The Global Pound Conference series â€“ a unique and ambitious initiative to inform how civil and commercial disputes are resolved in the 21st century â€“ brought together over 4000Â dispute resolution stakeholders,Â at 28 conferences spanning 24 countries worldwide.
Herbert Smith Freehills, global founding sponsor of the series, has teamed up with PwC and IMI (International Mediation Institute) to identify key insights that emerge from the extensive voting data collected during the series. With a focus on the needs of corporate users of dispute resolution, this ground-breaking report challenges the traditional and fundamental notions of what clients want and how lawyers should represent them in a dispute. We identify four key global themes along with four notable regional differences.
Global themes emerging from the voting data reveal:
- Efficiency is the key priority of parties when choosing dispute resolution processes.Â Most dispute resolution continues to have as its frame of reference an adversarial process (litigation or arbitration) based on asserted legal rights. Yet two thirds ofÂ in-house counselÂ canvassed at GPC events said they require more efficiency in dispute resolution. This questions whether traditional dispute resolution processes still meet the needs of end users.
- Parties expect greater collaboration from advisors in dispute resolution. Around two thirds of in-house counsel said they need to see more collaboration from their lawyers. This applies when lawyers are interacting with both Â clients and opponents. This questions traditional notions of how lawyers should represent clients. Is the zealous advocate, fighting their clientâ€™s corner tenaciously at all costs, still appropriate?
- Global interest in the use of pre-dispute protocols and mixed-mode dispute resolution. With the data pointing towards a more collaborative and efficient approach, unsurprisingly delegates felt that disputing parties should be encouraged to consider processes like mediation before they commence formal proceedings. The data also showed a growing desire by parties to use mediation in parallel with litigation and arbitration.
- Some uncomfortable home truths for lawyers. In-house counsel were judged to be change enablers. As such, they shoulder a significant responsibility to encourage their organisations (and, if necessary, their external lawyers) to consider dispute resolution options more carefully, including using processes like mediation. In contrast, 70% of global delegates said external lawyers were the primary obstacles to change in commercial dispute resolution.
These insights show the potential of the GPC series to inform further studies and discussions across the world. Download your copy of our report hereÂ to learn more.
To discuss the content of this report and its impact on your organisationâ€™s approach to dispute resolution, please contact the authors.
In a decision dated 24 April 2018, the English Commercial Court (the “Court“) dismissedÂ challenges brought under s67 and s32 of the English Arbitration Act 1996 (the “Act“) by Dreymoor Fertilisers Overseas PTE Ltd. (“Dreymoor“).
The case concerned the construction and application of arbitration clauses to disputes arising out of a complicated business structure with multiple contracts between Eurochem Trading GMBH (“ECTG“), a fertiliser seller, and Dreymoor, an international trading company. Dreymoor sought to challenge the jurisdiction of tribunals constituted in two arbitrations (one LCIA and one ICC) commenced against it by ECTG, arguing (1) for a narrow interpretation of an LCIA arbitration clause to exclude non-contractual claims brought against it by ECTG; and (2) that there was no agreement to arbitrate between ECTG and Dreymoor in respect of the ICC arbitration.
The Court followed the liberal interpretation propounded in Fiona Trust & Holding Corporation v Privalov  UKHL 40. The LCIA arbitration clause covered “any dispute or claim arising out of this Contract“. Those words were wide enough to cover the non-contractual disputes which ECTG had referred to LCIA Arbitration and the s67 challenge was dismissed. In respect of the ICC arbitration, the Court again held that the terms of the arbitration clause were very wide and sufficient to cover the disputes referred under it against Dreymoor. The s32 action therefore also failed.
In its recent decision in SCM Financial Overseas Ltd v Raga Establishment Ltd  EWHC 1008 (Comm) (available here), the English High Court (“Court“) refused to set aside an award on the ground of serious irregularity in circumstances where the London-seated tribunal applying the LCIA rules (“Tribunal“) proceeded to issue an award rather than await the outcome of domestic court proceedings which could have had a significant impact on the issues before the Tribunal.
The Court’s decision is significant because it highlights the wide discretion afforded to tribunals to manage the proceedings as they see fit, and demonstrates that there is an high bar to a successful challenge under section 68 of the Arbitration Act 1996 (“Act“). The decision also provides interesting observations on the relationship between arbitral and domestic court proceedings, and the inherent risk of inconsistent decisions should a party choose to arbitrate.
