Feed aggregator

Post-acquisition dispute resolution challenges - Financier Worldwide

Google International ADR News - Wed, 2018-08-22 03:59

Financier Worldwide

Post-acquisition dispute resolution challenges
Financier Worldwide
The courts are usually the default form of dispute resolution for domestic acquisitions, but arbitration is common for international acquisitions.” Arbitration and other forms of alternative dispute resolution (ADR) are appearing more frequently in SPAs.

ICC commission targets African arbitration growth - African Law & Business (ALB)

Google International ADR News - Wed, 2018-08-22 03:44

ICC commission targets African arbitration growth
African Law & Business (ALB)
One of the world's leading arbitration institutions has created a commission to help it expand its market on the continent. The ICC International Court of Arbitration (ICC) will launch an Africa Commission to co-ordinate its growth and activity in ...

and more »

Fitzpatrick, Cella, Harper & Scinto to Join Venable - Global Banking And Finance Review (press release)

Google International ADR News - Wed, 2018-08-22 02:06

Global Banking And Finance Review (press release)

Fitzpatrick, Cella, Harper & Scinto to Join Venable
Global Banking And Finance Review (press release)
... litigation, appeals, post-grant patent challenges (e.g., IPRs), alternative dispute resolution, licensing, opinions, corporate transactions and due diligence. Fitzpatrick represents an international client base from Fortune 500 companies to start ...

Call for Proposals – ABA DR Conference

ADR Prof Blog - Tue, 2018-08-21 18:28
From FOI Rishi Batra: A quick reminder from the Legal Education in Dispute Resolution Committee of the ABA Section of Dispute Resolution that Program Proposals for the Spring Conference (April 10-13, 2019, at the Hyatt Regency Hotel in Minneapolis, MN) are due by August 31, 2018. This includes proposals for the Legal Educators Colloquium (LEC) … Continue reading Call for Proposals – ABA DR Conference →

Fitzpatrick, Cella, Harper & Scinto to Join Venable | Markets Insider - Markets Insider

Google International ADR News - Tue, 2018-08-21 15:27

Fitzpatrick, Cella, Harper & Scinto to Join Venable | Markets Insider
Markets Insider
NEW YORK and WASHINGTON, Aug. 21, 2018 /PRNewswire/ -- Venable LLP, an American Lawyer Global 100 firm, and Fitzpatrick, Cella, Harper & Scinto, one ...

and more »

Fitzpatrick, Cella, Harper & Scinto to Join Venable - PR Newswire (press release)

Google International ADR News - Tue, 2018-08-21 15:10

Fitzpatrick, Cella, Harper & Scinto to Join Venable
PR Newswire (press release)
... property law firm with offices in New York, California and Washington, D.C. It has one of the premier patent litigation and prosecution practices, which covers the spectrum of intellectual property services, including applying for patent and ...

and more »

Fitzpatrick, Cella, Harper & Scinto to Join Venable - Benzinga

Google International ADR News - Tue, 2018-08-21 15:01

Fitzpatrick, Cella, Harper & Scinto to Join Venable
Benzinga
... property law firm with offices in New York, California and Washington, D.C. It has one of the premier patent litigation and prosecution practices, which covers the spectrum of intellectual property services, including applying for patent and ...

and more »

Umbrella of Immunity for Arbitrators: Where Virginia is Now and Where It Needs to Be. - Lexology

Google International ADR News - Tue, 2018-08-21 12:48

Umbrella of Immunity for Arbitrators: Where Virginia is Now and Where It Needs to Be.
Lexology
[4] The American Arbitration Association (“AAA”), a professional organization governing alternative dispute resolution, publishes rules for six different areas of arbitration. All six contain the following wording: “Neither the AAA nor any arbitrator ...

Experts Available to Comment on EPA Changes to Clean Air Rules - Newswise (press release)

Google International ADR News - Tue, 2018-08-21 12:38

Experts Available to Comment on EPA Changes to Clean Air Rules
Newswise (press release)
Subject expertise: Environmental law, domestic and international environmental policy, ethics and the public official, mediation and alternative dispute resolution, law and public policy. Phone: (812) 855-0732. Email: [email protected] To speak with A.

Experts Available to Comment on EPA Changes to Clean Air Rules - Newswise (press release)

Google International ADR News - Tue, 2018-08-21 12:38

Experts Available to Comment on EPA Changes to Clean Air Rules
Newswise (press release)
Subject expertise: Environmental law, domestic and international environmental policy, ethics and the public official, mediation and alternative dispute resolution, law and public policy. Phone: (812) 855-0732. Email: [email protected] To speak with A.

Lack of Arbitrators’ Power to Decide on the Validity of an Arbitral Submission – The Case of Ethiopia

Kluwer Arbitration Blog - Tue, 2018-08-21 04:00

Gelila Haile

Arbitration is one of the preferred modes of private dispute settlement. Off its several traits, the cornerstone is the fact that it is based primarily on party autonomy and enables the parties to control almost all aspect of it. On the other hand, States put in place a different review and/or control mechanism on the conduct and process of arbitration for different policy considerations. Within the realm of commercial arbitration, States incorporate into their laws several regulatory limitations that empower their judiciary or other organs to regulate certain aspects of arbitration. Needless to say, no State would want to completely forego its regulatory power in commercial dispute settlements. This is appropriate, necessary even, since it is the State’s obligation to ensure that justice is being served, even where parties have agreed to privately settle their dispute. This goes hand in hand with the practical consideration that arbitration cannot stand on its own without the support and backing of the State’s law and its institutions, especially the judiciary. As the result, the State inevitably interferes in arbitration, be it in the form of deferring matters to tribunals where a valid arbitration agreement exists or enforcing arbitral awards.

