The Resolver May 2019 (Spring)

CLIMATE CHANGE

It’s now the burning issue

YOUR OPINIONS ON ISDS REFORM ARE NEEDED

DISCLOSURE: THE EXPERTS’ INSIGHTS

SPRING 2019 CIARB.ORG

A new regime hopes to make its mark

Leader

CONTACTS

Technological tools are ours to harness Be wary, maybe. Be safe, certainly.

But don’t miss out on the future benefits

© 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 Managing Editor Mike Hine Designer Amanda Richardson 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. While all due care is taken in writing and producing this magazine, neither CIArb nor Think accept any liability for the accuracy of the contents or any opinions expressed herein.

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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grounding in IT. For example, email, word processing, social media and listservs are today routinely used

by ADR practitioners.

That is not to say that IT use does not come with risks. Email and e-filing require good cybersecurity.

Listservs and social media bring with them the potential of conflicts and inappropriate disclosures. E-discovery remains a challenge (as noted on page 11). And so on. Indeed, CIArb has addressed many of these topics over the past few years. The 2017 Dispute Appointment Service Convention was devoted to technology and ADR; in 2014 the New York Branch published guidance on the use of social media; and the Institute has promulgated a protocol on e-discovery.

But technology is ever-changing.

Technologies largely unknown in our profession not too long ago, such as artificial intelligence, big data and blockchain, are expected shortly to substantially impact it.

To maintain ADR’s effectiveness, we must embrace the benefits of this future while working to recognise and minimise associated risks.

Thomas D Halket C.Arb President, CIArb

INSIDE THIS ISSUE

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THE OPENER Meet the new corporate members, Pre-Moot winner and more

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OPINION It’s your view that matters right now, says Mercy McBrayer

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ANALYSIS Ben Giaretta considers whether the Prague Rules will make their mark

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INSIGHT Andrew Kasriel offers expert tips to make you a disclosure diva

CLIMATE CHANGE

It’s now the burning issue

YOUR OPINIONS ON ISDS REFORM ARE NEEDED

DISCLOSURE: THE EXPERTS’ INSIGHTS

12

IN DEPTH The arbitration community must get fired up about climate change, writes Wendy Miles QC

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LAW An emerging market sets the scene for a mining sector dispute

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CALENDAR CIArb training opportunities and featured events

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WORLD VIEW Poland may see a B2B boom in arbitration

SPRING 2019 CIARB.ORG

A new regime hopes to make its mark

CIARB.ORG SPRING 2019 3

SHUTTERSTOCK

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 Marketing and Communications 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 MCIArb T: +44 (0)20 7421 7423 E: gandrews@ciarb.org Governance and Legal Services Tom Cadman ACIArb E: legal@ciarb.org Dispute Appointment Service E: DAS@ciarb.org

n my introduction to the winter edition of The Resolver, I described some of the challenges we are facing today that impact ADR’s future, which is the theme I have chosen for my Presidential year. In this issue and those that follow this year, I will focus on a different topic within that theme. For this spring edition, I have chosen one that is near and dear to me: the effect of technology on our profession. Technology affects ADR both because disputes are increasingly related to technical issues and because IT has an increasing impact on the resolution of disputes of all kinds.

Technology is viewed by many as a servant for good. Yet by others it is seen, at best, as an evil to be endured or, at worst, as a potential master. To put it another way, for those of you familiar with the vernacular of sci-fi films, technology could be seen as sitting anywhere on the spectrum from the helpful and obedient R2-D2 and C-3PO to the inscrutable HAL 9000 and, at the extreme, the all-controlling Matrix.

I am firmly in the camp that sees technology as a force for good, and I believe that it can no longer be disputed that, to be an effective arbitrator or mediator, a person needs an appropriate

The opener

SPRING 2019

The opener

DEVELOPMENT

Swiss entry triumphs at March Pre-Moot

Corporate Membership on the rise In 2017, CIArb’s corporate membership was launched to support organisations in avoiding, managing and resolving disputes, and is continuing to attract worldrenowned names. Here’s who has recently been added: Pinsent Masons LLP is a specialist in large, complex international arbitrations, with a particular focus on the energy, infrastructure, technology and financial services sectors. One of the leading law firms advising on

all forms of commercial disputes, it is listed among the Global Arbitration Review’s top 100 international arbitration firms.

CMS offers a large team of specialist lawyers who share a refreshing approach to disputes. Structured according to the industries in which its clients work, CMS brings its deep sector expertise to individual disputes, ensuring clients always receive advice in the context of their own market.

Consumer Dispute Resolution Limited (CDRL) is a not-for-profit ADR provider, approved under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities) Regulations 2015, and with schemes approved by the Civil Aviation Authority, the Chartered Trading Standards Institute and Ofcom. Each of its seven schemes has its own specialist team. It resolves disputes between consumers/ companies and traders.

Peter Taylor Associates is an established team of Chartered Architectural Technologists delivering quality architecture across multiple sectors. It operates with a staff of 50 from offices in London, Birmingham and East Sussex, and has both UK and overseas clients.

For more information about corporate membership contact Nasar Qayyum: nqayyum@ciarb.org or +44 (0)20 7421 7440

New corporate member CDRL operates seven ADR schemes, including a focus on aviation industry complaints

Fresh face for CIArb marketing Natalia Otlinger MCIArb has joined CIArb as PR and Engagement Executive.

Her role will involve increasing awareness of ADR and CIArb among students, professionals and businesses.

A first priority will be promoting diversity and inclusion in the ADR community and developing CIArb activities in this regard. Already planned is #CIArbWomenInADR, a project that

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will offer short interviews with female ADR specialists from around the world via the CIArb website and social media.

