(1) The running of the limitation period is suspended when the obligee performs any act, by commencing arbitral proceedings or in arbitral proceedings already instituted, that is recognised by the law of the arbitral tribunal as asserting the obligee’s right against the obligor. In the absence of regulations for arbitral proceedings or provisions determining the exact date of the commencement of arbitral proceedings, the proceedings are deemed to commence on the date on which a request that the right in dispute should be adjudicated reaches the obligor.
(2) Suspension lasts until a binding decision has been issued or until the proceedings have been otherwise terminated.
1. Arbitral proceedings
Arbitration has the same effect as judicial proceedings. The commencement of arbitral proceedings therefore has the same suspensive effect as judicial proceedings. In general, the date of commencement is determined by the applicable arbitration rules and the starting point of suspension is also determined by these rules. For cases in which the rules on arbitration do not exactly determine the date of commencement of the proceedings, the second sentence of paragraph (1) of this Article provides a default rule.
A cancels a distributorship contract with B, claiming that B has defaulted payments due for A’s delivery of goods to B. B counterclaims damages for lost profits, but B changes its law firm and allows almost 30 months to pass from the termination of the agreement. The agreement contains an arbitration clause, providing that all disputes and claims “shall be settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce”, and B submits a request for arbitration under those rules. The rules provide that the date of receipt of the request is to be regarded “for all purposes” as the date of the commencement of the arbitral proceedings. The running of the limitation period is suspended until a final award is handed down or the case is otherwise disposed of.
2. Termination of arbitration
While the most frequent cases of termination will, as in judicial proceedings, be those that end with a decision on the merits of the case, arbitration can also end otherwise, e.g. by the withdrawal of an application, by a settlement or by an order or injunction of the competent court. The applicable rules on arbitration and civil procedure have to determine whether or not such events terminate the arbitration and thereby also the suspension.