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UAE’s Federal Arbitration Law – Another Missed Opportunity?

Kluwer Arbitration Blog - Wed, 2018-07-11 03:00

Aishwarya Suresh

On May 3rd, the President of the United Arab Emirates (UAE) signed Federal Law No. 6 of 2018 (‘Law’) – the nation’s first federal arbitration legislation. According to the Federal National Council, this law has been formulated with the objective of maintaining and encouraging inflow of investments, and to comply with the UAE Vision 2021. This is the UAE’s third attempt at instituting such a law since acceding to the New York Convention in 2006 and is said to be modeled on the UNCITRAL Model Law on International Commercial Arbitration.

Unlike the previous outings in 2008 and 2013, the law repeals all the provisions of the UAE Civil Procedures Law that had so far governed arbitration in the UAE. However, one aspect of the previous arbitration regime remains, quite conspicuously, unaddressed: Art. 257 of the UAE Penal Code (‘Code’). This provision imposes criminal liability on an arbitrator deemed to have issued a decision contrary to the duty of fairness and unbiasedness. Punishment under Art. 257 is temporary imprisonment which, as per Art. 68 of the Code, can be anywhere from three to fifteen years.

The Preamble to the Law lists the Code as one of thirteen laws studied before its issuing. This may be interpreted as a reference to Art. 257 as it is the only relevant provision in the Code. Despite this, Art. 60 of the Law, while discussing the legal effect of provisions in conflict with the Law, repeals only the Civil Procedures Law.

Art. 257 – Content, Effects and Application

Art. 257, in its current form, came into effect in 2016, following Federal Law No. 7 of 2016. The pre-amendment Art. 257 imposed criminal liability on court-appointed experts and translators alone. The amendment widened Art. 257 to include arbitrators and experts appointed by judicial or administrative authorities as well as those appointed by the parties themselves.

Aside from a prohibition on undertaking similar responsibilities in the future which remains common to both versions of Art. 257, punishment under the original version was confinement for a minimum period of one year and temporary imprisonment only in criminal cases. The amended version however, directly sentences the individual to temporary imprisonment.

Under the Code, temporary imprisonment has several adverse implications. Art. 28 of the Code notes that temporary imprisonment is imposed only in felony crimes. As a more serious category of offenses, the branding of having committed a felony could have a far more deleterious effect on an arbitrator’s future appointments than a fine or disqualification. Art. 78 of the Code further provides for removal from office of a punishee who is commissioned with a public service. Art. 113 of the Code entitles the Judge to prohibit the punishee from residing in specified places for the period of imprisonment. Any of these associated effects would be especially troubling for non-resident arbitrators.

The scope of Art. 257 is also problematic. The duty of ‘fairness and unbiasedness’ is not defined under the Code or the Civil Procedures Law. Art. 257 could therefore be extended to include any type of action. For example, under Sec. 33(1)(b) of the English Arbitration Act, an unnecessarily protracted or expensive arbitration could also be interpreted as the tribunal’s failure to ensure a ‘fair’ means of resolution.

Art. 257 is also likely to create confusion in arbitration governed by other rules. For example, General Standard 4 of the IBA Guidelines on Conflicts of Interest in International Arbitration (‘Guidelines’) allows the parties to appoint an arbitrator whose impartiality is doubted if the parties agree with full knowledge of the alleged impartiality. Thus, in case of arbitrations commenced in the UAE which apply the Guidelines, the arbitrator risks punishment under Art. 257 for reasons known to the parties despite their consent at the time of appointment. Similarly, Art. 22 of the DIFC Arbitration Rules and Art. 24 of the DIAC Statute Rules require proof of intention before holding an arbitrator liable for any act or omission. This is in direct conflict with Art. 257’s blanket approach.

International Approach

Internationally, it is uncommon to subject arbitrators to criminal liability. Accordingly, there is very less commentary on the subject. Countries that currently impose penal liability include Germany (German Penal Code, Arts. 331, 332), China (Criminal Law of the People’s Republic of China, Art. 339A), Spain (Spanish Criminal Code, Arts. 419-423)  and Argentina (Argentine Penal Code, Art. 269). Switzerland (Art. 315 and 316 of the Swiss Penal Code) and Norway (Art. 114 of the Norwegian Penal Code) had similar provisions but these were repealed in 2000 and 2003 respectively.

It is crucial to note that in these countries as well, criminal sanctions apply only in specific instances such as bribery, money laundering or illegal negotiations. China is the only one of the abovementioned states to have opened up criminal liability to cases of “perversion of law and fact” and has, as can be expected, been subject to repeated condemnation as noted here.

Even in these countries, the punishment is not as severe. The maximum sentence out of these countries is in Germany: 10 years for accepting a bribe for performing an unlawful act. Most of these countries also provide differing scales of punishment depending on the gravity of the offense and, in some cases, provides the option of paying a fine in lieu of imprisonment.

Decoding the Legislative Intent

The imposition of criminal liability on an arbitrator does not find any justification under Shari’a or in the civil law countries upon whose laws UAE laws have been modelled. The Medjella, the first civil codification of Islamic Law, provides that in case of flagrant injustice or unfair hearing, the parties’ remedy is to set aside the award. Shari’a provides simply for the challenge of an arbitrator before the award is rendered. Similarly, France recognizes only civil liability. Egypt and Jordan also follow suit.

