A CN.9 207-En

III.
INTERNATIONAL COMMERCIAL ARBITRATION*
Report of the Secretary-General: possible features of a model law on international commercial arbitration
(A/CN.9/207)**
CONTENTS
Paragraphs Paragraphs
INTRODUCTION . 1-8 IV. Arbitral procedure
A. CONCERNS AND PRINCIPLES OF A MODEL LAW ON INTER 1. Place of arbitration ................................ 71-72
2. Arbitral proceedings in general ................. 73-74
NATIONAL COMMERCIAL ARBITRATION
3. Evidence ............................................. 75
I. General concerns and problems ....................... 9-15 4. Experts ............................................... 76
II. General principles and purposes ....................... 16-27 5. Interim measures of protection ................. 77-78
B. IDENTIFICATION OF ISSUES POSSIBLY BE DEALT WITH IN 6. Representation and assistance ................... 79
THE MODEL LAW 7. Default ............................................... 80-81
I. Scope of application ...................................... 28 V. Award
1. "Arbitration" ...................................... 29-30 1. Types of award 82
2. "Commercial"...................................... 31 2. Making of award ................................... 83-85
3. "International" .................................... 32-38 3. Formofaward ..................................... 86-87
II. Arbitration agreement ................................... 39-40 4. Pleas as to arbitrator's jurisdiction ............ 88-89
1. Form, validity and contents ..................... 41-47 5. Law applicable to substance of dispute ....... 90-91
2. Parties to the agreement .......................... 48-54 6. Settlement ........................................... 92
3. Domain of arbitration ............................ 55-57 7. Correction and interpr t t ¡on of award ....... 93
4. Separability of arbitral clause ................... 58 8. Feesandcosts ....................................... 94
5. Effect of the agreement........................... 59-61 9. Delivery and registration of award ............. 95-%
6. Termination ......................................... 62-63 10. Executory force and enforcement of award .. 97-100
III. Arbitrators 11. Publication of award .............................. 101
1. Qualifications ....................................... 64 VI. Means of recourse
2. Challenge ............................................ 65-66 1. Appeal against arbitral award ................... 102-104
3. Number of arbitrators ............................ 67 2. Remedies against leave for enforcement (exe
4. Appointment of arbitrators (and replace quatur) ............................................... 105-106
ment) ................................................. 68-69 3. Settingaside......................................... 107-111
5. LiabUity .............................................. 70 CONCLUSION AND SUGGESTED COURSE OF ACTION .................. 112-114
INTRODUCTION note suggested that the Commission commence work on

a model law on arbitral procedure which could help to
1. At its twelfth session, the United Nations Com overcome most of the problems identified in the above
mission on International Trade Law considered a report study and to reduce the legal obstacles to arbitration.
of the Secretary-General entitled "Study on the ap 2. The Commission decided, at that session, to re
plication and interpretation of the Convention on the quest the Secretary-General
Recognition and Enforcement of Foreign Arbitral
Awards (New York, 1958)" (A/CN.9/168)*** and a note "(a) To prepare an analytical compilation of pro
by the Secretariat on further work in respect of interna visions of national laws pertaining to arbitration
tional commercial arbitration (A/CN.9/ 169).**** 1 The procedure, including a comparison of such laws with
the UNCITRAL Arbitration Rules* and the 1958 Con
* For consideration by the Commission see Report, chapter IV (part vention;
one, A, above).
** 14 May 1981. Referred to in Report, paras. 63, 64 (part one, A, "(b) To prepare, in consultation with interested
above). international organizations, in particular the Asian-
** Yearbook . . . 1979, part two, III, C.
**** Yearbook . . . 1979, part two, III, D. African Legal Consultative Committee and the Inter
1 Report of the United Nations Commission on International Trade national Council for Commercial Arbitration, a
Law on the work of its twelfth session, Official Records of the General
Assembly, Thirty-fourth Session, Supplement No. 17 (A/34/17),
paras. 78-80 (Yearbook . . . 1979, part one, II, A). * Yearbook . . . 1976, part one, II, A, para. 57.
75
76 Yearbook of the United Nations Commission on International Trade Law, 1981, Volume XII
preliminary draft of a model law on arbitral ment on these points should not only help to find the
procedure, taking into account the conclusions most suitable approach in this project but also help to
reached by the Commission, and in particular: define the scope of the future model law, in combination
"(i) That the scope of application of the draft with the directions already decided upon by the Commis
uniform rules should be restricted to inter sion, i.e. to cover only international commercial arbitra
national commercial arbitration; tion and to take into account the provisions of the 1958
Convention and of the UNCITRAL Arbitration Rules
"(H) That the draft uniform law should take into (see decision above, paragraph 2, sub-paragraph (¿»)(i)
account the provisions of the 1958 Conven and (ii)).
tion and of the UNCITRAL Arbitration
Rules; 7. The second part of the report (B) attempts to
identify all those issues possibly to be dealt with in the
"(c) To submit this compilation and the draft to draft model law. It does not merely list the points
the Commission at a future session."2 commonly regulated in arbitration statutes or the
3. At its thirteenth session, the Commission had relevant parts of civil procedure codes. Rather, it focuses
before it a note by the Secretariat entitled "Progress on those issues inclusion of which would appear
report on the preparation of a model law on arbitral pro desirable in view of the suggested purposes and prin
cedure" (A/CN.9/190).3 In this note, the Secretariat set ciples. In particular, it emphasizes matters where dif
forth its initial work and referred to difficulties in ob ficulties have been encountered in international practice.
taining the materials necessary for the preparatory work Thus, reference is made to problems arising out of
on this project. In order to assist the Secretariat in that disparities between national laws or shortcomings of
regard, the Commission decided to invite Governments legal rules or divergent attitudes in different jurisdic
to provide the Secretariat with relevant materials on tions, taking into account criticisms and suggestions
national legislation and case law, and pertinent treatises made by practitioners and scholars. This report is not
where available.4 The General Assembly included a intended, though, to discuss these issues in detail and to
similar appeal to Governments in its resolution 35/51 * of present elaborate proposals since its purpose is merely to
4 December 1980 (paragraph 12 (d)). identify the issues and to state reasons relevant to the
4. The Secretariat is indebted to those Governments decision about their inclusion into the draft model law.
which have already provided it with relevant publica Whether or not all the issues listed will eventually be
tions. Materials of as many States and legal systems as dealt with in the model law, their discussion should
possible are needed in order to obtain complete and provide a clearer idea about the possible scope of such a
current information on the different laws and legal law and about the work and expertise required for its
practice in the field of arbitration. To have accurate and preparation.
up-to-date information becomes particularly crucial 8. It should also be mentioned here that the order
when, at a later stage, specific issues will be discussed in and classification of the issues used in this report does in
detail in order to find widely acceptable solutions. Ac no way indicate what the eventual structure of the model
counts of national laws on the various specific issues law could be like. The order used in part (except I) is
could then assist the Commission or, if it wishes to simply the classification scheme of the national reports
entrust a Working Group with that task, the Working published in the Yearbook Commercial Arbitration. 5
Group in its discussions and preparation of draft pro This sensible scheme has been adopted here in order to
visions. facilitate reference to, and consultation of, these
5. Before that, it seems advisable to discuss and national reports with their wealth of information, on
decide on more general, preliminary issues concerning which the Secretariat relied in preparing this report.6
the principles, scope, and possible contents of a model
law. The present report is designed to assist the Commis
sion in its consideration of such features and the basic 5 Publication of the International Council for Commercial Arbitra
directions it may wish to determine. tion; General Editor: Prof. Pieter Sanders; publ. by Kluwer, Postbox
23, 7400 G A Deventer, Netherlands. In the following footnotes the
6. The first part of the report (A) deals with the Yearbook Commercial Arbitration is referred to as "YCA".
concerns which should be met by the model law and with 6 Reports on the laws of the following States have been published in
volumes I to VI of the Yearbook Commercial Arbitration: Algeria,
the principles which could underlie it. Clarity and agree Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada,
Chile, China, Colombia, Costa Rica, Cuba, Czechoslovakia,
Denmark, Ecuador, Egypt, Finland, France, German Democratic
* Yearbook . . . 1980, part one, II, D. Republic, Germany, Federal Republic of, Greece, Hungary, India,
2 Ibid., para. 81. Indonesia, Iran, Iraq, Israel, Italy, Japan, Kuwait, Libyan Arab
3 Report of the United Nations Commission on International Trade Jamahiriya, Mexico, Mongolia, Netherlands, Nigeria, Norway,
Law on the work of its thirteenth session, Official Records of the Pakistan, Panama, Peru, Poland, Romania, Saudi Arabia, Sweden,
General Assembly, Thirty-fifth Session, Supplement No. 17 Switzerland, South Africa, Union of Soviet Socialist Republics, United
(A/35/17), paras. 114-116 (Yearbook . . . 1980, part one, II, A). Kingdom of Great Britain and Northern Ireland, United States of
4 Ibid., para. 117. America, Venezuela, Yugoslavia.
Part Two. International commercial arbitration 77
A. CONCERNS AND PRINCIPLES OF A MODEL LAW ON second recommendation of the AALCC: "Where an
INTERNATIONAL COMMERCIAL ARBITRATION arbitral award has been rendered under procedures
which operate unfairly against either party, the recogni
I. General concerns and problems tion and enforcement of the award should be refused". 8
9. The ultimate goal of a model law would be to A corrective role in this regard may be played by courts
facilitate international commercial arbitration and to in a country where recognition and enforcement of a
ensure its proper functioning and recognition. Its prac foreign arbitral award is sought as provided for in the
tical value would, in particular, depend on the extent to 1958 New York Convention. But it may also be per
which it provides answers to the manifold problems and formed by mandatory provisions of the lex loci arbitri
difficulties encountered in practice. Thus, in preparing dealing with defects in the procedure, denial of justice,
the model law an attempt should be made to meet the and lack of due process of law.
