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International arbitration 'can help grow the Afghan economy' - Out-Law.com

Google International ADR News - Thu, 2018-10-11 06:33

International arbitration 'can help grow the Afghan economy'
Out-Law.com
As the Afghan economy grows and there is greater domestic and foreign investment in the country, the need for an effective dispute resolution mechanism becomes increasingly important. International arbitration can offer a more acceptable method for the ...

Accreditation of Arbitrators in India: A New License Requirement?

Kluwer Arbitration Blog - Thu, 2018-10-11 06:05

Ajar Rab

The current government in India is undertaking sweeping policy changes to increase India’s rank on the global index of ease of doing business. In order to attract more investments, it is also focusing on revamping the ailing judicial system and attempting to bring India at par with global arbitration standards. In pursuance of the same, the Union Cabinet has approved the Arbitration and Conciliation (Amendment Bill 2018) (the “Bill”) and the  New Delhi International Arbitration Centre Bill, 2018 (the “NDIAC Bill”) which has already been tabled before the Lower House of the Parliament (covered previously in this post).

Highlighting the salient features of the Bill, the Press Information Bureau of India issued a press release stating that the Bill will, inter-alia, provide for the creation of an autonomous body called the Arbitration Council of India (“ACI”) aimed towards grading arbitral institutes and accrediting arbitrators. The press release also noted that the amendments were based on the recommendations of a High-Level Committee under the Chairmanship of Justice B. H. Srikrishna, Retired Judge, Supreme Court of India, which was to provide recommendations and suggestions with respect to “Institutionalisation of Arbitration Mechanism” in India (“Committee”).

The Bill, inter-alia, provides for the insertion of Section 43G in the Arbitration and Conciliation Act, 1996 (the “Arbitration Act”) specifying the norms for accreditation of arbitrators as provided in the Eight Schedule (to be added to the Arbitration Act). Though there are many instances of an existing gap between cup and lip between the provisions of the Bill and the report of the Committee, Section 43G of the Bill is going to have a severe impact on international arbitration and arbitrators in India.

Section 43G of the Bill states the norms for accreditations shall be as specified in the Eighth Schedule. However, instead of providing an inclusive definition, the Eighth Schedule provides a list of who can be an arbitrator and anyone not falling within the below-mentioned list shall “not be qualified to be an arbitrator”:

  • is an advocate within the meaning of the Advocates Act, 1961 having ten years of practice experience as an advocate; or
  • is a chartered accountant within the meaning of the Chartered Accountant Act, 1949 having ten years’ of practice experience as a chartered accountant; or
  • an officer of the Indian Legal Service; or
  • an officer with a law degree having ten years’ experience in legal matters related to the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in private sector; or
  • an officer with an engineering degree having ten years’ of experience as an engineer in the Government, Autonomous Body, Public Sector Undertaking, or at a senior level managerial position in private sector or self-employed; or
  • an officer having senior level experience of administration in the Central or State Government or having experience of senior level management of a Public Sector Undertaking or a Government company or a private company of repute; or
  • in any other case, a person having educational qualification at degree level with ten years’ of experience in scientific or technical stream in the fields of telecom, information technology, Intellectual Property Rights or other specialised areas in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in a private sector, as the case may be.

It is pertinent to mention that the Committee report categorically mandated that no new body is to be created for accreditation of arbitrators and instead recognition is to be given to professional institutes which have a robust and well-defined system of accreditation such as the Chartered Institute of Arbitrators (CIArb), the Singapore Institute of Arbitrators (SIArb), the Resolution Institute (RI), or the British Columbia Arbitration or Mediation Institute (BCAMI). Thus, the recommendation of the Committee was to recognize international bodies/professional institutes providing accreditation of arbitrators as their criteria is based on (a) professional education (b) attendance of arbitration hearing (c) qualifying examinations (d) peer interviews/assessment by a panel of approved arbitrators. This would lead to professional and well-qualified arbitrators. While this intent is duly reflected in Section 43D(2)(b) of the Bill which states that one of the functions of the ACI will be to recognize professional institutes providing for accreditation of arbitrators, based on the current wording of Section 43G, it is unclear whether the ACI will simply (i) recognize such institutes; or (ii) recognize such institutes only if the accreditation provided by them meets the criteria mentioned in the Eighth Schedule; or (iii) whether the ACI alone will accredit arbitrators as Section 43G does not provide for recognition of professional institutes for the purposes of accreditation.

