Introduction to Arbitration - Swiss and International Perspectives

321 Pages·2001·1.07 MB·English

by  Marc Blessing

Swiss Commercial Law Series
Marc Blessing
Introduction to Arbitration –
Swiss and International
Perspectives
Helbing & Lichtenhahn
Swiss Commercial Law Series
edited by Nedim Peter Vogt
Volume 10
Introduction to Arbitration –
Swiss and International
Perspectives
by
Marc Blessing
Helbing & Lichtenhahn
Die Deutsche Bibliothek – CIP-Einheitsaufnahme
Blessing, Marc:
Introduction to Arbitration – Swiss and International
Perspectives / by Marc Blessing. [Hrsg.: Nedim Peter
Vogt]. – Basel ; Frankfurt am Main : Helbing und
Lichtenhahn, 1999
(Swiss Commercial Law Series; Vol. 10)
ISBN 3-7190-1838-5
All rights reserved. No part of this book may be reproduced by any means, or trans-
mitted, or translated into machine language without the written permission of the
publisher.
ISBN 3-7190-1838-5
Order number 21 01838
©1999 by Helbing & Lichtenhahn Verlag AG, Basle, Switzerland
Acknowledgments
I wish to express my gratitude to DrStephen V. Bertiwho made a first review of the
text. Subsequently, toUrs Watterwho worked on and finally prepared the lay-out of
this Introduction and who was kind enough to do a second reading in connection with
his editorial review. I am deeply indebted to him as well. Furthermore, my most sin-
cere thanks are owed to my associate Marie-Claude Rigaud, for her numerous
observations on the manuscript and her very careful review of the entire text.
I owe special thanks to two of my friends: first, to Babak Barin(presently Senior
Legal Adisor to the CRT), for his critical review on the Chapter regarding the Claims
Resolution Tribunal for Dormant Accounts in Switzerland, and second, to Deborah
Enix-Ross (Senior Legal Officer of the WIPO Arbitration and Mediation Center,
Geneva), for completing the Chapter on WIPO’s Internet Domain Name Process.
Finally, I would like to express my gratitude to my longstanding secretary, Elisabeth
Bollin. But for her patience in correcting and formatting the manuscript, this piece
would never have been completed.
Marc Blessing Introduction to Arbitration – Swiss and International Perspectives
Table of Contents
I. International Bibliography
1. Preface and Significance 11
2. Bibliography 12
3. Periodicals 60
4. Looseleaf and Series; CD-Rom 61
5. Swiss Legislative Materials 62
II. Swiss Tradition and Legal Culture
1. Tradition 63
2. Acknowledged Legal Culture 65
III. Brief Review of International Developments
1. The Principal Arbitral Institutions 67
a) Trade Associations 67
b) Maritime Arbitration 68
c) National and Bilateral Chambers of Commerce 68
d) The International Chamber of Commerce (ICC), Paris 69
e) London Court of International Arbitration (LCIA) 75
f) Chartered Institute of Arbitrators (CIArb) 76
g) China International Economic and Trade Arbitration Commission (CIETAC) 76
h) American Arbitration Association (AAA) 79
i) Vienna International Arbitral Centre 80
j) Stockholm Chamber of Commerce 81
k) International Federation of Commercial Arbitration Institutions (IFCAI) 82
l) International Council for Commercial Arbitration (ICCA) 82
m)Iran-US Claims Tribunal in The Hague (IUSCT) 84
n) The Gulf War Claims UN Compensation Commission in Geneva (UNCC) 85
o) Settlement of Disputes Under GATT/WTO 87
p) The Permanent Court of Arbitration in The Hague (“PCA”) 89
q) The International Court of Justice in The Hague: From the PCIJ to the ICJ 90
r) The Claims Resolution Tribunal for Dormant Accounts in Switzerland 92
2. The 1998 ICC Rules in a Comparative Perspective 94
a) Introduction 94
b) Request for Arbitration, Answer, Counterclaim [Articles 4 and 5 ICC 98 ⇔
Articles 3–5 ICC 75] 94
c) Effect of the Arbitration Agreement [Article 6 ICC 98 ⇔Article 8 ICC 75] 96
d) Constituting the Arbitral Tribunal [Articles 7–9 ICC 98 ⇔Article 2 ICC 75] 97
e) Multiparty Arbitration [New: Article 10 ICC 98] 98
f) Challenge of Arbitrators [Article 11 ICC 98 ⇔Article 2 (8) ICC 75] 100
g) Replacement of Arbitrators [Article 12 ICC 98 ⇔Article 2 (10)–(12) ICC 75] 100