A Practical Conclusion

Since its introduction, no reported case has been brought against any arbitrator under Art. 257. Furthermore, as can be observed from here and here, the courts in UAE require a high standard of proof in case of complaints of impartiality against a judge or arbitrator. Thus far, it is safe to say, Art. 257 has therefore been of very little utility. However, it has caused significant unease in the international arbitration community leading to a reduced preference of the use of UAE law to govern arbitrations. The retention of Art. 257 would therefore significantly undermine the success of the Law and counteract the UAE’s attempts to align the nation’s arbitration law with international standards.

After weighing the pros and cons, the most reasonable conclusion is that Art. 257 must be repealed. The Law, under Art. 14, specifically provides for the challenge of an arbitrator in cases of justifiable doubts as to their impartiality or independence or qualifications rendering Art. 257 unnecessary. As the Law has already been issued, the best alternative now remains to amend the Law so as to include Art. 257 within the ambit of Art. 60 as well. Alternatively and more effectively, to repeal Art. 257, insofar as it deals with arbitrators, entirely.

Further commentary on the UAE arbitration law can be found here.

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The post UAE’s Federal Arbitration Law – Another Missed Opportunity? appeared first on Kluwer Arbitration Blog.

ADR: Incremental Reform or Radical Change?

ADR Prof Blog - Tue, 2018-07-10 11:40
Whether some problem requires radical change or incremental reform is a familiar tension in law and life. Should we abolish prisons, for example, or should we seek to improve them? Is cold-turkey best for drug addiction, or is a phased approach more effective? Does it make more sense to repeal the Second Amendment than to … Continue reading ADR: Incremental Reform or Radical Change? →

ABA Programs on Evaluation in Mediation and Relational Practice

ADR Prof Blog - Tue, 2018-07-10 11:24
The ABA Section of Dispute Resolution announced two programs that look really good.  One is a webinar, Evaluation: A Potential Tool in Your Mediation Strategy, on July 25, and the other is a Relational Practice Virtual Summit on September 4-7. Video Webinar on Evaluation in Mediation The ADR Section is trying something new – a free … Continue reading ABA Programs on Evaluation in Mediation and Relational Practice →

When there's a will there is a way: Supreme Court of NSW endorses arbitration despite deficiencies in the parties ... - JD Supra (press release)

Google International ADR News - Tue, 2018-07-10 09:02

JD Supra (press release)

When there's a will there is a way: Supreme Court of NSW endorses arbitration despite deficiencies in the parties ...
JD Supra (press release)
This decision has implications for both domestic and international arbitrations in Australia. Where the seat or place of arbitration is Australia, an arbitration triggered by an arbitration agreement can be regulated by either the uniform Commercial ...

True Diversity is Intersectional: Escaping the One-Dimensional Discourse on Arbitrator Diversity

Kluwer Arbitration Blog - Tue, 2018-07-10 02:20

Joshua Karton and Ksenia Polonskaya


ISDS tribunals have an unfortunately accurate reputation for being “male, pale, and stale”. A welcome backlash to this state of affairs has arisen, but the discourse has focused almost entirely on one aspect of diversity: gender. For example, the Equal Representation in Arbitration Pledge has garnered over 2900 signatories, who have committed to appointing more female arbitrators to arbitral panels (commercial and investor-state). Reportedly, many arbitral institutions have increased the number of female candidates they appoint to panels. These developments are all to the good, although progress has by no means been steady. When investors and co-arbitrators made appointments to ICSID tribunals, they did not appoint a single woman in 2017. International Investment Agreements (IIAs), even those negotiated recently by relatively progressive countries, such as the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), contain no provisions—not even preambulatory ones—relating to arbitrator diversity.

Still, progress is progress. The problem is that while achieving gender parity (or more!) is a laudable goal, there is much more to diversity than gender. Unfortunately, the diversity discourse in ISDS has thus far been almost totally restricted to the issue of gender, and has avoided intersections between different aspects of diversity. (The recent ITA-ASIL Annual Conference, held in Washington in April 2018, was a rare but welcome exception.) After all, female lawyers come from various backgrounds. There are Asian female lawyers, Indigenous female lawyers, black female lawyers, female lawyers from developing states, Muslim female lawyers, and so on. These overlapping characteristics generate different experiences and different struggles to find “points of entry” into the field of investment arbitration. Being an arbitrator is a position of prestige and importance; it is also well remunerated. If we as a community are to take diversity seriously, we must move beyond the kind of token diversity that sees only white women from developed Western countries added to the pool of arbitrators.

At the risk of oversimplifying, “intersectionality” refers to the overlapping effect of different aspects of diversity in a single individual. The term was coined by Kimberlé Crenshaw, an American law professor, in a 1989 paper. Crenshaw was particularly concerned about the experiences of black women in the United States, who suffer from racism and sexism and the intersection between the two, but the concept has broad relevance. Underlying it is the idea that people who belong to more than one group that suffers discrimination experience discrimination differently from those who are discriminated against only on one axis. Thus, the struggles of black women are shaped by different social dynamics than those affecting white women and those affecting black men. Accordingly, potential arbitrators with intersectional backgrounds—for instance, Asian female lawyers from developing states—can experience a distinctive mix of obstacles in seeking arbitral appointments. Intersectionality more generally refers to this way of thinking about inequality, a perspective that acknowledges and recognizes the range of experiences of those who face intersecting axes of discrimination.

