Arbitration Community Research Articles

J William Rowley QC, Doak Bishop and Gordon Kaiser (eds), The Guide to Energy Arbitrations

The first edition of this reference work was published in 2015. This second edition of The Guide to Energy Arbitrations is a welcome update to the literature on energy disputes. Once again, it primarily focuses on arbitration in the international oil and gas industry but adds some interesting new chapters. It has expanded with chapters on price revisions in long-term gas and LNG purchase agreements, Energy Charter Treaty disputes, renewable energy disputes, and offshore vessel construction disputes. There is a very good reason why there is a demand for such a book in the arbitration community. The energy sector is the biggest and most sophisticated user of international arbitration for the resolution of its commercial and investor state disputes. As the editors of this well-researched book proclaim: ‘It is the poster boy of arbitral liberalization.’ This Guide clearly illustrates that the oil and gas business has driven major growth in international arbitration over the last 50 years. Oil and gas arbitrations still make up the largest portfolio of international disputes in the caseloads of major arbitration institutions around the globe. The oil and gas sector has enormously complex, long-term, and capital-intensive projects in politically unstable regions of the world, which invariably result in enormously complex and difficult disputes. It is a rare international oil and gas agreement that does not use arbitration as its dispute resolution mechanism and very few of its disputes end up in national courts. As a result, the international energy sector is a natural user of international arbitration and in response, international arbitration devotes a lot of time on the energy sector. This book confirms that fact.

China’s 2017 Reform of Its Arbitration-Related Court Review Mechanism with a Focus on Improving Chinese Courts’ Prior-Reporting System

The Chinese Supreme People’s Court has devoted relentless efforts into reforming China’s arbitration regime, before a formal amendment of the PRC Arbitration Law is put on the National People’s Congress’s legislative agenda. In order to address several outstanding issues including the ‘dual-track review system’ existing in Chinese courts’ review process of domestic and foreign/foreign-related arbitrations, the Supreme People’s Court (SPC) issued several judicial documents including two judicial interpretations in 2017, focusing on regulating and unifying Chinese courts’ review of parties’ applications relating to the validity of arbitration agreements, enforcement and/or set-aside of arbitral awards. This reform further aligns Chinese arbitration with international practices, and sends a strong signal to the international arbitration community about China’s commitment to evolve into an arbitration-friendly environment.

Recent Solutions to Old Problems: A Look at the Expedited Procedure Under the Newly Revised ICC Rules of Arbitration

The article addresses the new expedited procedure under the 2017 ICC Rules. Over the last twenty years, the international arbitration community has become increasingly critical of the duration and cost of arbitral proceedings administered by institutions. The expedited procedure constitutes a tool aimed at accelerating and simplifying key aspects of proceedings, with a view to reaching a final decision on the merits in a cost-e ective and reasonably fast manner. Following the introduction of similar procedures in other institutional rules, the ICC expedited procedure builds on the solutions developed by other important institutions and adds several improvements. While changes to the rules alone might not be enough to solve the issues created by the judicialization of international arbitration, the presence of such tools in the newest version of the ICC Rules is a welcome addition.

The World Is Not Enough

IfIf James Bond practiced law, it would be international arbitration. It’s obvious. Arbitration centers are all based in same glamour capitols of the world where 007 movies are set, and the facts of many international arbitrations would make great plots for a James Bond film. With this starting premise, this article uses the 007 metaphor and the titles of James Bond films to examine the SPECTRE that is hanging over international arbitration. In Bond films, the audience knows from the start of opening credits that Bond will overcome the most extreme odds to vanquish even the most nefarious villains, that he is on the side of good, and that he is battling for nothing less than the survival of the free world. The arbitration community sees itself in similarly heroic terms. But outside the community, arbitration is no longer the hero of a story about law and justice triumphing over chaos in the world. Instead, according to some, international arbitration has more recently been cast as a dark villain, a judicial overlord that aims at subverting democracy and the common good in favour of moustache-twirling corporate conglomerates and their villainous financiers. This article argues that arbitration practitioners — as they tend to the needs of their clients, their organizations, their institutions, and their own professional goals—should look beyond their most immediate, short-term self-interest. No one wants their case to become the poster child for some endemic problem or controversy in international arbitration. When one actor in a particular setting does not have the wherewithal to see or act beyond immediate strategic considerations, others should be inspired by longer-term self-interest to step in. This article examines how a modicum of foresight might have altered outcomes in some of arbitration's most disruptive cases and sensational cases — HEP v. Slovenia, Yukos, Einser, and RSM v. St. Lucia. The article concludes with a QUANTUM OF SOLACE— those professionals active in international arbitration have it within their power and have demonstrated a collective impulse to address problems through a determined self-reassessment and internal recalibration. In conclusion, it calls on international arbitration practitioners to make that collective impulse an express commitment, at TOMORROW NEVER DIES.

