Arbitration

Arbitration Standard

In arbitration, like other dispute resolution processes, there may be occasions when certain claims, defenses or other issues can and should be discarded from the more meritorious claims so that the disputes may be resolved more efficiently. How and when arbitrators and counsel may determine this separation is addressed in these Guidelines, which are designed to strike a balance between, eliminating early on claims that do not justify full-blown hearings and, on the other hand, not providing encouragement to non-meritorious applications for early disposition.

These Guidelines address the circumstances under which it may be appropriate for an arbitral tribunal to undertake early disposition of one or more issues. The Guidelines are intended to provide guidance to the tribunal unless the rules selected by the parties expressly prohibit summary dispositions – which will seldom be the case.

Arbitrator Initiatives

Arbitral tribunals should take an active role in promoting early identification and disposition of issues. Early in arbitration proceeding, and thereafter, the tribunal should consider inquiring of the parties as to issues that might be appropriate for early disposition.

In thinking whether and how to participate in early disposition of issues, the tribunal should give appropriate deference to the probability that parties and their counsel will have a comprehensive understanding than they of the legitimate and factual matters at issue and of the commercial, political and other ramifications of the arbitration. The tribunal should also respect the parties’ choices regarding early disposition, as may be reflected in their selection of institutional rules, the ad hoc procedures they adopt, and the joint positions they take in the arbitration proceedings.

Regardless, the tribunal should consider, in the manner described herein, the practicality and reasonableness of entertaining applications for the early disposition of issues if at least one party requests it.

The tribunal should also consider setting out guidelines in its first scheduling order for dealing with early disposition of issues, taking into account the principles and modes of application set out below.

Principles Underlying Early Disposition

When a requesting party can exhibit that early disposition of any factual or legal issue may be cultivated productivity and fairly, or when all parties agree that early disposition of a particular issue would be alluring, the tribunal should ordinarily take steps to initiate early disposition strategies.

A variety of issues may be appropriate for early disposition. In each case, parties and the tribunal should weigh the difficulty and cost of establishing the issue in question (including the amount of evidence and argument expected to be needed for an early decision to be reached), and the effect that early disposition of the issue can be expected to have on proceedings that will follow. Issues for which early disposition may be appropriate include, but are not limited to, the following:

a. Jurisdiction and standing

Early disposition is generally appropriate where the tribunal must address such matters as the scope of their authority.

b. Claims or legal theories of recovery

Early disposition may be appropriate for claims or theories of recovery:

  1. That can be accepted or rejected as a matter of law, without the need for an evidentiary hearing.
  2. That may be barred by defenses, such as contractual covenants, limitation periods, statutes of fraud, release, settlements, res judicata, or collateral estoppels.

Where the claimant cannot demonstrate that he will be able to provide evidence to satisfy a required element of the claim or theory of recovery. Where the claimant cannot demonstrate that it will be able to provide evidence to satisfy a required element of the claim or theory of recovery.

c. Defenses

As with early disposition of claims, it may be possible to resolve certain defenses because: the defense fails as a matter of law, the party asserting the defense will not be able to establish one or more required elements of the defense, or the party is barred from asserting the defense.

d. Damages

In some cases, issues relating to damages may be appropriate for early disposition. For example, early disposition of issues that significantly limit damages may help to resolve related merits issues or facilitate settlement.

It is important to bear in mind that even if early disposition of an issue may be accomplished quickly and fairly, it nevertheless may not be appropriate if it is not likely, if granted, to result in a material reduction of the total time and cost in reaching final resolution of the case.

Modes of Application
  • Discussions during early scheduling or other conferences.

    Initial conferences provide an opportunity for the tribunal and parties to focus their attention on the key elements at issue and to discuss ways of resolving them at an early stage of the proceeding. The tribunal should consider instructing the parties to come to such conferences prepared to discuss issues which might be appropriate for early disposition.

  • Discussions among parties

    Should a party propose early disposition, the tribunal should require the proponent to confer with the other parties on whether agreement can be reached on the steps to be taken to present the issue for determination. Matters dealt with in such an agreement might include a limited exchange of documentary and other information and focused briefing. The tribunal, in considering whether and how to conduct early disposition proceedings, should defer to such party agreements.

    Scheduling Order- Should it be determined, as a result of these discussions, that early disposition is appropriate, a procedural order should be issued implementing the parties’ agreement, providing, where necessary, for the exchange of information and presentation of evidence and supporting arguments. The scheduling order should also provide for the disposition of issues not subject to early disposition or that will have to be dealt with if early disposition should not be awarded.

  • Preliminary applications

    Unless the parties have agreed to a process for early disposition, the tribunal should generally require that a party requesting early disposition submit a letter or other written preliminary application, subject to recognized page limits, briefly explaining why the matter in question should be resolved before other issues in the case.

    The application should set forth: (1) the issue(s) to be resolved; (2) how disposition of the issue(s) will advance efficient resolution of the overall dispute; and (3) the applicant’s proposal as to the procedure by which the issue(s) would be resolved. Such preliminary applications may be made before or after the parties have engaged in an exchange of documents or afforded other disclosure. Unless the tribunal concludes that the preliminary application fails to state a sufficient basis for the relief requested, they should afford an opportunity to the other parties to respond in writing to the application.

  • Prompt review of applications

    The tribunal should review promptly the preliminary application and any responses and determine whether there is a reasonable prospect that hearing the application may result in increased efficiency in resolving the overall dispute. If the tribunal concludes that early disposition of the issue is appropriate, it should instruct the parties on the procedure to be followed thereafter.

  • Deciding early disposition issues

    Many applications for early disposition may be resolved on the basis of written submissions. In appropriate cases, witness testimony by affidavit or otherwise in written form may be considered, or limited hearings may be held. The procedures adopted should assure a reasonable opportunity to a party opposing the motion to make factual and other presentations in opposition.

