International Commercial Arbitration, Practical Perspectives.

Andrew Berkeley &

Jacqueline Mimms.
LCIA 1998 Rules.
Chapter V, Procedure and hearings. Anthony Diamond QC.
Three or more parties. Art 8
- Article 8 addresses the most contentious element of multi-party arbitrations,
where parties cannot conveniently be split into two opposing camps. Though joint
claimants identify themselves as one side of the dispute in submitting a single
request for arbitration and jointly nominating an arbitrator, joint respondents
may deny that they have commonality of interest and object to having to nominat
e one arbitrator jointly. Under the new Rules, if such a problem arises, the LCI
A Court will select three arbitrators without regard to the nominations made by
any of the parties.
Expedited formation of the Tribunal Art 9
Expedited appointment in cases of exceptional urgency any party may apply in writi
ng to LCIA Court, setting out its case for exceptional urgency and asking that the
time limit for appointment be abridged or curtailed, to which LCIA court may ag
ree in its complete discretion.
Revocation of Arbitrator s appointment Art 10.
Article 10 to be read with Article 29(Decisions of LCIA is binding upon the part
ies and and Arbitral Tribunal). Article 10. Removing an Arbitrator to whom there
is an objection. Death or Resignation.
- Within 15 days of formation the Tribunal shall inform the LCIA.
Majority Power to Continue proceedings. Article 12.
If non-participating arbitrator. Parties, may apply for revocation or replacemen
t for the non-participating arbitrator.
Comparison of ICC and LCIA 1998
Formation of Arbitral Tribunal.
W. Laurence Craig.
LCIA Rule Article 5 ( Formation of Arbitral Tribunal)
5.5 LCIA alone has power to appoint arbitrators. Agreed in writing by the partie
s.
5.6 In case of 3 member tribunal, The Chairman shall not be party nominated. LCI
A Court appoints.
ICC Rules Article 9. ( Appointment and Confirmation of Arbitrators)
Article 9 ICC request from national Committee. . Inherent right to nominate.
Article 7 Parties can appoint arbitrator. Appointment by parties only if agreeme
nt. Else LCIA.
If not Article 7 then Article 8, 9,10.
Seat versus place of Arbitration. LCIA it is called seat ICC it is called
f arbitration Arbitration Act 1996 accepted seat of arbitration

place o

- Choice of institution to administer.

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

Dispute resolution procedures offered by the International Chamber of Commerce (

ICC). Arbitration under the ICC Arbitration Rules is a formal procedure leading
to a binding decision from a neutral arbitral tribunal, susceptible to enforceme
nt pursuant to both domestic arbitration laws and international treaties such as
the 1958 New York Convention.
Rules of Arbitration of the International
Chamber of Commerce
In force as from 1 January 2012
Article 2
Definitions
In the Rules:
(i) arbitral tribunal includes one or more arbitrators;
(ii) claimant includes one or more claimants,
respondent includes one or more respondents,
and additional party includes one or more
additional parties;
(iii) party or parties include claimants, respondents
or additional parties;
(iv) claim or claims include any claim by any party
against any other party;
(v) award includes, inter alia, an interim, partial or final
award.
Article 4
Request for Arbitration
1 A party wishing to have recourse to arbitration
under the Rules shall submit its Request for
Arbitration (the Request ) to the Secretariat at any
of the offices specified in the Internal Rules. The
Secretariat shall notify the claimant and respondent
of the receipt of the Request and the date of such
receipt.
Article 11
General Provisions
1 Every arbitrator must be and remain impartial and
independent of the parties involved in the arbitration.
2. any circumstances that could give rise to
reasonable doubts as to the arbitrator s impartiality.
6 Insofar as the parties have not provided otherwise,
the arbitral tribunal shall be constituted in accordance
with the provisions of Articles 12 and 13.
Article 12
Constitution of the Arbitral Tribunal
Number of Arbitrators
1 The disputes shall be decided by a sole arbitrator or
by three arbitrators.
5 Where the dispute is to be referred to three
arbitrators, the third arbitrator, who will act as
president of the arbitral tribunal, shall be appointed
by the Court, unless the parties have agreed upon
another procedure for such appointment, in which

