ATENEO DE MANILA UNIVERSITY SCHOOL OF LAW International Commercial Arbitration Course Outline Second Semester, School Year 2013-2014

Atty. Rico-Pamfilo and Atty. Jun Bautista I. OVERVIEW 1. Introduction Redfern & Hunter, Redfern and Hunter on International Arbitration, 2009, Chapter 1 [except sections 1.126 to 1.151, 1.178 onwards ] i. Alternative Dispute Resolution (General) ii. Meaning of arbitration a. Section 3(d), RA 9285 iii. Relationship between arbitration and the Courts iv. International Conventions a. Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (The New York Convention 1958) b. Convention on the Settlement of Investment Disputes between States and Nationals of States 1965 or ICSID Convention or Washington Convention v. UNCITRAL Model Law on International Commercial Arbitration [ ML Appendix A, R.A. 9285]; 2006 amendments a. international b. commercial Footnote to Art 1(1) ML 2. National legislation in Arbitration i. Single/unified regime: e.g. England, India ii. Separate domestic and international regimes: e.g. Philippines, Australia, Singapore, New Zealand, Canada iii. Multiple regimes: domestic, foreign related and international: e.g. China iv. Relevant legislation: a. The Arbitration Law, RA 876 b. ADR Act of 2004, RA 9285 Art 1(2) ML international Scope of Application - what is international under Model Law? Vanol Far East Marketing Pte Ltd v Hin Leong Trading (Pte) Ltd [1997] 3 SLR 484 Mitsui Engineering & Shipbuilding Co Ltd v PSA Corporation Limited and Keppel Engineering Pte Ltd [2003] 1 SLR 446 v. Special Rules of Court on Alternative Dispute Resolution (October 2009) Distinction between Rules of Arbitration and Law i. UNCITRAL Rules (1976) (2010) (for ad hoc arbitration) and UNCITRAL Model Law Institutional and ad hoc arbitrations i. Role of institutions ii. Institutional Rules iii. Relevant Institutions/facility/associations (examples): a. Arbitration Institutions (a) Philippine Dispute Resolution Centre, Inc (PDRCI) (b) Singapore International Arbitration Centre (SIAC)

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(c) ICC International Court of Arbitration in Paris (ICC)First established as an arbitration branch of ICC in 1923. (d) American Arbitration Association(AAA) they have more than 33 offices throughout the United States. The AAA was founded in 1926. International cases of AAA are handled by International Centre for Dispute Resolution (ICDR) (e) China International Economic and Trade Arbitration Commission (CIETAC) (f) London Court of International Arbitration(LCIA) (g) Japan Commercial Arbitration Association (JCAA)\ b. Associations (a) Institute of Arbitrators and Mediators Australia (IAMA) (1975) (b) Arbitrators and Mediators Institute of New Zealand (AMINZ) (c) Asia-Pacific Regional Arbitration Group (APRAG) (d) Chartered Institute of Arbitrators (CIArb) UNCITRAL Model Law Jurisdictions List available at www.uncitral.org; also indicates which jurisdictions have adopted 2006 Model Law Overview of the Arbitral Process i. Arbitration agreement/clause ii. Dispute iii. Reference to arbitration iv. Constituting the tribunal v. Preliminary meeting vi. Applicable law, procedure vii. Settling the schedule viii. Dealing with documents ix. Hearings x. Award xi. Enforcement/challenge

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FRAMEWORK OF LAWS APPLICABLE TO THE ARBITRATION 1. Laws which may impact an arbitration i. Law governing the parties capacity to enter into an arbitration agreement (personal law) ii. Law governing the agreement to arbitrate iii. Law governing the procedure of the arbitration - the curial law of the arbitration or the lex arbitri iv. Law governing the underlying commercial contract (Dicey & Morris: proper law) v. Law governing the supportive and enforcement measures 2. Lex Arbitri Vs. Venue Vs. Procedural Rules Vs. Substantive Law Section 30, RA 9285 Art 20 Model Law

