ADR Notes Midterm PDF

**ADR** - ADR is an \'alternative\' to traditional litigation settings (civil and commercial courts) which reduces the costs (time, money) of the judicial process - Based on **principles** of **effectiveness, legal certainty,** and **proportionality** - **Voluntary:** parties mu...

**ADR** - ADR is an \'alternative\' to traditional litigation settings (civil and commercial courts) which reduces the costs (time, money) of the judicial process - Based on **principles** of **effectiveness, legal certainty,** and **proportionality** - **Voluntary:** parties must agree to submit their dispute to the ADR Program   **Methods** **Hererocomposition:** a **third party intervenes** and makes a **binding** decision (not a mere presence in process) - **Arbitration**: an arbitrator rules a decision - Unlike judicial process, they are a **specialist,** the process is **private** and confidential, and **parties choose the arbitrator** and even part of the rules - **Judicial process:** legal system with specific procedural requirements and a judge making a binding decision **Autocomposition:** parties reach the solution. A third party can intervene, but decision not binding - **Negotiation**: discussion among parties in order to reach an agreement - **Mediation**: a neutral party **facilitates** the discussion - **Conciliation**: a neutral party **guides** the discussion and **proposes solutions** **NEGOTIATION** **Negotiation: Autocompositive** ADR method that requires parties to discuss in order to reach an agreement   **Dispute components** - **Problem** - **Positions:** parties stance/opening demands - **Interests:** needs behind positions Possible agreement: identify shared interests (despite differing positions) and understand the risks perceived by other parties (overlapping dangers)   **General elements in negotiation** 1. **Motivation and needs** of the parties 1. **Legitimacy** of the process 1. **Conflict management (communication)** 2. **Alternatives (BATNA)** 1. **Commitments** from both sides   **BATNA (Best Alternative To a Negotiated Agreement)** - **Definition: best alternative** a party can take if negotiations fail and no agreement - **Purpose:** provides leverage and **sets a reservation point (*minimum* acceptable outcome** a party will accept**)** - **Tunnel effect:** narrow focus on BATNA can limit flexibility -   **ZOPA (Zone of Possible Agreement)** - **Definition:** the **range** where **both parties accepted outcomes overlap,** in **between BATNAs** of both parties   **Types of Negotiation** - **Distributive: competitive**, wine-lose; parties aim to get largest share - **Integrative: collaborative,** win-win; focus on solving the problem with **mutual benefits** - Based on trust, superior negotiating outcomes   **Simple vs complex negotiation** - **Simple:** specific problem, **short term** - **Complex: multiple issues**, often **long-term**   **Key Steps in Negotiation (Harvard Law School)** 1. Clarify **needs and positions** 2. Assess **BATNA** and **reservation points** 3. Focus on details to avoid misunderstandings   **Stages of Negotiation** 1. **Preparation:** gather information and plan 2. **Positioning:** state demands 3. **Clarification:** ensure mutual understanding 4. **Bargaining and problem solving:** find solutions 5. **Conclusion:** finalise and implement agreement   **Traits of a good negotiator:** charisma, patience, honesty, good listener, persuasive, assertive, problem solving skills **Common mistakes:** poor planning, accepting bad deals, competing over collaborating, unethical behaviour, communication breakdowns **CONCILIATION** Conciliation vs mediation - Conciliator: active role (proposes solutions) - Mediator: guides discussion, parties reach solutions themselves   CONCILIATION - Regulation: [Voluntary Jurisdiction Spanish Act (15/2015), Articles 139-148] \[don't need to know acts\] - Process: - Request filed at courthouse, handled by a District Judge (not actually qualified in law), or Secretary of the court of first instance or Commercial Court - Request admitted (or not) within 5 days - Admission of request pauses the prescription period - Proceeding: - Solicitor and barrister not compulsory - Parties express demands, conciliator helps reach an agreement - Agreement results in a written record, else the conciliator drafts a failure report - Enforcement: agreed record enforceable by courthouse where conciliation occurred (by a real judge) - Roles of Conciliator in the Spanish System: - District Judge: Small courthouses Secretary of the Court of First Instance: Civil nature disputes - Secretary of the Commercial Court: Commercial nature disputes   MEDIATION - Mediation: Voluntary agreement reached by two or more parties with guidance from a neutral third party (mediator) - [Prohibition of criminal, administrative, and labour mediation]   Principles in mediation - Voluntary - Equality: in time and opportunities (etc), not necessarily the *same position* - Impartiality of mediator - Neutrality - Confidentiality: proceedings are private The mediator - Official degree and specific training (and civil liability insurance) - Mediation training examined by the Ministry of Justice and several government agencies with public functions   Mediation Process: 1. Request for initiation: both parties agree to mediate 2. Briefings: exchange of information 3. Sessions: proceedings of the mediation 4. Conclusion: agreement reached and enforced   The mediation agreement (enforceability) - Can cover all or part of the issue - Signed by both parties - Copies kept by both parties and mediator - To become enforceable, parties can have the agreement legalised by a Notary Public   Directive 2008/52/EC on mediation - Purpose: set minimum mediation standards in the EU (quality) - Scope: applies to cross-border disputes