International Commercial Arbitration

Topics: Arbitration, International arbitration, Arbitration award Pages: 19 (5907 words) Published: August 24, 2013

LAW5ICA – International Commercial Arbitration


Student Number: 16476928

PART I: Question 1 (30 marks)

“An international arbitration procedure is governed by the terms of the agreement between the Parties, by the Rules under which they have chosen to conduct their arbitration, and by the legislation of the jurisdiction in which they have chosen to arbitrate.”

Discuss how these three elements interact from the drafting of the dispute resolution agreement through to the enforcement of the resulting Award.

International arbitration is the process in which disputing parties from different states can elect to resolve their disputes. The outcome of this is a binding award that due to international law of the New York Convention, can be enforced in many countries. International arbitration awards are final and binding, and their enforcement in provided for by the New York Convention[1]. International arbitration is often described as a hybrid of dispute resolution, as it permits parties a uniquely broad flexibility in designing arbitral proceedings. The elementary factor of all international arbitrations is that it is consensual. Simply, without an agreement to arbitrate, there will be no arbitration. Consent is fundamental in the arbitration process and begins from the very first decision to enter into an arbitration agreement[2]. In addition, the terms of the arbitration agreement between the parties plays a primary role in governing the arbitral proceedings[3].

The inclusion of an arbitration clause in a contract streamlines the resolution of a dispute between the parties, as it sets out procedures from the beginning. By drafting a dispute resolution agreement that specifically accommodates the needs of each party, there is greater assurance of a successful negotiation. The terms between the parties and the Rules which they have chosen to govern their arbitration are highly influential in shaping the dispute resolution process and the outcome. By choosing pre-existing arbitration rules and procedures, as opposed to ad hoc, parties may feel more secure in the outcome as they are using an established format that has already been proven workable. Pre existing rules offer parties support and guidance throughout the process which can be very significant in shaping this process, as well as the enforcement of the final award.

In effect, an institutional arbitration entrusts the arbitration to a major institution, while ad hoc is conducted without this guidance or organisation. For this reason, ad hoc arbitration can be more flexible.[4]

Arbitration Rules act as a predetermined system of guidelines and procedures to assist parties throughout their arbitration process. For example, the UNCITRAL Arbitration Rules are a set of procedural rules that afford model arbitration clauses for parties to use in their contract, procedures to be used for appointing arbitrators and policies to conduct arbitration proceedings, as well as requirements regarding the arbitration award. Arbitration clauses commonly state that the parties are bound by the specific Rules of the Arbitration provider that they have chosen. Consequently during the drafting of the dispute resolution clause, parties make a conscious decision on what Rules they want to conduct their arbitration under, as these are the Rules that will govern a future dispute if it arises. Many agreements may not expressly include or outline the provider’s rules, yet they are considered part of the agreement between the contracting parties. Arbitration agreements are often pursuant to a standard form arbitration clause from the institution which they choose to refer to[5]. Rules of each institution provide procedures and policies that are to be followed and adhered to in the event a dispute arises. Inevitably, they will thus...

Bibliography: Clayton Utz ‘A guide to International Arbitration’ (2012) A Guide to International Arbitration- Second Edition.
Emilia Onyema, International Commercial Arbitration and the Arbitrator’s Contract, (Taylor and Francis Group 2010)
Gary B
Gary B. Born , International Arbitration and Forum Selection Agreements: Drafting and Enforcing, 3rd Edition (Kluwer Law International 2010)
Gloria Miccoili, ‘International Commercial Arbitration’ The American Society of International Law.
Jeff Waincymer , ‘Procedure and Evidence in International Arbitration’ (2012) Kluwer Law International.
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