University of Amsterdam
Course number: 354INQ6HY
International Commercial Arbitration (ICA)
Complete summary incl. lecture and seminar notes
Week 1 - Summary
Global dispute resolution
International trade and cross-border investment conflicts between states, companies,
individuals negotiation? fair, reliable, enforceable method of resolution.
- Domestic disputes: national courts or arbitration under local law.
- International disputes: without an arbitration agreement, the claimant must go to the
defendant’s home court.
Disadvantages: unfamiliar language, unsuitable procedures for international cases,
and judges with little experience in transnational matters.
International arbitration (soft law)
- Neutral and efficient alternative to national courts.
- Parties agree to submit their dispute to independent and impartial arbitrators.
- The tribunal must consider both sides’ claims and defences fairly.
- The tribunal renders a binding written award.
- The award must be performed without delay, but if necessary, awards can be
recognised and enforced internationally through national courts.
International Chamber of Commerce (ICC) in Paris:
- First chamber with focus solely on international commercial disputes.
- Provided a standard form ICC arbitration clause incorporating the ICC Rules by
reference, which results in a near-comprehensive transnational procedural code.
Model Law: important to review how it’s applied in practice through a country’s court
system.
- The adoption by a country of an international arbitration law helps reassuring
investors and attracts potentially profitable businesses, as well as the business of
arbitration itself.
Investment arbitration
Traditionally, international arbitration mainly dealt with disputes arising out of contracts.
These contracts contained arbitration agreements between private parties.
‘Arbitration without privity’
, - Investment arbitration introduced the concept of arbitration without privity.
- This means that a foreign investor can bring a claim directly against a sovereign state,
even without a contractual relationship.
- Possible through bilateral and multilateral investment treaties: states give advance
consent to arbitrate disputes with foreign investors.
- Investment arbitration cases: issues of public interest, subject to less confidentiality
than commercial or contractual arbitration.
An arbitration bar
Arbitration bar of specialist arbitration lawyers and advocates located worldwide. Each of
these practitioners is regulated by their own national professional code of behaviour.
Outline of an international arbitration
Agreement to arbitrate
Consent: a valid agreement between the parties to submit any disputes or differences to
arbitration.
Recognition and enforcement of an award may be refused if the parties to the arbitration
agreement were under some incapacity or if the agreement was not valid under its own
governing law (Art. V(1)(a) New York Convention, Art. 36(1)(a)(i) Model Law).
1. Arbitration clause in a contract: before any dispute has arisen.
2. Submission agreement: submit an existing dispute to arbitration.
3. Agreement that arises under international instruments.
- Investment treaty: a state gives a standing offer to submit future disputes with
qualifying investors (not a party) to international arbitration.
Place of arbitration
The seat (or legal place) chosen will establish the jurisdiction of the local courts of that place
regarding any review of the award. This should be in an ‘arbitration-friendly’ state, meaning:
- Local courts do not unduly interfere with the arbitral process.
- The state is a party to the New York Convention, ensuring easy recognition and
enforcement of awards.
Hearings don’t need to take place at the seat of arbitration; they may be held elsewhere for
convenience and efficiency. Usually at a neutral place, so that no party has the advantage of
‘playing at home’.
Commencement of an arbitration
A formal notice must be given to start an arbitration.
- In ad hoc arbitrations, this notice will be sent or delivered to the opposing party.
For example, Art. 3 UNCITRAL Rules.
- In institutional arbitrations, this notice will be given to that institution by a ‘request for
arbitration’ or similar document. The institution then notifies the respondent or
respondents.
, For example, Art. 4.1 ICC Rules.
What should be set out in the notice of arbitration?
- A reference to the arbitration clause in the contract (or to any other form).
- A brief description of the claim
- An indication of the amount involved in the dispute.
- A statement of the relief or remedy sought
- Proposals for the appointment of a sole arbitrator or of the arbitral tribunal.
Appointment of the arbitral tribunal
The parties in arbitration can help choose the arbitrators who will decide their dispute. This
involvement in selecting the tribunal often gives the parties greater confidence in the fairness
and reliability of the arbitration process.
- Look at: arbitral experience, legal or cultural background, linguistic abilities, and
technical knowledge.
Independence:
- Objective test: has nothing to do with the arbitrator’s state of mind.
- Absence of financial, professional, personal links or relationship between the
arbitrator and a party.
Impartiality:
- Subjective test: primarily involves a state of mind.
- Focuses on an arbitrator’s ability to analyse the dispute without prejudgment. Absence
of actual or apparent bias of the arbitrator in attitude or reasoning, either in favour of
one of the parties or in relation to the issues in dispute.
Art. 12(1) Model Law: when a person is approached in connection with his possible
appointment as an arbitrator, he shall disclose any circumstances likely to give rise to
justifiable doubts as to his impartiality or independence.
