The Resolver May 2017 (Spring)

ARBITRATION & IP

When is it the right fit?

INSIGHT ON HOW TO CHOOSE AN EXPERT WITNESS

TALKING TRUMP WITH DC'S ADR COMMUNITY

SPRING 2017 CIARB.ORG

DON'T MISS THIS!

Member Events Highlights PAGE 17

Eye opener

What neuroscience has to tell us about how the mind affects mediation

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2 SPRING 2017 WWW.CIARB.ORG Registered charity number: 803725 © Chartered Institute of Arbitrators 2017

International Arbitration

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W: www.ciarb.org/das

DISPUTE APPOINTMENT SERVICES

Leader

CIArb has a central role to play CONTACTS

Chartered Institute of Arbitrators 12 Bloomsbury Square, London WC1A 2LP, UK T: +44 (0)20 7421 7444 E: info@ciarb.org W: ciarb.org Membership T: +44 (0)20 7421 7447 E: memberservices@ciarb.org PR and Communications Nikki Nang Nilar T: +44 (0)20 7421 7481 E: nnangnilar@ciarb.org Marketing T: +44 (0)20 7421 7481 E: marketing@ciarb.org Education and Training T: +44 (0)20 7421 7439 E: education@ciarb.org Events T: +44 (0)20 7421 7427 E: events@ciarb.org Venue and Facilities Giles Andrews T: +44 (0)20 7421 7423 E: GAndrews@ciarb.org Governance and Legal Services Tom Cadman E: legal@ciarb.org Dispute Appointment Service Keisha Williams E: DAS@ciarb.org © THE RESOLVER is published on behalf of the Chartered Institute of Arbitrators (CIArb) by Think, 8th Floor, Capital House, 25 Chapel Street, London NW1 5DH +44 (0)20 3771 7200 thinkpublishing.co.uk

Editor Caitlin Mackesy Davies Chief Sub-editor Sian Campbell Designers Mark Davies, Matthew Ball Advertising Sales Tom Fountain tom.fountain@thinkpublishing.co.uk Group Account Director John Innes john.innes@thinkpublishing.co.uk This magazine aims to include a broad range of opinion and professional issues and articles do not necessarily reflect the views of CIArb nor should such opinions be relied upon as statements of fact. All rights reserved. This publication may not be reproduced, transmitted or stored in any print or electronic format, including but not limited to any online service, any database or any part of the internet, or in any other format in whole or in part in any media whatsoever, without the prior written permission of the publisher.

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DISCLAIMER: The contents of this publication are not intended to be a substitute for either general or specific legal advice on individual matters, and readers are strongly encouraged to seek competent legal advice.

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Collaboration that reaches across the generations will help us meet future challenges

T

he first months of my presidency have been intense, inspiring and, most of all, have given me the assurance that CIArb has a central role to play in bridging the gap between legal traditions, cultures and people, through education.

Our first flagship conference of 2017 on ‘The Synergy and Divergence between Common Law and Civil Law in International Arbitration’, held in Dubai in March (see page 5), met our expectations both in terms of the number of attendees and the quality of the interventions.

Thanks to the participation of speakers and delegates from diverse professional and cultural backgrounds the intellectual force of the gathering was formidable. One conclusion from the panel discussions was that the development of knowledge of comparative law is key to creating a synergy between common law and civil law in international arbitration, hence the impact CIArb can make as a leading institution providing education and training in ADR. Our efforts also focused on improving communication between CIArb’s branches and creating opportunities for CIArb members. Thus, we encourage the collaboration of CIArb branches in the organisation of this year’s conferences, as well as the active participation of CIArb members.

Finally, greater involvement of the young generation in the

Dubai Q&A

arbitration community is a primary objective for me this year. As such, a Young Members Group (YMG) event was organised one day before the Dubai conference, at which younger members brought insightful views on how to go beyond the civil-common law dichotomy in international arbitration. With their education – which includes much more international exposure than their elders had – they represent a hope for improvement in communication between actors in international arbitration.

Similar YMG events are scheduled in Johannesburg and Paris.

The achievements made to date are an incentive to go further in our commitment to build strong foundations for the promotion of best practice in international arbitration and other ADR methods. I am convinced that, with a collaborative effort of the CIArb community, we will rise to this challenge.

Professor Dr Nayla Comair-Obeid C.Arb President of CIArb

INSIDE THIS ISSUE

4

T HE OPENER Flagship conference in Dubai, training Pathways update, and more

12

I N DEPTH Clive Thorne explains why litigation is increasingly finding it has a rival in IP disputes

7

PINION James Clanchy O considers what a French scandal means for international arbitration

16

AW An arbitration L involving solar panel providers in summary

17

ALENDAR CIArb C training opportunities and featured events

18

ORLD VIEW In DC, it’s W a time of weighing up White House change, reports Mark McCrone

8

INTERVIEW Dr Camaron

11

Thomas on how the mind might affect mediation practice

I NSIGHT How to choose an expert witness

CIARB.ORG SPRING 2017 3

SPRING 2017

The opener

LONDON BRANCH

All eyes on IP In February, a round table event was convened by CIArb’s London Branch on the subject of intellectual property (IP) and ADR. Speakers included Sir Robin Jacob (Professor of IP Law, UCL), Raja Sengupta (Equal IP) and Clive Thorne FCIArb (Baker Botts).

4 SPRING 2017 CIARB.ORG

WHEN WILL THE NEW PATHWAYS BE AVAILABLE? The new Pathways will be rolled out to branches in phases: Phase 1 will begin in Q2 2017 in the UK and Europe; Phase 2 in Q3 2017 in the Asia Pacific region; Phase 3 in Q1 2018 in Africa; and Phase 4 in Q3 2018 in the Middle East, America and India.

Rolling out the Pathways in phases will enable us to iron out glitches and refine the overall programme.

WHAT IF I’VE ALREADY STARTED MY TRAINING? Candidates currently undertaking training can continue on their current Pathway or transfer to an appropriate module in the new Pathway, in line with the roll-out timetable.

