The theme for the 3rd CARTAL Conference is “Winds of Change: Securing Harmony in Arbitral Practice” and is being held on 29th and 30th September, 2018 at National Law University, Jodhpur in India. In recent years, we have witnessed a rise in conflicts in arbitral practice across the globe in both the investment and the commercial setting. This, in turn, has been accompanied by a rise in the efforts to achieve symmetry between diverse practices across the globe. The Conference will aim to address some of these conflicts and the solutions that have been presented, thereby moving towards harmony in arbitral practice. The following are the panels at the Conference-
Panel I- The Investment Court System: For Better Or For Worse?
Panel II- Cross Institutional Consolidation of Arbitration: The Road Ahead.
Panel III- Guerrilla Tactics in International Arbitration: Where To Draw The Line?
The welcome note is being delivered by Aashna Aggarwal and Siddhant Nair, the Editors-In-Chief at the Indian Journal of Arbitration Law.
Vice Chancellor’s Welcome Note
Prof. (Dr.) Poonam Pradhan Saxena, the Vice Chancellor extends a warm welcome to all the eminent panellists, bright young students who are participating and thanks the speakers for taking time out of their schedule to travel around the world to come here.
The Vice Chancellor mentions the efforts made by the University in trying to change the dimension of the legal studies by having extremely qualified faculty engages with the students to blossom into lawyers, judges, civil servants, etc.
Coming to the field of arbitration, Madam Vice Chancellors claims that-
“From 1940-2017, India has come a long way in the field of alternate dispute resolution mechanisms. In the past few years, India has seen a growth of 200% in the number of arbitrations.”
Madam Vice Chancellors iterates that it is essential for law schools and the members of the legal fraternity to come together and discuss vital arbitration issues. She expresses her gratefulness towards the Institutional Partners for the support of these incredible institutions who have brought our conference to fruitions.
Dr. Nidhi Gupta, Executive Director, CARTAL
The introduction to CARTAL, IJAL and the Conference is delivered by Ms. Nidhi Gupta, Executive Director, CARTAL. According to Dr. Gupta, arbitration in the last few decades has emerged as the primary method of resolution of commercial disputes. Consequently, there has been a demand for experts – young minds. Established in 2012, CARTAL was NLUJ’s response to the increasing market demand and fulfil academic research. The centre was fortunate enough to receive patronage of eminent personalities. In the centre, we definitely have a very long way to go before we as emerge as the major training and research hub. But we are glad that within the 6 years we have emerged as intense and meaningful discussion in arbitration law and practice. Apart from this Conference and lectures from eminent professors and practitioners, the Gary Born Essay Writing Competition which has emerged as one of the most prestigious arbitration essay competition. Indeed, our harbinger is the Indian Journal of Arbitration Law. The Journal has received solicitations from all over the world and maintains stringent standards. This gave CARTAL the confidence to conceive this annual conference to bring eminent personalities from the world of arbitration to critical and fertile minds to discuss the burning issues in the world of arbitration.
Before, inviting Dr. Blanke for the keynote address, Dr. Gupta summarises the themes of the last two editions of the Conference. She briefly discusses the theme of the 3rd CARTAL Conference and believes that the changing trends of international arbitration can have a major cascading change on institutional arbitration, international investment relations and the laws relating to arbitration globally.
Dr. Gordon Blanke’s Keynote Address
Dr. Blanke says that the Conference has become a major international arbitration event in the region and has received an enthusiastic response of the arbitration institutions from across the world. This year’s conference focuses on the winds of change in arbitration and the role they play in securing harmony.
Dr. Blanke proposes that throughout the course of arbitration, winds of change have been the driving force in the evolution and modernisation of the arbitration practice world-wide. Looking back in the past decades, we will see there are number of instances winds of change have propelled the further development of arbitration in response to the needs of its local and international community. Most prominent winds of change have a bearing on the proper material and subject matter scope. The result is the use of arbitration as means of “private enforcement”. For example, for the endorsement of antitrust arbitration, Judge Blackmun found in favour of arbitration that arbitrators were competent to settle an antitrust dispute as well as render an award for the same.
