Commercial Arbitration Process Flashcards

1
Q

WHAT IS THE DEFINITION OF ‘COMMERCIAL’?

A

The difference between commercial and consumer is that with consumer, one part is a legal/natural person acting for purposes other than trade/business/profession

Commercial arbitration covers matters arising from all relationships of a commercial nature

  • Supply of goods/exchange of services
  • Distribution agreements
  • Commercial representation/agency
  • Leasing
  • Construction
  • Engineering
  • Finance and banking etc
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2
Q

How are arbitrations private?

A

Holding hearings where the public have no access

The parties agree submit the dispute to arbitration between themselves, and only them

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3
Q

How are arbitrations confidential?

A
  • Obligation not to disclose anything to anyone outside the arbitration
  • Arises naturally from privacy
  • However, the inclusion by a party of its own documents does not make them confidential if they weren’t already
  • Disclosure can be permitted where:
    • There is consent
    • A court grants permission (which it has discretion to grant), where
      • Disclosure is reasonably necessary to protect a party’s interest
      • The interests of justice, or
      • Public interest
  • It may be in the interests of justice where:
    • the party has given an inconsistent case, to prevent the tribunal being misled
    • to bring to light wrongdoing
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4
Q

WHAT ARE THE DIFFERENT PROCEDURAL APPROACHES IN ARBITRATION?

A
  • Simple procedures with no hearing (e.g. ‘look-sniff’)
  • Short-form arbitrations
  • Arbitrations by the default AA procedure
  • Arbitrations by institutional rules
  • Arbitrations where the parties agree on a bespoke procedure
  • Arbitrations where the procedure draws heavily on the CPR (quite standard as fallback)
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5
Q

WHAT ARE THE PROCEDURAL RULES GOVERNING THE ARBITRATION?

A

Bespoke arbitration clause

Where parties and lawyers make detailed provision for the procedure to be followed

Arbitral institution rules

Most are consistent with the AA

International organisations also have their own

Most rules cover: appointment, pleadings, procedure and exchange of information and evidence, decision-making, awards and payment of fees and costs

Silence in institutional rules

Where the rules are silent on a non-mandatory matter, the relevant AA provision applies

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6
Q

HOW ARE ARBITRATIONS COMMENCED?

A

Arbitrations are commenced by sending a notice of arbitration and then appointing the members of the arbitral tribunal.

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7
Q

WHAT ARE ‘LOOK-SNIFF’ ARBITRATIONS

A
  • Most commonly with disputes over the quality of goods in import-export transactions, if the dispute is over whether the goods match the specs or description
  • May be that all is needed is for an expert to visit the goods, look at them, do tests, and express a view on their quality
  • Delay is to be avoided, because of market fluctuations
  • Procedure is largely about agreeing on a suitable arbitrator
  • With minimum documents and minimum argument
  • Very similar to expert evaluation
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8
Q

WHAT ARE SHORT-FORM ARBITRATIONS

A
  • Full blown arbitration are too expensive and unnecessary for simply disputes where the monetary value is low
  • Some institutions have a short-form procedure to deal with these cost-efficiently
  • Within 2 working days after the appointment, C is required to deliver a file setting out its case to the arbitrator and the respondent, which must contain:
    • Statement of the order/awards sought
    • Statement of the reasons for being so entitled
    • Copies of all the documents relied upon
  • The respondent must deliver its defence in the same format within 14 days of reception
  • No counterclaim is permitted
  • Then there is a 14-day period where the parties may comment on the other side’s case and alter their file
  • Normally no formal hearing
  • Arbitrator makes an award on considering the papers within 14 days of the close of files
  • The arbitrator may extend this period
  • He may hold a site visit, require further documents/information, call a meeting to ask questions, or hold a hearing to XX witnesses (but this detracts from the ‘short’ character)
  • Normally each side bears their own costs
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9
Q

What are the main stages of arbitration?

A
  • Appointment
  • Preliminary hearing t discuss procedural steps and set a timetable
  • Possible mediation window
  • Points of claim
  • Points of defence
  • Disclosure and production of documents
  • Exchange of witness statements
  • Disclosure of experts’ reports
  • Meeting of experts
  • Pre-trial hearing
  • Hearing
  • Closing of proceedings
  • Award
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10
Q

What directions can the tribunal make on procedure and evidence?

