Executive Summary
This is an excerpt of "the fiddler on the court-an experience of filing a case
to ICC
international court of arbitration."
Outline of the writer's business and the
problem:
1. We are importers of machine tools from U.S.A.,
Switzerland and Sweden,
established in 1954 at Ginza, Tokyo with a
capital of 10 million yen and 10
employees.
2 With an order of a Japanese customer for machines of 8
million US dollars,
with whom we had an import contract to the
Japanese market. When the
contract was violated by the said firm, we had to
bring a case of damage
claims to ICC international court of arbitration
in 1991, according to the
contract clause of jurisdiction.
3. International courts of arbitration are said born from a
necessity of
facilitating international business contract
where a justice may be
achieved, irrespective of the nationalities of
the contract parties, especially
in a swarmed area of nations such as in Europe.
There is many a court
of arbitration in the world such as ICC Paris.
International arbitration
court of London, American Arbitration
Association, Hong Kong Arbitration
Court etc. Those are civil organizations, not
courts of any sovereign state.
Maybe the naming "court" invites the assumption.
4. Then, what is the reason why a civil organization has
rights of adjudication?
The writer's understandings are these:
1) When the parties sign an agreement of
settling a dispute legally by
arbitration, they shall result in waiving their respective rights of suing to
any state
court which is regulated in most of the nations in the world such as Japan,
France,
Sweden etc.
2) Additionally, in security for the above,
a double enforcement of award
is designed to avoid-by 1958 NY treaty of the United Nations in the following
effect::
The court of the treaty members of UNS shall
honor the award of
arbitration subject to a certain condition.
The adjudication right is generated from
the
agreement of the both parties,
on binding terms, to the legal
settlement of disputes by arbitration.
This looks similar to a game game of Roulette where
participants put their
stakes on table.
Attention! Once contracted with a jurisdictional clause of international
arbitration, you shall have no choice other than go there.
5 Back to our own case, the contract, in the respect of
jurisdictional clause,
had been prepared by the manufacturer as a printed form as follows:
1) By arbitration at ICC international court of arbitration.
2) The law is that of vendor, namely that of the
manufacturer.
3) The language and the tribunal place either are not
specified.
4) ICC appointed a German lawyer to the post of arbitrator
according to
an impartiality principle
nationality-wise for a case between Swedish
and Japanese. His office is located
in Munich, which became the place
of tribunal accordingly.
5) For the language of tribunal, arbitrator selected the
English as
employed in the said contract, which
is normal and usual, though the
choice is au up to his competence.
The languages for ICC court are the
English and the French.
6) Search for an international lawyer
In Japan, we tried hard to acquire
one vainly in 1991 throughout whole
one year, especially the one with an
experience of ICC arbitration case.
None of them were candid enough to
tell us of a fact that they had no
experience .
It is suggested that you may have
rendezvous with only arbitration-
experienced-lawyers to shortlist more
than one and not tell how you
have reached them.
On ,contract, you had better avoid
such a thing as to let him carry your
wallet.
Today in 1999, through Internet,
editors of law book, legal journalist
etc., you may encounter with the
qualified persons.
When the contract validity came close
to expiry, we had to file the case
to ICC court without a lawyer anyhow
and asked the Court to
recommend one. for us.
ICC referred us several law firms,
one of which was found emphasized
with a double circle. Naturally we
chose the one, who was a member of
bar associations both in Paris and
Stockholm with office in Paris. He is
a Swedish and a former secretary
general of ICC, the fact of which,
much later,
produced an effect of double edged blade against us , esp.
when we had problems with ICC administration, as he
wanted to
defend his own interest profession-wise around at ICC
court.
He was retained as consultant, not counsel. He was
accepted as he
desired, nevertheless, to be one of the official
mailing addresses of the
tribunal proceedings.
He had an agreement with us that he might check all the
drafts prior to
submission ahd incoming documents as well.
His charges in Paris:
It was US$300 dollars by hour. Contingents are strictly
prohibited in
Paris bar. A combination system is also available as an
informal
practice, says a lawyer there.
6 So called the credibility of court.
When the credibility of the court is thought about, people evaluate fairly
right,
though very wild, on such as: U.S. court? The Japanese? In Africa and Latin-
America? In England? Court of people? Court-martial?
ICC international arbitration court?
Its picture likely looks fine to the
common people in the world, regardless of its substance. People usually take it
for
something like International Red Cross Association or international legal court
in
Hague- someplace of high regard, opened and universal. People undo prudence
here.
