Mediation, Arbitration, Negotiation, Facilitation & Training
|
|
International ADR News
covering
Arbitration and Mediation
|
|
Arbitration: Global overview
|
|
Commercial arbitration is a truly international forum for dispute resolution. It has grown in popularity as the global trading economy has transcended international borders and disputes increasingly arise between parties of different nationalities. The enforcement benefits – neutrality, confidentiality and flexibility of arbitration – have all enabled users from across the world to adopt this method of dispute resolution and shape it to suit their business needs.
The international practice of commercial arbitration is based on two fundamental building blocks: the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (also known as the New York Convention) and the UNCITRAL Model Law on International Commercial Arbitration (1985), with the amendments as adopted in 2006 (the UNCITRAL Model Law). Yet there remains little similarly international governance of arbitral process or procedure. Instead, the practice of arbitration has evolved through the preferences and innovations of arbitration practitioners and users. As the use of arbitration expands into more jurisdictions, the knowledge brought by practitioners and users of arbitration cross-fertilises. This has led to an increasingly standardised approach and a general consensus of ‘best practice’ in international commercial arbitration. Indeed, Lexology Getting the Deal Through – Arbitration highlights that there has been a harmonisation of many aspects of arbitral procedure – from the application of arbitration instruments to the use of institutional rules and other soft laws and resources that guide the arbitral process (as further described below).
Despite an increasingly standardised approach to process, an international commercial arbitration can never divorce itself entirely from interaction with national laws. Parties who have chosen to arbitrate their disputes have made a conscious choice to exclude the jurisdiction of any relevant domestic courts. However, the effectiveness of an arbitration and whether the end product, the arbitration award, is enforceable, are still subject to the approach taken by the courts of seat and the courts at the place of enforcement. This reliance on domestic legal infrastructure at critical points in an arbitration can create significant pitfalls for the unwary. As this edition illustrates, there still remain many domestic idiosyncrasies that affect the enforceability of arbitral awards and that require the input and expertise of local counsel.
In contrast, investment arbitration can be far more detached from national legal systems than its commercial arbitration counterpart – for example, an ICSID arbitration (unlike an UNCITRAL investment arbitration) is not tethered to a particular seat, and there should be automatic recognition and enforcement of ICSID awards under the ICSID Convention (notwithstanding some exceptions). Nonetheless, it remains critical to be aware of procedural approaches that are derived from national practice in some jurisdictions. Given many practitioners of treaty arbitration also practise commercial arbitration, it is perhaps unsurprising that there is cross-pollination of commercial arbitral practice into treaty arbitration. A key example of this is the introduction of a provision on security for costs in the draft ICSID rules (which were published in November 2021 and are due to be tabled for a vote in early 2022). Security for costs is a common law provision that was first conceived as an interim remedy in the courts but has now permeated both commercial and investment arbitration. While the role of national courts may be reduced in ICSID arbitration, the practice of investment treaty arbitration is still being influenced by court and commercial arbitral practice and procedure, through the experience of practitioners and users.
Standardisation of arbitration law in domestic countries
The standardisation of commercial arbitration is in part attributable to two key global instruments: the New York Convention and the UNCITRAL Model Law. The ICSID Convention has also created a framework for the protection of international investments.
The New York Convention provides a standardised regime for the enforcement and recognition of arbitral awards within contracting states. This means that parties seeking to enforce arbitral awards in New York Convention signatory states should theoretically follow a consistent enforcement process. Parties seeking to challenge arbitral awards upon enforcement can only do so in limited, specific circumstances, otherwise the domestic courts have a limited role in the arbitral process.
The UNCITRAL Model Law on international arbitration is designed to assist states in reforming and modernising their laws on arbitral procedure to take account of the particular features and needs of international commercial arbitration. As set out on UNCITRAL's website, the Model Law ‘reflects worldwide consensus on key aspects of international arbitration practice having been accepted by States of all regions and the different legal or economic systems of the world’. It is designed to ensure minimal court intervention. As the Model Law has been adopted in whole or in part in over 100 jurisdictions, this means that many international arbitrations are supported by a more or less consistent infrastructure, even if some states have departed from the exact original text to a greater or lesser extent.