The European Court of Justice, 15 years later qualified these rulings within the meaning of Article V (2)(b) of the New York Convention and held that a full substantive review of commercial arbitration to comply with EU Competition laws is possible. Taken together, these developments pave the way of anti-trust and arbitration in both the US and the EU market. It is even said that private enforcement has given rise to the formation of supra-national arbitration, a new one, of the European Commission for matters of competition and the guardian of the EU treaties.
Also made possible are the investor-state arbitration. Arbitration against the host states in the early 1990s, gave rise to ISDS and has revolutionized the way the qualifying investors can initiate arbitration against the host state instead of relying on diplomatic channels between the home and the host states.
The criticism against investment arbitration regime is subject of further discussion of the first panel. That said, it is worth recording that “ICS is bringing back the agenda of the establishment of the Permanent Investment Court as the ICS too, is a structure with high-profile individuals with qualifications from their respective jurisdictions.
At this point, Dr. Blanke flags the major “winds of change” that the international arbitral community has been witness to.
The Investment Court System
The Investment Court System [“ICS”] in itself is a display of a trend. Dr. Blanke argues that the ICS is an establishment of a permanent arbitration court. This inherently, is a reverse trend as arbitration has always been a concept sharply against a “court type of a system”.
Legislative Winds of change
The New York Convention is arguably the most successful in the arbitration history. Sudan is the most recent one to accept this convention. This legislative change has given rise to adoption of UNCITRAL Model Law. This law has become a reliable template for at least 75 jurisdictions worldwide.
Western Hemisphere, Middle East, Asia have their own procedural framework which partially or wholly adopts the Model Law. Most recently, the UAE has joined the model law template. Additionally, the ground breaking the ICSID Convention – lies at the very base of the ICS.
Jurisdictional Winds of Change
The newly established Dubai International Financial Center [“DIFC”] & Abu Dhabi Global Market [“ADMG”], both in UAE, capable of serving as seats of arbitration. The arbitration laws of both the bodies rely on the UNCITRAL Model Law. They also have their own common law courts and operate within their own standalone rules. In addition to their mechanism, the DIFC and the ADMG possess the ability to coordinate with each other’s jurisdictional matters e.g. court orders, etc.
Institutional Winds of Change
Institutional changes are usually marked by creation of arbitral institutes or revision of existing rules of arbitration institutes. However, currently, the Middle East has had a bit of an unorthodox institutional change. The DIFC exists as a sister institute of the LCIA and the ADGM is representative office of Paris Court.
In addition, the Dubai Maritime Arbitration Centre [“DMAC”] has also been established for the sole purpose of settling maritime disputes by way of arbitration.
Dr. Blanke also highlights the emergence of arbitration in banking and finance which he argues is due to the growing complexity of the financial products which give rise to disputes in the modern world.
Coming to the issue of Guerilla Tactics in arbitral practices, Dr. Blanke argues that there has been safeguards being put into place. The 2014 LCIA Rules provide general guidelines to the parties’ representative, violations of which empower the arbitrators to take action. The UNCITRAL Rules on Transparency further empowers institutes and parties to the parent contract. Even in the field of investment arbitration against host states, these changes allow safeguards to the sanctity of the arbitration as opposed to settling disputes through “diplomatic channels” and without indulging in “dumbbell diplomacy”.
On this note, Dr. Blanke initiates the Conference by setting up the discussion for Panel I.
4:00 PM – PANEL DISCUSSION I
We will now begin with Panel Discussion I, the theme of which is, “The Investment Court System: For Better Or For Worse?”. The Panellists for this discussion are:
- Gordon Blanke, Partner, International Commercial Arbitration Team, DWF (Middle East) LLP, Dubai
- Aditya Pratap Singh, International Case Counsel, Asian International Arbitration Centre, Kuala Lumpur, Malaysia
- Aditya Singh, Associate, White & Case LLP, Singapore
- Guillaume Croisant, Associate, Linklaters LLP, Brussels & London
- Mariana Zhong, Senior Associate, Dechert LLP, Beijing
The Panel Discussion will be moderated by Dr. Blanke. He gives the introduction to the theme and opening remarks on the panel.
