Cautio judicatum solvi /Le Règlement CCI ne prévoit pas de cautio judicatum solvi / Article 9 du Règlement CCI : la provision pour frais d'arbitrage est supportée à parts égales par les parties / En l'absence de paiement de leur part de la provision par les défendeurs, imposer une cautio judicatum solvi au demandeur serait inéquitable / Absence de circonstances spéciales justifiant d'imposer la constitution d'une cautio judicatum solvi / Loi applicable à la procédure /Article 11 du Règlement CCI / Application à certaines questions des lois de police du lieu du siège de l'arbitrage / Sentence partielle / Pouvoir discrétionnaire du tribunal arbitral d'accepter ou de refuser de rendre une sentence partielle à la demande d'une partie /Article 11 et 26 du Règlement CCI / Le refus par l'arbitre de rendre une sentence partielle ne contrevient pas au droit d'être entendu ni aux droits de la défense

'No security on costs

Defendants [from Yugoslavia] are of the opinion that they are entitled to demand from Claimant a security for the procedural costs. Defendant 1 moved the Arbitral Tribunal to order Claimant to deposit US$ 600,000, as security for procedural costs. Defendant 2 made the same motion. The Arbitral Tribunal dismissed the motions in Order No. 5 of May 16, 1993, and announced that the reasons will be given in the arbitral award. The decision is based on the following considerations:

Defendant 1 gave as the main reason for its motion that Claimant is an off-shore-company in Panama without any assets, except US$ 10,000, distributed as the share capital. Panama is the Claimant's state of domicile, and Yugoslavia has no bilateral convention of securing the costs of arbitral procedures. If Defendant were to win the case, Art. 26 of the ICC Rules could not be implemented and respected.

These considerations are not conclusive. The ICC Rules do not provide for security on costs. However, Art. 9 of the ICC Rules states that in principle, Claimant and Defendant pay the advance on costs fixed by the ICC Court of Arbitration in equal shares, therefore the Defendant has to pay half of the advance on costs. The provision expresses the mutual obligations of the parties who contractually agreed to submit to arbitration (Craig, Park, Paulsson, International Chamber of Commerce Arbitration, 1990, ICC Publishing, p. 245).

In the present case, the Defendants preferred not to follow the ICC Court of Arbitration's invitation to pay their share in the advance on costs. Therefore the burden to pay the total advance on costs or to provide a bank-guarantee fell to Claimant alone, who had no other way of continuing the arbitration procedure, pursuant to Art. 9 (3) of the ICC Rules. Under these circumstances, the Arbitral Tribunal holds that Claimant would be unduly burdened if requested to provide an additional security to the Defendants for their costs.

Nor do the special circumstances of the case, in the opinion of the Arbitral Tribunal, justify to grant [sic] the Defendant's motion. The Defendants knew that Claimant is a corporation domiciled in Panama on conclusion of the Agreement. The Defendants were also aware, or should have been, that there is no bilateral convention securing the costs of arbitral procedures between Yugoslavia and Panama. Defendant 1 is a large state-owned Yugoslav enterprise, whose director is appointed directly by the President of the Republic of Yugoslavia. Defendant 2 is a bank who is also owned by the Yugoslav State. The Defendants signed the Agreement voluntarily, thereby accepting the arbitration clause in Art. 9 of the Agreement. If the Defendants were concerned about the enforceability of potential claims against the Claimant awarded to them in an arbitration procedure, it was up to them to ascertain this possibility before signing the Agreement. Having omitted this examination on conclusion of the Agreement, this determines their position in the ensuing arbitration procedure.

Procedural rules to be applied by Arbitral Tribunal

In the Terms of Reference, Defendant 1 objected to Arbitral Tribunal's applying procedural rules, including the mandatory provisions of the Swiss Statute on International Private Law- LDIP-, in addition to the ICC Rules. However, already at the hearing of . . ., Defendant 1 invoked several provisions of LDIP, and continued to do so in the course of the procedure. The Arbitral Tribunal therefore decided, in accordance with Art. 11 of the ICC Rules, that on specific issues it must apply mandatory rules of the LDIP.

The dispute is an international arbitration procedure within the meaning of Art. 176 sect. 1 LDIP. In sect. 9 of the Agreement, the parties expressly agreed on Geneva as the venue of arbitration. It is generally agreed that the provisions of chapter 12 of LDIP are to be applied to arbitration procedures which meet the definitions of Art. 176 LDIP (Lalive/Poudret/ Reymond, Le droit de l'arbitrage, Lausanne 1989, Art. 176, ann. 12; Walter/Bosch/Brönniman, Internationale Schiedsgerichtsbarkeit in der Schweiz, Bern 1991, p. 35 et seq.).

. . .

No violation of Defendants' right to be heard or right of defence

During the arbitration procedure Defendant 1 made several motions on mixed procedural and substantive issues, among others, that:

The Arbitral Tribunal shall:

- preliminary decide that claims as in the Replica are not in the limits of the Terms of Reference and to reject them;

- to decide on the applicable law as a preliminary issue in order not to infringe Defendant's right to defence.

The Arbitral Tribunal reserved decision on these motions until the Final Award. Defendant 1 thought this infringed its right to be heard and right to defence. I.a., it argued that it was deprived of defence against the claims raised in the Replica because they were not decided on by the Arbitral Tribunal.

In the Arbitral Tribunal's opinion, [Defendant 1's] right to be heard or right of defence has not been infringed during the arbitral procedure.

Under the Terms of Reference, the Parties have no right to demand an interim or preliminary award. Therefore, the Arbitral Tribunal's response to a Party's request for an interim or preliminary award is governed by Arts. 11 and 26 of the ICC Rules, which leave it to the sole discretion of the Arbitral Tribunal to grant or to reject such a request (Craig/Park/Paulsson, loc. cit., p. 323).

Any interim or preliminary award automatically tends to delay the procedure. It is therefore the exception rather than the rule (Reiner, loc. cit., p. 248 et seq.)

Therefore a Party's right to be heard or right to defence is not infringed if the Arbitral Tribunal refuses such a motion.

In the present case, the Arbitral Tribunal never left Defendant 1 in any doubt its motion would be rejected.

After the briefs were submitted, a hearing was scheduled for taking evidence and possibly for the Parties' Final Pleadings.

At the beginning of that session Defendant 1 reminded the Arbitral Tribunal to decide on its motion. The Arbitral Tribunal thereupon informed the Parties that it had discussed [Defendant 1's] motion on December 4, 1992, and would decide on it during or after the hearings. At the next hearing on May 16, 1993, the Arbitral Tribunal issued its Order No. 5. Under sect. 5, it fixed August 26 and 27, 1993 for the Final Pleadings. It was evident to Defendant 1 from the Order that the Arbitral Tribunal would not change its position as communicated. It therefore was or should have been aware that August 26 and 27, 1993 was the last opportunity to present to the Arbitral Tribunal any arguments supporting its opinion.

Defendant 1 has in fact used its defences extensively at the hearing of August 26/27, 1993, as documented by the nearly 200 pages of transcripts of the two days. . . .'