CDR Easy Weeks 1-5

Main concepts for this course are made schematic

We start with substantive law: what is your claim

You continue with procedural law: how do you effectuate your claim?

Also, contracts are used as a basis in this course. But generally CDR can be used for torts too.

Three methods of dispute resolution

Litigation (this week)

Arbitration

Mediation

Litigation

Ogura et al. vs Shell et al.

6 nigerian farmers suing Shell

Jurisdiction? Yes, the court has jurisdiction over the main company, because it is headquartered in the Netherlands. It also has jurisdiction over the subsidiaries in Nigeria because of the Brussels Regulation which says that if you have jurisdiction over ONE defendant, you automatically have over ALL defendants.

Applicable (substantive) law? Nigerian tort law

Applicable (procedural) law? Dutch procedural law

The outcome: The Nigerian subsidiary is held liable for the damages made, of the two farmers out of the 6 ( the other 2 suits have not been concluded yet)

Internationally Recognised Principles of (Transnational) Civil Procedure

- Soft law: not directly applicable (not law. Can not be invoked)

- Made in order to bridge the gap between common and civil law systems

- Some derived from fundamental rights

(e.a. Art. 6 ECHR / Art. 47 EU Charter of Human Rights)

Principle 1: Independence, Impartiality and Competence of the Court and its Judge

Independent vis-à-vis other state powers (legislator, executive)

- You look at how the judges are appointed, for how long, does it appear independent? external pressures etc.

- ECHR in Kleyn et al./The Netherlands

Impartial vis-à-vis the parties

- no bias by the judges

- Subjective test (behaviour of the judge -> must be proven by the plaintiff)

- Objective test (objectively justified legitimate doubt in regards to impartiality)

- ECHR in Micallef/Malta

Principles we need to know for this course

1, 3, 5, 9, 16, 19, 21, 22

Feehily criteria on how to choose the adequate ADR

1. Transaction costs: not only about money, but also time

2. Satisfaction with the outcomes: are the party's interests met by the outcome and are process and outcome perceived as fair?

3. Effect on the relationship: particularly when parties have ongoing business dealings

4. Recurrence: is the outcome sustainable?

Explain Med-arb and Arb-Med + pro and con of each

Med-arb: the parties are assisted by a mediator to negotiate a settlement of their dispute and If they decide that they are unable to settle, the outstanding issues are submitted to the mediator who then takes on the role of an arbitrator to determine the dispute and issue an award that will be binding, or non-binding as agreed by the parties.

+ there will be a result

- arbitrator independent/impartial? (confidential information during mediation phase)

Arb-med: The parties agree to arbitrate their dispute. Having prepared the award, the arbitrator, before issuing it, takes on the role of a mediator and assists the parties with settling their dispute. If the parties are unable to reach a settlement, the arbitrator issues the award to the parties.

+ focus on reaching settlement (parties don’t know the contents of the award)

- no serious attempt in mediation (because there is already an award), costly to mane an award that will not be used

Why is it necessary to state in the arbitration clause what the substantive law governing the arbitration agreement is?

Such a provision would avoid the problem of having arbitrators trying to determine what law would govern the validity of the arbitration agreement.

1. Arbitrators need to decide validity for their jurisdiction;

2. Court in arbitration state needs to decide validity for annulment;

3. Court in state where award is to be enforced, needs to decide on validity for enforcement.

This provision could avoid different courts/tribunals coming to different conclusions in these stages of the arbitration procedure.

Why should interim measures may be sought in the court in the state where enforcement is being sought?

If an interim measure requires court assistance to be effectuated, applying for the measure in court may save time;

Arbitral tribunals may be reluctant to grant interim measures, as they are to decide on the merits of the case and may fear prejudice on their part with respect to the final decision

but confidentiality:(

What questions do we need to ask in this course?

Are we going to mediate, arbitrate or litigate? And

Why? What are their characteristics?

How do you proceed in litigation

- Depends on the civil procedural law in the country of the court with jurisdiction (lex fori-law of the forum)

- However, there are universally acknowledged principles of transnational civil procedure AND applicable fundamental rights

Which principles are relevant for this week?