  • Consideration of issues under bifurcated hearing schedule

    Where proceedings are bifurcated, such as between liability and damages, early disposition may still be appropriate to reduce issues in each of the separated proceedings.

  • Decision on early disposition proceedings

    The tribunal’s decision on early disposition may be to grant or deny (in whole or in part) the relief requested, or to defer decision on the issue until the arbitration proceeding has been completed. If the tribunal grants an application for early disposition, it should give consideration to whether its decision should take the form of a procedural order, interim award, or partial final award. The tribunal should limit further proceedings in accordance with its decision.

Allocation of Costs

To the extent not barred by the parties’ agreement or applicable institutional rules, the tribunal may, if it has the authority to do so, treat its award of costs (including, where permitted, attorneys’ fees) attributable to early disposition separately from any award of costs relating to other elements of the arbitration proceeding.

In order to discourage premature or meritless requests for early disposition, or requests made for tactical advantage or delay, the tribunal may assess against the unsuccessful applicant the costs and fees attributable to early disposition proceedings, and in its decision should give its reasons for allowing or denying assessment of costs and/or fees with respect to the application for early disposition. The tribunal may require, as a condition of its considering a party’s request for early disposition, that the applicant acknowledge that the tribunal may impose fees and costs attributable to unsuccessful requests against the applicant.

The consent of all parties to early disposition of an issue may make a separate award of costs and fees inappropriate. Separate awards of costs and fees may be inappropriate when early disposition submissions, whether successful or not, substantially reduce the need for additional briefs or other submissions.

Arbitration historically has a standing of giving an efficient, rapid and economical process for the resolution of business disputes. lately, there has been a perception, often expressed in writings and conferences, that arbitration has lost some its appeal to businesses since it has gotten extremely formalistic or procedural, excessively moderate and excessively costly. Regardless of whether a view of a by-gone golden age of arbitration is correct, there is nonetheless a need to address ways in which arbitration proceedings can be dealt with so as to increase pace, efficiency and economy without a sacrifice in procedural fairness.

Major responsibility for any improvements lies with the arbitrators, who have the authority, granted to them by the parties, to organize the proceedings before them and to run them.

These Guidelines have as their governing principle the achievement by the arbitrators of a fair award, arrived at efficiently. Thus, the Guidelines urge arbitrators to conduct proceedings in a way that is mindful of what and how the parties will have to present to them that will enable them to deliver a prompt award that takes fully into account the parties’ presentations.

The Guidelines are the result of discussions and comments on drafts prepared by the Chairman and represent what all of us who have been involved hope will be regarded as a useful product.

Arrangement between the Tribunal and parties for facilitating preparation of the award

In order to assure that the tribunal is in a position to issue an award expeditiously, the tribunal should give consideration to the following measures.

Early in the proceedings, the tribunal should discuss with the parties the denomination and organization of the exhibits, with the intent of making them as accessible as possible and avoiding duplication. Consideration should be given to having all exhibits be made part of a single body of “key exhibits” or a “core bundle”. The parties should be requested, early in the proceedings, to list the exhibits in a table of contents containing a clear identification of each exhibit, including date, originator and recipient.

The tribunal may wish to place time limits on when exhibits may be presented to the tribunal (specifying whether the exhibits are to include those to be used for cross-examination and/or rebuttal) and to arrange for such exhibits to be made part of the record in advance of hearings so that discussions of admissibility at the hearings may be avoided.

In all cases, the arbitrators will be aided in their analysis if the parties are required to include in their briefs detailed citations to the record (exhibits, legal authorities, witness statements, expert reports and transcripts in the event of post-hearing briefs).

The tribunal ought to hold a status conference with the parties shortly before merits hearings are held, or earlier as suitable, at which there may be discussion of such matters as the witnesses, including experts, who will be called, the order in which they will be called, the amounts of time needed for their examination and cross-examination, any witness conferencing (see below) that may be done, the extent to which there will be opening statements or briefs, whether and/or how audio-visual aids will be employed, whether there are to be post-hearing briefs and/or oral arguments before or in place of post-hearing briefs and other pertinent matters.

Presentations by Experts

In spite of the fact that introductions of master proof are oftentimes a significant piece of arbitral procedures, they can likewise have restricted worth, raising expenses and sitting around. The mediators should play a functioning part in guaranteeing that the master proof they get is valuable and that it comes from people with authentic mastery. Along these lines, the referees should, ideally at the principal planning gathering, inspire from the gatherings the degree to which they will depend on master introductions. The court ought to consider necessitating that the gatherings submit, as of now, brief memoranda illustrating the idea of the master proof they wish to introduce and the importance of that proof to the issues for the situation. The judges ought to examine with the gatherings whether there is a requirement for master introductions as to specific issues, or whether the referees will have the option to administer on those issues without master help and with the guide of the gatherings' insight.

The arbitrators should require that expert evidence be presented in written reports earlier rather than later in the proceedings. In order to facilitate the creation of a clear record and to be fair to both parties, the tribunal should set deadlines for the submission of the written reports prior to the hearing in which the experts will testify. The reports should be complete and include sources of data, calculations and all recent developments, so that there will be no (or limited) need for oral corrections or supplements to the reports at the hearing.

The arbitrators should emphasize to the parties that, in order to be of use to the tribunal in preparing its award, the expert reports should be clearly written, without the use of unreasonable terminology and with clearly articulated assumptions, and should, where necessary, include analysis that allows the arbitrators, with respect to damages and other quantitative evidence, to understand the impact of changes in assumptions and to make adjustments they consider vital.

