JOURNAL ARTICLE

The Practice of the ICC International

Court of Arbitration With Regard to the
Fixing of the Place of Arbitration

Arbitration International, Volume 12, Issue 3, 1 September 1996, Pages

347–358, https://doi-
org.sdl.idm.oclc.org/10.1093/arbitration/12.3.347
Published: 20 November 2014

Issue Section: Notes

THIS STUDY concerns the cases which were submitted to the

International Court of Arbitration of the ICC during the years 1990
to 1994 and in particular, the cases where the parties had not
agreed on the place of the arbitration.

During this period some 1,750 new cases were filed with the
International Court of Arbitration. In the cases where the parties
had reached an agreement on the place of arbitration, which was
most often the case, the Court simply confirmed the place where
the arbitration was to take place. Whereas in 1975 the parties had
chosen the place of arbitration in no more than 46 per cent of the
cases that were filed, this percentage has considerably increased
ever since: 52 per cent in 1980, 68 per cent in 1985, 86 per cent in
1 2
1990 and 87.3 per cent in 1994.

The place of arbitration is the venue where the arbitral tribunal has
its seat. This means in essence the place where the arbitral award
is deemed to be rendered (in accordance with the provisions of
Article 22 of the ICC Rules of Arbitration). The fact that the
hearings are sometimes held elsewhere than in the place of
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arbitration does not alter this principle in any way. According to
the circumstances of the case, an arbitral tribunal may indeed
organize hearings outside the place which has been fixed or
agreed, be it in another town within the same country, or outside
the country of the place of the arbitration.
Although Article 11 of the ICC Rules of Arbitration offers the parties
the possibility to disconnect the procedural rules from those which
are applicable in the place of arbitration, the parties cannot
derogate from the mandatory rules prevailing at the place of
arbitration. Due to the fact that these mandatory rules are directly
4
applicable to the arbitral procedure, the parties will be well
advised to examine the advantages and the disadvantages of
5
various candidate places of arbitration.

I. Respect By The Court of Party Autonomy

Pursuant to Article 12 of the Rules of Arbitration of the

International Chamber of Commerce, the place of arbitration is to
be fixed by the International Court of Arbitration, unless it has
been agreed upon by the parties.

The parties are free to determine the place of arbitration. Very

often, they will agree upon the place of arbitration in the
arbitration clause. It is also possible that they agree on the place of
arbitration in the course of the procedure.

The variety of places of arbitration chosen by the parties reveals

the diversity of the origins of the parties. Thus, as regards the new
cases which were submitted to the Court in 1994, these
arbitrations concerned parties originating from not less than 100
countries. The Court confirmed places of arbitration in 31 different
6
countries, which in decreasing order were the following:

France : 67

Switzerland : 47

United Kingdom : 24

United States : 15

Sweden : 11

Austria : 10

Germany : 7
 Belgium : 6

India : 4

Singapore : 3

Canada : 2

Italy : 2

Mexico : 2

Netherlands : 2

Bangladesh : 1

Bermuda : 1

Denmark : 1

Egypt : 1

Ethiopia : 1

Greece : 1

Indonesia : 1

Korea (Rep.of) : 1

Luxembourg : 1

Malaysia : 1

Philippines : 1

Puerto Rico : 1

Syria : 1Z

In accordance with the principle of party autonomy, the Court

accepts the choice made by the parties. It confirms the place of
arbitration chosen by the parties, even if this place is located in the
country of one of them. An objection raised by a party against this
place is without effect, if the other party requests the application
of the clause. The Court considers that it does not have the
authority to alter the place of arbitration agreed upon between the
parties, even if one of the parties might encounter difficulties
travelling to this place at the time the procedure is set in motion.
The parties sometimes provide in the arbitration clause that the
place of arbitration shall be fixed by the arbitral tribunal. The
Court may then limit itself, at the time of the setting in motion of
the arbitration, to take note that it will be for the arbitral tribunal
to fix the place of arbitration.

The ingenuity of the parties in drafting arbitration clauses

sometimes seems to be endless. This ingenuity may, however,
make it very difficult, or even impossible, for the Court to set the
arbitration in motion in accordance with the terms of the clause,
more particularly in the event that the parties interpret the clause
differently. thus, in a particular case, the parties had stipulated
that the place of arbitration would depend on the nature of the
dispute, thereby providing a series of seats depending on the type
of dispute which might arise. Since the Court does not itself settle
the disputes (see Article 2.1 of the ICC rules of Arbitration), it could
not choose among the places stipulated in the clause when faced
with a disagreement between the parties. In order to avoid
prejudging the question which was to be determined by the
arbitral tribunal, the Court provisionally fixed a neutral seat as
place of arbitration.

