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THERESOLVER

T H E Q UA RT E R LY M AG A Z I N E O F T H E C H A RT E R E D I N S T I T U T E O F A R B I T RAT O R S

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Scotland launches new centre for international arbitration Changes to UK employment law will bring opportunities for mediators Why the uprisings in the Middle East are good news for the rule of law Legal round-up How to deal with insolvency and arbitration

May 2011

ADR in construction -

How deep has the impact of recession been on demand?

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Who’s Counselling Your Counsel?

In the current economic climate there have been an unprecedented number of business failures, disputes, financial frauds and accounting irregularities. These events have resulted in regulatory interventions, investigations, financial restatements and a significant number of lawsuits and arbitrations.

Martin Hunter Managing Director, Construction Disputes and Advisory Alvarez & Marsal Dispute Analysis & Forensic Services LLP

Alvarez & Marsal’s Dispute Analysis & Forensics group works closely with law firms and in-house counsel to solve complex legal matters, bringing to bear the deep and diverse expertise of forensic accountants, fraud examiners, former regulators, economists, banking and securities professionals, financial analysts, technology specialists, and former Big Four partners and staff.

+44 (0)20 7663 0435 mhunter@alvarezandmarsal.com

Since 1983, Alvarez & Marsal, a leading independent professional services firm, has set the standard for working with companies, investors, boards and legal counsel to improve performance, solve complex problems and maximise value for stakeholders.

Managing Director, Forensic Accounting and Financial Investigations

Julian Jones

Alvarez & Marsal Dispute Analysis & Forensic Services LLP

Å Forensic Accounting and Investigations

+44 (0)20 7072 3237 jjones@alvarezandmarsal.com

Å Disputes – Testifying and Consulting Experts Å Forensic Technology www.alvarezandmarsal.com ./24( !-%2)#! s %52/0% s -)$$,% %!34 s !3)! s ,!4). !-%2)#!

The Law Society of NSW is proudly sponsoring the Gala Dinner of the Chartered Institute of Arbitrators Asia Pacific Conference 2011.

26–28 May 2011 – Sydney Australia www.ciarb.org/conferences/asia-pacific

The Law Society of NSW is the largest direct membership association for solicitors in Australia. www.lawsociety.com.au

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CONTACTS

Doug Jones

LEADER

Redactive Publishing Ltd 17 Britton Street, London EC1M 5TP T: +44 (0)20 7880 6200 EDITORIAL T: +44 (0)20 7880 6200 E: editorial@ciarb.org Editor: Rima Evans Sub editor: Kathryn Manning Art director: Mark Parry Picture editor: Sam Kesteven ADVERTISING T: +44 (0)20 7880 6245 Sales manager: Steve Grice E: steve.grice@redactive.co.uk Senior sales executive: Stephen Fontana E: stephen.fontana@redactive.co.uk T: +44 (0)207 880 6243 PUBLISHING DIRECTOR Jason Grant E: jason.grant@redactive.co.uk PRODUCTION Production manager: Jane Easterman Deputy production manager: Kieran Tobin © THE RESOLVER is published on behalf of the Chartered Institute of Arbitrators (CIArb) by Redactive Publishing Ltd (RPL), 17 Britton St, London EC1M 5TP. 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 RPL accept any liability for the accuracy of the contents or any opinions expressed herein. Printed by Pensord Press Ltd ISSN 1743 8845

CIArb ENQUIRIES

WELCOME TO THIS edition of The Resolver, which covers a variety of topics, including workplace mediation (p6) and the opportunities it affords commercial and civil mediators, as employers look for cheaper and more effective ways of resolving disputes at work. Interest in this sector is growing and CIArb now offers courses on workplace mediation, both for the beginner and the experienced practitioner. See → www.ciarb.org/education-and-training/course-finder/ for details.

There is also an in-depth look at ADR in construction, (p10) asking how demand for adjudication has stood up in the financial crisis as well as examining other forms of ADR that are becoming popular. Elsewhere, we offer a practical piece advising on the issues involved in dealing with an insolvent party in arbitration proceedings (p14).

This year has started off as a busy one for me, as President, with visits to the Indian Branch (in Hyderabad and Delhi) and to the New York, Washington, South Eastern, and Houston Chapters of the North American Branch (p16).

Early spring will see me speaking in Frankfurt to the German-American Lawyers’ Association Conference; in London for the UK and European Branch Chairs’ meeting and the annual meeting of the London Branch; at the Willem C Vis (East) Moot in Hong Kong; and then the Willem C Vis Moot in Vienna, which will see me arbitrating, speaking at associated events, and hosting a CIArb participants' function at the British Embassy. At the end of last month I attended engagements with the Japan Chapter in Kyoto and Tokyo. On behalf of all members of CIArb, I would like to convey my deepest sympathy and concern for those affected by the devastating natural disaster that has befallen the country.

I have been greatly impressed by the energy of all of the branches and chapters I have visited so far. I feel privileged to play a role in encouraging the Institute's global outreach.

“I have been greatly impressed by the energy of chapters and branches I have visited so far”

Doug Jones AM FCIArb President Chartered Institute of Arbitrators 12 Bloomsbury Square, London WC1A 2LP, UK T: +44 (0)20 7421 7444 E: info@ciarb.org W: www.ciarb.org MEMBERSHIP T: +44 (0)20 7421 7490 E: memberservices@ciarb.org COURSES & QUALIFICATIONS T: +44 (0)20 7421 7439 E: education@ciarb.org LEGAL SERVICES T: +44 (0)20 7421 7424 Sandra Greenaway E: sgreenaway@ciarb.org MARKETING, COMMUNICATIONS & SPONSORSHIP T: +44 (0)20 7421 7488 Sarah Ball E: sball@ciarb.org

CONTENTS WATCH 4-5 News: CIArb members join Crossrail panel; EU Mediation Directive deadline looming 6-7 Analysis: Mediation at work may be on the rise due to changes in UK employment law 9 Law round-up: Nanjing Tianshun Shipbuilding Co Ltd v Orchard Tankers PTE Ltd; Fulham Football Club v Sir David Richards

OPINION 8

Essam Al Tamimi: The recent Middle East uprisings are likely to be good news for the rule of law in these countries My toughest dispute; Best of the ADR blogs

EVENTS T: +44 (0)20 7421 7427 E: events@ciarb.org

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ROOM HIRE T: +44 (0)20 7421 7423 Giles Andrews E: roomhire@ciarb.org

REGULARS AND FEATURES

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.

10 14 15 18

Cover: How has ADR in the construction sector been affected by the global downturn?

How to... deal with insolvency and arbitration CIArb news: including the latest from branches What’s on: round up of upcoming training courses

Registered Charity N0− 803725

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WATCH

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CIArb’s Costs of International Arbitration Survey is still live. It aims to highlight where and how costs are incurred and ways to make international arbitration more cost efficient. To participate visit → www.ciarb.org/conferences/costs

Crossrail adjudicators ready for action The Crossrail project, the largest construction project in Europe, includes 118km of new railway track and 37 stations, eight of which will be brand new central London stations and others upgrades, 11 of which are major reconstructions.

At the peak of construction it is estimated that Crossrail will employ as many as 14,000 people.

All contractors involved are required to comply with the Crossrail Construction Code. In addition, an independent Crossrail Complaints Commissioner has been appointed who will decide on any public complaints about Crossrail construction that cannot be resolved.

However, the scale of the project led Crossrail Ltd to ask the Institution of Civil Engineers (ICE) to establish and manage an independent Crossrail Adjudication Panel. This comprises 14 members, any one of whom may be appointed as adjudicator by agreement between the parties, or failing which, by nomination by the ICE. Each member underwent a rigorous selection process.

Crossrail Ltd chose ICE to develop and manage the Crossrail Adjudication Panel because of its neutral position and because it drew up the NEC form of contract.

Adjudicators will act under the terms of the NEC3 Adjudicator’s Contract. NEC3 provides for a partnering-based approach for resolving issues and disputes, to help parties discuss and resolve issues efficiently, potentially avoiding the need for adjudication.

Adjudicators, once appointed, will be able to consult the ICE dispute resolution panel for procedural guidance.

The panel includes a diverse range of construction professionals including architects, civil engineers, mechanical and electrical 4

CROSSRAIL

CIArb members have been appointed to an adjudication panel to manage disputes that may arise in a £16 billion railway project for London

The adjucation panel will take a partnership approach to help parties resolve issues efficiently

engineers, quantity surveyors, structural engineers and lawyers.

