Can the local courts intervene in the selection of arbitrators? If so, how?
International Arbitration (2nd Edition)
Pursuant to section 13(7) AA, if the Director of the AIAC is unable or fails to assist in the appointment of arbitrators within 30 days after a party’s request, any party may apply to the High Court to discharge the functions of the Director of the AIAC under section 13(4), (5), and (6), AA. Besides this statutory regime, the court lacks authority to intervene in the selection of arbitrators, consistent with the principle of non-judicial intervention in section 8, AA.
Local courts, and specifically the President of the Court of Appeals, may intervene in the selection of arbitrators, when the parties do not determine a selecting method for the arbitral tribunal or when the selecting method agreed on by them fails.
Article 11(3) of the International Commercial Arbitration Law No 19.971 (ICAL) provides for the arbitrators’ selecting mechanism that shall apply in case the parties have not agreed on an appointment procedure. Specifically, Article 3(a) of ICAL, states that in case of a three member tribunal, each part will appoint an arbitrator, and those two arbitrators will be in charge of the appointment of the third arbitrator. If one of the parties fails to do so in a 30 day period starting upon the request of the other party, or if there is no agreement between the two chosen arbitrators to appoint the third arbitrator within a 30 day period from their own designations, the appointment will me made, upon party request, by the President of the Court of Appeals of the place of the arbitration.
Article 11(3)(b) of ICAL later states that for sole arbitrator cases, the President of the Court of Appeals will be entitled to designate the arbitrator when the parties fail to reach an agreement. This designation mechanism is also activated upon party request.
Finally, the President of the Court of Appeals is also entitled to intervene in the arbitrators’ appointment (a) when one of the parties’ does not comply with the agreed method; (b) when, following a specific proceeding drafted by the parties, there is no agreement between them to appoint the arbitrators or between the two appointed arbitrators to designate the third arbitrator; and (c) when a third party, including an arbitral institution, does not comply with the rules previously agreed on by the parties for the arbitrators’ appointments. (Article 11(4)(a)(b)(c) of ICAL.)
Yes. If the parties cannot agree on the appointment of the sole arbitrator, such appointment will be made by the State court (art. 10 (2) LAV).
Also, if a party does not appoint the arbitrator (or arbitrators) that it should within a period of 30 days counting from the reception of the request from the other party, or if the party-appointed arbitrators do not agree on the choice of the chairman within a period of 30 days counting from the appointment of the last arbitrator, such appointments can also be made by the State court at request of any of the parties. The State courts should take into account the qualifications required by the agreement of the parties as well all the relevant facts to assure the appointment of an independent and impartial arbitrator. In case of international arbitration the State court should also take into consideration the possible convenience to appoint an arbitrator who has a different nationality from the parties (art. 10 (6) LAV).
Where a party fails to appoint an arbitrator or if the two appointed arbitrators fail to designate the third one, the president of the District Court will appoint, on demand of any of the parties, the missing arbitrator.
In both the international and the domestic arbitration, the court at the seat of the arbitral tribunal may intervene and appoint, challenge, remove or replace an arbitrator upon request of a party to the arbitration proceeding (art. 179 et seq. PILA and art. 367 et seq. CPC). When seized, the court ("juge d'appui") must accept and act on the request to appoint an arbitrator unless a summary examination reveals that no arbitration agreement exists between the parties.
Generally, the composition of the tribunal is subject to the parties’ agreement. However, under certain circumstances, the competent court may intervene in the appointment of arbitrators upon request of either party as per section 1035 (3) and (4) ZPO (see last question).
The first ground for intervention of the competent court is when there is no party agreement in place, and the parties fail to reach an agreement (section 1035 (3) ZPO). In this case, the court appoints a sole arbitrator. The second ground for intervention is when the two party-appointed arbitrators cannot jointly agree on a presiding arbitrator. According to section 1035(3) ZPO, the court appoints the presiding arbitrator. The third ground is when either the parties or the arbitrators do not comply with the agreed procedure of the appointment. As per section 1035(4) ZPO, the court orders the non-compliant party to carry out the respective procedural act.
Moreover, in case the arbitration agreement favors one party with regard to the composition of the tribunal, the disadvantaged party may file a petition with the competent court as per section 1034 (2) ZPO. The court may then diverge from the party agreement and compose the tribunal.
Provided that the seat of arbitration has not yet been determined, unless the parties have agreed otherwise, German courts will have jurisdiction if either party has its place of business or habitual residence in Germany (sections 1025(3) and 1062(3) ZPO).
No, the local courts do not possess such powers.
Local courts cannot, under any circumstances, intervene in the selection of arbitrators.
In non-institutional arbitration proceedings, the UAE Courts, pursuant to article 204 of the UAE CPC, may intervene to assist with the constitution of an Arbitral Tribunal. It may do so where an arbitrator or arbitrators have not been agreed, or where the agreed arbitrator(s), refuses to act, has been discharged, cannot act, or there is a ruling rejecting his / her appointment and there is no agreement between the parties on how to address such an eventuality.