Achmea: The End of Investment Arbitration as We Know It?

The authors focus on the impact of the Achmea judgment on the current system of investment treaty arbitration. Particularly, the authors look at the impact on arbitration clauses in the intra-EU bits and the ECT. The authors also consider the possible impact of the decision on investment arbitration clauses in investment contracts with the EU Member States, the future intra-EU investment court system, the EU Member States’ bits with third countries, the CETA investment court system and the multilateral investment court. Is the Achmea judgment the end of investment arbitration as we know it? The authors conclude that Achmea marks the end of one chapter in the history of investment treaty arbitration, specifically that of investment treaty arbitration based on intra-EU bits. The authors argue that Achmea also marks the beginning of a new chapter in investment treaty arbitration. According to them, Achmea is an additional factor in the current legitimacy crisis of investment treaty arbitration, which forces both States and the arbitration community to look for new innovative solutions to replace or at least reform the current system.

Achmea: The End of Investment Arbitration as We Know It?

The authors focus on the impact of the Achmea judgment on the current system of investment treaty arbitration. Particularly, the authors look at the impact on arbitration clauses in the intra-EU BITs and the ECT. The authors also consider the possible impact of the decision on investment arbitration clauses in investment contracts with the EU Member States, the future intra-EU investment court system, the EU Member States’ bits with third countries, the CETA investment court system and the multilateral investment court. Is the Achmea judgment the end of investment arbitration as we know it? The authors conclude that Achmea marks the end of one chapter in the history of investment treaty arbitration, specifically that of investment treaty arbitration based on intra-EU BITs. The authors argue that Achmea also marks the beginning of a new chapter in investment treaty arbitration. According to them, Achmea is an additional factor in the current legitimacy crisis of investment treaty arbitration, which forces both States and the arbitration community to look for new innovative solutions to replace or at least reform the current system.

Oops!... I Did it Againn: New Restrictions on Foreign Counsel in UAE Arbitrations

In September 2017, the UAE Minister of Justice passed the new Executive Regulations to the UAE Legal Profession Law no. 23 of 1991. The 2017 Regulations restrict the ability of foreign counsel to appear on behalf of arbitrating parties in UAE-seated proceedings. Article 2 of the 2017 Regulations provides that arbitral tribunals shall not accept the representation of arbitrating parties by persons who are not registered on the Roll of Practising Lawyers in the UAE. Article 17 provides that only UAE nationals can be registered on the Roll of Practising Lawyers. Hence, only UAE lawyers can appear on behalf of the parties in UAE-seated arbitrations. The 2017 Regulations come at a critical time when the UAE arbitration community has not yet recovered from the shock of Article 257 of the Federal Penal Code. While there are potential solutions to the restrictions imposed by the 2017 Regulations on foreign counsel, it is fairly early to predict the potential consequences that may follow. Other than Article 2 of the 2017 Regulations being amended, the promulgation of the long-awaited draft UAE law on arbitration could effectively repeal the effects of Article 2.

Judicial Approaches to the IBA Guidelines on Conflicts of Interest in International Arbitration

This paper seeks to close the gap in the research surrounding the IBA Guidelines by critically considering how national courts actually perceive and utilise the IBA Guidelines during the decision making process when determining conflicts applications. Through a doctrinal analysis of case law from various jurisdictions, this paper reveals the existence of two distinct judicial approaches. The first approach places heavy reliance on the IBA Guidelines and, as a result, they form an integral part of the adjudicative process. The second approach utilises the IBA Guidelines merely as a guide, a point of reference and a means of simply reinforcing judicial reasoning. It will be argued that the first judicial approach is highly unsatisfactory both from a legal and policy perspective. It will be argued that the second approach is to be desired because it remains consistent with the aims of the IBA Guidelines and it has enabled the courts to identify inherent weaknesses in the IBA Guidelines. Finally, recommendations for reforming aspects of the IBA Guidelines will be made in order that they may continue to be a source of guidance and assistance to the arbitration community and national courts.

