Week 1 (Introduction and a little bit of all)

Question 1

What is arbitration

Answer 1

A private system of adjudication, resolving disputes outside the judicial system.
In most instances, arbitral award is a final and binding decision, producing an award that is enforceable in a national court.

Question 2

Main characteristic of arbitration

Answer 2

Consent: parties consent is the source and limit of an arbitrator’s power and is linked to the submission agreement. If they do not have an arbitration clause in their contract, they can still enter into an agreement to arbitrate after a dispute has arisen.

Question 3

Nongovernmental decision makers

Answer 3

Arbitrators are private citizens, they don’t have to be lawyers either. They are independent and impartial

Question 4

The arbitral award is…

Answer 4

…final and binding, and cannot be appealed to a higher level court. Once a party’s award is recognized in the enforcing jurisdiction, it is generally considered to have the same legal effect as a court judgement.

Question 5

Advantages of arbitration

Answer 5

1. The likelihood of obtaining enforcement, by virtue of the New York Convention that has 156 state parties (so very widespread enforcement).
2. Neutrality of the forum (no home advantage)
3. Ability to keep proceedings and resulting award confidential.
4. Choice of arbitrators with subject matter expertise.
5. Shorter process.
6. No multiple appeals of the decision.

Question 6

Disadvantages of arbitration

Answer 6

1. Less discovery in this kind of case means less chance for a claimant to meet its burden of proof
2. Lack of any significant right of appeal.
3. Arbitrators have no coercive powers, so no power to penalize a party if it fails to comply with a tribunal’s request
4. In multiparty disputes, arbitral tribunal (arbitrator’s) don’t have the power to join all relevant parties. This is because the tribunal’s power derives from the consent of the parties, and if a party has not agreed to arbitrate, it cannot be joined in the arbitration.
5. The pool of experienced international arbitrators lacks both gender and ethnic diversity.

Question 7

The regulatory framework (imagine an upside down triangle)

Answer 7

International treaties (above) International arbitration practice (above) national laws (above) arbitration rules - all underpinned by arbitration agreement.
On the pyramid, the framework expands in terms of scope and applicability before the immediate parties (so international treaties have most scope and applicability and so on…)

Question 8

The regulatory framework: arbitration agreement

Answer 8

Underpinning for the regulatory framework governing the private dispute resolution process. If the arbitration agreement is not valid, then there is no legal basis for arbitration

Question 9

Who chooses the arbitration rules?

Answer 9

The parties! These rules, which apply to the arbitrations of all the parties that choose them, can be modified in a particular case by the arbitration agreement.

Question 10

Role of national laws in arbitration

Answer 10

Both the arbitration law of the seat of the arbitration (lex arbitri) and the substantive law chosen by the parties will come into play
Note! Many countries have adopted the UNCITRAL Model Law on International Commercial Arbitration as their arbitration law

Question 11

What is institutional arbitration?

Answer 11

Arbitration with an administering institution involved.

Question 12

Advantages of institutional arbitration

Answer 12

1. Institutional rules ensure that the arbitrators are appointed in a timely way.
2. Arbitration moves along in a reasonable manner and that the parties pay fees and expenses in advance.
3. An award rendered under the auspices of a well-known institution may have more credibility in the international community and the court.

Question 13

What is ad hoc arbitration?

Answer 13

Arbitration with no administering institution.

Question 14

Advantages of ad hoc arbitration

Answer 14

1. Parties are not paying the fees and expenses of an administering institution.
2. Parties also have more opportunity to tailor a procedure very carefully to the particular kind of dispute.
3. Parties can choose their own rules or UNCITRAL Arbitration Rules

Question 15

Disadvantages of ad hoc arbitration

Answer 15

Either party may engage in the deliberate obstruction of the process, thereby parties will need to seek the assistance of a Court

Question 16

Can State’s engage in arbitration?

Answer 16

State or state-owned entities are generally immune from suits by individuals or companies. However, if a state or state-entity engages in commercial deal, and especially if it enters into an arbitration agreement with the other contracting party, it will be considered to have waived immunity and will be held to its agreement to arbitrate.