1. Aditya Pratap Singh, International Case Counsel, Asian International Arbitration Centre (AIAC) talks about the European Union’s proposal to replace the traditional ISDS with Investment Court System. He briefly touches upon two topics – the challenges faced by the ISDS and the effectiveness of the ICS in its place. For the first part of the presentation, he begins by giving an overview of the history of ISDS. Under the ISDS system, investors enforce treaty rights directly against the Host States. It developed out of States’ efforts to reinforce the credibility of the commitments in international investment agreements (IIAs). Since the first IIA in 1959, there are now over 3323 international investment agreements.
He then moves onto discuss the traditional criticisms of the existing ISDS system, regarding the questions of legitimacy v. sovereignty; transparency and accountability; the independence of the tribunal (independence is the lack of proper connections and impartiality is the lack of pre-judgment) and arbitrators’ conflict of interest as a small group of lawyers act as counsels in some cases and arbitrators in others (double hatting).
The biggest criticism, however, remains the inconsistent and incoherent interpretations of Investment law that may arise, especially, in the following three situations: Disputes involving the same facts, parties, and similar investment rights; Disputes involving similar situations and similar investment rights; Explicit disagreements with a prior arbitral award.
In the second part of the presentation, Mr. Singh talks about the emergence of the EU ICS Proposal in the context of TTIP negotiations and its development as a hybrid system with elements of arbitration but also of an international court. The main objectives of the ICS are to ensure full independence and impartiality of the adjudicators at par with the judges in a Court and consistency & correctness of awards through the appeal mechanism. The discussion culminates into discussing the key features of the ICS. Under the ICS, the traditional ad hoc arbitration panels are replaced with a standing body of independent judges appointed by Contracting Parties, random allocation of cases, and a permanent appellate body.
When compared with the classical ISDS system, the biggest difference under the Investment Court System comes in the form of the possibility of an appellate tribunal which may operate like the WTO with a strict time limit and a set of certain grounds for appeal. Such Appellate Body will lead to consistency in the awards and will also provide a possibility of remand. This Appeal Tribunal may uphold, modify or reverse the tribunal’s award which is not possible under the traditional systems.
2. Guillaume Croisant, Linklaters LLP (Brussels & London) talks about the future of the Investment Court System and in particular, the European Commission’s proposal for establishing a permanent Multilateral Investment Court (MIC). The idea is that Investment Arbitration should be provided for in free trade agreements. Under the CETA, EUSFTA, EUVFTA, it is already provided that the Parties shall pursue the establishment of a multilateral investment tribunal and appellate mechanism for the resolution of investment disputes. Further, the EC’s recommendation for a Council decision authorised the opening of negotiations for a convention establishing a MIC for the settlement of investment disputes. The negotiations for the same began in March this year. The key question is that whether such an MIC will enjoy the support from third countries?
Mr. Croisant recognises the difficulty in this topic regarding the compatibility of such mechanism with the CJEU’s case law. To elaborate on this point, Mr. Croisant talks about the Achmea Case (Slovak Republic v. Achmea BV, Case C-284/16, 5 March 2018) in which the European Commission’s view (challenged by investment tribunals) was that ISDS mechanisms contained in all intra-EU BITs and the ECT (with respect to intra-EU disputes) are contrary to EU law, primarily, because the ISDS mechanism contained in BITs is considered incompatible with the principle of autonomy of EU law as an arbitral tribunal may be called upon to apply EU law while it cannot make preliminary references to the CJEU in the first law and its award is not subject to sufficient review by a court of a Member State capable of ensuring compatibility with EU law at the enforcement/annulment stage. Paragraph 57 of Achmea states that autonomy of the EU and its legal order must be respected
Mr. Croisant further discusses the recent request made by Belgium to the CJEU to render an opinion (1/17) on its compatibility with EU law – in particular with the exclusive competence of the CJEU to provide the definitive interpretation of EU law, the general principle of equality and the practical effect requirement of EU law, the right of access to the courts, and the right to an independent and impartial judiciary.
