In this short podcast, Partner, Craig Tevendale and Professional support lawyer, Hannah Ambrose, look at multi-tier dispute resolution clauses involving arbitration. The podcast considers the benefits of these clauses (also known as escalation clauses), the approach taken by the courts in a number of different jurisdictions and key considerations for drafting.
For further information or to suggest topics for future podcasts, please contact Craig Tevendale, Partner, Hannah Ambrose, Professional Support Lawyer, or your usual Herbert Smith Freehills contact.
You may also be interested in our previous podcasts “Arbitration in Multi-Party and Multi-Contract Scenarios – What You Need to Know”, and “Unilateral Arbitration Clauses: Enforcement Issues and Drafting”. You may also be interested in Herbert Smith Freehills’ ADR Practical GuideÂ on the use of mediation with arbitration.
An article published in the Turkish Commercial Law Review entitled “Multi-tier dispute resolution clauses and Arbitration” by Craig Tevendale, Hannah Ambrose and Vanessa Naish is available here.
As reported in our recent blog post here, India has recently released a draft Â â€śModel Text for the Indian Bilateral Investment Treatyâ€ť (â€śModel BITâ€ś).Â Head of the India Arbitration Practice, Nick Peacock was invited to comment on the Model BIT for CNBC TV18’s The Firm, India’s only television programme covering corporate law, M&A, financial regulation, tax and audit matters.
In the interview, Nick discusses a number of the provisions in the Model BIT, including the potentially broad scope of the exclusions which could impact the protection offered to investors, the removal of the “Most-Favoured Nation” provision found in India’s 2003 Model BIT and in many hundreds of bilateral investment treaties entered into across the globe, and the more limited national treatment provisions.Â Nick also comments on the implications of the Model BIT for Indian investors seeking protection for their investments outside India.
In an appeal in a case considering the interrelation between arbitration and state immunity, on an application by France and Spain (the States), the English Court of Appeal (the Court) refused to reverse the decision of the High Court which granted permission to enforce two arbitral awards (the Awards) against the States under s66 of the English Arbitration Act 1996 (the Act).
The States argued that they benefitted from immunity from the jurisdiction of the English courts under the State Immunity Act 1978 (the SIA). The Court found that in bringing an application challenging the jurisdiction of the tribunal under s67 and s72 of the Act, the States had taken steps in the proceedings other than for the sole purpose of preserving immunity. The States had been deemed to have submitted to the jurisdiction.
On a practical level, the decision demonstrates the need for states to consider carefully their strategy in responding to proceedings brought against them, if they do not wish to risk losing the general immunity granted by the SIA.
The case hasÂ been considered onÂ our Public International Law blog.Â Please click here for the case summary and comment.
In Cass. Civ. 1, nÂ° 14-12.077, 18 March 2015, Semapa Investimento E Gestao SGPS v CRH PLC, the French Supreme Court considered an appeal from a Paris Court of Appeal decision dismissing an application to set aside an ICC arbitral award.
The French Supreme Court (Cour de cassation) has dismissed an appeal against a Paris Court of Appeal decision refusing to set aside an ICC arbitral award rendered under a shareholders’ agreement. In the underlying proceedings, the claimant had argued that the tribunal had acted ultra petita, failed to respect principles of due process, and violated international public policy.
The Supreme Court upheld the Court of Appeal decision in its entirety, finding that the tribunal had acted within the authority granted by the Terms of Reference and had not violated due process. Further, the Court of Appeal had not misinterpreted the claimantâ€™s submissions and had been entitled to conclude that recognition and enforcement of the award would not be contrary to public policy.
The Supreme Court’s decision does not break new ground. However, it is an important reaffirmation of the principle that, in circumstances where a tribunal has respected the authority granted to it by the Terms of Reference, and asked the parties to express their views on the relevant issues, an award will not normally be open to attack in the French courts on the grounds of violation of due process. (Cass. Civ. 1, nÂ° 14-12.077, 18 March 2015, Semapa Investimento E Gestao SGPS v CRH PLC.)Â Continue reading →
In the past week the Indian Government has issued a draft model BIT for comment and Wikileaks as leaked a 20 January draft of the Investment Chapter of the Trans-Pacific Partnership.
