has not been complied with; or the recognition or enforcement of the award would be contrary to international public policy. In addition, awards issued in France in international matters (cf International arbitration) may be set aside (cf Actions to set aside) for these same grounds.
Established in Hong Kong in 1985, the HKIAC is among the leading arbitral institutions in Asia. For many years, the HKIAC acted as an appointing authority and administering body for arbitrations under the UNCITRAL Arbitration Rules. While it still performs that function, the HKIAC issues its own Honk Kong International Arbitration Centre Administered Arbitration Rules in 2008.
Rules issued by the International Bar Association aimed at organising the presentation of evidence in international commercial arbitration, especially between parties belonging to different legal systems. Initially issued in 1999 as the Rules on the Taking of Evidence in International Commercial Arbitration, the IBA Rules were updated and re-issued by the International Bar Association in 2010. Even when the IBA Rules are not deemed directly applicable to the arbitration proceedings, they constitute an important set of guidelines for the majority of arbitrators.
Essential characteristics of the arbitrator at the time of the acceptance of his/her function and throughout tenure. The absence of these attributes may lead either to a challenge of the arbitrators, the setting aside of the award (cf Action to set aside), or a refusal to enforce the award. A lack of independence is demonstrated, according to the French jurisprudence, through "the existence of material or intellectual links, a situation which is liable to affect the judgment of the arbitrator by creating a definite risk of bias in favour of a party to the arbitration". The arbitrator may be suspected of partiality primarily on the grounds of lack of independence, especially towards one party, but also because the arbitrator's previous knowledge of the case may have led him to take a prior position that could be prejudicial to one of the parties; it may be also evidenced by the arbitrator's behaviour during the proceedings if it shows clear bias in favour of one party. Some arbitration rules require the arbitrators to provide the parties with a statement of independence whereby they must disclose any facts or circumstances which might be of such nature as to call into question the arbitrator's independence in the eyes of the parties in order to allow a possible challenge before the proceedings begin.
Arbitration which proceeds under the supervision of an arbitral institution. It is to be contrasted with ad hoc arbitration.
The notion of international arbitration varies from country to country, and local arbitration law in each country usually treats international arbitration differently from domestic arbitration. Under French law, Article 1504 of the Code of Civil Procedure states that: "an arbitration is international when it involves the interests of international trade". This means that apart from any other external criteria, such as nationality, the parties' domicile or headquarters, the seat of the arbitral institution, the place of arbitration or the law applicable to the merits, the arbitration is international under French law if it deals with an economic transaction involving a transfer of goods or services or a cross-border payment.
Arbitral institution established under the aegis of the World Bank by the Washington Convention of 18 March 1965 ("Convention for the Settlement of Investment Disputes between States and Nationals of other States"). ICSID offers conciliation and arbitration to resolve investment disputes between contracting States and nationals of other contracting States. As of 27 December 2010, the Convention had been signed by 157 States and ratified by 146 States.
Institution founded as a not for profit organization under French law in 1919 with a view to fostering the development of world trade. In this context, among many other activities, it offers parties one of the main international arbitral institutions in the world: the ICC International Court of Arbitration.
Arbitral institution established in 1923 as part of the ICC and headquartered in Paris. In spite of its name, the Court does not have any jurisdictional power; its mandate is to supervise international dispute resolution by the application of the ICC's Rules of Arbitration. It intervenes, among other things, to appoint the arbitrators and confirm those nominated by the parties, as well as to scrutinise draft awards before their final issuance by the arbitrators.
Set of rules or principles applicable either to the merits of a dispute or to the arbitral proceeding, which should be followed in the law of a particular State. The failure to comply with one of these rules could justify setting aside the award or refusing its enforcement.
Arbitration between a State and a private party from another State relating to the treatment of an investment of the latter in the former. The jurisdiction of the arbitral tribunal arises from a treaty (often referred to as a bilateral investment treaty, or BIT) or provisions of a multilateral convention (often a regional free trade agreement, such as the NAFTA, or the Energy Charter Treaty, or ECT) addressing the promotion and protection of investment. Investment arbitrations can be conducted pursuant to the ICSID Convention (cf ICSID), as institutional arbitrations supervised by other arbitral institutions, or as ad hoc arbitrations.
Language used in the parties' written and oral submissions, in the procedural orders and in the award(s) issued by the arbitrators. It is chosen based on joint agreement of the parties, usually in the arbitration clause, or is otherwise decided by the arbitral tribunal. The flexibility of the arbitral procedure allows the parties and the arbitrators to provide for the most appropriate solutions, the only limits to the imagination of the parties being the costs of translation and interpretation. Thus, it is possible to foresee an arbitration in several languages, for example, with each party expressing itself orally in its own language while the procedural orders and the award are drafted in only one language. It is also possible for the written submissions and the award to be drafted in two different languages.
International trade usages and general principles of law developed by arbitral awards, resulting from the convergence of national laws, or stated by public or private international organisations. Parties submitting their disputes to arbitration may direct the arbitrators to apply a national law or may submit their dispute for resolution under the lex mercatoria alone.
Arbitral institution based in London that has established its own arbitration rules. The LCIA, inaugurated in 1892, is the most important arbitration institution in England for international disputes.
Arbitration involving more than two parties. Multiparty arbitration can create procedural complications that need to be considered during the drafting of an arbitration clause or during the conduct of an arbitral proceeding. Multiparty arbitration does not pose significant problems when the parties consist of two, clearly-defined groups having common interests and a common procedural position (claimant or defendant), with each side being able to nominate an arbitrator. When this is not the case, difficulties can arise with respect to the constitution of the arbitral tribunal. According to a decision of the French Cour de cassation, each party has, in principle, the right to nominate an arbitrator. Many institutional arbitration rules take this into account by requiring the arbitral institution to appoint all members of the tribunal if the parties have been unable to agree to an alternative procedure.
