AZERBAIJAN Law and Practice Contributed by: Parviz Huseynov, GRATA International, Azerbaijan
invalid, inoperative or incapable of being performed. In the absence of such an objection, the court shall proceed to determine the dispute on its merits, unless the party demonstrates that it was prevented, for rea - sons beyond its control, from raising the objection at an earlier stage. A corresponding provision is also contained in the Civil Procedure Code. It likewise requires the court to leave the claim without examination where the par - ties have concluded a valid arbitration agreement and a timely objection to court proceedings is raised by either party. An objection submitted at a later stage of the proceedings may also be admitted, provided that the party concerned establishes that it was unable to raise the objection before the examination of the merits for reasons beyond its control. 3.4 Validity The Law on Arbitration also governs the effect of an arbitration clause incorporated into a contract. Under the Law, the arbitral tribunal is empowered to rule on its own jurisdiction, including any objections concern - ing the existence or validity of the arbitration agree - ment. For this purpose, an arbitration clause forming part of a contract is treated as an agreement inde - pendent of the other contractual provisions. Accord - ingly, a finding that the underlying contract is invalid does not, ipso jure, render the arbitration clause inva - lid. This approach is fully consistent with Article 16 of the UNCITRAL Model Law, which likewise recognises the validity and independence of arbitration clauses.
The parties may also agree to entrust the appointment of arbitrators to a third party. In such circumstances, an application to the national courts for the appoint - ment of arbitrators may not be made. 4.2 Default Procedures Notwithstanding the broad autonomy afforded to the parties, the Law on Arbitration also establishes default rules governing the appointment of arbitrators where the parties have not agreed otherwise. In a sole-arbitrator arbitration, where the parties fail to agree on the appointment of the arbitrator, the appointment shall be made by the commercial courts upon the application of either party. In an arbitration with three arbitrators, each party appoints one arbitrator, and the two appointed arbitra - tors jointly appoint the third arbitrator. Where a party fails to appoint an arbitrator within 30 days of receiving the other party’s request, or where the two appointed arbitrators fail to agree on the appointment of the third arbitrator within 30 days of their appointment, the necessary appointment shall, upon the application of either party, be made by the commercial courts. 4.3 Court Intervention As noted in 4.2 Default Procedures , the commercial courts may intervene in the appointment of arbitrators in certain circumstances. In addition to those situa - tions, the Law on Arbitration permits a party to apply to the commercial courts for the necessary measures where the parties have agreed on a particular appoint - ment procedure, unless the parties’ agreement pro - vides otherwise. Such intervention is available where: • one of the parties fails to comply with the agreed appointment procedure; • the parties, or two arbitrators, are unable to reach the agreement required under that procedure; or • a third party entrusted with functions under the agreed procedure fails to perform those functions. Accordingly, judicial intervention in the agreed appointment procedure is available only where the parties have not established an alternative mechanism for addressing such situations.
4. The Arbitral Tribunal 4.1 Limits on Selection
The Law on Arbitration grants the parties broad dis - cretion to determine both the number of arbitrators and the procedure for their appointment, while the statutory rules apply only in the absence of an agree - ment between the parties. With regard to the compo - sition of the tribunal, the parties are free to determine the number of arbitrators, provided that it is an odd number. Failing such determination, the arbitral tribu - nal shall consist of three arbitrators.
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