Taming the Guerrilla in International Commercial Arbitration: Levelling the Playing Field (International Law and the Global South) 9811900744, 9789811900747

Table of contents :
Praise for Taming the Guerrilla in International Commercial Arbitration
Foreword
Preface
Acknowledgements
Contents
About the Author
1 A Bird’s-Eye View
Guerrilla Tactics and their Emergence in International Arbitration
Guerrilla Tactics
The Deployment of Guerrilla Tactics
Background to the Concept of Guerrilla Tactics in Arbitration
An Ethical No-Man’s Land
The Powers of the Arbitral Tribunal
The Continued Growth of International Arbitration
Scope of the Book
International Commercial Arbitration
Institutional Arbitration Versus Ad Hoc
Who Are the Guerrillas?
Structure of This Book
References
2 Fundamentals of International Arbitration
Introduction
The Nature of Arbitration
International Commercial Arbitration
The Growth of International Arbitration
International Arbitration and Litigation
Enforcement
Neutral Venue
Confidentiality
Qualities and Expertise of Judges Versus Arbitrators
Number of Arbitrators
Finality
Costs
Flexibility
Consistency/Precedents
Availability of Expedited Procedure and Express Summary Procedure or Early Determination Procedure
Interim/Emergency Relief
Conclusion
References
3 The Nature of Guerrilla Tactics in International Arbitration
Introduction
Origin and Development of Guerrilla Tactics
Understanding the Notion of Guerrilla Tactics in International Arbitration
Recent Surveys on the Topic of Guerrilla Tactics
Surveys in 2010
Survey in 2015
Survey in 2018
Survey in 2021
Codification of Ethical Standards and Rules for Legal Representatives
The Various Forms of Guerrilla Tactics and their Impact on the Arbitral Process
Objecting to the Arbitral Tribunal’s Jurisdiction
Frivolous Challenges to Arbitrators
Non-participation
Failure to Comply with the Arbitral Tribunal’s Orders
Witness Coaching
Disrupting Cross-examination
Ex Parte Communications
Abuse of Document Production
Anti-arbitration Injunctions and Italian Torpedoes
Unethical Party-appointed Expert Witnesses
Creating a Conflict of Interest
Multiplicity of Arbitration Proceedings
Arbitrator Guerrilla Tactics: Corruption and Coercion, Hostile Behaviour, Reporting Back to a Party, Resignation
Corruption or Coercion of an Arbitrator
Hostile Behaviour by an Arbitrator
Reporting Back to a Party
Resignation
Conclusion
References
4 Factors that May Encourage or Facilitate Guerrilla Tactics
Introduction
Conflict Between Different Legal and Cultural Backgrounds and Legitimate Expectations
Due Process Concerns
The Phenomenon of Party-appointed Arbitrators
The Advent of New Entrants
Non-lawyers Acting as Legal Representatives
Regulation of Party-appointed Expert Witnesses
Possible Perception of Inadequate Sanctions
Inconsistent Court Intervention Rules
Operating Behind Closed Doors
Use of Tribunal Secretaries
Engagement of Third Party Funders
Over-committed Arbitrators
The Absence of Precedents
No (or Limited) Right of Appeal
Conclusion
References
5 Mechanisms to Control Guerrilla Tactics in International Arbitration
Introduction
Remedies Against Parties and Legal Representatives
The Tribunal
Arbitral Institutions
Courts
National and International Bar Associations
Remedies Against Arbitrator Guerrillas
Challenges to Arbitrators
Challenge the Arbitral Award
Legal Action Against the Arbitrator
Conclusion
Appendix: Cost Orders and Interim Measures in Support of Arbitration in Hong Kong, English and Australian Courts
Hong Kong
Costs
Interim Measures
England
Costs
Interim Measures
Australia
Costs
Interim Measures
Summary
References
6 Guerrilla Tactics in Court: A Study of the Use of Judicial Sanctions in Hong Kong
Introduction
How Has the Civil Litigation System in Hong Kong Addressed the Use of Guerrilla Tactics in Litigation?
Remedies Available to the Courts
Remedies Against Legal Representatives: Solicitors and Barristers
Remedies for Judicial Misconduct
Are There Lessons for Arbitration to be Found in Approaches to Civil Litigation Reform?
Conclusion
References
7 Curbing Guerrilla Tactics in International Arbitration: A Critical Review of Solutions and Directions
Introduction
Recommendation 1: Arbitral Institutions to Provide More Informed Model Arbitration Clauses
Recommendation 2: A New Set of Ethical Guidelines for Legal Representatives Based on Party Autonomy
Conclusion
References
8 Concluding Remarks
Introduction
Summary
Case Management: Getting an Early Grip on the Arbitration
Regulating Party Representatives
Education and Training
Suggestions for Areas for Future Research
Conclusion
References
9 Arbitration and COVID-19 Pandemic: Virtual Guerrilla Tactics
Introduction
Jurisdiction Challenges
Unequal Treatment
Inability to Present One’s Case
Witness Coaching
Cyber-intrusion Risks
COVID-19 Itself as an Excuse for Disruption
Conclusion
References
Index

Citation preview

International Law and the Global South Perspectives from the Rest of the World

Navin G. Ahuja

Taming the Guerrilla in International Commercial Arbitration Levelling the Playing Field

International Law and the Global South Perspectives from the Rest of the World

Series Editor Leïla Choukroune, International Law and University Research, Portsmouth University, New Delhi, India Editorial Board Balveer Arora, Centre for Multilevel Federalism (CMF), Institute of Social Sciences, Delhi, Delhi, India Eros Roberto Grau, Faculty of Law, Universidade de São Paulo, São Paulo, Brazil Denise Prevost, Department of International and European Law, Maastricht University, Maastricht, Limburg, The Netherlands Carlos Miguel Herrera, CY Cergy Paris University, Cergy, France

This book series aims to promote a complex vision of contemporary legal developments from the perspective of emerging or developing countries and/or authors integrating these elements into their approach. While focusing on today’s law and international economic law in particular, it brings together contributions from, or influenced by, other social sciences disciplines. Written in both technical and non-technical language and addressing topics of contemporary importance to a general audience, the series will be of interest to legal researchers as well as non-lawyers. In referring to the “rest of the world”, the book series puts forward new and alternative visions of today’s law not only from emerging and developing countries, but also from authors who deliberately integrate this perspective into their thinking. The series approach is not only comparative, post-colonial or critical, but also truly universal in the sense that it places a plurality of well-informed visions at its center. The Series • Provides a truly global coverage of the world in reflecting cutting-edge developments and thinking in law and international law • Focuses on the transformations of international and comparative law with an emphasis on international economic law (investment, trade and development) • Welcomes contributions on comparative and/or domestic legal evolutions.

More information about this series at https://link.springer.com/bookseries/13447

Navin G. Ahuja

Taming the Guerrilla in International Commercial Arbitration Levelling the Playing Field

Navin G. Ahuja School of Law City University of Hong Kong Kowloon Tong, Kowloon, Hong Kong

ISSN 2510-1420 ISSN 2510-1439 (electronic) International Law and the Global South ISBN 978-981-19-0074-7 ISBN 978-981-19-0075-4 (eBook) https://doi.org/10.1007/978-981-19-0075-4 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Praise for Taming the Guerrilla in International Commercial Arbitration

“This manuscript is an essential solutions-based text that not only addresses a comprehensive range of modern-day guerrilla tactics in international commercial arbitration but also offers thoughtful methods to deal with the shenanigans that parties may bring to the arbitral process.” —Chiann Bao, Independent Arbitrator, Arbitration Chambers and Vice President of the International Chamber of Commerce, Court of Arbitration “Dr. Ahuja’s book is a thoughtful and highly practical contribution to the study of procedures in international commercial arbitration. It is replete with scholarly analysis, careful treatment of authority, pragmatic insights and policy discussions. Any practitioner or student of international arbitration would benefit from this volume.” —Gary Born, Author, International Commercial Arbitration (3d ed. 2021) “A highly readable and informative book which identifies and analyses the numerous guerrilla tactics parties may attempt to deploy in international commercial arbitration, the factors which may encourage such behaviour, and practical mechanisms to keep the proceedings on track. Both erudite and practical, this book is a must-read for parties, counsel and arbitrators alike.” —Prof. Benjamin Hughes, Independent Arbitrator, The Arbitration Chambers “Guerrilla tactics are a pertinent problem in arbitration. Dr. Ahuja’s well written book not only describes the various tactics in a succinct way but provides extremely useful guidance on how to tackle them. It will be a primary source of reference for every practitioner faced with such tactics.” —Prof. Dr. Stefan Kröll, Chairman of the Board of Directors of the German Arbitration Institute (DIS) “Taming the Guerrilla in International Commercial Arbitration offers a refreshingly candid and balanced discussion of ‘sharp practices’ in international arbitration. The v

vi

Praise for Taming the Guerrilla in International Commercial Arbitration

book collects a wealth of information on guerrilla tactics previously only available in separate survey reports, articles, and guidelines on the topic. It additionally includes a chapter addressing tactics deployed in virtual or remote arbitrations due to the Covid19 pandemic. The comprehensive research and analysis presented in this book make it a valuable resource to counsel, parties, arbitrators, academics, and those who deliver practical arbitration training. A must-read for those who want to better understand the practices that may lead some to disfavor arbitration and ways the arbitration community can respond to guerrilla tactics to improve the arbitration process for all participants.” —Dana MacGrath, Independent Arbitrator, MacGrath Arbitration “From an unreasoned fiat of a wise man who left both sides equally unhappy but resolved the disputes effectively, arbitration has evolved into a full-scale trial before a party chosen tribunal. Its informality and expedition puts in peril the fundamental right of the recalcitrant to delay proceedings. Dr. Ahuja has assiduously articulated the measures, aptly christened Guerrilla Tactics, used to disrupt and derail arbitrations. An indispensable read for the practitioner and an insightful treatise for the policy maker.” —Harish Salve SA QC, Blackstone Chambers “This book shines a spotlight on arbitration’s dark arts - guerrilla tactics. Dr Ahuja illuminates this shadowy world with excellent (and much needed) scholarship that is practice-based and useful for all stakeholders in arbitration. His examination of the root causes of this problem, recommendations on how to control it, comparisons with litigation practice and suggestions for future research marvellously combine to make this a work that is required to be consulted by all serious counsel, arbitrators, institutions and academics in the field of arbitration.” —Romesh Weeramantry, Head, International Dispute Resolution, Centre for International Law, National University of Singapore

Foreword

I am pleased to pen this Foreword as Dr. Navin G. Ahuja’s supervisor during his doctoral thesis and research. Arbitration is a primary area of interest for me; I am currently and have previously served as an arbitrator, academic and advisor. International arbitration has established itself as the de facto forum for resolving commercial disputes on a cross-border basis. Despite its meteoric rise, guerrilla tactics are deployed ‘behind the scenes, or occasionally on the front and centre stage’, as the author puts it. This book takes you step by step through the process of appreciating the nature of guerrilla tactics in international arbitration in a clear and attractive manner. The attitude or psychological component of arbitration participants is largely unexplored. Guerrilla tactics are more than an ambush or an inappropriate provocation in international arbitration. A guerrilla is frequently portrayed as unethical in order to derail the arbitration. This book describes and analyses the various types of guerrilla tactics, illuminating the thought processes of key players in international arbitration, such as the parties and party representatives, and demonstrating the impact of each type of tactic on the arbitral process. Due to COVID-19 and modern technologies, new and sophisticated forms of guerrilla tactics have emerged, some of which are discussed in the additional chapter at the end of the book, along with some of the most recent countermeasures. Dr. Ahuja is courageous and ambitious in taking on the task of developing solutions based on critical analysis to regulate guerrilla tactics that allow for punishment of wrongdoing while preserving party autonomy and flexibility in international arbitration. He has also sought to identify factors that facilitate or encourage misbehaviour by examining the reasons for parties’ initial choice of arbitration.

vii

viii

Foreword

This book is originally intended for those who practise or are interested in international arbitration, arbitral institutions, academic researchers and students of international arbitration. It may also serve to satisfy those who are curious about the connection between commercial arbitration and guerrilla warfare. October 2021

Julien Chaisse Professor, School of Law City University of Hong Kong & President, Asia Pacific FDI Network Kowloon Tong, Hong Kong

Preface

In 2015 when I was assistant editor for the Asian Dispute Review journal, we published an article authored by Günther J Horvath and Amanda Neil on guerrilla tactics in international arbitration. The impression that came to my mind was that, although the use of guerrilla tactics exists, there were solutions to tackle the problem. Three years later, at a Young Singapore International Arbitration Centre (YSIAC) seminar in Singapore (indeed it was an in-person event), Gary Born presented and discussed the very same topic. I was fascinated by the fact that the existence and the openly ‘accepted’ problem of guerrilla tactics was the subject matter of such a popular platform for settling disputes, which continues to grow in various directions. As someone who enjoys solving problems and brainstorming ideas, this particular problem led me to conduct my own research and to publish a short article on guerrilla tactics in arbitration. The journal’s acceptance and validation of my article motivated me to dig deeper into the area. Admittedly, I already had another topic in mind related to international arbitration for my doctoral thesis. In fact, I had already written more than 30,000 words on that particular topic. However, I found that there is something about ‘dirty tricks’ in international arbitration that interests and engages arbitration academics and practitioners, who want to share and compare their experiences, along with mulling over ways to deal with such tactics. Equally important was the discovery that there has been no clear or entirely satisfactory solution. And so I swiftly (albeit after careful consideration) revised my thesis topic, earned my JSD and authored this book. Among other things, attempting to empathise with the main characters in international arbitration for the purposes of writing this book was very enjoyable. What is intriguing is that when I presented parts of this book to practitioners from different legal backgrounds, I received unexpected reactions. For example, the behaviour labelled as guerrilla tactics in Chap. 3 was commonly witnessed and seen by many as a right that a party could exercise—one party’s guerrilla could very well be another party’s freedom fighter. It was also unclear initially if it was appropriate to analyse and discuss such tactics openly. In terms of behaviour that could be regarded as either a guerrilla tactic or simply infuriating but perfectly legitimate activity, it was clear that there were educational ix

x

Preface

and cultural differences among the participants in an arbitration that produced variable behaviour. These are discussed in the book. And in terms of discussing the topic of guerrilla tactics openly, it seemed that by visualising how and why guerrilla tactics might be deployed, many of the tactics would (hopefully) cease to be as valuable or effective for the guerrilla. I am also hopeful that some of you who read this book will become more conscious of such tactics and take steps to try to prevent them from occurring in the first place. In other words, this book’s purpose is to arm users with the knowledge of guerrilla tactics to defend against them, rather than to deploy them! There are already other publications on this topic, including, but not limited to, a book edited by Günther J Horvath and Stephan Wilske, and publications by Catherine A Rogers. Their thoughts are inspiring, and their works have been cited in this book. There are undoubtedly some parts in the book that may cause a raising of the eyebrows as obvious problems, as well as difficult or awkward situations, are touched upon. I have called a spade a spade. The purpose of this book is inter alia to provide a step-by-step analysis of the topic from the definition all the way to the methods that could be used to curb the use of guerrilla tactics. Hopefully, the book can serve as a reference for future arbitration-related initiatives and be a companion to anyone interested in guerrilla tactics in international commercial arbitration or even just the field of international arbitration. Navin G. Ahuja

Acknowledgements

This book is based on my thesis ‘Taming the Guerilla in International Arbitration?’ for which I was awarded the degree of Doctor of Juridical Science (JSD) at the City University of Hong Kong in 2021. The thesis was developed from a short article ‘Transporting the Guerilla in International Arbitration Back to the Wild?’ published in the Vindobona Journal of International Commercial Law and Arbitration in 2019. I would like to thank Prof. Julien Chaisse for writing the Foreword, for being my supervisor during my JSD and for his overall guidance. I am indebted to Clifford Gill for taking the time and offering his patience, creativity and guidance in transforming my ideas and thesis into this book out of goodwill. Cliff helped with extensive editing—he streamlined, restructured and clarified my work, and substantially contributed to the book, all of which (including him fighting with me over a chapter or two) was insightful and enlightening. Any errors and/or inconsistencies are, of course, mine, and we remain very good friends. I would also like to thank Abhishek Dimri and Barbara Broughman for contributing to the editing process. I am grateful to my wife Sheila Ahuja and my twin daughters Natasha Ahuja and Alisha Ahuja for their love, patience, encouragement and support.

xi

Contents

1 A Bird’s-Eye View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Guerrilla Tactics and their Emergence in International Arbitration . . . . . . Guerrilla Tactics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Deployment of Guerrilla Tactics . . . . . . . . . . . . . . . . . . . . . . . . . . . . Background to the Concept of Guerrilla Tactics in Arbitration . . . . . . . . . An Ethical No-Man’s Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Powers of the Arbitral Tribunal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Continued Growth of International Arbitration . . . . . . . . . . . . . . . . . . . Scope of the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . International Commercial Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . Institutional Arbitration Versus Ad Hoc . . . . . . . . . . . . . . . . . . . . . . . . . . Who Are the Guerrillas? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Structure of This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2 2 3 3 5 6 7 8 8 9 10 10 11

2 Fundamentals of International Arbitration . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Nature of Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . International Commercial Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Growth of International Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . International Arbitration and Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Neutral Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualities and Expertise of Judges Versus Arbitrators . . . . . . . . . . . . . . . Number of Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Flexibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consistency/Precedents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15 15 16 21 22 28 30 31 33 34 36 37 38 39 39

xiii

xiv

Contents

Availability of Expedited Procedure and Express Summary Procedure or Early Determination Procedure . . . . . . . . . . . . . . . . . . . . . Interim/Emergency Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The Nature of Guerrilla Tactics in International Arbitration . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Origin and Development of Guerrilla Tactics . . . . . . . . . . . . . . . . . . . . . . . . Understanding the Notion of Guerrilla Tactics in International Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recent Surveys on the Topic of Guerrilla Tactics . . . . . . . . . . . . . . . . . . . . . Surveys in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Survey in 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Survey in 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Survey in 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Codification of Ethical Standards and Rules for Legal Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Various Forms of Guerrilla Tactics and their Impact on the Arbitral Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Objecting to the Arbitral Tribunal’s Jurisdiction . . . . . . . . . . . . . . . . . . . Frivolous Challenges to Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Failure to Comply with the Arbitral Tribunal’s Orders . . . . . . . . . . . . . . Witness Coaching . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disrupting Cross-examination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ex Parte Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Abuse of Document Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Anti-arbitration Injunctions and Italian Torpedoes . . . . . . . . . . . . . . . . . Unethical Party-appointed Expert Witnesses . . . . . . . . . . . . . . . . . . . . . . Creating a Conflict of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Multiplicity of Arbitration Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . Arbitrator Guerrilla Tactics: Corruption and Coercion, Hostile Behaviour, Reporting Back to a Party, Resignation . . . . . . . . . . . . . . . . . . . Corruption or Coercion of an Arbitrator . . . . . . . . . . . . . . . . . . . . . . . . . . Hostile Behaviour by an Arbitrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reporting Back to a Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Factors that May Encourage or Facilitate Guerrilla Tactics . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conflict Between Different Legal and Cultural Backgrounds and Legitimate Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Due Process Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41 42 42 43 51 51 52 53 55 55 58 59 61 61 67 68 70 74 77 78 82 84 87 90 94 97 99 104 104 105 106 108 109 110 123 123 125 127

Contents

The Phenomenon of Party-appointed Arbitrators . . . . . . . . . . . . . . . . . . . . . The Advent of New Entrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-lawyers Acting as Legal Representatives . . . . . . . . . . . . . . . . . . . . . . . Regulation of Party-appointed Expert Witnesses . . . . . . . . . . . . . . . . . . . . . Possible Perception of Inadequate Sanctions . . . . . . . . . . . . . . . . . . . . . . . . Inconsistent Court Intervention Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating Behind Closed Doors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Use of Tribunal Secretaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Engagement of Third Party Funders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over-committed Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Absence of Precedents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No (or Limited) Right of Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Mechanisms to Control Guerrilla Tactics in International Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Remedies Against Parties and Legal Representatives . . . . . . . . . . . . . . . . . The Tribunal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arbitral Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . National and International Bar Associations . . . . . . . . . . . . . . . . . . . . . . Remedies Against Arbitrator Guerrillas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Challenges to Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Challenge the Arbitral Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Legal Action Against the Arbitrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix: Cost Orders and Interim Measures in Support of Arbitration in Hong Kong, English and Australian Courts . . . . . . . . . . . Hong Kong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interim Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . England . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interim Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interim Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xv

131 136 140 141 144 145 149 151 155 159 161 163 165 165 177 177 178 178 197 199 203 204 204 204 205 207 208 209 209 211 211 211 213 215 215 216 216 216

xvi

Contents

6 Guerrilla Tactics in Court: A Study of the Use of Judicial Sanctions in Hong Kong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . How Has the Civil Litigation System in Hong Kong Addressed the Use of Guerrilla Tactics in Litigation? . . . . . . . . . . . . . . . . . . . . . . . . . . . Remedies Available to the Courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Remedies Against Legal Representatives: Solicitors and Barristers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Remedies for Judicial Misconduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Are There Lessons for Arbitration to be Found in Approaches to Civil Litigation Reform? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

223 223 224 227 241 243 244 251 251

7 Curbing Guerrilla Tactics in International Arbitration: A Critical Review of Solutions and Directions . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recommendation 1: Arbitral Institutions to Provide More Informed Model Arbitration Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recommendation 2: A New Set of Ethical Guidelines for Legal Representatives Based on Party Autonomy . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

256

8 Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Case Management: Getting an Early Grip on the Arbitration . . . . . . . . . . . Regulating Party Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Education and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Suggestions for Areas for Future Research . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

285 285 285 286 288 292 292 293 294

9 Arbitration and COVID-19 Pandemic: Virtual Guerrilla Tactics . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jurisdiction Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unequal Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inability to Present One’s Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Witness Coaching . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cyber-intrusion Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . COVID-19 Itself as an Excuse for Disruption . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

295 295 297 300 302 305 307 308 310 311

255 255

264 275 279

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317

About the Author

Dr. Navin G. Ahuja is an Editorial Board Member of the International Arbitration Law Review, an accredited Tribunal Secretary at the Hong Kong International Arbitration Centre (HKIAC), and an accredited General Mediator. Navin is a member of several arbitration-related committees. His notable achievements include his contributions to several publications on the United Nations Convention on Contracts for the International Sale of Goods (CISG) and Alternative Dispute Resolution. He earned his Doctor of Juridical Science (JSD) degree in International Arbitration in 2021 at the City University of Hong Kong. While pursuing his doctorate, he was appointed a Visiting Fellow and subsequently a Senior Research Associate at the University, where he also delivered several lectures. He completed his Master of Laws in Arbitration and Dispute Resolution in 2014 during which he participated in the Willem C. Vis International Commercial Arbitration Moot (“Vis Moot”) and received a moot scholarship. Since then, Navin has judged various international arbitration, international investment arbitration, international mediation, and general mooting competitions. He has also been co-coaching City University of Hong Kong’s mooting team for the Vis Moot who have secured several awards over the years, including amongst other things, best memorandum in Hong Kong, Honourable Mentions for written memoranda and Honourable Mentions for individual oralists in Hong Kong and Vienna. In 2021, his team ranked fourth out of 147 teams in Hong Kong. Last but not the least, Navin became a part-time stay-at-home dad when he became a father of twin daughters in the year 2015.

xvii

Chapter 1

A Bird’s-Eye View

Whenever money is at stake, there is potential for misbehaviour.1

Arbitration, as the ‘oldest known method of settlement of disputes’,2 is a ‘creature of contract’.3 The parties can choose where the arbitration should take place, the arbitration law that should apply, the arbitration rules that should govern the arbitration, and can generally choose their decision-maker (the arbitrator) and the number of arbitrators to decide their case (usually one or three). The parties can agree on any procedure, so long as it does not contradict or violate the law of the seat where the arbitration takes place or any other applicable mandatory rule. By agreeing to arbitrate, the parties voluntarily opt out of submitting disputes to potentially stricter and more rigid court litigation, where the parties lack control and may perceive face uncertainties. Flexibility, confidentiality, finality and efficiency are words that generally come to mind when discussing international arbitration and describe some of the main reasons for choosing arbitration as an alternative to court litigation. International arbitration has traditionally been seen as an attempt to settle disputes in a civilised way, between ‘gentlemen in a gentlemanly way’.4

1

Richard M Mosk, ‘Attorney Ethics in International Arbitration’ (2010) 5 Berkeley Journal of International Law Publicist 32. 2 Frank D Emerson, ‘History of Arbitration Practice and Law’ (1970) 19 Cleveland State Law Review 155. 3 J Kirkland Grant, Securities Arbitration for Brokers, Attorneys, and Investors (Greenwood Publishing Group 1994) 75. 4 Ugo Draetta, Counsel as Client’s First Enemy in Arbitration? (JurisNet, LLC 2014) 104. Also see Earl S Olaver, ‘The Historical Background of Commercial Arbitration’ (1934) University of Pennsylvania Law Review 144. © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 N. G. Ahuja, Taming the Guerrilla in International Commercial Arbitration, International Law and the Global South, https://doi.org/10.1007/978-981-19-0075-4_1

1

2

1 A Bird’s-Eye View

Guerrilla Tactics and their Emergence in International Arbitration However, the practice of international arbitration has changed in recent years, with a tendency once a dispute has arisen for some parties to become less gentlemanly and scrupulous in their methods, and more cynical in their attempts to prevail over the opposition. Gaillard says: ‘[f]rom a sociological standpoint, these diverging trends illustrate how international arbitration is not as homogeneous as it once was, but has instead become more and more complex and fragmented and in some instances, more polarized’.5

Guerrilla Tactics The military term guerrilla (also spelled guerilla) ‘(the diminutive of Spanish guerra, ‘war’) stems from the Duke of Wellington’s campaigns during the Peninsular War (1808–14), in which Spanish and Portuguese irregulars, or guerrilleros, helped drive the French from the Iberian Peninsula. Traditionally, guerrilla warfare has been a weapon of protest against alleged wrongs imposed on a people by a foreign invader or ruling government. Guerrillas may operate independently or complement orthodox military operations’.6 It has been said that ‘the importance of guerrilla warfare has varied considerably throughout history…[I]t has scored remarkable successes and has suffered disastrous defeats’.7 Rather than the protest element, it is the unorthodox ‘surprise’ or ‘ambush’ element of guerrilla warfare that has led to the use of the term in the field of international arbitration. As for the use of the word ‘tactics’ in this context, Sir Archibald Wavell has described the term as ‘the art of handling troops on the battlefield’,8 which is analogous to what can happen when an adversarial process is brought to arbitration. Military tactics can be categorised, inter alia, as offensive and defensive tactics.9 The first category aims at ‘gaining the desired goal by aggressively attacking’; the 5

Emmanuel Gaillard, ‘Abuse of Process in International Arbitration’ (2017) ICSID Review 2. The Editors of Encyclopaedia Britannica, ‘Guerrilla’ (21 June 2017) Encyclopaedia Britannica < https://www.britannica.com/topic/guerrilla> accessed 14 May 2020. 7 Robert Brown Asprey, ‘Guerrilla Warfare’ (6 November 2019) Encyclopaedia Britannica accessed 15 May 2020. 8 Herman Hattaway, Reflections of a Civil War Historian: Essays on Leadership, Society, and the Art of War (University of Missouri 2003) 200. Also see Bruno Colson, Napoleon: On War (Oxford University Press 2015) 81: Napoleon offered a definition by reporting: ‘Lagrange said to His Majesty one day that he believed that tactics were the art of getting people who did not want to fight to fight. HM replied that tactics were the art of getting a large number of armed individuals to act simultaneously to the greatest advantage as quickly and obediently as possible’. 9 Hattaway (n 8). 6

Guerrilla Tactics and their Emergence …

3

second category ‘is used when one hopes or expects (or knows) that the enemy is going to attack, and aims at inflicting’ damage upon the enemy while he is attacking in order to frustrate the attack and bring victory to the defender.10 As we shall see, both categories are used in the context of modern arbitration.

