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Leithol Pompeo Acencios Falcon ID 19028583

Q. 3 What are the essential characteristics of international commercial arbitration?


1.0.0 Introduction
It is important to comprehend fully the concepts involved in the above question.
Essential is stated as1:
“...Adjective absolutely necessary; extremely important: it is essential to keep up-to-date
records.”
A general meaning on how the word “arbitration” is defined2:
“A process by which parties consensually submit a dispute to a non-governmental
decision-maker, selected by or for the parties, to render a binding decision resolving a dispute in
accordance with neutral, adjudicatory procedures affording each party an opportunity to present
its case.”
Commercial is defined as2:
“…any trade transaction for the supply or exchange of goods or services; distribution
agreement; commercial representation or agency; factoring; leasing; construction of works;
consulting; engineering; licensing; investment; financing; banking; insurance; exploitation
agreement or concession; joint venture and other forms of industrial or business cooperation;
carriage of goods or passengers by air, sea, rail or road.
A commercial arbitration is international if2:
(a) the parties to an arbitration agreement have, at the time of the conclusion of that
agreement, their places of business in different States; or
(b) one of the following places is situated outside the State in which the parties have
their places of business:
(i) the place of arbitration if determined in, or pursuant to, the arbitration agreement;
(ii) any place where a substantial part of the obligations of the commercial relationship is
to be performed or the place with which the subject-matter of the dispute is most closely
connected; or
(c) the parties have expressly agreed that the subject matter of the
arbitration agreement relates to more than one country.
Therefore, for the purposes of this exercise, the essential characteristics of Model Law will be
essential characteristics of International Commercial Arbitration.
2.0.0 Essential characteristics

1
dictionaries, Oxford living. https://en.oxforddictionaries.com/definition/essential. [Online] [Cited: 3 28, 2019.]
2
NATIONS, UNITED. UNCITRAL Model Law on International Commercial Arbitration 1985 With amendments as
adopted in 2006. Vienna : UNITED NATIONS PUBLICATION, 2008. Sales No. E.08.V.4
Leithol Pompeo Acencios Falcon ID 19028583

The Model Law gathers salient features for the improvement of national laws. These are the
following:
2.1.0 Special procedural regime for international commercial arbitration
The main goal is to reduce or eliminate the inadequacies and disparities of national laws.
2.1.1 Substantive and territorial scope of application
The article (1) of model law defines that3:
“…the scope of application of the Model Law by reference to
the notion of “international commercial arbitration”. The Model Law defines an
arbitration as international if “the parties to an arbitration agreement have, at the
time of the conclusion of that agreement, their places of business in different States.”
The territorial scope3:
“…The principle embodied in article 1 is that the Model Law as enacted in a given State
applies only if the place of arbitration is in the territory of that State. However,
article 1 also contains important exceptions to that principle, to the effect that
certain articles apply, irrespective of whether the place of arbitration is in the enacting
State or elsewhere (or, as the case may be, even before the place of arbitration
is determined).”
2.1.2 Delimitation of court assistance and supervision
Parties have the tendency to exclude the court involvement in international commercial
arbitration, so the model law’s amendments show a trend of limiting and defining the court
jurisdiction.
2.2.0 Arbitration agreement
2.2.1 Definition and form of arbitration agreement
The Model law’s article 7, that was amended in 2006, states two approaches of definition and
form of arbitration agreement. The first approach does not require signatures of the parties. The
second one omits any form requirement.
2.3.0 Composition of arbitral tribunal
The parties have the freedom to lay down the rules of procedure, and if they failed, the Model
Law ensures that the arbitration would proceed effectively.
2.4.0 Jurisdiction of arbitral tribunal
2.4.1 Competence to rule on own jurisdiction
Article (16) of Model Law points out two essential principles:

3
NATIONS, UNITED. UNCITRAL Model Law on International Commercial Arbitration 1985 With amendments as
adopted in 2006. Vienna : UNITED NATIONS PUBLICATION, 2008. Sales No. E.08.V.4
Leithol Pompeo Acencios Falcon ID 19028583

“…Kompetenz-Kompetenz means that the arbitral tribunal may independently


rule on the question of whether it has jurisdiction, including any objections with
respect to the existence or validity of the arbitration agreement, without having to
resort to a court. Separability means that an arbitration clause shall be treated as
an agreement independent of the other terms of the contract.”
2.4.2 Power to order interim measures and preliminary orders
The Model Law establishes a regime for the recognition and enforcement of interim measures.
2.5.0 Recognition and enforcement of awards
The chapter VIII and IX of Model Law expresses that same rules should apply to arbitral awards
whether made in the country of enforcement or abroad, and that those rules should follow
closely the New York Convention.
3.0.0 Summary
The domestic laws are detrimental when international disputes appear due to disparities
between national laws. Therefore, Model Law on International Commercial Arbitration was
chosen as means of harmonization and improvement of national laws. It has a substantive and
territorial scope of application. It is favorable due to the delimitation of court assistance and
supervision. Moreover, International Commercial Arbitration can manage its own form of
arbitration agreement, rules of procedure and jurisdiction.
4.0.0 Bibliography
Primary Sources
UNCITRAL secretariat on the 1985 Model Law on International Commercial Arbitration as
amended in 2006 (2008)
Books
'Chapter 1: Introduction to International Arbitration', in Gary B. Born, International Arbitration:
Law and Practice (Second Edition), 2nd edition (© Kluwer Law International; Kluwer Law
International 2015) pp. 1 – 44