LAWS8576, 9576 INTERNATIONAL COMMERCIAL ARBITRATION - 2008
INTRODUCTION
Arbitration is a major method of dispute resolution internationally. This course considers its essential
features.
Students should:
1
understand the legal and procedural regime for international arbitration in Australia;
2
understand the nature of arbitration as a form of dispute resolution and its advantages and
disadvantages over litigation.
3
understand the relationship between domestic courts and arbitration, and the autonomy of the
arbitral process;
4
understand some of the procedures of some of the major international arbitral institutions
(UNCITRAL); and
5
understand issues involved in the drafting and enforcing of arbitration agreements and awards.
TEACHING AND LOCATION OF CLASS
The class will meet on 22 to 25 July, and 1 August 2008, between 9 and 5. The class will be held at the
Law School
The class will be seminar style and involve discussions of materials in class. Students should try to read
over material in preparation for the class.
Contact Details of Course Leader
Kanaga Dharmananda
Francis Burt Chambers
Telephone:
9220 0401
Email:
skd@francisburt.com.au
ASSESSMENT
Class Participation – 20%
Students will be assessed on the quality of their participation in classroom discussions.
Written Research Assignment – 80%
(approx 6000 to 7000 words on a topic to be agreed with the supervisor)
TO BE HANDED IN 1 October 2008.
Students should be aware of the Faculty policies concerning ethical scholarship and assignments that
affect all units, available here http://www.lawstudents.law.uwa.edu.au/index/assessment_information.
Supplementary assessment is not available in this unit.
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MATERIALS
There are many cases and articles in the area. It is not intended to burden you with volumes of material
but to take you to a selection of material and international materials. There is no prescribed text for the
subject.
Students may find the following text useful:
A Redfern and M Hunter, The Law and Practice of International Commercial Arbitration (4th ed 2004)
See also:

Website of UNCITRAL.

International Chamber of Commerce - a leading international arbitral institution.
Essential Materials

The International Arbitration Act (including the United Nations New York Convention and the
Model Law)

