ARBITRATION OF DISPUTES IN INTERNATIONAL BUSINESS

TRANSACTIONMARISKE MYEKE TAMPI

Stay informed!

• www.iccwbo.org/index_court.asp - ICC International Court of Arbitration• www.asil.org – American Society of International Law’s

Guide to Electronic Resources for International Law• www.adr.org – American Arbitration Association• www.mediate.com – Mediation Information and Resource

Center• www.adrr.com – ADR and Mediation Resource

Purpose of Arbitration in International Transaction• Private system of adjudication• Parties who arbitrate have decided to resolve their dispute

outside of any judicial system• Involves a final and binding decision• Producing an award that is enforceable in national court

Parts of ArbitrationAr

bitra

tors • One or

three• Chosen by

the parties

Inst

itutio

n • Chosen by the parties whether international arbitral institution or ad hoc

Rule

s • Chosen by the parties whether the rules of arbitral institution of the another rules

Plac

e an

d La

ngua

ges• Chosen by

the parties

Characteristics of Arbitration in International Transaction• Consent• Non-governmental decision makers• A final and binding award

Characteristics of Arbitration in International Transaction: Consent

• Consent provides an underpinning for the power of the arbitrators to decide a dispute• Arbitrator can only decide issues

within the scope of the parties’ agreement• Submission agreement is allowed

*submission agreement: if the parties do not have an arbitration clause in their contract, they can still enter into an agreement after the dispute has arisen.

Rules Procedures

Law

Another part of Parties’

Agreement

POWER OF ARBITRATION

Characteristics of Arbitration in International Transaction: Non-governmental decision makers

Arbitrators are private citizen

Chosen by the parties

Weigh less heavily any questions of public policy or public interest

Perceived as even-tempered, thoughtful, fair-minded and reasonable

Characteristics of Arbitration in International Transaction: A Final and Binding Award

Final

and

Binding

Arbitration results are…• Although there are occasional

opportunities to appeal in some jurisdictions

• How about Indonesia’s jurisdiction?

Advantages of Arbitration of Arbitration in International Transaction• The neutrality of the forum• The likelihoodof obtaining enforcement• Under New York Convention, courts are required to enforce

the award unless there are serious procedural irregularities, or problem that go to the integrity of the process• The ability to keep the procedure and the resulting award

confidential

Disadvantages of Arbitration of Arbitration in International Transaction• If an arbitrator has rendered a decision that is clearly wrong

on the law or the facts, the lack of ability to bring an appeal can be frustrating to a party• Arbitrators have no coercive powers• If the arbitration agreement is not valid then the framework

becomes irrelevant, because there is no legal basis for arbitration

The Regulatory Framework

• The framework expands in terms of scope and applicability beyond immediate parties• UNCITRAL Model Law on International Commercial

Arbitration has been adopted by many countries as their arbitration law• Substantive law are likely to be different, depends on the

chosen law

Arbitral Convention

• New York Convention• Inter-American Convention on International Commercial

Arbitration (the Panama Convention)• The European Convention on International Commercial

Arbitration• The Convention on the Settlement of Investment Disputes

between States and Nationals of other States (the “Washington Convention” or the “ICSID Convention”)

Arbitral Institutions

• The International Chamber of Commerce (ICC) International Court of Arbitration• The American Arbitration Association’s (AA) International

Centre for Dispute Regulation (ICDR)• The London Court of International Arbitration (LCIA)• Other Arbitral Institutions: SCC, CIETAC, WIPO Arbitration

and Mediation, GAFTA, LMAA, LMAA, FOSFA

Other Disputes Resolution Methods

• Mediation• Consiliation• Neutral Evaluation• Expert Determination• Mini-Trials

The Arbitration Agreement

International TreatiesInternational Arbitration

PracticeNational Laws

Arbitration Rules

Arbitration Agreement

Arbitration Agreement

Article II of New York Convention(1) Each Contracting State shall recognize an agreement in writing under which the

parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration

(2) The term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams

(3) The courts of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed

Drafting the Arbitration Agreement:Essential Requirements• Choice of Arbitrators• Place of Arbitration• Language of Arbitration• Substantive Law

Drafting the Arbitration Agreement:Additional Provisions• International Bar Association Rules on Taking Evidence• Preliminary Relief• Technical Expertise• Multistep Dispute Resolution Clauses• Disposiitive Motions• Legal Fees and Costs• Confidentiality• Expanded Judicial Review• Waiver of State Immunity• Multiparty Agreements

References

Ashford, Peter. Handbook on international Commercial Arbitration. 2009. New York: Juris Publishing

Dimatteo, Larry A. The Law of International Business Transactions. 2003. Ohio: Thomson – South Western

Moses, Margaret L. The Principles and Practice of International Commercial Arbitration. 2008. New York: Cambridge

Newman, Laurence W. and Richard D. Hill. The Leading Arbitrators’ Guide To International Arbitration. 2008. New York: Juris Publishing

Onyema, Emilia. International Commercial Arbitration and the Arbitrator’s Contract. 2010. New York: Routledge

Thacher, Simpson and Barlett LLP. Comparison International Arbitrarion Rules. 2008. New York: Juris Publishing