when at least one party is domiciled in a Member State - Mediation can be voluntary, court-ordered, or compulsory by national law - Member states encourage training of mediators - and that mediation conducted in effective, impartial, and competent way - Mediation processes are confidential - Agreements can be enforced (may require explicit counterparty consent) - Member States should encourage the general public to use mediation and inform on available mediation services (mediators, organisations) - During the process, expiry of limitation or prescription periods shall be paused   European Code of Conduct for mediators - Issued by the [European Commission for the Efficiency of the Justice in 2018] - Several principles must be followed: - Independence - Impartiality - Confidentiality - Fairness during the process **ARBITRATION** **Historical background timeline** - **1974 Jay Treaty:** 3 arbitral commissions to settle disputes from American Revolution - **19th C:** Ad hoc tribunals established to handle foreign claims - **1899 Hague Conference** on the pacific settlement of international disputes: permanent basis, arbitration for settling disputes between states based on legal respect and loyalty to the award - **1922: Permanent Court of Justice** (now **International Court of Justice** since **1945)** - **1923 International Court of Arbitration**: originally devised for the settlement of disputes between states, then started offering arbitration services for controversies between States and individuals or cooperation - Still exists but cases now usually sent to **ICC** - **1928 Geneva General Act:** established arbitral tribunals - adopted by the League of Nations, reactivated by the UN in 1949 (arts17-28) - establishes the nomination of the arbitral tribunal - Arbitral tribunal shall consist of 5 members - **Regional Treaties:** various treaties across Americans and Europe to establish arbitration - General Treaty of Inter-American Arbitration 1929 - American Treaty on Pacific Settlement of Disputes 1948 - European Convention for the Peaceful Settlement of Disputes (European Council 1957) - **1945: International Court of Justice** (Permanent Court of Justice, renamed)   **Basis and Concept of Arbitration** - **Arbitration:** parties submit disputes to a third party **(arbitrator)** who rules a **binding decision** - **heterocompositive** - Characteristics: **confidential, private,** allows parties to **choose arbitrators** and avoid court (waive right to judicial process) - **Principles:** confidentiality, neutrality, independence, and efficiency   +-----------------------------------+-----------------------------------+ | Advantages | Disadvantages | +===================================+===================================+ | - Confidentiality | - Lack of transparency | | | | | - Sometimes saves money and | - Uncertain results | | time | | | | - Limitations of the arbitrator | | - Choosing the place of the | power | | arbitrator | | | | - May not be suitable for | | - Final and enforceable award | collective claims (as | | | voluntary) | +-----------------------------------+-----------------------------------+   **National and International Arbitration** - **Domestic arbitration:** disputes within a single country\'s jurisdiction - **International arbitration:** involves multiple countries (parties or legal matters beyond jurisdiction of one) - **Ad hoc vs institutional Arbitration:** ad hoc gives **parties control** of the process (number/qualifications of arbitrators, law/rules applicable, place); institutional is governed by a **set of rules**   **Arbitral Proceedings** 1. **Case filed** 2. **Arbitrator selection** 1. **Preliminary hearing**: both parties express opinions, aims etc 2. **Presenting evidence** and documentation (**timelines**) 3. **Hearings** (not compulsory and not common in fast-track arbitration, however **both parties must agree *not* to have one**) 4. **Post-arbitration briefs** (sometimes don't exist, depends on where?) 5. Arbitration **award** 6. **Enforcement** of the award (mechanisms)   **The arbitrator** - **Role:** impartial **specialist** making **binding** decisions - **Skills**: expertise/knowledge, conducting research/investigation, handling issues, preparing and writing the award, ethical conduct, good communication, conflict management   **Arbitral awards** - **Binding decision** made by the arbitrator or tribunal of arbitrators after the arbitration process - Structure: overview, arguments, analysis (by tribunal/arbitrator), conclusion   **Challenging an Award** - *Usually* requires **application** to a court (but sometimes parties agreement provide appellation proceedings within the arbitration) - Possible grounds include **fraud, arbitrator misconduct,** or **excess of power** - *Not the same* as correcting an award **Enforceability** - **Geneva Convention (1927):** awards **enforceable in other countries** (context: League of Nations) - **New York Convention (1958):** enforcement of **foreign and non-domestic** awards (context: United Nations)   \-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--   **ARBITRAL CLAUSE** - **Arbitral clause:** clause requiring disputes to be resolved via arbitration. - Essential elements include the **legal capacity** of parties (ATS deals with), **agreement in writing (**Art II.2 [New York Convention 1958]) and validity of the subject matter **(not prohibited)** *Scott v Avery* (1855): arbitration clauses are *not* against public policy but actually good for it **Pathological clauses:** arbitration clauses with **defects (**ambiguity, poorly drafted, etc**)** - can either be **curable** or **incurable** (depending on deficiency)- if incurable, is invalid - Examples: absence of essential element, lacks certainty (will of parties unclear), ambiguity or confusion, inapplicability (eg arbitrator resigns)   **\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--EVIDENCE** **Evidence in Arbitration** - **Types of evidence: direct** (eg witness testimony) and **circumstantial** (indirect deductions) - If there is a counterclaim, the answer to it can contain evidence - If a party does not have a specific piece of evidence but believes it would be useful, it shall be explained in the statement (for the arbitrators to find or the counterparty to provide) - **Remember**: in the ICC the moment of the statement and the request for arbitration is **the same** - **Full proof:** evidence sufficient to eliminate **reasonable doubt** - Timing: evidence presented with **statements** (claims, defences, counterclaims) **Things that have to be proven** - The **facts** that the parties **claim** to be true - **Foreign law** (or the law of your own country when the arbitration is international) - **Customary law** (as it is common to have different customs depending on the place)   **Means of Evidence** - **Documentary proof:** evidence in **written form**, documents can be public, private, electronic - **Questioning parties:** oral statements from questions by both parties representatives - without obligation to tell truth (unlike witnesses) - Party has to be of legal age and full capacity - **Witness cross-examination:** representatives ask questions to witnesses who are obliged to tell truth - Written statement to arbitral tribunal explaining witnesses importance, name, and proposed questions required to have witness at oral hearing - *Can* be underage, but capacity must be proved - Can be direct or indirect witnesses - Conducting investigation: Ask party background questions; use clear and simple language; avoid leading questions; allow party/witness to fully explain - **Expert reports:** experts assist in technical issues *but* remain impartial   **Recognition:** - **arbitrators directly observe** or investigate places, people or things relevant to the case - **Principle of immediacy:** the judge (in this case arbitrator) should be able to appreciate in a *direct way* everything they are deciding on (eg going to a location, seeing something physical)   **Expert reports** - Experts can either be **proposed by the parties** or the **tribunal** - Assist the court with **technical or specialist matters** - Of **legal age** and have **specific qualifications** - Can be **disqualified as experts** if **too familiar** with a party - Their role in the process is unrelated to the circumstances of the case (not witnesses, but experts) - Have to be as **impartial** as possible - Possibility of **contradictory reports-** the tribunal decides whether to ask for another report *or* if one of the reports is more convincing   - ICC art 25.3: tribunal ability to appoint experts for reports after consulting parties (parties can request to question any expert at hearing) - UNCITRAL art 29: same as above (but consultation with parties required) - *however* more detailed procedural framework for consultation with parties, raising objections, and document inspection- eg parties can express opinions in writing, parties are *entitled* to inspect documents used by expert (in ICC, only on request) **INTERNATIONAL ARBITRATION** **[UNCITRAL ARBITRATION RULES]** **Overview:** - Origin: derived from international trade law under the United Nations system - Broad applicability- widely used (in many countries) due to adaptability and compatibility with both institutional and ad hoc arbitration, **default** in many instances Historical background - **1976:** initial publication of UNCITRAL Arbitration Rules - **2010:** Revision of rules to improve procedural efficiency - **2013:** Introduction of UNCITRAL Rules on Transparency for Treaty-based Investor-State Arbitration - **2021:** Adoption of UNCITRAL Expeditated Arbitration Rules - Come from international trade law within the united nations   KEY ELEMENTS OF THE UNCITRAL RULES UNCITRAL Rules on Transparency for Treaty-Based Investor State Arbitration (**2013**) - Resolution 68/109, adopted by UNGA Dec 16 2013 - **Increases transparency** in **treaty-based Investor-State** disputes (countries sued by foreign investors) - Applicable in investor-State arbitrations under various rules ***(other than* UNCITRAL rules**) or in ad hoc proceedings - **Transparency provisions:** - **Public disclosure** of essential documents ***not* confidential** (eg notice of arbitration statements of claim/defence, tribunal decisions/awards, transcription of hearings, all written submissions, table of documents/reports and witness statements ([but not the exhibits themselves])) - **Public hearings,** *[unless]* confidential or protected information (eg business secrets or national security) involved - **Art 7:** confidential or protected information includes **confidential business information, protected information** (under treaty or law of respondent state), information which would **impede law enforcement)** - Non-disputing third parties may submit written opinions on issues within scope of dispute   UNCITRAL Expediated Arbitration Rules **(2021)** - Streamlines proceedings to ensure quicker resolutions - Regulated in **appendix** - **Key features:** - **Agreed** by parties - **Single arbitrator: appointed jointly** by parties or, if not agreed **within 15 days**, appointed by an **authority** (eg Secretary General of the Permanent Court of Arbitration) - Only held when **necessary** - Arbitrator/arbitral tribunal can **reject evidence** if **unnecessary** - **Award** ruled within **6 months**   **Scope of the rules:** broad range of disputes - **Private Commercial Parties:** without arbitral tribunal (institutional involvement) - **Commercial disputes** administered by arbitral tribunals (some use subsidiary set of rules) - **Investor-State** and **State-State** Disputes   PRE-PROCEDURAL STAGE **Notice of arbitration** Includes: - Demand for arbitration - Names, contact details, arbitration agreement, and identification of contracts (or other legal instrument) related - Brief claim **description and amount** involved (if applicable) - **Solution** sought - Proposed **number** of arbitrators, **language**, and **location** of arbitration ([if not previously agreed between parties)]   **Response to notice of arbitration** - Submitted within **30 days** and includes: - Name and contact details of each respondent - **Response to information:** lack of jurisdiction, **counter proposals** for arbitrators, description and information of **counterclaims**   **Appointing the arbitrator(s)** - **Appointing Authority**: Provides a way to appoint an appropriate and qualified arbitrator(s) to determine a dispute - Either **agreed** by parties or **proposed by one** party - **Single arbitrator or 3 arbitrators** (each party appoints one, who elect third as tribunal **president**) - **Default is 3** if parties do not agree to have one **within 30 days** receipt of notice of arbitration - Arbitrators can be **challenged within 15 days** (after notice of appointment) on basis of **impartiality or independence** - Parties *may agree* on challenge - Result: arbitrator may withdraw from their office and replaced - Note: hearings already taken place are *not repeated* unless decided by tribunal   ARBITRAL PROCEEDINGS **Timetable and Hearings** - Tribunal established provisional **timetable** for hearings - Hearings **can be skipped** if documentary evidence is insufficient or not requested - Hearings allow for **cross examination of witnesses** (including via telecommunication) but this can *also* happen by written statements - Communications to the arbitral tribunal by one party shall be **communicated** (copies) by that party to all other parties involved **Place and language** - Both language and place of arbitration **determined by tribunal (**with regard to circumstances) if not **agreed by parties** - Documents in another language accompanied by translation into agreed language   **Written submissions** - **Statement of Claim:** includes name and contact details of parties, details of the claim (issues), supporting facts, legal grounds, solution sought - Necessary to include copy of contract/other legal doc related - **Evidence** - **Statement of Defence:** response to claim (to C and each arbitrator) and all particulars, documents/**evidence** of R - Period of time to submit depends on arbitral tribunal - Can be a **counterclaim** - **Amendments to submissions:** claims and defences can be amended *[unless]* considered **inappropriate** by tribunal - Claim tribunal doesn't have **jurisdiction** raised in or before statement of defence/counterclaim   **Interim Measures (Article 26)** - **Interim measure:** any temporary measure that tribunal orders party (any time before award) - Difficult to be enforced, tribunal requires national jurisdiction - **Conditions** for granting: - **Jurisdiction** over case - **Likelihood of success** for the requesting party - **Necessity** - **urgency** - **Proportionality** - **Example:** freezing assets or securing evidence   **Evidence** - Parties bear burden of proving facts to support their claim/defence - **Witnesses** typically present **written statements** unless arbitral tribunal directs otherwise - **New evidence** produced by parties if requested by tribunal - Tribunal decides **admissibility** of evidence **Expert reports** - Tribunal-appointed experts may be called to asses specific issues, with parties **able to object** to their **qualifications or impartiality** - Expert reports **communicated** to parties, who may provide written opinions and interrogate the expert at a hearing - Parties give expert any information, documents or goods required   AWARD AND POST-AWARD PROCEEDINGS **Award:** - Decided by **majority** of arbitrators (unless only one) - Includes **reasoning** (unless parties agree on none)**, signature** (of arbitrators only)**, date and location** of arbitration - **In writing** and **binding** - **Copies** given to parties - Made **public** with **consent** of parties or when **legally imposed** Note: If necessary in exceptional circumstances, the Arbitral Tribunal itself or on application of a party **reopen hearings** anytime before award   **Settlement:** parties may settle before the award is made, with tribunal issuing an **order for termination** of proceedings and accept the settlement - Can also be terminated when proceedings become unnecessary or impossible - **Order for termination signed by arbitrators** and given to parties   **Interpretation and correction of the award** - Parties may **request interpretation or correction** of the award within **30 days** of receipt, with **notice** to other parties - Request for interpretation in writing within **45 days** - Corrections made within **30 days**   **Costs:** - Include: tribunal fees, reasonable travel of arbitrators or witnesses, reasonable costs of expert witnesses, other fees/expenses - Usually **borne by unsuccessful party,** sometimes **apportioned** - Are **fixed** by tribunal in the **final award** **INTERNATIONAL CHAMBER OF COMMERCE - INTERNATIONAL COURT OF ARBITRATION )ICC=** **Overview:** - States regulated in an **appendix** - ICC International Court of Arbitration provides **arbitration administration** but does **not directly resolve disputes itself** - **Assigns specific arbitral tribunals** for each case and has a broad list of arbitrators - Operates with a **secretariat** presided over by the Secretary General, responsible for **administrative duties** and **communication** **Request for Arbitration** - **Submitted to the secretariat,** which **notifies** both the