concerns which have repeatedly been expressed in recent 13. Another source of concern and of possibly un
years, sometimes even labelled as "defects" or "pitfalls" expected legal consequences is the non-mandatory part
in international commercial arbitration. of the applicable law. Although, by definition, such
10. A major complaint in this respect is that the provisions may be derogated from and, thus, the effect
expectations of parties as expressed in their agreements of any undesired rule nullified, parties may not have
on arbitration procedure are often frustrated by con made a contrary stipulation, in particular where they
flicting mandatory provisions of the applicable law. To were not aware of such rule. Also, where parties have not
give only a few examples, such provisions may relate to, agreed on a certain procedural point, yet another con
and be deemed to unduly restrict, the freedom of the cern may arise from the fact that the applicable law does
parties to submit future disputes to arbitration, or the not contain a provision settling this point. The lack of
selection and appointment of arbitrators, or the com such "supplementary" rule may create uncertainty and
petence of the arbitral tribunal to decide on its own controversy detrimental to the smooth functioning of the
competence or to conduct the proceedings as deemed arbitration proceedings.
appropriate taking into account the parties' wishes. 14. The above problems and undesired consequences,
Other such restrictions may relate to the choice of the whether emanating from mandatory or from non-
applicable law, both the law governing the arbitral mandatory provisions or from a lack of relevant pro
procedure and the one applicable to the substance of the visions, may be due to the fact that a given national law
dispute. Supervision and control by courts is another deals only with some aspects of arbitration, or that it is
important feature not always welcomed by parties out-dated and in need of revision, or that it has been
especially if exerted on the merits of the case. drafted to meet the needs of domestic arbitration,
11. These and other restrictive factors set forth in possibly emphasizing local particularities, or that for
detail below (in part B) tend to create the above dis other reasons it is not adequate for modern international
appointment with mandatory provisions of law. It is this arbitration practice. This situation is aggravated by the
concern which, for example, prompted the recommenda fact that the applicable law often bears no substantive
tion of the Asian-African Legal Consultative Committee connexion with the parties or the dispute at hand. Usually
(AALCC) as considered by the Commission at its tenth it is the law of the place of arbitration and this, in fact,
session: "Where the parties have adopted rules for the may be selected simply for reasons of convenience, for
conduct of an arbitration between them, whether the example, because it is the residence of the sole arbitrator
rules are for ad hoc arbitration or for institutional or the chairman of a tribunal.
arbitration, the arbitration proceedings should be con 15. In such cases of a rather fortuitous determination
ducted pursuant to those rules notwithstanding pro of the applicable law parties may be confronted with pro
visions to the contrary in municipal laws and the award visions and procedures with which they are not familiar.
rendered should be recognized and enforced by all The possible adverse effect of that is enhanced by the
Contracting States to the 1958 New York Convention".7 well-known fact that there exist wide disparities among
the national laws on arbitration procedure. Even where
12. However, this suggestion should not be under uniformity has been achieved to a certain extent, for
stood as advocating total freedom of the parties and example, by a widely accepted multilateral convention,
refusal of all mandatory provisions in the field of inter unexpectedly different results may be reached due to
national commercial arbitration. That is clear from the divergent interpretations of its provisions. With regard
to the most important convention, this has been shown
7 Report of the United Nations Commission on International Trade by the study on the application and interpretation of the
Law on the work of its tenth session, Official Records of the General
Assembly, Thirty-second Session, Supplement No. /7(A/32/17), para. 1958 New York Convention submitted to the Commis
39 and annex II, paras. 27-36 (Yearbook . . . 1977, part one, II, A). sion at its twelfth session.9 In addition, there remains a
The recommendation of the AALCC has been reproduced in document
A/CN.9/127 (Yearbook . . . 1977, part two, III), with comments by 8 Ibid.
the Secretariat in A/CN.9/127/Add.l. » A/CN.9/168 (Yearbook . 1979, part two. III, C).
great number of unsettled issues and unanswered or to enforce interim measures of protection or to
questions (to be discussed below in part B) which might provide ultimate resort in case of a deadlock. By estab
create uncertainty and controversy. lishing such a connexion one should also avoid the
problem of a "floating" or "stateless" award which
II. General principles and purposes could arise where not even the courts of the State where
16. From the general concerns expressed above some the award was made confirm (or deny) its binding nature
for lack of jurisdiction or "nationality" of the award. 10
tentative conclusions may be drawn which could serve as
guidelines in the preparation of a model arbitration law. 21. In view of the above, it will be one of the more
It is submitted that, to minimize the indicated dif delicate and complex problems of the preparation of a
ficulties, the following principles and purposes should model law to strike a balance between the interest of the
underlie the model law to be drafted. parties to freely determine the procedure to be followed
17. Probably the most important principle on which and the interests of the legal system expected to give
the model law should be based is the freedom of the recognition and effect thereto. This involves, above all, a
parties in order to facilitate the proper functioning of precise demarcation of the scope of possible intervention
international commercial arbitration according to their and supervision by courts and, in particular, of the sub
expectations. This would allow them to freely submit stantive criteria for reviewing and reasons for setting
their disputes to arbitration and to tailor the "rules of the aside an award. It is submitted that the result of this
game" to their specific needs. It would also enable them endeavour will have a considerable influence on the
to take full advantage of rules and policies geared to success of the whole project. Yet, the task is somewhat
modern international arbitration practice as, for eased by the fact that transnational transactions tend to
example, embodied in the UNCITRAL Arbitration be subject to less strict standards than purely domestic
Rules. transactions. This recent trend can be discerned, for
example, from the increasingly made distinction between
18. To give parties the greatest possible freedom does international public order and domestic public order of a
not mean, however, to leave everything to them by not State where recognition and enforcement of a foreign
regulating it in the model law. Apart from the desir award is sought."
ability of providing "supplementary" rules (see above,
paragraph 13), what is needed is a positive confirmation 22. It is, of course, not only in respect of such sub
or guarantee of their freedom. Thus, the model law stantive standards for review and control that the specific
should provide a "constitutional framework" which characteristics of international commercial arbitration
would recognize the parties' free will and the validity and should be focused at. The needs of modern international
effect of their agreements based thereon. practice and the principles of fairness and equality
should be guiding in the drafting of all the provisions of
19. Yet, as indicated above (paragraph 12), it is not a model law. Implementation of the decision of the Com
suggested to accord absolute priority to the parties' mission "that the draft uniform law should take into
wishes over any provision of the law. Their freedom account the provisions of the 1958 Convention and of the
should be limited by mandatory provisions designed to UNCITRAL Arbitration Rules" (see above, para
prevent or to remedy certain major defects in the pro graph 2) would go a long way towards meeting these
cedure, any instance of denial of justice or violation of ends.
due process. Such restrictions would not be contrary to
the interest of the parties, at least not of the weaker and 23. In order to facilitate the smooth operation of
disadvantaged one in a given case. They would also meet international commercial arbitration, a further drafting
the legitimate interest of the State concerned which could principle could be to strive for a set of rules which would
hardly be expected to issue the above guarantee without be as comprehensive and complete as possible. This
its fundamental ideas of justice being implemented. would meet the above concern (paragraph 13) that lack
of a provision on a certain point may create uncertainty
20. Such fundamental principles as usually found in and controversy. Completeness could also extend to
a State's ordre public could only be neglected if one were matters possibly regulated in other branches of the law
to favour international arbitration proceedings and since their inclusion into the model law would allow to
awards which would be "supra-national" in the sense of adopt uniform answers adapted to the international type
a full detachment from any national law. However, the of arbitration. Thus, one might even consider to include
present report is based on the view that it is desirable, if at least some of the issues not included in the otherwise
not imperative, to envisage a certain link between the fairly extensive 1966 Strasbourg Uniform Law on Arbi
arbitration proceedings, including the award, and a tration: capacity to conclude an arbitration agreement,
national law which would give recognition and effect to
arbitration agreements and awards and would provide 10 Cf. e.g. decision of the Cour d'Appel de Paris of 21 February
1980, 1 re Chambre civile, publ. in Recueil Dalloz Sirey 1980, p. 568,
for adequate assistance by courts, for example, as with a note by Robert.
regards orders to compel arbitration or to call witnesses 11 See A/CN.9/168, para. 46 (Yearbook . . . 1979, part two, III, C).
the qualifications of an arbitrator, counter-claims, the out any divergencies. That is, of course, in the true sense
powers of investigation of an arbitral tribunal, the pro of the word, a cura posterior.
visional execution of arbitral awards, arbitration costs 27. What has to be done first is to work towards a
and arbitrators' fees, the jurisdiction of judicial author clear and complete set of rules establishing fair and
ities called upon to intervene. 12 modern standards of international arbitration which
24. Other issues usefully to be included are those that would be acceptable to the different legal and economic
have given rise to difficulties due to divergent inter systems of the world. For that purpose, an attempt shall
pretations, or gaps, of the 1958 New York Convention as be made now to identify the issues possibly to be dealt
identified in the study of the Secretary-General (A/CN .9/ with in the model law and to mention relevant problems
168).* Thus, clarification could be sought, for example, and reasons.
