Arbitration: A global round-up

Developments in international arbitration rules
and laws

Publikation September 2019


Introduction

In recent months there have been a number of new arbitration related developments across the globe. In this article, we look at a few of the most significant and highlight key points of interest.

New CIArb Witness Conferencing Guidelines

In April 2019, the Chartered Institute of Arbitrators (CIArb) launched new Guidelines for Witness Conferencing in International Arbitration. Witness conferencing, a process for presenting evidence concurrently from multiple witnesses – most commonly, expert witnesses – has become increasingly popular in international arbitration. CIArb’s new Guidelines are intended to assist parties, arbitrators and witnesses to decide whether conferencing is appropriate in the circumstances and, if so, to decide the most suitable procedures. The Guidelines comprise a Checklist, Standard Directions and Specific Directions, supported by Explanatory Notes.

The Checklist provides a list of matters to consider when deciding whether to hold a witness conference and if so, in what form. It includes the matters in issue, the number of witnesses, the relationship between witnesses and cultural considerations, and logistical arrangements of the conference.

The Standard Directions provide, at an early stage of proceedings, a general framework for witness conferencing which may be adopted in an early procedural order. They generally preserve both consecutive and concurrent evidence, and allow the tribunal to vary the procedures to take concurrent evidence at any time during the proceedings. Examples of Directions as to conferencing include joint preparation of a schedule by witnesses of areas where they agree and disagree, and joint production by parties of supporting material (e.g. joint chronologies of agreed facts).

The Specific Directions delve into more detail such as administering oaths/affirmations, how and what oral evidence will be given, the order of witnesses, by whom and how questions may be put. There are three possible frameworks depending on who will be leading the conference (the witnesses, the tribunal, or parties’ counsel). A combination of the three frameworks may be adopted. The Specific Directions can be used to create a standalone procedural order specific to the witness conference, or included in a general procedural order.

The Explanatory Notes provide discussion on items covered in the Checklist and Directions.

LCIA and SCC caseload statistics

The LCIA and SCC recently published caseload statistics from cases administered in 2018.

A record number of 317 arbitrations were referred to the LCIA in 2018, of which 271 were referred under the LCIA Rules and the remainder were administrative services provided under UNCITRAL Rules or ad hoc arbitrations. A significant proportion of parties were domiciled in the UK (20.6 per cent), Western Europe (15.8 per cent, down from 19.3 per cent) and CIS (9.5 per cent, down from 10.4 per cent). However, 2018 saw an increasing number of users from Asia (14.4 per cent) and MENA (13.2 per cent), as well as India (8 per cent). The LCIA also saw a decrease by 9 per cent in the number of arbitrations governed by English law (76 per cent). The number of arbitrations seated outside England and Wales increased from 6 per cent to 12 per cent. These statistics support the LCIA’s credentials and efforts to be a global dispute forum, with a remit extending far beyond London.

The LCIA’s caseload was made up predominately of disputes in the banking and finance, energy and resources, and transport and commodities. The number of banking and finance arbitrations increased to 29 per cent of all cases from 24 per cent in 2017. Transport and commodities cases also grew, to 14 per cent of cases from 11 per cent in 2017. Energy and resources disputes dropped from 24 per cent in 2017 to 19 per cent in 2018. Construction and professional services disputes also represented a notable proportion of cases (respectively 10 per cent and 7 per cent). Overall, claimants and respondents were most likely to be from the energy and resources sector (22 per cent and 24 per cent respectively). Interestingly, the LCIA notes that parties from banking and finance sectors are significantly more often claimants (21 per cent of claimants) than respondents (12 per cent of respondents).

Disputes arose under a number of different types of agreements, but the most common were loan or other facility agreements (21 per cent), shareholders’ agreements, share purchase agreements and joint venture agreements (21 per cent, up from 15 per cent), services agreements (19 per cent), and sales of goods agreements (18 per cent). 11 per cent of arbitrations referred had a sum in dispute exceeding US $100 million.

A total of 152 cases were registered with the SCC. Of these, 89 were filed under the SCC Arbitration Rules and 52 under the SCC Rules for Expedited Arbitrations. The SCC also registered four Emergency Arbitrator proceedings. There was an almost even split between cases involving Swedish parties only and international disputes. International users came from 43 countries, with the majority from Russia, Germany and Ukraine. Seats outside of Sweden remain relatively rare: 69 per cent of cases were seated in Stockholm, followed by Gothenburg then Malmö.