The Deployment of Guerrilla Tactics The deployment of guerrilla tactics by one or both parties in a dispute during international arbitration essentially corresponds to conduct that is intended to ultimately shift power from one party to the other in their legal battle. In international arbitration, the term has come to refer to a party’s unethical, but not necessarily illegal or punishable, behaviour when attempting to gain an edge. This behaviour may take a variety of forms, which in this book have been subsumed under the umbrella term ‘guerrilla tactics’, to describe this fairly recently recognised facet of international arbitration. According to Rogers, some of the ‘guerrilla tactics’ deployed behind the scenes, or sometimes on front and centre stage, include dumpster diving … ‘convincing’ an arbitrator to go home rather than attend deliberations … death threats!!! … changing counsel mid-proceedings to create a conflict with an arbitrator … wiretapping opposing counsel’s meeting rooms … hiding damaging documents that were ordered to be disclosed … raising fourteen challenges to a single arbitral tribunal … physically assaulting the opposing party … raising excessive frivolous objections to ‘run the clock’ at an evidentiary hearing … threatening a witness that he would ‘never work again’ to dissuade him from testifying … absurdly excessive requests for document disclosure … hiring private detectives to follow and observe arbitrators … staging a car accident with opposing counsel to prevent attendance at a hearing…11

Background to the Concept of Guerrilla Tactics in Arbitration In order to analyse why the use of guerrilla tactics has developed in international arbitration, it is necessary to take a look at the nature and history of the arbitral process itself, which has largely been shaped by the idea of party autonomy. International arbitration has become tremendously popular in the last few decades. This is evident in the increase in the number of arbitration cases, as well as a surge in the values in dispute, the development and increasing sophistication of the arbitral institutions, and the increase in the number of Contracting States to the Convention 10

Hattaway (n 8). Catherine Rogers, ‘Chap. 5: Guerrilla Tactics and Ethical Regulation’ in Günther J Horvath and Stephan Wilske (eds), Guerrilla Tactics in International Arbitration (Kluwer Law International 2013) 313.

11

4

1 A Bird’s-Eye View

on the Recognition and Enforcement of Foreign Arbitral Awards (the well-known and generally well-regarded New York Convention).12 The work of arbitrators was described in the 1990s as a ‘rather glamorous and—at least for the large cases—well paid activity associated with nice places, like Paris or Geneva, and a first-class life style’.13 The success of international arbitration is often attributed to factors such as the reliability of the enforcement of arbitral awards, the avoidance of strict court litigation, flexibility, the ability to choose the parties’ own arbitrator, confidentiality and so on, thereby making it a unique forum for parties to resolve their disputes.14 The regime described largely assumes that parties will cooperate in solving their disputes, but arbitration is not necessarily that straightforward.15 Without cooperation among the aggrieved parties, arbitration’s flexibility and the focus on the parties’ wishes can have negative consequences. Global surveys conducted since 2010 suggest that guerrilla tactics are being deployed during arbitration, derailing the arbitral process in some cases.16 This is a problem which, on analysis, is found to be highly nuanced. It is perhaps understandable that, once the relationship becomes sour, a party might wish to engage in hostile tactics. However, it is not necessarily only the parties to the dispute or their legal representatives, but also other participants in the arbitration, such as the arbitrators themselves, who have on occasions engaged 12

New York Arbitration Convention, ‘United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958)’ accessed 21 September 2021. 13 Yves Dezalay and Bryant G Garth, Dealing in Virtue: International Commercial Arbitration and the Construction of a Transnational Legal Order (University of Chicago Press 1996) 8; Panayotis M Protopsaltis, ‘Book Review: G¨Unther J Horvath & Stephan Wilske (eds) Guerrilla Tactics in International Arbitration (Wolters Kluwer Law & Business, 2013), xxix-429 pp’. (2014) 31(6) Journal of International Arbitration 789. 14 S I Strong, ‘Navigating the Borders Between International Commercial Arbitration and U.S. Federal Courts: A Jurisprudential GPS’ (2012) Journal of Dispute Resolution 153; Joanna Jemielniak, Legal Interpretation in International Commercial Arbitration (Routledge 2016) 22. 15 Ilias Bantekas, An Introduction to International Arbitration (Cambridge University Press 2015) Preface xv. 16 Edna Sussman and Solomon Ebere, ‘All’s Fair in Love and War – Or Is It? Reflections on Ethical Standards for Counsel in International Arbitration’ (2011) 22(4) The American Review of International Arbitration (Sussman and Ebere survey) 612; The School of International Arbitration, Queen Mary University of London, ‘2010 International Arbitration Survey: Choices in International Arbitration’ (QMUL 2010 survey) 34 accessed 30 April 2020; The School of International Arbitration, Queen Mary University of London, ‘2015 International Arbitration Survey: Improvements and Innovations in International Arbitration’ (QMUL 2015 survey) 51 accessed 1 January 2020; The School of International Arbitration, Queen Mary University of London, ‘2018 International Arbitration Survey: The Evolution of International Arbitration’ (QMUL 2018 survey) 41 accessed 1 January 2020; The School of International Arbitration, Queen Mary University of London, ‘2021 International Arbitration Survey: Adapting Arbitration to a Changing World’ (QMUL 2021 survey) accessed 21 September 2021.

Background to the Concept of Guerrilla Tactics in Arbitration

5

in unethical behaviour. Later in this book we shall examine the question of whether it is the flexible and informal nature of international arbitration that has triggered the advent of unethical transgressions. Although the use of guerrilla tactics can cause distress and harm, we shall also examine the possibility that in some cases there is an absence of any deliberate intent on the part of the party who is apparently attempting to hit below the belt. Participants in international arbitration might in some instances merely be unfamiliar with the arbitration process, given that it is a platform where participants from different legal and cultural backgrounds meet.17 Of course, there are those situations in which a deliberate intention to prolong or disrupt the arbitration is clearly present, and in such cases there is perhaps a much greater risk of harming arbitration itself as a platform for resolving disputes. As things stand, perhaps the wrongdoers in the forum are shielded from liability and accountability, or participants behaving badly in some cases might simply have nothing to lose.

An Ethical No-Man’s Land According to Rogers (in 2002), ‘[i]international arbitration dwells in an ethical noman’s land’,18 suggesting guerrilla tactics deployed in international arbitration might be linked to an absence of any code of ethics (predominantly aimed at legal representatives).19 Since Rogers wrote that, several sets of guidelines, such as the International Bar Association (IBA) Guidelines on Party Representation in International Arbitration (2013),20 the Annex to the London Court of International Arbitration (LCIA) 17

Won Kidane, The Culture of International Arbitration (Oxford University Press 2017) 7: These differences are relevant as they can ‘affect the selection of arbitrators, the conduct of the proceedings, the determination of facts, the interpretation of law, the cost and efficiency of the process, and more important, the fairness and accuracy of the outcome of the case in many profound ways’. 18 Catherine Rogers, ‘Fit and Function in Legal Ethics: Developing a Code of Conduct for International Arbitration’ (2002) 23 Michigan Journal of International Law 341. 19 For example, Lucy Ferguson Reed, ‘Chapt. 2, §2.04: Sanctions Available for Arbitrators to Curtail Guerrilla Tactics’ in Horvath and Wilske (n 11) 93–94: ‘“In some respects, an international arbitration is like a ship. An arbitration may be said to be ‘owned’ by the parties, just as a ship is owned by ship-owners. But the ship is under the day-to-day command of the captain, to whom the owner hands control. The owners may dismiss the captain if they wish and hire a replacement, but there will always be someone on board who is in command ….”. To carry this analogy further, the party ship-owners select and instruct the counsel who sail the ship in the voyage of international arbitration. To carry the analogy even further, it is counsel who play the role of guerrilla warrior sailors. The party ship-owners may tolerate, encourage or even whip their sailors into such tactics, for whatever commercial or tactical reasons, but it is counsel who are the warrior sailors’. 20 International Bar Association (IBA) Guidelines on Party Representation in International Arbitration in 2013, Adopted by a resolution of the IBA Council 25 May 2013 accessed 24 May 2020 (the IBA Guidelines on Party Representation).

6

1 A Bird’s-Eye View

Arbitration Rules (2014),21 and the Singapore Institute of Arbitrators (SIArb) Guidelines on Party-Representative Ethics (2018),22 have come into effect. Consequently, Born, at an event in Singapore in September 2018,23 suggested that ethics in international arbitration resembled a teenager’s bedroom which needed tidying up. In 2014, the Swiss Arbitration Association called for the creation of a Global Arbitration Ethics Council and chaired an informal working group.24 However, little came from their efforts, the general feeling being that the creation of a Global Arbitration Ethics Council was ‘an idea whose time has not yet come’.25

The Powers of the Arbitral Tribunal Perhaps arbitral tribunals lack power in confronting guerrilla tactics, and this is one of the reasons why guerrilla tactics are a problem in the first place? Several articles support the idea that arbitrators are actually well-equipped to punish misbehaviour.26 For example, Horvath and Neil refer to general powers such as proceeding ex parte, granting interim measures, and ordering costs.27 They also refer to the arbitral tribunal’s discretion to draw adverse inferences as a remedy, and refer to the 21

The Arbitration Rules of the LCIA, effective 1 October 2014 accessed 17 May 2020, (the LCIA Arbitration Rules 2014). The Annex is maintained in the current Arbitration Rules of the LCIA, effective 1 October 2020 accessed 15 September 2020, (the LCIA Arbitration Rules 2020). 22 SIArb Guidelines on Party-Representative Ethics, 26 April 2018 accessed 24 May 2020 (the SIArb Guidelines on Party-Representative Ethics). 23 Tan Jun Hong, ‘YSIAC Lunchtime Chat with Gary Born’, September 2018 accessed 1 May 2020. 24 Swiss Arbitration Association, ‘Statement on the Global Arbitration Ethics Council Discussions’ (2015) accessed 1 May 2020: ‘This meeting included representatives of the following arbitration associations and institutions: the Chartered Institute of Arbitrators (CIArb), the International Bar Association Arbitration Committee (IBA), the International Court of Arbitration of the International Chamber of Commerce (ICC), the Netherlands Arbitration Institute (NAI), the Singapore International Arbitration Centre (SIAC), the Swedish Arbitration Association (SAA), the Stockholm Chamber of Commerce (SCC), the Swiss Chambers Arbitration Institution (SCAI), the Vienna International Arbitration Centre (VIAC), and the WIPO Arbitration and Mediation Center’. 25 Swiss Arbitration Association, ‘ASA Working Group on Counsel Ethics Releases Latest Findings’ (2016) accessed 1 May 2020. 26 Abba Kolo, ‘Witness Intimidation, Tampering and Other Related Abuses of Process in Investment Arbitration: Possible Remedies Available to the Arbitral Tribunal’ (2010) 26(1) Arbitration International 45, 58–85; Reed (n 19) 100–101. 27 Günther J Horvath and Amanda Neil, ‘Guerrilla Tactics in International Arbitration’ in Romesh Weeramantry and John Choong (eds), (2017) 19(3) Asian Dispute Review 134.

Background to the Concept of Guerrilla Tactics in Arbitration

7

IBA Guidelines on Party Representation in International Arbitration and the LCIA Annex as significant developments for combating guerrilla tactics.28 Scherer points out that arbitral tribunals also have inherent powers that ‘exist independently from the express powers conferred to the tribunal and find their source in the tribunal’s function or nature’,29 although she mentions that such powers are limited, and that they ‘should be applied only if no other options are available’.30 We shall examine in more detail both the adequacy of the powers of the arbitral tribunal and their application in practice in Chap. 5. The differences between the arbitral and judicial processes have been emphasised above. National courts operate within a particular legal system and are less prone to the clash of legal cultures that regularly occurs in international arbitration. However, there are also similarities, necessarily, as they are both processes for adjudicating disputes and both processes may be faced with unfair attempts at preventing fair resolution. Could international arbitration perhaps borrow any concept or solution for the purposes of curbing guerrilla tactics from domestic courts? As an example, we shall look, inter alia, at the civil justice reforms that took place in Hong Kong court litigation in this respect as international arbitration is facing similar problems to those the court litigation system in Hong Kong did prior to the implementation of the civil justice reforms in 2009.

The Continued Growth of International Arbitration Despite the emergence of guerrilla tactics in arbitration, the number of arbitral institutions and parties to the New York Convention is increasing and arbitration cases are growing exponentially. At least four main theories seek to explain this phenomenon. One is that the use of guerrilla tactics is not frequent and therefore there might be disproportionate emphasis upon the problem. Even if this is so, should arbitration be a game of Russian roulette or should the practice of guerrilla tactics be curtailed? Two, the use of guerrilla tactics might not cause substantial harm. Of course, this will largely depend on the circumstances, such as the financial resources of the parties or the urgency of resolving a dispute. Three, the development of international arbitration might be due to new parties entering into arbitration, i.e. there are relatively few repeat players. Against that argument, surveys indicate that most of the parties who have participated in international arbitration will continue choosing and recommending the dispute resolution process as the method to resolve their disputes.31 Four, there is no real substitute for international arbitration. Whilst indeed there appears to be no precisely equivalent 28

Horvath and Neil (n 27) 135. Maxi Scherer, ‘Inherent Power to Sanction Party Conduct’ in Franco Ferrari and Friedrich Rosenfeld (eds), Inherent Powers of Arbitrators (Juris Publishing 2018) 110. 30 Scherer (n 29) 131. 31 QMUL 2018 survey (n 16) 2, 5, 8. 29

8

1 A Bird’s-Eye View

alternative to international arbitration, should there really be complacence over this matter on the basis that beggars can’t be choosers? Given the advancement of international arbitration, perhaps its standing ought rather to be protected as reputation generally is considered to be one of the most valuable assets. Failing that, parties might eventually be compelled to look for upcoming alternative methods such as the Hague Convention on Choice of Court Agreements,32 or the United Nations Convention on International Settlement Agreements Resulting from Mediation to resolve their dispute(s).33 Accordingly, coming back to the title and focus of this book, I would submit that the guerrilla should indeed be captured and returned to the jungle,34 i.e. we should work towards refining the framework and practice of international arbitration so as to eliminate, or at least minimise, guerrilla behaviours.

Scope of the Book The term ‘international arbitration’ is broad, and there are two matters that need to be clarified at the outset.

International Commercial Arbitration Firstly, as the title of this book denotes, the focus is specifically on international commercial arbitration, relating specifically to those ‘transactions entered into between parties in the course of their business activities’.35 Other areas of private 32

The Law Reform Committee of the Singapore Academy of Law, ‘Report of the Law Reform Committee on the Hague Convention on Choice of Court Agreements 2005’ (2013) 1 accessed 12 March 2020: ‘The objective of the Hague Convention on Choice of Court Agreements 2005 is to promote international trade through judicial co-operation by the mutual enforcement of choice of court agreements and the recognition and enforcement of the resulting judgments’. 33 However, mediation clauses tend to be incorporated in multi-tiered dispute resolution agreements in the form of a pre-condition prior to resorting to arbitration (or even litigation) rather than as a stand-alone clause. The reason being that unlike arbitration, a mediation process cannot proceed in the absence of one of the parties. Therefore, parties might be more inclined to enter into a multi-tiered arbitration agreement as opposed to just an arbitration agreement should they want the possibility of mediating potential dispute(s). 34 Lord Hacking and Sophia Berry, ‘Ethics in Arbitration: Party and Arbitral Misconduct’ in Julio César Betancourt (ed), Defining Issues in International Arbitration: Celebrating 100 Years of the Chartered Institute of Arbitrators (Oxford University Press 2016) 139 para 13.03: ‘put the guerrilla back where it belongs, in the jungle’. 35 Giuditta Cordero-Moss, International Commercial Contracts: Applicable Sources and Enforceability (Cambridge University Press 2014) 2.

Scope of the Book

9

law, such as employment law, family law, or consumer arbitration disputes, are not discussed. Moreover, international investment arbitration, although it falls within the ambit of international arbitration, usually involves a State and an investor, and the dispute usually, although not necessarily, arises out of treaties and involves public international law. International investment arbitration is not specifically covered in this book, as it ‘is an altogether different beast from’ international commercial arbitration.36 When one party is a State, arbitral tactics may take on a different character because of the State’s powers to fine or incarcerate individuals to subvert the arbitral process. Clearly, however, investment arbitration can overlap with commercial arbitration, and some of the authorities, such as cases, legislation, regulations, and secondary sources, cited in this book will be drawn from international investment arbitration when the examples are relevant to the international commercial arbitration context.

Institutional Arbitration Versus Ad Hoc Secondly, international arbitration can be categorised as either ad hoc or institutional.37 By way of analogy, picture a street fight where the participants make up the rules and fight without any overarching authority to guide or protect them, compared to fighting in a ring or in a controlled environment with recognised rules, time limits and authorisation. Although guerrilla tactics are found in both categories, this book does not primarily address ad hoc arbitration. First, in an ad hoc arbitration, the parties and the arbitrator(s) administer the arbitration proceedings themselves, whereas in an institutional arbitration, reliance is placed on the arbitral institution. We shall examine the role of arbitral institutions, together with that of the arbitral tribunal itself and consider whether they ought to inter alia ‘deal quickly and efficiently’ with guerrilla tactics.38 Second, ad hoc arbitration in some jurisdictions is considered invalid and thus, an arbitral award rendered by

36

Bantekas (n 15) 274. Thomas R Carbonneau, ‘The Exercise of Contract Freedom in the Making of Arbitration Agreements’ (2003) 36 Vanderbilt Journal of Transnational Law 1207: Ad hoc arbitration ‘places a substantial burden upon the parties to cooperate in the circumstances of dispute. The expectation of cooperation is likely to be unrealistic. Moreover, arbitral institutions have a good professional track record and have significant experience in the administrative aspects of arbitrations. Unless the parties themselves have substantial expertise in the arbitration process, institutional arbitration becomes a virtual necessity. Also, an award rendered under the auspices of a recognized arbitral institution may have a greater likelihood of enforcement for reasons of institutional reputation. The real question involves choosing among the arbitral institutions’. 38 Simon Greenberg, Christopher Kee and J Romesh Weeramantry, International Commercial Arbitration: An Asia-Pacific Perspective (Cambridge University Press 2011) 27. 37

10

1 A Bird’s-Eye View

an ad hoc tribunal might not be enforceable, depending on where enforcement is sought.

Who Are the Guerrillas? With regard to the scope of the guerrilla tactics under discussion, three points ought to be highlighted at the outset. One, the emphasis is on guerrilla tactics adopted by the parties in dispute and their legal representatives, and, to a lesser extent, the arbitrators. Other participants referred to in the book are not discussed in detail. Two, although a party generally need not be represented by a lawyer in international arbitration, the term ‘legal representatives’ includes lawyers and non-lawyers, as representing a party in an arbitration usually entails responsibilities, such as drafting legal submissions, arguing points of substantive law and preparing evidence from factual and expert witnesses. Three, outright and extreme guerrilla tactics, such as kidnapping a witness or an arbitrator, or setting illegal wiretaps will not be discussed in detail as these are, thankfully, rare occurrences; and the only logical solution possible is to notify the relevant authorities, such as the police and/or the national bar association of the legal representative.39

Structure of This Book Following this introductory chapter, Chap. 2 (Fundamentals of International Arbitration) further analyses the fundamentals of international arbitration and considers further the different structures and dynamics of litigation and arbitration. Chapter 3 (The Nature of Guerrilla Tactics in International Arbitration) is devoted to identifying, describing and evaluating the various possible guerrilla tactics that might be adopted by the parties and their legal representatives, and the arbitrators. This is a broad topic as there are a number of ways to disrupt a level playing field, some of which have rarely been analysed in detail. A definition of guerrilla tactics in international arbitration is offered and thereafter adopted throughout for the purposes of this book. Next, we examine the use of guerrilla tactics in international arbitration. The results of surveys investigating the problem are presented, indicating instances where participants in arbitration gave an account of their experiences of guerrilla tactics and/or conveyed their dissatisfaction with the arbitral process as a result of the use of such tactics. We also examine attempts to address the problem by codifying ethical standards and rules regulating the behaviour of legal representatives in international 39

Horvath and Neil (n 27) 135.

Structure of This Book

11

arbitration. The chapter presents different case scenarios in order to consider how and why guerrilla tactics might be deployed and attempts to generate new insights. The goal of Chap. 3 is not to imagine or introduce every type of guerrilla tactic, but rather to describe the thought processes of the participants in international arbitration, and to appreciate the impact that the deployment of such tactics might have on the arbitral process. Chapter 4 (Factors that may Encourage or Facilitate Guerrilla Tactics) focuses further on potential root causes of the problem, examining a range of factors that facilitate the deployment of guerrilla tactics by participants in international arbitration. As detectives traditionally say, motive may be important, but it is also useful to look at factors inherent in the arbitral process that create opportunities and increase temptations. Remedying the use of guerrilla tactics first requires the identification of all factors that might enable a participant in international arbitration to behave in such a way. Chapter 5 (Mechanisms to Control Guerrilla Tactics in International Arbitration) provides an overview of the sanctions available to arbitral tribunals, as well as touching on how arbitral institutions, courts and bar associations assist in curbing guerrilla tactics in international arbitration. Chapter 6 (Guerrilla Tactics in Court: A Study of the Use of Judicial Sanctions in Hong Kong) compares existing remedies to curb guerrilla tactics available in court litigation in Hong Kong to determine whether there are lessons for arbitration to be found in approaches to civil litigation reform. Chapter 7 (Curbing Guerrilla Tactics in International Arbitration: A Critical Review of Solutions and Directions) offers recommendations on how to combat the use of guerrilla tactics in international arbitration. Chapter 8 (Concluding Remarks) delivers the main conclusions of this book. A summary of the main points of the previous chapters is presented. Suggestions for future research in the field of guerrilla tactics in international arbitration are put forward. A brief additional chapter (Arbitration and COVID-19 Pandemic: Virtual Guerrilla Tactics) concentrates on ‘virtual guerrillas’ in the wake of inter alia the COVID-19 pandemic, the increasing impact of technology and the debate about whether there is a perhaps the need for ‘greener arbitrations’.

References Primary Sources Arbitration Rules LCIA Arbitration Rules, in force as from 1 October 2014. https://www.lcia.org/Dispute_Resolut ion_Services/lcia-arbitration-rules-2014.aspx. Accessed 17 May 2020

12

1 A Bird’s-Eye View

LCIA Arbitration Rules, in force as from 1 October 2020. https://www.lcia.org/Dispute_Resolut ion_Services/lcia-arbitration-rules-2014.aspx. Accessed 15 Septe 2020

International Conventions and Related Sources New York Arbitration Convention, ‘Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958’. http://www.newyorkconvention.org/english. Accessed 21 Sept 2021

Soft Law Instruments and Related Sources International Bar Association (IBA) Guidelines on Party Representation in International Arbitration in 2013, Adopted by a resolution of the IBA Council 25 May 2013. .https://www.ibanet.org/Pub lications/publications_IBA_guides_and_free_materials.aspx#collapse2. Accessed 24 May 2020 SIArb Guidelines on Party-Representative Ethics, 26 April 2018. https://www.siarb.org.sg/images/ SIARB_Party-Rep-Ethics_Guidelines_Aprl18.pdf. Accessed 24 May 2020

Secondary Sources Articles in Journals Carbonneau T R, ‘The Exercise of Contract Freedom in the Making of Arbitration Agreements’ (2003) 36 Vanderbilt Journal of Transnational Law 1207 Emerson F D, ‘History of Arbitration Practice and Law’ (1970) 19 Cleveland State Law Review Gaillard E, ‘Abuse of Process in International Arbitration’ (2017) ICSID Review Horvath G H and Neil A, ‘Guerrilla Tactics in International Arbitration’ in Romesh Weeramantry and John Choong (eds), (2017) 19(3) Asian Dispute Review KKolo A, ‘Witness Intimidation, Tampering and Other Related Abuses of Process in Investment Arbitration: Possible Remedies Available to the Arbitral Tribunal’ (2010) 26(1) Arbitration International Mosk R M, ‘Attorney Ethics in International Arbitration’ (2010) 5 Berkeley Journal of International Law Publicist Protopsaltis P M, ‘Book Review: G¨Unther J Horvath & Stephan Wilske (eds) Guerrilla Tactics in International Arbitration (Wolters Kluwer Law & Business, 2013), xxix-429pp’. (2014) 31(6) Journal of International Arbitration Rogers C, ‘Fit and Function in Legal Ethics: Developing a Code of Conduct for International Arbitration’ (2002) 23 Michigan Journal of International Law Strong S I, ‘Navigating the Borders Between International Commercial Arbitration and U.S. Federal Courts: A Jurisprudential GPS’ (2012) Journal of Dispute Resolution Sussman E and Ebere S, ‘All’s Fair in Love and War – Or Is It? Reflections on Ethical Standards for Counsel in International Arbitration’ (2011) 22(4) The American Review of International Arbitration

References

13

Books Bantekas I, An Introduction to International Arbitration (Cambridge University Press 2015) Cordero-Moss G, International Commercial Contracts: Applicable Sources and Enforceability (Cambridge University Press 2014) Dezalay Y and Garth B G, Dealing in Virtue: International Commercial Arbitration and the Construction of a Transnational Legal Order (University of Chicago Press 1996) Draetta U, Counsel as Client’s First Enemy in Arbitration? (JurisNet, LLC 2014) Grant J K, Securities Arbitration for Brokers, Attorneys, and Investors (Greenwood Publishing Group 1994) Greenberg S, Kee C and Weeramantry J R, International Commercial Arbitration: An Asia-Pacific Perspective (Cambridge University Press 2011) Hattaway H, Reflections of a Civil War Historian: Essays on Leadership, Society, and the Art of War (University of Missouri 2003) Jemielniak J, Legal Interpretation in International Commercial Arbitration (Routledge 2016) Kidane W, The Culture of International Arbitration (Oxford University Press 2017)

Chapters and Other Contributions in Books Lord Hacking and Berry S, ‘Ethics in Arbitration: Party and Arbitral Misconduct’ in Julio César Betancourt (ed), Defining Issues in International Arbitration: Celebrating 100 Years of the Chartered Institute of Arbitrators (Oxford University Press 2016) Reed L F, ‘Chapter 2, §2.04: Sanctions Available for Arbitrators to Curtail Guerrilla Tactics’ in Günther J Horvath and Stephan Wilske (eds), Guerrilla Tactics in International Arbitration (Kluwer Law International 2013) Rogers C, ‘Chapter 5: Guerrilla Tactics and Ethical Regulation’ in Günther J Horvath and Stephan Wilske (eds), Guerrilla Tactics in International Arbitration (Kluwer Law International 2013) Scherer M, ‘Inherent Power to Sanction Party Conduct’ in Franco Ferrari and Friedrich Rosenfeld (eds), Inherent Powers of Arbitrators (Juris Publishing 2018)

Electronic Articles, Webpages and Blogs Asprey R B, ‘Guerrilla Warfare’ (6 November 2019) Encyclopaedia Britannica. https://www.britan nica.com/topic/guerrilla-warfare. Accessed 15 May 2020 Swiss Arbitration Association, ‘Statement on the Global Arbitration Ethics Council Discussions’ (2015). https://www.arbitration-ch.org/en/asa/asa-news/details/983.statement-on-the-global-arb itration-ethics-council-discussions.html. Accessed 1 May 2020 Swiss Arbitration Association, ‘ASA Working Group on Counsel Ethics Releases Latest Findings’ (2016). https://www.arbitration-ch.org/en/asa/asa-news/details/993.asa-working-group-oncounsel-ethics-releases-latest-findings.html. Accessed 1 May 2020 Tan J H, ‘YSIAC Lunchtime Chat with Gary Born’, September 2018. https://siac.org.sg/69-siacnews/588-ysiac-lunchtime-chat-with-gary-born. Accessed 1 May 2020 The Editors of Encyclopaedia Britannica, ‘Guerrilla’ (21 June 2017) Encyclopaedia Britannica. https://www.britannica.com/topic/guerrilla. Accessed 14 May 2020

14

1 A Bird’s-Eye View

The Law Reform Committee of the Singapore Academy of Law, ‘Report of the Law Reform Committee on the Hague Convention on Choice of Court Agreements 2005’ (2013). https://www.sal.org.sg/Portals/0/PDF%20Files/Law%20Reform/2013-03%20-% 20Hague%20Convention%20on%20Choice%20of%20Court%20Agreements.pdf. Accessed 12 Mar 2020 The School of International Arbitration, Queen Mary University of London, ‘2010 International Arbitration Survey: Choices in International Arbitration’. http://www.arbitration.qmul.ac.uk/ media/arbitration/docs/2010_InternationalArbitrationSurveyReport.pdf. Accessed 30 Apr 2020 The School of International Arbitration, Queen Mary University of London, ‘2015 International Arbitration Survey: Improvements and Innovations in International Arbitration’. http:// www.arbitration.qmul.ac.uk/media/arbitration/docs/2015_International_Arbitration_Survey. pdf. Accessed 1 Jan 2020 The School of International Arbitration, Queen Mary University of London, ‘2018 International Arbitration Survey: The Evolution of International Arbitration’. http://www.arbitration.qmul. ac.uk/media/arbitration/docs/2018-International-Arbitration-Survey-report.pdf. Accessed 1 Jan 2020 The School of International Arbitration, Queen Mary University of London, ‘2021 International Arbitration Survey: Adapting Arbitration to a Changing World’. http://www.arbitration. qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey2021_19_WEB.pdf. Accessed 21 Septe 2021

Chapter 2

Fundamentals of International Arbitration

It is important to always remind ourselves why people choose arbitration instead of court litigation or other forms of dispute resolution. (Rimsky Yuen)1

Introduction This chapter serves as a basic overview to those who are new to the field of arbitration and would like to dip their toe in the water of international arbitration. It summarises the nature of international arbitration and discusses its growth, while revealing some similarities and differences between litigation and arbitration. When the parties to an agreement have no dispute resolution clause in a contract, including arbitration, ‘state court litigation will be the default option from a legal standpoint’.2 The goal of the chapter is not to supplant existing and well-known materials in the field of dispute resolution, but to provide an understanding of the relationships between the various participants in both litigation and arbitration. Understanding the structural and procedural features dispute resolution systems will assist in the analysis of the causes and possible methods of control of guerrilla tactics.

