International Commercial Arbitration and the Arbitrator’s Contract

International Commercial

Arbitration and the Arbitrator’s Contract

This book examines the formation, nature and effect of the arbitrator’s

contract, addressing topics such as the appointment, challenge, removal

and duties and rights of arbitrators, disputing parties and arbitration insti￾tutions. The arguments made in the book are based on a semi- autonomous

theory of the juridical nature of international arbitration and a contractual

theory of the legal nature of these relationships. From these premises, the

book analyses the formation of the arbitrator’s contract in both ad hoc and

institutional references. It also examines the institution’s contract with the

disputing parties and its effect on the arbitrator’s contract under institutional

references. The book draws from national arbitration laws and institutional

rules in various jurisdictions to give a global view of the issues examined in it.

The arbitrator’s contract is analysed from a global perspective of arbitral law

and practice with insights from various jurisdictions in Africa, Asia, Europe,

North and South America.

The primary focus of the book is an analysis of the formation of the arbit￾rator’s contract and the terms of this contract and the institution’s contract.

The primary question of the consequences (if any) of the breaches of the

terms of these contracts and its impact on the exclusion or limitation of liab￾ility of arbitrators and institutions is also analysed with the conclusion that

since these transactions are contractual and the terms can be categorised as

in any normal contract, then normal contractual remedies can be applied

to the breaches of these terms.

International Commercial Arbitration and the Arbitrator’s Contract will be of

great value to arbitration practitioners and researchers in arbitration. It will

also be very useful to students of arbitration on the topics of arbitrators and

arbitration institution.

Emilia Onyema is a Lecturer in Law at the School of Oriental and African

Studies, University of London, UK.

Routledge Research in International Commercial Law

Available titles in this series include:

International Commercial and Marine Arbitration

Georgios l. Zekos

International Commercial

Arbitration and the

Arbitrator’s Contract

Emilia Onyema

First published 2010 by Routledge

2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN

Simultaneously published in the USA and Canada

by Routledge

270 Madison Avenue, New York, NY 10016

Routledge is an imprint of the Taylor & Francis Group, an informa

business

© 2010 Emilia Onyema

All rights reserved. No part of this book may be reprinted or

reproduced or utilised in any form or by any electronic, mechanical,

or other means, now known or hereafter invented, including

photocopying and recording, or in any information storage or retrieval

system, without permission in writing from the publishers.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging in Publication Data

International commercial arbitration and the arbitrator’s contract /

Emilia Onyema.

p. cm.

Includes bibliographical references.

ISBN 978-0-415-49278-2—ISBN 978-0-203-85991-9 1. Arbitrators. 2.

Contracts. 3. Arbitration and award, International. I. Title.

K2400.O59 2010

347’.09—dc22 2009030852

ISBN10: 0-415-49278-5 (hbk)

ISBN10: 020385991X (ebk)

ISBN13: 978- 0- 415- 49278- 2 (hbk)

ISBN13: 9780203859919 (ebk)

This edition published in the Taylor & Francis e-Library, 2010.

To purchase your own copy of this or any of Taylor & Francis or Routledge’s

collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.

ISBN 0-203-85991-X Master e-book ISBN

Contents

List of figures vi

Acknowledgments vii

List of abbreviations viii

Table of cases xi

Table of statutes xiv

Introduction 1

1 Arbitration agreement 8

2 Juridical and relationship theories 32

3 Parties to the arbitrator’s contract 60

4 Formation of the arbitrator’s contract 84

5 Terms of the contracts 118

6 Remedies 167

7 Termination of the contracts 174

Notes 180

Bibliography 231

Index 253

Figures

3.1 Single arbitrator’s contract theory 80

3.2 Multiple arbitrators contracts theory 82

4.1 Sole arbitrator jointly appointed by the disputing parties 86

4.2 Sole arbitrator appointed by the appointing authority 88

4.3 Arbitrator appointed by national court 91

4.4 Arbitrator appointment subject to institution’s confirmation 96

4.5 Institution acting as principal 99

4.6 Institution acting as agent of disputing parties 100

Acknowledgments

I thank my parents, who in the first instance, made me come back to school

to do an LLM and finally a PhD and my siblings, who all encouraged me in

all sorts of ways to ensure that I achieved this for myself and my family.

