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MODULE 1

INTRODUCTION

EVOLUTION OF ARBITRATION FROM ROMAN TO UNCITRAL

➢ GREECE & ROME

On the standard that an ounce of truth merits a pound of hypothesis, let us leave the
philosophers for the makers of history, and research the genuine improvement of arbitration
previously. The investigation of arbitration appropriately starts with the old Greeks, " for it
was in Greece that the tranquil adjudication of international disputes had its actual inception
and most punctual advancement. The main record we have of the use of international
arbitration in Greek history originates from Pausanias, however it has been demonstrated that
this story is most likely a creation of the essayist and served to outline the writer's
assessments as opposed to the genuine practices of the eighth century B. C. The primary true
case dates from around 650, when Andros and Chalcis disputed the ownership of the deserted
city of Acanthus and left the choice to the Parians, the Samians, and the Erythracans.
Interstate arbitration ended up incessant after the center of the seventh century B.C. At that
point, the incredible relocations had reached an end and separate states had been sorted out. A
specific equilibrium acquired among the Greek conditions of this age, and it was maybe
because of this parity of intensity that the development of arbitration was favored. The states
were starting to rise up out of their disconnection and come into economic relations, along
these lines making ready for disputes. Then again, no state was yet adequately solid to resist
its neighbors, and thus, arbitration was called into play. With the fifth century, we enter upon
another period, the time of national hegemonies. The smaller states have assembled
themselves under the authority of Athens or of Sparta. In spite of the fact that the common-
sense aftereffect of arbitration was debilitating amid this period, we by the by observer the
advancement of vows for the serene settlement of future disputes. Such a vow was embedded
in the thirty years' détente entered upon by Sparta and Athens in 445, and again in the
tranquillity of Nicias in 421. Despite the fact that the treaties were broken and the
Peloponnesian War was battled regardless, the possibility of arbitration, rendered compulsory
through treaty, had been given to the world.

During the decades after the close of the Peloponnesian War and preceding the battle of
Chaeronea (338 B.C.), conditions again became favourable for the practice of international
arbitration. Athens and Sparta, having been reduced in resources by the protracted conflict,
stood more on a plane with the other states of Hellas. To be sure, Sparta held the leadership
for a time, followed by Thebes; yet, relatively speaking, a sort of equilibrium prevailed.
States now faced each other on a more equal footing than in the heyday of the empire. Hence,
in this period we have several instances of successful arbitration, especially famous being that
between Athens and Delos over the right of administering the sanctuary of Apollo at Delos.
On the other hand, arbitration was frequently refused. Sparta rejected Thebes' offer after the
battle of Leuctra (37I B.C.), and Athens refused to listen to Philip of Macedon's demand to
determine by arbitration the ownership of Halonnesus (ca. 340 B. C.). Numerous examples of
arbitration are to be found in the Macedonian and Hellenistic periods. Particularly well-
known was the case of Melos and Cimolos for the possession of three small islands, in which
dispute Cimolos was awarded the territory by the popular assembly of Argos. But there is not
space to describe in detail, or even to mention, the many arbitrations of which we have
epigraphic evidence in this long period after the conquests of Philip. Westermann counts
forty-six cases of interstate arbitration between 300 B.C. and 100 B.C. Almost always, he
adds, the disputes related to boundaries. Arbitration was very prominent in the Greek world
of the third century. Under Alexander and his successors the communities of the eastern
Mediterranean world had frequent recourse to this method of terminating quarrels. On several
occasions the monarchs themselves acted as arbitrators, while the Achaean, Aetolian,
Thessalian, and Boeotian leagues regularly employed arbitration to preserve the peace.
Arbitration was given an additional impetus when Rome entered upon the stage of Greek
history. The Romans took over the policy of the Hellenistic princes of employing arbitration
to adjudicate differences between states that lay within the growing sphere of Roman
influence. It is far from easy always to determine the voluntary or non-voluntary nature of
arbitrations where Rome was interested. The Senate, following the precedent of Philip of
Macedon, at times compelled the settlement of disputes in the interests of good government.
But such cases can hardly be classified as examples of arbitration. The form may exist but not
the spirit. But as Mr. Tod has observed, these facts do not abolish the reality of senatorial
arbitration. On occasion the Senate was appealed to by Greek communities in much the same
manner as the latter had previously invited decisions from Seleucid or Lagid rulers. A case
might be heard at Rome before the assembled patres, but this procedure was rare. More often