Consistency of institutional rules
Neither of the above instruments sets out how an arbitration should be run. Indeed, many of the key questions that arise during an arbitral process are unaddressed in either. This lack of overarching governance of arbitral procedure has led arbitral institutions to become drivers and contributors to the evolution of international best practice in commercial arbitration.
For example, since 2012, we have seen the broad acceptance of emergency arbitrator provisions and provisions for multi-party and multi-contract disputes across all the main arbitral institutional rules. More recently, institutions have started to adopt early determination provisions, expedited procedures, and timescales for issuance of the award. Improvements in technology and the era of covid-19 have accelerated this sharing of best practice, including in the operation of virtual hearings and electronic communications.
Best practice has also extended to areas that are not limited to arbitration procedure, but that are societal issues. For example, institutions have so far been pivotal in achieving greater gender diversity on arbitration tribunals, particularly in terms of the power to appoint the sole or presiding arbitrator. Hopefully, this progress can extend to regional and ethnic diversity soon.
While there is consistency in the type of provisions, however, institutional rules are not uniform and there remain considerable differences. To name just a few examples, the approach to and amount of fees, time limits and the institution’s level of supervision and scrutiny all differ from one institution to another. This affords users with a choice of institution that will best cater for their needs while ensuring that the process will remain consistent with global ‘best practice’.
|
|
New Mediation Scheme to Help Resolve Disputes with Telco and Media Service Providers
v
|
|
“The world is made, not found.” (W Barnet Pearce)
I had been a mediator for about 10 years before I heard parties’ initial words described as their “opening statement.” This may surprise some readers, though probably not if they began, like me, in family mediation, nor community or workplace. Other descriptions are available, as our broadcasters say. I set out below a range of alternative approaches to this crucial invitation. In reconsidering opening statements in mediation I’m not suggesting one way is superior to another. I hope, rather, to hold our practice up to the light and think about the world we make with the words we choose.
One caveat: the term “opening statement” can also describe what the mediator says before the parties open their mouths. That’s not the focus of this blog, though Folger and Bush’s assertion: “The opening statement says it all”(1) applies equally well to both. Words have consequences, and the language we choose at the start sets the tone for what’s to come.
Family Mediation
Family mediators tend to work directly with their clients. Lawyers are rarely present and it’s exceptional, in this jurisdiction, to make much use of private sessions (caucus). Mediator intros are brief. Parties are too busy with their own thoughts to take in much of what’s said. I don’t recall being taught a precise formula for the next step in a mediation, but the aim was clear: identify “the issues.” Family mediators learn early that inviting someone to tell their story is asking for trouble. Some ramble; some accuse; some start away the past; some wind themselves into fury or sadness. So we stress brevity. I think my initial opening was: “What would you like to talk about?” I soon stole a better phrase from a colleague, and my standard invitation was shaped: “I’m going to ask two simple questions: what do we need to tackle and what do you hope to achieve?”Notice the choice of pronouns. “We” are going to tackle things, informed by what “you” hope for. The mediator consciously promotes joint problem-solving while keeping an eye to the future. The world we hope to bring into being is one where separated parents make the shift from adversaries to allies. It’s painstaking, one-step-forward-one-step-back work. It can take several sessions and the focus is relationships as much as resources. Some find family mediators controlling, though we’d probably counter that we’re keeping things on track. In this blog I described a fellow-practitioner telling a conference that a family mediator “got it wrong.”
Workplace Mediation
Workplace mediators also work directly with the individuals concerned, though as disputes escalate parties are more likely to be accompanied by representatives. Despite sharing a working relationship, people may have endured years of unhappiness. Their livelihood and identity probably feel under threat. Unlike family mediation, there is no “best interests of the child” to provide a shared incentive. Many consider severing the relationship, whatever the cost, rather than continue in an unbearable situation.Workplace mediators also tend not to ask for opening statements. As well as the length and accusatory tone described above, the term’s formality invites an adversarial approach. It mirrors formal processes like grievance procedures, where the logic is to convince the authority figure (now the mediator) that the other person is in the wrong. This tends to trigger equal and opposite accusations from the other party. The session can rapidly descend into an attack/defend spiral.