The "Convention on the Recognition and Enforcement of Foreign Arbitral Awards" issued in 1958 by an international conference under the aegis of the United Nations mainly aims at facilitating the enforcement of arbitral awards. The States Parties undertake to recognize and to enforce foreign arbitral awards issued in another State Party, unless the defendant in the enforcement action can establish the existence of one of the limited grounds established under the Convention for refusing to enforce the award. The Convention grounds exclude any review by the enforcement court of the merits of the dispute. On 27 September 2010, Fiji became the 145th State Party to the Convention, which facilitates the international movement of awards, and is one of the most important instruments of international arbitration.
Term used to describe an arbitration clause, or more generally an arbitration agreement, whose defective drafting does not allow the constitution of an arbitral tribunal or the appointment of a sole arbitrator without the intervention, not anticipated by the parties, of the "supporting" judge - or even renders it impossible to establish arbitral jurisdiction. In this last situation, the arbitration agreement is null and void or cannot be applied and the State Courts regain jurisdiction to settle the dispute.
See Seat of arbitration.
The set of rules applicable to the conduct of the arbitral proceedings, it is determined by the parties, directly or indirectly by reference to arbitration rules, or by the arbitral tribunal without reference to a national law. It should not be confused with either the substantive law or the arbitration law.
Measures devoted to preserving a situation of fact or of law, to preserving evidence or ensuring that the ultimate award in a case will be capable of enforcement. Decisions on provisional or conservatory measures do not involve any prejudgment of the decision on the merits. Depending on the exact circumstances, the local arbitration law of the seat and the applicable arbitration rules, these measures in principle may be decided both by a judge (cf Supporting judge) and the arbitral tribunal.
The initial claim or writ filed by the claimant that starts the arbitral proceedings. Its form and content vary according to the applicable law, the provisions of the arbitration rules agreed by the parties, and the provisions of the arbitration clause.
Initially the physical place where the arbitration proceedings take place, the seat of arbitration today refers to the legal situs of the arbitration proceedings -- linking the arbitration procedure and the award to a particular, national legal system. The arbitration award is thus deemed rendered at the seat of the arbitration. The seat of arbitration is determined by the parties, usually in the arbitration agreement or, in the absence of party agreement, by the arbitral institution or the arbitration tribunal. The choice of the seat of arbitration involves important legal consequences. Among other things, the choice of the seat will determine whether national courts will support or interfere with the arbitral process, will determine whether the benefits of enforcement under the New York Convention will be available, and will determine the competent courts to hear any action to set aside the arbitral award.(See also Why the Seat Matters)
Established in 1991, the Singapore International Arbitration Centre has become a leading arbitral institution in Asia. SIAC-administered arbitrations may apply the UNCITRAL Rules of Arbitration or SIAC's own arbitration rules, which were last revised in 2010.
A single individual, as opposed to an arbitral tribunal, to whom a dispute is submitted for resolution by arbitration. The arbitrator is nominated either by joint agreement of the parties, by the institution that the parties have identified in the arbitration agreement, by an "appointing authority," or by the "supporting" judge.
Rules and principles of law applicable or applied to the resolution of a dispute on its merits. Their origin may be State law (national law), public international law or privately determined law (such as via a contractual agreement to apply lex mercatoria). When the substantive applicable law has not been chosen by the parties, the arbitrators apply the substantive law they deem appropriate taking into account the reasonable expectations of the parties. A distinction has to be made between the substantive law and the procedural law.
Used to describe the judge who intervenes to lend support to an arbitration by resolving procedural difficulties, especially during the constitution of the arbitral tribunal (in connection with the appointment or challenge of an arbitrator), in evidentiary matters or to grant provisional and conservatory measures.
Swiss Chambers was founded in Basel 2004 by the Chambers of Commerce of Basel, Berne, Geneva, Lausanne, Lugano, Neuchâtel and Zurich. Swiss Chambers offer arbitration in accordance with the Swiss Rules of International Arbitration. Initially limited to arbitrations with their seat in Switzerland, since August 2004, arbitrations under the Swiss Rules can be seated anywhere in the world. Since 2007, the Swiss Chambers also offers services in Commercial Mediation applying the Swiss Rules of Commercial Mediation.
The terms of reference are a characteristic of ICC arbitration and certain other institutional arbitration. Under the ICC arbitration rules, it is prepared by the arbitral tribunal and includes at a minimum: the parties' and arbitrators' names and addresses, a summary of the parties' respective claims, the main rules applicable to the proceedings, the place of arbitration, and, if appropriate, a list of issues to be resolved. It is signed by the parties, unless one of them refuses to sign, in which case it is submitted for approved by the ICC International Court of Arbitration. The main purpose of terms of reference is to define the dispute clearly, such that the parties are not to present new claims beyond the limits of the terms of reference without the authorisation of the arbitrators.
The United Nations Commission on International Trade Law, which is the principal legal organ of the United Nations in the field of international commercial law, empowered by the General Assembly to promote the progress of international commercial law's harmonisation and unification. In this context, UNCITRAL has created several instruments in the field of arbitration, including arbitration rules applicable to ad hoc arbitrations and also used by certain arbitral institutions, and a model law on international commercial arbitration which has been totally or partially adopted by numerous States in their domestic laws.