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Stone Soup Mini-Course: Good Questions

ADR Prof Blog - Sun, 2017-07-23 21:05
In this mini-course so far, we have noted that qualitative research can be cool and insightful, learning can be more fun, and there are tons of things that you might want to know and you want your students to know. Today, we will consider how to frame questions to get the most valid possible information … Continue reading Stone Soup Mini-Course: Good Questions →

Enforcing Foreign Diktat: Puncturing the Stereotype

Kluwer Arbitration Blog - Sun, 2017-07-23 19:57

Moazzam Khan and Shweta Sahu

YSIAC

India has long been regarded as an unappealing centre for arbitration – be it as the seat of arbitration or as the place of final enforcement of the arbitral award. Indian judiciary is often quoted to be over interfering in matters of arbitration and enforcement. If fact could replace fiction, in the last decade, Shylock would have a hard time enforcing his rights to his money with little hope of claiming a pound of Antonio’s flesh. The Indian courts wouldn’t shy from reopening and rehashing the proceedings already happened before the Duke of Venice, a twist in the tale that could make Shakespeare rewrite the famous climax and make Portia’s wit of little consequence indeed. While this reputation may have been well-deserved in the decade past, the ground reality since has seen a galactic shift. The legislature and judiciary have together taken upon themselves to ensure this course correction.

In this article we bust the myth that is an enforcement defiant India in context of foreign awards.

A. The ever-shrinking scope of resisting enforcement of foreign awards in India:

The legislature and judiciary have restricted resistance to enforcement of a foreign award only on established grounds under Section 48 of the Arbitration and Conciliation Act 1996 (“Act”) and, in keeping with the view of arbitrally-progressive jurisdictions, have held that executing courts cannot review the award on merits.

Some (the authors included) would even argue that under the present regime, it is easier to enforce a foreign award in India than a domestic one.

i. Foreign-Seated Awards – no longer open to challenge in India:

The myriad of challenges to enforcement of foreign awards in India had become a nightmare for parties seeking enforcement in India. The uncertainty associated with enforcement of foreign awards reached its zenith with Bhatia International v. Bulk Trading S.A. (2002) 4 SCC 105 which laid down that Indian courts would have jurisdiction in international commercial arbitrations, irrespective of the seat of the arbitration. The resulting jurisprudence saw Indian courts not only refusing enforcement but even setting aside foreign awards. The time was ripe for the proverbial hero to emerge and save foreign seated arbitrations from the un-welcome interventions by Indian Courts. In September 2012, a five judge bench of the Hon’ble Supreme Court of India delivered its much celebrated decision in BALCO v. Kaiser Aluminium (2012) 9 SCC 552 which ousted the jurisdiction of Indian courts in foreign-seated arbitration. Post BALCO, foreign awards cannot be challenged in India. (However, this judgment was applied prospectively, to arbitral agreements executed after 6 September 2012 i.e. the date of the judgment.)

ii. “Patent Illegality” no longer a ground of resisting enforcement of foreign awards:

The introduction of the test of “patent illegality” to the already infamous ground of “public policy”, as interpreted in ONGC v. Saw Pipes (2003) 5 SCC 705, meant that enforcement of a foreign award in India could be challenged on the basis that the foreign award was contrary to the substantive law of India or in contravention of contractual terms etc. – determinations which ought to be in the sole remit of the arbitrator.

After almost a decade, the scope of challenge was restricted in Shri Lal Mahal Ltd. v. Progetto Grano SPA (2014) 2 SCC 433 wherein “public policy” under Section 48(2)(b) of the Act was narrowly interpreted and the recourse to the ground of “patent illegality” for challenging enforcement of foreign awards was no longer available.

The pro-arbitration shift in the judicial mindset can also be gleaned from the fact that the in judgment Shri Lal Mahal Ltd., the Supreme Court (speaking through Hon’ble Mr. Justice R.M. Lodha) overruled its own ruling in Phulchand Exports Limited v. O.OO. Patriot (2011) 10 SCC 300 (an earlier judgment delivered by Justice Lodha himself – wherein the Supreme Court had ruled that a party could resist enforcement of a foreign award on grounds of “patent illegality”).

