1

UNIVERSITY OF BUCHAREST

DRAFTING

INTERNATIONAL

ARBITRATION CLAUSES

MASTER’S THESIS

COMPARATIVE INTERNATIONAL ARBITRATION

PART I

Nicu Șoltoianu

6/30/2014

A thesis submitted to the University of Bucharest’s Graduate School of Law by Nicu Șoltoianu, in partial

fulfillment of the requirements for the degree of Master of Laws, International Arbitration Program

2

ABSTRACT This study is concerned with techniques, tips and reviews for the drafting of arbitral clauses

in international commercial contracts, with regard to both local law and international conventions.

The easy enforceability of arbitral awards is considered one of the main factors in the success of

international commercial arbitration. Thus, this thesis not only attempts at comprehensive analysis

of the requirements of and procedures for drafting an effective arbitration clause, but also evaluates

whether an arbitration clause complies with best international practice standards, especially as

embodied in the 1958 New York Convention on the Recognition and Enforcement of Foreign

Arbitral Awards, the 1985 UNCITRAL Model Law on International Commercial Arbitration, as

well as world’s major arbitral institutions.

The thesis comprises of three chapters. The first chapter examines the arbitration clause as a

legal concept, and provides a brief analysis of the nature, forms and role of the arbitration clauses in

international commercial contracts. Chapter two looks at general requirements regarding drafting of

an arbitration clause, for that clause to be valid, and points out the most frequent errors that affect

the validity of the arbitration clause. Chapter three purports to make a classification of arbitration

clauses according to their hierarchy and importance for the arbitration agreement, as proposed by us,

along with a brief comment. The concluding chapter summarises the problems thrown up by the

study, and suggests several measures that could make an arbitration clause be as effective as

possible.

3

ACKNOWLEDGEMENTS

I would like to express my sincere gratitude to my supervisor Prof. Dr. Crenguța Leaua for

her guidance, support, encouragement, advice and invaluable help throughout this study.

My grateful thanks to my mother and father for their endless love and encouragement. My

indebtedness to my family is too deep to be expressed here. I am grateful to them for always

believing in and encouraging me.

I also thank to my friends and colleagues for their patience and moral support and to all who

contributed to the completion of this study.

4

TABLE OF CONTENTS

ABSTRACT ................................................................................................................................................. 2

ACKNOWLEDGEMENTS .......................................................................................................................... 3

LIST OF ABBREVIATIONS ....................................................................................................................... 6

LITERATURE REVIEW .............................................................................................................................. 7

INTRODUCTION ........................................................................................................................................ 8

CHAPTER I: GENERAL CONSIDERATIONS ABOUT ARBITRAL CLAUSES ..................................... 11

1. The autonomous nature of the arbitration clause .............................................................................. 11

2. Model and standard clauses ............................................................................................................. 12

3. Incorporation of arbitration clauses by reference .............................................................................. 13

CHAPTER II: DRAFTING AN EFFECTIVE ARBITRATION AGREEMENT .......................................... 15

1. Arbitrability .................................................................................................................................... 15

2. The need for consent and agreement in writing ................................................................................ 16

3. Pathological arbitration clauses ........................................................................................................ 19

CHAPTER III: CLASSIFICATION AND ANALYSIS OF ARBITRATION CLAUSES ............................ 21

1. Basic clauses ................................................................................................................................... 21

1.1. Essential clauses ...................................................................................................................... 21

a. Adoption of arbitration as a method to resolve disputes ............................................................... 21

b. Final and binding ........................................................................................................................ 22

c. Scope of arbitration ..................................................................................................................... 22

d. Ad hoc or Institutional arbitration ............................................................................................... 23

1.2. Important clauses ..................................................................................................................... 24

a. Number of arbitrators .................................................................................................................. 24

b. Method of selecting arbitrators .................................................................................................... 24

c. Place of arbitration ..................................................................................................................... 25

d. Language of arbitration ............................................................................................................... 27

e. Authorization for a court to enter judgment ................................................................................. 28

2. General clauses ............................................................................................................................... 28

2.1. Helpful clauses ........................................................................................................................ 28

a. Qualifications and conduct of the arbitrators ............................................................................... 28

b. Interim measures ......................................................................................................................... 29

c. Waiver of appeal ......................................................................................................................... 30

2.2. Unusual clauses ....................................................................................................................... 31

5

a. Costs and attorneys’ fees ............................................................................................................. 31

b. Expert determination ................................................................................................................... 32

c. Interest ........................................................................................................................................ 33

d. The currency of the award ........................................................................................................... 34

e. Exclusion of punitive and consequential damages ........................................................................ 35

3. Complex clauses.............................................................................................................................. 35

3.1. Related clauses ........................................................................................................................ 36

a. Notice .......................................................................................................................................... 36

b. Confidentiality ............................................................................................................................. 36

c. Discovery .................................................................................................................................... 38

d. Multi-party arbitration ................................................................................................................ 39

e. Consolidation of arbitral proceedings .......................................................................................... 41

f. Split clauses ................................................................................................................................ 43

g. Governing law ............................................................................................................................. 44

h. Equitable principles ..................................................................................................................... 45

i. Written procedure (summary disposition) .................................................................................... 46

j. Adaptation of contracts and gap filling ........................................................................................ 49

3.2. Multi-tiered dispute resolution ................................................................................................. 49

CONCLUSION .......................................................................................................................................... 52

REFERENCES ........................................................................................................................................... 54

6

LIST OF ABBREVIATIONS AAA

ADR

Art.

Bull.

Ed.

e.g.

FAA

HKLR

IBA

ICC

ICSID

J. Int’l. Arb.

LCIA

Nr.

Rep.

Rev.

Supp.

UNCITRAL

Vol.

WIPO

Y.B.

American Arbitration Association

Alternative dispute resolution

article

bulletin

edition

example

Federal Arbitration Act

Hong Kong Law Reports

International Bar Association

International Chamber of Commerce

International Centre for Settlement of Investment Disputes

Journal of International Arbitration

London Court of International Arbitration

number

report

review

supplement

United Nations Commission for International Trade Law

volume

World Intellectual Property Organization

Year book

7

LITERATURE REVIEW The topic of “drafting international arbitration clauses” is treated in detail, in one form or

another, in almost every textbook of international arbitration. Also, many articles have been written

on this topic, each author addressing the issue according to its own methodology. But this wide

range of approach to the subject is far from absolutely solving the issue concerned, because it rather

creates more ambiguity and, therefore, causes a need for further research. In developing this study,

we used the corresponding doctrine in the field concerned, international conventions, arbitration

laws and regulations issued by various international organizations and institutions, as well as

internet resources. A summary list of the used literature can be found in “References”, at the end of

this study.

8

“Enforcement begins when the arbitration clause is drafted.”

Claudia T. Salomon and J.P. Duffy

INTRODUCTION

Background

The subject of “how to draft an arbitration clause” is one about which much has been

written.1 Numerous articles analyze the essential ingredients for an arbitral clause and sometimes

conclude with the presentation of the “miracle clause” that will solve almost every problem inherent

in an arbitration. However, there are several difficulties in putting most of these miraculous clauses

into practice.

First, too often, as has been said, the dispute resolution clause is done as an afterthought, and

without very much thought. Preparation and study of the matter is essential.

Second, the other party may have very different ideas as to what constitutes an ideal clause.

The relative bargaining strength of the parties comes into play and the negotiator must know what is

essential to his interests and what can safely be given up.

Third, the all-purpose clause may not, in fact, be suitable for all situations. For example, it is

all very well to provide clearly the ideal arbitration clause for payment of interest, but if you ever

have to execute upon an award based on such a clause in Saudi Arabia or certain other countries, the

mention of interest may render the entire arbitration clause and award invalid. So too, it is generally

preferable to indicate in the arbitration clause the place of arbitration. However, if that place is in a

particularly unstable country so that there is a chance that when a dispute arises it might not be

possible, for political or security reasons, to hold the arbitration in the place designated, the result

may be to render the clause unworkable and to forfeit the right to arbitrate.

Still, the fact remains that because of the consensual nature of arbitration and the various

requirements for the validity of the arbitral clause, if you desire that arbitration be the method of

dispute resolution between yourself and a business partner, you will have to have an arbitral clause.

It is also true that many of the difficulties that most often complicate and delay an arbitral

1 William Laurence Craig, William W. Park, Jan Paulsson, International Chamber of Commerce Arbitration, 2nd edition 1990; Nicolas C. Ulmer, Drafting International Arbitration Clause in The International Lawyer, Vol.20, Nr. 4, 1986.

9

proceeding and the possible enforcement of an arbitral award can be removed or diminished by a

well-drafted arbitration clause.

Moreover, the more effective the arbitral clause that is negotiated, the less likely it is that it

will ever be used. This is because an ineffective dispute resolution clause will be less of a deterrent

to a party that is considering a breach of contract. So, even businessmen who wish to deal with

lawyers as little as possible have a major interest in involving an attorney in the negotiation of the

dispute settlement provision unless those businessmen wish to prove, once again, the old adage that

arbitration is a procedure that has too few lawyers in the beginning (when the clause is drafted) and

too many in the end (when an arbitration is actually under way).2

Methodology of the Thesis

This study is library based, drawing on the library of the Universities of Bucharest. Also

accessed are electronic databases such as Kluwer Arbitration, UNCITRAL Web Site, Westlaw,

LexisNexis and Hein Online etc for cases, articles, legislation, the travaux preparatoires of the New

York Convention, the working documents of UNCITRAL, reports and official information. The

research method is mainly analytical and comparative. The approach of different jurisdictions is

contrasted to discover similarities, dissimilarities, strengths and weakness, in order to determine the

optimal approach.

Scope and importance of the Thesis

This thesis relates to previous studies on the same topic, but because it is a thesis and,

therefore, being a part of the gray literature, and given the researcher’s poor practical experience in

the field of arbitration, it is not aimed at revolutionizing the current practice and doctrine of “how to

draft an arbitration clause”, or at filling the gaps in the research. It is rather the researcher’s own

opinion on the topic at issue, formed on the basis of the studied literature. Therefore, the thesis deals

with the problem of “drafting arbitration clauses” only for illustrative, comparative and analytical

purposes. However, it could serve as theoretical support and guidance for students and practitioners.

Further research on the topic is encouraged and advised.

Structure of the Thesis

2 Stephen R. Bond, How to Draft an Arbitration Clause (Revisited), ICC Int’l Ct. Arb. Bull. (Dec. 1990) at 14.

10

This thesis consists of introduction, three chapters, nine sub-chapters and six paragraphs. The

content of the chapters is described in the “Abstract” section supra.

11

CHAPTER I: GENERAL CONSIDERATIONS ABOUT ARBITRAL CLAUSES

1. The autonomous nature of the arbitration clause

In general, the arbitration agreement provides the basis for arbitration. It is defined as an

agreement to submit present or future disputes to arbitration.

The generic concept comprises two basic types:3

a. A clause in a contract, by which the parties to a contract undertake to submit to arbitration

the disputes that may arise in relation to that contract (arbitration clause); or

b. An agreement by which the parties to a dispute that has already arisen submit the dispute to

arbitration (submission agreement).

The arbitration clause therefore refers to disputes not existing when the agreement is

executed. Such disputes, it must be noted, might never arise. That is why the parties may define the

subject matter of the arbitration by reference to the relationship out of which it derives.

The submission agreement refers to conflicts that have already arisen. Hence, it can include

an accurate description of the subject matters to be arbitrated. Some national laws require the

execution of a submission agreement regardless of the existence of a previous arbitration clause. In

such cases, one of the purposes of the submission agreement is to complement the generic reference

to disputes by a detailed description of the issue to be resolved.4

Historically, it used to be interpreted that when the arbitration agreement was in the form of

a clause contained in a contract, the clause was accessory to the contract. It was thus concluded that

the invalidity of the contract also entailed the invalidity of the arbitration agreement. On the basis of

that interpretation, whenever a party pleaded invalidity of the main contract and perforce of the

arbitration agreement, thereby challenging the arbitrators’ jurisdiction, the arbitrators were obliged

to suspend the arbitration proceedings until the question was decided by a court.5

3 United Nations Conference on Trade and Development, Dispute Settlement, International Commercial Arbitration, 5.2 The Arbitration Agreement, New York and Geneva, 2005, at 3. 4 Ibidem. 5 Ibidem, at 36.

