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07 February 2019
The start of 2019 provides the perfect opportunity to review recent developments and initiatives with regard to Dutch arbitration practice. This article examines the new Court of Arbitration for Art (CAfA), which offers an attractive and efficient dispute resolution mechanism for cross border art-related disputes.
In June 2018 a new arbitration court specialised in art-related disputes was established in The Hague. The court was founded by the Netherlands Arbitration Institute (NAI) in collaboration with Authentication in Art (AiA), a non-profit organisation which aims to promote best practices in art authentication. According to the NAI's website, it has now started accepting arbitrator and mediator applications for the CAfA.
The CAfA's main aim is to create a highly specialised arbitral court that can resolve art disputes in an authoritative and efficient manner. The rules applicable to proceedings before tribunals of the CAfA are the regular NAI Arbitration Rules, combined with some special CAfA rules (the Adjunct Arbitration Rules) that may, on some points, alter or supplement the NAI Rules. The CAfA Arbitration Rules, along with information about costs and arbitrators, are available on the CAfA's website.(1)
Number of arbitrators
Arbitration and the art industry have historically had a somewhat complicated relationship. Within the art community, arbitral awards were often not fully recognised because of the questionable expertise of some arbitral tribunals. For that reason, in order for this new institution to be effective and widely accepted within the art industry, the expertise of the arbitrators and efficiency of the proceedings will be of the utmost importance. The default position of the CAfA with regard to the number of arbitrators deciding over a case is different from leading commercial arbitration rules (eg, see Article 12.2 of the International Chamber of Commerce Rules 2017 and Article 5.8 of the London Court of International Arbitration Rules 2014). In most CAfA cases, three arbitrators will be appointed. Only one arbitrator will be appointed if the value of the relief sought is less than €500,000 or where the parties have agreed to deviate from the default position.
Appointment of arbitrators
Arbitrators will be appointed by the parties, but the parties will have limited options in doing so. The NAI and the AiA will establish a pool of arbitrators from which the parties can appoint their arbitrators. Parties can appoint an arbitrator that is not a member of the NAI/AiA pool only with compelling reasons and the consent of the NAI (in consultation with the AiA). For the credibility of the CAfA's decisions, it is crucial that the members of the pool of arbitrators are well qualified. This is the main reason why the NAI is inviting "seasoned lawyers who are familiar with the industry, practice and issues specific to art disputes" to join the CAfA arbitrator and mediator pool.
Parties can submit their dispute to the CAfA in a contractual arbitration clause or submission agreement.
Pre-selected experts from specialised expert pool
Proceedings before a tribunal of the CAfA will, in various respects, be different from regular NAI proceedings. First, the default number of arbitrators will differ. Further, parties will be more limited in their choice of experts. The Adjunct Arbitration Rules provide that only the tribunal can, from a specific pool, appoint experts on forensic science and provenance issues. The parties will be consulted on the expert's appointment and their terms of reference. However, the final say in the appointment of those specific experts will be solely in the tribunal's hands. Arbitrators will be able to deviate from the pool of experts in some circumstances – for example, where it concerns an expert of a particular artist.
Notably, much of the CAfA's success will depend on the expertise and independence of the persons placed in the pool of experts, especially now, in the absence of a clear definition of what constitutes a forensic science or provenance issue. However, parties can still appoint experts on other issues, provided that those party-appointed experts do not advise on anything that might compete or supplement the evidence given by the CAfA-appointed experts.
Further, the CAfA can appoint a technical process adviser. Both parties to the arbitration must consent to the adviser's appointment, role, scope of authority and advisory mandate. This new possibility is most likely to be useful in highly technical disputes. The adviser can advise the tribunal about pre-hearing evidence gathering and evidence exchange processes as follows:
the advisor can help facilitate identifying and the gathering of relevant evidence in an efficient and cost-effective manner. The advisor acts under the authority and direction of the arbitral tribunal, but may, if requested, draft proposed procedural orders for adoption by the arbitral tribunal. (Explanatory notes of the Adjunct Arbitration Rules.)
Article 42.2 of the NAI Rules states that, absent a decision of the parties, a tribunal can "decide in accordance with the rules of law which it considers appropriate". The Adjunct Arbitration Rules give more guidance, albeit in an advisory way, on how to designate the appropriate law that should be applied. Point 13 of the Adjunct Arbitration Rules states that:
An appropriate choice of law for the arbitral tribunal may be the law of the principal location of the seller, if known at the time of the transaction, or, if no sale is involved, of the owner of the object in question at the time of the commencement of the arbitration.
For further information on this topic please contact Jeroen van Hezewijk or Sandra Coelen at Freshfields Bruckhaus Deringer LLP by telephone (+31 20 485 7000) or email (email@example.com or firstname.lastname@example.org). The Freshfields Bruckhaus Deringer LLP website can be accessed at www.freshfields.com.
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