CROSS-BORDER LITIGATION: INTERNATIONAL PERSPECTIVES

We are pleased to release the third issue of our periodic publication “Cross-Border Litigation”, designed to highlight legal and practical issues specific to litigation with an international aspect.

Tapping into the expertise of the firm’s leading commercial litigators across the globe, the publication gives readers the benefit of their hands-on experience and flags key developments that should be on commercial parties’ radars.

Topics covered in this issue include:

  • A selection of recent developments from across the globe
  • Litigation funding on the rise internationally
  • Judicial turf wars in Dubai
    Is this the end of the “conduit” jurisdiction?
  • Multi-jurisdictional litigation: Lessons from cross-border intellectual property enforcement
  • Introducing…
    Our new Milan office and Laura Orlando
  • The growing “internationalisation” of China’s courts
  • Indonesia-related commercial contracts
    Guide to dispute resolution clauses

To download the publication, click here.

To read the previous issues, click here.

Adam Johnson QC
Adam Johnson QC
Partner
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Anna Pertoldi
Anna Pertoldi
Partner
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Jan O'Neill
Jan O'Neill
Professional Support Lawyer
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Filed under China, Funding

DISPUTE RESOLUTION IN ASIA-PACIFIC: PARTIES SEEK EFFICIENT PROCESSES AND ENFORCEABLE OUTCOMES

Following our report on the Global Pound Conference series, which brought together over 4000 stakeholders at 28 conferences worldwide, our analysis of the Asia Pacific results reveals different demands in Asia and Oceania.

Six Asia Pacific cities hosted conferences to assess how dispute resolution can be improved: Singapore; Hong Kong; Chandigarh, India; Bangkok, Thailand; Sydney, Australia and Auckland, New Zealand. Each conference addressed the demand side (commercial party perspectives on dispute resolution); the supply side (what advisers and providers are delivering to commercial parties); the key obstacles and challenges; and what needs to be addressed to effect change.

In Asia the data revealed a clear desire for enhanced regulation of mediation compared to Oceania. At first blush, this could be said to be rooted in civil versus common law traditions. But only one of the Asian countries to host a GPC event, Thailand, has a civil-law system. The reason appears to be more complex: enhanced regulation, particularly around enforcement, would lend credibility to mediation in Asia as a viable alternative to litigation or arbitration. This is particularly so in the context of commercial cross-border disputes. UNCITRAL’s proposed New York-style Convention on the mutual recognition and enforcement of mediation settlement agreements is likely to be applauded in Asia and may hail an inflection point for the use of mediation.

In Oceania, the results reveal more appetite amongst businesses for (a) front-loading in terms of protocols and clauses promoting ADR and (b) collaboration between parties and lawyers. This accords more with the data from other GPC conferences worldwide.

Region-wide, the data highlights that commercial parties want to use mediation and other ADR processes more, either alone or as an adjunct to adversarial proceedings. However, the data shows that the market is not responding adequately. As a result, mediation remains under-utilised, and actual use lags behind positive attitudes to it. Unless parties and their advisors actively take a different course (for example through inserting escalation clauses in contracts, actively proposing mediation at the point of dispute, or by following mandatory mediation protocols), there is likely to remain a perpetuation of the “same old processes” – litigation and arbitration.

Yet parties increasingly seek informal processes driven by commercial, cultural, and business needs that require a negotiated settlement. Layered upon this, technology is likely to assist in any transition from formal to informal dispute resolution processes. Unconstrained by rules of procedure, mediation is well-placed to capitalise on the greater adoption of technology in dispute resolution. Online Dispute Resolution has the capacity to fundamentally change how disputes are resolved in the future. The planned Asia Pacific ODR platform for B2B disputes will promote negotiation and mediation as pre-cursers to arbitration. In the long-tern, the development of an online region-wide platform may be highly important in reforming approaches to commercial dispute resolution in the region.

To read more about the Asia Pacific GPC results and what this means for your business, please see our article published in the American Bar Association’s Dispute Resolution Magazine Spring 2018 edition here.

 

Justin D'Agostino
Justin D'Agostino
Global Head of Practice, Dispute Resolution and Regional Managing Partner
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May Tai
May Tai
Greater China Managing Partner, Hong Kong
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Dominic Geiser
Dominic Geiser
Partner, Dispute Resolution Hong Kong
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Anita Phillips
Anita Phillips
Professional Support Consultant, Dispute Resolution Hong Kong
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Filed under ADR, Arbitration, Mediation, Mediation (General)

UK SUPREME COURT CLARIFIES LEGAL POSITION ON “NO ORAL MODIFICATION” CONTRACTUAL CLAUSES

Parties to commercial contracts often insert a “no oral modification” (or NOM) clause to prevent attempts to undermine written agreements by informal means. Such clauses are intended to prevent contracting parties being bound by subsequent variations unless the specified formalities (for example, it is fairly typical in commercial contracts that a variation must be recorded in writing and signed by the parties) are complied with.