A good example of an alternative beginning can be seen this mediation video by ConflictMasters. First the mediator asks parties to “explain to each other” three areas (discussed in pre-mediation):
1) “What you feel has brought us to the point we’re sitting in mediation today?
2) What’s been the impact of what’s happened on each of you?
3) And what you see as the way forward?”
She deflects the flow of information away from herself; it will be between the people concerned.
They could of course still seize the opportunity to rehearse their grievances. However, this invitation sets the scene for a broader discussion including both personal impact and future improvement. The mediator gives herself permission to move the conversation along if it gets stuck on past difficulties. The world workplace mediators are trying to make is a problem-solving conversation between colleagues. It can be difficult and painful. But the goal is to find a way forward they have shaped and, as a result, can live with.
Community Mediation
I’m not a community mediator, nor have I had that training. However, I’ve noticed those colleagues using yet another expression for what comes next after their introduction: “uninterrupted time.” This seems infused with a commitment to empowerment and implies a certain mediator minimalism. If the parties begin to negotiate unaided most community mediators are happy to take a back seat. Scottish community mediation organisation, SACRO, claims this lets parties “state what has been happening, how it is affecting them, and how it feels.”(2) The world this term seeks to make is one where people have the chance to speak on their own terms, at their own pace and about their own lives.
Commercial Mediation: “opening statements”
Here we draw closer to a world familiar to lawyers. We have “disputes” rather than conflict, “parties” rather than people and “settlement” rather than resolution (despite the blanket term dispute resolution). Mediator websites prime their clients to prepare opening statements(3) as well as written “position statements”(4). Tips for the opening statement itself include “Focus on litigation risk”(5); “demonstrate that you are a worthy adversary… remember [it] is about convincing the opposing party that you have the better case”(6); and the rather stark admission “it gives both counsel and the mediator an opportunity to see how the party would come across during a hearing or trial”(7).What world are we making? To be fair to the commercial mediation community, mediators’ websites mostly stress constructive possibilities for the opening statement. Lawyers and clients are encouraged to avoid personal attacks and tee up a cooperative exchange, while not being a pushover. One US site wisely reminds us that “the objective of the mediation is that of reaching agreement”(5). In practice, however, recent evidence suggests that despite these good intentions a good number of lawyers equate opening statements in mediation with opening remarks in court.
Debbie De Girolamo’s fascinating study of commercial mediators applies Goffman’s concept of “frames” to “answer the question ‘What is going on here?’”(8) A frame has a primary meaning (e.g. opening statements as a constructive start to negotiations) but this can be altered or keyed by what actually takes place: “the activity of the primary frame is transformed into something other than that provided by the original frame” (9).
Before the mediation she observed mediators and lawyers discussing opening statements that would encourage settlement. Yet in the mediation itself the claimants’ solicitor quickly keyed the frame, narrowing the focus to bolster his clients’ position. The defendant’s solicitor then re-keyed the frame to stress his own confidence and strength. As a result the mediation morphed into “a strategic bargaining game where perceptions of weakness are defended by shows of strength underpinned by tactics of the competitive bargainer” (10).
Some may not find this particularly shocking. After all, both parties want to do as well as they can, even in mediation. Yet it is hardly surprising that the term “opening statement” contains an implicit invitation to litigators to do what they know best. In court the open statement is pitched at an adjudicator. It has no business emphasising willingness to settle; quite the opposite. It is rhetoric, highlighting strengths, downplaying weaknesses, and parrying the opponent’s attacks. In the mediation above, the frame of cooperative resolution is immediately changed into something else. Once invited to make opening statements, the lawyers conduct adversarial debate.
What world are we making?
