COMMENCEMENT OF ARBITRATION

Report
COMMENCEMENT OF
ARBITRATION
PROFESSOR JOSEPH MBADUGHA
OUTLINE

INTRODUCTION

NOTICE OF ARBITRATION

PARTY TO COMMENCE ARBITRATION

ANSWER TO NOTICE OF ARBITRATION

SAMPLES
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CONCLUSION
INTRODUCTION

Commencement is a procedural matter
When and how depends on parties agreement
--To be commenced when a dispute arose and within any period agreed
by the parties

No agreement by parties on how, then in accordance with the rules or
law governing the arbitration
 Commenced through a written notice of arbitration or demand for
arbitration
Article 3(1), UNCITRAL Arbitration Rules, 2010
“The party or parties initiating recourse to arbitration...shall
communicate to other party or parties...a notice of arbitration”
See also Article 4(1) ICC Rules of Arbitration, 1998
which provides that s party requesting for arbitration shall submit its
request for arbitration to the secretariat, which shall notify the
claimant and respondent of the receipt of the request and the date of
such receipt

NOTICE OF ARBITRATION

A.
B.
A written demand or notice by a party to arbitration requesting the other that:
their dispute within the agreement be referred to arbitration:
it appoints its own arbitrator or concur in the appointment of the
arbitrator nominated or appointed by it, the party giving the notice
Date of Commencement of Arbitration
-- it depends on the parties’ agreement
--where there is no agreement it depends on the rule or law governing the
arbitration
Under Article 3(2) UNCITRAL Arbitration Rules, it is commenced
on the date the notice is received by the Respondent. See also Article
1188(1) of the Polish CCP and Section 17 of Nigeria’s ACA with
similar provisions as the UNCITRAL Rules
Under the ICC, it is commenced the date the secretariat received the notice – see
Article 4(2) of ICC Rules of Arbitration

When is a notice received
 Unless the parties agree otherwise, it is received when:
-- when delivered to the addressee personally or to his place of business, habitual
residence or mailing address
--or when sent to the addressee’s last known place of business, habitual residence or
mailing
address by registered letter
See Article 3(1) UNCITRAL Model Law; Article 3(2) ICC Rules of Arbitration

NOTICE OF ARBITRATION 2


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-
Form
It varies
Parties are free to choose the form
Where there is no agreement, it is determined by the
applicable rules or law
It may however include the following
a demand that the dispute be referred to arbitration;
the names and addresses of the parties
a reference to the arbitration clause or the separate
arbitration agreement that is invoked
a reference to the contract out of which the dispute arose
the general nature of the claim and an indication of the
amount involved, if any
the relief or remedy sought
NOTICE OF ARBITRATION 3
f. a proposal as to the number of arbitrators,
language and place if the parties have not
previously agreed on this
g. a proposal for appointment of a sole arbitrator
with a request to concur or with a request that
the respondent appoints its own arbitrator
Articles 3(2) – (3)(g) UNCITRAL Arbitration Rules;
Articles 4(3) ICC Arbitration Rules
A SAMPLE OF NOTICE OF ARBITRATION
CONDITION PRECEDENT
Condition precedent to commencing arbitration
 It may be:
A. Contractual: parties may agree that certain
actions be taken before arbitration, example
attempt at amicable settlement or mediation
and conciliation
B. Statutory: a statute may require that before any
action is brought against certain parties a 3 or 1
months of the intention to sue such a party
must be given to it
C. Effect of non compliance
- It makes the notice and thus the arbitration
premature and incompetent

VALID NOTICE OF ARBITRATION
A notice must b valid, if not:
A. Any arbitration commenced through it will be
incompetent
B. It constitutes a ground for stopping the arbitration
C. It becomes a ground for challenging any award
rendered therein

When is a notice invalid
--if it is vague or improperly issued
--if it refers to a future rather than a present
dispute
--if it is contrary to the parties’ agreement or the rule or
law that governs the arbitration
--if it is issued without complying with a condition
precedent

INVALID NOTIC OF ARBITRATION 2
Effect of invalid notice
--no jurisdiction to entertain the action
 Any objection must be raised on time before
taking fresh step
 What happens when an objection is raised
--it may result in the claim being struck out
--under some institutional rules, the claimant may
be allowed to correct the error

TIME LIMIT
Time within which to commence arbitration and/or time
within which to commence an action in respect of a given
subject
 It may be provided by law or contractual
 Difference between both:
--statutory time limit prevails over contractual time limit in
the event of conflict between both
--contractual time limit may be dispensed with on grounds of
public policy
--contractual time limit may be extended but statutory cannot
 Effects of time limit
-with respect to statutory time limit, it bars the right of action
-with respect to contractual time limit, it could bar the claim
or right of action or both depending on its wordings
 Time starts running from the date the cause of action arose

PARTY TO COMMENCE ARBITRATION
Various
arbitration laws and
institutional rules require a party
seeking for arbitration to
commence arbitration.
Sometimes an aggrieved party
may opt for litigation rather than
arbitration.
ANSWER TO NOTICE OF
ARBITRATION
A respondent served with a notice of arbitration should
respond by serving an answer to the Claimant after a
careful evaluation of the notice with a view to finding
whether:
 the notice is proper,
 the dispute is within the scope of the arbitration
agreement or is arbitrable,
 the claimant is a party to the agreement or a juridical
person
 the notice is within time.
ANSWER TO NOTICE OF
ARBITRATION
The answer should contain the following:


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denial or admission of the claim or any part thereof set
out in the request;
objecting to the jurisdiction of the tribunal or reserving
the right to object to the jurisdiction of the tribunal;
a brief statement of the respondent’s counterclaim if any;
ANSWER TO NOTICE


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A request for joinder of parties or evincing an intention to
subsequently apply for joinder of party;
if there is any statement in the notice as to how the
arbitration should be conducted to respond to it;
to either concur to an arbitrator nominated or suggested by
the Claimant or to suggest an arbitrator in the case of a sole
arbitrator;
to nominate its own arbitrator and state the name and
contact details if it is a three panel arbitration and the
agreement of the applicable law allows parties to nominate
their own arbitrator.
CONCLUSION
CAREFUL
ATTENTION TO
THE REQUIREMENTS FOR
COMMENCING AN
ARBITRAL PROCESS
SAVES TIME.
THANK
YOU
FOR YOUR
ATTENTION!!

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