The Arbitral Procedure The Conduct of the Arbitral Procedure Discovery—i.e. the duty of a party to make available to the others all pertinent information for the judgment of the case which is in its possession or over which it has control—is rarely ordered. We shall return to this question when dealing specifically with requests to produce documents in Ch.6.4.3.2 (paras 652-653). 564 These few general characteristics relate to "classical" commercial arbitrations. It should be kept in mind that there are many types of arbitrations. In certain fields (shipping, insurance, commodity of raw materials, sports-related disputes, etc.) particular practices have developed which might diverge to a large extent from those described above. 6.2.2 Commencement of the proceedings, lis pendens and interruption of the statute of limitations Bibliography: General Works: Berger, pp.375-380; Bucher, pp.67-69 paras 183-187; Derains and Schwartz, pp.41-54; Fouchard, Gaillard and Goldman, paras 1212-1220; Hascher, pp.82-87; Huys and Keutgen, pp.237-238 para.346; IPRG-Volken, pp.1999-2006 para.1-43 ad Art.181; Jolidon, pp.218-229 ad Art. 13; KSP-Vogt, pp.1497-1501 ad Art.181; Lalive, Poudret and Reymond, pp.345-348 ad PILS, Art.181; Linsmeau, p.12! paras 229-231; Raeschke-Kessler and Berger, pp.I37-140 paras 570-586; Redfern and Hunter, pp.178-182 paras 4-03 to 11; Rüede and Hadenfeldt, pp.216-221 § 31; Russell, pp. 178-187 paras 5-001-039; Schlosser, pp.463^472 paras 603-628; Stein, Jonas and Schlosser, pp.524-525 ad ZPO, § 1044; Walter, Bosch and Brönnimann, pp. 122-124. Specific Studies: W. Bosch, Rechtskraft und Rechtshängigkeit im Schiedsverfahren, Tübingen 1991; G. Hauck, "Schiedshängigkeit" und. Verjährungsunterbrechung nach § 220 BGB, Tübingen 1996; 0. Sandrock, Internationale Schiedsgerichtsbarkeit und Verjährung nach deutschem Recht—Einige geklärte und einige noch ungeklärte Streitfragen, in: Uber Amicorum Karl-Heinz Böckstiegel, pp.671-696; V.V. Veeder, Towards a Possible Solution: Limitation, Interest and Assignment in London and Paris, ICCA Congress Series No.7, pp.268-293. 565 It is important to determine the commencement of the arbitral proceedings for several reasons.164 First, this allows verification that the parties have complied with any time-limits for commencing the arbitral proceedings.165 It can also determine the moment from which the matter is "pending" before the arbitrators from the point of view of a possible stay of—court or arbitral—proceedings subsequently brought by the same parties concerning the same subject matter.166 We examined above the prerequisites of stay.167 In France, the "saisine" of the arbitral tribunal is important for determining the jurisdiction of the judge competent to order a provisional payment of the disputed claim ("refere provision"). Finally, the commencement of the arbitral proceedings can have the effect of interrupting the statute of limitations where the applicable law—in "•" Hauck, op. c/7.,p.l63; Lalive, Poudret and Reymond, p.346, para.l ad PILS, Art.l8i; Mustill and Boyd, pp.169-170; Sandrock, op. cit., p.686. 163 Lalive, Poudret and Reymond, p.346, para.l ad PILS, Art.181; Sandrock, op. cit., p.686. 106 Lalive, Poudret and Reymond, p.346, para.l ad PILS, Art.181; KSP-Vogt, p.1500, para.14 ad PILS, Art.81; Sandrock, op. cit., p.686. ff'7 Ch.5.4. oaras 488-521. principle that applicable to the merits168—has such effect.169 We shall examine this question in more detail below. A number of arbitration laws make the commencement of arbitral proceedings 566 dependent on the receipt of the request for arbitration from the claimant. "Request for arbitration" means the first document issued from the claimant with the aim of commencing proceedings. It does not necessarily correspond to the filing of prayers for relief170 or to the quantification of the claim. Inspired by Art.21 of the UNCITRAL Model Law, this solution has been adopted in Germany (§ 1044, first sentence ZPO) and the Netherlands (WBR, Art. 1025(2)). Dutch law furthermore requires that a copy of the request be addressed to any arbitrators named in the arbitration agreement or any third parties entrusted with the task of appointing them. In Belgium, Italy and Sweden, the legislature has enacted the additional requirement that the request for arbitration must name the arbitrator appointed by the claimant (where the latter has the choice) for the arbitral proceedings to be pending (CJB, Art.l683(l) and (2), Art.2652 of the Italian Civil Code and SU, Art.l9(2)). In Switzerland, PILS, Art.181 distinguishes between whether the arbitrators are named in the arbitration agreement or not. If not, this article provides that the arbitral proceedings are pending from the moment when "one of the parties initiates the procedure for the constitution of the arbitral tribunal". This text suggests that the commencement of arbitral proceedings depends exclusively on the commencing of the procedure for appointing the arbitrators, without it being necessary to address a proper request for arbitration to the opposing party. In reality, several authors submit that the claimant must in any event specify the subject matter of the dispute within the framework of the constitution proceedings if it wishes to benefit from the effects of PILS, Art.181.171 The constitution of the arbitral tribunal depends primarily on the arbitration agreement and the chosen arbitration rules. In the absence of an agreement in this respect, constitution proceedings commence at the moment when the claimant applies to the court for assistance pursuant to PILS, Art.l79(2).'72 Where the name of the arbitrator appears in the arbitration agreement, the arbitral proceedings are deemed pending from the moment that one of the parties "seizes" it (PILS, Art.181). The German text of PILS, Art.181 specifies that such "seizure" is triggered by the filing of prayers for relief (Rechtsbegehren). The majority of authors deem this prerequsisite fulfilled provided the party indicates "the subject matter of the dispute or the list of questions to be decided"173; a ,6S Berger, p.375. 169 Lalive, Poudret and Reymond, p.346, para.l ad PILS, Art.181; IPRG-Volken, p.2000, para.7 ad PILS, Art.181. — „ 170 See Ch.6.2.3. 171 Bucher, p.68, para. 184; Laiive, Poudret and Reymond, p.348, para.3 ad PILS, Art.181; Riiede and Hadenfeldt, p.221, § 31 IV 4. m Bucher, p.68, para. 184; KSP-Vogt, p.1499, para.8 ad Art.181; Lalive, Poudret and Reymond, pp.347-348, para.3 ad. PILS, Art.181. 