|
|
 |
Peter Ashfgord: International
Arbitration The February meeting of the Chartered Institute of Arbitrators at The Rose and Crown Hotel in Tonbridge, was addressed by Peter Ashford, a partner at Cripps Harries Hall Solicitors, Tunbridge Wells. Peter is head of Commercial Dispute Resolution, much of his work concerns international arbitration. Peter opened by explaining that in international arbitration a principal difference is that of course foreign nationals are often involved and the definition of international arbitration is companies of different states are involved in a dispute so, for example, an arbitration may be held in Paris concerning companies from London and Milan for a project which may have taken place in either of those countries. These arbitrations are usually held under the Code of the New York Convention, which covers the enforcement of arbitral awards made in a state differing from the contracting parties, such as in the example given. A dispute falling under this umbrella would be one whose obligations were to be performed in a place outside the state where the parties have business. For example, work undertaken in Paris involving English and Italian contracting parties, thereby the work was in a place outside the state where the parties have business. Peter went on to explain that there are many complications involved with international arbitration, for example some countries have laws which are different for international and for domestic disputes. This could mean that an English party to a dispute may have to submit to the jurisdiction of a foreign country if the arbitration is held in that country. This is not an ideal situation since nobody likes to submit to a foreign jurisdiction and therefore a mutual set of rules is required. These are usually the ICC (the rules of arbitration of the International Chamber of Commerce). These rules might, for example, set out where the arbitration is to take place and which country's laws will govern the agreement. There is, however, no obligation to use the international rules and many countries have their own rules and guidelines. The number of arbitrators in a tribunal is usually three (ideally an uneven number). Each party will appoint one arbitrator and then a chairman will be agreed. Each side's arbitrator is allowed to be a semi-advocate as he is after all appointed by one of the parties, but this can lead to difficulties. That arbitrator may ask questions relevant to his appointing party and in some cases this can lead to bias where an arbitrator may be suspected of favouring his appointing party's case too much. There are several ways to appoint a chairman but Peter explained that if this is not agreed by the parties then the Institute will appoint one or find one from an independent jurisdiction. This can mean, for example, the dispute is held in Paris between disputing parties from say London or Hungary and a chairman may be appointed from a completely independent jurisdiction such as Venezuela. One can begin to understand from these explanations that there are considerable complexities and difficult issues which will need to be managed between the parties. As regards to the seat/venue of an arbitration, there will need to be a mutually agreed location for the evidential hearing but the procedural law of that location will govern procedural matters so one should therefore try to choose the seat of the arbitration carefully as the way of dealing with things in that country may be very different from the procedures at home. One should not assume that they will do everything the same, for example the laws surrounding legal privilege will be based on the country where the arbitration is to be heard, which may of course be quite different from the laws surrounding legal privilege at home. Similarly it is possible to have a contract that is based in one law and an arbitration that is undertaken in another so in summary one should choose the seat of an arbitration carefully. This could govern whether or not a dispute is arbitrable : time limits for commencement; interim measures; conduct, ie discovery and evidence among other issues and, for example, the form and validity of the award. Further complications surround the location where the award is signed as this will govern the appeal law applicable. If the award is signed, for example in Venezuela, then the laws of that country will govern the procedures as to whether or not an appeal may be allowed and how it is to be lodged. Confidentiality is a further complication. In some countries the entire arbitration is confidential whereas in others only the arbitration is confidential but the award may be disclosed publicly and, in any event, public companies may be obliged to make statements to their shareholders but naturally will wish to control the tone and content of such announcements carefully which can be affected by the extent to which the procedure is confidential, based upon the country where the arbitration is heard. Procedure may vary widely in different countries so that parties may have a different expectation of procedure. Local lawyers in some countries will expect different procedures and one should, for example, consider the case of a French lawyer attending an arbitration in London or an Italian lawyer attending an arbitration in France where he will find the local procedures may differ very much from those to which he is accustomed at home. Concerning the presentation of evidence, the IBA (International Bar Association) rules will usually apply and these cover matters such as documents: witnesses of fact: experts: site inspection: hearings and admissibility and assessment of evidence. There are, for example, specific IBA rules concerning documents as to what may or may not be relied upon and how requests to produce information are handled, particularly with respect to the timing of requests and the handling of objections and rulings thereon. This is known as requests to produce and the IBA rules have guidelines for this. We were also given an outline of the procedures for hearings which are often very short. A recent example where it was estimated that eight weeks might be required was in fact reduced to two weeks by the parties because the professional standing of those participating made it impossible to be in another country attending an arbitration for more than a couple of weeks at a time. This can make it necessary to set a frantic pace but a businesslike, no-nonsense approach is usually the way forward. There are "courts" which govern the appointment of tribunal seat, language and fees and expenses and set rates for administrative expenses which run on a sliding percentage scale as well as for arbitrators fees, all set down in the ICC rules. We were reminded that the New York Convention (1958), which governs procedures for enforcement, can be very hard to enforce in certain countries. There are signatory countries to the New York Convention but enforcement can be subject to agreement about whether or not an arbitration is valid, lack of proper notice of appointment of tribunal or proceedings, lack of due process and other objections can be raised as to the enforceability of an award. In summary, it was explained to us that an aggressive style is generally frowned upon. In some countries there is no cross-examination, although the judge may ask questions and the style of international arbitral proceedings is generally less confrontational in the civil courts. In 90% of cases the parties are represented by lawyers from their own legal system which can mean that translation is a hugely complicated matter. This can also lead to the need for using local lawyers to assist with local matters, for example if the dispute involves gathering evidence from some far off country then it may be necessary to obtain local legal advice in that country to advise about the disclosure of evidence from that country. Understanding the variety of cultural differences between countries can also be an advantage where an issue involves people from different countries and cultural backgrounds. Impartiality or suspicions about lack of it can also create a very difficult atmosphere if an arbitrator is seen to be too close to one of the disputing parties and may therefore pitch questions in favour of that party. In summary however, it appears that international arbitration is certainly an exciting and interesting field and all those present found Peter's talk interesting and educational. Peter can be contacted at Peter.Ashford@crippslaw.com where I am sure he would be pleased to provide further information and guidance. Report by Charles Stimpson ACIArb. |
||