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Dubai Arbitration Week Recap: New Frontiers in Arbitration – The MENA Region

Kluwer Arbitration Blog - Mon, 2018-12-17 16:30

Dalal Al Houti (Assistant Editor for the Middle East)

Since the inaugural programme in 2014, arbitration practitioners from the MENA region and beyond have come together to share and discuss recent developments in the field of international arbitration during the Dubai Arbitration Week, an annual event that takes place in November. Dubai Arbitration Week 2018 was no exception. It was full of seminars, conferences, and presentations, and filled with networking opportunities, breakfasts, lunches, dinners, and others. The week also featured the ‘Fourth Annual Law Rocks! Dubai’.

The underlying theme of Dubai Arbitration Week 2018 was new arbitration-related frontiers in and relevant to the MENA region, such as the new UAE arbitration law, new arbitration institutions (Delos Dispute Resolution), and developments in Africa. This blog post briefly covers some of these. 

New Arbitration Law 

The last three years have witnessed significant pro-arbitration developments in the legislative and regulatory framework of various countries in the Middle East, such as Bahrain (2015), Qatar (2017), Saudi Arabia (2017), Jordan (2018), and the UAE (2018). Dubai Arbitration Week 2018 placed the spotlight on UAE Federal Law No. 6 of 2018 on Arbitration (“New Arbitration Law” or the “Law”), which came into effect in June 2018.

The New Arbitration Law is an important development in the arbitration landscape of the UAE since it repeals the previous outdated Chapter on Arbitration contained in Articles 203 to 218 of Federal Law No. 11 of 1992 on the Civil Procedures Law (“CPC”). Some of the key aspects of the New Arbitration Law highlighted and discussed during the week were:

  1. International best practice and standards. The new Arbitration Law is broadly based on the UNCITRAL Model Law on International Commercial Arbitration. The Law expressly incorporates basic, yet fundamental, principles of international arbitration, such as the doctrine of separability, which recognizes that an arbitration agreement is separable from the underlying contract (Article 6), and the principle of competence-competence, which enables arbitral tribunals to decide on their own jurisdiction (Article 19).

 

  1. Arbitration objection. Under the old regime, if one of the parties initiates an action in the local courts, despite the existence of an arbitration agreement, and the other party does not object to such action at the first hearing or session, the action may proceed. In such cases, recourse to arbitration shall be deemed to have been waived by the parties. The ambit of the first hearing was not expressly clear. Did it, for example, include hearings where the defendant did not appear or instances where the defendant appeared only to ask for an adjournment? This led to confusion. Article 8 of the New Arbitration Law titled “adjudication of the dispute containing an arbitration agreement” clears this confusion as it lays down that the concerned court shall decline to entertain the action if the defendant raises an arbitration objection based on an arbitration agreement before making any claim or defence on the merits. This does away with the ‘first hearing’ requirement along with the confusion associated with it.

 

  1. Interim measures. The CPC was silent as to whether an arbitral tribunal could render interim measures. Article 21 of the New Arbitration Law now recognizes the arbitral tribunal’s power to award interim measures, including ordering an applicant party to provide adequate security to cover the costs of such measures. A party in whose interest an interim measure is granted can, upon a written authorization from the arbitral tribunal, further seek an enforcement order of such before the competent court.

 

  1. Efficiency. The New Arbitration Law significantly improves the efficiency of the arbitration process. A few examples include: continuation of the arbitral proceedings notwithstanding any application for interim measures or a challenge against an arbitrator; a 15-day time limit for the court to determine any challenge to an arbitral tribunal’s positive jurisdictional ruling; and a short six-month time limit from the date of the ‘first hearing’ within which the arbitral tribunal shall render the award. The Law also recognizes and allows the use of technology where possible. Instances include recognition of arbitration agreements concluded via email; the use of virtual hearings, allowing the cross-examination of witnesses and experts not physically present in the hearing room; and permitting awards to be signed electronically.

 

New Arbitration Institution

Delos, a Paris-based international arbitration institute established in 2014, held its Dubai-edition inaugural event during the Week, having held similar events in Hong Kong (March 2018), Paris (April 2018), São Paulo (October 2018) and Madrid (early November 2018). After Dubai, Delos went to New York for their last inaugural event of the year.

Delos was established to meet time and cost efficiency demands of start-ups and small and medium-sized enterprises. The institution seeks to provide an innovative approach to commercial dispute resolution with an emphasis on time and cost efficiency. This approach is enshrined in the four principles of its Rules. The institution issued its first arbitral award conducted under its Rules last year.

 

New Arbitration-Related Developments in Africa

During the Al Tamimi & Company and CRCICA networking lunch, discussions focused on arbitration in Africa. The African Arbitration Association (AfAA), a non-profit private sector-led association, was launched in June 2018. The launch of the Association was the culmination of a process that began with calls for a body to promote the use of African arbitration practitioners, arbitrators, and arbitration institutions. The AfAA will be based in Kigali, Rwanda (hosted at the Kigali International Arbitration Centre) and will hold its first General Assembly in early April 2019.

I-ARB Africa, aimed at shining a light on Africa’s legal and arbitration experts, made its debut at the Dubai Arbitration Week. I-ARB Africa is also the first online portal dedicated to international arbitration developments related to Africa and African parties. This unique initiative provides members with an open list called ‘Africa’s 100’ containing African arbitration practitioners whose experience in and knowledge of arbitration make them eligible to be appointed as arbitrators. I-ARB Africa also started its very own podcast this year which hosts dialogues and debates on arbitration-related developments through interviews with African arbitration experts.

Conclusion

As in previous years, Dubai Arbitration Week 2018 provided a platform for arbitration practitioners across both common and civil law jurisdictions and across the region to network and exchange notes. It provided a rare opportunity to get perspectives from arbitrators, practitioners, and staff of international arbitration institutes on the impact of, among other things, the new UAE arbitration law. The wait for Dubai Arbitration Week 2019 begins.

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Brexit, the Energy Charter Treaty and Achmea: An Unexpected Ray of Light?

Kluwer Arbitration Blog - Sun, 2018-12-16 22:26

Richard Power

Clyde & Co.

Perhaps the one thing that is certain about the UK’s departure from the European Union is that it is uncertain. It is not certain that the UK and the EU will strike a deal on their future trading relationship after the UK leaves the EU on 29 March 2019; it is not known whether the UK parliament will approve the deal governing the proposed 21-month ‘transition period’; indeed, it is not certain that the UK will actually leave the EU at all, as Article 50 can arguably be revoked.  Consequently, making predictions about a post-Brexit world is fraught with difficulty.

Subject to that caveat though, amongst the predictions of economic catastrophe, food and medicine shortages and social unrest, Brexit might offer an unlikely silver lining: it is possible that the UK will become the go-to offshore jurisdiction for EU companies wishing to make investments into other EU countries generally, and specifically in the energy sector.

 

Achmea, BITs and the ECT: where are we now?

After the decision of the Court of Justice of the EU (CJEU) in Slovak Republic v Achmea (Case C-284/16) the institutions of the EU and arbitral tribunals constituted under the Energy Charter Treaty (ECT) and intra-EU BITs are at loggerheads.

As far as the CJEU and the European Commission are concerned, intra-EU investor-state arbitration contravenes EU law. However, the tribunals in Masdar Solar & Wind Cooperatief U.A. v Spain; Antin Infrastructure v Spain; and Vattenfall AB and others v Federal Republic of Germany concluded that Achmea did not apply to arbitrations under the ECT, not least because the EU itself is a signatory to the ECT. UP and CD Holding Internationale v Hungary arrived at the same conclusion with regard to ICSID arbitrations.

All this means that future and even pending intra-EU BIT and ECT arbitrations might be stifled. While claimants can take heart from the consistent rejection of Achmea by arbitral tribunals, enforcement remains a real concern particularly as many disputes of this nature rely on third party funding, and funders may baulk at the exposure given the obstacles to obtaining payment of an award.

 

Enforcing an intra-EU BIT arbitration award in the UK

As matters stand, the UK is bound by the Achmea decision, and so an application to register and enforce an intra-EU BIT arbitration award in the UK would involve a balancing act between the requirements of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (enacted in Part III of the Arbitration Act 1996); or, in the case of an ICSID award, the UK’s international obligations under the ICSID Convention (enacted in the Arbitration (International Investment Disputes) Act 1966 (the 1966 Act)).

  • If enforcement is sought under the New York Convention, there are limited grounds on which enforcement of an award can be refused, but these include the invalidity of the arbitration agreement; the tribunal exceeding its authority; the non-arbitrabilty of the subject-matter of the award and/or enforcement being contrary to the public policy of that state in which enforcement is sought. Any of those grounds could provide the basis for an application to refuse recognition or enforcement of an intra-EU BIT award on the basis of the reasoning in Achmea.
  • If it is an ICSID award, it is final and binding, and immune from appeal or annulment, and must be enforced as a final domestic judgement of the court of the defendant state. The court would have to balance the Achmea decision against a violation of the UK’s international obligations.

How would an English court approach such a dilemma? English courts are generally viewed as being pro-arbitration and might enforce an award even in the face of Achmea-related objections. A clue to the courts’ approach might be in the Court of Appeal’s decision in Viorel Micula and others v Romania and European Commission (Intervener) ([2018] EWCA Civ 1801). In that case, the court considered an appeal of an order staying the enforcement of an ICSID award made against Romania under the Sweden-Romania BIT pending the outcome of Romania’s application to the General Court of the European Union seeking an annulment of the decision. The EC had issued a decision concluding that enforcement of the award would constitute illegal state aid and since the proceedings had been commenced, the Achmea decision had been handed down. Romania argued that s2(1) of the 1966 Act provides that a registered award shall be of the ‘same force and effect for the purposes of execution as if it had been a judgment of the High Court’; a judgment of the High Court would not be enforced if it was a breach of EU law to do so; and so the same should apply to the ICSID award.

Arden and Leggatt LJJ rejected this approach, holding that by enacting s2 of the 1966 Act, Parliament had intended to perform its international treaty obligations under the ICSID Convention; this included the obligation to enforce ICSID awards ‘automatically’; and the 1966 Act could not be understood to override the UK’s enforcement obligation under the ICSID Convention by requiring the court to decline to enforce a judgment contrary to EU law.  There is also the question of Article 351 of the Treaty on the Functioning of the European Union (TFEU), which provides that:

‘[t]he rights and obligations arising from agreements concluded before 1 January 1958 or, for acceding States, before the date of their accession, between one or more Member States on the one hand, and one or more third countries on the other, shall not be affected by the provisions of the Treaties’.

If the courts deemed that there was a conflict between the UK’s obligations under the ICSID Convention and its EU law duties, Article 351 arguably should resolve which should take precedence. It is noted that UK signed the New York Convention and the ICSID Convention before its accession to the EEC (which became the EU).

However, the English courts’ approach to this balancing act remains to be seen.

 

Brexit: an unexpected solution?

Against this background, Brexit might actually provide a solution for existing intra-EU ECT arbitrations.