a legatus, or a commission of several legati, would be appointed to investigate and decide the
point at issue. Still a third way was open to the Senate; namely, the appointment of a
disinterested Greek state to render an award in accordance with certain general specifications
laid down by a senatus consultum. Omitting the interesting subjects of the appointment and
procedure of the Greek arbitral tribunals, it remains to deal with the extent and success of
such arbitration. We possess to-day the records of some eighty cases, but of these only about
three-fourths resulted in genuine arbitration, and of the three-fourths, several decisions were
rendered in regard to the same dispute. It is entirely a matter of conjecture to estimate the
actual extent of arbitration, but that it was the daily bread of international life, we learn from
Victor B6rard. We know of relatively few cases through the extant writings of the classical
authors, almost all our data consisting of epigraphic records accidentally discovered, many in
very recent years. It therefore stands to reason that we know but a small percentage of the
total number of interstate arbitrations. After all, one can say little more than that arbitration
was used throughout the Hellenic world for five hundred years.

Greece made an accomplishment of arbitration. There are only two examples known where it
was accounted for that the states did not keep the tribunal's award. In fact, fines were to be
forced on any party that may slip by in satisfying the choice. In the final hotel, popular
assessment, at that point as now, comprised the most grounded certification for the
unwavering execution of global obligations. As opposed to the experience of Greece,
interstate arbitration did not show up extremely right off the bat in the archives of Rome.
Arbitration was most likely very unused in Rome until she interacted with Greece parched the
Levant for the most part. This was expected, among different causes, to the more noteworthy
ethnological contrasts among the people groups of the Italian promontory. In addition, the
geology of Italy did not encourage business relations via land or via ocean. In the third spot,
there were no socially bringing together powers in Italy, as there had been in Greece, for
example, national festivals, commercial treaties, or prominent confederations like the
amphictyonis. The policy of the Roman Senate in dealing with the East, and it is perhaps
unnecessary to pursue the subject much further. In early times the Senate occasionally had
been requested to play the r6le of arbiter in behalf of independent states already fascinated by
the splendour of the name of Rome; and by steady degrees the tide of arbitration rose until by
the second century B.C. it reached its high-water mark around eastern Mediterranean shores.
The Senate, with a prestige enhanced in the East after the victory of Flamininus at

Cynoscephalae, was more and more frequently invited to act as an arbiter. As a rule, as was
stated above, Rome either set the discussion in the hands of a special commission, or she left
it to a third city, generally some neighbor of the defendant networks. In finishing up these
few words on Rome, it might reasonably be said that she didn't transmit the standards of
arbitration in unadulterated structure, and one can't see her activities as courageous in the
long battle for the pacific settlement of global disputes. But we must always hold in mind that
her very nature as a militant republic and later a world empire, precluded the existence of
arbitral courts in the ordinary sense of the word. The republic lost what Greece had gained,
and the empire lost the little the republic had won.

➢ History of International Arbitration

A thorough treatment of the history of international commercial arbitration is beyond the
scope of this treatise. Indeed, such a history remains to be written by legal historians, even
insofar as the comparatively limited subjects of leading European or other jurisdictions are
concerned.

Nevertheless, a brief review of the history of arbitration in international matters
provides an important introduction to the analysis of contemporary international commercial
arbitration, in particular, this review identifies some of the principal themes and objectives of
international commercial arbitration and places contemporary developments in context. A
historical review also underscores the extent to which international state-to-state and
commercial arbitration developed in parallel, with similar objectives, institutions, and
procedures.

➢ Historical Development of International Arbitration Between States

The origins of international arbitration are sometimes traced, if uncertainty, to ancient
mythology, Early occasions of dispute resolutions among the Greek divine beings, in issues
at any rate apparently worldwide by then-winning measures included disputes among
Poseidon and Helios over the responsibility for (which was supposedly part between them by
Briareus. a monster),' Athena and Poseidon over possession of Angina (which was granted to
them in like manner by Zcusy and Hera and Poseidon over responsibility for (which was
granted totally to Hera by Inachus, a legendary lord of Argos). Egyptian folklore offers

comparable records of awesome arbitrations, including a dispute among Seth and Osiris,
settled by That (he who chooses without being partial)."