It is pertinent to highlight that as per the criteria laid down under the Eighth Schedule, there is no room for any method by which the quality, experience and professional qualification of an arbitrator can be gauged. The Eighth Schedule reflects the conservative and outdated thinking of the government as the criteria relies solely on seniority and a basic professional degree or employment in a government service. None of these are sufficient or even remotely reflective of a person’s knowledge of arbitration law or his/her capability to effectively discharge the duties and role of an arbitrator.

The current list provided in the Eighth Schedule assumes that by merely practicing as an advocate or chartered accountant for 10 years, a person is deemed to have gained knowledge in the field of arbitration and can discharge the role of an arbitrator which is judicial in nature. The list gives preference to seniority in managerial positions, matters related to government functions and government enterprises without defining what is the scope and extent of such seniority. Again, fallaciously, the list assumes knowledge of arbitration and basic tenets of justice only on account of age and association with the government or managerial positions in the private sector.

As many internationally renowned arbitrators would testify, mere age or seniority or association with government work does not in any manner equip a person to become an arbitrator. Even as an advocate with 10 years of practice in India, there is no guarantee that an advocate would actually be well versed in arbitration or that he or she would have handled arbitration matters in those 10 years. Therefore, the result of the Eighth Schedule being passed as a law would be that all those persons mentioned in the Schedule can become accredited arbitrators since there are no other criteria to evaluate their knowledge and understanding of arbitration. The catastrophic result would be accredited arbitrators without any knowledge, education, experience in arbitration law or the practice of arbitration.

The Committee report had specifically stated that the ACI should not be a body which provides accreditation but one that merely recognizes the accreditation provided by international bodies/professional institutes. The establishment of another body for accreditation would only result in duplication of efforts and would involve substantial financial commitment from the government. Despite such a clear recommendation that the ACI is not to become a regulator or a license granting body, the Bill has managed to achieve just that. If the proposed amendment is passed in its current form, it remains unclear if all internationally accredited arbitrators would again require accreditation in India by the ACI or will their existing accreditation be given due recognition, and if so, under what circumstances.

The other problems with Section 43G and the Eighth Schedule are that they fail to account for persons who even though internationally accredited and recognized as arbitrators, may not fall in the list of persons provided in the Eighth Schedule. Furthermore, while most bodies/professional institutes such as the CIArb, SIArb etc. encourage students to enrol and get accreditation as arbitrators, the Eighth Schedule in effect provides an age/seniority threshold which runs counter to the idea of promotion of arbitration.

Unless suitably addressed, creating another body for accreditation would neither benefit nor bolster arbitration in India. In fact, it would just become another certification for arbitrators without any serious reputation in the international market. Moreover, if professional institutes are not recognized, international arbitrators would have to re-apply for accreditation in India before arbitrating disputes in India.

Arbitration was already moving at a snail pace in India and suffered on account of judicial interference at every stage of the arbitration proceedings, the last thing it needed was government interference as well. In effect, the current text of Section 43G and Eight Schedule of the Bill will create more problems for arbitrators and the arbitration landscape in India. Instead of reducing the scope of judicial intervention, the Bill manages to create a new licensing requirement for arbitrators under the garb of providing accreditation.

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The post Accreditation of Arbitrators in India: A New License Requirement? appeared first on Kluwer Arbitration Blog.

Franchising in Switzerland - Lexology

Google International ADR News - Wed, 2018-10-10 17:02

Franchising in Switzerland
Lexology
Even if the franchise concept is not adopted in Switzerland and a franchise agreement does not have a direct link to the Swiss market, foreign parties to international franchise agreements often chose Swiss law to be the neutral applicable law ...

ICC YAF: Nuts & Bolts in Arbitration & ADR - International Chamber of Commerce

Google International ADR News - Wed, 2018-10-10 12:05

ICC YAF: Nuts & Bolts in Arbitration & ADR
International Chamber of Commerce
... of approximately 40 years and under: counsel, arbitrators, corporate counsel or academics. The ICC YAF Conference will be an ideal forum for young practitioners to exchange thoughts on international arbitration, and to enrich their network in the ...

