YAR - Young Arbitration Review - Edition 10

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2011. YAR - Young Arbitration Review All rights reserved.
YOUNG ARBITRATION REVIEW

Under40 International Arbitration Review
YAR
www.yar.com.pt
[PREFACE - SOME LIKE IT HOT] by Jos Miguel Jdice [INVESTMENTS AND QUANTUM METHODOLOGY IN THE LINE OF FIRE LESSONS FROM ROMPETROL GROUP NV VS ROMANIA] by Robert Rothkopf [NEIGHBOURS FRIENDLY PACT ON DISPUTE RESOLUTION] by Veeraraghavan Inbavijayan and Kirthi Jayakumar [THE AFTERMATH OF THE REVOLUTION: AN ASSESSMENT OF THE COMPATIBILITY OF THE TUNISIAN LAW FOR INTERNATIONAL ARBITRATION WITH GENERAL CONTEMPORARY PRACTICE IN INTERNATIONAL COMMERCIAL ARBITRATION] by Henry Clarke [MOTIVATION OF ARBITRAL AWARDS: A FEW NOTES] by Duarte Gorjo Henriques [28 USC 1782: AN AMERICAN WINGMAN FOR INTERNATIONAL ARBITRATION DISPUTES] by Andr Pereira da Fonseca [THE 2010 REVISION OF THE ARBITRATION RULES OF THE CHAMBER OF ARBITRATION OF MILAN] by Chiara Catti [THE LONG AWAITED PORTUGUESE MEDIATION LAW FUNDAMENTAL PRINCIPLES] by Thomas Gaultier [YAR BRINGS ICC YAF TO PORTUGAL FOR THE FIRST TIME] by Pedro Sousa Uva and Gonalo Malheiro [INTERIM RELIEF IN INTERNATIONAL ARBITRATION: EMERGENCY ARBITRATOR PROVISIONS] by Steven P . Finizio and Jeremy Bocock [CONCURRENT POWERS BETWEEN ARBITRAL TRIBUNALS AND STATE COURTS REGARDING INTERIM MEASURES] Sofia Martins and Miguel Oliveira Martins [ARBITRAL TRIBUNALS AND STATE COURTS: PARTNERS OR COMPETITORS?- SOME REMARKS ON PRELIMINARY ORDER FROM A PORTUGUESE LAW PERSPECTIVE] by Porfrio Moreira [LEARNING TO DEAL WITH DIFFERENT LEGAL SYSTEMS. TAKING OF EVIDENCE IN INTERNATIONAL COMMERCIAL ARBITRATION] by Luis Fernando Guerrero [STATE COURT ASSISTANCE OF ARBITRAL AWARDS ON THE TAKING OF EVIDENCE UNDER THE PORTUGUESE ARBITRATION LAW] by Pedro Sousa Uva [GETTING TO KNOW ABEARB A BIT BETTER] By Associao Brasileira de Estudantes de Arbitragem.
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EDITION 10 JULY 2013
YAR
DIRECTORS Pedro Sousa Uva Gonalo Malheiro PREFACE Jos Miguel Jdice
AUTHORS Robert Rothkopf Veeraraghavan Inbavijayan Kirthi Jayakumar Henry Clarke Duarte Gorjo Henriques Andr Pereira da Fonseca Chiara Catti Thomas Gaultier Pedro Sousa Uva Gonalo Malheiro Steven P. Finizio Jeremy Bocock Sofia Martins Miguel Oliveira Martins Porfrio Moreira Luis Fernando Guerrero Associao Brasileira de Estudantes de Arbitragem EDITING Rita Pereira
SUBSCRIPTIONS To subscribe to YAR Young Arbitration Review, please contact young.arbitration.review@gmail.com Annual subscription: 200
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[ARTICLES]
PREFACE - SOME LIKE IT HOT by Jos Miguel Jdice 1 - INVESTMENTS AND QUANTUM METHODOLOGY IN THE LINE OF FIRE LESSONS FROM ROMPETROL GROUP NV VS ROMANIA by Robert Rothkopf 2 - NEIGHBOURS FRIENDLY PACT ON DISPUTE RESOLUTION by Veeraraghavan Inbavijayan and Kirthi Jayakumar 3 - THE AFTERMATH OF THE REVOLUTION: AN ASSESSMENT OF THE COMPATIBILITY OF THE TUNISIAN LAW FOR INTERNATIONAL ARBITRATION WITH GENERAL CONTEMPORARY PRACTICE IN INTERNATIONAL COMMERCIAL ARBITRATION by Henry Clarke 4 - MOTIVATION OF ARBITRAL AWARDS: A FEW NOTES by Duarte Gorjo Henriques 5 - 28 USC 1782 AN AMERICAN WINGMAN FOR INTERNATIONAL ARBITRATION DISPUTES by Andr Pereira da Fonseca 6 - THE 2010 REVISION OF THE ARBITRATION RULES OF THE CHAMBER OF ARBITRATION OF MILAN by Chiara Catti 7 - THE LONG AWAITED PORTUGUESE MEDIATION LAW - FUNDAMENTAL PRINCIPLES by Thomas Gaultier
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[ARTICLES]
REPORT ON ICC YAF & YAR EVENT IN LISBON MAY 16 2013 8 - YAR BRINGS ICC YAF TO PORTUGAL FOR THE FIRST TIME by Pedro Sousa Uva and Gonalo Malheiro 9 - INTERIM RELIEF IN INTERNATIONAL ARBITRATION: EMERGENCY ARBITRATOR PROVISIONS by Steven P. Finizio and Jeremy Bocock 10 - CONCURRENT POWERS BETWEEN ARBITRAL TRIBUNALS AND STATE COURTS REGARDING INTERIM MEASURES by Sofia Martins and Miguel Oliveira Martins 11 - ARBITRAL TRIBUNALS AND STATE COURTS: PARTNERS OR COMPETITORS?- SOME REMARKS ON PRELIMINARY ORDER FROM A PORTUGUESE LAW PERSPECTIVE by Porfrio Moreira 12 - LEARNING TO DEAL WITH DIFFERENT LEGAL SYSTEMS. TAKING OF EVIDENCE IN INTERNATIONAL COMMERCIAL ARBITRATION by Luis Fernando Guerrero 13 - STATE COURT ASSISTANCE OF ARBITRAL AWARDS ON THE TAKING OF EVIDENCE UNDER THE PORTUGUESE ARBITRATION LAW by Pedro Sousa Uva 14 - GETTING TO KNOW ABEARB A BIT BETTER By Associao Brasileira de Estudantes de Arbitragem
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[PREFACE]
SOME LIKE IT HOT...

By Jos Miguel Jdice
Arbitral Tribunals are different animals as compared with Judicial Courts. This does not intend to mean that Tribunals are more qualified technically, specialized, efficient, fact specific, pragmatic, open minded and business oriented, let alone less prone to formal decision that dont bring peace to the parties conflict once and for all. This is often true, albeit the experience of judges, their independence and impartiality, the honesty, of the very large majority, create at least in Portugal a high pattern that arbitrators should use for inspiration. The point here is clearly another and is actually related to counsel behavior in front of Judges or Arbitrators. As a rule of thumb, if counsel thinks that Judges and Arbitrators (at least in the international arena) are the same species of professionals with similar or equivalent reactions, probably they are missing the point and making mistakes that might jeopardize or complicate even a strong case. Arbitrators have diversified past experiences, quite often A Judge is a professional that begins his/her career very young, quite often without any experience of different ways of practicing law, insulated from lawyers, and they dont want to face appeal court decisions that would be avoided if they accepted all the lawyers behavior albeit time consuming, irrelevant or confrontational. They are normally prepared to accept waste of time, tricks and fight on peripheral aspects of the case as for them this is lawyers way and when made in a sophisticated mood even brings good moments to enjoy and remember, as if it was theatre and therefore the show requested acting. They have a fixed salary and see no advantage to an entrepreneurial approach to decisions and are proud of it. When faced with an imbalance of quality and preparation between each side of the bench they instinctively protect the weaker party and tend to disregard good advocacy as a litmus test for each partys case.
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work or have worked as advocates, are business oriented, are horrified with waste of time, have an agenda full of commitments, are neither paid by fixed salary (as judges) nor by the hour (as lawyers). They have a vested interest in being efficient, prefer to solve the case once and for all, and are not willing to find a formal way out that provides for an award but keeps the conflict alive and unsolved. And they are older and quite often with an ego big enough to be unprepared to accept confrontation, without sound reasons, with younger lawyers. They know by heart the usual counsels tricks, are familiar with dilatory maneuvers, expect that well remunerated professionals will be very well prepared and dont consider his/ her duty to protect the possible weaker party or the one that has been crazy enough not to appoint qualified and experimented lawyers. They are trained to separate what is really nuclear for the decisions from the paraphernalia of details and peripheral issues, that clients press counsel to consider, that have been from a personal point of view outrageous but have almost nothing to do with what is at stake. However, counsels in arbitration - as men, so the novel says - come from Mars. The cursus honorum as a rule begins with litigation in national courts, where the name of the game is fighting, protesting, objecting, wasting time, defending the indefensible, pressing the judges, appealing against his/her decisions until they manage to have the judge paralyzed and prepared to accept anything that the lawyers pretends, working for the gallery or for the pleasure of the unprepared client. As if this was not enough, Judges know that they risk having their decisions annulled by appeal courts, and therefore take all the care to avoid any small mistake that will bring a black ball to his/her career.
When these lawyers come to the arbitration arena, they tend to think of arbitrators the same that they use to think of judges, forgetting all the differences mentioned above, let alone the fact that arbitral awards are not appealable and setting aside is almost impossible unless due process has not been respected. And quite often these lawyers begin making the usual mistakes, jeopardizing the case, creating bad will, confusing the arbitrators about strong points they could have evidenced for the case by mixing them with irrelevant ones, and letting the other side to make all the possible points by being just tough, professional and focused, and not histrionic, aggressive and plainly out of touch. Yes, some like it hot. And normally Clients love it, as they look to lawyers as gladiators or mercenaries (well) paid to fight and are not prepared to understand restraint, coolness, efficiency. Client enjoy the smell of blood when confronted and lawyers are normally more than happy to deliver. If in the end it turns wrong, the judge was, inevitably, incompetent (but arbitrators have been in a way or another nominated by lawyers). So, my good Colleagues, do as you like it. Have it hot. Work for the audience. Provide fresh blood and adrenaline to your Client. And you may finally receive what you deserve
Jos Miguel Jdice1 Lisbon, June 2013
1- Founding Partner and Head of Arbitration (PLMJ, Lisbon), Visiting Associate Professor of Universidade Nova (Lisbon), international arbitrator, member of ICC International Court of Arbitration, of the ICSID Roster of Arbitrators, Board of Directors of Club Espaol de Arbitraje and Associao Portuguesa de Arbitragem.
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INVESTMENTS AND QUANTUM METHODOLOGY IN THE LINE OF FIRE LESSONS FROM ROMPETROL GROUP NV VS ROMANIA
By Robert Rothkopf
The recent Rompetrol Group NV v Romania award provides important lessons for investors as to (1) when State conduct against individual company officers rather than the claimant investor itself might constitute a breach of investment treaty protections; and (2) how only partial success on liability might collaterally damage proof of quantum if an all or nothing methodology is used. Rompetrol claimed, inter alia, that the arrest, detention, criminal investigations and wire-tapping of its directors constituted State-sponsored harassment that breached BIT guarantees enjoyed by its investment. The Tribunal held that the State conduct directed against the company officers had to have a sufficiently close link to the investment or investor to fall within the zone of the treatys protection. The requisite connection was found in relation to certain elements of Romanias conduct which amounted to a pattern of disregard for the rights of Rompetrols employees and constituted a breach of Rompetrols right to fair and equitable treatment. The partial success on liability ultimately unravelled Rompetrols submissions on economic damages, given that the quantum
methodology relied on the assumption that all of the acts comprising Romanias criminal investigations were breaches of the investment treaty. The award raises interesting questions regarding the balance between a States legitimate interests in tackling crime and the investors treaty rights, noting future tribunals likely sensitivity to allegations that the arbitration itself is being brought to deter a State from legitimate pursuit of criminal investigations. It also serves as a reminder of the strategic considerations that investors face in selecting a suitable methodology for quantum of damages. Background Rompetrol claimed that Romania had breached its obligations under Article 3(1) and 3(5) of the Agreement on Encouragement and Reciprocal Protection of Investments between the Kingdom of The Netherlands and Romania (the BIT) to provide its investment in Rompetrol Rafinare SA (RRC) fair and equitable treatment, full protection and
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security and non-impairment. The claims arose from measures taken by Romanian anti-corruption and criminal prosecution authorities against two individuals, Mr Patriciu and Mr Stephenson, who directed the affairs of RRC, a company born through the privatisation of the State oil-refining industry after the fall of Ceausescu in 1989. Rompetrol alleged that the investigations, which included the arrest, detention, travelban and wire-tapping of Mr Patriciu, were politically and commercially motivated and breached the guarantees in the BIT. Romanias response was that the investigations were a legitimate part of its implementation of the National AntiCorruption Strategy that it had pursued in order to gain access to the European Union. A link between State conduct against individuals and the investor is required The Tribunal emphasised the special character of this case given that the claims arose from measures directed against individuals linked to the investor rather than against the investor itself, noting that these cases were rare amongst reported awards. The individuals were not claimants under the BIT and their rights were personal and distinct from those of Rompetrol. As such, even if the alleged State-sponsored harassment of the individuals through an unlawful criminal investigation had breached the individuals personal rights, Rompetrol had to show that there was a connection between the States conduct against the individuals and State conduct against the investment itself in order for that conduct to qualify as a violation of the BIT protections. Rompetrols case would [stand or fall] by whether it is able to make out its claim that the criminal investigations have breached the rights of [Rompetrol] itself [para 151]. The Tribunal concluded that three kinds of actions could fall within the area of protection under the BIT: (a) actions against the investor itself (or its investment); (b) action against the investors executives for their activity on behalf of the investor; and (c) action against the executives personally but with the intent to harm the investor [para 200]. No co-ordinated campaign of harassment The Tribunal recognised that its role was not to pronounce on the rightness or wrongness of the pending criminal charges [para 174] but to determine whether the authorities conduct constituted a breach of the BIT guarantees. In so doing, the Tribunal examined whether the requisite link to the investment was present. The Tribunal did find that there had been animus and hostility towards Mr Patriciu on behalf of the prosecutorial officials and that this may have affected the authorities tactical approach [para 245 and 248]. As regards the detention and attempted imprisonment, the Tribunal accepted that there had been procedural irregularities but that it could not find anything wrongful in the prosecutors execution of its rights to apply for pre-trial detention [para 251]. In perhaps the clearest example of conduct that lacked sufficient connection to the investment, the Tribunal found
that whilst the wire-tapping by the Romanian Intelligence Service had been devoid of the necessary threat to national security and that Mr Patricius personal rights of privacy had been affected, there had been no harm to his business activities [para 260 261]. Overall there had been no co-ordinated campaign of harassment [para 276]. A legitimate expectation during criminal proceedings Nevertheless, the Tribunal recognised that a State may incur international responsibility for breaching its obligations under an investment treaty to accord fair and equitable treatment to a protected investor by a pattern of wrongful conduct during the course of a criminal investigation or prosecution, even where the investigation and prosecution are not themselves wrongful. It asserted further provisos: (1) the pattern must be sufficiently serious and persistent that the interests of the investor must be affected; and (2) there must be a failure by the State to pay adequate regard to how those interests ought to be duly protected. In the Tribunals view, the legitimate expectations of a protected investor include the expectation that the State authorities will seek means to avoid unnecessary damage or at least to minimise or mitigate the adverse effects on the investment if the investors interests become entangled in the criminal process directly or indirectly [para 278]. It was on this point that Rompetrol obtained partial success. The Tribunal found that there had been a pattern of disregard by the [prosecutorial and investigation agencies] for the procedural rights of [Rompetrols] executives, and in particular for the likely and foreseeable effects on the interests of [Rompetrol] itself as a protected foreign investor, as demonstrated by, inter alia, the procedural irregularities during the criminal investigation, the conduct of the prosecutors, and the arrest and attempted imprisonment of the executives. A crucial element in establishing the States failure to pay adequate regard to the investment was the documentary evidence showing that from a certain point at least in the lengthy saga of the criminal investigations, the [prosecution and investigation authorities] knew that the interests of [Rompetrol] as such stood directly or indirectly in the line of fire. [para 279] Indeed the prosecutions request for Mr Patricius detention referred directly to the investment arbitration and the Dutch investor i.e. Rompetrol. Damages: Rejection of the event study method The Tribunal found that Romania had breached Article 3(1) of the BIT to a limited extent by virtue of only some of the authorities conduct such as the procedural irregularities during the criminal investigations and the arrest and attempted imprisonment of Mr Patriciu and Mr Stephenson, dismissing the remainder of Rompetrols claims [para 279 - 280]. This determination, whilst positive for Rompetrol, proved to have serious consequences for its submissions on damages which relied wholly on the event study method predicated upon the Tribunal finding in favour of all of Rompetrols claims of maltreatment.
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Rompetrol submitted that its damages comprised injury to its reputation which had a deleterious effect on its existing and future business, and caused actual loss of property rights. Rompetrol argued that this damage was expressed through legal expenses in defending against wrongful acts of the State authorities, increased financing costs and loss of opportunity. It sought to quantify these damages through the event study method. The event study method employed by Rompetrol is a technique that seeks to measure price movements in publicly traded shares and to attribute those movements to specific events as they become known to the market, isolating such price movements from the background fluctuations that would be expected in the relevant market in the ordinary course. Rompetrol argued that the markets knowledge of each successive wrongful action taken against Rompetrols directors by Romania on 12 out of 32 event days negatively affected the value of the shares of RRC listed on the Bucharest Stock Exchange. Romanias experts criticised this method on the basis that only a minority of RRC shares were publicly traded, and so could not be a reliable proxy for the majority controlling stake held by Rompetrol. Among other things, Romanias experts criticised the exclusion of positive events such as the buy-out by KazMunaiGaz in 2007 which triggered a large increase in share price. Rompetrols model also failed to accommodate the natural recovery in share price that is observed when a feared event does not in fact transpire. However, the central defect in Rompetrols quantum methodology was to treat all of the acts by the Romanian authorities in relation to the criminal investigations as breaches of the BIT, whereas the Tribunal had found that only some of these State interventions constituted BIT breaches. As noted by the Tribunal, this all-or-nothing approach ends up leaving the analysis somewhat stranded because a finding of partial illegality requires the experiment to be reconfigured and re-run [para 286]. The Tribunal commented that the application of the event study method to cases such as this was fundamentally misconceived given that the alleged State misconduct was extensive and took place over a number of years. The method would be more appropriate in cases where an expropriation or introduction of a specific regulatory measure by the host State might result in a demonstrable proximate reaction by the market. Furthermore, the method was not apt to distinguish between the market effects of a legitimate investigation of a
company by State authorities and any supposed incremental effects from an illegal investigation. [para 286] Rompetrol made an alternative claim for moral damages to cover non-pecuniary injury for which monetary value cannot be mathematically assessed, referring to the only two ICSID cases in which such damages have been awarded. Whilst the Tribunal accepted that the award of moral damages was permitted under general international law, such damages would express themselves here in the form of increased financing and transaction costs that were simply examples of actual economic loss or damages and subject to the usual burden of proof. [para 289] As Rompetrol had only put forward a single quantum method for its economic losses which the Tribunal rejected entirely, no compensation was awarded. Rompetrol tried to put forward alternative quantum evidence with its post-hearing brief without prejudice to its initial quantification model but this was without leave of the Tribunal and held to be inadmissible. Conclusion This award is a salutary tale to would-be claimants considering how to prove damages and useful guidance as to when the event study method might be suitable in investment treaty arbitration. Whilst some claimants may be concerned that offering a tribunal alternative quantum methods might undermine the strength of their primary position and thereby encourage a more ambivalent result, this case highlights the risk of submitting only a single all or nothing model. It may be more appropriate to structure quantum calculations in a way that equips the tribunal with the elements needed to award damages that correlate with their findings on the merits. Finally, this award provides useful guidance on the treatment of a companys officers that will likely be influential in other treaty cases. As noted by the Tribunal, association with the management of a foreign investor or a foreign investment cannot serve to immunize individuals from the normal operation of the criminal law [para 152]. However, in situations where political and commercial motives may be at play, investors would be wise to ensure that the State authorities are on notice that their protected investments are in the line of fire and that they owe a duty to mitigate the adverse effects that might result from their enforcement activities.
Robert Rothkopf
1. ICSID Case No. ARB/06/3 dated 6 May 2013. 2. SARL Benvenuti & Bonfant v Peoples Republic of Congo, ICSID Case No. ARB/77/2, Award, 8 August 1980, and Desert Line Projects LLC v Republic of Yemen, ICSID Case No. ARB/05/17, Award, 6 February 2008.
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NEIGHBOURS FRIENDLY PACT ON DISPUTE RESOLUTION