12

In order to avoid this situation, most modern laws and rules on arbitration have included two

main principles: the principle of “separability”, “autonomy” or “independence” of the arbitration

clause, and that of “Kompetenz-Kompetenz” or “competence de la competence”.6

Since the arbitration agreement is currently regarded as autonomous or separate from the

main contract, the invalidity of the contract does not entail the automatic invalidity of the arbitration

agreement. Moreover, as arbitrators are empowered to examine and rule on pleas raised against their

jurisdiction, the arbitration is not terminated or suspended by the mere raising of a motion that the

arbitrators lack jurisdiction.7

2. Model and standard clauses

Many contracting parties (and counsel) treat the negotiation and drafting of international

arbitration clauses as an afterthought, focusing on other seemingly more substantive aspects of the

contract negotiations. This is unfortunate, as dispute resolution clauses can have a significant

impact on any subsequent dispute that may develop between the contracting parties. International

arbitration clauses should be thought of as insurance policies of sorts – a last line of defense in case

the unthinkable happens. At the absolute minimum, it is essential that the parties draft an efficient,

workable arbitration clause that will not create problems down the road.8

Arbitral institutions provide model arbitration clauses to help contracting parties avoid such

problems when a dispute arises. Usually, the leading international arbitral institutions provide a

useful list of the model arbitration clauses. It is important to note that these model clauses are

offered as a starting point only – the specific circumstances of each contractual relationship may

require customized arbitration clauses suited to the parties’ needs. Beyond adopting a model clause

as a starting point, some of the issues to consider include:9

• The scope of the arbitration clause: should its coverage be broad or narrow? (Most model

arbitration clauses tend to be drafted very broadly.)

• The cost of the arbitration in proportion to the size of the transaction or contract: some

arbitral institutions' administrative fees are significantly more expensive than others, and three-

6 Ibidem. 7 Ibidem. 8 http://www.ezcarbitrationlawfirm.com/model-arbitration-clauses.html 9 Ibidem.

13

member tribunals obviously will be more costly than sole arbitrators. Are the modalities designated

in the arbitration clause appropriate for the type and size of the transaction at hand?

• Specific procedures for arbitral proceedings: sophisticated parties may want to include, or

exclude, specific procedures, such as the type or extent of discovery allowed, expedited proceedings,

and so on.

• The impact of the law of the chosen arbitral seat on any dispute – are the arbitration statutes

of the place of the arbitration sufficiently modern, or will they hinder arbitration? Do they

specifically exclude or limit the specific subject matter of the contract and resulting dispute? Might

the law of the arbitral seat create enforcement issues?

• Which arbitral institution and corresponding arbitration rules are most appropriate for the

transaction? If a party does not get its first choice, can it suggest an acceptable alternative, in return

for bargaining leverage on other important negotiated issues, such as governing law?

• Is there a need for a multi-tiered dispute resolution clause? Should the parties first require

settlement talks or mediation prior to initiating arbitration proceedings? Should specific clauses of

the contract be carved out for separate litigation or expertise procedures?10

3. Incorporation of arbitration clauses by reference

Major projects may involve the negotiation and drafting of many different but interrelated

agreements, in some cases dozens of separate contracts. If the parties desire to include the same

arbitral clause in each agreement, rather than typing the same language into each and taking the risk

of varying language, which could lead to different results, the parties may prefer to negotiate a

single master or umbrella arbitration agreement. This master agreement can then be incorporated

into each separate contract by reference. If this is done, each separate contract should contain

language incorporating the master arbitral agreement. Even if the arbitral clause will be somewhat

different in some of the project agreements, a master arbitration agreement can still be used, with

any additions or deletions drafted into specific contracts.

It is not uncommon in same trades for the parties to conclude contracts by telexes or other

similar means in which they agree to price, quantity and the general terms and conditions of an

industry association standard-form document, which may include an arbitration clause. Courts have

generally upheld the incorporation by reference of an arbitration clause in this manner, provided the

contract is between experienced businessmen and they are (or should be) familiar with the document

10 Ibidem.

14

incorporated.11 In France, for an incorporation by reference to be valid, the existence of the

arbitration agreement must either be mentioned in the main contract or the contents of the

incorporated document must be known to the parties.12 It is generally preferable for the language

incorporating the other document to refer specifically to the arbitration clause in order to show the

parties were aware of it and intended arbitration.

If an arbitral clause from an unrelated agreement is to be incorporated by reference into a

specific contract, the parties should be careful to insure that all aspects of the clause fit their

agreement.13

11 Tradax Export, S.A. v. Amoco Iran Oil Co., 11 Y.B. Com. Arb. 532, 534-535 (1986) (Swiss Federal Supreme Court); Lawrence Craig, William Park & Jan Paulsson, International Chamber of Commerce Arbitration § 5.08 at 94 (2d ed. 1990). 12 Bomar Oil v. Enterprise Tunisienne d’Activites Petrolieres, decision of the French Cour de Cassation, 11 October 1989, cited in Richard Kreindler, Practical Issues in Drafting International Arbitration Clauses, 63 Arbitration 47,51 (1997). 13 Progressive Casualty Ins. Co. v. Reaseguradaora Nacional de Venezuela, 802 F. Supp. 1069, 1079 (S.D.N.Y. 1992), rev’d, 991 F.2d 42, 47 (2d Cir. 1993). Brian Drewitt & Giles Wintage-Saul, Drafting Arbitration Clauses, 62 Arbitration 39, 44 (1996).

15

CHAPTER II: DRAFTING AN EFFECTIVE ARBITRATION AGREEMENT

1. Arbitrability

Those involved in an international commercial contract which provides arbitration as the

dispute resolution method have to consider whether the subject matter in dispute is arbitrable. The

parties have to address this question when contemplating entering into an arbitration agreement. The

arbitrators have to decide upon the issue when determining whether a disputes can be tried on its

merits. In addition, the issue may have to be considered by the court at the place of arbitration when

deciding whether an arbitral award shall be set aside, and the court or competent authority in the

jurisdiction where the future arbitral ward is to be enforced when deciding if an arbitral award is

enforceable.14

In formal treatments of the subject, arbitrability is typically divided into subjective

arbitrability and objective arbitrability. Subjective arbitrability is when national laws restrict or limit

some subjects to enter into arbitration agreements. Objective arbitrability is when national laws

impose some limitations or restrictions based on the subject matter of the dispute. When introducing

the issue of arbitrability in international commercial arbitration, it is necessary to focus on: 1) the

law applicable to questions of arbitrability; 2) the limitations imposed in different countries; 3)

whether arbitration tribunals have the right and duty to deal with the issue of arbitrability on their

own initiative.15

By their nature, the subject matter of some disputes is not capable of arbitration. In general,

two groups of legal procedures cannot be subjected to arbitration:16

• Procedures which necessarily lead to a determination which the parties to the dispute may

not enter into an agreement upon. Some court procedures lead to judgments which bind all members

of the general public, or public authorities in their capacity as such, or third parties, or which are

being conducted in the public interest. For example, until the 1980s, antitrust matters were not

arbitrable in the United States. Matters relating to crimes, status and family law are generally not

considered to be arbitrable, as the power of the parties to enter into an agreement upon these matters

is at least restricted. However, most other disputes that involve private rights between two parties

14 Per Sundin and Erik Wernberg, The scope of arbitrability under Swedish law, The European Arbitration Review, 2007, at 63. 15 Katarina Chovancova, Arbitrability, available at http://www.paneurouni.com/files/sk/fp/ulohy-studentov/2rocnikmgr/arbitrability-students-version.pdf. 16 http://en.wikipedia.org/wiki/Arbitration#Arbitrability.

16

can be resolved using arbitration. In some disputes, parts of claims may be arbitrable and other parts

not. For example, in a dispute over patent infringement, a determination of whether a patent has

been infringed could be adjudicated upon by an arbitration tribunal, but the validity of a patent could

not: As patents are subject to a system of public registration, an arbitral panel would have no power

to order the relevant body to rectify any patent registration based upon its determination.

• Some legal orders exclude or restrict the possibility of arbitration for reasons of the

protection of weaker members of the public, e.g. consumers. Examples: German law excludes

disputes over the rental of living space from any form of arbitration, while arbitration agreements

with consumers are only considered valid if they are signed by either party, and if the signed

document does not bear any other content than the arbitration agreement.17

If the subject matter in dispute is non-arbitrable an arbitral award may be declared invalid or

challenged, depending on the provisions of the law applicable to the subject matter.18

2. The need for consent and agreement in writing

Arbitration is always based on agreement. Consent to arbitration is an indispensable

requirement for a tribunal’s jurisdiction. Both parties must have expressed their consent. Parties to

an arbitration agreement must have legal capacity to enter into that agreement, otherwise it is

invalid. The concept of capacity concerns the contractual sphere and, particularly, the possibility of

entering into a binding arbitration agreement – this agreement being separable from the main

contract.19

The capacity of parties to enter into an arbitration agreement is governed by the law

applicable to the parties. The general rule is that any natural or legal person who has the capacity to

enter into a valid contract also has the capacity to conclude a valid arbitration agreement. Except for

restrictions aimed at protecting consumers, national laws rarely impose restrictions on the capacity

to enter into arbitration agreements. In state-controlled economies, there may be a lack of capacity

where the necessary foreign trade license is missing.20

A corporation is required to act through its directors and officers in accordance to its

constitution and its own governing law. The doctrine of ultra vires, which limits the capacity of

17 Ibidem. 18 Supra note 11. 19 Andrea M. Steingruber, Consent in International Arbitration, Oxford University Press, 15 March 2012. 20 Ibidem.

17

entities to the activities authorized by their charter, is virtually extinct, and private legal entities are

generally recognized as enjoying full capacity to enter into legal relationships including arbitration

agreements, notwithstanding any disposition to the contrary in their articles of incorporation or by-

laws. Indeed, it is not unusual for states to have specific rules of law that restrict or abrogate the

doctrine of ultra vires, so as to protect persons dealing in good faith with corporations.21

While cases concerning capacity of commercial entities stricto sensu are quite exceptional

and unlikely to occur on a regular basis, a much more likely situation is where the organs of a

company or its officers enter into an arbitral agreement exceeding their powers. In fact, a frequent

challenge is that a person who signed the contract for one of the parties was not properly authorized.

However, in these cases, although there are exceptions, national courts and arbitral tribunals are

ordinarily very reluctant to permit companies to deny the authority of their officers, directors or

employees to conclude binding arbitration agreements.22

Article II of the New York Convention does not make express reference to the lack of

capacity as a ground for challenging an agreement to arbitrate. Instead, article II provides for the

non-recognition of arbitration agreements only if they are “null and void, inoperative or incapable of

being performed”. Nonetheless, it is clear that the contracting parties’ capacity is a requirement for a

valid international arbitration agreement. Thus, article V(1)(a) of the New York Convention permits

a national court to deny recognition to an award if the parties to the arbitration agreement “were,

under the law applicable to them, under some incapacity”. It is widely accepted that article II must

be read to incorporate ‘incapacity’ in its reference to arbitration agreements, or alternatively to

agreements that are ‘null and void’ and therefore not to require giving effect to an arbitration

agreement where one of the parties lacked legal capacity.23

Similarly, most national arbitration laws contain no provisions dealing with the requirement

of capacity. However, they assume that a lack of capacity is grounds for denying recognition of an

arbitration agreement, even though they do not prescribe substantive provisions addressing what

constitutes a lack of capacity. Nevertheless, it is clear that, even in the absence of a specific

21 Ibidem. 22 Ibidem. 23 Ibidem.

18

provision, the parties’ capacity is essential to the existence of a valid international arbitration

agreement.24

The requirement that international commercial arbitration agreements must be made in

writing is well accepted in most countries and has become a uniform practice in international

commercial arbitration law. This is due in large part to the widespread acceptance of the Convention

on Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention"). Article II

(1) provides that "each Contracting State shall recognize an agreement in writing." The term

"agreement in writing" is defined in Article 11 (2) of the Convention as "an arbitral clause in a

contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or

telegrams." Since the New York Convention took effect, the legislatures of most jurisdictions have

accepted the written form requirement, thereby excluding the validity of arbitration agreements

made tacitly or orally. Generally, the international practitioners have followed suit, however, some

reject the necessity of the written form requirement.25

The 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards requires a

valid arbitral agreement to include an arbitral clause in a contract or an independent arbitration

agreement, signed by the parties or contained in an exchange of letters or telegrams. When the

parties sign an agreement containing arbitral clauses, the written form requirement is satisfied, thus

alleviating the problems associated with oral or tacit arbitral agreements. When an agreement is

made through exchange of letters or telegrams, the proposal and acceptance of arbitration are the

basic elements of arbitration agreements. However, the exchange of letters or telegrams must also

clarify that proposal and acceptance of an arbitral agreement has the effect of proving its existence.

