LEO, CHRISTSON DAVE M.

ADR – 2A
MARIANO, JR., MARIO V. WRITTEN REPORT May 4, 2017

RENDITION OF AWARDS and TERMINATION PROCEEDINGS

WHAT ARE THE RULES APPLICABLE TO SUBSTANCE OF DISPUTE?

 The arbitral tribunal must decide the dispute in accordance with such
rules of law as are chosen by the parties as applicable to the
substance of the dispute.

 Any designation of the law or legal system of a given State or Territory

must be construed, unless otherwise expressed, as directly referring to
the substantive law of that State or Territory and not to its conflict of
laws rules.

 Failing any designation by the parties, the arbitral tribunal must apply
the law determined by the conflict of laws rules which it considers
applicable.

 The arbitral tribunal must decide the dispute, if the parties so agree, in
accordance with such other considerations as are agreed to by the
parties.

 In all cases, the arbitral tribunal must decide in accordance with the
terms of the contract and must take into account the usages of the
trade applicable to the transaction.

 The terms rules of law did not extend to general legal principles or law
developed in arbitration awards.

 The parties may not empower a third party, such as an arbitral

institution, to choose applicable law.

 Ex aequo et bono and amiable compositeur recognizing that in some

legal system, the first is used but not the second and in others.

 This will also minimize the risk of its use without the knowledge and
approval of the parties and it requires express authorization from the
parties to use it.
29. Decision-making by panel of arbitrators

 In arbitral proceedings with more than one arbitrator, any decision of the
arbitral tribunal must be made, unless otherwise agreed by the parties, by
a majority of all its members.

 However, questions of procedure may be decided by a presiding

arbitrator, if so authorized by the parties or all members of the arbitral
tribunal.

30. Settlement

 If, during arbitral proceedings, the parties settle the dispute, the arbitral
tribunal must terminate the proceedings and, if requested by the parties
and not objected to by the arbitral tribunal, record the settlement in the
form of an arbitral award on agreed terms.

 An award on agreed terms is to be made in accordance

with section 31 and must state that it is an award.

 Such an award has the same status and effect as any other award on the
merits of the case.

 The agreement of the parties may be express or implied.

 If the arbitral tribunal may refuse to accede to the request, it may also
refuse to record a settlement but the model law does not provide for the
exercise of the arbitral tribunal's discretion.

The arbitral tribunal may refuse to record a settlement, among others

a) If the stipulated settlement is incompatible with the public order of
the legal system applicable to the arbitration,
b) In case of suspected fraud, or illicit or utterly unfair settlement terms,
or
c) Which may be violation of law, such as anti-trust laws or income tax
law or conspiracy between the parties
d) May be in conflict with binding laws or public policy, including
fundamental notions of fairness and justice.
Article 31. Forms and Contents of Award

(1) The award shall be made in writing and shall be signed by the arbitrator or
arbitrators. In arbitral proceedings with more than one arbitrator, the
signatures of the majority of all members of the arbitral tribunal shall
suffice, provided that the reason for any omitted signature is stated.
(2) The award shall state the reasons upon which it is based, unless the parties
have agreed that no reasons are to be given or the award is an award on
agreed terms under article 30.
(3) The award shall state its date and place of arbitration as determined in
accordance with article 20 (1). The award shall be deemed to have been
made at that place.
(4) After the award is made, a copy signed by the arbitrators in accordance
with paragraph (1) of this article shall be delivered to each party.

This article provides a minimal formal requirements of a valid and enforceable

award. The award must be in writing in the interest of certainty. It must be signed
by the arbitrators. However, the possibility was recognized that, before award,
an arbitrator may not agree with the award, and accordingly refuse to sign it. In
some jurisdiction like China, when a tribunal is truncated because a tribunal
member may have died or have become de jure or de facto incapacitated,
after hearing and while deliberating upon an award, it still can make and
release a valid award. The Supreme People’s Court of China denied recognition
and enforcement to an award of a truncated tribunal. The ICC arbitration Rules
specifically addressed this problem under article 12 (2) and (5).

One issue discussed by the UNCITRAL Working Group was whether a dissenting
arbitrator may issue a dissenting opinion. The UNCITRAL Secretariat’s opinion is
that the issue may be determined on the basis of Model Law article 19 giving
the parties the freedom to decide the rules of procedure to be followed by the
arbitral tribunal, or, in default thereof, in the manner considers it appropriate.

As regards to model law Article 31 (2), it was noted that many arbitration laws
required reasoned awards. On the other hand, it was pointed out that
unreasoned award was less subject to challenge. Under 1976 UNCITRAL
Arbitration Rules, the parties may agree that no reasons need to be given for the
award. In some civil law jurisdictions, the trend is towards reasoned award.

Article 31(3) of the Model Law acknowledged that the award would have to
state the place where it is made, although it was also recognized that the
arbitrators specially in international arbitration who reside in different places will
find it inconvenient to meet in the country whose law was intended to govern
for the sole purpose of performing the mechanical task of affixing their
signatures on the award. The arbitration proceedings may be conducted in one
or more places other than the agreed place of arbitration. Thus, the place or
places where the award was signed are actually irrelevant. The place of
arbitration though is legally significant. It identifies the procedural rules
governing the arbitration which applied for certain purposes when an
application is made to set aside the award or for its recognition and
enforcement. With regard to the date of the award, it said to be important
when new evidence is discovered or the arbitrators failed to meet the deadline
in rendering the award.

