WHAT IS LEX ARBITRI UNDER......?
There are several issues to be taken into consideration in this area. First, there is the issue of the place where the arbitration proceedings will be taking place. The other issue is the case of the Arbitrator of the case. In this scenario, the place chosen was London. The discussions with regards to the said issue will be presented in the subsequent parts of the paper. On the other hand, the issue with regards to the arbitrator is his nationality. Specifically, the said arbitrator is both citizen of Switzerland and the United Kingdom. The concern here is the arbitrator having dual citizenship.
Under the ICC Rules of Arbitration, the parties are to be the ones who will decide on the location of the arbitration. Although the scenario hasn’t identified whether the courts or the parties themselves have decided, London has been considered the place where the proceedings will take place. The seat of arbitration can be extremely important. The seat does not essentially denote the location where the arbitration occurs but just the legal system the arbitration is put through. Frequently an international seat can be helpful to parties because of the features of the selected legal system and likely discrimination in a local situation. An international arbitration can similarly benefit impartiality principally if the seat is neither of the party's domestic location. Assuming that the parties involved indeed agreed to the approval of London as the seat of arbitration, the ICC rules require them to consult with the Arbitral Tribunal. This is to ensure that the place where the parties claim the seat of arbitration is appropriate and will provide an impartial location for the parties involved. This will similarly take away any possibility of remonstration from any of the parties in dispute.
On the other hand, the issue on the arbitrator will be considered. First, Article 7 of the ICC Rules states that the arbitrator must remain independent of the parties involved in the dispute. This means that he must have no connection to the parties involved that would trigger any conflict of interest within the case. It is the duty of the said individual to disclose any information that would prove to be critical to the case. Although it was not stated in the scenario, the standard procedure is that the claimant will be the one who will be the one who will provide a Request for Arbitration (Article 8). And within thirty days from the submission of the said request, the parties involved should be handing over their proposed arbitrator for the case. Otherwise, the ICC court will provide the arbitrator for the case. Given the dual nationality of the arbitrator, it appears that it has nothing to do to compromise the case. The arbitrator being both a Swiss and English national does not have any effect on the case given that would compromise his independence from the parties. Otherwise, any of the parties in the dispute could challenge the appointment of such arbitrator. (Article 11) They could do this by submitting to the Secretariat a written statement that indicated all the information and situations that have triggered them to submit their challenge. However, they must carry this out within thirty days of the appointment of the said arbitrator. And it is up to the ICC court to decide whether the challenge will be heard and the arbitrator will be replaced. (Article12)
In this scenario, the parties involved have approved to implement the ICC rules. Thus, the rules of arbitration will again be composed of the Rules of Arbitration of the International Chamber of Commerce. The issues in this context include the absence of any choice of venue and the objection of France as the seat of arbitration. In this scenario, the party in dispute appears to be hostile with one another considering they could not agree on a particular issue with regards to the arbitration process. This is revealed in their failure to choose a venue and failure to come to a union with regards to the appointment of an arbitrator. In this situation, the ICC court has carried out all the basic necessities for the arbitration to take place. It decided on the seat of arbitration, although it has been challenged by one of the parties, and it decided on the person presiding over the arbitration process, a Swiss national.
On the first issue, the absence of a location of choice of the disputing parties has given the authority to the court to decide on the party. The court then presents the case to the Arbitral Tribunal to decide on the choosing of the location of the seat of arbitration. (Article 14) However, the Arbitral tribunal could not approve a particular place right then and there. It has to consult with the parties involved in order to arrive at a consensus. This could be done through formal hearings and meetings. And the Arbitral Tribunal apparently chooses the country of France as the seat of arbitration.
In the course of these formal meetings and hearings, the second issue arises. In this instant, the Czech Co raises an objection on the place of arbitration. In this context, the said company should submit a counterclaim with regards to the general information of the case. Specifically, they could indicate any comment “as to the place of arbitration.” (Article 5, ICC) Moreover, the submission should similarly be within thirty days upon the receipt of the Request from the Secretariat. The comment on the said counterclaim should include the reason why they are declining the proposition of the ICC to conduct the arbitration in France. It appears to be a neutral place for both the parties involved. Unless Czech Co presents a reasonable justification of their objection, then the decision of the ICC will be held, thus the seat of arbitration will be in France.
The instant that Czech Co threatens not to take part of the arbitration process because of the holding of France as the seat of arbitration. The ICC court has the power to proceed with the arbitration process despite any of the refusal of the said party. (Article 6.3) Moreover, the outcomes of such arbitration processes will continue to be binding.
The parties agreed to an ad hoc arbitration. It is a proceeding that is not overseen by others and needs the parties to create their individual deals for choice of arbitrators and for provision of rules, appropriate law, processes and administrative support. Given that the parties come to the process of arbitration in a character of collaboration, ad hoc measures can be more adaptable, inexpensive and quicker than an administered proceeding. The non-attendance of administrative charges by itself makes this a well-liked option.
The arbitration agreement, regardless of it being arrived at prior to or following the dispute came about, might merely affirm that disputes involving the parties will be arbitrated, and if the seat of arbitration is chosen, in this case Belgium, that will be sufficient. If the parties are not able to concur on arbitral facets, all unsettled issues and queries attending execution of the arbitration will be decided by the law of the seat chosen for the arbitration. Such a shortened method will be effective as long as the jurisdiction chosen has a reputable arbitration law. The ad hoc proceeding does not necessarily have to be completely separated from its institutional complement. Frequently the appointment of a capable and unbiased arbitrator comprises a stumbling block in ad hoc events. In such instances, the parties can assume to assign an institutional contributor as the appointing entity. Furthermore, the parties can whenever they like during an ad hoc proceeding choose to employ an institutional contributor to manage the arbitration.
