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Arbitral Tribunal : Establishment and Organisation Deva & CurtisLitigation vs Arbitration = Arbitration to LitigationAd hoc or Institutional ? Sole arbitrator or multiple arbitrator (ICC 3 arbitrators) ?

CurtisRespondentWhen is an Arbitral Tribunal EstablishedWhen the decision to arbitrate is made i.e Arbitration clause .Form of notice or request to arbitrate is made .Next step is to establish an arbitral tribunal .It must be noted that an arbitral tribunal must be brought into existence before it can exercise jurisdiction over dispute and parties .No decision can be made until tribunal is established.EstablishmentEstablishing an arbitral tribunal may be a lengthy process.

Selecting an arbitral tribunal is another important step.

Parties are free to choose their own arbitrators

if no choice was made ?

Sole arbitral or multi-arbitral tribunals ?

An arbitral Tribunal may consist of one or more arbitrators depending on the agreement between the parties

The ICC rules provide that were the number of arbitrators is not specified , a sole arbitrator will be appointed unless the dispute warrants the appointment of three arbitrators.

There several different methods to appointing an arbitral tribunal :

Agreement of parties

Arbitral institution

Listing system

Existing arbitrators

Professional Institutions

Trade Institutions

National CourtOrganisation of Arbitral Tribunal Arbitrations generally require carefully planning and organisation .

Meetings and Hearings are to be carried out

Hearing dates are to be fixed

Venues where the arbitration is to take place .

Ad Hoc Arbitration or Institutional Arbitration?ad hoc arbitration is one which is conducted pursuant to the rules agreed by parties.

parties are free to work out and establish their own procedures

there has to be equality

each party is to be allowed a reasonable opportunity to present case

Institutional arbitration is one that is administered by specialist arbitral institution under its own rules of arbitration. International Arbitration Institutions (administrative organization)

ICC Arbitration Rules a procedure lead to a binding decision between parties in disputes, from a neutral and impartial arbitral tribunal, which is susceptible to enforcement pursuant to both domestic arbitration laws and international treaties such as the 1958 New York Convention, UNCITRAL Rules

Importance of Arbitration Rules.Selection procedures Institution and Tribunal

- Choice of institution to administer.- Local court recognition and enforcement of award.- ICC involves supervision- LCIA is kind administrator.- LCIA after selection, autonomous.- ICC subjected to terms of reference and degree scrutiny of the award by the ICC international court.

- Role of the default mechanism, ICC Rules Article 11,12 ,13, 14, 15, 21

- Lawyers vs Non-Lawyers. (if all are non-lawyers, else all are lawyers)

- Special professional qualifications(Industry)

- Nationality

- Possible to appoint same nationality arbitrators. But Chairman is non-nationality. Party appointed arbitrators selects the chairman.

- Neutrality of Party appointed arbitrators.

- AAA. Direct or indirect financial or personal interest in the outcome of the arbitration. And Any known existing or past financial, personal, business relationship

Neutrality vs NationalityLegal FrameworkContract with an Arbitration ClauseArbitration agreementArbitration rulesArbitration lawConventionsArticle 11General Provisions1 Arbitrator must be and remain impartial and independent of the parties involved in the arbitration.2. any circumstances that could give rise to reasonable doubts as to the arbitrators impartiality. The prospective arbitrator shall disclose in writing to the Secretariat any facts or circumstances which might be of such a nature as to call into question the arbitrators independence in the eyes of the parties, as well as any circumstances that could give rise to reasonable doubts as to the arbitrators impartiality. The Secretariat shall provide such information to the parties in writing and fix a time limit for any comments from them.

4 The decisions of the Court as to the appointment, confirmation, challenge or replacement of an arbitrator shall be final, and the reasons for such decisions shall not be communicated.