Among its members are: Peter Aeberli FCIArb, Chartered Arbitrator; Daniel Atkinson FCIArb; Gordon Bathgate FCIArb, Chartered Arbitrator; Peter Chapman FCIArb, Chartered Arbitrator; Peter Cousins FCIArb, Chartered Arbitrator; Christopher Dancaster FCIArb, Chartered Arbitrator; Brian Holloway FCIArb, Chartered Arbitrator; Robert Isherwood FCIArb; Niall Lawless FCIArb, Chartered Arbitrator; David Loosemore MCIArb; John Marrin QC FCIArb, Chartered Arbitrator and Alan Turner FCIArb. Brendan Van Rooyen, Dispute Resolution Services Manager at the ICE will be administering the panel.

Update provided by CIArb Trustee Niall Lawless FCIArb

‘Exciting time’ for online learning Robert Gordon University (RGU) in Aberdeen will be the first Scottish University to offer an online LLB from September. The course is accredited by the Law Society of Scotland and adds to the growing list of RGU online programmes, including a number which are accredited by CIArb. Derek Auchie MCIArb, Senior Lecturer in Law and online LLB course leader said: “Our experience with online learning has inspired us to expand our distance offering. This will be a premium online course aimed mainly at graduates and is designed to be available to graduates of any discipline and from any jurisdiction. We have already attracted applications from all around the world.

“This is an exciting time for online learning and this course will employ new, interactive technology, including synchronous online seminars. Lectures will be delivered via presentations supported by audio, creating a classroom environment.”

Applications are accepted until 30 June. For more information on the course please contact Derek Auchie email d.p.auchie@rgu.ac.uk

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“Three years and four changes of solicitor later, I issued an agreed award dismissing the claim and counterclaim” → See my toughest dispute, by Neville Tait FCIArb, on page 17

Cross-border rules change in the offing The deadline is looming for EU member states to implement new rules for EU cross-border mediation. Member states (except Denmark, which opted out) have until 21 May to implement the EU directive. The directive does not apply to UK domestic mediation. We now know some of what is proposed in England and Wales and, separately, in Scotland. In both jurisdictions, the changes will not be extended to UK domestic mediation.

In England and Wales, a Statutory Instrument (SI) effective from 6 April makes changes to the Civil Procedure Rules. It gives effect to mediation settlements being enforceable but only where the parties have agreed and whether or not there are proceedings (Article 6). It states the rules that will apply where a person seeks disclosure of evidence arising from a mediation (Article 7).

There is no provision for Article 4 (the quality of mediation), Article 5 (recourse to mediation) or to the first part of Article 7 (confidentiality of mediation and mediators not being called to give evidence). There is nothing about Article 8 of the directive (extending the limitation period during a mediation) but it is understood that draft amendments to the Limitation Act will shortly be published to give effect to that article.

In Scotland, a draft SI called ‘The Cross-Border Mediation (Scotland) Regulations 2011’ has been published. That draft SI proposes giving effect to Article 7 (confidentiality of mediation and mediators not being called to give evidence) and sets out draft amendments to the law of Scotland as to limitation and prescription periods (Article 8). The draft SI does not deal expressly with any other articles of the directive.

It follows that implementation may well be different in Scotland and in England and Wales.

READER FEEDBACK Right to reply I refer to Ben Beaumont’s response in the Feb 2011 issue to my opinion article in the previous issue. He was not to know it was based on an address to the AGM of the Wales Branch, the fuller argument being more comprehensive, and that it referred to data from Glasgow Caledonian University.

That data had not been updated to show that the number of adjudications in 2008 was the 1,432 he mentions, before he adds

DREAMSTIME

Report by David Cornes FCIArb

Edinburgh is home to the Scottish Arbitration Centre, which opened in March

Scotland ‘to take lead in arbitration’ thanks to government-backed centre A new Scottish Arbitration Centre will help the country become a world leader in international arbitration, according to Scottish ministers.

The centre, which opened in Edinburgh in March, is backed by the Scottish government, CIArb, the Faculty of Advocates, the Law Society of Scotland and the Royal Institution of Chartered Surveyors.

This new facility will build on the Arbitration (Scotland) Act 2010 to give Scotland a world-class legal framework for arbitration, stated the government. Fergus Ewing, Community Safety Minister, said at the launch: “With its distinguished legal tradition, innovative

legislation and ready access to advice and facilities, Scotland is well placed to compete as an attractive and cost-effective venue for arbitration on the global stage.”

Richard Farndale MCIArb, Honorary Secretary and Treasurer of CIArb’s Scottish Branch, said: “Through its Scottish Branch, CIArb is delighted to support the formation of the Scottish Arbitration Centre. This new venture will drive forward the promotion of arbitration in Scotland, following opportunities arising from the new Arbitration (Scotland) Act 2010.”

The centre’s headquarters are in Dolphin House, in an office owned

by City of Edinburgh Council.

Email letters to editorial@ciarb.org

that the number is falling year on year. The question is whether the fall is due to adjudication reducing disputes or encouraging their settlement, or whether parties are resorting to other procedures, possibly mediation.

If it is the latter, it seems illogical to claim that adjudication works, and, of course, for simple payment disputes the fall might have resulted from outlawing pay-when-paid clauses and not from the introduction of statutory adjudication.

As for activity in the Technology and Construction Court in 2010, in the May 2010 edition of Arbitration Kenneth T Salmon refers to an avalanche of cases in the last quarter of 2009 and suggests the trend continued in early 2010. In 2009 Coulson J in Primus v Pompey aired his fears that adjudication was in danger of revisiting some of the inefficiencies of the past, where the costs outweighed the claim.

Whether the contractor is to be blamed for directing disputes to

adjudication after completion does not alter the fact that the procedure has not lived up to the billing given to it, including by Lord Ackner.

I do not claim adjudication does not work in any circumstance, but if it had worked in all circumstances this debate would be unnecessary.

It would have worked better if government had also excluded the right to raise cross-claims in the same proceedings.

Derek Griffiths FCIArb

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NEWS ANALYSIS WORKPLACE MEDIATION Mediation at work is on the rise as changes to UK employment law raise its profile. So what are the opportunities for mediators?

Work in progress

T

THE BENEFITS and opportunities of ADR are being pushed centre stage in the UK by a government keen to find ways of saving money and cutting red tape.

Proposed reforms to the civil justice system have put a greater focus on mediation and ADR (see The Resolver, February 2011) particularly in respect of family court procedures. But an additional raft of changes to employment legislation is also giving rise to a greater push towards mediation, highlighting the role it can play in workplace disputes.

Last month, consultation ended on seeking views on measures for resolving workplace disputes. This included asking for views on how to achieve earlier “resolution of workplace disputes so that parties can resolve their own problems, in a way that is fair and equitable for both sides, without having to go to an employment tribunal”.

This key strand is being seen as paving the way for mediation at work to take on a much more prominent role, shifting employers’ mindset about the part it can play and its effectiveness.

It could signal a great opportunity for mediators, according to Clive Lewis ACIArb, Managing Director and Founder of Globis Mediation Group. This is not just for specialist workplace mediators, but for civil and commercial mediators too.

“This review is the biggest thing to have happened in this country for promoting mediation. It’s a very exciting time for our industry as there is likely to be a huge increase in demand,” says Lewis, who is also a trained and accredited civil and commercial mediator.

MORE INFO

education-and-training/course-finder/ See also the story on page 15.

Clive Lewis’s latest book, Resolving Workplace Conflict: 12 Stories, is out now.

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IMAGE: ISTOCK

Globis Mediation Group is delivering workplace mediation courses for CIArb for complete beginners, as well as conversion courses aimed at more experienced practitioners.

For details see → www.ciarb.org/

This also coincides with a rise in conflict at work. While various factors, including vastly strengthened employment legislation, have shifted workplace relationships to being more rightsbased over a number of years, causing a steady rise in the number of disputes at work, there has been a much sharper upturn during the recent financial crisis.

A survey on conflict management released last month

by Europe’s largest HR professional body, the Chartered Institute of Personnel and Development (CIPD), concluded: “The findings confirm the scale of workplace conflict is remarkable and has increased in the recession.”

The number of management days and HR time spent on addressing conflict issues has risen since 1997, from 13 to 18 days for disciplinary cases and from nine to 14 days for grievance.

Lewis says: “People are now much more likely to talk about their workplace rights and how the law protects them. They are also more likely to lodge a grievance, rather than try to have a dialogue with their colleague about how their relationship can get back on track.”

