15 Jun The Devil is in the Detail
And getting the detail right in the context of drafting international arbitration clauses is fundamental.
Croft Solicitors, assisted by Rowan Pennington-Benton of 3 Hare Court Chambers, has successfully defended a challenge to the jurisdiction of the International Chamber of Commerce (ICC) in an international arbitration involving parties from Switzerland and the BVI.
Background
Croft Solicitors were instructed by a Swiss company in relation to a contractual claim against a company located in the BVI. The contract related to the sale of goods to a state backed company in a country within the Commonwealth of Independent States. The arbitration was referred to the ICC.
Issue
The Respondent challenged the ICC’s jurisdiction.
One of the Respondent’s main challenges to the ICC’s jurisdiction was the English translation of the arbitration clause contained in the contract.
The contract was in Russian but also contained an English translation. The English translation of the arbitration clause referred to an arbitration in another arbitral institution. Our client maintained that the English translation of the clause, contained within the contract, was erroneous, and that an accurate translation of the clause referred to the arbitration being held in the ICC. It was further argued that the Russian text of the contract prevailed over the English text of the contract should there be any discrepancies.
The matter was referred to the Tribunal for determination.
Before the hearing, the Respondent withdrew its challenge to the jurisdiction of the ICC and accepted the jurisdiction of the ICC.
Comment
It is always preferable to try to avoid any potential uncertainty in contracts. When drafting an international arbitration clause, it is important to be clear and concise so that all the terms of the arbitration procedure are agreed in advance.
As a general rule, parties should try to agree whether they want an institutional arbitration (i.e. one administered by the ICC or the LCIA) or an ad hoc arbitration (i.e. where no institution is involved in the process).
If the parties agree to an institutional arbitration, it is recommended that the parties agree on which institute should govern the arbitration and adopt the model arbitration clause from the institution’s website (the clause is usually translated into different languages).
Parties can adopt the model clause to their own circumstances and may consider stipulating the number of arbitrators, place and language of the arbitration and the law applicable to the merit.
The ICC’s model international arbitration clause can be found via this link.
Croft Solicitors’ dedicated international arbitration lawyers handle complex, high-value multi-jurisdictional arbitrations. For further information, or to instruct Croft Solicitors, please contact Edward Miller at Croft Solicitors on + 44 (0) 207 0789764 or edward.miller@croftsolicitors.com
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