As the statute reads today, even domestic awards cannot be vitiated on grounds of being patently illegal in India-seated international commercial arbitrations. (Arbitration and Conciliation Act 1996, section 23(2A))

iii. A foreign award need not be stamped under the Indian Stamp Act:

A domestic award may be refused enforcement if it hasn’t been adequately stamped, in accordance with laws of India. However, resisting enforcement of a foreign award on the ground that it is not stamped as per the Indian law, has been shunned as a frivolous ground for delaying and obstructing enforcement of foreign awards. (See Naval Gent Maritime Ltd. v. Shivnath Rai Harnarain (I) Ltd. (2009) 163 DLT 391 (Del))

iv. Intention to arbitrate is paramount:

In a recent appeal, the Supreme Court upheld the finding of the Bombay High Court that in a foreign seated arbitration (and resultant award), an un-signed arbitration agreement would not defeat the award. (See Govind Rubber v Louids Dreyfus Commodities Asia P. Ltd. (2015) 13 SCC 477) The court preferred to give primacy to the intention and conduct of parties for construing arbitration agreements over the mandate of the parties’ signatures required in the agreement.

v. Burden of proof on the resisting party:

Similarly, in a recent ruling, the Bombay High Court placed a “higher burden on party resisting enforcement of giving necessary proof which stands on higher pedestal than evidence” than the burden on the party seeking enforcement of a foreign award, who is only expected to produce necessary evidence. (See Integrated Sales Services Ltd., Hong Kong v. Arun Dev s/o Govindvishnu Uppadhyaya & Ors. (2017) 1 AIR Bom R 715)

vi. No third party or the Government can object to enforcement of a foreign award:

With the Supreme Court taking the lead in a consistent pro-enforcement approach of foreign awards, the High Courts have also been keeping up with the pace, with the High Court of Delhi being the harbinger in this respect. In NTT Docomo Inc. v. TATA Sons Ltd (2017) SCC OnLine Del 8078, the Delhi High Court allowed enforcement of an LCIA award after rejecting the Reserve Bank of India’s objections that the underlying terms of settlement (wherein the Indian entity, Tata Sons, was required to pay $1.17 billion to NTT Docomo, a Japanese company) would be against the public policy of India. The Delhi High Court held that since RBI was not a party to the award, it could not maintain any challenge to its enforcement.

vii. Reciprocating countries for enforcement of foreign awards outnumber the ones for foreign judgments:

48 countries have been notified by the Central Government of India as “reciprocating countries” under the New York Convention, while only 12 nations have been recognized as reciprocating countries under Section 44A of the Code of Civil Procedure for execution of foreign judgments. In respect of judgments emanating from the remaining countries, the parties seeking execution would have to file a suit in India and place in evidence the underlying foreign judgment.

B. The legislative intent: Arbitration and Conciliation (Amendment) Act 2015

Consistent with the pro-enforcement approach adopted by Indian courts, the recent legislative changes to the Act vide the Arbitration and Conciliation (Amendment) Act 2015 clarify the extent to which a foreign award can be said to be in conflict with the public policy of India. Subsequent to these amendments, only the following cases amount to violation of “public policy” under Section 48 of the Act:

i. the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81 of the Act; or
ii. it is in contravention with the fundamental policy of Indian law; or
iii. it is in conflict with the most basic notions of morality or justice.

The tests for these grounds have been summed by the Supreme Court in Associate Builders v. Delhi Development Authority (2014) (4) ARBLR 307 (SC). It has been further clarified that “the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.” Such amendments are to be seen as strong measures in response to the infamous perception of India being liberal to the challenges to enforcement of arbitral awards on grounds of “public policy”.

Furthermore, subsequent to these amendments, even after making of the arbitral Award, a successful party which is entitled to seek the enforcement of the award can apply to the court under section 9 of the Act, for protection by grant of interim measures, pending enforcement of the foreign award. (See, Arbitration and Conciliation Act 1996, section 2(2) proviso)

C. Protectors of the Realm: Commercial Courts in India

The Indian legal system continues to face criticism on account of the time taken in disposal of cases. Thus, with the objective to accelerate disposal of high value commercial disputes, Commercial Courts, Commercial Division and Commercial Appellate Division of High Court Act, 2015 (“Commercial Courts Act”) was enacted.

Under this regime, specialized commercial courts were set up for speedy and effective dispute resolution of all commercial disputes.

The Commercial Courts Act also provided that proceedings emanating from arbitrations (both foreign and domestic), where the subject matter is a commercial dispute, would also be heard and disposed of by the Commercial Courts (Commercial Courts Act, section 10). The statute amended the application of the extant Code of Civil Procedure 1908 to commercial disputes, provided for a mechanism for speedy resolution, and a much needed requirement of appointment of only those judges which have experience in dealing with commercial disputes. (Commercial Courts Act, sections 4, 5)

“Change is the end result of all true learning”

Liberalization of policies and clarified norms of doing business in India have made investments more lucrative and attractive. However, to truly sustain its growing global credibility, India needed to deal with the elephant in the room.