1

Navin G. Ahuja, ‘Rimsky Yuen, GBM, SC, JP and David W. Rivkin Co-Chairs of Hong Kong International Arbitration Centre (HKIAC)’ (August 2020) Hong Kong Lawyer accessed 5 November 2021. 2 Tanja V Pfitzner and Hans-Patrick Schroeder, ‘Do We Need a Woolf Reform for International Arbitration’ (2010) 1 Yearbook on International Arbitration 179. © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 N. G. Ahuja, Taming the Guerrilla in International Commercial Arbitration, International Law and the Global South, https://doi.org/10.1007/978-981-19-0075-4_2

15

16

2 Fundamentals of International Arbitration

The Nature of Arbitration In a nutshell,3 arbitration is a process that is largely shaped by party autonomy.4 It is a process whereby the parties in a dispute argue their case in front of one or more

3

It should be mentioned that there is no official definition of the term ‘arbitration’ despite the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (the New York Convention), art II stating that ‘each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration …’. and the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration 1985, with amendments as adopted in 2006 accessed 17 May 2020 (the UNCITRAL Model Law), art 7 providing two options for a definition and form of an arbitration agreement. Option 1 states ‘(1) “Arbitration agreement” is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (2) The arbitration agreement shall be in writing. (3) An arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means. (4) The requirement that an arbitration agreement be in writing is met by an electronic communication if the information contained therein is accessible so as to be useable for subsequent reference; “electronic communication” means any communication that the parties make by means of data messages; “data message” means information generated, sent, received or stored by electronic, magnetic, optical or similar means, including, but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy. (5) Furthermore, an arbitration agreement is in writing if it is contained in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other. (6) The reference in a contract to any document containing an arbitration clause constitutes an arbitration agreement in writing, provided that the reference is such as to make that clause part of the contract’. Option II provides that an ‘“Arbitration agreement” is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not’. 4 Peter Ashford, Handbook on International Commercial Arbitration (2nd edn, JurisNet, LLC 2014) 193; Zheng Sophia Tang, Jurisdiction and Arbitration Agreements in International Commercial Law (Routledge 2014) 4; UNCITRAL Model Law (2008, United Nations). (accessed 25 July 2019), art 19(1) for example, states: ‘Subject to the provisions of this Law, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings’. See also Howard Holtzmann and Joseph Neuhaus, A Guide To The UNCITRAL Model Law On International Commercial Arbitration: Legislative History And Commentary (Kluwer Law and Taxation Publishers, Deventer 1989) 564: Article 19 has been described as the ‘Magna Carta of Arbitral Procedure’ and the ‘most important provision of the model law’ in addition to Article 18 of the UNCITRAL Model Law, which provides that ‘the parties shall be treated with equality and each party shall be given a full opportunity of presenting his case’, i.e. natural justice. See also UNCITRAL Report of the Secretary-General, ‘Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration’ (25 March 1985) Records of the UNCITRAL, 18th Session UN Doc A/CN9/264 accessed 14 April 2020, where the Secretary-General’s report explains further the importance of Article 19 of the UNCITRAL Model Law: ‘Paragraph (1) guarantees the freedom of the parties to determine the rules on how their chosen method of dispute resolution will be implemented…They may…even opt for a procedure which is anchored in a particular legal system’. It further adds ‘Article 19 may be regarded as the most important provision

The Nature of Arbitration

17

decision-makers (the arbitrator [s]), rather than in a court.5 It is a consensual process, which means that the parties would usually have agreed beforehand (likely in their contractual relationship) to refer all or particular types of disputes to arbitration.6 The parties can—and really should to achieve a binding agreement to arbitrate— choose the legal or juridical place of the arbitration,7 the procedural law that should apply,8 and any relevant arbitral institution rules governing the procedure of the arbitration.9 They can even choose the language of the arbitration proceedings.10 Moreover, parties normally choose the number of arbitrators—typically one or three (an uneven number of arbitrators prevents any deadlocks). In the case of three, each side normally appoints an arbitrator of their choice to sit on the arbitral tribunal that of the model law. It goes a long way towards establishing procedural autonomy by recognizing the parties’ freedom to lay down the rules of procedure (paragraph (1)) and by granting the arbitral tribunal, failing agreement of the parties, wide discretion as to how to conduct the proceedings (paragraph (2)), both subject to fundamental principles of fairness (paragraph (3)). Taken together with the other provisions on arbitral procedure, a liberal framework is provided to suit the great variety of needs and circumstances of international cases, unimpeded by local peculiarities and traditional standards, which may be found in the existing domestic law of the place’. 5 Tony Cole and Pietro Ortolani, Understanding International Arbitration (Routledge 2019) Introduction: ‘Flipping a coin or engaging in armed combat might qualify as arbitration if you believe that a god or other higher power will determine the winner. But so long as you believe that the coin toss will be decided by luck, and the armed combat by whoever fights better, then there is no third party involved, and hence there is no arbitration’. 6 Georgios I Zekos, International Commercial and Marine Arbitration (Routledge-Cavendish 2008) 200. 7 Simon Greenberg, Christopher Kee and J Romesh Weeramantry, International Commercial Arbitration: An Asia–Pacific Perspective (Cambridge University Press 2011) 54: ‘The seat (or place) of arbitration is the jurisdiction in which an arbitration takes place legally. This must be distinguished from the location of any physical hearings or meetings that are held as part of the arbitration proceedings. The hearings or meetings do not necessarily have to be held at the seat of arbitration’. 8 The procedural law is different from substantive law that is applicable to the contract (i.e. the merits of the dispute). The procedural law governs the procedure of the arbitration and is relied on by the arbitral tribunal to fill gaps in the arbitration agreement and the arbitration rules. Unless provided otherwise, the law of the seat will usually be considered also to be the governing law of the arbitration agreement. 9 When stating any one of ‘arbitration rules’, ‘institutional rules’ or ‘procedural rules’, it refers to one and the same thing. Also see Lawrence Collins, ‘The Law Governing the Agreement and Procedure in International Arbitration in England’ in Julian DM Lew (ed), Contemporary Problems in International Arbitration (Martinus Nijhoff Publishers 1987) 132; arbitration institutions have their own set of arbitration rules in respect of arbitration proceedings. When the parties to an arbitration choose a set of arbitration rules, the rules are binding on the parties to the arbitration agreement provided that the rules are in compliance with the arbitration agreement and the relevant arbitration legislation. 10 Cesare Jermini and Andrea Gamba, ‘Language (Art. 17)’ in Tobias Zuberbühler, Christoph Müller and Philipp Habegger (eds), Swiss Rules of International Arbitration: Commentary (2nd edn, Juris Publishing 2013) 206: ‘There is no “official” language in arbitration proceedings in contrast to court proceedings which, for most part, are conducted in the official languages of the place where the court is situated. Art. 17(1) of the UNCITRAL Rules and institutional rules such as the ICC, LCIA, WIPO and AAA expressly recognize the parties’ freedom to choose the language they wish to use in arbitration’.

18

2 Fundamentals of International Arbitration

determines the dispute.11 The arbitrator of choice may come from any background and qualification, including nationality or cultural background.12 The position is very different from that of a court, where assigned judges derive their authority from the legal framework of the particular State. Although some powers of the arbitral tribunal may also be conferred by the operation of law, such as the power for the tribunal to rule on its own jurisdiction, many are expressly or indirectly derived from the parties by an agreed choice of institutional rules. All members of the tribunal are subject to a range of obligations, including the duty to act judicially, and a duty to be independent and impartial. If they are in breach of these duties, they may be subject to removal by a relevant arbitral institution or court, and/or their award may be subject to challenge. These powers, duties and sanctions form the context in which arbitrators make decisions, including deciding on how to respond when faced with guerrilla tactics. Parties in an arbitration can also usually contribute to the timetable of the arbitration, including the timing of the hearings, although this is ultimately subject to the availability of the arbitral tribunal.13 Finally, the parties generally have some say—under the supervision of the arbitral tribunal—in determining the procedural framework of an arbitration, such as the filing of pleadings, the scope of disclosure of documents, the calling of witnesses and appointment of experts, as well as the manner of the substantive hearing.14 So, on the one hand we see that much is made of the flexibility of the arbitral process, being such that ‘the essential reality of arbitration is that there are simply no fixed rules’;15 while on the other hand, by the time an arbitration actually occurs, the parties and tribunal will probably be constrained and empowered by a mixture of rules derived from law or from their own direct or indirect agreement.

11

Julian DM Lew, Loukas A Mistelis and Stefan M Kröll, Comparative International Commercial Arbitration (Kluwer Law International 2003) 248. 12 C Mark Baker and Lucy Greenwood, ‘The Regionalisation of International Arbitration: Maintaining International Standards in Appointing Arbitrators: A Comment on Jivraj v Hashwani’ in Patrick Wautelet, Thalia Kruger and Govert Coppens (eds), The Practice of Arbitration: Essays in Honour of Hans van Houtte (Hart Publishing 2012) 19. 13 Franz T Schwarz and Christian W Konrad, The Vienna Rules: A Commentary on International Arbitration in Austria (Kluwer Law International 2009) 457 para 20–107. 14 Kyriaki Noussia, Reinsurance Arbitrations (Springer-Verlag 2013) 137. 15 Cole and Ortolani (n 5) Introduction.

The Nature of Arbitration

19

Ad hoc v Institutional Arbitration. The majority of international arbitrations are administered by an arbitral institution in accordance with institutional rules, and the focus in this book is primarily on such arbitrations, in which institutional rules may be incorporated into the parties’ contract via an arbitration clause. Such a clause provides a powerful measure of protection against guerrilla tactics, because, as the established sets of rules are constantly evolving to improve the arbitral experience, the powers they bestow on the institution and the arbitrators will in many cases help to counter such tactics. Ad hoc arbitration is not administered by arbitral institutions, nor usually subject to institutional rules, but are, as a minimum, subject to the law of the place of arbitration. Ad hoc arbitration leaves the administration and detailed procedure of the arbitration up to the parties, which allows greater flexibility in the arbitration,16 although the parties may agree to adopt a ready-made set of rules, such as the United Nations Commission On International Trade Law (UNCITRAL) rules to guide them rather than drafting their own set of rules from scratch.17 Parties might choose ad hoc arbitration if ‘they wish to have control of the procedure and the mechanism rather than to be subjected to institutional administration or control’,18 and/or where they ‘deal regularly with each other and feel they can trust their counterparties to “play the game”’.19 Without any arbitration rules binding parties to the procedure, there is a risk that the parties will face a procedural impasse in the arbitration.20

16

Paul D Friedland, Arbitration Clauses for International Contracts (2nd edn, JurisNet, LLC 2007) 39. 17 Gary B. Born, International Commercial Arbitration (3rd edn, Kluwer Law International 2021) 191: ‘Ad hoc arbitrations are not conducted under the auspices or supervision of an arbitral institution. Instead, parties simply agree to arbitrate, without designating any institution to administer their arbitration. Ad hoc arbitration agreements will sometimes choose an arbitrator (or arbitrators), who is (or are) to resolve the dispute without institutional supervision or assistance. The parties will sometimes also select a pre-existing set of procedural rules designed to govern ad hoc arbitrations. For international commercial disputes, the United Nations Commission on International Trade Law (UNCITRAL) has published a commonly used set of such rules, the UNCITRAL Arbitration Rules. Where ad hoc arbitration is chosen, parties will sometimes designate an appointing authority, that will select the arbitrator(s) if the parties cannot agree (or if their chosen arbitrator is unable to serve) and that will consider any subsequent challenges to members of the tribunal. If the parties fail to select an appointing authority, then the national arbitration statutes of many states permit national courts to appoint arbitrators (although many practitioners regard this as less desirable than selection by an experienced appointing authority)’. 18 Lew, Mistelis and Kröll (n 11) 35; arbitral institutions can be involved in some cases as an appointing authority where the parties are unable to agree on the appointment of the arbitrators. 19 Michael Mcllwrath and John Savage, International Arbitration and Mediation: A Practical Guide (Kluwer Law International 2010) 106. 20 Friedland (n 16) 38.

20

2 Fundamentals of International Arbitration

More formal arbitration is provided by a permanent arbitral organisation with rules that regulate the services provided and other procedural aspects of arbitration. Arbitral institutions are generally ‘perceived by the parties more as a help than a hindrance’,21 and is more common.22 Moreover, ad hoc arbitration is not recognised in some jurisdictions, such as Mainland China.23

21

Carita Wallgren-Lindholm, ‘Ad Hoc Arbitration V Institutional Arbitration’ in Giuditta CorderoMoss (ed), International Commercial Arbitration: Different Forms and Their Features (Cambridge University Press 2013) 71; Gary B. Born, International Commercial Arbitration (2nd edn, Kluwer Law International 2014)169–170: ‘[A]rbitral institutions have promulgated sets of procedural rules that apply where parties have agreed to arbitration pursuant to such rules. Among other things, institutional rules set out the basic procedural framework and timetable for the arbitral proceedings. Institutional rules also typically authorize the arbitral institution to select arbitrators in particular disputes (that is, to serve as “appointing authority”), to resolve challenges to arbitrators, to designate the place of arbitration, to fix or influence the fees payable to the arbitrators and (sometimes) to review the arbitrators’ awards to reduce the risk of unenforceability on formal grounds. Each arbitral institution has a staff (with the size varying significantly from institution to another) and a decision-making body’. 22 Wallgren-Lindholm (n 21); Gary Born, International Arbitration: Law and Practice (Kluwer Law International 2012) 28; Sundaresh Menon CJ, ‘The Special Role and Responsibility of Arbitral Institutions in Charting the Future of International Arbitration’, Keynote Address, SIAC Congress 2018, 17 May 2018 5–6 < https://www.supremecourt.gov.sg/Data/Editor/Documents/SIAC% 20Congress%202018%20Keynote%20Address%20%20(Checked%20against%20delivery%20w ith%20footnotes%20-%20170518).pdf > accessed 16 May 2020; QMUL 2015 survey reveals ‘79% of the arbitrations that the respondents had taken part in over the preceding five years were institutional…[M]ost users tend to prefer institutional arbitration and as early as 1970, Ion Nestor, UNCITRAL’s special rapporteur, was able to write that “the future of arbitration lies in institutionalization”.’ 23 John Shijian Mo, ‘Interpretation and Application of the New York Convention in China’ in George A Bermann (ed), Recognition and Enforcement of Foreign Arbitral Awards: The Interpretation and Application of the New York Convention by National Courts (Springer 2017) 215. See also Stephen Knudtzon, ‘Arbitration in Norway: Features of the Oslo Chamber of Commerce’ in Cordero-Moss (n 21) 271: There are however jurisdictions such as Norway in which ad hoc arbitration might be more popular than institutional arbitration.

International Commercial Arbitration

21

International Commercial Arbitration With regard to ‘international’ arbitration, the definition of the notion varies from scholar to scholar and State to State.24 According to the UNCITRAL Model Law,25 ‘[a]n arbitration is international if: (a)

the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different States; or

(b)

one of the following places is situated outside the State in which the parties have their places of business: (i)

the place of arbitration if determined in, or pursuant to, the arbitration agreement;

(ii)

any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or

(c)

the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.26

International arbitration is also international in another respect, which has several implications for the purposes of this book. Unlike litigation of an international case before a national court, international arbitration tends not to reflect one particular legal culture. The conduct of international arbitration is shaped by the respective cultural and legal backgrounds of the parties themselves, their representatives, the arbitral tribunal, institutions and any applicable laws or guidance. As a result, there is a well-recognised risk of a ‘culture clash’ due to differing experiences and expectations. What is normal practice in one jurisdiction may be regarded as unethical in another, and may give rise to allegations of guerrilla tactics. The term ‘commercial’ is given a wide interpretation, and the UNCITRAL Model Law provides no strict definition. The footnote to Article 1 (1) of the UNCITRAL Model Law offers an illustrative and open-ended list of relationships that might be 24

Jean-François Poudret and Sébastien Besson, Comparative Law of International Arbitration (2nd edn, Sweet & Maxwell 2007) 1–3. 25 By way of background on the UNCITRAL Model Law, it is a template legislation, which jurisdictions can choose to adopt or follow but with suitable amendments depending on the custom and situation of the jurisdiction. The Model Law exists to guide legislators of each jurisdiction and to provide uniformity among arbitral legislation at an international level. See also Holtzmann and Neuhaus (n 4) 4: UNCITRAL was described by the General Assembly of the United Nations as ‘the core legal body within the United Nations system in the field of international trade law, [with a mandate] to co-ordinate legal activities in this field in order to avoid duplication of effort and to promote efficiency, consistency and coherence in the unification and harmonization of international trade law’. See also Holtzmann and Neuhaus (n 4) 10: The Model Law was created to improve the overall framework of international commercial arbitration by allowing different jurisdictions to adopt the model law. Such adoption would thereby allow uniformity of ‘arbitral procedures tailored to the needs of the international trade and universal standard of fairness’. Also see Holtzmann and Neuhaus (n 4) 583: Such needs could be ‘unimpeded by local peculiarities and traditional standards, which may be found in the existing domestic law of the place’. 26 UNCITRAL Model Law, art 1(3).

22

2 Fundamentals of International Arbitration

described as commercial in nature, ‘whether contractual or not’. The purpose of the footnote is to circumvent any technical difficulty that may arise, for example, in determining which transactions should be governed by a specific body of ‘commercial law’ that may exist in some legal systems.27

The Growth of International Arbitration The origins of arbitration go back to medieval times, where the parties in a disagreement would choose from the popes, priests, cardinal, bishops or municipalities to hear their arguments and resolve their dispute.28 However, during the nineteenth and into the early twentieth century, some courts took a negative stance towards arbitration. French courts have held arbitrations void because of the view that ‘one cannot find with arbitrators the qualities which one is sure to find with judges – integrity, impartiality, ability and scrupulousness of feelings necessary to render judgments’.29

27

Explanatory Note by the UNCITRAL Secretariat on the 1985 Model Law on International Commercial Arbitration as amended in 2006 3 para 12 accessed 17 May 2020. The New York Convention, too, does not define the term ‘commercial’ notwithstanding that the Convention, art I(3) provides that the Contracting State may ‘also declare that it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are commercial under the national law of the State making such declaration’. 28 Grace Xavier, ‘Evolution of Arbitration as a Legal Institutional and the Inherent Powers of the Court: Putrajaya Holdings Sdn Bhd v Digital Green Sdn Bhd’ (February 2010) ASLI Working Paper Series No 009 1–2 accessed 14 April 2020: suggests that in theory, arbitration could have started even earlier. ‘According to biblical theory, King Solomon was the first arbitrator when he settled the issue of who was the true mother of a baby boy. In the story, two mothers were making claims to one baby. Two of them had delivered baby boys. One of the babies died in the night and the mother whose baby had died was now claiming the surviving child as hers. King Solomon proposed that since neither was willing to relinquish their claim, it would be best to cut the baby into two and hand one-half to each of them. The true mother immediately protested, and said that she would rather give up her baby to the other woman rather than to see her baby killed. Solomon declared that the woman who had shown the compassion was the true mother and returned her baby to her. Thus he managed to find out the truth. Philip the Second, the father of Alexander the Great, used arbitration as a means to settle territorial disputes arriving from a peace treaty he had negotiated with the southern states of Greece as far back as 337 B.C’. 29 Robert Fisher, ‘Appeals on Questions of Law’ (First Annual New Zealand Arbitration Day, Auckland, 9 June 2006). accessed 17 May 2020 citing the Decision of the Cour de Cassation Cass civ 10 July 1843, S 1843, 1, 561 and D 1843, 1, 343.

The Growth of International Arbitration

23

US courts were sceptical about arbitration as well. They found that arbitration agreements were not enforceable as ‘the judgment of arbitrators is but rusticum judicium’.30 In other words, the decisions of the arbitrators were seen as arbitrary and inaccurate. English courts could also be doubtful of the arbitration process, and tenacious of their own position as interpreters of the law.31 With the acceptance of the hugely important New York Convention,32 which provides for the recognition and enforcement of arbitration agreements and awards, international arbitration became more acceptable, and its use grew.33 National arbitration laws influenced by the UNCITRAL Model Law now tend to minimise judicial interference in the arbitral process, which has consequently seen several developments in recent years. Five specific and crucial developments are discussed here. 1.

Increase in Choice of Arbitration as a Forum

Arbitration cases in general have increased significantly in number over the last several decades: • Major arbitration institutions such as the Hong Kong International Arbitration Centre (HKIAC), the Singapore International Arbitration Centre (SIAC), and the China International Economic and Trade Centre (CIETAC), combined, have seen arbitration cases grow from 200 annual disputes in the 1990s to over 3,500 arbitration annual disputes in 2018.34 30

Wesley A Sturges and Richard E Reckson, ‘Common-Law and Statutory Arbitration: Problems Arising From Their Coexistence’ (1962) 46 Minnesota Law Review 837. 31 Rowan Platt: ‘The Appeal of Appeal Mechanisms in International Arbitration: Fairness over Finality?’ (2013) 30(5) Journal of International Arbitration 535 citing Czamikow v Roth, Schmidt & Co., [1922] KB 478, 491. 32 New York Arbitration Convention, ‘Travaux Préparatoires - History 1923 - 1958’. accessed 14 April 2020: ‘The New York Convention was established as a result of dissatisfaction with the Geneva Protocol on Arbitration Clauses of 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927. The initiative to replace the Geneva treaties came from the International Chamber of Commerce (ICC), which issued a preliminary draft convention in 1953. The ICC’s initiative was taken over by the United Nations Economic and Social Council (ECOSOC), which produced an amended draft convention in 1955. That draft was discussed during a conference at the United Nations Headquarters in May–June 1958, which led to the establishment of the New York Convention’. 33 Emmanuel Gaillard and George A Bermann, Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards: New York, 1958 (Brill Nijhoff 2017) 5: ‘UNCITRAL considers the New York Convention to be one of the most important United Nations treaties in the area of international trade law and the cornerstone of the international arbitration system. Since its inception, the Convention’s regime for recognition and enforcement has become deeply rooted in the legal systems of its Contracting States and has contributed to the status of international arbitration as today’s normal means of resolving commercial disputes’. 34 Markus Altenkirch and Malika Boussihmad, ‘International Arbitration Statistics 2018 – Another busy year for Arbitral Institutions’ (2 July 2019) Global Arbitration News accessed 5 May 2020: that said, HKIAC and SIAC recorded a decrease in the number of

24

2 Fundamentals of International Arbitration

• The International Chamber of Commerce (ICC) administered nearly double the number of the cases in the year 2018 compared to the year 2000,35 while the American Arbitration Association (AAA) administered slightly more than double in 2018 compared to 2005.36 Similarly, the London Court of International Arbitration (LCIA) has administered more than twice the number of cases in the year 2018 compared to the year 2000,37 and in the year 2020, LCIA’s caseload ‘reached an all-time high’.38 2.

