Comparative Guides
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Results: 4 Answers
International Arbitration
8.
The tribunal
8.1
How is the tribunal appointed?
 
Montenegro
The parties are free to agree on a procedure for the appointment and constitution of the tribunal. If they fail to reach such an agreement, Article 13(2) of the Arbitration Act provides as follows:

  • If the parties fail to appoint their sole arbitrator within 30 days of one party’s invitation to the other to make a joint appointment, such appointment shall be made by an appointing authority selected by the parties. If no appointing authority is selected or if it fails to appoint the arbitrator, the Commercial Court shall make the appointment (Articles 13(3) and 13(4)).
  • In case of a three-member tribunal:
    • each party appoints one arbitrator within 30 days of the other party’s invitation to make the appointment. Otherwise, the missing arbitrator is appointed by the appointing authority or the Commercial Court, if the appointing authority has not been selected or fails to make the appointment (Article 13(6)); and
    • the presiding arbitrator is chosen by the co-arbitrators within 30 days of the date of their appointment. Otherwise, the president is appointed by the appointing authority or the Commercial Court, if the appointing authority has not been selected or fails to make the appointment.
  • If a dispute is to be resolved by more than three arbitrators, each party appoints an equal number of arbitrators (Articles 13(7) and 13(9)).
For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.2
Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?
 
Montenegro
The Arbitration Act leaves it to the parties to determine the number of arbitrators. However, the default rules of the Arbitration Act also provide that if the arbitration agreement provides for more than one arbitrator, the number of arbitrators must be odd. If the parties fail to determine the number of arbitrators, the arbitral tribunal will be composed of three arbitrators by default (Article 12).

The Arbitration Act does not require that arbitrators possess specific qualifications other than, generally, legal capacity (Article 13(1)). However, the parties may agree on specific qualifications they deem necessary (Article 15(3)).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.3
Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?
 
Montenegro
Pursuant to the Arbitration Act, an arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his or her independence or impartiality, or if the arbitrator does not possess the qualifications agreed by the parties (Article 15).

A party may challenge an arbitrator appointed by it, or in whose appointment it has participated, only if the grounds for challenge materialise or if the party becomes aware of such grounds after the arbitrator has been appointed (Article 15(4)).

Unless the parties have agreed otherwise, the written request for challenge must be submitted within 15 days of the arbitrator’s appointment or of the party’s becoming aware of the grounds for challenge (Articles 16(1) and 16(2)).

If the challenge is rejected, the dissatisfied party may request the competent court to decide the challenge within 30 days of receiving the tribunal’s decision (Article 16(4)).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.4
If a challenge is successful, how is the arbitrator replaced?
 
Montenegro
If the challenge is successful, a substitute arbitrator is appointed according to the rules applicable to the appointment of arbitrators (Article 18).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.5
What duties are imposed on arbitrators? Are these all imposed by legislation?
 
Montenegro
Under the Arbitration Act:

  • the arbitrator must give a written statement on acceptance of his or her appointment (Article 14(1));
  • an arbitrator must act in a timely manner and avoid any delay (Article 14(2));
  • an arbitrator must, without delay, disclose any circumstances likely to give rise to justifiable doubts as to his or her independence or impartiality (Article 15);
  • the tribunal must give each party an opportunity to present its case and evidence and to respond to actions and proposals of the opposing party (Article 30); and
  • the tribunal should communicate to each party all statements, documents or other information supplied by the opposing party (Article 36(4)), as well as any evidentiary expert report or document on which the arbitral tribunal may base its decision (Article 36(5)).

In general, however, it is in the nature of the arbitrators’ position that they must decide on the parties’ requests, procedural or substantive, and must uphold and observe general principles such as due process, good faith, party equality, efficiency and party autonomy.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.6
What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?
 
Montenegro
(a) Procedure, including evidence?

If the parties fail to agree on the rules of the arbitration proceedings, the arbitral tribunal may, subject to the Arbitration Act, conduct the proceedings as it deems appropriate, including with regard to the right to determine the admissibility, relevance and weight of any proposed and adduced evidence (Article 31).

In such terms, the Arbitration Act provides, for example, that the tribunal may decide on the language and place of arbitration (Article 34), and whether the proceedings will be conducted through hearings or through the exchange of documents and other materials (Article 36(1)). Likewise, the arbitral tribunal may:

  • appoint one or more experts to report to it on specific issues; or
  • require a party to give the expert any relevant information or produce, or provide access to, any relevant documents, goods or other property for inspection (Article 38(1)).