Natalia firmly believes that sharing examples of women achieving success in their field will send a positive message to women pursuing or considering a career in ADR. Share your CIArb story with Natalia by emailing notlinger@ciarb.org

Peter Ashford FCIArb with the winning team, University of Bern, Switzerland

The team from the University of Bern, Switzerland, was the winner of the fourth Fox Williams Pre-Moot on 3 March, organised in association with CIArb. This year, the Pre-Moot welcomed a total of 16 teams from 10 countries. Peter Ashford FCIArb, Chair of the event and Head

of International Arbitration at Fox Williams, applauded the opportunity to expand the field thanks to the association with CIArb, and the “very high quality of teams”.

Commenting on the engagement with students across the globe, Neil Newman,

CIArb Director of Communications and Membership, said: “We now have almost 4,000 students signed up from over 110 countries, and moots present the perfect forum for promoting our offer to students who wish to build a career in dispute resolution.”

CIArb YOUNG MEMBERS

New YMG leaders in place The fast-growing CIArb Young Members Group (YMG) has new leaders. Ronan O’Reilly, an Associate in White & Case’s dispute resolution group, is the YMG’s new Chair, and Athina Fouchard Papaefstratiou, Of Counsel in Eversheds Sutherland’s litigation group, is now Vice-Chair.

Ronan’s practice involves both commercial litigation and international arbitration, and covers a variety of sectors, including energy, telecommunications and financial services. Previously, he served as Vice-Chair of the CIArb Global Young Members Group. On his appointment, Ronan said he looked forward to “having the support of a dynamic and enthusiastic Global Steering Committee”. He also recognised the work of previous Chair Amanda Lee, whom he described as “a great ambassador for the group”, while adding: “I plan to work hard to emulate her success.”

Athina specialises in international commercial arbitration, investment arbitration and public international law. She also has experience in Africa-related arbitration.

Ronan and Athina take the helm of a group that has experienced significant growth in membership

– increasing by 37% – since the beginning of 2016. The YMG now has more than 4,000 members.

MORE YMG ACTIVITY ● The YMG Global Steering Committee

has welcomed five new members: Peter Anagnostou (UAE), Laura McEwen (Scotland), Dharam Jumani (India), Sebastiano Nessi (Switzerland) and Elizabeth Rainbow Willard (US). ● CIArb YMG Philippines was officially launched on 24 January 2019. The occasion was celebrated during the Joint Monthly Fellowship of the Philippine Institute of Arbitrators and the CIArb Philippine Chapter.

The creation of the group represents a historic milestone, being the first chapter of an international ADR young members group to be organised in the Philippines. ● In the last two years, new local YMGs have been set up in Kenya, North America and South Africa, with more due to launch in the near future. ● The YMG Ambassador Initiative, which launched in 2018, gives members in regions without a local YMG an opportunity to contribute to the work of CIArb. Ronan O’Reilly

YMG Taiwan’s launch

YMG Ambassadors are currently engaged in initiatives in Brazil, France, Ghana, India, Indonesia and Zambia. ● In January, more than 40 practitioners attended YMG Taiwan’s first event.

Among the speakers was Dr Helena Chen FCIArb, who shared her experiences as a female arbitrator and a partner at an international firm. ● The YMG European Branch and Young Institute for Transnational Arbitration held a joint Year in Review conference in December in Paris.

Meet up in Edinburgh The CIArb Young Members Group Annual Conference will take place on 8 November, and will be hosted by CMS Edinburgh. More information and booking will be available soon.

CIARB.ORG SPRING 2019 5

The opener EDUCATION

60-SECOND INTERVIEW

Paul Rose FCIArb The Chair of CIArb’s busy London Branch provides a glimpse into his personal ADR origin story How did you first find your way into dispute resolution?

My career began in earnest after I applied for a post-graduate diploma in arbitration course and was one of the lucky 100 who were accepted and passed the exams for the first year.

I joined CIArb at member grade and then went on to follow the route to become a Chartered Arbitrator, which in those days preceded Fellowship status. I then undertook a number of pupillages through which I was fortunate to be able to attend hearings and note expert evidence. The experience proved invaluable when it came to my peer interview for Chartered status.

Having obtained Chartered status, and a few days later being elected a Fellow, I applied to join Clerksroom as an arbitrator. I was told that they had no arbitration work, but that if I took their mediation course I would become an accredited mediator and be given mediation work. That was my route into mediation. Since then I have received 130 appointments as a mediator, so that chambers kept its word. After some 18 months as a Chartered Arbitrator I received a sizeable appointment from CIArb’s Dispute Appointment Service, was invited to join ArbDB Chambers and have not looked back.

What do you consider to be your biggest achievement in the field?

This is a tough choice to make given the volume of mediations that I have done, which included the first investor-state treaty mediation undertaken in chambers with a claim for breach of contract of over US$60 million.

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However, I would have to say it is obtaining my Chartered Arbitrator status. From that achievement, everything else flowed.

What do you think is the future of dispute resolution?

I sense a cyclical trend varying between arbitration and mediation. A few years ago mediation was in demand. It still is, but to a lesser extent due to changing economic circumstances. Arbitration seems to have come forward in the past two years or so. Nevertheless, I see mediation again on the rise due to continued pressure from the courts to relieve their caseload. Mediation is also becoming prevalent in interstate treaty disputes where government-backed institutions seek to limit their costs.

How long have you been active in the London Branch?

I served for eight years as Public Relations Officer for the Branch, then as Honorary Secretary and, from May 2018, as Chair. It was a privilege to be elected to Chair and I enjoy the support of a strong Executive and Committee who put on a considerable number of highquality seminars. I have learned a great deal from these seminars and widened my horizons. I encourage the younger members to follow my example.