A brief look at the ICSID panels formed in 2012-2017 shows very few female arbitrators with intersecting backgrounds. (Note that the prominent arbitration institutions that administer investment disputes, such as ICSID, ICC, and SCC, do not report statistics on the appointments of female arbitrators with overlapping characteristics, and do not account for double appointments; our statistics were generated by checking the biographies of appointed arbitrators one-by-one.) Over that time period, a total of 951 appointments were made in ICSID arbitrations. Only three appointed arbitrators were female, non-white, and from a developing state: Bertha Cooper-Rousseau (Bahamian), Tinuade Oyekunle (Nigerian), and Dorothy Udeme Ufot (Nigerian). Interestingly, all three were members of annulment committees and all three were appointed by ICSID. We found zero arbitrators appointed to ordinary ICSID panels, and zero arbitrators appointed by parties or by other arbitrators, who meet the gender/race/nationality overlap. There are some arbitrators who meet two of these characteristics; for example, Teresa Cheng is a female arbitrator from Hong Hong and can be identified as non-white; Marie-Andrée Ngwe is a black female arbitrator from France; Maria Stanivukovic is a female arbitrator from Serbia.

Yet, in our sample, most of the few women who are appointed to the panels are Caucasians from developed states. Indeed, the majority of all appointments of women to ICSID panels are of either Brigitte Stern or Gabrielle Kaufman-Kohler. Out of 951 appointments in our data set, only 106 (11%) were of female arbitrators, and of these Stern obtained 53 appointments and Kaufman-Kohler 15. Only 38 appointments (4% of the total) went to all other female arbitrators. (ISDS tribunals are hardly unique in suffering from a lack of diversity; non-Western female judges and arbitrators continue to be rare across all international courts and tribunals with only a few notable exceptions, such as Judge Gabrielle Kirk McDonald of the International Criminal Tribunal for the Former Yugoslavia and the Iran-US Claims Tribunal, Judges Joyce Aluoch and Olga Venecia Herrera Carbuccia of the International Criminal Court, and Judges Julia Sebutinde and Xue Hanqin of the International Court of Justice.)

The current gender-focused discourse is partly to blame for the disappointing outcomes of recent efforts to increase arbitrator diversity because it engenders complacency without tackling the most important problems. The key issue that the lens of intersectionality helps us to identify—the issue that is largely absent from recent discussions—is not whether we appoint enough women arbitrators (we don’t) but which women we appoint? In short, the concept of intersectionality gives meaning to the banal observation that diversity is not one-dimensional. People with overlapping backgrounds may experience unique obstacles that prevent them from entering the field as arbitrators, and they would also bring with them unique perspectives should they be appointed. Without representation of intersectional communities on ISDS tribunals, we cannot say that the arbitration community has made progress even on gender diversity.

Why does intersectionality matter? There are at least three reasons why improving diversity by focusing on intersectionality helps everyone, even white males. First, diverse arbitral panels are likely to produce higher quality decisions because diversity disrupts groupthink and short-circuits cognitive biases. For example, in international criminal law, two female judges, Gabrielle Kirk McDonald and Elizabeth Odio-Benito, played an instrumental role in the recognition of sexual assault as a war crime. Second, diversity is a matter of fairness, in any workplace, but especially in one as consequential as that of investor-state arbitrator. As Francoise Tulkens argues, women’s presence need not “justify” or “legitimize” anything; they must be represented on ISDS tribunals simply because there is no good reason for them not to be active decision-makers in the field. Third, diverse representation would improve legitimacy. ISDS depends on widespread political acceptance for its legitimacy, an acceptance that cannot be taken for granted in these days of resurgent populism on the left and right. ISDS can never enjoy global legitimacy unless people from around the globe can see themselves represented in the process.

Just bringing intersectionality into the discourse on arbitrator diversity would be a step forward. But we can do even more to reform the arbitrator appointment process. First, any reforms must be empirically based. Addressing both the obstacles that intersectional candidates experience in seeking arbitral appointments and the perspectives that intersectional arbitrators bring to the deliberations requires more data than we currently have. It may be useful to conduct interviews with arbitration lawyers of diverse backgrounds to identify the key obstacles they encounter in traversing the international arbitration cursus honorum. Second, on the basis of these findings, it may be valuable to consult with arbitral institutions, who will necessarily play an important role in shifting the dynamics of arbitral appointments, as they have already been a driving force in increasing appointments of women. Third, if empirical studies can identify the “points of entry” at which candidates with overlapping backgrounds face the most serious obstacles, tailored programs can be established to help intersectional candidates overcome those obstacles. Not only they, but the whole ISDS community, will benefit.

Joshua Karton is an associate professor and the Associate Dean for Graduate Studies and Research at the Queen’s University Faculty of Law, Canada. Ksenia Polonskaya is a Postdoctoral Fellow at the Centre for International Governance Innovation, Canada.

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The post True Diversity is Intersectional: Escaping the One-Dimensional Discourse on Arbitrator Diversity appeared first on Kluwer Arbitration Blog.

Court of Appeal embraces alternative dispute settlement - Daily Trust

Google International ADR News - Tue, 2018-07-10 00:11

Daily Trust

Court of Appeal embraces alternative dispute settlement
Daily Trust
Considering the high number of cases at the Court of Appeal, the benefits of Alternative Dispute Resolution (ADR) at the appellate level cannot be overemphasised. For a court where thousands of cases are filed annually, hearing through the regular ...

Lawyers Applauds VP Jalloh Statement @ SLBA AGM - Expo Times Online

Google International ADR News - Mon, 2018-07-09 18:18

Expo Times Online

Lawyers Applauds VP Jalloh Statement @ SLBA AGM
Expo Times Online
He reaffirmed the value that Alternative Dispute Resolution will add to the dispensation of justice through arbitration; adding that Lawyers have a very significant role to play in that process. He admonished the Bar to build a strategic partnership ...