Aside from proposing Poseidon's diligent issues with his companions, these myths tempt
elucidation, maybe beyond what they can reasonably hold up under. In addition to other
things, the different results of these different "cases" on the double recommend and negate
pictures of arbitration as an unadulterated trade-off.' while the job of unbiased people (or
goliaths) in settling disputes among divine beings' insights at the arbitrator's fair-minded,
adjudicatory capacity and the standard of law.

a) Inter-State Arbitration in Antiquity

Deities aside, international arbitration was a favoured means for peacefully settling disputes
between states and state-like entities in Antiquity: “arbitration is the oldest method for the
peaceful settlement of international disputes.1 The historical scholarship provides no clear
conclusions regarding the first recorded instance of international arbitration between states
(or state-like entities). In the state-to-state context, some cite what contemporary reporters
would denominate as The case of Lagash v Umma, apparently settled in 2550 B.C. by King
Mesilim of Kish or the 2100 13.C. case of Ur v. Lagash, in which the King of Uruk ordered
one city to return territory seized by force from another. Others look to two disputes decided
in the eighth century B.C. by Eriphyle, a noblewoman. over Argos’s plans to wage war on
Thebes, a 650 B.C. dispute between Andros and Chalcis over possession of a deserted city," a
controversy between Athens and Megara in 600 B.C. over the island of Salamis,' or a 480
B.C. controversy between Corinth and Corcyra over control of Leucas.

Scholars are uniform in inferring that the ancient Greeks as often as possible turned to
international arbitration to determine disputes between city-states. In one authority's words,
"arbitration was utilized all through the Hellenic world for five hundred years."

This incorporated the successive consideration of arbitration provisions in state-to-state
treaties, accommodating indicated types of arbitration to determine future disputes that may
emerge under the arrangement, just as accommodation concurrences with respect to existing
"between state" disputes.

1 Gary Born, International Commercial Arbitration Volume I, 9

The methodology utilized in numerous ancient arbitrations between Greek city-states would
not be new to contemporary litigants? The parties were represented by agents, who went
about as advice (in a dispute among Athens and Megara, Solon spoke to the previous): the
parties exhibited narrative proof and witness declaration (or sworn observer explanations);
oral contention was introduced through insight, with time limits being forced on direction's
contentions; and the arbitrators rendered written, signed and reasoned awards.

It is additionally clear, notwithstanding, that the term "arbitration" incorporated a scope of
dispute resolution mechanisms. some of which show up sensibly firmly identified with
contemporary international arbitration, while others contrasted in considerable ways.

One aspect of ancient state-to-state arbitration that would strike contemporary observers as
unusual were the number of arbitrators: although most tribunals apparently consisted of three
members, there were instances where tribunals consisted of large numbers (variously, 600
Milesians, 334 Larissaeans, and 204 Cnidians) which arguably reflect a quasi-legislative,
rather than adjudicatory. function. Other “arbitrations” appear to have been more in the
nature of non-binding mediation, or political consultation, then true arbitration.

Arbitration was also used to settle disputes between state-like entities during the Roman age.
Although commentators observe that the use of arbitration declined from Hellenic practice, it
was by no means abandoned. Territorial units of Rome, as well as vassal states and allies,
appealed to the Roman Senate, to Roman proconsuls, or to other Roman institutions for
“arbitral” decisions or the appointment of arbitrators to resolve territorial and other disputes.
In general, however, the historical record indicates that Rome preferred political or military
solutions, within the Empire, to inter-state arbitration or adjudication.

b) Inter-State Arbitration in the Middle Ages

After an apparent decline in usage under late Roman practice, international arbitration
between state-like entities in Europe experienced a revival during the Middle Ages. Although
historical records are incomplete, scholars conclude that international arbitration “existed on
a widespread scale” during the Middle Ages, that “the constant disputes that arose in those
warlike days were very frequently terminated by some kind of arbitration,” and that “it is
surprising to learn of the great number of arbitral decisions, of their importance and of the
prevalence of the ‘clause compromissoire. The states of the Swiss Confederation and the

Hanseatic League.2 as well as German and Italian principalities, turned with particular
frequency to arbitration to settle their differences, often pursuant to agreements to resolve all
future disputes by arbitration. Determining the precise scope and extent of international
arbitration between states or state-like entities during the Medieval era is difficult, in part
because a distinction was not always drawn between judges, arbitrators, mediators and
amiable compositeurs. Indeed, of the most famous “arbitrations” of the age – Pope Alexander
VI’s division of the discoveries of the New World - appears not to have been an arbitration at
all, but rather a negotiation or mediation. On the other hand, numerous treaties throughout
this period drew quite clear distinctions between

arbitration (in the sense of an adjudicative. binding process) and conciliation or mediation (in
the sense of a non-binding procedure).

