Procedure Shopping Through Hybrid Arbitration Agreements (eBook)

Cover 1
Introduction 29
§1 Problem identification and delimitation 30
A. The concept of hybrid arbitration clauses 31
B. Procedure shopping - Reasons for hybrid arbitration clauses 32
C. The Insigma v. Alstom case 35
D. Other hybrid arbitration cases 37
E. Recent developments in institutional arbitration 39
§2 State of discussion 43
§3 Structure and research approach 48
Chapter 1: Party autonomy and the legislative framework 56
§4 Party autonomy to agree on hybrid arbitration under the law 57
A. Importance of party autonomy in international arbitration 57
I. An interplay of contract and private international law 58
II. Party autonomy in international arbitration conventions 59
III. Recognition of party autonomy by national arbitration laws 60
IV. Reasons for the supremacy of party autonomy 63
B. Limits to party autonomy and applicable laws 65
I. Law of arbitration: the seat principle 68
1. Choosing a place of arbitration 69
2. Place of arbitration, place of hearing, seat of the institution 71
3. Application of arbitration laws of states other than the seat? 74
II. Laws affecting the arbitration agreement 75
1. The search for conflict of laws rules for validity issues 77
2. Initial considerations: substance v. procedure 78
3. Law of the arbitration agreement beyond the lex arbitri 81
4. Law applicable to the operability of the arbitration agreement 83
C. Limits to party autonomy in arbitration laws 86
I. Mandatory arbitration law - an overview 87
II. In particular: mandatory arbitration law against hybrid arbitration? 90
1. No general due process concerns 90
2. The skeletal legislation on institutional arbitration 91
a. Stipulations in international conventions 92
b. Rarity of national legislation on institutional arbitration 97
c. The quasi-regulative force of institutional practice 104
D. Relevant limits to party autonomy outside arbitration laws 106
§5 Private rules and party autonomy 107
A. Types of arbitration rules 108
B. Legal status and regime of arbitration rules 110
I. Lacking legislative or regulatory power of arbitral institutions 112
II. Arbitration rules as standard terms of the arbitration agreement? 114
III. Law applicable to arbitration rules 115
C. Soft law and arbitrator discretion 116
D. Interplay of institutional and arbitral discretion and party autonomy 119
§6 Hybrid arbitration from a normative perspective 122
A. Arbitral procedure and the hierarchy of norms 122
B. Validity of hybrid arbitration agreements in principle 124
Chapter 2: Qualifying hybrid arbitration (agreements) 126
§7 Categorisation of hybrid arbitration as institutional 126
A. Hybrid arbitration as a problem of defining institutional arbitration 127
I. Rejection of definitions based on the constitution of the tribunal 128
II. Rejection of definitions focussing on the applicable rules 129
III. Preference for definitions based on institutional involvement 129
IV. Degree of involvement of arbitral institutions 131
B. Advantages and disadvantages of institutional arbitration 134
I. Objective advantages 135
II. Subjective advantages 136
III. Objective, possible and perceived disadvantages 139
1. Cost 139
2. Bureaucracy 140
3. Intransparency and lack of control 142
IV. Shopping for advantages with hybrid arbitration agreements? 145
C. Reality of intermediate forms of arbitration 146
I. Institutions acting as appointing authority 147
II. Facilitated ad hoc arbitration 147
III. Semi-institutional arbitration, e.g. Hamburg Friendly Arbitration 150
IV. »Wildcat arbitration« - ad hoc arbitration under institutional rules 151
1. Articles 1 (2) and 6 (2) of the ICC Rules & ad hoc cases
2. The Bovis Lend v. Jay-Tech case 154
V. »Switching« from institutional to ad hoc arbitration 156
D. Hybridity of arbitration administered under another institution's rules 157
§8 Qualification of hybrid arbitration agreements as pathological 157
A. Essentialia and optional elements of an arbitration agreement 158
B. The principle of effective interpretation and its limits 161
