The (Im)mutability of liquidated damages in international arbitration

This October 1988 sees the start of the Diploma in International Commercial Arbitration at the School of International Arbitration, Centre for Commercial Law Studies, Queen Mary College, University of London. The Diploma is the first course of its kind, anywhere in the world, dedicated to providing a post-graduate course in international commercial arbitration. It is hoped that the Diploma will not only provide an understanding of the practical problems of international commercial arbitration, but will provide a stepping stone to the professional becoming involved in international commercial arbitration. It is the aim of the School of International Arbitration, established in 1985, to develop educational programmes at the post-graduate level for those involved with international arbitration, whether as arbitrators, counsel, or expert witnesses, as well as to participate in areas of research which affect international arbitration. The Diploma is the first course of the school dedicated only to training lawyers and other professionals to participate in international commercial arbitration. Arbitration has now been taught as part of the London University intercollegiate Master of Laws programme for three years. There has been, in recent years, an enormous expansion in the use of arbitration, as a mechanism of dispute settlement in international commercial transactions. No-one really knows how many international arbitrations are held every year: the Court of Arbitration of the International Chamber of Commerce has in excess of 400 new cases every year; the specialist commodity institutions in London, including maritime arbitration, have many thousands of arbitrations in different centres. Other institutions, eg, the London Court of International Arbitration, the Stockholm Chamber of Commerce, the American Arbitration Association also have increasing case loads. Certain specialist tribunals, like the Iran/US Claims Tribunal in The Hague, contribute to the international arbitral case load, as do the many unchartered ad hoc arbitrations. The problem is …

Investment arbitration, with its unique demands for transparency due to the public interest, is an especially promising arena for AI technologies. This transparency push and the judicialization of processes make investment arbitration increasingly amenable to technological innovations. However, the full potential of artificial intelligence (AI) in streamlining international investment arbitration case management remains largely untapped. The key to unlocking this potential lies in digitalization of data and procedures, and inter-institutional collaboration to share data. The literature regarding the use of technology in international arbitration mainly focuses on AI and its potential use in international arbitration in the future. While much of this literature speculates about the future, a holistic understanding of the present state of technology in international investment arbitration is crucial. This article spotlights the advancements achievable in case management in international investment arbitration using today’s available technologies. The current state of AI technology is primed for handling straightforward procedural tasks. Yet, these modest tasks occupy significant bandwidth in the agendas of arbitral institutions and tribunals. Once comprehensive digitalization is achieved, and AI technologies are integrated into international investment arbitration case management adeptly, that will be a significant step towards more expeditious and cost-effective arbitration procedures.

The author of the book outlines US common law doctrines related to international commercial arbitration. He presents the developments in the US common law jurisprudence in international commercial for two reasons: First to inform the reader regarding doctrinal transformations, and second, with hope of achieving the perfect workings of international commercial arbitration as an aspirational goal. To this end, examining the American influence on international commercial arbitration is important. The author suggests that US common law may help to overcome challenges arising out of cultural differences in international commercial arbitration. While doing so, there are important contrasting and competing principles to consider, such as party-autonomy and arbitrator discretion, which stand out as saliently competing paradigms. The author indicates that giving equal weight to these competing principles in international commercial arbitration might be a useful strategy to harmonize seemingly polar opposite propositions. The book focuses, in part, on the US common law of discovery and how it might be adopted in international arbitration to develop efficiency in such proceedings. The International Bar Association (IBA) Rules on Evidence Gathering, the Prague Rules, and the role of 28 U.S.C. §1782 in international arbitration are closely analyzed, among others, to develop alternative approaches concerning evidence gathering in international commercial arbitration. Overall, the book contributes important discussions and suggestions to the literature. Also, the text presents analyses and suggested solutions with the help of leading principles developed by US common law, which facilitates understanding these principles from the author’s perspective. While the book provides those valuable inquiries and discussions, the book review took a critical approach towards them. The authors of the review critically analyze those suggestions. The book review compares to other books that pursue a similar approach to international commercial arbitration. How justified suggestions in the book are, as well as their strong and weak points, are displayed in the review. Are all those suggestions in the book correct? It must not be forgotten that the book looks into issues from an American perspective and those suggestions are coming from US common law. However, this approach can be problematic in international arbitration. If there is a dominant legal system in international commercial arbitration, how “international” can international arbitration be? The review criticizes those contradictions and presents a comprehensive analysis of the book. The authors of this review believe that an idea can be developed if there is criticism against it. Thus, authors here offer a critical eye towards the book with the purpose of development of the ideas within the book. Acknowledging the hard work of the author of the book, the authors of the review offer some thoughts to develop the ideas in the book and to make its next edition even better. Therefore, those who are interested in learning about Martinez Fraga’s book with a critical approach can find some interesting insights from the review.