The applicability of EU law to the UK after Brexit depends on whether the Withdrawal Agreement agreed between the UK and EU is adopted by parliament:

  • If the Withdrawal Agreement is adopted: although the UK will leave the EU at the end of March 2019, the UK will continue to apply EU law for the 21-month ‘transition period’. CJEU judgments made up to the end of the transition period (31 December 2020) will continue to apply to the UK.1)Article 85 of the Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community. jQuery("#footnote_plugin_tooltip_6923_1").tooltip({ tip: "#footnote_plugin_tooltip_text_6923_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

After the end of the transition period, the UK will no longer be bound by EU law, although CJEU case law adopted before exit day will, in effect, form part of EU law which will be ‘retained’ by the UK in principle as part of its domestic law. UK courts, other than the Supreme Court, will continue to be bound by EU laws and court decisions made before the end of the transition period.2)Sections 5 and 6 of the European Union (Withdrawal) Act 2018. jQuery("#footnote_plugin_tooltip_6923_2").tooltip({ tip: "#footnote_plugin_tooltip_text_6923_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

  • If the Withdrawal Agreement is rejected and UK leaves the EU with ‘no deal‘: There will be no transition arrangements, and from 30 March 2019 the UK will no longer be bound by EU law. CJEU case law adopted before exit day will be retained by the UK and UK courts, other than the Supreme Court, will be bound by EU laws and court decisions made before exit day.

As the tribunals in numerous post-Achmea ECT awards have pointed out, Achmea applies to intra-EU BITs and is silent on the question of its applicability to ECT, which is a multilateral treaty to which the EU itself is party.  However, this question has been referred to the CJEU on Spain’s application to the Svea Court of Appeal in Sweden in the context of the Novenergia case.3) Novenergia II – Energy & Environment (SCA) (Grand Duchy of Luxembourg), SICAR v The Kingdom of Spain (SCC Case No. 2015/063) jQuery("#footnote_plugin_tooltip_6923_3").tooltip({ tip: "#footnote_plugin_tooltip_text_6923_3", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });  If that is not decided before the exit date (i.e. 29 March 2019 with no transition period, 31 December 2020 with one), then the decision will not bind the UK. That might well provide the necessary latitude to the English courts, known for their supportive attitude towards arbitration, to adopt the same reasoning of the ECT tribunals mentioned above in rejecting Achmea’s applicability to ECT claims.

 

What now?

‘All we know is that we don’t know’, as a popular song goes, and that applies very much to Brexit. We don’t know what shape Brexit will take. If a wide-ranging trade deal is agreed between the UK and the EU, it might supersede the ECT and provide for investor-state disputes to be resolved in a different manner than arbitration: certainly the EU is seeking to include a standing investor-state court in its new trade deals. However, pursuant to Article 47(3) ECT the post-withdrawal period during which the ECT will continue to apply to pre-existing qualifying investments, commonly known as the ‘sunset period’, is 20 years. Thus, those investors who make qualifying investments prior to the UK withdrawing from the ECT would will still enjoy the protections of the ECT for 20 years after that date.

Moreover, even without Brexit, there is uncertainty regarding ECT claims in future. Consultation on the reform of the ECT is currently underway and it is possible that investor-state arbitration will be replaced by some other form of dispute resolution.

Consequently, making any predictions is a difficult exercise. Nevertheless, it is possible that Brexit will offer a way through the Achmea-arbitration stalemate for existing claimants and future investors.

References   [ + ]

1. ↑ Article 85 of the Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community. 2. ↑ Sections 5 and 6 of the European Union (Withdrawal) Act 2018. 3. ↑ Novenergia II – Energy & Environment (SCA) (Grand Duchy of Luxembourg), SICAR v The Kingdom of Spain (SCC Case No. 2015/063) function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: Arbitration in Belgium: A Practitioner’s Guide
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Case Study of Negotiations with Honey and Vinegar, Carrots and Sticks

ADR Prof Blog - Sun, 2018-12-16 21:25
Last week, House Democratic Leader Nancy Pelosi completed an impressive campaign of negotiations to be elected speaker of the House of Representatives. This post provides an account of this campaign, synthesized from news accounts listed at the end. One of the articles described Ms. Pelosi’s approach as being like honey, compared with President Trump’s vinegar strategy.  … Continue reading Case Study of Negotiations with Honey and Vinegar, Carrots and Sticks →

Case against Tunisia resumes with new panel

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Topical issues in ISDS: Latin America – A Review of Recent Developments – A report from the CERSA

Kluwer Arbitration Blog - Sat, 2018-12-15 16:05

Munia El Harti Alonso

The CERSA (CNRS-University Paris II Pantheon-Assas) organises a series of seminars on select topics in international investment law and investor-state dispute settlement (ISDS). The purpose of these seminars is to discuss and debate such topics bringing together academics, practitioners and policymakers in a small international group in Paris.

The conference about Topical issues in ISDS: Latin America – A Review of Recent Developments was held in Paris on 26 October 2018, moderated by Professor Catharine Titi (CERSA). Practitioners: Alvaro Galindo (Dechert, Washington, D.C.), José Ricardo Feris (Squire Patton Boggs, Paris) and Alejandro López Ortiz (Mayer Brown, Paris) gathered to discuss the latest reforms in investment arbitration in the Latin American (LATAM) Region.

I. A general comparison between the historical and current trends in Europe/the United States versus Latin America Lessons learnt from the first wave of calls for ISDS reform in the LATAM Region

Alvaro Galindo commented there was a first reaction in the LATAM region around 2007, when a multitude of cases were brought against Ecuador, Argentina, Venezuela and Bolivia among others. LATAM States started to react to the system as a consequence to those claims by denouncing some of their BITs and the ICSID Convention. Retrospectively , it was thought this reaction was irrational, but going back to 1964 during the Convention’s negotiations in Tokyo, all Latin American states voted no to the resolution.

That paradigm moved to another region of the World, Europe and particularly the European Union via the European Commission. The European Commission is to officially table the multilateral investment court‘s (MIC) proposal in the upcoming UNCITRAL Working Group III (WGIII) with some countries aligned, however the US position is still unclear. The Achmea Decision has also brought a loud discussion in the last months. If the EU is to succeed with the creation of a Multilateral Investment Court, we will have a parallel arbitration world, with a MIC system on one side, and further “contractualization” of investment arbitration on the other.

After Venezuela leaving ICSID, is the Achmea Decision a legitimization to leave existing ISDS mechanism?

Alejandro López Ortiz stated that LATAM countries can be criticized from a political perspective, but the treaties provided for exit mechanisms and those were triggered legitimately. Later on when European states started to be on the receiving end of ICSID, the European institutions started their own crusade with a rationale similar to the one in Latin America. This trend culminates in the Achmea decision, where the CJEU annulled consent of an intra-EU BIT, on the basis of the superiority of EU law. This resonates with the Rosatti Doctrine 1)Herz, Mariana, Recognition and Enforcement of Icsid Awards, Rosatti Doctrine and National Legislative Projects. El Derecho Vol. 214, p. 799, 2006. Available at SSRN: https://ssrn.com/abstract=917462 jQuery("#footnote_plugin_tooltip_1703_1").tooltip({ tip: "#footnote_plugin_tooltip_text_1703_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });; Rosatti by then Minister of Justice of Argentina, in 2005 during the eve of the CMS award, sustained that investment arbitration awards were against the constitution of Argentina.

Brazil for decades has remained outside of the traditional system but is now leading with a facilitation agreement without ISDS, is this a viable approach?

José Ricardo Feris observed Brazil has maintained a very pragmatic position as it does not need to attract investments through investment treaties, it rather relies on its history of not expropriating, having an independent judiciary system, and a pro-arbitration regulatory framework. There has been a new wave of treaties to promote investments within LATAM countries creating a multi-tiered system before the Ombudsman and a Joint Committee prior to State-to State arbitration (in certain treaties only). In the latter, the remedy consists in the removal of the measure but no economic compensation for the investor, which might be insufficient to incentivize investors to use this mechanism.

II. Concrete recent reforms in ISDS in the US and LATAM region The new USMCA and possible influence on Treaty making in the LATAM region

Alejandro López Ortiz recalled the difficult context of the USMCA negotiations, which lead to a somewhat “schizophrenic” dispute settlement mechanism, with three parties but two different mechanisms, and three separate regimes with the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) treaty. Arbitration remains only between US and Mexico. The new USMCA excludes the minimum standard (FET) and indirect expropriation from arbitration reducing the possibility of claims, considering that FET is the most invoked provision by investors.

Concerning USMCA influence, NAFTA modeled some LATAM Treaty making. For instance, NAFTA served as a basis for Mexico’s investment treaties. As the new treaty, the new model BIT of Ecuador also excludes indirect expropriation.

Commentary of the New Bolivian Arbitration Act of 2015

José Ricardo Feris noted the New Bolivian Arbitration Act contains an investment arbitration chapter. But it must be noted that Bolivia has restricted the areas and the way in which foreign investors can operate in Bolivia. Foreign investors may only act in certain sectors through PPPs. Disputes between the PPP members will be subject to this chapter as an investment dispute. Notably, the Act establishes that all of these investment arbitrations shall be seated in Bolivia. It is questionable whether investors would be attracted to these provisions, as these awards will be controlled by Bolivian courts. However, it is not uncommon for foreign investors to submit contractual disputes with State entities to arbitrations seated in the host State and subject to its law.

Argentina and Uruguay late adoption of UNCITRAL model arbitration law in the region possible positive spillover effects

The Argentinian adoption of UNCITRAL model Law is welcomed, but some reticence from Argentina to fully embrace international arbitration remains. This new law covers only international commercial arbitration, the local arbitration law still has a limited arbitrability involving the public administration. The approach concerning the setting aside of international awards based on “Argentinean public policy” grounds as opposed to the standard of “Argentinean international public policy” established for the enforcement of foreign awards may be a cause of concern, as it may not particularly promote Argentina as a potential arbitration seat.

Where does Ecuador stand today on foreign investment protection and how is that reflected in Ecuador’s proposal for a new model BIT?

Alvaro Galindo remarked the government sent messages to the international community that Ecuador is trying to move away from policies taken for the last decade through systemic changes in the legislation and the new model BIT. In August the new administration brought back to life a rule expelled from the legislation a few years ago for the recognition and enforcement of foreign awards in compliance with the New York Convention.

Concerning the new Ecuadorian draft BIT, the definition of an investment is quite restricted, the text conditions the investment to a positive contribution to the host state, and requires respect to human rights and the environment. A similar provision is contained in the Colombian model BIT. The draft excludes indirect expropriation. Also, the compensation evaluation based on the market value mandates to take in consideration the conduct of the investor and any damage caused by the investor to the environment or local communities. Those provisions are taking into account lessons learnt from the Occidental and Chevron cases.

III. Key recent decisions in Latin America:. Chevron v Ecuador

The Chevron saga with Track 3 for damages still pending, has an undeniable impact on the current Ecuadorian administration. The dispositive of the award rendered on August 30th provides Ecuador should take steps to leave without effect the 9.5 Billion USD judgment issued by a local court. Compliance with this decision seems problematic for Ecuador.

Philip Morris v Uruguay

José Ricardo Feris commented Uruguay is perceived as a safe investment-hub, it is also one of the countries most affected by the consumption of Tobacco backed by the World Health Organization Convention. The Philip Morris case was a welcome decision for Latin American and States worldwide confirming the states right to regulate, particularly on public health issues, and also confirming the application of a high standard when it comes to denial of justice.

Pacific Rim v  El Salvador, David Aven vs. Costa Rica and Álvarez y Marín Corporación S.A. v Panama 

Alejandro López Ortiz mentioned the three claims were rejected, as the tribunal enforced local laws aimed at protecting the environment or local communities.

