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Robert Gordon University: A veritable force in global legal education - Study International

Google International ADR News - Thu, 2017-12-21 11:10

Robert Gordon University: A veritable force in global legal education
Study International
Set amid the buzz of Aberdeen – the oil and gas capital of Europe and a hub in Northeast Scotland – the Law School at Robert Gordon University (RGU) offers a comprehensive range of accredited and professionally-recognised law degrees at the ...

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Robert Gordon University: A veritable force in global legal education - Study International News

Google International ADR News - Thu, 2017-12-21 11:10

Study International News

Robert Gordon University: A veritable force in global legal education
Study International News
Set amid the buzz of Aberdeen – the oil and gas capital of Europe and a hub in Northeast Scotland – the Law School at Robert Gordon University (RGU) offers a comprehensive range of accredited and professionally-recognised law degrees at the ...

and more »

Billion-Dollar Technology Dispute Resolved with 'Gig Judiciary' - Law.com

Google International ADR News - Thu, 2017-12-21 10:56

Law.com

Billion-Dollar Technology Dispute Resolved with 'Gig Judiciary'
Law.com
FedArb, a Silicon Valley-based alternative dispute resolution firm, was recently involved in helping bring to resolution a $1 billion-plus cathode ray tubes antitrust tech dispute that expanded to over 50 parties and United States international ...

Qatar- CIArb to open branch at QICDRC - MENAFN.COM

Google International ADR News - Thu, 2017-12-21 07:10

Qatar- CIArb to open branch at QICDRC
MENAFN.COM
The Chartered Institute of Arbitrators (CIArb) is set to open a branch office in Qatar following the signing of a MoU with the Qatar International Court and Dispute Resolution Centre (QICDRC). CIArb is a global hub of excellence for the practice and ...

Qatar- CIArb to open branch at QICDRC - MENAFN.COM

Google International ADR News - Thu, 2017-12-21 07:10

Qatar- CIArb to open branch at QICDRC
MENAFN.COM
The Chartered Institute of Arbitrators (CIArb) is set to open a branch office in Qatar following the signing of a MoU with the Qatar International Court and Dispute Resolution Centre (QICDRC). CIArb is a global hub of excellence for the practice and ...

Qatar- CIArb to open branch at QICDRC - MENAFN.COM

Google International ADR News - Thu, 2017-12-21 07:10

Qatar- CIArb to open branch at QICDRC
MENAFN.COM
The Chartered Institute of Arbitrators (CIArb) is set to open a branch office in Qatar following the signing of a MoU with the Qatar International Court and Dispute Resolution Centre (QICDRC). CIArb is a global hub of excellence for the practice and ...

Australia: International Commercial Arbitration 101 - Mondaq News Alerts

Google International ADR News - Thu, 2017-12-21 06:52

Australia: International Commercial Arbitration 101
Mondaq News Alerts
Russell Thirgood and Erika Williams share the basics of international commercial arbitration, from start to finish. With the increasing internationalisation of business, more clients are engaging in cross-border commercial activities. If your clients ...

Enforcement of Annulled Awards: A Restatement for the New York Convention?

Kluwer Arbitration Blog - Thu, 2017-12-21 02:00

Marike R. P. Paulsson

On the 24th of November, the Supreme Court of The Netherlands issued a judgment pertaining to the request for enforcement of an award annulled at the seat, Russia. The Supreme Court applied Article V(1)(e) of the New York Convention (hereinafter the “NYC”) and refused to enforce the award in favor of Nikolay Viktorovich Maximov for an amount of USD 153 million against OJSC Novolipetsky Metallurgichesky Kombinat, one of Russia’s largest steel companies.

The request of enforcement was denied by the District Court in Amsterdam and that refusal to enforce was confirmed by the Court of Appeal of Amsterdam.

The Supreme Court confirmed: ‘a court may refuse to enforce an award if that award had been set aside by a competent authority in the country where the award was rendered’ [emphasis added] (Article V(1)(e) of the NYC). Refusing to enforce an award when it is set aside is the rule of thumb and is in the spirit of ex nihilo nil fit (“out of nothing follows nothing”). I would call this ‘traditional’ because since the drafting of Article V(1) in 1958, courts and commentators have created various theories that allow for the enforcement of annulled awards. Thus the question as to whether an annulled award can be enforced elsewhere can no longer solely be addressed under the NYC: one must look locally. Article V(1)(e) has become somewhat of a hollow phrase, perhaps much to the chagrin of those who drafted it, if they would be here to witness the demise of this provision.

