ARTICLES / PRESS

Geneva's New Arbitration Center

International Herald Tribune - June 4, 1986
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For thousands of years, traders operating internationally have confronted unfamiliar commercial practices and legal systems. The international arena is full of unexpected risks: one can easily become embroiled in a controversy that ultimately may have to be resolved in a foreign country according to unfamiliar rules.

There are, of course, many protective measures that can be adopted to minimize the risks of exporting goods, settling insurance claims or negotiating financial transactions, freight agreements, real-estate deals, construction projects or industrial ventures abroad. Those most frequently relied upon are :

· Sales against letters of credit, preferably confirmed by prime banks;
· Performance-bond guarantees;
· Inspection certificates issued by leading inspection firms;
· Loan collateral control facilities;
· Financial auditing by reputable international accounting firms;
· Private and/or public insurance schemes;
· Foreign-currency hedging transactions;
· International conciliation or arbitration.

Today, international conciliation and arbitration are among the most reliable methods of resolving transnational business conflicts. They can help contracting parties avoid the risks inherent in the jurisdiction of foreign states, and instead assure them of dealing with each other as equals.
There is a growing demand to settle or arbitrate international business disputes as discreetly as possible, in a neutral setting. To satisfy this growing need, a group of international executives, judges and lawyers recently created in Geneva the Association pour l'Arbitrage International en matière de Commerce et d'Industrie (ARICI). The Association founded the Cour pour l'Arbitrage International en matière de Commerce et d'Industrie (CARICI), and is in the process of establishing Geneva's new International Conciliation Center.

Chairman of ARICI is André Baladi, a Swiss business-development consultant with over a quarter of a century of international experience in industry, banking and trade. Chairman of CARICI is Philippe Cahier, professor of international law at the Graduate Institute of International Studies in Geneva, and a world-renowned jurist with considerable experience in arbitration between sovereign states.

Like many other international arbitration courts, CARICI is relatively diverse. It claims to be capable of handling disputes in any field of business endeavor, for example import-export transactions, financial agreements, industrial ventures, construction projects, insurance schemes and transportation contracts. These disputes may involve both public or private corporations, as well as sovereign states.

The founders of CARICI now are reported to be setting up an international network of qualified arbitrators and experts.



