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Can alternative dispute resolution tools reduce Middle East construction conflicts? - Construction Week Online

Google International ADR News - Sat, 2018-03-31 04:07

Construction Week Online

Can alternative dispute resolution tools reduce Middle East construction conflicts?
Construction Week Online
... and improvements to alternative dispute resolution (ADR) mechanisms have received backing from a number of legal professionals, as well. But to understand why ADR has become an important topic, it is necessary to first understand why so many ...

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Les Jeux Sont Faits: Swiss Supreme Court Upholds Investment Treaty Award against Public Policy Challenge in a Gambling Case

Kluwer Arbitration Blog - Sat, 2018-03-31 01:05

Georg von Segesser

The Swiss Federal Supreme Court, in a rare appeal against an award in a bilateral investment treaty arbitration, confirmed its statutory restraint in reviewing arbitral awards pursuant to article 190 of the Private International Law Act (“PILA”) and rejected the host state’s request to set aside the award for violating substantive public policy. (Case 4A_157/2017, 14 December 2017)

Facts of the Case

Following the development of a market economy in the 1980s, State X undertook different measures to regulate gambling, including low-stakes gambling with slot machines. The relevant regulation was strengthened over the years, with concurrent increases in taxation. In 2009, following a scandal involving members of X’s government, the regulations were again increased. With this change, all new slot machines were prohibited, with existing slot machines being allowed to remain in operation until the expiration date of their current authorization. This change too was accompanied by an increase in the taxation of slot machines.

Since 2004, three companies organized according to the laws of the State Y (which had entered into a bilateral investment treaty (“BIT”) with State X) were active in X through participations in local companies operating slot machine. While these companies continued to operate their existing slot machines, the increased regulatory and fiscal burden led them to retire most machines and abandon the market entirely in 2015.

In 2014, A, B and C (the State Y companies), after failed conciliation attempts, submitted a request for arbitration against X. They claimed damages, arguing that they were victims of a violation of the fair and equitable treatment (“FET”) clause in the BIT between X and Y.

A three-member arbitral tribunal was constituted with seat in Geneva, which handed down its final award on 16 February 2017. The arbitral tribunal found that X had violated the BIT’s FET clause and ordered it to pay 37M zlotys, with interest. While the Arbitral Tribunal did not find that the companies had been victims of unlawful expropriation, it held that the strong increase in taxation constituted a violation of the FET standard, which warranted the payment of damages to the Claimants.

State X appealed to the Swiss Federal Supreme Court (“FSC”) for the decision to be set aside.

The Supreme Court’s Decision

In line with its constant practice, the FSC based its assessment on the facts of the case as determined by the arbitral tribunal. It reiterated its position that it could not correct or complete the facts on its own initiative even if they were manifestly incorrect or had been determined in a manner that was incompatible with the law; the sole exception being the grounds for review explicitly and exhaustively enumerated in article 190 (2) PILA.

With regard to the violation of the substantive ordre public (public policy), the Supreme Court went on to elaborate that such a violation could only be found under a very restrictive set of circumstances. Specifically, such a violation could only be seen in a decision that failed to consider fundamental legal principles and, in doing so, became irreconcilable with the essential and generally accepted system of values, which – from the point of view predominant in Switzerland – should underlie any legal system. Such principles are, inter alia, the principle pacta sunt servanda, the duty to act in good faith, the prohibition of abuse of law, the prohibition of expropriation without compensation, the prohibition of discrimination and the protection of minors and vulnerable adults. Moreover, a violation of the substantial ordre public could only be found in a decision whose outcome (rather than just its reasoning) was incompatible with the aforementioned ordre public.

In the present case, the appellant argued that the decision violated the substantial ordre public on three different counts, namely by restricting X’s fiscal sovereignty, by disregarding that it acted in the public interest of fighting the dangers of gambling, and by failing to sanction X’s reasoned approach in regulating low-stakes gambling.

In rejecting the appeal, the SFC recalled that its power to review decisions under appeal depended on the arguments invoked against the appealed decision. It then went on to clarify that this differentiated approach was the same whether the appealed decision was rendered in an investment treaty arbitration against a host state or any other type of international arbitration.

