Introduction

Question 1

According to the Model Law, when is an arbitration ‘international’?

Answer 1

Article 1(3) of the Model Law considers arbitration to be international if:

1) the parties have their place of business in different States, or
2) the place of arbitration is outside the State in which they have their place of business in, or
3) any place where a substantial part of the contract to be performed, or is most closely connected to, is outside the State in which parties have their place of business in
4) the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country

Question 2

What is an arbitration clause?

Answer 2

A clause that makes clear that any dispute that arises out of, or in connection with, the contract will be referred to arbitration and not to the courts.

Question 3

What is a submission clause?

Answer 3

An agreement to arbitrate once a dispute has arisen. It is generally much more complex than an arbitration clause.

Typically, it is difficult for parties to reach any consensus or agreement once a specific dispute has arisen between them, including as to the process to resolve it. Consequently, such agreements are rare,

Question 4

What is an agreement to arbitrate?

Answer 4

Normally appears in bilateral investment treaties (BIT) entered into by one state with another.

The state agrees to arbitrate any dispute that might arise in the future between the State and an ‘investor’. The ‘investor is a third-party to the agreement and may not come into existence at the time of the contract.

Many investors seek to take advantage of such clauses.

Question 5

Must arbitration agreements be made in writing?

Answer 5

Under the New York Convention and the Model Law, there used to be a requirement for arbitration agreements too be made in a written arbitration clause or a signed submission agreement.

In Swiss law, an arbitration must be made in a means of communication “which permits it to be evidenced by a text”.

Under the Revised Model Law, States (that choose to adopt it) have two options:

1) They can adhere to the writing requirement, but with ‘writing’ extended to include digital communications of all types
2) They can dispense with the writing requirement entirely, so even oral agreements to arbitrate can be binding.

Question 6

What is ad hoc arbitration?

Answer 6

Both parties establish their own rules of procedure.

Most ad hoc arbitrations tend to be based on UNCITRAL Rules of Arbitration.

Question 7

What is institutional arbitration?

Answer 7

Arbitration administered by ICC, SIAC, HKIAC, LCIA etc.

Question 8

How are arbitration agreements enforced?

Answer 8

An agreement to arbitrate cannot be enforced like other obligations:

• If it is broken, damages are unlikely to be a practical remedy
• Specific performance is also not feasible

This problem has been resolved by indirect enforcement:

• If any party brings proceedings to a national court (i.e in breach of the arbitration agreement), the other party can obtain a stay of proceedings. Therefore, any claim that the party wants to make can only be made through arbitration.
• This is enforced internationally (New York Convention)

Question 9

What is the ‘need for a dispute’ requirement in arbitration?

Answer 9

When one party has an open and shut case, such as an unpaid cheque, obtaining a summary judgement may be much easier and quicker than forming an arbitral tribunal.

Certain countries therefore allow courts to handle the case if the judge is satisfied that there is no genuine dispute between the parties.

But English law now follows strict wording of New York Convention - all disputes, even open and shut ones, must be referred to arbitration.

Question 10

What is the ‘arbitrability of dispute’ requirement in arbitration?

Answer 10

Certain countries may treat certain disputes as being more suitable for determination by public courts, than a private arbitral tribunal.

In Singapore, any dispute can be determined by arbitration unless “it is contrary to public policy to do so”

Question 11

Which countries have adopted the Model Law in their national legislation?

Answer 11

Singapore and…

Question 12

How does an arbitration begin?

Answer 12

Under UNCITRAL Rules, a notice of arbitration must be communicated to the respondent. Arbitration proceedings begin on the date that the notice is received.

If doing under ICC, LCIA, SIAC, or SCC, the institution will notify the respondent.

Question 13

Why arbitration?

Answer 13

Confidential

Subject matter expertise of arbitrators

Binding award that is enforced internationally

No appeal. Can avoid expensive and lengthy game of snake and ladders (with appeals)

The international treaties that govern enforcement of arbitral awards are more well-accepted than treaties for the reciprocal enforcement of court judgements.

Flexibility with procedure

Question 14

Why is arbitration important in the commercial context?

Answer 14

Confidentiality of arbitration protects trade secrets, competitive practice, and may shield company’s reputation from public eye

Subject matter expertise of arbitration may ensure a fairer decision

Question 15

There are few, if any, national arbitration laws that require arbitrators to be qualified lawyers. True or false?

Answer 15

True

Question 16

According to the ICC Rules, when is an arbitration international?

