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CONTENTS
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CONTENTS
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FOREWORD
Going global
Welcome to the 2007 edition of the Legal Business clear just what can be at stake in the
Arbitration Report. First things first: it’s been a commercial world and the important role
pleasure working with some of the leading that arbitration has to play.
practitioners in the field again this year. Many Nevertheless, as Clifford Chance’s Audley
thanks to all those who contributed features, and Sheppard points out: ‘Arbitration is no
to those who helped our team with the extensive panacea as you cannot guarantee that
research that has gone into producing this report. awards are going to be enforced.’ This is a
We hope you enjoy it. theme developed by DLA’s Matthew
We also hope that – largely by tapping into this wealth Saunders and Claudia Salomon in the final
of knowledge and experience – we’ve produced a report feature in the report, ‘Reality Bites’ (see p58).
that is accessible, insightful and wide-ranging. Clearly, we As they point out, little attention has been James Lewis, editor
realise that space does not permit exhaustive coverage of focused upon the harsh commercial reality
an area as diverse and complex as international that arbitral awards are of little value unless and until they
arbitration. Nevertheless, this year’s report has attempted can be turned into cash.
to go some way towards reflecting the inherently global Of course, having emphasised the international
nature of the business community that the various dimension to this year’s report, there remains a recognition
arbitration institutions and practitioners are serving. that London plays an increasingly central role in the
With this in mind, the scope of the report has been arbitration community. This is manifested in various
broadened. Last year’s (inaugural) edition was focused developments. Strategically, any successful, large
largely – and with good reason – on the London market. In international arbitration practice needs to have a centre of
this, the second edition of the report, we have made every gravity in one of the major arbitral locations. Among the
effort to play up the international dimension to arbitration. American firms, for example, the focal point ofShearman’s
Notable in this respect is a feature on Latin America practice is Paris, where Gaillard is based. The centre of
written by the managing partner of leading Spanish firm gravity for Debevoise & Plimpton is New York, and for
Garrigues (see p42) and an excellent feature written by WilmerHale it’s London. Recently, as reported in the April
Legal Business journalist Chris Johnson. In ‘Tipping the edition of Legal Business, Freshfields Bruckhaus Deringer has
balance’ (see p34), Chris provides an in-depth analysis of brought leading arbitration names from Paris, New York and
the best way to avoid the pitfalls inherent in operating in
China and Russia – currently two of the business world’s In this, the second edition of the report,
most exciting markets. As LB’s expert on these markets
(having travelled to both to undertake research in the last 12 we have made every effort to play up the
months), he has garnered some telling insight from leading
figures in the world of arbitration who have cutting-edge
international dimension to arbitration.
experience of matters arising from these countries.
Emmanuel Gaillard, the highly revered head of
Shearman & Sterling’s international arbitration practice is as Amsterdam together in London. This has shifted the balance
well placed as anyone. He is currently acting on the largest of its practice somewhat – historically perceived to be
ever investment arbitration: a claim by Group Menatep – Paris-centric, due largely to the presence of Jan Paulsson in
Mikhail Khodorkovsky’s holding company and majority the French capital – in favour of London.
shareholder in Yukos – against the Russian state, the value Such strategic moves within the arbitration practices of
of which may exceed $50bn. ‘If your opponent is the state leading global law firms makes sense, not least because
then you don’t want to appear before the organs of that London is growing in strength as an arbitral centre. In
state – by definition the local courts are an organ of the addition, as various articles in this report reveal, much of the
state,’ he says. ‘In the local courts in Russia you have zero concern about the role of the UK courts is being overcome:
chance, as we have seen – Yukos has litigated in local courts all great news for arbitration in London. This is where
and lost every time except for one, after which the judge WilmerHale kicks off the report, with an introduction that
was sacked in the following months. It was a clear signal… reviews the ten years since the English Arbitration Act and an
there is no independence.’ In a similar vain, Gaillard makes analysis of London’s unique place in the arbitration world.
INTRODUCTION
Ten years on
The English Arbitration Act 1996 has had a fundamental impact on the
arbitration world, making London an increasingly popular choice of arbitral situs.
WilmerHale’s Gary Born and Wendy Miles explain why
INTRODUCTION
INTRODUCTION
contract to the effect that they do not lose jurisdiction One of the reasons given in the cases for a liberal
by reason only that the matrix contract may be void or construction of an arbitration clause is the
voidable. presumption in favour of one-stop arbitration. It is not
to be expected that any commercial man would
The court went on to observe that the arbitration knowingly create a system which required that the
agreement itself must be valid and binding. If it were not court should first decide whether the contract should be
binding, for reasons other than that the matrix contract rectified or avoided or rescinded (as the case might be)
was void, then the arbitrators would not retain conclusive and then, if the contract is held to be valid, required the
jurisdiction pursuant to s7. Instead, they would need to arbitrator to resolve the issues that have arisen. This is
determine, pursuant to s30, the scope of their own indeed a powerful reason for a liberal construction.
substantive jurisdiction.
In Fiona Trust the English Court of Appeal again This interpretative rule parallels that in the United
confirmed and clarified the effect of the separability and States and, to a lesser extent, Switzerland, and promises to
competence doctrines under English law. In response to reduce significantly the possibility of litigation over
the argument that a contract procured by bribery is void jurisdictional objections based upon the scope of the
and that this would necessarily void the arbitration arbitration agreement.
agreement contained therein, the Court said:
Judicial assistance to arbitral proceedings
It is not enough to say that the bribery impeaches the Secondly, English courts are granted the power to assist, in
whole contract unless there is some special reason for defined ways, arbitral proceedings that are conducted in
saying that the bribery impeaches the arbitration England. Generally, the 1996 Act transfers any procedural
clause in particular. decisions in an arbitration to the tribunal, wherever
practicable, through ss38 to 43. The overriding principle of
Determining the circumstances in which a party has the Act is that the courts shall not interfere in arbitral
identified a ‘special reason’ for impeaching the arbitration proceedings and shall only act if or to the extent that the
clause ‘in particular’ remains to be defined; it will, however, tribunal has no power or is unable to do so.
clearly be a limited set of cases akin to forgery of the Section 44, for example, gives the courts the power to
underlying contract or actions directed towards the act in support of the arbitral proceedings if the case is one
arbitration clause itself (eg, fraud regarding incorporated of urgency, or on the application of a party with the
documents, alteration of the arbitration clause and the like). permission of the tribunal or agreement of the other
At the same time, the Court of Appeal settled (subject to parties. In exercising that power in Cetelem SA v Roust
further appeal to the House of Lords) a long-standing Holdings Ltd [2005], the court found that it only has
debate as to the scope of jurisdiction conferred by wording jurisdiction to make interim orders as it thinks necessary
in various arbitration clauses, stating that: ‘the time has for the purpose of preserving evidence or assets,
now come for a line of some sort to be drawn and a fresh overruling earlier authority that it had broader powers to
start made at any rate for cases arising in an international grant orders pursuant to s44. Clarke LJ said that:
commercial context.’ On this issue, the Court stated that:
… it was intended to interfere as little as possible with
As it seems to us, any jurisdiction or arbitration clause the arbitral process and to limit the power of the court
in an international commercial contract should be in urgent cases to the making of orders which it thinks
liberally construed. The words ‘arising out of’ should are necessary for the preservation of evidence or
cover ‘every dispute except a dispute as to whether assets.
there was ever a contract at all’.
Nonetheless, there are situations where judicial
The Court explained the strong policy reasons in favour of a assistance for the arbitrators can be desirable. These
liberal reading of arbitration agreements, pointing out that: include enforcing disclosure orders made by an arbitral
tribunal and enforcing orders for provisional relief. The
availability of such judicial support can make an arbitral
In the ten-year history of the 1996 Act, seat more attractive (although in many instances these
sorts of judicial assistance must for practical reasons be
there have been less than 100 reported sought from national courts outside the seat).
An issue of some practical importance, and current
cases of appeals under s67. interest, is the power of English courts to issue anti-suit
injunctions restraining parties from pursuing foreign
INTRODUCTION
INTRODUCTION
Those who resort to and practise in international set aside as a whole. The general approach of the courts is
commercial arbitration are rightly jealous of the not to interfere with the decision of experienced
autonomy of the process, and the case law which has commercial arbitrators. This approach was illustrated by
developed in this field demonstrates that the court will the Court of Appeal when it overturned the first instance
respect that autonomy… Whilst the court will never decision in BMBF (No 12) Ltd v Harland and Wolff
dictate to arbitrators how their conclusions should be Shipbuilding and Heavy Industries Ltd [2001] to set an
expressed, it must be obvious that the giving of clearly award aside. The Court of Appeal expressed its
expressed reasons responsive to the issues as they unequivocal view that ‘it is not for the courts to substitute
were debated before the arbitrators will reduce the its own view for that of experienced arbitrators on a
scope for the making of unmeritorious challenges, as question such as this’.
this ultimately has proved to be.
Other factors
That leaves appeals on points of law. It is this final There are two additional, important considerations for
category of review that distinguishes England from most parties to consider. First, the location of the arbitral seat
UNCITRAL Model Law jurisdictions, as well as France and affects the law applicable to the arbitration agreement.
Switzerland, while broadly paralleling the ‘manifest Articles II(3) and V(1)(a) of the New York Convention
disregard of law’ standard of review applicable in the contemplate that the validity of the parties’ arbitration
United States. At the time of the 1996 Act’s enactment, agreement will be determined under ‘the law to which
Saville LJ described the section as a ‘feature of our existing the parties have subjected it or, failing any indication
law which has caused disquiet abroad and which is thereon, under the law of the country where the award
regarded by many as detracting from arbitrating here [in was made.’ National law requirements on subjects such
England]’. as contract formation, validity and illegality, and
Section 69 must be seen in context. The right to appeal arbitrability can vary significantly, with the legal rules in
on a point of law is non-mandatory and the parties are some jurisdictions disfavouring international arbitration
free to opt out of its application. By incorporation of the agreements. For their part, and as discussed above,
rules of most leading arbitral institutions, many parties do English courts have taken a broad approach to the
precisely that. This includes the LCIA Rules, which provide question of arbitrability.
that the parties ‘waive irrevocably their rights to any form Further, the arbitral seat is usually the place where the
of appeal, review or recourse to any state court or other arbitral award will be ‘made’ for purposes of the New York
judicial authority’ (Article 26.9) and the ICC Rules, which Convention and other international agreements. This has
provide that the parties ‘shall be deemed to have waived significant legal consequences for the enforceability of
their right to any form of recourse’ (Article 28(6)). arbitral awards outside the country where they are
Consequently, appeals under the 1996 Act on a point of rendered. The UK is party to the New York Convention and,
law are relatively rare. In more than half of reported cases therefore, awards made within its territory are subject to
of appeal (many of which included appeals pursuant to the Convention’s pro-enforcement rules in other
ss67 and/or 68 as well), the award was upheld. In most Convention parties (many signatories to the New York
other cases, it was varied or remitted. It was only in a very Convention, including the United Kingdom, have adopted
small proportion of cases, less than 10% (which equates to ‘reciprocity’ reservations and will only apply the
substantially less than one per year), that the award was Convention to awards ‘made’ in another signatory state).
After legal considerations, parties often cite
convenience, neutrality and location as other factors
ABB AG v Hochtief Airport GmbH & anor influencing the choice of arbitral situs. These factors
[2006] EWHC 388 (Comm) include ease of air travel, facilities and resources (including
BMBF (No 12) Ltd v Harland and WolffShipbuilding and Heavy Industries Ltd counsel), language and culture – all of which position
[2001] EWCA Civ 862 London highly in the English-speaking world. Most
Cetelem SA v Roust Holdings Ltd important, however, is the availability of a large number of
[2005] EWCA Civ 618 skilled arbitrators and arbitration counsel in the potential
Fiona Trust & Holding Corporation & ors v Yuri Privalov & ors arbitral seat. Where such a community exists, arbitrations
[2007] EWCA Civ 20 will follow. Equally, parties continue to return to a location
Vee Networks Ltd v Econet Wireless International Ltd (and a formula) that has served them well in the past. All
[2004] EWHC 2909 (Comm) of this points in the direction of continued growth of
West Tankers Inc v RAS Riunione Adriatica di Sicurta SpA & anor international arbitration in London. The 1996 Act has
[2007] UKHL 4 played an important, though by no means exclusive, role
in this cycle.
THE COMMERCIAL
LITIGATION JOURNAL
'Litigation' is changing.
Rules and technology never stand still…
Today's litigators need to combine the letter of the law with the client's
commercial objectives and expectations. In Commercial Litigation
Journal those involved in some of the biggest cases share their
experiences – from first instruction to costs negotiations – keeping you
informed of the techniques and tactics of modern litigation.
INDUSTRY SPECIALISMS
Captains of
industry
INDUSTRY SPECIALISMS
INDUSTRY SPECIALISMS
‘prefer to use international arbitration either alone or in matter of the transaction is not particularly important. In
combination with alternative dispute resolution mechanisms those cases, it is arbitration and procedural skills that are
in a multi-tiered dispute resolution process’. The reasons for critical. Counsel needs to know how best to present their
this? ‘Flexibility of procedure, the enforceability of awards, the case — to prepare the written submissions, obtain and
privacy afforded by the process and the ability of parties to present the relevant documents and witness evidence,
select the arbitrators’. No surprises there then. and argue the law. Substantive knowledge will be less
What is significant, however, is that the report found that important than procedural expertise in these situations.’