GENEVA NEWS And International Report - Vol.5 - No. 8 - October 1984

By André Baladi
International Business Development Consultant. Chairman of the "Association pour l'Arbitrage International en matière de Commerce et d'Industrie (ARICI)" and Expert of the "Cour pour l'Arbitrage International en matière de Commerce et d'Industrie (CARICI)"
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The "Cour pour l'Arbitrage International en matière de Commerce et d'Industrie (CARICI)" has recently been set up in Geneva by the "Association pour l'Arbitrage International en matière de Commerce et d'Industrie (ARICI)". Since it is the only independent international arbitration court of its kind in Geneva, a better understanding of its scope of activities appears warranted within the larger global framework of the arbitration of international business disputes.
Practically all businessmen operating internationally - whether exporting goods, settling insurance claims or negotiating financial transactions, freight agreements, real estate deals, construction projects or industrial ventures abroad - are at some time confronted with legal systems and commercial practices with which they are not sufficiently familiar. Indeed, the international arena is fraught with unexpected risks, and one can easily become embroiled in a controversy which may ultimately have to be resolved according to alien rules in a foreign country. This type of problem cannot always be solved by lawyers , who may be highly qualified to deal within their own environment but insufficiently versed in international affairs. A classical example could be the case of a transaction between a businessman in a "civil law" country like France with his counterpart in a "common law" country like the U.S.A., where the federal structure characterized by the lack of a unified system can further aggravate the complexity of the situation. Another example could be the case of a contract between this French businessman and an institution in a country with a "centrally planned economy" in Eastern Europe for instance. The problem could be further compounded should this French businessman be dealing in a country applying Islamic law (or Sharia law, based on the Koran), such as Saudi Arabia, for example, where the "Hanbalis " school of Islamic law is practiced.
The question then arises as to whether international law can contribute to solve international business disputes.
To be able to answer this question in a meaningful manner, it appears appropriate to outline the constituents of international law and to position the subject within its historic perspective.
According to Article 38 (I) of the Statue of the International Court of Justice, international law includes : (a) international conventions (treaties), whether general or particular; (b) custom, as evidence of a general practice accepted as law; (c) the general principles of law recognized by civilized nations; (d) judicial decisions and teachings of the most highly qualified jurists of the various nations, as subsidiary means for the determination of rules of law.
Actually, one can wonder whether this definition of international law would not also have been valid some 5,000 years ago, at the time when the scribes of the City of Ebla (close to where Aleppo stands today in Syria) inscribed in cuneiform on clay tablets a treaty detailing commercial relations and double taxation matters between Ebla and the Kingdom of Ashur. We must also remember that the first known recorded legal code in history, composed of 282 articles, was drafted about 4,000 years ago in Babylon, under the rule of King Hammurabi.
Why has the situation not changed much since this ancient Near Eastern legal heritage ?
The fact is that, despite the commendable efforts of both the League of Nations and the United Nations, as well as of their specialized agencies, the world is still divided into independent territorial legal units. The laws of the Province of Ontario in Canada, for instance, are intended to govern the people of this Canadian province practically as if no other legal units or communities existed. As to private international law or conflict of laws, although it may appear to be international, it is a branch of law which is essentially national in character.
As a matter of fact, it could be argued whether we are not currently witnessing a trend towards a fragmentation of the international political scene, resulting in a growing number of antagonistic States governed by groups belonging to a mosaic of different cultural or ideological environments. Some of these States are struggling to restore rights which they feel have been impaired by other States, while the latter feel threatened by the former. Recurring confrontations between all these States tend to erode the concept of trust among nations and to increase the risks of facing litigation whenever conducting international business operations.
There are several protective measures which can be adopted to minimize the risks of conducting business abroad, such as for example :
- sales against letters of credit, preferably confirmed by prime banks,
- performance bond guarantees,
- inspection certificates issued by leading inspection firms,
- loan collateral control facilities,
- financial auditing by reputable international accounting firms,
- private and/or public insurance schemes,
- foreign currency hedging,
- as well as, of course, the insertion of arbitration clauses in contracts.
Indeed, to minimize the risks associated with litigation abroad, the tracts is a must. Actually, international arbitration emerges as the only reliable system to resolve transnational business conflicts, inter alia because it allows contracting parties to remain in principle at a level of equality, by avoiding the risks inherent to the jurisdiction of foreign States.
Arbitration has been used since at least the thirteenth century. A.D. for settling claims in maritime disputes, and since the seventeenth century for settling commercial disputes. Over the years, London became the main international arbitration centre, stemming from the supremacy of England as the largest maritime nation. The Baltic Exchange offered a meeting place for arbitrators and the political stability encouraged the parties to use the English standard forms of contracts usually providing for arbitration in London. Today, London is still a major international arbitration centre, where over 10,000 disputes are submitted every year in shipping (most of them concerning charter-parties and bills of lading), construction and commodities trading. The major commodities arbitration courts have been set up in London by :
- the Federation of Oils, Seeds and Fats Associations (FOSFA)
- and the Grain and Feed Trade Association (GAFTA).
The main characteristic of most of these London based arbitration courts is that their arbitrators are usually chosen among experts in the field in which the litigation occurs.
Another well known international arbitration centre is located in Paris, due to the presence of the Court of Arbitration of the International Chamber of Commerce, which was established about fifty years ago. It recommends to all contracting parties to use the following standard clause in their international contracts :

"All disputes arising in connection with the present contract shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules."

Moreover, arbitration courts have been set up by Chambers of Commerce located in major European cities, and by regional international Chambers of Commerce, such as the Arab-Swiss Chamber of Commerce and Industry in Geneva, for instance, which settles disputes arising in Arab countries. In the U.S.A., the American Arbitration Association also monitors international disputes, and the Inter-American Commercial Arbitration Commission specializes, as indicated by its name, in inter-American disputes.
There are many other arbitration courts offering their services internationally, and we hope to be forgiven for not being able to list them all here.