“In just one year, the firm saved £517,000 as a result of conflict management”

This is where mediation at work has a role. Essentially it is all about options and ways to get relationships on an even keel.

The business case is proven.

“When an organisation embraces the concept of conflict resolution and mediation, everyone is likely to win,” Lewis says. Failure to resolve or address disputes at work can contribute to lower levels of productivity, customer service, employee engagement and lead to higher levels of sickness or absence, he adds.

Organisations in the CIPD survey also reported additional benefits, including reducing or eliminating the stress involved in using more formal processes, and avoiding costs in defending claims. The latter is crucial, of course. Lewis cites the example of one private sector organisation where 12 in-house mediators were trained at a cost of under £30,000.

In just one year the firm saved £517,000 as a result of improved conflict management.

While the use of mediation at work is not new, awareness is still relatively low, according to Judith Hogarth, an independent

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workplace mediator and qualified solicitor. The CIPD survey showed that almost half of organisations that have used workplace mediation at some point have increased its use over the past two years. But while Hogarth agrees it is catching on, it is still fairly underused. Although she says: “Once organisations become familiar with mediation they tend to come back. The government changes will definitely stimulate interest and raise awareness.”

And workplace mediation is not just a UK phenomenon, Lewis says. “The US and several other countries are more advanced in this area. There is some catching up to do in this country, although we have some leading thinkers on the topic,” he says.

Amid this growing interest, ‘conversion courses’ for commercial and civil mediators to become accredited workplace mediators are becoming more popular. But what is the crossover between the discipline of workplace mediation and civil or commercial mediation? And to what extent is workplace mediation even recognised as

a distinct mediation discipline requiring further training?

Workplace mediation is an umbrella term for two aspects of mediation at work: employment mediation and workplace mediation (see panel below).

Each requires a different skillset, explains Lewis. In workplace cases, where you may be dealing with high levels of emotion because people have fallen out and they want to be listened to, a mediator role crosses with that of a facilitator in negotiating a joint discussion.

By contrast, in employment cases it is more about negotiating a deal, the terms of an employee’s exit from the organisation.

Undeniably there is debate in the industry about whether different skills really are required for workplace mediation – and whether conversion courses are necessary. But Lewis says: “Increasingly, people understand – and are convinced – that there is enough of a difference in the workplace area that warrants a conversion of skills. Mediators have an obligation to provide a duty of care to parties in a dispute and it’s a serious matter if the mediator cannot get it right.”

The main difference is in the area of negotiation, he adds.

“You might go through hours in a workplace case listening to

someone express their emotion as a result of how they feel they have been treated. But they may not be seeking financial compensation – they may just want an apology.

These cases require softer skills.”

There is a definite crossover of skills in the employment-dispute scenario. Lewis says: “The setup here is familiar territory for commercial mediators since the emphasis is on negotiation around legal rights. You are more likely to be in a room with an employee and an employee representative,” he says.

More generally, workplace mediation shares some key tenets with other forms of mediation, such as the ability to listen, ask questions, explore issues and find routes on which to negotiate, and find ways to translate an agreement in principle into specifics.

But this common ground only serves to highlight the opportunities available for mediators wanting to expand their expertise and make the most of current legislative and cultural changes in the workplace arena.

“There is much more interest in workplace mediation. Now is the time,” says Hogarth.

THE TWO ASPECTS OF WORKPLACE MEDIATION 1. ‘Employment mediation’ refers to a mediated dispute in the workplace where the settlement is about how to manage someone leaving the organisation, for example, with a compromise agreement. Or, it could be used for someone that has left the organisation but is taking their dismissal to an employment tribunal, in which case mediation would seek to agree terms of settlement.

2. ‘Workplace mediation’, on the other hand, is where there is an ongoing relationship and the mediation explores how colleagues, of which there might be two or more, can get their relationship back on track.

It is possible for a dispute to start as a workplace case but end up as an employment case.

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OPINION MIDDLE EAST UPRISINGS

Essam

Al Tamimi The past months have seen dramatic movements towards democratisation unfold in the Arab world. While it will be painful in the short term, it is good news for the rule of law SOME PEOPLE MAY FIND IT – also caused those states to difficult to make sense of the experience a deterioration in their sudden uprisings of the Arab social and economic power, people and the dramatic changes becoming totally dependent on that have been happening in the foreign aid.

Middle East towards democracy.

The street movement started The current movement in the with Tunisia, followed by Egypt Arab world is neither a coup nor demanding changes. Due to the is it initiated by foreign forces. demographic similarity, the It has come as a surprise to common religion, the Arabic Western intelligence agencies, language and in many cases the as it is not led by any particular unified race of most of the Arab party or leader. nationals, the movement spread The effect of the current on within days, progressing into situation has other Arab states been powerful, in an almost The effect of the stretching identical current situation has fashion, to beyond each been powerful, affected country countries such stretching beyond as Algeria, even to those each affected nations that are Yemen, Bahrain, country even to relatively stable. and the those nations that Sultanate of The movement are relatively stable Oman. was led by students fed up Even in with the corruption endemic in countries that are stable (those their systems (in particular the within the Gulf Cooperation leadership); rising Council) changes are being made unemployment; the over-use of in favour of democracy and for secret service and intelligence the creation of jobs. It is likely facilities and the excess use of the that the same will follow police force. The last 30-40 years throughout the Arab World – have seen leadership in Arab Syria and Morocco have already countries, which were supposed moved to introduce laws to offer to be democratic republics, being their people a better life. dominated by members of elite At the same time, due to lack of ruling families, which in turn has experience in democracy in the undermined the whole system Middle East over the last 400 and the democratic concept. years and in some states a lack of Continuous years of education and qualified people, interference in the judicial and it is inevitable that countries legislative processes and elections embracing democracy as a result – to the extent that the judicial and of uprisings on the streets will legislative systems either totally soon be suffering from setbacks collapsed or became part of the and internal clashes. The cost will executive power of the president be high, the process slow, and

S ONLINE

Join the debate at → www.ciarb.org/forum Essam Al Tamimi FCIArb is Senior Partner at Al Tamimi & Company in Dubai. He is also Chairman of the UAE Branch

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there will be many lessons learnt in the coming months.

However, the process will prove to be great news for transparency in the legal and political systems throughout the Arab world. Gradually there will be increased respect for the importance of the rule of law, the independence of the judicial system and the free media.

It is likely we shall now see rapid improvement in the judicial and legislative system through an elected democratic process. This will have a tremendous effect on the rule of law in the area and entire legal system, which will bring us closer to the structure currently at work among the international community, in particular, the western world.

The only question that remains is whether the Islamic movement in the Arab world will get a piece of the cake. It is likely that on a short-term basis and due to the democratic process, the Islamic movements will have a percentage of the seats within each parliament and a similar involvement in future governments. However, it is unlikely to be in any radical way, nor is it expected that the Islamic movement will have full control of a government or the people in most Arab countries.

Although most Arab countries have been, and are, Islamic in nature this is unlikely to have significant effect on the legal and judicial systems which come out as the biggest victor in the current revolutions taking place.

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LAW

An overview of recent key court cases

ROUND-UP FAILURE TO COMPLY WITH CONTRACTUAL TIME LIMITS FOR COMMENCEMENT OF ARBITRATION

THE CASE ○ ARBITRATION

Nanjing Tianshun Shipbuilding Co Ltd v Orchard Tankers PTE Ltd [2011] EWHC 164

THE PROCEEDINGS arose out of a shipbuilding contract between Nanjing Tianshun Shipbuilding (NTS) and Orchard Tankers PTE (OTP). The contract provided for arbitration in London.

OTP paid the first four instalments under the contract against the background of a refund guarantee issued by a Chinese bank.

A dispute arose between NTS and OTP regarding the delivery of the vessel, and OTP purported to exercise its right to cancel the contract by reason of delay in delivery. NTS sought to dispute OTP’s entitlement to cancel the contract and refused to repay the instalments. OTP contended that NTS’ claim should have been made by bringing arbitration proceedings within a 30-day period pursuant to article X of the shipbuilding contract. Article X stated: “The seller shall have the right to dispute the buyer’s cancellation and/or rescission by instituting arbitration in accordance with article XIII, if such institution of arbitration is made within 30 days of the buyer’s cancellation and/or rescission”. NTS alleged, however, that a failure to bring arbitration proceedings within that period did not bar its right to dispute the cancellation but merely barred the remedy to be obtained by way of an arbitral award. NTS also maintained the arbitral tribunal, whose appointment it instigated, lacked jurisdiction to determine the legitimacy of OTP’s cancellation given its own failure to commence arbitration within 30 days. It challenged the jurisdiction of the tribunal under section 67 of the Arbitration Act 1996 and, in the alternative, sought permission to appeal against awards made by that tribunal under section 69.

