Challenging Arb Awards

1. Litigation
• Traditional means of settling disputes
• Court/judge as referee
• Characterised by power of court to enforce its orders and judgments.
• Three key stages:
– Choosing forum;
– Carrying out proceedings under rules of that particular court;
– Enforcing judgment.

• Ideally, parties will have agreed on choice of forum in contract.
Litigation is Time consuming, expensive, so therefore as a result to
ADR
ADR : Alternate Dispute Resolution

Alternative to Litigattion, NOT IMP FOR EXAMS. IMP IS —>

IMP FOR EXAMSSS!!!

3. Arbitration

2. Negotiation/Mediation/Conciliation
• Parties seek to resolve matter entirely themselves; • Non-judicial method of dispute resolution
• Tribunal created by agreement of parties.

• Meet to discuss problems;

• Allows for expertise in tribunal (arbitrators)

• Sometimes a “mutual facilitator” is employed to assist (Mediator).

• Allows delays of litigation to be avoided.

• UNICTRAL and other organisations have established rules for conciliation

• Allows parties option of removing matter from court where there might be national chauvinism.
• Quasi judicial in procedure
• Awards of tribunal can be enforced/set aside by law (ie supervisory jurisdiction of courts)

- Negotiation : involves 2 parties, negotiating to reach a point.
Popular in accidents.
- Mitigation: Involving a 3rd party, so we meed a mediator ( 3rd party )
To facilitate them to come to their own decision. You basically just assist them to getting to their own decision. Popular in family disputes, husband and wife.
- Conciliation: similar to mediation

- Both parties agree to go to court.
- Usually people don’t agree to go to court, cause one party sueing the other.
- Contract has choice of law (Eg, Use Aus law) and choice of forum (Arbitration clause or no)
- So lets say really have dispute. Then one party dont want to do arbitration and go to court.
But contract has an arbitration clause. Then the party can enforce the arbitration.
And go to arbitration not court.
See whether clause cover dispute, if clause wide enough, -> yes look at arbitration clause,

EXAMS PROBLEM Q

a) The Agreement to Arbitrate
• In contract
• Refers any disputes to arbitration, usually setting down governing law, and place of arbitration (in addition to law of contract).
• In Australia, procedural laws of international commercial arbitration are governed by
International Arbitration Act 1974 (“IAA”).

b) Enforcing the Arbitration Agreement
UNCITRAL Model Law on International Commercial
Arbitration
• Appears in Schedule 2 of the IAA 1974.
• UNCITRAL Model Law (UN Commission on Intl Trade
Law) has the force of law in Australia under s16 IAA.
• Applies to arbitrations to be held in Australia unless parties say otherwise.
• Stay of proceedings can be sought in court under Art 8
UNCITRAL Model Law (to enforce arbitration agreement). • Art 7 – There must be a valid “arbitration agreement” which covers the dispute, for a stay to be granted.

Exam, what will we be dealing with? - Articles for UNCITRAL model law.
- 2 Issues to look at
1. Does your arbitration agreement (clause), So YES? is the arbitration clause wide enough to cover the dispute?
2. Look at arbitration clause, look at dispute then see whether clause covers dispute. If the clause is wide enough to cover dispute, then can give effect to arbitration clause. Then If the other party goes and sue you in court, Can you apply for a stay of procedeing in the court and push it to arbitration? YES.
If you follow the train of though, then thats it.

To see whether arbitration is wide enough, see article 7.
In the event of dispute…. refer to arbitration.
So lets say i go to court, then defender no thappy, so raise arbitration is wide enough to cover clause - Art 7
Then defender will raise Art 8 to stay the court proceding and transfer to arbitration.
So if got arbitration clause then go straight to arbitration, dont go to court.

Problems:
• Carelessly worded arbitration agreements.
• See: Discussion in Hi-Fert v Kuikiang Maritime
Carriers (1998)
• Disputes
– “arising from/under this agreement” – Paper
Products v Tomlinsons (1993) - narrow
– c/f “in relation to” contract – IBM v NDS (next slide)
– “arising out of or relating to this agreement” –
Francis Travel v Virgin Atlantic - wider

IBM v National Distribution Services
(1991) 22 NSWLR 466

• Non contractual claims which might pre-date the agreement might be said NOT to arise from a contract. • Claims for s52 Trade Practices Act (“A Corp. shall not in trade or commerce engage in misleading or deceptive conduct…”) or negligent misrepresentation might lead a person into the contract. • “…arising out of or relating to this agreement…”
• HELD: TPA claim capable of falling within Arb
Agt. (Kirby P).
Dispute arising from, or under this agreement, shall refer to arbitration.
It is a very narrow clause, cause only dispute arising from or under this agreement, only can go into arbitration. So if the party that dont want to go into arbitration can show that underr this agreement, And is outside the clause then cant use.
Outside the contract but relating to the contract. It is not arising from this contract but, as long as it is relating to the contract = can capture the dispute.
So somehow connecting/relating to the contract then can cover
So if wider - cover dispute.
Narrow - dont cover dispute

