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Reflections from theInternational Arbitration Group

In this publication Clifford Chance international arbitration practitioners from across ourglobal network – in the UK, Europe, Middle East, Asia Pacific and the Americas – commenton the trends and developments significant to the field of international arbitration.

Their thoughts and views are wide ranging and varied, reflecting the broad range of issues thatorganisations involved in international arbitration face today.

International arbitration has become the established norm for the resolution of disputes in cross-border business and investment, with new sector users, such as banking and finance, emerging andestablishing their own institutions to cater to their sector specific needs. The industries whereinternational arbitration has long been “standard” are seeing sector-wide issues arising from politicalinstability, market volatility and increased protectionism that inevitably give rise to disputes referredto arbitration.

With an increasingly connected global economy, competition is growing between the arbitral institutions,as well as between places of arbitration, with new regional institutions emerging and challenging themore established players. In an attempt to remain competitive, institutions are developing their rules andprocedures, with efforts to streamline processes in order to provide users with greater certainty andcontrol over costs, as well as moves towards transparency in what has traditionally been an “opaque”arena. The development of the ‘industry’ has also spurred the growth of legal directories, publications,hearing centres and other complementing businesses such as third party funders.

Issues of ethics are also being considered, with questions being asked over the deliberate use ofcertain arbitral processes with the intention of derailing or delaying an arbitration. One of the mostinteresting late developments relates to regulation of arbitration counsel, with guidelines from the IBAon what is expected and guidelines prescribed by the LCIA.

Our practitioners around the world have also seen an increase in the use of investment treatyarbitration, in the aftermath of political change and unrest, as well as economic uncertainty. Thisincreased activity brings with it some “growing pain”, which is still being played out.

Finally, across the world, attitudes towards the use of international arbitration are changing, withmore countries eager to be seen as arbitration and enforcement “friendly” jurisdictions and becomingparty to the New York Convention. Attitudes to investment treaty arbitration however, are morevaried, with some countries taking a more jaundiced stance towards these disputes and evendenouncing the ICSID convention.

In the face of these changes and challenges, international arbitration remains the preferred choice ofdispute resolution for many organisations, which need to remain alert to these regional, sectoral andinstitutional differences. Clifford Chance helps guide its clients through the varied landscape aroundthe world and provides unrivalled insight into the major arbitral institutions.

Welcome to Reflections

Jason Fry Audley Sheppard

Trends and Sector Focus ............................................................................4

Developments in the Oil and Gas Sector .........................................................5

Energy Disputes: Gas Supply and Infrastructure Disputes ...............................6

Arbitration for Financial Institutions...................................................................7

Investor-State Dispute Resolution ....................................................................9

Rules and Institutions ................................................................................12

Ethics.............................................................................................................13

Transparency .................................................................................................14

HKIAC Rules..................................................................................................14

ADCCAC Rules..............................................................................................15

LCIA Rules.....................................................................................................15

KCAB Rules...................................................................................................15

New Regional Arbitration Institutions..............................................................16

Regional Attitudes ......................................................................................18

The Americas.................................................................................................19

North America................................................................................................19

Europe...........................................................................................................20

Russia............................................................................................................23

Middle East....................................................................................................23

Africa .............................................................................................................24

Asia-Pacific ....................................................................................................24

Global Arbitration Contacts .......................................................................28

contents

© Clifford Chance, October 2015

1. Trends and Sector Focus

Reflections from the International Arbitration Group 5


Developments in the Oil andGas SectorWe have seen a number of developmentsin the oil and gas sector that are likely tobe of interest to arbitration practitionersgiven the causal connection betweenchanges to market fundamentals and thevolume/type of disputes. In the immediateterm, political instability in the Middle Eastand ongoing disputes in Ukraine willcontinue to inform political riskevaluations with consequential effects oninvestment decisions and the allocation ofcapital more generally. Over the longerterm, the potential growth of theLiquefied Natural Gas (LNG) market is ofinterest, with both the US and Canadapositioning themselves to become massexporters within the next 5 years. This willaffect, in particular, long-term gas supplyagreements concluded against a verydifferent political and economic backdrop.Africa has witnessed very significantchanges as new frontiers andopportunities continue to open up, whilstlegislative changes in Nigeria arefavouring a class of new local playersalongside the international oil companiesand the increasingly internationalistnational oil companies. The expectedcooling of the People’s Republic of China(PRC) economy will affect markets in Asiaand globally, though the PRC’s demandfor natural resources remains very highand we will likely see further significant

investments by PRC oil companiesacross the globe.

There are therefore a number ofdevelopments that can be perceived bothas opportunities and risks. Clifford Chancehas again partnered with The EconomistIntelligence Unit to survey directors ofmajor corporations around the world for areport that looks at the challenges andrisks facing global companies, rangingfrom evolving sanctions regimes to therisk of cyber-attacks and reputationalissues. The report looks at how risk isperceived and managed at board leveland is based on a survey of 320 boardmembers of companies – including oil andgas organisations – each with over half abillion US dollars in annual revenue.

The report’s findings show that oil andgas sector boards are primarilyconcerned with high probability financial,legal and regulatory risks that they knowwill affect the bottom line and future ofthe company. Environmental risks andother social issues are important – butprincipally because of the reputationaland, in turn, value impact that they canhave (for example, on share price).

While reputational and environmentalrisks are important in their own right,access to capital and using it to developassets is of central importance to any oiland gas company as it underpins thecompany’s very existence and continued

success. Financial risk is thereforeinescapable for oil and gas companyboards, with 77% of oil and gasrespondents citing it as one of their topthree current concerns and 83%predicting it will become even moreimportant over the next two years.

The current difficulties in raising finance inthe equity capital markets has in turnmeant that mid-caps who would previouslyhave been interested in purchasing theassets divested by super-majors have notbeen in a position to do so. The result ofthis has been two-fold: a diversification ofmarket participants with cash-richcommodities trading houses or smaller,indigenous players stepping in to fill thevoid; and an increase in the frequency ofjoint-venturing – often with national oilcompanies or existing holders ofundeveloped assets who are able to offerinterests in potentially significant assets inreturn for development funding. The after-shocks of the global financial crisis andgeopolitical events continue to reshapeglobal markets in this and many otherways: “May you live in interesting times” isoften, but wrongly, thought of as a curse.Whatever its provenance, it is certainly apt.

Alex PanayidesClifford Chance, London

Michael KremerClifford Chance,Dusseldorf

Alex PanayidesClifford Chance,London

Ben LuscombeClifford Chance, Perth

Sam LuttrellClifford Chance, Perth

Authors

Energy Disputes: GasSupply and InfrastructureDisputesThe increase in energy supply contractdisputes has resulted mainly from long-term supply contracts for power, gas or oilwhich typically include pricing clauses andpayment terms linked to market indexes forgas and oil. Hence, with the (increased)volatility of gas and oil prices, these upsand downs are not reflected in the pricecalculation of the long-term supplycontract, usually placing a significantburden on the customer/buyer. Prices onthe spot market have become much morefavourable than those under long-termcontracts, even though the long-termcontracts were meant to ensure stability ofsupply and reasonable price terms.

In Germany, in response to thisdevelopment, there has recently been atrend of these long-term contracts beingvoided on grounds of antitrustinfringements. A recent Federal High Courtdecision found that price calculation

clauses in long-term supply contractsconstitute general terms and conditionsand thus are subject to scrutiny by thecourts. If such clauses do not allow forreasonable adjustments in the event ofsignificant changes to the respectivegas/oil indexes, they are rendered void,which will clearly be a concerningdevelopment for energy companies.