of the exact meaning of the requirement that the arbitra
tion be "in writing". One could also attempt to reach
agreement on the law applicable to the arbitration agree B. IDENTIFICATION OF ISSUES POSSIBLY BE DEALT WITH
IN THE MODEL LAW
ment. Another question possibly to be answered in the
model law is whether pre-arbitration attachments and
similar measures are compatible with an arbitration I. Scope of application
agreement. To mention yet another point of a long list of 28. As decided by the Commission at its twelfth
items that have given rise to difficulties, one could session, "the scope of application of the draft uniform
envisage a provision to the effect that where parties have rules should be restricted to international commercial
referred to the law of a given State as being applicable to arbitration" (see above, paragraph 2). It seems clear that
the substance of the dispute then this choice of law is this restriction, if finally maintained, will have to be
deemed to refer directly to the substantive law of that stated in the model law. It is less clear, though, whether
State and not to the conflicts rules contained in its the three elements delimiting the scope of application,
private international law. i.e. "arbitration", "commercial" and "international",
25. The principle of striving for completeness should should be defined and, if so, in which way.
be seen in connexion with another idea which would
strengthen the positive effect of assisting lawyers, arbi 1. "Arbitration"
trators and businessmen in their difficult task to find out 29. As to the first element, i.e. "arbitration", it
about the legal rules of a foreign system. And that is to would seem desirable to define that term since it ex
envisage that the law on international commercial arbi presses the "heart of the subject-matter" or activity
tration be accorded priority (as lex specialty over other governed by the model law. Such definition would have
laws except as otherwise stated in the (model) arbitration to cover institutional and ad hoc arbitration. Also, it
law. For the same purpose, one could, for example, would in some way have to indicate that arbitration is a
require the listing of certain points which are often, and dispute settlement procedure outside the court system.
for reasons of substance, regulated in other laws, e.g. Beyond that, however, a major difficulty will be to
any non-arbitrable subject-matters or any persons or distinguish precisely between arbitration as regulated in
bodies lacking the capacity to conclude arbitration agree the model law and those procedures which, sometimes
ments. This would, at least, ensure easy access to the law even labelled arbitration, are similar to arbitration such
although it would not necessarily lead to uniformity since as the Italian "arbitrate irrituale", the Dutch "bindend
States may list different categories of such exclusions. advies"and the German "Schiedsgutachten".
26. As to the desirable uniformity in general, it may 30. While certain common features of these three
be submitted here that a model law is not necessarily less examples of "free arbitration" can be detected (e.g.
conducive to reaching uniform standards than a con determination of questions of fact rather than law and
vention. Apart from any considerations concerning the decision merely binding like a contract provision), these
time-consuming and costly procedures of adopting and procedures are not identical and there are yet other such
ratifying a convention, it is ultimately the quality of the procedures in other legal systems. Thus, it will not be an
contents of the proposed law that determines its accept easy task to draw the line in a sufficiently clear manner.
ability. However, for the sake of uniformity an appeal At the very least, one should envisage an appeal to States
should be envisaged to adopt the law, though a model, in adopting the model law to list any procedure akin to
toto. Another measure of harmonization would be to arbitration but excluded from its scope of application.
later "monitor" the interpretation and application of the
law by publishing relevant court decisions and pointing 2. "Commercial"
* Yearbook . . . 1979, part two, III, C. 31. As to the second element delimiting the scope of
12 See General Considerations, para. 7, of the Explanatory Report
on the European Convention Providing a Uniform Law on Arbitra application, i.e. "commercial", it is doubtful whether
tion, Council of Europe, 1967. that should be defined in the model law. It may be
thought that this term, although not always and in all non-domestic), the above definition may seem to
respects construed in an identical manner, has by now commend itself as an interesting model.
gained a sufficiently clear meaning, at least as a modifier 34. However, for the purposes of the scope of
to arbitration, thus excluding arbitrations of a different application of the model law which is to cover various
nature such as those in labour disputes or family law stages of arbitration (e.g. conclusion of arbitration
matters. Based on the experience with article I, para agreement, arbitral proceedings, setting aside of award,
graph 13 of the 1958 New York Convention, 13 it is recognition and enforcement of award), certain dif
further suggested not to qualify the term along the ficulties should not be overlooked which may arise, in
following lines: "relationships which are considered as particular, when the place of arbitration is used as a
commercial under the national law of the respective distinguishing factor. One difficulty relates to the fact
State". that the question of the applicability of the model law,
based on the non-domestic character of the arbitration,
3. "International" may already be relevant before the arbitration has
32. As to the third element, i.e. "international", it started, e.g. in the context of a referral to arbitration as
would seem necessary, though difficult, to define that envisaged under article II, paragraph 3 of the 1958 New
term since the model law is designed to provide a special York Convention. Uncertainty would then exist if, as is
legal regime for those arbitrations where more than sometimes the case, the arbitration agreement does not
purely domestic interests are involved. There are a specify the place of arbitration but leaves that determina
number of possible criteria to regard an arbitration as tion to the arbitrator. Such an arbitration agreement, if
"international" in the sense of "not purely domestic". concluded between two nationals of State X, would
One such instance would be that at least one of the under the above definition conceivably be treated as a
parties has its place of business in, or is a national of, a domestic one since it "does not provide for arbitration in
State other than the one concerned (hereinafter called a State other than X". If a foreign party is involved, then
X). Another factor could be that the place of arbitration this would be the international connexion bringing it
lies outside State X. Yet other factors may be that the within the scope of the model law. Consequently, one
arbitration agreement (or the contract containing the might consider to solely rely on this criterion, i.e. foreign
arbitration clause) is concluded in a State other than X or place of business or nationality of at least one of the
that the subject-matter of the dispute concerns an area parties.
outside State X (e.g. the market regulated in a distribu 35. This suggestion could also meet the following
tion agreement.). concern: A State (X) may not be willing to apply its
33. The first two criteria are used, for example, in "relaxed" international arbitration provisions to the
the United Kingdom Arbitration Act 1979 which defines, situation where, as would be covered under the above
in section 3(7), definition, two nationals of that State select a foreign
place of arbitration (and could, thus, avoid the more
"domestic arbitration agreement" as an "arbitration restrictive procedural law for domestic cases). On the
agreement which does not provide, expressly or by other hand, the State where the arbitration takes place
implication, for arbitration in a State other than the may have no objection against the application of its
United Kingdom and to which neither "international" arbitration law even if both parties are
"(a) An individual who is a national of, or from the same foreign country. The same may be true
habitually resident in, any State other than the United where in this State a stay of proceedings is sought based
Kingdom, nor on such an arbitration agreement.
"(b) A body corporate which is incorporated in, or 36. There is yet another concern in respect of those
whose central management and control is exercised in, provisions of the model law which would govern the
any State other than the United Kingdom, arbitration proceedings and any setting aside procedures.
"is a party at the time the arbitration agreement is One should expect that these provisions would primarily,
entered into". though not exclusively, apply to those "international"
arbitrations which take place within the boundaries of
It has been observed that, in this definition, the ambit of the State concerned (X). This expectation is based on the
a non-domestic arbitration is drawn very widely in order existing conflicts rules according to which the applicable
to give essentially international arbitrations the full procedural law is normally the law of the place of
benefit of the relaxation introduced by the new legis arbitration, except where another law is validly chosen
lation. 14 In view of this international thrust and of the by the parties. Although the above definition could
technique employed (i.e. to define domestic rather than technically work here since it would not prevent the
13 Cf. A/CN.9/168, para. 11 (Yearbook . . . 1979, part two, III, C).
application of the law to arbitrations in State X as long
14 Schmitthoff, The United Kingdom Arbitration Act 1979, YCA as at least one of the parties is a national of another
V-1980, pp. 231,234. State, the use of the (foreign) place of arbitration as one
of two alternative criteria could be regarded as mis "Article II

leading or as a matter of misplaced emphasis. In fact, the "1. Each Contracting State shall recognize an
place of business (or nationality) of the parties remains agreement in writing under which the parties under
as the decisive factor. take to submit to arbitration all or any differences
37. If, thus, one were to require that the parties are which have arisen or which may arise between them in
from different States, one would certainly exclude purely respect of a defined legal relationship, whether con
domestic arbitrations. This would also include cases tractual or not, concerning a subject-matter capable of
where none of the parties is from the State concerned. settlement by arbitration.
Yet, it may be doubtful whether the law of State X "2. The term 'agreement in writing' shall include
should apply to such "fully non-domestic" cases since an arbitral clause in a contract or an arbitration agree
one might assume that a certain connexion with that ment, signed by the parties or contained in an ex
State should exist. Here, one may well take the position change of letters or telegrams.
that this is not an issue to be dealt with under "scope of
application", the purpose of which is to indicate
generally what type of cases the law is designed to "Article V
regulate. "1. Recognition and enforcement of the award
38. The above examples, to which many could be may be refused, at the request of the party against
added, indicate not only the complexity of the issue at whom it is invoked, only if that party furnishes to the
hand but also the inter-play or interdependence between competent authority where the recognition and en
the scope of application and the pertinent conflicts rules. forcement is sought proof that:
Therefore, the Commission may wish to discuss to what "(a) the parties to the agreement referred to in
extent such considerations should be taken into account article II were, under the law applicable to them, under
when defining the scope of application and it may even some incapacity, or the said agreement is not valid
wish to decide whether it would not be appropriate to under the law to which the parties have subjected it or,
envisage inclusion of some model conflicts rules. What failing any indication thereon, under the law of the
ever the final answer may be, the relevant provisions of country where the award was made; ..."
the 1958 New York Convention would have to be taken For the sake of consistency between major legal texts
into account in order to avoid any conflict and, at least governing international arbitration practice, it would be
with regard to the scope of application, an attempt desirable not to include provisions in the model law
should be made to use the same criterion or criteria for which would be in conflict with any of the above rules.
the various stages of arbitration regulated by the model
law. 1. Form, validity and contents
II. Arbitration agreement
41. It may be considered to adopt in the model law
39. In contrast to court litigation, arbitration pro the requirement that the arbitration agreement be in
ceedings usually take place only if the parties have so writing, as envisaged under article II, paragraph 1 of the
agreed. Therefore, the model law should contain pro 1958 New York Convention. A survey of national laws
visions on this basic agreement. It should be mentioned, reveals that this is the form required under most legal
however, that there are exceptions to this rule where no systems. Where this is not so, it has been reported that,
such agreement is needed since submission to arbitration nevertheless, in practice almost all agreements are con
is by operation of a law. The most prominent example cluded in writing or that oral agreements may not easily
are disputes between enterprises of the member States of be relied on due to strict standards of proof. In some
the Council for Mutual Economic Assistance which, other (Latin American) States written form is dispensed
under the 1972 Moscow Convention or the General Con with only for an agreement to arbitrate future disputes
ditions of Delivery of Goods, 1968 (sections 90 and 91), which, however, is of lesser practical value since at any
are referred to the arbitration courts attached to the rate a formal submission is required there once the
Chambers of Foreign Trade, Commerce or Industry. For dispute has arisen.