EMAC Attends the IBA Annual Conference in Rome - Maritime Professional

Google International ADR News - Wed, 2018-10-10 07:46

Maritime Professional

EMAC Attends the IBA Annual Conference in Rome
Maritime Professional
As gold sponsors at this year's IBA conference in Rome, EMAC's objective is to showcase how the Center has applied lessons learnt from other like associations and institutions to provide a mediation or arbitration process that applies international ...

Emirates Maritime Arbitration Centre attends the IBA Annual Conference in Rome - ZAWYA

Google International ADR News - Wed, 2018-10-10 06:30

ZAWYA

Emirates Maritime Arbitration Centre attends the IBA Annual Conference in Rome
ZAWYA
Dubai: As the Emirates Maritime Centre (EMAC) is establishing roots within the maritime industry as a pivotal service provider for specialised arbitration and mediation within the Middle East region, the institute continues its obligation to ensure ...

A Debate About the Not So Straightforward Applicability of the Articles on State Responsibility to Investor-State Arbitrations

Kluwer Arbitration Blog - Wed, 2018-10-10 00:34

Danilo Ruggero Di Bella

At a time when Spain is targeted by investment arbitrations (with almost thirty ICSID cases pending against it), the second ICSID-CIAMEN Forum held in Madrid could not be more auspicious.  The event – organized by Marta Lya Martini Briceño and José María Beneyto from the CIAMEN (Centro Internacional de Arbitraje, Mediación y Negociación) with the collaboration of Gonzalo Flores (ICSID Deputy Secretary-General) – was hosted at CEU-San Pablo University and gathered arbitration practitioners from a variety of jurisdictions. The hot topics of the Forum were the most recent ICSID jurisprudence, the future amendments to the ICSID Arbitration Rules and Spain’s renewable energy cases.

During the conference, a debate about the applicability of the International Law Commission’s Articles on State Responsibility (ILC Articles) to investor-state arbitrations struck my attention. This post attempts to report on that debate and add a few observations.

 

A different view on the ILC Articles

During his presentation, while highlighting diverging interpretations of the FET standard in the recent awards rendered against Spain, Derek Smith (Foley Hoag) expressed the singular view that it is a widespread mistake to apply the full reparation principle – enshrined in Art. 31 of the ILC Articles – when assessing damages in investor-state arbitral proceedings. Although this has been a common practice by many arbitral tribunals, Smith considered it to be an error and argues his position based on the Chorzów Factory case, the Commentaries of the ILC to the provisions of the ILC Articles dealing with the legal consequences of an internationally wrongful act of a State, and the stance maintained by Professor James Crawford.

Smith argued that the Chorzów Factory case – regarded as the starting point by any investment arbitration tribunal called upon to quantify damages – has been repeatedly misinterpreted to the extent that its application has been overstretched to disputes where an individual is arbitrating against a State. Smith submitted that the Chorzów Factory case and the principle of full reparation stemming from it (according to which reparation should wipe out all the consequences of an illegal act and re‐establish the status quo ante) is applicable exclusively to State-to-State disputes, as in that case the PCIJ intended to rule solely on the reparation due by one State to another. Smith backed up his argument by referring directly to the 1928 Judgement on the Merits of the Chorzów Factory case, where, indeed, the German-Polish Mixed Arbitral Tribunal emphasized that “Rights or interests of an individual the violation of which rights causes damage are always in a different plane to rights belonging to a State, which rights may also be infringed by the same act. The damage suffered by an individual is never therefore identical in kind with that which will be suffered by a State[…]”. This may find confirmation in another excerpt from that case, where the Mixed Arbitral Tribunal stressed that “The present dispute is…a dispute between governments and nothing but a dispute between governments. It is very clearly differentiated from an ordinary action for damages, brought by private persons[…]”.

