guide to...
Arbitration
Arbitration explained
Everything you need to know
Challenges of the tribunal
What needs to be addressed
Cross-border transactions How to handle disputes
Plus...
Plus... Arbitration guides for Hong Kong, UK, UAE and Switzerland
Working for a Fair Outcome
Veteran US lawyer, Thomas R. Spencer gives us his views on the arbitration industry today
ACULEX TRANSNATIONAL INC. Specialists in Dispute Resolution...
Expert services of ACULEX include acting as: l Party-appointed arbitrator l Chair of arbitral tribunal l Expert on contract, choice of law, and trade issues l Neutral mediator / negotiation facilitator l Consultant to law firms engaging in ICC, UNCITRAL or other arbitrations l In-house trainers on negotiation and dispute resolution for law firms and companies Let ACULEX assist with your next international commercial dispute. It’s the best investment you can make for your client, and for your firm. ACULEX was founded in 2001 to assist both clients and professionals with international commercial arbitration and other forms of dispute resolution. If you need an arbitrator, a mediator, or simply discreet expert advice about procedures in a case you’re handling as counsel or arbitrator - we can assist. ACULEX also provides high-calibre, focused in-house training for both lawyers and non-legal personnel. Meet THE ACULEX PROFESSIONALS and see how we can help you.
www.aculextransnational.com
guide to...
Arbitration
Contents 6 Arbitration Explained
by Professor Luca G. Radicati di Brozolo, Founding Partner at Arblit – Radicati di Brozolo Sabatini in Milan
8 Arbitrating Disputes in Cross-Border Transactions
We speak to Stefan Stade, a French and German lawyer, is a member of ArteJURIS, a Strasbourg based law firm with a large cross-border practice
10 Challenges of the Arbitration Tribunal
Simon Cuerden, Head of Deloitte UK’s International Arbitration and Disputes practice, outlines the areas that must be addressed correctly by a tribunal
12 Working for a Fair Outcome
An overview of the arbitration industry by veteran US lawyer, Thomas R. Spencer
16 Country profiles
We look at the arbitration industry in Hong Kong, the UK, UAE and Switzerland
Straight-talking,
plain speaking, exceptional
Let’s talk.
legal advice.
The jargon-free corporate law firm INNOVATIVE THINKING APPLIED. John White, Managing Partner E: j.white@beauchamps.ie T: +353 1 4180600 www.beauchamps.ie
Introduction Global corporations, across the entire gamut of industry sectors, continue to realise the benefits of arbitration in resolving transnational disputes. Companies are today becoming more sophisticated in procuring international arbitration services, and concerns over costs and delays in proceedings persist and in-house counsel are increasingly focused on getting value from the arbitration process. Investing in in-house resources, corporations are demanding a variety of alternative fee arrangements to share both the workload and the risks of proceedings more with external law firms. The evidence of arbitration becoming more embedded in corporations should be seen as a positive sign for the future of arbitration, from a demanding segment of the market. Over the coming pages we’ve spoken to experts from around the world about the importance of arbitration and why their firm may be the one to turn to.
guide to...
Arbitration
Arbitration Explained Professor Luca G. Radicati di Brozolo, Founding Partner at Arblit – Radicati di Brozolo Sabatini, a boutique specialising in arbitration and litigation, gives us an overview of the industry
Arbitration, explains Professor Luca G. Radicati di Brozolo, Founding partner, Arblit - Radicati di Brozolo Sabatini, is a private mechanism for the settlement of disputes that allows parties to choose the persons who decide the dispute and is largely free from the constraints, idiosyncrasies and possible local bias of proceedings before national courts. “It is particularly suited for international disputes because it is based a fairly uniform procedural rules and can be tailored to the specifics of individual cases. “In brief, arbitration is a mechanism for the judicial settlement of disputes according to law which is based on party autonomy. It can only be activated if parties have previously agreed to it and also most of the rules governing the functioning of the process can be decided by the parties. The duration of the process depends largely on the complexity of the dispute, on the efficiency of the arbitrators and the institution as well as on the cooperation and absence of excessive litigiousness of the parties. It can take from as little as a
6
few months to many years. The average duration for complex high-value disputes varies from 18 months to four years, depending on the previously mentioned factors.”