the sake of complete information, one might consider to 42. In view of this latter situation, it may be sug
envisage in the model law inclusion of a reference to the gested here already that the model law not retain the
respective exceptions in a given legal system. classic distinction between "compromis" and "clause
40. Returning now to the cases where an agreement is compromissoire". Rather, in conformity with modern
needed, the discussion of what constitutes an arbitration arbitration principles, an arbitration agreement could
agreement, what form and contents should be required, relate to existing or to future disputes, as envisaged
and of other related points to be dealt with in the model under article II, paragraph 1 of the 1958 New York Con
law should be based on the pertinent provisions of the vention. Such undertaking, whether in an arbitral clause
1958 New York Convention: or a separate agreement, constitutes a final and sufficient
commitment by the parties. No additional submission additional criteria (e.g. place of conclusion of agree
would be necessary and, thus, its often strict formalities ment, law governing substance of dispute) would have to
(e.g. public deed, recording in court) would no longer be considered if one were to tackle this controversial
have to be observed. In view of the relaxation under the issue at all in the model law.
systems affected, the above proposal as to written form 46. A related question is what the arbitration agree
could be regarded as an acceptable compromise. ment should contain. As pointed out earlier (paragraph
43. If the requirement of written form were to be 40), the undertaking to submit to arbitration may relate
adopted, it may further be suggested to include in the to existing or to future disputes. It will have to be con
model law a clear and detailed definition of what "in sidered whether the type of dispute should be more
writing" means. Such definition could help to achieve specifically described and whether any other require
uniform interpretation which would be highly desirable ments as to the minimum contents of an arbitration
not only for purposes of the model law itself but also for agreement should be included in the model law. For
other legal texts such as the 1958 New York Convention example, article II, paragraph 1 of the 1958 New York
(article II) or the United Nations Convention on the Convention refers to differences "in respect of a defined
Carriage of Goods by Sea, 1978 (article 22).* One might legal relationship, whether contractual or not, con
even consider to state expressly in the model law that the cerning a subject matter capable of settlement by arbi
definition given there would be applicable to relevant tration".
provisions in other legal texts, too. As to the possible 47. Accordingly, one may also in the model law
shape of such a definition, it may be based on the defini require that the parties specify the relevant contract or
tion set forth in the 1958 New York Convention (article other relationship. On the other hand, the restriction as
II, paragraph 2). However, in view of the difficulties to arbitrability of the subject matter need not be ex
encountered in practice, as reported in the study of the pressed in the arbitration agreement. However, one
Secretary-General (A/CN.9/168, paragraphs 19-26), the should state this limitation in the model law, possibly
definition in the model law should be more precise and together with a listing of non-arbitrable subject matters,
detailed. In particular, it should attempt to tackle these 1.e. exclusions from the domain of arbitration dealt with
problems which relate, for example, to the involvement below (paragraphs 55-56). Another requirement found in
of intermediaries, to the commercial practice of sales some national laws would be that the agreement already
confirmations, or to the use of standard forms or name the arbitrator(s) or at least set forth the appoint
references to general conditions. ment procedure. While parties may be recommended to
44. Turning to the matter of validity of the arbi do so, a strict requirement to that effect does not seem to
tration agreement, it seems doubtful whether the model be warranted. In this context, mention should be made
law should attempt to provide an exhaustive list of of a later suggestion that the model law provide sup
reasons of invalidity. Probably the best approach would plementary rules on the appointment procedure for cases
be to include only those reasons which relate directly to where such procedure has not been agreed upon by the
arbitration and to leave out the other reasons relevant to parties or does not operate as expected (below, para
any agreement or contract (e.g. mistake). An example of graph 69).
the first type is provided in article 3 of the Strasbourg
Uniform Law: "An arbitration agreement shall not be
2. Parties to the agreement
valid if it gives one of the parties thereto a privileged
position with regard to the appointment of the arbitrator 48. In order to provide wide access to arbitration, in
or arbitrators". accordance with a clearly discernible trend in modern
45. The less matters of validity are regulated in the dispute settlement practice, an attempt should be made
model law, the greater would be the need for a provision to allow all (physical or legal) persons to conclude an
determining the law applicable to the validity of the arbitration agreement. The idea of envisaging no restric
arbitration agreement. The rule of the 1958 New York tions in that regard relates, of course, only to the specific
Convention (article V, paragraph 1 (a)) cannot simply be capacity to submit to arbitration but not to the general
adopted. Its first alternative ("the law to which the capacity to conclude agreements (as, e.g. restricted for
parties have subjected it") creates difficulties where the minors). Also, it is not intended to prevent, for example,
parties' freedom of choosing a law is limited and, more a trade association from providing access to its arbi
importantly, the supplementary alternative ("the law of tration facilities exclusively to its members. What is
the country where the award was made") is not sufficient intended, is merely that no category of persons or cor
since, as pointed out earlier (paragraph 33), the issue porations or organs would be per se excluded by law.
may be relevant already at a time when the place of the 49. The attempt to abolish any existing restrictions in
arbitration or the award is not yet determined. Thus, order to grant full access to arbitration may prove to be
difficult with regard to governmental agencies or similar
* Yearbook . . . 1978, pan three, I, B. entities of public law since important State interests are
at stake here, including the competence of internal political and public international law character. 19 Never
organization and division of authority. Nevertheless, the theless, it is suggested not to exclude the issue without
difficulties could possibly be overcome in view of the prior discussion from the preparatory work on the model
specific field of application, i.e. international com law. It may even be possible to find an acceptable
mercial arbitration. As to the commercial aspect of the solution in view of the fact that it would be limited to
transactions concerned, a liberal rule on the capacity to commercial activities of States and its organs which are
arbitrate may be less objectionable since arbitration is a widely perceived, as reflected in most laws,20 not as an
common procedure of dispute settlement in this field and exercise of sovereign power warranting special privileges
this type of activity is not closely connected with the ("acta jure imperil") but as being on equal footing with
State's interest in shaping its policy and conducting its the activities of private corporations or persons ("acta
public affairs as it wishes. As to the international aspect, jure gestionis").
a State may adopt a more liberal attitude with regard to 53. Another encouraging consideration could be
international transactions and disputes than to purely that, since arbitration depends on a commitment to
domestic affairs; such a distinction is, for example, arbitrate, any restrictions as to sovereign immunity
clearly drawn in France. 15 would apply in practice only if a governmental agency
50. In view of the above, one might consider adopt concludes an arbitration agreement. If, in fact, a govern
ing a rule along the lines of article II (1) of the 1961 mental agency or similar body chooses to enter into an
European Convention on International Commercial arbitration agreement, it would seem to be appropriate
Arbitration according to which "legal persons con that it honour its commitment to the other party reason
sidered by the law which is applicable to them as 'legal ably relying thereon.
persons of public law' have the right to conclude valid 54. Therefore, thought may be given to including in
arbitration agreements". Paragraph 2 of that article the model law a provision on some kind of waiver of the
permits a Contracting State "to declare that it limits the plea or defence of sovereign immunity, either an implied
above faculty to such conditions as may be stated in its waiver or, at least, a recommendation to expressly agree
declaration". One could envisage to include in the model not to invoke sovereign immunity. In either case, one
law a similar "reservation" by requesting States to list would have to study in detail the feasibility and the legal
any exclusions if such exclusions are deemed necessary. effects of such approach, both with regard to the arbitra
51. In this context of State participation in arbi tion proceedings proper, including jurisdiction of the
tration, the Commission may wish to consider whether courts to whose control the arbitration is subject, and to
the model law should deal with pertinent aspects of State the recognition and enforcement of the award.
immunity. It may be recalled that one of the recom
mendations of the AALCC, considered by the Commis 3. Domain of arbitration
sion at its tenth session, 16 was the following point:
"Where a governmental agency is a party to a com 55. Most legal systems exclude from the domain of
mercial transaction in which it has entered into an arbi arbitration one or more subject matters, often by estab
tration agreement, it should not be able to invoke lishing exclusive jurisdiction of certain courts. Com
sovereign immunity in respect of an arbitration pursuant mercial subject matters of this kind relate, for example,
to that agreement". 17 As specified by the Sub-Committee to bankruptcy, anti-trust, securities, patents, trade
on Trade Law of the AALCC, the intention of that marks and copyrights. However, as the survey of court
proposal is to prevent a governmental agency which had decisions on the 1958 New York Convention revealed,21
entered into a valid arbitration agreement in a com restrictive national laws are increasingly applied in a
mercial transaction from invoking sovereign immunity, more lenient way to international transactions than to
at all stages of arbitration, including the stage of recogni purely domestic ones or even interpreted as merely
tion and enforcement of the arbitral award. 18 governing domestic affairs.
52. It may be thought that the issue of sovereign 56. It would be in line with this trend and beneficial
immunity in the context of arbitration is but a part of a to the practice of international commercial arbitration if
more general and complex problem having an obviously an attempt were made to limit, to the extent possible, the
number of non-arbitrable subject matters. As to the
15 The Supreme Court decided, on 2 May 1966, that Article 2060 subject matters exclusion of which appears necessary,
Code Civil, according to which neither the State nor public entities may e.g. concerning customs or foreign exchange control
enter into an arbitration agreement, does not apply to international
contracts (Cass. Civ. 1, Dalloz 1966, 575).