In the recent decision of Rock Advertising Limited v MWB Business Exchange Centres Limited [2018] UKSC 24, the UK Supreme Court unanimously held that an agreed oral amendment to revise the terms of a payment schedule to a lease contract, which contained a NOM clause, was ineffective. The majority of the UK Supreme Court based its reasoning on the broad proposition that the law should give effect to contractual provisions which required specified formalities to be observed to recognise a variation. Lord Sumption (who gave the judgment for the majority) disagreed with the Court of Appeal’s view that recognising the oral variation, despite the NOM, promoted party autonomy. On the contrary, he found that the effect of the Court of Appeal’s ruling was to override the contracting parties’ intentions such that they would be unable validly to bind themselves as to the manner in which future changes in their legal relations were to be achieved, however clearly they originally expressed their intentions in that regard.

While the UK Supreme Court was aware that its decision may cause injustice to a party who had relied on the orally varied contract to its detriment, it pointed out that various doctrines of estoppel would provide a safeguard in appropriate cases.

The Court also commented, by way of obiter dictum, on the rule in Foakes v Beer (which provides that part payment of a debt is not good consideration for the release of the whole) to the effect that to depart from the rule would require a re-examination of the decision in Foakes v Beer and while “it is probably ripe for re-examination“, it should be a matter for an enlarged panel of the Court.

For more details, please see our blog post on the Supreme Court judgment here.

 

Gareth Thomas
Gareth Thomas
Partner, Head of commercial litigation, Hong Kong
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Dominic Geiser
Dominic Geiser
Partner, Hong Kong
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Jojo Fan
Jojo Fan
Senior Associate, Hong Kong
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Filed under Contract, Hong Kong

Shaping the future of dispute resolution: global themes and regional differences revealed

The Global Pound Conference series – a unique and ambitious project to inform how commercial disputes should be resolved to better serve modern business – brought together over 4000 dispute resolution stakeholders, at 28 conferences in 24 countries worldwide.

Herbert Smith Freehills, global founding sponsor of the series, has teamed up with PwC and IMI (International Mediation Institute) to identify key insights from the voting data. With a focus on the needs of in-house counsel, this ground-breaking report challenges the traditional and fundamental notions of what clients want and how lawyers should represent them in a dispute. Continue reading

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Filed under ADR, Arbitration, Mediation

Podcast: How Arbitration and ADR can be used together

In this short podcast Professional Support Consultants Hannah Ambrose and Vanessa Naish look at how Arbitration and Alternative Dispute Resolution (or “ADR”) can work together. The podcast considers how parties can agree to an ADR process in addition to, or alongside arbitration, looking at approaches in different jurisdictions and under different arbitral institutional rules, before turning to the complexities of drafting escalation clauses in contracts. Finally it looks at how a successful settlement should be formalised to be most effective and enforceable. Continue reading

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Filed under ADR, Arbitration, Mediation (General)

2018 International Arbitration Survey – Enforcement of Arbitration Awards in the ASEAN region

This year marks the 60th anniversary of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, the “New York Convention”. Widely seen as one of the most successful international law treaties, the New York Convention was the foundation for the successful growth of arbitration as a preferred method for resolving international business disputes.

In connection with this significant milestone, Herbert Smith Freehills is conducting a survey on the enforcement of arbitration awards in the ASEAN region. We are keen to hear your views on how this enforcement regime has operated in practice in the ASEAN region, and how effective it is thought to be.

The survey will take less than 10 minutes to complete. Your participation will provide important information to support the research. All responses will be respected as private and confidential. The survey closes on 1 June 2018.

The results of this survey should be directly relevant and important to all businesses and enterprises that trade or invest into and across the ASEAN region. We will be glad to share the key findings and conclusions from the survey with all contributors.

Please follow this link to begin the survey: https://www.surveymonkey.com/r/92MKYPW.

Thank you very much for your support. 

 

Alastair Henderson
Alastair Henderson
Managing Partner, Southeast Asia
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Kritika Venugopal
Kritika Venugopal
Senior Associate, Singapore
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Filed under Arbitration, South East Asia

Supreme Court decision clarifies basis for the award of Wrotham Park damages

We discussed aspects of “Wrotham Park damages” (also called “license fee damages” or “negotiating damages”) in Herbert Smith Freehills Hong Kong office’s recent Contract Disputes Seminar “Getting your just deserts: remedies for breach of contract”.