Art. 11(2) ICC Rules: the prospective arbitrator shall disclose in writing to the Secretariat any
facts or circumstances which might be of such nature as to call into question the arbitrator’s
independence in the eyes of the parties, as well as any circumstances that could give rise to
reasonable doubts as to the arbitrator’s impartiality.
→ IBA Guidelines on Conflicts of Interest in International Arbitration.
Soft law: universally accepted and followed by the vast majority of parties and
tribunals.
(i) A sole arbitrator
, When the dispute is to be decided by a sole arbitrator, the parties normally have the right to
agree jointly on the arbitrator. If the parties cannot agree, a ‘fall-back’ or ‘default’ provision
applies. The ‘appointing authority’ will then select and appoint an arbitrator.
- For example, Art. 12.3 ICC Rules.
- Institutional arbitration: the institution under whose rules the arbitration is to proceed
(ICC Rules).
- Ad hoc arbitration: the relevant domestic court (Model Law).
(ii) A tribunal of three arbitrators
In a three-member tribunal, each party usually nominates one arbitrator. The third arbitrator
acts as the presiding arbitrator or chair. Parties may agree directly on this appointment or
delegate the task to the two co-arbitrators.
If delegated, the co-arbitrators consult each other to agree on a suitable chairperson. Parties
are typically informed of the proposed choice only to identify potential conflicts, not to
exercise a veto.
- In institutional arbitration, the supervising institution will appoint the third arbitrator.
In UNCITRAL ad hoc arbitration, the appointing authority chosen by the parties (or, if none is
agreed, the Secretary-General) makes the appointment.
Arbitral proceeding
The rules that govern an international arbitration are:
(i) The mandatory provisions of the lex arbitri (the law of the place of arbitration);
(ii) The arbitration rules that the parties themselves may have chosen, such as the
rules of the ICC or UNCITRAL.
Within the broad outline of any applicable rules, parties to an international arbitration are free
to design (‘tailor’) a procedure suitable for their particular dispute.
Ending the dispute
A settlement is frequently reached between the parties. Rules of arbitration usually make
provision for this.
- For example, Art. 36.1 UNCITRAL Rules.
Before the award is made: the tribunal will issue an order for the termination of the
proceedings or record the settlement in the form of an arbitral award.
If the parties themselves cannot resolve their dispute, the power and duty of the tribunal is to
resolve it for them by making a binding decision, in the form of a written arbitral award.
Any failure by a tribunal to act judicially (respecting equality of parties, with each party
allowed to present its case) may be sanctioned by annulment or non-enforcement of that
award.
Enforcement of an award
Arbitral award: a binding decision on the dispute between the parties.
Course number: 354INQ6HY
International Commercial Arbitration (ICA)
Complete summary incl. lecture and seminar notes
Week 1 - Summary
Global dispute resolution
International trade and cross-border investment conflicts between states, companies,
individuals negotiation? fair, reliable, enforceable method of resolution.
- Domestic disputes: national courts or arbitration under local law.
- International disputes: without an arbitration agreement, the claimant must go to the
defendant’s home court.
Disadvantages: unfamiliar language, unsuitable procedures for international cases,
and judges with little experience in transnational matters.
International arbitration (soft law)
- Neutral and efficient alternative to national courts.
- Parties agree to submit their dispute to independent and impartial arbitrators.
- The tribunal must consider both sides’ claims and defences fairly.
- The tribunal renders a binding written award.
- The award must be performed without delay, but if necessary, awards can be
recognised and enforced internationally through national courts.
International Chamber of Commerce (ICC) in Paris:
- First chamber with focus solely on international commercial disputes.
- Provided a standard form ICC arbitration clause incorporating the ICC Rules by
reference, which results in a near-comprehensive transnational procedural code.
Model Law: important to review how it’s applied in practice through a country’s court
system.
- The adoption by a country of an international arbitration law helps reassuring
investors and attracts potentially profitable businesses, as well as the business of
arbitration itself.
Investment arbitration
Traditionally, international arbitration mainly dealt with disputes arising out of contracts.
These contracts contained arbitration agreements between private parties.
‘Arbitration without privity’
, - Investment arbitration introduced the concept of arbitration without privity.
- This means that a foreign investor can bring a claim directly against a sovereign state,
even without a contractual relationship.
- Possible through bilateral and multilateral investment treaties: states give advance
consent to arbitrate disputes with foreign investors.
- Investment arbitration cases: issues of public interest, subject to less confidentiality
than commercial or contractual arbitration.
An arbitration bar
Arbitration bar of specialist arbitration lawyers and advocates located worldwide. Each of
these practitioners is regulated by their own national professional code of behaviour.
Outline of an international arbitration
Agreement to arbitrate
Consent: a valid agreement between the parties to submit any disputes or differences to
arbitration.
Recognition and enforcement of an award may be refused if the parties to the arbitration
agreement were under some incapacity or if the agreement was not valid under its own
governing law (Art. V(1)(a) New York Convention, Art. 36(1)(a)(i) Model Law).