The Sociological Dimension of International Arbitration: The Investment Arbitration Culture

Sociological analysis of international arbitration begins from the premise that individuals’ behaviour and normative choices are significantly affected by socio-cultural factors and processes. Thus, behaviour of actors participating in international arbitration is not isolated from its social context; and is rather deeply embedded in various sociological factors and processes (such as norms, socialization, or social control). This chapter is primarily focused on the investment arbitration community; analysing the interactions between the social features of this community and two significant issues in investment arbitration: (i) the application of human rights law by investment arbitrators, (ii) the constraining nature of norms regarding side arbitrator impartiality. While the first issue focuses on the particular features of the investment arbitration community and its interactions with another social group (the human rights community), the second issue regarding arbitrators' impartiality is explored by employing several theoretical perspectives relating to the structure-agency debate in sociological literature. Section II briefly sketches out the features of the investment arbitration community. Sections III and IV illustrate the scholarly and practical value of the sociological perspective by analysing two prominent issues in contemporary international investment law. Section III presents a sociological analysis of the socio-cultural interactions between the investment arbitration and human rights communities, and their impacts on the limited application of international human rights law by investment tribunals. Section IV addresses one of the fundamental questions in sociological literature in the (limited) sphere of the investment arbitration community: to what extent and how do cultural patterns influence arbitrators? To answer this question, this Section succinctly employs three sociological theoretical lenses (the structural-functional, symbolic-interactionist and Swidler's approaches) to examine some recent empirical results regarding investment arbitrators' impartiality. Section V briefly recaps the main conclusions drawn from the preceding sections and offers some directions regarding future research work in this field.

Adjudicator, Advocate, or Something in Between? Coming to Terms with the Role of the Party-Appointed Arbitrator

The disturbing revelations arising out of the Croatia-Slovenia arbitration have underscored the importance of having a clear understanding of the role of the party-appointed arbitrator. The problem can be traced at least in part to the tension between the arbitrator’s personal incentives and professional obligations. On the one hand, the party-appointed arbitrator owes his appointment to the favour of his appointer. How the appointer assesses his performance will likely have a bearing on the appointee’s prospects of future appointments. But any such assessment will be from the subjective perspective of the appointer and will almost inevitably be tied to the outcome of the matter. This can create an economic incentive for the appointee to be sympathetic to the appointer’s case. On the other hand, most members of the arbitration community still hold to the view that there subsists a professional obligation of impartiality which inheres in the office of arbitrator and which is not to be diminished at all in the case of a party-appointed arbitrator. This requires not only that he act fairly, but also that he be seen to be doing so. This article examines the functions, duties and obligations of the party-appointed arbitrator from preappointment consultations to the final discharge of the mandate, and suggests some practical rules of engagement and best practices that emerge from the analysis. It also proposes a systematic approach to arbitrator regulation in the establishment of a central body to oversee the discipline of international arbitrators.

The Revolving Door in International Investment Arbitration

Abstract It is often claimed that international investment arbitration is marked by a revolving door: individuals act sequentially and even simultaneously as arbitrator, legal counsel, expert witness, or tribunal secretary. If this claim is correct, it has implications for our understanding of which individuals possess power and influence within this community; and ethical debates over conflicts of interests and transparency concerning ‘double hatting’—when individuals simultaneously perform different roles across cases. In this article, we offer the first comprehensive empirical analysis of the individuals that make up the entire investment arbitration community. Drawing on our database of 1039 investment arbitration cases (including ICSID annulments) and the relationships between the 3910 known individuals that form this community, we offer the first use of social network analysis to describe the full investment arbitration community and address key sociological and normative questions in the literature. Our results partly contradict recent empirical scholarship as we identify a different configuration of central ‘power brokers’. Moreover, the normative concerns with double hatting are partly substantiated. A select but significant group of individuals score highly and continually on our double hatting index.

