On June 13th 2013, Mr Philip Yang was guest speaker at the latest China Young Arbitration Group (“CYAG“) seminar that was held at the Beijing office of Lantai Partners. The seminar focused on the often thorny issue of “How Cultural Differences between the East and West can impact the Strength of an Arbitration Claim”, in particular some of the common pitfalls that Chinese parties find themselves in when involved in international arbitration proceedings.
Mr Philip Yang, prominent bilingual arbitrator, delivered the session, drawing upon his experience in international trade and shipping disputes over more than 20 years. Mr. Yang engaged the audiences by giving interesting examples that he encountered as an arbitrator where Chinese witnesses performed poorly in front of the tribunal. According to Mr Yang, very rarely does a Chinese factual witness perform satisfactorily in cross-examination and gain the trust of the tribunal. In his view, this is best illustrated by the common failure of Chinese shipbuilders against foreign buyers in a number of international arbitration cases seated in London despite the Chinese party having reasonably strong claims. Although in Mr Yang’s view, it was preferable to rely on documentary evidence, being neutral and less susceptible to cultural discriminations, in his experience, most Asian cultures do not favour recording facts in writing which results in most Asian parties having very little internal documentary evidence on which to rely. Yang also pointed out that where documentary evidence is produced by an Asian party, the typical Asian style of using a modest and indirect tone, seen particularly in responses to letters of demand and cooling-off notices can often be misinterpreted by a Western arbitrator as that party having made a concession or self-admission of fault.
In summarising how these cultural differences can be managed by parties, Mr Yang pointed firstly to the disputes clauses adopted by parties. Yang recommended including both English and Chinese as the language of the arbitration and adequately preparing witnesses for cross-examination. Yang also stated that international arbitration institutions could also adopt measures to raise arbitrators’ awareness of the danger of imputed bias in cases involving parties from vastly different cultural backgrounds in order to minimize the impact of any imputed cultural bias on case outcomes. Yang is of the view that some institutional changes could be made to improve a situation where cultural bias may exist, for example, standardising the practice of mandatory testimony training (commonly adopted in the US) to other jurisdictions where witness preparation is forbidden to ensure a level playing field. This would be particularly helpful for Chinese witnesses who are not required to undergo cross-examination in disputes in Chinese courts. However Yang acknowledged that the rules in different jurisdictions as to the appropriate level of witness preparation were vastly different and this would of course need to be taken into account.
Following a lively talk, Mr Yang answered a number of questions from the audience which was made up of enthusiastic young Chinese lawyers. Among the questions posed to Mr Yang were those relating to the misconceptions concerning the effectiveness of adopting a complex arbitration clause, the enforceability of ICC awards in China, practical differences between having a seat in Singapore, Hong Kong and UK in terms of their different approaches to awarding interim measures and maintaining the impartiality of the arbitrators from a Chinese party’s perspective.
This latest CYAG Seminar once again offered an invaluable opportunity for an arbitrator very well experienced in arbitration concerning Chinese parties to share his insights to young arbitration practitioners in Beijing through an informative and engaging discussion. Please contact Edwina Kwan, Senior Associate of the Beijing Offices, for information of the next CYAG event.
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