Arbitration still remains the main form of coercive dispute resolution internationally. The advantage of international arbitration is most evident when the enforcement of the arbitrator’s award is examined. The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (the ‘New York Convention’) has been adopted by many countries and is free from the intervention of any state. It is a consensus document and therefore represents a common standard.
This convention creates the structure for international arbitration and is said by commentators to be the most effective instance of international legislation in the history of commercial law.
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International arbitration includes both ‘ad hoc’ and ‘administered’ arbitration. The former is conducted in a manner decided by the arbitrator, where specified rules are agreed by the parties, such as the UNCITRAL Rules. The latter is conducted by organisations like ICC in accordance with published rules and procedures.
Ad-hoc arbitrations are more flexible, allowing the arbitration to be tailored to the dispute, and there is no delay in going through an organisation. Administered arbitrations have the disadvantage of the cost of administration, but some practitioners consider that there is little difference in overall cost.
The ICC rules are perhaps the most commonly used procedure in international construction contracts. The place of arbitration is fixed by the court unless agreed by the parties (Article 14). However, it is usual (unless the contract provides otherwise) for the arbitration to be held where the chairman of the tribunal resides (or where the single arbitrator resides if only one arbitrator is required). The ICC usually appoints a chairman from a neutral country unless otherwise agreed by the parties. As well as being an appointing body, ICC is also an administering body. It scrutinises the award in draft as a means of quality control.
The United Nations Commission on International Trade Law ((UNCITRAL) was established in December 1966. It adopted arbitration rules in 1976, and the UN General Assembly unanimously approved the rules in December 1976. The aim of the rules was to establish a basic structure for ad-hoc arbitrations to ensure international acceptance of arbitration awards, particularly under the New York Convention.
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By GlobalDataUNCITRAL Articles 6 and 7 refer to an appointing body, but, failing this, the Secretary-General of the Permanent Court of Arbitration at The Hague designates an appointing authority. UNCITRAL is not an administering authority. Article 6 (3) lists procedure for a sole arbitrator and the general practice is for sole arbitration to be of a different nationality from that of parties.
Much of arbitration law deals with how arbitration is regulated. There are no recognised procedures followed in all international arbitrations, but there has been a fusion of common law and civil procedures. The former have been influenced by the history of juries deciding civil litigation. Continental jurisdictions have generally not decided civil matters by juries. Civil jurisdictions are not homogeneous but are influenced by the use of documents – a written, not an oral, tradition.
The model in common law is a joint enterprise to establish the facts. In civil law, the parties identify the facts to be used, then prove the facts, and the judge then applies the law.
The procedural problems arising are common to most arbitrations. In civil proceedings, a party can request an order from the judge for production of specific documents, with different sanctions in different legal systems. In each system, inferences can be made if the document is not produced. An order for production of all relevant documents is unusual in international arbitration because it is difficult to enforce compliance.
In civil proceedings, witnesses are questioned by the judge with the purpose of clarifying the facts, not to discredit the witness. Since witness statements are given evidential weight by the judge, a party is not allowed to assist the witness in the preparation of his statement. In common law systems, the witness will prepare a witness statement but his evidence is given orally unless the parties agree that the witness statements are evidence in chief.The witness is cross examined by the other party.
In international arbitration, it is unusual for witnesses to prepare affidavits or to notarise statements; they are normally simply signed and dated. Witnesses are prepared by the party. The tendency is for evidence not to be given under oath. Examination of witnesses is less punctuated by objections because the rules of evidence are not so pervasive. The standard system involves statements being written beforehand and the witness questioned for clarification by the tribunal.
The hearing is the climax in common law systems and is usually uninterrupted. It is not normally as lengthy as in common law systems, and more emphasis is placed on the tribunal’s background reading on the case before the hearing.