What other advice might you give to young members?

I would encourage them to take CIArb’s courses to qualify both in mediation and arbitration, and to join in the fellowship of being a member of the Institute and take an active part in the running of their branch.

Find out more about the activities of the London Branch at londonarbitrators.org

East Asia Branch delivers New Pathways syllabus CIArb expanded the delivery of its New Pathways programme in the Asia-Pacific region by training 18 new faculty members in Hong Kong in January.

Dr Paresh Kathrani, Director of Education and Training at CIArb, said: “We are delighted to have grown our Faculty in the Asia-Pacific region. The CIArb Pathways are built to enable people to take a membership journey from Membership to Fellowship of CIArb. The Pathways will be supplemented by a growth of face-to-face, blended and online modules (Non-Pathways) in discrete themes of alternative dispute resolution.”

Remember, if you are a candidate on an old Pathway, you must complete your training by 31 December 2019.

For more information, please email educationteam@ciarb.org

APAC conference has future focus CIArb members from across the AsiaPacific region came together in late April for the Asia-Pacific Regional Conference 2019 in Singapore. The one-day event centred on ‘The Future of International Dispute Resolution’ and celebrated the ways in which the region is creating innovative solutions to resolving disputes. The Honourable Justice Quentin Loh, the judge in charge of the Singapore International Commercial Court, delivered the keynote speech.

The conference looked at Asia’s role in shaping the future of ADR, from the development of arbitral institutions and arbitrators to procedural innovations such as witness conferencing and the use of the Prague Rules. The conference closed with a spotlight for younger voices in the region to share their ideas on the future of dispute resolution.

Opinion

Right now, it’s your opinion that matters

CIArb needs you to weigh in on the ISDS discussion, says Mercy McBrayer MCIArb

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IKON IMAGES

ne of the most discussed topics in the arbitration world right now is investor-state dispute settlement (ISDS) reform, and at the heart of this conversation is the work of UNCITRAL Working Group III (WG III). To provide a centrally held compilation of information on the areas of potential reform being discussed

by WG III, CIArb has launched a collection of discussion papers providing detailed information on the issues put forward in the WG III conversations.

CIArb is present for all of the discussions as an official observer organisation and is ideally placed to inform members and the arbitration practice at large of developments. Through the discussion papers, CIArb seeks to apprise members and practitioners of the arguments put forward by the WG III member states.

The intent of the papers is not to persuade, but rather to inform.

The papers reflect three overarching themes that have emerged in the WG III discussions in recent years as the key areas of debate: efficiency, decisions and decision-makers. In the discussion of efficiency, the papers offer views of the member states’ criticisms of the increasing time and cost of ISDS disputes and also note the necessity

of lengthy, expensive proceedings that the parties themselves create.

As to decisions, states have expressed a high level of concern over the consistency, predictability and valid legal interpretation of instruments. Along with these issues have come suggestions of review mechanisms for awards and the establishment of multilateral investment courts, and concerns over transparency and the role of third parties in proceedings.

Finally, the discussion of decision-makers centres around ways to ensure the impartiality and independence of arbitrators in investment arbitration. This includes standards of disqualification, methods of appointment, challenge procedures and conflicts of interest.

WG III has also discussed whether

Three themes have emerged in the WG III discussions: efficiency, decisions and decision-makers

a code of conduct, training requirements, certifications or rostering should be put in place.

The lack of diversity of arbitrators in ISDS is also discussed.

Running throughout the discussion papers is a common thread of warning that each proposal or possible solution raises its own set of problems and counterarguments. Many reforms that have been suggested have the potential to significantly affect other aspects of the system, even if unintentionally. Most often, the concept of party autonomy, historically a defining element of arbitration, is the first to be forfeited. This is followed closely by confidentiality.

CIArb is seeking perspectives from members on this critical area of debate. The discussion papers will continue to evolve as the WG III conversations progress.

But for this to happen, we need your viewpoints. CIArb invites you to read the complete discussion papers and give your opinions.

ABOUT THE AUTHOR Mercy McBrayer MCIArb is Research and Academic Affairs Coordinator at CIArb

HAVE YOUR SAY Download the papers at bit.ly/SP19_ISDS or bit.ly/SP19_ SSRN_ISDS. Send email comments to mmcbrayer@ ciarb.org or leave feedback on SSRN

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Analysis Philosophically, the approach in the Prague Rules has much in common with the call in the US for arbitrators to be more ‘muscular’ TRIBUNAL TAKES THE LEAD

Ben Giaretta C.Arb considers whether a new regime based on inquisitorial practices will make its mark on international arbitration

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I ABOUT THE AUTHOR Ben Giaretta C.Arb is a Partner specialising in international arbitration at Mishcon de Reya

nternational arbitration has long attracted precepts, codes and other guidance. In part, this is because of the flexibility of the process and the lack of detail in arbitral rules, which have created a desire for certainty in some quarters. In part, this is because there are many institutions and other organisations that feel inspired to add to the collection of ‘soft law’. And in part, it is because there are different visions of what international arbitration should be, very often informed by the cultural background of the participants.

December 2018 saw the launch of the Rules on the Efficient Conduct of Proceedings in International

The Prague Rules represent a significant shift from the typical approach in arbitration in many countries at present

Arbitration (commonly known as the Prague Rules).

These are the brainchild of a group of lawyers who come mostly from a civil law background – unusually, an informal group rather than one operating under the banner of a particular organisation. The group developed the Prague Rules over the course of 2018.

Initially, the group railed against the ‘Americanisation’ of international arbitration and the dominance of the common law world. Later, the tone shifted towards promoting efficient practice, while largely continuing to draw on court procedures from civil law countries.