Increase in the Total Amount in Dispute in Arbitration Cases and in the Number of High Value Cases

The total amount in dispute in arbitration cases per year has been increasing. For example: • The total amount in dispute in all HKIAC arbitration cases in 2020 was approximately US$8.8 billion compared to US$3.8 billion in 2011.39 • For CIETAC, the total amount in dispute in 2018 exceeded approximately US$15.6 billion for the first time,40 and in 2020 the total amount in dispute was approximately US$17.3 billion.

new cases compared to 2017. See also HKIAC, ‘Statistics. Accessed 5 May 2020; SIAC, ‘Annual Report 2018’ accessed 5 May 2020; CIETAC, ‘CIETAC 2018 Work Report and 2019 Work Plan’ accessed 17 May 2020: ‘The total amount in dispute was RMB 101.59 billion, exceeding 100 billion for the first time, a year-on-year growth of 41.32%’. 35 ICC, ‘ICC Arbitration Figures Reveal New Record for Awards in 2018’ accessed 25 December 2019: 842 cases were administered in 2018. 36 David B Stephens, Robert D Stephens and John P Kohl, ‘A Longitudinal Review of Labour Relations Coursework in U.S. Business Schools:1977–2002-2010’ (2012) 12(4) Journal of Higher Education Theory and Practice 95: 4,229 cases were filed in 2005; AAA, ‘2018 B2B Key Statistics’ accessed 12 September 2021. See also SCC, ‘Statistics 2018’ < https:// sccinstitute.com/media/1678538/statistics-2018.pdf > accessed 12 May 2020, which reported that the total value in dispute commenced in 2018 amounted to EUR$13.3 billion. 43 Gerhard Wagner and Arvid Arntz, ‘Commercial Courts in Germany’ in Lei Chen and André Janssen (eds), Dispute Resolution in China, Europe and World (Springer 2020) 14. 44 Wagner and Arntz (n 43). 45 CIETAC Hong Kong Arbitration Center, ‘Introduction’. accessed 26 December 2019. 46 HKIAC, ‘HKIAC Seoul Office’. https://www.hkiac.org/about-us/hkiac-seoul-office. Accessed 26 December 2019;SIAC, ‘SIAC Seoul Office’. https://www.siac.org.sg/2014-11-03-13-33-43/aboutus/siac-seoul-office. Accessed 26 December 2019. 47 HKIAC, ‘HKIAC Achieves Breakthrough by Launching Office in Mainland China’. https:// www.hkiac.org/news/hkiac-achieves-breakthrough-launching-office-mainland-china.. Accessed 26 December 2019; SIAC, ‘SIAC Shanghai Office’< https://www.siac.org.sg/2014-11-03-13-3343/about-us/siac-shanghai-office> accessed 26 December 2019. 48 SIAC, ‘SIAC India Representative Offices’. https://www.siac.org.sg/2014-11-03-13-33-43/ about-us/siac-india-representative-offices. accessed 26 December 2019.

26

2 Fundamentals of International Arbitration

• The ICC opened an office in Hong Kong in 2008 and in Singapore in 2010 and was ‘the first non-Asian institution to establish an office’ in Mainland China in 2016.49 • The AAA International Centre for Dispute Resolution established its case management office in Singapore in 2019.50 Several new arbitral institutions have also been founded, for example: • The Astana International Financial Centre (AIFC) which incorporates the AIFC Court and the International Arbitration Centre, which was launched in January 2018 in Kazakhstan.51 • The Tashkent International Arbitration Centre (TIAC), which was launched in November 2018 in Uzbekistan.52 • The African Court of Mediation and Arbitration (CAMAR), which was launched in April 2019 in Morocco.53 • The Myanmar Arbitration Centre (MAC), which was launched in August 2019 in Myanmar.54 4.

Refinement of Arbitral Legislation and Institutional Rules

As noted, the status of arbitration globally has been bolstered by the adoption and refinement of arbitral legislation by States, and the increasing sophistication of the institutional rules of arbitral institutions. UNCITRAL prepared a Model Law, adopted in 1985, for the ‘desirability of uniformity of the law of the arbitral procedures and specific needs of international

49

ICC, ‘New Shanghai Office Lays Groundwork for ICC Asia Developments’. https://iccwbo. org/media-wall/news-speeches/new-shanghai-office-lays-groundwork-for-icc-asia-developments/ > accessed 26 December 2019. 50 Ministry of Law, Singapore, ‘Maxwell Chambers Suites Officially Opens Today Giving Yet Another Boost to Singapore’s Legal Hub Position’ (8 August 2019) < https://www.mlaw.gov.sg/news/press-releases/maxwell-chambers-suites-officially-opens-todaygiving-yet-another-boost-to-singapore-legal-hub-position > accessed 26 December 2019. 51 Astana Finance Days, ‘The launch of the AIFC International Arbitration Centre in London’ (28 June 2018) < https://astanafindays.org/en/news/prezentaciya-mezhdunarodnogo-arbitrazhnogo-cen tra-mfca-v-londone > accessed 6 January 2020. 52 The Tashkent Times, ‘Tashkent International Arbitration Center created under Chamber of Commerce’ (2018) < http://tashkenttimes.uz/national/3145-tashkent-international-arbitration-cen ter-created-under-chamber-of-commerce > accessed 11 May 2021. 53 The North Africa Post, ‘African Mediation & Arbitration Court opens in Morocco’ (10 April 2019) < https://northafricapost.com/29792-african-mediation-arbitration-court-opens-in-morocco.html > accessed 11 May 2021. 54 Asia Business Law Journal ‘Arbitration Centre Launches in Myanmar’ (11 September 2019) Vantage Asia < https://www.vantageasia.com/myanmar-launches-arbitration-centre/ > accessed 26 December 2019.

The Growth of International Arbitration

27

commercial arbitration practice’.55 The Model Law aims to provide a framework for an effective arbitral process, with minimum judicial intervention, in a supporting role only. Many countries have adopted the UNCITRAL Model Law with necessary customary or other changes. This uniformity in legislation across borders enables parties to expect a level of certainty in the legislative framework of their arbitration proceedings.56 States are concerned about keeping their arbitral legislation up to date. For instance, although the Hong Kong Arbitration Ordinance (Cap. 609) came into effect in June 2011, it has already seen some rounds of amendments to introduce important changes resulting from developments in arbitration.57 Developments in the field of institutional rules have included the introduction of modern tools such as powers to order expedited procedure and interim relief. Recent amendments to institutional and other rules include the following: • In 2016, the new SIAC Arbitration Rules came into effect. • The year 2018 saw amended arbitration institutional rules from HKIAC and DIS. • The LCIA revised its arbitral institutional rules in 2014 and again in 2020. In 2020, the new CEPANI Arbitration Rules, too, came into effect. • In 2021, the new ICC Arbitration Rules, Swiss Arbitration Rules and ACICA Arbitration Rules came into effect. 5.

Increase in the Number of States to the New York Convention

The New York Convention, which was available for signature in 1958 and entered into force in 1959, played a substantial role in the improvement in and evolution of international arbitration by providing for the international recognition and enforcement of arbitral agreements and awards. While 26 States had signed the New York Convention prior to its entry into force and fewer than that had ratified the Convention upon its entry into force,58 as of June 2021, the number of Contracting States has increased by more than sixfold. 55

Gerold Herrmann, ‘The UNCITRAL Model Law on International Commercial Arbitration: Introduction and General Provisions’ in Petar Šarˇcevi´c (ed), Essays on International Commercial Arbitration (Martinus Nijhoff 1989) 3 citing the General Assembly of the United Nations, in its resolution 40/72 of 11 December 1985. 56 J Brian Casey, Arbitration Law of Canada: Practice and Procedure (2nd edn, JurisNet, LLC 2011) 9. 57 Once in 2013: Department of Justice, ‘Subcommittee on Arbitration (Amendment) Ordinance 2013 (Commencement) Notice’ (October 2013) < https://www.legco.gov.hk/yr13-14/english/hc/ sub_leg/sc102/papers/sc1021105cb4-98-1-e.pdf > accessed 26 December 2019; and again in 2017: Department of Justice, ‘Arbitration (Amendment) Ordinance 2017 (Amendment Ordinance)’ (November 2019) < https://www.doj.gov.hk/eng/public/pdf/arbitration_briefNote.pdf > accessed 26 December 2019. 58 Gary B. Born, International Commercial Arbitration, vol 1 (Kluwer Law International 2009) 98: ‘Despite its present significance, the New York Convention initially attracted relatively few signatories or ratifications. Only 26 of the 45 countries participating in the Conference signed the Convention prior to its entry into force on 7 June 1959. Many of the countries that did sign the Convention prior to June 1959, such as Belgium, the Netherlands, Sweden and Switzerland, did not ratify it for several years thereafter. Other nations, including the United Kingdom and most Latin

28

2 Fundamentals of International Arbitration

International Arbitration and Litigation It has been said that international arbitration ‘has no rules, only limits’.59 No single source can or ought to attempt to specify every aspect of an arbitration, given that the procedure in each case will predominantly depend on the legal and cultural background of the parties to the dispute, their legal representatives, the arbitrators and even the industry.60 Taking the UNCITRAL Model Law for example, which contains eight chapters and 36 Articles,61 one can see that the objective of arbitration law is to provide the basic framework for an arbitration.62 The parties can, as mentioned above, decide on how they should fight their battle in the arena of arbitration, i.e. tailor-make their dispute resolution process by specifying the rules that are applicable.63 The selected rules may provide a more detailed procedural guide on how the arbitration is to be conducted, thereby ‘supplementing

American and Africa states, did not accede to the Convention until many years later. The United States did not ratify the Convention until 1970’. 59 Cole and Ortolani (n 5) 3. 60 United Nations Conference on Trade and Development (UNCTAD), ‘Dispute Settlement: International Commercial Arbitration’ (2005) 32: ‘The parties and their representatives may come from countries with different ways of conducting litigation and the arbitrators may come from yet other legal systems. It is not strange that they may have radically different ideas as to how the arbitration should be conducted. Although consensus is developing among arbitration practitioners about certain issues, significant cultural differences remain. These cultural differences have given rise to an abundant literature in the specialized periodicals’. 61 The UNCITRAL Model Law, c I contains the general provisions; c II deals with the definition and form of an arbitration agreement including the courts’ recognition of an arbitration agreement; c III focuses on the composition of an arbitral tribunal; c IV deals with the jurisdiction of the arbitral tribunal and the power to order interim measures; c V is related to the conduct of arbitral proceedings; c VI contains provisions concerning the making of arbitral award and termination of proceedings; c VII deals with recourse against arbitral awards; c VIII concentrates on the recognition and enforcement of arbitral awards. Commonwealth Secretariat, ‘UNCITRAL Model Law on International Commercial Arbitration Explanatory Documentation Prepared for Commonwealth Jurisdictions’ (The Commonwealth Secretariat 1991) 14, 16–17 < https://www.uncitral.org/pdf/english/texts/arb itration/ml-arb/Model-Law-Arbitration-Commonwealth.pdf > accessed 29 March 2020: It does not address inter alia the liability of an arbitrator, interests, costs allocation, the capacity of a party to enter into an arbitration agreement, the arbitrator’s fees. 62 Alastair Henderson, ‘Lex Arbitri, Procedural Law and the Seat of Arbitration’ (2014) 26 Singapore Academy of Law Journal 888. 63 Cole and Ortolani (n 5) 4.

International Arbitration and Litigation

29

or supplanting the procedural options of the’ chosen arbitration law.64 Additionally, there are various guidelines, which can be categorised as ‘soft laws’, each set concentrating on different areas, such as conflicts of interest, taking of evidence, interviewing prospective arbitrators or ethics.65 If a dispute is litigated rather than going to arbitration, there is no need for mutual consent or any kind of specific agreement in order to invoke the jurisdiction of the courts.66 The procedural framework and timetable in litigation proceedings are largely a matter left exclusively to the court’s discretion.67 If there is no valid choice of law clause and jurisdiction clause, the court will also decide on the law to be applied,68 where the hearing should take place, the procedure to be followed, and the identity of the judge, who is appointed to a particular Bench by the court.69 The ‘language of the proceedings is usually strictly determined by the official language at the seat of the court…from which the parties may not vary’.70 Further, although a party still largely retains choice of legal representation, it is normally confined to someone qualified in the jurisdiction in which the court in question is located.71 This territorial restriction does not exist in international arbitration.72 64

Henderson (n 62) 889; Michael J Moser and John Choong, ‘China and Hong Kong’ in FrankBernd Weigand (ed), The Practitioner’s Handbook on International Commercial Arbitration (2nd edn, Oxford University Press 2010) 272–273: In China for example, ‘[t]he PRC Arbitration Law sets out some general powers and obligations of the arbitral tribunal, including the obligation to notify the parties of the date of hearing; the power to decide whether to postpone a hearing on the request of a party; the power to render a default award in the absence of a party; and the power to render partial awards. However, it does not contain a list of extensive procedural powers as is the case in more mature jurisdictions. The arbitration rules often supplement the arbitral tribunal’s powers as set out in the PRC Arbitration Law. For example, the CIETAC Arbitration Rules set out the general principle that the arbitral tribunal shall examine the case in any way that it deems appropriate unless otherwise agreed by the parties, and that the arbitral tribunal may hold its deliberations at any place or in any manner it considers appropriate. The CIETAC Arbitration Rules also expressly provide that the arbitral tribunal may, if it considers necessary, issue procedural directions and lists of questions, hold pre-hearing meetings and preliminary hearings, and produce terms of reference “etc.”, unless otherwise agreed by the parties’. 65 William W Park, ‘The Procedural Soft Law of International Arbitration: Non-Governmental Instruments’ in Loukas A Mistelis and Julian DM Lew (eds), Pervasive Problems in International Arbitration (Kluwer Law International 2006) 141. 66 Michael Pryles, ‘Drafting Arbitration Agreements’ (1993) 15 Adelaide Law Review 5. 67 Andrew Horrocks (ed), Commercial Litigation: Jurisdictional Comparisons (European Lawyer October 2011) 12, 126, 221, 362, 393: for example, in Belgium, Guernsey, The Netherlands, Switzerland and the United Arab Emirates. 68 Marc Fallon and Stephanie Francq, ‘Private Enforcement of Antitrust Provisions and the Rome I Regulation’ in Jurgen Basedow, Stephanie Francq and Laurence Idot (eds), International Antitrust Litigation: Conflict of Laws and Coordination (Hart Publishing 2012) 78. 69 William J Barry, Appropriate Dispute Resolution (Wolters Kluwer 2018) 117. 70 Harold Frey and Dominique Müller, ‘Arbitrating M&A Disputes’ in Manuel Arroyo (ed), Arbitration in Switzerland: The Practitioner’s Guide (2nd edn, Kluwer Law International 2018) 1133. 71 Franz Xaver Stirnimann Fuentes, ‘Revision of Awards’ in Arroyo (n 70) 1271. 72 Michael Lazopoulos, ‘Part II: Commentary on the Swiss Rules, Article 15 [General provisions]’ in Arroyo (n 70) 612.

30

2 Fundamentals of International Arbitration

There are various factors parties may consider when choosing whether to arbitrate or litigate. Some of these are enforcement; neutral venue; confidentiality; qualities and expertise of judges versus arbitrators; number of arbitrators; finality; costs; flexibility; consistency/precedents; availability of expedited procedure and express summary procedure or early determination procedure; interim/emergency relief.

Enforcement One of the key features of international arbitration is that arbitral awards can be enforced internationally through the New York Convention.73 The New York Convention, consisting of a total of 16 Articles covering little more than four pages, is relatively brief and simple and is considered ‘the most important legal instrument in the history of international economic changes’,74 to which 169 out of 193 United Nations Member States have become a party.75 By so adopting the New York Convention, these Member States have undertaken to enforce arbitral awards as though they were final judgments of their own highest courts.76 This means that a party can take an arbitral award made in one New York Convention State and seek to enforce it in another New York Convention State through a relatively simple enforcement process.77 Of course, for parties to avail of this efficiency, they would generally have to choose a seat of arbitration in a jurisdiction that is a party to the New York Convention.78 Both States—the juridical seat and the place of enforcement—must therefore be Convention States.79 73

The New York Convention’s ‘principal aim is that foreign and non-domestic arbitral awards will not be discriminated against and it obliges Parties to ensure such awards are recognized and generally capable of enforcement in their jurisdiction in the same way as domestic awards. An ancillary aim of the Convention is to require courts of Parties to give full effect to arbitration agreements by requiring courts to deny the parties access to court in contravention of their agreement to refer the matter to an arbitral tribunal’. See generally the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) < http://www.newyorkconvention.org/ > accessed 29 December 2019. 74 Jan Paulsson, ‘Moral Hazard in International Dispute Resolution’, (2010) 25(2) ICSID Review: Foreign Investment Law Journal 340. 75 UNCITRAL, ‘Status: Convention on the Recognition and Enforcement of Foreign Arbitral Awards’ (New York, 1958) (the New York Convention) < < https://uncitral.un.org/en/texts/arb itration/conventions/foreign_arbitral_awards/status2 > accessed 23 November 2021. 76 Pedro J Martinez-Fraga, ‘Adam, How About a Second Bite at the Apple? Revisiting the Need for a Uniformity in the Application of Res Judicata to International Commercial and Treaty-Based Arbitration’ in Arthur W Rovine (ed), Contemporary Issues in International Arbitration and Mediation: The Fordham Papers 2011 (Martinus Nijhoff Publishers 2012) 149. 77 Andreas Börner, ‘Article III’ in Herbert Kronke and others (eds), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention (Kluwer Law International 2010) 116. 78 Jonathan Hill and Adeline Chong, International Commercial Disputes: Commercial Conflict of Laws in English Courts (4th edn, Hart Publishing 2010) 844 para 24.2.10. 79 Jan Paulsson, The Idea of Arbitration (Oxford University Press 2013) 210.

International Arbitration and Litigation

31

Once the arbitral tribunal makes an award, the winning party can present the arbitral award and the arbitration agreement to the relevant domestic court at the place of enforcement, which is generally where the losing party has assets.80 The court of the place of enforcement, in normal circumstances, recognises the arbitral award and enables its enforcement in an expedited manner.81 In litigation, there is no such overarching convention that can facilitate an expedited enforcement of court judgments. Enforcing or converting a domestic judgment in a foreign country can in many situations be very difficult and time-consuming. For example, judgments in the United States or Mainland China might not easily be enforced in Australia, as these countries are not listed in the Australian Foreign judgments Regulations 1992 and possibly new proceedings in these countries may have to be commenced, where the judgment would have mere evidentiary value.82 Although there exist some treaties for the reciprocal enforcement of foreign judgments, one example being Regulation (EU) No 1215/2012 (Recast Brussels Regulation), these are limited to only a few countries, mainly the European Union States.83 Moreover, although the Hague Convention on Choice of Court Agreements 2005 which came into force in 2015 treats court judgments in a way similar to the New York Convention, only a few States have ratified it to date.84

Neutral Venue In cross-border activities, parties may wish to avoid having to submit to the jurisdiction of the courts of the other party, perhaps because they believe the other party may have more leverage in its local courts, or in some cases because they are unfamiliar with or lack trust in the judicial system of that other party’s country.85 This perceived risk may be heightened where that opposing party is a State entity. To avoid this situation, parties often decide to adopt a ‘neutral venue’ instead.86 80

Peter Gillies, ‘Enforcement of International Arbitration Awards – The New York Convention’ in Roger Jones and Gabriël Moens (eds), International Trade and Business Law Review (Cavendish Publishing 2005) 19. 81 Anton G Maurer, Public Policy Exception Under the New York Convention: History, Interpretation and Application (JurisNet, LLC 2013) 147. 82 Neither the US nor China have agreed to substantial reciprocity in their courts’ treatment of Australian judgments as per the Foreign Judgments Act 1992 – Schedule Superior Courts. 83 Louise Hauberg Wilhelmsen, International Commercial Arbitration and the Brussels I Regulation: Elgar Arbitration Law and Practice (Edward Elgar Publishing 2018) 57 para 3.06. 84 Hague Conference on Private International Law (HCCH), ‘37: Convention of 30 June 2005 on Choice of Court Agreements’ < https://www.hcch.net/en/instruments/conventions/status-table/? cid=98 > accessed 27 December 2019. 85 Emmanuel Gaillard and John Savage, Fouchard, Gaillard, Goldman on International Commercial Arbitration (Kluwer Law International 1999) 1. 86 Bruce H Jackson, ‘Dispute Resolution Clauses I: Whether to Choose Arbitration’ in Grant Hanessian and Lawrence W Newman (eds), International Arbitration Checklists (2nd edn, JurisNet, LLC 2009) 210.

32

2 Fundamentals of International Arbitration

It is possible to include a choice of forum clause in the main contract expressly conferring jurisdiction on the courts of a neutral venue, failing which, an appropriate forum is usually selected by determining the closest connection to the contract.87 If the exercise results in the courts of one party being selected as the appropriate forum, there is a high possibility that the court hearing would be disadvantageous and highly inconvenient for at least one of the parties.88 In the case of arbitration, parties can decide on a venue by simply stating the legal seat or the place of the arbitration in the arbitration agreement.89 Parties to litigation and arbitration may consider other subsidiary factors, including the logistical and/or linguistic advantages or disadvantages of a particular venue.90 Arbitration is even more flexible, in that even where they choose a particular seat, parties can always agree to hold physical hearings in a place other than the seat to take advantage of cost savings or efficiency benefits.91 It is essential when drawing up international commercial contracts for contracting parties to incorporate either an arbitration clause or a choice of forum clause in international commercial contracts, as well as a choice of law clause, in order to avoid expensive jurisdictional disputes. For the same reason, care should be taken to make such choices unambiguous and clear.

87

Joel Lee Tye Beng, ‘Conflict of Laws’ (2016) 17 Singapore Academy of Law Annual Review of Singapore Cases 279; Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460. 88 André Janssen and Navin G Ahuja, ‘Bridging the Gap: The CISG as a Successful Legal Hybrid Between Common Law and Civil Law?’ in Francisco de Elizalde (ed), Uniform Rules for European Contract Law? (Hart Publishing 2018) 138. 89 Steven L Smith, ‘Enforcement of International Arbitral Awards under the New York Convention’ in Richard Chernick, Daniel M. Kolkey and Barbara Reeves Neal (eds), Practitioner’s Handbook on International Arbitration and Mediation (3rd edn, JurisNet, LLC 2012) 298. 90 Charles H Brower, ‘The Place of Arbitration’ in Todd Weiler (ed), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) 161. 91 Neil Andrews, Arbitration and Contract Law: Common Law Perspectives in Ius Gentium: Comparative Perspectives on Law and Justice 2016 (Springer 2016) 56.

International Arbitration and Litigation

33

Confidentiality Arbitration proceedings are generally confidential.92 However, confidentiality will depend on the place and the procedural law of the arbitration, and the choice of arbitral institutional rules.93 Some parties may worry their reputation might be affected if proceedings or the fact of their proceedings became public or certain parties would not want their trade secrets disclosed outside the confines of the arbitration proceedings.94 Hence, depending on whether the law of the chosen arbitral seat provides for it, the parties can agree expressly in the arbitration agreement for confidentiality to apply and also the extent of it. Or they can agree to rules which already provide for this,95 though usually there are some exceptions.96 The duty of confidentiality generally 92

For example, the Arbitration Rules of the LCIA, effective 1 October 2020 < https://www.lcia.org/ Dispute_Resolution_Services/lcia-arbitration-rules-2014.aspx > accessed 15 September 2020, (the LCIA Arbitration Rules 2020) art 30, states ‘30.1 The parties undertake as a general principle to keep confidential all awards in the arbitration, together with all materials in the arbitration created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain, save and to the extent that disclosure may be required of a party by legal duty, to protect or pursue a legal right, or to enforce or challenge an award in legal proceedings before a state court or other legal authority. The parties shall seek the same undertaking of confidentiality from all those that it involves in the arbitration, including but not limited to any authorised representative, witness of fact, expert or service provider. 30.2 Article 30.1 of the LCIA Rules shall also apply, with necessary changes, to the Arbitral Tribunal, any tribunal secretary and any expert to the Arbitral Tribunal. Notwithstanding any other provision of the LCIA Rules, the deliberations of the Arbitral Tribunal shall remain confidential to its members and if appropriate any tribunal secretary, save as required by any applicable law and to the extent that disclosure of an arbitrator’s refusal to participate in the arbitration is required of the other members of the Arbitral Tribunal under Articles 10, 12, 26.6 and 27.5. 30.3 The LCIA does not publish any award or any part of an award without the prior written consent of all parties and the Arbitral Tribunal’. 93 Ileana M Smeureanu, Confidentiality in International Commercial Arbitration (Kluwer Law International 2011) 17. 94 Smeureanu (n 93) 175. 95 For example, the 2018 HKIAC Administered Arbitration Rules, effective 1 November 2018 < https://www.hkiac.org/arbitration/rules-practice-notes/hkiac-administered-2018 > accessed 17 May 2020, (the HKIAC Arbitration Rules 2018) art 45 states: ‘45.1 Unless otherwise agreed by the parties, no party or party representative may publish, disclose or communicate any information relating to: (a) the arbitration under the arbitration agreement; or (b) an award or Emergency Decision made in the arbitration. 45.2 Article 45.1 also applies to the arbitral tribunal, any emergency arbitrator, expert, witness, tribunal secretary and HKIAC… 45.4 The deliberations of the arbitral tribunal are confidential…’. 96 For example, HKIAC Arbitration Rules 2018, art 45(3) states: ‘Article 45.1 does not prevent the publication, disclosure or communication of information referred to in Article 45.1 by a party or party representative: (a) (i) to protect or pursue a legal right or interest of the party; or (ii) to enforce or challenge the award or Emergency Decision referred to in Article 45.1; in legal proceedings before a court or other authority; or (b) to any government body, regulatory body, court or tribunal where the party is obliged by law to make the publication, disclosure or communication; or (c) to a professional or any other adviser of any of the parties, including any actual or potential witness or expert; or (d) to any party or additional party and any confirmed or appointed arbitrator for the purposes of Articles 27, 28, 29 or 30; or (e) to a person for the purposes of having, or seeking, third party funding of arbitration’.

34

2 Fundamentals of International Arbitration

applies to both the fact of the arbitral proceedings and documents created or disclosed as part of the arbitration process.97 By contrast, in litigation, nearly all court cases are open to the public.98 Accordingly ‘[l]awsuits can damage reputations and sometimes help competitors’.99 There are private proceedings in some circumstances, but that is an exception rather than the rule. There are some limits to this advantage of confidentiality in arbitration. When a party makes an application to a court of law in relation to the arbitration, for example to challenge or enforce the award, or to seek interim relief, then the confidentiality may not extend to such court proceedings, depending on which court is involved.100 For example, in the English courts, there is a presumption that an application to challenge an arbitral award will be heard in private unless a challenge relates to appeals on points of English law (see Sect. 69 of the English Arbitration Act). The judgment may not be anonymised, however, unless an application is made to that effect and granted.101

Qualities and Expertise of Judges Versus Arbitrators An arbitral tribunal generally consists of one or three arbitrators, depending on the type of arbitration to which the parties have agreed.102 Parties may have specific requirements. They may want to appoint an arbitrator from the same industry as the parties, or an arbitrator with a civil law rather than a common law background.103 If the dispute involves complex technical issues, the parties may want to appoint a 97

Domitille Baizeau and Juliette Richard, ‘Addressing the Issue of Confidentiality in Arbitration Proceedings: How is This Done in Practice?’ in Elliott Geisinger (ed), Confidential and Restricted Access Information in International Arbitration: ASA Special Series No 43 (JurisNet, LLC 2016) 54. 98 Anselmo Reyes, The Practice of International Commercial Arbitration: A Handbook for Hong Kong Arbitrators (Informa Law from Routledge 2017) 9. 99 Adesina Temitayo Bello, ‘Why Arbitration Triumphs Litigation: Pros of Arbitration’ < https:// poseidon01.ssrn.com/delivery.php?ID=760122118067096092111090126088066011060032009 009023085005124122125009117025114023092041103027101109063041077115020025122028 006050069029073037025068114086021121022003018086004082030120116101094026070127 092067070079011106067109103124010024102093098066071&EXT=pdf > accessed 11 March 2020. 100 Elza Reymond-Eniaeva, Towards a Uniform Approach to Confidentiality of International Commercial Arbitration (Springer 2019) 161. 101 Andrew Tweeddale, ‘Confidentiality in Arbitration and the Public Interest Exception’ (2005) 21(1) Arbitration International 59–69; City of Moscow v Bankers Trust Company [2004] EWCA Civ 314. 102 Jan Paulsson, Nigel Rawding and Lucy Reed, The Freshfields Guide to Arbitration Clauses in International Contracts (3rd edn, Kluwer Law International 2011) 82. 103 Daniel M Kolkey and Richard Chernick, ‘Drafting an Enforceable Arbitration Clause’ in Chernick, Kolkey and Neal (n 89) 37.

