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Parties to disputes are increasingly resorting to arbitration and other forms of dispute resolution such as mediation, mini- trial... The reasons for this can mainly be found in the benefits offered by these proceedings, including speed, confidentiality and the competence of the arbitrators and mediators involved.
CEPANI, the Belgian Center for Arbitration and Mediation, was founded in 1969 with the ambition to study and promote international arbitration. Since then, CEPANI has extended its range of action to include other forms of dispute resolution. Today - in its capacity as recognized arbitration and mediation center – it strives to offer businesses and private individuals efficient and competent means for resolving disputes. To this end, it has drafted various sets of rules, including rules on resolving Internet .be- domain name disputes and other topical issues. It also closely monitors those proceedings in which it is involved, supervising their quality, speed and efficiency.
BENEFITS OF ARBITRATION
What is arbitration?
Arbitration is a form of dispute resolution in which the parties agree to submit their dispute to an arbitral tribunal consisting of three persons. The arbitral tribunal then issues a decision, a binding arbitral award based on the statements made by the parties. If necessary, the arbitral award can be enforced.
S p e e d
A CEPANI arbitration procedure lasts eight months to one year, in average. The reason for this can be found in the elimination of an appeals procedure, the simplified proceedings and the availability and expertise of arbitrators.
C o n f i d e n t i a l i t y
In contrast with legal actions, the arbitration proceedings are strictly confidential. The arbitrators are bound to secrecy, the parties are heard in camera and the arbitral award will only be published with the consent of the parties.
C o s t
The cost of CEPANI arbitration proceedings is calculated according to a schedule of costs based on the financial value of the proceedings. In other words, the parties can estimate prior to the beginning of the procedure how much the arbitration will cost. Eliminating the possibility of appeal and simplifying the procedure also lowers costs.
C l i m a t e o f c o n f i d e n c e
The arbitration proceedings generally take place in a climate of confidence that protects the relationship between the parties.
What kind of disputes can be settled by arbitration?
Arbitration can be used in most cases, including:
- financial, commercial and industrial disputes;
- disputes between partners;
- disputes in the construction sector or involving co-ownership;
- disputes involving the liquidation of communities and estates;
- disputes involving professional liability.
Resort to arbitration can be included in an agreement or contract by inserting an arbitration clause referring to the CEPANI Rules.
Why institutional arbitration?
When parties agree to have their dispute resolved through arbitration, they can opt for "ad hoc" arbitration or to have an institution, such as CEPANI, handle the arbitration proceedings (institutional arbitration).
In ad hoc arbitration the parties or the arbitrators themselves manage the arbitration proceedings. If any problems arise, then the matter must be referred to the ordinary courts and the arbitration proceedings will therefore be interrupted. The parties involved pay the arbitrators their fees and expenses directly.
Institutional arbitration has the advantage that reference is made to a set of rules, thereby enhancing legal certainty. Moreover the reference to arbitration rules allows the arbitration to proceed without interruption to an arbitral award.
CEPANI also provides legal advice on the course of the proceedings. On the other hand, there is compensation for the administrative costs of the arbitration institution.
CEPANI is a recognized center for arbitration and mediation in Belgium today. Unlike other arbitration centers, CEPANI is not rooted in any region or sector. It is a national, cross-sectoral center with an international profile. It operates throughout Belgium and beyond the country’s borders. One-fourth of all CEPANI arbitration proceedings is international.
The members of CEPANI are mainly lawyers, professors, notaries, business leaders and legal experts.
CEPANI itself does not serve as an arbitrator. Its role consists in appointing competent, diligent and independent arbitrators and overseeing the progress of the proceedings by resolving, if necessary, any legal and material difficulties facing the parties.
CEPANI will therefore, if necessary: (1) check whether there is a clear arbitration agreement; (2) take a decision on the number of arbitrators who will sit on the arbitral tribunal; (3) appoint arbitrators; (4) take decisions on any challenge made against the arbitrators; (5) ensure that the arbitrators comply with the CEPANI Rules and replace any arbitrators if necessary; (6) determine the place of arbitration; (7) define and extend deadlines; (8) determine the arbitration costs; (9) notify the arbitral award.
CEPANI is also actively involved in studying and promoting arbitration.
The CEPANI Secretariat
The CEPANI secretariat monitors arbitration files. It sets deadlines and extends them if necessary, calculates the advances towards arbitration costs, informs the parties of the arbitral award and ensures –at the request of one of the parties– that the award is registered with the clerk of the court.
Pursuant to the CEPANI Rules the arbitral tribunal consists of one or more arbitrators.
In instances where one arbitrator must be appointed, then the Appointments committee or chairman of CEPANI will appoint that arbitrator unless otherwise agreed by the parties. For the appointment of a three-member arbitral tribunal, each party will appoint one arbitrator, subject to approval by the Appointments committee or chairman of CEPANI. The Appointments committee or chairman of CEPANI will appoint the chairman of the arbitral tribunal. In cases where the number of arbitrators is not specified, the dispute will be settled by one arbitrator, except when one of the parties requests the appointment of three arbitrators or when the Appointments committee or chairman of CEPANI decides to appoint three arbitrators ex officio.