The New York Convention differs from the Model Law of the United Nations International Trade

Law Committee. The Model Law states: “The arbitration agreement shall be in writing. An

agreement is in writing if it is contained in a document signed by the parties or in an exchange of

letters, telex, telegrams or other means of telecommunications which provide a record of the

agreement, or in an exchange of statements of claim and defense.” However, as the Model Law

24 Ibidem. 25 Jing Wang, International Judicial Practice and the Written Form Requirement for International Arbitration Agreements, Copyright C 2001 Pacific Rim Law & Policy Journal Association.

19

precludes the application of other domestic laws, its written form requirement is in fact stricter than

that of the New York Convention.26

3. Pathological arbitration clauses

Frederic Eisemann who served as Secretary General of the ICC International Court of

Arbitration proposed certain criteria as essential in respect of the functions of an arbitral clause.27

The first should specify compulsory consequences for the parties with regard to the

procedure for dispute resolution within their agreement. These consequences would include the

obligation to submit the dispute to arbitration, the procedures for so doing and to regard the

arbitrator’s award as final and binding.

The second criterion excludes the intervention of a state’s court in the settlement of a

dispute, prior to the decision of the arbitrator. However, it may be useful to provide for a certain

level of state court’s intervention where, for example, interlocutory relief is required and its award is

beyond the authority of the arbitrator, or arbitration court.

The third criterion provides to give the arbitrators authority to resolve the disputes under the

agreement. These powers could include the authority to make various procedural and interim orders.

The fourth envisages the putting in place of a system that provides of the optimum

conditions for effective and speedy determination of the arbitration which can be enforced by a

state’s court.

According to Eisemann, bad clauses are “pathological”. For example, often the description

of the seat of the arbitration is incorrect. The effect of this clause may result in a collateral dispute

regarding the seat of the arbitration which would need to be resolved by the arbitrator or by a court –

all this will certainly add to the costs of the arbitration. Other frequent errors are the failure of the

arbitral clause to specify issues concerning the applicable procedural rules, the number of arbitrators

and the applicable substantive law. The ‘pathologens’ can be used by a defaulting party to delay the

arbitral process.

26 Ibidem. 27 Dr. Edward Lestrade, Drafting Arbitration Clauses in International Agreements – a guide for European lawyers, November 10, 2006.

20

Care should be taken in limiting the application or the scope of the arbitration unnecessarily.

For example: ‘issues arising out of the performance of the agreement are to be referred to

arbitration’ – this would have the effect of specifying only ‘performance’ issues for arbitration,

whereas: ‘all disputes arising in connection with the agreement’, would have a wider and more

complete scope.

When an appointing authority (for the arbitration court, or arbitrator), care must be taken to

ensure that the appointing authority is able (and willing) to make the appointment. Again, it is

important to determine whether the appointing authority will require and receive any fees for its

appointment role and in that case how the fees will be met. Such defects would mean that the parties

would need to have the issues decided by a state court – again adding unnecessary costs to the

arbitral clause.

Generally, pathogens can be resolved upon application to a state court, however, there are

costs and delays which will normally lessen the efficacy of the choice of dispute resolution via

arbitration.

Finally, it is important for drafters to appreciate that arbitration agreements need to contain

detailed and clear provisions about how the dispute will be resolved. Failure to do so can result in

significant delays where a party is reluctant to cooperate in the dispute-resolution process.28

28 Ibidem.

21

CHAPTER III: CLASSIFICATION AND ANALYSIS OF ARBITRATION CLAUSES

Evaluating the validity and effectiveness of arbitration clauses requires an analytical

framework. In our opinion, arbitration clauses may be classified into a trinity of categories: (1) basic

clauses, (2) general clauses and (3) complex clauses. In practice, of course, arbitration clauses do not

fall neatly into such rigid categories. Each provision serves its own separate and unique need, and

the various provisions may be combined in a variety of different ways in any given arbitral clause.

Nevertheless, these categories may prove a useful analytical tool for evaluating arbitration

agreements against a party’s needs.

1. Basic clauses

Basic clauses may be defined as those that include only the basic provisions – those that are

essential or particularly important to a viable arbitration agreement. Basic clauses encompass

institutional model clauses, but may have additional provisions as well. These provisions may

include essential clauses and important clauses, as shown below.

Basic clauses are often used when routine commercial transactions are involved, when there

is only a brief time period for negotiating or drafting the arbitration clause or when the parties are

unable to agree to anything more. In the energy industry, examples of basic clauses may be found in

oil sales, shipping, joint study and bidding, and oil lifting agreements.

1.1. Essential clauses

a. Adoption of arbitration as a method to resolve disputes

The first requirement for an arbitration clause is that the parties’ agreement must expressly

state they intend to resolve their disputes by arbitration. While this seems obvious, occasionally

parties have said that controversies would be referred to an institution that administers arbitration

proceedings, but without mentioning arbitration as the method for deciding their issues.29

Institutions such as the ICC have other methods for determining disputes that do not include

arbitration. These procedures encompass conciliation, expert determination and a pre-arbitral referee

procedure. Thus, if the parties want their disputes decided by arbitration, they should say so

explicitly.

29 Alan Redfern & Martin Hunter, Law & Practice of International Commercial Arbitration (2nd Ed. 1991) at 178.

22

b. Final and binding

It is common for arbitration clauses to provide that any arbitration award rendered will be

“final and binding”. In this context, “binding” means the parties intend that the award will resolve

the dispute and be enforceable by national courts against the losing party. It will not result merely in

an advisory opinion that the parties are free to disregard. A reference that any award be “final”

means the substance of the award will not be reviewed by the courts.30

Even if the parties do not say explicitly that the award will be final and binding, they may

accomplish the same result by adopting the rules of an arbitral institution. By including the terms

“final and binding”, or an equivalent phrase – “any disputes shall be finally settled by binding

arbitration” – parties express their intent for courts to enforce the award without reviewing the

evidentiary foundations of the award. This is an important provision, and especially so if

institutional rules are not adopted.

c. Scope of arbitration

At the outset, the parties should consider what types of disputes they want arbitrated. If they

desire to restrict arbitration only to contract disputes, they should draft a narrow-form arbitration

clause. This may be accomplished by using the phrase, “all disputes arising under this agreement,”

to define the scope of the disputes encompassed within the arbitration clause.31 This phrase may

preclude arbitration of matters that are closely connected to the contract, but do not “arise out of” it.

If all potential disputes are intended to be encompassed, including tort claims, statutory

claims, fraud-in-the-inducement claims, and any others that may arise from the relationship

established by the parties’ agreement, then a broad-form clause should be drafted.

Because of this difference in interpreting these phrases, to create a broad clause, it may be

useful to include all of these phrases in series or to state outright the clause is intended to be a broad-

form clause that will encompass all possible claims between the parties. To ensure the breadth of the

clause, some parties include language stating the disputes covered include any relating to “the

30 Supra note 2, at 20. 31 Mediterranean Enterprises, Inc. v. Ssangyong Corp., 708 F.2d 1458, 1464-65 (9th Cir. 1983); In re

Kinoshita & Co., 287 F.2d 951, 952 (2d Cir. 1961), cited in R. Doak Bishop, A Practical Guide for Drafting

International Arbitration Clauses, King & Spalding, Houston, Texas.

23

contract, its negotiation, performance, non-performance, interpretation, termination, or the

relationship between the parties established by the contract”.

Whatever approach the parties decide to take, they should be clear in their choice of

language so as to avoid any ambiguity or misinterpretation.

d. Ad hoc or Institutional arbitration

One of the more fundamental issues for parties agreeing to arbitrate future disputes is to

determine whether the arbitration will be conducted ad hoc or will be administered by an arbitral

institution.

The advantage of ad hoc arbitration is that the parties avoid administrative fees charged by

arbitral institutions, which can be substantial in some cases. The disadvantages of ad hoc arbitration

are that national courts are more likely to intervene when there is no administering institution and, in

the absence of an administrator, the parties may have to apply to the courts to resolve procedural

problems on which they cannot agree. Ad hoc arbitration also requires that the parties assume the

administrative and planning responsibilities generally undertaken by arbitral institutions. Moreover,

with ad hoc arbitration there is no quality control review by an institution like ICC. There is also

evidence that ad hoc awards do not receive the same deference as institutional awards when they are

presented to courts for enforcement.32

The advantages of using an institution represent the flip side of ad hoc arbitration. The

institution may handle most of the administrative functions, provide a method of handling most

procedural problems and provide quality control for at least some functions such as the selection of

arbitrators. Cost is the primary disadvantage of institutional arbitration. Institutions such as the ICC

Usually charge an administrative fee that is a percentage of the amount in controversy. In addition,

there may be hidden costs such as first-class airfare for the arbitrators for long flights or the fee for a

secretary to the arbitral tribunal (usually a junior counsel) to take care of administrative details and

take notes. In return for the administrative fee, however, the ICC performs significant services for

the parties, including a review of party-nominated arbitrators for independence, appointing qualified

arbitrators when necessary and scrutinizing proposed awards to insure their enforceability.

32 William W. Park, Arbitration of International Contract Disputes, 39 Bus. Law. 1783, 1784 n.2 (1984) cited in R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas.

24

In lieu of the arbitration rules of an institution, the parties may adopt the UNCITRAL

Arbitration Rules. This is a set of arbitral rules drafted by UNCITRAL but not connected to any

administering institution. Some institutions such as the ICC, AAA and LCIA have declared they will

apply the UNCITRAL Rules if the parties agree to their use.33

The Parties may also adopt the UNCITRAL Rules for use in ad hoc arbitration. If the parties

choose an ad hoc arbitration, but do not adopt ready-made rules, they must frame their own rules

sufficiently for conducting the proceeding. Otherwise, they fall back on the law of the country where

the arbitral proceeding will be held.

1.2. Important clauses

a. Number of arbitrators

Most arbitration rules provide for the number of arbitrators and a method for selecting them

if the parties do not specify the number or a mechanism for their appointment. Nevertheless, it is

generally desirable that the parties express their preference. The custom in international arbitrations

involving significant monetary amounts is to appoint a three-person panel, but when the amount in

dispute does not justify three, a single arbitrator may be preferred.

b. Method of selecting arbitrators

The appointment of a three-person panel usually involves each party appointing one

arbitrator, and these two then agreeing on a third arbitrator to be the chairman of the tribunal. If the

parties simply adopt institutional rules, some provide that the institution will determine the number

of arbitrators and will select the third arbitrator when three are deemed appropriate.34

In an ad hoc arbitration, it is important that the parties include a back-up provision for

appointment by an independent authority if a party fails to appoint its arbitrator or if the party-

appointed arbitrators cannot agree on the presiding arbitrator.35 They should also either provide for

33 Stewart Baker & Mark Davis, The UNCITRAL Arbitration Rules in Practice: The Experience of the Iran-United States Claims Tribunal (Kluwer 1992); Jacomijn J. van Hof, Commentary on the UNCITRAL Arbitration Rules: The Application by the Iran-U.S. Claims Tribunal (Kluwer 1991), cited in R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas. 34 ICC Rules art. 8(2) & 8(4). 35 ICC Rules art. 8(4); AAA International Rules art. 6(3); LCIA Rules art. 7.2; UNCITRAL Rules art. 7(2).

25

the replacement of arbitrators who die or resign or authorize the continuance of the proceedings with

a truncated tribunal, or both.36

Some arbitration clauses provide that the parties shall attempt within a stated period of time

after the commencement of the arbitration to agree on a sole arbitrator, but if they are unable to do

so within the period allowed, the result will be a panel of three arbitrators. This mechanism provides

flexibility – the parties are not bound under any and all circumstances exclusively either to a sole

arbitrator or to a panel of three. A similar approach may mandate that the arbitration will be

conducted by a sole arbitrator if the amount in controversy, exclusive of interest and costs, is less

than a threshold amount, but will be conducted by a panel of three arbitrators if the dispute involves

the threshold amount or more.