The Transfer Window: Latest Partner Hires for Ashurst, White & Case, DLA and Hogan Lovells - Law.com

Google International ADR News - Mon, 2018-07-09 10:17


The Transfer Window: Latest Partner Hires for Ashurst, White & Case, DLA and Hogan Lovells
His practice covers a broad spectrum of commercial litigation, arbitration and alternative dispute resolution, in particular, in relation to corporate, capital market and commercial law disputes, as well as banking and product liability. The firm also ...

and more »

California Mediator Mark Baer Links Low Emotional Intelligence to Mass Shootings and Other Forms of Terrorism - Markets Insider

Google International ADR News - Mon, 2018-07-09 05:11

Markets Insider

California Mediator Mark Baer Links Low Emotional Intelligence to Mass Shootings and Other Forms of Terrorism
Markets Insider
Emotional self-awareness is not only one of the twelve components of emotional intelligence, but according to Daniel Goleman, the psychologist and author of international bestseller, Emotional Intelligence, it is “the foundation of emotional ...

and more »

California Mediator Mark Baer Links Low Emotional Intelligence to Mass Shootings and Other Forms of Terrorism - GlobeNewswire (press release)

Google International ADR News - Mon, 2018-07-09 05:00

GlobeNewswire (press release)

California Mediator Mark Baer Links Low Emotional Intelligence to Mass Shootings and Other Forms of Terrorism
GlobeNewswire (press release)
Emotional self-awareness is not only one of the twelve components of emotional intelligence, but according to Daniel Goleman, the psychologist and author of international bestseller, Emotional Intelligence, it is “the foundation of emotional ...

and more »

A Rollercoaster: The First Half of the Year 2018 for BITs and ISDS

Kluwer Arbitration Blog - Mon, 2018-07-09 04:04

Nikos Lavranos

The first half of the year has been a rollercoaster when it comes to BITs and ISDS, in particular in Europe. Several developments at various levels can be distinguished with one common denominator: for better or for worse, the European Union (EU) and EU law have become one of the key drivers in shaping international investment law and arbitration. Below are some selected developments.

Last March, the long-awaited Achmea judgment by the Court of Justice of the EU (CJEU) has certainly been the most discussed cause célèbre in investment law and within the arbitration community. After the Advocate General’s courageous attempt to save the ISDS clause in intra-EU BITs by a very innovative Opinion, the CJEU – following its long-standing jurisprudence – used the preliminary ruling-argument to effectively declare ISDS arbitration within the EU as being incompatible with EU law. From an EU law perspective that, in itself, is hardly surprising; however, the very short and unclear Achmea judgment has had and continues to have a significant impact on a wider scale (click here for the blogposts on Achmea).

First and foremost, the Achmea judgment signalled to the EU Member States that it is about time to sort out this issue by removing the possibility for foreign EU investors to be able to use international arbitration when – by virtue of EU law – domestic courts of the Member States are the only venue. Unsurprisingly, several Eastern and Central European Member States have used the Achmea judgment as an argument to announce or even to proceed with the termination of their intra-EU BITs (notably Poland and Romania, although Italy and Denmark had already done so previously). However, the letter of the Dutch Minister for Trade and Development to the Dutch Parliament was somewhat surprising. In her answers to the questions posed by left-wing members of the Dutch Parliament as to the consequences of the Achmea judgment, she stated that all Dutch intra-EU BITs will have to be terminated because of the Achmea judgment. In addition, she also mentioned that it would be necessary to look into the Energy Charter Treaty (ECT) as well. This wide interpretation of the Achmea judgment is arguably not supported by a close reading of it. The CJEU did not declare that intra-EU BITs must be terminated (neither was it asked to). The CJEU also did not declare that all ISDS provisions in intra-EU BITs are incompatible with EU law, but focused only on the particular one in the Netherlands-Slovak BIT, which was at issue in the case. Finally, the CJEU most certainly did not say anything regarding the ECT or intra-EU ECT ISDS disputes, which were definitely not the subject in the Achmea case. However, what is most interesting to note is how quickly and sweepingly the Netherlands changed its position from being a staunch supporter of ISDS (and, indeed, a supporter of Achmea in the setting aside proceedings before the German courts) to a supporter of the European Commission’s crusade against intra-EU BITs and intra-ECT ISDS cases. It remains to be seen whether, to what extent, how (unilaterally or mutually), and when all the 190 intra-EU BITs will be renegotiated or terminated. It is interesting to note that other important Member States such, as for example Germany or France, have apparently not yet drawn the same conclusions as the Netherlands.

The second noticeable development concerns the string of intra-EU ECT awards in the renewable energy sector against mainly Spain, Italy, and Czech Republic. While the first awards finally started to come out in 2017, the speed has picked up in 2018 with some interesting outcomes. While Spain was successful in thwarting off the first two claims against the retroactive removal of feed in tariffs, all other subsequent awards have resulted in losses for Spain and awarding claimants significant amounts of damages (EUR 128 million in Eiser, EUR 53.3 million in Novenenergia, EUR 64.5 million in Masdar). More generally, at least so far, arbitral tribunals have not been impressed by the attempts to ascribe any impact of the Achmea judgment on intra-EU ECT disputes. Indeed, the Masdar arbitral tribunal simply stated that the Achmea judgment has “no bearing on the case at hand”. Nonetheless, Spain is using the Achmea judgment in ICSID annulment proceedings and in setting aside proceedings before domestic courts to escape the payment of these awards. It remains to be seen whether, and if so, to what extent arbitral tribunals will eventually bow to the pressure and follow the CJEU. In fact, the CJEU has already been asked by the Stockholm court to give its views on this matter. So, again, the CJEU will be in a central position to make or break the future availability of the ECT for European investors against EU Member States. In parallel, it appears that also within the ECT, the EU and some EU Member States are increasing the pressure to “reform” or “re-balance” the ECT provisions. In that context, one could expect that the EU and EU Member States might issue a declaration containing a so-called “disconnection clause”, whereby the ISDS provisions would be declared inapplicable for intra-EU ECT disputes.