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Union of India v McDonnell Douglas Corp [1993] 2 LLR 48} PT Garuda Indonesia v Birgen Air (OM 600001/2001;Unreported, 11 Sep 2001 Woo Bih Li JC) Case 6 Sch 2/99 (Germany: Higher Regional Court Dsseldorf, 2000) CLOUT Case 408 A/CN.9/SER.C/ABSTRACTS/35 Importance of Lex Arbitri i. Curial support ii. Setting Aside of Award iii. Nationality of the Award (Enforcement) Substantive law in arbitration Article 28(2) ML Compagnie dArmement Maritime SA v Compagnie Tunisienne de Navigation SA [1971] AC 572 (per Lord Wilberforce) th Conflict of law rules - Dicey and Morris, The Conflict of Laws (13 ed), recommends the following rules: Rule 145 - The term proper law of a contract means the system of law by which the parties intended the contract to be governed, or, where their intention is neither expressed nor to be inferred from the circumstances, the system of law with which the transaction has its closest and most real connection. Sub-rule 1. - When the intention of the parties to a contract, as to the law governing the contract, is expressed in words, this expressed intention, in general, determines the proper law of the contract. Sub-rule 2. - When the intention of the parties to a contract with regard to the law governing the contract is not expressed in words, their intention is to be inferred from the terms and nature of the contract, and from the general circumstances of the case, and such inferred intention determines the proper law of the contract.

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Sub-rule 3. - When the intention of the parties to a contract with regard to the law governing it is not expressed and cannot be inferred from the circumstances, the contract is governed by the system of law with which the transaction has its closest and most real connection. THE ARBITRATION AGREEMENT Redfern & Hunter, Redfern and Hunter on International Arbitration, 2009, Chapter 2 [2.01 to 2.105; for reference only Sections 2.106 onwards] 1. Types Separate arbitration agreement Ad hoc submission 2. Definitions of arbitration agreement UNCITRAL Model Law Art. 7 New York Convention Art. II 3. in writing and written agreement Art. 7 Model Law Art. II New York Convention Consmaremma-Consorzion tra produttori agricoli Societa Cooperativa v

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Hermanos Escot Madrid SA (Tribunal Supremo, Spain) Yearbook Com Arb XXVi (2001) p 858 II ZR 37 3/98 (Germany SupCt: Bundesgerichtshof) CLOUT Case 406: A/CN.9/SER.C/ABSTRACTS/35 APC Logistics Pty Ltd and Phoenix International Freight Services Limited v. CJ Nutracon Pty Ltd and Multisource Network Corporation, Federal Court of Australia, Queensland District Registry, 16 February 2007, VID 978 of 2006 UNCITRAL Model Law 2006 Art. 7 4. Elements of a Valid Arbitration Agreement Redfern & Hunter, Law & Practice of International Commercial Arbitration, Chapter 3, Section 3- 37 to 3-56 5. Clauses which give a choice The Dai Yun Shan [1992] 2 SLR 508 Guangdong Agriculture Co Ltd v Conagra international (Far East) Ltd [1993] ADRLJ 100 William Co v Chu Kong Agency Co Ltd [1993] 2 HKC 377 Where agreement provides for alternative seats: Tema-Frugoli SpA v Hubei Space Quarry Industry Co Ltd (Corte di Appello, Italy CA, 1999) ), Yearbook Com Arb XXVI (2001) p 807-811) 6. Pathological Arbitration Clauses: e.g. Selecting Non-existent arbitration institutions, arbitration rules; vague language Lucky Goldstar v Ng Mook Kee Ltd [1993] 2 HKLR 73 ICC Case 7920 7. Subject-matter Arbitrability Section 6, RA. 9285 Article 2035 in relation to Article 2043, Civil Code Possible non-arbitrable subject matters:- insolvency (e.g. companies winding-up bankruptcies) contracts contrary to public policy (e.g. money laundering; corruption/bribery - arrangements) - intellectual property rights (e.g. patents validity and trademarks) - anti-trust/competition [permissible in Australia e.g.Trade Practices Act; see QH Tours; - Ferris below]; consumer protection; environmental protection and planning. 8. Doctrine of Separability i. Article 16 (1) Model Law ii. Cargill Philippines, Inc. vs. San Fernando Regala Trading Inc. G.R. No. 175404 January 31, 2011 ISSUES ON THE ARBITRATION AGREEMENT 1. Public Policy Korea Technologies Co., Ltd. vs. Lerma; G.R.A No. 143581, 7 January 2008 2. Incorporation by Reference National Union Fire Insurance Company, et al v. Stolt-Nielsen Philippines, Inc. and Court of Appeals, G.R. NO. 87958, 6 April 1990, 180 SCRA 682 (1990) BF CORPORATION vs. COURT OF APPEALS, G.R. No. 120105 March 27, 1998, 288 SCRA 267 English CA: Two divergent views.

