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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.


 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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The post Arbitration as a Market appeared first on Kluwer Arbitration Blog.

The big picture - Vantage Asia

Google International ADR News - Wed, 2018-03-28 01:46

Vantage Asia

The big picture
Vantage Asia
“In that context, it also reduces cross-border transactions and litigation risks; regulatory distortions in international trade and commerce; and the risks associated with enforcing awards, including prohibitive costs associated with the vindication of ...

Syrian Crisis Vs International Law - The Kathmandu Post

Google International ADR News - Tue, 2018-03-27 22:02

The Kathmandu Post

Syrian Crisis Vs International Law
The Kathmandu Post
Mar 28, 2018-After seven years, the Syrian war has reached the level of atrocity and barbarity rarely ever witnessed in the history of civilisations before. The indiscriminate use of lethal weapons has turned Damascus, the Syrian capital, into a hell ...

and more »

Ana C. Rold of Diplomatic Courier Receives 2018 AWIU Internationalism Award - Diplomatic Courier

Google International ADR News - Tue, 2018-03-27 16:30

Diplomatic Courier

Ana C. Rold of Diplomatic Courier Receives 2018 AWIU Internationalism Award
Diplomatic Courier
... which has convened over 3000 multi-stakeholders through a series of global summits and forums to stimulate discussion and solutions on future megatrends. Rold has taught comparative politics at Northeastern University's College of Professional ...

New York State Proposes Amending its Arbitration Law

ADR Prof Blog - Tue, 2018-03-27 10:40
I recently became aware that, through its budget process, New York State legislators are seeking to amend New York’s arbitration law (contained in its Civil Practice Law and Rules) to, among other things, require that all arbitrators be neutral (i.e. no party arbitrators); require certain disclosures by arbitrators relevant to possible bias; permit vacatur based … Continue reading New York State Proposes Amending its Arbitration Law →

Kenya Revenue Authority careers 2018 - Tuko.co.ke

Google International ADR News - Tue, 2018-03-27 09:07


Kenya Revenue Authority careers 2018
This role of this department is in the implementation of dispute management as well as alternative dispute resolution. The key job responsibility of this department includes participating in case review forums, reviewing cases for Alter native Dispute ...

DTI holds overseas and domestic construction information and capacity-building sessions - Business Mirror

Google International ADR News - Tue, 2018-03-27 07:58

DTI holds overseas and domestic construction information and capacity-building sessions
Business Mirror
In case of disagreements, CIAP resolves disputes through Construction Industry Arbitration Commission (CIAC) which is tasked to provide the industry with the necessary alternative dispute resolution facilities for the speedy and equitable settlement of ...

and more »

The lucrative business of Art Law - Study International News

Google International ADR News - Tue, 2018-03-27 05:34

Study International News

The lucrative business of Art Law
Study International News
“What are the legal options for prosecuting individuals involved in intentional cultural heritage destruction? Could we convene an international tribunal to try individuals for their actions as the Allies did after World War II? What other options ...

and more »

Impact of Foreign Direct Investment on Arbitration in Africa

Kluwer Arbitration Blog - Tue, 2018-03-27 02:30

Sadaff Habib (Assistant Editor for Africa)

What is FDI?

Foreign Direct Investment (FDI) is investment in the shares of an enterprise operating in a country other than the home country. Typically, such investment can either be in the form of ‘mortar and brick’ investment or mergers and acquisitions.

FDI has a major impact on the economic growth of developing countries. Africa is one such continent that has become the world’s fastest-growing region for foreign direct investment. A study by the Financial Times data division in 2015 found that Africa enjoyed a 65% increase in capital investment in 2014. The number of FDI projects in the continent rose by 6%. The study found that capital investment into Africa remains, at its core, resource seeking with the majority of the investment going into oil and gas followed by real estate and communications.

What Does This Mean for International Arbitration in Africa?

As a natural by-product, there has been an increase in the number of international arbitration proceedings involving African parties or interests, particularly in the mining, oil and gas, telecommunications and construction sectors. Whilst these arbitrations involve African parties or interests, most of these arbitrations have their seat outside Africa and seldom involve African administering institutions or arbitrators; they are primarily conducted through international institutions such as the ICC or the LCIA.

