HOOFDSTUK 1 & 2
The arbitration agreement
Under the New York Convention, each contracting state undertakes to recognise and give
effect to an arbitration agreement when the following requirements are fulfilled (article II(1)):
1. Writing
The Model Law is a more modern document; see article 7: ‘’recorded in any form’’.
a. Group of companies doctrine: tribunal will focus on the parties common intention
and may consider a variety of factors. Whether the non-signatory actively
participated in the conclusion of the contract containing the arbitration
agreement; whether the non-signatory has a clear interest in the outcome of the
dispute; and whether the non-signatory is party to a contract that is ‘intrinsically
inter-twined’ with the contract under which the dispute has arisen.
b. Piercing the corporate veil: a third party may be bound to an agreement if there is
evidence that the party to the agreement is being used as a device to avoid or
conceal liability.
2. Existing or future disputes
3. Defined legal relationship, whether contractual or not
Plainly, there has to be some contractual relationship between the parties, since there
must be an agreement to arbitrate to form the basis of the arbitral proceedings.
Given the existence of such an agreement, the dispute submitted to arbitration may be
governed by principles of tortious liability. This depends on the wording of the
arbitration agreement.
4. Matter is capable of settlement by arbitration.
Each state decides for its own public policy. Different laws have to be regarded: law
governing the party involved, the law governing the arbitration agreement, the law of
the seat of arbitration and the law of enforcement of the award. For example: a claim
may be arbitrable under the law governing the arbitration agreement and under the
lex arbitri, but not under the law of the place of enforcement: it might prove to be
unenforceable under the NY convention.
See for the different topics that are not capable for arbitration, 2.131 e.v.
and in article II(3):
5. The parties have legal capacity under the law applicable to them
Depends on the national law (of contract) applicable to them.
6. The agreement is valid under the law to which parties have subjected it or, failing any
indication thereon, under the law of the country where the award was made.
, Governing law of the arbitration agreement
The parties’ contract should contain a choice of law clause and they should also consider
making express provision for the governing law of the arbitration agreement. In Sulamérica,
the English Court of Appeal held that where parties have not expressly agreed on a governing
law for their arbitration agreement, their choice of law for the main contract will be a ‘strong
indication’ that they wished to adopt the same law for the arbitration agreement. Where the
contract does not contain a ‘choice of law’ clause (or the arbitration agreement is not part of a
contract), the court will turn to the parties’ choice of seat in order to determine the law with
which the arbitration agreement has its ‘closest and most real connection’.
Scope of the agreement
It is necessary to determine whether a particular claim or defence has a sufficient connection
with the contract to be covered by the arbitration agreement on its terms. Whatever the
tribunal, its decision will depend upon its interpretation of the words of the arbitration
agreement and the intention of the parties, in the light of the law that governs that agreement.
In addition to the form of words used, the parties, by their conduct in referring a matter to
arbitration, may be taken as impliedly agreeing to confer on the arbitrator jurisdiction beyond
that which would have existed pursuant to the arbitration clause.
Multi-tier and sole-option clauses
Clauses that envisage an escalation of the dispute through at least two different forms of
dispute resolution procedures are called ‘multi-tier’ dispute resolution clauses. Cable &
Wireless: a multi-tier clause may be enforceable if it provides for ‘a sufficiently certain and
definable minimum duty of participation’. Where the clause contains ‘an unqualified
reference to ADR [alternative dispute resolution]’, that minimum duty ‘should not be hard to
find’.
A solid-option clause grants one party the exclusive right to decide between arbitration or
litigation to resolve a dispute. This means a party can choose the forum for their dispute at the
time the dispute arises, rather than at the time of negotiating the agreement. Many
jurisdictions confirmed that these clauses are enforceable.
Governing rules to the arbitration proceedings
1. The mandatory provisions of the lex arbitri;
2. The rules that the parties themselves may have chosen, such as the ICC or
UNICITRAL.
Ad hoc arbitration
Parties to an ad hoc arbitration may establish their own rules of procedure, as long as these
rules treat the parties with equality and allow each party a reasonable opportunity of
presenting its case. Such specially drawn rules will generally be set out in a formal
‘submission to arbitration’, negotiated and agreed once the dispute has arisen. This
submission agreement will confirm the appointment of the arbitral tribunal, set out the
substantive law and the place (or ‘seat’) of the arbitration, and detail any procedural rules
upon which the parties have agreed for the exchange of documents, witness statements, and so
forth.
In practice, ad hoc arbitrations are now usually conducted on the basis of the UNCITRAL
Arbitration Rules, which the parties agree to accept as a convenient and up-to-date set of
rules.