‘75% of corporations retain specialist arbitration firms or If the dispute emerges out of an M&A transaction, or a
firms with a substantial arbitration practice rather than their joint venture, it doesn’t make any difference if it is in the
usual external litigation counsel.’ Why? Because ‘corporations chemical industry or if it relates to hotels. Let’s face it – the
seek a firm that specialises in international arbitration, is client will care more about your M&A or joint venture
experienced in the subject matter of the dispute, has access experience. That said, if the dispute revolves around technical
to counsel in the place of the dispute to provide regional aspects of a faulty pipeline, then specialist knowledge will be
expertise, and is a specialist in the applicable law.’ required. ‘It depends on the sophistication of the client and
Understanding the relevant laws and procedures, getting how often that industry sector has disputes that result in
to grips with the strengths and weaknesses of the arbitrators arbitration,’ comments Freshfields Bruckhaus Deringer’s
and appreciating the subtleties of forum shopping are Geoff Nicholas. ‘Our energy clients, like the major oil and gas
prerequisites to the job. Nowadays, firms have to add more companies for example, have high expectations that not only
value. Successful firms must provide specialist industry will we have arbitration specialisation, but that we will have
knowledge, whether in construction, shipping, commodities, a thorough knowledge of their business area too.’
insurance/reinsurance or public international law. ‘At big firms like ours, we can also rely on the sector
‘The market has matured,’ says Clifford Chance expertise of our transactional lawyers,’ says HerbertSmith’s
arbitration partner Audley Sheppard. ‘There was a Larry Shore. Judith Gill at Allen & Overy adds: ‘Clients don’t
preliminary phase where the market, ie clients requiring want to have to pay us to reinvent the wheel. While most of
arbitration advice and other lawyers, needed to be the time we can meet their demands through our arbitration
convinced by arbitration practitioners that arbitration and dispute resolution group, on other occasions we will
experience added value. It was challenging the view that work with our non-contentious colleagues across our global
“if you can litigate, you can arbitrate”.’ The market was network to get the correct result.’
convinced and publications such as The Legal 500 started to
include a separate international arbitration category. ‘The Building bridges
second phase involved law firms seeking to persuade the Having the requisite background can be imperative in
market that they had more international arbitration large construction disputes. ‘Construction disputes can
experience than their competitors,’ Sheppard continues. be so technical,’ says Robert Volterra of Latham & Watkins.
‘The third phase, which we have just entered, involves law ‘Basically they can be engineering oriented, and you must
firms seeking to persuade the market that they have more have a clear understanding of construction processes to
industry-specific experience than their competitors. The first make sense of the documents. The technical aspects can
question clients often ask is: how many times have you be a world unto themselves.’
dealt with ICC or LCIA arbitrations? The real players can reel White & Case is currently acting on a number of high-
off dozens, so that is no longer a measure that differentiates value construction cases involving hotels, gas extraction
the top firms. The next question is: what experience do you plants and hydroelectric projects. ‘You need to understand
have in this type of dispute? Clients want you to be in a everything from the client’s business to the different
strong position to give advice on strategy and the likely contract forms. Only then can you see the project all the
outcome using your arbitration experience. But they also way through, and provide a cradle-to-the-grave service,’
want familiarity with the type of contract in dispute, as well says White & Case partner John Bellhouse.
as the relevant technology and industry practices.’ At Pinsent Masons, the disputes handled are far from
simple building disputes and usually involve substantial
Commerce and industry infrastructure projects around the world. In 2006, the
With the big-ticket commercial disputes, specialist firm advised on the successful defence of a $200m ICC
expertise depends on the nature of the dispute. ‘There are, arbitration regarding a major power plant in South-East
of course, many cases that require specialist knowledge,’ Asia. It also acted on behalf of a Saudi Arabian contractor
says Gary Born, head of WilmerHale’s arbitration practice, in an ICC arbitration relating to the construction of a
‘but there are also more general commercial disputes. power station in that country.
Sometimes disputes focus entirely on language used in a Phillip Capper of Lovells and David Brynmor Thomas
contract, or particular factual issues, where the subject from Herbert Smith have amongst the strongest
INDUSTRY SPECIALISMS
reputations in high-value, complex construction-related ’Clients want to know that you understand
disputes in the City. Steve Abraham at Norton Rose, David
Howell at Fulbright & Jaworski and Stephen York at their business, that you know the gossip
Kilpatrick Stockton also have decades of impressive
experience in the construction and engineering sectors.
and who’s screwed up recently.’
Other firms that excel in this sector include Allen & Nicola Boulton, Byrne & Partners
Overy, which fields six arbitration partners from its
London office; Clifford Chance which deals with major
infrastructure projects around the world; and CMS Juliet Blanch of McDermott Will & Emery advises
Cameron McKenna, which in 2006 was involved in arbitral investment banks and other clients involved in the energy
disputes involving sums in excess of $1bn. Shadbolt & Co commodity trading sector. ‘An in-depth knowledge of the
and Fenwick Elliott are smaller firms that boast extensive sector specificity is essential,’ Blanch says. ‘Different
construction expertise. considerations apply depending upon whether you are
‘My particular view,’ says Bellhouse, ‘is if you’ve got involved in a claim relating to an oil dispute arising in Central
experience in the construction industry and arbitration, Asia or a power dispute in western Europe. Quite different
it’s the best combination your client can get.’ levels of liberalisation and sophistication exist in these
markets that cannot just be picked up from a text book.’
Valuable commodity Clifford Chance has expertise in commodities and
The commodity arbitration market is small. Serious players international trade, particularly in oil and oil products,
in this area include Diane Galloway at Reed Smith Richards metals and sugar. Stephenson Harwood has recently acted
Butler, Paul Turner and John Whittaker at Clyde & Co and for an international trading company in various arbitrations
Mike Pollen at DLA Piper. Mark Aspinal and Chris Jones at in respect of commodity disputes, including under The Grain
Waterson Hicks deal with oil-related business. & Feed Trade Association and The Federation of Oils, Seeds
‘Commodities is about common sense,’ says Nicola and Fats Associations. Taylor Wessing also has expertise in
Boulton at Byrne & Partners. ‘Clients want to know that this area. The firm is currently advising a Far Eastern
you understand their business, that you know the gossip, manufacturing company on a $120m London Metal
and you’ve picked up on who’s screwed up recently.’ Exchange arbitration claim against a trading company for
Byrne & Partners have expertise on trading structures contract default. At Reed Smith Richards Butler, partner
and how commodity dealers organise their businesses. Mark Connoley has commodity arbitration experience.
The firm is currently acting on disputes involving major oil Lawrence Graham and Hill Taylor Dickinson also have
company interests and trade and capital financing. partners who specialise in this field.
‘We handle a lot of work in the oil, metal and sugar
sectors,’ says Clyde & Co’s John Whittaker. ‘ When you’re Dire straits
dealing with commodities, it’s often necessary to have ‘Shipping law is complicated,’ says Whittaker, ‘and you need
industry knowledge. Although arbitration as a dispute someone with specialist knowledge; someone who will
resolution skill is important, you need a lawyer who know all about, say, the limitation of liability regime or the
understands how the markets work in practice.’ environmental issues that could arise.’ At any one time, Clyde
w w w. h a a v i n d . n o
INDUSTRY SPECIALISMS
& Co is involved in over 500 arbitration cases that involve its Maritime law is a core practice area for Hill Dickinson,
core practice areas of shipping, insurance and reinsurance, Taylor Wessing and Lawrence Graham.
international trade and finance, energy and construction.
Holman Fenwick & Willan also has an impressive Protect yourself
shipbuilding litigation practice that lends itself to There is an entire body of law dedicated to the insurance and
international arbitration. Its shipping and insurance group reinsurance markets that requires specialist knowledge. Clyde
is currently dealing with a rig dispute valued at between & Co’s experience in this area is vast. The firm is currently
$50m and $60m. ‘You can lead as an arbitration specialist,’ working on cases involving healthcare, product liability,
says Guy Hardaker, a partner at the firm, ‘but you have to workers’ compensation and sports and medical businesses.
have industry knowledge. Our firm grew from shipping. ‘We have always been involved in international arbitration,’
Almost every charterparty contract has an arbitration says Jonathan Wood, a partner at the firm. ‘It’s the dispute
clause, so we are dealing with literally hundreds at a time.’ resolution forum of choice for our core clientele. We have one
of the largest insurance/reinsurance practices in London and
’We’re not trying to take on are always handling big ticket Bermuda form arbitrations.’
Clyde & Co is also a leading firm in political risk. ‘The
every piece of investment Export Credits Guarantee Department insures political risk
and expropriation’ explains Wood. ‘We’ve been
treaty work, just be the best representing them for over 20 years.’ Ince & Co and Holman
at what we do.’ Fenwick & Willan also have particular expertise in this field.
Guy Henderson and Richard Smith at Allen & Overy
Jane Player, Bird & Bird are particularly recommended for complex insurance/
reinsurance work. At Taylor Wessing in 2006 James
Crabtree joined the group from Pinsent Masons, adding
‘As a specialist firm, our sector knowledge is one of our insurance/reinsurance arbitration expertise as a new
biggest selling points,’ says Peter Rogan, senior partner at dimension to the firm’s practice.
Ince & Co. ‘If you come to work at this firm, you live with the At Barlow Lyde & Gilbert, Colin Croly has particular
industry. Our lawyers learn about shipping, trade, insurance expertise in the insurance/reinsurance and international risk
and reinsurance from the outset. It means they don’t apply sectors. Other partners specialising in this field include Stuart
the law in a vacuum.’The firm’s shipping and international Hall, John Hanson and Giles Kavanagh. At Hill Dickinson,
trade expertise has made it one of the most frequent users Rhys Clift takes on insurance work using ADR methods.
of the London Maritime Arbitrators’ Association. At CMS Cameron McKenna, John Hall and Andrew
Another specialist in this field is Norton Rose’s Chris Symons have been particularly active in 2006, dealing with
Hobbs. Recently returned from the firm’s office in Greece, reinsurance arbitration matters, while Stephen Netherway
he now heads up the international arbitration group in has been busy on insurance cases. At Morgan Lewis, Peter
London. His expertise is impressive and includes Hardy has a strong reputation for his insurance and
charterparty and bill of lading disputes, shipbuilding and reinsurance work, while at LeBoeuf, Lamb, Greene & Macrae,
ship sale as well as purchase disputes. He has recently acted Nik Rochez and Dean Hansell have recent experience dealing
on a series of arbitrations for the buyers of six bulk carrier with insurance/reinsurance arbitrations.
vessels constructed by a shipyard in Shanghai. It’s clear why
a specialist was needed – the dispute concerned coating Media world
deficiencies and compliance with technical specifications. ‘Ours is first and foremost a sector-specific firm,’ says Bird &
At Clifford Chance, Alex Panayides was a partner in the Bird dispute resolution partner Jane Player. ‘We know about
firm’s shipping group before transferring to the arbitration our client’s businesses. We know their world and we can
group. Watson Farley Williams acts for many of the largest compete with anyone else in our sector both in terms of
ship owners/operators and banks in the world, including procedural and sectoral expertise.’ The firm specialises in
Nordea, Mearsk and CMA-CGM. highly technical, industry-specific disputes, including the
At Stephenson Harwood, Duncan McDonald heads up firm’s core sectors of media, sport, IT, telecoms, life sciences,
the firm’s shipping litigation group whilst at Barlow Lyde & IP and biotechnology. ‘We punch above our weight in our
Gilbert, Richard Black has extensive maritime arbitration sectors,’ says Player. ‘We’re not trying to take on every piece
expertise. At Reed Smith Richards Butler, Mark Connoley, of investment treaty work, just be the best at what we do.’
Stephen Kirkpatrick, Lindsay East and Andrew Taylor all ‘In IP disputes, our clients come to us for our IP
have impressive maritime arbitration experience. expertise,’ says Richard Marsh of Taylor Wessing, ‘and as
MFB Solicitors is a ten-partner niche shipping and arbitrations within the IP world develop, they will still
insurance firm that specialises in dispute resolution. come to us as market leaders.’
INDUSTRY SPECIALISMS
Olswang also has experience in this sector. In Other firms that compete in the TMT sector in
2006, Richard Bamforth continued to act for SIA international arbitration are Bristows, which has a
Kempmayer Media against Digital Latvian Radio & dedicated mediation group of four partners, DLA Piper,
Television Centre in an ICC arbitration concerning the a firm that has a leading reputation for handling IT and
rollout of a digital terrestrial television network in the telecoms disputes, and Clifford Chance. Last year at Clifford
Republic of Latvia. The firm provides international Chance, Rob Lambert successfully obtained an award for
arbitration services to the technology, media and tele- state-owned Digital Latvia Radio & Television Centre in ICC
coms sectors, whether in ICC, LCIA or ad hoc international proceedings in Stockholm.
arbitrations.