The first shockwave was in the 1990s in various parts of the world with Hilmarton in France and Chromalloy and Baker Marine in the US. 1)Hilmarton v. Omnium de Traitement et de Valorisation (OTV) (Supreme Court 1994), in Yearbook Commercial Arbitration XX (1995) (France no. 23), at 663-665, Chromalloy Aeroservices Inc. v. The Arab Republic of Egypt (District Court of Columbia 1996), in Yearbook Commercial Arbitration XXII (1997) (United States no. 230), at 1001-1012, Baker Marine (Nig) Limited v Chevron (Nig) Limited, Chevron Corp., Inc. and others v Danos and Curole Marine Contractors, Inc. (2nd Cir. 1999), in Yearbook Commercial Arbitration XXIV (1999) (United States no. 288), at 909-914. jQuery("#footnote_plugin_tooltip_8877_1").tooltip({ tip: "#footnote_plugin_tooltip_text_8877_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); And then the noise died. The rule of thumb became predominantly Article V(1)(e) of the NYC in its traditional sense: an annulled award cannot be enforced. The debate had lost interest and relevance.

The second shockwave came in 2010, with the Netherlands creating its version of the enforcement of annulled awards in Yukos v. Rosneft.2)Yukos Capital s.a.r.l. (Luxembourg) v. OAO Rosneft (Russian Federation) (Court of Appeal 2009), in Yearbook Commercial Arbitration XXXIV (Netherlands no. 31) at 703-714. jQuery("#footnote_plugin_tooltip_8877_2").tooltip({ tip: "#footnote_plugin_tooltip_text_8877_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); The US, in its Second Circuit, relied on Termo Rio to enforce an annulled award in Pemex.3) TermoRio S.A. E.S.P. (Columbia), LeaseCo Group and other v. Electrantra S.P. (Columbia), et al. (District for Columbia 2007), in Yearbook Commercial Arbitration XXXIII (2008) (United States no. 621), at 955-969, Corporacion Mexicana de Mantenimiento Integral, S. de R.L. de C.V. v. PEMEX – Exploracion y Produccion (Southern District for New York 2013), in Yearbook Commercial Arbitration XXXVIII (2013), at 537-541. jQuery("#footnote_plugin_tooltip_8877_3").tooltip({ tip: "#footnote_plugin_tooltip_text_8877_3", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Both engrained in ideas of public policy.

The Dutch Supreme Court on the Enforcement of Annulled Awards

In the case at hand, the setting aside in Russia was based on the following grounds and was found relevant by the Dutch Supreme Court:

  1. The experts assisting the Russian Federation in the arbitration procedure worked at the same Institute as one of the arbitrators. Moreover, one of the experts was the Dean of the Institute and thus fulfilled a higher position than the arbitrator in question.
  2. The tribunal failed to disclose the above.
  3. The Russian court held that the subject matter was not arbitrable.
  4. The method used by the tribunal to assess the validity of the agreement violates Russian mandatory law.

The Dutch Supreme Court held that the annulment of the award stopped enforcement.

The annulment grounds listed above could be considered similar to Article V(1)(b), V(2)(a) of the NYC (due process violation and arbitrability) and the latter could be similar to Article V(2)(b) of the NYC (public policy) but perhaps also Article V(1)(c) if one could argue it as part of the mandate. The first pertains to the impartiality of the arbitral tribunal. A ground that is often a basis for a setting aside; under many national laws it falls under the due process umbrella.

The Yukos v. Russia case that has made headlines around the world where the tribunal had ordered Russia to pay USD 50 billion, was different in that the award was annulled based on the lack of a valid arbitration agreement (provisional application of the Energy Charter Treaty), an annulment ground quite different from annulment grounds based on due process and public policy. Verifying whether there was a valid arbitration agreement is taken seriously by courts as they are the guardians of a party’s fundamental right to access to courts. It must be clear that parties – on the basis of freedom of contract – gave up that fundamental right.

The question is: if an annulment is based on something that falls under any notion of public policy or due process (arbitrability, lack of impartiality, etc) is this subject to a local standard (the so-called Local Standard Annulment (“LSA”))? If so, how would that impact the rule of thumb under Article V(1)(e) of the NYC?