There has even been filed before the Court a case in which there
were versions of the arbitration clause in different languages,
which were not identical. Although the clause in one of the
languages stipulated a place of arbitration, the same clause in
another language did not mention a particular place. In light of the
objection raised by one of the parties with respect to the clause
which stipulated a place of arbitration, the Court fixed
provisionally this place as venue of the arbitration, while leaving
the arbitral tribunal the power finally to determine the place of
arbitration.

Finally, it should be pointed out that, in the event that the parties
stipulate in the clause that the arbitration shall take place in venue
‘A or B’ without any other indication, and in the case of a
disagreement thereon between the parties, the Court will choose
one of these venues and fix it as place of arbitration.

In a case where the arbitration clause does not contain any

indication as to the place of arbitration, the Court fixes the place of
arbitration pursuant to the powers conferred on it by Article 12 of
the Rules. This decision is generally taken after the parties have
been invited to provide their possible comments with respect to
the matter of the place of arbitration.

Based on the elements of the file as presented by the Secretariat,

the Court must make its decision during the session in which it
decides to set the arbitration procedure in motion. As a general
rule, the Secretariat after having examined the elements of the file,
makes a recommendation to the court with respect to the place of
arbitration. The Court is not bound by this recommendation and
can, during its session, decide to fix the place of arbitration in
another situs than the one proposed or recommended by the
Secretariat.

In each case, the Court takes into consideration a series of criteria

in order to fix the place of arbitration. Some of these criteria are of
a general nature: other criteria are more particularly related to the
elements of the file.

II. General Criteria for the Fixing of the

Place by the Court

(a) Ratification of International Conventions

Regarding the Enforcement of Arbitral Awards
The Court always verifies whether the country in which it
envisages to fix the place of arbitration provides the necessary
safeguards for an arbitral award, once rendered, to be binding and
enforceable at law. Since the enforcement of an arbitral award will
not necessarily take place in the country where the arbitration was
conducted, the Court will verify whether the country of the seat of
the arbitration has adhered to a convention or treaty regarding the
enforcement of arbitral awards.

The most important Convention in this respect is the Convention

on the recognition and enforcement of foreign arbitral awards,
adopted in New York on 10 June 1958. At the end of 1995, this
Convention was ratified by 105 countries.

Among the 100 different countries where the parties in current ICC
arbitrations originate from, some have not yet adhered to the New
York Convention. When the Court has to decide to set an
arbitration in motion with a party originating from a country
which has not adhered to the New York Convention, it will verify
whether the country in question has adhered to other multilateral
conventions regarding the enforcement of arbitral awards (e.g. the
Geneva Protocols of 1923 or 1927, the Geneva Convention of 1961,
the Panama Convention, the Montevideo Convention, the
Convention of the Arab League) or whether the country has signed
with another country a bilateral treaty relating to the enforcement
of arbitral awards. In such case, the Court will fix the place of
arbitration in a third country with which the country in question
has signed a bilateral treaty, if it is not bound by any multilateral
convention.

(b) Likely Intervention of State Courts

In addition to the criterion of the adherence to an international
convention regarding the enforcement of arbitral awards, the
Court will verify whether the law of the country in which the
arbitration is to take place gives power to the local courts to
intervene in the arbitral process excessively, thus offering them
the power to delay the arbitral process. The Court will thus seek to
prevent a party in bad faith being given the opportunity to obstruct
the arbitration by resorting to the local courts in the course of the
7
arbitral proceedings.

Since, over the last few years, an increasing number of countries

adapted their legislation with a view to encouraging the use of
arbitration for the settlement of international commercial
disputes, the number and diversity of venues which are favourable
8 9
to international arbitrations continues to increase. ,

As an indication, in 1994, the Court fixed places of arbitration in

10
the following 10 countries:

France : 25*

Switzerland : 8

Italy : 3

Austria : 2
 Cyprus : 2

United Kingdom : 2

Australia : 1

Bahrain : 1

Canada : 1

Hong Kong : 1

Korea (Rep. of) : 1

Luxembourg : 1

Mexico : 1

Netherlands : 1

Singapore : 1

Spain : 1

United States : 1

* (Including 18 cases in which the Court decided in light of the terms of the
clause that Paris should be the place of arbitration.)

III. Special Case: Reference in the Clause to

‘ICC in Paris’

It flows from the statistics that Paris – and thus France – has by
far the most often been fixed as the place of arbitration. In this
respect, it should be noted that it is the practice of the Court, in
cases where an arbitration clause refers to ‘the International
Chamber of Commerce in Paris’ or ‘of Paris’ without other
11
indication of a place, to decide that Paris shall be the place of
arbitration, in so far as one of the parties indicates that it was the
intention of the parties to arbitrate in Paris or where no comments
to the contrary have been received on the matter.