Another form of interference occurs when the principle of competence-competence is not recognized in national laws or is applied with restrictions. The laws of most developed nations explicitly recognizes this principle. For instance, the UK Arbitration Act 1996 under Article 30 recognizes an arbitral tribunal’s power to rule on its substantive jurisdiction, including the power to rule on the validity of an arbitration agreement. The 2010 Model Law similarly, under Article 23(1), recognizes the power of an arbitral tribunal to rule on its jurisdiction including on objections raised regarding the validity of an arbitration agreement. Since an arbitral agreement serves as the basis on which arbitral tribunals base their jurisdiction, its validity is paramount. In this post, the term arbitral submission is used to refer to arbitration clauses.

Coming to Ethiopia, an attempt was made in the 1960’s to introduce modern arbitration and other forms of dispute resolutions mechanisms such as conciliation and mediation. The Ethiopian Civil Code (‘Civil Code’) promulgated in 1960 enumerates substantive provisions governing arbitration while the Ethiopian Civil Procedure Code, put in place five years after, governs the procedural aspects. According to these Codes, Ethiopian Courts are involved in different parts of arbitration proceeding, beginning from the appointment of an arbitrator to entertaining enforcement, challenge and appeals. The Civil Code provides arbitrators several powers including the power to decide on their own jurisdiction. However, Article 3330(3) of the Civil Code severely limits this power by stating that arbitrators cannot be allowed to determine the validity of an arbitral submission. Ethiopian law, being the focus of this post, defines an arbitral submission as a contract where disputing parties appoint an arbitrator to settle their dispute in accordance with the principles of law.

Due to this prohibition, any jurisdictional objection raised on the validity of an arbitral submission will need to be decided not by the arbitral tribunal but by a court of law. The policy reason behind this restriction might be based on the fear that an arbitrator(s) would assume jurisdiction, even based on an invalid arbitral submission, with the objective of seeking arbitrator’s fees.1)Bezawork Shimelash, The formation, Content, and Effect of an Arbitral Submission under Ethiopian Law, Journal of Ethiopian Law, Vol XVII (1994) jQuery("#footnote_plugin_tooltip_4089_1").tooltip({ tip: "#footnote_plugin_tooltip_text_4089_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); One of the components of a tribunal’s jurisdictional power is being empowered to decide on the validity of an arbitral submission, since validity confers jurisdiction. Article 3330(3) of the Civil Code, which is in clear contrast to Section 30(1)(a) of the UK Arbitration Act 1996 and Article 23(1) of the 2010 Model Law, forces parties to seek early court intervention, if/when validity is disputed.

Ethiopia is not a signatory to the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards. Arbitration in Ethiopia is still at a grass root level and the two Codes, that predate the Model Law, have not yet been revised. Courts in Ethiopia have a high tendency of assuming jurisdiction even where there is a valid arbitration agreement, and the policy reason behind the restriction may not be to ensure that arbitrators do not assume jurisdiction on the basis of an invalid arbitral submission. Setting aside ethical considerations, an award passed on such basis would definitely be up for setting aside. This is recognized under Article V 1(a) of the New York Convention as one of the grounds for refusing enforcement of arbitral awards.

Now more than ever, as Ethiopia is opening its doors to investment and businesses, its laws on arbitration are in need of review and should be made arbitration-friendly. One consideration that should be made, when/if the long overdue review of Ethiopian arbitration laws takes place, is lifting the limitation on arbitrator’s power on deciding the validity of an arbitral submission. The courts, on the other hand, should adopt a restrictive approach and give way for arbitral tribunals. As such, Ethiopian courts’ should assume a supporting and not a leading role.

References   [ + ]

1. ↑ Bezawork Shimelash, The formation, Content, and Effect of an Arbitral Submission under Ethiopian Law, Journal of Ethiopian Law, Vol XVII (1994) 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
by Andrea Menaker
€ 240


The post Lack of Arbitrators’ Power to Decide on the Validity of an Arbitral Submission – The Case of Ethiopia appeared first on Kluwer Arbitration Blog.

Video: Construction Week In Focus | Dispute lawyers in demand - Construction Week Online

Google International ADR News - Tue, 2018-08-21 00:15

Construction Week Online

Video: Construction Week In Focus | Dispute lawyers in demand
Construction Week Online
International law firm CMS appointed Patrick McPherson as a partner in its infrastructure, construction, and energy disputes team in Dubai. CMS is not only one to expand its team: Reed Smith made a three-strong talent ... appointments reflect what some ...

'Let's create a world without enemies, only criminals, maybe' - Bangalore Mirror

Google International ADR News - Mon, 2018-08-20 17:35

Bangalore Mirror

'Let's create a world without enemies, only criminals, maybe'
Bangalore Mirror
“Prosecution is just one tool,” Ocampo says, seated at the Art of Living International Centre at Kanakapura Road, where he is visiting after delivering a lecture on alternative dispute resolution at Sri Sri University in Odisha. “We need to learn how ...

Taylor English partner selected as American Bar Foundation Fellow - MDJOnline.com

Google International ADR News - Mon, 2018-08-20 15:49

Taylor English partner selected as American Bar Foundation Fellow
MDJOnline.com
Licensed to practice in California and Georgia, Fisher has experience in federal and state trial and appellate courts and alternative dispute resolution proceedings in both states. He is a board member of both Georgia Appleseed and the Anti-Defamation ...

Frank Sander memorial: October 20

ADR Prof Blog - Mon, 2018-08-20 12:34
The memorial service for Frank Sander will take place at Harvard’s Memorial Church on October 20 at 2pm, with a reception to follow at the Harvard Faculty Club.  I hope that you will come, if you are able. Meanwhile, Frank’s children have put together an absolutely breathtaking website (franksander.com) with photos and stories from Frank’s … Continue reading Frank Sander memorial: October 20 →

On Arbitrating Antitrust/Competition Disputes (I)

Kluwer Arbitration Blog - Mon, 2018-08-20 03:30

Richard Levin

This note will first reflect back thirty three years on the genesis of arbitration and competition matters and the Mitsubishi case, and then, in Part 2 below, I will touch on some practical issues that frequently will arise in a competition case today and how Mitsubishi is still influencing with vigor. As the reader will see, that organic decision continues to be of great significance in the handling of complex arbitrations, especially those dealing with antitrust or competition issues.

