Public Act 90-0631
HB2369 Enrolled LRB9006848NTsbA
AN ACT concerning international commercial arbitration.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
ARTICLE 1. GENERAL PROVISIONS
Section 1-1. Short title. This Act may be cited as the
International Commercial Arbitration Act.
Section 1-5. Scope of application.
(a) This Act applies to international commercial
arbitration, subject to any agreement in force between the
United States and any other country or countries.
(b) The provisions of this Act, except Sections 5-10 and
5-15, apply only if the place of arbitration is in the State
(c) An arbitration is international if:
(1) the parties to an arbitration agreement have,
at the time of the conclusion of execution of that
agreement, their places of business in different
(2) one of the following places is situated outside
the country or countries in which the parties have their
places of business: (i) the place of arbitration if
determined in, or pursuant to, the arbitration agreement
or (ii) the place where the predominant part of the
obligations of the commercial relationship is to be
performed or the place with which the subject matter of
the dispute is most closely connected; or
(3) the parties have expressly agreed that the
subject matter of the arbitration agreement relates to
more than one country.
(d) For the purposes of subsection (c) of this Section:
(1) If a party has more than one place of business,
the place of business is that which has the closest
relationship to the arbitration agreement.
(2) If a party does not have a place of business,
reference is to be made to his or her habitual residence.
(e) This Act shall not affect any other law in force in
the State of Illinois by virtue of which certain disputes may
not be submitted to arbitration or may be submitted to
arbitration only according to provisions other than those of
Section 1-10. Definitions and rules of interpretation.
For the purposes of this Act:
(a) "Arbitration" means any arbitration whether or not
administered by a permanent arbitral institution.
(b) "Arbitral tribunal" means a sole arbitrator or a
panel of arbitrators.
(c) "Court" means a court of competent jurisdiction of a
country or state.
(d) Where a provision of this Act, except Section 25-5,
leaves the parties free to determine a certain issue, the
freedom includes the right of the parties to authorize a
third party, including an institution, to make that
(e) Where a provision of this Act refers to the fact
that the parties have agreed or that they may agree or in any
other way refers to an agreement of the parties, the
agreement includes any arbitration rules referred to in that
(f) Where a provision of this Act, other than in
subsection (a) of Section 20-40 and subsection (a) of Section
25-25, refers to a claim, it also applies to a counter claim,
and where it refers to a defense, it also applies to a
defense to the counter claim.
Section 1-15. Receipt of written communications.
(a) Unless otherwise agreed by the parties, any written
communication is deemed to have been received if it is
delivered to the addressee personally, or if it is delivered
at his or her place of business, habitual residence, or
mailing address. If none of these can be found after making
a reasonable inquiry, a written communication is deemed to
have been received if it is sent to the addressee's last
known place of business, habitual residence, or mailing
address by registered letter or any other means that provides
a record of the attempt to deliver it.
(b) Unless otherwise agreed by the parties, the
communication is deemed to have been received on the day it
is so delivered.
(c) The provisions of this Section do not apply to
communications in court proceedings.
Section 1-20. Waiver of right to object. If a party
knows that any provision of this Act from which the parties
may derogate or any requirement under the arbitration
agreement has not been complied with and yet proceeds with
the arbitration without stating its objection to the
non-compliance without undue delay, or, if a time limit is
provided, within that period of time, that party shall be
deemed to have waived his or her right to object.
Section 1-25. Extent of court intervention. In matters
governed by this Act, no court shall intervene except where
so provided in this Act or applicable federal law.
Section 1-30. Functions of a court. The functions
referred to in subsections (c), (d), and (e) of Section
10-10, subsection (c) of Section 10-20, Section 10-25,
subsection (c) of Section 15-5, Section 20-50, and Section
20-55 of this Act shall be performed by the Illinois circuit
court of the county in which the place of arbitration is
ARTICLE 5. ARBITRATION AGREEMENT
Section 5-5. Definition and form of arbitration
(a) "Arbitration agreement" is an agreement by the
parties to submit to arbitration all or certain disputes that
have arisen or that may arise between them in respect of a
defined legal relationship, whether contractual or not. An
arbitration agreement may be in the form of an arbitration
clause in a contract or in the form of a separate agreement.
