ARBITRATION LECTURE

APRIL 1, 2020

I am ready for you

Kindly post your name before the question, clarification or

comment

I am not a "Dr". I am Mr please

Gideon Tettey Tetteh 

Will we touch on the questions you asked our colleagues to solve

so that we know if we are on track?

Symon... I heard  you say Arbitrators to a dispute can be even

number or an odd number.. Which situations can we have an even

or odd number of arbitrators??

I am open for questions including the one I posed

If you heard "even" number or I said "even" number then it is not

correct. I may have said "uneven". The tribunal must be

constituted with an uneven number e.g. 1, 3, 5 etc

Sir, pls let try answering the question you posed

Sir I remember during an earlier class I asked a question. It was

that what was the effect of an Arbitration clause that ended by

saying that "nothing precludes parties from seeking to protect their

interest by resorting to the courts of competent jurisdiction of the

Republic of Ghana?"

The description of such a clause will be the subject of my next

engagement with  you but suffice to say that an arbitration clause

which provides for an avenue to the court after conclusion of

arbitration proceedings is a defective or pathological arbitration

clause

I see. I have seen a lot of clauses like that in reviewing counter-

party agreements and i have to admit that until now I thought it

was normal and so didnt comment. Thank you.

Deila, there are many such clauses which make reference to

arbitration problematic
I think I have given about three in my audio

My eyes are wide open now.

I hope Priscilla, Wendy and Ash Wednesday are ready to deal

with those

Yes please

So the wording should not admit any ambiguity whatsoever. My

view is that since the resort to court to assist in the clarification of

procedural issues is inherent in arbitration so there is no need to

mention anything about resort to courts.

Deila kindly raise it again and let me highlight the implications of

this when we consider pathological arbitration clauses

Anthony EIWULEY (Ash Wednesday)

You posed the question to me that “in case of necessity the ICC

Paris shall be called upon”

Answer.m: it it when Article  29 of the ICC Rules shall be invoked

where an Emergency Arbitrator shall be appointed to look into the

matter since a party will need urgent and interim or conservatory

measures that cannot await the constitution of an arbitrator panel

(i.e. Emegency Measures)?

Sir, I will do so.

Nana Akosua ....Sir pls u stated in ur recording that where the

dispute has to do with law n facts , parties should select an

arbitrator with expertise to aid in successful resolution. What if

there r three independent parties with separate interest, must they

appoint 3 different arbitrators with different expertise in their

interests ?

Yes the wording of the arbitration agreement must be

unambiguous and reference to court is unnecessary particularly

where the lex arbiti can always be invoked. Yarney, you are right

The first thing you must know is that the parties appoint who they

want to constitute the tribunal and will determine the qualification

or nationality etc that the arbitrator(s) must possess. So right from

the beginning the parties are aware of the qualification of the

persons who should constitute the tribunal. Where there three

parties with distinct interests, they ought to have determine the

number of arbitrators in the arbitration agreement. If however, that

was not done, then from the audio you should be able to tell me

how many arbitrator(s) will be appointed and who should

appoint.... Nana Akosua you have answer that

Thank you

I also said that where the dispute has to do with complex law and

facts, the practice is to have a three panel tribunal to determine the

dispute. But it is not mandatory

I think such a clause will not be enough to ground an arbitration.

The ICC has several functions aside its international court of

arbitration through which it offers its arbitration services.

Secondly it also offers mediation services so which one does the

clause invoke? With such lack of clarity the clause is ineffective in

invoking arbitration.
Priscilla.

The question was to identify what was wrong with the clause "all

disputes arising in connection with the present agreement shall be

submitted in the first instance to arbitration. The arbitrator shall be

a well known chamber of commenced like the ICC designated by

mutual agreement between both parties."

Answer:

1. The clause did not indicate the number of arbitrators to be

nominated by the parties.聽

2. Even though it mention ed the qualification of the arbitrator and

mode of appointment, the mode of appointment may be

problematic if the parties are unable to have a mutual agreement

on the appointment of the arbitrator(s).

3.the clause also did not indicate which law, adhoc or institutional

rules that will be applicable to the arbitration.

4. The place of arbitration was also not mentioned in the clause.

5. The language to be used was also not included the the said

clause.

Thank you very much. So Anthony as you can see, the clause
simply states that "in case of necessity, the ICC shall be called

upon". What is necessity?? What function is the ICC going to

perform? Such clauses are defective and inoperative

Thank you Priscilla. Generally the answer is correct but you will

also notice from this clause that the use of the phrase "in the first

instance" raises issues. What is that?

Secondly, it says the "arbitrator shall be a well-known Chamber of

Commerce (like the ICC). What does this mean? Symon answer

this

I have three questions outstanding

I thought the phrase"in the first instance" also created some

ambiguity. Did it mean that the Arbitration award was not in this

case going to be final and binding. That phrase must be a

pathological arbitration phrase, I believe.馃槄

I thought that was an indication that when a dispute arise the first

option available to the parties is an arbitration

'In the first instance' leads to ambiguity because it suggests that

there is an alternative to arbitration. This is because arbitration is

characterized by finality when an award is made.

