Is the law governing international arbitration in your country based on the UNCITRAL Model Law? Are there significant differences between the two?
International Arbitration (4th edition)
In July 2018, Argentina passed an international commercial arbitration law based on the 1985 UNCITRAL Model Law on International Commercial Arbitration, including 2006 amendments (“Model Law”). The Law on International Commercial Arbitration (“LICA”) was enacted by Law No. 27,449, in force as of 3 August 2018.
There are no significant differences between the LICA and the Model Law.
Since 2006, the Austrian arbitration law is based on the UNCITRAL Model Law with a few minor deviations. Significantly, Austrian arbitration law does not differentiate between domestic and international arbitration.
ICAA is based on the UNCITRAL Model Arbitration Law 1985 (the Model Law) and implements its principles and most of its recommendations, but ICAA has not been updated according to the amendments to the UNCITRAL Model Arbitration Law as of 2006. Following the model of arbitration provided by the Model Law, ICAA covers all stages of the arbitral procedure, from the arbitration agreement to the setting aside of the award and recognition and enforcement of a foreign award.
There are certain differences with the Model Law,: ICAA does not provide an opportunity for the suspension of the setting aside proceedings in order for a chance to be given for additional actions that may eliminate the grounds for setting aside; and, the case law held that when the award is challenged on a ground that affects only a part of it and this part is separable and relatively independent from the rest of the award, only this part of the award may be set aside.
Several pieces of proposed legislation aimed at reforming arbitration in the U.S. have been introduced in recent years. Three notable bills before the current Congress are:
- The Forced Arbitration Injustice Repeal Act, S. 610, 116th (2019–2020), which would prohibit a predispute arbitration agreement from being valid or enforceable if it requires arbitration of an employment, consumer, antitrust, or civil rights dispute.
- The Arbitration Fairness for Consumers Act, S. 630, 116th Cong. (2019–2020), which would prohibit a predispute arbitration agreement from being valid or enforceable if it requires arbitration of a dispute related to a consumer financial product or service.
- The Restoring Statutory Rights and Interests of the States Act of 2019, S. 635, 116th Cong. (2019–2020), which would make it so that courts, rather than arbitrators, would have to decide whether arbitration agreements are valid and enforceable.
The law governing international arbitration in Canada is based on the UNCITRAL Model Law. Every international commercial arbitration statute, except those in British Columbia and Quebec, incorporate the UNCITRAL Model Law as a schedule. In British Columbia and Quebec, the statutes applicable to international commercial arbitrations are generally consistent with the UNCITRAL Model Law.
(a)Law 101/1987 applies exclusively to international commercial disputes and it is almost identical to the UNCITRAL Model Law of 1985.
(b) The only addition to the Law 101/1987 is the definition of “commercial arbitration” and the definitions of “international” and “commercial” disputes. Even though Law 101/1987 incorporates fully the UNCITRAL Model Law, it does not incorporate the amendments which have been made in 2006.
Czech law governing arbitration is influenced by the UNCITRAL Model Law. However, there are differences between the two systems. For instance, arbitrability is more narrowly defined under Czech law and the arbitrators do not have some of the powers foreseen in the UNCITRAL Model Law. Arbitrators cannot, for instance, issue interim measures.
UAE – Federal
UAE Arbitration Law has significant similarities to the UNCITRAL Model Law. However, issues of authority to enter an arbitration agreement have not been clarified under the UAE Arbitration Law and as such, arbitral awards still run the risk of being nullified if it is determined that the such authority was lacking.
UAE - Common Law Jurisdictions
Both the DIFC Arbitration Law and the ADGM Arbitration Regulations are largely based on the UNCITRAL Model Law with no significant differences.
The UNCITRAL Model Law has not been adopted in England and Wales but it has influenced the 1996 Act. Some significant differences relate to arbitrability, separability of arbitration clauses, competence of the arbitral tribunal to rule on its own jurisdiction and judicial intervention (including the availability of appeals on a point of law).
The German Arbitration Law is based on the UNCITRAL Model Law on International Commercial Arbitration. However, it is applicable to any kind of arbitration with a German seat, and not only to "commercial disputes" in "international arbitration", for which UNCITRAL had prepared its "Model Law".
The main differences between the German arbitration law and the UNCITRAL Model Law are:
- Formal requirements for the arbitration agreement are more flexible;
- The option to request a ruling from a court on the admissibility of arbitration prior to the constitution of the arbitral tribunal (section 1032 (2) ZPO);
- Greater powers of state courts with regard to the appointment of arbitrators (e.g. if there is a preponderance of one party in the constitution of the tribunal) and with regard to the enforcement of interim relief;
- In case the parties did not agree on the applicable substantive law: obligation for the arbitral tribunal to apply the law of the country to which the subject matter is most closely connected (1051 ZPO); and
- Time limits for the initiation of annulment proceedings.