h) Truncated Tribunal[New: Article 12 (5) ICC 98] 101
i) Transmission of the File to the Arbitral Tribunal [Article 13 ICC 98 ⇔Article
10 ICC 75] 102
j) Place of Arbitration [Article 14 ICC 98 ⇔Article 12 ICC 75] 102
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k) Rules Governing the Proceedings [Article 15 ICC 98 ⇔Article 11 ICC 75] 103
l) Equal Treatment [New: Article 15 (2) ICC 98] 103
m)Language of the Arbitration [Article 16 ICC 98 ⇔Article 15 (3) ICC 75] 104
n) Applicable Rules of Law [Article 17 ICC 98 ⇔Article 13 (3) ICC 75] 104
o) Terms of Reference [Article 18 ICC 98 ⇔Article 13 (1) ICC 75] 107
p) Establishing a Procedural Time-Table [New: Article 18 (4) ICC 98] 109
q) New Claims [Article 19 ICC 98 ⇔Article 16 ICC 75] 109
r) Establishing the Facts of the Case [Article 20 ICC 98 ⇔Articles 14 and
15 ICC 75] 110
s) Trade Secrets and Confidentiality [New: Article 20 (7) ICC 98] 112
t) Hearings [Article 21 ICC 98 ⇔Article 15 ICC 75] 112
u) Closing of the Proceedings [New: Article 22 ICC 98] 113
v) Conservatory and Interim Measures [Article 23 ICC 98 ⇔Article 8 (5) ICC 75] 113
w) Time-Limit for Rendering the Award [Article 24 ICC 98 ⇔Article 18 ICC 75] 115
x) Making of the Award [Article 25 ICC 97 ⇔Article 19 and 22 ICC 75] 115
y) Correction and Interpretation of the Award [New: Article 29 ICC 98] 116
z) Advance to Cover the Costs of the Arbitration [Article 31 ICC 98 and
Appendix III ⇔Article 9 ICC 75 and Appendix III] 117
aa) The Costs of the Arbitration [Article 31 ICC 98 ⇔Article 20 ICC 75] 118
bb) Modified Time-Limits [Article 32 ICC 98 ⇔Article 18 ICC 75] 119
cc) Waiver [New: Article 33 ICC 98] 119
dd) Exclusion of Liability [New: Article 34 ICC 98] 120
ee) General Rule [Article 35 ICC 98 ⇔Article 26 ICC 75] 120
ff) Concluding Remarks 120
3. The Major Conventions 121
a) The New York Convention of 1958 121
b) The 1961 European Convention 123
c) The ICSID Convention 1965 124
e) The Moscow Convention of 1972 125
f) The Inter-American Convention on International Commercial Arbitration 1975 126
g) The Riyadh Convention of 1983 127
4. The Major Influence of Institutional Arbitration Rules on the Development of
National Laws 127
5. The UNCITRALArbitration Rules 128
6. The UNCITRALModel Law 130
7. Level of Acceptance of the UNCITRALModel Law 132
8. Recent Reforms of Arbitration Acts in Europe 134
a) In General 134
b) England’s 1996 Arbitration Act 135
c) Germany 137
9. Review on Other Modernisations of National Legislations 138
a) In Australia, the Middle East and Africa 138
b) In Japan, Taiwan, Korea and Thailand 139
c) In the People’s Republic of China 140
d) In Latin America 140
e) New Arbitration Centres Outside Europe 142
f) AGrowth Industry? 142
10. ANew Era: Arbitration Based on Treaties (BITs, EDAs, NAFTA, Energy Charter) 143
a) Economic Development Agreements (“EDAs”) and other Bilateral Investment
Treaties (“BITs”) 143
b) The Lomé Conventions 145
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Marc Blessing Introduction to Arbitration – Swiss and International Perspectives
c) The North American Free Trade Agreement (“NAFTA”) 145
d) The 1994 Energy Charter Treaty 146
IV. Globalisation and Harmonisation
1. International Harmonisation in General 148
2. Harmonisation of International Arbitration 151
3. Reasons for the Upturn in International Arbitration 152
4. Sporadic Criticism and Scepticism 153
5. The “Specificity of International Arbitration” 154
V. Requirements and Expectations Regarding AModern Place of Arbitration
1. The Expectations of the Parties 158
a) An “Arbitration-Friendly” Environment 158
b) An Acceptable Legal Environment 159
c) The Parties’Own Legal Counsel 161
d) Cost Effectiveness and Confidentiality 161
e) Enforceability 161
2. The Lawyers’Expectations 161
3. The Arbitrators’Expectations 162
4. International Expectations Regarding Switzerland as a Place for Hosting
International Arbitration 163
VI. Legislative Developments in Switzerland
1. From Cantonal Law to the “Concordat” 164
2. The Successes – and Deficiencies – of the Concordat 165
a) Successes 165
b) Criticism and Shortcomings 165
