United Nations Commission
on International Trade Law
Working Group II (Arbitration and Conciliation)
Sixty-fourth session
New York, 1-5 February 2016
Settlement of commercial disputes: Revision of the UNCITRAL Notes on Organizing Arbitral Proceedings
Note by the Secretariat
Contents
Paragraphs / Page- Introduction......
- Revision of the UNCITRAL Notes on Organizing Arbitral Proceedings
- Specific issues for consideration......
- Draft revised UNCITRAL Notes on Organizing Arbitral Proceedings
I.Introduction
1.Further to initial discussions at its twenty-sixth session, in 1993,[1] the Commission finalized the UNCITRAL Notes on Organizing Arbitral Proceedings (also referred to below as the “Notes”) at its twenty-ninth session, in 1996.[2]At its forty-seventh session, in 2014, the Commission agreed that the Working Group should commence work on the revision of the Notes and, in so doing, should focus on matters of substance, leaving drafting to the Secretariat.[3]
2.At its forty-eighth session, in 2015, the Commission had before it the draft revised Notes (contained in document A/CN.9/844), as it resulted from the work of the Working Group at its sixty-first[4] (Vienna, 15-19 September 2014) and sixty-second[5] (New York, 2-6 February 2015) sessions.
3.The Commission approved the draft revised Notes in principle, and requested the Secretariat to revise the Notes in accordance with its deliberations and decisions.[6]It was further agreed that the Secretariat could seek input from the Working Group on specific issues during its sixty-fourth session. Accordingly, this note contains a revised version of the Notes for consideration by the Working Group. The Commission further requested that the draft revised Notes be finalized foradoption at its forty-ninth session, in 2016.[7]
II.Revision of the UNCITRAL Notes on Organizing Arbitral Proceedings
A.Specific issues for consideration
4.The Working Group may wish to consider the following issues.
(a)Introduction: the introduction of the draft revised Notes focuses on the purpose and non-binding nature of the Notes, as well as on the general characteristics of arbitration. Matters which relate to the organization of the arbitral proceedings and were previously contained in the introduction (such as consultations and procedural meetings) have been moved to the annotations.
(b) Note 1 (Consultation for decisions on the organization of arbitral proceedings and procedural meetings): consultations between the parties and the arbitral tribunal as well as procedural meetings are essential aspects of the organization of arbitral proceedings, and therefore, it is proposed to deal with those topics in Note 1. The substance of Note 1 of the 1996 version (“Set of arbitration rules”) has been placed in the introduction of the draft revised Notes (in paragraph 7), as it relates to the characteristics of arbitration.
(c) Note 2 (Language or languages of the arbitral proceedings): Note 2 has been restructured to highlight that the selection of multiple languages in arbitral proceedings raises difficulties, and should not be presented as a usual practice.
(d) Note 4 (Administrative supportfor the arbitral tribunal): a wide range of views were expressed at the forty-eighth session of the Commission in relation to the last sentence of paragraph 35of the draft revised Notes (as contained in document A/CN.9/844) which provided that “secretaries would normally not be involved in the arbitral tribunal’s decision-making functions”.[8]The Working Group may wish to consider the options contained in the last sentence of paragraph 36 of the draft revised Notes below.
(e) Note 6 (Possible agreement on confidentiality; transparency in treaty-based investor-State arbitration): a suggestion was made at the forty-eighth session of the Commission that paragraphs 51 and 52of the draft revised Notes (as contained in document A/CN.9/844) should be elaborated to illustrate instances where parties from different jurisdictions might be subject to different obligations in relation to confidentiality or disclosure under the law applicable to them or to their counsel in their respective jurisdiction. The Commission agreed that further consideration should be given as to whether a more detailed provision on the issue would be required.[9] The Working Group may wish to consider paragraphs 52 and 53 of the draft revised Notes below in that light.
(f)Note 11 (Points at issue and relief or remedy sought): at the forty-eighth session of the Commission, it was mentioned that depending on the circumstances (including the applicable arbitration law), it might not always be appropriate for the arbitral tribunal to inform the parties of concerns, for example, if it finds that the relief or remedy sought is not sufficiently precise.[10] The Working Group may wish to further consider the revised version of paragraph 70 of the draft revised Notes below.