Principle 1*

Independence and impartiality of the tribunal

Principle 3*

Procedural equality

Principle 5*

Right to be heard

Principle 9 and

Principle 19

Structure and form (oral/written) of the proceedings

Principle 1*

Independence and impartiality of the tribunal- what does this mean?

Independent vis-à-vis other state powers (legislator, executive)

- You look at how the judges are appointed, for how long, does it appear independent? safeguards against outside pressures etc.

- ECHR in Kleyn et al./The Netherlands

Impartial vis-à-vis the parties

- No bias by the judge

- Subjective test (behaviour of judge, must be proven by the plaintiff)

- Objective test (objectively justified legitimate doubt in regards to the impartiality)

- ECHR in Micallef/Malta

Principle 3*

Procedural equality

- Equal treatment and reasonable opportunity for both parties

-'Equality of arms'

ECHR in Steel & Morris/United Kingdom

You have to look at three things:

1) What is the importance of what is at stake

2) The complexity of the relevant law and procedure

3) The applicants capacity to represent himself effectively

- Effective right of access to justice

ECHR in Airey/Ireland

ECJ in DEB/German

1) No general right to legal aid

2) May be necessary for the state to do in order to ensure effective right of access to justice

Principle 5*

Right to be heard

- Right to present one's case AND to respond to both the other party and the court

- Audite et alteram partem

ECHR in Mantovanelli/France

ECJ in Krombach/Bamberski

Principle 9 and

Principle 19

Structure and form (oral/written) of the proceedings

The 'main hearing model' (Indication of how civil proceedings may look like):

1. Pleading phase (usually written)

Claims and defenses, principal evidence -> convince the court that what you are saying is true and the evidence you want to bring is relevant

2. Interim phase (orally and/or written)

'Procedural' aspects, taking of evidence

3. Final phase (usually orally)

Remaining taking of evidence, concluding argument

Why litigate / Why not litigate?

- Litigation as method of dispute resolution is 'default' (fundamental right of access to a court of law)

- Litigation is (usually) public

- Litigation may take a long time (especially when appeal(s) are possible)

- Litigation (usually) results in an enforceable judgment

- Litigation costs ...?

What is the default way to solve a dispute? and why?

Litigation

Because there is the right to a fair trial which is universally recognised. But this right may be waived.

Common feature within ADR?

Consensuality (conditio sine qua non)

Common features for Mediation specifically

Consensuality + confidentiality

Not about legal positions, but about the real or underlying interests of the parties

What is mediation? definition and 3 extra characteristics

A structured process, whereby parties to a dispute, by themselves, on a voluntary basis, attempt to reach an agreement on the settlement of their dispute, with the assistance of a mediator.(EU Directive 2008/52/EC, Art. 3, sub a)

- It MUST have these characteristics, but it does not have to be called mediation

- It is not the mediator that gives the solution, the parties reach the agreement

- It can fail (arbitration and litigation always reach an award or decision)

Structured process

1. Mediation agreement (expression of voluntary deviation from the right of access to a court)

- Usually contains: Mediation clause, appointment of mediator, confidentiality clause, mediation process, where are we going to mediate etc.

2. Mediation process starts

- Sessions with the parties and the mediator

3. Settlement agreement (if mediation is successful)

4. Enforcement of settlement agreement (if necessary and possible)

- If the other party refuses to enforce the mediation agreement, then you have to go to court and litigate from the beginning again

Voluntariness, is all about...

1. Expression of consensuality (again, By agreeing, you waive your fundamental right to trial in state courts)

IT CAN BE IN:

2. Mediation agreement when a dispute has arisen

You could be held liable but it would be difficult for the other party to prove damages

3. Mediation clause in an agreement

It depends on the jurisdiction you are in

In the NL you can have a mediation clause but it can not be enforced per se. The judge can say that the case is inadmissible, go to mediation. Or not

4. Statutory obligation to (try to) mediate before claim is admissible in court?

Yes according to the ECJ in Menini

Confidentiality

A confidentiality clause in a mediation agreement

- Also regarding the mediator

Mediator

- A neutral and impartial third person (a facilitator)

Interest based

Harvard theory of negotiation:

1. Separate the people from the problem

2. Focus on interests, not on positions

3. Invent options for mutual gain

4. Use objective criteria

Why is the project not ready on time? Instead of why is the contractor not doing the work on time

When and why is mediation (not) a suitable method of dispute resolution?

