International Arbitration 2019
Christian Klausegger, Peter Klein, Florian Kremslehner, Alexander Petsche, Nikolaus Pitkowitz, Irene Welser, Gerold Zeiler
Davor Babic´, Miklos Boronkay, Markus Burgstaller, Bernhard Campara-Kopeinig, Marion Carrega, Graham Coop, Felix Dasser, Andrea de la Brena Meléndez, Cédric de Pouzilhac, Sanja Djajic´, Jalal (Jil) El Ahdab, Florian Ettmayer,
Philip Exenberger, Cristina Ioana Florescu, Anna Förstel, Alice Fremuth-Wolf, Stefan Gerlach, Anna Grishchenkova, Lukas Hoder, Pascal Hollander, Eline Huisman, Emmanuel O. Igbokwe, Nadja Jaisli Kull, Neil Kaplan, Alexander Karl,
Michael Kern, Katherine Khan, Ioana Knoll-Tudor, Jovana Lakic, Jeffrey C.F. Li, Nigel N.T. Li, Carol Ludington, Sebastian Lukic, Miranda Mako, Irmgard Marboe, Alice Meissner, Winslow Mimnagh, Florian Neumayr, Haley Newhall,
Michael Nueber, Veit Öhlberger, Giulia Pavesi, Florian Pechhacker, Nina Pichler, Nikolaus Pitkowitz, Katharina Plavec, Anna Katharina Radschek, August Reinisch, Katharina Riedl, Peter Rižnik, Alison Ross, Andrea Roth, Mauro Rubino-Sammartano, Maxi Scherer, Markus Schifferl, Christoph Schreuer, Gunjan Sharma, Alfred Siwy, Maja Stanivukovic´, Sofiya Svinkovskaya, ConstanzaTrofaier, Elisabeth Vanas-Metzler, Gerhard Wegen, Irene Welser, Stephan Wilske, Johanna Wirth, Anna Wolf-Posch, Venus Valentina Wong, Bernhard Wychera, Gerold Zeiler, Nicolas Zenz
MANZ’sche Verlags- und Universitätsbuchhandlung
Verlag C.H. Beck, München
Stämpfli Verlag, Bern
The Arbitration Agreement and Arbitrability
Gerold Zeiler/Nicolas Zenz
Consumer Arbitration in Europe
Irene Welser/Anna Wolf-Posch
Private Enforcement of Cartel Infringements before Arbitral Tribunals
Michael Kern/Eline Huisman
Dispute Resolution in International and European Tax Law
Alice Meissner/Nina Pichler
The Impact of the One Belt, One Road Initiative on International Arbitration
The Arbitrator and the Arbitration Procedure
Innovating In Arbitration: Options for Greater Efficiency
Soft Law in International Commercial Arbitration – A Critical Approach
Arbitration Reform in Hungary
Carol Ludington/Haley Newhall
Experts: Early, Tailored and Effective
Prague Rules vs. IBA Rules: Taking Evidence in International Arbitration
Nationality vs. Internationality of Arbitral Proceedings
International Arbitration and the Infamous ‘Ethical No Man’s Land': A Status Report Inspired by Edward St Aubyn’s ‘Patrick Melrose Saga’
Document Production against the Background of Private Enforcement
Nadja Jaisli Kull/Andrea Roth
Challenging Arbitrators for Lack of Independence or Impartiality: Procedural Pitfalls from a Swiss Perspective
Emergency Arbitration: Evidence and Practice from
Seven Arbitral Institutions
The Award and the Courts
Felix Dasser/Emmanuel O. Igbokwe
Efficient Drafting of the Arbitral Award: Traditional Ways Revisited – Lesson Learned from the Past?
