Analysis & Comments on Arbital Awards.

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Analysis & Comments on Arbital Awards

Introduction:

In the following presentation I will present a selection of arbitral awards issued by the French Arbitral Tribunal and comment on the clauses of these awards by showing similar legal clauses in the Kuwaiti Arbitral Tribunal, in both normal arbitration and judicial arbitration. In addition, I will demonstrate the differences between the two laws and how the respective legislators dealt with the issues regarding the arbitral proceedings.  This will clarify for the reader the positive and negative aspects in dealing with the arbitration process in all areas.  Thereafter, I will make suggestions to cover some of the deficits or failures in the two laws.

This type of comparison study reveals the positive and negative aspects of the Kuwaiti arbitration law as a research subject. As mentioned previously, the presentation of the positive and negative aspects of a theory and assuring its occurrence and success in practical application in the legal field, cannot be achieved successfully until other, similar theories are presented which show the disparate and different aspects between them and the effects of one on the other in achieving efficiency in the arbitration system. An individual cannot ascertain whether he has in practice made significant and tangible progress until he is challenged by another party on the competence of his work.  Such challenge and confrontation between two parties in the competence field leads to positive and negative aspects being revealed which are then assessed by both parties.  Ideas and facts can then be defined and a successful form created based on study and in-depth review. Any comparison studies and researches are worthwhile to achieve the aims desired in legislation in all the fields and will also contribute to developing legislation which will perform its desired function.

First: Appealing the Amiable Compositeur

The Versailles Appeal Court, on 16/10/1997, decided the following:

“According to the provision of Article 1482 of the New Civil Procedure Code, the arbitral award issued by an arbitrator in his capacity as Amiable Compositor may not be appealed unless the parties expressly waived their right of appeal in the arbitration agreement, as the provision of the preceding Article 1482 is relevant to public policy, which aims to protect the common expressed (joint volition) desire of the parties of contract”. 

Comment

The provisions of Article 1482 of French Civil Procedure Code allowed appeal against the Amiable Compositeur award, with the agreement of the parties.  Originally this was not allowed.

Kuwaiti law does not in general allow appeal against the arbitrator’s award unless the parties have provided otherwise in the arbitration agreement – submission agreement or arbitration clause – Article 186 of Kuwaiti Procedure Code.

However, appeal is not allowed in cases where the arbitrator has been empowered to rule as amiable compositeur, even if the parties had agreed to the contrary.  This restriction is provided in Article 186 paragraph 2, where it states: “… Nevertheless, the award shall not be appealable unless the arbitrator is authorized to compromise or conciliate, or if he is an arbitrator of Appeal, or the value of relevant action does not exceed KD 500 or the award is rendered by the panel provided for under Article (177), as the awards of the Arbitration Panel, according to the Code No. 11/1995, are not appealable except in cassation.”

Second: Constitution of Arbitration Penal

French Cassation Court decided that ”the President of the court who refuses to approve the constitution of the arbitral tribunal under the pretence that there is real or actual difficulty, is exceeding his authority and consequently his judgment shall be subject to rules prescribed for appeal of judgments.”

Comment:

The French law gives the competent court wide jurisdiction and authority with regard to the constitution of the Arbitration Panel, as it has the right to intervene in the constitution of the Arbitration Panel and control its formation.

In Kuwaiti law, the president of the court of jurisdiction originally competent to in hear the dispute has no right to constitute the arbitral tribunal, as his jurisdictions are limited exclusively, and the litigant parties have recourse to the competent court to bring an action to appoint an arbitrator.  This was provided for in Article 175 of the Kuwaiti Civil and Commercial Procedure Code.

The French law gives more powers to the judge, such as the right to intervene in the constitution of Arbitration Panel. The Kuwaiti judge, according to Kuwaiti law, cannot intervene in the constitution of the Arbitration Panel except in those cases which have been assigned to him exclusively, and upon the request of a litigant party who wishes the usual procedures for prosecution.

Third: The Scope of Arbitration Mission

“The arbitrator is obligated to the requests stipulated by the litigant parties in their agreement. Therefore, the Court of Appeal is deemed to have violated the provisions of Articles 15, 141, 1484 of the new French Procedure Code when it refused the plea made by the opposing party (respondent) represented in that the arbitrator exceeded the scope of the mission entrusted to him…”.

