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Spotlight On Diversity: An Engaging And Informative Panel On ADR - The Chattanoogan

Google International ADR News - Mon, 2018-04-02 10:36

The Chattanoogan

Spotlight On Diversity: An Engaging And Informative Panel On ADR
The Chattanoogan
Miller & Martin's Women's Network, along with the Atlanta International Arbitration Society Young Practitioners Group and Arbitral Women, hosted a panel discussion on March 7, 2018, entitled “Spotlight on Diversity: Professional Perspectives on ...

Expedited Arbitration at the SCC: One Year with the 2017 Rules

Kluwer Arbitration Blog - Mon, 2018-04-02 03:15

Anja Havedal Ipp

“In its origins, the concept of arbitration as a method of resolving disputes was a simple one . . . . Two traders, in dispute over the price or quality of goods delivered, would turn to a third whom they knew and trusted for his decision.” (Redfern & Hunter 2014 at 1-03)

Arbitration has strayed quite far from this rosy picture, as business transactions have grown ever more complex and globalized over the past several decades. The trend has consistently led toward longer, more complex and resource-intensive proceedings, causing some users to complain of arbitrations that are over-lawyered and overly sophisticated and neither quicker nor more efficient than proceedings in national courts.

Expedited arbitration stands in contrast to this trend; arguably, it still bears some resemblance to Redfern & Hunter’s portrayal of arbitration’s origins. In an expedited proceeding, the dispute is heard by a sole arbitrator, and the parties are allowed a limited number of submissions and shorter time frames than in a typical arbitration.

In 2017, the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) launched revised Rules for Expedited Arbitration (“Expedited Rules”), following a two-year review that took into account user feedback and the Institute’s own experience. The revision process sought to update the Expedited Rules and offer users an even more streamlined, efficient and cost-effective dispute resolution process. One year after the revised rules entered into force, the following observations can be made.

  • Front-loading the case. One significant change in the 2017 Expedited Rules was that the Request for Arbitration also constitutes the Statement of Claim, and that the respondent’s Answer also constitutes the Statement of Defence (Art 6 & 9). This “front-loading” of the case aims to save time by having the main submissions in place when the arbitrator receives the case file. The rules do not stipulate a time limit for the respondent’s Answer, but the SCC typically gives four weeks from when the respondent is served. Although some observers were nervous that this “front-loading” would create confusion among users and counsel, the new procedure has been welcomed by parties and arbitrators alike and has worked well in practice.
  • Limited submissions, short time frames. The 2017 Expedited Rules stipulate that each party may make one supplementary written submission in addition to the Request for Arbitration and the Answer (Art 30). The arbitrator may, of course, request the parties to make additional submissions if the circumstances are compelling. The rules also specify that submissions should be brief and, importantly, that the timeframe for submission must not exceed 15 working days; this time may of course be extended by the arbitrator when necessary. In the spirit of expediency, the rules also require that a case management conference be held promptly after referral, and that a timetable be set within seven days. In the SCC’s experience, arbitrators, parties and counsel generally accept and comply with these deadlines.
  • No hearings. As a main rule, an expedited arbitration should be in writing, but in practice a brief hearing is often held. In the 2017 Rules, the provision relating to hearings was revised so that a hearing is to be held only if a party so requests and if the arbitrator considers that special reasons exist (Art 33). So far, a hearing has been held in about one-third of the cases initiated under the 2017 Expedited Rules. The absence of a hearing typically contributes to a quicker resolution of the dispute. In 2017, 54 percent of awards under the expedited rules were rendered within 3 months of referral, and another 38 percent within 6 months.
  • The arbitrator’s mandate. Prior to the revision of the Expedited Rules, some arbitrators complained that the parties’ expectations of the arbitral proceedings did not match the framework of the rules. This motivated several changes in the revised rules; notably, the arbitrator was given a greater mandate to limit the proceedings and reject parties’ requests for further submissions or longer hearings. The Expedited Rules now support the arbitrator’s efficient handling of the dispute even in situations where the parties cannot agree on the procedural framework. The article regarding the conduct of the arbitration now places greater emphasis on efficiency and expediency, and instructs the arbitrator to “consider at all times the expedited nature of the proceedings” (Art 24).
  • Rules upgrade. The Expedited Rules apply only where the parties have so agreed. Most commonly, this is by stipulation in the arbitration agreement, but it also happens that the parties agree on the expedited procedure after a dispute has arisen. A new provision was introduced in the 2017 Expedited Rules whereby the SCC may invite the parties to “upgrade” to the regular Arbitration Rules (Art 11). In assessing whether a dispute is suited for expedited arbitration, it is not necessarily the value of the parties’ claims that is determinative; the question is rather if the complexity and the nature of the dispute allows for it to be decided through a limited written exchange and without extensive oral evidence.

Of the 200 new arbitrations registered by the SCC in 2017, 72 were expedited cases. This was a significant increase over previous years; typically around one-fourth of the total SCC caseload have been disputes under the Expedited Rules. In 2016, there were 55 expedited arbitrations out of 199 total.

Most of the expedited arbitrations administered by the SCC are related to commercial agreements between small and medium-sized companies in Sweden, or within the EU. These disputes often arise out of relatively limited, straightforward business transactions where there is no need for full-fledged arbitration, or where the value of the transaction makes regular arbitration cost-inefficient. Through the expedited arbitral proceeding, the parties receive a quick and just resolution to their dispute, allowing them to get back to business. Sometimes, the parties’ business relationship even survive the brief arbitral process.