It further recalled that, in reviewing jurisdictional decisions pursuant to article 190 (2) (b) PILA, it examined questions of law freely, including any preliminary questions that were determining for jurisdiction. By contrast, when called to examine a violation of the substantial ordre public under article 190 (2) (e) PILA, its review was strictly limited and, consequently, it could not review an erroneous interpretation of a clause in the BIT, even to the point of such interpretation being arbitrary, if it did not fulfill the conditions of article 190 (2) (e) PILA as established in its long-standing jurisprudence.

The FSC ultimately refused to examine whether the arbitral tribunal was right to find that the substantial increase in taxation of the slot machines violated the FET clause under the BIT. It justified its refusal by pointing out that the appellant failed to substantiate how the Arbitral Tribunal’s findings violated the substantial ordre public as defined in the context of a Supreme Court review of an international arbitral award according to PILA 190 (2) (e). Instead of referring to the relevant notion of ordre public, the appellant had referred to a different, vastly more expansive notion, namely a textbook definition of ordre public as the “sum of all legal rules issued in the interest of the community”. As a result, the Supreme Court could not examine how the appellant’s criticism of the appealed decision constituted a violation of the substantial ordre public. Consequently, the appeal was rejected.

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The post Les Jeux Sont Faits: Swiss Supreme Court Upholds Investment Treaty Award against Public Policy Challenge in a Gambling Case appeared first on Kluwer Arbitration Blog.

ADC Mohammed Lawal Abubakar at 45 - Blueprint newspapers Limited (blog)

Google International ADR News - Fri, 2018-03-30 09:34

Blueprint newspapers Limited (blog)

ADC Mohammed Lawal Abubakar at 45
Blueprint newspapers Limited (blog)
Others courses include; Junior Division Course (Army), Military Police Officers' Advanced Course, Senior Course (32) Army, Joint Military Adviser/Attachee Course and Alternative Dispute Resolution Course at Dubai (United Arab Emirate). Colonel ML ...

Changes at PON

ADR Prof Blog - Fri, 2018-03-30 05:36
Earlier this month, it was announced that Guhan Subramanian will succeed Bob Mnookin as chair of the Program on Negotiation at Harvard Law School. This is excellent news. More here, including these words from HLS Dean Manning: “Harvard Law School and the entire negotiation community are fortunate indeed to see this torch passed from one … Continue reading Changes at PON →

New OHADA Arbitration Text Enters Into Force

Kluwer Arbitration Blog - Fri, 2018-03-30 02:16

Roland Ziadé and Clément Fouchard

Linklaters

The revised OHADA Uniform Act on Arbitration (the Arbitration Act) and revised Rules on Arbitration of the Joint Court of Justice and Arbitration (the CCJA) (the Rules), as well as the new Uniform Act on Mediation, entered into force on 15 March 2018. The fruit of nearly two years of consultations among the 17 Member States of the Organisation for the Harmonization of Corporate Law in Africa (OHADA), these new acts will apply to all proceedings initiated as of such effective date. These acts had all been approved on 23 November 2017 by the OHADA Council of Ministers.

The revised Arbitration Act and the Rules, which replace previous versions dated 1999 and 1996 respectively, are in line with the rules and regulations of key arbitration-friendly jurisdictions and leading arbitral institutions. The most significant changes include: (i) provisions for arbitration arising under investment treaties or investment laws; (ii) the binding effect of multi-tiered dispute resolution clauses requiring the parties to undertake negotiation, mediation and/or conciliation prior to commencing arbitration; (iii) various measures to improve the efficiency of the proceedings, including permitting the parties to agree to the waiver of setting aside proceedings and very tight time limits to rule on requests for recognition and enforcement of arbitral awards and on requests for setting aside of awards; and (iv) measures to increase transparency in arbitration, notably by allowing the publication of excerpts of arbitral awards.

While all these new acts are without doubt a positive step towards offering investors a predictable and efficient arbitration framework within the OHADA region, it remains to be seen whether, in practice, the local state courts and the CCJA will succeed in implementing the new rules.

