Chapter 3 FORMS OF ARBITRATION 1. The Principal Forms of Arbitration 2. Ad hoe Arbitration 2.1. Characteristics of ad hoe Arbitration 2.2. Regulating ad hoe Arbitration 2.3. Advantages of ad hoe Arbitration 3, Goneral Structure of Institutional Arbiteation 3.1. Characteristics of Institutional Arbitration 3.2, Advantages of Institutional Arbitration 3.3. International Arbitration Institutions () Private international institutions (b) Industry Cocused and commodity institutions (©) Public international taw institutions 3.4. Special Purpose Institutions (a) Iran-US Claims Tribunal (b) United Nations Compensation Commission (©) The Claims Resolution Tribunal for Dormant Accounts in Switzerland 354 (@) International Commission on Holocaust Era Insurance Claims 3.57 3.5, Online Dispute Resolution Institutions 3.59 3-1 Arbitration isthe generic (erm for a form of binding dispute resoletion uiside the national court system. It is equally so for domestic and international arbitration. In every case the question for the parties and their lawyers is which ‘ype of arbitration, in what circumstances and under what structure. ‘There are different kinds and forms of arbitration. In every situation it is essential for partics to determine which type of arbitration is appropriate or relevant for each case. Theze may be implications for the choice of arbitration from national law, relevant international instruments, the agreement of the parties 31Chapter 3 ‘and the applicable arbitration rules. This is important because of the legal regimes that will apply, the extent to which the parties are able to contro! the arbitration process and the ultimate enforceability of the award of the tribunal For this reason, the decision for disputes to be submitted to arbitration and which form of arbitration must always be carefully considered, ‘This chapter reviews (1) the principal forms of arbitration, (2) ad hoc n and (3) the general structure of institutional arbitration. It considers the circumstances in which each of these forms may be appropriate and some of the best known institutions. It also considers, briefly, some special purpose arbitration institutions, which whilst differently structured, also provide a form of arbitration even though not based on a specific arbitration agreement, 1, THE PRINCIPAL FORMS OF ARBITRATION 3-4 There are two basic forms or types of arbitration: ad hoc and institutional! Both of these forms are based on the partis” agreement it is a choice thatthe parties must make when selecting arbitration 3-§ Ad hoc atbitcation is where the arbitration mechanism is established specifically for the particular agreement or dispute. Where partes are silent and have not selected an institutional arbitration, the arbitration will be ad hoc. When agreeing on ad hoc arbitration the parties often also agree on the arrangements for initiating the procedure, selecting the arbitrators and determining the procedurat rules. When the parties fail to agree on these issues, e.g. they have agreed only “arbitration” or “arbitration in [a nominated city)", usually default provisions of the law of the place of arbitration will be applicable. 346 Institutional arbitration is where parties submit their disputes to an arbitration procedure, which is conducted under the auspices of or administered or directed by an existing institution. There area large number of institutions of different kinds. These institutions aim to provide an arbitration service specifically, or within the context of their overall activities and objectives, and due to their infrastructure will in some cases assist with the running of the arbitration TSee.eg Aksen, “Ad Hee Vers Insitutions Arbitration” 21) SOC Bllsn 8 (1981). 22 |Forms of Arbitration 3-7 Due to the lack of accurate statistical information, no one really knows how many arbitrations take place in any year, and whether there is more ad hoe or institutional arbitration. Some of the institutions publish the number of abiteations that they have in a year? 3-8 There is no definitive report on the number of ad hoc arbitrations that take place around the world every year. ‘The International Federation of Commercial Arbitration Institutions published the following table’ which suggests there are over 2000 arbitrations @ year under the auspices of the better known arbitration institutions. institution 1993 | 1994 [1996 | 1998 | 1999 | 2000 | 2901 ‘AAA ~ IDR 204 | a7 | 226 | 387 | 83 [si | oD | GETAC 267 | wo | Te | was | oe | 3s Ta DIS mo [we >Re | 2 | 2 | |e BKIAC Tes | 150 [197 _f|-340_| 57 | 38 [307 é ee aaa | as [ace | oe [Sal 306 TEAK +] 8s (4 pe po ir ers aps a pm | 36] a SIAC a a Sioekholm Insite a [m4 |B | 2 [ie | |e Viena aa ps | ~ >a ps |e 2. AD HOC ARBITRATION 24. Characteristics of ad hoe Arbitration 3:9 The essential characteristic of ad hoc arbitration is that it is independent Of all institutions. The arbitration system selected or provided for in the agreement does not exist except in the context of the dispute between the partes, The ICC publishes its annual statistics in the sping issve of the Bulletin ofthe Intemational Court of Arbitration. ‘The LCIA, Stockholm Institute, HKIAC, SIAC and CITAC all petodicallyisue details ofthe numberof arbitrations commenced, > Source: ICAL and HKIAC. See also (lst visited in December 2602). 