Opening statements in mediation will be with us for a while yet. They undoubtedly serve a purpose. The term conveys a need to prepare along with a certain formality. However, words carry multiple meanings, and mediators need to be aware of the world “opening statement” can create. Like the word “neutral” it is a borrowing from legal culture. It can therefore engender a world of zealous advocacy and adversarial debate, or at least of negotiation in the shadow of the court. If that’s what mediators seek, well and good.The time may have come, though, to rethink the invitation. I’ve laid out examples from other contexts. Commercial mediators have shown great ingenuity holding space for cooperative, problem-solving negotiation in a litigation setting. I look forward to hearing of alternatives to the opening statement that invite parties into the world mediators want to make.
|
|
As part of the 2022 Paris Arbitration Week, Jeantet organised a conference on “The impact of Russian sanctions on international commercial arbitration: from arbitrability to enforcement”. The panel was composed of Crina Baltag (Associate Professor, Stockholm University; and Editor of the Kluwer Arbitration Blog), David Lasfargue (Partner, Jeantet), Niamh Leinwather (Secretary General, VIAC), Evgenyia Rubinina (Partner, Enyo Law), Jacques-Alexandre Genet (Partner, Archipel) and was moderated by Dr. Ioana Knoll-Tudor (Partner, Jeantet).
In light of the current situation in Ukraine, several states took sanctions against Russia, which, in turn, took a series of counter sanctions. The session addressed the issues described below.
The Origins of Economic Sanctions and an Overview of Their Effect on International Arbitration
Over the years, economic sanctions moved from focusing on external goals, such as preventing wars between states, to more internal goals, e.g., concerns with human rights inside of a state. Since March 2014, the EU imposed economic sanctions against Russia for the illegal annexation of Crimea and Sebastopol, then in February 2020, as a consequence of the recognition by Russia of Donetsk and Lugansk and most recently following Russia’s aggression of Ukraine.
The issue of arbitrability of a dispute involving economic sanctions emerged already in 19941), when the Genoa Court of Appeal concluded that a national court had jurisdiction, not an arbitral tribunal, since sanctions touched upon the issue of public policy. This position has nevertheless evolved and in the recent years national courts have constantly confirmed that arbitral tribunals are competent to decide on the arbitrability of the matter.
Although, generally, arbitration is not prohibited by economic sanctions, there are significant consequences when it comes to the information the arbitral institution has to gather with respect to the parties. An illustration of this being Article 10 of the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce, which provides that the SCC can ask for additional information from the parties to understand at the outset of the proceedings if economic sanctions might have an impact on the matter.
Current Sanctions and Counter Sanctions
In 2022, the EU took four packages of sanctions: (i) full blocking sanctions on a large list of individuals and entities and blocking the assets of the CPR, (ii) prohibition to provide specialized financial messaging services to certain banks, i.e., no longer using SWIFT for certain banks, and to sale, supply, transfer or export bank notes to Russia, (iii) prohibition to invest and co-invest with the Russian investment funds and (iv) ban on exportation of certain products and trade restrictions, especially the luxury goods. As far as the US sanctions are concerned, the economic sanctions are similar, having the same targets.
In light of these sanctions, Russia developed a series of countermeasures, promptly releasing a list of “unfriendly States”, which includes all the EU countries, as well as other countries supporting sanctions against Russia.
Among Russia’s first reactions to sanctions was the issuance of the presidential decree dated 28 February 2022, through which it obliged residents involved in foreign economic activities to sell 80% of all the foreign currency they receive from non-residents. This measure is aimed at protecting the rouble and to avoid transfer of currencies abroad.
This was shortly followed by a draft presidential decree dated 9 March 2022 targeting entities with more than 100 employees and owned by shareholders from “unfriendly states” for more than 25%. The draft decree stated that if the executive bodies of the company stop managing the company, leading it to cease or terminate its activity or risking going bankrupt, then the board members or the state bodies could file a request with the court asking for the out in place of an external administration of the company. In this case, the shareholders will be obliged to resume the activity of the company and consequently ask for the cancellation of the proceedings; otherwise, the court might transfer the management of the company to an external administration, that is a public institution. This draft decree raised a lot of concern that an expropriation wave is under preparation. Nonetheless, for the time being, this is only a draft which has not been enacted yet.
How Arbitral Institutions, Notably VIAC, Deal With the Issue of Economic Sanctions
VIAC has a system of checking public websites, including the official website of the parties and entities involved in the arbitration, as well as internal database by using the screening-off and screening-on functions. Equally important, the parties, the arbitrators, but also the subject matter of the dispute play an important role in order to determine if it falls into the scope of the sanctions’ regime. Additionally, VIAC requires the parties to provide more information on their identity, the related entities, and the ultimate beneficial ownership.