Modernisation of the OHADA arbitration mechanisms

Arbitration of investment disputes.
Both the Arbitration Act and the Rules recognise the importance of offering users a reliable framework to resolve their investment disputes in the region. They now expressly allow foreign investors to start an arbitration based on any instrument related to the protection of investments, including bilateral investment treaties and local investment laws.(Art. 3 of the Arbitration Act and Art. 2.1, Art. 5.1(b) of the Rules) To ensure consistency in the investors’ access to arbitration, the Arbitration Act further confirms the ability of public entities to consent to arbitration.(Art. 2 of the Arbitration Act)

Powers of the arbitral tribunal reflecting modern arbitration practices

Pre-arbitration dispute resolution. In an effort to conform with the present-day practice in relation to multi-tiered dispute resolution clauses, the Arbitration Act and the Rules give the arbitrators the power to suspend the proceedings and instruct the parties to fulfil any preliminary steps (such as mediation, negotiation or conciliation) called for in the dispute resolution clause of their agreement, at the request of a party.(Art. 8-1 of the Arbitration Act and Art. 21-1 of the Rules)

Complex arbitrations. In response to the increasing use of arbitration to resolve disputes arising out of multiparty and multi-contract business transactions, the Rules now address the issue of arbitration with multiple parties and parallel arbitration proceedings. Articles 8.1 and 8.2, which are entirely new, offer the possibility, subject to the various conditions set forth therein, of joinder of additional parties.(Art. 8.1 and 8.2) Other new provisions of the Rules allow the arbitral tribunal to consolidate several related proceedings initiated under separate arbitration agreements (Art. 8.4) and/or involving the same parties.(Art. 8.3)

More efficiency and increased transparency

Parties’ duty of loyalty and efficiency. The revised Arbitration Act expressly provides that arbitration proceedings should be conducted diligently and that the parties should not use dilatory tactics.(Art. 14 of the Arbitration Act) Under the Rules, a party which fails to immediately raise an irregularity is precluded from raising it at a later stage of the proceedings.(Art. 16 of the Rules)

Duty and standard of impartiality and independence. Although arbitrators acting under the previous Arbitration Act were already subject to the duty of impartiality and independence, the revised Arbitration Act clearly states their duty—throughout the pendency of the proceedings—to inform the parties (Art. 7 of the Arbitration Act) and the Secretary General of the CCJA (Art. 4.1 of the Rules) of any circumstances likely to give rise to any doubts affecting their impartiality and independence. Article 8 of the Arbitration Act, which details the procedure for challenging an arbitrator in OHADA arbitration, now imposes a time limit for bringing a challenge, namely a period “not exceeding 30 days from the discovery of the fact which gave rise to the challenge”. (Art. 8 of the Arbitration Act) The lack of any such time limit in the previous version of the Arbitration Act allowed parties to raise challenges at times that might strategically disrupt the smooth running of the arbitration. As an additional safeguard against undue delay in respect of challenges to arbitrators, the revised Arbitration Act provides that if the competent state court before which the challenge has been brought does not issue a decision on the challenge within 30 days, the challenge may be brought before the CCJA. (Art. 8 of the Arbitration Act) The parties thus have in principle the possibility of receiving a decision on the challenge that would not be unduly delayed by the case load of the relevant state court, provided that the CCJA is able to render such a decision in a reasonable period of time.

Constitution of the arbitral tribunal. The Arbitration Act regulates the constitution of the arbitral tribunal, which is composed of a sole arbitrator absent an agreement between the parties. (Art. 5 of the Arbitration Act) Whereas the previous version of the Rules gave little guidance as to how the CCJA selected arbitrators in the absence of party agreement on a method of appointment, the revised Rules adopt the list procedure for such arbitrator appointment. Under such procedure, the CCJA will send the parties the same list of at least three names, the parties will then have the opportunity to strike unsuitable candidates and rank the remaining names in their order of preference, and the CCJA will then appoint the tribunal based on the final list.(Art. 3.3 of the Rules) The revised Rules also add the availability of the potential arbitrator to the criteria to be taken into account when making the appointment.

Prompt recognition of arbitral awards.
The revised Arbitration Act imposes strict time-limits on state courts to decide on recognition and enforcement of arbitral awards. Competent state courts must rule on a request for recognition “within a period that may not exceed fifteen days from its referral”.(Art. 31 of the Arbitration Act) This period is very short in comparison to the several months that have often been necessary to render such decisions in many OHADA jurisdictions. If the state court fails to issue its decision (granting or rejecting recognition) within the 15-day time limit, the revised Arbitration Act specifies that the award will be deemed to be recognised by the state court, which is a rather radical remedy.(Art. 31 of the Arbitration Act) In terms of enforcement, under the revised Rules, the CCJA must rule on a request for enforcement within a 15-day time limit.(Art. 30.2 of the Rules) Finally, the CCJA has only 3 days to decide on any provisional or protective measures in the context of enforcement proceedings.(Art. 30.2 of the Rules) The foregoing features will undoubtedly be welcomed by the international business community, which is eager to obtain effective court decisions on recognition and enforcement quickly within the OHADA region.

