Wednesday, March 23, 2011

Cairo Regional Centre for International Commercial Arbitration Rules, 2011:

(The following post is contributed by Rohan Bagai)
Notwithstanding the levitating political imbroglio in the Arab Republic of Egypt in the recent times, the Indian corporates (especially the fast moving consumer goods (FMCG) and the automakers) have enjoyed tempting tax breaks, favored trade treaties, and prompt approvals for operating businesses in the transcontinental nation of Africa.

In this context, the strengthened alternative dispute resolution (ADR) apparatus in Egypt has been a huge confidence building measure that has enhanced bilateral relationship between the industry and the Egyptian government machinery over the years. The conception of the Cairo Regional Centre for International Commercial Arbitration (the “CRCICA”) as a centre for administering institutional arbitrations, both domestic and international, for resolution of commercial disputes has been monumental. CRCICA is an independent non-profit international organization founded in 1979 under the auspices of the Asian African Legal Consultative Organization (“AALCO”), in pursuance of AALCO’s decision taken at the Doha Session in 1978 to set up regional centres for international commercial arbitration in Asia and Africa.

The CRCICA since its inception in the year 1979, fashioned its arbitration rules (the “Erstwhile Rules”) with slight variations, in line with the Arbitration Rules of the United Nations Commission on International trade Law (“UNCITRAL”), approved by the General Assembly of the United Nations vide resolution no. 31/98 dated December 15, 1976. Consequently, the Erstwhile Rules were amended in the years 1998, 2000, 2002 and 2007 to ensure that these meet the desires of their users while reflecting the best practices in the sphere of international institutional arbitration.

Recently, the CRCICA has brought into force the new Arbitration Rules (the “2011 Rules”) with effect from March 1, 2011, which is based upon the revised UNCITRAL Arbitration Rules of 2010 (with a few adaptations stemming from CRCICA’s position as an arbitral institution and an appointing authority). Accordingly, pursuant to the said date, the 2011 Rules should apply to all arbitral proceedings that have commenced under the CRCICA.

In this regard, it may be relevant to bring to light a few critical changes and/or additions in the 2011 Rules. The same are inter alia outlined hereunder:
(a) Use of electronic means such as facsimile or e-mail for notice (Article 2);

(b) Insertion of separate clause for response to the notice of arbitration (Article 4);

(c) Person acting as a representative of one of the parties may, at the request of any of the parties or by the arbitral tribunal suo moto, be asked to provide proof of authority for such representation (Article 5);

(d) Incorporation of an express clause regarding the decision by the CRCICA not to proceed with the arbitral proceedings in the event it manifestly lacks jurisdiction over the dispute (Article 6);

(e) Appointment of arbitrator by multiple parties jointly, as claimant or as respondent (Article 10);

(f) Challenge of the arbitrator in the event of failure to act or de jure or de facto impossibility of performing its functions (Article 12);

(g) Introduction of a provision for exclusion of liability of the arbitrator based upon any act or omission in connection with the arbitration (except intentional wrongdoings) (Article 16);

(h) Notice of arbitration may be treated as a statement of claim by the claimant and response to the notice of arbitration may be treated as a statement of defence by the respondent (Article 20 and Article 21);

(i) The phrase “counterclaim or a claim for the purpose of a set-off” has been added in the provisions relating to ‘Amendments to the claim or defense’ under Article 22 and ‘Pleas as to jurisdiction of the Arbitral Tribunal’ under Article 23 respectively;

(j) A detailed clause for interim measures ‘without limitation’ to the examples mentioned in the Erstwhile Rules has been provided (Article 26);

(k) Objections relating to the qualifications, independence, and impartiality of the experts appointed by the arbitral tribunal within the stipulated time period may be raised by the parties (Article 29);

(l) The arbitral tribunal should decide whether there are any remaining issues that need to be decided and if it is appropriate for the arbitral proceedings to be terminated, in case of the claimant’s failure to communicate its statement of claim (Article 30);

(m) In terms of the waiver of right to object, it is imperative under the 2011 Rules to determine if a party ‘does not show’ that its failure to object was justified, before it is deemed to have waived its right to object (Article 32);

(n) The 2011 Rules does not classify the arbitral awards as interim, interlocutory or partial awards, but as separate awards on different issues at different times (Article 32);

(o) Omission of the requirement for the final award to be registered or deposited by the arbitral tribunal and accordingly, keeping the same open to the mandatory provisions of the applicable law (Article 32);

(p) Failure on the parties to designate the law applicable to the substance of the dispute would empower the arbitral tribunal to apply the law, which has the closest connection to the dispute unlike the Erstwhile Rules that provides for the law to be determined by the conflict of law rules (Article 35);

(q) Corrective measures in the provisions relating to costs, arbitral tribunal’s fees and expenses etc. (Article 40, Article 41 and Article 42).
That said it remains to be seen if these amendments boost the efficacy of international commercial arbitration under the 2011 Rules whilst portraying the evolved arbitration law and practice (since the adoption of the original UNCITRAL Model law in the year 1976) and also making CRCICA a hot-spot destination for institutional arbitration in the Afro-Asian region.

- Rohan Bagai

1 comment:

Badrinath Srinivasan said...

CRCICA is one of those many institutions that have modelled their rules based on the UNCITRAL Arbitration Rules (UAR). The adoption of the UAR substantively gives legitimacy to the institution. It would do good for India to follow the footsteps of CRCICA and establish an institution with UAR (with some changes, of course) as its Rules atleast for UAR's legitimacy and universality.