33Chapter 3 ‘The arbitration system is activated if a dispute arises between the parties and one of them calls for arbitration or otherwise initiates the procedure in accordance with the terms of the arbitration agreement or, where appropriate, by some subsidiary rules that have been selected to apply to the arbittation. 3-10 Accordingly, whilst every arbitration institution has its own characteristics and therefore mechanisms for establishing and controlling the axbitcation process, with ad hoc arbitration, there are none of these procedures. For this reason, in ad hoe arbitration the parties have the maximum degree of Texibility to agree and specify those aspects of the procedure that they wish, subject to any mandstory law in the place of arbitration * This would include how the arbitrators are to be appointed, how many arbitrators there should be, the procedure to be followed, the arrangements for the presentation of evidence and how the arbitration should be pleaded, The parties ean also agree on the timetable for the arbitration and any ober special requirements to reflect the specific characeristies of the contract in dispute. 2.2, Regulating ad hoe Arbitration 3-11 One relatively simple way to regulate an ad hoc arbitration is with the express selection, in the arbitration agreement, of appropriate arbitration rules Such rules will generally provide for all or most of the above matters, Particularly popular for international arbitration are the UNCITRAL Rules.’ Although initially intended for use in non-insitutional arbitration itis now also used in Some institutional arbitrations * 3:12 The one exception where there may be the involvement of an institution in an ad hoc arbitration is with respect to the appointment of the arbitrators. On ‘occasion, where parties are unable to agree, they can select an appointing authority which has responsibility for selecting and appointing the arbitrator. Several of the major arbitration institutions provide a service of this kind,” 3413 In the absence of any agreement on the rules to apply, the parties and in turn the arbitrators appointed will generally look to the lex arbityi, the law + $05, Modal Law Antle 19. 5 Other mules which canbe selected include the CPR Iastnt fer Dispute Resolution (formerly the Cen for Pubic Resources) andthe PCA Rules. © S50, ¢¢, HKIAC and CRCICA, 7 Son e.g the FCA and the LOLA.Forms of Arbitration governing the arbitration, to determine how the arbitration should be organised.® ‘This carries a double-edged risk: is the law of the place suitable and arbitration friendly generally, and specifically for the contract or dispute, eg. for the ‘granting of interim relief by the arbitrators or by the court in support of the arbitration peocess? This uncertainty will always remain where the parties are unable to agree on a specific procedural structure or a set of rules fo govern, 2.3. Advantages of ad hoc Arbitration 3414 Ad hoc arbitration is generally favoured where the parties are unable to agree on the arbitration institution, There are many reasons why particular instiuutions may or may not be acceptable to parties. Where parties have opposing views as to which institution to choose, ad hoc arbitration is often the compromise. From a more positive position, the parties may feel that ad hoc arbitration is preferable for their specific case. Parties can also favour ad hoc arbitration where they wish to have control of the procedure and the mechanist rather than to be subjected to institutional administration or control. A popular reason for ad hoc arbitration is that one party is a state or state-entty or parastatal. Sovereign entities are often reluctant to submit to the authority of any institution, regardless of its standing; to do so would be to devalue or deny its sovereignty. This is due to a perceived partiality or non- neutrality of certain institutions or the place where the institution is located Whilst this concern is totally unjustified, some states prefer to create a totally independent ad hoc mechanism, through which they can ensure the maximum ogre of non-nationality and the least embarrassment to their sovercignty. 