The last two years have seen a significantincrease in energy-related arbitrationdisputes. Whilst in the past arbitrations in

this sector were mainly ad hoc,increasingly clients are using institutionalarbitrations, for example, through theInternational Chamber of Commerce(ICC) or The German Institution ofArbitration (DIS). There are also a growingnumber of large international constructionand engineering disputes that are givingrise to ICC arbitrations.

Michael KremerClifford Chance, Dusseldorf

6 Reflections from the International Arbitration Group

“Being at the heart of the Rhine-Ruhr area, Düsseldorf isa hub for energy and infrastructure clients. Several ofGermany’s energy providers, as well as majorconstruction and engineering companies, are located inDüsseldorf, Essen and the immediate vicinity. Disputesin these industry sectors have historically been a focuspoint of our Düsseldorf office.”

Michael KremerClifford Chance, Dusseldorf

“The rise in gas supply pricing disputes is tied to the shale revolution that is turningthe US from a mass importer into a mass exporter of gas. This development hasimpacted on the price of gas coming from Qatar and in turn has impacted theEuropean and Russian gas markets. Asia has remained largely insulated from thisdevelopment thus far, but the question is – what happens when this hits Asia?

For Australia this is interesting as developments in oil and gas in Western Australiaare, in practice, linked to Asian prices. If Asian prices become negatively affected,since many agreements/prices are underpinned by long-term contracts (as opposedto more short-term spot prices), there may be concern for those who have invested inthe Western Australian oil and gas sector.”

Ben LuscombeClifford Chance, Perth




Arbitration for FinancialInstitutionsBanks and financial institutionsincreasingly use international arbitrationas a dispute resolution option. Thetraditional reluctance that in partstemmed from the idea that arbitrationwas not suited for simple “one shotmoney disputes” is now long behind us ina financial world that is far more complexthan ever before. In the UK, it isespecially the case following the shift inbanking litigation post the 2008 financialcrisis, which has led to an increase inclaims by individual investors andcorporate bodies against financialinstitutions for the mis-selling ofinvestments and financial products.

It is also the case in Germany, where apost-global financial crisis decision byGermany’s Federal Supreme Courtattracted rather negative comments suchas: “the floodgates are open”. In thatcase, one of Germany’s major banks wasordered to pay damages to its customer,a medium-sized company, in a caseabout a CMS spread ladder swap. Thistriggered similar litigation against other

sellers of swaps and derivatives world-wide. The court found that the bank hadnot adequately disclosed the risks of thehighly complex financial instrument. TheGerman Federal Supreme Court went asfar as requesting banks selling suchproducts “to ensure that the customerhas basically the same understandingand knowledge about the transaction asthe advising bank”.

More financial institutions are now optingfor arbitration in the hope that tribunalswill enforce explicit contractual provisionsmore rigorously than state courts. Whilstarbitral tribunals are required to apply therelevant law, they are not bound to followstate courts’ judicial and statutoryinterpretations.

Since 2012, the Panel of RecognisedInternational Market Experts in Finance

Marie BerardClifford Chance,London

Tim SchreiberClifford Chance, Munich

Nish ShettyClifford Chance, Singapore

Authors

“Given the popularity of arbitration these days, it iseasier to look at sectors that have not yet fullyembraced arbitration rather than at sectors that have, asmost have. The primary hold out until recently has beenthe financial services sector. However, even that haschanged in the last few years, with more banks andfinancial institutions using arbitration provisions for theircross-border deals and the introduction of arbitrationprovisions in their standard form agreements.”

Nish ShettyClifford Chance, Singapore

“We are seeing an increasing interest in financial institution arbitration in the Germanmarket. If setting precedents was previously considered an advantage of litigation,this is no longer as crucial.”



(PRIME), which is based in The Hague,offers institutional arbitration servicesunder its own set of rules and provides aforum specifically tailored for theresolution of complex financial disputesinvolving instruments such as swaps andderivatives. Other developments, such asthe introduction of a set of arbitrationclauses for use with the 1992 and the2002 master agreements of theInternational Swaps and DerivativesAssociation (ISDA) show the increasedimportance of arbitration to the sectorand reflect ISDA’s own observation thatthere has been a surge in the inclusion ofarbitration clauses in specialist financialcontracts in recent years.

This is a very topical issue. A new taskforce has been mandated by the ICC topublish a report on “Financial Institutionsand International Arbitration”. ThreeClifford Chance partners: Marie Berard,

Cameron Hassall and Fabian vonSchlabrendorff have been selected totake part in this task force.

Financial institutions are increasinglyaware that arbitration can be the mosteffective way to resolve disputes – indeed,when it comes to the enforcement of anaward, it can be preferable to litigation.

Existing arbitration rules are sufficientlyflexible to accommodate the needs ofbanks and financial institutions. Manyrules now have emergency arbitratorsprovisions, allowing a bank to obtainurgent interim relief to prevent thedissipation of a borrower’s assets for

example. Financial institutions are regularusers of “unilateral option clauses”, givingthem (but not their counterparty) theoption to select between arbitration orlitigation after the dispute has arisen.These clauses are very popular but theirvalidity remains questionable in certainjurisdictions such as Russia, Poland,Romania, Bulgaria, Turkey and Thailand.Clifford Chance has compiled a survey ofthe validity of those clauses in over40 jurisdictions.

Marie Berard and Tim SchreiberClifford Chance, London and Munich

“The traditional reluctance that in part stemmed from theidea that arbitration was not suited for simple “one shotmoney disputes” is now long behind us in a financialworld that is far more complex than ever before. In theUK, it is especially the case following the shift in bankinglitigation post the 2008 financial crisis which has led toan increase in claims by individual investors andcorporate bodies against financial institutions for themis-selling of investments and financial products.”

Marie BerardClifford Chance, London



Investor-State DisputeResolutionStatistics issued by the United NationsConference on Trade and Development(UNCTAD) reveal that in 2013, 56 knownnew cases were filed by investors againststates pursuant to international investmenttreaties. Of those cases, a greaterproportion than ever have been filedagainst developed countries. Over 50% ofthe respondents hail from the EU.

There are also a number of significantmultilateral investment agreements, or so-called “megaregional” agreements beingnegotiated. The Trans-Pacific PartnershipAgreement (TPP), the Canada–EUComprehensive Economic and TradeAgreement (CETA) and the EU–UnitedStates Transatlantic Trade and InvestmentPartnership (TTIP) are all likely to have asignificant impact on trade flows oncethey are concluded. The provision forInvestor-State Dispute Settlement (ISDS)mechanisms within those agreementshas been hotly negotiated in each case –putting the topic of arbitration inmainstream news.

Australia’s free trade and investmenttreaty program seems to have revivedsomewhat since the change ingovernment in 2013. Most importantly,the Korea-Australia Free Trade Agreement(KAFTA) was signed late last year, andnow includes an investor-state arbitrationclause and Australia has had renewedengagement in negotiations for the TPP.

The TPP is currently being negotiatedbetween 12 countries: Australia, Brunei

Darussalam, Canada, Chile, Japan,Malaysia, Mexico, New Zealand, Peru,Singapore, the United States andVietnam. It will include major Australiantrading partners such as Japan and theUS, represent a total trade volume ofmore than USD 28 trillion and is likely toinclude an investor-state arbitrationclause. It appears likely that the TPP willbe signed sometime this year or earlynext. This will open up nationalityplanning (e.g. structuring the investmentto acquire treaty protection) and investor-state arbitration options to a whole rangeof businesses that are not traditionallyheavy users of the treaty system,

especially companies in the servicessector and manufacturing businesseswith trans-Pacific supply chains.

In the longer-term, the TPP is likely tohave a significant effect on arbitrationpractice in the region. Other recentlysigned investment agreements such asthe Association of Southeast AsianNations (ASEAN) ComprehensiveInvestment Agreement which took effecton 29 March 2012 and the ASEAN FreeTrade Agreements (FTAs) are likely tohave a similar effect.

