Topic 5 Jurisdiction Constitution of Tribunal

7/26/2019 Topic 5 Jurisdiction Constitution of Tribunal

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Jurisdiction &Constitution of theArbitral Tribunal

InternationalCommercial Law II

AssaduzzamanTaylors Law School


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Lecture Outline

Jurisdiction of the Tribunal Requirements for the Arbitration Agreement

Construction of the arbitration agreement

Wording of Arbitration Agreement

Existence of a Dispute

Competence-Competence

Constitution of Arbitral Tribunal

Failure of aointment rocedure

!uali"cations of the Arbitrators


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Jurisdiction of theTribunal

#e$uirements for the ArbitrationA%reement

It must arise out of mutual consent

The arties must ha'e le%al caacityConsequences of the lack of capacity

Law applicable to the legal capacity

The legal capacity to enter into an arbitration

agreement The a%reement must be made in writin%

Must the agreement be contained in the samedocument?

Are signatures necessary for the validity of anarbitration a reement?

Assad Khan 3


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Jurisdiction of theTribunal

Construction of the arbitrationa%reement

Ci'il law aroach( application b theCourt of Appeal of !ithuanian la" in#venska $etroleum %&ploration A' vLithuania #$%%&' ( All ER )Comm* +%+,

Common law aroach( nvestorsCompensation #cheme LT( v )est'romwich 'uilding #ociety #(++' ( W!R+.

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)ordin% of ArbitrationA%reement

0n English la", arising under1 the contract "asconsidered more restricti2el than other formsof "ords such as arising in connection "ith1the contract see, eg, *wners of CargoLatelyLaden on 'oard the M+ (elos v (elos #hippingLtd ,The (elos- #$%%(' ( All ER )Comm* &.3,

Compare .iona Trust / 0olding Corpn v 1uri

$rivalov #$%%&' 4K5! /%, #$%%' ( !lod6s Rep$7/89 What is the ratio of the case: Do ouagree "it the polic that the 5! applied in thatcase:

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*+istence of a ,isute

4ni-;a2igation


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Competence-Competence

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-. Aointment and /echanismsof Aointin% Authorities

=ole arbitrator or arbitral tribunal ofthree

0f the agreement to arbitrate is silent onthe number of arbitrators, "ill there be asole arbitrator or a three-member tribunal:

0f there is to be a sole arbitrator, "ho "illappoint him or her:

0f there is to be a three-member tribunal,"ho "ill appoint those members:

Assad Khan


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*n%lish lawArbitration Act -0012 ss -3 4 -0

Sec. -3 The arbitral tribunal

(8 >he parties are free to agree on the number ofarbitrators to form the tribunal and "hether there isto be a chairman or umpire8

$8 4nless other"ise agreed b the parties, anagreement that the number of arbitrators shall bet"o or an other e2en number shall be understood

as requiring the appointment of an additionalarbitrator as chairman of the tribunal8

38 0f there is no agreement as to the number ofarbitrators, the tribunal shall consist of a solearbitrator8

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56CIT#AL /odel Law

4;C0>RA! ?odel !a", Art -7

)(* >he parties are free to determine thenumber of arbitrators8

)$* ailing such determination, thenumber of arbitrators shall be three8

0n cases "here a signiBcant sum is at

stae or, the parties come from =tates"ith dierent legal and commercialtraditions, a panel of three arbitrators"ould be the normal pattern8

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Institutional #ules

>he AAA Rules Art8 7 and !C0A Rules Art8 78/pro2ide that there "ill be one arbitratorunless the parties ha2e agreed other"ise or

the institution belie2es that there should bethree8

Article )$* of the 0CC Rules states )here theparties have not agreed upon the number of

arbitrators2 the Court shall appoint a solearbitrator2 save where it appears to theCourt that the dispute is such as to warrantthe appointment of three arbitrators34"

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)ho will aoint the solearbitrator8

=ec8 (. of the Arb8 Act (++. he parties are free to agree on the procedure for

appointing the arbitrator or arbitrators, including theprocedure for appointing an chairman or umpire8

)$* 0f or to the extent that there is no such agreement, thefollo"ing pro2isions appl8

)3* 0f the tribunal is to consist of a sole arbitrator, theparties shall Fointl appoint the arbitrator not later than $das after ser2ice of a request in "riting b either part to do

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If there is to be a three9membertribunal2 who will aoint thosemembers8

Sec. -1 of the Arb. Act -001 :rocedurefor aointment of arbitrators(

)7* 0f the tribunal is to consist of threearbitratorsG

)a* each part shall appoint one arbitrator notlater than (/ das after ser2ice of a request

in "riting b either part to do so, and)b* the t"o so appointed shall forth"ithappoint a third arbitrator as the chairman ofthe tribunal8