William Company v Chu Kong Agency
[1995] HKLR 139

•

Term in Bill of Lading provides for dispute settlement in Court of PR of China.
• Plaintiff sued in High Court of Hong Kong.
• Def sought stay of proceedings:
• Kaplan J addressed arguments :
1. Void for uncertainty?– No. Clause is good.
2. Not in writing (reqd. under Art 7(2))? – Clause is
OK coz apart from being contained in BoL, it was recorded in an exchange of letters btwn the parties.
3. Effect of Art 8 – Stay MUST be granted, regardless of inconvenience (ie witnesses not in
China, etc)

4. Procedural Law of Arbitration
• Determines the procedure for arbitration
• Includes matters such as
– How arbitrator (s) appointed/challenged;
– How evidence will be received and whether it will be received (ie will “hearsay” be allowed);
– Whether legal representatives will be permitted;
– Whether arbitration proceedings are confidential;
– How arbitration award will be made;
– How arbitration award might be challenged.
How many arbitrators, min 1 max 3

Arbitration in Australia
In Australia, there are two procedural laws:

1. *UNCITRAL Model Law on International
Commercial Arbitration
• As enacted in s16 International Arbitration Act 1974
(Cth))
• Applies to “international commercial arbitration” (defined Art 1)

2. Commercial Arbitration Act 1984
• Uniform Acts enacted in each state.
• Designed primarily for domestic disputes but will apply where no other regime applies (ie where parties “opt out” of UNCITRAL procedure under s
21 IA Act)
Exam - ignore 2

ART 12 & 18 VERY IMPORTANT FOR EXAMS, IF GOT EXAM Q
ARBITRATOR
THEN SURE TOCOME OUT

Procedure Under Model Law
• Art 10 - Number of Arbitrators – In default = 3 arbitrators
• Art 11 - Appointment of arbitrators - freedom of parties to decide, with default procedure – apply to court.
• Art 12 - Challenge of Arbitrators – If Arbitrator does not disclose any circumstance that gives rise to ‘justifiable doubts as to his impartiality or independence’ or does not possess qualifications agreed to by parties.
– Commonwealth Coatings v Continental Casualty – non disclosure
– Najir v Haines

• Art 18 - Parties must be treated equally and be accorded the same procedural fairness under the Rules of Natural Justice, i.e. given adequate notice and opportunity to be heard & arbitrator must be unbiased/independent. – Webb v The Queen–convictn set aside -juror gave victim’s parents flowers
– Gas & Fuel Corporation v Woodhall

S16 shows Aus is in Arb law/ Aus takes effect.
- Article 1 shows, if disputes are in 2 countries then “international commercial arbitration”

IF APPOINTED ARBTOR IS not qualified, like sth to indicate his partiality.
Can raise and challenge arbitrator - Art12
Art 18 arbitratior must filfill in order to not breach art 18
Justice must been seen and acted partially, Bias-ness and equality - Art 12 & 18

This slide not tested. ignore

• Parties can agree on time in which to prepare notices of claim and defence (Art 23)
• Tribunal shall determine whether hearing be oral/written
(Art 24)
• Tribunal may make award etc. in default of party complying with Art 23 w/o showing sufficient cause
(Art 25)
• Arbitrator may appoint experts to report (Art 26)
• Parties and tribunal may seek assistance of court in seeking evidence (Art 27)

Privacy and Confidentiality
• Generally, court proceedings are public and members of the public can observe. But In arbitration…
Esso Australia v Plowman (1995) per Brennan J Where no provision for confidentiality is made in an arbitration agreement, a term should be implied that the other party will keep information disclosed confidential except:
a) where disclosure of the otherwise confidential material is under compulsion by law;
b) where there is a duty, albeit not a legal duty, to the public to disclose; c) where disclosure of the material is fairly required for the protection of the party's legitimate interests; and
d) where disclosure is made with the express or implied consent of the party producing the material. the party producing the material
Arbitration procedings are private. Normal cases are not private.

6.Challenging and Enforcing
Arbitration Awards
• Awards are enforced through the Courts either under:

• NEW YORK Convention – enforceable under
– Sec 8 Int. Arb. Act (only foreign awards);

• Art 35, UNCITRAL Model Law - enforceable
– for awards made pursuant to Model Law in any country including Aust
– Recognised as binding by competent court (35(1))
– Upon application in writing (35(2))
– Must provide authenticated order and copy of award agreement If Arbitrator discloses that
Art 18/&12 - to
An arbitration award can be enforced - Art 35

Grounds for challenging/refusing award
(Art 36) Can also be grounds for challenging the appointment of arbitrator
• Art 12 - Party under some incapacity – bias or unqualified Commonwealth Coatings v Continental Casualty
• Art 18 - Party not given notice of appointment of arbitrator or unable to present his case
– ie .bias or prejudice – Webb v The Queen
– i.e. Parties must be given adequate notice & right to be heard - Paklito v Klockner
• Art 36 (1)(a) – Award of exemplary damages is outside arbitrator’s powers and can be contrary to public policy.
• Award deals with dispute not contemplated by or falling within arbitration agreement
• Composition of arbitral tribunal not in accord with parties’ agmt
• If an award recognizes an illegal contract, it is contrary to public policy – Soleimany v Soleimany
The courts will handle/ deal if arbitrator cant

And i Can challenge the arbitration appoitment or award - Art 36
Does the arbitration clause