In Warner Bros Feature Productions Pty Ltd v Kennedy Miller Mitchell Films Pty Ltd  NSWCA 81, the New South Wales Court of Appeal overturned the decision of the New South Wales Supreme Court by referring a dispute to arbitration in California pursuant to the partiesâ€™ agreement and by ordering a stay on court proceedings pursuant to section 7(2) of Australia’s International Arbitration Act 1974 (Cth). The Court of Appeal applied a pragmatic approach to determine whether an arbitration clause found in standard term contracts used by other members of a companyâ€™s corporate group should be incorporated into the partiesâ€™ agreement.
In the past few years, discontent about Investor-State Dispute Settlement (ISDS, a recognised shorthand for ad hoc arbitration of investor-state disputes) has been fomenting in various parts of the world but nowhere more so than within the EU. The European Commission’s focus on ISDS has been so intense that far-reaching reform has been portrayed by many as inevitable. The Commission’s proposal is for the development of a multilateral investment court system (MIC). The proposal is ambitious, but may not be realistic or achievable. Last year, the ISDS debate moved into the auspices of UNCITRAL Working Group III (WGIII). It is recognised in the report of the 35th session of WGIII that this “constitute[s] a unique opportunity to make meaningful reforms in the field”. Certainly the involvement of high level government representatives from across the world and the transparent nature of WGIIIâ€™s process suggest this forum provides the conditions for systemic reform. However, the features of the WG III process expose the Commission’s plans to global scrutiny at a relatively early stage in their development, potentially before the Commission has managed to gain significant support for wholesale change. One of the EU delegation, in its capacity as an observer, noted in the 34th session that the EU was “confident that UNCITRAL is a forum where a solution can be found” even where the delegates start from different positions. The question will be whether the conclusion of the deliberations will lead to the reform that the Commission wants.
On 6 April 2018, a Tribunal constituted under the UNCITRAL Arbitration Rules rendered an Award on Jurisdiction in the case Dawood Rawat v. The Republic of Mauritius (PCA Case 2016-20).Â Following a thorough analysis of the interpretation of the 1973 Investment Protection Treaty between the Republic of France and Mauritius (the “France-Mauritius BIT” or the “Treaty”), the Tribunal denied protection of the relevant investment protection treaty to a dual national â€“ a French-Mauritian businessman â€“ despite the treaty was silent on its application to dual nationals.Â This approach was contrary to prior investment treaty decisions, such as SerafĂn GarcĂa Armas and other v Venezuela, in which tribunals have rejected jurisdictional objections brought by respondent states where relevant the bilateral investment treaty (“BIT”) was silent on the exclusion of dual nationals.
The President of the United Arab Emirates has issued Federal Law No. 6 of 2018, promulgating the much anticipated new federal arbitration law in the UAE.Â As we reported in March, the new federal law, which is based on the UNCITRAL Model Law, will replace and supersede Articles 203 to 218 of the Civil Procedures Law No. 11 of 1992, which currently govern arbitrations seated onshore UAE, and will provide a properly structured procedural framework for domestic and international arbitrations seated in the UAE. The law will be published in the Official Gazette of the Union, and will come into effect one month after the date of publication.
Craig Shepherd, Head of the Global Contentious Construction Practice at Herbert Smith Freehills and Head of the Dubai Dispute Resolution team, commented: “The new Federal Arbitration Law is a very exciting development for the whole of the UAE. While the state has developed a reputation as the pre-eminent seat in the Middle East for arbitration, it did risk falling behind other nations who have introduced comprehensive new laws.Â That issue has now been addressed, and I am sure the new law will help cement the UAE’s position in the global arbitration market.”
If you would like further information regarding the new arbitration law and how this may affect you, please contact Craig Shepherd, Stuart Paterson, Caroline Kehoe, Anna Wren, or your usual Herbert Smith Freehills contact.
The last few months have seen significant changes to mining regulations in various African states, giving rise to a concern that a regional trend of resource nationalism may be (re-)emerging. In this context it is important for companies associated with the mining sector to be aware of the protection international investment treaties may provide against the impact of resource nationalism on their assets, and how to maximise that protection before risks materialise.Â This bulletin briefly considers some of the last few monthsâ€™ developments, before discussing how companies can use investment treaties to protect themselves against the risks they pose.
New Zealand has recently signed “side letters” to exclude compulsory Investor State Dispute Settlement (“ISDS“) with five members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP“) â€“ Brunei Darussalam, Malaysia, Peru, Viet Nam and Australia. This demonstrates the evolving approach to ISDS in the Asia Pacific region and is of particular interest both in the context of the worldwide debate about the future of ISDS, and also due to the importance of CPTPP members within the global economy.