The LCIA has recently released its Casework Report for 2017. This report provides an overview of and insights into the LCIA’s caseload. It includes detailed statistics concerning aspects of the caseload with a breakdown by sector, contract type, and time elapsed since the underlying agreement was reached. The Report also looks at arbitrator appointments and the frequency of use of different procedures under the LCIA’s Arbitration Rules (the “Rules”).The statistics show that the institution has had another strong year. Despite a small decrease in referrals from 2016, the overall picture is one of long term growth and a strong international profile. It is also important to note that the LCIA continues to make steady progress its efforts to improve the diversity of arbitrators. The number of female and non-British arbitrators has increased from 2016, albeit at a gradual rate.
Update on the future of ISDS: the discussions within UNCITRAL Working Group III – no apparent consensus to date
After a number of years of public debate in a variety of fora, the discussion of the future development of investor-state dispute settlement (ISDS) has recently moved to the United Nations Commission on International Trade Law (UNCITRAL). UNCITRAL Working Group III (WGIII) has been given a broad mandate to identify concerns regarding ISDS, consider whether reform is desirable and, if so, develop relevant solutions to be recommended to UNCITRAL.
WGIII started its work in the 34th session which took place from 27 November to 1 December 2017. As discussed further below, a number of key points were discussed, including: (i) the duration and costs involved in the procedure; (ii) the allocation of costs; and (iii) transparency. There was also some preliminary consideration of possible developments or changes in relation to the treatment of these issues. The Report of the 34th session indicates that some states advocate a fact-based analysis of ISDS but others note the need to address wider public perceptions of ISDS, as these can raise concerns over the legitimacy of the system.
Bringing the debate about the future of ISDS under the auspices of UNCITRAL, involving high level government representatives from across the world, and also in view of the transparent nature of WGIII’s process, raises the stakes, and perhaps also the prospects, of a more systemic reform. However, whilst the forum has the potential to generate a multilateral plan for ISDS, it is hard to discern any broad consensus at this stage either on the nature of the perceived problems associated with the current system of ad hoc arbitration, or on how those problems may be resolved. This is apparent from the Report and also from the audio recordings (helpfully summarised by IA Reporter, here). The 35th session will take place on April 23 to April 27 2018, following which further clarity on these issues may emerge.
Filed under Costs, Investment Arbitration, ISDS, Third Party Funding
EU Council publishes Negotiating Directives for Convention establishing a Multilateral Investment Court: no real surprises but a couple of gaps
On 20 March, 2018 the Council of the European Union published negotiating directives dated 1 March 2018 authorizing the European Commission to negotiate a convention establishing a multilateral court for the settlement of investment disputes between investors and states. Whilst the detailed characteristics of the proposed multilateral investment court (the MIC) will be developed during the course of the negotiations, the Negotiating Directives give considerable indication of the EU’s intentions as to the MIC’s features.
The Negotiating Directives have their origin in the Commission’s Recommendation for a Council Decision authorising the opening of negotiations for a Convention establishing a multilateral investment court, published in September 2017. This included a recommendation that negotiating directives be drawn up and made public immediately after their adoption. The Commission has since commented that “the EU’s new policy on investment is fundamentally based on transparency” and that publication of the Negotiating Directives allows the EU “to continue to work with like-minded partners around the globe” towards creating a MIC, “knowing that EU citizens are fully informed of [its] negotiating instructions”.
Whilst the EU introduced its intention to move towards a multilateral system in a Concept Paper in 2015 (see our blog post here), the Commission’s Recommendation itself came shortly after UNCITRAL indicated in its 50th Session in July 2017 that UNCITRAL Working Group III would consider possible reform of investor-state dispute settlement. This work began in the Working Group’s 34th session in November 2017, with its next session due to take place on 23 to 27 April 2018. It will therefore be seen as no coincidence that the EU has chosen to publish these Negotiating Directives at this stage, and they will set the framework for the participation of the EU and its Member States, as further considered below. The EU has also submitted a paper to the Working Group in advance of its next session highlighting its concerns over the current system of ISDS.
Filed under EU, Europe, Investment Arbitration, ISDS
Herbert Smith Freehills’ Global Arbitration Practice Ranked Top Three in the World for the Third Year Running
Global Arbitration Review (GAR) has unveiled its annual ranking of the world’s leading international arbitration practices, with Herbert Smith Freehills ranked in the top three for the third year in a row.
The firm’s GAR 30 ranking appears in the 11th edition of the GAR 100, which was revealed last night at the eighth annual GAR Awards ceremony at the Four Seasons George V hotel in Paris.
Highlighted again by the publication as a “force to be reckoned with”, GAR reports that the firm has seen an “influx” of high-value work “on the back of some high-profile results”. GAR reveals that the firm’s portfolio of pending investment treaty work is “as large as it’s ever been” – with nine cases worth more than US$1 billion (including one worth US$18 billion).