Answer 16

The ICC considers arbitration to be international if

1) it either involves nationals of different States or
2) the contract is concluded between two nationals of the same State for performance in another country or
3) the contract is concluded between a State and the subsidiary of a foreign company doing business in that State

Question 17

According to countries like Switzerland and the US, when is an arbitration international?

Answer 17

Switzerland, the European Convention, and the US considers arbitration to be international if it involves at least one party of a different nationality or who is not habitually resident in that country.

Question 18

What if parties have more than one place of business?

Answer 18

Under Article 1(4) of the Model Law:

If a party has more than one place of business, the place of business is that which has the closest relationship to the arbitration agreement

Question 19

Parties to an arbitration agreement can still request the court to give an interim measure of protection (eg. an injunction). True or false?

Answer 19

True. See Article 9 of Model Law:

It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of
protection and for a court to grant such measure

Question 20

Any court in the world has the power to issue an interim measure in relation to arbitration proceedings, even if it is not the seat of the arbitration. True or false?

Answer 20

True. See Article 17J of Model Law:

A court shall have the same power of issuing an interim measure in
relation to arbitration proceedings, irrespective of whether their place is in the territory of this State, as it has in relation to proceedings in courts.

The court shall exercise such power in accordance with its own procedures in consideration of the specific features of international arbitration.

Question 21

What does Article 17, 17A- 17H set out?

Answer 21

Arbitral tribunals can grant interim measures such as injunctions, mareva injunctions and anton pillar.

The conditions, requirements and security required etc. for interim measures.

This interim measures are binding an parties may apply to any competent court in the world to enforce it.

Question 22

Under Article 17I, when may a court refuse to enforce an interim measure (eg. injunction) granted by an arbitral tribunal?

Answer 22

Three pathways to do so:

1. At the request of the other party against whom the interim measure is invoked

AND 2. The tribunal’s request for security has not been complied with, or the interim measure has been terminated by the arbitral tribunal, or on the grounds of Article 36(1)(a)(i), (ii), (iii), or (iv)

Alternatively,

1. The court finds that the interim measure is incompatible with the powers conferred upon the court (unless it can reformulate it to the extent necessary to fit the scope of its powers without modifying its substance)

Alternatively,

1. On the grounds of Article 36(1)(b)(i) or (ii)

Question 23

What is the notable feature of Article 17I?

Answer 23

Under Article 17I(2)

When deciding whether to refuse enforcement of an interim measure, the court cannot undertake a review of the substance of the interim measure itself.

Question 24

When can a binding award or an interim measure be set aside by the court where recognition or enforcement is sought under Article 36(1)(a) of the Model Law?

Answer 24

The party against whom it is invoked proves to the competent court where recognition or enforcement is sought:

1. One of the parties to the arbitration agreement was under some incapacity, or the agreement is not valid under law
2. The party was not given proper notice of the appointment of an arbitrator, the arbitration proceedings, or was otherwise unable to present its case properly
3. The award deals with a dispute not contemplated by, or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the arbitration.

Provided that if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contain decisions on matters submitted to arbitration may be recognized and enforced.

4. The composition of the arbitral tribunal or the process was not what the parties had agreed on.
5. The award has been set aside by the State which is the seat of the arbitration

Question 25

When can a binding award or an interim measure be set aside by the court where recognition or enforcement is sought under Article 36(1)(b) of the Model Law?

Answer 25

The court finds that the subject matter of the dispute is not capable of settlement by arbitration under the law of this State

or

The court finds that the recognition or enforcement of the award would be contrary to the public policy of this State

Question 26

How does the Model Law balance the public policy interests of individual states and the autonomy of the arbitration process?

Answer 26

PROTECTING THE AUTONOMY OF THE ARBITRATON PROCESS

Under Article 17I(2), States cannot refuse enforcement of an interim measure based on its review of the substance of that measure.

Under Article 17I(1)(a) and/or Article 36(1)(a), States can only refuse enforcement of an interim measure or arbitral award respectively, when the proper procedure of the arbitration process has not been met in one way or another.

PROTECTING THE PUBLIC POLICY INTEREST OF INDIVIDUAL STATES

Under Article 17(1)(b) and/or Article 36(1)(b), States can refuse enforcement of an interim measure or arbitral award respectively, if the dispute’s subject matter should not fall under arbitration under the State’s law, or the award’s recognition and enforcement would be contrary to the State’s public policy.