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12 VJ 203

Vindobona Journal of International Commercial Law & Arbitration

2008

Article

*203 A Comparison of the Uncitral Model Law and the Arbitration Rules of the Stockholm Chamber of Commerce

Samantha Lord, Rupert Baker [FNa1]

Copyright © 2008 by Moot Alumni Association, Vienna, Austria; Samantha Lord, Rupert Baker

CONTENTS

1 Introduction 203

2 Arbitrability 204

3 Arbitration Agreement 205

4 Jurisdiction 208

5 Composition of the Arbitral 210

Tribunal

6 Procedural Fairness 212

7 Party Autonomy 213

8 Proceedings before the Arbitral 213

Tribunal

9 Court Intervention 219

10 The Award 219

11 Conclusion 220

1 INTRODUCTION

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This paper compares the UNCITRAL Model Law on International Commercial Arbitration (1985) (‘Model Law’)
and the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (‘SCC Rules'). Despite the
fact that this is a comparison of a template national law (the Model Law) with a set of institutional rules (the SCC Rules),
this paper will show that the procedural results of the Model Law and the SCC Rules are similar: both the Model Law
and the SCC Rules confer a high degree of party autonomy, limit state court intervention and create rules consistent with
the modern practice of international commercial arbitration. This paper will elucidate these similarities. It will also
identify those areas in which the Model Law and the SCC Rules diverge.

*204 2 ARBITRABILITY

The subject matter of a dispute must be arbitrable in order for legitimate arbitration to take place. Arbitrability is de-
termined by the laws of the seat of arbitration (i.e. the lex arbitri). In most developed arbitral jurisdictions it is accepted
that a pro-arbitrability approach should be taken when determining whether or not a matter is capable of settlement by ar-
bitration. The pro-arbitrability approach is sometimes referred to as the ‘Mitsubishi Doctrine’ after the United States Su-
preme Court decision in Mitsubishi Motors Corp v Soler Chrysler Plymouth Inc. [FN1] The Model Law expressly states
that it applies to ‘international commercial arbitration.’ [FN2] Article 7 states that ‘the parties may agree to arbitrate all
or certain disputes which have arisen or which may arise between parties in respect of a defined legal relationship,
whether contractual or not’ (emphasis added).

This ‘contracts and more’ drafting demonstrates the force of the Mitsubishi Doctrine in the Model Law. In contrast to
the Model Law, the SCC Rules do not explicitly deal with arbitrability. However, they do include a model arbitration
clause which provides some indication as to the SCC view of which matters are capable of settlement by arbitration. The
SCC model clause reads as follows:

Any dispute, controversy or claim arising out of or in connection with this contract, or the breach, termina-
tion or invalidity thereof, shall be finally settled by arbitration in accordance with the Arbitration Rules of the Ar-
bitration Institute of the Stockholm Chamber of Commerce [...].
‘Dispute’ is not defined in either instrument, but it would seem safe to say that any controversy or disagreement re-
garding obligations under a contract would qualify as a dispute. Arbitrability is more limited under SCC Rules, which
prima facie only contemplate contractual disputes. In proceedings where parties have chosen the SCC Rules as the gov-
erning procedural rules, but the seat of arbitration is a Model Law state, the Model Law will supplement the SCC Rules.
It follows that, in an SCC Rules arbitration conducted in a Model Law seat, the broad approach to arbitrability preferred
in Mitsubishi (and visible in Art. 7 of the Model Law) will likely inform the SCC Rules. The effect of the pro-ar-
bitrability approach taken by the Model Law is that ‘most commercial disputes are arbitrable under the laws of most
countries.’ [FN3]

*205 3 ARBITRATION AGREEMENT

3.1 IMPORTANCE

It is trite law that arbitration is based on contract. There must be a valid arbitration agreement for arbitration to take
place. [FN4] According to Redfern and Hunter, ‘An agreement by the parties to submit to arbitration any dispute or dif-
ference between them is the foundation stone of modern international commercial arbitration.’ [FN5]

The arbitration agreement proves consent to submit the dispute to arbitration, establishes the jurisdiction and author-

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ity of the arbitral tribunal, and functions as the source of power of the arbitrators. Both the Model Law and the SCC
Rules have provisions concerning the form and validity of valid arbitration agreements.

3.2 FORM AND CONTENT

In enacting the Model Law, a state may choose to adopt either Option One or Option Two of Art. 7. Both options
define the arbitration agreement as: ‘an agreement by the parties to submit to arbitration all or certain disputes which
have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.’

The Model Law requires that the arbitration agreement evidence the parties' consent to arbitration, but gives no guid-
ance as to content. In contrast, the SCC Rules do not include a definition of an arbitration agreement but do provide a
model arbitration clause which sets out the recommended content: the number of arbitrators, the seat of arbitration, lan-
guage to be used in the arbitral proceedings and the governing substantive law. Parties wishing to settle any disputes in
accordance with the SCC Rules must make an express election in favour of the SCC Rules in their arbitration agreement.

Model Law Option One focuses on the form of the arbitration agreement, and provides that the agreement must be in
writing. [FN6] The Model Law sets out various ways in which the writing requirement can be satisfied. [FN7] The stated
objective of UNCITRAL in drafting Option One was to accommodate modern commercial practice. [FN8] However,
there is a view that in Option One ‘there has in effect been a *206 triumph of substance over form’. [FN9] This is sup-
ported by the decision in Oonc Lines Ltd v Sino American Trade Advancement Co Ltd, [FN10] where the Hong Kong Su-
preme Court held that the form in which the arbitration agreement is recorded is immaterial as long as there is some writ-
ten evidence of the agreement. Option Two of the Model Law supports this as it provides no form requirements at all,
leaving it to the arbitral tribunal to decide on the validity of the agreement.

