cpd no. 1 (arbitration overview and contrast with adjudication) - slides

1

Overview of Arbitration

From Commencement to Enforcement

Overview of Arbitration Process &

Contract with Adjudication

ARBITRATION ESSESNCE

Pre-Requisites to Commence Arbitration

A Dispute has arisen

All the remedies in the contract prior to arbitration has been exhausted

There exists an arbitration clause in the contract or the parties enter into agreement to arbitrate

A party has notified other party of intention to arbitrate

Commencement of Arbitration

Agreement to be in writing

Place of Arbitration

Seat of Arbitration – This defines the Procedural Law

Substantive Law governing the arbitration – the Law of Contract and Law of Tort of the country selected

Rules of Arbitration The contract may contain the Arbitration Rules

Better to follow any professional arbitration bodies’ arbitration rules

Qatar International Center for Conciliation and Arbitration

Chartered Institute of Arbitrators

International Chamber of Commerce

London court of International Arbitration

A Good Arbitration Agreement –Essential Components

Contract Administrator Duties

• Separatibility of Arbitration Agreement (in case the contract is held to be null

and void by the court) • Language of arbitration • Power to determine Jurisdiction of Arbitration – Whether the Arbitration Panel

shall have the power to decided on its jurisdiction or the court will have the power

• Formation of Tribunal – One or Three Arbitrators (Award by majority) • Provision for Challenge to the Award (To be kept as Minimum to maintain the

final and binding nature of award)- As suggested in next slide



Generally, in arbitration rules of professional bodies, the challenge to award is

limited to following grounds: • Tribunal exceeding its powers of substantive jurisdiction • Failing to conduct the proceedings in accordance with agreed procedures or

to conduct the proceedings in an impartial way • Failure to deal with all the issues • Uncertainty or ambiguity to the award • Award obtained by fraud or against the public policy



Claimant after notifying other party of intention to commence arbitration, shall write

to institute of intention to commence arbitration and appointment of arbitrator. The institute shall notify the respondent and claimant of the receipt of notification

of commencement of arbitration proceeding. The initial notice by claimant to institute shall contain the following details: Full details of parties Nature and description of dispute Statement of relief sought Copy of agreement Comments of place of arbitration, applicable law (Procedural and Substantive),

language etc. Requirement of nomination of arbitrators

Commencement of Arbitration (Under the Umbrella of a Professional Arbitration Institute)


Within 30 days or so, the respondent shall file an answer with the response to the

relief sought and any counterclaims. Thereafter, the procedure for appointment of arbitrator shall begin.

If it’s a 3 arbitrators tribunal, one arbitrator shall be appointed by each part and the

third arbitrator, to act as chairman shall be appointed by the institution. A party may raise a objection, if it feels that the arbitrator selected by other party

has some conflict of interest which may affect his impartiality. The institute may notify the arbitrator to clarify his position. The arbitrator may

disagree to the parties objection clarifying his position or may offer to resign. The decision of the institute may be final in this regard.

Commencement of Arbitration (Under the Umbrella of a Professional Arbitration Institute)


Once the arbitration tribunal has been formed, the institute shall pass on all

submission made by the parties so far, to the tribunal. Immediately thereafter, the tribunal shall draw the Terms of Reference, which

shall identify and record the following: Details of the parties, names, addresses etc. A summary of parties’ respective claims and of relief sought by each party, with an

indication of the amount being claimed or counter claimed. A list of issues to be determined Place of arbitration Language Applicable Procedural and Substantive Law

Commencement of Arbitration Proceeding After Constitution of Arbitration Tribunal


Final written Statement to be submitted by defendant no later than {Date}

Final written Statement to be submitted by claimant no later than {Date}

Further request for particulars, if requested by either party shall be delivered within

2 weeks of request or order. There shall be disclosure of documents, wherein either party may submit request

to other party to produce documents in their custody, explaining, How these documents are material to their case