Florian Ettmayer/Katharina Riedl
Efficiency-based Cost Decisions
Cédric de Pouzilhac/Marion Carrega
Innovative Procedural Rules adopted for International Disputes before the Paris Commercial Court and the Paris Court Of Appeal
Jeffrey C.F. Li/Nigel N.T. Li
Paradigm of Reciprocity and Comity – Taiwanese Court’s Recognition and
Enforcement of Foreign Arbitral Awards
Veit Öhlberger/Alexander Karl
Enforcement of Foreign Arbitral Awards in Austria and the
Form Requirements under Article IV of the New York Convention
Markus Schifferl/Venus Valentina Wong
Decisions Of The Austrian Supreme Court On Arbitration
Bernhard Wychera/Winslow Mimnagh
The Nature of State Consent Expressed in BITs
Sanja Djajić/Maja Stanivukovic
The Local remedies rule in non-ICSID investment arbitration
Graham Coop/Gunjan Sharma
Procedural Innovations to ISDS in Recent Trade and Investment Treaties: A Comparison of the USMCA and CETA
Christoph Schreuer/Andrea de la Brena Meléndez
Does ISDS Need an Appeals Mechanism?
The Vienna Innovation Propositions
International Arbitration 3.0 – How Artificial Intelligence
Will Change Dispute Resolution
Nikolaus Pitkowitz/Alice Fremuth-Wolf/Anna Katharina Radschek and the 28 contributors
The Vienna Innovation Propositions: Venturing into New Fields and
New Ways of Arbitration – Revisiting Traditional Ways of Arbitration
Recent publications in arbitration
Mauro Rubino-Sammartano is a Docteur en droit, Chartered Arbitrator, Member of the Milan Bar and of the Paris Bar, Former Lecturer on Arbitration at the University of Padua and Visiting Professor at the University of Milan and is the President of the European Court of Arbitration.
Contact: LawFed BRSA,
Studio Legale e Tributario
Viale Cassiodoro 3, I-20145 Milano
T: +39 - 02 77 07 5500
F: +39 - 02 77 07 5577
E: email@example.com www.LawFed.com
Nationality v. Internationality of Arbitral Proceedings
I. Is a Distinction to be made between Domestic and Foreign Arbitrations?
For a long time the traditional view was that it was not necessary to distinguish between domestic and foreign arbitrators because they were all the result of a contract between the parties.
However, Chinese law has distinguished between domestic awards and domestic awards which involve a foreign element.
The term “foreign award” is used in international conventions.
The title of the Geneva Convention (1927)2) is the “Convention on the Enforcement of Foreign Arbitral Awards.” Similarly, the title of the New York Convention (1958)3) refers to the recognition and enforcement of “ foreign arbitral awards” (although the International Chamber of Commerce, Paris, had proposed to define them as international arbitral awards). Therefore, not only must a distinction be made between national (domestic) and foreign arbi tration, but some States regulate differently within the ambit of their own national law international and domestic arbitrations.
Domestic legislations such as the English Arbitration Acts of 1979 and of
1996 refer to domestic awards.
French law in turn treats as international domestic arbitral proceedings which involve international trade.
In the US, in Sea Tow Services,4) it was held that:
The law is clear that an agreement to arbitrate in a foreign country or to apply foreign law does not transform an otherwise domestic commercial relationship into one involving a foreign state.
1) Chartered Arbitrator, President of the European Court of Arbitration (Stras
2) Convention for the Execution of Foreign Arbitral Awards (Geneva, September
3) Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, June 10, 1958.
4) Jones v. Sea Tow Services, Inc., 30 F.3d 360, 366 (2d Cir. 1994).
It is suggested to bear in mind, in exploring the nationality issue, that it may be useful, in discussing it as to arbitration, to compare arbitral proceedings with Court proceedings.
II. The Criterion to be used to Establish Nationality
Different criteria are used to this effect in the various legal systems.
A. The Geographical Criterion
Several international conventions use the criteria of the place where the award is made.
Such is the case of the Geneva Convention (1927) and of the New York
Even the Geneva Convention (1961) had adopted this criterion, even if in a nonexclusive way.
A lively debate has followed the House of Lords decision in Hiscox,5)
in which it was held that since in arbitral proceedings, which were held in England, the award had been rendered in Paris, what had been expressly stated in it, the award was French.
In Bergesen6) it was held that
“Simply put it was not a foreign award as defined in Art. I (1) because it was not rendered outside the nation where the enforcement is sought.”
The difference between the place where the proceedings take place and the place where the award is made creates a first problem.
