06 IN CONVERSATION WITH NEIL K APL AN CBE QC SBS
INTERNATIONAL ARBITRATION 1/3LY
BE TH Andwhat are your views on institutions’ position regarding the debate about ethics? NE IL I come froman age where one imagined all arbitrators were ethical. 99% of the arbitrators I work with I knowand trust and, I’msure, are perfectly professionally ethical. I don’t see why they need anymore rules to bind them, other than the ones already in existence. BE TH One argument is that the world is changing. We’ve already discussed the impact that developments in arbitration may be having on lawyer behaviour. NE IL The world is changing, yes, and there will be others enforcing these things. If we all belonged to something like the Chartered Institute of Arbitrators and you did something that was unbecoming then you could lose your membership, but that doesn’t stop you frombeing appointed. You can introduce amore elaborate system, for example, taking away arbitrators’ licenses if theymisbehave. This is never going to happen though in the short-term. BE TH Not on a global scale. NE IL No. However, it’s not a bad idea to have a code of conduct to whichwe should all adhere.
But themost important thing is that they’ve got to be efficient. The biggest criticism I hear of centres is that they are inefficient, that there is a delay in dealing with cases, it’s too expensive for what they actually provide and they don’t provide the necessary backup. Having the right facilities is also an important factor. For instance in Sweden, the StockholmChamber of Commerce doesn’t have a centre but instead offers a private venue, or a hotel. You can’t really call yourself an important centre if you don’t have a dedicated venue for proceedings. BE TH With regards to Hong Kong and Singapore, have you found that there has beenmuch of an impact from the recently revised arbitration legislation laws in both of those jurisdictions? Do you find there’s a significant change or is it just more to reflect on? NE IL Not a significant change, as such. I find that it mainly just updates things. We all have ideas on how to improve the law. The trouble is it takes an awful lot longer in Hong Kong to get the law changed then it does in Singapore. BE TH So, what, if any, role do you think arbitral centres should play in the debate surrounding costs in international arbitration? NE IL Costs are a hobby horse withmost arbitrators, but I don’t see what role institutions have in relation to costs. Institutionsmay keep down the arbitrator’s fees and expenses, but that’s the extent of what they can do. Is there one provision you know of that affects what the parties have to pay their own lawyers?Why hasn’t one of the institutions put together a set of rules that limits costs? Because institutions will lose work and everybodywill refuse to go to them. If an institutionwere to have a sliding scale and, for example, in a case worth USD 200million you can only recover say USD 5million in costs, then the defendant will only have to pay the claimant USD 5million in costs, leaving the claimant to cover the balance of the fees. That may be a spur to efficiency. However, such rulesmaymake institutions unattractive to users. One waymay be tomake it an opt-in provision. So, in reality, I don’t think institutions do anything to keep costs down, save to control the fees of the arbitrators, which is a tiny proportion of the all.
Centres also need tomake sure their model clause is up to date. We recently changed themodel clause in Hong Kong to alert parties to the possibility that theymight want to choose a different lawapplicable to the Arbitration Agreement, which was a first. Institutions also need tomake sure they have the right people on the panel, and that there isn’t delaywith proceedings or the issue of the award. The Singapore Court recently had to remove an arbitrator from the panel who failed to deliver an award after a two-year delay. I know there were some special circumstances there, but those types of incidences are unacceptable; it gives arbitration a bad name. BE TH So do you think that it’s the responsibility of arbitral centres to avoid that kind of delay of the award? NE IL An arbitral centre gets involved in two different ways. One way is in the administration of the arbitration. If they are administering the arbitration then they have a duty to keep a check on everything andmake sure there are time limits so that the award comes out in a reasonable amount of time. If, on the other hand, you are only using the arbitral centre as a venue, then unless the parties give powers to the centre to do something expressly, there’s not much a centre can do.
C A N E A RLY OP ENINGS IMPRO V E A RB I T R A L PROCEDURE S?
L OOK ING F ORWA RD : C ONS I DER AT I ONS F OR A RB I T R A L INS T I T U T I ONS
BE TH With regards to the procedural side, are there any issues you think need to be addressed by the arbitration community? NE IL Well, as you know, one of the things I amkeen on at themoment is early openings, which I’ve been using and is nowbeing adopted by arbitratorsmore widely. Do you know how it works? BE TH No, tell me a bit more.
BE TH In light of all the developments that we’ve discussed, what do you think are themajor challenges facing arbitral institutions over the next five years? NE IL The challenge with arbitral institutions is to keep cases coming to them, making themattractive as venues. That means physically; froman efficiency point of view; and in terms of the service delivered. The HKIAC has an excellent team for counsel. We nowprovide tribunal secretarial services to arbitrators if they need it andwe are looking at other things that we can improve.
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