A COMPARISON OF VARIOUS INSTITUTIONAL ARBITRATION...

A COMPARISON OF VARIOUS INSTITUTIONAL ARBITRATION FORUMS

May 11, 2018 Prakritee Yonzon

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Why choose arbitration?

• Privacy

• Flexibility

• Neutrality (of venue, third party) • Cost effective • Time efficient

• Incase of international commercial arbitration -enforcement of awards in different jurisdictions.

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What is institutional arbitration?

• Arbitration administered by a specialised arbitration institution under its own rules of arbitration. Such as:

• International Chambers of Commerce (ICC); • London Court of International Arbitration (LCIA); • Singapore International Arbitration Centre (SIAC); • China International Economic and Trade Arbitration

Commission (CIETAC); • United Nations Commission on International Arbitration

(UNCITRAL Arbitration Rules) • Nepal Council of Arbitration (NEPCA); • International Centre for Settlement of Investment Disputes

(ICSID)

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Advantages and disadvantages of institutional arbitration? Advantages • Rules laid down will have been tried and tested. • Provision of specialist staff for administration. • Institution itself reviews draft award before sending it to

parties. • Provision of assistance during the course of arbitration.

Disadvantages • Costs, often on ad valorem basis. • Procedural complexities may lead to delays. • Time frames are too short – especially for government

bodies.

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What to look for in an arbitral institution?

• That the institution is genuine

• Modern rules of arbitration to reflect modern practise • Easily accessible • Easy to understand • Emergency reliefs • Time period (time frame, extension) • Fee structure

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Issues lawyers face

• This Agreement shall be governed by Nepalese law. The dispute shall be submitted to arbitration as per Singapore International Arbitration Center Rules (as current in effect). The place of arbitration shall be New Delhi, India.

• If the Seat is London. LCIA Rules are to Apply. Brazilian laws are to be the governing Law.

• Venue is New Delhi. Governing Law is English. Arbitration Rules are SIAC. What would be the law governing the arbitration agreement or the lex arbitri?

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International Chambers of Commerce (ICC) • Established in 1923 and administers arbitration through ICC International Court of

Arbitration. ICA functions as the arbitration body of ICC, which functions as an INGO.

• World business organisation and global network which promotes trade and

responsible business conduct. • The ICC is responsible for:

§ confirming, appointing and replacing arbitrators, as well as deciding on any challenges made against them;

§ monitoring the arbitral process; § scrutinising and approving all arbitral awards to reinforce quality and

enforceability; and § setting, managing and adjusting fees if necessary and advances § overseeing emergency proceedings before the start of the arbitration

• ICC Arbitration Rules as of 2012, amended as of 2017. • Headquarters are in Paris – centres worldwide NA, Hong Kong.

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London Court of International Arbitration (LCIA) • Formally established as the “City of London Chamber of Arbitration” in

1892, LCIA is today one of the world’s leading international institutions for commercial dispute resolution, and also offers mediation.

• LCIA Arbitration Rules, October 1 2014. • Provides efficient, flexible and impartial administration of arbitration

regardless of location, and under any system of law. • The LCIA has access to the most eminent and experienced arbitrators,

mediators and experts from many jurisdictions, and with the widest range of expertise.

• The administrative charges, and the fees charged by the tribunals it

appoints are not based on sums in issue. • It is a private, not-for-profit company, limited by guarantee and is entirely

neutral and independent of any other organization.

• Headquarters are in London.

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Singapore International Arbitration Centre (SIAC) • Independent, neutral and not-for-profit global arbitration institution, it commenced

operations in 1991 and is based on the UNCITRAL Model Law.

• An independent, neutral, centrally located third-country venue, consistently ranked 7th for the least corrupt public sector in the world in the Corruption Perceptions Index 2016, and ranked no. 1 in Asia.

• The courts offer maximum judicial support of arbitration and minimum intervention.

• Parties have a freedom of choice of counsel in arbitration proceedings regardless of geographical origin.