The Supreme Court – in line with most lower court judgments in The Netherlands – held that the award could not be enforced because the award had been set aside and thus applied Article V(1)(e). However, it did reiterate the test developed by the Court of Appeal in the 2010 Yukos case: if a court cannot recognize a foreign judgment annulling an award because that recognition would violate Dutch public policy, it will enforce the award.4)See for an analysis of the case, M.Paulsson, The 1958 New York Convention in Action (2016 Kluwer), pp. 210-211. jQuery("#footnote_plugin_tooltip_8877_4").tooltip({ tip: "#footnote_plugin_tooltip_text_8877_4", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Its result is similar to the doctrine applied by the US courts – Termo Rio and Pemex – which also finds it origin in public policy.

Remarkably, the court also analyzed another doctrine: that of the Local Standard Annulment (LSA) v. the International Standard Annulment (ISA) theory and the question of discretionary power under Article V(1) of the NYC. It holds that an annulment of a foreign arbitral award does not per se stop a court from allowing the enforcement of such annulled award because of the discretionary power allocated to the court on the basis of the word ‘may’ in Article V(1) of the NYC, albeit in exceptional cases only. The court states that one of those exceptional cases present itself if the annulment judgment is based on grounds that do not align with Article V(1)(a-d) of the NYC or if the annulment grounds are not acceptable on the basis of internationally acceptable standards (the latter have been referred to as International Standard Annulments (“ISAs”))) The court in effect reproduces Article IX of the 1961 European Convention, stating that any grounds similar to Articles V(1)(a-d) of the NYC are proper annulment grounds. Article IX of the European Convention provides that a court will refuse to enforce an annulled award if that annulment was based on Article V(1)(a-d) of the NYC. This doctrine is referred to as the theory of the Local Standard Annulment and it has been codified in the 1961 European Convention, Article IX.

What is confusing and troubling is that the annulment grounds in the case at hand seem not to align with Article V(1)(a-d) of the NYC nor do all of them they seem to be ISAs (if one is to understand that an ISA may not be based on any idea of public policy). Yet, the court applied Article V(1)(e) of the NYC in its traditional sense. The decision demonstrates again that when courts develop, adopt and apply theories such as the above, one is no longer able to predict the outcome under Article V(1)(e) of the NYC.

This decision, along with the decisions of the US 2nd Circuit (Termo Rio and Pemex) with respect to any questions under V(1)(e) of the NYC ought to be a source of concern: first, because it demonstrates the restraints of the NYC that is now 59 years old and second, it reveals the practice of judicial rewriting of the NYC. No more is left of its provisions than a mere framework that will be read differently by courts around the world and notably by courts in important trading nations. It is time to consider the cracks and revisit the idea of the New York Convention now that it is about to celebrate its 60th anniversary. The NYC has become a box of chocolates: it doesn’t matter anymore what the text of the treaty says: what matters is the reading glasses used by every single court in the world. ‘If it ain’t broken, don’t fix it?’ At the 50th Anniversary that was the adagio but one would be dishonest to say that the cracks have not become visible this past decade. If not a new treaty, perhaps one single set of reading glasses designed by a reputable organization with a mandate based on the treaty’s Final Act of 1958 could be gifted to the treaty at the occasion of its 60th Anniversary.

References   [ + ]

1. ↑ Hilmarton v. Omnium de Traitement et de Valorisation (OTV) (Supreme Court 1994), in Yearbook Commercial Arbitration XX (1995) (France no. 23), at 663-665, Chromalloy Aeroservices Inc. v. The Arab Republic of Egypt (District Court of Columbia 1996), in Yearbook Commercial Arbitration XXII (1997) (United States no. 230), at 1001-1012, Baker Marine (Nig) Limited v Chevron (Nig) Limited, Chevron Corp., Inc. and others v Danos and Curole Marine Contractors, Inc. (2nd Cir. 1999), in Yearbook Commercial Arbitration XXIV (1999) (United States no. 288), at 909-914. 2. ↑ Yukos Capital s.a.r.l. (Luxembourg) v. OAO Rosneft (Russian Federation) (Court of Appeal 2009), in Yearbook Commercial Arbitration XXXIV (Netherlands no. 31) at 703-714. 3. ↑ TermoRio S.A. E.S.P. (Columbia), LeaseCo Group and other v. Electrantra S.P. (Columbia), et al. (District for Columbia 2007), in Yearbook Commercial Arbitration XXXIII (2008) (United States no. 621), at 955-969, Corporacion Mexicana de Mantenimiento Integral, S. de R.L. de C.V. v. PEMEX – Exploracion y Produccion (Southern District for New York 2013), in Yearbook Commercial Arbitration XXXVIII (2013), at 537-541. 4. ↑ See for an analysis of the case, M.Paulsson, The 1958 New York Convention in Action (2016 Kluwer), pp. 210-211. function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: International Arbitration and the Rule of Law
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The post Enforcement of Annulled Awards: A Restatement for the New York Convention? appeared first on Kluwer Arbitration Blog.

