La Revue Squire

Arbitration with an absentee respondent : an example under UNCITRAL rules


Rédigé par Benoit LE BARS le 31 Mars 2009


Nowadays, an arbitral decision must often be made where one of the parties to an arbitration clause refuses to participate in the arbitration process. Approaches may vary from non-response or express refusal to participate, to putting forward ambitious arguments as to whether a contracting party validly subsists and whether, therefore, it is capable of duly contracting. However, the arbitrator must still make an award, and, to that end, essential procedural principles, respected.

To avoid delaying tactics, and so that the rights of the party allegedly in default are protected, that respondent must be given the opportunity to submit its observations throughout the process. This requirement, imposed by the public procedure order, means that the respondent must be regularly invited to participate in the arbitration process. It also means that the discovery process, as agreed between the parties or under the arbitration rules (per the arbitration clause in question), must be respected.

On the 5th March 2008 the French Court of Cassation (a civil court) confirmed this rule (Republic of Congo v. Qwinzi Companies, case n°06-21.684). Finding against the arbitrator, the first Civil Chamber held that it was insufficient to summon the parties merely in accordance with the provisions of the arbitration clause: articles 14 and 16 and 1460 paragraph 2 of the Civil Procedure Code require that the arbitrator should also have observed article 2 of UNCITRAL rules. This, in turn, provides that notice is only considered to have been duly served if delivered to the addressee, in person, at his habitual residence, business establishment or postal address. The arbitrator had not, but should have, verified the facts as to the circumstances of delivery.

The arbitrator must have regard to these practicalities throughout the process. When signing his terms of reference, the arbitrator must bear in mind such procedural arrangements (e.g. as to rules for the due service of notice, time limits, proof of delivery, etc) as are provided under the applicable arbitration rules or specific procedural decisions. He must be principally mindful of the facts as to the circumstances of delivery and any procedural documents relating thereto. He must also set out, in his award, the procedures he applied to ensure that rights of the respondent were protected. This is fundamental if he is to avoid censure by the Courts.





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