In a nutshell, the Pacific Rim v El Salvador case dealt with the denial of an underground mining concession. The tribunal, acting on the basis of the local investment law, rejected the claim for lack of compliance with the local mining law.

In David Aven v Costa Rica (ICSID Case No. UNCT/15/3), the arbitral tribunal dismissed the claim that Costa Rica had revoked touristic development permits as it found that the investor was in breach of local law which protected wetlands and forests.

Finally, in Álvarez y Marín case against Panama, the tribunal rejected jurisdiction to hear claims for the expropriation of a tourist development, apparently for the breach of applicable laws protecting local communities.

Even if these cases do not have the worldwide impact of Philip Morris, they showcase the tendency for arbitral tribunals to uphold environmental law or the legality of the investment requirements, when the treaty contains clear provisions in that sense.

References   [ + ]

1. ↑ Herz, Mariana, Recognition and Enforcement of Icsid Awards, Rosatti Doctrine and National Legislative Projects. El Derecho Vol. 214, p. 799, 2006. Available at SSRN: https://ssrn.com/abstract=917462 function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: Arbitration in Belgium: A Practitioner’s Guide
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Brexit, Cognitive Biases and the Jurisdictional Conundrum

Kluwer Arbitration Blog - Sat, 2018-12-15 03:07

Gustavo Moser

In our post last month, we discussed the potential impact of Brexit on the choice of law to govern a contract and the law applicable to non-contractual claims. We also discussed that parties and party counsels should consider revisiting their choice of law strategies, but that in doing so, they should be conscious of the ‘cognitive threats’ that may cloud rational decisions and produce unwelcome results.1) For a deeper analysis of the topic, see Gustavo Moser, Rethinking Choice of Law in Cross-Border Sales, Eleven Publishing International, 2018. jQuery("#footnote_plugin_tooltip_2231_1").tooltip({ tip: "#footnote_plugin_tooltip_text_2231_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

In this post, we consider whether cognitive biases can influence the choice of jurisdiction and how Brexit fits into the discussions about these considerations.

 

  1. What is Choice of Jurisdiction and Why Does it Matter?

When a cross-border dispute is anticipated, questions that often arise are: where should I bring a legal action? What are the risks and costs involved if a court declines jurisdiction? What is the fate of the contract in case of parallel proceedings? And what happens if the courts do not enforce a choice of forum agreement? These questions and many more refer to the conflict of jurisdiction rules that are regulated by Civil Procedure Codes, Acts and Regulations.

There are a number of reasons for which parties initiate proceedings in the courts of a given State. For example, the differences in procedure and rules of evidence, the triad ‘efficacy-speed-cost’ of judicial proceedings (or lack thereof), familiarity with a given system, the language to be used, the court’s reputation, the strength of the profession and institutions, ease of enforcement of judgment, and differences in conflict of law rules.

The above (non-exhaustive) considerations are of paramount concern since the law of the forum will impose upon the parties a legal framework that provides for certain rules to be followed. This may or may not limit party autonomy in a contractual dispute.

 

  1. Cognitive biases

We discussed in our earlier post that we are not immune to ‘threats’ posed by cognitive biases, which can lull us into a false sense of rationality of our decision-making processes. This can mean that individuals often fail to foresee and consider all available options. These cognitive biases, or ‘hidden forces’, routinely influence and colour our decisions and, regrettably, can lead us to decisions which are not in our best interest.

With all this in mind, and with Brexit looming over us, it is time for a dispassionate and risk management analysis of the choice of jurisdiction using Kanheman’s System 2. This includes the support of more tangible characteristics associated with a choice of jurisdiction: ways to finance and secure the transaction; differences in conflict of law rules; cost of learning an unknown or less familiar court system; difficulties of enforcing a resulting decision in unfriendly or hostile jurisdictions; in addition to potential procedural pitfalls, such as the evidentiary phase, deadlines, confusing or unclear payment mechanics, and recalcitrant debtors.

 

  1. Brexit and the Jurisdictional Conundrum

Decisions of law and jurisdiction often intersect and, given the Brexit uncertainties, stakeholders should inevitably look for prospective options to enforce their contractual arrangements and also be mindful of the legal framework available for non-contractual claims.

 

Current status

The European Union agreed on the UK Government’s draft EU withdrawal agreement (the Draft) on 25 November 2018. The UK Parliament is expected to hold the vote on the Draft by 21 January 2019.

As it currently stands, the Draft establishes a transition period that will last for 21 months from March 2019 to the end of December 2020. During this time, Rome I will continue to apply to contractual obligations, and Rome II will apply to non-contractual obligations, albeit with a modification placed on the timing of the event that gives rise to the damage (in contrast to Rome II which prescribes that the applicable law is the law of the place of the damage regardless of the place in which the event giving rise to the damage occurred). The Draft also states that the current judicial cooperation between the UK and EU Member States in civil and commercial matters (Brussels Recast Regulation) will remain in operation and enforceable in the UK until the end of the transition period. The same applies to service of documents, witness evidence, and other enforcement cooperation on uncontested claims and small claims (Articles 66-68).

 

Prospects

Hague Convention on Choice of Court Agreements

Whilst there is uncertainty as to how cross-border matters will be conducted after 2020, the UK Government has issued an Explanatory Memorandum on the (re)accession of the UK to The Hague Convention on Choice of Court Agreements (2005 Hague Convention) after Brexit.

The Memorandum points out that once the UK leaves the EU and, in the absence of a future agreement in the area, the Brussels Recast Regulation will not longer bind the UK. The Memorandum further states that the UK intends to become an independent contracting party to the 2005 Hague Convention and will apply the Convention’s rules with all other contracting parties including the EU Member States.  While there may be some transitional wrinkles, it is a welcome alternative to the issue of enforceability of a judgment in the EU Member States.

Hague Judgments Convention

A further Hague Convention on the recognition and enforcement of foreign judgments in civil an commercial matters (the Judgments Project) is still being negotiated, but a draft has been produced and a Diplomatic Session is likely to be convened for mid-2019. The Judgments Project aims to establish uniform rules on the recognition and enforcement of judgments, by the use of a simple, efficient and predictable structure, thereby facilitating the enforcement process and reducing the related costs in cross-border transactions.

Arbitration

The Draft suggests that little impact is likely to take effect until the end of the transition period, i.e. end of December 2020. Parties may, however, wish to iron out uncertainties and facilitate agreements by inserting an arbitration clause in their contracts, bearing in mind that the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 NY Convention) will be unaffected by Brexit.

 

  1. Conclusion

With Brexit on its way (at least, at the time of writing this post), it is an opportune moment to review business strategies widely, but by wearing the ‘glasses’ of the coherent, deliberative and effortful System 2. This means executing rational and coherent decisions. Although the speed of System 2 decisions may not reconcile with the time demands of Brexit, decisions of this nature will have a profound impact on future agreements. For this reason, this author submits that parties should rely on System 2 in their decision-making processes around choice of jurisdiction, where the mind is rule-based, analytic and controlled and where reason dominates.

The author therefore proposes that parties adopt appropriate safeguards for risk management. While there is a plethora of ways to read and interpret warning signs from the market, parties may wish to consider the use of checklists (subject to a party’s position in the contract chain), itemising tangible elements which could enhance the level of rationality of the choice of jurisdiction. For example: what is the fundamental objective(s) attached to my jurisdiction clause or an absence thereof? Do I seek/envisage enforcement in the EU Member States? Would a potential injunction across EU Member States be necessary and/or beneficial? Is a particular relief likely to be sought given my legal/business area, type of agreement, or risks assumed in the agreement? Would enforcement be a major concern or, rather, a tactical move that the party can only sue or be sued in a court in which I place more confidence? All other conditions permitting, would an arbitration clause be a viable choice?

References   [ + ]

1. ↑ For a deeper analysis of the topic, see Gustavo Moser, Rethinking Choice of Law in Cross-Border Sales, Eleven Publishing International, 2018. function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: Arbitration in Belgium: A Practitioner’s Guide
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Three ‘Pitfalls’ for the Unwary: Third-Party Funding in Asia

Kluwer Arbitration Blog - Fri, 2018-12-14 22:53

Darius Chan

YSIAC

Part I

For some time practitioners would have seen news alerts headlining that third-party funding is now permitted in Singapore and Hong Kong for arbitration and arbitration-related court proceedings.  Digging a little deeper beyond the shiny new labels, this article highlights three practical “pitfalls’ which practitioners would have to be mindful of when dealing with third-party funding in Singapore and Hong Kong.

First, there are various disclosure obligations (and in Singapore, those obligations fall on counsel); secondly, funded claimants should expect to see respondents filing requests for the funded claimant to disclose the terms of the funding agreement; and thirdly, respondents ought to be aware that costs of litigation funding may be awarded against the respondent as part of a costs award.

 

Disclosure Obligations

Generally speaking, registered foreign lawyers and Singapore solicitors who are bound by Singapore’s Legal Profession (Professional Conduct) Rules 2015 (Singapore PCR) must disclose, to the court or tribunal and every other party to the proceedings, the existence of any third-party funding contract, as well as the identity and address of any third party funder, “when conducting any dispute resolution proceedings before a court or tribunal”. (Rule 49A(1) of the Singapore PCR)  For funding contracts entered into prior to the commencement of proceedings, the disclosure must be made at the date of commencement of those proceedings. For funding contracts entered into on or after the date of commencement of proceedings, disclosure must be made “as soon as practicable”. (Rule 49A(2) of the Singapore PCR)

In Hong Kong, under Article 98U of the Arbitration Ordinance, a funded party is obliged to give written notice of the fact that a funding agreement has been made, and the name of the funder, to each other party and the arbitration body (which is defined to mean the tribunal or court, the emergency arbitrator or the mediator as the case may be).  For funding contracts entered into on or before the commencement of proceedings, the disclosure must similarly be made on commencement of those proceedings. For funding contracts entered into after the date of commencement of proceedings, disclosure must be made within 15 days after the funding agreement is made.

Taking a step back, disclosure is seen to be important in avoiding potential conflict of interests, for example, an arbitrator or her colleagues or firm may have a relationship with a third-party funder involved in the case or where there are repeat appointments for an arbitrator in cases involving the same funder.   However, unlike Hong Kong which places the disclosure obligation on parties, Singapore has chosen to place the disclosure obligation on counsel instead.  This raises several issues.

First, it may create an uneven playing field.  Unregistered foreign counsel who “fly in and fly out” of Singapore to represent parties in Singapore-seated arbitrations do not appear to be bound by the disclosure requirements under the Singapore PCR.

Second, the involvement of one Singapore-registered counsel (whether junior or otherwise) in an otherwise multi-jurisdictional counsel team may in and of itself trigger the disclosure obligations under the Singapore PCR.

Third, under section 98N of the Hong Kong Arbitration Ordinance, the disclosure obligation appears to be triggered not just for arbitrations seated in Hong Kong, but also for arbitrations where the legal services for that arbitration are provided in Hong Kong.  The situation is less clear for Singapore.  Are the disclosure obligations on counsel under the Singapore PCR triggered for Singapore-seated arbitrations, or arbitrations seated elsewhere but heard in Singapore, or both? The definition of “tribunal” under the Singapore PCR defines the term “tribunal” to mean “… any tribunal in Singapore that is established by law” including “any arbitral tribunal as defined in … section 2(1) of the International Arbitration Act”. (Rule 2 of the Singapore PCR)  Arguably this definition extends to (i) Singapore-seated arbitrations regardless of where hearings are conducted; and (ii) arbitration proceedings with hearings conducted in Singapore regardless of the seat of the arbitration; although this is by no means clear.