- In mediation you can try to preserve a continuous relationship between in court there is 'winner' and 'loser'

- Satisfaction with the outcome is high because the parties came out with the solution themselves

- Legal point of contention - if the dispute is not at all legal then mediation makes sense

- If you only need a couple of sessions, it is way shorter than litigation.

- Costs may be low

- Confidentiality

- Proceedings are designed by parties (based on consent) (there are model rules in various instruments → ICC Mediation Rules)

- HOWEVER, Enforcement is difficult

Costs

- Mediation is one of the cheapest methods (own costs +lawyers? + third party?)

Singapore convention

- Because of the lack of enforcement we made the singapore convention, which is very similar to the NY convention on the enforcement of arbitral awards

- Only 16 parties

EU stance on the Singapore convention

- The EU has voted against adaptation, arguing that:

a) The definition of Mediation/Mediator is very broad, so it would be applicable to too many cases

b) In the EU we already have rules on judgements being enforced in other states + mediation directive

Articles 1-5 of the singapore convention

Article 1: international aspect required

Article 2: Broad definition of mediation

Article 3: Enforcement of Settlement agreement and what happens if a matter is already resolved by a settlement agreement

Article 4: Procedural article. There must be a competent authority in every state

Article 5: Refusal of relief,

Article 5: Refusal of relief, for instance if:

• The Settlement agreement is null and void

• Breach of mediation standards by mediator (Art. 5(1)(e))

• Doubts to mediator's impartiality and independence (Art. 5(1)(f))

• Contrary to public policy (public principles) of the state you are trying to enforce in (Art. 5(2)(a))

• Subject matter not capable of settlement by mediation (Art. 5(2)(b))

Menini case requirements for mediation to be allowed as a prerequisite

Such legislation which mandates mediation before going to court must be allowed as long as: (Alassini and reaffirmed here)

1. The procedure does not result in a decision which is binding on the parties

2. it does not cause a substantial delay for the purposes of bringing legal proceedings,

3. it suspends the period for the time-barring of claims (filing legal claims)

- Parties are not subsequently prevented from initiating judicial proceedings as a result of the expiry of the limitation period while they engage in mediation (59)

4. It does not give rise to costs — or gives rise to very low costs — for the parties,

5. Electronic means are not the only means by which the settlement procedure may be accessed

- the ADR procedure must be accessible online and offline to both parties, irrespective of where they are. (60)

6. Interim measures are possible in exceptional cases where the urgency of the situation so requires

+

National legislation may not require a consumer taking part in an ADR procedure to be assisted by a lawyer

+

You can withdraw anytime you want, without even having to state a reason. BUT if you dont go at all, MS may fine penalize you if they want → this must not have any inferences on litigation

What is evidence all about?

Facts

Facts, what do you know?

- The verdict is based on those facts that have been established during the procedure

There are two types of facts:

1. Facts of common knowledge (judicial knowledge; the grass is green)

2. Facts pleaded by parties (Principle 22)

Not disputed -> established facts

Disputed -> evidence is brought concerning "facts in issues"

Burden of pleading principle number

21A

Application of burden of pleading

1. Which legal consequences does a party invoke?

2. Which facts does the law require to trigger that consequence?

Principle 21.1 - what does it basically say

Each party must prove all the material facts that are the basis of that party's case. This 'goes with the burden of pleading' (21A) and it is usually determined by applicable substantive rules who has this burden.

The two elements of the burden of proof

Burden of production

&

Burden of persuasion

Burden of production

Whose turn is it to bring evidence (not really talk about)

Burden of persuasion

- The need to persuade the court that you have evidence

Important because of: Risk of non persuasion→ cases of "non liquet"*

- If you do not prove your facts when you have the burden of persuasion you will lose the case (even though the adversary also did not prove anything)

How do you know whether facts stated by parties need to be proven or not?