For details see bit.ly/UpdateonTraining

Key points included: l With emphasis on the benefits of enforcement of arbitral awards under the New York Convention, Sir Robin Jacob highlighted the need for clear and structured clauses in agreements and the importance of balancing the potential benefits of arbitration against any disadvantages in individual cases. l Sir Robin also highlighted a number of risks, including the potential for arbitration awards

Among the findings:

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49 2006-2015

HOW HAVE INTRODUCTORY COURSES CHANGED? The Introduction courses are unchanged. They will still be offered as face-to-face courses and there is also an online Introduction to ADR option.

However, the assessment process has changed and is now by online multiplechoice test with results available immediately. On successful completion of the assessment, candidates can apply for ACIArb status and select their preferred Pathway to Membership and Fellowship (Arbitration, Adjudication or Mediation). We anticipate all branches will offer the online multiple-choice assessment by July.

WHAT HAPPENS ONCE I’VE SELECTED MY PATHWAY? Each route to Membership and Fellowship will require you to complete a series of three modules. The content of each module has been adjusted. The content of each Pathway as a whole has been revised, developed and improved. Timetables and schedules are in development.

(10 year average)

W

e continue to make good progress towards the introduction of the new Pathways programme for qualification, Membership and Fellowship of CIArb. A consultation about the proposals is under way, and we are receiving many supportive responses and some helpful suggestions for improvement.

As we finalise plans, we wanted to address some frequently asked questions:

The United Nations Conference on Trade and Development has released its regular semi-annual update of the Investment Dispute Settlement Navigator.

2015

New Pathways take shape

WORLD BRIEFING ISDS UPDATE

2016

TRAINING UPDATE

Known ISDS cases pursuant to international investment agreements (IIAs)

767

The total number of publicly known arbitrations against host countries Source: UNCTAD, 1 January 2017

Find out more at investmentpolicyhub. unctad.org/ISDS

in IP disputes to be seen as anti-competitive. l Raja Sengupta provided an insight into royalty licence audits, identifying the main reasons for disputes, and gave practical examples of potential outcomes and the use of ADR in this area.

Clive Thorne addresses the use of ADR for IP Sir Robin disputes on page 12.

Jacob

The opener INTERNATIONAL FLAGSHIP EVENTS

Confident kick-off for conferences in Dubai

CIArb’s President greets delegates in Dubai

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n the first of our flagship international conferences for 2017, more than 50 speakers and some 150 delegates convened at the One&Only Royal Mirage in Dubai in March. The event was the start of three major gatherings, through which we aim to create a dialogue between the common and civil legal traditions, and begin to tackle the practical difficulties created by the divergences between them.

Keep an eye on www.ciarb.org/events for details of our upcoming conferences in Johannesburg and Paris.

Dubai conference sponsored by

Bright start: The Dubai event was the first of three

MEMBERSHIP SURVEY: 2017 ACTION PLAN In September 2016, we conducted a membership survey to which nearly 1,000 members worldwide responded, giving feedback on everything from member benefits to training courses.

We are addressing areas you felt we could improve and will

continue to do so as we progress through 2017. We will keep you up to date through The Resolver, eSolver and our ciarb.org website so please do look out for news through all of those channels.

Our key areas of approach are set out at bit.ly/SurveyAction

INDUSTRY PARTNERSHIP

Appointing role announced CIArb has agreed to independently administer a revised ACCA Mediation Scheme, which will handle disputes arising between ACCA members (including firms regulated by ACCA) and their clients or other parties. Under the revised rules, CIArb’s Dispute Appointment Service will act as the appointing body and will appoint a mediator from its panel of civil and commercial mediators.

The scheme will now operate under a simplified, fixed-fee structure, which will vary according to the amount in dispute.

The mediator’s fee will also be fixed according to the amount in dispute, and will range from £125 to £475 (+ VAT), on the basis of an allocated time frame for the mediation.

Find out more at bit.ly/ ACCA-scheme

GET INVOLVED

Editorial opportunity

A

fter a total of eight years in the position, Dr Michael O’Reilly C.Arb (pictured) is moving on from his role as Editor of Arbitration: the International Journal of Arbitration, Mediation and Dispute Management, which has for a century reflected the best in arbitration practice.

Dr O’Reilly is one of only three editors to have led the publication over the past 30 years. Moving forward, Dr O’Reilly will assist with the transition to the Journal’s leadership by an editorial board made up of leading practitioners, scholars and thought leaders in the ADR field.

This robust new editorial approach is in line with CIArb’s emerging role as the world’s leading inclusive professional body for dispute resolution.

Dr O’Reilly says: “The time has come to move into the next phase of

development for the Journal, which will seal the Chartered Institute’s reputation and standing.”

CIArb will be recruiting for Dr O’Reilly’s successor to capitalise on his excellent work on behalf of the Institute and wider ADR community. We are seeking an outstanding individual to function as Editor and Chair of the editorial board to steer this flagship academic publication through its next stage of development.

How to apply To be considered, please send your CV and a covering letter outlining how you meet the requirements of the role to policy@ciarb.org. The deadline for applications is 19 May. CIARB.ORG SPRING 2017 5

The opener INDUSTRY RESEARCH

60-SECOND INTERVIEW

YMG Chair Amanda Lee FCIArb

T

he CIArb Young Members Group welcomed its first female chair, and The Resolver asked her a few get-to-know-you questions:

My current role is: Consultant, Seymours Law, London. I am dual-qualified as a solicitor-advocate and a New York attorney.

I became interested in ADR when: I joined a firm specialising in dispute resolution and became extensively involved in ADR of various types: arbitration, mediation, adjudication and expert determination.

In my current role, what most interests me is: The opportunity to find creative solutions to challenging legal problems.

Professionally, I am most proud of: As a professional ambassador for Aspiring Solicitors and a mentor for the University of Law and the University of Westminster I have the great pleasure of working with law students from diverse backgrounds and assisting them in entering the legal profession. I am enormously proud to

have played a small role in the success of several members of the next generation of diverse legal practitioners.

I feel the greatest issue facing the ADR sector is: The lack of diversity on arbitral tribunals remains an enormous threat to the legitimacy of arbitration in particular. A great deal of progress has been made, but there is still work to do.