It is also unsurprising that with the increase in capital investment the lush continent has seen an increase in investment disputes. According to a report by the United Nations Economic Commission for Africa, between 1972 and 2014, African countries have been involved in 111 investment dispute cases. In most, if not all, of these cases the claimant has been a company invoking the violation of a Bilateral Investment Treaty (BIT(s)). Among African countries, Egypt trumps as being the respondent in the largest number of cases (25) and ranks third globally on ICSID. It is followed by the Democratic Republic of Congo (DRC) (8 cases), Algeria (6 cases), and Guinea (5 cases). BITs have been of great use as they provide for disputes between foreign investors and host states to be resolved through international arbitration, for example, under the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) Rules, or ad hoc arbitration under the UNCITRAL Rules. All in all, the arbitration process offers parties greater control and ownership of the process and maintains a strong appeal amongst foreign investors.

On the other hand, countries such as China, which has spent over USD 1.3 billion under the Africa ‘Belt and Road Initiative’, prefer to establish their own arbitration centres such as the China Africa Joint Arbitration Centre (CAJAC) to provide a neutral and cost-effective mechanism for resolving commercial disputes that involve Chinese and African parties. Thus far, CAJAC has set up centres in Shanghai using the Shanghai International Arbitration Centre Rules and in Johannesburg under the auspices of the Arbitration Foundation of South Africa.

The above-mentioned developments have also led to an upsurge in arbitration laws of African countries (Nigeria and South Africa arbitration acts) and revamping of arbitration rules. Moreover, organisations such as the Organization for Harmonization of Business Law in Africa (OHADA), comprising of 17 African states, have reformed their Uniform Arbitration Act and the Arbitration Rules of the Common Court of Justice and Arbitration (CCJA) which came into effect on 15 March 2018 (further details on OHADA can be found here). OHADA arbitration has moved towards including investment arbitration and the CCJA’s aim is for CCJA dispute resolution clauses increasingly to appear in bilateral investment treaties (there are a few, such as in the Guinea-Chad, the Guinea-Burkina Faso, and the Benin- Chad treaties). The CCJA is providing healthy competition for ICSID.

Supported by state authorities and the emergence of CAJACs and reforms such as OHADA’s Uniform Arbitration Act can be seen as a sort of alliance in a post-colonial era where emerging economies are asserting their interests and rights and positioning themselves as international players to be reckoned with. Whilst historically, African parties and foreign investors have mostly turned towards the ICC or LCIA or in some cases ICSID as preferred arbitration institutions to resolve disputes, recent trends have shown a shift. There is a simmering growing preference for disputes to be resolved more “locally.”

A “Seat” in Africa

Generally, the above developments all spell a positive for Africa. However, a lot still needs to be done to increase the popularity of international arbitrations involving African parties and foreign investors to trust local countries as their seat. As many arbitration practitioners will agree, choosing the seat of arbitration is a critical part to arbitration being an effective dispute resolution process. The importance of the seat lies in providing the arbitration with a framework and giving the courts at the seat supervisory jurisdiction. Ultimately, the aim is for an arbitral award to be successfully enforced in the local courts at the seat.

There is a general mistrust in having an African country as the seat in an arbitration and popular choices remain London, Geneva, Paris, Singapore as these places are considered to have a comparatively more arbitration friendly court system. It must be noted though, countries and regions in Africa vary in their approach towards enforcing an arbitral award. For example, the local laws of Nigeria and Tanzania exclude public policy as a ground to challenge a foreign arbitral award (here). On the other hand, an award may be set aside under Ethiopia’s domestic laws if it is wrong in law and/ or sometimes in fact. The former is less unheard of. Section 69 of the UK Arbitration Act 1996 provides, albeit in narrow and specific circumstances, that an award may be set aside if the arbitral tribunal made an error of English law. In contrast, challenging an award due to a perceived “wrong fact” touches and concerns the merit of an award and is, therefore, usually inconceivable in international arbitration where challenges to awards are limited to procedural grounds.

