What legislation applies to arbitration in your country? Are there any mandatory laws?
International Arbitration (3rd edition)
Arbitration in Egypt is governed by the Egyptian Arbitration Law (Law 27 of 1994), as amended, which is based on the UNCITRAL Model Law. The Arbitration Law provides provisions and rules for both domestic arbitrations and international commercial arbitrations whose seat of arbitration is in Egypt. No distinction is made between the two in terms of substantive rules and public policies governing the arbitration. The distinction between the two arises in procedural issues such as the location of the court circuit that will enforce the award or determine the award’s validity or lack thereof.
Since Decree No. 2011-48 of 13 January 2011, the main provisions applicable to arbitration in France are set out in Book IV of the Code of Civil Procedure (CCP) (Articles 1442 to 1527). A few provisions on issues of arbitrability can also be found in the French Civil Code (Articles 2059 to 2061). The decisions of the Court of Cassation and of the Paris Court of Appeal are also very important in interpreting the codes and specifying their content because, although there is no doctrine of precedent as such under French law, lower courts generally rely on decisions of higher courts.
French law makes a clear distinction between domestic and international arbitration, although some provisions of the CCP apply to both. Arbitration is deemed “international” when international trade interests are at stake (Article 1504, CCP). This criterion is economic rather than legal and therefore means that the following are irrelevant in determining whether the arbitration is international:
- The nationality of the parties.
- The law applicable to the merits or the procedure.
- The location of the seat.
What matters is that the underlying economic transaction operates a transfer of goods, services or funds across national borders (Paris Court of Appeal, 5 Apr 1990, 1992 Rev Arb 110).
Some of the provisions applicable to domestic arbitration are also applicable to international arbitration (Article 1506, CCP). However, the French legislature has developed two separate regimes, with a number of more liberal principles applicable only to international arbitration.
Only a few mandatory legislative provisions are applicable to international arbitration in France, which is very favourable to party autonomy.
Certain provisions guaranteeing the fairness of the arbitration proceedings cannot be derogated from by the parties or disregarded by the arbitral tribunal. More specifically, the tribunal must always ensure that the principles of equal treatment of the parties and due process are respected (Article 1510, CCP). In addition, arbitrators cannot base their decision on facts or legal rules that were not debated by the parties (Court of Cassation, First Civil Chamber, 29 June 2011, No. 10-23.321).
Moreover, an arbitral award must not violate French international public policy (i.e., the values that are considered to be fundamental to the French legal system). Such violations can lead to the award being set aside. In this regard, the French courts have ruled that the enforcement of an arbitral award can be denied only if giving effect to the award would result in a "flagrant, effective and concrete" violation of international public policy (Paris Court of Appeal, 18 Nov 2004, No. 2002/19606, Thalès; Court of Cassation, First Civil Chamber, 4 June 2008, No. 06-15.320, Cytec). However, certain commentators have criticised this somewhat minimalist approach, advocating a less deferential review. Recent decisions by the Paris Court of Appeal have referred only to an “effective and concrete” violation, suggesting that the French courts may become more willing to carry out a deeper review of the underlying award (Paris Court of Appeal, 4 March 2014, No. 12/17681, Gulf Leaders; 14 October 2014, No. 13/03410, Commisimpex). It remains to be seen whether this standard will be limited to cases where allegations of corruption are made and whether the Court of Cassation will approve it.
There are two (2) legislative acts applicable to arbitration in Cyprus. Domestic arbitration is regulated by Arbitration Law, Cap.4, as amended. International Commercial arbitration is governed by International Commercial Arbitration Law, Law no 101/1987 as amended.
Czech arbitration law mainly consists of the Act No. 216/1994 Coll., on Arbitral Proceedings and the Enforcement of Arbitral Awards (Arbitration Act). It applies to arbitrations based on arbitration agreements concluded after 1st January 1995.
Most provisions of the Arbitration Act are modifiable and give the parties an option to influence the arbitral proceedings, nevertheless some provisions are mandatory. In particular, Section 18 of the Arbitration Act ensuring the parties an equal standing in arbitral proceedings and the opportunity to fully assert their rights.
