ENGLISH COURT ALLOWS SECTION 69 APPEAL ON A POINT OF LAW, BLOCKING PARTY’S ATTEMPT TO REVISIT PERMISSION TO APPEAL ONCE GRANTED

In the recent decision of CVLC Three Carrier Corp and another company v Arab Maritime Petroleum Transport Co [2021] EWHC 551 (Comm) (available here), the English High Court allowed an appeal on a point of law under s69 of the Arbitration Act 1996 (the “Act”).

The Court provided guidance on two significant issues: (i) whether the permission to appeal an award under s69, can be revisited after it has been granted and, (ii) how the Court should identify the relevant question of law when granting permission under s69.

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HSF CONTRIBUTES UK ARBITRATION CHAPTER TO LEXOLOGY’S GETTING THE DEAL THROUGH

Partner Craig Tevendale, Professional Support Consultant Vanessa Naish and Professional Support Lawyer Rebecca Warder have jointly authored the UK Arbitration chapter to Lexology’s Getting the Deal Through. The Chapter contains expert local insight into the jurisdiction’s arbitration law and institutions, providing essential “need to know” answers to the arbitration issues and questions facing corporations and counsel.

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MALAWI BECOMES 167TH CONTRACTING STATE TO THE NEW YORK CONVENTION

Malawi has become the 167th Contracting State to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the ‘Convention’). On 4 March 2021, Malawi deposited its instrument of accession to the Convention with the UN Secretary General. In accordance with article XII (2), the Convention will enter into force for Malawi on 2 June 2021.

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UPCOMING WEBINAR: MEDIATION IN ARBITRATION

On Thursday 18 March 2021 at 10.45 am (GMT) speakers from Herbert Smith Freehills will join the panel for a live London Chamber of Arbitration and Mediation (LCAM) webinar on Mediation in Arbitration.

The recent Mediation in Arbitration Survey conducted jointly by Herbert Smith Freehills and LCAM highlighted the impressive settlement rates for mediation of arbitration cases. The survey also showed that high value arbitrations are being resolved via mediation and covered the stage of the proceedings at which such mediations typically occur and the extent to which they feature in mediator caseload.

This webinar will look at these and other insights from the survey and will also discuss the current take-up of mediation in international arbitration and how that could potentially be increased.

Speakers:

  • Craig Tevendale, Partner, International Arbitration, London
  • Chris Parker, Partner, International Arbitration, London
  • Rebecca Warder,  Professional Support Lawyer, International Arbitration, London
  • Kathryn Britten, AlixPartners
  • Jonathan Wood, RPC

To register for this event please click here.

Further details about the responses to the Mediation in Arbitration Survey can be accessed here.

For more information, please contact Craig Tevendale, Partner, Chris Parker, Partner, Rebecca Warder, Professional Support Lawyer, or your usual Herbert Smith Freehills contact.

Craig Tevendale
Craig Tevendale
Partner
+44 20 7466 2445
Chris Parker
Chris Parker
Partner
+44 20 7466 2767
Rebecca Warder
Rebecca Warder
Professional Support Lawyer
+44 20 7466 3418

MEDIATION IN ARBITRATION PODCAST: THE PROFILE OF MEDIATION IN ARBITRATION

We are pleased to share this Mediation in Arbitration podcast, in which Craig Tevendale, Chris Parker and Rebecca Warder discuss the results of the Herbert Smith Freehills and London Chamber of Arbitration and Mediation (LCAM) Mediation in Arbitration Survey. The podcast also covers potential barriers to mediation in international arbitration, how these might be overcome and the future of mediation in arbitration.

The snapshot survey delved into trends in mediation in arbitration, aiming to find out more about the current take-up of mediation in international arbitration. Mediators were asked to fill in the survey in relation to mediations undertaken in 2019 and 2020, answering four very straight-forward questions on:

  • the stage at which these mediations occur
  • their claim values
  • the proportion of mediator caseload they made up; and
  • how often mediation in arbitration leads to settlement

Over 50 mediators completed the online survey. Despite the majority of the time period covered by the survey falling into the pre-Covid-19-pandemic era, mediations in the later months of 2020 also fell into the survey window and in that timeframe patterns of claims, and also to some extent perhaps approaches to settlement, will have been impacted by the Covid-19 pandemic. While it will take some time to tease out the impact of Covid-19 on mediation patterns, the fact that the survey covered 2020 as well as 2019 means it provides a reasonably current picture.

The survey results highlighted the following key trends:

  • The timing of mediation: the survey showed fairly overwhelmingly that mediations in arbitration usually happen at the pre-document production stage. In fact, only 6% of the mediators who had experience of mediation in arbitration had not done a mediation pre-document production in 2019 or 2020.
  • The value of disputes mediated: high value arbitration claims are being resolved in mediation. The majority of mediators we surveyed who reported having some experience of mediation in arbitration said that they had carried out mediations in cases worth over £10M.
  • Mediator caseload: a quarter of the mediators had quite a significant mediation in arbitration practice, with around a third of their caseload made up of those cases. 10% of our survey sample had a lot of these cases and told us that the majority of their mediations were arbitration cases.
  • Settlement rates: the success rates which were reported by the majority of the mediators were pretty impressive. Just under half of the mediators who said they had mediated arbitration cases had settled at least 70% of these cases at the mediation across 2019 and 2020. Most of these mediators were reporting a success rate in the 80% plus bracket.