I thank Loukas Mistelis, who was very supportive and nurtured my aca￾demic development. He believed in me and had confidence in my academic

abilities. With his usual dedication to any project he undertakes, he worked

with me on my PhD and gave me opportunities to start off my academic

career.

I thank Julian Lew, who is an arbitrator among arbitrators. The arbit￾rator’s contract was a subject Julian understood in a personal sort of way

and brought his immense knowledge and guidance to my PhD thesis from

which this book emanates.

I thank all my colleagues at the School of Law, in SOAS the students on

my international commercial arbitration course with who I have shared my

learning and research in this subject, and special thanks to Ms Tanha Ahmed

who updated the references.

I thank my publishers, especially Katherine Carpenter, who saw the poten￾tial in this book during our first meeting in my office at SOAS. I thank the

editorial team at Routledge & Cavendish who have done a fantastic job, and

special thanks to Khanam Virjee who ensured the manuscript was delivered

to the editorial team in good time.

Abbreviations

AAA American Arbitration Association

AALCC Asia- African Legal Consultative Committee

ABA American Bar Association

AC Appeal Cases (England)

ADR Alternative Dispute Resolution

ADRLJ Arbitration and Dispute Resolution Law Journal

All ER All England Law Reports

ALM Arbitration Law Monthly

ALR Australian Law Reports

Am Rev Int Arb American Review of International Arbitration

Arb Arbitration

Arb Int Arbitration International

Arb Journ Arbitration Journal

ASA Swiss Arbitration Association

BCLR British Columbia Law Reports

BLR Building Law Reports

Bull Bulletin

CA Court of Appeal

CCP Civil Code of Procedure

CIARB Chartered Institute of Arbitrators

CIETAC China International Economic Trade Arbitration

Commission

CILS Centre for International Legal Studies

Cir Circuit

CLC Construction Law Cases

CLOUT Case Law on UNCITRAL Texts

CLR Commonwealth Law Reports

CMLR Common Market Law Reports

Co Company

Corpn Corporation

CPR Centre for Public Resources

CRCICA Cairo Regional Centre for International Commercial

Arbitration

Abbreviations ix

CUP Cambridge University Press, Cambridge

DIS German Institution of Arbitration

DRJ Dispute Resolution Journal

Ed Editor

Edn Edition

Eds Editors

ER English Reports

EWCA England & Wales Court of Appeals

EWHC England & Wales High Court

FAA Federal Arbitration Act, 1925 (United States of America)

HKIAC Hong Kong International Arbitration Centre

HKLR Hong Kong Law Reports

HL House of Lords (England)

IAR International Arbitration Report

IBA International Bar Association

ICC International Chamber of Commerce

ICCA International Council of Commercial Arbitration

ICLQ International Comparative Law Quarterly

ICSID International Centre for the Settlement of Investment

Disputes

ILM International Legal Materials

ILR International Law Reports

Inc Incorporated

Ins Insurance

Int, Int’l International

Int ALR International Arbitration Law Review

JIA Journal of International Arbitration

KB King’s Bench (England)

LCIA London Court of International Arbitration

Lloyd’s Rep Lloyd’s Law Reports

Ltd Limited

Mealey’s IAR Mealey’s International Arbitration Report

Medt & ME AQ Mediterranean & Middle East Arbitration Quarterly

NAFTA North American Free Trade Agreement

NSWLR New South Wales Law Report

NWLR Nigerian Weekly Law Report

NY New York

NYLJ New York Law Journal

NZLR New Zealand Law Reports

OJ Ontario Judgements

OR Ontario Reports

OUP Oxford University Press, Oxford

PC Privy Council

PCA Permanent Court of Arbitration

PIL Private International Law

x Abbreviations

Plc Public Limited Company

PRC People’s Republic of China

Pty Property

Publ Publisher(s), Publishing

QB Queen’s Bench (England)