Waiver of setting aside proceedings. Following the 2011 Decree which reformed French arbitration law and reforms in several other jurisdictions (Switzerland, Belgium, Sweden, etc.), the new Arbitration Act provides that parties may agree in their arbitration clause or otherwise to waive their right to challenge the arbitral award before the competent state courts (Art. 25 of the Arbitration Act) and the CCJA (Art. 29.2 of the Rules), as long as such a waiver is not contrary to international public policy.

Challenge of arbitral awards before the CCJA in case of delay in state proceedings. Under the revised Arbitration Act, competent state courts must rule on annulment requests within three months of the date of receipt of the application. This new time limit seems extremely ambitious. By way of comparison, setting aside proceedings before the Paris Court of Appeal take on average between 12-18 months. If the state court does not decide the annulment request within the three-month time limit, the challenge to the award may be brought before the CCJA, which, in turn, is supposed to render its decision within six months thereafter.(Art. 27 of the Arbitration Act) Another new feature is that when the CCJA steps in to hear an application to set aside an award in replacement of a state court, the procedure will be an accelerated version of the regular procedure of the CCJA.(Art. 27 of the Arbitration Act) Nevertheless, a six-month time limit will most likely be a challenge for the CCJA, which has tended in the past to take one or two years to render its decisions. Moreover, since there is no sanction for the CCJA’s failure to meet the six-month deadline, it is highly likely that the ambitious targets set in the Arbitration Act will not be met in practice.

As a preliminary conclusion, the revised Arbitration Act and Rules are in line with the modern rules and regulations of key arbitration-friendly jurisdictions and leading arbitral institutions providing a flexible and efficient dispute resolution mechanism. The revision is without doubt a positive step towards offering investors a predictable and efficient arbitration framework within the OHADA region. It nevertheless remains to be seen how, in practice, the local state courts and the CCJA will interpret the new rules and succeed in implementing them.

To make sure you do not miss out on regular updates on the Kluwer Arbitration Blog, please subscribe here.

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The post New OHADA Arbitration Text Enters Into Force appeared first on Kluwer Arbitration Blog.

New leadership as Eversheds eyes Africa's growing legal sector rewards - African Law & Business (ALB)

Google International ADR News - Thu, 2018-03-29 12:26

New leadership as Eversheds eyes Africa's growing legal sector rewards
African Law & Business (ALB)
Capitalising on the potential for greater corporate and disputes work in the energy and infrastructure sectors is at the forefront of Eversheds Sutherland's plans as it appoints a new joint leader for its Africa group. International law firm Eversheds ...

International Arbitration & ADR Update - Lexology

Google International ADR News - Thu, 2018-03-29 08:52

International Arbitration & ADR Update
Lexology
... awareness of this form of alternative dispute resolution process amongst Japanese corporates. While court-directed conciliation for domestic matters is widely used in Japan, mediation remains little used – despite its undoubted advantages in a ...

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Qatar- Call for alternate resolutions in construction projects - MENAFN.COM

Google International ADR News - Thu, 2018-03-29 02:59

Qatar- Call for alternate resolutions in construction projects
MENAFN.COM
DOHA: The Public Works Authority (Ashghal) hosted a joint seminar at its premises in cooperation with the Qatar International Court and Dispute Resolution Center (QICDRC) and Chartered Institute of Arbitration (CIArb) in the area of alternative dispute ...

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Is Online Dispute Resolution The Future of Alternative Dispute Resolution?

Kluwer Arbitration Blog - Thu, 2018-03-29 02:50

Derric Yeoh

YSIAC

The tech revolution has been underway for some time now but has only recently come to the forefront of the general public’s consciousness from the explosion in attention to bitcoin. The progress of technology has allowed it to creep into the domain of alternative dispute resolution. There is now online mediation, online arbitration, and even arbitration utilising the same blockchain technology as cryptocurrencies: blockchain arbitration. These forms of alternative dispute resolution, known as “online dispute resolution”, are increasingly making their presence felt.

