Linda Silberman Conference

NYU’s Center for Transnational Litigation, Arbitration, and Commercial Law is hosting a conference in honor of Professor Linda Silberman.  The first woman law professor to receive tenure at NYU, Linda retired from NYU School of Law last year after contributing for more than 50 years through her research, her teaching, and her charisma to shaping NYU School of Law into what it is today.

The conference will take place in person on April 20 & 21, 2023 at NYU. The conference is divided into seven parts, dedicated specifically to Jurisdiction, Choice of Law, Recognition & Enforcement of Judgments, Comparative LawTransnational Civil Litigation, International Arbitration, and Personal Reflections (reserved for personal remarks by friends and colleagues of Linda Silberman). 

The Center is glad to be able to announce that the following colleagues will participate in the two-day event in person: José Enrique Alvarez (NYU), Jodi Balsam (Brooklyn), John Bellinger (Arnold & Porter), Pamela Bookman (Fordham), Gary Born (WilmerHale), Hannah Buxbaum (Indiana University), Trey Childress (Pepperdine), Jack Coe (Ppperdine), Lord Lawrence Collins (Essex Court Chasmbers), Giuditta Cordero-Moss (Oslo University), Kevin E. Davis (NYU), Bill Dodge (UC Davis), Robin Effron (Brooklyn), Maggie Gardner (Cornell), Paul Herrup (Office of Foreign Litigation), Harold Hongju Koh (Yale), Alexander Layton (Twenty Essex), Eva Lein (Lausanne), Pedro J. Martinez-Fraga (Bryan Cave Leighton Paisner, NYU), Dean Troy McKenzie (NYU), Arthur Miller (NYU), Yuko Nishitani (Kyoto), Marta Pertegás Sender (Maastricht), Aaron Simowitz (Willamette), Allan Stein (Rutgers), Symeon Symeonides (Willamette), Louise Ellen Teitz (RWU), Peter Trooboff (Covington & Burling LLP, Washington), Tobias B. Wolff (Penn), and Katrina Wyman (NYU).  Justice Sotomayor will participate by Zoom.

The Center thanks Professor Katrina Wyman for the continuous and unwavering support in putting this conference together. Without her help this conference would not be taking place.

Please see here for the schedule of events.

Also, please note that although there is no charge to participate in the event, you will need to register to gain access to NYU.

The recent amendments to the Italian arbitration: new rules on the law applicable to the merits

Introduction

The purpose of this paper is to assess whether the reformed Article 822 of the Italian Code of Civil Procedure (“CCP”) is consistent with the reform’s goal of making Italy a more attractive arbitral seat. The paper focuses only on the possibility for the parties to choose the law applicable to the merits of their dispute, codified in the new Article 822 CCP. It does not analyze the part of Article 822(2) CCP concerning the determination of the law applicable to the merit absent valid choice by the parties. 

  1. The parties’ freedom to choose the law applicable to the merits before the recent amendments:

Party autonomy in arbitration is not limited to the power to submit the dispute to arbitration and to appoint arbitrators. It normally includes the freedom for the parties to choose the substantive law that applies to the merits of their dispute[1]. Indeed, most arbitration laws[2] expressly contain an “arbitration-specific conflict rule”[3] that establishes the connecting criteria by which arbitrators shall designate the law applicable to the merits and, therefore, prevent recourse to general conflict rules in arbitration[4]. These provisions recognize the importance of party autonomy as the main connecting criterion by which the law applicable to the merits is designated and require arbitrators to apply the law chosen by the parties[5], even when the law chosen is not that of a country connected with the dispute[6]. Additionally, many of these provisions use the expression “rules of law”[7],  and thus, do not limit the parties’ choice to “a law”, understood as an exhaustive national corpus of law[8]. The former includes not only national laws, but also non-State rules[9], which may be chosen by the parties as substantive rules to govern the merits of their dispute. Therefore, the use of the expression “rules of law” is intended to broaden the range of substantive rules to which the parties can subject their relationship[10]. In arbitration, the choice of “rules of law” has the same value as the designation of a “law” (i.e., a national body of law), since these rules occupy the same place as state law in the hierarchy of sources applicable to the merits[11]. Arbitration in Italy is primarily regulated by Articles 806-840 CCP, but none of these provisions expressly recognize the power of the parties to choose the substantive law applicable to the merits[12]. Italy, after the Legislative Decree nº 209/2006,[13] and until the recent amendments come into effect, lacks an arbitration-specific choice of law rule found in most jurisdictions[14]. In fact, in 2006[15] the legislature profoundly reformed the previous rules on arbitration by eliminating the whole of Chapter IV, Title VII of Book IV of the Italian CCP (the “2006 Reforms”) and, thus, altered the very concept of international arbitration[16]. The reform led to a “monistic” system in which the rules of domestic arbitration are applied to international arbitration, with few exceptions[17]. Consequently, the legislature also eliminated the previous arbitration-specific conflict rule contained in Article 834 CCP providing: “[t]he parties shall have the power to determine by agreement the rules to be applied by the arbitrators to the merits of the dispute or to provide that the arbitrators shall rule according to equity. If the parties do not so provide, the law with which the relationship is most closely connected shall apply. In either case, the arbitrators shall take into account the indications of the contract and the usages of the trade”[18].

Under the 2006 Reforms, and considering the absence of a specific arbitration-specific choice of law rule, all arbitrations seated in Italy became rooted in Article 822 CCP, which merely states that “arbitrators judge according to the norms of law unless the parties have authorized them by any expression to judge according to equity”[19].

The Italian legislature’s failure in 2006 to introduce an arbitration-specific choice of law rule to determine the applicable substantive regime has raised the question of which conflict rule is applicable to establish the substantive law on the merits, specifically in ad hoc arbitrations seated in Italy[20]. In fact, only for the latter type of arbitration, the “general” rules of private international law apply, including the provisions of the Rome I Regulation, where applicable[21]. However, while the Rome I Regulation[22] grants the parties the right to choose the applicable law, it does not allow the choice of “a law” other than that of a State[23]. Consequently, only a choice in favor of the law of a State leads to that law prevailing over otherwise applicable mandatory rules[24]. When, on the other hand, the parties choose to subject their contractual relationship to a soft law regime[25], such a choice solely determines the content of the contract per relationem[26]. This means that the provisions contained in the chosen soft law instrument do not override the mandatory rules of the otherwise applicable law[27]. Conversely, in cases where the arbitration is subject to institutional rules (i.e., the UNCITRAL Arbitration Rules), arbitrators will have to resort to the specific conflict rules contained in the UNCITRAL Arbitration Rules and not to the EU regulations on private international law, which are not of mandatory application in arbitration and are relevant only as default private international law rules[28]. These UNCITRAL Arbitration Rules contain an arbitration-specific conflict rule[29] allowing the parties to choose “rules of law” as those applicable to the merits.

The absence of an arbitration-specific conflict rule in Italy is therefore specifically relevant in the matter of ad hoc arbitrations seated in Italy. For this type of arbitration, the question which remains is whether arbitrators can disregard the parties’ choice of non-state law by invoking the limits imposed on private autonomy by the Rome I Regulation as the default instrument of private international law[30].

To overcome this dilemma, and while simultaneously promoting the goals of legal certainty and predictability in arbitration, it was necessary to reintroduce an arbitration-specific conflict rule in Italy[31].

  1. The Italian arbitration amendment project in the Enabling Act:

In November 2021, the Parliament enacted the Enabling Act of Nov. 26, 2021 nº 206 (the “Enabling Act”)[32] to reform Italian civil procedural law with the aim of promoting “the efficiency of civil procedure[33]” in accordance with “objectives of simplification, expeditiousness, and rationalization” [34]. The Enabling Act, presented as part of the Italian “National Recovery and Resilience Plan,”[35] also authorizes the Italian Government to issue one or more legislative decrees to amend arbitral legislation in compliance with eight (8) specific guiding principles and criteria[36]

As stated in the Report[37] accompanying the proposals presented by the “Luiso Committee”[38] (incorporated into the Enabling Act), the objective of these amendments on arbitration is to “general[ly] enhance[] […] the institution of arbitration” as well as to “strengthen[] […] its specific prerogatives” in order to, “reinforce the confidence in the institution among potential users”[39]. In particular, “it is intended to conform arbitration in Italy to that provided in European rules”[40]. These statements demonstrate that the ratio behind the reform is to improve arbitration in Italy also in light of foreign legal systems considered more advanced in this field,[41] with the ultimate aim of “making arbitration more attractive […] to individuals and foreign investors”[42].

Next, Section d of Article 1(15)[43] introduces the express possibility for a party to choose the law applicable to the merits of the dispute. Specifically, the guiding principle requires the legislature to “provide, in the case of adjudication according to law, the power for the parties to indicate and choose the applicablelaw”[44].  As rightly pointed out in commentary[45], the formula used by the legislature in Section d is ambiguous and incomplete in some respects. First, from a terminological point of view, the simultaneous use of the verbs “indicate” and “choose” is ambiguous. On one hand the term “indicate” can refer to situations where only one option is possible, in contrast with the term “choose” which presupposes the existence of two or more options[46]. Second, the formula generates uncertainty because it does not clarify whether the reference to “applicable law” refers only to “a (State) law” or also includes the possibility for parties to choose non-State “rules of law”. Finally, the formulation is silent on the test which arbitrators should apply to identify the applicable law in absence of a valid choice by the parties[47]. As detailed in the following section, some of these gaps and uncertainties have been resolved by the recent Legislative Decree nº 149/2022. However, the final formulation of Article 822 CCP, which filled the gaps in Section d[48], has also generated its own perplexities.