Customarily, master declaration should be introduced by an individual who assumed a considerable function in the arrangement of the reports and the personality of the individual who will affirm on the side of the report should be unveiled ahead of time of the consultation. The referees ought to consider the utilization of strategies that will empower them to survey master proof all the more effectively. Such methods incorporate having specialists give together separated from the court and counsel and from there on investigating their territories of understanding and difference, and having specialists on a similar subject present oral declaration together for addressing by the council and the gatherings ("witness conferencing" or ("hot-tubbing"). By and large, the council ought to underline to the gatherings that it wishes the proof of the specialists not to be an augmentation of the promoters' briefs but instead to be introduced so as to be of most extreme incentive to the court in surveying the issues and setting up its honor.

The mediators ought to consider, as ahead of schedule as conceivable in the procedures, regardless of whether they accept that they may require their own master to help them in their examination of the issues that are the subject of skill. Since the work of a court master involves impressive cost and adds to the multifaceted nature of the procedures, the council ought to consider cautiously whether it will have the option to deliver its honor without such help.

Should the arbitrators wish to retain their own expert, they ought to make clear arrangements, agreed on by the parties, as to how the tribunal expert is to be compensated, including whether he or she is to be the only expert in the case on the subject or in addition to party-selected experts. The arrangements for the tribunal expert should afford the parties an opportunity to provide information to, or question, the tribunal expert. The tribunal expert should not be involved in the tribunal’s deliberations or its drafting of the award.

Hearing and Post-hearing Measures

Preceding the meeting, the judges should survey the record and talk with each other on such issues as the issues to be chosen, real focuses that require explanation and legitimate issues that should be clarified. In leading the hearings, the court should offer thought to how the record being caused will to encourage it in delivering its honor effectively. In this way, as the hearings continue, the council ought not stop for a second to give direction to the gatherings in their introduction of observers to try not to get excess or in any case superfluous proof. In hearing observers, referees should take care to guarantee that the record being made is understood, with, for instance, shows being explicitly distinguished as they are talked about and indistinct inquiries and answers being explained on the spot.

In its thoughts, the court should take care that all mediators are remembered for conversations of issues to be chosen. Every authority should make oneself completely acquainted with the record and not agent dynamic to secretaries, assistants or different people not individuals from the Tribunal.

The tribunal may, in appropriate cases of generous records, request that the parties submit proposed findings of fact, including calculations of damages. Prior to drafting their award, in cases where many exhibits have been submitted on which the parties do not appear to rely, the tribunal may wish to request that the parties identify the exhibits in the record on which they rely, with the understanding that the arbitrators will consider only those exhibits. In this way, the arbitrators will be able to deal more efficiently with the record and can provide assurance to all concerned that the tribunal will, at the conclusion of the proceeding, have referred to it all of the evidence that the parties deem pertinent for determination of the issues. The tribunal may also find it useful to ask the parties to provide proposed decretal language to assure that there is clarity as to the relief sought and that all issues are dealt with. Should the tribunal find itself considering a factual, legal or damages theory not explicitly advanced by the parties that is material to their award, it should communicate with the parties to request their views and positions on the theory.

Meetings of the Arbitrator

The arbitrators should consider themselves free to discuss among them, in the course of the proceedings, any issues in the case. They should consider the advisability of meeting, even if briefly, at the end of each hearing day, to exchange views on the case. At the end of the hearings or post-hearing arguments, when they are last physically together, the arbitrators should try to meet then to discuss how the issues should be decided, responsibilities for drafting the award and the scheduling of any further conferences and exchanges of drafts.

Introduction

This Practice Note shall govern the appointment of arbitrators and the financial management of arbitration in all cases administered by the JUPITICE. Arbitration shall be administered by JUPITICE in accordance with this Practice Note where:

  1. it is governed by the arbitration rules of the JUPITICE; or
  2. The parties have agreed that the case be administered by the JUPITICE.
Administration by the JUPITICE includes:
  1. Appointment of arbitrators;
  2. Financial management of the arbitration;
  3. Case management, which includes liaising with arbitrators, parties and their authorized representatives on proper delivery of notices, monitoring schedules and time lines for submissions, arranging hearing facilities and all other matters which facilitate the smooth conduct of the arbitration;
  4. Where applicable, exercising such supervisory functions entrusted by the arbitration rules; and
  5. Scrutiny and issuance of awards made by the Tribunal.
Appointment of Arbitrators
  • Sole Arbitrator

    If the parties have agreed that a sole arbitrator is to be appointed and if within 30 days after receipt by all other parties of a proposal for the appointment of a sole arbitrator the parties have not reached agreement thereon, a sole arbitrator shall, at the request of a party, be appointed by JUPITICE Administrator as appointing authority.

    JUPITICE Administrator as appointing authority shall appoint the sole arbitrator as promptly as possible. In making the appointment, the appointing authority shall use the following list-procedure, unless the parties agree that the list-procedure should not be used or unless the appointing authority determines in its discretion that the use of the list-procedure is not appropriate for the case:

    1. The appointing authority shall communicate to each of the parties an identical list containing at least three names;
    2. Within 15 days after the receipt of this list, each party may return the list to the appointing authority after having deleted the name or names to which it objects and numbered the remaining names on the list in the order of its preference;
    3. After the expiration of the above period of time the appointing authority shall appoint the sole arbitrator from among the names approved on the lists returned to it and in accordance with the order of preference indicated by the parties;
    4. If for any reason the appointment cannot be made according to this procedure, the appointing authority may exercise its discretion in appointing the sole arbitrator.
  • Three Arbitrators

    If three arbitrators are to be appointed, each party shall appoint one arbitrator subject to Article 14 of JUPITICE RULES. The two arbitrators thus appointed shall choose the third arbitrator who will act as the presiding arbitrator of the arbitral tribunal.