UAE Off-Shore Jurisdictions
DIFC Arbitration Law
A party may request the DIFC Court of First Instance to intervene where there has been a failure on behalf of the parties, the arbitrators or third parties (including the relevant arbitral institution) to validly constitute an Arbitral Tribunal (Article 17).
The district court has an overall obligation to assist the parties in any matters regarding the appointment of arbitrators under the Arbitration Act.
Should respondent omit to appoint its arbitrator within the 30 days’ notice period under the Arbitration Act, the district court shall, on claimant’s request, appoint the arbitrator on behalf of respondent. The same applies should the party appointed arbitrators fail to appoint the chairman.
In the event that one of the arbitrators resigns or is disqualified, the district court shall appoint a new arbitrator. The same applies should an arbitrator unduly delay the proceedings.
According to article 15.3 of the SAA, if arbitrators cannot be appointed under the procedure agreed to by the parties, or, absent an express agreement to appoint an/a arbitrator/s, any party may request the competent Court to appoint the arbitrators or, as appropriate, to adopt the necessary measures therefore.
Under Serbian law, local courts have a role in the process of selection of arbitrators. First, the court can appoint arbitrators if they are not appointed by the parties or by the appointing authority (provided it exists). Second, local courts can be called upon to decide upon the challenge of arbitrators. Finally, courts can decide upon the request for revocation of an arbitrator (i.e. in scenarios where an arbitrator is no longer capable of fulfilling his duty).
Yes, local courts can intervene in the selection of arbitrators:
a. Where any of the parties in an institutional arbitration failed or refused to appoint an arbitrator or when the parties have failed to reach an agreement on the sole arbitrator (in an arbitration before a sole arbitrator) or when the two designated arbitrators have failed to reach an agreement on the third or presiding arbitrator (in an arbitration before a panel of three arbitrators), and the institution under whose rules arbitration is to be conducted fails or is unable to perform its duty as appointing authority within a reasonable time from receipt of the request for appointment;
b. In all instances where arbitration is ad hoc and the parties failed to provide a method for appointing or replacing an arbitrator, or substitute arbitrator, or the method agreed upon is ineffective, and the National President of the Integrated Bar of the Philippines (IBP) or his duly authorized representative fails or refuses to act within such period as may be allowed under the pertinent rules of the IBP or within such period as may be agreed upon by the parties, or in the absence thereof, within thirty (30) days from receipt of such request for appointment;
c. Where the parties agreed that their dispute shall be resolved by three arbitrators but no method of appointing those arbitrators has been agreed upon, each party shall appoint one arbitrator and the two arbitrators thus appointed shall appoint a third arbitrator. If a party fails to appoint his arbitrator within thirty (30) days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within a reasonable time from their appointment, the appointment shall be made by the Appointing Authority. If the latter fails or refuses to act or appoint an arbitrator within a reasonable time from receipt of the request to do so, any party or the appointed arbitrator/s may request the court to appoint an arbitrator or the third arbitrator as the case may be.
If the parties fail to mutually agree on deciding the arbitrators then they may approach the court for the appointment of the arbitrator(s). Any of the parties may move an application for the appointment of the arbitrator under Section 11 of the Arbitration & Conciliation Act, 1996.
Furthermore, in view of section 14 and 15 of the Arbitration and Conciliation Act, 1996, the Hon’ble Court has the power to terminate the mandate of an Arbitrator if such Arbitrator becomes de-jure or de-facto unable to perform his duty and substitute the arbitrator. Also as per section 29A(6) of the Arbitration and Conciliation Act, the Hon’ble Court can substitute an Arbitrator at the time of extending the time to complete the arbitration proceedings maximum by six months.
Local courts are not permitted to intervene in the selection of arbitrators.
Arbitrators are selected in accordance with the contractual arbitration provisions and any rules incorporated therein, failing which they are selected in accordance with the default procedural rules in the Arbitration Law. If the default procedures under the Arbitration Law are applied and a party fails to nominate an arbitrator, or the parties fail to appoint a chairperson, then the arbitrator in question is appointed through a court action.
The courts may not intervene in the selection of arbitrators. However, if the arbitrary panel cannot be constituted in accordance with the arbitration agreement or as described in item 13 above, each of the parties may request that the local courts appoint the missing arbitrator(s). The appointment made by the court cannot be appealed.
In cases where it is necessary to appoint arbitrator and there is no agreement between the parties on the appointing authority, the appointing authority is the president of the Commercial Court in Zagreb or a judge authorized by him.
Section 11(4) of the ICA Law provides that the Cypriot Courts have the authority to intervene in the appointment process upon request of a party, unless otherwise agreed by the parties, if a party fails to act according to the arbitration agreement or when the parties or the two appointed Arbitrators are unable to proceed to the expected procedure agreed or where a third, natural or legal person including the arbitral tribunal fails to act according to what is expected in the procedure. Similar provisions as to the power of the Court to intervene in the appointment process of the Arbitrators are found in section 10 of Cap. 4.
The French juge d’appui can be asked to appoint one or several arbitrators where the parties cannot agree on their appointment and where the arbitration is not administered by any institution.