Speaking of reforms, another interesting development is the recently published new Dutch draft model of a BIT text, which was also opened for public consultation. As I described elsewhere in more detail, the draft text is a significant departure from the 2004 “gold standard” Dutch model BIT text by essentially taking on board many of the new “reform” elements contained in CETA. Since the Netherlands has already concluded almost 100 BITs and since the EU is mainly responsible for the negotiation of Free Trade Agreements (FTAs) – although the competence for the ISDS provisions remains with the Member States – the practical value of this draft model BIT text will probably remain limited. Nonetheless, the political signal is clear in that also the Netherlands is bowing to the pressure of the NGOs and forced to align itself with the EU’s investment policy, which has proclaimed that “ISDS is dead”.

Another reform project, which is driven by the EU and gained more international attention, is the push for a Multilateral Investment Court (MIC), which is currently debated and negotiated within UNCITRAL. The last meeting in April in New York has shown that many states are in the mood of changing the system in their favour and the MIC is one option that is considered by some to be an appropriate solution to deal with the (perceived) concerns regarding the current ISDS system and BITs generally. The next round of negotiations, which is scheduled for late October, will be an important indicator as to whether the MIC proposal will indeed gain traction among a substantial number of states.

Looking ahead into the second half of the year, the CJEU is likely to take again the center stage when it delivers its Opinion on the compatibility of the Investment Court System (ICS) that is now included in CETA, EU-Singapore FTA, EU-Vietnam FTA, and EU-Mexico FTA (a hearing report can be found here). If the Achmea judgment is of any guidance, it seems likely that the CJEU would consider the ICS to be also incompatible with EU law. This would be for the same reason, which is that the ICS also cannot request preliminary rulings from the CJEU and thus is not under its control when it comes to the potential interpretation or application of EU law – something which the CJEU finds unacceptable. If that is, indeed, the outcome, it would mean the end of the EU’s efforts in maintaining some sort of international arbitration for foreign investors in its treaties. In fact, since the CJEU’s Opinion regarding the EU-Singapore FTA in which it held that ISDS is a mixed competence, the appetite of the EU to shape or reform the ISDS proceedings is rapidly fading away. This is also reflected by the fact that most recent EU-Japan FTA already does not include an ISDS chapter and neither is such a chapter envisaged for the currently on-going FTA negotiations between the EU and Australia and New Zealand.

In conclusion, the last half year has been very dynamic, to say the least. While the destruction of international arbitration within the EU seems to linger on, outside the EU investment disputes continue to be initiated and awards are issued. Indeed, in a remarkable move against the current trend, recently Mexico signed up to the ICSID Convention, thereby confirming its consent to arbitrate disputes under the current ISDS system. However, it remains to be seen whether the new Mexican President will ensure that Mexico will ratify the ICSID Convention anytime soon. In any event, the fact remains that States are still negotiating and concluding BITs and FTAs with ISDS provisions, in particular outside the EU. So, ISDS is not dead yet but still alive and kicking, and that will be the case for at least the rest of this year.

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More from our authors: International Arbitration and the Rule of Law
by Andrea Menaker
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The post A Rollercoaster: The First Half of the Year 2018 for BITs and ISDS appeared first on Kluwer Arbitration Blog.

An Alien Perspective

ADR Prof Blog - Sun, 2018-07-08 20:56
I don’t understand people from your planet.  Many Americans and other earthlings are obsessed with superhero movies. Writer Mark Bowden recently noted that “Seven of the 11 top-grossing films of 2017 were superhero movies, based on characters first introduced in comic books.”  That doesn’t even include the gigazillion epic hero movies that are not based … Continue reading An Alien Perspective →

'Political parties should adhere to Code of Conduct' - Nehanda Radio

Google International ADR News - Sun, 2018-07-08 11:00

Nehanda Radio

'Political parties should adhere to Code of Conduct'
Nehanda Radio
We continue to provide constructive criticism to ensure that election management in Zimbabwe improves and conforms to international standards. Q. What were the implications if any of availing the ... Furthermore, there is need to strengthen Multi-Party ...

and more »

'Political parties should adhere to Code of Conduct' - DailyNews

Google International ADR News - Sun, 2018-07-08 06:48

'Political parties should adhere to Code of Conduct'
We continue to provide constructive criticism to ensure that election management in Zimbabwe improves and conforms to international standards. Q. What were the implications if any of availing the ... Furthermore, there is need to strengthen Multi-Party ...

and more »

Art-Related Disputes and ADR Methods: A Good Fit?

Kluwer Arbitration Blog - Sun, 2018-07-08 04:54

Alice Trioschi

In the past few years, the discussion and research about the use of ADR methods in art & cultural heritage has increasingly grown. This is due partially to the rise of art related claims but also to the interest scholars and practitioners are showing to alternative and consensual ways of solving a conflict. Indeed, despite there are instances in which litigation in a national court would be entirely appropriate, such as when a legal precedent is sought (for common law systems) or a party is particularly uncooperative, a lawsuit is not always the best option.