• There is no restriction on foreign law firms engaging in and advising on arbitration in Singapore. Further, non–residents do not require work permits to carry out arbitration services in Singapore.

• Third party funding allowed in the field of international arbitration and related proceedings.

• SIAC Investment Arbitration Rules, January 1, 2017.

• Headquarters are in Singapore.

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China International Energy and Trade Arbitration Centre (CIETAC) – HK Chapter • CIETAC was set up in 1956, as the Foreign Trade Arbitration

Commission. Permanent international arbitration institution, set up with the approval of the Government Administration Council of the Central People’s Government and under the organization of the China Council for the Promotion of International Trade.

• Headquartered in Beijing, it has 29 regional chapters. It set up its Hong Kong

Arbitration Center in September 2012. • All centres adopt the same set of Arbitration Rules, i.e. CIETAC

Arbitration Rules, are effective as from January 1, 2015 and the same Panel of Arbitrators.

• A salient feature of CIETAC arbitration is

arbitration with conciliation, a practice which is as the "Oriental Model".

the combination of internationally known

• Sector-specific, tailor made dispute resolution services - construction,

finance, grain, leather, domain name dispute resolution, online arbitration, investor-state dispute resolution and construction dispute review.

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Nepal Council of Arbitration (NEPCA)

• NEPCA was founded in 1991 and is an autonomous and non-profitable organization established to administer arbitration and other alternative methods of dispute resolution. Registered as a not for profit corportation by an Act of Parliament.

• It offers ADR services of negotiation, mediation and arbitration.

• For arbitration, it applies NEPCA Arbitration Rules, 2016 and is largely based on the ICC and the UNCITRAL model.

• NEPCA provides administrative services for arbitrating different kinds of dispute at reasonable fees.

• Based in Kathmandu.

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United Nations Commission on International Trade Law Arbitration Rules (UNCITRAL Arbitration Rules) • The UNCITRAL Arbitration Rules were initially adopted in 1976

and have been used for the settlement of a broad range of disputes, between private commercial parties where no arbitral institution is involved, investor-State disputes, State-to-State disputes and commercial disputes administered by arbitral institutions.

• Administered by institutions such as the PCA, LCIA (ad-hoc basis).

• At present, there exist three different versions of the Arbitration Rules: (i) the 1976 version; (ii) the 2010 revised version; and (iii) the 2013 version which incorporates the UNCITRAL Rules on Transparency for Treaty-based Investor-State Arbitration.

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International Centre for Settlement of Investment Disputes (ICSID) • One of the five organisations under World Bank, it offfers ADR

services such as fact-finding, conciliation, mediation and arbitration.

• To avail of the investment dispute settlement through, you have to

belong to a member state who is a party to the Convention. • Member states participate through representation on the

Administrative Council. They may also nominate persons for the ICSID Panels of Arbitrators and of Conciliators.

• The most unique feature of ICSID is that the parties may request for

revision of the award within 90 days, and annulment of the award within 120 days.

• Based in Washington D.C., also has offices in Paris.

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Appointment of Arbitral Tribunal (3 slides )

Particulars

Appointing Authority

ICC LCIA SIAC CIETAC NEPCA UNCITRAL Arbitration

ICSID

International Court of Arbitration

LCIA Court President of SIAC

Chairman of CIETAC

NEPCA also referred to as Council

PCA/ LCIA/ Court

Chairman of ICSID

KeyColour Particulars AppointmentnecessarilyfromPanels AppointmentofthirdarbitratorbyAppointingAuthority AppointmentthirdarbitratorbyParties AppointmentthirdarbitratorbyArbitrators Incasenumberofarbitratorsnotspecified,bydefault–solearbitrator Incasenumberofarbitratorsnotspecified,bydefault–threearbitrators

Particulars ICC LCIA SIAC CIETAC NEPCA UNCITRAL Arbitration

ICSID

Process Nomination by Parties – Confirmation by Court, failing which Court will appoint.

