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Lecture notes of 30 pages for the course International Commercial Arbitration at UvA (college notes)
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Week 1:Onno.hennis@amsadvocaten.nl
Tijmen.kleinbronsvoort@debrauw.com
Home assignments before the class: will be graded, do not count towards final grade.
Hand in at least 3 out of 5. Indicative of what we will ask on the exam. Due morning next week. Next
week is an example one. Binder: Allowed to take the exam.
What is arbitration?
Cornerstone: you can agree on arbitration
Binding decision (equal on courts).
Definition: A private dispute resolution mechanism, agreed to as a matter of contract, for
obtaining a final and binding resolution of disputes.
First step in arbitration: what did parties agree. Difficult if there is a dispute already. Easier to decide
before. Depends the scope, is it arbitrable, etc. agreement gives jurisdiction, but also the agreement
is important on how the process will be structured and organised. Possible not to enforce if it went
outside its mandate/scope so very important.
Parties can choose a lot themselves, except equality is important.
What is not arbitration?
Mediation: agreement between parties: is voluntarily. Not binding. Mediatior triest to help the
parties. Also agreements are not enforceable. while arbitration: when you commit to this, you
will get an award.
Negotiations
Binding advice: almost arbitration. Arbitration results in an arbitral award, document that you
can readily enforce. Binding advice; no verdict/judgement, it is an agreement between the
parties. He is rendering a binding advice on the parties. Binding and legally enforceable as a
contract. You have to go to court first. Bringing a matter of substance to court, bringing it as
breach of contract. While in arbitration; please enforce, limited review typically, as it is a verdict
already. Also expert determinations
= Alternative dispute resolution.
Normal court proceedings; not private, are public. (BTW: usually arbitration is no appeal).
Arbitration does need the court.
o Enforcement: Difference; state backs the court. Arbitration: cannot go tot he bailiff to
enforce it, still needs to go to the court. = leave for enforcement. Court can only deny it with
procedural agreements (has to meet minimum standards). But in principle it will grant it.
o Also precautionary assets; you need a court, also witnesses; obligation only by courts. Then
still go to the national courts. based on private act, only between a few people. Not erga
omnes: effective to everyone.
o If agreement on arbitration; indirect enforcement (exclusivity) of arbitration agreements.
Courts will not hear the case if there is agreement on arbitration.
Why arbitrate
Confidential
Neutral
Costs
Finality
Parties agreed; usually parties pay voluntarily.
Expertise; very specific areas. Not many non-legal experts.
Flexibility; own choice. Language/location place.
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, Sometimes only option (normal jurisdiction doesn’t work). Especially with investment arbitration.
(other hand you can say it undermines national courts, or take away cases).
Enforcement: not all court judgements are enforceable in other countries. Usually states
recognise it, and you can enforce it there. New York Convention.
Why not arbitrate
Limited scope of arbitral jurisdiction
o No criminal law; public interest. Erga omnes.
o Adoption; you cannot contract it. state regulates it no place for arbitration. Morality.
Mariage.
o Insolvency; sometimes, a claim of one party can be ruled. Actual declaration of bankruptcy
cannot be arbirated third parties need to now.
o soo private agreement but by virtue of states.
Arbitrators have limited powers;
o cannot witnesses etc, not normally third parties unless arbitration agreement. Exclusively
Multi party arbitrations;
o all of the contractual parties in same proceedings, otherwise not efficient. Is sometimes
problem in arbitration: you need consent/agreement.
Non signatories:
o if you want third party such as a witness, usually problem
Sometimes too much like court proceedings (formal).
Cost and time efficient.
o Can be expensive. High hourly rates. But one stop shop, might save appeal. And because so
expertise, you can save time/effort.
Split the baby?
o Possible a few of the options can be that half goes to one party, but not very academical.
Key elements of arbitration
Party autonomy
Arbitration agreement (consent to arbitrate)
o Doctrine of separability/autonomy: the agreement clause is different from the contract; if
the contract is invalid, the arbitration clause can still be valid. So existence is independent.
Including applicable law, can be different (usually not). Tribunal will assess first if it is
competent to rule over the matter.
o Doctrine of Kompetenz-Kompetenz: to solve whether it is competent to hear a case, 2
solutions; if rejects jurisdiction; assume doesn’t have jurisdiction, go back to state court. Or
say: we go to arbitration, and have the arbitral tribunal itself which is competent or not.
Usually, because they don’t want to go to court. Article 16 of the Model law. It needs a small
competence to assess.
Seat of arbitration (lex arbitiri). Law applicable to the proceedings.
(Form of enforcements (also more sets of law).)
Arbitral institutions (and institutional rules). Is private rules made by the institutions. (Binder:
procedural rules, no substantive laws).
1958 New York Convention
Typical arbitral proceedings
Contract with arbitration clause
Dispute
Request for arbitration by claimant (answer to request by respondent).
Establishment of the tribunal
Terms of reference
2
, Exchange of written submissions
Evidentiary meetings (witnesses/document production).
Oral hearing (and post hearing briefs).
Award or settlement
Enforcement or setting aside
Assignment example:
Mr Pitt director
|
Pipes and Cranes Holding
Arbitration clause Parent guarantee
Steel pipes |
Pipes: ------------------------- Construction Mechanics LLC
Seller Buyer
Jolie director Purchase vehicle for parent.
Holding is director.
Seller requests the tribunal to find that
Buyer has to pay the purchase prise
Holding is also liable for the payment of purchase price.
They say: no parties to arbitration agreement.
Advice on the seller:
Is there an agreement, has Holding consented to the clause?
Thus: look to the arbitration agreement: all disputes arising to the Parties, the contract defines
the seller and the Buyer. Literally this is only Pipes and Construction. The classical arbitration
clause is just 2 parties. “disputes between parties”.
Clause; we guarantee, can say it is not part of arbitration clause (“present contract”). Question, is
going to arbitration a clause that you can enforce?
Look at parties intentions. In NL very important. You need to now which law governs the
applicable law of the arbitration clause. How to interpret the contract.
Holding only shareholders.
Represented by the director of the holding. (have the same personen representing/signing: mr
Pitt).
Buyer is just a vehicle. is only a shell. Can say; maybe used to shield the business from
liabilities, can say it is not just.
Group of companies doctrine: implied consent. Separate legal entities, but so close; piercing
corporate veil; see both two as two companies. (Bopaul or dow chemical case?).
You have to know the references to caselaw, but focus on things more discussed in detail! Important
to grasp the concept.
Way of answering IRAC. (Sometimes conclusion first).
Issue
Rule
Analysis
Conclusion
Use this in home assignments and in the exam.
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