International Arbitration and Litigation

35

qualified technical expert rather than a lawyer, or a lawyer with relevant technical qualifications.104 If the tribunal consists of three arbitrators, generally each party appoints a single arbitrator,105 then jointly appoint the third or assign that task to the arbitrators already selected.106 If the parties cannot agree on the third arbitrator, then the relevant arbitral institution generally makes the third appointment.107 If parties have agreed for a sole arbitrator to decide the case, the parties can jointly appoint that arbitrator.108 If the parties cannot agree, then, again, the appointing authority normally steps in to appoint the arbitrator.109 In litigation, the parties in dispute are unable to tailor their tribunal to their particular preferences, and their dispute will be decided by an allocated judge who is by definition not of their choice, and who may therefore be without any technical or other relevant specialist experience.110 Of course, there is an upside to submitting a dispute to a judge rather than to arbitrators. Generally, judges are trained to make decisions.111 They must have some legal background.112 They have to know the law and know how to apply it. Judges usually possess vast experience in conducting hearings and determining legal issues, and, especially in jurisdictions where there are specialised commercial courts, they may be very familiar with international commercial disputes. By contrast, in arbitration, arbitrators are not actually required to have any legal background, although, in reality, an arbitral tribunal more often than not consists of qualified lawyers.113 104

Bommel van der Bend and others, ‘Article 31: Experts (Tribunal-Appointed)’ in Bommel van der Bend, Marnix Leijten and Marc Ynzonides (eds), A Guide to the NAI Arbitration Rules: Including a Commentary on Dutch Arbitration Law (Kluwer Law International 2009) 151. 105 Joachim G Frick, Arbitration in Complex International Contracts (Kluwer Law International 2001) 235. 106 Christopher R Drahozal, ‘Behavioral Analysis of Arbitral Decision Making’ in Christopher R Drahozal and Richard W Naimark (eds), Towards a Science of International Arbitration: Collected Empirical Research (Kluwer Law International 2005) 319. 107 Drahozal (n 106). 108 Yves Derains and Eric A Schwartz, A Guide to the ICC Rules of Arbitration (2nd edn, Kluwer Law International 2005) 149. 109 Derains and Schwartz (n 108). 110 Didier Danet, ‘A Cognitive Approach to Judicial Strategies’ in Antoine Masson and Mary J Shariff (eds), Legal Strategies: How Corporations Use Law to Improve Performance (Springer 2010) 184. 111 Danny Cullenward and David Weiskopf, ‘Science Advocacy and the Legal System: is Life Cycle Assessment Unconstitutional?’ in Jeanette L Drake, Yekaterina Y Kontar and Gwynne S Rife (eds), New Trends in Earth-Science Outreach and Engagement: The Nature of Communication (Springer 2014) 59. 112 For example, Judicial Office, The Judicial System of England and Wales: A Visitor’s Guide < https://www.judiciary.uk/wp-content/uploads/2016/05/international-visitors-guide-10a. pdf > accessed 5 May 2020: however, Magistrates of Justices of the Peace who act as judges in the Magistrates’ Court might not have a legal background. That said, they deal with criminal cases and they sit with a qualified legal adviser. 113 Mauro Rubino-Sammartano, International Arbitration Law and Practice (3rd edn, JurisNet, LLC 2014) 475: If an arbitrator is faced with difficult legal issues, such as, for example, an interim

36

2 Fundamentals of International Arbitration

Number of Arbitrators The parties are generally free to determine the number of arbitrators that hear and decide their case, and tend to prescribe the number of arbitrators in their agreement to arbitrate.114 Most arbitral institutions prescribe one or three arbitrators in their rules.115 If the parties are unable to decide on the number of arbitrators to be appointed, arbitration rules generally provide a default number of arbitrators for the task.116 The composition of a Bench in a court is, of course, not a matter for the parties to influence.

relief application, which is a very serious matter and can affect a party’s business and reputation, a non-lawyer arbitrator may find it challenging to apply the appropriate test for interim relief – which varies from jurisdiction to jurisdiction and procedure to procedure – and it is questionable whether the right outcome would be reached. That said, as a basic proposition, an arbitrator can educate himself or herself on the dos and don’ts as there are some courses available on becoming an arbitrator, which would assist to a degree. 114 Holtzmann and Neuhaus (n 4) 348: ordinarily, an uneven number of arbitrators may be needed, to prevent any deadlocks. 115 With a three-member tribunal, the parties have three professionals deciding the dispute of their case, instead of just one. There are obvious benefits to a three-member tribunal. It gives the parties the feel of importance of their case as appellate courts generally have more than one judge for the same reason. If there are differences in the legal, cultural and commercial backgrounds of the parties, a three-member tribunal might be more appropriate to possibly link such differences, given each party could appoint an arbitrator from their respective background. Moreover, the parties might feel more protected by their respected appointed arbitrators as they may be able to better understand their appointing party’s arguments and could also prevent and/or protect that party from any error or wrongdoing by the tribunal. Also, one arbitrator alone may not have the needed linguistic or other required skills. A three-member tribunal might be more suited to complex cases. For example, in one panel, the parties could elect at least one arbitrator with expertise on technical matters, possibly one on financial matters and one on case management matters. Furthermore, there is less likelihood of an arbitrator being partial or biased, as the arbitrators, when deliberating, will have to explain their opinion with reasoning, before an award is issued. Of course, one could nonetheless fight a cause in favour of a sole arbitrator. With a sole arbitrator, the fees and expenses of the arbitrators could be up to three times lower. In a complex case, expert witnesses could be relied upon and the cost still be significantly lower than a three-member tribunal. Scheduling meetings and hearings would be easier. Also, there would be no dissenting opinions undermining the arbitral award. 116 There is a split approach amongst many of the arbitral institutions on the default number of arbitrators to be appointed. Some provide a default rule for a sole arbitrator to be appointed whereas others provide a default rule for three arbitrators to be appointed. On the other hand, a few institutions, rather than having a default rule, provide the parties a limited time to reach an agreement after the claim has commenced, failing which, the institution would consider inter alia the circumstances of the case before deciding whether the case should be referred to one or three arbitrators.

International Arbitration and Litigation

37

Finality Traditionally arbitration has been seen as a quick route to a final binding result to a dispute. To this end, many arbitral laws and institutional rules do not give the parties a right to appeal an arbitral award and limit the grounds for challenge.117 There is sometimes a narrow exception whereby parties can lodge a limited appeal against an arbitral award on a point of law. Parties can also choose expressly to exclude any right to appeal in their agreement. Hence, an arbitral award is final and binding, subject to a party applying to nullify an award by way of setting aside or challenging proceedings, based only on the exhaustive and largely procedural grounds at the seat of arbitration.118 Furthermore, some institutional rules go as far as waiving the parties’ right to apply for setting aside the arbitral award.119 Where such waiver or exclusions are agreed, either expressly or by choice of law and/or rules, this allows the parties to save time and costs and provides certainty in the arbitral process.120 Recognition and enforcement of an arbitral award may also be refused by the court in the jurisdiction where enforcement is sought based also on the same grounds that are available for set-aside.121 117

For example, UNCITRAL Model Law, art 34 states: ‘(1) Recourse to a court against an arbitral award may be made only by an application for setting aside’. This is not the same as an appeal. 118 ibid; UNCITRAL Model Law, art 34(2) states: ‘An arbitral award may be set aside by the court specified in article 6 only if: (a) the party making the application furnishes proof that: (i) a party to the arbitration agreement referred to in article 7 was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this State; or (ii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; or (iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Law; or (b) the court finds that: (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State; or (ii) the award is in conflict with the public policy of this State’. 119 For example, the Arbitration Rules of CEPANI (the Belgian Centre for Arbitration and Mediation) effective 1 January 2020 < https://www.cepani.be/wp-content/uploads/2020/04/RULES-ENG2020.pdf > accessed 17 May 2020 (the CEPANI Arbitration Rules 2020), art 35 states: ‘1. The Award is final and is not subject to appeal. The parties undertake to comply with the Award without delay. 2. By submitting their dispute to arbitration under the Rules and except where an explicit waiver is required by law, the parties waive their right to any form of recourse insofar as such a waiver can validly be made’. 120 Theodore K Cheng, ‘Merits-Based Review of Arbitration Awards: A Potentially “Appealing” Option’ (Fall 2017) 22(2) The NYLitigator 21. 121 New York Convention, art V: ‘1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that: (a) The parties to the agreement referred

38

2 Fundamentals of International Arbitration

In court litigation, depending on the particular jurisdiction, parties may be able to appeal a judgment on fact and/or in law.122 They may be able to seek to appeal multiple times until the case is finally heard before the final appellate court. While appeals are legal and can address errors of law, and are beneficial for those who feel wronged by the judgment of the lower court(s), appealing is expensive, time-consuming and undermines certainty in the dispute resolution process.123 Commercial parties have historically often chosen relative speed and certainty rather than a lengthy ‘RollsRoyce’ appellate procedure hammering out nice legal nuances.

Costs The parties in arbitration have to bear the arbitrators’ fees.124 If a tribunal consists of three arbitrators instead of one, the parties will have to pay out an even higher sum. The parties may also have to pay the fees of the arbitral institution for its services; the costs of the venue of arbitration hearings; interpreter’s fees where relevant; transcribers’ fees; and all of these in addition to the counsel’s costs. In litigation, the parties may only have to pay an insignificant court fee; and counsel’s fees.125 If a defendant has a weak defence or chooses not to show up, as discussed further below, the court may be able to grant a summary or default to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or (b) The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or (c) The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or (d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or (e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made. 2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that: (a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or (b) The recognition or enforcement of the award would be contrary to the public policy of that country’. 122 Susan Cunningham-Hill and Karen Elder, Civil Litigation 2015–2016 (Oxford University Press 2015) 389. 123 Rupert M Jackson, Review of Civil Litigation Costs: Final Report (TSO) The Stationery Office) December 2009) 342. 124 Christian Bühring-Uhle, Lars Kirchhoff and Gabriele Scherer, Arbitration and Mediation in International Business (2nd edn, Kluwer Law International 2006) 96. 125 Amazu A Asouzu, International Commercial Arbitration and African States: Practice, Participation and Institutional Development (Cambridge University Press 2001) 49.

International Arbitration and Litigation

39

judgment in favour of the plaintiff, which would naturally save the winning party time and costs.126 In terms of costs, it is worth noting that counsel fees are often the most significant cost, and other arbitration-triggered costs are not terribly burdensome. Ultimately the question of whether a party does have to actually bear the costs of arbitration or litigation often depends on the outcome of the award or judgment, and the tribunal or court’s decision on liability for costs.

Flexibility Flexibility is an obvious strength to arbitration, as we have seen.127 Parties in arbitration can even agree to a ‘documents only’ or limited documents hearing.128 Court litigation does have some degree of flexibility, although it is fair to say that a significant criticism of court litigation is the rigidity of the procedure and the need to cross the t’s and dot the i’s when it comes to court filings and hearings, notwithstanding that it is the rigidity that may assist in the resolution of the parties’ dispute. The consequences of missing a filing deadline in court litigation are that the matter could be brought to an end. In contrast, it would only be in the most severe circumstances that an arbitration would end in this way.

Consistency/Precedents While in the common law world of court litigation there is a clearly established doctrine of judicial precedent, in arbitration there exists no such doctrine.129 This can be considered a downside of international arbitration. In fact, because awards are confidential, except for certain investment treaty cases, there is not even the knowledge of what ratio or legal reasoning the tribunal has reached on a question of

126

Carla Crifò, Cross-border Enforcement of Debts in the European Union: Default Judgments, Summary Judgments and Orders for Payment (Kluwer Law International 2009) 71, 152. 127 Tan Chuan Thye and John Choong, ‘Disclosure of Documents in Singapore International Arbitrations: Time for a Reassessment?’ (2005) 1(1) Asian International Arbitration Journal 54. 128 Hakeem Seriki, Injunctive Relief and International Arbitration (Informa Law from Routledge 2015) 16. 129 Alexis Mourre, ‘Precedent and Confidentiality in International Arbitration: The Case for the Publication of Arbitral Awards’ in Emmanuel Gaillard and Yas Banifatemi (eds), IAI Series on International Arbitration No 5, Precedent in International Arbitration (Juris Publishing, Inc 2008) 50.

40

2 Fundamentals of International Arbitration

law,130 which could lead to inconsistent decisions on the same point.131 Of course, it could be argued that if decisions are confidential and parties accept the risk of inconsistent decisions as part of a final procedure, then there is no real downside. That said, every time arbitrators apply the law of a particular country, they may be applying judicial precedents, and so suggesting that there is ‘no such doctrine’ could be arguable. Moreover, the world of international arbitration has attempted to offer solutions to this, whereby redacted awards can be made public.132 Furthermore, although the arbitral process and award itself may be subject to confidentiality, that confidentiality may be lost when the contents of that arbitral process are produced in another forum, for example, in an enforcement court of another jurisdiction, which does not offer implied confidentiality absent the parties’ agreement.

130

Mourre n (171). For example, three cases with almost identical facts went through arbitration but the arbitral tribunal in each case reached different outcomes: Texaco Overseas Petroleum Company and California Asiatic Oil Company v Government of Libya (1979) 53 ILR 389, Libyan Oil Company v Libyan Arab Republic Award of 12 April 1977 (1982) 62 ILR 40, and BP Exploration Co (Libya) Ltd v Government of the Libyan Arab Republic Award of 10 October 1973 (1979) 53 ILR 297. However, it could be that such inconsistent result is inevitable. For example, three cases with almost identical facts went through different forums of dispute resolution with each decision maker reaching different conclusions: Deutsche Bank AG v Democratic Socialist Republic of Sri Lanka, ICSID Case no ARB/09/02, Citibank v Ceylon Petroleum Corporation before the LCIA, and Standard Chartered Bank v Ceylon Petroleum Corporation [2011] EWHC 1785 (Comm), affirmed on appeal [2012] EWCA Civ 1049. 132 For example, ICC, ‘ICC Issues Updated Note Providing Guidance to Parties’ (19 December 2018) < https://iccwbo.org/media-wall/news-speeches/icc-issues-updated-note-provid ing-guidance-parties/ > accessed 1 June 2020: ‘all awards made as from 1 January 2019 may be published, no less than two years after their notification, based on an opt-out procedure…The parties may agree to a longer or shorter time-period. Any party may at any time object to publication of an award, or request that the award be sanitized or redacted. In such a case, the award will either not be published or be sanitized or redacted in accordance with the parties’ agreement’. See also David D Caron, ‘The Nature of the Iran-United States Claims Tribunal and the Evolving Structure of International Dispute Resolution’ (1990) 84(1) American Journal of International Law 104: ‘The Iran-United States Claims Tribunal has been called ‘the most significant arbitral body in history’; its awards, ‘a gold mine of information for perceptive lawyers’. See also LCIA, ‘LCIA Releases Challenge Decisions Online’ (12 February 2018) < https://www.lcia.org/News/lcia-rel eases-challenge-decisions-online.aspx > accessed 1 June 2020: ‘As part of its ongoing commitment to transparency, the LCIA is making available online digests of 32 LCIA arbitration challenge decisions from between 2010 and 2017. This release, together with the LCIA’s 2011 publication of 28 challenge decision summaries from between 1996 and 2010, provides users with an increasingly significant research tool, and one which illustrates the effectiveness of the LCIA’s challenge procedure’. 131

International Arbitration and Litigation

41

Availability of Expedited Procedure and Express Summary Procedure or Early Determination Procedure While arbitration has not generally provided for the possibility of disposal by summary judgment and default judgment, there are recent efforts to address this complaint by the introduction of the ‘expedited procedure’. Some arbitral institutions, including SIAC, ICC, Korean Commercial Arbitration Board (KCAB), Australian Centre for International Commercial Arbitration (ACICA) and HKIAC in recent years have introduced provisions where expedited procedure can be used for claims below a certain monetary threshold, or in some cases claims where the parties agree to this procedure or where there are exceptional circumstances.133 The effect is for the full arbitral process to be completed within a short span of time. More recently introduced is the availability of the express summary procedure,134 or early determination procedure.135 Unlike the expedited procedure which compresses the full arbitration process, the summary or early determination procedure entitles the parties to obtain an early determination on the merits of the case without requiring them to complete the entire arbitral process. Nevertheless, since these procedures are a more recent introduction to international arbitration, it is uncertain how they match up to the availability and success of summary and/or default judgment.136

133

Arbitration Rules of the Singapore International Arbitration Centre SIAC Rules 6th Edition, effective 1 August 2016 < https://www.siac.org.sg/our-rules/rules/siac-rules-2016 > accessed 17 May 2020 (the “SIAC Arbitration Rules 2016”), r 5; ICC 2021 Arbitration Rules, effective 1 January 2021 < https://iccwbo.org/dispute-resolution-services/arb itration/rules-of-arbitration/ > accessed 21 September 2021 (the “ICC Arbitration Rules 2021”), art 30, app VI; the 2016 KCAB International Arbitration Rules, effective 1 June 2016 < http://www.kcabinternational.or.kr/common/index.do?jpath=/contents/sub020101&CUR RENT_MENU_CODE=MENU0008&TOP_MENU_CODE=MENU0007 > accessed 31 May 2020 (the “KCAB Arbitration Rules 2016”), art 43; ACICA 2021 Arbitration Rules, effective 1 April 2021 < https://acica.org.au/wp-content/uploads/2021/04/ACICA_Rules_2021-WFF3.pdf > accessed 21 September 2021, art 8; and HKIAC Arbitration Rules 2018, art 42. 134 Charlie Lightfoot, James Woolrich and Thomas Wingfield, ‘Summary Awards in International Arbitration – Slow Getting up to Speed?’ (2017) Mealey’s International Arbitration Report 3: first introduced by SIAC in its arbitration rules which came into force in 2016 (see SIAC Arbitration Rules 2016, r 29), and subsequently followed by others such as SCC and HKIAC. 135 HKIAC Arbitration Rules 2018, art 43.1. 136 Tribunals may be reluctant to summarily dismiss a claim or defence because of the perceived risk of the arbitral award being challenged on the grounds that inter alia a party was unable to present its case.

42

2 Fundamentals of International Arbitration

Interim/Emergency Relief A common complaint of the parties in international arbitration has been that the arbitral tribunal only has limited power to grant interim relief.137 To a great extent, this issue has been resolved by more detailed and express provisions in arbitral rules and legislation which give the tribunal broader powers.138 That said, in some countries’ legislation, the court might not have the power to grant interim relief in an international arbitration because the provision on interim relief is applicable only to domestic-seated arbitration. Thus, if the parties cannot avail themselves of the arbitral tribunal’s powers, they are left remediless. This presumably would not happen in a court. There is of course the introduction of an ‘emergency arbitration’ concept (where an emergency arbitrator is appointed to grant an urgent relief) to allow the parties some recourse other than before the courts and prior to the constitution of the arbitral tribunal.

Conclusion International arbitration has grown exponentially and in theory should continue to grow due to the various advantages it has over court litigation, such as enforcement advantages, neutral venue, confidentiality, party-appointed arbitrators, finality, flexibility or party autonomy. However, court litigation does have specific advantages, and there are lessons arbitration can learn from court reforms as shall be discussed later. There are some basic similarities between litigation and arbitration. The ultimate aim of both forums is to resolve a dispute(s) between parties; a neutral third party decides the outcome of the dispute; and, unlike in a mediation where the outcome might be a win–win situation, both arbitration and litigation generally result in a win-lose outcome.139 Therefore, choosing between the two platforms is not an easy decision to make. Ultimately, it may depend on the nature and needs of each particular contract, set of parties, underlying transaction and the type of dispute(s) that may arise or has arisen.

137

Cole and Ortolani (n 5) 140; Jan Paulsson and Georgios Petrochilos, UNCITRAL Arbitration (Kluwer Law International 2018) 218. 138 Johannes Koepp, Dorine Farah and Peter Webster, ‘Arbitration in London: Features of the London Court of International Arbitration’ in Cordero-Moss (n 21) 248. 139 Bello (n 99).

References

43

References Primary Sources Arbitral Awards BP Exploration Co (Libya) Ltd v Government of the Libyan Arab Republic Award of 10 October 1973 (1979) 53 ILR 297 Citibank v Ceylon Petroleum Corporation, first Partial Award, LCIA ab# 81215, 31 July 2011 Deutsche Bank AG v Democratic Socialist Republic of Sri Lanka, ICSID Case no ARB/09/02 Libyan Oil Company v Libyan Arab Republic, Award of 12 April 1977 (1982) 62 ILR 40 Texaco Overseas Petroleum Company and California Asiatic Oil Company v Government of Libya (1979) 53 ILR 389

Arbitration Laws and Related Sources Commonwealth Secretariat, ‘UNCITRAL Model Law on International Commercial Arbitration Explanatory Documentation prepared for Commonwealth Jurisdictions’ (The Commonwealth Secretariat 1991). https://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/Model-Law-Arb itration-Commonwealth.pdf. Accessed 29 Mar 2020 Department of Justice, ‘Arbitration (Amendment) Ordinance 2017’ (November 2019). https://www. doj.gov.hk/eng/public/pdf/arbitration_briefNote.pdf. Accessed 26 Dec 2019 Explanatory Note by the UNCITRAL Secretariat on the 1985 Model Law on International Commercial Arbitration as amended in 2006. https://www.uncitral.org/pdf/english/texts/arbitration/mlarb/MLARB-explanatoryNote20-9-07.pdf. Accessed 17 May 2020 Hong Kong Arbitration Ordinance, Chapter 609. https://www.elegislation.gov.hk/hk/cap609. Accessed 30 May 2020 UNCITRAL Model Law on International Commercial Arbitration, 1985, as amended in 2006. https://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf. Accessed 31 May 2020

Arbitration Rules Arbitration Rules of the Australian Centre for International Commercial Arbitration (ACICA) 2021, in force from 1 April 2021. https://acica.org.au/wp-content/uploads/2021/04/ACICA_Rules_ 2021-WFF3.pdf. Accessed 21 Sept 2021 Arbitration Rules of the Belgian Centre for Arbitration and Mediation (CEPANI), in force as from 1 January 2020. https://www.cepani.be/wp-content/uploads/2020/04/RULES-ENG-2020. pdf. Accessed 17 May 2020 Arbitration Rules of the Singapore International Arbitration Centre (SIAC) (6th edn), in force as from 1 August 2016. https://www.siac.org.sg/our-rules/rules/siac-rules-2016. Accessed 17 May 2020 Hong Kong International Arbitration Centre Administered Arbitration Rules (HKIAC), in force as from 1 November 2018. https://www.hkiac.org/arbitration/rules-practice-notes/hkiac-administe red-2018. Accessed 17 May 2020

44

2 Fundamentals of International Arbitration

International Chamber of Commerce (ICC) 2021 Arbitration Rules, in force as from 1 January 2021. https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration/. Accessed 21 September 2021 LCIA Arbitration Rules, in force as from 1 October 2020. https://www.lcia.org/Dispute_Resolut ion_Services/lcia-arbitration-rules-2014.aspx. Accessed 15 Sept 2020 The 2016 Korean Commercial Arbitration Board (KCAB) International Arbitration Rules, in force as from 1 June 2016. http://www.kcabinternational.or.kr/common/index.do?jpath=/contents/ sub020101&CURRENT_MENU_CODE=MENU0008&TOP_MENU_CODE=MENU0007. Accessed 31 May 2020

Court Decisions England City of Moscow v Bankers Trust Company [2004] EWCA Civ 314 Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 Standard Chartered Bank v Ceylon Petroleum Corporation [2011] EWHC 1785 (Comm), affirmed on appeal [2012] EWCA Civ 1049

Domestic Legislation and Related Sources Australia: Foreign Judgments Act 1992, Statutory Rules 1992 No. 321 as amended made under the Foreign Judgments Act 1991. https://www.legislation.gov.au/Details/F2004C00005. Accessed 31 May 2020

International Conventions and Related Sources New York Arbitration Convention, ‘Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958’. http://www.newyorkconvention.org/english. Accessed 21 Sept 2021 Hague Conference on Private International Law (HCCH), ‘37: Convention of 30 June 2005 on Choice of Court Agreements’. https://www.hcch.net/en/instruments/conventions/status-table/? cid=98. Accessed 27 Dec 2019 New York Arbitration Convention, ‘Travaux Préparatoires—History 1923–1958’. http://www.new yorkconvention.org/travaux+preparatoires/history+1923+-+1958. Accessed 14 April 2020

References

45

Secondary Sources Articles in Journals Ahuja N G, ‘Rimsky Yuen, GBM, SC, JP and David W. Rivkin Co-Chairs of Hong Kong International Arbitration Centre (HKIAC)’ (August 2020) Hong Kong Lawyer. http://www.hk-lawyer.org/content/rimsky-yuen-gbm-sc-jp-and-david-w-rivkin-co-cha irs-hong-kong-international-arbitration. Accessed 5 Nov 2021 Caron D D, ‘The Nature of the Iran-United States Claims Tribunal and the Evolving Structure of International Dispute Resolution’ (1990) 84(1) American Journal of International Law Cheng T K, ‘Merits-Based Review of Arbitration Awards: A Potentially “Appealing” Option’ (Fall 2017) 22(2) The NYLitigator Henderson A, ‘Lex Arbitri, Procedural Law and the Seat of Arbitration’ (2014) 26 Singapore Academy of Law Journal Lee J T B, ‘Conflict of Laws’ (2016) 17 Singapore Academy of Law Annual Review of Singapore Cases Lightfoot C, Woolrich J and Wingfield T, ‘Summary Awards In International Arbitration – Slow Getting Up To Speed?’ (2017) Mealey’s International Arbitration Report Paulsson J, ‘Moral Hazard in International Dispute Resolution’, (2010) 25(2) ICSID Review: Foreign Investment Law Journal Platt R, ‘The Appeal of Appeal Mechanisms in International Arbitration: Fairness over Finality?’ (2013) 30(5) Journal of International Arbitration Pryles M, ‘Drafting Arbitration Agreements’ (1993) 15 Adelaide Law Review Stephens D B, Stephens R D and Kohl J P, ‘A Longitudinal Review of Labour Relations Coursework in U.S. Business Schools:1977-2002-2010’ (2012) 12(4) Journal of Higher Education Theory and Practice Sturges W A and Reckson R E, ‘Common-Law and Statutory Arbitration: Problems Arising From Their Coexistence’ (1962) 46 Minnesota Law Review Tan C T and Choong J, ‘Disclosure of Documents in Singapore International Arbitrations: Time for a Reassessment?’ (2005) 1(1) Asian International Arbitration Journal Tweeddale A, ‘Confidentiality in Arbitration and the Public Interest Exception’ (2005) 21(1) Arbitration International