Introduction This chapter concerns the identification of the law that applies in an international arbitration. Various laws may apply to different aspects of the dispute. After providing an overview of the types of choice of law issues that arise in international arbitration (Section 2), the remainder of this chapter focuses on the law applicable to the merits or substance of the parties' dispute. It first examines how an arbitral tribunal should determine the applicable law (Section 3). It then considers other issues such as mandatory laws, which apply regardless of the otherwise applicable substantive law (Section 4), how an arbitral tribunal should determine the content of the applicable law (Section 5), the compulsory application of the terms of the contract and trade usages (Section 6), the possibility of applying national rules of law or the lex mercatoria (Section 7), and finally the possibility for international arbitrators to decide cases based on principles of fairness and justice without reference to law (Section 8). The treatment of applicable law issues in investment arbitrations under the ICSID Convention is completely different from international commercial arbitration. It is addressed in Chapter 10, Section 4.5. Types of conflict of law issues in international arbitration Determining the applicable law in an international litigation matter (i.e. before a state court) can be very complex, yet seductively interesting from an academic perspective.

International Arbitration and Transparency

This entry examines whether the existing transparency gap between the investment treaty arbitration and international commercial arbitration regimes should be maintained, considering three factors: (i) the nature of the public interest, (ii) the role of confidentiality, and (iii) the role of party autonomy. The author concludes that the transparency gap should - as a general matter - be maintained. Although the public interest in particular international commercial arbitration cases can be significant - most notably in cases involving state entities or statutory claims - on a systemic level the public interest in international commercial arbitration contrasts sharply with investment treaty arbitration, where cases consistently involve state entities and challenges to government measures. Equally important, two cornerstones of international commercial arbitration also support the existing transparency gap: (i) the availability of discreet and dispassionate dispute resolution, made possible by confidential proceedings, and (ii) the primacy of party autonomy. But with respect to the public availability of arbitral awards, the author concludes that the transparency gap should be narrowed significantly, given larger developments regarding international commercial dispute resolution and public access to decision-making.

The Shari'a Law Factor in International Commercial Arbitration

IT HAS been said about the determination of privileges in international commercial arbitration that ‘[t]he only thing that is clear is that nothing is clear in this area’,1 that the law of evidentiary privileges in international arbitration is ‘substantially unsettled’2 and that ‘there is very little authority addressing how international arbitrators should proceed when presented with a claim of privilege’.3 In spite of these uncertainties, or because 4 of them, international arbitral tribunals have been facing an increasing number of claims of privilege in recent years. Arbitral practice and legal doctrine mention three reasons why legal issues related to privilege determination in international arbitration are regarded as diverse, complex and disputed: 1. the nature and concept of evidentiary privileges is different in civil law and common law; 2. there are essential differences in the qualification of privileges as substantive or procedural matters in common and in civil law; 3. there are no established conflict-of-laws rules for the determination of the law applicable to privileges in international arbitration. However, there is not only agreement on differences but also on two basic policy considerations. They form the bottom line of any discussion on the treatment of evidentiary privileges in international arbitration. First, international arbitrators should accede to an appropriate privilege objection raised in good faith.5 Secondly, the need for legal certainty and predictability and the need to safeguard the parties’ legitimate expectations as to the application of a certain privilege standard is particularly strong in this field of law because ‘[p]arties rely on privileges’6: > Parties are likely to be surprised, to say the least, to learn that their agreement to arbitrate could have the effect of imposing on them a general obligation to disclose all relevant documents including internal communications and legal advice which would not be subject to …