Like the Model Law, the SCC Rules also do not stipulate a form requirement. Article 2(iv) provides that a party re-
questing arbitration must provide the SCC Institute with ‘a copy or description of the arbitration agreement or clause un-
der which the dispute is to be settled.’ The use of the word ‘copy’ in the SCC Rules Art. 2(iv) implies that there is a writ-
ten requirement, but the use of the word ‘description’ implies that an arbitration agreement made orally, but later reduced
to writing, may be a valid arbitration agreement under the SCC Rules. [FN11]

An arbitration agreement that was not made in writing is more likely to be enforced by a tribunal sitting under the
SCC Rules (or under an Article 7/Option Two version of the Model Law) than by a tribunal following an Article
7/Option One enactment of the UNCITRAL template.

3.3 DOCTRINE OF SEPARABILITY

The doctrine of separability provides that where an arbitration agreement takes the form of a clause in a contract, and
the validity of the broader contract is contested, the arbitration clause will be severable from the main contract. [FN12]
The arbitration agreement will not automatically be rendered invalid on account of the invalidity of the main contract.
[FN13] The arbitration clause must be directly impeached. The most recent superior court confirmation of the doctrine of
separability is Fiona Trust & Holding Corporation & Ors v Yuri Privalov and Ors. [FN14] In some jurisdictions, an ar-
bitration clause may even survive where the main contract is deemed to be void ab initio. [FN15]

*207 ‘The Doctrine of Separability is embedded in most modern arbitration laws.’ [FN16] The Model Law expressly
states that ‘a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of
the arbitration clause.’ [FN17] Kaplan J of the High Court of Hong Kong stated in Fung Sang Trading Ltd v Kai Sun Sea

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Products and Food Co Ltd: [FN18] ‘Article 16(1) enshrines the Doctrine of Separability which English law has partially
recognised since Heyman v. Darwins Ltd’. [FN19]

The SCC Rules do not expressly provide for the doctrine of separability. However, the Supreme Court of Sweden has
held that for an arbitration agreement to be unenforceable, the ground upon which the main contract is unenforceable
must also apply to the arbitration agreement. In AB Norköpings Trikafabrik v AB Per Persson, [FN20] the Supreme Court
of Sweden held fraud and unconscionability in making the main contract had no affect on the validity of the arbitration
agreement. The Court expressed the same view again in 1976 in Hermansson v AB Asfalbelaggningar [FN21] where the
parties' failure to agree on the contents of the main contract did not affect the validity of the arbitration agreement.
[FN22] It is thus widely accepted that Swedish Law contains a doctrine of separability. [FN23] It would seem probable
that the doctrine of separability is implied in the SCC Rules.

3.4 LAW APPLICABLE TO THE ARBITRATION AGREEMENT

Neither the Model Law nor the SCC Rules designate the law applicable to the arbitration agreement. As a result,
questions often arise as to which law governs the arbitration agreement. It is generally accepted that in the absence of a
designation by the parties, the law chosen by the parties to govern the merits of the dispute will also apply to the arbitra-
tion agreement. [FN24] Failing designation of the law governing the merits, the tribunal may either apply the substantive
law of the *208 seat, [FN25] or use the conflict of laws rules of the seat to determine the law governing the validity of
the arbitration agreement. [FN26]

4 JURISDICTION

In the absence of a valid arbitration agreement the arbitral tribunal will not have jurisdiction. Kompetenz-Kompetenz
is the doctrine under which the arbitral tribunal has the power to rule on its own jurisdiction. The Model Law expressly
provides for this doctrine in Art. 16(1) where it states that ‘the arbitral tribunal may rule on its own jurisdiction.’ The
power conferred upon the tribunal includes the power to rule on ‘any objections with respect to the existence or validity
of the arbitration agreement.’ [FN27] Article 16(2) provides that a plea that the tribunal lacks jurisdiction must be raised
no later than the submission of the Statement of Defence.

The SCC Rules adopt a slightly different approach. Article 9(i) of the SCC Rules provides that the Board of Directors
of the SCC can decide whether the Institute manifestly lacks jurisdiction. [FN28] Article 10(i) states that, in cases where
the Board has decided that the SCC lacks jurisdiction, the Board can dismiss the case. Either way, res judicata lies
against the Board's decision. The result of these provisions of the SCC Rules is that, unlike an ad hoc tribunal exercising
true Kompetenz-Kompetenz, SCC tribunals do not necessarily get the opportunity to rule on their own jurisdiction. The
SCC Institute only has the power to make a prima facie ruling on jurisdiction, for example in cases where the arbitration
agreement does not refer to the SCC Rules [FN29] or where a party to the dispute is not named in the arbitration agree-
ment. [FN30] While the terminology used in the English translation of Art. 9(i) of the SCC Rules has changed over the
years, the threshold test (indicated above) has remained the same. This argument is based on the fact that the Swedish
term used in Art. 9(i) (uppenbart) has remained unchanged. [FN31]

*209 4.1 EXAMPLE: SCC CASE 130/2001

In SCC Case 130/2001 the claimant submitted a request for arbitration under the SCC Rules. The wording of the ar-
bitration clause was ambiguous. On the claimant's request, the SCC Institute asked the respondent if it had agreed to sub-

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mit any disputes to arbitration under the SCC Rules. The respondent replied that the wording of the arbitration clause
provoked many legal questions and that any communications between itself and the SCC Institute were neither a direct
nor indirect recognition of the arbitral tribunal's jurisdiction. The respondent continued to appoint an arbitrator. In a sub-
sequent letter the respondent stated that it could not go to arbitration under the SCC Rules as the arbitration agreement
did not provide for this. The SCC Institute ruled that the arbitral tribunal lacked jurisdiction and dismissed the case. The
claimant objected to this decision. It argued that the arbitration agreement provided for arbitration conducted by the ar-
bitration institute in Stockholm. As far as it was aware there was no other arbitration institute other than the SCC Insti-
tute in Stockholm. The claim was dismissed. The Board concluded that the arbitration agreement was an ad hoc arbitra-
tion clause, with the President of the Stockholm Chamber of Commerce acting as the appointing authority. [FN32]

In cases where there is no manifest lack of jurisdiction, the SCC Institute will refer the matter to arbitration and the
arbitral tribunal will have the power to rule on its own jurisdiction. [FN33]

4.2 EXAMPLE: SCC CASE 23/2002

In SCC Case 23/2002 [FN34] the respondent argued that there should be no arbitration as the arbitration agreement
was not duly executed and therefore was unenforceable against the respondent. The SCC Institute ruled that there was no
clear lack of jurisdiction and so referred the case on to the arbitral tribunal.