Checks are conducted at all relevant stages of the proceedings, particularly at the submission of the statement of claim and of the answer, since money transfers are involved and sanctions might have an impact on such payments.
In order to ensure compliance with economic international sanctions, administrative measures may be taken if (i) one of the parties is under sanctions regime, (ii) one of the parties or their related entity is a citizen of a country subject to sanctions, (iii) one of the related entities is listed under the sanction regime such as entities or individuals directly or indirectly owned, and who are controlling a party in the matter, if they are directly or indirectly owned by a party or they are affiliated in some way.
A worth mentioning novelty in the field is the new regulation that came into force in March 2022, namely article 5. a. a), §1 of the Council Regulation (EU) No 269/2014, which provides that it should be prohibited to engage in any transaction directly or indirectly with a various list of legal entities provided under annex 19 of the same regulation.
Among the challenges this provision may pose in practice is the absence of a definition of the term “transaction”. The current interpretation of VIAC is that legal services are not considered a transaction and that is due to a violation of the right to be heard and the access to justice of the parties that it might trigger.
Russia’s “Anti-Sanctions” Reforms of its Commercial Procedure Code
Pursuant to reforms of the Russian Commercial Procedure Code of June 2020, namely the introduction of Article 248, sanctioned parties (including Russian parties or foreign parties that are subject to sanctions against Russia) are allowed to bring a claim at their place of residence or incorporation, provided that this dispute has not already been brought before a foreign court or before an arbitral tribunal seated outside of Russia, even if the contract contains an arbitration clause or a foreign court dispute clause. In the event arbitration or proceedings before courts are commenced, there is the possibility to ask the Russian courts to order an anti-suit injunction against these proceedings.
Although the initial expectations of the arbitration community were that these provisions would be interpreted in a fairly narrow way, this was not the case.
The interpretation of the aforementioned provision was outlined by the Russian Supreme Court in the Uraltransmash v Pesa case (previously discussed here). Uraltransmash was subject to sectorial sanctions but was able to participate in an SCC arbitration. Despite this, it applied for an anti-arbitration injunction against the SCC arbitration in front of the Russian courts. The Russian Supreme Court overturned all the decisions of lowers courts interpreting Article 248 narrowly and held that the intention of the legislator was to enable all sanctioned parties to take advantage of this article because if a Russian party was subject to sanctions, it meant that it could not get justice before foreign courts or foreign seated arbitrations.
Further amendments have been proposed to the Russian Commercial Procedure Code, a relevant example being the proposal from November 2021 which, if enacted, would give Russian courts exclusive jurisdiction over claims against parties where it is alleged that the foreign counterparty receives a de facto benefit from sanctions, and where the foreign counterparty did not perform its contractual obligations as a result of the sanctions.
In terms of practical implications of these reforms, sanctioned Russian parties can choose where to bring their claim. Although in some cases it might be useful to bring these claims in Russia, the practical utility might be limited, due to uncertainties that may arise in connection to the extent to which the New York Convention might prevent the enforcement of such decisions, which were in breach of a valid arbitration agreement, outside of Russia.
The Impact of Sanctions on Enforcement in the Context of International Arbitration
The panel made first the difference between freezing of assets, which means that the funds remain in the hands of the debtor and seizure, which is a way of depriving the debtor of the property, with the funds being in the end turned over to the seizing creditor.
Economic sanctions may have two major consequences at the stage of enforcement of awards.
The first one is that award debtors are precluded from making any payments to sanctioned award creditors. The question of the interest on these amounts comes then into question, depending on the national law of the debtors. It might prove useful for creditors to put these amounts into an escrow account, in order to interrupt interests from running. The second one is that sanctioned award debtors are precluded from paying with their frozen funds.
In a recent ruling, the ECJ decided that a private creditor looking to obtain an interim measure on frozen funds, has first to refer to the national competent authorities. In most countries, the competent authority is the Ministry of Finance from which the creditor has to obtain a prior authorisation in order to possibly perform an attachment in the future. It can be concluded that the ECJ found a way to prevent in practice any interim measure being performed on frozen funds, since such a prior authorisation will be very difficult to obtain.
