CHAPTER II

Elements Affecting the Proceedings

1 – The Choice of a Place of Arbitration
According to the principle of party autonomy, parties are free to
choose the place of arbitration. As mentioned above and in case the
parties do not agree on the place of arbitration the arbitral tribunal
would make the choice. Many considerations (economic, political and
administrative) should be taken into account before making this
choice.

The most important factors have to do with the legal environment of

the prospective place of arbitration. This will be relevant both to the
conduct of the arbitration and to the enforceability of awards.

In some instances the place of arbitration determines the law

applicable on arbitration.

2 - The law governing the arbitration

If the parties choose the local law of the place of arbitration to be the
lex arbitri, there are certain minimum requirements in the local law,
one of which is that the local law must be prepared to enforce
international arbitration agreements in line with the New York
Convention; to assist in the constitution of the arbitral tribunal ; and to
give the arbitral tribunal, directly or through its courts, such powers as
it may need to carry out its task efficiently and effectively.

Other than these minimum requirements, there are different points as

to what does and what does not constitute a suitable legal environment
for the conduct of an international commercial arbitration. In all cases
mandatory rules and public policy of that law should be taken into
consideration.

3 - Court Intervention During the Proceedings

Arbitral tribunals have no sovereign powers like state courts to ensure
the proper and efficient conduct of arbitral proceedings and to enforce
177
their awards and thus must rely on the cooperation of state courts.
Beside their co-operational role, state courts play an important
supervisory role.

The relationship between state courts and arbitral tribunals are to be

regulated in all its aspects by the national law of the state in which the
arbitration is to be conducted or in which the award is to be enforced.

(a) Concurrent powers of arbitral tribunals and state courts

the Jurisdiction of Issuing Interim Measures
Interim measures of protection are in many cases needed and
necessary to an arbitrating party to safeguard his rights. Such measures
are sometimes the most effective means to guarantee the satisfaction of
an eventual award.

The importance and necessity of such interim measures in many

instances raises the question of their availability from the arbitral
tribunal or the state courts.

Interim measures may be requested in form of a judicial decision or an

arbitral award or merely by an order. Up to the early nineties, the laws
of Arab countries provided for exclusive jurisdiction to the state courts
to issue interim measures. Arbitral tribunals did not have any
jurisdiction of issuing such measures until very recently, when some
Arab countries such as Egypt, Tunisia, Oman and Bahrain adopted
new laws on arbitration.

However, even in the countries that grant this power to arbitral

tribunals, still the state courts have original jurisdiction to issue them.
It is a concurrent power of the arbitral tribunal and the state courts.

In this regard Article (26) of the UNCITRAL Arbitration Rules

provides that:
“1. At the request of either party, the arbitral tribunal may take
any interim measures it deems necessary in respect of the
subject-matter of the dispute, including measures for the
conservation of the goods forming the subject-matter in dispute,

178
 such as ordering their deposit with a third person or the sale of
perishable goods.
2. Such interim measures may be established in the form of an
interim award. The arbitral tribunal shall be entitled to require
security for the costs of such measures .
3. A request for interim measures addressed by any party to a
judicial authority shall not be deemed incompatible with the
agreement to arbitrate, or as a waiver of that agreement”.

The provision that a request for interim measures addressed by one of

the parties to a judicial authority shall not be deemed to be
incompatible with the agreement to arbitrate, or act as a waiver of that
agreement. This merely preserves the status of the arbitration.

Article 17 of the Model Law of Arbitration provides also that,

“Unless otherwise agreed by the parties, the arbitral tribunal
may, at the request of a party, order any party to take such
interim measure of protection as the arbitral tribunal may
consider necessary in respect of the subject matter of the
dispute. The arbitral tribunal may require any party to provide
appropriate security in connection with such measure”.

It was generally admitted before adopting the Egyptian Law of

Arbitration No.27/94 that an arbitration clause does not give the
arbitration panel the authority to adopt interim rulings.

The new Egyptian Law on arbitration provided for this jurisdiction to

the arbitral tribunal according to Article (24) which stipulates that:
“1. The parties to an arbitration may agree that the arbitration
panel, upon the request of either party, can order any of them to
take any temporary or interim measure that may be required
according to the nature of the dispute. The arbitration panel
may also ask the parties to present whatever guarantee that it
deems sufficient to cover the expenses of such temporary or
interim measure”.