 

In Mitsubishi Motors v Soler, 473 US 614 (1985), the US led the worldwide migration to the arbitrability of competition disputes. Up till that time, most, in not all, jurisdictions around the globe considered these matters strictly for the courts. The Supreme Court in Mitsubishi began by noting the “healthy regard for the federal policy favoring arbitration” as well as, in respect to international matters, the growth of American business and trade will not be encouraged if “we insist on a parochial concept that all disputes must be resolved under our laws and in our courts.”  473 US at 629. In holding antitrust claims arbitrable (claims “encompassed within a valid arbitration clause in an agreement embodying an international commercial transaction”), the Court (per Justice Blackmun) observed with remarkable prescience in 1985 “[t]he controversies that international arbitral institutions are called upon to resolve have increased in diversity as well as in complexity. Yet the potential of these tribunals for efficient disposition of legal disagreements arising from commercial relations has not yet been tested.” 473 US at 638. Thus, the Supreme Court was willing to embrace this “experiment” and courts will have to “shake off” any hostilities to arbitration and essentially get with international notions of progress in trade and commerce.

 

In the commercial area, although there is always room to improve, we have certainly seen since 1985 a robust development for increased efficient disposition of these claims in arbitration, including antitrust/competition claims as will be discussed. Also, at the time of Mitsubishi, antitrust/competition advocates were concerned about ceding private enforcement authority to .arbitrators, while the arbitration bar, by virtue of language in the opinion allowing courts to have a “second look,” was unsure just what the case would mean to the very cornerstone of arbitration, party autonomy in deciding how they want their disputes resolved. More on that below as well.

 

Since that seminal case, cases around the world have followed suit if not extended Mitsubishi, most notably Eco Swiss China Time v Benetton Int’l1) Case No C-126/97, [1999] E.C.R. I-3055 (E.C.J.) jQuery("#footnote_plugin_tooltip_1723_1").tooltip({ tip: "#footnote_plugin_tooltip_text_1723_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); in the EU. Furthermore, Mitsubishi has been unremarkably construed to cover US domestic as well as international disputes.2) ABA Antitrust Law Developments (8th ed. 2017), p. 813 jQuery("#footnote_plugin_tooltip_1723_2").tooltip({ tip: "#footnote_plugin_tooltip_text_1723_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Now, in looking back more than thirty years later, Mitsubishi, in addition to its landmark ruling on arbitrability, strikes me on fresh reread as making certain corollary points which are of significant importance to the arbitration and competition law practitioner today.

 

The first observation on reflection is the discussion regarding the concern that antitrust cases are too complex to be left in the hands of arbitrators. The cases “require sophisticated legal and economic analysis, and thus are alleged to be ‘ill-adapted to strengths of the arbitral process, i.e., expedition, minimal requirements of written rationale, simplicity, resort to basic concepts of common sense and simple equity.’” 473 US at 632. The Court’s dismissal of this concern was powerful. Precisely because these cases can be so complex is reason to favor arbitrability as “it is often a judgment that streamlined proceedings and expeditious results will best serve their needs that causes parties to agree to arbitrate their disputes; it is typically a desire to keep the effort and expense required to resolve a dispute within manageable bounds that prompts them mutually to forgo access to judicial remedies.” 473 US at 633. Thus, we see today many arbitral institutions have adapted to complex cases in their rules and the push for expedition in spite of complexity, as well as arbitrator selection of individuals who are comfortable if not expert in the competition arena for example. Antitrust cases many times are economic theory driven and most institutional rules as well as soft law rules such as the IBA Rules on Taking of Evidence in International Arbitration (“IBA Rules”) allow for creative and liberal use of expert testimony in the proceeding. This was recognized by the Court as well as the reference to a kind of “anyway” the cases in arbitration will most likely be vertical issues (subject to an arbitration agreement) and not horizontal price fixing cartel cases, the ”monstrous proceedings that have given antitrust litigation an image of intractability.” 473 US at 633.3) Horizontal price fixing cases have since been held to be arbitrable disputes. See, e.g. JLM v Stolt-Nielsen, 387 F. 3d 163 (2d Cir 2004). jQuery("#footnote_plugin_tooltip_1723_3").tooltip({ tip: "#footnote_plugin_tooltip_text_1723_3", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); It was arbitration’s “adaptability” and “access to expertise” that swayed the Court on the over-complexity argument.

 

The second point that strikes me on a Mitsubishi reread are the concerns raised by the Soler party against arbitration that the private treble damage procedure is too important to the business fabric to be thus relegated and, furthermore, the arbitration process cannot be counted on enforce competition policy with arbitrators, many times foreign and many times chosen from the business community.” Just as just as ‘issues of war and peace are too important to be vested in the generals, . . . decisions as to antitrust regulation of business are too important to be lodged in arbitrators chosen from the business community – particularly those from a foreign community that has had no experience with or exposure to our law and values.’” 473 US at 632. The Court had no problem dismissing these concerns, noting what has been true today, through the party and institutional appointment process, the tribunals have for the most part remained impartial and competent, and have had no special obstacles interpreting foreign law if needed, just as a judicial body would do under Fed R Civ P 44.1.

 

As to the importance of the private treble damage remedy,4) Of course government enforcement (eg criminal enforcement and merger enforcement) would not be arbitrable. On the European front, there has been discussion of arbitration of behavioral remedies in merger cases, but this has not really taken hold. See L.G. Radicati, Arbitration in E.C. Merger Control: Old Wine in a New Bottle, European Journal of Business Law 2007. We have seen recently in the US the use of arbitration proposed by parties seeking government approval in a merger case (ATT and Time Warner). US v ATT et al. (at pages 41, 149 fn. 51). jQuery("#footnote_plugin_tooltip_1723_4").tooltip({ tip: "#footnote_plugin_tooltip_text_1723_4", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); the Court as well found no impediment in allowing a litigant to vindicate its full competition grievance through the arbitration process. The private right of action statute.”5) Section 4 of the Clayton Act, 15 USC sec 15. jQuery("#footnote_plugin_tooltip_1723_5").tooltip({ tip: "#footnote_plugin_tooltip_text_1723_5", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); will remain just as viable in arbitration as in judicial litigation and thus as “the prospective litigant may provide in advance for a mutually agreeable procedure whereby he would seek his antitrust recovery as well as settle other controversies,” 473 US at 636. “The importance of the private damages remedy, however, does not compel the conclusion that it may not be sought outside an American court.” 473 US at 635.