By Veeraraghavan Inbavijayan and Kirthi Jayakumar
Introduction That India and Pakistan have a shared history that goes beyond to a time that dates earlier than the partition in 1947, is a given. Whether it is in the unsolved riddle of sovereignty over Kashmir, or the question of who owns Sia Chen, the glacier, or if it is a question of terrorism and concerns of cross-border militancy, there have been plenty of issues that have sparked debates and rhetorical questions on both sides. And yet, there is a glimmer of hope when the two nations decide not to let another question fester and snowball into a debate. The Indus Valley was the genesis of civilization in the region for as long as humanity can possibly remember, or even date back. The fount of the regions first tryst with development soon became a breeding ground for multiple cultures. World over, many countries were attracted to the Indus Valley Civilization whether in trade, or in conquest. From Porus to Alexander the Great, from the Persians to the Mughals, from the Dutch and Portuguese to the British everyone wanted a piece of India as it then was. With the advent of British rule, the country remained actively seized in its struggle for independence. India as a country remained steadfast in its pursuit of justice by
demanding independence from a colonial leader that had been too imperialistic to afford the nation its rights. At the stroke of midnight, while independence was won, two children countries were born from the original. These countries will remain engaged and steadfast in their differences for years to come though hopeful remnants of peace and brotherhood would rear their heads in the form of solidarity through cricket matches and cinema, and through a motivated decision to arbitrate differences. Of this repertoire is the Kishenganga Project, and the difference of opinion that arose from it. The dispute The Indus Waters Treaty is an international agreement signed by India and Pakistan in 1960 that regulates the use by the two States of the waters of the Indus system of rivers. Pakistan instituted arbitral proceedings against India in 2010, requesting that a court of arbitration determine the permissibility under the Treaty of a hydro-electric project (the Kishenganga Hydro-Electric Project, or KHEP) currently under construction by India on the Kishenganga/Neelum River, a tributary of the Jhelum River. The KHEP is designed to generate power by diverting water from a dam site on the Kishenganga/
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Neelum (within the Gurez valley, an area of higher elevation) to the Bonar Nallah, another tributary of the Jhelum (lower in elevation and closely located to Wular Lake) through a system of tunnels, with the water powering turbines having a capacity of 330 megawatts. While water-sharing in the Indus system stands settled by the Indus Treaty 1960, divergences are possible, and have occurred, over the question of the compliance of Indian projects on the western rivers with certain stringent provisions of the Treaty which were meant to take care of Pakistans concerns as a lower riparian. The Treaty recognises three categories of such divergence: questions to be discussed and resolved at the level of the Indus Commission, or at the level of the two governments; differences (that is, unresolved questions) to be referred to a Neutral Expert (NE) if they are of certain kinds (that is, broadly speaking, differences of a technical nature); and disputes (going beyond differences, and perhaps involving interpretations of the Treaty) that are referable to a Court of Arbitration. In the Kishenganga case, both difference and dispute come into play. Pakistan has proposed the reference of certain technical issues to a Neutral Expert, and the submission of a couple of other issues to a Court of Arbitrators. The Kishenganga is a tributary of the Jhelum. It originates in J&K, crosses the Line of Control, runs for some 150 km in Pakistan-occupied Kashmir, and joins the Jhelum (in PoK). India proposes to build a dam on the Kishenganga shortly before it crosses the LoC, divert a substantial part of the waters of the river through a tunnel to the hydroelectric project (330 MW, that is, 110 MW x 3) located near Bonar Nala, another tributary of the Jhelum, and then return the diverted waters, after they have passed through the turbines, to the Jhelum via the Wular Lake. An overview of the key contentions The main dispute to be referred to a Court of Arbitration is on the issue of whether the diversion of waters from one tributary of Jhelum to another is permissible under the Treaty. Art. III (2) of the Treaty requires India to let flow all the western rivers to Pakistan and not permit any interference with those waters, and Art. IV (6) calls for the maintenance of natural channels. If we go by these provisions, the diversion of waters from one tributary to another seems questionable. On the other hand, there is another provision (Ann. D, paragraph 15 (iii)) which specifically envisages water released from a hydroelectric plant located on one tributary of the Jhelum being delivered to another tributary; this seems to permit inter-tributary diversion. The correct understanding of these provisions and the determination of the conformity of the Kishenganga Project to the Treaty is a matter for the two governments to agree upon, or for the Court of Arbitration to decide. Any diversion of waters from a river is bound to reduce the flows downstream of the diversion point. It is true that the diverted waters will be returned to the Jhelum, but there
will certainly be a reduction of flows in the stretch of the Kishenganga (some 150 km) before it joins the Jhelum. This will affect not merely certain uses of the waters but also the river regime itself and the ecological system. It may be true that only a small part of the waters (30 per cent or so) flows from the Indian part to the Pakistani part and that the rest (70 per cent) of the flows arise after the river crosses the LoC. However, the diversion of a substantial part of the former by India will undoubtedly have some impacts downstream. Assuming that diversion from the Kishenganga to another tributary is found permissible, there is a condition attached: the existing agricultural use and use for hydro-electric power generation on the Kishenganga in Pakistan must be protected. There is indeed some existing agricultural use along the Kishenganga (Neelum) in PoK. Pakistan is also planning the Neelum-Jhelum hydroelectric project at a point on the Neelum before it joins the Jhelum. These claims of existing uses will probably be contentious issues between the two countries, with reference to (a) the crucial date for determining existing use and (b) the quantum of existing use. Pakistans contentions Pakistan challenges, in particular, the permissibility of the planned diversion by the KHEP of the waters of the Kishenganga/Neelum into the Bonar Nallah, arguing that this inter-tributary transfer will adversely affect the operation of a hydro-electric projectthe Neelum-Jhelum Hydro-Electric Project or NJHEPbeing built by Pakistan on the Kishenganga/ Neelum downstream of the KHEP (the First Dispute). The transfer of water contemplated by India may be represented graphically as in the attached diagram (Annex A). Pakistan has also requested that the Court determine whether the Treaty permits India to deplete or bring the reservoir level of run-ofriver hydro-electric plants below a level identified as Dead Storage Level in the Treaty (the Second Dispute). Pakistan submits that that such reservoir depletion would give India impermissibly broad control over the flow of the river waters allocated to Pakistan under the Treaty. Indias contentions For its part, India had stated its intent to use such reservoir depletion to flush sediment out of the KHEPs reservoir. India maintains that both the design and planned mode of operation of the KHEP are fully in conformity with the Treaty. An overview India and Pakistan are once again at loggerheads over the issue of water-sharing. Pakistan is raising strong objections to Indias construction of a hydropower project on the Neelum River known as Kishanganga in India a tributary of the Jhelum in the flashpoint territory of Kashmir. While the dispute is only the latest in a long series of such scraps, it is the first to be referred to international arbitration under the 50-year old Indus Water Treaty (IWT), marking an escalation in the race to take control of the Indus River.
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After bilateral negotiations collapsed in April last year, Pakistan took the case over the 330-megawatt Kishanganga dam to the International Court of Arbitration on the premise that India had violated the World Bank-mediated IWT, which provides a mechanism for resolution of disputes over waters originating from the Indus basin. Under the 1960 treaty, the waters of the eastern rivers of the Indus basin Sutlej, Beas and Ravi are allocated to India, while Pakistan has unrestricted use of the western rivers, Indus, Jhelum and Chenab. This is the first case referred to international arbitration under the provisions of the IWT. Despite persistent hostilities, India and Pakistan have managed to uphold the treaty for decades. Yet from time to time, the two south-Asian neighbours have found themselves at odds over hydropower projects, as both countries energy and irrigation needs continue to grow. Pakistan has raised objections to a number of controversial projects undertaken by India in Kashmir in the past, including the Baglihar project on the Chenab River and the Wullar Barrage on the Jhelum River. But the Kishanganga dispute assumes a greater significance because Pakistan is also vying to construct its own project the NeelumJhelum hydro scheme on the Pakistani side of the Neelum River. The IWT states that the country that completes its project first will secure priority rights to the river. Adding to tensions, the Neelum River flows across the militarised Line of Control that separates the Indian and Pakistani administered parts of Jammu and Kashmir and which has witnessed the 1947-war between these two south Asian neighbours and a number of military fire-exchanges since. The dispute over the Kishanganga project itself centres on
the diversion of water from one tributary of the Indus River to another. Pakistan said this violates the IWT, while India argues the diversion is well within treaty provisions. India maintains that it will only divert the Neelum to join the Jhelum River, which also flows through Pakistan and that therefore the water will ultimately reach Pakistan anyway. However, Pakistan has raised strong objections, saying the diversion will turn the countrys Neelum Valley into a desert. Pakistani experts also argue that the reduced flow of the Neelum River will decrease the power generation capability of Pakistans proposed 969-megawatt NeelumJhelum hydropower project by more than 20%. Last years floods in Pakistan forced it to halt construction of the Neelum-Jhelum project, already delayed by problems over land acquisition and failure to construct a bridge. India, on the other hand, has speeded up work on the strategically important Kishanganga project in order to finish it by 2014, well ahead of the 2016 deadline. Pakistan plans to complete the Neelum-Jhelum project by 2015.
India first developed plans for the 303-megawatt Kishanganga project in 1984, but failed to build it for a long time. Egged on by Pakistans progress on the construction of the Neelum-Jhelum project on the other side of Line of Control, India made frantic efforts to revive the 18-year old plans in 2008. This project is of strategic importance to Indiawe have to move heaven and earth to ensure the earliest commissioning of the project, the then minister of state for power, Jairam Ramesh, told a press conference in New Delhi in 2008. Pakistan is not the only party that feels aggrieved. Kashmiri people feel deprived by the fact India and Pakistan use their water resources without allowing local people the benefits they deserve.
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The basis of the arbitration and its initiation On 19 September 1960, the Government of the Republic of India and the Government of the Islamic Republic of Pakistan (the Parties) signed the Indus Waters Treaty 1960 (the Treaty).1 Article IX of the Treaty provides for a system for the settlement of differences and disputes that may arise under the Treaty. By Article IX the Treaty was also signed by the International Bank for Reconstruction and Development in respect of the World Banks role under certain provisions of the Treaty. Instruments of ratification were exchanged between the Parties on 12 January 1961; the Treaty entered into force on that date with retroactive effect as of 1 April 1960 as stated in Article XII (2). Through a Request for Arbitration dated 17 May 2010, Pakistan initiated proceedings against India pursuant to Article IX and Annexure G of the Treaty. In its Request for Arbitration, Pakistan stated that the Parties had failed to resolve the Dispute concerning the Kishenganga Hydro-Electric Project (the KHEP) by agreement pursuant to Article IX(4) of the Treaty. Pakistan identified two questions that are at the centre of the dispute in the following manner: a. Whether Indias proposed diversion of the river Kishenganga (Neelum) into another Tributary, i.e. the Bonar-Madmati Nallah, being one central element of the Kishenganga Project, breaches Indias legal obligations owed to Pakistan under the Treaty, as interpreted and applied in accordance with international law, including Indias obligations under Article III(2) (let flow all the waters of the Western rivers and not permit any interference with those waters) and Article IV(6) (maintenance of natural channels)? b. Whether under the Treaty, India may deplete or bring the reservoir level of a run-of river Plant below Dead Storage Level (DSL) in any circumstances except in the case of an unforeseen emergency?
revised by the 1907 Convention for the Pacific Settlement of International Disputes. As of August 2009, 109 countries were party to one or both of these founding Conventions of the PCA. The PCA is not a court in the conventional understanding of that term, but an administrative organization with the object of having permanent and readily available means to serve as the registry for purposes of international arbitration and other related procedures, including commissions of enquiry and conciliation. It is a permanent framework available to assist temporary arbitral tribunals or commissions. The PCA is housed in the Peace Palace in The Hague, which was built specially for the Court in 1913 with an endowment from Andrew Carnegie. From 1922 on, the building also housed the distinctly separate Permanent Court of International Justice, which was replaced by the International Court of Justice in 1946. Unlike the ICJ, the PCA is not just open to states but also to other parties. The PCA provides services for the resolution of disputes involving various combinations of states, state entities, intergovernmental organizations, and private parties. In the early 1980s, the PCA helped in setting up the administrative services of the Iran-United States Claims Tribunal. The public at large is usually more familiar with the International Court of Justice than with the Permanent Court of Arbitration, partly because of the closed nature of cases handled by the PCA and to the low number of cases dealt with between 1946 and 1990. The PCAs caseload has, however, increased since then. The PCA administers cases arising out of international treaties (including bilateral and multilateral investment treaties), and other agreements to arbitrate. The cases conducted by the PCA span a wide range of legal issues, including disputes over territorial and maritime boundaries, sovereignty, human rights, international investment (investor-state arbitrations), and matters concerning international and regional trade. Hearings are rarely open to the public and sometimes even the decision itself is kept confidential at the request of the parties. The three disputes
The courts partial award THE FIRST DISPUTE In its analysis, the Court emphasized at the outset that its Partial Award, just as the Indus Waters Treaty itself, does not have any bearing on any territorial claims or rights of the Parties over Jammu and Kashmir. The Courts findings pertain solely to the Parties rights and obligations with respect to the use of the waters of the Indus system of rivers, including with respect to the use of the waters of those portions of the rivers that flow through disputed territory. Understanding the PCA The Permanent Court of Arbitration (PCA), is an international organization based in The Hague in the Netherlands. It was established in 1899 as one of the acts of the first Hague Peace Conference, which makes it the oldest institution for international dispute resolution. The creation of the PCA is set out under Articles 20 to 29 of the 1899 Hague Convention for the specific settlement of international disputes, which was a result of the first Hague Peace Conference. At the second Hague Peace Conference, the earlier Convention was In the First Dispute, the Court was approached and called upon to determine whether India is permitted under the Treaty to deliver the waters of the Kishenganga/Neelum River into the Bonar Nallah in the course of the operation of the KHEP. The contextual perusal of the case led to an observation. As an initial matter, the Court observed that the Treaty expressly permits the transfer of water by India from one tributary of the Jhelum to another for the purpose of generating hydro-electric power, subject to certain conditions. The Court first found that this right is not circumscribed by the Treatys restriction of Indian uses on the Western Rivers (which include the Kishenganga/ Neelum as a tributary of the Jhelum) to the drainage basin of those rivers. This restriction relates to where water may be used, and is not violated by the use outside of the drainage basin of electricity generated from the water. The Court then examined the Treaty provision requiring the Parties to maintain the natural 1. The Permissibility of Inter-Tributary Transfers under the Treaty
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channels of the rivers and its effect on inter-tributary transfers. The Court found that this obligation involves maintaining the river channels physical capacity to carry water, and does not require maintaining the timing or volume of the flow in the river. Accordingly, this obligation does not limit Indias right to transfer water for the purpose of generating hydro-electricity. Having established that Indias right to inter-tributary transfer is not prohibited by other provisions of the Treaty, the Court considered whether the KHEP meets the express conditions on such transfer. The Court noted that for transfer to be permissible, the KHEP must (1) be a Run-of-River Plant; (2) be located on a tributary of the Jhelum; and (3) conform to Paragraph 15(iii) of the Treaty Annexure governing hydro-electric power generation. The Court observed that a Run-of-River Plant is a term of art defined by the Treaty and that the KHEP is a Run-of-River Plant within that definition. The Court further decided that on the facts of the case the KHEP should be regarded as located on the Kishenganga/Neelum notwithstanding that the KHEPs power house is situated at a distance of 23 kilometres from that river. The Court also found that, by releasing water into the Bonar Nallah after it has passed through the power house, the KHEP complies with the requirement that the water released below the Plant be delivered into another Tributary. Finally, the Court found that the KHEPs inter-tributary transfer is necessary, as required by the Treaty, for the generation of hydroelectric power, as power can be generated on the scale contemplated by India in this location only by using the 665 metre difference in elevation between the dam site on the Kishenganga/Neelum and the place where the water is released into the Bonar Nallah. 2 The Interpretation of the Treaty with Respect to then existing Agricultural Use or hydro-electric use by Pakistan
In addition to the requirements described above, the Court recognized that Paragraph 15(iii) requires that then existing Agricultural Use or hydro-electric use by Pakistan on the downstream reaches of the Kishenganga/Neelum not be adversely affected by the KHEPs inter-tributary transfer. Pakistan argued that then existing uses are to be determined on an ongoing basis, whenever water is transferred from one tributary to another. India, in contrast, argued that such uses must be determined at a fixed point during the design of its hydro-electric project. In seeking to establish when a then existing agricultural or hydro-electric use is to be determined, the Court was guided in the interpretation of the Treaty by Article 31(1) of the Vienna Convention on the Law of Treaties: [a] treaty shall be interpreted in good faith and in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its object and purpose. The Court first examined the text of Paragraph 15(iii), noting the provisions focus on the operation of hydro-electric plants and the implication that the determination of then existing uses should take place on an ongoing basis throughout the operational life of a plant. The Court then considered the context of Paragraph 15(iii) and noted that the provision falls within a continuum of design, construction and operation. The Court observed that the provisions of the Treaty must be interpreted in a mutually reinforcing fashion, as it would make little sense for the Treaty to permit a plant to be designed and built in a certain manner, but then to prohibit the operation of that plant in the very manner for which it was designed. Finally, the Court examined the object and purpose of the Treaty and found that the Treaty both gives Pakistan priority in the use of the waters of the Western Rivers (including the Kishenganga/ Neelum) and India a right to generate hydro-electric power on the Western Rivers. Turning to the application of the Treaty to the KHEP,
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the Court first considered the implications of the approaches advocated by the Parties. The Court observed that under the ambulatory approach advocated by Pakistan, a projects design could be cleared for construction as being consistent with the design specifications of the Treaty, but then be prevented from operating by new uses by Pakistan. In the Courts view, the uncertainty created by this approach, and the potential for wastage, would have a chilling effect on the undertaking of any hydro-electric projects by India on the Western Rivers. With respect to the approach advocated by India, under which Pakistans uses would be determined at the moment that India communicates a firm intention to proceed with a project, the Court observed that identifying a critical date will often be difficult, but that it may be possible to identify a critical period in which design, tenders, financing, public consultations, environmental assessments, governmental approvals and construction come together to indicate a firm intention to proceed with a project. Nevertheless, the Court noted that a solely critical period approach could result in a race in which each Party would seek to create uses that would freeze out future uses by the other, an outcome the Court rejected.
3. The Courts Request for Further Data Having concluded that the Treaty requires the
preservation of a minimum flow of water downstream of the KHEP, the Court determined that the data provided by the Parties are insufficient to allow it to decide the precise amount of flow to be preserved. The Court therefore deferred its determination of the appropriate minimum flow to a Final Award, and requested the Parties to provide additional data concerning the impacts of a range of minimum flows at the KHEP dam on, (for India), (a) power generation at the KHEP; and (b) environmental concerns from the dam site at Gurez to the Line of Control; and, (for Pakistan), (a) power generation at the NJHEP; (b) agricultural uses of water downstream of the Line of Control to Nauseri; and (c) environmental concerns at and downstream of the Line of Control to Nauseri. THE SECOND DISPUTE 1. The Admissibility of the Dispute over the Depletion of Reservoirs below Dead Storage Level Insofar as India had raised two objections to the
Having considered the approaches advocated by the Parties, the Court concluded that neither the ambulatory nor the critical period approach were fully satisfactory and that the proper interpretation of the Treaty combines elements of both. The Court considered that it must first establish for each of the KHEP and the NJHEP the critical period in which the Parties not only planned the projects, but took concrete steps toward their realization. Reviewing the evidence provided by the Parties, the Court concluded that the KHEP reached this period in 2004 2006. In contrast, the Court found that Pakistan demonstrated a comparable commitment to the NJHEP in 2007 and 2008. Given this timing, the Court decided that Indias right to divert the waters of the Kishenganga/Neelum by the KHEP is protected by the Treaty. However, the Court also decided that Indias right to divert the Kishenganga/Neelum is not absoluteit is subject to the constraints specified in the Treaty and, in addition, by the relevant principles of customary international law. Paragraph 15(iii) gives rise to Indias right to construct and operate hydro-electric projects involving inter-tributary transfers, but also obliges India to operate those projects in such a way as to avoid adversely affecting Pakistans then existing agricultural and hydro-electric uses. Both Parties entitlements under the Treaty must be made effective so far as possible. The Court therefore found that Pakistan retains the right to receive a minimum flow of water from India in the Kishenganga/Neelum riverbed at all times. The Court noted that this right also stems from customary international environmental law, and that it considered that the Treaty must be applied in light of contemporary international environmental law principles. In this context, the Court recalled the commitment made by Indias Agent in the course of the hearing that India would ensure a minimum environmental flow downstream of the KHEP at all times.
admissibility of the Second Dispute, the Court considered, first, whether Pakistan had followed the Treaty procedure for the submission of disputes to the Court; and second, whether the Second Dispute, given its subject-matter, could properly be heard by the Court. With respect to the first question, the Court observed that the Treaty provides for disagreements between the Parties to be resolved either by a seven-member court of arbitration or by a single, highly-qualified engineer, acting as a neutral expert. The Court concluded that the neutral expert process is given priority only if one or the other Party has in fact requested the appointment of a neutral expert. In the present case, neither Party made such a request and the Court was therefore not precluded from hearing the Second Dispute. With respect to the second question, the Court found that although the Treaty specifies the technical matters that may be referred to a neutral expert, it does not give the neutral expert exclusive competence over these listed matters. Once constituted, a court of arbitration is empowered to consider any question arising out of the Treaty, including technical questions. Having rejected both objections, the Court found that the Second Dispute is admissible. 2. The Permissibility of the Depletion of Reservoirs for Drawdown Flushing In approaching the merits of the second dispute, the Court observed that the question of reservoir depletion is linked in the Parties disagreement with the permissibility of controlling sediment through the procedure of drawing down the reservoir and flushing accumulated sediment downstream. The Court briefly reviewed the process of sedimentation in the reservoirs of hydro-electric plants and the various techniques available for sediment control, including drawdown flushing. The Court then examined three aspects of the context of the Treaty with respect to drawdown flushing. First, the Court observed that one of the primary objectives of the Treaty was
16 YAR JULY 10, 2013
to limit the storage of water by India on the Western Rivers and that the Treaty includes strict restrictions on the volume of storage permitted to India. The Court noted that in contrast, the volume of Dead Storage is not controlled, suggesting that such storage was not intended to be subject to manipulation. Second, the Court noted that the Treaty includes design restrictions on the low-level outlets that would be required to deplete a reservoir and that these restrictions make sense only if depletion is also restricted. Third, the Court recalled that the Treaty drafters intended for India to have the right to generate hydro-electric power on the Western Rivers, and noted that this right must be given effect by allowing Indias hydro-electric development to be sustainable. Reading the provisions of the Treaty in light of these contextual aspects, the Court concluded that the Treaty prohibits depletion below Dead Storage Level of the reservoirs of Run-of River Plants (and, correspondingly, drawdown flushing) through reference to a provision of the Treaty Annexure dedicated to storage works, which states that the Dead Storage shall not be depleted except in an unforeseen emergency. The Court also noted that the Treaty includes restrictions on the permissible variation in the volume of flow in a river above and below a hydro-electric plant, and that these restrictions may also be incompatible with drawdown flushing in certain reservoirs and in certain flow conditions. To complete its analysis, the Court examined whether the sustainable generation of hydro-electric power on the Western Rivers is possible without drawdown flushing. After reviewing the technical documentation submitted by the Parties and the
testimony of the experts presented by them, the Court observed that drawdown flushing is only one means of sediment control and concluded that hydroelectricity may be generated without flushing. Finally, insofar as certain hydro-electric plants are under construction or have been completed by India, the Court stated that its decision on the Second Dispute may not be so interpreted as to cast doubt retrospectively on any Run-of-River Plants already in operation on the Western Rivers, nor as to affect retrospectively any such Plant already under construction the design of which (having already been duly communicated by India under the relevant provisions of the Treaty) has not been objected to by Pakistan as provided for in the Treaty. Conclusion This is the first time that a dispute under the Indus Waters Treaty which is a rather significantly persistent legislation that is surviving many wars for over 50 years now, has been referred to arbitration. From the view point of international law and international relations, arbitration as a means for dispute settlement between India and Pakistan holds a lot of promise.
Veeraraghavan Inbavijayan (www.inbavijayan.com) and Kirthi Jayakumar
17 YAR JULY 10, 2013
THE AFTERMATH OF THE REVOLUTION: An assessment of the compatibility of the tunisian law for international arbitration with general contemporary practice in international commercial arbitration
By Henry Clarke1
ABSTRACT This article assesses the need for reform of Tunisian international arbitration law as a dispute resolution measure for Tunisias international trade and inward investment. The areas considered are contrasted to the original and revised UNCITRAL Model Law on International Commercial Arbitration and occasionally to other national arbitration laws or considered as topics notably absent from the Model Law such as public policy, liability of arbitrators and arbitral institutions, multiparty and multi-contract arbitration, set off, confidentiality, and costs and fees. The conclusions are an agenda for reform of the international arbitration law for Tunisia and the Arab world more widely. 1. INTRODUCTION International commercial arbitration (ICA) has grown in importance since the 1980s. It has sustained the creation of specialist arbitration practice groups in leading international law firms, the proliferation of academic journals and the expansion
of academic study in the field.2 This growth has tied in with the acceleration of globalisation in commerce since the end of the Cold War; with more international trade investment there is an increased need to resolve international business disputes. Not all disputes may be resolved informally by negotiation between the parties. It may also be complex, costly and risky to litigate in courts in various jurisdictions whose reputation for efficiency, probity and impartial law may not be accepted by one or all the parties. ICA provides an alternative, private dispute settlement forum to a national court. It is selected and controlled by the parties and resolves the parties rights and obligations through decisions of arbitrators in a final and binding manner with only loose supervision by national courts. This flexibility is favourable to the Middle East and North Africa. As the dust settles on the Arab democratic upheavals it may be that these newly democratic countries try to meet the demands of their young and growing populations for prosperity through increased international business. If this happens depends on various factors including the possibility
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of resolving business disputes efficiently and reliably. In this bid for prosperity, ICA may provide an important fine tuning instrument for trade and investment in these countries. However, divergences amongst national provisions in arbitration law create uncertainty and risk in ICA thus affecting its viability. This dissertation concentrates on Tunisia, the first Middle Eastern state to experience revolution and its aftermath in the recent upheavals in the Middle East. Because of this clear change of political regime and the economic aspirations expressed by the Tunisian people during the revolution in demonstrations, Tunisia can be seen as pioneering and thus worthy of focused study.3 The countrys relationships with foreign investors and markets will be critical to the rate of national economic growth in the future. This will be influenced to some degree by the legal framework in which foreign investors and Tunisian business people operate, which includes the resolution of disputes. An important part of this will be the use of ICA under Tunisian arbitration law, thus this dissertation will examine the suitability of Tunisian arbitration law for ICA. 2. SOURCES To assess the suitability of the Tunisian arbitration law for ICA, this dissertation will consider the original and revised United Nations Commission for International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (Model Law or ML) before comparing and contrasting it to the Tunisian international arbitration law. The
4
Foreign Arbitral Awards 1958 (NYC), along with the success of the 1976 Rules, the need to harmonise the diverse and sometimes stringent requirements of national arbitration laws was seen as the next ICA project.10 When UNCITRAL decided to try to harmonise national arbitration law, a Protocol to the NYC was proposed via a convention.11 However, on further consideration UNCITRAL decided on the flexibility of the model law format.12 Arguably this approach neatly followed on from the consultative process used to produce the 1976 Rules as a set of rules for adoption rather than as rules rigidly to be imposed in arbitration practice. The Model Law The Model Law is not a classic form of international vehicle for harmonising ICA law. The convention historically has been the default method as borne out by the Geneva Protocol 1923, Geneva Convention 1927, NYC, European Convention 1961, Washington Convention 1965 and the European Convention providing a Uniform Law on Arbitration 1966 (Uniform Law). A convention is intended to unify law through agreeing binding obligations. It comes into force after a requisite number of states ratify it. Conventions are useful when a high degree of harmonisation of law is sought by states. Reservations or declarations by states relating to conventions are permitted by international law, however UNCITRAL practice has been to prohibit such qualifications or limit them in its convention negotiations so as to produce a high degree of unification in the negotiated areas.13 A model law is a simpler document than a convention. It does not require a diplomatic conference. There is not the stark risk of failure inherent in conventions through trying to implement a rigid structure. The Uniform Law being implemented only by one signatory is such an example of the failure of a convention.14 There is no need to wait for a threshold number of ratifications before the document becomes enforceable. It is less costly to produce in terms of elaborate diplomatic conferences. Model laws as recommendations for law have greater freedom for states to accommodate the new international norms in their domestic law. Unlike treaties, compromises do not have to be reached between negotiating states to ensure agreement, signature and enforcement; a model law is not an obligation on a state as a finished document, but merely a recommendation of good practice. A model law may omit local legal terminology by using descriptive language.15 The drafters of the Model Law took account of the descriptive language and content of the successful NYC and the 1976 Rules, the latter being recognised as a neutral and comprehensive set of rules.16 In turn, by using such language in a consistent manner with these instruments, the UNCITRAL Working Group buttressed the established position of these instruments as pillars of the architecture of ICA.17 Furthermore, it clarified various points in the NYC such as written form, compatibility of interim measures with an arbitration agreement and the choice of law.18 This language and model law structure is also educational in layout and drafting, whilst being suitable for legislation.19 Legislative guides may even be produced alongside
Model Law was original published in 1985 and subsequently widely adopted by states across different legal traditions in efforts to update arbitration laws. The Model Laws revision in 2006 is witness to the degree to which the original Model Law has been used and discussed within ICA thus generating the demand for its revision so it can continue to cater for the evolving needs of parties. References will sometimes be made in this dissertation to other national arbitration laws when novel solutions to issues have been applied in aid of ICA in a different manner to that of the Model Law or in areas not covered by the Model Law. 3. UNCITRAL AND THE 1985 MODEL LAW UNCITRAL Establishing UNCITRAL in 1966 was a step forward in efforts to harmonise national commercial laws which eventually led to the Model Law.5 ICA was considered as being within its remit. UNCITRALs first ICA success was the UNCITRAL
6
Arbitration Rules 1976 (1976 Rules).7 The Rules resulted from considerable liaison with arbitral institutions and experts as well as much negotiation between common law and civil law lawyers from developed and developing states. In ICA the 1976 Rules have been widely used in ad hoc arbitrations.
8
They have also been widely used, referred to and adapted by arbitral institutions.9 They were updated in 2010 to retain their relevance to international arbitration. With the increasing number of ratifications of the New York Convention on the Recognition and Enforcement of
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a model law, as is the practice of UNCITRAL.20 States can take elements or modify elements of the Model Law for enforcement to enact internationally compatible legislation.21 Thus it enables improvement of national laws via adoption so jurisdictions which have not legislated in that field may quickly attain international norms in that field, whilst catering for local circumstances. They also enable sophisticated jurisdictions
22
arbitrators and courts for interpretation on adoption of the Model law.28 Lord Dervaird in the Scottish context has noted regarding the extensive travaux prparatoires: It appears to the Committee that there may be circumstances in which in order that any matters of doubt or ambiguity can be resolved in accordance with the spirit of the Model Law parties should be entitled to draw the attention of the court to the Travaux Preparatoires which went into making of the Model Law. In this regard the Committee thinks it appropriate that some legislative reference should be made to this matter, in order to avoid the doubts generally in Scots Law as to the extent to which regard may properly be had to such matters in construing legislation.29 Thus it is acknowledged that the Model Law preparation had much more consideration than a national bill typically does before being approved as law. In addition, the UNCITRAL Secretariat to a degree assists national legislators in adopting the Model Law.30 Furthermore, when updating a national arbitration law, legislators have taken the Model Law into account.31 A new national arbitration law should contain a number of provisions modelled on the Model Law.32 It is aimed at enabling jurisdictions to have comparable national arbitration laws that minimise local peculiarities not justified for ICA.33 This is because the negotiators strove for widely acceptable and workable solutions.34 Modifications of the Model Law should be minimal to gain the maximum effect from adoption, the high fidelity factor so Lord Dervaird continued:35 While certain changes to the Model Law are necessary in every country in order to accommodate it to the legal structures of that country, the main object of the Model Law is to provide a framework for arbitration which is readily understandable by people of very different legal cultures. Accordingly, the Committee recommends that any legislation to give effect to its proposals
in that field to reconsider and, if necessary, amend their laws.
23
In
other words model laws are a systematic attempt to create best practice in potential legislation based on various laws, practice and legal scholarship. Thus when a model law is adopted wholesale, or nearly so, it is all the more conscious a step to take in modifying the law; a break with the past sends out a clear message of the intent of the lawmakers to regulate the particular subject matter in accordance with international best practice. At the time of the negotiation of the Model Law between 1979 and 1985, the laws of many jurisdictions did not appreciate the features and processes of ICA cases. Even equal treatment with domestic arbitration did not sufficiently serve ICA. This was due to inappropriate domestic provisions applying to ICA and foreign parties not being familiar with domestic law on arbitration.24 By contrast, uniformity and predictability in arbitral procedure was thought to reduce risks in conducting international business thus foster international business relations. A good ICA law is clear and known: This knowledge factor (or high-fidelity factor) should be taken into account by any State desirous of hosting arbitrations, not only arbitrations in which one of the parties is from the host State but also other international arbitrations in which all parties are foreign. Conversely, it would help parties from the host State if an arbitration in which they might be involved in another State were governed by the same or a similar law familiar to them. . . . The above considerations suggest certain major
should depart from the language of the Model Law only where essential. This is the course of action which has been taken in those countries which have already adopted the Model Law.36 Furthermore, the Model Law is based on the jurisdiction providing a service to ICA, so adaption should be more of a refinement than alteration:37 Arbitration rests on confidence in the arbitration laws
conditions that an acceptable law for international commercial arbitration should meet. It should be of good quality, with solutions that are both sound and suitable for the specific needs of international arbitration; it should be easily recognisable by and understandable to foreign users; and, building on these two conditions, it should be similar to the law of many other States embodying generally recognised principles.25 The UNCITRAL Working Group included the input of dozens of states and many arbitration institutions and other interested organisations. It is robust for having been drafted in consultation with experts across the world and in conjunction with states with a wide variety of legal systems and economies. The Model Law has crossed the divides of civil law and common law, the Islamic and non-Islamic and the developed and developing world.
26
of the venue, and both parties to an international contract primarily only have confidence in their own laws and misgivings about those of the other. The present result is, therefore, a tussle which is often resolved in favour of some neutral venue in a country with whose laws neither party is really familiar; ... The concept underlying the Model Law is to put an end to this state of affairs by widening the parties choice of venue, and thus their choice of arbitration clauses for incorporation into their contracts. In so far as a country will have enacted legislation based on the Model Law, both parties will be able to find it easier to accept arbitration in that country, because they will know basically where they stand. 38
Its international origin,
design and acceptability is part of its attraction for adoption as is its ease of use by foreign counsel, arbitrators or parties.
27
This diverse and detailed input is reflected in the extensive
travaux prparatoires which may be used by legislators, counsel,
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No particular article of the Model Law has repeatedly been amended, thus indicating a generally acceptable law.
39
Model Law may regulate domestic and international arbitration thus harmonising two regimes and enabling parties to opt into one regime from the other.49 It may be adopted by developed states to update existing laws using the freedom to vary the text inherent in the model law concept.50 With adoption there would be a welcome public relations effect; the Model Law is known and generally approved by arbitrators and counsel in ICA practice, and so it sends a positive signal to parties, legal professionals and arbitrators that a jurisdiction welcomes the resolution of disputes by international arbitration. The Model Law has been described as an ambitious project51 and standing beside the NYC in significance in the arbitration world52 with the 1976 Rules have similar significance.53 The Model Law has proven to be a viable alternative to creating a convention through its balance of consensus drafting and flexibility for adoption.54 This has been enhanced by its revision in 2006 to ensure it retains its relevance with the evolution of ICA. By 2006 the requirements of parties to arbitration had evolved from those of 1985 and areas of further harmonisation were considered feasible. The revised elements of this law are also considered in the analysis of this dissertation. 4. CONTEXT OF THE TUNISIAN ARBITRATION Turning to the Tunisian international arbitration law,
An added benefit of adoption of the Model Law with minor alterations is the option for courts to rely upon the existence of extensive commentary, including guiding case law on Model Law provisions from many jurisdictions in the resource called Case Law on UNCITRAL texts (CLOUT). Case law can also
40
be found in ICCAs Yearbook Commercial Arbitration and the Model Arbitration Law Quarterly Reports. Recently, UNCITRAL also produced a digest of case law on the Model Law that will be of great use in Model Law adopting jurisdictions. Such case
41
law and commentary reduce the risk of interpreting Model Law definitions and articles in diverging ways across jurisdictions. The Model Law as a national law meets all three necessary conditions for a good arbitral seat. It is harmonised with other national laws, understandable to foreigners, and amenable to ICA. The Model Law emphasizes party autonomy, but is limited by certain mandatory provisions preserving due process. jurisdiction.
42
As the Model Law states, it is subject to any Arguably this is not necessary, but the wording
multilateral or bilateral agreement which has effect in the

43
declares for the avoidance of doubt that it is a law relating to international subject matter, that international instruments do relate to the arbitration law and that international treaties and conventions are also a means of harmonising law.
44
The advantages of the Model Law to an adopting jurisdiction are lengthy.

45
it is set in the Tunisian legal system which originates from Islamic and civil law. The civil law derives from the creation of the French protectorate in 1881 that led to a written legal system.55 This civil law tradition was retained on independence in 1956,56 however there is potential for a modernised Tunisian national arbitration law based on the civil code tradition to accommodate Islamic values in the conduct of the arbitration.57
It is a finished text for adoption and

46
available in six languages
with wide coverage of ICA issues
structured in a manner following the stages of ICA. It covers the essential issues and contains straightforward language.47 The Model Law has been favourably received and adapted across the world.
48
One national arbitration law based on the
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With increasing demands for democracy, reform of the law must reflect cultural values for it to have legitimacy. This may include justification on Sharia grounds for the changes. Fortunately for lawyers there is much to consider in Sharia to create such justification through its various legal schools of thought. Yet, the success of the Model Law adoption in Egypt
58
effective arbitration such as the separability of the arbitration agreement, party autonomy and competence-competence.65 The present law consists of three chapters. The first chapter covers common rules with an influence from the Model Law. The second chapter covers domestic arbitration. The third chapter is based on the Model Law and covers international arbitration. It refers back to the first two chapters on occasions.66 There are some advantages to having a domestic and international arbitration regime in national law. There is clarity in knowing the domestic and international status of a particular case.67 Parties can opt into international arbitration from domestic arbitration: this gives parties the opportunity to opt into and experience the international regime, positive experiences of which may assist in generating support for domestic arbitration reform.68 Domestic pressures may make it harder to carry out change in domestic arbitration. This may be especially apt if the domestic regime can act as an alternative arbitration method catering to local legal issues using specific cultural understanding on issues that might vary from international perspectives, such as the independence and impartiality of arbitrators or the extent of a right to an oral hearing. Having experienced the reformed international arbitration regime, it may then be politically easier to introduce a reformed domestic arbitration regime. However, uncertainty can occur in the structure of separate domestic and international arbitration regimes. This can be avoided by not using cross references from sections of one regime to sections of the other regime in the law. This then creates effectively two laws. Sanders prefers one arbitration law rather than a domestic and international dichotomy.69 It provides a uniform, high fidelity factor for parties. As Sanders states, one regime for both can be successful as it has been in Germany and the Netherlands.70 Tunisia has had 19 years of Model Law based ICA. It would now seem appropriate, after this period, the recent political upheaval and the need for significant and long term economic growth to debate the integration of Tunisian domestic and international arbitration law into one arbitration law based on the Model Law. 5. ANALYSIS OF THE TUNISIAN INTERNATIONAL ARBITRATION LAW IN THE LIGHT OF THE MODEL LAW In contrasting Tunisian law with the Model Law, this dissertation considers only those Tunisian articles requiring reform in the order in which the subject matter is dealt with in the original and revised Model Law. Thereafter it considers issues not covered by either the original or revised Model Law nor adequately covered in Tunisian law. The first issue relates to definitions. Definition of Commercial The Model Law does not define commercial, but there is a footnote suggesting wide interpretation.71 The Tunisian arbitration law excludes the definition of commercial to broaden its application to include civil and mixed subject
and the use of arbitration rules based on the 1976 Rules at the Cairo, Nigeria, Kuala Lumpur and Tehran regional arbitration centres indicates arbitration law reform need not be diverted into religious law debate in the Islamic world to provide a list of areas for possible reform in Tunisian law to enhance recognition and understanding of the law internationally. This is contrary to a fear that has been expressed by some commentators that widespread adoption of the Model Law indicates a lack of cultural sensitivity.
59
Culture is important in
business and dispute resolution so sensitivity needs to be used to accommodate the business circumstances. In the context of globalisation with the demand of ease of conducting business by international investors on one hand and businesses acting for the aspirations of the youthful, poor population of Tunisia on the other, cultural accommodation may be best supported by means of the administration and conduct of arbitration cases.
60
Good practice in this field can be identified from the actions of well-known arbitral institutions like the London Court of International Arbitration (LCIA) which has set up local offices in the West Indies and became a partner in a local arbitration institution in Mauritius which broadly follows the LCIA Rules in its own arbitration rules. In such centres the recruitment of staff with appropriate language skills, local qualifications and religious beliefs aid understanding. Arbitrators should consider the merits of cultural training and be helped in obtaining this by institutions they are associated with. Such measures in combination support the benefits of ICA whilst accommodating local concerns. Relating to culture, it is interesting to note that Tunisia adopted the Model Law to replace an earlier arbitration code which had great similarities to the French arbitration law prior to the 1981 French reforms.
61
French law was generally This
supportive of international arbitration prior to 1981.
was particularly based on the approach of the courts and their inventive capacity rather than due to the incomplete, opaque and confusing articles in the Code of Civil Procedure relating to international arbitration. This inventive capacity consequently resulted in complex, even contradictory, case law as the courts attempted to produce the appropriate results on each occasion. Even issues like the powers of a tribunal to decide by amiable composition were not clear.
62
Against this French influenced background the 1993 Tunisian law was an achievement as it ended disputes about: the validity of clauses; the power to enter into arbitration agreements; specific features of procedures; and the enforcement of awards. support for harmonising rules
64 63
The Model Law adoption demonstrated Tunisian government governing international arbitration rather than following a more bespoke arbitration law reform as France did in 1981. The Model Law adoption by Tunisia significantly changed the Tunisian courts approach to arbitration. The courts consistently applied key concepts of
22 YAR JULY 10, 2013
matter for arbitration.72 Therefore it seems unnecessary in Tunisian article 48(1) to include a definition of commercial. Arguably this should be removed in a future law reform. The arbitration agreement On moving to key arbitration concepts, the original ML Article 7 regarding an agreement to arbitrate in writing was closely modelled on the wording of NYC article II. Article 7 adds to this by referring to an exchange of claim and defence statements as an arbitration agreement.74 Also, a reference in a contract to another document containing an arbitration clause constitutes an agreement to arbitrate disputes.75 Electronic forms of communication were not considered in the 1985 Model Law, although writing in article 7(2) was expanded to include forms of telecommunication.76 Thus article 7 broadens article II NYC.
77 73
continuing the arbitration pending a court decision in such circumstances. This follows the free choice philosophy behind the Model Law in the use of courts and tribunals.85 Any reform of Tunisian law should fully apply this free choice approach to maximise the prospects of efficient conduct of arbitration. Furthermore, when the Tunisian Court of Appeal has to decide whether to refer a matter to arbitration, it should be able to show a pro-arbitration stance on a limited review of the arbitration agreement as happens in most sophisticated arbitration jurisdictions86 and aid efficiency by fixing a time limit for the arbitration to commence if one has not already been fixed by the parties, the tribunal or arbitral institution.87 Tribunal composition Moving to the tribunal, Tunisian law avoids the issue of an impasse caused by arbitrator disagreement by having an odd number of arbitrators in a fully constituted tribunal.88 This contrasts with ML article 10(1) that permits even numbers of arbitrators if agreed by the parties. The Tunisian Court of Appeal appoints arbitrators if parties fail to do so. The tendency has been to appoint judges; no approved arbitrator list is maintained by the court system.89 Under article 56(5) there is no appeal from the decision. A more ICA friendly method may be to follow Mauritius in selecting a prominent arbitral institution such as the Permanent Court of Arbitration to give it an arbitrator appointing function.90 This could entice such an ICA institution into being permanently present in Tunisia and thereby develop Tunisia as an international dispute resolution venue. Alternatively a domestic arbitration institution could be revitalised with the role.91 In light of the lack of a well-established domestic arbitral institution with primacy, consideration could be given to inviting an international arbitral institution as a statutory appointing authority with the prospect of the institution setting up a permanent office in Tunisia. Challenge to an arbitrator
The in writing requirements were a significant part

78
of the 2006 review of the Model Law. illustrative example.
New article 7 option
1 in article 7(4) extensively defines electronic documents by
To absorb the current context of ML article 7, Tunisian article 6 needs to refer to electronic communication. Electronic
79
mail is included in the Tunisian adoption of article 7(4) by virtue of an amendment of the Code of Obligations and Contracts which considers a document as written once the electronic document is saved and signed electronically.
80
Nevertheless, it might be
clearer to foreign parties if the arbitration law was specific on the point in the spirit of a self-contained law for the use of foreign parties as advocated by Hermann and Kerr.
81
The revised ML
article 7 option 1 should be considered for adoption by Tunisia to fully benefit from the widest scope for an agreement in writing to arbitrate. This option is in keeping with Tunisian legal heritage by referring to arbitral clauses and agreements, which ML option 2 does not make explicit, through that radical broad definition of agreement does not even need to be in writing. Court support
Arbitrators appointments may be challenged by parties On examining the necessary tribunal court relationship for arbitration, it is clear the Tunisian arbitration law adheres to ML article 5 in through article 51. The court powers are those set out in the arbitration law. The Model Law accelerated a trend to minimise court intervention in ICA through its defined and balanced system of court supervision.
82
under Tunisian article 58. The challenge must be made within 15 days of the arbitrator appointment or the party becoming aware of the ground for challenge. It can be to an arbitral institution under article 58(4), thus making it compliant with ICC Rules and other rules that require an arbitral institution to consider arbitrator challenges.92 Notwithstanding this, Tunisian law under article 58(3) permits a dissatisfied party to apply to the Court of Appeal if the other party does not accept the challenge or the arbitrator in question rejects it. This must be done within 45 days of the rejection. Meanwhile the arbitral proceedings are stayed. In justification it is argued the tribunal is based on contract and has a collegial atmosphere in it, so for a tribunal to make such a decision damages the relationships within the tribunal hence the role of the court in these decisions.93 It is questionable if the Tunisian court process in this instance is a good use of legal resources; the arbitration case is suspended during the court arbitration challenge hearing under
UNCITRAL
consideration was given to excluding courts entirely. This would have hindered party freedom to choose interim measures from the court or the tribunal. The choice is also a practical matter in light of the limitation on the tribunals powers of enforcement, especially in relation to third parties. ML article 6 requires a designated court for ICA decisions. The Tunisian court appointed for international arbitration duties is the Tunis Court of Appeals where a decision is made within 3 months of request regarding validity of an arbitration clause or agreement.83 Tunisian article 52 does not say the arbitral proceedings continue pending a court decision.84 The Model Law position under article 8(2) is more practical and flexible in its allowing the tribunal to judge the wisdom of
23 YAR JULY 10, 2013
article 58(3). To always give the court final responsibility for challenges to arbitrators puts dispute resolution matters back in the hands of the court when the aim was to lighten the workload of the courts and for the parties to resolve their own disputes. The challenge decision can be reviewed at a later stage, namely at a set aside application and/or at enforcement proceedings if they wish. When the court does consider the matter, it may well have less knowledge than the remaining arbitrators of the context of the challenge or an associated arbitral institution such as the ICC. The 45 days taken by the court to resolve an arbitrator challenge at an early stage is also unnecessarily lengthy when compared to the Model Law 30 day limit for a court application and so may encourage dilatory tactics by a party.94 Arbitrators in ICA are increasingly a professional cadre, as are counsel in ICA, thus robust enough to consider challenge applications when sitting in tribunals. Therefore the role of the court may be unnecessary in this decision in some cases so parties should be able to opt out of this requirement of Tunisian law in the arbitration agreement. Resignation or incapacity of an arbitrator Appointed arbitrators may resign under the Tunisian law and the Model Law. The resignation of a party appointed arbitrator could be conducted to obstruct proceedings. This scenario is not dealt with by the Model Law nor in Tunisian law.95 ML Article 15 substitutes an arbitrator who fails to act. Similiarly, if an arbitrator dies, he is replaced and the arbitration continues.
96
The power and capacity to order interim measures span the roles and powers of tribunals and courts. Tunisian article 62 on interim measures corresponds to the original ML article 17 regarding tribunal ordered relief. Tunisian article 54 corresponds with the original ML article 9 regarding court ordered interim relief. Article 62 allows the tribunal to make interim and conservatory measures deemed necessary. Interim measures facilitate the operation of the arbitration by avoiding loss or damage and stabilising the parties relationship for the duration of the arbitration.100 Interim measures in the preparation of the original Model Law caused much controversy.101 UNCITRAL decided against including provisions for the scope or enforcement of interim measures in the original article 17; implementing states could find appropriate methods for their jurisdictions.102 Tunisia added to original ML article 17 by stating that if a party does not comply with a tribunal order, the tribunal may go to court.103 This exists because there is no other mention of tribunal enforcement powers relating to interim measures in the Tunisian arbitration law.104 It should also be noted that in Tunisia a summary judge has jurisdiction to order any provisional or conservatory measure within his jurisdiction provided that the tribunal has not been constituted.105 Malouche has argued that court ordered interim measures run counter to tribunal powers in article 62.106 He also believes Tunisian domestic arbitration article 19 would be appropriate in ICA: there should be no court interim measures once the tribunal is constituted.107 A more functional position depends on what parties require. The tribunal may not have power to provide interim measures relating to third parties for example, hence an application to court for interim relief may be appropriate during arbitral proceedings. Yet in some jurisdictions courts may only provide
The substitution is to be by the same method
of selection as the first arbitrator. None of these solutions guarantees improved tribunal performance. Selection in itself delays matters, after which the replacement arbitrator may act
97
in a dilatory way. Then there is a risk of justice delayed being justice denied. A preferable option would be to have a decision by a truncated tribunal when the truncated tribunal suspects deliberate obstruction. This option exists in some institutional rules.98 One option to support this may be for Tunisian law to provide for a court application by a truncated tribunal to empower them to render an award. A court could then consider the reasonableness of this option in each instance whilst the arbitration may proceed under the tribunal discretion until any court rejection of the application occurs. If the application is rejected, a third arbitrator could then be appointed by the appointing party so a full tribunal to continue the arbitration. Tribunal jurisdiction The established tribunal has the competence to decide its competence to determine a case under Tunisian article 61. An action by a party in court within 30 days of the unfavourable decision suspends the arbitration unlike the Model Law. The court must give a decision within 3 months.
99
interim measures for cases seated within the jurisdiction.108 Consequently harmonisation regarding interim measures was increasingly seen as necessary.109 There has been an increase in requests for interim relief over the years highlighting the need for reform because business has become more global. Parties have also an increased understanding of their rights and options.110 Where the law is uncertain, arbitrators are likely to be cautious in giving interim measures and parties may not risk asking for interim measures. This is not desirable where the court option may be longwinded.111 Thus inclusion of interim measures issuance and enforcement was considered but declined by the UNCITRAL Working Group for the revised Model Law.112 The revised Model Law amended article 17 and inserted articles 17A-17J. These elaborated tribunal power to award interim measures concurrent with that of the courts.113 The UNCITRAL Working Group considered it desirable to have clauses considering the terms, conditions and circumstances of the issuance of interim measures.114 There was much discussion of the extent of court and arbitral tribunal powers and the procedures that should be followed by them.115 A flexible approach was adopted in new articles for generic, broad categories of urgent, ex parte preliminary orders and more considered
In the interests
of efficiency the tribunal should have the discretion to proceed with the case as ML article 13(3) permits whilst the court application is heard. Interim measures
24 YAR JULY 10, 2013
interim measures which are illustrative of what can be ordered.116 The revised Model Law requires circumstances whereby the interim measures avoid imminent harm or prejudice, create a balance of hardship or preserve assets or evidence.
117
injunctions and to avoid dissipating assets. To provide powers consistent with party expectation in contemporary ICA, Tunisia should consider adopting articles 17-17J of the revised Model Law with the additional provisions of Singaporean law. Generally, ex parte preliminary orders are permissible only in exceptional circumstances.123 There are opposing arguments to tribunals having this power: it is contrary to the trust and consensus inherent in the ICA process and outcome. The right to a hearing is breached as one party does not have a chance to put its case. Furthermore, parties should be equally treated.124 Sceptics also note that the consensual nature of arbitration means the tribunal must retain its impartiality and there is also the question the effective enforcement of ex parte measures by a tribunal or before a court.125 Some systems take a strongly pro-court approach and do not permit tribunal ordered ex parte interim relief. India is one such jurisdiction.126 Others like Singapore differ notably from the revised Model Law in not expressly permitting any ex parte interim relief.127 Some commentators argue ex parte orders are compatible with ICA; due process will be adhered to. Some situations, usually urgent, justify ex parte hearings to preserve evidence or assets. The safeguards on the degree of issuance of interim relief are: at any time the tribunal may modify, suspend or terminate the order; appropriate security may be requested from the requesting party for the order;prompt disclosure required from the requesting party of any change in circumstance; party liability for costs and damages caused by the order may be required; and an obligation on the party to tell the court of any termination, suspension or modification of the interim order given by the tribunal. Although there are no enforcement powers of a tribunal for ex parte preliminary orders, a tribunal is likely to take a negative view of a party not enforcing the order.128 On reflection there
There is
also the requirement for a reasonable possibility of success on the merits of the claim, and to avoid predetermination of the merits of the case.
118
The measure must be for a harm that cannot be