At Herbert Smith, Paula Hodges has particular expertise Compact cases
in telecoms disputes, whilst at Allen & Overy, Matt Gearing The work involved in resolving investment treaty disputes
specialises in telecoms and media cases. through arbitration requires specific knowledge, but it’s
Alejandro Escobar
Escobar was formerly senior counsel at International Centre for Settlement of Investment Disputes (ICSID) in Washington, DC,
where he handled more than a dozen of the first investor-state arbitration proceedings ever brought under BITs and multilateral
treaties for the protection of investment. Formerly at Herbert Smith, he is now practising at Latham & Watkins.
Legal Business says: Escobar is an academic superstar.
Sophie Lamb
Lamb began her legal career as a barrister at One Essex Court. She was then under Gary Born’s tutelage at WilmerHale for seven
years, before joining Bird & Bird as a partner in 2006.
Legal Business says: Lamb’s impressive pedigree will further propel Bird & Bird’s growing international arbitration practice.
Bruce Macaulay
Macaulay was previously Juliet Blanch’s protégé at Norton Rose but is now set to make a name for himself at Skadden, Arps,
Slate, Meagher & Flom. He has an industry focus on energy-related disputes.
Legal Business says: Macaulay is a definite arbitration star in the making.
Franz Schwarz
Schwarz is an Austrian-qualified civil law practitioner at WilmerHale.
Legal Business says: He is analytically and academically superb. A partner for only a matter of months, Schwarz has already sat
as a sole arbitrator on a number of cases.
Matthew Weiniger
Weiniger has just secured an outstanding victory for Herbert Smith, successfully acting for Eurotunnel in its arbitration claim
against France and the UK.
Legal Business says: Weiniger is fantastic with clients.
INDUSTRY SPECIALISMS
not the industry sector that dominates. ‘Energy disputes international principles applicable to such claims could
have been the big trend over the last three years, and that apply equally to telecoms or other forms of licences. ‘The
broad industry category encompasses a range of disputes,’ specialist knowledge in these cases relates to the law that
says Skadden Arps’ Karyl Nairn. ‘In one case you can be should be applied, rather than the industry sector that the
arguing about a joint venture, in another rights to the use dispute evolved from. ‘It is principally because we’re
of a pipeline. Many of the treaty claims can be summarised investment treaty specialists that firms like us, Freshfields
as being about the granting of rights by a government and Clifford Chance are currently picking up the best
that have been then taken away or diminished.’ The energy-related treaty arbitration work,’ says Nairn.
European specialists
Brussels Stockholm
Hanotiau & van den Berg Mannheimer Swartling
Albert Jan van den Berg – investment treaty arbitrations and Kaj Hobér – investment treaty arbitrations, with a focus on
general international commercial arbitration. China.
INDUSTRY SPECIALISMS
The key to becoming an investment treaty specialist is Very rarely do these firms instruct outside counsel.
having a thorough understanding of public international More often than not they perform their own advocacy,
law. ‘BIT disputes are governed by public international law and apply their own experience, tactical judgement and
in procedure and substance,’ says Robert Volterra, a knowledge of arbitral practice and process.
partner at Latham & Watkins. ‘It’s an entirely distinct area
of law.’ And one that shouldn’t be dabbled with unwisely. Crystal balls
‘The problem is,’ says one leading arbitrator, ‘that there are More and more international arbitration groups are shifting
people who think that because there is no governing body their focus to concentrate on core practice areas that are
for people who do public international law, anyone can either traditionally associated with their firms, or are a step
get away with it. I’ve seen one-hit wonders without the in a new direction. Trying to spot future trends is part of the
necessary expertise trying to do BIT arbitrations and the process. ‘Next year there will be more big corporates taking
client always suffers.’ on governments in ICSID claims,’ Lovells’ Phillip Capper
There are in fact relatively few law firms that have the predicts. ‘Arbitration isn’t seen as just an exit strategy
requisite experience to carry out the international anymore,’ Lovells’ Simon Nesbitt adds. ‘Investors are
arbitration cases governed by public international law. ‘It becoming more aware of investment treaty claims and are
is a different way of litigating a case,’ remarks Peter Griffin, more willing to put pressure on unfriendly governments.’
a partner at Baker Botts. ‘There is actually a trend towards
a specialist ICSID bar. Very few firms worldwide have ‘It’ll take a few years for the tax treaty
actually done more than two to three ICSID cases; certainly
very few can claim they have had sufficient experience to disputes to filter through, but when they
say they are expert.’
London does, however, boast a few such firms, which
do, they will be enormous.’
have ample experience in this area. Allen & Overy is Peter Griffin, Baker Botts
representing the Republic ofSlovenia in a dispute under the
Energy CharterTreaty (ECT) with the national electricity
company of Croatia at the moment. In a second ECT case, Look to the future and tax disputes could become a
Stephen Jagusch and Judith Gill, from the same firm, are niche area for international arbitration specialists. ‘Think
representing the Republic of Azerbaijan in a highly politicised about international tax treaty disputes,’ says Peter Griffin
dispute involving persons implicated in an alleged plot to of Baker Botts. ‘It’ll take a few years for the disputes to
stage a coup d’etat. filter through, but when they do, they will be enormous.
At Clifford Chance, Audley Sheppard represented Oxus And it will be the big multinational companies that will
Gold plc in 2006 in its ongoing arbitration against the be fighting to get their overpayments back. In the future
Kyrgyz Republic under the UK-Kyrgyz BIT. there will be treaty provisions that will provide for
Recently, Robert Volterra from Latham & Watkins acted arbitration in case of tax disputes. It could be vast and a
for the Republic of Ecuador in a bilateral investment dispute new population of tax arbitration lawyers will emerge.’
at ICSID. The case involved an alleged expropriation of a US ‘What are and will be the main areas of industry focus?’
investor’s electricity plants and their contracts for $1bn. considers Audley Sheppard. ‘The major arbitration practices
Debevoise & Plimpton won two of the four largest will be focusing on energy and natural resources, telecoms,
arbitration awards for cases involving claims of breach of and construction and engineering. Then there’s M&A and
BITs for its clients CME and Occidental Petroleum – $370m post-completion disputes and more general intercorporate
and $75m respectively. The firm is currently handling BIT cases such as manufacturing and joint venture disputes.
arbitrations involving Ghana, Lithuania and the Congo. There will continue to be a concentration on BITs and
Baker Botts continue to act for Hunt and ExxonMobil in investment protection disputes. We will also be focusing on
their dispute against the Republic of Yemen, and Helnan Kyoto and climate disputes – carbon trading, for example.’
Hotels in its ICSID claim against the Arab Republic of Egypt. ‘The era of the generalist has a fixed term,’ says Griffin.
Other firms in London getting the lion’s share of this ‘Consider investment banking. They have product groups
kind of work include Freshfields, whose London office is and industry groups. In our industry, we are traditionally
gaining Constantine Partasides, Nigel Rawding and Brian viewed as product specialists in that the value we add
King in spring 2007; SJ Berwin, which has particular expertise comes from choosing the right arbitrator, tailoring the
in Russia-related disputes thanks to David Goldberg; and procedure and so on. It doesn’t much matter if the dispute
WilmerHale, due to the stellar reputation of Gary Born. is about telephones, oil rigs or widgets, we work out the
Skadden Arps’ boasts the talents of Karyl Nairn, Paul Mitchard matrix. But as our industry grows – and it is growing –
and Bruce Macaulay, while McDermott’s investment treaty clients are expecting us to know about their business. We
arbitration capability is led by Juliet Blanch. have to become industry specialists.’
DISCLOSURE
Conflict rules
Differentiating between genuine and questionable conflicts of interest is an
area of growing concern in international arbitration. Herbert Smith LLP
partners Laurence Shore and Justin D’Agostino analyse the issues
To disclose or not
Party-based conflicts occur where the potential partiality
Laurence Shore (left) is a partner and head of international of an arbitrator relates to a link between them and one of
arbitration and Justin D’Agostino is a partner at Herbert Smith LLP the parties (or counsel for one of the parties). Clearly,
DISCLOSURE
Rules of disclosure
The general principle that arbitrators must be impartial and independent is well accepted, although the exact
formulation of this duty may vary among different institutional rules and national legislation. In the context of
challenging arbitrators, the test for bias or impartiality will also be jurisdiction-specific. Therefore, although the
overarching values remain the same, reference to the relevant provisions/tests will be required in each case.
It is worth briefly noting two recent regimes that have been instituted in respect of disclosure: the IBA Guidelines
and the new ICSID Rules of Procedure for Arbitration Proceedings.
IBA Guidelines
The Guidelines, while not binding, purport to provide international standards on disclosure and the challenging of
arbitrators that are useful across jurisdictions. They set out general principles and illustrate them with lists of
conflicts where an arbitrator should decline to act (the ‘red list’), potential conflicts that should be disclosed (the
‘orange list’), and circumstances where no conflict is likely to exist (the ‘green list’). The key to disclosure under the
Guidelines is a subjective test as to whether the parties might view a particular circumstance as creating a conflict.
ICSID Rules
It is interesting to note that the new ICSID Rules, which came into force in April 2006, set out a regime that requires
a high standard of disclosure. This standard includes disclosure of all previous relationships with the parties and
‘any other circumstance that might cause [the arbitrator’s] reliability for independent judgment to be questioned by
a party’ (Rule 6). The rigorous standard adopted in this rule is illustrative of the importance attached to full
disclosure in the arbitration process and the need for arbitrators to ensure that any potential conflict of interest is
disclosed, regardless of whether the arbitrator believes it may affect their impartiality.
arbitrators have a duty to disclose relationships with Discussion of the case has revealed a concern that the
parties, but the extent of that duty remains a contentious vacation of an award in cases of non-disclosure of an
issue. Does an arbitrator have to disclose every insignificant relationship may lead to a situation where
relationship between them and those involved in the losing parties conduct a rigorous post-award search for any
dispute, or can an arbitrator decide that a relationship potential relationship that could be used to challenge it (this
does not warrant disclosure? If a relationship is not point was also made by the Court). It may, therefore, create
disclosed, what are the consequences of non-disclosure if an incentive not to investigate arbitrators before the hearing.
a party later objects? On the other hand, allowing arbitrators to decide when a
relationship is worth disclosing risks undermining
Recent examples confidence in the disclosure regime and, consequently, in the
These issues arose in the case of Positive Software Solutions independence of the arbitration process itself.
Inc v New Century Mortgage Corp [2007], which was The precedent on this issue in the US was set by the
decided by the US Court of Appeals for the Fifth Circuit. The Supreme Court ruling in Commonwealth Coatings Corp v
case involved an application to vacate an arbitral award Continental Casualty Co [1968]. In that case, failure to
because of the failure of the arbitrator to disclose a previous disclose a previous business relationship with one of the
relationship with counsel for one of the parties. Positive parties led to the award being vacated. The relationship in
Software Solutions alleged that the award should be that case was more significant than that in Positive Software
vacated due to the appearance of bias, as the arbitrator Solutions, but the Court held that even the ‘impression of
failed to disclose that, seven years earlier, he and his possible bias’ must be avoided and that standards for
former law firm had acted as co-counsel in a lengthy arbitrator disclosure should be, if anything, more rigorous
litigation with the law firm (and one of the counsel) than those for judges. The Court in Positive Software
representing one of the parties. Several law firms and Solutions distinguished Commonwealth Coatings on the
lawyers were involved in the previous litigation, and the facts, and also concluded that Black J’s opinion regarding
arbitrator had not worked with the particular counsel on the ‘appearance of possible bias’ was a plurality decision
the case, although their names appeared together on some rather than a majority decision and, therefore, not binding
pleadings. The Court held that the relationship was too on lower courts.
trivial to warrant vacating the award and that the fact of A similar issue arose in Europe in the Eureko BV v Republic
non-disclosure was not, in itself, evidence of partiality. of Poland arbitration. Poland challenged an arbitration
DISCLOSURE
award on the grounds of a breach of impartiality due to the party will be able to challenge an award after it has been
relationship between the arbitrator and the law firm made. This is especially important as parties may try to
representing Eureko, which was not initially disclosed by the challenge an unfavourable award on a ground which, if
arbitrator. In particular, Poland claimed that the close disclosed initially, would not have raised any objection
proximity of the offices of the law firm and the arbitrator, as prior to the award being made.
well as an article falsely claiming that they were acting as
co-counsel in an unrelated case against Poland, created an Issue-based conflicts
appearance of partiality. However, the Belgian Court found Another situation where conflicts of interest have recently
no evidence of partiality, noting that the mere fact that the attracted attention is where issue-based conflicts occur.
arbitrator’s office was in the same building as the law firm This type of conflict may arise where an arbitrator has
was not sufficient grounds to order a recusal and that the taken, or is taking, a particular view on an issue in another
false claims made in the article had been rectified. The case capacity – such as when acting as counsel, or in an
is currently on appeal. academic context.