 

Likely the part of Mitsubishi that has engendered the most discussion from scholars and counsel has been the important reference in that opinion to the role of the national courts. The Court stated: [h]aving permitted the arbitration to go forward, the national courts of the United States will have the opportunity at the award-enforcement stage to ensure that the legitimate interest in the enforcement of the antitrust laws has been addressed. The [New York] Convention reserves to each signatory country the right to refuse enforcement of an award where the “recognition or enforcement of the award would be contrary to the public policy of that country.” 473 US at 638. This is the language that spawned the so-called “second look” doctrine although the Supreme Court does not use that phrase. As well, the ECJ affirmed in Eco Swiss that the national courts in the EU should grant annulment of any award where “its domestic rules of procedure require it … for failure to observe national rules of public policy.

 

Having the benefit of thirty three years of hindsight, if the look means a stare vs a glance, we should probably quietly turn the lights out on the “second look” doctrine as there really is no proper “second look,” the Supreme Court did not mean for there to be a proper ”second look,” and we do nothing to further the laudable goals of competition policy or arbitration policy to keep that doctrine breathing. The doctrine could have very well originated at a time in the 80’s when there was perhaps less confidence in the process of international and even domestic arbitration (recall it had not been “tested”), and you can see this in the strong Mitsubishi dissent of Justice Stevens, an eminent jurist to be sure, joined by Justices Brennan and Marshall. 473 US at 665. But I do not think the majority was reticent to the “experiment” when stating that “national courts will need to “shake off the old judicial hostility to arbitration.” 473 US at 638.

 

There is no issue that in most countries competition law forms an integral part of a state’s public policy, its ordre publique that defines its core values to the rule of law. As adherence to a state’s public policy is at the heart of the New York Convention dealing with enforcement of arbitral awards, the national court at the award-enforcement stage has the opportunity to “look” at the award and determine if it comports with the state’s public policy. NY Convention V (2) (b). Furthermore, in meeting the expectations of the parties, the Tribunal should do its best to issue an enforceable award, which goal is embodied in some institutional rules, such as Article 41 of the ICC Rules. Thus, the Tribunal must consider the different competition regimes which touch the controversy; ie in jurisdictions where the award will be enforced and its public policy.6) Professor Radicati has written well on “which competition law.” Arbitration and Competition Law: The Position of the Courts and Arbitrators, 27 LCIA Arbitration International 1 at page 19 (2011); Professor Mayer stated in 1986 that even though arbitrators “are neither guardians of the public order nor invested by the State with the mission of applying its mandatory rules,” they should “pay heed” to the “future” of the award and thus apply all mandatory rules of law to develop an award that can be enforced. Pierre Mayer, Mandatory Rules of Law in International Arbitration, 2 J. Int. Arb. 274, 284-86 (Kluwer 1986). jQuery("#footnote_plugin_tooltip_1723_6").tooltip({ tip: "#footnote_plugin_tooltip_text_1723_6", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

 

It comes down to what kind of “look” does the enforcement court engage? I don’t have the space allotment to discuss this in detail, only to say Professor Radicati has well laid out the “maximalist” and “minimalist” approaches of scholars and the national courts in the article cited in footnote 7.7) The reader is also referred to the thorough compendium on this general subject put together by G Blanke and P Landolt (eds), EU and US Antitrust Arbitration: A Handbook for Practitioners, Kluwer, 2010. The chapters by A Mourre, L Radicati, as well as this writer, all very much state the law has adopted and should adopt the minimalist standard of review of awards. See Chapters 1, 22, and 39. jQuery("#footnote_plugin_tooltip_1723_7").tooltip({ tip: "#footnote_plugin_tooltip_text_1723_7", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Moreover, Justice Blackmun for the Court was quite clear in stating that this “look” is “minimal”: “[w]hile the efficacy of the arbitral process requires that substantive review at the award-enforcement stage remain minimal, it would not require intrusive inquiry to ascertain that the tribunal took cognizance of the antitrust claims and actually decided them.” 473 US at 638.

 

Following that, one of the most respected appellate judges Frank Easterbrook on the US Court of Appeals for the 7th Circuit noted in Baxter Int’l v Abbott Laboratories, 315 F 3d 829 (7th Cir.2003), the very minimal review of the national courts if the arbitration process is going to work or be given a chance to work, as implied strongly by Mitsubishi. “Legal errors are not among the grounds that the Convention gives for refusing to enforce international awards” Judge Easterbrook noted and “Mitsubishi did not contemplate that, once arbitration was over, the federal courts would throw the result in the waste basket and litigate the antitrust issues anew.   That would just be another way of saying that antitrust matters are not arbitrable.”  315 F 3d at 832. And to the same effect are cases across the Atlantic, perhaps the most notable being Thales v Euromissile8) Cour d’appel de Paris, 1re Chambre, section C, 18 Novembre 2004 (n° 2002/19606, SA Thalès Air Défense c/ GIE Euromissile et EADS jQuery("#footnote_plugin_tooltip_1723_8").tooltip({ tip: "#footnote_plugin_tooltip_text_1723_8", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); in the Paris Court of Appeal in 2004, where the court refused to consider a competition law infringement allegedly that “creve les yeux,” but was not even examined for better or for worse by the “yeux” of the arbitrators. The court followed Eco Swiss and French procedural rules and refused to set aside the award.9) See also Gary Born, International Commercial Arbitration (2d ed.2014, Kluwer) at p.3322 where he notes that “[p]ublic policy has generally been invoked only in cases of clear violations of fundamental, mandatory legal rules, not in cases of judicial disagreement with a tribunal’s substantive decisions or procedural rulings.” jQuery("#footnote_plugin_tooltip_1723_9").tooltip({ tip: "#footnote_plugin_tooltip_text_1723_9", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