A second problem arises if proceedings take place in different countries, for example the first hearing is held in Cairo, the evidence is heard in Brussels and the final hearing in Norway. Where have these proceedings taken place?
A further difficulty which arises in this respect is that, until the location of the proceedings is selected, or in the alternative, if one looks at the place of the award, until the award is made, the nationality according to this geographical criterion would not be clear.
B. The Financial Criterion
If an arbitration in France involves international trade, this makes it a domestic arbitration, governed by special rules.7)
5) Hiscox v. Outhwaite, House of Lords, 24 July 1991, 3 WLR  397.
6) Bergesen v. Joseph Muller Corporation, 710 F2d 928, 932 (2d Cir. 1983).
Other jurisdictions may use this criterion to exclude such proceedings from their domestic arbitrations.
This criterion seems to be based on economic rather than on legal grounds.
C. The Procedural Criterion
Another criterion is based on the procedural law applicable to the proceedings.
In Bergesen,8) the Court of Appeals of the United States has held first that
“in both France and West Germany for example the nationality of an award was determined by the law governing the procedure”
continuing that the New York Convention, when referring to awards which are not considered domestic by a given legal system, refers to awards rendered in the framework of another State.
The Court of Appeal of Paris, in Gotaverken,9) has been more specific,
stating that an award rendered under a procedural law different from French law, and which had no connection with France, could not be treated as French.
This view is fortified by a comparison between arbitral proceedings and court proceedings. If one looks at the place where the award is made (for example in Spain) even if the substantial law is not Spanish; if the parties are not Spanish, the Court applies its procedural law and the judgment is Spanish.
Even if the judgment is signed by the judge outside Spain, for example during his vacations, it is the procedural law which determines its nationality and, since he has applied Spanish procedural law, it will remain a Spanish judgment.
Court proceedings in which the procedural law is not the one of the legal systems to which that Court belongs, cannot then be treated as domestic judgments.
It is suggested that the same should apply to arbitral proceedings.
If the parties elect that they be governed by a given procedural law, for example English law, they cannot be treated as Hungarian just because their venue is Budapest.
The German Supreme Court has held in Ghezzi v. Boss:10)
Pursuant to the constant case law of [our Court] a foreign award is made when the arbitral tribunal has based its decision on foreign procedural law.
8) Bergesen c. Joseph Muller Corporation, 710 F2d 928, 932 (2d Cir. 1983).
9) Götaverken Arendal AB v. Lybian General National Maritime Transport Co., Court of Appeal, Paris, February 21, 1980, Clunet 1980, 660.
10) Bundesgerichtshof June 30, 1961 (BGHZ 21, 365, Yearbook Commercial Arbi- tration XV 1990, 450)
The effects of procedural law must be neatly distinguished from the effects of the choice of the substantive law. Keeping in mind the parallel between Court proceedings and arbitration, which might be considered a sort of leit- motiv, a State Court which decides the merits of the disputes based on a foreign substantive law does not by that give origin to a foreign judgment. It is submitted that the same principle must be applied to arbitration.
Along this line, in De Agostini,11) the Court of Appeal of Milan has held
“In our opinion this is a foreign award, i.e. arbitration to be rendered [sic.]
abroad under a procedural law other than the Italian [procedural] law.”
Nationality is not a topic just for academic debate. It plays a decisive role as
to the challenge of the award.
However, if one applies for recognition and enforcement under the New
York Convention, the award must have been made in another country.
These two criteria must then coexist.
On the one hand if a legal system treats an award, under the procedural criterion, as not domestic, it will be available to recognize it and to order its enforcement, but not to challenge it.
On the other hand a legal system which treats an award rendered under its procedural law as domestic, will allow its Courts to challenge it, while it will not decide on its recognition under the New York Convention (1958) which requires for that that the award has been rendered in another State.
III. International Arbitration
The conclusions of these reflections might be that it is agreed that arbitral proceedings are to be divided between domestic and foreign.
This conclusion might be seen as exhausting the analysis.
The query then whether there is also an international arbitration might seem to have no reason to be raised.