○ WHAT IT MEANS

Time limits are “claim-barring” rather than “remedy-barring” ○ THE JUDGEMENT

The court held that a contractual time limit for instituting arbitration may raise some difficulties. In determining whether failure to comply with the time limit bars either the right or the remedy, the court referred to Mustill and Boyd’s The Law and Practice of Commercial Arbitration, second edition, which states: “The Court will lean in favour of construing them as ‘claim-barring’ rather than ‘remedy-barring’ ”. The court refused NTS’ application under section 67 and denied leave to appeal under section 69.

This case provides guidance on the meaning and effect of a contractual time limit for instituting arbitration.

While the court indicated that the absence of expressly barring words is not conclusive, it appears English courts will adopt the guidance in Mustill and Boyd that such time limits are “claim-barring” rather than “remedy-barring” – preferring the views of McNair J in Metalimex Foreign Trade Corp v Eugenie Maritime Ltd [1962] 1 Lloyd’s Rep. 378, to Roche J in Pinnock Bros v Lewis and Peat Ltd [1923] 1 K.B. 690.

Report by Tony Marks, MCIArb Director of Legal Services and Julio César Betancourt MCIArb, Head of Research and Academic Affairs at CIArb. Full judgement available at:

→ www.bailii.org/ew/cases/EWHC/ Comm/2011/164.html

SHAREHOLDERS’ UNFAIR PREJUDICE DISPUTES MAY BE ARBITRATED

THE CASE ○ ARBITRATION

Fulham Football Club v Sir David Richards [2010] EWHC 3111 (Ch)

FULHAM FC was competing with Tottenham Hotspur FC to secure the transfer of Peter Crouch from Portsmouth FC. Fulham alleged that Sir David Richards, the chairman of the FA Premier League, interfered in the transfer negotiations and took action to facilitate the player’s move to Tottenham – in preference to a bid put forward by Fulham – thereby breaching the League’s articles of association and rules. Fulham sought to bring the matter before the courts by way of an unfair prejudice petition under Section 994 of the Companies Act 2006.

The club argued that Richards and the Premier League (as a result of its failure to take adequate action to prevent Richards’ conduct) had acted unfairly towards its members by promoting the interests of one club over another. Fulham sought an injunction to restrain Richards from participating in future transfer negotiations and an order that he cease being the chairman or a director of the Premier League. Richards and the Premier League applied for a stay of the unfair prejudice petition under section 9 of the Arbitration Act 1996 on the grounds that the issues raised in the petition fell within the scope of the arbitration agreements contained in the rules of the Football Association and the Premier League’s rules, respectively. The court was required to weigh two directly conflicting decisions, namely Re Vocam Europe Limited [1998] BCC 396 and Exeter City v Football Conference [2004] 1 WLR 2010, which ignored the earlier decision in Vocam and concluded that the right to bring an unfair prejudice petition before the courts cannot be altered or removed by contract.

○ WHAT IT MEANS

Parties should be free to agree how their disputes are resolved ○ THE JUDGEMENT

The court held Exeter had been wrongly decided and the decision in Vocam should be followed. In Vocam the court granted a stay of an unfair prejudice petition on the basis it related to matters of dispute which were covered by an arbitration clause contained in a shareholders’ agreement entered into between the parties. It was decided the disputes raised in the petition fell within the scope of the arbitration agreements, and therefore the stay of the court action in favour of the arbitration agreement was granted.

This decision confirms the position that disputes which would otherwise be raised through an unfair prejudice petition before the courts can be referred to arbitration.

It also reflects the pro-arbitration stance of the English courts by recognising that parties should be free to agree how their disputes are resolved. However, parties seeking to rely on arbitration agreements contained in shareholders’ agreements should not assume the court will grant a stay of an unfair prejudice petition in all situations.

Report by Chris Parker, Partner, dispute resolution and Ben Jolley, Associate, international arbitration group at Herbert Smith LLP. The full article is available at:

→ www.herbertsmith.com

May 2011 | THERESOLVER

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ADR IN CONSTRUCTION THE FINANCIAL CRISIS Demand for construction fell through the floor during the recession. But has the trend been the same for ADR in the sector?

Building back up

By Greg Bousfield Illustration: Brett Ryder

DEMAND FOR dispute resolution in construction is generally counter-cyclical. It is widely accepted that when contracts become scarcer, companies attempt to recover losses that they might have previously merely regarded as a business cost.

That may be true for normal fluctuations in the business cycle. It seems to have applied at the beginning of the deep global financial crisis (GFC) we are currently living through. But in the protracted collapsed bubble of the UK construction sector, demand for adjudication has unexpectedly declined (see graph on page 12).

Statutory adjudication (under the Housing Grants, Construction and Regeneration Act 1996, amended 2009) is the construction industry’s most popular and successful ADR tool used mainly to maintain cash flow. Not only are adjudication decisions statute-backed but the 10

process is quick and relatively cheap.

Adjudication aimed at achieving a quick interim decision, which was to be fully resolved in subsequent arbitration or litigation. However, few decisions are taken further – another reason for satisfaction with adjudication.

Yet with trading conditions as they are, more recourse has been made to cheaper ADR methods such as mediation, not least because the cost of adjudication is growing. Litigation, sought out more frequently, has also often been settled with mediation or just simple negotiation.

The media is now using mild terms for the GFC like “downturn”. But that description is far removed from what has happened to construction over the period, as the UK Office for National Statistics (ONS) figures show.

In contrast to new private housing construction orders in the years 2005-7, which averaged £3.75 billion annually, during 2009 orders caved in to £1.2 billion and have now recovered slightly to hover around the £1.5 billion mark.

In construction itself the result has been a slide in project approvals, and a rise in cancellations

Private non-housing excluding infrastructure orders (private commercial) peaked in 2006 and again in 2008 at more than £8 billion annually.

This figure roughly halved in 2009 and has only been making a very cautious recovery. Private industrial orders also approximately halved from an average of about £1.8 billion immediately prior to the crisis.

Public and private infrastructure orders initially held up far better, but are now sliding.

Changes to government planning policies and general government cutbacks seem certain to add to that in the future.

The situation for private housing and private commercial sectors improved slightly in 2010.

But the Council of Mortgage Lenders says funding conditions will remain challenging.

With large sums of borrowing under state schemes such as the Syndicated Loan Scheme due to be repaid from April this year there is little prospect of any mid-term turnaround.

Building company insolvencies appear to have peaked in 2009, although they are still rising in Scotland which entered the crisis later than in England and Wales. Business services employment has been amongst the hardest hit across the board which, of course, includes construction-associated industries and dispute resolution professionals.

In construction itself the result has been a slide in project approvals and a rise in cancellations, delays and scope-backs.

The upshot for adjudication is that referrals have stalled (aside from a peak early in the crisis) more quickly than the contraction in construction workload, according to

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The upshot for adjudication is that referrals have stalled (aside from a peak early in the crisis) more quickly than the contraction in construction workload

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ADR IN CONSTRUCTION THE FINANCIAL CRISIS research from the Glasgow Caledonian University Adjudication Reporting Centre (GCUARC). This corresponds with practitioners’ experience.

“The industry was certainly expecting a big jump in adjudications but that hasn’t eventuated,” says adjudicator Chris Dancaster FCIArb. As well as direct financing problems, “firms may also simply be too busy trying to get work or may have laid off the support staff that normally deal with claims,” he says.

Those who are still working may not be motivated to claim. Practitioners paint a picture of a money-strapped industry trying not to make waves and upset precarious cash flows. The costs and risks of adjudication itself also play a role in reluctance to claim.

Parties may hold off as long as possible, says Nigel Grout FCIArb, an arbitrator, adjudicator and quantity surveyor in civil infrastructure construction. “Perhaps some people are just choosing to go to adjudication only on disputes that have, to some extent, run their course,” he says.

Underbidding has clearly significantly increased and it was thought that this should also generate disputes as contractors attempt to claw back margins through variation claims.

This has apparently been counteracted by fears of losing future work and the fear of an adjudication going the wrong way. Contractors may simply be settling for continued cash flow.

