International Arbitration Proceedings Research Articles

International Arbitration and Artificial Intelligence: Ideas to Improve the Written Phase of Arbitral Proceedings

This article tracks a speech the author gave inMay 2023 at the 38th Annual ICC SIA QMUL Joint Symposium of Arbitrators, which focused on ideas to improve the international arbitration process. Arbitrators frequently complain about written submissions. Their most common complaint is that they are too long. They frequently have a hard time motivating to read them when they come in, if at all. While there is little prospect of written submissions becoming materially shorter, artificial intelligence (AI) may soon revolutionize the speed with which parties can produce them, resulting in proceedings becoming frontloaded. It may also help arbitrators isolate the material legal and factual issues and expedite the preparation of awards. AI is not a substitute for human expertise and judgment, but rather a tool that promises to augment human abilities and allow legal teams and arbitrators to work more efficiently and effectively. If you have yet to familiarize yourself with ChatGPT and the like, you would be well advised to do so sooner rather than later.

Lex-Mercatoria Principles: A keystone in International Commercial Arbitration

The international Commercial Arbitration is a dispute resolution mechanism; thus, it allows the parties to a dispute to settle their affair outside the national courts. On the other hand, lex mercatoria can be defined as a body of rules that encompasses usages and customs that were used by the merchants in the medieval ages, thus the English nomination “merchant law’. After globalization, more specifically in the twentieth century, both above-mentioned concepts have been developed and adopted by most of the legal systems around the world. This paper aims to define lex mercatoria by exploring its’ history, its’ development, and by tackling all its’ elements to study the impact of lex mercatoria’s principles on international commercial arbitration proceedings.

Limits of Application of the <i>jura novit arbiter</i> Principle in International Arbitration: Some Issues of Theory and Practice

INTRODUCTION. The principle of jura novit arbiter or jura novit tribunus is an analogue of the doctrine of jura novit curia in international arbitration proceedings which is free from the peculiarities of national laws. The significance of its application in international arbitration lies in the powers of an arbitral tribunal to participate in ascertaining the content of the applicable law. Given the features of international arbitration, material limitations are put on the jura novit arbiter principle in order to protect the rights and interests of disputing parties. However, limitations have both positive and negative legal effects.MATERIALS AND METHODS. The authors researched the provisions of international treaties, case law of tribunals and state courts demonstrating the scope of the arbitrator’s discretionary powers and the effects of its limitation, as well as the works of Russian and foreign scholars. The methodological basis of the research includes general scientific and special methods.RESEARCH RESULTS. The analyses of international treaties and case law led to the elaboration of the list of the main limits of the jura novit arbiter application. The study examined the issues in the relationship between jura novit arbiter and other principles aimed at narrowing the scope of its functioning.DISCUSSION AND CONCLUSIONS. The results of the analysis allow to draw the following conclusions. First, there are three major constraints put on the arbitrators' discretion: 1) ne ultra petita (not beyond the request), 2) due process in terms of a right to be heard and the foreseeability test, 3) expediency and efficiency of arbitral proceedings. Secondly, the limitation of the principle is a double-edged sword: on the one hand, it ensures legal certainty and predictability of an arbitral proceeding and its outcome, secures the rights and interests of the parties. On the other hand, the aforementioned limitations reveal also some downsides: there is no clear guidance on identifying conditions under which the ne ultra petita principle does not serve as a boundary of the jura novit arbiter principle; the "foreseeability" is an evaluative concept; and the imbalance between expediency and efficiency principles and jura novit arbiter may give rise to concerns about the established content of the applicable law.