His Lordship Justice D. Desai in 1982, of the Supreme Court of India had, in relation to the then extant arbitral laws, observed that “the way in which the proceedings under the Act are conducted and without exception challenged in Courts, has made Lawyers laugh and legal philosophers weep” (Guru Nanak Foundation v Rattan Singh (1982) SCR (1) 842). India has since come a long way. In face of the legislative and judicial changes brought in and the evident shift in the judicial mindset, India’s current reputation of being enforcement unfriendly is largely undeserving and a remnant of the decade past – the Bhatia Raj. India is no longer emerging as a pro-arbitration and pro-enforcement jurisdiction. It has already arrived. Sit-up and take notice!

More from our authors: Arbitrators as Lawmakers
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The post Enforcing Foreign Diktat: Puncturing the Stereotype appeared first on Kluwer Arbitration Blog.

ADP National Chairman: APC's Failure Created Current Agitation ... - THISDAY Newspapers

Google International ADR News - Fri, 2017-07-21 18:38

ADP National Chairman: APC's Failure Created Current Agitation ...
THISDAY Newspapers
Engr. Yusuf Yabagi Sani is the National Chairman of one of the newly registered political parties, the Action Democratic Party (ADP). In this interview, he talks ...

and more »

Interesting China Conference - Mediate.com

Google International ADR News - Fri, 2017-07-21 12:29

Interesting China Conference
Mediate.com
Mainland – Hong Kong Joint Mediation Center (MHJMC) will jointly organise the International Mediation Summit with China Council for the Promotion of International Trade (CCPIT), Hangzhou Municipal Government, CCPIT Mediation Center Hangzhou ... The ...

Interesting China Conference - Mediate.com

Google International ADR News - Fri, 2017-07-21 12:29

Interesting China Conference
Mediate.com
Mainland – Hong Kong Joint Mediation Center (MHJMC) will jointly organise the International Mediation Summit with China Council for the Promotion of International Trade (CCPIT), Hangzhou Municipal Government, CCPIT Mediation Center Hangzhou ... The ...

The Intellectual Property Review - Edition 6 Netherlands - Lexology (registration)

Google International ADR News - Fri, 2017-07-21 10:25

The Intellectual Property Review - Edition 6 Netherlands
Lexology (registration)
In terms of intellectual property law and litigation, the Netherlands ranks among the most important jurisdictions in Europe. IP cases in the Netherlands are handled by several courts that can boast extensive experience in that respect. The Hague Court ...

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Of Note: 21 June 2017 - Nashville Post (subscription)

Google International ADR News - Fri, 2017-07-21 07:00

Of Note: 21 June 2017
Nashville Post (subscription)
The two are now members of Baker Donelson's Center for Dispute Resolution, a group of more than 20 Baker Donelson attorneys with experience in a variety of alternative dispute resolution (ADR) techniques, including mediation, conciliation, mini-trials ...

Escalation Clauses – Where Do They Leave the Counterclaimant?

Kluwer Arbitration Blog - Thu, 2017-07-20 23:47

Natasha Peter

In a judgment of 24 May 2017 (Biogaran v International Drug Development, case n° 15-25.457), the commercial chamber of the French Cour de Cassation (Supreme Court) considered the question of whether a counterclaimant is bound by the requirements of a “multi-tier” dispute resolution clause. The clause in question required the parties to mediate as a precondition to court proceedings, but the court ruled that the defendant could nevertheless pursue a counterclaim that had not been submitted to mediation.

Since at least 2003 (with the landmark judgment of a mixed chamber of the Supreme Court in case n° 0019.42), the French courts have been clear that escalation clauses are in principle capable of imposing negotiation, conciliation or mediation as a condition precedent to litigation or arbitration. However, they have been equally clear that these clauses will only have this effect if they are drafted in terms that are mandatory, unambiguous and sufficiently specific. The decision in Biogaran v International Drug Development is a novel application of this line of reasoning.

The case originated in a claim brought by Biogaran in the Paris commercial court for alleged non-payment of sums due under a pharmaceuticals contract. According to the contract terms, the parties were required to conduct amicable negotiations of any dispute for a period of 60 days. If this did not succeed, the dispute was to be submitted to a mediator who would have a further 60 days to attempt to resolve it, “failing which the parties would submit to the jurisdiction of the Paris court” (free translation).

Biogaran complied with the amicable dispute resolution and mediation requirements before filing its court claim. The defendant, International Drug Development, responded with a counterclaim for termination of the contract – an issue which had not been considered in the mediation. The Paris court of appeal held that the counterclaim was barred for failure to comply with a condition precedent.

In overturning this decision, the Supreme Court reasoned that at the time when counterclaim was made, the proceedings had already been “commenced” (as that term is defined in Article 53 of the French Code of Civil Procedure). It was therefore irrelevant whether the contract required a mediation as a condition precedent to the commencement of proceedings. The question was rather whether it specifically imposed a precondition to the filing of a counterclaim – and without express wording to this effect, the court was not prepared to find that it did.