Germany has not adopted the 2006 amendments of the UNCITRAL Model Law. A task force is currently exploring how to reform the German arbitration law, it also considers the 2006 amendments of the UNCITRAL Model Law.
The Arbitration and Conciliation Act, 1996 is based on the United Nations Commission on International Trade Law (UNCITRAL) Model and is broadly compatible with the “Rules of Arbitration of the International Chamber of Commerce”.
Further, in its judgment in Chloro Controls (I) P Ltd v Severn Trent Water Purification Inc [(2012) 9 SCALE 595], the Supreme Court observed that the legislative intent of the Arbitration and Conciliation Act, 1996 is to harmonise domestic and international commercial arbitration with the UNCITRAL Model Law, the New York Convention and the Geneva Convention.
No, the Arbitration Law is not based on the UNCITRAL Model Law (“Model Law”).
One significant difference between the two laws is in how they define a foreign arbitral award. The Arbitration Law classifies a foreign arbitral award as an award made outside the jurisdiction of Indonesia, while the Model Law defines “international arbitration” as an arbitration process with at least one of these elements:
- The parties to an arbitration agreement have their places of business in different countries;
- One of the following places is situated outside the State in which the parties have their places of business: (i) the place of arbitration, (ii) the place where a substantial part of the obligations of the commercial relationship are to be performed, or (iii) the place with which the subject matter of the dispute is most closely connected; or
- The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.
Another significant difference between the Model Law and the Arbitration Law is that the Arbitration Law does not address the issue of court ordered interim relief in support of arbitration. We rarely see Indonesian courts issue interim relief that supports (rather than restricts) arbitration. In contrast, Article 17 of the Model Law concerns the power of an arbitral tribunal to order interim measures. This may result in a substantial gap. Without clarity on how a request for interim relief should be dealt with by an arbitral tribunal, the parties lack an effective mechanism to obtain interim relief.
Furthermore, Article 70 of the Arbitration Law contains an unusual provision which can set aside an arbitral award that is alleged to contain one of the following elements:
- after the award is rendered, documents submitted in the proceedings are found to be falsified or are declared fraudulent;
- after the award is rendered, documents are found which are decisive in nature and which were deliberately concealed by the opposing party; or
- the award is rendered as a result of fraud committed by one of the parties in the proceedings.
Article 70 of the Arbitration Law appears to expressly apply a more restrictive threshold for setting aside an arbitral award. In practice, however, without clarity on the meaning of ‘false document’ and how the term ‘fraud’ should be assessed, this provision could lead to an automatic annulment request from an award debtor. It is also unclear why the traditional grounds for setting aside an arbitral award under the Model Law – namely, a party’s lack of capacity to enter into an arbitration agreement, a breach of natural justice, jurisdictional overreach, irregularities in the appointment of the arbitrators and, most importantly, a breach of public policy – are not included in the Arbitration Law.
The Liechtenstein law on arbitration has been modelled on the basis of the Austrian law on arbitration which is in turn based on the UNCITRAL Model Law. As a consequence, the first eight out of the 10 Titles of the Eighth Section of the Liechtenstein CCP replicate the structure of the UNCITRAL Model Law. But the Liechtenstein law on arbitration has a wider scope than the UNCITRAL Model Law in that it does not only govern international commercial arbitration but also national and international commercial and non-commercial arbitration.
The Arbitration Act is based substantially on the UNCITRAL Model Law, subject to some alterations.
In this regard, some of the notable differences are as follows (not exhaustive):-
- Section 17 of the Arbitration Act provides that an order made prior to the replacement of an arbitrator shall not be invalid merely because there was a change in composition of the arbitral tribunal;
- the Arbitration Act makes a distinction between domestic and international arbitration when determining the number of arbitrators where parties could not agree on the appointment of such;
- Section 27(d) of the Arbitration Act provides that in the event the claimant fails to proceed with its claim, the arbitral tribunal may make an award dismissing the claim or give directions, for the speedy determination of the claim.
- Matters covered under Part III and IV of the Arbitration Act are not specifically dealt with under the UNCITRAL Model Law; and
- The Arbitration Act provides for an order for security for costs as an interim measure where no such provisions are accorded under the UNCITRAL Model Law.
Yes, it is based on the UNCITRAL Model, but with minor modifications, such as:
- The Mexican commerce Code has not yet adopted the 2006 Amendment to article 7 regarding the formation of the arbitration agreement.
- Article 1467 sets forth the criteria and procedure that courts must follow when a party requests the court to appoint an arbitrator.
