UNCITRAL is the short version of The United Nations Commission on International Trade Law and plays a key role in developing that framework in pursuit of its mandate to further the progressive harmonization and modernization of the law of international trade. UNCITRAL does this by preparing and promoting the use and adoption of legislative and non-legislative instruments in several areas of commercial law.

Types of arbitration are generally listed as ad hoc arbitration and institutional arbitration. UNCITRAL Arbitration Rules may be regarded as a hybrid form of arbitration.

The UNCITRAL Arbitration Rules were issued by UNCITRAL in 1976 as an alternative to institutional arbitration. UNCITRAL’s purpose was to provide an alternative option to well-known arbitration institutions. The UNCITRAL Arbitration Rules were amended in 2010 in order to keep up with the changes in arbitration practice.

The main differentiating point of UNCITRAL Arbitration Rules is that UNCITRAL is not an arbitral institution. In other words, UNCITRAL only provides parties with a set of rules which they may use if they like; but it does not administer the arbitral proceedings like ICC. This is why UNCITRAL Arbitration Rules are considered to be a hybrid between ad hoc and institutional arbitration; there is a set of rules to be applied but there is not an institution to administer the proceedings.

UNCITRAL Arbitration Rules can be regarded as great success. Most of the dispute resolution clauses in recent Bilateral Investment Treaties (BITs) refer to these rules. Apart from the BITs, most of the parties who wish to have a bespoke arbitral regime prefer to adopt and amend the UNCITRAL Arbitration Rules as they can be amended in ways that the arbitration rules of the best-known institutions cannot be amended.

UNCITRAL Arbitration Rules 1(1): “(…) in accordance with these Rules subject to such modification as the Parties may agree.”

Below is the standard arbitration clause contained in UNCITRAL Arbitration Rules (2010):

“Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules.”

Note: Parties should consider adding:

(a) The appointing authority shall be … [name of the institution or person];

(b) The number of arbitrators shall be … [one or three];

(c) The place of arbitration shall be … [town and country];

(d) The language to be used in the arbitral proceedings shall be ….

On 19 September 2021, Expedited Arbitration Rules also came into force as an appendix to UNCITRAL Arbitration Rules. Expedited Arbitration has been increasingly preferred by parties which demand to reach a resolution in a time and cost-effective manner. Unlike other set of rules, UNCITRAL Expedited Rules do not have a monetary threshold to be applied automatically. In principle, expedited procedure stipulates to have a sole arbitrator due to its cost-effective nature. For the same reason, the time determined by Article 16 of the Expedited Rules for rendering the arbitral award is six months from the constitution of the arbitral tribunal, unless the parties agree otherwise.  However, in contrary, Article 15 of the Expedited Rules gives broad discretion to the arbitral tribunal regarding the production of documents and which evidence can be considered. This broad discretion may cause some enforceability issues and therefore, cost time and money for the parties.

For any further information and professional legal assistance regarding arbitration and UNCITRAL Arbitration Rules, please do not hesitate to contact Erkan Attorney Partnership.

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