A to Z of Arbitration

A – Arbitration Agreement: According to the New York Convention and many national legislations, arbitration is the parties’ agreement to submit any disputes that arise or may arise out of a contractual relationship. Professor Gary B. Born has identified 7 crucial factors that make up an arbitration agreement: (i) Agreement to arbitrate; (ii) The scope of the disputes submitted to arbitration; (iii) Institutional arbitration rules; (iv) Arbitral Seat; (v) Arbitrator’s number, qualification and method of selection; (vi) Language of arbitrations and (vii) choice-of-law clauses.

B – Binding Awards: Unlike mediation, the tribunal’s rendered award has a binding effect on the parties’ arbitration agreement (unless there are sufficient grounds to set aside) and will be enforced in the same manner as a court’s judgment. However, whether the binding effect can extend to the non-signatory third party (assignment, agency, equitable estoppel, alter-ego and veil-piercing, group of companies doctrine) is still a complicated matter that must be determined on a case-by-case basis.

C – Confidentiality: The duty of confidentiality has been developed as an implied term in the arbitration agreement apart from typical exceptions set out in the case of Ali Shipping Corporation –v- Shipyard Togir [1998] 1 Lloyd’s Rep 643 (CA): (i) The parties’ consent (express or implied), (ii) Where there is an order or permission of the court, (iii) Where it is reasonably necessary for the protection of the legitimate interests of an arbitration party, (iv) The interests of justice and (v) The public interest. It is also necessary to distinguish between confidentiality and privacy. Some courts held that arbitration is confidential in the sense that it is not open to the public (privacy). To impose an obligation of confidentiality would require a different level of express agreement.

D – Doctrine of Separability: It is a worldwide recognized doctrine stemming from the parties' commercial sense and business efficacy to have the arbitration agreement exist independently from the demise of the principal contract. It requires the tribunal and the court to assess the validity of the arbitration agreement separately from the validity of the underlying contract. According to Professor Gary Born, the doctrine also means that the law applicable to the main contract does not necessarily extend to the law applicable to the arbitration agreement. In other words, the laws governing the underlying contract and the arbitration agreement can be different.

E – Enforcement and Recognition: In order for an arbitral award to be enforced in a particular foreign country, the award creditor has to submit an application for recognition and enforcement of a foreign arbitral award at the equivalent court of such a country. The arbitral award must not violate any provisions and regulations of the country that parties seek enforcement for it to be fully recognized and enforced.

F – Finality: The arbitral award rendered by the arbitral tribunal is subject to no appeal. The arbitral award is final and binding on all the parties that are bound by the arbitration agreement. Courts can only intervene on narrow grounds specified by international legal instruments and national legislation and they cannot review the merits of the dispute. ?

G – Governing Law: There are multiple laws applicable to different aspects of the arbitration: (i) The law governing the underlying contract and the law governing the dispute; (ii) The law governing the arbitration process; (iii) The law governing the validity and existence of the arbitration agreement and (iv) The conflict of law rules. The dynamic created by these different laws is what makes arbitration an international process but also exposes it to many issues in the absence of express choice of laws by the parties.

H – Hearing: Oral hearing is crucial in any process of adjudication. It is where parties can present their argument in the presence of any involved parties, and cross-examine evidence, witness statements, and expert evidence. It also enhances fairness, transparency, and effective communication with immediate feedback in the decision-making process of the arbitral tribunal. However, some institutional rules allow the tribunal to decide the case on a document basis only without holding an oral hearing, subject to the parties’ consent and the nature of the dispute.

I – Interim Measures: Article 17(2) of the UNCITRAL Model Law stipulates that ‘an interim measure is any temporary measure … by which … the arbitral tribunal orders a party (a) Maintain or restore the status quo pending determination of the dispute; (b) Take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself; (c) Provide a means of preserving assets out of which a subsequent award may be satisfied, or (d) Preserve evidence that may be relevant and material to the resolution of the dispute’. However, before the constitution of the arbitral tribunal, many jurisdictions and arbitration rules allow the parties to apply for such interim measures at the courts at the seat of arbitration or any other place that has the assets.

J – Jurisdiction: The arbitral tribunal jurisdiction derives from the parties’ arbitration agreement. No agreement, no arbitration. However, in some cases, the arbitral tribunal's jurisdiction to determine dispute is often limited by the notion of arbitrability imposed by the national legislation such as public policy or overriding mandatory rules of law. In such cases, the tribunal can either choose to obey the mandatory rules of law of a particular country and refrain from violating the public policy or proceed with the risk of the arbitral award being unenforceable in that country.

