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OER – The Legal Framework (Rules and Procedures) of Arbitration

Arbitration in compare to other Alternative Dispute Resolutions (ADR) seems to be

more formal and rule-based. Hence, similar to the court, it requires a set of defined
rules and procedures. Arbitration rules, in fact, are the set of provisions that governs
the arbitration process. It, therefore, deals with the establishment and composition of
the arbitration tribunal, the proceedings of arbitration, authorities and responsibilities
of the tribunal and the parties, the issuance of award, and its correction and
interpretation, costs, and so on. Most of the arbitration rules are default rules that the
disputants can contract out by modifying and stipulating them otherwise in their
agreement. However, in practice it’s not possible to write down all the rules and
procedures of arbitration in the contract. Instead, parties give reference to their
choice of rules. However, the legal framework of arbitration could go beyond this to
also include mandatory rules concerning the recognition of arbitration agreement, the
scope of arbitration, the level of state/court intervention, and the value and
enforcement of arbitration award. Therefore, depending on the legal context/system
these provisions largely affect the process and its outcome.

Despite its international recognition, there is no specific and unified legal framework
for the arbitration. The legal regime and rules of arbitration could be classified in the
following three categories:

1. Institutional Arbitration Rules

2. National Rules (Laws) Of Arbitration
3. International Legal Instruments Of Arbitration

Institutional Arbitration Rules

Several institutions exist in the national and international level that provide arbitration
services. The International Council for Commercial Arbitration (ICCA) website
provides a searchable list of leading arbitration institutions, from over the word. Just
to name some, following are examples of well-known international arbitration
institutions:

1. International Chamber of Commerce (ICC);

2. Singapore International Arbitration Centre (SIAC);
3. Hong Kong International Arbitration Centre (HKIAC);

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4. Swiss Chambers' Arbitration Institution SCAI;
5. American Arbitration Association (AAA);
6. London Court of International Arbitration (LCIA);
7. European Court of Arbitration (ECA);
8. China International Economic and Trade Arbitration Commission (CIETAC);
9. Permanent Court of Arbitration (PCA).

Given the private nature of arbitration, its administration and governing procedures
remain with the discretion of the service provider, if the parties do not agree
otherwise. While institutional rules and procedures of arbitration is a factor in
choosing the proper service provider, it also helps parties in defining and predicting
the process. Therefore, most of the popular arbitration institutions have developed
their own arbitration rules. However, other, small, institutions may use the
established rules by well-known institutions. By choosing an arbitration institution or
by giving reference to its arbitration rules, the parties in fact contracts out from the
default rules of the national laws and agrees to the application of these rules,
instead.

The ICC Arbitration Rules is an example of the institutional arbitration rules. Several
other arbitration institutions also apply the ICC Arbitration Rules in their practices, as
well as national laws recognize and give reference to the ICC Arbitration rules.

With the establishment of the Court of Arbitration, the first version of the ICC
Arbitration Rules was introduced in 1922. It was then amended several times. The
last version of the rules is enforceable since 1 January 2021.

Under the ICC Arbitration Rules, the International Court of Arbitration is the
responsible body for the administration of arbitration. The rules further contains
provisions mainly regarding the commencement of the arbitration, the composition
and establishment of the arbitration tribunal, the proceeding of arbitration, issuance
of the award and its correction, interpretation and enforceability of the award, and
finally the costs of arbitration.

National Rules (Laws) of Arbitration

Countries have enacted legislations to govern the arbitration. As mentioned before,
parties can set out the rules of procedure in their arbitration agreement, including

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selection of a specific national arbitration law or institutional rules as their choice of
arbitration rules. However, if no rules and procedures have been chosen, as a
general principle, the rules of the place of arbitration seat will be applied as a default
rule. Nonetheless, the mandatory provisions of the domestic laws, of both the place
of arbitration seat and the place of enforcement, are out of the authority of the
disputants to change. These rules have a large impact on the arbitration, such as;
the validity of the arbitration agreement, the scope of arbitration, the degree of court
intervention, challenges of the award and its enforcement, and so on. For instance,
look at the mandatory provisions of the England Arbitration Act 1996, at Schedule 1.

Also, keeping in mind that in some jurisdictions the scope of arbitration is wide. For
instance, arbitration is a dispute resolution for family matters too, in Canada.
However, our concentration, here, is on the commercial disputes, only.

Where national laws could be seen limited to domestic arbitrations, they provide a
legal framework for the international arbitrations too. In the UK, for instance, the
Arbitration Act 1996, which does not cover Scotland, applies to both domestic and
international arbitrations. In some other jurisdictions separate rules/legislations exist,
for each. How is this in your home country, if other than the UK?

For the purpose of the unification as well as to assist the states with better
structuring their national arbitration laws, UNCITRAL introduced the Model Law on
International Commercial Arbitration, on 21 June 1985, which is later revised in
2006. It encompasses the entire process of arbitration from the agreement of the
parties to the enforcement of the arbitration award. The UNCITRAL website provides
the list of legislations in 78 states that have adopted or has been influenced by the
model law. Nonetheless, national rules of arbitration are still disparate. Some
countries haven’t adopted a specific legislation for the process yet. A law firm’s
website has gathered more than 190 national rules or laws regarding arbitration. In
federal regimes, in addition to the federal arbitration law, state arbitration laws might
also exist.