UNCITRAL Rules

ICC Rules
OVERVIEW OF COURSE IN DAYS AND TOPICS
Day 1
-
Topics 1 and 2
Day 2
-
Topics 3 and 4
Day 3
-
Topics 5 and 6
Day 4
-
Topics 7 and 8
Day 5
-
Topics 9 and 10
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READING GUIDE
TOPIC 1 - The Nature of International Arbitration
1
Introduction
2
Arbitration (international versus domestic): its nature
3
The advantages and disadvantages of arbitration
Reading
Redfern and Hunter 1-30
Article by Buhring-Ule, Varady, Barcelo, Von Mehren, 25-27
Goode “Dispute Resolution in the Twenty-First Century”
Brower, “W(h)ither International Commercial Arbitration?” (2007) Arbitration International 181
TOPIC 2 - Applicable Law in International Arbitration
1
The law governing the substance and the arbitration agreement (including Lex Mercatoria)
2
Mandatory rules
3
The law governing arbitral procedure and the procedural rules of arbitration
Reading
Bernstein’s Handbook of Arbitration and Dispute Resolution Practice (2003) pp 673-680
Substantive Law
Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418
The Star Texas [1993] 2 Lloyd’s Rep 445
International Arbitration Act 1974 (Cth) Sch 2 UNCITRAL Model Law Article 28
Article 28 of the Model Law
ICC Arbitration Rules Art 17
UNIDROIT Principles of International Commercial Contracts (see www.unidroit.org/english/home)
Mandatory Rules
Carriage of Goods by Sea Act 1991 (Cth) s11
Akai Pty Ltd v People’s Insurance Co Ltd (see above)
Insurance Contracts Act 1984 (Cth)
Trade Practices Act 1974 (Cth) s67
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Arbitral Procedural Law
Bay Hotel and Resort Ltd v Cavalier Construction Co Ltd [2001] UKPC 34
Union of India v McDonnell Douglas Corporation [1993] 2 Lloyd’s Rep 48
American Diagnostica Inc v Gradipore (1998) 44 NSWLR 312
Dharmananda, “The Unconscious Choice – Reflections on Determining the Lex Arbitri” 19 Journal
of International Arbitration 151
TOPIC 3 - Arbitration Agreements and Compelling Arbitration
The arbitration agreement is the fundamental to the arbitral process. Without it no arbitration can exist.
Enforcement of agreements under Australian law is dealt with under both the New York Convention and
the Model Law.
1
The Nature of an “Arbitration Agreement”: Article II(1) and (2) of the New York Convention and
Article 7 of the Model Law
2
Stay of Proceedings under the New York Convention and the Model Law and Defences
3
Stay of Proceedings under the Uniform State and Territory domestic arbitration legislation
Stays are also discussed in Topic 6
Reading
The Nature of an “Arbitration Agreement”, Arbitrability, and Construction
Redfern and Hunter, 135-159
APC Logistics Pty Ltd v C J Nutracon Pty Ltd [2007] FCA 136
William Company v Chu Kong Agency Co Ltd [1995] 2 HKLR 139
Carob Industries Pty Ltd v Simto Pty Ltd (1997) 18 WAR 1
N Kaplan, “Is the Need for Writing …Out of Step With Commercial Practice?” (1996) 12 Arbitration
International 27, 29-30 in Varady et al, International Commercial Arbitration (1999) 154-155
Contec Corporation v Remote Solution Col., Ltd (2005) 398 F.3d 205
Comandate Marine Coy v Pan Australian Shipping Pty Ltd (2006) (157) FCR 45
Paharpur Cooling Towers Ltd v Paramount (WA) Ltd [2008] WASCA 110
See also reading for Topic 6 as these topics are closely related.
TOPIC 4 - The Australian Regime and an Introduction to the Model Law
In Australia, the key Act is International Arbitration Act 1974 (Cth). This includes the 1958 New York
Convention on the Recognition and Enforcement of Arbitral Awards (Sch 1), the 1985 UNCITRAL
Model Law on International Commercial Arbitration (Sch 2) and the International Convention on the
Settlement of Investment Disputes (Sch 3). The provisions of the uniform State and Territory legislation
for domestic arbitrations (Commercial Arbitration Act) will continue to apply to some international
arbitrations in Australia.
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The Australian Regime

The International Arbitration Act and the Commercial Arbitration Act

Scope of Application of the Model Law: “International Commercial Arbitration”