The arbitration agreement
Under the New York Convention, each contracting state undertakes to recognise and give
effect to an arbitration agreement when the following requirements are fulfilled (article II(1)):
1. Writing
The Model Law is a more modern document; see article 7: ‘’recorded in any form’’.
a. Group of companies doctrine: tribunal will focus on the parties common intention
and may consider a variety of factors. Whether the non-signatory actively
participated in the conclusion of the contract containing the arbitration
agreement; whether the non-signatory has a clear interest in the outcome of the
dispute; and whether the non-signatory is party to a contract that is ‘intrinsically
inter-twined’ with the contract under which the dispute has arisen.
b. Piercing the corporate veil: a third party may be bound to an agreement if there is
evidence that the party to the agreement is being used as a device to avoid or
conceal liability.
2. Existing or future disputes
3. Defined legal relationship, whether contractual or not
Plainly, there has to be some contractual relationship between the parties, since there
must be an agreement to arbitrate to form the basis of the arbitral proceedings.
Given the existence of such an agreement, the dispute submitted to arbitration may be
governed by principles of tortious liability. This depends on the wording of the
arbitration agreement.
4. Matter is capable of settlement by arbitration.
Each state decides for its own public policy. Different laws have to be regarded: law
governing the party involved, the law governing the arbitration agreement, the law of
the seat of arbitration and the law of enforcement of the award. For example: a claim
may be arbitrable under the law governing the arbitration agreement and under the
lex arbitri, but not under the law of the place of enforcement: it might prove to be
unenforceable under the NY convention.
See for the different topics that are not capable for arbitration, 2.131 e.v.
and in article II(3):
5. The parties have legal capacity under the law applicable to them
Depends on the national law (of contract) applicable to them.
6. The agreement is valid under the law to which parties have subjected it or, failing any
indication thereon, under the law of the country where the award was made.
, Governing law of the arbitration agreement
The parties’ contract should contain a choice of law clause and they should also consider
making express provision for the governing law of the arbitration agreement. In Sulamérica,
the English Court of Appeal held that where parties have not expressly agreed on a governing
law for their arbitration agreement, their choice of law for the main contract will be a ‘strong
indication’ that they wished to adopt the same law for the arbitration agreement. Where the
contract does not contain a ‘choice of law’ clause (or the arbitration agreement is not part of a
contract), the court will turn to the parties’ choice of seat in order to determine the law with
which the arbitration agreement has its ‘closest and most real connection’.
Scope of the agreement
It is necessary to determine whether a particular claim or defence has a sufficient connection
with the contract to be covered by the arbitration agreement on its terms. Whatever the
tribunal, its decision will depend upon its interpretation of the words of the arbitration
agreement and the intention of the parties, in the light of the law that governs that agreement.
In addition to the form of words used, the parties, by their conduct in referring a matter to
arbitration, may be taken as impliedly agreeing to confer on the arbitrator jurisdiction beyond
that which would have existed pursuant to the arbitration clause.
Multi-tier and sole-option clauses
Clauses that envisage an escalation of the dispute through at least two different forms of
dispute resolution procedures are called ‘multi-tier’ dispute resolution clauses. Cable &
Wireless: a multi-tier clause may be enforceable if it provides for ‘a sufficiently certain and
definable minimum duty of participation’. Where the clause contains ‘an unqualified
reference to ADR [alternative dispute resolution]’, that minimum duty ‘should not be hard to
find’.
A solid-option clause grants one party the exclusive right to decide between arbitration or
litigation to resolve a dispute. This means a party can choose the forum for their dispute at the
time the dispute arises, rather than at the time of negotiating the agreement. Many
jurisdictions confirmed that these clauses are enforceable.
Governing rules to the arbitration proceedings
1. The mandatory provisions of the lex arbitri;
2. The rules that the parties themselves may have chosen, such as the ICC or
UNICITRAL.
Ad hoc arbitration
Parties to an ad hoc arbitration may establish their own rules of procedure, as long as these
rules treat the parties with equality and allow each party a reasonable opportunity of
presenting its case. Such specially drawn rules will generally be set out in a formal
‘submission to arbitration’, negotiated and agreed once the dispute has arisen. This
submission agreement will confirm the appointment of the arbitral tribunal, set out the
substantive law and the place (or ‘seat’) of the arbitration, and detail any procedural rules
upon which the parties have agreed for the exchange of documents, witness statements, and so
forth.
In practice, ad hoc arbitrations are now usually conducted on the basis of the UNCITRAL
Arbitration Rules, which the parties agree to accept as a convenient and up-to-date set of
rules.