Under both the Model Law and the SCC Rules, an objection can be raised in relation to jurisdiction no later than the
statement of defence. [FN35] Under the SCC Rules, a failure to raise any objections concerning the existence or validity
of the arbitration agreement in the answer will not prevent the respondent from raising such a plea at any time up to and
including the submission of the statement of defence. [FN36] This provision is supported by SCC Case 20/1999 in which
it was said that: ‘it is generally considered that failure to raise a plea of non-competence in the *210 answer to the re-
quest for arbitration as provided in Art 11 (1988 SCC Rules) does not forfeit the right to contest jurisdiction.’ [FN37]

It must also be noted that the SCC Rules differ from those of the Model Law in that, under the SCC Rules, the Board
has the power to rule on the relevant tribunal's jurisdiction sua sponte. [FN38] A tribunal convened under the Model Law
does not have the power to raise the issue of jurisdiction on its own initiative.

It is clear, therefore, that under both the Model Law and the SCC Rules the tribunal has the power to rule on its own
jurisdiction. Under the SCC Rules, whether or not the tribunal actually has the opportunity to exercise Kompetenz-Kom-
petenz depends on whether the Board intervenes. The Model Law may be seen as true ad hoc Kompetenz-Kompetenz,
whilst the involvement of the Board under the SCC Rules gives the doctrine an institutional colour. The fact that the
Board can intervene in circumstances of manifest lack of jurisdiction, and even raise the issue sua sponte, is an advant-
age of arbitration under the SCC Rules. It saves time, ensures the impartiality and independence of those determining jur-
isdiction (i.e. the Board, as opposed to the arbitrators, who may be motivated to proceed for other reasons), and promotes
the efficiency of the arbitral process.

5 COMPOSITION OF THE ARBITRAL TRIBUNAL

As a general rule, a decision on the number of arbitrators must be made before any arbitrators are appointed. Under
both the Model Law and the SCC Rules, the parties are free to agree on the number of arbitrators that will hear their dis-
pute. [FN39] Failing such an agreement both the Model Law and the SCC Rules dictate that the number of arbitrators
shall be three. [FN40] The SCC Rules go further in that they allow the appointing authority (The Board) to reduce the

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number to one in appropriate circumstances. In making this decision the Board shall have regard to the complexity of the
case, the amount in dispute and other relevant circumstances. [FN41]

The appointment process can begin once the number of arbitrators has been decided. As with the number of arbitrat-
ors, the parties are free to tailor the appointment process. [FN42] However, both the Model Law and the SCC Rules des-
ignate an appointment process for cases where the parties fail to agree. [FN43] In an arbitration to be conducted by a sole
arbitrator, the parties are free to agree on an *211 arbitrator [FN44] under both the Model Law and the SCC Rules. Fail-
ing such agreement, the appointing authority (The Board under the SCC Rules; the national court or other authority as
specified in Art. 6 of the Model Law) is to appoint the arbitrator. [FN45]

Where the tribunal is to consist of three arbitrators both the Model Law and the SCC Rules allow each party to ap-
point one arbitrator. [FN46] The Chairperson (or third arbitrator) is appointed by a different process. The Model Law
provides that the arbitrators chosen by the parties will appoint a Chairman together, [FN47] while the SCC Rules provide
that the Board will make the appointment. [FN48] The Model Law provides that the appointing authority (under Art. 6 of
the Model Law) will appoint the arbitrator where an institution (for example, the SCC) has failed to perform its appoint-
ing functions. In any appointment made by the appointing authority under both the Model Law and the SCC Rules there
are certain considerations that must be taken into account. [FN49]

The parties may challenge the appointed arbitrators on certain grounds. Both the Model Law and the SCC Rules al-
low the challenge of an arbitrator where there are justifiable doubts as to their impartiality and independence, and where
the arbitrator does not have the qualifications agreed to by the parties. [FN50] The Model Law also allows challenge in
cases where the arbitrator becomes unable to perform his functions or for other reasons fails to act. [FN51] Where a party
wishes to challenge an arbitrator appointed by him, or in whose appointment he took part, he may only do so for reasons
of which he became aware after the appointment was made. [FN52]

Consistent with party autonomy, the Model Law allows parties to agree as to the process by which arbitrators are to
be challenged. [FN53] Failing this, the party objecting has 15 days, from when they became aware of the constitution of
the panel or the relevant circumstances, in which to submit a written statement outlining reasons for the objection to the
tribunal. The objection process used under the SCC Rules only differs in that the statement is to be submitted to the
Board. [FN54] If the other *212 party agrees to the challenge then the arbitrator shall be removed. [FN55] In other cases,
under the Model Law, the tribunal is to determine the challenge. [FN56] If the challenge is unsuccessful the challenging
party has 30 days to request a decision from the appointing authority. [FN57] Under the SCC rules, if the challenge is not
agreed by the parties, the Board shall determine the dispute. [FN58]

Another arbitrator may have to be appointed if an arbitrator resigns or is removed. The Model Law allows the pro-
ceedings to continue, and an award to be made while this takes place. [FN59] It also dictates that the replacement arbit-
rator is to be appointed according to the same process by which the original arbitrator was appointed. [FN60] The SCC
Rules provide that if the arbitrator was appointed by a party then that party shall again appoint an arbitrator unless the
Board deems otherwise. [FN61] If a replacement arbitrator is not appointed by the relevant party, the Board will make an
appointment. In arbitrations where the tribunal consists of three or more arbitrators, the Board may decide that the arbit-
ration is to continue without further appointment. [FN62]

Whilst there are differences in the way that the Model Law and the SCC Rules deal with the creation of the arbitral
tribunal, they are minor. The principal difference is that the SCC Rules take the decision on challenge of an arbitrator out
of the tribunal's hands, placing it with the Board.