“I think underbidding happens more with smaller, unsophisticated employers who use a contractor for a one-off job. In these circumstances they may put in big variation claims,” says engineering and construction disputes specialist Dr Robert Gaitskell QC

Demand for mediation in construction has increased during the GFC, although to what extent is difficult to assess FCIArb, a barrister practising from Keating Chambers. “But often adjudicators will refuse these claims, leaving the contractor in dire straits because he doesn’t have the funds he needs.”

It’s not surprising then that practitioners say they are having more trouble getting fees from clients since the GFC started.

Has the flat demand for adjudication been to the gain of other resolution tools aside from simple negotiation?

Demand for mediation services in construction has reportedly increased during the GFC, although to what extent is difficult to assess.

The dispute-prone sector is not particularly mediation friendly, not least because parties perceive adjudication to be quicker and more final. Amid difficult trading conditions parties

Number of adjudication referrals each year from 1998 2500

SOURCE: GLASGOW CALEDONIAN UNIVERSITY ADJUDICATION REPORTING CENTRE

2000

1500

1000

500

0 Year 1 Year 2 199919982000 1999

Year 3 Year 4 Year 5 Year 6 2000- 2001- 2002- 20032001 2002 2003 2004

Year 7 20042005

TIME PERIODS RUN FROM MAY-APRIL

12

Year 8 Year 9 Year 10 Year 11 Year 12 2005- 2006- 2007- 2008- 20092010 2006 2007 2008 2009

are also likely to come to dispute resolution with hardened positions and not the willingness to compromise required for mediation. Mediators see that as a professional challenge.

“Demand for mediation is limited in the construction industry,” Grout says. “It’s rarely written into contracts. Adjudication is the process everyone is aware of and likes. On the other hand, people will get exposed to mediation because it is actively encouraged by the courts, so it could become more popular in construction.”

As well as most areas of civil law, a pre-action protocol applies to parties seeking to litigate in the UK’s specialist construction court, the Technology and Construction Court (TCC). But in the absence of comprehensive data it is not yet clear whether the GFC has encouraged greater use of mediation in resolving the higher number of applications received during the last two years.

However, mediation may also be discouraged by the absence of a pre-action protocol for statutory adjudication. Steve Bond FCIArb, European Chair of Covington & Burling’s Arbitration Practice Group says the process may be easier to broach if required by legislation.

“The biggest obstacle to mediation is that no-one wants to be the first to propose it because they see it as a sign of weakness,” he says. “So having it as an option as a pre-trial requirement in the UK and some other countries is a very good idea.”

As the project size grows, mediation seems to become more acceptable. Practitioners argue mediation might have a major advantage in the GFC because it allows for flexible settlement.

Less is known about how often agreements might later fall apart.

“In Dubai, for example, parties who are often big UK contractors have been initiating mediation in disputes where pushing too hard will just send the other side into bankruptcy,” Gaitskell says. “So it’s actually better to take a mediated deal to get the money in a few years time.”

As mediation expands internationally, cultural expectations can significantly affect how it is approached. It may lend itself particularly well to situations where both sides want to save face, if not future business relations.

“Arbitration and courts don’t really work that well in Dubai. It’s hard to get the money even if you win,” says Nicholas Gould FCIArb, partner at specialist construction law firm Fenwick Elliott and Chairman of CIArb’s Adjudication Sub-Committee. “It’s much better to have dialogue, and mediation is suitable for that. But you need to take longer and talk things through

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so everyone has the situation straight in their minds. In the UK we are more concerned with pinning things down on paper. Hopefully mediation will take off in Dubai and be more successful than the formal methods.”

“In the UK you can generally wrap up a mediation in a day,” Gaitskell says. “In China or Taiwan, if you arbitrate, you could lose and also lose face. There you need a week for mediation.

You have to build consensus from scratch. You have to look at every issue from various sides until you have covered the whole ground. But although it takes longer, you get the same sort of success rates as mediation elsewhere.”

Bond notes that while multi-tiered dispute resolution clauses in contracts make sense, mediation is a very long way from being standard in international contracts which still overwhelmingly give preference to arbitration.

“Mediation can contribute to a prompt resolution of the dispute but it doesn’t always arrive at the desired result. However, it’s good to have a menu of options and increasingly people are expressing interest in mediation because they don’t want to go to a fully-fledged arbitration.”

Grout points out that the UK construction industry was also fairly chary about adjudication when it first appeared as a replacement for arbitration. “Writing mediation into contracts would obviously give the industry a push in that direction.”

A popular ADR method also making a fairly recent debut on the UK construction scene are dispute boards. A dispute board is “typically a group of professionals appointed by the parties to a construction project, often a civil engineering contract, process plant or major infrastructure project,” according to John Wright FCIArb, Joint Head of the Construction and Engineering group at Bird & Bird LLP. Dispute boards exist in one of two forms: a dispute review board (DRB) or a dispute adjudication board, (DAB) the main difference being that DRBs give recommendations whereas DABs make interim binding decisions.

Standing dispute boards are more expensive – three or four industry specialists are appointed on a retainer and visit regularly to detect and resolve conflicts before they become disputes. The fact the group is appointed for the entire duration of a project is what makes it more costly. Ad hoc dispute boards however are appointed only once a dispute arises. DRBs, much more prevalent in the US, according to

Wright, were first used in the US in the 70s. The first use outside of the US was in the 1980s for World Bank-funded development contracts.

DRBs are expensive compared with other ADR processes but they are increasingly run on smaller projects in the US with only one board member.

“Dispute boards are now fairly standard in any large long-term construction project,” Bond says.

“DRBs were used extensively in the Channel Tunnel project and were very successful in resolving almost all disputes before they got to arbitration. The World Bank model provides for dispute review boards, they have proven to be very useful, perhaps expensive, but worthwhile in terms of avoiding more costly arbitration.”

Gaitskell believes long-term presence of DRBs as part of a project may dampen down spurious conflicts and claims arising in recessionary periods. Practitioners do however report a jump in preference for ad hoc boards.

“With people wanting to get their money quickly and cheaply, we’ve seen an increase in ad hoc adjudications by about 25 per cent,” Gaitskell says. Grout comments that while the process may be more popular at the moment, it is still a distinct second best to the Construction Act variant. “This is the cheaper version of adjudication. It doesn’t have the court backed guarantees attached to statutory adjudication. For that reason I don’t think it will take off,” he says.

Although arbitration has increased for larger international disputes, adjudication has superceded domestic construction arbitration in the UK. The LCIA, for example, reports that its case load increased 87 per cent in 2008/2009 over the previous 24-month period but the great bulk of this was made up of international arbitration. Streamlined processes such as the Society of Construction Arbitrators’ 100-day arbitration procedure are reportedly finding little use.

The GFC has driven demand for cheaper ADR processes and served to more acutely highlight the pros and cons of all the

options. However the position of adjudication as the dominant form of dispute resolution in the construction sector is not set to change in the foreseeable future. The GFC has been something of a judgement on the rising costs of adjudication, but it still remains relatively inexpensive, quick and, of course, enforceable compared with some alternatives.

Will the number of disputes start to rise again as liquidity returns? One change that may trigger an increase in disputes is the inclusion of sustainability clauses in construction contracts in the UK as the government tries to hit targets to address climate change. Although experts are divided on how much ADR activity this might lead to. “Disputes might occur as to whether a contractor has sourced a particular contract from a sustainable source, but I don’t see it as a big growth area ,” says Jonathan M Cope FCIArb, director of construction dispute resolution service provider MCMS. It may not be the next big thing but it will certainly be an area to watch.

Greg Bousfield is a freelance legal journalist THERESOLVER

May 2011 | THERESOLVER

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HOW TO…

…deal with insolvency and arbitration

By Sarah Walker and Chris Stone Illustration: Cameron Law In 2008, the catastrophic effect of the credit crunch spread to most world economies. As in previous recessions, insolvency has affected rising numbers of individuals and companies, and parties to agreements to arbitrate are increasingly likely to find themselves dealing with insolvent companies. What are the issues to bear in mind?

P Sarah Walker MCIArb is a Partner and Chris Stone an Associate in Bird & Bird’s International Arbitration Group, in London

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1⁄

Prior insolvency

Different legal systems characterise insolvency as being either territorial (relating only to assets located in the jurisdiction where the insolvency proceedings take place) or universal (involving assets anywhere in the world). With a territorial insolvency, it may still be possible to commence arbitration proceedings where there are assets outside of the jurisdiction of the insolvency.

However, where an insolvent party’s assets are located in the same jurisdiction as the arbitration proceedings, there is a danger of an anti-arbitration injunction being imposed by the domestic court.