Online mediation

An online mediation is usually commenced when an email is sent to the parties informing them of the basic information of the online mediation. Meetings are then conducted virtually in “chat rooms” where the mediator can communicate separately with each party or simultaneously with both parties. There is usually one chat room for joint sessions, one for caucuses or “breakout rooms”, and another for filing and storing documents. This can also be conducted through emails.

Asynchronous online mediation has been shown to be the most popular form of online mediation as it allows parties flexibility and faster resolution of the matter compared to offline mediation, which may see a mediation be put off to a distant date because of the parties’ conflicting schedules. It would also allow parties time to fashion their response, as one’s immediate response at a mediation is not always one’s best response. Other benefits include savings in cost, time and convenience. For example, just last month, the Singapore State Courts’ Community Justice and Tribunals System launched its “e-Mediation” to help those with neighbourly disputes save time and money as they no longer need to go to the courts to file their documents.

However, the downside to online mediation is that it dilutes some of the key features of mediation, which is the human relational aspect of mediation. Online mediation may not effectively capture the various needs, interests, motivations and emotions of the parties involved. The use of emails to convey messages instead of face to face dialogue may also embolden parties to make inflammatory comments which may not occur if they were in the same room with a mediator (a phenomenon that one can easily observe from social media). The effectiveness of communication at the mediation is also highly dependent on the parties’ literary skills in expressing themselves over email. The largely asynchronous nature of online mediation may also be detrimental to the mediation process, as it breaks the momentum that a long and uninterrupted mediation session can bring.

Online arbitration

Online arbitration can be defined as an arbitration in which all aspects of the proceedings are conducted online. Online arbitrations can have hearings through the use of video conferencing, but most online arbitrations simply require parties to upload their evidential documents, respond to questions from the arbitrator and they will receive a decision from the arbitrator. Online arbitration shares many similar advantages as online mediation, such as lower costs and greater flexibility due to their asynchronous nature. The disadvantage of online arbitration not having face-to-face interactions is also less significant as arbitrations rely less on the parties’ interactions but more on evidentiary written submissions.

Online arbitrations are widely used for internet domain name disputes and these can be legally binding or non-binding in nature. Internet domain name disputes are usually governed by the Internet Corporation for Assigned Names and Numbers’ (“ICANN”) Uniform Domain Name Dispute Resolution Policy (“UDRP”). The World Intellectual Property Organization (“WIPO”) is one of the UDRP dispute resolution service providers administering the UDRP Administrative Procedure for domain name disputes and is responsible for appointing panellists to determine the dispute. The decisions made under the UDRP Administrative Procedure are non-binding but they are nevertheless highly effective. This is because while these decisions are not binding on parties, it is binding on the domain name provider, who will then effect the changes as determined by the panellists. While the parties have recourse to litigation if they are unsatisfied with the decision, this is rarely done as the expensive and time-consuming cross-border litigation is unlikely to be justified by the value of the domain name.

Online arbitrations over domain name disputes can also be legally binding. The HKIAC administered Hong Kong Domain Name Dispute Resolution Policy (“HKDRP”) takes a more direct approach in effecting the panel’s decision. Article 4 of the HKDRP states that the parties are required to submit to a mandatory arbitration proceeding which is governed by the Hong Kong Arbitration Ordinance. The award rendered is therefore not subject to appeal in any court and is considered as an arbitration award rendered in Hong Kong for the purpose of enforcement under the New York Convention.

Online arbitration is also used in business to consumer disputes. However it is generally unpopular not because it is a poor medium for dispute resolution, but because consumers view such arbitration agreements as denying them access to justice through the courts and in particular, to class action suits which would offer more compensation.

Smart contracts and blockchain arbitration

All of the aforementioned forms of online dispute resolution have been around for some time, but there is a new form of online dispute resolution which is currently being developed: blockchain arbitration. Blockchain arbitration has been developed as the dispute resolution mechanism of choice for disputes arising from smart contracts. Some knowledge of blockchain technology and smart contracts is required to understand blockchain arbitration.

