Negotiation Conciliation / mediation Arbitration Litigation

Arbitration is a method of dispute resolution involving one or more neutral third parties who are usually agreed to by the disputing parties and whose decision is binding.

1. Final, binding decision2. Party autonomy3. Confidentiality4. International recognition and enforcement

of arbitral awards

Arbitrability, - the situation that whether the dispute under the arbitration agreement could be settled by arbitration or not.

The 1958 New York Convention states as follows: “each contracting state shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any difference which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.”

“recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that: 1) the subject matter of the difference is not capable of settlement by arbitration under the law of that country, or 2) the recognition or enforcement of the ward would be contrary to the public policy of that country.”

In France, Civil Code – “one can arbitrate with respect to all rights of which one can dispose freely.” ”one cannot submit to arbitration questions of status and capacity of persons, questions relative to divorce and separation, or questions respecting controversies that concern public entities or public establishments and more generally any matter that concerns the public order. ”

In china, according to the 1994 Arbitration Law, contractual disputes between citizen of equal status, legal persons and other economic organizations and disputes arising from property rights may be put to arbitration. And the following disputes can not be put to arbitration : 1) disputes arising from marriage, adoption, guardianship, bringing up of children and inheritance 2) disputes that have been stipulated by law to be settled by administrative organs.

International commercial arbitration is the process of resolving business disputes between or among transnational parties through the use of one or more arbitrators rather than through the courts.

1. ad hoc arbitration 2. institutional arbitration

Fist adopted in UNCITRAL in 1985. Commercial – a broad interpretation of commerciality should

be adopted: any international arbitration between companies where the dispute is economic in character will be considered to be commercial.

International – an arbitration is international is: 1. the parties to an arbitration agreement have, at the time of

the conclusion of that agreement, their places of business in different States, or

2. one of the following places is situated outside the State in which the parties have their places of business: i) the place of arbitration if determined in, or pursuant to, the arbitration agreement ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or

3. the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.

ICA – ICC international Court of Arbitration ICSID – international centre for settlement

of investment dispute WIPO arbitration and Mediation Centre London Court of International Arbitration The HK international Arbitration Centre China International Economic and Trade

Arbitration Commission.

CIETAC recommends the following model arbitration clause

“Any dispute arising from or in connection with this Contract shall be submitted to the China International Economic and Trade Arbitration Commission for arbitration which shall be conducted in accordance with the Commission’s arbitration rules in effect at the time of applying for arbitration. The arbitral award is final and biding upon both parties.”

The parties may also stipulate the dollowing matter in the arbitration clause:

1. the place of arbitration and hearing2. the language of the arbitration 3. the number of arbitrations4. the nationality of arbitrators5. the method of selection of arbitrators6. the applicable law of the contract 7. the application of ordinary procedure or

summary procedure.

Arbitration agreement is a contract to refer a present or future legal dispute to arbitration. Such agreements are of two kinds, those referring an existing dispute to arbitration and those relating to disputes that may arise in the future.

1. arbitration agreement is an agreement by the parties to submit to arbitration all to certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

2. The arbitration agreement shall be in writing. 3. An arbitration agreement is in writing if its

content is recorded in any form. Whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means.

4. The requirement that an arbitration agreement be in writing is met by an electronic communication if the information contained therein is accessible so as to be usable for subsequent reference. 5. An arbitration agreement is in writing if it is contained in an exchange of statement of claim and defense in which the existence of an agreement is alleged by one party and not denied by the other. 6. The reference in a contract to any document containing an arbitration clause constitutes an arbitration agreement in writing, provided that the reference is such as to make that clause part of the contract.

An arbitration agreement shall contain the following: 1) the expression of application for arbitration 2) matters for arbitration 3) the arbitration commission chosen

An agreement for arbitration shall be invalid in one of the following case: 1) the matters agreed for arbitration exceed the scope of arbitration provided by law 2) agreements concluded by people being incapable or restricted in civil acts 3) an agreement forced upon a party by the other party by means of coercion.

The functions of arbitration agreement include:a) Arbitration agreement is the legal basis for the

arbitration settlement of international commercial disputes, and is binding upon both parties.

b) Arbitration agreement is the warranty for arbitration authorities and arbitrators to obtain the jurisdiction over the disputes therein specified.

c) A valid arbitration agreement eliminates the jurisdiction of the court over relative disputes. Once there is an arbitration agreement, no party to the agreement can bring the dispute to the court anymore.

d) A valid arbitration agreement is the warranty for the future arbitral award to be recognized and enforced, domestically and abroad.

1958 New York Convention states, - to recognize and enforce an arbitration award, there should be a valid arbitration agreement.

validity of arbitration clause china – in settling disputes through

arbitration , an agreement to engage in arbitration should first of all be reached by parties concerned upon free will. Without such an agreement, the arbitration commission shall refuse to accept the application for arbitration by any one single party.

seperability and Law governing the arbitration agreement

UNCITRAL Model Law – the arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract.

China – the effect of an agreement for arbitration shall stand independently and shall not be affected by the alteration, dissolution, termination or invalidity of a contract. An arbitration tribunal has the right to establish the validity of a contract.

application and acceptance To apply:1. There is an agreement for arbitration2. There are specific requests for arbitration

and facts and reasons3. The matters shall fall into the limits of the

authority of the arbitration commission.

An arbitration tribunal may be composed of three arbitrators or one arbitrator. In the case of three arbitrators, there should be a chief arbitrator.

Choice of arbitrators

Withdrawal of arbitrators1) an arbitrator shall be withdrawn and the parties concerned have

the right to request withdrawal, whereas:a) the arbitrator is a party involve in the case or a blood relation or

relative of the prties concerned or their attorneys.b) The arbitrator has vital personal interests in the case. c) The arbitrator has other relations with the parties or their

attorneys involved in the case that might effect the fair ruling of the case.

d) The arbitrator meets the parties concerned or their attorneys in private or has accepted gifts or attended banquets hosted by the parties concerned or their attorneys.

2) In requesting or withdrawal, the parties concerned shall state reasons before the first hearing of the tribunal. If the reasons are known only after the first hearing, they may be stated before the end of the last hearing.

3) The withdrawal of an arbitrator of an arbitrator shall be decided upon by the chairman of the arbitration commission. Whereas the chairman of the arbitration commission serves as an arbitrator, the withdrawal shall be decided upon collectively by the arbitration commission.

three questions will arise: 1) what are the conditions required for recognition or enforcement? 2) What procedure should be expected? 3) What defence might be available?

Legal rules in the New York Convention ◦ recognition and enforcing under the principle of national

treatment Each contracting state shall recognize arbitral

awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which the Convention applied than are imposed on the recognition or enforcement of domestic arbitral awards.

◦ documents to supply to obtain the recognition and enforcement

the duly authenticated original award or a duly certified copy

the original agreement or a duly certified copy

1. the parties to the agreement were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made, or

2. the party against whom the ward is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case, or

3. the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decision on matters beyond the scope of the submission to arbitration, provided that, if the decision on matters submitted to arbitration can be separated from those not so submitted, that part of the ward which contains decisions on matters submitted to arbitration may be recognized and enforced, or

4. the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or failing such agreement, was not in accordance with the law of the country where the arbitration took place, or

5. the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which , or under the law of which , the award was made.