Download International Commercial Arbitration

International
Commercial Arbitration
Lec5: The Arbitration Proceedings: Laws to Apply
Readings
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Zhao, Xiu-wen
International Commercial Arbitration Law, 2004,
Chapter 9
Redfern & Hunter,
Law & Practice of International Commercial Arbitration, 2005,
Chapter 2
Law Which May Impact An Arbitration
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Law governing the parties’ capacity to enter into an arbitration
agreement (“personal law”)
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Law governing the arbitration agreement
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Law governing the procedure of the arbitration - the curial law
of the arbitration or the “lex arbitri”
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Law governing the underlying commercial contract (Dicey &
Morris: “proper law”)
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Law governing the supportive and enforcement measures
Basis of Determination of
Issues in Dispute
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Orion Compania Espanola de Seguros v Belfort Maatschappij
voor Algemene Verzekgringeen [1962] 2 Lloyd’s Rep 257
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“arbitrators must in general apply a fixed and recognisable
system of law, which primarily and normally would be the
law of England…they cannot be allowed to apply some
different criterion such as the view of the individual
arbitrator or umpire on abstract justice or equitable
principles.”
Basis of Determination of
Issues in Dispute
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Faubert & Watts v Temagami Mining Co. Ltd (1959) 17 DLR
(2d) 246 at 156
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“it is the duty of an arbitrator, in the absence of express
provision in the submission to the contrary, to decide the
question submitted to him according to the legal rights of
the parties, and not according to what he may consider
fair and reasonable under the circumstances.”
Substantive Law in Arbitration
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Conflict of law rules
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Dicey and Morris, The Conflict of Laws (13th ed), recommends the following rules:
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“Rule 145 The term ‘proper law of a contract’ means the system of law by which
the parties intended the contract to be governed, or, where their intention is neither expressed nor to be
inferred from the circumstances, the system of law with which the transaction has its closest and most real
connection.
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Sub-rule 1. When the intention of the parties to a contract, as to the law governing
the contract, is expressed in words, this expressed intention, in general, determines the proper law of the
contract.
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Sub-rule 2. When the intention of the parties to a contract with regard to the law
governing the contract is not expressed in words, their intention is to be inferred from the terms and
nature of the contract, and from the general circumstances of the case, and such inferred intention
determines the proper law of the contract.
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Sub-rule 3. When the intention of the parties to a contract with regard to the law
governing it is not expressed and cannot be inferred from the circumstances, the contract is governed by
the system of law with which the transaction has its closest and most real connection.”
Substantive Law in Arbitration
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If agreed in the contract, or chosen by parties,
generally decisive.
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Vita Food Products Inc v Unus Shipping Co Ltd [1939] AC 277
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If no choice made, to be determined by tribunal in
accordance with conflict of law principles.
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DST v Rakoil [1987] 2 LLR 246
Substantive Law in Arbitration
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‘closest and most real connection’ : Choice of place of
arbitration - a factor in determining choice of proper law.
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Compagnie d’Armement Maritime SA v Compagnie Tunisienne
de Navigation SA [1971] AC 572
Application of international law
or lex mercatoria
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‘international accepted principles of law governing
contractual relations’
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DST v Rakoil[1987] 2 LLR 246
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English Court of Appeal Decision was reversed on
garnishee issue in favour of Shell as intervenors. Principles
of jurisdiction not affected.
Equity Clauses
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Orion Compania Espanola de Seguros v Belfort Maatschappij
voor Algemene Verzekgringeen [1962] 2 Lloyd’s Rep 257
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“The Arbitrators and Umpire are relieved from all judicial
formalities and may abstain from following the strict rules
of law. They shall settle any dispute under this
Agreement according to an equitable rather than a
strictly legal interpretation of its terms and their decision
shall be final and not subject to appeal.”
Equity Clauses
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“not be bound by the strict rules of law”
Eagle Star Insurance Co. Ltd v Yuval Insurance Co. Ltd [1978]
1 Lloyd’s Rep 357
Arbitration agreement provided:
“If any question or dispute shall arise…the same
shall…be referred to …Arbitration…The Arbitrators and
Umpire shall not be bound by the strict rules of law but
shall settle any difference referred to them according to
an equitable rather than a strictly legal interpretation of
the provisions of this Agreement.”
Equity Clauses
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“not be bound by the strict rules of law”
Eagle Star Insurance Co. Ltd v Yuval Insurance Co. Ltd [1978] 1
Lloyd’s Rep 357
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The Court held:
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“the arbitration clause seemed to be entirely reasonable in
that it did not oust the jurisdiction of the Courts but only the
technicalities and strict construction; and the arbitration clause
in all its provisions was valid and of full effect including the
requirement that the arbitrators should decide on equitable
grounds rather than strict legal interpretation”
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Equity Clauses
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treating agreement as ‘contract of honour; not legal obligation’
Home Insurance Co. and St. Paul Fire and Marine Insurance Co. v
Administratia Asigurarilor de Stat [1983] 2 Lloyd’s Rep 674
Arbitration agreement provided:
“Art.14 Arbitration…The award of the Arbitrators or the
Umpire…shall be final and binding upon all parties without
appeal. This treaty shall be interpreted as an honourable
engagement rather than as a legal obligation and the award
shall be made with a view to effecting the general purpose of
this treaty rather than in accordance with a literal
interpretation of its language.”