“There is a seamless connection between the differentClifford Chance offices around the world working oninvestment arbitration. The TPP is likely to give rise to asignificant amount of investment arbitration work in HongKong and allow us to capitalise on the strength of theseconnections. At the front end, where banks makeinvestments in certain countries, they will need to use aninvestment vehicle that is in line with the TPP. At the backend, if an investment is subject to governmentinterference then an investor will rely on the TPP’s disputeresolution provisions. Already financial institutions in theregion have developed a sophisticated understanding ofinvestment treaty protections.”

Romesh WeeramantryClifford Chance, Hong Kong



Audley SheppardClifford Chance, London


Romesh Weeramantry Clifford Chance, Hong Kong

Jose Antonio CaínzosClifford Chance, Madrid

Authors

“One of the most significant recent developments for Spanish arbitration is Spain’sgrowth as a market for investment arbitration. Because of the GFC, the SpanishGovernment has amended much of the regulation concerning subsidies for renewableenergy tariffs. This has led foreign investors to bring claims against the Governmentunder the Energy Charter Treaty. Our work in this area demonstrates the strength ofour global arbitration team in cross-office collaboration.”

Jose Antonio CaínzosClifford Chance, Madrid

“In the medium term, another important issue will be whether the emerging markets ofAfrica remain sufficiently stable to continue their growth, and reach their full potential. Ifthey do, there is likely to be a significant increase in demand for investment protectionadvice from Australian and Asian investors, and not just in the energy andresources sectors.”


“In the aftermath of the Arab Spring, in the Middle East we have seen a growing trendin investment treaty arbitration, particularly involving Egypt and Libya. Disputes havearisen largely as a result of expropriation of assets by governments in transition. Thishas increased awareness amongst regional clients of alternative avenues of redress onwhat are often high value “trophy” projects.”

Graham Lovett Clifford Chance, Dubai





2. Rules and Institutions


There have recently been a number of important developments in rules, guidance andinstitutional procedure. The arbitration community is using rule-making to addresssignificant questions such as: Should the conduct of legal representatives beregulated? Should investment treaty arbitration be more transparent?

Many institutions have updated theirprocedural rules, most with an aim toincrease efficiency and useability formodern arbitration users. We look closelyat four of those institutions – the HongKong International Arbitration Centre(HKIAC), the Abu Dhabi CommercialConciliation and Arbitration Centre(ADCCAC), the London Court ofInternational Arbitration (LCIA) and theKorean Commercial Arbitration Board(KCAB). Along with new rules, newarbitration institutions have emerged. Oneof the youngest is the JerusalemArbitration Centre (JAC), which openedits doors on 18 November 2013.

EthicsArbitration should be a fair process –parties and their representatives shouldbehave in a way which promotes thisprinciple. In international arbitration,where lawyers qualify before nationalbars, and practise in the internationalarena, there are no clear common rulesgoverning their conduct. This potentiallyraises two issues of concern.

The first is that lawyers are free todeliberately and strategically useprocedural mechanisms that wereintended to safeguard the arbitral processas a way to derail or delay proceedings.Such behaviour might not be prohibited

by codes of conduct, but it may beunethical. A second issue is that lawyersqualified in different (and sometimesmultiple) jurisdictions, applying differentcodes of conduct risk, creating an unlevelplaying field for users of arbitration.Whether or not the coaching of witnessesis permissible is a well-known example.Currently, unless the tribunal sets outcertain ground rules of fair play at thestart of the arbitration, self-regulation isthe primary method of ensuring thatintegrity and fairness are not jeopardised.In other words, we expect lawyers to “dothe right thing”.

This year we have seen two notabledevelopments in this regard.

Firstly, the IBA’s Guidelines on PartyRepresentation in International Arbitrationintroduced in May 2013 provideguidance on issues such as ex partecommunications with the arbritraltribunal, the scope of documentproduction and include express powersfor the tribunal to remedy misconduct byparty representatives. These guidelinesare essentially voluntary since partiesmust opt-in to the regime and they havebeen met with a mixed response fromthe arbitration community. Someanticipate that these will follow thetrajectory of the IBA Rules on the Takingof Evidence in International Arbitration –

which are now widely adopted by partiesfor dealing with evidence gathering inarbitrations. Some would have likedthese guidelines to go further inmanaging the behaviour of counsel.Others still are strongly critical of thecontent of these guidelines and wouldnot encourage parties to use them. Bycontrast, the LCIA’s revised rules ofarbitration (effective 1 October 2014)include guidelines for parties’ legalrepresentatives. All legal representativesappearing by name in LCIA arbitrationsmust comply. The standard of conduct tomeet should not be particularlycontentious in most cases – no lying tothe tribunal, no fabricating of evidence,no concealment of documents and noundisclosed unilateral communicationswith the tribunal – and do not overridelawyers’ existing mandatory duties orapplicable codes of conduct. In aninnovative step, the rules expresslyempower the tribunal to enforcebreaches of the guidelines throughspecified sanctions. The jury is out – canand should good behaviour be moreformally regulated – or can users trustthe tribunal to use their inherent powersto manage counsel conduct? Debate islikely to continue.



TransparencyThe “UNCITRAL Rules on Transparencyin Treaty-based Investor-State Arbitration”(the Rules) promulgated by the UnitedNations Commission on InternationalTrade Law (UNCITRAL) came into effecton 1 April 2014 and are intended toaddress long-voiced concerns (principallyby Non-Governmental Organisations)regarding the lack of transparency intreaty-based arbitration proceedingsinvolving states.

On their face, the calls for greatertransparency and public access inherentlyconflict with the notion of confidentiality inarbitral proceedings. The Rules attempt,therefore, to strike a balance betweenthese two competing considerations.Whilst they allow members of the publicaccess to documents and hearings inUNCITRAL arbitrations, this is subject toexceptions designed to protectconfidential information and the integrity ofthe arbitral process.

In the absence of specific agreement(either of the parties to any treaty disputeor of the parties to a treaty concludedbefore 1 April 2014), the Rules will fornow, apply only to treaties concluded onor after 1 April 2014 (unless parties agreeto exclude the Rules).

However, in July 2014, a draft‘Convention on Transparency’ wasapproved by UNCITRAL. The Conventionprovides for the application of the Rulesto existing treaties entered into by any

signatory states, not just those enteredinto after the effective date. TheConvention is expected to be ready forsignature in March 2015. If theConvention does come into force, publicpressure will likely lead to a number ofstates agreeing to its terms. Similarly, it ishard to imagine many states agreeing toopt out of the Rules in treaties enteredinto after 1 April 2014.

It remains to be seen to what extentstates adopt the Rules voluntarily – notleast because the application of theserules is likely to generate additional costs.As far as investor parties are concerned,they may wish to use the Rules as thisgives them a tactical benefit (for example,the ability to use any publicity to applypressure on the relevant state). Otherwise,if the treaty allows the investor to choosebetween multiple types of arbitration,there may be good reasons for electingdifferent rules such as those of the ICC oranother international institution.

Jason FryClifford Chance, Paris

HKIAC RulesHKIAC is one of the foremost venues forarbitration. In 2013, the number ofdispute resolution matters totalled 463.The total amount in dispute in 2013 wasUS$2 billion.

The Centre’s new rules came into forceon 1 November 2013. Like the rules of

the ICC, Singapore InternationalArbitration Centre (SIAC), StockholmChamber of Commerce (SCC) and LCIA,these rules also contain an emergencyarbitrator mechanism which allows for theappointment of a temporary arbitratorbefore a tribunal is constituted. HKIACwill appoint an emergency arbitratorwithin two days of one of the partiesmaking an application. The emergencyarbitrator is expected to make any order,award or decision within 15 days of theHKIAC receiving the file.