The best piece of advice I have been given is: Try. Get involved. You may not always succeed, but if you give up at the first hurdle or do not try at all then you will definitely fail.

The best thing about being a member of CIArb is: Having the opportunity to learn from and participate in an active community of practitioners worldwide.

The YMG also welcomed Vice-Chair Ronan O’Reilly MCIArb, Associate at White & Case, London. O’Reilly’s practice involves both international commercial arbitration and commercial litigation in a variety of sectors, including energy, telecommunications and financial services.

See www.ciarb.org/news/ ymg-news for further details

Inquiry to bridge disputes gap The All Party Parliamentary Groups (APPG) on Fair Business Banking (FBB) and Alternative Dispute Resolution (ADR) have announced a joint threestage inquiry into the use of ADR as a long-term solution for businesses involved in financial disputes.

The inquiry launch – ‘Bridging the Gap: a level playing field for financial disputes’ – follows the Backbench Business Debate in the House of Commons in December 2016. The debate highlighted the need to “create a level playing field for financial disputes between businesses and banks”.

CIArb, which provides the secretariat to the APPG on ADR, will support this research and our members will share their insight into ADR alongside businesses and financial experts throughout the inquiry.

The audio recording of the sixth and final work programme session of the APPG on ADR’s first year of activity is now available at bit.ly/APPG_ADR

CIARB AUSTRALIA

Aussie YMG lifts off A CIArb Australia Young Members Group has launched, spearheaded by Chairman Kristian Maley FCIArb, and has already attracted professionals from across Australia and overseas.

At the launch event, hosted and sponsored by global law firm Jones Day, guests were entertained and informed by special guest speaker and retired High Court Judge of Australia The Hon Michael Kirby AC CMG, who delivered the keynote address titled ‘International Arbitration, Young Players and Critical Intelligence’.

The group’s first initiative was a Pre-Moot open to all Australian teams competing in the Willem C Vis International Commercial Arbitration Moot in Vienna, or the Vis East Moot in Hong Kong, in 2017. The Pre-Moot offered a unique

6 SPRING 2017 CIARB.ORG

Left to right: The Hon Michael Kirby AC CMG, Kristian Maley (Jones Day), Albert Monichino QC C.Arb (President, CIArb Australia), Tim L’Estrange (Jones Day, Australia) extension of the Vis Moot experience for Australian students.

The grand final took place on 1 March, with teams competing before a distinguished panel that included The Hon Ms Susan Crennan AC QC, Mr Neil Kaplan C.Arb CBE QC SBS and Dr Michael Pryles AO PBM.

Opinion

Scandal may shake but not stir

James Clanchy FCIArb believes that the conviction of Christine Lagarde should not undermine international confidence in arbitration

I

have recently acquired on eBay a charming 1816 edition of Les Cinq Codes, all of French law in one volume. The Code Napoléon comes after the Constitutional Charter of 1814, which confirms that the king alone holds executive power, a reminder of how quickly the dial can be wound back after a revolution. The 1806 law of arbitration is 26 articles (three pages) long.

Arbitration fell in and out of favour with the courts, and with the French state, during the 19th century, but in the 20th century France became one of the world’s most arbitration-friendly jurisdictions.

When I came to study French arbitration law during the reign of President Mitterrand in the early 1990s, as part of my training for the Paris bar, Paris was the home of the International Chamber of Commerce and French arbitration lawyers were leaders of what the eminent sociologist Pierre Bourdieu called “this new international elite, a noblesse de robe”.

At that time, the colourful tycoon Bernard Tapie briefly owned Adidas and his football team, Olympique de Marseille, was riding high. A young Nicolas Sarkozy was budget minister. Some 20 years later these two personalities would be players in a scandal that has shaken the arbitration community in France and raised questions around the use of arbitration by states in disputes with their own citizens.

The 1993 sale of Adidas by Tapie’s bank, the state-owned Crédit Lyonnais, gave rise to protracted proceedings in the French courts.

After Sarkozy became president in 2007, the parties agreed to replace the court proceedings with an arbitration. Less than a year after it was constituted, the arbitral tribunal found in Tapie’s favour in an award dated July 2008, under which the bank was to pay him €403 million in damages, including €45 million for “moral damage”.

A subsequent criminal investigation disclosed personal links and ex parte communications between Tapie, his lawyer and one of the arbitrators (a retired judge), who had drafted the terms of reference and the award. The Tapie affair returned to the French courts and the award was annulled for fraud.

Christine Lagarde, a lawyer and former chair of Baker McKenzie, who was economy minister at the time of the arbitration, was charged with negligence in public office for allowing it and for failing to challenge the award. Her conviction in December 2016 (without penalty), by a court comprising judges and politicians, is the last episode in this sorry tale.

ABOUT THE AUTHOR James Clanchy FCIArb is a solicitor at Lexis PSL Arbitration and an independent arbitrator. He was admitted to the Paris bar in 1994 and withdrew from the roll on his appointment as Registrar of the LCIA in 2008.

There is no doubt that the public image of arbitration in France has suffered because of this scandal. Nevertheless, French arbitration law has shown itself to be robust: the procedures for challenging an award were successfully invoked and a government minister was not immune from the consequences of the findings of fraud. The message from the recent judgments is that the abuse of arbitration for obtaining a fraudulent settlement will not be tolerated.

As V V Veeder QC FCIArb wisely reminded us in his 2015 CIArb Alexander Lecture, “arbitration cannot do everything”.

Arbitration is a very old and well-respected mechanism for the resolution of private disputes; its forays into the public realm are not always crowned with success.

There is no doubt that the public image of arbitration in France has suffered because of this scandal. Nevertheless, French arbitration law has shown itself to be robust CIARB.ORG SPRING 2017 7

Interview

NEUROSCIENCE

After a decade of study, Dr Camaron Thomas shares what she has learned about the way the mind intersects with mediation

BRAIN POWER

8 SPRING 2017 CIARB.ORG

I

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never intended to write a book,” explains Dr Camaron Thomas, who has (nonetheless) now completed a decade-long investigation into the workings of the human brain, culminating in the publication of The Wisdom of the Brain: Neuroscience for Helping Professionals. “It simply became a way to explain what I found to be incredibly difficult to understand.”