  1. Critical remarks on Article 822 CCP after the enactment of Legislative Decree of Oct. 10, 2022 nº149

On October 10, 2022, the Italian Government implemented Enabling Act nº 206/2021 with the enactment of Legislative Decree No. 149/2022[49]. Article 3(53) of Legislative Decree nº 149/2022 finally reintroduces an arbitration-specific choice of law rule with the addition Article 822(2) CCP, which will become effective on June 30, 2023. The new provision[50] states that:[51]

 “[w]hen the arbitrators are called upon to decide according to the rule of law [(i.e., as opposed to equity)], the parties in the arbitration agreement or by virtue of a written instrument preceding the initiation of the arbitration proceedings may indicate the provisions or a foreign law as a law applicable to the merit of the dispute. Failing this, arbitrators shall apply the provisions or laws identified under the conflict criteria deemed applicable”.

This provision introduces an arbitration-specific choice of law rule in Italy that recognizes party autonomy as the main connecting criterion. However, this new rule is inconsistent with modern approaches to the law applicable to the merits (A) and does not it eliminate all uncertainties when determining the applicable law (B).

  1. The inconsistency of the new provision with modern approaches to the law applicable to the merit

In this respect, the provision has two problematic aspects. Firstly, the opening sentence of the new provision states that parties may chose the applicable law only “in the arbitration agreement or by virtue of a written instrument preceding the initiation of the arbitration proceedings”[52]. The legislature, in the Explanatory Report to Legislative Decree 149/2022[53], made it clear that this temporal limitation of party autonomy “responds to the logic of identifying in advance […] the applicable law” in order to “allow the arbitrators to consider whether or not to accept the appointment” and thus, avoid “[the] unnecessary waste of procedural activity”[54]. However, this limit on party autonomy is not in line with modern approaches to the parties’ choice of law applicable to the merits. Virtually no other States’ arbitration-specific choice of law rules have a temporal limitation[55]. It is therefore evident that such restriction is inconsistent with the goal of the reform, that is, to shape Italian arbitral legislation in light of foreign legal systems[56].

Secondly, the first sentence of the new provision also provides that the parties may only designate “provisions or a foreign law” as the law applicable to the merits[57]. Through this provision, the legislature eliminated the possibility for parties to choose Italian law as the law applicable to the merits of the dispute. Even this type of limitation on party autonomy is not in line with similar arbitration-specific choice of law rules, which do not provide such limitation[58]. Indeed, in almost all arbitration-specific choice of law rules[59], the parties are free to choose any “law” (understood as an exhaustive national corpus of law), not subject to the same restrictions that apply under the conflict of law rules in litigation[60]. Surprisingly, the legislature instead decided to limit the range of laws that parties can designate by excluding the possibility for parties to have Italian law governing the dispute.  This decision contrasts with the reform’s goal of promoting Italian-seated arbitration. Eliminating the possibility to choose Italian law does not promote resort to Italian-seated arbitration, but rather pushes Italian companies, with the economic power to impose a choice of law, to avoid Italian-seated arbitration. In fact, if these companies want Italian law to apply to the merits of a dispute, they will be prompted, because of this provision, to turn to other arbitral seats with greater autonomy.

  • The uncertainties generated and unresolved by the new provision

The new provision generates uncertainties that the legislature could have avoided. The employed formulation, “provisions or a foreign law”, does not expressly clarify whether parties are allowed to also choose non-State rules to govern the merit of the dispute. As pointed out above, the most recent arbitration-specific conflict of law rules allows parties to designate “rules of law” to govern the merits of the dispute[61]. Unfortunately, the new Italian arbitration-specific choice of law rule is ambiguous on this point and does not bring definitive certainty as to whether the parties are allowed to make such rules applicable.  However, it should be noted that in the Explanatory Report to Legislative Decree nº 149/2022, the legislature refers to “lex mercatoria, UNCITRAL Model Law, and others,” in relation to “the type of sources that can be invoked by the parties”[62]. However, if the provision were to be interpreted in the sense of allowing the choice of non-State rules, the legislature would have avoided all uncertainties by drafting the choice of law rule differently.

In addition, the text of the new provision fails to answer a number of questions. First, the provision does not clarify whether the choice of “foreign law” (i.e., an exhaustive national corpus of law) is limited only to the substantive law of that State[63]. Moreover, the provision does not establish whether parties are also allowed to make an implicit choice of law or whether the choice must be explicit[64]. Further, the provision neither determines whether parties have the faculty of choosing more than one law applicable to the substance of the dispute[65], nor does it clarify whether and to what extent a negative choice of law is permissible[66]. Finally, the new paragraph of Article 822 does not elucidate which law should govern the validity of the choice of law.

In light of the critique above, the legislature could have better grasped the opportunity to reform (once and for all) a specific-arbitration choice of law rule resolving these issues.

  1. Conclusion

To summarize, the new Article 822(2) CCP designed by the legislature is, for all the reasons stated above, not in line with the reform’s goal of making Italy a more suitable arbitral seat and is not consistent with modern approaches to the parties’ choice of law applicable to the merits. Indeed, the formulation employed by the legislature, in addition to leaving open a number of uncertainties, limits the autonomy of the parties temporally and substantively (excluding the possibility to choose Italian substantive law to govern the merits of the dispute).  As suggested by commentary[67], I believe that the legislature should have modelled the reform after the arbitration-specific choice of law rule contained in Article 834 CCP, repealed in 2006, instead of adopting the new provision as it stands today.

Bianca Tavarelli is an Italian lawyer currently pursuing the IBRLA LLM at NYU School of Law. After graduating with honors from the University of Pisa and prior to joining NYU, Bianca practiced law as a trainee lawyer in an Italian boutique law firm specializing in Corporate and Business law. She passed the Italian Bar in July 2022.


[1] See C. T KOTUBY, A. POMARI, Do the 2021 Reforms of the Italian Code of Civil Procedure Make Italy a Favorable Seat for International Arbitration?, in Matthias Scherer (ed), ASA Bulletin, pp. 344 – 358 (2022).

[2] See Article 1511 of the French Code of Civil Procedure; Article 187 of the Swiss Private International Law Act; Section 1051 of the German Code of Civil Procedure; Section 46 of the English Arbitration Act; Article 34 of the Spanish Arbitration Act; Section 27a of the Swedish Arbitration Act, introduced in the 2019 revision of the Act.  

[3] Note: in the paper, this expression is used interchangeably with “arbitration-specific choice of law rule”.

[4] See supra note 2.

[5] See supra note 1.

[6] I. e. a neutral law. See. W. KÜHN, Express and Implied Choice of the Substantive Law in the Practice of International Arbitration, in Planning efficient arbitration proceedings/The Law Applicable in International Arbitration, p. 383 – 384 (1996).

[7] See i.e. Article 187(1) of the Swiss Private International Law Act: “ the arbitral tribunal shall decide the case according to the rules of law chosen by the parties”; Article 21 of the ICC rules; Article 35(1) of the UNCITRAL Arbitration Rules; Article 35(1) of the PCA Arbitration rules.

[8] F. FERRARI, L. J. SILBERMAN, Getting to the Law Applicable to the Merits in International Arbitration and the Consequences of Getting it Wrong, in Ferrari and S. Kroll (EDS), Conflict of Laws in the International Arbitration, p. 383 (2011).

[9] Such as “UNIDROIT Principles of International Commercial Contracts”.

[10] See supra note 8.

[11] F. FERRARI, Dell’opportunità di una regola di conflitto per individuare le norme sostanziali applicabili negli arbitrati internazionali con sede in Italia: una proposta, In Studium Iuris, Rivista per la formazione nelle professioni giuridica, rivista mensile n. 9/2021 (2021), p. 1025

[12] See supra note 1.

[13] Legislative Decree February 2, 2006 No. 49.

[14] See supra note 2.

[15] See supra note 13.

[16] D. BORGHESI, La Legge applicabile al merito, in M. Rubino-Sammartano, Arbitrato, Adr, Conciliazione, pp. 567 – 580 (2009).

[17] See supra note 11.

[18] Author’s translation of Article 834 of the Italian Civil Procedure Code, repealed by the Legislative Decree n° 49/2006.

[19] Author’s translation of Article 822 of the Italian Civil Procedure Code.

[20] See supra note 11.

[21] Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I).

[22] Article 3(1) Rome I Regulation.

[23] See. F. RAGNO, Article 3, para 20, in F. Ferrari, Concise Commentary on the Rome I Regulation, 2 ed. (2020).

[24] See supra note 11.

[25] I.e. UNIDROIT Principles of International Commercial Contracts.

[26] See supra note 11

[27] See supra note 11, F. RAGNO: “[t]he parties – by opting for non-national rules – incorporate those rules into the contract as contractual terms and, thus, can derogate from just the non-mandatory rules of the otherwise applicable law”.