These perceived conflicts raise difficult issues, as
ICSID Rules and IBA Guidelines parties usually prefer to appoint an experienced
The debate around disclosure demonstrates the clash of arbitration expert, and it may be difficult, if not impossible,
two competing policy objectives. There is clearly a need to to find someone who has not previously argued a position
encourage disclosure and to ensure that arbitrators feel on a relevant issue. This is especially the case in
compelled to disclose all relevant information to the investment treaty arbitration, where arguments often
parties. However, there is also a need to discourage revolve around the interpretation of standard investment
challenges based on trivial connections being used as a treaty obligations. Commercial arbitration, on the other
means of vacating unfavourable awards. hand, is more likely to be fact-specific and dependent on
The position in the new ICSID Rules is that all prior specific contractual clauses.
working relationships (with the parties) should be disclosed, It is often acknowledged that the key to an impartial
as well as any other factor that may affect impartiality. The arbitrator in this context is someone with ‘an open but not
broadness of these provisions suggests that arbitrators an empty mind’. Arbitrators will often have a history of
should err on the side of disclosure, even regarding small or acting in arbitrations both as counsel and arbitrator, and
insignificant connections. may have written articles on particular issues in an
The IBA Guidelines, on the other hand, propose a regime academic capacity. This should not disqualify them from
indicating that previous working relationships with counsel acting as an arbitrator in a particular case, unless specific
would not generally require disclosure, while working circumstances suggest that there are additional reasons to
relationships with parties within the last three years may question their impartiality.
require disclosure (although the test is subjective).
While there is a danger that, without reasonable limits, Recent cases
spurious challenges could be made regarding insignificant Such a reason may occur where the ‘conflict’ is seen as
relationships, it is suggested that the balance should concurrent. Issue conflicts have been highlighted recently
generally favour disclosure, even regarding less significant in situations where an arbitrator has been acting as
relationships. Moreover, when disclosure is made, an counsel in another simultaneous, but unconnected, case
arbitrator should be prepared to stand down if a party on the same issue. In the Telekom Malaysia Berhad v
raises reasonable objections on the basis of the Government of the Republic of Ghana [2004] arbitration,
information disclosed. While the intention is not to force Ghana challenged the appointment of Professor
disclosure of every trivial relationship, it is crucial that Emmanuel Gaillard in the Dutch courts. Ghana alleged that
arbitrators err on the side of disclosure on issues which Gaillard could not act impartially in the arbitration, as he
may affect the parties. It is suggested that, the more was acting as counsel in a concurrent case – seeking the
thorough the initial disclosure, the less likely it is that a setting aside of an award on which Ghana sought to rely
in the present arbitration. The Dutch Court held that
Gaillard should withdraw as arbitrator unless he stood
The broadness of the ICSID provisions down as counsel in the other case within ten days.
suggests that arbitrators should err on The Court found that, even if Gaillard could distance
himself from the arguments being made in the setting-
the side of disclosure, even regarding aside proceedings, there remained an appearance that he
might not be able to keep the two roles strictly separate.
small or insignificant connections. This appearance was enough to justify a doubt as to
impartiality. As Gaillard stood down as counsel, no conflict
DISCLOSURE
Rowan Planterose (left) is managing partner and Steven Friel is a ■ the coming-of-age of the doctrines of separability and
dispute resolution partner at Davies Arnold Cooper competence-competence; and
The contracts contained a ‘law and litigation’ clause, which provided as follows:
41(a) This charter shall be construed and the relations between the parties determined in accordance with the laws of England.
(b) Any dispute arising under this charter shall be decided by the High Court in London to whose jurisdiction the parties hereby agree.
(c) Notwithstanding the foregoing, but without prejudice to any party’s right to arrest or maintain the arrest of any maritime
property, either party may, by giving written notice of election to the other party, elect to have any such dispute referred…
to arbitration in London…
(i) A party shall lose its right to make such an election only if:
(a) it receives from the other party a written notice of dispute which –
(1) states expressly that a dispute has arisen out of this charter;
(2) specifies the nature of the dispute; and
(3) refers expressly to this clause 41(c)
And
(b) it fails to give notice of election to have the dispute referred to arbitration not later than 30 days from the date of
receipt of such notice of dispute… [emphases added]
Issues under consideration competing considerations that the court had to take into
Liberal construction of the arbitration clause account:
The first question to be considered by the Court of Appeal
was whether the arbitration clause was wide enough to ■ On the one hand, there was the fact that, if the
cover allegations that bribery had induced the arbitration was allowed to proceed, it would almost
charterparties. Counsel for the parties pursued arguments certainly do so concurrently with the High Court
based on the differences between arbitration clauses that litigation, in which the fraud allegations were being
refer to disputes ‘arising under’ and disputes ‘arising out considered in a wider context.
of’ the relevant contract. After citing a large number of
authorities (from Heyman v Darwins Ltd [1942] to The ■ On the other, there was what Longmore LJ described as
Delos [2001]) on the construction of arbitration clauses the presumption in favour of ‘one-stop arbitration’, by
and the subtle differences in language used therein, which he meant that, rather than a court deciding on
Longmore LJ held that the arbitration clause was wide whether a contract should be rectified, avoided or
enough to allow the arbitral tribunal jurisdiction to decide rescinded, followed by an arbitration on the merits of
the bribery allegations. He stated: the dispute, it was to be presumed that the arbitrators
should decide on all the relevant issues.
… the time has now come for a line of some sort to be
drawn and a fresh start made at any rate for cases in an That the presumption in favour of one-stop arbitration
international commercial context… If businessmen go was not rebutted by the resultant concurrency of
to the trouble of agreeing that their disputes be heard… procedures (High Court litigation and arbitration) shows
by a tribunal of their choice they do not expect (at any how far the English courts have come from the days when
rate when they are making the contract in the first place) a presumption in favour of arbitration was readily
that time and expense will be taken in lengthy argument rebutted. In this context of supporting arbitration,
about… whether any particular cause of action comes Longmore LJ’s judgment in Fiona Trust can be seen as
within the meaning of the particular phrase that they following a path taken by Lord Steyn in Lesotho Highlands
have chosen in their arbitration clause. If any business Development Authority v Impregilo SpA & ors [2006].
man did want to exclude disputes about the validity of a
contract, it would be comparatively simple to say so… Separability
It seems to us that any jurisdiction or arbitration clause It has long been accepted in English law that an
should be liberally construed. arbitration clause is a separate agreement that survives
the destruction (or other termination) of the parent
This statement has been welcomed by many. It is contract. The principle is that the arbitration agreement
widely considered that one of the main threats to the gives rise to a distinct legal obligation and is not
flexibility of London arbitration and to the success of the conditional on the rest of the contract. This principle is
1996 Act is the increasingly litigious nature of the process given statutory form by s7 of the 1996 Act, which states:
and the tendency by unwilling parties to arbitration to
engage in lengthy jurisdictional arguments based on Unless otherwise agreed by the parties, an arbitration
semantic readings of the arbitration clauses in question. agreement which forms or was intended to form part
The Court of Appeal has, to large extent, now put a lid on of another agreement (whether or not in writing) shall
these arguments and sent the very clear message that if not be regarded as invalid, non-existent or ineffective
you refer to arbitration, then arbitration you shall have. because that other agreement is invalid, or did not
come into existence or has become ineffective, and it
One-stop arbitration shall for that purpose be treated as a distinct
The Court of Appeal judgment can be viewed as agreement.
particularly supportive to arbitration if we consider two
In Fiona Trust, the limits of the doctrine of separability
were tested. The evidence before the court was that the
In Fiona Trust, Longmore LJ held that the owners would not have entered into the charterparties at
arbitration clause was wide enough to all if they had been aware that their employees had been
bribed. With no contract, the argument went, there could
allow the arbitral tribunal jurisdiction to have been no arbitration agreement.
Longmore LJ posed the question of ‘whether the
decide the bribery allegations. assertion of invalidity goes to the validity of the arbitration
clause, as opposed to the validity of the charterparties as a
whole of which the arbitration agreements are a part.’ In Arnold Cooper has decided to undertake and we hope to
answering this question, he stated: publish our findings by the end of this year.
It is not enough to say that the bribery impeaches the Complex international frauds
whole contract unless there is some special reason for In the context of the Fiona Trust case, it has been asked
saying that the bribery impeaches the arbitration whether London arbitration is best equipped to deal with
clause in particular. There is no such reason here. multi-jurisdictional fraud allegations. Can an arbitral tribunal
move quickly enough, and does it have the requisite powers
The separability doctrine is, of course, not peculiar to of subpoena, investigation and preservation of assets to
English law. Many jurisdictions have adopted Article 16 of the ensure that justice is done in these cases? Many would say
UNCITRAL Model Law on International Commercial that, together with the assistance and supervisory
Arbitration, which provides that ‘an arbitration clause which jurisdiction of the English High Court, there is no reason why
forms part of a contract shall be treated as an agreement London arbitration cannot handle these cases effectively.
independent of the other terms of the contract’. See, for However, would an alleged victim of a complex international
example, s1040(1) of the German Code of Civil Procedure and fraud, who is forced to arbitration despite the allegations of
s13B of the Hong Kong Arbitration Ordinance. fraud, necessarily agree?
Despite its almost universal acceptance, the doctrine of
separability has been under attack. Many arbitrators will Conclusion
be comforted, however, by the knowledge that the English Fiona Trust provides Court of Appeal authority that
Court of Appeal is not the only important domestic court to arbitration clauses in international commercial contracts
vigorously defend it. In the 2006 case of Buckeye Check should be construed in a liberal and expansive fashion.
Cashing Inc v John Cardegna et al, the US Supreme Court, The Court has drawn a line under previous case law, which
by a majority of 7-1, reaffirmed that the doctrine applies in had laboured on the precise forms of wording of dispute
the US. In overturning a decision of the Florida Supreme resolution clauses, and has set a precedent that the
Court, which had held that Florida state law did not allow English courts should no longer scrutinise the minutiae of
parts of an illegal and void contract to be severable, the US the wording. In doing so, the Court has further
Supreme Court established that the landmark 1967 strengthened England’s status as an arbitration-friendly
decision in Prima Paint Corp v Flood & Conklin Mfg Co jurisdiction, where commercial parties will benefit from
continued to hold good. greater certainty that arbitration clauses will be upheld.
In addition, this case has upheld the all-embracing
Competence-competence principle doctrine of severability and confirmed that it applies to
Although not referred to in terms by the Court of Appeal, contracts where it has been alleged that the contract in
the Fiona Trust case provides further support in England question has been procured by bribery. The Court of
for the principle of competence-competence and takes us Appeal has reiterated that, under s7 of the 1996 Act, an
further away from the pre-1996 days, when it was arbitration clause that forms part of a contract will be
generally thought that arbitrators could do no more than treated as an agreement independent of the other terms
express a view as to whether they had jurisdiction – the of the contract and that it is possible to arbitrate disputes
ultimate decision always being reserved for the courts. as to the illegality of a contract, including circumstances
The question of whether England should more fully where there has been alleged bribery.
embrace the principle of competence-competence was
raised recently by a body set up to review the 1996 Act on
its tenth anniversary. As it stands, a tribunal’s decision on Buckeye Check Cashing Inc v John Cardegna et al
jurisdiction is open to challenge under s67. Further, when 126 S Ct 1204 (No. 04-1264, February 21 2006)
considering the challenge, an English court is entitled to Fiona Trust & Holding Corporation & ors v Yuri Privalov & ors
consider the question of jurisdiction de novo and is in no [2007] EWCA Civ 20
way bound by the tribunal’s findings of fact or law. Heyman v Darwins Ltd
Although the review committee concluded that it was not [1942] AC 356
yet time to amend this position in English law, the Lesotho Highlands Development Authority v Impregilo SpA & ors
committee did state that further research was necessary [2006] 1 AC 221
on the question whether the current English position has a Prima Paint Corp v Flood & Conklin Mfg Co
detrimental effect on London arbitration – are [1967] 388 US 395
international parties wary of arbitrating in London due to The Delos
the risk of English courts rehearing and re-deciding [2001] 1 Lloyds Rep 703
jurisdictional issues? This is a research task that Davies
DAMAGES
Expert analysis
The use of experts in assessing complex damages can be an important aspect of
international arbitration. LECG’s James Nicholson and Mark Bezant provide an
insider’s perspective
DAMAGES
DAMAGES
from the other party, and pointing out disclosure-related arbitration, the client CEO and CFO based themselves at our
issues that the other party may raise. In a recent post- offices in the week before our deadline, furiously discussing
acquisition dispute, based on our input, counsel for the issues amongst themselves before suggesting yet another
other party was forced to admit to the tribunal that key potential set of disclosure. When that disclosure came, it was
board documents relating to the proposed price of the late and contradictory, and was hard for us to use. Delayed
acquisition had not been disclosed. His explanation that disclosure of important documents can create as many
there were several versions, and that his client was not difficulties for an expert as being brought late into a project.
sure which one to disclose, left the tribunal in no doubt as It is also important to manage any tensions between the
to the true significance of this omission. An experienced client and the expert. This is helped by the client having a
expert, engaged sufficiently early, can alert the client to clear understanding of the role of the independent expert at
such lines of enquiry and the potential damaging effect. the start of the project. Tensions can also arise within the
team. One relatively inexperienced manager returned from a
Managing the process meeting with counsel that the expert was unable to attend
Importantly, experts need time to do their work. Being an and showed the expert a redrafted report – to be met with
expert is hard – there are extensive materials to master, howls of laughter. ‘As soon as the other side see this,’ the
damages frameworks and scenarios to develop, logic-flows expert explained, ‘they’ll know it was written by counsel. The
to think through, alternative views to anticipate, existing tribunal will pick up on that too.’The offending drafting was
analysis to interpret and new analysis to plan and execute. removed, but the helpful review points were incorporated.