119
adequately recompensed by damages and the measure must not outweigh the harm caused by the measure to the other party.
There appears to be a difference between interim measures under revised ML articles 17(2)(a)-(c), and article 17(2)(d). Article 17(2)(d) has a threshold akin only to the extent the arbitral tribunal considers relevant, whilst articles 17(2)(a)-(c) indicate an obligation to provide interim relief to an applicant party if the necessary threshold of evidence is met. The threshold levels are sensible and not onerous. The arbitral decision may not be an award, but an order, but these categories are judged by substance rather than name.
120
The enforcement of interim relief as orders and awards was also discussed during the revised Model Law drafting; articles 35 and 36 relate to awards only. No mechanism was included in the revised Model Law regarding enforcing interim relief.
121
In some quarters it was thought there was no need
for enforcement of such issues. It was argued that the moral authority of the tribunal suffices to ensure performance. Yet such powers are given in the Singapore International Arbitration Centre and International Chamber of Commerce emergency arbitrator processes relating to the parties.
122
Furthermore, Singapores International Arbitration Act gives wide powers to the tribunal to make orders for costs, discovery, preservation of property, securing sums in dispute, interim
25 YAR JULY 10, 2013
should be an explicit mention of the tribunal power to make ex parte preliminary orders in Tunisian arbitration law. This should be in parallel to a party right to seek interim relief from the court on the same criteria where tribunal power would not be effective for enforcement of an order. In summary, Tunisian arbitration law reforms on interim measures should carefully consider adopting the revised ML articles 17 and 17A-17J with the Singaporean International Arbitration Act powers provided to the tribunal to order interim relief. Tunisia may even consider going beyond it in permitting tribunals and courts to issue ex parte preliminary orders for case management efficiency. Conduct of the proceedings More broadly on procedural matters, the Tunisian law gives freedom for parties to decide the procedure for arbitration, failing which the tribunal may decide it.129 This parallels ML article 24 and article 19(2). Thus Tunisian arbitration law excludes national procedural rules and rules of evidence.
130
appointed experts prevalent in the common law tradition.134 It would be helpful to include in the Tunisian law a provision enabling party-appointed experts to cater for parties with that expectation. In tandem, there should be a power for the tribunal to order the party-appointed experts to convene before the hearing to establish agreed points and differing views. This should then be reported in writing to the tribunal.135 Applicable law In conducting arbitration it is essential for the tribunal to apply an applicable law to the substantive issues in dispute. The Model Law uses Washington Convention 1965 wording to decide applicable law; such rules of law as are chosen by the parties.136 Under the Model Law the tribunal may choose the law based on the conflict of laws rules it finds applicable.137 Article 28(2) envisages the indirect route of conflict of laws for finding applicable law by the tribunal.138 It has been argued Tunisian article 73(2) regarding the law applicable to the merits is more loosely worded than the Model Law; when required the tribunal chooses a law that is most appropriate to the case.139 This opinion ignores the significance of the term rule of law for choosing the applicability of transnational law and lex mercatoria to the matter.140 In favour of Tunisian law it may be said that the reference to law rather than law or rule of law, gives the parties some certainty as to which applicable law may be chosen by the tribunal in such circumstances. On balance though, this does not counter the loss of the option for a tribunal to choose lex mercatoria or transnational law. These are options that have grown in sophistication and importance thus viability since Tunisias Model Law adoption and thus an option to choose a rule of law should be included in Tunisian article 73(2).141
Critics of this arrangement do not give due consideration to the balance articles 63 and 64 paralleling ML articles 18 and 19. The articles preserve due process and equal treatment respectively.
131
Moreover an arbitrator has a duty to render
an enforceable award. More broadly, standards of due process are the standards at the place of enforcement and that is not always known in advance when a matter is resolved by ICA. Due process includes full opportunity in articles 63 for a party to present its case. This should be replaced by an appropriate opportunity to do so.
132
This would enable efficient
management of arbitrations in all situations by tribunals and accord with the English Arbitration Act 1996, a well-used and often referred to national arbitration law.
133
When a party fails to play its part in proceedings there is a difference between Tunisian article 70 and ML article 25 covering this eventuality. Both articles 70(1) and article 25(a) state a claimant failing to communicate its statement of claim results in a tribunal terminating proceedings. Both article 70(3) and article 25(3) state that if a party fails to attend a hearing or produce documentary evidence, the tribunal may continue the proceedings. Articles 70(2) and 25(c) differ regarding the consequences of the respondents failure to communicate his statement of defence. Tunisian article 70(2) requires the tribunal to terminate proceedings without it being an admission of the claimants case. ML article 25(b) allows the tribunal the discretion to continue the case without the failure being an admission of the claimants case. A business-like approach to resolving the commercial disputes is better accommodated by the approach in ML article 25(b) which allows termination or continuation, with continuation not being an admission of the claimants case. This avoids wasting additional time and cost in further negotiation, arbitration initiation or court action. Another aspect of arbitration conduct is the use of experts. The tribunal may in civil law tradition appoint an expert under the Model Law, but the Model Law does not mention party On turning to issues relating to the award itself, Tunisian article 79 requires reciprocity of enforcement for applying foreign awards under the NYC.143 Article 79 is still an improvement on the previous legislation which had ambiguous provisions regarding recognition and enforcement of foreign arbitral awards.144 Nevertheless it is questionable today how useful this reciprocity is with almost universal ratification of the NYC.145 Its amendment should be considered in any future law reform in light of the number of significant non-NYC ratifying states in existence at that time, such as neighbouring Libya with Matters following the issuing of an award At the end of proceedings under Tunisian law arbitral hearings must be formally closed by the tribunal as the date of the closure of proceedings is the date after which challenges for the removal of arbitrators are no longer permitted.142 It is doubtful if this adds to procedural efficiency and may even hinder due process by preventing justified late stage challenges to arbitrators. Therefore it should be removed in a future law reform. Terminating proceedings and making the award
26 YAR JULY 10, 2013
which it has a bilateral treaty regarding recognition to which article VII NYC applies enabling recognition and enforcement by alternative means to those specified in NYC.146 More broadly, Tunisian articles 79-82 restate the ML articles 35-36 on recognition and enforcement of arbitral awards, although it may have been more straightforward to have used the two article format of the Model Law.
147
of Tunisian international arbitration law. Set Off Set off is an important issue for the parameters of statements of case and for shaping the content of awards. It is not mentioned in the Model Law nor the Tunisian law, although UNCITRAL Arbitration Rules 2010 (2010 Rules) regulates set off.160 It has been considered as an area for Model Law revision.161 Set off ensures efficiency of proceedings between parties taking into consideration claims and entitlements of the parties more broadly than solely the initial claims presented to the tribunal. Various jurisdictions have different approaches to set off: the French article 1290 of the Civil Code applies set off to two countervailing debts, although French judicial procedure requires the declaration by a party of an intention to apply set off in a particular case. English law covers set off in three ways: procedurally; by abatement as a form of set off available in particular types of contracts for damage suffered; and as an equitable measure.162 This short survey suggests set off has very domestic foundations in law. In contrast, as a procedural set of rules, 2010 Rules permit set off in connection with the relationship under scrutiny in the arbitration to enhance the value of the arbitral award for the parties through its comprehensive coverage of the parties relationship.163 If Tunisian international arbitration law is to deal with set off, it should do so in this procedural matter and only permit it no later than the latest statements of case unless with tribunal permission after consideration of the circumstances. Public policy Continuing the commentary relating to awards, international public policy for recognition and enforcement respectively are covered in Tunisian articles 78(2) and 81(2). A distinction should be drawn between public policy and international public policy. Both relate to the acceptability of the subject matter for arbitration. Recent scholarship argues that arbitrability concerns the natural limitations of arbitration as a means of resolving disputes whereas public policy focuses upon a more limited area, the prohibitions to arbitration stipulated in a particular jurisdiction for example as reflected in ML article 34(2)(b)(ii) and article V(2)(b) NYC.164 International public policy is related to public policy. It is a reflection of public policy across jurisdictions. Transnational public
This two article
structure should be considered in any law reform. ML Article 35(2) sets maximal conditions for obtaining enforcement so the adopting state such as Tunisia may impose less strict standards for recognition and enforcement. and enforcement.
149 148
Essentially,
article 35 repeats article IV of NYC regarding recognition ML article 36 aligns with NYC article V regarding grounds for refusal of recognition or enforcement. The alternative article VII NYV method has already been mentioned above.
150
An award may be enforced in Tunisia if an application there for set aside fails.151 Set aside must be applied for by a party within three months of the issuance of the award. This makes setting aside impossible when it is based on a public policy ground that does not reasonably become known within 3 months of receipt of the award under Tunisian 78(3), such as bribery involved in obtaining the award. An amendment is needed to cater for a limitation of three months after the public policy issue reasonably became known to the party.152 There are no Model Law provisions regarding what happens after setting aside of an award. Many national laws are silent on the subject.
153
In Germany under art 1059(5) setting

154
aside makes the arbitration agreement operative again thereby allowing the arbitration process to restart. Interestingly Tunisian under article 78(5), where agreed by the parties, the law allows a court to decide the case on the merits when the court has set aside the award under article 80(4). If necessary this can be done by amiable compositeur if that was the parties instruction to the tribunal.
155
Sanders prefers the novel Tunisian

156
revival of jurisdiction of the court; it avoids the loss of extra time and cost to go through arbitration process again. about applying to court for it to decide.
157
What
has not been established is what happens if parties disagree Consideration in that case should be given to the court being given the statutory power to grant the request on the application of one party. 6. OTHER ISSUES FOR CONSIDERATION IN ARBITRATION LAW REFORM Despite its generally comprehensive nature, the Model Law does not cover various issues that parties increasingly encounter in ICA. These include: public policy; liability of arbitrators and arbitral institutions; multiparty and multi-contract arbitration; confidentiality; set off; and costs and fees. Some of the provisions added by Model Law adopting states to cover these areas were considered in drafting the Model Law. lack of apparent contemporary need.
159 158
policy may be an alternative description of this. This may concern procedural matters or a substantive matter in dispute. International public policy is a means of avoiding nebulous public policy that can be used by national courts to set aside or to reject enforcement awards which on first glance appear unwelcome on their merits. Thus an international arbitration award may pass assessment under international policy scrutiny to be enforced, where as a domestic award scrutinized under domestic public policy may fall foul of public policy and not be enforced by the courts. The Tunisian public policy in international arbitration is inspired in part by international public policy in pre-1981 French article 1502 and similar Belgian law.165 With globalisation French and Belgian courts considered that public policy did not relate to
Nevertheless, such
areas were not included for reasons of complexity, controversy or As with the commentary on the Model Law, the areas selected for discussion have been included to highlight issues requiring consideration in any reform
27 YAR JULY 10, 2013
forbidding arbitration from occurring. In this line of thought the arbitrator remains competent to deal with the matter, but he must consider public policy. 166 International public policy represents the common thinking of various jurisdictions and not parochial obstacles hindering award recognition and enforcement.167 Thus article 1514 of the current French Code of Civil Procedure now states, . . . manifestly contrary to international public policy. To indicate a Tunisian openness to recognising and enforcing arbitral awards, consideration should be given to amending articles 79(2) and 81(2) to the French article 1514 wording so the use of manifestly clearly demonstrates this point. Costs and fees A mundane, but important, element for parties, counsel and arbitration in an award are costs and fees. costs of proceedings. adopted.
169 168
of arbitrators has increasingly received attention in arbitration scholarship.177 The values of particular cases have grown ever larger and the expectations of parties with regard to arbitrators and arbitration institutions is increasingly exacting.178 It can also be measured in the perceived contemporary claims culture in many countries, even though arbitration rules often cover this area.179 Despite provision in arbitration rules, the liability of arbitrators and arbitral institutions requires careful consideration as a precautionary measure in any review of national arbitration law to ensure the jurisdiction remains viable for arbitrators and arbitral institutions to operate in. It is desirable to exclude arbitrator liability, institution liability and appointing authority liability unless an act was done in bad faith or perhaps a wrongdoing that was intentional.180
National
The present Tunisian position in article 11 developed the law by stating duties of an arbitrator: he may not resign unless there is a valid reason on penalty of payment of damages. In addition, an arbitrator is to comply with duties within 30 days otherwise his mandate terminates by resignation or agreement by the parties.181 The Model Law only refers in article 14 to acting without undue delay. To align with the Model Law, thought should be applied to whether the rigid 30 day limit should be replaced in Tunisian law with ML article 14(1)s less rigid undue delay. In terms of national laws there has been much variation in approach in considering liability.182 Many common law jurisdictions have inserted a provision on arbitrator liability.183 Particular examples of common law adoptions of the Model Law that include liability are Australia for fraud in respect of anything done or omitted,184 Bermuda where the law states he may be liable for the consequences of conscious and deliberate wrongdoing185 and Malta where his action or omission is attributable to malice or fraud.186 These indicate a common law tendency to address the issue. There is less tendency in civil law to address the issue. An exception is Peruvian civil law which states arbitrators are liable for damages caused by delay or failure to comply with their obligations once they accept the assignment187 Sanders proposes a good law should cover both arbitrators and arbitral institutions rather like the English Arbitration Act 1996 section 29 covering arbitrators and section 74 covering the institutions.188 A third option exists. Even though the Model Law does not fully address the liability of arbitrators, arbitral institutions and arbitrator appointing authorities, the 2010 Rules do provide some guidance to regulating this area. In these rules liability is to be limited to liability for wrongdoing in bad faith.189 The adoption of this approach by Tunisia would enforce its high fidelity factor by close adherence to general UNCITRAL attempts to tackle arbitration difficulties as well as be consistent with a benchmark set of international arbitration rules. Confidentiality
arbitration laws rarely cover fees, costs or apportionment of Tunisian law arbitration law does not do so. This is normally governed by the arbitration rules Where legislative provisions exist they often
170
duplicate arbitration rule provisions.
Sanders proposes a
costs provision for arbitrators so the court can have control of this if the arbitrators seek a court ruling.
171
Such a provision could be inserted in Tunisian law to enable arbitrators to fix their fees if no provision is made for this in the arbitral clause or agreement or the arbitration rules used.
172
A survey of law reveals that New Zealand law permits
arbitrators to refuse to deliver the award until their fees are paid. Hong Kong law permits payment of fees into court if a tribunal refuses to deliver the award until its fees have been paid.
173
A tax officer of the court will review the fee to decide
a reasonable sum that should be payable. An additional award may be rendered in Australia, Hong Kong, New Zealand and Greece if costs of arbitrators are not included in the award.174 Germany and Bermuda repeat article 40(1) of the 1976 Rules regarding arbitrator cost apportionment, essentially that costs follow the loser.
175
The 2010 Rules in article 42 contain similar
provision, albeit nuanced by the circumstances of the case. With regard to counsel fees, unless the parties otherwise agree in German arbitration law a tribunal may allocate between parties the costs necessarily incurred for proper pursuit of the claim or defence to temper expensive counsel fees.
176
This brief survey shows that provision for costs and fees for arbitrators and counsel fees by the tribunal should be considered for inclusion in Tunisian law. Arbitrators should be able to refuse to deliver the award unless they are paid. This payment could be by payment into court and taxation on the fees demanded in line with Hong Kong practice. Tunisian use of Hong Kong practice would be in line with that of a Model Law adopting state, thus keeping within range of achieving a high fidelity arbitration law, as would additional adoption of the 2010 Rules regarding counsel fee apportionment. Liability of arbitrators, arbitral institutions and arbitrator appointing authorities Concerning issues surrounding arbitration, the liability
Another issue surrounding arbitration is confidentiality. There are no confidentiality provisions in the Model Law or Tunisian law. Nevertheless, confidentiality is a key issue considered
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by parties when constructing their dispute resolution clauses.190 Variation exists in the approach to confidentiality in statute, rules and case law. Section 14E of the New Zealand Arbitration Act 1996 states that court permission is required for a party to disclose confidential information relating to an arbitration. Article 28(3) of 2010 Rules states hearings must be held in camera unless the parties agree otherwise. Yet the ICC Court regularly publishes awards in full text or sanitised.191 The 2010 Rules in article 34(5) imply a default position for confidentiality; the award may only be made public by a party to discharge a legal duty or protect a legal right. The Australian High Court rejected confidentiality to side with the public interest.
192
open hearing, which may be of significance where a Tunisian state entity is party to an arbitration and questions of public accountability can be addressed through a public court hearing. Thus the scenarios of public accountability raised in the case law of Australia, Sweden and England and Wales may be duly considered by the court when they arise at court in its supervisory capacity or in enforcement proceedings.197 Multiparty and multi-contract arbitration Ranging more broadly, multiparty and multi-contract arbitration are worthy of consideration in Tunisian international arbitration. Both raise issues of the possibility to consider all issues together either through the provisions of the arbitral clause or agreement itself, or in the absence of such provisions in accordance with the arbitration rules incorporated by reference into the arbitral clause or agreement. A final, less likely option is to do so through the terms of the national law of the seat of the arbitration.
A notable Swedish case provided a nuanced view that

193
confidentiality was procedural in nature and had to be expressly agreed if confidentiality was to be honoured beyond that limit. Leading English judgments side with confidentiality.
194
Court proceedings are often public, so legislative provision for confidentiality is needed unless court procedure contains in camera hearings anyway.
195
There was general agreement that the Model Law should not deal with third parties, consolidation or multi-contract arbitration within the UNCITRAL Working Group.198 Yet consolidation by court order has been introduced in several UNCITRAL adopting states.199 In California it is on terms the court considers just and necessary on the application of a party and with consent of all the parties.200 In Georgia (USA) s 9.9.6 of the Georgia Arbitration Code supplements s 9.9.3 on arbitration agreement validity by stating that unless the parties have agreed otherwise a party may apply to court to consolidate proceedings. In the absence of any agreement the court appoints arbitrators of the consolidated proceedings. If rules for the old proceedings are inconsistent for the new consolidated proceeding, the court will resolve the discrepancies.201 More consensually, North Carolina allows consolidation with party consent by order of the court on terms the court considers just and necessary. Like Georgia,
Section 22 of the Singapore
International Arbitration Act 2002 and section 16(1) of the Hong Kong Arbitration Ordinance 2010 state that hearings relating to arbitrations are not be held in open court unless ordered by the court on application of a party or, in the Hong Kong case, the court decides the hearing ought to be in open court. Arguably confidentiality is best left to a mix of party autonomy reflected in party agreement, arbitration rules such as the detailed provisions of World Intellectual Property Organisation, soft law like that of the International Bar Association Rules on Taking Evidence as well as national arbitration law.
196
To facilitate the Tunisian position any reform should consider paralleling a position akin to that in the Hong Kong law. Hong Kong law has the added benefit of the Court deciding upon an
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the court as a consequent action may appoint arbitrators in the absence of party agreement and decide other matters that the parties cannot agree so as to create a viable consolidated arbitration.202 In Hong Kong in an arbitration agreement it is possible to opt into a discretionary court power to consolidate proceedings and make consequent orders.
203
Tunisian laws high fidelity on this issue, rather than relying on the Tunisian Code of Obligations and Contracts. It argues that the efficiency of international arbitration in Tunisia will increase and be more bespoke to the circumstances of each case if tribunals may decide whether to continue arbitral proceedings when there are pending court decisions regarding the validity of an arbitral clause or agreement or other matters. Arbitration would also be made efficient by giving a truncated tribunal the ability to apply to court for consent to continue the arbitration to render an award. Furthermore, parties should be given the opportunity to opt out of the entitlement to apply to
Court supervision of
consolidation of cases has the advantage of greater enforceability. In Tunisia case law has developed on consolidation and the appointment of arbitrators. The court permits incorporation of third parties into cases, even though it is argued it goes beyond statutory powers to do so.
204
In Australian and New Zealand
205
and Floridian law,
court regarding a challenge to an arbitrator, thereby giving the tribunal greater influence over the management of the case, but within the consent of the parties. Courts may also contribute to efficiency and party needs if given the power to fix a time limit within which an arbitration is to commence, if this has not already been agreed by the parties.
consolidation is by the tribunal if all parties agree and the tribunal determines it is in interests of justice and an expeditious solution.
206
If an arbitral tribunal cannot agree the issue, the

207
party will will have to go to court.
In progressive, mainly common law jurisdictions it seems that the most enforceable method of considering third parties, case consolidation and multi-contract issues is through the court on terms the court considers just and necessary on the application of a party followed by orders for appointment of arbitrators and for procedural matters where required.
208
In terms of interim relief, Tunisian arbitration law has not embraced the revised ML articles 17 and 17A-17J. In an era of higher party expectation of interim measures in ICA, consideration needs to be given to providing ex parte preliminary orders, interim measures, their appropriate circumstances and evidential burdens and whether these powers should be available only to the court or to the arbitral tribunal too. It is suggested that the powers should be given to the court and the tribunal. Through the court option, orders or measures relating to third parties that the tribunal may not have the power to decide can be considered. This would also fit the free choice approach of the Model Law regarding the use of the court and tribunal for supportive measures to the arbitration. Although a tribunal appointed expert may be the most efficient method of obtaining expert evidence for the tribunal,
Providing these statutory powers to the Tunisian Court of Appeal should be carefully considered in any reform of Tunisian arbitration law. It would acknowledge developments in Tunisian case law, but clearly set out recognisable and understandable law for foreign investors, counsel and arbitrators in line with the role of national arbitration law articulated by Hermann.
209
7. CONCLUSIONS: ISSUES TO CONSIDER IN A REVISED TUNISIAN INTERNATIONAL ARBITRATION LAW It has been noted that by adopting the Model Law Tunisia ensured its international arbitration law contained generally recognised arbitration principles. It also ensured it was of good quality for foreign users in a more technical sense through reliance on the Model Law travaux prparatoires and the case law of the Model Law. Yet in the aftermath of the revision of the Model Law, the 1976 Rules and more recently the political revolution in Tunisia fuelled by economic aspiration of the population, it is time to review a dispute resolution mechanism that is likely to have an important part to play in the enhanced economic development of Tunisia. With this in mind, this dissertation has reviewed the elements of Tunisian arbitration law that warrant consideration for change in line with the revised Model Law and contemporary ICA practice worldwide. It has questioned whether Tunisia after 19 years of Model Law adoption in its international arbitration law requires a separate domestic arbitration law to accommodate domestic circumstances. It has queried the necessity of a definition in article 48(3) of commercial if the arbitration law is intended to cover generally civil and mixed arbitrations. It suggests revision of Tunisian article 6 to directly incorporate the broad definition of an arbitration agreement in writing contained in option 1 of ML article 7 to enhance the
it must be recognised that often parties have already instructed an expert by the time arbitral proceedings commence. Therefore sometimes it is more efficient or appropriate for a tribunal to accept party expert evidence. Although tribunal powers may exist relating to party experts in some cases through incorporation of arbitration rules,210 the Tunisian international arbitration law should contain non-mandatory final resort provision for party experts to ensure efficient and fair arbitral proceedings are conducted. The aim of efficiency would also be obtained by adopting the Model Law approach in article 25(b) allowing for the tribunal to decide whether to continue the claimants case if a respondent fails to communicate its statement of defence. Time is then not lost in additional negotiation, relaunching arbitration or taking the case to court. If an award is set aside, Tunisia has a novel and practical solution in requiring the court to decide the matter on its merits with the agreement of the parties under article 78(5). This mechanism could be given greater effect by reform by enabling a party to appeal to court for such a resolution when the parties disagree about resolving the matter in court. The court could then consider if, in the circumstances, it would be appropriate
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for the court to proceed to decide the dispute. The quality of arbitral decisions and awards may be preserved by addressing in any arbitration law amendment the liability of arbitrators and arbitral institutions. This should focus upon excluding liability except for wrongdoing in bad faith. This conveniently aligns Tunisian law with the 2010 Rules thus providing a framework recognisable and understandable to foreign parties, counsel, arbitrators and arbitral institutions. Little benefit appears to derive from the Tunisian requirement that the tribunal formally closes the arbitral proceedings. Indeed, it may prevent meritorious late challenges to arbitrators when information arises at the award writing phase, so impacting upon the quality of arbitration. aspect of Tunisian law should be removed. Arbitrators make decisions of greater value to parties by being able to consider consolidated arbitral proceedings and make consequent orders to achieve them. Therefore the current court power reflected in Tunisian case law should be codified on just and necessary grounds and available on a partys application with the ability to make consequent orders as in Georgia, USA. Part of a valuable outcome to parties may be considering issues of set off. As a procedural law, Tunisian international arbitration law is able to provide a procedural stage and means by which set off issues can be raised. It is recommended consideration is given to incorporating the wording of articles 21(3) of the 2010 Rules to facilitate this at the defence stage of memorials with tribunal discretion to permit such issues at a later stage if justified under the circumstances. The completion of final elements of arbitration cases may be made easier if, in the absence of provision between the parties and arbitrators or within arbitration institutional rules there is provision for payment of costs and fees in Tunisian law. Disputed arbitrator fees could be resolved by arbitrator application to court for taxation, meanwhile his award is withheld until payment is made of the reasonable fees decided by the court. An explicit power for the tribunal to consider the necessity and allocation of counsel fees within a partial, interim or final award should be made in the arbitration law paralleling tribunal powers in the 2010 Rules. The quality of arbitrations may also be enhanced by the arbitrator appointments function being transferred from the court to an arbitral institution as an appointing authority. The quality of the conduct of arbitration may also be enhanced by amending article 63 by removing full opportunity to appropriate opportunity for a party to present its case so that time in arbitral hearings is focused. Tribunals may be able to better serve parties and the issues upon which they are called to decide by being able to consider rules of law as well as law when deciding applicable law in the absence of party determination of the issue. Therefore an arbitral law reform should consider amending article 73(2) This
to that effect. With regard to ease of recognition and enforcement, Tunisian articles 79-82 should be rewritten to more closely parallel the division of issues in ML articles 35 and 36 for ease of recognition and understanding by foreign users. Consideration should also be given to removing the requirement for reciprocity of enforcement in the Tunisian law pursuant to Tunisias ratification of the NYC. Such a statement would indicate Tunisias unequivocal embrace of international investment. In terms of setting aside after provision of the award, to ensure full weight is given to any public policy matter, and thus to ensuring the legitimacy of recognising arbitral awards in Tunisian society, the time limit for making an application for set aside should be amended from 3 months from the date of the award to include three months from the date of any public policy matter reasonably being known to a party. An effect of this may be to enhance the ability of the courts to enforce public policy matters such as curtailing corruption. A further point on public policy is to reinforce in Tunisias international arbitration law that it refers to international public policy and to avoid a case by case extension of its meaning for domestic benefit. This may be done by continuing the Tunisian affinity to French law on international public policy by incorporating into Tunisian international arbitration law the wording in French article 1514 . . . manifestly contrary to international public policy. The confidentiality of proceedings and awards is an important issue in international arbitration. It is often covered by arbitration rules, however a non-mandatory position under Tunisian international arbitration law would assist parties. It is suggested reforms follow Hong Kong law in which court hearings relating to arbitrations are confidential unless ordered by the court on the application of a party, or the court of its own volition decides a matter should be heard in public. This gives the court an option of delivering justice in public when it considers it necessary, but otherwise respecting confidentiality. A reform of the Tunisian arbitration law would assist in fostering a favourable investment climate. The 1993 Tunisian law is Model Law based with a French law foundation. It is a good start: it is a law with many elements recognisable and understandable to foreign participants in ICA in Tunisia through recognition of elements of highly regarded French arbitration law and the Model Law, but the law is 19 years old. Much has developed in the practice of ICA in that time. After 19 years of the law and such a major political event as a revolution, it is time to review the Tunisian arbitration law. Possible reforms have been discussed then summarised in this dissertation. If considered in detail and implemented in a reformed arbitration law, these reforms would ensure Tunisias
Henry Clarke, Associate, Construction and Projects Group, Clyde and Co, Dubai and Riyadh
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1. This article derives from study of international commercial arbitration at the School of International Arbitration, Queen Mary University of London whilst on the Centre of Commercial Studies full time LLM programme 2011-2012. 2. See such law firms on Legal 500 http://www.legal500.com accessed on 20 July 2012. The journals include Arbitration International (1985-), ASA Bulletin (1983-), Journal of International Arbitration (1984-) and Revue darbitrage (1986-) amongst many others. The courses include the Masters in International Dispute Settlement associated with the University of Geneva, the Masters specialisation at the University of Stockholm as well as the expansion of the School of Arbitration at Queen Marys University of London as examples within Europe. 3. African Development Bank Economic Brief, 11 March 2011_The Revolution in Tunisia: Economic Challenges and Prospects_1. <http://www.afdb.org/fileadmin/uploads/afdb/ Documents/Publications/North%20Africa%20Quaterly%20Analytical%20Anglais%20ok_North%20Africa%20Quaterly%20Analytical.pdf> accessed 1 July 2012. See also B Whitaker_How a man setting fire to himself sparked an uprising in Tunisia <http://www.guardian.co.uk/commentisfree/2010/dec/28/tunisia-ben-ali> last visited on 10 July 2012). 4. For Tunisian international arbitration law in English see S Kallel, The Tunisian Law on International Arbitration, Arbitration Materials 369-391. 5. S Lieberman and others, UNCITRAL (United Nations Commission on International Trade Law): its workings in international arbitration and a new model conciliation law, (2004-2005) 6 Cardozo Journal of Conflict Resolution 73, 74. 6. E Horvath, A Handy Tool for the Settlement of International Commercial Disputes (2008-2009) Pennsylvania State Inernational Law Review, 783, 785. 7. Lieberman (n4) 78; G Herrmann, UNCITRALs Work T owards a Model Law on International Commercial Arbitration, (1983-1984) 4 Pace Law Review 537; Horvath (n5) 785 8. Lieberman (n4) 79 9. Herrmann, UNCITRALs Work Towards a Model Law on International Commercial Arbitration (n6) 538. 10. Ibid 542-543; C A Esplugues and M E McNerney, International Commercial Arbitration: The UNCITRAL Model Law (1986) 9 B. C. Intl & Comp. L. Rev. 47. 11. Esplugues and McNerney (n9) 48. 12. Herrmann, UNCITRALs Work Towards a Model Law on International Commercial Arbitration (n6) 544. 13. UNCITRAL, The UNCITRAL Guide: Basic facts about the United Nations Commission on International Trade Law, United Nations Publications: Vienna, 2007 14-15. 14. P Sanders, Quo Vadis Arbitration? (Kluwer Arbitration: The Hague 1999) 83. 15. Lieberman (n4) 84. 16. M F Hoellering, The UNCITRAL Model Law on International Commercial Arbitration (1986) The International Lawyer 328, 329. 17. Hoellering (n15), 328-329; Horvath (n5) 785. 18. Herrmann, UNCITRALs Work Towards a Model Law on International Commercial Arbitration (n6) 546. 19. H Malouche, A Brief Survey of the Tunisian Arbitration Code, ICC Bulletin (1993) 63, 64; H D Gabriel, The advantages of soft law in international commercial law: the role of UNIDROIT, UNCITRAL, and The Hague Conference, (2008-2009) Brooklyn Journal of International Law 663, 659. 20. UNCITRAL, The UNCITRAL Guide: Basic Facts (n12) 16. 21. Gabriel (n18) 665. 22. Gabriel (n18) 658-668 23. G Herrmann, The UNCITRAL Arbitration Law: a Good Model of a Model Law Uniform Law Studies, (1998) 483, 489. 24. Herrmann , The UNCITRAL Arbitration Law (n22) 486-487. 25. Ibid 487. 26. Ibid 488; Hoellering (n15) 339. 27. Herrmann , The UNCITRAL Arbitration Law (n22) 488. 28. Ibid 488; Lieberman (n4) 82; Hoellering (n15), 328; Sanders, Quo Vadis Arbitration? (n13) 147; A Broches, A Model Law on International Commercial Arbitration? A progress report on the work undertaken within the UN Commission on International Trade Law, (1984-1985) George Washington Journal of International Law and Economics, 79, 80 29. Lord Dervaird , Scotland and the UNCITRAL Model Law Arbitration International (1990) 6:1 ) 63 at 68 citing Scottish Advisory Committee: Report to the Lord Advocate on the UNCITRAL Model Law on International Commercial Arbitration, Stationary Office 1989. 30. See <http://www.uncitral.org/uncitral/en/technical_assistance_coordination.html> accessed on 10 July 2012. 31. Sanders, Quo Vadis Arbitration? (n13) 81. 32. Ibid 81. 33. Herrmann, UNCITRALs Work Towards a Model Law on International Commercial Arbitration (n6) 545. 34. Ibid 489, 545. 35. Herrmann , The UNCITRAL Arbitration Law (n22) 491. 36. Dervaird (n28) 67. 37. Herrmann , The UNCITRAL Arbitration Law (n22) 492, 499. 38. Kerr, Arbitration and the Courts: The UNCITRAL Model Law (1985) 34 International and Comparative Law Quarterly 1, 6. 39. P Sanders, Unity and Diversity in the Adoption of the Model Law Arbitration International (1995) 1, 36. 40. P Sanders UNCITRALs Model Law on International and Commercial Arbitration: Present Situation and Future (2005) Arbitration International 21:4 443; Herrmann , The UNCITRAL Arbitration Law (n22) 490; Horvath (n5) 789. 41. UNCITRAL, 2012 Digest of Case Law on the Model Law on International Commercial Arbitration (1985 with amendments as adopted in 2006) United Nations Publications: Vienna 2012. 42. Esplugues and McNerney (n9) 47. 43. Article 1(1) Model Law 44. Herrmann, UNCITRALs Work Towards a Model Law on International Commercial Arbitration (n6) 548. 45. Herrmann , The UNCITRAL Arbitration Law (n22) 486, 490. 46. Arabic, Mandarin Chinese, English, French, Russian, Spanish 47. H Malouche, A Brief Survey of the T unisian Arbitration Code (1993) ICC Bulletin 63, 63; Herrmann , The UNCITRAL Arbitration Law (n22) 486, 489; Hoellering (n15) 338. 48. Horvath (n5) 786; Herrmann , The UNCITRAL Arbitration Law (n22) 492; Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 36. 49. Sanders, Quo Vadis Arbitration? (n13) 84. 50. Horvath (n5) 787. 51. H M Al-Baharna, International Commercial Arbitration in a changing world (1994) 9 Arab L.Q. 144 52. Herrmann , The UNCITRAL Arbitration Law (n22) 485. 53. Ibid 486; Horvath (n5) 785, 790; H M Holtzmann, The Conduct of Arbitral Proceedings in UNCITRALs Project for a Model Law on International Commercial Arbitration, ICCA-Congress Series No 2 (1984) 125, 159. 54. Herrmann , The UNCITRAL Arbitration Law (n22) 499. 55. A H El Ahdab and J El Ahdab , Arbitration in Tunisia in A H El Ahdab and J El Ahdab (eds) , Arbitration with the Arab Countries, (Kluwer Law International 2011) 731. 56. Ahdab and Ahdab (n54) 731 57. F Kutty, The Sharia Factor in International Commercial Arbitration, International Journal of Arab Arbitration (2009) 63, 107. 58. Ibid 108. 59. K Qureshi, Cultural sensitivity and international arbitration, International Journal of Arab Arbitration (2009) 1:2, 42. 60. Ibid 45. 61. Ahdab and Ahdab (n54) 733; Law No 93-42 of 26 April 1993; Sanders, Quo Vadis Arbitration? (n13) 82; Malouche (n46) 63. 62. J-L Delvolv , G H Pointon, et al, French Arbitration Law and Practice: A Dynamic Civil Law Approach to International Arbitration (Second Edition, Kluwer Law International: the Hague 2009) 6-7. 63. Malouche (n46) 64. 64. Ibid 64; Kallel (n3) 369. The reform was also influenced by Belgian and Swiss arbitration law see S Carmeli and S Feriani, Tunisia in G De Palo and M B Trevor (eds), Arbitration and Mediation in the southern Mediterranean Countries, 2009 Kluwer Law: The Hague 163. 65. A Ouerfelli, Recent Developments of Arbitration Law and Practice in Tunisia ASA Bulletin (2011) 29:2 296. 66. Malouche (n46) 63; Kallel (n3) 369; Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 6; Sanders, Quo Vadis Arbitration? (n13) 98. 67. Sanders, Quo Vadis Arbitration? (n13) 92. 68. Ibid 96. 69. Ibid 99. 70. Ibid 92. 71. Esplugues and McNerney (n9) 49; Hoellering (n15) 329; Herrmann, UNCITRALs Work Towards a Model Law on International Commercial Arbitration (n6) 548 72. Kallel (n3) 370 and E Al Tamimi, The Practitioners Guide to Arbitration in the Middle East and North Africa, Juris: New York 2009 463. 73. Malouche (n46) 65 74. Sanders, The Work of UNCITRAL on Arbitration and Conciliation (2004) Kluwer Arbitration: The Hague 67.
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75. Ibid 67. 76. Ibid 63; Broches (n27) 83; Esplugues and McNerney (n9) 50; Lieberman (n4) 85; Malouche (n46) 64. 77. Sanders, The Work of UNCITRAL on Arbitration and Conciliation (n73) 67. 78. Ibid 71. 79. Ibid 67. 80. Ahdab and Ahdab (n54) 737. 81. See text relating to footnotes 24 and 37. 82. Esplugues and McNerney (n9) 54. 83. Tunisian articles 61 and 62. 84. Kallel (n3) 372; Sanders, Quo Vadis Arbitration? (n13) 109. 85. J K Shafer, New solutions for interim measures of protection in international commercial arbitration: English, German and Hong Kong law compared, Electronic Journal of Comparative Law 2:2 27-29. 86. In France a court only reviews an arbitration agreement if the arbitration has not yet commenced, and if it does review it, it will refer it to arbitration unless it is manifestly null (article 1458 Code of Civil Procedure). In England under s32 of the English Arbitration Act a limited right of review exists by a court. A fuller review exists under the s4 of the US Federal Arbitration Act. 87. As argued for the Model Law. See Sanders, UNCITRALs Model Law on International and Commercial Arbitration: Present Situation and Future (n39) 448 and 467. 88. Sanders, Quo Vadis Arbitration? (n13) 105; Herrmann , The UNCITRAL Arbitration Law (n22) 494. 89. Tamimi (n71) 465. 90. Section 8(3)(a)(ii) International Arbitration Act 2008 of Mauritius. 91. For a list of these see Tamimi (n71) 459-460; Carmeli and Feriani (n63 )178-180. 92. Kallel (n3) 373. 93. Ibid 371. 94. Herrmann , The UNCITRAL Arbitration Law (n22) 495. 95. Broches (n27) 87. 96. Ahdab and Ahdab (n54) 748; Sanders , UNCITRALs Model Law on International and Commercial Arbitration: Present Situation and Future (n39) 477. 97. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 176. 98. Ibid 176. See article 17(2) Rules of the Arbitration Institute of the Stockholm Chamber of Commerce and article 12 of the London Court of Arbitration Rules. 99. Article 61(3); Malouche (n46) 67; Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 15. 100. S M Chao and S Menon, Reforming the Model Law Provisions on Interim Measures of Protection (2006) Asian Intl Arb J 5. 101. Lieberman (n4) 9. 102. Broches (n27) 86; Chao and S Menon (n99) 2. 103. Sanders, Quo Vadis Arbitration? (n13) 111; Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 100; Malouche (n46) 67. 104. Tamimi (n71) 471. 105. Ahdab and Ahdab (n54) 751. 106. Malouche (n46) 66. 107. Ibid 66. 108. See the arbitration laws of China (article 68), Italy (article 818) and Argentina (article 753) for example. 109. Chao and Menon (n99) 22. 110. Ibid 2. 111. Ibid 5. 112. Ibid 3. 113. Esplugues and McNerney (n9) 57; Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 99. 114. Chao and Menon (n99) 6. 115. Lieberman (n4) 9. 116. Chao and Menon (n99) 7. 117. Article 17(2) Model Law. 118. Model Law article 17A(1). 119. Article 17(2)(a) Model Law. 120. Chao and Menon (n99) 7-9; case law typical of this view: Blumenthal v Merrill Lych, Pierce, Fenner, Smith Inc (1990) 910 F2d 1049; Publicis Communication and Publicis SA v True North Communications Inc (2000) 206 F 3d 725 XXV YBCA 1152 121. Lieberman (n4) 93; Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 99. 122. See Rule 26.2 and Schedule 1 to SIAC Arbitration Rules 2010; Article 29 and Appendix V ICC Rules of Arbitration 2012. 123. Chao and Menon (n99) 10. 124. Ibid 10. 125. Ibid 15. 126. Chao and Menon (n99) 25; Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 65. 127. Section 12, Singapore International Arbitration Act 2012. 128. Chao and Menon (n99) 14. 129. Article 64(2) 130. Al-Baharna (n50) 153. 131. Esplugues and McNerney (n9) 53. 132. Sanders , UNCITRALs Model Law on International and Commercial Arbitration: Present Situation and Future (n39) 453-454, 468. 133. S 33(1)(a) English Arbitration Act 1996. 134. Ahdab and Ahdab (n54) 753. 135. Akin to a suggestion for the Model Law in Sanders , UNCITRALs Model Law on International and Commercial Arbitration: Present Situation and Future (n39) 459, 468469; Model Law article 26 and Tunisian article 71. 136. Broches (n27) 90. 137. Sanders, The Work of UNCITRAL on Arbitration and Conciliation (n73) 117. 138. Herrmann , The UNCITRAL Arbitration Law (n22) 493. 139. Malouche (n46) 67. 140. Lieberman (n4) 87; Herrmann , The UNCITRAL Arbitration Law (n22) 494. 141. See J D M Lew, L A Mistelis and S M Krll, Comparative International Commercial Arbitration, Kluwer Law International: The Hague 2003: 453-461. 142. Article76(2). 143. Tunisia signed the NYC in 1967. 144. Kallel (n3) 375. 145. Ahdab and Ahdab (n54) 767. 146. Ibid 480. 147. Malouche (n 46) 68. 148. Herrmann, UNCITRALs Work Towards a Model Law on International Commercial Arbitration (n6) 563; Hoellering (n15) 338. 149. Sanders, Quo Vadis Arbitration? (n13) 122. 150. Broches (n27) 93; Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 179. 151. Malouche (n46) 68. 152. As argued by for the Model Law in Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 128. 153. Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 22. 154. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 132. 155. Kallel (n3) 374; Malouche (n46) 68; Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 22. 156. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 133. 157. Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 23. 158. Sanders, Quo Vadis Arbitration? (n13) 123. 159. H M Holtzmann and J E Nauhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary (TMC Asser and Kluwer: The Hague and Boston 1989) 1118.
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160. Articles 21(3) and 22. 161. Tamimi, (n71) 473. 162. C Fountoulakis, Set Off Defences in International Commercial Arbitration: A Comparative Analysis, Hart: Portland 2011 216-228. 163. Article 21(3). 164. S L Brekoulakis, On arbitrability: persisting misconceptions and new areas of concern, in L Mistelis and S Brekoulakis (eds), Arbitrability: International and Comparative Perspectives (2009) Kluwer Law International: The Hague 20. 165. If the recognition or execution is contrary to international public policy, article 1502; Sanders, Quo Vadis Arbitration? (n13) 118; Malouche (n46) 68. 166. A Ouerfelli, Lights on the Tunisian Case Law and the Application of Public Policy in Arbitration Intl J of Arab Arb 51, 52 167. Ibid 54. 168. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 148, 151 and 154. 169. Ibid 145. 170. Sanders, Quo Vadis Arbitration? (n13) 128. 171. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 155. 172. Holtzamann and Nauhaus (n158) 1119. 173. An idea set out relating to the Model Law in Sanders, UNCITRALs Model Law on International Commercial Arbitration: Present Situation and Future (n39) 473. 174. Ibid 473. 175. Ibid 473. 176. Section 1057. 177. Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 34 178. See the parallel arbitrations: Yukos Universal Ltd (UK Isle of Man) v Russian Federation; Hadley Enterprises (Cyprus) v Russian Federation; Veteran Petroleum Trust (Cyprus) v Russian Federation accessed on 19 July 2012 at http://www.encharter.org/index. 179. Sanders, Quo Vadis Arbitration? (n13) 149-150. 180. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 165. 181. Tunisian Article 59. 182. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n 73) 161. 183. Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 35. 184. Section 28 185. Section 34 186. Section 20(3) 187. Article 16(2); Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 35. 188. Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 474. 189. Article 16. 190. 2010 International Arbitration Survey: Choices in International Arbitration, Queen Mary and White and Case 3, 29-31. 191. Horvath (n5) 789. 192. Esso Australia Resources and others v The Honorable Sidney James Plowman and others [1995] 193 CLR 10. 193. Bulgarian Foreign Trade Bank v AI Trade Finance [2001] XXVI Ybk Comm Arb 291 194. Ali Shipping Corporation v Shipyard Trogir [1998] 1 Lloyds Rep 643; Department of Economics Policy and and Development of the City of Moscow v Bankers Trust Co [2005] 2 QB 207. 195. Horvath (n5) 789. 196. Sanders , UNCITRALs Model Law on International and Commercial Arbitration: Present Situation and Future (n39) 476. 197. See footnotes to 191 to 195. 198. Sanders , UNCITRALs Model Law on International and Commercial Arbitration: Present Situation and Future (n39) 471. 199. Ibid 471. 200. ss 1297.272 Californian Code of Civil Procedure. 201. Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 31. 202. s 569.11 North Carolina Revised Uniform Arbitration Act. 203. Section 99 referring to sections 1 and 2 of Schedule 2 of the Hong Kong Arbitration Ordinance 2010. 204. For commentary see Ouerfelli, Recent Developments of Arbitration Law and Practice in Tunisia 304-305. 205. Sanders, UNCITRALs Model Law on International and Commercial Arbitration: Present Situation and Future (n39) 471. 206. s684.12; Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 30. 207. Sanders, The work of UNCITRAL on Arbitration and Conciliation (n73) 145; see s 4 New Zealand Arbitration Act 1996. 208. Sanders, Unity and Diversity in the Adoption of the Model Law (n38) 31. 209. See text to footnote 24. 210. Article 27 of the 2010 Rules or articles 22, 23 and 25 of the International Chamber of Commerce International Court of Arbitration Rules 2012
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MOTIVATION OF ARBITRAL AWARDS: A FEW NOTES