179
Thus, to issue such orders of temporary nature or interim measures,
according to the New Egyptian Law on Arbitration a certain number of
conditions need to be fulfilled:
1. The parties should explicitly and specifically agree to grant
arbitrators this power, either in the arbitration agreement itself or by
virtue of any form of agreement which may even occur after
arbitration proceedings have begun. The UNCITRAL Rules and the
Model Law do not require a special agreement to grant the arbitral
tribunal this powers as the Egyptian Law. According to them this
power is granted to the arbitral tribunal merely by the agreement of
arbitration.
2. That a party to the dispute requests the issuing or the interim order
in question.
3. That the content of the order requested constitute a temporary
measure of urgent nature.
4. That such measure be strictly related and clearly required in the
light of the nature of the dispute. Therefore, arbitrators should not
use this faculty in an extensive manner.
5. Finally, there should be a clear probability of endangering a legal
right or position which thus needs to be urgently protected by the
temporary or interim measure requested by the concerned party.

It is to be noted that the authority to make orders of this kind lies with
the arbitration panel, not with its chairman.

(b) The Supportive Role of the State Courts

The supportive role of the state courts to the arbitral tribunals is very
important. State courts may appoint arbitrators on behalf of a reluctant
party. They may force witnesses to appear and to give their testimonies
before arbitral tribunals. Without this supportive role, the arbitral
tribunals may not be able to conclude their mission.

(c ) The Supervisory Role

In general, the supervisory role of the state courts in relation to the
arbitral process is exercised after the issuing the award . In this
context, it is primarily concerned with:
- the recognition or enforcement of arbitral awards;
- setting aside the award for reasons such as excess of authority
or lack of due process.
180
However, the supervisory role of state courts may be exercised also
during the proceedings in cases of challenging the arbitrators
according to the applicable law.

4 – Organizing the Conduct of the Proceedings

A preliminary meeting may take place between the members of the
arbitral tribunal prior to meeting the parties. This is particularly
important in ad hoc arbitrations, since matters such as the fees and
expenses of the arbitrators are normally dealt with at this stage.
Furthermore, the plan for the proceedings may be agreed upon in these
preliminary meetings.

The important step in the conduct of the proceeding is the exchange of

written submissions in an arbitration. The respondent may respond by
submitting a counterclaim, which may be contested by the claimant on
the grounds that the respondent’s claims do not fall within the
arbitration clause. The respondent may introduce a counterclaim at a
very late stage. This may place the arbitral tribunal in great difficulty,
depending on the circumstances and the type of arbitration. If there is
no justification admitted by the arbitral tribunal for this delay, it may
reject the counterclaim.

The UNCITRAL Arbitration Rules recognize that the initial written

pleadings submitted by the parties are not to be considered final
definitive statements of the parties’ respective positions. Articles 18
and 19 of those Rules make reference to “documents or other evidence
he will submit,” presumably at a later stage in the proceedings. The
UNCITRAL Arbitration Rules do not provide for any strict time limits,
although they do give guidelines in Article (23) which states that:
“The periods of time fixed by the arbitral tribunal for the
communication of written statements (including the statement
of claim and statement of defence) should not exceed forty-five
days. However, the arbitral tribunal may extend the time-limits
if it concludes that an extension is justified”.

Periods of time may be fixed according to the rules of arbitral

institutions, or national laws.
181
In this regard Article 30 of the Egyptian Law of Arbitration states that:
“1. The claimant shall, by the date agreed between the parties or
prescribed by the arbitral panel, send to the respondent and to
each of the arbitrators a written statement of his claims
containing his name and address, the respondent’s name and
address, an explanation of the facts of the case, a definition of
the issues subject of dispute, his claims and all other matters
which are required to be cited in such statement by the
agreement between the parties.
2. The respondent shall, by the date agreed between the
parties or prescribed by the arbitral panel, send to the applicant
and to each of the arbitrators written memorandum of defence
in reply to the statement of claim. He may include in such
memorandum any incidental claims related to the subject matter
of the dispute or invoke a right arising therefrom in the aim of
raising a claim for set-off. This right is available to the
respondent even at a subsequent stage of the proceedings, if the
arbitral panel deems there are circumstances justifying such
delay.
3. Either party may annex to his statement of claim or his
statement of defence, as the case may be, copies of the
documents on which he predicates his claims, and may refer to
all or some of the documents and evidentiary material that he
intends to present. This shall be without prejudice to the right of
the arbitral panel at any stage of the proceedings, to request
submission of the originals of the documents or instruments on
which either of the parties relies”.

