This chapter explores the procedural aspects of international arbitral proceedings in commercial, investment and inter-state settings. First, the chapter considers the choice of procedures in international arbitration, including the autonomy of parties to select procedures, the limits on that autonomy and the discretion of arbitral tribunals to establish arbitral procedures. Second, the chapter considers the principle of judicial non-intervention in arbitral proceedings. Third, the chapter explores how parties and arbitral tribunals customarily approach various significant “procedural” issues in practice, such as scheduling, the taking and admissibility of evidence, disclosure or discovery, and the like. Fourth, the chapter considers in greater detail the subject of disclosure in international arbitration. Finally, the chapter considers the related topics of confidentiality and transparency in international arbitration.
A. APPLICABLE PROCEDURAL RULES IN INTERNATIONAL ARBITRATION
Historically, it was frequently said or assumed that arbitrators were required to apply the domestic procedural rules applicable in national courts in the arbitral seat.1 For the most part, it is now widely accepted that the domestic procedural rules of local courts are not applicable—mandatorily or otherwise—in international arbitrations seated on local territory.2 Rather, one of the most fundamental characteristics of contemporary international arbitration is the parties’ broad freedom to agree upon the procedures to be followed in their arbitration. As explained below, this principle is acknowledged in the New York Convention (and other international instruments concerning arbitration);3 it is guaranteed by arbitration statutes in many developed jurisdictions;4 it is confirmed in the decisions of national courts and arbitral tribunals;5 and it is contained in and facilitated by the rules of most leading arbitration institutions.6
As discussed below, the autonomy of parties to choose their own arbitral procedures (like their autonomy to choose the applicable procedural law of the arbitration) in international commercial arbitrations is often qualified by the mandatory requirements of applicable national law. In leading arbitral forums, these requirements are ordinarily minimal.
“As a speedy and informal alternative to litigation, arbitration resolves disputes without confinement to many of the procedural and evidentiary structures that protect the integrity of formal trials.”7 Nevertheless, most jurisdictions require that arbitral proceedings satisfy at least some minimal standards of procedural fairness and equality.
Jurisdictions typically impose their own standard of procedural fairness in the international commercial arbitration context, variously termed “due process,” the “right to be heard,” “natural justice,” or “procedural public policy.” Both in verbal formulation and in specific application, these standards differ from country to country. For the most part, however, differences among national standards of procedural fairness in developed arbitral centers are not significant, in part because of a desire by national courts to accommodate the needs of international arbitration and to avoid parochial procedural requirements.
Although national law in most developed states will permit the parties to agree upon the arbitral procedures, subject only to minimal due process or procedural regularity requirements, parties often do not agree in advance on detailed procedural rules. At most, international commercial arbitration agreements will provide for arbitration pursuant to a set of institutional rules, which will ordinarily supply only a broad procedural framework.8 Filling in the considerable gaps in this framework will be left to the subsequent agreement of the parties or, when they cannot agree, the arbitral tribunal.
Where the parties have not agreed upon particular (or any) procedural matters, most national arbitration laws, and institutional rules, grant the tribunal in an international arbitration substantial discretion to establish arbitral procedures. This authority has enormous practical importance because it is a rare case where the parties to an arbitration will find common ground on all of the procedural issues that confront them.
The following materials examine both the parties’ autonomy to select arbitral procedures and the tribunal’s discretion, absent agreement by the parties, to prescribe procedures in an international arbitration. The materials also explore the mandatory limits, imposed by national and international law, on the parties’ procedural autonomy and the arbitrators’ procedural discretion.
BELGIAN JUDICIAL CODE
Articles 1699, 1700, 1708
1699. Notwithstanding any agreement to the contrary, the parties shall be treated with equality and each party shall be given a full opportunity of presenting his case, pleas in law and arguments in conformity with the principle of adversarial proceedings. The arbitral tribunal shall ensure that this requirement as well as the principle of fairness of the debates are respected.
1700(1). The parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.
1700(2). Failing such agreement, the arbitral tribunal may, subject to the provisions of Part 6 of this Code, determine the rules of procedure applicable to the arbitration in such manner as it considers appropriate.
1700(4). The arbitral tribunal shall set the necessary investigative measures unless the parties authorise it to entrust this task to one of its members. It may hear any person and such hearing shall be taken without oath. If a party holds a piece of evidence, the arbitral tribunal may enjoin it to disclose the evidence according to such terms as the arbitral tribunal shall decide and, if necessary, on pain of a penalty payment.
1700(5). With the exception of applications relating to authentic instruments, the arbitral tribunal shall have the power to rule on applications to verify the authenticity of documents and to rule on allegedly forged documents. For applications relating to authentic instruments, the arbitral tribunal shall leave it to the parties to refer the matter to the Court of First Instance within a given time limit. In the circumstances referred to in §2, the time limits of the arbitral proceedings are automatically suspended until such time as the arbitral tribunal has been informed by the most diligent party of the final court decision on the incident.
1708. With the approval of the arbitral tribunal, a party may apply to the Court of First Instance ruling as in summary proceedings to order all necessary measures for the taking of evidence in accordance with article 1680, paragraph 4.
GUATEMALAN CODE OF CIVIL AND COMMERCIAL PROCEDURE, 1963
Articles 287, 288 (repealed)
287. Mandatory Nature of the Proceedings. The arbitral proceedings shall be conducted in accordance with the provisions of the following articles and may not be modified under any circumstances by agreement of the parties.
288. De Jure Arbitration. Arbitral proceedings shall be conducted in accordance with the following rules:
(1) Arbitrators shall grant the parties a period of time, which may not exceed one-fourth of the period fixed in the deed embodying the submission, in order to state in writing their claims, submit the documents on which such claims are based, and produce, also in writing, any other means of evidence, attaching as many copies as there are parties;
(2) Copies of the documents submitted by each party shall be handed over to the other parties, granting them another period of time, which may not exceed one-fourth of the period fixed in the deed embodying the submission, in order to file answers, submit the documents, and produce the evidence necessary to rebut the arguments of the opponent;
(3) Arbitrators shall take the evidence they deem necessary to prove those facts having a direct and known bearing on settlement of the dispute submitted to arbitration. The time limit for the taking of evidence may not exceed one-fourth of the total period designated in the deed embodying the submission;
(4) Any type of evidence may be taken during arbitration even on the initiative of the arbitrators, in accordance with the general rules of evidence of this Code. For evidence that may not be taken by the arbitrators themselves, the arbitrators shall request assistance from the court of first instance of the place of arbitration, which shall take any measures deemed suitable for the purpose;
(6) Finally, in accordance with the law, the arbitrators shall render the award on each of the points submitted to their decision within the remaining part of the period of time designated in the submission.
SAPPHIRE INT’L PETROLEUM LTD v. NATIONAL IRANIAN OIL CO. Ad Hoc Award of 15 March 1963, 35 I.L.R. 136 (1967)
INTERIM AWARD IN ICC CASE NO. 5029
XII Y.B. Comm. Arb. 113 (1987)
MALMBERG, FLETCHER-COOKE, ZAAZOUE, Arbitrators. [Two French companies entered into a joint venture with two Egyptian companies. The joint venture thereafter entered into a contract to construct certain civil works in Egypt. Article 5(1)(b) of the Contract provided: “The Contract shall be deemed to be an Egyptian Contract and shall be governed by and construed according to the laws in force in Egypt.” Article 67 of the agreement contained an arbitration clause, providing for arbitration under ICC Rules. The agreement did not specify an arbitral seat. Disputes arose, and the French companies filed a request for arbitration under the ICC Arbitration Rules against the Egyptian employer. Pursuant to Article 12 of the 1975 ICC Rules, the ICC selected the Netherlands as the arbitral seat.
The defendant argued that Egyptian law of civil procedure governed the arbitration proceedings. It reasoned that the choice of law clause in Article 5 covered both substantive and procedural subjects, including issues relating to the arbitration. According to defendant, the text of Article 67 of the agreement “clearly expressed the intention of the parties that the arbitration is a local arbitration and not international” and “that it is internal and not external.” The claimant agreed with the defendant that Egyptian law rules of interpretation should be applied to the parties’ contract, but distinguished between substantive and procedural law. According to the claimant substantive law is governed by the law chosen by the parties (i.e., Egyptian law), but procedural law is governed by the mandatory provisions of the place of arbitration (i.e., Dutch arbitration law).]
The choice of law clause contained in Article 5(1)(b) of the Contract must be interpreted in accordance with the rules of contract interpretation of Egyptian law, in particular Articles 150 et seq. of the Egyptian Civil Code.9 The Arbitral Tribunal will follow these rules of interpretation in respect of all the jurisdictional issues.
The Arbitral Tribunal holds that the law governing the arbitration is the arbitration law of the Netherlands. The Arbitral Tribunal notes at the outset that the Contract is a truly international contract involving parties of different nationalities (i.e., French and Egyptian), the movement of equipment and services across national frontiers, and the payment in different currencies…. The international character of the Contract is inconsistent with the defendant’s allegation that the parties intended to provide for domestic, internal (i.e., Egyptian) arbitration. Such intent cannot be derived from the choice of law clause contained in Article 5(1)(b) of the Contract, providing for the applicability of Egyptian law, whilst Article 67, providing for arbitration under the [ICC Rules], clearly expresses the contrary. As it is recognized in virtually all legal systems around the world, a basic distinction must be made between the law governing the substance and the law governing the procedure. That distinction is also recognized in Egyptian conflict of laws: whereas Article 19 of the Egyptian Civil Code provides for the law governing the substance of the dispute, Article 22 is concerned with the law governing the procedure. Accordingly, if the parties had wished that the arbitration be governed by Egyptian procedural law, they should have made a specific agreement thereon. Article 5(1)(b) of the Contract is not such a provision as it does not mention specifically that arbitration is governed by Egyptian law. Failing such agreement, the arbitration law of the place governs the arbitration. This principle is in accordance with Article V(1)(a), (d) and (e) of the New York Convention to which Egypt and the Netherlands have adhered.
The agreement of the parties in arbitration under the [ICC Rules] in Clause 67 meant that, failing their agreement on the place of arbitration, they gave, under Article 12 of the Rules, a mandate to the Court of Arbitration to fix the place of arbitration on their behalf. It is to be noted that defendant itself proposed in the alternative The Hague as the place of arbitration. The prevailing interpretation of the [ICC Rules] nowadays, is also that the mandatory provisions of the arbitration law of the place of arbitration govern the arbitration, irrespective of the law governing the substance. Whereas Article 13(3) of the Rules contains the contractual conflict of laws rules for determining the law governing the substance of the dispute, Article 11 is concerned with the rules governing the proceedings [and specifically requires observance of the mandatory procedural requirements of the seat.] …
The Arbitral Tribunal emphasizes that the applicability of Dutch arbitration law in the present case by no means implies that the Dutch rules concerning proceeding before Dutch State Courts are applicable. According to Dutch arbitration law, parties are free to agree on the rules of procedure and, failing such agreement, the arbitrator determines the conduct of the proceedings, subject to a few necessary mandatory provisions. By referring to the [ICC Rules], the parties have “internationalized” the arbitration within this legal framework.…
FINAL AWARD IN ICC CASE NO. 7626
XXII Y.B. Comm. Arb. 132 (1997)
[An Austrian company (“Company A”) entered into a technical cooperation agreement with another Austrian company (“Company B”). The agreement required Company A to provide technical assistance to Company B. Disputes about this assistance arose, and Company B commenced arbitral proceedings against Company A under the ICC Rules. The arbitral seat was England.] There is one procedural issue which we deal with at the outset: the admissibility of the diaries of Dr. Y and Dr. V [an employee of Company A]. Company B has objected to its admission in this arbitration on the basis of §21 of the Indian Evidence Act.
Dr. Y and Dr. V kept a daily notebook into which they contemporaneously summarized items of business significance. They entered into that notebook comments and issues discussed with Mr. X at various meetings. Company A presented a copy of the relevant pages of the notebook recording notes of the meetings with Mr. X…. At the hearing the Tribunal requested and were provided with a copy of the German text from the notebooks, with a transcription and English translation. Dr. Y had his notebook with him and referred to it during the hearing. He gave evidence and … explained to the Tribunal what various notes meant and the context in which they were recorded.… Mr. X also had notebooks with him to which he referred and to which no objection was expressed. Mr. X’s notebooks were not offered as supporting evidence by Company B.
Company B argues that Dr. Y’s diary entries are inadmissible in evidence in this arbitration. It submits that except for statements recorded in books in the course of business by a person who is dead, admissions made in a written record such as a diary cannot be presented and relied upon by the party who keeps or made the diary. Company B referred us to §21 of the Indian Evidence Act which provides: “Admissions are relevant and may be proved as against the person who makes them, or his representative in interest; but they cannot be proved by or on behalf of the person who makes them or by his representative in interest….” Section 32 of the Indian Evidence Act provides that written evidence may be relied on in certain circumstances where the maker of the statement is dead or not easily available.
This is an international arbitration procedure. The strict rules of evidence, as they apply in England where the Tribunal is sitting, or in India, do not apply. In accordance with the power given to the arbitrators in the Terms of Reference, and under the ICC Rules, the Tribunal has the right to determine whether and what evidence shall be admitted. The Tribunal considers that the diary notes of Dr. Y and Dr. V are admissible. They were used as an aide memoire by Dr. Y as to what occurred and were explained to the Tribunal. Company B had the opportunity to cross-examine him on that evidence. It is up to the Tribunal to give to those diary notes whatever credence and weight it considers appropriate. The notes are not in themselves proof of what was discussed, but do indicate and support the evidence given by Dr. Y. Furthermore, and in any event, the Tribunal does not consider that the Indian Evidence Act has any relevance to the conduct of and the admission of evidence in this arbitration….