References   [ + ]

1. ↑ Case No C-126/97, [1999] E.C.R. I-3055 (E.C.J.) 2. ↑ ABA Antitrust Law Developments (8th ed. 2017), p. 813 3. ↑ Horizontal price fixing cases have since been held to be arbitrable disputes. See, e.g. JLM v Stolt-Nielsen, 387 F. 3d 163 (2d Cir 2004). 4. ↑ Of course government enforcement (eg criminal enforcement and merger enforcement) would not be arbitrable. On the European front, there has been discussion of arbitration of behavioral remedies in merger cases, but this has not really taken hold. See L.G. Radicati, Arbitration in E.C. Merger Control: Old Wine in a New Bottle, European Journal of Business Law 2007. We have seen recently in the US the use of arbitration proposed by parties seeking government approval in a merger case (ATT and Time Warner). US v ATT et al. (at pages 41, 149 fn. 51). 5. ↑ Section 4 of the Clayton Act, 15 USC sec 15. 6. ↑ Professor Radicati has written well on “which competition law.” Arbitration and Competition Law: The Position of the Courts and Arbitrators, 27 LCIA Arbitration International 1 at page 19 (2011); Professor Mayer stated in 1986 that even though arbitrators “are neither guardians of the public order nor invested by the State with the mission of applying its mandatory rules,” they should “pay heed” to the “future” of the award and thus apply all mandatory rules of law to develop an award that can be enforced. Pierre Mayer, Mandatory Rules of Law in International Arbitration, 2 J. Int. Arb. 274, 284-86 (Kluwer 1986). 7. ↑ The reader is also referred to the thorough compendium on this general subject put together by G Blanke and P Landolt (eds), EU and US Antitrust Arbitration: A Handbook for Practitioners, Kluwer, 2010. The chapters by A Mourre, L Radicati, as well as this writer, all very much state the law has adopted and should adopt the minimalist standard of review of awards. See Chapters 1, 22, and 39. 8. ↑ Cour d’appel de Paris, 1re Chambre, section C, 18 Novembre 2004 (n° 2002/19606, SA Thalès Air Défense c/ GIE Euromissile et EADS 9. ↑ See also Gary Born, International Commercial Arbitration (2d ed.2014, Kluwer) at p.3322 where he notes that “[p]ublic policy has generally been invoked only in cases of clear violations of fundamental, mandatory legal rules, not in cases of judicial disagreement with a tribunal’s substantive decisions or procedural rulings.” 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
by Andrea Menaker
€ 240


The post On Arbitrating Antitrust/Competition Disputes (I) appeared first on Kluwer Arbitration Blog.

On Arbitrating Antitrust/Competition Disputes (II)

Kluwer Arbitration Blog - Mon, 2018-08-20 02:43

Richard Levin

Now that we know the “second look” is not so much a look but a glance, what does this mean for arbitrators in these cases, frequently highly complex disputes infused with economics? In brief, it places a very heavy burden to get it right. The mandatory public policy of competition law which would by contract be delegated to an arbitration tribunal involves the very fabric of “democratic capitalism” and is of “national interest” to at least the US economy, as Mitsubishi notes, 473 US at 635-36 and there is no reason to think the disputes are less important in most other countries. The importance is heavy, the policy is real, even such that arbitrators, in the view of some scholars, have the duty to raise and apply the relevant competition regimes on their own motion.1) See Radicati, op. cit.fn.7, at p.21 jQuery("#footnote_plugin_tooltip_6137_1").tooltip({ tip: "#footnote_plugin_tooltip_text_6137_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); Thus, I will touch on a few issues I have experienced, noting that Mitsubishi has had a long and wide effect, and its fundamental policy of the nature of arbitration may help practitioners evolve the issues the cases present to lead to “efficient disposition” as predicted by Mitsubishi; the focus will only be on discovery, experts, and summary disposition in complex competition disputes, but you could obviously expand this list.

 

The Supreme Court noted in Mitsubishi, as referenced above, that “vertical restraints which most frequently give birth to antitrust claims covered by an arbitration agreement will not often occasion the monstrous proceedings that have given antitrust litigation an image of intractability. In any event, adaptability and access to expertise are hallmarks of arbitration.” 473 US at 633. And of course, we have seen horizontal restraint allegations in arbitration2) E.g., Stolt-Nielsen, op cit. fn.3. jQuery("#footnote_plugin_tooltip_6137_2").tooltip({ tip: "#footnote_plugin_tooltip_text_6137_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); and many IP cases will involve licenses on a horizontal level and contain arbitration clauses, such as Abbott Laboratories, discussed above. In any case, these are not disputes like nationwide grand jury price fixing or market allocation investigations or dawn raids seen in the EU that involve truckloads of hard drives, paper, etc. Nor are they merger investigations, involving Second Requests. These “monstrous proceedings” are not seen in arbitration. Thus in my experience in arbitrations, in both vertical and horizontal issues, I have latched on the “adaptability” point of Justice Blackmun and have so far been able to successfully conclude disputes with tailored discovery; my guidepost has been the IBA Rules referenced in Part 1. For the sake of expedition and to keep the expense reasonable, depositions are not generally allowed, unless that witness is critical to the case and/or cannot appear live. And while tailored document exchange is the preferred method of information exchange, I would very much agree with two leading practitioners “because arbitral procedures are flexible, it is always possible for a tribunal, if persuaded that it is necessary, to make searching orders for the production of documentary evidence, short of “fishing” exercises.”3) Veeder and Stanley, in EU and US Antitrust Arbitration: A handbook for Practitioners, op cit. fn. 8, ch. 3 at p.105. jQuery("#footnote_plugin_tooltip_6137_3").tooltip({ tip: "#footnote_plugin_tooltip_text_6137_3", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); All this said, this is arbitration, not court litigation, and broad discovery is not necessarily a given.4) Judge Easterbrook noted in a recent domestic US case on the Seventh Circuit “nothing in the Federal Arbitration Act requires an arbitrator to allow any discovery. Avoiding the expense of discovery under the Federal Rules of Civil Procedure and their state-law equivalents is among the principal reasons why people agree to arbitrate. That Hyatt’s attorneys’ fees in the arbitration exceeded $1 million shows that plenty of discovery occurred; an argument that the arbitrator had to allow more rings hollow.” Hyatt Franchising v Shen Zhen jQuery("#footnote_plugin_tooltip_6137_4").tooltip({ tip: "#footnote_plugin_tooltip_text_6137_4", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