Difficulties will arise in practice while trying to enforce awards against targeted or listed Russian entities, as it is probable it will not be possible to enforce against frozen funds.
Conclusion
Sanctions and counter-sanctions raise a number of questions, for the procedural strategies of the parties, for the conduct of arbitration proceedings by arbitral institutions and also for the enforcement of the arbitral awards. With unprecedented economic sanctions taken against Russia and countersanctions taken by Russia, almost weekly, the arbitration community will continue to pay attention and reflect on the impact on these sanctions on arbitration procedures and enforcement.
|
|
In addition, we should be aware that the burgeoning debate seems to leave out discussion of a further area where diversity is lacking in the IA community – an analysis of professional diversity. While the key groups and publication outlets for IA are dominated nowadays by those practising primarily as full-time lawyers, there is hardly any awareness or sustained discussion about the limitations of overlooking diversity of professional backgrounds, perhaps partly because arbitration rules usually do not require arbitrators to have any specific experience, training or qualifications.
However, involving more non-lawyer practitioners (NLPs, such as engineers, architects, accountants) or those who are primarily academics could significantly reduce the persistent formalisation in IA. Expanding professional diversity could also lead to other benefits, including indeed more gender diversity, given that academia does not have the same non-linear remuneration structures for lawyers that disadvantage career progression for many women. These and other issues associated with professional diversity are outlined in our recent research article entitled “Lawyers and Non-Lawyers in International Arbitration: Discovering Diminishing Diversity”. That research article also empirically analyses the ways legal practitioners have come to prevail across the key nodes of influence within the IA sector. The rest of this blog post introduces our key empirical findings.1)
Associations and Institutions Promoting Arbitration
First, we examined key groups that promote IA but do not themselves administer arbitration cases. The influential groups examined were the International Council for Commercial Arbitration (ICCA), the Chartered Institute of Arbitrators (CIArb) and the International Bar Association (IBA).
The ICCA Board as of September 2021 largely comprised individuals falling primarily in the category of practising “Lawyer” (84%), executives of “International or Arbitral Organisations” (IAOs, typically leaders within arbitral institutions) (5%), “Mixed” (typically those having multiple professional engagements) (5%) and “Academic” (4%, essentially full-time). We also examined the composition of ICCA Taskforces for all years: Lawyer (61%), IAOs (18%), lawyers and NLPs working in Litigation Finance (7%), Mixed (7%) and Academic (6%). Authors of entries in the Young ICCA Blog between 19 October 2010 and 17 February 2021 fell into the categories of Lawyer (86%), Academic (10%) and Mixed (2%). Analysis of presentations in ICCA Congresses and related chapters in the ICCA Congress Series over the last 30 years also indicated the growing prevalence of Lawyers (60% over the entire period) within ICCA publications, and in parallel reflecting only small proportions of IAOs (14%), Academic (12%) and Mixed (9%).
The lack of diversity in professional backgrounds was also salient in the other groups. For example, the vast majority of CIArb Board Members in 2021 were from the Lawyer category (78%), in contrast to NLPs making up 15% of the Board (despite the earlier influence of NLPs in CIArb until around the 1990s) and no members falling into the Academic category. Speakers in CIArb Webinars from July 2020 to March 2021 comprised Lawyers (75%), Academic (12%), NLPs (9%) and IAOs (2%).
Meanwhile, the data is comparable at the IBA. As for the committee membership for proliferating IBA instruments, such as the Evidence-Taking Rules, there was an even heavier prevalence of Lawyers (95%) although this was less surprising given that the IBA is essentially a global federation of lawyers’ associations. Similarly, for IBA webinars, mostly from 2020 but also some from 2021, 94% of the key participants were Lawyer; only 4% could be coded as IAOs, while 2% were Academic.