- The number of arbitrators when parties fail to agree on that issue.
The ACA regulates international arbitrations. It is largely based on the UNCITRAL Model Law with slight modifications. Part I of the ACA (that is, sections 1 to 36 of the ACA) applies to domestic commercial arbitration while Part III of the ACA (containing sections 43 to 55 of the ACA) applies solely to international commercial arbitration, in addition to other provisions of the ACA. The ACA also embodies the UNCITRAL Arbitration and Conciliation Rules and the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
The Arbitration Act is based on the UNICITRAL Model Law, but Norway has not adopted the UNICITRAL Model Law directly.
On some points, the Act enhances more detailed regulation than the Model Law. Inter alia when it comes to Duty of confidentiality and public access, the Act states that the duty of confidentiality only apply if the parties has so agreed in the arbitration agreement.
Yes. Section 19 of the ADR Act adopted the 1985 UNCITRAL Model Law (Model Law) for international commercial arbitration. There are no significant differences between the ADR Act and the Model Law in the case of international commercial arbitration. Notably, however, the ADR Act made only select provisions of the Model Law applicable to domestic arbitration.
The Arbitration Law is broadly based on the UNCITRAL Model Law. Arbitral awards are not enforceable in KSA if they violate Islamic law or public policy.
Yes, the IAA is based on the UNCITRAL Model Law, with s 3(1) of the IAA giving the UNCITRAL Model Law the force of law in Singapore (the sole exception is Chapter VIII (Recognition and Enforcement of Awards)).
Korea’s Arbitration Act (the “Act”) is modeled after the UNCITRAL Model Law on International Commercial Arbitration as amended in 2006 (the “Model Law”). However, there are notable differences between the two. Notable differences are: (i) the Act omits Article 34(4) of the Model which states that at the request of a party a court may suspend a set-aside action; (ii) the Act allows a party to challenge the arbitral tribunal’s ruling on its own jurisdiction to a competent Korean court within 30 days (Article 17); and (iii) the Act allows a party to challenge the arbitral tribunal’s appointment of an expert (Article 27(3)).
French international arbitration law is not based on the UNCITRAL Model Law. There are, however, not many significant differences between French international arbitration law and the UNCITRAL Model Law. French law generally appears as more favourable to arbitration than the UNCITRAL Model Law in some respects.
For example, contrary to Article 36(1)(a)(v) of the UNCITRAL Model Law, French law provides that the setting-aside of an award by a court at the seat of the arbitration is not a ground to deny enforcement of the arbitral award in France (Omnium de Traitement et de Valorisation - OTV v. Hilmarton, French Court of Cassation, First Civil Chamber, 10 June 1997; Putrabali Société PT Putrabali Adyamulia v. Société Rena Holding et Société Moguntia Est Epices, French Court of Cassation, First Civil Chamber, 29 June 2007).
The EAL is indeed based on the UNCITRAL Model Law (1985), however there exist some differences between both which consist in the following:
- the applicability of the EAL to both domestic and international arbitrations (article 1);
- the possible extraterritorial application of the EAL to proceedings seated abroad only if the parties have agreed to such extraterritorial application (article 1);
- the requirement that an arbitration agreement in an administrative contract is approved by the competent minister or whoever assumes his or her authority with respect to public entities, and delegation in this regard is prohibited (article 1);
- the EAL introduces several criteria for the establishment of the international nature of an arbitration including, amongst others, whether the arbitration is institutional, whether it involves parties whose principal places of business are in different States or alternatively if the place of the arbitration determined by the arbitration agreement, the place of performance of the obligations or the place with the closest connection to the dispute is abroad (article 3);
- the EAL does not expressly include the possibility to enter into an arbitration agreement by way of electronic means. However, it does not exclude it and therefore nothing prohibits the conclusion of arbitration agreements by electronic means and insofar as the electronic communication fulfills the requirement of writing, the arbitration agreement shall be valid. In brief, the writing requirement under the EAL is a condition for the validity of the arbitration agreement and is not simply a mere evidentiary requirement. According to the EAL, an agreement is in writing if it is contained in a document signed by the parties or contained in an exchange of letters, telegrams or other means of communication. Absence of an arbitration agreement in writing results in the nullity of the arbitration agreement and the writing requirement under the arbitration law is stricter than the one under the Model Law (article 12);
- in the case of incorporation by reference, the reference to the arbitration agreement must be explicit in order for the arbitration agreement to form an integral part of the main contract (article 10);
- the EAL does not provide for the ‘referral exception’ whereby a state court may accept to decide over jurisdiction if it finds that the arbitration agreement is null and void, inoperative or incapable of being performed (article 13). However, in practice, some Egyptian courts have considered the validity and operability of the arbitration agreement before an arbitral tribunal rendered its award;
- the EAL requires an odd number of arbitrators for purposes of constitution of the arbitral tribunal, the violation of which leads to the nullity of the award (article 15);
- a preliminary arbitral award on jurisdiction cannot be the subject of a court review prior to the tribunal’s rendering of the final award deciding on the entire dispute must be rendered for purposes of the competent court’s review or annulment (article 22);
- the arbitral tribunal may only issue orders interim relief if the parties bestow this power upon it (article 24);
- if the parties do not agree on the language of the arbitration, the latter shall be conducted in Arabic (article 29);
- if the parties do not agree on the applicable law, the arbitral tribunal may apply the law having the closest connection to the dispute (article 39);
- the threshold used by the EAL for the challenge of arbitrators is relatively higher than its Model Law counterpart; the doubts as to the arbitrator’s impartiality and independence must be serious (article 18);
- the EAL adds a ground for annulment based on the non-application by the arbitral tribunal of the lex causae chosen by the parties (article 53); and
- the EAL introduces a further condition for purposes of exequatur that is not listed in the Model Law, namely: the award does not contradict a prior judgment rendered by the Egyptian courts on the merits of the dispute (article 58).