3-16 A perceived but not necessarily correct advantage of ad hoe arbitration is that, because the parties control the process, i can be less expensive than instinational arbitration. In fact this depends in each case and on how the stitution charges for it arbitration services 3, GENERAL STRUCTURE OF INSTITUTIONAL ARBITRATION 3:17 The first issue for partios to a contract is to select the institution appropriate for their particular contract or dispute. Most frequently, the © ‘See, eg Model Law Article 19, which empowers the Tuna, inthe absence of an agrecent beteen te partes, to conduct he arbitration in "such manna a it considers appropiateChapter 3 institution is chosen by default because one of the parties makes a suggestion and the other one knows nothing else. Alternatively, the choice may be based on the fact that aa institution is well Kaown in a particular geographic or industrial area However, this is an important decision that should be made at the outset of the ‘contractual discussions and requires careful consideration, 3.1. Characteristics of Institutional Arbitration 3-18 Every arbitration institution has its own special characteristics, 1 is essential that parties are aware and take account of these.? itis tied in with an understanding of the special requirements of different arbitration systems and rules. For example, how many arbitrators should there be? Different rules will make different provisions; in the absence of agreement by the parties some favour one, eg. the LCIA; others favour three, e.g. the Stockholm Institute. There are similarly differences in other areas including: the right of the parties to select, nominale and appoint arbitrators; the degree of independence and neutrality required of arbitrators, the power of arbitrators to control the proceedings and in particular, to make orders concerning interim relief; and how the costs of the arbitration, especially the arbitrators’ fees, are calculated. 349 Important differences also include the level of administration of the institution, For example, the ICC is heavily administered with the terms of reference, fixing of times for the making of the award and scrutiny procedures being fundamental (0 the system. By contrast, after the appointment of the tribunal, the LCIA limits its administration to dealing with challenges to the arbitrators and to interceding to agree, collect and pay the fees of the arbitrators, 3.2, Advantages of Institutional Arbitration 3.20 A strongly perceived advantage of institutional arbitration is the cachet behind the name of the institution, Accordingly, especially in countries where there is political interference or where the courls and law are nol always avbitration-friendly, parties consider it beneficial when seeking to enforce an award which was issued by, or which carries the name of, an internationally © See, eg. Simpson, Thacher & Bantet (0), International Arbitration Rules % See, Slate H,"Inernatonal Arbitration: Do Intutions Make a Difference?" 31 Wake Forest Las Review 41 (1990). 36 | |Forms of Arbitration respected institution, Whilst there are doubts as t0 the value of such cachet, i ultimately being able to have an arbitration award issued under the name of that institution, itis till often considered to be helpful 3-21 Another advantage of institutional arbitration is the fact that there is @ “comfort” element in its existonce. There have been many cases under the rules of each institution, and every year it has continuing number of new arbitrations, ‘This provides an obvious comfort as the parties know that the institution has experience in the way it establishes the tribunal and arranges for the award to be issued, On the other hand, just like in a court, each arbitration has to be looked at individually. One should never forget that itis the specific arbitrators who make the decisions on both procedural and substantive issues rather than the arbitration instiuation. Arbitrators are, of course, independent fom the institution itself. 3-22 Through the stracture of the institutions, there is often someone to turn to Tor assistance. For example, the [OC has a large secretariat comprising numerous counsel who, on a day to day basis, are responsible for the administration of a caseload of arbitrations. Accordingly, both arbitrators and parties are free to seek the advice of the ICC counsel as to how to take matters forward or overcome a difficult impasse. It is also a convenient way to ensure that the arbitrators are aware of the needs and concems of the parties where they are not necessarily addressing the arbitrators directly, This is particularly so where arbitration awards have taken longer to be issued than should have been the case. 3-23 An important advantage of institutional arbitration is that it avoids the discomfort of the parties and the arbitrators discussing, agreeing and fixing their remuneration. Most institutions have a mechanism for collecting from the parties the money from which the arbitrators will be paid and without directly involving the arbitrators. This means that the arbitrators are able (0 maintain a certain level of material detachment, This has the very definitive advantage of allowing the arbitrators to focus solely on the substance of the case rather than discuss with ‘the parties @ matter that is personal to them. 43.3. International Arbitration Institutions 3-24 There are many international arbitration institutions.”” In recent years these has been a plethora of new institutions created all around the world. 1a For a comprehensive clleeionor ist of the major arbitration insutions see vw intemationsiadrong. 