Arbitration Institutions and Their Leaders
Next, we analysed the international and regional arbitration institutions having high caseloads and/or those deemed reasonably representative of civil or common law traditions and geographical diversity. These were the International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA), the Swiss Arbitration Centre, the International Centre for Dispute Resolution (ICDR), the Singapore International Arbitration Centre (SIAC), the Hong Kong International Arbitration Centre (HKAIC), the China International Economic and Trade Arbitration Commission (CIETAC), the Australian Centre for International Arbitration (ACICA), the Asian International Arbitration Centre (AIAC), the Japan Commercial Arbitration Association (JCAA), the Korean Commercial Arbitration Board (KCAB), the Thai Arbitration Institute (TAI) and the newer Thai Arbitration Centre (THAC).
To discern professional diversity within the leadership of these arbitration centres, we looked overall at the membership of various Boards, Councils, Committees, Taskforces and Courts as of 2021. The combined analysis confirmed Lawyers’ predominance (76%), as well as the comparatively small ratios of NLPs (11%), Academics (6%) and IAOs (1%). We further investigated speakers and moderators at webinars and conferences organised by those arbitration centres in 2020 and the first half of 2021: Lawyers (80% in 2020 and 83% in 2021), IAOs (8% and 4% respectively), Academics (5% and 6%) and NLPs (4% and 5%).
Indicative Journals, Books and Blogs
We also considered major journals for international arbitration, complementing an earlier analysis of periodicals and other publications. These were Arbitration International (associated with the LCIA), Arbitration: The International Journal of Arbitration, Mediation and Dispute Management (CIArb), Asian International Arbitration Journal (SIAC) and the Journal of International Arbitration (published by Wolters Kluwer). Again, the overall extent of Lawyer involvement was striking. Editors of these four journals as of September 2021 were mostly Lawyer (75%), although there were somewhat more Academic (22%) than say for the leadership of the arbitration institutions as examined above. Then, we examined all the discernible articles (other than book reviews) published in the four journals from the late 1980s, when three were being published and some debate emerged about the role of NLPs in arbitration.2) Sampling the journals essentially at five-yearly intervals (in 1989, 1994, 1999, 2004, 2009, 2014 and 2019-21) gave the following proportions for authors: Lawyer (71%), Academic (19%), IAOs (2%), NLPs (4%) and Mixed (3%). Analysing authorship categories over time found that absolute numbers and proportions of articles written by Lawyers had grown, especially over 2000-2010.
We further studied editors and authors of influential books and blogs. For books, for example, we investigated the International Arbitration Law Library Series published by Wolters Kluwer, with 59 titles since 1993 when the first volume of the Series was published. Coding editors and authors of these volumes and individual chapters demonstrated the dominance of Lawyer (50%) although a significant minority were from Academic (39%). Other professions such as IAOs, NLPs and Mixed occupied relatively small proportions (3%, 2% and 6%, respectively). On blogs, our analysis concentrated on Kluwer Arbitration Blog (KAB), as one of the most well established and widely read arbitration-related blogs. Comparing the KAB’s editorial team for August 2021 and 2018 (the latest year for which the Wayback Machine online allowed us to access a snapshot of the list of all editors), 80% were Lawyers and 20% were Academics. In addition, we studied backgrounds of blog authors in February, June and November of 2009, 2014 and 2019-21. The sampling found a similar prevalence of postings by Lawyer (79%), some by Academic (16%) and very occasionally by authors from an IAO (2%).
Concluding Remarks
The phenomena confirmed by our empirical research are clear: the entrenchment of lawyers through the world of IA, and the corresponding decline in involvement and influence of full-time academics and especially other NLPs. This growing lack of diversity in professional backgrounds contrasts with gender diversity, which has experienced some statistical improvements in appointments of arbitrators or other leadership positions in some arbitration centres. One response to that ongoing “diversity deficit” might be to encourage more involvement of academics and NLPs in the leadership and activities of the significant arbitration associations and centres, as well as leading publication venues. Such a response will help the IA sector develop diversity of perspectives because, as Joshua Karton suggests, such diversity may be enhanced by arbitrators with varied experiences who may think differently from the arbitration mainstream. At least, we need more discussion and ongoing debate about the remarkable and continuing decline in professional diversity within IA.
|
|
In the absence of concrete publicly available information about arbitrators, arbitration practitioners often resort to cognitive shortcuts and just plain guesswork in the arbitrator selection process. As explored in a previous post, parties and counsel frequently rely on arbitrators’ common-law or civil-law education and practice as indicators for how they might approach key case management issues. With the increasing complexity of international business transactions and the practice of international arbitration, such proxy indicators are no longer a reliable point of reference.