The result of those discussions is a set of rules that places the arbitrator at the centre of the proceedings.

The arbitrator is encouraged to be proactive and take the lead right from the start. For example, the Prague Rules say that the tribunal should first clarify with the parties what the arbitration is about at the case management conference. This clarification should include which facts are undisputed and which are disputed, and what the legal contentions are. The tribunal should then state expressly how it thinks the parties should proceed to present their respective cases in the arbitration. The tribunal can even tell the parties at this early stage what its preliminary views of the merits are – something that is unheard of in a typical arbitration in common law countries.

This approach continues throughout the case.

The tribunal is urged to be proactive in establishing the facts, in particular by asking the parties to produce documents and present witnesses to give evidence.

On the other hand, the Prague Rules cut down drastically on document disclosure by the parties.

After the parties submit the documents on which they rely, the parties and the tribunal are encouraged to avoid any further document production (specific document requests may be permitted, but generally only if those document requests are made early on, at the case management conference).

The tribunal can also do its own legal research, which includes referring to legal provisions not mentioned by the parties – meaning that at the hearing an advocate may have to anticipate and answer additional questions from the tribunal about the law falling outside the parties’ written and oral submissions.

These are all practices from civil law countries, although it must be said that while placing the arbitrator at the centre like this is unusual in common law countries it is not entirely alien to arbitration statutes in them – the UK’s Arbitration Act 1996, for example. Philosophically, the approach in the Prague Rules has much in common with the call in the US a few years ago for arbitrators to be more ‘muscular’.

WITNESSES AND EXPERTS

Where the Prague Rules really diverge from common law practices, however, is in the treatment of witnesses. In arbitrations taking place in common law countries or those that are influenced by common law CIARB.ORG SPRING 2019 9

Analysis

Many users of arbitration may feel uncomfortable giving up so much control over the presentation of their cases court procedures, it is left to the parties to decide which witnesses to present and which witnesses to cross-examine. The most that a tribunal does is to ensure that a proper amount of time has been allotted for cross-examination at the hearing.

The Prague Rules are different. Here, it is the tribunal that decides which witnesses to call for examination during the hearing. It can decide on the contents of this roster by choosing from the witnesses nominated by the parties, but also from anyone else who is not called by a party but whom the tribunal believes a party might be able to present as a witness. To determine which witnesses to call, the tribunal has to consider what witness evidence is really necessary for the resolution of the dispute. If the tribunal decides that a witness should not be called, a party can still submit a statement from that witness and the other party can ask for the witness to be cross-examined. However, once the tribunal has concluded that a witness’s evidence is irrelevant, that is a strong discouragement to the parties against presenting or challenging the witness’s testimony. At the hearing itself, the tribunal can control the examination of witnesses and reject questions that it considers are not material to the outcome of the case.

This represents a significant shift from the typical approach in arbitration in many countries at present.

It takes the control of witness evidence out of the hands of the parties and gives it to the arbitrators.

It also adds another layer to the process, because the parties have to persuade the tribunal to hear a witness. The parties will need to make submissions to the tribunal for this purpose, which might add some extra time and cost, but will force the parties to consider upfront whether the testimony from particular witnesses is really going to assist their cases.

Another significant difference is the use of tribunalappointed experts. Appointment of an expert by the tribunal has always been possible in arbitration, but rarely done in practice. The Prague Rules moves this to the default position. If specialist knowledge is needed, the tribunal will appoint an independent expert (after taking soundings from the parties on an appropriate candidate). This does not preclude the parties from appointing their own experts who may also give evidence at the hearing, but a tribunal-appointed expert will inevitably set the agenda for any discussion of expert issues.

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WILL THE PRAGUE RULES BE POPULAR?

It’s difficult to say what the uptake of the Prague Rules will be. Undoubtedly, some parties and their advisors will use them because they will be familiar with the approach from its reflection of court procedures in their home countries. Some may give the Prague Rules a try because of the publicity they have received over the past 12 months and a desire to restrict time and costs. They might also be adopted when an arbitration is time-limited (under an expedited process, for example) and there is a special need for the arbitrators to be proactive in the design and control of the process.

But many users of arbitration may feel uncomfortable with giving up so much control over the presentation of their cases, in particular in the presentation of witness evidence. It is likely, therefore, that the broader impact of the Prague Rules will be to stimulate change in more subtle ways: encouraging arbitrators to be bolder in their procedural choices; altering the landscape of international arbitration against which courts assess procedural challenges; and placing more responsibility on parties to think actively about where they want the arbitral process to be extended and where they are happy for it to be curtailed.

SPOTLIGHT: WHAT’S NEW FOR WITNESSES? • The tribunal decides which witnesses to call for examination during the hearing.

• This roster can draw on witnesses nominated by the parties.

• It can also include anyone the tribunal believes a party might be able to present as a witness.

• The tribunal can control the examination of witnesses and reject questions that it considers are not material to the outcome of the case.

Insight

HOW TO ...

Be a disclosure diva Andrew Kasriel FCIArb recaps the learning from a recent event on disclosure

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IArb members who regularly sit as arbitrators, and those who hope to do so in future, will have appreciated hearing the viewpoints of the speakers at a recent CIArb London Branch seminar, which looked at several issues that confront tribunals, including disclosure.

So what were the primary takeaways?

ABOUT THE AUTHOR Andrew Kasriel FCIArb is a civil practitioner specialising in chancery and commercial disputes, a Barrister at 5 Pump Court and Honorary Treasurer of the CIArb London Branch

KNOW YOUR RULES

Rachel Ansell QC spoke about the rules under which arbitration proceedings are conducted and stressed that arbitrators should always be aware of which set of rules they have been appointed under, and conduct themselves accordingly.