The Arbitration Institute of the Stockholm Chamber of Commerce has become an important forum for international commercial arbitration, with parties from more than 30 countries, especially Western European countries and increasingly Russia, other Eastern European Countries, and China. The author offers practitioners several background chapters on commercial arbitration in Sweden and a detailed analysis of each section of the Swedish Arbitration Act (SAA). This is a ready-reference handbook analyzing Swedish arbitration- the SAA, the Rules, and cases-and also includes references and commentary with respect to international commercial arbitration in general. The author’s intention is to help practitioners “in search of rapid guidance regarding the interpretation of a particular provision or who wish to solve a practical problem.” “This Third Edition of Commercial Arbitration in Sweden provides us all with a valuable and up-to-date understanding of the Swedish system in operation, and a comprehensive commentary on the SCC Rules, both new and existing. World business has the means, through this work, to see why Sweden and Stockholm are good choices for their international arbitrations.”-- ? Phillip Capper, Head of International Arbitration, Lovells; Nash Professor of Engineering Law, King’s College, University of London; former Chairman of the Faculty of Law, University of Oxford

The article discusses the procedure of taking evidence in international commercial arbitration from the perspective of balancing different legal cultures and values. It analyses the results of the existing evidentiary rules and attempts to harmonise the procedure, and their sufficiency in terms of securing the interests, expectations and rights of the parties involved in the international arbitration. The actual outcome must be estimated taking into consideration the balancing of the relationships and the differences between legal cultures, fairness and flexibility. In the first instance the author analyses each of the legal systems, civil law and common law, in order to compare the differences and similarities in terms of the procedure, especially in relation to evidentiary issues. A further step involves the analysis of the need for harmonised rules of procedure and in particular evidentiary rules in international arbitration and the factors in the determination and application of the rules, with a focus on the role of the tribunal’s discretion, the parties’ autonomy, as well as the impact of cultural background. Furthermore, the International Bar Association (IBA) Rules on Taking of Evidence in International Arbitration are analysed in terms of their completeness in such areas as admissibility and assessment of evidence, which permits the comprehension of the strengths and weaknesses of the IBA Rules and the need for the introduction of further rules. Finally, conclusions follow as to the proper way of balancing the competing values and approaches and the need for the application of new solutions in terms of taking of evidence in order to achieve the desired outcome in arbitral proceedings.

It is common for parties in international arbitration to engage and present experts to testify on technical matters, industry custom and legal issues.1 It is also common and generally accepted that a party's counsel will work closely with a party-appointed expert, discussing substantive points of an expert's opinion, and providing comments on drafts of an expert's report, at least as to format, language and style.2 Cautious counsel in international arbitration wonder whether their written communications with an expert, including drafts and mark-ups of the expert's report, may be subject to production to the other side and to the arbitrators. To answer this question, we reviewed the disclosure practice in numerous unreported cases and we submitted questions to a broad range of international arbitration practitioners and arbitrators from varying legal backgrounds and regions.3 We also reviewed written authority on the issue. In this Article, we seek to distil these sources into a summary of the prevailing practice and to offer guidance to practitioners. We also examine the trend that has led some common law jurisdictions to permit more extensive discovery of counsel-expert communications in the context of domestic litigation, and consider whether such an approach is desirable in international arbitration. We conclude that it is not. ### (A) The Presumption of Non-Discoverability of Counsel-Expert Communications Formal international guidelines on the discoverability of counsel-expert communications are rare.4 National rules applicable to national court proceedings, where they exist,5 vary widely and are, in any case, inapposite to international arbitration.6 Our experience and our survey nonetheless show shared expectations about the discoverability of counsel-expert communications in international arbitration. An overall presumption of non-discoverability, with certain common exceptions, can be discerned.7 Production of documents reflecting such communications is rarely sought – almost all of the arbitrators questioned on the subject replied that they had never faced the …