claimant and defendant - Contains: contact details of both parties and their representatives, description of the dispute, solution sought by C relevant agreements (including arbitration agreement), and procedural matters (eg number of arbitrators, place and language)   **Answer to the Request** - Defendant must respond **within 30 days** (extendable by the secretariat) - Contents: details of the parties and their representatives (though **representation is optional,** almost always used), comments on the dispute, response to solution sought by C, observations on procedural matters - Response can contain **counterclaim,** which C has 30 days to reply   **Multiple parties** - A party **wishing to join an additional party** must submit a **request** to the secretariat, providing information on the original claim\'s case reference   **Representation of the Parties** - All parties have right to representation and must **notify** secretariat of representatives and any changes - The tribunal may take steps to avoid conflicts of interest with arbitrators due to changes in party representation **Constitution of the tribunal: arbitrator selection** - If not previously agreed on 3, one sole arbitrator is appointed - In a 3-member tribunal, each party **nominates** one arbitrator, and the third (**president)** is **appointed by the court** - The court **confirms** arbitrators, considering nationalities and other relevant factors   **Challenge of an arbitrator:** - Challenge to arbitrators independence or impartiality **submitted to secretariat within 30 days** after appointment or learning of facts forming the basis of challenge - The **ICC Court** decides whether to **admit or deny** the challenge **Replacement of an arbitrator** - Reasons - **Death** - **Resignation** accepted by the Court - **Challenge** accepted by the Court - **Joint request from all parties** accepted by the Court - The Court determines whether to follow the original nomination process and at what stage the proceedings will continue   **Place and Language** - Both place and language **fixed** by the court unless previously agreed by the parties - Tribunal can also choose a place, considering parties preferences   **Conservatory and Interim Measures:** - Tribunal can grant **interim measures** (in the form of an **order** or an **award)** at the **request of a party** - Parties may request interim or conservatory measures from a **judicial authority before the arbitration begins**, without affecting the arbitration agreement or tribunal powers   **Proceedings:** - The tribunal establishes the **facts of the case** and may: - Hear witnesses or experts appointed by the parties or the tribunal (in presence or absence of parties provided they were **duly summoned**) - Hold a **hearing if requested** by the parties or if tribunal deems **necessary** - Parties may appear in person or be represented, with advisors being optional **Award:** - Ruled within **6 months** (can be extended) - Based on **majority** of tribunal, if not then presidents opinion prevails (rare) - Must include **reasoning** - Before **signing,** the tribunal **submits the draft award** to the court for **approval,** and the court may modify it - **Award by consent:** agreement reached by the parties that takes the form of an award   **Correction and Interpretation of the Award** - The tribunal can **correct** clerical, computational, or typographical errors on its own initiative or following a request from the parties - A party can **request a correction** or **interpretation** of the award, which is submitted to the secretariat   **Costs and fees** - **Provisional advance:** an amount is paid after the request for arbitration to cover costs. It is typically considered a provisional payment by the claimant - **Arbitrator fees:** fees and expenses of arbitrators regulated in an **appendix** - The court can make **costs decisions** at any time during the proceedings - Final costs are **fixed in the award** - Even if the arbitration is terminated without an award, fees still apply   **Expediated Proceedings** - Regulated in Appendix - Expediated proceedings must be agreed upon by the parties and the amount in dispute must not exceed: - US \$2 000 000 (1 March 2017 and 1 Jan 2021) - US \$3 000 000 (after Jan 1 2021) - **Fast track measures** (eg written submissions only) **LCIA (LONDON)** Request for arbitration - Essential to initiate proceedings - Delivered to Registrar of LCIA (London Court of International Arbitration) - Contents: - Name, nationality, contact details of parties - Terms of the arbitration agreement - Brief summary of dispute - Procedural matters (eg seat of arbitration language, number of arbitrators)- if the seat is different from usual explain why - Confirmation of arbitration fee - Confirmation the other parties are informed   Response: - Given within 28 days of the respondent (and registrar) - Contents: - Confirmation or denial of all or part of claims stated in request (brief summary of position if denial) - Response to procedural matters - Confirmation all relevant parties (C and others) are informed   Registrar - Manages the administrative and judicial work for the arbitration - Receives all communications to the Court from any party authorised representatives arbitrators tribunal secretaries or experts - Communications copied and provided to all parties involved   Written communications - Via email or electronic means that provide a record of transmission - Electronic filing system operated by the LCIA - Method of communication pre-agreed by parties - Unless otherwise ordered by the tribunal, communication is considered received on the day it is transmitted - Plurality of parties - More than one claimant or respondent may be involved - Grouping into sides (eg all claimants or all respondents together) is