By appointing an emergency arbitrator,the parties agree to recognise the validityof any decision reached by sucharbitrator. Whilst there is yet to be a testcase on a decision of an HKIACemergency arbitrator, this development iswidely regarded as positive.

The HKIAC Rules also streamline theprocesses for joinder of third parties andgive the HKIAC the power to consolidateproceedings, even where the parties andarbitrators may be different in theseparate proceedings. More recently, theHKIAC model clause has been updatedto ensure certainty as to the law that willapply to the arbitration agreement.Traditionally, this has not been specified inmodel clauses.

Kathryn SangerClifford Chance, Hong Kong



Jason FryClifford Chance,Paris

Kathryn SangerClifford Chance, Hong Kong

Authors



ADCCAC RulesFor the first time in 20 years, ADCCAChas updated its arbitration rules, bringingthem into line with accepted internationalpractice. The ADCCAC Rules draw on anumber of sources, including theUNCITRAL Rules, and bear considerablymore resemblance to the rules of otherinternational arbitral institutions than theirpredecessors. This should serve toincrease the appeal of ADCCAC as anarbitral institution. The ADCCAC Rulestook effect on 20 October 2013 andapply to all ADCCAC arbitrations fromthat date – regardless of whenproceedings were commenced –replacing the provisions contained in theProcedural Regulation on CommercialConciliation and Arbitration.

The new ADCCAC Rules contain anumber of significant new provisions,including express confidentialityobligations, rules for determining the seatof arbitration and applicable law and ruleson the granting of interim relief.

James AbbottClifford Chance, UAE

LCIA RulesThe LCIA remains one of the busiestinternational arbitration institutionsglobally. In 2013, 301 disputes werereferred to for consideration under theLCIA Rules (as compared to 767 for the

ICC, 259 for SIAC and 203 for the SCCin the same year). Across the world,international arbitration institutions haveimplemented changes that tackle keyissues facing arbitral procedure includingefficiency and integrity – for example,many now include mechanisms fordealing with multiparty arbitration.

The newest LCIA Rules (2014 Rules) havealso addressed these issues. The LCIARules already allowed for the formation ofthe tribunal on an expedited basis, andnow include other mechanisms aimed atincreasing procedural efficiency. Theseinclude electronic filing of the request andresponse and cost sanctions foruncooperative behaviour of the partieswhich causes delay. As for multipartyissues, the tribunal may orderconsolidation without all parties’ consentin certain cases (at a party’s request andwith the LCIA Court’s approval). In limitedcircumstances, before any tribunal hasbeen appointed, the LCIA Court hassimilar (albeit slightly narrower) powers.

Along with the guidelines for parties’ legalrepresentatives, the 2014 Rules includean emergency arbitrator mechanismwhich is designed to provide relief toparties on a temporary basis before thetribunal is appointed. Whilst a number ofother rules now contain this mechanism,it is relatively untested and it remains tobe seen how much it will be used.

The LCIA Rules date back to 1998 andtherefore there is a myriad of amendments

that seek to modernise the rules and toclarify points that have arisen from yearsof LCIA practice. The resulting 2014 Rulesprovide a comprehensive and modernbasis for users of LCIA arbitration in the21st century.

Robert LambertClifford Chance, London

KCAB RulesIn 2011, the KCAB updated itsInternational Rules to better cater forinternational users. Until this update,most arbitrations – domestic andinternational – were conducted underKCAB’s Domestic Rules, which were ill-suited to international arbitration as theyreflected Korean court procedure.

Most importantly, the new InternationalRules provide that they are the defaultrules if one of the parties to the arbitrationagreement is non-Korean. Further, theyincorporate expedited procedures andallow for higher fees for arbitrators toattract a wider pool of internationaltribunal members.

However, the International Rules now looksomewhat dated as other institutions suchas HKIAC, SIAC, and Japan CommercialArbitration Association (JCAA) haverevamped their rules to better cater foremergency arbitrators, interim relief,expedited proceedings and multi-partyarbitration. The KCAB currently has aworking group looking at how best to

James Abbott Clifford Chance, Dubai

Thomas WalshClifford Chance,Seoul

Simon GreenbergClifford Chance,Paris

Authors

Robert LambertClifford Chance,London


update the International Rules andconsidering whether Korea should alsoadopt similar provisions.

Thomas WalshClifford Chance, Seoul

New Regional ArbitrationInstitutionsThe JAC was established to providearbitration services for disputes related toIsrael, The West Bank, Gaza and EastJerusalem.

A joint venture of ICC Israel and ICCPalestine, the JAC will be recognised byjudicial authorities, and its awardsenforceable, in both Israel and Palestine.The JAC Rules are an adapted version ofthe ICC Rules and the JAC managementteam has been trained by the ICC.

The JAC seeks in the long term toprovide a forum for neutral, effective andefficient dispute resolution.

The JAC Court is comprised of ninemembers, two of which will be appointed

by Israel and two by Palestine. SimonGreenberg is a member of theJAC Court.

Simon GreenbergClifford Chance, Paris





3. Regional Attitudes towardsInternational Arbitration

In general, states’ attitudes to international commercial arbitration remain favourable. Theenforcement benefits of arbitration remain an overriding reason for states to promotethemselves as arbitration-friendly and, therefore, enforcement-friendly jurisdictions. This isreflected in recent reforms to arbitration laws in a number of jurisdictions includingAustralia, the Netherlands and Dubai whilst discussion of reform is taking place in othercountries including India, Brazil, and Myanmar. On 26 June 2014, the President of theDemocratic Republic of the Congo authorised the accession of the DRC to theConvention on the Recognition and Enforcement of Foreign Arbitral Awards (the NewYork Convention). A number of other states have also recently acceded to the New YorkConvention, with Burundi becoming the 150th signatory to the Convention, and Bhutanand Guyana the 151st and 152nd. Attitudes towards investment treaty arbitration aremore varied. Key developments from several jurisdictions are discussed in this section.


The AmericasAcross Central and Latin America, mostcountries are developing an environmentconducive to international commercialarbitration. This drive has now beenconsolidated and countries in this region,as with many others, now use theUNCITRAL Model Law as a template.Enforcement of awards has become easierin recent years, notably in Peru, Colombia,Chile and Mexico. Colombia and Paraguayhave recently passed legislation to providefor arbitration as a means of fosteringinvestment in infrastructure.

In Central and Latin America, there areinteresting trends relating to investmenttreaty arbitration. On the one hand youhave a group of countries signing tradetreaties and looking at legal mechanismsaimed at promoting investment. To someextent certain countries includingColombia, Mexico, Peru and Chile

appear to be open to using investmentarbitration as a meaningful way toaddress and manage political risk – withthese last three countries all engaging inthe TPP talks through the Pacific Allianceformed in 2012.

On the other hand, countries such asEcuador, Bolivia and Venezuela take a verydifferent stance, perhaps best illustrated bythe fact that each of these countries hasdenounced the Convention on theSettlement of Investment Disputesbetween states and nationals of Otherstates (ICSID Convention), which providesa robust regime for the enforcement ofarbitral awards concerning investmentprotection issued under the ICSIDConvention. Interestingly, Argentina hasrecently voluntarily complied with andsettled some five treaty awards madeagainst it. Whilst it is no longer entering intonew bilateral investment treaties, Argentina

is not a recalcitrant nation and, unlike someof its South American neighbours, remainsa signatory to the ICSID Convention.Brazil’s position in this debate hasremained fairly static. Brazil did not start offwith an investment treaty model, since itwas able to attract Foreign DirectInvestment without the need for treatiespromoting investment; there do not appearto be any signs of that position changing.