Books Andrews N, Arbitration and Contract Law: Common Law Perspectives (Ius Gentium: Comparative Perspectives on Law and Justice) (Springer 2016) Ashford P, Handbook on International Commercial Arbitration (2nd, JurisNet, LLC 2014) Asouzu A A, International Commercial Arbitration and African States: Practice, Participation and Institutional Development (Cambridge University Press 2001) Barry W J, Appropriate Dispute Resolution (Wolters Kluwer 2018) Born G B, International Commercial Arbitration, vol 1 (Kluwer Law International 2009) Born G B, International Commercial Arbitration (2nd edn, Kluwer Law International 2014) Born G B, International Commercial Arbitration (3rd edn, Kluwer Law International 2021) Bühring-Uhle C, Kirchhoff L and Scherer G, Arbitration and Mediation in International Business (2nd edn, Kluwer Law International 2006) Casey J B, Arbitration Law of Canada: Practice and Procedure (2nd edn, JurisNet, LLC 2011) Cole T and Ortolani P, Understanding International Arbitration (Routledge 2019)

46

2 Fundamentals of International Arbitration

Crifò C, Cross-border Enforcement of Debts in the European Union: Default Judgments, Summary Judgments and Orders for Payment (Kluwer Law International 2009) Cunningham-Hill S and Elder K, Civil Litigation 2015-2016 (Oxford University Press 2015) Derains Y and Schwartz E A, A Guide to the ICC Rules of Arbitration (2nd edn, Kluwer Law International 2005) Frick J G, Arbitration in Complex International Contracts (Kluwer Law International 2001) Friedland P D, Arbitration Clauses for International Contracts (2nd edn, JurisNet, LLC 2007) Gaillard E and Bermann G A, Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards: New York, 1958 (Brill Nijhoff 2017) Gaillard E and Savage J, Fouchard, Gaillard, Goldman on International Commercial Arbitration (Kluwer Law International 1999) Greenberg S, Kee C and Weeramantry J R, International Commercial Arbitration: An Asia-Pacific Perspective (Cambridge University Press 2011) Holtzmann H and Neuhaus J, A Guide To The UNCITRAL Model Law On International Commercial Arbitration: Legislative History And Commentary (Kluwer Law and Taxation Publishers, Deventer 1989) Horrocks A (ed), Commercial Litigation: Jurisdictional Comparisons (European Lawyer October 2011) Jackson R M, Review of Civil Litigation Costs: Final Report (TSO) The Stationery Office) December 2009). https://www.judiciary.uk/wp-content/uploads/JCO/Documents/Reports/jackson-final-rep ort-140110.pdf. Accessed 30 May 2020 Lew J DM, Mistelis L A and Kröll S M, Comparative International Commercial Arbitration (Kluwer Law International 2003) Maurer A G, Public Policy Exception Under The New York Convention: History, Interpretation and Application (JurisNet, LLC 2013) Mcllwrath M and Savage J, International Arbitration and Mediation: A Practical Guide (Kluwer Law International 2010) Noussia K, Reinsurance Arbitrations (Springer-Verlag 2013) Paulsson J, The Idea of Arbitration (Oxford University Press 2013) Paulsson J and Petrochilos G, UNCITRAL Arbitration (Kluwer Law International 2018) Paulsson J, Rawding N and Reed L, The Freshfields Guide to Arbitration Clauses in International Contracts (3rd edn, Kluwer Law International 2011) Poudret J-F and Besson S, Comparative Law of International Arbitration (2nd edn, Sweet & Maxwell 2007) Reyes A, The Practice of International Commercial Arbitration: A Handbook for Hong Kong Arbitrators (Informa Law from Routledge 2017) Reymond-Eniaeva E, Towards a Uniform Approach to Confidentiality of International Commercial Arbitration (Springer 2019) Rubino-Sammartano M, International Arbitration Law and Practice (3rd edn, JurisNet, LLC 2014) Schwarz F T and Konrad C W, The Vienna Rules: A Commentary on International Arbitration in Austria (Kluwer Law International 2009) Seriki H, Injunctive Relief and International Arbitration (Informa Law from Routledge 2015) Smeureanu I M, Confidentiality in International Commercial Arbitration (Kluwer Law International 2011) Tang Z S, Jurisdiction and Arbitration Agreements in International Commercial Law (Routledge 2014) Wilhelmsen L H, International Commercial Arbitration and the Brussels I Regulation (Edward Elgar Pub 2018) Zekos G I, International Commercial and Marine Arbitration (Routledge-Cavendish 2008)

References

47

Chapters and Other Contributions in Books Baizeau D and Richard J, ‘Addressing the Issue of Confidentiality in Arbitration Proceedings: How is This Done in Practice?’ in Elliott Geisinger (ed), Confidential and Restricted Access Information in International Arbitration: ASA Special Series No 43 (JurisNet, LLC 2016) Baker C M and Greenwood L, ‘The Regionalisation of International Arbitration: Maintaining International Standards in Appointing Arbitrators: A Comment on Jivraj v Hashwani’ in Patrick Wautelet, Thalia Kruger and Govert Coppens (eds), The Practice of Arbitration: Essays in Honour of Hans van Houtte (Hart Publishing 2012) Bend B V D and others, ‘Article 31: Experts (Tribunal-Appointed)’ in Bommel van der Bend, Marnix Leijten and Marc Ynzonides (eds), A Guide to the NAI Arbitration Rules: Including a Commentary on Dutch Arbitration Law (Kluwer Law International 2009) Börner A, ‘Article III’ in Herbert Kronke and others (eds), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention (Kluwer Law International 2010) Brower C H, ‘The Place of Arbitration’ in Todd Weiler (ed), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (Cameron May 2005) Collins L, ‘The Law Governing the Agreement and Procedure in International Arbitration in England’ in Julian DM Lew (ed), Contemporary Problems in International Arbitration (Martinus Nijhoff Publishers 1987) Cullenward D and Weiskopf D, ‘Science Advocacy and the Legal System: is Life Cycle Assessment Unconstitutional?’ in Jeanette L Drake, Yekaterina Y Kontar and Gwynne S Rife (eds), New Trends in Earth-Science Outreach and Engagement: The Nature of Communication (Springer 2014) Danet D, ‘A Cognitive Approach to Judicial Strategies’ in Antoine Masson and Mary J Shariff (eds), Legal Strategies: How Corporations Use Law to Improve Performance (Springer 2010) Drahozal C R, ‘Behavioral Analysis of Arbitral Decision Making’ in Christopher R Drahozal and Richard W Naimark (eds), Towards a Science of International Arbitration: Collected Empirical Research (Kluwer Law International 2005) Fallon M and Francq S, ‘Private Enforcement of Antitrust Provisions and the Rome I Regulation’ in Jurgen Basedow, Stephanie Francq and Laurence Idot (eds), International Antitrust Litigation: Conflict of Laws and Coordination (Hart Publishing 2012) Frey H and Müller D, ‘Arbitrating M&A Disputes’ in Manuel Arroyo (ed), Arbitration in Switzerland: The Practitioner’s Guide (2nd edn, Kluwer Law International 2018) Gillies P, ‘Enforcement of International Arbitration Awards – The New York Convention’ in Roger Jones and Gabriël Moens (eds), International Trade and Business Law Review (Cavendish Publishing 2005) Herrmann G, ‘The UNCITRAL Model Law on International Commercial Arbitration: Introduction and General Provisions’ in Petar Šarˇcevi´c (ed), Essays on International Commercial Arbitration (Martinus Nijhoff 1989) Jackson B H, ‘Dispute Resolution Clauses I: Whether to Choose Arbitration’ in Grant Hanessian and Lawrence W Newman (eds), International Arbitration Checklists (2nd edn, JurisNet, LLC 2009) Janssen A and Ahuja N G, ‘Bridging the Gap: The CISG as a Successful Legal Hybrid Between Common Law and Civil Law?’ in Francisco de Elizalde (ed), Uniform Rules for European Contract Law? (Hart Publishing 2018) Jermini C and Gamba A, ‘Language (Art. 17)’ in Tobias Zuberbühler, Christoph Müller and Philipp Habegger (eds), Swiss Rules of International Arbitration: Commentary (2nd edn, Juris Publishing 2013) Kolkey D M and Chernick R, ‘Drafting an Enforceable Arbitration Clause’ in Richard Chernick, Daniel M. Kolkey and Barbara Reeves Neal (eds), Practitioner’s Handbook on International Arbitration and Mediation (3rd edn, JurisNet, LLC 2012)

48

2 Fundamentals of International Arbitration

Knudtzon S, ‘Arbitration in Norway: Features of the Oslo Chamber of Commerce’ in Cordero-Moss (ed), International Commercial Arbitration: Different Forms and Their Features (Cambridge University Press 2013) Koepp J, Farah D and Webster O, ‘Arbitration in London: Features of the London Court of International Arbitration’ in Giuditta Cordero-Moss (ed), International Commercial Arbitration: Different Forms and Their Features (Cambridge University Press 2013) Lazopoulos M, ‘Part II: Commentary on the Swiss Rules, Article 15 [General provisions]’ in Manuel Arroyo (ed), Arbitration in Switzerland: The Practitioner’s Guide (2nd edn, Kluwer Law International 2018) Martinez-Fraga P J, ‘Adam, How About a Second Bite at the Apple? Revisiting the Need for a Uniformity in the Application of Res Judicata to International Commercial and Treaty-Based Arbitration’ in Arthur W Rovine (ed), Contemporary Issues in International Arbitration and Mediation: The Fordham Papers 2011 (Martinus Nijhoff Publishers 2012) Mo J S, ‘Interpretation and Application of the New York Convention in China’ in George A Bermann (ed), Recognition and Enforcement of Foreign Arbitral Awards: The Interpretation and Application of the New York Convention by National Courts (Springer 2017) Moser M J and Choong J, ‘China and Hong Kong’ in Frank-Bernd Weigand (ed), The Practitioner’s Handbook on International Commercial Arbitration (2nd edn, Oxford University Press 2010) Mourre A, ‘Precedent and Confidentiality in International Arbitration: The Case for the Publication of Arbitral Awards’ in Emmanuel Gaillard and Yas Banifatemi (eds), IAI Series on International Arbitration No 5, Precedent in International Arbitration (Juris Publishing, Inc 2008) Park W W, ‘The Procedural Soft Law of International Arbitration: Non-Governmental Instruments’ in Loukas A Mistelis and Julian DM Lew (eds), Pervasive Problems in International Arbitration (Kluwer Law International 2006) Pfitzner T V and Schroeder H-P, ‘Do We Need a Woolf Reform for International Arbitration’ in Marianne Roth and Michael Geistlinger (eds), Yearbook on International Arbitration, vol 1 (DJØF Publishing 2010) Smith S L, ‘Enforcement of International Arbitral Awards under the New York Convention’ in Richard Chernick, Daniel M. Kolkey and Barbara Reeves Neal (eds), Practitioner’s Handbook on International Arbitration and Mediation (3rd edn, JurisNet, LLC 2012) Stirnimann Fuentes F X, ‘Revision of Awards’ in Manuel Arroyo (ed), Arbitration in Switzerland: The Practitioner’s Guide (2nd edn, Kluwer Law International 2018) Wagner G and Arntz A, ‘Commercial Courts in Germany’ in Lei Chen and André Janssen (eds), Dispute Resolution in China, Europe and World (Springer 2020) Wallgren-Lindholm C, ‘Ad Hoc Arbitration V Institutional Arbitration’ in Giuditta Cordero-Moss (ed), International Commercial Arbitration: Different Forms and Their Features (Cambridge University Press 2013)

Electronic Articles, Webpages and Blogs AAA, ‘2018 B2B Key Statistics’. https://go.adr.org/2018-b2b-statistics. accessed 25 December 2019 Altenkirch M and Boussihmad M, ‘International Arbitration Statistics 2018 – Another busy year for Arbitral Institutions’ (2 July 2019) Global Arbitration News. https://globalarbitrationnews.com/ international-arbitration-statistics-2018-another-busy-year-for-arbitral-institutions/. accessed 5 May 2020 Asia Business Law Journal ‘Arbitration Centre Launches in Myanmar’ (11 September 2019) Vantage Asia. https://www.vantageasia.com/myanmar-launches-arbitration-centre/. accessed 26 December 2019

References

49

Astana Finance Days, ‘The launch of the AIFC International Arbitration Centre in London’ (28 June 2018). https://astanafindays.org/en/news/prezentaciya-mezhdunarodnogo-arbitrazhnogo-centramfca-v-londone. accessed 6 January 2020 Bello A T, ‘Why Arbitration Triumphs Litigation: Pros of Arbitration’. https://poseidon01.ssrn. com/delivery.php?ID=760122118067096092111090126088066011060032009009023085005 124122125009117025114023092041103027101109063041077115020025122028006050069 029073037025068114086021121022003018086004082030120116101094026070127092067 070079011106067109103124010024102093098066071&EXT=pdf. accessed 11 March 2020 CIETAC, ‘CIETAC 2018 Work Report and 2019 Work Plan’. http://www.cietac.org/index.php?m= Article&a=show&id=15822&l=en. accessed 17 May 2020 CIETAC Hong Kong Arbitration Center, ‘Introduction’. http://www.cietachk.org/portal/mainPage. do?pagePath=\en_US\aboutUs. accessed 26 December 2019 Fisher R, ‘Appeals on Questions of Law’ (First Annual New Zealand Arbitration Day, Auckland, 9 June 2006). https://www.robertfisher.co.nz/wp-content/uploads/2013/06/05-Appeals-onQuestions-of-Law.pdf. accessed 17 May 2020 HKIAC, ‘HKIAC Achieves Breakthrough by Launching Office in Mainland China’. https:// www.hkiac.org/news/hkiac-achieves-breakthrough-launching-office-mainland-china. accessed 26 December 2019 HKIAC, ‘HKIAC Seoul Office’. https://www.hkiac.org/about-us/hkiac-seoul-office. accessed 26 December 2019 HKIAC, ‘Statistics’. https://www.hkiac.org/about-us/statistics. Accessed 5 May 2020 ICC, ‘ICC Arbitration Figures Reveal New Record for Awards in 2018’. https://iccwbo.org/mediawall/news-speeches/icc-arbitration-figures-reveal-new-record-cases-awards-2018/. Accessed 25 December 2019 ICC, ‘ICC Issues Updated Note Providing Guidance to Parties’ (19 December 2018). https://iccwbo. org/media-wall/news-speeches/icc-issues-updated-note-providing-guidance-parties/> accessed 1 June 2020 ICC, ‘New Shanghai Office Lays Groundwork for ICC Asia Developments’. https://iccwbo.org/ media-wall/news-speeches/new-shanghai-office-lays-groundwork-for-icc-asia-developments/> accessed 26 December 2019 JDSUPRA, ‘2020: A Record-Breaking Year for International Commercial Arbitration’ (10 June 2021). https://www.jdsupra.com/legalnews/2020-a-record-breaking-year-for-8640864/> accessed 12 September 2021 Judicial Office, ‘The Judicial System of England and Wales: A Visitor’s Guide’. https://www.judici ary.uk/wp-content/uploads/2016/05/international-visitors-guide-10a.pdf > accessed 5 May 2020 LCIA, ‘2018 Annual Casework Report’. https://www.lcia.org/lcia/reports.aspx> accessed 26 December 2019 LCIA, ‘Director-General’s Review of 2001’. https://www.lcia.org/lcia/reports.aspx> accessed 26 December 2019 LCIA, ‘LCIA Releases Challenge Decisions Online’ (12 February 2018). https://www.lcia.org/ News/lcia-releases-challenge-decisions-online.aspx> accessed 1 June 2020 Menon S CJ, ‘The Special Role and Responsibility of Arbitral Institutions in Charting the Future of International Arbitration’, Keynote Address, SIAC Congress 2018, 17 May 2018. https://www. supremecourt.gov.sg/Data/Editor/Documents/SIAC%20Congress%202018%20Keynote%20A ddress%20%20(Checked%20against%20delivery%20with%20footnotes%20-%20170518). pdf> accessed 16 May 2020 Ministry of Law, Singapore, ‘Maxwell Chambers Suites Officially Opens Today Giving Yet Another Boost to Singapore’s Legal Hub Position’ (8 August 2019). https://www.mlaw.gov.sg/ news/press-releases/maxwell-chambers-suites-officially-opens-today-giving-yet-another-boostto-singapore-legal-hub-position> accessed 26 December 2019 SCC, ‘Statistics 2016’. https://sccinstitute.com/media/246918/statistics-2016.pdf> accessed 12 May 2020

50

2 Fundamentals of International Arbitration

SCC, ‘Statistics 2018’. https://sccinstitute.com/media/1678538/statistics-2018.pdf> accessed 12 May 2020 SIAC, ‘Annual Report 2018’. http://www.siac.org.sg/images/stories/articles/annual_report/ SIAC_AR2018-Complete-Web.pdf> accessed 5 May 2020 SIAC, ‘SIAC India Representative Offices’. https://www.siac.org.sg/2014-11-03-13-33-43/aboutus/siac-india-representative-offices> accessed 26 December 2019 SIAC, ‘SIAC Seoul Office’. https://www.siac.org.sg/2014-11-03-13-33-43/about-us/siac-seouloffice> accessed 26 December 2019 SIAC, ‘SIAC Shanghai Office’. https://www.siac.org.sg/2014-11-03-13-33-43/about-us/siac-sha nghai-office> accessed 26 December 2019 The North Africa Post, ‘African Mediation & Arbitration Court opens in Morocco’ (10 April 2019). https://northafricapost.com/29792-african-mediation-arbitration-court-opens-inmorocco.html> accessed 11 May 2021 The School of International Arbitration, Queen Mary University of London, ‘2015 International Arbitration Survey: Improvements and Innovations in International Arbitration’. http://www. arbitration.qmul.ac.uk/media/arbitration/docs/2015_International_Arbitration_Survey.pdf> accessed 1 January 2020 The Tashkent Times, ‘Tashkent International Arbitration Center created under Chamber of Commerce’ (2018). http://tashkenttimes.uz/national/3145-tashkent-international-arbitration-cen ter-created-under-chamber-of-commerce> accessed 11 May 2021 Xavier G, ‘Evolution of Arbitration as a Legal Institutional and the Inherent Powers of the Court: Putrajaya Holdings Sdn Bhd v Digital Green Sdn Bhd’ (February 2010) ASLI Working Paper Series No 009. https://law.nus.edu.sg/asli/pdf/WPS009.pdf> accessed 14 April 2020 United Nations Documents, Explanatory Note by the UNCITRAL Secretariat on the 1985 Model Law on International Commercial Arbitration as amended in 2006. https://www.uncitral.org/pdf/ english/texts/arbitration/ml-arb/MLARB-explanatoryNote20-9-07.pdf> accessed 17 May 2020 UNCITRAL Model Law on International Commercial Arbitration, 1985, as amended in 2006. https://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf. accessed 31 May 2020 United Nations Conference on Trade and Development (UNCTAD), ‘Dispute Settlement: International Commercial Arbitration’ (2005). https://unctad.org/en/Docs/edmmisc232add38_en.pdf. Accessed 1 June 2020 UNCITRAL Report of the Secretary-General, ‘Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration’ (25 March 1985) Records of the UNCITRAL, 18th Session UN Doc A/CN9/264. https://undocs.org/pdf?symbol=en/A/CN.9/264. accessed 14 April 2020 UNCITRAL, ‘Status: Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (the New York Convention)’. https://uncitral.un.org/en/texts/arbitration/con ventions/foreign_arbitral_awards/status2. accessed 5 May 2020

Chapter 3

The Nature of Guerrilla Tactics in International Arbitration

When you visualize, then you materialize. (Denis Waitley)1

Introduction The chapter starts with a working definition of what we mean by ‘guerrilla tactics’, followed by a discussion of several surveys in which participants in international arbitration expressly or tacitly witnessed and conveyed dissatisfaction with the arbitral process due to the use of guerrilla tactics. Attempts to codify ethical standards and rules regulating the behaviour of legal representatives in international arbitration are also discussed. The surveys represent important empirical evidence of the use and perception of guerrilla tactics. Reference will be made to them, as well as to the attempts to codify ethical standards and rules, throughout the remainder of this book, for example when discussing types of tactics, and the potential factors which might enable them to proliferate. The final section of this chapter analyses categories of guerrilla tactics. It is noteworthy that there has been a surge of interest and discussion since Hwang linked the term ‘guerrilla tactics’ with international arbitration in 2005.2 Although scholars and practitioners make reference to various types of guerrilla tactics, they do so most often only in passing. There are few academic pieces that address the issue in great detail.3 Perhaps the scarcity of studies analysing the various forms of guerrilla 1

‘Full text of "The Secret"’ Internet Archive accessed 6 November 2021. 2 Michael Hwang ‘Why is there Still Resistance to Arbitration in Asia?’ in Aksen and others (eds), Global Reflections on International Law, Commerce and Dispute Resolution (ICC Publishing 2005) 401. 3 For example, see Abba Kolo, ‘Witness Intimidation, Tampering and Other Related Abuses of Process in Investment Arbitration: Possible Remedies Available to the Arbitral Tribunal’ (2010)

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 N. G. Ahuja, Taming the Guerrilla in International Commercial Arbitration, International Law and the Global South, https://doi.org/10.1007/978-981-19-0075-4_3

51

52

3 The Nature of Guerrilla Tactics in International Arbitration

tactics can be attributed to the nature of the topic, as close evaluation may educate or encourage participants in arbitration to misbehave. However, an understanding of the types of possible tactics is of the utmost importance in appreciating the possible negative impact these tactics can have on the participants in arbitration and the arbitral process itself. Without such analysis, the use of guerrilla tactics can only appear as rhetoric or an unsubstantiated perception. Different types of conduct can be termed guerrilla tactics. One of the themes of the chapter is the presentation of different case scenarios that allow visualisation of how, and possibly why, guerrilla tactics might be deployed and generate new insights. The purpose is to gain a deeper understanding of the tactics and demonstrate that the participants who ‘misbehave’ are not necessarily ‘bad apples in an otherwise healthy barrel’, including by taking into consideration the diversity of cultures and legislation.

Origin and Development of Guerrilla Tactics The term ‘guerrilla’ is derived from the Spanish word for ‘little war’ and is commonly associated with warfare.4 Anyone engaging in such warfare was referred to as a guerrillero (for males) or guerrillera (for females).5 While the expression ‘guerrilla warfare’ originated after Napoleon’s invasion of Spain in 1808 in the Spanish War of Independence, the phenomenon itself is older and was in fact described by a Chinese general in the fifth century BC.6 Black’s Law Dictionary describes a ‘guerrilla party’ as follows: In military law, an independent body of marauders or armed men, not regularly or organically connected with the armies of either belligerent, who carry on a species of irregular war, chiefly by depredation and massacre.7

Guerrilla tactics generally refer to ‘hostile activities committed by small bodies of soldiers in the enemy’s rear during a real war’8 which were considered legal. Usually, it would be the fighters who were militarily weaker who would employ such tactics, 26(1) Arbitration International 43–86; Emmanuel Gaillard, ‘Abuse of Process in International Arbitration’ (2017) ICSID Review 1–21; Judith Levine, ‘Ethical Dimensions of Arbitrator Resignations’ (2019) American Journal of International Law Unbound 290–295 accessed 12 May 2020. 4 Anthony James Joes, ‘Guerrilla Warfare’ in George Fink (ed), Stress of War, Conflict and Disaster (Elsevier 2010) 346. 5 Martha Crenshaw and John Pimlott, International Encyclopedia of Terrorism (Fitzroy Dearborn Publishers 1997) 149. 6 Crenshaw and Pimlott (n 5). 7 Henry Campbell Black, Black’s Law Dictionary (rev 4th edn, West Publishing Co 1968) 835. 8 Walter Laqueur, Guerrilla Warfare: A Historical and Critical Study (Routledge 1997) 391.

Origin and Development of Guerrilla Tactics

53

which would typically include an element of surprise to combat and weaken their stronger adversaries.9 When one attacks an enemy solely with a direct attack, it only strengthens the enemy’s resistance, both physically and mentally. Because the attack is landing where it is expected, there is no element of surprise. Thus, the enemy is balanced and prepared to receive one’s blows.10

Conversely, guerrilla tactics often contain an element of surprise to keep the opponent guessing and off guard. ‘What defines guerrilla tactics is not why they fight, nor when, nor where, but how: guerrilla war is a set of tactics. Guerrilla tactics are an effort to answer the question: How can the weak make war against the strong?’.11

Understanding the Notion of Guerrilla Tactics in International Arbitration Guerrilla tactics in international arbitration clearly refer to some kind of unethical, hostile or cynical activities committed during arbitration proceedings. Different terms have been used to describe them, such as dilatory tactics, foul play, misbehaviour, playing hardball, unethical conduct, ethical transgressions, hitting below the belt or abuse of process. Although various attempts at a definition have been made, ‘it becomes apparent that a single definition of the term does not exist’.12 Hwang argues that guerrilla tactics are employed ‘to exploit the procedural rules for their own advantage, seeking to delay the hearing and (if they get any opportunity) ultimately to derail the arbitration so that it becomes abortive or ineffective’.13 The general consensus appears to be that Hwang introduced the term guerrilla tactics 9

Max Boot, Invisible Armies: An Epic History of Guerrilla Warfare from Ancient Times to The Present (Liveright 2013) xxiii. 10 Mark R McNeilly, Sun Tzu and the Art of Modern Warfare (Upd edn, Oxford University Press) 133. 11 Anthony James Joes, Guerrilla Warfare: A Historical, Biographical and Bibliographical Sourcebook (Greenwood Press 1996) 4. 12 Catherine Rogers, ‘Chapter 5: Guerrilla Tactics and Ethical Regulation’ in Günther J Horvath and Stephan Wilske (eds), Guerrilla Tactics in International Arbitration (Kluwer Law International 2013) 313; Günther J Horvath and others, ‘Chapter 1, §1.02: Categories of Guerrilla Tactics’ in Günther J Horvath and Stephan Wilske (eds), Guerrilla Tactics in International Arbitration (Kluwer Law International 2013) 3; Preet Singh Oberoi, ‘Understanding Guerrilla Tactics in International Arbitration’ (2014) 3(2) Christ University Law Journal 74; Christoph Bruckschweiger, ‘Possibilities of Arbitral Tribunals to Sanction ‘Guerrilla Tactics’ by Counsel in the Absence of a Respective Agreement by the Parties’. accessed 31 December 2019; Vladimir Khvalei, ‘Guerrilla Tactic in International Arbitration, Russian View’, in Nikolaus Pitkowitz and others (eds), Austrian Yearbook on International Arbitration 2011 (Manz’sche Verlags- und Universitätsbuchhandlung 2011) 335. 13 Hwang (n 2).