173 Lalive, Poudret and Reymond, p.347, para.2 ad PILS, Art.181; similarly IPRG-Volken, p.2004, oaras 31-33 ad Art.181: KSP-Voct. d.1499. oara.ll ad Art.181. The Arbitral Procedure The Conduct of the Arbitral Procedure detailed brief'74 or an indication of the precise amounts claimed are not necessary. PILS, Art. 181 was inspired by Art. 13(1) of the Concordat which establishes very similar principles with regard to the commencement of arbitral proceedings. However, Art. 13(2) adds that: "where the arbitration rules chosen by the parties or the arbitration agreement provide for conciliation proceedings, the initiation of such proceedings shall be assimilated to the commencement of the arbitral proceedings." Although this is not clear from PILS, Art. 181 we are of the opinion that this rule also applies in international arbitration in cases where preliminary conciliation proceedings are mandatory for the parties.175 In England, ss.14(3)-<5) of the Arbitration Act 1996 make the same distinction as Swiss law so that the commencement of arbitral proceedings varies depending on whether the arbitrators are named or not in the arbitration agreement. The English solution, however, differs from all the other laws examined above in that the commencement of arbitral proceedings begins already once the claimant "requires" the respondent to proceed. Section 14(3) of the Arbitration Act 1996 provides that where the arbitrator or arbitrators are named in the arbitration agreement the proceedings have commenced when the claimant "serves on the other party or parties a notice in writing requiring him or them to submit that matter to the person so named or designated." Where they are not named, ss.14(4) and (5) fix the beginning of the proceedings at the point where the claimant invites the other party to nominate its arbitrator or to consent to the appointment of a sole arbitrator, or invites a third party to constitute the arbitral tribunal.176 In any event, it seems that the claimant must indicate at least summarily the subject matter of the dispute (as the law says "in that matter"). 567 In France, the courts seem to have examined the question of the commencement of arbitral proceedings above all in connection with the jurisdiction of the so-called juge des referes to order provisional payment ("provision*) in arbitration cases.177 We shall see that such power is conferred on the judge only until the arbitral tribunal has been seized.178 In this context, the notion of "seizure" of an arbitral tribunal has been defined in a number of different ways179 but appears in any event to imply that an arbitral tribunal has been "constituted".180 It is consequently not suitable for determining the moment from which the arbitral proceedings are "pending" (not least because it allows the respondent 174 Lalive, Poudret and Reymond, p.347, para.2 ad PILS, Art. 181. 175 Bücher, p.68, para.184. See Rüede and Hadenfeldt, p.221 § 31 IV 4 b bb) (apparently not of the same opinion although they refer to Bucher). 176 Merkin, p.53 ad s.\4. 1,7 See Eesson, pp.2L2-214, paras 345-346. 178 Ch.6.3.2.2, para.613. de Boisseson, p.691. para.723; Gaudemet-Tallon, Rev. arb. 1990, p.645; Hory, Rev. arb. 1996, pp.202-203. to delay such moment by opposing or complicating the constitution proceedings).181 Putting aside the case where a judge orders a provision, we believe that arbitral proceedings should be deemed commenced when the claimant seizes the arbitrators or, if they are not yet designated, initiates proceedings for the constitution of the arbitral tribunal. However, the Com de Cassation confirmed in connection with insolvency proceedings that the arbitration is pending when the arbitral tribunal is constituted and can be seized of the case, i.e. after the acceptance of their mission by all arbitrators.I8la An examination of the various national laws hence reveals that the commencement of arbitral proceedings is not governed by uniform criteria and consequently does not necessarily always begin at the same time. Does their autonomy allow the parties to replace legal criteria by their own 568 definition of the commencement of arbitral proceedings? A number of laws allow this, i.e. in Germany (ZPO, § 1044, first sentence), England (Arbitration Act 1996, s.l4(l)), the Netherlands (WBR, Art.l025(3)) and Sweden (SU, Art. 19(2)). Other laws are less clear on this point and seem to impose on the parties the criteria on which the commencement of arbitral proceedings depends. :, In Switzerland, CIA, Art. 13, governing the commencement of arbitral proceed- ings in domestic arbitration, is on the list of mandatory provisions listed in CIA, Art. 1(3). Even where the criteria governing the commencement of arbitral proceedings are mandatory the modalities primarily depend on the arbitration agreement. Thus, the manner of "seizing" the arbitral tribunal or "beginning the constitution proceedings" is determined by rules chosen by the parties.182 From this point of view, the consequences of a mandatory definition of the commence- \; ment of arbitral proceedings do not seriously restrict the parties' autonomy.183 Several sets of arbitration rules contain a specific provision regarding the * moment when the arbitral proceedings are deemed to have commenced. The majority has adopted the criterion of receipt of the request for arbitration by the I respondent or the arbitral institution to which it is addressed.184 | Under a number of laws, the commencement of arbitral proceedings also has 569 the effect of interrupting the statute of limitations of the claims raised in the arbitral proceedings. This is the case in Italy, where the same criteria apply for the interruption of the statute of limitations (Art.2943 of the Italian Civil Code) I and the commencement of arbitral proceedings (Art.2652 of the Italian Civil Code). In Belgium, authors recognise that notification in the meaning of CIB, Art.1683 has the effect of interrupting the statute of limitations.185 The French courts have decided similarly that the seizure of an arbitral institution which is "in conformity with the arbitration agreement and is made in the form provided j 181 Ch.5.4.4, para.507: Besson, pp.212-214, para.346. .} IB'"Cas., Rambour et al v Frabaltex, Rev. arb. 2005, p.975, ,s~ Lalive, Poudret and Reymond, p.347, para.3 ad PILS, Art. 181; IPRG-Volkeri, p.2004 para 34 ad PILS, Art.181. 