[Federal Register Volume 67, Number 39 (Wednesday, February 27, 2002)]
[Rules and Regulations]
[Pages 8860-8866]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2860]


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DEPARTMENT OF STATE

22 CFR Part 194

[Public Notice 3879]


Inter-American Convention on International Commercial Arbitration 
Rules of Procedure

ACTION: Final rule.

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SUMMARY: The Department of State has determined that the amended Rules 
of Procedure of the Inter-American Commercial Arbitration Commission 
(``IACAC'') should become effective in the United States pursuant to 
Chapter III of the Federal Arbitration Act. The amended Rules clarify 
and enhance the role of IACAC in the initiation and conduct of 
arbitration of international commercial disputes to which the 
International Convention on

[[Page 8861]]

Commercial Arbitration (''Convention'') applies. The amended Rules 
address such issues as notice procedures, the appointment of 
arbitrators, and the role of each National Section of IACAC. These 
Rules will come into force on April 1, 2002, for all states party to 
the convention.

EFFECTIVE DATE: April 1, 2002.

FOR FURTHER INFORMATION CONTACT: Jeffrey D. Kovar, Assistant Legal 
Adviser for Private International Law, 2430 E St., NW., South Bldg., 
Suite 357, Washington DC 20037-2851; email: [email protected]; tel: 
202-776-8420.

SUPPLEMENTARY INFORMATION:

Regulatory History

    IACAC has amended its Rules of Procedure applicable to the conduct 
of international commercial arbitration under the Convention. The 
amended Rules of Procedure will enter into force on April 1, 2002, for 
all states party to the Convention. The Convention entered into force 
for the United States in 1990 with the reservation that the United 
States is only bound by the Rules of Procedure in effect on July 1, 
1988, unless the Secretary of State determines by regulation that any 
subsequent modification or amendment will apply in the United States. 
Pursuant to section 306 of the Federal Arbitration Act, 9 U.S.C. Sec. 
306, the rulemaking procedures of Title 5 section 553 of the United 
States Code apply to any determination to effectuate such a 
modification or amendment within the United States.
    On February 19, 1999, the Department received a copy of the amended 
IACAC Rules of Procedure from the U.S. National Section of IACAC, the 
American Arbitration Association in New York. After clarifying some 
typographical and translation errors with IACAC, the Department 
published a notice of proposed rulemaking in the Federal Register on 
October 4, 1999 (64 FR 53632, Oct. 4, 1999), and requested public 
comments by November 18, 1999, on the text of the amendments. A small 
number of requests were received for copies of the amended Rules of 
Procedure and comments received. The comments were reviewed, discussed 
with the individuals submitting them, and provided to the American 
Arbitration Association with a request that IACAC consider making 
modifications to its amendments.
    On May 31, 2000, the Department was notified by the American 
Arbitration Association that IACAC had made minor changes to the 
amendments primarily related to ensuring the text is consistent with 
the Rules of Arbitration published by the United Nations Commission on 
International Trade Law (``UNCITRAL''), and that the English and 
Spanish language versions are in conformity. The revised amendments 
were formally adopted by IACAC on July 1, 2000. The amendments will 
uniformly enter into force for all states party to the Convention on 
April 1, 2002, and are incorporated in the text of the final rule 
published today.

IACAC Internal Administrative Procedures

    In addition to the Rules of Procedure published here governing the 
conduct of arbitration under the Convention, IACAC has amended its 
internal procedures for cases administered under its Rules. These 
internal procedures, which largely cover fees and internal practices 
related to the appointment of arbitrators, will not be published in the 
Code of Federal Regulations. Interested persons should contact the 
American Arbitration Association, the U.S. National Section of IACAC, 
at 335 Madison Ave. New York, NY 10017, with any queries about these 
internal procedures. The text of the internal procedures follows:

IACAC'S Internal Administrative Procedures for Cases Administered Under 
Its Rules

    The following procedures shall govern in those instances when an 
Arbitral Tribunal is constituted under the Rules of Procedure of the 
IACAC:

1. Lists of Arbitrators

    1.1  In order to faithfully and efficiently designate 
arbitrators, a list of candidates will be compiled and kept up to 
date by the Office of the Director General of the IACAC.
    1.2  At least every (2) years a detailed revision of the lists 
will be undertaken in order to guarantee that its members are 
individuals who possess the necessary knowledge and experience to 
fulfill their functions satisfactorily.
    1.3  To configure the list, each National Section will send to 
the Director General of the IACAC a number of candidates to be 
included, in a number no larger than (10). Each of the names will be 
accompanied by his/her respective detailed ``curriculum vitae'' and 
a complete description of his/her specific professional experience, 
as well as that which corresponds to the specific position for which 
the name is submitted. The Director General will conduct the 
verification and analysis of the requests. The report by the 
Director General will be presented to the Executive Committee, which 
will compose the lists, classifying its members by specialties.

