The recipe for an international arbitration stew

There is a saying that in order to have chicken stew, you need the chicken. In international arbitration, in order to have an international arbitration stew, you need the chicken, in the form of the arbitration agreement.

You think that it is natural; how on earth could it be possible to have an international arbitration without an agreement to resolve the dispute under arbitration? But the thing is not that simple, even if it is simple enough. We will discuss this later in this part, because you might be surprised that some arbitration agreements are so badly written that they become pathological, and render useless, hence you cannot bring your possible dispute under international arbitration.

But this is not all; after you have your arbitration clause, when there is an actual problem between the parties, such a problem should in fact be a dispute. And a definition of a dispute should be a direct opposition of what one party wants against the direct opposition of what the other party wants. If there is no direct opposition between the parties as to what they want of their legal relationship then you might not have a dispute.

If there is no dispute, then you cannot bring your possible claim to arbitration. Maybe you will have started your international arbitration, but at the end of the day, it might not be admissible since there is no dispute that can be assessed by the arbitral tribunal.

After there is, in fact, a dispute between the parties, there will be a need to commence international arbitration. Depending on the parties and the tribunals chosen, this can have different requirements, but in essence, the requirements are almost all the same. You write in a brief statement of facts and law, the existence of an arbitration clause, and if you wish as well the appointment of the arbitrator, or the mechanism for appointing an arbitrator. And the payment of the administrative fees. Very important. Otherwise your international arbitration might not walk.

Then another component of an international arbitration is the arbitral proceedings, in other words, how the international arbitration will be conducted and the rules for the conduct of the arbitral tribunal, which might differ depending on the institutions involved; however, the parties involved in the dispute could make arrangements as to the timetable regarding the presentation of memoranda, the presentation of evidence, the dates of the hearings, as well as the length of them, etcetera. Flexibility is the way in international arbitration.

Once the arbitral proceedings have finished, then there is the time for having a final decision by the arbitral tribunal, in that sense, you will have your award. Depending on the type of international arbitration, you can have interlocutory awards, or partial awards. Is typical for international commercial arbitrations that you have just one award where it is decided the elements of jurisdiction, responsibility and damages. In international arbitrations regarding foreign investment disputes as well disputes between countries you have typically three steps, with three awards, the first one, the award that determines the existence of the jurisdiction by the tribunal. Once that is finished then comes a new order by the tribunal inviting the parties to make their memoranda regarding the breach of an international obligation, then there is the award on that matter, and finally there is a decision as to the financial side of the dispute, which implies a third award.

Finally, you have the stage for the recognition and enforcement of the international arbitral award, which has a different new adventure by its own.

All-in-all, the broad elements of an international arbitration can be summarized in six elements, as proposed by Redfern and Hunter, but can be reduced to five:

• arbitration agreement
• existence of a dispute
• commencement of arbitration and the arbitral proceedings
• award or awards by the arbitral tribunal
• recognition and enforcement of an international arbitral award

I hope that with this list, you can have a broad vision of what the elements of an international arbitration are. This list can help you navigate the stages of the proceedings and to understand what comes next, so you can anticipate the possible challenges faced into the future once you are involved in an international arbitration.

Each of the steps signaled above are a world by themselves. If you would like to continue uncovering the elements for the recipe of an international arbitration stew, I invite you to subscribe.

Have a great one!