CARD v. STRATTON OAKMONT, INC.
933 F.Supp. 806 (D. Minn. 1996)
DAVIS, District Judge. In his Statement of Claim [in the arbitration], Petitioner made references to a civil complaint for Preliminary and Permanent Injunction filed by the [U.S. Securities and Exchange Commission (“SEC”)] against Stratton Oakmont [and certain related matters]. Respondents assert that consideration of these SEC proceeding in the … arbitration, by the panel, evidences partiality and a manifest disregard of the law. In support of this argument, Respondents cite [domestic U.S. judicial decisions which] granted motions to strike from complaints … references to SEC consent judgments or SEC complaints pursuant to the applicable Federal Rules of Evidence. Petitioner argues, and this Court agrees, that reliance on [these decisions] is misplaced as the Federal Rules of Evidence do not apply to arbitration proceedings.
We commence by discussing what arbitration is and what it is not. Arbitration is a creature born of a contract between the parties who are desirous of avoiding litigation in a court of law. Arbitration requires the parties agree to rules of arbitration. Frequently, rules of arbitration specifically exclude the application of judicial rules of evidence. Instead, the arbitrators determine the materiality and relevance of all evidence offered. Arbitrators are not judges of a court nor are they subject to the general superintending power of a court. Arbitration provides neither the procedural protections nor the assurance of the proper application of substantive law offered by the judicial system. Those who choose to resolve dispute by arbitration can expect no more than they have agreed. One choosing arbitration should not expect the full panoply of procedural and substantive protection offered by a court of law. In short, “by agreeing to arbitrate, a party ‘trades the procedures and opportunity for review of the courtroom for the [perceived] simplicity, informality, and expedition of arbitration.’” [In deciding whether communicating settlement offers to the arbitrators was grounds for vacating an award, the court held that such conduct fell within the broad procedural rule of arbitration and that the court did not have the power to draft a contract between the parties or the power to impose judicial rules of evidence on an arbitration proceeding.]
In the present case, the Submission Agreements entered into by the parties provided that arbitration would proceed in accordance with the Constitution, By-Laws, Rules, Regulations and/or Code of Arbitration Procedure of the sponsoring organization, NASD. Section 34 of the Code of Arbitration Procedure, which governs NASD arbitration proceedings, provides the following: “Evidence. The arbitrators shall determine the materiality and relevance of any evidence proffered and shall not be bound by the rules governing the admissibility of evidence.” Section 35 provides: “Interpretations of Provisions of Code and Enforcement of Arbitrator Rulings. The arbitrators shall be empowered to interpret and determine the application of all provisions under this Code and to take appropriate action to obtain compliance with any ruling by the arbitrators. Such interpretations and actions to obtain compliance shall be final and binding upon the parties.” These sections make clear that the panel had the authority and discretion to determine materiality and relevance without reference to the judicial rules of evidence and that the decision to accept such evidence by the panel is final and binding upon Respondents. Accordingly, this Court has no power to judicially impose its rules of evidence on this arbitration proceeding.
Respondents also argue that the panel improperly failed to make a tape recording of Petitioner’s cross examination. Section 37 of the Code of Arbitration Procedure provides:
“A verbatim record by stenographic reporter or a tape recording of all arbitration hearings shall be kept. If a party or parties to a dispute elected to have the record transcribed, the costs of such transcription shall be borne by the party or parties making the request unless the arbitrators direct otherwise. The arbitrators may also direct that the record be transcribed. If the record is transcribed at the request of any party, a copy shall be provided to the arbitrators.”
Respondents assert that a verbatim record of the arbitration hearings was kept by tape recording, except for a significant portion of the hearing—Petitioner’s cross-examination. Respondents argue that failure to record Petitioner’s cross-examination constitutes misbehavior by the panel and further evidences the prejudice to Respondents as a result of the panel’s numerous misdeeds.
Respondents do not point to any authority supporting their argument that an arbitration award may be vacated because a verbatim record of a portion of an arbitration proceeding was not made. There is no evidence before the Court that the panel purposefully orchestrated the failure of the tape record while Petitioner was cross-examined. Respondents argue, however, that the particular portion not recorded is so critical to its ability to have the award vacated that it clearly establishes partiality. Assuming Respondent could point to portions of Petitioner’s cross-examination that completely contradict his claims of excessive trading, such evidence could be used to vacate the award as it is not proper for this Court to revisit the arguments and evidence presented to the arbitrators. In reviewing an arbitration award, this Court must focus on whether the arbitral process itself was flawed, not the result.
Furthermore, even though §37 of the Code of Arbitration Procedure may have been by its literal terms violated by the panel it does not follow that the award must be nullified as the Code does not have the force of law. Respondents must point to a statutory violation to warrant vacation of an arbitral award, not a violation of the Code of Arbitration Procedure.…
CORPORACION TRANSNACIONAL DE INVERSIONES, SA DE CV v. STET INTERNATIONAL, SPA
(2000) 49 O.R.(3d) 414 (Ontario Ct. App.)
By the Court: … The appellants … argued that Lax J. erred in failing to find that the appellants had been unable to present their case within the meaning of Article 34(a)(ii) of the Model Law…. The appellants accepted the statement of principle … in Schreter v. Gasmac Inc. (1992), 7 O.R.(3d) 608, 623 (Gen. Div.):
“The concept of imposing our public policy on foreign awards is to guard against enforcement of an award which offends our local principles of justice and fairness in a fundamental way, and in a way which the parties could attribute to the fact that the award was made in another jurisdiction where the procedural or substantive rules diverge markedly from our own, or where there was ignorance or corruption on the part of the tribunal which could not be seem to be tolerated or condoned by our courts.”
We are satisfied that the procedure followed by the tribunal did not offend our principles of justice and fairness in a fundamental way. We are also satisfied that the appellants were not deprived of an adequate opportunity to present their case….
We are satisfied that the manner in which the UTISA/STET agreements were to be disclosed did not infringe the principles of fundamental justice nor deprive the appellants of the opportunity to present their case. Prior to the final hearing, the tribunal ordered that the respondents disclose information concerning the agreements whether or not the appellants had signed a confidentiality agreement. The respondents provided this information to the appellants [by supplying redacted versions of the agreements] and the tribunal found that the respondents had complied with its order. The appellants made no complaint about the disclosure at the final hearing. They now argue that only full and timely disclosure of the actual agreements could meet the principles of fundamental justice. There are at least three problems with these submissions.
First, the agreements could have been obtained by the execution of a confidentiality agreement. The appellants made no good faith attempt to pursue this avenue for obtaining the agreements. They raised spurious objections to the respondents’ form of confidentiality agreement and did not provide an alternative form of agreement to the respondents. Second, as Lax J. said, “how can it be said that the [appellants] were denied equality of treatment or that the Tribunal acted in a manner inconsistent with Ontario public policy when the Tribunal was never asked to determine the relevancy of the redacted portions or to order their production?”
Finally, had the appellants not withdrawn from the arbitration, they would have had the same access to the information, including the agreements, as did the tribunal during the testimony of the respondents’ witness. This is not speculation, as argued by the appellants. It follows from the terms of Article 25(c) of the Model Law and Article 15(2) of the [1988 ICC Rules]. The latter provides that if one of the parties is absent without valid excuse the arbitrator shall proceed with the arbitration and “such proceedings shall be deemed to have been conducted in the presence of all parties.” It hardly offends our notions of fundamental justice if a party that had the opportunity to present its case and meet the opposing case forfeits that opportunity by withdrawing from the arbitration. This argument is entirely without merit.
We are also satisfied that in the circumstances, and given the tribunal’s right to control its own procedure and ensure the orderly conduct of the arbitration (albeit in a manner consistent with Article 18), there was no breach of the principles of fundamental justice because of the absence of the Cuban witnesses. We reject the submission that the appellants’ counsel was misled by the May 8 letter from the chairman. As Lax J. held, the tribunal had no power to compel evidence from Cuban witnesses nor to issue letters rogatory. The appellants’ right to apply to the Ontario courts for letters rogatory to obtain the Cuban evidence did not depend upon interpretation of Ontario law but flowed from Article 27 of the Model Law.…
Moreover, it was open to the tribunal to find that the appellants had been given an adequate opportunity to obtain this evidence in one form or another. Well before the final hearing, the tribunal had proposed a variety of alternatives so that the evidence could be produced. The appellants made no attempt to obtain a further adjournment of the hearing to pursue attempts to obtain the Cuban evidence. Rather, they withdrew from the arbitration on the basis that there had been a settlement. The tribunal’s response to the appellants’ attempts to obtain the Cuban evidence did not breach the principles of fundamental justice nor offend public policy.
1. Objectives of arbitral procedures. What are the parties’ procedural objectives in agreeing to international arbitration? Do the parties desire that the local rules of civil procedure in their respective home jurisdictions be replicated? That the rules of civil procedure of the arbitral seat be applied? What sort of procedure do parties want in an international arbitration? Consider the following options: (a) internationally-neutral procedural rules or rules from the home jurisdiction of one party or the other; (b) flexible procedures, tailored to the parties’ particular dispute, or civil litigation procedures used in domestic litigations. What are the advantages and disadvantages of each? Consider §§33 and 34 of the English Arbitration Act, 1996, excerpted at p. 121 of the Documentary Supplement. What do they suggest about the objectives of the arbitral process? Can the provisions be improved?
2. Domestic civil procedure rules of arbitral seat not generally applicable in international arbitrations. Historically, it was often said that international arbitrators were obliged to apply the civil procedure rules applicable in local courts. This view is reflected in the arguments unsuccessfully made in ICC Case No. 5029 and ICC Case No. 7626. It is also reflected in the commentary, as late as 1989, by two distinguished English commentators:
“It is widely believed that an arbitrator, merely because he is an arbitrator, is empowered to act on evidence which would not be strictly admissible in a Court of Law. This is not so. Arbitrators are bound by the law of England, and the rules regarding admissibility of evidence are part of that law. Thus, if an arbitrator admits evidence which is inadmissible, he commits an error of law which may be appealed against. Furthermore, if the arbitrator deliberately accepts evidence which is obviously inadmissible, he commits misconduct and the award will be set aside, at any rate if the evidence is important.” M. Mustill & S. Boyd, Commercial Arbitration 352 (2d ed. 1989).
Compare the similar rationale of the tribunal in Sapphire: “The present arbitration, then, is governed by the law of procedure of Vaud and is subject to the judicial sovereignty of Vaud. Therefore, as far as procedure is concerned, it is subject to the binding rules of the Code of Civil Procedure of Vaud of November 20, 1911, and in particular to the 8th Title of this Code.”
As the decisions in ICC Case No. 5029 and ICC Case No. 7626 illustrate, however, most contemporary authorities reject the view that the local procedural rules of the arbitral seat’s domestic courts must be applied in international arbitrations. In the words of one authority:
“The law of the place of arbitration had at one time a very material relationship with the procedure to be adopted in an arbitration, including international arbitration. However, that influence has been diluted. The law of the major centers of arbitration eschews prescribing procedure.” Webster, Evolving Principles in Enforcing Awards Subject to Annulment Proceedings, 23 J. Int’l Arb. 201, 222 (2006).
Would the arbitration in Card have been more just if the Federal Rules of Evidence had applied? Would the arbitration in ICC Case No. 7626 have been more fair if English (or Indian) rules of evidence had applied?
Note that, under most legal systems, arbitrators are not free to ignore applicable national substantive law unless the parties have expressly permitted them to decide ex aequo et bono. See infra pp. 1020–21. If international arbitrators are not permitted to ignore national substantive law, why should they be permitted to ignore national procedural rules? Is there a principled distinction between procedural and substantive issues in this regard?
Some institutional rules expressly state that some procedures applicable to national court proceedings are not appropriate in arbitration. See 2014 ICDR Rules, Art. 21(10). Is this justified? Compare 2012 ICC Rules, Art. 19(1).
3. No generally-applicable code of procedure for international commercial arbitrations. In most international commercial arbitrations, there is no preexisting or generally-applicable code of procedural rules that govern conduct of the arbitral proceedings. As discussed above, it is well-settled in virtually all developed jurisdictions that arbitrators are not required to apply local civil procedure rules applicable in national court litigation, in an international arbitration. See supra p. 786. Further, in ad hoc arbitrations, there will often be no procedural rules of any sort incorporated into the parties’ arbitration agreement.
Consider the statutory provisions regarding arbitral procedures excerpted above. Do Articles 18 and 19 of the UNCITRAL Model Law, Article 182 of the SLPIL, Article 1509 of the French CCP or §§33 and 34 of the English Arbitration Act prescribe any general code of procedure for international arbitrations? Does the FAA do so?
In almost all jurisdictions, the tribunal and the parties will ordinarily have full discretion to establish the course of the proceedings (subject only to the requirements of mandatory national law, which, as discussed below, are very limited in most developed jurisdictions). See infra pp. 793–95. In institutional settings, most arbitral institutions—notably the ICC, AAA/ICDR, LCIA and ICSID—have promulgated rules that apply to arbitrations where the parties have adopted those rules in their arbitration agreement or otherwise. In addition, the UNCITRAL Rules are available for selection by parties who desire an essentially ad hoc arbitration, but supplemented by a skeletal procedural framework and an appointing authority. See supra pp. 72–74. Each of these sets of institutional rules gives some structure to the arbitral process by providing a general procedural framework for the conduct of the arbitration, but they leave the overwhelming bulk of issues relating to the arbitral process unaddressed, for resolution by the parties and arbitral tribunal.