There is considerable on-going public debate surrounding the right of states to regulate, the extent of the protections offered to investors and the availability and format of ISDS. The past week has provided a fascinating opportunity to compare how this debate is affecting different states in terms of the drafting and negotiation of trade and investment protection treaties.
We have analysed both the TPP and India model BIT texts in the context of this debate on our Public International Law blog. For regular updates on investor-state dispute resolution and other public international law issues, please do subscribe.
In a recently published case, the Supreme People’s Court (the “SPC“) of the People’s Republic of China has confirmed that the two-year limitation period for a party to apply to a PRC court for enforcing a foreign-related arbitral award shall start to run from the date on which the award creditor discovers that a foreign counterparty has property located within the territory of China (Shanghai Jwell Machinery Co., Ltd. v Retech Aktiengesellschaft, Switzerland, SPC Guiding Case No. 37). Continue reading →
A paper addressing the application of psychology to international arbitration, submitted by Herbert Smith Freehills Senior Associate Ula Cartwright-Finch, was selected for presentation at the ICC Young Arbitrators Forum (YAF) â€“ Young Austrian Arbitration Practitioners (YAAP) Joint Conference: â€śYoung approaches to arbitrationâ€ť, on 28 March 2015.Â Â Â Continue reading →
In the case of AQZ v ARA , the Singapore High Court has provided useful guidance and clarification on a number of procedural issues relating to jurisdictional challenges which will be of interest to arbitration practitioners both in Singapore and worldwide. The decision provides clarity in relation to the following points:
Where parties have agreed to arbitration under a particular set of institutional rules without any caveat, they agree to submit to all the provisions contained in those rules, even if some of them conflict with other aspects of their agreement, or certain aspects of the procedure fall within the discretion of an arbitrator or the institution. If parties do not wish to agree to future changes in rules, they should specify which particular the version of the rules they want to apply. Further, if, in the context of the SIAC rules, parties want to have their dispute heard by three arbitrators if the Expedited Procedure is invoked, they should make explicit provision for this in their arbitration clause.
In a jurisdictional challenge, although the Court will undertake a “de novo” hearing of an arbitral tribunal’s decision on jurisdiction, this does not mean that oral evidence and cross-examination will be appropriate in every application, even where there are substantial disputes of fact. This pragmatism is welcome, particularly for those on the receiving end of jurisdictional challenges, as the Court’s willingness to rely on material from the arbitration could save significant time and costs in defending such challenges.
In Model Law jurisdictions, once an award on the merits has been handed down, a party who seeks to set it aside on jurisdictional grounds must do so under Article 34 of the Model Law. Article 16(3) of the Model Law is a separate process that only applies to decisions on preliminary questions. If a party wishes to be able to challenge a tribunal’s ruling on jurisdiction shortly after it is handed down, it must ask for that ruling to be given as a preliminary question which does not also deal with the substantive issues in dispute.
After decades of governments concluding international investment agreements, reservations concerning free trade agreements (such as the TTIP, between the US and the EU) have led to unprecedented levels of public debate, focussing largely on the proposed inclusion of investor-state dispute settlement (ISDS) provisions.
Matthew Weiniger QC was interviewed for a BBC Radio 4 programme to be broadcast at 8pm tonight, titled “Company vs Country“. It will discuss the nature of investment protections and ISDS, including the high profile investor-state disputes which are relied on as evidencing the alleged threat ISDS poses to democracy.
The programme will be available hereÂ shortly after the broadcast.
For further information, please contact Matthew Weiniger QC, or your usual Herbert Smith Freehills contact.
In the case of Coal & Oil Co. LLC v GHCL Ltd  SGHC 65, the Singapore High Court took the opportunity to reinforce that a party seeking to set aside an arbitral award on the grounds of breach of natural justice is a serious matter requiring a high evidential threshold, and will be limited to only “egregious cases where the error is clear on the face of the record.”
The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action. Herbert Smith Freehills LLP is authorised and regulated by the Solicitors Regulation Authority.