(b) The arbitration agreement shall be in writing. An
agreement is in writing if it is contained in a document
signed by the parties or in an exchange of letters, telex,
telegrams, or other means of telecommunication that provides
a record of the agreement or in an exchange of statements of
claim and defense in which the existence of an agreement is
alleged by one party and not denied by another. The
reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement,
provided that the contract is in writing and the reference is
such as to make that clause part of the contract.
Section 5-10. Arbitration agreement and substantive
claim before court.
(a) A court before which an action is brought in a
matter that is the subject of an arbitration agreement shall,
if a party so requests not later than when submitting his or
her first statement on the substance of the dispute, refer
the parties to arbitration unless it finds that the agreement
is null and void, inoperative, or incapable of being
(b) When an action referred to in subsection (a) of this
Section has been brought, arbitral proceedings may
nevertheless be commenced or continued, and an award may be
made, while the issue is pending before the court.
Section 5-15. Arbitration agreement and interim measures
by court. It is not incompatible with an arbitration
agreement for a party to request, before or during arbitral
proceedings, from a court an interim measure of protection
and for a court to grant the measure.
ARTICLE 10. COMPOSITION OF ARBITRAL TRIBUNAL
Section 10-5. Number of arbitrators. The parties are
free to determine the number of arbitrators. In the event
this determination is not made, the arbitration shall be
conducted by a sole arbitrator, selected in accordance with
the provisions of subsection (d) of Section 10-10 of this
Section 10-10. Appointment of arbitrators.
(a) No person shall be precluded by reason of his or her
nationality from acting as an arbitrator, unless otherwise
agreed by the parties.
(b) The parties are free to agree on a procedure of
appointing the arbitrator or arbitrators, subject to the
provisions of subsections (e) and (f) of this Section.
(c) In an arbitration with 3 arbitrators and where the
parties fail to reach an agreement on an appointment
procedure, each party shall appoint one arbitrator, and the 2
arbitrators thus appointed shall appoint the third
arbitrator. If a party fails to appoint the arbitrator within
30 days of receipt of a request to do so from the other party
or if the 2 arbitrators fail to agree on the third arbitrator
within 30 days of their appointment, the appointment shall be
made, upon request of a party, by the court or other
authority specified in Section 1-30 of this Act.
(d) In an arbitration with a sole arbitrator and where
the parties fail to reach an agreement on an appointment
procedure, the arbitrator shall be appointed, upon request of
a party, by the court specified in Section 1-30 of this Act.
(e) Where, under an appointment procedure agreed upon by
the parties, (i) a party fails to act as required under the
procedure or (ii) the parties or the two party-appointed
arbitrators are unable to reach an agreement expected of them
under the procedure or (iii) a third party, including an
institution, fails to perform any function entrusted to it
under the procedure, any party may request the court
specified in Section 1-30 of this Act to take the necessary
measure, unless the agreement on the appointment procedure
provides other means of securing the appointment.
(f) A decision on a matter entrusted by subsections (c),
(d), and (e) of this Section to the court specified in
Section 1-30 of this Act is not subject to appeal; provided
that this provision shall not preclude the parties from
raising any ground for setting aside or refusing to recognize
or enforce an arbitral award to the extent otherwise
permitted under applicable federal law. The court, in
appointing an arbitrator, shall have due regard to any
qualifications required of the arbitrator by the agreement of
the parties and to any considerations that are likely to
secure the appointment of an independent and impartial
arbitrator and, in the case of a sole or third arbitrator,
shall take into account as well the advisability of
appointing an arbitrator of a nationality other than those of
Section 10-15. Grounds for challenge.