K – Kompetenz-Kompetenz: A doctrine that allows the arbitral tribunal to rule on its own jurisdiction. From the case of Fiona Trust & Holding Corp v Privalov [2007] 2 Lloyd’s Rep 267, it has been established that “rational businessmen” are likely to have intended that any disputes arising between them will be decided by the same court or tribunal unless they use clear language indicating otherwise. In other words, a reasonable party will not have the merits of the dispute being resolved by the arbitration and the issue of validity of the arbitration agreement being resolved by the court. Instead, they want both problems to be resolved by arbitration. Thus, the doctrine was born to help facilitate the efficacy of the arbitration process

L – Limited Judicial Intervention: A legal principle that emphasizes minimal court involvement in the arbitration proceedings, allowing the arbitration process to function independently and efficiently. Where the parties have agreed to arbitration, if one party submits the dispute to a court, it must refer the party back to arbitration as a dispute resolution method unless there are sufficient grounds that make the arbitration agreement null and void, inoperative, or incapable of being performed. Courts will only have a supportive role in assisting the arbitral tribunal in several aspects such as interim relief or evidence collecting.

M – Model Arbitration Clause: A Model Arbitration Clause is a standardized provision included in contracts to ensure that any disputes arising from the contract are resolved through arbitration rather than litigation. The clause typically specifies key elements such as the governing arbitration rules (e.g., ICC, LCIA), the seat or place of arbitration, the number of arbitrators, and the language of the proceedings. Using a model clause helps avoid ambiguity and ensures enforceability.

N – New York Convention: The New York Convention (Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958) is a key international treaty that facilitates the recognition and enforcement of arbitral awards across its member states. It requires courts of contracting states to honor and enforce arbitration agreements and arbitral awards, with limited grounds for refusal, thereby providing a reliable legal framework for international arbitration.

O - (Procedural) Order: A Procedural Order in arbitration is an official directive issued by the arbitral tribunal to manage the procedural aspects of the arbitration process. These orders can address issues such as timelines for submissions, procedural timetables, the scope of document production, scheduling of hearings, and other procedural matters to ensure the arbitration proceeds efficiently and fairly.

P – Place of Arbitration: The Place of Arbitration, also known as the seat, is the legal jurisdiction where the arbitration is formally based. It determines the procedural law governing the arbitration process and the extent of judicial intervention. The place of arbitration is crucial as it affects the enforceability of the arbitral award and the procedural rights of the parties.

Q – Quantum: The amount of damages or compensation sought or awarded in arbitration. It involves the calculation and determination of the monetary value of the claim. This can include actual damages, lost profits, interest, and costs. Assessing quantum often requires expert testimony and detailed financial analysis.

R – Rules: Rules in arbitration refer to the procedural guidelines established by arbitration institutions (such as ICC, LCIA, UNCITRAL) or agreed upon by the parties. These rules govern the conduct of the arbitration, including the appointment of arbitrators, the exchange of documents, the format of hearings, and the issuance of the award.

S – Setting Aside: Setting aside refers to the annulment of an arbitral award by a court in the jurisdiction where the award was made. Parties can seek to set aside an award on specific grounds such as procedural irregularities, lack of jurisdiction, violation of public policy, or arbitrator misconduct. Successful setting aside renders the award unenforceable in that jurisdiction. There has been ongoing debate on whether an annulled award should still be recognized and enforceable in a foreign country but that actually depends on the case-by-case basis.

T – Tribunal: The Tribunal in arbitration is the panel of one or more arbitrators appointed to resolve the dispute. The tribunal's role is to conduct the arbitration proceedings, evaluate evidence, and render a binding decision or award. The composition and appointment of the tribunal are typically defined by the arbitration agreement or applicable rules. The arbitrator must remain impartial and independent at all times throughout the arbitral process.

U – UNCITRAL: UNCITRAL (United Nations Commission on International Trade Law) provides a framework for arbitration through its Model Law and Arbitration Rules. The UNCITRAL Model Law on International Commercial Arbitration (1985, amended in 2006) serves as a template for national arbitration laws, promoting uniformity and fairness in the arbitration process worldwide.

V – Venue of arbitral proceedings: The Venue of Arbitral Proceedings refers to the physical location where arbitration hearings and meetings are held. It is distinct from the place of arbitration and can be chosen for convenience, neutrality, or logistical reasons. The venue can influence the cost and practicality of conducting the arbitration but does not affect the legal framework governing the arbitration.

W – Witness: A Witness in arbitration is an individual who provides testimony or evidence relevant to the dispute. Witnesses can be fact witnesses, who testify about what they observed, or expert witnesses, who provide specialized knowledge or opinions. The credibility and reliability of witnesses can significantly impact the tribunal's findings.

X – Ex aequo et bono: A principle allowing arbitrators to decide a case based on what is fair and just, rather than strictly according to the law. Ex aequo et bono is a Latin phrase meaning "according to what is fair and good." In the context of arbitration, it refers to the power granted to arbitrators to decide disputes based on principles of equity and fairness, rather than strictly adhering to legal rules. This approach allows arbitrators to consider the broader context and the interests of the parties to reach a just and equitable outcome.

Y – Young ICCA: A worldwide arbitration knowledge network for young practitioners and students which was established in 2010. Shout out to Young ICCA for establishing such a strong community of young arbitrator getting started in their career.

Z – Unfortunately, there are no legal terms associated with the letter Z in the arbitration field. Are you aware of any?