In agreeing to arbitrate under the Expedited Rules, arbitration users are aware of the limited scope of the procedure; in a sense, they are agreeing to resolve their disputes in the same spirit as the merchants in Redfern & Hunter’s historical retrospect on arbitration. Perhaps this procedural simplicity is precisely what has made expedited arbitration an increasingly attractive dispute resolution method.

 

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The post Expedited Arbitration at the SCC: One Year with the 2017 Rules appeared first on Kluwer Arbitration Blog.

A Good Bad-Faith Policy?

ADR Prof Blog - Sun, 2018-04-01 21:37
“[I]f . . . I act for the Big Bad Wolf against Little Red Riding Hood and I don’t want this dispute resolved, I want to tie it up as long as I possibly can, and mandatory mediation is custom made.  I can waste more time, I can string it along, I can make sure … Continue reading A Good Bad-Faith Policy? →

Ashghal organises seminar on dispute resolution methods - Gulf Times

Google International ADR News - Sun, 2018-04-01 16:33

Ashghal organises seminar on dispute resolution methods
Gulf Times
The Public Works Authority (Ashghal) has hosted seminar in co-operation with the Qatar International Court and Dispute Resolution Centre (QICDRC) and Chartered Institute of Arbitration (CIArb). The seminar addressed alternative dispute resolution ...

Ashghal organises seminar on dispute resolution methods - Gulf Times

Google International ADR News - Sun, 2018-04-01 16:33

Ashghal organises seminar on dispute resolution methods
Gulf Times
The Public Works Authority (Ashghal) has hosted seminar in co-operation with the Qatar International Court and Dispute Resolution Centre (QICDRC) and Chartered Institute of Arbitration (CIArb). The seminar addressed alternative dispute resolution ...

Navigating Specialist Energy and Natural Resources Arbitration in East Africa

Kluwer Arbitration Blog - Sun, 2018-04-01 03:00

Wairimu Karanja

The countries of Africa are nascent economies, some with well developed, and most with burgeoning energy and natural resources (ENR) sectors. With the vast resource of wealth comes a greater expectation of economic development and a greater interest in ENR and infrastructure investment. Disputes are often inevitable, considering the vested interests involved. Navigating ENR arbitration has become increasingly important, especially for African arbitrators and arbitration practitioners.

This post will focus on ENR arbitration in the East African countries of Kenya, Tanzania and Uganda, and will discuss: an overview of ENR investment in East Africa; East Africa’s international arbitration regimes; dispute provisions in ENR agreements and laws; peculiarities ENR disputes; main causes of ENR disputes; selected ENR disputes in the region; and involvement of East African arbitrators and practitioners. The article will conclude with suggestions for arbitrators and practitioners to be better equipped to navigate specialist ENR arbitration involving East Africa.

ENR Investment in East Africa

East Africa has made major strides in national and cross-border ENR development.

In oil and gas, Uganda’s crude oil reserves stand at 3.5 billion barrels, and Kenya’s at 750 million barrels. Tanzania’s gas reserves stood at 57 Trillion Cubic Feet (TCF) in 2016.

In October 2017, the Kenya Government signed a joint development agreement (JDA) with Tullow Oil, Africa Oil and Maersk Oil for the USD 2.1 Billion, 820 Km Lamu-Lokichar Crude Oil Pipeline. Uganda and Tanzania are constructing a 1,445 Km crude oil pipeline at a cost of USD 3.5 Billion with Tullow, Africa Oil and Maersk Oil.

In mining, Tanzania’s 2015 mineral exports amounted to USD 1.37 Billion (24% of total exports). Titanium mining is dominant in Kenya. Uganda’s main minerals include cobalt and gold.

In power, all three countries are members of the 10 member Eastern African Power Pool (EAPP). The EAPP aims to increase regional power generation from 63 gigawatts (GW) in 2015, to 6,110 GW in 2025 and regional transmission by 3,000 Kms with a capacity of over 6,000 megawatts (MW).

The above, and others, will require substantial investment by large and small players.

East Africa’s International Arbitration Regimes

All countries are members of the International Centre for Settlement of Investment Disputes (ICSID) and signatories to the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards. Kenya and Uganda are members of the Permanent Court of Arbitration (PCA).

Kenya’s Arbitration Act of 1995 and Uganda’s Arbitration Act of 2000 are based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration.

Regionally, the East Africa Court of Justice (EACJ) seated in Arusha, Tanzania, has an arbitration court. Further, IGAD, in partnership with the Djibouti Chamber of Commerce, is developing the Djibouti International Arbitration Centre (DJIAC).

Nationally, Kenya has 3 international arbitration institutions: CIArb – Kenya Branch; the Nairobi Centre for International Arbitration (NCIA) and the ICC Regional Office. Uganda has the Centre for Alternative Dispute Resolution (CADR). Tanzania has the Tanzania Institute of Arbitrators (TIA).

Dispute Provisions in ENR Agreements

Kenya’s 2015 Model Production Sharing Contract (PSC) provides for arbitration under UNCITRAL Rules with ICSID as an appointing authority. Under the Kenya Mining Act 2016, dispute resolution in mineral agreements should be through international arbitration, and mineral rights disputes should undergo mediation or arbitration.

Under the Kenya Energy Act 2006, licensing disputes should undergo arbitration. The Kenya standardized power purchase agreement (PPA) for above 10 MW provides for arbitration under the Kenyan Arbitration Act or the ICC Rules.