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6 PROCEDURAL FAIRNESS

Procedural fairness [FN63] is a fundamental aspect of international arbitration, not least because it encourages parties
to have confidence in the arbitral process. Provisions of national arbitration laws that concern procedural fairness are
generally treated as mandatory. The main example in both the Model Law and the SCC Rules is the requirement that
parties must be treated equally. [FN64] The principle of equality is supported by the requirement that arbitrators must be
impartial and independent. [FN65] The SCC Rules adopt a direct approach stating that ‘every arbitrator must be *213 im-
partial and independent,’ [FN66] whereas the Model Law adopts an indirect approach, providing that a party may chal-
lenge an arbitrator if circumstances exist which give rise to justifiable doubts as to their impartiality and independence.
[FN67] To ensure arbitrators are impartial and independent, the SCC Rules and the Model Law require both potential ar-
bitrators to disclose any circumstances which may give rise to justifiable doubts as to their impartiality and independ-
ence, [FN68] and appointed arbitrators to immediately inform the parties if any such circumstances arise during the pro-
ceedings. [FN69] The SCC Rules go a step further by providing that, once appointed, an arbitrator must submit to the
Secretariat a signed statement disclosing any circumstances which may give rise to justifiable doubts as to the arbitrator's
impartiality and independence, a copy of which is sent to both parties. [FN70] In this area the SCC Rules are more dili-
gent than the Model Law.

7 PARTY AUTONOMY

It is a well established rule of customary commercial law that private parties are free to determine the manner in
which their arbitration will be conducted. This is the doctrine of party autonomy. It can be found in both the Model Law
and the SCC Rules. Provisions of these laws providing for the doctrine include the words ‘unless otherwise agreed by the
parties' or ‘the parties are free to agree’, or a variation thereof. The following paragraphs compare the way in which pro-
ceedings are conducted under the Model Law and the SCC Rules for the purpose of illustrating variation in the degree of
party autonomy afforded by each instrument.

8 PROCEEDINGS BEFORE THE ARBITRAL TRIBUNAL

8.1 GOVERNING LAW

Under the Model Law and the SCC Rules the parties are free to agree upon the law or laws applicable to the merits of
their dispute. [FN71] In the absence of a choice of law clause, the arbitral tribunal is entitled to select any municipal sys-
tem or rules of law upon which the parties themselves might have agreed had they made this decision. [FN72] The Model
Law limits this discretion by providing that the tribunal will apply the conflict of laws rules that it deems appropriate in
determining the law applicable to the merits. [FN73] The Model Law further requires that the tribunal will *214 decide
the law applicable to the merits in accordance with the terms of the contract and usages of the trade applicable to the
transaction. [FN74] The expression ‘usages of trade’ is often read as a reference to lex mercatoria. The Model Law em-
powers the tribunal to fill gaps of the contract with principles of transnational customary commercial law.

The SCC Rules appear to give the tribunal a wider discretion under Art. 22(i), allowing the tribunal to apply ‘the law
or rules of law which it considers to be most appropriate.’ The SCC Rules require that the tribunal must decide in the
spirit of the rules. [FN75] The practical difference between the provisions of the Model Law and the SCC Rules is prob-
ably minimal. Both give the tribunal considerable scope in determining the law applicable to the merits of the dispute.
[FN76] In deciding what laws to apply, the tribunal will only decide ex aequo et bono (or as amiable compositeur) if ex-

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pressly empowered to do so by the parties. [FN77]

8.2 SEAT OF ARBITRATION

The ‘seat’ is the jurisdictional location of the arbitral tribunal; the point at which the arbitral process connects with a
body of municipal law. It may connect fully (in a ‘straight clause’ where the arbitration law of a state is chosen as the
procedural law of the arbitration) or partially (in a ‘split clause’ where the seat is chosen alongside a specification of an-
other body of procedural rules for the arbitration). When parties designate a seat of arbitration, they select the lex arbitri
of a country applicable to their dispute. The procedural rules and the lex arbitri chosen by the parties may be of the same
country, entirely different states of origin.

8.2.1 EXAMPLE: ‘STRAIGHT CLAUSE’

‘Any dispute or controversy arising out of or in connection with this contract will be determined by arbitration in
Stockholm.’ This straight clause selects Stockholm as the seat, and by the absence of any contrary election, incorporates
the Swedish Arbitration Act (1999) as a lex arbitri. If a body of rules other than the arbitration laws of the seat are chosen
then the lex arbitri still operates in that its mandatory provisions must be obeyed over those of any designated procedural
rules.