 

In any case, discovery of some dimension is usual, especially in a complex arbitration, like a competition based arbitration. Many institutions have adopted rules to deal with the complexities of competition cases, an example being the AAA’s Procedures for Large, Complex Commercial Disputes as well as the soft law guidance of the IBA Rules. Furthermore, the privilege issues that can come up in international disputes can be daunting and I have previously written on my position and the importance of keeping a level playing field between the different parties who may face different privilege national laws and protocols.

 

Justice Blackmun also notes the importance of “access to expertise” as being a “hallmark” of arbitration; the Court refers both to arbitrator expertise as well as expert opinion testimony, “arbitral rules typically provide for the participation of experts either employed by the parties or appointed by the tribunal.” 473 US at 633. Antitrust and competition disputes are expert driven as the jurisprudence in major antitrust regimes throughout the world has trended to be grounded in solid economics.5) In the United States, see US v ATT, et al, op cit. fn. 4; Ohio v American Express, 585 US ____; 138 S. Ct. 2274 (2018). jQuery("#footnote_plugin_tooltip_6137_5").tooltip({ tip: "#footnote_plugin_tooltip_text_6137_5", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); The IBA Rules again have detailed and well thought out procedures in Articles 5 and 6 of the Rules.

 

I have found after years of dealing with competition/economic experts in court, in the agencies in the US and the EC, and in arbitration, that the very “adaptability” which the Supreme Court considers also to be the “hallmark” of arbitration, allows for a better avenue to truth than the courts provide and, therefore, we hope, justice. Messrs. Veeder and Stanley refer to this as “procedural and evidential flexibility.”6) See Veeder and Stanley, op cit. fn. 8, ch.3 at p. 106. jQuery("#footnote_plugin_tooltip_6137_6").tooltip({ tip: "#footnote_plugin_tooltip_text_6137_6", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); The time honored method in many juridical systems of cross examination alone by advocates just may not be the best way of testing economic opinions regarding a definition of a relevant market, has there been more competition over time, has new entry occurred or can it occur in spite of not having occurred, and has there been a prices increase and why not, the list goes on. As noted by the above esteemed barristers, “[i]t is certainly not self-evident that anything resembling full-scale ‘cross-examination’ of the experts by counsel is likely to be productive.”7) Id. jQuery("#footnote_plugin_tooltip_6137_7").tooltip({ tip: "#footnote_plugin_tooltip_text_6137_7", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

 

While I am not certain of the benefits of tribunal-appointed experts, as contemplated by Article 6 of the IBA Rules, I completely agree that simple or rigorous cross examination of party appointed economic experts alone is wasting the very tools of flexibility that arbitration offers. Therefore I have used and have found very beneficial to the tribunals of which I have been a part, a form of witness conferencing with experts as the most robust method to arrive a comfortable resolution, and with any luck, wisdom and truth. I have used this with experts after their testimony and cross examination to pin point them down on point A, then asking the opposing expert her views on that point, then moving to Point B. I have also had simultaneous back and forths as well, just that the tribunal needs tightly to control this process, some with counsel participating, some after the witness’ testimony, with the tribunal only questioning. I have used this most recently with opposing experts on foreign competition legal regimes. Of course, “hot tubbing,” an in vogue procedure, also puts to use the flexibility of arbitration and this is contemplated by the IBA Rules as well in Article 5.4. These procedures and other creative ways at approaching economic expert testimony, of course, should be established in advance at an appropriate case management conference.

 

In the US, dispositive motions (summary judgment motion practice) play a critical part in the development of the antitrust law, mainly as a result of several Supreme Court antitrust decisions, including one a year after Mitsubishi, Matsushita Elec v Zenith Radio, 475 US 574. (1986) (a plaintiff at the dispositive motion stage “must show that the inference of illegal conspiracy is plausible if there is a competing explanation) and, more recently, Bell v Twombley, 550 US 544 (2007), (a plaintiff at the pleading stage must allege facts showing allegations of illegal conspiracy are plausible not merely conceivable). And today in arbitration practice, dispositive motion practice has become an important topic in light of the concern for expedition and expense and many institutional rules have begun to adopt these procedures.8) See, e.g., Article 39 of the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce; Rule 29 of the SIAC (Singapore) Rules; Rule 33 of the AAA Commercial Rules. jQuery("#footnote_plugin_tooltip_6137_8").tooltip({ tip: "#footnote_plugin_tooltip_text_6137_8", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

 

In Mitsubishi, Justice Blackmun noted that “[b]y agreeing to arbitrate a statutory claim, a party … trades the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration.” 473 US at 628. There is no sound reason why the new interest in this summary process in arbitration and the judicial trend in the Supreme Court in competition cases cannot meld together such that more institutions can come on board, especially in these complex disputes. For one, Justice Souter noted in Twombley, that a policy behind the decision is to avoid the potentially enormous discovery expense absent a solid plausible claim for violation. 550 US at 558-60. Moreover, dispositive motion practice plays a much more benign or intrusive role in arbitration as the same fact finder, the tribunal, will resolve the case—with or without a plenary evidentiary hearing; in the US at least, a summary judgment takes the decision process away from the jury.