Smith further supported his view by referring to the Commentaries of the ILC which clarify that Part Two of the ILC Articles – including Art. 31 – “does not apply to obligations of reparation to the extent that these arise towards or are invoked by a person or entity other than a State.”1)ILC Commentaries, pages 87-88 jQuery("#footnote_plugin_tooltip_5941_1").tooltip({ tip: "#footnote_plugin_tooltip_text_5941_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });, and again, that “[t]he articles do not deal with the possibility of the invocation of responsibility by persons or entities other than States, and paragraph 2 [of Art. 33] makes this clear. It will be a matter for the particular primary rule to determine whether and to what extent persons or entities other than States are entitled to invoke responsibility on their own account.”2)ILC Commentaries, page 95 jQuery("#footnote_plugin_tooltip_5941_2").tooltip({ tip: "#footnote_plugin_tooltip_text_5941_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

Finally, Smith quoted Professor Crawford who confirms that “the ILC Articles make no attempt to regulate questions of breach between a state and a private party such as a foreign investor. Those rules must be found elsewhere in the corpus of international law, to the extent that they exist at all.”3)Crawford, “Investment arbitration and the ILC Articles on State Responsibility,” (2010), ICSID Review—Foreign Investment Law Journal, Volume 25, Issue 1, page 130 jQuery("#footnote_plugin_tooltip_5941_3").tooltip({ tip: "#footnote_plugin_tooltip_text_5941_3", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

From all the above it follows – according to Derek Smith – that to award full reparation to an investor constitutes an excessive and legally unjustified compensation.

 

The majority view by the other Panelists   

At this point, during the conference, other members of the panel replied by affirming that applying the full reparation principle to estimate damages in investment arbitrations cannot be regarded as a mistake.

Pedro Claros (DAC Beachcroft) contended that, as the full reparation principle has been applied in diplomatic protection cases (where a State indeed takes up an individual’s claim against another State), it is not bizarre its use by way of analogy – and, therefore, the use of Art. 31 of the ILC Articles – in awarding damages to individuals in non-State-to-State disputes.

At that point Derek Smith rebutted that analogy cannot be used as a basis to justify the application of the full reparation principle to individual vs. State disputes, because arbitral tribunals’ jurisprudence is not a source of international law (only the jurisprudence of the ICJ is), according to Article 38 of the Statute of the ICJ. Smith submitted that the application of such a principle (and Part Two of the ILC Articles) to investor-State arbitration require a legal ground other than analogy.

Subsequently, Gabriel Bottini (Uría Menéndez) replied that the Commentaries to the ILC Articles make many references to human rights treaty-based cases, where individuals confront States. By consequence, the application of these Articles to individual vs. State disputes, such as investor-state arbitration, is in line with their scope.

 

Observations

Although the Chorzów Factory Tribunal underlines that it is mandated to adjudicate a dispute between States, as opposed to an ordinary action for damages brought by an individual, still it considers that the calculation of the reparation due to the State could be liquidated on the basis of the actual damages suffered by the individual, whose case was espoused by the Claimant State. 4)Factory at Chorzów (Merits), Judgment of 13 Sept.1928, page 28 jQuery("#footnote_plugin_tooltip_5941_4").tooltip({ tip: "#footnote_plugin_tooltip_text_5941_4", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Accordingly, it was that tribunal to draw a first parallelism between the damages suffered by the individual and the damages suffered by the individual’s home-State, thus pointing out a straightforward correlation between the losses incurred by the individual and the claimable amount due from the State as form of full reparation. Consequently, the analogy drawn by Pedro Claros appears well-founded.

Even though, unlike the ICJ, arbitral tribunals supporting the application of the full reparation principle may not be a source of international law, they do contribute to the development of international law, especially by building a jurisprudence constante, whose authority resides in its persuasiveness. Apart from their influence, we should not be oblivious to the fact that the members constituting those tribunals are often incumbent or former judges of the ICJ itself5)Listen to the interview of Bruno Gelinas-Faucher by Joel Dahlquist on The Arbitration Station jQuery("#footnote_plugin_tooltip_5941_5").tooltip({ tip: "#footnote_plugin_tooltip_text_5941_5", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });.

As correctly pointed out by Gabriel Bottini, the ILC Commentaries to the ILC Articles draw several examples from human rights cases, i.e. individual vs. State cases. Additionally, the Commentaries make direct reference to the practice of ICSID tribunals (again, individual vs. State cases).  They do so particularly with respect to the power of ICSID tribunals to award full reparation as compensation, by covering ongoing and also expected lost profits (as long as non-speculative)6)ILC Commentaries at pages 100 (footnote 522), 104 (footnote 566) jQuery("#footnote_plugin_tooltip_5941_6").tooltip({ tip: "#footnote_plugin_tooltip_text_5941_6", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); More importantly, the Commentaries draw such a reference with respect to Part Two of the ILC Articles, which purportedly is not meant to be applied to individual vs. State disputes. Could this be an inconsistency in the ILC Commentaries?