Question 17

What is conciliation?

Answer 17

Conciliation involves a third party who will impartially and independently help the parties resolve their dispute. It is different from arbitration as it is non-binding.

Question 18

Expert determination

Answer 18

Highly technical question that involves experts of the issue area. The final decision is usually binding, but the parties can agree to use an expert under rules that permit a non-binding opinion.

Question 19

Mini-trials

Answer 19

Panel composed of one neutral decision maker and one executive from each of the companies involved in the dispute. The final decision is non-binding, but this serves the purpose of letting high-level executives know what is at stake, and provides the opportunity for them to resolve the dispute at an early stage to avoid expensive arbitration or litigation.

Question 20

Last-offer arbitration (baseball arbitration)

Answer 20

Technique within an arbitration to try to bring both parties closer together in terms of what the amount awarded should be. Each party states its best offer as to the amount it thinks should be awarded, and the arbitrator has only the ability to choose either one proposal or the other, and cannot choose any other amount (each side has incentive to be reasonable).

Question 21

Steel and Morris v UK

Answer 21

Concerned Article 6 ECHR, in particular: access to justice and equality of arms (6(3)).
The ECtHR found that the Applicants’ right to a fair trial (although important to state it is not an absolute right and must conduct considerations as in bullet points just below) was violated under Article 6 of the ECHR and that their leaflets were protected under Article 10’s freedom of expression.
The Applicants, Steel and Morris, were associated with the activist collective London Greenpeace, which began an anti-McDonald’s campaign. The Applicants handed out partially libellous leaflets critical of McDonald’s, for which they were imposed with a hefty fine and upheld in English Courts of Appeal.
The European Court reasoned that since there was a vast inequality between Steel and Morris and McDonald’s, and that denying legal aid to the Applicants deprived them of their ability to present the case effectively, and therefore violated Article 6.
In addition, the court noted that there was strong public interest in the opinions of non-mainstream groups regarding the environment and health.
Lastly, the court drew upon the need for democratic societies to allow all campaign groups, including London Greenpeace, to carry out their activities.
Court also took into account →
1. Importance of what is at stake for the applicants:
- In this case, a lot at stake, and they were the defendants in the case
2. What is the complexity of the relevant law:
- Relevant UK law was quite complex
3. What is the capacity of the applicants:
- They should have been given legal aid considering they were individuals vs a giant powerful multinational company - which is related to Article 6(3) equality of arms, and that both parties should be able to use the same instruments.

Question 22

Micallef v Malta

Answer 22

Concerned independence and impartiality, Art 6(1)
- Background: The applicant, Mr. Micallef, his sister was involved in a civil dispute with her neighbour. A favourable judgement of the lower court was set aside on appeal. The applicant’s sister instituted constitutional proceedings, alleging that the president of the court of appeal had lacked objective impartiality because of his family ties with the other party’s lawyer. After his sister’s death the applicant took over the constitutional proceedings which were subsequently dismissed. Then he goes to the ECtHR.
Complaint:
- Mr. Micallef complained that the Court of Appeal had lacked objective impartiality, thus his sister’s trial had not been fair
Court’s ruling:
- Impartiality normally denotes the absence of prejudice or bias and its existence can be tested in various ways.
The existence of impartiality for the purposes of Article 6 (1) must be determined according to a:
- (1) Subjective test evaluating the personal conviction and behaviour of a particular judge - that is, whether the judge held any personal prejudice or bias in a given case. For the subjective test, the personal impartiality of a judge must be presumed until there is proof to the contrary.
- (2) Objective test - whether the tribunal itself and, among other aspects, its composition, offered sufficient guarantees to exclude any legitimate doubt in respect of its impartiality.
- For the objective test, it can be found that a judge lacks impartiality if there are ascertainable facts that give rise to doubts about a judge’s impartiality to an external observer, for example, hierarchical or other links between the judge and other actors in the proceedings. This implies that, in deciding whether in a given case there is a legitimate reason to fear that a particular judge or a body sitting as a bench lacks impartiality, the standpoint of the person concerned is important but not decisive.
- The Court was of the view that in the particular case the close family ties between the opposing party’s lawyers and the chief justice sufficed to objectively justify fears that the presiding judge lacked impartiality. Noting that the law also provided no possibility to challenge the judge, the Court found a violation of the right to fair trial.
This case also shows the importance of impartiality and independence, as a fundamental principle, relevant for arbitration.

