Q 1 Two companies are entering into a long term contract for the sale of chocolate candy bars. The parties include an arbitration agreement as a part of their commercial arrangement. Knowing that disputes may arise over the course of this long term contract, the two companies seek to make the arbitration process efficient, inexpensive and fair to both parties so that no bad feelings will arise if one or the other party invokes the arbitration agreement. The parties decide that all of the existing international arbitration rule sets look too much like domestic court litigation where parties try to beat each other’s brains out to gain victory. Accordingly, the parties decide to design their own procedures. First, the parties designate their mutual friend Ben Beardsly as the permanent arbitrator for their contract. Next, the parties decide that all disputes will be resolved by each party separately discussing the merits of its case with Ben over a glass of wine. After he has discussed the case with each party, Ben will issue a decision that will be binding on both parties. What could possibly go wrong? Q 2 Company A (United States) and Company B (Saudi Arabia) enter into a contract for Company A to service and repair Company B’s jet aircraft in Saudi Arabia. There is a choice of law clause in the contract requiring that the interpretation, application and enforcement of the contract shall be governed by English law. The contract includes an arbitration agreement requiring arbitration in London under the ICC rules of arbitration. The arbitration agreement requires each party to select an arbitrator and then for the two selected arbitration to appoint the chair of the arbitral tribunal. After a dispute arises under the contract, Company A and Company B each appoint arbitrators. Party A selects an American attorney. Party B selects a retired judges from Saudi Arabia. The party appointed arbitrators agree to select Fiona Fairness, a well-respected international arbitrator from the United States. Ms Fairness discloses that she regularly attends meetings of the USCIB Arbitration Subcommittee and that she is one of twenty members of the USCIB International Arbitration Subcommittee of which she and Party A’s appointed arbitrator and Party A’s counsel are members. Company B challenges the appointment of Ms Fairness on the grounds of her relationship with Party A’s arbitrator and Party A’s counsel. Company B also challenges Ms Fairness on the grounds that she is the same nationality as Party A. 1. How should the ICC Court rule on Company B’s challenge? 2. Assuming the ICC Court rules adversely to Company B, what are Company B’s options? (Please consult ICC Rules Articles 11 and 13.)
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