International Commercial Arbitration seminar Juliette Luycks São Tomé and Príncipe 4 6 October 2011 Overview Key Considerations Sample Arbitration Clauses Pathological Clause Model Clauses Check List Elements of Arbitration Clause Core Elements in Model Clauses Additional Elements Multi-Party Clauses Unilateral Option to Litigate São Tomé and Príncipe 4 6 October 2011 2 1
Key considerations Arbitration or litigation? Where are assets? Where are parties? What kind of dispute likely to arise? What type of relief likely to be sought? What is wider commercial context? Consider each transaction on its own Keep it clear, short and simple São Tomé and Príncipe 4 6 October 2011 3 Pathological clause In case of dispute (contestation), the parties undertake to submit to arbitration but in case of litigation the Tribunal de la Seine shall have exclusive jurisdiction. Decisions of 1 February 1979 and of 16 October 1979, Tribunal de grande instance of Paris, 1980 Rev. Arb. 97 and 101. São Tomé and Príncipe 4 6 October 2011 4 2
Standard Arbitration Clause: ICC All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules. São Tomé and Príncipe 4 6 October 2011 5 Standard ad hoc Arbitration Clause: UNCITRAL Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be finally settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force. São Tomé and Príncipe 4 6 October 2011 6 3
Check-List of Elements CORE ELEMENTS Scope and Arbitrability Place/Seat Constitution of Tribunal Procedural Rules Language ADDITIONAL ELEMENTS Interim Measures Summary Awards Award Binding/Right of Appeal Mandatory Requirements MULTI-PARTY Continuing Performance ADR Confidentiality Allocation of costs LITIGATION OPTION Capacity/Authority Equity Clauses Governing Law State immunity São Tomé and Príncipe 4 6 October 2011 7 Scope and Arbitrability all disputes or any dispute, controversy or claim? arising out of and in connection with the Agreement non-contractual disputes included Any applicable rules relating to arbitrability? Includes disputes as to the existence, validity, interpretation, performance or termination of the Agreement Hybrid clauses providing for several dispute resolution methods risk that jurisdictions overlap E.g. expert determination and arbitration São Tomé and Príncipe 4 6 October 2011 8 4
Place/Seat Consult local counsel Arbitration-friendly local law Enforcement - New York Convention Parties may require neutral third country São Tomé and Príncipe 4 6 October 2011 9 Constitution of Tribunal 1 or 3 arbitrators? Appointed by parties or pursuant to their agreement nomination, appointment, confirmation Default procedures for appointment Special requirements - qualifications, experience, legal culture (common law vs. civil law) São Tomé and Príncipe 4 6 October 2011 10 5
Procedural Rules Institutional arbitration ICC, AAA/ICDR, SCC (Sweden), CIETAC (China), HKIAC (HK), DIAC (Dubai), CRCICA (Egypt), LRCICA (Nigeria) Administer arbitration Fees (arbitrators and institution; hourly rates vs. ad valorem) Carefully designate rules and institution (e.g. former ICC Rules of Conciliation and Arbitration vs. new Rules of Arbitration ) Ad hoc arbitration UNCITRAL No administrative body National law applies São Tomé and Príncipe 4 6 October 2011 11 Language Different languages Underlying contract Pleadings Written/Oral evidence Need for translation/interpretation - cost Default procedures in institutional rules São Tomé and Príncipe 4 6 October 2011 12 6
Additional Elements Interim measures By Tribunal By courts Summary awards Tribunal may have power to make fast decisions to dismiss issues where no arguable claim/defence Award Binding/Right of Appeal Depends on law of place/seat Right of appeal may be waived Mandatory Requirements Check: Anything else in law of place/seat that relevant? São Tomé and Príncipe 4 6 October 2011 13 Focus: Multi-party Additional parties and/or multiple contracts related disputes arise Risks of parallel proceedings and inconsistent awards 3 options Consolidation Joinder Appointment of same tribunal in parallel proceedings Agreement by parties is essential Umbrella agreement or cross-references? Law of place of arbitration and institutional rules relevant São Tomé and Príncipe 4 6 October 2011 14 7
Additional Elements Continuing performance Express provision to ensure contract performed despite commencement of proceedings Required in some jurisdictions ADR May not be binding condition precedent to reference to arbitration Confidentiality/Privacy Degree of confidentiality/privacy depends on law of place/seat and institutional rules Allocation of costs Costs follow the event unless parties agree otherwise or law of place/seat or procedural rules provide otherwise São Tomé and Príncipe 4 6 October 2011 15 Focus: Option To Litigate Unilateral Combines benefits of arbitration with benefits of litigation Safeguards in some national laws and institutional rules Not valid in other jurisdictions Specify when, how, by whom to be exercised Reverse: Litigation with option to arbitrate São Tomé and Príncipe 4 6 October 2011 16 8
Additional Elements Capacity/Authority Can parties agree to arbitrate (or e.g. state consent required?) Equity clauses Tribunal s power to rule in amiable composition or ex æquo et bono Governing Law Usually same as of contract Some jurisdictions require specific mention State immunity Jurisdictional immunity arbitration clause deemed waiver Immunity from enforcement and/or execution express waiver required São Tomé and Príncipe 4 6 October 2011 17 Summary and Conclusion Go through key considerations Consider elements on check-list View each transaction on its own Keep it clear, short and simple São Tomé and Príncipe 4 6 October 2011 18 9
Contact details: Juliette Luycks Tel.no. +31 (0) 20 711 9118 Mail to: juliette.luycks@cliffordchance.com São Tomé and Príncipe 4 6 October 2011 19 International Commercial Arbitration seminar www.cliffordchance.com Clifford Chance, Droogbak 1A, 1013 GE Amsterdam, PO Box 251, 1000 AG Amsterdam Clifford Chance LLP 2011 Clifford Chance LLP is a limited liability partnership registered in England and Wales under number OC323571 Registered office: 10 Upper Bank Street, London, E14 5JJ We use the word 'partner' to refer to a member of Clifford Chance LLP, or an employee or consultant with equivalent standing and qualifications AMSDAM-1-824532-v1 10