OHADA’s new Uniform Arbitration Act is yet another example of a prominent development. The Act applies to any arbitration proceedings commenced after its effective date for which the seat is in an OHADA Treaty Member State (Benin, Burkina Faso, Cameroon, CAR, Comores, Congo, Cote d’Ivoire, Gabon, Guinea, Guinea Bissau, Equatorial Guinea, Mali, Niger, DRC, Senegal, Chad, Togo). Under the Act, parties may expressly waive the right to file an application to set aside an award (except where this may be counter to international public policy as defined in the Act). Alongside French law, this makes it one of the rare texts that allows such waiver.

Precaution is always better than cure when choosing a seat of arbitration. However, it would be sensible for parties involved in disputes in Africa to understand the local court system of a particular country before completely ruling it out as a seat of arbitration. After all, in the long run, it would be potentially more cost and time effective and efficient if the seat was “local.” In parallel, African countries would be well advised to reform their local court system to make it more arbitration friendly (where and if necessary) as arbitration in and of itself is a form of investment, such that if the “local” system is friendly this is likely to attract international law firms and increase the use of hotels and conference rooms during arbitrations.

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 Impact of Foreign Direct Investment on Arbitration in Africa appeared first on Kluwer Arbitration Blog.

Arbitration Clauses in Summer Associate Contracts for Employment

ADR Prof Blog - Mon, 2018-03-26 12:30
For those of you who don’t follow the lawprof listserv, Ben Davis (Toledo) had an interesting link to an article describing the use of arbitration clauses in summer associate employment contracts.  In response to that message, Brian Farkas, one of Cardozo’s super adjuncts, had this response that I thought would be enlightening for our broader … Continue reading Arbitration Clauses in Summer Associate Contracts for Employment →

Georgia Southern hosts Mock Mediation Club - The George-Anne

Google International ADR News - Mon, 2018-03-26 12:00

The George-Anne

Georgia Southern hosts Mock Mediation Club
The George-Anne
Skills from mock mediation are especially helpful to those pursuing law and criminology as mediation is a growing form of Alternative Dispute Resolution used in resolving criminal, corporate, and other civil disputes. It can also be used in ...

Slow process of sponsorship appeals keeps couples apart: Reasonable Doubt - NOW Magazine

Google International ADR News - Mon, 2018-03-26 10:13

NOW Magazine

Slow process of sponsorship appeals keeps couples apart: Reasonable Doubt
NOW Magazine
There is only one hope for a somewhat speedy conclusion to this ordeal: Alternative Dispute Resolution ("ADR"). ADR is a one-hour meeting between the appellant, the Minister's counsel, and a Member of the IAD who acts as a dispute resolution officer ...

Nordic Offshore and Maritime Arbitration Association (NOMA): Could the Nordic Maritime Model Attract a Wider Audience?

Kluwer Arbitration Blog - Mon, 2018-03-26 02:37

Jacob Skude Rasmussen and Jens V. Mathiasen

The Nordics now boast two Nomas – the world-famous Danish restaurant (noma) and the Nordic Offshore and Maritime Arbitration Association (NOMA). NOMA began operations early this year, and its rules and best practice suggest a more pragmatic, quicker and cheaper service than traditional institutions.

NOMA was established as an initiative of the Danish, Finnish, Norwegian and Swedish Maritime Law Associations, with support from law firms and academics in the industry. It promotes the use of arbitration to resolve disputes and is primarily aimed at the shipping sector where at least one party is Nordic. However, the question arises whether it could attract a wider audience, particularly after Brexit. Nothing prevents non-Nordic parties or non-shipping disputes to be heard before the association.

One way that NOMA tackles the perennial issue of ensuring efficient and quick proceedings is by streamlining international texts. For instance, as compared to the UNCITRAL Arbitration Rules on which they are based, the NOMA rules:

1) Reduce by over a week the waiting time to ask for an arbitrator’s appointment, if a second party has not appointed one, or if two arbitrators have not agreed upon a third;

2) Eliminate the response to a notice of arbitration, so there can be no delays by a respondent claiming that it has not received the notice and no waiting for a response before a tribunal can be appointed;

3) Remove the possibility of requesting an interpretation of an award, and so also remove a delaying tactic; and

4) No longer have an article on tribunal-appointed experts, highlighting that their appointment would be unusual, and reducing time and costs spent in debating the need of such experts and in analysing their reports.