Ansell noted that each set of rules has a slightly different emphasis but, in general, following consultation with the parties, arbitrators have powers to direct what documents the parties must produce. Rules usually provide a two-stage approach: disclosure of the documents that the parties rely on, and then disclosure of further documents that parties request, if so stipulated by the tribunal.

ACT IN GOOD FAITH

The IBA rules stipulate a duty of good faith in the production of documents, although what is implied by this good faith principle can be difficult to determine when there is no agreed international practice. That duty, however, does not appear to go as far as what is understood in litigation in the English court system. If standard disclosure is ordered, CPR Part 31.6 requires parties to disclose all relevant documents, even those that are adverse to their own case or might assist the opponent’s.

SHUTTERSTOCK

THE E-DISCLOSURE OPTION

Rebecca Shorter of White & Case suggested that when cases hinge on a huge number of documents, electronic disclosure (e-disclosure) is the only option. Yet e-disclosure raises further problems, including the need for effective search algorithms to find the ‘needle in

LEARN MORE For more details on the seminar, ‘New Approaches to Disclosure – Saving costs v reducing transparency’, go to londonarbitrators.org

the haystack’ and where there has been fraudulent interference with e-documents that can be detected using metadata.

Even with the help of e-disclosure, it is an enormous task for a legal team to select documents for disclosure and ensure there is no inadvertent release of privileged information.

PROGRESSIVE PILOT

A new, two-year Disclosure Pilot Scheme (Practice Direction 51U) came into force on 1 January for proceedings in the Business and Property Courts of England and Wales, explained the Hon Mrs Justice O’Farrell. Parties propose a level of disclosure that they consider appropriate, choosing one of five models (from ‘Model A – No disclosure’ to ‘Model E – Wide search-based disclosure’). If the parties agree on a model, the court is likely to order that it be applied to the case. Only if parties are unable to reach agreement will the court determine the matter at the first directions hearing. The scheme provides for parties to set out their disclosure proposals in a particular format, and to

exchange these with the opponents, in a progressive attempt to reach agreement and save time and costs related to producing information that might never be considered at trial. What may worry practitioners is the ability for the opposing party to conceal an essential document, ‘the smoking gun’, that might have conclusively vindicated their own client, or having to reveal matters that they regard as confidential or would prefer not to disclose.

COULD PRAGUE HAVE POTENTIAL?

The recently launched Prague Rules are available to parties to use if they so agree, whether as guidelines or as a binding document, in addition to the scheme rules under which proceedings are being conducted. Developed with particular reference to the civil law jurisdictions, they confine parties to the documents on which they rely, with requests to the tribunal for additional documents only being granted if explained with reasons and fully justified. (See page 8 for more on this new regime.)

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In depth

The heat is on

Arbitrators need to get fired up about the impact they can have on tackling climate change, says Wendy Miles QC FCIArb

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significant shift has taken place since The Resolver published its November 2016 cover feature on climate change and arbitration, entitled ‘Arbitrators Can Turn Up the Heat’. The post-Paris Agreement mission to combat climate change has expanded well beyond state relations and public international law into day-to-day corporate activity and broader corporate investment strategy.

The global economy will steadily reshape towards a decarbonised future, as states continue to regulate to implement their Paris Agreement commitments and business and industry continue to align their investment strategy with those commitments. This is a transition on a massive and unprecedented scale, and it is largely dependent on private investment that is implemented and protected through private commercial contracts and their dispute resolution provisions. For that transition to succeed, every citizen needs to participate in, and be part of, the solution. For arbitrators in particular, the heat is on to ensure that they facilitate transition in the resolution of commercial and other disputes that have an impact on climate change.

A WORD ABOUT PARIS The Paris Agreement was concluded between 175 states in December 2015 under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC). The Agreement memorialised the commitment to limit the global temperature rise to well below 2°C above pre-industrial levels, with a focus on 1.5°C. In October 2018, the UNFCCC’s scientific advisory body, the Intergovernmental Panel on Climate Change (IPCC), released its post-Paris Agreement special report on global warming of 1.5°C. It surmises that warming above 1.5°C is not a viable option and sets out emission pathways and system transitions consistent with limiting global warming to 1.5°C. These require “rapid and far-reaching transitions in energy, land, urban and infrastructure

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(including transport and buildings), and industrial systems”. The IPCC says these transitions are “unprecedented in terms of scale, but not necessarily in terms of speed, and imply deep emissions reductions in all sectors, a wide portfolio of mitigation options and a significant upscaling of investments in those options”.

SEISMIC CHANGE REQUIRED In concrete terms, these emissions pathways and systems transitions require seismic change in four separate sectors of business and industry: energy (meaning power as opposed to transport); infrastructure and urban (including supporting transportation); land use; and industry. Given the intensity of energy required in industry, this imposes additional challenges, but not insurmountable ones.

