The procedural formation of arbitral panel.

What is the panel and how many arbitrators should be there?

As for Law on ICA it in its article 10 provides as follows. The parties are free to determine a number of arbitrators. If they failed to do so there should be three arbitrators (vrode by).

The parties may specify the number of arbitrators, but this nubmer should be nechyotniy. That's the regulation of other law on internal arbitration (treteyskie sudy).

Maritime Arbitration Comission - its rules allow to design 2 arbitrators. But it is ICA, not internal arbitration.

What other requirements to arbitrators? Whether all of them or only chairman should have a high legal education? In the Law on ICA and in the Law on domestic arbitration the regulation differs.

The Law on ICA there're only 2 requirements. The first - he/she should be competent. The second - he/she should be impartial. That's all. Nothing else is required.

In the Law on domestic arbitration those two requirements also exist. But there're specific requirements concerning legal education. The single arbitrator should have a high legal education. In the panel at least presiding arbitrator should have a high legal education.

How arbitrators should be invited to resolve the dispute?

This procedure of formation of arbitral panel is described in art.11 of the Model Law on ICA and our Law as well.

According to section 2 of art.11 the parties are free to agree on a procedure of appointing arbitrator(s). Section 3: failing such agreement each party appoints arbitrator. These 2 arbitrators appoint a presiding arbitrator, which will be the third one.

What if a party failed timely to appoint an arbitrator? Usually presidium of arbitration institute appoints arbitrators.

There's a possibility to challenge an arbitrator if there's a doubt that he/she is partial.

Now it's a time for us to look into proceedings in voluntary arbitration.

Proceedings.

If we compare procedural rules in state courts we'll certainly note that in state courts the proceedings are regulated by relevant codes (GPK and APK) in some detail. So that actually any step is regulated by these codes. Any person participated in the case is bound by these codes.

Actually state court in the course of proceedings shall apply procedural rules of its own country. A question arises: where any exception of this rule is permitted? Yes. Sudebnoe proruchenie (rogatory letter) by russian court to polish one (if it is provided by the treaty on legal assistance).

APK (art.256, section 3) regulates performance of rogatory letters.

GPK (art.407) states the same rule.

The example of this international treaty - Minsk Convention of 1993 - rogatory letter should be performed in accordance with the law of the state where the court performing this letter is located. Upon the request by the requesting institution executing institution may perform the letter in accordance with the rules of requesting institution if it doesn't contradict the rules of executing institution.

Example. Rogatory letter may contain a request to examine a witness or an expert. According to both our procedural codes in the very beginning of examination of these persons they should be warned by court on criminal responsibility for lie. In foreign countries (UK, US etc.) both witnesses and expert witnesses should take a sware to tell the truth, only the truth and nothing but truth. A violation of this promise is a crime.

Let's suppose that the foreign court in its rogatory letter will request our court to examine a witness under the oath. Is it possible? There's an international treaty (Convention on civil procedure of 1954 or Minsk Convention of 1993) which provides a possibility to apply foreign procedural rules. However, it provides that such application of such rules may result in a violation of public policy of the executing court's country. So the oath per se is not prohibited. But a witness or an expert is just an atheist. An atheist is generally allowed to refuse to take an oath. We cannot force him to take an oath. Forcing to take an oath may violate a public policy. If prof. Musin is a judge he would, fistly, warn a witness about criminal responsibility for false testimony and, secondly, to suggest to take an oath.

One more example. Affidavit is a statement of some specialist. Affidavit is popular in UK and US. But affidavit should be varified. By whom? Generally, by notary. In other case English court requested prof. Musin to prepare affidavit. He prepared and went to our russian notary. Our notary thought and denied to varify affidavit. Why? - prof. Musin asked? - 'Cause in our law affidavit does not exist - notary answered. Prof. Musin told him: I ask you just to varify my signature on the document, not the document itself. The notary eventually refused to do so. Eventually general counsel of UK varified the affidavit.

Our law on notarial activity does not regulate a varification of affidavit. But it allows to varify a signature. There's nothing inconsistent with our law to varify the affidavit.

As we can see our procedural laws regulating proceedings in state courts are rather strict.

Let's look the same angle to the procedural rules on ICA.

We should look for this purpose to art.19 of Model law (and our law as well). It reads: subject to the provisions of this law the parties are free to agree the procedural rules governing the proceedings. If parties failed to do so the tribunal chooses the relevant procedural rules (including the rules on the taking of evidence, and, in particular, the rules on admissibility, materiality, weight of evidence).

