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The Revised UNCITRAL Arbitration Rules (2010)

Introduction
The 15th of August 2010 was the first day to officially use the new UNCITRAL Rules just after the United Nations Commission on International Trade Law had adopted a long-awaited first revision on 25th June 2010 for the rules which were adopted by the United Nations General Assembly on 15th December 1976. Since that date, the UNCITRAL Rules have come to be used in a wide variety of contexts worldwide. However, it was developed principally for ad hoc commercial arbitration but it has had a generous influence on the development of arbitral practice in both ad hoc and institutional arbitration, as well as investment treaty, such as a bilateral/multilateral investment treaty, Where a treaty allows investors to pursue arbitration under the UNCITRAL Arbitration Rules between investors and States which proceed according to that treaty. The universality and neutrality of the UNCITRAL Rules, furthermore, its logical and coherent framework with its major feature which is procedural flexibility that has been one of the hallmarks of the 1976 Rules; embodies the best practice and gives an indication that these rules were tailored towards the best method for dispute resolution. However, as a matter of fact a few shortcomings had been exposed through practice to 34 years of a broadly usage of the 1976 UNCITRAL Rules all over the world by parties with different legal backgrounds, different legal systems and economic regimes in the development of their economic relationships. In order to maintain the reputation of UNCITRAL Rules and to overcome these shortcomings it was inevitable that an essential review should be undertaken by a professional working group after three decades as decided by the UNCITRAL Commission on 2006 to cope with the current arbitral practice, for example, the use of modern technology. As the Rules revision stated target was firstly, to enhance the efficiency of the procedure, to address the multi-party arbitration needs and to adapt the investor-state arbitration Rules to its appropriate practice. The impetus for revising the Rules by the working group was first developed at the 31st session of the UNCITRAL meeting in 1998. However, the first step was taken in July 2006 in the 39th session and the revision was achieved in June 2010. The revision process of such rules was a very challenging work and it was concerned to address the contemporary needs of parties, solving practice problems and codifying best practice through three categories of adjustment, by the institutionalism, clarifying the ambiguities and modernizing1 the textual provisions restrained to the words spirit and drafting style maintaining
1 Report of the Working Group, 49th session, 15-19 September 2009 (A/CN.9/665)

on the same procedural flexibility of the Rules and preserves the same structure. Thus, the revised rules are divided into four sections introductory Rules, Composition of the Arbitral Tribunal, Arbitral Proceedings and the Award.

Section I: Introductory Rules

This section has been subject to the modernization process to cope with the contemporary needs and to recover any shortcomings revealed in the past 34 years. Furthermore, subject to improvement of the procedural imbalance between the claimant and the respondent. Scope of Application In the revised Rules the relationship between parties has been broaden by rephrasing the text to include it a defined legal relationship, whether contractual or not in lieu of parties to a contract, Where both the investor and the state frequently do not have contractual relationship. This change has an influence on the validity of resolution disputes under interstate treaties including investment treaties, such as NAFTA. Moreover, the in writing requirement pursuant to Article 1(1) for both the agreement to arbitrate and any modification to the Rules; has been discarded to conform the revised Rules to the UNCITRAL Model Law. This change was essential, since that, many national arbitration laws with more liberal understanding do not include a firm writing requirements for arbitration.2 While, the 1976 stipulates in the model arbitration clause that parties may include in their agreement determination for the appointing authority, number of arbitrators, arbitration place and language. On the flipside, the revised Rules tightened its procedural framework stating shall to increase the efficiency of the procedure and to avoid unnecessary delay and expense. Notice and calculation of periods of time A further step was taken in Article 2 for modernizing the revised Rules to cope with modern electronic prevalence, when the UN working group has generalized the concept of communications in respect of the notice transmission by stipulating by any means in lieu of the physically delivered, particularly, refers to the email and facsimile, counting on the notice record of delivery to the authorised address by the tribunal pursuant to Article 2(2). This step has prevented the proceedings from the uncooperative party rejection to receive such notice. Whilst, the revised rules in Article 4 rectifies the procedural imbalance as mentioned before by allowing the respondent to submit a response within 30 days of the receipt of the notice and giving him the opportunity to set out his position for a clearer parties vision, which may give a chance for negotiations or amicable settlement, preceding the formation of the tribunal. The revised Rules in Article 6(1) have widen the Secretary General of the Permanent Court of Arbitration role by referring that the parties may propose it to serve as appointing authority, moreover, the Article reduced the failure to appoint period to 30 days, mostly its a time
2 Compagine de Navigation et Transport SA v MSC

consuming process. The UN working group sought clarity, by giving an example for the appointing authority and efficiency to the process, by limiting the party in default delaying tactics, as soon as any party request the Secretary General of the Permanent Court of Arbitration as a designating authority to appoint an appointing authority.