The IPCC is specific. In terms of energy, it projects: significant investment upscaling in, for example, enhanced energy efficiency; faster electrification of energy end use and a higher share of lower-emission energy sources, with renewables supplying 70–85% of electricity in 2050; shares of nuclear and certain fossil fuels with carbon dioxide capture and storage to increase (with gas-generated global electricity at 8% by 2050); coal to reduce to zero; and significant developments in solar, wind and electricity storage technologies. It projects total annual average energy supply investments of US$640–910 billion for 2016 to 2050 and an upscaling of annual investments in

The transition is largely dependent on investment implemented and protected through private commercial contracts and their dispute resolution provisions CIARB.ORG SPRING 2019 13

In depth

ABOUT THE AUTHOR Wendy Miles QC FCIArb is a Partner at Debevoise & Plimpton and co-chairs the ICC Task Force on Climate Change Related Disputes. She is the Editor of Dispute Resolution and Climate Change: The Paris Agreement and Beyond (bit.ly/SP19_Miles) and a regular participant at the UNFCCC Conferences of the Parties since 2015

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Hotspots

It is incumbent on arbitrators to understand the objectives of the Paris Agreement and the underlying goal

The impact of climate change mitigation will fall most heavily on four sectors, with arbitration likely to play a leading role in enforcement of agreed goals

ENERGY

report.1 It set out the mandate and opportunity for business, embracing the most challenging areas of transition: “Achieving net-zero CO2 emissions from the energy and industrial systems will require rapid improvements in energy efficiency combined with the rapid decarbonisation of power and the gradual electrification of as much of the economy as possible, mainly light-duty road transport, manufacturing, and a significant part of residential cooking, heating and cooling.”

RISK ALLOCATION Major public companies’ annual reports and public statements now reflect a commitment to transition.

For example, BP commits to “deliver significantly lower emissions” and “reduc[e] emissions in our own operations”. Siemens Netherlands has announced “large investments in areas such as power grids, renewable energy generation, and energy savings in industry and the built environment”, and GE promises “to lead in the fast-growing renewable energy market”.

Increasingly, financing pressure facilitates change.

Major institutional investor BlackRock, for example, believes “the combination of complexity, global variety and capital need amid clear directional change can make for attractive investment opportunities”. However, a transition of this scale, magnitude, complexity and pace creates uncertainty and risk, and BlackRock acknowledges that “risks range from the macro (political and economic) to the micro (counterparty)”, but believes that “they can be mitigated”. The most effective way to mitigate micro or counterparty risk is through contracts – and, to a lesser extent if the counterparty is a state, through bilateral investment treaty (BIT) protection.

Risk allocation is central to any commercial contract negotiation and to drafting contractual provisions, and nowhere more so than in the uncertain terrain of investment in the systems transitions necessary to achieve the objectives of the Paris Agreement. Substantive contractual terms will need to allocate risk for contractual interference arising out of ongoing change in the regulatory environment, fast-paced technological change, consumer and investor pressure, and increased litigation and disclosure. This may be achieved through appropriate representations and warranties; stabilisation clauses; and force majeure, termination, governing law and dispute resolution provisions.

Requiring enhanced energy efficiency, faster electrification of energy end use and higher share of lower-emission energy sources

INFRASTRUCTURE AND URBAN

Requiring significant investment in land and urban planning practices, and deeper emissions reductions in transport and buildings

LAND USE

Requiring an increase of land for energy crop production the size of India, and the size of China for forests, by 2050, as well the conversion of pastureland amounting to three times the size of Spain for energy crops

INDUSTRY

Requiring significant investment in new and existing technologies and practices, as well as emissions reductions by energy and process efficiency

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ABOUT THE AUTHOR

low-carbon energy technologies and energy efficiency by roughly a factor of six by 2050, compared to 2015.

Transitions for urban and infrastructure, land use and industry systems are equally dramatic. Urban and infrastructure requires significant investment upscaling in changes in land and urban planning practices; deeper emissions reductions in transport and buildings; and technical measures and practices enabling deep emissions reductions, including various energy-efficient options. In the transport sector alone, the IPCC projects that the share of low-emission final energy would rise from less than 5% in 2020 to 35–60% in 2050.

Global and regional land use involves dramatic change. To limit warming to 1.5°C, by 2050 the IPCC requires an increase in areas of non-pasture agricultural land for energy crop production up to the size of India (2.5 million km2), and up to the size of China (9.5 million km2) for forests. At the same time, an area three times the size of Spain (1.5 million km2) of existing pastureland would need to be converted for energy crops.

This creates profound challenges for sustainable management of the various demands on land from human settlement, food, livestock feed, fibre, bioenergy, carbon storage, biodiversity and other ecosystem services. Mitigation options limiting demand for land include sustainable intensification of land-use practices, ecosystem restoration and changes towards less resource-intensive diets.

Finally, industry requires significant investment upscaling in new and existing technologies and practices, including: electrification, hydrogen, sustainable bio-based feed stocks, product substitution, and carbon capture, utilisation and storage, as well as emissions reductions by energy and process efficiency.

All of this impacts the choices we make as consumers, how we educate our children, how we invest and how we conduct our business, including in professional services. Business, industry and governments are all mobilising for change, but individuals can too, both personally and professionally.

Shortly after the IPCC special report, the Energy Transitions Commission, a coalition of business, finance and civil society leaders from across the spectrum of energy producing and using industries, published the Mission Possible

Where states are involved, parties may also include compensation for expropriation provisions. For those contracts that choose international arbitration, the pressure is on arbitrators (and counsel) to understand the underlying objective of systems transitions and to ensure that disputes are resolved accordingly, based on the parties’ contractual terms and law.

BIT protection also remains important in stateparty contracts. The interpretation and application of investment treaty protections will be informed by the Paris Agreement and state commitments thereunder.

Investors who are actively implementing systems transitions in foreign states are afforded important, additional investment protection and certainty – encouraging transition investment – through BITs. Again, it is incumbent on arbitrators sitting in such cases to understand the objectives of the Paris Agreement and the underlying goal of reducing the global temperature rise through reduction of overall greenhouse gas emissions.

EXISTENTIAL BATTLE So, over two years since this publication first reported on the need for arbitration to be able to offer up “informed counsel and informed arbitrators in relation to climate change issues”, it is clear that more remains to be done – and done quickly. With corporate focus moving firmly to these issues as an investment and contractual matter, the need for a cohort of informed, motivated, and geographically diverse arbitration professionals is only increasing.