Court-Ordered Interim Measures in International Arbitration: A Comparative Approach

This paper argues that there is a distinct cross-border law concerning court-ordered interim measures in aid of international arbitration, which is made up of two key (intertwined) sources, namely: the relevant provisions of the UNCITRAL Model Law on International Commercial Arbitration and supporting case law and legislation in both Model Law states and non-Model Law states. The principles identified in this paper are assumed to qualify as general principles of law. In order for a court at the seat to grant interim relief in international arbitral proceedings the requesting party must demonstrate a prima facie case worthy of consideration, the likelihood of irreparable harm and a balance of inconvenience. There is at present no general consensus as to ex parte interim measures, with many states and national courts showing significant reluctance to grant these on account of the absence of procedural guarantees that they entail. In equal measure, in the absence of bilateral or multilateral treaties that allow national courts to recognize and enforce foreign interim measures in respect of arbitral proceedings seated abroad, states are equally reluctant to allow parties seated in other jurisdictions to approach their courts for interim relief on the ground that the other party has assets or interests there. Although the courts of some powerful nations allow for such requests, there is no general rule in this regard and none is expected in the near future.

Justice, Third-Party Funding, and Tax Treaty Arbitration

Resolving tax treaty disputes and improving dispute resolution mechanisms for tax treaty disputes have been important topics for international tax for decades, but it has not been an easy journey for the international tax community including policymakers, international bodies, and academics to come up with a clear solution. Similar to other global policies that require a multilateralagreement, a multilateral approach to a global tax policy cannot be easy as relations among the states with different backgrounds need to be coordinated and it involves critical issues relevant to national interests such as tax sovereignty, revenue, conflicts with domestic laws, and financial resources. That being said, the current global approach to resolve unsuccessful Mutual Agreement Procedure (“MAP”) cases of a tax treaty seems fairly straightforward under both the Organization for Economic Co-operation and Development and the United Nations’ Model Tax Conventions as both simply suggest arbitration to step in to render a final decision for the unsuccessful MAP cases. However, due to the factors mentioned earlier, the vast majority of the bilateral tax treaties do notcontain the arbitration clause, and it seems quite clear that an approach needs to be made from both within and outside the boundaries of international tax, tackling sub-issue by sub-issue, in order to improve dispute resolution mechanism for tax treaty disputes. This Article aims to highlight the importance of having the arbitration clause in a tax treaty, and focusing on the financial aspects of tax treaty arbitration, examines whether third-party funding (“TPF”), which has become more mainstream in traditional international arbitration proceedings, could be utilized in tax treaty arbitration to remove certain financial barriers as in other traditional arbitration proceedings by analyzing (i) any legal barriers, (ii) benefits from a justice perspective, and (iii) investment merit from a funder perspective. For the analysis, the Article specifically discusses (a) the current issues and the status quo of the MAP and tax treaty arbitration, (b) how TPF has been utilized in international arbitration and helping parties without orinsufficient financial resources, (c) differences and similarities between tax treaty arbitration and other types of international arbitration i.e., international commercial arbitration, investor-state arbitration, and state-state arbitration, and (d) TPF from both the taxpayer claimant and the funder perspective.

국제투자중재절차에서 반대청구에 관한 연구

Purpose: This study analyzes counterclaims arising in the course of international arbitration proceedings, especially investor-state arbitration.
 Research design, data, and methodology: This paper mainly relies on arbitration awards based on investment treaties to reveal how counterclaims have been dealt with in the investment arbitration context.
 Results: Although counterclaims are well known in international arbitral proceedings, they raise special issues when it comes to investment arbitration, especially when they are based on treaties that recognize only rights, and not obligations, of private parties.
 Conclusions: A counterclaim may be a way of rebalancing investment law by allowing states to file claims against investors. However, certain conditions that must be fulfilled are not easily combined with the special features of investment arbitration. Future investment treaties should provide explicit provisions for the obligations of investors based on which contracting states may bring counterclaims. This could be a way of addressing the drawbacks that have been recently formulated against investment arbitration.