“Opt out” and “opt in” provisions of the Model Law
Reading
Extract from Tweeddale & Tweeddale, A Practical Approach to Arbitration Law ipp 310-326
C Croft, “Australia Adopts the UNCITRAL Model Law” (1989) 5 Arbitration International 189
Pryles, “Legal Issues Concerning International Arbitrations” (1990) 64 ALJ 470
International Arbitration Act 1974 (Cth)
Aerospatiale Holdings Australia v Elspan International Ltd (1992) 28 NSWLR 321
American Diagnostica Inc v Gradipore (1998) 44 NSWLR 312 (see above)
Eisenwerk v Australian Granites Ltd [2001] 1 Qd R 461
Comandate Marine Coy v Pan Australian Shipping Pty Ltd (2006) (157) FCR 45 (see above)
ICC Rules of Arbitration
TOPIC 5 - Appointment, Qualifications and Conduct of Arbitrators and conduct of
Arbitrations 1
Appointment and Qualifications under the UNCITRAL Model Law and ICC Rules
2
Impartiality and Misconduct under the UNCITRAL Model Law, and ICC Rules
3
Challenge and Removal
4
Evidence gathering and Procedure
Reading
Qualifications and Appointment
UNCITRAL Model Law Arts 11, 12, 34 (Sch 2 to International Arbitration Act)
ICC Rules, Art 8, 9
Craig, Park & Paulsson’s Annotated Guide to the 1998 ICC Arbitration Rules 75-83
Impartiality
UNCITRAL Model Law Arts 12, 13, 34, 36 (Sch 2 to International Arbitration Act)
ICC Rules Arts 7, 11
Gascor v Ellicott [1997] 1 VR 332
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AT & T Corp v Saudi Cable Co [2000] 2 Lloyd’s Rep 127
G Bernini, Report on Neutrality, Impartiality and Independence in Varady et al, International
Commercial Arbitration (1999) 272-281
Misconduct
UNCITRAL Model Law Arts 5, 12, 13, 14, 18, 19, 20, 22, 24, 25, 27, 34, 36 (Sch 2 to International
Arbitration Act)
ICC Rules Arts 15, 21
Gas & Fuel Corporation of Victoria v Wood Hall [1978] VR 385
Evidence and Procedural Matters
Petrochilos, Procedural Law in International Arbitration (2004) 218-223
IBA Rules on Taking Evidence
Style and Reid, “The Challenge of Unopposed Arbitrations” (2000) 16 Arbitration International 219
Ball, Role of the Courts in a System of National and International Commercial Arbitration in 22
Arbitration International 73
Separability and Kompetenz-Kompetenz
Premium NAFTA Products Ltd v Fili Shipping Company Ltd [2007] UKHL 40
UNCITRAL Model Law Art 16 (Sch 2 to International Arbitration Act)
ICC Rules Art 6(2), (4)
Ferris v Plaister (1994) 34 NSWLR 474
Cossio, “The Competence – Competence Principle Revisted” (2007) 24 Journal of International
Arbitration 231
TOPIC 6 – Arbitration and the Courts
Anti-suit injunctions
XL Insurance v Owens Corning [2000] 2 Lloyd’s Rep 500
Stay of Proceedings
International Arbitration Act 1974 (Cth) s7, Sch 2 UNCITRAL Model Law Article 8
Francis Travel Marketing Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160
BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd [2008] FCA 551
Recyclers of Australia Pty Ltd v Hettinga Equipment Inc [2000] FCA 547
Clough v Oil Natural Gas Coy (No 3) [2007] FCA 2082
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Origin Energy Resources Ltd v Benaris International NV [2002] TASSC 50 and (No. 2) [2002]
TASSC 104
Carriage of Goods by Sea Act 1991 (Cth) s11
Trade Practices Act 1974 (Cth) s67
Stericorp Ltd v Stericycle Inc [2005] VSC 203
Sabah Shipyard (Pakistan) Ltd v Government of Pakistan [2004] SGHL 109
TOPIC 7 Awards
On the making of the decision: see UNCITRAL Rules, ICC 1998 Rules art. 25. Recall that of the major
international arbitral institutions only ICSID expressly gives the right to enter separate/dissenting
opinions. Separate and dissenting opinions are usually discouraged.
Interim Award
It is usual to give the tribunal the power to make interim awards, and tribunals most certainly have an
implied power to do so. These awards are most commonly given on jurisdiction and applicable law;
and there are sometimes separate awards on liability and on the quantum of compensation. See, eg,
UNCITRAL Rules, art. 21.
Default Awards
Tribunals are usually given the power to render an award even if one party fails to participate in the
proceedings. Such provisions apply the principle of the non-frustration of the award. See, eg, ICC
1998 Rules art. 6, 21(2); UNCTRAL Model Law article 25.
Consent Awards