The podcast can be listened to on SoundCloud, Spotify and iTunes.

The results of the survey have been published here if you would like to read in more detail.

For further information, please contact Craig Tevendale, Partner, Chris Parker, Partner, Rebecca Warder, Professional Support Lawyer or your usual Herbert Smith contact.

Craig Tevendale
Craig Tevendale
Partner
+44 20 7466 2445
Chris Parker
Chris Parker
Partner
+44 20 7466 2767
Rebecca Warder
Rebecca Warder
Professional Support Lawyer
+44 20 7466 3418

RISE IN ARBITRATION CASES IN 2020 DESPITE REDUCED VOLUME OF IN PERSON HEARINGS DUE TO CORONAVIRUS PANDEMIC

Most arbitration institutions that have released their statistics for 2020 have reported increased caseloads and/or claim amounts, despite the COVID-19 coronavirus pandemic impacting in person hearings.  The strong demand for arbitration services and the fact that most arbitration institutions were able to move quickly to virtual hearings and avoid costly delays to proceedings establish arbitration as a resilient and reliable choice for commercial dispute resolution.  In this blog post we review both interim and full caseload statistics so far released for 2020.

HKIAC

The Hong Kong International Arbitration Centre broke a number of its own records this year.  With 318 cases, HKIAC received its highest number of new arbitration filings in over a decade.  The total amount in arbitration disputes handled by HKIAC was HK$68.8 billion (approximately US$8.8 billion).  Again, this is a record high since 2011.

203 of the arbitrations filed were administered by HKIAC (under rules such as the HKIAC Administered Arbitration Rules, the UNCITRAL Arbitration Rules and the HKIAC Electronic Transaction Arbitration Rules), representing a 20% year-on-year increase.  The amount in dispute for administered cases was HK$51.3 billion (approximately US$6.6 billion).

There was a small reduction in the proportion of new arbitration filings that were “international” (defined as at least one party not being from Hong Kong).  The proportion of all arbitration cases that were international also recorded a small drop.  The vast majority of cases (99.4%) chose Hong Kong as the seat of arbitration.  Hong Kong law was also the most commonly selected governing law for disputed contracts handled by HKIAC.

In 2020, HKIAC processed 22 applications under the Hong Kong-Mainland China Interim Relief Arrangement (Arrangement), which came into force in October 2019.  The total value of the evidence, assets or conduct sought to be preserved amounted to ¥6.4 billion (approximately US$988 million), of which ¥4.4 billion (approximately US$683.3 million) were successfully preserved.  This is an encouraging number, as it shows in the early days of the Arrangement that there is a realistic chance that assets and evidence sought to be preserved would likely be ordered to be preserved.

Fourteen emergency arbitrator applications were submitted to HKIAC in 2020. This is a large number, particularly given that only twenty-seven emergency arbitrator applications in total had been filed with HKIAC before 2020.  While it appears that 11 of the 14 applications were made in related arbitrations (which likely refer to a series of arbitrations arising from a related set of contracts or arise from the same or similar set of facts), there were still more applications than in past years.  Only three emergency arbitrator applications were filed in 2018, while none were filed in 2019.

The HKIAC granted 24 applications for expedited procedure in 2020, from a total of 28 applications.

There was a clear pivot to virtual hearings in 2020: 80 out of 117 hearings hosted by HKIAC in 2020 were fully or partially virtual, doubtless as a result of the pandemic.  Only 37 hearings were in-person, hosted at the HKIAC’s Hong Kong premises.

Fifty-two HKIAC arbitrations were concluded by Final Award in 2020, while four reached party settlement.

Finally, HKIAC released statistics on diversity of arbitrator appointments.  Of the 149 arbitrator appointments by HKIAC in 2020, 34 were of female arbitrators.  This continues an upward trend from 17.6% in 2018, to 20.5% in 2019 and 22.8% in 2020.

SIAC

The Singapore International Arbitration Centre is expected to report its full case load information later this year, but it has already announced that it had crossed the 1000-case threshold with 1005 new cases in 2020 as of 30 October 2020.  This is another record year for SIAC, breaking the previous record caseload it had reported in 2019.

CIETAC

The China International Economic and Trade Arbitration Commission also saw growth in its caseload in 2020.  A total of 3615 ongoing cases were registered by CIETAC, representing an 8.5% year-on-year growth.

CIETAC reported that it handled disputes amounting in total to ¥112.130 billion (approximately US$17.3 billion).