54

3 The Nature of Guerrilla Tactics in International Arbitration

into arbitration.14 Moser stresses their irregular character, given that such tactics are ‘unusual, unconventional tactics designed to delay and obstruct proceedings’.15 According to Horvath and Neil, the use of the tactics refers ‘to a broad range of techniques that are used to undermine the integrity of the arbitral process’.16 Horvath and Neil categorised tactics on the basis of the severity of behaviour or techniques adopted. They noted that the behaviour may be classified as: (1) ethically borderline practices; (2) subtle guerrilla tactics; or (3) extreme guerrilla practices.17 The tactics ‘simultaneously range from least to most egregious and from most to least common’.18 Descriptions of guerrilla activity for the most part tend to assume that there is an imbalance of power or that a misbehaving party has a conscious intention to prolong the arbitration. This is logical, since a party with better prospects in the arbitration would not appear to gain from such tactics. We shall modify this slightly to suggest the following as a working definition for use in this book. The use of guerrilla tactics in international arbitration essentially corresponds to the utilisation of apparent strategic misconduct that may comprise an element of surprise, to ultimately shift power from one party to the other in their legal battle.19 The term apparent is adopted, as whether the actions are characterised as ‘misconduct’ may depend on the subjective perceptions of the participants in the arbitration, given their potentially different backgrounds, since international arbitration is a platform where arbitrators, the parties and their legal representatives of different cultural or legal background interact in an attempt to resolve the parties’ dispute(s).20 The general underlying purpose of using guerrilla tactics can be to impose a debilitating financial and psychological strain on the opposing party, thereby compelling that party to concede various points, and eventually withdraw from the arbitration and presumably settle.21 While the use of such tactics might appear to be unethical, it is not prima facie illegal and may not be punishable in isolation. Usually (but not

14

Stephan Wilske, ‘Arbitration Guerrillas at the Gate: Preserving the Civility of Arbitral Proceedings when the Going Gets (Extremely) Tough’ in Pitkowitz and others (n 12) 315; Robert Pfeiffer and Stephan Wilske, ‘Chapter 1, §1.03: The Emergence of the Guerrilla Tactics Phenomenon in International Arbitration’, in Horvath and Wilske (n 12) 16. 15 Michael Moser, ‘Seminar on “Guerrilla Tactics in International Arbitration”’ (2017) accessed 31 December 2019. 16 Günther J Horvath and Amanda Neil, ‘Guerrilla Tactics in International Arbitration’ in Romesh Weeramantry and John Choong (eds), (2017) 19(3) Asian Dispute Review 134. 17 Horvath and Neil (n 16) 132. 18 Horvath and Neil (n 16) 132. 19 Navin G Ahuja, ‘Transporting the Guerrilla in International Arbitration Back to the Wild?’ (2019) 23 Vindobona Journal of International Commercial Law and Arbitration 156. 20 Leon E Trakman, ‘Legal Traditions and International Commercial Arbitration’ (2006) 17(1) American Review of International Arbitration 25. 21 Ahuja (n 19).

Understanding the Notion of Guerrilla Tactics …

55

always), it is the party struggling in the legal battle who resorts to guerrilla activities, or they may just be vexatious or commercially motivated.22 As noted already, what constitutes guerrilla tactics might range from a mere display of aggression and ruthlessness in approach up to severe misconduct, such as criminal activity.23 In summary, the elements of guerrilla tactics are the use of apparent strategic misconduct by parties, legal representatives or arbitrators to shift power from one party to the other or to impose a debilitating financial and psychological strain.

Recent Surveys on the Topic of Guerrilla Tactics Gaillard suggests that international arbitration has become ‘plagued by misconduct and riddled with procedural disputes’.24 Further, various surveys since 2010 have been concerned with evidencing guerrilla tactics and assessing dissatisfaction with the arbitral process due to their use.

Surveys in 2010 Sussman and Ebere Survey Very little has been written about the frequency of the use of guerrilla tactics. This could be because there is no clear definition of the term; or that, given that arbitration is generally agreed (expressly or tacitly) to be confidential, such information may not be publicly available. To date, one informal survey has been employed by Sussman and Ebere to evaluate whether the use of guerrilla tactics in international arbitration is significant and frequent, without defining the term.25 Two questions were asked: 1.

22

As counsel in an arbitration or as an arbitrator, did you ever feel like one or both parties engaged in what you would call guerrilla tactics, whether technically unethical or not?

Ahuja (n 19) 156–157. Günther J Horvath, ‘Guerrilla Tactics in Arbitration, an Ethical Battle: Is There Need for a Universal Code of Ethics?’, in Pitkowitz and others (n 12) 297–313. 24 Gaillard (n 3) 1. 25 Edna Sussman and Solomon Ebere, ‘All’s Fair in Love and War – Or Is It? Reflections on Ethical Standards for Counsel in International Arbitration’ (2011) 22(4) The American Review of International Arbitration 612: there was no definition provided ‘on the theory that what needed to be discovered is whether counsel and arbitrators felt such tactics were being used and to learn what kinds of tactics they felt deserved to be labeled “guerrilla tactics.”’; in 2008, the IBA Arbitration Committee formed a Task Force on Counsel Ethics in International Arbitration and circulated a survey in 2010 to identify ‘(a) international arbitrations in which the conduct of counsel raised ethical issues; (b) international arbitrations where tribunals have reviewed (or declined to review) these issues and the decisions or awards setting forth their views and conclusions; (c) court decisions on counsel ethics in international arbitration; (d) disciplinary proceedings by professional bodies on ethical issues raised in international arbitrations; and (e) local, national, regional or international ethical codes and standards that impact practitioners in international arbitrations’. 23

56

3 The Nature of Guerrilla Tactics in International Arbitration 2.

If your answer was yes, please describe a tactic you regarded as a guerrilla tactic.26

As can be seen, Sussman and Ebere wanted to discover. whether counsel and arbitrators felt such tactics were being used and to learn what kinds of tactics they felt deserved to be labelled “guerrilla tactics”. This was not intended to be, and does not pretend to be, a statistically valid survey, but it is a reflection of 81 responses from practitioners around the world involved in arbitration as arbitrators or counsel.27

The survey revealed that 55 out of 81 arbitration practitioners (as arbitrators or counsel worldwide) had witnessed or experienced what they considered to be guerrilla tactics.28 The tactics identified by the practitioners included (underlining for emphasis): • Unreasonable document production / disclosure (witnessed and identified by 19 out of 81 interviewees). Examples included excessive adoption of the ‘to leave no stone unturned’ approach and requesting documents at the last moment and/or concealing relevant documents—especially ‘smoking guns’—in piles of irrelevant documents; • Delay tactics (witnessed and identified by 9 out of 81 interviewees), such as legal representatives pretending to be ill in order to request time extensions; • Creating conflicts (witnessed and identified by 7 out of 81 interviewees). For example, during the arbitration a party might switch legal representatives to create a conflict of interest with one or more of the arbitrators; • Frivolous challenges of the arbitrators (witnessed and identified by 8 out of 81 interviewees), such as challenging the arbitrator not based on his or her independence and impartiality, but for insincere reasons to slow down the process or intimidate the arbitrator; • Last-minute surprise (witnessed and identified by 18 out of 81 interviewees), such as introducing new arguments or submissions or witnesses on the night before the hearing or at the hearing itself; • Anti-arbitration injunction and other approaches to courts (witnessed and identified by 12 out of 81 interviewees), i.e. disingenuously initiating civil or criminal proceedings involving the court and/or making an application to the court for an anti-arbitration injunction to suspend or terminate the commencement or continuation of the arbitration; • Ex parte communications with the arbitrators (witnessed and identified by five out of 81 interviewees); • Witness tampering or intimidation (witnessed and identified by seven out of 81 interviewees); • Lack of respect and courtesy towards the tribunal and the opposing legal representatives (witnessed and identified by 17 out of 81 interviewees). Examples included repeat complaints of lack of due process upon a denial of an application and requests for reconsidering an unfavourable ruling; and 26

Sussman and Ebere (n 25). Sussman and Ebere (n 25). 28 Sussman and Ebere (n 25). 27

Recent Surveys on the Topic of Guerrilla Tactics

57

• Frustrating an orderly and fair hearing (witnessed and identified by 25 out of 81 interviewees). Examples included utilising all the available time, raising (too) many objections in order to fluster opposing counsel, pretending to have documents in hand to scare witnesses into testifying as desired but actually holding blank pieces of paper; incorrect translations of pivotal documents, putting witnesses on the witness list that counsel had no intention of calling to confuse the adversary and cover up who the real witnesses were; withdrawing the claim a day before hearing requiring a change in the order of proof and requiring counterclaimant to muster its case overnight; showing up at the hearing with boxes that appeared to be full of exhibits to intimidate the opposing party that were in fact empty; baiting witnesses and calling them liars; insisting upon the existence of supporting documentation but never submitting any.29 According to Sussman and Ebere, it is significant that 32% of the interviewees had not seen the use of such tactics. Furthermore, although 68% of the interviewees had witnessed or experienced the use of guerrilla tactics and identified the above-mentioned examples, they had rarely encountered their use. Accordingly, the ‘international arbitration bar is perhaps, generally speaking, a quite civilized and ethical bar. Indeed, several respondents volunteered that they saw guerrilla tactics employed to a much greater extent in litigation’.30 School of International Arbitration, Queen Mary University of London A survey in 2010 conducted by the School of International Arbitration, Queen Mary University of London consisted of an online questionnaire containing 78 questions. This was completed by 136 interviewees comprised of general counsel, heads of legal departments, specialist legal counsel and regional legal counsel.31 Additionally, 67 face-to-face or telephone interviews were conducted as part of the survey. When asked about the stages of arbitration that contributed to delays, according to the interviewees, the main stages of the arbitral process that contributed to delay were: • • • •

disclosure of documents (24%); written submissions (18%); constitution of the tribunal (17%); and hearings (15%).32

Furthermore, although it was believed that the parties (31%) contributed the most to the delays, followed by the arbitral tribunal (23%), the interviewees felt that the

29

Sussman and Ebere (n 25) 615. Sussman and Ebere (n 25) 613–615. 31 The School of International Arbitration, Queen Mary University of London, ‘2010 International Arbitration Survey: Choices in International Arbitration’ (QMUL 2010 survey) accessed 30 April 2020 34. 32 QMUL 2010 survey (n 31) 32. 30

58

3 The Nature of Guerrilla Tactics in International Arbitration

arbitral tribunal (30%) would be in the best position, followed by arbitral institutions (29%) and the parties (19%) to expedite the arbitral process.33 Also, [c]ontrol of proceedings was an issue raised by a number of interviewees and it was felt by many to be key to questions of cost and delay. A number of interviewees feel that arbitration must become more streamlined and disciplined to provide an entirely effective form of dispute resolution. It was pervasive throughout the questionnaire results and the interviews that parties prefer pro-active arbitrators who take control of proceedings. This is seen as an effective mechanism to limit cost and delay and reduce the risks of later challenge. Parties also prefer pro-active arbitration institutions that firmly adhere to deadlines and communicate effectively with the parties.34

Additionally, a desire for more information about arbitrators in order to make informed appointments and possibly avoid delays was expressed.35

Survey in 2015 School of International Arbitration, Queen Mary University of London A survey conducted in 2015 by the School of International Arbitration, Queen Mary University of London (QMUL) via an online questionnaire completed by 763 interviewees, accompanied by 105 personal interviewees, found that 90% of the interviewees preferred international arbitration as their dispute resolution mechanism.36 When the interviewees were asked about what they perceived to be the worst characteristics of international arbitration, the top four were: • • • •

cost of the arbitration (68%); lack of effective sanctions during the arbitral process (46%); lack of insight into arbitrators’ efficiency (39%); and lack of speed (36%).37 The lack of effective sanctions during the arbitral process was thought to fail to incentivise efficiency by counsel, while the desire to appoint productive arbitrators was hindered by lack of insight into arbitrators’ efficiency. Interviewees often stated that these two characteristics caused delay, which in turn resulted in increased cost.38

Given that sanctions serve the purpose of punishing ‘offenders’, the perception that there is a lack of effective sanctions forms an acknowledgment of the occurrence 33

QMUL 2010 survey (n 31) 32. QMUL 2010 survey (n 31) 32. 35 QMUL 2010 survey (n 31) 27. 36 The School of International Arbitration, Queen Mary University of London, ‘2015 International Arbitration Survey: Improvements and Innovations in International Arbitration’ (QMUL 2015 survey) accessed 1 January 2020 51. 37 QMUL 2015 survey (n 36) 7. 38 QMUL 2015 survey (n 36) 7. 34

Recent Surveys on the Topic of Guerrilla Tactics

59

of guerrilla tactics in international arbitration.39 Fifty-five percent of the interviewees felt that ‘the conduct of the arbitrators should be regulated more’ while 46% of the interviewees felt that ‘the conduct of the party representatives should be regulated more’.40 This is notwithstanding that 70% of the interviewees expressed satisfaction that there was currently (at the time) ‘an adequate amount of regulation in international arbitration’.41 Some interviewees commented that most institutional rules offer the mechanisms for arbitrators to be firm and decisive, but that these tools are often not used effectively. It was therefore suggested that rather than there being a ‘lack of effective sanctions during the arbitral process’, the issue is more a ‘lack of effective use of sanctions’ by arbitrators.42

Also, a growing concern which was revealed was the issue of ‘due process paranoia’.43 This issue was repeatedly raised in responses, including in nearly all the personal interviews. ‘Due process paranoia’ describes a reluctance by tribunals to act decisively in certain situations for fear of the arbitral award being challenged – or for fear of losing a future appointment – on the basis of a party not having had the chance to present its case fully. Many interviewees described situations where deadlines were repeatedly extended, fresh evidence was admitted late in the process, or other disruptive behaviour by counsel was condoned due to what was perceived to be a concern by the tribunal that the award would otherwise be vulnerable to challenge. Notably, even arbitrators identified this phenomenon as both problematic and commonplace. Indeed, many revealed in interviews that this concern has influenced decisions they have made when sitting as arbitrator.44

Survey in 2018 School of International Arbitration, Queen Mary University of London. A survey conducted in 2018 by the School of International Arbitration, Queen Mary University of London (QMUL) involved an online questionnaire of 53 questions 39

Oliver E Browne and Robert Price, ‘Saving Time and Money by Sanctioning Bad Behaviour’ (2018) 15(4) Transnational Dispute Management 3. 40 QMUL 2015 survey (n 36) 37 and 41 respectively. 41 QMUL 2015 survey (n 36) 34, 49. 42 QMUL 2015 survey (n 36) 10. 43 QMUL 2015 survey (n 36) 10. 44 QMUL 2015 survey (n 36) 10. See also Constantine Partasides and Ben Prewett, ‘Rediscovering the Lost Promise of International Arbitration’, in Laurent Lévy and Michael Polkinghorne (eds), Expedited Procedures in International Arbitration, Dossiers of the ICC Institute of World Business Law, vol 16 (Kluwer Law International; International Chamber of Commerce (ICC) 2017) 111. Unlike judges who do not owe their appointment to the parties, arbitrators are sometimes too wary of taking robust procedural decisions that deprive parties of the exhaustive procedural opportunities they demand. Instead, the well-meaning arbitrator instinctively defers to the parties’ procedural preferences for fear of their award being set aside or refused enforcement, for violating the losing party’s due process rights.

60

3 The Nature of Guerrilla Tactics in International Arbitration

completed by 922 interviewees.45 The interviewees ‘consisted of private practitioners (47%), full-time arbitrators (10%), in-house counsel (10%), “arbitrator and counsel in approximately equal proportion” (12%), and others (21%)’.46 The QMUL 2018 survey recorded unexpected complaints by the interviewees with regard to the use of dilatory tactics in arbitration.47 The survey nevertheless revealed that 97% of the interviewees indicated international arbitration to be their preferred method of dispute resolution and 99% of the interviewees ‘would recommend international arbitration to resolve cross-border disputes in the future’.48 When the interviewees were asked to identify the worst characteristics of arbitration, in answers similar to the 2015 survey, the cost of the arbitration ranked first (67%), followed by the lack of effective sanctions during the arbitral process (45%), the lack of power among arbitration practitioners in relation to third parties (39%), and the lack of speed (34%). The interviewees ‘complained about the various dilatory tactics employed by counsel that go unsanctioned either because the arbitrators are reluctant to order appropriate sanctions or because they do not possess the right instruments to do so’49 Although this is clearly linked to the second most common complaint relating to the lack of effective sanctions during the arbitral process, the report of the survey does not clarify whether this was the view of all 45% of the interviewees. Additionally, a considerable number of respondents pleaded for the broadening of arbitrators’ powers related to arbitral proceedings, as well as encouraging them to make better use of these powers. More to the point, many users believe that arbitrators need to adopt a bolder approach to conducting the proceedings and, if need be, apply monetary sanctions for the various dilatory tactics employed by counsel.50

The interviewees felt that due process paranoia might be the reason for the lack of such proactivity.51

45

The School of International Arbitration, Queen Mary University of London, ‘2018 International Arbitration Survey: The Evolution of International Arbitration’ (QMUL 2018 survey) accessed 1 January 2020 41. 46 QMUL 2018 survey (n 45). 47 QMUL 2018 survey (n 45) 27. 48 QMUL 2018 survey (n 45) 8. 49 QMUL 2018 survey (n 45) 8. 50 QMUL 2018 survey (n 45) 27. 51 QMUL 2018 survey (n 45) 27.

Recent Surveys on the Topic of Guerrilla Tactics

61

Survey in 2021 School of International Arbitration, Queen Mary University of London. A survey conducted in 2021 by the School of International Arbitration, Queen Mary University of London (QMUL), involved an online questionnaire of 31 questions completed by 1218 interviewees.52 The interviewees. consisted of counsel (private practitioners) (43%), full-time arbitrators (15%), in-house counsel (private sector) (7%), in-house counsel (government or state entity) (2%), ‘arbitrator and counsel in approximately equal proportion’ (11%), arbitral institution staff (5%), and others (17%).53

Subsequently, 198 video or telephone interviews were conducted ranging from 10 to 110 minutes long. Twenty-one percentage of the interviewees considered that institutions should adopt ‘rules giving extensive case management powers to arbitrators including robust sanctions in relation to the behaviour of parties and counsel’ to make themselves more attractive to users. Several interviewees ‘felt that arbitrators are still overly cautious when it comes to due process paranoia’,54 while some ‘referred to instances of arbitrators failing to adequately address guerrilla tactics by opposing counsel and parties’.55

Codification of Ethical Standards and Rules for Legal Representatives As international arbitration continues to grow, the need for establishing and regulating desired behaviour in the dispute resolution forum becomes greater. In addition to the surveys in the preceding section, the problem of guerrilla tactics in international arbitration is evidenced from recent attempts to codify ethical standards and rules for legal representatives. Unlike most, if not all, jurisdictions in which regulatory authorities regulate their lawyers by way of some domestic code of ethics, there appears to be an absence of any adequate and uniform code of ethics to govern legal representatives in international arbitration.56 That is not to say that the home ethical rules of legal representatives do not apply at all in international arbitration, but rather, amongst other things, there 52

The School of International Arbitration, Queen Mary University of London, ‘2021 International Arbitration Survey: Adapting Arbitration to a Changing World’ (QMUL 2021 survey) accessed 21 September 2021 35. 53 QMUL 2021 survey (n 52). 54 QMUL 2021 survey (n 52) 12. 55 QMUL 2021 survey (n 52) 12. 56 A code of ethics consists of rules that constitute acceptable and professional behaviour thereby ensuring the credibility of the legal representatives as well as the arbitration system.

62

3 The Nature of Guerrilla Tactics in International Arbitration

may be uncertainty as to whether such a set of rules can extend extraterritorially, and particularly so if there exists a set of conduct rules at the seat of the arbitration.57 In this day and age, there appears to be increasing uncertainty about what type of conduct is and is not acceptable, and three points are relevant to this uncertainty. First is that ‘ethical codes in most systems do not state expressly whether they extend extraterritorially, or whether they extend to international arbitral proceedings abroad’,58 and thus, legal representatives from even the same jurisdiction might have different views as to whether they are subject to their home ethical codes in an international arbitration setting.59 The second reason legal representatives might be uncertain as to whether their home rules apply is due to the double deontology problem, where legal representatives might be subject to multiple codes of conduct, such as being required to respect not only their national code of conduct, but also the conduct rules at the seat of the arbitration.60 Any clash between the national code of conduct and the conduct rules 57

Rogers (n 12) 316. See also Catherine Rogers, Ethics in International Arbitration (Oxford University Press 2014) 18: a survey conducted by the IBA Task Force on Counsel Conduct in Arbitration in 2010 found that 63% of practitioners believed they were subject to their home jurisdiction rules whereas 27% were uncertain and 10% had no option or did not believe that there were subject to home jurisdiction rules. 58 Rogers (n 12) 316; For example, solicitors qualified in England and Wales are subject to the code of conduct in the Solicitors Regulation Authority’s Handbook (SRA Handbook). The SRA Handbook requires solicitors to ‘not attempt to deceive or knowingly or recklessly mislead the court’. ‘The term “court” in the glossary is defined as ‘any court, tribunal or inquiry of England and Wales, or a British court martial, or any court of another jurisdiction’. Although the definition includes ‘tribunal’, the SRA Handbook separately defines ‘arbitration’ as ‘[a] way of seeking to resolve a dispute without going to court’. Therefore, it is unclear as to whether the SRA’s code of conduct applies to solicitors qualified in England and Wales when participating in international arbitration. That said, in the Decision of the Solicitors Disciplinary Tribunal of 18 July 2017, (case No 11592-2016), a lawyer and its law firm were ordered by the English Solicitors Disciplinary Tribunal to pay a fine ‘for not having identified a conduct of interest and not having protected the confidentiality of the information obtained’ as per the SRA code of conduct despite being in an international arbitration setting. By contrast, the position is clearer for barristers admitted in England and Wales who are subject to the duties specified in the Bar Standards Board Handbook (BSB Handbook) when providing legal services. The term ‘legal services’ in the glossary is defined as providing ‘legal advice representation and drafting or setting any statement of case witness statement affidavit or other legal document’. The BSB Handbook also specifies duties on barristers when acting in court, which is defined as ‘any court or tribunal or any other person or body whether sitting in public or in private before whom a barrister appears or may appear as an advocate’. Accordingly, legal representatives from even the same jurisdiction might have different views as to whether they are subject to their home ethical codes in an international arbitration setting and the uncertainty may give rise to the apparent utilisation of guerrilla tactics. 59 Cyrus Benson, ‘Can Professional Ethics Wait? The Need for Transparency in International Arbitration’ (2009) 3 Dispute Resolution International 81. 60 Rogers, Ethics in International Arbitration (n 57) 107; For example, Article 8.5(b) of the American Bar Association Model Rules of Professional Conduct (2000) states: ‘(a) Disciplinary Authority. A lawyer admitted to practice in this jurisdiction is subject to the disciplinary authority of this jurisdiction, regardless of where the lawyer’s conduct occurs. A lawyer not admitted in this

Codification of Ethical Standards and Rules …

63

at the seat of the arbitration might make it difficult if not impossible for the legal representative to comply with multiple codes of conduct.61 Third, there might be some confusion as to which ethical rules apply based on the choice of law or the conflict of laws rules.62 In the absence of any agreement between the parties, the puzzling question relates to which set of ethical rules the arbitral tribunal ought to apply in a scenario where the participants in the arbitration are all from different jurisdictions. Rogers provides the following example, asking, ‘Which ethical rules govern a New York lawyer’s confidentiality obligations to his or her French client in a Singapore-seated arbitration against a Japanese company that is represented by the German office of an English law firm?’.63 Even where home ethical rules are found to be applicable, legal representatives from different jurisdictions may be subject to a different code of ethics which inevitably places them on an unequal footing. Legal representatives, depending on the jurisdiction they practice or are qualified in, might have different obligations.64

jurisdiction is also subject to the disciplinary authority of this jurisdiction if the lawyer provides or offers to provide any legal services in this jurisdiction. A lawyer may be subject to the disciplinary authority of both this jurisdiction and another jurisdiction for the same conduct. (b) Choice of Law. In any exercise of the disciplinary authority of this jurisdiction, the rules of professional conduct to be applied shall be as follows: (1) for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise; and (2) for any other conduct, the rules of the jurisdiction in which the lawyer’s conduct occurred, or, if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction shall be applied to the conduct. A lawyer shall not be subject to discipline if the lawyer’s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer’s conduct will occur’. Similarly, the European Commission Directive 98/5/EC of 16 February 1998 To Facilitate Practice of The Profession of Lawyer On A Permanent Basis In A Member State Other Than That In Which The Qualification Was Obtained stipulates: Art. 4(1): ‘A lawyer practising in a host Member State under his home-country professional title shall do so under that title, which must be expressed in the official language or one of the official languages of his home Member State, in an intelligible manner and in such a way as to avoid confusion with the professional title of the host Member State’. Art. 6(1): ‘Irrespective of the rules of professional conduct to which he is subject in his home Member State, a lawyer practising under his home-country professional title shall be subject to the same rules of professional conduct as lawyers practising under the relevant professional title of the host Member State in respect of all the activities he pursues in its territory’. 61 Felix Dasser, ‘A Critical Analysis of the IBA Guidelines on Party Representation’ in Daniele Favalli (ed), Sense and Non-sense of Guidelines, Rules and Other Para-regulatory Texts in International Arbitration: ASA Special Series No 37 (JurisNet LLC 2015) 54. 62 Rogers,Ethics in International Arbitration(n 57) 108–111. 63 Rogers,Ethics in International Arbitration (n 57) 108–109. 64 Jane Wessel and Gordon McAllister, ‘Towards a Workable Approach to Ethical Regulation in International Arbitration’ (2015) 10(2) Canadian International Lawyer 7.

64

3 The Nature of Guerrilla Tactics in International Arbitration

For example, some might have a primary duty to the court;65 for others that duty might be secondary to their duty to their client.66 In some cases, a legal representative might not be a qualified lawyer since parties to the dispute in international arbitration generally need not be represented by lawyers. Representatives, therefore, may not even be subject to discipline for unethical conduct, whereas the opposing party’s counsel, if they are qualified, may be regulated by some or strict ethical standards. Uncertainty also arises in determining who should police legal representatives’ ethical behaviour and impose sanctions against those who are in breach of an applicable code. In 2010, one commentator in a 2010 Keynote Address to the International Council for Commercial Arbitration (ICCA) said that. the lack of clarity as to which ethical rules apply, the existence of conflicting rules and obligations, the non-transparency and the increased size of many proceedings, combined with greater public scrutiny, create a certain instability in the system that could result in a future crisis of confidence. It only takes one highly visible, public spectacle to shake confidence in the entire system. There are already critics of arbitration in various countries, and if a public spectacle does occur involving counsel, what easier target than to point to the fact that international arbitration does not even have a Code of Ethics for counsel.67

In order to inter alia level the playing field for legal representatives from different legal and/or cultural backgrounds when representing their clients in international arbitration, various attempts have been made to define, standardise and police ethical behaviour in the forum. For example, in 2013, the IBA published the Guidelines on Party Representation in International Arbitration,68 writing they were. inspired by the principle that party representatives should act with integrity and honesty and should not engage in activities designed to produce unnecessary delay or expense, including tactics aimed at obstructing the arbitration proceedings.

65

Wessel and McAllister (n 64); Rondel v Worsley [1966] 3 WLR 950: ‘[The advocate] has a duty to the court which is paramount. It is a mistake to suppose that he is the mouthpiece of his client to say what he wants: or his tool to do what he directs. He is none of these things. He owes allegiance to a higher cause. It is the cause of truth and justice. He must not consciously mis-state the facts. He must not knowingly conceal the truth […] He must produce all the relevant authorities, even those that are against him. He must see that his client discloses, if ordered, the relevant documents, even those that are fatal to his case. He must disregard the most specific instructions of his client, if they conflict with his duty to the court. The code which requires a barrister to do all this is not a code of law. It is a code of honour. If he breaks it, he is offending against the rules of the profession and is subject to its discipline’. 66 Wessel and McAllister (n 64); Gavin MacKenzie, ‘The Ethics of Advocacy’ (September 2008) The Advocates’ Society Journal 26: ‘In the United States the duty to the client is generally seen as the lawyer’s primary duty, while in Britain the duty to the court is preeminent. In [the Canadian] rules, the two duties are given equal prominence – which may make ethical choices in advocacy more difficult in our jurisdiction. 67 Dasser (n 61) 34, citing Doak Bishop, US lawyer, at the 2010 ICCA Congress in Rio de Janeiro. 68 IBA Guidelines on Party Representation, Preamble.