case the nomination will be subject to confirmation

pursuant to Article 13.
Article 13
Appointment and Confirmation of the Arbitrators
1 In confirming or appointing arbitrators, the Court
shall consider the prospective arbitrator s
nationality, residence and other relationships with
the countries of which the parties or the other
arbitrators are nationals and the prospective
arbitrator s availability and ability to conduct the
arbitration in accordance with the Rules. The same
shall apply where the Secretary General confirms
arbitrators pursuant to Article 13(2).
2 The Secretary General may confirm as
co?arbitrators, sole arbitrators and presidents of
arbitral tribunals persons nominated by the parties
or pursuant to their particular agreements, provided
that the statement they have submitted contains no
qualification regarding impartiality or independence
or that a qualified statement regarding impartiality
or independence has not given rise to objections.
Such confirmation shall be reported to the Court at
its next session. If the Secretary General considers
that a co-arbitrator, sole arbitrator or president of an
arbitral tribunal should not be confirmed, the matter
shall be submitted to the Court.
5 The sole arbitrator or the president of the arbitral
tribunal shall be of a nationality other than those of
the parties. However, in suitable circumstances and
povided that none of the parties objects within the
time limit fixed by the Court, the sole arbitrator or
the president of the arbitral tribunal may be chosen
from a country of which any of the parties is a
national.
Article 14
Challenge of Arbitrators
1 A challenge of an arbitrator, whether for an alleged
lack of impartiality or independence, or otherwise,
shall be made by the submission to the Secretariat of
a written statement specifying the facts and
circumstances on which the challenge is based.
Article 15
Replacement of Arbitrators
1 An arbitrator shall be replaced upon death, upon
acceptance by the Court of the arbitrator s
resignation, upon acceptance by the Court of a
challenge, or upon acceptance by the Court of a
request of all the parties.
2 An arbitrator shall also be replaced on the Court s
own initiative when it decides that the arbitrator is
prevented de jure or de facto from fulfilling the
arbitrator s functions,
Article 21

Applicable Rules of Law

3 The arbitral tribunal shall assume the powers of an
amiable compositeur or decide ex aequo et bono
only if the parties have agreed to give it such powers.
International Commercial arbitration in New York. James C Carter
Arbitrator shall be independent and impartial as regards the parties.
- Detailed Arbitration Selection Clauses. Clause which sets that person with cer
tain attributes may serve. Or Selection mechanism contained in the rules, defaul
t provisions.
- 3 Arbitrators if above 1 million Dollar. Otherwise sole arbitrator. ICDR Inter
national Centre for Dispute Resolution
Selection procedures
a) Role of the default mechanism
b) Lawyers vs Non-Lawyers. (if all are non-lawyers, else all are lawyers)
c) Special professional qualifications(Industry
d) Nationality
e) Possible to appoint same nationality arbitrators. But Chairman is non-nationa
lity. Party appointed arbitrators selects the chairman.
f) Neutrality of Party appointed arbitrators.
AAA. Person who required to serve as arbitrators
1) Direct or indirect financial or personal interest in the outcome of the arbit
ration.
2) Any known existing or past financial, personal, business relationship
3) ICC Rule Art 11 30 days for challenge. Art 12 ICC Court may replace Arbitrato
r on its own

http://kluwerarbitrationblog.com/blog/2014/04/08/neutrality-v-nationality/
Neutrality v. Nationality
* BySonal Sharma
The most quintessential element of international arbitration is an impartial, in
dependent and neutral tribunal. Where impartiality and independence of the arbit
rators is equated with direct relation to or bias towards one of the parties, ne
utrality is related to the nationality of the arbitrator. In international spher
e, the appearance of neutrality is considered equally important, meaning an arbitr
ator is neutral if his nationality is different from that of the parties. Nation
ality generally, is not an issue if the parties have agreed to appoint an arbitr
ator of the same nationality as that of one of the parties but it has a differen
t impact when national courts acts as the appointing authority.
The Supreme Court of India recently inReliance v. Union of Indiadealt with this is
sue in a petition for the appointment of an arbitrator in an international comme
rcial arbitration. The judgment is important for couple for reasons, firstly to
see what role nationality of arbitrators play when international commercial arbi
tration is seated in India with applicable law of the contract and curial law as
India Law, secondly for the effect of inclusion of UNCITRAL Rules in the contra
ct and thirdly, how relevant subject matter and convenience of the parties are.
Even though the court emphasised on the importance of the nationality for the pu
rposes of neutrality, it did not accept it as a mandatory rule.
The dispute arose between parties about disallowance of cost recovery of the exp
enditures incurred by the contractor due to the fact of decreased production lev
el from the gas fields. Reliance industries, BP and subsidiary of Niko resources
(Petitioners) issued a notice for arbitration to Union of India (Respondent) un
der the Production Sharing Contract and both the parties nominated the party app
ointed arbitrators who happens to be Indian nationals, were accepted by both the
parties without any objections. The two appointed arbitrators could not reach t

