Transcript www.arbitrations.ru

INTRODUCTION TO
COMMERCIAL ARBITRATION
St. Petersburg State University
Law Faculty
Zykov Roman
March 2009
Contents
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Intro to Arbitration
Regulations
Arbitration agreement/clause
Choosing / Dismissing arbitrators
Submissions
Procedures
Interim Measures
Evidence
Award
Enforcement
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Intro to Arbitration
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Institutional
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Permanent arbitration establishment
Secretariat
Case management
Arbitration Rules
Appointment of arbitrators
Predictable case fees
Appointing authority
Ad Hoc
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Process management is on the arbitrator(s) and parties
Non-transparent fees
Uncertain time frame
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Regulations
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New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (1958)
European Convention on International
Commercial Arbitration (1961)
Russian Law on International Commercial
Arbitration 1993 (UNCITRAL Model Law based)
Russian Law on Treteisky sudi (2002)
Arbitrazh Procedure Code (2002)
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Arbitration Agreement
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Written form - NYC art. II, Law on ICA art. 7(2)
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Parties agree to arbitrate
Separate arbitration agreement
Arbitration clause
Reference to a Document (f. ex. GCS)
Submission agreement
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Extension of Agreement to 3d Party
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Convention on Agency in the International Sale of Goods (UNIDROIT,
Geneva, 1983, not in force)
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International Convention On Salvage (IMO, 1989)
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Art 12: “Where an agent acts on behalf of a principal within the scope of his authority and
the third party knew or ought to have known that the agent was acting as an agent, the acts of
the agent shall directly bind the principal and the third party to each other, unless it follows from
the circumstances of the case...”.
Art 6.2: “The master shall have the authority to conclude contracts for salvage operations on
behalf of the owner of the vessel. The master or the owner of the vessel shall have the authority
to conclude such contracts on behalf of the owner of the property on board the vessel”.
“Group of companies” doctrine
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Awareness of agreement; involvement in negotiations and
performance;
Dow Chemical v. Isover Saint Gobain Case No. 4131/1982 (ICC)
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Treaty based Arbitration
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General Terms of Delivery SEC (Общие Условия
Поставок СЭВ)
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GTD with China (1990)
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GTD with Finland (1978)
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Para 52: “Disputes arising out of or in connection with a contract, unless
settled by negotiations are exempted from the state courts’ jurisdiction and
shall be arbitrated”.
Para 16.1.1 “Disputes arising out of or in connection with a contract are
exempted from the state courts’ jurisdiction and shall be arbitrated”.
Place of arbitration under GTDs - @ the residence
of the seller (characteristic performer).
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Basic Considerations when Drafting
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New York Convention is applicable to the parties
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Arbitration environment at the place of arbitration:
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Legal requirements for arbitration agreement
Intervention of state courts
Possibilities of parallel procedures
Court’s support to arbitration
Consolidation of cases / 3d parties
Grounds for setting aside of awards
Application of “public policy” doctrine
Avoid “midnight clause” situation (plan ahead)
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Arbitration Agreement (i)
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Subject matter of the dispute
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Applicable Arbitration Rules
Correct name of arbitration Institute/Rules
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Compare: “Any dispute or controversy arising out of or in
connection with the contract…” (OK) and “Disputes arising out of
determination of damages…” (NARROW)
Compare: “by Arbitration court in London…” and “by
arbitration under the London Court of International Arbitration
Rules”.
Odd names: “Ad Hoc Arbitration Institute” in Latvia (!!!))
or Method of appointing the tribunal if Ad Hoc
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Gaps filled by national laws/int. documents
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Arbitration Agreement (ii)
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Additional elements
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Number of arbitrators
Place of arbitration
Language of submissions/proceedings
Possibility of pre-arbitral DR (deadlines!)
Powers of Tribunal
Limitation of liability
Law applicable to arbitration agreement (?)
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Arbitration Agreement (iii)
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Authorities of Tribunal
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parties “may” or “can” v. “shall” or “agree” refer to arbitration
Interim measures of protection
ex aequo et bono
Partial/Interim Awards (on costs or separate matters)
Supplementary Rules
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Expedited Arbitration Rules
Small-claims Rules
Rules on the Taking of Evidence in ICA (IBA)
Other
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Arbitration Agreement (iv)
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Limitation of liability
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Exclusion of punitive damages
No vicarious liability
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the responsibility of any third party that had the "right,
ability or duty to control" the activities of a violator
corporate liability (piercing the corporate veil)
Exclusion of sovereign immunity
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Arbitration Agreement (v)
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Separability of arbitration clause
Law applicable to arbitration agreement
(interpretation, validity, etc.):
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Law of arbitral situs
Closest connection rule
Most appropriate law
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Composition of the Tribunal
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Method of appointment:
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By a Party/Parties
By the Institute
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By a Chamber of Commerce (Genève Convention, 1961)
By a court (Dutch Code of Civil Procedure, Book IV )
Chairperson is appointed:
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sole arbitrator
small claims
no agreement on appointment method
appointing authority
by the party appointed arbitrators
by the Institute
In multi-party arbitration
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by the Institute
jointly by claimants; jointly by respondents
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Composition of the Tribunal
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Fixed period for appointment (15-30 days)
If parties fail to appoint in due time:
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Appointed by the Institute
in Ad Hoc cases – appointing authority (state court or chamber
of commerce)
Is it important to participate in the composition?