In order to ensure the enforcement of arbitral awards, a "Convention on the Recognition and Enforcement of Foreign Arbitral Awards", to which about 60 States have adhered, was issued under the auspices of the United Nations in 1958. In 1975, the United Nations Commission of International Trade Law (UNCITRAL) formulated a set of rules for optimal use in "ad hoc" arbitration relating to international trade. A large number of other conventions and rules were also formulated, such as the "Convention on Settlement by Arbitration of Civil Law Disputes Resulting from Economic, Scientific and Technical Cooperation" or the "Rules of the International Centre for the Settlement of Investment Disputes (ICSID)" for example.
Actually, some practitioners are tempted to announce that a new "lex mercatoria" is now emerging from the principles of international arbitration, derived from the main national legislations and from a few well known arbitral awards.
In this context, what could then be the advantages offered to the international business community by the new "Cour pour l'Arbitrage International en matière de Commerce et d'Industrie (CARICI)" in Geneva ?


1. Geneva is an ideal neutral international arbitration forum

As the seat of a large number of international institutions, e.g. : GATT, ILO, ITC, WHO and other specialized agencies of the United Nations (including the European Office of the latter), the European Centre for Nuclear Research (CERN), the International Red Cross, or the World Council of Churches, Geneva deserves, perhaps more than any other city on earth, the epithet of "International City". Its neutral political climate creates an ideal meeting ground for international conferences (e.g. the Disarmament Negotiations between the U.S.A. and the U.S.S.R.). The long standing international humanitarian traditions expressed in the "Spirit of Geneva" seem to reduce tensions, even between representatives of antagonistic States. Moreover, Geneva is a truly multilingual and multicultural centre, where the main languages of the world are spoken, and the main cultures and religions entertain fruitful dialogues.


2. Geneva is favored with a host of professional (commercial, financial, industrial, etc) experts

As a major international financial and trading centre, Geneva is literally flooded with professionals who could intervene either as arbitrators or experts in either the financial or trading fields. A relatively diversified industrial base, including several engineering consulting firms as well as a highly qualified scientific community - due to its renowned University, the Battelle Institute or the European Centre for Nuclear Research (CERN) - , offers a large supply of technical experts. There are also many insurance and shipping experts in Geneva.


3. Geneva Is favored with a large number of jurists

There are probably about 600 jurists in Geneva, including over 50 judges and some 400 attorneys members of the Geneva Bar Association. Some of them happen to be highly qualified international jurists, fully versed in the art of both negotiating and arbitrating international contracts.


4. A Geneva-based independent international arbitration court attracts worldwide professional competence

An independent international arbitration court like CARICI can easily tap professional competence from all over the world, thanks to Geneva's unique positioning as an international city located in neutral Switzerland. Actually, qualified professionals can apply from all over the world to become members of the "Association pour l'Arbitrage International en matière de Commerce et d'Industrie (ARICI)" Which founded its arbitration court CARICI and is sponsoring its development. If the applications of these professionals are accepted, they are then registered on the official lists of arbitrators and experts of CARICI. Therefore, an Algerian, a Brazilian and a Swiss could possibly be selected to arbitrate a dispute between a French and an Iranian organization, for example.


5. Geneva offers maximum discretion

A Geneva-based independent international arbitration court can maximize secrecy to avoid unwanted publicity, which could damage the reputation of the parties requiring arbitration.


6. Rapid settlement of disputes

A Geneva-based organization like CARICI can speed up the proceedings to satisfy the requirements of the parties involved, since it is not plagued by the red tape affecting certain other large arbitration institutions.


7. Last, but not least, a recourse to CARICI will probably cost less than a recourse to most other courts

The rates of fees fixed by CARICI are competitive with those of other international arbitration courts, and extremely reasonable anyway compared to legal expenses generated by proceeding before local Law Courts.
CARICI was originally set up to deal more particularly with international business disputes which, for one reason of another, may not be considered suitable to be entrusted to one of the leading international arbitration courts, e.g. :
- certain contracting parties litigating against a French organization may prefer to avoid entrusting the International Chamber of Commerce with the dispute, merely because it is located in France;
- there are many trading commodities which are not covered by trading associations (like FOSFA and GAFTA) in London, such as for instance : meat, milk products, cement, steel, fertilizers, chemicals, petroleum products, etc. These commodities, as well as industrial equipment and other capital goods, require an international arbitration forum.