(g)Note 14 (Witnesses of fact): the Working Group may wish to consider whether paragraph 90of the draft revised Notes belowsufficiently explains the various approaches to pre-testimony contact by a party with witnesses and to issues raised by the parties’ involvement in the preparation of oral testimony by witnesses.[11]
(h)Note 15 (Experts): at the forty-eighth session of the Commission, it was said that the question of ex-parte communication by the tribunal-appointed expert was treated differently in various jurisdictions.[12] In that context, the Working Group may wish to consider whether paragraph 106 of the draft revised Notes below adequately deals with that question.
(i) Notes 18 (Multiparty arbitration) and Note 19 (Joinder and consolidation): the Working Group may wish to consider whether Notes 18 and 19below sufficiently provide information about the issues that might arise from multiple arbitration agreements and from parallel proceedings.[13]
5.The Working Group may wish to note that, in order to avoid unnecessary repetitions, provisions in Note 14 (Witnesses of fact) on “Manner of taking oral evidence of witnesses” (paras. 90 to 93 of the draft revised Notes contained in document A/CN.9/844) have been deleted from that Note and grouped with similar provisions in Note 17 (Hearings).
B.Draft revisedUNCITRAL Notes on Organizing Arbitral Proceedings
6.The Working Group may wish to consider the draft revised Notes
below. References to discussions of the Working Group at its sixty-first andsixty-second sessions and of the Commission at its forty-eighth session are contained below.
“2016 UNCITRAL Notes on Organizing Arbitral Proceedings
“Preface
“The United Nations Commission on International Trade Law (UNCITRAL) adopted the first edition of the Notes at its twenty-ninth session, in 1996. UNCITRAL finalized a second edition of the Notes at its [forty-ninth] session, [in 2016]. In addition to representatives of the 60 member States of UNCITRAL, representatives of many other States and of international organizations participated in the deliberations. In preparing the second edition of the Notes, the Secretariat consulted with experts from various legal systems, national and international arbitration bodies, as well as international professional associations.
“List of matters for possible consideration in organizing arbitral proceedings
“Introduction
“Purpose of the Notes [A/CN.9/826, paras. 13 to 15 and 28; A/CN.9/832,
para. 61]
“1.The purpose of the Notes is to list and briefly describe matters relevant to the organization of arbitral proceedings. The Notes, prepared with a focus on international arbitration, are intended to be used in a general and universal manner, regardless whether the arbitration is administered by an arbitral institution.
“2.Given that procedural styles and practices in arbitration vary widely, the Notes do not seek to promote any practice as best practice.
“Non-binding character of the Notes[A/CN.9/832, para. 62]
“3.The Notes do not impose any legal requirement binding on the parties or the arbitral tribunal. The parties and the arbitral tribunal may use or refer to the Notes at their discretion and to the extent they see fit and need not adopt or provide reasons for not adopting any particular element of the Notes.
“4.The Notes are not suitable to be used as arbitration rules, since they do not oblige the parties or the arbitral tribunal to act in a particular manner. Various matters discussed in the Notes may be covered by applicable arbitration rules. The use of the Notes does not imply any modification to such arbitration rules.
“5.The Notes, while not exhaustive, cover a broad range of situations that may arise in arbitral proceedings. In many arbitrations, however, only a limited number of the matters addressed in the Notes will arise or need to be considered. The specific circumstances of the arbitration will dictate which matters it would be useful to consider and at what stage of the arbitral proceedings those matters should be considered.Therefore, it is advisable not to raise a matter unless and until it appears likely that the matter needs to be addressed.
