A Practical Guide To International Arbitration Clauses.pdf...

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A PRA C TICAL GUIDE F O R D RA FTING INTERNATIONAL ARBITRATION CLAUSES © By R. Doak Bishop King & Spalding 1100 Louisiana Street Suite 3300 Houston, Texas 77002 713 / 751-3205 (Tel.) 713 / 751-3290 (Fax.) [email protected] w .eom (E-mail)
I N TERNATIO N AL ARBITRAT I O N CLAUSES TABLE OF CONTENTS Pa c e No. A. Intr o ducti o n .............................................................................................................. 1 B. Fac t ors Affec t i n g the Enforceabil i ty of an Arbitration Clause ................................ 2 1. Treaty Requirements .................................................................................... 2 2. Capacity of the Parties ................................................................................. 3 3. Authority of the Signators ............................................................................ 4 4. Parties Bound By An Arbitration Clause ..................................................... 5 5. Unified Contractual Scheme ........................................................................ 7 6. Separability Doctrine ................................................................................... 8 7. Arbitrability of Disputes .............................................................................. 9 8. Conditions Precedent to Arbitration .......................................................... 10 9. Incorporation of Arbitration Clauses by Reference ................................... 12 10. Unconscionable Arbitration Clauses .......................................................... 13 C. General Considerations .......................................................................................... 14 1. Ins t itutional Model Clauses ....................................................................... 14 2. Different Versions of the Arbitration Rules ............................................... 16 3. Derogation from Institutional Rules .......................................................... 17 4. Pathological Arbitration Clauses ............................................................... 18 5. High-Low or Baseball-Style Arbitration .................................................... 21 6. On-Line Arbitration ................................................................................... 21 D. An Analytical Framework for Evaluating Arbitration Clauses .............................. 23 E. Essential Clauses .................................................................................................... 28 1. Adop t ion of Arbi t ration as the Me t hod t o Resolve Disputes ..................... 28 2. Final and Binding ....................................................................................... 28 3. Scope of Arbitration ................................................................................... 29 4. Ad Hoc or Institutional Arbitration ............................................................ 31 F. Importan t Clauses .................................................................................................. 33 1. Number of Arbitrators ................................................................................ 33 2. Method of Selecting Arbitrators ................................................................ 33 3. Place ........................................................................................................... 35 4. Language .................................................................................................... 38 -i-
5. Entry of Judgrnent ...................................................................................... 39 G. Helpful Clauses ...................................................................................................... 39 1. Qualifications and Conduct of the Arbitrators ........................................... 39 2. Interim Measures ........................................................................................ 41 3. Waiver of Appeal / Exclusion Agreement ................................................... 43 H. Unusual Clauses ..................................................................................................... 45 1. Confidentiality ........................................................................................... 45 2. Discovery ................................................................................................... 46 3. Multi-Party Arbitration .............................................................................. 48 4. Consolidation of Arbitral Proceedings ....................................................... 50 5. Split Clauses .............................................................................................. 53 6. Summary Disposition (Written Procedure) ................................................ 54 7. Arbitrability ................................................................................................ 55 8. Consent to Appeal ...................................................................................... 56 9. Adaptation of Contracts and Gap Filling ................................................... 57 10. Draft of Proposed Award ........................................................................... 58 11. Class Actions ............................................................................................. 58 I. Related Clauses (Sometimes Included in the Arbitration Clause) ......................... 59 1. Notice ......................................................................................................... 59 2. Alternative Dispute Resolution (ADR) Procedures ................................... 59 3. Governing Law .......................................................................................... 62 (a) Substantive Law and Conflicts Rules ................................................. 62 (b) Procedural Law ................................................................................... 63 (c) Lex Arbitri .......................................................................................... 64 (d) Denationalized Law ............................................................................ 65 (e) Placement of the Governing Law Provision ....................................... 66 (f) Drafting Considerations ..................................................................... 67 4. Equitable Principles ................................................................................... 68 5. Waiver of Sovereign Immunity .................................................................. 70 6. Expert Determination ................................................................................. 71 7. Punitive & Consequential Damage Exclusion ........................................... 73 8. Costs & Attorneys' Fees ............................................................................. 74 9. Interest ........................................................................................................ 75 10. Currency of the Award ............................................................................... 78 J. Special Drafting Considerations for ICSID Arbitration ......................................... 79 K. Conclusion ............................................................................................................. 80 -ii-
A PRACTICAL GUIDE FOR D R AF T ING INTERNATIONAL ARBIT RA TION CLAUSES © R. Doak Bishop King & Spalding Houston, Texas A. Introduction Since the foundation of internati o nal arbitrat io n is its consensual nature, t he parties to an international contract may - to a considerable extent - design the manner in which the arbitral proceedings are conducted. The first and most important opportunity for the parties to take control of their arbitration is in the drafting of their arbitration clause. As part of this exercise, the parties have substantial (although importantly, not unlimited) freedom in engineering the structure of their arbitration.

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