The aim of this guide is to provide its readers with a pragmatic overview of the law and practice of international arbitration across a variety of jurisdictions. The level of uniformity in this area is a topic in itself as international arbitration continues to straddle the well-ingrained legal cultures of the globe.
Each chapter of this guide provides information about the current issues affecting international arbitration in a particular country and addresses topics such as the legal requirements of a valid arbitration agreement, the authority and obligations of arbitrators, the governing law and procedure, preliminary and interim relief, the rules of evidence and the enforcement of arbitral awards.
International arbitration continues to play a critical role in the settling of transnational disputes in what is an increasingly interconnected business world. But the smooth operation of this means of dispute resolution, which has no single, defined jurisdiction (at least not in the same sense as national courts), requires that it be honed and shaped through practice. In the following paragraphs, I shall attempt to draw attention to some of the more interesting and recent trends in the development of international arbitration practice.
Transparency, Efficiency and Diversity Measures
The 2015 International Arbitration Survey conducted by White & Case LLP and Queen Mary University of London identified concerns as to a notable lack of transparency in institutional decision making. 55% of respondents felt that the level of transparency surrounding how arbitrator appointments are made by institutions needed to improve.[1] 65% felt that publicly available information about the average length of time taken by tribunals in an institution’s arbitrations ought to be published.[2]
Such concerns appear to have prompted a reaction from some of the major arbitral institutions. The LCIA was quick to undertake an analysis of its cases and to provide users with information on the average costs and duration of an LCIA arbitration.[3]
On 5 January 2016, the ICC announced that it will now publish the names and nationalities of arbitrators sitting in all ICC cases registered from 1 January 2016. The list will detail whether the arbitrators were appointed by the ICC Court or by the parties, in addition to specifying which of them is the chairperson. (Note however that the parties may opt out of disclosing these details. In a further move to deal with parties’ concerns regarding timing and efficiency, the ICC has introduced costs consequences to be applied against arbitrators for unjustified delays in submitting draft awards). A tribunal is now required to submit a draft award within three months of the last substantive hearing or the filing of the last written submission, whichever is the later, failing which it may face financial consequences. In a bid to incentivise tribunals to meet this target, the ICC Court may also increase arbitrators’ fees in cases where a tribunal has conducted the arbitration expeditiously![4]
A by-product of the drive towards greater transparency has been the uncovering of a troubling lack of diversity within the ranks of international arbitrators. The arbitration community remains dominated by Anglo-European white men. But, as alluded to below, the spread and reach of international arbitration is growing. Twenty-first century litigating parties are now from Asia, Africa, Latin America and the Middle East, as well as the more established regions of arbitration. The fact that, in 2013, despite 32.3% of the parties to ICC arbitration being from Africa or Asia and the Pacific, less than 15% of the arbitrators appointed that same year were from these geographical regions.[5] Publication or arbitrators’ nationalities may help in reducing this deficit but one suspects the problem is likely to remain a hot topic for the foreseeable future.
The under-representation of women has also been brought to light, triggering the “Equal Representation in Arbitration Pledge”. The pledge “seeks to increase, on an equal opportunity basis, the number of women appointed as arbitrators in order to achieve a fair representation as soon as practically possible, with the ultimate goal of full parity”[6] and now contains 1221 signatories[7]. One of these signatories, the Swiss Chambers’ Arbitration Institution (SCAI), has recently published its 2015 caseload statistics, revealing some interesting figures on the topic of gender diversity. The statistics show that 47% of the arbitrators appointed by the SCAI’s Arbitration Court were women, appointed largely as sole arbitrators. Contrastingly, however, the number of women appointed by parties and co-arbitrators was drastically lower, at 5%. The same is true of the LCIA: of all appointments of women made in 2013, approximately 75% were selected by the LCIA Court.[8] It would appear, therefore, that arbitral institutions are staying true to their pledge while parties and co-arbitrators could be doing more to advance the cause.