Article 31(4) of the Model Law is consistent with the 1958 New York Convention
on the Recognition and Enforcement of Foreign Arbitral Awards, the Model law
does not require registration of the award or its deposit with any government or
registry. The New York Convention abolished the requirement of double
exequatur under which an arbitral award required confirmation in the State
where it was made and in the State where enforcement is sought. However, the
New York Convention is not intended to replace any law of the place where it is
made and where enforcement is sought.

An additional issue considered by the Working Group was the date when the
award shall be considered binding. The secretariat suggested that it should be
the date of the award. The Soviet Union addressed this issue and proposed the
following dates:

(a) The date of the award; or

(b) The date the award is received either by the party against whom it is
invoked or the last party to receive notification; or
(c) Three months from the date of the award was received by the parties.
Proposals had:

(a) The merit of certainty

(b) When determined on the date the party had received notification, was
thought fairer (although there was a recognition of proving mailing and
receipt under Model Law Article 3)
(c) Would ensure that the award is final in the State where it was made
before it is to be enforced.

No decision was made on this issue and it was left to the courts eventually to
decide it bearing in mind that the award is binding and enforceable upon a
party three months after his receipt to the award.
The Commission Report on these matters:

The Commission considered the following three variants of possible rule: an

arbitral award becomes binding on the parties as of

(a) The date on which the award is made

(b) The date on which the award is delivered to the parties; or
(c) The date on which the period of time for making an application for setting
the award expires.

There was a little agreement as to the date on which the award should become
binding. As regards the date on which one or both parties were notified of the
award, the practical difficulties of establishing that the date in various factual
situations arising in arbitration were described. Moreover, it was difficult to
conceive of an award becoming binding on the parties on different dates
simply because they were notified of it on different dates.
After discussion the commission did not adopt the proposal.
Article 33. Correction and Interpretation of Award; Additional Award

(a) Correction of Award

Errors in the award that may be corrected are those made in
computation, clerical or typographical errors, and those of similar nature.
The correction envisioned is one that does not require a review of the
evidence. These errors may be corrected by the arbitral tribunal motu
proprio or upon the request of at least one party. Questions relating to the
sufficiency of evidence or weight of evidence, or its admissibility or to the
fact that evidence on particular issue has been overlooked or ignored are
not ground for correction. The errors must be evident such that adverse
party may not legitimately and in good faith oppose the request.

(b) Interpretation of Award

It is discretionary upon the upon the arbitral tribunal to grant the request.
A party making a request must also be aware of the financial
consequences of granting the request if the arbitrator is paid on the basis
of time devoted to the arbitration. The arbitrator may refuse to grant the
request unless an appropriate payment is made. The other party may or
may not agree to the request. If the other party agrees, the additional
cost may be shared by both; but if the other party did not agree, the
arbitral tribunal may on that ground deny the request.

(c) Additional Award

 Where there is an agreed definition of the issues submitted to arbitration
and summary of their claims and counterclaims, as when the terms or
similar document is drawn up and signed by the parties and the arbitral
tribunal, the incidence of an omitted award is minimized.

WHEN CAN THERE BE TERMINATION ON THE CONDUCT OF ARBITRAL PROCEEDING?

The conduct of the arbitral proceeding can be terminated when:

a. there is final award

b. by an order of the arbitral tribunal in accordance with the following:

1. The claimant withdraws his claim, unless the respondent objects

thereto and the arbitral tribunal recognizes a legitimate interest
on his part in obtaining a final settlement of the dispute;
2. The parties agree on the termination of the proceedings;
3. The arbitral tribunal finds that the continuation of the
proceedings has for any other reason become unnecessary or
impossible.

(1) The mandate of the arbitral tribunal terminates with the termination of the
arbitral proceedings, subject to the provisions of article 34(4).

According to the Secretariat, this article serves three important purpose:

(1) It is said to provide guidance in the last, but not necessarily unimportant,
phase of the proceeding;
(2) It regulates the consequential termination of the arbitral tribunals
mandate and the exception thereto provided in paragraph 3.
(3) To fix the exact time when the proceedings terminate which may be
relevant to the purpose of determining when the running of the period of
prescription, interrupted by the commencement of arbitration
proceedings, will commence to run again, or when the parties decide to
institute court proceedings.

Termination of proceedings; two ways

(1) By final award of the arbitral tribunal;

(2) By an order of the tribunal terminating the proceedings.
Different types of awards: Final, Interim, Interlocutory or Partial. It is only when the
arbitral tribunal makes a final determination of all claims submitted to arbitration
that the mandate of arbitral tribunal terminates.

The withdrawal of a claim by the claimant does not ipso facto terminate the
mandate of arbitral tribunal. The respondent is entitled to object to such
withdrawal of claim if he has a legitimate interest in obtaining a final settlement
of the dispute.

The arbitral tribunal may order the termination of the arbitration proceedings if it
finds the continuation of the proceedings become unnecessary or impossible.
Impossibility of continuing the proceedings may be inferred in a situation
contemplated under the Model Law Article 25 (a). When the parties settle their
dispute under Model Law Article 30 (1), continuation of the proceedings is
unnecessary.

The IRR of the ADR act provides that notwithstanding the termination of the
arbitral proceedings, “the arbitral tribunal may, for special reasons, reserve in the
special award or order, a hearing to quantify costs and determine which party
shall bear the costs or division thereof as may be determined to be equitable.