2. Appointment of Arbitrators

    2.1  The appointment of arbitrators, that according to the rules 
of procedure should be made by the IACAC, will be conducted by the 
Arbitrator Nominating Committee, which will be permanent in nature 
and will be composed of the President, the Director General and (2) 
members of the Executive Committee, which the executive Committee 
will designate to that effect. If possible, said Committee will 
reach its decisions during a special meeting, or if a meeting were 
not possible, via telephone, telex, fax, or any other medium that 
allows the formation of the Committee's decision.
    2.2  Minutes of the designation will be taken by the Director, 
who will serve as the Committee's Secretary.

3. Responsibilities of the Arbitrators

    In the fulfillment of their position, Arbitrators designated by 
the IACAC as well as those designated by the parties who have agreed 
to submit themselves to the Rules of Procedure of the IACAC, are 
obligated to respect and follow, in the exercise of their position 
(as arbitrators), not only the referred rules and these rules, but 
to follow strictly the fee schedules established by the Commission.

4. Challenge of Arbitrators

    Whenever the IACAC is required to make a decision regarding the 
withdrawal of an arbitrator said decision shall be made by the 
Arbitrator Nominating Committee referred to above by item 2.

5. Secretarial Services

    Absent an agreement by the parties to the contrary, the 
Secretarial functions of the Tribunal will be conducted by the 
corresponding National Section at the seat of the Tribunal. It will 
be the National Section's responsibility to provide all the 
technical and logistical support required to fulfill its 
responsibilities. Among the costs and expenses of the Tribunal, 
remuneration of the corresponding secretarial services will be 
included in conformity with the applicable IACAC fee schedule in 
place at the time of the filing of the arbitration. In the event 
that there is no National Section of the IACAC and the parties had 
not agreed to anything on this regard, secretarial services will be 
provided according to whatever the Arbitral Tribunal decides.

6. Schedule of Fees

    6.1  Filing Fees
    A non-refundable filing fee in the amount of US$1,000 shall be 
paid at the filing of an arbitration; claimant must attach it to its 
request for arbitration referred to in Article 3 of these Rules. 
Said amount may be modified periodically by the IACAC.
    6.2  Administrative Fees of the IACAC
    The administrative fee shall be calculated by applying the 
indicated percentages to the successive parts of the amounts in 
controversy, and adding the amounts calculated in that way.

------------------------------------------------------------------------
                                                         Administrative
               Amount of claim (in US$)                   fee (in US$)
------------------------------------------------------------------------
Up to $50,000........................................             $2,000
From 50,001 to 100,000...............................              3.00%
From 100,001 to 500,000..............................              1.50%
From 500,001 to 1,000,000............................              1.00%
From 1,000,001 to 2,000,000..........................              0.50%

[[Page 8862]]

 
From 2,000,001 to 5,000,000..........................              0.20%
From 5,000,001 to 10,000,000.........................              0.10%
From 10,000,001 to 80,000,000........................              0.05%
Over 80,000,000......................................         $65,500.00
------------------------------------------------------------------------

    6.3  Arbitrator Fees
    Arbitrator fees for each arbitrator will be calculated by 
applying the indicated percentages to the successive parts of the 
amounts in controversy, and adding the amounts calculated in that 
way.

------------------------------------------------------------------------
                                                        Fees (in US$)
          Amount in controversy (in US$)           ---------------------
                                                     Minimum    Maximum
------------------------------------------------------------------------
Up to $50,000.....................................      2,000        15%
From 50,001 to 100,000............................      1.50%        10%
From 100,001 to 500,000...........................      0.80%         5%
From 500,001 to 1,000,000.........................      0.50%         3%
From 1,000,001 to 2,000,000.......................      0.30%      2.50%
From 2,000,001 to 5,000,000.......................      0.20%      0.80%
From 5,000,001 to 10,000,000......................      0.10%      0.50%
From 10,000,001 to 50,000,000.....................      0.05%      0.15%
From 50,000,001 to 100,000,000....................      0.02%      0.10%
Over 100,000,000..................................      0.01%      0.05%
------------------------------------------------------------------------

    6.4  Fees for Other Services
    6.4.1  Postponement or Cancellation Fees
    In the event that a hearing scheduled to take place before a 
single arbitrator Tribunal has to be postponed or cancelled for 
reasons attributable to one of the parties, a charge of US$150 will 
be assessed to that party causing the postponement or cancellation. 
The charge will be US$250 if the hearing was to take place before a 
Tribunal of three arbitrators.
    6.4.2  Suspension for Nonpayment
    If compensation due to the arbitrators or administrative fees 
have not been completely paid, the Tribunal or its Secretariat, in 
its place, will inform the parties of said circumstances so that the 
fees may be paid in full either by both parties or one of them. Once 
requested, if payment is not received, the Tribunal may order the 
suspension or termination of the arbitration at its discretion. If 
the arbitrators have not been designated, the IACAC may suspend the 
arbitration.
    6.4.3  Rental of Facilities
    The rental of hearing rooms will be available to the parties in 
the respective National Sections for a fee and subject to 
availability.

[End of IACAC Internal Administrative Procedures]

Regulatory Findings

Administrative Procedure Act

    The Department is publishing this rule as a final rule after it was 
published as a proposed rule on October 4, 1999 (see Supplementary 
Information).

Regulatory Flexibility Act

    The Department of State, in accordance with the Regulatory 
Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and, by 
approving it, certifies that this rule will not have a significant 
economic impact on a substantial number of small entities.

