Text of International Arbitration & Litigation Strategies Panel 4: International Arbitration Strategies...
International Arbitration & Litigation Strategies Panel 4: International Arbitration Strategies January 29, 2008 Los Angeles, USA Authored by Presented by Moderator Eckart Broedermann James H. Broderick Jeffery J. Daar Jeffery J. Daar Malcolm S. McNeil Matthew M. Walsh Liu Yuwu Ygnacio Reyes-Retana
2 Selection of Arbitrator Quality Management Project Management Know How Management Coordination of Tasks Cost Controlling Coordination of Invoicing Cost estimation Budget Mentality analysis of judge/ arbitrator (training) Research of Facts Controlling of Facts Award Overview: Similar topics as discussed in litigation New York Convention Private International Law Substantive Law Mandatory Law Rules/Law on procedure Institutional versus ad hoc arbitration Litigation versus Arbitration Project Management Quality Management Know How Management Cost Controlling Coordination of Invoicing Cost estimation Budget Mentality analysis of arbitrator (training) Research of Facts Controlling of Facts Liaison with Client For each of these steps it is important to decide on the right strategy. Arbitration clause First Brief initiating the arbitration Statement of Claim Miscellaneous Briefs on Procedural points Work on Evidence Oral Hearings Post Hearing Brief Enforcement Analysis of Respondents Answer Analysis Other multi- National treaties Bilateral treaties National Arbi- tration laws Comparison with UNCITRAL Model law Rules/Law on Service Rules/Law on Evidence Forum: location, location, location
3 Agenda I. Arbitration Strategy Prior to any Dispute Many of these aspects are covered during the day in other panels Arbitration v. litigation (Panel 2) Drafting an arbitration clause (Panel 5) This panel will emphasize a few additional aspects which go beyond these topics (e.g. confidentiality, choice of law) II. Arbitration Strategy at the Beginning of an Arbitration Location of arbitration Selection of Arbitrators Agreements on procedural aspects like language omitted at the drafting stage III. Arbitration Strategy during an Arbitration, e.g. Level of depth in briefs, Provisional remedies Evidence (discovery), Hearing IV. Arbitration Strategy after the Arbitration Procedure
4 I. Arbitration Strategy Prior to any Dispute (1) The decision on arbitration in general and the forum and method in particular is a decision on the degree of freedom and control during the arbitration process: Different rules of arbitration give different freedom to the parties. If there is time, many things can be decided already in the arbitration clause (see Panel 5); if not, (i) the kind of arbitration forum and the rules chosen determine together with the (ii) types of arbitrators chosen/appointed the remaining freedom.
5 Arbitration Strategy Prior to any Dispute (2) Examples: Implications of location The venue and timing can influence the probability of settlement negotiations venue off easy plane connections ? Agreements on general length of an arbitration Agreements on limitation of evidence Language arrangements cannot only reduce the costs, but also influence the atmosphere of the hearing (pre- selection on who can attend) Agreements on integration of IBA Rules on Ethics
6 Arbitration Strategy Prior to any Dispute (3): Choice of Law The choice of the substantive law governing the contract is independent from the rules or the venue chosen Mindset: If it is the law at the place of the venue there is a danger that an international dispute becomes too local If a neutral legal regime is chosen (e.g. the 2004 UNIDROIT Principles, see www.unidroit.info), an arbitration tribunal can handle such choice often better than a national judge www.unidroit.info
7 II. Arbitration Strategy at the Beginning of an Arbitration (1) Selection of Arbitrators Typically governed by arbitration clause or governing rules Agreements on procedural aspects Same as above, although greater opportunity for post-demand agreements
8 Arbitration Strategy at the Beginning of an Arbitration: Selection of Arbitrators (2) Single or 3-arbitrators-panel? If you appoint one of three arbitrators: Concentration on the main job of the party appointed arbitrator: To decide on the right umpire (chairman). To ensure due process To ensure that all points made by the party will be well understood. In contrast: No biased arbitrator. That violates the law & ethics and contravenes the (own) partys goals
9 Arbitration Strategy at the Beginning of an Arbitration: Selection of Arbitrators (3) Selection criteria: Cultural background, Standing, Personality International competence Education & Know How At the cross road between substantive law and arbitration law Experience Ability to understand the economics Ability to understand the technical background Independence Availability of potential candidate to act as arbitrator to make sure that he/she has the time to devote to the matter
10 Arbitration Strategy at the Beginning of an Arbitration: Agreements on procedural aspects During the first weeks of an arbitration (incl. sometimes the first hearing) there is still room to shape the arbitration process: Either by straightforward agreement (e.g. on the conditions of the arbitrator in an ad hoc process) Or by triggering a procedural order of the tribunal Possible preliminary conference e.g., Language(s) Timing etc.
