Conference overview: International Arbitration in the Spotlight: from Tokyo to New York

On 20 March 2017 Moscow hosted International Arbitration in the Spotlight: from Tokyo to New York, a conference organized by the LF Academy and Arbitration Centre at the Autonomous Non-profit Organisation ”Institute of Modern Arbitration” (Russia). CIS Arbitration Forum was its media partner.

The first part of the event was devoted to the most recent trends in the development of arbitration rules in different countries and the main difficulties faced by arbitration institutions. In the second part, the speakers discussed such topics as investment arbitration, corporate disputes, temporal collisions and parallel proceedings. This program format made it possible to see both common problems in arbitration and to look at deeper specialized issues.

Trends in the development of arbitration rules

In the first session of the conference, speakers presented what’s new in the regulations of arbitration institutions such as the ICAC and the MAC at the RF CCI, the Vienna International Arbitration Centre (VIAC), the London Court International Arbitration (LCIA), the Singapore International Arbitration Centre (SIAC), the German Institute of Arbitration (DIS), the International Arbitration Centre in Hong Kong (HKIAC), and the International Chamber of Commerce (ICC).

The speakers discussed the tendency to complicate the arbitration procedure and the judicialisation of arbitration. Such trends, according to Manfred Haider (VIAC), are associated with an increase in adversarial cases, forsaking the consensual elements inherent in arbitration. To eliminate such problems, the VIAC is developing more detailed regulation. The introduction of a large number of guidelines affects the flexibility of the arbitral process, although it makes the result more predictable. The VIAC has deliberately refused to introduce an emergency arbitrator procedure, mandatory expedited proceedings for smaller claims, and the institutional appointment of arbitrators for multi-party arbitration.

Tatiana Menshenina (Withersworldwide) reported that, on the contrary, the English state courts are taking measures to speed up and simplify the judicial process, by limiting the number and size of documents submitted; nevertheless arbitration still remains a lengthy procedure prescribed by the case’s complexity.

Tatiana Menshenina also spoke about the changes in the LCIA Rules of 2014: the development of the guidelines, the practice of appointing an emergency arbitrator, the redistribution of costs and the consolidation of claims. The LCIA is planning to publish short reports on cases without disclosing the names of the parties, but with possible disclosure of the names of representatives to motivate their professional conduct.

The new SIAC 2016 Rules have revised provisions on consolidating claims, an innovative procedure for the early dismissal of claims, an improved expedited procedure, and emergency arbitrator procedures.

James Menz (DIS) spoke about the German Institute of Arbitration (DIS) and reported on major changes in the rules of arbitration. The Institute has adopted special rules for resolving corporate disputes, expedited procedure, sports arbitration, and administering the ad hoc procedure. The DIS has also adopted 10 guidelines for more predictable and transparent arbitration.

Lord Peter Goldsmith (HKIAC) introduced the International Arbitration Centre in Hong Kong. He expressed the opinion that the rules of various arbitration institutions are increasingly converging.

Hong Kong is named the most preferred place of arbitration outside Europe by the result of studies at Queen Mary University (3rd place after London and Paris, Singapore is in 4th place). Hong Kong has a certain autonomy and its own law system, independent of China, based on traditional English law. HKIAC offers a choice to the parties in how to pay the arbitral tribunal, special provisions for multi-party situations, for consolidation of claims, and expedited procedure.

During the presentation of the ICC, Maciej Jamka (K&L Gates) named the main challenges any arbitration centre faces: transparency, time and costs. To improve the transparency of arbitration, the ICC may disclose the names of the arbitrators, the methods of their appointment, their nationality and role in the arbitration and other data. Also the ICC, upon request of any party, may communicate the reasons for the challenge or replacement of arbitrators and other decisions by the ICC. The ICC rules contain time limits for certain procedural actions. In addition, there is the possibility of expedited consideration of a dispute, which reduces the costs of the parties.

ICAC and MAC at the RF CCI, presented by Alexey Kostin, have also adopted a number of innovations. The new Rules of the ICAC and the MAC at the RF CCI came into force in February 2017. 4 years of discussion in connection with the new arbitration law preceded the adoption of the new rules. In the course of the reform, the regime of dualism in regulating arbitration in Russia (internal and external arbitration) has been preserved.