2⁄

Powers of the administrator

Where a potential respondent is in administration (but prior to liquidation) national legislation frequently provides that the administrator has the power to decide if that respondent can be a party to arbitration. However, since international arbitration is independent of national courts, it may still be possible to enforce an arbitration agreement even without the administrator’s consent. This is particularly the case if the seat of arbitration is different to the insolvency jurisdiction.

3⁄

Subsequent insolvency

tribunal all the measures taken to contact the respondent.

Where insolvency proceedings are commenced during the course of arbitration proceedings, most jurisdictions provide for the stay of ongoing proceedings; however, national courts differ as to whether international arbitration falls within the definition of ‘proceedings’. It may be in a claimant’s interests to appear before the insolvency court and try to obtain permission to proceed with the arbitration. In any event, arbitrators are not necessarily bound by court orders, particularly when the seat of the arbitration is outside the jurisdiction of the insolvency. In some cases, a tribunal may continue with an arbitration even if the national court dealing with the respondent’s insolvency has ordered a stay.

An insolvent party will often make no payment towards the costs of the arbitration, leaving the claimant to make substitute payments and bear all the expenses of the case. Any such payment is unlikely to be recoverable prior to the tribunal rendering an award.

4⁄

7⁄

Serving respondents

Claimants must take particular care to ensure an insolvent respondent is properly served with proceedings, and also serve the proceedings on any administrator. Where an insolvent respondent does not participate in the proceedings, the claimant should be ready to explain to the

5⁄

Security

6⁄

Costs

While some arbitration rules enable tribunals to order that a respondent provides security for all or part of the amount in dispute, a tribunal may well refuse to order security in the case of an insolvent respondent, since this would put the claimant on an unequal footing with the respondent’s other creditors.

Conflicts of interest

The claimant should check whether there is any potential conflict of interest between the arbitrators and the administrators.

Such situations may disqualify an arbitrator from further involvement in the proceedings, and it may be necessary to replace an arbitrator or continue with a truncated tribunal.

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16th

November - CIArb Alexander Lecture will be held. The speaker will be The Right Hon The Lord Phillips of Worth Matravers, PC, President of The Supreme Court and CIArb’s new Patron (see also story below).

To register your interest email events@ciarb.org

CIArb NEWS

Lord Phillips to be Patron

From left: Leslie Alekel ACIArb and Michael Forbes Smith MCIArb sign a contract with Clive Lewis and Jack Fallow from Globis Mediation Group

Workplace mediation training launched CIArb has introduced new workplace mediation training, offering courses for the complete beginner to the more experienced practitioner.

A range of courses culminating in accreditation in workplace mediation are now available, from one-day introductory courses to five-day courses that will equip delegates with the skills to be an accredited and competent workplace mediator.

A three-day conversion course is also aimed at civil/commercial mediators looking to add workplace and employment mediation to their portfolio.

CIArb has appointed Globis Mediation Group as its workplace mediation training partner. Managing Director and Founder Clive Lewis ACIArb, will be leading the training. He has been a workplace mediator for eight years and is the author of The Definitive Guide to Workplace Mediation and the recently published Resolving Workplace Conflict: 12 Stories. Candidates will learn both the theory and practice of workplace mediation. To find out more go to → www.ciarb.org/education-and-training/course-finder/

Competition for writers A student writing competition has been organised in conjunction with the annual symposium convened by the Center for the Study of Dispute Resolution at the University of Missouri School of Law. The competition is being sponsored by CIArb’s North American Branch and offers a $300 prize to the competition winner, who may also see their winning submission published in CIArb’s Journal, together with other symposium papers. Further information on criteria for submissions can be found at → www.law.missouri.edu/csdr/symposium/2011/writing.html This year’s symposium held by the University of Missouri School of Law, will be held on 21 October. It is entitled, ‘Border Skirmishes: The Intersection Between Litigation and International Commercial Arbitration.’ and will feature Gary Born as keynote speaker as well as expert panellists from Canada, Austria, Switzerland and the United States. An associated works-in-progress conference for academics and scholarly-minded practitioners is scheduled for 20 October. → www.law.missouri.edu/csdr/symposium/2011

CIArb is delighted to announce that The Right Hon The Lord Phillips of Worth Matravers, PC and President of The Supreme Court has accepted an invitation to become CIArb’s Patron.

This is the Institute’s most senior ambassadorial position which is carefully chosen and appointed by the Institute’s Board of Trustees.

Lord Phillips takes over from Prof Dr Karl-Heinz Böckstiegel. He is the first President of The Supreme Court, having been Senior Law Lord from 1 October 2008. He was previously the Lord Chief Justice of England and Wales.

He began his second stint as Lord of Appeal in Ordinary in October 2008. Before that Lord Phillips served as a Judge of the High Court of Justice, Queen’s Bench Division from 1987 to 1995, where he sat in the Commercial Court and presided over the Barlow Clowes and Maxwell prosecutions.

He was promoted to the Court of Appeal in 1995 and elevated to Lord of Appeal in Ordinary on 12 January

Lord Phillips will serve for three years

1999, then appointed Master of the Rolls and Head of Civil Justice on 6 June 2000, a post he held until 2005.

Lord Phillips will serve as Patron at CIArb for the next three years.

CIArb Director General Michael Forbes Smith MCIArb said: “We are delighted that The Rt Hon The Lord Phillips of Worth Matravers, PC President of the Supreme Court, has done the Institute the signal honour of agreeing to become our Patron. His acceptance adds lustre to the distinguished line of patrons, Mrs Anson Chan and Professor Dr Karl-Heinz Böckstiegel, since the 2005 Royal Charter’s introduction.”

Course hailed as a success CIArb’s delivery of the Introduction to International Arbitration course in Bahrain last year has proved successful – with a pass rate of 82 per cent.

The training, which was run at the request of the Bahrain Chamber of Dispute Resolution (BCDR-AAA), took place throughout October and November 2010. Seventy-three candidates submitted an assignment, with 60 passing the course and becoming Associate members.

The course was first run in 2009 and is delivered entirely in Arabic.

Anita Phillips ACIArb Education and Training Manager at CIArb, said: “International courses are very important to us, providing an opportunity to offer the benefits of Associate membership worldwide.”

ONLINE

There’s still time to sign up for CIArb’s Asia Pacific Conference 2011: ‘Investment and Innovation in International Dispute Resolution,’ which takes place in Sydney 27-28 May. The two-day forum will consider challenges and opportunities for international dispute resolution practices driven by reform and regional investment. For more about the conference programme and speakers, as well as early-bird booking until 30 April visit → www.ciarb.org/conferences/asia-pacific/ May 2011 | THERESOLVER

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CIArb NEWS BRANCH ROUND-UP INDIA

NORTH WEST, UK

President praises India Branch CIArb’s President, Doug Jones AM FCIArb was welcomed by the Indian Branch in February.

Chairman Lalit Bhasin FCIArb and Honorary Secretary Chandrakant Kamdar FCIArb organised a series of events including meeting with the branch’s board and other members to discuss branch activities and ways of enhancing CIArb’s influence in India.

Although the branch has good links with the ADR community it is looking to expand its geographic reach in India by, for example, including members on its board from other parts of the country, currently not represented.

Opportunities for co-operation between the Indian Branch and other branches, for example Dubai, Singapore and Australian Branches, in the training of arbitrators and mediators in India was also explored with the President.

On 9 February, Doug Jones, Lalit Bhasin and Chandrakant Kamdar visited the Amity Law School and addressed more than 300 students and staff on the role of CIArb and

NORTH AMERICA

US visits Several North American Chapters welcomed visits from CIArb’s President Doug Jones. During his visit to Washington DC, Doug spoke at Georgetown University Law Center on the role of party-appointed experts in international arbitration and then met with the Investment Claims Team of the Office of International Claims and Investment Disputes of the US Department of State.

In New York, he attended a dinner hosted by the New York Chapter. Doug also attended a dinner hosted by the Texas Chapter in Houston, 16

A busy year The North West Branch enjoyed an active year in 2010. Events included presentations; the annual NW Branch Arbitrators’ and Adjudicators’ Surgery and also a mediation surgery which looks likely to be a regular feature.

A mock trial in conjunction with the CIOB was also held. Three dinners were organised – thanks go to the Dinner Chairman, Peter Dale FCIArb. Chairman Ian Williams FCIArb has been active in new membership initiatives. Honorary Secretary Michael Conway FCIArb will be standing down at the 2011 AGM, due to other commitments.

