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What types of dispute can be settled via the CEPANI Arbitration Rules?

All disputes for which parties may enter into an arbitration agreement, according to the applicable law, may be submitted to CEPANI. In practice, the disputes submitted to CEPANI concern mainly commercial and company law. To obtain more detailed information on the nature of the cases, their number and the amounts at stake, please refer to the annual statistics published in the CEPANI newsletter.

What is the average duration of a CEPANI arbitration?

Between 8 and 12 months. This covers the time period between the appointment of the Arbitral Tribunal and the day the arbitral Award is rendered. Arbitration proceedings for disputes of limited financial importance, in which the tribunal consists of one arbitrator only, advance slightly quicker than those in which three arbitrators are appointed. The average duration for these proceedings is 4 months.

What is the difference between standard arbitration proceedings and proceedings for disputes of limited financial importance?

For disputes of limited financial importance, CEPANI provides a quicker as well as a lower-priced procedure. Such a ‘small’ dispute is a dispute in which the principal claim(s) and any possible counterclaim(s) together do not exceed an amount of 25.000 EUR.
Proceedings of this kind advance quicker because:
• The Arbitral Tribunal always consists of one arbitrator only
• In principle, the proceedings are handled exclusively in writing
• The proceedings are more straightforward; for example, no Terms of Reference are required
• The time-limits are shortened: in principle, the proceedings should not take more than 112 days, starting from the introduction of the arbitration and going up to the Award.

What is the cost of CEPANI arbitration proceedings?

The costs of a CEPANI arbitration comprise, on the one hand, the fees and costs of the arbitrators, and, on the other hand, the administrative costs of the CEPANI Secretariat, which amount to 10% of the fees and costs of the arbitrators. Upon receipt of the Request for Arbitration, CEPANI asks the parties concerned to provide an advance on the arbitration costs within a period of one month. This advance on costs is calculated on the basis of the arbitration fee scale. Each party is asked to pay an equal part of the advance. It is important to note that CEPANI will not proceed to the appointment of the Arbitral Tribunal until the advance on arbitration costs has been fully paid. Should one party refuse to pay its share, CEPANI, in order to move the arbitration forward, will call on the other party to also cover this part of the advance on costs. The Arbitral Tribunal will then definitively decide in its final Award on the allocation of arbitration costs between the parties . Parties who voluntarily execute the arbitral Award of their own free will avoid the registration duty of 3% which is applicable on all court judgments.

How is the advance on arbitration costs determined?

An arbitral procedure is undertaken; the sum in dispute amounts to 250,000 EUR. The parties have asked for an Arbitral Tribunal of three arbitrators to be appointed. The advance required to cover the arbitration costs will be determined in the following way:

a) Arbitrators' fees
Cost of arbitration scale from 100,000 to 500,000 EUR:
Minimum: 3,250 + 1.5 % of the amount exceeding 100,000
3,250 + 1.5 % of (250,000 - 100,000)
3,250 + 1.5 % of 150,000
3,250 + 2,250 = 5,500 EUR
Maximum: 6,000 + 1.5 % for the amount exceeding 100,000
6,000 + 1.5 % of (250,000 - 100,000)
6,000 + 1.5 % of 150,000
6,000 + 2,250 = 8,250 EUR
The advance kept for the fees and costs of the arbitrators: 6,750 EUR

b) Administrative costs
10 % of the advance on arbitration costs = 675 EUR
+ VAT of 21 % = 141,25 EUR

c) Total amount of the advance required
7.566,25 EUR

d) Multiplied by 3 for the Arbitral Tribunal
TOTAL = 22.698,75 EUR

! The Appointments Committee will not proceed to the nomination of the Arbitral Tribunal until the advance on arbitration costs has been paid in full by (one of) the parties.

How can one demonstrate that the Request for Arbitration and enclosed documents have been communicated?

Proof that the Request for Arbitration has been communicated may be established, for example, in the form of proof of posting by registered mail, a copy of the fax indicating that it has been sent ….
Indeed, it is very important to add this evidence to the Request for Arbitration because it provides the Secretariat with the certainty that the respondent has already received the Request for Arbitration and enclosed documents. Late notice to the respondent concerning the Request for Arbitration will unnecessarily delay the procedure.

If the respondent has formulated an Answer to the Request for Arbitration, is it still possible to respond to that Answer? Within what time limit?

The parties are not supposed to submit their complete argumentation, either in the Request for Arbitration or in the answer to the Request for Arbitration. They need only sumbit a brief summary of the grounds of the claim and counterclaim. Nonetheless, it is open to the claimant to file a reply to the respondent’s Answer within a time limit of three months.

When does the Appointments Committee or the CEPANI President proceed to the appointment of the arbitral tribunal?

The Appointments Committee or the CEPANI President appoints or approves the nomination of the Arbitral Tribunal once the advance on arbitration costs has been paid in full by (one of) the parties. If one party refuses to pay its part of the advance on arbitration costs, the other party may make the payment.