[28] See supra note 11; P.A. DE MIGUEL ASENSIO, The Rome I and Rome II Regulations in International Commercial Arbitration, in F. Ferrari, The Impact of EU Law on International Commercial Arbitration, p. 177 et seq (2017).; F. ROSENFELD, The Rome Regulations in International Arbitration: The Road not Taken, in F. Ferrari, The Impact of EU Law on International Commercial Arbitration, p. 245 et seq (2017).

[29] Article 35(1) of the UNCITRAL Arbitration Rules: “The arbitral tribunal shall apply the rules of law designated by the parties as applicable to the substance of the dispute. Failing such designation by the parties, the arbitral tribunal shall apply the law which it determines to be appropriate.”

[30] See supra note 11.

[31] See supra note 11.

[32] Law No. 206/2021, Article 15, November 26, 2021, ( “Enabling Act”).

[33] Author’s translation from the Enabling Act November 26, 2021 No. 206.

[34] Author’s translation of Article 1(1) Enabling Act November 26, 2021 No. 206.

[35] “Piano Nazionale di Ripresa e Resilienza” ( “PNRR”) is the Recovery and Resilience Plan presented by the Italian Government to access the  “Next Generation Eu” funds.

[36] Article 1(15) of the Enabling Act November 26, 2021 No. 206. See specifically paras. a-h.

[37] “Luiso Committee” (see infra) Explanatory Memorandum for the Reform of the Italian Civil Procedure, p. 17 (24 May 2021).

[38] “Luiso Committee” is the Commission for the Development of Interventions on Civil Process and Alternative Instruments (Pres. Prof Francesco Paolo LUISO), established within the Legislative Office of the Ministry of Justice in accordance with the Ministerial Decree of March 12, 2021. 

[39] Author’s translation of  Explanatory Memorandum for the Reform of the Italian Civil Procedure, p. 17 (2021).

[40] Ibidem.

[41] See M. BENEDETTELLI, Lett. D: Legge applicabile, in Benedettelli, Briguglio, Carlevaris, Carosi, Marinucci, Panzarola, Salvaneschi, Sassani, L’arbitrato della legge di delega (commento ai principi in materia di arbitrato della legge di delega n. 206 del 21 novembre  2021, art. 1, c. 15), Rivista dell’Arbitrato, Fascicolo 1, p. 50 – 65 ( 2022).  

[42] Author’s translation of  Explanatory Memorandum for the Reform of the Italian Civil Procedure, p. 17 (2021).

[43] See supra note 32.

[44] Author’s translation of Article 1(15)(d) Enabling Act November 26, 2021 No. 206.

[45] See supra note 41.

[46] Ibidem.

[47] Ibidem.

[48] Particularly the gap relating to the identification of the criteria by which Arbitrators should determine the applicable law in the absence of a valid choice by the parties.

[49] Legislative Decree October 10, 2022, No. 149.

[50] Article 822(2) CCP introduced by the Legislative Decree October 10, 2022, No. 149.

[51] Author’s translation of Article 822(2) CCP introduced by the Legislative Decree October 10, 2022, No. 149.

[52] Article 822(2) CCP.

[53] Explanatory Report to Legislative Decree October 10, 2022, No. 149 of October 19, 2022, Ministry of Justice (2022).

[54] See note 53, p. 99. Author’s translation.

[55] For examples see supra note 2.

[56] See supra Section II, p. 3.

[57] See supra note 52.

[58] See supra note 55.

[59] I.e. Article 1511(1) of the French Code of Civil Procedure, “the arbitral tribunal shall decide the dispute in accordance with the rules of law chosen by the parties or, where no such choice has been made, in accordance with the rules of law it considers appropriate”; Section 27a of the Swedish Arbitration Act, introduced in the 2019 revision of the Act, “[t]he dispute shall be determined by applying the law or rules agreed to by the parties”.

[60] See supra note 8, pp 373 – 374.

[61] See supra Section I, pp. 1 – 2.

[62] See supra note 53, p. 100. Author’s translation.

[63] Namely whether the “renvoi” is prohibited or not, see supra note 8, p. 391

[64] See supra note 8, pp. 388-389.

[65] I.e. “dépeçage” see supra 8, p. 387.

[66] I.e., in contrast with a positive choice of law.

[67] See supra note 11.

Professor Franco Ferrari publishes the three volume Cambridge Compendium of International Commercial and Investment Arbitration

Cambridge University Press has just published the 3 volume Cambridge Compendium of International Commercial and Investment Arbitration, edited by Professor Franco Ferrari, the Center’s Director, together with Professors Andrea Bjorklund (McGill University School of Law) and Stefan Kröll (Bucerius Law School). The Compendium contains contributions for most of the foundational principles and concepts underlying international arbitration. Each contribution takes a holistic view of international arbitration, as the contributions tackle core concepts from both a commercial and an investment arbitration perspective, focusing on the fundamental issues underlying the various topics rather than on the solutions adopted in any particular jurisdiction, thus making the Compendium a truly cross-border, transnational resource. This innovative approach will allow readers to identify the commonalities as well as the differences between commercial and investment arbitration, whether and where cross-fertilization has taken place and what consequences it can have. This approach allows the Compendium to be a tool in promoting the creation of a culture of international arbitration that considers commercial arbitration and investment arbitration as part of a whole but with certain distinct features particular to each.

The Compendium is organized in 14 parts, namely Foundations, Public Law Questions Relating to Arbitration, Stakeholders in Arbitration, Applicable Law, Jurisdiction of the Arbitrator, the Arbitral Tribunal, Procedural Questions in Arbitration, Role of State Courts in Arbitration, Awards, Post Award Issues, Legal Concepts, Areas of Concern, Arbitration and Related Fields, and EU Law and Arbitration.

The contributors of the 70 papers composing the Compendium are, in the order of publication of their contribution, Florian Grisel, Emmanuel Gaillard, Franco Ferrari, Friedrich Rosenfeld, Fabien Gélinas, Andrea K. Bjorklund, Petra Butler, Marc Bungenbergl, August Reinisch, Giuditta Cordero-Moss, Daniel Behn, Christopher R. Drahozal, Victoria Shannon Sahani, Stephan Wilske, Laura Bräuninge, Andrea Carlevaris, Luke Nottage, Chester Brown, Luca G. Radicati di Brozolo, Christophe Bondy, Lukas Vanhonnaeker, Shahla Ali, Sabine Katrin Neuhaus, Monique Sasson, Jonathan Brosseau, Christophe Seraglini, Julien Fouret, Stavros Brekoulakis, Vladimir Pavić, Stefan Kröll, Elian Keller, John J. Barceló III, Alan Scott Rau, Jan Paulsson, Thilo Kerkhoff, R. Doak Bishop, Caline Mouawad, Jessica Beess und Chrostin, Kun Fan, Jacomijn van Haersolte-van Hof, Mathew Stone, Sébastien Besson, S. I. Strong, Maxi Scherer, Dharshini Prasad, Dina Prokic, Chiara Giorgetti, Saud Aldawsari, D. Brian King, Elliot Friedman, Tibor Várady, Christopher Kee, Gloria Alvarez, David Holloway, Christopher Boog, N. Jansen Calamita, Dafina Atanasova, Edna Sussman, Frédéric Bachand, Patricia Shaughnessy, Linda J. Silberman, Robert U. Hess, Geneviève Saumier, Francesca Ragno, George A. Bermann, Mark Feldman, Laurence Boisson de Chazournes, Elise Ruggeri Abonnat, Diego P. Fernández Arroyo, Alexandre Senegacnik, Stephan W. Schill, Susan D. Franck, Michael Waibel, Gerhard Wagner, Ronald A. Brand, Catherine Kessedjian, Ursula Kriebaum, Richard Happ, Sebastian Wuschka

Apart from having edited the Compendium, Professor Franco Ferrari co-authored two contributions, entitled “Limitations to Party Autonomy in International Arbitration” (pp. 47-81), and “Applicable Law in Commercial Arbitration” (pp. 482-511) respectively. For more information, please see the Contents pages taken from the Compendium.

Empirical Data on Annulment of International Awards: What to learn from it? ArbDossier.com and Beyond

On March 6, 2023, the Center for Transnational Litigation, Arbitration, and Commercial Law will host an in-person seminar entitled “Empirical Data on Annulment of International Awards: What to learn from it? ArbDossier.com and Beyond”. The seminar, aimed at both scholars and practitioners, will survey recent initiatives (including ArbDossier) relating to the collection of data on the annulment  of international awards in different jurisdictions, including China, India, Italy, and Singapore, and examine the role this data may play, if any, in the selection of the seat of arbitration. The seminar will also address the question of whether the data may be used to qualify a jurisdiction as an arbitration-friendly one and, if so, what implications this qualification may have.
 
The seminar will feature Dr. Monique Sasson (a former scholar-in-residence at the Center), Marco Seregni (an Italian lawyer enrolled in our LL.M. program), Bojana Bilankov (a graduate student in out IBRLA LL.M. program and editor-in-chief of ArbDossier), Murtuza Federal (the founder of the Indian firm Federal & Company), Gautam Bhattacharyya (a partner at Reed Smith LLP, operating out of London and Singapore), and Devarsh Saraf (a graduate student at Columbia Law School), the co-founder of www.ArbDossier.com.