Primarily involved in high-conflict family mediation cases, one of the things Thomas had found hard to work out was why some types of mediation seemed to work better than others: “Each of them – and the social science supporting them – seemed relevant to some circumstances, but not all. I was looking for a deeper understanding of why we behave as we do.”

Feeling that neuroscience could hold some answers, one of Thomas’s first steps was to get a solid overview of the topic, such as: how the prefrontal cortex works; how neurons communicate; the role of the limbic system; and how stress affects the brain. But while grasping the facts was fairly straightforward, she says, “It took a while for the wisdom of the brain to surface.” This required Thomas to take a step back and widen her focus away from the academic; once she did she was able to see what the science had to teach about human nature, human behaviour and the nature of the mind.

And while she’s adamant that what she found doesn’t provide a prescription, a formula or a toolbox for mediators, she is happy to offer the following thinking around her findings to inform the work of other

professionals – and perhaps prompt them to dig a bit deeper for themselves: On “reality” “While we share many of the same cognitive functions, the raw material that shapes those functions differs significantly person to person.

Mediators will appreciate the fact that we only take in a sliver of what’s going on around us and tend to focus on what’s important to us. In that way, the brain creates our reality. The brain also creates our experience of that reality. Perception is a product of the senses; it is constructed. The brain can only interpret what it takes in within the confines of past experience. It must first deconstruct an experience before putting it back together again – and when it does, it adds in emotions, memories, drives, wants and needs. In other words, the rules, biases and expectations we’ve collected over a lifetime. What we see, hear, feel, taste and smell is filtered through hidden layers of the brain; it’s a projection of who and how we are.”

On empathy “Empathy is especially interesting. The science breaks empathy down into cognitive empathy – in which we draw on our own experiences to interpret how another person feels – and emotional empathy, which is thought to be more simulated (I feel your pain or, rather, how I would feel your pain if it were my pain). It can get very confusing. But empathy, too, depends on one’s experience, and research has shown that the typical range of mean empathetic accuracy is from 15% to 35%. Honing one’s empathetic accuracy is essential; even if we’re wrong, we’re feeling something and others respond to our effort.”

On survival “I have found, by five minutes into a mediation session, most parties are on the defensive; people have to tell their story before they get to the hard work. Survival is the brain’s job, first and foremost. For mediators, the prominence of survival for the organism explains why people are motivated by needs and desires; why we hold fast to our ideals, imagine the future and reconstruct the past, assemble meaning systems and fight for them …”

On the Self “The Self embodies the entirety of our known and unknown history. It’s built on what we know and becomes what we hold on to. I’ve suggested in my book that as part of the brain’s job to manage the organism’s environment it, along with the mind, seeks three goals: first, to make sense of the world; second, to maintain a coherent sense of Self; and third, to sustain some semblance of control at all times. Conflict thus becomes the consequence of

Conflict becomes the consequence of different ways of organising reality CIARB.ORG SPRING 2017 9

Interview

ABOUT THE AUTHOR Dr Camaron Thomas is the author of The Wisdom of the Brain: Neuroscience for Helping Professionals and has been a professional mediator for more than 16 years with a particular interest in high-conflict family mediation.

different ways of organising reality; of the brain seeking certainty and the Self’s need for permanence and fixed points. In this way the Self exacerbates adversarial situations.

“And yet, this is also the source of new understandings, which is why we do mediation in the first place. Too often we believe that there is an emotional and a rational brain that fight for dominance; that somehow the prefrontal cortex is the ultimate controller and will exercise veto power over unwanted behaviour. But that’s not how the brain works. By using the prefrontal cortex as a generative tool, increasing self/other awareness, elucidating assumptions and known certainties, mediators can create an environment conducive to moving beyond the mind and the rigid mental constructs that often govern much of our lives.”

On cultural diversity “From the standpoint of neuroscience, cultural differences are the tip of the iceberg. We each have a different genetic make-up, thresholds and set points. We have different foetal experiences, levels of neural excitability, neural connectivity and capacities for plasticity. We have different life experiences, early learning and feelings of fear and safety; different emotions and a unique classification of what’s good or bad. We have different ongoing internal dialogues and a unique inner voice – sometimes called the Left Hemisphere Interpreter – that narrates our life story … not to mention different social skills, knowledge and ability, etc.

“I believe having a deep appreciation of cultural differences builds respect, and that respect is the foundation of any mediation. The brain internalises culture and sculpts the mind to fit into a particular one. For me, what’s key is asking elicitive questions that generate the information necessary for parties to individuate one another, slowly and over the course of the session – to make sense of the other person in a way only they may understand.”

On the unconscious “One of the most important things I learned is the dominant role unconscious influences play in the brain. We can take in another person in a matter of milliseconds. We can make a snap judgement about their competence, aggressiveness, even their likability, automatically pick out similarities among people and prefer people who are similar to us. We possess a vast array of implicit memories and apply a litany of unknown if/ then rules to every situation. In sum, it’s estimated that 98% of what happens in the brain happens outside conscious awareness. That does not mean that 98% of our actions are unconscious, but it’s pretty clear that a great deal of what we think, do and say is shaped by unconscious processes. In short, that we barely know ourselves.”

Tall order With so many factors in play, it’s no wonder that Thomas suggests that mediation needs to be a blend of

10 SPRING 2017 CIARB.ORG

Ultimately, people who come to mediation are the sum of their lives to date talk and silence, activity and pauses – with periodic breaks so that the parties can think and process alone.

In order for the brain to learn and remember something, she says, the material has to make sense and have meaning for the learner, which means it has to fit into the learner’s past experience and into what he/she knows about the world.

“I think that’s what mediation does – it gives the parties enough space to make sense of one another and their situation, and to somehow find meaning in the conflict experience as well as the process of mediation. It is a tall order.”

Having spent years studying the applicable science, Thomas admits that what she’s really learned is the power of not knowing: “The need to know is a very human trait. Our knowledge base and the fact that we know certain things is one of the ways we define and identify ourselves. Dr Robert Burton, in his 2008 book, On Being Certain: Believing You Are Right Even When You Are Not, describes knowing as a mental sensation, and speaks about the feeling of knowing and how that feeling is present whether or not what’s known is factual.”

