Summer 2008

ENFORCEMENT: ENGLISH COURTS TAKE PRAGMATIC APPROACH

by Kate Knox and Theo Naud, London

This year marks the 50th anniversary of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the “New York Convention”). Widely regarded as the foundational instrument for international arbitration, the New York Convention obliges contracting states to recognise foreign arbitral awards as binding and to enforce them in accordance with their rules of procedure. It is those rules of procedure and domestic courts’ approach to implementing the New York Convention that will determine the extent to which an arbitral award is enforced.

This article considers two recent decisions of the English Commercial Court which demonstrate its willingness to ensure timely enforcement of the arbitral award.

Please read the article here.

FRENCH SUPREME COURT CONFIRMS

TRANSFER OF THE ARBITRATION CLAUSE IN CHAINS OF CONTRACTS

The French Supreme Court has confirmed a ruling that clearly shows it is giving priority to the enforcement of arbitration clauses.

The decision, handed down in January, found that the arbitration clause was transferred through the chain of contracts among the parties. This ruling is interesting because, in its inconsistency with certain elements of French academic doctrine, it demonstrates France’s willingness to ensure the effectiveness and integrity of arbitration clauses.

Please read an overview of the case here.

ARBITRATION REMAINS

A CONSENSUAL PROCESS

by Ron Salter, DLA Phillips Fox, Melbourne

As a basic proposition, one can state with conviction that international arbitration is a creature of contract, requiring the parties to a contract to be ad idem in selecting arbitration as the appropriate method of dispute resolution. A recent decision of the Federal Court of Australia nevertheless provides an illustration of an interesting attempt to invoke the provisions of the Contracts (Rights of Thirds Parties) Act 1999 of the United Kingdom (the UK Act) to compel an arbitration in London involving parties who were not in a contractual relationship.

Please read a review of the decision here.

NEW ICDR GUIDELINES

AIM TO IMPROVE DISCLOSURE OF INFORMATION

by Claudia T. Salomon, New York

The American Arbitration Association (AAA) and its international division, the International Centre for Dispute Resolution (ICDR), recently released a new set of guidelines for the disclosure of information in international commercial arbitrations. The guidelines, developed in response to growing concerns within the ADR community about inconsistent and inefficient disclosure procedures around the globe, aim to reduce costs and speed up international arbitrations by clarifying both the powers and responsibilities of a neutral to manage the information disclosure phase of an arbitration.

“With these guidelines, neutrals around the world will have an all-encompassing set of principles on the exchange of information in international arbitration, which will expedite the process for the parties involved and save them money during the disclosure phase of an arbitration,” said Jim Carter, co-chair of the AAA Taskforce on Exchange of Documentary and Electronic Materials.

William K. Slate II, president and Chief Executive Officer of AAA, states: “We are very enthusiastic about the roll-out of these new guidelines. The ICDR is the first organization to develop comprehensive directions on the exchange of information in international alternative dispute resolution. We believe that this will not only enhance the arbitration process of the ICDR, but the practice of arbitration as a whole.”

The new guidelines are set to apply to all cases starting after May 31, 2008. Please read about them here.

NEWS FROM THE ARBITRATION INSTITUTIONS

ICC Hearing Centre

To respond to a growing demand from the business and legal communities, ICC will open a dedicated facility for arbitration hearings and other forms of commercial dispute resolution in October 2008. It will be the first such facility in Paris. The ICC Hearing Centre will be available for any kind of institutional or ad hoc arbitration hearings as well as for the conduct of amicable dispute resolution (ADR) procedures. More information about the facility may be found here.

Consultation on Arbitration (Scotland) Bill

The Scottish government has issued a consultation paper on the Arbitration (Scotland) Bill, which will reform and consolidate Scottish arbitration law into a single statute. Comments are invited by 19 September 2008. Please read the consultation paper here.

New time limit for enforcement of arbitral awards in China

The time limits for enforcement of foreign arbitral awards in mainland China have been extended. Prior to the October 2007 amendment of the PRC Civil Procedure Law, when one party failed to carry out a legally effective arbitral award, the other party could request execution of the award from a competent People’s Court, and that request had to be made within one year when one or both of the parties were individuals (Article 217), and six months when both parties were corporations (Article 219). The time limit for making an enforcement application, as provided in the new Article 215, is now two years (for both individuals and corporations). This period is to be calculated from the last day of the period for performance specified by the award (if this is specified), or the day the award takes effect (if the period for performance is not specified in the award), or, if the award provides for installment performance, the last day of the period specified for each installment. To read the Civil Procedure Law, please click here.

SCC and HKIAC co-operation agreement

The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) and the Hong Kong International Arbitration Centre (HKIAC) have signed a co-operation agreement for the efficient resolution of international commercial disputes. They aim to:

  • promote the use of arbitration, mediation, conciliation and other appropriate procedures by seminars, conferences and other programmes;
  • recommend arbitrators, mediators, experts or assessors and share information on arbitration in their respective jurisdictions;
  • jointly assist in the administration of investor-state arbitrations relating to Chinese parties.

Read the co-operation agreement here.

New arbitration initiatives in Singapore

The Singapore Ministry of Law intends to open an international dispute resolution complex that will house state–of-the-art hearing room facilities for international arbitration bodies, including the Singapore International Arbitration Centre (SIAC) and other international arbitration institutions from the United States and Europe. The ministry has announced two further initiatives:

  • a tax incentive for law practices carrying out international arbitration work with hearings in Singapore;
  • a work pass exemption for those entering Singapore for arbitration and mediation services.

Learn more about the complex here.

United States launches negotiations for investment treaty with China

The United States and China launched negotiations for a bilateral investment treaty (BIT) in June 2008 during the fourth meeting of the United States-China Strategic Economic Dialogue. In negotiating the BIT, the United States seeks to secure important legal protections for US companies, including the rights to:

  • non-discriminatory treatment;
  • fair and equitable treatment, including the right to due process;
  • compensation in the event of expropriation or nationalization;
  • free transfers of capital;
  • transparent regulation;
  • submission of disputes to international arbitration.

Read more about the negotiations here.

UPCOMING EVENTS

Cologne: 6th Cologne Summer Academy on International Commercial Arbitration

The Centre for Transnational Law (CENTRAL) in cooperation with the German Institution of Arbitration (DIS) is organizing this event, which will take place at the University of Cologne from 31 August 2008 to 4 September 2008. The event addresses students and young practitioners. Participants will have the opportunity to improve their skills and knowledge about international commercial arbitration under the guidance of experienced professionals. Click here for more information.

International Arbitration Involving Parties from the Arab World

The Arbitration Institute of the Stockholm Chamber of Commerce has arranged a conference dealing with issues which arise in international arbitration involving parties from the Arab World. The conference will take place on 23 October 2008 at Berns Salonger, Stockholm, Sweden. Click here for details and registration.