The global financial markets are currently preparing for the phasing out of the London Inter-bank Offered Rate (or LIBOR) and other Inter-bank Offered Rates (or IBORs). LIBOR is the most widely used benchmark interest rate globally, employed in an estimated US$350 trillion worth of financial contracts worldwide. LIBOR may also be used in commercial contracts â for example, in price adjustment mechanisms in share purchase agreements, price escalation clauses or as a reference rate for contractual interest on late payments. LIBOR may also be specified in arbitration clauses as a benchmark rate for interest on the award.
Many financial instruments affected by the discontinuation of LIBOR will include arbitration clauses. As discussed below, whilst the substantive disputes arising from the end of LIBOR will be the same whether they are resolved in a court or by an arbitral tribunal, there are some additional considerations particular to the arbitration process which are relevant in the context of LIBOR discontinuation disputes. Further, even when determining a dispute which does not arise from the end of LIBOR, arbitral tribunals may have to grapple with how to award interest where an arbitration clause uses LIBOR as a reference point. Read more in the E-bulletin here.
The International Council for Commercial Arbitration (ICCA) and the International Bar Association (IBA) have launched a Joint Task Force on Data Protection in International Arbitration Proceedings.
On 1 February 2019, CIETAC published its 2018 statistics and 2019 work plan. The statistics show a substantial increase in CIETAC’s caseload and the total amounts in dispute, as well as a growing diversity of cases administered by CIETAC.
CIETAC received 2,962 new cases during 2018, representing a 28.89% increase compared to the previous year. 522 of these cases are foreign-related, of which 36 are between non-Chinese parties: 9.66% more than 2017. CIETAC accepted 2,440 new domestic cases in 2018, an increase of 33.92% on the previous year.
In the recent decision of Sonact Group Limited v. Premuda SPA  EWHC 3820 (Comm), the English High Court confirmed its pro-arbitration approach to the interpretation of arbitration agreements. The Court held that an arbitration agreement contained in a charterparty contract could apply in relation to disputes arising out of a subsequent settlement agreement contained in correspondence between the parties relating to the sum allegedly due under the charterparty. The Court concluded the parties could be taken to have intended that the arbitral tribunal under the principal agreement would also have jurisdiction over disputes arising out of a settlement agreement between the same parties, despite the absence of an express arbitration clause in the settlement agreement.
AIIB and HKIAC are presenting a joint seminar on the AIIBâs status, policies and projects on 21 February. The seminar, which is supported by Hong Kongâs Department of Justice and the ICC, features:
- an interview with AIIBâs General Counsel, Gerard Sanders
- a presentation from AIIBâs head of corporate Law, Peter Quayle, on the international legal status of AIIB and dispute resolution
- a roundtable discussion on what makes a âshovel-readyâ AIIB project involving AIIBâs senior legal consultant, Jennifer Handz
The Tribunal in Gabriel Resources v Romania recently issued an order (the Order) in response to an application (the Application) made by three Romanian NGOs, as non-disputing parties, for participation and an amicus submission (the Submission) in an ICSID arbitration under the Canada-Romania BIT (the BIT). Gabriel Resources’ allegations of breach of the BIT arise in relation to a proposed open pit mining development in RoĹia MontanÄ, Romania (the Project) which was not implemented.
The Tribunal granted the Application in part, admitting only certain sections of the Submission to the extent that they referred to factual issues within the specific knowledge of the Applicants and in relation to the interests which the Applicants claim to be protected.Â However, the Tribunal denied admission to arguments on the law, as well as references to or reliance on testimonies which could not be tested by cross-examination. The Tribunal also rejected the NGOs’ request to attend and participate in the oral hearing.
The Tribunal’s analysis of the conditions relevant to an application by non-disputing parties â and its approach of considering each section of the Submission in relation to those conditions (rather than the Submission as a whole) – provides a significant contribution to jurisprudence in this area. The application in Gabriel Resources is also consistent with a general increase in such third party interventions, particularly in disputes which touch on issues of public interest, such as environmental protection, public health measures, labour standards, cultural rights and/or human rights.Â Such a trend is likely to continue with civil society becoming more active in this context.
We are delighted to share with you the latest issue of the publication from the Herbert Smith Freehills Global Arbitration Practice, Inside Arbitration.
In addition to sharing knowledge and insight about the markets and industries in which our clients operate, the publication offers personal perspectives of our international arbitration partners from across the globe.
One of the Advocates General to the Court of Justice of the European Union, Advocate General Bot, has issued an opinion confirming that the mechanism for the settlement of disputes between investors and states provided for in the Comprehensive Economic and Trade Agreement Â between the EU and Canada (the CETA) is compatible with European UnionÂ law.
We discuss the content of the Advocate General’s opinion on our new blog piece, published on our Public International Law blog here.
For further information please contact Andrew Cannon, Partner, Hannah Ambrose, Senior Associate, Vanessa Naish, Professional Support Consultant, Rebecca Warder, Professional Support Lawyer, or your usual Herbert Smith Freehills contact.
Hannah AmbroseSenior AssociateEmail
+44 20 7466 7585
Vanessa NaishProfessional Support ConsultantEmail
+44 20 7466 2112
Rebecca WarderProfessional Support LawyerEmail
+44 20 7466 3418
In December 2017, South Africa brought into law its first piece of legislation dedicated to international arbitration, the aptly named International Arbitration Act of 2017 (the New Act).
The New Act
The New Act incorporates the provisions of the UNCITRAL Model Law and further aligns the country’s national law with the New York Convention. The legislation has been welcomed as a necessary step for South Africa to become the continent’s leading arbitral hub. Rather interestingly, in an effort to stimulate the growth of ADR, parties can also now choose to refer their disputes to conciliation using the UNCITRAL Conciliation Rules.
But the New Act does not stop at mere adoption of the UNCITRAL texts and modernisation of the old regime.Â Ambitious refinements to the Model Law (which is incorporated as Schedule 1 to the New Act), seek to advance certain matters into what many may regard as relatively unchartered waters. One such ambitious development relates to court ordered interim measures.
Third party funding is a hot topic in Asia.
As noted on this blog, Singapore introduced legislation in 2017 to allow third-party funding in international arbitration and associated proceedings, including enforcement and mediation. Hong Kong’s funding legislation takes effect today.
Our Singapore team is already representing clients in two significant Singapore-seated arbitrations in which the claimants are third-party funded. It is understood that these are amongst the first funded arbitrations in Singapore. We expect Hong Kong arbitrations to generate high levels of interest in funding once the law is in force.
In the light of these exciting developments, Herbert Smith Freehills has contributed the Hong Kong and Singapore chapters of Getting the Deal Through: Litigation Funding 2019. The chapters discuss the trends and legal landscape for funding in both Hong Kong and Singapore.