0Chapter 3 addition to the traditional and long existing institutions very many countries and major commercial centres have established organisations offering arbitration services, 3.25 A distinction can be made between arbitration institutions creates by private law means and those established by an instrument of public international law, Following this division we refer to what are perhaps the most frequently discussed and used arbitration institutions, (a) Private international institutions 3.26 International Chamber of Commerce, International Court of ‘Arbitration: The ICC is the most widely used and accepted international ‘arbitration institution. It handles disputes arising out of all kinds of cases. ‘ablished in 1923 it has had well ever 10,000 cases. In the year 2001 over 560 new intemational arbitrations were filed with the JCC. These cases concerned 1492 parties from J 16 different countries on five continents. 3:27 London Court of Intemational Arbitration:"* The LCIA is the oldest ‘arbitration institution having been established in 1893. It was then known a5 the London Chamber of Asbitration, It was restructured in the early 1980s and has since developed an annual cascload in excess of 80 new arbitrations. 3:28 American Arbitration Association:* The AAA has been providing “dispute resolution services for nearly 75 years. This institution undoubtedly has the largest arbitration caseload with almost 200,000 cases per year, over 640 of ‘which were international in character in the year 2001. It also has specialist rules including rules for international, commercial, construction and patent disputes. ‘The International Centre for Dispute Resolution (ICDR) administers international ‘cases. The ICDR was established in 1996 as a separate division of the AAA. TL has specialised administrative staff in New York and in May 2001 ICDR opened its first European office in Dublin. The ICDR International Arbitration Rules are ‘modelled on the UNCITRAL Rules. 3.29 Arbitration Institute of the Stockholm Chamber of Commerce:'* Te ‘Stockholm Institute became prominent as a neutral institution during the cold war cuwivicewbo.rgfndes_cour.asp> > Srww deiacarbitratin com>, 6 yw ore 's yvchambertlarivaton/engishfindex htmt>, 38Forms of Arbitration when the AAA and the Soviet Foreign Trade Arbitration Comission agreed that contracts between American and Soviet entities should be submitted to the ‘Swedish tribunal.” Since then contracts between former Soviet and western parties frequently provide for arbitration at the Stockholm Institute, Even after the fall of the Sovict empire itis still frequently used for commercial contracts involving parties from the west and from Russia or the other former Soviet Republics. It also has a good reputation for the resolution of disputes where one of the parties is a state or state omtity. 74 new cases were filed with the Stockholin Institute in 2001 330 China International Economie Trade Arbitration Commission:"™ CIETAC is the largest arbitration institution in the Peoples Republic of Chin. It is organised under the auspices of the China Council for the Promotion of International Trade (CCPIT). To this extent itis controlled and influenced by the Chinese government. The CCPIT is a powerful force for trade with China and CIETAC is invariably insisted upon by Chinese contracting erties. It had in excess of 700 international cases filed in the year 2001, The hearings are short and, uoless otherwise agreed, in Chinese. 3:31 Hong Kong Intemational Arbitration Centres" ‘The HKIAC_ was established in the early 1980s to provide an independent arbitration forum in the Far East and Asia for setting international commercial disputes of all kinds. ‘Over 300 new cases were filed in 2001, 332 Singapore Incernational Arbitration Centre:!® Yn recent years the SIAC hhas developed a reputation as an acceptable neutral venue in Asia for both Chinese and Europeans. It is often acceptable to PRC commercial entities and to See the 1977 US/USSR Optional Clause Agreement, reproduced with background ‘conespondence as Appendix 5 in SCC (6d), Arbitration in Sweden, 203. Oo 24 March 1992 Tepreseniatves of the AAA, the Russian Chamber of Commerce and Industry, and the Stockholm Chamber of Commerce amnounced the signing of the 1992 Optional Chuse ‘Agreement (which closely micrors the 1977 Optional Clause Agreemesi) The 1992 Agreement is set out in Appendix 7 of Hober, “Enforcing Foreign Atiiml Awards against Russian Ente", in Asbivation Istute of the Stockholm Chamnber of Commerce (62), Svedish and Intemational Arbiration (Stocknolm 1993) 4(8) WAMR $2 (1993), 4(9) WAMR 122 (1993) (6) Walle 150 (1893), 1 See, eg the Sherahen Svb-Commission of CIETAC , cuwwsiacorgspmaiatm>,Chapter 3 businesses from the West. Over $0 new international cases were filed in the year 2001 3.33. Cairo Regional Centre for International Commercial Arbitration: Established in the mid 19806, this was Intended to be a neutral venue in the Middle Bast, with an understanding of the needs and concerns for