2007 (Issue 1 of 2) - The Canadian Chamber of Commerce in the ...

20
ARBITRATION IN THE CZECH REPUBLIC AND ABROAD
story published in Czech
A Business Weekly in the spring
of 2005 highlighted an incident
involving a young Czech woman
Differences between ad hoc and institutional Fees and expectations depend on clients’
arbitration:
needs. Preliminary matters may be
Parties will often agree on arbitration done for a fixed fee - typically CAD 300under
the rules of one of the institutions 500, depending on the work that is needed.
representing herself as a private that provide facilities for arbitral settlement Arbitrators and mediators usually charge
arbitrator. In her position, Sandra of international trade disputes. The an hourly fee for the time required. Fees for
Svobodová allegedly launched advantage of institutional arbitration over AAOC (Arbitration Associates of Canada)
arbitrations without consent of ad hoc arbitration consists in administrative associates range from CAD 125 to 200 per
the parties involved. The public assistance with respect to the conduct to be hour depending on the time, nature and
became aware of the affair when followed (rules contain a code of procedure). complexity of the issues to be resolved.
three companies filed criminal In any case, the arbitration clause in a Travel and GST (Goods and Services Tax)
charges. The central issue around contract should always specify the seat and are paid in addition. Costs are usually split
Svobodová is whether her actions
violate Czech law, a question that has yet
to be answered formally. (So far it has been
the language of the arbitration.
between the parties and payable as the
In the Czech Republic there is presently work proceeds. Billed time includes any
domestic and international arbitration necessary preparation, such as reviewing
found that Sandra Svobodová is in fact a ad hoc, which is not a permanent (or documents, travel, meeting sessions, and
young Slovak man with a dark criminal past institutional) ruling court in accordance preparation of agreements or decisions that
who underwent special treatment in order to with Act No. 216/1994 Coll.
arise from the mediation or arbitration.
change his identity.)
What would then be the law governing the Who can become an arbitrator?
To understand the background of proceedings?
T
No definitive statement can be made
alternative dispute resolution (or out of he applicable law is sometimes referred concerning the credentials or
court settlements), it is important to know to as the curial law, and may be different experience levels of arbitrators, although
what is currently used in practice.
from the law governing the contract. If the some jurisdictions have chosen to establish
Arbitration exists under national and parties have adopted an international code standards for arbitrators in certain fields.
international law, and arbitration of arbitration, such as the UNCITRAL Several independent organizations offer
can be carried out between private (United Nations Commission on training programmes for arbitrators. In the
parties, between states, or between states International Trade Law) Arbitration Rules United States, the American Arbitration
and private parties. Arbitration aims to or the Rules of Arbitration of the ICC Association has proper credentials.
achieve resolution of a dispute through (International Chamber of Commerce), Generally speaking, the credibility of an
the appointment (by parties adopting an there will usually be no need to go beyond arbitrator rests upon reputation, level of
adversarial stance) of a private “judge” who this and to resort to national law.
experience in arbitrating particular issues,
will decide on the matters in dispute. Thus, How is the award enforced?
or expertise/experience in a particular field.
arbitration is closer to court proceedings The Convention on the Recognition Arbitrators are generally not required to be
than ADR.
and Enforcement of Foreign Arbitral members of the legal profession. However,
Alternative dispute resolution (ADR) Awards (New York, 1958) provides for the to ensure effective arbitration and to increase
aims to achieve an amicable settlement enforcement of foreign arbitral awards the general credibility of the arbitral process,
of a dispute using the services of a third in the territory of the contracting parties. arbitrators will sometimes sit as a panel,
party, such as a mediator or a conciliator. Similar provisions are contained in the usually consisting of three arbitrators. The
What are the differences between the two?
earlier Convention on the Execution of trio consists of (1) an expert in the legal
For many reasons, not least in terms of
Foreign Arbitral Awards (Geneva, 1927). area within which the dispute falls (such
as contract law in the case of a dispute over
cost, ADR is preferable to arbitration. How does arbitration work outside the Czech
the terms and conditions of a contract), (2)
ADR, however, will only succeed if the Republic?
parties are well disposed towards it.
I
an expert in the industry within which the
n the UK there is a statute law contained
dispute falls (such as the building industry
What are the advantages of arbitration over
in the 1996 Arbitration Act relating to
in the case of a dispute between a landlord
litigation?
arbitration that applies to England, Wales
and his or her general contractor), and (3) an
First, parties in an international contract
and Northern Ireland. It consolidates the
experienced arbitrator.
can entrust the resolution of their
existing legislation, introduces various
The ADR Institute of Canada provides
dispute to judges of their own choice. This
reforms and some codification. When
professional training and sets guidelines.
is an advantage particularly for parties
arbitration occurs under U.S. law, either
There is a two-part correspondence
who reside in different countries and have
party to the arbitration may appeal
programme designed for those with post-
different cultural and language backgrounds.
against the arbitrator’s decision at a court.
secondary education. Lawyers admitted to
Second, a binding decision, rather than
However, the court will generally not
the bar in Canada do not have to complete the
meticulous legal accuracy, is the preference
change the arbitrator’s findings of fact
first part of the course. In fact, a law degree
of many parties involved in trade. An
but will decide only whether the arbitrator
or training in arbitration is not essential. The
arbitration award is final, while a judgment
was guilty of malfeasance, or whether the
twelve lessons comprised in the programme
of a court may be appealed and re-appealed
arbitrator exceeded the limits of his or her
cover concepts and procedures of contract
so that considerable time lapses before the
authority in the arbitral award or whether
and tort law, arbitration acts and procedures,
matter has been finally determined. Third,
the award conflicts with positive law. In the
evidence and court control of arbitration.
arbitration is confidential; its hearings (if
case of arbitration under international law,
there are any) are not open and the pleadings
a right of appeal does not exist in general, Why is the issue of Svobodová’s arbitration
are not available for public perusal. In
although one may be provided for by the practice so important?
S sensitive matters this is an advantage.
arbitration agreement, provided that there ince May 2004, the Czech Republic has
is a court capable of hearing the appeal. become a full EU member state. We are
Who is eligible for arbitration?
I
Alternative dispute resolution (ADR) now undergoing integration, ensuring that
deally, in the sector of international trade, is well established in Canada. The our national laws comply with EU laws,
the exporter should be aware of this Québec National International Commercial norms and regulations. There has to be an
option prior to entering into a contract of Arbitration Centre (QNICAC) that was amendment in the national law clarifying
sale. When the choice is made from the formed in 1986 currently operates as the arbitration in general and the position of
proceedings available for dispute resolution, Canadian Commercial Arbitration Centre arbitrators per se. Hopefully the Czech
the parties should insist that a provision (also known as the CCAC or the Centre). Republic will, in time, have its own fully
clearly specifying the chosen procedure is CCAC is a private, non-profit organization. functioning and reputable court that will
inserted into the contract. It is a common Its Head Office is located in Québec City deal with sensitive cases. This will expedite
experience that agreement at this point is and services are also provided from its progress of the proceedings.
easier than when a dispute has already arisen. Montreal Office.
By Mgr. Anna Shalina, A.G.
GoCanada 1/2007 September 2006 – January 2007