1. Arbitration clause in a contract: before any dispute has arisen.
2. Submission agreement: submit an existing dispute to arbitration.
3. Agreement that arises under international instruments.
- Investment treaty: a state gives a standing offer to submit future disputes with
qualifying investors (not a party) to international arbitration.
Place of arbitration
The seat (or legal place) chosen will establish the jurisdiction of the local courts of that place
regarding any review of the award. This should be in an ‘arbitration-friendly’ state, meaning:
- Local courts do not unduly interfere with the arbitral process.
- The state is a party to the New York Convention, ensuring easy recognition and
enforcement of awards.
Hearings don’t need to take place at the seat of arbitration; they may be held elsewhere for
convenience and efficiency. Usually at a neutral place, so that no party has the advantage of
‘playing at home’.
Commencement of an arbitration
A formal notice must be given to start an arbitration.
- In ad hoc arbitrations, this notice will be sent or delivered to the opposing party.
For example, Art. 3 UNCITRAL Rules.
- In institutional arbitrations, this notice will be given to that institution by a ‘request for
arbitration’ or similar document. The institution then notifies the respondent or
respondents.
, For example, Art. 4.1 ICC Rules.
What should be set out in the notice of arbitration?
- A reference to the arbitration clause in the contract (or to any other form).
- A brief description of the claim
- An indication of the amount involved in the dispute.
- A statement of the relief or remedy sought
- Proposals for the appointment of a sole arbitrator or of the arbitral tribunal.
Appointment of the arbitral tribunal
The parties in arbitration can help choose the arbitrators who will decide their dispute. This
involvement in selecting the tribunal often gives the parties greater confidence in the fairness
and reliability of the arbitration process.
- Look at: arbitral experience, legal or cultural background, linguistic abilities, and
technical knowledge.
Independence:
- Objective test: has nothing to do with the arbitrator’s state of mind.
- Absence of financial, professional, personal links or relationship between the
arbitrator and a party.
Impartiality:
- Subjective test: primarily involves a state of mind.
- Focuses on an arbitrator’s ability to analyse the dispute without prejudgment. Absence
of actual or apparent bias of the arbitrator in attitude or reasoning, either in favour of
one of the parties or in relation to the issues in dispute.
Art. 12(1) Model Law: when a person is approached in connection with his possible
appointment as an arbitrator, he shall disclose any circumstances likely to give rise to
justifiable doubts as to his impartiality or independence.
Art. 11(2) ICC Rules: the prospective arbitrator shall disclose in writing to the Secretariat any
facts or circumstances which might be of such nature as to call into question the arbitrator’s
independence in the eyes of the parties, as well as any circumstances that could give rise to
reasonable doubts as to the arbitrator’s impartiality.
→ IBA Guidelines on Conflicts of Interest in International Arbitration.
Soft law: universally accepted and followed by the vast majority of parties and
tribunals.
(i) A sole arbitrator
, When the dispute is to be decided by a sole arbitrator, the parties normally have the right to
agree jointly on the arbitrator. If the parties cannot agree, a ‘fall-back’ or ‘default’ provision
applies. The ‘appointing authority’ will then select and appoint an arbitrator.
- For example, Art. 12.3 ICC Rules.
- Institutional arbitration: the institution under whose rules the arbitration is to proceed
(ICC Rules).
- Ad hoc arbitration: the relevant domestic court (Model Law).
(ii) A tribunal of three arbitrators
In a three-member tribunal, each party usually nominates one arbitrator. The third arbitrator
acts as the presiding arbitrator or chair. Parties may agree directly on this appointment or
delegate the task to the two co-arbitrators.
If delegated, the co-arbitrators consult each other to agree on a suitable chairperson. Parties
are typically informed of the proposed choice only to identify potential conflicts, not to
exercise a veto.
- In institutional arbitration, the supervising institution will appoint the third arbitrator.
In UNCITRAL ad hoc arbitration, the appointing authority chosen by the parties (or, if none is
agreed, the Secretary-General) makes the appointment.
Arbitral proceeding
The rules that govern an international arbitration are:
(i) The mandatory provisions of the lex arbitri (the law of the place of arbitration);
(ii) The arbitration rules that the parties themselves may have chosen, such as the
rules of the ICC or UNCITRAL.
Within the broad outline of any applicable rules, parties to an international arbitration are free
to design (‘tailor’) a procedure suitable for their particular dispute.
Ending the dispute
A settlement is frequently reached between the parties. Rules of arbitration usually make
provision for this.
- For example, Art. 36.1 UNCITRAL Rules.
Before the award is made: the tribunal will issue an order for the termination of the
proceedings or record the settlement in the form of an arbitral award.
If the parties themselves cannot resolve their dispute, the power and duty of the tribunal is to
resolve it for them by making a binding decision, in the form of a written arbitral award.
Any failure by a tribunal to act judicially (respecting equality of parties, with each party
allowed to present its case) may be sanctioned by annulment or non-enforcement of that
award.
Enforcement of an award
Arbitral award: a binding decision on the dispute between the parties.
