Tag Archives: commercial arbitration

‘Bare’ arbitration clauses under the UNCITRAL Model Law on International Commercial Arbitration

By Prof Jonathan Hill, Professor of Law (University of Bristol Law School).

As every student of international commercial arbitration ought to know, an arbitration agreement should not only impose on the parties a binding obligation to refer a certain dispute (or certain types of dispute) to arbitration but also, as a minimum, indicate the place (or seat) of arbitration and provide a mechanism for the appointment of the arbitral tribunal. Unfortunately, the drafting of arbitration clauses in commercial contracts often leaves much to be desired; in a case involving a badly-drafted arbitration clause, disputing parties who are unable to resolve their disputes by negotiation may find themselves getting bogged down in one or more of the procedural problems to which pathological arbitration clauses frequently give rise.

Particular difficulties may be posed by so-called ‘bare’ clauses – that is, clauses which merely provide for submission of disputes to arbitration without specifying the place of the arbitration, the number of arbitrators or the method for establishing the arbitral tribunal. If, once a dispute has arisen, the parties are unable to agree on the appointment of an arbitral tribunal, the claimant may encounter practical difficulties in activating the arbitration machinery and getting the arbitral tribunal established. Continue reading

The law governing an arbitration clause

By Prof Jonathan Hill, Professor of Law (University of Bristol Law School).

A leading commentator has observed that ‘[t]he choice of the law applicable to an international commercial arbitration agreement is a complex subject’ (Born, International Commercial Arbitration (2nd edn, 2014) p 472). This complexity is reflected by the case law illustrating that the courts of different countries adopt different approaches to certain common scenarios. One area of divergence is the case where parties to a contract containing an arbitration clause choose state A as the seat of arbitration, but the law of state B as the law governing the matrix contract: which law governs the arbitration clause – the law of the seat or the law of the country chosen to govern the substantive contract?

Some legal systems, influenced in part by the doctrine separability (according to which a contractual arbitration clause is, conceptually, treated as a contract separate and independent from the matrix contract) and article V.1.a of the New York Convention of 1958, take the view that, in the absence of an express choice by the parties of the law applicable to the arbitration clause, the law of the seat should govern questions of material validity. English law, however, has never taken this view – although, arguably, the Court of Appeal came close to doing so in C v D [2007] EWCA Civ 1282. Continue reading

International Commercial Arbitration: the removal of arbitrators for apparent bias

By Prof Jonathan Hill, Professor of Law (University of Bristol Law School).

iba1It is a fundamental principle of arbitration law that arbitrators – whether appointed by one of the arbitrants, by the arbitrants jointly or by a third party (such as an arbitral institution or a national court) – must be impartial. This principle is enshrined in institutional arbitration rules and national legislation. It is, therefore, not surprising that, when doubts as to an arbitrator’s impartiality arise, one of the arbitrants will seek to have the arbitrator removed. The importance of the parties’ right to challenge an arbitrator on the basis of justifiable doubts as to the arbitrator’s impartiality is illustrated by the recent decision of the High Court in Sierra Fishing Co v Farran [2015] 1 All ER (Comm) 560. The decision is notable in two respects.

The significance of the IBA Guidelines on Conflicts of Interest in International Arbitration

Because, in international cases, arbitrants and arbitrators often come from different countries and different legal traditions, they may have different conceptions of what types of circumstance give rise to a conflict of interests and different assumptions about how any such conflict might be resolved. The IBA guidelines, which were originally formulated in 2004 and have been subsequently revised (most recently in 2014), aim to assist the arbitration community by providing a typology of different kinds of conflict and a system for grading their seriousness. The guidelines list a wide variety of professional, financial and personal connections and place them in three lists: red (split into waivable and non-waivable); orange (waivable); and green (irrelevant). Since their inception, the guidelines have frequently been used by arbitrators (in assessing what circumstances need to be disclosed prior to appointment, or thereafter) and arbitral institutions (when determining challenges under institutional rules).

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