A careful consideration of the wording of a multi-tier dispute clause is already a recurrent feature of French jurisprudence on the subject. In a number of cases, the Supreme Court has refused to let vaguely worded clauses stand in the way of a party’s right of access to the courts, requiring, for example, that a contractual condition precedent must specify how the negotiation was to be conducted (see the decision of 29 April 2014, n° 12-27.004), and that it must be expressed in mandatory terms (see, for example, its decision of 29 January 2014, n°13-10833).

More recently, however, there have been a number of occasions on which the Supreme Court has found that the hurdle for imposing such a condition precedent has been met. A frequently cited decision is that of the mixed chamber of the Supreme Court on 12 December 2014 (Proximmo v Arnal-Lafon-Cayrou, n° 13-19.684, which has been followed, for example, in case n° 15-17.989 of 6 October 2016 and case n° 16-16.585 of 29 March 2017). The court held that a claim made by a firm of architects was barred because the claimant had not respected a contractual requirement to submit any dispute to conciliation by the order of architects before taking it to court. Notably, the court also held that this failure could not be remedied by the claimant submitting the dispute to the professional body while the litigation was on-going. The contractual requirement had to be complied with before the court action was started. Unlike in some other jurisdictions (such as England & Wales and Switzerland, to name only two examples), the French courts will thus not simply stay the proceedings in order to allow an escalation clause to be complied with – although if a claim is struck out, the claimant is usually free to start a fresh action once it has complied with the necessary preliminary requirements.

In Biogaran the court broke new ground in applying these principles to a counterclaim, but its reasoning is coherent with the previous jurisprudence. In Proximmo v Arnal-Lafon-Cayrou, the court’s refusal to grant a stay to allow the claimant to remedy its default was motivated by the fact that (at least on the facts of that case) the mediation had to be conducted before the court was seized of the case, so a stay would not overcome the problem. In Biogaran, given that the court was already seized, the requirement no longer applied.

Biogaran is particularly interesting given the sparsity of decisions on this subject in other jurisdictions. Certain jurisdictions seem to have adopted a similar line to the French court – for example, the Kansas Court of Appeals in Vanum Construction Co. Inc. v Magnum Block LLC (case no 103,385 of 10 December 2010) decided that a contractual clause which required mediation “as a condition precedent to arbitration or the institution [of] legal or equitable proceedings by either party” did not oblige the defendant to mediate before filing a counterclaim, because the mention in the clause of the “institution” of proceedings referred only to the commencement of a lawsuit and not to the filing of a counterclaim. Conversely, in the context of a FIDIC Red Book dispute resolution clause, the Bulgarian courts (in decision No. 1966 of 13 October 2015, commercial case No. 4069/2014) upheld an arbitral award refusing to consider the contractor’s counterclaims when the contractor had not first referred them to adjudication.

The English courts have adopted a more nuanced view, finding that as a matter of discretion they can exceptionally allow parties to bring additional claims (which presumably must include counterclaims) in the context of on-going litigation proceedings, without first complying with contractual dispute resolution provisions. The issue was considered by the English High Court, also in the context of a construction dispute, in the case of Connect Plus (M25) Limited v Highways England Company Limited [2016] EWHC 2614 (TCC). The claimant in that case argued that some of the issues before the court had not been considered by an expert, in breach of a contractual requirement. On the facts, the court disagreed, but it went on to say that if it were wrong, it would “unusually” exercise its discretion against staying the proceedings to allow these issues to go to expert determination, because the allegedly “new” claims were too closely interwoven with the pre-existing claims to allow any sort of sensible division between them. It is clear from the judgment, though, that the more usual approach would be for the English courts to stay any new claims until the relevant contractual preconditions had been complied with.

The issue is also expressly dealt with in some arbitral procedural rules. For example, both the Institution of Civil Engineers Arbitration Procedure (rule 5.2) and the Construction Industry Model Arbitration Rules (rule 3.5) expressly grant the arbitral tribunal jurisdiction over issues that are connected with and necessary for the determination of the dispute, irrespective of whether there has been compliance with any condition precedent to arbitration.

Nevertheless, absent any guidance in the rules of arbitration or applicable case law, counterclaimants are still left with a large degree of uncertainty as to their obligations, particularly where (as is often the case) the wording of the contract is not crystal clear. And of course the question of the continuing relevance of an escalation clause after a court or tribunal has been seized is not confined to situations where there is a counterclaim. Parties who have complied with a contractual precondition in respect of one aspect of their dispute are often faced with the question of whether their compliance was extensive enough. Are they required to submit exactly the same claim to the court or arbitration tribunal as was considered in the negotiation, mediation or adjudication? Or do they have some latitude to amend their arguments or even add new claims at a later date? These questions are of quite some practical importance given that parties often only engage lawyers when they file for litigation or arbitration, so the nature of the dispute will frequently evolve at that stage.

