Submission of written comments in international commercial arbitration

By Eugene Weng, Wintell & Co
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With the extensive push for the Belt and Road Initiative, Chinese enterprises, investors and the countries and regions along the Belt and Road will engage in closer and more frequent economic, trade and investment activities, greatly increasing the chance of trade and commercial disputes arising in their wake. Consequently, Chinese parties may increasingly be involved in international commercial arbitration cases.

In recent years, with the weight placed on international commercial arbitration by the state and its broad promotion by various sectors of the public, the major issues in commercial arbitration have gradually become better known by domestic commercial entities. However, from what the author has seen in practice, Chinese parties remain in many ways unaccustomed to international arbitration proceedings. This column analyzes matters that require attention when submitting written comments in international commercial arbitration.

翁冠星-EUGENE-WENG-瀛泰律师事务所律师-Associate,-Wintell-&-Co
EUGENE WENG
Associate,
Wintell & Co

THE FORMAT

Generally speaking, international commercial arbitration institutions do not have strict requirements in respect of the format of the documents submitted by parties. However, many institutions do specify the information that must be provided in key procedural documents.

For example, mainstream arbitration institutions specify in their arbitration rules which information must be provided in the documents submitted to institute arbitration (International Chamber of Commerce (ICC) Arbitration Rules Article 4, Hong Kong International Arbitration Centre (HKIAC) Administrated Arbitration Rules Article 4, and Shanghai International Arbitration Centre (SHIAC) Free Trade Zone Rules Article 11).

Some format requirements will be specified in the laws of the seat of arbitration, for example section 5 of the Civil Procedure Law of Poland. Such format requirements need to be strictly complied with so as to avoid the omission of mandatory information in legal documents, and thereby affecting the smooth institution of the arbitration proceedings.

When required to submit a written document, many parties will attempt to locate an existing template. This is without doubt an effective way of proceeding, but, even if it is a document similar to one previously used by a professional lawyer, it often cannot apply directly in another case, and blind use of such a template can result in procedural errors. For example, when beginning international arbitration in a domestic arbitration institution, a party will usually submit a request for arbitration, accompanied by evidence, to the arbitration institution to start such proceedings. After the party has paid the fees, the arbitration institution will issue a notice of acceptance or notice of arbitration.

However, if arbitration is started under the auspices of the HKIAC, the document submitted to it by a party is known as a “notice of arbitration” (HKIAC Rules Article 4.3, also see American Arbitration Association (AAA) and Singapore International Arbitration Centre (SIAC); but, pursuant to the HKIAC rules, there is no mandatory requirement to submit all of the substantive exhibits at the same time as the notice of arbitration. Furthermore, in common law countries, there may also be instances where the application of ad hoc arbitration to resolve disputes may exist, in which case the format and the topics of the documents may be even more varied.

Although templates may reduce the quantity of work involved, the blind and mechanical use of them could harm the rights and interests of the party. Accordingly, seeking advice from, and engaging, an expert in the field is the recommended thing for a party to do.

DISTINCTION OF PROCEDURE AND SUBSTANCE

One common fault of Chinese parties that has always been difficult for international arbitrators to accept is the mixing up of opinions on the procedure with the substantive claims. This issue is particularly evident when management or the responsible employee of a party directly participates in the arbitration. The author stresses again that complex procedural matters are of utmost importance in international arbitration. In the majority of international commercial arbitration cases, important procedural matters will be announced in the procedural meetings.

In ad hoc arbitration, the first procedural meeting is an important marker of the arbitration proceedings moving to the next stage, and even in institutional arbitrations, where the secretariat is involved in management, all the mainstream arbitration institutions provide that the first procedural meeting is to be held promptly after the formation of the arbitration tribunal (SIAC rules article 19, SCC rules article23, ICC rules article 24, etc.).

Before it convenes a procedural meeting, the tribunal will inform the parties in advance of the matters that are to be discussed at the meeting and give the parties an opportunity to comment on those matters. Clearly, if the tribunal requests that the parties express their views on the timetable for the proceedings and translation of the witnesses, and one of the parties goes on and on about how the other party has committed a bad-faith breach of contract in its written response, this is amateurish and offensive.

Mixing up procedural matters and substantive matters in one document results in muddled logic and disorganized thinking. Accordingly, it is important to strictly adhere to the topic in the submitted written documents and separate procedural matters from substantive arguments.

CITING OF PRECEDENTS

The structure of the substantive written comments is essentially dependent on the different circumstances of each case. However, perhaps due to the legal culture, the written comments of many Chinese parties tend towards a shallow description or simple analysis of precedents, for example, “pursuant to the verdict of Judge so-and-so in case such-and-such, being fully aware that a policy is to be revised but failing to disclose the same may be deemed bad faith at the time of entering into a contract”. Such a description is unlikely to be viewed favourably by the tribunal.

The most effective way is to cite existing precedents as a basis, while taking into account the circumstances of the case in question, to conduct a very detailed demonstration and analysis, followed finally by putting forward the conclusion that is wished to be presented to the tribunal. Theoretically, the written documentation concerning the substance of the case submitted to the tribunal should be a scholarly paper with a tight structure, clear logic and complete footnotes, not a document consisting of a mere two or three pages.

Given the space constraints, the author cannot give a complete treatment of such topics as the procedure in international commercial arbitration, but if there are any inadequacies or weaknesses, the author will address them in a future column.

Eugene Weng is an associate in the Shanghai office of Wintell & Co. He can be contacted on +86 21 6854 4599 or by email at eugene.weng@wintell.cn