Getma v Republic of Guinea—implications for African arbitration

Against a backdrop of the increasing activity and prominence of African arbitration institutions, this case note takes a detailed look at a recent high-profile case concerning one of the major African arbitration bodies, the OHADA Common Court of Justice and Arbitration (CCJA), and looks at what lessons may be drawn for African arbitration. In Getma International v Republic of Guinea, a US court refused to confirm and enforce an arbitration award in favour of French company Getma International, which was subsequently annulled by the CCJA. The CCJA annulled the arbitral award after it was found that the arbitrators had breached their mandate and the rules of the court by negotiating directly with the parties to secure an increase in their fee, in breach of the CCJA’s fee scale. A particular feature of this long running saga was the unusual step the arbitrators took in publicly criticizing the CCJA in an open letter to the international arbitration community, spurring extensive comment and discussion. This piece goes further than just commenting on the US court decision and considers some of the wider questions and implications for African arbitration more generally.

Challenge Decisions at the Danish Institute of Arbitration

Arbitral institutions make regular decisions on the required impartiality, independence and qualifications of arbitrators. The decisions and their underlying analyses are rarely available to the public. Therefore, the arbitration community is missing a valuable source of clarification and analysis, and a poor clarification and analysis may ultimately lead to untenable appointments and unfounded challenges. The article and the following decision summaries explain how the Danish Institute of Arbitration approaches the challenge of arbitrators. The article is inspired by the arbitrator challenge digest published by the London Court of International Arbitration a few years ago, but the approach by the Danish Institute of Arbitration is unique in a number of ways. The Institute’s approach reflects a delicate balance between efficiency, flexibility, party autonomy and due process. Based on the fifty-seven challenge decisions outlined below, the article explains how the Institute aims at finding the right balance in a number of different circumstances. The article thereby provides a tool for in-house attorneys, external counsel, arbitrators, institutional staff and other arbitration practitioners to make the right arguments and proper analyses when dealing with issues concerning the challenge of arbitrators.

An In-Depth Analysis on the Conflicting Decisions in Dallah v. Pakistan: Same Law, Same Principles, Different Decisions

Arbitration is an alternative, to litigation, form of private dispute resolution, a judicial determination by an independent third party to whom the disputing parties agree to hand over their power to decide the dispute to the arbitrator(s). The 'core' merit of arbitration is the international enforceability of its awards by virtue of the Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958 ('The New York Convention'). In line with the NY Convention, an arbitral award is 'portable' and can be enforced to the contracting States simply and without formality. The international applicability of commercial arbitration has inevitably raised questions of conflict of laws or even questions of conflicting decisions based on the same law. The most prominent example of conflicting decisions stemming from the application of the same principles is the case of Dallah v Pakistan which has commanded immense attention in the international arbitration community. In a continued astonishing series of events, the English Supreme Court and the French Cour d'Appel reached contrary decisions on the enforcement of an international arbitral award, despite the application of the same law to the same facts. The focus of this article is to examine in-depth the legal proceedings accrued in Dallah, identify the questions raised and the reasoning of the Courts, including the Tribunal's reasoning, and expose the reasons why the Supreme Court and the Cour d'Appel, whilst considering the same facts and applying the same principles, arrived at such antithetical decisions.

Transparency in Investor State Arbitration

International trade and investment agreements have become the most recent battleground for the apparently conflicting views the arbitration community and civil society have on confidentiality and transparency. This article aims to clarify the debate and, exploring the concept of confidentiality in international commercial arbitration, explain the rationale for the increased transparency in Investor State Dispute Settlement (ISDS). It gives specific consideration to the rules of major institutions and their national legal environments while also considering the practical differences between investor state and commercial arbitration. In this light, the increasing trend for transparency in ISDS, codified by the 2013 UNCITRAL Transparency Rules, are argued not only to be acceptable but intelligent, considered changes which adroitly balance current public policy demands within the existing norms of commercial arbitration.

The unilateral appointment of co-arbitrators

Contractual practices and the applicable law on the composition of three-member tribunals normally provide for each party to select a co-arbitrator unilaterally. This procedure may make the co-arbitrators appear partial and may lead to improper dissenting opinions and premature resignations, which may ultimately threaten the confidence in arbitration and arbitral awards, but the procedure does not remain common for nothing. The arbitration community therefore needs to reconsider the appointment procedure on a solid and deliberate basis, and such a basis is what the article provides. A number of experienced arbitration practitioners have advocated against the procedure for some of the reasons above, whereas other experienced arbitration practitioners have defended the procedure because of its practical advantages and underlying rationales. Each of the previous contributions to the debate sheds light on some important aspects of the procedure but leaves certain aspects and arguments unconsidered. The article approaches the appointment procedure from a neutral position. It identifies and considers the relevant rules, practices, and arguments in order to discuss the procedure’s implications and the possible legal and contractual adjustments that may change these implications. The article thus provides a theoretical contribution of practical relevance to the arbitration community.