The firm also achieves a large number of peer-recognised specialists across the global network, having a total of 13 people featured in ‘Who’s Who Legal’.
Filed under News
Astro v Lippo: First Media appeal succeeds in Hong Kong
At its final attempt, First Media has overturned the Hong Kong courts’ earlier decisions to enforce five arbitral awards against it.
In a judgment dated 11 April, the Hong Kong Court of Final Appeal (CFA) unanimously allowed First Media’s appeal, set aside the orders of the courts below, and extended time for First Media to apply for leave to set aside the orders granting Astro leave to enforce the awards in Hong Kong.
This is a long-awaited victory for First Media, which has always maintained that the awards were made without jurisdiction, despite its decision not to apply to set aside the tribunal’s award on jurisdiction. However, it is not the final hurdle. First Media must now convince the Court of First Instance, as the enforcing court, to accept its jurisdictional objection and set aside the enforcement orders, while Astro will certainly resist.
Astro Nusantara International B.V. and Others v. PT First Media TBK [2018] HKCFA 12; FACV 14/2017 (11 April 2018) Continue reading
Filed under Asia, Awards, Challenges to awards, East Asia, Enforcement, Hong Kong & China
Sudan becomes 159th contracting state to the New York Convention
Sudan has become the 159th Contracting State to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. On 26 March 2018, Sudan deposited its instrument of accession to the Convention with the UN Secretary General. In accordance with its article XII (2), the Convention will enter into force in Sudan on 24 June 2018. Continue reading
Filed under Africa, Enforcement, New York Convention
English Court holds that the time limit for appeal of an award runs from the date of the award, unless there is a “material” correction to the award
In a decision dated 16 March 2018, the English Commercial Court (the “Court“) dismissed the application of appeal under s69 of the English Arbitration Act 1996 (the “Act“) by Daewoo Shipbuilding & Marine Engineering Company Limited (“DSME“) on the ground that the application was not made within the statutory time period provided by s70(3) of the Act and there was no reason to grant an extension to that period.
The key issue was whether the 28 day statutory period for appeal commenced on the date of the original award or the date of the correction of the award (to remedy clerical errors pursuant to s57(3) of the Act). The Court held the 28 day period commences on the date of the original award unless the correction was material to the challenge to the Award. This exception did not apply here so DSME’s application was out of time.
Filed under Arbitration Act 1996, Arbitration laws, Awards, Challenges to awards, Europe
Hong Kong judge defers to arbitration in dismissing winding up petition
In a recent Court of First Instance case before Harris J, Southwest Pacific Bauxite (HK) Ltd (Company) sought to strike out a winding-up petition issued against it by Lasmos Ltd (Petitioner). The ground of insolvency relied on by the Petitioner was a statutory demand of US$259,700.48 (Debt), arising out of a management services agreement (MSA) between the Company and the Petitioner (Parties). The Company disputed the Debt.
The issue in this case was the impact of the arbitration clause in the MSA on the exercise of the court’s discretion to make a winding-up order.
Lasmos Ltd v Southwest Pacific Bauxite (HK) Ltd [2018] HKCFI 426
Delhi High Court reaffirms pro-arbitration approach in two recent judgments
In two recent judgments, the Delhi High Court (the “Court“) dismissed challenges to arbitral awards and emphasised its reluctance to interfere with decisions of arbitral tribunals, except in limited circumstances. In NHAI v M/S. Bsc-Rbm-Pati Joint Venture, the Court strongly criticised unnecessary challenges to awards, especially by public sector undertakings, noting that it wasted valuable judicial time. Carrying on with the sentiment to not interfere, in Delhi Metro Rail Corporation Limited v Delhi Airport Metro Express Private Limited, the Court stated that it would not interfere with an arbitral decision if the view taken by a tribunal was plausible, even where an alternative view was possible.
A brief summary of both cases can be found below.
Filed under Challenges to awards, Court intervention, India
Recent arbitration developments in the UAE
In the last few months, there have been two notable developments in the United Arab Emirates relating to arbitration. First, it was announced on 27th February 2018 that the Federal National Council of the United Arab Emirates has approved the highly anticipated draft of the Federal law on Arbitration (understood to be based on the UNCITRAL Model Law on International Commercial Arbitration). Second, the Legal Affairs Department of the Government of Dubai has clarified that all lawyers who are licensed in Dubai have the right of audience before any arbitration tribunal in Dubai, including foreign lawyers, and that visiting lawyers may also appear before arbitral tribunals in Dubai. These significant and welcome developments are discussed further below.
Filed under Arbitration laws, Middle East, News, UNCITRAL Model Law