Occasionally, the contract will provide for a named individual to act as arbitrator. This is

generally not a wise procedure because the unavailability of the person named may render the

arbitration agreement invalid or, even if not, it may cause problems regarding the appointment of a

substitute.37

Many arbitral rules either require or suggest that the institution appoint a sole or third

arbitrator who is not a national of either parties’ countries. Parties occasionally provide in their

clause that no national of a party or of its parent company may serve as arbitrator, or more often,

that the sole or third arbitrator may not be a national of the parties’ countries.

c. Place of arbitration

If the parties fail to agree to the place of the arbitration, some institutions’ rules allow the

arbitrators to decide the situs based on the circumstances of the parties and the case,38 while other

rules authorize the institution itself to select the situs.39 In selecting the situs, perhaps the most

important factor is the legal environment of the forum. Parties should consider the following factors

related to the legal system of the venue:40

36 A truncated tribunal is one that begins with three arbitrators but is able to continue its work with a lesser number, if necessary; Stephen Schwebel, The Validity of an Arbitral Award Rendered by a Truncated Tribunal, 6 ICC Int’l Ct. Arb. Bull. 19, 20 (Nov. 1995). 37 Marcus v. Meyerson, 170 N.Y.S.2d 924, 925-26 (1958). 38 AAA International Rules art. 13; UNCITRAL Rules art. 16. 39 ICC Rules art. 14; LCIA Rules art. 16.1 40 Gary B. Born, International Commercial Arbitration in the United States at 73-75 (1994).

26

• It is especially important to select a forum whose arbitral awards will be enforceable in other

countries, as for example, a country that has ratified the New York Convention recognizing arbitral

awards;

• The forum’s law should recognize the agreement to arbitrate as valid. Article V(1)(a) of the

New York Convention contemplates that the validity of an arbitration agreement may be determined

by the law of the country where the award was made, so compliance with local law is important.

• Because the arbitral site is usually the country whose courts will hear an action to vacate an

award, it is important to consider the scope of review of awards available in that country.41

• The national courts of the situs should not unnecessarily interfere in ongoing arbitral

proceedings, thereby creating an incentive for dilatory tactics and expensive procedural disputes.

• The forum’s court should, however, assist the proceedings when necessary.42

• The host country should allow non-nationals to appear as counsel in international arbitration

proceedings. This is not always the case; for example, Japan and Singapore have at times required

that parties’ representatives be lawyers admitted to practice, and reside, in the forum state.43 Other

countries require that representatives be lawyers (e.g. Indonesia, Israel, Saudi Arabia and Spain),44

while others require representatives to present a power of attorney to the arbitral panel (e.g.

Argentina, Greece, Austria).45

• The situs should not unduly restrict the choice of arbitrators. In Saudi Arabia arbitrators must

be Muslim and male.46 In Venezuela, arbitrators must be lawyers licensed to practice law in

Venezuela if Venezuelan law applies.47 Certain other countries have also required that arbitrators be

nationals of their country.48

The location of the arbitration may also determine the language of the arbitration if the

parties have not specified the language. Even if the parties do specify a venue, some countries’ laws

41 Southern Pacific Properties Ltd. V. Arab Republic of Egypt, 2 Int’l Arb. Rep., No. 1, at 17 (Cass. Civ. 1re 1987) (French court’s reversal of ICC arbitral award rendered in Paris). 42 U.S. Arbitration Act, 9 U.S.C. §§ 4,7. 43 David Rivkin, Keeping Lawyers Out of International Arbitration, 6 Int’l Lit. Q. 4-5 (March 1990). 44 Ibidem, at 4. 45 Ibidem, at 3. 46 Supra note 29, at 178. 47 James Rodner, Arbitration in Venezuela, in ICC International Court of Arbitration Bulletin: International Commercial Arbitration in Latin America – Special Supplement at 99 (1997). 48 Piero Bernardini, The Arbitration Clause of an International Contract, 9 J.Int’l. Arb. 45,47 (1992) at 54.

27

require that their language be used. For example, arbitrations in some Arab countries must be

conducted in those countries’ languages.49

A location that is inconvenient for the parties or expensive for travel may affect the

availability of witnesses or the cost of proceedings. The tax treatment of the award may also be a

relevant consideration.50

In some cases, the parties may provide for two different places for the arbitration, depending

on which party initiates the proceeding. This has been referred to as “home and home” provision.51

d. Language of arbitration

Absent agreement by the parties, most arbitral rules allow the arbitrators to decide the

language, taking into account the language of the contract and other relevant circumstances.52 The

AAA International Rules specify that the language of the document containing the arbitration

agreement shall be used unless the arbitrators determine otherwise.53 Similarly, the LCIA Rules

provide that the initial language shall be that of the document containing the arbitration clause

unless the parties agree otherwise,54 but after the arbitral tribunal is formed, the arbitrators may

decide the language to be used.55

Generally, the parties should specify the language to be used in the proceedings if they can

agree. If the language selected is not the native language of the client, counsel may wish to provide

both for simultaneous interpretation and for sharing equally the cost of translating testimony and

documents.56

49 Ibidem, at 58. 50 Ibidem, at 55. 51 Bomar Oil v. Enterprise Tunisienne d’Activites Petrolieres, decision of the French Cour de Cassation, 11 October 1989, Cited in Richard Kreindler, Practical Issues in Drafting International Arbitration Clauses, 63 arbitration 47,51 (1997) at 53. 52 ICC Rules art. 16; UNCITRAL Rules art. 17. 53 AAA International Rules art. 14. 54 LCIA Rules art. 17.1. 55 Ibidem, art. 17.3. 56 Bomar Oil v. Enterprise Tunisienne d’Activites Petrolieres, decision of the French Cour de Cassation, 11 October 1989, Cited in Richard Kreindler, Practical Issues in Drafting International Arbitration Clauses, 63 arbitration 47,51 (1997) at 52; Stephen Bond, How to Draft an Arbitration Clause (Revisited), 1 ICC Int’l. Ct. Arb. Bull. 14 (Dec. 1990) at 20.

28

e. Authorization for a court to enter judgment

The Second Circuit Court of Appeals in the U.S. held, in the early 1970's, that in the absence

of a clause that a court may enter judgment on an arbitral award, courts may not do so.57 Later courts

have softened the impact of Varley v. Tarrytown by holding that consent to entry of judgment may

be implied by the conduct of the parties. A reference that the award would be “final” was heavily

relied upon in one case to authorize entry of judgment upon the award.

In the wake of Varley v. Tarrytown, the AAA Commercial Arbitration Rules were amended

to provide that parties adopting such rules were deemed to have agreed that judgment may be

entered on the award.58 Nevertheless, if enforcement may be required in the U.S., it is important that

parties include an entry-of-judgment provision in their arbitration clause.

2. General clauses

General clauses represent perhaps the most common range of arbitral provisions for

substantial transactions. They are more involved than basic clauses, including the provisions

outlined above and certain optional provisions that are useful, relatively low risk and not

uncommon. Beyond the basic provisions, the optional provisions sometimes inserted in a general

clause include helpful clauses and unusual clauses.

General clauses are typically used in larger commercial transactions such as projects, when a

few provisions beyond the basic clause are necessary (but all potential provisions are not needed),

when the parties are unwilling to risk including provisions that could either derogate from

institutional rules or violate mandatory rules of the applicable law (and they do not have the time or

resources to research the issue), or when an agreement cannot be reached on additional provisions.

Examples of general clauses may be found in the energy industry in joint operating, drilling, natural

gas supply, and power plant construction agreements.

2.1. Helpful clauses

a. Qualifications and conduct of the arbitrators

The Arbitration Rules of the AAA, the LCIA and UNCITRAL require that all arbitrators be

impartial and independent.59 The ICC Rules only expressly require independence.60 The ICSID

57 Varley v. Tarrytown Ass., Inc., 477 F.2d 208, 210 (2d Cir. 1973). 58 AAA Commercial Arbitration Rules, art. 47(c) (eff. July 1, 1996). 59 AAA International Rules art. 7.1; LCIA Rules art. 5.2; UNCITRAL Rules art. 10(1). 60 ICC Rules art. 7(1), but an arbitrator may be challenged for "lack of independence or otherwise." Id. art.

29

Rules require a statement from the arbitrator that he will judge fairly between the parties and will

not accept instruction or compensation from them.61

In light of these differing tests, a party may wish to insert a clause requiring that all

arbitrators be impartial, which is the key test,62 and may even wish to require all arbitrators to

declare that they can and shall decide the case impartially. As added insurance, the arbitration clause

may adopt the IBA’s Rules of Ethics for International Arbitrators, and require that all arbitrators

comply with these rules of ethics.

Although covered to some extent in the IBA Rules, the parties may wish to insure the

complete independence of the arbitrators by requiring that they not have any financial interest in the

dispute or any financial dependence on the parties, directly or indirectly. This independence may

also take the form of prohibiting the sole or presiding arbitrator or all arbitrators from being of the

same nationality as any of the parties or their parent companies.

In addition, parties may in some cases desire to include a provision requiring certain

expertise in the arbitrators. If this is included, it should be broadly drafted unless the arbitration

clause is limited to certain types of well-defined disputes. Such a clause may require that all

arbitrators be actively involved in the trade, be knowledgeable and experienced in certain type of

business or be knowledgeable of the law relating to that business. A provision that is too specific as

to the qualifications of the arbitrators may fail if arbitrators with those qualifications cannot be

found.63

b. Interim measures

Granting interim measures can be an important issue if immediate relief is necessary, for

example, to prevent spoilage of perishable goods or to protect intellectual property during the

pendency of a dispute.

11(1) (emphasis added). 61 ICSID Rules of Procedure for Arbitration Proceedings Rule 6(2). 62 English Arbitration Act 1996, Chapters 1(a) and 24(1)(a) (June 17, 1996); Departmental Advisory Committee on Arbitration Law (Chairman, The Rt. Hon. Lord Justice Saville), Report on the Arbitration Bill 101-04 (February 1996), cited in R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas. 63 Supra note 32.

30

Some arbitral rules and some countries’ laws expressly allow the arbitrators to issue interim

measures (in the nature, for example, of an injunction or an order to preserve property),64 while

other countries’ laws do not allow arbitrators to issue such orders.65 Because of the differing rules

and laws, the parties may wish to empower the arbitral tribunal with such authority, or deny it such

power, in their arbitration clause.

Courts outside the country where the arbitration is to take place will sometimes refuse to

decide issues of interim measures, leaving such questions either to the arbitral panel or to the courts

of the arbitral venue.66

One method of dealing with this issue, at least in part, is to adopt the ICC’s Pre-Arbitral

Referee Procedure, which requires a written agreement.67 In accordance with these rules, the

Chairman of the ICC International Court of Arbitration will appoint a referee in the shortest time

possible after the time period for filing an answer, which is required within eight days from receipt

of the request.68 The referee is empowered to issue certain provisional orders such as orders for

conservatory measures, restoration, payments, signing or delivery of documents, and preserving or

establishing evidence.69 The referee’s order does not pre-judge the case or bind a later authority, but

it is binding on the parties until changed by the arbitral tribunal or a court.70 The order is not

enforceable as an arbitral award, but non-compliance may be sanctioned by the arbitral tribunal.71

c. Waiver of appeal

This topic is related to the issue of the final and binding nature of the award, which is

discussed above. The provisions of the ICC and LCIA Rules deeming a waiver of any form of

64 ICC Rules art. 23; AAA International Rules art. 21; LCIA Rules art. 25; UNCITRAL Rules art. 26; UNCITRAL Model Law on International Commercial Arbitration art. 17. 65 1996 English Arbitration Act § 39(4) (arbitrators have no power to order provisional relief unless the parties confer such power on them). 66 Channel Tunnel Group, Ltd. v. Balfour Beatty Construction, Ltd., [H.L. 1993] A.C. 334, [1993] 1 All E.R. 664, [1993] 1 Lloyd’s Rep. 291, XIX Y.B. Com. Arb. 736, 745 (1994) (English courts may not grant interim injunction in respect of a foreign arbitration, but may grant pre-arbitration injunction); David Wagoner, Interim Relief in International Arbitration, 62 Arbitration 131, 134 (1996). Trade Fortune, Inc. v. Amalgamated Mill Supplies, Ltd., (1994) 89 BCLR (2d) 132; Interbulk (Hong Kong), Ltd. v. Safe Rich Industries, Ltd., (1992) 2 HKLR 185, cited in R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas, at 42. 67 ICC Pre-Arbitral Referee Procedure Rules art. 3.1. 68 Ibidem, articles 3.4, 4.2. 69 Ibidem, art. 2.1. 70 Ibidem, art. 6.3. 71 Martin Hunter, Jan Paulsson, Nigel Rawding, & Alan Redfern, The Freshfields Guide to Arbitration & ADR: Clauses in International Contracts at 50 (Kluwer 1993) (“Freshfields Guide”).