SCOTLAND, UK

President Doug Jones with India Branch which is playing a key role in ADR reform

Professions unite

aspects of international commercial arbitration. In the evening a reception was organised by the India Branch, attended by eminent representatives of the legal profession and business leaders.

The President’s visit also included a meeting with other Indian ADR organisations including LCIA India and the International Centre for Alternative Dispute

Resolution to further the links between the Indian Branch and Indian ADR organisations.

Doug Jones said it was clear from discussions with the branch, Indian lawyers, in-house counsel and representatives of commerce that there is a real need for reform of dispute resolution in India and that the India Branch is playing an important role in furthering this objective.

The Scottish Branch was one of 15 professional bodies that worked together to hold a networking event in February in Edinburgh. Thanks go to colleagues from the Law Society of Scotland, Chartered Institute of Bankers in Scotland, and the Institute of Chartered Accountants in England and Wales.

Nearly 200 delegates heard Hamish Taylor of the Skills Exchange Network give a lively presentation.

where he, Ben Sheppard MCIArb, Chairman of the Texas Chapter, Jim Lawrence MCIArb, Head of the Blakely Advocacy Institute at the University of Houston Law Center and Ann Ryan Robertson FCIArb, Chair of the North American Branch discussed the NAFTA Moot that will take place this fall.

The following day, Doug addressed a joint meeting of the Texas Chapter and the Houston International Arbitration Club.

During his visit to the Southeast Chapter, Doug addressed the Miami International Arbitration Society. Individual NAB Chapters have been preparing for the Vis and other moots.

EAST ASIA

of the ADR unit of Shin & Kim, in conducting a one-day Introduction to Arbitration course. Those who successfully complete the postcourse assignment will be eligible to join the institute as Associates.

In January, the East Asia Branch Young Members Group visited the Dialogue in the Dark Exhibition Centre in Mei Foo to experience a journey of ‘living in the dark’ . The exhibition’s goal is to build bridges between people with and without disabilities and to turn sympathy into respect. It included a tour in complete darkness, being guided by VIPs – visually-impaired persons.

Korean course In February the Institute joined forces with the Korean Commercial Arbitration Board and the Korean Council for International Arbitration to stage Seoul’s first Specialist in International Arbitration course.

During the first five days of the course, local experts met with nearly 100 law students and lawyers to contribute 20 two-hour classes, in Korean and English, covering international arbitration procedure and law. On the sixth day, Louise Barrington FCIArb and Christopher To FCIArb joined Benjamin Hughes MCIArb, co-chair

For longer versions of branch news → www.ciarb.org/branch-news

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IN PRACTICE Follow CIArb and take part in the debate at: twitter.com/Ciarb facebook.com

MY TOUGHEST DISPUTE UK

linkedin.com www.ciarb.org/forum

BEST OF THE

Neville Tait

ADR BLOGS 1⁄

Claims, counterclaims and the comings and goings of solicitors led to this construction dispute becoming a real challenge

ADR should be outside legal systems

FCIArb, Principal of JN Tait Associates, specialist in construction disputes

Christopher Whitelaw

Recent reforms in Victoria and New South Wales in Australia place more emphasis on early ADR. They require the parties and their lawyers to confirm certain things have happened using ADR before the courts will allow them to progress further down the litigation track.

In the current debate about access to justice and the cost, ADR is mostly considered a mere component in the ‘legal system’ that exists to dispense ‘justice’ in civil and commercial disputes. This confines ADR to being considered in the legal paradigm of access to justice. But the best potential for ADR in civil disputes lies in using it outside the legal system.

The debate should, in my view, be considering how to harness the power of ADR before any access to justice via the judiciary or tribunals.

Then many of the problems around access to justice would disappear.

To see full blog ADR and Access to Justice Part 2, 13 March 2011, visit → http://www.chriswhitelaw.com.au/blog/

Christopher Whitelaw is a barrister and commercial disputes resolver in Sydney

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When should arbitrators mediate?

Justin D’Agostino

Should arbitrators be permitted to serve as mediators of the disputes they might ultimately determine? To those from common law traditions, the idea of combining the roles is rather alien, whereas in civil law jurisdictions, this is a relatively well accepted practice.

There are certain advantages to arbitrators facilitating the settlement of their disputes, such as the efficiency of disposing of disputes amicably.

Since arbitrators will be familiar with the case, they should be equipped with the sensitivity required to settle the matters in dispute. Balanced against this are a number of potential drawbacks to med-arb/arb-med.

There is a (certainly perceived) risk that overseeing a mediation may threaten an arbitrator’s impartiality.

To see full blog Mediator-arbitrators: the perfect match or no love lost?, 15 February 2011, visit → http://kluwerarbitrationblog.com/

Justin D’Agostino is Partner, Dispute Resolution at Herbert Smith LLP in Hong Kong

3⁄

Mediation’s golden era is now ConstructPRO UK

The UK government has announced the closure of more than 150 courts to save £15 million a year in upkeep. But as more companies face disputes, what alternative do they have to legal action?

The answer is mediation. Ireland recently estimated that it could save €200 million of public money on legal costs by employing mediation instead of litigation. Kenneth Clarke, the UK Justice Secretary, has said that ADR has a role to play in the future of the justice system. So, is mediation the new black? Has the time come for mediation to step up? I believe there has never been a better time for mediation to shine.

To see full blog Mediation is the New Black, February 2011, visit → http://www.constructpro.com/blog

ConstructPRO UK LLP is a UK-based construction and property solutions provider

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THERESOLVER | November 2010

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IT STARTED OFF so well as an solicitor, who was replaced by a appointment by agreement in a non-legal representative and then construction arbitration. Three by another solicitor. By July, the years, 79 letters, two security claimant was in administration and for costs applications, 15 orders so entered solicitor number four. for directions, four changes of I was asked to return all files to solicitor by the claimant, a this solicitor so they could review twice-postponed hearing and and re-submit the statement of case. a mediation later, I issued an It was not until May of year three agreed award dismissing the that I was able to issue directions claim and counterclaim. including a hearing for October.

Could I have prevented this?

Just days before the hearing, Judge for yourselves. I was the claimant applied for an appointed in March of year one adjournment on the grounds they and set out a timetable with a were not ready, since the parties hearing provisionally fixed for had agreed to suspend preparation January of year two. The claimant in order to hold a mediation which, was subject to a company ultimately, was unsuccessful. The voluntary agreement and, respondent denied that this unsurprisingly, the respondent agreement existed. I adjourned made an the hearing application for and heard security for submissions

By July, the claimant as to which costs against was in administration party should the claimant. and the administrator be responsible In July, appointed solicitor for the wasted I ordered the number four claimant to costs. By this provide security time, the for the period claimant had up to the close of pleadings and appointed solicitor number five. amended the timetable so the In November, I issued directions respondent was not required to requiring the claimant to pay the serve their defence until a fixed wasted costs and fixed a hearing period following the provision of date for May of year four. In March, the security. The security was not the parties advised me they had provided on time but, mindful of reached a settlement on a ‘walk the claimant’s financial position, away’ basis and I issued a final I granted further time followed by agreed award dismissing the a peremptory order which was not claim and counterclaim. complied with. A second order Throughout I had felt that the granted a short extension on claimant’s case had some merit condition the claimant paid for the and did my best to keep the costs wasted to date. The security arbitration alive. With hindsight, it was provided in February of year would probably have been to the two, so I issued an award dealing claimant’s financial benefit if I had with the wasted costs. By now, dismissed the claim in year one for the claimant had instructed a new failure to provide security for costs.

May 2011 | THERESOLVER

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WHAT’S ON

ONLINE

Further information on all professional training courses can be found at: → www.ciarb.org/course-finder Education Team • T + 44 (0)20 7421 7439 • F + 44 (0)20 7404 4023 • E education@ciarb.org KEY: ARBITRATION ADJUDICATION MEDIATION INTERNATIONAL ARBITRATION COMMERCIAL DISPUTE RESOLUTION

TRAINING CIArb professional training diary – May 2011–October 2011

2011 MAY 11th ARBITRATION Introduction This course provides candidates with an understanding of the general principles of arbitration.

Duration: 1 day Fee: £499 + VAT Location: Birmingham 12th INTERNATIONAL ARBITRATION Introduction Provides an understanding of the principles of international arbitration.

Duration: 1 day Fee: £499 + VAT Location: Birmingham 17th MEDIATION Module 1 – Workplace mediation Aimed at candidates who wish to become a CIArb Accredited Workplace Mediator.

Duration: 5 days Fee: £2,595 + VAT Location: London 23th MEDIATION Accreditation course This assessment programme is organised by the European branch of CIArb and provided by CIArb's mediation training provider, Facilit8.