International arbitration would in fact be a tertium genus, i.e. a third type of arbitration which would be neither domestic nor foreign.
It would then risk to be characterized as Fallowell did with Venise,12) as
“a crossroad of the world, therefore being international, i.e. from nowhere.” A definition of International Arbitration is given by Art 1(3) of the
UNCITRAL Model Law:
11) De Agostini et al v. Milloil et al, Court of Appeal, Milan, March 24, 1998, Yearbook Commercial Arbitration 2000, 738.
12) D. Fallowell, To Noto (London 1989).
An arbitration is international if:
(a) the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different states, or
(b) one of the following places is situated outside the state in which the parties have their places of business:
(i) the place of arbitration if determined in, or pursuant to, the arbitration agreement;
(ii) any place where a substantial part of the obligations of the commercial relationships is to be performed or the place with which the subject matter of the dispute is most closely connected, or
(c) the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.
IV. Monism or Dualism
A notion of international may be derived from the Dalico13) award
due to a substantive rule of international arbitration law, the arbitration agreement is independent from the contract, in which it is included directly or by reference, and its existence and effects depend, subject to mandatory provisions of French law, from the consent of the parties without need to refer to a state law.
One finds a reference to an “international arbitration” within several legal systems.
Those who believe that an international arbitration exists, accept this distinction from totally domestic awards in that jurisdiction and conclude that there is a dualism, each of the two arbitrations being treated by the law in some respects in a different way. This is the case of France, Belgium and Switzerland.
Other jurisdictions do not accept a similar distinction. Their position is referred to as a “monism”.
V. The Subjective Criterion
A frequent use of the term “international” arbitration is made by using the subjective criterion, i.e. referring to the different nationality, or domicile or “nerve center” of the parties, as held in Hertz.14)
This means that arbitral proceedings would become international, just because the nationality or domicile or nerve center of the parties is different, while remaining a subcategory of domestic arbitrations.
13) Dalico, Court of Cassation (France), 20 December 1993, Rev. arb. 1994, 663 note P. Mayer.
14) Hertz Corp. v. Friend, S Ct 175 L. Ed. 2d 1029, 2010 W.L.65601.
There could be an “international” aspect if the fact of the parties’ belonging to different states is considered, but there the proceedings have at the same time a national aspect related to the venue and to the applicable law. The parallel with court proceedings is decisive here. The nationality of the parties does not influence the nationality of the proceedings. Court proceedings assume the nationality of the Court which tries the case, while the nationality of the parties is totally irrelevant. The same conclusion should be drawn for arbitral pro ceedings, and therefore the subjective criterion would not have sufficient weight to promote international arbitration as a tertium genus.
VI. When the Object of the Proceedings Involves
The commercial criterion, which has been referred to earlier, when applied to domestic proceedings, in certain jurisdictions like France makes it become a sub category of domestic arbitration.
International commerce has been defined in France Embryon15) as follows:
international commerce encompasses all economic exchanges which cross borders and is not limited to the strict technical notion of trade or of a transaction consummated by a trader; all international disputes having an economic object are to be treated as commercial.
The Court of Appeal, Paris, had clearly set out the rule in Italo Ecua- doriana.16)
“Arbitrationwhichinvolvestheinterestofinternationaltradeisinternational. It is sufficient for that the transaction concerns a transfer of assets or of services or a payment abroad.
Other elements such as the venue, the applicable procedural law and the nationality of the parties are of no relevance.”
A view which has been emphasized in Babel Products17)
Sec. 1492, French Rules of Civil Procedure defines as international the arbitration which deals with interests of international trade. This definition disregards the quality or the nationality of the parties, the substantive law, the venue of the proceedings and takes into account only the economic
15) Sté France Embryon v. Argonauta, Court of Appeal, Lyon, July 4, 1991, Clunet
16) Sté Aranella v. Sté Italo Ecuadoriana, Court of Appeal Paris, April 26, 1985,
Rev. arb., 1985, 311.
17) SARL Carthago Films v. SARL Babel Products, App. Paris, March 29 (2001),
Rev. arb. 2001, 543 et seq.
aspects of arbitration, it requires only that the dispute concerns a transaction which economically does not involve only one State.