The blockchain is essentially an incorruptible digital ledger of transactions that can be programmed to record not only financial transactions, but almost anything that is of value for record. While originally devised for cryptocurrencies, there are many potential uses for the technology. The blockchain database is not stored in any single location but is instead spread across many times over a network of millions of computers simultaneously. The blockchain ledger containing the information has been touted to be incorruptible, because to alter any information on it would require the hacker to have the processing capability to overpower the entire network of millions of computers.

What has arisen from blockchain technology are smart contracts. Unlike regular contracts, smart contracts are not written in natural languages such as English or French, but entirely in code. Another point of difference is that, like a program, smart contracts automatically execute or enforce obligations. For example, in a simple contract to sell an item, the smart contract could be coded in such a way that once payment is received, it would automatically transfer the ownership of the item to the buyer.

Blockchain arbitration has in turn been developed in order to service the dispute resolution needs that may ensue from smart contracts. It is unlikely in the previous scenario of a simple buy and sell smart contract that any disputes would occur. However, disputes can come about from more complex contracts which may involve some element of misunderstanding in the transaction. This is where blockchain arbitration comes in. There are currently several models of blockchain arbitration being developed, such as CodeLegit and Kleros. CodeLegit has even drafted a set of Blockchain Arbitration Rules and envisions an Appointing Authority (it is unclear whether it will be an arbitral institution) which will appoint an arbitrator who may be a jurist or a blockchain technician. Communication would be done by email and there might even be an oral hearing over video conference should the arbitrator call for it. This is in essence quite similar to online arbitration.

Kleros on the other hand represents a different system of blockchain arbitration, in which the developers appear to be creating an entire quasi-judicial system, with a general court, followed by two tiers of sub-court divisions e.g. transport division and then air transport division. A rather complex process then occurs where “jurors” who volunteer at these Kleros court divisions would be selected by random number generation. It has also worked into place an appeal system and even bribe resistance system for the jurors.

All of these are fascinating developments in the virtual world, but what does this mean for arbitration practitioners? Despite several tech enthusiasts’ claim that blockchain arbitration is the future of dispute resolution, there are still several fundamental issues preventing blockchain arbitration from replacing traditional arbitration.

First, as a smart contract is entirely in code, some national legislations may not recognise it as a valid contract because it does not fulfil formality requirements. There may also be discrepancies when translating complex contracts into smart contract codes.

Secondly, while smart contract disputes will benefit from arbitration because of its flexibility and its relative ease in cross-border enforcement of awards, there are some difficulties with the arbitral clause in smart contracts. It is not clear whether the smart contract containing the arbitral clause (which is in code) will fulfil the requirement set out in Article 2 paragraph 2 of the New York Convention which requires that the arbitral clause be in writing. However, this problem can be overcome by interpreting Article 2 paragraph 2 according to the doctrine of functional equivalence as stated at paragraph 16 of the UNCITRAL Model Law on Electronic Commerce 1996. Such an interpretation is supported by part two of the New York Convention, which contains UNCITRAL’s recommendation to interpret the “in writing” requirement non-exhaustively. Smart contracts can also be tethered to a written agreement setting out the seat of arbitration, governing law and arbitral rules, which would ensure that the “in writing” requirement is complied with. This would also remove any uncertainties about choice of law or the lex arbitri in the blockchain arbitration.

A problem specific to Kleros-type blockchain arbitration is that it only allows its “jurors” to make a decision based on the transaction evidence on the blockchain, and not hear any arguments from the disputing parties. The resulting arbitral award may be refused recognition and enforcement under Article V(1)(b) of the New York Convention for not giving the party the opportunity to present its case. It may require a significant revamp in Kleros’ blockchain arbitration model in order to adapt it to the New York Convention.

Technology for Lawyers: Beware The Ides of March?

Complex and high value disputes will remain the province of traditional alternative dispute resolution. However, with traditional arbitration increasingly incorporating modern technology into its proceedings, the distinction between online arbitration and traditional arbitration is becoming less clear. What cannot be denied is that with improved technology and automation, less complex disputes work will be claimed by online dispute resolution services. It is therefore imperative that lawyers continue to improve themselves and keep abreast of the latest legal and technological developments to avoid falling by the way side in the wake of technology’s relentless march.

To make sure you do not miss out on regular updates on the Kluwer Arbitration Blog, please subscribe here.

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The post Is Online Dispute Resolution The Future of Alternative Dispute Resolution? appeared first on Kluwer Arbitration Blog.