8.2.1 EXAMPLE: ‘SPLIT CLAUSE’

Any dispute or controversy arising out of or in connection with this contract will be determined by arbitration
in accordance with the *215 Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Com-
merce. The seat of arbitration will be Hong Kong.
In the above example, the mandatory provisions of Hong Kong law (the Model Law) will override any inconsistent
provisions of the SCC Rules. Both Model Law and the SCC Rules give parties freedom to choose the seat of arbitration.
[FN78] Failure by the parties to decide on a seat of arbitration will lead, under the Model Law, [FN79] to the arbitral
tribunal, and under SCC Rules [FN80] to the Board making that determination. Both laws recognise that the seat of arbit-
ration is a legal concept and expressly state that the arbitral tribunal may meet at any place it sees fit. [FN81] It is inter-
esting to note, however, that the Stockholm Chamber of Commerce changed the wording of their rules in 2007 from
‘place’ to ‘seat’. This change was made in response to the decision of the Svea Court of Appeal in Titan v Alcatel,
[FN82] where the Court held that if the agreed place of arbitration is Sweden then the proceedings must, to a certain ex-
tent, be held in Sweden. Critics of Titan have responded that the seat of arbitration is a legal concept, and so designation
of Sweden as the seat of arbitration should not prevent the proceedings taking place elsewhere. [FN83]

8.3 LANGUAGE

Both the Model Law and the SCC Rules provide that the parties are free to determine the language in which the pro-
ceedings will be conducted and failing such an agreement the arbitral tribunal shall decide on the language to be used.
[FN84] Article 22(2) of the Model Law and Art. 21(2) of the SCC Rules both state that the arbitral tribunal may order
that any documents not in the selected language be accompanied by a transcript into that language. The wording of these
provisions of the Model Law and the SCC Rules is identical.

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8.4 DATE OF COMMENCEMENT

Neither Model Law nor the SCC Rules provide the parties with the autonomy to decide on the date on which pro-
ceedings commence. The Model Law provides that proceedings commence on the date on which a request for the dispute
to be referred to arbitration is received by the respondent. [FN85] The SCC Rules however *216 state that the proceed-
ings commence on the date on which the dispute is referred to the arbitral tribunal by the SCC Institute. [FN86]

8.5 STATEMENTS OF CLAIM AND DEFENCE

Both the Model Law and the SCC Rules provide that the claimant must submit a statement of claim. The Model Law
states that failure by the claimant to submit a statement of claim will constitute default unless otherwise agreed by the
parties. [FN87] Under the SCC Rules, the claimant will be in default if it fails to submit a statement of claim without
showing good cause, and provided that the respondent has not filed a counterclaim. [FN88] Under both the Model Law
and the SCC Rules, the respondent should submit a statement of defence [FN89] but failure to do so will not prevent the
proceedings from continuing. [FN90] This provision is subject, under the Model Law, to any agreement between the
parties. Under the SCC Rules, the arbitral tribunal has the power to terminate proceedings if the respondent does not sub-
mit its statement of defence. [FN91]

The SCC Rules set out that the statement of claim must include:

(a) a statement of facts; [FN92]

(b) the relief or remedy sought; [FN93] and
(c) copies of any documents which the claimant is relying upon. [FN94]
The Model Law contains a similar provision although it allows the claimant freedom not to include the documents
upon which it is relying in its statement of claim. [FN95] The SCC Rules also require that the statement of defence in-
clude:

(a) a statement whether, and to what extent the Respondent admits or denies the relief sought by the claimant;
[FN96]
(b) any objections to the existence or validity of the arbitration agreement; [FN97]
(c) circumstances on which the respondent is relying; [FN98]
*217 (d) any counterclaims or set offs; [FN99] and
(e) copies of the documents relied upon. [FN100]
In comparison, the Model Law simply requires that in the statement of defence the respondent outline its defence in
relation to the particulars set out in the statement of claim. [FN101]

Under the Model Law, the parties are free to agree on the period of time in which the statements must be submitted.
[FN102] The Model Law also allows the arbitral tribunal to make this determination, yet the SCC Rules state that the ar-
bitral tribunal shall make the determination thus under the SCC Rules the parties have no control over the time frame.
[FN103] Further, both the Model Law and the SCC Rules allow parties to amend their statements of claim or defence.
The Model Law states that this is subject to any agreement between the parties. [FN104] The SCC Rules allow the arbit-
ral tribunal to decide requests for leave to amend pleadings. [FN105]

The parties have more autonomy in relation to the statements of claim and Defence under the Model Law than under
the SCC Rules.

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8.6 ORAL HEARINGS

Both the Model Law and the SCC Rules contemplate desk arbitration, or ‘arbitration on the papers'. Article 24 of the
Model Law provides that parties are free to agree on whether or not oral hearings will be held. The arbitral tribunal will
hold hearings if so requested by the parties, or if the tribunal itself deems it appropriate. Article 27 of the SCC Rules is
essentially the same, but it does not afford party autonomy to the parties. Both the Model Law and the SCC Rules de-
mand procedural fairness in that it is mandatory that each party is given reasonable notice of the hearing. [FN106] The
SCC Rules also expressly state that hearings will be held in private, however this is not mandatory. [FN107]

8.7 EVIDENCE AND WITNESSES

The rules of evidence applicable to state court adjudication do not de jure apply to arbitration. The SCC Rules
provide some guidance as to the taking of evidence but the Model Law is limited. The SCC Rules state that the
‘admissibility, relevance, materiality and weight of evidence shall be for the arbitral tribunal to *218 determine.’
[FN108] This is a mandatory provision that has no equivalent in the Model Law. Further, under the SCC Rules, the
tribunal may require a party to identify the documentary evidence on which it intends to rely. [FN109] At the request of
one party, the tribunal may also order the other party to produce any documents or other evidence which may be relevant
to the outcome of the case. [FN110] The Model Law only requires that the parties be given sufficient advance notice of
the inspection of goods and/or documents, [FN111] and that any expert report or evidentiary documents must be commu-
nicated to the parties. [FN112] The Model Law also provides that a court can assist the arbitral tribunal in taking evid-
ence if so requested by the arbitral tribunal or by a party with the approval of the tribunal. [FN113] A court which assists
in taking evidence will do so according to its own rules on taking evidence. [FN114] An example of court assistance is
the issuing of a subpoena.