Tribunals may be empowered to record the terms of an agreed settlement as a consent award, thus
enabling the settlement to be enforced in the same manner as any other arbitral award. See, eg,
UNCITRAL Rules, art. 34.1; ICC 1998 Rules art. 26; UNCITRAL Model Law, article 30.
Rectification and Interpretation
Many sets of arbitration rules provide for the rectification of minor errors in the award, and for the
tribunal (or a newly constituted tribunal) to give an interpretation of the award, on the request of one or
both parties. See, eg, UNCITRAL rules, arts. 35-37; UNCITRAL Model Law, art. 33.
Validity of Awards
The tribunal is under a duty to ensure, so far as possible, that the award is enforceable. This demands,
in particular, attention to any requirements imposed by the tribunal’s own rules and by the lex arbitri.
See, eg, ICC Rules, art. 27; UNCITRAL Rules, art. 32; UNCITRAL Model Law, art. 31.
Effect of Awards
A final and binding award has the effect of res judicata. As between the same parties, a right, question
or fact distinctly put in issue and distinctly determined by a tribunal cannot subsequently be disputed.
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There can be no subsequent trial of the same claim: See Amco v Indonesia (Resubmission:
Jurisdiction), 89 ILR 552, 560.
The confidentiality of arbitral proceedings may impair the application of this principle. Esso/BHP v
Plowman, (1995) 183 CLR 10.
Challenging Awards (‘Recourse against award’)
Awards which are materially affected by procedural or other deficiencies may be challenged.
International commercial awards are challenged before municipal courts. See, eg, UNCITRAL Model
Law, article 34. ICC rules are scrutinized in order to minimize the risk of successful challenge. See
ICC 1998 Rules, art. 27.
Appeal and Challenge
UNCITRAL Model Law Art 34 (Sch 2 to International Arbitration Act)
Methanex Motanui Ltd v Spellman [2004] 3NZLR 454
Pacol Ltd v Joint Stock Co Rossakhar [2000] 1 Lloyd’s Rep 109
American Diagnostica Inc v Gradipore Ltd (see above)
Raguz v Sullivan [2000] NSWCA 240
Papua New Guinea v Sandline International [1999] QSC 68
Modification
UNCITRAL Model Law Art 33 (Sch 2 to International Arbitration Act)
ICC Rules Art 29
TOPIC 8 - Recognition and Enforcement of Awards
Reading
International Arbitration Act 1974 (Cth) ss 8, 9
New York Convention Arts IV, V, VII (Sch 1 to International Arbitration Act)
UNCITRAL Model Law Arts 35, 36 (Sch 2 to International Arbitration Act)
Hiscox v Outhwaite [1992] 1 AC 562
Resort Condominiums v Bolwell (1993) 118 ALR 655
Soleimany v Soleimany [1998] 3 WLR 811
Australian Granite Ltd v Eisenwerk Hensel [2001] 1 Qd R 461 (see above)
Hall Street Associates LLC v Mattel Inc (Supreme Court of US, 25 March 2008)
Toyo Engineering Corp v John Holland Pty Ltd [2000] VSC 553
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White & Kee, “Enforcement of Arbitral Awards Where the Seat of the Arbitration is Australia”,
(2007) 24 Journal of International Arbitration 515
Harris, “The ‘Public Policy’ Exception to Enforcement of International Arbitration Awards under
the New York Convention” (2007) 24 Journal of International Arbitration 9
TOPIC 9 - Privacy and Confidentiality
1
Privacy of Proceedings
2
Confidentiality of Proceedings
Reading
Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 (above)
Paulsson & Rawding “The Trouble with Confidentiality”
Thoma, “Confidentiality in English Arbitration Law: Myths and Realities About its Legal Nature”
(2008) 25 Journal of International Arbitration 299
Commonwealth of Australia v Cockatoo Dockyard Pty Ltd (1995) 36 NSWLR 662
International Arbitration Act 1974 (Cth) s24
Aerospatiale Holdings Ltd v Elspan International Ltd (1992) 28 NSWLR 321 (see above)
Hassneh Insurance Co of Israel v Mew [1993] 2 Lloyd’s Rep 243
TOPIC 10 – Exercises and Close
Reading
Yuen, “Arbitration Clauses in a Chinese Context” (2007) 24 Journal of International Arbitration
581
Bond “How to Draft an Arbitration Clause” Journal of International Arbitration

Problems will be distributed in class

Problem Discussion – Negotiating a clause and advice on fact scenario

Paper Topics to be discussed with the Course Leader
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