It may be a matter of time before all major arbitral rules (and investment treaties) require parties to disclose the existence of third-party funding arrangements.  For instance, Rule 44 of the new 2018 HKIAC Administered Arbitration Rules coming into force on 1 November 2018 contains such disclosure rules.  Under Rule 24(l) of the SIAC Investment Arbitration Rules, the Tribunal has the express power to order disclosure of the existence of a party’s third-party funding, including details of the funder’s interest in the outcome of the proceedings.

In this connection, practitioners should be aware of SIAC Practice Note PN – 01/17 dated 31 March 2017 (SIAC Practice Note) which sets out standards of practice and conduct to be observed by arbitrators in SIAC arbitrations that are funded. The SIAC Practice Note provides that arbitrators have the power to order the disclosure of the existence of third-party funding, including details of the funder’s interest in the outcome of the proceedings.

What next if one finds oneself in a proceeding where a funded party (typically the claimant) has made a disclosure on the existence of a funding agreement?

 

Part II

Security for costs & disclosure of terms of funding agreement

A possible first reaction may be to think about applying for security for costs against the funded claimant.  Such an application may be accompanied or preceded by an application seeking an order that the claimant discloses the terms of the funding agreement. Consequently, funded claimants should expect to see respondents filing such disclosure requests.

Respondents seeking security will typically argue that, in the absence of security, the respondent will be unable to enforce a potential costs award against the claimant because the claimant has no funds of its own, and the respondent has no means of enforcement against the third-party funder directly.  The counter-argument for claimants has been that “[t]he fact of having financing alone does not imply risk of non-payment” and that ordering security every time that third-party funding is established would “increas[e] the risk of blocking potentially legitimate claims”.1) South American Silver Limited (Bermuda) v Bolivia (UNCITRAL), Procedural Order No. 10, 11 January 2016, paragraphs 75 to 77. jQuery("#footnote_plugin_tooltip_2528_1").tooltip({ tip: "#footnote_plugin_tooltip_text_2528_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); The SIAC Practice Note expressly states that the involvement of a funder alone shall not be taken as an indication of the financial status of a disputant party.

Hitherto, investment and commercial arbitration tribunals tend to reject security for costs applications which are mainly or exclusively based on the grounds that the claimant is funded by a third party funder.2) See for instance, Guaracachi America, Inc. and Rurelec PLC v Bolivia (UNCITRAL), Procedural Order No. 14, 11 Mar 2013; EuroGas Inc. and Belmont Resources Inc. v Slovak Republic (ICSID), Procedural Order No. 3, 23 Jun 2015; South American Silver Limited (Bermuda) v Bolivia (UNCITRAL), Procedural Order No. 10, 11 Jan 2016.  See also ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration, April 2018, Chapter 6. jQuery("#footnote_plugin_tooltip_2528_2").tooltip({ tip: "#footnote_plugin_tooltip_text_2528_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });   Nevertheless, there is a practical difference when it comes to burden of proof.  At one end of the spectrum it is well-known that, Gavan Griffith QC, in his capacity as tribunal member in an investor state arbitration has suggested that, once third-party funding is revealed, “the onus is cast on the claimant to disclose all relevant factors and to make a case why security for costs should not be made”.3) RSM Production Corporation v St Lucia, Assenting Reasons of Gavan Griffith QC, 12 August 2014, paragraph 18. jQuery("#footnote_plugin_tooltip_2528_3").tooltip({ tip: "#footnote_plugin_tooltip_text_2528_3", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); A similar approach has been suggested by others, namely “where a party appears to lack assets to satisfy a final costs award, but is pursuing claims in an arbitration with the funding of a third party, then a strong prima facie case for security for costs exists”.4) Gary Born, International Commercial Arbitration, page 2496. jQuery("#footnote_plugin_tooltip_2528_4").tooltip({ tip: "#footnote_plugin_tooltip_text_2528_4", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

In relation to an application for security for costs, the terms of a funding agreement are arguably relevant, such as whether the funder is liable to pay an adverse costs order against the claimant and whether and under what conditions the funder can stop funding the claimant.  Consequently, practitioners acting for respondents may consider taking out applications requesting that the claimant disclose the terms of the claimant’s funding agreement—one would expect such applications to made almost routinely when a claimant has disclosed the existence of a funding agreement in the first instance.

Hitherto, investment arbitration tribunals have been divided on whether to allow such applications for disclosure.5) See, for instance, South American Silver Limited (Bermuda) v Bolivia (UNCITRAL), Procedural Order No. 10, 11 Jan 2016; Muhammet Çap & Sehil Inşaat Endustri ve Ticaret Ltd. Sti. v Turkmenistan (ICSID), Procedural Order No. 3, 12 Jun 2015;  Guaracachi America, Inc. and Rurelec PLC v Bolivia (UNCITRAL), Procedural Order No. 13, 21 Feb 2013; Teinver S.A. et al v Argentina (ICSID), Decision on Jurisdiction, 21 Dec 2012. jQuery("#footnote_plugin_tooltip_2528_5").tooltip({ tip: "#footnote_plugin_tooltip_text_2528_5", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });  It has been suggested that tribunals ought to accept an application for disclosure of third-party funding agreements, but should limit disclosure orders to the provisions that are strictly necessary to assess the extent to which the funder may cover (or not) an adverse costs order.6) ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration, April 2018, Chapter 6. jQuery("#footnote_plugin_tooltip_2528_6").tooltip({ tip: "#footnote_plugin_tooltip_text_2528_6", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); In any event, a funded claimant ought to be prepared that all the terms of its funding agreement would be subject to disclosure.

Does the foregoing mean it would be in the claimant’s interest to resist disclosure of the terms of its funding agreement?

 

Costs of Litigation Funding Included As Part of Costs Award

Arguably no. This is because an arbitral tribunal seated in Singapore or Hong Kong could order that the costs incurred by a party to obtain funding is to be borne by the opposing party.

The Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration has suggested that costs of obtaining third-party funding could be awarded as part of a costs award, subject to (i) the test of reasonableness; and (ii) disclosure of the details of funding costs from the outset of or during the arbitration so that the award debtor can assess its exposure.

In Essar Oilfields Services Limited v Norscot Rig Management PVT Limited [2016] EWHC 2361 (Comm), the English High Court upheld a costs award under which an ICC tribunal awarded Norscot, inter alia, £1.94m, being the sum owed by Norscot to a third-party funder for advancing Norscot the legal costs to bring the underlying claim against Essar. The funding arrangement was as follows: Norscot obtained funding of £647,000 in exchange for which the funder was entitled, if Norscot succeeded, to an uplift equivalent to 300% of the funding or 35% of Norscot’s recovery, whichever was greater.

Under sections 59 and 61 of the English Arbitration Act 1996, a tribunal may make an award allocating the costs of the arbitration between the parties.  The costs of the arbitration include “legal or other costs of the parties”.  The English High Court took the view the phrase “other costs” can include the costs of obtaining litigation funding.  The awarding of such costs was therefore within the tribunal’s general discretion on costs.

It was not clear from the judgment whether Essar was aware, at the outset, of Norscot’s terms of funding, but the judgment did record how Essar had forced Norscot, by Essar’s unreasonable conduct, into a position where Norscot had no alternative, but to obtain third-party funding.

The statutory provisions in Singapore and Hong Kong do not provide that an arbitrator can award “legal or other costs of the parties”.  For instance, Article 74 of Hong Kong’s Arbitration Ordinance provides that an arbitral tribunal may include in an award directions “with respect to costs of the arbitration proceedings”.

Institutional rules are perhaps clearer on this issue.  Rule 37 of the 2016 SIAC Rules provides that the tribunal shall have the authority to order “the legal or other costs of a party be paid by another party” (italics added).  The SIAC Practice Note further states that a tribunal may take into account the existence of any funder in (i) apportioning the costs of the arbitration; and (ii) in ordering in its award that all or a part of the legal or other costs of a party be paid by another party.  Similarly, Rule 35 of the SIAC Investment Arbitration Rules and Rule 34.4 of the 2018 HKIAC Administered Arbitration Rules both allow an arbitral tribunal to take into account any third-party funding arrangement in fixing and apportioning the costs of arbitration.

Hitherto, the Singapore courts have been reluctant to interfere with a tribunal’s costs award.7) VV v VW [2008] 2 SLR(R) 929. jQuery("#footnote_plugin_tooltip_2528_7").tooltip({ tip: "#footnote_plugin_tooltip_text_2528_7", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); The Hong Kong courts have gone a step further by granting, in the absence of special circumstances, indemnity costs for unsuccessful challenges to an arbitration agreement or to an award.8) Chimbusco International Petroleum (Singapore) Limited v Fully Best Trading Limited [2015] HKEC 2573.  See also Peter Cheung & Co v Perfect Direct Limited & Yu Guolin (HCMP 2493/2012) and New Heaven Investments Limited & Rondo Development Limited v Yu Guolin (HCA 115/2013). jQuery("#footnote_plugin_tooltip_2528_8").tooltip({ tip: "#footnote_plugin_tooltip_text_2528_8", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); In an appropriate case, it is therefore arguable that a SIAC or HKIAC tribunal in a Singapore or Hong Kong-seated arbitration could award the costs of third-party funding as part of its costs award against a respondent.

References   [ + ]

1. ↑ South American Silver Limited (Bermuda) v Bolivia (UNCITRAL), Procedural Order No. 10, 11 January 2016, paragraphs 75 to 77. 2. ↑ See for instance, Guaracachi America, Inc. and Rurelec PLC v Bolivia (UNCITRAL), Procedural Order No. 14, 11 Mar 2013; EuroGas Inc. and Belmont Resources Inc. v Slovak Republic (ICSID), Procedural Order No. 3, 23 Jun 2015; South American Silver Limited (Bermuda) v Bolivia (UNCITRAL), Procedural Order No. 10, 11 Jan 2016.  See also ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration, April 2018, Chapter 6. 3. ↑ RSM Production Corporation v St Lucia, Assenting Reasons of Gavan Griffith QC, 12 August 2014, paragraph 18. 4. ↑ Gary Born, International Commercial Arbitration, page 2496. 5. ↑ See, for instance, South American Silver Limited (Bermuda) v Bolivia (UNCITRAL), Procedural Order No. 10, 11 Jan 2016; Muhammet Çap & Sehil Inşaat Endustri ve Ticaret Ltd. Sti. v Turkmenistan (ICSID), Procedural Order No. 3, 12 Jun 2015;  Guaracachi America, Inc. and Rurelec PLC v Bolivia (UNCITRAL), Procedural Order No. 13, 21 Feb 2013; Teinver S.A. et al v Argentina (ICSID), Decision on Jurisdiction, 21 Dec 2012. 6. ↑ ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration, April 2018, Chapter 6. 7. ↑ VV v VW [2008] 2 SLR(R) 929. 8. ↑ Chimbusco International Petroleum (Singapore) Limited v Fully Best Trading Limited [2015] HKEC 2573.  See also Peter Cheung & Co v Perfect Direct Limited & Yu Guolin (HCMP 2493/2012) and New Heaven Investments Limited & Rondo Development Limited v Yu Guolin (HCA 115/2013). function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: Arbitration in Belgium: A Practitioner’s Guide
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Marty Ltd v Hualon Corporation (Malaysia) Sdn Bhd: A Commentary on Its Significance for Arbitration in Singapore

Kluwer Arbitration Blog - Fri, 2018-12-14 22:27

Derric Yeoh

YSIAC

Introduction

On 10 October 2018, the Singapore Court of Appeal (“Court of Appeal”) issued its decision on the case of Marty Ltd v Hualon Corporation (Malaysia) Sdn Bhd [2018] SGCA 63 (“Marty v Hualon“) which concerned a dispute over the repudiation of an arbitration agreement. While the case contained a number of interesting issues, this case commentary will focus on the Court of Appeal’s decision that the commencement of court proceedings is prima facie a repudiation of the arbitration agreement.