By Duarte Gorjo Henriques
Decide promptly, but never give any reasons. Your decisions may be right, but your reasons are sure to be wrong. William Murray, 1st Earl of Mansfield I. Giving reasons for any judicial, administrative and even arbitral decision comes to our mind almost as an intuitive requirement for such decisions and seems to be a natural reflection of elementary principles of any rule of law. Specifically in the arbitration context, motivating an award enables the parties to understand the reasoning of the award, persuades the parties to comply with it and helps to ensure the awards enforceability. For the Portuguese legal culture and judicial system it is rather unquestionable and patently obvious that any given decision, being a judicial or an arbitral one, shall state its reasons as any person or persons affected by such decision is entitled to know exactly what the respective grounds are. Like the legal Latin proverb stated, a decision has the power to turn white into black and square into circle (facit de albo nigrum aequat quadrata rotundis) and as so, any person subject to that kind of change should know exactly why the colour or shape has changed. Somehow conversely there was a tradition that could be
found within some jurisdictions, some statutes on international arbitration and also among some legal commentators, according to which grounding and motivation was not required in order to ensure a valid and enforceable award. Lord Mansfields quote above is the reflection of this legal tradition and we would easily concede to this point of view if we would thought of the single and conspicuous advantage of having decisions without motivation: if no motivation was required, no reason or doubt would arise to substantiate an appeal and the decision would be by itself peacefully sufficient to settle any dispute. And this would be even more true if we thought of one of the general and primarily rules of arbitration, which is precisely the absence of appeal (at least by default). But disregard motivation of the award has the enormous danger of allowing the confusion between the service of justice (or the settlement of disputes if we should so limit the role of arbitration) and the individual discretion or even the arbitrariness, specially when the arbitral tribunal may decide the dispute ex aequo et bono. This is the reason that the motivation of any decision is considered as an aspect of the right to a fair trial according to Art. 6 of the European Convention on Human Rights and is also reflected in various Constitutional Laws, namely the Constitution of the Portuguese Republic (Art. 205, par. 1). This principle extends not only to judicial
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decisions but also to administrative decisions and there is no reason for being inapplicable to arbitral awards. Accordingly, that tradition is being progressively
in Portugal. This is the key issue that I wish to address in this article, which will be therefore related to determine the extension of the reasoning required, if any, under the Portuguese law.
abandoned giving room to a trend on recent statutes of international arbitration and recent arbitration laws where the requirement of motivation of the award can be found. For example, one can find such requirement under the 1961 European Convention on International Commercial Arbitration, under the Belgian Law, under the German Law and even under the English 1996 Arbitration Act. Giving a glance at the rules of arbitration of some institutionalized centres of arbitration, reasoning is required under the ICC 2012 Rules (Art. 31, par.2), under the Swiss Chambers of Commerce Association rules (Art. 32, par. 3), under the LCIA rules (Art. 26.1), under the AAA- ICDR Arbitration rules (Art. 27.2) and under the SCC rules (Art. 36, par.1) among others. II. The Portuguese Law is no exception to this understanding. As a matter of fact, one can also find the reasoning requirement under the Portuguese Civil Procedure Code (Art. 668, par. 1, al. b) and Art. 158) and more particularly under the new Portuguese Arbitration Act (Law No. 63/2011, of December 14, 2011, simply LAV). However, also reflecting a general trend, the LAV admits that the parties may agree to dispense with reasons. According to Art. 42, par. 3 of the LAV, the award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or the award is rendered on the basis of an agreement of the parties under article 41.
III. We shall firstly look at the Portuguese legal regime concerning the recognition and enforcement of foreign arbitral awards. This legal regime is primarily set out in the LAV. The Art. 55 of the LAV provides that without prejudice to the mandatory provisions of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, as well as to other treaties or conventions that bind the Portuguese State, the awards made in arbitrations seated abroad shall only be effective in Portugal, regardless of the nationality of the parties, if they have been recognized by the competent Portuguese State court, under the present chapter of this Law.2 There is also a legal provision foreseeing the grounds for the refusal of the recognition and enforcement of foreign arbitral awards (Art. 56 of the LAV) which is identical to the Art. 36 of the UNCITRAL Model Law and similar to the Art. V of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NYC 1958). However, none of these provisions addresses the question of lack or insufficiency of reasoning as an explicit and specific ground to refuse recognition and enforcement of an arbitral award. Furthermore, there is a peaceful understanding that
Reasoning is therefore required by default and the absence of motivation, when the parties have not agreed to dispense with reasons, is a specific and clear ground for annulment of the arbitral award: an arbitral award may be set aside by the competent State court only if [] vi) the award was made in violation of the requirements set out in article 42, paragraphs 1 and 3 cfr. Art. 46, par. 3, a) of the LAV. The first cited legal provision of LAV matches exactly the Art. 31 (2) of the UNCITRAL Model Law on International Commercial Arbitration (2006 amendments) but under the Model Law, absence of motivation is not an express ground for set aside an award or even to refuse the recognition of an arbitral award (cfr. Art. 34 and Art. 36 of the Model Law). Nevertheless it is crystal clear that any arbitral award drawn up under and submitted to the LAV shall state the reasons upon which is based. This conclusion applies both to domestic arbitrations and to international arbitration procedures having its place in Portugal : the provisions of this Law on domestic arbitration shall apply to international arbitration, with the necessary adjustments (par. 2 of Art. 49 of the LAV). Thus, no doubts arise concerning the necessity of motivating any arbitral award subject to the Portuguese Law (both domestic and international arbitrations held in Portugal). The question remains as to the foreign arbitral awards that are subject of a request for recognition and enforcement procedures
the legal provisions concerning the refusal of recognition and enforcement of arbitral awards set out an exhaustive list of the grounds for that refusal.3 The legal provisions of the Portuguee LAV (Art. 56) are no exception to this understanding.4 Notwithstanding, looking at the range of possible grounds for refusal of the recognition and enforcement of the award provided for at the Art. 56 of the LAV, there are two possible paths to explore, although none of them seems to be solid ground at first sight. The first one would be to consider that the absence of motivation entails the violation of the principles of due process.5 The second would be to consider this failure as a breach of public policy principles. Considering the lack of reasoning as a breach of the principles of due process is certainly a long shot with too many shortcomings. In fact, the principles of due process are mostly related to the right of both parties being treated equally and have an equal chance to fairly and properly be heard during the course of the proceedings (presenting its factual and legal arguments in an adversarial manner) which clearly does not have any connection with the award itself and the motivation behind it. As this issue has been clearly place [d]ue process should not be confused with the requirement that arbitrators give reasons for their award. () the failure to give reasons is not in itself contrary to the principle of due process.6
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This due process theory does not seem to be a reasonable argument to sustain.
interpreted with restrictions. Would lead to a result, establishes a direct connection
IV . On the other hand, approaching the possible breach of public policy principles would justify by itself a deeper analysis, which is not within the scope of this article. Therefore, I will limit myself to summarize some short ideas. First of all, one should pay particular and careful attention to the specific wording of the LAV. The Art. 56, par. 1 of the LAV provides that Recognition and enforcement of an arbitral award made in an arbitration taking place in a foreign country may only be refused () b) If the court finds that: () ii) The recognition or enforcement of the award would leads to a result clearly incompatible with the international public policy of the Portuguese State. In this text there are some key words that I would like to stress: may only be refused; would lead to a result; clearly incompatible; and international public policy. May only be refused, I should stress once again, entails the conclusion that we are facing an exhaustive list of possible grounds for the refusal of the recognition and enforcement. But besides that, this conclusion also leads to a restrictive interpretation of any of the provided grounds for the refusal. All possible grounds as provided by this legal provision must not be regarded with any broad meaning and wideness must not be allowed. Even the breach of public policy, which has a broad and vague scope by nature, should be construed and
to the final result or determination of the award not the logic process of construing and producing such award. What should be regarded as producing a result (clearly incompatible with the international public policy of the Portuguese State) are the contents of the award, more precisely the dispositive part of the award. What is able to produce a certain result is the effective determination of the issues in dispute, not the reasons (or the absence of reasons) of such determination. Clearly incompatible, in the sense that the incompatibility shall be manifest, notorious or even egregious. Any incompatibility does not suffice. It must be a notorious one. Finally, the result of the award must be incompatible with the international public policy of the Portuguese State. The international public policy of a State is by nature narrower than the domestic public policy as the latter comprises the former. At least they are different. As Albert van den Berg wrote, The distinction between domestic and international public policy means that what is considered to pertain to public policy in domestic relations does not necessarily pertain to public policy in international relations. According to this distinction, the number of matters considered as falling under public policy in international cases is smaller than that in domestic ones. The distinction is justified by the differing purposes of domestic and international relations.7
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Therefore, any approach to a possible breach of the international public policy of the Portuguese State necessarily entails a more restrictive assessment, to which is predominant the consideration of the purposes and principles of the international relations and international commerce. Thus, the question that needs to be asked is whether or not the lack of motivation of a foreign award necessarily implies a breach of those purposes and principles (better said, leads to a result violating those purposes and principles). And is it clearly incompatible? Considering those key points, I think that the lack of motivation of a foreign award shall not produce a clear incompatibility with the international public policy of the Portuguese State. This understanding is broadly accepted: The courts have likewise held that other procedural rules are not matters of international public policy. This is the case of the requirement that the arbitrators should give reasons for their award. The Cour de Cassation held in one case that the failure to give reasons is not in itself contrary to the French understanding of international public policy. It is only where the law applicable to the procedure or the arbitration rules stipulate that reasons must be given to that non-compliance with such requirement would justify the award being set aside or refused enforcement, on the grounds that the arbitrators failed to comply with their brief.
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Again, I dont think that the principles and rules of international public policy may set out a requirement of motivating any arbitral award. V . One should assert that under the LAV legal provisions and specifically under the provisions for the recognition and enforcement of foreign arbitral awards, lack of motivation is not a ground for refusal such recognition and enforcement. The Portuguese LAV intended to draw a parallel with the NYC 1958 where the absence of reasoning is not a ground for refusal of foreign arbitral awards. Hence, the main issue that we should assess here is whether the foreign award was made and is valid and binding according to the law that applies to the arbitration proceedings (lex loci arbitri). If the award was not made according to those provisions, the award may well be subject to an annulment law action in the state court of the place of arbitration and such legal action will then be a ground to refusal of recognition and enforcement under the Art. 56, par. 1, a), v), of the LAV, even with the option of staying the recognition or enforcement proceedings (cfr. the Art. 56, par. 2 of LAV). If the lex loci arbitri allows awards with no reasoning one should reasonably raise the question of whether should the court of recognition or enforcement demand such requirement. And I think that it should not. In my opinion, this is the reasoning underlying the LAVs recognition and enforcement of foreign arbitral awards legal framework, which tends to disregard such requirement in what foreign arbitral awards are concerned. VI. Nevertheless, we may reasonably discuss another argument to consider the absence of reasoning as a ground for refusal of recognition and enforcement of foreign arbitral awards. This argument is found outside the legal framework of the LAV and is of a constitutional nature. As above mentioned, the Art. 205, par. 1 of the Constitution of the Portuguese State provides that court decisions that are not merely administrative in nature shall set out their grounds in the form laid down by law. Once again, the scope of this article will just allow me to line out very short ideas, mostly collected from the strict literal sense of this constitutional provision. This constitutional provision grants the law (ordinary law as we may categorize it under the Portuguese legal system) the power to lay down the how or the manner9 in which the motivation of court decisions is required which means that a certain amount of freedom was granted to the ordinary legislator. Accordingly, the Art. 42, par. 3 of the LAV provides that the motivation of arbitral awards is required unless the parties have dispense with motivation. This new version matches exactly the former Portuguese Arbitration Act (Law n 31/86 of 29 August LAV 86). The contractual freedom that underlies the right to resort to arbitration justifies and allows that the parties may dispense with reasons of the award and no injunctive provision was set out in this matter turning the right to motivation as of a non-waivable or non-disposable of nature. These principles would
Although it may not be a decisive argument, the fact is that allowing a broad perspective and understanding of the public policy is capable of open the door to discuss and review the merits of the dispute which is a result that clearly has to be avoided. On the other hand we might well consider the strength that the international public policy may lay on this issue. It is quite peaceful the understanding that public policy is considered as a certain set of principles and legal provisions of an economic, cultural, social, ethical and legal nature, being of fundamental concern to the state and to the whole society. If those principles and provisions are related to the relations between entities from different countries or to the international trade in a general sense, we may refer it as international public policy. Due to the nature of the interests involved in such provisions (of public policy) it is understood that those provisions cannot be derogated nor even waived by the parties or the respective rightholder. But the fact is that under the Portuguese Law, despite the fact that motivation is a requirement that may find a constitutional harbor, arbitral awards may not require their reasoning. The parties may dispense with motivation (as seen above). By mutual consent, it is true, but in any case they may dispense with. Which leads us to the conclusion that motivation is not of the same nature or relevance as the interests beneath the public policy principles and rules. And if this is accurate about domestic arbitration and domestic arbitral awards more has to be about foreign arbitral awards. Theres no reason here to treat differently domestic and foreign arbitral awards.
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also allow the legislator to generically dispense with reasons of the arbitral awards (which was not the case of the Portuguese Law). As far as the Portuguese jurisprudence is concerned, I am not aware of any court decision that challenged the constitutionality of such provision of the LAV (both new LAV and LAV 86). Thus, if a foreign arbitral award has no motivation in compliance with a lex loci arbitri that requires no reasoning for a valid and enforceable arbitral award, I dont think that a breach of this Portuguese constitutional provision arises. But if I am seeing right, if a party is seeking in Portugal the recognition or enforcement of a foreign arbitral award that has no motivation in breach of a lex loci arbitri that requires such requirement, we may well face a final result of a decision violating this constitutional command. In other words, if a foreign lex loci arbitri requires motivation of the arbitral award, a Portuguese court decision that would interpret and construed the Art. 56 of LAV in a sense that dispenses with reasons, recognizing or enforcing an arbitral award in breach of such lex loci arbitri provision would lead to a result materially breaching the above cited constitutional provision. I am not aware of any court decision or opinion that stands for this understanding but I did not find any decision or opinion in the reverse sense either and I cant think of a reason to eliminate it at its outset. Therefore, I think that preponderance has to be granted to this constitutional argument. VII. Anyway, it is indisputable that a recognition and
enforcement proceeding of a foreign arbitral award in Portugal will have to face and deal with the local legal tradition and with a certain propensity of the local courts to apply the Portuguese law in strictly and stiffly terms to any subject matter that is submitted to its decision. That is, it is not unthinkable that a court decision will require motivation of a foreign arbitral award in any circumstance and regardless of the fact that such requirement is not set out in the lex loci arbitri. Therefore, a cautious approach is advisable specially because using such caution does not involve a great deal of effort. Motivation is therefore recommended. But what is the extension of such reasoning? I will spare just a few considerations. Firstly, we should bear in mind that the LAV does not set up any degree or extension of the motivation. It simple provides that the arbitral award shall state the reasons upon which it is based. Secondly, there are court decisions that require just a simple and mere motivation. For example, the decision from the Portuguese Supreme Court of Justice dated of 10-07-2008 (available at www.dgsi.pt) determined that only total and absolute lack of motivation would be a ground for annulment of the arbitral award, but not the simple insufficiency or shortcoming of the reasoning of the arbitral award. (ENDNOTE: Nevertheless, applying the general principles of civil procedure and the rules applicable to the judicial decision, I think that it is possible to draw a conclusion according to which the flagrant and irreconcilable contradiction between the reasoning and the
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determination of the award may be considered absolute lack of reasoning. However, this is an issue that time and size of this article does not allow me to deepen.) On the other hand, although some decisions require the statement of the facts and the evidence produced to ascertain those facts (for example the decision from the Portuguese Supreme Court of Justice dated of 15-05-2007), one very stiff and rigid decision can be found requiring a critical analysis of the evidence produced (decision of the Oporto Court of Appeals dated of 11-11-2003, available at the above referred website). Generally, there is a common understanding that the legal criteria applicable to the court final decisions should be also applicable to produce a final arbitral award (for example the decision from the Portuguese Supreme Court of Justice dated of 17-05-2001 also available at dgsis webiste) and those legal criteria are simply stated as follows: listing of the established facts, designation, interpretation and application of the legal rules (cfr. Art. 659, par. 2 of the Portuguese Civil Procedure Code). Thirdly and following last note, any decision necessarily involves a legal syllogism where the major premise is the law, the minor premise is the fact (or bundle of facts) and the conclusion is the determination itself. Giving this generic notion, one can easily adhere to the idea of using the criteria required under the Portuguese Civil Procedure Code as a (mere) guideline where some basic milestones have to be verified, but not as a mandatory roadmap. Accordingly, the first requirement for the motivation shall be a list of the facts established by the arbitral tribunal as a result of the evidentiary activity taken during the proceedings. I dont think that a list of the facts that remain to be proven is required nor even a critical analysis of the evidence produced shall be demanded. What is paramount is a set of facts that shall be used by the arbitral tribunal to decide the dispute.
Further, finding, interpreting and applying the legal rules is necessary. And afterwards, it will follow the legal reasoning which is supposed to produce and afford an intelligible determination. Concerning this issue, it should be borne in mind that produce reasoning is not deciding all the legal arguments raised by the parties. As is common understanding, a decision is supposed to determine legal issues, not legal arguments. Further, Redfern and Hunters advice still remains accurate in face of the Portuguese Arbitration Act: The object should be to keep the reasons for a decision as concise as possible and limited to what is necessary, according to the nature of the dispute. The parties want the essential reasoning underlying the decision, not a lesson in the law.10 VIII. In short: a) motivation of an arbitral award shall be regarded as a mandatory requirement unless i) the lex loci arbitri grants the parties the power to dispense with reasons (which is the case of the Portuguese Law) and the parties effectively have dispensed with reasons or; ii) the lex loci arbitri does not set out motivation as requirement for the validity and enforceability of the award; b) the motivation should follow the Portuguese Civil Procedure Code provisions as a guideline: listing of the established facts, designation, interpretation and application of the legal rules (cfr. Art. 659, par. 2 of the Portuguese Civil Procedure Code); c) it is crucial that the arbitral award determines the issues at dispute (and all the issues at dispute ) but not the legal arguments invoked by the parties; d) any simple, concise but nevertheless conspicuously thorough decision shall meet the legal requirements in what the motivation is concerned.
Duarte Gorjo Henriques
1. According to paragraph 1 of art. 49 of the LAV an arbitration is considered international when international trade interests are at stake. 2. There is a very disturbing decision from the Portuguese Supreme Court of Justice, dated of 19/03/2009 and available at http://www.dgsi.pt/jstj.nsf?OpenDatabase which stated that foreign arbitral awards were not required to be recognized in Portuguese state courts as Portugal became party of the NYC 1958. This decision was (somehow) overruled or at least forgotten by a decision from Lisbon Court of Appeals dated of 08/06/2010 and available at http://www.dgsi.pt/jtrl. nsf?OpenDatabase that clearly stated that despite the fact that Portugal is a party bound to the NYC 1958 this would not exempt the process of recognition of foreign arbitral awards. That Supreme Court decision was also sharply criticized by Jos Miguel Jdice and Antnio Pedro Pinto Monteiro - Portuguese edition of Do reconhecimento e execuo de decises arbitrais estrangeiras ao abrigo da Conveno de Nova Iorque Anotao ao acrdo do Supremo Tribunal de Justia de 19/03/2009, in Revista Internacional de Arbitegem e Conciliao, 2010. Nevertheless, I think that now the new wording of the Art. 55 of LAV leaves no room for such bold interpretation of the NYC 1958 and the Portuguese Law. 3. Nigel Blackaby and Constantine Partasides with Alan Redfern and Martin Hunter - Redfern and Hunter on International Arbitration, 5th edition, Oxford, 2009, pag. 639. 4. Cfr. inter alia, Manuel Pereira Barrocas, Portuguese edition of Lei de Arbitragem Comentada, Almedina, 2013, pag. 202. 5. This principle is supposed to be construed from the Art. V , 1., (b) of NYC 1958, Art. 36, (1), (a), (ii) of the UNCITRAL Model Law and Art. 56, 1, a), ii) of the Portuguese LAV. 6. Fouchard Gaillard Goldman (On International Commercial Arbitration, Kluwer Law International, 1999), pag. 948. 7. Albert van den Berg, The New York Convention of 1958: An Overview available online at http://www.arbitration-icca.org/media/0/12125884227980/new_york_convention_of_1958_overview.pdf 8. Fouchard Gaillard Goldman (On International Commercial Arbitration, Kluwer Law International, 1999), pag. 959. 9. I should note that I collected this wording from an English version of the Constitution of the Portuguese State available at the official site of the Assembleia da Repblica - Parliament of the Republic of Portugal: www.parlamento.pt - and the word form is used here in a sense of manner or way but not in a sense of formality. 10. Nigel Blackaby and Constantine Partasides with Alan Redfern and Martin Hunter - Redfern and Hunter on International Arbitration, 5th edition, Oxford, 2009, pag. 557.
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28 USC 1782 An American Wingman for International Arbitration Disputes

