"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, August 3, 2010

UNCITRAL Arbitration Rules 2010- Part II

A few days back, we had a post that dealt with what was new about the UNCITRAL Rules 2010 ("2010 Rules" or "New Rules"). Owing to the length that a post with such an objective would demand, we had stopped at Article 10 of the 2010 Rules and had promised we would have a post on the Articles subsequently. In this post we survey and summarize the rest of the New Rules.

Articles 11- 13

Duty of the prospective arbitrator to disclose circumstances likely to give rise to justifiable doubts as to his or her independence or impartiality to other arbitrators has been added. Previously such duty was only towards the parties.

Article 14-15
  • If an arbitrator is to be replaced due to any reason, and if the appointing authority is of the opinion that it ought to deprive a party of its right to appoint a substitute arbitrator, it may do so. In that case, the appointing authority might, after giving opportunity of being heard to the parties and after obtaining the views of the arbitrators, either appoint a substitute arbitrator or if the need for replacement occurs after the hearings are over, authorize the existing tribunal to continue with the the arbitral proceedings without appointing another arbitrator.
  • The previous position was that the hearings would have to commence afresh if the presiding arbitrator had to be replaced. But this time, the new Rules leaves this decision to the arbitral tribunal.
Article 16
A new insertion, this provision concerns waiver by the parties of all claims against the arbitrator to the extent permitted by law. The exception is intentional wrongdoing.

Article 17
  • Stress on efficiency of arbitral proceedings apart from fairness.
  • Establishment of preliminary timetable soon after the tribunal is constituted
  • Shortening/ extension of time limits after consulting with the parties
  • Power of the the tribunal, at request of one party, to direct a party to the Arbitration agreement to join the arbitral proceedings.
Article 18
Award is deemed to have been made in the place of arbitration. Under the 1976 Rules, there was a requirement that the award be made in the place of arbitration (article 16). This requirement has been done away with.

Article 19- 22
Statement of claim, statement of defence and counter-claim to be accompanied by supporting evidences/ documents

Article 23
  • The Model law wordings on the power of tribunal to rule on its jurisdiction  has replaced the old wordings. In effect, there is no substantial difference between the Model Law and the current provisions.
  • Plea regarding the absence of arbitral jurisdiction has to be raised during the arbitral proceedings and the tribunal may at its discretion, decide the matter as a preliminary point.

Article 25

The period of time for communication of Claims and WS should not exceed 45 days. This requirement is very onerous and in highly techncial arbitrations, it is virtually impossible to comply with such a requirement. A large company with lot of resources might but a normal company would not. For this reason alone, it is prudent to not adopt Rules, though discretion is given to the arbitral tribunal to extend the time limits.

Article 26
  • Provision regarding interim measure by the arbitral tribunal. Provides for examples of interim measures and the requirements to be established to be entitled for a plea for interim measure.
  • Reiterates the principle in Article 9 of the Model law that it is not incomaptible with the arbitration agreement to approach a court for interim measures
The requirement in the old Article 25.3 that the arbitral tribunal must arrange translation of oral statements made during hearings has been deleted in the new Rules

Article 28

Examination of witnesses through means of telecommunication not requiring physical presence of the witness, such as through video conferencing etc

Article 29

The right of parties to object to tribunal's independent expert, especially with regard to the independece or impartiality of the expert.

Article 32

The exception to the waiver of right to object to non-compliance with the Rules or with the arbitration agreement is if such party shows that it was justified in its failure to object

Article 33

Award to be made public only:

(a) if consented by all parties
(b) to the extent required

(i) by law
(ii)for enforcing a legal right
(iii)in relation to legal or other proceedings before an authority

Removal of requirement of registration by tribunal of the arbitral award if the law of the place where award is made so warrants

Article 37

If request for correction is made by a party to the arbitration, and the tribunal decides to make it, the tribunal shall do it within 45 days. Previously, the tribunal had to correct it within 30 days.

Article 40

In relation to interpretation, correction or completion of award, the tribunal may charge reasonable costs but shall not charge additional fees

Article 41
Procedure in case the fee charged by the tribunal is not reasonable

The new Rules also contains model statements of independence and impartiality of arbitrators.

A comparison of the 1976 and the 2010 Rules can be found here.

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