Summary
- A well-prepared Request for Arbitration or Notice of Arbitration should do more than simply satisfy the formal requirements of the applicable rules. In practice, it creates the necessary structure and lays a strategic groundwork for the dispute.
- From a formal point of view, it should clearly identify the parties, the arbitration agreement relied upon, the essential factual and legal basis of the claim, and any immediate procedural matters requiring attention. And yet the document should go beyond the said formal requirements and be prepared with the next stages of the arbitration in mind. It is often sensible at this stage to reserve positions on quantum, further evidence, or expert issues so that nothing is lost unnecessarily later in the proceedings.
- This chapter addresses the practical issues that should be taken into consideration when preparing a Request for Arbitration or a Notice of Arbitration.
Read the arbitration clause or the arbitration agreement
The main source of the arbitral proceedings is the arbitration agreement/arbitration clause included in the relevant commercial contract. Arbitration clauses come in different shapes and forms, covering various matters. That being said, some clauses may simply mention the parties’ desire to arbitrate in one sentence, while others may be half a page long, addressing every detail of the proceedings.
Regardless of the form or length, at its core, the arbitration clause should first and foremost express the parties’ desire to resolve their disputes through arbitration rather than state courts. As long as there is such an express agreement, the parties are bound by the arbitration clause. Any deviation, including going to state court, could slow things down or, in some cases, lead to the claims being dismissed altogether.
It is common for arbitration institutions to publish draft arbitration clauses on their official websites. The goal is to encourage the parties to include in their contracts clauses that are formally structured to tick all the necessary boxes to avoid future possible challenges to their validity. For example, there is a standard arbitration clause proposed by the London Court of International Arbitration (LCIA) that reads as follows:
“Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the LCIA Rules, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be [one/three]. The seat, or legal place, of arbitration shall be [City and/or Country]. The language to be used in the arbitral proceedings shall be [ ]. The governing law of the contract shall be the substantive law of [ ].”
Here is a typical clause one finds in a charter party for a sea-going vessel:
“The place of General Average and arbitration proceedings to be London / English law to apply.”
Once the arbitration clause has been identified, the following questions should be considered:
Formal considerations: It is important to first check who is covered by an arbitration agreement. For example, where the relevant commercial contract is concluded with a company, the company directors will not, as a matter of law, be covered by the arbitration clause unless they have also signed the said contract in their personal capacity. Likewise, where a claim is to be pursued against a shipowner under a bill of lading, it will not generally be possible to rely on the arbitration clause in the charterparty between the shipowner and the charterer unless the said arbitration clause has been specifically incorporated into the bill of lading.
Pre-arbitration considerations: While it is not always the case, an arbitration clause may include clarifications as to how the arbitration proceedings are to be commenced. More often, however, the arbitration clause refers to the relevant arbitration rules, which in turn provide more detailed guidance on how the proceedings are to be commenced. It is also common for such arbitration clauses to include the steps to be taken by the parties prior to the commencement. As an example, such steps could include mandatory negotiations limited in time or mediation. It is important that such pre-arbitration requirements are fully complied with. Failure to do so may lead to the tribunal’s decision that it lacks jurisdiction, or to a stay of the proceedings until such requirements are complied with. An example of such an arbitration clause would be the following:
“Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the LCIA Rules, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be [one/three]. The seat, or legal place, of arbitration shall be [City and/or Country]. The language to be used in the arbitral proceedings shall be [ ]. The governing law of the contract shall be the substantive law of [ ]. Prior to commencing arbitration, the parties shall attempt to resolve any disputes or claims at the level of the parties’ CEOs. Any party seeking to advance a claim shall write to the other party’s CEO setting out the details of the claim and requesting the CEO’s comments. The other party’s CEO shall reply within two (2) weeks of receipt of such communication. If the dispute is not resolved in this way, the parties’ CEOs will negotiate for one (1) week in order to resolve the dispute. If the dispute is not resolved in this manner, arbitration may be commenced.”