    If within 30 days after the receipt of a party’s notification of the appointment of an arbitrator the other party has not notified JUPITICE Administrator of the arbitrator it has appointed, the first party may request JUPITICE Administrator as appointing authority to appoint the second arbitrator.

    If within 30 days after the appointment of the second arbitrator the two arbitrators have not agreed on the choice of the presiding arbitrator, the presiding arbitrator shall be appointed by JUPITICE Administrator as appointing authority in the same way as a sole arbitrator would be appointed under article 8.

Conflict of Interest

Any potential candidate for appointment must make a full declaration of independence and impartiality, and disclose to the parties and to the JUPITICE Administrator any fact, circumstance, or relationship which could give rise to justifiable doubts about his or her independence and impartiality.

JUPITICE financial management

The financial management of the arbitration includes:

  1. fixing of Tribunal’s fees and other terms of appointment;
  2. regular rendering of accounts;
  3. collecting deposits towards the costs of the arbitration; and
  4. Processing the Tribunal’s fees and expenses.

Tribunal Not to Make Directions Concerning Fees and Deposits

The Tribunal shall not at any time issue directions concerning its own fees and expenses, and deposits thereof. Any administrative matter concerning the costs or expenses in the arbitration shall be dealt with by the JUPITICE Administrator.

Tribunal Expenses

JUPITICE Administrator shall reimburse the arbitral tribunal for its reasonable expenses subject to the review and approval. The expenses of the arbitral tribunal shall not be included in the arbitral tribunal's fees charged by reference to hourly rates.

Tribunal’s Fees

An arbitrator shall be remunerated at an hourly rate for all work reasonably carried out in connection with the arbitration. Subject to paragraphs 8.3 to 8.5 of this Schedule, The rate referred to in paragraph 8.1 is to be agreed in accordance with Article 50.2 of the Rules. An arbitrator shall agree upon fee rates in accordance with paragraph 8 of this Schedule prior to his or her confirmation or appointment by JUPITICE Administrator.

An arbitrator's agreed hourly rate shall not exceed a rate set by JUPITICE Administrator, as stated on JUPITICE Administrator's website on the date the Notice of Arbitration is submitted. Subject to Paragraph 8.3, An arbitrator may review and increase his or her agreed hourly rate by no more than 10% on each anniversary of his or her confirmation or appointment. Higher rates may be charged if expressly agreed by all parties to the arbitration or if JUPITICE Administrator so determines in exceptional circumstances. If an arbitrator is required to travel for the purposes of fulfilling obligations as an arbitrator, the arbitrator shall be entitled to charge and to be reimbursed for:

  1. Time spent travelling but not working at a rate of 50% of the agreed hourly rate; or
  2. Time spent working whilst travelling at the full agreed hourly rate.
Legal Liability for Costs of the Arbitration

The parties are jointly and severally liable for the costs of the arbitration. JUPITICE acts as an agent of the Tribunal in collecting these advances and deposits, but is not legally liable to the Tribunal or the parties except to account for the advances and deposits so collected.

The Award
  • Time Limit for the Final Award

    The time limit within which the arbitral tribunal must render its final award is six months. Such time limit shall start to run from the date of the last signature by the arbitral tribunal or by the parties of the Terms of Reference or, in the case of application of Article 29.3, the date of the notification to the arbitral tribunal by JUPITICE Administrator of the approval of the Terms of Reference. JUPITICE Administrator may fix a different time limit based upon the procedural time table established pursuant to Article30.2. The JUPITICE Administrator may extend the time limit pursuant to a reasoned request from the arbitral tribunal or on its own initiative if it decides it is necessary to do so.

  • Decisions

    When there is more than one arbitrator, any award or other decision of the arbitral tribunal shall be made by a majority of the arbitrators. In the case of questions of procedure, when there is no majority or when the arbitral tribunal so authorizes, the presiding arbitrator may decide alone, subject to revision, if any, by the arbitral tribunal.

  • Form and Effect of the Award

    The arbitral tribunal may make separate awards on different issues at different times. All awards shall be made in writing and shall be final and binding on the parties. The parties shall carry out all awards without delay. By submitting the dispute to arbitration under the Rules, the parties undertake to carry out any award without delay and shall be deemed to have waived their right to any form of recourse insofar as such waiver can validly be made. The arbitral tribunal shall state the reasons upon which the award is based, unless the parties have agreed that no reasons are to be given. An award shall be signed by the arbitrators and it shall contain the date on which the award was made and indicate the place of arbitration. Where there is more than one arbitrator and any of them fails to sign, the award shall state the reason for the absence of the signature.

    The requirement in above mentioned paragraph for:
    1. The award to be in writing shall be met where the information contained in the award is accessible so as to be usable for subsequent reference; and
    2. The award to be signed shall be met where data is used to identify the neutral and to indicate his or her approval of the information contained in the award.

    The arbitral tribunal shall be recorded on the JUPITICE Justice Platform or shall communicate to JUPITICE Administrator subject to Article 3 for notification to the parties and, subject to any lien, communicate it to the parties. An award may be made public with the consent of all parties or where and to the extent disclosure is required of a party by legal duty, to protect or pursue a legal right or in relation to legal proceedings before a court or other competent authority. The award shall be deemed to be made at the place of the arbitration and on the date stated therein.

The Protocol on Determination of Damages in Arbitration has as its purpose providing guidance to arbitrators, counsel and their clients concerning the efficient and fair development and presentation of damages evidence in arbitration proceedings. Too often damages are not dealt early enough in arbitral proceedings, with the presentation of damages evidence left until near the end of the case. In such situations, the damages evidence that is presented may be based on theories that have not been previously articulated by the parties presenting them. Moreover, the presentation of damages evidence has frequently been left to accounting, financial and econometric experts whose presentations often fail to communicate with clarity to the arbitrators.