Stone Soup:  It’s a Great Idea But . . .

ADR Prof Blog - Wed, 2018-03-28 20:47
We all know about situations when people say that they really like the idea of ADR, but it’s not appropriate in their particular case.  Sometimes there are very good reasons not to use an ADR process.  Other times, not so much. There may be similarities in some people’s reaction to the idea of using a … Continue reading Stone Soup:  It’s a Great Idea But . . . →

Corrs appoints new PNG litigation practice head - Australasian Lawyer

Google International ADR News - Wed, 2018-03-28 10:41

Australasian Lawyer

Corrs appoints new PNG litigation practice head
Australasian Lawyer
Two new associates have also been appointed by Corrs, which makes it among the top three Australian or international law firms in the country by size. Mana is one of the most respected solicitors and advocates in the country's National Court. He is an ...

Turkey: Doors Now Open For Istac Arbitration In Public Procurement Agreement Disputes - Mondaq News Alerts

Google International ADR News - Wed, 2018-03-28 09:43

Turkey: Doors Now Open For Istac Arbitration In Public Procurement Agreement Disputes
Mondaq News Alerts
The circular of the Prime Minister's office and the Turkish Public Procurement Authority's recent amend-ments to the standard contracts demonstrate the Turkish public authorities' enthusiasm and determination to make ISTAC an internationally respected ...

Arbitration as a Market

Kluwer Arbitration Blog - Wed, 2018-03-28 03:19

Eirini Kikarea

The Cambridge Arbitration Day (CAD), an annual arbitration conference organised by the Cambridge University Graduate Law Society, took place on the 3rd of March 2018, in Cambridge, United Kingdom. The event was preceded by the Young Practitioners’ Event organised with ICC Young Arbitrators Forum on the 2nd of March 2018, which brought together students and young arbitration practitioners to discuss about how the younger generation can break into the arbitration market.

The overarching topic of the 5th Cambridge Arbitration Day was ‘Arbitration as a Market’. Academics and arbitration practitioners discussed recent developments in the field of international arbitration. Professor Catherine Rogers (Penn State and Queen Mary University of London) delivered the keynote speech of the event, followed by two discussion panels and a debate panel. This post provides a brief synopsis of the ideas discussed in the event.

Competition in the International Arbitration Market: A Race to the Top?

Prof. Rogers’ keynote speech was themed ‘Competition in the International Arbitration Market: A Race to the Top?’ and focused on the implications of competition between different actors in the marketplace of arbitration. Her special focus was on the phenomenon of regulatory competition between arbitral institutions and its impact on arbitration. Arbitral institutions, the primary regulators in the arbitration market, constantly compete against each other by adopting rules and establishing procedures for the effective adjudication of disputes. The question addressed by Prof. Rogers was whether such regulatory competition is a paradigm of ‘race to the top’ or ‘race to the bottom’. She examined competitive forces and observed both a risk of race to the bottom, for instance arbitration for money laundering and abusive trading tactics of third-party funders, and evidence of race to the top, such as the recent transparency movement and the IBA Guidelines for Conflicts of Interest in International Arbitration. Nevertheless, she observed that the arbitration market continues to be opaque and, to a great extent, inaccessible to young practitioners.

Buying Justice: The Demand for Arbitration

The first panel of the conference, chaired by Prof. Stavros Brekoulakis (Queen Mary University of London), focused on demand for international arbitration, the parties’ expectations, and on whether and how justice is bought by the parties. Mr. Hendrik Puschmann (Partner, Farrer & Co) discussed the cost of arbitration, expressing the view that arbitration remains an expensive and non cost-effective endeavour, and Mr. Timothy Smyth (Associate, Arnold & Porter Kaye Scholer) discussed arbitration agreements, focusing on the key elements of a well-drafted arbitration agreement and on ‘pathological’ arbitration clauses. With regard to the cost of arbitration, the conclusion was that demand for arbitration has not decreased despite its very high cost and that the parties are fully aware of this reality. The opposite conclusion was reached about arbitration agreements. Apparently, the parties are often not diligent when signing arbitration agreements and, as a consequence, they do not always get what they want when a dispute arises. Prevention, awareness, and increased transparency were suggested as solutions to this problem, rather than focusing on ex ante cure mechanisms (such as the presumption of validity under the New York Convention).