Earlier, the ICAC could only consider international disputes, but now internal disputes are also within its remit. The ICAC has adopted four separate sets of rules: for resolving international, internal, corporate, and sport disputes. In developing the new rules the ICAC considered the need for an effective arbitration procedure within reasonable time and cost parameters. The new Rules reflect the ideas on consolidating claims, on additional parties, and on the prima facie decision on competence.

Tatiana Polevshchikova (KLRCA) presented Kuala Lumpur Regional Centre for Arbitration and shared that the list of arbitrators contain more than 1100 arbitrators from around the world, including from Russia; in 2016, the centre considered 618 cases. The KLRCA has rules for expedited arbitration: document-based arbitration takes 90 days, and in the case of hearings, it takes 160 days.

Investment arbitration

In this mini-session, the speakers talked about how investment arbitration differs from other types of commercial arbitration, and gave examples of resolving investment disputes. Nikita Kondrashov (Luther) made a presentation on investment disputes in the field of electricity supply. These disputes were caused by a change in investment regulation in the European Union and a frustration of investors’ expectations.

Brigitte Stern (University of Paris I Pantheon-Sorbonne) described the differences between the procedure for considering commercial and investment disputes, conventions governing investment issues, special rules of interpretation and general principles of international law.

In the second session, the speakers discussed corporate arbitration, temporal conflicts between the old and new editions of arbitral rules and the issues of parallel proceedings.

Corporate disputes

Anton Asoskov (arbitrator and member of the presidium of the ICAC at the RF CCI) commented on Russian reform in the field of arbitrability of corporate disputes and new rules for considering corporate disputes. In particular, Anton Asoskov examined in detail the issues of expressing consent to arbitration by various parties to arbitration agreements, and issues related to the procedural status of corporation participants joining arbitration. He also considered situations where a single legal entity may have several representatives with different arguments and other interesting situations.

Dick van Gerven and Gerard Meijer (NautaDutilh) prepared a review of the practice of handling corporate disputes in arbitration institutions of Belgium and the Netherlands. They covered issues on joining arbitration, on the parties to the arbitration agreement, arbitrability of disputes on the validity of shareholders’ decisions, the introduction of arbitration clauses after the incorporation of a company and other matters.

Parallel proceedings and temporal collisions

In the practice of lawyers, problems often arise associated with parallel proceedings. Sophie Lamb (Latham & Watkins) considered the question of when (if ever) an arbitral tribunal should stay its own proceedings in favour of court proceedings. She made recommendations based on various criteria, including on where the second suit started (at the place of arbitration or in another country) and what the subject of the dispute is.

Olesya Petrol (the Russian School of Private Law (Institute)) presented a topic on which rules should be applied in an arbitration dispute: the rules in the wording at the time of the entering the agreement or the rules in force at the time of the commencement of the arbitration. Olesya Petrol reviewed practice in Russia, England, France, Germany and Switzerland on temporal collisions and presented an algorithm for determining the applicable wording of the rules and the criteria for challenging an arbitration award.

Preferences in choosing an arbitration institution

In the third session, those present at the conference took part in a survey on preferences when choosing an arbitration institute or arbitrators. It turned out that the conference participants trust Russian and foreign arbitration institutions almost equally. When choosing a specific arbitration centre, they consider the reputation of the institution and the geography and language of the parties to the dispute in the first place. In second place those surveyed take into account arbitral rules and the composition of the administrative body.

In the matter of the choice of arbitrators, conference participants preferred a procedure based on the parties’ free choice for the selection of arbitrators. During the discussion, in-house-lawyers answered questions about the choice of arbitration institute for certain contracts. The respondents also talked about their preferences based on the price, reputation, and availability of the arbitrators.

All arbitration institutions try to offer their clients the best conditions for transparency, timing and cost of the process, and the number and reputation of arbitrators. In Russia, during the arbitration reforms, several new arbitration institutions have appeared. They are developing dynamically and adopting the long-standing experience of both foreign and Russian arbitration. Hopefully, despite international sanctions and the economic recession, arbitration will strengthen its position in Russia and become more attractive for the international community.

Daria Zhdan-Pushkina

Redstone Chambers