16 Report of the United Nations Commission on International Trade
Law on the work of its tenth session, Official Records of the General 19 Cf. reservations expressed with regard to States and Governments
Assembly, Thirty-second Session, Supplement No. 17 (A/32/17), during discussions at the Commission's tenth session, ibid, (foot
annex II, paras. 27-37 (Yearbook . . . 1977, part one, II, A). note 16), para. 33.
17 A/CN.9/127, annex, under 3 (c) (Yearbook... 1977, part 20 Cf. e.g. collection of articles on various national systems in 10
two, III). Neth. Yearb. Int. Law 1979, p. 3 et seq.
18 A/CN.9/127/Add.l, paras. 11, 12. 21 A/CN.9/168, para. 45 (Yearbook . . . 1979, part two, III, C).
regulations, one could envisage to request their listing by parties to arbitration, unless it finds that the said
each State adopting the model law. This would provide agreement is null and void, inoperative or incapable of
easy reference and certainty about that point and, thus, being performed."
be of assistance to foreign lawyers and businessmen. 60. It is submitted that the substance of this pro
57. Another question to be considered in the context vision, for the sake of conformity, should be adopted in
of arbitrability is whether arbitration of a dispute the model law. However, some supplementary pro
relating to a contract may extend to what is often called visions, not in conflict with it, may help to clarify
"filling of gaps". When discussing this controversial matters. For example, one could attempt to specify the
issue, a distinction should be drawn between the true type of the court decision referring parties to arbitration,
filling of gaps, i.e. of points that the parties intended to e.g. stay or dismissal of court proceedings. In this
cover in their agreement but did not do so, intentionally context, one could also consider providing for an order
or not, and the adaptation of contracts due to changed to compel arbitration. Another issue in need of clarifi
circumstances, which were unforeseeable and, thus, cation, as the survey of court decisions revealed,23 is the
could not have been contemplated by the parties when complex situation, not uncommon in international com
concluding the agreement. It will have to be discussed merce, where more than two parties are involved, not all
separately for each of these functions whether arbitrators of whom are bound by arbitration agreements. Another
may perform that task without prior authorization by the issue possibly to be dealt with is up to what stage of the
parties and, if not, whether there should be any limits to court proceedings a party may successfully invoke the
the legal effects of a prior authorization. arbitration agreement.
4. Separability of arbitral clause 61. Yet another clarification relates to the scope of
58. It is suggested that the model law take a clear application dealt with at another place (above, para
stand in favour of separability or autonomy of the arbi graphs 31-38). The value of a clear provision on this
tration clause, as adopted in modern arbitration laws and point becomes apparent if one considers the difficulties
rules.22 This means that an arbitration clause which and disparities caused by the lack of such a provision in
forms part of a contract shall be treated as an agreement the 1958 New York Convention.24 Finally, the model law
independent of the other terms of the contract. This may provide an answer to the question whether attach
independence may become relevant to, and facilitate, a ments or similar court measures of protection are com
ruling of the arbitral tribunal on objections that it has no patible with an arbitration agreement. Again, the lack of
jurisdiction, where those objections relate to the a pertinent provision in the 1958 New York Convention
existence or validity of the arbitration clause. Another has led to divergent court decisions.25 A provision, sup
useful import of separability is that a decision by the posedly in favour of compatibility, could be included
arbitral tribunal that the contract is null and void would here since it concerns also the pre-arbitration stage or it
not entail ipso jure the invalidity of the arbitration may be combined with the provisions governing the arbi
clause. tration proceedings (below, paragraphs 77 and 78).
5. Effect of the agreement 6. Termination

59. The purpose of an arbitration agreement is to
62. It may be considered to specify in the model law
settle any dispute by arbitration, to the exclusion of
certain circumstances under which an arbitration agree
normal court jurisdiction. If one of the parties neverthe
ment would be terminated or would not be terminated.
less submits a claim concerning the matter in dispute to a
Examples, not necessarily to be followed, are provided
court, the other party should be able to successfully
by the 1966 Strasbourg Uniform Law. According to
invoke the arbitration agreement. The question then is
article 10(1), the arbitration agreement shall terminate
whether the court should have any discretion and what
ipso jure, if an arbitrator who has been named in the
points it should examine in deciding whether the parties
agreement dies, or cannot for a reason of law or of fact
should be referred to arbitration. Article 11(3) of the
perform his office, or refuses to accept it, or does not
1958 New York Convention provides the following
carry it out, or if his office is terminated by mutual
answer:
"The court of a Contracting State, when seized of an agreement of the parties. Article 19 regulates the period
action in a matter in respect of which the parties have of time within which the award is to be made and then
made an agreement within the meaning of this article, provides, in paragraph 4, that "where arbitrators are
shall,* at the request of one of the parties, refer the named in the arbitration agreement and the award is not
made within the relevant period, the arbitration agree-
* It may be noted that the word "shall" was erroneously omitted in
the first official publication of the Convention, in United Nations, 23 A/CN.9/168, paras. 27-28 (Yearbook . . . 1979, part two,
Treaty Series, vol. 330, No. 4739 (1959), pp. 38, 40, and is, con III, C).
sequently, missing in a number of reproductions based on that text. 24 Cf. A/CN.9/168, paras. 16-18 (Yearbook . . . 1979, part two,
22 Cf. e.g. article 21, UNCITRAL Arbitration Rules (Yearbook . . . III, C).
1976, part one, II, A, para. 57). 25 A/CN.9/168, para. 29 (Yearbook . . . 1979, part two, HI, C).
ment shall terminate ipso jure, unless the parties have of Arbitration, the Secretary or a special committee of an
agreed otherwise". An example of non-termination is arbitration association, or an appointing authority).
provided by article 11: "Unless the parties have agreed However, it will have to be considered, and expressly
otherwise, neither the arbitration agreement nor the stated in the model law, whether resort to courts should
office of arbitrator shall be terminated by the death of be allowed only if so stipulated in the arbitration agree
one of the parties". ment or whether it should be envisaged, irrespective of
63. Another detailed question possibly to be dealt such stipulation, as a last resort in order to avoid a
with is whether an arbitration agreement is terminated deadlock. Finally, one may consider providing "sup
by a settlement on agreed terms ("accord des parties"), plementary" rules for those cases where parties have not
whereby a distinction may be drawn between agreed regulated the challenge procedure. One might add ancil
settlements in the form of an award and those in the lary rules on disclosure and restrictions to the right to
form of a normal agreement. challenge along the lines of articles 9 and 10 (2) of the
UNCITRAL Arbitration Rules27 and article 12 (2) of the
1966 Strasbourg Uniform Law.28
III. Arbitrators
3. Number of arbitrators
1. Qualifications
67. The number of arbitrators may be thought to be
64. It seems doubtful whether the model law should one of the issues that should be fully left to the parties'
contain any provisions on who may act as an arbitrator. It discretion and agreement. However, one might consider
would be difficult to list certain required qualifications requiring an uneven number as, for example, envisaged
except very general ones which would be of minimal by article 5 (1) and (2) of the 1966 Strasbourg Uniform
practical value. It would also be difficult to agree on Law.29 Yet, while such requirement could enhance the
whether any specific category of persons should be efficiency of arbitration, it may be deemed as an over-
ineligible (e.g. judges); one should be able to agree, protective legislative measure. As to the special feature,
though, that foreigners should not be excluded. 26 If any known in some systems, of a third arbitrator acting as an
rule on eligibility or qualifications were envisaged at all, "umpire" or as a "referee", it is suggested that the
it should indicate to what extent any restriction expressed model law recognize such function if envisaged in an
therein would prevail over any conflicting provision in arbitration agreement but not include it in any "sup
the individual arbitration agreement or the applicable plementary" rules. As a "supplement", one might
standard rules of arbitration institutions or trade associa consider providing for arbitration by three arbitrators if
tions. the parties have failed to agree on a number.
2. Challenge 4. Appointment of arbitrators (and replacement)

65. As regards challenge of arbitrators, the issues to 68. The model law should guarantee the parties' free
be considered are on what grounds an arbitrator may be dom to agree on the appointment procedure, provided
challenged and by what procedure, including any court that equality is ensured (cf. above, paragraph 43). This
involvement. National laws often list in detail the would include the common system of party-arbitration,
grounds for challenge, usually the same as apply to under which each party is to appoint one arbitrator and
judges. The reasons relate to the dispute at hand such as these two party-appointees then appoint the third arbi
a financial interest or previous involvement in the trator.
subject-matter under dispute or a certain relation to one 69. One may also consider establishing in "supple
of the parties. It will have to be seen whether a mentary rules" a "reserve" mechanism for those cases
"uniform" list of reasons could be agreed on or whether where parties have not agreed on the appointment pro-
one should merely include a general formula such as
"circumstances giving rise to justifiable doubts as to the 27 Article 9: "A prospective arbitrator shall disclose to those who
arbitrator's impartiality or independence". approach him in connexion with his possible appointment any circum
stances likely to give rise to justifiable doubts as to his impartiality or
66. As to the procedure of challenging an arbitrator, independence. An arbitrator, once appointed or chosen, shall disclose
it is suggested that the model law guarantee the parties' such circumstances to the parties unless they have already been in
formed by him of these circumstances."
freedom to agree on the procedure to be followed in case Article 10 (2): "A party may challenge the arbitrator appointed by
of a challenge. In particular, it should recognize any him only for reasons of which he becomes aware after the appointment
agreement as to the person or body called upon to decide has been made."
28 Article 12(2): "A party may not challenge an arbitrator ap
about the challenge (e.g. the arbitral tribunal, the Court pointed by him except on a ground of which the party becomes aware
after the appointment."
29 Article 5: "1. The arbitral tribunal shall be composed of an
26 Cf. e.g. article 2 of the 1966 Strasbourg Convention: "Each Con uneven number of arbitrators. There may be a sole arbitrator.
tracting Party undertakes not to maintain or introduce into its law "2. If the arbitration agreement provides for an even number of
provisions excluding aliens from being arbitrators". arbitrators, an additional arbitrator shall be appointed."