Rechtsfortbildung durch Internationale Schiedsgerichtsbarkeit, edited by Karl-Heinz Bockstiegel. Schriftenreihe des deutschen Instituts fur Schiedsgerichtswesen, German Institute of Arbitration, Volume 8 , Cologne, Heymanns Verlag (181 pp.). Almost yearly since 1979, the German Institute of Arbitration has organized conferences on international commercial arbitration and published their reports and discussions in the above-mentioned series. The latest volume in this series contains the reports and proceedings of a conference held in Cologne on November 11, 1988, at which the subject of law making (as opposed to merely applying legal rules) through international commercial arbitration was analysed. Although the subject of law making has extensively been examined in its relation to domestic courts, this process rarely was described thoroughly with regard to international commercial arbitration. Therefore, it is fair to state that the book under review clearly fills a gap. The book discusses the making of arbitral case law from four points of view: (1) the making of rules of civil procedure through international arbitration (report by Professor Peter Schlosser); (2) the making of substantive law through international arbitration (report by Professor Otto Sandrock); (3) the function of the International Chamber of Commerce (‘ICC’) in the law making process (report by Ottoarndt Glossner); and (4) the function of the Iran-US Claims Tribunal in the making of case law for international arbitration (report by Norbert Wuhler). In the first report, Schlosser primarily examines the possible use of procedural rules developed in the course of arbitral proceedings for the reform of national laws on civil procedure. As such, this report is largely based upon a general report presented by Schlosser (together with Habscheid) at the Eighth World Conference on Procedural Law held in Utrecht in 1987 on the subject of how experience derived from arbitration can be used for the improvement of civil procedure.1 Schlosser thus looks at law making from a rather limited perspective. As a result of this perspective, important issues with regard to procedural law making are not …

Obtaining Documents From the Opponent in International Commercial Arbitration

This chapter focuses on the procedural context of defenses to international criminal litigation from the perspective of the accused as a subject of international law. Furthermore, since interdisciplinary processes master contemporary international criminal law (ICL), it also looks into current developments on new technical issues, including the application of genetic defenses by those entrusted with international criminal litigation and law-finding. The principle of fairness in international criminal litigation constitutes an erga omnes obligation in ICL. The first effective manifestation of the principle of procedural fairness in regard to defenses consists of the inclusion of admissibility of defenses and the subsequent crystalization of the burden of proof criteria. Traditionally the role of expert witnesses with clinical expertise in both common law and civil law criminal proceedings in regard to defenses is limited to the domain of the insanity plea.Keywords: admissibility of defenses; burden of proof; expert witnesses; genetic defenses; international criminal law (ICL); principle of fairness

Empirical data on security for costs in international arbitration is absent. Anecdotal evidence suggests an increase in applications for security for costs in international arbitration, but with a very low rate of success. Authors explain that this is because (despite all major institutional rules embracing security for costs) (i) exceptional facts are needed – it is not sufficient to say only that a claimant is short of funds; and (ii) international arbitration has adopted a presumption against the award of security for costs. Authors explain that transnational soft law and jurisprudence from national courts favour a range of factors test, but Authors advocate that one factor is more important – whether there is a material change in the business risk from the time of making the arbitration agreement or contract. This single factor is easy to apply; consistent with party autonomy & freedom of contract; and consistent with contract matrixes seen in international construction arbitration. Codifying the ‘rules to be applied’ akin to the IBA Rules is worthy, but Authors consider that plurality of views and a tangible ‘common law’ ‘civil law’ split weighs against codification into soft law. Security for Costs is an exceptional remedy and exceptional facts ought to be needed.