Most claimants are detained from bringing an action to court due to its high expenses, long proceedings, the worsening of relations, the uncertainty of the outcome and the possible embarrassment of an adverse ruling. In addition, lawsuits are not always available: they might be rejected because of lack of jurisdiction or because their limitation period has expired.  Furthermore, in the case of a final and binding decision upon two international parties, the winning one might need to ask the enforcement of the judgement in a foreign jurisdiction. The disadvantages the parties face when entering a lawsuit, pose the question of whether ADR methods such as mediation, arbitration and expert determination could be a better fit for art-related disputes. Which are the benefits of ADR in the art and cultural heritage sector?

Flexibility and creativity – Art-related disputes often involve sensitive non-legal issues that are relevant to the parties and are not normally addressed into court: emotional, moral, political and ethical matters. Therefore, ADR on art-conflicts could be considered a fertile ground for ‘expanding the pie’, meaning that a huge variety of interests can be taken into account to negotiate a mutual gain and a possible agreement between the actors. An example of a flexible and creative solution is the one reached in 2007 by the Tasmanian Aboriginal Centre (TAC) and the Natural History Museum (NHM) of London for the restitution of 17 human remains hold in the NHM’s collection. After 20 years from the first restitution claim, the parties reached a mediation agreement respecting both their interests: the return of the remains to the TAC, with the possibility of the NHM to control part of the material to conduct non-invasive scientific analysis.

Preservation of long-term relationships – it could be said that most of art world relationships are largely based upon trust and personal connections between the parties. When the trust is lost, the actors often embark legal proceedings where the ensuing argument is driven by feelings of betrayal.  The recent and still ongoing high-profile case of Yves Bouvier and Dmitry E. Rybolovlev is an example of this practice. In 2015 Mr. Rybolovlev commenced various trials in Singapore, Hong Kong, Paris and Monaco accusing Mr. Bouvier of having defrauded and overcharged him over $1 billion for the purchase of works of art. The Russian millionaire also accused Mr.Bouvier of selling him stolen paintings, such as Femme se Coiffant and L’Espagnole à l’Èventail by Picasso, claimed back by the artist’s daughter Jacqueline Roque. The two men had a long-term business relationship started in 2003 and ended suddenly with the legal claims. On this basis, ADR methods can help the parties to reach a concerted solution preserving the existing relationship: their agreement could include the provision of works of art in lieu of monetary damages, the shared ownership of an art piece or the use of long-term loans.

Consensus – Apart from the case in which a court mandates a specific ADR mechanism, the latter is generally consensual. The parties can use it when submitting their dispute to ADR, also through a clause previously included in their contract. This characteristic, especially in mediation, leads to a mutual solution of the dispute satisfying the parties.

Neutrality  and expertise – ADR procedures allow the actors to choose a specific arbitrator, mediator or expert coming from the art world. Similarly, they can pick a person with a certain cultural or linguistic background.  The skills and the ability of the arbitrator/mediator to see the art-dispute in its integrity are crucial to the outcome of the procedure. An example is the case faced by WIPO relating a cooperation agreement between a European gallery and e European artist for the promotion of the artist on the art market. Three years after signing the agreement, the parties entered a  dispute and deferred it to three arbitrators experienced in art law issues. As a result, the arbitral tribunal encouraged the parties to negotiate and reach a concerted agreement. Subsequently, the tribunal rendered an award including the parties’ agreement, encompassing the conclusion of the contract between them and the provision of a number of works from the artist to the gallery.

A single, quick and cheap procedure – art-related disputes are often multidimensional (including both institutional and private parties) and international. These two characteristics pose a problem of jurisdiction: judges from different countries could be involved in the same conflict. ADR methods allow the parties to choose a specific international forum, the applicable law and the language preferred, letting them save time and money. For instance, in accordance to the New York Convention2, arbitration offers the advantage of an arbitral award that can be internationally enforced without a review of the case. Similarly, under D.Lgs.28/2010, the legislation for Italian mediation regulates the parties’ possibility to reach an agreement directly enforceable on the Italian territory without further legal actions.

Confidentiality – the art market is renown to be an opaque world where the reputational factor plays a key role. The actors can be involved in court-case proceedings fostering negative publicity or further claims on the same issues. ADR mechanisms keep the dispute confidential and allow the parties to settle it in a more discrete manner, balancing their privacy with public interest requirements such as in the case of illicitly traded objects. Indeed, whatever is said in the presence of the arbitrator, mediator or expert must be kept private: if the agreement is not reached, the information disclosed during the process can’t be further used in court.


CAM’s (Milan Chamber of Arbitration) Experience

CAM established its ADR Art & Cultural Heritage (ADR Arte) project in 2015 to respond the need of a specific dispute resolution service for art-related disputes. The preferred method is mediation, intended as a process which facilitates the parties in their negotiation and in reaching a concerted solution to their conflict. The mediation process can be activated under the rules of D.Lgs.28/20103, when the parties are involved in a domestic dispute and strive for an Italian enforceable title, or through the “fast track mediation rules”. These are particularly flexible and appropriate when the dispute is multidimensional, international, foresees the necessity of art experts and lower costs.

