Powers, Duties and Jurisdiction of the Arbitral Tribunal.
Arbitration and Alternative Dispute Resolution.
Arbitral rules — Arbitrators — Recognition and enforcement.
It is generally acknowledged today that the legal basis for the arbitral tribunal’s competence to issue ‘interim orders of protection’ or ‘conservatory measures’ lies in its competence to decide on the merits of the dispute. In authorizing a private tribunal to decide existing or future disputes between them, the parties have vested in the arbitrators the inherent power to issue measures of provisional relief connected to the subject matter of the dispute, which serve to safeguard the efficiency of the tribunal’s decision-making. One is dealing here with an ‘accessory’ competence of the arbitrators.
The powers of an arbitral tribunal are those that the parties have conferred upon the arbitral tribunal in order that it can fulfil its task. These powers can be granted explicitly in the arbitration agreement or implicitly through reference to institutional or other rules (e.g. UNCITRAL Arbitration Rules).
These powers are conferred within the limits of the applicable law, which in turn are generally those of the law of the place of arbitration, or the law applicable to the arbitration agreement, if this law is different from that applicable at the place of arbitration.
Is the Arbitration Clause valid?
The clause mentions the word ‘arbitration’ thus outlining the parties’ intention . However the arbitration clause needs to be examined further as stating arbitration within the heading is not sufficient to prove that it’s an arbitration clause but needs to be arbitral in character or can be assessed by being commercial in nature.
The clause must be clearly worded to state the parties agreement to enter arbitral proceedings should a dispute arise and should not be wholly or partly ambiguous. In this case if such badly drafted clauses as “arbitration in London – English Law to apply,” and “arbitration to be settled in London,” have been accepted as valid arbitration clauses then I would not foresee a problem in this case.
Whether the Arbitral Tribunal has jurisdiction?
The arbitration clause refers to ad-hoc arbitration in London but states that the governed law is by New York law. The parties are free to choose the “seat of arbitration,” but in this situation there is confusion arising from the clause as the ‘seat’ being London means that the Arbitration Act 1996 is applicable but this may conflict with New York law? The procedural law of the arbitration is determined by the seat of the arbitration , in this case giving English law jurisdiction. In the clause the parties have defined London as the juridical seat therefore that is “where the arbitrator or arbitrators are to be appointed.”
In absence of an agreed location the agreement of institutional rules can determine the juridical seat, this was given when parties agreed for arbitration to take place under the LCIA Rules which was sufficient to prove they had agreed a juridical seat. Furthermore the ICC Rules determines that “the place of arbitration shall be fixed by the International Court of Arbitration, unless agreed upon by parties,” and the UNCITRAL states that “unless the parties have agreed upon the place where the arbitration is to be held, such place shall be determined by the arbitral tribunal, having regard to the circumstances of the arbitration.” The international arbitration tribunal therefore in this situation have the power to determine the juridical seat and should this be London then the tribunal “or person vested by the parties,” can choose the juridical seat.
Under the Act the parties are free to agree a foreign law which can be expressed or implied under a non-mandatory provision of the act. Within this case the parties should have an agreed list of non-mandatory provisions that New York Law is to replace, to ensure that the arbitration agreement is specific and there are no law conflicts or ambiguous wording. The use of foreign law with the Arbitration Act 1996, the parties should note “it is important to remember that matters in the foreign law which conflict with the mandatory provisions of the Act would not be effective at all.” It is usually more popular to have the law, lex loci arbitri as there is less chance of error within the arbitration agreement, i.e. in this case that the seat is London and is governed by the Arbitration Act 1996. It is not uncommon for parties to choose a juridical seat which is neutral and outside of the country upon where the dispute originates, as this is a particular advantage of arbitration as opposed to litigation.
Furthermore within a recent case a joint venture of an Indian company but the arbitration clause referred to the venue as London (ICC Rules) but the substantive law of contract to be Indian Law, thus a confliction in law. The court held that “there is an express designation of the arbitration venue as London and no designation of any alternative place as the seat..the inexorable conclusion is…that London is the judicial seat and English law the crucial law.”