Through this practice, the Court seeks to take into account an

interpretation which may be given to an arbitration clause
referring to ‘ICC in Paris’ and it thus seeks to avoid any possible
annulment of an award based on such an interpretation.

The Secretariat systematically informs the parties of this practice

before inviting the Court to set the procedure in motion. By so
doing, the Court allows the parties to agree on another venue. If
the parties do not reach agreement on another venue, but
underscore jointly that they had not envisaged Paris as place of
arbitration when making reference to ‘ICC of Paris’, the Court may
fix another venue than Paris as place of arbitration.

Thus, in a case between a French and a Belgian party and a party

from Saudi Arabia, the Court fixed Larnaca (Cyprus) as the place of
arbitration. In a case between an American party and a Mexican
party, the Court decided to fix the place of arbitration in Bermuda
with the aim of avoiding excessive costs.

IV. Particular Criteria for the Fixing by the

Court of the Place of Arbitration

(a) The Neutrality of the Place of Arbitration

While bearing in mind the above general criteria, the Court will
typically seek, to fix a place which is ‘neutral’ for the two parties,
where the parties are of different nationalities. The Court
consequently avoids fixing the place of arbitration in the country
of one of the parties unless very strong and specific reasons would
justify this.

The notion of ‘neutrality’ is essentially conceived by the court in a

geographical sense. However, what matters for the Court is that
the parties have the feeling that the venue is really neutral wim
regard to the dispute between the parties and with regard to the
12
contents of the file.

Thus, the Court considered that Paris was a neutral venue in a

dispute between a German party and an Austrian party and that
Geneva was a neutral venue for a dispute between a French and a
Turkish party. In a dispute between an Italian and a German party,
the Court preferred Geneva rather than Zurich in order not to
favour the German-speaking party. In none of these cases had the
applicable law been determined beforehand.

In a case between a Greek party and a French party where the

parties had provided for the application of both Greek and French
law, the Court, considered Geneva to be an entirely neutral venue.
In a case between a French and a German party where French law
was applicable, the Court also fixed Geneva as the place of
arbitration.

In determining a neutral venue, the Court not only takes into

consideration the origin of the parties but also the origin of the
holding company or the group to which a party may belong (in the
event this is known). Thus, in a case between a party from the
Netherlands and a party from Argentina, the Court avoided fixing
the place of arbitration in the United States, since the claimant was
a Dutch party controlled by an American holding company. The
applicable law was also not determined in this case.

In a case between an American party and a party from Iraq, which

was submitted in a politically sensitive context shortly after the
Gulf War, the Court decided to locate the arbitration in a country
which had remained neutral vis-à-vis the war, namely
Switzerland.

However, in another case between an American party and a party

from Iraq, which was submitted four years after the Gulf War, the
Court fixed Paris as place of arbitration, in light of the request
made by the American party and in the absence of any objection
from the Iraqi party.

(b) Convenience of the Place of Arbitration

Finally, the Court will seek to fix a place of arbitration which is, as
far as possible, equally convenient (or equally inconvenient) to
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both parties.

(i) Equal access to the place of arbitration

Also, when fixing the place of arbitration, the Court will pay
particular attention to the fact that the venue be, as far as possible,
easily accessible for the parties.
Nowadays, the accessibility does not necessarily result from a
geographical distance with respect to a specific venue, but
sometimes from the transportation routes, both road, railway and
air connections with the countries from which the parties
originate. The Court aims to take these factors into account.

Moreover, the Court takes into consideration, as far as possible,

the difficulties which certain parties may encounter in order to
obtain entry visas for the country of the place of arbitration. In a
dispute between an Iranian party and an Italian party, the Court
fixed Paris as the place of arbitration, in light of the fact that
Iranian citizens generally can travel more easily to France than to
other European countries.

(ii) Origin of the parties, of counsel and, as the case may

be, of the arbitrators and the chairman of the arbitral
tribunal or of the sole arbitrator

When the circumstances of the case justify it, the Court may take
into account relevant elements of the file, such as the origin of
counsel representing the parties and, as the case may be, the
origin of the arbitrators proposed by the parties.

Thus, the Court fixed a place of arbitration in the United States in a

matter between two European parties having regard to the fact
that the parties were represented by American counsel and that
they had each proposed an American arbitrator.

In a dispute between a German and a Korean party, where the

parties had provided for the application of Korean law, the Court
fixed San Francisco as place of arbitration. The choice of San
Francisco was based, on the one hand, on equality of access and,
on the other hand, on the fact that the two parties were
represented by American counsel.