From 2015 to 2017, ADR Arte faced 32 art- mediations. Out of these, 25% relate to leasing contracts , 22% to inheritance, 19% to property rights, 16% to the distribution of the estate, 6% to financial contracts, 3% to libel, trading contracts and residual categories. 94% of disputes were compulsory under the D.Lgs. 28/2010, while 6% were voluntary.  53% of mediations was based on a contract liability between the parties while 47% was non-contractual. 6% started because of the judge’s request, while 3% because of a contractual clause deferring the dispute to mediation. Furthermore, the value of the conflict varied greatly: ranging from those < €20.000,00 (16%), the ones between €20.001,00 – €50.000,00 (12%), those between €50.001,00 – €150.000,00 (16%), €150.001,00 – €250.000,00 (34%), the ones from €250.001,00 to €1 million (6%) and those above €1 million (16%). Finally, the results: out of all art-related mediations, the percentage of agreements reached is 28%, a higher result if compared to the one of settlements attained generally during a mediation proceeding (22.5% in 2017). Differently, when the parties decided to move forward with mediation after the first session, the percentage of reached agreements increases to 82% (a higher result than the one of classic mediation, which was of 72.5% in 2017).

In the light of these results, three main conclusions seem to arise. The first, that ADR methods could be considered a good fit for those disputes concerning an ‘artistic’ actor, object or subject. In fact, they do solve most of complex nuances of the art market, such as confidentiality, preservation of long term relationships, quick and cheap procedures through pragmatic and innovative solutions. Second, ADR methods are particularly effective on legal categories as inheritance and division of the estate. Indeed, in arbitration and mediation the sensitive non-legal matters of the parties, often connected to personal relations, are free to arise and be included in their final agreement. The third, that only 3% of CAM’s art mediations started because of a contractual clause deferring the dispute to ADR. This means there is still room for enhancing the use of ADR in art-related disputes, especially with the inclusion of multi-step clauses in the contract concluded by the parties.


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Draft Model BIT – The Netherlands

Kluwer Arbitration Blog - Sun, 2018-07-08 02:31

Nikos Lavranos

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Equality and Inclusion Revolution

Kluwer Arbitration Blog - Sat, 2018-07-07 03:01

The Alliance Council

Many people now readily recognise that there is still a gaping disconnect between the types of people now involved, at a ‘grass-roots’ level, in dispute resolution globally and those who reach the upper echelons of the industry.  Across all industries, there seems to be daily news reports emphasizing inequality and often with a focus on gender. We hear about the gender pay gap, inequality particularly amongst male dominated industries such as information technology, science and finance, and other issues such as sexual harassment which disproportionately affect women. Yet addressing the issues faced by women alone does not address the issue of diversity and inclusion as a whole. There are many more ingredients necessary for true diversity: social class, race, ethnicity, disability and regional provenance, to name but a few, which must also be taken into account. These attributes can all be barriers to entry and progression within the legal community.

On occasion, in making any selection we may miss a person’s potential, simply because of a lack of awareness of our unconscious biases. In dispute resolution (whether law firms, the Bar, counsel, judiciary or arbitral tribunals) there is an over-representation of middle aged, white (Euro-American) men. Statistics confirm the existence and extent of this imbalance: of all closed ICSID cases between January 1972 and May 2015 only 4% had been arbitrated by an entirely non Anglo-European tribunal;1)Berwin Leighton Paisner, International Arbitration Survey, „Are We Getting There? jQuery("#footnote_plugin_tooltip_7053_1").tooltip({ tip: "#footnote_plugin_tooltip_text_7053_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Africa, Asia and the Pacific represented 32.3% of the parties in ICC cases in 2013, yet less than 15% of arbitrators were from these geographical regions;2)Berwin Leighton Paisner, International Arbitration Survey, Are We Getting There?” jQuery("#footnote_plugin_tooltip_7053_2").tooltip({ tip: "#footnote_plugin_tooltip_text_7053_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); in 2015 only 2 females were listed in the Chambers & Partners “Most in Demand Arbitrators” globally, the majority of the other 33 males being white Europeans.3)Ibid jQuery("#footnote_plugin_tooltip_7053_3").tooltip({ tip: "#footnote_plugin_tooltip_text_7053_3", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });.

More recently, the 2018 International Arbitration Survey conducted by the School of International Arbitration, Queen Mary University of London, in partnership with White & Case, reported:

In particular, is there any causal relationship between diversity across a multi-member tribunal and the quality of its decision-making? The most popular answer, chosen by a quarter of respondents, was that the effect of diversity across a panel of arbitrators on the quality of that tribunal’s decision-making “depends on the particularities of the dispute in question”. 22% of respondents think that diversity brings about “some improvement in quality” while 18% take the view that diversity leads to a “significant improvement in quality”. A similar number (19%), meanwhile, deem this enquiry to be irrelevant because they consider diversity to be inherently valuable in and of itself. The views that diversity does not make an appreciable difference in quality or can even reduce the quality of the decision-making were less adhered to. It is noteworthy that no single viewpoint attracted a significant majority of supporters.

These are just but a few of those figures that should strike the reader. This is not anyone’s fault, it is a simple reflection of the world in which we all grew up. Striving for true diversity in our field means challenging every element of that group: age, race/colour, ethnicity, regional dominance and gender. There is clearly a great deal of work still to be done if there are to be any improvements. Lip service is not enough.