The Czech Code of Civil Procedure has a supplemental role in arbitral proceedings on issues the Arbitration Act does not regulate. In such cases, provisions of the Civil Procedure Code shall apply accordingly (Section 30 of the Arbitration Act). Based on this principle of subsidiarity, state courts have ruled that some procedural rules originally designed to apply only to court proceedings should apply to arbitral proceedings as well, e.g. the duty to instruct parties that they have not outlined all decisive facts yet.
The recognition and enforcement of foreign arbitral awards is governed by the New York Convention, if an award was issued in a contracting state to the said convention. In other cases, the Act No. 91/2012 Coll., on Private International Law (the PIL Act), which entered into force on 1st January 2014, applies.
The relevant legal provisions governing arbitration are set out in the Civil Procedural Code (the “CPC”). To this end, Book IV of the CPC enshrines the general set of rules applicable to arbitration, covering inter alia the arbitral convention, the arbitral tribunal, arbitration proceedings, the arbitral award and annulment thereof, enforcement of the arbitral award.
In addition, the CPC comprises in Book VII, Title IV – “International arbitration and effects of foreign arbitral awards” a separate set of rules applicable to international arbitration and the effects of foreign arbitral awards.
The arbitration rules set out in the CPC are in general suppletive, parties being free to amend or derogate from them. Notwithstanding, party autonomy is subject to several limitations, parties being required to observe several public policy and mandatory provisions, such as the written form of the arbitral award, the grounds of incompatibility of arbitrators, or the rules regarding arbitrability of disputes.
Relevant legislation in Serbia consists of Serbian Act on Arbitration and provisions of several other legal instruments that contain norms of relevance to the arbitration process.
Act on Arbitration, enacted in 2006, governs all arbitrations that have their arbitral seat in Serbia. It consists of a number of mandatory provisions regarding arbitral proceedings as well as rules on setting aside and recognition of foreign arbitral awards.
Other important source of law for the arbitration seated in Serbia is the Private International Law Act, containing provisions on procedure for recognition and enforcement of foreign arbitral awards and specifying the cases of exclusive jurisdiction of the state court that can affect the arbitrability of the dispute.
Serbian Civil Procedure Act is of relevance to the arbitration in cases when the state court is acting as an authority for arbitration assistance and supervision and intervenes with the arbitral procedure e.g. when taking evidence, when enforcing interim measures or setting aside an arbitral award or deciding on the recognition and enforcement of arbitral awards. In such cases it shall do so in accordance with its own procedures prescribed in the said Act.
Serbian Act on investments also mentions arbitration as a possible means of resolving a dispute arising out of the investment, as an alternative to the state courts.
Major applicable laws for arbitration proceedings in China are the Arbitration Law of the People’s Republic of China (“the Arbitration Law”) and Chapter 28 of the Civil Procedure Law of the People’s Republic of China (“the Civil Procedure Law”), both of which are mandatory laws.
Reference should also be made to interpretations and statements of the Supreme People’s Court of China regarding specific issues in arbitration which provide important clarifications and guidance in many aspects of arbitration law and practice, such as Interpretation of the Supreme People’s Court concerning Some Issues on Application of the Arbitration Law of the People’s Republic of China.
a. Act No. 553 of 24 June 2005 on Arbitration (the “Danish Arbitration Act 2005”) provides the legal framework for arbitration in Denmark. The Act applies equally to national and international arbitration. As only a few of the rules are mandatory, such as section 6, the parties retain autonomy over the dispute resolution process. The Arbitration Act is to a large extent based on the UNCITRAL Model Law.
Arbitration proceedings in Poland are regulated by a separate chapter (Part Five) of the Polish Civil Procedure Code (CPC).
In principle, under Article 1184 §1 CPC, the parties are free to determine the procedure before the arbitral tribunal. However, several provisions of Polish arbitration law are regarded as mandatory.