By Andr Fonseca
i) Introduction 28 USC 1782 is a statutory provision that authorizes U.S. courts to grant discovery assistance to individual persons/companies involved in disputes before a foreign or international tribunal, outside the United States of America. The statute provides the basic requirements and parameters of the scope of discovery available for interested parties seeking information/proof located in the United States for use in foreign proceedings. In the words of Professor Hans Smit, principal draftsman of the 1964 amendments to 1782, () in Section 1782 of the Judicial Code, the United States properly makes its assistance available in connection with foreign proceedings irrespective of its own interest or that of its nationals in those proceedings () .
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Recently, the importance of 1782 to international arbitration has been particularly on the spotlight thanks to the Chevron v Ecuador saga, having assumed a crucial role in the latest and decisive turnover of events in the case. The present article intends to provide a brief insight of Section 1782 scope and key procedural issues by looking to the most relevant jurisprudence, its interface with international commercial arbitration, and the practical importance that it can have in the context of international arbitration procedures. ii) Scope of Section 1782 a) The Statute The Statute, in its relevant part, provides the following: 28 U.S.C. 1782: US Code - Section 1782: Assistance to foreign and international tribunals and to litigants before such tribunals
The importance of 1782 for international arbitration is therefore obvious, as this mechanism may constitute a useful aid for parties involved in arbitration proceedings. However, divergence remains among U.S. courts regarding if this mechanism may or not be used in the context of a commercial arbitration procedure.
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(a) The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. [] b) Scope of application Since Section 1782 entered into force that there has been much debate regarding its exact scope of application, particularly, if the mechanism can allow ancillary discovery in the context of foreign arbitration proceedings. \Several initial U.S. court decisions followed a restrictive approach regarding the foreign or international Tribunal requirement . However, although some decisions like National
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Regarding this last issue, although the Supreme Court did not directly decide the question of whether a commercial international arbitration tribunal would be considered a foreign or international tribunal under 1782, the Court quoted with approval a law review article by Professor Hans Smit that stated [t]he term tribunal [ ... ] includes investigating magistrates, administrative and arbitral tribunals, and quasi-judicial agencies, as well as conventional civil, commercial, criminal, and administrative courts. In a footnote, the Court stated that [i]n light of the variety of foreign proceedings resistant to ready classification in domestic terms, Congress left unbounded by categorical rules the determination whether a matter is proceeding in a foreign or international tribunal. In the context of Intels v Advanced Micro Devices specific proceedings, the Supreme Court held that the Commission of the European Communities qualified as a foreign or international tribunal within the meaning of 1782. In supporting its holding, the court referenced the legislative history of 1782 and noted that the legislature intended to include quasi-judicial bodies within the meaning of the term (instead of limiting 1782 to conventional courts). And also, that the European Commission acted as a first-instance decision maker that had quasi-judicial qualities, subject to review by a conventional court. Thus, for these reasons, the European Commission qualified as a quasijudicial body under 1782.
Broadcasting Co, Inc. v. Bear Stearns & Co. began to pave the
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way to include intergovernmental arbitral tribunals, the courts still showed little willingness to also include private arbitration tribunals within the scope of 1782 formula. The Intel landmark:
Also, the Intel decision provided four important factors The Intel Corp. v Advanced Micro Devices, Inc. decision by
4
in order to assist U.S. district courts in the future exercise of their discretion in permitting (or not) discovery pursuant to 1782: Whether the documents or testimony sought are within the foreign tribunals jurisdictional reach and thus accessible absent 1782 aid; The nature of the foreign Tribunal, the character of the
the U.S. Supreme Court is often considered a game-changer in the way that U.S. courts interpreted 1782. In its ruling, the Supreme Court clarified several important issues regarding the exact scope of application of this mechanism. Specifically, the Court decided on 4 important procedural issues: First, it considered that Section 1782(a) does not impose a foreign-discoverability requirement stating that although 1782(a) expressly shields from discovery matters protected by legally applicable privileges, nothing in 1782(a)s text limits a district courts production-order authority to materials discoverable in the foreign jurisdiction if located there. Nor does the legislative history suggest that Congress intended to impose a blanket foreign-discoverability rule on 1782(a) assistance;
proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance; Whether the application conceals an attempt to circumvent foreign proof gathering restrictions or other policies of a foreign country or the United States; Whether the application contains unduly intrusive or
Second, it stated that the proceeding for which discovery is sought under 1782(a) must be within reasonable but need not be pending or imminent; Third, it cleared who can be considered an interested person stating that The Court rejects Intels contention that interested person[s] does not include complainants, but encompasses only litigants, foreign sovereigns, and a sovereigns designated agents ();
burdensome requests. The Post-Intel Era: After the Intel landmark the U.S. courts have been facing the question of whether the term international tribunal can also include an arbitration tribunal in different ways, which can be divided into two different main splits. Accordingly, although the majority of court decisions
And finally it also made several important considerations regarding what it could be considered a foreign or international Tribunal.
held that 1782 should be red broadly to include both public arbitrations (brought pursuant the existence of a BIT or governed by rules that had some form of international-government sanction5), and also, private commercial arbitrations arising
42 YAR JULY 10, 2013
out of commercial contracts, there were still U.S. courts that continued to follow a more restrictive approach .
6
an ex parte meeting between plaintiffs lawyers and a medical expert working with the Ecuadorian court-appointed Special Master, plaintiff lawyer Steven Donziger storming into an Ecuadorian judges chambers, and Donziger declaring that you had to play dirty with litigation in Ecuador. The Chevron lawyers then wandered that if such behaviour was portrayed in the film, other evidence could also be found in the backstage. Thus, on the basis of these and similar scenes, Chevron filed a 1782 motion in the Southern District of New York against Crude director Joe Berlinger, requesting over six hundred hours of film outtakes. The district court granted the motion stating that [r]eview of Berlingers outakes will contribute to the goal of seeing not only tat justice is done, but that it appears to be done7. The evidence that was found through 1782 allowed Chevron to present startling revelations indicating the existence of fraud and corruption. Between the direct quotes attributable to the Ecuador plaintiff lawyers were: (1) All the judges [in Ecuador] are corrupt; (2) the only language . . . this judge is gonna understand is one of pressure, intimidation, and humiliation; (3) [In] Ecuador . . . this is how the game is played, its dirty; (4) [The court-appointed Special Master will have] to totally play ball with us and let us take the lead while projecting the image that he is working for the court; (5) [A]ll this bull***t about the law and facts . . . in the end of the day it is about brute force; (6) [We] could jack this thing up to thirty billion . . . in one day; (7) [Evidence of groundwater
iii) The importance of Section 1782 reflected on the Chevron saga As it was stated above, the well-known and public Chevron v Ecuador saga is a case-study of how important Section 1782 can be in the context of a dispute. In summary, in February 2011 a court in Lago Agria, Ecuador ordered Chevron to pay $18 billion in compensation for an alleged dumped oil-drilling waste in the Amazon River basin more than 20 years ago, causing illness in indigenous people. However, Chevron defended that such decision was tainted by illegitimacy and fraud due to unethical action by the plaintiffs lawyers as well as the Ecuadorian government and judiciary. The screening of the film Crude at the Sundance Film Festival in Park City, Utah precipitated Chevrons allegations of denial of justice and triggered a turn of events in which 1782 had a decisive role. The film depicted the case of indigenous Ecuadorian plaintiffs in an uneven clash against Chevron over alleged environmental damage in Ecuador. Scenes in the film depicted
43 YAR JULY 10, 2013
contamination] was smoke and mirrors and bull***t, it really is; and (8) [I]f you repeat a lie a thousand times it becomes the truth .
8
Since the Intel landmark, the receptiveness of U.S. courts to allow ancillary discovery in the context of international commercial arbitrations has changed and is becoming increasingly wide in the sense that the term foreign or international tribunal can also include private arbitration tribunals. Also, regardless of the final outcome of the Chevron v.
The material gathered following Section 1782 ancillary discovery process caused several decisive legal consequences in the procedure. In a dramatic turn of events, the International Tribunal adjudicating Chevrons denial of justice claim concluded that Chevron [had] made out a sufficient case for interim measures and ordered Ecuador to take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment against [Chevron] in the Lago Agrio case9 . Conclusion: Thus, it is clear that Section 1782 may represent a powerful mechanism in aid of foreign arbitration proceedings.
Ecuador case, it is undeniable that Section 1782 portrayed a fundamental role in the impressive overturn of events that followed, allowing the discovery of precious evidences that otherwise might never be within Chevrons reach. Section 1782 is therefore a very serious ally to consider by any party involved in foreign arbitration proceedings that may which to pursue discovery in American territory.
Andr Fonseca
1. Hans Smit, Assistance Rendered by the US in Proceedings before International Tribunals, 62 Colum. L. Rev. 1267 1962. 2. In Re Application of Wilander (No 96 MISC 98, 1996; E.D. Pa. July 24, 1996) the court, finding no support in the statute or legislative history that would include a completely non-governmental private agency such as the International Tennis Federation, ruled that this entity did not constitute a tribunal for purposes of 1782 and rejected the application for discovery. In Re Application of Medway Power Lt., 985 F. Supp. 402, 402-403 (S.D.N.Y. 1997) The court stated that: Congress intended this statute to assist official, governmental bodies exercising an adjudicatory function. The legislative history of Section 1782 does not suggest an intent to encompass unofficial, private arbitrations which Congress and the courts have consistently treated as creatures of a contract which a court should enforce just like any other obligations imposed by private agreement. In re Application of Republic of Kazakhstan (168 F.3 880, 881; 5th Cir. 1999) in holding that 1782 did not apply to private international arbitrations, the court stated it was following the Second Circuit in NBC. Like the Second Circuit, it examined 1782s legislative history and found no contemporaneous evidence that Congress contemplated extending 1782 to the then-novel arena of international commercial arbitration. 3. In National Broadcasting Co, Inc. v. Bear Stearns & Co. (165 F.3d 184, 488-191; 2d Cir. 1999) the court concluded: The legislative history reveals that when Congress in 1964 enacted the modern version of 1782, it intended to cover governmental or intergovernmental arbitral tribunals and conventional courts and other state-sponsored adjudicatory bodies. The legislative historys silence with respect to private tribunals is especially telling because we are confident that a significant congressional expansion of American judicial assistance to international arbitral panels created exclusively by private parties would not have been lightly undertaken by Congress without at least a mention of this legislative intention. 4. Intel Corp. v Advanced Micro Devices inc. 542 U.S. 241 (2004). 5. In re Application of Roz Trading Ltd (469 F. Supp. 2d 1221; N.D. Ga. 2006); In re Application of Oxus Gold PLC (No. MISC 06-82, 2006 WL2927615, at *6 (D.N.J. Oct. 11, 2006); In re Application of Hallmark Capital Corp. (534 F. Supp. 2d 951; D. Minn. 2007); In re Application of Babcock Borsig (Case No. 08-mc-10128, 2008 WL 4748208; D. Mass. Oct. 30, 2008); OJSC Ukrnafta v. Carpatsky Petroleum Corp. (No. 3:09 MC 265 (JBA), 2009 WL 2877156; D. Conn. Aug. 27, 2009); In Re Application of Winning (HK) Shipping Co. Ltd. (2010 WL1796579, at *10; S.D. Fla. Apr. 30, 2010); Consorcio Ecuatoriano de Telecomunicaciones S.A. v JAS Fowarding Inc. (No. 11-12897, 2012 WL 2369166, at*1; 11th Cir. June 25, 2012); In re Application of Mesa Power Group (Case No. 11-24335-CIVUNGARO/ TORRES, S.D.Fl. July 13, 2012). 6. El Paso Corp. V . La Comision Ejecutiva Hidroelectrica Del Rio Lempa (341 F. Appx 31 (5th Cir. 2009); Norfolk Southern Corp. v. Gen. Sec. Ins. Co. (626 F. Supp. 2d 882; N.D. Ill. 2009); In re Application of Operadora DB Mexico, S.A. (DE C.V ., No. 09-cv-383, 2009 WL 2423138 (M.D. Fla. Aug. 4, 2009). Ancillary Discover to Prove Denial of Justice, Roger P . Alford, Virginia Journal of International law Digest, 2013 on Berlinger, 709 F. Supp. 2d at 299. Brief of Plainiff-Appelle a 20-23, Chevron v. Camacho, 667 F.3d. 232 (2d. Cir. 2012) (No. 11-1150). 7. Chevron v. Ecuador, PCA Case No. 2009-23m Order for Interim Measures, 3 (Feb. 9, 2011). On January 25, 2012, the tribunal confirmed and reissued the February 9, 2011 Order as an Interim Award, ordering Ecuador to take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment against [Chevron] in the Lago Agrio case. (Chevron v. Ecuador, PCA Case No. 2009-23, First Interim Award, 16 (Jan. 25, 2012). On February 16, 2012, the tribunal issued a second Interim Award finding that Chevron has made a sufficient case regarding the Claimants case on the merits against the Respondent and ordered Ecuador to prevent the Lago Agrio judgment from becoming final and binding by precluding any certification by the Respondent that would cause the said judgments to be enforceable against Chevron. (Chevron v. Ecuador, PCA Case No. 2009-23, Second Interim Award, 2-3 (Feb. 16, 2012). On 27 February 2012, a third interim award was issued in which the tribunal rejected a number of jurisdictional challenges presented by Ecuador (Chevron Corporation and another v Republic of Ecuador (PCA Case 2009-23) (Third Interim Award on Jurisdiction and Admissibility) (27 February 2012). And finally, on 7 February 2013, the Arbitral Tribunal issued a fourth interim award on interim measures in which was declared that Ecuador had violated the First and Second Interim Awards in regard to the finalisation and enforcement subject to execution of the Lago Agrio Judgment within and outside Ecuador. As a consequence, the Respondent was ordered to show cause () why it should not compensate the First Claimant for any harm caused by the Respondents violations of the First and Second Interim Awards. The Tribunal also declared and confirmed that the Respondent was and remains legally obliged under international law to ensure that the Respondents commitments under the Treaty and the UNCITRAL Rules are not rendered nugatory by the finalisation, enforcement or execution of the Lago Agrio Judgment in violation of the First and Second Interim Awards; (Chevron Corporation and another v. Republic of Ecuador (PCA Case No. 2009-23 (Fourth Interim award on interim measures) (7 February 2013).
44 YAR JULY 10, 2013
THE 2010 REVISION OF THE ARBITRATION RULES OF THE CHAMBER OF ARBITRATION OF MILAN
By Chiara Catti
CONTENTS 1. Introduction: Arbitration state of art in Italy 2. Bodies of the CAM: Arbitral Council and Secretariat 3. General provisions and commencement of the proceedings 4. Confidentiality under the 2010 Rules 5. The appointment of the Arbitral Tribunal and the independence of Arbitrators 6. The arbitral proceedings 7. The arbitral award 8. Costs of the proceedings 9. Future challenges and conclusions 1. INTRODUCTION: ARBITRATION STATE OF ART IN ITALY The new rules of the Milan Chamber of Arbitration (CAM) entered into force on January 1st, 2010 in substitution of the 2004 version of the rules. The new set of rules applies to both domestic and international arbitration. The 2010 rules
(hereinafter, the Rules) is the third amendment since the creation of the Chamber in 1985, and its aim is to adapt the Rules to the development and globalization of international transactions as well as updating the CAM administration system to the Italian 2006 legislative reform on arbitration. It should be noted that alternative resolution techniques (meaning mainly arbitration and mediation) still play a secondary role in the resolution of civil claims in Italy. The 2010 annual ISDACI report on the use of alternative dispute resolution methods in Italy shows that most of the requests for arbitration in Italy are filed with the Chambers of Arbitration set up by the Chambers of Commerce.1 This survey also highlighted that, notwithstanding the limited use of ADR in Italy compared to other European countries such as England or France, the total number of arbitration cases and value of disputes have generally increased in the last years.2 Among the arbitral institutions created by Chambers of Commerce, the Milan Chamber of Arbitration has distinguished itself as one of the most active both in North Italy and internationally.
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For instance in 2005, CAM launched a Mediterranean project involving small and medium enterprises which led in 2009 to the creation of the Institute for the Promotion of Arbitration and Mediation in the Mediterranean Area (ISPRAMED): a private organisation with the aim of creating a shared network of commercial justice which protects entrepreneurs and investors within the Mediterranean Area by fostering the use of alternative dispute resolutions methods.3
setting the rules to fill any gap. The rationale of this change is to provide parties with greater freedom without undermining the core principles of the Milan institution which can be identified as the control on arbitrators independence and impartiality, the respect for due process and equal treatment of the parties strictly connected to the previous principle, and efficient time/ cost management of the arbitral proceedings.7 A major amendment concerns the rules applicable
In accordance with this slow but steady growing use of arbitration in Italy, the Milan Chamber amended the 2004 Rules to provide both domestic and international parties with an expedited, transparent and effective administration of the proceedings. In order to follow this scope, the reform has
4
to the merits of the dispute by which CAM now provides that, in case of failure of the parties to agree on applicable substantive law, the Arbitral Tribunal shall apply the law that it deems appropriate taking into account the nature of the contractual relationship, the personal qualities of the parties, and any other relevant circumstances of the case (Art. 3 of the Rules). In departing from the principle of the rules with the closest connection to the subject matter, CAM anchors the arbitral decision to more objective criteria in line with current international practices.8
a) amended the internal function of the CAMSs bodies, b) strengthened the independence of arbitrators and fostered the institutions control over duration and costs, c) rendered the text shorter and clearer. 2. BODIES OF THE CAM
While the 2004 Rules provided for a strict and regulated In light of enhancing its competence both in the domestic and international levels, the Arbitral Council - which is in charge of the administration of the proceedings and issuance of all related orders (an example being the challenge of the arbitrators pursuant to article 19 of the Rules), is now composed of an enlarged number of members (from a minimum of seven up to a maximum of eleven) of both Italian and foreign experts (mainly professor of International, Civil Procedure and Comparative Law). Under the new Rules, a minimum quorum
5
timeline with regard to the request of arbitration, the statement of defence and the filing of a counterclaim, the 2010 version has deleted any time-limit for the counterclaim, leaving the decision to the Arbitral Tribunal once constituted. As previously mentioned, notwithstanding the principle of a prima facie decision of the Arbitral Council on the applicability of the Rules, CAM has inserted a new rule (Art. 12 Lack of jurisdiction of the Arbitral Tribunal) which provides for a waiver presumption on the existence, validity or effectiveness of the arbitration agreement, or any lack of jurisdiction thereto, failing any prompt objection by the parties.9 4. CONFIDENTIALITY UNDER THE 2010 RULES
of the meeting requires only three members (as opposed to five members under the 2004 Rules) and the meetings may be held by any means of telecommunication to facilitate the members in achieving the quorum and avoiding any unnecessary delay.6 3. GENERAL PROVISIONS AND COMMENCEMENT OF THE PROCEEDING In light of the Reform, the scope of application of the new Rules has become wider as reflected in Art. 1 which provides: The Rules shall apply where so provided by the arbitral clause or other agreement between the parties, however expressed (emphasis added). This new wording, as opposed to the old one referring only to the Milan Chamber of Arbitration or the Milan Chamber of Commerce, provides for a wider application of the Rules whenever this reflects the intention of the parties. Accordingly, any reference in the arbitral clause to Milan Arbitration Rules or Milan Chamber will be deemed to be sufficient to apply those Rules. This will help the institution in deciding a prima facie test on the applicability of the Milan Rules, notwithstanding the procedural right for a party to object to the application pursuant to Art. 11 (Admissibility of the arbitral proceedings). As for the procedural aspect of the arbitral proceeding, the new Art. 2 provides for an equal hierarchy of the CAM Rules and the rules chosen by the parties provided that they are consistent with the CAM Rules (in the 2004 version of the CAM Rules these prevailed over the rules chosen by the parties in case of conflict). In case of default, the Arbitral Tribunal, once constituted, still retains the power of
In line with many international institutions, CAM has decided to insert a clause devoted to confidentiality itself, which under the new wording extends to the parties, in addition to the Arbitral Tribunal and the expert witness.10 Changing the generic wording of 2004 Rules providing for all information relating to the proceedings to be kept confidential, the new Art. 8 specifies that also the arbitral award shall be kept confidential with the exception of where the information has to be used to protect ones right. This exception embodies the classical scholar example of a justified breach of confidentiality being the right to enforce or challenge the award and, without doubt, when the party has a legal duty to do so because the law requires the protection of public interests. The issue of confidentiality in commercial arbitration has been largely analysed and discussed by both doctrine and jurisprudence; while most of scholars and practitioners agree that confidentiality is a general accepted feature of arbitration, its legal basis and scope of application are object of discussion.11 One interpretation, relying on the absence of a general duty of confidentiality in the major arbitration conventions and, notably the ICC Rules and the new UNCITRAL Arbitration Rules of 2010, considers that this should be a contractual aspect to be
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negotiated by the parties along with the determination of the seat of arbitration or the applicable law. This interpretation is sustained by the absence of a duty of confidentiality in the principle European statutes on arbitration (namely, the most recent arbitration acts of France, United Kingdom, Germany and Italy) and the way confidentiality gives in when faced to the need of publicity typical of judicial proceedings in national courts.
12
any of the parties objects to publication. Changing the opt-in attitude of 2004 Rules, CAM has adopted an opt-out solution for the publication of sanitized awards.15 This dual attitude of respecting confidentiality during the proceedings and ensuring transparency of publicity and publication is in no way contradictory. To ensure the balance between confidentiality and transparency, CAM together with Universita Carlo Cattaneo (LIUC) has issued a set of guidelines for the publication of sanitized awards and for the publication of other decisions such as arbitrator challenges.16 Unlike the challenge, for which the guidelines favour a systematic and updated publication, the rationale behind the publication of the awards is to select the most relevant ones in order to create an arbitral jurisprudence to the benefit of both the general public and the arbitration professionals. The publication of the awards would, inter alia, provide: a) better selection of arbitrators and a better quality of the awards, b) relevant background for the arbitrators, especially the new generation and c) more reliable data on arbitration in general, including the grey phenomenon of adhoc arbitration.17 5. THE APPOINTMENT OF THE ARBITRAL TRIBUNAL AND THE INDEPENDENCE OF ARBITRATORS The Rules provide for the parties to agree on the number of the arbitrators, but, in case of an even number of arbitrators, is the duty of the Arbitral Council to appoint an additional arbitrator, unless the parties have agreed otherwise (Art. 13.3). This strict requirement of an odd number of arbitrators which no other European rules of arbitration require, has been inserted pursuant to the Italian arbitration Law which precludes the
On the other hand, there is a well affirmed movement that considers confidentiality so truly and intrinsically connected to arbitration itself that there is no need to regulate it. In view of this general acceptance - that extends to considering confidentiality in arbitration agreements as an implied duty confidentiality itself may be regarded as customary international law. This duality of opinions is reflected also in the business community and final users of arbitration. The 2010 School of International Arbitration Survey reveals that 86% of interviewers (general counsel, heads of legal department and other corporate counsel from a variety of corporations) considered confidentiality to be very important or quite important, while 50% of them believed that arbitration is confidential even where the is no specific clause to that effect in the arbitration rules adopted or the arbitration agreement.13 However, some interviewers believed that various corporation obligations may undermine confidentiality so that the content and scope of it might vary case by case and could be regarded as a non serious concern. Having said that, the position of CAM is that confidentiality is one of the main features of international commercial arbitration and, therefore, should be preserved.
14
Turning now to the issue of publication and transparency. Art. 8.2 of the Rules provides that CAM may publish the arbitral award in anonymous format, unless during the proceedings,
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constitution of an even-numbered Arbitral Tribunal (see Art. 809 Italian Code of Civil Procedure).
18
and also to delegate the above powers to one member of the Tribunal. In the previous version of the Rules, the arbitrators role was limited to gathering evidence not excluded by mandatory provisions while in the amended Rules they manage and lead the evidence-taking process, having the final word as to the relevance and admissibility of evidence.22 The same rationale applies to the new Article 26 (Expert Witness) which specifies the arbitrators power to appoint witnesses on their own initiative in addition to witnesses appointed following a party request. The same short and clear wording that characterizes the 2010 Rules is used also with regards to new claims; without specifying anything more, the specific conditions that the new claims should meet to be admitted, Art. 27, provides for the Arbitral Tribunal to decide on their admissibility by taking into account all circumstances, including the stage of the proceedings.23 7. THE ARBITRAL AWARD
The reform also aimed at enforcing the independence and impartiality of the arbitrators as set out in Art. 18 of the Rules. The statement of independence required by the arbitrators has now a larger scope; as a result, the arbitrator shall in fact disclose not only any relationships with parties and counsels but also with any other person or entity involved in the arbitration which may affect his/her impartiality (emphasis added). In addition, CAM acknowledges that the Arbitral Council in making the decision on arbitrators independence takes into consideration the IBA Guidelines on conflict of interests in international arbitration.
19
CAM has a Code of Ethics enclosed in the Rules which is provided to the arbitrators upon appointment and in accordance to which they should act, regardless of the party who appointed them. As for the appointment criteria, the Rules still followed the 2004 third nationality rule according to which where the parties are of different nationalities, the sole arbitrator or the chairperson of the tribunal shall be of a nationality different from those of the parties. CAM further provides a list of incompatibilities: no members of Arbitral Council, auditors and employees of CAM, professional partners and those with an ongoing professional relationship can act as arbitrators, unless the parties agree otherwise (the latter being a novelty of the 2010 rules). Once again, the principle of parties autonomy in choosing the procedural rules is fostered and enhanced. One final remark concerns the appointing of the Arbitral Tribunal in multi-party arbitration as provided in the new formulation of Art. 15. Either the multiple parties act as twosides by appointing each an arbitrator and subsequently the two arbitrators appoint the chairperson (or, following the will of the parties, he is appointed by another institution) or, if this bilateral scheme is not respected, the Arbitral Council shall appoint the Arbitral Tribunal disregarding any appointment made by the parties.
The provisions concerning the deliberation and form of the award have been changed to adapt to the 2006 Italian Reform that does not require a personal meeting (conferenza personale) to deliberate on the award, unless requested by the parties.24 Accordingly, the new Art. 30 provides that all the members of the Arbitral Tribunal shall participate in the deliberation of the award but that the decision may be by majority votes provided that it states the reasons of the missing signature i.e. the reasons why the arbitrator does not sign it. The six-month time limit running from the constitution of the Arbitral Tribunal to render an award is reaffirmed with the possibility for the Secretariat to extend the limit when the parties agree or for the Council to do it ex officio whenever it deems it appropriate. At this regard, the CAM statistics shows that final awards were rendered in 2010, on average, in 12,6 months (improving from the 2009 and 2008 figures of 13,1 months) so ensuring a fast settlement of the disputes.25 Aimed at ensuring an efficient and fast proceeding, CAM
6. THE ARBITRAL PROCEEDINGS Under section IV (The Proceedings of the Rules), a few amendments have also been made with the aim of empowering the arbitrators so that the arbitral process will become faster and smoother.
has also set a specific time-limit for the correction of the award: 30 days to file a request, and 60 days for the Tribunal to decide on it. To avoid any confusion, Art. 34(3) specifies that the decision on the correction of the award shall be considered an integral part of the award for which the parties will not be charged. 8. COSTS
Arbitrators can now attempt an amicable settlement of the case referring this to the Mediation service of the CAM.20 Another aspect concerns third party intervention, both in case it is required by the parties or by the third-party joinder, the 2010 Rules gives the Arbitral Tribunal the power to make the decision, after consulting with the parties and after taking into considerations all the circumstances. The decision is final, and the third-party joinder has to accept how the Tribunal is constituted.
21
It is an established principle that the predictability of costs is one of the advantages of arbitration, especially when the alternative is a judicial process that can last many years and, as a consequence, has unpredictable costs such as it happens in Italy. For this reason, CAM still maintains the fixed criteria of the value of the dispute to determine the costs of arbitration in accordance to a schedule attached to the Rules which provide for a minimum and a maximum fee within each value (Annexe A). Parties are jointly and severally liable for the costs of arbitration which include arbitrators fees, CAM fees, tribunal experts fees and expenses and whose final determination is made by the Arbitral Council before
Another amended Rule concerns evidence taking; the 2010 Reform gives the arbitrators the power to take all the relevant and admissible evidence adduced in the manner it deems appropriate
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the award is filed.26 On the other hand, when a separate advance is required by the Secretariat and the latter determines different values of the dispute in relation to the claims of the parties, each party shall pay an amount proportionate to its claim and shall be responsible only for that. To ensure an expedite administration
27
market is gradually but steadily growing; in this context, the quality of the services provided by the arbitral institutions, mainly Chamber of Commerce, is crucial in enhancing the culture of arbitration among the business and professional community both at local and international level. The new set of Rules are serving, on one side, the purpose of building trust in the Italian business community in using arbitration as an expedited and efficient way to resolve their disputes, as opposed to the unpredictable and slow judicial system. On the other hand, the 2010 Revision, in accordance with the 2006 Italian arbitration Law, aims at providing a flexible, updated and in line with best international practice arbitration system that should foster confidence in choosing Italy as arbitration forum. It is too early to have data confirming if these two purposes have been achieved, but it is undeniable that the 2010 revision of the Rules provides an opportunity to serve them both. The practical results will depend on the attitude of the final arbitration users in seizing this opportunity.30
of the arbitration, the time of suspension of the entire proceedings, in case of failure to pay, has been reduced from two months to one month.
28
Furthermore, in light of the principles of transparency
and control over costs which inspired the Reform, the new Art. 36(2) provides that, not only the arbitrators, but also the parties are informed about the final determination made by the Arbitral Council (emphasis added). Finally, for the first time the Rules deals with the possibility of accepting bank or insurance guarantee as a partial payment of the arbitration fees, provided justifiable reasons.
29
9. FUTURE CHALLENGES AND CONCLUSIONS As described in the introduction, the Italian arbitration Chiara Catti
1. Quarto rapporto sulla diffusione della giustizia alternative in Italia a national survey by ISDACI under the patronage of the Italian Minister of Justice, available at www.isdaci.it. 2. In 2009, 78% of the requests for arbitration filed in Italy were conducted by Chambers of Commerce with an increase rate of 30% with regard to 2008. In addition, in 2009 all the international arbitral proceedings were managed by the Chambers of Arbitration belonging to the Chambers of Commerce with an increase of 30% with regard to 2008. 3. The ISPRAMED project is available at www.ispramed.com. 4. For an overview of the 2010 revision please see Coppo B. The 2010 Revision of the Arbitration Rules of the Chamber of Arbitration of Milan in 2010, 14 The Vindobona Journal of International Commercial Law and Arbitration, p.283-296 and Giovannini, T. Renna,V . The Italian Experience of Arbitration and the Arbitration Rules of the Chamber of Arbitration of Milan: a Parallel View in 2010, 14, The Vindobona Journal of International Commercial Law and Arbitration, p. 297/313. 5. A complete list of the members of the Arbitral Council is available at CAMs website: www.camera-arbitrale.it. 6. See the 2010 Rules - Arbitration Council (emphasis added). 7. See in this respect the position expressed by Sali, R., Vice Secretary of the CAM, Arbitrato Amministrato in Digesto delle discipline privatistiche, sezione civile, aggiornamento, 2007, Tomo I, UTET, Torino at p. 77. 8. See Art. 17 of the ICC Rules, 1998 version. 9. Art. 12 of the Rules provides that any objection: shall be raised in the first brief or at the first hearing following the claim to which the objection relates, or shall be deemed to be waived. 10. See World Intellectual Property Organization (WIPO) Arts. 73 and 76, London Court of International Arbitration (LCIA) Art. 30, and American Arbitration Association (AAA) Art. 34 which all set a duty of confidentiality. The ICC Rules, instead, provides only for the privacy of the hearing in Art. 22(3). 11 On the subject see, inter alia, Aboul-Enein, M., The need for establishing a perfect balance between confidentiality and Transparency in Commercial Arbitration, in (2007) 2. Stockholm International Arbitration review, at p. 25 and Malatesta A. e Sali R., Arbitrato e Riservatezzza Linee guida per la pubblicazione in forma anonima dei lodi arbitrali, CEDAM. 12. A comparative detailed study on the subject is Noussia, K., Confidentiality in International Commercial Arbitration. A comparative analysis of the Position under English, US, German and French Law, Springer, Heidelberg, 2010. 13. The 2010 International Arbitration Survey: Choices in International Arbitration conducted by the School of International Arbitration at Queen Mary, University of London and White & Case LLP. The entire survey could be found at http://www.arbitrationonline.org. 14. See supra Coppo B., The 2010 Revision of the Arbitration Rules of the Chamber of Arbitration of Milan in 2010, 14 The Vindobona Journal of International Commercial Law and Arbitration, p. 287. 15. On a European comparative point of view, The Swiss Chamber Court of Arbitration and Mediation 2006 Rules, adopt the same opt-out attitude in Article 43, while the LCIA prefers to follow an opt-in rule for publication of the awards (Art. 30). 16. For a detailed discussion on the subject see Malatesta A. e Sali R., Arbitrato e Riservatezzza Linee guida per la pubblicazione in forma anonima dei lodi arbitrali, CEDAM. A list of the sanitized awards can be found in the Milan Chamber website under Studies and Documentation Center (www.camera-arbitrale.it). 17. It is worth mentioning that, pursuant to the Italian arbitration law, the award, once filed with the tribunal for a declaration of enforceability, has the same effects of a court judgment, provided that it meets all the formal requirements (Art. 825 of the Italian Code of Civil Procedure, hereinafter, CCP). From this provision it stems that the award could be entirely published, like a judgment, unless a party asks for the sanitation of the relative personal data. Nevertheless, CAM adopts the view that if one party objects to the publication, the award will not be published. On this issue, see supra footnote 16, p. 97-98. 18. Art. 809 of the CCP provides that: (1) There may be one or more arbitrators, provided their number is uneven. Where an even number of arbitrators is indicated, an additional arbitrator shall be appointed by the President of the tribunal (...), unless the parties have agreed otherwise. Where the number of arbitrators is not indicated and the parties do not agree in that regard, there shall be three arbitrators; failing their appointment, the president of the tribunal shall proceed to such appointment (...), unless the parties have agreed otherwise. This provision should be read in connection with Art. 823 CCP which requires that: The award shall be deliberated by a majority vote (...). It follows that to ensure a majority vote in every case there should be an odd number of arbitrators. On this issue there is not a common approach even if the prevailing interpretation is that the odd number of arbitrators is a matter of public policy which cannot be waived by parties nor arbitral institutions. See inter alia Sangiovanni V ., Numero e modo di nomina deglia rbitri tra arbitrato ordinario e arbitrato societario, in 2005/8 Corriere Giuridico and Punzi C., Disegno sistematico dellarbitrato, I vol., Padova, 2000, p. 367. 19. The IBA guidelines are available at www.ibanet.org. 20 For further reference see www.milanmediation.com. 21. See Art. 22 of the Rules. 22. Art. 25(1) of the Rules: The Arbitral Tribunal leads the case by taking all the relevant and admissible evidence adduced in the manner it deems appropriate (emphasis added). 23. See Art. 27 New Claims of the Rules. 24. See Art. 823 CCP. 25 The statistics are available on the CAM website at www.camera-arbitrale.it. 26 A more detailed list of the included and not included expenses in the arbitration fees is provided in Annexe B of the Rules. 27 See Art. 37(4) of the Rules. 28 The one-month time limit applies also to the suspension of the single proceeding on the request to which the payment refers. See Art. 38 of the Rules. 29 See Art. 37(6) of the Rules. 30 A partial data concerning the average duration of the arbitral proceeding shows that, following the 2010 Revision, the goal of providing an expedited proceedings has been met. See supra footnote 25.
49 YAR JULY 10, 2013
THE LONG AWAITED PORTUGUESE MEDIATION LAW FUNDAMENTAL PRINCIPLES