 

We see a convergence of policies when considering dispositive motions in complex arbitrations, such as competition cases. At one time arbitration, antitrust, dispositive motions, needed discovery, complex disputes were words not used in the same paragraph. These cases have traditionally been heavy document oriented and involved massive discovery, and for many years dispositive motions were discouraged because “the proof is largely in the hands of the alleged conspirators, and hostile witnesses thicken the plot.” Poller v CBS, 368 US 464, 473 (1962). Then in 80s, the courts became chary of simply green lighting expensive antitrust claims with no plausible basis and at the same time, with the groundswell of arbitration, Mitsubishi asked “why not” bring simplicity, informality, and expedition to these same disputes? As the penumbra of Mitsubishi has developed, scholars and institutions have advanced the idea of achieving the policy of Mitsubishi through devices as dispositive motions. To be sure, the case must be a correct one for a dispositive motion, and the tribunal must keep in mind Article V (I) (B) of the New York Convention ensuring procedural fairness (a right to be heard) in the arbitration.9) Gary Born’s treatise is particularly helpful on this score. Op cit. fn. 10 at pp. 3492-541. jQuery("#footnote_plugin_tooltip_6137_9").tooltip({ tip: "#footnote_plugin_tooltip_text_6137_9", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); A dispositive motion, when used properly, can potentially reduce the time and expense in a case, which is consistent with the goals of arbitration.10) This writer first wrote an article on dispositive motion in competition arbitrations about a decade ago (pre-Twombley), 24 J. Int. Arb. 2 (Kluwer 2007), Certain Procedural Issues in Arbitrating Competition Cases, (dispositive motion discussion at pp. 201-209), (with Kurkela, Liebscher, and Sommer). jQuery("#footnote_plugin_tooltip_6137_10").tooltip({ tip: "#footnote_plugin_tooltip_text_6137_10", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

 

Mitsubishi was a landmark decision in the area of arbitration, and especially complex arbitration. One can hope that our judges, arbitral institutions, scholars, and policy makers continue to push the envelope and walk through the door that it has opened.

References   [ + ]

1. ↑ See Radicati, op. cit.fn.7, at p.21 2. ↑ E.g., Stolt-Nielsen, op cit. fn.3. 3. ↑ Veeder and Stanley, in EU and US Antitrust Arbitration: A handbook for Practitioners, op cit. fn. 8, ch. 3 at p.105. 4. ↑ Judge Easterbrook noted in a recent domestic US case on the Seventh Circuit “nothing in the Federal Arbitration Act requires an arbitrator to allow any discovery. Avoiding the expense of discovery under the Federal Rules of Civil Procedure and their state-law equivalents is among the principal reasons why people agree to arbitrate. That Hyatt’s attorneys’ fees in the arbitration exceeded $1 million shows that plenty of discovery occurred; an argument that the arbitrator had to allow more rings hollow.” Hyatt Franchising v Shen Zhen 5. ↑ In the United States, see US v ATT, et al, op cit. fn. 4; Ohio v American Express, 585 US ____; 138 S. Ct. 2274 (2018). 6. ↑ See Veeder and Stanley, op cit. fn. 8, ch.3 at p. 106. 7. ↑ Id. 8. ↑ See, e.g., Article 39 of the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce; Rule 29 of the SIAC (Singapore) Rules; Rule 33 of the AAA Commercial Rules. 9. ↑ Gary Born’s treatise is particularly helpful on this score. Op cit. fn. 10 at pp. 3492-541. 10. ↑ This writer first wrote an article on dispositive motion in competition arbitrations about a decade ago (pre-Twombley), 24 J. Int. Arb. 2 (Kluwer 2007), Certain Procedural Issues in Arbitrating Competition Cases, (dispositive motion discussion at pp. 201-209), (with Kurkela, Liebscher, and Sommer). 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
by Andrea Menaker
€ 240


The post On Arbitrating Antitrust/Competition Disputes (II) appeared first on Kluwer Arbitration Blog.

Judicial Review Of Arbitral Awards: Public Policy And Its Evolution Exploitation - Live Law

Google International ADR News - Mon, 2018-08-20 00:23

Live Law

Judicial Review Of Arbitral Awards: Public Policy And Its Evolution Exploitation
Live Law
Naturally, for arbitration to become an effective alternative dispute resolution mechanism, its functioning mechanism must be segregated from that of Courts, and the Courts must not unnecessarily interfere in the decision-making process of arbitration ...

What’s the Truth?

ADR Prof Blog - Sun, 2018-08-19 21:27
“Truth isn’t truth.”  So said Rudy Giuliani when explaining why his client, the president, should avoid participating in an interview with Special Counsel Robert Mueller.  He rejected the argument that his client didn’t have to worry about this even though he would tell the truth because Mr. Mueller may have a different “version of the … Continue reading What’s the Truth? →

Why Lawyers from Civil Law Jurisdictions Do Not Need the Prague Rules

Kluwer Arbitration Blog - Sun, 2018-08-19 04:00

Michal Kocur

This season the draft Rules on Conduct of the Taking of Evidence in International Arbitration (the Prague Rules) are a regularly occurring topic at European arbitration events. In a nutshell, the Prague Rules are a set of rules close to civil law systems, intended to replace the IBA Rules on the Taking of Evidence in International Arbitration (the IBA Rules). The final text of the Prague Rules is to be released in December 2018 (see also the recent two-part blog post on the Prague Rules by Paula Costa e Silva published on 30 July 2018 and 1 August 2018).

The aim of the Prague Rules is to increase efficiency in international arbitration, i.e. to reduce the time and cost implications of arbitration. The main obstacles to attaining this goal, as identified by the drafters of the Rules, are, on the one hand, the features taken from common law such as document production, the cross-examination of witnesses and the opinions of party-appointed experts, and, on the other hand, the reluctance of arbitrators to actively manage the arbitration proceedings. The proposed means to achieve the goal of increased efficiency is a limitation of the common law features and the introduction of an inquisitorial model of procedure.