Mr. Rupert Reece (Partner, Gide Loyrette Nouel) discussed the demand for publicity in international arbitration. He observed two opposite forces. On the one hand, surveys show that the parties perceive confidentiality as an advantage of arbitration and, on the other hand, they show demand for increased transparency, especially with regard to the performance of arbitrators and institutions. He also analysed different sources of the transparency obligation, its relation to public interest, and the balance of confidentiality and transparency in commercial and investment arbitration. Another demand-related subject is the appointment of experts by the parties. Mrs. Michela D’Avino (Associate, BonelliErede) talked about the reasons behind the decision to appoint an expert and expert suitability criteria. She warned on the importance of giving clear instructions to an expert and of ensuring that he/she has a deep understanding of the factual background of the case.

 Selling Justice: The Supply of Arbitration

The second panel, themed ‘Selling Justice: The Supply of Arbitration’, was chaired by Dr. Patricia Shaughnessy (Vice-Chair of the Board of Directors, SCC) and the discussion evolved around competition between different actors in the arbitration market.  Mr. Audley Sheppard QC (Partner, Clifford Chance) presented statistics showing the percentages of cases filed before different arbitral institutions and discussed the differentiating factors driving the parties’ decision when choosing an arbitral institution (including fees, degree of supervision, confidence in their system of appointments, and perception of the industry). Mr. John McMillan (Senior Associate, Wilmer Hale) focused on the market of judges and, in particular, on how arbitrators market themselves. To achieve appointments, arbitrators market their decisions, their views and themselves, often jeopardising the quality of awards and their impartiality.

In his presentation, Mr. Alexander Uff (Partner, Shearman & Sterling) questioned whether the saying ‘whatever client wants, client gets’ applies in international arbitration. He argued that party autonomy is not absolutely boundless but limited by a number of rules deriving from different legal sources, having different purposes, and operating at different stages of the arbitration process. Mr. Graham Coop (Partner, Volterra Fietta) spoke about competition between places of arbitration and analysed the factors leading to the choice of seat and arbitration centre. Finally, Mrs. Marily Paralika (Associate, White & Case) discussed gender diversity in international arbitration. After reviewing relevant surveys, she argued that the lack of gender diversity is a market failure of the arbitration market. The so-called ‘pipeline leak’, the lack of visibility of potential arbitrators, and unconscious bias were identified as the main reasons behind this market failure. Recent initiatives have raised awareness about the issue, but there is still a long road ahead of us.

Debate: “This House believes that investment arbitration demands different rules and principles to that used in commercial arbitration.”

The debate panel was moderated by Mrs. Wendy Miles QC (Partner, Debevoise & Plimpton) and was composed of Dr. Cameron Miles (Barrister, 3 Verulam Buildings), Mr. David Hunt (Associate, Boies Schiller Flexner), Mrs. Ema Vidak-Gojkovic (Senior Associate, Omnia Strategy), and Mr. Kartikey Mahajan (Associate, Kirkland & Ellis). The moto of the debate was ‘this House believes that investment arbitration demands different rules and principles to that used in commercial arbitration.’ Mr. Hunt and Mr. Miles argued in favour of the proposition whereas Mr. Mahajan and Mrs. Vidak-Gojkovic argued against it. The discussion evolved around the public/private character of international investment arbitration, party autonomy, flexibility, predictability, and consistency in decision-making, regulatory chill, transparency, accountability, and the recent reform proposals for the creation of a permanent investment court. In her closing remarks, Mrs. Wendy Miles QC argued that investment arbitration is a ‘hybrid’ creature, a complete fallacy, both alike and different from commercial arbitration. Investment arbitration is different from commercial arbitration mainly because it is a creature of public international law; it follows that rules of treaty interpretation apply and not private law principles. On the other hand, one should acknowledge that the system of arbitration is a whole organic system and that flexibility and party autonomy are the core characteristics of its success.

Conclusion

 The conference provided a unique opportunity to reflect on the system of international arbitration as a whole. The speakers explored the market forces affecting supply and demand in the arbitration market and analysed the effects of competition between different actors, the expectations of parties, barriers to entry, and market failures. The overall impression was that the practitioners and academics that participated in the event positively evaluate the arbitration system, recognising at the same time the need for reform initiatives aiming at improving inefficient market outcomes.

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