“Characteristics of arbitration [A/CN.9/826, paras. 30, 31 and 41 to 50; A/CN.9/832, paras. 76 to 79; Official Records of the General Assembly, Seventieth Session, Supplement No. 17 (A/70/17), paras. 27 to 34]
“6. Arbitration is a flexible process to resolve disputes; the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the arbitral proceedings, subject to mandatory provisions of the applicable arbitration law. The autonomy of the parties in determining the procedure is of special importance in international arbitration.It allows the parties to select and tailor the procedure according to their specific wishes and needs, unimpeded by possibly conflicting legal practices and traditions.
“7. The parties exercise their autonomy usually by agreeing on a set of arbitration rules to govern the arbitral proceedings. The benefits of selecting a set of arbitration rules are that the procedure becomes more predictable and that the parties and the arbitral tribunal may save time and costs by using an established set of arbitration rules that has been widely applied, has been carefully drafted by experienced practitioners, and may be familiar to the parties. In addition, the selected set of arbitration rules (as modified by the parties, to the extent permitted) usually prevails over the non-mandatory provisions of the applicable arbitration law and may better reflect the objectives of the parties than the default provisions of the applicable arbitration law.Where the parties have not agreed at an earlier stage on a set of arbitration rules, they may still agree on a set of arbitration rules after the arbitration has commenced (see below, para. 10).
“8. To the extent that the parties have not agreed on the procedure to be followed by the arbitral tribunal or on a set of arbitration rules to govern the arbitral proceedings, the arbitral tribunal has the discretion to conduct such proceedings in themanner it considers appropriate, subject to the applicable arbitration law. Arbitration laws usually grant the arbitral tribunal broad discretion and flexibility in the conduct of arbitral proceedings, provided that a fair, equitable and efficient process is observed.[14]A set of arbitration rules selected by the parties would also shape the arbitral tribunal’s discretion to conduct the arbitral proceedings, either by strengthening or limiting that discretion. Discretion and flexibility are useful as they enable the arbitral tribunal to make decisions on the organization of arbitral proceedings that take into account the circumstances of the case and the expectations of the parties, while complying with due process requirements. In determining how the arbitral proceedings will be conducted where the parties did not agree on the procedure or on arbitration rules, the arbitral tribunal may use, as a reference, a set of arbitration rules.
“Annotations
“1.Consultation for decisions on the organization of arbitral proceedings and procedural meetings[A/CN.9/826, paras. 27, 33 to 35 and 39; A/CN.9/832, paras. 66 to 75; Official Records of the General Assembly, Seventieth Session, Supplement No. 17 (A/70/17), paras. 22 to 26]
“(a) Consultation between the parties and the arbitral tribunal
“9.It is usual for the arbitral tribunal to involve the parties in making decisions on the organization of the arbitral proceedings and, where possible, to seek their agreement. Such consultations are inherent to the consensual nature of arbitration and are relevant to most matters addressed in the Notes. For the purpose of keeping the Notes concise, the need for such consultation is not necessarily repeated in the relevant parts of the Notes.
“10.Likewise, it is usual for the parties to consult the arbitral tribunal whenever they agree between themselves on any issue that might affect the organization of the arbitral proceedings and the planning of the arbitrators. Moreover, if the parties agree after the arbitral tribunal has been constituted that an arbitral institution will administer the arbitration, the parties would usually inform the arbitral tribunal in addition to securing the agreement of that institution.
“(b) Procedural meetings
“(i) First procedural meeting
“11. It is advisable for the arbitral tribunal to give the parties a timely indication as to the organization of the arbitral proceedings and the manner in which it intends to proceed. In particular, in international arbitrations, parties may be accustomed to differing styles of arbitral proceedings and, without such guidance, they may find certain aspects of the arbitral proceedings unpredictable and difficult to prepare for.
“12. As a method of consultation with the parties, the arbitral tribunal may consider holding at the outset of the arbitral proceedings, a meeting or case management conference at which it determines the organization of the arbitral proceedings and a procedural timetable (‘procedural meeting(s)’).
“13. A number of issues covered by the Notes would usually be addressed at the first procedural meeting, and thus create the basis for a common understanding of the procedure among the parties and the arbitral tribunal. If a procedural timetable is established, it may serve, for instance, to indicate time limits for the communication of written submissions, witness statements and expert reports so that the parties are aware of such limits early in the arbitral proceedings. A procedural timetable may also include provisional dates for hearings.