c) The Concordat Remains Suitable for Domestic Arbitration Only 167
d) No Continued Subsidiary Application of the Concordat 168
3. The Origin of Chapter Twelve 170
4. The Principal Issues of the Parliamentary Debate 172
5. Why No Adoption of the UNCITRALModel Law? 176
VII. The Predominant Features of ChapterTwelve
1. General Characteristics 180
2. The Outstanding and Distinctive Characteristics in More Detail 181
a) Re Scope (Article 176) 181
b) Re Arbitrability (Article 177) 181
c) Re the Arbitration Agreement (Article 178) 183
(i) Article 178 (1) PIL: Requirement As To Form 183
(ii) No “Exchange” Required 184
(iii) Article 178 (2): Substantive Validity, Scope and Reach 185
(iv) Extension of the Arbitration Clause to Non-Signatories 186
(v) Under What Criteria Should Such Situations Be Adjudicated? 188
(vi) Group of Contracts; The So-called “Single/Uniform Business Transaction
Doctrine” 190
(vii) Claims in Tort 192
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(viii) The Trouble with Set-Offs 192
(ix) Regarding Article 178 (3) PIL: Separability 193
d) Re the Constitution of the Arbitral Tribunal (Articles 179/180) 193
e) Re the Arbitral Procedure (Article 182) 194
f) Re Interim and Conservatory Measures (Article 183) 195
g) Re Support From the State Judiciary (Article 185) 196
h) Re Award on Jurisdiction (Article 186) 196
i) Re Determination of the Governing Rules of Law (Article 187 (1)) 197
k) Re the Making of the Arbitral Award (Article 189) 202
l) Re the Finality of an Award and Grounds for Setting Aside (Article 190) 202
m)Re the Swiss Federal Supreme Court as the Sole Instance (Article 191) 203
n) Re the Possibility to Make an Exclusion Agreement (Article 192) 204
o) Re Enforcement of Foreign Arbitral Awards (Article 194) 204
3. Evaluation of the Swiss Solution – Does it Mark a Progress? 205
4. What Effect Does Chapter Twelve Have on Legal Practice? 205
5. Legal Certainty and Foreseeability 206
VIII. Determination of the Substantive Rules of Law
1. Choice of Law by the Parties 209
a) The Free Choice – In Theory and In Real Life 209
b) Quid, Where the Parties Cannot Reach Agreement on the Applicable Law? 210
c) General Principles of Law as a Corrective or Supplementary Order 211
2. The Subjective Approach: Researching the Hypothetical Will of the Parties 213
a) The Silence Might Be Particularly Significant 214
b) An Illustrative Case 215
3. The Objective Approach: The First Aspect Relating to the Applicable Conflict Rule 217
a) Introduction 217
b) What Are the Legal Parameters to Be Checked? 218
(i) In ad hoc Arbitration 218
(ii) In Institutional Arbitration 219
c) Four Different Solutions 220
d) The Old Doctrine: Applying the Conflict System of the lex fori 220
e) Applying the “Rule of Conflict Deemed Appropriate” 222
f) AVariant: The “Closest Connection Rule” 223
g) The Most Modern Solution: No Explicit Requirement 223
4. The Objective Approach: The Second Aspect Relating to the Substantive
(Rules of) Law 224
a) Law – or Rules of Law? 224
b) How to Evaluate the Two Regimes? 225
c) Regrets 226
IX. Impact of Mandatory Rules, Sanctions, Competition Laws
1. Introduction 228
2. 16 Cases from Recent Arbitral Practice 229
3. Different Categories of Mandatory Rules 233
a) First: As to their origin 233
b) Second: As to their policies and cultural values or social interests 234
4. Trade Sanctions and Embargoes in Particular 235
a) Introductory Note 235
b) Legal Justification of Sanctions 237
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Marc Blessing Introduction to Arbitration – Swiss and International Perspectives
c) The Sanctions Against Libya 237
d) Sanctions Regarding Ex-Yugoslavia 239
e) Criticism and EU Blocking Regulation As a Response 240
5. Exchange Control Regulations in Particular 243
6. The IMF Agreement 245
7. Competition Laws in particular 246
a) Avoidance of EU Competition Laws Through Arbitration in a Non-EU State
Such as Switzerland? 246
b) Types of Competition Law Issues Submitted to Arbitral Tribunals 250
(i) Cases and Issues under Article 85 (1) EC (now Article 81 (1) EC) 250