(a) When a person is approached in connection with his
or her possible appointment as an arbitrator, that person
shall disclose any circumstances likely to give rise to
justifiable doubts as to his or her impartiality or
independence. An arbitrator, from the time of his or her
appointment and throughout the arbitral proceedings, shall
without delay disclose any of these circumstances to the
parties unless they have already been informed of them by the
(b) An arbitrator may be challenged only if
circumstances exist that give rise to justifiable doubts as
to his or her impartiality or independence or if he or she
does not possess qualifications agreed to by the parties. A
party may challenge an arbitrator it has appointed, or in
whose appointment it has participated, only for reasons of
which that party becomes aware after the appointment has been
Section 10-20. Challenge procedure.
(a) The parties are free to agree on a procedure for
challenging an arbitrator, subject to the provisions of
subsection (c) of this Section.
(b) If the parties are unable to reach an agreement, a
party that intends to challenge an arbitrator shall, within
15 days after becoming aware of the constitution of the
arbitral tribunal or after becoming aware of any circumstance
referred to in subsection (b) of Section 10-15 of this Act,
send a written statement of the reasons for the challenge to
the arbitral tribunal. Unless the challenged arbitrator
withdraws from office or the other party agrees to the
challenge, the arbitral tribunal shall decide on the
(c) If a challenge under any procedure agreed upon by
the parties or under the procedure of subsection (b) of this
Section is not successful, the challenging party may request,
within 30 days after having received notice of the decision
rejecting the challenge, the court specified in Section 1-30
of this Act to decide on the challenge, which decision is not
subject to appeal; provided that this provision shall not
preclude the parties from raising any ground for setting
aside or refusing to recognize or enforce an arbitral award
to the extent otherwise permitted under applicable federal
law. While the request is pending, the arbitral tribunal,
including the challenged arbitrator, may continue the
arbitral proceedings and make an award.
Section 10-25. Failure or impossibility to act.
(a) If an arbitrator becomes de jure or de facto unable
to perform his or her functions or for other reasons fails to
act without undue delay, that arbitrator's mandate terminates
if he or she withdraws from office or if the parties agree on
the termination. Otherwise, if a controversy remains
concerning any of these grounds, any party may request the
court specified in Section 1-30 of this Act to decide on the
termination of the mandate, which decision is not subject to
(b) If, under this Section or under subsection (b) of
Section 10-20 of this Act, an arbitrator withdraws from
office or a party agrees to the termination of the mandate of
an arbitrator, this does not imply acceptance of the validity
of any ground referred to in this Section or subsection (b)
of Section 10-15 of this Act.
Section 10-30. Appointment of substitute arbitrator.
Where the mandate of an arbitrator terminates under Sections
10-20 or 10-25 of this Act or because of his or her
withdrawal from office for any other reason or because of the
revocation or termination of that arbitrator's mandate, a
substitute arbitrator shall be appointed according to the
rules or procedures that were applicable to the appointment
of the arbitrator being replaced.
ARTICLE 15. JURISDICTION OF ARBITRAL TRIBUNAL
Section 15-5. Competence of arbitral tribunal to rule on
(a) The arbitral tribunal may rule on its own
jurisdiction, including any objections with respect to the
existence or validity of the arbitration agreement. For that
purpose, an arbitration clause that forms part of a contract
shall be treated as an agreement independent of the other
terms of the contract. A decision by the arbitral tribunal
that the contract is null and void shall not by itself mean
that the contract's arbitration clause is invalid.
(b) A plea that the arbitral tribunal does not have
jurisdiction shall be raised not later than the submission of
the statement of defense. A party is not precluded from
raising the plea by the fact that he or she has appointed or
participated in the appointment of an arbitrator. A plea
that the arbitral tribunal is exceeding the scope of its
authority shall be raised as soon as the matter alleged to be
beyond the scope of its authority is raised during the
arbitral proceedings. The arbitral tribunal may, in either
case, admit a later plea if it considers the delay justified.
(c) The arbitral tribunal may rule on a plea referred to
in subsection (b) of this Section either as a preliminary
question or in an award on the merits. If the arbitral
tribunal rules as a preliminary question that it has
jurisdiction, any party may request, within 30 days after
having received notice of that ruling, the court specified in
Section 1-30 of this Act to decide the matter, which decision
is not subject to appeal; provided that this provision shall
not preclude the parties from raising any ground for setting
aside or refusing to recognize or enforce an arbitral award
to the extent otherwise permitted under applicable federal
law. While the request is pending, the arbitral tribunal may
continue the arbitral proceedings and make an award.