Sir pls is it always the case that Ghana Arbitration centre will have

one arbitrator to resolve disputes in the absence of parties

indication or it can always change . Nana Akosua

Excellent

Good evening sir and colleagues. My name is Frederick.聽

From the audio and previous pictures it seems to me that a proper

arbitration clause as opposed to a pathological one must be very

detail and not leave anything out to create room for uncertainty for

the parties at the time of its invocation.聽

Most arbitration clauses in substantive agreements are a bit terse

and appear as part of the boiler plates or mid-night clauses. Would

it be right to prefer a separate arbitration agreement from the

substantive agreement so as to have all these fine details i.e.

number of arbitrators, nationality, qualification etc

Thank you

Ok

This is also ambiguous as it leaves room for parties to argue over

which institution is applicable

If the agree, it can be more than one. If they go by the Centre 鈥檚

Rules it is a sole arbitrator

Patrick...

It creates an ambiguity and leaves room for arguement on the

applicable institutions.

Sir, could it. E in cases where  the amount of fees is in dispute, the

scope  of rules and the constitution of the arbitration tribunal?

I appreciate your position but the problem with the submission

agreement is that you may not have the cooperation of the other

party to submit the dispute to arbitration

Else at the time of reference to a dispute the parties will be in a

position to address all issues that I have discussed must be part of

an arbitration agreement

Sir I think he means instead of a clause one should preferably draft

a separate Arbitration  agreement.

Sir, won’t an arbitration agreement deal with this instead of the

arbitration clause described?

Exactly

Thanks sir. I actually meant another agreement at the time of

entering into the substantive agreement. Not at the time of dispute.

I agree with Frederick. I was going to ask a similar question. It

appears this makes for very voluminous Agreements.

A lot of detail seems to be required.

On this point the critical thing to note is that an arbitrator is a

person not an institution. So an arbitrator cannot be a well known

chamber of commerce like the ICC

It is even not clear kind of ICC

I hope this clarifies the issue on the second question

Yes sir. Thanks

International Criminal Court ICC. International Chamber of

Commerce ICC.

Simply stating ICC is surely ambiguous

Yes please

Not exactly. If you remember the use of institutional rules will the

gap in many cases. The more germane ones should be identified in

the arbitration clause. But in any event what is wrong with having

a lengthy arbitration agreement which will avert future disputes.

Paper should not be the concern for the drafter

Correct

Have I addressed all the questions asked for now?

Very well sir.

Sir I was more concerned about the voluminous substantive

agreement. For e.g. if one has a contract for sale of a car the

Arbitration clause alone could span several pages rendering it

quite voluminous and unwieldy. This is why we were wondering

whether it was not more prudent to draft a separate Arbitration

agreement.

Where the Parties agree that some rules of an institution will

apply, the final say is determined by that institution

I guess this is why it is important to state the governing law

applicable to the Arbitration agreement, within it.

That may be the reason why one will need to refer to some of the

sample clauses set out by the arbitration institutions. They are well
done and not voluminous and admit only minor amendments to

suit a particular situation. Trying to couch one as hoc may be risky

without experience.

The parties have a right to object to an arbitrator at the time of

appointment. Such objection will be determined and if it is

grounded, the arbitrator will be removed. Typically when a party

raises objection against an arbitrator, the arbitrator by himself

without prompting, whether the grounds are founded or not will

recuse himself

Party Autonomy is given prominence but it is not absolute as we

will consider in the course of time

In addition to the explanation I have offered

Thanks, sir.

Yes you can but I don’t see why you’re worried about the

voluminous nature of the arbitration agreement. Four pages of

three will capture everything you require

That’s right.

Frederick are you ok with the explanation?

Thank you sir.

Many thanks sir

I am.

Sir, we are yet to tackle your third question, the one meant for

Priscilla, I believe.

Priscilla has answered. You meant Wendy?

Yes

Any of can attempt it

Sorry, I meant Wendy. Forgive me.

Since Wendy is not minding me

I'm here sir

Sorry, didn't join in early. Please share the third question again.

Thanks

Nana Akosua hasn’t answered her question too

It’s on the audio

Pls there was no question for me. My name was not mentioned sir

Edith Asiedu-Odame 

Mr. Amofa when you were explaining the law governing the

arbitration agreement itself you made mention of the lex loci being

used to govern the arbitration agreement in some jurisdictions and

not the lex arbitri. Does it mean that the lex loci will be the law of

the venue and not the place of the seat of arbitration?

The first thing you must know is that the parties appoint who they

want to constitute the tribunal and will determine the qualification

or nationality etc that the arbitrator(s) must possess. So right from

the beginning the parties are aware of the qualification of the

persons who should constitute the tribunal. Where there three

parties with distinct interests, they ought to have determine the

number of arbitrators in the arbitration agreement. If however, that

was not done, then from the audio you should be able to tell me

how many arbitrator(s) will be appointed and who should

appoint.... Nana Akosua you to have answer that

That’s meant for Nana Akosua

If any dispute arises between A and B in connection with this

agreement such dispute shall be finally settled by arbitration by

two arbitrators,  one appointed by A and one by B.