Again, the procedures used during arbitral proceedings in medieval times bore important
resemblances to those used today. Both parties presented arguments through counsel,
evidence and testimony were received by the tribunal, the tribunal deliberated and a written
award was made. There is even evidence that written briefs were a standard element of
interstate arbitral procedures. Parties appear to have placed importance on the prompt
resolution of their disputes, including by imposing time limits in their agreements on the
arbitrators’ mandates. And, if a

losing party flouted the arbitrator's decision, the arbitrator or another authority was
sometimes empowered to impose sanctions to enforce compliance.3

During the 16th, 17th and 18th centuries. the popularity of international arbitration as a
means of resolving state-to-state disputes apparently declined significantly. Although by no
means entirely abandoned, the rising tide of nationalism apparently chilled historic reliance
on arbitration: “nor is arbitration the immediate jewel of Tudor souls.” It was only at the end
of the 18th century, with Jay's Treaty between the newly-founded United States and Great
Britain (discussed below), that international arbitration in the state-to-state context saw a new
resurgence.

c) Inter-State Arbitration in the 18th and 19th Centuries

2 J. Ralston, International Arbitration from Athens to Locarno 176-77 (1929)
3 J. Ralston, International Arbitration from Athens to Locarno 187-188 (1929) (discussing penalty bonds,
undertakings, and the possibility that violators of arbitral awards might be excommunicated by the Pope).

Great Britain's North American colonies appear to have embraced inter-state arbitration from
at least the moment of their independence. The 1777 Articles of Confederation provided a
mechanism for resolving inter-state disputes between different American states, through what
can only be categorized as arbitral procedures.

More significantly, “the modern era of arbitral or judicial settlement of international disputes,
by common accord among all writers upon the subject, dates from the signing on 19
November 1794 of Jay’s Treaty between Great Britain and the United States.” Among other
things, in a determined effort to restore amicable relations between the United States and
Great Britain, Jay’s Treaty provided for the establishment of three different arbitral
mechanisms, dealing with boundary disputes, claims by British merchants against U.S.
nationals and claims by the U.S. citizens against Great Britain. This was a remarkable step,
between recent combatants, which ushered in what can only be regarded as a new age of
inter-state arbitration.

The United States continued its tradition of arbitrating international disputes throughout the
(9th century. It included an arbitration clause (albeit an optional one) in the 1848 Treaty of
Guadalupe Hidalgo, which provided for resolution of future disputes between the United
States and Mexico “by the arbitration of commissioners appointed on each side, or by that of
a friendly nation. The United States did the same in the 1871 Treaty of Washington with
Great Britain, providing the basis for resolving a series of disputes provoked by the Civil
War; the Treaty provided for arbitration of the disputes before a five-person tribunal, with
one arbitrator nominated by each of the United States and Great Britain, and three arbitrators
nominated by neutral states. The United States and Great Britain also repeatedly resorted to
arbitration to settle various boundary and other disputes during the 19th and early 20th
centuries.

Agreements to arbitrate in the Americas were not limited to issues including the United
States. On the contrary, between 1800 and 1910, some 185 separate treaties among Latin
American states included arbitration clauses, managing everything from financial cases to
limits, to general relations. For instance, an 1822 agreement between Colombia and Peru,
which was proposed to "draw all the more intently the bonds which ought to in future join the
two states," gives that "a general get together of the American states will be assembled ... as
an umpire and conciliator in their disputes and contrasts." Moreover, numerous Latin

American states occupied with between state arbitrations emerging from quarrelsome limit
disputes acquired from pioneer periods, which the questioning parties submitted to a remote
sovereign or commission for goals. Arbitration of such issues was not constantly effective,
particularly when the disputed domain was wealthy in common assets or minerals and limit
disputes now and again required extra arbitrations to decipher an initial award.
ARBITRATION DISTINGUISHED FROM OTHER FORMS OF DISPUTE
RESOLUTION
Basically there are three types of dispute resolution:

I. Mediation: Mediation is an ADR process where an independent third party, the
mediator, assists the people in dispute to identify the disputed issues, develop options,
consider alternatives and try to reach an agreement.