In Tanzania, the 2013 Model production sharing agreement (PSA) provides for arbitration under ICC Rules.

In Uganda, the 1999 Model PSC provides for arbitration under the ICSID Rules. Further, Uganda’s Mining Act 2003 provides for mineral agreement disputes to undergo international arbitration, and mining rights disputes to be settled by arbitration.

Peculiarities of ENR Disputes

The sovereignty of natural resources is vested in the people and managed by governments and this is recognized under international laws such as the United Nations Convention on the Law of the Sea (UNCLOS) and under National laws. Disputes, therefore, mainly involve governments.

Due to a government being a party, one peculiarity is that national legislation may have a special government dispute procedure. For instance, in Kenya, the Government Proceedings Act has special party and notice requirements.

Investor-State disputes can be directly under investment contract (PSA, PPA, Mining Agreements) or under Bilateral Investment Treaties (BITs).

A dispute can also be state-state, such as the Kenya-Somalia maritime dispute at the International Court of Justice (ICJ) and the Tanzania-Malawi dispute over Lake Nyasa/Lake Malawi.

In ENR arbitration, amounts involved are significant, and disputes can be highly technical. Involvement of forensic experts and technical sectoral experts is common, if not a necessity.

Another peculiarity is that disputes are highly emotive and may have a political angle. Sometimes, termination is not about the facts, but about national sentiments, political opinions and election cycles.

Main issues in ENR disputes

The main ENR dispute issues are:

(a) Resource nationalism. This can be direct, for instance, after political unrest, where the government takes over projects. It can be indirect through a change in law and change in taxation regimes.

(b) Local content. The East African countries have growing local content regimes. Local content requirements may cause contract cancellation for not meeting thresholds or disputes between foreign companies and local partners.

(c) Resource price volatility in oil, gas and mining. Governments globally are known to implement production share, taxation and royalty to cover price volatility.

(d) Project delays. This leads to cancellation or contracts by governments, or delay compensation claims by investors.

Select East Africa ENR Arbitrations

At ICSID, Tanzania has had four ENR arbitrations, with one concluded and three pending. The parties include the Tanzania government, the Tanzania Electricity Supply Company (TANESCO), Independent Power Tanzania Limited (IPTL) and Standard Chartered Bank (Hong Kong) relating to PPAs.

Uganda has had three petroleum sector investment arbitrations at ICSID, with one concluded and two pending. The claimants have been Tullow Uganda and Total E&P. The Tullow Uganda cases entail petroleum agreements worth about USD 2.9 Billion.

Kenya has two pending ENR arbitrations at ICSID: a 2015 geothermal licence case by Walam Energy worth approximately USD 620 Million; and a 2015 mining case by Cortec Mining and Stirling Investment, worth about USD 2 Billion.

The ICSID cases are available on the ICSID website.

With the increased investment and recent and on-going changes in law, arbitration in East African ENR has potential to grow.

Involvement of African Arbitrators and Practitioners

Each of the ENR cases discussed had a three-member tribunal. Only two African arbitrators were appointed in two cases: David Unterhalter (South Africa) in Standard Chartered v Tanzania; and Swithin Munyantwali (Uganda) in Walam Energy v Kenya.

African counsels included private practitioners and ministry/state counsels. Generally, there is a shortage of African arbitrators, and further, a shortage of African women arbitrators. Prominent ICSID women arbitrators include: Brigitte Stern (French) – Cortec Mining v Kenya and StanChart v Tanzania; and Jean Kalicki (US) – Tullow v Uganda.

In the ICSID Panel of Arbitrators (women): Kenya has nominated Ms. Jacqueline Kamau and Ms. Njeri Kariuki; Tanzania has nominated Ms. Verdiana Nkwabi Macha; Uganda has no female nominee. It is hoped that these East African women arbitrators and more, will obtain appointments in ICSID cases.

Conclusion

The potential for international investment and commercial arbitration in the East African ENR sector is significant. How can East Africans seize the opportunities?

There should be greater exposure and recognition. Arbitrators should list themselves as energy arbitrators in institutional databases such as CIArb, ICC, LCIA, NCIA and other centres. Arbitrators and Practitioners should publicise their expertise (subject to confidentiality) and participate in arbitration conferences.

There should be an awareness of industry best practices, and country energy and mining laws, noting recent overhaul changes.

There should be an appreciation for the need for technical experts (drilling, piping, electricity charges, energy charges, taxation) and forensic experts in calculating quantum.

Very importantly, one needs to be aware of local realities, but be objective and steer clear of political issues.

Finally, keep learning. National centres like CIArb-Kenya, CADR in Uganda and TIA in Tanzania can offer courses on ENR arbitration. Other organisations include the International Law Institute-Africa Centre for Legal Excellence (ILI-ACLE) in Uganda and the London Centre for International Law Practice (LCILP) – Centre for Energy and Natural Resource Law.

Opportunities abound for East African arbitrators and arbitration practitioners in ENR arbitration. With targeted efforts, regional practitioners can more strategically compete in the global arbitration market.

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The post Navigating Specialist Energy and Natural Resources Arbitration in East Africa appeared first on Kluwer Arbitration Blog.

Lack of Judges Leads to Longer Litigation Times - JD Supra (press release)

Google International ADR News - Sat, 2018-03-31 22:56

JD Supra (press release)

Lack of Judges Leads to Longer Litigation Times
JD Supra (press release)
In addition, even if a lawsuit is brought in state court, the defendant could remove it to federal court in some instances. Businesses also may want to consider other options for resolving disputes, such as mediation or arbitration. These alternative ...

