UNCITRAL ARBITRATION RULES 3 September 2021

UNCITRAL ARBITRATION RULES

1. What is the arbitration?

Parties might determine the alternative solutions on the dispute between themselves. Arbitration is one of those alternative solutions. In that case, parties firmly solve their dispute between themselves by the arbitrators in the arbitration instead of local courts.

Despite the fact that arbitration is a private and discretionary way, the parties want the decisions to be taken within the framework of arbitration to be enforceable and binding such as the decisions of the courts. At this point, the advantages of the arbitration compared to court proceedings are saving of time and money as a result of shorter litigation, impartiality, confidentiality, procedural flexibility and availability of expert arbitrators.

2. What are the arbitration rules?

In International arbitration, parties may resort to institutional arbitration or ad-hoc arbitration. Thus, third way is the UNCITRAL Arbitration Rules which established with the aim of finding a midway between institutional arbitration and ad-hoc arbitration.

The UNCITRAL Arbitration Rules were adopted in 1976 by the General Assembly of the United Nations after comprehensive deliberations and consultations with various international organizations and arbitration experts conducted under the guidance of the UNCITRAL (United Nations Commission on International Trade Law). UNCITRAL Arbitration Rules were revised in 2010 to reflect the evolution of international arbitration since 1976. The latest addition on the UNCITRAL Arbitration Rules was amended in 2013 in order to add the United Nations Rules on Transparency in Treaty- based Investor- State Arbitration.

3. What are the differences of UNCITRAL Arbitration Rules from the Institutional Arbitration and Ad-Hoc Arbitration?

The most important feature that distinguishes institutional arbitration from Ad-Hoc arbitration is whether the arbitration process managed by the institution or not. In institutional arbitration, parties choose the institution that manages the procedure by their mutual will. However, in the Ad-Hoc arbitration there is no such institution to manage the procedure. In case of any problem during the arbitral procedure, the parties will apply to the court seeking for decision on the relevant issue so it will prolong the process. At this point, the UNCITRAL Arbitration Rules combine the good parts of both the ınstitutional arbitration and Ad-Hoc arbitration. One of the most fundamental features of the UNCITRAL Arbitration Rules is that UNCITRAL is not an arbitral institution. UNCITRAL does not govern the arbitral process anyway. Thus, it gives parties a sense of freedom, as revealed by ad-hoc arbitration. In short, the UNCITRAL Arbitration Rules set out standard arbitral rules for parties before the dispute arises.

Parties may designate an institution for the management of the arbitral process according to the UNCITRAL Arbitration Rules. In fact, parties should specify an authority to decide on the appointment of arbitrators and challenge of the arbitrators. If the appointing authority has not been determined by the parties, each party may request the Secretary General of the Permanent Court of Arbitration in The Hague to designate an appointing authority. In this case, appointing authority may solve the problem arises during the arbitral proceedings just as the institutional arbitration and save time and money.

4. What is the difference between UNCITRAL Arbitration Rules and UNCITRAL Model Law

One should not confuse UNCITRAL Model Law with UNCITRAL Arbitration Rules. UNCITRAL Model Law was prepared by the UNCITRAL on 1985 to uniform the commercial arbitration and improve the international trade. UNCITRAL Model Law which revised at 2006 is devoid of any legal power. Some of the members of the United Nations adopted it and used as a model during the legislation process.

As a result, the UNCITRAL Arbitration Rules are widely used as they combine the good parts of Institutional Arbitration and Ad Hoc Arbitration. It introduces standard arbitration rules which any arbitration institution has monopoly on that.