Abu Dhabi Global Market (ADGM), 24 October 2019

Welcome address

Prof. Dr. Mohamed S. Abdel Wahab (Founding Partner and Head of International Arbitration, Zulficar & Partners, Cairo) launched the ICC Institute's Advanced Training session by welcoming attendees and introducing the topics and the session leaders: Hassan Arab (Regional Head of Dispute Resolution, Al Tamimi & Co, Dubai), Sana Belaid (Senior Counsel for the Middle-East and Africa, Cisco, Dubai; Member of the ICC International Court of Arbitration), Soraya Corm-Bakhos (Counsel, International Commercial Arbitration, DWF (Middle East), Dubai), Nadine Debbas Achkar (Attorney and Arbitrator, Beirut), Dania Fahs (Deputy Director, ICC Middle East and North Africa, Abu Dhabi), Sami Houerbi (Director for Eastern Mediterranean, Middle East & Africa, ICC International Court of Arbitration, Abu Dhabi/Tunisia), Jonathan Sutcliffe (Partner, K&L Gates LLP, Dubai), and Asli Yilmaz (Counsel, International Court of Arbitration, ICC International Court of Arbitration, Paris).

Drafting an arbitral award: Which drafting style?

Following the welcome address, Prof. Dr. Abdel Wahab led the first session focused on award drafting styles and minimum requirements for drafting enforceable arbitral awards. He explained how legal systems and traditions influence drafting techniques. He then advised the participants on ways in which to improve the quality of awards. In particular, he warned against excessive copying and pasting, emphasizing the fact that there is no one style or standard that fits all. He referred to the ICC Award Checklist,1 the CIArb Practice Guidelines on Drafting Arbitral Awards,2 and the IBA Arb40 Subcommittee Toolkit on Writing Awards3 for practical advice and sets of tools from which to draw guidance and inspiration for award drafting. Finally, Prof. Abdel Wahab emphasised the importance of properly reflecting upon the reasons behind arbitral decisions while striking the right balance in determining how much reasoning should be included in the award for it to be fully convincing and enforceable.

Drafting an arbitral award: Spotlight on specific issues

The next session focused on specific issues and particular sections of awards which tend to present difficulties and challenges.

Ms Soraya Corm-Bakhos started the discussion by addressing issues of jurisdiction and applicable law. She explained that the enforceability of arbitral awards is primarily dependent on the tribunal's jurisdiction over the parties' dispute. Consequently:

  1. Arbitrators are advised always to record the basis upon which they find that they have jurisdiction, particularly by including a full quotation of the arbitration agreement in the award itself.
  2. While arbitrators are generally empowered to continue the proceedings even if a respondent refuses to participate, arbitrators should be particularly attentive to issues of jurisdiction where the respondent fails to participate in the proceedings and/or where a party raises a jurisdictional challenge.
  3. In order to minimize risks of future challenge, arbitrators are advised to consider jurisdictional issues even if none are raised by the parties and to include a section in the award in this respect.

Ms Corm-Bakhos then gave a thorough presentation on jurisdictional challenges, including the grounds for jurisdictional challenges (matters of formal validity, determining who the parties to the arbitration agreement are, defective agreements, scope of the agreement and matters of admissibility) as well as the distinction between jurisdiction and similar challenges, such as issues of admissibility of claims. Ms Corm-Bakhos discussed bifurcation as well as the form in which a jurisdictional decision should be issued (either in a procedural order, only if the tribunal retains jurisdiction, or in the form of an award, particularly if the tribunal does not retain jurisdiction, in which case the tribunal is also advised to issue a determination on costs).

Ms Corm-Bakhos then moved on to the issue of applicable laws, most of which may have an impact on the arbitration (such as the law governing the arbitration agreement, the lex arbitri, the law governing the merits, or the law of the place of enforcement). Identifying or determining the applicable law(s) in the award, particularly if disputed by the parties, as well as determining the governing law in the absence of an express choice of law by the parties are key. She expanded upon the difficulties in identifying whether an issue is governed by the procedural law or the substantive law (for example regarding interest, statutes of limitation, estoppel and set-off).