The determination of damages is important and should be done with considerable care by arbitrators. Therefore, arbitrators should, in their award of damages, apply a consistently reasoned approach and procedures that are fair, efficient and not overly costly.

Damages Evidence

Some kinds of damages are relatively easy for arbitrators to assess. For example, if a contractor fails to complete a job at a fixed price and a replacement contractor is hired to complete the work, the difference between the cost of the second contractor – assuming the charges are reasonable – and the price agreed on by the first contractor constitutes the damages, together with the incidental costs of finding and hiring the second contractor. As another example, if the dispute between the parties is whether certain new products sold by the respondent are within or outside the terms of a license agreement between them, there may be a contractually specified formula for determining the royalties owed once coverage determinations are made.

On the other hand, some breaches of contractual commitments give rise to greater uncertainty as to the appropriate level of damages. A claimant may seek damages based on what would have happened in a hypothetical world in which the breach or wrongful activity did not occur. For example, contracts for the acquisition of a business often produce claims by the buyer based on breaches of warranties, or even fraudulent inducement, in which damages are sought for the difference between what was expected in terms of future earnings and what was obtained. Similarly, acquisition agreements with earn-out provisions often generate claims by the seller that the buyer failed to operate the business in the contractually specified manner during the earn-out period, giving rise to asserted damages for the difference between what was actually earned and what should have been earned. Claims can also arise where capital goods, process controls or business methods fail to perform as advertised.

In such cases, the arbitrators are requested to make determinations of what might, or should, have happened but did not. Determining damages in these cases involves at least two important considerations: the assumptions that are to be made as to what might have happened and the models that are to be used that will lead to the assessment of the appropriate level of damages.

Measures Arbitrators may take

There are various steps that arbitrators may take to make their and the parties’ task of dealing with damages less complex, time-consuming and expensive. These include the following:

  • Early Identification of Damages Issues

    One of the most important and effective steps arbitrators can take is to address damages issues early in the tribunal’s administration of the case, ordinarily in the initial scheduling conference among the arbitrators, counsel and possibly also the parties themselves.

  • Expert Reports

    Arbitrators should encourage experts to summarize their calculations in easy-to-understand exhibits, rather than causing the arbitrators to deduce them from the narrative portion of the expert report.
    Assumptions made by experts should be separately identified and disclosed, to allow quicker and easier comparison of positions taken by opposing experts. A sensitivity analysis should be included with each expert’s report to demonstrate the impact of variations in key assumptions (this could also be performed by a tribunal-appointed expert). The inclusion of such components in reports affords a logical structure for exchanges made in an expert witness conference and may, in any event, be used by the arbitrators to help them decide the value of damages based on their determinations of the points of law or facts in dispute.

  • Expert Witness Conference

    The tribunal should consider, after obtaining the kind of information described above from the opposing experts, commanding them to confer, outside the presence of the parties’ counsel and the arbitrators, with the object of eliminating the areas of disagreements between them.

  • Testimony of Experts on Damages

    Regardless of the damages issues are narrowed and defined by any of the measures described above, the arbitrators must take steps for presentations by damages experts that enable the parties fully to explore the bases for the opinions expressed. Ample time should be afforded in hearings for the cross-examination of expert witnesses, and the arbitrators should allow themselves sufficient time to conduct their own examinations of the experts, with or without the assistance of a tribunal expert (as referred to below). The tribunal may also wish to arrange for the testimony of all damages experts at or around the same time so that their positions can be more readily compared. The tribunal may, in this context, wish to bring the expert witnesses together before them in a procedure sometimes known as “witness conferencing,” for the purpose of permitting the arbitrators to obtain an understanding of the areas of agreement or disagreement between the experts.

  • Tribunal Damages Expert

    The tribunal should consider with the parties the advisability of retaining its own damages expert in place of, or as a supplement to, the experts presented by the parties. Should it determine to appoint its own expert, the tribunal should consider such matters as the extent of the participation of the tribunal expert in the hearings, the form of the assistance to the tribunal by its expert, the opportunities to be afforded to the parties to provide information to and examine the tribunal’s expert and how the cost of such an expert will be borne.

  • The Damages Award

    The objective of the arbitrators should be to include in their award a careful analysis of how the quantum of damages awarded was determined. Arbitrators should make determinations of damages on a fair and reasoned basis and avoid providing support for the criticism, often expressed, that they reached a compromise result based on considerations other than the merits. The tribunal should be careful in its award to explain the extent to which it has accepted or rejected theories and other damage presentations by the parties. It should not base its award on damage theories that were not the subject of prior discussion with, or exposure to, the parties.

Non-Merit damages
  • Costs

    The same care and attention should be paid by the arbitrators to all elements of damages, not only those relating to compensation for breaches of contract or other forms of legal liability, but also claims for assessments of legal fees, consultants’ fees, and the determination of interest, including amounts and the extent of compounding. In certain cases, these kinds of damages can constitute the bulk of the total damages awarded. The tribunal should also give careful consideration as to whether and to what extent it has the authority to award or otherwise apportion various costs and expenses among the parties.

  • Interest

    Where much time has passed since the occurrence of the events that gave rise to liability, or at times of high interest rates, pre-award interest may comprise a significant portion of the total relief granted. To the extent feasible, interest awarded should arise out of the parties’ contractual relationship. Thus, contractual interest rates could be an appropriate measure of applicable interest – although caution should be exercised with respect to the application of default or penalty interest rates.

