HAMMONDS’ COMMERCIAL & DISPUTE RESOLUTION GROUP PRESENTS A SERIES OF INTRODUCTIONS TO THE VARIOUS ALTERNATIVE OPTIONS AVAILABLE FOR ARBITRATING DISPUTES FOR CHINESE ENTERPRISES.
The Arbitration Institute of the Stockholm Chamber of Commerce (SCC)
The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) was founded in 1917 and is regarded as one of the world’s leading arbitration institutes. The SCC gained the recognition of the United States and the Soviet Union in the late 1970’s as a neutral centre for dispute resolution of East-West trade disputes and has since further expanded its services in international arbitration and deals with disputes relating to more than 40 countries, including China.
The SCC has, since 1976, published its own rules of arbitration which have been regularly reviewed and revised, with the latest version coming into force on 1 January 2010 (the “SCC Rules”). Rules for expedited arbitration, developed for less complex and minor disputes, were first adopted in the 1990’s. The current SCC Expedited Arbitration Rules were reviewed in 2009 and came into force on 1 January 2010 (the “SCC Expedited Rules”).
The SCC Rules are presently available in English, Swedish, Russian, German and Chinese whereas the SCC Expedited Rules are available in English, Swedish and Russian. The SCC has also developed Mediation Rules, Insurance Arbitration Rules and published its own set of procedures for its services under the UNCITRAL Arbitration Rules.
The SCC is part of, but independent from, the Stockholm Chamber of Commerce. The SCC comprises of the SCC Board and the Secretariat whose major functions are:
- The Board. This has responsibility to decide on jurisdiction, appointment of arbitrators, challenge to arbitrators and arbitration costs issues.
- The Secretariat. Headed by a Secretary General, the Secretariat, comprising of multilingual staff, is responsible for handling daily case management as well as the production of publications.
Arbitration proceedings under SCC Rules
- Commencement of Arbitration
Arbitration is commenced when the claimant files a Request for Arbitration with the SCC.
- Answer to Request for Arbitration
A copy of the Request for Arbitration together with the documents attached thereto will be sent to the respondent by the Secretariat who will set a time limit within which the respondent has to submit an Answer to the SCC.
Any counterclaim or set-off or objections regarding jurisdiction should be submitted in the Answer. The Secretariat will send a copy of the Answer to the claimant and allow the claimant an opportunity to submit comments on the Answer.
A summary of the dispute, a preliminary statement of the relief sought, comments on the number of arbitrators as well as a copy of the arbitration agreement or arbitration clause are required to be included in the Request for Arbitration.
The respondent shall include in the Answer any objections concerning the existence, validity or applicability of the arbitration agreement, an admission or denial of the relief sought, a preliminary statement of any counterclaims or set-offs and its comments on the number of arbitrators.
- Nomination and Appointment of Arbitrators
The parties are free to agree on the number of arbitrators. Failing any agreement by the parties, the arbitral tribunal shall consist of three arbitrators unless the Board decides, taking into account the complexity of the case, the magnitude of the amount in dispute and other circumstances that the dispute be decided by a sole arbitrator.
Where a sole arbitrator is decided upon, the parties can agree and jointly make the appointment within 10 days, failing which the sole arbitrator will be appointed by the Board.
Where the arbitral tribunal is to consist of three arbitrators, each party nominates one arbitrator and the Chairperson is appointed by the Board. The Board will also make the appointment of the arbitrator that any party fails to appoint.
- Conduct of the Proceedings
In compliance with the conditions set down in the arbitration agreement and the SCC Rules, the arbitral tribunal will determine the manner of conducting the proceedings taking into account of the parties’ wishes.
Directions will be given by the tribunal on submission of the Statement of Claim and Statement of Defence by the claimant and respondent respectively. Additional written submissions may be ordered to be submitted should the tribunal think fit.
In the absence of an agreement between the parties, the arbitral tribunal determines the language(s) of the arbitration having regard to all relevant circumstances and the parties’ wishes. An oral hearing will be arranged if requested by either party, or if the tribunal considers it appropriate, on such date as fixed by the tribunal.
- Applicable Rules of Law
The arbitral tribunal decides the merits of the dispute on the basis of the rules of law agreed upon by the parties. In the absence of such agreement, the tribunal will apply the rules of law which it considers to be most appropriate.
- Interim Measures
The arbitral tribunal may, at the request of a party, grant any interim measures it deems appropriate in the form of an order or an award.
Any party requesting an interim measure may be ordered to provide security in connection with the measure.
- Decision Making of the Arbitral Tribunal
Any award or decision of the arbitral tribunal is made by a majority of the arbitrators or, failing a majority, by the Chairperson.
A final award must be made within 6 months from the date the arbitration is referred to the arbitral tribunal.
Arbitration proceedings under SCC Expedited Rules
Arbitrations adopting the SCC Expedited Rules are conducted in a similar way except for the following:
- Arbitrations are decided by a sole arbitrator
- Unless the arbitrator decides otherwise for special reasons, each party can only submit one brief written statement (including Statement of Evidence) in addition to the Statement of Claim/ Statement of Defence and the time limits for submission of such documents may not generally exceed 10 working days
- The time limit within which the tribunal must render its final award is three months
- No reasons or explanation of the award will be given unless request is made
Costs of the Proceedings and Advance on Costs
The SCC Board will set the amount of an advance on costs based on the estimated total amount of the costs of the arbitration. The costs of the arbitration include the fee and expenses of the arbitrators (including the fee and expenses of any expert appointment), the administrative fee and expenses of the SCC, all of which are fixed by the Board in accordance with the published scale in force on the date of commencement of the arbitration.
The advance on costs is payable in equal shares by the parties. Failure to pay within the prescribed time limit may result in the case being dismissed in whole or in part.
As with some other arbitration institutes e.g. ICC, both arbitrators’ fees and administrative fees are collected based on the amount in dispute.
Furthermore, a non-refundable registration fee of EUR1,500 (or EUR1,000 for expedited arbitrations) is required upon filing of the Request for Arbitration. Such registration fee will be deducted from the advance on costs to be paid by the claimant.
In the absence of an agreement by the parties, the tribunal can, upon request of a party and having regard to the outcome of the case and other circumstances, apportion the costs of the arbitration between the parties.
Scrutiny of Arbitral Award
Unlike ICC arbitrations, the SCC does not conduct scrutiny of arbitral award to be rendered.
Fees and Costs
Unless otherwise agreed by the parties, the arbitral tribunal may in the final award upon the request of a party, order one party to bear any reasonable costs (including legal costs) incurred by another party.