Should the arbitrators fail to agree on a decision,  either of them

shall apply to the ICC, Paris for an appointment of an Umpire. 

All arbitration proceedings shall be carried out in Thailand in

accordance with the rules of conciliation and arbitration of the

ICC.

Each party shall bear the cost of it's own arbitrator.

The application of the lex loci should be distinguished from the

mez arbitri in all respects. The lex loci will used as the governing

law of the arbitration agreement if none was stated. The lex arbitri

deals with the procedural law of the place or seat of arbitration not

the venue. As I said the venue can be anywhere

Great. Thanks for reproducing the question

You are welcome Sir

We have learnt the prudence of referring to some rules or the other

within the agreement. In the absence of a specific mode of

appointment I believe those rules will apply. 

I have attempted to answer Nana Akosuas question.

. It is the parties who decide to choose those arbitrators with

expertise in their interest because they will pay them. Where

Arbitration involves complex issues of law and facts, it is

important to use 3 arbitrators, that way the certainty of award will

be very good . I guess I may be right

Thanks Deila. Since there are three parties, it will be clumsy to

have all three appoint and then appoint two more persons to have

5 arbitrators. The costs will too much for the parties. The best is

grant the power to an institution to appoint all three arbitrators or

that one arbitrator is appointed. All these will only kick in if the

parties failed to provide for the number of arbitrators and the

mode of appointment

Will someone take a shot at the last question?

This agreement may be impossible to implement for the following

reasons:

In International arbitration, umpire is not often used, though not

totally discarded, it is rather the use of a Chairman who will sit

with the two arbitrators from beginning to the end of the

arbitration proceedings and help them make a decision. However

umpires are often used in trade and commodity arbitrations.

2. Reference to ICC in Paris is incorrect. It's located in the

Netherlands.

In the event of unresolved disputes,  the matter will be referred to

the International Chamber of Commerce.

This is the last question please

Great Wendy

In addition uneven number of arbitrators is recommended

But that is not all. Any more contributions?

Excellent!!!

Also why Thailand and why the reference to rules of conciliation.

Seems quite confusing.

And so the party appointed arbitrators will come together to

appoint a chairman who bcms the time breaker in whichever

situation

Mateki did you mean "even" and not " uneven?"

The answers provided are correct. In addition you will not that

under the ICC Rules, the practice of Umpire is alien therefore, the

arbitration agreement cannot qualify to be determined under the

ICC Rules. I admit that we haven't done the ICC Rules so kindly

take note of it

Uneven. Odd numbers

Thank you

Under the ICC Rules, there is also a scheme for determining the

fees of arbitrators. It is not for the parties to override that practice

under the ICC Rules

It's stated that each party is to appoint one arbitrator, the number

of arbitrators have to be an odd number. If two arbitrators are

being appointed and each party will bear the cost of it's arbitrator,

who will pay for the cost of the third arbitrator.

Thailand may be the place of arbitration which the parties can

determine. But the other points are contrary to the ICC Rules

Ooo ok

Shall we answer this question?

Does this not apply in this scenario as well?

And the question of “unresolved disputes”.

What attempt should be made at settling the dispute prior to

arbitration?

I think that the cost for the third arbitrator should be borne by the

two parties. Not too sure if the institution levy the parties for

which they can provide an arbitrator when needed. My thinking

please. - Eugenia

I think I have explained this earlier. I said that the ICC does

abhors the kind of arrangement in the arbitration agreement.

Therefore the clause is defective an inoperative

It doesnt give any details so the Rules of the ICC will apply in full

in all respects. It also does not, like Nathan and *Marteki*

referenced refer to either Arbitration or Mediation.

It is not an arbitration clause. What is "unresolved dispute" as was

asked by Naa

I can only clap for you 馃憦馃徑馃憦馃徑馃憦馃徑馃憦馃徑馃

憦馃徑馃憦馃徑馃憦馃徑馃憦馃徑馃憦馃徑

She asked the question without providing an answer

Sir who did you clap for? 馃榿

You of course

Ok thanks I needed to be sure so I could claim it fully.馃ぃ馃ぃ

I hope I have addressed all your questions. Do you have any

outstanding issues?
It is all yours Deila

How will the rules of the ICC apply though

The simple answer to that is there is nothing which makes the

clause an arbitration agreement from what we have discussed

I believe that unless there 鈥檚 a submission agreement, the

clause fails

The International Chamber of Commerce does not settle only

arbitration disputes but also mediation. So the reference is to

what?

Ladies and gentlemen, do you have any more questions?

I think we should end here for today's exercise

A dispute can arise and be resolved amicably and quickly. That

ends it. It is therefore possible for a dispute to remain unresolved.

I trust that it has been useful

Thank you all and enjoy the rest of the evening

I will send the next audio for discussion

Thank you