CIArb set to open office in Qatar - MENAFN.COM

Google International ADR News - Wed, 2017-12-20 15:53

MENAFN.COM

CIArb set to open office in Qatar
MENAFN.COM
(MENAFN - Gulf Times) The Chartered Institute of Arbitrators (CIArb) is set to open a branch office in Qatar following the signing of an MoU with the Qatar International Court and Dispute Resolution Centre (QICDRC). CIArb is a global hub of excellence ...

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CIArb set to open office in Qatar - MENAFN.COM

Google International ADR News - Wed, 2017-12-20 15:53

CIArb set to open office in Qatar
MENAFN.COM
(MENAFN - Gulf Times) The Chartered Institute of Arbitrators (CIArb) is set to open a branch office in Qatar following the signing of an MoU with the Qatar International Court and Dispute Resolution Centre (QICDRC). CIArb is a global hub of excellence ...

CIArb set to open office in Qatar - Gulf Times

Google International ADR News - Wed, 2017-12-20 14:25

Gulf Times

CIArb set to open office in Qatar
Gulf Times
The Chartered Institute of Arbitrators (CIArb) is set to open a branch office in Qatar following the signing of an MoU with the Qatar International Court and Dispute Resolution Centre (QICDRC). CIArb is a global hub of excellence for the practice and ...

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DR Faculty Seminar in Israel – Welcome to the Mouth of the Volcano

ADR Prof Blog - Wed, 2017-12-20 11:47
This guest post is authored by our good friend Michael T. Colatrella, Jr. (McGeorge). On the sixth day of our trip, we met with an Israeli security and negotiation expert Ron Schatzberg. Ron works for the Tel Aviv-based think tank, the Economic Cooperation Foundation (ECF), whose mission is to promote a stable, peaceful and prosperous … Continue reading DR Faculty Seminar in Israel – Welcome to the Mouth of the Volcano →

Has the Public Policy Exception Returned to Haunt Indian Courts?

Kluwer Arbitration Blog - Wed, 2017-12-20 06:00

Wasiq Abass Dar

On 1 November 2017, a division bench of the Supreme Court of India (hereinafter SCI) referred the matter between Venture Global Engineering LLC and Tech Mahindra Ltd. to a larger bench, in view of the diverging opinions emerging from the division bench. In substance, the SCI was looking at the legality of the order of the High Court, which reversed the Trial Court’s decision to set-aside the award on grounds of violation of public policy of India.

 

Facts:

Venture Global Engineering LLC (hereinafter VGE), a company incorporated under the U.S. laws; and Tech Mahindra Ltd., formerly known as Satyam Computers Pvt. Ltd (hereinafter Satyam), an Indian Company, entered into a joint venture and shareholder agreement in Oct 1999. Section 8 of the Agreement defined ‘events of default’, and the rights and obligations of parties upon the occurrence of the ‘event of default’. One of the clauses in Section 8 of the Agreement provided that, within 30 days after becoming aware of the occurrence of the ‘event of default’, the non-defaulting party shall have the option to either purchase the defaulting shareholder’s shares at the book value or cause the immediate dissolution and liquidation of the joint venture company.

 

Between March 2003 and May 2004, 21 members of the Group of Companies, of which the VGE was a member, filed for bankruptcy and were declared bankrupt. Bankruptcy, as per Section 8 of the Agreement, was categorized as ‘event of default’. Consequently, disputes arose between the parties, and Satyam invoked the arbitration clause that provided for LCIA arbitration, with laws of State Michigan, United States, as the governing law of the agreement. The clause also provided for compliance with the relevant laws of India.