Yearbook of the United Nations Commission on International Trade Law, 1981, Volume XII
cedure, or where a party fails to appoint his arbitrator or 2. Arbitral proceedings in general
where two arbitrators fail to appoint the third if so
required under the agreed scheme. Here, one may discuss 73. The model law should empower the arbitral
to what extent and under what conditions resort to courts tribunal to conduct the arbitration proceedings in such
manner as it considers appropriate, subject to the fol
may be had in such "defective" cases. In addition, some
lowing restrictions. The arbitral tribunal must treat the
provisions may be in place concerning the reasons and
procedures for replacement of an arbitrator. parties with equality and give each party at any stage of
the proceedings a full opportunity of presenting his case.
It should also follow any procedural instructions which
5. Liability the parties may have given specifically or by reference to
70. The question to what extent an arbitrator may be a set of arbitration rules.
liable for any misconduct or error is often debated these 74. Furthermore, the model law may impose certain
days. National laws if they deal with this issue at all tend rules which would be binding on the arbitrators either
to apply the same (lenient) standards as adopted for irrespective of any conflicting agreement by the parties
judges. In view of the fact that the liability problem is or only if the parties have not agreed otherwise. Exam
not widely regulated and remains highly controversial, it ples of the first category, i.e. mandatory rules, include
may seem doubtful whether the model law could provide provisions on interim measures of protection by courts
a satisfactory solution. However, the Commission may (discussed below, paragraph 78), on default of a party
wish to consider in this context whether it would not be (paragraphs 80-81), and on pleas as to the jurisdiction of
desirable to initiate the preparation of a code of conduct, arbitrators, which are discussed in the section on awards
or code of ethics which, outside the model law, could since they are often dealt with in the award (paragraphs
provide guidance to arbitrators in performing their im 88-89). Examples of the second category, i.e. rules from
portant functions. which the parties may derogate, include provisions on
evidence (paragraph 75), on experts (paragraph 76), and
on representation and assistance (paragraph 79). One
IV. Arbitral procedure might add provisions on hearings, on amendments to
claim or defence, or on the language(s) to be used in the
1. Place of arbitration proceedings, whereby the language of the arbitration
agreement might be considered as a possible deter
71. The model law should recognize the parties' free minant.
dom to determine the place of arbitration except where
that freedom is restricted by a mandatory provision such 3. Evidence
as article 22 of the Hamburg Rules. For those cases
where parties have neither determined the place of arbi 75. Subject to any rules agreed upon by the parties,
tration nor entrusted a third person or body (e.g. arbitral the arbitral tribunal should be free, under the model law,
tribunal, secretariat of arbitral institution) with that to adopt and follow its own rules on evidence, including
decision the model law might empower the arbitral the right to determine the admissibility, relevance and
tribunal to determine the place of the arbitration. weight of any evidence offered. Since the arbitral
tribunal lacks the power of enforcing its procedural
72. "Place of arbitration" would not necessarily decisions such as calling a witness or requiring produc
mean that, in fact, all meetings or hearings are held at tion of a document by a party, the model law may
that place (cf. e.g. article 16 (2) and (3) of the UNCITRAL envisage some assistance by courts in that regard. Here,
Arbitration Rules) but its clear determination is of legal one would have to clearly define the possible court
importance in various respects. The award shall be made measures and their specific conditions. In addition, the
at that place and, as often required by national laws, model law could contain "supplementary" rules (e.g.
filed or registered there within a certain time-period. along the lines of articles 24 and 25 of the UNCITRAL
Above all, the place of arbitration where the award was Arbitration Rules) for those cases where the parties have
made is the major criterion to determine the applicability not agreed on rules on evidence.
of the 1958 New York Convention as regards recognition
and enforcement of awards (article 1(1)). Yet another
4. Experts
legal consequence arises from the not uncommon fact
that the parties' choice of the place of arbitration is inter 76. As regards rules on the use of experts in arbi
preted as implying a choice of the applicable procedural tration proceedings, similar considerations apply as on
law if there is no express stipulation on that point. It may evidence in general. Thus, subject to any agreement by
be considered to deal with this interpretation which is the parties, the arbitral tribunal would have the power to
controversial and not beyond all doubts, if conflicts appoint experts, whereby the model law should specify
aspects were to be addressed at all in the model law (cf. whether it may do so only upon request by a party or ex
above, paragraph 38). offlcio. Supplementary rules could prove to be particu-
larly useful here, since a number of important ques without showing sufficient cause therefor. However,
tions are not normally taken into account by the parties such a potentially harsh measure would seem justified
when drawing up the arbitration agreement and are only if certain conditions, based on the principles of due
regulated in full detail only in few standard arbitration process and justice, are met which the model law should
rules. Therefore, it would seem desirable to include set forth in detail.
supplementary provisions, modelled after article 27 of 81. First, the party in default must have been duly
the UNCITRAL Arbitration Rules, on such points as the notified in advance. A second requirement is that the
expert's terms of reference and the parties' rights and arbitration tribunal clearly establish its competence. For
obligations in respect of the expert's performance of his that, it has to determine the existence of a valid arbi
task. tration agreement which may not be an easy task in case
of silence of the respondent. The third restriction relates
5. Interim measures of protection to the substance of the dispute and the decision about it.
77. It is suggested that the model law contain pro The arbitral tribunal may not accept without proper
visions on interim measures such as ordering the deposit investigation, including the taking of evidence, the
of goods with a third person or the sale of perishable reasons and explanations given by the claimant in sup
goods or attachments or seizures of assets. One issue to port of his claim. It will be necessary to exactly define
be settled is whether the arbitral tribunal may take such this requirement of investigation which is contrary to
measures even without being specifically empowered to most procedural laws on default in court litigation.
do so by the parties. Then it should be determined what
types of measures would be included and whether any
executory assistance by courts should be provided for. V. Award
78. A court may be involved not only by lending its
1. Types of awards
executory force to measures taken by the arbitral
tribunal but also by taking itself such decision in the first 82. It seems doubtful whether there is a real need for
place if so requested by a party. It may be considered the model law to deal with the different possible types of
whether such court measures and their conditions could awards. If it were considered to include this item, the
be regulated in the model law or whether these issues arbitral tribunal should, in addition to making a final
should better be left to the general law on procedure. In award, be entitled to make interim, interlocutory, or par
either case, however, it would seem desirable to answer, tial awards and ought to do so, if jointly requested by the
probably in the affirmative, the question whether a parties.
request for such interim measures is compatible with the
arbitration agreement and does not constitute a waiver 2. Making of award
thereof. As mentioned earlier (above, paragraph 61), this
question may become relevant already before the com 83. There are essentially two procedural issues to be
mencement of arbitration proceedings. considered relating to the making of the award. One is
the period of time within which the award shall be made,
6. Représentation and assistance the other one is the process of making the decision to be
embodied in the award.
79. Questions relating to representation and assist 84. The idea of establishing a time-period, as done in
ance are, for example, whether and by what persons a some national laws, might be regarded as a good one
party may be represented or assisted, whether the arbitral since it could help to prevent delays but regulating it in
tribunal may require a party to appear in person, and an appropriate manner will not be an easy task. One dif
whether advance notice has to be given about the persons ficulty is that a fixed standard period would not be
representing or assisting a party. While a number of appropriate in all cases which in turn would necessitate
national laws (and the 1966 Strasbourg Uniform Law, in an elaborate mechanism for extensions. Further for
article 16 (4)) contain provisions on this point, it may be malities, not necessarily conducive to speedy proceed
doubted whether there is a real need for dealing with this ings, would be added if one were to envisage fixing of the
topic in the model law. time-period by a court (thus, e.g. article 19 (2) of the
1966 Strasbourg Uniform Law).30 Additional problems
7. Default may arise from the possible sanction for non-compliance
80. The model law should regulate the consequences which could be termination of the mandate of the arbi-
of default of a party, at least as regards the respondent/ 30 Article 19 (2): "If the parties have not prescribed a period or a
defendant. In order to provide arbitration with its method of prescribing a period, if the arbitral tribunal delays in making
necessary "teeth", the arbitral tribunal may be em the award and if a period of six months has elapsed from the date on
powered to continue with the proceedings and make a which all the arbitrators accepted office in respect of the dispute sub
mitted to arbitration, the judicial authority may, at the request of one
binding award even if the respondent fails to participate of the parties, stipulate a period for the arbitral tribunal."
trator(s). 31 In view of these difficulties, one might well whether the award shall state the reasons on which it is
consider to leave this issue fully to the parties who may based. Probably the most acceptable solution on the
take care of it by establishing a time-period and a pro international plane would be to require such statement of
cedure tailored to their needs or by selecting efficient reasons unless the parties have agreed that no reasons are
arbitrators in the first place. to be given.