Formation of the tribunal: In practice, it falls on the arbitration clause, the applicable arbitration rules or the law of the seat (in this order) to establish what should be the number of arbitrators, the time limits for nomination, and the procedure for appointing the presiding arbitrator. Deadlines are important at this stage. A failure by the claimant to nominate an arbitrator (if so provided by the arbitration clause) of their choice in time may mean losing the right to make the appointment. If this is to be the case, the institution, the court, or, in some cases, even the opposing party may step in and make the appointment instead. The relevant clause might provide, for instance:
“The party seeking to advance a claim shall commence arbitration by serving upon the other party a Notice of Arbitration naming therein its nominated arbitrator. The respondent shall acknowledge receipt immediately and will file its response to the Request for Arbitration within 28 days from the Commencement Date in accordance with Article 2 LCIA Rules. In the response, the respondent shall name the respondent’s nominated arbitrator. The two arbitrators so appointed shall select the presiding arbitrator.”
Arbitration Rules: It is likewise important to check whether the arbitration clause provides for any arbitration rules. The first example of the arbitration clause cited above incorporates the LCIA Rules by reference. Article 1 of the LCIA Rules provides that arbitration commences by delivering a written Request for Arbitration to the Registrar of the LCIA Court and by paying the registration fee. It then specifies the requirements that any Request for Arbitration must fulfil.
Seat of arbitration: If the arbitration clause identifies the seat of arbitration, the law of the seat will apply accordingly. Where an arbitration clause says “arbitration in London” or “arbitration in Paris“, the law of the seat will be English or French, respectively. The law of the seat will ordinarily provide the default position as to how arbitration proceedings are to be commenced, should the arbitration agreement or the chosen Rules be mute on the issue. The choice of seat is also important because it determines which courts will supervise the arbitration and which legal system will govern procedural aspects of the case, including, among other matters, jurisdictional challenges, interim relief, and any application to set aside the award.
In some cases, arbitration clauses do not provide for the seat of the arbitration. For example, an arbitration clause might provide that “any disputes between the parties are to be resolved by arbitration under English law“, or sometimes, arbitration clauses do not even specify the law. In cases such as these, the arbitral institution (such as the LCIA, if mentioned in the arbitration clause) or the arbitral tribunal itself will determine the seat. The seat would normally be determined by reference to the domicile of the parties (usually the respondent) or the place with which the contract has the closest connection. If there is any uncertainty as to what seat the tribunal or the institution might choose, the parties should comply with the requirement of all legal systems which might potentially be relevant.
Read the applicable arbitration rules
As already mentioned above, most arbitration rules have provisions explaining how to commence arbitration proceedings. For example, Article 1 of the LCIA Rules states:
“1.1. Any party wishing to commence an arbitration under the LCIA Rules (the “Claimant”) shall deliver to the Registrar of the LCIA Court (the “Registrar”) a written Request for Arbitration (the “Request”), containing or accompanied by:
[list of information required in the Request]
…
1.4 The date of receipt by the Registrar of the Request shall be treated as the date upon which the arbitration has commenced for all purposes (the “Commencement Date”), subject to the LCIA’s actual receipt of the registration fee.”
Accordingly, to commence arbitration under the LCIA Rules, the claimant is to deliver to the Registrar a Request for Arbitration containing all the information required by Article 1.1 of the LCIA Rules and pay the commencement fee. If the fee is paid after the request is submitted, the commencement date will be the date on which the fee was actually received by the LCIA. This is important in cases where a claim could potentially be time-barred.
The Stockholm Chamber of Commerce (SCC) likewise requires the submission of a Request for Arbitration and the payment of the applicable registration fee. However, Article 8 provides that “[a]rbitration shall be deemed to commence on the day the SCC receives the Request for Arbitration.” The position appears to be that, unlike under the LCIA Rules, one can commence arbitration by submitting a Request for Arbitration and paying the fee later.