CARICI
was initially set up by a group of both French and Swiss businessmen, judges and attorneys, such as, among others : Mr. Edouard Berthier, former Judge at the Supreme Criminal Court of Geneva and former President of the Court of Justice of Geneva; Mr. Philippe Cahier, Professor of International Law at the Graduate Institute of International Studies in Geneva; Mr. Maurice Dahan, Attorney member of the Paris Bar and Professor at the University of Paris-Sud; Mr. Simon Grandjean, Attorney member of the Geneva Bar; Mr. Pierre Greber, Judge at the Court of Justice of Geneva; Mr. Robert Jore, former President of the Brokers registered with the Tribunal of Commerce of Paris; Mr. Marcel Normand, Attorney before the Court of Appeal of Paris; Mr. George Perréard, Attorney member of the Geneva Bar, Mr. François Rouquet, Honorary Counsellor at the Supreme Court of France, etc.
CARICI is already endowed with an impressive list of arbitrators and experts, initially composed by its founders and then by the continuous addition of newly registered professionals. It now includes, for instance : Mr. Jacques d'Arnaudy, Consultant in computer sciences management; Mr. Edmond Besse, Chairman of the Association of Consulting Engineers of the French Refrigeration Industry; Mr. Jean-Daniel Bredin, Attorney before the Court of Appeal of Paris; Mr. Jacques Covo, Legal Adviser at Finagrain (member of the Continental Grain Group of companies in Geneva), who acts as arbitrator with the Federation of Oils, Seeds and Fats Associations (FOSFA), with the Grain and Feed Trade Association (GAFTA), as well as with the Paris based International Chamber of Commerce (ICC); Mr. Philippe Duclos, Broker registered with the Tribunal of Commerce of Paris and President of the International Association of Chartered Commodity Brokers; Mr. Jean-François Egli, Judge at the Supreme Federal Court of Switzerland.

Actually, CARICI, is capable of handling international disputes in practically any field of business endeavour, e.g. :
- Import-Export transactions
- Financial agreements
- Industrial ventures
- Construction projects
- Insurance schemes
- Transportation contracts
- Etc.
These disputes can concern either public or private corporations, as well as sovereign States from practically every part of the globe.
At a General Meeting held on May 17, 1984, Professor Philippe Cahier, a world renowned international jurist with considerable experience in international arbitration - particularly between sovereign States - was elected Chairman of CARICI in Geneva.
All international businessmen wishing to rely on the facilities offered by CARICI would just have to insert in their contracts the following clause :

"All disputes or controversies which the parties may not be able to settle amicably will be submitted to the arbitration of CARICI and judged by either one or three arbitrators, according to the rules of this Court.".

CARICI appears therefore ideally suited to resolve international business disputes, drawing its authority from the agreement of the parties in an international city like Geneva.
As international business arbitration grows in importance year by year, the "Association pour l'Arbitrage International en matière de Commerce et d'Industrie (ARICI)" is striving to expand CARICI's international network of highly qualified arbitrators and experts, so as to better serve the international business community. We trust the same "Spirit of Geneva", which inspired the founders of the International Red Cross and of the other Geneva-based international institutions, will guide the arbitrators of CARICI to always arbitrate in a most professional, fair and trustworthy manner, faithful to the reputation of Geneva and of its long-standing humanitarian tradition.


UNE COUR D'ARBITRAGE POUR LE COMMERCE ET L'INDUSTRIE
Nouvel atout pour la Genève internationale

Entreprise Romande - No 2163 - 19 janvier 1990
P.-E. Dentan

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L'arbitrage entre l'Angleterre et les Etats-Unis au sujet du vaisseau de guerre " Alabama " constitue, à Genève, le premier maillon d'une longue tradition de conciliation sur le plan politique, selon des procédures bien établies. Le dernier de ces arbitrages s'est tenu à l'Hôtel-de-Ville entre Israël et l'Egypte à propos du lieu touristique de Taba. Pourquoi ne pas étendre cette pratique de l'arbitrage, associée au renom de Genève et à ses institutions internationales, à des questions relevant du commerce et de l'industrie pour arbitrer des litiges qui surviennent à l'échelle internationale lorsque des pratiques juridiques et des pratiques commerciales entrent en conflit ? Telle est l'idée qui a conduit deux personnalités de notre ville, M. André Baladi et le professeur Philippe Cahier, à créer la " Cour pour l'arbitrage international en matière de commerce et d'industrie " (CARICI). M. Baladi est président de " l'Association pour l'arbitrage international ", soutenant par un rayonnement international grandissant la " Cour pour l'arbitrage international " que préside M. Cahier, entouré d'une pléiade de juristes éminents.

