1. INTERNATIONAL ARBITRATION Domenico Di Pietro STUDYING LAW AT ROME TRE FALL SEMESTER 14 October 2009

2. THE ARBITRATION AGREEMENT: PECULIARITIES Separability/Autonomy - The arbitration clause is autonomous from the rest of of the contract - Extent of application Competence/Competence - The tribunal’s power to rule on its own jurisdiction The Law applicable to arbitration agreements - Contract - Forum

3. WHERE? LEGAL CONSIDERATIONS The place (or seat) of arbitration is one of the necessary elements of arbitration and one of the most important aspects to be considered. It determines the “nationality” of the award It is not necessarily the place where the tribunal holds the hearings. It is the place where the arbitral process is legally rooted The place of arbitration is important because the local law affects the arbitral process and the local courts may affect the award. The law of the place of arbitration makes the predominant part of the so-called lex arbitri The lex arbitri is composed of the rules of law governing the nationality, legality, structure and procedure of the arbitration. It comprises: the specific agreement of the parties the arbitration rules expressly or impliedly incorporated by the parties; and national and international procedural rules adopted by the parties and by the arbitrators to govern the arbitration and most importantly the mandatory law of the place of arbitration

4. ARTICLE II 1. Each Contracting State shall recognise an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration. 2. The term "agreement in writing" shall include an arbitral clause in a contact or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams. 3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed

5. WHERE? PRACTICAL CONSIDERATIONS What are the grounds for annulment of arbitral awards rendered in that country? What is the actual attitude of local courts towards arbitration? Is it a “New York Convention country”? Is one of the parties the Government of that country?

6. RECURRENT FEATURES IN INTERNATIONAL TRADE: PROBLEMATIC PRIVITY Incorporation by Reference Assignment of contract Tacit acceptance - agreements per facta concludentia New means of communication - Letters and telegrams? - Case law

7. INCORPORATION BY REFERENCE: EXAMPLES Agreement to re-new or enter into new transaction with reference to previous contract between the same parties Contract with reference to one of the parties’ general conditions of trade Contract with reference to conditions of trade drafted by trade or industry associations (GAFTA, FIDIC etc) Subcontract with reference to the contract entered by principal and contractor Bill of lading making reference to the provisions contained in the charter-party

8. INCORPORATION BY REFERENCE: THE TWO MAIN SCENARIOS a) documents exchanged do not contain an arbitration clause, but do make express reference to an arbitration clause contained in another document (so-called relatio perfecta), or b) documents exchanged do not contain an arbitration clause but make reference to a document containing one, although there is no express reference to it in the exchanged documents (so-called relatio imperfecta)

9. NULL AND VOID, INOPERATIVE AND INCAPABLE OF BEING PERFORMED Null and Void - identification of the relevant Law Inoperative –arbitration agreement is conditional –arbitration agreement is explicitly or implicitly revoked or modified –Res judicata Incapable of being performed –Inconsistency (conflict with other contractual provisions) –Uncertainty –Deadlock clauses

10. DRAFTING TIPS AND ARBITRATION PLANNING Lex Arbitri? First or one-off transactions The characteristics of the counterpart should be closely assessed (experienced trader in a different industry) Assess the parties’ actual awareness about the arbitration agreement (repeated transactions with similar entities) In the event of incorporation, express reference should be used where possible Escalation Clauses Assess the attitude of the courts Consider alternative enforcement plans

11. ESCALATION CLAUSES LCIA MEDIATION AND ARBITRATION In the event of a dispute arising out of or relating to this contract, including any question regarding its existence, validity or termination, the parties shall first seek settlement of that dispute by mediation in accordance with the LCIA Mediation Procedure, which Procedure is deemed to be incorporated by reference into this clause. If the dispute is not settled by mediation within [............] days of the appointment of the mediator, or such further period as the parties shall agree in writing, the dispute shall be referred to and finally resolved by arbitration under the LCIA Rules, which Rules are deemed to be incorporated by reference into this clause.