There are also three documents attached to the NOMA rules to assist in efficiency. These are 1) the NOMA Best Practice Guidelines, 2) the NOMA Matrix and 3) the NOMA Rules on the Taking of Evidence.

1) The guidelines assist the tribunal and parties on certain procedural points. For instance, the guidelines provide:

a) Considerations for a case management conference (e.g. are document-only proceedings possible? Are written witness statements or expert reports needed? Should time be allocated for mediation/settlement discussions?);

b) Default deadlines for submissions, for when new evidence and arguments can be presented, and for when hearings should start; and

c) The expected structure for a hearing (i.e. opening statements, examinations and closing statements).

2) The matrix provides a clear table which goes into greater depth about what is to be discussed during the case management conference, suggesting best practice and practical tips such as four-day weeks for hearings, termination fees and use of factual abstracts.

3) The rules on the taking of evidence are sleeker than the IBA’s. This is because NOMA flips the presumption of certain procedural steps. For instance, although the possibility to request documents from a party still exists, the tribunal may not order it unless the parties agree or the tribunal decides otherwise. Similarly, written witness statements are not to be used, unless the parties agree.

So far so streamlined, and such features would appeal to parties wishing to keep down time and costs, as well as to tribunals looking for a solid basis to set clearer and leaner proceedings.

Moreover, not only does NOMA promote Nordic pragmatism, it is timely. The legal effects of Brexit are presently uncertain and, as Michael McIlwrath points out in a previous post, uncertainty is “anathema to dispute resolution clauses”. NOMA accordingly provides an attractive and less uncertain option for shipping (and other) disputes which are traditionally resolved in England because:

1) Nordic lawyers are famously adept at English and indeed the rules state that English is the language which “shall normally be used”;

2) Many Nordic lawyers are familiar with English law because it often governs contracts, and nothing prevents English law governing NOMA cases; and

3) The Nordic system is a useful blend of common and civil law, with a focus on written codes balanced with an advocacy forte because of the habitual emphasis on the hearing when resolving disputes.

For a new set of rules, one could have anticipated provisions on trending topics such as arbitrator diversity, third-party funding, counsel conduct, summary proceedings, tribunal secretaries, etc. Their absence unsurprisingly reflects a Nordic minimalism in focusing on the fundamentals for a final award. Nevertheless, these topics also demonstrate opportunities to grow and adapt to users’ wishes, and of course, the tribunal can bear them in mind when conducting the “arbitration in such manner as it considers appropriate”.

In short, NOMA looks to be a persuasive option for all parties and industries because of its streamlined arbitration services in English. We shall see if, owing to the strength and trustworthiness of the Nordic legal system, NOMA can become every bit as famous as its coincidental namesake.

Jacob Skude Rasmussen and Jens V. Mathiasen are members of Gorrissen Federspiel, one of the law firms involved in the establishment of NOMA. With thanks to Andrew Poole for assistance.

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

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Uganda's war widows: The long fight to keep their family lands - thejournal.ie

Google International ADR News - Sun, 2018-03-25 15:06


Uganda's war widows: The long fight to keep their family lands
Trócaire and its local partners in the area – like the Acholi Religious Leaders Peace Initiative (ARLPI) – work with locals in what they call 'alternative dispute resolution'. They send out counsellors, mediators, and legal professionals to assist ...