ARBITRATION AND CORRUPTION: A TOOLKIT FOR ARBITRATORS

In international commercial or investment arbitration proceedings, the appointed arbitral tribunal may suspect or one of the parties may allege that corruption, especially in the form of foreign public bribery, has influenced the underlying dispute between the parties. Over the past 25 years, the international and domestic legal frameworks to combat economic crime, including foreign public bribery, have become much stronger. Arbitrators therefore cannot ignore suspicions or allegations of corruption but, at the same time, they have limited means to address such suspicions or allegations, and they have to handle conflicting priorities. In short, they are in a dilemma. After introducing the wider context of international commercial and investment arbitration, this article outlines the arbitrators’ dilemma in more detail and presents a current effort to draft a so-called toolkit for arbitrators. The toolkit aims to help arbitrators address corruption issues in a comprehensive manner and to find solutions in accordance with the applicable laws.

Ai v. Arbitrator: How can the Exclusion of Evidence Increase the Appointments of the Arbitrators?

Background: The present article was prompted by the growing influence of artificial intelligence in international arbitration. Artificial intelligence poses a challenge to the arbitration market since its advantages make it inevitable that in the future, it will take over some of the arbitrator’s fact-finding functions. Accordingly, the question arises as to how arbitrators can improve fact-finding and, consequently, maintain their demand in the arbitration market. This article analyses in detail one of the alternatives for such an improvement – a stricter application of the rule on the admissibility of written witness testimony. Objects: The article sets out the following objectives: (1) to uncover why artificial intelligence could be considered a better fact-finder than the arbitrator; (2) to identify how arbitrators apply the rule on the admissibility of written witness testimony in international arbitration proceedings; (3) to justify a different application of the latter admissibility rule that both improves the quality of fact-finding and, accordingly, allows arbitrators to keep pace with artificial intelligence. Methods: The article is grounded in the doctrinal legal research method since it will examine three legal sources: 1) the widely applicable IBA Rules on the Taking of Evidence in International Arbitration; 2) the arbitral tribunal’s awards; (3) legal scholarship. The research additionally uses an economic analysis of law as well as an interdisciplinary approach, which reveals certain psychological phenomena related to decision-making in arbitration. Results and Conclusions: The application of the rule of admissibility of written testimony of a witness in international arbitration leads to various negative consequences in the fact-finding process. For arbitrators to keep pace with artificial intelligence in the fact-finding process and increase their demand in the arbitration market, it is necessary to adopt a stricter approach to the latter admissibility rule. This approach leads to the exclusion rather than the evaluation of written witness testimony in international arbitration proceedings.

Intervention in Inter-State Arbitration, including the Case of UNCLOS Annex VII Arbitration

This article addresses the issue of intervention in inter-State arbitration, including arbitration under United Nations Convention on the Law of the Sea (UNCLOS) Annex vii and tackles the question whether intervention in arbitral proceedings is only possible where the parties in dispute have expressly consented to it. It is maintained in this paper that international arbitration is not static and has undergone long evolution which has implications for the notions of party autonomy and confidentiality of proceedings. Nowadays inter-State arbitration is increasingly influenced by the practice of the ICJ and other international courts and tribunals engaged in State-to-State dispute resolution especially in the field of international procedural law. The article demonstrates that intervention in inter-State arbitrations is not as unthinkable as it was some decades ago. It does so by reference to the history of intervention in international arbitration and the practice of States in the field of intervention in international judicial and arbitral proceedings. While examining the function and purposes of the procedure of intervention in inter-State litigation and the forms of intervention known to it, the article assesses what the nature of the competence to permit intervention is. In this regard, it also examines the operation of the principle of consensual jurisdiction with a view to establishing whether intervention is subject to the consent of the parties in dispute. Finally, by way of comparison with other known forms of participation of non-litigants in the proceedings, it stresses the special function of the intervention procedure so as to justify the permissibility of intervention in inter-State arbitration.