Unfunded Mandates Act of 1995

    This rule will not result in the expenditure by State, local and 
tribal governments, in the aggregate, or by the private sector, of $1 
million or more in any year and it will not significantly or uniquely 
affect small governments. Therefore, no actions were deemed necessary 
under the provisions of the Unfunded Mandates Reform Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Act of 1996. This rule will not 
result in an annual effect on the economy of $100 million or more; a 
major increase in costs or prices; or significant adverse effects on 
competition, employment, investment, productivity, innovation, or on 
the ability of United States-based companies to compete with foreign 
based companies in domestic and import markets.

Executive Order 12866

    The Department of State does not consider this rule, to be a 
``significant regulatory action'' under Executive Order 12866, section 
3(f), Regulatory Planning and Review. Therefore, in accordance with the 
letter to the Department of State of February 4, 1994 from the Director 
of the Office of Management and Budget, it does not require review by 
the Office of Management and Budget.

Executive Order 13132

    This regulation will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with section 6 
of Executive Order 13132, it is determined that this rule does not have 
sufficient federalism implications to require consultations or warrant 
the preparation of a federalism summary impact statement.

List of Subjects in 22 CFR Part 194

    Administrative practice and procedure, Foreign relations, Treaties.


    For the reasons set out in the preamble, 22 CFR chapter I is 
amended by adding subchapter U consisting of part 194 to read as 
follows:

SUBCHAPTER U--INTERNATIONAL COMMERCIAL ARBITRATION

PART 194--INTER-AMERICAN COMMERCIAL ARBITRATION COMMISSION RULES OF 
PROCEDURE

Sec.
194.1   Authority and scope of application.

Appendix A to Part 194--Inter-American Commercial Arbitration 
Commission Rules of Procedure (As Amended April 1, 2002)

    Authority: 9 U.S.C. 306.


Sec. 194.1  Authority and scope of application.

    In accordance with the authority in chapter III of the Federal 
Arbitration Act (9 U.S.C. 306), the Department of State has determined 
that the amended Rules of Procedures of the Inter-American Commercial 
Arbitration Commission (IACAC) should become effective in the United 
States and will come into force on April 1, 2002, at the same time as 
for all states party to the Inter-American Convention on International 
Commercial Arbitration. The IACAC's amended Rules of Procedure set 
forth the procedures for the initiation and conduct of arbitration of 
certain international commercial disputes to which the Inter-American 
Convention on International Commercial Arbitration applies. The amended 
Rules of Procedure are set out in full in appendix A to this part.

Appendix A to Part 194--Inter-American Commercial Arbitration 
Commission Rules of Procedure (As Amended April 1, 2002)

Table of Contents

Art. 1  Scope of Application
Art. 2  Notice, Calculation of Periods of Time
Art. 3  Notice of Arbitration
Art. 4  Representation and Assistance
Art. 5  Appointment of Arbitrators
Art. 6  Challenge of Arbitrators
Art. 7  Challenge of Arbitrators
Art. 8  Challenge of Arbitrators
Art. 9  Challenge of Arbitrators
Art. 10  Replacement of an Arbitrator
Art. 11  Repetition of Hearings in the Event of the Replacement of 
an Arbitrator
Art. 12  General Provisions
Art. 13  Place of Arbitration

[[Page 8863]]

Art. 14  Language
Art. 15  Statement of Claim
Art. 16  Statement of Defense
Art. 17  Amendments to the Claim or Defense
Art. 18  Plea as to the Jurisdiction of the Arbitral Tribunal
Art. 19  Further Written Statements
Art. 20  Periods of Time
Art. 21  Evidence and Hearings
Art. 22  Evidence and Hearings
Art. 23  Interim Measures of Protection
Art. 24  Experts
Art. 25  Default
Art. 26  Closure of Hearings
Art. 27  Waiver of Rules
Art. 28  Decisions
Art. 29  Form and Effect of the Award
Art. 30  Applicable law, Amiable Compositeur
Art. 31  Settlement or Other Grounds for Termination
Art. 32  Interpretation of the Award
Art. 33  Correction of the Award
Art. 34  Additional Award
Art. 35  Costs
Art. 36  Costs
Art. 37  Costs
Art. 38  Costs: Deposit of Costs
Art. 39  Transitory Article

Rules of Procedure (As Amended April 1, 2002)

Section I. Introductory Rules

Scope of Application

Article 1

    1. Where the parties to a contract have agreed in writing that 
disputes in relation to that contract shall be referred to 
arbitration under the IACAC Rules of Procedure, then such disputes 
shall be settled in accordance with these Rules subject to such 
modification as the parties may agree in writing and the IACAC may 
approve.
    2. These Rules shall govern the arbitration, except that where 
any such rule is in conflict with any provision of the law 
applicable to the arbitration from which the parties cannot 
derogate, that provision shall prevail.

