The advantages of choosing the proper arbitration chamber

Maria Cibele Crepaldi Affonso dos Santos
Vamilson José Costa
Marina Gabriela Santos Fusinato

The arbitration procedure is highly flexible and allows the parties to chose many procedural rules and determine specific deadline to each case. For this reason, the good development of the arbitral procedure depends on the choice of the applicable regulation, among other factors.

By opting for an institutional arbitration, the parties decide to count on the support and infrastructure of private organizations. More important: by electing a certain arbitration chamber, the parties decide for applying this institution’s regulations. Therefore, the performance of the arbitration chamber is related to both the rendering of backup administrative services and providing infrastructure, but also to the application of its respective regulation, which plays a major role in the development of the procedure. It is worth emphasizing, however, that the institutions do not have power to intervene on the solution of the dispute and may not interfere on the merit of the arbitration award.

With respect to the administrative services, the arbitration chamber intermediates the communication between the parties and the arbitral tribunal, organizes and preserves documents, assists in monitoring deadlines, sends mail, schedules hearings and take other administrative related measures, in addition to providing drafts of documents, hearing rooms and translation and interpretation services.

As for the application of the regulation – which most important provisions may not be waived by the parties –, the arbitration chamber establishes rules relating to the arbitration institution and the appointment of arbitrators in case of opposition or dispute between the parties, or even methods to decide on possible objection to members of the tribunal, whose independence or impartiality are being questioned. Some institutions also provide for the verification of formal aspects of the arbitration award, in order to ensure its validity.

Given the importance of the role played by the arbitration chamber, the decision making process involved requires reasoning and must consider several factors, mostly due to the significant number of existing institutions.  For example, there are the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA) and the International Centre for Dispute Resolution (ICDR) – international institutions that administrate several arbitrations in Brazil or involving a Brazilian party -, as well as the Center for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada (CAM/CCBC), the Chamber of Conciliation, Mediation and Arbitration of the Federation of Industries of the State of São Paulo (CMA/Fiesp), the Market Arbitration Chamber (CAM), the Business Arbitration Chamber (Camarb), the Arbitration and Mediation Center of the American Chamber of Commerce (Amcham), and the FGV Arbitration and Conciliation Chamber – Brazilian institutions more often elected by the parties.

In order to ensure that the elected chamber will actually meet the parties’ expectations, it is advisable to choose recognized institutions with expertise in disputes similar to those that may arise between the parties. Even though it is common for arbitration rules to be similar, the parties must pay attention to some aspects: the level of action involved in each institution (i.e., if there is scrutiny of award or not); the possibility of establishment of urgency procedures; in case of international arbitration with foreign parties, the institution’s capacity to work with the language selected by the parties (in addition to the existence of regulation also written in said language); the chamber’s arbitrators, considering that the institution may appoint a member of the arbitral tribunal.

Each of the institutions have full discretion to determine the cost of the arbitration, represented by the amount charged for rendering administration services relating to the procedure. Said costs usually increase in light of the mount involved in the dispute. The place and infrastructure made available by the institution also affect the total cost of the arbitration. Considering that cost is a very important issue to the parties, said topic will be further discussed in the next article.