Our recent International Arbitration Summit in London provoked lively discussion and, ahead of a full report on the debate next month, here is a taster of some of the key points
SELF-AWARENESS REQUIRED
‘The once preoccupying debate about what issues you can arbitrate has become of ever-diminishing relevance in the modern world. Almost all commercial disputes today are now arbitral, with fewer and fewer exceptions.
We need to ask ourselves again and again why users are complaining that modern arbitration is, all too often, failing to fulfil the promise of international arbitration as a flexible and streamlined form of dispute resolution, in which the particular process is tailored to the particular issues in play, in a particular case. We need to ask ourselves why mainstream public opinion is often expressing a very open level of criticism about the legitimacy of investment arbitration, which is inevitably spilling over into the commercial arbitration mainstream.’
Constantine Partasides QC, founder, Three Crowns
BATTLING THE TIDE
‘It is far from clear to me that there is a distinction in transparency between investment treaty and commercial arbitration. Where you have a commercial party in a contract with a state body, true, the legal basis of the dispute is different, but many of the considerations that point to transparency may well be the same, such as the possibility of a sizable award against a public body responsible to its taxpaying public for stewardship of public resources. I suspect that it is not going to be possible to put the Transatlantic Trade and Investment Partnership genie back in the bottle. There is going to be huge public pressure against the private, secretive resolution of disputes.’
Gordon Nardell QC, 39 Essex Chambers
BEHIND THE VEIL
‘We have a rather renowned policy on how to deal with arbitration clauses. We have them in all of our contracts and, traditionally, they contain confidentiality clauses, meaning that we will keep the arbitration confidential in all aspects – the existence of the case, the parties and all its contents, including the outcome. The thing is, we cannot do so, because we are a publicly-listed company. To a certain extent, we have to make major arbitrations public. If you look at our annual reports, you will find half a dozen major arbitrations named so, practically, it is impossible to keep the existence of the case confidential in certain circumstances.’
Michael Schoepe, senior counsel, Siemens
READY FOR THEIR CLOSE-UP
‘Arbitrators have been falling over themselves to be involved in ICSID [International Centre for Settlement of Investment Disputes] claims, because they are public. Lawyers love publicity, despite the fact that we all pretend that we do not. I do not think the transparency problem will be with the arbitrators [over having their names published in decisions]. Other issues may arise and they may find themselves under different scrutiny, because they are not as capable of taking such a broad intellectual approach to problems as they ought to be, but you will not find much pushback from too many arbitrators.’
Peter Rees QC, 39 Essex Chambers
CHATTERING CLASSES
‘There is no doubt that suddenly over the last two or three years a political head of steam has built up about investment arbitrations; the abolition will probably form part of Mr Corbyn’s platform. Three years ago, less perhaps, if you said at a dinner party in Hampstead that you did investment arbitrations, your dinner companions’ eyes would glaze over, but now they will look at you as if you admitted to being a child molester.’
Lord Hoffmann, Brick Court Chambers
CONTROLLING COSTS
‘I take the criticism of cost and delay with a pinch of salt. The main reason that ICSID proceedings take so long is because the parties involved in the proceedings either plead every point, take every point, produce hundreds of pages of repetitive pleadings, or make challenges that are designed to slow things down. The extra cost caused by non-disputing parties making interventions is a drop in the ocean and, again, can be controlled by tribunals. We have had examples of tribunals limiting the page numbers that the submissions can run to, or forcing the intervening party to confirm that it will make cost awards against it, so that can be managed.’
Mark Levy, partner, Allen & Overy
UNFAIR BIAS
‘The pool of regularly appointed arbitrators for investor-state arbitrations is small; it is also western, white and male. Those issues of diversity can and should be challenged; at the very least they represent a legitimacy problem, though probably it means more than that, with hard-wired cultural assumptions from a narrow group probably affecting the way cases go forward. One of the problems in arbitrator selection is there is something of a lowest-common-denominator approach taken by both sides, with a tendency being to appoint investor-sympathetic arbitrators on the one side and state-sympathetic arbitrators on the other. Whether or not there is actual bias is not the point; whether or not it stunts arbitration is not the point. It is that the perception of bias is extremely unhealthy and that is a problem.’
George Burn, partner, Vinson & Elkins
CRISIS INTERVENTION
‘Whether arbitration in London is good or not is not for me to say, but what I do say is that there is absolutely no justification whatsoever in the suggestion, which has become an international myth, that London arbitration is not good because the English courts intervene too much. They do not intervene too much at all.’
Sir Bernard Eder, Essex Court Chambers