Notice, Calculation of Periods of Time

Article 2

    1. For the purposes of these rules, any notice, including a 
notification, communication or proposal, is deemed to have been 
received if it is physically delivered to the addressee in person or 
via fax, telex or any other means agreed to by the parties, or if it 
is delivered at his habitual residence, place of business or mailing 
address, or, if none of these can be found after making reasonable 
inquiry, then at the addressee's last known habitual residence or at 
his last known place of business. Notice shall be deemed to have 
been received on the day it is so delivered by any of the means 
stated in these rules.
    2. For the purposes of calculating a period of time under these 
rules, such period shall begin to run on the day following the day 
when a notice, notification, communication or proposal is received. 
If the last day of such period is an official holiday or a non-
business day at the residence or place of business of the addressee, 
the period is extended until the first business day which follows. 
Official holidays or non-business days occurring during the running 
of the period of time are included in calculating the period.

Notice of Arbitration

Article 3

    1. The party initiating recourse to arbitration (hereinafter 
referred to as the ``claimant'') shall give to the other party 
(hereinafter referred to as the ``respondent'') a notice requesting 
arbitration and shall provide a copy to the Director General of the 
IACAC, either directly or through the IACAC National Section if one 
exists in his country of domicile.
    2. Arbitral proceedings shall be deemed to commence on the date 
on which the notice of arbitration is received by the respondent.
    3. The request for arbitration shall at least include the 
following:
    (a) A request that the dispute be submitted to arbitration;
    (b) The names and addresses of the parties;
    (c) A copy of the arbitration clause or the separate arbitration 
agreement;
    (d) A reference to the contract out of which, or in relation to 
which, the dispute has arisen, and a copy thereof if the claimant 
deems it necessary;
    (e) The general nature of the claim and an indication of the 
amount involved, if any;
    (f) The relief or remedy sought;
    (g) If three arbitrators are to be appointed, designation of one 
arbitrator, as referred to in Article 5, paragraph 3.
    4. The request for arbitration may also include the statement of 
claim referred to in Article 15.
    5. Upon receipt of the notice of arbitration, the Director 
General of the IACAC or the IACAC National Section shall communicate 
with all parties with respect to the arbitration and shall 
acknowledge the commencement of the arbitration.

Representation and Assistance

Article 4

    The parties may be represented or assisted by persons of their 
choice. The names and addresses of such persons must be communicated 
in writing to the other party; such communication must specify 
whether the appointment is being made for purposes of representation 
or assistance.

Section II. Composition of the Arbitral Tribunal

Appointment of Arbitrators

Article 5

    1. If the parties have not otherwise agreed, three arbitrators 
shall be appointed.
    2. When the parties have agreed that the dispute will be 
resolved by a single arbitrator, he may be appointed by the mutual 
agreement of the parties. If the parties have not done so within 
thirty (30) days from the date on which the notice of arbitration is 
received by the respondent, the arbitrator will be designated by the 
IACAC.
    3. If three arbitrators are to be appointed, each party shall 
appoint one arbitrator. The two arbitrators thus appointed shall 
choose the third arbitrator, who will act as the presiding 
arbitrator of the tribunal.
    4. If within thirty (30) days after receipt of the claimant's 
notification of the appointment of an arbitrator, the other party 
has not notified the first party with a copy to the Director General 
of the IACAC either directly or through the IACAC National Section 
if one exists in his country of domicile, of the arbitrator he has 
appointed, the arbitrator will be designated by the IACAC.
    5. If within thirty (30) days after the appointment of the 
second arbitrator, the two arbitrators have not agreed on the choice 
of the presiding arbitrator, the presiding arbitrator will be 
appointed by the IACAC.
    6. In making appointments, the IACAC shall have regard to such 
considerations as are likely to secure the appointment of 
independent and impartial arbitrators, and shall also take into 
account the advisability of appointing an arbitrator of a 
nationality other than the nationalities of the parties.
    7. The IACAC may request from either party any information it 
deems necessary in order to discharge its functions.

Challenge of Arbitrators

Article 6

    A prospective arbitrator shall disclose to those who approach 
him in connection with his possible appointment any circumstances 
likely to give rise to justifiable doubts as to his impartiality or 
independence. An arbitrator, once appointed or chosen, shall 
disclose such circumstances to the parties and to the IACAC, if 
appointed by the IACAC, unless they have already been informed by 
him of these circumstances.

Article 7

    1. Any arbitrator may be challenged if circumstances exist that 
give rise to justifiable doubts as to the arbitrator's impartiality 
or independence.
    2. A party may challenge the arbitrator appointed by him only 
for reasons of which he becomes aware after the appointment has been 
made.

Article 8

    1. A party who intends to challenge an arbitrator shall send 
notice of his challenge within fifteen days after the appointment of 
the challenged arbitrator has been notified to the challenging party 
or within fifteen days after the circumstances mentioned in Articles 
6 and 7 became known to that party.
    2. The challenge shall be notified to the other party, to the 
arbitrator who is challenged and to the other members of the 
arbitral tribunal and to the Director General of the IACAC. The 
notification shall be in writing and shall state the reasons for the 
challenge.
    3. When an arbitrator has been challenged by one party, the 
other party may agree to the challenge. The arbitrator may also, 
after the challenge, withdraw from his office. In neither case does 
this imply acceptance of the validity of the grounds for the 
challenge. In both cases the procedure provided in article 5 shall 
be used in full for the appointment of the substitute arbitrator, 
even if during the process of appointing the challenged arbitrator a 
party had failed to exercise his right to appoint or to participate 
in the appointment.