Lastly, the missing legal ground (other than simply analogy), required by Smith’s view in order to apply Art. 31 of the ILC Articles to investor-state arbitrations (and more in general to individual vs. State disputes), could be found in the residual character of the ILC Articles. Quoting Professor Crawford himself: “The ILC Articles are residual articles and an adjudicator must first look at the treaty under review and see what it says on the subject. If the treaty (such as a BIT) covers the field of the issue at stake, the ILC Articles have no role to play.”7)Crawford, “Investment arbitration and the ILC Articles on State Responsibility,” page 131 jQuery("#footnote_plugin_tooltip_5941_7").tooltip({ tip: "#footnote_plugin_tooltip_text_5941_7", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); The corollary of this, of course, is that if the BIT is silent about the standard of compensation, then Part Two of the ILC Articles should apply (full reparation principle included).

 

Conclusion  

Derek Smith’s opinion is intriguing, since it questions something – the applicability to investor-State disputes of Art. 31 of the ILC Articles, together with the principle of full reparation – that is taken for granted and part of well-established tribunals’ practice. Such a position may come particularly handy if one’s goal is getting a quantum reduction as state-appointed counsel. However, confining the full reparation principle only to State-to-State disputes stands at odds with the majority view.

 

References   [ + ]

1. ↑ ILC Commentaries, pages 87-88 2. ↑ ILC Commentaries, page 95 3. ↑ Crawford, “Investment arbitration and the ILC Articles on State Responsibility,” (2010), ICSID Review—Foreign Investment Law Journal, Volume 25, Issue 1, page 130 4. ↑ Factory at Chorzów (Merits), Judgment of 13 Sept.1928, page 28 5. ↑ Listen to the interview of Bruno Gelinas-Faucher by Joel Dahlquist on The Arbitration Station 6. ↑ ILC Commentaries at pages 100 (footnote 522), 104 (footnote 566) 7. ↑ Crawford, “Investment arbitration and the ILC Articles on State Responsibility,” page 131 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 post A Debate About the Not So Straightforward Applicability of the Articles on State Responsibility to Investor-State Arbitrations appeared first on Kluwer Arbitration Blog.

How Can We Fix Legal System Failures to Properly Handle Sexual Offenses?

ADR Prof Blog - Tue, 2018-10-09 16:58
Over the past year, we have witnessed growing evidence of the massive failures of our legal system to deal properly with a rampant system in which powerful men sexually dominate others, especially women. This post describes the nature, magnitude, and consequences of a long-term history of criminal and civil sexual offenses in the US and … Continue reading How Can We Fix Legal System Failures to Properly Handle Sexual Offenses? →

Clearing agents want rules for licence renewal - Business Daily (press release) (blog)

Google International ADR News - Tue, 2018-10-09 12:25

Business Daily (press release) (blog)

Clearing agents want rules for licence renewal
Business Daily (press release) (blog)
“Taking into account the expense and time consumed in court corridors and considering that the matter at hand is based on policy and compliance for that matter it is my honest opinion that you consider the option of the Alternative Dispute Resolution ...

Concerns on the New Singapore Convention

Business Conflict Blog - Tue, 2018-10-09 10:52

The United Nations Commission on International Trade Law (UNCITRAL) has announced agreement on a “United Nations Agreement on International Settlement Agreements Resulting from Mediation.”  Informally named the “Singapore Convention,” the instrument has been hailed as a long-sought mechanism to give cross-border disputants the confidence that, if they engage in mediation of international commercial disputes, any resulting agreement will be enforceable by its terms.  The rational stated in the Preamble to the Convention is “that the establishment of a framework for international settlement agreements resulting from mediation that is acceptable to States with different legal, social and economic systems would contribute to the development of harmonious economic relations.”

A review of the provisions of the proposed Convention reveal, however, many aspects that are inconsistent with fundamental attributes of commercial mediation as practiced in Western jurisdictions, including the United States and the United Kingdom.  Moreover, the Convention’s clear reliance on the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) exposes fundamental confusion in the distinction between enforcing a contract and enforcing an award.