What they think that other party may have these documents in their custody

Procedural Meeting


Statement in writing of witness of facts shall be exchanged no later than 15 days

before the commencement of hearing Since there is no agreement between the parties in respect of appointment of

expert witnesses, I decide that one independent expert shall be appointed by the tribunal who shall submit his report not later than 15 days before the hearing. The opening statements from claimant and respondent shall be submitted to me

with copy to other party not later than 1 week before the start of hearing. Arrangement for first hearing are confirmed as follows:

Commencement Date: {Date}

Procedural Meeting


Expected Duration of Hearings: 3 days

Sitting Hours: 10.00 to 17.00 daily

Venue: {Location/Hotel Name}

Legal Representation: Claimant to be represented by ABC Solicitors

Respondent to be represented by XYZ Solicitors

I shall take evidence on oath The post-hearing brief shall be submitted by the parties not later than 2 weeks

after the close of hearing.

Procedural Meeting


I shall in due course make a reasoned award save as to the cost, on all

substantive matters and then shall give an opportunity to the parties to address me, before I make my final award.

The parties while submitting any document to me must copy to other party and state so in their submission.

There shall be no communication by telephone between the parties or with myself.

Signed

Arbitrator

Procedural Meeting


As outlined in the previous Procedural Directions order, the following takes

place:

Submission of written statements

Disclosure of documents

Submission of factual witness statement by parties

Submission of Expert witness reports

Hearings – Cross Examination by panel and by parties

Proceeding Thereafter


Any party may challenge the award on the grounds mentioned in the arbitration

agreement. The panel will review the challenge and may confirm the award or may correct the

award for any clerical or typographical errors and issue as an addendum. While the arbitration is going on and the parties agree for any amicable settlement,

the arbitrator, on the request of the parties, may assist in formalizing the amicable settlement agreement.

Award


Enforcement means, getting the award ratified from the court, from the country

which was the seat of the arbitration (Procedural Law) Losing party may challenge the enforcement on the limited grounds mentioned in

the agreement. The court may refer back the award for review by the panel in part or full or in case

of extreme irregularity, may set aside the award in full. The main problem lies in the enforcement, when the assets of the losing party are

in another country. In this case, the winning party needs to apply to the court of those country for enforcement, to ensure that the losing parties’ assets can be frozen, in case the losing party is not respecting the award.

Enforcement


To facilitate the enforcement, New York convention 1958 on ‘Recognition and

Enforcement of Foreign Arbitral Awards’ is the most important treaty, which is signed by 146 out 193 United Nations member countries. Qatar also has signed this treaty in December 2002. Other than above treaty, most of the countries have signed bilateral treaties with

other individual or group of countries.

Enforcement


Arbitration Fee–As Per Qatar International Center of Conciliation and Arbitration

Claim Amount (QR

Administrative Expense (QR)

Arbitrator’s Fee Sole Arbitrator (QR)

Arbitrator’s Fee Three Arbitrators (QR)

2.50-5.00 Million 1% 67,500 + 2% of Amount Exceeding 2.50 Million

115,000 + 2% of Amount Exceeding 2.50 Million

20 -30 Million 0.75% 220,000 + 0.2% of Amount Exceeding 22 Million

320,000 + 0.4% of Amount Exceeding 22 Million

40 -50 Million 0.75% 255,000 + 0.125% of Amount Exceeding 40 Million

380,000 + 0.1% of Amount Exceeding 40 Million

> 50Million 375,000.00 267,500 585,000


Based on UNCITRAL Model Rules (United Nations Commission for

International Trade Law).

These rules shall govern the arbitration process except where these rules conflict with mandatory provisions of the law.

Arbitration Agreement shall be considered independent of contract, hence if contract is void or terminated, the arbitration agreement shall remain valid.

Arbitration panel shall have the power to decide on challenge to its jurisdiction.