Is this absence of any general procedural code, applicable in all international arbitrations, desirable? Consider the suggestion by one commentator that “a formal system of procedure designed specifically for arbitration would be a good idea.” Silberman, International Arbitration: Comments From A Critic, 13 Am. Rev. Int’l Arb. 9, 13 (2002). See Park, Arbitration’s Protean Nature: The Value of Rules and the Risks of Discretion, 19 Arb. Int’l 279 (2003). Is that a desirable suggestion? Or does it contradict some of the basic objectives of the arbitral process? Consider the following:
“Procedure is no unalterable course of conduct to which all tribunals must adhere. It should always be adapted to facilitate the course of the particular arbitration and to enable the economical accomplishment of its task within the time fixed. In each arbitration the rules of procedure should be designed to reconcile the divergence of national viewpoints concerning procedure, to require of litigants no more procedural steps than are necessary to enable a satisfactory disposal of the particular case, to conserve litigants’ interests from injury by departures from the contemplated course of proceedings, and to bring the arbitration to the speediest possible end compatible with justice. Only through a conscious and careful adaptation of procedural rules to the requirements of each arbitration as it arises will the procedural ills of international arbitration be minimized and its utility as a means for the settlement of disputes between states be fostered.” Carlston, Procedural Problems in International Arbitration, 39 Am. J. Int’l L. 426, 448 (1945).
See also ICC, Controlling Time and Costs in International Arbitration 6 (2d ed. 2012) (“experience shows that in practice it is difficult at the time of drafting the [arbitration] clause to predict with a reasonable degree of certainty the nature of disputes and the procedures that will be suitable for those disputes”).
Would arbitrations be fairer and more efficient if—as in national courts—a single, predictable, tested, and refined set of procedural rules applied in all cases? Is justice or efficiency really served by having part-time arbitrators re-invent the procedural wheel anew in every case? What benefits does such procedural flexibility provide? Note that there is a huge diversity of disputes (e.g., construction, insurance, joint venture, banking, shipping) and a huge diversity of parties (e.g., European, North American, Asian, African; major companies, small businesses, individuals) that participate in international arbitrations. How does this bear on the suitability of a uniform international code of arbitral procedures?
4. Differences between arbitral procedures and litigation procedures. As a general matter, it is elementary that arbitral proceedings are different from judicial proceedings. That is illustrated by Card and Corporacion Transnacional. One of the reasons that some parties choose to arbitrate is their desire to obtain the comparative informality, flexibility and occasional speed of arbitration. In theory, a party “trades the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration.” Mitsubishi, 473 U.S. at 628. See infra pp. 815–30. Consider also:
“Arbitration may or may not be a desirable substitute for trials in courts; as to that the parties must decide in each instance. But when they have adopted it, they must be content with its informalities; they may not hedge it about with those procedural limitations which it is precisely its purpose to avoid. They must content themselves with looser approximations to the enforcement of their rights than those that the law accords them, when they resort to its machinery.” Am. Almond Prods. Co. v. Consolidated Pecan Sales, Co., 144 F.2d 448, 450 (2d Cir. 1944).
Particularly in major matters, the contrast between litigation and arbitration can be exaggerated and the procedures of an arbitration can assume a fairly “judicial” cast. “Though litigation is compulsory and arbitration is consensual, both are judicial processes of an adversarial character.” Nariman, Standards of Behaviour of Arbitrators, 4 Arb. Int’l 311, 311 (1988). Tribunals and parties often conclude that complex cases require considerable issue definition, scheduling, and the like, and it is very common in international arbitration to encounter written pleadings, briefs, testimony under oath, cross-examination, verbatim transcripts, and a measure of disclosure or discovery. Indeed, some contemporary critics of arbitration argue that it has lost the informality and expedition that once characterized it and urge reforms returning to less judicial procedures. Hobeck, Mahnken & Koebke, Time for Woolf Reforms in International Construction Arbitration, 2008 Int’l Arb. L. Rev. 84; Wetter, The Present Status of the International Court of Arbitration of the ICC: An Appraisal, 1 Am. Rev. Int’l Arb. 91, 101 (1990).
5. Parties’ autonomy to choose arbitral procedures under UNCITRAL Model Law. Articles 18 and 19 of the UNCITRAL Model Law, excerpted at pp. 90–91 of the Documentary Supplement, illustrate the prevailing approach in most developed legal systems to the parties’ autonomy to choose the procedures applicable in an international arbitration. Consider the extent to which the parties’ procedural autonomy will be honored under the Model Law. Compare the parties’ procedural autonomy under the SLPIL and the Belgian Judicial Code. Are there any differences between the parties’ autonomy under either of these provisions and the Model Law? What about §§33 and 34 of the English Arbitration Act?
The Canadian Supreme Court recently remarked, with regard to the parties’ autonomy to select the arbitral procedures under the Model Law:
“the parties to an arbitration agreement are free, subject to any mandatory provision by which they are bound, to choose any place, form and procedures they consider appropriate. They can choose cyberspace and establish their own rules.” Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, ¶52 (Canadian S.Ct.).
Why do contemporary legal systems allow parties this procedural freedom? What advantages are gained? What are the costs? Are parties permitted to design their own litigation procedures when litigating in national courts? Why not? Should arbitration be different? Is it appropriate that questions of procedural regularity and due process be resolved through private bargaining and agreement? Does this not compromise the quality of civil justice? Why should courts enforce agreements to use arbitrary or inefficient procedures?
Should there be limits on the parties’ autonomy over arbitral procedures? Would the optimal solution be for national legislatures or regulatory authorities to develop neutral, objective and predictable procedural rules that can be applied uniformly in every case? Why or why not?
6. Parties’ autonomy to choose arbitral procedures under FAA. As Card illustrates, the FAA has long been interpreted to grant parties to arbitrations seated in the United States broad freedom to choose the arbitral procedures applicable in their proceedings. The text of the FAA does not contain any express affirmative recognition of the parties’ freedom to select the arbitral procedure. Nonetheless, U.S. courts have afforded parties relatively broad freedom to designate procedural rules governing the arbitral process in both domestic and international arbitrations. This is reflected in numerous U.S. judicial decisions, like that in Card, rejecting challenges to arbitral awards based on procedural objections and declining to interfere on an interlocutory basis with the parties’ agreed procedural regime. See infra pp. 808–10, 831–32.
7. Parties’ autonomy to choose arbitral procedures under New York Convention. What effect does the New York Convention have on the parties’ autonomy to choose arbitral procedures? Consider Article V(1)(d) , excerpted at p. 2 of the Documentary Supplement. Does it require Contracting States to respect the parties’ procedural autonomy? Or merely provide a basis for non-recognition of awards if the parties’ procedural autonomy is not respected?
Consider Article II of the Convention. What effect does it have on the obligations of Contracting States to respect the parties’ procedural autonomy? As discussed above, Articles II(1) and (3) require Contracting States to recognize valid arbitration agreements and refer the parties to arbitration pursuant to such agreements. See supra pp. 189, 316–17. As discussed above, this obligation extends to all material terms of an agreement to arbitrate—including the parties’ agreement regarding arbitral seat, number of arbitrators, institutional rules and arbitral procedures. See supra pp. 637–38, 652, 666, 683–85. Does the Convention place any limits on Contracting States’ obligation to give effect to the parties’ procedural autonomy? Note the exceptions to the obligation to recognize foreign arbitral awards in Articles V(1)(b) and V(2)(b). What effect do these provisions have on the parties’ procedural autonomy?
8. Parties’ autonomy to choose arbitral procedures under European Convention. The European Convention provides in Article IV(1)(b)(iii) that parties shall be free “to lay down the procedure to be followed by the arbitrators.” Like Article V(1)(d) of the New York Convention, Article IX(1)(d) provides for the non-recognition of awards if the procedure followed by the tribunal departed from that agreed by the parties. Note also the exception for non-recognition in Article XI(1)(b).
9. Parties’ autonomy to choose arbitral procedures under ICSID Convention. Consider Article 44 of the ICSID Convention and the ICSID Arbitration Rules. What is the role of party autonomy in ICSID arbitrations? Are parties permitted to agree to omit or alter procedures provided for by the Convention? Consider the terms of Articles 41 through 47 of the Convention. What scope do they permit for the parties’ procedural autonomy?
10. Parties’ autonomy to choose arbitral procedures in inter-state arbitrations. Consider Article 51 of the 1907 Hague Convention, excerpted at p. 45 of the Documentary Supplement. What is the role of party autonomy in the selection of arbitral procedures in inter-state arbitrations? What is the nature of the procedural provisions in Articles 51 and following of the Hague Convention—do these prescribe mandatory procedural rules or default provisions? Should there be limits to the parties’ procedural autonomy in inter-state arbitrations? What would be the source of such limits? Note also the “fast-track” arbitral process in Articles 86 to 90 of the 1907 Hague Convention.
11. Parties’ lack of autonomy to choose arbitral procedures in some national arbitration regimes. Consider the former Guatemalan Code of Civil and Commercial Procedure, excerpted above, and the approach that it took to arbitral procedures. Was this desirable? Did it not provide predictability? And avoid the risk of arbitrary or unfair arbitral procedures?
Suppose the parties agree to arbitrate in a jurisdiction that imposes a mandatory procedural code on the parties without regard to their agreement on the arbitral procedures, as was the case in Guatemala. Was Guatemala’s application of its procedural code consistent with Articles II and V(1)(d) of the New York Convention? Suppose the arbitrators had complied with the Guatemalan procedural code, and made an award adverse to the respondent; if the claimant attempted to enforce the award abroad, what could the respondent do? Suppose the arbitrators did not comply with the Guatemalan procedural code, and made an award adverse to the respondent; suppose further that the Guatemalan courts annulled the award (on the grounds that the arbitral procedures were not in accordance with Guatemalan law). What could the claimant do?
12. Application of court procedures in arbitration as default option. Some national laws still provide for the application of the rules of national procedural laws in arbitration, if the parties have not agreed on different rules. Consider Article 751 of the Argentine Code of Civil and Commercial Procedure (“If neither in the arbitral agreement nor in the compromiso nor in a later agreement of the parties procedural rules have been established, the arbitrators shall abide by the rules of ordinary … proceedings”) and Article 490 of the Uruguayan General Code of Procedure (“The parties may agree upon procedures that they consider most appropriate. Absent such agreement by the parties or if a particular matter is not covered by the indicated procedures, the arbitrators shall apply the provisions of this Code for ordinary proceedings.”). Are these provisions wise? Do these provisions apply in institutional arbitrations? Consider Article 3 of the Inter-American Convention. See supra pp. 39–40 & infra p. 797.
13. Parties’ autonomy to choose arbitral procedures under institutional rules. Consider the procedural provisions of leading institutional rules. See 2010 UNCITRAL Rules, Arts. 17-32; 2012 ICC Rules, Arts. 16-29; 2014 LCIA Rules, Arts. 14-25; ICSID Rules, Arts. 36-52 (all excerpted in the Documentary Supplement). What approach do these provisions take to the parties’ autonomy to choose arbitral procedures? Do these rules all adopt precisely the same approach? Which rules would you prefer to apply as an arbitrator? Which rules provide most flexibility? Least flexibility?
14. Impact of selection of arbitral seat on procedural rules in international arbitration. As discussed above, the parties’ selection of the arbitral seat will, among other things, affect the parties’ autonomy to choose their own arbitral procedures. See supra pp. 620–24. Compare the differences between Swiss and U.S. law, on the one hand, and the excerpted Guatemalan statute (now repealed), on the other, with respect to the parties’ freedom to agree upon arbitral procedures. Would you rather arbitrate in Switzerland or Guatemala? Does the answer depend on the dispute and who you represent?
15. Procedural frameworks under institutional arbitration rules. Compare briefly the procedural frameworks provided for in leading institutional rules—UNCITRAL, ICC, LCIA, AAA, ICDR and ICSID. Note the similarities and differences in arbitral procedures under them. Note also the many procedural issues and details that are not addressed by most institutional rules.
16. Procedural frameworks under international arbitration agreements. Although they are free to do so, parties seldom include detailed procedural provisions in their international commercial arbitration agreements. At most, agreements to arbitrate future disputes will address matters such as a “fast-track” proceeding, infra p. 796, the scope of disclosure, infra pp. 823–25, 835–36, the language of the arbitration, infra p. 816, and the allocation of the costs of the arbitration. See Bond, How to Draft An Arbitration Clause Revisited, 1 ICC ICArb. Bull. 14 (1990); G. Born, International Commercial Arbitration 2128-29, 2283-85, 2296, 3086-88 (2d ed. 2014); Townsend, Drafting Arbitration Clauses, 58 Disp. Resol. J. 1 (2003). Why is that? Is it wise?
Consider the terms of the Treaty of Washington and the Abyei Arbitration Agreement, excerpted at pp. 65–66 & 80-83 of the Documentary Supplement. Note that Articles II, III, and IV prescribe a relatively detailed procedural schedule for the Alabama Arbitration. Compare Articles 4-8 of the Abyei Arbitration Agreement. Why is it that the parties chose, and were able, to agree to relatively detailed procedural regimes in the two arbitrations? Note that both agreements involved existing disputes. Compare the situation of parties that agree to arbitrate future disputes.
17. Arbitrators’ authority under national law to prescribe arbitral procedures in absence of parties’ agreement. Suppose the parties are unable to agree upon procedures for their arbitration. Who then is responsible under national law for establishing the arbitral procedures?