  1. Concerns of Mediator Attestation to the Settlement Agreement

It is the intention of the drafters that this treatment of “enforcement” be granted only as to “agreement[s] resulting from mediation.”  The question then arises how to verify that an agreement presented to the court of a country that is a party to the Convention is one that resulted from mediation.  Article 4.1(b) sets forth four possible ways that the party seeking enforcement may prove that it is such an agreement.  Two of them contemplate that the mediator attest to that fact by signing either the settlement agreement or another document “indicating that the mediation was carried out.”

Many mediators conscientiously refuse to sign a settlement agreement.  Most American mediators follow the practice that, consistent with their mediation agreements providing that they not be subpoenaed as a witness, they neither draft nor execute any written memorial that may be interpreted as witnesses its execution or – even worse – including them as a party to the rights and obligations set forth therein.

Additionally, many mediators decline to comment on whether a mediation was carried out, and among what parties, in the exercise of their obligation of confidentiality.  My own mediation agreement, by which parties engage my services, provides in part: “The Mediator will maintain in strict confidence all information arising out of or in connection with this mediation regardless of the form that information might take.”  I understand this to embrace the fact that a particular party engaged in a mediation with another particular party on a particular date concerning a particular issue.  Although I sometimes refer to a mediation (for example, in the course of my teaching or training), I never reveal the names of the parties and often disguise the information by, for example, changing the date, gender, or substantive issue involved.  (See Standard V(A)(3) of the Model Standards of Conduct for Mediators (2005)).  To my knowledge, this is common practice in both the UK and the United States.  To not only permit but, in some cases, to require a mediator to reveal that information is inconsistent with both contractual and statutory provisions that are broadly recognized.

2. Concerns of Refusal to Enforce Grounded on Mediator Conduct

Article 5 sets forth grounds upon which a court in a subscribing State may refuse to enforce a settlement agreement arising from mediation.  Article 5.1(e) provides that an authority may refuse to grant the relief sought against a party to an agreement if that party furnishes proof that “[t]here was a serious breach by the mediator of standards applicable to the mediator or the mediation without which breach that party would not have entered into the settlement agreement.”

This provision can be interpreted as a map for counsel to relieve its client of its obligations under a settlement agreement, by focusing on the conduct of the mediator.  Even the most superficial review of the body of case law in the United States arising from FAA Section 10(a)(3) – authorizing the vacatur of arbitral awards for arbitral “misbehavior”, frequently arbitral failure to provide timely and sufficient disclosure – leads one to shudder at the mini-trials to which this provision is likely to arise.  What standards are applicable to this mediator and this mediation?  What conduct of the mediator constituted violation of those standards?  What witness to the alleged conduct is competent to testify as to the alleged violation?  Shall the mediator be called to explain why the contested conduct does not constitute a violation of the applicable standards?

And what of the deeply entrenched principles – subsisting (in my jurisdiction of New Jersey) in statute, court rule and private contract — that no party will subpoena the mediator to testify in any proceeding; that mediation communications are confidential; and that such communications are also privileged and may not be introduced in any proceeding?  Shall we have contested motion practice on whether proffered evidence of mediator misbehavior shall be admitted before the trier of fact in an action to deny “enforcement” of the settlement agreement?

3.  Holistic Concerns Regarding “Enforcement” of Mediated Settlement Agreements Generally

There is also the more holistic concerns about the entire idea that an agreement arising from mediation is “enforceable.”  Arbitrations result in awards – drafted by tribunals with authority – imposing obligations on the “losing” party that can certainly be enforced by their terms.  By contrast, settlements (whether mediated or not) result in agreements, with mutual obligations whose authority derives from the parties’ consent, and often they are incapable on their face of being merely “enforced.”

Take, for example, a cross-border mediated settlement in which one party agrees to supply the counterparty with such quantity of material as the counterparty “may reasonably require,” and to do so in a “commercially reasonable” period of time after notice.   The counterparty now complains that it did not receive the material when it was needed, and seeks to “enforce” the agreement.   What notice was given, by whom and to whom?  Was the amount required reasonable?  And was the time period “commercially reasonable”?

Or, as another example, by way of compromise in the course of a negotiation, a arty agrees to supply a store with chocolate cake at a lower price, and also to supply cakes that are “ethically sourced.”  It turns out that, unknown to anyone, the ingredients of the cakes were not ethically sourced and the store seeks to “enforce” the mediated settlement agreement, by holding the defrauded supplier strictly liable for its “breach” of the settlement agreement.  Under commercial practices, the Convention on the International Sale of Goods, or other standards, is the supplier in breach?  And is it a fundamental breach?  And does the agreement support lost profits?  Exemplary damages?