    Arbitrators should take the necessary steps, as early in the proceedings as may be practicable, to have the parties address and make known the theoretical bases on which damages will be presented and opposed. Arbitrators should deal with damages issues in a focused and disciplined way that enables them to obtain a clear understanding of both the theoretical and factual support for all the elements of damages. In doing so, they should assure that the parties’ damages presentations, especially those of the parties’ experts, communicate damages evidence in a clear, understandable and comprehensive manner.

Scope
  • This Practice Note shall govern a challenge to an arbitrator (the “Challenged Arbitrator”) under any of the following arbitrations
  • arbitrations administered by JUPITICE under the JUPITICE Administered Arbitration Rules; arbitrations administered by JUPITICE under the UNCITRAL Arbitration Rules;
  • arbitrations under any other rules issued by JUPITICE which designate JUPITICE to decide challenges to arbitrators; and
  • Any other arbitration in which the parties agree to apply this Practice Note.

This Practice Note shall also govern a challenge to an emergency arbitrator appointed by JUPITICE in accordance with the Jupitice Administered Online Arbitration Rules. In the event of any discrepancy or inconsistency between this Practice Note and any provision of (a) the arbitration agreement or (b) any applicable arbitration rules or law, that provision shall prevail. An arbitrator may be challenged on any grounds specified in the applicable arbitration rules or law.

Procedure for Filing a Challenge

Any arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence. A party may challenge the arbitrator appointed by it only for reasons of which it becomes aware after the appointment has been made. In the event that an arbitrator fails to act or in the event of the de jure or de facto impossibility of his or her performing his or her functions, the procedure in respect of the challenge of an arbitrator as provided in article19 shall apply.

On the other hand, some breaches of contractual commitments give rise to greater uncertainty as to the appropriate level of damages. A claimant may seek damages based on what would have happened in a hypothetical world in which the breach or wrongful activity did not occur. For example, contracts for the acquisition of a business often produce claims by the buyer based on breaches of warranties, or even fraudulent inducement, in which damages are sought for the difference between what was expected in terms of future earnings and what was obtained. Similarly, acquisition agreements with earn-out provisions often generate claims by the seller that the buyer failed to operate the business in the contractually specified manner during the earn-out period, giving rise to asserted damages for the difference between what was actually earned and what should have been earned. Claims can also arise where capital goods, process controls or business methods fail to perform as advertised.

In such cases, the arbitrators are requested to make determinations of what might, or should, have happened but did not. Determining damages in these cases involves at least two important considerations: the assumptions that are to be made as to what might have happened and the models that are to be used that will lead to the assessment of the appropriate level of damages.

Determination of the Challenge
  • A party that intends to challenge an arbitrator shall send notice of its challenge within 15 days after it has been notified of the appointment of the challenged arbitrator, or within 15 days after the circumstances mentioned in articles 17 and 18 of JUPITICE Rules became known to that party.
  • The notice of challenge shall be communicated to JUPITICE Administrator subject to Article 3 of JUPITICE Rules for notification to all the parties, to the Arbitrator who is challenged and to the other arbitrators. The notice of challenge shall state the reasons for the challenge.
  • When a party has challenged an arbitrator, all parties may agree to the challenge. The arbitrator may also, after the challenge, withdraw from his or her office. In neither case does this imply acceptance of the validity of the grounds for the challenge.
  • If, within 15 days from the date of the notice of challenge, all parties do not agree to the challenge or the challenged arbitrator does not withdraw, the party making the challenge may elect to pursue it. In that case, within 30 days from the date of the notice of challenge, it shall seek a decision on the challenge by JUPITICE Administrator as appointing authority.
Introduction

These Procedures have been adopted by the JUPITICE for use by parties who seek the benefits of an administered arbitration while maintaining the flexibility afforded by the 1976 or 2010 version of the UNCITRAL Arbitration Rules (with or without paragraph 4 of Article 1 as introduced in 2013) (the “UNCITRAL Rules”). These Procedures may be adopted in an arbitration agreement entered into at any time before or after a dispute has arisen, which provides that any dispute between the parties shall be referred to arbitration administered by JUPITICE under the UNCITRAL Rules, or words to similar effect.

Nothing in these Procedures shall prevent the parties to a dispute under the UNCITRAL Rules from naming JUPITICE as the appointing authority, or from requesting certain administrative services from JUPITICE without subjecting the arbitration to the provisions contained in these Procedures.

Neither the designation of JUPITICE as the appointing authority under the UNCITRAL Rules nor a request by the parties or the arbitral tribunal for specific and discrete administrative assistance from JUPITICE shall be construed as a designation of JUPITICE as administrator of the arbitration as described in these Procedures. Unless otherwise stated, a request for administration by JUPITICE of arbitration under the UNCITRAL Rules will be construed as a designation of JUPITICE as the appointing authority and administrator pursuant to these Procedures.

Appointment of Arbitration

Authorized person/ persons by JUPITICE will perform the functions of the appointing authority as set forth in the UNCITRAL Rules. The Authorized person/ persons will insofar as practicable follow the list procedure set out in Article 8 of the UNCITRAL Rules.

If the Authorized person/persons by JUPITICE consider the list procedure to be inappropriate in a case, he may make the appointment in accordance with the JUPITICE appointing procedure. In making such appointments, the Authorized person/persons may where appropriate consult other members of the JUPITICE.

In exceptional cases, such as where there are no suitable candidates on the JUPITICE panel of arbitrators, the Authorized person/ persons may appoint an arbitrator who is not on the JUPITICE panel of arbitrators.

Conflict of Interest

Any potential candidate for appointment must make a full declaration of independence and impartiality, and disclose to the parties and to the JUPITICE Administrator any fact, circumstance, or relationship which could give rise to justifiable doubts about his or her independence and impartiality.