 

Background Facts

On 22 July 2014, the receiver and manager (“Receiver”) of Hualon Corporation (Malaysia) Sdn Bhd (“Hualon”) commenced litigation proceedings, on behalf of Hualon, in the courts of the British Virgin Islands (“BVI”) against Marty Ltd (“Marty”) for the wrongful deprivation of Hualon’s shareholding in a Vietnamese subsidiary, in breach of the arbitration agreement that was inserted into Hualon’s company charter when it was re-registered in February 2008 (the “Revised Charter”).

According to the Receiver, it was only at the end of February 2015 (some 7 months after the commencement of the BVI proceedings) that it discovered the presence of the arbitration agreement. On 10 March 2015, Hualon filed a Notice of Arbitration with SIAC.

On 26 March 2015, Marty applied to the BVI court for summary judgment to strike out the BVI action by the Receiver.

On 20 April 2015, more than one month after the Notice of Arbitration was filed, Hualon applied to the BVI court to stay the BVI proceedings in favour of arbitration. At this point in time, the BVI proceedings had been running concurrently with the arbitration proceedings.

On 19 June 2015, the arbitral tribunal was constituted. In the arbitration, Marty challenged the arbitral tribunal’s jurisdiction but the arbitral tribunal rejected Marty’s challenge and ruled in April 2016 that it had jurisdiction over the dispute.

In May 2016, Marty then commenced proceedings in the Singapore High Court to challenge the arbitral tribunal’s decision, arguing among other things that Hualon’s conduct of commencing the BVI litigation proceedings and taking further steps in the litigation after the commencement of the arbitration meant that Hualon had repudiated the arbitration agreement.

The High Court Judge found inter alia that the BVI action was not a breach as Hualon was unaware of the arbitration agreement and therefore did not have the necessary repudiatory intent. Marty then appealed to the Court of Appeal. The quorum consisting of Chief Justice Sundaresh Menon, Justice of Appeal Judith Prakash (who delivered the judgment of the court), and Justice of Appeal Tay Yong Kwang, issued a landmark decision which made the legal observations discussed below.

 

The Court of Appeal’s decision

  • The commencement of court proceedings without any accompanying qualification or explanation by a party bound by an arbitration agreement will be regarded as a prima facie repudiation of the arbitration agreement. This is because parties who enter into a contract containing an arbitration clause are entitled to expect that disputes arising out of the contract would be resolved by arbitration and not litigation. ([60] of Marty Ltd v Hualon Corporation (Malaysia) Sdn Bhd [2018] SGCA 63)
  • In this case, the fact that Hualon had sought substantive relief in the BVI proceedings which would resolve the dispute would have led a reasonable person in Marty’s position to conclude that Hualon no longer intended to abide by the arbitration agreement and was repudiating the agreement. ([66] of Marty Ltd v Hualon Corporation (Malaysia) Sdn Bhd [2018] SGCA 63)
  • However, this prima facie conclusion can be displaced by furnishing an explanation for the commencement of the court proceedings, either on the face of the proceedings themselves or by reference to events and correspondence occurring before the proceedings started which showed objectively that there was no repudiatory intent in doing so. ([68] of Marty Ltd v Hualon Corporation (Malaysia) Sdn Bhd [2018] SGCA 63)
  • The assessment of repudiation is an objective inquiry. The breaching party cannot justify the repudiatory breach if the reason was a purely subjective one that was not communicated to the innocent party. In this case, Hualon submitted that it was not aware of the arbitration agreement, which the Court considered would have been impossible for Marty, the innocent party, to discern from the actions of Hualon in commencing litigation proceedings. ([74] of Marty Ltd v Hualon Corporation (Malaysia) Sdn Bhd [2018] SGCA 63)
  • The Court of Appeal thus held that Hualon had repudiated the arbitration agreement by commencing and maintaining court proceedings in the BVI for ten months without reserving its right to arbitration. The fact that Hualon did not have actual knowledge of the arbitration agreement was rejected as the Court of Appeal ruled that parties were in any event deemed to know all of the contractual terms (including the arbitration agreement) of the relevant contractual documents they enter into.
  • In addition, it also found that the repudiation was accepted by Marty on 26 March 2015 when it engaged the jurisdiction of the BVI court by requesting for a summary judgment. As this would have disposed of the dispute, the Court of Appeal found this to be an unequivocal indication of Marty’s intention to accept the repudiation.

 

Comments

The Singapore Court of Appeal’s decision that a commencement of litigation proceedings is prima facie a repudiation of the arbitration agreement is significant in several ways.

A different approach

First, this decision is noteworthy as it departs from the established common law jurisprudence on this issue. Until this decision by the Singapore Court of Appeal, there was a clear consensus in case law that the mere commencement of litigation proceedings on its own was insufficient to constitute a prima facie repudiation of the arbitration agreement. Even Marty’s counsel (who was arguing for repudiation) had accepted it to be the rule and the Singapore Court of Appeal had also acknowledged the number of authorities supporting this view. ([54] and [56] of Marty Ltd v Hualon Corporation (Malaysia) Sdn Bhd [2018] SGCA 63)

Indeed, the only authority which the Singapore Court of Appeal had relied on in support of its new approach was the English Commercial Court case of Sadruddin Haswani v Nurdin Jivraj [2015] EWHC 998 (Comm). While this case had a different factual matrix (it was about the repudiation of one arbitration agreement in favour of another arbitration agreement), the Court of Appeal was able to distill the following principle:

Where a party has two methods of dispute resolution open to him, his reliance on one to resolve a dispute on the merits signifies that he does not intend to rely on the other to resolve the same dispute” ([55] of Marty Ltd v Hualon Corporation (Malaysia) Sdn Bhd [2018] SGCA 63)

The difference between the Singapore Court of Appeal’s approach and the approach taken in previous jurisprudence such as Rederi Kommanditselskaabet Merc-Scandia IV v Couniniotis SA (The “Mercanaut”) [1980] 2 Lloyd’s Rep 183 is a matter of degree: the Singapore Court of Appeal opined that commencement of court proceedings in the presence of an arbitration agreement is a prima facie repudiation, while Lloyd J in The Mercanaut was of the view that the commencement of court proceedings is insufficient to show that there was an unequivocal intention to repudiate the arbitration agreement.

While the statements made by the Singapore Court of Appeal are obiter dicta and therefore have no binding effect under the common law doctrine of stare decisis, it nevertheless remains a highly persuasive legal authority for future cases heard in the Singapore courts.

The effect on parties with arbitrations seated in Singapore

Secondly, this decision is important as it will have consequences for parties with arbitrations seated in Singapore. For example, a party commencing litigation proceedings for the tactical reason of applying more pressure onto the opposing party may find itself foreclosed of the option to arbitrate if the opposing party engages in the litigation proceedings. The responding party will likewise be affected if it decides to engage in the litigation proceedings (thereby accepting the repudiation) to defend itself instead of requesting for a stay of proceedings in favour of arbitration. However, parties can provide a disclaimer or explanation in the proceedings to displace the prima facie presumption of a repudiation of the arbitration agreement.

The practical effect of the decision is that parties must give careful thought to which form of dispute resolution it intends to use and what course of action they intend to take instead of doing so in a haphazard manner which will result in concurrent court proceedings and arbitration. There will also be greater efficiency for the parties who choose arbitration or litigation, as it ensures that there is no unnecessary and messy overlap between the two forms of dispute resolution which will save time and costs for the parties and in some instances, free up court resources.

 

Conclusion

The Singapore Court of Appeal decision of Marty v Hualon is a landmark case which held that the commencement of court proceedings is a prima facie repudiation of the arbitration agreement. Given that it departs from established case law, it is important for parties to be aware of its implications. In particular, parties who intend to resolve their disputes through arbitration should be careful with commencing or engaging in court proceedings without proper disclaimer as that will constitute a prima facie repudiation of the arbitration agreement. This decision should thus be welcomed as it will save time and costs for the parties and, as a result, reduce wastage of court resources.

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Chinese Investments in Latin America: Disputes along the Non-Conventional Belt and Road

Kluwer Arbitration Blog - Thu, 2018-12-13 17:00

Guilherme Rizzo Amaral

Introduction

In October 1865, Sir Robert Hart, a former British diplomat and by then an official in the Qing Chinese Government, wrote to Empress Dowager Cixi expressing his opinion that China should desperately seek progress through investments in mining, the telegraph, the telephone and especially in railways. The reaction of Empress Cixi’s closest advisors was harsh. The words of Earl Li well describe the mood of Chinese officials towards the measures Hart advocated: “they deface our landscape, invade our fields and villages, spoil our feng-shui, and ruin the livelihood of our people”.1)This episode is described in the biography “Empress Dowager Cixi: The Concubine Who Launched Modern China”, by Jung Chang. jQuery("#footnote_plugin_tooltip_2488_1").tooltip({ tip: "#footnote_plugin_tooltip_text_2488_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

Who could imagine that, 150 years later, China would be the world’s most passionate advocate of the same progress it once admonished. With the Belt and Road Initiative (BRI), China unleashes a bold plan to invest between US$ 1 and 8 trillion in infrastructure and other means to connect over 65 different countries which collectively represent more than 60% of the global population and 30% of global GDP.

Conventionally, the BRI refers primarily to the terrestrial belt linking China to Central and South Asia and onward to Europe, and the maritime road linking China to the nations of South East Asia, the Gulf Countries, North Africa and on to Europe. And yet recent statements by President Xi Jinping and a declaration signed during the Second China-CELAC Ministerial Forum in January 2018 indicate that Latin America is a “natural extension” of the Maritime Silk Road. In fact, over the past 10 years, Latin America has been second only to Asia as a destination of Chinese investments. This is why one can also think of a non-conventional BRI, one more associated to a mindset than to a strict geopolitical plan of investments.

The purpose of this article is not to offer a one-size-fits-all dispute resolution method for conflicts arising from the non-conventional BRI, but rather to raise some of the issues that might be addressed in the future on a case-by-case basis.

Judiciary or Arbitration?

The less likely dispute resolution mechanism to be sought in BRI disputes is the Judiciary. With the exception of Mexico, no Latin American country has ratified the Hague Choice of Court Convention. China, on the other hand, signed it in 2017, but has not yet ratified it. That means that starting proceedings in the court of choice will not prevent any of the parties from starting proceedings in the courts of their own state.

