26 IN CONVERSATION WITH ALEC EMMERSON
INTERNATIONAL ARBITRATION 1/3LY
SUS IE What type of tactics have you seen? ALEC Increasingly, and I alluded to this earlier, there’s a tendency toward aggressive debate around technicalities: not letting points go, even if they’re not especially good points. To be fair, it typically stems fromdisputes involving stakeholders fromdifferent countries with unfamiliar legal systems. I think what happens is that the parties, not just party counsel, reallywant to give the case their best shot and not leave anything out –whether they have in-house legal teams or not. But, inevitably, it can generate a lot of documents, and complex legal arguments, which both take time and cost money. Investor/state disputes are notorious for dragging on, often because of jurisdictional issues even in disputes that are not massive. SUS IE Yes, the reality is that, depending on the size and complexity of the case, arbitral proceedings can take longer, and cost more, than court proceedings. Do you think this puts some commercial parties off having arbitration provisions in commercial contracts? ALEC Occasionally, on big disputes, investor/state treaty based arbitration seems like an odd route and you do wonder whether other routesmight have beenmore appropriate and perhaps weren’t fully explored. For international commercial disputes (rather than investor/ state disputes) arbitration is usually best because it offers better international enforcement options. Some institutions have rules for expedited hearings, or no hearings (deciding cases on the papers), on the basis that both parties opt in but there seems to be a reluctance to use these alternatives even in the smaller cases for which theywere designed. I’ve been involved in a number of claims as a sole arbitrator where, despitemy efforts to suggest to the parties that the process can be done quickly and on documents only, usually one of themwants the whole process. It’s their right but I think it’s often the parties’ counsel who won’t risk a cheap and dirty approach.
Essentially, international arbitration has grown and evolved to fulfil a need to resolve disputes through trusted neutral forums that are sufficiently flexible for the international arena. The size of disputes has also changed. In the early 1980s, ‘big’ arbitration cases were over USD 1million. Whereas now, claims and counterclaims for tens and hundreds of millions of dollars, sometimesmany billions, are commonplace. So, as the world’s economy has grown and progressed geometrically, the value of disputes has increased similarly. Probably because of the vast sums at stake, the whole approach to arbitration has becomemore technical, with party counsel nowpursuing every possible technical point – both legal and procedural. I think this, in particular, has resulted in the development of arbitration specialists around the world. SUS IE That’s in line with the increase in the number of arbitrations that I’ve witnessed, particularly as a preferred method of dispute resolution in contracts between international and local commercial parties. But I’ve also noted amisconception that arbitration is a quicker andmore cost effective formof resolution than court proceedings. Was this howarbitrationwas advertised and promoted in the past? ALEC Arbitration should never be entered into with the view that it’s going to be cheap or particularly quick. With a few exceptions, in a ‘reasonably quick’ case, it takes approximately a year to get to the hearing, potentially followed by amonth of written post hearing briefs/closings, and another couple of months for the written award. Most cases are done within 12 to 18months from the time the tribunal is constituted, some in less than a year, but that assumes ameasure of cooperation between the parties and that nobody’s adopting guerrilla tactics to try and string it out. C OMMON MI S C ONCEP T I ONS : C OS T S A ND T IME
I’mactually quite a fan of expedited procedures and I think they could even be used for relatively large disputes, but it’s unlikely to happen because parties won’t agree to it. There’s probably also reluctance from lawyers whomay be keen to avoid the blame if an expedited process goes wrong.
TA C T I C S , F RUS T R AT I ONS , PROBL EMS W I T H T HE
RUL E S A ND A C A L L F OR T R A NSPA RENC Y
SUS IE A common tactic in theMiddle East is for defendants to be recalcitrant and try to delay and frustrate the proceedings as far as possible. In DIAC arbitrations, defendants often refuse to contribute or pay any advance on costs to try and frustrate the whole process, and also refuse to have simple cases heard on the papers. The Rules oblige a Tribunal to hold a hearing if either of the parties requests it, which adds to costs and causes delay in the issuance of awards. ALEC There are a couple of problems with the DIAC Rules that need to be fixed. For instance, there’s an issue as to whether or not tribunals can award legal costs and unwilling respondents may exploit this tactically, pushing up costs by being difficult – knowing that they’ll never agree in the terms of reference to the tribunal having the power to award costs, other than the actual institution’s costs and the tribunal’s own costs as specifically provided for in the Rules. It’s problematic but fair game because there’s a known issue. However, if you look at ICC Rules and the issue of respondents not paying their share, it’s also a problem there. Ultimately it may depend uponwhere the seat is as to whether tribunals can make an interim final award on costs awarding the claimant an amount equal to the advance on costs that the respondent failed to pay. It also depends on the tribunal’s view of whether this can or should be done.
Made with FlippingBook - Online catalogs