However, the mediator does not give their advice or opinion about the issues or have
any role in deciding the outcome of the mediation.

➢ The process of mediation:
A mediation session is generally an organized, eye to eye meeting with all the
people in dispute and one or more mediators.
At mediation, you will, for the most part, be approached to talk straightforwardly
to the others engaged with the dispute and may likewise have separate sessions
with the mediator. There will more often than not be breaks for every individual to
think about the dialog and get counsel or backing on the off chance that they need
it.
Mediation might be intentional, court-ordered or required as a component of an
agreement. It might likewise be a part of a court or government agency process.

➢ Role of the mediator:

The mediator will:

✓ clarify the mediation procedure and set the guidelines for how it will
function

✓ guarantee every individual gets an opportunity to talk, be heard and
react to the issues

✓ keep everybody concentrated on conveying and settling the dispute
✓ make inquiries to help individuals recognize and convey about what

their objectives and wants are and why they feel that way
✓ help clear up the issues and recommend methods for talking about the

dispute
✓ help the general population in dispute create alternatives and think

about whether conceivable arrangements are sensible
✓ attempt to help the parties to achieve an assertion where proper and

ensure everybody sees any understanding came to
✓ allude you to other supportive administrations whenever required.

The mediator will not:

❖ favor one side, settle on choices or suggest solutions - this is for you
and alternate participants to do

❖ reveal to you what you ought to consent to do - you choose what to do,
including whether to remain at mediation

❖ decide who is right or wrong - the emphasis is on finding a solution
that everybody can live with, not making a judgment

❖ give legal, budgetary or other master guidance - you can get counsel
previously, amid and after mediation in the event that you pick

❖ give advising - you can get directing or other help previously, amid
and after mediation in the event that you pick.

While most mediation sessions are held face-to-face, in some circumstances sessions can be
held over the telephone. Another option is shuttle mediation, where the people in dispute sit
in separate rooms and the mediator speaks to them separately and acts as a messenger
between them.

➢ Suitability of mediation:

Mediation may be suitable if you:

✓ feel comfortable and safe having a conversation with the others
involved

✓ need a third individual to help the dialog
✓ need to settle on the choice yourselves
✓ need to keep up the most ideal continuous association with alternate

participants
✓ need to control the result, instead of asking another person to choose

the result
✓ need to keep discourses secret
✓ need to discover innovative answers for an issue.

II. Conciliation: Conciliation is an ADR process where an independent third party, the
conciliator, helps people in a dispute to identify the disputed issues, develop options,
consider alternatives and try to reach an agreement.

A conciliator may have professional expertise in the subject matter in dispute and will
generally provide advice about the issues and options for resolution. However, a
conciliator will not make a judgment or decision about the dispute.

Conciliation may be voluntary, the court ordered or required as part of a contract. It is
often part of a court or government agency process.

➢ The process of conciliation:

The role of conciliators is like that of mediators aside from that the
conciliator may likewise:

✓ have pro learning and give you some legal data
✓ propose or give you alternate participants master guidance on the

conceivable alternatives for dealing with the issues in your dispute
✓ effectively support you and alternate participants to achieve an

assertion.

The conciliator will not:

❖ favor one side or decide
❖ reveal to you what choice to make, despite the fact that they may make

suggestions
❖ choose who is right or wrong
❖ provide counseling.

Conciliation is generally held face to face so you can converse with one another specifically.
Be that as it may, you may likewise have separate sessions with the conciliator.
In some cases, the conciliator can go about as a 'messenger' by conversing with you and
alternate participants independently and imparting thoughts or proposition between you. It is
likewise conceivable to hold conciliation sessions by telephone in a few conditions.

➢ Suitability of Conciliation:

Conciliation is likely to be suitable if:
✓ need to achieve a concession to some technical and legal issues
✓ need help with the procedure
✓ need to settle on the choice with alternate participants involved
✓ need advice on the facts in your dispute.

