STELLENBOSCH UNIVERSITY FACULTY OF LAW LLM BY COURSE WORK (2012) INTERNATIONAL COMMERCIAL ARBITRATION (54925-813) COMPULSORY ASSIGNMENT: SHORT

PRACTICAL QUESTIONS Instructions for compulsory assignment Students must hand in their answers to this assignment to the module coordinator or the Departments secretary in room 2019 Old Main Building by not later than the commencement of the seminar for part 10 (in terms of the provisional programme) on Tuesday 24 April 2012. No extension to this deadline is possible, because the answers to the questions will be discussed during that seminar. Answer 5 (five) of the following questions. Each question will be marked out of 10 to facilitate grading. The maximum length of answer to any question is 500 words. (Footnotes and references to academic commentators are not required.) Specific references to applicable legislation and rules must be provided, where appropriate. Question 1 An arbitration clause in an international commercial contract between a German party and a Namibian party reads as follows: Disputes arising out of this contract shall be referred to arbitration in London. The contract containing the clause was signed by both parties. Is there an enforceable arbitration agreement? Discuss briefly. Assuming that there is a valid arbitration agreement, how would the arbitral tribunal be appointed? Discuss briefly. Once the tribunal has been appointed would it have jurisdiction to decide a dispute regarding the initial validity of the main contract? Discuss briefly. Finally, briefly mention what improvements you would suggest to the arbitration clause to make it more effective. (10) Is there an enforceable arbitration agreement? - The law - Page 6 part 5 - C v D closest and real connection thus the English Law is applicable know indication Assuming that there is a valid arbitration agreement, how would the arbitral tribunal be appointed? - Page 4 part 3 - Assuming that the arbitration agreement is valid - In this arbitration clause between the parties have not agreed to any Arbitration rules or Arbitration Institution. - No appointing authority, 1

Procedure adopted by the dispute Butler and Finsen distinguish between institutional and ad hoc arbitration. They make it clear that parties that make use of ad hoc arbitration has to make their own arrangements for administrative support and the appointment of the tribunal. Thus in theory there is no institutional involvement. This mean that the arbitral tribunal will be appointed by the party themselves and the administrative support will be done as well. Advantage being parties have control over the procedure.

Once the tribunal has been appointed would it have jurisdiction to decide a dispute regarding the initial validity of the main contract? - The whole question relates to the aspect of severability separating the main contract from the arbitration agreement. - As stated above this arbitration agreement is governed by the English Law, thus the English Arbitration Act of 1996. Section 30 provides unless otherwise agreed by the parties that the arbitral tribunal may rule on its own - See page 35 Fiona Trust and the working of the Severability principle. Finally, briefly mention what improvements you would suggest to the arbitration clause to make it more effective. - The advantages that an ad hoc arbitration has over institutional arbitration is enough to advise the parties to stick to ad hoc arbitration - I will however advise the parties that they include the UNCITRAL Arbitration Rules as set of procedural rules so that they dont have to go into detail about the procedure that needs to be followed. - Also specifying what could be covered and how it could be covered.

Question 2 A long-term contract between a Malaysian importer of iron ore and an Australian mining company relating to the supply of iron ore contains an arbitration clause to the effect that all disputes arising out of or in connection with the contract shall be decided under the ICC Arbitration Rules (2012) by arbitration in Sydney, Australia. As Australia has a federal system, the question arises whether the applicable arbitration law is the Australian International Arbitration Act of 1974 or the arbitration law of the relevant Australian state. Discuss this issue briefly, also with reference to Australian case law and relevant recent developments in Australian law. (10) Question 3 Articles 22 and 24 of the ICC Arbitration Rules (2012) are largely new, with most of their provisions having no or no direct equivalent in the previous 1998 rules. What are the main advantages offered by these new Rules for the parties (as users of ICC arbitrations) and how were they intended to improve perceptions regarding ICC arbitrations in practice? Discuss briefly, also with reference to specific provisions of articles 22 and 24 and relevant policy considerations. (10)
Article 22

PART 4 page 9 and 15 ICC - Article 22 :Conduct of the Arbitration 1 The arbitral tribunal and the parties shall make every effort to conduct the arbitration in an expeditious and cost-effective manner, having regard to the complexity and value of the dispute. 2 In order to ensure effective case management, the arbitral tribunal, after consulting the parties, may adopt such procedural measures as it considers appropriate, provided that they are not contrary to any agreement of the parties. 3 Upon the request of any party, the arbitral tribunal may make orders concerning the confidentiality of the arbitration proceedings or of any other matters in connection with the arbitration and may take measures for protecting trade secrets and confidential information. 4 In all cases, the arbitral tribunal shall act fairly and impartially and ensure that each party has a reasonable opportunity to present its case. 5 The parties undertake to comply with any order made by the arbitral tribunal. Article 24:Case Management Conference and Procedural Timetable 1 When drawing up the Terms of Reference or as soon as possible thereafter, the arbitral tribunal shall convene a case management conference to consult the parties on procedural measures that may be adopted pursuant to Article 22(2). Such measures may include one or more of the case management techniques described in Appendix IV. During or following such conference, the arbitral tribunal shall establish the procedural timetable that it intends to follow for the conduct of the arbitration. The procedural timetable and any modifications thereto shall be communicated to the Court and the parties. 3 To ensure continued effective case management, the arbitral tribunal, after consulting the parties by means of a further case management conference or otherwise, may adopt further procedural measures or modify the procedural timetable. 4 Case management conferences may be conducted through a meeting in person, by video conference, telephone or similar means of communication. In the absence of an agreement of the parties, the arbitral tribunal shall determine the means by which the conference will be conducted. The arbitral tribunal may request the parties to submit case management proposals in advance of a case management conference and may request the attendance at any case management conference of the parties in person or through an internal representative.