Lack of Judges Leads to Longer Litigation Times - JD Supra (press release)

Google International ADR News - Sat, 2018-03-31 22:56

JD Supra (press release)

Lack of Judges Leads to Longer Litigation Times
JD Supra (press release)
In addition, even if a lawsuit is brought in state court, the defendant could remove it to federal court in some instances. Businesses also may want to consider other options for resolving disputes, such as mediation or arbitration. These alternative ...

Complaint channels for insurance policyholders - International Law Office

Google International ADR News - Sat, 2018-03-31 10:45

Complaint channels for insurance policyholders
International Law Office
... there are various channels for making a complaint. For instance, if a policyholder's claim is unfairly denied, he or she could make a complaint to the Insurance Claims Complaints Bureau. On January 16 2018 the Insurance Claims Complaints Bureau was ...

Simon Walker CBE Appointed Independent Chair Of UK SME Complaints And Resolution Review - Global Banking And Finance Review (press release)

Google International ADR News - Sat, 2018-03-31 07:33

Global Banking And Finance Review (press release)

Simon Walker CBE Appointed Independent Chair Of UK SME Complaints And Resolution Review
Global Banking And Finance Review (press release)
Simon Walker CBE – the former Director General of the Institute of Directors – has been appointed as independent chair of the finance and banking industry's review into the complaints and alternative dispute resolution (ADR) landscape for the UK's SME ...

Can alternative dispute resolution tools reduce Middle East construction conflicts? - Construction Week Online

Google International ADR News - Sat, 2018-03-31 04:07

Construction Week Online

Can alternative dispute resolution tools reduce Middle East construction conflicts?
Construction Week Online
... and improvements to alternative dispute resolution (ADR) mechanisms have received backing from a number of legal professionals, as well. But to understand why ADR has become an important topic, it is necessary to first understand why so many ...

and more »

Les Jeux Sont Faits: Swiss Supreme Court Upholds Investment Treaty Award against Public Policy Challenge in a Gambling Case

Kluwer Arbitration Blog - Sat, 2018-03-31 01:05

Georg von Segesser

The Swiss Federal Supreme Court, in a rare appeal against an award in a bilateral investment treaty arbitration, confirmed its statutory restraint in reviewing arbitral awards pursuant to article 190 of the Private International Law Act (“PILA”) and rejected the host state’s request to set aside the award for violating substantive public policy. (Case 4A_157/2017, 14 December 2017)

Facts of the Case

Following the development of a market economy in the 1980s, State X undertook different measures to regulate gambling, including low-stakes gambling with slot machines. The relevant regulation was strengthened over the years, with concurrent increases in taxation. In 2009, following a scandal involving members of X’s government, the regulations were again increased. With this change, all new slot machines were prohibited, with existing slot machines being allowed to remain in operation until the expiration date of their current authorization. This change too was accompanied by an increase in the taxation of slot machines.

Since 2004, three companies organized according to the laws of the State Y (which had entered into a bilateral investment treaty (“BIT”) with State X) were active in X through participations in local companies operating slot machine. While these companies continued to operate their existing slot machines, the increased regulatory and fiscal burden led them to retire most machines and abandon the market entirely in 2015.

In 2014, A, B and C (the State Y companies), after failed conciliation attempts, submitted a request for arbitration against X. They claimed damages, arguing that they were victims of a violation of the fair and equitable treatment (“FET”) clause in the BIT between X and Y.

A three-member arbitral tribunal was constituted with seat in Geneva, which handed down its final award on 16 February 2017. The arbitral tribunal found that X had violated the BIT’s FET clause and ordered it to pay 37M zlotys, with interest. While the Arbitral Tribunal did not find that the companies had been victims of unlawful expropriation, it held that the strong increase in taxation constituted a violation of the FET standard, which warranted the payment of damages to the Claimants.

State X appealed to the Swiss Federal Supreme Court (“FSC”) for the decision to be set aside.

The Supreme Court’s Decision

In line with its constant practice, the FSC based its assessment on the facts of the case as determined by the arbitral tribunal. It reiterated its position that it could not correct or complete the facts on its own initiative even if they were manifestly incorrect or had been determined in a manner that was incompatible with the law; the sole exception being the grounds for review explicitly and exhaustively enumerated in article 190 (2) PILA.

With regard to the violation of the substantive ordre public (public policy), the Supreme Court went on to elaborate that such a violation could only be found under a very restrictive set of circumstances. Specifically, such a violation could only be seen in a decision that failed to consider fundamental legal principles and, in doing so, became irreconcilable with the essential and generally accepted system of values, which – from the point of view predominant in Switzerland – should underlie any legal system. Such principles are, inter alia, the principle pacta sunt servanda, the duty to act in good faith, the prohibition of abuse of law, the prohibition of expropriation without compensation, the prohibition of discrimination and the protection of minors and vulnerable adults. Moreover, a violation of the substantial ordre public could only be found in a decision whose outcome (rather than just its reasoning) was incompatible with the aforementioned ordre public.

In the present case, the appellant argued that the decision violated the substantial ordre public on three different counts, namely by restricting X’s fiscal sovereignty, by disregarding that it acted in the public interest of fighting the dangers of gambling, and by failing to sanction X’s reasoned approach in regulating low-stakes gambling.

In rejecting the appeal, the SFC recalled that its power to review decisions under appeal depended on the arguments invoked against the appealed decision. It then went on to clarify that this differentiated approach was the same whether the appealed decision was rendered in an investment treaty arbitration against a host state or any other type of international arbitration.