One’s reputation is permanently on the line when signing a Particularly on long and complex projects, it may help
report or giving oral evidence. Doing all this well takes time. for the expert to produce interim ‘issue papers’ on topics
Time can also promote efficiency. It is much more efficient to relevant to the case. In one arbitration, producing such a
do the analysis once the disclosure and witness statements paper revealed a number of issues on which the client and
are largely complete, and to write the report once the the legal team had differing understandings, and aided
analysis is largely complete, rather than doing these in resolution of those issues. Significant elements of such
parallel. Early involvement should not necessarily mean the documents can readily be incorporated into formal
expert or their team is working full-time from that point, but reports that are produced for tribunals.
will avoid the pitfalls of time pressure. We have extensive experience working on investment
A vital first step is to ensure that the relevant issues are treaty arbitrations that often revolve around disputed
correctly framed. A damages expert will typically bring a investments in utilities or infrastructure projects, and we are
different perspective to the quantum issues of a case than familiar with such industries. Where this is not the case,
those anticipated by the legal team – and often needs however, we need assistance to understand an industry or
clarity on the precise basis of damages that they are being project. In such a situation, where possible and appropriate,
asked to assess, which is typically achieved through a site visit by the expert is valuable. Such visits typically
discussion with the legal team. Generating that clarity at clarify our thinking and deepen our understanding of the
an early stage is very important. Needless to say, regular issues involved in a matter. We also find, in giving oral
update meetings and teleconferences are vital. testimony, that being able to state that we are familiar with
It is also essential, in our experience, to discuss the nature the relevant industries and have visited the relevant sites
of the required output early, including the outline of the final can in some cases add authority to our testimony.
report. This is a key means of forcing issues into the open
that might otherwise remain hidden, and of promoting Output
efficiency in developing hypotheses and the report itself. Report generation is very time-consuming. Even when the
A barrier to completing an expert report often arises issues are framed and detailed analysis has been
from delays over disclosure. When information is performed, it takes some time to draft a clear and careful
forthcoming, several iterations are sometimes still required report. The difficulty of report generation is one major
before the information is clear and complete. In one reason why costs can climb above expectations. Any
uncertainty, unexpected disclosure, or significant late
changes to instructions adds rapidly to the cost and delay,
It is essential to discuss the nature of the so it is essential to work hard to minimise such issues. If
required output early. This is a key means you have already chosen the right expert and kept close to
their work and the report outline, this will help
of forcing issues into the open that might considerably in minimising surprises in the nature as well
as the cost of the expert’s opinion.
otherwise remain hidden. The report is one of the expert’s key outputs. Experts
should aim for high-quality, zero-defect reports. This
DAMAGES
LITIGATION
Caught in court
Arbitration disputes are increasingly ending up in court, raising questions as to
whether this pays proper regard to the wishes of the parties. Wragge & Co’s
Andrew Manning Cox considers the message the courts ought to give when
invited to adjudicate arbitration issues
LITIGATION
LITIGATION
LITIGATION
Sumukan Ltd v The Commonwealth Secretariat [2007] the applicant sought permission to appeal the arbitrator’s third
The claimant sought leave to appeal the decision of the tribunal award. That too failed but only after the judge considered some
on a point of law. The Court held that, on the wording of the underlying facts – thereby removing the confidentiality of the
arbitration clause, the parties had agreed for the purposes of dispute, at least in relation to these issues.
s69 of the 1996 Act to exclude the jurisdiction of the Court. The
claimant argued that such an exclusion infringed its rights CGU International Insurance plc & ors v
under Article 6 of the European Convention on Human Rights AstraZeneca Insurance Co Ltd [2006]
1950 (ECHR): the right to a fair hearing before an impartial A partial arbitration award on a preliminary issue ended up in
tribunal. The Court of Appeal held that the 1996 Act permitted the Court of Appeal. On 1 December 2005, the judge refused an
the incorporation by reference of an agreement excluding the application under s69(8) of the 1996 Act for permission to
right of appeal and that such incorporation was not contrary to appeal the award. The applicant, AstraZeneca, alleged that
the ECHR. Earlier this year, the Court also refused the claimant’s refusal was unfair. The Court of Appeal delivered its judgment
subsequent challenge to the award on the grounds that the in October 2006, 18 months after the original award,
arbitral tribunal lacked substantive jurisdiction and there had confirming there was no unfairness in the judge’s decision.
been serious irregularity in the form of bias.
ASM Shipping Ltd of India v TTMI Ltd of England [2006]
Elektrim SA v Vivendi Universal SA & ors [2007] Another decision from the Court of Appeal and, again, another
The applicant issued court proceedings to set aside a partial refusal to grant relief to a party dissatisfied with an arbitration
arbitration award, alleging that the actions of the respondent award. As in Sumukan, the dissatisfied party attempted to rely
amounted to fraud. Under the 1996 Act an award is on the ECHR to avoid being bound by the award. The judge at
unenforceable if obtained by fraud. The Court held there was no first instance dismissed a challenge to an award on the ground
link between the alleged fraudulent actions of the respondent and of serious irregularity for apparent bias. On appeal the
the award. It could not be said that the award was obtained by applicant argued that the judge’s decision contravened Article 6
fraud and so the Court refused to set the award aside. of the ECHR. The Court of Appeal refused the application for
leave to appeal on the grounds that they lacked jurisdiction
Chaim Kohn v Sheva Wagschal & ors [2006] because there was no realistic argument that the judge’s
The Court refused to set aside an order enforcing the award of decision contravened the ECHR.
an arbitrator, finding that the objections to the enforcement
were specious. The applicants alleged that to enforce the award Lesotho Highlands Development Authority v
would be to enforce an arrangement tainted with illegality, that Impregilo SpA & ors [2005]
an agreement that the award would not be enforced had been This case involved the power of the arbitral tribunal to decide
made which superseded the award, and also raised the currency in which to make their award and the power to
jurisdictional objections. The Court found no evidence of award interest. The House of Lords decided that the erroneous
illegality and no binding agreement. The applicants’ exercise of an available power could not by itself amount to an
jurisdictional arguments were also rejected. The Court found excess of power under s68(2)(b) of the 1996 Act and neither
there was no basis for objecting to the award. However, in could a mere error of law. Lord Steyn stated:
dealing with the applications the Court had to look at the detail
of the dispute and it was recorded in the judgment. I am glad to have arrived at this conclusion. It is consistent
with the legislative purpose of the 1996 Act, which is
Sinclair v Woods of Winchester Ltd & anor [2006] intended to promote one-stop adjudication. If the contrary
The applicants tried on two separate occasions to challenge an view of the Court of Appeal had prevailed it would have
arbitration. First, they applied to the Court to remove the opened up many opportunities for challenging awards on
arbitrator and to set aside his first award for serious irregularity the basis that the tribunal exceeded its powers on ruling on
under s68 of the 1996 Act. The attempt failed. Over a year later the currency of the award.
the UK as a centre of excellence for international arbitration, Additionally, it is hoped that attempts to undermine the
will be damaged. agreed dispute resolution forum simply in an attempt to
It is to be hoped that the recent guidance set out in Fiona avoid liability under an award will be strongly discouraged
Trust will be followed by further robust court decisions and we will in future see far fewer reported decisions
extending to challenges during the arbitration process. arising from the litigation of international arbitration.
Tipping
the balance
While China and Russia’s rapidly growing Gazing across Shanghai’s ever-changing cityscape,
with its endless sea of skyscrapers, it’s impossible
economies present enormously attractive not to be filled with a sense of all-conquering
optimism. Meanwhile, Russia’s novye bogaty –
among whom the oligarchs reign supreme – pass
investment opportunities, they are also their time washing down Beluga caviar with
imported vodka, driving around the streets of
notoriously difficult markets to operate in. Moscow in luxurious European saloons and
contemplating their next mega-merger. The
Chris Johnson navigates the pitfalls opportunities, as they say, are without limits. But
even in such fertile investment climates, it pays to
be prepared for the worst.
Shortly after 5am on 23 October 2003, the private jet of
Mikhail Khodorkovsky – head of the oil company Yukos
and then Russia’s richest man – touched down at a
Siberian airport. The scheduled stop was part of a tour of
Yukos and Sibneft (now Gazprom Neft) production
facilities. Little did Khodorkovsky know that he was flying
straight into a trap. Two vans of FSB (successor to the KGB)
operatives, sped across the tarmac. The heavily armed
operatives then stormed the plane and arrested
Khodorkovsky at gunpoint. Subsequent charges of tax
evasion were to have drastic consequences for Yukos and
Khodorkovsky. The government froze the company’s
shares eight days after the arrest, and the proposed
merger with Sibneft fell through. On 31 May 2005,
Khodorkovsky was sentenced to nine years in prison,
where he still languishes.
A 2005 Resolution by the Council of Europe’s some clients who might prefer dealing with a firm that was
Parliamentary Assembly was scathing in its assessment of not involved in such cases,’ Goldberg warns.
the arrest. It says: ‘the interest of the state’s action goes The arbitration is based on the offer to arbitrate that is
beyond the mere pursuit of criminal justice, and includes found in the Energy Charter Treaty (ECT), which gives
elements such as the weakening of an outspoken political substantive protection against issues such as
opponent, the intimidation of other wealthy individuals expropriation and governmental interference, and
and the regaining of control of strategic economic assets.’ ensures that parties receive fair and equitable treatment in
any subsequent disputes.
Heavyweight claim ‘With Yukos, there is a clear violation of the treaty – you
This has given rise to the largest-ever investment should not expropriate without proper compensation,’
arbitration: a claim against the Russian state by the majority suggests Gaillard. ‘It is a violation of fair and equitable
shareholders of Yukos, the value of which could exceed treatment, and it is hard to deny that this was politically
$50bn. It is understood that several firms passed on the motivated.’
chance to represent Yukos in this landmark dispute. ‘This The main point of contention is whether Russia is
case has a strong political flavour, which drove many firms actually bound by the ECT. While the Russian Federation
away from it,’ says David Goldberg, co-head of SJ Berwin’s became a signatory state of the treaty in 1994, it has
international arbitration group. ‘Doing business in Russia, not yet ratified. This, it claims, renders it exempt, as
one would generally consider whether to take on a case signing is just a declaration of intent and therefore has
which is so politicised.’ no legal value.
However, he suggests that, rather than any threat to Gaillard sees no such uncertainty, however. His
personal safety (‘those days are gone,’ he says), taking such argument centres on Article 45 of the ECT, which states
a case is potentially damaging to your business. that the treaty is immediately applicable upon signing,
Emmanuel Gaillard, head ofShearman & Sterling’s unless the country specifically opts out. Some countries,
international arbitration practice, accepted the instruction to such as Norway, did make such a declaration when
advise Group Menatep – Khodorkovsky’s holding company signing. Russia did not. ‘Therefore it technically is binding,
and majority shareholder in Yukos. ‘Shearman & Sterling so we have started an arbitration with an initial claim of
doesn't operate in Russia now. While I don't think taking this $33bn as compensation for the 60% stake of Yukos,’ says
case would affect its ability to open an office, it may deter Gaillard (see ‘Pensions crisis’ box below).
Pensions crisis
There are some parties for which arbitration is not even a possibility. American pension funds, which accounted for
a significant proportion of Yukos’ capital (Gaillard estimates it to be in the region of 20%), are not covered by the
ECT as the US – which prefers to negotiate on a bilateral, rather than multilateral basis – is not a signatory member.
‘The bondholders were screwed – basically the US pension funds lost $20bn for the US not having even signed the
ECT,’ Gaillard explains.
3.6%
Treasury shares
Group Menatep
Keeping a finger on the scales This was certainly the case when, on 30 April 1984,
This lack of independence is made startlingly apparent by Occidental Petroleum Corporation entered into a joint
guidance distributed by the Ministry of Justice-controlled venture with China National Coal Development – the
All China Lawyers Association in March 2006. It clearly Chinese ministry’s development subsidiary – to establish a
states that lawyers who handle cases of ‘a mass nature’ major open-pit coal mine in Shanxi province. Disagreements
(ten or more people serving as one party to the matter) over issues such as financing caused the project to collapse,
‘shall accept supervision and guidance by judicial with the subsequent dispute falling back on a Stockholm
administration departments’, and must ‘promptly and arbitration clause contained within the agreement.
fully communicate with the relevant justice bureau’. ‘That clause was enormously helpful,’ says Michael
This is in direct contravention to the ‘Basic Principles on Moser, head of O’Melveny & Myers’ Asia practice. ‘It was
the Role of Lawyers’, as adopted by the United Nations extremely high pressure, but the proceedings in Stockholm
General Assembly in 1990, which demands that finally pushed the parties to a settlement. If that had been
governments ensure lawyers are able to perform their a Chinese arbitration clause then I don’t think the Chinese
professional functions ‘without intimidation, hindrance, parties would have settled. It would’ve been very difficult,
harassment or improper interference’. and ultimately the foreign party could have lost.’
