International Commercial Arbitration and the Arbitrator’s Contract

International Commercial Arbitration and the Arbitrator’s Contract

International commercial arbitration is a method of resolving disputes arising from international commercial transactions. It involves the parties agreeing to submit their dispute to an independent third party, known as an arbitrator or a panel of arbitrators, rather than going to court. The decision of the arbitrator is binding on the parties, which means that they must adhere to the arbitrator’s ruling.

The arbitrator’s contract refers to the agreement between the parties and the arbitrator(s) outlining the terms and conditions of the arbitration process. This contract typically includes the following elements:

1. Selection of Arbitrator(s): The contract will specify the method for selecting the arbitrator(s), which could include appointment by the parties, appointment by a designated institution (such as the International Chamber of Commerce or the American Arbitration Association), or selection from a pre-agreed list of arbitrators.
2. Arbitration Rules: The contract will specify the arbitration rules that will govern the process. Common sets of rules include the UNCITRAL Arbitration Rules, the ICC Rules of Arbitration, and the London Court of International Arbitration (LCIA) Rules.
3. Procedural Matters: The contract may address procedural matters such as the language of the arbitration, the place of arbitration, the number of arbitrators, the timeline for the arbitration proceedings, and the conduct of hearings.
4. Confidentiality: The contract may include provisions regarding confidentiality to ensure that the arbitration proceedings remain private and the parties’ commercial interests are protected.
5. Costs and Fees: The contract will specify how the costs of the arbitration will be allocated among the parties, including the arbitrator’s fees, administrative expenses, and other costs associated with the arbitration.
6. Scope of Authority: The contract will outline the arbitrator’s authority to make decisions on procedural matters, to issue interim measures, and to render a final award on the merits of the dispute.
7. Enforcement of Award: The contract may include provisions regarding the enforcement of the arbitrator’s award, including the applicable law for enforcement and any limitations on challenging the award.
8. Governing Law: The contract may specify the governing law of the arbitration agreement, which could be different from the substantive law governing the underlying contract.

Overall, the arbitrator’s contract plays a crucial role in defining the rights and obligations of the parties involved in the arbitration process and ensuring a fair and efficient resolution of their dispute.

International Commercial Arbitration and the Arbitrator’s Contract

In the realm of international commercial arbitration, the arbitrator’s contract plays a crucial role in defining the relationship between the arbitrator, the parties involved in the dispute, and the arbitration institution (if one is involved).

Here’s a breakdown of some key aspects:

Formation:

• The arbitrator’s contract is established through mutual consent: when the parties agree to the arbitrator’s appointment and the arbitrator accepts the responsibility.
• This agreement can happen in various forms, such as signing an arbitration agreement, accepting an appointment notification from an institution, or even through exchanging emails.

Nature and Effect:

• The legal nature of the arbitrator’s contract is a subject of ongoing debate. Some argue it’s a contract sui generis, meaning it has its own unique characteristics within the legal framework. Others view it as a standard contract governed by general contract principles.
• Regardless of the specific legal characterization, the contract outlines the rights and obligations of the involved parties:
  • Arbitrator: Duties include acting impartially, conducting the arbitration diligently, and issuing an award within the stipulated timeframe.
  • Parties: Responsibilities involve cooperating with the arbitrator, complying with procedural rules, and bearing the costs of the arbitration.
  • Institution (if applicable): Roles include administering the arbitration process, appointing/removing arbitrators, and collecting fees.

Key Points Addressed:

• Appointment and removal of arbitrators: The process for selecting and potentially replacing arbitrators if necessary.
• Challenges to arbitrators: Grounds for parties to object to an arbitrator’s appointment.
• Duties and rights of arbitrators: Responsibilities and entitlements of the arbitrators throughout the process.
• Confidentiality and disclosure: Obligations regarding maintaining confidentiality and disclosing relevant information.
• Fees and expenses: Determining the arbitrator’s compensation and how arbitration costs are divided.

Understanding the arbitrator’s contract is vital for all parties involved in international commercial arbitration. It ensures a clear framework for conducting the arbitration process fairly, efficiently, and in accordance with established principles.