How are arbitral proceedings commenced in your country? Are there any key provisions under the arbitration laws relating to limitation periods or time bars of which the parties should be aware?
International Arbitration (3rd edition)
The Arbitration Law provides default procedural rules. Arbitral proceedings are commenced by a request for arbitration served by the claimant on the respondent. In ad hoc arbitrations, the request for arbitration must be served formally through a court process server.
There are no default rules governing the commencement of arbitral proceedings in France. Parties must follow the procedure set out in their arbitration agreement, in particular if they have opted for institutional rules that prescribe necessary steps for commencing proceedings. Otherwise, arbitral proceedings are usually initiated by unequivocal service of a notice of arbitration on the other party.
Limitation periods are normally regarded as substantive rather than procedural. Substantive rules are those applicable to the merits of a dispute, whereas procedural rules regulate the conduct of the proceedings. Therefore, the law applicable to the underlying dispute or claim will also be applicable to the relevant statute of limitation.
When French law is applicable to the merits of a dispute, a general five-year limitation period applies to contractual and tortious matters, with a few exceptions, such as for some construction contracts (see Article 2224, Civil Code). In general, this period commences from when the parties become aware (or should have been aware) of the event giving rise to the dispute. Commencing arbitration proceedings normally interrupts the limitation period (see Article 2241, Civil Code; Court of Cassation, Second Civil Chamber, 11 December 1985, No. 84-14.209).
Given that the parties have not agreed otherwise, the notification of the Reference to Arbitration consists the commencement of the proceedings. The limitation periods applicable to arbitration are the same as before the Civil Courts. Once the arbitration proceeding is initiated, the limitation period lapse. However, the court may order that the period between the initiation of the arbitration proceedings and the issue of the order for setting aside the award or the arbitration agreement ceases to apply to the dispute, is excluded from the limitation period, if these events take place.
The arbitral proceedings commence with an action, more precisely, when the action is delivered to a permanent arbitral court or an arbitrator, as regulated by Section 14 (1) of the Arbitration Act. The recipient of the action also has the obligation to mark the day of delivery on the action itself.
The limitation periods are subject to the substantive law, as regulated in section 609 and following of the Czech Civil Code. Czech arbitration law does not provide for any special limitation periods or time bars.
Arbitral proceedings are carried out in accordance with the rules agreed to by the parties, the rules of the arbitral body chosen by the parties, the rules established by the arbitral tribunal, or the rules detailed in the CPC. In any case, the arbitral proceedings must comply with such fundamental norms of fairness and substantial justice as the right to be heard, equality between the parties and the adversarial nature of the trial.
The arbitral tribunal is vested by the claimant by way of a written arbitration request, comprising, inter alia, the following relevant details: name and address of the claimant, applicable identification data, identification information regarding the respondent, the object and value of the claim, the full reasoning of the claim etc.
Where the arbitration is held in front of an arbitral institution, the parties shall follow the procedural rules of that institution.
In terms of applicable provisions enacting limitation periods or time bars which may affect the dispute, the parties should be aware that, pursuant to the Romanian legislation, claims having a pecuniary object are subject to the statute of limitations. The time limits triggering the limitation period are different and dependent on the nature of the dispute. However, the general limitation period is of three years, as of the date when the holder of the right to claim knew or was supposed to know, under the circumstances, the effectiveness of its right.
Unless otherwise agreed by the parties, the arbitral proceedings shall commence on the day that the institution receives the request for arbitration or statement of claim, in case an arbitration is administered by the arbitral institution.
In an ad hoc arbitration, the proceedings shall commence on the day when the respondent receives the request for arbitration or statement of claim and a notice on appointment of arbitrator.
Arbitration law do not provide for the limitation periods/time bars with regard to the commencement of the procedure. However, rules of statute of limitation contained within substantive laws apply and are of relevance when deciding on when the request for arbitration should be filed.
Under Article 22 of the Arbitration Law, the Claimant shall submit an request for arbitration and the underlying contract which contains the arbitration clause or an arbitration agreement to the arbitration commission. Afterwards, the Claimant shall deposit an advance on the arbitration fees in accordance with the fee schedule of the arbitration institution.