Unsurprisingly, then, companies with dealings in China
and Russia are increasingly insisting that arbitration clauses A risky game
are written into commercial contracts, in an attempt to avoid Among clients’ primary concerns over arbitral awards are
exposure to such third-party influence in any disputes. recognition and enforceability. ‘Arbitration is no panacea,’
2 250
Total number of disputes (millions)
be done. Zhang Decai, a lawyer at Beijing-based firm Shenzhen, home to China’s domestic stock exchange,
Zhonglun Jintong, was suspended and ‘severely presents the most shocking example of just how
reprimanded’ last February for conducting secret meetings widespread a problem corruption is. Following a series of
with arbitration officials overseeing a dispute between raids between June and October last year, five senior
Fuji Xerox and the firm’s client, Tianjin Guangyin Real judges – including three court presidents – were arrested
Estate. Then Wang Shengchang, the secretary general of on charges of corruption and bribery. 20 further judges in
CIETAC, was arrested in March 2006 under charges of the region were also implicated in what amounts to the
‘illegally distributing state assets to staff’. The charges, for city’s largest ever judicial corruption case.
which he could face up to seven years in jail, relate to ‘case
handling fees’ paid to commission employees. Redressing the balance
‘Nobody is really quite sure what the situation is,’ the Change is afoot, however, with the domestic institutions of
senior figure in China says. ‘One of the allegations against both countries currently undergoing a process of reform,
Mr Wang is that he made a decision in a Stockholm designed to bring procedures into compliance with
arbitration that went against very powerful interests in a international norms and standards.
Chinese company. There are concerns over this The new CIETAC rules, which came into effect on 1 May
politicisation and corruption. The independence of the 2005, have been described as ‘the most significant update
judiciary continues to raise questions.’ of CIETAC rules in the past twenty years’. The most notable
Statistics
As Table 1 shows, the LCIA handles far more Russian and Eastern European disputes than Chinese disputes, thanks
in part to a sustained marketing campaign in the region. Its relatively low level of Chinese disputes is a result of a
perception by the Chinese that the LCIA is ‘not international enough’. Russia’s 17 cases in 2006 made it the country
with the most disputes handled in the SCC other than Sweden (which had 102 out of the total 141, including
domestic disputes), with Germany coming in third with 12.
4
The ICC’s proportionally
high level of Chinese
Russian disputes can be explained
3
% of total disputes
0
2001 2002 2003 2004 2005
Year
LATIN AMERICA
Growth market
Foreign investment in Latin America, particularly from the US and Spain, has
resulted in an increase in arbitration in the region. José Maria Alonso of Garrigues
examines how countries in the region have developed common ground on
international arbitration, and suggests how they can continue to improve
Changing viewpoints
In Latin America, international arbitration was often
viewed in the past as an alien institution. The factors that,
historically, contributed to a sometimes distant perception
José Maria Alonso is managing partner of Garrigues and of this private form of ADR in the context of international
responsible for the firm’s international arbitration team disputes included the absence of a proper legal
LATIN AMERICA
LATIN AMERICA
impose an obligation on local courts to respect the validity (i) the right to fair and equitable treatment;
of arbitral decisions and to recognise and enforce foreign
arbitral awards, thereby limiting the possibility of refusal (ii) the right to receive the same treatment as domestic
to recognise or enforce an arbitral award to a number of investors;
strictly defined cases. These relate to the incapacity of any
of the parties, the denial of due process, the making of (iii)the right to be compensated in the event of
ultra vires awards, a breach of the agreement on expropriation, including indirect expropriation;
appointment of arbitrators or on the arbitration
procedure, the non-arbitrability of the dispute, and (iv)the right to transfer funds related to investments
contravention of public policy. without restrictions; and
ICSID Convention and BITs (v) the right to receive the ‘most favoured nation’
In the area of investment protection in Latin America, treatment.
recognition should be given to the decisive role played
by the Convention on the Settlement of Investment An important contribution by modern BITs is that they
Disputes between States and Nationals of Other States (the expressly provide for the possibility of investors
ICSID Convention), signed in Washington on 18 March (individuals or legal entities) submitting their disputes with
1965 and ratified by Spain in 1994. the host state to international arbitration. Most BITs
The International Centre for Settlement of Investment envisage recourse to arbitration as an ADR method for any
Disputes, which was set up under the auspices of the ICSID disputes arising from them. The terms of their provisions
Convention, has played and continues to play a crucial role usually vary – some BITs allow the parties to choose
in the field of dispute resolution between Latin American between various sets of arbitration rules, while others
countries and foreign investors, basically through directly refer to certain specific arbitration rules. Most
arbitration. ICSID is an institution attached to the World commonly, they allow the investor to choose between
Bank and came into being partly due to the need to free various types of arbitration. Apart from ICSID arbitration,
the President of the World Bank and its staff from having the investor may be able to choose between, say, an ad
to frequently become involved in disputes hoc arbitration subject to the United Nations Commission
between investors and the states receiving their on International Trade Law Arbitration Rules, or an
investment. It was also set up to create a climate of trust arbitration administered by the International Court of
between states and foreign investors and thereby Arbitration of the International Chamber of Commerce .
encourage access by developing countries to international The Spanish state has signed BITs with most Latin
capital. Nowadays, ICSID facilitates investment dispute American states. Colombia has signed a BIT with Spain,
resolution between contracting states and nationals of but it has yet to enter into force.
other contracting states through conciliation and At present, over 150 countries have signed the ICSID
arbitration proceedings. Convention, and most of the Latin American states are
Arbitrations at ICSID generally begin under bilateral among the 143 that have ratified it. However, there are
investment treaties or arbitration agreements – mostly countries that have an indisputable weight in the region,
taking the form of clauses in agreements signed by the such as Brazil, Mexico and Cuba, that have not yet ratified
states and investors. the Convention.
At present, there are nearly 2,000 BITs signed all over
the world. Although there is no pre-defined format for Looking ahead
treaties of this type, the structure and terms of many are The still relatively recent crisis in the Argentine economy,
very similar. The protection afforded by each party to and the policy of nationalisation now being pursued in
investments made by the other party in its territory Bolivia and in other Latin American countries, seem to
usually includes: have introduced an element of uncertainty into the region
of late. However, I believe that there are good reasons for
remaining upbeat on the future development of
Modern BITs expressly provide for the international arbitration and, more generally, of ADR
possibility of investors submitting their methods in the Latin American arena.
There has been positive convergence of Latin American
disputes with the host state to countries towards ‘common ground’ on international
arbitration, both in the area of international treaties and in
international arbitration. the area of their respective national laws. The great
challenge of the future for these countries is to achieve
LATIN AMERICA
some similarity in the approaches taken by their respective The New York Convention allows
state courts. This would create an increasingly uniform and
predictable body of case law on international arbitration. recognition of an award to be refused
Role of judges where it contravenes the public policy of
In Spain, it is fair to say that for years (even before the the country in which recognition is sought.
enactment of the current Spanish Arbitration Act of 2003)
judges have often shown that they understand that
arbitration – and, more particularly, international
arbitration – needs and deserves their respect and ‘Public policy’ has different meanings in different legal
protection. The recognition and enforcement of foreign traditions. In the English-speaking, common law tradition,
arbitral awards in Spain is a good example of this. public policy has a relatively narrow scope – addressing
If we take a look at the decisions of the Spanish Supreme ‘matters of public morals, health, safety, welfare, and the
Court from 1981 to 2003 (until the Arbitration Law of like’ – and is distinguishable from matters relating to due
2003, it was for the Supreme Court to decide on requests process. In the continental European tradition, public policy
for exequatur), approximately nine out of ten requests refers to a wider range of judicial concerns, which would
for exequatur of foreign arbitral awards were upheld. encompass breaches of procedural justice. In the context
Latin American judges have a crucial role to play in and tradition of international arbitration practice, the most
consolidating the achievement of modernising arbitration accepted meaning of ‘public policy’ is the broader one.
laws in the region, and should be aware that they have Indeed, the report from UNCITRAL on the Model Law on
two functions in relation to arbitration: support International Commercial Arbitration stated that:
(appointment of arbitrators, assistance with the taking of
evidence, adoption of interim measures, enforcement of … the term ‘public policy’, which was used in the
the award and exequatur of foreign arbitral awards) and 1958 New York Convention and many other treaties,
control (hearing applications to set aside awards). In covered fundamental principles of law and justice in
relation to the latter function, a uniform approach by the substantive as well as procedural respects.
state courts to the negative effect of arbitration
agreements, which prevent state courts from hearing To define a transnational notion of public policy, both
disputes already submitted to arbitration, and to the substantive and procedural, would be advisable, although
principle of minimum intervention, which prevents judges such a definition may be fraught with difficulties, mainly
from intervening in arbitration unless the law so provides, from the substantive standpoint. I believe that the
is decisive. arbitration community should focus on defining a
To fulfil the aim of achieving a growing and more common notion of procedural public policy as a first step.
predictable body of Latin American case law on In this regard, we can say that the basic principles that
arbitration, mainly for foreign parties, the training of govern transnational procedural public policy in
judges on arbitral matters is essential in the coming years. international arbitration may be subsumed under two
In Spain, the Spanish Arbitration Club has entered into an main categories: the right to equal treatment and a full
agreement with the General Council of the Judiciary – opportunity to present one’s case.
reflecting the commitment from both institutions to co-
operate in training judges on arbitral matters. It would be Future prospects
desirable to combine similar initiatives already in place in From the standpoint of a foreign investor or party to a
Latin America with further measures to encourage a more contract, the current situation and the prospects for
widespread use of arbitration in the future. international arbitration in Latin America can generally be
viewed as being good. Most Latin American countries
Defining ‘public policy’ have ratified the New York, Panama and ICSID Conventions
One specific field that is especially sensitive to this need for and have signed BITs with a variety of countries, including
the approximation of national bodies of case law on Spain. Furthermore, virtually all of the Latin American
arbitration is that of public policy. Taking into account that states have made major progress in the necessary task of
the New York Convention allows recognition of an award attuning their arbitration laws to the demands of
to be refused where it contravenes the public policy of the international trade today.
country in which recognition and enforcement of the Consequently, I have every confidence that Latin
award is sought, it would be desirable for there to be a American governments and state courts are fully aware of
common notion of public policy, or rather ‘international the requirements of international arbitration and will do
public policy’. their utmost to achieve that goal.
MULTIPLE PARTIES
Part one
Privity of contract
A commercial arbitration, and the tribunal’s powers in
that arbitration, derive from the arbitration agreement. A
tribunal, unlike a court, cannot require a third party to
become party to the proceedings. Even where the
claimant or respondent might want the third party to join
Guy Pendell (left) is a litigation and arbitration partner at CMS Cameron the proceedings, absent agreement between the parties
McKenna and Thomas Lennarz is a lawyer at CMS Hasche Sigle (including the third party), that will not occur.
MULTIPLE PARTIES
MULTIPLE PARTIES
Consolidation may arise where two (or more) separate avoids this by deeming the waiver of such rights where a
arbitrations exist and one or more parties to those new case is referred to an existing arbitral tribunal.
arbitrations wish the proceedings to be brought together. Parties are becoming more sophisticated in their choice
Consolidation of proceedings between the same parties in of arbitration agreements to attempt to confer on
relation to disputes arising under a single agreement should, institutions and tribunals wide powers to introduce new
at first glance, cause no problems and does not result in parties to arbitral proceedings and to order consolidation
third parties being joined. In many cases it will be economic where necessary. Such agreements are becoming common
for all such disputes to be determined in a single arbitration, in complex multi-party, multi-contract projects and banking
and the risk of inconsistent decisions will be avoided. transactions. However, even in these transactions, where
Consolidation may not be practical where one arbitration is possible, all parties to the various agreements will usually
significantly more advanced than the other, and if separate be party to a ‘master agreement’ that will incorporate
arbitral proceedings have been commenced, this may detailed consolidation and joinder provisions that will apply
indicate that one or both parties have a reason for the to all transaction documents. The intent behind such
separation of those proceedings. If the claimant has provisions is that all parties consent to the possibility that
multiple claims, ordinarily one would expect those claims to they might be joined to existing arbitrations or that their
be brought in the same proceedings. disputes under one or more transactional document might
If the same tribunal presides over both proceedings, be consolidated with any other related dispute. The
consolidation may be brought about through the skill and agreements often incorporate a waiver of each party’s right
guidance of the arbitrators. Where the proceedings are to nominate an arbitrator and set down guidance on the
presided over by different tribunals, consolidation is factors to be taken into consideration when deciding
unlikely. First, for consolidation to occur, one of the whether to join or consolidate. The agreements also explain
tribunals would have to step down (which, for various the procedures for consolidation and joinder, if ordered.
reasons, it may be reluctant to do). Secondly, each tribunal
has no power over the other (absent agreement between Part three
the parties) to order consolidation. Contractual third parties
Consolidation is recognised and available under some When can a contractual third party be joined? The
institutional rules. Article 4.6 of the ICC Rules expressly contractual third party might want to join with the claimant
provides for the possibility, on request of oneparty or respondent for the purpose of supporting it (third-party
(without the consent of the other party), for arbitrations to intervention). Conversely, the claimant or the respondent
be consolidated. It is only available where the terms of might have a legal interest in a contractual third party being
reference (for the arbitration) have not been signed or bound by the award, or at least by the facts determined by
approved by the ICC. The Swiss Rules have a similar the tribunal. If the contractual third party cannot be joined,
provision at Article 4.1, although there is no time limit on the respondent may face the current arbitration and then
the application of that rule. have to commence separate proceedings against this third
party, and risk contradictory decisions.