The Court fixed Paris as place of arbitration in a case between a

Syrian and a French party, who had stipulated for the application
of French law and who were each represented by counsel in Paris.
All these elements together had brought the Court to fix Paris as
place of arbitration, in spite of the fact that Paris was not neutral
with respect to the origin of the parties.
Sometimes, in cases where the parties have already managed to
reach agreement on the constitution of the arbitral tribunal, the
Court will locate the arbitration in the country of the sole
arbitrator jointly proposed by the parties or in the country of the
proposed chairman of the arbitral tribunal or, as the case may be,
in the country which is common to the other arbitrators, all of this
with a view of limiting the costs of the arbitration. The Court
follows this practice all the more in cases with a small amount in
dispute.

(iii) The costs of the arbitration

In certain cases, particularly those with a small amount in dispute,
the cost factor of the arbitration may be of importance when
determining the place of the arbitration.

The cost of an arbitration for the parties not only consists of the
advance on costs which is paid to the institution (and which covers
the fees and expenses of the arbitrators as well as the
administrative expenses of the institution), but also consists of the
travel expenses of the parties, of their counsel and of the witnesses
and experts who may have to attend the arbitration. Therefore, in
order to reduce the costs, the venue of the arbitration may be fixed
as close as possible to the place of residence of the parties, the
arbitrators and counsel.

In a particular case, the Court may be inclined to fix the place of

arbitration in the country where the arbitrator whom it wishes to
appoint resides. Such a decision, if deemed appropriate by the
Court, will only be taken with a view to limiting the travel costs of
the arbitrator and thus limiting the advance on costs to be paid by
the parties.

(iv) Applicable law

Among other criteria, the Court may take into consideration the
14
choice of applicable law made by the parties. Often, the parties
have chosen the law which is applicable on the merits of the
possible dispute for specific reasons.

If the contracting parties have stipulated that the contract is to be

governed by the existing law of the country of origin of one of the
parties, the location of the arbitration proceeding in this country
would not be in accordance with the criterion of neutrality. In
these instances, when the Court has to fix the place of arbitration,
it may turn to a third country which has a related legal culture.

Thus, the Court has taken into consideration certain relationships

between German and Greek law and in particular the fact that
many Greek lawyers have had a legal education in German law, in
order to fix the place of arbitration in Athens in a case between a
German and an Australian party who had agreed upon the
application of German law. The Court subsequently called upon the
Greek National Committee of the ICC to propose a sole arbitrator
with a view to obtaining the proposal of a Greek arbitrator having
an academic background in German law.

As regards the countries with a civil law system, it is important to

note that Swiss law is frequently called upon to govern
international commercial contracts. When a dispute is submitted
to the Court in which Swiss law is applicable, it favours
Switzerland as place of arbitration in cases where the other criteria
-neutrality, equal access and costs – so permit.

In this way, for example, in a case between a French party and a

German one, the Court has fixed Geneva as place of arbitration in
light of the fact that the parties had chosen Swiss law as the
applicable law. Likewise, the fixing of Geneva as the place of
arbitration in a case between a party from Israel and a party from
Italy was based on the fact that the parties had chosen the law of
the Canton of Geneva as the applicable law.

It will, however, be more difficult to fix the place of arbitration in a

situation where the two parties originate from very different legal
environments and if they have, moreover, stipulated the
application of the law of the place of origin of one of the parties.

The criterion of the applicable law sometimes proves to be more

important than the criterion of the origin of the parties and their
counsel. This was seen in a case between two Italian parties, who
were both represented by Italian counsel, where the contract was
drafted in English and where it was stipulated that the dispute
would be governed by German law. In light of the fact that German
law was stipulated and the fact that English and Italian were the
languages used in the file, the Court fixed Cologne as place of
arbitration and at the same time called upon the German National
Committee to propose the sole arbitrator with a view to obtaining a
German national who had a command of both English and Italian.

(v) Language of the File

Another criterion which is taken into account by the Court is
language. In this connection, the Court will take into consideration
the language of the contract, the language of the request for
arbitration and, if the parties have provided for this in the
arbitration clause, the language of the proceedings.

Thus, in a case between an Italian party and a party from the

Dominican Republic, who had made their contract in Spanish
without providing for the applicable law, the Court fixed Madrid as
the place of arbitration and called upon the Spanish National
Committee to propose the sole arbitrator. It may thus be noted that
the criterion of the language of the arbitration may override the
criterion of the applicable law, if the latter is not provided for.

