Cap. 7 - The Art of Advocacy in International Arbitration
Cap. 7 - The Art of Advocacy in International Arbitration
Cap. 7 - The Art of Advocacy in International Arbitration
ADVOCACY
IN
INTERNATIONAL
ARBITRATION
SECOND EDITION
DOAKB1SHOP
and
EDWARD G. KEHOE
Editors
JURIS
Chapter 7
I. Introduction
In the fIrst edition of this book, we had taken the view that, in
international arbitration, advocacy was not limited to the oral
performance of counseL In our view, advocacy encompassed all the
aspects 0 f the dispute and all the strategic decisions to be made in the
case. Strategy in arbitration is multidimensionaL Unlike court
proceedings, arbitration leaves open a wide range of possibilities for
the litigants and it is for their advocate to make the best possible use
of these possibilities. The role of the advocate should thus not be
limited to delivering the best oral performance, but should also
extend to any important strategic decision to be made. Some authors
have expressed doubt as to the accuracy of this far-reaching
defmition of advocacy. 1 The reasons are understandable. However, it
seems that limiting advocacy to the oral argument of the advocate or
indeed to the examination of witnesses does not do justice to this
concept. We believe that the role of the advocate in an international
arbitration is much wider than that and that the input of a good
advocate can Inake the difference by choosing the right option from
the very beginning of a case.
Against this background, we have described in the fIrst edition of
this book various scenarios where a choice had to be made in an
attempt to identify what was the best choice for the good advocate.
173
174 .ART OF .LillVOC\CY IN INTERNATIONAL ARBITRATION
A party may seize State courts (in most cases its home courts),
either before the initiation of arbitral proceedings or once arbitration
has been initiated, in order to either have the arbitration agreement
annulled or have a judgment rendered on the merits. This happened
in the well-known West Tankers case where the ECl ruled on the
.\DVOC\CY IN PRACfICE 175
2 ECJ, February 10, 2009, case C-185/07, Allianz Sp~\, fonnerly Riwllone
Adriatica di Sicurta SpA v. \Vest Tankers Inc., in Les Cahiers de l'arbitrage, Gazette
du Palais 2009, july 17-18,2009, p. 51.
) (EC) Regulation N° 44/2001 of the Council dated December 22, 2000
regarding jurisdiction, the recognition and enforcement of judgments in civil and
commercial matters, OJEC N° L 012, January 16, 2001, p. 1-23.
176 ART OF ADVOCACY IN INTERNATIONAL ARBITRATION
-1 Regarding the preliminary question put fOlWard by the House of Lords, see
House of Lords, February 21, 2007, West Tankers Inc. v. RAJ Riunione Adriatiea di
Si(:urtd SpA and others, Revue Critique DIP, 2007, p. 434, note L. Usuruer. See also
S. Boilee, « Quelques remarques sur les i,!/ont'tions anti-suit visant d protiger fa ,'Ompitenee
arbitrale (on The Front Comor decision of the House of Lords) », Revue de
l'Arbitrage 2007,223.
5 Swiss federal tribunal (1 Sf Civil law division), IYfay, 14 2001, Fomento de
Constnmiones y Contratas SA v. Colon Container Terminal SA., Decision of the federal
Tribunal 127 III 279, ASA Bull, 2001, nO 3, p. 544. See on this decision J.-F.
Poudret, Note, Revue de l'arbitrage 2001, p. 835; M. Scherer, « When Should an
Arbitral Tribunal Sitting in Switzerland Confronted with Parallel Litigation ~\broad
Stay the Arbitration ?», ASA Bull, 2001, nO 3, p. 451 ; E. Geisinger and L. Levy,
« Lis Alibi Pendens in International Commercial . A..rbitration, Complex
Arbitrations », ICC Bulletin 2003, special issue., p. 53 ; C. Oetiker, « The principles
of Lis Pendens in International Arbitration: The Swiss Decision in }omento v.
Colon », Arbitration International, 2002, Vol. 18, No.2, p. 137 ; F. de Ly and A.
Sheppard, « IL>\ Final Report on Lis Pendens and Arbitration », International
Arbitration, 2009, Vol. 25, nO 1, p. 3 et seq., special p.27-28.
~-\DVOC-\CY IN PRACTICE 177
(. Swiss federal act on private international law (PILA), December 18, 1987,
.-\rt, 186 para. 1 bis, E. Gaillard, Ni'L].
7 Swiss Federal Tribunal (1st Civil law division), ~Jarch 6, 2008,
4.-\_500/2007, _-\S.-\ Bull, 2009, VoL 27, nO 1, p. 94.
1\ The arbitration agreement was drafted as follows: « [., ,] tutte Ie controversie
relative all'interpretazione e/o all'esecuzione del Contratto, 0 comunque derivanti
dal Contratto 0 in relazione allo stesso, saranno devolute alIa competenza esclusiva
178 ART OF ADVOCACY IN INTERNATION.AL ARBITRATION
~ Tribunal of ;\lilan, Judgment of February 13, 2008, 8th civil division, case.