She continues: “Neuroscience has left me acutely aware of just how much we don’t know with certainty. The combination of constructed perception, the fallacy of memory, the extent of unconscious influences, the critical and all-encompassing role of the past in shaping our experience – it’s made me think about approaching mediation, relationships, myself and the world unencumbered by all that knowing, and what that might feel like.”

Far from being daunted by the sheer complexity of the interaction between the brain and the mediation task, Thomas says her learning odyssey has left her with confidence “to go deeper” and allowed her to appreciate that in every mediation session, everyone has something to learn: “Beneath our everyday mind patterns lies a set of expectations we each carry around with us about the world: rules about how things should happen, what we’re entitled to, what fairness means, etc. To the extent that mediation provides even a glimpse of one of these mind patterns to anyone involved – in addition to evoking a new understanding of the situation and the other party – it should be considered a huge success.”

Ultimately, she says, people who come to mediation are the sum of their lives to date. Understanding how the brain works sheds light on just how little choice we have over who and how we are. And it helps explain why mediation is so hard – and so important.

Insight

HOW TO...

Choose an expert witness

Kay Linnell C.Arb attempts to simplify a challenging selection process

TIME IT RIGHT Identifying when an expert is needed to address specific problems is the key to clarifying the issues in dispute. Experts have technical knowledge and can give advice on issues and the questions that need to be asked – or the documents and evidence that ought to be available – at an early stage in a dispute, even before a Statement of Claim is issued.

MATCH GAME Put together a wish list of required qualifications for your expert, as well as technical criteria, and look for evidence of good standing with professional bodies so that you can draw up a shortlist. Also important is some sense of the expert’s ability to work well with the relevant party and legal team.

Be aware of working methods. For example, don’t select an expert who is a technophobe if all the evidence is held electronically and when modern investigative techniques and interrogations are required, or an expert who has been retired for such a long time they may not be aware of changes in modern professional practice.

LEARN MORE

CIArb’s ‘Protocol for the Use of PartyAppointed Expert Witnesses in International Arbitration’ is available at bit.ly/ CIArbProtocol

FOCUS ON KNOWLEDGE It’s not about the money. You’ll want to select the best expert you can afford, but remember the most expensive expert is not necessarily the best expert for the assignment. Instead of fee level, focus on whether the expert has the right technical knowledge and good analytical skills, and fully understands CPR35 or other equivalent rules. Check also that they have sufficient time and resources available to meet deadlines.

DO YOUR RESEARCH An expert must be able to demonstrate a proven track record of producing well-written court reports delivered on time, and of giving oral evidence and surviving cross-examination. Don’t rely on an expert’s own words and advertisements. Consider taking references from colleagues or reviewing recent

reported work, or even arranging a meeting with the proposed expert before appointment. The recent accreditation scheme promoted in the UK by the Expert Witness Institute to certify expert witnesses as in good standing for a five-year period is a move to increase the pool of top experts with up-to-date knowledge following codes of best practice, good conduct and ethics.

THE PERFECT CATCH The best expert witness is someone who can make complex technical matters understandable, is used to applying analytical skills to review and clarify issues, and is up to date and fully aware of the expert’s overriding duty to the court or tribunal. Such a person can assimilate new data, update their own opinion and be flexible enough to correct their own errors without compromising their firmly held opinions or spoiling a case for their instructing party without prior consultation.

CIARB.ORG SPRING 2017 11

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ABOUT THE AUTHOR Kay Linnell is a chartered arbitrator, a chartered accountant, an accredited mediator and Vice-Chairman of the board of governors of the Expert Witness Institute and on the board of the Institut Européen de l’Expertise et de l’Expert, Paris.

FISH IN THE RIGHT POOL Be as specific as you can in isolating what technical knowledge and level of expertise is required from your expert, and consider geographic or other constraints (like hourly rate fee caps) that may restrict the pool available to you. It is essential to narrow down the issues that will be referred and to prepare a concise but complete briefing note. A good expert will highlight any conflict or gaps in the briefing at the time they are asked to produce a fee quote.

In depth

Are you making the right choice?

ADR & IP

Flexibility, speed and confidentiality are a few of the reasons why litigation is finding it has a rival in resolving intellectual property disputes, writes Clive Thorne FCIArb

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I

FROM THE GRADUATE: GRANGER HISTORICAL PICTURE ARCHIVE / ALAMY STOCK PHOTO

ntellectual property infringement disputes have not traditionally been a subject for arbitration. The main reason for this is that intellectual property infringement is tortious rather than contractual, so that in order to reach an agreement to arbitrate the dispute there must be sufficient accommodation between the parties.

Admittedly, where an infringement dispute relates to flagrant or piratical infringement, such as counterfeiting, it is highly unlikely that there would ever be agreement to arbitrate – even if the intellectual property rights owner would have wished for it. In such cases the authority of the court, with its weaponry of interim orders such as Mareva injunctions or search and seizure orders (formerly Anton Piller orders), remains more appropriate.

However, there are areas of intellectual property more obviously suited to arbitration, including contractual disputes arising from technology transfer agreements or licence agreements, in which commonly the agreement may contain an arbitration clause. And, increasingly, parties in infringement disputes between two commercial parties prefer to arbitrate rather than to litigate.

PATH OF PROGRESS Assisting this trend is the significant progress that has been made over the past 20 years by the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center in producing appropriate rules for the conduct of intellectual property arbitration.

WIPO has also been extraordinarily successful in its short-form, paper-based procedure for the resolution of domain-name disputes. The WIPO model was followed by the National Arbitration Forum in the United States and Nominet in the UK. Article 35 of the Agreement on a Unified Patent Court (which will create a single patent court covering 25 countries) provides that a patent mediation and arbitration centre be established that will provide facilities for the mediation and arbitration of patent disputes.