Per Article 188 of the General Rules of the Civil Law of the People’s Republic of China, the statute limitation to commence an arbitration proceeding for domestic disputes is generally three years with certain exceptions provided in specific laws. For example, Article 129 of the Contract Law of the People’s Republic of China (“the Contract Law”) stipulates that the limitation period for disputes of international sales and technology imports and exports is four years, commencing from the date on which the party discovered or should have discovered the harm. However, the four-year limitation period does not apply to disputes arising from joint venture agreements.
a. The parties are free to agree upon the procedural rules of the arbitration. If no such agreement has been made, the Arbitral Tribunal decides on the procedural rules to apply in the matter at issue.
Neither the Danish Arbitration Act 2005 or the DIA-Rules contains general rules on limitation periods or time bars. Such rules are subject to agreement by the parties or – in the absence of such an agreement – the decision of the Arbitral Tribunal.
Under arbitration law, proceedings may be commenced by serving a request for arbitration on the respondent, designating the parties, the dispute, and the arbitration agreement, and also by appointing an arbitrator, if the party is entitled to do so. Unless otherwise agreed, the date of service is deemed to be the time of commencement of the arbitration.
However, the Rules of the Court of Arbitration at the Polish Chamber of Commerce provide for two alternative ways of initiating proceedings, by filing either a request for arbitration or a statement of claim with the Court of Arbitration.
Arbitration law does not provide for any special limitation periods. The statute of limitations in Poland is governed by substantive law. Under those rules, applicable when Polish substantive law applies, the statute of limitations is interrupted by any action before a state court or in arbitration which is aimed at pursuing, declaring, satisfying or securing a claim.
Thus, in arbitration, effective service of a request for arbitration or a statement of claim on the respondent (as provided in CPC) or the arbitration institution (as provided under the Rules of the Court of Arbitration at the Polish Chamber of Commerce), as the case may be, is deemed to interrupt the statute of limitations, but only if the arbitral tribunal is competent to hear the case.
Consequently, a party commencing an arbitration must be aware of the risk that if it turns out that the arbitral tribunal does not have jurisdiction in the matter, the statute of limitations will not be deemed to have been interrupted but will continue to run until the case is brought before a state court.
In accordance with art. 181 PILA and art. 372 CPC arbitral proceedings are deemed commenced from the moment one of the parties seizes the arbitral tribunal designated in the arbitration agreement or, in the absence of such designation in the arbitration agreement, when one of the parties initiates the procedure for the constitution of the arbitral tribunal or requests to conduct conciliation proceedings agreed upon by the parties to precede the commencement of arbitral proceedings.
There are no procedural provisions relating to limitation periods under the Swiss arbitration laws. Swiss law does not qualify limitation periods as procedural but rather as a matter of substance and limitation periods are therefore subject to the lex causae. Hence, the law applicable to the substance of the contract in dispute determines the duration of a limitation period as well as the procedural actions that will toll limitation periods.
How an arbitration is commenced is subject to the rules of the relevant arbitral institution which is to govern the arbitration process or those rules and procedures that an ad hoc tribunal may choose to adopt.
UAE – Federal
Where there is no specific time limit in an arbitration agreement or method for determining such a time limit, Article 42 of the UAE Arbitration Law provides for a 6 month period to issue the final award.
This 6 month period starts from the date of the ‘first hearing’.
This period may be expended by ‘no more than six (6) additional months’ unless the parties have agreed otherwise.
Should the Arbitral Tribunal not issue a final award, within the time permitted, the Arbitral Tribunal or a party may request the court to terminate the arbitration or determine the additional period of time required for rendering the Final Award.
The decision of the Court is final and binding, unless agreed otherwise by the parties.
Pursuant to the DIAC Rules (Article 36), an Arbitral Tribunal has 6 months from the date the sole arbitrator or chairman (where three arbitrators are appointed) received the file, to issue the final award.
The above period may be extended by a further 6 months, at the Arbitral Tribunal’s discretion. The Executive Committee of the DIAC may further extend this period, pursuant to a reasoned request from the Arbitral Tribunal or on the Executive Committee’s own initiative, should it ‘decide that it is necessary to do so’.
The closure of proceedings should not be considered as the end of the arbitration process. The Arbitral Tribunal may independently decide to re-open proceeding for the purpose of obtaining additional evidence or appointing a further expert to assist the Arbitral Tribunal with their deliberations. The Arbitral Tribunal is empowered to do so, pursuant to article 34.2 of the DIAC Rules.
The ADCCAC Rules (Article 27) also provide for an initial period of 6 months from the date the file is received, for an arbitrator or panel of arbitrators to issue the final award.