Once appointed, what is the first task of the Arbitral Tribunal?

On the one hand, the first task of the Arbitral Tribunal consists of drawing up, together with the parties, the Terms of Reference. In addition, a Procedural Timetable must be drafted. The Arbitral Tribunal will usually submit a draft to the parties and organize a first meeting in order for the parties to approve and sign the Terms of Reference and discuss the Procedural Timetable.

What are the Terms of Reference and why are they useful?

In the Terms of Reference, the Arbitral Tribunal describes in detail the claims of the parties, the correspondence addresses to which mail can be sent, the language and seat of arbitration and a list of the issues that are in dispute. The advantage of the Terms of Reference is that they enable the Arbitral Tribunal and the parties to have a well-ordered description of the framework within which their arbitration will be conducted.

What are the consequences regarding the advance on arbitration costs should a claimant increase its initial claim or should a respondent introduce a counterclaim?

When the respondent introduces a counterclaim or when a claimant increases its initial claim, the initial advance on arbitration costs will be adjusted. Generally, each party pays half of this additional advance.

How can the time limits mentioned in the Rules be extended?

There exist two sorts of time limits.
On the one hand, there are the time limits set by the CEPANI Rules, which are obligatory for the parties and the Arbitral Tribunal.
On the other hand, there are the deadlines that the Arbitral Tribunal and the parties agree upon amongst themselves.
In the first case, to obtain the extension of a time limit by CEPANI, the Arbitral Tribunal or the requesting party has to send a reasoned request to the CEPANI Secretariat. This request must reach the Secretariat before the expiry of the time limit of which the extension is requested.
In the second case, CEPANI has no power to rule on an extension of a time limit granted by the Arbitral Tribunal. This extension has to be requested from the Tribunal itself.
In any case, any permission to extend a time limit will always need to include the reasons that justify the extension.

How is an technical expert investigation organised during the arbitral proceedings?

A technical expert investigation organised by the Arbitral Tribunal is very similar to the expert investigation organized by the state courts. The Arbitral Tribunal appoints the experts whilst taking into account the nature and circumstances of the expert’s Terms of Reference and the specific requests of the parties. CEPANI recommends that the Arbitral Tribunal obtain from the parties a down payment for the expert expenses before the expert starts his/her investigation. This advance should be deposited in a bank account designated by the Arbitral Tribunal. Unless it has been agreed or decided otherwise, this down payment will be made by the most diligent party. Unless the parties have decided otherwise, the expert’s report has the value of an opinion and not that of a binding decision.

How is the Award notified to the parties?

Provided that the parties have fully paid the arbitration costs, the notification of the arbitral Award is handled by the CEPANI Secretariat. As long as the costs have not been paid, the arbitral Award will not be transmitted to the parties. However, any party may obtain the notification of the arbitral Award by paying the amount(s) that remain(s) due.

Who is in charge of the deposit of the Award?

Should a party request this, the Award will be filed by the CEPANI Secretariat at the Registry of the Civil Court of the seat of arbitration, within 3 months of the notification of the Award. However, this is not a cut-off deadline and it remains possible for the parties to file the Award themselves even after the three-month period.

How can parties contribute to quick and effective arbitral proceedings?

The parties can help accelerate the arbitral proceedings by paying the advance on arbitration costs as soon as possible, by actively collaborating in the drawing-up and the signature of the Terms of Reference, by fixing and respecting strict deadlines in the Procedural Timetable, by avoiding requests for unnecessary extensions of time. The CEPANI Rules provide for a two-month time limit to establish the Terms of Reference and the Procedural Timetable. The Arbitral Tribunal then has six months to issue the Award. If the parties have agreed on longer terms than those referred to under the CEPANI Rules, these deadlines can be extended up to the limits agreed by the parties.

Should a copy of all communications be sent to the CEPANI Secretariat?

The CEPANI Secretariat must receive a copy of all communications between the parties and the Arbitral Tribunal, as well as between the Arbitral Tribunal and the parties. The Secretariat will be fully up-to-date on the status of the proceedings and can intervene in order to ensure that there are no delays.

What happens if the parties reach an agreement during the arbitral proceedings?

If the parties reach an agreement during the arbitral proceedings, two possibilities arise. Either the parties ask the Arbitral Tribunal to incorporate their settlement into an Award, the advantage of this being that the parties will thus obtain an enforceable Award. Or, the parties may decide that their agreement does not need to be included in an Award. In this case, both parties must notify the CEPANI Secretariat that they have reached an agreement and that this settlement puts an end to their dispute and therefore to the arbitral proceedings. In both cases, the CEPANI Secretariat will ask the arbitrators to submit a description of the work that has already been performed and to indicate whether the settlement was achieved with or without their help. After having collected this information, the Secretariat will fix the arbitration costs and, if appropriate, refund any excess payment.