Updates on UNCITRAL WGII and WGIII

From 5-16 September 2022, UNCITRAL Working Group (WG) III and from 10-14 October 2022, UNCITRAL WG II met in Vienna to advance their work on the reform of Investor-State Dispute Settlement (ISDS) and on Dispute Settlement respectively. Ciarb attends all WGII and WGIII sessions as an observer.

The UNCITRAL (the United Nations Commission on International Trade Law) is a United Nations body aimed at facilitating international trade and investment, in particular, through its Working Groups and adoption of legal instruments of global importance (e.g., the UNCITRAL Model Law on International Commercial Arbitration 1985, the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration 2014 etc.).

There are 7 UNCITRAL Working Groups. Their sessions usually take place twice a year. Thus, the WGII’s October session reviewed model clauses prepared by the Secretariat on early dismissal and preliminary determination, as well as technology-related dispute resolution and adjudication (based on the UNCITRAL Expedited Arbitration Rules). The WGIII is responsible for establishing procedural mechanisms that would help to improve the current ISDS system. Its remit covers, in particular, the selection and appointment of ISDS tribunal members in a standing mechanism, advisory centre on ISDS, as well as the development of the Code of Conduct for Adjudicators.

In order to be able to input fully on behalf of our members, we are inviting you to submit your thoughts in advance of UNICTRAL WGIII’s Special Session. This takes place from 23 to 27 January 2023, and from December 2022 we will be setting up an area on the Ciarb website where you can submit any thoughts you may have.

It should be noted that Ciarb uses its influence strategically and so may not always intervene.

For full report on the 76th Session of WGII please see below. A summary of the 43rd Session of WGIII will be forthcoming.

Summary of UNCITRAL WGII 76th Session:

WGII’s October session reviewed model clauses prepared by the Secretariat on early dismissal and preliminary determination, as well as technology-related dispute resolution and adjudication (based on the UNCITRAL Expedited Arbitration Rules). Regarding early dismissal and preliminary determination, the delegates agreed that the provisions should take the form of a guidance text, with the purpose of the text being to inform an arbitral tribunal and the parties that the tribunal had the discretion to dismiss a claim that was manifestly without merit. The delegates also considered the clarity, length and user-friendliness of the text. A revised version of the guidance will be considered at the next Working Group session in February 2023.

The Working Group was also entrusted to look at technology-related dispute resolution and adjudication jointly, the goal being to create a legal framework for a simplified mechanism to resolve disputes within a shorter time frame involving a third party with the relevant expertise, not necessarily resulting in a final award.

A number of delegates expressed their concerns as to the applicability of the framework offered by the Expedited Rules to the matter in question, as it might limit the benefits offered by adjudication. It was therefore expressed that adjudication used to resolve technology-related disputes should be considered separately from expedited arbitration. One of the approaches offered that the overall process should operate under the UNCITRAL Arbitration Rules or the Expedited Rules, while certain elements of adjudication could be introduced in the arbitration process.

Another, innovative, widely supported approach provided for the introduction of a pre-arbitration process, or a form of fast-track arbitration, which could be followed by a fully-fledged arbitration under certain conditions. Such an approach would enable a third-party expert to make a decision in a short time frame while the parties would retain the possibility to pursue arbitration afterwards. The delegates noted that such an approach should be consistent with the existing UNCITRAL framework, in order to meet the needs of users in different jurisdictions. In this case, the decision (it could also be referred to as determination, but not an award) in the first «phase» would be made by a third-party technical expert. It was also emphasised that it should be imperative for the Working Group to consider the enforceability of such decisions.