85. As to the decision-making process in arbitration
proceedings with more than one arbitrator, the basic 4. Pleas as to arbitrator's jurisdiction
question will be whether the model law should impose 88. The arbitral tribunal should be empowered to
certain standards or whether it should leave that issue to decide itself about any pleas as to its jurisdiction. In
the parties and only establish "supplementary" rules, if particular, it should have the power to determine the
deemed desirable. In view of the legal status of an award existence and validity of the arbitration agreement. If the
in terms of its recognition and enforceability, a man agreement is set forth in an arbitral clause, the deter
datory rule may seem preferable. It could require that the mination of the arbitral tribunal's "competence-compe
award be made by a majority of the arbitrators; yet, in tence" would be facilitated by the separability of that
the exceptional case that a majority cannot be obtained, clause as discussed earlier (paragraph 58).
the model law may recognize an agreement by the parties
to the effect that the chairman shall have a casting vote. 89. A difficult question remains, that is, whether the
For the sake of clarification, one might add that all arbi decision of the arbitral tribunal about its jurisdiction
trators have to take part in the deliberations leading to shall be final or whether it shall be subject to review by a
the award. court. In support of court control, one may argue that
the arbitrators cannot have the final say on their com
3. Form of award petence since their jurisdiction is to the exclusion of court
jurisdiction. If one would follow this line of thinking,
86. An obvious requirement as to the form of the although it may be deemed less convincing in the inter
award is that it be in writing. Another obvious require national context, one might consider imposing some re
ment, equally common in national laws, is that it be striction on the right to ask for review by a court. For
signed by the arbitrator(s). However, national laws differ example, article 18(3) of the Strasbourg Uniform Law
on whether any exceptions should be allowed here in the provides that "the arbitral tribunal's ruling that it has
case of arbitration proceedings with more than one arbi jurisdiction may not be contested before the judicial
trator. Probably the most acceptable compromise in the authority except at the same time as the award on the
context of international commercial arbitration would be main issue and by the same procedure".
not to require without exception that the award be signed
by all arbitrators but to prescribe that the fact of a 5. Law applicable to substance of dispute
missing signature and the reason therefor be stated in the
award and tfiat at least a majority of the arbitrators have 90. The first question is to what extent arbitrators
signed the award. ought to observe rules of law in deciding the dispute. It is
suggested that the model law recognize an agreement by
87. Another issue to be considered is whether the the parties that the arbitrators shall decide as "amiables
model law should establish any requirements as to the compositeurs" (or "ex aequo et bono"). It would be
contents of the award. 32 Some such elements might be helpful, though difficult, to define such mandate, for
viewed as being too obvious to be expressly stated in the example, along the following lines: Amiables composi
law, for example, the operative part (decision), the teurs must observe those mandatory provisions of law
names and addresses of the parties and of the arbi regarded in the respective country as ensuring its (inter
trators, and the subject-matter of the dispute. However, national) ordre public. In view of the commercial con
there are points which may be less obvious but very im text, it may be added that the arbitrators, whether or not
portant, for example the place and the date of the acting as amiables compositeurs, shall decide in accord
award. Finally, there is a point to be included on which ance with the terms of the contract, taking into account
national laws differ and which is controversial, that is the pertinent trade usages.
31 In addition to this sanction, the 1966 Strasbourg Uniform Law 91. The model law may also empower the arbitral
even envisages termination of the arbitration agreement if the arbitra tribunal to determine what law is applicable to the dis
tors are named therein (see above, para. 62).
32 Cf. e.g. article 22(5) and (6) of the 1966 Strasbourg Uniform pute unless the parties have designated a certain law to be
Law: applied. As to the facility of designating a law, the model
"5. An award shall, in addition to the operative part, contain the
following particulars: (a) the names and permanent addresses of the law might recognize not only the choice of a specific
arbitrators; (b) the names and permanent addresses of the parties; (c) national law but also allow reference to a uniform law or
the subject-matter of the dispute; (d) the date on which the award convention even if not yet in force. It may also be useful,
was made; (e) the place of arbitration and the place where the award
was made. as mentioned earlier (paragraph 24), to include a pro
"6. The reasons for an award shall be stated." vision to the effect that any choice of the law of a given
State means direct reference to the substantive law of should require such deposit although it is not found in all
that State and not to its conflicts rules. national laws and, where it is found, its regulation varies
widely as regards form, procedure and competent
6. Settlement authority. Another possible reason against such a
92. Where parties, as is often the case, during arbi requirement relates to the fact that the deposit, where it
tration proceedings reach an amicable settlement of their is required, is primarily needed for the enforcement of
dispute, questions arise as to the form and legal status of the award. Here, special considerations come into play
such settlement. While national laws and arbitration with regard to the model law to be discussed now.
rules provide varied answers, an acceptable approach
could be that the model authorize, but not compel, the 10. Executory force and enforcement of award
arbitral tribunal to record such a settlement in the form 97. National laws commonly provide that the award
of an award on agreed terms ("accord des parties"). obtains its executory force by an "exequatur" (leave for
Then, it would have to be decided whether such an award enforcement), whereby the particulars of the procedure
should be treated, e.g. as regards registration, enforce and the authority giving the order vary from one State to
ment, or any recourse, exactly like a "normal" award or the other. When drafting corresponding provisions of
whether any special regulations seem necessary. the model law, the special scope of application must be
taken into account and its relationship to the scope of the
7. Correction and interpretation of award 1958 New York Convention. If, for example, enforce
ment of an award made in (and under the law of) State X
93. It might be useful to include a provision accord is sought in State Y, no "exequatur" is needed in State X
ing to which a party may request within a certain period (and, thus, no deposit there for that purpose) under the
of time that the arbitral tribunal give an interpretation of 1958 New York Convention whose major achievement
the award or correct certain errors (cf. e.g. articles 35 was to abolish the requirement of a double-exequatur. If
and 36 of the UNCITRAL Arbitration Rules). Such a enforcement of that same award is sought in the country
provision, though of limited importance, could help to of origin itself (State X), then the 1958 New York Con
overcome any problems arising from the fact that the vention is not applicable and the model law would
mandate of the arbitral tribunal is terminated by making remain as the governing law.
the award. 98. Conceivably, the provisions of the different
national laws on enforcement of domestic awards could
8. Fees and costs provide the basis for drafting acceptable rules for the
94. Provisions relating to the costs of arbitration, model law which, then, would probably include deposit
including the arbitrators' fees, are usually contained in of the award as a requirement for the exequatur. How
the arbitration agreement by way of reference to stand ever, looking back at the two situations described in the
ard arbitration rules which may set forth fee schedules or preceding paragraph, a different approach is suggested
the procedures of fixing the respective amounts. There here: To the extent possible, the two situations should be
seems to be little that the model law should regulate in treated alike and, therefore, the model law should adopt
that regard. Perhaps it could specifically mention the the same conditions and procedures as laid down in the
right to request deposits which is of practical importance 1958 New York Conventionfor the enforcement of "for
in the international context. Also, it might authorize the eign" awards. This approach, which should also be
arbitrators, subject to any rule adopted by the parties, to followed with regard to any means of recourse (see
fix their own fees, possibly with some provision for below, paragraphs 105-111), would enhance unification
review by a court. and, thus, facilitate matters in a field of great practical
importance. It would also underline the international
9. Delivery and registration of award character of the arbitrations covered by the model law
and clearly separate them from purely domestic cases.
95. It is clear that the award has to be delivered to the
parties, whereby copies signed by the arbitrators or duly 99. If it were decided to follow this approach, the
certified copies could be used. Such delivery or notifi provisions of the 1958 New York Convention, in par
cation should be required under the model law since it is ticular articles III and IV, would determine the direction
one condition for the final and binding nature of the to be taken in drafting enforcement rules for the model
award which, in turn, is a condition for its enforcement. law:
96. Another condition is, under a substantial number
of national laws, that the award, normally the authen "Article III
ticated original, is registered or deposited with a certain "Each Contracting State shall recognize arbitral
court or office, differently designated in different States. awards as binding and enforce them in accordance
It will have to be considered whether the model law with the rules of procedure of the territory where the
90 Yearbook of the United Nations Commission on International Trade Law, 1981, Volume ХП
award is relied upon, under the conditions laid down promise could be that the award may be made public
in the following articles. There shall not be imposed only with the express consent of the parties.
substantially more onerous conditions or higher fees
or charges on the recognition or enforcement of
arbitral awards to which this Convention applies than VI. Means of recourse
are imposed on the recognition or enforcement of
domestic arbitral awards." 1. Appeal against arbitral award
102. The question whether an appeal may lie from
"Article IV the arbitral award is relevant to the question at what
"1. To obtain the recognition and enforcement point of time an arbitral award obtains "the authority of
mentioned in the preceding article, the party applying res judicata" , as it is called in article 24 of the 1966 Stras
for recognition and enforcement shall, at the time of bourg Uniform Law, or becomes binding on the parties
the application, supply: which is one of the conditions for the award to be
enforceable (cf. article V (1) (e) 1958 New York Conven
"(a) The duly authenticated original award or a tion). As regards appeal to any (second instance) arbitral
duly certified copy thereof; tribunal, the answer seems simple. The model law should
"(6) The original agreement referred to in article II recognize any such appeal if agreed on by the parties, as
or a duly certified copy thereof. is not uncommon in commodity arbitrations.
"2. If the said award or agreement is not made in 103. The answer is more difficult, however, in respect
an official language of the country in which the award of any appeal to the courts. Such judicial review on the
is relied upon, the party applying for recognition and merits, at least on certain questions of law, is envisaged
enforcement of the award shall produce a translation under some national laws. Yet, as illustrated by the
of these documents into such language. The transla recent change concerning the most prominent example,
tion shall be certified by an official or sworn translator the "special case procedure" under United Kingdom
or by a diplomatic or consular agent." law,33 there is a clear trend towards further limiting the
100. The reference, in article III, to "the rules of control function of the courts in the international con
procedure of the territory where the award is relied text. This development is based on the same considera
upon" shows that the Convention itself does not fully tions as the trend to restrictively apply any public policy
regulate the procedure. Consequently, some such ground, and that is the realisation of the specific features
procedural rules would have to be included in the model of international commercial arbitration, in particular, its
law. In order to meet the requirement imposed by article limited connexion to any given domestic legal system.
HI concerning the "onus" placed on a party seeking 104. It is suggested, therefore, that judicial control
recognition and enforcement, these provisions should en on the merits be limited to the utmost. There are, of
visage a procedure as simple and easy as possible. The course, certain minimum standards which any State
provisions would have to determine the competent wants to see observed even in international arbitrations.
authority and its procedure while the obligations placed However, these standards which form part of its inter
on the applying party are to be regulated as in article IV. national ordre public, including any restrictions as to the
In view of the requirement under article IV that the arbitrability of the subject matter, do not necessitate any
applying party supply the duly authenticated original appeal procedure. They could, and it is submitted
award or a duly certified copy thereof, one may consider should, be appropriately taken care of in any setting
not to require deposit of the award after it is made by the aside procedures or, as envisaged under article V (2) of
arbitral tribunal. This way, full alignment could be the 1958 New York Convention, in procedures relating to
achieved with the desirable result that in practice it would recognition and enforcement of the award. As to the
not matter whether recognition and enforcement of an method of excluding appeals to courts, one might con
"international" award is sought in the country of origin sider envisaging a respective "exclusion agreement" by
or somewhere else. the parties. Yet, it would be clearer and more effective to
exclude any appeal to courts expressly by the model law.