Mandatory provisions which cannot be contracted around include:
- Challenge of the arbitrators before a state court (Article 1176 § 2 CPC)
- Equal treatment of the parties (Article 1183 CPC)
- The right to be heard and present one’s case (Article 1183 CPC)
- Waiver of the right to object (Article 1193 CPC adopting Model Law Article 4)
- Petition to set aside the arbitral award (Article 1205 CPC).
In Switzerland, international arbitration is governed by chapter 12 of the Swiss Private International Law Act (PILA) which entered into force on 1 January 1989. An arbitration is deemed international, if at least one party to the arbitration agreement had its domicile or habitual residence outside Switzerland at the time of the conclusion of the arbitration agreement. Since 1 January 2011, Domestic arbitration is governed by the 3rd title of the Swiss Civil Procedure Code (CPC). However, parties to an international arbitration dispute may declare the provisions on domestic arbitration of the CPC to apply in lieu of the provisions of the PILA (art. 167 para 2 PILA). Equally, the parties to a domestic arbitration are granted the possibility to agree on the provisions of the PILA to apply instead of the CPC (art. 353 para 2 CPC).
While great emphasis is placed on party autonomy in adapting the arbitral proceedings to their needs, Swiss arbitration law contains several mandatory requirements, namely the provisions on arbitrability (art. 177 PILA and art. 353 CPC), the provisions stipulating the lack of independence or impartiality as grounds to challenge an arbitrator (art. 180 para 1 (c) PILA and art. 367 para 1 (c) CPC), the provisions requiring the arbitral tribunal to ensure equal treatment of the parties and compliance with their right to be heard (art. 182 para 3 PILA and art. 373 para 4 CPC), as well as the provisions providing for assistance by the state courts at the seat of the arbitral tribunal (art. 185 PILA and art. 356 CPC) are among the mandatory rules.
The legislation which applies to an arbitration is dependent on whether the arbitration is governed by the laws of the United Arab Emirates (“UAE”), or by the laws of distinct jurisdictions such as the Dubai International Financial Centre (“DIFC”) or the Abu Dhabi Global Market (“ADGM”), generally understood as “Free-zone Jurisdictions”), both of which have their own arbitration laws/regulations.
UAE - Federal
Federal Law No. 6 / 2018 on arbitration (the “UAE Arbitration Law”) replaced Articles 203 to 218 of Federal Law No. 11/1992 (the “UAE CPC”).
Articles 203 to 218 of the UAE CPC were those provisions which were relevant to arbitration.
This UAE Arbitration Law applies to all arbitral proceedings carried out in the UAE, unless the parties agree to apply a different arbitration law.
Should the parties agree to apply a different arbitration law, that arbitration law must comply with the requirements of public order and morality in the UAE.
UAE - Free-zone Jurisdictions
DIFC Law (No. 1 of 2008, as amended by DIFC Law no. 6 of 2013) (the “DIFC Arbitration Law”), governs arbitral disputes which are subject to the jurisdiction of the DIFC.
The amendment to the DIFC Law No. 1 of 2008 clarified the DIFC Court’s authority to dismiss or stay an action brought before the court (which is also subject to an arbitration agreement) unless it finds ‘that the arbitration agreement is null and void, inoperative or incapable of being performed’’ even where the seat of the arbitration is one other than the DIFC and where no seat has been designated or determined.
The ADGM has established an arbitration hearing centre (the “ADGM Arbitration Centre”) on Al Maryah Island. The ADGM Arbitration Centre became fully operational on 17 October 2018 as a venue for arbitration.
The ADGM Arbitration Regulations 2015 (“ADGM Regulations”), based on the UNCITRAL Model Law will govern arbitrations where the:
seat of the arbitration is the ADGM; or
arbitration agreement applies the ADGM Regulations.
The Judicial Tribunal for the Dubai Courts and the DIFC Courts
Decree no. 19 of 2016 established the Judicial Tribunal for the Dubai Courts and the DIFC Courts (the “Judicial Tribunal”). The Judicial Tribunal was established to deal with issues including conflicts of jurisdiction between the DIFC and Dubai Courts.