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Aughton Ltd v MFKent Services Ltd (1991) 57 Build. L. R. 1 Giffen (Electrical Contractors) Ltd v Drake & Scull Engineering Ltd (1993) 37 Con LR 84. Scope of arbitration clause in relation to dispute SP Chua Pte Ltd V Lee Kim Tah (Pte) Ltd [1993] 3 SLR 122 Sabah Shipyard (Pakistan) Ltd v Government of the Islamic Republic of Pakistan [2004] SGHC 109 Fiesta World Mall Corporation vs. Linberg Philippines, Inc. G.R. No. 152471. August 18, 2006. Referral of Proceedings in Favor of Arbitration Article 8, Model Law Section 24, RA 9285 Equitable Insurance and Casualty Company v. Rural Insurance and Surety Company, G.R. No. L-17436, 31 January 1962 Mindanao Portland Cement Corporation vs. McDonough Construction Company of Florida, L- 23390, 24 April 1967, 19 SCRA 808 (1967)

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THE ARBITRATION PROCEEDINGS AND THE ARBITRAL TRIBUNAL 1. Commencement of Arbitration i. Institutional rules: SIAC Rules (2010) ICC Rules (2012) For ad hoc arbitration: UNCITRAL Rules (1976) (2010) ii. Law of situs ; Lex Arbitri Art 21, Model Law Case 4ZSH/99 (Germany: Highest Regional Court of Bavaria, 2000 (CLOUT Case 402) Skorimpex Foreign Trade Co v Lelovic Co (Ontario-General Division, 1991) CLOUT Case 384 2. Appointment of the Arbitral Tribunal Magellan Capital Management Corporation et. al. vs Zosa et al., G.R. No. 129916. March 26, 2001. i. Appointing Procedure Article 10, Model Law Art 11, Model Law Section 26, RA 9285 List procedure Article 6-8, UNCITRAL Rules (1976) ii. Default appointment by statutory authority Article 11(3) and (4) Model Law Section 26 and 27, RA 9285 iii. Appointment under arbitration rules ICC Rules SIAC Rules UNCITRAL Rules iv. IBA Rules on Conflict of Interest 3. Jurisdiction of Tribunal: kompetenz-kompetenz/ competence-competence Article 16 (1), Model Law Fung Sang Trading Ltd v Kai Sun Sea Products & Food Co Ltd [1992] ADRLJ 93 4. Duties of the Arbitral Tribunal 1. General Consider all evidence: Art. 18 Model Law i. In General

