INTERNATIONAL ARBITRATION 1/3LY
EFFICIENCY IS ENTIRELY THE DOMAIN OF THE ARBITRATOR, AND NOT THE ROLE OF THE PARTIES, AND IS AN ISSUE THAT NEEDS TO BE ADDRESSED.
ROOM FOR IMPROVEMENT?
LOUKAS Going back to your question, in terms of what could be improved, I think one of the current problems is the limited pool of arbitrators: opening up this pool would make arbitration much more efficient, and much quicker. At the moment it’s not quick enough: some of the bigger cases take a very long time. For example, the time from the final hearing to the award can be unnecessarily lengthy. Efficiency is entirely the domain of the arbitrator (assuming counsel are co-operating), and not the role of the parties, and is an issue that needs to be addressed. But I don’t think arbitration’s too expensive as a result, and you certainly can’t compare the cost of litigation with the cost of arbitration. Plus, arbitration is entirely self-financed, and doesn’t rely on public resources. If you like, the courts are workhorses while arbitration is more akin to an expensive car – when you drive it, you drive it! BEN What you say about the cost of arbitration is interesting, because cost – particularly costs around the administrative process – is an issue. Having said that, I appreciate your point about the comparison with court systems being a false one. For clients used to accessing a court system which might be free, or at nominal cost, the amounts charged by some arbitral tribunals can be eye wateringly large. And, in circumstances where the recoverability of costs from a losing party is unpredictable, an entirely innocent party can be forced to run up huge expenses to defeat a spurious claim. Indeed, there’s a perception that the system has become bloated and risks killing the golden goose – true or otherwise!
BEN Moving on, what do you consider to be the most appealing aspect of international arbitration? And, secondly, is there anything in particular you’d like to change about international arbitration? LOUKAS I think the eclectic nature of arbitration is attractive. With a genuinely international dispute, where neither party will submit to the court of the other side, they have access to an arbitral system with lots of options. For example, with domestic courts – even if the parties like the system, but their normal lawyer isn’t locally qualified – it can be difficult and expensive to find local counsel. And working with local counsel from a distance makes things much more complicated. BEN I agree, and one of the real positives about international arbitration is that it gives both parties an opportunity to seek to resolve issues on an apparently level playing field. In contrast with court processes, detailed knowledge of procedure and precedent – or sophistication of lawyer – aren’t necessarily going to be decisive factors. In arbitration, there may be a dispute where a relatively unsophisticated client and law firm takes on a much more sophisticated opponent, yet the tribunal may still be able to reach an equitable result. However, the position could be very different in court, where a sophisticated client and legal team may be able to take advantage of the process and defeat a less sophisticated party on a technicality.
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