Analytical draft

• An analytical draft serves as the manuscript for a scenario dispute
• It builds upon procedural history, preliminary and evidential issue analysis, and decisions on the merits of issues in dispute from previous stages
• Analytical skills can be honed with the "Replacement Laptops" issue dispute

Writing an Analytical Draft

• It involves taking the technical draft and augmenting it with analysis and conclusions on liability, quantum, and costs

Goals of Unit 3

• Understand the process of writing the second draft of an award, known as the Analytical Draft
• Know how to identify dispute issues, analyze pertinent facts and laws, and arrive at reasoned decisions
• Understand how the award addresses all dispute elements, like interest, costs, and fees
• Understand why an award should not address issues outside of the parties' considerations
• Know how to use the Technical Draft to form the Analytical Draft

Final Draft

• Section 3 focuses on writing this document
• The aim is to guide compilation of financial decisions to avoid errors in the award summary
• Financial decisions in the draft encompass the quantum for each issue, plus interest and costs
• All decisions, including those on costs, along with the impact of settlement offers, should be included

Analysis of Interests and Costs

• Section objective: learn to do a full analysis of interest and costs, while accounting for tax matters, paid fees, cost orders, and settlement offers

• All information should be written in a financial summary of the award, while satisfying signature page requirements

• The summary needs clarity, conciseness, and be unambiguous

Awarding Interest in Arbitration

• Consider whether there is power to award interest
• This power can stem from party autonomy
• It can be found in procedural law, rules, or statutory law of the contract
• Be aware of reasons not to award interest
• Includes old interest or particular laws of the jurisdiction
• State in best practice as to where you get your power to award interest
• Simple cases avoid interest from the award date until its paid
• Disputes often involve separate events or debts needing individual interest calculation from each debt's date
• Construction contracts involve interim payments
• Each unpaid payment is a separate debt accruing interest from its specific date
• Buyers often have a grace period for payments, affecting interest start date

Key Considerations

• When did the debt arise? There may be separate dates for multiple debts
• What interest rate and calculation method should be used? Look to the contract or law
• The contract gives 5% simple interest calculated daily as the delay interest
• When should the interest end and what should be done about calculating it
• Doctor Jones separates interest to avoid double interest problems in his scenario
• Provide a firm date when the unsuccessful party must pay:
  • Some arbitrators grant the unsuccessful party a grace period during which no interest accrues
  • Doctor Jones grants a 14-day grace period, with interest retrospectively payable if the award remains unpaid

Non-Compliance Interest

• If payment isn't made by the ordered date, non-compliance interest which is discussed in the Cir guidelines can be involved
• Generally more accepted that the rates of interest should be higher the the ones originally stated
• The arbitrator cannot penalize a party
• Doctor Jones awarded interest:
  • Based on implied party consent
  • Because delay interest was contractual
• Used a contractual rate of 5% simple interest calculated daily
• The claimant wanted W£10,000 for the second payment and W£7,500 in costs
• They wanted interest from the date of of payment which became due on March 30th 2018, and the date of the awards being January 10th 2019
• The claimant amount from this was worked out, but ultimately down to your discretion

More considerations

• The arbitrator gave respondent a grace period which wouldn't accrue interest for 14 days, but if payment wasn't made the interest would accrue from January 24th

• Doctor Jones ordered interest to be paid on the total ward of W£17,500 because he wanted to avoid a double interest problem

• Non compliance interest should be calculated daily at a rate of 8% if the payment was to be done after January 24th

• Jurisdiction to award interest based on implied party consent

  • Awarded that the respondent shall pay the remaining W£10,000 of the contractually agreed price

• Interest payable for W£10,000 from March 30th 2018, to the date of the award on January 10th 2019 equates to W£391.78

• The ordered to pay the claimant the sum of W£7500 in party and Centre costs, where W£1250 constitutes the amounts the claimant paid to the Respondent.

• The balance payment of W£450 was made on October 30th 2018

• The respondent is ordered to pay a rate of 5% simple interest on a sum of W£800 from June 1st 2018 to January 10th 2019

Important Notes

• If payment is made by January 24th 2019, no further interest will be paid, while January 10th will be seen as a grace period
• W£17500 will be paid at a rate of 5% if the period of Jan 10th is to Jan 24th
• Non compliance interest is to be payed at a rate og 8% if the payment is not made by Jamuary 24th

More on the Respondent and Claimant

• cost submissions were submited on October 30th 2018 by the claimant and October 29th 2018 by the respondent.
• The claimant's costs were W£500 and the respondent's were W£12,000
• The centre's total fee is set at 10% due to the arbitrator's fees and expenses
• The centre also provided an offer that the claimant made to the respondent on April 23 2019, where the amount exceeded the initial dispute but it was refused
• Therefore, the respondent is liable for all costs in this arbitration including all the costs of the centre and party costs

More key areas of analysis

• Consider whether you have the jurisdiction to award costs and if there is a specific agreement between each of the parties:
• Always have a discussion with the parties prior to awarding those costs
• Award those costs if they are reasonable and proportional

Factors for an Award

• The relative success of the parties
• The conduct of the parties
• And settlement offers
• Any Calderbank offer

Putting the Drafter together

• Determine the financial decision

• Determine the quantum for each issue

• Whether each issue attracts interest

• A full analysis on interest and costs

• Summarise interest and costs in writing

• To finish the Finial Draft must:

  • Look at the procedural law
  • Consider specific signitures and publishing needs

• In this unit, all figures are summarised in to a logical manner

• Identify who pays who the money and which issue arises from

Financial Considerations

• Total amount on a set off basis paid by both parties
• Interest given the dates when payment didn't go through
• Payee and recoveree of all amounts that attract interest
• Costs of both parties
• Consider potential requests for correction of awards before publishing

Unit 2 - Operative Part

• Provides a summarisation of all operative parts of the award
• This is the final decision made by the arbitrator
• Includes the summations and:
  • Jurisdictional Determinations
  • Preliminary Determinations
  • All applicable information and interest rates

Unit 3 - Final Draft

• Should include a read through and review of the maths
• Provide a list of sentences as to why the award is final
• Always make sure you know the rules

Award List

• Includes lists and disposal of: -All declarations needed -Award from both parties -Interest payable for each party -The compliance requirements and dates -Work to create rules

Award Conditions

• Termination of awards in article 32 of the UNCITRAL Rules -When the arbitrator gives the award -Subject to error correction -Set aside actions

Article 33

• Considers the correction and interpretation of additional awards and provides a 30-day review period

Article 34

• Can be reversed on any of the parties actions by requesting the award is "set aside" and cancelled
• Remember to incorporate legal systems and models in your entirety to succeed in court
• This process really looks to test arbitrators in order to stay in remit
• Final considerations should look at the financial analysis and what costs are where from who