UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT Dispute Settlement International Commercial Arbitration 5 8 Court Measures UNITED NATIONS New York and Geneva 2005 Dispute Settlement ii NOTE The Course on Dispute Settlement in International Trade Investment and Intellectual Property consists of forty modules This module has been prepared on the basis of a first draft by Mr Rodrigo P Correa Gonzalez at the request of the United Nations Conference on Trade and Development UNCTAD The views and opinions expressed in this module are those of the author and not necessarily those of the United Nations WTO WIPO ICSID UNCITRAL or the Advisory Centre on WTO Law The designations employed and the presentation of the material do not imply an expression of any opinion whatsoever on the part of the United Nations concerning the legal status of any country territory city or areas or of its authorities or concerning the delimitations of its frontiers or boundaries In quotations from the official documents and the jurisprudence of international organizations and tribunals countries are designated as reported The United Nations holds copyright to this document The course is also available in electronic format on the UNCTAD website www unctad org Copies may be downloaded free of charge on the understanding that they will be used for teaching or study and not for a commercial purpose Appropriate acknowledgement of the source is requested UNCTAD EDM Misc 232 Add 42 Copyright United Nations 2005 All rights reserved 5 8 Court Measures iii TABLE OF CONTENTS Note ii What You Will Learn 1 1 The proper degree of court intervention 1 1 The proper degree of court intervention 1 2 Test your understanding 3 3 4 2 Factors determining the degree of court intervention 2 1 Determining the relevant jurisdictions 2 2 Factors determining court powers in connection with international commercial arbitration 2 3 Maximum and minimum degree of court intervention 2 4 Domestic laws and court practices 2 5 International treaties multilateral and bilateral 2 6 UNCITRAL Model Law 2 7 Arbitration agreement 2 8 Expansion and exclusion of court powers by agreement 2 9 Test your understanding 5 5 6 6 9 11 11 12 12 14 3 Interim measures of protection 3 1 Enforcement of measure of protection taken by an arbitral tribunal 3 2 Interim measures of protection taken by courts 3 3 Test your understanding 15 4 Court intervention in the composition of the arbitral tribunal 4 1 Appointment of arbitrators 4 2 Challenge of arbitrators 4 3 Test your understanding 21 21 24 26 5 Setting aside the award 5 1 Control of adjudication in court litigation 5 2 Control of adjudication in arbitration 5 3 Appeal to a second level arbitral tribunal 5 4 Control of arbitration at time of enforcement 5 5 Setting aside an award 5 5 1 Proper jurisdiction to set aside 5 5 2 Effects of an award set aside 5 5 3 Staying enforcement while application to set aside is pending 5 5 4 Level of control 5 6 Test your understanding 27 27 27 27 28 28 29 30 31 32 33 6 Case studies 6 1 Cases to be studied in groups 6 2 Other case studies 6 3 Mastery test Yes or No test 35 35 37 40 15 17 19 Dispute Settlement iv 7 Further reading 7 1 Important websites 7 2 Printed publications 41 41 41 5 8 Court Measures 1 WHAT YOU WILL LEARN This module discusses some of the main problems presented by the involvement of state courts in international commercial arbitration It does not treat enforcement of the award which is the subject of a separate module 5 7 Recognition and Enforcement of the Award P Sarcevic In section 1 you will learn that the intensity of court intervention varies and that to establish its proper degree the expectations of the parties to the arbitration agreement need to be taken into consideration You will then learn in section 2 that the degree of court intervention depends on a number of factors among which the most relevant are the domestic law of the arbitral situs and the agreement of the parties International treaty law provides only the framework within which domestic laws and the parties determine the actual degree of court intervention Therefore not much can be said in general on the law that regulates specific court measures Accordingly the next sections point to the main problems you might confront in relation with the most typical court measures Section 3 takes up interim measures of protection Section 4 discusses court intervention in the appointment and challenge of arbitrators Finally section 5 introduces you to the setting aside of the award 5 8 Court Measures 3 1 THE PROPER DEGREE OF COURT INTERVENTION Objectives 1 1 Upon completion of this section you will have learned that both too little and too much court intervention in international commercial arbitration are undesirable You will also have learned that the ideal degree of court intervention depends not only on theoretical considerations but also on the expectations of the parties in a specific case Therefore it is a consideration that the parties should ideally pay attention to at the negotiation of the agreement to arbitrate The proper degree of court intervention By choosing arbitration parties expect to exclude courts from both the conduct of the proceedings and the adjudication of the case This expectation can easily be frustrated by various court measures A court can block an arbitration altogether by enjoining a party from participating therein It can also disturb arbitration proceedings by interfering with the composition of the arbitral tribunal by restraining foreign attorneys from representing a party in arbitration proceedings by hearing challenges against procedural orders of the arbitrators or by taking any other measure directed to control the course of the arbitral proceedings Finally courts can reverse the final award on appeal or deprive it of most of its legal force by setting it aside Arbitration only exists in the space allowed to it by courts Too much court intervention simply suffocates arbitration Notwithstanding the fact that arbitration exists to the extent that courts retreat it is also the case that arbitration cannot exist without some degree of court intervention At a minimum court intervention is needed to enforce the arbitral award when the losing party resists voluntary compliance But court measures in support of arbitration need not be limited to the enforcement of the final award Enforcement is often necessary for other decisions throughout the arbitration
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