Consider the excerpts from the UNCITRAL Model Law (particularly Articles 19(2) and 24(1)) and the SLPIL (Article 182(2)), giving the arbitral tribunal broad powers to adopt arbitral procedures. Consider the court’s analysis, under the Model Law, in Corporacion Transnacional. Consider also: “Parties who choose arbitral tribunals desire more flexible and informal proceedings than those offered by the courts, especially in Germanic legal systems.” Judgment of 26 May 1994, XXIII Y.B. Comm. Arb. 754 (1998) (Bezirksgericht Affoltern am Albis). See also Judgment of 25 June 1992, XXII Y.B. Comm. Arb. 619 (1997) (Austrian Oberster Gerichtshof) (“parties may determine the arbitral procedure in the arbitration agreement or in a separate written agreement. Lacking such agreement, the arbitrators decide on the procedure.”).
Compare the approach to the arbitral tribunal’s procedural authority in the (now repealed) Guatemalan Code of Civil and Commercial Procedure. How did the Guatemalan statute differ from its UNCITRAL and Swiss counterparts? Which basic approach is preferable?
Compare the approach under the Belgian Judicial Code. Is it preferable to that under the Model Law? In what ways does the Code constrain the arbitrators’ procedural authority? Are these desirable constraints?
18. Arbitrators’ authority under FAA to prescribe arbitral procedures in absence of parties ‘agreement. As Card demonstrates, the FAA allows arbitrators broad discretion to adopt procedures and regulate the arbitral proceedings. See infra pp. 793–94, 808–10, 831–35, 1233–34; Transp. Workers Union v. Philadelphia Trans. Co., 283 F.Supp. 597, 600 (E.D. Pa. 1968) (“Although arbitration hearings are of quasi-judicial nature, the prime virtue of arbitration is its informality, and it would be inappropriate for courts to mandate rigid compliance with procedural rules.”). Is it appropriate to grant arbitrators such broad procedural discretion? Recall the adage, “Power tends to corrupt, and absolute power corrupts absolutely.” Does that apply to arbitrators’ procedural power?
19. Arbitrators’ authority under institutional arbitration rules to adopt arbitral procedure. Consider Article 19 of the ICC Rules, Articles 14(2) and (5) of the LCIA Rules, and Article 17(1) of the UNCITRAL Rules. What procedural powers do these provisions grant to arbitrators? Is this wise? What alternatives are there?
What limitations do these provisions place on the arbitral tribunal’s power to adopt arbitral procedures? How do these limitations vary among the leading institutional rules?
20. Arbitral tribunal’s interpretation of procedural authority under institutional arbitration rules. The award in ICC Case No. 7626 illustrates how international arbitral tribunals typically interpret their procedural authority under institutional rules. Compare the court’s analysis in Card of the arbitral tribunal’s powers on procedural issues under the NASD Code of Arbitration Procedure. See also infra pp. 808–10, 1231–41.
21. Effect on arbitral procedures of choice-of-law clause selecting procedural law applicable to arbitral proceedings. Suppose the parties expressly agree that the procedural law of the arbitral seat will apply to the arbitral proceedings. For example: “The arbitral proceedings shall be governed by the law of State X.” Alternatively, suppose the parties agree to arbitration rules containing a provision to the same effect (e.g., the LCIA Rules). What does such a clause mean for the arbitral procedures?
As discussed above, most authorities interpret choice-of-law clauses selecting the procedural law of the arbitration as not incorporating local rules of civil procedure. See supra p. 639. Instead, such clauses are interpreted as making applicable the arbitration legislation of the arbitral seat (which, in turn, in most developed states, typically affords the parties and arbitral tribunal broad discretion to adopt procedural rules). See supra pp. 619–20, 634, 786, 788–90. Is this persuasive? If the parties take the relatively rare step of specifying the procedural law of the arbitral seat, shouldn’t this imply the procedural rules of the arbitral seat’s courts?
Consider again the analysis in Sapphire and compare it with the results in ICC Case Nos. 7626 and 5029. The tribunal’s application of the local procedural rules of the arbitral seat’s courts in Sapphire is unusual by contemporary standards; the tribunals’ refusals in ICC Case Nos. 7626 and 5029 are much more representative of contemporary practice.
22. Wisdom of applying domestic procedural rules of arbitral seat’s courts in international arbitration. What approach should an arbitrator take to the local procedural rules of the arbitral seat’s courts? Just because the arbitrator must not apply these rules does not mean he should not. Consider ICC Case No. 7626 and Card. Why is it that English rules of evidence should not have been applied by the tribunal in ICC Case No. 7626? Wouldn’t these rules provide a predictable, neutral set of procedures for both parties?
In international disputes between parties from different nations, the litigants may have dramatically different procedural expectations and wishes (reflecting their respective backgrounds). Consider whether either the Austrian or Indian party in ICC Case No. 7626 was likely familiar with English procedural or evidentiary rules.
Recall the aspirations of arbitration to provide an expeditious, uncomplicated means of dispute resolution tailored to the needs of particular disputes. See supra pp. 108–09. Note that the Federal Rules of Evidence (at issue in Card) were designed with a particular context (e.g., public jury trials) in mind; the same is true of other national procedural rules. As suggested above, are rules designed for this sort of specialized context likely to be appropriate for an international arbitration, which is intended to be culturally neutral?
23. Mandatory procedural requirements of arbitral seat. Notwithstanding the parties’ procedural autonomy, and the arbitral tribunal’s general procedural discretion, almost every nation has basic procedural norms that cannot be ignored. These procedural norms will apply to arbitrations seated within that state, and will be given effect principally in actions to annul the arbitral award or remove an arbitrator.
(a) Mandatory procedural requirements of UNCITRAL Model Law. Note the references to mandatory law in Article 18 of the UNCITRAL Model Law. What procedural requirements does Article 18 impose? On what category of arbitrations? Compare Article 182(3) of the SLPIL.
(b) Mandatory procedural requirements under FAA. What mandatory procedural requirements apply to arbitrations conducted in the United States? Should the same procedural rules apply in an international arbitration, seated in the United States, as in a domestic U.S. litigation? A domestic U.S. arbitration? An international arbitration seated abroad? Why or why not?
U.S. courts have not clearly articulated what minimum procedural requirements apply to arbitrations seated in the United States. A number of U.S. authorities suggest that arbitral procedures must comport with the Due Process Clause (which requires only fairly broad compliance with principles of fairness, due notice, and equality of treatment). See infra pp. 1159–61, 1231–34. Other U.S. courts have suggested that even the Due Process Clause’s general limits do not apply in arbitrations, on the grounds that arbitrations do not constitute state action. See FDIC v. Air Fla. Sys., Inc., 822 F.2d 833, 842 n.9 (9th Cir. 1987) (arbitration is “private, not state, action” and not subject to the due process clause); Elmore v. Chicago & Ill.Midland Ry. Co., 782 F.2d 94, 96 (7th Cir. 1986) (same).
(c) Enforcement of arbitral seat’s mandatory procedural requirements. How will the mandatory procedural norms of the arbitral seat be enforced? See UNCITRAL Model Law, Art. 34(2)(a)(ii); SLPIL, Art. 190(2)(d); U.S. FAA, 9 U.S.C. §10. Note, however, that Card and Corporacion Transnacional illustrate the strict standards that need to be satisfied to justify annulment of an award. See infra pp. 1159–61, 1169–70.
24. Mandatory procedural requirements of judicial recognition forum. Consider Articles V(1)(b) and V(2)(b) of the New York Convention. Note that a denial of an opportunity to be heard, or a procedural unfairness amounting to a violation of the enforcement forum’s public policy, will provide grounds for non-recognition of an award. See infra pp. 1218–41, 1260. To what extent can an arbitral tribunal anticipate procedural objections to recognition when conducting an arbitration?
25. Content of mandatory procedural requirements under national arbitration legislation. Consider the mandatory procedural requirements imposed by Article 18 of the UNCITRAL Model Law, Article 1699 of the Belgian Judicial Code, Article 182(3) of the SLPIL and the FAA. What procedural obligations do these provisions impose? What is the value of imposing these requirements? What exactly do these requirements demand? Consider ways in which these procedural requirements might be violated.
What does Article 18 of the Model Law mean when it requires that the parties “shall be treated with equality and each party shall be given a full opportunity of presenting his case”? Is this provision a mandatory requirement, or may it be overridden or varied by contrary agreement by the parties? Consider Articles 19(1), 34(2)(a)(ii) and 36(1)(a)(ii) of the Model Law. Similarly, Article 182(3) of the SLPIL provides: “Regardless of the procedure chosen, the arbitral tribunal shall ensure equal treatment of the parties and the right of both parties to be heard in adversarial proceedings.”
What do these various procedural protections mean in practice? Note the courts’ interpretation in Card and Corporacion Transnacional. Consider: “Short of authorizing trial by battle or ordeal or, more doubtfully, by a panel of three monkeys, parties can stipulate to whatever procedures they want to govern the arbitration of their disputes; parties are as free to specify idiosyncratic terms of arbitration as they are to specify any other terms in their contract.” Baravati v. Josephthal, Lyon & Ross, Inc., 28 F.3d 704, 709 (7th Cir. 1994). Compare the following comments of the Swiss Federal Tribunal:
“It should be underlined that procedural public policy will constitute only a simple exclusion provision namely that it will merely have a protective function and will not generate any positive rules. This is because the legislature did not desire that procedural public policy should be extensively interpreted and that there should arise a code of arbitral procedure to which the procedure, as freely selected by the parties, should be subjected.” Judgment of 30 December 1994, 13 ASA Bull. 217, 221 (Swiss Fed. Trib.) (1995).
Consider how these procedural guarantees apply to the following hypotheticals:
(a) In a case involving a $50 million fraud claim, the arbitrators refuse to permit either party to call witnesses from the other party (leaving each party free to nominate those of its employees that will give evidence); the arbitrators also refuse to permit either party to cross-examine the other party’s witnesses; the presiding arbitrator briefly questions both parties’ witnesses, but refuses to consider questions suggested by either party.
(b) In a case where the claimant has ten witnesses and the respondents three witnesses, the arbitrators give the claimant 75% of the hearing time and the respondent 25%.
(c) In a case involving complex contractual claims and factual issues, as well as choice-of-law disputes, the tribunal imposes a 15-page limit on all written submissions, permitting one pre-hearing submission and one post-hearing submission (both simultaneous).
(d) In a case involving $2.5 million in dispute, the tribunal refuses to conduct an oral hearing.
(e) The parties’ arbitration agreement provides that one party may be represented by lawyers, but the other side may not.
(f) The parties’ arbitration agreement provides that one party’s witnesses may be cross-examined but the other party’s witnesses may not. Alternatively, the parties’ arbitration agreement permits one party to obtain discovery, but not the other party.
26. Arbitrator’s failure to comply with applicable institutional (or other) arbitration rules. Suppose an arbitral tribunal fails to comply with the (fairly minimal) procedural requirements set out in the applicable institutional arbitration rules. Note that this is, apparently, what occurred under the NASD Code of Arbitration Procedure in Card. Should the resulting arbitral award be annulled? In all cases? This is discussed in detail below, see infra pp. 832, 838, 1160–61.
As discussed above, Article V(1)(d) of the New York Convention allows for non-recognition of an arbitral award where the “arbitral procedure was not in accordance with the agreement of the parties.” National law is generally the same. See UNCITRAL Model Law, Arts. 19, 36(1)(a)(iv); FAA §10(c); SLPIL, Arts. 182(2), 189, 190(2)(d). What does it mean for a procedure to not be “in accordance with the agreement of the parties”? Does that mean any non-compliance? We discuss this below as well, see infra pp. 1238–40.
27. Allocation of power to adopt arbitral procedures between arbitrators and parties. Suppose the parties are agreed on one procedural approach or issue, and the arbitral tribunal disagrees. For example, suppose both parties desire a two-week hearing and broad document discovery, while the tribunal wants only a three-day hearing and minimal document discovery. Who decides what procedure is adopted?
In practice, some sort of negotiated compromise is almost always reached on most procedural “disputes” between the parties and the arbitrators. But who has the authority to decide the issue if no compromise is struck? Compare the ICC, LCIA and UNCITRAL Rules. What are the differences in their approaches? Which approach is most desirable? Compare the UNCITRAL Model Law and the SLPIL with Article 1700 of the Belgian Judicial Code.
Consider the following comments by an experienced international arbitrator:
“I would advocate the existence of … a right for the arbitrator to lead—even lead firmly, when necessary—in establishing the arbitral procedures over the heads of counsel on both sides. The arbitrator does not have a judge’s power to regulate procedures unilaterally, nor should he or she forget that party autonomy may be the most important arbitral principle of all. The scope for persuasion by the arbitrator before making a ruling is large, and the need to impose procedures should thus be rare. But it is possible—at least for one with a common law background—to imagine situations in which counsel for both sides may slide toward extended and acrimonious evidentiary procedures that could be shortened or avoided by an arbitrator who was prepared to ’just say no.’” Carter, The Rights and Duties of the Arbitrator: Six Aspects of the Rule of Reasonableness, in ICC, The Status of the Arbitrator 24, 31 (ICC ICArb. Bull. Spec. Supp. 1995).
Is this appropriate? Or is it a usurpation of the parties’ procedural autonomy? See also Pryles, Limits to Party Autonomy in Arbitral Procedure, 24 J. Int’l Arb. 327 (2007); Veeder, Whose Arbitration Is It Anyway: The Parties or the Arbitration Tribunal—An Interesting Question?, in L. Newman & R. Hill (eds.), The Leading Arbitrators’ Guide to International Arbitration 347 (2d ed. 2008).