For more info, please see the attached flyer.

Professors Ferrari, Rosenfeld & Kotuby publish a book entitled “Recognition and Enforcement of Foreign Arbitral Awards: A Concise Guide to the New York Convention’s Uniform Regime”

The Center is glad to announce the publication of the book entitled “Recognition and Enforcement of Foreign Arbitral Awards: A Concise Guide to the New York Convention’s Uniform Regime”, authored by the Center’s Director, Professor Franco Ferrari, together with Dr. Friedrich Rosenfeld, Global Adjunct Professor at NYU Paris and Partner at the Hamburg based law firm Hanefeld, and Professor Charles T. Kotuby, Professor of Practice and Executive Director of the Center for International Legal Education at the University of Pittsburgh.


The book analyses case law from major arbitration jurisdictions in view of examining the New York Convention’s scope of application, the duty to recognize and enforce arbitration agreements and arbitral awards as well as its limitations, the grounds for refusal related to jurisdiction, the grounds for refusal related to proper notice and the ability to present one’s case, the grounds for refusal related to procedure, the grounds for refusal related to the award’s status under the #law applicable to it, as well as the grounds for refusal related to public policy, and the procedure and formal requirements for recognition.


Combining insight from arbitration practice with perspectives from private international law, the book underlines the importance of the Convention being a treaty of international law, arguing that this entails a requirement to autonomously interpret the key concepts it relies on. However, the book also shows where municipal laws are relevant and discusses the private international law principles through which these instances can be identified.


Addressing one of the core treaties of international arbitration, this book is a useful reading for practitioners and judges alike.


For more info, please click here.

Professor Franco Ferrari’s keynote address on “National International Commercial Arbitration” available now

On 25 and 26 August 2022, the Center for Transnational Litigation, Arbitration, and Commercial Law hosted, together with Columbia Law School and the Arbitration Channel,  a conference on “Arbitration in 2 Worlds” focusing on peculiarities of the Brazilian and the US arbitration regimes. On that occasion, the Center’s Director, Professor Franco Ferrari, gave the keynote address entitled “National International Commercial Arbitration”, based on a recent publication of his (32 Am. Rev. Int’l Arb. 439 (2022), available here). In this address, Professor Ferrari highlighted the importance played by national arbitration laws and their many differences. This lead Professor Ferrari to state that the differences in the various national arbitration regimes, which may apply during an arbitration’s life cycle, do not allow one to speak of a uniform concept of “international commercial arbitration” subject to a uniform regime, although there are, of course, very many common traits in each international commercial arbitration. It is therefore correct to state, as one commentator had just done in the Handbook of International Arbitration, that “such label[s] do not do justice to the complexities of arbitration law and convey an impression of uniformity that does not correspond to reality”.

The video of Professor Ferrari’s keynote is now available on the Arbitration Channel’s YouTube channel.

Professor Franco Ferrari to give keynote speech at CIArb / CSP Brazil 2022 – Capacity Sharing Program – Goiânia Edition 2022

On October 10th, 2022, Professor Franco Ferrari, the Center’s Director, will participate as the keynote speaker in the CIArb / CSP Brazil 2022 – Capacity Sharing Program – Goiânia Edition2022. The two-day event, to take place on October 10th and 11th, 2022, and put together by the co-chairs Rose Rameau and Mauricio Gomm, will feature speakers with diverse backgrounds who will give a comprehensive introduction to international arbitration, namely Aureliano Amorim, Caroline Bradley, Napoleao Casado, Paulo Marcos de Campos Batistas, Katherine Dedrick , Frederico Favacho, Hon. Judge Andrea Galhardo Palma, Lucas Mendes, Marlos Nogueira, Thiago Marinho Nunes, Jim Reiman, Christiane Reis, Carla Sahium, and Carol Santoro.

As for Professor Ferrari’s talk, it will be entitled “Is Arbitration a Global Dispute Resolution Phenomenon”. It will show that even though arbitration is a global phenomenon, and even though there may be a global notion of arbitration, there is and will be no global arbitration regime.

For more information on the program and how to register, click here.

Professors Ferrari and Torsello publish the third edition of their book “International Sales Law – CISG in a nutshell”

Professor Franco Ferrari, the Director of the Center, and Professor Marco Torsello, professor of law at Verona University School of Law and Global Professor of Law (at NYU Paris), have just published the third edition of their book on the 1980 United Nations Convention on Contracts for the International Sale of Goods. The Convention, which covers more than 3/4 of world trade, is in force in 95 States, including the United States and its most important trading partners. The book, which is part of West’s Nutshell series and is aimed at both practitioners and scholars, covers the Convention’s basic rules one should be aware of, so as to avoid surprises when doing business with parties having their place of business in other countries. For more information, please click here.

Center co-hosts the 2022 M&A Conference of the Americas to take place in Brazil

The Center is very glad to be able to announce that it will be one of the co-hosts of the 2022 M&A Conference of the Americas to take place in person on 8 August 2022 in São Paulo, Brazil. The event, co-hosted by FGV – Fundação Getulio Vargas (Núcleo de Direito, Economia e Governança) and the School of Law of the University of São Paulo, will be divided into 7 sessions and feature the organizers, Professor Maurizio Levi-Minzi (Adjunct-Professor at NYU and Partner at Debevoise & Plimpton), Professor Mariana Pargendler (from FGV DIREITO SP and Global Professor of Law at NYU Law in Buenos Aires), Professor Carlos Portugal Gouvêa (from USP and Founding Partner of PGLaw), and the following speakers and moderators: Marcelo von Adamek, Paulo Cezar Aragão, André Rodrigues Corrêa, Rodrigo Fialho Borges, Paula Forgioni, Felipe Nutti Giannattasio, Ítalo Godinho Martins, Juliana Krueger Pela, Fernando Magno, Francisco Marino, Judith Martins-Costa, Carlos Portugal Gouvêa, Guilherme Recena Costa, Tarcila Reis Jordão, Francisco Reyes Villamizar, Gabriel Saad Kik Buschinelli, Peter Christian Sester, Renata C. Steiner, Carlos Ari Sundfeld, José Alexandre Tavares Guerreiro, Marcelo Trindade, and Lie Carmo.

For more information and the full program, please click here.

Professor Franco Ferrari to give opening speech at the very first NOVA Summer School on International Arbitration

The Center is glad to be able to announce that on 11 July 2022, Professor Franco Ferrari, the Center’s Director, will give the opening speech on the occasion of the very first NOVA Summer School on International Arbitration, which will take place in person from 11-18 July 2022 in Lisbon. In his speech, entitled “national international commercial arbitration”, Professor Ferrari will

elaborate on his view, expressed in various papers, that it is national law that confers juridicity to arbitration, i.e., “where the source of [the arbitrators’] power and the legal nature of the process and of the ensuing decision stem from” (Gaillard).

Professor Ferrari joins a stellar group of academics and practitioners involved in the Summer School, namely Gustavo Fernandes, Joana Galvão Teles, Lauro Gama Jr, Elena Gutiérrez García de Cortázar , José-Miguel Júdice,, Jan Kleinheisterkamp  Fernando Mantilla-Serrano, André Marini, Sofia Martins, Pedro Metello de Nápoles, André Pereira da Fonseca, Georgios Petrochilos QC, Ina Popova, Ashique Rahman, Mélanie Riofrio Piché, Catherine Rogers, Eduardo Silva-Romero, Patricia Saiz, Luís Heleno Terrinha, Pacome Ziegler, and Gary Born, who will give the closing speech.

For the full program, see here.

Professor Franco Ferrari appointed by the European Commission to its list of arbitrators in disputes under the European Union’s trade agreements with third countries

On 23 Jun 2022, the European Commission published the outcome of the selection process for arbitrators and trade and sustainable development (TSD) experts in bilateral disputes under the European Union’s trade agreements with third countries. The Center is delighted to be able to announce that Professor Franco Ferrari, its Director, was named as an individual suitable for appointment as arbitrator in the above setting.


By way of background: in December 2020, the European Commission called for applications in connection with the renewal of the pool of arbitrators and the separate pool of trade and sustainable development (TSD) experts for dispute settlement panels under trade agreements to which the EU is a party. A selection panel of experienced international judges and academics examined the candidates to confirm their suitability for appointment.


Following the above step, the Commission decided to draw up its lists of individuals suitable for appointment. The Commission will draw on the lists to make proposals for the appointment of arbitrators and TSD experts in a specific case or for pre-agreed lists (rosters) under the relevant bilateral agreements with third countries. The Commission notes that inclusion in the list of suitable individuals does not guarantee the appointment for any specific case or roster in the future.

For the complete list, see here.