Since arbitration is about judicial settlement of disputes, inevitably there will be a winning party and a losing one, says Professor Radicati di Brozolo. “A successful arbitration is therefore one which is fast, efficient and not excessively costly (having regard to the complexity of the case), respects due process and gives the parties, particularly the losing one, the impression that its arguments have been duly considered, even if they have not been upheld. Arbitration has become a very competitive industry in recent years, says Professor Radicati di Brozolo. “Arblit – Radicati di Brozolo Sabatini differentiates itself by being a small nimble firm with exceptional expertise in international arbitration on which it focuses exclusively (its only other area of practice is specialised international litigation, particularly where there are synergies with international arbitration). The firm provides representation of clients in complex commercial and investor-state arbitrations, and its partners also regularly sit as arbitrators.”
“
“
Arbitration has become a very competitive industry in recent years
guide to...
Arbitration
Arbitrating Disputes in Cross-Border Transactions Stefan Stade, a French and German lawyer, is a member of ArteJURIS, a Strasbourg based law-firm with a large cross-border practice involving foreign companies with their interests in France and Germany
According to Mr Stade, good arbitration means that the parties feel that they and their case have been understood and treated fairly. He stated that this helps acceptance of the award, even by the defeated party, and avoids difficulties if enforcement of the award becomes necessary. The specific skills required of professionals in these disputes include a high understanding of each party’s cultural and legal background, their native languages (as translations may be good but are rarely perfect), as well as good knowledge of the businesses involved. Discussing the frequency with which M&A disputes are settled by arbitration, Mr Stade noted that it is only partly a question of the specific case, but also one of the parties’ advisers. They may have backgrounds in a jurisdictional environment, as is the case for many French lawyers, or from a consensual environment, such as most German lawyers – this can have an impact on the chances of an amicable settlement avoiding arbitration. “Notwithstanding that, any good M&A agreement should contend a well drafted arbitration clause; most disputes merit a prior and serious attempt of amicable settlement,” observed Mr Stade. “ADR
8
is one solution, as well as a contractual provision for such an attempt before arbitration, a condition which should afterwards be strictly controlled by the arbitration court, which otherwise shall reject the submitted demand as inadmissible at that stage.” For business facing risks and disputes in cross-border commercial transactions, Mr Stade believes that the first factor to consider is a good contract which takes into account the com-
pany’s and its counterparts’ cultural and legal backgrounds, and anticipates future disputes. Contracts submitted to a continental law order do not need to be extremely voluminous; rather, they should be as clear as possible so that even a non-legal expert, e.g. a CEO or CFO, can clearly understand and use them as a guideline for their future behaviour. “Then, even with such a fine contract, external advice shall be demanded as soon as the first difficulties arise,” he observed. “In particular, in cross-border situations independent advice which can better oversee the possible options and issues better than the client is strongly recommended. “Finally, if action is needed, external and independent advice becomes crucial to choose the best option, which often means favouring negotiation as far as is reasonable, whilst at the same time preparing the best case if arbitrating becomes unavoidable,” he concluded. Concerning arbitration places, Mr. Stade thinks that the European Court of Arbitration based in Strasbourg is a nice alternative to the well established places like the ICC in Paris or the Chamber of Commerce in Zurich.
“
“
External and independent advice becomes crucial to choose the best option
guide to...