“(ii) Subsequent procedural meetings
“14.The arbitral tribunal usually holds additional procedural meetings (sometimes referred to as ‘preparatory conferences’ or ‘pre-hearing conferences’) at subsequent stages of the arbitral proceedings. Procedural meetings are significant as they set the stage for the arbitral proceedings and aim at ensuring their efficiency. Procedural meetings may be used, for instance, for the arbitral tribunal to reassess whether further submissions are required or further evidence ought to be adduced. The procedural timetable can be updated regularly as the arbitral proceedings progress.
“(iii) Modification of decisions on the organization of arbitral proceedings
“15.Decisions on the organization of arbitral proceedings can be revisited and modified at relevant stages of the arbitral proceedings by the arbitral tribunal. However, the arbitral tribunal should exercise caution in modifying procedural arrangements, in particular where the parties have taken steps in reliance on those arrangements. Moreover, the arbitral tribunal may not be able to modify procedural arrangements to the extent that those arrangements result from an agreement between the parties.
“(iv) Record of the outcome of a procedural meeting
“16.A record of the outcome of a procedural meeting can take various forms depending on its significance, such as a procedural order, a summary minute, or an ordinary communication among the parties and the arbitral tribunal.Usually, the arbitral tribunal records the rules of procedure that have been determined to apply to the arbitral proceedings in a procedural order.The outcome of a procedural meeting can be made in writing or first made orally and recorded in writing at a later stage after the procedural meeting. The parties and the arbitral tribunal may consider whether to produce transcripts, which could provide a precise record of the procedural meeting but also limit open discussion at such meeting.
“(v) Attendance of the parties
“17. It is usually advisable that the parties themselves, in addition to any representatives they may have appointed, are present at procedural meetings.
“18. If a party does not participate in a procedural meeting, the arbitral
tribunal should nevertheless ensure that thenon-participating party will have an opportunity to participate in the further stages of the arbitral proceedings and to present its case. The procedural timetable, if established, should provide for such opportunity.
“19.Procedural meetings can be held either in the physical presence of all participants, or remotely via technological means of communication. The arbitral tribunal may consider, in each case, whether it would be preferable to hold the meeting in-person, which may facilitate personal interaction, or to use remote means of communication, which may reduce costs.
“2.Language or languages of the arbitral proceedings [A/CN.9/826, paras.51
to 60; A/CN.9/832, paras. 80 to 86; Official Records of the General Assembly, Seventieth Session, Supplement No. 17 (A/70/17), paras. 35 to 37]
“(a)Determination of the language
“20.The parties may agree on the language of the arbitral proceedings. Such agreement ensures that the arbitral proceedingscan be tailored to suit the common language of the parties, or at least that the parties have the capacity to communicatein the language in which the arbitral proceedings will be conducted. In the absence of such agreement, the language is usually determined by the arbitral tribunal. Common criteria for that determination are the primary language of the contract(s) or other legal instruments under which the dispute arose, and the language commonly used by the parties in their communication.
“(b) Possible need for translation and interpretation
“21.The parties may rely on documentary evidence, judicial decisions and juridical writings (‘legal authorities’)that are not in the language of the arbitral proceedings. In determining whether to provide for translation of those documents in full or in part, the arbitral tribunal may consider whether the parties and the arbitral tribunal are able to understand their content without translation and whether cost-efficient measures are available in lieu of translation in full (such as translation of part of documents, or a single template translation for similar documents with largely pictorial or numeric content).
“22.Interpretation may be necessary where witnesses or experts appearing at a hearing are unable to testify in the language of the arbitral proceedings. Witnesses and experts familiar with the language of the arbitral proceedings might still require occasional interpretation, rather than full interpretation.If interpretation is necessary, it is advisable to consider whether the interpretation will be simultaneous or consecutive. While simultaneous interpretation is lesstime-consuming, consecutive interpretation allows for a closer monitoring of the accuracy of the interpretation.