Stereotype 2. Arbitration Is Less Formal
By Cai & Lenard
This article is the second in the special set of comments “Stereotypes of international arbitration”. It is worth mentioning that here we discuss the myths which re typical for international arbitration.
Certainly, the parties are free to reach agreement on things such as:
* venue of the proceedings;
* process according to which arbitrator(s) will be selected;
* number, composition and/or background(s) of the arbitrators;
* conflicts, if any, that will disqualify an arbitrator;
* language in which the arbitral hearing (and other submissions) will be held;
* applicable procedural rules and substantive law;
* issues to be decided (and the issues “carved-out” from resolution via arbitration); and
* type of award and relief.
It is hard to imagine that national courts are able to grant such a freedom to parties. Theoretically, with the possible exception of certain very general requirements of the law of the place of arbitration, no particular set of procedural or evidentiary rules is in principle applicable to an international arbitration proceeding. However, where the parties have decided that their arbitration is to proceed under an arbitral institution’s rules, those rules will apply to the procedure. Though, such institutional arbitration rules provide broad procedural guidelines and leave the determination of more specific rules to the parties or, if the parties do not reach any agreement in this respect, to the arbitral tribunal, there are formalities or rather traditions which should be complied with. International arbitrations are in reality proceeding in accordance with a pattern.
Usually the arbitration algorithm includes the following stages:
1. Dispute arises;
2. Request for and submission of dispute to arbitration (This may be to a specific arbitrator or to an arbitral institution. Choices may be predicated by a pre-contractual term in an agreement which has given rise to the dispute. This early stage also involves other administrative tasks including the payment or deposit of fees and advances on costs, undertaken by both the parties and the arbitral institution, as well as the service of notice to the parties to the arbitration;
3. Parties agree on an arbitrator or an arbitrator is appointed by an arbitral institution or a court. Normally at this stage any challenges made in connection with the arbitrator-selection process should be resolved. After that an arbitrator accepts appointment.
4. Resolution of any jurisdictional issues that might arise (in particular, challenges to the place of the arbitration). Preliminary meeting at arbitrator's request. This may be a joint session with everyone present or may be conducted by telephone conference. Impleading of other interested and related persons to the arbitration;
5. Arrangements for the arbitration including hire of venue and travel arrangements, usually done by the parties with or without the assistance of an arbitral institution.
6. Arbitrator issues directions.
7. Preliminary hearings and interim awards possible in respect of security of costs, scope of arbitration agreement etc.
8. Submission of pleadings: claims / counterclaims and response to counterclaim.
9. Discovery and preparation of agreed documents.
10. Preparation of expert reports.
11. Hearing (all parties, representatives, witnesses and experts and arbitrator) and post-hearing briefs.
12. Award : decision and costs.
13. If non compliance - action for enforcement or challenge of or to award.
Although not all of these steps necessarily will take place in any international arbitration it is useful to take them into account so that the proceeding can flow logically.
ABOUT THE AUTHOR: Konstantin Pilkov
Konstantin Pilkov, MCIArb is a Head of International Arbitration Practice, Managing partner at the Cai and Lenard law firm in Kyiv, Ukraine.
He is a member of the Chartered Institute of Arbitrators, the German Institution of Arbitration (DIS), the Austrian Arbitration Association, the Swiss Arbitration Association (ASA), the Ukrainian Bar Association and the European Arbitration Chamber. Mr Pilkov is listed as an arbitrator at the International Commercial Arbitration Court at the European Arbitration Chamber, the court of arbitration at the First Securities Trading Association (PFTS Association). Konstantin Pilkov is Vice-chairman of the Court of Arbitration at PFTS Association. Certified insolvency practitioner.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.