You look at the substantive elements of the law.

Types of defences

Negating defence (Contesting)

Affirmative defence (Accepting)

Negating defence (Contesting)

- NO burden of proof

e.g. this was NOT a tort, this was NOT attributed

Affirmative defence (Accepting)

- The defendant affirms the facts BUT something else is going on that frees of liability such as force majeure or statute of limitations

- There may be indications in statutory or contractual provisions if there is the word "Unless..."

→ in this case, the defendant has the burden of proof for the elements after the "Unless..."o

- You can have multiple defences

Standard of proof

- You have met the burden of proof when the court is reasonably convinced (Principle 21.2)

Means of proof - How to prove a fact?

Documents

Witnesses

Oaths

Inspection

Expert reports (P.22)

Indirect proof

Principle 16.6

Free evaluation:

All proof is allowed as long as they are relevant and then the judge decides what is more important. There is no rule that says documents are more important.

No unjustified significance

The judge has to explain WHY they consider something more important

'Relevant evidence' definition

the evidence will be able to affect the judge in regards to an issue

Principle 16.1

- Court and parties have access to Relevant and non privileged evidence

a) Evidence needs to relate to Facts at issue (Principle 16A)

b) No fishing expeditions

Fact pleading (vs notice pleading)

- You assert specific facts and offer specific evidence when pleading VS American discovery (cost, speed)

*You don't just say i have a case against X and i want to look at all of their documents because there might be something of interest there

Principle 16.3 and Principle 16D

Voluntary interview → Principles allow it. Lawyers can ask potential witnesses "what would you say, what would your testimony be?" - this is debatable in various jurisdictions.

Principle 16.4 and Principle 16F + written statements

For the testimony, proceed as customary in the forum

Written statements? Should they be allowed? Because usually these would be written by lawyers so is it fair? The principles allow it

Principle 16B

Party's testimony → principles allow to testify for your own case

Principle 22.4

Court experts and party experts:

Experts on foreign law may be appointed (Principle 22B)

Hot-tubbing → bring all the experts along and we will have a discussion all together and we will all discuss together

Admissibility: Balance of Relevance / right to be heard

→ anything that is relevant must be heard. But this must be balanced with the right to be heard

Admissibility: Free evaluation of the evidence

Evidence is admissible but the value depends on the evaluation of the court

Frustration of evidence

When you have the burden of proof but there may be NO way for you to bring evidence (access of hospital documents)

--> This should be balanced with good faith

What happens if a party refuses to allow access to relevant evidence?

PRINCIPLE 21.3 AND 21.C Adverse inferences. This may mean various things, including shifting burden of proof

Evidence in arbitration

- Depends on the arbitration agreement*

- Basic ideas are the same

- Usually there is a tendency to be flexible about 'rules' for evidence (moses says that)

- If issues with power over (third) parties → then adverse inferences

*(e.g. parties might apply rules from Principles, rely on institutional rules, IBA rules, UNCITRAL Model Rules)

What is arbitration and some of its characteristics?

Privately arranged litigation

- It can be institutional (ICC, PCA, ICDR etc.) or ad hoc

- It can be agreed beforehand (pre-dispute) or after a dispute arises

- If you agree to arbitration, you are waiving your right to access to court (Art. 8 UNCITRAL Model Law)→ this does not mean that you are waiving your right to a fair trial

- A court MAY refuse to enforce an award if they believe that if violated the right to a fair procedure

Is arbitration common?

YES

How can one say that arbitration is similar to litigation?

Parties pleading their case and presenting evidence in a structured legal procedure, leading to an enforceable verdict (award) by a third party (arbitral tribunal).

Arbitration agreement definition

Art. 7 UNCITRAL Model Law

Arbitration agreement" is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.