 

The award was delivered in April 2006, where the arbitrator rejected claims of VGE, and inter alia, directed VGE to sell their 50% shares to Satyam at book value. This was followed by litigations both in the U.S. and India.

 

VGE filed a civil suit in India before the City Civil Court in Secunderabad – where it sought a “declaration that the award is illegal and without jurisdiction”, and “a decree for granting of permanent injunction” against Satyam from getting the award enforced. The court granted an ex parte injunction order, restraining Satyam from enforcing the award. Satyam challenged the order before the High Court of Andhra Pradesh, where the said appeal was allowed, and the City Civil Court was directed to adjudicate afresh on merits.

 

Satyam’s prayer before the City Civil Court for rejection of the plaint and dismissal of the suit was accepted. VGE’s appeal against the order before the High Court was dismissed. VGE approached the SCI, which allowed the appeal (Venture-I); directing, inter alia, that VGE was entitled to challenge the award before Indian Courts, as Part I of the Arbitration and Conciliation Act of India (hereinafter ACA) was applicable even to a foreign award according to the law laid down in Bhatia International’s case. The SCI, without expressing any opinion on the merits of the claims made by parties, directed that “the Trial Court was at liberty to transfer the case to the competent court to decide the case…”. Accordingly, setting-aside proceedings under Section 34 of the ACA were initiated before the Court of 2nd Additional Chief Judge (hereafter Trial Court), Hyderabad, in 2008.

 

Meanwhile, in January 2009, B. Ramalinga Raju, who was the Chairman and Founder of Satyam, disclosed that balance sheets of Satyam had been manipulated to present inflated profits. Upon this disclosure, VGE filed an application before the court to present additional facts and argued for setting-aside of the award on an additional ground of being against the public policy of India. The Trial Court allowed VGE’s application. Satyam challenged the order before the High Court, arguing that application for setting-aside was not filed within the prescribed limitation period under the Indian law, and new ground of challenging the award could not be invoked after the expiry of the limitation period. The High Court allowed the application of Satyam, which led to another round of litigation before the SCI. VGE challenged the decision of the High Court, and the SCI in Venture II allowed the appeal – restoring Trial Court’s order. The SCI emphasized that the facts revealed after the making of the award are relevant, in order to establish whether the making of the award has been induced by fraud.

 

Following the Venture II SCI judgment, the Trial Court allowed the application of VGE, and set-aside the award. The Trial Court reasoned that the transfer of 50% shares of the Joint Venture Company to Satyam at book value, as directed in the award, as against fair value, violated the provisions of the Foreign Exchange Management Act, 1999 (hereinafter FEMA) – hence against the public policy of India. It also held that the facts revealed by Ramalinga Raju constitute fraud and misrepresentation on part of Satyam – having a causative link with the facts that formed the basis of the award, therefore against the public policy of India. Satyam challenged the award before the High Court. Allowing the appeal, the High Court reversed the Trial Court’s decision. VGE, aggrieved by the decision of the High Court, filed an appeal before the SCI.

 

Decision:

Justice Sapre observed that the Trial Court correctly found the direction to transfer shares at book value instead of fair value as a violation of FEMA – hence against public policy. He largely relied on the definition of expression ‘public policy’ discussed in Associate Builders’ case. It was held that violating FEMA provisions would amount to patent illegality and, thus, public policy of India was violated. Taking a cue from the findings of the SCI in Venture I and Venture II, he observed that suppression of material facts on part of Satyam clearly has a causative link inter se the companies involved. He further reasoned that had the facts been brought before the shareholder of the joint venture, VGE would have been able to get first right to terminate the agreement and seek relief against Satyam – as a breach on Satyam’s part happened prior to VGE’s bankruptcy. Also, as suppression of material fact continued during the arbitration proceedings, the proceedings and the subsequent passing of the award cannot be said to have held fairly or reasonably. Finding that the award was tainted by fraud committed by Satyam, it was held to be against public policy of India

 