There are two views regarding the ISDS. According to the first popular view, the current ISDS mechanisms have ended. The ad hoc nature of the current system and the lack of an effective appellate review mechanism raise significant concerns such as the lack of consistency and predictability, limited systemic checks on correctness, the nature of appointment process impacting the outputs of the adjudicative process, the significant costs, and the lack of transparency.
The second view, however, makes a case for a partial/temporary continuation of the ISDS mechanism. Within the EU itself, the idea of such Multilateral Investment Courts is not easy to implement. It is generally accepted that such MICs are not sufficient to overcome the general public’s mistrust regarding the investment arbitration. Questions such as whether the (M)IC(s) are limited to the EU’s treaties alone, or whether EU’s push towards (M)IC(s) could be slowed down/jeopardised by the CJEU, the difficulty in amending the existing multilateral treaties (CPTPP, Energy Charter Treaty, NAFTA, etc.) and the problem of the enforcement of the (M)IC’s rulings juxtaposed with the geopolitical context and the increasing appetite for a change of the balance between the States’ right to regulate and the investors’ protection rather than a change of the procedural framework give a chance of survival to the current ISDS system.
3. Aditya Singh, Associate, White & Case LLP, Singapore begins with reiterating the existing enforcement regime of investor-state awards:
- The ICSID Conventions has been signed by over 160 countries and is central to the current investment forum as it has set up the forum at ICSID, NY and is specifically designed for investor-state disputes. Mr. Singh refers to Art. 54 (Binding and enforceable nature of awards) and Art 52 (Limited circumstances when the award can be annulled) to take us deeper into the concept. India, however, is not a member of ICSID. Therefore, to enforce these awards we follow NY Convention.
- The New York Convention, much like ICSID, enjoys wide acceptance. Under this NYC – after the award is given each contracting state is under an obligation to recognize the award as binding and enforce them (Article III) and allows for more permissive set of circumstance when the courts of contracting states can interfere with arbitral award (Article V).
- Enforcement of Decisions of a Multilateral Investment Court. Mr. Singh poses the question of whether the decisions would be considered by International Court or Arbitral Tribunal? First, if arbitral tribunal does so, the benefit accrues from the existing regime for enforcement of arbitral awards e.g. NYC. Second, if not the deemed tribunal as, it has predominant international court system, chances will be significantly reducing because there is no uniform regime for enforcement of international court judgments.
What are the key features of international arbitration that can be incorporated?
No international consensus on such features but still voluntary & consensual submission of the parties (not controversial), decision makers are distinct and separate from the country’s local judiciary, the decision is binding on the parties. However, whether parties play a role in selection of the decision-makers that are appointed on an ad hoc basis is debatable. If we were to take that a body like the ICS where judges are appointed on temporary basis, the choice to appoint the decision makers is a key feature. The argument then cuts against the arbitral tribunal
Inter se Modification of ICSID Convention.
Art. 41 provides that agreements to modify multilateral treaties can be between certain of the parties only. It will take years before a large number of states can create treaties to set up a system like the ICS – but it is also a deeply political controversial issue.
Every time an award is sought to be enforced, courts would retain the power to look into the award, the first question that courts ask is whether or not the decision of the ICS qualifies as an award within the meaning of the NYC. Art. 1 (of the NYC) does not define arbitral awards. but para 2 of Art. 1 says “also those made by permanent arbitral bodies.
Whether this ICS will fall under the definition of PAB?
NYC does not define that either. However, courts in the US and elsewhere have recognised that adjudicatory bodies like the Iran-US body (very similar to arbitral bodies) are issuing decisions which can be considered as awards made by such bodies.
Existence of an “arbitration agreement” under the NYC.
Art II of the NYC defines “submissions”. There is no direct contractual relationship between the claimant and the respondent. What happens is that reliance is placed on the dispute settlement mechanism signed between the two sovereign statements? When a claimant accepts the offer to arbitrate under these agreements – only then there is consent.
Art. 8.25 of the CETA: para 2 “submission of a claim to the Tribunal” “Shall satisfy the requirements of” (b) article II of the NYC for an agreement in writing.
4. Mariana Zhong, Senior Associate, Dechert LLP, Beijing shines a light on the existing investment treaties with the objective of providing a contrast between the existing system and the ICS.