What is more, the choice of court is a “tough sell”, especially when it falls upon the national courts of one of the parties’ state. Lack of impartiality will often be raised, be it because of the weak civil justice system in some Latin American countries, be it, in the case of China, because of the direct submission of the Supreme People’s Court (SPC) to the Standing Committee of the National People’s Congress (article 67[6] of the Constitution of the People’s Republic of China).

With the recent creation of the China International Commercial Courts (CICC) in Shenzhen and Xi’an, China proposes a one-stop platform for BRI disputes. However, these courts hardly qualify as “international”: they have no foreign judges and only Chinese law-qualified lawyers are allowed to represent the parties. Besides, saving rare exceptions, even if the parties choose the CICC to solve their conflicts, there is a threshold of RMB 300 million (approximately USD 42 million) for a case to be heard.

Regardless, the CICC will still play an important role in BRI disputes, especially given their jurisdiction to hear cases “involving applications for preservation measures in arbitration, for setting aside or enforcement of international commercial arbitration awards” (article 2[4] of the CICC provisions).

That leaves the parties with arbitration. Though mediation and other amicable methods of dispute resolution should evidently be encouraged, a provision for arbitration in case those methods fail is highly desirable. Arbitration is perhaps the only stable and predictable framework for solving disputes involving so many different nationalities and geopolitical interests.

Investment and Commercial Arbitration

Despite the fact that most Latin American states offer great resistance to the ICSID state-investor dispute mechanism, many of them have signed Bilateral Investment Treaties with China that are still in force, such as Argentina, Barbados, Bolivia, Chile, Colombia, Cuba, Ecuador, Guyana, Mexico, Peru, Trinidad and Tobago and Uruguay. An important exception is Brazil, China’s largest partner in the region, having received a staggering 55% of all Chinese investment in Latin America over the past 10 years.

Therefore, BRI disputes may give rise to investment or commercial arbitration, depending on the existence of said treaties and on the nature of the dispute.

Seats

BRI disputes will likely have a foreign element, allowing for arbitration either in mainland China or abroad. In addition, the SPC tends to adopt a more liberal interpretation of the term “foreign-related relationship” when faced with BRI disputes (see Typical Case 12, Siemens v. Golden Landmark).

Choosing a seat in mainland China narrows the choice of institutions. Foreign institutions are not considered arbitral commissions according to article 10 of the People’s Republic of China’s (PRC) Arbitration Law. In general, they cannot administer arbitration proceedings on the Mainland, even though case law seems to be evolving towards a more liberal view (see Duferco SA. v. Ningbo Arts & Crafts. Imp. & Exp. Co. Ltd.). Choice of seat also attracts the PRC Arbitration Law to the procedure, which entails relevant differences in relation to the UNCITRAL Model Law (largely adopted in Latin American countries).

The main differences are: (i) no ad hoc arbitration is allowed, (ii) the Kompetenz-Kompetenz principle is a matter for the arbitral institution rather than for the arbitral tribunal (there can be delegation, though), (iii) the time limit to challenge arbitral jurisdiction is until before the first hearing rather than not later than the submission of the statement of defence (Model Law), (iv) applications for interim measures or preliminary orders are submitted by the Parties to the arbitral institution, which shall submit them to the competent court; neither the institution nor the tribunal can issue such orders, (v) the presiding arbitrator is either chosen jointly by the parties or by the chairman of the arbitral institution; not by the co-arbitrators, and (vi) the time period to apply for an award to be set aside is 6 months, instead of the 3 months provided by the Model Law.

Finally, the choice of seat entails the court’s jurisdiction to set aside the award. A Chinese court may not set aside a foreign award (to which enforcement can still be denied), yet it may set aside a domestic award or a foreign-related award issued in mainland China. In either case, for the award to be set aside or denied enforcement, the Prior Reporting System requires a decision from the SPC.

Provided that Latin American parties have the necessary leverage to negotiate arbitration agreements with their Chinese counterparts, traditional seats such as London, Paris, Hong Kong and Singapore will likely be sought (arbitration in a US seat is seldom accepted by Chinese parties). This is especially true given that China is a contracting party to the New York Convention, allowing for foreign awards to be enforced on the Mainland as long as they are issued in the territory of another contracting party.

Institutions

International arbitral institutions soon realised the importance of tending to BRI disputes.

With offices in the Shanghai Pilot Free Trade Zone (FTZ), in Hong Kong and in Singapore, the ICC has created a Belt and Road Commission2)An important disclaimer: the author of this article is an ambassador to said Commission. jQuery("#footnote_plugin_tooltip_2488_2").tooltip({ tip: "#footnote_plugin_tooltip_text_2488_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); to raise awareness of the Court as “the go-to” institution for BRI disputes.

After opening a representative office in Shanghai FTZ in 2016, SIAC has recently signed a MOU with CIETAC to promote joint efforts to provide services to BRI players.

HKIAC has a Belt and Road Advisory Committee in place and extensive experience administering arbitrations involving Chinese and non-Chinese parties.

If the LCIA lags behind in terms of specific efforts to market itself as an option to BRI countries, it still draws particular strength from the fact that parties in all regions see London as a preferred seat, according to recent research.

On the other hand, when it comes to the non-conventional Belt and Road, especially when Latin American parties are involved, the ICC is by far the institution with the closest connection to the region.

In 2017, none of the top 10 foreign users of SIAC or of the LCIA were from Latin America. The same goes for the HKIAC in 2016 (last available report). At the ICC, however, parties from Latin America and the Caribbean held an impressive share of 15.8% in 2017, with Brazil ranking fourth with 115 parties and Mexico holding the twelfth place with 55 parties. Furthermore, it is the only institution with an office in Latin America (São Paulo), not to mention its national committees in 15 Latin American countries.

Conclusion

As Confucius teaches us, “[r]eal knowledge is to know the extent of one’s ignorance”. It is still early to assess the future of BRI disputes and thus it is quite important to keep an open mind at this point. The sage also said that wisdom may be learned by three methods: “first, by reflection, which is noblest; second, by imitation, which is easiest; and third, by experience, which is the most bitter”. This may be a good beacon to the (belt and) road that lies ahead.

References   [ + ]

1. ↑ This episode is described in the biography “Empress Dowager Cixi: The Concubine Who Launched Modern China”, by Jung Chang. 2. ↑ An important disclaimer: the author of this article is an ambassador to said Commission. function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: Arbitration in Belgium: A Practitioner’s Guide
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Lessons from Perú’s Legacy in Public Procurement: A Successful Approach to Follow and Mistakes to Avoid

Kluwer Arbitration Blog - Thu, 2018-12-13 16:05

Alonso Bedoya

The recent Petrobras – Lava Jato government fraud scandal that hit Brazil hard and swept through other Latin American countries has also greatly affected Perú. According to Marcelo Odebrecht (a Brazilian businessman and the former CEO of Latin America’s largest construction company), more than US$29m was paid in bribes between 2005 and 2014 in Perú (US$788m in the whole of the Latin American region). It is publicly known that Odebrecht, a large infrastructure company, acted as the agent to bribe high-level government authorities in order to win tenders. However, in Perú , the introduction of a mandatory private dispute resolution framework for public procurement using conciliation and arbitration has helped to contain corruption for the most part.

Perú has greatly evolved during the past two decades in the context of its arbitration laws and policymaking, to the extent that by the latter part of 2014, the Lima Chamber of Commerce alone had administered more than 3,000 cases with a total combined value of US$ 4,435,535,355.20.1)Roger Rubio, María Belén Saldaña, Arbitration World (international series), Perú Arbitration P. 739, Fifth Edition, Thomson Reuters UK. jQuery("#footnote_plugin_tooltip_1903_1").tooltip({ tip: "#footnote_plugin_tooltip_text_1903_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); This reflects the vast array of circumstances in which arbitration has been used to solve conflicting issues.

Responsively, Perúvian legislators decided to implement arbitration as a means of bypassing national judicial courts in order to settle governmental and private entity disputes. The result was that in 1998, Perú enacted the now-repealed Public Procurement Act Nº 26850, which prescribed in Article 412)Law No. 26850. Article 41 °. – “When a discrepancy arises between the parties in the execution or interpretation of the contract, this will be defined through the extrajudicial conciliation or arbitration procedure, as agreed by the parties.” jQuery("#footnote_plugin_tooltip_1903_2").tooltip({ tip: "#footnote_plugin_tooltip_text_1903_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); that any government-private party disputes under public procurement contracts be mandatorily resolved through conciliation or arbitration processes. Today, the original Act Nº 26850 (now Public Procurement Act Nº 30225, amended by Legislative Decree Nº 1444) still seeks to embody an effective conflict resolution procedure in order to encourage generous national and international investment.

 

Current Law

Public Procurement Act 30225 establishes the following key provisions: a) contracting parties are free to decide the means by which they will resolve their disputes regarding the execution of public procurement contracts, and may choose between conciliation or arbitration (this is non-negotiable between the parties) to solve matters such as the execution, interpretation, resolution, non-existence, ineffectiveness or invalidity of any given contract, with the provision that cases in which the nullity of the contract is discussed must be submitted to arbitration, b) public officials are liable to administrative sanctions if they do not use arbitration to resolve disputes, c) the government allows two types of arbitration: ad hoc and institutional; the latter being conducted by an institution accredited by the Supervisory Body of Public State Procurement (OSCE), d) for a lawyer to perform as ad-hoc arbitrator, the practitioner needs to be registered in the National Registry of Arbitrators (RNA) under OSCE administration, and meet all its requirements. The lawyer must also be specialized in arbitration and public procurement contracts as well as in administrative law.

 

Highlights of Mandatory Arbitration in Public Procurement Contracts

As arbitration is mandatory, the mechanism has spread to the extent that even the smallest municipality in Perú is required to use arbitration to resolve disputes. This condition and other pro-investment measures have greatly benefited the Perúvian government, as private domestic and foreign investment has greatly increased. Arbitration has also allowed for the resolution of public procurement disputes to be expedited. This is demonstrated by the research that has been carried out by the PUCP (Pontificia Universidad Católica del Perú), which shows that in 2014 the duration of public procurement arbitrations was less than a year in 70% of cases, and only 6% of cases continued beyond 24 months. The short time periods for resolving disputes and the fact that the Perúvian government was considered a private party within public procurement disputes (and thus equal to any other private entity), incentivised foreign investors to do business in Perú, by promoting a sense of stability and predictability. Foreign investors involved in complex contracts such as EPC or turnkey agreements for the engineering and construction of large-scale, infrastructure projects such as hydroelectric plants, reservoir dams and highway systems do not need to be members of a BIT-signatory state with Perú in order to use arbitration as a dispute resolution mechanism, thus avoiding the unpredictability of the Perúvian court system.

 

Errors to Avoid

As mentioned above, the Perúvian legislation in public procurement gives parties the opportunity to choose between ad hoc and institutional arbitration. Even though arbitral institutions provide many benefits to parties that cannot be found in ad hoc arbitration, the vast majority of parties prefer ad-hoc arbitration. More than 70% of public procurement arbitrations are resolved by ad hoc arbitration, with only 30% conducted by an institution.
This continuous growth of arbitration for public procurement disputes may be due to the fact that arbitration is regarded as a pro-private contractor system, as most cases are decided in favour of the company rather than the Perúvian government as per the studies conducted by the PUCP. However, arbitration is not immune from accusations of corruption.
The main issue facing Perúvian ad hoc arbitrations is the absence of rules on how arbitrators have to conduct procedures in line with the standards of fairness and impartiality. By failing to issue awards in a timely manner, failing to restrict ex parte communications, failing to limit document production and failing to clarify the number of hearings that will be required, they undermine the stability and predictability of procedures and outcomes. Other issues include a lack of transparency and exorbitant fees being charged by arbitrators which do not correlate either to the time invested or to the complexity of the dispute.