parties in the ‘Arab world. Tt was also intended that it would appoint arbitrators from the Arab world where appropriate, something which it was alleged the western arbitration instituGons did only rarely, The Cairo Centre had a sister institution in Kuala Lumpur! The Cairo Regional Centre has an increasing caseload and is regularly ‘used by western and Arab parties. Over 50 cases were filed in the year 200) 334 World Intellectual Property Organization, Arbitration and Mediation Centre: This specialist intellectual property organisation created an arbitration and mediation service in the early 1990s. lis rules were prepared and developed with the assistance of a group of experts in international arbitration and intellectual property disputes. The arbitration (end mediation) facilities offered by WIPO are aimed specifically at resolution of disputes involving intellectual property. The Centre is also internationally recognised as the leading institution jn the area resolution of domain names disputes, where it handled over 1,500 ceases in the year 2001 (b) Industry focused and commodity institutions? 3.38 ‘There are many specialised arbitration institutions, for example: Grain and Feed Trade Association (GAPTA)* Refined Sugar Association (RSA) Federation of Oils, Seeds and Fats Association (FOSFA)* London Metal Exchange (LMEY®* London Maritime Arbitration Association (LMAA)” ‘The Association of Food Distributors, Inc., of New York ‘The Bremen Cotton Exchange in Germany (Baurwollborse)"* ® “eww areca ogee, 21 yynwklics oF <2 arbiter wip inveenterindes. hm, See, eg. Johnson, Commodity Arbitration “ow gata com. “ww Tosa org>. sw lime cos 2 ye maa ore> © zune 40Forms of Arbitration ‘* Hamburg Freundliche Arbitrage ‘© Piraeus Commodities-Exch ‘* Japan Shipping Exchange.” (€) Public international law institutions 3.36 Permanent Court of Arbitration?” The PCA was established by the Hague Conventions for Pacific Settlement of International Disputes of 1899 and 4907 to promote peace through peaceful resolution of international disputes. Disputes between two states or a state and a private party may be referred to the PCA, Although nol many disputes have been referred to the PCA (40 since 1902), it provides excellent facilities and is flexible in respect of applicable arbitration rules, Parties may opt for optional rules of the PCA or for UNCITRAL Rules. 337 _Incernational Centre for Settlement af investment Disputes: Establisbed in 1965 by the Washington Convention, ICSID has jurisdiction over legal investment disputes arising directly from a contract between 2 contracting state ‘and a foreign investor from another contracting state, provided both parties have agreed (0 arbitration which is normally done in the investment contract. Under the Washington Convention ICSID awards are simple to enforce as a public international obligation of the countries party to the Convention. Over 100, sbitrations have been commenced under the ICSID Rules and fourteen new ceases were filed in 2001 3:38 Additional Facility Rules: ICSID also administers disputes arising out of investment contracts where a stale party, oF the slate where the investor comes from, is not a party (0 the ICSID Convention. ICSID has administered eleven ccases under those Rules 10 date, The only disadvantage is that the ICSID Convention is not applicable to arbitration under these Additional Facility Rules s0 that enforcement is not a direct obligation. However, enforcement remains possible in the normal way under the New York Convention or other applicable bilateral or multitateral conventions 3 eyorw.taumwoitboese de>, 2 yew seine orglenomachiniex hun. scwmy.pc3-cpaore> 2 Sw warldbank oresChapter 3 3.4. Special Purpose Instinutions 3-39 From time to time, special standing tribunals are established to undertake resolution of certain types of dispute, For example, a number of claims commissions of claims wibunals have been set up in order to deat with the Jegal ‘and economic consequences of nationalizations, revolutions, wars or other events affecting a large number of partes in the same way. These tribunals are usually & form of non-national arbitration. Parties who have a claim falling within the declared jurisdiction of such a tribunal have the right to submit their claims to those tribunals, Normally national courts will not have or accept jurisdiction over such claims. 3-40 This type of tribunal will generally have becn established by an international convention or some other intexoational instrument. The patties against whom specific claims are made accept that the designated tibunal has the responsibility and authority to determine such claims. In general the creation of these claims commissions is part of an overall seitlement of the underlying political disputes between the states involved. 