As mentioned, international arbitration is also regulated by the LAM, which regulated national and international arbitration.
The LAM was originally inspired in the UNCITRAL Model Law; however, several changes were introduced in the version that came into force, which is the reason why the LAM considerably differs from the Model Law. In relation to international arbitration, the LAM has significant differences to the Model Law, since the LAM only has two articles regulating international arbitration, which provide that any person, and the State, can submit themselves to international arbitration if the conditions in Art. 41 are complied with, and the arbitration proceedings could be regulated by international treaties, international instruments or by the laws of the site of the arbitration, including Ecuador.
Notwithstanding these favorable rules, the Constitution introduced a prohibition to the State to agree on international arbitration in case of “execution of international treaties or instruments in which the Ecuadorian State gives up sovereign jurisdiction in favor of international arbitration, in contractual or commercial controversies between the State and private persons or companies”, except in the case of those international instruments “that establish the solution of disputes between States and citizens in Latin America by regional arbitration instances”.
Yes, there are not differences.
Neither the PILA nor the CPC are based on the UNCITRAL Model Law. There are, however, no substantial differences between them.
The AL takes cues from the UNCITRAL Model Law as well as the arbitration laws of the UK, the US, Germany, Japan and France. There are still a number of differences between the AL and the UNCITRAL Model Law to note, however:
- The AL does not allow for arbitrations conducted by ad hoc arbitration institutions. As such, the legal status of ad hoc arbitration is unclear in Taiwan as of the date of this writing.
- Article 21 of the AL expressly sets a time limit for rendering the award, which is not found in the UNCITRAL Model Law.
- Article 17 of the UNCITRAL Model Law allows tribunals to enact interim awards and require the parties to provide a security amount. No equivalent provision exists in the AL.
As noted above Law 2735/1999 incorporated into the Greek legal system the UNCITRAL Model Law, only with minor deviations. Amongst others:
(a) Under article 16 para. 3 L. 2735/1999 in case the arbitral tribunal decides on its own jurisdiction by virtue of a preliminary ruling, the parties are not allowed to bring a separate challenge against it before State Courts. It is deemed an integral part of the final award on the merits and may only be challenged as such only once the award is rendered (by virtue of a request for setting it aside).
(b) Article 15 L. 2735/1999 provides that in case a replacement arbitrator is appointed, absent an agreement by the parties, the arbitral tribunal may by virtue of a unanimous decision decide that arbitral proceedings will resume from the point of interruption.
(c) Article 17 para. 2 L. 2735/1999 provides that the interim or conservative measures granted by the arbitral tribunal shall be imposed – enforced by a decision of the competent One - Member Court of First Instance following petition of the interested party. Para. 3 of the same article provides that said enforcement decision may be revoked or amended by a decision issued by the same State Court.
(d) Article 33 L. 2735/1999 does not provide for an additional award as to claims made before the arbitral tribunal but not decided.
(e) Article 7 L. 2735/1999 introduces certain provisions unknown to Model Law pertaining to the formal validity of the arbitration agreements. A short reference to them is made further below under Question 7.
Further to the above, it has been argued in legal literature that certain differentiations in the (Greek) language of individual provisions of L. 2735/1999 may reflect also differentiations on the merits. We find this approach far-fetched. Absent a clear indication to the contrary based on the drafting history, mere translation questions shall not be elevated to legal ones.
The IAL is based on the UNCITRAL Model Law. There are no significant differences between the two.