31

recourse against an award,72 and an arbitration clause provision waiving the right to appeal the

award, constitute an “exclusion agreement,”73 which excludes review of an arbitral award on the

merits by a national court. In England, the incorporation of an institution’s arbitral rules, which

provide for the waiver of recourse from an arbitral award, is sufficient to prevent judicial review of

the award,74 while in other countries such as Switzerland an exclusion agreement must be express.75

The reason for this difference may be found in the fact that English courts have broad powers to

review an arbitral award for errors of English law, when that law is applicable,76 while in

Switzerland and other countries, review of an award is limited to the few defenses provided in the

New York Convention.77 Thus, the scope of the review conducted in Switzerland is much more

limited than that available in England.

2.2. Unusual clauses

a. Costs and attorneys’ fees

Costs, such as arbitrators’ fees and expenses and, if applicable, institutional fees and

attorneys’ fees can be substantial in international arbitration. It is rarely possible to predict how the

arbitral tribunal will allocate these costs and fees, if at all, at the end of the proceedings. Domestic

approaches diverge widely, from no allocation at all to full recovery by the prevailing party, and

arbitrators have wide discretion in this respect.

Given these uncertainties, the parties may wish to address the issue of costs and fees in their

arbitration clause, bearing in mind that such provisions may not be enforceable in certain

jurisdictions. The parties have several options. They may merely confirm that the arbitrators can

allocate costs and fees as they see fit. They may provide that the arbitrators make no allocation of

costs and fees. They may try to insure that costs and fees are allocated to the “winner” or the

72 ICC Rules art. 28(6); LCIA Rules at. 26.9. AB Gotaverken v. General National Maritime Transport Co., 6 Y.B. Com. Arb. 237, 240-41 (1981) (Swedish Supreme Court held ICC award binding and enforceable under ICC Rules art. 24 despite challenge to the award in French courts), cited in R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas, at 43. 73 Piero Bernardini, The Arbitration Clause of an International Contract, 9 J.Int’l. Arb. 45,47 (1992) at 59. 74 Arab-African Energy Corp. v. Olieprodukten Nederland, N.V., [1983] 2 Lloyd's L. R. 419 (Q.B. Com. Ct.); Marine Contractors, Inc. v. Shell Petroleum Dev. Co. of Nigeria, Ltd., [1984] 2 Lloyd’s Rep. 27, cited in R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas, at 43. 75 Swiss Federal Private International Law Act art. 192(1). See also Clear Star, Ltd. v. Centrala Morska Importowo-Eksportova “Centromor” and Centromor, S.A., cited in Bernardini, at 59. 76 1996 English Arbitration Act § 69. 77 Swiss Federal Private International Law Act art. 190.

32

“prevailing party” on the merits, or that the arbitrators are to allocate costs and fees in proportion to

success or failure. The parties should avoid absolute language (“shall”) in drafting such a clause, as

the identification of the “winner” or the “prevailing party” may be difficult and the clause may

needlessly constraint the arbitrators in their allocation of costs and fees.

The parties may also wish to consider whether to allow compensation for the time spent by

management, in-house counsel, experts and witnesses, as this issue is often uncertain in international

arbitration.78

b. Expert determination

In lieu of arbitration for all controversies, parties may desire to provide for an expert

determination for certain types of disputes that require particular expertise. Historically, an expert

determination typically involved a valuation, such as a certifier in construction contracts

determining the amount of an interim payment to be made to a contractor.79

The independent expert has the duty of investigation to discover the facts, details of relevant

comparable transactions and all other information relevant to his valuation (though he may receive

information regarding these matters from the parties). The independent expert bases his decision

upon his knowledge and investigations, but he may be required by the lease to receive submissions

from the parties. There is no legislation governing procedure for the independent expert and he must

therefore settle his own contract with the parties. The independent expert has no power to compel

disclosure of documents or the attendance of witnesses. The independent expert has a duty to use his

own knowledge and experience in arriving at his decision. However, during the course of his

investigation the independent expert may seek routine administrative or other assistance from any

other person. This is always provided that he is in a position to vouch for the accuracy with which

such tasks are carried out. Unless required by the lease the independent expert will generally make

his determination without detailed accompanying reasons. An independent expert has no power to

make any order as to his fees, or as to the costs of a party, unless such a power is conferred upon

him by the lease or by agreement between the parties. There is no procedure for formal

determination of an independent expert’s fees. There is no right of appeal against the determination

78 IBA Guidelines for Drafting International Arbitration Clauses, Adopted by a resolution of the IBA Council, 7 Octoer 2010, International Bar Association, III. Drafting Guidelines for Optional Elements, Option 4: Allocation of costs and fees. 79 Doug Jones, Is Expert Determination a ‘Final and Binding’ Alternative?, 63 Arbitration 213, 213-14 (1997).

33

of an independent expert, though in some very limited circumstances the Court may set it aside. The

independent expert is liable in damages for any losses sustained by a party through his negligence.

This is so notwithstanding that the Court will not interfere with a final and binding determination

that he has made.

Unlike the arbitrator who acts like a judge, an independent expert however is simply acting

as a valuer, a recognised professional in his field whether this be shops, offices, factories or indeed

public houses. The independent expert must use his professional expertise in assessing the rental

value of the premises concerned. In doing so the information put forward to him by the parties may

be of assistance, but he is not bound by it in any way, and the rent he decides may bear little or at

least limited relationship to the figures advanced by the parties. Independent expert determination is

generally to be preferred where the parties want a quicker and more cost effective means of

resolving their dispute.80

c. Interest

The authority of arbitrators to award interest is often addressed only generally, or sometimes not at

all, in governing legislation. The UNCITRAL Model Law, for example, contains no provisions

regarding interest, nor does the US Federal Arbitration Act (FAA), the Swiss Law on Private

International Law, or the French New Code of Civil Procedure. Similarly, the UNCITRAL

Arbitration Rules and The Rules of Arbitration of the International Chamber of Commerce (ICC

Rules) are silent on the subject of interest. The English Arbitration Act of 1996 is a notable

exception.

Although some tribunals have awarded interest on the basis of general principles of law81 or

principles of reasonableness and fairness,82 if the parties want an award to bear interest, they should

expressly authorize it in their agreement,83 especially since some tribunals have refused to award

interest.84 Arbitrators generally enforce clauses authorizing an award of interest.85 Interest may be an

80 Paul G Newby Bsc (Hons) Frics Mci.Arb Abii, The Differences Between Independent Expert Determination And Arbitration And Rents Set By The Court, June 2007. 81 John Gotanda, Supplemental Damages in Private International Law § 6.4 at 50 (Kluwer 1998). 82 Ibidem, at 51. 83 Nicholas Ulmer, Drafting the International Arbitration Clause, 20 Int’l Law. 1335, 1337 (1986), at 1347. 84 Supra note 69, at 53. 85 Ibidem, at 45.

34

important part of any award, particularly if there is a significant delay between the event giving rise

to the claim and the arbitration award.86

The general authority of arbitrators in international arbitration to award interest has long

been well-established. It is also generally well-accepted that arbitrators should look to the

substantive law governing the claims when deciding whether interest should be awarded, for what

period of time, and at what rate. This is because in most jurisdictions interest for the pre-judgment

period is regarded as a matter of substantive law. However, there remains substantial debate over the

methods used by arbitrators in awarding interest, particularly regarding the use of simple or

compound interest and how the rate of interest should be determined.87

It has also been argued that the power of an arbitral tribunal to award interest, even if

allowed under the substantive law of the contract, may be limited by mandatory laws in effect at the

arbitral seat. That may be the case where the seat is located in certain Middle Eastern countries,

where any award of interest may be forbidden by the law of the forum. While these are important

issues, the focus of this article is the judicial recognition and enforcement (or rejection) of an

arbitrator’s awards of interest at the enforcement stage.

d. The currency of the award

When damages may be specified in different currencies, there are three issues that may

arise: (1) the currency in which the award should be stated, (2) the date for converting from the

currency in which damages are calculated into the currency in which the award is rendered (in

situations in which such a conversion is necessary) and (3) the exchange rate that should be used for

the conversion, when necessary.88

The dates that may be selected for conversion include: (1) the date of the breach of the

contract, (2) the date of issuance of the award or (3) the date on which the award is ordered to be

paid.89 The most common dates are the breach date and the award date.90

86 Ibidem, at 11. 87 Steven H. Reisberg, Kristin M. Pauley, An Arbitrator’s Authority to Award Interest on an Award until “Date of Payment”: Problems and Limitations, [2013] Int.A.L.R., Issue 1 © 2013 Thomson Reuters (Professional) UK Limited and Contributors, at 26. 88 Ibidem, at 127. 89 Ibidem, at 94. 90 Ibidem, at 127.

35

With respect to the exchange rate, there are also three possibilities that have been used by

arbitral tribunals: (1) the official rate, (2) the market rate and (3) the published rate.91 The published

rates used include those found in the New York Times, the Wall Street Journal and the International

Financial Statistics of the International Monetary Fund.92

Instead of leaving the decision entirely to the arbitrators, the parties may decide these issues

in the contract. In fact, an award may be easier to enforce if the arbitrators are required to state it in a

single, specified currency.93 U.S. dollars are especially popular for this purpose because the

exchange rate is easily ascertainable, institutions like the ICC calculate costs in this currency and

many parties’ assets are denominated in U.S. dollars, thus reducing the risks of currency

fluctuations.94

e. Exclusion of punitive and consequential damages

Historically, international arbitral panels have refused to award punitive damages.95 A few

arbitral panels of the Society of Maritime Arbitrators have recently awarded punitive damages,

however, in the limited situation of a wrongful conversion of a cargo. The author has also recently

seen clauses prohibiting an award of punitive damages, except when one party has been found to

engage in delaying actions or dilatory tactics. Such a clause must be taken to mean that punitive

damages are authorized when the legal basis for punitive damages are proved and delaying tactics

are present since delaying tactics alone cannot constitute a sufficient basis for an award of punitive

damages. Because of the Mastrobuono case, parties may wish to include a provision expressly

prohibiting an award of punitive damages. This may be particularly appropriate when U.S. parties

are involved or when U.S. law governs the contract. Similarly, parties may wish to prohibit the

arbitrators from awarding consequential or incidental damages.96

3. Complex clauses

Complex clauses are those that are more involved still, including some unusual provisions in

addition to the basics. These clauses must be carefully tailored to prevent inconsistencies and

meticulously researched to prevent provisions that might invalidate the clause in a given

91 Ibidem, at 140 92 Ibidem, at 140. 93 Supra note 71, at 1345-46. 94 Ibidem, at 1346. 95 Supra note 80. 96 R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas, at 74.

36

jurisdiction. Some of these clauses are often unnecessary or even undesirable in many situations or

to many parties, but in a given case, they may be particularly important. Beyond those included in

basic and general clauses, the provisions that may be included in a complex clause consist of related

clauses and multi-tiered dispute resolution clauses.

Complex clauses may be used in major projects involving large amounts of money, in

transactions with governments or state-owned companies, in transactions in which there is a

significant risk of breach of contract by one party, or when the arbitral clause represents a

particularly important segment of the contract because litigation or other dispute resolution methods

are not viable alternatives – and may even be repugnant – at least to one of the parties. Complex

clauses are sometimes inserted in major investment agreements with host governments.

3.1. Related clauses

a. Notice

Under the New York and Convention, one of the few defenses to the enforcement of an

award is the failure to receive proper notice of the appointment of an arbitrator or notice of the

arbitration proceedings, or when a party is unable to present his case, perhaps because of a failure to

receive notice of the hearing. It can prove very helpful in the event of an arbitration proceeding to

include in the contract a notice provision, which specifies the name or title of the person to be given

notice in the event of a dispute and the address to which the notice is to be sent. If the notice

provision is not included within the arbitration clause, it may be helpful for the arbitration clause to

state that any notices to be given involving arbitration may be provided to the person at the address

specified in the notice provision of the contract. A notice provision may prevent disputes over

service issues (request for arbitration) and due process concerns (notice of the hearing). The issue of

notice may arise when an award is given by default after a party fails to appear for the arbitration

hearing.97

b. Confidentiality

Although confidentiality is often cited as one of the primary advantages of arbitration,98 most

of the best known institutions’ arbitration rules do not require the parties to maintain the

confidentiality of the arbitral proceedings, the award or any documents exchanged in, or created for,

97 Ibidem, at 59. 98 Jan Paulsson & Nigel Rawding, The Trouble with Confidentiality, 5 ICC Int'l Ct. Arb. Bull. 48 (1994).