3-41 These special purpose tribunals have made a significant contribution towards the development of international arbitration because of the substantive law and procedural questions raised, and also the sheer volume of cases involved, ‘There is generally no formal arbitration agreement between the claimants and the parties against whom claims are brought in this type of tribunal, This is not sirietly necessary because of the nature of the tribunal and the basis of the Jurisdiction. Furthermore, the instrument under which the tibunal is established will provide a mechanism of enforcement if necessary. Iu any event, as the parties against whom claims are made have accepted the jurisdiction of the tribunal in advance, the effect of a party submitting a formal claim would be to create an agreement giving jurisdiction to the tibunal. This would be a form of acceptance of the standing offer of arbitration. The award of the tribunal should therefore be enforceable under the New York Convention in the normal way, (@) fran-US Claims Tribunal 3-42. ‘There was enormous political hostility and tension in 1979 between Iran and the US due mainly to the detention of the US citizens in Tran when the Iranian revolution was underway, Before the Iranian Revolution, Iran and the US 42Forms of Arbitration had an annual bilateral tade of approximately USS6 billion ®* Not only hat ‘Americaa nationals made very significant investments in Iran, but Tran had also held investments of billions of dollars inthe US and other Western countries. In the wake of the American embassy hostage crisis and based upon rumours that Tran was intending to withdraw its money from the US, the US government froze all Iranian assess in the US, In addition to their actions in the US, US nationals also brought claims elsewhere and attached Iranian property in several counties ‘The tension was significantly reduced by a settlement agreement known as the “Algiers Accords."® The Iran-US Claims Tribunal was established in accordance with the Claims Settlement Agreement within the Algiers Accords which ended the American embassy hostage crisis. 3-43 Inthe Algiers Accords, brokered by the Government in Algeria, Iran and the US agreed that all claims arising out of the Iranian sevolution between nationals of both states should be decided by the Iran-US Claims Tribunal. The hhandreds of commercial lawsuits pending in the US relating to Iran were suspended by presidential order. Furthermore, the partes agreed that in return for releasing Iranian frozen assets in the US, one billion US dollars would be deposited in an escrow account placed under the contcol of the tribunal. This ‘account was to be topped up periodically by Iran and was at the disposal of the \sibunal fo satisfy awards rendered in favour of US nationals. The administrative expenses of the tribunal were to be borne by both states jointly. The tribunal, which is based ia The Hague, is composed of nine members and was officially established in 1981, Iran and the US appointed three members each. The three remaining third country or ncutral arbitrators are appointed according 10 the UNCITRAL Rules by agreement of the stale appointed arbitrators. ‘The President of the tribunal is one of the third country arbitrators. The tribunal's activities are conducted according to a slightly amended version of the UNCITRAL Rules. 3:44 The tribunal is divided into three chambers composed of one arbitrator from each group. Those chambers hear most of the tribunal's caseload. The full tribunal of nine at its regular meetings deals primarily with cases concerning the interpretation of the Accords and official disputes between the parties relating 10 contracts for the sale and purchase of goods and services. Other types of cases 5 See Carbonmean,Arbiraion 852. Sex 20 EM 724 (1981) forthe Declaration and related documents. For commentary, Se, 6g Brower and Brucschke, iran-Uaivad Sites Cloims Tribwral, Khan, The Jrn-Unied States Claims Trbwnof, Lili (8), The Iran-Uried States Clas Tibural 198)-83; Westberg, Case Law ofthe Ira Urited States Clans Tribunal 8 |Chapter 3 ccaa, however, be referred to the full wibunal if they involve important questions of law and there is @ possibility of divergent opinions from the different chambers, 345 The private claims, which are by far the largest group, are divided into claims under and over USS 250,000. While large claims are to be presented by the parties themselves, small claims are, for reasons of procedural economy, presented by the governments and have largely been subject to a lump sum settlement between the two States. The breadth of private claims range from expropriation of property, breach of contractual obligations, non-payment of debis, outstanding salaries, and claims for medical and educational expenses of Iranian oationals in the US. 3-46 The jurisdiction of the tribunal is limited to disputes between nationals of Iran and the US under Article H of the Algiers Accords. Parties from other ‘countries had no right to have their disputes resulting from the Iranian revolution decided by the tribunal or even profit {rom the facilitated procedure of executing awards available to the tribunal, They must bring claims against Iran in their local courts with all