A
  • Tribunal may decide all procedural/evidential matters that have been referred to it (although the parties can agree whatever they want between themselves):
    • Time and location of proceedings
    • Languages to be used, whether translations will be provided
    • Whether written statements will be used, when supplied etc.
    • Documents to be disclosed and when
    • Questions to be put and how
    • Whether to apply strict rules of evidence
    • What initiative the tribunal should take in ascertaining facts and law
    • Whether there should be oral/written evidence
  • Tribunal may fix the time period for compliance with directions, and may extend the time
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11
Q

What conservatory measures can the tribunal make?

A
  • Tribunal may give directions for the inspection/preservation of property (only in a party’s possession) by the tribunal/expert/party
  • Tribunal may order that samples be taken from or observation made on the property
  • This may be done for the benefit of the tribunal, expert or party
  • If the property belongs to a non-party, apply for a court order permitting inspection
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12
Q

What are the procedural matters typically considered?

A
  • Statements of case
  • Points of defence and reply
  • Delivery of documents by the parties
  • Exchange of witness statements
  • Details of experts & limits of expert statement delivery
  • Details of hearing
  • Venue details
  • How costs will be calculated etc.
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13
Q

What are peremptory orders?

A
  • Parties are free to agree with procedural default (otherwise the AA applies)
  • Applies where an order imposes a time limit, and one of the parties fails to comply, without showing sufficient cause
  • The AA gives the tribunal a range of powers to deal with a default proportionately
  • A peremptory order may only be made if an ordinary order has been made first
  • A peremptory order requires the same steps to be taken (like an ‘unless order’)
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14
Q

What can the tribunal do if a party fails to comply with a peremptory order?

A
  • Direct that the party cannot rely on any allegation/material that was the subject of the order
  • Draw adverse inferences from non-compliance
  • Proceed to an award on the basis of materials that have been provided
  • Make an order as to costs incurred in consequence of the non-compliance
  • However, the tribunal can’t make penal sanctions (e.g. a fine or prison) as the court can
  • Where the innocent party exhausted all arbitral processes to seek compliance, he can seek a HC order for compliance with the peremptory order (unless otherwise agreed by the parties)
  • The court has a discretion, but it’s not readily given (3rd principle)
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15
Q

Statements of case

A

Purpose:

  • To set out what happened
  • To set out each side’s case
  • To define the issues
  • To set out the relief sought

Tribunal may decide against formal pleadings where the dispute is straightforward

Broadly follows court rules

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16
Q

Evidence

A
  • Has a discretion on whether to apply the strict rules of evidence as to admissibility, relevance or weight of any material
  • The discretion must be exercised in consistence with the fair resolution of the dispute
17
Q

Disclosure

A
  • Tribunal decides which documents should be disclosed and when
  • Frequently the tribunal requires the parties to disclose the docs that will assist the arbitrator in deciding the dispute
  • There is no ‘standard disclosure’ as in the CPR
  • Disclosure may be limited to categories
  • Sometimes disclosure of adverse documents or those that support the other side’s case are requested by the tribunal

Method of disclosure

  • Can be simple copies
  • A Redfern schedule is used (listing documents required, each party’s response and arbitrator’s ruling)
18
Q

No right to an oral hearing

A
  • The tribunal decides on this, subject to contrary agreement between the parties
  • Tribunal must just bear in mind the need to act fairly, giving parties reasonable opportunity to put their case and deal with the other side’s, and avoiding unnecessary expense or delay
  • Some institutional rules reverse this and give the parties the right to insist
19
Q

The hearing

A
  • Tribunal can decide whether they want to make it adversarial or inquisitorial
  • Can decide whether and to what extent it should take the initiative in ascertaining the facts and the law?
  • The adversarial system is dominant
20
Q

How does the tribunal make a decision?

A
  • Arbitrators confer to discuss everything
  • They must act judicially, even if appointed on the basis of their experience
  • Parties must be taken to have agreed that the arbitrators will have their own knowledge in mind
    • He is allowed to use his technical knowledge in evaluation provided the parties could reasonably expect him to have that knowledge, but
    • He can’t supply evidence from his own knowledge without disclosing that knowledge to the parties so they can answer with submissions or evidence
  • Arbitrators will seek a unanimous decision, but majority is sufficient
  • Provide reasons if necessary
21
Q

Amiable compositeur (equity clauses)

A
  • Acting as amiable compositeur means the tribunal decides according to the principles the tribunal believes just and equitable, not just strict application of the law
  • Ex aequo et bono means in justice and good faith
  • The tribunal must still take into consideration trade practices
  • Excludes the possibility of appeal, because there will be no ‘question of law’