This paper deals with the question whether there are limits to the competence of arbitral tribunals to decide on the arbitrators’ fees. The paper begins with an outline of the principle, that no one shall be judged in his own affairs in order to demonstrate the problematic nature of the issue. The examination of the scope of competence and its limits will follow the two phases during which its relevance becomes apparent: First, the tribunal’s right to remuneration and the scope of its competence to determine such at the stage of the arbitral proceeding. Second, restrictions and limits set by national courts during recognition and enforcement of the award will be addressed. The recent landmark decision by the German Federal Supreme Court shall be evaluated also in light of international case law.
A judge or arbitrator would automatically be disqualified from hearing a case in which he or she has a financial or non-pecuniary interest. Statements like this can be found in almost every paper addressing the requirements of an impartial arbitral tribunal or court. If an arbitrator has a financial interest in the victory of a party of the proceeding, it is undisputed that he or she is not capable to decide over the dispute.
This gives rise to the question, why courts and legal scholars are hesitant to apply this principle of impartiality to the arbitrators’ competence to decide upon its own fees and costs. Certainly, the issue has its own characteristics such as the parties’ voluntary submission to arbitration and the special contractual relationship between parties and arbitrators.
But how shall the centuries-old principle of nemo iudex in causa sua apply, when an arbitral tribunal decides upon the arbitrators’ fee? Under this doctrine no one may act as judge in his own affairs. It is a key rule of natural justice and an essential part of the right to a fair trial as set forth in Art. 6 (1) of the European Convention on Human Rights. It is this paper’s objective to analyse and discuss the limits of the arbitral tribunal’s competence to judge on its own remuneration.
Inhaltsverzeichnis (Table of Contents)
- INTRODUCTION
- I. THE FEE DETERMINATION AS A DECISION IN OWN AFFAIRS
- A. Limits to Party Autonomy
- B. Classification of the Problem - Basic Constellation of Nemo Iudex In Causa Sua
- C. Conclusion
- II. COMPETENCE ARISING IN THE PHASE OF THE ARBITRAL PROCEEDING
- A. Legal Basis for Right to Remuneration - Receptum Arbitri
- 1. Ad-Valorem Method
- 2. Time-Based Remuneration Method
- 3. Conclusion
- B. Institutional Arbitration Proceedings
- 1. Agreement between Parties and Tribunal
- 2. Fees Fixed with the Issuance of the Award
- (a) Competence under the UNCITRAL Arbitration Rules
- (i) Changes to the Determination of Costs in 2010
- (ii) Evaluation
- (b) Competence through Virtue of National Law
- C. Ad-Hoc Arbitration Proceedings
- D. Conclusion
- A. Legal Basis for Right to Remuneration - Receptum Arbitri
- III. LIMITS AT THE STAGE OF ENFORCEMENT AND RECOGNITION
- A. German Case Law on the Tribunal's Competence
- 1. Status Quo Prior to the BGH Order
- (a) Importance of an Advance on Costs
- (b) Determination of Value in Dispute
- 2. BGH Decision, 2 March 2017
- (a) Facts of the case
- (b) Analysis of the Decision
- (i) Prohibition of Authoritative Fee Determination
- (ii) Conflict with previous BGH Jurisprudence
- (iii) Evaluation of the Order's Consequences
- 3. Conclusion
- B. International Jurisdiction
- 1. Parties' Implied Consent through Choice of Procedural Law
- (a) Advantages
- (b) Disadvantages
- 2. Possibility of Review by State Courts
- (a) Advantages
- (b) Disadvantages
- 3. Validity of Fee Determination, Though Without Res Judicata Effect
- (a) Disadvantages
- (b) Advantages
- 4. Conclusion
- C. International Reception of the BGH-Order
- A. German Case Law on the Tribunal's Competence
- IV. SUMMARY
- V. CONCLUDING REMARKS
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This seminar paper aims to examine the limits of arbitral tribunals' competence in determining their own fees, exploring the legal framework and case law within both national and international contexts.
- The principle of party autonomy in the context of arbitration
- The legal basis for the arbitrators' right to remuneration
- The competence of arbitral tribunals to determine their fees in different stages of the arbitration process
- The implications of the German Federal Court of Justice's decision on the competence of arbitral tribunals to determine their fees
- The international reception of the BGH decision and its implications for the enforcement and recognition of arbitral awards
Zusammenfassung der Kapitel (Chapter Summaries)
The first chapter discusses the issue of fee determination as a decision in own affairs, analyzing the limitations to party autonomy in this context and the application of the principle of nemo iudex in causa sua. The second chapter explores the competence of arbitral tribunals to determine their fees during the arbitration proceedings, considering both institutional and ad hoc arbitration proceedings. The chapter examines different methods of fee calculation, including ad valorem and time-based approaches, and analyzes the competence of tribunals under the UNCITRAL Arbitration Rules and national law.
Schlüsselwörter (Keywords)
The central themes of this work revolve around arbitral tribunals' competence to set their own fees. Key concepts include party autonomy, legal basis for remuneration, institutional and ad hoc arbitration, fee determination methods, enforcement and recognition of awards, and the BGH decision on the competence of arbitral tribunals.
- Quote paper
- Nathaniel Kellerer (Author), 2017, Competence of Arbitral Tribunals. Are there Limits to Decide on the Arbitrators' Fees?, Munich, GRIN Verlag, https://www.grin.com/document/974004
