International Arbitration and distribution: should IDI establish a panel of arbitrators specialized in international distribution?
Chair: Fabio Bortolotti, Buffa Bortolotti & Mathis, Torino, President IDI;
Experience has shown that in general arbitration works well for disputes in relation to distribution-, agency and franchise agreements. However disputes where minor financial interests are involved (< 100.000,00) do not justify the costs of arbitration. The costs of arbitration may in such disputes even exceed the amount of the claim.
Claudia Kolb (Legal and Corporate Department of Gucci Spa) explained that her company (Gucci) addressed the ordinary courts only in relatively simple cases. Even in such cases her experience with ordinary courts was not positive, since ordinary court proceedings, in any case according to her experience in Italy, take too long, even if they only have to decide on matters of jurisdiction. Moreover ordinary courts are not familiar with the fashion industry, where fast decisions, often within not more than 6 months, are required. After 6 months many fashion products become obsolete. She feels that there is a definite need for expedited proceedings, leading to fast, rational and balanced decisions by specialist arbitrators. The use of the same arbitration model is important, not so much the use of the same venue. In general this model should provide for one sole arbitrator with high quality skills and experienced in matters of distribution.
Caroline Bechtel (German Institution für Schiedsgerichtsbarkeit) presented the expedited arbitration procedure under the DIS-Supplementary Rules for Expedited Proceedings 08 (“SREP”) (http://www.dis-arb.de/de/16/regeln/dis-supplementary-rules-for-expedited-proceedings-08-srep-id4 ). These rules apply if the parties have specifically referred to them in their agreement or if the parties have agreed on their application prior to filing a statement of claim. The duration of the expedited proceedings should not be longer than 6 months (one sole arbitrator) or 9 months (in case of 3 arbitrators). The exchange of written submissions is in principle limited (statement of claim, statement of defence and one other statement) unless the parties agree otherwise. Counterclaims and set-offs shall only be admissible with the consent of all parties and the arbitral tribunal. There is only one oral hearing, including the taking of evidence and no further statements are allowed after the closing of the oral hearing.
Frank Spoorenberg (Tavernier Tschanz, Geneva and Vice-President Cour d’Arbitrage de Genève) set out the expedited procedure under article 42 of the Swiss Rules of International Arbitration of the Swiss Chambers of Commerce Association for Arbitration and Mediation. The Rules on the expedited procedure were introduced in 2004 and were reviewed in 2012. The parties may refer to the expedited proceedings as applicable on disputes, irrespective of the amount of the claim. The proceedings are moreover applicable to all cases in which the amount of the dispute, representing the aggregate of the claim and the counterclaim (or any set-off defence) does not exceed CHF 1.000.000,00, unless the Court decides otherwise. Under the rules on the expedited procedure the case shall be referred to a sole arbitrator, unless the arbitration agreement provides for more than one arbitrator. In that case the Secretariat shall invite the parties to refer the case to one sole arbitrator. After the submission of the Answer to the Notice of Arbitration the parties shall, as a rule, be entitled to submit only a Statement of Claim, a Statement of Defence (and counterclaim),and where applicable, a Statement of Defence in reply to the counterclaim. Unless the parties agree that the dispute shall be decided on the basis of documentary evidence only, the arbitral tribunal shall hold a single hearing for the examination of the witnesses and expert witnesses, as well as for oral argument. The award will be made within 6 months from the date on which the Secretariat transmitted the file to the arbitral tribunal. In exceptional circumstances the Court may extend this time limit.
36 % of the cases under the Swiss Rules of International Arbitration are cases conducted under the Rules for expedited proceedings.
Marco Venturello (Venturello e Bottarini Avvocati, Torino) explained how expedited arbitration proceedings are organized under the Arbitration rules of the Arbitration Chamber of the Chamber of Commerce of Piemonte in Torino (cases < 150.000,00 Euro) and under WIPO arbitration rules (irrespective of value of claim).It is necessary to strike the right balance between efficiency and the principles of due process (“right to be heard”).
Under the Arbitration rules of the Arbitration Chamber of the Chamber of Commerce of Piemonte emphasis is placed on the hearing. There will in principle be one sole arbitrator.
Under the WIPO Expedited Arbitration (http://www.wipo.int/amc/en/arbitration/expedited-rules ) often included in licensing agreements on intellectual property rights there will in principle be one sole arbitrator. The request for arbitration must be accompanied by the Statement of Claim. The answer to the request for arbitration (including counterclaim) should be filed within 20 days from receipt of the Request and must be accompanied by a Statement of Defence. The Reply to the Counterclaim shall be submitted within 20 days after the Statement of Defence. The hearing will take place within 30 days after receipt of the Statement of Defence or as the case may be, the Reply to the Counterclaim. Proceedings are closed within 3 months after the last statement and the final award is rendered within 1 month after closure of proceedings. The costs represent a fixed amount for claims up to 10 mio. USD. In WIPO cases 24% is conducted in ordinary arbitration, 19% in expedited arbitration and 57% through mediation proceedings.
Jean-Paul Vulliéty (Lalive, Genève) presentedAct, a joint initiative for alternative dispute resolution by the Geneva Chamber of Commerce ( www.ccig.ch ) and the Geneva Commodity Trading and Shipping Association (www.stsaswiss.ch) supporting dispute resolution in the commodity sector. It provides enhanced tools to navigate time-saving, flexible and effective dispute resolution process with:
- Customised dispute resolution;
- Optional list of arbitrators, mediators, and other experts, specialized in commodity trading, shipping, or finance, compiled by a Selecting Committee.
50% of arbitration cases on commodity trading and shipping take place in Geneva. The applicable Swiss Rules of International Arbitration offer complete flexibility for arbitration proceedings: free choice of law governing the contract, free choice of seat of arbitration in any city or country, freedom on number of arbitrators and free choice of appointment of counsel in or outside Switzerland, free choice of language of the proceedings. Moreover it is possible to start mediation during the arbitration proceedings.
The standardized arbitration clauses offer for example the possibility to:
- Have an award on the basis of documentary evidence only, saving time and costs;
- Shorten terms for submission of Statement of Answer (15 instead of 30 days including counterclaim and set-off defence);
- File statement of claim and defence immediately after constitution of Arbitral Tribunal;
- Shorten terms for appointment of arbitrator(s);
The list of arbitrators is optional and non-exhaustive. Arbitrators on the list – a mix of commodity traders and arbitrators/mediators – are highly experienced in trade and commodities and represent various countries and various legal systems. Listed arbitrators are chosen by a Selecting Committee, which is an independent body appointed by GTSA/CCIG, in accordance with specific selection criteria (e.g. at least 5 years experience, working knowledge of substantive laws on commodity trading, shipping and trade finance, experience in international arbitration/mediation, live within easy reach of Geneva). GTSA is not involved in the administration of arbitration or mediation cases.
Fabio Bortolotti launches the idea of a similar project “Arbitration in Distribution” by IDI, following the success of the Swiss ACT. Standardized arbitration clauses can be designed and a list of arbitrators with experience in litigation and arbitration in distribution cases can be drawn up. IDI can organize training courses and set up a selection committee for inclusion in the list of specialized arbitrators. Candidate arbitrators shall submit for instance their CV with relevant experience and copy of at least one award rendered in a distribution case. Admissible claims may be limited to claims up to € 100.000,00. Publication of awards on the IDI website may be considered.
IDI is currently discussing this new project with the Geneva Chamber of Commerce.
Marinus Vromans, Vanden Eynde Legal (Brussels), IDI Member.