Center co-hosts webinar on Evidence in International Arbitration

The Center for Transnational Litigation, Arbitration, and Commercial Law is glad to be able to invite you to a webinar entitled “Evidence in International Arbitration” to take place on June 30, 2022, starting at 9.30 am (NY time)/15.30 (CET). The event, which is co-hosted by  the  Danish Institute of Arbitration (DIA), and the Copenhagen Business School (CBS), will address various issues regarding evidence in international arbitration raised by some of the contributions to the “Handbook of Evidence in International Arbitration: Key Issues and Concepts”, which Professor Franco Ferrari and Dr Friedrich Rosenfeld have just published. Specifically, after a few introductory comments by Professor Ferrari and Professor Peter Arnt Nielsen (from CBS), the following topics will be addressed by the following colleagues: “The Interplay Between the Post-award and the Pre-award Regimes with Respect to a Tribunal’s Treatment of Evidentiary Issues” –  Friedrich Rosenfeld; “Iura Novit Curia” –Giuditta Cordero-Moss; “Tribunal-Appointed Experts” –Jonathan Lim; “Costs and Other Sanctions” –Hattie Middleditch; “The Danish Perspective” – Kenneth Hvelplund Pedersen and Hon. Julie Arnth Jørgensen. Steffen Pihlblad, the Secretary-General of DIA, will give the closing remarks.

For more info, please see the attached flyer.

Debating Evidence: Inspired by the Handbook of Evidence in International Commercial Arbitration

The Center hosted an event entitled “Debating Evidence: Inspired by the Handbook of Evidence in International Commercial Arbitration” on June 10 in Vienna. This event was cosponsored by Baker McKenzie and VIAC and featured several panels including:

·         The normative framework on evidentiary issues – Friedrich Rosenfeld (Partner, Hanefeld) challenged by Helmut Ortner (Partner, Peters Ortner Partner)

·         Privilege – Klaus Peter Berger (Professor, University of Cologne) challenged by Valentina Wong (Counsel, Wolf Theiss)

·         Costs and sanctions – Hattie Middleditch (Associate, Sullivan Cromwell) challenged by Natascha Tunkel (Partner, Knoetzl)

The event was moderated by Niamh Leinwather (Secretary General, VIAC) and Désirée Prantl (Counsel, Baker McKenzie).

For more information, please see the flyer

Professor Franco Ferrari to give a talk at the first ever Italian Arbitration Day

On  June 2022, Professor Franco Ferrari, the Center’s Director, will give a talk on the law applicable to the merits on the occasion of the first ever Italian Arbitration Day (IAD), which is to take place in Rome on June 9, 2022. The event, put together by the Associazione Italiana per l’Arbitrato – AIA and the Milan Chamber of Arbitration (CAM) with the support of several Italian and international organizations (including the Consiglio Nazionale Forense, the International Council for Commercial Arbitration, the International Federation of Commercial Arbitration Institutions (IFCAI), the United Nations Commission on International Trade Law, UNIDROIT, and the Union Internationale des Avocats), will focus on the imminent reform of Italian arbitration law. The event will be divided into four sessions (dedicated to the arbitrator’s duty of disclosure, issues of interim relief in arbitration proceedings, the law applicable to the merits, and the enforcement of arbitral awards respectively). The sessions will be preceded by opening remarks by Andrea Carlevaris and Stefano Azzali (Director, CAM), and a general introduction to the reform by Professor Massimo Benedettelli.

Professor Ferrari will share his session, which will be moderated by Professor Luigi Fumagalli with Professor George Bermann. While Professor Bermann will address the law applicable to the merits in case of a choice of law by the parties, Professor Ferrari will focus on the law applicable absent such choice.

For the event flyer, see here.

Professor Franco Ferrari gives keynote address at the 4th Athens International Mediation and Arbitration Conference

Professor Franco Ferrari, the Center’s Director, will give the keynote address entitled “The law applicable to the arbitration agreement” on the occasion of the 4th Athens International Mediation and Arbitration Conference to be held in Athens on June 1st and 2nd, 2022. Professor Ferrari, who specializes in international commercial and investment arbitration, will show why the answer to the question of which law applies to arbitration agreements depends at what point in time over the course of the life-cycle of an arbitration the question is asked, and for what purpose, and by whom. There is no one-size-fits all answer to the question.

Here is the program with more information.

Professor Franco Ferrari publishes paper on “National International Commercial Arbitration

Professor Franco Ferrari, the Center’s Director, has just published a paper entitled “National International Commercial Arbitration” in 32 American Review of International Arbitration 439 (2022). In the paper, Professor Ferrari elaborates on the view, expressed in various earlier papers (including in Plures Leges Faciunt Arbitrum, 37 Arbitration International 579 (2021) – available here: https://academic.oup.com/arbitration/article/37/3/579/6246135?login=true; Lex Facit Arbitrum 2.0, Diritto del commercio internazionale 915 (2021)) that it is national law that confers juridicity to arbitration, i.e., “where the source of [the arbitrators’] power and the legal nature of the process and of the ensuing decision stem from” (Gaillard). This new paper, which is a review article of International Commercial Arbitration. A Handbook edited by Stephan Balthasar, relies on the Handbook’s various chapters (addressing the New York Convention as well as arbitration law in Austria, Belgium, Brazil, China, England and Wales, France, Germany, Hong Kong, India, the Netherlands, the Russian Federation, Singapore, Spain, Sweden, Switzerland, and the United States) to corroborate the findings of the earlier papers. At the same time, it allows the reader to identify the many areas in which national law is relevant in the international commercial arbitration context.

Finding a ‘cat’s chance in hell’: jurisdictional challenges in multi-tier arbitration clauses [1]


[1] Republic of Sierra Leone v. SL Mining Ltd [2021] EWHC 286 (Comm) [36] (Eng.).

Multi-tier arbitration clauses are increasingly utilized as a way of allowing parties to settle a dispute before arbitration. However, with the increased use of such clauses comes a greater concern about the clause’s effect on the arbitral proceedings – does non-compliance with any one step of the clause invalidate the arbitral tribunal’s jurisdiction? While academic scholarship is firmly on the side of characterizing this as an admissibility issue, case law is still rather split. The English High Court (Commercial Court Division) recently grappled with this very problem in Republic of Sierra Leone v. SL Mining Ltd. In a commercially minded judgement, Sir Michael Burton endorsed the predominant academic scholarship, holding that compliance with a multi-tier dispute resolution clause is not an issue of substantive jurisdiction for the purposes of the Arbitration Act of 1996, but a question of admissibility for the tribunal to determine. This paper takes a closer look at the case and argues that SL Mining crucially clarifies the English position, which had been left uncertain by previous case law, and significantly brings English law in line with the academic authorities on the issue.

I. Factual Background

The underlying dispute arose out of the grant of a 25-year mining licence and subsequent licence agreement by the government of Sierra Leone to SL Mining on 29 March 2017 and 6December 2017 respectively. The parties had inserted the following provision into the mining licence and agreement (“MLA”), stating that:

6.9 Interpretation and Arbitration

  • The parties shall in good faith endeavor to reach an amicable settlement of all differences of opinion or disputes which may arise between them in respect to the execution performance and interpretation or termination of this Agreement…
  • In the event that the parties shall be unable to reach an amicable settlement within a period of 3 (three) months from a written notice by one party to the other specifying the nature of the dispute and seeking an amicable settlement, either party may submit the matter to the exclusive jurisdiction of a Board of 3 (three) Arbitrators who shall be appointed to carry out their mission in accordance with the International Rules of Conciliation and Arbitration of the… ICC.’ [1]

The licence was suspended on 3 July 2018 and then terminated unilaterally by Sierra Leone. SL Mining then served a notice of dispute on 14July 2019, triggering the three-month ‘amicable settlement’ period stipulated in clause 6.9(c). On 20 August 2019, SL Mining invoked the Emergency Arbitrator provisions of the ICC Rules which require the service of a Request for Arbitration (“RFA”) within 10 days of the request for emergency relief. [2] Pursuant to clause 6.9(c), SL Mining suggested that the emergency arbitrator should defer service of the RFA until the settlement period elapsed on 14 October 2019. However, Sierra Leone insisted that SL Mining serve the RFA within the 10-day period stipulated in the ICC Rules. Therefore, SL Mining served the RFA on 30 August 2019.[3]

During the arbitration proceedings, Sierra Leone challenged the Tribunal’s jurisdiction since the provisions of clause 6.9(c) had not been complied with and arbitration proceedings had been commenced before 14October 2019. The Tribunal rejected Sierra Leone’s challenge, rendering a Partial Award in favor of SL Mining on 6 March 2020.[4] In doing so, the Tribunal concluded that the challenge was not a question of jurisdiction but of admissibility and ruled that SL Mining’s claim was indeed admissible.[5]

Consequently, Sierra Leone brought a challenge in the English High Court with respect to the Award under section 67 of the Arbitration Act. The case raised the issues of whether the prematurity of the RFA challenged the arbitrators’ jurisdiction under section 67, whether Sierra Leone had consented or waived the condition precedent and about what the proper construction of clause 6.9 should be.[6]

II. The High Court’s Judgement

Sir Michael Burton dismissed Sierra Leone’s claim, holding that there was no basis for a challenge under section 67 of the Arbitration Act. In determining the case, Sir Burton tackled the following three issues in turn:

A.     Jurisdiction versus Admissibility within the Scope of a Section 67 Challenge

Burton J cited the distinction between questions of admissibility and jurisdiction, which has recently emerged in English case law[7], starting with Butcher J’s opinion in PAO Taftnet v. Ukraine,  in which he stated that ‘issues of jurisdiction go the existence… of a tribunal’s power to ajudge the merits of a dispute; issues of admissibility go to whether the tribunal will exercise that power in relation to claims submitted to it’.[8] Section 67 of the Act stipulates that a party may challenge an award based on the tribunal’s substantive jurisdiction.[9] The definition of substantive jurisdiction is provided by section 82(1) of the Act and refers back to section 30(1)(c) which provides that ‘the arbitral tribunal may rule on its own substantive jurisdiction… as to…. (c) what matters have been submitted to arbitration in accordance with the arbitration agreement’.[10] In its submission, Sierra Leone had tried to argue that their challenge fell under section 30(1)(c), contending that ‘no matters have been “submitted to arbitration in accordance with the arbitration agreement”’.[11]

After surveying the academic landscape, Burton J concluded that ‘the international authorities are plainly overwhelmingly in support of a case that a challenge such as the present does not go to jurisdiction’.[12] Indeed, the issue of compliance with a multi-tier arbitration clause, in this case, was not a question of whether the claim itself was arbitrable but concerned whether the claim was admissible due to the prematurity of the proceedings. Therefore, it was clearly a matter of admissibility. As such, Sierra Leone would be precluded from a section 67 challenge. Burton J agreed with the Tribunal that if the settlement period is viewed as a condition precedent for the arbitration ‘it could therefore only be a matter of procedure, that is, a question of admissibility of the claim, and not a matter of jurisdiction’.[13]

SL Mining contended that Sierra Leone plainly consented to the RFA being served on 30 August 2019, thereby barring Sierra Leone from bringing forth a challenge according to section 73 (loss of right to object) of the Arbitration Act and Article 40 of the ICC Rules (waiver).[14] Sierra Leone’s rejection of SL Mining’s proposal to postpone service of the RFA until 14October 2019, and insistence that SL Mining complies with the ICC timelines, was deemed by the Court to be implicit consent and waiver of the amicable settlement period.

C.     Construction and Interpretation of Clause 6.9

Both parties clearly considered that the escalation stipulated in clause 6.9 was mandatory and not directory.[15] However, Burton J held that on its proper construction, the period in clause 6.9(c) ‘is subsidiary to the obligation to attempt an amicable settlement’ and as such was not ‘an absolute bar to bringing proceedings within three months’.[16] Instead, the three-month period simply provided a time frame in which the dispute could, but need not, have been resolved amicably. Failing this, it would be subject to earlier proceedings if it were clear that no such objective settlement could be achieved. Given that Sierra Leone had taken drastic action against SL Mining, including a temporary suspension of its licence and a criminal investigation of its employees, it was clear that relations between the two parties were so hostile that ‘there was not a cat’s chance in hell of an amicable settlement by 14 October’.[17] Therefore, even if Sierra Leone had not consented or waived its right to the three-month period, that on an objective analysis, there was no chance that the parties would have reached an amicable settlement by the end of the period and so there was no failure to comply with clause 6.9(c).[18]

III. Analysis

The decision has rightly attracted a fair amount of attention amongst arbitration practitioners and scholars [19]. The decision in SL Mining is of particular interest in light of the prevailing English authorities on challenges to arbitral awards with similar multi-tier dispute resolution clauses. For example, in Sul América CIA Nacional de Seguros v. Enesa Engenharia, the Court held that mediation was not a binding condition precedent to arbitration because the multi-tiered clause did not contain clear language stipulating such a condition.[20] Similarly, in (Wah) Tang v. Grant Thornton International Ltd, the Court stressed that tiered alternative dispute resolution provisions are only enforceable if they outline a clear commitment to the process, with readily identifiable steps.[21] However, in Emirates Trading Agency LLC v. Prime Mineral Exports Pte Ltd, the Court held that a contractually-mandated ‘friendly discussion’ acted as a mandatory condition precedent to the right to refer a claim to arbitration.[22]

Emirates and Tang had attracted vast amounts of criticisms for their treatment of multi-tier dispute resolution clauses as jurisdictional questions and in both cases section 67 jurisdiction was assumed.[23] For example, Merkin & Flannery opined that the decision in Emirates was an ‘unnecessary leap’, turning a binding and enforceable obligation to settle a dispute into a prerequisite to the tribunal’s jurisdiction that ‘may turn out to be dangerous precedent’. [24] As such, Burton J’s decision is even more noteworthy because it signals a welcome clarification on the English position towards multi-tier arbitration clauses. Burton J himself found that the reasoning in these earlier cases was not only unpersuasive and non-binding but also out of step with other academic scholarship on the issue.[25] For example, Born’s treatise on International Commercial Arbitration clearly concludes that ‘pre-arbitration procedural requirements are not “jurisdictional” …. the arbitral tribunal’s resolution of such issues would generally be subject to only minimal judicial review in subsequent annulment or recognition proceedings’ much like other procedural decisions made in the arbitral process.[26] In his work, Paulsson took a similar stance on the question of jurisdiction versus admissibility.[27] In this author’s view, therefore, the judgement in SL Mining signals a shift in the right direction, bringing English law in line with the prevailing academic opinions about multi-tier dispute resolution clauses.

However, while the weight of academic authority in arbitration leans in favor of such a failure to comply with multi-tier arbitration clauses being characterized as an admissibility issue, legal jurisprudence around the world is much more divergent. As one commentator claimed, ‘the lack of coherence in the treatment of such provisions is tangible and significant’.[28] As such, this shift in English law is the first step in crystallizing and clarifying a common law approach to non-compliance with multi-tier dispute resolution clauses. The case has already been followed in NWA v. FSY, another High Court judgement from November, in which Calver J held that a similar failure to mediate before entering into the arbitration was a question of the admissibility of the claim and not the Tribunal’s jurisdiction.[29]

The judgement also brings English law closer in line with the US precedent set in BG Group plc v. Republic of Argentina. In BG, the Court held that the claimant’s failure to comply with the local litigation requirement, which was a condition precedent prior to the arbitration, was a procedural issue and not a jurisdictional one.[30] Two similar decisions have also come out of the Singapore Court of Appeals in BBA v. Baz and BTN v. BTP, in which the judges specifically approved the views expressed by Paulsson and Merkin & Flannery that pre-conditions to arbitration, such as time limits and escalating dispute resolution mechanisms, are matters of admissibility and not jurisdiction.[31]

IV. Conclusion

Ultimately, the decision in SL Mining has clarified the English interpretation of multi-tiered clauses and consolidated a common law approach. Preconditions to arbitration ought to be treated as a mechanism for facilitating settlement but do not constitute an absolute bar to proceedings (or challenges) as they concern the admissibility of a claim in front of the tribunal, not the tribunal’s jurisdiction itself.

Iqra Bawany is an LL.M. Candidate at the NYU School of Law, specializing in International Business Regulation, Litigation & Arbitration. Prior to attending NYU, she received a B.A. in Law from the University of Cambridge and a B.A. in History & Spanish from Columbia University.


[1] Id. at [3].

[2] Int’l Comm. Arb. Arbitration Rules 2021, Appendix V, Article 1(6) https://iccwbo.org/content/uploads/sites/3/2020/12/icc-2021-arbitration-rules-2014-mediation-rules-english-version.pdf  

[3] SL Mining’s parent company also pursued an ICSID claim against Sierra Leone; See Gerald International Ltd v. Republic of Sierra Leone, ICSID Case No. ARB/19/31, Award (July 8, 2020).

[4] Republic of Sierra Leone v. SL Mining Ltd [2021] EWHC 286 (Comm) [4] (Eng.).

[5] Id. at [8].

[6] Id. at [6].

[7] See generally PAO Taftnet v. Ukraine[2018 EWHC 1797 (Comm) [97] (Eng.); Obrascon Huarte Lain S.A. v. Qatar Foundation for Education[2020] EWHC 1643 (Comm) [19] (Eng.).; Republic of Korea v. Dayanni [2020] 2 All ER (Comm) 672 (Eng.).

[8] PAO Taftnet v. Ukraine[2018] EWHC 1797 (Comm) [97] (Eng.).

[9] Arbitration Act 1996 c.23 § 67(1)(a) (Eng., Wales & N. Ir.).

[10] Arbitration Act 1996 c.23 §82(1); § 30(1) (Eng., Wales & N. Ir.).

[11] Republic of Sierra Leone v. SL Mining Ltd [2021] EWHC 286 (Comm) [10] (Eng.).

[12] Id. at [16].

[13] Id. at [21].

[14] Arbitration Act 1996 c. 23 § 73 (Eng., Wales & N. Ir.); Int’l Comm. Arb. Arbitration Rules 2021, Art. 40 (supra note 3)

[15] Republic of Sierra Leone v. SL Mining Ltd [2021] EWHC 286 (Comm) [30] (Eng.).

[16] Id. at [32].

[17] Republic of Sierra Leone v. SL Mining Ltd [2021] EWHC 286 (Comm) [36] (Eng.).

[18] Id. at [37].