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Consider all evidence: Article 18 Model Law ii. Duties are not-delegable The Eastern Counties Railway Co. v Eastern Union Railway Co. (1863) 3 De GJ & S 610; 46 ER 773 Luzon Hydro Corp v Transfield Philippines Inc [2004] SGHC 204 3. Ethical duties Art 12(1) Model Law iii. Ethical Duties Article 12(1) of the Model Law Veritas Shipping Corp v Anglo-Canadian Cement Ltd [1966] 1 LLR 76 HSMV Corp v ADI Ltd (USDC, Central California, 1999) Yearbook Com Arb XXV(2000) p 1074 1084 5. Courts power to remove/Challenge to Arbitrators Art 13(3), Model Law SIAC Rules ICC Rules 6. Immunity of arbitrators & arbitral institution Section 5, RA 9285 SIAC Rules ICC Rules CONDUCT OF THE ARBITRATION 1. General Art 19, Model Law Oral hearings - Art 24(1) Model Law; SIAC Rules Period stipulated by law, rules for completion of hearings: see Indonesian Arb Act, art 48 hearings to be completed within 180 days 2. Evidence in arbitration Art 19, Model Law Use of experts: Luzon Hydro Corp v Transfield Philippines Inc [2004] SGHC 204 (see above) Discovery of documents within the parties possession or control, Witnesses may be subpoenaed: Section 28, 29, RA 9285 Courts power to give assistance in the taking of evidence: Art 27 Model Law IBA Rules on Taking of Evidence 3. Statutory powers of tribunal Section 28, RA 9285 Default Process: Art 25 ML 4. Interim measures of protection, preservation RA 9285: Section 28, 29 SIAC Rules ICC Rules UNCITRAL Model Law 2006, Article 17, 17A-J Dermajaya Properties Sdn Bhd v Premium Properties Sdn Bhd & Anor [2002] 2 SLR 164 Department of Foreign Affairs and Bangko Sentral ng Pilipinas vs. Falcon and BCA International Corporation G.R. No. 176657. September 1, 2010 THE AWARD 1. Scope and nature of an award Definition: Section 3, RA 9285 Re Arbitration Between Mohamed Ibrahim & Koshi Mohamed (1963) 29 MLJ

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32 Essential features of an award Art 31(1) Model Law Lock v Vulliamy (1883) 5 B & Ad 600; 110 ER 912 Jeeram v National Union of Plantation Workers [1993] 3 MLJ 104 Ian MacDonald Library Services Ltd v PZ Resort Systems Inc {1987] 14 BCLR (2d) 273, BC FIAT SpA v Republic of Suriname (USDC, South New York,1989) Yearbook Com Arb XXIII(1998) p 880-885) Reliefs and Remedies Any relief or remedy as the court could if the dispute had been the subject of a civil proceedings in court. eg - Award for payment of money - Specific performance - Declaratory relief - e.g. whether a party is entitled to reject goods; meaning of certain clauses in a lease. Must be a final declaration which determines the rights of the parties 'once and for all'. - Indemnity - against liability to third parties which have yet to be established or incurred Costs of award and the reference Cost of award - incurred jointly by the parties, such as fees of tribunal, or institution, room hire, transcripts Cost of reference - costs and expenses of a party (other than the costs of the award) in the preparation and conduct of the arbitration e.g. fees of counsel (or representative), expert witnesses, travelling expenses of witnesses, or advisers consulted.

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General rule (common law) costs follows the event Patroclos Shipping Co. v. Societe Secopa [1980] 1 Lloyd's Rep. 405 5. Reasons for Award Art 31(2), Model Law 6. Effect of the award 6.1 Enforceable against the party against whom it is made. 6.2 If the award is the final award, - it terminates the arbitration. - extinguishes the original cause of action. 6.3 Arbitrator becomes functus officio MCIS Insurance Bhd v Associated cover Sdn Bhd [2001] 2 MLJ 561; RECOURSE AGAINST THE AWARD 1. Mistakes and Omissions; Interpretation and additional awards Art 33 Model Law 2. Recourse Against Award Section 24 28, RA 876 Section 41, RA 9285 3. Setting aside under the Model LawArt 34, Model Law Asset Privatization Trust v Court of Appeals, 300 SCRA 579 (1998) Available only to awards made in the seat of arbitration: PT Garuda Indonesia v Birgen Air [2002 CA] Case 6 Sch 2/99 (Germany: Higher Regional Court Dsseldorf, 2000) CLOUT Case 408 A/CN.9/SER.C/ABSTRACTS/35 "Only recourse" - Art 5 and 34(1) Model Law