Ms Debbas Achkar followed with a comprehensive presentation on damages. With regard to applicable law, she explained that arbitration laws and institutional rules tend not to address matters of available remedies. With regard to damages, several laws may have to be considered when determining this issue (the law governing the merits, the law at the seat, and potentially the law of the place of enforcement). As a matter of general principles, Ms Debbas Achkar explained that both civil law and common law jurisdictions tend to compensate the claimant for losses suffered as a result of the other party's conduct. She also tackled the differences between the two systems in assessing the amount of damages, the requirement for mitigation, the burden and the standard of proof in relation to damages.

Subsequently, Ms Debbas Achkar addressed issues relating to specific types of damages. She explained that exclusion and limitation of liability clauses are generally valid but that their scope may be restricted (particularly in case of fraud, wilful misconduct and gross negligence). She also discussed the issue of validity of liquidated damages clauses in civil law and common law jurisdictions generally, and in the UAE specifically where liquidated damages are in principle valid but subject to the judge's power to adjust the agreed amount to make it commensurate to the actual loss suffered. She also touched upon lost profits, moral damages and punitive damages. Ms Debbas Achkar concluded by giving practical tips in addressing issues of damages, such as:

  • early identification of damages issues,
  • considering bifurcation,
  • the role of experts in assessing damages,
  • available valuation methodologies and items to include in the calculation of damages (such as the exact dates, currencies, and exchange rates).

She emphasised the importance of clear draft orders on damages, which should include the net amount due where parties request set off and separate orders where they do not.

Last but not least, Mr Sutcliffe discussed auxiliary remedies, i.e. interest and costs.

On interest, Mr Sutcliffe explained the purpose of awarding interest, and considered the challenges in doing so (i.e. the different approaches in legal systems and the limited guidance provided to arbitrators). He then discussed the tribunal's power to award interest and the various laws to refer to. Mr Sutcliffe also insisted on the importance of requesting parties to make submissions and provide evidence early in the process (including submissions on whether interest should be awarded, applicable rates, base sum and relevant period). Such considerations are reflected in the award, which should include, inter alia:

  • the basis empowering the tribunal to render the decision on interest,
  • the parties’ positions,
  • the reasons for determinations of rates,
  • other factors affecting the amount owed,
  • the period during which interest accrues,
  • the applicable interest rate(s), and whether simple or compound interest may be awarded.

On costs, Mr Sutcliffe also discussed general principles including the tribunal's power to award costs and where such power may be found. He addressed the various types of recoverable costs, i.e. tribunal/institutional costs, legal costs, party-appointed expert(s) or witnesses' costs. He then addressed the various factors to be taken into account when allocating costs, such as the outcome of the proceedings in terms of the relative success of the parties or the conduct of the parties.4 He wrapped his session up with a discussion on the timing and content of the decision on costs.

Introduction to scrutiny of the award by the ICC Court

In the afternoon session, Ms Yilmaz shared her expertise on the ICC Court scrutiny process, the different levels of review and the assistance and tools which the Secretariat provides to assist tribunals in preparing their draft awards. Ms Yilmaz explained that these tools are designed to ensure that tribunals draft effective awards, while respecting the tribunal's discretionary decisions.

Working groups: Draft award review and scrutiny by the ICC Secretariat and Court

All ICC draft awards ‘undergo a three-step review process starting with the Counsel of the team in charge of the arbitration that has followed the proceedings since the inception of the arbitration, followed by review by the Secretary General, the Deputy Secretary General or the Managing Counsel, before being submitted for the Court’s scrutiny’.5

In a first workshop led by Ms Yilmaz, Ms Belaid and Mr Houerbi, the participants were given the opportunity to review a draft award and draft terms of reference and provide their comments as if they were acting as Counsel of the Secretariat of the ICC Court.

The ICC Institute Advanced Training ended with a second workshop led by Prof. Dr. Abdel Wahab, Ms Yilmaz and Ms Belaid, in which participants observed a mock ICC court session that showcased a draft award being discussed amongst the speakers acting as ICC Court members.