Although one should not attempt to read too much into a single decision, particularly one that does not have the force of binding precedent, the reasoning of the French Supreme Court in the Biogaran case proposes an interesting approach to this question. It suggests that there is distinction to be drawn between preconditions to commencing proceedings and preconditions to joining additional claims to proceedings that have already commenced. At least when the escalation clause is worded in general terms, one might infer that once proceedings have been commenced, the clause is no longer applicable to additional claims between the same parties (counterclaims or otherwise). This has the advantage of ensuring that once proceedings have been started, the court or tribunal has more scope to determine all the issues between the parties in a single set of proceedings. Very often, this will give effect to the underlying aim of the parties when they agreed to the escalation clause – that their dispute be resolved efficiently and with a minimum of cost.

Nevertheless, as we have seen, the French courts will pay close attention to the wording of the escalation clause itself (as of course will tribunals and courts in other jurisdictions), so each case must be considered on its own terms.

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Business Briefs - Seacoastonline.com

Google International ADR News - Thu, 2017-07-20 14:03

Business Briefs
Seacoastonline.com
The firm's attorneys focus on a wide range of practice areas including Estate Planning and Probate, Litigation, Municipal /Land Use, Employment, Real Estate, Business, Family Law, and Alternative Dispute Resolution. For more information ... Prior to ...

Indonesian Oil and Gas Sector: Foreign Investment and Dispute Resolution - Lexology (registration)

Google International ADR News - Thu, 2017-07-20 11:15

Indonesian Oil and Gas Sector: Foreign Investment and Dispute Resolution
Lexology (registration)
Indonesia does not recognize foreign court decisions, but international arbitration awards can be enforced in Indonesia through the mechanism provided in Law No. 30 of 1999 regarding Arbitration and Alternative Dispute Resolution (the “Arbitration Law”).

A California Correction? Legislature Will Consider Allowing Attorney Malpractice Proof from Mediation - Mediate.com

Google International ADR News - Thu, 2017-07-20 09:43

A California Correction? Legislature Will Consider Allowing Attorney Malpractice Proof from Mediation
Mediate.com
(See the NYSBA's Committee on Alternative Dispute Resolution Nov. 1, 2002, report at http://bit.ly/2rrpmf3.) The New York Legislature .... He is also a Fellow of the International Academy of Mediators. Mr. Kichaven also serves on the Board of Directors ...

Malabu Oil: A scam that became a deal - TheCable

Google International ADR News - Thu, 2017-07-20 05:57

TheCable

Malabu Oil: A scam that became a deal
TheCable
... Shell petroleum that was initially awarded the oil block headed to the International Centre for Settlements of Investment Disputes ICSID, in Washington claiming $2b in losses against the federal government arising from its huge investments at de ...

When Is It Too Late To Object: The Seoul Central District Court’s Judgment Regarding The Waiver Of The Right To Object

Kluwer Arbitration Blog - Wed, 2017-07-19 22:26

Hongjoong Kim and Umaer Khalil

A recent decision of the Seoul Central District Court provided guidance as to when a party should be considered to have waived its right to object to instances of non-compliance in arbitration proceedings. This post provides a summary of the Court’s judgment case and considers the possible ramifications of the Court’s reasoning for parties involved in arbitration proceedings in Korea.

The Arbitration Proceedings

The decision arose out of a challenge to an arbitration award issued under the Korean Commercial Arbitration Board’s (“KCAB”) Domestic Arbitration Rules 2011. Two Korean companies (the “Claimants”) had initiated arbitration proceedings against a Russian national (the “Respondent”) pursuant to a Joint Guarantee Agreement between the parties. The Joint Guarantee Agreement referred any disputes arising thereunder to arbitration by the KCAB, but did not specify which set of the KCAB’s rules would apply.

The KCAB has two sets of arbitration rules: domestic and international. One of the ways in which the domestic and international rules differ is the method of appointing the arbitral tribunal. Under the KCAB Domestic Arbitration Rules 2011, the KCAB provides each of the parties with a list of candidate arbitrators that the parties are required to rank in order of preference. The tribunal is then appointed by the KCAB based on the parties’ cumulative ranking of the candidate arbitrators. On the other hand, under the KCAB International Arbitration Rules 2011, the tribunal is appointed in a much more familiar fashion, with each side appointing a co-arbitrator, followed by the two co-arbitrators agreeing upon the chair-arbitrator. If the co-arbitrators are unable to agree, the chair is appointed by the KCAB.

Normally, an arbitration involving at least one party with its principal place of business outside Korea will be considered an “international arbitration,” and will therefore be subject to the KCAB International Arbitration Rules 2011. (Since the arbitration in this case was filed before the KCAB International Arbitration Rules 2016 came into effect, those rules are not considered in this post.)