11. Publication of award
2. Remedies against leave for enforcement (exequatur)
101. It may be doubted whether the model law
should deal with the question whether an award may be 105. As regards remedies against leave for enforce
published. Although it is controversial, since there are ment, similar considerations apply as have been set forth
good reasons for and against such publication, the above with regard to executory force and enforcement
decision may be left to the agreement of the parties or the (paragraphs 98-100). In particular, the same approach of
arbitration rules chosen by them. If, nevertheless, a pro 33 For an account of the changes, see Schmitthoff, op. cit. (foot
vision were to be included, probably an acceptable com note 14), pp. 233-237.
aligning the requirements and procedures of the model setting aside may be based. National laws often contain
law with the provisions of the 1958 New York Conven rather extensive and elaborate lists of reasons upon
tion may be recommended here. The desirable result which a dissatisfied party may rely. While some of these
would be that in practice recognition and enforcement reasons may be easily disregarded as being geared to
could be successfully objected to by a party, and would specific domestic situations or of minimal practical
be refused, on essentially identical grounds irrespective relevance, it will not be an easy task to agree on the
of whether enforcement is sought in the country of origin reasons to be included in the model law. Yet, it is
or somewhere else. The only difference, which is justified suggested that every effort be made to limit the number
and already inherent in the 1958 New York Convention, of reasons to the extent acceptable.
arises from the fact that the reasons set forth in para
graph (2) of article V relate to the law of the State of 110. Ideally, one should aim at a list, shorter than
enforcement and may, thus, lead to divergent results. the one set forth in the 1966 Strasbourg Uniform Law,35
that would contain only those reasons on which re
106. If this "internationalist" approach, for the sake cognition and enforcement may be refused under the
of uniformity, would be adopted, the reasons on which a 1958 New York Convention, i.e. article V (1), (d)-(d) and
remedy against leave for enforcement could be based (2). This restrictive approach, adopted in article IX of
under the model law would be those laid down in article the 1961 European Convention for enforcement pur
V of the 1958 New York Convention. In addition to the poses,36 would meet the concerns underlying the cor-
rules on the reasons, the model law would have to
regulate the procedure to be followed by a party object
ing to the leave for enforcement. It would probably en 35 Article 25:
visage resort to the same authority as the one granting "1. An arbitral award may be contested before a judicial
authority only by way of an application to set aside and may be set
the exequatur, possibly allowing further recourse aside only in the cases mentioned in this Article.
(appeal) to a higher instance. "2. An arbitral award may be set aside:
"(a) If it is contrary to ordre public;
"(ft) If the dispute was not capable of settlement by arbitration;
3. Setting aside or annulment of award (and similar "(c) If there is no valid arbitration agreement;
(d) If the arbitral tribunal has exceeded its jurisdiction or its
procedures) powers;
"(e) If the arbitral tribunal has omitted to make an award in
107. The issues relating to setting aside or annulment respect of one or more points of the dispute and if the points omitted
of arbitral awards are amongst the most difficult ones to cannot be separated from the points in respect of which an award has
been made;
be settled in the model law. It is also submitted that the "(/) If the award was made by an arbitral tribunal irregularly
pertinent provisions to be drafted will have a decisive constituted;
influence on the value of the model law as a legal regime "(g) If the parties have not been given an opportunity of sub
stantiating their claims and presenting their case, or if there has been
exclusively geared to international arbitrations. This is disregard of any other obligatory rule of the arbitral procedure, in so
particularly true with regard to the grounds on which an far as such disregard has had an influence on the arbitral award;
"( ) If the formalities prescribed in paragraph 4 of Article 22
application for the setting aside or annulment of an have not been fulfilled;
award may be based. To some extent, it is also true with "(0 If the reasons for the award have not been stated;
regard to the procedures envisaged under domestic laws. "(/) If the award contains conflicting provisions.
"3. An award may also be set aside:
108. To start with the minor problem, i.e. the pro "(a) If it was obtained by fraud;
"(b) If it is based on evidence that has been declared false by a
cedure, there is a great variety in national laws of dif judicial decision having the force of res judicata or on evidence
ferent claims for "attacking" an award, not only for recognised as false;
"(c) If, after it was made, there has been discovered a document
setting aside or, sometimes treated separately, annulment or other piece of evidence which would have had a decisive influence
of the award but also to other aims, e.g. suspension or on the award and which was withheld through the act of the other
reinstitution.34 The disparities extend to procedural party.
"4. A case mentioned in sub-paragraph (c), (d) or (/) of para
particulars such as form, time-limits, and competent graph 2 shall be deemed not to constitute a ground for setting aside
authority. For the sake of uniformity which would facili an award where the party availing himself of it had knowledge of it
tate international practice as regards the post-award during the arbitration proceedings and did not invoke it at the time.
"5. Grounds for the challenge and exclusion of arbitrators pro
stage, an attempt should be made to establish commonly vided for under Articles 12 and 14 shall not constitute grounds for
acceptable procedures, in particular, to provide for only setting aside within the meaning of paragraph 2 (/) of this Article,
even when they become knownt>nly after the award is made."
one type of application and proceedings, probably to be 36 Article IX:
called "setting aside procedures". "1. The setting aside in a Contracting State of an arbitral award
covered by this Convention shall only constitute a ground for the
109. The most important point, however, would be refusal of recognition or enforcement in another Contracting State
to determine the grounds on which such application for where such setting aside took place in a State in which, or under the
law of which, the award has been made and for one of the following
reasons:
"(a) the parties to the arbitration agreement were under the law
34 The manifold types of remedies are listed in the national reports, applicable to them, under some incapacity or the said agreement is
published in YCA, under chapter VI, 5. not valid under the law to which the parties have subjected it or,
responding proposal of the International Chamber of visions of law to the extent they are mandatory for inter
Commerce which is contained in the "list of subject- national cases.
matters for possible inclusion in the future work pro
gramme" considered by the Commission at its eleventh CONCLUSION AND SUGGESTED COURSE OF ACTION
session.37 It would help to prevent that an international
award falls victim to local particularities of law although 112. This report does not discuss in detail all the
the case at hand bears no substantive connexion with that issues and considerations relevant in the preparation of a
respective State. model law. It is hoped, though, that it provides a suf
111. If this recommendation were followed, it would ficient basis for the Commission to decide on its future
result in full alignment of the reasons for setting aside course of action in respect of this project. It may be
and for refusing recognition and enforcement. Neverthe concluded that the preparation of a model law on inter
less, the setting aside procedure would not become national commercial arbitration is desirable in view of
superfluous since it would allow a party to raise ob the manifold problems encountered in present arbi
jections against an international award in the country tration practice and the above-stated concerns which
where, or under the law of which, it was made irres could be met by a widely acceptable law. It also seems to
pective of whether enforcement is sought there by the be the appropriate time for such an undertaking since
other party. At the same time, the respective State (of international arbitrations are increasing and there are
origin) would have a chance of "monitoring" observance intentions in a number of States to adopt legislation
by arbitrators active within its boundaries of its pro- geared thereto.
113. On the basis of this report, the Commission
failing any indication thereon, under the law of the country where may wish to discuss the general concerns and principles
the award was made; or that would underlie the model law. It may also wish to
"(b) the party requesting the setting aside of the award was not discuss the issues identified in the report and the pertinent
given proper notice of the appointment of the arbitrator or of the
arbitration proceedings or was otherwise unable to present his case; recommendations as to the most suitable approaches to
or be taken. Such an exchange of views which would help to
"(c) the award deals with a difference not contemplated by or determine the direction, in particular, as regards the
not falling within the terms of the submission to arbitration, or it
contains decisions on matters beyond the scope of the submission to scope and probable contents of the law seems necessary
arbitration, provided that, if the decisions on matters submitted to before a first draft of the model layv can be prepared.
arbitration can be separated from those not so submitted, that part
of the award which contains decisions on matters submitted to arbi 114. In view of the complexity of the issues and the
tration need not be set aside; work required for the preparation of a draft model law,
"(d) the composition of the arbitral authority or the arbitral
procedure was not in accordance with the agreement of the parties, the Commission may wish to entrust a Working Group
or failing such agreement, with the provisions of Article IV of this with that task. Because of budgetary restrictions, it may
Convention. be considered to give that mandate to the Working
"2. In relations between Contracting States that are also parties
to the New York Convention on the Recognition and Enforcement Group on International Contract Practices which has
of Foreign Arbitral Awards of 10th June 1958, paragraph 1 of this completed its task. The Working Group might use this
Article limits the application of Article V (1) (e) of the New York
Convention solely to the cases of setting aside set out under para report as its agenda, probably starting with the arbit
graph 1 above." ration agreement, and should follow the directions given
37 Report of the United Nations Commission on International Trade by the Commission at this session. It would then, assisted
Law on the work of its eleventh session, Official Records of the by the Secretariat and in consultation with interested
General Assembly, Thirty-third Session, Supplement No. 17
(A/33/17), para. 41, sub. I (e) (iii) (Yearbook . . . 1978, part one, organizations, prepare draft provisions to be submitted
II, A). to the Commission at a later session.

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III.

INTERNATIONAL COMMERCIAL ARBITRATION*

INTRODUCTION note suggested that the Commission commence work on

of two alternative criteria could be regarded as mis "Article II

5. Effect of the agreement 6. Termination

2. Challenge 4. Appointment of arbitrators (and replacement)

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