In case of three arbitrators, third arbitrator to be appointed by Court, unless otherwise agreed.

Appointment by LCIA Court (considers issue, nature and circumstances or joint agreement/ nomination.

Parties may propose/ nominate arbitrator, from or outside the Panel of arbitrators. Subject to appointment by President.

Third arbitrator – jointly nominated or procedure adopted by parties – failing which President

Parties to nominate arbitrator from the panel of arbitrators, to be confirmed by Chairman of CIETAC*.

Parties shall jointly nominate the third arbitrator or entrust Chairman for appointment.

Sole – Any party may propose names. Agreement, failing which first on the list.

Third arbitrator to be appointed as per the agreement, failing which, arbitrators chosen by the Arbitrators. Council to step in event of failure, within 15 days.

By parties, failing which appointing authority.

Three – Each party to appoint one arbitrator, and the arbitrators shall choose the third/ presiding arbitrator.

Parties to decide process, failing which Chairman shall after consulting both parties, appoint the arbitrator from the Panel.

Third arbitrator to be appointed by agreement of parties.

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Particulars

Numbers


ICSID

Sole/ three Default -sole

Sole, unless parties have agreed/ Court deems necessary.

Sole, unless parties and matter warrants three.

Sole/ three arbitrators.

Default – three arbitrators.

Default -sole arbitrator. upto three arbitrators.

Sole/ three Arbitrators.


Sole or uneven.


Time period

15 days from receipt of notification. 30 days from request.

After 35 days of receipt of request/ commence ment date

As soon as practicable – 21 days for sole arbitrator and 14 days for three arbitrators

15 days (from receipt of notice of arbitration/ respondent ’s receipt of notice of arbitration)

30 days from the commence ment of arbitration

30 days after receipt of proposal/ notification.

90 days of registration

Challenge For alleged lack of impartiality and independence within 30 days

Within 14 days of formation/ becoming aware of the grounds

Within 14 days of formation/ becoming aware of circumstances

10 days in case of disclosure, 15 days for formation/ circumstances

Within 15 days of appointment or knowing of circumstances

15 days after notification/ being aware of circumstances

Arbitrator dies/ becomes incapacitated

S

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Place/ Seat or arbitration (2 slides)

Particulars

Language

ICC Place - As determined by Parties, if not then as determined by the Court. Location – To be decided by Arbitral Tribunal after consulting with Parties

LCIA Seat – to be decided by Parties. Hearings may be held at place convenient to Arbitral Tribunal with consultation of Parties

SIAC Parties to decide on seat, failing which Arbitral Tribunal may decide as convenient.

Hearings may be at the location as per convenience of Arbitral Tribunal.

CIETAC As decided by parties, failing which as per the domicile of CIETAC, or as per the Arbitral Tribunal.

NEPCA Location shall be Council Secretariat. Hearings may be held at other places.

UNCITRAL Arbitration Place as determined by parties, if not then as determined by Arbitral Tribunal.

ICSID Place of proceedings shall be at the seat of ICSID. PCA or any other place, approval of Tribunal needed with consultation of Secretary General.

KeyColours Particulars Hasmodelclauses Placeattheseatofinstitution Lexarbitriisthatoftheseat

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Particulars Law applicable to arbitration proceeding s Default


ICSID As decided by Parties, failing which Arbitral Tribunal.

Law applicable at seat, unless parties have agreed to other rules in writing

As decided by Parties, failing which as decided by Arbitral Tribunal.

As decided by Parties, failing which as decided by Arbitral Tribunal.

As decided in the agreement

As agreed by the parties, failing which, that deemed appropriate by the Arbitral Tribunal.

London Model clause reference to Singapore.

Hongkong Arbitration law of Hongkong

Laws of Nepal

Washington

Reference Articles 18 -19

Article 16 Articles 21, 24 and 31

Article 7, 49, 74

Articles 27 and 54

Articles 44, 62 and 63

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Time frame (2 slides )


ICSID

Language Award to be given within 6 months after signing Terms of Reference.