By Thomas Gaultier
Mediation is not a new concept in Portugal. Indeed, since 2001, Portugal has had legislation governing this aspect of the law, although limited to very specific branches. Indeed, Law No 78/2001 of 13 July, the law of the Julgados de Paz (Justices of the Peace), sets forth the framework for the use of public mediation in small claims cases. In this first mediation legislation dating from over 10 years ago, and the scope of which was limited to mediation taking place in small claims court procedures, mediation is defined as an extrajudicial means of private, informal, confidential, voluntary, and non-adversarial dispute resolution, in which the parties actively and directly participate, and are assisted by a mediator to find, themselves, a negotiated and amicable solution to the conflict opposing them. Moreover, in conjunction with this piece of legislation, a settlement is defined in Article 1248 of the Civil Code as a contract in which the parties avoid or settle a dispute through reciprocal concessions. Since 2001, the public mediation system in Portugal has been divided into four different systems: the Justices of the Peace, the Family Mediation System, the Workplace Mediation System, and the Criminal Mediation System, each covered by their respective legislation, providing mostly for the procedural Articles 249-A, B, C, and 279-A of the CPC transposing In 2009, Portugal enacted legislation that would transpose the Directive of the European Parliament and of the Council of 21 may 2008 on certain aspects of mediation in civil and commercial matters. On 29 June of that year, the Parliament approved Inventory Law No 29/2009, which added three articles related to the regulation of mediation: 249-A, C and C, as well as 279-A to the Civil Procedure Code (CPC). These articles mainly concern pre-trial mediation and the suspension of prescription terms, the homologation (court confirmation) of agreements obtained in pre-court mediation, confidentiality, and the suspension of court proceedings by the judge. Unfortunately, between 2001 and 2013, although public mediation systems were put in place and granted legislative protection and frameworks, private mediation in itself was never the object of a law, and was thus neither recognized as a private means of dispute resolution nor granted the necessary guarantees for it to be able to function. rules regarding said systems.
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the Directive were a small step for mediation in Portugal, although limited to very specific aspects of the process. Portugal was therefore needing more extensive legislation on the issue, which took place in early 2013 with the adoption of Law 29/2013 of 19 April, establishing the general principles applicable to mediation carried out in Portugal, as well as the legal frameworks of civil and commercial mediation, of mediators and of public mediation. This article will focus on Chapters 1 and 2 of the new mediation law (ML), and namely on the general principles that now apply to all mediation that take place in Portugal. Definitions and Scope Article 2 of the new ML provides a definition of mediation which is quite different from the previous one offered by Law No 78/2001 of 13 July. Indeed, the mediation is now defined as a form of alternative dispute resolution, carried out by public or private entities, through which two or more parties who are in conflict seek to voluntarily reach a settlement with the assistance of a mediator. The mediator is also defined in the same article as an impartial and independent third party, devoid of powers to impose upon the parties, who assists them in trying to construct a final settlement regarding the object of the conflict. The first remark one can make regarding these definitions is that they are quite broad. Indeed, regarding mediation itself, this definition expressly includes both public and private mediations, carried out within the public mediation systems or before a private mediation entity. This constitutes a major leap forward in Portuguese mediation, as prior to this new ML, private mediation was neither recognized nor regulated specifically. It now seems that private mediation is granted the legitimacy it much needed, as it now has a general legislative framework granting it the essential and fundamental protections mediation and mediators need for it to develop, as we will see in greater detail below. Regarding mediators, the fact that a definition is given of who mediators are suggests that they are now fully considered as a professional category. Since their role is expressly defined by law, alongside their rights and responsibilities as we will also see below, this law will surely trigger a trend towards the professionalization of mediators, which was not the case until now. In fact, up the enactment of the new ML, anybody could call themselves mediators, whether or not they had received training, were certified, or even practiced. From now on, mediators will surely be seen as a professional category and not merely as individuals with abilities or skills. Both above-mentioned definitions also reinforce one of the core fundamentals of mediation, and remind us that mediation is a process geared towards a possible settlement, during which the neutral does not impose a solution to the parties. One has to infer from this that outcome of a mediation is controlled by the parties, who are the ones seeking resolution. The mediator does not seek a resolution, and in no way is it his or her role; rather, mediators simply assist the parties in seeking their own settlement.
Regarding to scope of the mediations governed by the new ML, article 3 provides that the principles set forth in this chapter apply to all mediations carried out in Portugal, regardless of the nature of the conflict which is the subject of the mediation. Considering that the chapter this article refers to is entitled Principles, we can assume that they will apply to any mediation in Portugal, whether public or private, in Portuguese or in any other language, by certified mediators and even by non-certified mediators. The purpose of defining such a broad scope of which mediations are to be governed by the principles laid out in the new ML is truly to establish certain fundamental minimum protections and guarantees to the mediation process, to the mediators, as well as to the parties and other users of mediation in Portugal. Whereas prior to this ML there were no transversal principles of mediation applicable to all mediations in Portugal, thus making it hard for mediation to be recognized as a standalone process and as another credible means of alternative dispute resolution, this new ML now provides all mediation carried out in Portugal with the minimum protection it needed so urgently. The main principles detailed in the new ML are those of voluntariness, equality, impartiality, independence, confidentiality, responsibility and enforceability. Voluntariness, equality, impartiality and independence Voluntariness is the first principle appearing in the new ML, in article 4, which provides that the mediation process is voluntary, albeit necessary for the parties to have given their informed consent to carry out mediation. Article 4 further provides that the parties are free to revoke this consent at any time during the process, and that such revocation would not constitute a breach of their duty to cooperate under the terms of the CPC. This article poses a fundamental principle which has not always been adopted in all countries. Indeed, voluntary mediation can be opposed in principle to mandatory mediation, in which the parties have an obligation to participate, to at least some extent, in the mediation process. The choice to keep mediation voluntary in Portugal can be explained by multiples factors. One of the factors is that the legislator may have seen mediation as a derivative of negotiation, whereby the parties are not held to an obligation to negotiate a settlement. This would explain why similarly to a negotiation process towards finding a settlement, parties can leave or retract from mediation at any time. Another factor can be linked to the idea that in mediation, the parties are the ones with control over the substance. As such, they will be the ones to jointly and freely decide to be held to an agreement. Since no one is imposing anything on the parties in terms of the substance, unlike in judicial court or arbitration, there is no reason to obligate them to mediate towards an end they will not agree to or simply do not even want to consider. The freedom to choose to be bound by the mediated settlement agreement is closely linked to the degree of commitment the parties will then have when fulfilling their mediated obligations towards a resolution. Taking away some of that freedom can be detrimental to the overall commitment
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to the process and to the outcome if an agreement is reached. In addition, the fact that mediation is voluntary, meaning that any party can leave the process at any time, puts the parties on a more equal stand. If we consider two parties going into mediation, where one of the parties has greater bargaining power, for example due to more financial resources and better legal defence, the fact that the other party has the possibility to leave at any moment empowers said party throughout the mediation and brings more balance around the mediation table. This concept of equality is also another fundamental principle of mediation set forth in the new ML. Article 6 of the ML provides that the parties must be treated equally throughout the entire mediation process, whereby it is the mediators role to manage the process insofar as to guarantee the balance of powers and the possibility for both parties to participate. Although it was explained earlier that the mediator had no power to impose anything upon the parties, being a nondeciding neutral, the mediator must nevertheless manage the process to try and preserve the balance of powers between the parties. It is this balance of powers coupled with the equality of treatment of each party by the mediator that will give the mediator the credibility he or she needs to assist them in trying to reach an agreement. Treating each party equally will indeed help creating trust between them and the mediator, enabling a more open and constructive dialog. If such equality of treatment disappears, then one of the parties will feel betrayed and judged by the mediator, which is definitely not the finality of mediation nor the reasons why parties choses mediation in the first place rather than going before a court to be judged. Article 6 of the ML also provides that the mediator must act impartially, and is not an interested party in the mediation. Once again, the mediator is not the one seeking a resolution, it is the parties who are, with the help of the mediator to guide and walk them through a process that will ultimately allow them to build an agreement that is acceptable for them.
the first restating that the mediation process is confidential by nature, and that the mediator must keep confidential all information obtained during the process, not being able to make any use of such information for her or her benefit or for the benefit of others. Section 2 further provides that anything communicated to the mediator in confidence by one of the parties cannot be communicated to the other parties without the first partys consent. One of the most noteworthy evolutions from the previous provision on confidentiality set forth in article 249-C is definitely that anything communicated in confidence by one party to the mediator cannot be shared with the other party. This is especially relevant in the context of private sessions, or caucuses, when the mediator has a meeting with just one of the parties during the mediation process. This second section of article 5 thus established the second degree of confidentiality by law, which will surely reassure the parties to speak more freely to the mediator during private sessions. A surprising and somewhat disappointing omission in this article regards information given by one party to another party during the mediation. Indeed, whereas it is expressly provided that anything communicated to the mediator during the mediation process is confidential, the law is silent regarding information exchanged by the parties themselves. Section 4 of article 5 of the ML tries to solve this omission by stating that regardless of whether an agreement was reached or not, the content of the mediation sessions could not be used before a court or in arbitration. Nevertheless, this information is at risk of being used by the parties outside of a courtroom or an arbitral tribunal, for their benefit and to the detriment of other parties. Article 5 of the ML however provides a limit to the confidential nature of mediation, namely for reasons of public policy, for the protection of minors, when the physical or psychological integrity of a person is at stake, or for the purpose of enforcing the agreement in court. One issue that is not covered by the ML with regard to
Confidentiality of mediation proceedings One of the paramount guarantees necessary for mediation to be successfully implemented is to ensure the confidentiality of documents and communications arising out of or in connection with the process. This allows the parties to communicate freely towards reaching a settlement. Portugal had initially provided for confidentiality in mediation via article 249-C of the CPC, which states that except with respect to the obtained agreement, the content of the mediation sessions is confidential, not susceptible to be evaluated as evidence in court except in exceptional circumstances, namely when the protection of the physical or moral integrity of any person is at issue. This already quite broad provision is revoked in favour of the more complete provision contained in the ML, in article 5. Indeed, said article contains four sections on confidentiality,
disclosure of confidential information by the mediator is the case when the mediator is sued in court by one of the parties for damages resulting from a violation of the mediators duties. In such as case, as drafted, the law does not permit the mediator to offer a defence using events or communications which took place during the mediation. The first court decisions on the matter will surely have to decide on this issue, namely whether the disclosure of confidential information in order to protect oneself in a lawsuit is justified by public policy or not. Moreover, whereas article 249-C was silent regarding sanctions in case of a breach of confidentiality during or after mediation, article 8.2 of the ML provides that the mediator is civilly liable for the damage caused by a breach of his or her duties as a mediator under the new ML. This is also an additional argument for the parties to trust in the process of mediation, to speak freely to the mediator, to sometimes share some sensitive information if relevant to the case, all
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this so that the mediator can better help the parties to reach an agreement, which being responsible for his or her ethical conduct as a mediator. Enforceability of mediation agreements
on the enforceability of mediated settlement agreements. It provides that such settlement agreements are automatically enforceable, without the need for a homologation by a court, if they fulfil certain requirements. The first requirement enabling a mediated settlement
Mediated settlement agreements consist of private agreements signed by the parties to a dispute, and therefore lack the legal effect that would allow them to be directly executed. Prior to the ML, a mediated settlement agreement could be enforceable if it gained the status of an enforceable title by meeting the requirements of sections 2 and 3 of article 46 of the CPC. They state, respectively, that such titles require the specific documents, signed by the debtor, which contain the constitution or the recognition of a pecuniary obligation, the amount of which must be determined or determinable by simple arithmetic calculation as established in its provisions, or an obligation to deliver a thing or to perform an act and the documents which, by a special provision, are attributed enforceable force.
agreement to be automatically enforceable is if the law does not require homologation for that type of dispute. One illustration of this is the case when the settlement reached fulfils the requirement of an enforceable title as mentioned above. The second requirement is that the parties must have legal capacity to execute the settlement agreement. This requirement is consistent with the fact that settlement agreements are private contracts binding the signing parties. The two following requirements are that the mediation was carried out under the terms provided by law, and that the settlement agreement does not violate public policy. The final requirement is that the mediator must be on
The second way a mediated settlement agreement could become enforceable was to have it confirmed by a judge pursuant to article 249-B of the CPC. This provision states that if the mediation results in an agreement, the parties may demand its confirmation by a judge. Section 3 of the same article adds that the judicial confirmation of the agreement obtained in pre-trial mediation aims at verifying its conformity with the current legislation. It should be noted, however, that the confirmation by a judge available under article 249-B of the CPC only seems to apply to settlement agreements reached through public mediations. The mew ML clarifies and sets forth a specific article to the end of the enforceability of mediated settlement agreements. Article 9 of the new ML indeed sets forth the provisions
the list of mediators managed by the ministry of justice. This means that settlement agreements will only be automatically enforceable is the acting mediator is recognised and on the lists of the Ministry of Justice. Conversely, if a foreign mediator not registered on that list carries out mediation in Portugal under the terms of the ML, the settlement agreement cannot be automatically enforceable and will need to be homologated by a judge. This last requirement is quite surprising, as it seems that it triggers a step backwards from the previously applicable legislation, restricting the possibility of automatic enforceability. Indeed, prior to the ML, if a settlement agreement fulfilled the requirements of an enforceable title, it was automatically enforceable, regardless of who the mediator was.
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It is also worth noting that a settlement agreement reached in another European Union Member State, which respects the first requirement and does not violate public policy, is also automatically enforceable in Portugal provided it would have been automatically enforceable in the Member State in which it was reached. Independence Article 7 of the ML regards the principle of independence. It provides that the mediator has a duty to safeguard the independence inherent to his or her function, as well as to conduct him or herself with independence, free from any pressure, whether resulting from his or her own interests, personal values or external influences. The principle of independence is another fundamental guarantee to the proper functioning of mediation as a process, and it is coherent with the fact that the mediator is not an interested party. Indeed, to best help the parties, the mediator must treat them equally, and discover what they might need, want, and be interested in, so that he can help both of them mutually yet respectively maximize what they are seeking in the mediation. If the mediator is not independent, it is very unlikely that he or she equally helps both parties to reach what they would consider an acceptable resolution for themselves, regardless of what the mediator may want. Although violations to the principle of independence are more frequently associated with the mediator being motivated by an external factor, a more frequent risk of violation of the principle occurs when the parties are discussing issues which are against the mediators beliefs or values. The mediator must be particularly careful, during mediations, to set aside his or her subjective and emotional reactions and emotions, and focus on objective manners to assist the parties in what they came to mediate. Oftentimes mediators can become uncomfortable with a resolution being constructed by the parties during the mediation process because said resolution is against what the mediator believes is just, fair, acceptable, decent, or any other personal interpretation of what is going on. However, the parties are the ones who will have to live with the agreement, not the mediator, so distance is sometimes necessary to remain objective, professional and independent, even from ones own judgment, values or interests. Competence and liability
It is worth noting that there does not seem to be a general requirement to have attended a mediation course, nor to be a certified mediator to do mediations in Portugal. As such, the door is thus open to foreign mediator and to individuals with no formal training who can be appointed as mediators. Although there are legal limitations involved, namely the fact that settlement agreements cannot be automatically enforceable in Portugal, the legislator recognizes that anybody chosen by the parties could potentially be appointed as mediator, similarly to arbitrators. Once again, as the parties are in control of the substance of the mediation, they are free to choose anybody they wish, and who would, according to them, best fulfil their needs during the mediation process. It is interesting to point out that on one hand, the ML seems to be in favour of creating a professionalization of mediators, and on the other, still keeps the selection of mediators at the sole discretion of the parties, except in the public mediation systems. Thus, anybody can potentially become a mediator if selected by parties, and the ML could potentially apply to all of such selected individuals. With regard to the liability of mediators, as mentioned above, article 8 provides that mediators are civilly liable for any damage resulting from the violation of his or her duties in mediation, namely under the terms of the ML. Among some of these duties, which are listed in article 26 of the ML, and that are worth mentioning, mediators must refrain from imposing an agreement on the parties, must inform the parties on the nature, objective, fundamental principles and procedural phases of mediation, and abide by the European Commissions European Code of Conduct for Mediators1. Conclusion In conclusion, Law 29/2013 of 19 April, establishing the general principles applicable to mediation carried out in Portugal, as well as the legal frameworks of civil and commercial mediation, of mediators and of public mediation, with regard to the general principles of mediation set for in Chapter 2 and applicable to all mediation carried out in Portugal, now provide a more complete base of fundamental rights and protections for mediation, mediators and other users. It will have taken over 10 years for Portugal to
Whereas the previous legislative framework of mediation did not refer to any general duty for training or certification, save for mediators acting in the public mediation systems, the new ML, in article 8, sets forth certain provision regarding the competence and responsibility of mediators. It provides that mediators can participate in training in specific skills, both in theory and in practice, in order to acquire the adequate skillset for the exercise of their activity. The ML refers specifically to courses approved by the Ministry of Justice, but is not limitative.
recognize mediation as an autonomous means of alternative dispute resolution, which can occur both in the public and private sphere, and for which certain fundamental principles such as voluntariness, confidentiality, equality, impartiality, independence, competence, responsibility and enforceability are the backbone enabling the growth of this increasingly popular method of resolving disputes.
1 Available online at: http://ec.europa.eu/ Thomas Gaultier civiljustice/adr/adr_ec_code_conduct_en.pdf
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REPORT ON ICC YAF & YAR EVENT IN LISBON MAY 16 2013
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YAR BRINGS ICC YAF TO PORTUGAL FOR THE FIRST TIME

By Pedro Sousa Uva and Gonalo Malheiro
On 16 May 2013, YAR Young Arbitration Review co-hosted the first ICC Young
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Conference which YAR publishes in this Edition In short, state courts definitely play a key role in awarding interim relief in respect of arbitral proceedings. However, their function should be to complement and balance the merits of the arbitral proceedings.2
Arbitrators Forum (YAF) event in Portugal.
The topic of the Conference was Arbitral Tribunals and State Courts Partners or Competitors? and included two panels composed of foreign and Portuguese arbitration practitioners, amongst whom YAR was proud to include recognized authorities in international arbitration such as Steven Finizio and Dr. Stavros Brekoulakis, who require no introduction. The event took place at the premises of the Portuguese Chamber of Commerce and Industry in Lisbon, where the main Portuguese Commercial Arbitration Centre sits, and was attended by approximately 80 young lawyers, arbitrators and practitioners. The first panel of the conference addressed the topic of Interim Relief in International arbitration. Gonalo Malheiro, Partner at PBBR, Co-Founder and Director of YAR Young Arbitration Review, was the Moderator of this first Panel. Later, Alejandro Lopez Ortiz, Counsel at Hogan Lovells Sofia Martins, Counsel at Uria Menndez Proena International LLP, Madrid, approached the topic of enforcement and interim measures from two angles: on one hand, judicial enforcement of interim measures issued by arbitrators; on the other hand, interim measures issued in enforcement proceedings. This presentation allowed the audience to gain a de Carvalho, opened the proceedings and shared a brilliant international perspective on the concurrent powers between arbitral tribunals and state courts regarding interim measures. As Sofia concludes in the article based on her presentation at the Steven Finizio followed Sofia Martins and enlightened the audience about the efficiency or otherwise of Emergency Arbitrator provisions contained in the rules of several leading arbitral institutions for purposes of obtaining interim relief. As Steven Finizo explains, Emergency Arbitrator procedures are now a feature of the AAA/ICDR, SCC, SIAC, ICC, Swiss Chambers, NAI, CANACO, ACICA, and HKIAC rules, with others likely to follow.3 Amongst the several issues to take into account when thinking about resorting to emergency arbitrators for interim relief, fees are something to consider: The fees that must be paid by a party that seeks emergency relief can be substantial: the ICC Rules require an applicant to pay a US$40,000 fee (and the ICC Court may increase the amount); the SCC Rules require an applicant to pay a 15,000 fee (subject to the SCC Boards authority to modify that amount).4
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practical understanding of the raised issues. The floor was then passed to Stamatios Tsetos, Partner at Leboulanger & Associs, Paris and ICC YAF Regional Coordinator, who provided the audience with a French flavor on the topic of interim measures in international arbitration, specifically the interaction between National Courts and Arbitral Tribunals. Stamatios spoke about the overriding principles applicable to the intervention of the French Courts, both prior to the constitution of the Arbitral Tribunal and following the constitution of the Arbitral Tribunal. The presentation concluded with the idea that, under French law, the arbitrators have extensive powers related to interim relief while national courts maintain their supportive role. This conclusion is confirmed by the new French law provisions on domestic and international arbitration: article 1468 and 1469 of the French CPC. Porfrio Moreira, Associate at Cardigos & Associados, closed the panel with interesting remarks on preliminary orders from a Portuguese Law perspective. Porfrio addressed the pros and cons of preliminary orders with reference to the UNCITRAL Model Law and specifically to the new articles of the Portuguese Law on voluntary arbitration. Porfirio made the following observation: At a national level, various questions in connection with arbitral interim measures, and a fortiori with POs, remain unanswered, among which the crucial issue of whether contravening an interim measure (including a PO) delivered by an arbitral tribunal may qualify as a crime under the Portuguese jurisdiction.
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This empirical perspective was followed by an interesting international perspective on written witness statements by Stavroula I. Angoura, Partner at Katsica, Samoladas, Associates and Academic research assistant at the International Hellenic University. In her presentation, Stavroula commented, inter alia, on the use of affidavits and especially the use of written witness statements as a common practice in contemporary international commercial arbitration; on the admissibility of written statements under the LCIA Rules, WIPO Rules, UNCITRAL Rules and the IBA Rules on the Taking of Evidence; and on good practice and on advantages and disadvantages of written witness statements. Stavroula I. Angoura concluded her presentation with some interesting remarks on timings for submission of written statements. The floor was then passed to Luis Guerrero, Partner at Dinamarco, Rossi, Beraldo & Bedalque, So Paulo, who focused on Learning to deal with different Legal Systems. Taking of evidence in international commercial arbitration, the topic of his presentation. Luis gave the audience both an international and a Brazilian approach to the subject, making reference to the typical features of common law and civil law countries which may mingle in the taking of evidence in international arbitration. Pedro Sousa Uva, Associate at Miranda Correia Amendoeira & Associados, Co-Founder and Director of YAR Young Arbitration Review, closed the second panel with the topic of State Court assistance in the Taking of Evidence under Portuguese Arbitration Law. After some preliminary remarks about party autonomy in the procedure applicable to arbitration and on evidence and collection of evidence under Portuguese Arbitration Law, Pedro addressed his topic in a practical perspective in order to answer to five main questions: (i) Who may request the taking of evidence?; (ii) From whom may it be requested?; (iii) What exactly may be requested?; (iv) Where is the evidence produced?; and (v) What if the request comes from parties in an arbitration seated outside Portugal?7 YAR Young Arbitration Review would like to thank the International Chamber of Commerce (ICC), the Portuguese Chamber of Commerce and Industry and our sponsors Uria Menndez Proena de Carvalho; Wilmer Cutler Pickering Hale & Dorr LLP and PBBR law firm for their support. YAR would also like to thank all the speakers at the Conference for their time and friendship, especially those coming from Brazil, London, Greece and Paris
On the second panel, the four speakers dealt with the taking of evidence in international arbitration from several perspectives. Nuno Lousa, Counsel at Linklaters, Lisbon, moderated the panel. Dr. Stavros Brekoulakis gave an insightful perspective on organizing arbitral proceedings, document production, fact and expert witnesses and cross-examination based on the results published on the 2012 International Arbitration Survey: Current and Preferred Practices in International Arbitration, conducted by the School of International Arbitration at Queen Mary University of London, which is the second empirical research project to have been sponsored by White & Case LLP. Amongst the many interesting results of the Survey, Dr.
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Stavros Brekoulakis referred to the significant reliance of the arbitration community on the IBA Rules on the Taking of evidence (adopted in 60% of arbitrations, either as guidelines (53%) or as binding rules (7%), according to the cited Survey).
Pedro Sousa Uva and Gonalo Malheiro
1. http://www.iccwbo.org/Training-and-Events/All-events/Events/2013/ICC-YAF-Conference-in-Lisbon/ 2. Concurrent powers between arbitral tribunals and state courts regarding interim measures, by Sofia Martins and Miguel Oliveira Martins, the latter also a Lawyer at Uria Menndez Proena de Carvalho. 3. Interim Relief in International Arbitration: Emergency Arbitrator Provisions, by Steven P . Finizio and Jeremy Bocock, Wilmer Cutler Pickering Hale & Dorr LLP . 4. Idem. 5. Arbitral Tribunals and State Courts: Partners or Competitors? Some remarks on preliminary orders from a Portuguese law perspective, by Porfrio Moreira, Associate at Cardigos & Associados. 6. For more information on this Survey, please read the recent article of Dr.Stavros Brekoulakis Analysis of the Survey on the School of International Arbitration on Choices and Practices in international Arbitration, published in Edition 9 of YAR Young Arbitration Review (April, 2013). 7. State Courts assistance in taking evidence under Portuguese Arbitration Law, by Pedro Sousa Uva, Associate at Miranda Correia Amendoeira & Associados, Sociedade de Advogados, RL.
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INTERIM RELIEF IN INTERNATIONAL ARBITRATION: EMERGENCY ARBITRATOR PROVISIONS

By Steven P. Finizio and Jeremy Bocock
The rules of leading arbitration institutions expressly authorize arbitral tribunals to grant interim relief.1 In most circumstances, an arbitral tribunals authority to do so is concurrent with that of state courts. This means that, unless the parties to an arbitration agreement have agreed otherwise, they may seek interim relief from either the arbitral tribunal or a court of competent jurisdiction, and this leaves it to the party seeking interim relief to determine the forum (or forums) that it believes will be most effective.2 Some arbitration rules suggest that, after the arbitral tribunal has been constituted, the parties primary forum for interim relief should be the tribunal, and a number of
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Some commentators have described this as an effort to provide all in one services or one stop shopping.4 Emergency arbitrator procedures are now a feature of the AAA/ICDR, SCC, SIAC, ICC, Swiss Chambers, NAI, CANACO, ACICA, and HKIAC rules, with others likely to follow.5 Some of the common features and notable differences in these provisions are described below. Opt out mechanism In contrast to the ICCs little-used Pre-Arbitral Referee procedure, which only applies if parties opt in by expressly incorporating it into their arbitration agreement, the recently issued emergency arbitrator provisions all are default rules. This means that the emergency arbitrator procedure is incorporated into any arbitration agreement entered into after the rule became effective - unless the parties expressly opt out.6 The SCCs default provision goes even further than others - it applies retroactively to arbitration agreements made before the rule was enacted, applying to all SCC arbitrations commencing after 1 January 2010.
institutions have taken steps to fill the (sometimes very lengthy) gap that exists before the arbitral tribunal is constituted. In particular, many institutions have introduced emergency arbitrator procedures which provide that the parties can seek interim relief from a specially appointed temporary arbitrator before the arbitral tribunal is constituted. These provisions make arbitration potentially a more self-contained process, and, in theory at least, further reduce the role of state courts.
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Time for application All of the rules allow a party to request an emergency arbitrator before the appointment of the tribunal. Both the
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part by the parties may be unhappy when a single arbitrator appointed by the institution makes a decision that may affect the conduct of its business. Whether or not they should have been better informed about innovations in an institutions rules, those parties also may not be happy to be told that they agreed to this procedure because they failed to opt out when they adopted that institutions rules. Process and time for decision The rules all generally require that the parties have the opportunity to be heard and that the emergency arbitrator issue a reasoned decision,17 but otherwise provide the emergency arbitrator with broad discretion on how to proceed and to rule on his or her own authority.18 The institutions vary in prescribing the time for a decision: the SCC Rules provide for a decision within five days;19 the ICC Rules provide 15 days,20 while the AAA/ICDR and SIAC do not set any time limit. Urgency requirement and standard of proof Most emergency arbitrator provisions do not refer to the standard for obtaining interim relief (although a number expressly note that any relief may be subject to payment of security by the requesting party).21 While some rules expressly require that the applicant must show that relief is needed on an emergency basis,22 or that relief cannot await the constitution of the tribunal,23 it is not clear what, if anything, this adds to the general formulation for interim relief, which usually requires some showing of urgency. It may be that some emergency arbitrators will decline to grant relief where a the requesting party cannot meet a heightened standard of urgency, knowing that the request can be pursued further with the tribunal, but this is not yet clear. Form of decision Interim relief by definition is not final, and there are significant issues with regard to enforcing interim relief granted by arbitral tribunals in national courts under either the New York Convention or national arbitration legislation. The nature of the emergency arbitrator function a temporary authority granted to decision-maker who does not have the authority to issue a final award means that there is even greater uncertainty about whether relief granted by an emergency arbitrator can be enforced.24 This is true regardless of whether the decision is characterized as an interim award or an order. Institutions have anticipated, but not resolved, this
ICC and SCC go further and allow a request to be made before the arbitration commences. The ICC Rules limit this
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by requiring that a request for arbitration to be filed within 10 days of emergency relief application, while the SCC Rules
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provide that the emergency arbitrators decision will expire if no request for arbitration has been filed within 30 days from the date of the emergency decision.10 Other rules only permit an emergency arbitrator request to be made with or after the notice of arbitration. All of the rules provide that requests for
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an emergency arbitrator cannot be made after the tribunal has been fully constituted.
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Limitations on scope None of the recently issued emergency arbitrator rules permit ex parte requests.13 Nor do any of the new provisions purport to change the nature of the relief available to the emergency arbitrator. Not surprisingly, none of the emergency arbitrator provisions purport to permit relief against non-parties to the arbitration, although this raises at least some potential complications under the rules that permit interim relief to be sought (and granted) before an arbitration is commenced. Appointment of the emergency arbitrator All of the rules provide for the arbitral institution to appoint the emergency arbitrator, and to do so very quickly (within 24 hours under the SCC Rules;a business day under the AAA/ICDR and SIAC Rules; or two days under ICC Rules).
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The rules
also generally prohibit an emergency arbitrator from acting as an arbitrator in the same dispute (without the parties consent) and require that the emergency arbitrator be independent and impartial.15 The rules are less clear about how challenges to an emergency arbitrator will be handled on an expedited basis or whether institutions will be less concerned about conflicts given the temporary nature of the emergency arbitrators mandate. Identifying and appointing an emergency arbitrator may not be a simple task for institutions, particularly if requests become more routine. The number of arbitrators who are immediately available, capable of acting as an emergency arbitrator and appropriate for the particular dispute will likely be limited. Over time, it will be important to see how an institution identifies and selects emergency arbitrators, how wide its pool of candidates is, and how transparent it is about the process. While it may seem both obvious and necessary to have the institution appoint emergency arbitrators, some less wellinformed parties may be surprised to find that a potentially significant decision has been made on a very short deadline at the outset of the case by a decision-maker selected in less than a day and in a manner which may be very different from the process the parties described in their arbitration agreement.
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enforcement issue by providing that the emergency arbitrators decision may be in the form of either an order or an award,25 although, notably, the ICC Rules provide that the decision is to be made in the form of an order.26 End of mandate and binding effect of decision The emergency arbitrators mandate does not end when a decision is rendered. Rather, the mandate expires when the
Indeed, a party that expects the dispute to be decided by a multi-national three-member tribunal selected at least in
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tribunal is constituted (which may be upon appointment or upon receipt of the file, depending on the rules). Until that
27
Despite the proliferation of emergency arbitrator rules, and the almost entirely favorable commentary on them, it is too early to tell if parties will embrace these new provisions, whether there will be a significant number of requests for emergency relief or how these provisions will affect the relationship between arbitration and national courts with regard to interim relief. To date, there have only been a small number of emergency arbitrator requests. The information that institutions have provided about these first cases is useful, but it is not yet possible to get a sense of important aspects of how these rules will work. Based on information made available by the SCC and SIAC, it appears that in the first few cases applying their new rules, those institutions were able to appoint emergency arbitrators very quickly and the emergency arbitrators very quickly rendered decisions.35 It is perhaps also notable that in one out of the four SCC cases administered in 2010, three out of the first four reported SIAC cases, and 11 of the 14 reported AAA/ICDR cases, the emergency arbitrator granted some form of interim relief.36 It also appears that two out of three of the first SIAC cases settled after emergency interim relief was granted.37 These very first cases tell us little about how well institutions will perform their appointment function if emergency requests become routine (or how much information they will continue to disclose about emergency arbitrator cases). To date, emergency arbitrators seem willing to grant relief, but it is not clear whether that reflects a more liberal approach (perhaps due to the temporary nature of the mandate), or how the interplay between the emergency arbitrator and the tribunal may influence the decision-making of either (or of courts).38 Nor is it clear whether the settlements that have followed grants of emergency relief in some of these initial emergency arbitrator cases reflect a meaningful pattern, although it is not
mandate expires, the emergency arbitrator is authorized to modify, terminate or annul any previous decision.
28
None of the rules require that the tribunal reaffirm the emergency arbitrators decision in order for it to remain in force after the emergency arbitrators mandate ceases. Save for a couple of very particular exceptions (e.g., where a request for arbitration has not been filed or the tribunal has not been constituted),
29
the emergency arbitrators decision remains binding until the tribunal issues a final award or otherwise reconsiders the interim relief granted by the emergency arbitrator.
30
All the emergency arbitrator provisions make clear, however, that the tribunal is not bound by the emergency arbitrators decision, and the tribunal may reconsider, amend or vacate that decision. Costs The fees that must be paid by a party that seeks emergency relief can be substantial: the ICC Rules require an applicant to pay a US$ 40,000 fee (and the ICC Court may increase the amount); modify that amount).
32 31
the SCC Rules require an applicant to
pay a 15,000 fee (subject to the SCC Boards authority to