In both these cases, an arbitration tribunal may interpret the contract, resulting in an award that is enforceable by means of the New York Convention.  But may a court “enforce” the settlement agreement on its terms by means of the Singapore Convention?

How to resolve construction disputes in Abu Dhabi - Construction Week Online

Google International ADR News - Tue, 2018-10-09 07:45

Construction Week Online

How to resolve construction disputes in Abu Dhabi
Construction Week Online
Among the reasons behind this, according to Badman, are the maturity of the construction market; the increased number of international contractors requiring certainty and a recognised method of dispute resolution; confidence in the local arbitration ...

and more »

The Blockchain ADR: Bringing International Arbitration to the New Age

Kluwer Arbitration Blog - Tue, 2018-10-09 02:03

Marike R. P. Paulsson

Sometimes, the establishment needs to step aside to let the next promising generation create a new way forward: So it commences with entrepreneurial students at the University of Miami, combining talents of engineering, technology, and international law and arbitration. It is by thinking out of the box that disruptive changes happen and they must in order to break through an outdated status quo. The founder of “Blockchain ADR”, Alexander Fischetti, launched the idea of using blockchain for international arbitration in Sao Paolo, in March 2018. The University of Sao Paolo and the Global Legal Institute for Peace collaborated with the World Economic Forum to understand blockchain from the engineering, the economic, and the legal perspective.

The idea of blockchain is that it is a platform, a technological carrier of data, if one wishes to understand it that way. When an engineer from the University of Sao Paolo, not versed in international arbitration, asks: “Are international arbitrations mostly conducted with written submission and in person hearings?” One could still answer defiantly that in the modern era of electronic communication, institutions handle arbitrations by accepting electronic submissions and facilitating virtual hearings. However, then the engineer asks: “Are those documents submitted through email platforms and similar carriers?” The answer is: “Yes, probably.” Email carriers are far less secure than a blockchain carrier. They are too easy to hack. Blockchain is not. The step from paper submissions to email seemed acceptable when the step to blockchain was not. The resistance to blockchain by the establishment is the resistance to disruptive change but not a rational one, and it is certainly not an informed resistance.

What are the advantages of blockchain? The secure transportation of data, the possibility of storing original data and the almost 100 % guarantee that data will not get lost. What then could the outcome be under the New York Convention? Are there advantages and new challenges? Yes.

Article II of the New York Convention and the Blockchain

Article II of the New York Convention provides that arbitration agreements must be, in principle, recognized as binding. If the requirements listed under Article II are met, a court shall refer the parties to arbitration. This provision was perhaps construed in a timely fashion during the three week conference in 1958 but the consensus to add Article II to the New York Convention was one of the 11th hour and with that came some inevitable drafting errors.

Article II dictates that the arbitration agreement must be valid and its subject matter must be arbitrable. Recognition cannot take place if the agreement would be null and void or incapable of enforcement. Yet, the real hurdle to modern day recognition of the arbitration agreement is the ‘in writing’ requirement of Article II(2) of the New York Convention. The agreement meets the ‘in writing’ requirement if the agreement or the clause has been signed by the parties or has been concluded through an exchange of telegrams or telefaxes. The 2006 UNCITRAL Recommendations addressed the outdated idea of telegrams. UNCITRAL recommends that this requirement must be read to ‘include’ the electronic means of communication, and this would open the door to using blockchain as a means to conclude arbitration agreements.

So what is the advantage of blockchain for arbitration agreements? The arbitration agreement once concluded cannot be altered on this platform. The original is preserved on the blockchain. As far as securing those agreements and not losing the data, it is better placed on the blockchain. Now that UNCITRAL has endorsed the use of electronic communications, parties ought to use a blockchain format rather than other electronic carriers. The blockchain provides the users with unique keys with which only they can access the data. This means that the parties to the arbitration have a unique way to access the original arbitration agreement without being able to alter it (or lose it for that matter). Subsequently, the parties can allow the arbitral institution to have a key as well to the data and they can provide that data to any enforcement court that is called upon to refer the parties to arbitration. Article II with its ‘in writing’ requirement is not simply a matter of evidence as it is under most national arbitration laws. At the time, an ample discussion took place among delegates to feature the idea of tacitly accepting an agreement to arbitrate. At the time, that idea was rejected because the delegates recognized the reality that modern customs in international trade dictated the use of agreements in writing. The takeaway is that the New York Convention including Article II should over time be adapted to modern customs in international trade, and soon that should include arbitration agreements on the blockchain.