28. Mandatory time limits for award under national arbitration legislation. An exception to the arbitrators’ procedural discretion is the existence, in some arbitration statutes, of time limits for rendering a final award (which must be complied with in order to avoid annulment of the award). See, e.g., Belgian Judicial Code, Art. 1713(2) (six months from constitution of tribunal, unless otherwise agreed by the parties); Luxembourg Code of Civil Procedure, Arts. 1228, 1233 (three months from date of submission to arbitration, unless otherwise agreed); Spanish Arbitration Act, 2011, Art. 37(2) (“Unless otherwise agreed by the parties, the arbitrators must decide the dispute within six months from the date of filing of the [statement of defense]…. Unless otherwise agreed by the parties, the arbitrators may extend this term by a period not exceeding two months, by way of a reasoned decision.… [T]he expiration of this period without delivery of a final award shall not affect the arbitration agreement or the validity of the award, without prejudice to any liability that may be incurred by the arbitrators.”); Romanian Code of Civil Procedure, Art. 567 (“If the parties have not provided otherwise, the arbitral tribunal must render the award not later than 6 months from its constitution, under the sanction of lapse of the arbitration.… [T]he parties may agree in writing to extend the time limit for the arbitration. The arbitral tribunal can decide, for a justifiable reason, to extend the time limit for the arbitration once, for no more than 3 months. The time limit for the arbitration shall be automatically extended by 3 months upon the death of one of the parties.”). Compare also the (atypical) Guatemalan arbitration legislation (now repealed), supra pp. 779–80.
As a practical matter, tribunals will virtually always comply with such legislative requirements. Suppose, however, that a tribunal in an international arbitration does not do so—instead exercising its procedural authority under the parties’ arbitration agreement to conclude that more time is necessary to afford the parties an opportunity to present their cases. Is the mandatory time limit under national law consistent with the New York Convention (Articles V(1)(d) and II)? What if the parties’ arbitration agreement or applicable institutional rules grant the tribunal authority to extend time limits for the arbitration?
29. Arbitrator’s authority under ICSID Convention to prescribe arbitral procedures in absence of parties’ agreement. In an investment arbitration under ICSID, what is the scope of the arbitrators’ procedural authority where the parties have not agreed upon a procedural matter? Consider the second sentence of Article 44 of the ICSID Convention. Are there any mandatory limits on the arbitrators’ authority over procedural matters in an ICSID arbitration? Consider Article 52(1)(b) and (d) of the ICSID Convention. What is the source of the “fundamental rule[s] of procedure” referred to in Article 52?
30. Arbitrator’s authority in inter-state arbitrations to prescribe arbitral procedures in absence of parties’ agreement. Consider the arbitral tribunal’s authority under the 1907 Hague Convention. What limits are there on the tribunal’s procedural authority under Article 74 of the Convention? Consider the other procedural provisions of the Convention. To what extent was it envisaged that the arbitral tribunal could deviate from these provisions?
31. Non-participation in arbitral proceedings. Parties will sometimes fail to participate in an arbitration, either accidentally or deliberately. See Donahey, Defending the Arbitration Against Sabotage, 13 J. Int’l Arb. 93 (1996). Consider how various institutional rules deal with the possibility of default by one party to an arbitration. See 2012 ICC Rules, Art. 6(8); 2014 LCIA Rules, Art. 15(8); 2010 UNCITRAL Rules, Art. 30. What powers do these provisions grant to the arbitrators in cases of default? How should such powers be exercised? As Corporacion Transnacional illustrates, if a party defaults, the tribunal will ordinarily proceed on an ex parte basis, ensuring that the defaulting party receives notice of the ongoing proceedings. Is an arbitral tribunal a court, empowered to issue a default judgment predicated solely on one party’s non-participation? Or, is it responsible for deciding the issues presented to it and rendering a decision, regardless whether both parties participate? If the tribunal makes an award, what is the relevance of the defaulting party’s non-participation in both annulment and recognition proceedings? What does Corporacion Transnacional suggest? See infra pp. 1240–41.
32. Procedural rules under Inter-American Convention. Note Article 3 of the Inter-American Convention. Under Article 3, absent express contrary agreement by the parties, the Inter-American Commercial Arbitration Commission’s Rules will apply to any arbitration governed by the Convention. (The IACAC Rules closely parallel the UNCITRAL Rules. See supra pp. 39–40.) Is this a wise default solution? Why shouldn’t the New York Convention do the same?
B. LIMITED GROUNDS FOR INTERLOCUTORY JUDICIAL REVIEW OF ARBITRATORS’ PROCEDURAL DECISIONS
During the course of an arbitration, countless significant procedural and substantive decisions are made by the arbitrators (or appointing authority). Depending on the case, an arbitral seat may be selected; arbitrators may be appointed, challenged, or removed; the language of the arbitration will be chosen; procedural rules will be fixed (or amended); provisional measures may be granted; disclosure may be requested and ordered; jurisdictional and choice-of-law decisions may be made; and preliminary substantive decisions may be reached.
One party or the other is usually unhappy with each preliminary decision. If there is an opportunity, the disappointed party may seek interlocutory judicial review of the arbitrators’ ruling. The extent to which interlocutory judicial review of an interim decision of an arbitral tribunal is available is ordinarily governed by the national law in the place where relief is sought. As discussed elsewhere, judicial review of arbitrators’ awards or orders will almost always be available only in the arbitral seat.10
This section examines the general principle that national courts may not interfere with the procedural conduct of an international commercial arbitration proceeding. Under this principle of judicial non-intervention, national courts will generally not review procedural orders or decisions of arbitrators on an interlocutory basis, and will instead reserve any judicial review until the final award. The policy underlying this approach is to permit arbitral proceedings to be conducted expeditiously (without the delay that interlocutory judicial review entails) and without the second-guessing of arbitral decisions by national courts. The same principle of judicial non-interference applies even more emphatically in investment and interstate arbitrations.
STANTON v. PAINE WEBBER JACKSON & CURTIS INC.
685 F.Supp. 1241 (S.D. Fla. 1988)
GONZALEZ, District Judge…. Plaintiffs seek an order enjoining the defendants, Paine Webber Jackson & Curtis, Inc. (“Paine Webber) and Robert Diamond (“Diamond”) from requesting the issuance of and serving subpoenas for the attendance of witnesses or production of documents, other than for attendance or production before the arbitration panel.
Plaintiffs brought the underlying action against Paine Webber and Diamond for violations of the Commodity Exchange Act, Florida securities laws, and common law. Defendants moved for, and this court ordered arbitration of plaintiff’s claims pursuant to the FAA.… A hearing before the [AAA] panel is scheduled to begin shortly. Defendants Paine Webber and Diamond have requested that the arbitration panel issue subpoenas duces te-cum to various third parties. The documents sought are records of commodities accounts maintained by plaintiffs with firms other than Paine Webber and plaintiffs’ tax returns. Defendants claim that production of these documents is necessary because they tend to disprove plaintiffs’ claims of unsophistication and financial unsuitability.
It appears from plaintiffs’ Motion that the arbitrators have issued several of the subpoenas requested. The subpoenas require pre-hearing production of documents to the defendants. Plaintiffs contend that the issuance of these subpoenas to third parties violates the law and the production of documents constitutes impermissible pre-hearing discovery.
Plaintiffs are correct that all discovery between parties must be stayed by the court pending arbitration. See Suarez-Valdez v. Shearson/American Express, Inc., 845 F.2d 950, 951 (11th Cir. 1988). “An agreement to arbitrate is an agreement to proceed under arbitration and not under court rules.” Id. However, the court can find no support for plaintiffs’ contention that the court may interfere with the procedures of the arbitration panel. The [FAA] sets forth the district courts’ powers to enforce arbitration agreements. These include the power to (1) stay court proceedings when an issue therein is arbitrable (9 U.S.C. §3); (2) compel such issues to arbitration (9 U.S.C. §4); (3) enforce summons issued by arbitrators (9 U.S.C. §7); and (4) confirm, vacate, modify, or correct an arbitration award (9 U.S.C. §§9-13). Nothing in the Act contemplates interference by the court in an ongoing arbitration proceeding. See Foremost Yarn Mills, Inc. v. Rose Mills, Inc., 25 F.R.D. 9, 11 (E.D. Pa. 1960) (“it is clearly evident that the [FAA] does not in any wise attempt to regulate the procedures before the arbitrators or prescribe rules or regulations with respect to hearings before arbitrators”).
The FAA does provide the parties with some protection from the arbitrators’ acts. When the arbitrators have by their misbehavior prejudiced the rights of any party or have exceeded their powers, the court may vacate an award made by the arbitrators. 9 U.S.C. §10. The procedures and standards for vacating an award must be followed. However, the plaintiffs are not seeking to vacate an award by the arbitrators. They are asking the court to impose judicial control over the arbitration proceedings. Such action by the court would vitiate the purposes of the FAA: “to facilitate and expedite the resolution of disputes, ease court congestion, and provide disputants with a less costly alternative to litigation.” Recognition Equip., Inc. v. NCR Corp., 532 F.Supp. 271, 275 (N.D. Tex. 1981).
Furthermore, the court finds that under the FAA, the arbitrators may order and conduct such discovery as they find necessary. See Corcoran v. Shearson/American Express, Inc., 596 F.Supp. 1113, 1117 (N.D. Ga. 1984); Mississippi Power Co. v. Peabody Coal Co., 69 F.R.D. 558 (S.D. Miss. 1976) (arbitrator, in his discretion, may permit and supervise discovery he deems necessary); see also 9 U.S.C. §7 (arbitrators may issue summons to bring witnesses and documents before them). Plaintiffs’ contention that §7 of the [FAA] only permits the arbitrators to compel witnesses at the hearing, and prohibits pre-hearing appearances, is unfounded.…
MOBIL OIL INDONESIA INC. v. ASAMERA (INDONESIA) LTD
392 N.Y.S.2d 614 (N.Y. App. 1977), rev’d on other grounds, 401 N.Y.S.2d 186 (1977)
In this action involving contract rights to explore and produce vast petroleum reserves, the parties seek a determination of which procedural rules shall govern arbitration of their disputes. The contract, dated July 16, 1968, contained a broad arbitration clause providing that “[a]ny dispute arising out of or relating to this Agreement shall be settled by arbitration in accordance with the Rules of the [ICC]” and designated New York City as the place of arbitration. At the time the agreement was executed, and indeed at the time of institution on November 6, 1974 of the arbitration, the 1955 Rules were in force. On June 1, 1975, after arbitration had commenced, new Rules were put into effect (1975 Rules). Following several meetings to prepare the “Terms of Reference” which would govern the arbitral proceeding, at which counsel, the parties, and the three arbitrators were present, a majority of the arbitrators ruled that all proceedings thereafter would be conducted under the 1975 Rules.
On October 31, 1975 petitioner-respondent applied to the ICC Court of Arbitration for a direction that the arbitrators apply the 1955 Rules. The Court refused to interfere, held that it was for the arbitrators to decide the procedural issue presented, and directed the arbitrators to formalize their decision. On March 30, 1976 the arbitrators, again by a majority vote, ruled in an interlocutory award that the 1975 Rules were applicable. They concluded the parties intended to refer to the Rules as they were from time to time and that the general principle, as well as New York law, is to apply procedural rules as they exist at the time the procedural issues arise. The dissenting arbitrator, the esteemed former Judge John Van Voorhis, likewise seeking the intent of the parties, found the parties intended the 1955 Rules to apply. It is submitted, as the Court below found, that prehearing discovery is permitted under the 1975 Rules but not under the 1955 Rules.…
That the parties agreed to arbitrate is undisputed as is the fact that the issues raised on arbitration bear a reasonable relationship to the contract. Furthermore, that the arbitrators’ result is rational, although it may not have been the result others would have reached is beyond peradventure. The parties agreed to be bound by the [ICC Rules] and it was for the arbitrators to determine which [ICC Rules] intended. Despite petitioner’s position to the contrary, no evidence is presented that greater restriction exists on the authority of an ICC arbitrator than on the authority of any other commercial arbitrator under the Rules of the [AAA]. Nor is any limitation of the arbitrators’ broad powers found in the agreement itself.
Under the broad arbitration clause in the case at bar, questions of interpretation are for the arbitrators to decide and this is so even if the contract determination affects the very ground rules of the arbitration. If, for example, the agreement provided for arbitration pursuant to New York law, a determination by the arbitrators would not be overturned because the arbitrators applied the substantive law as of the time of arbitration rather than as of the time of agreement, or vice versa. Such determination as to substantive law goes no more nor less to the parties’ agreement to arbitrate than a provision as to which procedural rules to apply. It follows logically and naturally that the determination of the parties’ intention as to procedural rules is gauged by the same standard applied to substantive rules: Did the parties agree to arbitrate and did the arbitrators make a rational determination of which procedural rules to apply? As the answer to both portions of the question is in the affirmative, it was improper for the Court below to impose its judgment in the place and stead of the arbitrators.
ELEKTRIM SA v. VIVENDI UNIVERSAL SA
 EWHC 571 (QB) (English High Ct.)
MR. JUSTICE AIKENS. In this action Elektrim [SA (“Elektrim”)] claims an order for a final injunction … to restrain each of the defendants from pursuing an arbitration … that is currently being conducted before the [LCIA] (“LCIA Arbitration”). Elektrim claims that the injunction should continue until the final determination of an ICC Arbitration which is under way in Geneva. The LCIA Arbitration was started in August 2003 by two of the defendants in the current action, the two Vivendi companies (“Vivendi”) as Claimants. It is against Elektrim and two other companies. The ICC Arbitration was also started by Vivendi and two other companies by a Request dated 13 April 2006. In that arbitration, El-ektrim and eight other companies are the defendants. The injunction is sought on the ground that the relief claimed by the defendants in this action (or at least the two Vivendi companies) in the LCIA Arbitration is inconsistent with the position adopted and the relief sought in the ICC Arbitration. Elektrim claims that the simultaneous pursuit of both arbitrations by the Vivendi companies is vexatious and oppressive to Elektrim….