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Grounds for setting aside Slaney v IAAF (USCA 2nd Cir, 2001) Yearbook Com Arb XXVi (2001) p 1091 Re Corporacion Transnacional de Inversiones, S.A. de C.V. et al. and STET International, S.p.A. et al. (Canada: Superior Court, 1999) CLOUT Case 391, A/CN.9/SER.C/ABSTRACTS/34} Zimbabwe Electricity Supply Authority v. Genius Joel Maposa (Zimbabwe: Supreme Court, 1999) CLOUT Case 323: A/CN.9/SER.C/ABSTRACTS/30 Netherlands Coffee Trade Yearbook Com Arb XII (1987) p 487-489 ENFORCEMENT OF AWARDS Transfield vs. Luzon Hydro Corporation; G.R. No. 146717, 19 May 2006 Tuna Processing, Inc. vs. Philippine Kingford, Inc. G.R. No. 185582. February 29, 2012 1. Enforcement of an Award as a Foreign Judgment Oil and Natural Gas Commission v. Court of Appeals, G.R. No. 114323, 23 July 1998; Oil and Natural Gas Commission v. Court of Appeals, G.R. No. 114323, Resolution on Motion for Reconsideration September 28, 1999 2. Enforcement of Awards made in the jurisdiction 2.1 Award under domestic arbitration proceedingsSection 23, 27, 28, RA 876; Section 40, RA 9285 2.2. Award under international arbitration proceedingsin accordance with the rules promulgated by the Supreme Court (special proceeding, file with the RTC) 3. Enforcement of Foreign Arbitral Awards 3.1 Section 42-28, RA9285 3.2 UN Convention for the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention 1958) 4. Under the New York Convention 1958 4.1 Procedural requirements: Art. IV, NYC Bergensen v Joseph Muller Corp 710 F. 2d 928 (2nd Cir 1983); Guangdong New Technology Import & Export Corp v Chiu Shing t/a B C Property & Trading Co (HKHC, 1993) Yearbook Com Arb 1993, p 385 R SA v A Ltd (Cour de Justice, Geneva Court of Appeal, 1999) Yearbook Com Arb XXVI (2001) Investor v Republic of Poland (Bundesgerichtshof Germany Supreme Court, 2000) Yearbook Com Arb XXVI (2001) 4.2 Grounds for refusal of enforcement are exhaustive Article V, New York Convention 4.3 Discretionary China Nanhai Oil Joint Service Corp. v Gee Tai Holding Co. Ltd [1995] ADRLJ 127 Hebei Import & Export Corporation v Polytek Engineering Co Ltd [1999] 14 Mealeys Int Rep (no.2) 4.4 Burden of proof Hebei Import & Export Corporation v Polytek Engineering Co Ltd [1999] 14 Mealeys Int Rep (no.2) 5. Grounds for refusal under NY Convention (Article V) 5.1 Art V (1) (a) Incapacity of parties - under personal law (law applicable to them)

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Agreement invalid - under the law, parties have subjected to it - where the award was made 5.2 Art V (1) (b) Party not given proper notice Guangdong New Technology Import and Export Corp Jiangmen Branch v Chiu Shing [1991] 2 HKC 459 (High Court, Hong Kong) Otherwise unable to present his case - Minmetals Germany GmbH v Ferco Steel Ltd [1999] All ER (Comm) 317 5.3 Art V (1) (c) - award deals with matters in excess of jurisdiction 5.4 Art V (1) (d) - arbitral tribunal not constituted in accordance with agreement; or - where there is no agreement in relation to the composition of the tribunal, it was not in accordance with the law where the arbitration took place; or - irregularity in the arbitral procedure China Agribusiness Development Corp. v Balli Trading [1998] 1 LLR 76. 5.5 Art V (1) (e) - award has not become binding - award set aside or suspended Spier v Calzaturicio YB 2000 p 1042 Pabalk Ticaret Ltd. Sirketi v. Norsolor SA, Cour de Cassation (1st Civ. Ch.), 9 October 1984, Rev. Arb. 431 (1985), 2 J. Int'l Arb. 67 (1985), 3 Crit. Droit Int'l Priv 555 (1985), Yearbook Com Arb XI pg 484 (1986) In Re Chromalloy Aeroservices 939 F Supp 907 5.6 5.6 Article V (2) {Section 31(4), IAA} - Subject matter not arbitrable - Enforcement of award contrary to public policy Aloe Vera of America, Inc v Asianic Food (S) Pte Ltd and Another [2006] SGHC 78 AJT v. AJU AS, High Court 16 July 2010 Appeal from Decision of RTC on confirmation or setting aside of an arbitral award Section 46, RA 9285 Equitable PCI Banking Corporation v.RCBC Capital Corporation, G.R. No. 182248, 18 December 2008