the problems of execution in Tran, The tribunal's decisions are to a large extent published and have given rise 10 a body of international Jjurisprudence. They have had an important influence on many aspects of the ‘practice and development of international commercial arbitration in the past 20 years. There have been almost 5,000 cases filed with the Iran-US Claims ‘Tribunal. (b) United Nations Compensation Commission 3-47 The United Nations Compensation Commission (UNCC) is a subsidiary ‘organ of the United Nations Security Council based in Geneva. It was established by the Security Council in 1991 10 process claims and pay compensation for losses resulting from Iraq's invasion and occupation of Kuwait, Compensation is payable to successful claimants from a special fund that receives a percentage of the proceeds from sales of Iraqi oil, 3-48 The Security Council established Iraq's legal responsibility for such losses in its Resolution 687 of 3 Apri 1991, which states in pertinent part % Brower, “Te Lessons fom the Irn-U.S. Claims ‘Tribunal applied to Claims agninst freq” in Lilie (i), The Fran United States Claims Tribunal 1981-83, 19 “4 | | | |Forms of Arbitration is lieble uncer international low for any direct loss, damage, including the depletion of natural resources, or injury to foreign sa result of {raq's unlawful invasion Iraq environmental damage snd Governments, nagonals and corporations, ‘and occupation of Kuwait 3.49 Resolution 687 (1991) is one of the most complex and far-reaching “Fecsions ever taken by the Security Council, It was adopted under Chapter VIL of the UN Charter, whic concems action with respect t0 threats to the peace, breaches of the peace and acts of aggression. 3.50 ‘The UNCC structure includes & Governing Council, a Secretariat and panels of commissioners. Operations are conducted by the Secretariat which aso prepares the cases to be decided by the panels of commissioners. Theit enor pre recommenations, however, Fequire approval by the Governing Council Despite its function to resolve claims against Iraq, the UNCC is not court cr an arbitral tribunal before whic the partes appear: itis @ an essentially fect-finding function of examining, essing payments and resolving political organ that performs lime, verifying their validity, evaluating losses, as sisputed elaims.** 3.51 ‘The character of the UNCC is influenced by the fact that the gener#l Tiabiliy of Iraq for all direct losses resulting from its invasion of Kuwait has already been determined. % 52 Over 2,500,000 claims with an asserted value of greater than USS 176 dillion hove been filed with the UNCC. "Those claims range from issues of persona injury and death, evacuation and environmental damages, 19 rcinary Pemmercial claims. Due to the volume of claims it was necessary 10 adopt procedures to decide the claims within a reasonable period of time, Toss Procedures deviate considerably from the classical approaches usually adcpic By courts and arbitration tribunals. The procedure followed is set out in the apo of te Seccary-Goeral Paruant 1 Parag 19 of te Senurty Counc) Resouton Be UN Doe $2559 (1991), para 20; sec abso Alzamora, “The UN Compensslon Ser aon, An Overiew" in Lilich (8). The Tran-United States Cline Tribunal 1981-53 cone enenns between the UNCC and he Iran-US Clans Tribunal, ee Brower, The 8 ee ce an-U.S.Cisims Tuna applied to Cams gastro” in Lillich (ed), 6d, 15 a5 2 Resolulon 687, paragraph 16Chapter 3 Provisional Rules for Claims Procedure adopted by the Governing Councit in 1992." 3-53 In general all claims had (o be submitted by governments on behalf of their nationals or residents on standardised claims forms. The Secretariat makes @ preliminary assessment on whether the claims meet the formal requirements (Article 14) and reports to the Governing Council on the claims received and the Jegal and factual issues raised (Anticie 16). Payments are not made to the individual claimants but 10 the relevant government which then distributes the payment on the basis of Governing Council guidelines, The compensatory decision of the UNCC does not qualify as an arbitration award and cannot be ‘enforced under the New York Convention. Therefore the UNCC does not bar a party from pursuing its claim f© a national court or arbitration tribunal and then to enforce them against other available assots of frag.” (€) The Claims Resoluion Tribunal for Dormant Accounts in Switzerland” 3-54 The Claims Resolution Tribunal for Dormant Accounts in Switzetland {CRT) was set up in 1998 by the Independent Claims Resolution Foundation set up by the Swiss Bankers Association. It is a claims resolution process in respect of accounts in Swiss banks, particularly since before and alter the World War 411 The CRT is an independent tribunal based in Zurich under the supervision of the Swiss Bankers Association and the Independent Committee of Eminent Persons, created by agrecment between the Swiss Bankers Association and the World Tewish Restitution Organisation‘ The claims resolution process itself is carried out by the Independent Claims Resolution Foundation. 