6.Insofar as the parties have not provided otherwise, the arbitral tribunal shall be constituted in accordance with the provisions of Articles 12 and 13Article 12Constitution of the Arbitral Tribunal Number of Arbitrators1 The disputes shall be decided by a sole arbitrator or by three arbitrators.5 Where the dispute is to be referred to three arbitrators, the third arbitrator, who will act as president of the arbitral tribunal, shall be appointed by the Court, unless the parties have agreed upon another procedure for such appointment, in which case the nomination will be subject to confirmationpursuant to Article 13.Article 13Appointment and Confirmation of the Arbitrators 1 In confirming or appointing arbitrators, the Court shall consider the prospective arbitrators nationality, residence and other relationships with the countries of which the parties or the other arbitrators are nationals and the prospective arbitrators availability and ability to conduct the arbitration in accordance with the Rules. The sameshall apply where the Secretary General confirms arbitrators pursuant to Article 13(2).2 The Secretary General may confirm as coarbitrators, sole arbitrators and presidents of arbitral tribunals persons nominated by the parties or pursuant to their particular agreements, provided that the statement they have submitted contains no qualification regarding impartiality or independence or that a qualified statement regarding impartiality or independence has not given rise to objections. Such confirmation shall be reported to the Court at its next session. If the Secretary General considers that a co-arbitrator, sole arbitrator or president of an arbitral tribunal should not be confirmed, the matter shall be submitted to the Court.5 The sole arbitrator or the president of the arbitral tribunal shall be of a nationality other than those ofthe parties. However, in suitable circumstances and provided that none of the parties objects within thetime limit fixed by the Court, the sole arbitrator or the president of the arbitral tribunal may be chosenfrom a country of which any of the parties is a national.Article 14Challenge of Arbitrators1 A challenge of an arbitrator, whether for an alleged lack of impartiality or independence, or otherwise, shall be made by the submission to the Secretariat of a written statement specifying the facts and circumstances on which the challenge is based. Article 15Replacement of Arbitrators1 An arbitrator shall be replaced upon death, upon acceptance by the Court of the arbitrators resignation, upon acceptance by the Court of a challenge, or upon acceptance by the Court of a request of all the parties.

2 An arbitrator shall also be replaced on the Courts own initiative when it decides that the arbitrator is prevented de jure or de facto from fulfilling the arbitrators functions,Article 21Applicable Rules of Law3 The arbitral tribunal shall assume the powers of an amiable compositeur or decide ex aequo et bono only if the parties have agreed to give it such powers.real bite1) Reliance Industries Ltd. India 2) Niko Resources Inc, Cayman Islands, British Virgin Islands3) BP Inc, England and walesUnion of India, Ministry of PetroleumPetitionerRespondentIssue : Petitioners arbitrator wanted to appoint foreign national as third arbitrator, Respondents arbitrator wanted an Indian national to be third arbitrator.

This petition has been filed under Section 11(6) of the Arbitration Act, 1996, with a prayer forappointment of the third and the presiding arbitrator, as the two arbitrators nominated by theparties have failed to reach a consensus on the appointment of the third arbitrator. UNCITRAL Rules - Indian Arbitration and Conciliation Act, 1996 NELP PSC CJI - Arbitral Tribunal - Arbitration Proceedings - Arbitration Agreement - Notice of Arbitration UOI - Indian Conditions - Indian Law Foreign ArbitratorWhat is your decision?The Honble Supreme Court of India (Supreme Court) ruled that in an international commercial arbitration if the two nominated arbitrators failed to reach a consensus on the appointment of the third/presiding arbitrator, considerations of neutrality and impartiality are of great significance. The Supreme Court observed that considerations of nationality were not mandatory while making a decision on the appointment of the third arbitrator under Section 11(6) and 11(9) of the Arbitration and Conciliation Act, 1996 (Act).

UOI submitted that since the parties did not choose to have a foreign national to be appointed as the third arbitrator in Article 33.6, therefore, the parties intentionally chose not to make Section 11(1) of the Act6 applicable to them and instead agreed to proceed under Section11(2)7 because they agreed to appoint an arbitrator without requiring him to be of any foreign nationality. not only legally untenable, but also undesirable, because as both BP and NIKO were multi-national companies, with presence/business connections in about 80 countries.

Art. 33.533.5 Any Party may, after appointing an arbitrator, request the other Party(ies) in writing to appoint the Second arbitrator. If such other Party fails to appoint an arbitrator within thirty (30) days of receipt of the written request to do so, such arbitrator may, at the request of the first Party, b e appointed b y the Chief Justice of India or b y a person authorised b y him within thirty (30) days of the date of receipt of suchrequest, from amongst persons who are not nationals of the country of any of the Parties to the arbitration proceedings.

Art. 33.633.6 If the two arbitrators appointed b y or on behalf of the Parties fail to agree on the appointment of the third arbitrator within thirty (30) days of the appointment of the second arbitrator and if the Parties do not otherwise agree, at the request of either Party, the third arbitrator shall b e appointed in accordance with Arbitration and Conciliation Act, 1996.