11 III. Arbitration Strategy Pending the Arbitration Procedure Provisional remedies Discovery Hearing
12 Provisional Remedies Typically turns on arbitration provision, governing rules, or both Beware of waiver issues for seeking provisional remedies prematurely Security deposit issues
13 Discovery Consult arbitration agreement and governing rules Growing trend towards American-style discovery Discovery often expanded or restricted by post-demand agreement of parties
14 Strategy during the Hearing Agreement on schedule of hearing E.g. is time for settlement negotiations needed (when best? Lunch or dinner time?) Admission/limitation of cross-examination Experts conferencing? Opening and/or closing statements? Closing statement and/or post hearing brief?
15 IV. Arbitration Strategy after the Arbitration Procedure Negotiation or enforcement? Economic and Practical Options for enforcement in different countries? Legal options, e.g., under the doctrine of merging an arbitration award into a court decision? Appeal?
16 Enforcement of Award (1) An international arbitration award is usually grounded in the national legal order of the place of arbitration. It is not recognized per se worldwide; it needs first recognition by the state where enforcement is sought (Exequatur). Rules of recognition are contained In the 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards (NYC, more than 160 member states!); Sometimes in further international treaties; Otherwise in the local legal orders (which are increasingly similar as more and more are based on Art. 34 of the UNCITRAL Model Law on International Arbitration).
17 Enforcement of Award (2) As a result, there are a number of akin obstacles to recognition and enforcement of an award. Under the NYC regime the following points are examined ex officio: Foreign award (Art. I para. 1, 2 NYC) Valid arbitration agreement (Art. II para. 1, 2 NYC) Original or copy of award duly notarized (Art. IV NYC) Arbitrability of the subject matter (Art. V para. 2 a NYC) No violation of the public order (Art. V para. 2 b NYC)
18 Enforcement of Award (3) Under the NYC regime, the following points are examined upon request of a party: Failure of partys ability to act at the time of the conclusion of the arbitration agreement (Art. V para. 1 a NYC) Violation of Due Process (Art. V para. 1 b NYC) Surpassing the competence of the arbitrators (Art. V para 1. c NYC). In contrast, there is no revision of the grounds (no rvision au fond).
19 Enforcement of Award (4) Example: Different understanding of public policy India: The arbitration law is based on the UNCITRAL Model law (incl. Art. 34). In 2005, the Supreme Court of India held in the nationally and internationally disputed Saw Pipes Case, that the violation of (substantive) Indian law made an award patently illegal and would therefore violate public policy. In fact, this leads to the (unforeseeable) revision of the grounds.
20 Appeal Option? Pros Cons Considerations
21 Thank you! James H. Broderick Malcolm S. McNeil JBroderick@ssd.com email@example.com@carlsmith.com
22 Annex: James H. Broderick Admitted in California (1981); United States Supreme Court; United States Court of International Trade; United States Courts of Appeals for the Sixth, Ninth, and Federal Circuits; United States District Courts, District of Arizona and Northern, Eastern, Southern and Central Districts of California; Supreme Court of California. Boston University, J.D., 1979 Harvard University, A.B., magna cum laude, 1974 Present Position: Partner, Squire, Sanders & Dempsey LLP International Litigation and Arbitration track record: Mr. Broderick has successfully represented intern