[19] See generally Benjamin Tham, Case Note: Republic of Sierra Leone v SL Mining Ltd., 2 Sing. Arb. J. 166, 179 (2021); Masood Ahmed & Syed Ali International Arbitration: Clause & Effect, New L. J., Feb.18, 2022 at 15; Robert Merkin, Substantive Jurisdiction and the Arbitration Act 1996, 3 J. of Bus. L., 273 (2021).

[20] Sul América CIA Nacional de Seguros v. Enesa Engenharia [2012] EWCA (Civ) 638.

[21] (Wah) Tang v. Grant Thornton International Ltd [2012] EWHC 3198 (Ch).

[22] Emirates Trading Agency LLC v. Prime Mineral Exports Pte Ltd [2014] EWHC 2104 (Comm) [26] (Eng.).

[23] See generally Ned Beale & Cara Gillingham, Dispute Escalation Clauses in England and Wales: A New High Water Mark, 26 Int’l Co. & Com. L. Rev., 102 (2015); Louis Flannery & Robert Merkin, Emirates Trading, Good Faith, and Pre-arbitral ADR Clauses: a Jurisdictional Precondition? 31 Arb. Int’l, 63 (2015); Keith Han & Nicholas Poon, The Enforceability of Alternative Dispute Resolution Agreements – Emerging Problems and Issues 25 Singapore Academy of L. J., 455 (2013); Robert Rhodes & Andrew Maguire, Have the risks of ADR Escalation Clauses Reduced?, 82 Arbitration, 16 (2016).

[24] Louis Flannery & Robert Merkin, Emirates Trading, Good Faith, and Pre-arbitral ADR Clauses: a Jurisdictional Precondition? 31 Arb. Int’l 63, 103 (2015).

[25] Republic of Sierra Leone v. SL Mining Ltd [2021] EWHC 286 (Comm) [12] (Eng.).

[26] Gary Born, International Commercial Arbitration(3d ed. 2021), 1000.

[27] See Jan Paulsson, Jurisdiction and Admissibility, 693 Global Reflections on International Law, Commerce and Dispute Resolution (ICC Publishing) 601, 616–617 (2005).

[28] Hamish Lal et al., ‘Multi-Tiered Dispute Resolution Clauses in International Arbitration – The Need for Coherence’ 38(4) Swiss Arb. Ass’n (ASA) BULL., 796 (2020).

[29] NWA v. FSY & ors [2021] EWHC 2666 (Comm) (Eng.).

[30] BG Group Plc. v. Republic of Argentina,134 S.Ct. 1198 (2002).

[31] BBA v. Baz [2020] 2 SLR 453 [77]-[78] (Singapore); BTN v. BTP [2020] SGCA 105 [70] (Singapore).

Professor Franco Ferrari gives a talk at a conference co-hosted by the Institute for Transnational Arbitration and the American Society of International Law

On April 6, 2022, Professor Franco Ferrari, the Center’s Director, will give a talk on the occasion of a conference co-hosted by the Institute for Transnational Arbitration (ITA) and the American Society of International Law (ASIL) to take place in hybrid mode in Washington. The conference, dedicated to “Arbitration in Changed Circumstances”, will be divided into two panels, preceded by a keynote address by Ms. Lucy F. Reed entitled “Arbitration as a Cornerstone for Democracy and the Rule of Law”.

The panel in which Professor Ferrari will participate will focus specifically on how arbitration is adapting to the Covidー19 pandemic as well as shifts in geo-political and geo-economic power, the reassertion of sovereignty in international investment law, and an emerging proliferation of institutional competitors to arbitration. Professor Ferrari will share the panel with Professor Kun Fan from the University of New South Wales, who will introduce and act as the moderator, Professor Pamela Bookman (from Fordham University School of Law), Ms. Meg Kinnear, the Secretary-General of the International Centre for Settlement of Investment Disputes (ICSID), Ms. Natalie Y. Morris-Sharma, a government legal counsel at the Attorney-General’s Chambers of Singapore, and Professor August Reinisch (from the University of Vienna).

In his talk, Professor Ferrari will focus on the effect of the Covid-19 pandemic on arbitration and suggest that, even though the importance of the pandemic on arbitration cannot be denied, for very many obvious reasons, the pandemic was not really the original trigger of some of the changes which have occurred over the last two years, but rather a catalyst. The pandemic has accelerated a movement that goes further back, but it has not itself triggered the changes.

To register for this event, please visit the ITA-ASIL Conference website.

Center hosts a series of webinars on “Contract Law for Arbitrators: Brazilian Law, New York Law, and Transnational Law”

The Center will host a webinar series entitled “Contract Law for Arbitrators: Brazilian Law, New York Law, and Transnational Law. The four webinars, to be held on April 20 and 29, and May 3 and 13th, 2022, which will be moderated by Professor Franco Ferrari, the Center’s Director,  and Professor Cristiano de Sousa Zanetti form Universidade de São Paulo, will address four specific contract law issues, which over the last years have been the focus of many arbitration proceedings all over the world, namely contract interpretation , change of circumstances and economic hardship, good faith, and penalty clauses. Each issue will be examined from the perspectives of Brazilian law, New York law, and transnational law, including the United Nations Convention on Contracts for the International Sale of Goods (CISG), by leading arbitration practitioners, such as Rafael Alves, Eduardo Damião Gonçalves, Benno Kimmelman, D. Brian King, Juliana Krueger Pela, Catarina Monteiro Pires, Ina Popova, and Laurence Shore.

Participation in the webinars is free of charge but requires registration. To register, follow the links to be found on the attached flyer.

Digital Dispute Resolution Rules: Challenging awards under the Arbitration Act 1996

In 2021, the UK Jurisdiction Taskforce of the Lawtech Delivery Panel (“UKJT”),[1] a body established by the Secretary of State for Justice, and chaired by the Master of the Rolls, published Version 1.0 of the Digital Dispute Resolution Rules (“the Rules”).[2] These arbitration rules, which operate under the law of England and Wales, are intended to be used by parties in commercial disputes, in particular in disputes involving “cryptoassets, cryptocurrency, smart contracts, distributed ledger technology, and fintech applications”.[3]

The Rules are less than a year old and, at the time of writing, there are no published awards or decisions on any challenges under them. However, they recently received the approval of the Law Commission of England and Wales in its advice to Government on smart contracts in November 2021, where they were discussed in detail, and described as “particularly well-suited for disputes involving smart legal contracts”.[4] The increasing use of distributed ledger technologies and smart contracts, coupled with the growing sophistication and size of decentralised finance,[5] make it very likely the Rules will have an increasingly important role going forward.

While the Rules are not the only arbitration rules proposed for smart contracts (the JAMS rules were published in 2018 but remain in draft),[6] they have a number of innovative features which the JAMS rules do not. As such the Rules are innovative even within this new frontier of dispute resolution. These features may give rise to unique implications in eventual challenges under the Arbitration Act 1996, and in particular challenges under s.67 (substantive jurisdiction) and s.68 (serious irregularity) of the Act.[7]

Innovative Features of the Rules and Challenges under s.67 and 68 of the Arbitration Act

This paper picks out three innovative aspects of the Rules which may alter how challenges to decisions operate: (1) the provision for on-chain enforcement of arbitral awards by the tribunal;[8] (2) the provision for anonymity between the parties;[9] (3) the provision that “automatic dispute resolution” is legally binding between the parties.[10]

Feature 1: Enforcement by the tribunal

The provision in Clause 11 of the Rules provides for the tribunal to have the power to “operate, modify, sign or cancel any digital asset relevant to the dispute.” This is particularly interesting when understood in the context of disputes arising out of blockchain or distributed ledger technologies (such as those involving cryptocurrencies or cryptoassets). This is because ownership and control of such assets is confirmed by cryptographic means on a distributed ledger, in most disputes satisfying an award would involve taking appropriate steps to record a transaction on such a ledger. The power of a tribunal to operate, modify, sign or cancel any such asset will therefore in many cases be equivalent to the power of a tribunal to enforce the award.

In one sense, this mirrors the result of “on-chain” automatic dispute resolution (discussed briefly below), where awards are often executed automatically on the distributed ledger by a smart contract. But it also represents a radical departure from the traditional enforcement system for arbitration awards.

This power is likely to be attractive to parties using new decentralised technologies where traditional enforcement mechanisms may be more difficult (not simply because of the continuing uncertainty when considering jurisdiction or conflict of laws in distributed ledger disputes, but also because it remains unclear to what extent signatory states to the New York Convention will consider that at least some distributed ledger disputes fall foul of the public interest exception to enforcement). As such, similar powers are likely to be features of arbitration rules for this industry in the future.[11]

By allowing for tribunal enforcement of the award, the party successful in the arbitration obtains benefits which extend beyond those it could obtain from the Courts when seeking security for costs[12] or security for the award[13] when an award is challenged.[14]

Therefore, where tribunal enforcement occurs, a party seeking to challenge an award will find itself facing unique hurdles. While there is no general rule that enforcement should be stayed pending the determination of a Section 68 challenge,[15] the party against whom an award is to be enforced in the English Courts would normally have recourse to the provisions of CPR 62.18(9) (to apply to set aside an order made to enforce an award under s.66 Arbitration Act) and CPR 83.7 (to stay enforcement of an award when converted to a judgment).[16] These are valuable tools to a party resisting an award,[17] but will not be available to a party where tribunal enforcement has occurred under the Rules.