To recap, in some cases where there has been a breach of contract, instead of awarding damages calculated on the conventional causation basis, the court may instead award negotiating damages. Such damages are calculated on a hypothetical basis, as the sum which might reasonably have been negotiated between the plaintiff and the defendant had the defendant sought the plaintiff’s permission to do what it did (in breach of contract). The Wrotham Park principle has been applied by the Hong Kong courts.

In the recent decision of Morris-Garner and another v One Step (Support) Ltd [2018] UKSC 20, the UK Supreme Court considered the basis for awarding negotiating damages, and narrowed down the circumstances in which such damages may be claimed. In particular, the Supreme Court rejected the idea that negotiating damages would be available whenever the court considers them to be the “just” response to a contractual breach.

For more details, please see our blog post on the Supreme Court judgment here.

Gareth Thomas
Gareth Thomas
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Dominic Geiser
Dominic Geiser
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Rachel Yu
Rachel Yu
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Filed under Contract, Remedies

Hong Kong Court of Final Appeal clarifies the meaning of “Malice” in defamation claims

The Court of Final Appeal (“CFA“) has handed down its much anticipated judgment in Jonathan Lu & Others v Paul Chan Mo Po & Anor [2018] HKCFA 11 (10 April 2018). The central issue in Paul Chan was the operation of “qualified privilege” when used by defendants in seeking to defeat defamation claims. “Qualified privilege” arises when the law recognises that the need for uninhibited communication outweighs the need to protect one’s reputation. Specifically, the CFA was asked to state its approach to “malice” which is a ground to rebut such a defence. In short, the CFA ruled that “malice” means any purpose apart from that protected under “qualified privilege” and that whether the defendant knew the statements to be false or not, on its own, is not sufficient to establish “malice”. Of interest to legal practitioners, the CFA also laid out the approach by which a jury should be directed when defamation cases are concerned. The CFA allowed the Plaintiffs’ appeal and directed the case to be retried at the Court of First Instance (“CFI“). Continue reading

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Filed under Defamation

Justin D’Agostino to lead ICC Court’s new Belt and Road Commission

Justin D’Agostino, Herbert Smith Freehills’ Global Head of Disputes, has been appointed chair of a new ICC Court commission to develop the ICC’s approach to dispute resolution procedures for China’s Belt and Road initiative.

“There is no ‘one-size-fits-all’ method of resolving Belt and Road disputes. But there is a concerted effort to encourage mediation clauses in Belt and Road agreements, with provision for arbitration if mediation fails,” said D’Agostino, who is also Hong Kong’s alternate member of the ICC Court.

“ICC is already a world leading provider of arbitration and mediation services, with tried and tested mechanisms and a strong pool of arbitrators and mediators. It is ideally placed to provide appropriate, effective dispute resolution services to parties all along the New Silk Road”.

The massive scale of Belt and Road is generating huge numbers of infrastructure projects across Asia and beyond – and every new project also has the potential for complex disputes.

Herbert Smith Freehills is engaged in a significant quantity of work generated by the US$900 billion Belt and Road initiative, advising on deals and projects worth over US$10 billion. Last week, the firm welcomed three new partners to our Greater China practice. Hew Kian Heong, Ellen Zhang and Michelle Li will further strengthen our existing team advising clients on Belt and Road projects.

“As China’s new business champions go global, we are increasingly well-placed to advise them on expansion around the globe, including any international disputes that may arise – both along the Belt and Road and other investment corridors,” said D’Agostino.

Click here for more on resolving disputes that arise out of Belt and Road transactions. This article originally appeared in the 5th edition of our quarterly publication, Inside Arbitration.

For further information, please contact Justin D’Agostino, Global Head of Practice – Dispute Resolution and Regional Managing Partner – Asia, or your usual Herbert Smith Freehills contact.

Justin D'Agostino
Justin D'Agostino
Global head of practice, dispute resolution and regional managing partner, Asia
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Filed under ADR, Arbitration, China, Hong Kong

An international convention on the enforcement of mediated settlements – UNCITRAL moves one step closer

The UNCITRAL working group that has for several years now been considering the potential for an international enforcement regime for international mediation has now completed its work and produced draft instruments.

At its most recent meeting in New York, the UNCITRAL Working Group II (Dispute Settlement – formerly Arbitration and Conciliation) approved a draft convention and a draft amended Model Law on international settlement agreements resulting from mediation. Continue reading

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Filed under Government proposals and consultations, Mediation (General)