However, in the present case, the Respondent, a Russian national, was a second generation Korean Russian with a Korean name. In addition, the Claimants’ Request for Arbitration had indicated that the Respondent was domiciled in Korea (the address had been provided to the Claimants by the Respondent for the purpose of the parties’ transaction). Based on the information available to it immediately after the Request for Arbitration was filed on 9 December 2014, the KCAB designated the dispute as one governed by the KCAB Domestic Arbitration Rules 2011.

In accordance with the Domestic Arbitration Rules 2011, on 11 December 2014, the KCAB wrote to the Respondent informing him of the arbitration and presenting him with a list of arbitrator candidates that he was asked to rank. The Respondent appointed its legal counsel on 24 December 2014 and returned the ranked list of arbitrators to the KCAB on 26 December 2014, without making any mention of the applicable rules or reserving his rights in this regard. The arbitral tribunal was constituted on 2 January 2015, pursuant to list-and-rank method under the KCAB Domestic Arbitration Rules 2011. On the same day, the KCAB informed the parties of the formation of the tribunal and that the first hearing date had been fixed for 26 January 2015. Upon a request by the Respondent, the date of the first hearing was changed to 9 February 2015. On 5 February 2015, the Respondent submitted its Answer to the Request for Arbitration.

In its Answer, the Respondent stated that since his principal place of business was located in Russia, the formation of the arbitral tribunal in accordance with the Domestic Arbitration Rules 2011 was against the parties’ arbitration agreement and the arbitral rules that should properly apply to the proceedings, i.e., the KCAB International Arbitration Rules 2011. The Respondent’s Answer requested an interim award in connection with this issue.

On 14 July 2015, the tribunal issued its final award in favor of the Claimants, together with its decision on the pre-merits issue of the constitution of the tribunal. Regarding the issue of the constitution of the tribunal, the tribunal found that the arbitration was properly subject to the KCAB International Arbitration Rules 2011, therefore the tribunal should have been constituted in accordance with those rules. However, the tribunal held that pursuant to Article 50 of the International Arbitration Rules 2011, if a party was aware of any non-compliance with the rules but still proceeded with the arbitration without promptly raising an objection, the party would be deemed to have waived its right to object. Since the Respondent had taken until the filing of its Answer on 5 February 2015 to make its objection, the tribunal found that the Respondent had waived its right to object to the constitution of the tribunal.

The Court’s Judgment in Set-Aside Proceedings

The Respondent sought to set aside the award in the Seoul Central District Court (the “Court”) pursuant to Article 36(2)(1)(d) of the Korean Arbitration Act (i.e., on the basis that the composition of the arbitral tribunal was not in accordance with the agreement of the parties).

The Court based its decision on Article 5 of the Korean Arbitration Act, which states that if a party knows that a non-mandatory provision of the Arbitration Act or an arbitration agreement has been breached, and still proceeds with the arbitration without raising an objection without delay, it “shall be deemed to have forfeited its right to object.”

The Court held that, based on the facts before it, it appeared that the Respondent had not been aware that the application of the KCAB Domestic Arbitration Rules 2011 was in violation of the parties’ agreement when he returned the ranked list of candidate arbitrators to the KCAB on 26 December 2014. The Court considered that the purpose of Article 5 of the Arbitration Act – to ensure the stability and economy of arbitral proceedings – had to be carefully balanced with need to ensure that the parties were afforded their right to select a tribunal in accordance with their agreed procedure. Since depriving a party of its rights in connection with the constitution of the tribunal formed grounds to annul an award, the waiver of such a right had to be considered very carefully.

Based on the foregoing findings, the Court held that raising an objection by the time of the Answer did not risk harming the stability and the economy of the proceedings, because of which the Respondent should not be considered to have waived its right to object to the constitution of the tribunal. Under the circumstances, the Court set aside the arbitral award on the ground that the composition of the tribunal was not in accordance with the parties’ agreed procedure.

Possible Ramifications

Given the novel situation that was before the Court, it is probable that the Court’s decision will serve as an important reference to parties involved in international arbitration proceedings in Korea.

In this regard, the Court’s decision raises several interesting issues, two of which are briefly discussed below:

(i) At first sight, the Court’s reasoning seems to suggest that a high standard should be applied to determining whether a party has waived its right to object by reason of a delay in raising the objection. It is possible that the Court’s reasoning will be referred to in future cases to suggest that a mere failure to raise an objection promptly is not enough to waive the right to object, but that the delay should be such as to indicate an intention by the delaying party that it waives its right to object to the non-compliance in question. In this regard, it would be important to note that while the Court did state that one had to be careful in applying Article 5, it does not seem to have expressly stated that such caution would necessarily mean applying a higher standard to whether there was delay in raising an objection or not. The Court’s decision in this regard seems to be based on the factual finding regarding the Respondent’s knowledge of the non-compliance, and not on a particular interpretation regarding the permissible duration of delay.

