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Commercial Arbitration Notes

BPTC Law Notes > Alternative Dispute Resolution Notes

Updates Available  

A more recent version of these Commercial Arbitration notes – written by City Law School students – is available here.

The following is a more accessble plain text extract of the PDF sample above, taken from our Alternative Dispute Resolution Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

ADR: COMMERCIAL ARBITRATION "COMMERCIAL ARBITRATION"

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Distinction between commercial law and consumer arbitration * "consumer" arbitration agreement where one of the parties is a legal or natural person (s90 AA) acting for purpose outside those of a trade, business or profession (Reg.3(1) Unfair Terms in Consumer Contracts Regulations 1999)
* Covers an individual acting in their private capacity and a company acting for a purpose outside its business. "Commercial arbitration" - most important definition - Art.1(1) UNCITRAL Model Law:
* The term "commercial" should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not.
* Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreements; commercial representation or agency; factoring; leasing; construction of works; consulting, engineering; licensing; investment; financing; banking; insurance; exploitation agreements or concessions; joint venture; carriage of goods or passengers by air, sea, rail or road PRIVACY & CONFIDENTIALITY

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Arbitral proceedings are confidential, but there are no express provisions enshrining this in the AA as both principles have a lot of exceptions, and were too unsettled to formulate provisions.

Privacy

* Relates to holding hearings in private where the public do not have access

* Based on the fact that parties have agreed to submit their dispute to arbitration between themselves, and between themselves only (Oxford Shipping) Confidentiality

* Obligation on those participating in arbitration not to disclose details, documents or information to anyone outside.

* Arises as a corollary to privacy of arbitration (Ali Shipping)

* Use of documents by a party in arbitration does not make them confidential if they weren't before (Milson)

* Difference to litigation: confidentiality not lifted once documents used (as it is in open court) Limits on Duty of Confidentiality

* Michael Wilson - limits still being developed:
* Extent of confidentiality depends on context and nature of documents/information
* Disclosure may be permitted where:
# Parties consent
# Court grants permission (has discretion) where:

* Disclosure is reasonably necessary for the protection of the legitimate interests of an arbitrating party

* The interests of justice so require it, or
* May apply where the party giving disclosure has advanced inconsistent statements in the arbitration and related litigation, to avoid the tribunal dealing with the litigation being misled.

* The public interest requires disclosure

PROCEDURAL RULES Bespoke Arbitration Clause

* Parties may law down procedure to be followed in arbitration in the arbitration clause Arbitral Institution Rules

* Most rules cover:
* Appointment of arbitrators
* Pleadings
* Procedure for exchanging information and evidence,
* Decision-making
* Awards
* Payment of fees and costs Silence in Institutional Rules

* s4(2) AA - Parties can make their own arrangements by agreement (including agreement to adopt an institution's rules)

* s4(3) - In the absence of such agreement, the Non-mandatory provisions apply. ROLE OF LAWYERS: KEY QUESTIONS

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Composition of the Tribunal Whether to use an institution's rules Whether arbitration should be administered by an institution Seat of the arbitration Governing law Whether (and how) any Non-mandatory provisions should be adjusted Whether to require/dispense with reasons for decisions Extent to which appeals to the court should be allowed.

Reference to Arbitration

* Which documents form the substantive contract?

* What is the effect of the arbitration clause?

* Does the actual dispute fall within it?
Defining the Issues

* Clear statements of case required for initial reference to arbitration and for the statements of case (usually) required after appointment of the tribunal. Putting together the Case

* Should written questions be put to other side's experts?

* Should there be a without prejudice meeting between the experts?
Hearings

* Preparation of skeleton arguments/written submissions

* Witness statements (usually evidence-in-chief) FORMS OF ARBITRATION

"Look-Sniff" Arbitrations

* Common in disputes over quality of goods in import-export transactions - where dispute comes down to whether goods match description

* All that may be needed is for an appropriate expert to inspect the goods, do tests, then express view on their quality.

* Procedure aimed at agreeing on suitable expert, with minimal documents and minimal argument. Short-form Arbitrations

* Where dispute of relatively low monetary value - number of institutions offer short-form procedures to deal with case in cost-efficient way.
* Eg. ICE Short-form Procedure ARBITRATORS' DIRECTIONS

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Parties are free to agree how their dispute should be resolved (s1(b)), otherwise arbitrators have the following powers.

Directions on Procedure and Evidence

* Generally for tribunal to decide all procedural and evidential matters that have been referred to it (s34(1))

* s34(2) - "Procedural and evidential matters" include:
* When and where proceedings are to be held,
* Language(s) to be used in proceedings and whether translations of documents need to be supplied,
* Whether any and, if so, what form of written statements of claim and defence are to be used, when these should be supplied and extent to which the statements can be amended later
* Whether any and if so which documents/classes of documents should be disclosed and produced, at what stage,
* Whether any and, if so, what questions should be put to the parties and the form for doing this
* Whether to apply strict rules of evidence (or other rules), the time, manner and form of evidence,
* Whether and to what extent the tribunal should itself take the initiative to ascertain the facts and law,
* Whether and to what extent there should be written and oral submissions.

* Tribunal may fix a time for compliance with orders, and may extend this time where it thinks fit (s34(3)) Conservatory Measures

* Where it is important to preserve the subject-matter of the dispute, or to allow an expert access to it

* s38(4) - The tribunal may give directions in relation to any property which is the subject of the proceedings or as to which any question arises in the proceedings, and which is owned by or is in the possession of a party to the proceedings---
* (a) for the inspection, photographing, preservation, custody or detention of the property by the tribunal, an expert or a party, or
* (b) ordering that samples be taken from, or any observation be made of or experiment conducted upon, the property.

* Powers may be exercised for the benefit of the arbitrators, an expert or another party.

* Only extend to property in the possession of another party to the proceedings, if property belongs to a non-party, it may be possible to get a court order permitting the inspection

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