From a linguistic point of view, Switzerland offers a favourable

environment both for German-speaking and French-speaking
parties. This country permits the Court to fix, for example, Geneva
as place of arbitration for a dispute between a French and a
German party, where French is the language of the file and French
law is applicable. In a dispute between a German and a Greek party,
the Court has, however, fixed Zurich as place of arbitration, while
taking into account that German was the language used in the file
and also that German law was applicable. The Court thereupon
appointed a German-speaking Swiss sole arbitrator residing in
Zurich.

In specific situations, however, the Court has chosen a neutral

venue from the linguistic point of view, in particular when the
relationships between the parties were tense from the very outset.
In a case between an American party and a German-speaking
Swiss party, the Court preferred to fix Paris as the place of
arbitration so as to avoid giving a linguistic or procedural
advantage to one of the parties.
(vi) Other criteria
Finally, there are some other criteria which the Court has to take
into consideration, although less often.

There have been some cases where the place of arbitration was
fixed in the same venue as the one in which a preceding arbitration
was conducted or, in a matter of succession, the venue where the
estate of the deceased was located.

In a shipping matter between a Liberian and a Norwegian party,

where the parties had provided for the application of Norwegian
law, the Court fixed London as the place of arbitration with a view
to appointing an English arbitrator specializing in shipping law.

Finally, it should be noted that, in a case where the arbitration

clause does not determine a specific place, but provides for a
country in which the arbitration is to be conducted, the Court
applies the above criteria inside the given country. Thus, the Court
takes into account the origin of the counsel in order to fix a venue
with equal access: New York as place of arbitration in a case
between a Dutch and an American party, who are represented by
counsel from New York and New Jersey, it being understood that
the parties had stipulated that the arbitration was to take place in
the United States. The Court also seeks to avoid excessive costs
while trying to fix the place of arbitration in the city where the
parties' counsel are residing, in the event they reside in the same
city.

V. Conclusion

The in-depth study of the cases where the Court was called to fix
the place of arbitration reveals the complexity of the decision-
making process involved. It further demonstrates the scope of the
criteria taken into consideration: geographical, linguistic,
financial and legal factors are thus weighed and measured with
great care and attention. Hardly a random decision, the fixing of
the optimal place of arbitration ensures the ideal framework for
successful ICC arbitration proceedings.
Footnotes

1 A. Plantey, ‘L'arbitrage dans le commerce international’, in (1990) XXXVI

Annuaire francais de Droit International 217; M. Gaudet, ‘Overcoming
regional differences’, in (1988) 5 Journal of International Arbitration 4 at
pp. 67–79; H. Verbist, ‘Negotiating & drafting the arbitration clause’, in
The Place of Arbitration (eds. Mys & Breesch, 1992) at p. 132.

2 ‘1994 Statistical Report’, in (1995) 6 ICC International Court of Arbitration

Bulletin 1 at p. 5.

3 Craig, Park, Paulsson, International Chamber of Commerce Arbitration

(1990, 2nd ed.) at p. 119.

4 M. Blessing, ‘The ICC Arbitral Process, Part III: The procedure before the
arbitral tribunal’, in (1992) 3 ICC International Court of Arbitration Bulletin
2, at p. 26.

5 S.Jarvin, ‘The ICC Arbitral Process, Part V: The Place of Arbitration’, in

(1993) 4 ICC International Court of Arbitration Bulletin, 2, at p. 21.

6 ‘1994 Statistical Report’, in (1995) 6 ICC International Court of Arbitration

Bulletin 1, at p. 7.

7 Supra, n. 5, at p. 10.

8 E. Schwartz, ‘Introductory Note’, in (1993) 4 ICC International Court of

Arbitration Bulletin 2, at p. 1.

9 A. Planrey, ‘A major realization of the ICC: International Arbitration’, in

(1994) 5 ICC International Court of Arbitration Bulletin 1, at p. 9.

10 Supra, n. 6.

11 S.R. Bond, ‘How to Draft an Arbitration Clause’, in (1990) 1 ICC

International Court of Arbitration Bulletin 2, at p. 18. In 57 (24 per cent) of
the arbitration clauses submitted to the ICC in 1987 and in .56 (26 per
cent) of the arbitration clauses in 1989, reference was made not simply to
the ICC, but to the ICC ‘in’ Paris or ‘of’ Paris or ‘de’ Paris.

12 Supra, n. 5, at p. 9.

13 Supra, n. 5, at p. 10.

14 In 81 per cent of the cases submitted to the Court in 1994 was specified
 what substantive law would govern the contract; See ‘1994 Statistical
Report’, in (1995) 6 ICC International Court of Arbitration Bulletin 1, at p. 5.

© 1996 LCIA