We have also a law on voluntary arbitration of Russia (treteyskie sudy). Art.19 of this law contains more details. First of all, this domestic law distinguishes 2 kinds of arbitral tribunals. First - permanent arbitration institution, and second - ad hoc arbitration. Section 1 of Art.19: permanent arbitration institution shall perform arbitral proceeding in accordance with rules of permanent forum unless the parties agreed on application of other rules of arbitral proceedings.

The law on domestic arbitration (art.7): unless the parties agreed otherwise, in case of submission the dispute to a permanent arbitration these rules should be deemed as a part of arbitration agreement.

As for ad hoc domestic arbitration section 2 of art.19 provides as follows. Arbitral proceedings are regulated generally by the rules agreed by the parties. However, as we already repeatedly mentioned, there're UNCITRAL Arbitration Rules specifically designated for international arbitration. Usually when the parties agreed to have an ad hoc arbitration they are also agreed to apply this UNCITRAL Rules of 2010. But this rules may also be amended by the parties.

So either by rules of permanent arbitration or by UNCITRAL Arbitration Rules or by the rules agreed by the parties the dispute should be resolved. A question arises. We've dealth with the procedural rules. And what about substantive law applicable in the case.

The parties are at liberty to agree the procedural rules. If there's no such agreement then the arbitrators may do so. For instance, if a problem arises to take some procedural step such as, let's suppose: some litigant requests the tribunal to receive an additional document. The question arises: how it should be dealt by the court. It depends on whether there is a single arbitrator or the panel of arbitrators.

If there's a panel of 3 arbitrators, the question arises: should they jointly to decide to perform such procedural action? In arbitration (especially in ICA) it creates a problem, because arbitrators may be located in different countries. The parties may agree that a presiding arbitrator may perform procedural action without a consent of other arbitrators.

The last problems is regarding the place of arbitration.

Ad hoc arbitration. The parties agreed the majority of rules be binding for arbitrators and failed to agree some rules on some aspects. In ad hoc arbitration we cannot apply some national rules if parties failed to agreed some rules. Section 2 of art.19 states that failing such agreement the arbitral tribunal may (subject to the provisions of the Law) conduct arbitration in such manner which it considers appropriate.

If in the course of arbitral proceedings one of arbitrators decides to withdraw to be an arbitrator. Is it possible? Why not? Arbitral proceedings are voluntary both for the litigants and for the arbitrators. There may be several reasons due to which arbitrator should be incapable to act as an arbitrator. For example, death, long-term decease or change of his/her mind to be an arbitrator. That's why usually two arbitrators should be appointed: principle arbitrator and his/her substitution.

Now let's deal with the issue of place of arbitration. Let's compare the situation in state courts and in arbitration.

In state courts the place of the proceedings is the place where the court is located. Again it is a general rule. Because for some reason or other a state court may decide to act in other place. The simplest example. For instance, there's a very high dispute considering the real estate. There's no prohibition for the court to come to the place where the building is located and to assess the quality of this building. Or if there're a lot of people demanding to visit a hearing, but a court room is small. Then the court may decide to take hearings in the theatre, for example. So there are some exceptions where state courts resolve the dispute in the place other than where they are located.

In APK there're some specific rules according to which a court hearing may be performed with the use of videoconference. A judge should be located in his/her permanent located. But litigants/witnesses/etc. may be located in other place.

Now the same issue with regard to voluntary arbitration should be considered. Of course, if it's a permanent arbitration usually hearings take place where this institution is located. But it is not prohibited for arbitrators to perform hearings in some other place. Let's look into the rules which are contained in UNCITRAL Model law (art.20 - place of arbitration): the parties are free to agree the place of arbitration. Failing such agreement place of arbitration should be determined by the tribunal considering convinience of the parties. It was section 1. Section 2 states: unless otherwise agreed by the parties the tribunal may sit where it considers appropriate. Again both the parties and the arbitrators have enough discretion to establish the place of arbitration.

And now if we look into the rules of the ICAC of CCI (para.22): the place is Moscow. The parties may agree upon conducting of hearings in other place. A question immediately arises. If a state court decides for some reason or other to perform hearings in other place than its permanent location. In relation to voluntary arbitration all additional expences arising out of agreement of the parties on the place of arbitration should be compensated by the parties of the dispute.

Arbitral panel in case of necessity may take hearings outside Moscow (section 3 of para.22).

Art.230 (section 3): application on setting aside the award shall be filed in the state arbitration court of the subject of Russian Federation in whose territory the award was issued. So the place of arbitration is significant.