[[Page 8864]]

Article 9

    1. If the other party does not agree to the challenge and the 
challenged arbitrator does not withdraw, the decision on the 
challenge will be made by the IACAC.
    2. If the IACAC sustains the challenge, a substitute arbitrator 
shall be appointed or chosen pursuant to the procedure applicable to 
the appointment or choice of an arbitrator as provided in these 
rules.

Replacement of an Arbitrator

Article 10

    1. In the event of the death or resignation of an arbitrator 
during the course of the arbitral proceedings, a substitute 
arbitrator shall be appointed or chosen pursuant to the procedure 
applicable to the appointment or choice of the arbitrator being 
replaced.
    2. In the event that an arbitrator fails to fulfill his 
functions or in the event of the de jure or de facto impossibility 
of performing his function, or if the IACAC determines that there 
are sufficient reasons to accept the resignation of an arbitrator, 
the procedure in respect of the challenge and replacement of an 
arbitrator as provided in the preceding articles shall apply.
    3. If an arbitrator on a three-person tribunal does not 
participate in the arbitration, the two other arbitrators shall have 
the power in their sole discretion to continue the arbitration and 
make any decision, ruling or award, notwithstanding the refusal of 
the third arbitrator to participate. In deciding whether to continue 
the arbitration or to render any decision, ruling or award, the two 
other arbitrators shall take into account the stage of the 
arbitration proceedings, the reasons, if any, stated by the third 
arbitrator for not participating, as well as such other matters they 
consider appropriate in the circumstances of the case. If the two 
arbitrators decide not to continue the arbitration without the 
participation of the third arbitrator, the IACAC on proof 
satisfactory to it shall declare the office vacant, and the party 
that initially appointed him shall proceed to appoint a substitute 
arbitrator within thirty (30) days following the vacancy 
declaration. If the designation is not made within the stated term, 
then the substitute arbitrator will be appointed by the IACAC.

Repetition of Hearings in the Event of the Replacement of an Arbitrator

Article 11

    If under Articles 8 to 10 the sole or presiding arbitrator is 
replaced, any hearings held previously shall be repeated; if any 
other arbitrator is replaced, such prior hearings may be repeated at 
the discretion of the arbitral tribunal.

Section III. Arbitral Proceedings

General Provisions

Article 12

    1. Subject to these rules, the arbitral tribunal may conduct the 
arbitration in such manner as it considers appropriate, provided 
that the parties are treated with equality and that at any stage of 
the proceedings each party is given a full opportunity of presenting 
his case.
    2. If either party so requests at any stage of the proceedings, 
the arbitral tribunal shall hold hearings for the presentation of 
evidence by witnesses, including expert witnesses, or for oral 
argument. In the absence of such a request, the arbitral tribunal 
shall decide whether to hold such hearings or whether the 
proceedings shall be conducted on the basis of documents and other 
evidence.
    3. All documents or information supplied to the arbitral 
tribunal by one party shall at the same time be communicated by that 
party to the other party.

Place of Arbitration

Article 13

    1. If the parties have not reached an agreement regarding the 
place of arbitration, the place of arbitration may initially be 
determined by the IACAC, subject to the power of the tribunal to 
determine finally the place of arbitration within sixty (60) days 
following the appointment of the last arbitrator. All such 
determinations shall be made having regard for the contentions of 
the parties and the circumstances of the case.
    2. Notwithstanding the foregoing, the tribunal may meet in any 
place it may deem appropriate to hold hearings, hold meetings for 
consultation, hear witnesses, or inspect property or documents. The 
parties shall be given sufficient written notice to enable them to 
be present at any such proceeding.

Language

Article 14

    1. Subject to an agreement by the parties, the arbitral tribunal 
shall, promptly after its appointment, determine the language or 
languages to be used in the proceedings. This determination shall 
apply to the statement of claim, the statement of defense, and any 
further written statements and, if oral hearings take place, to the 
language or languages to be used in such hearings.
    2. The arbitral tribunal may order that any documents annexed to 
the statement of claim or statement of defense, and any 
supplementary documents or exhibits submitted in the course of the 
proceedings, delivered in their original language, shall be 
accompanied by a translation into the language or languages agreed 
upon by the parties or determined by the arbitral tribunal.

Statement of Claim

Article 15

    1. Unless the statement of claim was contained in the request 
for arbitration, within a period of time to be determined by the 
arbitral tribunal, the claimant shall communicate his statement of 
claim in writing to the respondent and to each of the arbitrators, 
with a copy to the IACAC. A copy of the contract, and of the 
arbitration agreement if not contained in the contract, shall be 
annexed thereto.
    2. The statement of claim shall include the following 
particulars:
    (a) The names and addresses of the parties;
    (b) A statement of the facts supporting the claim;
    (c) The points at issue;
    (d) The relief or remedy sought.
    The claimant may annex to his statement of claim all documents 
he deems relevant or may add a reference to the documents or other 
evidence he will submit.