N° 32406/:2006.
Iii Swiss Federal Tribunal, (1"8t civil law division), 4_-\_21O/2008/ech, October
:29,2008, X. JAil. Y Limited, _\.S"-\ Bull, 2009, Vol. 27, nO :2, p. 309.
180 ART OF ADVOCACY IN INTERNATIONAL A.RBITRl\TION
11 This is what the Federal Tribunal clearly stated in its recitals: "It is surprising
to observe that in its arbitration request, the complainant did not make any request
for relief apart from the one aiming at obtaining a declaration on the validity of the
nullification of the second amendment. Had it done so, it would only have been in
a position to pardy reject the financial claims put forward by the respondent, a
claim that the arbitral tribunal granted, on the principle, in its partial award. This
shows, once again, that the two aforementioned questions are inseparable owing to
their obvious connexity" ibid, p. 316-317.
12 Ibid, p. 319.
ADVOC\CY IN PRACTICE 181
void. This calls for a prima facie control of the existence and validity
of the arbitration agreement. 14 Case law nevertheless extended this
prima facie control to manifestly non-applicable clauses. 1s It is in
practice particularly difficult, if not impossible, for a litigant to seize
French courts, for tactical purposes, in order to derail arbitration
proceedings.
This is also the case in Switzerland. A ware of possible
international repercussions following the Pomento decision, which is
generally perceived as contrary to the interests of international
arbitration, the Swiss legislator amended Article 186 of the PIL Act
relating to the jurisdiction of the 'arbitral tribunal, by adding Article 1
bis thereto, which explicitly provides that: Tthe arbitrator] rules on its
own jurisdiction notwithstanding an action on the same matter alreac!J pending
between the same parties before a State tourt or another arbitral tribunal, unlus
serious reasons require the sUJpension of proceedings,:16 In addition,
Switzerland, like France, applies the negative effect of the principle of
competence-comp~tence when the seat of the arbitration is in
Switzerland. 17 The procedural strategy which consists in submitting a
14 Article 1458 CPC: "When a dispute that has been submitted to an arbitral
tribunal by virtue of an arbitration agreement is brought to a State court, the latter
must declare that it lacks jurisdiction unless the arbitration agreement is manifestly
null and void. In both cases, the court cannot automatically reveal that it lacks
jurisdiction". On the negative effect of the principle of competence-competence in
French law, see E. Gaillard and J. Savage (eds.), Fouchard Gaillard Goldman on
International Commercial Arbitration, Kluwer, 1999, para. 661 et seq.; E. Gaillard,
note ad 2nd civil chamber of the Court of cassation, May 10, 1995, Coprodag,
Revue de l'arbitrage 1995, 618; E. Gaillard, « L'effet negatif de la competence-
competence », in Etudes de procedure et d'arbitrage en l'honneur de Jean-Frans:ois
Poudret, Universite de Lausanne, 1999, pp. 387 et seq.
151st chamber of the Court of cassation, February 20, 2007, Revue de
l'arbitrage 2007, 775, note F.-X. Train.
16 Swiss federal act on private international law (PIL\), December 18, 1987,
art. 186 para. 1bis. For reactions of the doctrine against the tomento decision, see
above mentioned references, note 6.
17 On the negative effect of the principle of competence-competence when an
arbitration seat is located in Switzerland, see E. Gaillard « L'effet negatif de la
competence-competence », op. tit, p. 393; J.-F. Poudret, « Le pouvoir d'examen du
juge suisse saisi d'une exception d'arbitrage », ASA Bulletin 2005, 401;
,\DVOC\CY IN PRACTICE 183
of law (1) Unless otherwise agreed by the parties, the court may on the application
of a party to arbitral proceedings (upon notice to the other parties) determine any
question of law arising in the course of the proceedings which the court is satisfied
substantially affects the rights of one or more of the parties.•-\.n agreement to
dispense with reasons for the tribunal's award shall be considered an agreement to
exclude the court's jurisdiction under this section. (2) An application under this
section Shallllot be considered u11.less- (a) it is made with the agreement of all the
other parties to the proceedings, or (b) it is made with the permission of the
184 .ART OF ADVOCACY IN INTERNATIONAL ARBITRATION
tribunal and the court is satisfied-{i) that the detennination of the question is
likely to produce substantial savings in costs, and (n) that the application was made
without delay".
20 Arbitration Act, Section 72 (1) : "Sayipg for rights of a person who takes no
part in proceed.i.ng.s (1) A person alleged to be a party to arbitral proceedings but
who takes no part in the proceedings may question-(a) whether there is a valid
arbitration agreement, (b) whether the tribunal is prop.erly constituted, or (c) what
matters have been submitted to arbitration in accordance with the arbitration
agreement, by proceedings in the court for a declaration or injunction or other
appropriate relief'.