ICC system is designed to detour a problematic ,factor of nationality on the
contract
of . international business, which appears ideal to businessmen without the
knowledge particular to the system and the substance of the court. In many a
floppy
disk on the market, there is printed ICC arbitration court for jurisdictional
clause.
People undo prudence here. They ought to know the substance.
7. The system and the substance of the
ICC court of arbitration
CONFIDENTIALITY
1) They are operated on basis of the ICC-
arbitration-rules and the
inside rules: The former is printed and open, the accounting for those practices
is
confidential, nevertheless.
The latter is not disclosed and confidential totally.
2) ICC consists of 6 units:
One unit handles about 100 cases a year and is operated by the respective
secretaries in charge: for instance,
One secretary- jurist., Venezuelan male of middle 30s with languages of
Spanish,
French, English etc.
One deputy secretary- jurist. French female in middle 20s with languages of
French,
Spanish, English etc.
One typist- Dutch, English, French etc.
The awarded per year are reportedly 400 to 450 cases in total.
3) Arbitrator is to be selected by ICC out
of the neutral country between
those of the parties.
4) He is lawyer generally by profession and
sometimes university
professor, who is hired as occasion demands. There is said a tendency that the
same
persons are repeatedly employed to form a kind of club of ex-arbitrator.
5) Tribunal proceedings:
It is by a method of document distribution. All of the papers among the parties
and
arbitrators as well as ICC secretary in charge are faxed to all the other
parties at
the same time.. A hearing wm be held very seldom, only when necessary, at
arbitrator's office, which is the place of tribunal.
One of the popular fallacies with ICC court is that it relies mainly on common
sense
for award, not on legal expertise, which is available exceptionally when both
parties
agree to it.
6) Particulars and Contradictions
The original idea ---, prompt but fairly good award regardless of legalism,
---is no
longer , applicable for modern, international disputes of complexity and multi-
million dollars. It has to proceed just like a regular court. When a legal
controversy on award arose, ICC court could say to people, " It can not be
helped. It
is arbitration ". The original idea remains prevailing in a negative way. There
exist
methodological contradictions. It is not cleared either whether criminalities
contained, e.g. in 'bankruptcy are to count as misdeed for adjudication or to be
just
dismissed as a case.
7) Time-limit for award
is regulated within 6 months subject to condition, the idea of which is
described in
the previous section. Our case took a full 6 years. The arbitrator had been too
occupied with his own profession of lawyer-ship to come for ICC jobs, where he
could
control the deadline himself, entailing an enormous delay and improvised jobs.
What is worse, the bureaucratic
property of ICC court and Mr. consultant's stance
favoring ICC resulted in failure of restraining the arbitrator. Toward the final
stage,
as happened disclosed, those of 75% are awarded in 2 to 3 years, while 15% are
over
3 years.
8) Cost of arbitration depends on dispute
amount and number of hired
arbitrators: For example, US$ 4 million dollars with one arbitrator costs US
$90,000-, and US $ 40 million with 3 arbitrators will cost US $ half a million
dollars.
9) Mono instance trial-namely no appeal
court.
10) Scrutiny of award drafts: administration vs,
jurisdiction.
a)- There is no appeal court and the arbitrator in charge is free to decide all
by
himself, which makes people afraid that he could go wild.
Therefore, there is a preventing system in this way. The arbitrator is regulated
not
to issue an award by himself, required to submit award drafts to ICC court,
namely
its general plenary session for the scrutiny of them, the job of which is of
administrative nature, observing jurisdiction by principle. When and if a
discrepancy between them were not straightened in the field of jurisdiction. ICC
would dismiss him for solution by utilizing the employment contract.
b)- Nevertheless, whether and how far substantially this job of scrutiny is
executed
is beyond confirmation, shielded by ICC rule of confidentiality. As far as the
award
contents are checked, there is no sign of a scrutiny job.
c)- Prior to award, the writer and his consultant, former secretary general
visited
and demanded the then ICC secretary general to perform the scrutiny without
fail.
Despite his promise, it resulted in finding no traces of them.
d)- Mr. consultant says, " Today, there are too many cases with ICC. They
are too
complicated and too big in amount. It is far beyond its capacity to scrutinize
the
drafts". It may be his excuse for failure. It may be a truth-telling.
e)- This is a theoretical possibility of risks:-
Under all the circumstances as above, especially in a case of huge amount,
arbitrator could be arbitrary as much as he desires far ,beyond limits, where he
is
protected by the rule of confidentiality and mono-instance-trial system, when
anything negative were deliberated to pop up only in the award itself. It is an
accomplishment of a perfect "eat and run".
Businessmen! The writer is happy to see that you may give a thought to the
aforementioned PRIOR TO CONTRACT.
K. Watanabe