Statement of Defense

Article 16

    1. Within a period of time to be determined by the arbitral 
tribunal, the respondent shall communicate his statement of defense 
in writing to the claimant and to each of the arbitrators, with a 
copy to the IACAC.
    2. The statement of defense shall reply to the particulars (b), 
(c) and (d) of the statement of claim (Article 15, paragraph 2). The 
respondent may annex to his statement the documents on which he 
relies for his defense or may add a reference to the documents or 
other evidence he will submit.
    3. In his statement of defense, or at a later stage in the 
arbitral proceedings if the arbitral tribunal decides that the delay 
was justified under the circumstances, the respondent may make a 
counterclaim arising out of the same contract, or rely on a claim 
arising out of the same contract for the purpose of a set-off.
    4. The requirements provided in Article 15, paragraph 2, of 
these Rules shall apply to both any counterclaim or to any claim 
presented for the purposes of a set-off.

Amendments to the Claim or Defense

Article 17

    During the course of arbitral proceedings either party may amend 
or supplement his claim or defense unless the arbitral tribunal 
considers it inappropriate to allow such amendment, having regard to 
the delay in making it or prejudice to the other party or any other 
circumstances. However, a claim may not be amended in such a manner 
that the amended claim falls outside the scope of the arbitration 
clause or separate arbitration agreement.

Plea as to the Jurisdiction of the Arbitral Tribunal

Article 18

    1. The arbitral tribunal shall have the power to rule on 
objections that it has no jurisdiction, including any objection with 
respect to the existence or validity of the arbitration clause or of 
the separate arbitration agreement.
    2. The arbitral tribunal shall have the power to determine the 
existence or the validity of the contract of which an arbitration 
clause or an arbitration agreement forms a part.
    For the purposes of this Article, an arbitration clause that 
forms part of a contract and that provides for arbitration under 
these rules shall be treated as an agreement independent of the 
other terms of the contract. A decision by the arbitral tribunal 
that the contract is null and void shall not entail ipso jure the 
invalidity of the arbitration clause or the arbitration agreement.
    3. A plea that the arbitral tribunal does not have jurisdiction 
shall be raised not later than in the statement of defense or, with 
respect to a counterclaim, in the reply to the counterclaim.
    4. In general, the arbitral tribunal should rule on a plea 
concerning its jurisdiction as

[[Page 8865]]

a preliminary question. However, the arbitral tribunal may proceed 
with the arbitration and rule on such a plea in its final award.

Further Written Statements

Article 19

    The arbitral tribunal shall decide which further written 
statements, in addition to the statement of claim and the statement 
of defense, shall be required from the parties or may be presented 
by them and shall fix the periods of time for communicating such 
statements.

Periods of Time

Article 20

    The periods of time fixed by the arbitral tribunal for the 
communication of written statements (including the statement of 
claim and statement of defense) should not exceed forty-five days. 
However, the arbitral tribunal may extend the time limits if it 
concludes that an extension is justified.

Evidence and Hearings (Articles 21 & 22)

Article 21

    1. Each party shall have the burden of proving the facts relied 
on to support his claim or defense.
    2. The arbitral tribunal may, if it considers it appropriate, 
require a party to deliver to the tribunal and to the other party, 
within such a period of time as the arbitral tribunal shall decide, 
a summary of the documents and other evidence that that party 
intends to present in support of the facts in issue set out in his 
statement of claim or statement of defense.
    3. At any time during the arbitral proceedings the arbitral 
tribunal may require the parties to produce documents, exhibits or 
other evidence within such a period of time as the tribunal shall 
determine.

Article 22

    1. In the event of an oral hearing, the arbitral tribunal shall 
give the parties adequate advance notice of the date, time and place 
thereof.
    2. If witnesses are to be heard, at least fifteen days before 
the hearing each party shall communicate to the arbitral tribunal 
and to the other party the names and addresses of the witnesses he 
intends to present, and the subject upon and the languages in which 
such witnesses will give their testimony.
    3. The arbitral tribunal shall make arrangements for the 
translation of oral statements made at a hearing and for a record of 
the hearing if either is deemed necessary by the tribunal under the 
circumstances of the case, or if the parties have agreed thereto and 
have communicated such agreement to the tribunal at least fifteen 
days before the hearing.
    4. Hearings shall be held in camera unless the parties agree 
otherwise. The arbitral tribunal may require the retirement of any 
witness or witnesses during the testimony of other witnesses. The 
arbitral tribunal is free to determine the manner in which witnesses 
are examined.
    5. Evidence of witnesses may also be presented in the form of 
written statements signed by them.
    6. The arbitral tribunal shall determine the admissibility, 
relevance, materiality and weight of the evidence offered.

Interim Measures of Protection

Article 23

    1. At the request of either party, the arbitral tribunal may 
take any interim measures it deems necessary in respect of the 
subject matter of the dispute, including measures for the 
conservation of the goods forming the subject matter in dispute, 
such as ordering their deposit with a third person or the sale of 
perishable goods.
    2. Such interim measures may be established in the form of an 
interim award. The arbitral tribunal shall be entitled to require 
security for the costs of such measures.
    3. A request for interim measures addressed by any party to a 
judicial authority shall not be deemed incompatible with the 
agreement to arbitrate, or as a waiver of that agreement.