Article IV of the New York Convention

If Article II has often led to the premature death of arbitration because most agreements did not meet the now rather stringent ‘in writing’ requirement, one has yet to explore the challenges under Article IV of the New York Convention, which I tend to refer to as the Pandora’s Box. Article III is perhaps the core instruction to courts under the New York Convention: courts of the country where enforcement is sought must recognize awards as binding. There is a presumption of validity. Pieter Sanders, the founding father of the New York Convention, created the allocation of the burden of proof in Articles IV and V (referred to in Article III). Refusal can only take place on the basis of the grounds listed in Article V. A court can grant the enforcement if the applicant has complied with the requirements listed in Article IV. A court will assess the submission of documents under Article IV on a prima facie basis only. Article IV of the New York Convention provides that the successful party in arbitration must supply the original arbitration agreement or a copy thereof, the original award or a copy thereof, and finally, the applicant must provide a sworn translation in the official language of the country where enforcement is sought.

With that, the request for enforcement ought to be simple which supports the idea that enforcement of an award by the successful party in the arbitration should be relatively simple which is in line with the purpose of the New York Convention, which contributes to the effectiveness of international arbitration. Yet, in practice, Article IV became a volatile article and the subject of unscrupulous use by counsel and judges alike. This is because Article IV also requires that copies must be certified and signatures authenticated. However, not a single guideline was provided as to who should do this, where this should be done and what should be authenticated: the daunting ‘Ws’.

If the parties were to use the Blockchain ADR as a platform for international arbitration and enforcement under the New York Convention, many of these obstacles under the New York Convention could be disposed of.

The Blockchain ADR, as discussed above, would be the platform holding all documents and data related to an international arbitration procedure from beginning to end, meaning that the arbitration agreement and the arbitral award(s) would be stored here. This means that the party requesting the enforcement of the award under Article IV of the New York Convention, can simply access the blockchain server with its unique key to find not a copy but the original arbitration agreement and the original arbitral award. Because the data on the blockchain is authentic, no certification of copies or authentication of signatures is required. Blockchain holds originals that are secured, that cannot be altered or lost. It provides an answer to the many questions raised under Article IV of the New York Convention. It would, therefore, be wise for users in arbitration and stakeholders to implement the idea of blockchain in order to preserve some of the core provisions of the New York Convention and transplant those sixty year old texts to the next era.

Moving Forward

In order for users to rely on this, it will again be necessary for institutions and legislators to adapt rules and laws. First, the New York Convention – Article IV – does not include the possibility of using the Blockchain for international arbitration, surprisingly in 1958. UNCITRAL would have to issue recommendations as they did in 2006, to endorse the use of blockchain in addition to the other forms of electronic communication that provides a legitimate basis for including blockchain-based ADR – with its secured storage of data that are originals and authentic – in Article IV. It would have to issue a recommendation that provides that originals are not only paper originals but ‘blockchain originals’ that do not require authentication or certification given the nature of blockchain. No more daunting ‘Ws’. Admittedly, the status of those recommendations under Article 31 of the Vienna Convention on the Law of Treaties is one of soft law only. But realism compels us to resort to this, as one could not imagine a replacement of the treaty itself or even an amendment or supplement to the treaty. Yet, we must allow our disruptive game changers to bring this pivotal form of dispute resolution to the New Age of international trade.

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The post The Blockchain ADR: Bringing International Arbitration to the New Age appeared first on Kluwer Arbitration Blog.

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I’m proud to announce Nancy Hardin Rogers’ receipt of the International Academy of Mediators Lifetime Achievement Award. I’ll let IAM’s description speak for itself: Nancy Hardin Rogers’ impact on mediation as we currently know it places her among the living legends of ADR. From her work on the initial drafting of the Uniform Mediation Act … Continue reading Nancy Rogers Receives Lifetime Achievement Award from IAM →

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Google International ADR News - Mon, 2018-10-08 09:31

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