If place of arbitration is not agreed, Qatar Center for Conciliation and Arbitration shall be the place of arbitration

Rules of Conciliation and Arbitration

by Qatar International Center for Conciliation and Arbitration

Key Features


A party can apply to the arbitration panel (subject to providing some

appropriate security) or to the court for interim measures of following nature:

Maintain or restore the status quo pending determination of dispute Provide a means of preserving assets Preserving of any evidence that may be relevant and material to the dispute

If later arbitration tribunal finds that such interim measures were inappropriate,

the damages caused to other party may be awarded as the cost in favor of other party.

Hearings shall be held in cameras unless the parties agree otherwise.

Rules of Conciliation and Arbitration

by Qatar International Center for Conciliation and Arbitration

Key Features


Codified under Qatar’s Legislation –Law No.(13) of 1990 –The Civil and

Commercial Code of Procedure - Article 190-210

Article190: Arbitration Agreement shall be in writing

Article 192: Parties having an arbitration agreement have deemed to waive off their rights for litigation in respect of dispute

Unless agreed otherwise, the award shall be made within 3 months from date of admissibility for arbitration.

Article 198: Award should not contradict the rules of public order or manners

Article 202: Award by majority.

Ratification of award by the court

Arbitration Law of Qatar

Contract Administrator Duties Arbitration Law of Qatar

Article 207: Grounds for Challenges to Award

It the award was issued without an Arbitration Deed

If the award went beyond the limits of the Arbitration Deed

If the award is in contravention of public order or good manners

Arbitrator shall not be under age or convicted of crime or declared bankrupt

If the appointment of arbitrator was not done in accordance with the law or award issues without an authority

If a nullity occurring in the award or in the procedure has affected the award (such as not following the arbitration rules, not swearing the witnesses, not following the natural justice, not signing each page of the award etc.)

Contract Administrator Duties Difference between Arbitration and Adjudication

Set up of Dispute Boards or Arbitration Panels

Dispute Boards are set up generally at the commencement of contract if such provision is available in the contract. It can be set after the commencement of dispute

Arbitration panels are set up only after referral of dispute

Time Period for Award

Adjudicators' decision in UK is required to be within 28 days of referral. In FIDIC 99 Red book, this period is 84 days. It is very difficult to extend this period until both the parties agree

Arbitrator’s award is to be within 3 months as per Qatar Law and 6 Months as per UA Law. However, extension of this period is generally very common due to complexity and size of disputes


Use of personal knowledge /expertise to determine a point of fact of law

Arbitrators can use the personal expertise to understand the parties’ submissions.

Adjudicator can use personal expertise to initiate a determination on a point of fact or law. However, once he determines something, he needs to notify the parties to obtain their comments

Submissions and Witnesses

Since Adjudication is to completed within a shorter time, the extent of exchange of submissions (statement of claim /statement of defense etc) and hearings etc. are limited in number

In arbitration the extent of documentation exchange/hearings etc. is much more elaborate


Knowledge about Project

In adjudication, since the Dispute Boards are formed at the beginning of the project, they get a copy of progress reports. Claim correspondence etc.

In arbitration, panel has no previous knowledge

Binding Nature

Arbitration is binding and only few limited grounds for challenge

Adjudication is binding, if the losing party does not take it further to arbitration.


Confidence

Normally the parties have more confidence in Arbitration, since Arbitrator’s generally more qualified and senior people

Becoming an Adjudicator is relatively easy and as such parties' faith in them less. Also, Adjudicators need to decide the dispute in a faster way, that also leads to lack of confidence.

Enforcement

Enforcement of Arbitrator’s award through courts.

In the adjudication, if the losing party fails to honor the decision, the winning party needs to refer the matter to arbitration for issuing a summary award for enforcement


Suitability

Arbitration suitable for complex disputes

Adjudication suitable for relatively simple and single disputes.

Power to allocate Costs

The adjudicators have the power to allocate their cost only in their decision (unless the contract specifies of sharing of cost), but not the parties’ cost.

Arbitrators can allocate their cost as well parties cost in their award.

cpd no. 1 (arbitration overview and contrast with adjudication) - slides

Documents

jurisdiction of arbitration

arbitration panel

arbitration clause

arbitration essesnce

law of contract

award award

arbitrators award

adjudication page