Justice Chelameswar, had a different opinion. In substance, he observed that the Trial Court had failed to provide reasons as to how the award, which directed the transfer of shares on book value instead of fair value, would violate the public policy of India. Criticizing the Trial Court, he observed that in absence of any basis in facts, or identification of the provision of law with which the award is in conflict with, the conclusions drawn cannot legally be sustained. On the issue of the alleged fraud committed by Satyam and its influence on the award, Justice Chelameswar sided with the finding of the High Court that fraud was not proved before any court. He observed that the Trial Court’s theory that concealment and misrepresentation of facts by Satyam establish a causative link, making the award opposed to the public policy of India, was also not supported by cogent reasons. He stressed that in Venture II, the SCI emphasized only upon the relevance of pleading those ‘concealed facts’, and did not hold that the ‘concealed facts’ constituted material facts rendering the award liable to be set-aside. He supported the decision of the High Court, that the appeal be dismissed, and the award restored.

 

Comment:

Venture III, is a reminder that dealing with the public policy exception continues to be a struggle for the Indian courts. Although the SCI produced diverging opinions in the case at hand, as far as the making of the award being induced by fraud is concerned, one cannot ignore to notice that both opinions agree upon the legal position that if the causative link is proved between the frauds committed and the award rendered, then such an award would be in violation of public policy of India. Justice Sapre’s observation that violation of FEMA is contrary to public policy of India takes us back to the same debate as to whether patent illegality, on the face of it, should be taken as violation of public policy of India. It is pertinent to note that the SCI on multiple occasions, for example in Associate Builders, Mc Dermott International, Centrotrade Minerals, J.G. Engineers, has stressed that patent illegality, if of trivial nature, should not be held against public policy. Patent illegality must go to the very root of the matter. The amended version of ACA, in Explanation (2A) of Section 34(2)(b)(ii), also seems to support this proposition. Now that the matter has been referred to a larger bench, it will be interesting to see how the legal issues will finally be settled, and how the decision will shape the approach of Indian courts as far interpretation of the public policy exception is concerned.

More from our authors: International Arbitration and the Rule of Law
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The post Has the Public Policy Exception Returned to Haunt Indian Courts? appeared first on Kluwer Arbitration Blog.

CIArb to open branch at QICDRC - The Peninsula Qatar

Google International ADR News - Wed, 2017-12-20 03:42

The Peninsula Qatar

CIArb to open branch at QICDRC
The Peninsula Qatar
The Chartered Institute of Arbitrators (CIArb) is set to open a branch office in Qatar following the signing of a MoU with the Qatar International Court and Dispute Resolution Centre (QICDRC). CIArb is a global hub of excellence for the practice and ...

and more »

CIArb to open branch at QICDRC - The Peninsula Qatar

Google International ADR News - Wed, 2017-12-20 03:42

The Peninsula Qatar

CIArb to open branch at QICDRC
The Peninsula Qatar
The Chartered Institute of Arbitrators (CIArb) is set to open a branch office in Qatar following the signing of a MoU with the Qatar International Court and Dispute Resolution Centre (QICDRC). CIArb is a global hub of excellence for the practice and ...

and more »

DR Faculty Seminar in Israel – Shorashim and “Anger as Idolatry”

ADR Prof Blog - Tue, 2017-12-19 17:20
After spending almost a full week in Israel learning about the unfathomable complexities of the Israeli-Palestinian conflict, some of us (me included) expressed growing pessimism and even despair about the prospects for peace here. So it was uplifting to start our last full day of the Academic Partners for Peace DR Law Faculty Seminar talking … Continue reading DR Faculty Seminar in Israel – Shorashim and “Anger as Idolatry” →

Passengers' trust and satisfaction with aviation in decline - International Airport Review

Google International ADR News - Tue, 2017-12-19 04:01

International Airport Review

Passengers' trust and satisfaction with aviation in decline
International Airport Review
The main barrier to formally complaining is the belief that it will take too much time and effort (stated by 55 per cent of those who considered making a formal complaint but did not go ahead with it) – something true of both airline and airports ...

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Patrick H. Cantilo, JD, Presented with the Albert Nelson Marquis Lifetime Achievement Award by Marquis Who's Who - The Daily Telescope

Google International ADR News - Tue, 2017-12-19 02:53

Patrick H. Cantilo, JD, Presented with the Albert Nelson Marquis Lifetime Achievement Award by Marquis Who's Who
The Daily Telescope
Although most of Mr. Cantilo's recent practice has been in insurance rehabilitation and liquidation, reorganization of health services corporations, and insurance corporate restructuring, merger, and acquisition, much of his law practice has also been ...