33
Most rules expressly provide that the emergency arbitrator may apportion the costs of the procedure, which may include legal fees, subject to the tribunals final decision on cost allocation. How tribunals will treat the costs relating to relief
34
that was granted by an emergency arbitrator and later vacated or substantially modified by the tribunal is not clear. Effect and use of emergency arbitrator provisions
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surprising that a significant interim relief order made shortly after (or even before) a request for arbitration can create serious settlement pressure. Whether this is a good thing is another question, and some parties may be concerned that these new rules entrust such a potentially influential decision to an emergency arbitrator hurriedly appointed by the institution, not the parties. This may lead some parties to avoid such provisions; others will likely view this as a better alternative to a similar decision from a court.
would have been made to the tribunal after it was constituted). However, in many cases a party may not be able to meaningfully enforce its legal rights without effective interim relief. While some parties may be happy to have a third bite at the proverbial fruit, unless and until interim relief granted by arbitrators can be routinely enforced, a national court may be a partys only option for timely, effective interim relief. As things stand, emergency arbitrator provisions cannot make arbitration onestop shopping, and parties will continue to need to weigh how effective (and efficient) resort to an emergency arbitrator will
The availability of an emergency arbitrator certainly will mean that some particularly urgent interim relief requests will now be made through arbitral institutions when before they may have been made to a court (although it is also possible that some of those requests would never have been made or
be within the context of their particular dispute.
Steven P. Finizio and Jeremy Bocock
1. This article uses interim relief generally to refer to interim, emergency, provisional, or conservatory measures intended to preserve the status quo pending a merits decision. 2. This often means balancing a number of competing considerations. Pursuing interim relief through an arbitral tribunal may mean greater confidentiality and may avoid unfamiliar and unfriendly courts in the place (or places) where the other party has assets or activities. At the same time, relief granted by an arbitral tribunal may not be enforceable and tribunals do not have the same coercive authority to compel compliance as courts. 3. For example, Article 28.2 of the ICC Rules refers to requests to a judicial authority [b]efore the file is transmitted to the arbitral tribunal, and in appropriate circumstances even thereafter. Similarly, Article 26.3 of the SIAC Rules suggests that parties may only seek interim relief from a judicial authority prior to the constitution of the Tribunal and in exceptional circumstances thereafter. 4. See, e.g., Justin DAgostino, First aid in arbitration: Emergency Arbitrators to the rescue, KluwerArbitration Blog 15 November 2011. 5. There are alternative approaches to addressing the delay before the arbitral tribunal is constituted, including the LCIAs procedure for expedited formation of the tribunal (LCIA Rule 9.1) and expedited briefing (as found in ICSID Rule 39). This issue also is more difficult to address in ad hoc proceedings. 6. AAA/ICDR Rules, Art. 37.1; SIAC Rules, Sch. 1, Art. 11; ICC Rule 29.6(b). 7. SCC Rules, App. II, Art. 1.1; SIAC Rules, Sch. 1, Art. 1.1; ICC Rules, Art. 29.1. 8. SCC Rules, App. II, Art. 1. 9. ICC Rules, App. V , Art. 1.6. The emergency arbitrator can determine that a longer time period is necessary. 10. SCC Rules, App. II, Art. 9.4.(iii). 11. See, e.g., SIAC Rules, Sch. 1, Art. 1. 12. AAA/ICDR Rules, Art. 37.2; SCC Rules, App. II, Art. 1.1; SIAC Rules, Sch. 1, Art. 1; ICC Rules, Art. 29.1 and App. V , Art. 2.2;. 13. ICC Rules, App. V , Art. 1.2, 1.5; SCC Rules, App. II, Art. 3; SIAC Rules, Sch. 1, Art. 1. 14. AAA/ICDR Rules, Art. 37.3; SCC Rules, App. II, Art. 4.1; SIAC Rules, Sch. 1, Art. 2; ICC Rules, App. V , Art. 2.1. 15. AAA/ICDR Rules, Art. 37.3 & 37.6; SCC Rules, App. II, Art. 4.3 (referring to SCC Rules, Art. 15 on challenges of arbitrators), and App. II, Art. 4.4; SIAC Rules, Sch. 1, Art. 3 & 4; ICC Rules, App. V , Art. 2.4, 2.5 & 2.6. 16. SIAC contrasts an emergency arbitrator to a conventionally-appointed tribunal. 17. AAA/ICDR Rules, Art. 37.4 & 37.5; SCC Rules, Art. 19 (by application of App. II, Art. 7 & Art. 8.2(ii)); ICC Rules, App. V , Art. 5.2 & 6.3; SIAC Rules, Sch. 1, Art. 5 & 6. 18. For example, the AAA/ICDR and SIAC rules provide that the emergency arbitrator shall expeditiously establish a schedule providing a reasonable opportunity to all parties to be heard, and may provide for proceedings by telephone conference or on written submissions as alternatives to a formal hearing. 19. SCC Rules, Art. 8.1. 20. ICC Rules, App. V , Art. 6.4. 21. AAA/ICDR Rules, Art. 37.7; SCC Rules, Art. 32.2 (referred to in App. II, Art. 1.2); SIAC Rules, Sch. 1, Art. 8; ICC Rules, App. V , Art. 6.7. 22. SIAC Rules, Sch. 1, Art. 1. 23. ICC Rules, Art. 29.7. 24. Article 17 H of the 2006 version of the UNCITRAL Model Law provides that an interim measure issued by an arbitral tribunal shall be enforced upon application to a competent court, but that provision does not exist in the 1985 version of the Model Law. This means that very few countries currently have an arbitration law expressly requiring enforcement of interim measures issued by an arbitral tribunal and, other than Singapore (which has modified its law to provide for the recognition and enforcement of relief granted by emergency arbitrators), it does not appear that any other jurisdiction expressly provides for enforcement of interim relief granted by an emergency arbitrator. 25. See AAA/ICDR Rules, Art. 37.5; SCC Rules, App. II, Art. 1.2 (referring to Art. 32.3, which provides that an interim measure shall take the form of an order or an award); SIAC Rules, Sch. 1, Art. 6. 26. ICC Rules, Art. 29.2, & App. V , Art. 6.1. 27. AAA/ICDR Rules, Art. 37.6; SCC Rules, App. II, Art. 1.2; SIAC Rules, Sch. 1, Art. 7. The ICC Rules do not include language expressly referring to the end of the emergency arbitrators mandate, although such a limit is implicit in Article 29.1 of the ICC Rules. 28. AAA/ICDR Rules, Art. 37.5 (emergency arbitrator may modify or vacate the interim award or order for good cause shown); SCC Rules, App. II, Art. 9.2 (emergency arbitrator can amend or revoke the decision upon a reasoned request of a party); SIAC Rules, Sch. 1, Art. 6; ICC Rules, App. V , Art. 6.8. 29. See, e.g., ICC Rules, App. V , Art. 1.6 (if a request for arbitration has not been filed within 10 days of receipt of the emergency application); SCC Rules, App. II, Art. 9.4(iii) (if a request for arbitration is not made within 30 days from the date of the emergency decision or the case has not been referred to a tribunal within 90 days); SIAC Rules, Sch. 1, Art. 7 (if the tribunal is not constituted within 90 days of the emergency order. 30. SCC Rules, App. II, Art. 9.4(ii); SIAC Rules, Sch. 1, Art. 7; ICC Rules, App. V , Art. 6.c). 31. AAA/ICDR Rules, Art. 37.6; SCC Rules, App. II, Art. 9.5; SIAC Rules, Sch. 1, Art. 7; ICC Rules, Art. 29.3 & App. V , Art. 6.6. 32. ICC Rules, App. V , Art. 7. 33. SCC Rules, App. II, Art. 10. Neither the AAA/ICDR nor SIAC specify any fixed application fee. 34. AAA/ICDR Rules, Art. 37(9); SIAC Rules, Sch. 1, Art. 11; ICC Rules, Art. 29.4 (tribunal authority to reallocate costs fixed by emergency arbitrator); App. V , Art. 7.3 & 7.4 (emergency arbitrator authority to fix costs, including legal fees). The SCC Rules differ in that the decision on costs is reserved for the tribunal. See SCC Rules, Art. 10.5. 35. See Lundstedt, SCC Practice: Emergency Arbitrator, Decisions rendered 2010, Arbitration Institute of the Stockholm Chamber of Commerce, p. 11. The AAA/ICDR emergency provision, which came into force in 2006, had been invoked fourteen times as of October 2010 but few specific details are available. See Hosking & Valentine, Pre-arbitral Emergency Measures Of Protection: New Tools For An Old Problem, in Commercial Arbitration 2011: New Developments and Strategies for Efficient, Cost-Effective Dispute Resolution, 199, p. 5. The ICC has not released any statistics concerning the use of its emergency arbitrator provision, which came into force on 1 January 2012. 36. Lundstedt, p. 11; Hosking & Valentine, p, 5; Bose & Meredith, Emergency Arbitration Procedures: A Comparative Analysis, International Arbitration Law Review 2012 (5), pp. 188-190. 37. Bose & Meredith, pp. 188-190. 38. Some of the questions that parties will want to consider include: whether an emergency arbitrator will be more inclined to grant relief knowing that the tribunal is not bound by the decision or whether the opportunity for a party to pursue the requested relief from the tribunal will make the emergency arbitrator more reluctant to grant relief, particularly in the absence of a showing of true emergency; whether a useful opportunity to educate the tribunal in the parties view of the merits and/or equities is lost if an interim relief application is addressed to an emergency arbitrator rather than the tribunal; how much influence, if any, an emergency arbitrators decision will have an on the tribunal; and whether an emergency arbitrators decision will influence a court asked to order relief in aid of the same arbitration.
61 YAR JULY 10, 2013
CONCURRENT POWERS BETWEEN ARBITRAL TRIBUNALS AND STATE COURTS REGARDING INTERIM MEASURES
By Sofia Martins and Miguel Oliveira Martins
Introduction It is widely acknowledged that arbitration is not self-sufficient. Somewhat ironically, arbitral proceedings occasionally require the involvement of national courts to ensure the proper conduct of the arbitration or even to overcome some of the shortcomings that arbitration may present, particularly when parties are recalcitrant or employ dilatory tactics or other forms of obduracy, known to some as guerrilla tactics. Inevitably, this paradox may lead to some troublesome concerns regarding the rightfulness and extent of state courts intervention, as well as the fine line that separates intervention from interference. In practice, such concerns arise, for instance, when interim measures are deemed necessary to uphold or maintain the status quo during arbitral proceedings and until its outcome. As a result, most modern arbitration legislation and institutional rules allow arbitral tribunals to issue interim measures of relief. Nonetheless, Therefore, although the recourse to state courts is patently obvious when national legislation prevents arbitral tribunals from issuing interim measures1, the predicament comes to surface in several situations, such as: (i) when interim relief is necessary prior to the constitution of the arbitral tribunal; (ii) when interim measures are intended to affect and bind third parties not subject to the arbitration proceedings; (iii) when international enforceability is required outside the scope of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention); and (iv) when ex parte relief is truly relevant.2 As a result, the key role that state courts may play in conjunction with arbitral proceedings is understandable. Even so, this organic interaction between both courts cannot be mistaken for a perfect symbiosis, as it is certainly not free from idiosyncrasies. some situations may occur where it is necessary to resort to the assistance of state courts to provide that extra enforceability.
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One of those quirks lies precisely in the fact that resorting to a state court was historically considered by some to be a breach of the arbitration agreement. In this respect, the matter was put to rest by most modern legislation and institutional rules, which state that judicial interim relief is not incompatible with an arbitration agreement. This compatibility is specially visible in the International Chamber of Commerce (ICC) Rules3, the London Court of International Arbitration (LCIA) Rules4, the UNCITRAL Arbitration Rules (as revised in 2010), as well as in the UNICTRAL Model Law and Model Law based
5
decisions and the existence, or not, of an effect of estoppel between the decisions of both state courts and arbitral tribunals.12 Indeed, a party seeking interim relief could theoretically apply for such measure in both types of courts, ultimately taking advantage of the most favourable decision. From the arbitral tribunals perspective, to prevent any inconsistencies, the UNCITRAL Model Law based legislations13 (such as the PAL14) clearly state that an arbitral tribunal may reconsider its own decisions, thus not bestowing any res judicata effect on interim decisions. Still, the question remains open regarding the power of the arbitral tribunal to reconsider a state courts interim measure and even reversing it. A preeminent line of thought15 sustains that the principle
legislation, such as the PAL (Portuguese Arbitration Law)

6
and the Spanish Arbitration Act. Some reservations are also made, however, regarding the rightful receiver of the interim application, which raise some doubts as to whether the application should be directly made to state courts or to the arbitrators themselves and in what circumstances. Coordination of overlapping powers In order to respond to this sensitive issue, both the ICC and LCIA rules, for example, clearly establish the so called restricted access approach, stating that interim measures may only be applied for in state courts in limited circumstances once the arbitral tribunal has been formed. Hence, the state courts role is considered as complementary prior to the appointment of the arbitral tribunal, and subsidiary thereafter. However, most of the UNCITRAL Model Law based legislations (such as the PAL), establish the so called freedom of choice approach, which appears to allow for a total overlap of powers between arbitral and state court jurisdiction .
7
of party autonomy endows arbitral decisions with the power ultimately to prevail over the state courts decisions, based on the construction that if the parties chose to submit the merits of the dispute to a specially created arbitral tribunal, this means their intention was for that particular tribunal finally to rule on the merits, not state courts. Consequently, a state court order is deemed temporary in nature, not depriving the arbitral tribunal from rendering further interim relief or a final remedy, even if either of those might contradict a prior state court decision. In addition, regardless of the principle of party autonomy, common sense would still dictate a similar approach whenever new facts or evidence arise after the decision of the state court, when the underlying criterion to reach the decision differs in both jurisdictions, or even when both courts analyse the matter under a different law. In any case, even though it seems that decisions of arbitral tribunals should prevail over those of state courts, it is up to the arbitrators themselves to decide each matter on a case-by-case basis. As such, in practice, the freedom of choice mentioned above is only a prerogative to the extent that a party may opt for a certain path, even if one of the trails proves to be a deadend when conditioned by the principle of party autonomy. Likewise, by this very same line of reasoning, a measure granted by an arbitral tribunal cannot be reviewed by a state court. From the state courts perspective, and despite the UNCITRAL Model Law granting state courts the same powers as arbitral tribunals in respect of interim relief16, in an apparent total freedom of choice, case law has demonstrated that state courts have chosen to interpret such freedom in a restrictive manner. In, fact, on the one hand, some jurisdictions have interpreted their roles as being complementary to the arbitral proceedings. On the other hand, the decision-makers have radically strived to avoid, at all cost, a multiplicity of proceedings, thus refusing to issue any potentially-overlapping decision.17 Conclusion In a nutshell, although interim relief from state courts
Even so, such freedom cannot be construed as a true carte blanche, as such prerogative shall, evidently, depend on the stage of the arbitration itself. In fact, in the absence of emergency arbitrator provisions prior to the formation of the arbitral tribunal, for instance, the party seeking interim relief is forced at that stage to resort to state courts . Conversely, if the arbitral
8
tribunal has already been formed, it is paramount to take the respective practical implications into consideration9, such as: (i) the probability of the other party not abiding voluntarily by the interim measure, thus requiring enforcement by state courts ;
10
(ii) the special technical and/or complex nature of the underlying problem, thus requiring the expertise and knowledge of the arbitral tribunal; (iii) the aforementioned necessity of seeking interim relief against third parties, directing the applicant to state courts; (iv) the range of each measure available to each type of court; and (v) the sensitive nature of the issue at hand, which may tilt the scale towards the confidentiality ensured by arbitral proceedings.
11
Moreover, one should not ignore the theoretical implications of this alleged freedom of choice. Firstly, emphasis must be given to the risk of conflicting
is undoubtedly necessary, given particular circumstances of a
63 YAR JULY 10, 2013
practical or theoretical nature, even when there appears to exist a total freedom of choice between arbitral tribunals and state courts, this apparent freedom should not be taken literally. From a practical and strategic perspective, the right course of action and access to the most efficient remedy will ultimately vary according to each case and the nature of the relief sought. One must constantly take into consideration the relevant arbitration rules and the applicable procedural law or arbitral legislation so as to determine whether the power to grant the relief sought is conferred upon the arbitral tribunal or the courts and whether an application is best made to the one or the other. From a theoretical perspective, such an approach must always consider the principle of autonomy of the parties and must be cautiously interpreted to avoid an abusive or
unintended outcome. State courts should, in turn, interpret the principle of compatibility as the power to grant provisional measures and complement arbitral proceedings, simultaneously resisting applications of these powers which may, in the end, subvert the objectives of the powers themselves. In short, state courts definitely play a key role in awarding interim relief in respect of arbitral proceedings. However, their function should be to complement and balance the merits of the arbitral proceedings.
Sofia Martins and Miguel Oliveira Martins
1. As is the case in Italy, for example. See article 818 of the Code of Civil Procedure. 2.Many national laws on civil practise do not allow for ex parte applications and even the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration (the UNCITRAL Model Law) only allows for a very limited application of ex parte relief when dealing with preliminary orders. As is also the case of the UNCITRAL Rules (as revised in 2010), used both in ad hoc and institutional proceedings. See, in particular, article 26. 3. Article 28(2) of the ICC Rules on Conservatory and Interim Measures: Before the file is transmitted to the arbitral tribunal, and in appropriate circumstances even thereafter, the parties may apply to any competent judicial authority for interim or conservatory measures. The application of a party to a judicial authority for such measures or for the implementation of any such measures ordered by an arbitral tribunal shall not be deemed to be an infringement or a waiver of the arbitration agreement and shall not affect the relevant powers reserved to the arbitral tribunal. Any such application and any measures taken by the judicial authority must be notified without delay to the Secretariat. The Secretariat shall inform the arbitral tribunal thereof. 4. Article 25(3) of the LCIA Arbitration Rules on Interim and Conservatory Measures: The power of the arbitral tribunal (...) shall not prejudice howsoever any partys right to apply to any state court or other judicial authority for interim or conservatory measures before the formation of the arbitral tribunal and, in exceptional cases, thereafter. Any application and any order for such measures after the formation of the Arbitral Tribunal shall be promptly communicated by the applicant to the Arbitral Tribunal and all other parties. [...]. 5. Article 9 of the UNCITRAL Model Law on Arbitration agreement and interim measures by court: It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure. 6. Article 7 of the PAL, which simply translates into Portuguese the UNCITRAL Model Law. 7. Article 17-J of the UNCITRAL Model Law on Court-ordered interim measures: A court shall have the same power of issuing an interim measure in relation to arbitration proceedings, irrespective of whether their place is in the territory of this State, as it has in relation to proceedings in courts. The court shall exercise such power in accordance with its own procedures in consideration of the specific features of international arbitration.; similar to Article 29 of the PAL. 8. See DANA RENE BUCY, How to Best Protect Party Rights: The Future of Interim Relief in International Commercial Arbitration Under the Amended UNCITRAL Model Law, American University International Law Review, Volume 25, Issue 3, Article 5, 2010, pp. 579-609. 9. See REdFErN & HUNTEr, in Redfern and Hunter On International Arbitration, Oxford University Press, 2009, 718: The answer to the question of whether to seek interim relief from the court or from the arbitral tribunal is likely to depend upon the particular circumstances of each case. If, for example, the arbitral tribunal is not yet in existence (or, in an ICC case, has not yet received the file), and the matter is one of urgency [or, alternatively arbitrators do not have necessary powers to grant the measure to be applied for], the only possibility is to apply to the relevant national court for interim measures, whilst at the same time taking steps to move the arbitration forward, so as to show that there is every intention of respecting the agreement to arbitrate. Where the arbitral tribunal is in existence, it is appropriate to apply first to that tribunal for interim measures, unless the measures sought are ones that the tribunal itself does not have the power to grant. 10. See JOANNA SIMEs, Interim Measures Issued by National Courts in Aid of International Arbitration: A Brazilian Perspective, Warwick Student Law Review, Issue 1, Volume 1, 2011. 11. See eyda Dursun, A Critical Examination of the Role of Party Autonomy in International Commercial Arbitration and an Assessment of its Role and Extent, Yalova niversitesi Hukuk Fakltesi Dergisi, 2012. 12. See BErNd D. EhLE, Concurrent Jurisdiction: Arbitral Tribunals and Courts Granting Interim Relief, Yorkhill Law Publishing, 2007. 13. Article 17-D(1) of the UNCITRAL Model Law on Modification, suspension, termination of interim measures, which states the following: The arbitral tribunal may modify, suspend or terminate an interim measure or a preliminary order it has granted, upon application of any party or, in exceptional circumstances and upon prior notice to the parties, on the arbitral tribunals own initiative. 14. See Article 24(1) of the PAL. 15. POUdrET, BEssON ( Droit compar de larbitrage international , 2002, p. 556), EMMANUEL GAILLArd and JOhN SAVAgE ( FOUChArd, GAILLArd, GOLdMAN on International Commercial Arbitration , Kluwer Law International, 1999, pp. 722/723). 16. Article 17-J of the UNICTRAL Model Law: A court shall have the same power of issuing an interim measure in relation to arbitration proceedings [...]. 17. In UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration (in respect of the interpretation of article 17 J): a Hong Kong court dealing with provisions of similar nature ruled that such a power should be exercised sparingly and only if there are special reasons to do so; an Indian court also took the view that if a party elects to apply for an interim measure before the arbitral tribunal, it should not seek the same relief from a court on the basis that multiplicity of proceedings ought to be avoided at all causes; a New Zealand court considered that the purpose of court-ordered interim measures is to complement and facilitate the arbitration, not to forestall or to substitute for it.
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ARBITRAL TRIBUNALS AND STATE COURTS: PARTNERS OR COMPETITORS? - Some Remarks on Preliminary Orders from a Portuguese Law Perspective By Porfrio Moreira
1. Introduction A preliminary order (PO) may be defined as an application, without notice to any other party, directing a party not to frustrate the purpose of the interim measure requested. POs have by their very nature a reserved place and a prominent role at the intersection of the powers of arbitral tribunals and state courts. Some authors take the view that POs are not a realistic alternative in international arbitration and therefore state courts will inevitably remain the key actors in this regard.
2
2.1 Pros One may make four basic arguments in favor of the use of POs in arbitration: the need for urgency, the need for surprise, the need to ensure the effectiveness of an interim application (and thus of the final award), and the idea of arbitration selfsufficiency. The first two arguments are valuable for justifying the existence of all POs, i.e., irrespective of their judicial or arbitration nature. In a nutshell, POs are the only effective way to deal with situations where the time required to hear the other party(ies) would frustrate the purpose of the intended measure (urgency) and/or situations in which a prior hearing, by raising the other partys awareness of the measure, would undermine the effectiveness of the measure (surprise). The other two arguments are, strictly speaking, arbitration
The pros and cons of POs in arbitration based upon the UNCITRAL Model Law (2006) (UML) will be briefly addressed, followed by a few comments on the Portuguese relevant legal framework. Lastly, some concluding remarks will be sketched. 2. Pros, Cons and the Uncitral Model Law
65 YAR JULY 10, 2013
related. In fact, there are some interim measures that are only conceivable in arbitration proceedings if the parties are also entitled to request a PO in the same proceedings to ensure the effectiveness of the envisaged interim measure. Furthermore, arbitration will be more appealing to the parties if, at least from a theoretical point of view, all declaratory means available to the parties before the state courts are also available before the arbitral tribunal (self-sufficiency). 2.2 Cons It is commonly argued that POs conflict with the consensual nature of arbitration and that such measures undermine the principle of equality of arms. As for the consensual nature of the arbitration, it is submitted that, provided that the parties were free to set a package of rules whereby the inclusion or the exclusion of POs was established, the consensual nature of the arbitration is preserved. This is to say that a given PO will always be anchored in the parties contractual autonomy, at least indirectly. Furthermore, the principle of equality of arms is not an absolute principle. As a consequence, this principle must be weighed against other principles. This balancing exercise does not substantially differ from the one underlying the suitability of having POs provided for in the procedural law governing the activity of state courts, and the requirements to be set forth in order to strike an optimal balance. From a pragmatic standpoint, it is correctly noted that POs are difficult to enforce and virtually never accomplish[es] any serious purpose
3
UML provisions. Thus, the brief points made in connection with UML are applicable in their entirety to the PAL. It is worth noting that the prior Portuguese legal framework on arbitration was silent as to the admissibility of interim measures, let alone POs. Facing a silent law, the appeal courts delivered conflicting decisions.13 As the focus of courts, scholars and other lawyers was then on the fundamental existential questions on interim measures, little attention has been paid to the details of the legal regime of interim measures, as one would expect. The following are some of the multiple issues awaiting clarification. What types of injunction are admissible under POs? Are only negative injunctions permitted in order to preserve a given situation or may positive injunctions also be permitted if they are required to preserve a given situation? Under Portuguese law, disobedience of interim measures issued by state courts is a criminal act. This criminal feature is undoubtedly a key element as to the effectiveness of interim measures. At first sight it is controversial whether contravening an interim measure issued by an arbitral tribunal is also a crime, whereas, in the particular case of POs, it seems that the exclusion of the use of any coercive state powers leads to the conclusion that breaching such decisions does not qualify as a crime.14 In any case, this ought to be clarified for the sake of legal certainty, so that the agents may predict the consequences of their conduct as postulated by the fundamental principles of criminal law. One thing seems evident: if deprived of criminal consequences, arbitral interim measures will have a minor role compared to state court interim measures. Another passionate discussion is the effective civil consequences of contravening a PO, that is to say what exactly means binding on the parties? Deprived of enforceability, POs may solely be a source of civil liability. Theoretically, the general liability requirements apply, and therefore once they are met, the defaulting party is liable for the damages incurred by the other party as a result of the violation of the PO. In practice, the range of such situations that would not already be covered
as arbitral tribunals are deprived of coercive
powers. While it is unquestionable that the concourse of declaratory and coercive powers places state tribunals in a privileged position to deal with POs, it seems also consensual to assert that this issue applies to all interim measures, whether they are POs or not, even if the qualified urgency (and surprise effect) that is congenital to POs exacerbates this difficulty. 2.3 Uncitral Model Law The UML dedicates two articles to POs. As designed in
4
by contractual or tort liability, i.e., those situations where the PO would have a true effet utile, appears, to the say the least, to be narrow. 4. Portuguese state courts and POs in judicial proceedings The general legal seat of POs in the Portuguese Civil
the UML, POs shall only be available if the parties did not agree otherwise; their material requirements are: (i) fumus boni iuris;
5
(ii) periculum in mora arising out of prior disclosure to the other party; and (iii) proportionality,6 and are subject to a procedural requirement: they must be filed together with the request for the interim measure to which the PO is ancillary.
7
As for the regime of POs, the UML provides for: (i) a differed adversarial principle ; (ii) a limited time of effectiveness
8
Procedure Code (CPC) is article 385. In broad terms, POs are subject to the same conditions as arbitral POs under UML. They are similar to all other interim measures, with the exception of the underlying differed adversarial principle. However, judicial POs are fully enforceable and, as with
(20 days); and (iii) its possible conversion into an interim

9
measure.
10
A PO is not an award, it is binding on the parties

11
but not enforceable.
3. Portuguese legal framework on POs in arbitration The new Portuguese arbitration law
12
all other interim measures, their breach will lead to criminal liability. Some judicial interim measures are by their very nature POs, as it is the case of the precautionary attachment.15 A further manifestation of a differed adversarial principle is
(PAL) dedicates
two articles to POs which mirror, almost word-for-word, the
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the procedural measure to challenge shareholders meeting resolutions: when notified to reply to the request for the interim measure, the relevant company is by virtue of law prevented from taking any actions pertaining to the execution of the resolution at issue.16 Interestingly, the CPC provides for an ex parte stricto sensu measure: the suspension of construction order.
17
As far as arbitral POs are concerned, PAL is almost a carbon copy of the UML, therefore providing for a generous approach to these measures. At a national level, various questions in connection with arbitral interim measures, and a fortiori with POs, remain unanswered, among which the crucial issue of whether contravening an interim measure (including a PO) delivered by an arbitral tribunal may qualify as a crime under the Portuguese jurisdiction. Theoretically, nothing prevents national laws from providing for enforceable arbitration POs: are these not disposable rights, after all?
Under
this measure, a party may directly request the other party to immediately suspend a construction by means of a verbal communication, provided that within five days judicial ratification is requested. 5. Concluding (yet very preliminary) remarks POs limits and problems derive from their very nature and this discussion should therefore not be deemed as primarily arbitration related. In fact, it is not unreasonable to say that one has to balance common principles both in arbitration and judicial proceedings.
Porfrio Moreira
1. This article is merely a written summary of a brief oral presentation in the ICC-YAF conference Arbitral Tribunals and State Courts: Partners or Competitors? hosted by YAR that took place in Lisbon on 16 May 2013. 2. PETEr J.W. ShErwIN ANd DOUgLAs C. RENNIE sustain that POs are [] truly dire situations where parties still must seek interim relief from a national court, particularly as ex parte relief is not a realistic alternative in international arbitration Interim Relief Under International Arbitration Rules and Guidelines: a comparative analysis, in The American Review of International Arbitration, vol. 20, no. 3, 2009, pp. 317-366, p.319. 3. GArY b. BOrN, apud PETEr J.W. ShErwIN ANd DOUgLAs C. RENNIE, op. cit., note 78, p. 330. 4. Articles 17 B and 17 C of UNCITRAL Model Law on International Commercial Arbitration 1985 with amendments as adopted in 2006. 5. Article 17 B (1) of UML. 6. Article 17 B (2) and (3) of UML. 7. Article 17 B (1) of UML. 8. Article 17 C (2) of UML. 9. Article 17 C (4) of UML. Pursuant to the UML, the effectiveness period is counted as of the issuance of the PO, although it seems more logical to do so as of the date of its service. 10. Article 17 C (4) of UML. 11. Article 17 C (5) of UML. 12. Law 63/2011 of 14 December. 13. In this respect cf. JOs MIgUEL JdICE, As Providncias Cautelares e a Arbitragem: Em que Estamos?, in Estudos em Homenagem ao Professor Doutor Carlos Ferreira de Almeida, Almedina, 2011, vol. III pp. 657-679, p. 659 et seq. and the summary of case-law therein. 14. A detailed discussion on this topic is clearly beyond the scope of this article. Such a discussion would notably entail the assessment of the nature of the arbitral tribunals under the Portuguese jurisdiction as well as an analysis on the (non) fulfilment of the requirements deriving form the principle of legal certainty nullum crimen sine lege. 15. Articles 406-408 of the CPC. 16. Articles 396 and 397 of the CPC. 17. Article 412 of the CPC.
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LEARNING TO DEAL WITH DIFFERENT LEGAL SYSTEMS Taking of Evidence in International Commercial Arbitration
By Luis Fernando Guerrero
1. Introduction and Objective This text aims to analyze the latest trends in the proceeding taking of evidence in international commercial arbitration processes, in light of civil law and common law legal systems. It seeks to determine how this information and systems exchange deal with dispute resolution, which system has greater influence over the other, and how its users try to adapt to this new reality. 2. General Aspects Doctrine has stressed, that civil law and common law systems tend to be similar. As Ren David says, In England and France, although the pathways used to discover the rules of law were different, there was always the same basic conception of law: the law is, above all, reason, lex est aliquid rationis.
1
Lawyer should try to take advantage of the procedure with minimal effort and expense to his client. A more effective legal system may be the key to form this type of lawyer, ensuring his/ her survival between legal systems. The focus on providing information and documents can be the key to success in a case. The fact is that practice changes this scenario of apparent tranquility. In truth, what is seen in international commercial arbitration is the adoption of common law rules rather than civil law rules. Only under certain circumstances does civil law rule prevail, perhaps due to a higher economic influx in countries of common law tradition, which is the case of the United States and England. Therefore, the effort of civil law lawyers should be greater, which has in fact been the case. Besides this reality, another phenomenon observed is the creation of specific rules for international commercial arbitration. In other words, when we think of procedural techniques that are traditional in common law, such as discovery, what we have in fact is a technical
There is a clear demand for a pragmatic, and in certain ways, even calculating, analysis of producing evidence. The
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homonym, more suited to international commercial law. Thus, the actions of civil law lawyers in common law generates a new and different reality for operators in both systems. Arbitration therefore has the power to to mix interesting characteristics of different legal families, aiming to enhance its efficiency and dynamic as a method of dispute resolution. 3. Specific Aspects Due Legal Process The interaction between systems is merely a general part of the problem. Specific questions arise, demanding the attention of those who act in international arbitration. The first of these points is the use of new technologies. Without a doubt, using new technologies is an important aspect and represents a powerful instrument for the development of international commercial arbitration. Technology reduces distances and allows for more efficiency in this method of dispute resolution.
2
emotions, arbitrators must know the reality that is placed before them, using more familiar rules trying to increase the degree of the Parties reliability in the process. These two examples show that arbitrators will need skills and knowledge to conciliate different perspectives of the world. As was seen, arbitrators must be able to mitigate against cultural differences and ensure an interpretation of due legal process, between the parties, ensuring legal security and efficacy in decisions. 4. ICA The ICA has an important role to play when trying to understand the taking of evidence and its trends in international commercial arbitration. The lack of information regarding arbitration awards makes the work accomplished by the ICA an essential reference for students and professionals. We would like to mention two interesting guidelines related to the proceeding of taking evidence in international commercial arbitration. The first of these cases dates from 1990, 1998 to be
On the other hand, the use of systems such as Skype to perform hearings can generate doubts and risks of data protection, creating problems regarding confidentiality in arbitration processes.
more precise, regarding a commission agreement involving two companies, African and French. It was registered as Case No. 9333/1998.3 In this case, the importance of burden of proof and
The second point is the performance of the arbitrator with regard to the arbitration process permeated by different legal traditions. The indication of experts, for instance, which is very common in international commercial arbitration, can be a very divergent issue. Who has this duty? The arbitrator or the parties? In the civil law tradition, the arbitrators usually indicate the experts since they are reliable professionals. In common law, this indication, in general, comes from the parties and it is up to the arbitrators to appoint a third, neutral choice who will be responsible for technical analyses of the matter that the Parties have referred to the arbitrator. On the other hand, how will the production of oral evidence be approached? Will a Cross Examination or a Direct Examination be used? The arbitrator has the dilemma of ensuring due legal process while maintaining economy of time and money during the managed processes. Arbitrators must analyze the parties and lawyers characteristics involved in the arbitration process. Therefore, they must be concerned with using arbitration flexibility as an advantage, and with the parties being able to elicit the maximum in the shortest time possible. The greater the will of arbitrators granting autonomy to the parties, the simpler and more economical will be the production of evidence . As it is a procedure that involves
limits that the arbitrators had to analyze was discussed. It was recognized that arbitrators had powers to define only indications, from the perspective of one of the Parties, that could be used as basis for a ruling, and up to what point the arbitrator could or should investigate, especially in a corruption situation. The case is important, therefore, given its central idea on burden of proof. It refers to an analysis designated to arbitrators which can define the proper means for forming their convictions, following the analysis of controversial facts. The discussion can take a long time, especially when there is discussion on which party lays the burden of proof in the arbitration process. However, when it comes to international commercial arbitration, a context in which there is a gradual search for an improvement of the acts and conduction of arbitration process, the burden of proof assessed by the arbitrator becomes an important aid to analyzing and judging the case. The second case refers to the development of seismic machinery to explore petroleum blocs involving an African State, a company of Hong Kong and a Chinese company, registered as Case No. 10982/2001.4 In this situation, the falseness of a document that reveal the parties intentions is subject of discussion. The parties good faith and loyalty were tested as a necessary type of behavior. The taking of evidence should be conducted by arbitrators in light of the beginning of the due legal process. The parties,
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on the other hand, should act with loyalty and good faith in order to perform the arbitrators procedure, which can only occur with the cooperation of the States legal system. 5. Brazilian Reality
As can be seen, also in the context of national or international arbitration in Brazil, the solution provided is similar to the solution adopted in international commercial arbitration 6. Conclusion
In Brazilian law, the arbitration law, does not indicate trends that can be observed. Nevertheless, the feasibility of the arbitrators decisions is ensured by the Judiciary, under Article 22, 2 and 4, of the Arbitration Law, in a clear regime of cooperation. On the other hand, the control of the due legal arbitration process can be accomplished a posteriori by the Judiciary upon a request filed by the party deemed damaged. The latter will be able to handle the annulment of the arbitral award action, based on Articles 32 and 33 of the Arbitration Law. From the analysis of two annulment actions handled in Brazil, it was seen that two relative points of the expert proof were very important. The first of these cases refers to the need for specialization of the expert in the subject for which he was summoned to give his judgment. In other words, an accounting expert cannot
5
Simplicity seems to be a relevant principle when we deal with evidence production in international arbitration. On the other hand, the definition of acceptable rules is urgently required. Knowledge and preparation avoid surprises and, consequently, complaints. Due legal process, regardless of the system involved, should be applied to any analysis that arbitrators perform regarding the taking of evidence in the arbitration process. In the absence of strict rules and the validity of a dynamic system, this is the only way to ensure justice in decisions, effectiveness of sentences, and arbitrary processes. In this regard, whenever necessary, cooperation between arbitrators and robed judges will be essential to ensure a quiet and effective opportunity of evidence production in arbitrary processes. Having said this, the final perspective is optimistic. It seems to be a universal perspective of reasonability over Probation Instruction in international commercial arbitration.
judge an economic matter, and vice-versa. On the other hand, friendship between an expert and one of the companies directors who is part of the arbitration process justifies the suspension on feasibility grounds of the arbitral award entered.6
Luis Fernando Guerrero
1. RENE DAVID, Les Grands Systmes du Droit Contemporains, HERMINIO A. CARVALHO (trad. Fr.), Os Grandes Sistemas do Direito Contemporneo, So Paulo, Martins Fontes, 1998 p. 335. 2. JEAN-JACQUES ARNALDEZ, YVES DERAINS e DOMINICQUE HARSCER, Collection of ICC Arbitral Awards, The Hague Wolters Kluwer, 2009, pp. 575-587. 3. JEAN-JACQUES ARNALDEZ, YVES DERAINS e DOMINICQUE HARSCER, Collection of ICC Arbitral Awards, The Hague Wolters Kluwer, 2009, pp. 677-688. 4. TJSP - 17a So Paulos Civil State Court Award, case n. 583.00.2005.005.059-7. 5. TJSP Interim Relief Appeal n. 0134527-69.2012.8.26-0000. 6. TJSP Interim Relief Appeal n. 0134527-69.2012.8.26-0000.
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STATE COURTS ASSISTANCE IN TAKING EVIDENCE UNDER PORTUGUESE ARBITRATION LAW

