When can an arbitration take place?

When considering the arbitral tribunal, its composition and its powers, it is worth reminding ourselves that arbitration proceedings may only take place when:

1. the parties have agreed to submit their dispute to arbitration
2. the arbitration clause(s) or submission agreement is in writing
3. there is, in fact, a “dispute”, and
4. the dispute is one that is capable of being settled by arbitration under the relevant national law (in other words, it is arbitrable under the law governing the arbitration agreement and the law of the seat, the lex arbitri, as the case may be).

Once a dispute arises, either party can submit a request for arbitration; however, the mode of the notice will depend on the rules that the parties have agreed and whether it is to be an institutional or ad hoc arbitration.

If the dispute is to be heard by an arbitral institution, then the method of notice will be determined by the rules agreed between the parties. If the parties agree that the rules will be the institutional rules, then the notice will be in line with the requirements set out in those rules, along with the commencement phase. Thus, if, for instance, the parties have agreed to the UNCITRAL Rules or International Chamber of Commerce Rules of Arbitration (ICC Arbitration Rules), then the notice will be in line with those rules.

By way of example, A and B have a contract to supply machinery, and the arbitration clause/arbitration agreement has nominated Singapore as the seat of arbitration under the Arbitration Rules of the Singapore International Arbitration Centre, SIAC Rules, 6th edition, 1 August 2016 (SIAC Rules). A dispute arises and B wishes to commence arbitration. B will need to lodge a notice in line with r 3 of the SIAC Rules, which requires a party to file a Notice of Arbitration with the registrar (r 3.1), along with the documents set out in r 3.1(a)–(k). B must also send a copy of the notice to A (the respondent) at the same time, inform the registrar that the notice has been sent, and specify the mode of service employed and the date of service.

If A and B have entered multiple contracts, then under r 6, B may file a notice in respect of each agreement, or file a single notice for all the arbitration agreements, but will need to identify each contract and arbitration agreement invoked and the criteria under r 8.1 is met.

Still on that same scenario, under r 3.3, arbitration proceedings are deemed to commence when the registrar receives the notice and the registrar is satisfied that it meets all the requirements under rr 3.1 and 6.1(b) if the notice relates to multiple contracts. SIAC then notifies the parties of the commencement of the arbitration.

Now let us say A and B had chosen HKIAC as the arbitral institution, but opted for the UNCITRAL Rules or ICC Arbitration Rules.

Notice, under the UNCITRAL Rules, B will need to notify A and provide A with all the information set out in art 3.3(a)–(g). Under art 3.2, arbitral proceedings will be deemed to commence on the date that A (the respondent) receives the notice of arbitration, which may be by letter or any other mode of communication as long as the transmission of the communication can be demonstrated. If the notice is sent electronically, a notice of arbitration is only deemed to have been received on the day when it reaches the addressee’s electronic address (art 2.5). The respondent, A, must, within 30 days of the receipt of the notice, inform B of the response to the notice, including any matters set out in art 4.2.

Notice, under ICC Arbitration Rules, under art 4, B will need to submit the Request for Arbitration to the secretariat at any of the offices specified in the internal rules. The secretariat shall notify the claimant and respondent of the receipt of the request and the date of such receipt. Arbitration proceedings are deemed to have commenced when the request is received by the secretariat. The respondent, A, must, within 30 days of the receipt of the notice, submit an answer to the secretariat including any counterclaim (art 5). (Note: a new set of ICC Arbitration Rules comes into force in January 2021, but art 4 remains.)

The commencement of arbitration proceedings is a key stage and, where such time limits are missed or overlooked, courts are exceedingly reluctant to extend the time limits. Thus, in Fimbank plc v KCH Shipping Co Ltd [2020] EWHC 1765 (Comm), the High Court of England and Wales refused an application by Fimbank for an extension of the time limit to commence arbitration proceedings against KCH Shipping Co Ltd (KCH) under s 12 of the United Kingdom Arbitration Act 1996.

As an example of a legislative provision from the law of a major arbitral seat, s 12 of that Act allows a court to make an order to extend any agreed time to commence arbitral proceedings. Section 12(3) states that:

The court shall make an order [to extend time] only if satisfied-

a. that the circumstances are such as were outside the reasonable contemplation of the parties when they agreed to the provision in question, and that it would be just to extend time, or

b. that the conduct of one party makes it unjust to hold the other party to the strict terms of the provision in question.

The court, in paras 77 and 78 of the judgment, set out the requirements to meet the s12(3) threshold:

(i) circumstances outside reasonable contemplation and (ii) injustice. The effect of the authorities is that, to qualify under section 12(3)(a), the relevant circumstances must both have been (a) outside the reasonable contemplation of the parties when the contract was entered into; and (b) such that, if the parties had contemplated them, they would also have contemplated that the time bar might not apply.