A limited number of decisions have been issued by the Judicial Tribunal to date. These decisions generally indicate that for arbitration proceedings that are seated in mainland Dubai, the Dubai (Federal) Courts would have curial jurisdiction, whereas the curial jurisdiction of the DIFC Courts would be limited to those arbitration proceedings seated in the DIFC.
The Arbitration Act 1996 (the 1996 Act) will apply if the arbitration is seated in England and Wales or Northern Ireland. The Arbitration (Scotland) Act 2010 (the 2010 Act) will apply if the arbitration is seated in Scotland. The mandatory provisions are set out in Schedule 1 of the 1996 Act, and s.8 of the 2010 Act. Mandatory provisions include those in relation to duties of the arbitral tribunal and parties, challenges to arbitrators and arbitral awards. Additionally, the Arbitration (International Investment Disputes) Act 1966 sets out a special regime for ICSID awards.
The responses below focus on the 1996 Act and not the 2010 Act.
The Law of Arbitration promulgated by Royal Decree No. M/34 dated 16 April 2012 and its Implementing Regulations, which were passed on 22 May 2017 and came into force on 9 June 2017, apply to arbitration in the Kingdom of Saudi Arabia (the “KSA”).
The above Law of Arbitration repeals the old Law of Arbitration dated 26 April 1983 and all the arbitration provisions comprised in the Law of Commercial Court, promulgated by Royal Instruction No. 32 dated 1 June 1931.
The Law of Enforcement, promulgated by Royal Decree No. M/53 dated 3 July 2012, also applies to arbitration in the KSA.
Without prejudice to the rules of Shariah and the provisions of International Conventions to which the KSA is a party, the provisions of the Law of Arbitration are mandatory for arbitrations seated in the KSA and international commercial arbitrations seated outside of the KSA, if the parties have agreed to subject the proceedings to the KSA Law of Arbitration.
The Law of Arbitration does not apply to disputes related to personal status and matters wherein conciliation is not permitted, including Hudud.
The Federal Arbitration Act (“FAA”) is the controlling legislation governing arbitration at both the state and federal level in the United States. Chapter 1 of the FAA contains general arbitration. It primarily governs domestic arbitrations, but is also relevant to international arbitration to the extent that it does not conflict with Chapters 2 and 3. Chapters 2 and 3 of the FAA incorporate the New York and Panama Conventions, respectively, and thus govern international arbitrations. In addition to the FAA, other laws also regulate arbitration at the federal level, including the Patent Act and the Foreign Sovereign Immunities Act.
Our analysis here focuses mainly on the FAA. However, in the U.S., each state has the power to legislate regarding arbitration and other matters at the state level. Each state has enacted laws that govern arbitration that apply to arbitrations seated in that state. See, e.g., New York Civil Procedure Practice and Rules (“CPLR”), Art. 75. The FAA preempts state laws that are inconsistent with the Act, but state laws that are not contrary to provisions of the FAA are enforceable.
Arbitration law in the U.S. is also developed through case law. Accordingly, practitioners should always look to the case law of the governing jurisdiction in addition to any statutory laws.
If the seat of the arbitration is in Austria, the arbitration proceedings will be governed by Austrian arbitration law, which is contained in the Fourth Chapter of the Austrian Code of Civil Procedure (sections 577–618).
Austrian arbitration law grants the parties extensive autonomy with only few mandatory legal provisions that cannot be waived by agreement of the parties. The parties are largely free to agree on the manner in which their arbitration proceedings shall be conducted. In the absence of such an agreement (which may also be a reference to a set of rules provided by an arbitral institution), Austrian arbitration law applies as default rule. If the agreement of the parties and the Austrian arbitration law are silent, the arbitrators are free to conduct the proceedings at their discretion limited by mandatory law and the fundamental principles of fairness and the right to be heard.
The Arbitration and Conciliation Act (Cap. A18, Laws of the Federation of Nigeria, 2004) (the “ACA”) remains the federal law on arbitration in Nigeria. The ACA mandatorily applies to all domestic arbitrations where parties have not chosen another law to govern the arbitration.