These examples show that not all arbitration rules operate in the same way. While most of them require both a Request for Arbitration and payment of a registration fee, the legal date of commencement may differ. This issue becomes critical when a claim is close to a limitation period or contractual time bar.
Usual requirements to commence arbitration
Generally, the commencement of arbitral proceedings requires three basic steps:
First, as mentioned above, where the clause provides for institutional arbitration before the LCIA, ICC, SCC or another institution, the applicable registration fee must be paid. Guidance on the amount and method of payment is usually available on the institution’s website.
Secondly, a Notice or Request for Arbitration must be prepared. Its contents will depend on any applicable arbitration rules or the law of the seat, although the standard requirements are discussed below.
Thirdly, the Notice of Arbitration must be delivered to the respondent and, where applicable, to the arbitral institution (if any). Proof of delivery should always be retained in case any dispute arises as to whether the Notice was delivered and on what date.
What a Notice of Arbitration should contain
If the applicable rules or the law of the seat of the arbitration are not clear as to what a Notice of Arbitration should contain, it is advisable, based on international practice, that the following information be included:
- A clear statement that arbitration is being commenced and that the document constitutes a Notice or Request for Arbitration.
- The full name of the claimant, and contact details for correspondence with the tribunal and the respondent.
- The full correct name of the respondent, together with any contact details.
- The full text of the arbitration clause relied upon.
- A brief description of:
- the contract or legal relationship on the basis of which relief is sought;
- the relevant facts, preferably in chronological order; and
- the relief sought, such as damages (i.e. monetary payment), declaratory relief, specific performance, or an injunction.
- If the arbitration agreement states that the parties should nominate their arbitrators, the claimant’s nominated arbitrator (name and contact details).
- Identification of any applicable arbitration rules relied upon, where the arbitration agreement incorporates institutional or ad hoc rules by reference.
- Where any doubt may arise as to the respondent’s consent to arbitration, the legal basis on which the respondent is said to be bound by the arbitration agreement.
- Confirmation that the necessary registration fee has been paid, or is being paid.
- Confirmation that the Notice has been or will be served on the respondent.
- The claimant’s position or proposals concerning the procedural matters, such as the seat of arbitration, language, number of arbitrators, or timetable, where these are not specified in the arbitration agreement.
- A reservation of the claimant’s right to amend or supplement its claims and the relief sought as further evidence becomes available.
Conclusion
In summary, the commencement of arbitration is a critical stage which requires both careful attention to formal requirements and a clear understanding of the underlying arbitration agreement. The claimant must ensure that any pre-arbitration steps have been complied with, that the applicable rules and law of the seat are properly considered, and that the Notice or Request for Arbitration contains all essential elements and is served correctly and in time.
While courts and tribunals may, in appropriate cases, adopt a practical approach and uphold notices that clearly communicate an intention to arbitrate, as illustrated in The Happy Day [2002] EWCA Civ 1068, this should not be relied upon. In practice, errors at this stage, particularly in relation to timing or compliance with contractual requirements, can have serious consequences, including the loss of the claim altogether. A well-prepared commencement not only secures the claimant’s position but also sets the procedural and strategic foundation for the arbitration that follows.
The relevant case on addressing the subject matter of the Article:
- The Happy Day [2002] EWCA Civ 1068
https://www.bailii.org/ew/cases/EWCA/Civ/2002/1068.html - C v D [2007] EWCA Civ 1282
https://www.bailii.org/ew/cases/EWCA/Civ/2007/1282.html - Emirates Trading Agency LLC v Prime Mineral Exports Private Ltd [2014] EWHC 2104 (Comm)
https://www.bailii.org/ew/cases/EWHC/Comm/2014/2104.html - Republic of Sierra Leone v SL Mining Ltd [2021] EWHC 286 (Comm)
https://www.bailii.org/ew/cases/EWHC/Comm/2021/286.html - BG Group plc v Republic of Argentina 572 U.S. 25 (2014)
https://supreme.justia.com/cases/federal/us/572/25/