37

the arbitration proceeding.99 The arbitration rules of some institutions do impose such a

confidentiality requirement upon the administrator and arbitrators.100 With the notable exception of

England, whose courts have imposed an implied obligation of confidentiality,101 most countries’

laws impose no confidentiality requirements upon the parties to the arbitration.102

The information that the parties may desire to maintain as confidential may be categorized as

follows:103 1) The existence of the arbitral proceeding; 2) Contemporaneous or historical documents

produced or exchanged by the parties; 3) Documents prepared for the arbitration (e.g., briefs and

pleadings); and 4) The arbitral award.

Therefore, if the parties desire that their proceedings, documents and award be maintained as

confidential, they should provide for it in their arbitration clause. If a confidentiality obligation is

provided in the clause, it should include an exception for situations in which it is necessary to go to

court either to compel arbitration or to enforce the award. Other exceptions should be provided for

disclosure when required by law or when required to enforce other rights or defend other

proceedings in situations in which the fact of the award is a necessary element of the claim or

defense.104

99 AMCO Asia Corp. v. Indonesia, ICSID ARB/81/1 (award dated 1 February 1994); LCIA Rules art. 30.1; WIPO Rules arts. 73-75; Center for Public Resources (CPR) Non-Administered Arbitration Rules, Rule 16, cited in R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas, at 45. 100 AAA International Rules art. 34; WIPO Arbitration Rules art. 76. 101 Insurance Co. & Lloyd's Syndicate, 10(1) Mealey's Int'l Arb. R. 9 (Jan. 1995) (U.K. Queen's Bench Div. (Commercial Court) October 27, 1994); Hassneh Ins. Co. v. Steuart, [1993] 2 Lloyd's Rep. 243 (Q.B.); Dolling-Baker v. Merrott [1990] 1 W.L.R. 1205, [1991] 2 All ER 890 (U.K. Court of Appeal (Civil Div.) March 21, 1990), cited in R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas, at 45. 102 Esso Australia Resources Ltd. v. Plowman, FMC. No. 95/014 (High Ct. Austr. 1995); Commonwealth of Australia v. Cockatoo Dockyard PTY, Ltd., No. CA 40713 of 1994, No. CL 55049 of 1994, 10(7) Mealey's Int'l Arb. R. 3 (July 1995) (Court of Appeal of Supreme Court of New South Wales, June 27, 1995); U.S. v. Panhandle Eastern Corp., 118 F.R.D. 346, 349-50 (D. Del. 1988); Galleon Syndicate Corp. v. Pan Atlantic Group, Inc., 6 Mealey’s Lit. R.: Reinsurance 73, 74 (N.Y. App. Div., Dept. (Feb. 13, 1996), cited in R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas, at 45. 103 Supra note 96, at 45. 104 Insurance Co. & Lloyd’s Syndicate, 10(1) Mealey’s Int’l Arb. R. 9 (Jan 1995), U.K. Queen’s Bench Div. (Commercial Court) Oct. 27. 1994, cited in R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King & Spalding, Houston, Texas, at 46.

38

c. Discovery

Litigation in U.S. federal and state courts is characterized by broad, pre-trial discovery

obtained through document production, interrogatories and depositions (usually oral, but

occasionally conducted in writing). In England, document discovery is permitted, but not

depositions.105

Parties may choose arbitration in part to avoid these procedures, which are often perceived as

time consuming and expensive. Parties from civil law countries, who are often accustomed to little

or no discovery, are likely to hold this perception. There are obvious cost advantages to limiting

discovery, but if parties want to insure they will have access to relevant evidence, they should

provide for it in their clause.106

The International Bar Association has adopted Supplementary Rules Governing the

Presentation and Reception of Evidence in International Commercial Arbitration. These rules do not

automatically apply to an arbitration proceeding; they must be adopted by either the parties or the

arbitrators. When applicable, they provide for limited production of documents, falling into two

categories: (1) documents to be relied upon by the parties at the arbitral hearing, and (2) documents

that can be identified with specificity and that are exchanged with third parties (e.g.,

correspondence).107

It is not common for arbitration clauses in international agreements to address whether

discovery will be allowed (and if so, in what form), or how evidence will be received by the

tribunal. Nonetheless, contracts occasionally address these issues, and parties may desire to provide

in the arbitration clause that the tribunal will allow discovery, and may even dictate the discovery

that will be permitted and the procedures to be used. The types of discovery that may be specified in

the arbitral clause include the following: (1) documents and information contractually required to be

provided; (2) audits of books and records; (3) documents to be relied upon by the parties in the

arbitral proceeding; (4) documents exchanged with third parties; (5) documents in the care, custody

or control of the parties; (6) sworn oral depositions or depositions by written questions; (7) written

interrogatories; (8) inspection of premises; and (9) interviews of employees.108

105 Supra note 96, at 46. 106 Ibidem. 107 Ibidem, at 47. 108 Ibidem.

39

Some clauses explicitly restrict discovery by providing it shall be limited and handled

expeditiously, and shall not include discovery procedures available in litigation before courts. In at

least one clause drafted by the author, however, a state-owned oil company agreed to a broad

discovery clause that included all of the types of discovery listed above. The discovery provision

was limited though to environmental issues.109

Parties may also effectively provide for discovery by including contractual provisions

mandating that one party periodically provide the other with certain information or by providing a

right to audit. Provisions such as these are often found in joint operating agreements in the energy

industry.110

d. Multi-party arbitration

When there are more than two parties to a contract, the arbitration agreement should

anticipate a dispute involving more than two parties. This may arise where the position of the parties

is polarized, e.g. two of the parties are contracting from the same perspective, such as two investors,

or with a genuinely tri-partite or more situation. These situations can give rise to additional

complications, especially with respect to the appointment of arbitrators and ensuring the procedure

to be followed allows all the parties a fair opportunity to present its case. These can be regulated in

the arbitration agreement.

Multiparty arrangements arise typically in joint venture agreements where two or more

parties establish the joint venture, a new and separate party in itself. When a dispute arises,

especially if it involves the actions or rights of the joint venture, or the interpretation of the

corporate instruments of the joint venture, it will often be necessary for the joint venture to be party

to the arbitration. In this way it will be bound by the award. The joint venture will generally need

separate legal representation and may have a different perspective to both parties on the issues in

dispute.

Another example is a consortium agreement, where several parties join together in common

purpose to contract with another party. The consortium agreement, and the arbitration clause that is

in it, binds all of the consortium members equally. This is usual in certain financial transactions. In

such a contract it is necessary to ensure that even though the lead member of the consortium might

alone be party to an arbitration agreement with the other party, all the consortium members are 109 Ibidem, at 48. 110 Ibidem.

40

bound by the arbitration agreement and the arbitrator’s award. There may however be situations

where one needs to protect the rights of individual consortium members including allowing

participation in the arbitration.

For the appointment of arbitrators in multiparty situations, the preferred mechanism is for the

multiple claimants or multiple respondents to each nominate one arbitrator, and then for the

chairman to be appointed either by agreement of all the parties or by an independent appointing

authority. The alternative is for all of the arbitrators to be appointed by the appointing authority.

This is the solution adopted by the ICC and the LCIA after the Dutco case.111 It is impractical for

each party to appoint one arbitrator, even with just three parties to the arbitration, because this may

result in an unwieldy number of arbitrators. More importantly, it could lead to an imbalance in the

tribunal if there were more respondents than claimants. In this type of scenario parties should clearly

provide how the arbitral tribunal is to be appointed. If they are to use an appointing authority, they

should specify the essential qualifications sought in the arbitrators.

The more complicated problem is how to manage the procedure. In a two party arbitration,

there is a sequence of claimant and respondent in written and oral submissions. With three parties, it

may not be appropriate for both claimants or both respondents to make submissions at the same

time. Equally, at the hearing, it will be necessary for each party to have its own representation and

time to present its case. Invariably even the multiple claimants and respondents will not have a

common position and may well be adverse to one another. It is difficult to determine in advance

exactly what the procedure should be. Therefore it is generally appropriate to leave issues for the

tribunal to deal with after the case arises unless the nature of the case is such as to leave the situation

clear.

A typical example is a three sided contract between the supplier of goods, the purchaser of

goods and the bank which provides a trading facility to its client and equally a guarantee to the

client’s supplier. If an issue arises concerning liability, the purchaser might well argue that the goods

were defective and therefore payment was not due. The issue is when the bank should become

involved in the arbitration to defend its position in the event that liability is upheld by the tribunal.

This should be regulated in the arbitration agreement, either by allowing the bank to intervene as a

111 ICC Rules, art. 10; LCIA art. 8; Cour de Cassation, 7 January 1992, Siemens AG and BKMI Industrienlagen GmbH v. Dutco Construction Company (Dubai). Rev. Arb. 470 (1992), cited in Julian D. M. Lew, Loukas A. Mistelis, Stefan Kroll, Comparative International Commercial Arbitration, Kluwer Law International, 2003, at 180.

41

party at any time but to allow full information on the passage of the arbitration, or to provide for a

subsequent arbitration to determine the bank’s liability separately unless the arbitration award is to

automatically bind the bank or guarantor.

One further issue which may need to be regulated is sub-contractors, especially in

construction contracts. This occurs where the main contractor wishes to involve a sub-contractor in

an arbitration because aspects of the subcontract, e.g. quality of work, prorogation, pricing, are in

issue in the arbitration between employer and contractor. To save time and expense it may well be

appropriate to join the sub-contract, or to consolidate separate proceedings between the contractor

and the sub-contractor. This can only be done if agreed at the time or specifically provided for in the

arbitration agreement. In the latter case the right of the contractor to require the sub-contractor to

join the arbitration with the employer must be clearly stated. In this case, where the subcontractor

has a separate position to the contractor, it I necessary to ensure procedural equality for the

subcontractor including its right to see the submissions, evidence and other documents relied on by

the employer. The contractor may be unwilling to agree this because it can find itself the “jam in the

sandwich”, squeezed and accused by the employer and sub-contractor.

e. Consolidation of arbitral proceedings

Consolidation is a procedural device which denotes the process whereby two or more claims

are united into a single procedure concerning all parties and all disputes. Consolidation appears in

two different situations, either as de facto consolidation of claims arising under multiple contracts

between the parties, or consolidation of “related arbitration proceedings”. In the case of related

arbitration proceedings, it may prove beneficial to one or more parties to hear all disputes in one

hearing, where the disputes involve a multiplicity of parties and contracts. This can be contrasted

with “de facto consolidation” where each individual arbitration is heard by the same panel of

arbitrators or with a similar procedure112 in which two or more arbitrations are heard simultaneously

by the same panel of arbitrators but an award is rendered separately for each individual proceeding.

In situations when consolidation of claims may be relevant, it must be determined whether

such a course of action is permissible under the relevant legal regime and if so, whether it is

appropriate in the given circumstances. The “holistic” approach of combining all connected two-

party, one-claim case into one case is based on the assumption that each aspect of an event affects

112 Catherine Yannaca-Small, Consolidation of Claims: A Promising Avenue for Investment Arbitration?, International Investment Perspectives, 2006 Edition, at 227.

42

another. Thus, each procedurally separate claim has an effect on every other claim because they are

all connected. Adjudicating one claim at a time does not take into account the remaining claims.

Influences exerted by the other claims will not be perceptible, potentially resulting in the arbitrators

missing crucial details or not grasping the bigger picture. While missing the bigger picture may

result in an unjust result, the alternative of considering every aspect of the whole event for each

claim individually is not only wasteful, but may lead to inconsistent results. Hearing all claims at the

same time in one proceeding appears to be an adequate and efficient solution.113

Consolidation is not an end itself. It is a tool in the service of efficiency, fairness, and

avoidance of contradictory judgments.114 There are a number of situations in which cases are begun

separately despite the availability of other procedural tools, allowing for claims and parties to be

added to the traditional two-party, one-claim case. Consolidation is distinguishable from these other

procedural tools because the unification takes place after two separate cases have been filed.115

Usually consolidation is not a necessity.116 However, when rights or obligations are

indivisible and the other holder of the right or obligation is not part of the proceeding and

furthermore cannot be added by consolidation or other means, the case will have to be dismissed.