CEPANI does not have a list of arbitrators that are to be appointed, thereby ensuring that the parties have the greatest degree of flexibility in making their choice. Arbitrators involved in CEPANI arbitration proceedings must be independent and impartial towards the parties and their counsel. They must also agree to and comply with a certain number of rules of good conduct decreed by CEPANI.
Overseeing the progress of the proceedings
CEPANI oversees the progress of the arbitration proceedings, from the initial request to the making of the arbitral award.
In accordance with the CEPANI Rules, the arbitral tribunal must draft terms of reference (TOR) within two months of receiving the file. The "terms of reference" is a document that defines the framework within which the arbitrators must operate. They are established at the beginning of the CEPANI arbitration procedure and they enable to settle a number of practical problems, such as the language and place of arbitration. Pending arbitration files are constantly followed. CEPANI ensures that arbitration proceedings are not needlessly lengthened and that the Rules are followed. To this end, the secretariat is sent a copy of all correspondence between the parties and a copy of exchanged memos and conclusions.
Assessing arbitrators' fees
In CEPANI arbitration proceedings, the arbitrators’ fees are set by the CEPANI secretariat. Upon receipt of the request for arbitration, the secretariat determines the advance towards arbitration costs on the basis of the amount of the claim and pursuant to the schedule of fees set out in the Rules. The arbitration costs includes the arbitrators’ fees and costs,
as well as CEPANI’s administrative costs. At the end of the procedure, the final arbitration costs are calculated by the CEPANI secretariat. As a rule, the advance covers the arbitration costs.
In other words, the arbitrators are not compensated on the basis of an hourly rate and have no input in setting their fees.
The fact that the arbitration costs are based on the amount of the claim also discourages the submission of unrealistically high claims and counterclaims.
Making and registering of the arbitral award
Once the arbitral award has been made, the arbitral tribunal forwards it to the CEPANI secretariat, which then informs the parties and their counsel.
At the request of a party, CEPANI will also register the arbitral award with the clerk of the court of first instance.
THE ARBITRATION CLAUSE
CEPANI arbitration is only possible if both parties have agreed to such arbitration in writing.
CEPANI advises parties to include the following standard clause in agreements and contracts:
"All disputes arising out of or in relation with this agreement shall be finally settled under the CEPANI Rules of Arbitration by one or more arbitrators appointed in accordance with those Rules."
The following provisions may be added to this clause:
"The arbitral tribunal shall be composed of (one) or (three)
"The seat of the arbitration shall be (town or city)."
"The arbitration shall be conducted in the (…) language."
"The applicable Rules of law shall be the (…)."
FROM REQUEST FOR ARBITRATION TO THE FINAL AWARD
Here you can download a schematic overview
The Request for arbitration and documentary evidence is sent to the CEPANI secretariat in as many copies as arbitrators
appointed (i.e. 1 or 3). An additional copy is added for the CEPANI secretariat, making a total of 2 or 4 copies. When a
request is made to appoint a three-member arbitral tribunal, the name and all particulars of the nominated arbitrator must
be included in the request.
Upon receipt of the request, CEPANI will calculate the advance towards arbitration costs in accordance with the
schedule of fees for arbitration. (for an example see further) The advance is split equally by the claimant and respondent.
Both parties are asked to pay their share of the advance within one month.
The respondent has one month to formulate an Answer to the request for arbitration. The answer must be viewed as an initial summary reaction to the request. The answer must clearly state whether or not the respondent agrees to the number of arbitrators, the language and the place of arbitration. If the parties would like to have a three-member arbitral tribunal appointed, the respondent must include in its answer the name and full particulars of the arbitrator that it nominates. Any counterclaims must also be formulated in the answer.
If all deadlines are met, then the answer from the respondent will be received and the advance paid within one month of submission of the request for arbitration.
Once the advance towards arbitration costs has been paid in full, the Appointments Committee or the Chairman of CEPANI will appoint the arbitral tribunal. Upon appointment, the CEPANI secretariat will hand over the
full arbitration file (proceedings and documentary evidence) to the members of the arbitral tribunal. If, during the course of the proceedings, the claim is extended or if a counterclaim is submitted, the CEPANI secretariat can increase the advance towards arbitration costs.
The first task of the arbitral tribunal is to draft the Terms of Reference and a Timetable of Proceedings. The Terms of Reference are the base document for the arbitration proceedings. In the Terms of Reference the arbitral tribunal describes its task by, inter alia, sketching out a picture of the dispute to be resolved (circumstances, positions
of the complainant and respondent, the areas of dispute to be resolved, etc.). The Terms of Reference must be signed by the parties and the members of the arbitral tribunal. The date of the Terms of Reference beginning of the deadline for making the arbitral award. The Timetable of Proceedings stipulates the further progress of the proceedings (deadlines for exchanging memorandums and the date for oral pleadings) and is devised by the arbitral tribunal in conjunction with the parties. CEPANI is informed of this and will take account of the Timetable of Proceedings when setting deadlines for making the arbitral award.