For this end, Ms. Zhong brings in the provisions under the ICSID Convention, Transatlantic Trade and Investment Partnership (“TTIP”, between the EU and USA), the Comprehensive Economic Trade Agreement (“CETA”, between the EU and Canada) relating to Ethics and Code of Conduct.
Ms. Zhong also briefly summarises China’s criticism towards the ICS and ISDS at large as well and claims that a reform such as the ICS is seen an “unnecessary” as China is not subject to a large number of ISDS claims even though a large number of BITs have been signed with other States. After this, Ms. Zhong leaves the panel with the question- “If the purposes of the ICS include (i) to give States, not arbitrators, ultimate control over treaty interpretation, and (ii) to apply a code of conduct ensuring a higher level of ethical and professional standards, can they be achieved within the existing EU proposals?”
This brings the first panel discussion to a close.
6:30 PM PANEL DISCUSSION II
We will now begin with Panel Discussion II, the theme of which is, “Cross Institutional Consolidation of Arbitration: The Road Ahead“. The Panellists for this discussion are:
- Ajar Rab, Partner, Rab & Rab Associates LLP, Dehradun
- Jonathan Lim, Senior Associate, William Cutler Pickering Hale and Dorr LLP, London
- Philip Tan, Senior Associate, White & Case LLP, Singapore
The second panel on cross-institutional consolidation of arbitrations is opened with Mr. Jonathan Lim setting the groundwork for the discussion by introducing the general concept of consolidation of proceedings and the evolution of the SIAC Protocol on the same. The premise of the discussion is that in light of overwhelming statistics of international claims involving multiple parties, a protocol to consolidate in order to increase efficiency of the process for the Parties may be necessary. On this premise, the panellists answer the questions of whether the protocol addressed a real or a perceived problem and if it in face proved legitimate, what would be the various criterion to consolidate, how would the arbitration then be administered and what are the various concerns that could inhibit parties from making provisions for consolidation in their contracts.
Mr. Phillip Tan begins with laying out the basic advantages and disadvantages of the mechanism seeming to espouse the benefits more by stating that the mechanism reduces inefficiency, reduces the possibility of unjust results and primarily reduces the risk of inconsistent awards for disputes arising from related contracts between related parties. However, Mr. Ajar Rab, the voice of dissent on the panel is quick to put more emphasis on the concerns that could prove to be bigger roadblocks than envisaged by the rest of the panel. The argument against the legitimacy of the consolidation protocol is based on the lack of respect for party autonomy in terms of consent to specific rules of specific institutions, appointment of specific arbitrators and the fact that consolidation proceedings could be used as a pressure tactic to force an unwilling party to subject to the jurisdiction of certain institutional rules. Furthermore, they discuss the issue of party confidentiality being compromised in the light of consolidation of issues of parties that may be in conflict with one another. The Panellists make a pertinent point that perhaps a regime without a consolidation protocol would not be riddled with unjustness and inefficiency in light of parties’ interests changing ex ante. The panel thus gives weight to the idea that the parties’ definitions of efficiency and justness of the awards would be more important than mandatorily subjecting them to a consolidation protocol without express consent.
It is then brought to light by Mr. Ajar that any proposed protocol to address issues between parties will have a very limited reach and would be applicable in very specific circumstances. He believes that it must largely be left to party consent. Mr. Ajar and Mr. Tan differ on the concept of an opt-in and opt-out mechanism as regards the applicability of the protocol. Mr. Tan sides with the concept of having a joint committee of various arbitral institutions through the respective representatives, for deciding when and how the consolidation will take place. Mr. Rab agrees with the approach of a joint committee but also raises concerns as regards the representation, costs, privity, and enforceability, thereby questioning the practical viability of this approach. He also brings to the attention of the panel that at the end of the day, the profit-making incentive of the institutions and their aim to seek better recognition might also prove to be a hindrance.