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“Behind-the-Table” Conflicts in the Failed Negotiation for a Referendum for the Independence of Catalonia: A Student Note by Oriol Valentí i Vidal

Harvard Negotiation Law Review - Mon, 2017-12-18 18:37
By Oriol Valentí i Vidal* Spain is facing its most profound constitutional crisis since democracy was restored in 1978. After years of escalating political conflict, the Catalan government announced it would organize an independence referendum on October 1, 2017, an outcome that the Spanish government vowed to block. This article represents, to the best ofRead more

Recent Development of Ad hoc Arbitration in China: SPC Guidance and Hengqin Rules

Kluwer Arbitration Blog - Mon, 2017-12-18 17:57

Wei Sun

On 30 December 2016, the Supreme People’s Court of China (“SPC”) released Opinion on Providing Judicial Protection for the Development of the Pilot Free-Trade Zones (“Opinion”), which was regarded as allowing ad hoc arbitration in China. On 23 March 2017, the Management Committee of Hengqin New Zone and Zhuhai Arbitration Commission (“ZAC”) jointly published the Ad hoc Arbitration Rules of (Guangdong) Pilot Free Trade Zone Hengqin Area of Zhuhai (“Rules”). As the first ad hoc arbitration rules in China, the Rules will to some extent implement the Opinion. However, a lot has to be done before ad hoc arbitration can truly become a practical dispute resolution method in China.

Overview of the Opinion

Article 9.3 of the Opinion reads,

“In case companies registered within the Pilot Free-Trade Zones agree to arbitration in certain locations in mainland China, with certain arbitration rules, and by certain persons, such arbitration agreement may be recognized as valid. In case a people’s court finds such arbitration agreement to be invalid, it shall report the matter to a higher court for review. In case the higher court agrees with the lower court, it shall further report the matter to the SPC and shall only decide on the matter upon the SPC’s reply.”


There are some issues arising from this Opinion:

1. Issue of authority. According to the PRC Law on Legislation, litigation and arbitration mechanisms can only be set forth in laws. In other words, only the legislative branch (i.e. the National People’s Congress or its standing committee) has the power to create or recognize a new form of arbitration in China. Without authorization from the legislative branch, the Opinion appears to be flawed from the start.

2. Limited ad hoc arbitration. Broadly speaking, ad hoc arbitration means arbitration conducted totally in accordance with parties’ agreements, which does not have to follow certain arbitration rules. The Opinion allows arbitration in certain locations, with certain arbitration rules and by certain persons, in which certain arbitration rules reflect that the SPC only allows ad hoc arbitration to be conducted under arbitration rules. This is in fact limited ad hoc arbitration.

3. Obstacles to implementation. The current legal framework and unique Chinese legal environment pose plenty of barriers for the implementation of the Opinion. The obstacles include:

a) The lack of local ad hoc arbitration rules. Although there are several ad hoc arbitration rules available, they may not be fit for arbitrations conducted in China. For example, Article 6(2) of the UNCITRAL Arbitration Rules states any party may request the Secretary-General of the Permanent Court of Arbitration to designate the appointing authority. Unlike international arbitration institutions which are willing and have specific rules to act as an appointing authority, local Chinese institutions such as CIETAC and BAC are not able to play such role.

b) Traditional reliance on institutions and lack of trust in arbitrators. Due to the more prominent role of the government in Chinese legal culture, Chinese parties and even law practitioners tend to rely more on court institutions rather than individuals. Choosing institutional arbitration over litigation is already a leap of faith because arbitration institutions are, in the eyes of many people, not as official as courts.

c) Lack of arbitrators in PRC with experience in ad-hoc arbitration: In ad hoc arbitration, arbitrators have to adeptly predict and deal with important procedural issues and ensure the quality of the substantive award, with no or very limited institutional supervision and support. Even veteran institutional arbitrators with substantial experience will need special training to be competent. As China never had a tradition for ad hoc arbitration, it is difficult to imagine there are many arbitrators in PRC up to this job.

d) Personal risk for ad hoc arbitrators. In recent years, there have been a few widely reported cases where judges are threatened, insulted, or even killed by discontent parties. In ad hoc arbitration, since the tribunal cannot “hide” behind an institution but has to directly deal with the parties in both procedural and substantive matters, the personal risk is also a concern.

e) The need for reform of PRC arbitration laws: The current Chinese arbitration legal framework does not permit ad hoc arbitration, so the procedural rules set forth in the PRC Arbitration Law cannot accommodate the special issues of ad hoc arbitration. This is not limited to the legitimacy issue discussed above.