183 See Jolidon, p.220. 184 ICC Rules, Art.4.2; LCIA Rules, Art. 1.2; Swiss Rules, Art.3.2. 185 Hnvs anH TCenfue.n n nsrra Idfv T inempan nl?l ran I The Arbitral Procedure The Conduct of the Arbitral Procedure for by the rules", has the effect of interrupting the statute of limitations.186 The same solution seems to have been adopted in Sweden.187 Such effect, however, implies that the law applicable to the merits of the disputes (which usually determines the statute of limitation) coincides with that of the country of the seat of the arbitration. Otherwise, the criteria governing the commencement of arbitral proceedings and the interruption of the statute of limitations can differ. English law avoids this inconvenience. Section 13 of the Arbitration Act 1996 provides mandatorily that an arbitral tribunal sitting in England must conform to ! the Limitation Acts which apply before the English courts. In addition, s.14 of j the Arbitration Act 1996 governing the beginning of the arbitral proceedings j specifies that the proceedings are deemed commenced not only in the meaning of the Arbitration Act, but also as far as the statute of limitations is concerned (" ... for the purposes of this Part and for the purposes of the Limitation Acts"). It results from this approach that in the event of arbitration in England the commencing of the arbitral proceedings and the interruption of the statute of \ limitations depend exclusively on the criteria established in s.14 of the Arbitra- J lion Act 1996, even if English law is not applicable to the merits of the dis- i put e.'88 By contrast, Swiss law does not assimilate the interruption of the statute of limitations to the commencement of arbitral proceedings, for the former depends exclusively on substantive law (CO, Art. 135). It is true that arbitral proceedings "" are similar to court proceedings as far as the statute of limitations is concerned (CO, Art. 135(2)), but the intemiptive effect takes place at the moment of the "filing of the claim" (Ouverture d'action/Klageerhebung), which is a substantive law concept.189 Accordingly, the claimant must comply with the requirements of substantive law in order to interrupt the statute of limitations. In Germany, the interruption of the statute of limitations appears, like in Switzerland, to depend exclusively on substantive law criteria.190 As the white paper of the German government regarding ZPO, § 1044 (commencement of arbitral proceedings) shows, this provision does not affect the rules contained in BGB, § 220 on the interruption of the statute of limitation.191 Certain authors have, however, contested this interpretation and submitted that the interruption of } the statue of limitation now depends exclusively on the criteria set out in ZPO, j § 1044.192 The practical consequences of this controversy become manifest j IH"Cas., Rev. arb. 1987, p.3S7. l" Jarvin, p.53. lw This does not mean that the law applicable to the merits of the dispute is without bearing on the statute of limitation. In particular, s.l of the Foreign Limitation Periods Act 1984 subjects limitation . periods to the lex causae, Arbitration Law, para. 11.3; Reymond, Rev. arb. 1997, pp.62-63; Veedet. ■ op. dr., pp.278-280. j 189 ATF 33 II 306 c.2; TC VS RSJ 1979, p. 133; Jolidon, pp.222-229; Lalive, Poudret and Reymond, p.346, para.l ad PILS, Art.181; KPS-Vogt, p.1500, para.18 ad Art.181; Walter, Bosch and Bronnimann, p.123; see also Fouchard, Gaillard, Goldman, para.1216. 190 Raeschke-Kessler and Berger, p.138, para.574; Schwab and Walter, pp.136—137 Ch.16, para.5. iyi Bundesregierung, pp.47-48 ad § 1047. 11,2 Sandrock. on. rit.. n.682 (with references') and dtj.687-688. 1 where the arbitrators are not named in the arbitration agreement.193 Pursuant to BGB, § 220(2) the statute of limitations is interrupted when the claimant has taken the steps necessary to constitute the arbitral tribunal, which implies the nomination of its arbitrator.'94 Under ZPO. § 1044, on the other hand, it is not necessary that the arbitrator be nominated: the receipt of the request for arbitration is sufficient. In view of this uncertainty, it is advisable to appoint the arbitrator when the limitation period is a concern for the claimant at the time of the filing of the request for arbitration. In view of the possible divergences between the law governing the commencement of arbitral proceedings and the substantive law governing the interruption of the statute of limitations it is prudent to verify that a request for arbitration will satisfy the requirements for both, at least where there is a danger of a deadline elapsing. As Mustill and Boyd have written,195 "when enquiring whether sufficient steps have been taken to set an arbitration in motion, the answer may depend on the reason why the question is being asked". This recommendation remains important, except under English law! Where the law applicable to the statute of limitations recognises the principle of autonomy on this point, the question arises as to whether the aforementioned provisions of arbitral rules concerning the commencement of the arbitral proceedings also govern the interruption of the statute of limitations. Sandrock is of the opinion that it does'96 as far as Art.4.2 of the ICC Rules is concerned— notably because this provision purports to govern the beginning of the arbitral proceedings "for all purposes"—as well as for Art.3 of the UNCITRAL Rules and Art.6 of the DIS Rules. In view of its practical importance we would mention in conclusion a difficult 570 issue in Swiss law concerning the validation of a freezing order obtained in advance of arbitral proceedings. Article 279(1) of the Swiss Federal Statute on Debt Collection and Bankruptcy provides that "a creditor who has obtained a freezing order without beforehand filing debt collection proceedings or a court claim must file either debt collection proceedings or a court claim within 10 days of receiving the protocol [of the freezing order]." If the creditor files debt collection proceedings and the debtor raises an objection, the creditor must again adhere to a time-limit of 10 days for filing his court claim (LP, Art.279(2)). The effects of the freezing order elapse if the time-limit of 10 days is not respected. Where the matter must be brought before an arbitral tribunal the members of which have not been appointed at the moment the freezing order is made, the creditor must not only request the constitution of the arbitral tribunal within 10 days, but must also bring its claim within 10 days of the tribunal having been constituted.197 It is irrelevant whether the chosen arbitral'rules provide for longer m Berger {First Experiences), pp.36-37. 