common   Designation of the arbitral tribunal - The LCIA appoints arbitrators, considering the agreement between the parties - Default is sole arbitrator *[unless]* - Parties have agreed otherwise in writing or - The LCIA Court decides a tribunal of three is necessary (more than 2 is rare) - Nomination: parties can agree one or more parties or a third party (not LCIA Court) appoint arbitrator - If no written agreement between parties, [no] party can unilaterally nominate a sole arbitrator or presiding arbitrator - Replacement: occurs when justified doubts about arbitrators suitability, independence, or impartiality, or if the nominee declines the appointment - Fast-track: the appointment of an arbitrator can be fast tracked \[note: [only part which can be fast tracked\]]   Challenging an arbitrator - LCIA court can revoke an appointment - Upon its own initiative - At the written request of the other members of the arbitral tribunal - Upon written challenge by any party within 14 days of the tribunals formation or of becoming aware of the grounds for the challenge - Grounds for revocation - Arbitrator resigns - Arbitrator is seriously ill, refuses, or becomes unable or unfit to act - Doubts about impartiality or independence, specifically if: - The arbitrator acts in deliberate violation of the Arbitration Agreement - Does not act fairly or impartially as between the parties - Does not conduct or participate in the arbitration with reasonable efficiency diligence, and industry Seat of Arbitration, Language, Applicable law - Seat: default is London if parties do not agree (applicable law is of the sear) - Language: agreed by parties or assumed based on arbitration agreement, *[unless]* parties agree otherwise in writing - Documents and evidence in other languages translated - Default is one arbitrator unless otherwise agreed   Proceedings: Written Phase - Statements of Case and of Defence presented to the Registrar - The statement of defence can include a counterclaim and must be delivered within 28 days - Content: contact details of the parties, statement of facts, points at issue, solution sought, legal grounds, and any supporting evidence/documentation - Witnesses and experts: generally provide written statements or reports related to issues discussed   Proceedings: Hearings Hearings are a right and can take place at any phase of proceedings - An agreement to have an only-written process is possible - Can take place in person or virtually - Private unless parties agree otherwise - Oral questioning of witnesses may occur during hearings     Interim and Conservatory Measures - Reasons for Interim Measures: - To provide security for all or part of the disputed amount (via deposit, bank guarantee, or other means) - To order the preservation, storage, sale, or disposal of monies documents, goods, property, or other items under a party\'s control that relate to the arbitration - To order provisional relief (subject to the final decision in the award) such as payment of money or disposition of property - Application to State Court or Legal Authority - Before tribunal formation: a party may apply for interim measures to a competent state court or legal authority before the arbitral tribunal is formed - After tribunal formation: authorisation from the tribunal is required to apply Costs - Determined by LCIA in accordance with Schedule of Costs - The amount and proportions (to which parties will bear) specified in the award - If arbitration abandoned, suspended withdrawn or concluded *before* final award- parties jointly and severally liable to pay LCIA and Arbitrational Tribunal **CORTE DE ARBITRAJE DE MADRID** **Request for Arbitration** - Required to initiate proceedings - Contains: - Names, nationality, contact details of parties and representatives - Brief summary of dispute (contract, act, or transaction involved) - Solution sought - Agreement invoked - Procedural matters (seat, language, number of arbitrators, national/international arbitration) - Attached documentation: arbitral agreement, contract, representation info, fee payment   **Answer to the Request** - Respondent gives within **15 days** - **Contains:** - Names, nationality, contact details of respondent and representatives - Brief pleadings - Position on C requests - Response to procedural matters - Attached documentation: representation info, fee payment   **Written Communications** - Conducted **electronically** unless no email is designated (in submissions) - Deemed **received** when **delivered** to email, personally, or to known address (addresses registered officer, habitual residence)   **Third parties** - May join the **request to a pending proceeding**, court considers situation - Intervention by 3rd party is subject to a **no-conflict control** by the court. **Objections by the parties** must be **substantiated** **Administrative Secretary** - **Appointed by arbitrators** (with **consent** and **knowledge)** if **needed** - Handles administrative tasks (eg delivering communications) - [Does not make decisions]   **Designation of the Arbitral Tribunal** - Court designates a **sole arbitrator** if not previously agreed (or **3 member tribunal** if **complexity** requires it) - Sole arbitrator can be mutually agreed or nominated by the court - 3 member tribunal: each party nominates one, who nominate the third (**the chair),** and the **court confirms appointments**   **Challenging an arbitrator** - Based on **lack of independence/impartiality** and submitted **within 15 days** (of receiving communication of appt or learn facts giving rise to challenge) - **[Does not stay proceedings]** (unless considered otherwise by court)   **Replacement of an arbitrator** - Reasons include **death**, **resignation**, or **sustained challenge** - Proceedings **resume from when stopped** - Court may