It is aimed at candidates who wish to become both a CIArb Member and a CIArb Accredited Mediator, and who want to represent clients in mediation.

Duration: 5 days May, 3 days June Fee: €2,500 (£2,183), €1,500 (£1,309) Location: Geneva 28th INTERNATIONAL ARBITRATION Module 1 – Law of obligations and civil evidence Provides candidates with a robust understanding and appreciation of the key, relevant aspects of the local jurisdiction's legal system.

Duration: 7 months Fee: €1500 + VAT Location: Geneva 31st MEDIATION Module 2 – Workplace mediation accreditation assessment An assessment programme aimed at candidates who wish to become a CIArb Member and CIArb Accredited Mediator.

It is aimed at those seeking to add workplace mediation to their skills portfolio.

Duration: 1 day Fee: £1,295 + VAT Location: London JUNE 13th ARBITRATION Module 4 –Award writing Provides sufficient knowledge of and practice in all the requirements for the writing of a final, reasoned and enforceable arbitration award in a commercial dispute.

Duration: 4 months Fee: £999 + VAT Location: London

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13th INTERNATIONAL ARBITRATION Module 4 – Award writing Provides sufficient knowledge of and practice in all the requirements for the writing of a final, reasoned and enforceable arbitration award in a commercial dispute.

Duration: 4 months Fee: £999 + VAT Location: London 29th & 30th ARBITRATION Accelerated route to Fellowship Provides a fast-track route to Fellowship through the domestic arbitration pathway.

Duration: 2 days Fee: £1549 + VAT Location: London 29th & 30th INTERNATIONAL ARBITRATION Accelerated route to Fellowship Provides a fast-track route to Fellowship through the international arbitration pathway.

Duration: 2 days Fee: £1549 + VAT Location: London JULY 6th & 7th ARBITRATION Accelerated route to Membership A fast-track route to Membership through the domestic arbitration pathway.

Duration: 1.5 days Fee: £999 + VAT Location: London 24th INTERNATIONAL ARBITRATION Module 4 –Award writing Duration: 4 months Fee: Dhs 10,000 Location: UAE SEPTEMBER 10th-18th INTERNATIONAL ARBITRATION Diploma in International Commercial Arbitration Provides a thorough understanding of the practice and procedure of international commercial arbitration and award writing.

Duration: 9 days Fee: £5998 + VAT Location: Oxford 21st ARBITRATION Introduction Duration: 1 day Fee: £499 + VAT Location: Manchester 22nd INTERNATIONAL ARBITRATION Introduction Duration: 1 day Fee: £499 + VAT Location: Manchester OCTOBER 4th MEDIATION Introduction Provides candidates with an understanding of the general principles of mediation.

Duration: 1 day Fee: £499 + VAT Location: London

5th ADJUDICATION Introduction Provides candidates with an understanding of the general principles of adjudication.

Duration: 1 day Fee: £499 + VAT Location: London 5th-7th MEDIATION Workplace mediation conversion course Provides an understanding of the theory of mediation in the workplace.

Duration: 3 days Fee: £1395 + VAT Location: London 10th ARBITRATION Module 1 - Law of obligations and civil evidence Provides candidates with a robust understanding and appreciation of the key, relevant aspects of the local jurisdiction's legal system and approach to obligations and evidence that influence, shape or otherwise have a bearing on how disputes may be treated and resolved according to law.

Duration: 7 months Fee: £1549 + VAT Location: London 10th INTERNATIONAL ARBITRATION Module 1 - Law of obligations and civil evidence Provides a robust understanding and appreciation of the key, relevant aspects of the legal system.

Duration: 7 months Fee: £1549 + VAT Location: London 10th ADJUDICATION Module 1 – Law of obligations and civil evidence Provides a robust understanding of the key, relevant aspects of the legal system.

Duration: 7 months Fee: £1549 + VAT Location: London 10th ARBITRATION Module 2 Provides candidates with a detailed knowledge and understanding of the law of arbitration.

Duration: 5 months Fee: £999 + VAT Location: London 10th ADJUDICATION Module 2 Provide candidates with a detailed knowledge and understanding of the legal and procedural principles involved in statutory adjudication.

Duration: 5 months Fee: £999 + VAT Location: London 10th ARBITRATION Module 3 To provide detailed knowledge of and guided practice in the main procedural elements involved in a commercial arbitration, so that

successful candidates are proficient in giving independent advice.

Duration: 6 months Fee: £1549 + VAT Location: London 10th INTERNATIONAL ARBITRATION Module 3 To provide detailed knowledge of and guided practice in the main procedural elements involved in a commercial arbitration.

Duration: 6 months Fee: £1549 + VAT Location: London 10th MEDIATION Module 3 To ensure candidates have sufficient knowledge of the relevant legal system and mediator-related laws to comprehend the context of the dispute.

Duration: 6 months Fee: £1549 + VAT Location: London 10th ADJUDICATION Module 3 To provide detailed knowledge of the main procedural elements of statutory and contractual adjudication.

Duration: 6 months Fee: £1549 + VAT Location: London 18th-20th ADJUDICATION Accelerated route to Fellowship To provide a fast-track route to Fellowship through the adjudication pathway.

Duration: 3 days Fee: £1549 + VAT Location: London 21-23rd INTERNATIONAL ARBITRATION Accelerated route to Membership Accelerated route to Fellowship Duration: 2.5 days Fees: to be advised Location: Montreal, Canada 31st ARBITRATION Module 4 - Award writing Duration: 4 months Fee: £999 + VAT Location: London 31st INTERNATIONAL ARBITRATION Module 4 –Award writing Duration: 4 months Fee: £999 + VAT Location: London 31st ADJUDICATION Module 4 - Decision writing To provide sufficient knowledge of and practice in all the requirements for the writing of a final, reasoned and enforceable decision.

Duration: 4 months Fee: £999 + VAT Location: London Courses are held in the UK unless otherwise indicated. Information on all courses can be found online at: → www.ciarb.org/course-finder

THERESOLVER | May 2011

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Resolved “The group is one of the few practices geared up to handle international arbitration.” APL500 Our highly qualified and awarded international arbitration team has a proven track record in providing simple solutions to complex international disputes.

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AUSTRALIA’S PROJECT MANAGEMENT EXPERTS

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CIArb Asia Pacific Conference 2011 Investment and Innovation: International Dispute Resolution in the Asia Pacific

27 – 28 May 2011 Sofitel Sydney Wentworth, Australia

Early bird booking rates available until 30 April 2011 www.ciarb.org/conferences

Who Should Attend?

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Judges and arbitrators

CIArb’s Asia Pacific Conference 2011 is a dynamic two day forum which will consider challenges and opportunities for international dispute resolution practices driven by reform and regional investment.

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Practitioners in international commercial arbitration and mediation

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Corporate counsel and Legal Directors of corporations engaged in international trade

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Lawyers advising corporations engaged in international trade

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Practising lawyers

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Policy Makers

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Regional Regulators

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Investors

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Financiers

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Chief Executives and Senior Managers

Speakers include:The Hon. Justice James Allsop, President, New South Wales Court of Appeal, Australia; The Hon. Murray Gleeson AC, former Chief Justice of the High Court of Australia (Gala Dinner Speaker); Lord Peter Goldsmith QC, Former Attorney General, England, Wales and Northern Ireland & Head of European Litigation Practice, Debevoise & Plimpton, UK; Doug Jones AM FCIArb, President of CIArb 2011; Yu Jianlong, Vice Chairman & Secretary-General China International Economic and Trade Arbitration Commission; Cheng-Yee Khong, Hong Kong Director and Counsel of the ICC International Court of Arbitration Asia; Damian Lovell, General Counsel BHP Billiton, Australia; The Hon. Robert McClelland MP, Attorney General of Australia; Peter Rees QC FCIArb, Legal Director of Royal Dutch Shell plc, The Netherlands; Rashda Rana FCIArb, General Counsel Australia & Project Management & Construction, Bovis Lend Lease, Australia – and many more!

For multinational companies and industry groups, international dispute resolution is an integral part of good business practice. As the world emerges from the global financial crisis, investment and innovation are key to reshaping and rebuilding. With the rapid growth of international trade, progressive legislative reform and technological innovation in dispute resolution, all eyes focus on the Asia Pacific region.

Networking Reception Sponsor:

Welcome Reception Sponsor:

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W: www.ciarb.org/conferences E: events@ciarb.org T: +44 (0)20 7421 7427

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