Parties yearning to take in an ad hoc arbitration clause in the original contract connecting them, or looking to reach conditions of arbitration following a dispute has taken place, have the alternative of discussing an entire collection of rules, founding processes which fit exactly their specific needs. Experience has revealed that this method can involve substantial time, concentration and cost without granting guarantee that the conditions agreed will take in hand all eventualities.
Ad hoc arbitration puts more of a weight on the arbitrators, specifically the three arbitrators, and to a slighter degree upon the parties, to systematize and manage the arbitration in an efficient way. A distinctive drawback of the ad hoc approach is that its success may be anchored upon the eagerness and compliance of the parties to see eye to eye upon the processes at an instance when they are already in disagreement. Breakdown of one or both of the parties to lend a hand in make the arbitration possible can bring about unwarranted costs of time in deciding the issues. The savings considered by means of the ad hoc arbitral procedure may be rather deceptive if setbacks brought about by an unruly party require recurring recourse to the courts throughout the proceedings.
The issues on this scenario include the lack of venue specified in the arbitration clause of the parties involved and the appointment of the arbitrator by the LCIA itself. The only thing the parties agreed upon was the use of the London Court of International Arbitration as the court that will handle their dispute. First to be discussed in this aspect is the lack of a chosen seat of arbitration. According the to the LCIA Rules, if ever the parties involved has failed to supply the necessary place of arbitration and other hearings, then the seat of arbitration will automatically be in London. (Article 16, LCIA) The parties in dispute have waived their chance to change the said location by failing to provide a written agreement that they have chosen a particular place for arbitration. Nevertheless, the LCIA still provides the parties of the dispute the necessary time to make a comment on the said seat. If they deem that another seat of arbitration would be pertinent or would even help in the case, then it is considered by the court. However, in the scenario presented here, it would be more applicable and convenient for them to carry out the arbitration proceedings in London. It is thus in the hands of the Arbitral Tribunal to decide where in London the hearings, meetings, and deliberations will be made. (Article 16.2, LCIA) Moreover, given that the seat of arbitration is in London, the LCIA rules similarly entails that the rules governing the proceedings of the arbitration would be under the pertinent laws there, thus the German law would not be applicable.
The second issue in this scenario is the appointment of the Arbitral Tribunal. In this case, it appears that there is a sole arbitrator that has to oversee the arbitration procedures. It should therefore be analyzed if the chosen German chairwoman has satisfied the criteria provided by the LCIA. It seems that the chairwoman have not shared any nationality with the participating parties in the dispute. (Article 6.1, LCIA) This also means that the arbitrator does not share the same nationality as that of the controlling shareholders any of the party in dispute considering that the majority of the shareholders in Czech Co includes a New York party. If the parties involved are not satisfied with the assigned arbitrator, then they could nominate their own as long as they have agreed on a same arbitrator. (Article 7.2, LCIA) Moreover, the recommended arbitrator of the parties involved should also submit its resume to the LCIA court as stated in Article 5.2 of the LCIA rules. However, in the said scenario, it appears that the parties have failed to present any nomination, which then prompted the court to appoint its own arbitrator. In this context, the parties waived their chance to institute an arbitrator of their choice.
The scenario reveals a very specific requirement from both parties involved. Assuming that these conditions are stated in the arbitration clause that they have agreed to, then it appears that that the said parties intends to take an entirely cooperative form of arbitration. However, they intend to resolve the dispute themselves and even specified an arbitrator. The discussion in this context will be divided on the context of who would be the claimant of the arbitration. First let the discussion be on the scenario when Czech Co would be the claimant of the arbitration. It is therefore the commission of the arbitration to take on the Rules of Arbitration of the International Chamber of Commerce. In this situation, the claimant should be the one who will be serving the request for arbitration in the ICC Secretarial. (Article 4, ICC) This is the initial step in commencing the arbitration process. The basic information on the parties involved will be required from the claimant. In addition to the said procedures, it is the commission of the claimant to pay for the advance on costs on the ICC. According to Article 1 of Appendix III of the ICC Rules, the claimant is to pay an advance payment of 2,500 US dollars. Though it is non-refundable, the said cost will still be credited to the claimant’s share on the advance costs. If the said claimant would not be able to comply with the said requirement of paying the advance fee, the Secretariat will be forced to tender a time limit. (Article 4.4, ICC) Given that the companies under dispute has proposed an arbitrator, then the ICC court would more likely to afford the said proposal.
On the other hand, if the Danish or the French Partner decides to call for an arbitration process, then the UNICITRAL Arbitration Rules will be implemented. Initially, it is the commission of either the Danish or the French partner (whoever claimed for arbitration) will have to present a notice of arbitration to the Czech Co in order to inform them of their desire for arbitration proceedings. (Article 3, UNCITRAL) Under the said rules, they could be represented by any individual that they want. After the appointment of the arbitrator (in this case, the Italian) and the appointment of the seat of arbitration, then the claimant have to present the statement of claim, provided that these claims have yet to be included in the notices that they have presented to the other party. Nevertheless, the statement of claim should include the “names and addresses of the parties; statement of the facts supporting the claim; points at issue; and the relief or remedy sought by the party.” (Article 18.2, UNCIRAL) These written statements are then used by the other party to create their statement of defence. It is in these statements that the Arbitral Tribunal will base their decisions and probable suggestions on the two disputing parties.