C. Case study: Pathological institutional arbitration agreements 163
I. Initial pathology: Drafting defects in the parties' sphere 163
1. Ambiguous references to one or more institutions 164
a. BGH judgment of 2 December 1982 166
b. Lovelock v. Exportles - a decision of the English Court of Appeals 170
c. Cour de Cassation, decisions of 20 February 2007 and 4 June 2009 172
2. Hybrid arbitration a solution to ambiguity? 174
a. The case HKL v. Rizq 174
b. Critical comments of the decision 175
3. Distinction between deliberately hybrid & ambiguous clauses
a. HCCI Court award of 18 April 2000 178
b. The »ICC 500« case 181
II. Subsequent pathology: obstacles in the institution's sphere 184
1. Retrospective: Dissolution of the GDR's chamber of foreign trade 185
a. BGH decision of 20 January 1994 186
b. Evaluation and relevance for modern arbitration law 187
2. A current issue: The CIETAC split 190
a. The background of the creation of SHIAC and SCIA 190
b. Problems with »old« Shanghai or Shenzhen arbitration clauses 193
c. Some local Chinese jurisprudence on the CIETAC split 195
d. The SPC's 2013 notice on the CIETAC split 198
e. Further guidance from the SPC: the 2015 reply 199
f. Evaluation 200
3. Hybrid arbitration as a solution to subsequent pathology? 202
III. Are hybrid arbitration clauses initially or subsequently pathological? 203
§9 The qualification's consequences: inadvisability and possible cure 207
Chapter 3: Opting-out aspect - derogation from institutional rules 209
§10 Institutions' flexibility in relation to their rules 209
A. Institutional attitudes towards rule modifications: a case study 210
I. An example for the ICC's position: The Qimonda arbitration 210
II. SIAC's search for an acceptable position 211
III. CIETAC's apparent position 212
IV. The LCIA's flexibility proven in the Softwood Lumber Arbitrations 213
V. A recall of the »ICC 500« case to indicate the AAA-ICDR's position 215
VI. Recall of the DIS/DAS awards 215
VII. The approach of one Swiss cantonal chamber of commerce 216
B. A focus on essential (»mandatory«) institutional rules 218
I. Essential ICC Rules 219
II. Essential SIAC Rules 220
III. Essential CIETAC Rules 222
IV. Essential LCIA Rules 224
1. Party autonomy under article 14 of the LCIA Rules (1998) 224
2. Revisions introduced by the LCIA Rules (2014) 225
3. General restrictions to modify powers of the institution 225
V. Essential AAA-ICDR Rules 227
VI. Essential DIS Rules 228
VII. Essential Swiss Rules 229
C. Controlling or lenient: negotiability of institutional services and rules 231
§11 The institution's right to refuse the administration of a case 232
A. No duty of the institution to conclude a contract with the parties 233
I. Nature and content of the Administration Contract 235
II. Law applicable to the Administration Contract 236
1. Law of the seat of the institution 237
2. Law applicable to the arbitration agreement 238
3. Law of the place of arbitration 239
4. Own view and determination of the administering institution's »seat« 240
III. Contract formation theories 243
1. Theory 1 - parties accept the institution's offer ad incertas personas 244
2. Theory 2 - request for arbitration as offer accepted by the institution 245
3. Theory 3 - contract only concluded with the respondent's answer 247
IV. Conclusions for requests for arbitration under different rules 247
B. Practice test: refusal to administer as contract termination 251
I. Problem: Timing and communication of the institution's refusal 251
II. Solution: Flexible contract with a both-sided termination right 252
1. Arguments for a right to terminate the Administration Contract 253
2. Limit to the right to termination 254
3. Contractual termination & jurisdictional decision of the institution
III. Support of the solution: hybrid arbitration and the »battle of forms« 255
1. The »battle« of institutional rules 255
2. Solutions discussed for »battle of forms« problems 257
3. Appeasing the battle of institutional rules 260
IV. The institution's restricted right to disregard rule derogations 263
