"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well."

-Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Tuesday, July 27, 2010

UNCITRAL Arbitration Rules 2010

UNCITRAL has, after more than three decades come up with a new version of its Rules on Arbitration. For a long time practitioners and academicians have wondered why UNCITRAL has not revised its Arbitration Rules,1976 (UAR) just like several arbitration institutions which have revised their Rules from time to time. For example, SIAC has revised its Rules three times after its first publication in 1991 (1997, 2007, 2010)

One of the possible reasons for such non-revision might have been that the adoption of the UNCITRAL Model Law on International Commercial Arbitration was in itself a sort of Rules revision. The below timeline briefly portrays the steps that were involved in the creation of these Rules by the UNCITRAL.

19.06-07.07.2006 In the 39th session of the UNCITRAL, it was decided to accord priority to the revision of the UAR

11.09-15.09.2006 In its 45th session, the Working Group on International Coommercial Arbitration and Conciliation (WG) compared the UAR with the Rules of several other institutions and identified possible areas
which might need consideration for revision. Some of the areas identified were to make the Rules applicable to even non-contractual arbitration, giving power to arbitral tribunals to change the time lines given in the Rules, Separation of Notice of Arbitration and Statement of Claim, separation of Reply to Notice of Arbitration and Statement of Defence, introduction of provisions for multiparty arbitration, providing for a continuing duty of disclosure of independence and impartiality by arbitrators, having time limits for challenge for arbitrators and so on.

The WG has been working since then on the revision of the UAR. Following is a summary of their deliberations, proposals and the Rules:

The 2000 UAR contains a model clause, which reads:

"Model arbitration clause for contracts:

Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules.

Note — Parties should consider adding:
(a) The appointing authority shall be ... (name of institution or person);
(b) The number of arbitrators shall be ... (one or three);
(c) The place of arbitration shall be ... (town and country);
(d) The language to be used in the arbitral proceedings shall be ... .

Possible waiver statement
Note — If the parties wish to exclude recourse against the arbitral award that may be available under the applicable law, they may consider adding a provision to that effect as suggested below, considering, however, that the effectiveness and conditions of such an exclusion depend on the applicable law.

"Waiver: The parties hereby waive their right to any form of recourse against an award to any court or other competent authority, insofar as such waiver can validly be made under the applicable law."

Article 1:
  • Reference of even non-contractual disputes to arbitration has been included
  • When there was only one UNCITRAL Rules, it was not problematic as far as reference was concerned. But when the Rules were updated, it was problematic when the parties did not mention the version of the Rules that they had wished to adopt in their agreement. Hence certain changes were made to include even this aspect.
  • Further, recognition is given to modifications to the arbitration agreement which the parties may subsequently agree to, orally or otherwise.
Article 2

Inclusion of electronic communication/ telecommunication for notification

Article 3 and 4

The Claimant would file a Notice of Arbitration and once the arbitral proceedings commence, the Claiamant could decide to consider the same as the Statement of Claim or file a Statement of Claim independently. Consequently, the Respondent would have the right to file a reply to the Notice of Arbitration and, if there is a Statement of Claim, the Respondent would have the right to file a Statement of Defence.

Article 6

Secretary General of the Permanent Court of Arbitration (Hague) has been named as the default designated authority to aid the constitution of the arbitral tribunal. This is subject to agreement between the parties.

Article 7
  • The number of arbitrators is three, by default, unless parties agree for a single arbitrator.
  • 7(2) is a novel provision which is intended to reduce the burden of costs on the Claimant in case the Respondent does not participate in the arbitration proceedings
Articles 8- 10
Appointment of a sole arbitrator by the appointing authority is by list procedure. The appointing authority would communicate an identical list of arbitrators to each of the parties. The parties are to delete names from the list which they consider inappropriate and also allot priority to the arbitrators they approve of. The appointing authority would appoint such the sole arbitrator which both parties have agreed to, in accordance with the choice made by them.

Article 10 deals with multi-party arbitration. Appointment of three arbitrator tribunal in a multiparty arbitration would be such that the joint claimants appoint one, the joint respondents appoint the other and the joint arbitrators so appointed would appoint the third.

At times, parties might have, especially in tripartite agreements, provided for a five arbitrator tribunal. In such a case, each party appoints one arbitrator and the three arbitrators so appointed appoint the fourth and the fifth.

More on the UAR 2010 in another post


Deepak said...

Great summary of the new rules. I am linking it on my blog.

Badri said...


Thanks. Appreciative comments and critique are immensely encouraging. Thanks for your support.