(ii) In considering the purpose of Article 5 of the Arbitration Act, the Court considered that Article 5 of the Arbitration Act was intended to ensure the stability and economy of arbitration proceedings. In addition to the purpose enunciated by the Court, it is also possible that Article 5 serves the purpose of preventing parties from taking a wait-and-see approach with respect to important stages in the proceedings. For example, there may be cases where a party would be required to object to the procedure for the constitution of the tribunal before the names of the arbitrators have actually been disclosed to the parties, to ensure that a party does not withhold its objection with the intent of raising it only if it does not like the tribunal resulting from the relevant procedure. While the present case was one in which the Respondent had very limited time to respond to the KCAB’s notice after engaging its counsel, it is possible that the reasoning in the present case can be referred to in other cases where this is not the case. In such cases, it may be necessary for the Court to consider whether Article 5 of the Arbitration Act should serve to prevent such wait-and-see tactics.

More from our authors: Arbitrators as Lawmakers
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The post When Is It Too Late To Object: The Seoul Central District Court’s Judgment Regarding The Waiver Of The Right To Object appeared first on Kluwer Arbitration Blog.

WANEP builds capacity of front line Peace Actors - BusinessGhana ... - BusinessGhana

Google International ADR News - Wed, 2017-07-19 19:58

WANEP builds capacity of front line Peace Actors - BusinessGhana ...
BusinessGhana
Northern Ghana, needs a certain culture of peace in order to derive maximum gains from the numerous agriculture interventions being implemented in the area.

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WANEP builds capacity of front line Peace Actors - BusinessGhana

Google International ADR News - Wed, 2017-07-19 19:39

WANEP builds capacity of front line Peace Actors
BusinessGhana
Mr. Yelyang explained that some of the front line peace actors in the NGGA peace crusade would be responsible for monitoring and reporting early warning information to WANEP-Ghana and the consortium, while some would perform Alternative Dispute ...

SportAccord Convention & LawAccord: "A Must-Attend for Any Lawyer Involved in the Legal Business of Sport" - Around the Rings (subscription)

Google International ADR News - Wed, 2017-07-19 09:48

SportAccord Convention & LawAccord: "A Must-Attend for Any Lawyer Involved in the Legal Business of Sport"
Around the Rings (subscription)
SportAccord Convention is attended by all international federations (IFs) and the LawAccord sessions will be of particular interest to IFs, cities and regions, event hosts, as well as lawyers and sports administrators. ... the increasing impact of ...

A Note to in House Lawyers: When Do You Appoint a Law Firm for an Arbitration?

Kluwer Arbitration Blog - Wed, 2017-07-19 01:21

Sadaff Habib

ArbitralWomen

Firms will often write that for effective representation it is best to engage law firms at an early stage in the dispute process. Whilst there may be some merit in this, it may not necessarily be entirely true. It is evident that in-house roles are not what they were initially thought to be. In house lawyers today are expected to do more than just ‘manage’ the dispute. The result: it is possible for some cases to be managed entirely in house and/ or for law firms to be involved at a later stage. So how does the in house lawyer decide when the time is ripe to get external counsel. Below are four (4) points that the in house lawyer should consider when deciding to get an external law firm on board.

1. Complexity and value of the dispute

It is true some disputes are more complex than others. In complex disputes, for example high profile shareholder disputes or construction disputes involving public works or infrastructure projects, it is preferred for a law firm to be on board at an early stage. This is because if your company is filing an arbitration for recovery of outstanding sums and the matter is relatively complex it may be fitting to have a firm on board before you file the case to determine if there is a case and the position of the company. Such a strategy would assist the company in saving costs.

If the case involves a subject matter outside the realm of the in house lawyer’s experience, then the in house lawyer is better suited to refer the dispute to the law firm from the outset.

The claim amount also plays a key role. Complexity is often associated with the value, and shareholders and board members with their commercial sense often associate the two together. In house lawyers are often persuaded to appoint law firms for high value disputes irrespective of complexity to play safe and ensure senior management is comfortable with the dispute management.

2. Cost

Some cases simply do not justify the cost of external counsel. As an in house lawyer, remember you yourself are a cost to the company. Therefore, you would best be served to come up with ways of reducing the company’s costs by internal dispute management, subject to your team’s capacity as opposed to outsourcing the matter. This is especially true if the dispute is relatively less complex and the value of the case is low. For such cases, in house lawyers should asses the strengths and weaknesses of their company’s position and suitably advise top management on the next steps. It may be that such cases are better off being settled particularly if the case has been filed against the company.

