Commencing Arbitral Proceedings & Constituting the Arbitral Panel Notes

Commencing Arbitral Proceedings

• Party Autonomy (s.14(1))

  • Parties are free to agree on how to commence proceedings as long as the agreement is in writing.
  • Examples include:
  • Service of notice of claim
  • Notice of an arbitrator's appointment
  • Reference standards:
  • Article 3(2) UNCITRAL Arbitration Rules (1976, 2010, 2013)
  • Article 1(2) LCIA Rules (1998), Article 1(4) (2014)
  • Article 4.2 ICC Rules (1998, 2012, 2017)

• Procedures in Absence of Agreement (s.14(3) - (5))

  • s.14(3): If arbitrator named in the agreement, proceedings commence when:
  • A notice is served requiring the other party/parties to submit the matter to that arbitrator.
  • s.14(4): If parties appoint arbitrators, proceedings commence when:
  • A notice is given requiring an appointment of an arbitrator.
  • s.14(5): If arbitrators appointed by a third party, proceedings commence when:
  • A written request is sent to that third party for the appointment.

• Content of Notice

  • Must be interpreted broadly and flexibly.
  • Important Cases:
  • Glencore International AG v PT Tera Logistic Indonesia [2016] EWHC 82 (Comm)
  • Bulk & Metal Transport (UK) LLP v Voc Bulk Ultra Handymax Pool LLC [2009] EWHC 288
  • The Lapad [2004] 2 Lloyd's Rep 109

• Example Case: Bulk & Metal Transport (UK) LLP

  • Owners’ solicitors set a claim for hire with a 7-day payment demand.
  • Stated arbitration would commence if payment was not made.
  • Invited charterers to agree on an arbitrator.

• Institutional Rules

  • Courts recognize institutional rules for determining valid commencement of proceedings.
  • A defective notice could have significant consequences, especially near the expiry of limitation periods.

Service of Notice (s.76)

• Requires effective delivery methods, as per:
  • Articles 1 and 4 of LCIA Rules (1998, 2014)
  • s.76(4): Addressed, prepaid and delivered methods for corporate bodies.
  • Service by email is also accepted without prior consent (referenced in Bernuth Lines Ltd v High Seas Shipping Ltd [2005] EWHC 3020).

Time Limits (ss.12 and 13)

• Application of Limitation Acts:

  • s.13(1): Limitation Acts apply equally to arbitral and legal proceedings.

• Time Bars:

  • Key case: Bank of Tokyo-Mitsubishi UFJ Ltd v The Owners of the MV Sanko Mineral [2014] EWHC 3927.
  • Important provisions to extend contractual limitation periods are outlined in s. 12(3)-(6).

• Determining Reasonable Contemplation:

  • Factors such as circumstances that might justify extending time limits are highlighted in SOS Corporacion v Inerco.

Constituting the Tribunal (s.15)

• Agreement of Parties:
  • Parties can agree on the number and type of arbitrators (s.15(1)).
  • Default for even-numbered arbitrators includes appointment of an additional chairman (s.15(2)).
• Default Appointments:
  • Sole arbitrator is typical when no agreement exists (s.15(3)).
• Cases Reflecting Appointments:
  • Villa Denizcilik Sanayi Ve Ticaret AS v Longen SA [1998] for express vs. implied agreements.

Procedures for Appointing Arbitrators (s.16)

• Parties are free to set procedures (s.16(1)). Deadline procedures include:
  • Sole arbitrator: 28 days from service of the request.
  • Two arbitrators: 14 days to appoint one arbitrator after written request.

Court Intervention in Appointments (s.18)

• Court's Role:
  • Under s.18(3), courts can direct appointments or revoke them if there’s a failure in the appointment process.
• Key case: Silver Dry Bulk Company Limited v Homer Hulbert Maritime Company Limited [2017] EWHC 44 (Comm) emphasizing that appointment procedures must be adhered to.

Conclusion

• The Arbitration Process is underpinned by the need for clarity in procedures, effective communication, and understanding the implications of time limits and institutional rules.
• Cases demonstrate the importance of written agreements and adherence to statutory requirements.