There was growth not only in the number of cases handled by CIETAC, but also in terms of its international caseload.  In 2020, 739 cases were categorised as “foreign-related cases”, compared to 617 in 2019.  67 of these were cases where both parties were considered “foreign”, which was a record high for CIETAC.  CIETAC made 5213 arbitrator appointments in 2020.

As part of its response to the pandemic, CIETAC also established new virtual hearing centres, handling 819 virtual hearings.  This was an increase of 628 cases that were heard virtually.

ICC

Like HKIAC, the International Chamber of Commerce Court of Arbitration also announced record demand for its arbitration services last year.

ICC reported 946 new arbitration cases in 2020, the highest since 2016.  The majority of the new cases (929 cases) adopted the ICC Rules of Arbitration, while the remaining 17 (which were ad hoc cases) were filed under the ICC Appointing Authority Rules.

LCIA

The London Court of International Arbitration also reported a record breaking 444 cases referred to the institution in 2020, which broke the record caseload LCIA had reported in 2019 by an increase of about 10%.  These results were published on an interim basis and further statistics are expected to be released later this year.

VIAC

The Vienna International Arbitral Centre received 40 new cases in 2020, with the majority of cases involving an Austrian party.  The total amount of disputes handled by VIAC by the end of 2020 was €428 million (approximately US$518 million).

Compared to 2019, where VIAC saw 45 new cases, there was a small drop in the number of new cases received.  However, looking at the statistics for VIAC over the past few years, the number of new cases each year has generally ranged from 40 to 60 cases, so the small drop is likely part of a normal fluctuation over a longer period.

While the number of new cases did not grow, on the diversity front, more than 30% of arbitrators nominated or appointed in VIAC cases were female arbitrators.  This is the highest that VIAC has seen in recent years, and is a highlight for the institution.

DIA

The statistics from the Danish Institute of Arbitration indicate that it is primarily focused on domestic arbitrations, but about one-fifth of its cases were international in nature.  At 28 cases in 2020, DIA’s international caseload was approximately the same as during  the past five years, which ranged from 27 to 33 cases.

SCAI

The Swiss Chambers’ Arbitration Institution reported 83 new arbitration cases in 2020, with 61 being international.  While the number of new cases was not the highest that SCAI has received, it continues an average growth trend over the past decade.

AAA-ICDR

The American Arbitration Association-International Centre for Dispute Resolution reported that it handled 9538 cases in 2020, worth approximately US$18 billion.  This is a slight drop from 9737 cases in 2019, but – notably – an increase in claim amount when compared to the US$15 billion in claims in 2019.  AAA-ICDR also saw an increase from 94 filings for emergency arbitration in 2019 to 111 filings in 2020.

The largest claims, in aggregate, were from the technology sector (US$1.4 billion) followed by financial services, telecommunications and energy (in that order).  This is in contrast to the largest claims in 2019 coming from life sciences (USD 1 billion) followed by construction, real estate and technology.

In terms of changes in caseload by sector, cases related to the cannabis industry saw a 100% increase, the largest rise of any sector (the same industry saw a 225% increase in 2019, which was also the largest sector rise in 2019).

On the diversity front, AAA-ICDR reported 33% of appointments as “diverse appointments” (which refers to gender and ethnic diversity).

Commentary

A majority of arbitration institutions globally reported growth in case load and/or claim amounts in 2020, many of them even breaking their previous records.  This goes to show that arbitration remains a robust dispute resolution mechanism, which has proven its ability to adapt to the highly challenging circumstances of the past year.

It was also a clear side effect of the pandemic that there was a significant shift to virtual hearings.  While users have been slowly moving towards virtual hearings for a number of years, it appears that 2020 will be recognised as the year in which virtual hearings went mainstream, allowing arbitral institutions all over the world to continue to serve the needs of their users.

Simon Chapman
Simon Chapman
Partner
+852 21014217
Rebecca Warder
Rebecca Warder
Professional Support Lawyer
+44 20 7466 3418
Jacob Sin
Jacob Sin
Associate
+852 21014230

ENGLISH HIGH COURT STAYS COURT PROCEEDINGS IN FAVOUR OF ARBITRATION AND INTERPRETS CONFLICTING DISPUTE RESOLUTION PROVISIONS

In Helice Leasing S.A.S v PT Garuda Indonesia (Persero) TBK [2021] EWHC 99 (Comm), the English High Court interpreted seemingly conflicting dispute resolution provisions in an aircraft operating lease (the “Lease”). The Lease included an arbitration clause providing for “any dispute” to be resolved by the London Court of International Arbitration (“LCIA”) and gave the lessor an option to “proceed by appropriate court action” in case of an Event of Default, which included non-payment. When the lessor commenced court proceedings to recover rent arrears, the lessee retaliated by successfully applying to stay proceedings in favour of arbitration under s9 of the Arbitration Act 1996 (the “Act”). The High Court held that the parties had agreed to refer disputes to arbitration despite the existence of the allegedly conflicting option to proceed by court action, and set out some guidance on what constituted a “dispute” in an arbitration clause.

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