Both laws allow for the appointment of an expert to give evidence however this is subject to agreement between the
parties. [FN115] Consistent with the tenets of procedural fairness, both the Model Law and the SCC Rules allow parties
to participate in an oral hearing to question the expert witness, and to present their own expert witnesses to testify on
points at issue. In addition, the SCC Rules provide that the arbitral tribunal will deliver a copy of the report by the expert
witness to all parties, and give them an opportunity to submit written comments on the report. [FN116]

Article 28 of the SCC Rules also provides that before the hearing, the arbitral tribunal may request the parties to
identify the witnesses or experts they intend to call, and specify the circumstances they intend to be proved by the testi-
mony, which may be submitted as a signed statement. [FN117] Witnesses and experts will be required to attend an oral
hearing unless the parties have agreed otherwise. [FN118]

8.8 WAIVER

The provisions set out in relation to waiver under the Model Law and the SCC Rules are identical. A party that
knows that any provision of the law has not been *219 complied with, yet fails to raise an objection without delay, is said
to have waived the right to object. [FN119]

9 COURT INTERVENTION

The Model Law allows a court or other authority to intervene in certain circumstances. [FN120] These are provided
for in the provisions of the Model Law. [FN121] Examples of legitimate state court involvement are when the court is

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acting as an appointing authority, deciding a challenge to an arbitrator, or hearing an application for vacatur. The SCC
Rules do not refer to any intervention by a court. The likely reason for this is that, because they necessarily function as a
supplement to a lex arbitri, they do not need to create rules of curial supervision. All but four states [FN122] claim a de-
gree of control over arbitration proceedings conducted (or deemed to be conducted) within their boundaries in order to
maintain minimum standards of both justice and procedural fairness: [FN123]

there is virtually no body, tribunal, authority or individual in this country whose acts or decisions give rise to
binding legal consequences for others, but who are altogether immune from judicial review in the event of improp-
er conduct, breaches of the principles of natural justice, or decisions which clearly transcend any standard of ob-
jective reasonableness. [FN124]
Despite the lack of reference to court supervision in the SCC Rules, the lex arbitri of a state (for example the UN-
CITRAL Model Law) will nearly always give power to the municipal courts to intervene where any of the mandatory
provisions of municipal laws are offended. [FN125]

10 THE AWARD

An award made by a tribunal must be in writing and state the reasons upon which it is made. [FN126] It must include
the date and the seat of arbitration. [FN127] The award shall be signed by all arbitrators and failing that by a majority of
arbitrators providing the reasons are stated. [FN128] The SCC Rules allow the chairperson alone to sign the *220 award
but, again, the reason must be stated. [FN129] Copies of the award must then be delivered to the parties, [FN130] with
the SCC Rules further requiring that a copy is to be delivered to the Board. Both the Model Law and the SCC Rules al-
low the tribunal to record a settlement in the form of an award. [FN131] An award may also be required for other forms
of termination. [FN132]

The Model Law provides limited scope for vacatur (or setting aside) of the award. [FN133] The grounds listed are
the same as those seen in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(1958). The SCC Rules are silent on this matter, but the general supervisory power of municipal courts over arbitral pro-
ceedings has the effect that vacatur can be sought under the law of the seat where the SCC Rules are used.

11 CONCLUSION

For the most part, the Model Law and the SCC Rules are in harmony as procedural instruments. The SCC Rules do
not offend the mandatory provisions of the Model Law; indeed many provisions of the Model Law compliment the SCC
Rules. Arbitrability has been given an example of this compatibility. There are, however, basic structural differences that
flow from the different purposes of the Model Law and the SCC Rules: the Model Law was made for states, the SCC
Rules were made for an institution. While the Model Law allows parties a greater degree of autonomy over proceedings,
the administrative assistance provided by the Board under the SCC Rules must be seen as a significant advantage. SCC
Board supervision and review promotes the efficiency of the arbitral process, which in turn promotes confidence in arbit-
ration as a method of international dispute resolution. An election for SCC Rules-arbitration in a Model Law seat is,
therefore, well advised.

[FNa1]. The authors are law students and members of the Willem C. Vis International Commercial Arbitration Moot
Team at Murdoch University, Perth, Western Australia.

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[FN1]. Mitsubishi v Soler Chrysler-Plymouth (1985) 473 US 614 (anti-trust claims arbitrable); Scherk v Alberto-Culver
(1974) 417 US 50 (securities transactions arbitrable); Compagnie Francaise Techinique d'Etacheite v Dechavanne,
XXY.B.Comm. Arb 656 (Grenoble Ct. App. 1993) (labour dispute arising out of an international labour agreement arbit-
rable).

[FN2]. Model Law Art. 1. The footnote to Art. 1 states that the term ‘commercial’ should be given a wide interpretation
so as to cover matters arising from all relationships of a commercial nature, whether contractual or not.

[FN3]. Kirry, A., ‘Arbitrability: Current Trends in Europe’ (1996) 12 Arbitration International 373.

[FN4]. Born, G., International Commercial Arbitration, 2001, Transnational Publishers and Kluwer Law International at
p. 115 — points to the limited but important cases in which international commercial arbitration can take place without a
specific agreement between the parties to arbitrate.
th
[FN5]. Redfern, A. and Hunter, M., Law and Practice of International Commercial Arbitration (4 ed), 2004, Sweet &
Maxwell, London, at [1-08]; Lew, J. D. M., Mistelis L. A. and Kröll S. M., Comparative International Commercial Ar-
bitration, 2003, Kluwer Law International, Netherlands.

[FN6]. Model Law Art. 7(2).

[FN7]. Model Law Art. 7(3)-(6); Note that Model Law Art. (5) can be said to provide for implied consent, see Redfern,
A. and Hunter, M., supra fn 5 at [3-08].

[FN8]. See Explanatory Note by the UNCITRAL Secretariat on the 1985 Model Law on International Commercial Arbit-
ration as amended in 2006, available at ‹ http://www.uncitral.org›.

[FN9]. Redfern, A. and Hunter, M., supra fn 5 at [3-09].

[FN10]. For a summary see: (1994) Arbitration and Dispute Resolution Law Journal 291 (note that at the time of this de-
cision, UNCITRAL was in the process of changing its written requirements).

