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Court Assistance in the Appointment of Arbitrators

Published online by Cambridge University Press:  21 May 2009

J.A. Freedberg-Swartzburg
J.A. Freedberg-Swartzburg
Affiliation:
Head, Department of International Commercial Arbitration of the T.M.C. Asser Instituut.
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Extract

This essay is intended as a coda to an earlier essay that I had the privilege and pleasure of co-authoring with Bert Voskuil on the ‘Composition of the Arbitral Tribunal’ as regulated by the UNCITRAL Model Law on International Commercial Arbitration. In that essay, particular reference was made to the new Arbitration Act of the Netherlands. It is my intention to examine once again the UNCITRAL Model Law and to compare it with the Netherlands Arbitration Act, but narrowing the focus to court assistance in the appointment of arbitrators and the attendant question of whether the court may exercise a supervisory function at this point by examining the validity of the arbitration agreement. The point of departure is a recent Hong Kong decision in which this question was examined under the UNCITRAL Model Law, applicable to international arbitrations in Hong Kong. After reviewing the case and examining the relevant provisions of the Model Law, a comparison will be made with the Netherlands Arbitration Act.

Type
Research Article
Information
Netherlands International Law Review , Volume 39 , Special Issue S1: Law and Reality , October 1992 , pp. 79 - 88
Copyright
Copyright © T.M.C. Asser Press 1991

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References

1. Published in Šaičević, P., ed., Essays on International Commercial Arbitration (1989).Google Scholar

2. The UNCITRAL Model Law on International Commercial Arbitration was adopted by the United Nations Commission on International Trade Law (UNCITRAL) on 21 June 1985.

3. Book IV of the Code of Civil Procedure, Arts. 1020-1076, adopted by Parliament on 2 July 1986 and in force 1 December 1986. English, French and German translations of the Arbitration Act, along with explanatory notes, are published in Sanders, P. and van den Berg, A.J., eds., The Netherlands Arbitration Act 1986. Text and Notes. English François Deutsch (1987).Google Scholar

4. The 1989 Ordinance amending the Hong Kong Arbitration Ordinance (Chap. 341) came into effect on 6 April 1990. See, for the text of the law and a general survey of arbitration in Hong Kong as well as a detailed account of the circumstances leading to the adoption of the Model Law, Kaplan, N., Spruce, J. and Cheng, T.Y.W., Hong Kong Arbitration Cases and Materials (1991), especially pp. xxvii–xxxii and 173–190Google Scholar.

Parties to a domestic arbitration may agree in writing to ‘opt in’ to the Model Law (s. 7 of the 1989 Ordinance adding s. 2L to Part II on Domestic Arbitration), and conversely, parties to an international arbitration may agree in writing to ‘opt out’ (s. 7 of the 1989 Ordinance adding s. 2M to Part II on Domestic Arbitration).

5. An excerpt of the judgment is published in XVII Yearbook Comm. Arb'n (1992) pp. 289–303.

6. It is not clear under the Model Law whether the failure to raise a timely plea with respect to the existence or validity of the arbitration agreement constitutes a bar to raising it in the setting aside proceedings. For a discussion of this question, see Broches, A., ‘Commentary on the UNCTTRAL Model Law’, in International Handbook on Commercial Arbitration, Supplement 11, 01 1990, pp. 83–85Google Scholar; also published separately as Commentary on the UNCITRAL Model Law on International Commercial Arbitration (1990).Google Scholar

7. The applicability of the Model Law is also based on the principle of territoriality as laid down in Art. 1(2).

8. Memorie van Toelichting [Explanatory Memorandum], TvA 1984 no. 4A, p. 19.Google Scholar According to the Explanatory Memorandum, the drafters also relied on the European Convention Providing a Uniform Law on Arbitration, done at Strasbourg, 20 January 1966; the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958 and the European Convention on International Commercial Arbitration, done at Geneva, 21 April 1961.

9. See the ‘Preface’ by the then Minister of Justice of the Netherlands, Altes, F. Korthals, in Sanders, and Berg, Van den, op. cit. n. 4, p. 3.Google Scholar

10. Work began on the Model Law in 1979 when the Secretariat of UNCITRAL was requested to prepare a preliminary draft and was completed on 21 June 1983 when the Commission adopted the Model Law. For a brief summary of the process leading to the adoption of the Model Law, see Broches, , op. cit. n. 6, pp. 2–5.Google Scholar

11. Explanatory Memorandum, loc. cit. n. 8, p. 19. For a summary of French jurisprudence on the application of the definition of ‘international’, see Boisséson, M., Le droit français de l'arbitrage interne et international (1990) pp. 425–427.Google Scholar

12. ‘Party arbitration’ whereby each party appoints its own arbitrator and the arbitrators so appointed jointly appoint the third arbitrator is not favoured in the Netherlands, particularly in domestic arbitration. The chief reason why the Netherlands did not adopt the 1966 Strasbourg Uniform Law was that it did not wish to have Article 6, which provides for party arbitration when the parties have not provided otherwise, to serve as a model appointment procedure endorsed by the law. See the Explanatory Memorandum, loc. cit. n. 8, pp. 19–20.

13. This provision also extends to appointment by the President if a party has a privileged position in constituting the arbitral tribunal (Art. 1026(4)); if a substitute arbitrator is to be appointed either due to withdrawal of an arbitrator (Art. 1029(2)–(3)), an arbitrator becoming de jure or de facto unable to perform bis mandate (Art. 1029(4)), the death of an arbitrator (Art. 1030(1)) or after a successful challenge (Art. 1035(3)); the appointment of arbitrators in consolidated proceedings (Art. 1046(5)); and appointment when the place of arbitration has not yet been determined (Art. 1073).

14. See, e.g., the Swiss Private International Law Act (in force 1 January 1989) which provides in Art. 179(3) concerning appointment of arbitrators by the court that the appointment shall be made ‘unless a summary examination shows that no arbitration agreement exists between the parties.’

15. Voskuil, and Freedberg-Swartzburg, , loc. cit. n. 1, p. 78.Google Scholar

16. Hof Leeuwarden 26 September 1988, NJ 1989 no. 342.

17. Art 1065(1)(a) reads: ‘Setting aside of the award can take place only on one or more of the following grounds: (a) absence of a valid arbitration agreement.’

18. It is possible for the opposing party to test the validity of the arbitration agreement by initiating court proceedings regarding the dispute at issue, but it would be beyond the scope of this essay to include an analysis of this additional indirect challenge.

19. The decision of the court in the setting aside proceeding is subject to appeal and cassation. Under the Model Law, the decision of the court on the preliminary ruling of the arbitral tribunal on its jurisdiction is not subject to appeal.

20. The advantage of a specific provision to this effect is demonstrated by The Atlantic Emperor (OJ No. C 220/5 of 23.8.1990; also known as Marc Rich). In this recent case, a party desiring to arbitrate applied to the High Court in England for the appointment of an arbitrator. The opposing party contended that under the Brussels Judgments Convention the English court lacked jurisdiction to make the appointment unless and until the Italian courts, where it had initiated court proceedings, first decided on the validity of the arbitration agreement. This question was subsequently referred by the Court of Appeal to the European Court of Justice for a preliminary judgment in which it was held that the exception contained in Art. 1(4) of the Brussels Convention excluding arbitration from die scope of the Convention also ‘extends to litigation pending before a national court concerning the appointment of an arbitrator, even if the existence or validity of an arbitration agreement is a preliminary issue in that litigation.’ If a similar case bad arisen in the Netherlands, it is submitted that such complications would have been avoided in the presence of the clear provision that the court must abstain from examining the validity of the arbitration agreement when making the appointment.