As a result of a lack of institutional oversight, the Lava Jato influence was able to taint some public procurement arbitrations involving Petrobras/Odebrecht by nominating inexperienced arbitrators who welcomed ex parte engagements to deal with affairs of public interest.

 

Final thoughts: Amendment

It has been 20 years since Perú first introduced a mandatory legal framework for public procurement disputes. In general terms, this measure has successfully brought a stable legal framework to the country by generating predictability and transparency in relation to the outcome of a dispute. In fact, given the special characteristics of arbitration and in particular its expeditiousness, there is no doubt that it has become the mechanism that currently provides greater advantages to individuals and even to the State itself. However, there is still room for improvement when it comes to Perúvian arbitration. Institutional Arbitration should be prioritized over ad hoc arbitrations, to prevent future Lava-Jato scenarios in arbitration proceedings. In addition, the Perúvian State role during the execution of public procurement contracts ought to be intensely monitored. More than 95% of public procurement disputes originate due to the lack of contractual management of the State (not for example, failing to make payments on time or not honouring other contractual terms), thus bringing claims against the State.

On reflection, it would be a solid step forward for Perú to ensure transparency by removing ad hoc arbitration as an option for resolving public procurement disputes, despite the fact that doing so will entail making drastic modifications to the current arbitration regulations and public procurement laws. Further, it is of utmost importance to promote training in public procurement and in arbitration, particularly in regions where large infrastructure projects are being procured. Hopefully, similar mandatory private dispute resolution frameworks for public procurement can be used throughout Latin America, Europe and Asia to promote arbitration and combat corruption, emulating the successes and avoiding the mistakes experienced in the Perúvian model.

References   [ + ]

1. ↑ Roger Rubio, María Belén Saldaña, Arbitration World (international series), Perú Arbitration P. 739, Fifth Edition, Thomson Reuters UK. 2. ↑ Law No. 26850. Article 41 °. – “When a discrepancy arises between the parties in the execution or interpretation of the contract, this will be defined through the extrajudicial conciliation or arbitration procedure, as agreed by the parties.” function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: Arbitration in Belgium: A Practitioner’s Guide
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Intra-EU ECT Claims Post-Achmea: Vattenfall Decision Paves the Way

Kluwer Arbitration Blog - Thu, 2018-12-13 03:00

Kirstin Schwedt and Hannes Ingwersen

The Court of Justice of the European Union’s (CJEU) judgment in Slovak Republic v. Achmea B.V. (Achmea) on arbitration under intra-EU BITs has been broadly discussed (on this blog, see e.g. here, here, here, here, here, here and here). Nine months after the Court’s ruling, some tribunals have had the opportunity to react. Food for thought and a strikingly straightforward solution comes especially by way of a detailed 72-page procedural decision confirming jurisdiction in the ICSID arbitration between Swedish power company Vattenfall and Germany regarding claims under the multilateral Energy Charter Treaty (ECT) following the state’s phaseout of nuclear power in the wake of the Fukushima disaster (ICSID Case No. ARB/12/12).

The Vattenfall-tribunal’s rejection of Germany’s Achmea-based jurisdictional objection warrants closer analysis: First, Achmeas reach to ECT-based claims has been hotly debated, not least because of the practical significance and number of pending ECT-claims. The European Commission recently communicated in unequivocal terms that it sees intra-EU ECT-claims as barred by Achmea. Second, the tribunal delves deep into the complex and arguably uneasy relationship between EU law and investment treaties as part of public international law.

Tribunals Take Different Roads, Yet All Roads Lead to Rome

Various Achmea-based jurisdictional objections have found different treatment by tribunals. In Masdar Solar v Spain (ICSID Case No. ARB/14/1), the tribunal denied Spain’s request to reopen the arbitration following Achmea, briefly addressing the issue and concluding that the “Achmea Judgment is simply silent on the subject of the ECT.” An ICSID tribunal in Gavrilovic v Republic of Croatia (ICSID Case No. ARB/12/39) under the Austria-Croatia BIT dismissed Croatia’s intra-EU objection after Achmea for being late and refrained from an ex officio review of the issue.

In contrast, the Vattenfall-tribunal found Germany’s objection – not raised prior to Achmea – to be timely. The “very existence” of the CJEU’s judgment amounted to a new fact that was previously unknown to Germany in terms of ICSID Rule 41(1). The tribunal further highlights its ex officio authority to consider jurisdictional issues under the ICSID Rules, remarking that it would have seen fit to consider the intra-EU issue, even if Germany had not raised the objection.

Recently, a tribunal in UP and C.D Holding Internationale v. Hungary (ICSID Case No. ARB/13/35) under the France-Hungary BIT rejected Achmea-based objections on grounds similar, yet not identical, to those relied on by the Vattenfall-tribunal: Hungary could not, says that tribunal, rely on EU law and Achmea to escape its public international law obligations under the ICSID Convention (not the BIT).

In conclusion: Tribunals have unanimously remained unimpressed by Achmea, while the underlying reasons to uphold jurisdiction are manifold.

Vattenfall: No Primacy of EU Law

The Vattenfall tribunal identifies the dispute resolution provision of the ECT, Article 26, as the starting point for its jurisdictional analysis, and queries whether EU law has consequences for the meaning of that provision when interpreted in accordance with the principles of international law. While the tribunal acknowledges that the EU Treaties and the CJEU’s judgments interpreting them form part of international law, it does not accept EU law as means to interpret Article 26 ECT.

In the tribunal’s view, there is no room within Article 31 of the Vienna Convention on the Law of Treaties (VCLT) to draw from EU Treaties (and thus indirectly from Achmea) to interpret another treaty, the ECT. It concludes that EU law does not constitute “principles of international law which may be used to derive meaning from Article 26 ECT, since [EU law] is not general law applicable as such to the interpretation and application of the arbitration clause in another treaty such as the ECT”.

The Vattenfall tribunal is concerned about potentially different interpretations of the same ECT provision if EU law was used for interpreting the multilateral treaty. This would result in an “incoherent and anomalous result” that would be inconsistent with the object and purpose of the ECT. Instead, “pacta sunt servanda and good faith require that the terms of that treaty have a single consistent meaning”. Article 31(3)(c) VCLT, which states that any relevant rules of international law applicable in the relations between the parties should be taken into account when interpreting a treaty, could not be relied upon to “rewrite the treaty being interpreted, or to substitute a plain reading of a treaty provision with other rules of international law, external to the treaty being interpreted, which would contradict the ordinary meaning of its terms”.

Vattenfall: Article 16 ECT as a Simple Route to Jurisdiction

The arbitrators notably accentuate Article 16 ECT, which states that no provisions concerning the subject matter of Part III or V of the ECT in prior or subsequent international agreements between two or more parties to the ECT shall be construed to derogate from i.a. Article 26 ECT, where the provision in the ECT is more favourable to the investor or investment. If EU law were to prohibit arbitration, says the tribunal, it would concern the same subject matter as Article 26 ECT, the latter allowing for arbitration and thus being “more favourable to the Investor” in terms of Article 16 ECT. Article 16 ECT would thus require Article 26 ECT to prevail. Article 16 ECT is identified by the arbitrators as “a simpler and clearer route to the answer to the jurisdictional challenge” than other reasons provided. Similarly, but slightly less prominently, the tribunal in Masdar Solar v Spain also relied on Article 16 ECT (cf. para. 332 of the Masdar award).

The arbitrators do not see a conflict between Article 26 ECT and Articles 267, 344 TFEU, but remark obiter dictum that even if such a conflict existed, EU law would not prevail over the ECT, applying a variety of conflict rules – lex posterior pursuant to Article 30(4)(a) VCLT, modification of the ECT in light of Article 41(1) VCLT, or lex specialis with a view to Articles 16 ECT and 351 TFEU. Returning to Article 16 ECT, the tribunal considers the provision to be lex specialis, once more concluding that “Article 16 poses an insurmountable obstacle to Respondent’s argument that EU law prevails over the ECT”. This view is not effectively countered by arguing that Article 16 ECT is not a suitable conflict rule because it is itself part of one of the conflicting regimes. The (general) public international law rule enshrined in Article 41 VCLT, limiting the cases in which multilateral agreements can be bilaterally modified, leads to the same result and reinforces the effectiveness of Article 16 ECT.1) Andrej Lang, Regime Collision between EU Law and Investment Law: New Developments in the Vattenfall Case, www.verfassungsblog.de, last accessed 8 October 2018. jQuery("#footnote_plugin_tooltip_5073_1").tooltip({ tip: "#footnote_plugin_tooltip_text_5073_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

Additionally, the tribunal emphasises that it sees a critical role with drafters to define the scope of the obligations established by the investment treaty. In case of the ECT, there was ample opportunity to carve out intra-EU claims, since it would have been a simple matter to draft the ECT so that Article 26 does not apply to disputes between an Investor of one EU Member State and another EU Member State as respondents. That was not done”.

Commentary

Tribunals still grappling with the intra-EU question, especially those in ECT cases, are certain to pay great attention to the carefully crafted Vattenfall decision. Its reasoning may well serve as a blueprint for further decisions and awards in similar cases.

Reading the CJEU’s judgment side-by-side with the Vattenfall decision puts the spotlight on the starkly different perspectives from which the EU institutions and international arbitral tribunals look at the issue. The CJEU’s principal task is to interpret and ensure the primacy of EU law, whereas arbitral tribunals are obliged to put into effect the mutual obligations of states under their respective investment treaties. These distinct viewpoints necessarily shape reasoning and methodology of the different actors: The CJEU relies on principles of EU law, whereas arbitral tribunals base their decisions on public international law. For intra-EU ISDS, this has resulted in norm conflicts that are now paid for by states and investors alike.

The issue remains in flux: In the context of an action to annul an ECT award at the Svea Court of Appeal (SCC Case No. 063/2016, Novenergia v Spain), Spain has asked the Swedish court to seek a preliminary ruling on the ECT’s compatibility with EU law from the CJEU. Such decision would bring clarity with respect to the CJEU’s position on the multilateral treaty. In parallel, on the other side of the Atlantic, the US District Court of the District of Columbia is called to decide on Spain’s motion resisting enforcement of the Novenergia award based on Achmea. Beyond a “thumbs up” or “thumbs down” for the ECT, one may curiously expect a ruling on the public international law implications of the overlap between EU law and (other) public international law when it comes to intra-EU investment protection.

The views expressed in this blog post are those of the authors alone and do not reflect the opinion of Linklaters LLP.