[FN11]. Note also that the Swedish Arbitration Act 1999 does not contain any form requirements and thus an oral agree-
ment to arbitrate would be valid under this law. See Stockton, P. R. K., International Commercial Arbitration: The Arbit-
ration Agreement, London, presented at the International Commercial Arbitration Conference 17 September 2004;
Sekolec, J. and Eliasson, N., The UNCITRAL Model Law on Arbitration and the Swedish Arbitration Act: a Comparison
(2006), at p. 10, available at: ‹http://www.sccinstitute.com›.

[FN12]. Prima Paint Corp v Flood & Conklin Manufacturing Co 388 U.S. Supreme Court 1967.

[FN13]. See for example Sojuznefteexport (SNE) v Joc Oil Ltd (1990) XV YBCA 384, 407 et seq (Bermuda Court of Ap-
peal, 7 July 1989).

[FN14]. [2007] EWCA Civ 20 (24 January 2007).

[FN15]. Redfern, A. and Hunter, M., supra fn 5 at [3-63] et seq.

[FN16]. Lew, J. D. M., Mistelis L. A. and Kröll S. M., supra fn 5 at p. 105.

[FN17]. Model Law Art. 16(1).

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[FN18]. 29 October 1991 unreported — available in Rodgers and Launders, ‘Separability — The Indestructible Arbitra-
tion Clause’ (1994) 10(1) Arbitration International 79.

[FN19]. [1942] AC 356.

[FN20]. NJA (1936) p. 521. English Version can be found in Arbitration in Sweden, Stockholm Chamber of Commerce
1984 at p. 24-25.

[FN21]. Ibid, at p. 25.

[FN22]. Samuel, A., ‘Separability in English Law — Should an Arbitration Clause Be Regarded as an Agreement Separ-
ate and Collateral to a Contract in which it is Contained?’ (1986) 3(3) Journal of International Arbitration 95.

[FN23]. Rodgers and Launders, supra fn 18, at p. 79.

[FN24]. Union of India v McDonnell Douglas Corporation [1993] 2 Lloyd's Rep 48; Sonatrach Petroleum Corporation
(BVI) v Ferrell International Ltd [2002] 1 All E.R (Comm); Final Award in ICC Case No. 6379 of 1990, XVII
Y.B.Comm. Arb 212, 215 (1992).

[FN25]. Bulgarian Foreign Trade Bank v Al Trade Finance Inc (2000) Case No T 1881-99, in ICCA Yearbook XXVI
(2001) p291; Judgement of 26 May 1994, XXIII Y.B. Comm. Arb. 754 (Bezirksgericht Affoltern am Albis 1994) (1998).

[FN26]. Note that in some jurisdictions the law applicable to the arbitration agreement under conflict of laws rules has
changed in recent years. For example, under English conflict of laws rules the law applicable to the arbitration agreement
used to be the law applicable to the underlying contract. The modern approach however is to apply the law of the seat to
the arbitration agreement.

[FN27]. Model Law Art. 16(1).

[FN28]. Manifestly usually means ‘on its face’ or ‘visible without the assistance of counsel’.

[FN29]. Magnusson, A. and Larsson, H., ‘Recent Practice of the Arbitration Institute of the Stockholm Chamber of Com-
merce Prima Facie Decisions on Jurisdiction and Challenge of Arbitrators' (2004) 2 Stockholm Arbitration Report; SCC
Case 20/2004 47 at p. 60.

[FN30]. Chang, W. S., ‘A Comparative Survey of the Arbitration Rules of the Arbitration Institute of the Stockholm
Chamber of Commerce and The Arbitration Rules of the China International and Economic Trade Arbitration Commis-
sion’ (1992) 9(4) Journal of International Arbitration 93, at p. 104.

[FN31]. Magnusson, A. and Shaughnessy, P., ‘The 2007 Arbirtation Rules of the Arbitration Institute of the Stockholm
Chamber of Commerce’ (2006) 3 Stockholm Abitration Report, at p. 46.

[FN32]. Magnusson, A. and Larsson, H., supra fn 29, at p. 51.

[FN33]. Ibid at pp. 49-50.

[FN34]. Stockholm Arbitration Reports 2004:2.

[FN35]. Model Law Art. 16(1); SCC Rules Art. 24(2).

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[FN36]. SCC Rules Art. 5(1)(i).

[FN37]. SCC Case 20/1999.

[FN38]. Magnusson, A. and Larsson, H., supra fn 29, at p. 46.

[FN39]. Model Law Art. 10(1); SCC Rules Art. 12.

[FN40]. Model Law Art. 10(2); SCC Rules Art. 12.

[FN41]. SCC Rules Art. 12.

[FN42]. Model Law Art. 11; SCC Rules Art. 13.

[FN43]. Model Law Art. 11(3); SCC Rules Art. 13(1).

[FN44]. Model Law Art. 11(3)(b); SCC Rules Art. 13(2). Note that the SCC Rules dictate a time period of 30 days in
which this is to be done.

[FN45]. Model Law Art. 11(3)(b); SCC Rules Art. 13(2).

[FN46]. Model Law Art. 11(3)(a); SCC Rules Art. 13(3). This provision of the SCC rules also applies to arbitrations with
a panel of greater than three members.

[FN47]. Model Law Art. 11(3)(a).

[FN48]. SCC Rules Art. 13(3).

[FN49]. Model Law Art. 11(5); SCC Rules Arts. 13(5) and (6).

[FN50]. Model Law Art. 12(2); SCC Rules Art 15(1).

[FN51]. Model Law Art. 14(1).

[FN52]. Model Law Art. 12(1); SCC Rules Art 15(1).

[FN53]. Model Law Art. 13(1).

[FN54]. SCC Rules Art. 15(2).

[FN55]. Model Law Art. 13(2); SCC Rules Art. 15(4).

[FN56]. Model Law Art. 13(2).

[FN57]. Model Law Art. 13(3).