Highlights of the Rules

The Rules went into force on 15 April 2017. The Rules apply when two companies registered in any free-trade zones agree to arbitration under the Rules. There are some highlights of the Rules:

1. Competence-competence: According to Article 9.4, the arbitral tribunal is capable of deciding on its jurisdiction in the case. Before the Rules, it was always the arbitration commission rather than the tribunal that was to decide on jurisdictional issues. So, the Rules actually established the real competence-competence of the arbitral tribunal. Despite this, the fact that the court can to a large extent intervene still remains unchanged.

2. Appointment and replacement of arbitrators: The Rules provide that, the parties may directly appoint arbitrators, or agree on a method for appointing arbitrators, or agree on an appointing authority. The default appointing authority is ZAC. Similarly, the Rules provide that the appointing authority has the power to decide on the withdrawal and replacement of arbitrators.

3. Qualifications of arbitrators: The Rules require ad hoc arbitrators to meet the same criteria for institutional arbitrators set forth in the PRC Arbitration Law. However, Article 21.3 also states that, in case that ZAC acts as the appointing authority, it will appoint arbitrators in accordance with its list of arbitrators. Due to the local nature of ZAC, the flexibility of parties to appoint arbitrators who do not meet the criteria for institutional arbitrators in China would be greatly discounted by this limitation.

4. Determination of fees and costs: In this regard, the Rules are nearly identical to the UNCITRAL Rules. The fees of arbitration are first determined through agreement between the parties and the tribunal. If they cannot agree on fees, the appointing authority decides. On the other hand, the Rules are less clear in the actual procedures to determine arbitration fees.

5. Tribunal secretarial support: The Rules provide that, with the parties’ consent, the arbitral tribunal may use third party services including financial management, tribunal secretaries, and lease of venues.

6. Provisional measures: Article 13 of the Rules allows the parties to apply for provisional measures directly from the court or through ZAC. However, since the PRC Arbitration Law does not permit ad hoc arbitration, the rules about provisional measures in the PRC Arbitration Law can only apply to institutional arbitration. The PRC Civil Procedure Law and the Opinion do not include such rules either. Therefore, it is doubtful whether provisional measures are legally available for ad hoc arbitration.

7. ZAC’s confirmation of awards: The Rules provide for ZAC to confirm an ad hoc award. After an award is made by the ad hoc tribunal, each party may apply to ZAC for confirmation of the award. Once ZAC decides to confirm it, the award will be deemed an institutional arbitral award made by ZAC. As an attempt to reduce the risk of non-enforcement of ad hoc awards, its actual effect remains to be seen.

Suggestions

1. Legitimacy. The PRC Arbitration Law needs to be amended to resolve the legitimacy issue of ad hoc arbitration. If not, ad hoc arbitration in PRC cannot take place, let alone prosper.

2. Detailed procedural rules in PRC Arbitration Law. For example, the court in the seat of arbitration should assist in the appointment of ad hoc arbitrators, as well as the revocation of mandate of arbitrators. These mechanisms are available in arbitration laws of other jurisdictions, but are lacking in China. Therefore, it is suggested that the National People’s Congress and SPC conduct a thorough research on ad hoc arbitration, and then introduce a comprehensive and detailed legal framework. One or two local ad hoc arbitration rules are far from enough to motivate ad hoc arbitration.

3. More ad hoc arbitration rules. The Rules are the first and only ad hoc arbitration rules currently in China, and their implementation largely rely on the support of ZAC. To stimulate healthy competition and accumulate experiences, other arbitration institutions should also be motivated to promulgate their own ad hoc arbitration rules.

4. Training of professionals. Besides experienced ad hoc arbitrators, professional counsels are also likely to conduct ad hoc arbitration. They can help the client conclude feasible ad hoc arbitration agreements, and avoid unnecessary delays in arbitration proceedings. When legal assistance of ad hoc arbitration has been established by law, there is also need for judges who understand and grasp the practice of ad hoc arbitration. The training of these professionals demands an urgent solution.

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