References   [ + ]

1. ↑ Andrej Lang, Regime Collision between EU Law and Investment Law: New Developments in the Vattenfall Case, www.verfassungsblog.de, last accessed 8 October 2018. function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: Arbitration in Belgium: A Practitioner’s Guide
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The Prague Rules: The Real Cultural War Isn’t Over Civil vs Common Law

Kluwer Arbitration Blog - Wed, 2018-12-12 00:59

Michael McIlwrath

The Prague Rules on the Efficient Conduct of Proceedings in International Arbitration will be officially launched this week (December 14). This set of rules of evidence and procedure formulated from civil law practices has already generated a substantial and healthy debate within the international arbitration community, including here on the Kluwer blog, on whether they are needed to overcome a perceived common law orientation of the IBA Rules of Evidence.1) See, e.g, whether the Prague Rules are a viable alternative to the IBA Rules of Evidence, whether civil law lawyers genuinely desire a set of rules that embody civil law concepts for international arbitration, and whether that the Prague Rules’ prohibition on any form of e-discovery is unrealistic as a means to restrain excessive discovery in international arbitration. jQuery("#footnote_plugin_tooltip_3229_1").tooltip({ tip: "#footnote_plugin_tooltip_text_3229_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

Leaving aside whether the Prague Rules are truly representative of the civil law world or just certain legal systems within it (that would be a separate debate of its own), the biggest cultural divide in international arbitration is not civil versus common law approaches.

 

Where cultures really clash:  predictability versus flexibility

There is no doubt that, as the Prague Rules state, parties to international arbitration usually desire an efficient and speedy process. Just as much – and perhaps even more – they want predictability. They will want to know how the arbitrators will conduct the proceedings, how they will weigh the evidence, what legal issues they will focus on, and how long it will take to obtain a final award.

By contrast, the hallmark of international arbitration is the tribunal’s ability to formulate procedures that are suited to the particular parties and their disputes.  This flexibility is largely what distinguishes international from domestic arbitration, with tribunals in the latter case generally applying a “one size fits all” approach copied from local litigation practices.

In terms of setting up the procedure for an international arbitration, the concepts of predictability and flexibility are polar opposites. And in resolving this tension, it is predictability that typically loses out.  This is natural.  Arbitrators, once appointed, are not bound to follow the parties’ expectations. In fact, they may not even know what the parties’ expectations are.

 

The most common source of party dissatisfaction is not the rules

Unlike the standard procedures applied in domestic arbitration or court litigation, parties to an international arbitration will usually need to wait for Procedural Order n. 1 before they can advise their business clients on how the proceedings will unfold.

And when it arrives, parties often find the arbitration will not be what they expected when the tribunal was appointed.  The range of procedural approaches that different arbitrators will bring to the same set of rules can be a source of either criticism or praise, depending on one’s point of view. In 20 years of representing my company in disputes around the world, I have experienced international arbitrations firmly rooted in the extremes of civil and common law procedural approaches, all with tribunals purportedly referring to the IBA Rules. This is usually over the protests of at least one unhappy side.

Fancy that:  a service profession where a paying customer could not predict what service they would receive until it was too late to change course.

Not surprisingly, parties often sour on the arbitration before the proceedings are fully underway.

 

A set of rules based on national practices is not a realistic solution for international cases

As with the IBA Rules of Evidence, the Prague Rules cannot be more effective than the arbitrators called to interpret and apply them.

In cases where both sides agree to apply the Prague Rules because they share common procedural values, there will be no pressing need for them. If the arbitrators apply expansive procedures that clearly neither side wants, the parties have a problem that no set of rules will fix.

Where, by contrast, the parties are from different legal cultures and have divergent views of procedure, the Prague Rules will be put to the same test as the IBA Rules the moment either party accuses the tribunal of failing to provide a fair opportunity to present their case.  Some arbitrators will default to more expansive procedures, going a considerable distance to avoid any semblance of denial of due process and to maximize international enforceability of the award.

There will be no speedy proceedings with these arbitrators, especially since the Prague Rules give them reasons to be concerned about enforcement. In contrast to the balanced approach of the IBA Rules, some parts of the Prague Rules may strike foreign courts as per se violations of due process. These include the tribunal’s ability to pronounce its preliminary views on the disputed issues at the initial case management conference (article 2.3(e));2) The Prague Rules anticipate that this is likely to pose a problem and seek to address it through a disclaimer in article 2.3(e) that, “such preliminary views shall not by itself be considered as evidence of the arbitral tribunal’s lack of independence or impartiality, and cannot constitute grounds for disqualification.” It is open to question whether any enforcing jurisdictions would treat the right to assert lack of an arbitrator’s impartiality as being waivable by a party. Further, as a recent Kluwer post noted, however, the language of article 2.3 is likely unworkable given that almost all documents today are in electronic form and, notably, the rules do not define what they mean by “e-discovery.” jQuery("#footnote_plugin_tooltip_3229_2").tooltip({ tip: "#footnote_plugin_tooltip_text_3229_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); avoiding “any form of discovery, including e-discovery” (article 4.2); the ability of a tribunal “to give as much evidential value as it deems appropriate” to the statement of a witness who is not called to testify (article 5.8); or the tribunal’s raising legal issues not pleaded by the parties (article 7.2).

Other arbitrators, of course, will be more restrictive, and will not feel they must accommodate the demands of the party that cries the loudest.  These proceedings will indeed be more efficient. This occurs today under the IBA Rules.

The main difference is not driven by the rules adopted for the proceedings, but how the arbitrators choose to apply them (or not) and how they otherwise conduct the proceedings.

 

But the concept of the Prague Rules points in the right direction

While parties will use the civil/common law distinction as a way to reduce the guessing-game when appointing arbitrators, this dichotomy is simply a proxy for assessing whether the arbitrator will likely adopt restrictive or expansive approaches to procedure, ie, to create predictability.  It is not always an accurate proxy, however. There are many civil law arbitrators who will easily indulge a party’s excessive and expensive document requests.  And there are many common law arbitrators who would never tolerate this.

If the Prague Rules were to adopt the terminology of “restrictive/expansive” or an equivalent, instead of relying on outmoded characterizations of regional procedures, they would stand a greater chance of influencing international practice by helping to overcome the tension between the desires for predictability and flexibility.

Here are four ways a future iteration of the Prague Rules could have a broad impact without ever being adopted as the rules of evidence or procedure in a single international arbitration.

1. A “menu” approach to the IBA Rules of Evidence. Instead of keeping parties in the dark about the likely procedure to be followed, why not offer explicitly the broad range of procedural approaches available under the IBA Rules? The Prague Rules could be revised to complement the IBA Rules this way, or the IBA Rules could be revised to offer a “Prague Option”, among others, for parties and tribunals to expressly consider at the earliest opportunity.

2. An ala carte approach to procedural devices. A serious shortcoming of the Prague Rules for international cases is that they are a full set of procedures to be accepted or rejected in their entirety. This is a pity, since it means they will often be rejected in cases where parties are from different backgrounds, but might be amenable to some portions but not others.  For example, my business would not be well served if all of our disputes were to be entirely under civil or common law procedures, and I hope we will never be forced to make this choice. For most cases, we will prefer a mix that we believe is best for a given dispute, such as the front-loading of pleadings (civil law), a willingness to dispose of key issues early (common law), more evidentiary weight given to documents than witnesses (civil law), limited or at least tightly focused discovery (hybrid of civil and common law), and party-appointed experts (common law). If proposed as discrete tools instead of a full set of procedures, the Prague Rules would likely find greater acceptance and use.

3. As a means for arbitrators to publicly declare their preferences. There is no reason to make parties guess about the procedures a proposed arbitrator prefers for most cases. If an arbitrator appears at a conference and declares that they are willing to apply the Prague Rules, this may provide parties with a considerably greater sense of predictability when appointing them (or not).3) Even better, the arbitrators may issue written declarations of their support for the Prague Rules or any of the procedural devices they include. Encouraging arbitrators to be more forthcoming with their procedural preferences was proposed in the article, Puppies or Kittens: How to Better Match Arbitrators to Party Expectations. jQuery("#footnote_plugin_tooltip_3229_3").tooltip({ tip: "#footnote_plugin_tooltip_text_3229_3", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

4. Prompting better conversations between parties and tribunals on procedure. Rather than relying on unstated and inaccurate presumptions of what the parties want, arbitral tribunals may consider using the Prague Rules as a source of conversation for shaping the procedure to fit their real expectations. They may do this even while applying the IBA Rules of Evidence.  The desire for better “conversations” over the means of resolving disputes was a key finding of the Global Pound Conference, which surveyed dispute stakeholders in 28 cities between 2016 and 2017.4) See the GPC Report on Data Trends and Regional Differences. A full report of all Global Pound Conference survey results and findings will be published in early 2019. jQuery("#footnote_plugin_tooltip_3229_4").tooltip({ tip: "#footnote_plugin_tooltip_text_3229_4", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Exploring the parties’ procedural expectations is simply good practice that arbitrators should engage in more frequently.5) The value of more discussion with parties about their procedural expectations is forcefully set out in Carita Lindholm Wallgren’s Predictability of Proceedings in International Commercial Arbitration – And is there a Nordic Way?, Festschrift to Gustaf Möller, Tidskrift utgiven av Juridiska Föreningen i Finland (JFT) 2011. jQuery("#footnote_plugin_tooltip_3229_5").tooltip({ tip: "#footnote_plugin_tooltip_text_3229_5", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

 

The Prague Rules should occupy a bigger tent

 The initial draft of the Preamble to the Prague Rules stated that they were drafted as a response to the IBA Rules of Evidence, accused of being “closer to common law traditions, as they follow a more adversarial approach regarding document production, fact witnesses and Party-appointed experts. In addition, the parties’ entitlement to cross-examine witnesses is almost being taken for granted.”

The preamble was recently revised to remove this criticism, and any mention, of the IBA Rules of Evidence. It now states more broadly that, although “initially intended to be used in disputes between companies from civil law countries, [the Prague Rules] could in fact be used in any arbitration proceedings where the nature of the dispute or its amount justifies a more streamlined procedure actively driven by the tribunal.”

This change is a step in the right direction, away from a small tent inhabited by those from a shared legal culture, and towards the bigger tent of international arbitration.

References   [ + ]

1. ↑ See, e.g, whether the Prague Rules are a viable alternative to the IBA Rules of Evidence, whether civil law lawyers genuinely desire a set of rules that embody civil law concepts for international arbitration, and whether that the Prague Rules’ prohibition on any form of e-discovery is unrealistic as a means to restrain excessive discovery in international arbitration. 2. ↑ The Prague Rules anticipate that this is likely to pose a problem and seek to address it through a disclaimer in article 2.3(e) that, “such preliminary views shall not by itself be considered as evidence of the arbitral tribunal’s lack of independence or impartiality, and cannot constitute grounds for disqualification.” It is open to question whether any enforcing jurisdictions would treat the right to assert lack of an arbitrator’s impartiality as being waivable by a party. Further, as a recent Kluwer post noted, however, the language of article 2.3 is likely unworkable given that almost all documents today are in electronic form and, notably, the rules do not define what they mean by “e-discovery.” 3. ↑ Even better, the arbitrators may issue written declarations of their support for the Prague Rules or any of the procedural devices they include. Encouraging arbitrators to be more forthcoming with their procedural preferences was proposed in the article, Puppies or Kittens: How to Better Match Arbitrators to Party Expectations. 4. ↑ See the GPC Report on Data Trends and Regional Differences. A full report of all Global Pound Conference survey results and findings will be published in early 2019. 5. ↑ The value of more discussion with parties about their procedural expectations is forcefully set out in Carita Lindholm Wallgren’s Predictability of Proceedings in International Commercial Arbitration – And is there a Nordic Way?, Festschrift to Gustaf Möller, Tidskrift utgiven av Juridiska Föreningen i Finland (JFT) 2011. function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: Arbitration in Belgium: A Practitioner’s Guide
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