Tribunal fees

The Tribunal’s fees shall be ascertained in accordance with the Schedule of Arbitrator’s Fees in force at the time the request for administration was made. These fees are payable following the final conclusion of the matter. Interim payments may be made at the discretion of the JUPITICE.

Fees of Arbitrators

For an arbitration conducted under these Procedures, arbitrators will be remunerated according to their hourly or daily rates for all work reasonably carried out in connection with the arbitration, unless the parties agree otherwise. Upon the parties’ request, JUPITICE will consult with the arbitral tribunal to establish the rates applicable to the arbitration.

Legal Liability

The parties are jointly and severally liable for the costs of the arbitration. JUPITICE acts as agent of the Tribunal in collecting these advances and deposits, but is not legally liable to the Tribunal or the parties except to account for the advances and deposits so collected. JUPITICE, including the JUPITICE CASE MANAGER, administrator, members of its platform, directors, officers, employees or agents, etc. shall not be liable for anything done or omitted to be done in connection with the administration of any arbitration conducted under the UNCITRAL Rules.

Interim payments to the Arbitrator

In appropriate circumstances and upon the request of the arbitrator, the JUPITICE /JUPITICE CASE MANAGER may allow interim payments to be made.In assessing interim payments, the JUPITICE /JUPITICE CASE MANAGER shall take into consideration the relevant stage of the arbitration and the work taken by the arbitrator to date. The following may be undertaken as a guide to determine the appropriate amounts of payment. The aggregate amount of interim payments shall not exceed 50% of the arbitrator’s fees ascertained in accordance with the applicable Schedule of Arbitrators’ Fees. Interim payments to the arbitrator may be made without reference to the parties. The parties will be informed of such payments through an updated statement of account.

Awards

Subject to any lien, originals of the award(s) signed by the arbitral tribunal and affixed with the seal of JUPITICE shall be communicated to the parties by the arbitral tribunal though JUPITICE platform.

Upon request by any party, JUPITICE will assist in the filing or registration of the arbitral award(s) in countries where such filing or registration is required by law. The cost of any such filing or registration shall not be included in JUPITICE’s Administrative Fees and shall be paid by the requesting party to JUPITICE.

Parties
  • Communication

    All communications in the course of Arbitration proceedings shall be communicated to JUPITICE Administrator via the JUPITICE Justice Platform. All the parties to dispute, Arbitral Tribunal and the JUPITICE Justice Platform shall have a designated “Electronic Address”. A communication shall be deemed to have been received when; following communication to JUPITICE Administrator in accordance with Article 3.1, of the Jupitice Administered Online Arbitration Rules. JUPITICE Administrator notifies the parties and Arbitral Tribunal of its availability, in accordance with Article 3.4.

    JUPITICE Administrator shall promptly notify a party and/ or the Arbitral Tribunal of the availability of any communication directed to that party and/ or the Arbitral Tribunal at the JUPITICE platform. JUPITICE Administrator shall promptly notify all parties and Arbitral Tribunal of the commencement and conclusion of Arbitration proceedings as the case may be.

  • Request of Arbitration

    The party or parties initiating recourse to arbitration (hereinafter called the “claimant”) shall communicate the Notice of Arbitration to JUPITICE Administrator subject to Article 3 of Jupitice Administered Online Arbitration Rules. JUPITICE Administrator shall promptly notify the respondent that the notice is available at the JUPITICE platform.
    Arbitration proceedings shall be deemed to commence when, following communication to JUPITICE Administrator of the notice pursuant to Article 4 of JUPITICE Rules, JUPITICE Administrator notifies the parties of the availability of the notice of arbitration at the JUPITICE platform.

    The notice of arbitration shall include the following:
    • A demand that the dispute be referred to arbitration;
    • The names and contact details of the parties;
    • Identification of the arbitration agreement that is invoked;
    • Identification of any contract or other legal instrument out of or in relation to which the dispute arises or, in the absence of such contract or instrument, a brief description of the relevant relationship;
    • Where claims are made under more than one Arbitration Agreement, an indication of the Arbitration Agreement under which each claim is made.
    • A brief description of the claim and an indication of the amount involved, if any;
    • The relief or remedy sought;
    • A proposal as to the number of arbitrators, language and place of arbitration (the applicable rules of law), if the parties have not previously agreed thereon.
    • The signature or other means of identification and authentication of the claimant and/or the claimant’s representative.
    The notice of arbitration may also include:
    • A Proposal for the designation of an appointing authority referred to in Article 13, paragraph 1 of JUPITICE rules;
    • A proposal for the appointment of a sole arbitrator referred to in Article15, paragraph 1 of JUPITICE Rules;
    • Notification of the appointment of an arbitrator referred to in Article16 or 17 of JUPITICE Rules.
  • The claimant may submit such other documents or information with the request as it considers appropriate or as may contribute to the efficient resolution of the dispute. The Notice of Arbitration shall be accompanied by payment to JUPITICE Administrator of the Registration Fee as required by Schedule 1. The Notice of Arbitration may include the Statement of Claim.

    If the Notice of Arbitration does not comply with these Rules or if the Registration Fee is not paid, JUPITICE Administrator may request the Claimant to remedy the defect within an appropriate time limit. If the Claimant complies with such directions within the applicable time limit, the arbitration shall be deemed to have commenced under Article 4.3 on the date the initial version was received by JUPITICE Administrator. If the Claimant fails to comply, the arbitration file shall be closed without prejudice to the Claimant's right to submit the same claim at a later date in a subsequent Notice of Arbitration.