Civil Limitation Statutes and International Arbitration in Central Asia: not Business as Usual

Abstract It is generally agreed that statutory limitations applicable to civil proceedings have no place in international arbitration proceedings, unless these have been specifically accepted by the parties; are imposed by mandatory laws, or; otherwise compelled by public policy. In equal measure, the process and recognition of enforcement awards should not be subjected to any statutory limitations, as such limitations are absent in the New York Convention and generally excluded by reference to transnational legal instruments, such as the uncitral Model Law. Investor and commercial actors operating in Central Asia should be cautious when embroiled in disputes with state entities because of the latter tend to protract and delay negotiations in order to impose statutory limitations to claims. It is imperative that upon commencement of negotiations foreign entities take appropriate measures to ensure that their claim is not undergoing a ticking time-ban. This may be achieved by serving the other party with an official notice as to the commencement of negotiations and a statement that this is not a substitute of a civil suit or arbitral proceedings. Equally, one of the parties may trigger arbitral proceedings but ask the arbitrators to suspend all hearings until after the termination of negotiations.

FOREIGN LAW IN INTERNATIONAL ARBITRATION

Arbitration is the most common form of dispute resolution in international transactions and commercial relations. The reason for its success is attributed to a number of advantages that arbitration has over court proceedings. There is no lex fori in international arbitration, it can be said that all laws are foreign. Because the principle of autonomy of the parties gives the parties the freedom – regardless of where the arbitration takes place – to decide which law to apply, a wide range of different laws apply to international arbitration proceedings. In international arbitration, in the context of competition between the laws of different countries, the arbitrators are faced with the choice of the law to be applied. They often have to apply law that is foreign to professional qualifications and common practice. The arbitrator may have difficulty ascertaining a substantive law as this law may be unfamiliar to her/him. Naturally the question arises, the task of determining the law to be applied rests entirely with the parties in accordance with the traditional approach of common law, if the arbitral tribunal is empowered to determine the content and resolve the dispute, as the court does in civil law.

Harmonizing International Commercial Arbitration: A Special Focus on Time Limit to Setting Aside an Award

Harmonizing international commercial arbitration with domestic courts is paramount in international commercial law. In this aspect, the time limit decided for setting aside an award is an essential aspect of the entire process of harmonization. By using in-depth analysis, this paper aimed to analyze the judicial practice of the period to set aside an award across common law jurisdictions. This paper contended that domestic courts lack the authority to extend the period for applying to vacate an award and some recurrent fact patterns that arise when parties attempt to argue for such discretion and how courts in other countries have addressed comparable instances. It delved into the harmonization of international commercial arbitration by considering the authority of domestic courts to extend the period for applying to vacate the award given that a significant reason for the success of the UNCITRAL Model Law on International Commercial Arbitration (Model Law) is the cross-jurisdictional consistency of standards that can result from the Model Law's uniform application, particularly concerning those provisions considered mandatory. While leaving aside common law jurisdictions that have not adopted the Model Law, one would expect that the Common Law jurisdictions that have adopted the UNCITRAL Model Law must be consistent in their interpretations. Then, a proper international jurisprudence will harmonize international commercial arbitration proceedings globally for the benefit of parties. However, such cross-border uniformity is difficult to establish, as the Model Law discussed in this paper showed. Article 34(3) of the Model Law on the time bar for setting aside an award, not providing domestic courts the authority to extend this time restriction, several unusual cases from Asian Model Law States imply that such authority exists.
 KEYWORDS: International Commercial Arbitration, UNCITRAL, Model Law.

Turkey

Abstract As complex international commercial relations developed, the practice of arbitration became more popular around the world. In this context, arbitration practices on a local basis have been shaped accordingly. The purpose of this study is to give general information about the international and domestic legislation in Turkey in the field of arbitration. Within this context, it evaluates the rules to be applied to international and national arbitration proceedings in Turkey by taking into account the effect of UNCITRAL model law on the evolution of national arbitration legislation of Turkey.

