Daniel Albuquerque has already given us a foretaste of international arbitration towards the end of 2020. In the coming installments in the New Year, he concentrates on international trade disputes in general and the various institutions dedicated to arbitration and dispute resolution. Here below is the role of International Chamber of Commerce (ICC)
The International Court of Arbitration
The International Court of Arbitration of the International Chamber of Commerce is the independent arbitration body of the ICC. The statutes of the Court are set forth in Appendix I.
Article 1: ICC International Court of Arbitration
The function of the International Court of Arbitration of the International Chamber of Commerce (the ‘Court’) is to ensure the application of the Rules of Arbitration of the International Chamber of Commerce, and it has all the necessary powers for that purpose.
Article 1: Function, Appendix I, the Statutes of the Court
Arbitration Case
Petitioners: Gujarat State Petroleum Corporation Ltd, Gujarat; Alkor Petro Ltd, Andhra Pradesh; Western Drilling Contractors Private Ltd, Uttar Pradesh. All are registered companies of India as per law. They filed a petition to confirm arbitral award.
Respondents: Yemeni Ministry of Oil and Minerals, Republic of Yemen, a foreign state not entitled to sovereign immunity under 28 U.S.C. Sect. 1605 as shown as follows.
Jurisdiction: This is an action to enforce an arbitral award rendered in France, a signatory to the New York Convention, in the United States. Jurisdiction is therefore appropriate. Ref 9 U.S.C. Sect, 203 (“An action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States. The district courts of the United States shall have original jurisdiction over such an action or proceeding, regardless of amount in controversy.”)
Facts of the Case: The above parties entered into the business of petroleum and hydrocarbon exploration and their production through an awarded bid in Yemen in 2006. The business expanded by another three similar Production Sharing Agreements (PSAs) under International Chamber of Commerce (Paris) (‘ICC’). Specifically, Article 23 of the PSAs where it is stated that in case of any dispute, submission of the same will be under this article in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce and application may be made to a court that has jurisdiction for the judicial acceptance of the award.
The Dispute: It was about the PSAs being terminated by the respondent, who utilized a Force Majeure clause according to which respondents were not entitled to draw upon letters of credit issued to ensure that the petitioners satisfied their obligations under the PSAs.
The Arbitral Award: The Court of Arbitration first established its jurisdiction which was earlier challenged by the respondent. After due deliberation on the PSAs it upheld the petitioners’ claim. It also granted the relief as well as settled the legal costs. International Chamber of Commerce
During the WWI industry, trade and commerce had collapsed. Immediately after the war, the ICC was founded in 1919 in Paris as the need of the hour to re-establish business and business community. In the beginning it had a moniker, Merchants of Peace. Quite aptly the motto expressed: We make business work for everyone, everyday everywhere. A hundred years of history has set this institution up as one of the most important organizations in the world. Its network of local ICCs is spread over 120 countries, more than 45 million member companies, and numerous state organizations etc., thousands of experts, programs and is affiliated to scores of world organizations such as United Nations and its various developmental programs, it has its prime place at WTO, G-20, various economic fora, inter-governmental and inter-regional economic blocks across the globe, for instance, Davos Economic Forum, OECD organization, etc. Ajaypal Singh is its current chairman; John Denton is its General Secretary.
The Court of Arbitration
The case discussed at the outset amply demonstrates the simple but effective system of Arbitration and Dispute Resolution (ADR) among the member companies. The Arbitration Court was inducted into the ICC in 1923, a few years later than the mother organization. The term Court must not be understood as a system of adjudication established by a sovereign state power where guilty is punished and the innocent reap the benefits justice.
The ICC is a voluntary organization that facilitates its members to settle their disputes peacefully. The parties to the dispute would have agreed when they contracted agreements of trade and commerce to the necessary pre-conditions of jurisdiction; further, they would have determined the nature of the arbitrator, place, and language. Indeed, above all to follow the rules of ICC. We would have an opportunity to discuss the rules at a later date.
In the past, the ADR verdicts were not published to maintain confidentiality and privacy of the parties. There is no hard and fast rule to publish them. It depends how the parties to the contract have drafted their dispute redressal clauses in the documents. The ADRs are preferable for various reasons.
The dispute resolution is pre-determined mutually while drawing the business contract. It foresees risks. The parties to a contract trust themselves to solve problems of the future. Further, the ADRs determine the procedures for achieving results. Above all, arbitration makes all contracting parties equal. Finally, arbitration method avoids astronomical legal costs.
Principle of Arbitration
Ludwig Quidde (1858-1941), was a German politician who lived through the most troubling four eras in German history: Bismarck, the Hohenzollern Empire, the Weimar Republic and the Nazi dictatorship.
However, he was a convinced pacifist and worked and suffered for peace. Arbitration is the strongest tool that he advocated to establish peace. He wrote: “Great progress was made when arbitration treaties were concluded in which contracting powers pledge in advance to submit all conflicts to an arbitration court, treaties which not only specify the composition of the court but also its procedure.”
The basic essence of arbitration is encapsulated in these wise words and this is used in the resolution of all sorts of disputes – political, war and conflicts and trade and commerce. In 1927, he was most deservedly honored with the Nobel Peace Prize