The approach of taking the common denominator, as proposed by Mr. Tan, is agreed upon by the other two Panellists. This approach involves choosing the most stringent of the criteria compared to be adopted. However, there are certain disagreements as well, primarily regarding its interpretation. Mr. Lim points out that the approach is not as simple as it sounds. We have to consider whether the denominator is of the institutional rules or the arbitration itself. Mr. Tan contends that an ex ante approach should be preferred, and more flexibility should be provided while applying the lowest common denominator approach. Mr. Rab notes that the criteria set by Article 15 of the VIAC Rules are perhaps the lowest one. Prior to deciding on the request for consolidation, it requires hearing from the parties and the arbitrators, relevant circumstances including the issues of compatibility of the arbitration agreement itself, and the respective stage of the proceedings. Mr. Lim points out that the arbitration agreement might be incompatible if it involves different arbitral institutions.
Further, the Panellists consider the possibility of forum shopping in case of a stand-alone approach, and information asymmetry in case of the cumulative approach. Mr. Tan brings to attention another consideration involving Article V(1)(d) of the NYC, which raises concerns regarding the recognition and enforceability of the awards when the arbitral procedure and the procedure for the compensation of the costs of the arbitration authority are not in consonance with what has been agreed by the parties. Mr. Rab raises a final concern regarding the relevance of lex arbitri, suggesting that when a party does not get his rightful representation at the joint committee or the administrative body, the lex arbitri should be used to determine the issue and standards involved therein. Further, the public policy of a particular jurisdiction might not permit consolidation.
Mr. Lim concludes the discussion by stating that the protocol for cross-institutional consolidation might be exaggerating the problem which exists, thereby creating more problems than it solves. However, there must be some starting point to simplify the cross-institutional consolidation, and that the lowest common denominator approach was a mutually agreed upon solution, though requiring more deliberation.
This brings the second panel discussion to a close.
09:45 AM – Panel III
The last panel of the conference with the theme of “Guerrilla Tactics in International Arbitration: Where to Draw the Line?” will address questions such as who should be charged with the responsibility of regulating such guerrilla tactics, the difference in the employment of guerrilla tactics in international commercial arbitration, the ISDS mechanism and the possibility of whether such tactics can constitute grounds for setting aside or annulment of the award to serve as a deterrent for the parties.
The Panellists for this discussion are:
- Mr. Abhinav Bhushan, Director, South Asia, ICC Arbiration & ADR
- Mr. Paolo Marzolini, Partner, Patocchi & Marzolini, Geneva
- Ms. Jane Rahman, Senior Counsel, Arbitration Team at Al Tamimi & Co, Dubai
- Mr. Krrishna Singhania, Managing Partner, Singhania & Co.
Mr. Abhinav Bhushan is moderating the panel. He gives the opening remarks on the panel and the panellists.
- Mr. Abhinav Bhushan, Director, South Asia, ICC Arbiration & ADR International Court of Arbitration, International Chambers of Commerce, notes that Guerrilla tactics are hard to define, and one can only recognize them when they see them. The usage of the term “guerrilla tactic” seems to imply that they are, in a way, arbitration ‘terrorists’. Referring to Professor Michael Wong’s definition, he speaks about how such tactics are generally used by respondents who are not interested in playing by the rules of the game, especially when they have a weak case. He mentions that the questions the panel needs to discuss are:
What really is illegitimate? What can be done to do away with this illegitimacy? And where to draw the line? In extension. how are expectations to be managed, and where are they to be recorded? How are they implemented, by parties, or otherwise?
He concludes that although these questions will prevail as long as International Commercial Arbitration prevails, answers can always be sought. He then explains that despite the existence of various governing rules and national laws, much of the heavy lifting has to be done by the tribunal itself and discusses, in this connection, the feasibility of reporting such conduct to the relevant Bar Association.
He points out that six jurisdictions are represented on the panel, and asked the other panellists for their experiences specific to their jurisdictions, and they addressed this question subsequently.
