The Arbitration Agreement

Prof. Sébastien BESSON

Python & Peter, Geneva

I.- Notion Definition: "In this Act, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not",

Section 2A (1) Singapore Arbitration Act (SAA)

An agreement To "submit" or "refer" disputes to arbitration Before or after the disputes have arisen

Clause of a contract (arbitration clause) or separate agreement

"An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement",

Section 2A (2) SAA

II.- Other dispute settlement clauses Mediation clauses Med-arb clauses

III.- Enforcement of arbitration agreements "A court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed"

Article 8 (1) UNCITRAL Model Law Stay of court proceedings

Order compelling arbitration

IV.- Essential elements Parties Intention to arbitrate

Subject matter of the dispute

Seat?

V.- Optional elements Examples

VI.- Pathological arbitration agreements Examples:

− "All disputes and disagreements, which may arise under this Agreement in connection this [sic] Agreement, will be solved by negotiation between parties. In case, the parties do not come to agreement, the matter will pass to Arbitration Court in Geneva (Switzerland)"

− "Any dispute arising between X and Y in connection with the AGREEMENT or transactions carried out pursuant to the AGREEMENT, which could not be settled in a friendly way, shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce of Geneva by three arbitrators designated by Y and X and they shall act in accordance with the above mentioned Rules in force at the time. The arbitration shall take place in Geneva, Switzerland"

− "Any dispute will be finally settled by the Secretary of the International Chamber of Commerce"

− "The competent instance in case of a dispute concerning this Agreement is the FIFA Commission, or the UEFA Commission, which will have to decide the dispute that could arise between the club and the agent"

Examples cont’d: − "The parties agree that any dispute or difference which may arise out of this

Agreement or the execution or interpretation of any of the Clauses hereof shall be settled amicably. If such dispute or difference cannot be settled in the aforementioned manner they shall be finally settled under the Rules of Conciliation and Arbitration of the Zurich Chamber of Commerce, Zurich/Switzerland, in accordance with the UNCITRAL Arbitration Rules. The number of arbitrators shall be three (3). ICC shall be the appointing authority acting in accordance with the rules adopted by ICC for that purpose”

Insigma Technology Co Ltd v. Alstom Technology Ltd, Singapore Court of Appeal, [2009]

SGCA 24, decision of 2 June 2009: − "(..) Any and all such disputes shall be finally resolved by arbitration before the

Singapore International Arbitration Centre in accordance with the Rules of Arbitration of the International Chamber of Commerce then in effect and the proceedings shall take place in Singapore and the official language shall be English. The tribunal shall consist of three arbitrator(s) to be appointed in accordance with the Rules which are hereby incorporated by reference into this clause. The arbitration award shall be final and binding on both Parties. Both Parties shall perform the award accordingly"

VII.- Model clauses "Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration in Singapore in accordance with the Arbitration Rules of the Singapore International Arbitration Centre ("SIAC Rules") for the time being in force, which rules are deemed to be incorporated by reference in this clause. The Tribunal shall consist of _________________ arbitrator(s). The language of the arbitration shall be ________________."

SIAC Model Clause "Any dispute, controversy or claim arising out of or relating to this contract, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre under the Hong Kong International Arbitration Centre Administered Arbitration rules in force when the Notice of Arbitration is submitted. The seat of arbitration shall be ...(Hong Kong). The number of arbitrators shall be ... (one or three). The arbitration proceedings shall be conducted in ...(insert language)."

HKIAC Model Clause

VII.- Model clauses cont’d "All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules."

ICC Model Clause "Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the LCIA Rules, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be [one/three]. The seat, or legal place, of arbitration shall be [City and/or Country]. The language to be used in the arbitral proceedings shall be [ ]. The governing law of the contract shall be the substantive law of [ ]."

LCIA Model Clause "Any dispute, controversy or claim arising out of, or in relation to, this contract, including the validity, invalidity, breach, or termination thereof, shall be resolved by arbitration in accordance with the Swiss Rules of International Arbitration of the Swiss Chambers' Arbitration Institution in force on the date on which the Notice of Arbitration is submitted in accordance with these Rules. The number of arbitrators shall be ... ("one"," three", "one or three"); The seat of the arbitration shall be ... (name of city in Switzerland, unless the parties agree on a city in another country); The arbitral proceedings shall be conducted in ...(insert desired language)."

Swiss Rules Model Clause

VII.- Model clauses cont’d "Any dispute, controversy or claim arising out of or in connection with this contract, or the breach, termination or invalidity thereof, shall be finally settled by arbitration in accordance with the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce. Recommended additions: The arbitral tribunal shall be composed of three arbitrators/a sole arbitrator. The seat of arbitration shall be […]. The language to be used in the arbitral proceedings shall be […]. This contract shall be governed by the substantive law of […]."

SCC Model Clause

VIII.- Formal requirements "(3) An arbitration agreement shall be in writing. (4)An arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct or by other means. (5) The requirement that an arbitration agreement shall be in writing is satisfied by an electronic communication if the information contained therein is accessible so as to be useable for subsequent reference. (6) Where in any arbitral or legal proceedings, a party asserts the existence of an arbitration agreement in a pleading, statement of case or any other document in circumstances in which the assertion calls for a reply and the assertion is not denied, there shall be deemed to be an effective arbitration agreement as between the parties to the proceedings",

Section 2A (3) to (6) SAA “(2) The arbitration agreement shall be in writing. (3) An arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means. (4) The requirement that an arbitration agreement be in writing is met by an electronic communication if the information contained therein is accessible so as to be useable for subsequent reference; “electronic communication” means any communication that the parties make by means of data messages; “data message” means information generated, sent, received or stored by electronic, magnetic, optical or similar means, including, but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy. (5) Furthermore, an arbitration agreement is in writing if it is contained in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other. (6) The reference in a contract to any document containing an arbitration clause constitutes an arbitration agreement in writing, provided that the reference is such as to make that clause part of the contract.",

Article 7 (2) to (6) UNCITRAL Model Law (Option I)

VIII.- Formal requirements cont’d "An arbitration agreement shall not be subject to any requirements as to its form",

Section 1507 French Arbitration Act

IX.- Arbitrability of disputes and capacity to arbitrate "1. Any dispute of financial interest may be the subject of an arbitration. 2. A state, or an enterprise held by, or an organization controlled by a state, which is party to an arbitration agreement, cannot invoke its own law in order to contest its capacity to arbitrate or the arbitrability of a dispute covered by the arbitration agreement.",

Article 177 PILS

X.- Law(s) governing the arbitration agreement Law applicable before the arbitral tribunal

Law applicable before the court seized with the merits of the dispute

Law applicable at the enforcement stage

XI.- Principle of separability The principle

− "Unless otherwise agreed by the parties, an arbitration agreement which

forms or was intended to form part of another agreement (whether or not in writing) shall not be regarded as invalid, non-existent or ineffective because that other agreement is invalid, or did not come into existence or has become ineffective, and it shall for that purpose be treated as a distinct agreement", Section 7 UK Arbitration Act

The "grey zone" of separability

XII.- Principle of competence-competence "The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.",

Art. 16 (1) UNCITRAL Model Law

Positive effect of competence-competence Negative effect of competence-competence

XIII.- Extension of the arbitration agreement to third parties and multi-contract arbitrations

The problem The different theories

Extension of the arbitration agreement to states

XIV.- End of the arbitration agreement

In general

Waiver of the arbitration agreement

Termination for lack of sufficent funds for the arbitration?