Section 15-10. Power of arbitral tribunal to award
interim measures. Unless otherwise agreed by the parties,
the arbitral tribunal may, at the request of a party, order
any party to take any interim measure of protection that the
arbitral tribunal may consider necessary in respect of the
subject matter of the dispute. The arbitral tribunal may
require any party to provide appropriate security in
connection with the measure.
ARTICLE 20. CONDUCT OF ARBITRAL PROCEEDINGS
Section 20-5. Equal treatment of parties. The parties
shall be treated with equality, and each party shall be given
a full opportunity of presenting his or her case.
Section 20-10. Determination of rules of procedure.
(a) Subject to the provisions of this Act, the parties
are free to agree on the procedure to be followed by the
arbitral tribunal in conducting the proceedings.
(b) If the parties do not reach an agreement, the
arbitral tribunal may, subject to the provisions of this Act,
conduct the arbitration in a manner that it considers
appropriate. The power conferred upon the arbitral tribunal
includes the power to determine the admissibility, relevance,
materiality, and weight of any evidence.
Section 20-15. Place of arbitration.
(a) The parties are free to agree on the place of
arbitration. If the parties do not reach an agreement, the
place of arbitration shall be determined by the arbitral
tribunal, having regard to the circumstances of the case,
including the convenience of the parties.
(b) Notwithstanding the provisions of subsection (a) of
this Section, the arbitral tribunal may, unless otherwise
agreed by the parties, meet at any place it considers
appropriate for consultation among its members, for hearing
witnesses, experts, or the parties, or for inspection of
goods, other property, or documents.
Section 20-20. Commencement of arbitral proceedings.
Unless otherwise agreed by the parties, the arbitral
proceedings in respect of a particular dispute commence on
the date on which a request for that dispute to be referred
to arbitration is received by the respondent.
Section 20-25. Language.
(a) The parties are free to agree on the language or
languages to be used in the arbitral proceedings. If the
parties do not reach an agreement, the arbitral tribunal
shall determine the language or languages to be used in the
proceedings. This agreement or determination, unless
otherwise specified therein, shall apply to any written
statement by a party, any hearing, and any award, decision,
or other communication by the arbitral tribunal.
(b) The arbitral tribunal may order that any documentary
evidence shall be accompanied by a translation into the
language or languages agreed upon by the parties or
determined by the arbitral tribunal.
Section 20-30. Statements of claim and defense.
(a) Within the period of time agreed by the parties or
determined by the arbitral tribunal, the claimant shall state
the facts supporting his or her claim, the points at issue,
and the relief or remedy sought, and the respondent shall
state his or her defense in respect of these particulars,
unless the parties have otherwise agreed as to the required
elements of the statements. The parties may submit with
their statements all documents they consider to be relevant
or may add a reference to the documents or other evidence
they will submit.
(b) Unless otherwise agreed by the parties, either party
may amend or supplement its claim or defense during the
course of the arbitral proceedings, unless the arbitral
tribunal considers it inappropriate to allow the amendment,
having regard to the delay in making it.
Section 20-35. Hearings and written proceedings.
(a) Subject to any contrary agreement by the parties,
the arbitral tribunal shall decide whether to hold oral
hearings for the presentation of evidence or for oral
arguments or whether the proceedings shall be conducted on
the basis of documents and other materials. However, unless
the parties have agreed that no hearings shall be held, the
arbitral tribunal shall hold the hearings at an appropriate
stage of the proceedings, if so requested by a party.
(b) The parties shall be given sufficient advance notice
of any hearing and of any meeting of the arbitral tribunal
for the purposes of inspection of goods, other property, or
(c) All statements, documents, or other information
supplied to the arbitral tribunal by one party shall be
communicated to the other party. Also, any expert report or
evidentiary document on which the arbitral tribunal may rely
in making its decision shall be communicated to the parties.