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; Arbitrators

S. -1 :rocedure for aointment of arbitrators)/* 0f the tribunal is to consist of t"o arbitrators, each partshall appoint one arbitrator not later than (/ das afterser2ice of a request in "riting b either part to do so8

).* 0f the tribunal is to consist of t"o arbitrators and anumpireG

)a* each part shall appoint one arbitrator not later than (/das after ser2ice of a request in "riting b either part todo so, and

)b* the t"o so appointed ma appoint an umpire at an timeafter the themsel2es are appointed and shall do so beforean substanti2e hearing or forth"ith if the cannot agree ona matter relating to the arbitration8

)&* 0n an other case )in particular, if there are more thant"o parties* section ( applies as in the case of a failure ofAssad Khan (/


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Failure of aointmentrocedure

=ec8( )$* an part to the arbitration agreement ma)upon notice to the other parties* appl to the court toexercise its po"ers under this section8

)3* >hose po"ers areG

)a* to gi2e directions as to the maing of an necessarappointmentsH

)b* to direct that the tribunal shall be constituted b suchappointments )or an one or more of them* as ha2e been

madeH)c* to re2oe an appointments alread madeH

)d* to mae an necessar appointments itself8

)/* An appointment made b the court under this section

has eect as if made "ith the agreement of the parties8Assad Khan (7


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XL Ins Ltd v Toyota Motor Sales,USA,Inc?

I! the applicant "as a maFor insurer andthe t"o respondents "ere >oota Jroup ofcompanies8 Arbitration Clause ga2e t"o

arbitrators po"er to appoint third8 Disputesunder the polic are to be determined in!ondon under the pro2ision of >heArbitration Act (+7% or its successors8 >he

contract also pro2ides that the substanti2ela" that go2erns the polic is the internalla"s of the =tate of ;e" orL8

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XL Ins Ltd v Toyota Motor Sales,USA,Inc?

>he decided that parties shouldha2e a right to obFect and partiesobFected to all names8 Court

appointed English arbitrator curialla" "as important8 Kno"ledge of 4=la" and ; la" "as not crucial as

>oota "ere prepared to acceptCanadian arbitrator8 >hird qualities(* abilit to deal "ith substanceH b*

abilit to deal "ith procedureH 3*Assad Khan (&


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;. !uali"cations of theArbitrators

An arbitrator must ha2e the capacit toe2aluate conMicting statements of la" orfact, as "ell as the "isdom, courage,and expertise to render a decision insuch a "a that the parties-especiall

the losing part-"ill recogniNe both thefairness of the procedure and the Bnalitof the decision8

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6ationality

UNCITRAL ML, Art.!"!5o personshall be precluded by reason of hisnationality from acting as an arbitrator2

unless otherwise agreed by the parties" UNCITRAL Rules, Art.#!$"!n making

the appointment the appointing

authority shall take into account as wellthe advisability of appointing anarbitrator of a nationality other thanthe nationalities of the parties4"

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6ationality

LCIA Rules Art. #!%" &Thenationality of parties shall beunderstood to include that of

controlling shareholders orinterests"4

?ultiplicit of corporate nationalities"ithin a group, ho"e2er, should notstand in the "a to the appointment

of suitable neutral arbitrators8Assad Khan $%


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'ash(ani v )ivra* +%- USC$

>he claimant and the defendant established aFoint 2enture in (+( for the purposes of propertin2estment8 0t "as a term of the agreement thatan dispute bet"een the parties arising out of

the 2enture should be referred to threearbitrators, one of "hom "as to be appointed beach part and all of "hom "ere to be respectedmembers of, and holders of high oOce "ithin,

the 0smaili communit8 >he defendant disputedthe 2alidit of that appointment, claiming that itconstituted unla"ful discrimination contrar toregulation .)(*)a*)c*8

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'ash(ani v )ivra* +%- USC$

Pn appeal, court dre" a clear distinctionbet"een those "ho "ere, in substance,emploed and those "ho "ere independentpro2iders of ser2ices not in a relationship of

subordination "ith the person "ho recei2ed theser2icesH that an arbitrator6s role "as that of anindependent pro2ider of ser2ices not in arelationship of subordination "ith the parties "ho

recei2ed his ser2ices and "as not one ofemploment under a contract personall to do"orH that, accordingl, appling the

Furisprudence of the Court of Qustice, the

Regulations "ere not applicable to the selection8Assad Khan $$

Documents

Topic 5 Jurisdiction Constitution of Tribunal