Mr. Bhushan, then, shares a story from his first week of association with the ICC in the year 2012 where one of the arbitrators had walked out of the arbitration. The case pertained to a mining dispute with an African company. The State did not want the arbitration proceedings to continue. The co-arbitrator who had walked out was of the nationality of that country, and other arbitrators were not willing to replace him. It was later found that the arbitrator resigned due to death threats to him and his family. The case provided an example of extreme guerrilla tactics employed by parties which derails arbitration proceedings. He opens the floor for discussion on this issue. Ms. Zhong, Senior Associate, Dechert LLP, Beijing shares her story of when she was representing a Chinese client. Before the arbitration could commence, all the relevant documents were stolen and certain employees abducted. The client was not able to present any documents or make his case, yet again illustrating the extent parties can go to when employing tactics of this nature.
He also notes that some institutional roles, for instance the ICC, have rules that may go some way in combating tactics of this kind. In conversation with his co-panellist, Mr. Paolo Marzolini, for instance, he points out that under the ICC, documents cannot be produced once the hearing has concluded, to some extent aiding in discouraging guerrilla tactics.
- Mr. Paolo Marzolini, Senior Counsel, Arbitration Team at Al Tamimi & Co, Dubai, begins by discussing the genesis of the term guerrilla tactics in general. He traces the origin of the expression to the Spanish peninsular war, where this term was used to define assaults by the Spanish militia against Napoleon’s army. In the arbitration context, the word has lost much of its romantic flavour. Parties who employ such tactics are not perceived as fighting for some noble cause, and far from being champions of natural justice- are considered exactly the opposite. They end up putting the tribunal in an impossible position by constantly delaying and attempting to escape the proceedings. Counsel and parties doing this are considered to be a disease that needs curing by the arbitration community and tribunals.
He, however, questions if it is always bad to pursue a client’s interests in this manner.
In his opinion, it is over simplistic to answer the question in the affirmative without deeper consideration. He then turns to the cultural background as a marker that distinguishes whether such conduct of a counsel is perfectly acceptable, borderline, or unacceptable. He points out that too much interference by the tribunal may be perceived as a violation of the party’s right to put the case before the tribunal in a familiar way and so arbitrators must be careful in classifying a practice as a guerrilla tactic. He speaks of his personal experiences observing overreactions by arbitral tribunals, and emphasises that not all aggressive actions can be labelled guerrilla articles.
One should never forget that the information available to arbitrators are significantly lower than the information available with counsel and parties.
He talks of how International Arbitration faces a battle between ensuring procedural efficiency and the fear of due process, and put forwards a question as regards to the extent to which a tribunal can condemn guerrilla tactics without endangering due process?
Having identified the principles that must be kept in mind, he provides a few examples of the kinds of actions that can be considered guerrilla tactics, from his personal experience. Firstly, the practice of allowing the arbitral tribunal to switch seats if the need is felt, he explains, could be misused. Secondly, he identifies the problems with witnesses ‘switching hats’, which refers to changing the side in whose favour they speak during the course of the proceedings. Some other such tactics are exhausting the money available with the other party by freezing an account, and relying on the lengthiness of the proceedings to try and obtain information that that party could not otherwise obtain. With regard to criminal provisions, he states that in some jurisdictions, a criminal judge can summon certain documents and these documents can subsequently be used in arbitration proceedings, creating immense scope for misuse.
- Ms. Jane Rehman, Senior Counsel, Arbitration Team at Al Tamimi & Co, Dubai, starts by speaking about a speech she heard in 2014 with reference to the standards of conduct to be followed in an arbitral proceeding. It was concluded in that speech that parties should behave like ‘ladies and gentlemen’. In International Commercial Arbitration, however, this sound principle has not been practiced efficiently. It had also failed to resolve complications because the cultural standards for acceptable behaviour are different across jurisdictions. She identifies that there are some obvious red lines which all kinds of parties can agree upon – for instance, parties must not mislead a tribunal. This list of what is quite clearly not acceptable, however, is very limited. The primary task should be to delineate what practices fall within it, so that we can move on to the grey areas where there is more conflict, for instance- deliberately increasing expenses, probing into documents of the other side, and creating intentional delays.
When are these acceptable and when not? How do we go about dealing with those tactics? Should we deal with them at all?
She emphasises that party autonomy as an overarching principle must be respected at all cost because party autonomy along with the added benefits of confidentiality are the primary reasons for people who choose arbitration as their preferred means to resolve dispute.
