Ad hoc arbitration (UNCITRAL Arbitration Rules)

Commercial arbitration has a long history: it predates the existence oforganized system of States? courts. Arbitration is a natural extension of theinformal practice of traders calling upon a respected colleague to express a viewon disputes between them. Where the courts might appear remote, rigid, and slowand expensive in their procedures and the judges might seem unversed in theways of commerce and the law, insensitive and ill adapted to the existence ofcommercial life, arbitrators offered an attractive alternative. They were originallydrawn from the same commercial community as the traders, often experienced inthe trade, capable of offering practical suggestions for the settlement of thedispute and doing so informally, quickly, an cheaply. These advantages ofarbitration were magnified in disputes between traders in different countries.Three problems impeded the development of arbitration as a widespreadform of dispute settlement in commercial matters. First, the necessity forprescribing procedures to ensure the orderly conduct of the arbitration demandedincreasingly complicated agreements between the parties on the procedural rulesfor the process. Secondly, no trader could be forced to accept arbitration. Theprocess depended at every point upon the co-operation of the disputing parties.Equally, awards made by arbitrators did not of themselves carry any provision forenforcement against an unwilling defendant. For arbitration to be recognized asan alternative form of dispute settlement, coexisting with the courts, it wasnecessary that there should be an agreement between States on the manner inwhich each State?s legal system would treat foreign arbitrations. These threeproblems have been addressed by drafting of institutional arbitration rules,national legislation on arbitration, and international conventions on arbitration.Ad hoc arbitration is arbitration conducted according to an arbitrationagreement which does not refer to rules of an arbitral institution. Particularly ininternational arbitration ad hoc arbitration may lead to considerable delays andproblems when other party refuses to co-operate. The intervention of a municipalcourt, for instance for the appointment of arbitrators, may than be necessary.When the parties decide that disputes arising out of a certain agreement are to besubmitted to arbitration, they have the choice between regulating (either directlyor by reference to codified arbitration rules such as UNCITRAL rules) all theprocedural aspects of the arbitration proceedings, including the determination ofthe arbitrators, scope of their authority etc. Themselves, so called ?ad hoc?arbitration, or of submitting their disputes to an institution that can administerthese aspects of the process in accordance with its existing procedural rules, socalled institutional arbitration.When the parties have chosen to resolve their dispute through ad hocarbitration, they can shape the proceedings in a way that suits the particularcharacteristics of the dispute. The regulation of the proceedings can be set forthin the arbitration clause, either on the basis of specific requirements of the parties,or by reference to existing sets of arbitration rules. The most recognized set ofarbitration rules suitable for ad hoc arbitration is the UNCITRAL Arbitration Rules,issued in 1976 by the United Nations Commission on International Trade.The Arbitration Rules drawn up in 1976 by the UNCITRAL were designed toprovide an international set of rules for commercial arbitration that would beacceptable in countries with different legal and economic systems. They wereindeed to serve dual purpose, first as rules of procedure of direct application,available to the parties entering into arbitration agreement and, second, as amodel set of arbitration to be incorporated into the rules of national andinternational arbitration centers. It had been also suggested that, shouldworldwide system of international commercial arbitration organized in the future,the UNCITAL Arbitration Rules become its procedural backbone. It is largely dueto this basically sound framework that the UNCITRAL Arbitration Rules havereceived a positive worldwide response from persons and arbitral institutions.In Turkish legal system rules on arbitration has been depicted in severallaws that is to say: Code of Civil Procedure Law, Private International Law andInternational Arbitration Law as well as international agreements of New YorkConvention on Recognition and Enforcement of Foreign Arbitral Awards,European Convention on International Commercial Arbitration and Convention onthe Settlement of Investment Disputes between States and National of OtherStates.Law on International Arbitration is specifically designed to lure foreigninvestments to Turkey and provided certain rules to define arbitrations whichinherit foreign elements. The said law has been enacted by taking into accountUNCITRAL Model Law and comparative principles of international arbitration.Within that framework, rules on international arbitration in Turkey has beenreconciled with the needs of the modern world. Such improvement has alsofostered the ground for ad hoc arbitration and specifically UNCITRAL ArbitrationRules to be used by the parties.