Lagos State also enacted the Lagos State Arbitration Law (2009) (the “Lagos Law”). Unless the parties have expressly otherwise agreed, the Lagos Law applies to all arbitrations where Lagos State is the seat of arbitration. The Lagos Law is a replica of the UNCITRAL Model Law (the “Model Law”), and incorporates the 2006 amendments made to the Model Law.
There is some other legislation that applies to arbitration in Nigeria. Such legislation includes the Judgments Ordinance (Cap. 175) Laws of Federation of Nigeria, 1958 and the Foreign Judgments (Reciprocal Enforcement) Act (Cap. F 35) Laws of Federation Nigeria, 2004 in which judgment has been defined to include awards. Also, rules of procedure for the recognition and enforcement of awards and other arbitration-related proceedings exist in the various rules of courts.
The legislation on arbitration has some mandatory provisions denoted by the use of the word “shall”. See C. N. Onuselogu Ent. Ltd. v. Afribank (Nig.) Ltd. (2005) 1 NWLR (Pt. 940) 577. The failure to comply with such mandatory provisions may result in the successful challenge of an arbitral proceeding or award. For instance, an arbitration agreement must be in writing. Such writing must be contained in (a) a document signed by the parties; or (b) any means of communication which provide a record of the arbitration agreement (such as exchange of letters, telex, telegrams; or (c) in an exchange of points of claim and points of defence in which the existence of an arbitration agreement is alleged by one party and not denied by another. See section 1 of the ACA.
Also, the arbitrators/arbitral tribunal must ensure that there is fair and equal treatment of the parties. See sections 14 of the ACA and 34 of the Lagos Law. An arbitral award must be in writing and signed by the arbitrators, with reasons stated for the absence of any signature by the non-signing arbitrator. It must also state the place and date of the award (sections 26, ACA and 47, Lagos Law). The award or any decision made by a tribunal consisting of three members must be made by the majority (see Article 31 of the First Schedule to the ACA (“the Arbitration Rules”). The absence of the signature of one out of three arbitrators on an arbitral award does not render such an arbitral award invalid. See Gaslink Nigeria Ltd v. Reliance Textile Industries Ltd. (2017) 12 CLRN 1.
Domestic arbitrations must be conducted in accordance with the Arbitration Rules (section 15, ACA). The Arbitration Rules are a re-enactment of the UNCITRAL Model Arbitration Rules. The arbitral tribunal must give adequate advance notice of the date, time and place of the hearings (Article 25 of the Arbitration Rules).
Arbitration in Portugal is governed by the voluntary arbitration act – Decree-Law no. 63/2011, of 14 December 2011 – in force since 14 March 2012, also known as “LAV”.
There are other mandatory laws, however, that rule compulsory arbitration, regarding disputes on subject matters legally bound to be settled under arbitration. Such is the case of disputes related to minimum services during strikes; industrial property rights concerning generic medicines and medicinal reference products; acts of sports federations, professional leagues and other sports entities; consumer claims on essential public services; and compensation settlement in expropriation cases.
The Federal Law “On International Commercial Arbitration” of 1993 (as amended in 2015) (“ICA”) governs international arbitrations seated in Russia.
The Federal Law “On Arbitration (Arbitration Proceedings) in the Russian Federation” of 2015 (“DAA”) governs domestic arbitrations. Some of the DAA’s provisions equally apply to international arbitrations seated in Russia (on requirements to arbitrators, retention of case materials, establishment of permanent arbitral institutions and admission of foreign arbitral institutions, arbitration-mediation relations, and arbitrators’ and arbitral institutions’ liability).
The Code of Commercial Procedure and Code of Civil Procedure govern recognition and enforcement of foreign arbitral awards and ancillary proceedings, as well as a list of non-arbitrable disputes.
The legislation which governs all arbitrations, both domestic and international, in Ireland is the Arbitration Act, 2010 which incorporates the UNCITRAL Model Law into Irish law.