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Select an appropriate arbitrator (background check based)
Shape the Tribunal (arbitrators appoint the chairperson)
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Impartiality and Independence (i)
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Arbitrators are impartial and independent
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Obligation to disclose
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CV’s submitted to the Secretariat and the parties
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No substantial guidance in national laws or
international acts
No substantial guidance in Russian law re: impartiality
and independence
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Case law: OAO NK Rosneft v. Yukos Capital S.a.r.l.
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a statutory obligation of an arbitrator to disclose any information that may raise
doubts as to his/her impartiality, f.ex. participation in seminars
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Impartiality and Independence (ii)
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IBA Guidelines on Conflicts of Interest in
International Arbitration
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Non-Waivable Red list (absolute no)
Waivable Red list (most likely no)
Orange list (possibly yes)
Green list (yes)
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Arbitrators
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Considerations as to candidates:
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Lawyer/Non-Lawyer
Civil/Common law
Experience
Specialization
Language proficiency
Nationality (sole arbitrator or Chairperson)
Personal credentials
Workload/Calendar
Location
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Arbitrators (ii)
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Background check
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Conflict check
Expressed opinions (cases, publications)
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Is interviewing acceptable?
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Guideline on the Interviewing of Prospective
Arbitrators (Chartered Institute of Arbitrators)
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Dismissing Arbitrators
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Justifiable doubts to impartiality or independence
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Notice is submitted to the Secretariat
Within […] days of awareness (check applicable Rules!)
If period is missed - challenging rights are waived
Discharging arbitrators (by the Institute)
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Unqualified (no sufficient knowledge)
Fails to fulfill the duties
Delays proceedings
Arbitrator has no legal capacity
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Jurisdiction of Tribunal
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Kompetenz-kompetenz
Parallel proceedings (check local regulations)
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Arbitration v. State Courts’ proceedings (lis pendens)
Arbitration v. Bankruptcy
Arbitration and State Court’s Measures
Pathological clauses and Choice of Forum
Multi-jurisdictional clauses (?)
One-sided clauses (?)
Arbitrability (also at the place of enforcement)
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F. ex. Belgium (agency agreements)
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Submissions
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Request for Arbitration (ICC, LCIA)
Statement of Claim
Response/Counter Claim
Additional submissions
Documents discovery (f.ex. in the US)
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Statement of Claim/Response
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Statement of Facts
Summary of Arguments
Relief Sought
Arguments
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Jurisdictional issues
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Forum + Scope
Substantive issues
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Facts + Law
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Additional Submissions
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Rebutting facts or legal arguments
Introducing new facts/evidence
Amending the claim/counter claim (when?)
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Facts
Specific performance
Relief sought (recalculations)
Witness Statements
Expert Statements
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Notifications
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Notifications re:
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Vehicles:
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Filed request for arbitration
Invitation to appoint an arbitrator
Hearings
Other
Fax (?)