Given the need to access arbitrators’ approaches on various issues, Arbitrator Intelligence recently launched the Arbitrator Perspectives Survey (the Survey). The Survey invites arbitrators to answer many of the questions parties and counsel wish they could ask in an interview (and try to find out through indirect research with people who know the arbitrator). Systematic collection of this information directly from arbitrators reduces the risk that parties will have to roll the dice in arbitrator selection—now they can learn about arbitrators’ approaches directly from the arbitrators.
The questions in the Survey are carefully framed to make clear that arbitrators are not promising any particular ruling or stating an intransigent commitment to a particular view. The Survey confirms that any views are subject to the conditions and law applicable in a particular case. Finally, arbitrator responses are free on Arbitrator Intelligence’s website, but its use policies preclude use of Survey responses to challenge arbitrators.
Since the Survey’s launch in January 2022, Arbitrator Intelligence has collected perspectives from arbitrators with various levels of experience from 39 nationalities and based in 31 jurisdictions.
On 24 March 2022, Arbitrator Intelligence invited KAB readers to predict how arbitrators responded to various questions in the Survey. This post analyses how well KAB readers were able to foresee the Survey Responses collected from arbitrators as of 24 March 2022 (Surveyed Arbitrators). We also comment on some surprises we found among arbitrators’ responses.
What considerations are most important to co-arbitrators when selecting a chairperson?
Whatever considerations parties and counsel apply to the selection of party-appointed arbitrators, their selection of the chairperson can be even more complicated and consequential. Importantly, this decision is no longer exclusively in the hands of a single party, and often it is in the hands of the party-appointed arbitrators. In such circumstances, different considerations come into play.
Critics of international arbitration have suggested that co-arbitrators are most focused on appointing someone they know personally. Surveyed Arbitrators, however, most frequently identified seeking someone with a reputation for being efficient and being collaborative (or good at managing conflicts on the tribunal) as their key consideration. Most KAB Readers correctly anticipated that a reputation for being collaborative and/or good at managing conflicts within the tribunal was the key consideration for the selection of the chairperson. We found it surprising that—contrary to frequent critiques—arbitrators did not list personal familiarity with a prospective chair as one of the most important considerations.
Do arbitrators consider it inappropriate for tribunal secretaries to draft the factual background section of an award?
In recent years, there has been increasing scrutiny of the role of tribunal secretaries in arbitral proceedings, with a special focus on the extent to which they should be involved in the drafting of awards. Critics are particularly concerned that arbitrators may be over-delegating and giving a decision-making role to tribunal secretaries. There are a few prominent examples of awards being challenged due to allegedly improper use of tribunal secretaries.
The expectation of the KAB Readers was that less than 25% of Surveyed
Arbitrators would consider it inappropriate to allow tribunal secretaries to draft the factual background of the award. However, the reality is that 41% of the Surveyed Arbitrators considered such a practice inappropriate (31% of all civil law-trained and 55% of all common law trained arbitrators surveyed), 47% considered it appropriate in some cases and 13% considered it always appropriate.
uggestions, and there is no reason we can’t embrace them both.
|
|
Human beings seem unable to live without war, but they are also unable to live without love
-- Arundhati Roy
Image Courtesy of Brad Heckman
|
|
|
Newletter Subscriptions and Details
|
|
In an effort to recognize the specialization in the ADR community, we are creating 3 separate newsletters broadly covering these areas: Mediation - Arbitration - International ADR.
A newsletter focused in one of those areas will be sent out bi-monthly. In order for you to subscribe to as many types of newsletters that fit your particular practice/interests, please click on the Update Profile/Email Address link at the bottom of this email. From there you will be able to select which newsletters you wish to receive or if you would like to opt out all together.
Thank you for reading my newsletter, and as always, if you have any questions on any of the articles listed, do not hesitate to contact me.
Sincerely,
Thomas P. Valenti
350 W. Hubbard St., Suite 630
Chicago, IL 60654
T: 312-925-0081
F: 888-667-2485
|
|
|
|
|
|
|