The Future for Cross-Border Contracts: In combination with Arbitration Clauses, the UNIDROIT Principles of International Commercial Contracts provide a Practice-Proven Bridge between Common and Civil Law

Kluwer Arbitration Blog - Sat, 2018-03-24 22:29

Eckart Brödermann

Released in 2017 in their 4th edition 2016, the UNIDROIT Principles of International Commercial Contracts (“UNIDROIT Principles”) provide an ingenious tool for cross-border contract drafting and dispute resolution on neutral ground. This is particularly so if the choice is combined with an arbitration clause, because, pursuant to many arbitration laws, “[t]he arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute” (emphasis added; the quote stems from the UNCITRAL Model Law on International Arbitration which has been integrated into many domestic arbitration laws). Thus, if the choice of the UNIDROIT Principles is combined with an arbitration clause, there is no danger of any legal discussion about the soft law character of the principles. The same is true when parties of an arbitration agreement decide to apply the UNIDROIT Principles later, during the arbitration, (I have experienced this twice in my professional practice as an international lawyer; once upon the proposal of the Chairman of a Swiss arbitration, in 2001, and again in 2017 upon proposal of the respondent in a CEAC arbitration, in order to avoid research and proof of otherwise applicable Chinese law to European arbitrators).

Even if the choice of the UNIDROIT Principles is combined with a choice of court clause and that court would require the application of the domestic law of a state, the choice of the UNIDROIT Principles is useful to bridging the gap between common and civil law. The domestic law will step in only if the application of the UNIDROIT Principles would entail a violation of mandatory domestic law which is excluded per se as pursuant to Art. 1.4 of the UNIDROIT Principles, “[n]othing in these Principles shall restrict the application of mandatory rules, whether of national, international or supranational origin, which are applicable in accordance with the relevant rules of private international law.” Most otherwise applicable domestic laws would thereby respect the choice of the UNIDROIT Principles as an expression of party autonomy.

Developed through approximately 35 years of international legal research and discussions (since the establishment of the first Working Group in 1983 at the inter-governmental organisation UNIDROIT in Rome), the UNIDROIT Principles have been described as a “restatement” of international contract law (Bonell). Most of the 211 principles constitute a compromise between different approaches to a given contractual topic, while others reflect a universal understanding or an emerging general principle of law (e.g. Arts. 1.7, 4.1 and 5.1.7). On other occasions, the international Working Group, composed of experts from all major legal systems, has decided for one or the other solution providing in sum a balanced middle ground between the common and the civil law approach (only Section 11.2 on plurality of obligees is content to merely offering a choice for the applicable default rule because the Working Group could not agree on any “better law” approach or compromise). Sometimes the UNIDROIT Principles have proposed a new approach, particularly appropriate for cross-border business (e.g. Section 6.2 on hardhsip). The UNIDROIT Principles also address typical international questions (e.g. a rule on foreign currency set-off, Art. 8.2; or a rule on time zones, Art. 1.12) for which there is no equivalent in most domestic laws.

The UNIDROIT Principles are based on the principle that each contract party is responsible for its own scope of work and its own sphere. It can be excused by force majeure (Art. 7.1.7) or by contractual agreement, which is typically contained in a limitation of liability or an other exemption clause (Art. 7.1.6).

The UNIDROIT Principles, created for cross-border B2B contracts, are smooth to work with. I have been using them close to 15 years on a regular basis in a multitude of contexts: (i) for civil law clients and for common law clients; (ii) for my own law firm’s client contracts when we are instructed by foreign clients or by an international organisation, or for contracts with international cooperation partners from other jurisdictions; (iii) for small and mid-size clients and for large clients listed on the German DAX stock market. For example, when offering sub-contracts for a large construction project to a variety of potential sub-contractors from different jurisdictions, the client offers them a choice between German law from its home jurisdiction and the choice of the UNIDROIT Principles. (iv) I have chosen the UNIDROIT Principles as the applicable contractual regimes, with or without adaptations. I have used them as a check-list. I have implemented individual rules, e.g. on hardship, as templates. (v) I have also used the UNIDROIT Principles as an arbitrator interpreting a clause choosing the general principles of law, or as counsel arguing before arbitration tribunals and even before German national courts (in order to demonstrate that a certain interpretation of German domestic law would best fit the international spirit of a given contract).

As with many legal topics, the devil lies in the details. For example, in case of non-performance, the UNIDROIT Principles provide a number of pragmatic options to both the obligor and the obligee (as defined in Art. 1.11) to cope with the situations, see e.g. Art. 7.1.4 for the non-performing obligor or Arts. 7.2.1-7.2.5 for the obligee.