The Impact of Covid-19 on International Commercial Arbitration: challenges and solutions

This article examines the potential impact on future international arbitration proceedings. In the first chapter of this article, the researcher addressed the definition and its introduction and in the second chapter the researcher addressed the impact of the COVID-19 epidemic on international arbitration, including the impact of the COVID-19 epidemic on an international arbitration hearing and the impact of the epidemic on international litigation that addressed developments. In this regard, at the international level, the most appropriate sources, technology and digital record systems are changing, with strategies used in technology that maintains processes. In the following current events, the researcher addresses the impact of arbitration practices. In the Third chapter, the researcher dealt with the measures taken to Confrontation the challenges of international arbitration, and dealt with the legal basis for remote hearings in the International Chamber of Commerce, the American Arbitration Association, the London Committee of International Arbitration, and the Chinese International Economic and Commercial Arbitration Committee. The researcher concluded this study in the last chapter with some findings and recommendations.

Noises Off: Towards Greater Consistency in International Arbitration Awards

‘Noise’ is the unjustified and unwanted variance in a set of judgments over comparable issues. Together with bias, Noise is a driver of error in decision-making. As argued by the authors of the bestseller ‘Noise: A Flaw in Human Judgment’, every set of judgments or decisions (in legal proceedings or otherwise) evidence statistical ‘Noise’, and more of it than is commonly believed. Such variance has corrosive, if often concealed, consequences in terms of fairness, efficiency and legitimacy. In this article we demonstrate that there is likely to be substantial Noise in international arbitration proceedings, which is driven by features inherent to the arbitral process (though further features also help mitigate it). We present our Noise Audit and identify examples of Noise in publicly-available awards. We conclude with a number of recommendations to minimize Noise, in order to forge a pathway towards greater consistency in international arbitration. International Arbitration, Consistency, Noise, Variance, Psychology, Dispute- Resolution, Empirical, Interest Rates, Country Risk

Implications of the Selection of Islamic Law in European Private International Law

The English Court of Appeal in Beximco v. Shamil Bank chose to apply only English law in a breach of contract case, even though the choice of law clause in the contract at issue also selected Islamic law. The court cited three main reasons for this decision. First, article 3(1) of the Rome I Convention “contemplates” that a contract can be governed only by the “law of a country,” and there is no mention of the application of a “non-national system of law such as Sharia law.” Second, Islamic law does not consist of “principles of law” but instead a system of principles which “apply to other aspects of life and behaviour.” Third, even if Islamic law was interpreted to include principles of law, there is no consensus among the Islamic legal community as to what they would be when applied to a financial transaction. As this note will demonstrate, none of these arguments should hold weight in a contemporary European Member State court. For one thing, the court’s ruling is not consistent with the implications of the 2008 Rome I Regulation (“the Regulation” or “the Rome I Regulation”), which updates the Rome I Convention (“the Convention” or “the Rome I Convention”), both of which regulate choice of law issues in the European Union (“EU”). Although the Rome I Regulation was passed four years after the Shamil Bank decision, the content and legislative history of the Regulation suggest that it should be understood to support the validity of non-state sources of law like Islamic law. For another, the Shamil Bank decision misconstrued the nature of Islamic law. Islamic law’s approach to financial issues is demonstrably specific enough to enforce, as is evidenced by the fact that international arbitration proceedings have no difficulty enforcing choice of law clauses which select Islamic law. The weaknesses of the court’s arguments are not the only reason that future European Member State courts should not follow the reasoning of the Shamil Bank decision. In a global system that is trending toward prioritizing party autonomy, as evidenced by the Rome I Regulation and The Hague Principles on Choice of Law in International Contracts (“the Hague Principles”), European Member State court systems should be more open-minded about enforcing the legal systems that parties choose to rely upon in negotiating and drafting their contracts. This is especially true when the contract at issue selects both state law and non-state law, as was the case in Shamil Bank. If parties choose, as they did in that contract, to apply English law “in the spirit” of Islamic law, it would be disrespectful of their autonomy—and would materially alter the nature of the bargain they have entered into—for the court to choose to apply only English law, as the English Court of Appeal did. This is not to say that courts should be forced to apply parties’ selection of all types of non-state law, only those systems that are demonstrably specific enough to administer, as Islamic law is. This note will contend that even though no European Member State court has dealt with the application of Islamic law directly since the 2004 Shamil Bank decision, to the best of this author’s knowledge, if the issue were to arise again, courts should not follow the reasoning of the Shamil Bank decision.