Arbitrator Selections
The transparency-drive surrounding arbitrators’ nationality, ethnicity and gender does not appear to have satisfied parties’ hunger for information; they want more. In selecting arbitrators, for example, parties are unsurprisingly seeking reliable selection criteria that enable them to make a choice best suited to the arbitral process.[9]
Earlier this year, Ema Vidak Gojkovic, Lucy Greenwood and Michael McIlwarth sought to understand “how to bridge the information gap” by surveying the arbitration community on whether arbitrators should make their procedural preferences publicly available. [10] 97.81% of respondents (comprising users and arbitrators alike) thought that making procedural preferences and case management skills of arbitrators known to the parties in advance would better serve the interests of their clients.[11] In order to gauge this information, 80.15% would be willing to send a questionnaire to the potential arbitrators and, tellingly, 94.33% of potential arbitrators taking part would be willing to complete a questionnaire as part of the process of being considered for an appointment.[12] The results are noteworthy. It would appear that parties are not receiving as much information as arbitrators are willing to provide; caused perhaps by parties’ penchant for known arbitrators when more peripheral arbitrators may be more open with their procedural decision-making. What is clear is that parties appear to be feeling short-changed by the arbitral process generally, countering the assumption that party satisfaction is tied solely to considerations of time and cost. Questions on the level of disclosure ordered and the number of submissions permitted appear to be just as relevant; while having to guess the behaviour of arbitrators on the basis of their nationality and legal training does not appear to be considered a satisfactory way to play.[13]
While the findings of a single survey on this issue are unlikely to spark further major change in the levels of information provided by the major institutions, arbitration practitioners should ignore these findings at their peril. Clients’ demands appear to be growing and the international arbitral process needs to attempt to satisfy these, where possible, if it is to maintain their confidence.
The Regionalisation of Arbitration: Development of New Seats
Europe is home to a number of well-established arbitral institutions; the ICC, LCIA, SCC and ASA are acronyms which form part of any modern arbitration practitioner’s lexicon. But what of the rest of the world? Is the sphere of influence of international arbitration expanding?
The emergence of new economic powerhouses in the world over the past two decades has created opportunities for other arbitral venues. Singapore, home to SIAC, and Hong Kong, the domicile of HKIAC, are now established destinations for disputes connected to Asia. It is Africa and the Middle-East, however, which play host to the newly burgeoning seats of arbitration, whilst promoting their less established national arbitral institutions.
The average GNI per capita in Sub-Saharan Africa more than tripled between 2003 and 2014.[14] The increase in foreign investment brought, inexorably, more international disputes to Africa. The now long-standing tradition of arbitration in international trade and the desire of multinational companies to avoid local courts appear to have combined to spark the rise of international arbitration in Africa as much as anywhere.[15] Mauritius, in particular, has taken a series of recent measures to promote itself as an arbitral venue, including the adoption of new legislation, the launch of a new international arbitration centre in collaboration with the LCIA and the conclusion of a host country agreement with the PCA in The Hague. Mauritius also recently hosted the ICCA Congress in May 2016; the first ICCA Congress ever to be held in Africa.
As for the Middle East, the pathway to international arbitration has been paved (sic) by the construction industry. International contractors and engineering companies fighting for state-procured construction work have, similarly to Africa, brought their commitment to international arbitration with them.
Notwithstanding, scepticism remains regarding international arbitration in parts of the Middle East. State entities in Saudi Arabia, for example, still must obtain government approval before agreeing to any arbitration clause. Enforcement of arbitral awards is a further hurdle to the proper functioning of an international arbitration regime in the region. While most Arab countries, save Iraq, Libya, Sudan and Yemen, have now acceded to the New York Convention, enforcement of foreign awards and judgments in the Arab world has been perceived as having been problematic (even if the evidence is often anecdotal or piecemeal)..