Le recours à l'arbitrage n'est pas nouveau. Du XIIIe siècle à nos jours, Londres s'est imposée comme la principale plaque tournante de l'arbitrage international, en raison de la suprématie maritime du pays. Dix mille litiges en la matière y sont soumis chaque année. Les arbitres sont généralement choisis parmi les experts du domaine dans lequel le litige est survenu.
Paris est également un centre d'arbitrage international renommé, grâce à la présence de la Cour d'arbitrage de la Chambre de commerce internationale (CCI), créée il y a une cinquantaine d'années. D'autres encore ont vu le jour : la Chambre arabo-suisse du commerce et de l'industrie à Genève, l'Association américaine de l'arbitrage aux Etats-Unis.
Sous les auspices des Nations Unies, soixante Etats ont adhéré à une " Convention pour la reconnaissance et l'exécution des sentences arbitrales étrangères ". En 1975, la Commission de l'ONU pour le droit commercial international a élaboré une réglementation pour l'usage optimal de l'arbitrage " ad hoc " en matière de commerce international.

Les arguments genevois

Ce qui existe ailleurs est déjà riche de possibilités. Fallait-il créer une nouvelle Cour à Genève ? Telle est la question que nous avons posée à MM. Baladi et Cahier.
D'abord, Genève profite de la neutralité helvétique : aucun pays ne peut suspecter la Suisse de poursuivre des visées expansionnistes. De plus, la présence de nombreuses institutions internationales constitue un " réservoir " intellectuel et juridique précieux. L'Université et ses instituts spécialisés, l'Institut Battelle, le CERN représentent un véritable " creuset " d'experts techniques auxquels il faut ajouter la présence de nombreux spécialistes des finances, de l'assurance et des transports maritimes. Genève est aussi une pépinière de juristes : plusieurs d'entre eux sont des experts en matière de commerce international.
N'étant pas une institution atteinte de gigantisme, la CARICI n'est pas menacée par le fléau de la bureaucratie, des indiscrétions et des pertes de temps.

Recourant à des professionnels qualifiés dans le monde entier, l'ARICI est ouverte à des juristes dont les demandes d'adhésion sont examinées, puis agréées. " C'est ainsi, explique M. Baladi, qu'un Algérien, un Brésilien et un Suisse pourraient être invités à trancher un litige survenu, par exemple, entre une société française et une organisation iranienne ".

Toutes les transactions

A ces avantages d'ordre objectif, la CARICI, implantée à Genève, peut faire valoir qu'elle est totalement indépendante; en litige avec une société française par exemple, des exportateurs peuvent préférer Genève à l'arbitrage de la CCI, simplement parce que cette dernière est à Paris. De plus, de nombreuses marchandises ne sont pas couvertes par des associations commerciales qui opèrent à Londres ; un arbitrage international s'impose pour de nombreux biens d'équipement industriel.

A l'heure actuelle, la CARICI, composée à l'origine d'hommes d'affaires, de juges et d'avocats de France et de Suisse, est à même de régler des litiges internationaux dans la quasi-totalité des transactions industrielles, financières d'assurance ou de transport.

Le recours à la CARICI est simple. Il suffit à toute société internationale qui souhaite bénéficier de ses avantages d'insérer dans ses contrats une clause selon laquelle " tout litige ou différend que les parties ne parviendront pas à régler amiablement sera soumis à l'arbitrage de la CARICI et jugé par un ou trois arbitres, conformément aux règles de procédure de cette Cour ".

Les émoluments administratifs et les honoraires des arbitres sont fixés selon un barème adapté aux sommes faisant l'objet du litige; ils sont tout à fait concurrentiels avec ceux d'autres Cours.