Under such circumstances, consolidation would be necessary for the case to continue. Without

consolidation, both cases would simply be continued as independent and, more importantly, self-

contained matters. Lack of consolidation does not prevent either the individual disputes or the larger

dispute from coming to a conclusion. Each individual case is complete and capable of independent

adjudication. The various concepts of necessary parties, without whom a case cannot be decided due

to substantive or procedural law and must therefore be dismissed, address the question of joinder,

not consolidation. Although it may be possible to use consolidation to affect joinder, this is not the

true nature of consolidation. Ordinarily, joinder would have to be performed and the second case

dismissed for lis pendens reasons. Claims contained in a previously filed case cannot be added to

another case by the use of joinder or other procedural tools due to the prohibition of lis pendens.117

113 Lara M. Pair, Paul Frankenstein, The New ICC Rule on Consolidation: Progress or Change? Emory International Law Review, January 2012, at 1063. 114 Ibidem. 115 Roger S. Haydock, Mediation and Arbitration for Now and the Future, The Arbitration Process 1, 2002, cited in Lara M. Pair, Paul Frankenstein, The New ICC Rule on Consolidation: Progress or Change? Emory International Law Review, January 2012, at 1064. 116 Ibidem. 117 Ibidem.

43

In situations where consolidations of claims is possible, it remains to be determined whether

such a course of action is appropriate in the circumstances of the case at hand. To make this

determination, a balancing of the advantages and disadvantages of consolidation of claims as

compared to separate proceedings is undertaken.

Arguments in favor of consolidation of claims include: 1) the increase in the efficiency of the

arbitration; and 2) avoidance of conflicting or contradictory awards.118

On the other hand, the arguments against consolidation made by objecting parties and some

commentators focus on: 1) lack of the parties’ consent; 2) non-participation in the appointment of

the arbitral tribunal; 3) potential infringement of a party’s substantive rights; and 4) apportionment

of arbitral fees and other costs.

Consolidation of claims in investment arbitration and construction arbitration is a more

recent phenomenon. The need for consolidation in investment arbitration arises when there are

multiple arbitration proceedings filed with common questions of law or fact which raise the

possibility of inconsistent or even conflicting awards. In this context, it is often raised when there

are two or more claims arising from the same governmental measure.

As construction disputes often involve more than two parties, it is common for an employer

to enter into a construction contract with a main contractor, who then sub-contracts different parts of

the works to a number of subcontractors. The result is that multiple, interconnected construction

contracts are in place between various different parties on the project. In the event of a dispute, there

may be many potential clauses of action under the various contracts. A single dispute may involve

the employer, the contractor and a number of subcontractors, suppliers and consultants.119 Where

some or all of the contracts contain an arbitration agreement, the tribunal can consolidate all the

related claims into the same proceedings subject to the parties’ consent only.

f. Split clauses

Split clauses provide for one party to have the option to have the option to arbitrate or

litigate, while the other can only litigate. Sometimes these clauses can be a good choice, but they are

118 Julie C. Chiu, Consolidation of Arbitral Proceedings and International Commercial Arbitration (1990), 7:2 Journal of International Arbitration at 53. 119 The issues of consolidation in construction arbitration, A Lexis®PSL document produced in partnership with Mayer Brown International LLP, October 2012.

44

not legally valid in all jurisdictions, as for example, China. It is recommended for the parties to

previously check where any resulting award may have to be enforced.

The parties may draft a broad-form-clause but then carve out certain types of disputes such

as intellectual property claims that they do not want to be arbitrable, or they may craft a clause

tailored to include only narrowly-specified types of disputes. A variation of this provides for

litigation of a certain category of disputes, but empowers one party to elect to have those disputes

resolved by arbitration.120 If this variation is chosen, the process for making the election should be

specified.121 Another variation is to provide that one party’s claims must be arbitrated, while the

other party may litigate its claims.

A third variation is referred to in England as Scott v. Avery clauses. These provide either

that no litigation shall be filed on the issues subject to litigation until an award has been issued on

the arbitrable issues, making the completion of arbitration of some issues a condition precedent to

litigation of others, or that the respondent’s sole obligation will be to pay the pecuniary sum

awarded in arbitration.122 These provisions are sometimes found in insurance contracts in which

courts may be authorized to decide liability issues, while arbitrators are empowered to rule on the

damage claims.123

g. Governing law

While the choice of the law to be applied by the arbitrators to determine the substantive

issues before them is not an element necessary for the validity of an arbitration clause, it is certainly

desirable for the parties to agree upon the applicable law in the arbitration clause if at all possible.

Failure to do so is a significant factor in increasing the time and cost of an arbitration. Moreover, the

decision of the arbitral tribunal of the matter, for it is an issue to be decided by the arbitrators, even

if institutional arbitration is used, may bring an unpleasant surprise to one of the parties.124

In international arbitration it is possible that four different laws govern the contract and the

consequential arbitration in the four levels of the proceedings. The four levels are (1) the proper law

which governs the main contract (2) the proper law which governs the arbitration agreement (3) the

120 Freshfields Guide, supra note 49, at 47. 121 Ibidem. 122 Brian Dewitt & Giles Wingate-Saul, Drafting Arbitration Clauses, 62 Arbitration 39, 44 (1996), at 42. 123 Ibidem. 124 Supra note 2, at 19.

45

law governing the arbitration proceedings and (4) the law applicable to the reference. In many cases

all the four levels may be governed by either one or two laws.125

The governing law of a contract can be pivotal not only to its formation and validity, but also

to the question of whether disputes arising under or in connection with the contract can be submitted

to arbitration, and what remedies can be awarded by the arbitrators. It is always advisable, therefore,

to specify the governing law when drafting the contract. Where the parties do not select a governing

law, the choice will be made for them by the arbitrators, often by the applicable conflict of law rules

in the seat of the arbitration.

The procedural law in the arbitration is different from the governing law of the contract: this

is the law by which the arbitration will operate. It is possible, but rare in practice, for parties to

specify in the arbitration clause what the procedural law will be for an arbitration arising out of the

contract. Without this being specified, the procedural law is normally assumed to be the law relating

to arbitration in the seat of the arbitration. Indeed, it is not advisable to specify in the arbitration

clause a different procedural law from the procedural law in the seat of the arbitration, since this

may give rise to conflicts that the local courts will have to resolve.

Under the widely-accepted principle of “separability”, an arbitration clause in a contract is

considered to be separate from the contract in which it resides. This means that the arbitration clause

survives termination of the contract and allows any claims arising out of that termination to be

referred to arbitration. It also means that, exceptionally, parties may choose a governing law for the

arbitration clause which differs from the law governing the main contract. It will rarely be desirable

to do so, however, and this is rarely done in practice. It is generally assumed that where no separate

choice of law for the arbitration clause is made, the governing law of the contract as a whole is also

the governing law of the arbitration clause.

h. Equitable principles

Rather than deciding a case strictly on the basis of applicable law, under some

circumstances, an arbitral panel may rule based on equitable principles. Generally, the arbitrators

must be authorized to do so. This is usually accomplished by empowering the arbitrators either to

act as amiable compositeurs or to decide the case ex aequo et bono. The difference between the

authority to act as amiable compositeur and to decide the case ex aequo et bono is that an amiable 125 Ravi Shankar, How to Draft an Effective Arbitration Clause & Arbitration Agreement? E-Book, Law Senate, 2012.

46

compositeur does not have to apply the law strictly, but must still comply with mandatory rules of

law, while arbitrators with the authority to act ex aequo et bono need not apply even mandatory

legal principles, subject only to international public policy.126

Given the confusion, parties are well advised to avoid these expressions and to specify

precisely what authority they are conveying on the arbitrators. The possibilities may be categorized

as follows: (1) The arbitrators may decide the case based on principles of equity and good faith. (2)

The arbitrators may decide the case based on principles of equity, but mandatory rules of law must

be applied. (3) The arbitrators may decide the case based on principles of equity, and applicable law

(including mandatory rules of law) need not be applied. (4) The arbitrators are authorized as the

parties’ agent to settle the parties’ disputes, with the authority to impose a settlement equitable to the

parties.127

i. Written procedure (summary disposition)

Summary disposition is a decision on the merits made before a final hearing, much like

summary judgment or dismissal in common law litigation. It involves a decision on the merits

without a complete exploration of all possible evidence. Rather, the arbitrator makes his or her

decision referring to the pleadings and other documents produced at the initial stage.128

Summary disposition means faster resolution of the dispute and lower costs and related

expenses. If a court can resolve a case through summary judgment within weeks, there is no logic to

enduring years of arbitration without the same remedy for equally meritless cases. Why should a

hopeless claim be allowed to drag on simply because the parties inserted an arbitration clause? The

arbitration clause, possibly adopted to save time in dispute resolution, binds them to arbitrate rather

than litigate.129

If the resolution process extends unnecessarily over several years, users will be left

unsatisfied and quite possibly penniless. As the mantra goes “Justice delayed is justice denied.”

Delays and costs brought by failing to use early disposition evidences a serious deficiency in

126 Christine Lecuyer-Thieffry & Patrick Thieffry, Negotiating Settlement of Disputes Provisions in International Business Contracts: Recent Developments in Arbitration and Other Processes, 45 Bus. Law. 577, 592-93 n.75 (1990) (discussing Swiss law). 127 Supra note 96, at 70. 128 Lauran San Roman Guijarro, Summary Disposition: The Only Way Out is Through? University of Miami Law Review, Vol. 66:879, 18 April 2012. 129 Ibidem.

47

arbitration as a dispute resolution mechanism. Inability to achieve speedy resolution signifies for

some the failure of arbitration itself.130

Of course, summary disposition has shortcomings. The arbitrator’s authority originates from

parties’ agreement; the agreement must guide the arbitrator’s procedural decisions. Summary

disposition in international arbitration is certainly not the norm, but rather the exception. So when

users insert an arbitration clause, they generally expect to be heard in a final hearing as a matter of

custom. The arbitrators must consider this unspoken expectation when determining whether to apply

summary disposition.131

Parties also expect to work through complex matters fully with the arbitrators, whom they

may have selected for his or her specialized knowledge on the subject. A hearing allows for the

development of evidence, the presentation of legal arguments, an opportunity to discuss those

arguments. If an arbitrator were to halt the process at an early stage, the losing party would naturally

feel dissatisfied and skeptical toward the process. Also, arbitrators may be uncomfortable disposing

of a case without sufficient time to become familiar with it and rightly so. Less time in deliberation

means a higher risk of a poorly reasoned decision.132

Arbitration laws typically require that each party have an opportunity to present its case.

Award enforcement is problematic if the court concludes that an early decision denied a party the

opportunity to present its case.

Further, arbitral awards are non-appealable so a party left unsatisfied with a summary

disposition has no right to a review, except the limited review of the enforcing court. The finality of

summary disposition may be difficult to handle, especially when dealing with a complex, high-

dollar dispute that requires meticulous consideration. The consequences of summary disposition in

international arbitration are therefore more serious and arbitrators will be more reluctant to apply

it.133

Common law summary judgment ensures effective management of judicial resources.

National courts must streamline an overwhelming caseload and ensure proper application of

government funds. This justification does not translate to arbitration. Parties pay arbitrators to deal

130 Ibidem. 131 Ibidem. 132 Ibidem. 133 Ibidem.

48

with their dispute in a personalized way and institutional rules often require that the arbitrators

certify that they have adequate time to dedicate to the case.134

Lastly, much like its judicial counterpart, summary disposition in arbitration may not always

have the intended effect. Recalcitrant parties can use requests for disposition to delay the process. It

is simply another layer of time and cost to make bringing a claim more troublesome.135

No institutional rules grant express authority for summary disposition, but many provide that

the arbitrator must to manage the case efficiently, suggesting a duty to dispose of an unmeritorious

case in advance of the final hearing. Most rules also grant broad authority to the arbitrator to decide

procedure, providing power to decide summarily within the bounds of the agreement.

UNCITRAL Model Law jurisdictions apply the UNCITRAL Rules by default if the parties

have not agreed otherwise. The 2010 Rules provide that unless any party requests otherwise, the

arbitrator “shall decide whether to hold such hearings or whether the proceedings shall be conducted

on the basis of documents and other materials.” However, because the parties must consent to

document-based resolution after the dispute has arisen, this measure unlikely to be applied.

When it comes about using summary disposition in international arbitration, there is a fear

that by granting summary disposition, the award will be set aside for lack of procedural fairness. A

few solutions exist to cure the uncertainty. The easiest solution is party agreement. Parties are free to

dispense with an oral hearing by mutual agreement, without danger of set aside. However, after the

dispute has arisen, the parties will not likely agree on whether summary disposition is appropriate.