Consolidation between different parties
The circumstances in which arbitral proceedings involving Counterclaims
different parties can be consolidated are limited and such Most arbitral rules provide for the possibility of
consolidation will not occur unless the parties have counterclaims. A precondition is that the subject of the
consented (even where all parties to the arbitral proceedings counterclaim falls within the scope of the arbitration
are parties to the same arbitration agreement). Article 4.1 of agreement. The counterclaim will be directed at the
the Swiss Rules is the only provision in all the main rules that claimant, but the respondent might also wish to pursue,
expressly envisages consolidation of proceedings between with the counterclaim, a claim against a contractual third
different parties. Again, the difficulty will be the rights of the party. In theory, Article 4.2 of the Swiss Rules and Article
parties in relation to the formation of the tribunal; Article 4.1 22.1(h) of the LCIA Rules could permit such a third party to
be joined for the purposes of a counterclaim. However,
given that the LCIA Rules require consent of the third party,
Parties are becoming more sophisticated it is difficult to envisage many situations where a
in their choice of arbitration agreements contractual third party might willingly consent to be joined
in proceedings in order for claims to be made against it.
to attempt to confer on tribunals powers Thus, the respondent may not be able to join the
contractual third party. This raises the question of whether
to order consolidation where necessary. the arbitral process, therefore, favours the claimant, as only
the claimant can effectively choose the parties to the
MULTIPLE PARTIES
arbitration by identifying itself, other claimants and any investment treaty arbitrations. Investment treaty
respondents in the request for arbitration. arbitrations, as distinct from traditional commercial
In circumstances where the formation of the tribunal has arbitrations, involve a private investor and a state. They have
been left to an independent entity (for example, the relevant become increasingly common in recent years through the
institution or an appointing authority), there may be many treaties entered into across the world that confer
situations in which a contractual third party could fairly be rights on foreign investors. The treaties permit investors to
joined to the proceedings against its will. Indeed, a number claim for damages against a state where the state is alleged
of awards suggest this is possible. However, in cases where to breach the standards enshrined in the treaty. One
the tribunal has been nominated by the parties, that is likely striking difference between investment treaty arbitrations
to be precluded, unless the third party consents or has and commercial arbitrations is that they are not confidential
waived its rights relating to nomination or appointment. and, by their nature, stray into matters of public law.
Recent investment arbitration cases in the US have
Part four permitted non-party participation in proceedings by
Involvement of a non-party agreeing to accept submissions of ‘amicus curiae briefs’.
Absent consent from all the parties, participation by a non- This is largely because of the public interest that is
party is unlikely to occur. (In many cases, confidentiality considered to lie in the outcome of such proceedings
alone will prevent a non-party from participating.) This involving states, due to the significant consequences of the
situation is not, however, entirely different to litigation tribunal’s decision on the state budget and the welfare of
where individuals or groups affected by a dispute to which the people. Non-parties can seek to participate through
they are not a party are normally without a remedy or written or oral submissions, and gain access to hearings,
route to participate. It is here where the amicus curiae plays documents, submissions and awards. However, their
its part. The role of the amicus curiae is emerging in the precise role in the arbitration will be open to question. They
field of investment treaty arbitration. certainly will not be expected to participate as a full party
Before considering the amicus curiae, it is worth noting and are highly unlikely to bear any of the burden of the
some limited circumstances where non-signatories to the arbitral process (for example, the costs of the arbitral
arbitration agreement might be party to an arbitration. process other than their own costs).
Assignment, the English Contract (Rights of Third Parties) Recognising this trend, ICSID recently amended Article
Act 1999 and the ‘group of companies’ doctrine all operate 41 of its Arbitration (Additional Facility) Rules, which now
to permit non-signatories to participate in arbitrations openly contemplates non-party participation, requiring the
that would normally only arise between the contracting tribunal only to consult rather than secure the consent of
parties. What is common in all these circumstances is that the parties. Draft amendments to the ICSID Rules (Articles 32
the non-party has usually participated in the contractual and 37), which contemplate transparency in relation to
relationship in some way. In these circumstances the non- awards and expressly allow for amicus submissions, have
party is likely to be a willing participant in the arbitration. now been adopted by the ICSID Administrative Council. The
This is not always the case with the group of companies UNCITRAL Rules (which are also commonly used for
doctrine. However, the doctrine is not universally accepted investment treaty arbitrations) contain no such provisions
and is not, by way of example, recognised under English at present, but the UNCITRAL Working Group has under
law. Circumstances might also arise where it could be consideration amendments that will provide for greater
argued that a potential respondent to an arbitration could transparency for such arbitrations, including the
be estopped from denying it is a party to the arbitration introduction of amicus curiae briefs. The revision process,
agreement by its conduct. however, is not expected to be completed until 2008 and
the amendments are likely to be debated at length.
The amicus curiae
In line with its translation as a ‘friend of the court’, the Conclusion
traditional role of amicus curiae is someone who, from a Problems with third parties will remain whilst users and
position of impartiality, provides the court with an practitioners in arbitration continue to look for ways to
argument or information to supplement a legal argument, avoid them. Where the involvement of a third party is a real
by the court’s invitation. Current usage of the amicus prospect, the only practical remedy is to seek to deal with it
curaie device has worked to ‘fill in the cracks’ of English in the arbitration agreement.
litigation by providing an opportunity for a non-party to
be represented and to have some influence on the court’s
decision. BKMI Industrieanlagen GmbH v Ducto Co (Pty) Ltd
Non-party involvement in arbitration has emerged as a [1994] ADRLJ 36
topical issue with the involvement of amicus curiae in
DAMAGES
A certain
calculation
There are widely differing ways of quantifying the damages awarded in
commercial and investment-treaty arbitrations. Philip Haberman and Vikki Wall
of Ernst & Young consider the issues
Winning awards
A wide range of awards have been granted in recent years
within investment-treaty and similar disputes, based on a
wide range of calculation methodologies. These range
from quantification based solely on the cost of investment
Philip Haberman is a partner and Vikki Wall is an assistant director in to complex calculations involving projections for many
Fraud Investigation & Dispute Services at Ernst & Young in London years into the future to capture the loss of future profits.
DAMAGES
Damages based on the cost of investment appear to be and should be accounted for through the discount rate
preferred by tribunals where a contract or business is used in the DCF calculation.
stopped at an early stage, or when profits are deemed to be As we have explained, the discount rate takes account
too speculative, such as when an enterprise has not of both the changing value of money over time and the
operated for a sufficiently long time to establish a risks that future cash flow either will not crystallise or will
performance record or has so far failed to achieve a profit do so at amounts different from those predicted. A simple
(for example Metalclad Corporation and Tecnicas example will give some idea of how important the
Medioambientales Tecmed SA, see boxes below and on p52). discount rate is: if we predict a steady annual cash flow for
In our view, an award of this nature compensates the 20 years, its value is 12.5 times the annual cash flow at a
claimant for the cost of the lost investment, but not for the discount rate of 5%, but reduces to 8.5 times at a discount
benefits that would have been obtained from that rate of 10%, 6 times at a rate of 15%, 5 times at a rate of
investment. It therefore runs the risk of confusing the cost 20%, and only 4 times at a rate of 25%.
of an investment with the value of that investment. Clearly, it is important to get the discount rate right, or
At the other extreme lie those cases (for example the as close to ‘right’ as possible, by taking account of all the
Turkish electricity industry and CMS Gas Transmission appropriate risks and uncertainties inherent in the
Company, see boxes on p52 and p53) where there is more projections of future cash flow. A way of looking at this is
certainty of the profit stream, such as when an to consider three components of the discount rate – the
established contract is interrupted. Then tribunals seem time value of money, the relevant external economic
happy to consider the value of the lost future profits in factors, and the relevant operational factors.
determining the appropriate level of damages. They do so
using the well-established economic basis for estimating
the commercial value of a company or investment, the Metalclad Corporation v
discounted cash flow (DCF) method. This method requires The United Mexican States [2000]
future cash flows to be predicted and then discounted
back to the relevant date to reach a ‘present value’. Metalclad alleged that Mexico, through local governments, interfered
Discounting in this sense is something like reverse interest: with its development and operation of a hazardous-waste landfill.
it recognises that money to be received in the future is Metalclad claimed that this interference was a violation of the Chapter
worth less than money now. But it also recognises that Eleven investment provisions of NAFTA. In its award, dated 30 August
money that is likely to be received in the future is not 2000, the tribunal found that Metalclad had lost its entire investment.
certain to be received (the eventual receipt might be Metalclad proposed two alternative methods for calculating
greater or less than the amount assumed), and that damages: first a discounted cash flow analysis of future profits to
uncertainty needs to be taken into account. It is that establish the fair market value of the investment (approximately
uncertainty that is described in economic terms as the $90m); and, secondly, to value Metalclad’s actual investment in the
‘risk’ associated with future cash flow. landfill (approximately $20-25m), as well as additional claims for
Whilst the DCF method is the standard approach used alleged negative impact on its other business operations.
by financial and economic specialists, for example in The arbitral tribunal stated that:
international finance to estimate the value of a business or
its assets, other methods (such as price/earnings ratio) are Normally, the fair market value of a going concern which has a
also used. That will usually be because the detail required history of profitable operation may be based on an estimate of
for a DCF valuation is not available, or because there are future profits subject to a discounted cash flow analysis… However,
rules of thumb that can be used to simplify the valuation – where the enterprise has not operated for a sufficiently long time to
but those other methods are themselves based on DCF. establish a performance record or where it has failed to make a
profit, future profits cannot be used to determine going concern or
Certain uncertainty fair market value… The Tribunal agrees with Mexico that a
It seems to us unsatisfactory for there to be an unknown discounted cash flow analysis is inappropriate in the present case
point of time between too much uncertainty (leading to a because the landfill was never operative and any award based on
‘cost of investment’ approach) and sufficient certainty future profits would be wholly speculative… Rather, the Tribunal
(leading to a conventional DCF approach). We believe that, agrees with the parties that fair market value is best arrived at in
despite the reluctance of tribunals to use it in all this case by reference to Metalclad’s actual investment in the project.
circumstances, the DCF method can be used to calculate
the fair value of all going concerns, both new and The tribunal accordingly awarded an amount reflecting Metalclad’s
established ventures, and hence to evaluate damages in investment in the project, which, after certain deductions, totalled
all cases. The increased risk of start-up projects, or projects $16.6m (interest was added).
where future cash flows are particularly uncertain, can
DAMAGES
DAMAGES
DRAFTING
Court support
Several recent cases have shown that the English courts promote arbitration both
domestically and in Europe, but the need for clarity in contracts remains paramount.
Steve Abraham and Anna Kirkpatrick of Norton Rose look at why this is the case
DRAFTING
DRAFTING
as these an application to stay court proceedings was the The ECJ ruled in 2004 that it is no longer possible for
primary matter to be decided. such injunctions to be used within the EU. The ECJ held
The judgment is commercially astute and pragmatic, that such injunctions interfere unjustifiably with the
offering clarity concerning the scope of the arbitration business of the courts and, further, that they were
clause and providing welcome support for the arbitration inconsistent with EU Regulation 44/2001 (the Brussels I
process under English law. There is now less scope for Regulation), which regulates the allocation of jurisdiction
argument as to the effect of common forms of wording in between EU states. However, whether or not it is still
arbitration clauses, given the clear line drawn by the Court possible to use anti-suit injunctions to prevent proceedings
of Appeal. brought in breach of an arbitration agreement is unclear.
This was the question before the House of Lords in West
Liberal approach under threat? Tankers Inc v RAS Riunione Adriatica di Sicurta SpA & anor
National courts play an important role in supporting the (the Front Comor) [2007].
arbitration process. Parties generally choose the seat of In August 2000 Front Comor hit a jetty in Sicily. The
arbitration in the jurisdiction that is most suitable for charterparty was governed by English law and provided
them, choosing a location that promotes the parties’ for arbitration in London. The charterer claimed for its
choice to arbitrate. One advantage of England as a forum uninsured losses against the owners in arbitration (which
is that the courts have a long history of granting anti-suit is still underway) and recovered its insured losses from
injunctions to restrain court proceedings in England, Italian insurers. The insurers sought to recover these
Europe and further afield. An anti-suit injunction is a amounts from the owners in the Italian courts.
mechanism by which one state makes an order restraining The owners were granted a temporary anti-suit
a party from commencing or continuing court injunction in the Commercial Court, London, to stay the
proceedings in another state on the grounds that such insurers’ action in Italy in favour of the arbitration. The
proceedings are in breach of a court jurisdiction clause. insurers sought a discharge of this injunction.
It is not only when dealing with foreign or less familiar commenced arbitration proceedings and sought a declaration
countries that care should be taken when drafting dispute under s32 of the Act that this particular dispute should be
resolution clauses. The facts of Film Finance Inc v The Royal resolved by arbitration under clause 14 of the guarantee. FFI
Bank of Scotland [2007] serve as a reminder of difficult argued that this was a ‘dispute relating to delivery’ as referred
questions of forum that can arise even when dealing with a to in the first sentence of clause 14. RBS argued for a far
familiar jurisdiction such as England. narrower reading of clause 14.