Elektrim and Vivendi are two protagonists in a complicated and very hard fought corporate campaign in several theatres of war for the control of Polska Telefonia Cyfrowa Sp. z.o.o. (“PTC”). [PTC is a joint venture, established by Elektrim, Deutsche Telekom (“DT”) and others in 1995, that runs the largest mobile telecoms network in Poland. In 1999, El-ektrim purported, in violation of the PTC joint venture agreements, to transfer its PTC shares to a new company, Elektrim Telecommunikacja Sp. z.o.o. (“Telco”—the third defendant in the present action). Telco was a new joint venture company established by El-ektrim and Vivendi.
The purported transfer of Elektrim’s PTC shares to Telco gave rise to complex disputes among DT, Elektrim and Telco, including various arbitrations and litigations in Polish and other courts. Among other things, Vivendi commenced the LCIA Arbitration against Elektrim pursuant to a “Third Investment Agreement” between Vivendi and Elektrim (“TIA”); the LCIA Arbitration was seated in London and English substantive law was applicable. In the LCIA Arbitration, Vivendi sought monetary damages and other relief against Elektrim based upon alleged breaches of the terms of the TIA. Subsequently, after abortive settlement discussions between Vivendi, Elektrim and DT, Vivendi commenced an ICC arbitration against Elektrim, DT and others, alleging that the parties had concluded a binding settlement agreement (“Settlement Agreement”) that settled all of their disputes concerning PTC, including the disputes between Vivendi and Elektrim under the TIA. The ICC Arbitration was seated in Geneva, Switzerland and the applicable substantive law was Swiss law. Following Vivendi’s commencement of the ICC Arbitration, Elektrim sought to stay the LCIA Arbitration, based upon the pending ICC arbitration.]
On 21 April 2006, the Polish lawyers acting for Elektrim (Soltysinski Kawecki and Szlezak—“SKS”) wrote to the LCIA arbitrators and informed them of Vivendi’s request to the ICC and the nature of the relief sought by Vivendi in the proposed ICC arbitration. The letter continued: “…the ICC arbitration directly impacts the present proceedings. In … the event that Vivendi and the other ICC claimants are correct … the present arbitration should be settled and terminated on the terms set forth in the pertinent agreements. Therefore Elektrim respectfully requests the Arbitral Tribunal to stay the present arbitration proceedings … until the ICC arbitration is finally resolved….” On 28 April 2006, Salans, the lawyers acting for Vivendi, wrote to the LCIA arbitrators opposing the application for a stay…. The letter urges the LCIA Arbitrators to proceed….
On 9 May 2006 the LCIA Arbitrators issued their ruling on Elektrim’s application. The tribunal … stated: “Given that there is no agreement between the parties on the stay of the proceedings, the arbitral tribunal shall issue its Partial Award and set a date for a conference call with parties to discuss the next steps of the proceedings.” …
[Elektrim’s lawyers subsequently wrote again to the LCIA Arbitrators,] summarized Vivendi’s case in the ICC Arbitration and asserted that Vivendi’s pursuit of the LCIA Arbitration “… is wholly inconsistent with its case and the relief that it is seeking in the ICC Arbitration.” The letter continues:
“1. The very basis for the LCIA arbitration, namely a dispute in relation to the TIA, depends upon the outcome of the ICC arbitration. If, as Vivendi allege, there was a settlement agreement concluded on or about 26 March 2006, all disputes, concerning the TIA have been settled and the LCIA arbitration must cease.
2. Vivendi’s continued pursuit of its claims in the LCIA arbitration simultaneously with the pursuit of its claim in the ICC arbitration (a) expose Elektrim to the risk of wholly inconsistent awards and, indeed, double jeopardy and (b) forces Elektrim to devote huge amounts of management time and resources to fighting what could turn out (on Vivendi’s own case) to be an entirely baseless and futile proceeding.
3. It follows, as a matter of logic, fairness and common-sense, that the ICC arbitration must reach a conclusion on the existence of the alleged settlement agreement before any further steps in the LCIA arbitration is taken by any party. It is and cannot be right that Elektrim is required, pending the ICC Tribunal’s determination to continue to fight an arbitration which Vivendi claims has been and must be terminated. It is abusive and unconscionable. For the above reasons, Elektrim calls upon Vivendi either (a) finally to withdraw its claims in the ICC arbitration (and finally to terminate that arbitration) or (b) to stay the LCIA arbitration pending the outcome of the ICC arbitration….”
The letter also stated that if the Tribunal was not prepared to make [such an] order, then Elektrim would: “… be forced to make an application for an injunction … enjoining Vivendi and the Tribunal from proceeding with the LCIA arbitration pending the outcome of the ICC Arbitration.”…
[T]he LCIA Tribunal rejected this application for a stay in a letter sent to the parties on 17 January 2007. This decision was confirmed in the Tribunal’s Procedural Order Number 8, dated 22 January 2007.… The Tribunal noted that similar requests for a stay had been made by Elektrim in April and May 2006, which the Tribunal had refused. [After the LCIA arbitrators refused to stay the LCIA arbitration, Elektrim sought an injunction from the English courts against the LCIA arbitration. The court’s opinion denying the request is excerpted below.]
I think that it is helpful to begin by asking: what Elektrim is trying to achieve by this action? Although the action is for a final injunction to restrain the LCIA arbitration pending the outcome of the ICC arbitration, its real aim is “case management” of the two arbitrations. Elektrim does not claim that the LCIA arbitration must stop for all time. Elektrim simply does not wish to fight in these two theatres of war at once. Presumably it judges the ICC arbitration to be the better battle ground at present and its chances of success there are greater.…
I do not intend to explore generally the question of whether the court has any jurisdiction at all … to grant either interim or final injunctions to restrain arbitrations that are subject to the 1996 Act. I must assume that there is such a jurisdiction, given the comments of the Court of Appeal in the cases of Cetelem SA v. Roust Holdings Ltd  2 Lloyd’s Rep 494; and Weissfisch v. Julius  1 Lloyd’s Rep 716….
There is no dispute, of course, that the court has jurisdiction … to grant an injunction to restrain a party from engaging in court proceedings in another jurisdiction, in breach of an English arbitration clause in a contract by which the parties are bound. [See, e.g., Aggeliki Charis Compania Maritima SA v. Pagnan SpA (“The Angelic Grace”)  1 Lloyd’s Rep 87 at 96 per Millett LJ….] But in this case [Elektrim] urges the court to [grant an injunction] for a very different purpose. It is to grant a final injunction to restrain the prosecution of an arbitration whose seat is in England, so is governed by Part 1 of the 1996 Act. The LCIA arbitration results from an admittedly valid arbitration clause which is itself a term in a contract (the TIA) which the arbitrators have held is valid and binding on Elektrim and Vivendi. As far as the English courts are concerned, Elektrim cannot challenge either the validity of the TIA, nor the validity of the current LCIA arbitration, nor the authority of the arbitrators. Elektrim does not try to do any of those things in the present proceedings.
It seems to me that there are two initial difficulties that Elektrim has to overcome before the court could consider granting an injunction to restrain an arbitration that is governed by the 1996 Act. First, it must demonstrate that the prosecution of the LCIA arbitration is an act which would entitle the court to invoke the jurisdiction to grant injunctions [under English statutory authority, being §37 of the Supreme Court Act 1981 (“SCA”). Section 37(1) of the SCA provides: “(1) The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases where it appears to the court to be just and convenient to do so….”] Secondly, it must show that the grant of an injunction to restrain the LCIA proceedings is consistent with the statutory scheme of the 1996 Act. In my view, Elektrim faces great difficulties in respect of each of these issues….
Although the present case involves a claim for a final injunction to restrain an arbitration, I think it is useful at this stage to consider, by analogy, the basis on which the court grants an injunction (often interim) to restrain proceedings in a foreign court. An injunction can be granted on one of two bases. First, if the proceedings are an infringement of a legal or equitable right of a party; secondly, where those proceedings are vexatious, oppressive or unconscionable. The first analysis is usually applied to cases where the parties have contractually agreed to submit disputes to a particular court or to arbitration and one party has started proceedings in breach of that agreement. The second analysis applies where there is no such agreement but the court concludes that the ends of justice require an injunction to restrain foreign proceedings that are vexatious or oppressive. In each case the court has a discretion to grant or refuse the injunction sought, depending on the particular facts of the case.
[Elektrim] did not argue that there was any different juridical basis … to grant an injunction to restrain an arbitration. Indeed, [its] argument is that the continuation of the LCIA Arbitration is vexatious and oppressive to Elektrim. So, the first difficulty for Elektrim is this: what legal or equitable right of Elektrim has been infringed by Vivendi that entitles the court to consider restraining the LCIA Arbitration from continuing? Alternatively, on what basis is it vexatious or oppressive or unconscionable towards Elektrim for Vivendi to continue the LCIA Arbitration, so as to entitle the court to consider restraining the LCIA Arbitration from continuing? … [T]he court has to be satisfied (on a balance of probabilities) that Elektrim has demonstrated that one or other of these bases exists….
Elektrim [claims] a legal or equitable right to have a fully and unquestionably enforceable award, which right is reflected in the duty placed on the tribunal by Article 32 of the LCIA Rules. Elektrim has a right not to be oppressed or vexed by having to face the LCIA and the ICC arbitrations and Polish proceedings at once in the present circumstances. Whilst I can follow the first stage, I cannot accept the second stage of that submission as a satisfactory analysis.
Elektrim and Vivendi agreed to the arbitration clause in the TIA. The current LCIA Arbitration was set up by agreement between the parties once disputes had arisen concerning the TIA. The LCIA Arbitration has continued by the agreement of the parties until Elektrim issued the present proceedings. Neither the existence of the LCIA Arbitration nor its prosecution can be characterized as being in breach of any legal or equitable right of Elektrim. It is, in fact, the opposite. The resolution of disputes concerning the TIA through an LCIA Arbitration is what the parties agreed to do by their contract in the TIA.
I fail to see how the fact that Vivendi has started the ICC Arbitration after the start of the LCIA Arbitration can create a new legal or equitable right for Elektrim in respect of the LCIA Arbitration that might allow the court to invoke its jurisdiction under §37. So far as I can see, only two possible arguments might be raised. The first is that there is an implied term of the LCIA Arbitration agreement that if another arbitration is started between the same parties, but not relating to the same subject-matter as the existing arbitration, then the parties have a right to call a halt to the LCIA Arbitration. Such an implied term is neither reasonable nor necessary to the working of the LCIA arbitration agreement….
The second possible argument is Elektrim has a legal right to the conduct of the LCIA Arbitration by the arbitrators in a manner consistent with their duties as set out in §§33(1)(a) and (b) and (2) of the 1996 Act [Documentary Supplement at p. 121]. I will assume that parties to an arbitration have a legal right that the arbitrators who have been appointed will carry out their duties in accordance with §33. Elektrim’s argument in this case would have to be that the LCIA arbitrators have failed in the exercise of their statutory duty by refusing (three times) to stay the LCIA Arbitration pending resolution of the ICC arbitration. But in my view there are two reasons why, even assuming such a breach of duty, it could not permit the invocation of the court’s jurisdiction to grant an injunction using §37.
First, it was well established under the old [English legislation for international arbitration (the Arbitration Act, 1975)] that the court did not have a general supervisory role over arbitrations at their interlocutory stage beyond that granted by the Arbitration Acts.… [See the Bremer Vulcan case  AC 909 at 979 per Lord Diplock.] Therefore there was no scope to invoke the court’s jurisdiction to grant injunctions to compel arbitrators to take a particular course in the reference. That rule must remain the case under the 1996 Act. The position is emphasized by the provisions of § 1(c) of the Act, which stipulates that “in matters governed by this Part the court should not intervene except as provided by this Part.”
Secondly, the 1996 Act itself provides the remedy for a breach of the §33 duty. Either before the award is made or after it is made, the party that alleges it is aggrieved can apply to remove the arbitrator or challenge the award, under (respectively) §§24 (1)(d)(i) or 68(2)(b). The first section permits an application to the court to remove the arbitrator for a refusal or failure properly to conduct the proceedings. The second section permits a challenge to the award on the basis that there has been a serious irregularity because of the tribunal’s failure to comply with §33. In either case there is no need for the court to interfere with the arbitral process by granting an injunction pursuant to the powers in §37.
The next question is can Elektrim demonstrate that continuation of the LCIA Arbitration now that the ICC Arbitration has started is oppressive or vexatious? The only basis on which it can seriously do so is by asserting that it should not have to face two arbitrations at once. However, it is clear that the two arbitrations concern different subject matters. The LCIA Arbitration is dealing with disputes concerning the TIA. The ICC Arbitration is dealing with disputes concerning the Settlement Agreement. Neither arbitration could deal with the subject matter of the disputes that is being dealt with by the other. Both arbitrations were started pursuant to contracts by which the parties agreed to resolve disputes concerning them by arbitration.
Therefore, … Elektrim has failed to demonstrate any legal basis on which the court could invoke the jurisdiction to grant an injunction. But Elektrim’s position is made even weaker, in my view, when the question of the court’s power to grant an “anti-arbitration” injunction is put in the context of the 1996 Act.
Arbitrations that fall within the 1996 Act are the result of agreements between two (or possibly more) parties to resolve legal disputes through a private impartial tribunal. Such arbitrations are, by definition, consensual.… I have already noted that under the pre-1996 Act regime, it was well established that the courts did not have a general supervisory power to intervene in arbitrations before an award was made, either by injunction or some other method. That remains the position. Section 1(c) of the Act is an express statutory warning11 to the courts not to intervene except as provided in Part 1 of the 1996 Act. That reflects the underlying principles of the 1996 Act of party autonomy and the minimum of interference in the arbitral process by the courts, at least before an award is made.