By Pedro Sousa Uva
The present article is based on the authors presentation at the ICC YAF & YAR Conference Arbitral Tribunal and State Courts Partners or Competitors? which took place on 16 May 2013 at the Portuguese Chamber of Commerce and Industry, Lisbon. I. Introduction When submitting evidence, a party may be faced with documents or witnesses that are unavailable for numerous reasons, notably when documents related to the case are no longer obtainable or simply because a witness refuses to testify. It may become challenging for the strategy of a party in arbitration when the counter-party or third parties to the arbitration proceedings refuse to cooperate in the taking of evidence. It is challenging because, unlike State Courts, Arbitral Tribunals lack the coercive powers to enforce such requests for taking evidence. Arbitral Tribunals obviously have the authority to conduct the arbitration, give orders and render final awards, but they do not have the power to enforce such decisions. They may even draw adverse inferences against a party who refuses to cooperate, but Counsels are aware that adverse inferences are not enough to win a case as they merely represent indirect evidence that is subject to the arbitrators assessment. The challenge becomes even greater with regard to third parties to the arbitration because 2 - The parties may, until the acceptance by the first Article 30.2 of the PLVA reads as follows: One of the advantages of arbitration lies in the freedom of the parties to choose the adequate procedure rules to govern their arbitration. The principle of a partys procedural autonomy is acknowledged on an international basis, notably under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NYC) in Article V(1)(d),1 and on a national basis, in most modern arbitration laws based on or inspired by the UNCITRAL Model Law,2 the latter being the case of the Portuguese Law on Voluntary Arbitration (PLVA): II. Party autonomy in the procedure applicable to arbitration This means that in such cases a party will need the assistance of a State Court to compel the counter-party or a third party to produce a document or a witness. Court assistance of this sort is, of course, available only when provided for by national law. This is the case of the Portuguese Arbitration Law, as we shall see later. Arbitral Tribunals have absolutely no control over entities that are not bound by the arbitration agreement.
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arbitrator, agree on the procedure to be followed by the Arbitral Tribunal in the conduct of the proceedings, respecting the fundamental principles referred to in the preceding paragraph of this article and the mandatory provisions of this Law.
2 - The preceding paragraph is applicable to the requests to take evidence addressed to a Portuguese State Court, in case of arbitrations seated abroad. To address this subject from a more practical perspective
When choosing the procedure to follow, the parties will also be choosing the set of rules on evidence, either in a particular law, the rules drafted by the parties counsels or those contained in the regulations of an arbitral institution. When choosing Portugal as the seat of
3
we can ask five main questions: (i) Who may request the taking of evidence?; (ii) From whom may it be requested?; (iii) What exactly may be requested?; (iv) Where is the evidence produced?; (v) What if the request comes from parties in an arbitration seated outside Portugal? (i) Who may request the taking of evidence?
arbitration, one needs to be aware of rules on evidence that apply to arbitration governed by Portuguese Law and those that do not. In Portugal, it is commonly understood that the substantive rules on evidence set out in the Civil Code,4 notably those which deal with matters such as the burden of proof, the legal means of evidence and their weight, apply to arbitration proceedings governed under Portuguese Law. This could not be otherwise for the security of parties when performing legal transactions.
5
Portuguese Arbitration Law has followed a different perspective from the one contained in the Model Law. The Portuguese legislator understands that the requests for obtaining evidence must come from the parties themselves and not from the Arbitral Tribunals, because after all, arbitration is a procedure of the parties. It has a contractual nature, and therefore it should be the parties that decide what they need or do not need to prove their case. Despite such party autonomy, the Portuguese legislator
However, Arbitral Tribunals have the power to determine the admissibility, relevance and weight of any evidence, as per article 30.4 of the PLVA, powers which Arbitrators should, however, exercise with caution in order to avoid refusing evidence which is essential for the process of getting to the truth. On the other hand, it is commonly understood that the rules on evidence set forth in the Civil Procedure Code regulating the taking of evidence do not apply to arbitration, unless the parties expressly agreed that they should.
6
also understands that the Arbitral Tribunal should approve a partys request for taking evidence. In fact, if Arbitral Tribunals did not control the parties requests, this could lead to abuses, notably attempts from a respondent in arbitral proceedings to block an arbitration by resorting to delay tactics (for instance, requesting rogatory letters for obtaining statements from witnesses living abroad) or any other ways that would represent excessive court assistance. After all, arbitrators have the duty to conduct the proceedings in an effective way. Now, because there is no rule without exceptions, Arbitral Tribunals may request the ex officio production of evidence to Portuguese Courts in the following cases: Arbitration seated in foreign countries;
Naturally, the choice of procedure by the parties has its limits. Article 30 of the PLVA sets out those limits when establishing that party autonomy is subject to the mandatory rules of the applicable national law, which under most developed arbitration statutes are limited in scope (due process). Every jurisdiction has its own standard of due process. In modern European arbitration laws such as the Portuguese one they usually do not differ that much in substance. The fundamental principles under the PLVA are three: - Respondent is summoned to present his defense (Article 30.1 a)); - Parties are treated with equality (Article 30.1 b)) ; - Each party is given an opportunity to present his case (Article 30.1 c))7 III. State Court Assistance in taking evidence When we talk about State Court assistance in taking evidence under Portuguese Law we are basically dealing with article 38 of the PLVA , which reads as follows: Article 38 State court assistance in taking evidence
The applicable (foreign) arbitration law allows it; The competent Portuguese Court allows it (Article 29.2 of the PLVA). This means that contrary to the Model Law and many other laws based on it, Portuguese Courts may very well assist an arbitration taking place, for instance, in Spain, provided that Spanish arbitration Law allows it and the Portuguese court accepts the concrete production of evidence. (In international arbitrations, Portuguese State Courts may depart from Portuguese procedural rules, as per Article 29.2 of the PLVA.) (ii) From whom may evidence be requested? According to Article 59.4 of the PLVA, the request from a
1 - When the evidence to be taken depends on the will of one of the parties or of third parties and these refuse to cooperate, a party may, with the approval of the Arbitral Tribunal, request from the competent State Court that the evidence be taken before it, the results thereof being forwarded to the Arbitral Tribunal.
party in a pending arbitral proceeding must be made before the Court of First Instance (at the seat of arbitration) and not the Court of Appeal. The Court of Appeal is actually the competent court
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under the PLVA for most of the matters where court assistance is required, among others: the refusal or removal of arbitrators; the appeal against the arbitral award; the challenge of the arbitral award; the recognition of the arbitral award handed down in an arbitration located outside Portugal.
personal depositions from the parties (themselves), while under the Civil Procedure Code, witnesses are always third parties, and one may only request to hear the counter-party (depoimento de parte), not the party itself. (iv) Where is the evidence produced?
Thus, the competent Court of First Instance will deal with only a few matters, one of which is the taking of evidence. (iii) What assistance may be required? The legal forms of evidence that a party may request are usually documentary evidence and testimony, but any other legal form of evidence is possible, provided that it is allowed in the Portuguese Civil Code (e.g. inspection) or in any other applicable law. Therefore, a party may request and the State Court may order, for instance, the disclosure of documents; the Court may compel witnesses to appear or order witness statements; it may order the
8
Certain arbitration laws establish that evidence should be produced at the Arbitral Tribunal. The Portuguese legislator took the opposite view: evidence must be produced at the competent State Court, not in the Arbitral Tribunal, and the results should then be sent to the Arbitral Tribunal. This means that the arbitrators cannot participate in State Court hearings, although nothing seems to forbid them from being present at such hearings. (v) What if the request comes from parties in an arbitration seated outside Portugal? Regarding international State Court assistance in taking evidence, Portuguese Arbitration Law is a step ahead of the UNCITRAL Model Law and other arbitration laws as it admits requests for taking evidence from foreign Arbitral Tribunals.11 As mentioned above, the Portuguese State Court must comply with both: (i) foreign applicable procedural rules; and (ii) applicable procedural rules for the obtaining of evidence in a Portuguese Court. IV . Final remark. Parties in arbitration need the assistance of State Courts in obtaining unavailable evidence. This means that State Courts should be considered as a real partner to Arbitral Tribunals, not their competitors. This partnership is as good as the arbitration law that regulates court assistance in collecting evidence; the Portuguese Arbitration Law did successfully provide such regulation. Practice will show whether the mechanism and solutions provided in the PLVA serve the purpose of collaboration between Arbitral Tribunals and State Courts in a matter as crucial as the taking of evidence in arbitration.
production of other legal forms of evidence, notably inspection evidence or expert evidence; it may secure the preservation of evidence; and it may anticipate the taking of evidence.
9 10
It is worth mentioning what the rules of the Commercial Arbitration Centre of the Portuguese Chamber of Commerce and Industry (ACL Rules) say about legal means of evidence. Article 30 of the ACL Rules allows any evidence legally admissible or agreed between the parties to be produced before the Arbitral Tribunal, as follows: Article 30 1. Any evidence legally admissible or agreed between the parties may be produced before the Arbitral Tribunal. 2. On its own initiative or at the request or one or both of the parties, the tribunal may: a) Hear personal depositions from the parties; b) Hear third parties; c) Arrange for the delivery of documents in the possession of the parties or third parties; d) Appoint one or more experts, define their terms of reference and receive their depositions or reports; e) Conduct first hand examinations or inspections. A major difference between this and the rules of the Portuguese Civil Procedure Code is that in arbitrations under the Commercial Arbitration Centre of ACL it is possible to hear
Pedro Sousa Uva
1. Article V(1)(d) allows non-recognition of an arbitral award if: [ 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. 2. Article 19.1. 3. Although arbitral institutions do not usually regulate the procedure for the taking of evidence. 4. Articles 341 to 396 deal with document production, expert evidence, inspection evidence, and the testimony of third parties. 5. Barrocas, Manuel Pereira in A Prova no Processo Arbitral em Direito Portugus, page 10, available at http://arbitragem.pt/estudos/a-prova-no-processo-arbitralem-direito-portugues--manuel-pereira-barrocas.pdf 6. As Manuel Pereira Barrocas explains, this does not mean that arbitrators should ignore the typical procedural concepts, litispendence, exception, counterclaim, or other solutions for taking of evidence provided for in the CPC (notably the request to anticipate the taking of evidence) - they should not. What arbitrators should ignore in arbitration is the relevant regime set out in the CPC, which does not apply to arbitration (vide study identified in note 5, page 7.) 7. These principles are basically the ones previewed in the Model Law. 8. Under Portuguese Law, witnesses are always third parties as Portuguese law does not admit the testimony of the party itself, unless requested by the counterparty (depoimento de parte). 9. Article 29 of the PLVA sets forth that State Courts have the power to order interim measures in pending arbitral proceedings or in those that have not yet commenced. Arbitral tribunals can also do this, as expressly stated in Article 20.2d) of the PLVA 10. Produo antecipada de prova Article 520 of the CPC. 11. Vide articles 38.2 and 29.2 of the PLVA
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BRAZILIAN ASSOCIATION OF ARBITRATION STUDENTS

By Associao Brasileira de Estudantes de Arbitragem
In the context of the consistent growing support by Brazilian courts and the huge expansion of its use as a dispute settlement mechanism, it is also natural the growth of the academic community dedicated to the study of arbitration. Such study has found strong catalysts on the Willem C. Vis International Commercial Arbitration Moot and recently on the Petrnio Muniz Brazilian Arbitration Moot. It was precisely under this context that in August 2011, the Brazilian Association of Students of Arbitration ABEArb was created, in order to focus and meet the demands of the growing number of Brazilian arbitration students. ABEArbs projects are only possible through the hard Among its many projects, ABEArb organizes events, coordinates collective works, such as listing Brazilian and international institutions, young associations, case law, among others, promotes network among Brazilian students and offers opportunities for work of its directors, supporters and volunteering members, whose main focus is to promote arbitration among law students from all over Brazil and to provide opportunities to those students already engaged on its study. From an international perspective, ABEArb has been a continuing contributor of the newyorkconvention1958. org website, jointly organized by UNCITRAL, Columbia Law School and Shearman & Sterling, submitting translations of decisions from the Brazilian Superior Court of Justice on the recognition and enforcement of international arbitral awards. Also, ABEArb has the honor to employ all efforts contributing to the YAR Young Arbitration Review editions, in a partnership that is already celebrating its second year. students to present and publish the result of their studies.
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2013 Executive Board

PRESIDENT Jorge Vargas Neto is an associate of Pinheiro Neto Advogados, part of the Litigation and Arbitration Group and the Infrastructure and Construction Law Group. He holds a L.L.B from the Law School of the Pontifical Catholic University and a Masters degree in Banking, Corporate, Finance, and Securities Law from INSPER. Jorge has specialization in International Arbitration by the International Academy for Arbitration Law, being awarded the Laureate of the Academy Prize:3rd Place (2012), and in Mergers & Acquisitions and Corporate Law by the Georgetown University Law Center (2009). He is also ambassador of the International Academy for Arbitration Law in Brazil and member of the editorial board of Group of Studies in Arbitration GEArb. Jorge is a former member of UFMGs study groups on international law and on international trade law and former participant of the 18th Willem C. Vis International Commercial Arbitration Moot, 4th Annual Foreign Direct Investment Moot and 2nd Petrnio Muniz Brazilian Arbitration Moot Competition.
VICE-PRESIDENT Rodrigo Moreira received his law degree from the Pontifical Catholic University of Rio de Janeiro (PUC-Rio) in July 2010. He is a partner at Laudelino da Costa Mendes Neto Advocacia at the complex litigation and contracts areas. He was one of the founders of the Research Group on International Arbitration and International Commercial Contracts at PUC-Rio, which represents the University on the Willem C. Vis International Commercial Arbitration Moot. He participated as a mootie on the 16th and 17th editions of the Vis Moot and as assistant-coach on the 18th and 19th editions. He was part of the local committee for the organization of the 3rd edition of the Petrnio Muniz Brazilian Arbitration Moot Competition and is the assistant coach of the Fundao Getlio Vargas team for the 4th edition. He is also in the last semester of the LL.M on Corporate at the Fundao Getlio Vargas.
SECRETARY Aline Henriques Dias received her law degree from Mackenzie Presbiterian Univesity, So Paulo, Brazil and is specialized in Arbitration by the Law School of Fundao Getlio Vargas DIREITO GV . She is an associate in the litigation team at Mattos Muriel Kestener Advogados and a founding member of the Arbitration Study Group of the Mackenzie Presbiterian Univesity GEAMACK. As member of this Study Group, Aline participated as a speaker in the two firsts editions of the Petrnio Muniz Brazilian Arbitration Moot Competition and, more recently, she also participated as coach in the third edition of this same Brazilian competition and in the 19th Willem C. Vis International Commercial Arbitration Moot. Aline is member of Young International Arbitration Group of the London Court of International Arbitration.
TREASURER Daniel M. C. Barbosa received his law degree from Universidade Federal de Minas Gerais (UFMG), Belo Horizonte, Brazil. He interned in different law firms in Belo Horizonte, having mainly focused on contract law and arbitration, and was also an intern at the Secretariat of the International Court of Arbitration of the International Chamber of Commerce in Paris. During his studies, he was a member of UFMGs study groups on international law and on international trade law and represented the university in the 15th and 16th Willem C. Vis International Commercial Arbitration Moot, in the 51st Philip C. Jessup International Law Moot Court Competition, and in the 4th Annual Foreign Direct Investment Moot, in which he received the Thomas Wlde Award for Best Oralist. Daniel is also one of the founders and organizers of the Petrnio Muniz Brazilian Arbitration Moot Competition.
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ACADEMIC OFFICER Agatha Brando de Oliveira is a last year law student at the Federal University of Espirito Santo (UFES). She is specialized in International Law by the The Hague Academy of International Law, develops four Research Initiation Scholarship Projects and is a researcher for UNESCO and the International Law Center (CEDIN). Agatha is also assistant Director at Harvard National Model United Nations Latin America (HNMUN-LA 2013), coordinator of the Academic Group in Private International Law and Arbitrations Extension Research group at UFES Center of specialized studies in International Arbitration and Civil Procedure NEAPI. She is member at New York State Bar Association NYSBA, International Section, and is part of the Organization Committee created for the Petrnio Muniz Brazilian Arbitration Moot Competition.
EVENTS OFFICER Ana Carolina DallAgnol holds a degree in International Relations from UniCuritiba and is a law student at the same institution (graduation expected on December 2013). She was an intern at the law firm Lee Taube Gabardo Sociedade de Advogados for two and a half years. During her study at UniCuritiba, she was a member of the Study Group on Arbitration and International Contracts for five years and has participated as a speaker (16th and 17th editions) and as a coach (18th and 19th editions) on the Willem C. Vis International Commercial Arbitration Moot. Ana has also participated as a speaker on the IV and V editions of the Foreign Direct Investment Moot.
INTERNATIONAL OFFICER Daniel Tavela Luis has law degree by the So Paulo Law School of Fundacao Getlio Vargas DIREITO GV . He holds a Masters degree in International Law by the University of So Paulo. Daniel is partner at Manuel Lus Advogados Associados, President of the Direito GV Alumni Association and specialist in International Arbitration by the International Academy for Arbitration Law. Daniel is member of the Brazilian Arbitration Committee and ICC Young Arbitrators Forum and of the Young-OGEMID. He is coach of the So Paulo Law School of Fundaco Getlio Vargas DIREITO GV for the Willem C. Vis International Commercial Arbitration Moot and Petrnio Muniz Brazilian Arbitration Moot Competition. He is also a founding member and coordinator of the Study Group in Arbitration, Investments and International Contracts of the DIREITO GV GEArbICIDGV .
OFFICER Bernard Potsch Moura is a bachelor and a LLM (Master of Law) candidate at University of the State of Rio de Janeiros (UERJ) Law School. He is currently an associate at Batista Martins Advogados, law firm specialized in arbitration. Bernard is member of the Brazilian Arbitration Committee and also is coach of the University of the State of Rio de Janeiros team for the Willem C. Vis International Commercial Arbitration Moot and for the Petrnio Muniz Brazilian Arbitration Moot Competition.
OFFICER Isabelle Ferrarini Bueno is currently in the last year of law school at Federal University of Rio Grande do Sul (UFRGS), working as an intern in the corporate team at Souto, Correa, Cesa, Lummertz & Amaral. She is a member of the academic group Arbitration and International Contracts coordinated by Professor Vera Fradera, at Federal University of Rio Grande do Sul. Isabelle is member of the teams that represented the Federal University of Rio Grande do Sul in the 18th, 19th and 20th editions of Willem C. Vis International Commercial Arbitration Moot, and member of the current team representing Souto, Correa, Cesa, Lummertz & Amaral at the Petrnio Muniz Brazilian Arbitration Moot Competition.
OFFICER Laura Gouva de Frana Pereira is currently in the last year of law school at University of Sao Paulo (USP). She works as an intern in the arbitration team at L. O. Baptista Schmidt, Valois, Miranda, Ferreira & Agel and is specialized in International Arbitration by the International Academy for Arbitration Law. Laura completed a oneyear academic exchange at Institut dtudes Politiques de Paris (Sciences Po Paris), being placed on the Deans List of International Students (Mention Summa Cum Laude). She is coordinator of the Academic Group Arbitration and International Contracts (ABCINT) of USPs Faculty of Law and is also member of the team that represented the University of Sao Paulo in the 20th edition of the Willem C. Vis International Commercial Arbitration Moot, and coach in the 21st edition of the same competition.
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[BIOGRAPHIES]
International Dispute Resolution at Queen Mary University of London (2008/2009), where he focused on International Commercial Arbitration, International Trade and Investment Dispute Settlement and Alternative Dispute Resolution.
PEDRO SOUSA UVA

Pedro Sousa Uva (born 1979) is an Associate Lawyer at Miranda Correia Amendoeira & Associados. His practice focuses on litigation and arbitration. Pedro is a Graduate of the Lisbon Law School of the Portuguese Catholic University (2003). Pedro was admitted at the Portuguese Bar in 2006. Before joining the Firm in May, 2013, Pedro worked for almost ten years as an Associate at Abreu Advogados law firm, where he focused his practice in the areas of litigation and arbitration. Between 2009 and 2010, he participated in the International Arbitration Groups Intern Program, in London, at Wilmer Cutler Pickering Hale and Dorr LLP . Pedro is a former scholarship student of the Katolieke Universiteit Leuven, Belgium, where he pursued studies in International Arbitration (2001/2002). He completed an LL.M in Comparative and
He is a member of the Portuguese Bar Association, a member of the Alumni & Friends of the School of International Arbitration (AFSIA), University of London. He is a co-founder of AFSIA Portugal (created in June, 30 2010). Pedro has published several articles notably A comparative reflection on challenge of Arbitral awards through the lens of the arbitrators duty of impartiality and independence, published in The American Review of International Arbitration, Volume 20, No. 4, in January 2011 (an updated version of the Authors LLM Dissertation); Co-Author of the Portuguese Chapter of the International Comparative Legal Guide to International Arbitration 2010, 2011, 2012 and 2013 - Global Legal Group (GLG) and Settlement in International Arbitration: the CEDR Rules, March 19 2010, Executive View, Litigation and Dispute Resolution, Digital Guide 2010, http://www.executiveview.com. Pedro will Co-Chair the Sub40 Committee of the Portuguese Association of Arbitration (APA) from September, 1 2013 onwards. He is co-founder of YAR - Young Arbitration Review.
International Commercial Arbitration, International Commercial Litigation, Alternative Dispute Resolution and International Trade and Investment Dispute Settlement (subject grouping: Commercial and Corporate Law).
GONALO MALHEIRO
Gonalo Malheiro is Junior Partner at PBBR Law Firm and co-head of its Litigation Arbitration Department, currently acting as counsel in both ad hoc and institutional arbitration proceedings (domestic and international arbitration). He is a graduate from the Catholic University Law School of Lisbon. He has an LL.M from Queen Mary - University of London, School of Law, where he focused on the following subjects:
Gonalo is a member of the Portuguese Bar Association, the Catholic University Alumni Association, the Chartered Institute of Arbitrators and the Alumni & Friends of the School of International Arbitration (AFSIA), University of London. He is a co-founder of AFSIA Portugal. Gonalo was Chairman of the Young Member Group of the Chartered Institute of Arbitrators. Besides publishing in English and Portuguese on different arbitration subjects, Gonalo is also CoFounder of YAR - Young Arbitration Review.
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JOS MIGUEL JDICE

Jos Miguel Jdice is the Founding Partner and Head of Arbitration (PLMJ, Lisbon), a Visiting Associate Professor of Universidade Nova (Lisbon), international arbitrator, member of ICC International Court of Arbitration, of the ICSID Roster of Arbitrators, Board of Directors of Club Espaol de Arbitraje and Associao Portuguesa de Arbitragem. He has more than 35 years of experience in litigation and arbitration, covering almost all the fields of law (Public and Private Law, International Contracts and Investments, Corporate Law, Environment, Finance, Real Estate, Construction, Health, Energy, Concession contracts, Procurement, PPPs, Constitutional) . As Counsel in Arbitration, Jos Miguel Jdice has intervened in more than 50 ad hoc, UNCITRAL, ICC, OHADA, ICSID and NAI, national and international arbitrations, since 1979 (telecommunications, construction and zoning,
finance and banking, international contracts, agency and distributorship, investment disputes, oil, hotel and tourism, labor, shareholders agreements and corporate, industrial law, M&A). Jos Miguel Jdice has sat as Arbitrator in more than 40 ad hoc/UNCITRAL and ICC, national and international arbitrations, as co-arbitrator, sole-arbitrator (1) and Chairman (24), submitted to Portuguese, Brazilian, Angolan, Spanish, BITs and International Law (telecommunications, construction, banking and finance, international contracts, agency and distributorship, mining, tourism, ppps, investment disputes, pharmaceutical, oil, hotel management, BIT disputes, etc). He is currently Chairman of one UNCITRAL investment treaty arbitration (Rurelec vs Bolivia). As member of the Board of Directors of Portuguese Arbitration Association, he has been one of the authors of the new Portuguese Arbitration Law. Amongst his many publications, Jos Miguel Jdice was author of Portuguese Arbitration Law A commentary (2012). As Professor, he teaches now Arbitration and Dispute Resolution, Energy and Politics and Business Law
ROBERT ROTHKOPF
Robert is a solicitor advocate in Herbert Smith Freehills New York office specialising in international arbitration, with a focus on the energy sector. Robert was previously based in the international arbitration team in Moscow and in London where he was seconded twice to BPs dispute resolution team. Whilst at BP, Robert advised a number of global BP entities on contentious matters in multiple jurisdictions and forums. Roberts recent experience includes advising on an ICC arbitration relating to an off-shore West African field, and an ICDR arbitration relating to physical coal trading.
DUARTE GORJO HENRIQUES

Duarte G. Henriques is a Lawyer, Arbitrator and Legal consultant, with experience on Litigation and Arbitration, IT Law, IP Law, Copyright Law, Corporate Law, Commercial Law and Civil Law. Graduated at Faculty of Law of University of Lisbon (1988). Duarte G. Henriques is Arbitrator at Arbitrare Arbitration Centre, Lisbon, Portugal (www. arbitrare.pt). Duarte G. Henriques is a Member of Portuguese Bar Association since 1990; Member of APA Portuguese Arbitration Association; Member of the London Court of International Association European Users Council; Member of the International Bar Association Arbitration Committee.
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HENRY CLARKE
Henry Clarke is an Associate at Clyde and Co, Dubai and Riyadh. Henry is a Fellow of the Chartered Institute of Arbitrators and an English solicitor advocate (civil and criminal) Henry Clarke concluded a LLM with Distinction (commercial, construction and investment law and arbitration), at Queen Mary University of London Henry Clarke is member of the Young International Arbitration Group; ICC Young Arbitrator Forum; Law Society; Solicitors Association of Higher Court Advocates. Before, Henry Clarke worked for the British Army February 2005 - September 2011 as legal officer and Major; worked at Clarke Willmott, as corporate solicitor ( April 2004 January 2005) and was a Trainee solicitor at Clifford Chance (February 2002- March 2004). As notable achievements, it should be mentioned the following activities: In a team researching, reviewing and editing next edition of International Comparative and Commercial Arbitration (Krll, Lew and Mistelis). Advising on grounds and conduct of a claim in an arbitration regarding a security contract for a higher education institute in Saudi Arabia Advising on enforcement of judgments and arbitral awards of various nationalities within Saudi Arabia Advising on the grounds for a sub-contractors claims for payment on a Saudi international airport construction project An audit of the compliance of Tunisias national arbitration law with the revised UNCITRAL Model Law on International Arbitration and contemporary best practice in international commercial arbitration Contributing to the drafting of the memorial, witness statements and collating of evidential submissions for an ICC arbitration with a German seat relating to an electricity grid project in the Horn of Africa under World Bank funded procurement and project terms.
CHIARA VALENTINA CATTI

Chiara Catti is an Italian attorney with experience in Dispute Resolution and Commercial Law Practice. She has worked in the commercial litigation department of Baker & McKenzie. In 2010 she joined the pharmaceutical company of J&J as legal counsel, supporting the sale and regulatory department in drafting commercial contracts and in complying with the Holding procedures. Before she was Business Development Coordinator for Clearly Gottlieb Steen & Hamilton. She is a mediator according to the Italian Legislative Decree and with the New York Peace Institute, serving at the Brooklyn and Manhattan Civil Courts. Chiara graduated with honors from the University of Milan in 2001 and she was an Erasmus visiting student at Universit Ren Descartes, Paris V . In 2012 she received an LL.M. in Dispute Resolution from Cardozo School of Law, New York. Ms Catti is fluent in English and French. She has a fair knowledge of Spanish.
LUIS FERNANDO GUERRERO

Luis Guerrero is Master of Laws and Phd Candidate at Universidade de So Paulo and a Mediation Specialist at Northwestern University. Luis is a Visiting Scholar at Columbia Law School of Columbia University. Mr. Guerrero is a Member of CBar, ICCs YAF, LCIAs YAG. He is also a Pannelist of Painel II do Comit de Controvrsias sobre Registro de Domnio do Centro de Arbitragem e Mediao da Cmara de Comrcio Brasil-Canad (CCRD-CAM/CCBC). Currently, Luis is a Partner at Dinamarco, Rossi, Beraldo e Bedaque Advocacia.
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institutions. To add up, he is a co-founder and former Secretary of an arbitration institution, CNICA and inducted as member of ICCA.
VEERARAGHAVAN INBAVIJAYAN
V . Inbavijayan was educated at Dr.Ambedkar Govt. Law College, University of Madras. After completing his legal education, he took up litigation practice at High Court of Madras (1997). His enthusiasm towards Arbitration made him to pursue whole time arbitration practice since 2001. So far he has presided as sole arbitrator and represented as counsel in over 250 domestic cases, several Documentsonly small claims finance arbitrations and 10 international arbitrations. His areas of practice includes international commercial arbitration, maritime arbitration, international trade & contracts, intellectual property rights, construction disputes, finance disputes, securities arbitration, joint ventures, banking law, documentary credits (L/Cs), ADR, sale of goods, domain name disputes and investment disputes. He has been accredited as an arbitrator in HKIAC, CIETAC, RCAKL, CRCICA, ICADR, ICA, CIDRA and various other regional and national arbitration
Recently he has been approved as Tutor of Chartered Institute of Arbitrators, UK and has been listed in the 2008 edition of International Whos Who of Commercial Arbitrators. To add up Chambers Asia Directory 2010 refers as Veeraraghavan Inbavijayan is active in commercial arbitration and described as excellent he handles matters in a highly professional manner and can achieve fast results. and 2011 refers as Veeraraghavan Inbavijayan is a respected figure, who focuses on handling international arbitrations on a wide range of disputes, including those relating to distributorship agreement, construction and satellite right Chambers Asia Directory 2012 refers as Veeraraghavan Inbavijayan earns accolades for his noteworthy knowledge in arbitration. He undertakes both domestic and international arbitration, particularly in international trade and commercial disputes. In addition he is promoting the concept of ADR by way of writing articles and books, providing training courses and gives lecture on Arbitration and ADR in law schools, Universities and conferences worldwide.
KIRTHI JAYAKUMAR
Kirthi is a legal researcher and lawyer. A Peace and Conflict studies enthusiast, Kirthi is a volunteer with the UN. She is presently a Commissioning Editor with e-IR, an online International Relations portal, the Logistics and Constituents Head at The Channel Initiative, working for post-conflict reconstruction in the DR Congo, specifically targeting women. Kirthi works with DeltaWomen, as a writer and with CAAGLOP, as a Managing Editor and writer on African Policy. Recently, Kirthi was part of the UNICEF-UN Women Global Thematic Consultation on Addressing Inequalities through her paper titled The Rule of Law to combat Sexual Violence in a Conflict Environment. Kirthi dabbles with Intelligence and Security Analysis with Open Briefing, as an Associate Researcher, at the Asia-Pacific Desk, and runs an International Law Consultancy and Academic Journal called A38. Kirthi has written ad-hoc features for forums that include TransConflict, WorldPulse and PeaceXPeace and is a member of the TrustLaw Network. Kirthi is a legal researcher and lawyer. Her interest and experience over all lie in Peace and Conflict, Public International Law, Gender issues, International Humanitarian Law, and in terms of a regional focus, in Afghanistan, the Middle East, DR Congo and South-Asia.
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THOMAS GAULTIER
Thomas is a New York qualified attorney and counselor-at-law, currently Of Counsel at AAA Advogados in Lisbon. He is a graduate from the University of Paris X Nanterre Law School. He has an LL.M in Alternative Dispute Resolution of the University of Texas in Austin (2008/2009), during which he focused on International Arbitration and Litigation and Alternative Dispute Resolution, and Mediation, as well as became a certified mediator, and where he participated in the Graduate Portfolio Program in Alternative Dispute Resolution, presenting his research on the theme of Cyber- Arbitration. Thomas co-Authored of the Portuguese Chapter of EU Mediation Law and Practice (published by Oxford University Press in October 2012), the Portuguese Chapter of the International Comparative Legal Guide to International Arbitration 2010 / Portugal Global Legal Group (GLG) (Published in August 2010) and has won the Consulegis Thomas Marx award for 2010 with his paper in the topic of Cross-Border Commercial Mediation. He is the Vice-President and co-founder of the ICFML Instituto de Certificao e formao de Mediadores Lusfonos, a non-profit organization aimed at training and certifying Portuguesespeaking mediators. Thomas teaches mediation and negotiation with the ICFML.
PORFRIO MOREIRA
Porfrio Moreira is a Senior Associate at Cardigos Law Firm, working in the Corporate Group. His practice focuses on corporate, EU law, and employment related matters. Porfirio has wide experience in business reorganization, involving private and state-owned companies as well as in litigation and arbitration, frequently in cross-border disputes. Porfirio studied at College of Europe, LL.M in EU Law, 2012 and at Universit Paris PanthonSorbonne, Postgraduate Studies in EU Law, 2007.
ANDR PEREIRA DA FONSECA

Andr Pereira da Fonseca is a Visiting Attorney at the New York office of Herbert Smith Freehills and an Associate of Abreu Advogados in Lisbon. He has also worked in Abreu Advogados local offices / partnerships in Angola and Mozambique. He is a graduate from the Faculty of Law of the University of Lisbon and has an LL.M in Comparative and International Dispute Resolution from Queen Mary - University of London, School of Law. Andr is a member of the Portuguese Bar Association and a member of the Alumni & Friends of the School of International Arbitration, University of London. Andres practice focuses on national and international dispute resolution, notably representing clients in complex cross border litigations and arbitrations.
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STEVEN P. FINIZIO
Steven P. Finizio is a partner at Wilmer Cutler Pickering Hale and Dorr, LLP. He is a member of the International Arbitration and Securities Litigation and Enforcement Practice Groups. Prior to joining the London office in 2000, Mr. Finizio practiced in the firms Washington, DC office. He joined the firm in 1993. Finizios practice focuses on complex commercial and regulatory disputes, and concentrates primarily on international arbitration. Mr. Finizio also serves as an arbitrator in international commercial arbitrations. Finizio has advised clients on matters arising under the rules of all the major international arbitration institutions, and in disputes sited in both common law and civil law jurisdictions and governed by the laws of jurisdictions in Europe, Asia and the US. Mr. Finizio also frequently advises on the drafting of dispute resolution clauses for commercial agreements. Mr. Finizio is recognized as a leading practitioner in guides such as Chambers, Legal 500, Global Arbitration Reviews Whos Who in International Arbitration and Euromoneys Guide to the Worlds Leading Experts in Commercial Arbitration. Finizio teaches International Commercial Arbitration as an Adjunct Professor at Pepperdine University Law School in London and is on the faculty at the Cologne Academy of Arbitration and for AILAs annual International Treaty Law and Arbitration Programme. He speaks regularly on international arbitration at conferences and seminars, including at events held by the ICC, ICSID, AAA, German Arbitration Institute (DIS), Swedish Arbitration Association, Swiss Arbitration Association (ASA), LCIA India, and the British Institute of International and Comparative Law (BIICL). Finizio is co-author of A Practical Guide to International Commercial Arbitration: Assessment, Planning and Strategy (Sweet & Maxwell 2010; new edition forthcoming) and also of International Commercial Arbitration in The Law of Transnational Business Transactions (West 2004) and is a contributing editor to the International Comparative Legal Guide to International Arbitration (Global Legal Group). Topics of recent articles include the taking of evidence, the Energy Charter Treaty, arbitrator appointment, anti-suit injunctions, arbitrator conflicts, provisional measures in investor-state arbitration, a comparative law discussion of the plain meaning rule of contract interpretation, and expert determination clauses. Finizio is a member of the California and District of Columbia bars and a registered foreign lawyer, Law Society of England and Wales.
JEREMY BOCOCK
Jeremy Bocock participated in the International Arbitration Groups Intern Program, in London, at Wilmer Cutler Pickering Hale and Dorr LLP between April and June 2013; Jeremy previously worked in Paris for the ICC International Court of Arbitration between January and March 2013 and for Freshfields Bruckhaus Deringer from July 2011 to December 2012. Jeremy attended the Paris Bar School between 2011 and 2013 and studied at the Institut des Hautes Etudes Internationales (IHEI) Paris II Panthon-Assas (International law, investment law and arbitration, 2nd diploma, Cum laude) where he prepared the Thesis: Economic necessity in the Argentinean ICSID awards, CMS v. LG&E
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SOFIA MARTINS
Sofia Martins joined Ura Menndez in 2008 when it joined forces with the Portuguese firm Frasto da Silva & Associados, of which she was a founding partner. Before that, she was an associate at Frasto da Silva Mendes Martins & Associados, which she joined in 2004 from Henrique Abecasis, Andresen Guimares & Associados, where she worked from 1996 to 2004. Sofia has also been a legal adviser to the Ministry of Agriculture. She mainly represents clients in civil and commercial litigation and arbitration at all levels of the Portuguese court system and arbitral tribunals in Portugal and abroad. She is also listed in the rosters of prestigious arbitral institutions, participating regularly in colloquiums, seminars and conferences onarbitration matters, frequently as a speaker. Sofia also advises clients on regulatory and supervisory aspects of insurance law, as well as in insurance related disputes. Sofia assists clients in the negotiation of insurance plans and policies, insurance distribution and reinsurance agreements.
MIGUEL OLIVEIRA MARTINS

Miguel de Oliveira Martins is a Trainee Lawyer at Ura Menndez Proena de Carvalho. Miguel is a graduate at the Portuguese Catholic University, School of Law, in Lisbon (2005). Before joining the firm, Miguel was a Trainee Lawyer at NGSL & Associados, Attorneys at Law (2010-2012). He was a DRPA Certified Mediator at the Superior Court of California (2007-2008), a Member and Contributor to the American Bar Association (2007-2008), a Legal Consultant at OECD (2005-2006) and a Junior Deputy to the European Parliament (1999). Miguel also completed an LL.M. - Master of Laws in International Comparative Law at the University of San Diego, School of Law (California, USA) and a post-graduation in International Law at the University of Montpellier, School of Law, France (2005)
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The First Under 40 Portuguese International Arbitration Review
YAR
2011. 2011.YAR YAR--Young YoungArbitration ArbitrationReview Review All Allrights rightsreserved. reserved.

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YOUNG ARBITRATION REVIEW

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SOME LIKE IT HOT...

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Jos Miguel Jdice1 Lisbon, June 2013

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NEIGHBOURS FRIENDLY PACT ON DISPUTE RESOLUTION

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Veeraraghavan Inbavijayan (www.inbavijayan.com) and Kirthi Jayakumar

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in that field to reconsider and, if necessary, amend their laws.

Its international origin,

This diverse and detailed input is reflected in the extensive

travaux prparatoires which may be used by legislators, counsel,

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multilateral or bilateral agreement which has effect in the

The advantages of the Model Law to an adopting jurisdiction are lengthy.

It is a finished text for adoption and

available in six languages

with wide coverage of ICA issues

One national arbitration law based on the

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French law was generally This

supportive of international arbitration prior to 1981.

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The in writing requirements were a significant part

of the 2006 review of the Model Law. illustrative example.