Mason on Societe SNF - SAS v. Chambre de Commerce International
In Société SNF - SAS v. Chambre de Commerce International, the Paris Tribunal de Grandes Instances confronted the question of which set of rules of the arbitral institution are applicable (those in effect at the time the business agreement is signed or those in effect at the time of arbitration) where the arbitration clause is silent on the matter. This Expert Commentary, written by international arbitrator and business lawyer Paul E. Mason, discusses the court's resolution of this issue and its impact on international arbitration practice.
Mr. Mason writes: In Société SNF – SAS v. Chambre de Commerce International, the Paris Tribunal de Grandes Instances (TGI) (French court handling large cases) upheld an arbitral institution’s exclusion of liability provision in its rules despite the fact that this provision was not in effect at the time the parties entered into the business agreement containing the arbitration clause. The Court found that when the parties’ contract does not speak to the issue, the applicable rules of the arbitral institution are those in effect as of the date the arbitration claim is filed, rather than those in effect at the time the parties signed their agreement.
Arbitration clauses come in many forms and flavors. In most cases, the arbitration clause in the parties’ business agreement will call for arbitration under the rules of one of the well-known arbitration institutions such as the International Chamber of Commerce (ICC), International Centre for Dispute Resolution (ICDR) of the American Arbitration Association, the London Court of International Arbitration (LCIA), or another organization. In fewer cases, the parties may arrange for unadministered (ad hoc) arbitrations. In either case, the arbitration clause may stipulate as to certain items, such as: (i) what subject matter may be arbitrated; (ii) any prerequisite steps to arbitration; (iii) where the arbitration will be held and in what language; (iv) the number of arbitrators who will review the claims (one or three, normally); and (v) the qualifications of the arbitrator(s).
A typically well-drafted arbitration clause will cover these points at a minimum. It will also specify which set of the chosen arbitral institution’s rules shall be applied. Certain institutions have different sets of arbitration rules depending on the nature of the dispute to be arbitrated. Not only that, these rules are amended from time to time, so it is also important to specify in the arbitration clause which rules (as amended at which point in time) should be applied to the case. Failing to make such specifications, could lead to adverse consequences for your client, as illustrated in Société SNF – SAS v. Chambre de Commerce International.