21 Recourses provided for by Sections 32 and 45 are only open in a limited
number of cases, notably when the parties agree to apply them or when the arbitral
tribunal is convinced that this solution aims at reducing important costs. Recourse
in Section 72 however is not subject to any particular condition. See Fiona Tmst v.
Yuri Privalov and Others [2007] EWCA 20 at [34], taking into account that the judge
must be very "cautious" before accepting a recourse based on Section 72.
22 UNCITRAL model law on international commercial arbitration, 1985
(amended in 2006), Art. 8(1): "The tribunal seized of a dispute on a question that is
the object of an arbitration agreement will refer the parties to arbitration if one on
them requests this, at the latest when it submits its first conclusions on the merits
of the dispute, unless such judge establishes that said agreement is null and void,
inoperative and not likely to be enforced".
_-\D\'OC-\CY IN PR:iCTICE 185
2.\ Swiss PILi, December 18, 1987, Art. 7: "Arbitration ~-\greement If the
hence take place before a State court, and not before arbitrators,
contrary to the parties' agreement. l\ioreover, in the absence of
choice of seat by the parties, the Green paper recommends that the
seat be fL"{ed in the country whose courts would have jurisdiction
over the dispute in the absence of an arbitration agreement. 30 In
practice, given the options of forum offered by the Regulation
(respondent's place of residence and, if applicable, place of execution
of the agreement, delivery of the object, damage, etc), one can
imagine the number of possibilities that the Commission's reform
will make available to the litigants desiring to escape or delay
arbitration. Notwithstanding the intention behind the European
proposal, which was most certainly laudable, this proposal is
troublesome to say the least from the point of view of the efficiency
of proceedings.
'() Green paper, p. 9, note 14: "If such approach were elected, uniform criteria
should enable the seat of arbitration to be chosen. The general study suggests
refening to the parties' agreement or to the arbitral tribunal's decision. If a seat
cannot be chosen pursuant to this, it is recommended to turn to the courts of a
member State that nlled on the dispute by viItue of the Regulation in the absence
of an arbitration agreement".
,I This is the case, for example, in France (~-\rt. 1502 of the Code of civil
procedure, that makes provision for the annulment of the award when the
arbitrator has ntled "wtthout an arbitration agreement or based on an agreement that was null
188 ART OF .ADVOC.ACY IN INTERNATIONAL ARBITRATION
or had e:>.pired" or "without t'ompfying to the mission it had been assigned'), in the United
Kingdom (Section 67 of the Arbitration Act, that provides for recourse due to the
arbitral tribunal's lack of jurisdiction to rule on the merits, this recourse including
the validity and the scope of the compromissory clause), in Germany and the
UNCITRAL model law (§ 1509 para. 2 ch. 1 let. c ZPO and Art. 34 para. 2 let. A
ch. 3 of the model law, providing for the annulment of the award if the tribunal
ruled on a dispute that is not mentioned in the compromissory clause or that
surpasses the compromissory clause) or in Switzerland (Art. 190(2) (d) of the PlLA,
that provides that the award can be annulled when an arbitral tribunal wrongfully
declared that it had jurisdiction or when lacking jurisdiction).
32 Paris Court of Appeal, 1st Chamber, November 16, 2006, Societe Empresa
de Telecomunicaciones de Cuba SA v. SA Telefonica Antillana and SNC Banco
Nacional de Conunercia Exterior, Revue de l'arbitrage 2008, 109, note M. de
Boisseson.
.\D\'OC\CY IN PRAOICE 189
The case of two arbitral tribunals ruling on the basis of the same
agreetnent is more delicate. It raises the problem of the allocation of
jurisdiction between two tribunals that are equally competent to rule
on (}uestions referred to them. By definition, these questions are
included within the scope of the clause. In practice, we believe that
the question will not be resolved by delimitating the jurisdiction
ratione tllatenae of each tribunal, but by deciding on the admissibility of
the claims referred to a second tribunal.
It has been argued that the tribunal second seized would lack
jurisdiction to settle the dispute ~since the arbitration agreement
would no longer have any effects as a result of the first tribunal being
seized. 13 This reasoning is 'appealing, but seems nevertheless slightly·
artificiaL In reality, it is an application by analogy of a reasoning
applicable to a specific submission to arbitration (fompromiJ), that is an .
arbitration agreement which is entered into after the dispute has
arisen, for the purpose of resolving this specific dispute. However,
contrary to a submission agreement, an arbitration clause remains
effective when an arbitral tribunal is seized. It is still possible to refer
.;
.-\wards", CCI Bull. 2003, spec. suppl., p. 43. as well as P. ~'Iayer, op.dt.