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International Arbitration
USC Law — International Arbitration (Spring 2013)

Additional Law Flashcards





  Seven Things, which you consider when

Conducting an Arbitration with a Country?


a.     Representation

b.     Appointment of the arbitrator

c.     Challenging the arbitrator

d.     Seat theory – state normally would like to have arbitration in their own country because if a dispute arises they can have a recourse to their own laws.

e.     Jurisdictional issue

f.      Available evidence

g.     Enforcement 


Lex Arbitri


law dealing with the procedure (that’s the procedural law; it’s the law applicable to the arbitration).


Seat theory


the official seat of arbitration; if the parties did not select the lex causi, then the tribunal will look to that law that is most closely connected to the subject matter of the dispute i.e. law per the arbitration agreement is taking place. If parties do not select lex arbitri, tribunal would turn to the law of the official seat of the arbitration.

Lex Causae

: substantive law (most closely connected. When parties do not choose “lex arbitri”, we apply substantive law, this is, the law most connected to the subject matter of the dispute.)

Lex Fori
law of the forum – conflict/forum law dealing with conflicts of law.
Lex Mercatoria
merchants law (custom and usage in international trade)
In Favorem Validitatis
in favor of validity. Court/tribunal will look in favor of the arbitration agreement/clause i.e. in favor of arbitration (when doubt, in favor of the arbitration agreement)
the arbitral tribunal has competence to determine its own jurisdiction, that is they can look into their own jurisdiction without having the court to do so. The tribunal has the right to pass upon alleged infirmities in the arbitration clause. However, it is subject to judicial review since it is a jurisdictional issue.
Doctrine of Separability
it permits the arbitrators to invalidate the contract from illegality without the risk. It allows the tribunal to separate out the arbitration clause from an otherwise invalid contract. As a matter of substantive law the arbitral clause is separable from the remaining contract. Unless there is a challenge to the arbitration clause itself, the challenge should be resolved by arbitral tribunal itself and not the court. It’s a foundation of International Arbitrational Law. By agreement to arbitration, the parties show their intent to solve disputes through this process and not the courts, thus embraces the separability of the clause
Conflict of law
If conflict between procedural and substantive law, you have to go to the law of the forum.
Amiable Compositeur
Clauses in arbitration (infra) agreements allowing the arbitrators to act as "amiables compositeurs", permit the arbitrators to decide the dispute according to the legal principles they believe to be just, without being limited to any particular national law. The resulting arbitral awards are frequently based on equity (infra) or on the lex mercatoria (infra). The arbitrators are authorized, as "amiables compositeurs", to disregard legal technicalities and strict constructions, which they would be required to apply in their decisions if the arbitration agreement contained no "amiable compositeur" clause.
Disqualifying Factors?
a. An arbitrator who has had an adversarial relationships with one of the parties
b. Represented one party in another situation
c. Financial involvement
d. Non financial involvement in the dispute or subject matter of the dispute (i.e, if you drafted the contract or gave opinion)
e. Personal interest in the outcome of the case
f. Close family relationships
g. Arbitrator has taken a public position specifically on the dispute in question.
h. Issue of an arbitrator acting as a mediator (Med-Arb)
Non-Disqualifying Factors
a. Someone who engages in professional lectures or writes articles on a generalized situation without an opinion.
b. Joining various associations or organizations.
c. Involved in an arbitration institution
Appearance of Bias is determined by the following test:
1. Existence of circumstances
2. Justifiability of doubt raised by those circumstances.
What standard are we looking for in an arbitrator?
a. Standard: Impartiality and independence (except for the ICC that only requires independence, and for _______ that only requires impartiality).
i. Impartiality required that arbitrator is not impartial or prejudiced either for or against one of the parties.
ii. Independence refers to the nature of the relation between the parties and the arbitrator, or w/ the Counsel that appoints such arbitrator.
b. The test to determine Impartiality and Independence is the “Appearance of Bias”
WHO is involved?
1. Parties
a. Third Parties: Parents/Subs/ JV/ Shareholders/Owners/Investors/ Employee
2. Institutions or ad hoc (← you have to acknowledge what can go wrong and solve those things before something wrong actually occurs)
3. Arbitrators
a. How many (1 vs. 3)
b. Qualifications
c. Selection process
1. Want a broad or narrow arbitration clause?
2. Want to give the arbitration injunctive on interim relief power?
3. Want to give the tribunal the power to give damages (consequential, direct, punitive, or liquidated)?
4. Choice of law (it’s upon the tribunal to interpret) and Choice of Rules (facilitate arbitration). Law overrides the rules because the rule is by an institution to facilitate the administrative process.
1. Country
a. Enforceability → the country who’s a party to one of the enforcement conventions.
i. Can you enforce your arbitration award after the fact the assets are from the other party (other country).
ii. Is the country party to one of the enforcing institutions?
1. i.e. New York Convention
b. Law of the Arbitration (law governing the contract)
c. Selecting your own Counsel (the where may require you to select local counsel; ability to select counsel of your own choice)
d. Language
i. Local language – which changes with the city
1. Sequence of the Dispute Resolution (Need to address 5 W’s and H of this step)
a. Negotiation
b. Mediation
c. Arbitration
2. Duration
a. Time for bringing the claim
b. Select Arbitration
c. Hearing
d. Award (Judgment)
1. Choice of Rules
a. Ad hoc – negotiate rules
b. Institutional- choose an institution (organization that assist the parties to arbitrate the issue)
c. Tribunal will attend to the intent of the parties (i.e., if parties choose institutional rules, in case they don’t agree with some of the rules, they can specify them and the Tribunal will attend to this.)
2. Discovery (what type of discovery you might be interested in looking at)
a. Depositions
b. Documents
c. Inspect books and Records
d. Reliance Documents (what you are relying upon that is going to permit you to bring your case)
3. Witness Statements (No opportunity to cross examine a witness statement)
4. Expert Witnesses (do you want the Tribunal to choose experts?)
5. Witnesses
6. Interpreter/Translator
7. Language
8. Video/Teleconference
9. Terms of Reference (ICC – chosen by the parties and arbitrators)
WHY (most important)
1. Why you choose the options you choose
a. Due diligence – tell the client why did you select what you selected.
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