(ii) Cases and Issues under Article 85 (2) EC (now Article 81 (2) EC) 253
(iii) Cases and Issues under Article 85 (3) EC (now Article 81 (3) EC) 254
(iv) Cases and Issues under Article 86 EC (now Article (82) EC) 255
c) Applying Competition Laws “With ADistant Look” 256
d) Extraterritorial Application of Competition Laws by the EU Commission
and the ECJ 257
e) Private Law Remedies versus Administrative Sanctions 258
f) In Switzerland: Arbitrability Under the Cartel Law of 6 October 1995 259
8. Acts of State in Particular 259
9. Criteria Regarding the Application of Mandatory Rules 260
a) The Issue Before State Courts 260
b) The Issue Before Arbitral Tribunals 262
c) Regarding Arbitrability 262
(i) In Switzerland 263
(ii) In Other Countries 265
d) Regarding Substance 265
10.Legal Effects 268
a)As to the Substance 268
b)Mere Authority – or Duty to Apply Mandatory Rules even ex officio? 270
11. Concluding Remarks 270
X. Interim Relief and Discovery in International Arbitration
1. Interim Relief 273
a) Objectives of Interim Measures 273
b) Different Categories of Interim Measures 274
c) The Scope of Interim Measures 275
d) Who Has the Power? – Four Different Systems in National Laws 275
e) The Authority Under Institutional Arbitration Rules 277
f) Non-Exclusive Arbitral Jurisdiction of the Arbitral Tribunal 277
g) How to Evaluate Whether and to What Extent Interim Relief Should Be Granted? 278
h) Ex-parte Orders – AViolation of Due Process? 280
i) Pronouncing Interim Relief in the Form of an Arbitral Award 280
j) Binding Nature and Enforcement of Interim Measures by State Courts 281
k) The Provisions on Interim Relief in the 1998 ICC Rules and in the 1994
WIPO AR 282
l) The Problem of the Non-Existing Arbitral Tribunal – And the WIPO Answer 284
m)Topics for Further Reflection 285
2. Discovery of Documents 285
a) Discovery English Style / American Style? 285
b) Is Discovery Allowed / Available? 285
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c) Do Institutional Arbitration Rules Provide For, or Allow, Discovery? 286
d) Arbitral Practice 286
3. The IBARules of Evidence, of 1 June 1999 288
XI. Ad hoc Arbitration and Institutional Arbitration in Switzerland
1. Ad hocArbitration and UNCITRALArbitration Rules 290
2. The International Chamber of Commerce (ICC) and Other Foreign Institutions 290
3. Arbitration Under the Auspices of Swiss Chambers of Commerce 290
a) The Zürich Chamber of Commerce (ZCC) 290
b) The Basel Chamber of Commerce 291
c) The Geneva Chamber of Commerce 292
d) The Berne Chamber of Commerce 292
e) The Ticino Chamber of Commerce 292
f) Harmonisation Efforts and Project 292
g) The Swiss-American Chamber of Commerce 293
h) The German-Swiss Chamber of Commerce 293
4. The Tribunal Arbitral du Sport (“TAS”), Lausanne 294
5. The World Intellectual Property Organisation (WIPO) Arbitration Center, Geneva 295
XII. ADR (Alternative Dispute Resolution)
1. ADR: Is it an Entry Ticket to Paradise – or into a Better Mousetrap? 299
2. Grounds for Using ADR Methods and Their Advantages 300
3. The Most Important Institutional Rules 301
4. Requirements for the Mediator 302
5. Some Particular Characteristics of ADR Procedures 303
a) Confidentiality Agreement 303
b) Waiver Regarding the Statute of Limitations 303
c) So-called Caucus Sessions 303
d) Quidwhen the Mediation Procedure Does Not Succeed? 304
6. The Main Characteristics of ADR Compared to Arbitration 304
7. Essentially Preventive Methods 306
a) Partnering 306
b) Claims Appeals Committee 306
c) Disputes Review Board (DRB) 306
8. Essentially Resolutive Methods 308
a) Early Neutral Evaluation / Fact Finding 308
b) Expert Determination 308
c) Mini-Trial 310
d) Conciliation, Facilitation 311
e) Mediation in the Classical Sense 311
f) Mediator Directed Negotiation 311
g) Med-Arb 311
h) MEDALOA 312
9. The Challenge: New Requirements for Effective Communication 314
XIII. The Swiss Arbitration Association (ASA)
1. General. Conferences. Publications 317
2. International Orientation 318
3. Future Prospects 319
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