It further recalled that, in reviewing jurisdictional decisions pursuant to article 190 (2) (b) PILA, it examined questions of law freely, including any preliminary questions that were determining for jurisdiction. By contrast, when called to examine a violation of the substantial ordre public under article 190 (2) (e) PILA, its review was strictly limited and, consequently, it could not review an erroneous interpretation of a clause in the BIT, even to the point of such interpretation being arbitrary, if it did not fulfill the conditions of article 190 (2) (e) PILA as established in its long-standing jurisprudence.

The FSC ultimately refused to examine whether the arbitral tribunal was right to find that the substantial increase in taxation of the slot machines violated the FET clause under the BIT. It justified its refusal by pointing out that the appellant failed to substantiate how the Arbitral Tribunal’s findings violated the substantial ordre public as defined in the context of a Supreme Court review of an international arbitral award according to PILA 190 (2) (e). Instead of referring to the relevant notion of ordre public, the appellant had referred to a different, vastly more expansive notion, namely a textbook definition of ordre public as the “sum of all legal rules issued in the interest of the community”. As a result, the Supreme Court could not examine how the appellant’s criticism of the appealed decision constituted a violation of the substantial ordre public. Consequently, the appeal was rejected.

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The post Les Jeux Sont Faits: Swiss Supreme Court Upholds Investment Treaty Award against Public Policy Challenge in a Gambling Case appeared first on Kluwer Arbitration Blog.

ADC Mohammed Lawal Abubakar at 45 - Blueprint newspapers Limited (blog)

Google International ADR News - Fri, 2018-03-30 09:34

Blueprint newspapers Limited (blog)

ADC Mohammed Lawal Abubakar at 45
Blueprint newspapers Limited (blog)
Others courses include; Junior Division Course (Army), Military Police Officers' Advanced Course, Senior Course (32) Army, Joint Military Adviser/Attachee Course and Alternative Dispute Resolution Course at Dubai (United Arab Emirate). Colonel ML ...

Changes at PON

ADR Prof Blog - Fri, 2018-03-30 05:36
Earlier this month, it was announced that Guhan Subramanian will succeed Bob Mnookin as chair of the Program on Negotiation at Harvard Law School. This is excellent news. More here, including these words from HLS Dean Manning: “Harvard Law School and the entire negotiation community are fortunate indeed to see this torch passed from one … Continue reading Changes at PON →

New OHADA Arbitration Text Enters Into Force

Kluwer Arbitration Blog - Fri, 2018-03-30 02:16

Roland Ziadé and Clément Fouchard

Linklaters

The revised OHADA Uniform Act on Arbitration (the Arbitration Act) and revised Rules on Arbitration of the Joint Court of Justice and Arbitration (the CCJA) (the Rules), as well as the new Uniform Act on Mediation, entered into force on 15 March 2018. The fruit of nearly two years of consultations among the 17 Member States of the Organisation for the Harmonization of Corporate Law in Africa (OHADA), these new acts will apply to all proceedings initiated as of such effective date. These acts had all been approved on 23 November 2017 by the OHADA Council of Ministers.

The revised Arbitration Act and the Rules, which replace previous versions dated 1999 and 1996 respectively, are in line with the rules and regulations of key arbitration-friendly jurisdictions and leading arbitral institutions. The most significant changes include: (i) provisions for arbitration arising under investment treaties or investment laws; (ii) the binding effect of multi-tiered dispute resolution clauses requiring the parties to undertake negotiation, mediation and/or conciliation prior to commencing arbitration; (iii) various measures to improve the efficiency of the proceedings, including permitting the parties to agree to the waiver of setting aside proceedings and very tight time limits to rule on requests for recognition and enforcement of arbitral awards and on requests for setting aside of awards; and (iv) measures to increase transparency in arbitration, notably by allowing the publication of excerpts of arbitral awards.

While all these new acts are without doubt a positive step towards offering investors a predictable and efficient arbitration framework within the OHADA region, it remains to be seen whether, in practice, the local state courts and the CCJA will succeed in implementing the new rules.

Modernisation of the OHADA arbitration mechanisms

Arbitration of investment disputes.
Both the Arbitration Act and the Rules recognise the importance of offering users a reliable framework to resolve their investment disputes in the region. They now expressly allow foreign investors to start an arbitration based on any instrument related to the protection of investments, including bilateral investment treaties and local investment laws.(Art. 3 of the Arbitration Act and Art. 2.1, Art. 5.1(b) of the Rules) To ensure consistency in the investors’ access to arbitration, the Arbitration Act further confirms the ability of public entities to consent to arbitration.(Art. 2 of the Arbitration Act)

Powers of the arbitral tribunal reflecting modern arbitration practices

Pre-arbitration dispute resolution. In an effort to conform with the present-day practice in relation to multi-tiered dispute resolution clauses, the Arbitration Act and the Rules give the arbitrators the power to suspend the proceedings and instruct the parties to fulfil any preliminary steps (such as mediation, negotiation or conciliation) called for in the dispute resolution clause of their agreement, at the request of a party.(Art. 8-1 of the Arbitration Act and Art. 21-1 of the Rules)