Arbitration agreement characteristics

- The arbitration agreement is central to arbitration

- It is either in a dispute resolution clause or a separate agreement

- It may include an institutional clause

Arbitration agreement elements

Article 19: Parties are free to choose the procedure. If they can not agree, the arbitral tribunal will based on the model law

Article 20: Parties are free to choose the place of arbitration. If they can not agree, the arbitral tribunal will*

Article 21: Parties are free to choose the commencement. If they can not agree, it will start when the request has been received by the respondent

Article 22: Parties are free to choose the language. If they can not agree, the arbitral tribunal will

Article 23: Statements of claim and defence required

* In an international dispute usually it will be in a neutral state → this decides the lex arbitri.

Decisions on the effectiveness of an arbitration agreement (articles)

Article 8

A court before which an action is brought in a matter which is the subject of an arbitration agreement shall [...] refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed

Article 16

The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.

Two more important things are in article 16

Severability/separability clause AND that A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

two forms of validity when it comes to the arbitration agreement

Formal validity

Substantive validity

Formal validity

- It covers formal issues such as whether the agreement has to be in writing or not

- Law of the forum*

e.g. If arbitration takes place in Sweden, and Swedish law requires a written agreement, then it must be written

Substantive validity

- It covers substantive issues such as whether the agreement covers that specific circumstance

- Law of the forum may apply OR

- The substantive law of the contract may apply

Key point: If the contract states that "German law applies to this contract," you must explicitly ensure that this also applies to the arbitration agreement; otherwise, arbitrators may apply the forum law instead.

This ability of choice can be seen in:

UNCITRAL Model Law, Art. 34(2)(a)(i)

can you apply the law of the forum if you meet somewhere else?

YESSS

Applicable laws and rules on arbitration

Substantive law

Lex arbitri (law of the forum)

Arbitration rules

Substantive law

• Covers the substantive aspects of the contract (quality of goods, delivery, damages etc.)

• Usually chosen within the contract by the parties

Lex arbitri (law of the forum)

- It is mostly the procedural law (number of arbitrators, time limits)

- Also determines the relationship between courts and arbitral tribunals (how are awards enforced, setting aside of awards etc.)

Arbitration rules

- Procedural rules as chosen by the parties, operating alongside lex arbitri but must comply with mandatory lex arbitri

Two types:

Mandatory lex arbitri rules → chosen rules cannot override

Non-mandatory lex arbitri rules → chosen rules can override

Who pays for the arbitration?

The parties- really expensive. But it depends whether more expensive than national litigation

The UNCITRAL model law on International Commercial Arbitration, what can you tell about it?

- Not a binding law. Just a model

- A combination of 'arbitration rules' and 'arbitration law' (lex arbitri / law of the forum)

i.e. what parties can freely determine and what is mandatory in a given country.

- One can say that it is comparable to the national codes of civil procedure

- Countries can adopt to a certain extent or fully this model law

Institutional arbitration rules

- Many sets of (institutional) arbitration rules exist (e.g. ICC rules)

- These do not have the 'mandatory law' elements

in other words?

In other words, the ICC may have rules on how arbitrators should be appointed, but if Sweden has mandatory rules on this, the swedish rules will apply

Relationship between arbitration and (state) courts

Why would you need courts?

- Enforcement of an arbitration agreement

- Annulment of an arbitration agreement OR award

- Interim measures / conservatory measures (Art. 9 & 17(2) Model Law)

- Assistance in taking evidence (Art. 27 Model Law)

So if I am trying to annul an award, I am basically appealing.

NOOO

→ If you go to court for any of those, it does not equal appeal.

Court assessment will never be on the merits. Even if the arbitrator was clearly wrong.

Arbitrators characteristics

- Arbitrators usually are lawyers, experts or professors

- Appointing an arbitrator =/= the arbitrator being on your side

- All arbitrators must be and appear to be impartial, independent and neutral. (art. 12, 13, 18 Model Law)

- The risk if they do not fulfil the aforementioned? A vacated award.

- They have an obligation to render an enforceable award, meaning an award that can not be annulled by a court

Strategies & methods in choosing arbitrators:

a) If there are three arbitrators, each party typically selects one arbitrator, and they together choose the chair

b) Parties exchange lists of names, and if there's a common choice, that person is selected.

c) If the parties can't agree on an arbitrator, the arbitration institution may appoint one or more arbitrators to ensure the tribunal is established quickly.