QBD Queens Bench Division

QMC Queen Mary College

Rep Report

Rev Arb Revue de l’Arbitrage

SCC Stockholm Chamber of Commerce

SIAC Singapore International Arbitration Centre

SLR Singapore Law Reports

Supp Supplement

TCLR Technology & Construction Law Report (England)

TDM Transnational Dispute Management

Tex ILJ Texas International Law Journal

UNCITRAL United Nations Commission on International Trade Law

Url Uniform Resource Locator

VJ Vindobona Journal of International Commercial Law

and Arbitration

WIPO World Intellectual Property Organisation

WLR Weekly Law Report

WTAM World Trade & Arbitration Materials

YBCA Year Book Commercial Arbitration

Table of cases

Aita v Ojjeh, Rev Arb, 1986, 583 .............................................................. 143

Allied Marine Transport Ltd v Vale do Rio Doce Navegacao SA, The

Leonidas D, [1983] 3 All ER 737 .................................................... 25, 143

Annahold v L’Oreal Rev Arb 1996, 483 ................................................... 148

AT&T Corporation & Lucent Technologies Inc v Saudi Cable Company

[2000] 2 All ER (Comm) 625; [2000] 2 Lloyd’s Rep 127 ........ 148–9, 154

Bovis Land Lease Pty Ltd v Jay-Tech Marine & Projects Pte Ltd, Case

No O/S 77/2005, 166/2005, decision of The High Court Singapore of

06 May 2005 ............................................................................................. 25

Buckeye Check Cashing Inc v Cadegna, 546 US 440 (US S Ct 2006) ..... 21

Carter (T/A Michael Carter Partnership) v Harold Simpson Associates

(Architects) Ltd [2004] 2 Lloyd’s Rep 512 .......................................... 135

Christopher Michael Linnett v Halliwells LLP [2009] EWHC 319 (TCC),

[2009] All ER (D) .................................................................. 36, 52–4, 133

Commonwealth Coatings Corporation v Continental Casualty Co 393 US

145 (1968) .............................................................................................. 148

Compania de Aguas del Aconquija S A & Vivendi Universal v Argentine

Republic ICSID Case No ARB/97/3 .................................................... 151

Continental Grain Co v China Petroleum Technology & Development

Corporation (Unreported) (1998) ....................................................... 126

Corporation Transnacional de Inversiones, SA de CV v STET International

SpA & STET International Neterlands, NV (1999) 45 OR (3d) ....... 183,

213, 145

Dentirol AB v SwissCo Services AG, Case No T 4805-03 decision of the

Court of Appeal of Western Sweden of 30 September 2005 ........... 10–11

Esso Australian Resources Ltd v Minister for Energy and Minerals (1995)

183 CLR 10, (1993) 8 (6) Mealey’s IAR D1 ......................................... 143

Exel v Logitech, decision of Rotterdam District Court of 08 June 2006

............................................................................................................ 154–5

xii Table of cases

Fiona Trust & Holding Corporation and Others v Privalov and Others

[2007] UKHL 40, [2008] 1 Lloyd’s Rep 254 .......................... 10, 16, 20–1

Goldtron Ltd (Singapore) v Media Most BV (Netherlands) XXVIII YBCA

814 (2003) .............................................................................................. 145

Hilmarton v Omnium de Traitement et de Valorisation (OTV) XX YBCA

663 (1995) ................................................................................................ 35

Himpurna California Energy Ltd (Bermuda) v PT (Persero) Perushahaan

Listruik Negara (Indonesia), Final Award of May 4 1999, XXV YBCA 13

(2000); 14(12) Mealey’s IAR A1-A58 (1999) ......................................... 11

ICC Case No 10623 ................................................................................... 129

Iran Aircraft Ind v Avco Corporation 980 F 2d 141 (2nd Cir 1992); XXVIII

YBCA 599 (1993) ................................................................................... 145

K/S Norjarl A/S v Hyundai Heavy Industries (1992) 1 QBD 863; [1991] 1

Lloyd’s Rep 260; On appeal to CA [1991] 1 Lloyd’s Rep 524

........................................................................................... 48, 63–4, 137–41