Question 23

Art 6(1) ECHR: Independence vis-a-vis…

Answer 23

Other state powers (legislator, executive)

Question 24

Art 6(1) ECHR: Impartiality vis-a-vis…

Answer 24

The parties to a trial

Question 25

Krombach v Bamberski

Answer 25

Concerned the right to be heard, Art 6(7) ECHR
Background:
- Krombach was convicted in France for killing his stepdaughter, and resisted the enforcement of French civil judgement as he had escaped to Germany at the time. He successfully appealed his criminal sentence in Germany, and was free, until Bamberski (the blood father of the stepdaughter of Krombach) kidnapped him and brought him to France to have him convicted under the French Court.
Complainant (Krombach):
- Argued that his conviction in France violated the no double jeopardy principle under Art 4 Protocol No. 7, claiming he was previously acquitted in Germany for the same incident.
Court’s decision:
- Application declared inadmissible: Article 4 Protocol No. 7 applies only to courts within the same State, not between different states
- Also, previous case law confirmed the Article only concerns “courts of the same state”
- Being acquitted or convicted in one state party does not prevent prosecution in another state party to the Convention
- Membership in the EU of both France and Germany does not influence applicability of Art 4 Protocol No. 7
- The trans-state dimension of no double jeopardy under EU law does not affect its interpretation in this case
Key points:
- No double jeopardy principle under Article 4 Protocol No. 7 is limited to proceedings within the same state
- The principle does not prevent criminal prosecution in a different State party to the Convention for the same offence
- EU membership of the countries involved does not alter the applicability of this Article.
Other considerations:
- German Court’s Deliberation: The German courts, upon Bamberski’s request for enforcement, questioned whether the enforcement of the French judgement could be denied on the grounds of conflicting with German public policy, particularly focusing on the right to legal representation (remember, because Krombach was tried in absentia with no lawyer present)
- ECJ Involvement: The German Federal Court of Justice sought guidance from the European Court of Justice (ECJ) on two key issues:
1. Whether jurisdiction assumed under the Brussels I Regulation by the French court could be contested as a ground to refuse enforcement of the judgement in Germany.
- Ruling: The ECJ ruled that incorrect jurisdiction established by the French court is not a valid reason to deny enforcement.
2. Whether Dr. Krombach’s denial of the right to be represented by a lawyer, as per French law, constituted a breach of his rights significant enough to consider the enforcement of the judgement in Germany contrary to German public policy.
- Ruling: The ECJ affirmed that infringement of the right to be heard could justify refusal to enforce a judgement from another EU Member State.
- Outcome: Dr. Krombach was found guilty in French courts, and André Bamberski succeeded in obtaining a German regional court judgement that was enforceable in Germany, highlighting the complexities of cross-border legal enforcement within the EU and the paramount importance of the right to legal representation.

Question 26

Should we go to litigation in court, arbitration, or mediation?

Answer 26

First step: see if there is an agreement on the choice of method in the contract between the two parties as that determines form of dispute resolution immediately.
General rule: Court litigation unless there is an agreement otherwise (implicit). So basically, court litigation unless they enter into a court agreement for mediation.
There might be an arbitration clause in the contract, and if not, then the general rule applies which is go to court litigation.
It is also possible to agree ad hoc on arbitration (after the dispute arises, you agree let’s do arbitration instead of court litigation).
If you want to deviate from the general rule (court litigation) then an agreement between parties is needed.