With this background, the UNIDROIT Principles are an important instrument for all international practitioners although the Principles themselves are not part of many law school curriculums , at least not at any advanced level. An article-by-article commentary provides a useful tool in working with the UNIDROIT Principles and navigating through the myriad of options which they offer to the drafting of contracts, advising businesses and resolving disputes (once there is a dispute governed by the UNIDROIT Principles). Based on my personal work experience with the UNIDROIT Principles (as well as my experience in participating in the discussions of the Working Group of UNIDROIT for several years, as an official observer), I decided to write exactly such an article-by-article commentary (Eckart Brödermann, UNIDROIT Principles of International Commercial Contracts, an article-by-article commentary, published by Wolters Kluwer in 2018, 529 pages). For each rule, I have concentrated on its background, summarized its practical requirements, defined its limits and strived to present options to its application, as appropriate under the given circumstances. Over a period of two years, this made me realise the brilliance of the UNIDROIT Principles and the coherence of the many bridges built between different approaches to so many contractual subjects, many of them so sophisticated that there is usually no budget to spend time on them during the average cross-border contract negotiation.

The article-by-article commentary is a format which has a long standing tradition in civil law. It functions well also for the interpretation of written soft law.

From a business perspective, the use of the UNIDROIT Principles can save time and money in many situations. The commentary is aimed at providing a convenient tool to navigate through the UNIDROIT system.

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

More from our authors: International Arbitration and the Rule of Law
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The post The Future for Cross-Border Contracts: In combination with Arbitration Clauses, the UNIDROIT Principles of International Commercial Contracts provide a Practice-Proven Bridge between Common and Civil Law appeared first on Kluwer Arbitration Blog.

A Brief Analysis of the Legal Background Surrounding Arbitration and the Enforcement of Foreign Arbitral Awards in Brazil

Kluwer Arbitration Blog - Sat, 2018-03-24 02:26

Paula Paixao e Silva Zarazinski


In the past decade, the legal landscape in Brazil has changed significantly to better accommodate alternative dispute resolution methods, including mediation, conciliation, and arbitration. Brazil recently revised its Civil Procedure Code (Law 13.105/2015) and its arbitration law (Law 13.129/2015). It also enacted a mediation law (Law No. 13.140/2015). These major pieces of legislation contain provisions that encourage and legitimize the use of non-judicial procedures to resolve disputes more effectively.


The Brazilian Arbitration Law, partially based on the UNCITRAL Model Law, was enacted in 1996 and revised in 2015. The revised legislation incorporated pro-arbitration case law established by Brazilian higher courts over the years, responding to an increasing demand for arbitration to resolve disputes in Brazil. Some of the significant changes include the possibility for public entities to use arbitration in disputes relating to transferable property rights, the granting of provisional remedies before the commencement of arbitration proceedings, and the establishment of an “arbitral letter” to enable arbitrators to ask for judicial assistance to compel a party to act or refrain from specific acts. An arbitral letter can be used, for example, to subpoena a person to provide certain documents or physical evidence.


The number of arbitration cases with seats in Brazil has increased, as well as the number of international arbitration proceedings with Brazilian parties arising out of commercial transactions. The International Chamber of Commerce (ICC) listed Brazil seventh in its worldwide rankings with a total of 51 cases in 2017. In May 2017, the ICC also established a permanent case management team in Brazil in response to an expanding market and the country’s strategic importance in the region. Regarding international arbitration proceedings involving Brazilian parties carried out abroad, Brazilian law requires recognition of foreign arbitral awards prior to their execution against assets situated in Brazil. Therefore, for those considering arbitration with a Brazilian party or a party with significant assets in Brazil, it is important to understand the provisions regarding the enforcement of foreign arbitral awards in the revised law.