decide not to appoint substitute if proceedings closed and (or?) 3 member tribunal   **Seat of Arbitration and Language** - Agreed by parties, otherwise court decides based on circumstances and parties proposals   **Proceedings: Written Phase** - **First procedural order:** issued **within 30 days** of last arbitrators acceptance - Includes **procedural calendar** (usually 6 months, but can be extended) - **Statement of Claim:** within **30 days,** includes various (above) - **Statement of Defence:** responds in **time set by calendar,** can include **counterclaim,** accompanied by documents and evidence   **Hearings** - **[Not always held-]** dispute can be solely based on documentation - Can be held **without a party** (if failure to appear without reason) or **virtually/in person** (or combination of both)   **Evidence, witnesses, experts** - **Evidence:** burden of proof on the parties - Tribunal decides **admission, suitability, and relevance** - **Witnesses: written statement** and **sometimes cross-examined** during hearings - **Experts**: report on specific, concrete matters, independent   **Closing statement** - **last written submission** given **after hearing or** simultaneously given by parties (**within 15 days** [unless] calendar deadline otherwise) - Includes **summary, conclusion, and list of expenses** - Usually written but parties can agree to have oral   **Costs** - Determined in accordance with **annex** to the rules - **Amount** and **proportions** (parties will bear costs) **fixed in the award** - Specific fees include arbitrators fees, experts expenses, and other reasonable expenses   **The award** - Time limited to **6 months** after statement of defence (can be extended) [unless] otherwise agreed - **One or several** awards, **majority decision** if multiple arbitrators - In **writing** and **signed** by all arbitrators. - **Copies** for **all parties** *[and]* one extra, **deposited in archive** - Contains **reasons** (unless otherwise agreed)   **Correction of an award** - Parties may request within **10 days** (after award served) and court replies within **20 days** - **Note: One** and **two months r**espectively when ***international* arbitration** - Corrections include: errors in communication, misprints, clarification of part of award, additional awards not resolved in award, etc - Also can include rectifying parts of award that decide over *non-arbitral* subjects, when provided by applicable law   **Fast track proceedings** - **Agreed** by the parties, disputes **below 600,000€** - **sole arbitrator** [unless] otherwise agreed - Award **within four months** after the statement of defence is filed (can be extended for **2 extra months**) ** FAST TRACK ARBITRATION** **Overview:** - Accelerated procedures - may occur in **ad hoc arbitration** or **institutional arbitration** - **Examples** of institutions offering accelerated arbitration include: - American Arbitration Association - Institute of Stockholm Chamber of Commerce - German Institute of Arbitration **Key elements** - Strict time limits: - Apply to **parties:** - Time for choosing an arbitrator - Deadlines for submitting documentation - Preparing and conducting oral hearings - Apply to **arbitrators:** - Time limit for issuing the award - Limitation of procedural steps: - Written submissions limited in length and number - Hearings restricted in duration and scope - Documentation and evidence: different burden of proof approach; restricted time for witness examination **Principles:** - **Party autonomy:** freedom to choose arbitration, applicable law, procedural rules - **Equal treatment:** due process and fairness maintained - **Arbitration neutrality/impartiality** - **Enforceability:** awards must comply with legal standards to ensure enforcement **Advantages:** - Saves time for both parties - Focus on key issues and evidence; briefs and submissions are concise - Fewer delays: reduced opportunities for procedural stalling **Risks:** - Communication challenges: reliance on email, fax and telephone may lead to misunderstandings (especially without hearings) - Lower standard of proof: less comprehensive evidentiary analysis - Shortened awards: decisions may lack detailed reasoning; risk of recission under **Article V, Section 2(b)** of the **New York Convention** if contrary to public policy **Safeguarding procedural rights:** procedural limitations must [not] compromise procedural rights - Due process: access to defence and opportunities to prove claims - Insufficient time: time constraints must still allow adequate evidence preparation and submission - Fairness: proceedings must be equitable even with fewer hearings - Neutral arbitrators to ensure impartiality **Suggestions for improving fast-track arbitration** 1. Establish clear and transparent rules 2. Define strict but reasonable time limitations 3. Expedite arbitrator nomination procedures 4. Conduct focused and brief oral hearings (if held) 5. Ensure awards are clear, precise and enforceable +-----------------+-----------------+-----------------+-----------------+ | **UNCITRAL | **ICC | **LCIA** | **Madrid** | | (2021 | (Appendix)** | | | | Appendix)** | | | | +=================+=================+=================+=================+ | - Requires | - requires | - limited to | - requires | | party | party | cases of | party | | agreement | agreement | **exception | agreement | | | | al | | | - Sole | - applicable | urgency** | - sole | | arbitrator | to disputes | | arbitrator | | | below | - applies | | | - hearings | monetary | **only** to | - applicable | | only if | cap: **\$2M | forming | to disputes | | necessary | USD | arbitral | **below | | | (pre-2021) | tribunals | €600 000** | | - limited | and \$3 | or | | | evidence | (post-2021) | replacing | - award | | | ** | arbitrators | issued | | - awards | | | within **2 | | within **6 | | | months** | | months** | | | (from | | | | | statement | | | | | of defence) | +-----------------+-----------------+-----------------+-----------------+ **The Role of the Arbitrator** **Responsibilities** - acts as a neutral party to issue a final decision in the form of an award - reviews testimony and evidence submitted by the parties - presides over hearings or participates in a panel with other arbitration qualification and requirements - varies by institution and jurisdiction **Spain** (as per article 12 *Ley 60/2003)* - natural person with legal capacity, as long as professional regulations do not prohibit their appointment - nationality generally not restriction unless specifically agreed upon by parties ***duties:*** - interpreting and applying rules and laws (outlined in arbitration agreement, governing law typically specified in arbitral clause) - managing evidence and discovery: determines scope of evidence parties may present - conducting hearings: manages submission of testimony, documents, and agreements by parties - issuing the award: resolves disputes based on submitted evidence, testimony and arguments evaluation of evidence: - reviews documents and analyses questioning and cross-examinations - prioritises evidence and provides reasoning for decisions - dismisses insufficient or irrelevant proof - compares conflicting evidence to determine probative value **ruling the award:** - requirements: must include - identification of the parties and tribunal - content of the arbitral clause - summary of the dispute - positions of both parties - submitted evidence and its analysis - conclusion, cost calculation, and quantum of the dispute - date and signature - reasoning: award must provide clear reasoning to justify decision **replacement:** - procedures depend on governing institution - may occur due to lack of impartiality/independence, eg conflicts of interest **Hearing** 1. **greetings and introduction** - the arbitral tribunal introduces themselves, states the data of the hearing, and reads the names of the parties - legal representation specifies if the party is present and notes any procedural details (eg addition lawyers and their role) 2. **revision of documental evidence** - the tribunal reviews the evidence lists submitted by both parties: - **Claimant's Evidence List** - **Defendant's Evidence List** - Each piece of evidence is read and either admitted or denied - Denied evidence: the proposing party may respectfully challenge the denial with justifications - Parties may remind the tribunal of omitted evidence but cannot propose new evidence at this stage 3. **Questioning phase** - Questioning order: - **Experts** - **Witnesses** - **Parties** (if applicable/requested) 4. **Closing statements** - Claimant statement: summarises claims and solutions sought, linking them to evidence and reasoning presented during the hearing - Defendants statement: summarises solutions sought, emphasising their arguments 5. **closing the hearing** - the tribunal explains that they will review the evidence and issue an award - specifies the time frame for ruling the award - concludes with formal farewell **INVESTMENT ARBITRATION** **Overview:** - **investment arbitration:** procedure to resolve disputes between foreign investors and host states (Investor-State Dispute Settlement) - provides guarantees for investors, ensuring: - access to independent arbitral proceedings - an enforceable award - avoidance of potentially biased national jurisdictions **consent of the host state** - granted through 1. **international Investment Agreements (IIAs)** - Bilaterial Investment Treaties (BITs) - Free Trade Agreements (FTAs) - Multilateral Agreements 2. **Direct Investment Agreements** between the host state and foreign investors 3. **Domestic Laws** of the host state **Key institutional and ad hoc mechanisms** - **Institutions:** - International Centre for Settlement of Investment Disputes (ICSID) - Stockholm Chamber of Commerce (SCC) - Permanent Court of Arbitration (PCA) - International Chamber of Commerce (ICC) - **Ad hoc Arbitration:** commonly employs UNCITRAL rules **ICSID Convention** - **ICSID:** international institution for resolving disputes between investors and states - Established by a World Bank-backed multilateral treaty to promote international investment - **Headquarters: Washington DC (**European disputes resolved in **Paris)** **Bilateral investment Treaties (BITs)** - Agreements defining terms for private investment by nationals/companies of one state in another - Ensure **foreign direct investment (FDI)** with several guarantees **General Principles of Investment Protection** 4. **Fair and equitable treatment (FET)** - Standard in most **BITs,** rooted in **good faith, due process, and transparency** - Protects against **arbitrary or discriminatory actions** 5. **Full protection and security** - Obligation for **host state** to: - Prevent harm to investments (eg by state organs or private parties) - Protect physical, commercial, and legal interests 6. **Protection from expropriation** - **Direct expropriation:** legal transfer or physical seizure of property - **Indirect expropriation:** loss of control over property or its destruction - **Lawful expropriation:** must be **non-discriminatory,** for **public interest,** follow **due process,** and include **adequate compensation** - **Nationalisation:** a specific form of expropriation aimed at transferring property to state control 7. **Most-Favoured-Nation (MFN) Treatment** - Non-discriminatory policy requiring equal trade concessions to all partners - Established under the **World Trade Organisation (WTO)** rules 8. **Pacta Sunt Servanda:** - "agreements must be kept" (Latin) - Obligates voluntary agreements to be upheld - Core principle of international law