As a result, an agreement before the dispute arises, usually in drafting the contract, is the most

effective option.136

The parties may either specifically draft language in their arbitration clause or they may

adopt institutional rules that recognize summary disposition. Where the parties have agreed on the

procedure, the “tribunal may (or indeed shall) determine claims on a summary or expedited basis.”

In the absence of evidence of such consent, “arbitrators will be unlikely to endorse the remedy.”

This is especially true when the arbitrator is from a jurisdiction that does not recognize such

134 Ibidem. 135 Ibidem. 136 Ibidem.

49

procedures even in court. Yet, when drafting agreements, the parties’ focus is on the contract and

not what procedures will apply a dispute arises in the distant future.137

j. Adaptation of contracts and gap filling

The adaptation of contracts and gap filling represent two different situations, both of which

are distinct from the typical powers of an arbitrator.138 Unless either agreed by the parties or

permitted by applicable law, at least in some countries arbitrators may not possess the power to

adapt contracts (often long-term agreements) to changed circumstances or to fill gaps that exist in a

contract by adding a new term.139 To the extent they do so, it is likely to be justified as an exercise in

finding and applying the intent of the parties.140 Emphasizing this distinction, the ICC at one time

adopted Rules for Adaptation of Contracts, however, several years ago, the ICC abrogated its Rules

for Adaption of Contracts because of non-use.

3.2. Multi-tiered dispute resolution

A tiered dispute resolution clause involves a series of steps in the overall dispute resolution

process, each designed to handle the dispute if it has not been resolved by the previous step. These

vary from a single step clause which provides for mediation and then arbitration, to a multi-step

clause which provides for a series of direct negotiations followed by mediation if the negotiations

fail and then arbitration.141

If drafted properly, the structure can be very effective but if not, can be used tactically to

delay matters. To avoid this the drafting should ensure that it is clear when one stage ends and

another begins. The common approach is to provide for a structured time scale for when the various

steps are to take place and to make it clear when the time period for each stage ends.142

A tiered clause may be simple and short or may set out a lengthy and detailed process. Short

form ADR Clauses allow the parties to work out and agree the details if and when the dispute arises.

The disadvantage is that the detailed machinery is not settled, and it may be difficult to agree this

later; also the less detailed the form, the less prospect may be of having it enforced by a court. On

the other hand, a long form can contain all the details which will minimize later scope for procedural

137 Ibidem. 138 Supra note 17, at 56. 139 Ibidem, at 182-83 140 Ibidem, at 183. 141 Tiered Dispute Resolution Clauses, Ashurst LLP 2013 Ref: 9093973 January 2013, at 2. 142 Ibidem, at 3.

50

disagreement and may enhance the possibility of a court treating it as enforceable. The

disadvantages, however, are that the details may not necessarily be appropriate to the actual dispute

when it arises and trying to agree detailed dispute resolution provisions in advance, which may

never arise in practice, may not be considered commercially desirable by the parties when entering

into a contract.143

Caution should be exercised against making a tiered clause overly complicated. Some tiered

clauses often provide for different forms of ADR depending on the type of dispute. This approach

runs the risk of disputes falling between the gap and can lead to arguments over what constitutes a

legal dispute. This is best avoided by ensuring that there is a “catch all” provision.

If the parties’ intentions and the procedure to be followed are clearly spelled out in the

clause, the clause can be enforced. Consequently, the parties need to decide whether they want the

mediation stage to be mandatory and draft accordingly. If the tiered clause provides that ADR is a

pre-condition to the agreement to arbitrate, the effect could be to deprive the tribunal of jurisdiction

until the ADR process has been exhausted. This is because the arbitration tribunal derives its

jurisdiction from the parties’ agreement to arbitrate. If the parties do not want the obligation to be

binding, make it clear in the contract that the process is not a pre-condition and does not prevent

either party from commencing arbitration.144

When drafting the ADR clause it is up to the parties to decide whether they wish to specify a

particular ADR procedure or whether they prefer to agree on one as and when a dispute arises. The

reality is that once a dispute has arisen agreement may be difficult to reach so providing for this in

the contract is to be preferred.

It is not recommended that the identity of the neutral or mediator be spelled out in advance,

given the problems it causes if that person becomes unavailable. It is common for tiered clauses to

provide that parties will agree on the choice of mediator and, failing that, for appointment to be

made by an appropriate body. Ensure that the body chosen is capable of appointing a mediator or

expert as, if not, and the parties cannot agree one, recourse may have to be made to the courts at

additional cost.

143 Ibidem. 144 Ibidem, at 3.

51

Tiered clauses should provide a mechanism for a final, binding and enforceable resolution of

the dispute, typically arbitration. Ensure that the usual principles are applied when drafting the

arbitration clause and that they are consistent in their language with the rest of the clause.145

145 Ibidem, at 4.

52

CONCLUSION

The arbitration clause provides an opportunity to tailor the dispute resolution process in the

manner desired by the contracting parties. This opportunity should not be squandered. The drafter

must be careful to include in the arbitration agreement all provisions that will be needed to ensure its

enforceability, as well as the enforceability of any awards that are issued, while still satisfying the

parties’ needs. The arbitration clause is an essential element in providing users with the kind of

arbitration they say they want: one that resolves disputes with a minimum of time and business

disruption and at lowest cost.

In order to produce legal effects and afterwards, be enforceable, arbitration clauses must

satisfy the following conditions:

• The arbitration agreement must be a result of the consent of the parties. This condition is not

met when the consent is corrupted, vitiated or got fraudulently from the other party. This condition

is imposed by the private nature of the arbitration, as an alternative dispute resolution method.

• The parties’ intention to submit any current or future dispute to arbitration and therefore, to

be bound by a subsequent arbitral award must result clearly from the arbitration clause. If the

arbitration clause is ambiguous, equivocal or calls into question the willingness of the parties to

enter into arbitration, it should not produce legal effects.

• The parties entering into an arbitration agreement must have full legal capacity or, if

concluded by representatives, these should be duly authorized and have full powers to conclude an

arbitration agreement which would bound the principals later on. Some legal persons like public

authorities or corporations can conclude an arbitration agreement, commence arbitral proceedings

and proceed with them only by representatives.

• The arbitration agreement must be in writing. In order to satisfy the condition of being “in

writing”, an arbitration clause should not necessarily be printed on paper and signed by the parties.

This condition is also met when the agreement is contained in an exchange of letters, telex,

telegrams, e-mails or other means of telecommunication which provide a record of the agreement, or

arises from an exchange of submissions or statements of claim and defense in which the existence of

the agreement is alleged by one party and not denied by the other.

• The arbitration agreement should make reference to a defined legal relationship, which may

be of contractual or non-contractual nature.

53

• The subject matter to the dispute must be arbitrable. It means that the subject matter must not

be prohibited from being submitted to arbitration under the law at the place of arbitration or under

the law at the place where the enforcement of the arbitration award is sought.

If the above-mentioned conditions are met, there is a high prospect that the final purpose of

an arbitration be fulfilled, namely, that the arbitration agreement be enforced.

54

REFERENCES

1. R. Doak Bishop, A Practical Guide for Drafting International Arbitration Clauses, King &

Spalding, Houston, Texas;

2. Alan Redfern & Martin Hunter, Law & Practice of International Commercial Arbitration (2nd

Ed. 1991);

3. Stephen Bond, How to Draft an Arbitration Clause (Revisited), 1 ICC Int’l. Ct. Arb. Bull. 14

(Dec. 1990);

4. Gary B. Born, International Commercial Arbitration in the United States (1994);

5. Stephen Schwebel, The Validity of an Arbitral Award Rendered by a Truncated Tribunal, 6

ICC Int’l Ct. Arb. Bull. 19, 20 (Nov. 1995);

6. David Rivkin, Keeping Lawyers Out of International Arbitration, 6 Int’l Lit. Q. 4-5 (March

1990);

7. Alan Redfern & Martin Hunter, Law & Practice of International Commercial Arbitration (2nd

Ed. 1991);

8. James Rodner, Arbitration in Venezuela, in ICC International Court of Arbitration Bulletin:

International Commercial Arbitration in Latin America – Special Supplement at 99 (1997);

9. Piero Bernardini, The Arbitration Clause of an International Contract, 9 J.Int’l. Arb. 45,47

(1992);

10. William W. Park, Arbitration of International Contract Disputes, 39 Bus. Law. 1783, 1784

n.2 (1984);

11. Martin Hunter, Jan Paulsson, Nigel Rawding, & Alan Redfern, The Freshfields Guide

to Arbitration & ADR: Clauses in International Contracts at 50 (Kluwer 1993) (“Freshfields

Guide”).

12. Jan Paulsson & Nigel Rawding, The Trouble with Confidentiality, 5 ICC Int'l Ct. Arb. Bull.

48 (1994);

13. Dr. Edward Lestrade, Drafting Arbitration Clauses in International Agreements – a guide for

European lawyers, November 10, 2006.

14. William Laurence Craig, William W. Park, Jan Paulsson, International Chamber of

Commerce Arbitration, 2nd edition 1990;

15. Nicolas C. Ulmer, Drafting International Arbitration Clause in The International Lawyer,

Vol.20, Nr. 4, 1986;

55

16. Stephen R. Bond, How to Draft an Arbitration Clause (Revisited), ICC Int’l Ct. Arb. Bull.

(Dec. 1990);

17. Julian D. M. Lew, Loukas A. Mistelis, Stefan Kroll, Comparative International Commercial

Arbitration, Kluwer Law International, 2003;

18. IBA Guidelines for Drafting International Arbitration Clauses, Adopted by a resolution of

the IBA Council, 7 Octoer 2010, International Bar Association;

19. Ravi Shankar, How to Draft an Effective Arbitration Clause & Arbitration Agreement? E-

Book, Law Senate, 2012;

20. Alexander J. Belohlavek, The legal Nature of International Commercial Arbitration and the

Effects of Conflicts between Legal Cultures, Law of Ukraine/Pravo Ukrajiny, No. 2, pp. 18-31,

April 1, 2011;

21. United Nations Conference on Trade and Development, Dispute Settlement, International

Commercial Arbitration, 5.2 The Arbitration Agreement, New York and Geneva, 2005;

22. Julie C. Chiu, Consolidation of Arbitral Proceedings and International Commercial

Arbitration (1990), 7:2 Journal of International Arbitration;

23. Catherine Yannaca-Small, Consolidation of Claims: A Promising Avenue for Investment

Arbitration?, International Investment Perspectives, 2006 Edition;

24. The issues of consolidation in construction arbitration, A Lexis®PSL document produced in

partnership with Mayer Brown International LLP, October 2012;

25. Brian Dewitt & Giles Wingate-Saul, Drafting Arbitration Clauses, 62 Arbitration 39, 44

(1996);

26. Lara M. Pair, Paul Frankenstein, The New ICC Rule on Consolidation: Progress or Change?

Emory International Law Review, January 2012;

27. Per Sundin and Erik Wernberg, The scope of arbitrability under Swedish law, The European

Arbitration Review, 2007;

28. Laurence Shore, Defining ‘Arbitrability’, The United States vs. the rest of the world, New

York Law Journal, Litigation, Monday, June 15, 2009;

29. John Gotanda, Supplemental Damages in Private International Law § 6.4 (Kluwer 1998);

30. Nicholas Ulmer, Drafting the International Arbitration Clause, 20 Int’l Law. 1335, 1337

(1986);

56

31. Steven H. Reisberg, Kristin M. Pauley, An Arbitrator’s Authority to Award Interest on an

Award until “Date of Payment”: Problems and Limitations, [2013] Int.A.L.R., Issue 1 © 2013

Thomson Reuters (Professional) UK Limited and Contributors.

32. Christoph Schreuer, Consent to Arbitration, 27 February 2007;

33. Andrea M. Steingruber, Consent in International Arbitration, Oxford University Press, 15

March 2012;

34. Jing Wang, International Judicial Practice and the Written Form Requirement for

International Arbitration Agreements, Copyright C 2001 Pacific Rim Law & Policy Journal

Association;

35. Lauran San Roman Guijarro, Summary Disposition: The Only Way Out is Through?

University of Miami Law Review, Vol. 66:879, 18 April 2012;

36. Tiered Dispute Resolution Clauses, Ashurst LLP 2013 Ref: 9093973 January 2013.