As a columnist in The New York Times wrote on 13 February 2019: “This will be a long-term existential battle that will require remaking every part of society, that might consume other worthy parts of a progressive agenda, that may involve costly and politically unpopular changes to our way of life for years to come, and will necessarily make some people worse off than if we did nothing…”2 While participating in the necessary changes required will not be a solely professional responsibility, our existing systems and structures can help. For example, CIArb, as a membership body that aids the ADR profession in the challenges it faces, may use its foundational pillars of education, scholarship and accreditation to promote education and development in this field. As Professor Dr Nayla Comair-Obeid C.Arb wrote in CIArb’s journal: “It is crucial that professionals of dispute resolution constantly educate themselves, which proves to be essential in times of adversity. By educating ourselves, we learn to adapt and to apply different methods; but we also stimulate our minds to welcome innovation.”3 In providing support, CIArb will enhance user confidence in ADR and promote and educate on best practices in the profession, fostering principles that are not only ethical, but also aligned with the international community on the critical matter of climate change.

LEARN MORE

Explore the latest IPCC findings in full at ipcc.ch/sr15

1. bit.ly/ETCReport 2. nyti.ms/2VsMfeu, last accessed 18 February 2019 3. ‘Dispute Avoidance and Resolution in Times of Crisis’, The International Journal of Arbitration, Mediation and Dispute Management, 84:1, February 2018

CIARB.ORG SPRING 2019 15

Law

Calendar

Case note

Carnegie Minerals (Gambia) Limited v Republic of The Gambia (ICSID Case No. ARB/09/19)

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

Report by Mercy McBrayer, Research and Academic Affairs Coordinator at CIArb

DON’T MISS THIS

Emerging markets in Africa have long attracted significant investment in natural resource extraction projects, and have subsequently been the locus of disputes between investors and governments over related contracts.

The case of Carnegie and The Gambia is an example of such a dispute. In 2005, the parties entered a mining concessions contract that granted a licence to Carnegie and authorised it to mine certain minerals in The Gambia.

According to The Gambia, after a few years of cooperation, Carnegie breached its licence and mined other minerals.

Vigorous actions by the state followed: revocation of the licence, closure of the mine, seizure of Carnegie’s equipment and the arrest of Carnegie’s manager in The Gambia. These actions led Carnegie to file a case with the ICSID under the arbitration clause in the licence agreement.

An award in favour of Carnegie was issued in 2015. However, The Gambia immediately applied for annulment and stay of enforcement. Even in the absence of a published award, the documents available in the post-award battle present a captivating read.

PARTY POSITIONS

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The last of The Gambia’s repeated successful attempts to stay enforcement of the award was filed in September 2018 as a part of an annulment proceeding.

The ad hoc Committee reviewed it the following month and its decision offers an opportunity to observe the competing hardship arguments presented.

The Gambia argued that a lift of the stay would cause the state to experience “irreparable harm” and “economic hardship”, since the award amount was equivalent to 2% of The Gambia’s GDP.

KEY l ADR l Mediation l Construction adjudication l International arbitration l Centralised assessment

Roebuck Lecture and CIArb AGM It also argued that Carnegie lacked credibility and that it was Carnegie’s burden to prove that the state would not honour the award or that enforcement in the territory of The Gambia would not be possible.

In response, Carnegie advocated for lifting of the stay by emphasising the absence of post-award interest and obvious devaluation of damages, as well as an obligation on The Gambia to order security on the whole amount awarded to Carnegie. It further submitted that The Gambia had not proved its intention not to comply with the award and has a reputation of non-compliance in other ICSID cases. It further asserted that the likelihood of successful enforcement in The Gambia was low.

THE COMMITTEE’S VIEW

In the Committee’s opinion, post-award interest could not be viewed as a valid reason to lift the stay, because this had never been requested by Carnegie.

The Committee would not support the argument of hardship due to the difficulty of enforcement 16 SPRING 2019 CIARB.ORG

CIARB TRAINING MAY–JUL 2019 (Location is London unless specified)

It also criticised Carnegie’s allegations regarding non-compliance as speculation. The Committee would not support the argument of hardship due to the difficulty of enforcement in The Gambia, which would require analysis of Gambian law. Moreover, Carnegie’s request for assurance of security was not supportable, as it amounted to asking the Committee to be involved in enforcement.

The Committee did not consider either party’s assertions of hardship sufficiently persuasive. It decided, on balance, that The Gambia had a slight advantage on this point. The Committee acknowledged The Gambia’s argument regarding the economic hardship that honouring the award presents. However, the obligation to pay the award, while stayed, could not be eliminated. The Gambia will have to face the obligation so long as the award remains in effect. Ultimately, the stay was continued, not for reasons of hardship on either party, but because of the insufficiency of Carnegie’s arguments to lift it.

For further details, visit italaw.com/ cases/6886

13 June, CIArb, 12 Bloomsbury Square, London WC1A 2LP; AGM precedes the lecture; Roebuck lecture 5.30–8.30pm The annual Roebuck Lecture is a highlight of the CIArb calendar. This year’s speaker is Stavros Brekoulakis ACIArb, Professor in International Arbitration at Queen Mary University of London and an associate member of 3 Verulam Buildings.

His work includes leading publications such as the ICCA-Queen Mary Task Force Report on Third-Party Funding. He is a member of the ICC Task Force on Emergency Arbitrator Proceedings and the ICC Commission on Arbitration, an Assistant Rapporteur for the International Law Association Committee on International Commercial Arbitration, and Editor in Chief of CIArb’s International Journal of Arbitration, Mediation and Dispute Management.