Brazilian legislation does not distinguish between proceedings taking place nationally or internationally, but an arbitral award issued outside of Brazil is treated as a foreign judgment. Prior to the arbitration law of 1996, a foreign arbitral award needed to first be recognized at the issuing country as a pre-condition for the recognition proceeding in Brazil. This is what scholars called “double recognition.” After the adoption of the arbitration law in 1996, and Brazil’s ratification of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) in 2002, only a “simple recognition” is now required. Moreover, since the passage of a constitutional amendment in 2004, the Superior Tribunal de Justiça (“STJ”) is the Brazilian court with original jurisdiction to recognize foreign judgments, including foreign arbitral awards. While not automatic, the recognition of foreign arbitral awards in Brazil is subject to limited conditions as detailed below and does not require prior recognition in the country of the seat of arbitration.


Article 34 of the Brazilian Arbitration Law provides that a foreign arbitral award will be recognized and enforced in accordance with legally binding international treaties. This provision refers to the New York Convention which allows each contracting state to recognize and enforce arbitral awards in accordance with their own internal rules.


Article 37 of the Brazilian Arbitration Law further establishes the initial steps for recognizing foreign arbitral awards. A party seeking recognition of a foreign arbitral award must first file a petition to the STJ with the original or a certified copy of the award and of the parties’ agreement to arbitrate, together with an official translation of each. If the award is issued by a party to the Hague Apostille Convention, certification follows a streamlined process recognized in Brazil. Otherwise, the award and the arbitration agreement must be authenticated by the Brazilian Consulate located in the country of the seat of arbitration. If there is no Brazilian Consulate, the interested party may certify documents at the nearest Consulate located in the country with jurisdiction over the seat of arbitration.


Moreover, recognition of a foreign arbitral award must follow the procedural requirements under Articles 15 and 17 of the Introductory Law to Brazilian Rules (LINDB) and Articles 216-D and 216-F of the STJ’s internal rules. Accordingly, the STJ will recognize a foreign award when: (a) it is issued by a competent authority, (b) it is final and not subject to appeal, (c) process is properly served on all parties, and (d) the award does not offend “sovereignty, human dignity, and public order.”


It is important to note that these requirements are mostly procedural. The STJ has repeatedly stated that if the procedural requirements are met, reviewing the merits of a foreign arbitral award is not permitted under Brazilian law and the award must therefore be recognized. In Enelpower SPA v. Inepar Energia S/A, for example, the Court stated that “revisiting the merits of a foreign arbitral award is incompatible with the current (recognition) proceeding.”


In addition to procedural requirements, Article 38 of the Brazilian Arbitration Law establishes the situations in which the STJ may refuse to recognize and enforce a foreign arbitral award. These provisions follow the wording of Article V of the New York Convention, including the possibility of refusal to enforce if: (a) the parties were incapacitated, (b) the arbitration agreement is not valid, (c) a given party was not given proper notice of the appointment of the arbitrator or due process was violated, (d) the award exceeds the scope of the arbitration, (e) the arbitral institution was not agreed to by the parties, or (f) the award is not yet binding or has been set aside in issuing country.


Under Article 39 of the Brazilian Arbitration Law, the STJ may refuse recognition of an arbitral award if it determines that the issue is not capable of settlement by arbitration or the award violates public policy under Brazilian law. In addition to these well-known provisions inspired by the New York Convention, the STJ’s internal rules state that a foreign judgment, including a foreign arbitral award, may be refused if it violates “national sovereignty” or “human dignity.” Regarding service on parties, Article 39 allows service following the terms of the arbitration agreement or according to the procedural law of the seat of arbitration. Finally, Article 40 of Brazilian Arbitration Law provides that, if the STJ denies the recognition of a foreign arbitral award, the losing party may seek recognition again after procedural mistakes have been rectified. Recently, the STJ also refused to enforce a foreign arbitral award that had been set aside at the seat, in Argentina, stating that an annulled award cannot be enforced. (EDF International S/A v. YPF S/A).


Brazil is moving towards a culture more conducive to extrajudicial dispute resolution, including international disputes. With modern and arbitration-friendly legislation as well as courts willing to defer to domestic and foreign arbitral awards, parties seeking to enforce an award in Brazil should be able to navigate the country’s legal framework while receiving appropriate judicial support.

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The post A Brief Analysis of the Legal Background Surrounding Arbitration and the Enforcement of Foreign Arbitral Awards in Brazil appeared first on Kluwer Arbitration Blog.

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