The more we regulate the more we take away from party autonomy.
She brings up the question of which authority can actually regulate such conduct. Is it to be self-regulation? She speaks about how self-regulation is idealistic and there are some evident limitations to it, but counsel do this to a certain extent. She speaks about how self-regulation can be done by looking at the balance of the benefit one would receive from employing the tactic as weighed against the possible loss of credibility and impact on the tribunal. This is because a tribunal is likely to think about the situation prompting the use of the tactic and judge the strength or weakness of the case. However, in situations where there is no self-regulation, do we look towards tribunals, institutions or national courts?
Moving on to identifying guerrilla tactics, she speaks about how day to day actions like consistently ignoring procedural deadlines, making applications that do not necessarily have merit just to see what happens, and other more innocuous actions, while less interesting, are more commonly employed to derail a case.
Referring to her time in England and Dubai, she speaks about her experience of the differences in the two jurisdictions. She begins by pointing out that in England, while delays are not condoned, documents introduced even at very late stages in the proceedings are considered. In contrast, in Dubai, tribunals are more amenable to requests for delays. She says that she has witnessed more lack of engagement is the document production process there, than in any other jurisdiction and though the tribunal does give attention to the issue, it depends on whether they are lawyers from civil or common law jurisdictions. In response to a request for an anecdote, she talks of how a client once got all the witnesses on the other party’s side arrested, and emphasised how controlling one’s own client also assumes exceeding importance. She also expresses concern regarding a provision on the statute books in U.A.E, which allows for criminal proceedings against tribunal members and how she has seen its adverse impact.
- Mr. Krrishna Singhania, Managing Partner, Singhania & Co., begins with sharing his experience from when he was working with White & Case LLP in New York. He shares that a Pakistani company kidnapped the opposing party’s engineers to ensure that the ICC arbitration took place and the arbitrator in that particular case took note of this fact while arriving at his final decision. Though such instances of outright violence are rare, they do happen.
He notes that in India, there was a provision in the 1940 Arbitration Act which provided that the concurrence of both parties to the arbitration was needed four months after arbitrator has been appointed. This became a way for parties to avoid the proceedings. In Singer v. NTPC, a case from before the 1996 Arbitration & Conciliation Act (India), which involved an ICC arbitration clause. The ICC appointed a third arbitrator from London who gave a preliminary award stating that the arbitration would be conducted as per English law. The Indian party filed a case before the Delhi HC as a delaying tactic, and pursued it all the way up to the Supreme Court. Since courts cannot restrict a foreign arbitrator but can restrict an Indian party, they often end up with delayed arbitrations and increased costs. He then compares this to how after the 1996 Act, such behaviour has largely been regulated.
He points out how international arbitrators normally want their awards to be enforceable, and so, they allow the parties some indulgences like filing late, allowing some surprises, and so on. This puts the arbitrator in a fix. In institutional arbitration, the arbitrator can benefit from the rules if they provide such situations, discipline the parties and therefore, fulfil his obligations.
He mentions that one particular guerrilla tactic that is widely used in India, is to appoint a retired judge but these Judges are usually very busy and have several commitments as arbitrators in many proceedings. This end up delaying their particular proceeding. Further, he noted that in India there is huge involvement of bureaucracy in the process and so, he mentions that delaying is not really seen as a guerrilla tactic here. He suggests that a way of dealing with the issue is imposition of costs for delays. He also highlights that trying to create greed in the mind of the arbitrator by offering the possibility of referring future cases to him, is another prominent tactic in India, especially in government contracts where a tacit understanding develops and creates unfairness in the procedure.
The panellists conclude by sharing their own observations from a practical perspective. As Jane Rehman had predicted at the outset, the panel closes with an enriching and nuanced discussion on the issue.
This brings the third panel to a close.
11:15AM- VALEDICTORY CEREMONY
Ms. Prakrati Shah and Ms. Shalina Abhale, the Joint Organising Secretaries of the Conference and Executive Directors, IJAL deliver the Report of the Conference. Mementos are presented to all the panellists. A Vote of Thanks is delivered by Ms. Shah and Ms. Abhale, bringing the Conference to an end.