In my view the whole structure of Part 1 also suggests that the scope for the court to intervene by injunction before an award is made by arbitrators is very limited. First, §44(2)(e), is the only express provision in Part 1 giving the courts the power to grant interim injunctions in aid of an arbitration, but the scope for obtaining one is limited. [El-ektrim] accepted that the power given to the court to grant interim injunctions in §44(2)(e) was of no use to [it] in the current action.
Secondly, the only other express reference to the court granting an injunction is in §72. That section permits a person who is alleged to be a party to arbitral proceedings but who has taken no part in them to question in court proceedings the validity of the arbitration agreement, the constitution of the tribunal and the terms of the reference to arbitration. The court proceedings can be for either a declaration or an injunction or other appropriate relief. Again, [Elektrim] accepted that this section was no use to [it] in this action.
Thirdly, Part 1 of the Act contemplates that once matters are referred to arbitration, it is the arbitral tribunal that will generally deal with issues of their jurisdiction and the procedure in the arbitration up to an award…. [Section] 33 lays a statutory duty upon the tribunal to adopt procedures suitable to the circumstances of a particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters that are to be determined. Section 34(1) stipulates that it is for the tribunal to decide “all procedural and evidential matters, subject to the rights of the parties to agree any matter.” Section 34(2)(a) provides that procedural matters will include “when and where any part of the proceedings is to be held.” It is clear, therefore, that the Act contemplates that the tribunal will consider and decide such matters as whether there should be an adjournment or a stay of the arbitral proceedings. That is consistent with the general approach of the 1996 Act, which is to give as much power as possible to the parties and the arbitrators and to reduce the role of the courts to that of a supporter of the arbitration process up to an award being made.…
In the present case, the LCIA arbitrators have not only to comply with the statutory duty under §33, but also a duty to the parties by virtue of Article 14(1)(i) and (ii) of the LCIA Rules. This only serves to reinforce my conclusion that in the present case the LCIA tribunal itself should decide whether or not those proceedings should continue or should await the outcome of the ICC arbitration. The tribunal has the power to do so and it is the body chosen by the parties to decide the dispute that has arisen between Vivendi and El-ektrim concerning the TIA.
Against this background, I have concluded that even if Elektrim could establish that one of its legal or equitable rights had been infringed or was threatened by the continuation of the LCIA Arbitration pending the outcome of the ICC arbitration, or even if it could establish that the continuation of the LCIA Arbitration was otherwise vexatious, oppressive or unconscionable, … the court should not invoke the power to grant an injunction.…
I should note that [Vivendi] submitted that the grant of an injunction to restrain the LCIA arbitration would mean that the court was acting contrary to the U.K.’s obligations, as a Contracting State, under the New York Convention on the recognition and enforcement of foreign arbitral awards, 1958. In view of the decision I have reached apart from the New York Convention arguments [of Vivendi], I do not need to comment on them.
Having decided, on the basis of the first two issues, that no injunction should be granted, strictly speaking there is no need for me to decide the third question I have posed. As I have already said, I am not satisfied that the continuation of the LCIA Arbitration is vexatious or oppressive or unconscionable. The reason for the two arbitrations carrying on at the same time is that Vivendi wishes to claim that the Settlement Agreement is valid and to do so it must start the ICC Arbitration, whereas Elektrim claims it is not and the TIA subsists. So Vivendi has little choice but to continue with the LCIA Arbitration which is dealing with the parties disputes under the TIA…. It is simply inevitable that there will be multi-party, multi-tribunal litigation or arbitration in the circumstances of the war for the PTC shares that is going on…. [The Court also concluded that Elektrim had delayed for ten months in seeking an anti-arbitration injunction.] In these circumstances it would be unjust, in my view, to grant Elektrim an injunction to restrain the continuation of the LCIA arbitration….
1. Arbitrators’ authority to issue interim orders or awards. Most national arbitration legislation expressly or impliedly permits arbitrators to make various types of interim procedural rulings, orders, or awards. These can concern such matters as the applicable law, jurisdictional objections, the time and manner for making submissions, the time and manner of hearings, discovery, the admissibility of evidence, and requests for extensions of time. The arbitral tribunal’s interim award in Mobil Oil, deciding what version of the ICC Rules was applicable, is a good example. See UNCITRAL Model Law, Arts. 16, 17, 19, 24, 29; SLPIL, Arts. 182, 183, 186, 188.
Many interim rulings are denominated as “orders” or “instructions” or simply take the form of letters from the tribunal to the parties. See infra pp. 816–17. These rulings differ from “awards” in that they do not adopt the form of awards (e.g., signed by all arbitrators, state reasons, etc.) and are (as discussed below) not generally subject to judicial review. In addition, such rulings are not subject to provisions of institutional rules (e.g., the ICC Rules) requiring institutional review of awards or imposing formal requirements. Importantly, as discussed below, many such orders are—in contrast to final awards—not subject to independent judicial review or annulment in national courts. See infra pp. 806–10.
2. Limits on judicial intervention in international arbitral proceedings under UNCITRAL Model Law. Article 5 of the Model Law is a leading example of legislation imposing limits on interlocutory judicial intervention in international arbitral proceedings, whether by review of a tribunal’s interim orders or otherwise. Article 5 provides that “[i]n matters governed by this Law, no court shall intervene except where so provided in this Law.” (Emphasis added.) The Model Law then sets forth limited circumstances involving judicial support for the arbitral process (e.g., resolving jurisdictional objections, assisting in constitution of the tribunal, granting provisional relief, considering applications to annul arbitral awards), but not permitting judicial supervision of procedural decisions through interlocutory appeals or otherwise. UNCITRAL Model Law, Arts. 8, 9, 11(3), 13, 14(1), 16(3), 17, 27, 34 and 36.
In the words of one court in a Model Law jurisdiction: “Article 5 of the Model Law expressly limits the scope for judicial intervention except by application to set aside the award or to resist enforcement of an award under one or more of the limited grounds specified in Articles 34 or 36.” Corporacion Transnacional de Inversiones, SA de CVv. STET Int’l, SpA, (1999) 45 O.R.(3d) 183 (Ontario Super. Ct.), excerpted above at pp. 784–85. Or, as a court in another Model Law jurisdiction held, rejecting a request that it review a tribunal’s interim decisions: “It is premature, in effect, at this stage of proceedings, to ask the Superior Court of Québec to intervene on questions that can eventually, and only, be remitted to it after a final arbitral award has been made…. [The] Court is not clothed with the power to examine [these questions] at this moment, but only once the final arbitral decision has been rendered.” Compagnie Nationale Air France v. Libyan Arab Airlines,  R.J.Q. 717 (Québec Super. Ct.). See also Judgment of 4 December 1994, XXII Y.B. Comm. Arb. 263 (1997) (Austrian Oberster Gerichtshof) (vacating injunction requiring arbitrators to conduct arbitration in German and English, rather than only in English (as the tribunal had ordered): “Court review of orders for directions by the arbitral tribunal is not provided for; this would also be in contradiction with the sense and purpose of arbitral proceedings”); Bancol etc. v. Bancolombia etc., 123 F.Supp.2d 771 (S.D.N.Y. 2000) (“the court’s authority to direct or oversee [an] arbitration is narrowly confined. In particular, it has little or no power to afford interlocutory review of procedural matters, let alone to determine at the outset what procedural rules are to be applied…. ‘[P]rocedural’ questions which grow out of the dispute and bear on its final disposition should be left to the arbitrator.”); K/S A/S Bill Biakh v. Hyundai Corp.  1 Lloyd’s Rep. 187 (Comm) (English High Ct.) (“In the interests of expedition and finality of arbitral proceedings, it is of first importance that judicial intrusion in the arbitral process should be kept to a minimum. A judicial power to correct during the course of the reference procedural rulings of an arbitrator which are within his jurisdiction is unknown in advanced arbitration systems….”).
3. National arbitration legislation limiting judicial confirmation or review to “final” awards. Consider the FAA and the SLPIL. Do they contain any limitation equivalent to Article 5 of the UNCITRAL Model Law? Note the limitations on the types of arbitral rulings that may be reviewed under Article 190(1) and 190(3) of the SLPIL and §§9 and 10 of the FAA. See infra pp. 1116–18. The limitation of judicial review (or confirmation) to “final” awards serves the same basic purpose as Article 5 of the UNCITRAL Model Law.
Consider the court’s reasoning in Elektrim. What was the basis for the principle of judicial non-intervention under English law? Compare Article 5 of the Model Law and §1(c) of the English Arbitration Act. Consider Articles 34-36 of the UNCITRAL Model Law. Compare §§67-69 of the English Arbitration Act. What sorts of rulings by an arbitral tribunal may be the subject of actions to set aside? Could the tribunal’s orders denying a stay in Elektrim have been subject to an annulment action?
Would the analysis in Elektrim have been any different if the LCIA arbitration had been seated outside of England? Suppose that the English court had been asked to stay the ICC arbitration. Would it have been harder, or easier, to obtain an injunction? Why?
4. Rationale for limits on interlocutory judicial review. The rationale for limits on interlocutory judicial review is that a “court should not ‘hold itself open as an appellate tribunal’ since applications for interlocutory relief ‘result only in a waste of time, the interruption of the arbitration proceeding, and … delaying tactics in a proceeding that is supposed to produce a speedy decision.’”Michaels v. Mariforum Shipping, SA, 624 F.2d 411, 414 (2d Cir. 1980) (quoting Compania Panemena Maritima v. J.E. Hurley Lumber Co., 244 F.2d 286, 288-89 (2d Cir. 1957)). Or, in the words of Mobil Oil, “for the court to entertain review of intermediary arbitration decisions involving procedure or any other interlocutory matter, would disjoint and unduly delay the proceedings, thereby thwarting the very purpose” of arbitration. See supra pp. 799–800.
Is the foregoing rationale persuasive? If the arbitrators have committed some gross procedural or other interlocutory error, is it not better to know sooner rather than later? What is the cost of such knowledge? Particularly in international arbitration?
Are there any circumstances in which interlocutory judicial intervention in an international arbitration should be permitted? Suppose an arbitrator refuses to permit one party to proffer critical evidence, in undeniable breach of clear provisions in the parties’ arbitration agreement. Suppose a sole arbitrator persists in having indefensible ex parte contacts about the merits of the dispute with one party. Should such procedural errors go uncorrected? How might they be redressed?
What if, in Elektrim, Vivendi had agreed in the Settlement Agreement to stay the LCIA Arbitration, and Elektrim sought to enforce that agreement. If Vivendi refused to comply with its agreement to stay the arbitration, should a court in the arbitral seat have the authority to enjoin the arbitral proceedings? Or should the decision whether or not to do so be for the arbitral tribunal? Be subject to subsequent judicial review of their award?
What if, in Mobil Oil, the parties’ arbitration agreement had provided unambiguously for the application of the 1975 ICC Rules? What if the tribunal’s refusal to apply the 1975 ICC Rules inflicted enormous cost and irreparable damage on one party? Is it appropriate for the arbitral proceedings to proceed on a fundamentally flawed and highly damaging basis, without the possibility of judicial intervention? Note that an arbitrator may be challenged and removed in an interlocutory judicial action. See supra pp. 758–75. Why can’t a defective procedural decision also be corrected?
What if an arbitral tribunal appointed pursuant to the ICC (or AAA) Rules refused to apply those rules? Would it be appropriate for interlocutory judicial review to be available? Why or why not?
5. Interim arbitral decisions generally not subject to interlocutory actions to vacate under §10 of FAA. As Stanton and Mobil Oil illustrate, if the arbitrators render an interim decision (for example, limited to issues of choice of law or liability) that is not intended to be a final disposition of part of the parties’ dispute, then no provision of the FAA confers any power of interlocutory judicial review. Lower U.S. courts have refused to review interim decisions on subjects such as an arbitrator’s partiality, selection of arbitral seat, discovery or evidentiary orders, provisional measures, choice of law, and jurisdiction. See, e.g., In re Y & A Group Sec. Litg., 38 F.3d 380 (8th Cir. 1994) (“the usual rule is that under the FAA no appeal [sic] can be taken to the district court [from an award] until a final decision is rendered”); Compania Panemena Mar-itima v. J.E. Hurley Lumber Co., 244 F.2d 286, 288-89 (2d Cir. 1957) (refusing to permit interim judicial review of arbitrators’ evidentiary ruling); Yasuda Fire & Marine Ins. Co. v. Cont’l Cas. Co., 840 F.Supp. 578 (N.D. Ill. 1993) (arbitrators’ order that discovery not be shared with non-parties is not final award subject to FAA §10 vacatur); Ligon Nationwide, Inc. v. Alton Bean, 761 F.Supp. 633 (S.D. Ind. 1991) (refusing to permit action to annul award that request for arbitration was timely filed and could be amended: “Without question, the two ‘awards’ appealed herein are not final. They do not decide either liability or damages; their nature is purely procedural and precursory to a final arbitration.”).
6. Possibility of interlocutory judicial intervention in exceptional circumstances. Notwithstanding the general rule against interlocutory judicial intervention in the arbitral process, there are a limited number of exceptional circumstances where such intervention is available.
(a) Selection or removal of arbitrators. Consider Articles 11, 12 and 13 of the UNCITRAL Model Law and Article 180 of the SLPIL. What do these provisions permit by way of interlocutory judicial intervention in the arbitral process? Why? What safeguards are placed on such judicial intervention? See also supra pp. 768–71.