Where parties draft complex clauses, there is a risk that In keeping with the spirit of Fiona Trust, Andrew Smith J
additional complexity leads to reduced clarity. In such cases, promoted a liberal approach to the interpretation of such
parties that believe they have agreed to arbitration may find clauses. When considering the nature of dual regimes, the judge
themselves in satellite litigation to determine the appropriate recognised that where the parties choose that some disputes
forum to hear the dispute. This is distracting and often costly. should be referred to arbitration and some to litigation, there
In this case, RBS provided €4.8m to Film Finance Inc (FFI) to was ‘always a risk that the parties might have to resort to both’.
finance a film. FFI guaranteed the completion and the delivery This problem was exacerbated by unduly narrow interpretations
of the film under a completion guarantee in favour of RBS. of such clauses. He rejected such narrow interpretations on the
Under clause 14 of the guarantee: basis that the parties cannot have intended ‘to make an
arbitration agreement that would result in [the] fragmentation of
… in the event of a dispute relating to delivery hereunder, the the resolution of their disputes’. He applied a wide interpretation
provisions for arbitration specified in Schedule III… shall apply. that avoided the problem of multi-jurisdiction dispute resolution,
Any dispute other than a dispute relating to delivery shall be and gave effect to the parties’ intentions. This was an approach
submitted to the jurisdiction to the courts of law of England. that provided ‘one-stop arbitration’ for the parties.
On the facts, the judge found that the word ‘delivery’ had an
Schedule III set out provisions relating to delivery disputes ordinary, rather than a technical, meaning. This dispute should
between FFI and the distributors of the film (and not to delivery be arbitrated under clause 14 of the completion guarantee.
disputes between RBS and FFI). The film was neither completed Insofar as schedule III was inconsistent with the arbitration
nor delivered on time, and RBS sought to enforce its right to clause, the wording of schedule III should be construed to give
payment under the completion guarantee in court. FFI effect to the arbitration clause.
DRAFTING
ENFORCEMENT
Reality bites
Only when arbitrations reach the enforcement stage does commercial reality kick
in for successful claimants, who realise how tricky it can be to achieve execution
of their award. DLA Piper’s Matthew Saunders and Claudia Salomon explain
ICSID Convention
The ICSID Convention provides an international regime for
arbitration of investment disputes. There are 143 parties to
Matthew Saunders and Claudia Salomon are co-leaders of the the ICSID Convention, under which legal disputes between
international arbitration practice of DLA Piper states and foreign investors are submitted to binding
ENFORCEMENT
ENFORCEMENT
Southern District of New York granted enforcement of an enforcement and execution of any award rendered by an
ICSID award against Liberia, but refused execution against Arbitral Tribunal constituted pursuant to this Agreement.
fees and taxes payable by shipowners in the US to Liberia.
The award arose from an ICSID claim by LETCO against However, even such clauses will not necessarily lead to
Liberia for the termination of a concession to harvest and the full panoply of execution processes being available – for
exploit Liberian timber. example, processes of committal and fining will not be
Following LETCO’s initiation of arbitration proceedings, available where the sovereign defendant has failed to
Liberia refused to participate in the arbitration and comply with an order as to the disclosure of assets.
commenced an action in the Liberian courts. Nonetheless,
the arbitral tribunal proceeded to enter an award against Public policy
LETCO for over $9m. Liberia opposed a Writ of Execution Courts may refuse recognition and enforcement of an
issued to the US Marshal for the Southern District of New arbitral award if it would be contrary to the public policy
York, on the basis that execution against its property (or ‘ordre public’) of the country in which it is sought. The
would contravene the FSIA. Liberia argued that by scope of the public policy exception is defined by the
entering into the forestry concession contract with LETCO domestic law of the country of enforcement and there is
it had not waived its sovereign immunity to enforcement no public international law definition of the concept. Due
or execution. The District Court disagreed. It was held that to the lack of certainty as to the remit of the public policy
Liberia, as a signatory to the ICSID Convention, had waived exception, this argument may be raised by an
its sovereign immunity in America with respect to unsuccessful respondent state in order to delay or avoid
enforcement of the arbitral award. However, Liberia was enforcement. While this is not a defence exclusively
not found to have waived its sovereign immunity to available to states, there is clearly scope for arguments
execution against its assets. The collection of taxes by the concerning bribery and corruption of government officials
government of Liberia constituted the exercise of a in relation to the procurement of contracts with states.
sovereign power, and not a ‘commercial activity’ within However, the public policy grounds for refusing
the exception provided for in s1610(a) of the FSIA, and enforcement are narrow, and such challenges rarely
therefore, such taxes were immune from execution. successful. For example, an award requiring payment under
In a subsequent application to the US District Court for a contract for assistance in obtaining a government contract
the District of Columbia, the Court refused execution against in Algeria was enforced by the English Commercial Court,
bank accounts of the Embassy of Liberia on the grounds of notwithstanding that the contract breached Algerian law
diplomatic immunity, pursuant to Article 25 of the Vienna (see Omnium de Traitement et de Valorisation SA v Hilmarton
Convention on Diplomatic Relations 1961 and sovereign Ltd [1999]). The English Court found that there were no public
immunity under s1609 of the FSIA, and an account of the policy grounds on which enforcement of the award could be
central bank of Liberia on the ground of sovereign refused, because the Swiss arbitral tribunal’s express finding
immunity. The Court stated that ‘… the concept of that there had been no bribery or corrupt practice was
“commercial activity” should be defined narrowly because ‘unchallengeable’. The Court considered that while a tribunal
sovereign immunity remains the rule rather than the applying English law might have arrived at a different
exception.’ conclusion, ‘as a matter of policy of the upholding of
A practical solution to the issue of sovereign immunity international arbitral awards’ the award should be enforced.
is inclusion, in the relevant contract or treaty with the The Court relied in this regard on the Court of Appeal’s
state, of a clause expressly waiving immunity from statement, in Westacre Investments Inc v Jugoimport-SDRP
execution. ICSID recommends the following model clause Holding Co Ltd [1999], that if an arbitral tribunal determines
(Clause 15) for that purpose: to enforce a contract that does not offend the domestic
public policy under the proper law of the contract or the
The host state hereby waives any right of sovereign curial law, the arbitral award should be enforced,
immunity as to it and its property in respect of the notwithstanding that English domestic public policy may
have taken a different view. In Westacre, the Court of Appeal
permitted enforcement of an award arising from a contract
A practical solution to the issue of that was for the purchase of personal influence from Kuwait
sovereign immunity is inclusion in the government officials in relation to arms contracts. On the
face of the award, performance of the contract was not
relevant contract of a clause expressly contrary to its proper law and the curial law, or the law of
the place of performance. While a contract for the purchase
waiving immunity from execution. of personal influence was contrary to English public policy, it
did not infringe a rule of English public policy so serious that
ENFORCEMENT
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AR07 Directory contents 19/4/07 13:16 Page 63
CONTENTS
INTERNATIONAL REFERRALS
Checklists
64 Portugal Sweden 66
Directories
69 Japan Switzerland 71
JURISDICTIONAL CHECKLISTS
JURISDICTIONAL CHECKLISTS
JURISDICTIONAL CHECKLISTS
Hammarskiöld & Co is an independent business law firm. The firm’s lawyers have broad experience across the range of legal issues that
companies can expect to confront. The firm has substantial expertise in advising on and handling the international implications of busi-
ness law issues and has a strong international practice. In order to meet the clients’ needs, the firm has formed a number of specialist
groups focusing on different practice areas. At the same time, the full resources of the firm are always available to clients to ensure that
their needs are met. The main areas are mergers and acquisitions, banking and finance, litigation and arbitration, EU and competition law,
TMT and intellectual property. The firm is a true partnership and is committed to providing the highest quality legal services.
Hammarskiöld & Co’s litigation and arbitration practice group specialises in commercial litigation and arbitration, both domestic and
international. The lawyers within the group have vast experience in both domestic and international arbitration. The lawyers frequently
participate in arbitrations under the Rules of the International Chamber of Commerce and the Stockholm Chamber of Commerce. The
practice group also handle other institutional and ad hoc arbitration proceedings. The members of the practice group also act as arbitra-
tors. The litigation lawyers are further active in district, appellate and supreme courts in large commercial disputes, which often involve
international aspects. The lawyers are used to participate in disputes involving application of foreign law and are experienced in obtaining
injunctions and enforcements in support of foreign proceedings.
The practice group place special focus on client service and on the client’s commercial interests. Where expertise in special areas is
required, the group works closely together with the firm’s other specialist groups to ensure that the clients’ needs are met with optimum
efficiency. The practice group has extensive contacts with well-regarded international law firms specialising within the field of litigation
and arbitration.
Website: www.kgdi.gr
JAPAN
Kioicho Building, 3-12, Kioicho, Chiyoda-ku, Tokyo 102-0094, Japan Languages spoken:
Phone: +81 3 3288 7000 Fax: +81 3 5213 7800 Japanese, English, French, German, Chinese
E-mail: info@noandt.com Website: www.noandt.com
Number of lawyers: 259
Nagashima Ohno & Tsunematsu is Japan’s foremost provider of international and
commercial legal services. The firm’s practice areas include arbitration and litigation; Contacts:
multimedia, technology and intellectual property; real estate; capital and debt markets; Hisashi Hara,
mergers & acquisitions and new ventures; financial services; corporate and commercial; Ms Yuko Tamai
energy; taxation; and construction. Our arbitration and litigation practice includes: (Dai-ichi Tokyo Bar Association)
• Antitrust litigation • Intellectual property litigation
• Commercial litigation • Products liability litigation
• Banking and insurance litigation • Real estate litigation
• Employment and labour litigation • Tax litigation
PORTUGAL
Rua Soeiro P. Gomes, L 1, 2nd Floor, 1600-196 Lisbon, Portugal Languages spoken:
Phone: +351 21 781 4800 Fax: +351 21 781 4802 Portuguese, English, French and Spanish
Website: www.mirandalawfirm.com Number of partners: 13
Number of fee-earners: 80
• Litigation and arbitration • Shipping
• General corporate business and • Real estate Contact partner:
commercial law • Employment Agostinho Pereira de Miranda
• Mergers and acquisitions • Taxation Chairman and head of arbitration
• Project finance and PPPs • Agency and distribution practice group
• Privatisations and public tenders • Intellectual property and IT agostinho.miranda@mirandalawfirm.com
• Energy and natural resources • Environment Direct line: +351 21 781 4811
• Banking and finance • Administrative
• Oil and gas • EU and competition
43, Aviatorilor Boulevard 1st District 011853, Bucharest, Romania Number of partners: 9
Phone: +40 21 202 5900 Fax: +40 21 223 3957 Number of associates: 66
E-mail: general@musat.ro Website: www.musat.ro Number of counsel: 35
Contacts:
Litigation/arbitration is a substantial approach to the assessment and conduct of
Gheorghe Musat, managing partner
practice of Musat & Asociatii. litigation cases on behalf of our clients. Our
musat@musat.ro
The litigation department is organised litigation team has successfully represented
Ion Dragne, partner
along departmental lines and has acquired governmental bodies, major privately-held
dragnei@musat.ro
the expertise and ability to offer litigation companies, as well as leading banks in
capabilities on large complex matters. It is multi-million-dollar cases in national and
comprised of 20 lawyers, all of whom are international arbitration (ICSID, ICC and
top litigators with a business-oriented UNCITRAL procedures).
Tuca
, Zbârcea & Asociatii
,
Victoriei Square, 4-8 Nicolae Titulescu Ave, America House, West Wing, 8th Floor, Sector 1, Number of partners: 10
Bucharest 011141, Romania Number of associates: 53
Phone: +40 21 204 8890 Fax: +40 21 204 8899 Number of counsel: 30
E-mail: office@tuca.ro Website: www.tuca.ro
Contacts:
Our litigation/arbitration practice group has over 25 lawyers dedicating 100% of their time to Robert Rosu, partner and head of firm’s
5
handling all aspects of litigation and arbitration procedures. litigation/arbitration practice group
The firm has represented clients at all levels of the local judicial system, from the lower E-mail: robert.rosu@tuca.ro
courts to the High Court of Justice, and in special proceedings in the Constitutional Court Cornel Popa, partner
with relation to a broad range of complex cases. The group also acts successfully in public E-mail: cornel.popa@tuca.ro
international law arbitration and has in-depth knowledge of ICC, UNCITRAL and ICSID
arbitration procedural rules. We have successfully assisted both investors and state bodies in
disputes flowing from breaches of bilateral investment protection treaties.
SWITZERLAND
Brandschenkestrasse 90, 8027 Zürich, Switzerland Languages spoken:
Phone: +41 58 261 5000 Fax: +41 58 261 5001 English, French, German, Italian
E-mail: zuerich@baerkarrer.ch Website: www.baerkarrer.ch
Number of lawyers: 110
• Banking, financing and • Listed companies At this office: 80
regulatory matters • Litigation
• Capital markets • Media, entertainment and sports Contacts:
• Competition law • Mergers and acquisitions Dr Felix R Ehrat
• General corporate and and transactions Eric Stupp
commercial matters • Notarial services
• Intellectual property • Private clients and trusts and estates Other offices:
and technology • Reorganisation and insolvency Geneva, Lugano,
• International arbitration • Tax Zug, London
SJ Berwin LLP
UNITED KINGDOM
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