3:5 The CRT may hear claims concerning accounts opened by non-Swiss nationals o residents, which have been dormant since 9 May 1945 and details of ‘which were published by the Swiss Bankers Association in 1997 and 1999. Both the claimant and the bank concerned must enter a claims resolution agreement Decision 10, Provisional Rules for Claims Procedures, S/AC.26/1992/10 (1952) produced in Lillich (ed), The Iran-United States Clais Tribuaal 1981-83, Appendix C, 427, For 2 detailed review of the procedure fee Gibson, "Using Computers 10 Evaluate Chaims at the United ‘Nations Compensation Commission”, 13 Arb fat 169 (1997) 172. 3 yrs eh> (ast visited November 2002) » See ewow-cr.chimenu hin 49 See, genealy, Karr (ed), “The Claims Resolution Process on Dormant Ascounts in Switeerland”, ASA Special Series, 13 (2000) “Riemer, von Segsasor and Von der Crone, “Sehiedspericht fur nachrchenlose Konten in der Scheie”, ASA Bulla 252 (1998), Blessing, Inireetion o Arbitration, para 408. 46 | | | | | 1 | | | | | | | { | | | |Forms of Arbitration (ie, arbitration agreement) before a claim is submited to the tribunal. The CRT is composed of a secretariat, a chairman, a vice chairman and up to fifteen other members and deals with those claims where the alleged ownership is contested by the bank holding the account or several persons who clair to be entitled. The jurisdiction of the CRT rests on a submission by the Swiss banks and the choice (of the claimant to pursue its rights by means of the CRT and not through the state courts. The procedure is based on the “Rules of Procedure for the Claims Resolution Process”? agreed upon by the Board of Trustees of the sponsoring foundation and the “Internal Rules ofthe Claims Resolution Tribunal” 3.56 Claims rejected by the banks are submitted to an initial screening procedure before a sole arbitrator who decides whether or not sufficient proof has been submitted by the claimant which would justify the release of the name of the bank and the amount held in the dormant account. Given the problems created by the destruction of evidence during the war, a relaxed standard of proof ‘applies in the tribunal. According 10 Article 22 CRT Rules of Procedure, the claimant only has to make a plausible casc that he is entitled to the dormant account. The Jaw applicable to the merits of the claim is usually Swiss law in so far as the relationship between the original holder of the account and the bank is concerned, Since the publication of two lists of dormant account by the Swiss Banker Association in 1997 32,000 claims have been filed with the CRT." (d) International Cormnission on Holocaust Era Insurance Claims“ 3.57 ‘The ICHEIC was established in 2000 by several European insurance ‘companies, US insurance regulators and the State of Israel. The aim of this body js to consider claims by holocaust survivors and their families to recover under unpaid insurance policies. The ICHEIC has its seat in London, 3:58 ‘There is a two year period for the Filing of claims to be considered by the Commission. As the insurance companies have accepted the jurisdiction of the ICHEIC its decisions should be final. The jurisdiction over claimants only comes about when the claim is filed; this is an acceptance by conduct of the Commission decision. These decisions will have the effect of an arbitration award and wil) be enforceable under the New York Convention ‘© Published in ASA Bullrn 258 (1998) Blessing, Introduction 1 Arbitration, para + carnicheleore> ‘See cwww.er.org>Chapter 3 3.5, Online Dispute Resolution'® Institutions 3.59 There are a number of companies and organizations offering on tine dispute resolution services. Services offered range from negotiating the amount of a settlement to full mediation or arbitration. There are no universally accepted rules currently governing on Tine resolution procedures.” There are international dispute resolution procedures specifically for the determination of domain name disputes. See, ep. Katsch and Rivkin, Online Diepute Resolution; Rue, Online Dispute Resolution for Business (Jossey-Bass 2002). 46 See, eg. WIPO Domain Naque Dispute Resolution Service Center, Resolution Integrity (line Organisation, ICANN Noa-Profit Corpeation © WIPO has adopted its standard arbitration rues to suche on ine aren, primarily t allow on line secure filing of documents and eal time correspondence between the pats 4 See: Uniform Domain Name Dispate Resoltion Pobey adopted by the tntermex Corporation for Assigned Names and Numbers (ICANN) on 26 August 1998, wu ican. orpiedp/udin~ poly 24pei99htm {lst vised 30 Septem: 2002). i) "Rules for Uniform Domain Name Dispute Resolution Policy” adopted by the latest Corporation for Assigned) Names and Numbers (ICANN) ot 24 October 1999, woieannorgiudeplurp-paiey-240089.him: i) WIPO. Aritrtion and Mediation Cenier Supplemental rules for Uniform Domain Name Dispute Resolution Policy” in effect as 1 December 1999 on (ast visited 30 September 2002) 43