Complex arbitrations. In response to the increasing use of arbitration to resolve disputes arising out of multiparty and multi-contract business transactions, the Rules now address the issue of arbitration with multiple parties and parallel arbitration proceedings. Articles 8.1 and 8.2, which are entirely new, offer the possibility, subject to the various conditions set forth therein, of joinder of additional parties.(Art. 8.1 and 8.2) Other new provisions of the Rules allow the arbitral tribunal to consolidate several related proceedings initiated under separate arbitration agreements (Art. 8.4) and/or involving the same parties.(Art. 8.3)

More efficiency and increased transparency

Parties’ duty of loyalty and efficiency. The revised Arbitration Act expressly provides that arbitration proceedings should be conducted diligently and that the parties should not use dilatory tactics.(Art. 14 of the Arbitration Act) Under the Rules, a party which fails to immediately raise an irregularity is precluded from raising it at a later stage of the proceedings.(Art. 16 of the Rules)

Duty and standard of impartiality and independence. Although arbitrators acting under the previous Arbitration Act were already subject to the duty of impartiality and independence, the revised Arbitration Act clearly states their duty—throughout the pendency of the proceedings—to inform the parties (Art. 7 of the Arbitration Act) and the Secretary General of the CCJA (Art. 4.1 of the Rules) of any circumstances likely to give rise to any doubts affecting their impartiality and independence. Article 8 of the Arbitration Act, which details the procedure for challenging an arbitrator in OHADA arbitration, now imposes a time limit for bringing a challenge, namely a period “not exceeding 30 days from the discovery of the fact which gave rise to the challenge”. (Art. 8 of the Arbitration Act) The lack of any such time limit in the previous version of the Arbitration Act allowed parties to raise challenges at times that might strategically disrupt the smooth running of the arbitration. As an additional safeguard against undue delay in respect of challenges to arbitrators, the revised Arbitration Act provides that if the competent state court before which the challenge has been brought does not issue a decision on the challenge within 30 days, the challenge may be brought before the CCJA. (Art. 8 of the Arbitration Act) The parties thus have in principle the possibility of receiving a decision on the challenge that would not be unduly delayed by the case load of the relevant state court, provided that the CCJA is able to render such a decision in a reasonable period of time.

Constitution of the arbitral tribunal. The Arbitration Act regulates the constitution of the arbitral tribunal, which is composed of a sole arbitrator absent an agreement between the parties. (Art. 5 of the Arbitration Act) Whereas the previous version of the Rules gave little guidance as to how the CCJA selected arbitrators in the absence of party agreement on a method of appointment, the revised Rules adopt the list procedure for such arbitrator appointment. Under such procedure, the CCJA will send the parties the same list of at least three names, the parties will then have the opportunity to strike unsuitable candidates and rank the remaining names in their order of preference, and the CCJA will then appoint the tribunal based on the final list.(Art. 3.3 of the Rules) The revised Rules also add the availability of the potential arbitrator to the criteria to be taken into account when making the appointment.

Prompt recognition of arbitral awards.
The revised Arbitration Act imposes strict time-limits on state courts to decide on recognition and enforcement of arbitral awards. Competent state courts must rule on a request for recognition “within a period that may not exceed fifteen days from its referral”.(Art. 31 of the Arbitration Act) This period is very short in comparison to the several months that have often been necessary to render such decisions in many OHADA jurisdictions. If the state court fails to issue its decision (granting or rejecting recognition) within the 15-day time limit, the revised Arbitration Act specifies that the award will be deemed to be recognised by the state court, which is a rather radical remedy.(Art. 31 of the Arbitration Act) In terms of enforcement, under the revised Rules, the CCJA must rule on a request for enforcement within a 15-day time limit.(Art. 30.2 of the Rules) Finally, the CCJA has only 3 days to decide on any provisional or protective measures in the context of enforcement proceedings.(Art. 30.2 of the Rules) The foregoing features will undoubtedly be welcomed by the international business community, which is eager to obtain effective court decisions on recognition and enforcement quickly within the OHADA region.

Waiver of setting aside proceedings. Following the 2011 Decree which reformed French arbitration law and reforms in several other jurisdictions (Switzerland, Belgium, Sweden, etc.), the new Arbitration Act provides that parties may agree in their arbitration clause or otherwise to waive their right to challenge the arbitral award before the competent state courts (Art. 25 of the Arbitration Act) and the CCJA (Art. 29.2 of the Rules), as long as such a waiver is not contrary to international public policy.

Challenge of arbitral awards before the CCJA in case of delay in state proceedings. Under the revised Arbitration Act, competent state courts must rule on annulment requests within three months of the date of receipt of the application. This new time limit seems extremely ambitious. By way of comparison, setting aside proceedings before the Paris Court of Appeal take on average between 12-18 months. If the state court does not decide the annulment request within the three-month time limit, the challenge to the award may be brought before the CCJA, which, in turn, is supposed to render its decision within six months thereafter.(Art. 27 of the Arbitration Act) Another new feature is that when the CCJA steps in to hear an application to set aside an award in replacement of a state court, the procedure will be an accelerated version of the regular procedure of the CCJA.(Art. 27 of the Arbitration Act) Nevertheless, a six-month time limit will most likely be a challenge for the CCJA, which has tended in the past to take one or two years to render its decisions. Moreover, since there is no sanction for the CCJA’s failure to meet the six-month deadline, it is highly likely that the ambitious targets set in the Arbitration Act will not be met in practice.

As a preliminary conclusion, the revised Arbitration Act and Rules are in line with the modern rules and regulations of key arbitration-friendly jurisdictions and leading arbitral institutions providing a flexible and efficient dispute resolution mechanism. The revision is without doubt a positive step towards offering investors a predictable and efficient arbitration framework within the OHADA region. It nevertheless remains to be seen how, in practice, the local state courts and the CCJA will interpret the new rules and succeed in implementing them.