Arbitration
Challenges of the Arbitration Tribunal Simon Cuerden, Head of Deloitte UK’s International Arbitration and Disputes practice, outlines the areas that must be addressed correctly by a tribunal in reaching its decision
Party appointed experts addressing quantum (the amount of loss allegedly suffered) are very much the norm in arbitrations. Their opinion is typically sought on complex loss and valuation issues, with significant amounts often in dispute. A feature of arbitration rules (e.g., as issued by the ICC or by the LCIA) is that they remain ‘light’ on the provisions relating to party experts. In so doing, such rules provide the scope for flexibility and efficiency within the arbitration process. One of the challenges for the Tribunal however, if not the parties, is where the issues to be considered by the experts, or the information that will be available to them, are not identified and confirmed early on in the arbitration process. Unless these aspects are addressed, the Tribunal may be faced with expert reports that reflect differing instructions, with only limited overlap,
10
and with differing information sources available to the experts. Tribunals may direct experts to meet and prepare some form of joint memorandum identifying areas of agreement and disagreement,
albeit circumstances dictate that this happens shortly before the scheduled hearing and with the prospect that experts introduce new analysis by way of response. Early encouragement from the Tribunal for the parties to focus on the areas to be considered by the experts and their information needs can have real benefit to the arbitration process. From the perspective of the expert, early engagement by a party is their preference, enabling the expert to outline their thoughts on the methods of measuring quantum and the associated information requirements. Further, the legal team will be in a stronger position in terms of developing its strategy for the arbitration, its dialogue with the other party’s legal team and ultimately in assisting the Tribunal in its consideration of the procedural process and timetable.
“
“
From the perspective of the expert, early engagement by a party is their preference
guide to...
Arbitration
Working for a Fair Outcome Thomas R. Spencer has practiced law in the United States for over 40 years, litigating a wide variety of commercial business cases in various State and Federal trial courts, appellate courts, Supreme Courts and arbitration tribunals. Here, he offers his views on the arbitration industry today
Please provide a brief background of your firm, your specialist areas of expertise and comment upon how the firm distinguishes itself from the competition. Thomas R. Spencer has practiced law in the United States for over 40 years, litigating a wide variety of commercial business cases in various State and Federal trial courts, appellate courts, Supreme Courts and arbitration tribunals. As a result of this experience, Mr. Spencer has been able to assist clients with personal service and counsel them on a variety of issues. This has resulted in clients having the ability to consult on the most practical aspects of litigation and potential litigation issues. Moreover, the experience of over 40 years has enabled Mr. Spencer to act as an Arbitrator with a deep knowledge of litigation practices and issues. This has resulted in a contribution to the ultimate neutral view of fair and impartial adjudications consistent with the facts and the law. Spencer has been able to persuade litigants to focus on the important, decisive issues and abandon needless expense and time. He is a Fellow of the Chartered Institute of Arbitrators, London. Could you briefly explain to us exactly what is involved in arbitration and why more and more businesses are taking this route to settle disputes? What situations may arise that require an arbitrator? Arbitration is a bilateral process whereby the parties join together to appoint private neutrals to decide their disputes. It is both collaborative and adversarial. This process normally results from a
12
contractual agreement entered into prior to the dispute which either designates a process of arbitration or appoints an existing professional arbitration entity when disputes arise. There are numerous excellent arbitration entities in the world today. The American Arbitration Association, the International Court of Arbitration, the London Court of Arbitration are considered to be among the most wellknown and used. These Arbitration management entities promulgate Rules by which the Arbitration will be conducted and a nominating procedure to appoint the neutral arbitrators. Arbitrators are carefully vetted and must disclose any conflicts. Arbitrators are bound by strict ethical and legal guidelines so that no impropriety or appearance of impropriety occurs during the process. The benefits of arbitration are that the parties ap-
point neutrals who are normally very experienced and who have and take the time to devote to the resolution of a dispute. The process and timetable for resolution is a collaborative undertaking by the parties. The result of the process is an Award, which is enforceable in any court of competent jurisdiction. These are, in effect, private judges who produce a written judgment resolving the dispute. Businesses generally like arbitration when they want experienced professionals who will take the time to fully explore the facts and study the applicable law. Some deem it much better than the court process, which may take many years and involve judges who may not have the time or expertise to fully consider the case. Moreover, many parties would rather have arbitrators than a jury of peers reviewing business disputes. Arbitrations generally arise from contract provisions that designate arbitration as the dispute resolution mechanism. Most arbitrations arise from business contracts where one of the parties is alleging a breach of the written contract and alleging damages. Arbitrations also arise from labour disputes, employment disputes, disputes concerning securities, disputes between business entities, disputes between nations, disputes between nations and private parties and administrative governmental disputes. What, in brief, is the arbitration process? The arbitration process begins with one of the parties to the dispute serving on the other a