Dubai has nevertheless been attracting an ever increasing share of Middle East-related disputes in recent years. The latest data shows that 310 cases were registered with the DIAC in 2013, compared to a mere 77 in 2007.[16] It remains to be seen whether the DIAC has maintained this upward trend. One factor in its favour, however, is that its arbitral rules are quite in-keeping with those of the other major arbitration centres of the world. The latest draft 2016 DIAC Rules are currently available for public consultation on the DIAC website.[17]
Further, confidence with regard to enforcement proceedings in Dubai is likely to be generated as a result of a recent ruling of the Dubai International Financial Centre (DIFC) Court of First Instance. On 11 May 2015, the DIFC Court of First Instance permitted the enforcement of a foreign ICC award against an award debtor registered in mainland Dubai.[18] The judgment sparked a number of recent examples of the DIFC Courts’ support for the enforcement of foreign awards in mainland Dubai through its offshore jurisdiction and highlights an area of much needed improvement to this facet of international arbitration in the region.[19]
The success of the growth of arbitration in locations such as Mauritius and Dubai needs to be continued. It is to be hoped that the modernisation of arbitration laws and ratification of the New York Convention 1958 by the world’s emerging economies leads to the establishment of additional arbitration centres across the globe so as to increase the global effectiveness of international arbitration still further.
Brexit
The United Kingdom’s decision to leave the European Union on 23 June 2016 marked an unprecedented move in the Union’s history, but is it likely to affect London as a seat of international arbitration?
English law is likely to remain a popular choice of substantive law for international commercial parties. While the UK will need to extricate itself from the web of EU Directives and Regulations, it would appear that Brexit is unlikely to bring about a major attitudinal change in parties’ considerations when electing English law as the governing law for their contracts.
The LCIA was nevertheless quick to reassure the market that business-as-usual was not set to be interrupted by the outcome of the referendum.[20] Brexit may, in fact, provide London with something of an advantage. The English courts’ embrace of anti-suit injunctions in respect of proceedings brought in a Brussels Regulation-state contrary to an arbitration agreement had previously been shot down by the European Court of Justice in the West Tankers case. It is not inconceivable that Brexit may herald a move to re-establish anti-suit injunctions in this respect when and if a formal exit is achieved. In any case, just as English law is not set to suffer a knock to its commercial popularity, London as a seat of arbitration looks set to at least maintain its position in the market.
[1] http://www.arbitration.qmul.ac.uk/docs/164761.pdf
[2] Ibid.
[3] http://www.lcia.org/News/lcia-releases-costs-and-duration-data.aspx
[4] See generally: International Court of Arbitration, Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration, 22 February 2016 and http://www.iccwbo.org/News/Articles/2016/ICC-Court-announces-new-policies-to-foster-transparency-and-ensure-greater-efficiency/.
[5] 2013 Statistical Report (August 2014), ICC International Court of Arbitration Bulletin, Vol 25, No 1.
[6] Take the pledge here: http://www.arbitrationpledge.com/
[7] 1221 signatories on 16 August 2016.
[8] http://www.lcia.org/News/diversity-why-it-matters-and-what-we-can-all-do-about-it.aspx
[9] See generally: Ema Vidak-Gojkovic, Lucy Greenwood and Michael McIlwrath, Puppies or Kittens? How to Better Match Arbitrators to Party Expectations, Austrian yearbook on International Arbitration 2016.
[10] See Kluwer survey here: http://kluwerarbitrationblog.com/2016/08/08/puppies-kittens-better-match-arbitrators-party-expectations-results/.
[11] Ibid.
[12] Ibid.
[13] Ema Vidak-Gojkovic, Lucy Greenwood and Michael McIlwrath, Puppies or Kittens? How to Better Match Arbitrators to Party Expectations, Austrian Yearbook on International Arbitration 2016, pp. 2-3.
[14] http://data.worldbank.org/region/sub-saharan-africa
[15] http://kluwerarbitrationblog.com/2016/01/13/arbitration-in-africa-past-present-and-future/
[16] http://www.diac.ae/idias/archiveevents/CASESTATIC/
[17] http://www.diac.ae/idias/
[18] Case No. ARB 005/2014 – A v. B, 11 May 2015 (unpublished). See the following summary: http://kluwerarbitrationblog.com/2015/08/31/difc-court-of-first-instance-supports-enforcement-of-foreign-icc-award-against-a-non-difc-award-debtor/.
[19] See also Bocimar International N.V. (“Bocimar”) v Emirates Trading Agency LLC and DNB Bank ASA v Gulf Eyadah Corporation and Gulf Navigation Holding PJSC.
[20] http://www.lcia.org//News/message-from-lcia-president-and-chairman-on-uk-eu-referendum.aspx