194 Berger (First Experiences), pp.36-37. 193 Mustill and Boyd, p.169. 196 Sandrock, op. cit., pp.678-681; apparently of the same opinion Derains and Schwartz, p.43. 197 ATF 101 IB 58, c.2; ATF 112 III 120, c.2. The Arbitral Procedure The Conduct of the Arbitral Procedure time-limits for filing such claim.198 This means that the party which has obtained a freezing order in Switzerland must take special care to adhere to the time-limits contained in the Statute on Debt Collection and Bankruptcy so as not to lose the benefit of this conservatory measure. It cannot confine itself to following either the principles of PILS, Art.181 or even time-limits contained in the arbitration rules chosen by the parties or established by the arbitrators. 6.2.3 Prayers for relief or claims Bibliography: General Works: Craig, Park and Paulsson, pp.277-278 § 15.02; Craig, Park and Paulsson, (Annotated Guide), pp.121-122; Derains and Schwartz, pp.69-72 and pp.266-270; Fouchard, Gaillard and Goldman, para.1218; Huys and Keutgen, pp.260-261 paras 381-382; KSP-Schneider, pp.1528-1529 paras 79-83 ad Art. 182; RUede and Hadenfeldt, pp.217-218 § 31 III and 257-258 § 35 III; Russell, pp.221-222 paras 5-148; Schlosser, pp.498-500 para.671; Schwab and Walter, pp.!44-145 Ch.16 paras 29 and 30. Specific Studies: Y. Derains, Amendments to the Claims and New Claims: Where to Draw the Line? in: Arbitral Procedure at the Dawn of the New Millenium, op. cit. ad Ch.6.1, pp.67-72; P.-Y. Gunter, Les conclusions et les chefs de demande dans Varbitrage international resume du colloque du 6 mars 1995 á Paris, ASA Bui. 1995, pp.32-41; F. Lefěvre and J.D.M. Lew, The Scope and Contents of the Request for Arbitration in a Comparative Perspective, in: Arbitral Procedure at the Dawn of the New Millenium, op. cit. ad Ch.6.1, pp.13-30 and pp.33-40; F. Perret, Les conclusions et les chefs de demande dans ('arbitrage international, ASA Bui. 1996, pp.7-20 (cited ASA Bul.); id., Les conclusions et leur cause juridique au regard de la regie ne eat judex ultra petita partium, Etudes Pierre Lalive. pp.595-605 (cited: Etudes Laiive); P. Level, op. cit. ad Ch.3.4.2; E. Silva-Romero, Brief Report on Counterclaims and Cross-Claims: The ICC Perspective, in: Arbitral Procedure at the Dawn of the New Millenium, op. cit. ad Ch.6.1, pp.75-81; Wiegand, op. cit. in Ch.6.1; M. Wirth, Rechtsbegehren in internationalen Schiedsverfahren—wie bestimmet müssen sie sein?, in Festschrift Franz Kellerhals, pp.145-158. 571 According to the terminology followed here the word "claim" or "prayers for relief" {chefs de demande, Rechtsbegehren or Anträge) means "the precise indication of what the party wishes to obtain in the judgment".199 This concept corresponds to that of "pretention" pursuant to NCPC, Arts 4-6.200 It is generally recognised that a prayer for relief does not include its underlying legal ground (or "causa")—i.e. the legal rules invoked in support of the claim before the arbitral tribunal.201 It follows that an arbitral tribunal does not decide ultra petita if it upholds a party's claim for different legal grounds than those invoked.202 It has been held that this would only be otherwise if the party has manifested its clear intention of binding its claim to specific legal grounds ("it is requested that the arbitral tribunal order the respondent to pay US$1 million due 19S ÄTF 112 III 120, c.2. lw Perret, op. cit. (ASA Bui.), p.7. 21X1 Perret, op. cit. (ASA Bui.), p.8. 21)1 Swiss Federal Tribunal, ASA Bui. 1995, pp.217, 220 cla; Perret, op. cit. (ASA Bul.), PP-8-9; Ch.9.5.5.3, para.807. 202 Swiss Federal Tribunal, ASA Bui. 1995, pp.217, 220 c.la); Swiss Federal Tribunal, ASA Bui. 2001, p.531, c.5c: an award granting damages (which were not claimed) instead of the requested payment in fulfillement of a bank guarantee is not ultra petita; ÄTF 122 III 492, ASA Bul. 2002, p.258, c.2 c bb); Wiegand, op. cit., pp. 133-137. to respondent's violation of the non-competition clause binding the parties").203 This conception has been criticised by Perret,204 but is in our opinion justified since a claimant who qualifies his claim legally is deemed to have waived any other legal grounds. The exact determination of the parties' claims before the arbitral tribunal can 572 play an important role in the event of an application to set aside the award. All the laws considered here allow at least the partial setting aside of an award which is ultra petita.205 This ground can also be invoked in support of an application to resist recognition and enforcement of a foreign award pursuant to Art.V(l)(c) of the New York Convention.206 According to the case law of the Swiss Federal Tribunal, an undefined prayer for relief is not without effects and prevents an action for setting aside the award based on a breach of the principle ultra petita if the other party has not raised a specific objection in that respect.2063 In this case, the only prayer for relief which could cover the decision made by the arbitral tribunal was the following undefined claim: "Awarding to Claimant such other and further relief as the Arbitral Tribunal may determine is just and appropriate under the law". The Swiss Federal Tribunal dismissed a challenge of the award based on the breach of the principle ultra petita (PILS, Art.l90(2)(c)) because the defendant party did not object specifically to such an undefined prayer for relief in the course of the arbitration. The party against which such undefined prayer for relief is made should object and request the arbitral tribunal to invite the other party to make it more specific. Contrary to this case law, Wirth206b is of the opinion that prayers for relief should be precise, not only in domestic court procedures, but also in international arbitration. He further submits that the arbitral tribunal has a duty to invite the parties, even on its own initiative, to make their prayers for relief more specific. Another issue is whether the claimant can seek a mere declaration of its entitlement from the arbitral tribunal. It is usually recognised that it must justify an "actual interest" to do so.206c However, we note that most arbitral tribunals adopt a flexible approach and rarely dismiss in practice a claim for a declaration for lack of sufficient interest. In particular, the strict limitations of Swiss substantive law concerning a declaratory judgement—which is unavailable if a claim for damages is possible20611—are often disregarded by arbitral tribunals. Even if this approach does not comply with the applicable substantive law, it is 203 ATF 122 HI 492 = ASA Bui. 2002, p.258, c.2 c bb). See also the decisions of the Swiss Federal Tribunal and of the Paris Cour d'appel analysed and criticised by Perret, op. cit. (Etudes Lalive), particulary pp.602-603 and {ASA Bui.), pp. 12-14; in addition see Ch.9.5.3.3, para.807. 