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The post New OHADA Arbitration Text Enters Into Force appeared first on Kluwer Arbitration Blog.

New leadership as Eversheds eyes Africa's growing legal sector rewards - African Law & Business (ALB)

Google International ADR News - Thu, 2018-03-29 12:26

New leadership as Eversheds eyes Africa's growing legal sector rewards
African Law & Business (ALB)
Capitalising on the potential for greater corporate and disputes work in the energy and infrastructure sectors is at the forefront of Eversheds Sutherland's plans as it appoints a new joint leader for its Africa group. International law firm Eversheds ...

International Arbitration & ADR Update - Lexology

Google International ADR News - Thu, 2018-03-29 08:52

International Arbitration & ADR Update
Lexology
... awareness of this form of alternative dispute resolution process amongst Japanese corporates. While court-directed conciliation for domestic matters is widely used in Japan, mediation remains little used – despite its undoubted advantages in a ...

and more »

Qatar- Call for alternate resolutions in construction projects - MENAFN.COM

Google International ADR News - Thu, 2018-03-29 02:59

Qatar- Call for alternate resolutions in construction projects
MENAFN.COM
DOHA: The Public Works Authority (Ashghal) hosted a joint seminar at its premises in cooperation with the Qatar International Court and Dispute Resolution Center (QICDRC) and Chartered Institute of Arbitration (CIArb) in the area of alternative dispute ...

and more »

Is Online Dispute Resolution The Future of Alternative Dispute Resolution?

Kluwer Arbitration Blog - Thu, 2018-03-29 02:50

Derric Yeoh

YSIAC

The tech revolution has been underway for some time now but has only recently come to the forefront of the general public’s consciousness from the explosion in attention to bitcoin. The progress of technology has allowed it to creep into the domain of alternative dispute resolution. There is now online mediation, online arbitration, and even arbitration utilising the same blockchain technology as cryptocurrencies: blockchain arbitration. These forms of alternative dispute resolution, known as “online dispute resolution”, are increasingly making their presence felt.

Online mediation

An online mediation is usually commenced when an email is sent to the parties informing them of the basic information of the online mediation. Meetings are then conducted virtually in “chat rooms” where the mediator can communicate separately with each party or simultaneously with both parties. There is usually one chat room for joint sessions, one for caucuses or “breakout rooms”, and another for filing and storing documents. This can also be conducted through emails.

Asynchronous online mediation has been shown to be the most popular form of online mediation as it allows parties flexibility and faster resolution of the matter compared to offline mediation, which may see a mediation be put off to a distant date because of the parties’ conflicting schedules. It would also allow parties time to fashion their response, as one’s immediate response at a mediation is not always one’s best response. Other benefits include savings in cost, time and convenience. For example, just last month, the Singapore State Courts’ Community Justice and Tribunals System launched its “e-Mediation” to help those with neighbourly disputes save time and money as they no longer need to go to the courts to file their documents.

However, the downside to online mediation is that it dilutes some of the key features of mediation, which is the human relational aspect of mediation. Online mediation may not effectively capture the various needs, interests, motivations and emotions of the parties involved. The use of emails to convey messages instead of face to face dialogue may also embolden parties to make inflammatory comments which may not occur if they were in the same room with a mediator (a phenomenon that one can easily observe from social media). The effectiveness of communication at the mediation is also highly dependent on the parties’ literary skills in expressing themselves over email. The largely asynchronous nature of online mediation may also be detrimental to the mediation process, as it breaks the momentum that a long and uninterrupted mediation session can bring.

Online arbitration

Online arbitration can be defined as an arbitration in which all aspects of the proceedings are conducted online. Online arbitrations can have hearings through the use of video conferencing, but most online arbitrations simply require parties to upload their evidential documents, respond to questions from the arbitrator and they will receive a decision from the arbitrator. Online arbitration shares many similar advantages as online mediation, such as lower costs and greater flexibility due to their asynchronous nature. The disadvantage of online arbitration not having face-to-face interactions is also less significant as arbitrations rely less on the parties’ interactions but more on evidentiary written submissions.

Online arbitrations are widely used for internet domain name disputes and these can be legally binding or non-binding in nature. Internet domain name disputes are usually governed by the Internet Corporation for Assigned Names and Numbers’ (“ICANN”) Uniform Domain Name Dispute Resolution Policy (“UDRP”). The World Intellectual Property Organization (“WIPO”) is one of the UDRP dispute resolution service providers administering the UDRP Administrative Procedure for domain name disputes and is responsible for appointing panellists to determine the dispute. The decisions made under the UDRP Administrative Procedure are non-binding but they are nevertheless highly effective. This is because while these decisions are not binding on parties, it is binding on the domain name provider, who will then effect the changes as determined by the panellists. While the parties have recourse to litigation if they are unsatisfied with the decision, this is rarely done as the expensive and time-consuming cross-border litigation is unlikely to be justified by the value of the domain name.

Online arbitrations over domain name disputes can also be legally binding. The HKIAC administered Hong Kong Domain Name Dispute Resolution Policy (“HKDRP”) takes a more direct approach in effecting the panel’s decision. Article 4 of the HKDRP states that the parties are required to submit to a mandatory arbitration proceeding which is governed by the Hong Kong Arbitration Ordinance. The award rendered is therefore not subject to appeal in any court and is considered as an arbitration award rendered in Hong Kong for the purpose of enforcement under the New York Convention.