The Arbitral Tribunal may, on its own initiative or at the request of one of the parties, extend the time to issue the final award by up to 3 months.
The Committee (the body in charge of administrating commercial arbitration cases) may grant a further extension of time to issue the final award, upon the reasonable application of either the Arbitral Tribunal or one of the parties.
UAE - Free-zone Jurisdictions
Neither the DIFC-LCIA Arbitration Rules (for a DIFC seated arbitration), the DIFC Arbitration Law, nor the ADGM Regulations provide for a time limit for the issue of the final arbitral award.
The 1996 Act requires service of written notice in accordance with s.14. Further, it states that the Limitation Acts 1980 and the Foreign Limitation Periods Act 1984 apply to arbitral proceedings as they apply to legal proceedings (s.13(1)). In summary, for contractual and tortious claims, the relevant period will be six years from accrual of the cause of action.
Article 27(1) of the Law of Arbitration states that the arbitration proceedings will commence on the day a request for arbitration made by one arbitration party is received by the other party, unless otherwise agreed by both parties.
Article 3 of the Implementing Regulations states that, in the absence of a special provision of law, the periods mentioned in the Law and its implementing regulations shall commence on the following day of the notification unless otherwise agreed by the parties.
Article 11 of the Implementing Regulations states that in case of multiple parties of arbitration, the procedures shall commence on the day on which the last party receives the arbitration request.
As regards limitation periods and time bars, as a general Sharia principle, claimants never lose their legal right as a result of the passage of time. However, in practice, KSA courts may refuse to hear cases when claimants fail timely to raise their claims, i.e. after a long period of time has elapsed since the basis for the claim has arisen, unless claimants provide a legitimate justification for the delay in bringing their claim.
The FAA does not speak to the commencement of arbitral proceedings. There are no limitation periods or time bars for commencing arbitration. However, parties’ claims may be barred by state law governing the statute of limitations related to certain claims.
The request for arbitration must be in writing and must contain a reference to the relevant arbitration agreement and further sufficiently indicate the claims raised. In ad-hoc arbitrations, the proceeding is commenced once the respondent receives the request for arbitration. The applicable statutory period of limitation is thereby interrupted. In arbitrations under the Vienna Rules, proceedings are commenced upon receipt of the request for arbitration by the Secretariat.
The procedure for the commencement of arbitral proceedings is set out in Article 3 of the Rules. To commence arbitration, the claimant must serve a notice of arbitration on the respondent. The arbitral proceedings are deemed to commence on the date on which the notice of arbitration was received by the respondent, unless otherwise agreed by the parties. Arbitrations are to commence within six (6) years of the accrual of the cause of action just like the commencement of actions concerning contracts.
The limitation period within which to bring an application to enforce an arbitral award is six (6) years. This six-year rule, however, applies to an award pursuant to an arbitration agreement which is not under seal or where the arbitration is pursuant to any statute other than the ACA. An application to enforce an arbitral award in the categories referred to above must be brought within six (6) years. This provision has been interpreted to mean that the six-year limitation period starts to count from the day of the accrual of the cause of action resulting in the arbitral award and not from the day the arbitral award was delivered. See Murmansk Steamship Line v Kano Oil Millers (1974) 12 SC 1; City Engineering Nigeria Limited v. Federal Housing Authority (1997) 9 NWLR (Pt. 520) 224. This implies that the accrual of the cause action, the arbitration proceedings, the award and application for enforcement of the award must all occur within six years.
In a bid to ameliorate the hardship that may arise from the decision in Murmansk Steamship Line and City Engineering Nigeria Limited (supra), the Lagos Law provides that in computation of the time for the commencement of proceedings seeking to enforce an arbitral awards, the period between the commencement of the arbitration and the date of delivery of the award shall not be reckoned with. This means that under the Lagos Law, the six-year limitation period starts to run from the day the award is delivered.
Arbitral proceedings are formally commenced with the reception by the Respondent of the request for arbitration submitted by the Claimant (except if the parties agree otherwise).
There are no particular provisions in the LAV regarding limitation periods or time bars. There are however several limitation periods foreseen in other statutes such as the Civil Code, the Commercial Code and other specific legislation. For instance, the Civil Code establishes a limitation period of three years for non-contractual civil liability and a limitation period of twenty years for contractual civil liability.