2U4 Perret, op. cit. {Etudes Lalive) and (ASA Bui.), particularly; pp. 12-16. 205 Ch.9.5.3.3, paras 801-807. 2O6Ch.l0.5.3.3, para.913. 206a Swiss Federal Tribunal, ASA Bui. 2002, p.493, c.3b, criticised by Besson, ASA Bui. 2003, .pp.479-4S0 and by Wirth, op. cit., pp. 151-52. 206b Wirth, op. cit., pp.157-158, Ch.3. 2n&ICC Award No.9617, JDI 2005, pp.1291, 1292-1293. 20fidATF 120 II 144. The Arbitral Procedure in most cases not possible to challenge the award on this ground (see Ch.9.5.8). It is frequent that during the arbitral proceedings claims are expanded or modified or that the respondent files counterclaims. We shall now concentrate on these two questions. 573 Some laws and arbitration rules contain a specific rule concerning the widening of claims during the course of the proceedings. Inspired by Art.23(2) of the UNCITRAL Model Law, ZPO, § 1046(2) allows the parties to amend or supplement their claims during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow such amendment having regard to the delay in making it without sufficient justification. It is regrettable that the arbitral tribunal's decision depends exclusively on whether the amendment is timely or not, since there are other criteria which could also be taken into consideration. SU, Art.23(3) and (4) escapes this criticism because it allows the arbitrators to take into consideration both lateness and "all other circumstances'' in assessing the admissibility of amended or supplemented claims. The same applies to "new" ones. We note that both in Germany and Sweden the principle of party autonomy is reserved. Clarifying Art.23(2) of the Model Law, Art.20.1 of the UNCITRAL Rules and Art.20.1 of the Swiss Rules provide that the parties can amend or supplemem their claims ("claims" is unfortunately translated to "requ&te" in the French version) unless the arbitral tribunal considers it inappropriate to allow such amendment having regard to the delay in making it or prejudice to the other party or any other circumstances.207 Article 44 of the WIPO Rules contains a very similar rule. In ICC arbitration, the filing of new prayers for relief during the course of the arbitral proceedings raised particular problems due to the unfortunate wording of Ait. 16 of the 1988 version of the rules, which provided that "new claims" must remain within "the limits fixed by the terms of reference provided for in Art.l3'; or that they are specified "in a rider to that document". This gave rise to controversies and practical difficulties.208 The new ICC Rules of 1998 modified this provision to avoid the situation whereby a party can oppose the filing of new claims, even without a legitimate reason, after the signing or ratification of the terms of reference. Henceforth the arbitral tribunal has the power to authorise either of the parties to file new claims which fall outside the limits of the terms of reference. It shall thereby take into consideration "the nature of such new claims or counterclaims, the stage of the arbitration and other relevant circumstances" (Art. 19 of the ICC Rules). It is regrettable that this rule does not provide more precise objective criteria, in particular connexity between the original 207 This provision of the UNCITRAL Rules is criticised by Fouchard, Gaillard and Goldman, para.1218; see ASA Bui. 2004, p.766, c.4, where the claim was increased in application of this provision of the UNCITRAL Rules from 7 to 36 millions on the basis of a different legaJ provision. 208 Arnaldez, op. cit. ad Ch.6.2.4, pp.25-31; Craig. Park and Paulsson, p.278 para.15.02; Fouchard, Halliard and Goldman, oara.1233. The Conduct of the Arbitral Procedure claims and the additional ones and the foreseeable impact of their filing on the conduct and duration of the proceedings. Article 19 of the ICC Rules is not revolutionary. It confirms the principle that new claims after the terms of reference have entered into force are generally prohibited unless the arbitral tribunal specifically allows them.209 As under the previous rules,210 this provision determines what is a "new" claim by reference to the "limits of the Terms of Reference", which means the prayers for relief contained in that document, i.e. the subject matter of the dispute, and not the legal basis for the claim. However, the former difficulties are mitigated by the power now granted to the arbitral tribunal to authorise the filing of "new" claims.211 Without entering in detail into the numerous awards and opinions on this subject212 we would merely indicate that a "claim" is not "new" simply because it is based on new arguments or new legal grounds.213 The same applies to an increase in the amount of the claim, at least according to the majority opinion.214 On the other hand, the question of whether set-off claims are "new" is subject to different approaches depending on the nature of the set-off defence.215 A different form of relief changes the subject matter in dispute and should be characterised as a new claim.215'' In the absence of a specific rule in the law or the arbitration rules the arbitral tribunal can decide to admit new or amended claims based on its power to conduct the arbitral proceedings.216 The mandatory procedural principles, in particular the right to be heard, and the principle of equal treatment, are evidently applicable and can limit the power of the arbitrators. If the parties have submitted to a national code of civil procedure,217 the arbitrators must apply the criteria established therein. To avoid disputes over the admissibility of new claims, certain authors consider that the arbitrators should indicate in advance the moment from which such claims are no longer admitted.218 However, such indication risks being interpreted as an open door to file new claims before the deadline, even claims which have no connection with the original ones. ; ,.