Question 4 An arbitration is being dealt with by a three-member arbitral tribunal. Assume that a party wishes to challenge an arbitrator, appointed on the nomination of the other party, on the basis of the arbitrator's perceived lack of impartiality. How would the party's right to bring and proceed with a challenge on this ground possibly be affected by the fact that the arbitration is being held in Switzerland (substantive) under the ICC Rules (procedural)? How would your answer differ if the arbitration was being held under the LCIA Rules (hearing - procedural) in a jurisdiction which applies the UNCITRAL Model Law? (Merits - substantive) Discuss briefly. In your answer you must make specific reference to relevant rules and statutory provisions and also give attention to the identity of the institution which has the final say in determining the challenge, with brief reference to relevant policy considerations. (10)+ Sometime obligation under Swiss and not model Sometime review provision and sometime issint Policy consideration review or not Commissioners report SA- MODEL LAW policy considerations Page 13 Part 7

Question 5 Fiasco PLC (Fiasco), an English company, entered into a commercial contract with a South African company, RBS Ltd (RBS), in terms of which RBS was to perform certain work in Nairobi, Kenya. The contract provides that any disputes arising out of the contract must be referred to arbitration in Nairobi under the UNCITRAL Arbitration Rules with the LCIA designated as the appointing authority. For purposes of your answer, you must assume that Kenya has adopted the UNCITRAL Model Law on International Commercial Arbitration of 1985 without amendment. A dispute has arisen and Fiasco submits a Notice of Arbitration. RBS replies in its Response to the notice of arbitration by asserting that as the agent who signed the contract had no mandate, the main contract is void or alternatively non-existent, with the result that an arbitral tribunal appointed in terms of the arbitration clause has no jurisdiction to hear the dispute. Should the issue of jurisdiction be decided in the first instance by the court or the arbitral tribunal? Discuss briefly. Assume that the jurisdictional issue has been referred to the arbitral tribunal. On the assumption that the agents lack of authority is the only basis on which RBS contests both the claim on the merits and the tribunals jurisdiction, should the tribunal rule on the jurisdictional issue as a preliminary question or in its award on the merits? Discuss briefly. (Your answer to both parts of this question must be supported by appropriate references to relevant provisions of the applicable rules and the Model Law.) (10)

Question 6 Assume that an international commercial arbitration is to be held in Cape Town under the LCIA Arbitration Rules and the Arbitration Act 42 of 1965. To what extent do the provisions of the LCIA Rules on the written stage of the proceedings effectively deal with the problems usually associated with court-style pleadings for defining the issues in dispute and to what extent do they anticipate subsequent requests to the tribunal for disclosure of documents by the other party? Discuss briefly. Does the South African court have the power to order one of the parties to the arbitration to make discovery of documents? Discuss briefly with specific reference to the interaction between relevant provisions of the LCIA Rules and the Arbitration Act. (10) Part 8 page 7 ARTICLE BY BUTLER page 278 Part 4 page 20 PART 2 article on documentary discovery BUTLER article PAGE 5 Deel 3 Question 7 Ford USA entered into a contract with its British subsidiary (hereafter Ford UK) for the manufacturing of a particular Ford car at a car assembly plant in the UK and for the marketing of these vehicles in the UK, Europe and Africa, but in no other areas, particularly North America. The contract is stated to be subject to English law and it is further expressly provided that US Federal Law has no relevance to this contract or any dispute relating to this contract. The contract contains an arbitration clause which provides that any dispute arising out of the contract shall be referred to arbitration in London under the ICC Arbitration Rules (2012). A number of disputes arise, which are referred to ICC arbitration, including a claim by Ford UK that the prohibition on marketing cars in the USA violates the Sherman Act. (You must assume for purposes of your answer that this is a legally valid claim that is entitled to succeed.) Ford USA responds by contending that the entire arbitration clause is invalid and against public policy as being a prospective waiver of the parties rights to pursue statutory remedies for anti-trust violations. How should the arbitral tribunal respond to the contentions of Ford USA? Discuss briefly, with particular reference to your understanding of the interpretation of the relevant case law. (10) Question 8 Assume that South Africa has adopted the UNCITRAL Model Law in the form recommended by the SA Law Commission. An international arbitration is to be held in South Africa under the ICC Rules. The arbitral tribunal has already been appointed and is able to meet at short notice. The dispute concerns a claim by an English company against a South African company for an alleged infringement of copyright. The English company is concerned that the South African company may attempt to destroy or dispose of the infringing copies and to destroy certain sales records. An agent of the English company has also seen certain infringing copies in the shop of a retailer at a popular shopping centre frequented by tourists in Cape Town.

The English company therefore wishes to obtain on order for the preservation of the evidence in possession of the South African company at short notice. It also wants to obtain an order for the production of documents in possession of the retailer which may prove that sales of infringing copies were made by the South African company to the retailer. Should the English company apply to the court or to the arbitral tribunal in respect of each of the two forms of relief sought? Discuss briefly with reference to relevant provisions of the applicable arbitration legislation and rules. (10) Distinction between Granting interim measures and procedural actions Production of evidence and preserving of evidence PART 8.2.1 Total: 5 x 10 = 50
db/ LLM ICA assignment 2012