Ignacio Suarez AnzorenaClifford Chance, Washington DC

North AmericaOn 5 March 2014 the US Supreme Courtdecided its first investment treaty case:BG Group PLC v. Republic of Argentina.The case related to the enforcement of anUNCITRAL award rendered under theArgentina-UK bilateral investment treaty(BIT), pursuant to which investors weresupposed to litigate before local courts for18 months before resorting to

“DRC will soon become aparty to the New YorkConvention”

“To some extent certain countries including Colombia,Mexico, Peru, and Chile appear to be open to usinginvestment arbitration as a meaningful way to addressand manage political risk…”


international arbitration. Although theclaimant did not comply with thedomestic litigation requirement, the arbitraltribunal found that it had jurisdiction toentertain the dispute. The Supreme Courtdecided that an enforcing court shoulddefer to the arbitrator’s decision regardingsaid domestic litigation requirements. In asplit decision, the court appliedcommercial arbitration principles thatprocedural preconditions should bedecided by the arbitrators, and thereforecould not be reviewed by an enforcingcourt. The dissent on the other hand,considered that according to internationallaw principles, consent should bedetermined on the basis of the treaty.Nevertheless, the Supreme Courtoverturned the lower court’s decision andgave leave for the award to be enforced.

Ignacio Suarez AnzorenaClifford Chance, Washington DC

EuropeLondonLondon continues to operate as a safejurisdiction for international arbitration.There has been little by way of legislativedevelopments in the country for sometime. As such, the arbitration climate isbest tested by the response of the court.The courts continue to support arbitralproceedings by intervening in arbitrationproceedings only where necessary toassist those proceedings and maintainthe integrity of arbitration. This year, we

have seen a number of enforcementdecisions in the courts. A good exampleof a pro-enforcement case was therecent case of Lombard Knight v.Rainstorm Pictures2 where the Court ofAppeal made clear that the English courtswill enforce foreign arbitral awards unlessthere are serious grounds affecting thevalidity of the award. Mere formalities arenot enough to thwart an otherwiseenforceable award. In this case, the Courtof Appeal granted an application toenforce an award even though the copiesof the arbitration agreement submittedwith the claim form were not certified (asrequired by the New York Convention andthe English Arbitration Act 1996).


The NetherlandsIn May 2014, the Dutch Parliamentapproved new arbitration legislation. Thenew Act brings Dutch arbitration law in linewith the UNCITRAL Model Law 2006 andaffords both tribunals and parties greaterflexibility in determining arbitral procedure.The legislation includes provisions on theconsolidation of arbitrations, newprocesses regarding interim measures andthe shortening of the process to set asideawards. Setting aside applications will nolonger be made through the District Courtbut will go straight to the Court of Appeal.There are also proposals to limit the lengthof enforcement proceedings for foreignarbitral awards and for the Dutch state

court to assist in foreign arbitrationproceedings. In addition, the legislationseeks to limit the ability of a state or stateentity to invoke national law to avoid anarbitration agreement. The legislation isexpected to come into force on 1 January2015, with Dutch arbitral institutionsexpected to update their rules in order toreflect these developments.

Jeroen Ouwehand and Juliette LuycksClifford Chance, Amsterdam


2 [2014] EWCA Civ 356 (Tomlinson L.J., Ryder L.J. ,Christopher Clarke L.J.)

Ignacio SuarezClifford Chance,Washington DC

Alex PanayidesClifford Chance,London

Jeroen Ouwehand Clifford Chance,Amsterdam

Juliette LuycksClifford Chance, Amsterdam

Authors



Germany

Arbitration proceedings seated in Germanyare mirroring international standards anddevelopments, with rising complexity andcost. This has resulted in a real focuswithin the German arbitration communityon proposals for cost saving. Professionalbodies like the The German Institution ofArbitration (DIS) are offering rules forexpedited proceedings and areincreasingly promoting means foralternative dispute resolution like mediationand expert determination. The “front-loading” of arbitration proceedings withearly questions and directions on behalf ofthe arbitral tribunal is a common habit ofGerman arbitrators, and it helps toenhance efficiency by identifying therelevant issues before large submissionsand lengthy hearings cause avoidabledelays. The tendency to limit documentproduction, for which German practitionersare known as well, is another example.


FranceWhat distinguishes Paris from any otherseat in the world is not only theunparalleled pro-arbitration stance of thelaw and courts but also the internationalexperience of firms located there. Updatesmade to French arbitration legislation in2011 have only served to confirm the pre-eminence of Paris as a seat. The Frenchcourts remain sensitive to theindependence of arbitrators, including their

right to decide on their own jurisdiction.Similarly, the courts will only rarely intervenein arbitral proceedings, in order to supportthe arbitral process where internationallyrecognised standards of due process arecontravened. The reliability of Frenchsupport for arbitration means that the largenumber of cases seated in Paris each yearoften have absolutely no connection toFrance and apply a wide variety of laws.Perhaps more importantly, practitioners inParis regularly act in arbitrations seatedoutside Paris and indeed all over the world.

This year, the much publicised Tapie Affairhas seen the head of the IMF, ChristineLagarde, face further questioning in theFrench courts over the decision to refer afraud claim by a French politician againstCrédit Lyonnais, a previously state-ownedFrench bank, to an arbitral tribunal ratherthan to the courts. However, whilst theTapie Affair has undoubtedly raisedawareness in the French public’s mind asto the nature of arbitration, this does notseem to have dented the popularity ofFrance as an arbitration venueinternationally. The ICC, based in Paris,has historically been the most popularinstitution in the world for internationalarbitration and this trend has continued inrecent years. The 767 Requests for

Arbitration filed with the ICC Court in2013 concerned 2,120 parties from 138countries and independent territories.

In June 2014, the Cour de Cassationquashed a controversial decision that hadset aside an ICC award on liability as aresult of doubt about the independenceof the chairman, Sigvard Jarvin. The courtconfirmed that parties to an ICC disputeare bound by the institution’s rules in theirentirety and not selectively. Specifically,the party wishing to challenge Jarvin’srole as tribunal chairman had failed tobring a challenge within the periodprescribed by the ICC Rules. The casewill now return to the lower courts to beheard by different judges, so this will notbe the last we hear of this saga.

There remains a strong appetite foralternative dispute resolution withinFrench corporate clients (especially intimes of economic crisis and restrictedlitigation and arbitration budgets). Thisincludes both arbitration and commercialmediation. Mediation, however, has beenslower to take off than in somejurisdictions because of a feeling amongFrench corporate clients that if they arenot able to negotiate a solution, then amediator will not be able to help. Theremay be an apprehension that mediators

“The reliability of French support for arbitration meansthat the large number of cases seated in Paris eachyear often have absolutely no connection to Franceand apply a wide variety of laws.”


Jason FryClifford Chance, Paris

Simon GreenbergClifford Chance, Paris

Bartosz KruzewskiClifford Chance, Warsaw

Authors


are insufficiently trained to steercommercial disputes of an internationalreach to a satisfactory outcome.

Nevertheless, France has made a greatleap forward in promotingcommercial mediation.

Jason Fry and Simon GreenbergClifford Chance, Paris

PolandDraft consultation on the inapplicability ofarbitration clauses triggered by insolvency

By virtue of Articles 142 and 147 of thePolish Bankruptcy and Reorganisation Law,Polish law at present dictates that arbitrationagreements become invalid when a partydeclares insolvency. This was relied on in themuch-publicised Elektrim case, in which theSwiss Supreme Court declared an arbitration

agreement to be invalid as a consequence ofArticle 142 (disagreeing with the UKSupreme Court). The Polish Government iscurrently undertaking a draft consultation onwhether to delete or change this provision.We hope for an outcome that will be lessonerous than the current state of play.

ICC arbitration clauses struck out of Polishlaw FIDIC contracts

A development that is of some concern inPoland is the Government’s decision tostrike out ICC arbitration clauses fromFederation of Consulting Engineers (FIDIC)contracts made under Polish Law.

