Coursework Paper

Module 1 – Law Practice and Procedure of International Arbitration

Date of Examination: 18TH March 2021

The examination will contribute to 100% of your final mark.

Please start the answer to each question on a new sheet of paper. All sheets should be page-numbered
sequentially.

Please number your answers so that they clearly follow the numbering structure of the examination paper.

Please write your candidate number on the top of each sheet of paper used. Do not write your name.
ANY OTHER IDENTIFICATION WILL INVALIDATE YOUR PAPER.

Results are dispatched to candidates by email, twelve weeks from the examination deadline date.

Results will not be released over the telephone.

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PART 1 (40 Marks)
COMPULSORY QUESTION
Answer all parts to this question.
Your answers should give reasons and refer to the UNCITRAL Model Law and the UNCITRAL Arbitration Rules where
appropriate.

Qu 1

Five parties entered into a Joint Venture Agreement (JVA) whereby they agreed to incorporate a Joint Venture
Company (JVCo) in Nigeria and to each hold a 20% shareholding in the JVCo and to make capital contributions of
$1m each, failing which any other party could make up the shortfall in payment and the shareholding was to be
adjusted pro-rata to the amount of contribution in fact made. Parties A, B, C and D duly contributed $1m and were
allotted 20% of the shares in the JVCo. Party E only contributed $0.5m in cash and claimed that the remainder of its
contribution consisted in it providing plant and machinery to the JVCo and office-space which it valued as amounting
to $0.5m. Party E was responsible for registering the JVCo and upon its registration allotted 20% of the shares in the
JVCo to itself. Party B subsequently paid an additional 0.5m capital into the JVCo and claimed that party E’s
shareholding was accordingly diluted and that it should be registered as holding 30% of the shares in the JVCo and
party A only 10% of the shares. Party E refused to effect the change in shareholding at the company registry. The
governing law of the JVA is Turkish law.

The JVA contained a dispute resolution clause which stated that:

“In the event of any dispute between the parties as to the meaning or effect of this agreement the dispute shall be
submitted for determination by a sole arbitrator, to be appointed by agreement of all the parties. The sole arbitrator
must have knowledge of Turkish and Nigerian law but must not be a national of Turkey or Nigeria. The seat of the
arbitration shall be Istanbul and the arbitration shall be conducted in accordance with the UNCITRAL Arbitration
rules.”

a) Assume that Turkey is a Model Law country. Party B wishes to have the register amended and to commence an
arbitration against Party E to achieve this result. It proposes an arbitrator to the other parties and requests parties A,
C, and D to join it in its request for arbitration against Party E and to consent to its proposed arbitrator. Parties A and
C are willing to do so. Party D does not respond. However, Party E refuses to agree to the arbitrator proposed by
Party B. What can party B do to have an arbitrator appointed?
(10 marks)

b) An arbitrator is duly appointed. Party B’s Request for Arbitration claims declaratory relief on its entitlement to
rectification of the register. Party E disputes the jurisdiction of the arbitrator to grant this relief, on the basis that the
JVCo is not a party to the arbitration agreement and that rectification of the register of a company incorporated in
Nigeria is a matter of Nigerian law. It threatens to apply to the Turkish Courts to dismiss the arbitration if you, the
arbitrator, do not issue an award in its favour dismissing the claim on the basis that you lack jurisdiction. You are the
arbitrator. How do you proceed? What decision do you make?
(10 marks)

c) You have decided that you have jurisdiction and the parties have served and exchanged pleadings. The first
procedural order in the arbitration required each party to serve with its pleading all documents, including witness
statements and expert’s reports, that it will rely on and made no provision for further document disclosure. It stated
that the IBA Rules on the Taking of Evidence shall apply to the arbitration. Party B, having seen Party E’s expert’s
report on the valuation of the JVCo (which values the Plant and Machinery and Office Premises provided by Party E
to the JVCo as being $0.7m) now wants additional disclosure. Party E objects on the basis that this was not provided
for in the procedural order and that it will delay the resolution of the dispute. What do you do?
(10 marks)

d) The matter proceeds and the additional disclosure is made. Party B’s expert values the Plant and Machinery and
Office Premises at $100,000. Party E claims that Party B’s expert is in fact a lawyer working in-house for Party B and
objects to its evidence on these grounds. What options are available to the arbitrator?
(10 marks)
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Part 2 (60 marks)
Answer 3 Questions

Qu 2

a) Explain the concepts of Kompetenz-kompetenz and severability / separability of the arbitration clause /
agreement and describe how, if at all, both have been incorporated in and are supported by either the UNCITRAL
Model Law or the UNCITRAL Arbitration Rules. What are the practical consequences in an arbitration of each
concept?
(10 marks)

b) Are there any formal requirements for a valid arbitration agreement under the ML and if so what are these? Draft
an arbitration clause that would be suitable for use in an international supply contract.
(10 marks)

Qu 3

Compare and contrast the processes of litigation, arbitration and mediation. Describe 3 other ADR processes that
parties to a dispute may resort to. What are the advantages and disadvantages of a hybrid procedure such as med-
arb or arb-med?
(20 marks)

Qu 4

a) What is the full title of the Model Law? Explain the meaning and effect of each individual word used in that title.

(10 marks)

b) The UNCITRAL Model Law 1985 was revised in 2006. Describe the principal changes made by the revision, and
comment on why they were considered necessary. What difficulties can be encountered with the revised provisions
of the 2006 Model Law?
(10 marks)

Qu 5

An arbitrator must be both independent and impartial. The Model Law requires disclosure by arbitrators of
“circumstances which may give rise to justifiable doubts as to impartiality and independence”.

(a) What rights do the parties have if the arbitrator does not comply with the duty of disclosure?

(8 marks)

(b) Which of the following would you disclose and when and why? If your answer is that there is no need to disclose
please give reasons.

i) One of the parties is a public listed company. Your share portfolio, which is managed for you by your broker,
invests only in public listed companies. One month before your appointment your broker purchased 2% of the
shares in the party to the arbitration. You were unaware of this at the time but his quarterly report to you, provided
a month after your appointment, lists the shares as being part of your portfolio.
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ii) You have been appointed as the chairman of a tribunal in a dispute between party A and party B. Party B wishes
to appoint you as its party nominated arbitrator in a dispute between Party B and Party C. The two disputes are
unrelated and arise from totally separate facts and contracts.

iii) You attended at the same school and university as one of the persons claimed to be interested in the outcome of
the arbitration. You were two years junior to the person and did not know them at all at school. At university you
were both members of the University Law society, of which the relevant person was the president.

iv) Your law firm has regularly acted for one of the parties to the dispute but is not acting for it on the current
dispute

(12 marks)

Qu 6

What are the requirements of a valid final award under the UNCITRAL Model Law and UNCITRAL Arbitration Rules? A
party which is dissatisfied with an award has two avenues by which it may, potentially, avoid having to comply with
the award. What are they? To what extent are these provisions consistent and to what extent may they, in practice,
conflict?
(20 marks)