Section II: Composition of the Arbitral Tribunal

The 2010 Rules introduce a number of important modifications to the UNCITRAL Rules, by expanding the role of the appointing authority in resolving challenges, replacing arbitrators and appointing. Although far from renovating the rules into institutional arbitration but, the institutionalism here was through empowering the appointing authority. This is not a change limited to a single article, but appears throughout the 2010 Rules. Multi-Party Arbitrations Reflecting the complexity of modern business transactions, which often involve two contracting parties or more, the revised Rules now obviously provide for multi-party arbitration, thus, whenever multiple parties participate as claimant or respondent before a three-member tribunal, they have to jointly appoint the Arbitrator, otherwise, the appointing authority is empowered to revoke any appointment and reappoint the tribunal, where formation of a tribunal is frustrated by the failure of non appointment. Disclosure by Arbitrator Article (11) has broadened the concept of the Arbitrator Disclosure to be a continuous obligation/duty throughout the entire proceedings once he is appointed and till the final Award. Furthermore, the Arbitrator is obliged to disclose - only to the parties - any situation likely to give rise to justifiable doubts to his independency. Challenge of Arbitrator When a party confirms that the Arbitrator cannot perform his function, hence, the Arbitrator can be challenge on the bases of impossibility to perform his task pursuant to Article 12(3), moreover, Article 13(4)3 empowers the appointing authority to decide on the challenge after 30 days from the notice of challenge upon the partys request, if the challenged Arbitrator does not withdraw within 15 days from the notice date. Using a tight time frame for every procedure enhance the process efficiency by avoiding any delay. Replacement of an Arbitrator If pursuant to Article (14) it can be determined that this is an exception circumstances, empowers the appointing authority to deprive a party of its right to appoint a substitute arbitrator without justifications, which often used as a time consuming process, furthermore, for the enhancement of the efficiency of the proceedings and to avoid frustration Article (15) expressly stated that the
3 UNCITRAL Arbitration Rules 2010

proceedings shall be resumed, if the Arbitrator who has been replaced ceased to perform his task, this provision was added to avoid the truncated tribunals. Exclusion of Liability Article 14(2)4 provides the tribunal and the appointing authority an immunity of any claim as allowed by the applicable law, except in intentional wrongdoing, which, grants for the parties the tribunal impartiality and independency.

Section III: Arbitral Proceedings

The 2010 Rules in this section was subject to a vital improvements, as broaden the limits for the tribunal to order interim measures, creating an essential provisional timetable, allowing a third party to join the , waiver of right to object, requiring expert disclosure, as we will discuss from them the more influencing on the arbitration, inter alia; General Provisions Confirmation on the importance that the tribunal should avoid any delay and its expense and the necessity to ascertain a provisional timetable in the proceedings as soon as practicable in Article 17(2), is an added value to the procedural efficiency. Furthermore, Article 17(3) expressly clarifies that the parties must be given just a reasonable opportunity, similarly, in the same Section parties can under the new provisions consider the respondent response as a statement of defence as well as the notice of arbitration considered as statement of claim, and shall include the legal arguments accompanied by all documents and evidence. To perform the proceedings in a timely manner. Place of Arbitration & Applicable Law The revised Rules have globalized the concept of the place by distinguishing between the award place and the hearings location as convenient to the parties and suitable for deliberations/ pleadings. However the award is tied to the place of Arbitration. This textual modernization gives the procedure a wide flexibility. In the same context and Section, Article 35 in the revised Rules requires the tribunal to apply the rules of law designated by the parties, otherwise, liberally decide and apply the appropriate law. Rules of law here, broad wording was intended for the clarity as any body of rules such as lex mercatoria and UNIDROIT Principles of International Commercial Contracts (UPICC) is considered as a rules of law. Interim measures In the 2010 Rules, in contrast, interim measures are comprehensively addressed, including the scope of permissible measures and the standard that a party seeking such measures must meet. This revision draws heavily on the 2006 revision of the UNCITRAL Model Law on Commercial
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Arbitration and largely corresponds to the comprehensive provision on interim measures contained therein.

Section IV: the Award

The impossibility to circumvent the national authority requirements caused the insertion of, the publicity of the award to the required extent by the legal duty; to pursue a legal right or in respect to legal proceeding before court or competent authority, in the revised Rules. However, flexibility was observable by mentioning the rules of law in Article 355 and allowing the tribunal may issue interim, interlocutory, partial and final binding awards in Article 34. Fees and Expenses of Arbitrators In the revised Rules the appointing authority has the power to review the arbitrators fees and expenses on time after its formation. Furthermore, the tribunal is obliged to notify the parties how it will decide its fees and expenses, this also can be adjusted under the supervision of the appointing authority upon the request of any party.

Conclusion
The modifications embodied in the 2010 Rules can be divided broadly into three categories: changes intended to modernize or streamline the conduct of arbitral proceedings, changes intended to facilitate this modernization or improve the efficiency of the proceedings by increasing the power of appointing authorities under the Rules, and changes intended to increase efficiency by eliminating ambiguity and by making the Rules more accessible to non-specialist users. Word Count: 1926

Bibliography

Statutes:
UNCITRAL Arbitration Rules 1976. UNCITRAL Arbitration Rules 2010.

Case Law

5 UNCITRAL Arbitration Rules 2010

Westacre Investments Inc. v. Jugoimport SDPR Holding Co. Ltd The Times, 26 November 1998 CA

Text Books
Anthony Walton, Mary Vitoria, Russell on the law of Arbitration, (Twentieth Edition, Blackwell Publishing, Chapter 9)

Other Resources
Florian Haugeneder, attorney,Wolf Theiss, The revised UNCITRAL Arbitration Rules, October 2010. Justice Clyde croft, The Revised UNCITRAL Arbitration Rules of 2010, A Commentary. Rimantas Daujotas, Law comments by Riamantas Daujotas, Assesment of the new UNCITRAL Arbitration Rules of 2010, July 2010, (http://rimantasdaujotas.wordpress.com/2011/07/04/featured-assessment-of-the-new-uncitralarbitration-rules-of-2010).

Report of the Working Group, 49th session, 15-19 September 2009 (A/CN.9/665)
Steven P, Finizio, Sarah Wheeler, Heidrun Preidt, Wilmer Cutler Pickering Hale and Dorr LLP, Revised UNCITRAL Arbitration Rules, July 2010.