notice of the claim. It is normally also filed with the Arbitration governing entity. The opposing party then files an Answer to the Claim and any Counterclaim. The parties, with the assistance of the arbitration governing body, then proceed to nominate neutrals. This can happen in a few ways. One way is for each party to select one arbitrator and the two nominees then select a neutral chair. Another method is for the arbitration body to suggest a list of neutrals from which the parties can choose. Sometimes the parties pick just one neutral to handle the case. Once the arbitration panel or arbitral tribunal is selected the parties follow the rules of the governing body to formulate a schedule or plan for the arbitration. Among the procedures are the fashioning of Terms of Reference (or a procedural outline) so that issues of fact, discovery of evidence and evidentiary issues can be sorted out. The parties then set a Final Hearing, where evidence, including witness testimony, can be submitted. The arbitrators then deliberate and issue an explanatory written Award. The Award makes factual and legal conclusions in the case and a judgment of damages and costs in favour of one of the parties. This Award can then be sued upon in a court for enforcement. The court in the enforcement action does not rehear the case, but is bound by its law to simply enforce the Award of the arbitrators. There is normally no appeal to a higher court and the Award is the final resolution. How long does it normally take and what is required from all parties involved? Arbitrations last from nine months to about two years to conclusion. On average, arbitrations take 14 months to conclude. When it comes to arbitration, what can be classed as “success”? One of the best aspects of arbitration is that the parties work together to formulate the procedure and get an idea quickly as to the probable expense and outcome. This forces the parties to be realistic and generally results in a settlement before the final hearing. What, in your view is the best possible outcome for everybody involved?
The best result for everyone in the process is a settlement—sparing the cost and uncertainty of the outcome. What are the alternatives to arbitration and what are the disadvantages/advantages of these differing routes? There are a few other alternatives to arbitration. First, the parties can mutually agree to waive an arbitration provision of a contract and go to court. The advantage of court is a more elaborate discovery regime and more formalized procedural elements. Sometimes cases are dismissed as a matter of law ( which can happen in arbitration as well) or dismissed for some procedural defect. Moreover, the parties can appeal to higher courts, which can be an expensive advantage. Second, the parties can Mediate a dispute. This means that the parties confer with an experienced facilitator who can attempt to bring the parties to a settlement privately. Finally, the parties can submit a dispute (at least in the United States) to a private judge who will process a case as if it were in a formal court and render a decision which may or may not be appealed – depending on the parties’ agreement. Some parties even use private Mock Juries with private judges in order to get an idea of how a real jury would decide a case – and then use this information to formulate settlement discussions. Is arbitration more popular or successful in specific sectors or industries? Arbitration is more popular in labour disputes and securities disputes. In general, arbitration is less popular in commercial cases where court procedures would advantage one of the parties. Trial lawyers in the United States, who seek jury trials, generally hate the thought of arbitrating a dispute. Wherever expertise would be a great contribution of the adjudicator, arbitration is a better choice. Tell us about any specific trends or developments in your industry over the past year. United States lawyers have generally attempted to greatly expand discovery in the process,
including the use of oral depositions. This is generally frowned upon by European lawyers and governing entities and there has been a tug and pull between the civil law, common law systems about the elaborate use of discovery in cases. In the United States more parties are drafting appeal procedures into arbitration clauses of contracts. What challenges/opportunities have these presented and what must businesses do to tackle/take advantage of them? The dispute resolution provisions of a contract are usually of the least interest to parties negotiating a contract. Yet they are the most important. Of what use is a contract if there is vagueness over the governing law and the enforcement procedure? A contracting party who does not insist on a waiver of jury trial and a limitation of damages and a comprehensive arbitration procedure is inviting litigation blackmail. All of this should be carefully thought out like moves on a chess board. If parties feel more at home with domestic court litigation, that is a perfectly rational business decision—especially the ability to appeal legal decisions of a lower court. Some parties want to maintain a home field advantage. But many businesses want the expertise, care and time devotion afforded by arbitration. Is arbitration a particularly competitive industry and what does your business do to differentiate itself? All law is very competitive. It is no longer a growth industry, due to oversupply and a burgeoning tidal wave of new lawyers being produced worldwide. Many arbitrators are experienced lawyers competing for arbitration appointments. We can only offer great experienced and hard-fought reputation for fairness, judgment, ethics and diligence. There are many great arbitrators to choose from, but we have been given good reviews.
