INSIGHTS

With the recent globalization of the world economy, the disputes crossing national borders become a threat because of their marked increase, in order to settle such disputes, the world needed an effective and consistent regime of rules. In response to this need, modern standards of arbitration have emerged, and various countries implemented legislation adopting these standards[1].

What is the arbitration:

UNCITRAL Model Law on International Commercial Arbitration[1] have set a definition for arbitration in article 2[2]. however, this definition does not spell out the denotation of the term ‘arbitration’.

; `… a specially established mechanism for the final and binding determination of disputes, concerning a contractual or other relationship with an international element, by independent arbitrators in accordance with procedures, structures and substantive legal or non-legal standards chosen directly or indirectly by the parties`[3], this definition is more comprehensive, particularly with regard to the elements of arbitration. In International Commercial Arbitration the arbitral tribunal shall govern the dispute in accordance with `the rules of law designated by the parties as the applicable law to the substance of the dispute`[4].

In the practice of arbitration, it is agreed in general that they are two basic forms of arbitration; Ad Hoc and Institutional[5], even in the theory; the European Convention on International Commercial Arbitration[1] stated in article IV (6) that `… (arbitration by a permanent arbitral institution or an ad hoc arbitration) …`.

Institutional Arbitration:

the institutional arbitration is governed by an individual competent institution under its own rules of arbitration[1], where the parties binding their arbitral procedures which regulate the arbitration tribunal appointing and how it will be administrated and conducted[2], and the most well known institutions are: ICC, ICSID, and LCIA; their object is to provide the arbitration process with all necessary needs[3].

AD HOC Arbitration:

‘Ad Hoc Arbitration’ is arbitration established and managed by the parties themselves, without arbitral institution intervention[1]. It is; however, giving the parties the right to agree to adopt the Rules framed by any arbitration institution without submitting its disputes to such institution[2]. ‘Ad Hoc Arbitration’ may be domestic or international commercial arbitration, which they can establish their own rules of procedures including exchange documents, witness statement, experts ..etc[3]. It should be noticed that if the parties in an arbitration agreement remain silent and have not select an intuitional rules to govern their arbitration; the arbitration will be in AD hoc rules[4].

Russell on Arbitration book stated that  ` … ad hoc arbitration duty is to supply the procedural rules for the arbitration`[1].

Lex Arbitri:

The essential framework for arbitration is properly called Lex Arbitral[2], which translated from Latin as “The Law of Arbitration”[3], and through it the parties can choose the seat of their arbitration and the procedural law which govern it[4]. However, nowadays, the part in arbitration clause which determined the seat of arbitration has turn into a harmonic element of arbitration clause, especially with international disputes. In any case, the seat of arbitration has the priority in selection in arbitration[5].

Written by Odai Kallab “Legal Consultant“

References :

[1] Omar M.H. Aljazy, `Arbitration in Jordan: From Old to New` (2008) 25 J. Int. Arb 219.

[1] United Nations Commission on International Trade Law, UNCITRAL Model Law on International Commercial Arbitration 1985: with amendments as adopted in 2006 (Vienna: United Nations, 2008), available from www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1985Model_arbitration.html. referred to herein as ‘UNCITRAL’.

[1] Ibid, Art (2) sub (a): “arbitration” means any arbitration whether or not administered by a permanent arbitral institution.

[1] Julian Lew, Loukas Mistelis and Stefan Kroll, Comparative International Commercial Arbitration (1^st  edition, Kluwer Law International 2003).

[1] Arbitration and Conciliation 1996, Act s 28 (b) (i) (ii)

[1] Ulrich G Schroeter, `Ad Hoc Or Institutional Arbitration¾A Clear-Cut Distinction? A Closer Look At Borderline Cases` (2017) 10 Asia Arb. J 141. See also Bovis Lend Lease Pte. Ltd. v. Jay-Tech Marine & Projects Pte. Ltd, [2005] SGHC 91.

[1] European Convention on International Commercial Arbitration, (entered into force 07 January 1964)  484 UNTS 364.

[1] Nigel Blackaby and others ,Redfern and Hunter International arbitration (student version), (6^th edition, oxford university press 2015).

[1] Alan Redfren and Martin Hunter, Law and Practice of International Commercial Arbitration, (4^th  edition, Thomson 2004) p 47.

[1] Julian Lew, Loukas Mistelis and Stefan Kroll, (n.6). p 32.

[1] Alan Redfren and Martin Hunter, (n.10) p 42.

[1] Insigma Technology Co. Ltd. v . Alstom Technology Ltd, [2008] SGHC 134.

[1] Mauro Rubino-Sanmartano, International Arbitration Law and Practice, (3^rd edition, Juris LLC 2004) p 3-51.

[1]Sundra Rajoo, ‘Institutional and Ad hoc Arbitrations: Advantages and Disadvantages’, The Law Review (2010), available at <http://sundrarajoo.com/wp-content/uploads/2016/01/Institutional-and-Ad-hoc-Arbitrations-Advantages-Disadvantages-by-Sundra-Rajoo.pdf (> accessed 10 January 2019. See also: Julian Lew, Loukas Mistelis and Stefan Kroll, (n.6). p 34.

[1] David St. John Sutton, Judith Gill, Matthew Gearing, Russell on Arbitration, (24^th edition, Sweet & Maxwell, 2015).

[1] Alastair Henderson, `Lex Arbitri, Procedural Law And The Seat Of Arbitration` (2014) 26 SAcLJ 886.

[1] Fellmeth, Aaron Xavier, and Maurice Horwitz, Guide to Latin in International Law (first published, Oxford University Press, 2009) page 166.

[1] Simon Greenberg and ‎Christopher Kee and ‎J. Romesh Weeramantry, International Commercial Arbitration: An Asia-Pacific Perspective, (first published, Cambridge university press 2011).

[1] Gary born, `international commercial arbitration`, (2nd  edition, Wolter Kluwert 2014).