Dealing with complex construction disputesputs considerable pressure on the courts,owing to the volume of documents typicallyinvolved and the depth of expertise required.

By international standards, FIDICcontracts go hand in hand with arbitrationclauses (as a means of disputeresolution). The fact that this is no longerthe case in Poland is bad for theeconomy. Any bottleneck in the resolutionof FIDIC contract disputes will delay cashflows between developers, contractorsand subcontractors. It is exactly this kindof delay that gives rise to insolvency,which we have recently seen more of and,as discussed above, carries its ownissues for arbitration agreements. Giventhe amount of potential that Poland hasfor further investment in infrastructure, it isimportant that we also have a legalframework that supports such growth. Inmy capacity as Chairman of theArbitration Committee of the ICC in

Poland, there have been efforts to engagethe Government in a dialogue on this butso far to no avail. The second half of thisyear is seeing a second wave of efforts.

Bartosz KruzewskiClifford Chance, Warsaw

RomaniaIn Romania, new Arbitration Rules wereapproved recently by the Court ofInternational Commercial Arbitration(together with new arbitration rules of theRomanian Chamber of Commerce andIndustry). In the last few years, importantlegislative changes have taken place, suchas the adoption of a new Civil ProcedureCode in February 2013. This sets out thegeneral framework for arbitrationprocedures in Romania. The newArbitration Rules of the Court ofInternational Commercial Arbitrationtherefore mark an important stage in thedevelopment and recognition of Romanianarbitration at an international level.

Such changes have been made with aview to strengthening the practice ofarbitration in Romania, which had beenneglected in recent years. Such attractivenew regulations should help to develop theuse of arbitration in Romania. Nevertheless,there remain a significant number ofarbitration proceedings involving Romaniancounterparties, filed with the ICC, LCIA orother more established international courtsof arbitration.

Vlad PeligradClifford Chance, Bucharest


Vlad PeligradClifford Chance, Bucharest

Timur Aitkulov Clifford Chance, Moscow

Julia PopelyshevaClifford Chance, Moscow

Authors


Recent highlights include:

n The implementation, in 2012, of theEU Directive on contractualmediation (Directive 2008/52/EC onCertain Aspects of Mediation inCivil and Commercial Matters,dated May 2008)

n The Paris Bar’s decision to mark2013 as “the year of mediation”, withthe aim of developing accreditedtraining for lawyers as mediators

n Favourable case law by the FrenchSupreme Court (Cour deCassation), which bolstered theefficiency of mediation clauses



RussiaIt is widely accepted that the standing ofarbitration in Russia is currently far fromideal. In the last decade we have seenmany Russia-related disputes beingresolved by arbitration outside theRussian Federation. This has included‘purely Russian’ disputes, where bothparties are directly or indirectly Russian.There are two main reasons for this. Thefirst relates to the rule of law in theRussian Federation; the second has itsroots in the sophistication of internationalarbitration at a global level and, ingeneral, increased demand for this formof dispute resolution amongst Russianclients. Recent sanctions against speciallydesignated entities in the RussianFederation will only contribute to thedevelopment of international arbitration inthe country.

That said, steps are being taken toimprove the arbitration climate, with thenewly created Russian ArbitrationAssociation (RAA) leading the way. RAA-assisted arbitration proceedings shouldbe similar to arbitration under any of theleading international arbitral institutions.Assuming that the RAA manages tostreamline its institutional costs, it shouldbe able to attract the best foreign andRussian arbitrators, whom the parties

believe to be best placed for a particularcase. A tribunal with prior exposure to thebest practices of the leading internationalinstitutions is likely, together with theparties, to conform to such practices andnorms. In addition, the RAA allows forflexibility in terms of the seat ofarbitration: parties are free to agree on avenue outside the Russian Federation,should they prefer.

Timur Aitkulov and Julia PopelyshevaClifford Chance, Moscow

The Middle East: UnitedArab EmiratesAcross the Middle East, the increase inthe use of arbitration (both domestic andinternational) as a method of resolvingdisputes can be tied to the emergence ofnew arbitral institutions, and newlegislation in the Gulf over the last tenyears. Since 2006, all the Gulf countriesare party to the New York Conventionand across the region we have seen theemergence of new arbitral institutions, theintroduction of “arbitration friendly”

common law courts and – depending onthe jurisdiction – either new or amendedarbitration legislation. Leading the wayhave been:

n the UAE – Dubai InternationalArbitration Centre, Dubai InternationalFinancial Centre – LCIA (DIFC-LCIA),and the new ADCCAC Rules.

n Qatar – the Qatar Financial Centre(QFC) Arbitration Regulations.

n Bahrain – the Bahrain Chamber forDispute Resolution (BCDRAAA).

The practical impact of these initiatives onour clients has been substantial. Forexample, clients are increasingly selectingthe QFC in Doha and the DIFC in Dubaias a seat of arbitration in commercialcontracts. The Dubai InternationalFinancial Centre recently enacted theArbitration Amendment Law, No. 6 of2013 which brings DIFC law in line withthe New York Convention. Historically theMiddle East and Gulf region has attractedarbitrations in the construction and oiland gas sectors. This remains the casebut the volumes of these disputes havedecreased from the high levels of 2008-2010. Such instructions have beenreplaced by joint venture disputes and, aswith our other offices, the increased useof arbitration by financial institutions.

Graham LovettClifford Chance, UAE

“…steps are being taken to improve the arbitrationclimate, with the newly created Russian ArbitrationAssociation (RAA) leading the way.”


AfricaIn 2009, Justice O’Regan, formerly ajudge of the Constitutional Court of SouthAfrica, called for an increase in support ofarbitration in Africa saying that: “we needto bear in mind that litigation beforeordinary courts can be a rigid, costly andtime consuming process and that it is notinconsistent with our constitutional valuesto permit parties to seek a quicker andcheaper mechanism for the resolution ofdisputes.”3 While it is difficult to makegeneralisations about the Continent,Africa is responding to that call. The NewYork Convention came into force inBurundi on September 2014 and willlikely enter into force in the DemocraticRepublic of Congo soon. African markets,traditionally perceived by foreign investorsas problematic, are now lookingincreasingly attractive.

The Cairo Regional Centre forInternational Commercial Arbitration goesfrom strength to strength – by the end of2012, 862 cases had been filed with theinstitution (with a huge burst of activity inlate 2011). Mauritius has also beendeveloping itself as an arbitration-friendlyjurisdiction. Set up in 2011, LCIA-MIAC (ajoint venture between the LCIA and theGovernment of Mauritius) aims to be thego-to place for Africa-related arbitration.Most recently, in May 2014, the Kigali

Arbitration Centre in Rwanda held itssecond arbitration conference whichdrew over 150 professionals from over18 countries to discuss the way in whichKigali can be developed as a regionalseat for arbitration.

Although pro-arbitration decisions of thecourts cannot be taken for granted, wehave seen increasingly encouragingenforcement decisions coming from theNigerian courts4 and Mauritius recentlyissued its first pro-arbitration decisionunder the New York Convention.5


Asia-Pacific

AustraliaAustralia is now a Model Law federation.This development together withUNCITRAL is particularly important whenwe consider that Asia has the highestconcentration of Model Law states of any

region in the world. As a result of theseharmonisation efforts, we are seeingState and Federal courts in Australia takenot just a pro-arbitration approach, butan increasingly internationalist approachto arbitration cases. For example, wherereference to foreign jurisprudence used tobe largely limited to English cases, wenow see references to the decisions ofcourts from a range of Model Law states(e.g. Singapore). This internationalisttrend is especially visible in relation tojudicial assistance for arbitral proceedingsand the enforcement and recognition ofarbitral awards.