In domestic arbitration, the support judge is the President of the Tribunal de grande instance (or of the Commercial Court, if the arbitration agreement so provides) (Article 1459, CCP). Article 1459 CCP lays down the rules to determine which Tribunal de grande instance has territorial jurisdiction – typically (in the absence of specific agreement of the parties), the Tribunal de grande instance of the seat of arbitration.
In international arbitration (unless the arbitration agreement provides otherwise), the juge d’appui is the President of the Paris Tribunal de grande instance, if one of the following conditions is met:
- The arbitration takes place in France.
- The parties have agreed that French procedural law will apply to the arbitration.
- The parties have expressly granted jurisdiction to the French courts over disputes relating to the arbitral procedure.
- One of the parties is at risk of a denial of justice.
Local courts can be involved if parties elect them as appointing authority for one or all members of the arbitral tribunal.
Also, unless the parties have identified a specific method of appointment of the arbitrator(s) in the arbitration agreement, pursuant to Article 810 CCP (the default rule), if one party fails to appoint an arbitrator, or if the two party-appointed arbitrators fail to reach an agreement on the presiding arbitrator, the appointment will be made by the President of the Court of First Instance at the seat of arbitration.
A party may apply to the court for the appointment of an arbitrator where (a) a party fails to act as required under the procedure by appointing an arbitrator; or (b) the parties or two arbitrators are unable to reach agreement as required under the procedure; or (c) a third party, including an institution, fails to perform any duty imposed on it under the procedure. See section 7(3) of the ACA. In such situation, the High Court is the default appointing authority (section 7, ACA). Where the arbitration is international in nature and the nationality of the arbitrator(s) is not stated, it is recommended to appoint an arbitrator of a nationality other than the nationality of the parties (section 44(4), ACA). The parties might have also agreed in international arbitrations that the appointing authority, being the Secretary-General of the Permanent Court of Arbitration at the Hague, should appoint the arbitrator in the event of default. Under the Lagos Law, the default appointing authority is the Lagos Court of Arbitration (section 8, Lagos Law).
Since the last major amendment to Austrian arbitration law, the only court competent in arbitration matters is the Austrian Supreme Court (as first and last instance) and also this court in principle refrains from intervening in arbitration.
As noted, it may, upon request by a party, under certain circumstances help in the selection of a tribunal.
Further, the appointment of an arbitrator may be challenged before the Supreme Court.
Neither the FAA nor state arbitration laws allow for court intervention in the selection of arbitrators except in circumstances where a default appointment is necessary. See responses to questions 12 and 13, above.
Both in domestic as well as in international commercial arbitral proceedings having their seat in Greece, court intervention is provided upon request of a party to the arbitration agreement in all cases in which either the parties’ agreed procedure as regards the selection of the tribunal or the default rules applicable absent such agreement may not be implemented for various reasons.
The Court competent to adjudicate the respective request is the One Member Court of First Instance having its seat in the district where the arbitration proceedings shall take place according to the arbitration agreement, otherwise the One Member Court of First Instance of the domicile of the requesting party, or of the place of its residence, or absent a place of residence the One Member Court of First Instance in Athens. The Court adjudicates the request under the rules set forth in articles 739 et seq. GrCCP controlling the so called “non-contentious proceedings”. Against the decision of the Court no legal remedy may be taken (appeal, petition for cassation etc.). A request for revocation and/or amendment may be filed nevertheless until the commencement of arbitral proceedings.
Yes. In the event that the parties fail to decide on the appointment of an arbitrator or in the event that they appointed an arbitrator and a problem arose in connection with his appointment following the occurrence of the dispute, either party may file an application with the court for the appointment of an arbitrator. Pursuant to Section 8 of the Arbitration Law, the court may, at the request of that party, appoint the arbitrator, whether the arbitrator was to have been appointed by the parties or by one of them, or whether he was to have been appointed by the arbitrators appointed or by a third party.
The courts can intervene where there is an initial failure of the procedure for the appointment of the arbitral tribunal, and a subsequent failure by the parties to agree on what is to happen in such circumstances. Pursuant to s.18 of the 1996 Act, any party may apply to the court (under Part 62 of the Civil Procedure Rules) to exercise its powers to (a) give directions on the appointment (b) approve or revoke previous appointments or (c) make the appointment itself.
The Code of Civil Procedure provides that local courts, namely the tribunal whose jurisdiction covers the seat of the arbitration, may intervene in the selection of arbitrators by appointing an arbitrator or the presiding arbitrator in cases where the parties do not agree on the appointment of the sole arbitrator or a party fails to nominate an arbitrator or in the case of a three-panel arbitral tribunal, when the two arbitrators do not agree on whom should they appoint as presiding arbitrator. The local courts render a decision regarding the appointment of the arbitrators after hearing the parties.
If a sole arbitrator will be appointed and the parties cannot reach a compromise, the Court will appoint the arbitrator upon the request of one party. If the parties or their chosen arbitrators cannot determine the final arbitrator for the third or final arbitrator, the Court will appoint the arbitrator, same as the appointment for a sole arbitrator. The procedure is the same for the appointment of the more arbitrators. The decisions of the court regarding the appointment of the arbitrator(s) cannot be appealed.