W8: Arbitrators I - Appointment, Challenges and Replacement

Question 1

Introduction to Procedural Issues:

1. Lex Arbitri
2. Curial Law
3. Key Events in ICA Proceedings

Answer 1

1. Dealing w/procedural issues:
   i. Arbitral Tribunals
   ii. Courts @ Seat
   iii. Courts outside Sea
2. Applicable Laws and Rules:
   i. Arbitration Rules
   ii. Law @ Seat (Mandatory v Non-Mandatory)
   iii. Law of the Court

Question 2

Commencement of Arbitral Proceedings

Answer 2

1. SEATS
   i. @ England: EAA 1996 S. 14
   ii. @ ML Jurisidiction: ML Art. 21
2. PARTIES AGREEMENT
   i. Arbitration Rules
   [UNCITRAL Rules Art. 3(1); ICC Rules Art. 4(2); LCIA Rules, Art. 1.4]
   - UNCITRAL Rules: Date of receipt of the notice of arbitration by RESPONDENT
   - ICC and LCIA Rules: Date of receipt of the request for arbitration by the institution + payment of registration fee
3. NO AGREEMENT:
   - Default Rules: Service of Notice on the RESPONDENT + Notice to the Appointing Authority

Question 3

Key Events in Arbitration

Answer 3

STEPS:

1. Request for Arbitration + Answer
2. Constitution of Arbitral Tribunal
3. Initial Procedural Conference and Directions
4. Exchange of Memorials, Doc Evidence, Witness Statements
5. Hearing/Presentation of Evidence
6. Post-Hearing Briefs
7. Closure of Proceedings
8. Award
9. Proceedings After the Award

Question 4

Arbitrators

Answer 4

1. Who’s who?
2. Necessary/Desirable Qualities

• Grand Old Men v Technocrats (Dezalay and Garth 1996) v Managers (Schulz and Kovacs 2012)
  i. D&G: There was a competition b/w 2 groups of European “grand old men” (Sr. European academics and retired judges); and younger “Technocrats” (partners in large Anglo-American law firms who practice are.).
  ii. S&K: There is a third gen. arising - “manager”.
• These descriptions are general, and focus on ICA.

Question 5

Composition of Arbitral Tribunals

Answer 5

1. NUMBER:
   - 1, 2, 3 or more
   - Arbitrator, Chairman, Umpire
2. ARBITRATION RULES:
   i. UNCITRAL Rules Art. 7
   ii. ICC Rules Art. 12(1) and (2)
   iii. LCIA Rules Art. 5.8
3. DOMESTIC LAWS:
   i. EAA 1996 Ss. 15, 20, 21
   ii. ML Art. 10

Question 6

Appointment Procedure

Answer 6

1. ISSUES TO CONSIDER:
   i. Designating and Appointing Authorities
   ii. Appointment, Nomination, and Confirmation
   iii. Nationality and Other Requirements [ICC Rules Art. 13(5); LCIA Rules Art. 6]
   * Jivraj v Harshwani (UK - 2010): HELD - NOT to violate anti-discrimination laws
   iv. Multi-Party Arbitrations
   v. Standard of Proof (for showing jurisidiction agreement if COURT asked to appoint)
2. ARBITRATION RULES:
   i. UNCITRAL Rules Arts. 6, 8-10
   ii. ICC Rules Arts. 11(4) and (6), 12-13
   iii. LCIA Rules Arts. 5.6-5.7, 5.9-5.10, 6-8
3. DOMESTIC LAWS:
   i. EAA 1996 Ss. 16-19
   ii. ML Art. 11

NOTE: Arbitrators need not have a legal qualification, but they must have the qualities agreed by the parties; and be independent and impartial

Question 7

Independence and Impartiality

Answer 7

1. WHO DECIDES?:
   i. Challenged Arbitrator = Resignation
   ii. Parties = Revocation
   iii. Tribunal = Removal
   iv. Institution = Refusal of Confirmation/Appointment, Removal
   v. Court = Removal
2. IBA GUIDELINES
   - On Conflict of Interest in Int’l Arb.:
   i. Relevance
   ii. Application of ‘Test of Bias’
   iii. Disclosure to Arbitrator
   iv. Waiver by Parties
   v. Duty to Provide Info. by Parties
   vi. Duty to Investigate by Arbitrator and Parties
   - Red, Orange, Green Lists:
   i. Non-Waivable Red List
   ii. Waivable Red List
   iii. Orange List
   iv. Green List
3. ARBITRATION RULES:
   i. UNCITRAL Rules Arts. 11-13
   ii. ICC Rules Arts 11(1)-(3) and (5), 13-14
   iii. LCIA Rules Arts. 5.3-5.5, 7, 10 + LCIA Challenge Decision Database
4. DOMESTIC LAWS:
   i. EAA 1996 Ss. 23-25
   ii. ML Arts. 12-13

Question 8

Independence and Impartiality: Case Law

[IBA Guidelines should be used w/caution]