Knowledge of the disconnection between a diverse community and representation isn’t sufficient; what is needed is real and concrete long-lasting action. Any organisation, new or old, taking steps, bold or small, to increase diverse representation in an otherwise notoriously male-dominated profession, is to be lauded. The Alliance for Equality in Dispute Resolution was launched earlier this year to tackle, in a collaborative and inclusive manner, the lack of diversity and, therefore, equality, in the international dispute resolution community. In the past, this goal has largely been pursued by others on a piece-meal basis or by focusing on only one element of diversity. Yet, what is needed is a concerted effort to eradicate inequality and the lack of diversity. This means all of us taking a stand for equality of treatment, of opportunity and justice universally and also pushing vigorously and consistently for it. The inequality and inequity of the current position amongst the different sexes, ethnic groups and regional practitioners must be addressed.

One of the manners in which this can be achieved is by providing training in unconscious biases. Evidence suggests that this type of training reduces the impact of bias in the workplace. It provides an opportunity to understand the nature of bias that affects us all. The strategy of categorization that gives rise to unconscious bias is a normal aspect of human cognition. Understanding this important concept can help individuals approach their own biases in a more informed and open way. Sharing your biases can help others feel more secure about exploring their own biases. It is important to have these conversations in a safe space – individuals must be open to alternative perspectives and viewpoints. This means developing the vocabulary for that discussion to take place. This training facilitates discussions by promoting bias literacy utilizing the concepts and techniques which have been proven effective in minimizing bias. The Alliance’s first workshop on unconscious bias took place in early June in New York in collaboration with the CPR Institute.4)The Alliance’s Workshop jQuery("#footnote_plugin_tooltip_7053_4").tooltip({ tip: "#footnote_plugin_tooltip_text_7053_4", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

Much can be done at a personal level to enable us all to recognise, monitor, manage and reduce the impact of our personal biases. Organisations can support this in very practical ways within policies, practices and at key people decision making points. An organisation’s culture and values will necessarily evolve from those of the leadership. Individual actions need to be facilitated and authorised by a clear stance being taken on the culture of an organisation by its leaders – and carried through into systems. Role models of every kind are needed to transform workplace culture. Leaders can help by rewarding and supporting diverse role models. It is important to reward inclusive behaviour and interventions, measure and make public the effect of workplace culture initiatives, and ideas that have worked should be broadcast using data and engaging tools that tell people’s stories.

Some control can also be achieved through social norms. In those norms we need to consider accelerators and innovation. Accelerator initiatives work like hot-houses, giving underrepresented groups all the benefits men have such as mentoring, training, and inclusion in networking and communication. Innovation involves considering strategies to address unconscious bias and conventional social norms; these should be individual and institutional strategies.

Thankfully, there is also empirical evidence in the business world and also national judiciaries which shows that diversity enhances decision making and improves the ‘bottom line’. For instance, a report published by McKinsey in 2014 found a statistically significant relationship between diverse leadership and better financial performance.5)McKinsey, “Diversity Matters” jQuery("#footnote_plugin_tooltip_7053_5").tooltip({ tip: "#footnote_plugin_tooltip_text_7053_5", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); There is no reason why this should not translate into the same types of benefits of enhanced decision making in arbitration. Great work has been done in the space of gender diversity but not enough is being done in relation to ethnic, racial and regional diversity. If initiatives for gender diversity have made some inroads then there is no reason why initiatives encompassing a broader group will not do the same.

Life is full of challenges, some of which we are able to meet head on and others which largely lie hidden but show themselves in subconscious behaviour. We should not shy away from tackling both kinds, the explicit and the implicit, the conscious and unconscious, the deliberate and automatic. Ultimately, in one form or another, they all require us to challenge the status quo to be a part of bringing about the necessary change. The next generation of dispute resolution practitioners deserve to come into a workplace where the role models who came before them forged a path, and fought to change the attitudes and cultures that held them back. Those role models should comprise of not only a gender diverse group but also a racially, ethnically and regionally diverse group.

References   [ + ]

1. ↑ Berwin Leighton Paisner, International Arbitration Survey, „Are We Getting There? 2. ↑ Berwin Leighton Paisner, International Arbitration Survey, Are We Getting There?” 3. ↑ Ibid 4. ↑ The Alliance’s Workshop 5. ↑ McKinsey, “Diversity Matters” function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: International Arbitration and the Rule of Law
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Thinking About Using Mediation to Resolve Your Employment Dispute Without Going Through Litigation First? - Mediate.com

Google International ADR News - Fri, 2018-07-06 12:10

Thinking About Using Mediation to Resolve Your Employment Dispute Without Going Through Litigation First?
He is a Past President (2006-2007) and member of the Massachusetts Collaborative Law Council, the International Academy of Collaborative Professionals and the New England Association for Conflict Resolution. He writes frequently on collaborative law ...

Calif. Looks To Make Itself An Arbitral Hub With New Law - Law360

Google International ADR News - Thu, 2018-07-05 19:37

Calif. Looks To Make Itself An Arbitral Hub With New Law
Law360 (July 5, 2018, 8:22 PM EDT) -- A proposed California law allowing out-of-state and foreign attorneys to appear in international commercial arbitrations in the state was sent to the governor's desk on Thursday, and attorneys say the long-awaited ...

Our “Notions of Morality and Justice”: How “Basic” Must They Be?

Imagine with me, readers: A sovereign foreign State — India, for the sake of discussion — attracts the interest of a US enterprise to conduct a search for offshore hydrocarbon deposits and, if any are located, to determine their commercial viability. The State cedes aspects of its sovereignty contractually, in a number of ways. First, it gives the exploration outfit rights of occupancy for exploration purposes on a defined block of the State’s offshore waters. Second, it extends the period of the concessionaire’s right to be physically present on the block for an agreed period after hydrocarbon discovery in order...
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