Registered letter
Hand-in in the presence of a notary
No enforcement on grounds of due process violation
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Procedural Requests/Orders
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Challenging arbitrators
Requests for disclosure/discovery
Request for extension
Request for interim measures of protection
Request of appearance (witnesses, experts)
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State court’s support
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Request to adjourn proceedings
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Implemented by Procedural Orders of Tribunal
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Place of Arbitration
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Determined by:
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parties
arbitrators
Institute
Meetings might be somewhere else
Place of arbitration determines
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Nationality of award
Procedural law applicable
Setting aside procedures
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Language of Arbitration
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Language of submissions/hearings
Language:
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Agreed by the Parties
Established by the Tribunal
Set out by Arbitration Rules
Flexibility
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No requirements for legalization
Documents in different languages
No need for a Bar admission
No nationality requirements
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Hearings
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Agenda is suggested by the Tribunal/Parties
Opening Statements
Jurisdiction
Substantive issues
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Presentations
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Witness/Expert direct testimony
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Witness/Expert cross/re-cross exam
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Examination of documents
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On-Site inspection (rare)
Closing arguments
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Evidence
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Admissibility of evidence (forged, stolen
documents)
Free evaluation by Tribunal
Indexed exhibits
Witnesses and Experts are treated the same
Witness statements saving time on direct exam
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Witness direct-exam
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Do not over-prepare a witness
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there is a presumption that all witnesses lie
Common law tradition - story telling
Civil law tradition - proving the fact
Maybe a short Direct exam
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warm up a witness
ask something that might be asked by opponent
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Witness cross-exam
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Think of a strategy (how the arbitrator would proceed)
Be prepared (DD on the opposite side witness)
Be brief (2-3 major point)
Use simple language
Listen to the answers
Make him answering your questions, not some other
Never argue with the witness
Do not let the witness repeat his direct testimony
Do not let the witness explain
Do not corner the witness (one question too many)
Do not ask a witness to draw conclusions
Save for closing arguments
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Expert Witness
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Always conflicting opinions as the parties control their
experts
DD on the opposing expert
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Conflict of interests
Inflated experience
Try not to challenge the expert on tech facts, rather
point on inconsistencies
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Interim Measures of Protection
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Tribunals may issue IMP
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not binding on the parties
not binding on 3d parties
not considered as award
Tribunals may seek courts’ assistance
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Support to foreign arbitrations (?)
What’s the situation in Russia (?)
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Interim Measures in Russia
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Chapter 8 АПК РФ (Para 3 Art 90)
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State court may issue IMP at the place of tretejski sud, at the
domicile of the defendant or location of its assets
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supporting tretejski sud or also ICA?
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if also ICA, then only ICA located in Russia
“Tretejski sud” is a broad category in АПК РФ and Law on ICA,
also including ICA.
Art 9 (in conjunction with para 1 Art 1) of the Law on ICA
stipulates that ICA located abroad may seek IMP in Russian
courts
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Award
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Reasoned (?)
Signed (chairman/majority/everyone?)
Dissenting opinions (?)
Costs
Time for rendering the award (6-9 months)
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Setting Awards Aside (i)
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European Convention on International Commercial
Arbitration, Genève, 1961, Art. IX
Arbitrazh Procedure Code, Chapter 30
Russian Law on ICA, 1993, Art. 34
Arbitrazh courts’ case law on Chapter 30
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Setting Awards Aside (ii)
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If a party proves: (Genève 1961, ICA Law)
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Incapacity of a party
Invalidity of arbitration agreement under applicable law
No proper notice of arbitrator/unable to present its case
Award is beyond the scope of submissions
Defects in the composition of the tribunal
If the competent court finds that: (ICA Law)
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the subject matter is not arbitrable
award is contrary to the public policy
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Setting Awards Aside (iii)
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Art 230 (5) АПК РФ: “В предусмотренных международным договором
Российской Федерации случаях … может быть оспорено иностранное
арбитражное решение, при принятии которого применены нормы
законодательства Российской Федерации”
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Art IX EC 1961 “setting aside took place in a State in which, or under the law of
which, the award has been made”
Is this application correct?
Art IX of EC 1961 is based on Art V NYC 1958 where the law of the
award means the procedural law (lex arbitri) not material law!!!
Misleading Russian case law: Presidium of Supreme Arbitrazh Court,
Decree N15359/03, 30.04.2004; Federal Arbitrazh Court Northwestern
Distric, Decree NA05-4274/2007, 25.07.2007
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Recognition and Enforcement (i)
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New York Convention
European Convention of ICA
Arbitrazh Procedure Code
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Supreme Arbitrazh Court Information Letter N96,
22.12.2005
Case law of cassation instances
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Recognition and Enforcement (ii)
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NYC, APC, ICA Law list limited grounds
If the enforcing party proves that:
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Agreement invalidity/party incapacity
Failure to notify
Award is out of scope
Defects in composition of the tribunal
The award is not yet binding or set aside in the country in which,
or under which law is made (!)
If the enforcing court finds that:
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Not arbitrable
Recognition and enforcement contrary to public policy
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Recognition and Enforcement (iii)
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АПК РФ Глава 31
Application is filed within 3 years since in force
Filed to Arbitrazh court at location of the location of
the debtor or its assets.
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Enhancing Enforcement
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Valid arbitration clause
Valid jurisdiction
Non-bias arbitrators
Due-process and notifications
Correct calculations
Correct names of the parties
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Stockholm
Birger Jarlsgatan 6
Helsinki
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4 Podkopaevsky Pereulok
St. Petersburg
62 Nevsky pr.
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2A Kostyantynivska St.
Shanghai
Shui On Plaza 15/F, Unit 1507
Beijing
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www.hannessnellman.com
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