„ M" Derains and Schwanz, pp.267-268. \ 310 Fouchard, Gaillard and Goldman, para.1233 of the English version. i 211 Craig. Park and Paulsson, p.278 para.15.02. 212 See notably Arnaldez, op. cit. ad Ch.6.2.4, pp.25-31; Derains and Schwartz, pp.268-269 with references; Fouchard, Gaillard and Goldman, para.1233 with references. < 2,1 Craig, Park and Paulsson. p.278 para.15.02; Fouchard, Gaillard and Goldman, para.1233 with ■ references. ,! 21J Reiner, op. cit. ad Ch.6.2.4, pp.68-69; Craig, Park and Paulsson, p.279 para.15.02; Derains and ' Schwartz, p.269; Fouchard, Gaillard and Goldman, para.1233. are more restrictive, j 2l? Derains and Schwartz, p.269; Reiner, op. cit. ad Ch.6-.'2^4,-.pp.69~70. ; 215a See Derains and Schwartz, p.269, giving the example—without approving it—of a change in the ! currency of the relief, which was treated by "some arbitrators" as an inadmissible new claim. In our opinion, the determination of the applicable currency does not affect the subject matter of the dispute I and, therefore, a change in the currency should not be treated as a "new" claim. i ► 216 KSP-Schneider, p. 1529 para.82 ad IS2: Riiede and Hadenfeldt, p.217. 2,7 As to whether such a choice is useful see Ch.6.1.2.2, para.529. 2,B Fouchard, Gaillard and Goldman, para.1218. The Arbitral Procedure The Conduct of the Arbitral Procedure 574 Despite its practical importance, the question of the admissibility of counterclaims before an arbitral tribunal is only explicitly mentioned in German and Swedish law and in Art.23(l) of the UNCITRAL Model Law from which they are derived. German law refers to the provisions applicable to the request for arbitration (ZPO, § 1046(3)). In our opinion, the result is that there is no particular limitation on counterclaims (based on the same arbitration agreement as the principal claims) provided they are filed with the statement of defence.219 Subsequently the principles governing the new claims or amendments to the principal claims apply. Swedish law is more restrictive in that it always subjects the admissibility of counterclaims to the criteria applicable to new claims (SU, Art.23(3)). Agreements to the contrary are reserved both under German and Swedish law. The arbitration rules considered here contain no restrictions on the admissibility of counterclaims raised in the statement of defence.220 At a later stage, the principles governing the new claims or amendments to the principal claims apply also to counterclaims.221 The admissibility of counterclaims may be limited by rules choosen by the parties to govern the arbitral proceedings.222 If, for example, they choose the Swiss Act on Federal Civil Procedure, they limit the power of the arbitral tribunal to admit counterclaims to those which "are legally connected with the principal claim" (Art.31).223 In the absence of a particular rule in the lex arbitrii, the arbitration rules or the chosen procedural rules, the arbitral tribunal may freely determine the admissibility of counterclaims by virtue of its power to determine the arbitral proceedings.224 The counterclaims must fall under an arbitration agreement between the parties,225 albeit not necessarily that upon which the jurisdiction of the arbitral tribunal over the principal claims is based 226 In the latter case the admissibility of the counterclaim presupposes that the modalities of arbitration pursuant to both agreements are compatible. The arbitral tribunal is free to determine whether it proposes to make the admissibility of counterclaims dependent on the existence of a sufficient "connection" or "connexity". According to Fouchard, Gaillard and Goldman,227 219 See Schwab and Walter, p.345, Ch.16, para.31. who require a "connection" with the principal claim although no such condition is mentioned in the text of the law, but recognise thai such connection is given if the counterclaim is based on the same arbitration agreement as the principal claim. 22"ICC Rules, Arl.5.5; LCIA Ruies, Art.2.1(b); UNCITRAL Rules, Art.19.3; Swiss Rules, Art.3.9; WIPO Ruies, Art.ll. 221 See ICC Rules, Art. 19. UNCITRAL Rules, Art. 19.3, however, provides a specific rule for counterclaims, which was not adopted in the Swiss Rules. 222 As to whether such a choice is opportune see Ch.6.1.2.2, para.529. 22* Riiede and Hadenfeldt, p.257. 224 Fouchard, Gaillard and Goldman, para.1222; Lalive, Poudret and Reymond, p.382, para.7 ad PILS, Arl.186. 225 Raeschke-Kessler and Berger, p.166, para.699. 226 Lalive, PoudTet and Reymond, p.382, para.7 ad PILS, Art. 186. 227 T3„„„r,nrH r.-.llvrti ov.fi finlHrnon novo mo such a connection is not necessary where a counterclaim "is based on the same arbitration agreement" as the principal claim. The admissibility of counterclaims should not be confused with the power of the arbitral tribunal to take a plea of set-off into consideration. We refer in this respect to Ch.3.6.3 (paras 317-325). Furthermore, the admissibility of counterclaims is distinct from the issue of whether a respondent may file a cross-claim against another respondent in the same arbitration. Under the traditional approach followed by the ICC Court, such cross-claim was not permissible, but the recent trend favors more flexibility and allows the arbitral tribunal to rule on the admissibility of the cross-claim.227" 6.2,4 Terms of reference Bibliography: Genera! Works: Berger, pp.398-406; Craig, Park and Paulsson. pp.273-293 § 15; Craig, Park, and Paulsson (Annotated Guide), pp.115-118; Derains and Schwartz, pp.250-266; Fouchard, Gaillard and Goldman paras 1228-1237; Reiner (1998), pp.41-44. Specific Studies: J.J. Arnaldez, facte determinant la mission de l'arbitre, in: Etudes Pierre Bellet, pp. 1-31; F. Kellerhals and E. Berger, Terms of Reference, Ihre Bedeutung für das Schiedsverfahren, Recht 2002, pp.24-36; P.M. Patocchi and H. Frey-Brentano, The Provisional Timetable in International Arbitration, Uber Amicorum Robert Briner. pp.575-599; A. Reiner. The Term of Reference. ICC Bui. 1996 vol. 7/2. pp.60-73; P. Sanders, The Terms of Reference in ICC Arbitration, Liber Amicorum Robert Briner, pp.693-706; M.E. Schneider. The Term of Reference, in: The New 1998 ICC Rules of Arbitration, ICC Bull., Special Supplement 1997, pp.26-37. The Terms of Reference ("Acte de mission") are an institution peculiar to the 575 ICC rules which have been adopted by the CEPANI Rules.228 However, it is not unusual for arbitral tribunals to establish in the beginning of the arbitration a document, sometimes labelled constitutional order, containing the same information as the ICC Terms of Reference. The puipose of the Terms of Reference was originally to obtain the parties' submission to an agreement to arbitrate ("compromis d'arbitrage") at a time when the validity of arbitration clauses applicable to future disputes was less widely recognised than today.229 Over the years its role has gradually developed. Today the terms of reference are essentially a document defining the framework of the dispute, drawing the parties' attention to the principal questions at issue230 and determining certain particular aspects of the arbitral proceedings. Article 18 of the ICC Rules provides that the terms of reference shall in particular indicate the full names and descriptions of the parties and arbitrators, a summary of the parties' respective claims and of the relief sought by each party, a list of the issues to be resolved, the place of the arbitration and particulars of the applicable procedural rules. 227i' Hanotiau, op. cit. ad. Ch.3.4.2 (.Joinder), pp.197-198. Ms Fouchard, Gaillard and Goldman, para. 1229. See ICC Rules, Art. 18 and CEPANI Rules Art. 15. 229 Derains and Schwartz, p.247. 230In more detail Fouchard. Gaillard and Goldman, twao l?1l_m4 The Arbitral Procedure The Conduct of the Arbitral Procedure We shall not return here to the question of whether terms of reference are opportune or to the effects of the document in ICC arbitration. These topics have been the object of numerous articles and are not the main focus in a work on comparative arbitration law.231 576 We shall limit ourselves here to the legal nature of the terms of reference. As Fouchard, Gaillard and Goldman have pointed out,23a it is helpful to distinguish whether or not the parties have signed the document in accordance with Art. 18.2 of the ICC Rules. If they have signed without any reservation, the terms of reference are a real agreement and a submission to arbitrate with respect to the issues dealt with therein.2" As the Sofidif7"* case illustrated, they bind the arbitrators and their violation may, according to the majority of arbitration laws, constitute a ground for setting aside the award.235 The terms of reference may extend (he scope of the original arbitration agreement and may modify or supplement it in certain respects, for example by determining the seat, the language of the proceedings or the scope of future challenge proceedings against the award if the law of the seat thus allows.236 In our opinion, the signing of terms of reference does not have the effect of restricting the scope of the arbitration agreement unless (he parties expressly so provide.237 In addition, adherence to terms of reference does not necessarily imply recognition of the arbitrators' jurisdiction, but the respondent should include this point in the list of disputed issues.2?s In the absence of an agreement between the parties as to the contents of the terms of reference the latter are approved by the ICC International Court of arbitration pursuant to Art. 18.3 of the ICC Rules. In such case, the terms of reference neither modify the parties' contractual agreements nor constitute an 2J1 Arnaldez, op. cit, pp.15-18; Craig, Park and Paulsson, pp.273-276 § 15.01; Derains and Schwartz, pp 248-249: Fouchard, Gaillaid and Goldman, paras 1231 — 1234; Reiner, op. cit., paras 61-62; Sanders, op. cit., suggesting to replace Art. 18 of the [CC Rules by a provision on preparatory meetings. 232 Fouchard. Gaillard and Goldman, paras 1235-1236. 233 Paris, Kis France, Rev. arb. 1987, p.498; Fouchard, Gaillard and Goldman, para.1236; Derains and Schwartz, p.248, fn.143. The question is howeveT controversial: see Craig, Park and Paulsson, pp.291-293 § 15.05. The English courts do not seem to attribute any effect whatsoever to terms of reference with respect to the jurisdiction of the arbitrators (see Craig, Park and Paulsson, p.292 § 15.05, with reference to CA. Dalniut v National Bank of Pakistan [1978] 2 Lloyd's Rep. 223). 234 Paris, Rev. arb. 1987, p.359 and Cas., Rev. arb. 1989, p.481, with a note by Jarrosson. On this case, see Ch.8.1.1. para.725: Craig, Park and Paulsson, pp.2S7-289 §15.05; Fouchard, Gaillard and Goldman, para.1236. 23-. pp.415-424; L. Levy and A.V. Schlaepfer, La suspension d'instance dans {'arbitrage international, Les Cahiers de I'arbitrage No.2001/2, Gaz. Pal. 14-15 Nov 2001. pp. 18-26; D. Poncet and A. Macaluso, La suspension de la procedure arbitrate comme dependant du penal: un brefetat des lieux, in Festschrift Franz Kellerhals, pp.65-73. 581 The arbitral proceedings may be affected by various incidents which impede their smooth conduct. In certain cases such incidents can justify a stay of the arbitral proceedings—i.e. their "interruption" in the meaning of NCPC, Art.369 j et seq. NCPC—for a certain lime until the obstacle has been removed. j Despite its practical importance the question of the stay of the arbitral proceedings hardly attracted the attention of authors until recently.247 The laws and arbitration rules rarely contain explicit provisions governing this question. We shall examine these below. ■■MS t 244 WIP0 Rules, Art.40(a); LCIA Rules, Art. 17, which distinguishes between the "initial" language—that of the arbitration agreement—and the language of the arbitration as determined by the arbitrators; Art.17.1 Swiss Rules does not provide any criteria. 245 We would point out that in practice the courts sometimes waive the translation of documents which it is capable of understanding albeit they are in a foreign language. Thus, the Swiss Federal Tribunal does not generally request the translation of documents or awards in English within the framework of an action for setting aside the award. 