The Power of Arbitral Tribunals to Raise Public Policy Rules Ex Officio: The Case of EU Competition Law

Whether arbitral tribunals should be allowed to adjudicate disputes on the basis of legal grounds different from those submitted by the parties is a question that is subject to considerable debate in the international arbitration community. On the one hand, arbitration is a creature of contract and arbitral tribunals should be careful not to exceed the mandate that has been extended to them by the parties. On the other hand, there may be circumstances where the ignorance of certain legal regimes may be fatal to the validity and enforceability of the award, and where the tribunal may thus well be advised to raise the applicability of such regimes even if the parties failed to do so. In order to illustrate the type of circumstances in which arbitral tribunals may be well advised to raise legal grounds on an ex officio basis in order to ensure the validity and enforceability of the award, I refer to contractual disputes where the agreement under scrutiny, which one of the parties is seeking to enforce, may breach EU competition law, which according to the Eco-Swiss judgment of the CJEU belongs to public policy. This paper argues that whether arbitral tribunals should raise EU competition rules on their own motion largely depends on the circumstances of each case and arbitral tribunals should be guided by pragmatism rather than theoretical considerations.

ESMINIAI REGLAMENTO BRIUSELIS I PAKEITIMAI IR ARBITRAŽO ATEITIS JO TAIKYMO KONTEKSTE

Šiame straipsnyje autoriai kritiškai įvertina pagrindinius naujosios Reglamento Briuselis I redakcijos pakeitimus ir analizuoja šių pakeitimų padarinius ir reikšmę.

Constructing the Independence of International Investment Arbitrators: Past, Present and Future

Disqualification challenges against international investment arbitrators are increasing. This poses a great challenge for the legitimacy of the international investment regime. The aim of the paper is to trace the source of this development and to propose ways for the future structuring of an international investment regime that is both transparent and effective. Legal literature understands arbitrator independence as a standard imposed by legal rules. This does not capture the reality of international investment arbitration, especially in the framework of the ICSID Convention, which seems to set a lower standard of independence for ICSID arbitrators.This paper presents the latest trends in the challenge process based on an empirical study of the most recent ICSID tribunal decisions. The thesis of the paper is that arbitral independence in international investment arbitration is the result of a “process of communication” among different actors and prompted by the arbitration community itself. Arbitral independence is only partially a result of legal rules. It is also a consequence of the creation of a tightly connected community of international arbitrators that has been established over the years of arbitral practice and which has transposed their ethos and professional practices onto investment arbitration. This community has constructed a very high standard of independence for international investment arbitration, which is now set in motion by other actors involved in the field. The paper proposes finally the introduction of a new system of control in international investment arbitration that can address the peculiarities of the constructed process of the creation of investor-state arbitration: certification.

Diversity in Arbitration in Europe: Insights from a Large Scale Empirical Study

While issues of gender and ethnic diversity have become prominent in all areas of law, there is reason to believe that the insular nature of the arbitration community, combined with the importance of personal connections to receiving career opportunities in arbitration will make diversity a particularly complex matter in arbitration as a field of professional practice. That is, while there is no evidence that arbitration practitioners are as a group any more likely to discriminate on the basis of ethnicity or gender than other legal professionals, fields in which career progression is tightly linked to receiving the support of “gatekeepers” can present particular obstacles for non-Male and minority practitioners, who may be less likely to make strong social connections with those gatekeepers, and so be less likely to receive opportunities for career progression.In 2014 a team at Brunel University, as part of a study being conducted for the European Parliament, undertook a large-scale survey of arbitration practitioners across the European Union and Switzerland. While this Survey was not primarily focused on questions of diversity, all respondents were asked to self-identify both their gender and their ethnicity, with selection of multiple ethnicities being permitted. Consequently, although the Survey aimed at offering a comprehensive picture of arbitration in all EU Member States and Switzerland, rather than focusing on the specific question of diversity, it generated information on both the levels of non-Male and ethnic minority involvement in arbitration, and, through cross-analysis of data, on career progression within arbitration of non-Male and ethnic minority arbitration practitioners. This article will provide a brief overview of these results, which do indeed indicate ongoing diversity-related problems within arbitration.