he consensus to appoint the chair, hence Petitioner approached the court under s
ection 11 (6) of the Arbitration Act, 1996.
The question before the court was to decide if the contract provides for appoint
ment of a neutral foreign national or Indian national to be the presiding arbitr
ator of the tribunal.
The court rejected the Respondent s contention, that the dispute is raised by the
Indian party and not by the other two petitioners who are foreign companies, mak
ing it an Indian arbitration with no question for appointing a foreign arbitrato
r, in view of the correspondence between the parties which indicates that the re
spondent approved and recognised the assignment of the rights by the Petitioner
no.1 to 3 and that the Petitioner no. 1 is the operator on behalf of all the thr
ee contractors and hence the nationalities of the parties involved is different.
The parties did not expressly agree to appoint a foreign national but the Petiti
oner relied on inclusion of UNCITRAL Rules, 1976 in the contract and argued that
the procedure for constitution of the arbitral tribunal under UNCITRAL Rules, 1
976 should be followed and that it would not give the appointing authority the o
ption to appoint an Indian arbitrator and it has to be a foreign national.
The main contentions raised by the Respondent against the appointment of a forei
gn national as presiding arbitrator were that under the contract parties did not
expressly agree to appoint a foreign national, the UNCITRAL Rules, 1976 will be
come relevant only after the tribunal is constituted and because the law governi
ng the arbitration agreement is Indian Law, the seat of arbitration is India whi
ch makes the Indian law the curial law of arbitration and the law governing the
contract is Indian Law, hence the presiding arbitrator ought to be of Indian nat
ionality. It further argued that as the subject matter of the contract is situat
ed in India, it would involve complex questions of law and facts relating to Ind
ian Laws, the parties deliberately refrained from requiring a foreign national t
o be the presiding arbitrator and the appointment of third arbitrator is left en
tirely to the two party nominated arbitrators.
The court while taking into consideration the contentions of the parties, discus
sed the issue of neutrality of the arbitrator at large. It quoted the discussion
inGary Born s International Commercial Arbitration, Volume I (2009) regarding the
impact of UNCITRAL Rules and Model Law in appointment of third or sole arbitrato
rs.
Respondents argued that the contract does not specifically mentions requirement
for the appointment of third foreign arbitrator signifying that only an Indian arb
itrator can be appointed.
The Court refused to accept both the views as being extreme and held that under
the contract the arbitrator can be an Indian national but the view that only an In
dian national can be appointed is not acceptable. It held that the contract requ
ires the appointing authority to appoint an arbitrator, under Arbitration Act, 1
996 who would be neutral, impartial and independent from anywhere in the world i
ncluding India. Further, it observed that Section 11 of the Act provides that a
person of any nationality can be appointed unless otherwise agreed by the partie
s. In this case, parties did not agree to appoint only an Indian national as arb
itrator and the mere fact the two party appointed arbitrators are Indian nationa
l does notispo factoconcludes that parties ruled out the appointment of the third
arbitrator from a neutral nationality.
After relying on its own precedent where it interpreted Section 11 (9) after tak
ing into consideration the position taken by the other countries which adopted U
NCITRAL model law/rules, the court reasoned that the appointing authority under
section 11 (6) would be guided by the relevant provisions under Arbitration act,
UNCITRAL Model Laws, and the UNCITRAL Rules if the parties accepted its applica
bility. It also reiterated that Article 6(4) of the UNCITRAL rules 1976 only spe
aks of taking into account the nationality as one of the factors and the arbitrato
r can not be disqualified just because he belongs to the nationality of one of t
he parties, hence ruling out that under UNCITRAL rules, 1976 the court can only
appoint an arbitrator of nationality other than the parties. The court applied t
he same interpretation to the word may used in Section 11 (9) and held that is not
used in the sense of shall and the provision is not mandatory. It provides discre

tionary power to the appointing authority and it is not mandatory to appoint an

arbitrator of different nationality.
So, theratio decidendiof the case is that Article 11 (9) of the Arbitration Act, 1
996 and UNCITRAL rules, 1976 both providediscretionto the appointing authority on
the nationality of the arbitrators and the court is free to take into considera
tion if there will be an advantage to both the parties if arbitrator having know
ledge of the applicable law is appointed. But even though neutral nationality is
no guarantee of impartiality or independence, it is important as a generally fo
llowed practice.