Unless specified by parties, Arbitral Tribunal to make contact within 28 days and thereafter routine set out in Rules.

As decided by the Arbitral Tribunal.

The Arbitral Tribunal shall render the award within 6 months from the date on which the Arbitral Tribunal was formed.

To be decided by Arbitral Tribunal in case managemen t meeting and as per the case. 6 months after signing of Terms of Reference.

As established by the Arbitral Tribunal, to be confirmed by parties.

Time limit as prescribed by Tribunal.

KeyColours Particulars 6monthstimeframe Uponreceivingnoticeofarbitration Uponreceivingcompletenoticeofarbitration Uponreceiptforrequestforarbitration Wheneitherpartyrequestsforarbitration/writing

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Time frame


ICSID

Time to submit SOC

Submission of Request by Claimant , along with all material particulars.

Claimant and Respondents to work with a gap of 28 days.

Claimant may submit along with Notice of Arbitration or upon such time as decided by Arbitral Tribunal.

SOC to be submitted along with application for arbitration (Article 12)

60 days from appointment of arbitrator.

Commencement – (Rule 3)

To be submitted along with Notice of Arbitration.

As decided by Arbitral Tribunal

Date of commencement

Upon receipt of Request for arbitration.


Upon receipt of complete Notice of Arbitration.


When either of the parties write to Secretariat requesting arbitration

Date of receiving Notice of Arbitration

Registration of Request.

Average 12 – 24 months

18 months 13.8 months

6 months 12 months 1-3 years 14 months

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Expedited procedures Particulars

Process

ICC LCIA SIAC CIETAC

The Expedited Procedure applies if the disputed amount does not exceed $ 2 m, or if the parties so agree.

Appointment of emergency arbitrator to be made in 3 days and relief to be given in no less than 14 days.

Emergency Arbitrator to be appointed within 1 day of receipt of request/ payment of fees.

If the Court deems that the application warrants emergency proceedings, Arbitrator to be appointed in one day.

Time Frame Case management conference to be held within 15 days - Award to be given within 6 months

Relief to be given in no less than 14 days.

Award to be given within 14 days.

Emergency decision is to be given in 15 days.

Fees $ 40,000 £ 38,000 $22,500 $10,574

Reference Article 30 and Appendix VI

Articles 9A and 9B

Article 27. 4 and Schedule 1

Article 23.2 and Appendix III

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Fee structure ($ 10,000,000) Particulars ICC LCIA SIAC CIETAC NEPCA UNCITRAL

Arbitration ICSID

Registration/ Filing Fee (Non-refundable)

$5000 (Advance Claimants portion of costs)

£1750 $2140 (NS) / $2000 (S)

$1020 Rs. 1000 $25,000

Administrative Cost

$57,515 Upto £ 250/ hour for Secretariat + 5% of Arbitrator/s fees + postal/stamp

$3800 $18,815 Rs. 30,000 – Rs. 730,000 + 0.05% of amount above 500 m

$ 42, 000

Arbitrator’s fees (Max)

$187,400 Less than £450/ hour

Maximum of $6250

$96,088 NCB Rs. 50,000 – Rs.827,500 + 0.025 % 500 m ICB Rs. 200,000 – Rs. 26,25,000 + 0.1% above

$ 375 an hour i.e. $ 3000 per day $49,048

500m*


ICSID

Total (*Average)

$170,799 $138,384 $160,421.55 $80,007 $ 139,115

Advance/ Deposit

$ 5000 + Provisional advance + advance on costs

£1750 + as determined by Court

$2140 + Advance as fixed by Registrar

$1020 Rs. 1000 + As directed by the Registrar

* NEPCA also has adjudication fees and standing fees, to be calculated.

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A COMPARISON OF VARIOUS INSTITUTIONAL ARBITRATION...

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