The arbitration scheme introduced by the Patents County Court in 1990 was ahead of its time. Having been renamed the Intellectual Property Enterprise Court following the Hargreaves review of intellectual property, however, the Court Guide now merely makes reference (in paragraph 2.13) to the desirability of legal representatives being under an obligation to

WIPO has been very successful in the resolution of domainname disputes CIARB.ORG SPRING 2017 13

In depth consider and advise their clients as to the possibility of seeking to resolve the dispute via alternative dispute resolution (ADR). It recognises that the appointment of an arbitrator or “private decision maker under a set of procedural rules” may be appropriate, although it rightly points out that arbitrators cannot revoke intellectual property rights.

It is true that arbitrators have no power to revoke intellectual property rights, which are rights created by statute and in which there is a public interest.

However, there is no reason why, under the terms of an agreement to arbitrate, the parties cannot agree that the arbitrator should be able to decide validity issues and whether or not the intellectual property right is valid. It is frequently the case that a claimant in a patent dispute, faced with a counterclaim that the patent is invalid, may prefer the patent to be sustained rather than revoked. There may be good commercial reasons for this, including the possibility of a commercial settlement being achieved whereby the patentee may grant a licence to the infringer to the benefit of both parties.

The key point is that there must be an agreement to arbitrate – and once such an agreement is reached it is open to the parties to decide the applicable rules.

They are free to adopt one of the bespoke sets of arbitration rules available, such as those offered by CIArb, WIPO, the London Court of International Arbitration, and the American Arbitration Association.

It is also open to the parties to agree rules that cover the specific requirements of a particular intellectual property dispute, taking into account the technology involved. To facilitate the taking of technical evidence, a common feature of intellectual property disputes, the arbitration rules should contain specific provisions in relation to certain types of evidence, such as experiments (common in patent disputes), site visits and agreed technical primers.

CONFIDENTIALITY Provision is frequently also required to address the protection of trade secrets or other confidential information that may be disclosed within the arbitration. Generally, it is easier to maintain confidentiality by way of agreement within an arbitration. For example, the WIPO arbitration rules contain express provisions for both the centre administering the arbitration and the arbitrators to keep any disclosures made within the arbitration confidential. The WIPO rules also stipulate that the

Once an agreement to arbitrate is reached, it is open to the parties to decide the rules 14 SPRING 2017 CIARB.ORG

DID YOU KNOW? Litigating a patent dispute can cost between

$2 $5

MILLION and

MILLION and

50 %

of these costs arise out of discovery and related motion practice

In arbitration, parties can limit or customise discovery, which has the potential to save cost and time Source: AIPLA, AAA, as quoted in Kluwer Arbitration Blog, 25 February 2016, retrieve at bit.ly/2o72jGq

parties keep the existence of the arbitration itself confidential and do not disclose its existence other than as required by law or the consent of all parties.

The availability of interim relief is particularly important in IP disputes. Such relief may be granted by the arbitral panel or on an ancillary basis from the courts in a jurisdiction or jurisdictions where there is a need for interim relief. Generally, it is more advantageous to obtain interim relief from the arbitral panel itself and relief which binds the parties contractually. Such relief could include injunctions and the preservation of evidence.

Most arbitral awards are implemented by agreement on the basis that the parties have agreed to arbitration under particular rules and agree under the terms of the rules to carry out the award. However, enforcement may be necessary and, in such circumstances, arbitral awards are available to be enforced in an appropriate national court. In the case of most arbitrations, the awards can be enforced internationally under the New York Convention.

FLEXIBLE FORMAT Arbitration may be driven by the need for two commercial parties to maintain maximum commercial flexibility in using arbitration to determine the dispute. A number of arbitration agreements exist between commercial rivals whereby they have agreed that all the disputes that might arise between them should be dealt with by arbitration using a bespoke set of arbitration rules and with a particular governing law. For example, two leading US and French aerospace companies have agreed that their differences should be dealt with by compulsory arbitration, with Canadian law as an independent governing law.

In the United Kingdom intellectual property trials are usually bifurcated with a trial on liability and a subsequent damages assessment. Arbitration can be used to avoid that necessity so that, in the interest of cost savings, liability and damages are the subject of the same arbitration and the issues dealt with in a single arbitral hearing.

Arbitration has significant benefits in multijurisdictional disputes – for example, where the courts of several designated countries might be involved with the same European Patent Convention patent. It is open to the parties to agree that the arbitration should cover disputes that would otherwise require a series of independent court actions in each of the designated countries. In such cases the parties can agree that the arbitration can be determined under the law of a single jurisdiction.

Arbitration also allows other considerations to be incorporated into the applicable rules. For instance, the parties have the freedom to agree panels of arbitrators composed of members who have appropriate technical expertise that the public judiciary is unlikely to have.

Arbitration agreements allow for speedy resolution of disputes with a tight timetable for the benefit of both parties. A number of arbitration rules (such as WIPO’s) provide for expedited arbitration where appropriate.

In addition, such disputes enjoy the universal benefits of arbitration, such as the ability to reach an agreement as to costs liability, the finality of arbitration (as opposed to the appeal structure of the courts), and the ability to choose an appropriate jurisdiction for the arbitration and for the substantive issue.

In a number of well-known UK trials involving patent infringement, the parties have subsequently reached a settlement and have attempted (generally with difficulty post-trial) to persuade the judge not to give a judgment that he may already have prepared.

This problem does not arise in the case of arbitration.

While in the intellectual property context, mediation and arbitration are often considered together – as, for example, in article 35 of the Universal Patent Convention Agreement – they are very different procedures. Arbitration is adjudicative and determinative. It is essentially a private method of determining a dispute (in contrast to the public determination of a dispute by litigation) and is contractually binding on the parties once they have entered into an arbitration agreement.