13
Inspiring Legal Innovation. The Future of Law Firms: Today
oLICITo WS RS LA ●
globa 2014 lm
n awards tio EA a r
Authorised & Regulated by the Solicitors Regulation Authority.
If you would like a no obligation discussion to find out how we can help you, please contact us today: Email: info@ealaw-solicitors.com Phone: +447 (0)20 8805 5307 www.ealaw-solicitors.com www.isolicitor.co.uk
& ility immig ob
Commercial law & Litigation. Entrepreneurial Visas. Investor Visas.
EA Law Solicitors is an internationally recognised UK law firm and the current holder of the 2014 Global Mobility and Immigration Award. With a team of solicitors, each with over twelve year’s experience, we are able to offer expert legal assistance on a multitude of cases, with specialism in commercial law and litigation, UK entrepreneurial, and investor visas. We have an outstanding track-record of working with large and small scale businesses from around the globe and are always highly recommended. In order to cater to our growing international market, at EA Law Solicitors we offer an exciting service, iSolicitor - the online pay as you go solicitor/contract lawyer, as featured in Legal Futures. iSolicitor offers you and your business flexibility without compromising on quality or expertise. By harnessing modern technologies, we are able to offer you and your business tailored legal assistance any time, any place and can be outsourced on an ad-hoc basis. With our transparent, fixed fee pricing structure, you can choose to instruct us to assist with your case from start to finish or just for occasional support - it’s up to you!
iSolicitor is a trading name of EA Law Solicitors and is authorised & regulated by the Solicitors Regulation Authority. SRA No 470153.
www.ealaw-solicitors.com www.isolicitor.co.uk
guide to...
Country Focus
Arbitration
Weighing up the Pros and Cons of Arbitration Seats: Hong Kong By Louise Barrington , Aculex Transnational Inc
Aculex is a small service company specialising in dispute resolution, both by mediation and arbitration. It handles cases in Hong Kong, in many Asian jurisdictions, in Europe and America. Aculex provides highly professional service with an eye for efficiency, tailoring the process to the needs of the parties. After 142 years as a British colony, since 1997 Hong Kong once more belongs to China. However the ‘one country, two systems’ regime means it retains its common law tradition and court system, as well as English as an official court language. A specialised judge, responsible for construction law and arbitration, understands the fundamental principles underlying arbitration, so Hong Kong has a well-deserved reputation as an ‘arbitration friendly’ jurisdiction. A Model Law jurisdiction, although with some extra provisions to respond to Hong Kong’s unique situation, the arbitration law is accessible and modern, having recently been updated to incorporate the 2006 amendments to the Model Law. Hong Kong is a major arbitration hub, not only within Asia, but also for parties who have disputes with China, but prefer to arbitrate in a neutral forum. The Hong Kong International Arbitration Centre, which recently celebrated its 25th anniversary, is an arbitration commission, but also a centre of excellence, supporting many Hong Kong
16
dispute resolution organisations, and hosting events for the dispute resolution community. HKIAC’s recently revised rules are among the most modern in the world, including provision for emergency arbitrators prior to the constitution of the tribunal. A sophisticated, comfortable and cosmopolitan jurisdiction, a pool of excellent arbitrators, broad language and support services, geographical proximity to mainland China, excellent transportation and infrastructure: all these factors contrib-
uted to the ICC’s choice of Hong Kong for its very first ‘outpost’, ICC Asia. Now parties may submit requests for ICC arbitration to a dedicated Asian team, and receive the same high-level service they expect from Paris. More recently, CIETAC last year established its first office outside mainland China. As more arbitrations take place between parties without connections to Europe or America, Hong Kong is seeing a steady and significant increase in arbitrations. Institutional arbitration appears to be the preference, but there are also many ad hoc cases taking place every year. Although the cost of legal services can be a drawback, parties may use anyone they wish to represent them in Hong Kong arbitrations, so many bring their own lawyers, retaining Hong Kong counsel on a consulting basis as necessary. Hong Kong is also the home of the Vis East Arbitration Moot, which brings over a thousand students and arbitrators to the territory each year. Many return to practice law and arbitration, adding to the cosmopolitan nature and broad spectrum of expertise available. Today, many international law firms are setting up shop in order to share in what they perceive as a growing market. For Hong Kong as the arbitration hub of Asia, the future is bright.