LAV also determines that the arbitrators should notify the parties of the final arbitral award within a period of 12 months counting from the date of acceptance of the last arbitrator (except if the parties agreed differently). Although this period can be extended by agreement of the parties or by the arbitral tribunal, if the award is not issued within the maximum term, the arbitral proceedings shall terminate automatically and the arbitrators will no longer have jurisdiction to decide on the dispute conferred to them (art. 43 (3) LAV).
Subject to the parties’ agreement to the contrary, arbitral proceedings are commenced when a statement of claim is received by a respondent. Whereas under the rules of some arbitral institutions a request for arbitration is sufficient to commence arbitral proceedings, others provide for filing the statement of claim. Under Russian law, limitation periods are a part of the substantive law and, thus, would depend on the applicable law. In particular, the Russian Civil Code sets out a general three-year statute of limitations, starting from the date when the claimant became aware or should have become aware of the violation of their rights. Although the statute of limitations is extendable, it cannot exceed ten years from the date of the violation.
Arbitral proceedings are deemed to have commenced on the date on which the parties to an arbitration agreement so provide or, in default of agreement, on the date on which a written communication containing a request for the dispute to be referred to arbitration is received by the respondent. Apart from the provision in relation to commencement, there are no arbitration-specific limitation periods or time bars. Limitation periods in respect of various causes of action are as set out in the Statute of Limitations, 1957, as amended.
The arbitration process is normally initiated by the issuance of a “notice to arbitrate”. This is a formal letter from one of the parties to the other where particulars of the dispute are given, and a request to resolve the dispute by arbitration is made. A particular point to note is that such notice will prevent prescription of a claim.
Unless otherwise agreed by the parties to the dispute, the arbitration proceedings regarding a certain dispute shall commence on the date on which respondent has received the petition to bring the matter before an arbitral tribunal. The petition must designate the parties as well as the subject matter of the litigation, and it must indicate that an arbitration agreement was concluded, section 1044 ZPO.
The commencement of the arbitral proceedings effects the suspension of the limitation period according to German substantive law. Apart from this, the parties should pay attention to the time limits determined by the parties themselves or the arbitral tribunal during the arbitration proceedings (section 1046 (1) ZPO).
Section 1048 ZPO complements this rule by defining the consequences of the default of a party. Accordingly, the arbitral tribunal is entitled to terminate the proceedings if claimant fails to submit its statement of claim in accordance with the applicable time limits (section 1048 (1) ZPO). Likewise, if respondent fails to submit its statement according to the applicable time limitation, the arbitral tribunal shall continue the proceedings and render an award, section 1048 (2) ZPO. Such an award is enforceable under German law if the respondent was given sufficient opportunity to present his counter arguments.
Unless otherwise agreed by the parties, if the arbitral proceedings are organized and administered by an arbitral institution, the arbitration proceedings commence on the date when the arbitral institution receives the statement of claim. In other cases where the arbitration proceedings are not organized and administered by an arbitral institution, the arbitration proceedings commence on the date when the respondent receives the notice that the opposing party appointed an arbitrator or proposed a sole arbitrator, accompanied by the statement of claim and an invitation to appoint the other arbitrator or to declare whether it accepts the sole arbitrator.
The Croatian Arbitration Act does not contain provisions on the statute of limitation, thus, the statute of limitation is regulated by the substantive law applicable to the subject matter of the dispute.
The International Commercial Arbitration Rules of CAM Santiago, state that an arbitral proceeding commences upon the sending by the claimant of the request of arbitration to both the respondent and CAM Santiago. The claimant shall also accompany the payment of the advance or proof thereof, of part of the administrative fees of CAM Santiago (Articles 5(1) and 5(2)).
Under the ICAL, the arbitration proceeding commences on the date the respondent receives the claimant’s request of arbitration, unless otherwise agreed by the parties (Article 21).
As for the limitation periods, parties shall comply with the statues of limitations established in the law applicable to the substance of the dispute.
The manner of commencing arbitration proceedings depends on the rules adopted by the parties. In case of domestic or international institutional arbitration, the procedure of the arbitration institution chosen by the parties shall be observed. For an ad hoc arbitration, the law provides the manner for its commencement. In case of ad hoc domestic arbitration, Section 5(a) of R.A. 876 requires the initiating party to serve a demand for arbitration upon the other party. Such demand should contain the nature of the controversy, the amount involved, if any, and the relief sought, together with a true copy of the contract providing for arbitration. The demand shall be served upon any party either in person or by registered mail.