Answer 8

ENGLISH LAW

1. Halliburton Co. v Chubb Bermuda Insurance Ltd.
   - “The court should consider, on the basis of all the factual info. available, whether the fair-minded and informed observer would conclude that there was a real possibility that the arbitrator was biased.”
   - “An arbitrator should give disclosure of facts and circumstances known to him which would conclude that there was a real possibility that the arbitrator was biased”
   - Test relevant in cases of ‘apparent bias’
   - EAA 1996 S. 73: Waiver
   - Court appointed arbitrator in first arb.; arbitrator subsequently accepted appointment in a related arb. as appointee of party to first arb.
2. H v L
   - Arbitrator acting in more than one arb. w/overlapping facts and parties
3. W Ltd. v M Sdn. Nhd.
   - Arbitrator was a partner in a law firm
   - Operated effectively as a sole practitioner using law firm for secretarial and admin. assistance
   - Law firm provided legal services to a Co. affiliated to the Defendant
4. Cofely Ltd. v Bingham
   - 18% of the arbitrator’s appointments, and 25% of his arbitrator income over last 3 yrs was derived from cases involving defendant
5. Sierra Fishing v Ali Zbeeb
   - Arbitrator was engaged by a bank of which defendant was Chairman
   - Arbitrator’s father and co-partner in his law firm acted as retained legal counsel to the bank
   - Defendant held executive position w/in bank
   - Arbitrator had advised and assisted the Defendants in settlement negotiations in the present dispute
6. A v B
   - Barrister Arbitrator involved in a case for Solicitors for a party
7. ASM Shipping Ltd. of India v TTMI Ltd of England
   - QC appointed as Arbitrator
   - QC, in earlier separate proceedings applied to court for a disclosure order against the key witness in the arb.
   - Arbitral Panel subsequently refused adjournment of proceedings when Defendant’s leading counsel was unable to appear on scheduled date b/c of family bereavement
8. Rustal Trading Ltd. v Gill and Duffus SA
   - Arbitrator was involved in an earlier dispute w/Claimant’s consultant
9. Laker Airways Inc. v FLS Aerospace Ltd
   - Arbitrator belonged to the same set of chambers as a barrister representing a party

Question 9

Replacement of Arbitrators

Answer 9

1. ISSUES TO CONSIDER:
   i. Replacement
   ii. Procedure for Appointing Replacement
2. FUNCTUS OFFICIO:
   i. Final Award
   ii. Settlement
   iii. Negative Jurisdictional Award
   iv. Revocation of Authority [EAA 1996 S.23]
   v. Removal of Arbitrator (by Court) [EAA 1996 S.24] (or relevant arb. institution)
   vi. Resignation of Arbitrator [EAA 1996 S.25]
   vii. Death of Arbitrator [EAA 1996 S.26(1)]
3. ARBITRATION RULES:
   i. UNCITRAL Rules Arts. 14-15
   ii. ICC Rules Arts. 15
   iii. LCIA Rules Arts. 11-12

NOTE: In some circumstances, a replacement arbitrator will have to be appointed; or the tribunal will have to continue the arb. as a TRUNCATED TRIBUNAL.

Question 10

Independence and Impartiality: Under English Law [EAA 1996]

Answer 10

S. 1(1): one f the principles on which the Act is founded = object of arbitration is to obtain the FAIR resolution of disputes by an IMPARTIAL tribunal w/out necessary delay/expense

S. 33(1)(a) - General Duty of the Arbitral Tribunal: Duty to act FAIRLY and IMPARTIALLY as b/w the parties, giving each party a reasonable opportunity of putting his case and dealing w/that of his opponent
- Independence is NOT mentioned

Question 11

Laws and Rules Governing Procedural Issues

Answer 11

Applicable Rules and Law @ Seat interaction:

1. If the Law @ Seat contains a mandatory provision concerning a procedural issue, that provision will apply, even if the applicable arb. rules are contrary to it
   - EAA 1996 S. 4 and Sch. 1; UNCITRAL Arb. Rules Art 1(3)
2. If Law @ Seat contains a non-mandatory provision concerning a procedural issue, thay provision will apply unless superseded by a provision of the applicable arb. rules.
3. Sometimes, procedural issue is not regulated by either the Law @ Seat or the relevant Arb. Rules. Here, the arbitrators will resolve the issue as they deem apt.
   - UNCITRAL Arb. Rules Art 17(1)
4. One simple procedure issue = determining the moment of commencement of arbitral proceedings; imp. for:
   i. determining the moment in which statute of limitation is interrupted (EAA 1996 Ss 12-13)
   ii. determining the moment from which the negative aspect of the competence-competence doctrine applies

ARBITRATION RULES:

i. UNCITRAL Rules Art. 3(2)
ii. ICC Rules Art. 4(2)
iii. LCIA Rules Art. 1.4

DOMESTIC LAW:

i. EAA 1996 S. 14 persuant to S. 2
ii. ML Art. 21
- Both non-mandatory provisions which allow parties to agree on the moment of commencement of arbitral proceedings; typically done by incorporating some arb. rules into their AA

NOTES:
1. An arbitral tribunal must decide procedural issues correctly, for otherwise the award may be set aside/refused R and E [EAA 1996 S. 68; ML Art 34(2)(a)(iv); NYC Art. V(1)(d)]

2. Some procedural issues arise before domestic courts that support and supervise the conduct of arb. Usually, Courts @ Seat, but there are some procedural issues that may arise before the courts of other countries.