While we are yet to see the full impact ofthe introduction of the Model Law inAustralia, the harmonisation across theregion makes it easier for our lawyers towork on arbitrations seated in Hong Kongand Singapore, where the Model Law isalso in force. Our Australian arbitrationteam is highly mobile, and cross-jurisdiction teams are now the norm forour arbitration practice.


“Mauritius has also been developing itself as anarbitration-friendly jurisdiction. Set up in 2011,LCIA-MIAC (a joint venture between the LCIA and theGovernment Mauritius) aims to be the go-to place forAfrica-related arbitration.”

3 Lufuno Mphaphuili & Associates v Nigel Athol Andrews and Bopanang Construction, Case CCT 97/07[2009] ZACC 6, para. 197.

4 Nigerian Agip Exploration v. Nigerian National Petroleum Corp [2014].5 Cruz City 1 Mauritius Holdings v Unitech Ltd and others [2014] SCJ 100.


Ben Luscombe Clifford Chance, Perth


Cameron HassallClifford Chance, Hong Kong

Authors



A particular area of growth for Australianlawyers is gas price arbitration work,where Australian lawyers have relevantand exportable oil and gas expertise andare used to working closely with energyspecialists on pricing formulae.

Ben Luscombe and Sam LuttrellClifford Chance, Perth

Mainland ChinaThe new leadership in Beijing haslaunched a strong campaign againstjudicial corruption, with reforms focusingon the independence of local courts fromlocal government. The court system istherefore expected to become moreefficient, transparent and impartial in thenear future, which may furtherincrease the ease of enforcement offoreign awards.

The huge overseas investment made byChinese companies in the last few yearshas brought with it an increasing numberof offshore disputes. Transactions inemerging markets continue to facechallenges caused by political instabilityand national protectionism in thosejurisdictions. However, since Chinesecompanies are increasingly aware ofarbitration as a means of supporting andprotecting their overseas investments, weexpect to see arbitration used more andmore in the coming years. In particular,the court’s recognition of internationalarbitral awards under the New YorkConvention has steadily improved overthe last two decades. The Chinese courtsrefuse enforcement only in exceptionalcircumstances and refusals on publicpolicy grounds have become increasinglyuncommon. According to a senior judge,parties sought to enforce possiblyhundreds of foreign awards in Chinabetween 2010 and 2012. Of theseawards, the courts refused to recogniseand enforce just seven. These sevenwere among twenty-seven foreign awardsreferred to the Supreme People’s Courtby lower courts that had initially refused

enforcement. Nevertheless, the speedwith which a foreign award can beenforced in China (if at all) can still provefrustrating in practice.

Also, Amendments to the Civil ProceduralLaw in 2012 (the Amended CPL)expanded the scope of interim injunctionsfrom IP litigation to all types of civillitigation and commercial arbitration.Interim relief is now available prior to thecommencement of arbitrationproceedings. However the actualapplication and enforceability ofinterim injunctions are yet to be testedin practice.

In addition, whilst the Amended CPL isnot clear-cut on this point, it is likely thatsuch pre-arbitration interim measuresremain available only to support onshoreas opposed to offshore arbitrations.

Cameron HassallClifford Chance, Hong Kong

Hong KongIn 2011, Hong Kong completelyoverhauled its Arbitration Ordinance,which is now based on the UNCITRALModel Law. The Arbitration Ordinanceabolishes the distinction betweendomestic and international arbitration,limits the ability of the courts to intervenein arbitral proceedings and allowstribunals to order interim measures. Italso makes express provision for“arb-med” (where an arbitrator sits as amediator once arbitral proceedings onthe same dispute have beencommenced). Features of the old regimefor domestic arbitration remain in placethrough a series of ‘opt-in’ provisions,however these must be expresslyadopted in an arbitration agreement.These changes to the ArbitrationOrdinance reflect Hong Kong’spro-arbitration and internationalistapproach to arbitration.

Romesh WeeramantryClifford Chance, Hong Kong

SingaporeThe primary positive trend in Singapore isits development as a hub for disputeresolution. We are seeing an increase innot only the volume of arbitrationscoming out of Singapore but also thevalue of those arbitrations, with a S$3.5billion claim in 2013 being the highestvalue claim ever filed at the SIAC. Thereis a very strong international flavour to thecases coming out of Singapore, withSIAC becoming the centre of choice forSouth East Asian arbitrations (of the 239cases filed at SIAC in 2013, 59% involvedparties from South and South East Asia).As the region develops and attracts moreinternational trade, and users ofarbitration in Singapore become moreinternational, the capabilities of our globalarbitration team and the ability to workseamlessly across our network willbecome all the more relevant.

As far as local institutions are concerned,SIAC is now ranked among the world’sleading arbitral bodies, with over 20 yearsof experience. SIAC is known for being avery proactive institution. For example, ithas administered more emergencyarbitration applications than any otherinstitution. SIAC’s expedited arbitrationprocess is also proving to be verypopular with clients primarily concernedwith resolving their disputes as quicklyand efficiently as possible. Its impressiveinternational panel of arbitrators offersexpertise across all sectors. SIAC’s newgoverning structure, announced in 2013,and streamlined court structure will alsobring benefits to users.

Singapore’s success as a jurisdiction forarbitration is in large part due to theopenly pro-arbitration stance taken by thejudiciary and, indeed, the Government.Singaporean legislators are quick torespond to any need for change and assuch, amendments are made on a fairlyregular basis. The latest change camelast year when the InternationalArbitration Act was amended further tobring it in line with the latest


developments in the internationalarbitration world. The speed andefficiency with which any deficiencies inarbitration-related legislation areaddressed is, in our opinion, unmatched.

Nish Shetty and Paul SandoshamClifford Chance, Singapore

KoreaKorean parties have, for quite some timenow, embraced international arbitration asa method of resolving internationaldisputes. In part this can be traced backto the international investors who acquiredSouth Korean assets in the Asian financialcrisis of 1997 to 1999, insisting thatarbitration clauses be included in theirpurchase agreements. However, it alsoreflects the outbound nature of theeconomy and its focus on sectors suchas shipbuilding, international constructionand electronics which typically rely onarbitration to resolve disputes.

More recently, and with an eye on thesuccess of Hong Kong and Singapore ashubs for international arbitration, Koreahas sought to position itself as acompetitor to those jurisdictions as a seatfor international arbitrations. This has beenlinked to and helped by the KoreanGovernment entering into a number ofbilateral and multilateral free trade treaties,with the most important being the Korea-United States Free Trade Agreement andthe Korea-European Union Free TradeAgreement in 2011 which have also

enabled the liberalisation of the legalmarket with over twenty international lawfirms opening offices in Seoul since 2012.

To this end, in 2013, the KCAB, inconjunction with the Ministry of Justice,the Korean Bar Association and the SeoulMetropolitan Government, opened theSeoul International Dispute ResolutionCenter (Seoul IDRC) in Seoul’s centralbusiness district. The Seoul IDRC seeksto emulate the success of MaxwellChambers in Singapore and the ICC,HKIAC, SIAC and The AmericanArbitration Association (AAA), TheInternational Centre for Dispute Resolution(ICDR) have all set up liaison offices there.There are also a number of workingparties discussing revisions to both theKorean Arbitration Act (1999) and theKCAB’s International Rules. In respect ofthe Korean Arbitration Act, the focus is onupdating it from the Model Law 1985 inaccordance with the amendmentsintroduced by the Model Law 2006. Inrelation to the KCAB’s International Rules,

as well as a number of stylistic andlinguistic changes, there is an ongoingdebate on whether to include equivalentemergency arbitrator, joinder andconsolidation provisions that are found inmore cutting-edge rules such as thosepublished by HKIAC or SIAC.

