Common use of Conduct of the Arbitration Clause in Contracts

Conduct of the Arbitration. 1. In an arbitration procedure under this Section, the respondent shall not assert, as a defense, counterclaim, right of setoff or otherwise, that the claimant has received or will receive indemnification or other compensation for all or part of the alleged damages pursuant to an insurance or guarantee contract. 2. Unless the disputing parties have agreed to another expedited procedure for making preliminary objections, the Party which is the party to a dispute may, no later than 60 days after the constitution of the tribunal, and in any event before the first session of the tribunal, file an objection that a claim is manifestly without legal merit. The Party which is the party to the dispute shall specify as precisely as possible the basis for the objection. The tribunal, after giving the disputing parties the opportunity to present their observations on the objection, shall, at its first session or promptly thereafter, notify the disputing parties of its decision on the objection. The decision of the tribunal shall be without prejudice to the right of the Party which is the party to the dispute to file an objection to the jurisdiction of the tribunal or to object, in the course of the proceedings, that a claim lacks legal merit. 3. The tribunal may order security for costs upon request of the respondent. The tribunal shall especially consider ordering security for costs when there is a reason to believe: (a) that the claimant will be unable or unwilling to pay, if ordered to do so, a reasonable part of attorney fees and other costs to the Party which is the party to the dispute; or (b) that the claimant has divested assets to avoid the consequences of the arbitral proceedings. Should the claimant fail to pay the security for costs ordered by the tribunal within the time period set by the tribunal, the tribunal may order the suspension or termination of the arbitral proceedings.