“
“
Hong Kong has a well-deserved reputation as an ‘ arbitration friendly’ jurisdiction
guide to...
Country Focus
Arbitration
Weighing up the Pros and Cons of Arbitration Seats: UK International law firm Clifford Chance combines the highest global standards with local expertise. Leading lawyers from different backgrounds and nationalities come together as one firm, offering an unrivalled depth of legal resource across the key markets of Africa, the Americas, Asia Pacific, Europe and the Middle East. Audley Sheppard, global co-head of Clifford Chance’s International Arbitration Group, gives us his thoughts on London’s popularity as an arbitration seat
English arbitrators and judges are renowned for their impartiality. In addition, nationals of most countries can enter England for business purposes. England is convenient because it is a global transport hub, and English is the most common language of international business. Between 2010 and 2012, in LCIA arbitrations alone, parties originated from over 20 jurisdictions, with a clear majority of those parties not from the UK. In a survey conducted by the School of International Arbitration in 2010, London was the most preferred arbitration seat (30%) followed by Geneva (9%) and Paris, Tokyo and Singapore (each 7%) and New York (6%). Along with the convenience of language and geography, there are other legal and practical reasons why London enjoys such popularity. The Arbitration Act 1996 governs domestic and international arbitrations seated in England, Wales or Northern Ireland. It restated and improved the law relating to arbitration and provides a legal framework that is very supportive of arbitration; for instance, court intervention is limited. The Act has many features similar to the 1985 UNCITRAL Model Law but it is more detailed in many respects.
18
The English courts have shown repeatedly that they have a pro-arbitration approach, for example by enforcing arbitration agreements and limiting challenges to awards. The judges of the High Court, Court of Appeal and Supreme Court are well informed about and support arbitration. London has several dedicated hearing facilities. It is also home to a number of the world’s leading
arbitration institutions, including the London Court of International Arbitration (LCIA) and the London Maritime Arbitration Association (LMAA), as well as arbitrations conducted under the rules of the Grain and Feed Trade Association (GAFTA), the Federation of Oils, Seeds and Fats Associations (FOSFA), and the London Metal Exchange (LME), to name a few. Costs could be considered to be a drawback: London is a relatively expensive city for the hearing, but these costs will be a small proportion of the total costs of the arbitration, and not necessarily any more expensive than others of the ‘Big Four’. London lawyers can be expensive, but increasingly they offer flexible fee arrangements. The Act allows tribunals to award the successful party its reasonable costs, to be paid by the unsuccessful party. Because of its perceived neutrality, its convenience and the prevalence world-wide of English law and English language, I predict that the popularity of London as a seat will continue to increase. I expect that flexible fee arrangements and third party funding will receive ever more attention.
“
“
The English courts have shown repeatedly that they have a pro-arbitration approach
Nasri H. Barakat Arbitrator, Umpire and mediator l II&RCS, Inc.