Nonetheless, there are a number ofchallenges to Korea becoming a favouredseat for international arbitration. Theseinclude the fact that the Korean courtshave recently refused to enforce severalarbitral awards on grounds that have beencriticised as being ‘anti-arbitration’.Further, there is no official translation ofthe Korean Arbitration Act or the relevantcivil procedures and Korean courtsproceedings are generally opaque to non-Korean parties as they are conductedsolely in Korean. This contrasts with themore accessible courts in Hong Kong andSingapore and their avowedly pro-arbitration stance.

However, irrespective of whether partiesstart choosing Seoul as a seat, it is clear


“More recently, and with an eye on the success of HongKong and Singapore as hubs for international arbitration,Korea has sought to position itself as a competitor tothose jurisdictions as a seat for international arbitrations.This has been linked to and helped by the KoreanGovernment entering into a number of bilateral andmultilateral free trade treaties…”

Romesh Weeramantry Clifford Chance, Hong Kong

Nish Shetty Clifford Chance, Singapore

Paul SandoshamClifford Chance, Singapore

Thomas WalshClifford Chance, Seoul

Authors



that we will see an increasing number ofKorean users of international arbitration. Inparticular, due to the rise of demand forinfrastructure and energy projects and theinvolvement of Korean constructioncompanies in the respective projects, thedemand for arbitration work involvingthese companies is likely to increase.

Korean construction companies areinvolved in projects all over the world, asdemand for infrastructure and energyprojects grows from emerging economies.This is likely to trigger a greater demandfor arbitration work. A concern for clientsin emerging economies is cash flow andthe regulation of payments. Cash flow isthe lifeblood of the construction industryand clients are increasingly conscious ofthis from the outset of a dispute. Clientsare no longer focussed on the merits of acase alone. The question often raised is,what are the chances of obtaining afavourable award and, if so, can weenforce the award in anappropriate jurisdiction?

Paul SandoshamClifford Chance, Singapore Thomas WalshClifford Chance, Seoul

IndiaA string of pro-arbitration casesrecognise the need for respect and theindependence of the arbitral process.This trend is significant to our Singaporepractice since Indian clients are alreadythe biggest users of Singapore as a seatof arbitration.

Underpinning this trend are the decisionof the Supreme Court of India in BharatAluminium Co v. Kaiser AluminiumTechnical Services, various decisions ofthe Mumbai High Court, including that inHSBC PI Holdings (Mauritius) Ltd vAvitel Post Studioz Ltd,* and the decisionof the Supreme Court of India in WorldSport Group (Mauritius) Ltd v MSMSatellite (Singapore) Ltd. In the lattercases, the courts held that issues offraud should properly be dealt with bythe arbitral tribunal in accordance withthe arbitration agreement entered intobetween the parties, and not by thecourts. This departed from an earliercontroversial line of authority in Indiawhich had held otherwise.

It remains too early for us to say that thistrend has percolated across the entireIndian sub-continent but the earlyindications are extremely positive.

The Law Commission of India hasrecently proposed significantamendments to the Arbitration &Conciliation Act 1996. The proposalsseek to encourage institutional arbitrationin India (including the use of emergencyarbitrators), reduce delays before theIndian courts, tighten the provisionsregarding the setting aside of awards,and bring Indian law in line with theUNCITRAL Model Law. The proposals arecurrently under consideration by theMinistry of Law and Justice.

IndonesiaIndonesia has announced that it will notrenew its bilateral investment treaty withthe Netherlands as of 1 July 2015. It isreported that Indonesia plans to notrenew all of its bilateral investmenttreaties. Investors should considerstructuring their investments to acquirethe protection of multilateral investmenttreaties to which Indonesia is a party,such as the ASEAN ComprehensiveInvestment Agreement.

India – “A string of pro-arbitration cases recognise theneed for respect of, and the independence of the arbitralprocess. This trend is significant to our Singaporepractice since Indian clients are already the biggestusers of Singapore as a seat of arbitration.”

“Indonesia has announcedthat it will terminate itsbilateral investment treatywith the Netherlands as of1 July 2015.”


* Clifford Chance acted for HSBC PI (Mauritius) Holdings and instructed local counsel to appear on its behalf before the Mumbai High Court in HSBC PI Holdings(Mauritius) Ltd v Avitel Post Studioz Ltd.)

4. Global Arbitration Contacts


Jeroen Ouwehand PartnerT: +31 20711 9130E: jeroen.ouwehand@

cliffordchance.com

Amsterdam

Juliette LuycksCounselT: +31 20711 9118E: juliette.luycks@

cliffordchance.com

Graham LovettPartnerT: +971 43620 625E: graham.lovett@

cliffordchance.com

Dubai

Sébastien RyelandtPartnerT: +32 2533 5988E: sebastien.ryelandt@

cliffordchance.com

Brussels

James AbbottPartnerT: +971 43620 608E: james.abbott@

cliffordchance.com

Michael KremerPartnerT: +49 2114355 5369E: michael.kremer@

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Düsseldorf

Sebastian RakobPartnerT: +49 697199 4810E: sebastian.rakob@

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Frankfurt

Burkhard SchneiderPartnerT: +49 697199 1442E: burkhard.schneider@

cliffordchance.com


Cameron HassallPartnerT: +852 2825 8902E: cameron.hassall@

cliffordchance.com

Hong Kong

Kathryn SangerConsultantT: +852 2826 3404E: kathryn.sanger@

cliffordchance.com

Romesh Weeramantry ConsultantT: +852 2825 8938 E: romesh.weeramantry@

cliffordchance.com

Audley Sheppard PartnerT: +44 20 7006 8723 E: audley.sheppard@

cliffordchance.com

London



Alex PanayidesPartnerT: +44 20 7006 4880 E: alexandros.panayides@

cliffordchance.com

Marie Berard PartnerT: +44 20 7006 2435E: marie.berard@

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Jose Antonio CainzosPartnerT: +34 91590 9405E: joseantonio.cainzos@

cliffordchance.com

Madrid

Fabio Guastadisegni PartnerT: +39 028063 4353E: fabio.guastadisegni@

cliffordchance.com

Milan

Timur Aitkulov PartnerT: +7 495725 6415 E: timur.aitkulov@

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Moscow

Julia PopelyshevaCounselT: +7 495725 6444 E: julia.popelysheva@

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Tim Schreiber PartnerT: +49 8921632 8710E: tim.schreiber@

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Munich

Jason FryPartnerT: +33 14405 5303E: jason.fry@

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Paris

Jean-Pierre GrandjeanPartnerT: +33 14405 5210E: jean-pierre.grandjean@

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Ben LuscombePartnerT: +61 892625 511E: ben.luscombe@

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Perth

Rob LambertPartnerT: +44 20 7006 8709E: robert.lambert@

cliffordchance.com

London



Sam Luttrell CounselT: +61 892625 564E: sam.luttrell@

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Perth

Thomas WalshCounselT: +82 2 6353 8110 E: thomas.walsh@

cliffordchance.com

Seoul

Carlo Felice GiampaolinoPartnerT: +39 064229 1356E: carlofelice.giampaolino@

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Rome

Yu Bing Counsel T: +86 212320 7372 E: bing.yu@

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Shanghai

Nish Shetty PartnerT: +65 6410 2285E: nish.shetty@

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Singapore

Paul SandoshamPartnerT: +65 6661 2055E: paul.sandosham@

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Harpreet SinghPartnerT: +65 6661 2028E: harpreet.singh@

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Timothy GravePartnerT: +61 28922 8028 E: tim.grave@

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Bartosz KruzewskiPartnerT: +48 22429 9514E: bartosz.kruzewski@

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Ignacio Suarez Anzorena PartnerT: +1 202912 5185E: ignacio.suarezanzorena@

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Washington D.C. and New York


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