Section 20-40. Default of a party. Unless otherwise
agreed by the parties:
(a) If, without showing sufficient cause, the claimant
fails to communicate its statement of claim in accordance
with subsection (a) of Section 20-30 of this Act the arbitral
tribunal shall terminate the proceedings.
(b) If, without showing sufficient cause, the respondent
fails to communicate its statement of defense in accordance
with subsection (a) of Section 20-30 of this Act the arbitral
tribunal shall continue the proceedings without treating the
failure in itself as an admission of the claimant's
(c) If, without showing sufficient cause, any party
fails to appear at a hearing or to produce documentary
evidence, the arbitral tribunal may continue the proceedings
and make the award on the evidence before it.
Section 20-45. Expert appointed by arbitral tribunal.
Unless objected to by one or both parties:
(a) The arbitral tribunal may appoint one or more
experts to report to it on specific issues to be determined
by the arbitral tribunal.
(b) The arbitral tribunal may require a party to give
the expert any relevant information or to produce or provide
access to any relevant documents, goods, or other property
for the expert's inspection.
(c) If a party so requests or if the arbitral tribunal
considers it necessary, the expert shall, after delivery of
his or her written or oral report, participate in a hearing
where the parties have the opportunity to put questions to
the expert and to present expert witnesses in order to
testify on the points at issue.
Section 20-50. Witnesses, subpoenas, depositions.
(a) The arbitral tribunal may issue subpoenas to parties
or third parties for the attendance of witnesses and for the
production of books, records, documents, and other evidence
and shall have the power to administer oaths. The production
will be for the purpose of presenting evidence at the
arbitration hearing and will not include pre-trial discovery
as known in common law countries. Subpoenas so issued shall
be served and, upon application to the court by a party or
the arbitral tribunal, enforced, in the manner provided by
law for the service and enforcement of subpoenas in civil
(b) All provisions of law compelling a person under
subpoena to testify are applicable.
(c) On application of a party and for use as evidence,
the arbitral tribunal may permit a deposition to be taken, in
the manner and upon the terms designated by the arbitrators,
of a witness who cannot be subpoenaed or is unable to attend
(d) No other discovery shall be permitted unless
otherwise agreed by the parties.
Section 20-55. Court assistance in taking evidence. The
arbitral tribunal or a party with the approval of the
arbitral tribunal may request from a court assistance in
taking evidence. The court may execute the request within
its competence and according to its rules on taking evidence.
ARTICLE 25. MAKING OF AWARD AND
TERMINATION OF PROCEEDINGS
Section 25-5. Rules applicable to substance of dispute.
(a) The arbitral tribunal shall decide the dispute in
accordance with any rules of law that are chosen by the
parties as applicable to the substance of the dispute. Any
designation of the law or legal system of a given country or
jurisdiction shall be construed, unless otherwise expressed,
as directly referring to the substantive law of that country
or jurisdiction and not to its conflict of laws rules.
(b) If the parties do not make the designation described
in subsection (a) of this Section, the arbitral tribunal
shall apply the law as determined by the conflict of laws
rules that it considers applicable.
(c) The arbitral tribunal shall decide according to what
is just and good ("ex aequo et bono") or according to equity
and good conscience (as "amiable compositeur") rather than by
the strict rule of law only if the parties have expressly
authorized it to do so.
(d) In all cases, the arbitral tribunal shall decide in
accordance with the terms of the contract and shall take into
account the usages of the trade applicable to the
Section 25-10. Decision making by panel of arbitrators.
In arbitral proceedings with more than one arbitrator, any
decision of the arbitral tribunal shall be made, unless
otherwise agreed by the parties, by a majority of all its
members. However, questions of procedure may be decided by a
presiding arbitrator, if so authorized by the parties or all
members of the arbitral tribunal.
Section 25-15. Settlement.
(a) With the agreement of the parties, the arbitral
tribunal may use mediation, conciliation, or other dispute
resolution procedures at any time during the arbitral
proceedings to encourage settlement.
(b) If, during arbitral proceedings, the parties settle
the dispute, the arbitral tribunal shall terminate the
proceedings and, if requested by the parties and not objected
to by the arbitral tribunal, record the settlement in the
form of an arbitral award on agreed terms.