Experts

Article 24

    1. The arbitral tribunal may appoint one or more experts to 
report to it, in writing, on specific issues to be determined by the 
tribunal. A copy of the expert's terms of reference, established by 
the arbitral tribunal, shall be communicated to the parties.
    2. The parties shall give the expert any relevant information or 
produce for his inspection any relevant document or goods that he 
may require of them. Any dispute between a party and such expert as 
to the relevance of the required information or production shall be 
referred to the arbitral tribunal for decision.
    3. Upon receipt of the expert's report, the arbitral tribunal 
shall communicate a copy of the report to the parties, who shall be 
given the opportunity to express, in writing, their opinion on the 
report. A party shall be entitled to examine any document on which 
the expert has relied in his report.
    4. At the request of either party the expert, after delivery of 
the report, may be heard at a hearing where the parties shall have 
the opportunity to be present and to interrogate the expert. At this 
hearing either party may present expert witnesses in order to 
testify on the points at issue. The provisions of Article 22 shall 
be applicable to such proceedings.

Default

Article 25

    1. If, within the period of time fixed by the arbitral tribunal, 
the claimant has failed to communicate his claim without showing 
sufficient cause for such failure, the arbitral tribunal shall issue 
an order for the termination of the arbitral proceedings.
    2. If one of the parties, duly notified under these rules, fails 
to appear at a hearing without showing sufficient cause for such 
failure, the arbitral tribunal may proceed with the arbitration.
    3. If one of the parties, duly invited to produce documentary 
evidence, fails to do so within the established period of time, 
without showing sufficient cause for such failure, the arbitral 
tribunal may make the award on the evidence before it.

Closure of Hearings

Article 26

    1. The arbitral tribunal may inquire of the parties if they have 
any further proofs to offer or witnesses to be heard or submissions 
to make and, if there are none, it may declare the hearings closed.
    2. The arbitral tribunal may, if it considers it necessary owing 
to exceptional circumstances, decide, on its own motion or upon 
application of a party, to reopen the hearings at any time before 
the award is made.

Waiver of Rules

Article 27

    A party who knows that any provision of, or requirement under, 
these rules has not been complied with and yet proceeds with the 
arbitration without promptly stating his objection to such non-
compliance shall be deemed to have waived his right to object.

Section IV. The Award

Decisions

Article 28

    The arbitral tribunal shall adopt its decisions by a majority 
vote. When there is no majority, the decision shall be made by the 
president of the tribunal.

Form and Effect of the Award

Article 29

    1. In addition to making a final award, the arbitral tribunal 
shall be entitled to make interim, interlocutory, or partial awards.
    2. The award shall be made in writing and shall be final and 
binding on the parties and subject to no appeal. The parties 
undertake to carry out the award without delay.
    3. The arbitral tribunal shall state the reasons upon which the 
award is based, unless the parties have agreed that no reasons are 
to be given.
    4. An award shall be signed by the arbitrators and it shall 
contain the date on which and the place where the award was made, 
which shall be the place designated in Article 13. Where there are 
three arbitrators and one of them fails to sign, the award shall 
state the reasons for the absence of the signature.
    5. The award may be made public only with the consent of both 
parties.
    6. Copies of the award signed by the arbitrators shall be 
communicated to the parties by the arbitral tribunal.
    7. If the arbitration law of the country where the award is made 
requires that the award be filed or registered by the arbitral 
tribunal, the tribunal shall comply with this requirement within the 
period of time required by law.

Applicable law, Amiable Compositeur

Article 30

    1. The arbitral tribunal shall apply the law designated by the 
parties as applicable to the substance of the dispute. Failing such 
designation by the parties, the arbitral tribunal shall apply the 
law determined by the conflict of laws rules that it considers 
applicable.
    2. The arbitral tribunal shall decide as amiable compositeur or 
ex aequo et bono

[[Page 8866]]

only if the parties have expressly authorized the arbitral tribunal 
to do so and if the law applicable to the arbitral procedure permits 
such arbitration.
    3. In all cases, the arbitral tribunal shall decide in 
accordance with the terms of the contract and shall take into 
account the usages of the trade applicable to the transaction.

Settlement or Other Grounds for Termination

Article 31

    1. If, before the award is made, the parties agree on a 
settlement of the dispute, the arbitral tribunal shall either issue 
an order for the termination of the arbitral proceedings or, if 
requested by both parties and accepted by the tribunal, record the 
settlement in the form of an arbitral award on agreed terms. The 
arbitral tribunal is not obliged to give reasons for such an award.
    2. If, before the award is made, the continuation of the 
arbitral proceedings becomes unnecessary or impossible for any 
reason not mentioned in paragraph 1, the arbitral tribunal shall 
inform the parties of its intention to issue an order for the 
termination of the proceedings. The arbitral tribunal shall have the 
power to issue such an order unless a party raises justifiable 
grounds for objection.
    3. Copies of the order for termination of the arbitral 
proceedings or of the arbitral award on agreed terms, signed by the 
arbitrators, shall be communicated by the arbitral tribunal to the 
parties. Where an arbitral award on agreed terms is made, the 
provisions of Article 29, paragraphs 2 and 4, shall apply.