Arbitral proceedings

Once you have the arbitral procedure and everything, you go to choose the proceeding rules.

- If parties can't agree, the tribunal will decide

Examples of proceeding topics

Dates, deadlines, terms

Discovery/evidence

Witnesses/testimony

Expert reports

Tutorials

Confidentiality / 'protective order'

Governing law

Hearing procedure

Form of award

Communications

Procedural decisions

Remedies against arbitral awards

What if you don't agree with the award?

Appeal

Annulment / setting aside / vacating

Oppose efforts to enforce award

Appeal

- Usually no, but parties may introduce an appeal system

- Closest thing to appeal is the correction of an award as per article 33 Model Law

Annulment / setting aside / vacating

- Rarely successful

- You can not ask annulment based on merits

- Where? Court at the place of arbitration

- Based on which law? Lex arbitri (lex fori)

- Grounds? e.g. arbitrators went beyond the scope of the agreement, no notice, the award does not contain all requirements (signatures etc.)

Oppose efforts to enforce award

- Where? At the Court at the place of enforcement (Usually it is a state where the party has assets)

- Based on which law? Law of the court at the place of enforcement.

- Grounds? Usually the same with the reasons for annulment (examples found in Art. 36 Model Law)

Case for opposing efforts to enforce award, similar

Krombach vs. Bamberski

Steel & Morris v. UK (2005)

• Whether denial of legal aid in a complex defamation trial violated the right to a fair trial and freedom of expression

• Violation of Art. 6 § 1 and Art. 10 ECHR

• Equality of arms requires a reasonable opportunity to present a case without substantial disadvantage; in exceptionally complex cases, legal aid may be indispensable

Micallef v. Malta (2009)

• Whether Art. 6 safeguards apply to interim measures and if a judge’s family ties to a party's lawyer violated impartiality

• Violation of Art. 6 § 1 found. Art. 6 is applicable to interim/injunction proceedings

• Objective test for impartiality: "Justice must not only be done, but be seen to be done." Safeguards apply if the measure effectively determines civil rights

Krombach v. Bamberski (2000)

• Use of the "public policy" exception to refuse enforcement of a judgment from another EU Member State

• The exception must be interpreted strictly; only manifest breaches of fundamental principles (like the right to be heard) justify refusal

• Establishes that the right to be heard (audite et alteram partem) is a fundamental principle of transnational public policy

Menini and Rampanelli (2017)

• Admissibility of national law mandating mediation before court access

• Admissible if it does not unacceptably hinder the fundamental right of access to the judicial system

• Sets conditions: process must not be binding, cannot cause substantial delay/cost, and limitation periods must be suspended

CSW v. PPSB (2024)

• Whether a mediation clause acts as a binding (suspensive) condition that must be met before arbitration

• Appeal dismissed. The binding nature depends on contractual interpretation (Haviltex standard)

• A mediation clause creates a "best efforts" obligation but doesn't automatically bar court access unless clearly intended by parties

Mitsubishi Motors v. Soler Chrysler-Plymouth (1985)

• Whether international antitrust/competition law claims are capable of being settled by arbitration

• Yes, statutory antitrust claims are routinely arbitrable in international commercial contexts

• Tribunals must apply relevant mandatory law (like antitrust) or risk the award being vacated as contrary to public policy

Stolt-Nielsen v. Animal Feeds (2010)

• Whether arbitrators can impose class arbitration when the contract is silent on the matter

• No, arbitrators exceed their authority by imposing class procedures without a contractual basis

• Reaffirms that consent is the base of the regulatory pyramid; silence does not imply agreement to non-traditional procedures

Commonwealth Coatings v. Continental Cas. (1968)

• The standard for arbitrator disclosure to avoid "evident partiality

• Arbitrators must disclose "any dealings that might create an impression of possible bias

• Establishes the duty of ongoing disclosure; even if an arbitrator is "entirely fair," nondisclosure of significant ties is grounds for vacatur