(c) An award on agreed terms shall be made in accordance
with the provisions of Section 25-20 of this Act and shall
state that it is an award. The award has the same status and
effect as any other award on the merits of the case.
Section 25-20. Form and content of award.
(a) The award shall be made in writing and shall be
signed by the arbitrator or arbitrators.
(b) In arbitral proceedings with more than one
arbitrator, the signatures of the majority of all members of
the arbitral tribunal shall suffice, provided that the reason
for any omitted signature is stated.
(c) The award shall state the reasons upon which it is
based, unless the parties have agreed that no reasons are to
be given or the award is an award on agreed terms under
Section 25-15 of this Act.
(d) The award shall state its date and the place of
arbitration as determined in accordance with subsection (a)
of Section 20-15 of this Act. The award shall be deemed to
have been made at that place.
(e) After the award is made, a copy signed by the
arbitrators in accordance with subsection (a) of this Section
shall be delivered to each party.
(f) The arbitral tribunal may, at any time during the
proceedings, make an interim award on any matter with respect
to which it may make a final award. The interim award may be
enforced in the same manner as a final award.
(g) Unless otherwise agreed by the parties, the arbitral
tribunal may award interest.
(h) Unless otherwise agreed by the parties, the costs of
an arbitration are at the discretion of the arbitral
(i) In making an order for costs, the arbitral tribunal
may include as costs any of the following:
(1) the fees and expenses of the arbitrators and
(2) legal fees and expenses;
(3) any administration fees of the institution
supervising the arbitration; and
(4) any other expenses incurred in connection with
the arbitral proceedings.
(j) In making an order for costs, the arbitral tribunal
(1) the party entitled to costs;
(2) the party who shall pay the costs;
(3) the amount of costs or method of determining
that amount; and
(4) the manner in which the costs are to be paid.
Section 25-25. Termination of proceedings.
(a) The arbitral proceedings are terminated by the final
award or by an order of the arbitral tribunal in accordance
with subsection (b) of this Section.
(b) The arbitral tribunal shall issue an order for the
termination of the arbitral proceedings when any one of the
following events occurs:
(1) The claimant withdraws its claim, unless the
respondent objects thereto and the arbitral tribunal
recognizes a legitimate interest on his or her part in
obtaining a final settlement of the dispute.
(2) The parties agree on the termination of the
(3) The arbitral tribunal finds that the
continuation of the proceedings has for any other reason
become unnecessary or impossible.
(c) Subject to Section 25-30 of this Act, the mandate of
the arbitral tribunal terminates with the termination of the
Section 25-30. Correction or interpretation of award;
(a) Within 30 days of receipt of the award, unless the
parties agree to another period of time:
(1) A party, with notice to the other party, may
request the arbitral tribunal to correct in the award any
error in computation, any clerical or typographical
errors, or any errors of similar nature.
(2) If so agreed by the parties, a party, with
notice to the other party, may request the arbitral
tribunal to give an interpretation of a specific point or
part of the award. If the arbitral tribunal considers
the request to be justified, it shall make the correction
or give the interpretation within 30 days of receipt of
the request. The interpretation shall form part of the
(b) The arbitral tribunal may correct any error of the
type referred to in subdivision (1) of subsection (a) of this
Section on its own initiative within 30 days of the day of
(c) Unless otherwise agreed to by the parties, a party,
with notice to the other party, may, within 30 days of
receipt of the award, request the arbitral tribunal to make
an additional award as to claims presented in the arbitral
proceedings but omitted from the award. If the arbitral
tribunal considers the request to be justified, it shall make
the additional award within 60 days after the date of receipt
of the request.
(d) The arbitral tribunal may extend, if necessary, the
period of time within which it shall make a correction,
interpretation, or an additional award under subsections (a)
or (c) of this Section.
(e) The provisions of Section 25-20 of this Act shall
apply to a correction or interpretation of the award or to an
additional award made under this Section.
ARTICLE 99. EFFECTIVE DATE
Section 99-99. Effective date. This Act takes effect
upon becoming law.