My shield and sword: replying to a request for an arbitration, choosing the arbitrator and filing counterclaims.
In this drop, we shall discuss how to react to a notice of arbitration, to wit the Respondent’s first procedural step.
We can divide this step into two limbs: the shield (replying to the Claimant’s claim and appointing the arbitrator) and – eventually – the sword (filing a counterclaim)
Usually, the two issues of “the shield” are dealt with together, but this is not always true. It depends on the applicable rules and the composition of the arbitral tribunal.
For instance, if the parties – in the arbitration agreement – opted for a sole arbitrator, an appointing Authority will likely deal with the choice of the arbitrator.
What is the content of a Reply to a Notice of Arbitration (sometimes called “Response”)?
We have to check the relevant arbitration rules.
For instance, in an arbitration under the SIAC[1] rules: “The Respondent shall file a Response with the Registrar within 14 days of receipt of the Notice of Arbitration. The Response shall include:
- a confirmation or denial of all or part of the claims, including, where possible, any plea that the Tribunal lacks jurisdiction;
- a brief statement describing the nature and circumstances of any counterclaim, specifying the relief claimed and, where possible, an initial quantification of the counterclaim amount;
- any comment in response to any statements contained in the Notice of Arbitration under Rule 3.1 or any comment with respect to the matters covered in such Rule;
- unless otherwise agreed by the parties, the nomination of an arbitrator if the arbitration agreement provides for three arbitrators or, if the arbitration agreement provides for a sole arbitrator, comments on the Claimant’s proposal for a sole arbitrator or a counter-proposal; and
- payment of the requisite filing fee under these Rules for any counterclaim” (Rule 4.1 SIAC Arbitration Rules 2016).
In an LCIA[2] arbitration, “the Respondent shall deliver to the Registrar a written response to the Request (the “Response"), containing or accompanied by:
(i) the Respondent’s full name, nationality and all contact details (including email address, postal address and telephone number) for the purpose of receiving delivery of all documentation in the arbitration in accordance with Article 4 and the same particulars of its authorised representatives (if any);
(ii) confirmation or denial of all or part of the claim advanced by the Claimant in the Request, including the Claimant’s invocation of the Arbitration Agreement in support of its claim;
(iii) if not full confirmation, a statement briefly summarising the nature and circumstances of the dispute, its estimated monetary amount or value, the transaction(s) at issue and the defence advanced by the Respondent, and also indicating any counterclaim advanced by the Respondent against any Claimant and any cross-claim against any other Respondent;
(iv) a response to any statement of procedural matters for the arbitration contained in the Request under Article 1.1(iv), including the Respondent’s own statement relating to the arbitral seat, the language(s) of the arbitration, the number of arbitrators, their qualifications and identities and any other procedural matter upon which the parties have already agreed in writing or in respect of which the Respondent makes any proposal under the Arbitration Agreement;
(v) if the Arbitration Agreement (or any other written agreement) howsoever calls for party nomination of arbitrators, the full name, email address, postal address and telephone number of the Respondent's nominee; and
(vi) confirmation that copies of the Response (including all accompanying documents) have been or are being delivered to all other parties to the arbitration in accordance with Article 4 by one or more means of delivery to be identified specifically in such confirmation, to be supported then or as soon as possible thereafter by documentary proof satisfactory to the LCIA Court of actual delivery (including the date of delivery) or, if actual delivery is demonstrated to be impossible to the LCIA Court’s satisfaction, sufficient information as to any other effective form of notification” (Art. 2.1 LCIA Arbitration Rules 2020).
Basically, in your defence to be filed in a given timeframe, you have to include, if any:
- Challenges to the arbitral tribunal jurisdiction
- Your position regarding each claim (with comments, not only bare denial)
- Your counterclaim and its factual and legal grounds
- The appointment of “your” arbitrator or your views on the requirements of the arbitrator to be appointed by the institution
- Every other detail required by the relevant arbitration rules and law.
Regarding how to choose an arbitrator, please see our Drops of Arbitration #4.
Let’s talk about “the sword”: the counterclaim.
What is a counterclaim (sometimes called also “crossclaim”)? It is “a claim brought by the defendant against the claimant, or the claimant and some other person”[3].
For instance, the Claimant is asking for the outstanding balance of some sold goods, but the Respondent claims that the goods were defective, and the Respondent has suffered damages because of that.
To save time, and money and gain consistency, claims and counterclaims are decided by the same arbitral tribunal in a single arbitration.
In a counterclaim, the Respondent has the same position (and the same burden of proof) as the Claimant in the claims. It is in a position of “attack”.
This is the reason why we can define counterclaims as a “sword”.
Follow our next drop of arbitration to learn how to challenge the arbitral tribunal jurisdiction.
If you want to know something more about our services or if you have questions regarding Arbitration and ADR, send an e-mail to: arbitration@mezzlelaw.com
[1] Singapore International Arbitration Centre.
[2] London Court of International Arbitration.
[3] John O’Hare – Kevin Browne, O’Hare & Browne: Civil Litigation, Street & Maxwell, 2021, p. 275
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