240 See Ch.2.4, para. 134. In the absence of an express rule in the law or the arbitration rules, the stay of the arbitral proceedings is a procedural question which the arbitral tribunal is at liberty to determine in the absence of an agreement between the parties.248 The decision to stay is essentially a question of efficiency and of weighing the interests between the necessity of continuing the arbitration rapidly and the risk of unnecessary operations and costs or, worse, of conflicting decisions. Stay is one of the solutions to this problem, but in the majority of cases it is not mandatory. The decision to stay is in principle made in the form of a procedural order which can be revoked, and not in a proper award.249 We shall see however that the courts have sometimes departed from this principle and assimilated a decision to stay to a proper award in order to review.250 However, wiien the stay is discretionary, the Swiss Federal Tribunal held that it could not review the arbitral tribunal's decision.2503 The question of the stay of the arbitral proceedings is generally raised where an action for setting aside has been lodged against a preliminary award, where an arbitrator has been challenged, where connected proceedings over which the arbitral tribunal does not have jurisdiction are pending, or where one of the parties is declared bankrupt. We shall examine the first of these cases in detail in Ch.9.4 paras 781-784. 582 Here it shall suffice to point out that challenge proceedings against a preliminary award concerning the jurisdiction of the arbitral tribunal does not automatically entail a stay of die arbitral proceedings. The Swiss Federal Tribunal has held that this remains the case even if the appeal stays the enforcement of the preliminary award: "[The appellant] submits that the stay of the effects of the decision concerning the jurisdiction of the arbitral tribunal (Art.8 CIA) entails automatically the stay of the arbitral proceedings. The intercantonal Concordat on arbitration contains no such rule. While Art.8 Concordat obliges the arbitrators to render a decision on their own jurisdiction, it does not oblige them to do so in a separate award but leaves them the choice [...]. In view of this there is in principle no reason, save the question of efficiency, why they should not proceed on the merits despite the fact that an appeal is pending against the decision concerning their jurisdiction. This would also be the case if the appeal were suspending the enforcement of the decision on jurisdiction: although the decision on jurisdiction would be without effect, mis would not prevent the arbitrators from proceeding on the merits despite the appeal. This does not lead to unacceptable results because even if the arbitral tribunal rendered an award before the court had decided the appeal, the effects of the award could be set aside if the appeal were ;jf Lalive, Poudret and Reymond, p.359, para.17 ad PILS, Art.182: Levy and Schlaepfer, op. ciL, p.23: Schwab and Waiter, pp.150-151 Ch.16. para.47. 249 See Levy and Schlaepfer, op. ch., pp.24-25. w,Ch.8.1.2, paras 729 and 730; Ch.9.3, para.778. Paris, Rev. arb. 2001, p.606. Rul 9fVU ii 781 f % 9 The Arbitral Procedure The Conduct of the Arbitral Procedure allowed. Thus, the decision whether or not to stay the arbitral proceedings is reserved to the arbitrators and depends on considerations of procedural economy and usefulness".251 This case, decided unter the Concordat, is still a valid precedent. Similarly, under the majority of laws challenge proceedings against an arbitrator do not entail the automatic stay of the arbitral proceedings.252 Thus, Art. 13(3) of the UNCITRAL Model Law provides that pending the outcome of the decision of the court on the challenge "the arbitral tribunal, including the challenged arbitrator, may continue the arbitral proceedings and make an award". This rule is not, however, followed in Belgium (CJB, Art.l691(l)) or in France in domestic arbitration.253 In the two latter cases, the challenge of an arbitrator before the courts stays the arbitration. In international arbitration, a stay is within the discretion of the arbitrators, and the court is not empowered to order such a stay.253" 583 The question of a stay also arises in the case of connected penal or civil proceedings. Belgian law seems to provide for an automatic stay of the arbitral proceedings without restriction in the case of connected penal proceedings in application of the rule "le criminel tient le civil en Vetat".2™ The Swiss Federal Tribunal has expressly rejected the application of this rule in international arbitration235 and held that the arbitrator only has "the discretion to stay the proceedings pending the outcome of the other proceedings with a view to resolving a preliminary issue". In France, automatic stay is only provided for in the event that the authenticity of notarised documents is disputed in domestic arbitration.256 Like in Switzerland, "/e criminel tient le civil en etat" does not apply in international arbitration.257 However, this principle applies in court proceedings relating to arbitration. In case of enforcement of an international award in France, the Paris Cour d'appel decided to stay the proceedings pending 251 ATF 109 la 81 c.2c. -"ZPO, § 1037(3); WBR, Arl.l03(l); Berger, pp.284-285; ATF 128 III 234 = ASA Bui. 2002, p.337, c.3 b bb; Bücher, p.67, para.Sl; Budin, op. cit., p.420; Jolidoii, p.2S8, para.35 ad Art.20 and pp.301-302, para.43 ad Art.21; Levy and Schlaepfer, op. cit., p.23. z" See NCPC, Art.346( 1) the applicability of which to arbitration seems to be generally recognised; Moreau, Rev. arb. 1978, p.326; Robert and Moreau, p. 121, para.145; see Gaiilard, ICCA Congress Series no.5, p. 139; contra, Denims, Rev. arb. 2005, p. 1042. TGI Paris, LV Finance Group v ICC. Rev. arb. 2005, p. 1037, with a note by Derains. TGI Paris, LV Finance Group v. ICC, Rev. arb. 2005, p. 1037, with a note by Derains. -5J Huys and Keulgen, p.258, paras 378-379; see similarly CJB. Arl. 1696(4) and (6) concerning ihe authenticity of a document. » ATF 119 II 386 - ASA Bui. 1994, p.248, c.l b and c. -S,'NCPC, An.313, applicable by virtue of the reference in NCPC, Arl.1467(2). -s; Paris, Rev. arb. 200S, p.237 and p.584 (fourth case); Paris, Rev. arb. 2002, p.792 and p.971: Art.4(2) of the Code of Penal Procedure does not apply before the arbitral tribunal, but the latter can order a stay of the proceedings for reasons of efficiency; IDI2002, p. 1071: same solution; Fouchard, Gaiilard and Goldman, para.1660; Levy and Schlaepfer, op. cit, pp.20-21; Poncet and Macatuso, op. the outcome of the criminal investigation in France with regard to facts having an impact on the decision of the arbitrators.258 In other cases, the Paris Court of Appeal and the Cour de cassation confirmed that the principle "/