Question 27

What is the general rule in EU jurisdiction for litigation in Court

Answer 27

Article 4 Brussels I BIS Regulation: look at the place of domicile of the defendant to see if the relevant court has jurisdiction.
Also, the place of the defendant is the forum under Art 4 Brussels Ibis.
So, for example, if a Dutch person sues an Italian, then the Italian is the defendant, and Italy is the choice of forum.

Question 28

Are parties free to determine which Court has jurisdiction?

Answer 28

Yes - there can also be a clause in the contract that says which court will have jurisdiction

Question 29

What does arbitration require for jurisdiction?

Answer 29

There must be an agreement and consent by both parties to arbitrate and must be in writing in most countries

Question 30

If the jurisdiction of the litigation is in NL, what should you look at to see which court/judge has jurisdiction?

Answer 30

Dutch Code of Civil Procedure, and that will tell you which judge has jurisdiction

Question 31

If you engage in arbitration, what should you look at to see who should be the arbitrator?

Answer 31

For arbitration, it depends on whether it is an institutional arbitration (e.g., arbitration at the International Commercial Court) or you can choose your own arbitrators and then choose the chairman of the arbitrator.

Question 32

If you engage in mediation, what should you look at to see who should be the mediator

Answer 32

Same as arbitration

Question 33

How long is arbitration?

Answer 33

Fast route to a decision, provides final decision, and no possibility for appeal

Question 34

How long is court litigation?

Answer 34

Takes around 12 months, and there is a right to appeal

Question 35

Enforcement of judgement/award/settlement regarding court litigation?

Answer 35

Chapter B1B Regulation: if there is a decision rendered by a competent court in the EU, that decision will automatically be recognized in all other EU jurisdictions and can be enforced in all MS. Enforcement of an arbitral award in the EU can be enforced automatically

Question 36

Enforcement of award for arbitration?

Answer 36

You need to go to a designated court in the country and ask permission to enforce award

Question 37

Enforcement of settlement for mediation?

Answer 37

There is an agreement between the parties about the solution. When there is an agreement, the parties can seek enforcement by the national courts through litigation if the settlement is not followed.

Question 38

What if the contract doesn’t include a specific choice of law clause?

Answer 38

You have to make a distinction from the question of which court has jurisdiction (mostly domicile of the defendant) but it could be that the applicable law is the law from another party, differentiate substantive law from place of jurisdiction
E.g., ask: did the parties enter into an agreement to arbitrate? What is the applicable law? There has to be distinction between these two issues

Question 39

What is the best possible solution for a private law dispute resolution?

Answer 39

Mediation

Question 40

Negotiation as a dispute resolution

Answer 40

• Done by the parties themselves (no institutions)
• No formal, procedural rules/legislation
• (Inter)national context
• Resulting in an agreement or proceeding with another type of dispute resolution

Question 41

Mediation as a dispute resolution

Answer 41

• Done by parties themselves (no institutions)
• Not governed by extensive legislation
• Different types of mediation
• Resulting in an agreement or proceeding with another type of dispute resolution

Question 42

What two options are there for dispute resolution by a third party?

Answer 42

Court litigation (state court proceedings)
- Fundamental right: access to justice (Art 6 ECHR)
- International private law (jurisdiction and applicable substantive law)
Arbitration (‘private litigation’)
- Agreement (waiver of fundamental right)
- Governed by international, EU, and/or national law

Question 43

An example of universally acknowledged principles of litigation

Answer 43

Unidroit Principles of Transnational Civil Procedure

Question 44

ECHR Montovanelli

Answer 44

“(…) each party must in principle have the opportunity not only to make known any evidence needed for his claims to succeed, but also to have knowledge of and comment on all evidence adduced or observations filed with a view to influence the court’s decision (…)”

Question 45

Right to be heard - key points

Answer 45

• A fundamental principle in dispute resolution, both for litigation and arbitration.
• The instruction to the judge or arbitrator is that if you let one party plead you must also let the other party the opportunity to plead.
• A key case here is Krombach v Bamberski

Question 46

Key case for independence and impartiality

Answer 46

Micallef v Malta

Question 47

Key case for access to justice

Answer 47

Steel & Morris v UK