Along that line has expressed itself also the Supreme Court of Hong Kong in Fung Sang18)
“An arbitration will still be international, despite both parties having their places of business in the same State, if any place where a substantial part of the obligations of the commercial relationship is to be performed, or the place with which the subject matter of the dispute is most closely connected, is outside the State in which the parties have their place of business.”
Even in Russia,19) international commercial arbitration has been dealt with as follows
disputes resulting from contractual and other civil law relationships arising in the course of foreign trade and other forms of international economic relations, provided that the place of business of at least one of the parties is situated abroad; as well as – disputes arising between enterprises with foreign investment, international associations and organizations established in the territory of the Russian Federation; disputes between the participants of such entities ; as well as disputes between such entities and other subjects to the Russian Federation Law.
It is submitted that the comparison between Court proceedings and arbitration, which should be kept as the background of a study on arbitration, helps to assess such criteria. As in court proceedings, the nationality of the parties and/or the object of the dispute do not allow to consider a judgment rendered by a Court of a given State as belonging to another state, likewise it is suggested that such criterion do not help to establish the nationality of an arbitration.
VII. Combination v. an Alternative of such Criteria
In several jurisdiction and in the UNCITRAL Model Law, several of the above criteria are listed in an alternative way and any of them would make an award international.
They may also be taken into account all together. Even other factors have been taken into account.
Amongst them, the venue, the place where the proceedings have been administered, and even the choice of the substantive law.
18) Fung Sang Trading Ltd. v. Kaisun Sea Products & Food Co. Ltd., Supreme Court of Hong Kong October 29, 1991, Yearbook Commercial Arbitration 1992, 289.
19) Sec. 1.2, Law on International Commercial Arbitration (1993).
Even such combined alternative criteria do not seem to confer by them
selves any internationality.
A surprising mixture may be seen as having been achieved in Can West20) “while the Agreements, between the parties are undoubtedly international
in nature, the terms of that Agreement provide for a domestic arbitration.”
VIII. The Procedural Criterion
The critics to the above criterion must be completed by presenting the criterion which it is suggested to be followed.
Rather than being based on the nationality of the parties and/or of the object of the dispute, or the place where the proceedings are conducted or are completed, it is suggested that one should apply the procedural criterion, i.e. a criterion based on the procedural law of the proceedings.
Arbitration being a mechanism to resolve a dispute, its procedure qualifies to be the proper criterion.
An immediate objection may be raised to it. If procedure is the proper base for a criterion, arbitral proceedings will always be domestic or foreign.
Domestic and foreign proceedings would then complete the landscape and there would be no room for an international procedure.
If international arbitration is a synonym of anational arbitration, this notion should be excluded since arbitral proceedings must be always governed, according to commentators, by a procedural law.
However, some precedents, such as the highest Court of Netherlands in SEEE v. Yugoslavia and the United States in Gould v. Iran have held that awards not rendered under the procedural law of their venue could be registered and enforced under the New York Convention. The procedural law is here the guiding factor.
On this issue, it must be reminded that applying a procedural law which be different from the one of the venue does not entirely exclude the latter, because its mandatory provisions always prevail.
The principle having been set out, one must now pursue the analysis in establish to control whether and in which circumstances proceedings are entitledtobe governedby a procedural law whichmay be treatedas international.
20) Can West Global Communications Corp. v. Mirkaci Tikaret Ltd, Supreme Court of New York, New York County, April 4, 2005, Yearbook Commercial Arbitration
IX. Various Procedural Laws being Applicable
The parties to a proceeding may agree that it be governed by one procedural law, for example English law, as to evidence and by Turkish law as to the rest of the proceedings.
This plurality of procedural laws may be treated as amounting to an internationality since there would be not just one procedural law and it is not easy to define it, using the procedural criterion, as belonging to one or to another system.
This way be a first example of this class of arbitrations.
X. Application of a Procedural Law
Different from the one of the Venue and
at the same time the Mandatory Provisions of the Procedural Law of the Venue
Even in this event, it should be noticed that the proceedings are not governed by one procedural law and that this gives rise to an internationality from a procedural point of view.