Sądowa kontrola postępowania arbitrażowego z perspektywy doświadczeń międzynarodowych

As a general rule, every legal system in the world has regulations governing proceedings before a national court of law; some of the proceedings are possibly instituted subsequently to arbitration and thus review awards issued in arbitration proceedings. Such review may be carried out, first, where there is a motion to have the arbitral award set aside (deemed invalid, nullified) or where the arbitral award is to be recognized or enforced judicially. The general objective of the review is to secure legal transactions by eliminating decisions made in the conduct of arbitration proceedings, if their outcome may not be authorized by a state, mainly due to their disaccord with the basic principles of legal order. The scope of the review may vary as it is dependent upon internal regulations of a given state, especially whether the aforesaid regulations were set forth in compliance with the UNCITRAL Model Law, or whether the legal system provides for separate provisions on arbitral awards issued at a territory of a given country but within international arbitration proceedings, or finally whether the parties, at their discretion, may be precluded from applying to have an arbitral award set aside.

Immunities And Arbitration: A New Lex Specialis Regime

AbstractThe interaction between immunities and jurisdiction is complex. One lacuna is whether the international legal principle of state immunity is a rule or principle in its own right or an exception to a pre-existing jurisdiction. In the context of international arbitration disputes, this distinction is significant. States have been relying on immunity to exclude the jurisdiction of national courts to support the international arbitral process. This Article argues there is now a growing set of common and consistent practice according to which state immunity operates as a rule or principle lex specialis to a more general set of rules or principles governing the enforcement jurisdiction of national courts.

Bilateral Investment Treaty and Foreign Direct Investment in India

India has one of the largest Bilateral Investment Treaty (BIT) networks with other counties around the world. The BITs is to promote foreign investment by increasing investor confidence, empowering individual private parties to take international arbitral proceedings against the threat of appropriation by the government of the host country. This paper analyses the effect of BITs on FDI inflows in India using panel data for 76 countries for the time period 2000-2016 applying a dynamic panel generalised method of moments instrumental variable estimation method. The differenced GMM and system GMM estimates show a significant negative effect of bilateral investment treaties on the FDI inflows in India. While the lagged FDI has a significant positive effect, the financial openness of the source nations is reducing FDI inflows to India. The POLCON index shows that the countries with lesser political constraints have positive FDI outflow towards India. As opposed to domestic variables, the Chinn-Ito and POLCON indices have a greater share of change in FDI inflows to India. It seems that the BITs is not efficient enough to create investor confidence to invest in India.

Proper characterisation of the parol evidence rule and its applicability in international arbitration

Abstract Most arbitral statutes and institutional rules give great latitude to tribunals on the admissibility of evidence, and do not mandate application of domestic rules of evidence. In common law jurisdictions where the parol evidence rule applies, the issue that arises is whether the parol evidence rule is necessarily a procedural rule of evidence which tribunals are not bound to apply, especially in jurisdictions which have codified the rule under domestic evidence legislation. Notwithstanding any codification, this article argues that the parol evidence rule at common law is a substantive rule of contractual interpretation that should be applied as part of the lex contractus in international arbitration proceedings. Faithful application of the parol evidence rule as a substantive rule of contractual interpretation ensures that adjudicators arrive at the same interpretation on the same set of facts, thereby promoting uniformity, predictability, and consistency, regardless of the mode of dispute resolution.