Lecture information and booking: bit.ly/SP19_Roebuck FORWARD PLANNER l 13 June CIArb AGM, 12 Bloomsbury Square, London. Formal notice will follow and documents will be made available at ciarb.org l 27 September CIArb’s Mediation Symposium, ‘Mediation in Times of Crisis’ l 14 November Alexander Lecture l December CIArb DAS Convention

l Introduction to ADR Online Open entry £36

l Introduction to Construction Adjudication 16 May £95

l Introduction to ADR 9 May £396

l Introduction to International Arbitration 20 Jun £95

l Module 1 Training & Assessment 4–11 Jun £3,960 l Module 3 Mediation Theory and Practice Open entry; 6 months £660 l Introduction to Construction Adjudication 16 May £396 l Introduction to International Arbitration 20 Jun £396 l Introduction to ADR Online Open entry £95 l Introduction to ADR 9 May £95

l Module 1 Law, Practice and Procedure of Construction Adjudication 10 Jul £174 l Module 1 Law, Practice and Procedure of Domestic Arbitration 11 Jul £174 l Module 1 Law, Practice and Procedure of International Arbitration 11 Jul £174

l Module 3 Award Writing: International Arbitration 16 May £408 l Module 3 Award Writing: Construction Adjudication 16 May £408 l Accelerated Route to Membership: Construction Adjudication 9–10 Jul £1,500 l Accelerated Route to Membership: Domestic Arbitration 10–11 Jul £1,500 l Accelerated Route to Membership: International Arbitration 10–11 Jul £1,500 l Accelerated Route to Fellowship: International Arbitration 14–16 May £1,920

l Module 2 Law of Obligations 9 May £342

l Accelerated Route to Fellowship: Domestic Arbitration 14–16 May £1,920

l Module 3 Award Writing: Domestic Arbitration 15 May £408

Quoted costs include VAT. For information and booking, visit www.ciarb.org/training

APAC OFFERING CIArb Asia Pacific Diploma in International Commercial Arbitration 25 May–2 June, Singapore This pre-eminent tertiary course – conducted by CIArb Australia, East Asia, Malaysia, Singapore and Thailand – offers a prestigious, globally recognised qualification. It is aimed at meeting the increasing demand for accredited arbitrators and arbitration practitioners to resolve cross-border disputes in the Asia Pacific region. For more information, visit bit.ly/SP19_APACDiplomaCA

CIARB.ORG SPRING 2019 17

WORLD VIEW

POLAND CIArb in Europe Poland is one of the many countries covered by CIArb’s European Branch, one of the largest in the CIArb network.

The Branch has more than 600 members from across 35 countries.

For more information about the Branch, including upcoming events, visit ciarb-europeanbranch.com

Arbitration Conference in Warsaw Professor Stavros Brekoulakis ACIArb, Piotr Bytnerowicz FCIArb and Wendy Miles QC FCIArb and are just a few of the CIArb members slated to speak at the International Conference for Promoting Arbitration in Warsaw in May. For more information, visit disputeresolutionmaconference.com

Europe’s IP mediators gather The second IP Mediation Conference will be held in Alicante, Spain, on 30–31 May. Among those joining senior speakers from EUIPO, the UK IPO, industry and academia is accredited mediator Gordon Humphreys who will lead a panel on hybrid and cutting-edge mediation techniques.

The existing arbitration institutions in Poland administer 600 to 700 arbitrations per year between them

B2B boom in prospect Political uncertainty in Poland is providing an impetus for arbitration

W

ith 2019 well under way, Poland may be facing booming interest in arbitration with regard to businessto-business disputes. Although arbitration has a very long history in Poland, it developed rapidly as the chosen form of ADR following the fall of Communism in 1989 and the country’s transition to a free-market economy.

Poland, Warsaw in particular, has a real chance of becoming a regional centre of arbitration in Central and Eastern Europe.

Procedural flexibility and international effectiveness of arbitration awards are among the many advantages relevant to arbitrating in Poland, thanks to near-universal accession to the New York Convention. Polish arbitration law, based on the UNCITRAL Model Law, applies to both international and domestic arbitrations seated in the country.

ABOUT THE AUTHOR Magdalena Rudzka is a PhD Candidate at the University of Silesia in Poland and a Trainee at CMS Cameron McKenna Nabarro Olswang Pośniak i Sawicki sp.k.

The current evolution of arbitration is enforced by the main arbitral institutions, the Polish Chamber of Commerce and the Court of Arbitration at the Confederation Lewiatan. Both of these bodies have recently revised their arbitration rules to align them with modern trends. Depending on preference, arbitration proceedings may be held in a number of languages (including Polish, English, French, German or Russian). In general, all of the existing arbitration

18 SPRING 2019 CIARB.ORG

Within the context of the increasing popularity of institutional arbitration, it is still primarily used to deal with complex cases that have an international element, rather than to tackle domestic disputes.

Judicial proceedings before the state courts remain a more common form of dispute resolution. This, however, may be about to change. A large amount of uncertainty with regard to the reform of the justice system is hindering the process of bringing actions before the state courts. Even large and experienced businesses are finding this new situation daunting.

As a result, the current political situation in Poland may encourage entrepreneurs and companies to resolve their disputes by means of ADR. Anecdotally, a great number of lawyers practising in international law firms have admitted that such concerns have already resulted in the more frequent signing of contracts containing arbitration clauses.

Poland has seen public protests over judicial change

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Warsaw has a chance of becoming a regional centre of arbitration

institutions in Poland administer 600 to 700 arbitrations per year between them. Proceedings usually last between six and 24 months, depending on the course of the evidentiary proceedings.

However, the quickest award was given in only seven weeks. In comparison, decisions before the state courts in the first instance might be rendered in three to four years if a complicated matter is involved.