MIXED APPROACH There are plenty of examples of the arbitration of intellectual property disputes that use a mixture of arbitration and another means of dispute resolution to determine separate issues in the dispute at different stages. For example, it is common for an early mediation to produce a partial agreement so that remaining insoluble issues should be determined by arbitration rather than litigation. It is of course possible to settle an arbitration and for mediation either to be expressly provided for in the arbitration agreement or to be agreed by the parties during the arbitration process. Such combinations of litigation, arbitration, expert determination and mediation are becoming increasingly common as courts expressly encourage ADR. As an intellectual property practitioner I welcome the increased recognition of arbitration as a method of determining such disputes. Nevertheless it will take time to persuade parties to such disputes that arbitration may provide an effective and acceptable means of determination. The role of organisations such as CIArb in devising specialist rules and panels will be invaluable.

of all arbitration and mediation cases filed with the WIPO Arbitration and Mediation Center relate to life sciences, with common issues concerning licensing, confidentiality, contracts and patents Source: WIPO.int

IP

15 %

BI R A

TRAT

Features

IO N

Arbitration agreements allow for speedy resolution of disputes for the benefit of both parties

International In the case of most arbitrations, awards can be enforced under the New York Convention (taking in more than 150 national courts).

Specialist Parties can agree panels of arbitrators composed of members who have specialist technical expertise.

Co-operative Once they have agreed to arbitrate, the parties can decide the applicable rules.

Confidential Agreements can address protection of confidential information within the arbitration; the existence of the arbitration itself must be confidential.

Flexible

ABOUT THE AUTHOR Clive D Thorne FCIArb is Special Counsel at Baker Botts LLP. He is a founding member of The Intellectual Property Lawyers Organisation and an Associate of the Chartered Institute of Patent Attorneys.

Rules can be specific and tailored to certain applicable types of evidence (such as experiments, site visits and technical primers).

Prompt A tight timetable for the benefit of the parties can be applied; a number of arbitration rules provide for expedited arbitration where appropriate.

CIARB.ORG SPRING 2017 15

Law

Case note Trina Solar (US), Inc v Jasmin Solar Pty Ltd [2017] FCAFC 6 (25 January 2017) Report by Sabina Adascalitei

BACKGROUND Jasmin Solar (“Jasmin”), an Australian company that sells and installs solar panels, intended to procure solar panels from Trina Solar (“Trina”), a US wholesale supplier of the same product.

For considerations related to tax, JRC-Services (“JRC”), a company incorporated in Nevada, had agreed to buy the panels from Trina, with Jasmin taking the role of a guarantor. In turn, Jasmin had entered into time-sensitive contracts with 2,000 customers, which rendered the wholesale supply time critical. Trina and JRC had signed a Supply Agreement, which was governed

by New York law and contained a dispute resolution clause providing, inter alia, for arbitration under the American Arbitration Association.

On receipt of the delivery, Jasmin refused to pay Trina, alleging that the solar panels were defective. In turn, Trina commenced arbitration proceedings against both JRC and Jasmin. Jasmin did not take part in the proceedings, stating that it was not bound by the agreement.

With regard to this issue, the arbitral tribunal found that Jasmin was a party to the supply contract and therefore bound by the arbitration clause.

FIRST INSTANCE Jasmin sought leave in the Federal Court to commence court proceedings in Australia, alleging that Trina had provided misleading and deceptive information to induce Jasmin to opt for the panel supply from it. The court noted that the core question in this case related to whether Jasmin was a party to the contract concluded between JRC and Trina. This, subsequently, raised the preliminary question of the applicable law. The two options encompassed: New York law, as the law governing the contract; and Queensland law, as the lex fori. In this respect, the court distinguished between the existence of the contract and its validity. The law of the contract would be applied to a validity question, whereas lex fori would apply to determine

The core question in this case related to whether Jasmin was a party to the contract concluded between JRC and Trina

whether there had been an agreement in the first place. In the present case, the court applied Queensland law, concluding that Jasmin was not a party to the contract.

THE APPEAL Trina appealed on the grounds that the Court of First Instance erred in applying lex fori instead of the law of the contract.

Had the court relied on New York law, Jasmin would have most likely been found to be party to the supply contract.

Trina argued that since the validity of the arbitration agreement is determined in relation to the law provided by the agreement, determining whether Jasmin is party to the contract should equally have been decided in light of the law governing the contract.

The Full Federal Court affirmed the decision at first instance, agreeing with the distinction made by the Court of First Instance with regard to the applicable law. The Federal Court held that allowing the application of the law chosen by Trina and JRC in an agreement to which Jasmin contends it is not part in order to prove the same would deem the court to have assumed what was to be proved.

WHAT IT MEANS This decision underlines the importance of ensuring that all parties to a transaction are bound by the arbitration agreement from the very outset. To do otherwise would, as seen in this decision, involve taking a risk, especially when entering into contracts with parties from different jurisdictions.

About the author: Sabina Adascalitei LLB LLM MCIArb is Research and Academic Affairs Coordinator at CIArb The full judgment is available at bit.ly/Trina-v-Jasmin 16 SPRING 2017 CIARB.ORG

Calendar

What’s on Selected events and training opportunities for CIArb members

DON'T MISS THIS

CIArb TRAINING MAY – NOV 2017 (Location is London unless specified) KEY l Alternative Dispute Resolution (ADR) l Mediation l Construction Adjudication l Domestic Arbitration l International Arbitration

CIArb AGM and Roebuck Lecture

1 June, 12 Bloomsbury Square, London WC1.

AGM begins 5pm; lecture follows at 6.15pm To confirm your place at the 2017 AGM, simply email the Governance Secretary by 26 May at governancesecretary@ciarb.org. The annual accounts and other AGM papers will be available to view from 10 May at www.ciarb.org/ publications/annual-reports-and-accounts. To request hard copies, please email or telephone as far in advance of the meeting as possible.

The AGM will be followed by this year’s Roebuck Lecture, delivered by Professor Neil H Andrews, Professor of Civil Justice and Private Law, Clare College, University of Cambridge. Professor Andrews will speak on the topic of ‘Arbitration and its rival systems: improving the quality of justice’.

Cost: Free to CIArb members; £60 non-members Register at: bit.ly/RoebuckBookNow FORWARD PLANNER l2 7 September CIArb’s Mediation Symposium, London, generously hosted by Ashurst l8 November CIArb’s DAS Convention, London, generously hosted by Locke Lord LLP l 1 6 November CIArb’s Alexander Lecture, London, confirmed speaker Professor George A Bermann FCIArb, Columbia Law School.