International Legal Instruments of Arbitration

Arbitration has been widely recognized in the international sphere. UNCITRAL is one
of the main institutions that has played a vital role in developing the international
legal framework of arbitration. In addition to the guidelines and recommendations for

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states and arbitration institutions, the Model Law on International Commercial
Arbitration is one of its biggest contributions for the unification of national legal
framework of arbitration, as discussed above. However, more relevant to the
international legal framework of arbitration, following are the two important legal
instruments of arbitration:

- Convention on the Recognition and Enforcement of Foreign Arbitral

Awards (the "New York Convention"): The New York Convention is the
successor and the continuation of the legal framework under the ‘Arbitration
Clauses Protocol 1923' and the 'Geneva Convention 1927 - Convention on the
Execution of Foreign Arbitral Awards'. The idea of New York Convention was
initiated by the International Chamber of Commerce. Then, the UN Economic
and Social Council further developed the draft convention, which was discussed
and resulted in the New York Convention in the UN Conference on International
Commercial Arbitration, from 20 May – 10 June 1985. The convention was
opened for signature on 10 June 1985 and entered into force on 7 June 1959. It
is widely accepted, and is open for accession to new members. Till date, the
convention has been ratified by 172 countries. See the list of contracting parties
to the convention.

The main objective of the convention is to ensure enforcement of the non-

domestic arbitral awards by the contracting parties. It further requires the
judiciary of contracting parties to give full effect to the arbitration agreements of
disputants by denying access of the one party, in contradiction to their
arbitration agreement, to the court. However, the convention also contains
provisions that provide grounds for refusal of enforcement.
The website of UNCITRAL also contains very good information and resources
regarding the convention, including guidelines, recommendations, and case law.
- The UNCITRAL Arbitration Rules: As part of its mission, UNCITRAL
adopted the Arbitration Rules, in 1976. It was then amended in 2006 and later in
2010. The Rules consist of 43 articles that contain procedural provisions from the
establishment and composition of the arbitration to the issuance and interpretation
of the arbitral award.

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The UNCITRAL Arbitration Rules was intended to help parties in determining rules
and procedures for the ad hoc arbitrations, (other than those administered by the
institutional rules), in international commercial disputes. However, it has been
adopted by several arbitration institutions too. The UNCITRAL website provides a list
of arbitration centres that have rules based on or inspired by the UNCITRAL
Arbitration Rules. In addition, these rules are also used in state-state and investor-
state disputes. A new paragraph (article 1, paragraph 4) was added to the revised
2010 version of Rules in 2013 to incorporate it on Transparency in Treaty-based
Investor-State Arbitration. In 2021, UNCITRAL adopted the Expedited Arbitration
Rules, which required the addition of another paragraph (article 1, paragraph 5) to
the UNCITRAL Arbitration Rules 2010. The latter, with additions, is therefore the
complete and standard version of the UNCITRAL Arbitration Rules.

Further activities:

Prepare answer for the following questions. Students will be provided with a Padlet
link/QR code, for each question to submit their responses. Students will also be
asked to read and comment on other’s responses too.

1. What features and Characteristics of the UNCITRAL Arbitration Rules can

you identify?
2. How is the UNCITRAL Arbitration Rules different from the UNCITRAL Model
Law on International Commercial Arbitration?
3. Can you identify some differences and similarities between the UNCITRAL
and the ICC arbitration rules and procedures?
4. What is the correlation between national arbitration law, the institutional
arbitration rules, and the UNCITRAL Arbitration Rules? How the choice of
one could impact the other?
5. Is there a need of unified legal framework for Arbitration? Why, and how is it
possible?
6. Think about the comparison of the UNCITRAL Arbitration Rules with your
chosen rules of arbitration of the legal system of your home country.

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Resources and Further Reading:

Blackaby, Nigel, Constantine Partasides, Alan Redfern, and Martin Hunter. Redfern
and Hunter on International Arbitration. Seventh edition, Student version.
Oxford: Oxford University Press, 2022.

Caron, David D. The UNCITRAL Arbitration Rules: A Commentary / David Caron,

Matti Pellonpää, Lee Caplan. Oxford commentaries on international law.
Oxford: University Press, 2006.

The UNCITRAL Arbitration Rules: A Commentary : (With an Integrated and

Comparative Discussion of the 2010 and 1976 UNCITRAL Arbitration Rules).
Second edition. Oxford commentaries on international law. Oxford, United
Kingdom: Oxford University Press, 2013.

Cordero-Moss, Giuditta. International Commercial Arbitration: Different Forms and

Their Features / Edited by Giuditta Cordero-Moss. Cambridge: University
Press, 2013.

Croft, Clyde. A Guide to the UNCITRAL Arbitration Rules / Clyde Croft, Christopher
Kee, Jeff Waincymer. Cambridge: University Press, 2013.

Ferrari, Franco, Friedrich Rosenfeld, and Charles T. Kotuby. Recognition and

Enforcement of Foreign Arbitral Awards: A Concise Guide to the New York
Convention’s Uniform Regime. Cheltenham, UK: Edward Elgar Publishing,
2023.

Verbist, Herman, and Erik Schäfer. ICC Arbitration in Practice. Alphen aan den Rijn:
Kluwer Law International, 2015.

Attribution License:
The Legal Framework (Rules and Procedures) of Arbitration by Amanullah
Ahmadzai of the University of Edinburgh is licensed under a Creative Commons
Attribution-ShareAlike 4.0 International (CC BY-SA 4.0).

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