In 1994, Nasri H. Barakat established his practice as a full-time commercial, insurance and reinsurance arbitrator and umpire. As president of II&RCS, Inc, International Consultants, he continues to provide arbitration and litigation support for complex international disputes, expert testimony, run-off and liquidation services to the insurance and reinsurance industry.
Mr. Barakat has more than 40 years of insurance and reinsurance experience in the U.S., Europe and the Middle East. He has participated as arbitrator, umpire and mediator in a large number of arbitrations involving commercial, insurance and reinsurance disputes. Mr. Barakat is an ARIAS-US certified arbitrator and umpire. He is also listed on the “Roster of Neutrals” of the American Arbitration Association’s commercial domestic (AAA) and International (ICDR) panels, the USCIB, AIRROC and CPR panels. His extensive exposure to international commercial business includes major industry privatization of several Middle Eastern countries applying for admittance in the World Trade Organization (WTO).
His keen knowledge of the Islamic Sharia Law and abilities to fluently read, speak and write French, Arabic and English put him in a unique position to serve on certain international panels. Prior to founding II&RCS, Inc., Mr. Barakat served as president of National American Insurance Company, vice-president of Chandler Insurance Company Limited (an Offshore Reinsurance Company) and vice-president of Old American Insurance Services, Inc. of Dallas, Texas. He also held executive and other positions with Republic Insurance Company of Dallas, Texas and ITT Hartford.
Mr. Barakat is a non-practicing attorney.
SERVICES Arbitrations Mediations Litigation Support & Management Reinsurance Inspections Insurance Inspections Expert Testimony Due Diligence Collections Liquidation Management Run-off Management
www.nhbarakat.com
CONTACT
353 East 72nd St., Apt. 4D New York, NY 10021 Tel: (646) 707-0157 Fax: (646) 224-8404 Cell: (214) 912-9848 Email: iircsinc@ipa.net nasrib@yahoo.com or nasrib@nhbarakat.com
guide to...
Country Focus
Arbitration
Weighing up the Pros and Cons of Arbitration Seats: UAE Jacqui Record is a Director with Deloitte Forensic Middle East and has over 20 years’ experience of complex disputes and forensic investigations. Jacqui has testified both in the UAE and internationally
Deloitte Forensic ME is a full service Forensic practice, with services including Dispute Resolution, Forensic Investigations, Forensic Technology, Fraud Risk Management, Financial Services Regulatory Consulting and Business Intelligence. Deloitte was recently ranked #1 in Forensic and Dispute Advisory Services by Kennedy. The key arbitral bodies within the UAE are the Dubai International Arbitration Centre (DIAC), Dubai International Financial Centre – London Court of International Arbitration (DIFC-LCIA) and Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC). In addition, as elsewhere, ICC and Uncitral Rule Arbitrations may also be run in the UAE. The Rules for all the Arbitral Bodies broadly follow International standards and Uncitral Model Law. DIAC is currently the most popular choice for UAE-based arbitrations and is the arbitral body written into many local contracts pre the global financial crisis that are currently arbitrating. ADCCAC has very recently updated its rules for the first time in 20 years, which may improve its popularity particularly for Abu Dhabi-based disputes, although the new rules will, no doubt, need to be tested.
20
Local enforcement of awards for both local and international arbitrations is through the UAE courts. These courts require that proceedings are in Arabic and require the use of a local Arabic legal team. UAE law is founded upon civil law principles and Islamic Sharia’a law, and as such is unfamiliar to many more used to Common Law or Western legal systems. Whilst the UAE is a full signatory to the New York convention, the application of local law, in some cases has caused issues, including the requirement that experts are sworn in and how and where the arbitral award is signed.