    Where an amendment is made to the Notice of Arbitration prior to the constitution of the arbitral tribunal, JUPITICE Administrator has discretion to determine whether and to what extent such amendment affects other time limits under the Rules. The constitution of the arbitral tribunal shall not be hindered by any controversy with respect to the sufficiency of the notice of arbitration, which shall be finally resolved by the arbitral tribunal.

  • Joinder of Parties

    A party wishing to join an additional party to the arbitration shall submit its request for arbitration against the additional party (the “Request for Joinder”) to JUPITICE Administrator. The date on which the Request for Joinder is received by JUPITICE Administrator shall, for all purposes, be deemed to be the date of the commencement of arbitration against the additional party. Any such joinder shall be subject to the provisions of Articles 6.3 and 9 of JUPITICE Rules. No additional party may be joined after the confirmation or appointment of any arbitrator, unless all parties, including the additional party, otherwise agree. JUPITICE Administrator may fix a time limit for the submission of a Request for Joinder.

Arbitral Tribunal
  • Designating Appointing Authority

    Unless the parties have already agreed on the choice of an appointing authority at the time they conclude the Arbitration Agreement, a party may at any time during the arbitration proceedings propose the name or names of one or more institutions or persons, including JUPITICE Administrator, one of whom would serve as appointing authority.

    If all parties have not agreed on the choice of an appointing authority within 30 days after a proposal made in accordance with paragraph 1 has been received by all other parties, JUPITICE Administrator shall be designated as the appointing authority by default.

    In exercising their functions under these Rules, JUPITICE Administrator as the appointing authority may require from any party and the arbitrators the information they deem necessary and they shall give the parties and, where appropriate, the arbitrators, an opportunity to present their views in any manner they consider appropriate. All such communications to and from JUPITICE Administrator as appointing authority shall be provided by the sender to JUPITICE Administrator subject to Article 3 of JUPITICE Rules.

    When JUPITICE Administrator as appointing authority is requested to appoint an arbitrator pursuant to Articles 15 - 17, or Article 20, the party making the request shall send to the appointing authority copies of the notice of arbitration and, if it exists, any response to the notice of arbitration.

    JUPITICE Administrator as appointing authority in confirming or appointing arbitrators, shall consider the prospective arbitrator’s nationality, residence and other relationships with the countries of which the parties or the other arbitrators are nationals and the prospective arbitrator’s availability and ability to conduct the arbitration in accordance with the Rules.

    The sole arbitrator or the president of the arbitral tribunal shall be of a nationality other than those of the parties. However, in suitable circumstances and provided that none of the parties objects within the time limit fixed by JUPITICE Administrator, the sole arbitrator or the president of the arbitral tribunal may be chosen from a country of which any of the parties is a national.

  • Number of Arbitrators

    If the parties have not previously agreed on the number of arbitrators, and if within 30 days after the receipt by the respondent of the notice of arbitration the parties have not agreed upon the number of Arbitrators, JUPITICE Administrator shall appoint a sole arbitrator, save where it appears to the JUPITICE Administrator that the dispute is such as to warrant the appointment of three Arbitrators. In such case, the claimant shall nominate an Arbitrator within 15 days from the receipt of the notification of the decision of the JUPITICE Administrator, and the respondent shall nominate an Arbitrator within a period of 15 days from the receipt of the notification of the nomination made by the claimant. If a party fails to nominate an arbitrator, the appointment shall be made by JUPITICE Administrator at the request of a party.

  • Emergency Arbitrator

    A party that needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal (“Emergency Measures”) may make an application for such measures pursuant to the Emergency Arbitrator Rules in Appendix V. Any such application shall be accepted only if it is received by JUPITICE Administrator prior to the transmission of the file to the arbitral tribunal pursuant to Article 12.7 of JUPITICE Rules, and irrespective of whether the party making the application has already submitted its Request for Arbitration.

    The emergency arbitrator’s decision shall take the form of an order. The parties undertake to comply with any order made by the emergency arbitrator.The emergency arbitrator’s order shall not bind the arbitral tribunal with respect to any question, issue or dispute determined in the order. The arbitral tribunal may modify, terminate or annul the order or any modification thereto made by the emergency arbitrator.

    The arbitral tribunal shall decide upon any party’s requests or claims related to the emergency arbitrator proceedings, including the reallocation of the costs of such proceedings and any claims arising out of or in connection with the compliance or non- compliance with the order.

    Articles 53.1–53.4 and the Emergency Arbitrator Rules set forth in Appendix V (collectively the “Emergency Arbitrator Provisions”) of JUPITICE Rules shall apply only to parties that are either signatory of the arbitration agreement under the Rules that is relied upon for the application or successor or to such signatories. The Emergency Arbitrator Provisions shall not apply if:

    • the parties have agreed to opt out of the Emergency Arbitrator Provisions; or
    • the parties have agreed to another pre-arbitral procedure that provides for the granting of conservatory, interim or similar measures.

    The Emergency Arbitrator Provisions are not intended to prevent any party from seeking urgent interim or conservatory measures from a competent judicial authority at any time prior to making an application for such measures, and in appropriate circumstances even thereafter, pursuant to the Rules. Any application for such measures from a competent judicial authority shall not be deemed to be an infringement or a waiver of the arbitration agreement. Any such application and any measures taken by the judicial authority must be notified without delay to JUPITICE Administrator.

  • Closure of Hearings

    The arbitral tribunal may inquire of the parties if they have any further proof to offer or witnesses to be heard or submissions to make and, if there are none, it may declare the hearings closed. After the proceedings are closed, no further submissions or arguments may be made or evidence produced, w.r.t. the matters to be decided in the Award unless requested or authorized by the Arbitral Tribunal.

    The arbitral tribunal may, if it considers it necessary owing to exceptional circumstances, decide, on its own initiative or upon application of a party, to reopen the hearings at any time before the award is made.