3. Time

Depending on your capacity, it might not be possible to handle the entire arbitration process especially if it is anticipated that lengthy pleadings will be involved. In such cases, in house counsel can work on the case at the initial stage that is can draft and submit the Request for Arbitration or Reply to the RFA as the case may be, and appoint arbitrators. At times, particularly if you are the respondent, the company may best be served for the in house lawyer to draft and respond to the submissions, because he is likely to be most familiar with the facts and the commercial goings-on of the company.

4. It’s your job to prepare your law firm

At the end of the day, some disputes by their very nature will require a firm to be pulled on board at the onset or after the initial submissions. For effective case management, it is the in house lawyer’s job to ensure the firm has all the documents and information it needs to prepare the case. It cannot be stressed enough that communication channels be open. In house lawyers will be benefited from preparing full factual and evidentiary briefs for their firms. This is because in house lawyers are best placed to gather all the information and relevant documents and collate them for the firm. This in turn reduces costs such as law firm billing hours and prevents wasting of time in the firm sending requests for information and the in house lawyer responding to their queries.

At the end of the day, it all depends on whether the ends justify the means. It’s a matter of cost, time and efficiently running the dispute to obtain a favourable outcome. Regardless, of when the law firm is involved, the in house lawyer is responsible for feeding the law firm with information in as much a collated a manner to achieve the desired results – cost efficiency and possible triumph.

The views expressed in this article are those of the author alone and should not be regarded as representative of, or binding upon ArbitralWomen and/or the author’s law firm.

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Stone Soup Mini-course:  What Do You Want To Know?

ADR Prof Blog - Tue, 2017-07-18 20:10
Do you remember when you were a kid, bursting with curiosity about how and why things worked they way they do?  If you’re a parent, grandparent, or other person in close contact with young children, you don’t have to go that far back to remember their intense wonderment. Woody Guthrie wrote a song about this, … Continue reading Stone Soup Mini-course:  What Do You Want To Know? →

Interesting China Conference

Business Conflict Blog - Tue, 2017-07-18 13:06

Colleagues at both the CCPIT Mediation Centers and the newly-minted Mainland-Hong Kong Joint Mediation Center have extended invitations to what promises to be a fascinating conference on 18-19 September in the beautiful city of Hangzhou.

The invitation is a broad one and I encourage those interested to contact the link provided below.

Mainland – Hong Kong Joint Mediation Center (MHJMC) will jointly organise the International Mediation Summit with China Council for the Promotion of International Trade (CCPIT), Hangzhou Municipal Government, CCPIT Mediation Center Hangzhou and the Asian Mediation Association. It will be held in Hangzhou Marriott Hotel, Qianjiang, No.399 Juyuan Road, Jianggan District, Hangzhou City, Zhejiang, China on 18 and 19 September 2017.

The Summit aims at promoting the use of commercial mediation internationally, enhancing global exchanges and cooperation in the field of mediation, endorsing China’s “Belt and Road” Initiative and Chinese reforms in alternative dispute resolution mechanism. Registration for the Summit is free of charge.

The Supreme People’s Court of PRC, China Law Society, All China Lawyers’ Association and the Department of Justice of Hong Kong SAR will be invited to be supporting organizations.

The discussion topics of the Summit will include but not limited to the following:

  • The Current Development of Online Dispute Resolution Mechanism
  • Dispute Settlement Methods Under the ‘Belt and Road’ Initiative and the Comparative Advantage of Commercial Mediation
  • The Current Development of and Future Outlook on the Internet and Dispute Resolution
  • Case Sharing on Cross-Border Commercial Mediation
  • Mediation and National Reforms on Alternative Dispute Resolution Mechanism

You are cordially invited to attend the summit. Hangzhou is an internationalized city with fabulous scenery.  It is expected that more than 350 delegates will be attending the summit, who are mediators from both China and abroad, judges, jurisprudential experts, lawyers and company representatives.

For interested parties, please submit the completed registration form as attached.  For more details or registration, please kindly contact Ms Irene Lam at 852 3620 3076 or email to [email protected]

Thanks for your kind attention.

Best Regards,

The Secretariat of Mainland-Hong Kong Joint Mediation Center

Tel: 852 2866 1800

Fax: 852 2866 1299

Website: http://mhjmc.org

 

WANEP builds capacity of front line Peace Actors - Ghana News Agency

Google International ADR News - Tue, 2017-07-18 13:00

Ghana News Agency

WANEP builds capacity of front line Peace Actors
Ghana News Agency
Mr. Yelyang explained that some of the front line peace actors in the NGGA peace crusade would be responsible for monitoring and reporting early warning information to WANEP-Ghana and the consortium, while some would perform Alternative Dispute ...

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