In the common law systems, the initiative for the presentation of

evidence is almost wholly in the hands of the parties. The judge acts as
a kind of referee who administers the rules of evidence and eventually
decides the “winner”.

However, in the civil law countries as mentioned above, the judge

takes a far more active part in the conduct of proceeding and in the
presentation of evidence, including the examination of witnesses. It
follows that proceedings in the civil law countries do not need to be

182
bound by the same technical rules of evidence as exist in the
adversarial forum of the common law system.

As noted above, article 30-3 of the Egyptian Law of Arbitration states

that either party may annex copies of the documents that support his
position.
Another method of presenting factual evidence to an arbitral tribunal is
through the testimonies of witnesses.

A relatively common practice has become established under which the

parties submit written statements of the witnesses on whose evidence
they wish to rely. Sometimes these written statements are made under
oath, as affidavits. More frequently, the statements are simply signed
by the witnesses.

Also another method of presenting evidence to an arbitral tribunal is

by the use of expert witnesses. In this regard Article (36) of the
Egyptian Law of Arbitration states that:

"1. The arbitral panel may appoint one expert or more to

present a written or oral report in connection with certain
matters it designates. Such report shall be evidenced in the
minutes of the session. The panel shall be evidenced in the
minutes of the session. The panel shall furnish each of the
parties with a copy of its decision designating the mission
entrusted to the expert.
2. The parties are held to present the expert with any
information he may request in connection with the dispute and
to enable him to inspect and examine any documents, goods or
other assets related thereto, the panel shall adjudicate any
dispute arising between the expert and one of the parties in this
connection.
3.The Arbitral Panel shall send a copy of the experts report to
each party promptly upon its deposition, while allowing each of
them to express his opinion thereon, the parties are entitled to
review and examine the documents on which the expert
predicated his report and examination.

183
 4. The panel may, following submission of the expert's report
decide, either sua sponte on the basis of request by either party,
to convene a session to hear the expert's testimony, while
allowing the parties to listen to the expert and to discuss with
him the contents of his report. Each of the parties shall be
entitled to present his own expert or more at such session to
express an opinion on the matters addressed in the report
complied by the expert appointed by the arbitral tribunal, unless
the parties otherwise agree."

However, Article (33/4) of the Egyptian Law of Arbitration states that

witnesses and experts are heard without taking an oath.

5 - Hearings
All the rules of the major international institutions provide for a
hearing or hearings to take place at the request of either party, or
according to the decision of the arbitral tribunal itself. Whilst an
arbitral tribunal must proceed to make its award without a hearing if
the parties have expressly so agreed.

In this regard the Egyptian Law of Arbitration provides in Article (33)

that:

"1. The Arbitral Tribunal shall hold pleading sessions to enable

each party to explain the subject matter of his claim and to
present his arguments and evidence. However, it may limit
proceedings to the submission of written memos and documents
unless the parties otherwise agree.
2. The parties to arbitration must be notified of the dates of the
sessions and meetings that the arbitral panel decides to convene
sufficiently in advance of the scheduled date as determined by
the Tribunal according to circumstances.
3. Summary minutes of each meeting held by the arbitral panel
shall be recorded in a procé-verbal, and a copy thereof shall be
delivered to each of the two parties, unless they both agree
otherwise."

184
The best evidence that can be presented in relation to any issue of fact
is almost invariably contained in the documents which came into
existence at the time of the events giving rise to the dispute took place.
This contrasts with the presentation of evidence in the courts in the
common law system, where most facts are proved by direct oral
testimony, and even documentary evidence must in principle be
introduced by a witness in oral evidence.

The UNCITRAL Arbitration Rules provide in Article (18) that:

“The claimant may annex to his statement of claim all
documents he deems relevant or may add a reference to the
documents or other evidence he will submit”.

The LCIA Rules contain a provision to the effect that, subject to any
procedural rules agreed by the parties or determined by the arbitral
tribunal, written statements shall be exchanged. It is stated in Article
(15/6) of the said Rules effective as of January 1, 1998 that:
“All statements referred to in this Article shall be accompanied
by copies (or, if they are specially voluminous, lists) of all
essential documents on which the party concerned relies and
which have not previously”.

185