The DIFC is a Freezone and operates under its own laws closely related to UK law. Similarly the DIFC-LCIA is based on the UK LCIA rules. Enforcement is initially through the DIFC courts, although ultimately cases can also be referred to the UAE Courts. As such the DIFC-LCIA may be preferable to those used to a Common Law or more Western legal system. However there are still issues regarding jurisdiction and to date only a more limited number of arbitrations have been held within the DIFC. Whilst cost structures vary slightly between the arbitral bodies, generally costs are on a par with international arbitration cost structures elsewhere in the world. The UAE, and Dubai in particular, attracts many international disputes, given its central location, easy travel connections, good infrastructure and safe environment. In addition Dubai has an excellent pool of internationally qualified arbitrators, lawyers and experts to assist clients through the arbitration process. Whilst the local legal system can cause some issues with enforcement, overall Dubai remains the preferred choice for Middle East arbitration.
“
“
The UAE, and Dubai in particular, attracts many international disputes
guide to...
Country Focus
Arbitration
Weighing up the Pros and Cons of Arbitration Seats: Switzerland Gilles Thieffry is the founding partner of GTLaw, an exclusive law firm based in Switzerland specialising in commodity trading and finance law, with a particular emphasis on commodity finance. It advises parties in commodity trading arbitration. Gilles Thieffry also acts as arbitrator
Switzerland’s reputation for impartial diplomacy is reflected in its position as one of the ‘big four’ arbitration seats. Geneva in particular is a worldwide centre for diplomacy, which makes it a popular arbitration seat due to its international character, its highly qualified professionals and the modern and flexible Swiss arbitration law. Gilles describes Switzerland’s impartiality and convenience as an arbitration seat as ‘first class’ – parties have a high degree of autonomy, the system is efficient and there is the option of an expedited procedure should parties agree to use that route. Gilles has over 25 years’ experience, primarily in the City of London where he was a partner in two leading international firms. Gilles can properly be regarded as one of Europe’s leading specialists in commodity finance, structured finance, derivatives and commodity trading. As a small, highly focused, practice without the infrastructure and overheads of a major law firm GTLaw is able to offer a value added service at highly cost-effective rates. The firm’s philosophy is based on personal service. Clients instructing
22
GTLaw will not find that their matter is dealt with by someone they have never met. Nor will they pay for teams of assistants and trainee lawyers. Indeed GTLaw is very happy to work alongside a client’s regular, mainstream, legal and/or accounting advisors. Who should instruct GTLaw? Any organisation or individual requiring specialist advice on a complex financing transaction from a recognised specialist who will provide a dedicated
personal service, combining extensive experience with a multi-cultural approach, at a reasonable cost. For example, if the following applies to you, then you should probably speak to GTLaw: • I need specialist but practical advice from a senior, experienced practitioner who provides strategic advice as well as legal advice • Value added is more important to me than ‘brand’ recognition • I want an advisor who will wish to develop a long-term professional relationship based on mutual trust • I don’t want a lawyer who will endlessly argue about trivial drafting points • I want a lawyer who will build good working relationships with other lawyers involved in the arbitration On the other hand, GTLaw may not be the firm for you if the following applies to you: • I need to field a team of lawyers in several jurisdictions working for the same firm • I am happy for the work to be delegated to junior lawyers • I need, for internal constitutional reasons, to be seen to employ a big internationally recognised law firm.
“
Switzerland’s reputation for impartial diplomacy is reflected in its position as one of the ‘big four’ arbitration seats
“
We believe sound tax advice is more important than ever. It requires not only professional expertise but above all insight into our clients’ wishes and goals. Our personalized commitment adds real value to our tax advice, which is reflected in the C&B More motto: ´Connect to add value´. We are specialized in advising the Shipping Industry with (re)financing and structuring challenges. We provide tax planning services to optimize financ-
Rotterdam Van Nelleweg 1 3044 BC Rotterdam +31 10 7503195
Groningen Peizerweg 87B 9727 AH Groningen +31 50 7115290
Postal address: P.O. Box 13023 3004 HA Rotterdam
Connie.roozen@cb-more.com +31 6 51226404 Hendrik.boonstra@cb-more.com +31 6 47090150
www.cb-more.com