C. Effect on the arbitration agreement 264
I. Overview of the République of Guinée cases 264
1. The factual background 264
2. The decisions of the TGI, Paris 265
3. Partial annulment of the decisions by the CA, Paris 265
II. Evaluation of the CA's ruling 266
III. Fate of the arbitration agreement: reconsidering the TGI's decisions 268
§12 Hybrid arbitration agreements and autonomy of the institution 269
Chapter 4: Opting-in aspect - applying another institution's rules 271
§13 The legality of administering hybrid arbitrations 272
A. Institutional rules and copyright of the issuing institution 273
I. Copyrightability of arbitration rules 275
1. The originality/creativity threshold 276
2. Arbitration rules as works in the public domain? 284
II. Hybrid arbitration as infringement? - the idea/expression dichotomy 288
1. A parallel: copyright infringement of game rules and show formats? 291
2. Exceptional protection of the content and integrity of a work 293
3. Application to the use of another institution's arbitration rules 295
III. Jurisdiction and applicable law problems: a hypothetical example case 297
1. Jurisdictional considerations 298
2. Conflict of laws analysis 301
B. Hybrid arbitration and trademark protection 304
I. Trademark mentioning v.trademark infringement 304
II. Dilution without confusion? 306
III. Excursus: The CIETAC split as a potential trademark issue 308
C. Administering hybrid arbitrations as unfair competition? 310
I. The problem to identify common principles among jurisdictions 311
II. Applicability of unfair competition law to arbitral institutions 313
1. Unfair competition in the non-profit sector 314
2. The market for administering arbitral proceedings 315
3. Relationship between unfair competition law and IP law 317
III. Unfair competition concepts possibly applicable to hybrid arbitration 321
1. The concept of exploitation or tarnishment of reputation 322
2. »Parasitisme« - a concept of exploitation of efforts 324
3. Common law: Passing off and misappropriation 327
4. A glance at Chinese unfair competition law 329
5. The tort of undue interference with contractual relations 331
IV. Jurisdiction and applicable law: three hypothetical situations 333
1. Relevance of the market place for jurisdiction? 334
2. Qualification of the reproached conduct and localisation of the market 336
D. Concluding reflections on the economics of exclusive institutional rules 340
§14 The feasibility of administering hybrid arbitrations 344
A. The test: applying substitution theory to a conflict of arbitration rules 344
I. A contract perspective: general contract interpretation rules 345
II. A rule perspective: introduction to substitution and adaptation theories 346
III. Parameter of equivalence: the applicable rule's purpose 351
1. The functional equivalence test 352
2. Equivalence of actors or acts? 353
IV. Art. 1 (2) of the ICC Rules - per se an exclusion of substitution? 354
B. Rules referring to the arbitral institution and their purpose 355
I. Commencement of the proceedings 357
II. Institutional decision on jurisdiction 361
1. Distinction: review of filing requirements and contractual acceptance 362
2. Rules on institutional decisions on jurisdiction and their scope 363
III. Constitution of the arbitral tribunal 366
1. Institutional determination of the number of arbitrators 367
2. Appointment upon agreed or unopposed party nomination 368
3. Confirmation of a co-arbitrator nominated by one party alone 371
4. Institutional selection of a co-arbitrator for a defaulting party 372
5. Default rules for the designation of the chairperson 375
6. Institutional selection of a sole arbitrator or chairperson 377
IV. Challenge and replacement of arbitrators 378
V. Institutional control of the proceedings after the tribunal is constituted 381
VI. Institutional influence on the award 384
VII. Financial control 386
C. General comparison of actors of different arbitral institutions 388
I. The secretariats 388
II. Multi-person bodies 391
1. Comparison of the ICC, LCIA, SIAC and SCCAM 392