Members free; £60 non-members l 1 6 November CIArb Fellow Graduation Awards, London lF ull details at www.ciarb.org/events

l Introduction to ADR 9 May; 19 Sept; 14 Nov £480 Also available online. l Introduction to

Mediation 4 Oct £480

l Accelerated Route to Fellowship 17–18 Oct £1,860 l Introduction to Arbitration 19 Oct £480

l Module 2 International Arbitration 5 months.

Start: 13 Oct £1,320 l Module 3 International Arbitration 7 months.

Start: 5 Oct £1,860 l Module 4 International Arbitration 5 months.

Start: 26 Oct £1,320

l Module 2 Arbitration

l Accelerated Route to Membership 16–17 Aug; 28–29 Nov £1,320

l Module 2 Mediation

22 May; 13 Nov £1,560

l Module 3 Arbitration 7 months.

Start: 5 Oct £1,860

l Module 4 Mediation 6 months.

Open entry £660

l Module 4 Arbitration 5 months.

Start: 26 Oct £1,320

l Accelerated Route to Fellowship 2–3 Aug; 24–25 Oct £1,860

l Introduction to Construction Adjudication 16 May; 12 Sept £480

l Accelerated Route to Membership 28–29 Nov £1,320

l Module 1 Mediation 15–19 May; 6–10 Nov £2,400

l Module 2

Construction Adjudication 5 months.

Start: 5 Oct £1,320

l Module 3 Construction Adjudication 6 months.

Start: 5 Oct £1,860 l Module 4 Construction Adjudication 5 months.

Start: 27 Oct £1,320 l Accelerated Route to Membership 22–23 Sept £1,320

5 months.

Start: 13 Oct £1,320

l Diploma in International Commercial Arbitration (Part 1) 9 days, Oxford.

19–27 Aug £6,000

l Family Arbitration (Children Scheme) 8–9 July £1,920

l Diploma in International Commercial Arbitration (Parts 1 & 2) 9 days + 4 months, Oxford. 19–27 Aug + 26 Oct £7,200

l Introduction to International Arbitration 21 June; 31 Oct £480

l Diploma Practice & Procedure examination 26 Sept £336

l Accelerated Route to Fellowship 24–25 Oct £1,860

FIND OUT MORE Professional training: www.ciarb.org/courses Branch courses: www.ciarb.org/trainingand-development Education team: T +44 (0)20 7421 7439 F +44(0)20 7404 4023 E education@ciarb.org

CIARB.ORG SPRING 2017 17

WORLD VIEW

WASHINGTON DC Members address energy issues John Bowman FCIArb and Tim Martin C.Arb were panel members at ‘Global Energy Arbitration: Current Issues and Trends’, organised by the Georgetown Arab Lawyers’ Organization and Georgetown International Arbitration Society in February.

Diary date Pierre Mayer, international arbitrator and Emeritus Professor at the University of Paris, will deliver the 12th Annual International Commercial Arbitration Lecture at the American University Washington College of Law on 5 October. For details, visit wcl.american.edu

CIArb in DC Washington DC has an active CIArb Chapter and is one of eight such chapters located across the United States.

To find out more about its activities or to join, contact Chair Elizabeth Sandza FCIArb at elizabeth.sandza@wilsonelser.com

Trump’s actions raise questions regarding whether the administration will target ISDS going forward

Mark McCrone

questions regarding the extent to which animosity towards the TPP’s ISDS provisions contributed to the executive order and whether the administration will target ISDS going forward.

A time of transition

DC’s ADR community weighs up White House change ABOUT THE AUTHOR Mark McCrone is a member of the Dispute Resolution Practice Group at Baker McKenzie LLP. He won the CIArb Young Members Group essay competition in 2016 with ‘A Return to Consent in Investment Arbitration’.

T

he Washington DC ADR community is thriving despite some uncertainty surrounding the transition to a Trump presidency. Donald Trump appears to be a proponent of ADR, having used arbitration to obtain a $5 million defamation award in 2012 and to resolve breach of contract claims against NBC in 2015.

Nevertheless, members of the community have expressed concerns regarding his intentions for international trade agreements and the potential impact on investor-state dispute settlement (ISDS).

In January, Trump signed an executive order formally withdrawing the United States from the Trans-Pacific Partnership (TPP) trade deal. By itself this will not have a significant impact on ISDS as the treaty was never enforceable. In fact, even if the TPP had eventually come into force, it would not have superseded investorstate arbitration provisions incorporated in bilateral investment treaties already in place. Yet Trump’s actions raise

18 SPRING 2017 CIARB.ORG

Trump may also attempt to renegotiate the North American Free Trade Agreement (NAFTA) based on promises made during his campaign.

To renegotiate NAFTA, Trump would have to reach a new agreement with Canada and Mexico. Barring a renegotiation, his only option is withdrawal.

NAFTA Article 2205 states that a “Party may withdraw from this Agreement six months after it provides written notice of withdrawal to the other Parties. If a Party withdraws, the Agreement shall remain in force for the remaining Parties.” Thus, a US withdrawal would require six months to take effect, during which time investors would be free to bring a multitude of NAFTA claims against the Trump administration, similar to the circumstances of Venezuela’s withdrawal from the ICSID Convention.

Regarding US domestic issues, several federal agencies, including the Consumer Financial Protection Bureau (CFPB), have been working to implement limits on arbitration clauses. The CFPB is an independent bureau established through the Dodd-Frank Act following the 2008 financial crisis.

Senator Elizabeth Warren, who was a professor at Harvard at the time, spearheaded its creation. Before Trump was elected, the CFPB expected this year to finalise its rules banning mandatory arbitration provisions in financial services contracts.

Currently, the Trump administration is working to undermine the CFPB’s power by, among other things, dismissing its Director Richard Cordray. A DC Circuit panel ruled that Trump has the power to restructure this independent agency.

However, the CFPB has asked the DC Circuit to review the decision en banc.

Victor P. Leginsky, Chartered Arbitrator Accepting appointments as Chairman, sole arbitrator or co-arbitrator Construction, energy and general contractual

Email:

vleginsky@arbitralis.com

TEL:

+971 50 4573770

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L| O N DON PEAST ARIS MIDDLE

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