The Norwegian Arbitration Act 2004 provides the legal framework for arbitration in Norway. The Act applies equally to national and international arbitrations. As only a few of the rules are mandatory, the parties retain autonomy over the dispute resolution process. The Arbitration Act is to a large extent based on the UNCITRAL Model Law.
The German arbitration law is enacted as the 10th Book of the German Code of Civil Procedure (Zivilprozessordnung, ZPO), sections 1025 through 1066. The enactment dates back to 1998 and is mostly based on the UNCITRAL Model Law. Germany is a "Model Law Country".
The German arbitration law is based on the principle of territoriality. The regime applies to both domestic and international arbitrations. With few exceptions only, its scope of application is limited to arbitration proceedings seated in Germany, irrespective of the nationality of the parties. The law contains, e.g., also rules on the enforcement of foreign arbitral awards, and they differ slightly from the provisions governing the enforcement of domestic awards.
The basic principle underlying the German arbitration law is party autonomy (section 1042 (2) ZPO). The parties are to a large extent free to determine the arbitral procedure themselves, and they may do so by way of reference to a set of arbitration rules (section 1042 (3) ZPO).
However, the parties are limited by the following mandatory rules:
- Application of the German arbitration law to arbitral proceedings where the seat of arbitration is Germany (section 1025 ZPO);
- The rules on objective arbitrability (section 1030 ZPO);
- Recourse to the state courts for the decision on the validity of the arbitration agreement (section 1032 ZPO);
- The state courts' role in enforcing temporary relief (sections 1033; 1041 (2) and 1041 (3) ZPO) is usually considered mandatory;
- Equal participation and weight of all parties regarding the constitution of the arbitral tribunal (section 1034 ZPO);
- Recourse to the state courts to verify the decision on the challenge of an arbitrator, provided that the arbitral tribunal has rejected the challenge (section 1037 (3) ZPO);
- The tribunal may decide on its own jurisdiction (so-called Kompetenz-Kompetenz, section 1040 (1) ZPO), but the parties cannot rule out the review of that decision by the state courts;
- Respect of the principle of equal treatment of all parties and the parties' right to be heard (section 1042 (1) ZPO);
- Representation by attorneys cannot be excluded per se (1042 (2) ZPO);
A party's general right to initiate set-aside proceedings (section 1059 ZPO) cannot be waived in advance.
There are more mandatory rules in other sources of German substantive and procedural law, and the arbitration proceedings must at all times respect the German public order in order to ensure the enforceability of the award.
Arbitration in Croatia is governed by the Croatian Arbitration Act, published in the Official Gazette No. 88/2001 on October 11, 2001 as in force since October 19, 2001.
Although the parties to the arbitration proceedings are free to choose the applicable arbitration rules, there are some mandatory rules that the parties cannot deviate from. These rules are the rules on arbitrability and public order, as well as some mandatory rules of the Arbitration Act, such as the provisions on the fair trial and equal treatment, provisions on the grounds for challenge of arbitrators, provisions on the appointment of the judges of Croatian courts as arbitrators, provisions on written arbitral awards, content, annulment and state of origin of the arbitral award, and the competence-competence provisions.
Chile has different legislations for domestic and international arbitration. Domestic arbitration regulation is contained in Articles 222 to 243 of the Code of Judicial Organization (CJO) and Articles 628 to 644 of the Code of Civil Procedure (CCP). For all the domestic arbitration matters that are not regulated in such statues, the general rules of civil procedure shall apply. Besides the said provisions of the CJO and the CCP, Chile does not have a law dedicated specifically to domestic arbitration. On the other hand, since September 2004 Chile has a specific law dedicated to international arbitration called the International Commercial Arbitration Law No 19.971 (ICAL), which is almost completely based in the UNCITRAL Model Law. However, Chile has not adopted the 2006 amendments to the Model Law. The CJO, the CCP and the ICAL are official laws of Chile, therefore they are mandatory statutes. Nevertheless, as the arbitration agreement is considered a contract under Article 1.545 of the Civil Code (CC), the parties may adopt different rules to conduct the arbitration procedure, always in respect of public order.