Conciliation may likewise be reasonable on the off chance that you have attempted mediation
and still can't achieve a concurrence with alternate participants.

III. Arbitration: Arbitration is an ADR process where the parties present arguments and
evidence to an independent third party, the arbitrator, who makes a determination.
Arbitration is particularly useful where the subject matter is highly technical, or where
the parties seek greater confidentiality than in an open court.

Arbitration may be voluntary, ordered by the court or required as part of a contract.

➢ The process of arbitration:

Arbitration can be a significantly more formal and organized procedure than
mediation or conciliation. Here and there, it is increasingly like a court, in
light of the fact that toward the finish of the session the authority settles on a
coupling choice.

A portion of the primary contrasts among arbitration and different types of
ADR, for example, mediation and conciliation, include:

✓ the general population in dispute need to concur before the procedure
that the judge's choice will tie and enforceable

✓ there is a lot more prominent need to create proof or actualities
✓ there might be one mediator or a gathering of authorities to hear your

dispute
✓ the judge might be a pro in the topic of the dispute or have legal

qualifications
✓ toward the finish of the procedure, the judge will settle on a choice for

the parties.
On the off chance that an arbitrator settles on a choice you are not content with, you may
most likely appeal to a court or other higher authority. Be that as it may, this might be

troublesome and expect you to point to specific issues with the choice, for example, it is one-
sided or uncalled for. In the event that you have inquiries regarding the coupling idea of
arbitration, you ought to get legal advice.

➢ Suitability of arbitration:

Arbitration can be particularly useful where mediation or conciliation have not
led to an agreement or if you want a process where a decision is made for you,
but is confidential and generally cheaper and quicker than going to court.

TYPES OF ARBITRATION

I. Ad hoc Arbitration: Ad hoc Arbitration is a procedure that isn't administered
by others and expects parties to make their own arrangements for selection of
arbitrators. The parties are under carefulness to pick designation of guidelines,
applicable law, strategies, and administrative help. Procedures under ad hoc
mediation are increasingly adaptable, less expensive and quicker than an
administered proceeding. The absence of administrative fees alone makes ad
hoc arbitration a mainstream choice.

II. Institutional Arbitration: An institutional arbitration is one in which a
specific institution with a perpetual character intercedes and expect the
elements of helping and overseeing the arbitral procedure, as given by the
principles of that institution. It is appropriate to take note of that these
institutions do not arbitrate the dispute, it is the arbitrators who arbitrate, thus
the term arbitration institution is unseemly and just the principles of the
institution apply.

In institutional arbitration, the principal issue emerging for agreement of the
parties is a choice of the institution, fitting for the purposes of disputes,
emerging out of their agreement. While settling on such decision, there are
different components to be considered for example nature and commercial

estimation of the dispute, principles of the institution as these guidelines
contrast, past record and notoriety of the institution and furthermore that the
institutional standards are tuned in to the most recent advancements in
international business arbitration practice.

III. Documents Only Arbitration: The Documents-Only Review arbitration is
when arbitration will continue without an oral hearing. Rather, an arbitrator
assigned to the case will audit all of the documents put together by the two
parties and go to a decision for the case dependent on the documents and no
oral testimony introduced or cars produced for review. The documents are the
sole determiner of the result of a "Documents-only" arbitration.

A case can only proceed as a Documents-Only arbitration when the
responding party (the financial organization/manufacturer/merchant) agrees to
consent to a documents-only review in lieu of an oral hearing. The consumer
can continue as a "Documents-Only Review" on the Intake Application, yet in
the event that the responding party does not agree, at that point, the arbitration
will continue as an oral hearing where the parties show up face to face.

IV. Fast-track Arbitration: The term fast-track arbitration, or accelerated
arbitration, is commonly used to describe arbitration proceedings that are
conducted within specified time limits based on a relating agreement between
the parties. While fast-track proceedings can entail substantial pressure on the
parties, counsels, and arbitrators involved, they also usually reduce the time
taken from the initiation of the proceedings until the rendering of an award by
the arbitral tribunal and thereby serve as a means of achieving a settlement of
the dispute within a shorter period of time. Several arbitral institutions to some
extent offer specific rules for fast-track proceedings. These rules are usually
applied by virtue of an explicit agreement by the parties or due to the
fulfilment of specific criteria such as a maximum amount in dispute.