In principle, CEPANI will give the arbitral tribunal 4 months after the date of the Terms of Reference to make the arbitral award.
The arbitral tribunal forwards the arbitral award to the CEPANI secretariat in as many original versions as there are parties involved, plus one original version for the Secretariat. The Secretariat shall notify the Award to the parties.
The arbitral award is final and not subject to appeal. The parties undertake to enforce the arbitral award immediately
CALCULATION OF THE ADVANCE ON ARBITRATION COSTS (example)
An Arbitration proceeding with a total financial value of 250.000 EUR is submitted. The parties request the appointment of a three arbitrators.
The advance on arbitration costs can be calculated as follows:
Applicable scale 100.001 EUR to 500.000 EUR
Minimum: 3.000 EUR + 1,5% of the amount exceeding 100.000 EUR
3.000 + 1,5% of (250.000 - 100.000)
3.000 + 1,5% of 150.000
3.000 + 2.250
Maximum: 6.000 EUR + 1,5% of the amount exceeding 100.000 EUR
6.000 + 1,5% of (250.000 - 100.000)
6.000 + 1,5% of 150.000
6.000 + 2.250
Selected advance on arbitration costs 6.750,00 EUR
10% of the advance on arbitration costs (675,00 EUR) plus 21% VAT (141,25 EUR)
TOTAL ADVANCE ON ARBITRATION COSTS IS 7.566,75 EUR to be multiplied by 2,5 for three arbitrators is
ARBITRATION FOR DISPUTES INVOLVING LIMITED FINANCIAL CLAIMS
For minor disputes CEPANI has a procedure that is faster and less expensive than disputes involving larger financial claims. CEPANI considers small disputes to be those where the main claim and any counterclaim together do not exceed 12,500 EUR. Even if, in the course of the proceedings, the main claim and counterclaim together exceed of 12,500 EUR, the faster procedure for minor disputes will apply, unless agreed otherwise by the parties.
The faster procedure has the following conditions:
There is always just one arbitrator.
In principle, the cost is between 625 and 1,250 EUR.
The procedure is generally handled in writing.
The procedure is simplified: no Terms of Reference.
The deadlines are shorter: the entire procedure, from submission of the request for arbitration to the making of the arbitral award, may not exceed 112 days.
BINDING THIRD-PARTY DECISION FOR INTERNET DOMAIN NAME DISPUTES
DNS BE, the Belgian domain name registration organization, has commissioned CEPANI to resolve .be- domain name disputes. To this end, CEPANI has drawn up ad hoc rules describing the various phases of the procedure. The proceedings are characterized by their notable speed and by the fact that they take place online, generally without the parties having to appear before the Third-party decider who is responsible for settling the dispute. The decisions taken by Third-party deciders are published on the CEPANI web-site and forwarded to DNS BE. DNS BE then implements the decisions by removing a domain name or transferring it to the complainant, except when, within a period of 30 working days after the decision, a legal decision orders the postponement or transfer of the domain name.
The Third parties that CEPANI appoints to resolve domain name disputes are selected from a regularly updated list of experts. This list can be found on the CEPANI web-site.
The procedure costs 1.620 EUR. This amount must be paid by the complainant at the start of the procedure.
OTHER FORMS OF ALTERNATIVE DISPUTE RESOLUTION
With a mini-trial procedure, a mini-trial committee is assembled to which each party delegates a senior representative (assessor). CEPANI appoints an independent, neutral third party as Chairman of the mini-trial Committee. The assessors must be authorized to make binding commitments on behalf of their company, so that they can immediately agree to a possible settlement to the dispute. The Chairman of the mini-trial Committee has the greatest possible leeway in producing an agreement between the parties. To this end, the Chairman of the mini-trial Committee consults - jointly or separately with the assessors.
The mini-trial guarantees absolute confidentiality in the event that the consultation procedure fails to produce an agreement.
The parties split the costs evenly, unless otherwise agreed.
If the parties to a dispute wish to have the assistance of a third party in order to reach a settlement by mediation, CEPANI will appoint a mediator who will submit a proposal to settle amicably their dispute. The mediator is bound to secrecy.
The parties split the costs evenly, unless otherwise agreed.
If the parties have technical problems of any kind whatsoever, they can call on CEPANI to perform a technical expertise. The technical expertise can help achieve an amicable settlement between the parties or can provide a number of definite data that might be applied in subsequent arbitral or legal proceedings. Generally speaking, the findings and conclusions of the expert bind the parties. However, they can decide to consider them solely as advice.
The costs of this procedure are determined in accordance with the circumstances of the case, the nature of the assignment and the number of experts involved. The parties split the costs evenly, unless otherwise agreed.
Adaptation of contract
When there are changes in the original circumstances under which a complex, long-term agreement was concluded, it may be necessary to review the agreement. CEPANI appoints an independent third party, either to make a recommendation to the parties or, with their prior agreement, to formulate a final, binding rule.
The costs of these procedures are calculated in accordance with the circumstances of the case. The parties split the costs evenly, unless otherwise agreed.