[FN58]. SCC Rules Art. 15(4).

[FN59]. Model Law Art. 13(3).

[FN60]. Model Law Art. 15.

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[FN61]. SCC Rules Art. 17(1).

[FN62]. SCC Rules Art. 17(2).

[FN63]. Note that this section of the paper deals only with equal treatment of parties, impartiality and independence. Op-
portunity to be heard will be discussed under the heading ‘Oral Hearings'.

[FN64]. Model Law Art. 18; SCC Rules Art. 19(2).

[FN65]. Lew, J. D. M., Mistelis, L. A. and Kröll, S. M., supra fn 5, points to Art. 6 European Convention on Human
Rights 1950 which grants everyone the fundamental right to a fair hearing by an impartial tribunal in the determination
of rights and liabilities; see also Art. 10 Universal Declaration of Human Rights 1948.

[FN66]. SCC Rules Art. 14(1).

[FN67]. Model Law Art. 12.

[FN68]. Model Law Art. 12; SCC Rules Art. 14(2).

[FN69]. Model Law Art. 12(1); SCC Art. 14(3).

[FN70]. SCC Rules Art. 14(2).

[FN71]. Model Law Art. 28(1); SCC Rules Art. 22(1).

[FN72]. Redfern, A. and Hunter, M., supra fn 5, at [2-84].

[FN73]. Model Law Art. 28(2); Born, G., supra fn 4, at p. 529 recognises that the historic view in most common and
civil law countries was that arbitrators would apply the conflict of laws rules of the arbitral situs. The theory behind this
was that the parties' selection of an arbitral situs constituted an implied choice of law. However the more modern ap-
proach is that ‘international’ conflict of laws rules exist and should be applied, see Award of February 17, 1984, ICC
Case No. 4237 X Y.B Comm. Arb. 52 (1985).

[FN74]. Model Law Art. 28(4).

[FN75]. SCC Rules Art. 47.

[FN76]. Redfern, A. and Hunter, M., fn5, at [2-84].

[FN77]. Model Law Art. 28(2); SCC Rules Art. 22(3).

[FN78]. Model Law Art. 20; SCC Rules Art. 20.

[FN79]. Model Law Art. 20.

[FN80]. SCC Rules Arts. 9 and 20.

[FN81]. Model Law Art. 20(2); SCC Rules Art. 20(2).

[FN82]. Titan v Alcatel Case Number T 1038-05.

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[FN83]. Shaughnessy, P., ‘The Right of the Parties to Determine the Place of International Commercial Arbitration’
(2005) 2 Stockholm Int'l Arb. Rev. 259, at p. 259 et seq.

[FN84]. Model Law Art. 22; SCC Rules Art. 21.

[FN85]. Model Law Art. 21.

[FN86]. SCC Rules Art. 18.

[FN87]. Model Law Art. 25(a).

[FN88]. SCC Rules Art. 30(1).

[FN89]. Model Law Art. 23; SCC Rules Art. 24.

[FN90]. Model Law Art. 25(b); SCC Rules 30(2).

[FN91]. SCC Rules Art. 30(2).

[FN92]. Model Law Art. 23(1); SCC Rules Art. 24(1)(ii).

[FN93]. Model Law Art. 23(1); SCC Rules Art. 24(1)(i).

[FN94]. SCC Rules Art. 24(1)(iii).

[FN95]. Model Law Art. 23(1).

[FN96]. SCC Rules Art. 24(2)(i).

[FN97]. SCC Rules Art. 24(2)(ii).

[FN98]. SCC Rules Art. 24(2)(iii).

[FN99]. SCC Rules Art. 24(2)(iv).

[FN100]. SCC Rules Art. 24(2)(v).

[FN101]. Model Law Art. 23(1).

[FN102]. Ibid.

[FN103]. SCC Rules Arts. 24(1) and (2).

[FN104]. Model Law Art. 23(2).

[FN105]. SCC Rules Art. 25.

[FN106]. Model Law Art. 24(2); SCC Rules Art. 27(2).

[FN107]. SCC Rules Art. 27(3).

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[FN108]. SCC Rules Art. 26(1).

[FN109]. SCC Rules Art. 26(2).

[FN110]. SCC Rules Art. 26(3).

[FN111]. Model Law Art. 24(2).

[FN112]. Model Law Art. 24(3).

[FN113]. Model Law Art. 27.

[FN114]. Ibid.

[FN115]. Model Law Art 26; SCC Rules Art 29(1)

[FN116]. SCC Rules Art 29(2)

[FN117]. SCC Rules Art 28(2)

[FN118]. SCC Rules Art 28(3)

[FN119]. Model Law Art. 4; SCC Rules Art. 31.

[FN120]. Model Law Art. 5.

[FN121]. Model Law Art. 6.

[FN122]. Tunisia, Turkey, Switzerland and Belgium have arbitration laws that allow the parties to exclude state court re-
view by agreement.

[FN123]. Redfern, A. and Hunter M., supra fn 5, at [1-139].

[FN124]. Kerr, M., ‘Arbitration and the Courts, the UNCITRAL Model Law’ 34(1) The International and Comparative
Law Quarterly, 1 at p. 15.

[FN125]. Swiss PIL Act, Ch. 12, Art. V.1(d). Arbitration Act 1996 (UK).

[FN126]. Model Law Art. 31(1) and (2); SCC Rules Art. 36(1).

[FN127]. Model Law Art. 31(3); SCC Rules Art. 36(2).

[FN128]. Model Law Art. 31(1); SCC Rules Art. 36(3).

[FN129]. SCC Rules Art. 36(3).

[FN130]. Model Law Art. 31(4); SCC Rules Art. 36(4).

[FN131]. Model Law Art. 30; SCC Rules Art. 39(1).

[FN132]. Model Law Art. 32; SCC Rules Art. 39(2).

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[FN133]. Model Law Art. 34.

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END OF DOCUMENT

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