Appellate Level

One of the most common criticisms against arbitration is the inability to appeal a final arbitral award. Although it is possible for a party to file a motion in court for the cancellation of the arbitral award, this may only be done pursuant to one of the grounds set forth in Section 24 of the Arbitration Law (1968). The grounds for cancellation are construed narrowly, and, as is well known, courts do not readily interfere with arbitral awards.

In order to find a proper solution to this problem, the IICA decided to establish an appellate level of a single arbitrator or a panel of three arbitrators, the jurisdiction of which would be to consider the appeal of the original arbitral award. Under the new Arbitration Rules of the IICA, which entered into force on the 28th of September, 2004, the parties may agree — prior to the commencement of the arbitration proceeding — that the arbitral award will be subject to an appeal before the appellate level. The parties may also agree that the appeal is to be heard by a single arbitrator or by a panel of three arbitrators. Pursuant to rule 11 of the Arbitration Rules, the president of the IICA will appoint the arbitrator or the panel of arbitrators, as an appellate level in all respects.

The filing of an appeal and the grant of an arbitral award by the appellate level will not interfere with the right of the parties to later file a motion with the court for the cancellation of the appellate arbitral award, pursuant to one of the grounds set forth in Section 24 of the Arbitration Law.

Many in the legal community are of the view that the establishment of an appellate level for arbitral awards will encourage and motivate litigants and lawyers to turn to the IICA and prefer it over the often extended and cumbersome court proceedings.