In any event, the arbitral tribunal may request legal assistance from the competent court with regard to the taking of evidence. The arbitrators may participate in the procedure of taking evidence before the court (Article 39(1)).

(b) Interim relief?

The tribunal has the authority under the Arbitration Act to order interim measures, at any party’s request, unless the parties have agreed to divest the tribunal of such authority. The tribunal may grant a variety of interim measures, such as ordering the parties to:

  • maintain or restore the status quo pending determination of the dispute;
  • take action that would prevent, or refrain from taking action that is likely to cause, current or future harm or prejudice to the arbitral process;
  • preserve assets out of which the subsequent award may be enforced; or
  • preserve evidence that may be relevant to the resolution of the dispute (Article 21).

In the interim measures context, the tribunal may:

  • impose an obligation on the party requesting an interim measure to provide appropriate security (Article 24);
  • require the parties promptly to disclose any change in the facts on the basis of which the interim measure was requested or ordered (Article 25);
  • modify, suspend or terminate an interim measure upon the application of any party or, in exceptional circumstances and with prior notice to the parties, of its own initiative (Article 23); and
  • at any point during the proceedings, award costs and damages to the party suffering such costs and damages owing to an interim measure ordered against it, provided that the tribunal establishes that such interim measure should not have been granted previously (Article 26).

(c) Parties which do not comply with its orders?

In general, tribunals do not have the authority to compel the parties to comply with tribunal orders, (ie, to enforce their own orders). However, tribunals may use the usual tools - such as drawing adverse inferences and exercising discretion in allocating costs - to ensure the parties’ procedural discipline. Likewise, within its power to conduct the proceedings as it deems fit, the tribunal may in certain cases suspend the proceedings pending a party’s compliance with its orders (eg, in case of interim measures).

The Arbitration Act provides another tool where one of the parties fails to appear at a hearing or to produce documentary evidence within the relevant timeframes. In such cases the tribunal may continue the proceedings and render its award based on the evidence that has been submitted to it (Article 37).

(d) Issuing partial final awards?

Under the Arbitration Act, tribunals are authorised to issue partial awards (Article 43(2)). However, the Arbitration Act sets out no requirements or further guidance. Although the Civil Procedure Act is not directly applicable to arbitration, it does provide general rules for civil proceedings in Montenegro, which – applied to arbitration – allow a partial award to be rendered where part of a claim or one or several of multiple claims before the tribunal are ripe for final adjudication (Article 335 of the Civil Procedure Act).

(e) The remedies it can grant in a final award?

The Arbitration Act does not anticipate the types of remedies which can be granted in a final award. The tribunal is free to decide on the requests of the parties and to issue an award within the scope of their petitions and the underlying arbitration agreement, to the extent that such requests are not contrary to Montenegrin public policy, assuming that the seat of the arbitration is in Montenegro.

(f) Interest?

The Arbitration Act does not contain provisions regarding interest. This matter might be considered a part of the applicable substantive law to the dispute. As such, arbitral tribunals applying Montenegrin law can award default interest, if so requested, under the Montenegrin Default Interest Act.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.7
How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?
 
Montenegro
Article 37 of the Arbitration Act prescribes that, unless otherwise agreed by the parties, if:

  • the claimant fails to communicate its statement of claim without showing sufficient cause, this will result in termination of proceedings;
  • the respondent fails to communicate its statement of defence without showing sufficient cause, the proceedings shall continue and such failure will not be treated as admission of the claimant’s allegations; or
  • one of the parties fails, without showing sufficient cause, to appear at a hearing or produce documentary evidence within the relevant timeframe, the tribunal may continue the proceedings and render the award based on evidence that was submitted.
For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.8
Are arbitrators immune from liability?
 
Montenegro
The Arbitration Act does not contain express provisions regarding arbitrators’ immunity. However, to the extent that Montenegrin law applies, the Obligations Act allows for a contractual exclusion of the arbitrators’ liability for damages (eg, in the terms of appointment or a similar instrument), except for damages caused intentionally or through gross negligence (Article 272 of the Obligations Act). A contractual exclusion of criminal liability, in principle, is not valid under Montenegrin law.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law