2. The »Arbitration Court(s)«» under CIETAC Rules (2015) 394
3. Other, multi-person bodies 395
III. Individuals: President, Chairman, Registrar, Secretary General 397
IV. The »administrator« under AAA-ICDR Rules 398
D. Adaptation of the rules to the administering institution's system 399
§15 Implementing hybrid arbitration: an institutional perspective 400
Chapter 5: Hybrid Arbitration Clauses Before State Courts 402
§16 Enforcing & challenging hybrid arbitration agreements
A. Enforcement in relation to the other party 403
I. Overview of potentially available actions 404
1. Action for dismissal or stay of litigation 404
2. Action for interlocutory declaratory relief 405
3. Actions for injunctive relief 407
4. Actions for review of arbitral decisions on jurisdiction 409
5. Actions for state court support 412
II. Selected problems of enforcing hybrid arbitration agreements 413
1. Allocation of competence 413
a. Negative effect of competence-competence? 414
b. Overview of national approaches 415
c. Plea for limited review of operability issues by state courts 419
d. A case for court support 422
2. The limited subjective res judicata effect 430
a. Institutions not concerned by inter partes effect of court orders 431
b. The decision HKL v- Rizq II 433
c. Anti-arbitration injunctions to solve institutional conflicts? 434
3. Review of and deference to institutional decisions 435
a. Myth of the »administrative nature« of institutional acts - part I 435
b. Provisional nature of the institution's decision on jurisdiction? 438
c. No interlocutory review of institutional confirmation of jurisdiction 439
d. Indirect court »review« of institutional decline of jurisdiction 440
III. State court powers to enforce (hybrid) institutional arbitration clauses 442
B. Enforcement in relation to the designated institution 444
I. Justiciability - the myth of the »administrative nature« - part II 444
II. Liability of arbitral institutions 447
1. Excursus: contractual liability of arbitrators 448
a. Statutory provisions limiting arbitrator liability 448
b. Judicial rulings on arbitrator liability 449
c. Arbitration rules excluding arbitrator liability 451
2. Application of the same principles to arbitral institutions? 452
3. Institutional liability risks connected to hybrid arbitration 455
III. Available remedies 457
C. The fork in the road to enforce hybrid arbitration agreements 459
§17 Challenging & enforcing hybrid arbitration awards
A. Probable grounds for challenge 463
I. Invalidity of the arbitration agreement 463
II. Procedural irregularities 465
III. Irregularity in the constitution of the arbitral tribunal 469
IV. Public policy 470
1. What is public policy? 471
2. Can private rules shape public policy? 473
3. Public policy to protect interests of the rules issuing institution? 475
B. Party invocation, preclusion and outcome-relevance 476
C. The Hangzhou Intermediate People's Court's ruling 480
I. Insigma's objections to recognition and enforcement 480
II. The Hangzhou court's factual findings on the arbitration procedure 482
1. The initial commencement of ICC arbitration 482
2. The circumstances of the case transferral to SIAC 482
3. The constitution of the arbitral tribunal 483
4. The hearing on jurisdiction and the Singapore courts' decisions 484
5. The hearing on the merits and the awards 484
III. The ratio of the Hangzhou court's decision 485
IV. Evaluation 485
§18 Enforcement risks of hybrid arbitration agreements 487
Conclusion 489
§19 Summary of findings 489
§20 Looking back for a way forward: A plea for institutional cooperation 495
§21 Recall of key propositions 497
Deutschsprachige Zusammenfassung (summary in German) 500
§22 Themeneinführung 500
§23 Ergebnisse 503
§24 Thesen der Arbeit 511
Bibliography 515
Primary sources 559
Treaties / conventions & multilateral declarations
EU legislation (Regulations & Directives)
National legislation, regulations and instruments issued by state organs 561
United Nations Model Laws, principles and reports 566
Arbitration rules & guidelines