Comment:

In Kuwaiti law, binding the arbitration tasks to the request stipulated by litigant parties in their agreement is considered a prevailing procedure priniciple in contractual and judicial arbitration. Negligence and non- observance of this principle may lead to the judgment being set aside. This principle also applies before the Kuwaiti judiciary and it is one of the grounds for revising the arbitral award in the Civil and Commercial Procedure Code.

Article 148, paragraph D, of the Civil and Commercial Procedure Code states that “the litigant parties may request revision of the final decision in the following cases: If the decision includes something not requested by the litigant parties or includes more than they requested.”

The Court of Appeal (Paris Court of Appeal in its decision issued on 5/7/1994) refused the plea to set aside the arbitration award, which was brought by the opposing party (respondent), based on the fact that the arbitrator’s mission was to resolve the amount of damages caused by the variation in exchange price as a result of delayed payment by the debtor. However, the arbitrator dealt with another issue, not with the amount of damages but with the damage itself created by a delay in delivery of the commodity, and this was considered outside the scope of the mission entrusted to the arbitrator.

The Court of Cassation (Cour de Cassation) vacated the award issued by the Court of Appeal because it was contrary  to the provisions of Articles 15, 14, 1484 of the New French Procedure Code.

Fourth: The Principle of Due Process

French Cour de Cassation held the view that the appellate award was contrary to the provision of Article 1484/4 and Article 16 of the New French Procedure Code.  It refused recourse to setting aside the arbitration award on the basis that the award was not established on the telephone call carried out between one arbitrator and one of the litigant parties, but on the legal elements that were objects of argument between the litigant parties. The arbitral tribunal had to inform the litigant parties about the arguments carried out later by one of the members of the arbitral tribunal, because the information obtained through that call was relevant to a public matter. The parties had to be informed according to due process.


Comment:

Due process (literally, the principle of an adversarial process) is considered one of the fundamental principles in both normal and judicial arbitration in Kuwait, as well before Kuwaiti courts. Despite this, the legislator did not expressly provide the preceding principle, but instead considered a general principle for procedures, and this may lead to setting aside the award by original action. The principle requires that the information obtained by the court of arbitration from the presented matter should be, and must be, put forth to the litigant parties if the court desires to impose its award on them.

Due process is not provided in Kuwaiti law but it is one of the fundamental principles which the court has to respect. This is in contrast to the case in France as it is provided for in French legislation and in the French Civil and Commercial Procedure Code. Therefore, it is recommended the application of this principle be provided for in Kuwaiti legislation, as it is in France.

The Arbitration Panel is obligated to respect the principle of due process between the litigant parties in any aspect so as to secure their right to any facts which affect both parties’ situations.

The Arbitration Panel shall enable the litigant party to be informed about  the opposing party’s submissions of applications, pleas, defence and any other legal means that support the parties’ status in the case, by providing such information without delay, thus giving the litigant parties  a reasonable time limit in which to submit their pleas.

It is not allowed during the deliberation stage to hear one litigant party without the appearance of the other litigant party, which was the situation in the telephone call in the present case. Such a telephone call has to be disclosed to both parties according to the principle of due process. The telephone call was considered a part of the case body even though the French Court de Cassation decided that the award was not established on the basis of that call but on legal elements that were objects of argument between the litigant parties.

The telephone call was held between one of the arbitrators and one of the litigant parties, while the other party remained ignorant of the call. The latter party had the right to be contacted at the same time to ensure the implementation of the principle of due process. To summarise, the Arbitration Panel is not allowed to accept documentation or notes from one litigant party without disclosing such information to the other litigant party, and this is inferred in Article 113 of the Procedures Law, which contains the preceding details regarding the principle of due process.

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Betto’s Comment:

From a comment on this award made by the French jurist, Betto, the following can be concluded:

  1. This award is related to the principle of an adversarial process or principle of contradiction (Le Principle de la Contradiction). Such principle shall be available and it existed before common courts or arbitral tribunals according to the provision of the Article 16, 1484/4 of the New French Procedure Code. Negligence in the application of this principle by the judge or arbitrator will lead to the award being set aside.
  2. The merits of the award are related to the ...

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