Equity Clauses
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treating agreement as ‘contract of honour; not legal obligation’
Home Insurance Co. and St. Paul Fire and Marine Insurance Co. v Mentor
Insurance Co. (UK) Ltd (in liq) [1989] 1 LLR 473
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The Court held:
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“It is plain that it was the common intention that there should be an
enforceable obligation to arbitrate and to abide by the award. All that was
intended was to free the arbitrators to some extent from strict rules and
this, on the authority of the Eagle Star case, is permissible .…
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Had I reached the conclusion that art.14 goes further than is permissible, I
should also have concluded that the contention failed. The intention that
the agreement should be legally binding appears to me so clear that if and
insofar as the arbitration clause is to be construed as going further than the
law permits in freeing the arbitrators from the strict rules of law I should
either have struck it out altogether or excised the offending parts of it.”
Equity Clauses
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treating agreement as ‘contract of honour; not legal obligation’
Home Insurance Co. and St. Paul Fire and Marine Insurance Co. v
Mentor Insurance Co. (UK) Ltd (in liq) [1989] 1 LLR 473
Arbitration agreement provided:
“The Arbitrators and the Umpire shall interpret this
Reinsurance as an honourable engagement and they shall make
their award with a view to effecting the general purpose of this
Reinsurance in a reasonable manner rather than in accordance
with a literal interpretation of the language”
Equity Clauses
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treating agreement as ‘contract of honour; not legal obligation’
Home Insurance Co. and St. Paul Fire and Marine Insurance Co. v
Administratia Asigurarilor de Stat [1983] 2 Lloyd’s Rep 674
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The Court of Appeal held:
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“an arbitration clause which purported to free the arbitrators
to decide without regard to the law and according to, for
example, their own notions of what would be fair would not
be a valid arbitration clause; the clause did not do any such
thing; the clause did no more than give the arbitrators liberty
to depart from the ordinary or literal meaning of the words
used in the clause”
友好仲裁条款
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《中华人民共和国仲裁法》第七条：
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“仲裁应当根据事实，符合法律规定，公平合理地解决
纠纷。”
Amiable compositeur
and awards made ex aequo et bono
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Article 28 Model Law: Tribunal may decide as amiable
compositeur if parties agree.
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《中华人民共和国仲裁法》第四十九条：
“当事人申请仲裁后，可以自行和解。达成和解协议的，
可以请求仲裁庭根据和解协议作出裁决书，也可以撤
回仲裁申请。”
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Law Governing Arbitration
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宋连斌：
《比照适用抑或特别规定:从国际商事仲裁的法律适用
谈起--兼及中国国际私法立法及研究的"诉讼中心主义“》
冲突法方式：仲裁地冲突规则
冲突法方式：适当的冲突规则
径直适用最密切联系原则
直接适用合适的实体法
Law Governing Arbitration
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《中华人民共和国仲裁法》第七条：
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“仲裁应当根据事实，符合法律规定，公平合理地解决
纠纷。”
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《中华人民共和国民事诉讼法》第七条：
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“人民法院审理民事案件，必须以事实为根据，以法律
为准绳”。
Law Governing Arbitration
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《中华人民共和国刑法修正案（六）》第二十条：
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在刑法第三百九十九条后增加一条，作为第三百九十九条之一：“依法承担仲
裁职责的人员，在仲裁活动中故意违背事实和法律作枉法裁决，情节严重的，
处三年以下有期徒刑或者拘役；情节特别严重的，处三年以上七年以下有期徒
刑。”
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《中华人民共和国刑法》第三百九十九条（渎职罪）：
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司法工作人员徇私枉法、徇情枉法，对明知是无罪的人而使他受追诉、对明知
是有罪的人而故意包庇不使他受追诉，或者在刑事审判活动中故意违背事实和
法律作枉法裁判的，处五年以下有期徒刑或者拘役；情节严重的，处五年以上
十年以下有期徒刑；情节特别严重的，处十年以上有期徒刑。
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在民事、行政审判活动中故意违背事实和法律作枉法裁判，情节严重的，处五
年以下有期徒刑或者拘役；情节特别严重的，处五年以上十年以下有期徒刑。
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司法工作人员贪赃枉法，有前两款行为的，同时又构成本法第三百八十五条规
定之罪的，依照处罚较重的规定定罪处罚。