Online arbitration is also used in business to consumer disputes. However it is generally unpopular not because it is a poor medium for dispute resolution, but because consumers view such arbitration agreements as denying them access to justice through the courts and in particular, to class action suits which would offer more compensation.

Smart contracts and blockchain arbitration

All of the aforementioned forms of online dispute resolution have been around for some time, but there is a new form of online dispute resolution which is currently being developed: blockchain arbitration. Blockchain arbitration has been developed as the dispute resolution mechanism of choice for disputes arising from smart contracts. Some knowledge of blockchain technology and smart contracts is required to understand blockchain arbitration.

The blockchain is essentially an incorruptible digital ledger of transactions that can be programmed to record not only financial transactions, but almost anything that is of value for record. While originally devised for cryptocurrencies, there are many potential uses for the technology. The blockchain database is not stored in any single location but is instead spread across many times over a network of millions of computers simultaneously. The blockchain ledger containing the information has been touted to be incorruptible, because to alter any information on it would require the hacker to have the processing capability to overpower the entire network of millions of computers.

What has arisen from blockchain technology are smart contracts. Unlike regular contracts, smart contracts are not written in natural languages such as English or French, but entirely in code. Another point of difference is that, like a program, smart contracts automatically execute or enforce obligations. For example, in a simple contract to sell an item, the smart contract could be coded in such a way that once payment is received, it would automatically transfer the ownership of the item to the buyer.

Blockchain arbitration has in turn been developed in order to service the dispute resolution needs that may ensue from smart contracts. It is unlikely in the previous scenario of a simple buy and sell smart contract that any disputes would occur. However, disputes can come about from more complex contracts which may involve some element of misunderstanding in the transaction. This is where blockchain arbitration comes in. There are currently several models of blockchain arbitration being developed, such as CodeLegit and Kleros. CodeLegit has even drafted a set of Blockchain Arbitration Rules and envisions an Appointing Authority (it is unclear whether it will be an arbitral institution) which will appoint an arbitrator who may be a jurist or a blockchain technician. Communication would be done by email and there might even be an oral hearing over video conference should the arbitrator call for it. This is in essence quite similar to online arbitration.

Kleros on the other hand represents a different system of blockchain arbitration, in which the developers appear to be creating an entire quasi-judicial system, with a general court, followed by two tiers of sub-court divisions e.g. transport division and then air transport division. A rather complex process then occurs where “jurors” who volunteer at these Kleros court divisions would be selected by random number generation. It has also worked into place an appeal system and even bribe resistance system for the jurors.

All of these are fascinating developments in the virtual world, but what does this mean for arbitration practitioners? Despite several tech enthusiasts’ claim that blockchain arbitration is the future of dispute resolution, there are still several fundamental issues preventing blockchain arbitration from replacing traditional arbitration.

First, as a smart contract is entirely in code, some national legislations may not recognise it as a valid contract because it does not fulfil formality requirements. There may also be discrepancies when translating complex contracts into smart contract codes.

Secondly, while smart contract disputes will benefit from arbitration because of its flexibility and its relative ease in cross-border enforcement of awards, there are some difficulties with the arbitral clause in smart contracts. It is not clear whether the smart contract containing the arbitral clause (which is in code) will fulfil the requirement set out in Article 2 paragraph 2 of the New York Convention which requires that the arbitral clause be in writing. However, this problem can be overcome by interpreting Article 2 paragraph 2 according to the doctrine of functional equivalence as stated at paragraph 16 of the UNCITRAL Model Law on Electronic Commerce 1996. Such an interpretation is supported by part two of the New York Convention, which contains UNCITRAL’s recommendation to interpret the “in writing” requirement non-exhaustively. Smart contracts can also be tethered to a written agreement setting out the seat of arbitration, governing law and arbitral rules, which would ensure that the “in writing” requirement is complied with. This would also remove any uncertainties about choice of law or the lex arbitri in the blockchain arbitration.

A problem specific to Kleros-type blockchain arbitration is that it only allows its “jurors” to make a decision based on the transaction evidence on the blockchain, and not hear any arguments from the disputing parties. The resulting arbitral award may be refused recognition and enforcement under Article V(1)(b) of the New York Convention for not giving the party the opportunity to present its case. It may require a significant revamp in Kleros’ blockchain arbitration model in order to adapt it to the New York Convention.

Technology for Lawyers: Beware The Ides of March?

Complex and high value disputes will remain the province of traditional alternative dispute resolution. However, with traditional arbitration increasingly incorporating modern technology into its proceedings, the distinction between online arbitration and traditional arbitration is becoming less clear. What cannot be denied is that with improved technology and automation, less complex disputes work will be claimed by online dispute resolution services. It is therefore imperative that lawyers continue to improve themselves and keep abreast of the latest legal and technological developments to avoid falling by the way side in the wake of technology’s relentless march.

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The post Is Online Dispute Resolution The Future of Alternative Dispute Resolution? appeared first on Kluwer Arbitration Blog.

Stone Soup:  It’s a Great Idea But . . .

ADR Prof Blog - Wed, 2018-03-28 20:47
We all know about situations when people say that they really like the idea of ADR, but it’s not appropriate in their particular case.  Sometimes there are very good reasons not to use an ADR process.  Other times, not so much. There may be similarities in some people’s reaction to the idea of using a … Continue reading Stone Soup:  It’s a Great Idea But . . . →
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