Wrong Premises, Wrong Conclusions

There are a number of issues with this reasoning. When properly used, document production, the cross-examination of witnesses and evidence in the form of opinions by party-appointed experts, as well as other common law features, are not the causes of inefficiency in international arbitration. It is the lack of robust case management that is the main culprit behind delayed proceedings and inflated costs. If the tribunal, for example, mismanages document production or cross-examination, this may certainly increase the cost and time of arbitration, but this is not reason enough to abolish these mechanisms, or to significantly limit them. The drafters of the Prague Rules overlook the fact that the common law features that they hold in low esteem, generally lead to the tribunals making better decisions. The solution proposed in the Prague Rules to empower the tribunals to take an active role in establishing facts is a highly controversial one. Such an active role played by tribunals is not even a common feature of civil law procedures. It is unlikely to increase the speed or decrease the cost of arbitration, and will, most likely, merely result in lower quality of arbitral awards.

Document Production, Witnesses and Party-Appointed Experts

Extensive document production may delay arbitral proceedings for months, and may significantly increase the cost of arbitration. The IBA Rules address this problem by stipulating, inter alia, that parties may request the production of only “narrow and specific” categories of documents, as well as providing other safeguards against full-blown American- or English-style discovery.

The Prague Rules throw out the baby with the bathwater. In Article 4 they seem to abolish document production with the exception of requests for the production of specific documents. The problem is that the party requesting documents that it does not possess will rarely be able to identify them beyond indicating the category to which the documents belong.

There are good reasons why the IBA Rules allow the request to produce documents. A party requesting the production of documents may need them to discharge its burden of proof, or to counter any false allegations from the other party. Document production, therefore, does not need to bring a smoking gun to light in order to be beneficial. The drafters of the Prague Rules appear to see only a possible dark side of document production, while overlooking the fact that it may lead to better decisions on the merits, which is the ultimate goal of any arbitration proceeding.

Despite the dismissive remark in the “Note of the Working Group” that, under the IBA Rules “the party’s entitlement to cross-examine witnesses is almost being taken for granted,” the Prague Rules do not abolish the cross-examination of witnesses. Generally, with respect to cross-examination, the Prague Rules give the tribunals similar powers to those they have under the IBA Rules. Also, with respect to experts, it is unclear how the Prague Rules improve upon the language of the IBA Rules.

 Case Management and the Proactive Role of the Tribunals in Fact-Gathering

The Prague Rules set out that the arbitral tribunal will hold a case management conference without any unjustified delay after receiving the case file (Article 2.1 of the Prague Rules). They go on to describe what issues are to be discussed at this management conference, including the relief sought by the parties, the facts that are not in dispute between the parties and the facts that are disputed, as well as the legal grounds on which the parties base their position. They also oblige the tribunal to fix a procedural timetable (Article 2.2 of the Prague Rules). These norms are uncontroversial and do not warrant any new set of rules. There is nothing in this respect that would contradict the IBA Rules. In fact, the Prague Rules have little to say on the issue of case management and anyone looking for guidance in this regard would do better to consult the ICC Arbitration Commission Report on Techniques for Controlling Time and Costs in Arbitration, rather than the Prague Rules.

 The Prague Rules contain some controversial provisions with regard to the role of the tribunal in finding facts. Article 2.3 of the Prague Rules reads:

“The Arbitral Tribunal may at the case management conference or at the later stage, if it deems appropriate, indicate to the Parties:

  1. with regard to the disputed facts – the evidence the Arbitral Tribunal would consider to be appropriate to prove the Parties’ positions;
  2. the actions which could be taken by the Parties and the Arbitral Tribunal to ascertain the factual and legal basis of the claim and the defense; and
  3. its preliminary view on allocation of the burden of proof between the Parties.”

Article 3.1 of the Prague Rules reads:

“The Arbitral Tribunal is entitled and encouraged to take an active role in establishing the facts of the case which it finds relevant for resolution of the dispute. This Arbitral Tribunal’s role, however, shall not release the Parties from their burden of proof.”

These provisions are based on the premise that the tribunals taking an active role in fact-gathering will increase efficiency in arbitration. This is a false premise. One has to distinguish between the active role of arbitrators in case management, and their active role in establishing the facts of the case. The former is desirable, while the latter is not. Disputes resolved in international arbitration are usually complex. The parties themselves know the facts much better than tribunals. However, the Prague Rules are based on a paternalistic assumption that it is the other way around, or that at least the tribunals know better how to establish facts.

Having the tribunal actively looking for evidence is likely to distort the outcome of the case. The tribunal’s active role in fact-gathering may result in helping one party and hurting the other’s case. In terms of the time and cost of arbitrations, such an active role is not helpful. For the timely running of proceedings, it is enough that the tribunals identify contentious issues, set out cut-off dates for providing evidence regarding these issues, and then to enforce them. If a party that bears the burden of proof does not provide evidence, it will be unsuccessful on that point.

The drafters of the Prague Rules argue that civil law lawyers need rules that are closer to their system than the IBA Rules. However, even in civil law jurisdictions, such an active role of the judges in civil cases is not standard practice. Take the example of my jurisdiction – Poland: it is the parties that are responsible for providing the evidence to the court, and the court will only very rarely admit evidence on its own initiative. During Communist times, judges were obliged to gather evidence, though this system was finally abolished in 1996.  There are probably very few Polish lawyers who would like to travel back in time and use the socialist principles of civil procedure in international arbitration.

Let’s Stick to the IBA Rules

The Prague Rules will not increase efficiency in international arbitration. The solutions proposed by the drafters are misguided. The active role of the tribunals in establishing the facts has obvious drawbacks and is no substitute for active case management. The IBA Rules codify the procedures developed in international arbitration over the years. They provide clear standards for arbitration proceedings and unify diverging practices. The Prague Rules are intended to undermine the uniform character of arbitration practices by setting out different standards for “intra-civil law” disputes. This is unfortunate because the convergence of arbitration practices leads to the increased predictability of the tribunals’ behaviour, and ultimately to the success of international arbitration. This is deplorable also because the common law features of international arbitration, if used properly, help to make the arbitral process fairer and assist the arbitrators in reaching better decisions.

 

More from our authors: International Arbitration and the Rule of Law
by Andrea Menaker
€ 240


The post Why Lawyers from Civil Law Jurisdictions Do Not Need the Prague Rules appeared first on Kluwer Arbitration Blog.

Syndicate content