This necessarily changes the balance of power in any challenge under s.67 or s.68, and does so in a way which has the effect of circumventing the balance struck by the Courts and Parliament under the provisions for staying enforcement and providing for security for costs or the award under Arbitration Act 1996. The party holding the award under the Rules (where tribunal enforcement has been used) holds far more cards than they otherwise would. In effect, they will enter any s.68 or s.67 challenge in astronger tactical position than a successful party under other arbitration rules.[18]

Feature 2: Anonymity

The provision for anonymity during an arbitration under the Rules may well be particularly attractive to parties to transactions on the distributed ledger, where anonymity in the transactions themselves is the norm. The Rules have however recognized that absolute anonymity would not be appropriate, providing for disclosure, providing for disclosure of “identity details” when “necessary for the fair resolution of the dispute, for the enforcement of any decision or award, for the protection of the tribunal’s own interests, or if required by any law or regulation or court order”.[19] This language should be wide enough to enable the disclosure of “identity details” when a party wishes to challenge the award.

The identity details are defined by the Rules as “for an individual… evidence as to his or her identity and residence and for a company… evidence as to its identity, place of incorporation and principal place of business”.[20] It is however not clear if  these would be sufficient to enable service of the arbitration claim form, especially given the short time limits under s.70(3) of the Arbitration Act to issue a challenge under s.67 or s.68.[21] (this problem is especially acute if one party is a Decentralised Autonomous Organisation[22]).  These practical uncertainties may well be resolved as challenges occur and decision are reported, but will require resolution by the Courts and early users of this procedure.

Feature 3: Automatic Dispute Resolution

The Rules envision that the parties may engage in automatic dispute resolution, and that such resolution will be binding on the parties. Indeed, the effect of such dispute resolution is often binding in matter of fact because the decision of the process is implemented on-chain by a smart contract. Automatic dispute resolution systems come in different varieties and methods, but often involve the application of game theory (including incentivising decision-makers to make the decision they think the majority will make, rather than the decision they consider ‘correct’[23]), crowdsourced self-selecting juror decision-making, Artificial Intelligence, and appeal or de novo re-hearing procedures.[24]

While the Rules describe automatic dispute resolution as “legally binding”, the Further Guidance published alongside the Rules indicate that the Rules “may, for example, be adopted to resolve disputes as to whether the automatic dispute resolution processes have been properly complied with or has worked as intended. Where such automatic processes are present, the parties will need to agree how the Rules are intended to work alongside them”.[25] This raises the prospect of a situation in which the parties agree to use an arbitration under the Rules to confirm or wrap the decision of an automatic dispute resolution process in a form of an arbitral award.[26] This will give rise to some unique questions when bringing challenges to awards based on automatic dispute resolution processes, among them: (i) Does a jurisdictional challenge have to be taken during the automatic dispute resolution process in order to sustain a s.67 challenge? (ii) Does the general duty of fairness extend to the automatic dispute resolution process, and can a challenge to an award under s.68(2)(a) on that basis be sustained on appropriate facts? (iii) Could the conduct of jurors in automatic dispute resolution give rise to a challenge for serious irregularity? (iv) Would an admission of an irregularity (caused perhaps by a coding or software error) by the provider of the automatic dispute resolution process fall within s.68(2)(i)?

Conclusion

While disputes arising out of cryptoassets, cryptocurrency, smart contracts, distributed ledger technology – and procedures for resolving such disputes – are in their infancy, this survey suggests that, if widely adopted, the Rules will present the Courts with new and difficult questions when considering challenges to awards, requiring an approach as innovative as that shown in the design of the Rules themselves.

Jonathan Schaffer-Goddard is a Barrister practicing from 4 Pump Court Chambers in London and an LLM candidate (Starr Foundation Global Law School Scholarship) in the International Business Regulation, Litigation and Arbitration program at the NYU School of Law. 


[1] More information at https://technation.io/lawtechukpanel/

[2] UK Jurisdiction Taskforce, Digital Dispute Resolution Rules (2021) (“UKJT Rules”), https://perma.cc/FT6E-CUD3

[3] Clause 1, Digital Dispute Resolution Rules

[4] Smart Legal Contracts: advice to Government, Law Commission of England and Wales, 2021, para 5.156 https://perma.cc/4WFA-2JYP

[5] The total value locked (the sum of all assets deposited in decentralized finance protocols) reached USD 250 billion at the end of 2021 on some metrics (https://perma.cc/B8KB-TYEB).

[6] The JAMS Smart Contract Rules (JAMS Rules Governing Disputes Arising out of Smart Contracts) can be accessed at https://www.jamsadr.com/rules-smart-contracts (https://perma.cc/HW6J-MRVE)

[7] Challenges under s.69 of the Act are excluded by the Rules (Clause 16, Digital Dispute Resolution Rules: “… The decision or award of the tribunal is final and binding. There is no right to appeal any award on a point of law, and there is no other right of appeal or challenge to such award except as permitted under the Arbitration Act 1996.” While this excludes s.69 appeals, it cannot exclude appeals under s.67 or s.68).

[8] Clause 11, Digital Dispute Resolution Rules: “The tribunal shall have the power at any time to operate, modify, sign or cancel any digital asset relevant to the dispute using any digital signature, cryptographic key, password or other digital access or control mechanism available to it. The tribunal shall also have the power to direct any interested party to do any of those things.”

[9] Clause 13, Digital Dispute Resolution Rules: “The claimant and each respondent must provide details and evidence of their identity to the reasonable satisfaction of the tribunal. If the incorporating text allows for anonymous dispute resolution, or the parties agree, then a claimant or respondent may provide identity details confidentially to the tribunal alone and need not include them in a notice of claim or initial response. In that case the tribunal shall not disclose the identity details unless disclosure is necessary for the fair resolution of the dispute, for the enforcement of any decision or award, for the protection of the tribunal’s own interests, or if required by any law or regulation or court order.”

[10] Clause 4, Digital Dispute Resolution Rules: “The outcome of any automatic dispute resolution process shall be legally binding on interested parties.”

[11] In light of the challenges that this procedure raises (are set out below), and the likelihood of this procedure being more widely adopted, the problems caused by the use of this procedure may be worthy of consideration by the Law Commission in its recently announced review of the Arbitration Act 1996 (https://perma.cc/BFD5-PUFV).

[12] Section 70(6), Arbitration Act 1996

[13] Section 70(7), Arbitration Act 1996

[14] The circumstances in which the Court will order security for costs or security for the award are limited by considerations of availability of assets (Azov Shipping Co v Baltic Shipping (No 2) [1999] 2 Lloyd’s Rep 39), the prospects of the challenge (MDIL (UK) Ltd v Mittal Steel Skopje (CRM) AD [2008] EWHC 2243 (Comm)) and prejudice on party seeking to enforce if order not made (see for example: Konkola Copper Mines Plc v U&M Mining Zambia Ltd [2014] EWHC 2146 (Comm)). Applications are often unsuccessful.

[15] BSG Resources Ltd v Vale SA & Ors [2019] EWHC 2456 (Comm), at [55]

[16] It has been held by the High Court that there is an inherent jurisdiction to suspend enforcement while a challenge is ongoing, even if no application has been made to enforce the award. Apis AS v Fantazia Kereskedeli KFT[2001] 1 All ER 348. See also Socadec SA v Pan Afric Impex Co Ltd [2003] EWHC 2086.

[17] A v B [2020] EWHC 952 (Comm) is a recent example of a successful application under CPR 62.18(9) to set aside an order to enforce a judgment entered under Section 66 of the Arbitration Act.

[18] The likelihood of this procedure for tribunal enforcement being more widely adopted in the crypto industry means that the impact of tribunal enforcement of an award may be worthy of consideration by the Law Commission in its recently announced review of the Arbitration Act 1996 (https://perma.cc/BFD5-PUFV).

[19] Digital Dispute Resolution Rules, Clause 13

[20] Digital Dispute Resolution Rules, Clause 2

[21] An extension of time is available under s.80(5) of the Arbitration Act 1996. The relevant caselaw and the principles derived from it are set out in State A v Party B & Anor [2019] EWHC 799 (Comm), [28] – [33]

[22] For an explanation of what a DAO is, see: https://ethereum.org/en/dao/ (https://perma.cc/TL3F-F2JV)

[23] Kleros, Short Paper v1.0.7, page 2 (https://kleros.io/whitepaper.pdf

[24] See surveys of such systems in Allen, DWE, Lane, AM and Poblet, M. 2019, The Governance of Blockchain Dispute Resolution, Harvard Negotiation Law Review, vol. 25, pp. 75-101 and Yann, Federico and Bruno, 2021, Decentralized Justice: A Comparative Analysis of Blockchain Online Dispute Resolution Projects, Frontiers in Blockchain, vol 4 (https://doi.org/10.3389/fbloc.2021.564551)

[25] Digital Dispute Resolution Rules, page 12

[26] The status of awards rendered by automatic dispute resolution processes is a matter of debate, and it is likely that in many (if not all) cases they are not by themselves enforceable awards under the New York Convention 1958.