MEMORANDUM FOR CLAIMANT

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UNIVERSIDAD NACIONAL DE ASUNCIÓN • MEMORANDUM FOR CLAIMANT 19. The aforementioned appointment procedure was initiated and duly complied with as CLAIMANT and RESPONDENT respectively appointed Ms. Arbitrator 1 [R. for A. ¶28] and Prof. Arbitrator 2 [S. of D. ¶23] as co-arbitrators. Afterwards, both co-arbitrators appointed Mr. Malcolm Y to serve as chairman of the arbitral tribunal [Case file p. 39]. 20. Any other procedural issue, e.g. confirmation or replacement of an arbitrator, falls within the scope of the CAM Rules. B. The CAM Rules regulate the arbitration procedure in all issues not specifically stipulated by the parties 21. The parties stipulated in the arbitration agreement that ‗[a]ll disputes arising out of or related to the contract shall be settled by arbitration under the [CAM Rules]‘ [Cl. Ex. 4]. RESPONDENT‘s assertion that the arbitral tribunal was not constituted in accordance with the arbitration agreement altogether ignores the application of the procedural rules expressly incorporated by the parties in the arbitration agreement. The CAM Rules are directly applicable on the grounds that the rules incorporated by reference in the arbitration agreement constitute the parties‘ real intention [i.]; the CAM Rules have a gap-filling function with respect to aspects of the procedure that the parties have not explicitly settled [ii.]; and finally, the parties did not expressly exclude the application of any of the provisions of the CAM Rules [iii.]. i. The rules incorporated by reference in the arbitration agreement constitute the parties’ real intent 22. The rules incorporated by reference in the arbitration agreement constitute the parties‘ real intent in accordance with the principle of party autonomy, one of the mainstays of arbitration [Art. 19 (1) MAL]. Moreover, the MAL recognises the freedom of the parties to determine, by reference to an existing set of arbitration rules or by an ad hoc agreement, the procedure to be followed [MAL Explanatory Notes ¶23; Born p. 1380; Lew/Mitellis/Kröll p. 237]. In consonance with this principle, the parties incorporated the CAM Rules, and by doing so, they have included procedural mechanisms and substantive standards governing the selection, challenge and replacement of arbitrators [Art. 1(1) CAM Rules; Born p. 1364; Fouchard/Gaillard/Goldman ¶359]. Hence, the CAM Rules are applicable as a simple consequence of the intent of the parties [Fouchard/Gaillard/Goldman ¶753]. 23. In cases such as his, the courts ensure that the intent of the parties is observed and would normally not set aside an award if the constitution of the arbitral tribunal complies with the parties‘ agreement and with the chosen arbitration rules included therein [Art. I(2) NY Convention; Art. 34(2) MAL; Fouchard/Gaillard/Goldman ¶781, OLG Köln 22/12/1999]. 6
UNIVERSIDAD NACIONAL DE ASUNCIÓN • MEMORANDUM FOR CLAIMANT ii. The CAM rules have a gap-filling function with respect to aspects of the procedure that parties have not explicitly settled 24. Institutional rules incorporated to the arbitration agreement have a gap-filling function complementing the will of the parties with respect to several aspects of the proceedings that parties have not explicitly governed [Bühring-Uhle/Kirchhoff/Scherer p. 35; Giovannini/Renna p. 304; Nigi v. Inter Eltra Kommerz]. In this case, the parties‘ approach in the arbitration clause was minimal, providing solely for the appointment of arbitrators while remaining silent in regard to all other aspects of the procedure [Cl. Ex. 4]. By incorporating the CAM Rules, not only did the parties give themselves a set of procedural rules, at the same time, they empowered the CAM to administer the arbitration with significant leeway [Pascale/Götz/Graf p. 3]. 25. Therefore, the CAM Rules shall apply, filling the loopholes and issues the parties have not explicitly settled, such as the procedure for confirmation and replacement of arbitrators [St. John Sutton/Gill/Gearing ¶3-052]. iii. The parties did not expressly exclude the application of any of the provision of the CAM Rules 26. In interpreting the arbitration clause one must consider the consequences the parties‘ could have reasonably and legitimately envisaged at the time the arbitration agreement was concluded [Fouchard/Gaillard/Goldman ¶477]. The question that may arise is whether the parties did actually exclude further procedures provided for the CAM Rules, implying a derogatory connotation within the arbitration clause. 27. In any case, the parties must either expressly or impliedly derogate the CAM Rules by clearly stating their intent to do so in the arbitration agreement; or, at the very least, including a provision which directly contradicts the procedure laid down in said institutional rules [Fouchard/Gaillard/Goldman ¶782; Gas del Estado v. Ecofisa; Indian Oil Corp. v. Raja Transport]. None of these derogatory mechanisms were provided for by the parties. 28. Considering that the parties did not exclude the application of any of the provision of the CAM Rules in the arbitration agreement, an objective interpretation of the parties‘ intent stands for the application of the proceedings as provided by the CAM. C. The Rules of the Chamber of Arbitration of Milan were strictly complied with 29. The procedure provided by the CAM Rules was strictly complied with, since the Arbitral Council did not confirm Mr. Y‘s appointment pursuant to Art. 18(4) CAM Rules, [i.] the same appointing-authority re-affirmed the appointment of Mr. Malcolm Y and consequently, 7
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MEMORANDUM FOR CLAIMANT

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