XI. Supranational Arbitration Rules
Another situation, in which the proceedings are not governed by a national procedural law, arises when the parties agree that they be governed by international arbitration rules, i.e. rules which do not belong to a given legal system. There are many examples of rules, which do not belong to a given legal system, such as those of the ICC, LCIA, AAA, European Court of Arbitration, SCC and so on.
The parties are in fact not obliged to submit the arbitral proceedings to a national procedural law.
This is in line with the common say that arbitration has not a lex fori.
It should be added that, in this event, the arbitration rules do not cover the entire field of arbitration and have to be completed, as to those holes, by the procedural law of the venue (unless a different procedural law have been chosen by the parties for that). In any event, the public policy of the venue and or the different procedural law selected for that by the parties, applies.
All these elements induce to consider that even in a similar situation, one is not facing a domestic arbitral proceeding.
XII. Arbitrations Governed by an International
Other proceedings are governed by an international convention, such as the investment arbitrations under the Washington Convention (1965) and the Iran US arbitration under the Algiers Declaration 1981. Such proceedings are generally governed by the procedural law provided for by such international convention. They too should then not be treated by any State as domestic arbitration, being supranational.
A confirmation of this comes from the Washington Convention (1965) which provides that the awards made under it must be treated by each Adhering State as a final decision of its legal system. This confirms their supranationality and internationality.
It is suggested that this does not mean that such arbitrations are in the, stratosphere of subjectivism.
They may then not be treated, as some English tribunals have done for example in respect of lex mercatoria, as floating in the air.
Such proceedings remain in fact well linked to the procedural law which governs them.
It is then submitted that in the various above situations the proceedings are not governed by a domestic (or from a different perspective, by a foreign procedural law), but by an international one.
XIII. International Nature of the Arbitration
Arbitration does not consist only of the proceedings, but also of the arbi
tration agreement which gives birth to it.
Even the nature of the arbitration agreement has then to be considered. From the substantive point of view, contracts entered into by parties which
belong from different legal systems are generally treated as international contracts. Should this criterion not be applied also to arbitration clauses or submission agreements ?
This might lead to consider that also arbitrations entered into by parties belonging to different legal systems are international.
However, this would seem to be excessive.
XIV. Transnational and International Arbitrations
A commentary21) to the European Convention on international com
mercial arbitration states that
“the term international should be given the broadest meaning in order to cover any dispute where more than purely domestic matters are involved”
The adjective transnational, which has been introduced by judge Jessup, seems to be more appropriate to describe the arbitrations. which have been above described, in which the parties have a different nationality or domicile, or which concern international trade. They seem more appropriate than the term international, which should be left to describe international proceedings from a procedural point of view.
Transnational arbitration shares with the international ones, even at a lower degree, the risks that the arbitrators be inclined to nationalize them. This tendency starts from the basic tendency to treat arbitral proceedings as distant from local legal systems.
If the parties have opted for an international arbitration, the arbitrators must not only not apply to it any domestic procedural provision, but accept that the dispute cannot be approached as a domestic arbitration.
Delocalized arbitrations have been defined22) as a
“self contained judicial system, by its very nature separate from national systems of law and indeed antithetical to them”
a comment completed by the following remark:
“if the ideal is fully realized, national courts will not feature in the law and practice of international arbitration at all.”
XV. A-national Awards
The term anational awards literally aims to define awards which are not governed by and decided under a national procedural law.
This term is generally disliked.
Negative comments on it have been made amongst commentators by van den Berg, and in the US in Gould v. Iran and in the Netherlands in SEEE v. Yugoslavia.
In any event, one must recognize that a totally anational arbitral proceeding is not conceivable, since at least the mandatory provisions of the
21) D. T. Hascher, Commentary, Yearbook International Arbitration 2011,
22) SA Coppé Lavalin NV et al. v. Ken Ren, Chemicals and Fertilisers [2 WLR, 631].
venue of the proceedings prevail on any other contractual or statutory pro
It is suggested that, then, aside of domestic and of foreign arbitration, there is this third category of arbitration, the international one.