Key Concepts in International Arbitration

Posted on Feb 14, 2025 in Law & Jurisprudence

Ad Hoc Arbitration

Ad hoc arbitrations take place without any reference to an arbitration institution. A disadvantage of ad hoc arbitration is that, while at the time of concluding the contract the parties may expect any dispute they might have to be settled in a friendly manner, at the time the dispute ripens they may be less inclined to cooperate.

Delocalization

Delocalization is also referred to as stateless, floating, or a-national arbitration. It is based on a theory that international arbitration should not be fettered by the local law of the place where the arbitration occurs. The counterargument to delocalization is that every arbitration takes place in a specific territory and must conform to the laws.

Lex Mercatoria

A loosely organized system of transnational legal principles, rules, and standards derived from the usages, customs, and practice of international commerce. It includes general principles of law, transnational rules, and a method of decision-making.

UNCITRAL Model Law

  1. Covers the formal validity of the arbitration agreement and the obligation for a court to refer parties to arbitration unless the agreement is void.
  2. It limits interference of the court in arbitration matters and permits parties to seek interim relief from a court without losing the right to arbitrate.
  3. It regulates the arbitral proceedings, basically providing that the parties can agree on how the proceedings will take place.

Anti-Suit Injunctions

An anti-suit injunction is an order by a court to a party – over which the court has personal jurisdiction – that requires the party either not to file a claim in a foreign jurisdiction or not to proceed with a claim that has already been filed.

The reason for the anti-suit injunction is usually that the same issues between the same parties are currently being litigated or arbitrated within the jurisdiction of the court issuing the order.

Kinds of Anti-Suit Injunctions

  1. One is when a party brings a lawsuit in a foreign jurisdiction, even though it had agreed to arbitrate the dispute that forms the basis of the lawsuit.
  2. Another is when a party tries to enjoin another party from either vacating an award or enforcing an award that has been vacated.
  3. When a party, asserting that it has not agreed to arbitrate, seeks to enjoin the other party from proceeding with arbitration.

Interim Measures

Interim measures include actions to:

  1. Maintain or restore the status quo pending determination of the dispute.
  2. Take action that would prevent, or refrain from taking action that is likely to cause current or imminent harm or prejudice to the arbitral process itself.
  3. Provide a means of preserving assets out of which a subsequent award may be satisfied.
  4. Preserve evidence that may be relevant and material to the resolution of the dispute.

Basis for Interim Measures

  1. If the relief is not granted, harm will result which is not adequately remedied by money damages, and such harm is greater than any harm which might occur to the other party if the measure is granted.
  2. The requesting party has a reasonable possibility of succeeding on the merits of the claim.

A prima facie review, the court would refer the matter to arbitration if there was a reasonable likelihood that the party who brought the court action was in breach of a duty to arbitrate.