Matermaco SA v PPM Cranes Inc and Others, decision of the Tribunal

de Commerce, Brussels of 20 September 1999, YBCA, 2000, Vol XXV,

p. 673 ........................................................................................................ 19

Minmetals (Germany) v Ferco Steel XXIV YBCA 739 (1999) ............... 145

Parsons & Whittemore Overseas Co. Inc. v Societe Generale I’Industrie de

Papier (RAKTA) 508 F 2d 969 (2nd Cir 1974) .................................... 145

Peterson Farms Inc v C & M Farming Ltd. [2004] EWHC 121 (Comm)

4 February 2004 ....................................................................................... 12

Prima Paint Corp v Flood & Conklin Mfg Co, 388 US 395 (US S Ct 1967)

.................................................................................................................. 21

Raffineries de Petroles D’Homs et Bamas v ICC, decision of Tribunal of

First Instance, Paris, 28 March 1984 ....................................................... 75

Raoul Duval v V Rev Arb 411 (1996) ....................................................... 148

Republic of Indonesia v Himpurna California Energy Ltd XXV YBCA 469

(2000) ..................................................................................................... 129

Road Rejuvenating & Repair Services v Mitchell (1992) 1 ADRLJ 46 ... 173

Robinson v Moody (1995) ADRLJ 262 68

Ruolas v Professor J Tepora, Case No KKO 2005:14, decision of Supreme

Court Finland 31 January 2005 ADRLJ 262 ......................................... 170

Sacheri v Robotto, Vol XVI YBCA 156 (1991) ........................................... 66

Sea Containers Ltd v ICT Pty Ltd [2001] NSWCA 84 ............................. 140

Table of cases xiii

Siemens AG & BKMI Industrienlagen GmbH v Dutco Construction Co,

Cass Civ 7 Jan 1992, YBCA, 1993, Vol XVIII, p. 140 ............................ 101

SNF SAS v ICC, Paris Court of Appeal, First Section C, decision of 22

January 2009, 07-19492 ........................................ 69, 107–8, 110, 122, 173

Spiliada Maritime Corpn v Cansulex Ltd [1987] AC 460 ......................... 90

State of Israel v Desert Exploration 1976 Incident (1992) 3 Am Rev Int

Arb 177 ................................................................................................... 147

State of Israel v National Iranian Oil Company with Note by P Fouchard,

Rev Arb (2002) 407 .................................................................................. 90

Town Centre Securities Plc v Leeds City Council [1992] ADRLJ 54 ..... 138

Tradax Export SA v Volkswagenwerk AG (‘La Loma’) [1970] 1 Lloyd’s

Rep 62, [1970] 1 QB 537 ......................................................................... 68

York Hannover Holding AG (Switzerland) v AAA, Vol XX YBCA (1995)

856 ................................................................................................. 128, 146

Table of statutes

International Conventions

United Nations Convention on Recognition and Enforcement of Arbitral

Awards, New York, 10 June 1958

........................................... 4, 9, 17–20, 23, 34–6, 38, 41, 43, 120, 151, 162

European Convention on International Commercial Arbitration, Geneva,

21 April 1961 ...................................................................................... 20, 23

EC Regulation No. 593/2008 of the European Parliament and of

the Council of 17 June 2008 on the Law Applicable to Contractual

Obligations (Rome 1) ............................................................. 159–61, 163

Model Law

United Nations Commission on International Trade Law Model Law on

International Commercial Arbitration, 21 June 1985, as amended 2006

........................................... 2–4, 14, 18–19, 41, 64, 66–7, 126, 144, 147, 15

National Laws

Argentina

National Code of Civil and Commercial Procedure Law 17.454 of

19 September 1967, as reformed by Law 22.434 of 16 March 1981, text

consolidated according to Decree 1.042 of 1981 – Book IV Arbitral

Procedure ............................................................................................. 4, 65

Brazil

Arbitration Law No 9.307 of 23 September 1996 ........................... 4, 60, 91