(b) Interlocutory jurisdictional decisions. Consider Article 16 of the UNCITRAL Model Law (particularly Article 16(3)) and Articles 186 and 190(2)(b) of the SLPIL. What do they provide with respect to interlocutory judicial decisions on the arbitrators’ jurisdiction? Why? What safeguards are placed on such judicial intervention? See also supra pp. 275–78. Note also the possibilities for interlocutory judicial consideration of jurisdictional objections under the FAA. See supra pp. 278–83.
(c) Provisional measures. The UNCITRAL Model Law and other developed arbitration statutes permit national courts to issue provisional measures in aid of an international arbitration. UNCITRAL Model Law, Art. 9; SLPIL, Art. 183(2); infra pp. 904–32. Alternatively, the arbitral tribunal may itself grant provisional measures; if enforcement of tribunal-ordered provisional measures is sought, national courts will review the tribunal’s decision (under applicable standards for judicial review). See infra pp. 896–904.
(d) Evidence-taking. The UNCITRAL Model Law provides for national courts to provide interlocutory judicial assistance to international arbitral tribunals. See UNCITRAL Model Law, Art. 27; SLPIL, Art. 184(2); infra pp. 839–51. Note that judicial assistance is generally available only when requested or authorized by the arbitral tribunal. Compare U.S. FAA, §7.
(e) Other circumstances. Note the court’s observation in Elektrim that §1(c) of the English Arbitration Act is only a “warning,” and that circumstances permitting interlocutory judicial intervention might arise. (Compare Article 5 of the Model Law.) Should such an open-ended authority exist?
7. New York Convention limits on interlocutory judicial intervention in international arbitration proceedings. Consider the argument, referred to in Elektrim, that the New York Convention prohibited the English courts from enjoining the LCIA Arbitration. What provisions of the Convention would that argument be based upon? Article II? In what respect would English courts be failing to recognize the parties’ arbitration agreement (for example, in the TIA)?
Would the Convention argument be any stronger if the seat of the LCIA Arbitration had been outside of England?
8. Orders by national courts supervising arbitration. After compelling arbitration or staying litigation, a few U.S. lower courts have taken steps to supervise arbitral proceedings. Nederlandse Erts-Tankersmaatschappij NV v. Isbrandtsen Co., 339 F.2d 440 (2d Cir. 1964); PPG Indus., Inc. v. Pilkington plc, 825 F.Supp. 1465 (D. Ariz. 1993) (“the Court directs that any damages determination, or arbitral award, made by the arbitrators shall be determined according to U.S. antitrust law irrespective of any conflict that may exist between those laws and the laws of England.”); Euro-Mec Imp., Inc. v. Pantrem & C., SpA, 1992 WL 350211 (E.D. Pa.) (“The parties must reach agreement within forty-five (45) days on how the arbitration will proceed in Geneva and inform the court of their agreement; the court will order the location and terms of arbitration”). Nevertheless, the concept of judicial supervision of the arbitral process is alien to the promise of swift, non-national dispute resolution by international arbitration. Are these decisions consistent with prohibitions against interlocutory judicial review of interim arbitral rulings?
9. Judicial non-interference in ICSID arbitrations. The principle of judicial non-interference is made express in investment arbitrations by the ICSID Convention. Consider Articles 26, 27 and 53 of the Convention. Is there any room for national court involvement in an ICSID arbitration? Do national courts play any role in: (a) determining jurisdictional disputes; (b) selecting or removing arbitrators; (c) granting provisional measures; (d) assisting in evidence-taking; or (e) reviewing and confirming awards? Contrast this to the international arbitral process under the New York Convention.
C. ARBITRATORS’ EXERCISE OF PROCEDURAL AUTHORITY IN INTERNATIONAL ARBITRATION
As we have seen, national law and institutional rules grant arbitral tribunals substantial discretion over the arbitral procedures (absent contrary agreement by the parties).12 As discussed below, the manner in which an arbitral tribunal actually exercises its discretion in practice turns on the identity and background of the arbitrators, the desires of the parties, the nature of the dispute, the need for and utility of different procedural mechanisms or orders (e.g., disclosure, a site inspection), and the costs and delays that will result from ordering a particular course of action. The tribunal’s exercise of its discretion plays a highly significant role in the procedural conduct of the arbitration, influencing most aspects of the procedural timetable and scheduling of the arbitration. The materials excerpted below explore international arbitral tribunals’ exercise of their procedural authority.
UNCITRAL NOTES ON ORGANIZING ARBITRAL PROCEEDINGS
REPRESENTATIVE PROCEDURAL ORDER IN ICC ARBITRATION
2010 IBA RULES ON THE TAKING OF EVIDENCE IN INTERNATIONAL ARBITRATION
MEDITERRANEAN AND MIDDLE EAST INSTITUTE OF ARBITRATION STANDARD RULES OF EVIDENCE
5(1) Each party shall deliver to the arbitrator, and exchange with the other parties, a list of all the classes of its documents related to the dispute.
5(2) The other party shall be entitled to request, within 30 days after receipt of such list, a full list of the documents of one or more of such classes (List of Documents) and to inspect one or more of such documents, inspection to take place in such a way as to minimize the inconveniences to the other parties; the applicant shall advance the costs related to discovery, as fixed by the arbitrator.
5(3) In case of refusal to provide the List of Documents or to allow inspection within 30 days after receipt of the notice to this effect, the other party shall be entitled to apply to the arbitrator for an Order of Discovery. The parties are entitled to be heard on such application.
5(4) Before issuing such an order, the Arbitrator shall satisfy himself that such documents are not irrelevant to the dispute, and that the application does not aim totally or partially to confuse the matter through the production of quantity of unnecessary documents. An application for discovery will have to be examined by the Arbitrator by proceeding to test the relevance of a portion of such documents. On a party’s application, before or after his order, the Arbitrator shall conduct a hearing at which the application or his order will be discussed.
5(5) Whenever the arbitrator, after such an examination, has the impression that a large number of the documents, production of which is sought, is irrelevant, he shall be entitled to appoint a lawyer as his expert to divide the documents in three classes; those which he considers relevant, the irrelevant ones and those which might be relevant. The party which seeks production of documents, the relevance of which has been challenged, will have to advance the costs of the expert and to deposit an amount that covers the costs caused to the other party by its inspection (such as the time spent by the other side’s staff to attend inspection of the documents which are found irrelevant). All the costs caused by the inspection of the irrelevant documents are to be borne by the party which has applied for their production, even if its claim is eventually successful. Likewise the Arbitrator may, on application, appoint an expert to divide already produced documents into said three categories and to report on them and place the expert and the Arbitrator’s costs and the other parties’ costs to the charge of the party which has produced irrelevant documents even if the claim of that party succeeds.
5(6) Apart from general discovery, the production of specific documents may be ordered by the Arbitrator on a party’s application at any stage of the proceedings until the hearing for the final addresses of the parties to the Arbitrator.
5(7) Before deciding on the application, the arbitrator shall invite the parties to file their written arguments or to be heard if they so wish.
5(8) The unjustified refusal by a party to discover documents as well as the refusal of a party to testify may be used by the Arbitrator as one of the elements of his decision.
PROCEDURAL ORDER IN ICC CASE NO. 7170
in D. Hascher, Collection of Procedural Decisions in ICC Arbitration 1993-1996 56 (1997)
Regarding the testimony of Mr. [X]
1. If plaintiff so requests the testimony of Mr. [X] shall be taken.
2. Mr. [X] can testify close to his home, before a public notary, in Italian, if necessary.
3. The Tribunal will not be present.
4. Counsel for defendant may be present and may put questions. In that case simultaneous translation is to be provided into English, provisionally at the expense of the plaintiff.
5. An English-language transcript of all declarations shall be provided, authenticated by the notary public and by a qualified translator and shall be sent to the parties, the Tribunal and the Secretariat by [date] at the latest.
6. Counsel for the plaintiff should send per telefax a proposal with all specifications at their earliest convenience and addressed to counsel for defendant, the Tribunal and the Secretariat.
PROCEDURAL ORDER IN ICC CASE NO. 5542
in D. Hascher, Collection of Procedural Decisions in ICC Arbitration 1993-1996 63 (1997)
[The arbitration occurred under ICC Rules, with its seat in Ethiopia. The chairman of the tribunal was a civil lawyer.] In their Submission on the merits of [date], Claimant required the Defendant: “to disclose all documents passing between itself and the [Bank],” and “to disclose all documents in their possess or control relating to this contract.” The second request was directed to the Engineer as well. The grounds for the Claimant’s request was that “(it) understands the continued non-payment of the foreign currency element of Certificates Nos. [A] and [B] and [C] subsequently Certificates Nos. [D] and [E] has arisen as a result of an instruction issued to the [Bank] by the Defendant.” As to the second request, Claimants stated that
“(it) understands the Defendant instructed the Engineer to issue a certificate under Clause 63.1 immediately it (the Defendant) received the notice of termination by the Claimant.”
The certificate thus referred to is the document issued by the Engineer which allows the Employer, according to clause 63.1 of the General Conditions of the contract in dispute, “after giving 14 days’ notice in writing to the Contractor (to) enter upon the Site and the Works and expel the Contractor therefrom,” which the Employer actually did in the instant case.
By telex of [date], solicitors to Defendant, objected that Claimant’s application for “discovery” was premature, and that the “discovery” required would “involve the generation of massive number of copy documents many of which are probably not relevant to the matter in issue in the arbitration.” In its “Submission for hearing on [date],” Claimant stated again that it “required to see” the documents indicated in its Submission in the merits, however limiting the request as to the documents passed between the Defendant and the Engineer to those which were passed from [a particular date] to the present date.
In its own Submission of [date], Defendant relied on article 249 of the Ethiopian Code of Civil Procedure, stating that this provision gives “power to the Courts to require the presentation of any document in the absence of which the Court considers the issues of the case cannot be correctly framed.” However, Defendant stated that Ethiopian Courts, “exercise this power not at the request of the Claimant but on their own initiative” and that they do so “very rarely,” and only when “they are convinced of the relevance and importance of the documents.” Defendant concluded that under the Ethiopian law of procedure, which he considers to be applicable “to the present dispute,” Claimant’s request was not to be granted, “since” (the latter) “did not request for the disclosure of specific documents (title, date, reference number, etc.) and did not show the relevance of disclosure of all documents without exception” (relevance which, says the Defendant, “cannot be reasonably presumed”).
Finally, at the hearing of [date], Claimant amended its request for disclosure in the following terms:
“All documents passing between the Defendant and the Engineer relating to or in any way referring to: (a) Any request by the Claimant, for an extension of time the contract period, (b) the issue by the Engineer of a certificate under clause 63.1 of the Conditions of Contract of Civil Works.
All documents passing between the Defendant and the [Bank] relating to or in any way referring to any instruction or similar request by the Defendant to the [Bank] not to make payment to the Claimant of any of certificates Nos. [A-E] inclusive….”
The parties have agreed in the Terms of Reference, that:
“(t) rules governing the proceedings before the arbitrators shall be those resulting from the [ICC Rules], as published by the latter in 1975, and, where these Rules are silent, any rules which the arbitral tribunal may settle, whether or not reference is thereby made to a municipal procedural law to be applied in the arbitration.”
Following to the execution of the Terms of Reference, amended [ICC Rules] were published by the ICC, which entered in force on 1st January 1988. However, it is not necessary to enter here into the discussion of the applicability of the Rules ratione temporis, since their provisions which are relevant in the instant case (namely Articles 24 and 26, already referred to, and article 14-1, 1st sentence, to which reference will be made here-under) are identical in the 1975 and in the 1988 versions.
Now, while the ICC Rules do not contain any provision dealing with “discovery” properly speaking, it is enough to recall here that according to Article 4(1) “(t)he arbitrator shall proceed within as short a time as possible to establish the facts of the case by all appropriate measures.” This provision allows the arbitrators to ask the parties to produce the documents in their possession or control, which in their view are relevant to the case.
Moreover, one might notice, ex abundente cautela, that as the Defendant recalls itself, article 249 of the Ethiopian Code of Civil Procedure does confer such power on the Ethiopian Courts, which shows that such a measure—being, indeed discovery by inspection of one party’s files—is not alien to Ethiopian law. In addition, the Tribunal stresses that no request or injunction for production of documents might be addressed by an arbitral tribunal to third parties, on which such a tribunal has no jurisdiction of whatever kind.
In the circumstances of the case, the Tribunal considers that the amended request for disclosure of documents, such as presented by the Claimant during the hearing of [date], may furnish a basis to an order to [be] issued in this respect. However, the same is to be restricted by deciding that the documents passing between the Defendant and the Engineer relating to the implementation of clause 63.1 of the Conditions of Contract are those relating or referring to the certificate referred to by the Defendant in its letter of [date], this certificate being the only one which may be relevant to the issue of the expulsion of the Contractor by the Employer. As to the documents passing by the Defendant and the [Bank], they would be relevant only insofar as they concern the foreign currency element of Certificates Nos. [A-E] inclusive.
Consequently, disclosure of documents is hereby ordered by the Tribunal within the limits thus indicated. Further, it is hereby ordered that the Claimant is not entitled to any inspection of the Defendant’s files.
FINAL AWARD IN ICC CASE NO. 7626
XXII Y.B. Comm. Arb. 132 (1997)
CERTAIN UNDERWRITERS AT LLOYD’S v. ARGONAUT INSURANCE CO.
264 F.Supp.2d 926 (N.D. Cal. 2003)
PARKER v. UNITED MEXICAN STATES (U.S.A. v. MEXICO)