Interpretation of the Award

Article 32

    1. Within thirty days after the receipt of the award, either 
party may request that the arbitral tribunal give an interpretation 
of the award. The tribunal shall notify the other party or parties 
to the proceedings of such request.
    2. The interpretation shall be given in writing within forty-
five days after the receipt of the request. The interpretation shall 
form part of the award and the provisions of Article 29, paragraphs 
2 to 7, shall apply.

Correction of the Award

Article 33

    1. Within thirty days after the receipt of the award, either 
party may request the arbitral tribunal, which shall notify the 
other party, to correct in the award any errors in computation, any 
clerical or typographical errors, or any errors of similar nature. 
The arbitral tribunal may within thirty days after the communication 
of the award make such corrections on its own initiative.
    2. Such corrections shall be in writing, and the provisions of 
Article 29, paragraphs 2 to 7, shall apply.

Additional Award

Article 34

    1. Within thirty days after the receipt of the award, either 
party may request the arbitral tribunal, which shall notify the 
other party, to make an additional award as to claims presented in 
the arbitral proceedings but omitted from the award.
    2. If the arbitral tribunal considers the request for an 
additional award to be justified and considers that the omission can 
be rectified without any further hearings or evidence, it shall 
complete its award within sixty days after the receipt of the 
request.
    3. When an additional award is made, the provisions of Article 
29, paragraphs 2 to 7, shall apply.

Costs (Articles 35 to 38)

Article 35

    The arbitral tribunal shall fix the costs of arbitration in its 
award. The term ``costs'' includes only:
    (a) The fees of the arbitral tribunal, to be stated separately 
as to each arbitrator and to be fixed by the tribunal itself in 
accordance with Article 36;
    (b) The travel and other expenses incurred by the arbitrators;
    (c) The costs of expert advice and of other assistance required 
by the arbitral tribunal;
    (d) The travel and other expenses of witnesses to the extent 
such expenses are approved by the arbitral tribunal;
    (e) The costs for legal representation and assistance of the 
successful party if such costs were claimed during the arbitral 
proceedings, and only to the extent that the arbitral tribunal 
determines that the amount of such costs is reasonable;
    (f) The administrative fee and other service charges of the 
IACAC; which shall be set by the Arbitrator Nominating Committee of 
the IACAC in accordance with the schedule in effect at the time of 
the commencement of the arbitration. The committee may set a 
provisional fee when the proceedings are instituted and the final 
amount before the award is rendered, so that such amount may be 
taken into account by the tribunal when rendering its award.

Article 36

    1. The fees of the arbitral tribunal and the administrative fees 
for the IACAC shall be set in accordance with the schedule in effect 
at the time of commencement of the arbitration. The fees shall be 
calculated on the basis of the amount involved in the arbitration; 
if that amount cannot be determined, the fees shall be set 
discretionally.
    2. The amount between the maximum and minimum range in the 
schedule shall be set in accordance with the nature of the dispute, 
the complexity of the subject matter and any other relevant 
circumstances of the case.

Article 37

    1. The costs of arbitration shall be borne by the unsuccessful 
party. However, the arbitral tribunal may apportion each of such 
costs between the parties if it determines that apportionment is 
reasonable, taking into account the circumstances of the case.
    2. When the arbitral tribunal issues an order for the 
termination of the arbitral proceedings or makes an award on agreed 
terms, it shall fix the costs of arbitration referred to in Article 
35 in the text of that order or award.
    3. No additional fees may be charged by an arbitral tribunal for 
interpretation or correction or completion of its award under 
Articles 32 to 34.

Article 38

Deposit of Costs

    1. The arbitral tribunal, on its establishment, or the 
Arbitrator Nominating Committee of the IACAC within its purview, may 
request each party to deposit an equal amount as an advance for the 
costs referred to in Article 35, paragraphs (a), (b), (c) and (f).
    2. During the course of the arbitral proceedings the arbitral 
tribunal may request supplementary deposits from the parties.
    3. When a party so requests, the arbitral tribunal shall fix the 
amounts of any deposits or supplementary deposits only after 
consultation with the IACAC, which may make any comments to the 
arbitral tribunal which it deems appropriate concerning the amounts 
of such deposits and supplementary deposits.
    4. If the required deposits are not paid in full within thirty 
days after the receipt of the request, the arbitral tribunal shall 
so inform the parties in order that one or another of them may make 
the required payment. Should one of the parties fail to pay its 
deposits in full, the other party may do so in its stead. If payment 
in full is not made, the arbitral tribunal may order the suspension 
or termination of the arbitral proceedings.
    5. After the award has been made, the arbitral tribunal shall 
render an accounting to the parties of the deposits received and 
return any unexpended balance to the parties.

Transitory Article

Article 39

    Any disputes arising under contracts that stipulate resolution 
of such disputes pursuant to the IACAC Rules of Procedure and that 
have not been submitted to an arbitral tribunal as of the date on 
which these rules enter into effect shall be subject to these rules 
in their entirety.

    Dated: November 15, 2001.
Jeffrey Kovar,
Assistant Legal Advisor for Private International Law, Department of 
State.
[FR Doc. 02-2860 Filed 2-26-02; 8:45 am]
BILLING CODE 4710-08-P