Finally, the Supreme Court emphasized that the trend of the third arbitrator/presiding officer of a neutral nationality being appointed was now more or less universally accepted under the arbitration acts and arbitration rules in different jurisdictions and accordingly appointed Honble James Spigelman, former Chief Justice of New South Wales as the third arbitrator, from a neutral jurisdiction.

However, during the proceedings, the Supreme Court observed that it would not rely on suggested arbitrators of the Petitioners as well as the Respondent. Consequently, the Supreme Court by way of an Order dated April 2, 2014 has recalled the appointment of Honble James Spigelman and has noted that the substitute arbitrator shall be shortly appointed by a separate order.

Through the instant applications, a prayer has been made for appointing the third arbitrator, who shall be the Chairman of the international commercial arbitral proceedings between the parties. Learned Solicitor General of India representing the Union of India states, that he would have no objection, if the nominated third arbitrator, is a person who has been a Judge of a Court. It is also submitted, that subject to the above preference, the respondent has no objection to any nomination that may be made by this Court. A long list of names has been handed over to me during the course of hearing. From the list, I nominate the Hon'ble Michael Kirby AC CMG as the third arbitrator, who shall be the Chairman of the international commercial arbitral proceedings

10Case study no.1Issues that Might arise.1.The parties designing their own procedures?

2.Designating their Mutual Friend Ben Beardsley as permanent arbitrator? Does he have to be educated? Does he have to have experience

3. Discussing : (a)the Merits of the case with ben, (b) over a glass of wine ?

4. Would decision be Binding ?

An Independent and Impartial arbitrator must not communicate ex-parte with the parties regarding the merits of the case.

All communications should be reduced to writing and furnished to the other party.

There should never be a discussion regarding the merits of the case.

would the decision be binding on the parties even after the arbitrator discussed the merits of the case?

there are a lot of factors to take into account : the arbitrator might not be available at the time the dispute actually occurs .

Issue 3Issue 4Case study no.2Company A (United States) and Company B (Saudi Arabia) enter into a contract for Company A to service and repair Company Bs jet aircraft in Saudi Arabia. There is a choice of law clause in the contract requiring that the interpretation, application and enforcement of the contract shall be governed by English law. The contract includes an arbitration agreement requiring arbitration in London under the ICC rules of arbitration. The arbitration agreement requires each party to select an arbitrator and then for the two selected arbitration to appoint the chair of the arbitral tribunal. After a dispute arises under the contract, Company A and Company B each appoint arbitrators. Party A selects an American attorney. Party B selects a retired judges from Saudi Arabia. The party appointed arbitrators agree to select Fiona Fairness, a well-respected international arbitrator from the United States. Ms Fairness discloses that she regularly attends meetings of the USCIB Arbitration Subcommittee and that she is one of twenty members of the USCIB International Arbitration Subcommittee of which she and Party As appointed arbitrator and Party As counsel are members.

Company B challenges the appointment of Ms Fairness on the grounds of her relationship with Party As arbitrator and Party As counsel. Company B also challenges Ms Fairness on the grounds that she is the same nationality as Party A.

1) How should the ICC Court rule on Company Bs challenge?

2) Assuming the ICC Court rules adversely/against Company B, what are Company Bs options?

Neutrality vs NationalityIssuesRemedy (Please consult ICC Rules Articles 11 and 13.)U.S.Council for International BusinessA (US) Aircraft service provider. American AttorneyB (Saudi Arabia) Saudi AttorneyEnglish Law.Arbitration in LondonICC Rules of RegulationOwn Arbitrators Fiona Fairness, Arbitrator from US. (Member of USCIB International Arbitration Subcomittee, Counsel or members, same nationality) Nationality is not a problem, but known or unknown interest in relationship.

AAA. Person who required to serve as arbitrators 1) Direct or indirect financial or personal interest in the outcome of the arbitration.2) Any known existing or past financial, personal, business relationship3) ICC Rule Art 11 30 days for challenge. Art 12 ICC Court may replace Arbitrator on its own

1) ICC court rule. Appointment of Arbitrator. Objected/Challenged by either of the party. Court shall replace the Arbitrator. 2) Adversely(not if favour of) to Company B, Company B's options.? File litigation before the national court.

12Thank you