Disputes arose under many different types of agreements, though a significant proportion arose out of service agreements, delivery agreements, business acquisitions and shareholder agreements. Disputes were most commonly governed by Swedish law (55 per cent) followed by English law and the UN Convention on Contracts for the International Sale of Goods.

Some positive developments in gender diversity were reported by both institutions, though continued efforts are still needed to reach parity. Of all arbitrators appointed in LCIA arbitrations in 2018, women represented only 23 per cent. However, of arbitrators selected by the LCIA Court, women represented 43 per cent – an increase of 9 per cent from 2017.

Similarly an increase was seen in SCC arbitrations, where the proportion of women arbitrators grew from 18 per cent in 2017 to 27 per cent in 2018. Notably, 24 per cent of party-appointed arbitrators were women, compared to only 8 per cent in 2017 and 11 per cent in 2016. There was an almost even gender representation in arbitrators appointed by co-arbitrators.

Developments in Singapore

Proposed amendments to Singapore’s International Arbitration Act

On June 26, 2019, the Ministry of Law published a consultation paper proposing six new amendments to the International Arbitration Act (Cap. 143A) (IAA). One of the most significant proposals is to allow parties to arbitration proceedings to appeal to the Singapore High Court on a question of law arising out of an award made in the proceedings, provided the parties have opted in to this mechanism.

The draft provision for an appeal on a question of law is similar to the rubric for appeals on a question of law arising out of an award which governs domestic (as opposed to international) arbitration under the Arbitration Act (Cap. 10), which is almost in pari materia with section 69 of the English Arbitration Act 1996. This is an important development, as apart from England and Singapore’s domestic arbitration regime, only four other jurisdictions allow for an appeal on a question of law arising out of an award – France, Hong Kong, India and Switzerland.

Other notable proposals to amend the IAA include

  • A mode of appointment of arbitrators where there are more than two parties to an arbitration agreement.
  • Allowing parties to, by agreement, request the arbitral tribunal to decide on jurisdiction at a preliminary stage.
  • Recognize that an arbitral tribunal and the Singapore High Court has powers to enforce obligations of confidentiality in an arbitration.
  • Allowing parties to agree to waive or limit the annulment grounds under the Model Law and IAA.

Singapore Convention on Mediation

The United Nations Convention on International Settlement Agreements Resulting from Mediation is a new multilateral treaty developed by UNCITRAL. Named the Singapore Convention on Mediation, the Convention opened for signature in Singapore on August 7,2019, two days before Singapore’s National Day on August 9. The Convention will apply only to international commercial settlement agreements resulting from mediation. The Convention makes it clear that it does not apply to international settlement agreements that are concluded in the course of judicial or arbitral proceedings, and which are enforceable as a court judgment or arbitral award. For further information on the Singapore Convention, please see the separate article in this issue.

Developments in Australia

Interpreting the scope of an arbitration agreement under Article 8 of the Model Law

In the recent decision of Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13, handed down by the High Court of Australia, the Court was asked to determine whether an arbitration clause in an agreement that is expressed to deal with disputes “under this deed”, also applies to disputes as to the deed’s validity. The answer to this question would determine whether or not the resolution of the same dispute should be bifurcated into two separate proceedings; one before the court to deal with the question of the validity of the arbitration agreement; and one before the arbitral tribunal to deal with the underlying dispute arising “under this deed”. Given that Australia has adopted the Model Law for both international and domestic arbitrations, the High Court’s decision touches on the proper approach to determining an application under Article 8 of the Model Law.

The High Court agreed with the full Federal Court decision below in concluding that the validity claims fell within the scope of the arbitral clauses. Interestingly, the High Court felt it unnecessary to engage in the jurisprudential debate in the lower courts as to whether arbitration clauses should be liberally interpreted in line with the widely cited decision in Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40. Instead, the High Court held unanimously that the issue could be resolved in the application of orthodox principles of interpretation, which required consideration of the context and purpose of the deeds in issue.

The High Court concluded that the background to and purposes of the deeds in question pointed clearly to arbitral clauses of wide coverage with respect to what was to be the subject of confidential processes of dispute resolution. As such, the High Court dismissed the appeal, finding that it was inconceivable that a party to the deed could have thought that any challenge to it would be determined publicly, in court.

With thanks to Laura McKellar, trainee solicitor, for her contribution to this article.

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