Drafting the International Arbitration Clause: Part Four

Originally published by Beth Graham.

Corporate Counsel has published the final installment of “Drafting the International Arbitration Clause.” In “Appealing an International Arbitration Award,” Ann Ryan Robertson, Derrick Carson, and David E. Harrell Jr. explore the potential for appellate review of an arbitral award under the United Nations Commission on International Trade Law (“UNCITRAL”), International Chamber of Commerce (“ICC”), International Centre for Dispute Resolution (“ICDR”), and London Court of International Arbitration (“LCIA”) Rules.

According to the authors:

It is generally accepted that an international arbitration award is final and binding. Unlike a court judgment that can be appealed for factual and legal review, an arbitration award typically can only be challenged based on procedural irregularities, lack of jurisdiction, lack of arbitrability or violation of public policy.

While some exceptions exist, they are limited in application. For example, the English Arbitration Act of 1996 permits appeal on a point of English law if all parties agree or the court grants leave to appeal. The court’s power to grant leave, however, is restricted and requires the court to determine not only that resolution of the question will substantially affect the rights of one or more parties, and that the question was one the tribunal was asked to decide, but also that the tribunal’s decision was obviously wrong or “the question is one of general public importance and the decision of the tribunal is at least open to serious doubt.”

For many businesses, the limited bases for challenging an award, coupled with the ability to enforce the award under the New York Convention, make international arbitration the preferred method (some would say the only method) for resolving transnational disputes. For other businesses, the lack of an ability to challenge the factual and legal decisions underlying the award is a serious flaw. Consequently, some practitioners have attempted to expand the scope of judicial review through agreement of the parties.

The authors conclude the series by stating:

As demonstrated by this four-part series, all arbitration rules are designed to provide a procedural framework for conducting arbitrations, but the rules are not fungible. Significant differences exist in the manner in which the various arbitral institutions and UNCITRAL handle the issues of joinder, consolidation, arbitrator appointment in multiparty cases, emergency arbitrators and appellate review. These differences, in turn, have the potential to impact favorably or unfavorably on the ultimate resolution of a dispute. The knowledgeable drafter will consider each of these differences when drafting the arbitration clause.

We invite you to check out Disputing’s recent blog posts on Parts One, Two, and Three of this worthwhile series.

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