Codification of Ethical Standards and Rules …

65

The IBA Guidelines on Party Representation define a party representative as. any person, including a Party’s employee, who appears in an arbitration on behalf of a Party and makes submissions, arguments or representations to the Arbitral Tribunal on behalf of such Party, other than in the capacity as a Witness or Expert, and whether or not legally qualified or admitted to a Domestic Bar.

The parties may choose to adopt the guidelines or a portion thereof in their arbitration which would generally be in addition to and not in lieu of the applicable arbitration law and rules.69 In 2014, the London Court of International Arbitration (LCIA) introduced provisions in its arbitration rules (the Annex to the Arbitration Rules in 2014) explicitly governing the conduct of counsel, which was the first time for any arbitral institution to do so.70 By choosing the LCIA 2014 rules in the arbitration agreement, the parties’ legal representatives are automatically required to abide by the provisions governing the conduct of counsel, notwithstanding that the provisions are labelled as General Guidelines [emphasis added] for the Parties’ Legal Representatives.71 These guidelines are maintained in the current 2020 version of the LCIA arbitration rules, although renamed General Guidelines for the Authorised Representatives of the Parties. In 2018, the Singapore Institute of Arbitrators (SIArb) published its Guidelines on Party-Representative Ethics which mirror the IBA Guidelines on Party Representation and the LCIA guidelines in some areas in terms of substance,72 and ‘seek to prescribe a set of minimum standards or guiding principles for ethical behaviour that are generally accepted by both common law and civil law jurisdictions’73 The SIArb guidelines are intended to apply to both lawyers and non-lawyers.74 Later in this book, we shall examine the question of whether these guidelines go far enough to remedy the problem. One point to note is that in 2014, the Swiss Arbitration Association called for the creation of a Global Arbitration Ethics Council and had chaired an informal working group.75 The working group found that inter 69

IBA Guidelines on Party Representation, Preamble. Christina Bustos, ‘Empty Rhetoric: The Failings of the LCIA’s Ethical Rules for Legal Counsel and Alternatives’ (2015) 7 Yearbook on Arbitration and Mediation 317. 71 LCIA Arbitration Rules 2014, Preamble states: ‘These LCIA Rules comprise this Preamble, the Articles and the Index, together with the Annex to the LCIA Rules and the Schedule of Costs as both from time to time may be separately amended by the LCIA (the LCIA Rules)’. 72 Singapore Institute of Arbitrators Guidelines on Party-Representative Ethics Consultation paper 1. 73 Mahdev Mohan and Siraj Shaik Aziz, ‘A Quest for Ethical Regulation in Arbitration’ (2017) Singapore Law Blog accessed 1 July 2021. 74 SIArb Guidelines on Party-Representatives Ethics: defines a ‘party representative’ as ‘[l]egal counsel (including lawyers, solicitors, barristers, advocates and in-house counsel, amongst others) and non-legal counsel (including non-legal professionals) engaged by parties to represent them in international arbitration proceedings’. 75 Swiss Arbitration Association, ‘Statement on the Global Arbitration Ethics Council Discussions’ (2015) accessed 1 May 2020: ‘This meeting included 70

66

3 The Nature of Guerrilla Tactics in International Arbitration

alia the number of complaints lodged before national bar councils or supervisory bodies in relation to international arbitration was insignificant; the issue was more about the integrity of the arbitral proceedings and the admissibility and weighing of evidence which arbitrators are already equipped to address but may be reluctant to do so; and thus, the upshot was that the creation of a Global Arbitration Ethics Council was ‘an idea whose time has not yet come’.76 Separately, two practitioners jointly pointed out that, ‘[g]iven the local or regional differences in the formulation and application of ethics rules, it is unclear how divergences may simply be “papered over”, resolved or erased with the imposition of a single, universal, uniform code’.77 With respect to arbitrators, they are subject to ethical obligations based on principles of impartiality and independence long established by most arbitration laws and rules. Some arbitral institutions have produced their own code of ethics for arbitrators which may be applicable, depending on the arbitral institution administering the arbitration.78 Similarly, professional or bar associations have drawn up ethical guidelines for arbitrators, such as the IBA Guidelines on Conflicts of Interest in International

representatives of the following arbitration associations and institutions: the Chartered Institute of Arbitrators (CIArb), the International Bar Association Arbitration Committee (IBA), the International Court of Arbitration of the International Chamber of Commerce (ICC), the Netherlands Arbitration Institute (NAI), the Singapore International Arbitration Centre (SIAC), the Swedish Arbitration Association (SAA), the Stockholm Chamber of Commerce (SCC), the Swiss Chambers Arbitration Institution (SCAI), the Vienna International Arbitration Centre (VIAC), and the WIPO Arbitration and Mediation Center’. 76 Swiss Arbitration Association, ‘ASA Working Group on Counsel Ethics Releases Latest Findings’ (2016) accessed 1 May 2020: ‘1. On the basis of the research efforts conducted so far efforts to collect empirical data on the frequency and nature of complaints addressed to national bar councils or supervisory bodies, it appears that there are extremely few complaints being lodged in relation to international arbitration. That said, the working group’s factfinding should continue, with the results being communicated to all institutions and associations expressing interest. 2. It would appear that what is sometimes referred to as issues of “counsel ethics” actually relates to (a) orderly conduct and integrity of the arbitral proceedings, (b) admissibility and weighing of evidence and (c) independence and impartiality of arbitrators. For issues (a) and (b), arbitrators already have broad powers to address them; issue (c) is to be handled by the body that would rule on challenges of arbitrators (institutions or, in ad hoc arbitration, the juge d’appui). 3. The real problem is not a lack of ethical rules, but the fact that arbitrators may still be reluctant to exercise their powers in relation to (a) and (b). One possible way forward to remedy this situation would be to explore whether institutional rules could be more explicit as to identifying the nature of unacceptable behavior, and what the tribunal can be expected to do in terms of imposing costs on the offending party in the cost award. As for questions in relation to (c), in particular appointment of counsel at a later stage in the proceedings with the effect of conflicting an arbitrator, this should be regulated more clearly in institutional rules…’. 77 Toby Landau and J Romesh Weeramantry, ‘A Pause for Thought’ in Jan van den Berg (ed), International Arbitration: The Coming of an Age?: ICCA Congress Series No 17 (Kluwer Law International 2013) 502. 78 There may also be uncertainty as to which set of rules apply to arbitrators.

Codification of Ethical Standards and Rules …

67

Arbitration (IBA Guidelines on Conflicts of Interest),79 which are commonly relied upon.80 In fact, multiple sets of guidelines might apply to arbitrators ‘depending on the position of the particular arbitrator’.81

The Various Forms of Guerrilla Tactics and their Impact on the Arbitral Process The most common guerrilla tactics described by Horvath and Neil fall under ethically borderline practices, which generally refer to intentional procedural noncompliance.82 The situation might include inter alia not complying with the tribunal’s request, order or timetable, filing late submissions, communicating ex parte with an arbitrator, frivolously challenging an arbitrator, frequently complaining about due process, coaching witnesses, disrupting cross-examination, abusing document production, creating a conflict of interest, multiplying arbitral proceedings, appointing unethical expert witnesses, as well as threatening to challenge any future award.83

79

IBA Guidelines on Conflicts of Interest, adopted by resolution of the IBA Council on Thursday 23 October 2014, updated, 10 August 2015. 80 For example, with regard to the appointing stage of arbitrators, the IBA Guidelines on Conflicts of Interest provides guidance on when arbitrators should disclose any potential conflict of interest and when to accept or decline appointments. The IBA Guidelines on Conflicts of Interest is commonly used ‘when making decisions about prospective appointments and disclosures’, notwithstanding that the soft law is non-binding. Also see José Carlos Fernández Rozas, ‘Clearer Ethics Guidelines and Comparative Standards for Arbitrators’ in Miguel Ángel Fernández-Ballesteros and David AriasLozano (eds), Liber Amicorum Bernardo Cremades (La Ley, 2010) 417–418. 81 Paula Hodges, ‘Equality of Arms in International Arbitration: Who Is the Best Arbiter of Fairness in the Conduct of Proceedings’ in Andrea Menaker (ed), International Arbitration and the Rule of Law: Contribution and Conformity: ICCA Congress Series No 19 (Wolters Kluwer 2017) 608: For example, an arbitrator who is a member of the CIArb is contractually required to observe the CIArb Code of Professional and Ethical Conduct (CIArb Code of Conduct), failing which, his or her conduct would amount to professional misconduct. The CIArb Code of Conduct inter alia ‘relates to the conduct of members when acting or seeking to act as neutrals in alternative dispute resolution processes, wherever conducted, whether or not they have been appointed so to act by the Institute or any officer of the Institute and whether or not the process is conducted under the auspices of the Institute’. In other words, regardless of: (i) whether the parties have agreed for the inclusion of such code, (ii) the seat of the arbitration, or (iii) the CIArb’s involvement in the arbitration, the CIArb Code of Conduct might still apply. 82 Horvath and Neil (n 16) 132. 83 Lord Hacking and Sophia Berry, ‘Ethics in Arbitration: Party and Arbitral Misconduct’ in Julio César Betancourt (ed), Defining Issues in International Arbitration: Celebrating 100 Years of the Chartered Institute of Arbitrators (Oxford University Press 2016) 139–140 para 13.05.

68

3 The Nature of Guerrilla Tactics in International Arbitration

More rarely, arbitrators who are biased might be said to employ guerrilla tactics, for example, if they attempt to influence the proceedings in favour of the party that appointed them.84 Examples of such conduct might include an arbitrator resigning (as an arbitrator can hardly be compelled to perform) in an arbitration that is not going well, or taking an aggressive and hostile approach towards the other party, their legal representatives or witnesses, or—on a rather more blatant end of the scale—disclosing confidential information about the tribunal’s deliberations. Most of the mentioned examples will be analysed in this chapter. We shall go on now to analyse categories of guerrilla tactics, although, as already mentioned, outright and extreme guerrilla tactics, such as kidnapping a witness or an arbitrator, or setting illegal wiretaps, require recourse to police and national bar associations, and will not be discussed here.

Objecting to the Arbitral Tribunal’s Jurisdiction Guerrilla tactics often involve the exercise by a party of legitimate powers or rights conferred on them by law or under the arbitration agreement. In such cases the question is whether the party’s actions amount to an unfair abuse of such powers or rights. This may be fairly obvious, or it may involve looking at the particular instance in the context of the party’s actions as a whole, to see if there is a pattern. Objecting to the jurisdiction of the tribunal is a good example of a right which is an important control over the validity of the arbitral process, but which can lend itself to abuse by a cynical party in order to disadvantage the other party.85 In such cases, the guerrilla also often seeks to take advantage of the arbitrators’ duties to be impartial, relying on due process paranoia, or a reluctance on the part of the tribunal to interfere with the party’s exercise of its rights. In order for an arbitral tribunal to decide on the merits of the dispute between the parties, the tribunal must first be satisfied that it has the jurisdiction to do so. This stems from the consensual nature of arbitration, since a tribunal has no authority to determine disputes save where the parties have agreed to submit them to it for determination, and awards made without jurisdiction are subject to challenge in court on or before enforcement. Parties can also challenge the jurisdiction of the tribunal during the course of the arbitral proceedings. Such challenges, usually by the 84

For further discussion on how arbitrators might not be trusted to make impartial decisions when they are appointed by a party, see Jan Paulsson, ‘Moral Hazard in International Dispute Resolution’, (2010) 25(2) ICSID Review: Foreign Investment Law Journal 339–355. 85 A party might challenge the arbitral tribunal’s jurisdiction with the hope of suspending the arbitration, as well as the delving into the merits of the case pending the outcome of the challenge; and/or to prevent the rendering of a presumably unfavourable award. If the challenge is successful, the parties would be left with the options of attempting to settle or resorting to court litigation to resolve their dispute. With regard to the latter, there might still be the question of which court and jurisdiction the dispute should be submitted to and may even lead to forum shopping or perhaps couts may decline jurisdiction in favour of an arbitration agreement.

The Various Forms of Guerrilla Tactics and their Impact …

69

respondent, are usually made to the tribunal. However, the relevant national law may allow challenges to be made to the courts where there is concurrent control, as under the Model Law.86 Thus, many arbitration laws (as well as numerous institutional rules) provide that an arbitral tribunal has the power to decide on its own jurisdiction, but not necessarily the final say. If the challenge is upheld, the proceedings are terminated.87 Any such challenge should generally be raised at an early stage, failing which, the respondent may be deemed to have waived its right unless the delay is justified.88 The argument that the arbitral tribunal lacked jurisdiction to determine the parties’ dispute can be put forward before a national court even after the arbitration is completed.89 It may be difficult in practice to identify when the parties’ well-established right to dispute jurisdiction is being abused and constitutes a guerrilla tactic. There may be valid grounds for a challenge. For example, the dispute may not be arbitrable or it may fall outside the ambit of the arbitration agreement; there may be no valid arbitration agreement; the claim may have been brought against a non-party; there may be a time bar or non-compliance with procedural steps which are a precondition to jurisdiction.90 Distinguishing between legitimate and illegitimate challenges is not made easier by the variety of legal cultures operating in international arbitration. This can include the unrelenting and aggressive taking of every possible point, regardless of merit, on the basis that making life uncertain, difficult or costly for the opponent is a tactical 86

For example, UNCITRAL Model Law, art 6, titled Court or Other Authority for Certain Functions of Arbitration Assistance and Supervision states: ‘The functions referred to in articles 11(3), 11(4), 13(3), 14, 16(3) and 34(2) shall be performed by … [Each State enacting this model law specifies the court, courts or, where referred to therein, other authority competent to perform these functions’.]. 87 Albert Monichino, ‘How Arbitral Tribunals Deal with Jurisdictional Objections in Practice To Bifurcate or Not and Court Review of Jurisdictional Objections’ (2018) Singapore Institute of Arbitrators Newsletter: accessed 20 April 2021: ‘Former High Court of Australia Chief Justice, Robert French, has likened the logical challenges involved in this idea to the plot of the first Terminator film, where Arnold Schwarzenegger is sent back in time by robots warring with humanity to eliminate the mother of the leader of the human resistance movement before she can give birth to the future leader’. 88 For example, UNCITRAL Model Law, art 16(2) states ‘A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment of, an arbitrator. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified’. 89 A party may attempt to have the award set aside or resist enforcement of the arbitral award based on jurisdictional grounds. See further discussion in Chapter 6 on how courts in different jurisdictions assist the arbitral process in combating guerrilla tactics on the setting aside of the arbitral award as well as the enforcement stages. 90 In Republic of Sierra Leone v SL Mining Ltd [2021] EWHC 286 (Comm) the English court held that non-compliance with procedural steps which are a precondition to arbitration are questions of admissibility and not jurisdiction.

70

3 The Nature of Guerrilla Tactics in International Arbitration

advantage. The mind-set for some could very well be that failing to exercise every such legal right would be considered a missed or wasted opportunity.91 A respondent may also attempt to create difficulties and uncertainty for the other party and the tribunal by using a spurious challenge as an excuse not to participate in the arbitration; or to make an application to a national court for an anti-arbitration injunction, both of which will be discussed later in this book. The arbitral tribunal has a duty to minimise costs where possible, and may decide to address a jurisdiction challenge separately prior to consideration of the merits. This is often referred to as ‘bifurcation’, as the arbitration is split into at least two phases. This action may be dependent on many factors, including the likelihood of the success of the jurisdictional challenge; and any possible savings versus potential delays or costs that may result from the bifurcation.92 The tribunal must not pre-judge the issue, but if the argument that there is a lack of jurisdiction is valid and strong, a decision on jurisdiction early will save overall costs. However, if the arbitrators suspect that the jurisdictional challenge is a tactical tool to delay the arbitration, then the tribunal ultimately still has to decide the point, but can ‘defer the issue and deal with it in the final award on the merits’.93 A refusal to bifurcate is therefore a tool whereby arbitrators may frustrate a common guerrilla tactic aimed at obstructing a final resolution of the case.

Frivolous Challenges to Arbitrators This tactic is another instance of a party abusing a right or power which is an important control of the arbitral process. An arbitrator may be challenged by a party, and frequently such challenges are based on a perceived lack of independence and impartiality,94 although other grounds of challenge do exist, such as improper delegation to a tribunal secretary.95 A challenge can even be made against an entire arbitral 91

For example, objecting to the tribunal’s jurisdiction on the basis that the underlying contract is null and void, even though it is beyond debate in most jurisdictions that an arbitration agreement is a separate and independent contract. Therefore, the avoidance of the former should not affect the latter. Also see for example, UNCITRAL Model Law, art 16(1) which states ‘.…For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause’. 92 Lucy Greenwood, ‘Revisiting Bifurcation and Efficiency in International Arbitration Proceedings’ (2019) 36(4) Journal of International Arbitration 428. 93 Monichino (n 87). 94 For example, UNCITRAL Model Law, art 12(2) states: ‘[a]n arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality or independence’. 95 For example, in P v Q and Ors [2017] EWHC 194 (Comm), application was brought by ‘the Claimant to remove the Second and Third Defendants as arbitrators for failing properly to conduct proceedings, pursuant to section 24(1)(d)(i) of the Arbitration Act 1996’. The complaint was ‘one of improper delegation of functions by the tribunal to the secretary’.

The Various Forms of Guerrilla Tactics and their Impact …

71

tribunal.96 Depending on the applicable law and the set of arbitration rules that govern the arbitration, a challenge against an arbitrator can be made to, inter alia, an arbitration institution whose rules are adopted or indicated,97 the arbitral tribunal itself,98 an arbitral organisation of which the arbitrator is a member,99 or the court directly at the seat of the arbitration.100 It is easy to see why the right of a party to challenge any arbitrator is an important control over the integrity of the arbitral process. Its fundamental nature is reflected in the fact that many national laws and institutional rules reproduce the requirement in Article 12 of the UNCITRAL Model Law that arbitrators must be impartial and independent. The credibility of arbitration as a fair means of dispute resolution is 96

For example, BSG Resources Limited, BSG Resources (Guinea) Limited and BSG Resources (Guinea) SARL v Republic of Guinea (ICSID Case No. ARB/14/22), Decision of 28 December 2016, where ‘Claimants proposed the disqualification of all three members of the Tribunal in accordance with Article 57 of the ICSID Convention and ICSID Arbitration Rule 9’. 97 For example, ICC 2021 Arbitration Rules, effective 1 January 2021 accessed 22 June 2021 (the ICC Arbitration Rules 2021), art 14 states: ‘1) A challenge of an arbitrator, whether for an alleged lack of impartiality or independence, or otherwise, shall be made by the submission to the [ICC] Secretariat of a written statement specifying the facts and circumstances on which the challenge is based….3) The [ICC] Court shall decide on the admissibility and, at the same time, if necessary, on the merits of a challenge after the Secretariat has afforded an opportunity for the arbitrator concerned, the other party or parties and any other members of the arbitral tribunal to comment in writing within a suitable period of time. Such comments shall be communicated to the parties and to the arbitrators’. 98 For example, UNCITRAL Model Law, art 13(2) states ‘Failing such agreement, a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstance referred to in article 12(2), send a written statement of the reasons for the challenge to the arbitral tribunal. Unless the challenged arbitrator withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge’. 99 For example, in Malaysian Historical Salvors, SDN, BHD v Malaysia (ICSID Case No. ARB/05/10), Claimant Malaysian Historical Salvors Sdn Bhd’s Memorial on Jurisdiction: ‘MHS in December 2000 applied to the Chartered Institute of Arbitrator’s in London (CIARB) for an internal review…regarding the conduct of arbitrators. In such a review, a Professional Conduct Committee of the Institute reviews the record of an arbitration to determine whether there is ‘prima facie evidence of misconduct by the Arbitrator’.’ However, the organisation acknowledged that it was ‘not capable of changing the outcome of the final award or otherwise interfering with the consequences of the award. Only a court of law is capable of opening up an arbitral award…The Professional Conduct Committee was only able to investigate whether [the arbitrator], by virtue of his membership of the Institute had misconducted himself’. In that case, ‘the Committee determined that there was prima facie evidence of misconduct by the Arbitrator and a review before the Institute’s Disciplinary Tribunal followed’. 100 For example, the English Arbitration Act, s 24(1) states: ‘A party to arbitral proceedings may (upon notice to the other parties, to the arbitrator concerned and to any other arbitrator) apply to the court to remove an arbitrator on any of the following grounds – (a) that circumstances exist that give rise to justifiable doubts as to his impartiality; (b) that he does not possess the qualifications required by the arbitration agreement; (c) that he is physically or mentally incapable of conducting the proceedings or there are justifiable doubts as to his capacity to do so; (d) that he has refused or failed – (i) properly to conduct the proceedings, or (ii) to use all reasonable despatch in conducting the proceedings or making an award, and that substantial injustice has been or will be caused to the applicant’.

72

3 The Nature of Guerrilla Tactics in International Arbitration

underpinned by this principle itself and by the parties’ ability to challenge an arbitrator where, for example, at any time during the arbitration process circumstances give rise to justifiable doubts as to the arbitrator’s impartiality or independence.101 However, a cynical party making a challenge or multiple challenges (in one arbitration, a challenge was lodged more than 16 times)102 primarily to intimidate the arbitrator or to disrupt the process can severely delay an arbitration and may have an adverse impact upon their relationship with the tribunal. Where there is an apparently spurious challenge, there are three possible outcomes. First, if the challenge succeeds, either the challenge was not spurious or the decision on the challenge was unduly accommodating to the guerrilla, perhaps due to due process paranoia. The latter outcome would tend to encourage the tactic, although it is desirable for all involved to ensure only legitimate challenges succeed. The IBA Guidelines on Conflicts of Interest do not have strict legal effect,103 but provide welcome guidance on what in practice amounts to ‘justifiable doubts’, and so are a valuable tool in helping to achieve common sense and consistency in this regard, and hence in discouraging this particular tactic. Second, the challenged arbitrator may resign and withdraw from the arbitration. This is obviously the correct decision if both parties wish the arbitrator to resign,104 or if the arbitrator comes to the conclusion that the challenge is valid. If the arbitrator believes the challenge is spurious, it is arguable that he or she should not resign but should leave the question to be decided by the applicable challenge procedure. Although this approach ‘may cause delay, it helps to discourage unmeritorious disruptive tactics’.105 In practice, the situation may be a little more nuanced. The disruption caused by a challenge may depend on the stage of the proceedings at which it is made. In the early stages, a challenged arbitrator may feel that resigning (even where they feel the grounds of challenge are spurious) will cause less overall disruption to the process and will allow the arbitration to progress without one party feeling disgruntled. Appointing authorities encourage such withdrawals ‘at least where there is some 101

For example, Halliburton Company v Chubb Bermuda Insurance Ltd [2020] UKSC 48: under English law, the test is whether the fair-minded and informed observer after considering the facts would see such conduct as giving rise to justifiable doubts with respect to the arbitrator’s independence and impartiality. By contrast, the test for determining bias under most institutional rules is whether the disclosure of facts and circumstances in the eyes of the parties gives rise to doubts about the arbitrator’s independence and impartiality. 102 Michael W Bühler and Sigvard Jarvin, ‘The Arbitration Rules of the International Chamber of Commerce (ICC)’ in Frank-Bernd Weigand (ed), The Practitioner’s Handbook on International Commercial Arbitration (2nd edn, Oxford University Press 2010) 1240. 103 See for example: Niek Peters, The Fundamentals of International Commercial Arbitration (Maklu 2017) 140; August Reinisch and Christina Knahr, ‘Conflict of Interest in International Investment Arbitration’ in Anne Peters and Lukas Handschin (eds), Conflict of Interest in Global, Public and Corporate Governance (Cambridge University Press 2012) 105; W Ltd v M Sdn Bhd [2016] EWHC 422 (Comm). 104 Bühler and Jarvin (n 102). 105 Nigel Blackaby and others, Redfern and Hunter on International Arbitration (6th edn, Oxford University Press 2015) 279 para 4.151.

The Various Forms of Guerrilla Tactics and their Impact …

73

reasonable doubt as to partiality’ during the early stages of arbitral proceedings.106 Accordingly, although the arbitral tribunal can proceed with the arbitration until a decision has been made on the challenged arbitrator’s independence and impartiality, the challenged arbitrator might be tempted to resign if it appears that their resignation might spare the arbitration the time and costs of the challenge.107 It appears that ‘[i]n practice, arbitrators faced with a challenge do rarely tender their resignation’.108 Perhaps this is not surprising, as they have a duty when accepting appointments and throughout the proceedings to satisfy themselves on the question of whether the circumstances give rise to ‘justifiable doubts’. Accordingly, it seems likely that in most cases they will have reached the conclusion that the grounds of the challenge do not give rise to such doubts, having already considered the issue themselves. One important control over this guerrilla tactic exists in the institutional rules and arbitration laws, namely the ‘risk of waiver’. Challenges must be brought without delay and parties who are aware of the facts upon which they wish to base a challenge may not delay and lie in ambush or they risk being held to have waived their objection.109 The third possible scenario is that the challenging party will lose the challenge, and the arbitration will continue with the tribunal intact. On the face of it, in these circumstances, the delay is limited to the direct effects of the challenge. These may be minimal if the relevant institutional rules empower the tribunal to continue to act pending the outcome of the challenge. In these circumstances, it might be thought that the attempt at guerrilla tactics has failed, and this may be the case, unless the attempt forms part of a wider pattern of deliberate disruption. However, even if a party did not set out with a cynical agenda to disrupt, an unsuccessful challenge may actually lead to further disruption and lack of cooperation if the challenging party feels disillusioned, resentful or unfairly treated due to perceived prejudice, leading to delay and ultimately detriment to the credibility of that party. In other words, the challenging party, having lost the challenge, could end up jeopardising their substantive case. They could feel that they have caused the arbitrator to become emotional or negative towards them because of the failed challenge.110 106

Gary B. Born, International Commercial Arbitration, vol 1 (Kluwer Law International 2009) 1559. 107 Caroline Verbruggen, ‘The Arbitrator – as a Neutral third Party’ accessed 2 January 2020. 108 Bühler and Jarvin (n 102). 109 For example, ICC Arbitration Rules 2021, art 14(2) states: ‘For a challenge to be admissible, it must be submitted by a party either within 30 days from receipt by that party of the notification of the appointment or confirmation of the arbitrator, or within 30 days from the date when the party making the challenge was informed of the facts and circumstances on which the challenge is based if such date is subsequent to the receipt of such notification’. 110 Verbruggen (n 107): various challenge situations can put the arbitrator in a difficult position. For example, with regard to the challenge itself, the arbitrator could choose to instruct external counsel to represent him or her, and may consequently appear as an adversary to the party that initiated the challenge.

74

3 The Nature of Guerrilla Tactics in International Arbitration

That party may seek to disrupt the proceedings in other ways—for instance, seeking faults in subsequent orders from the arbitral tribunal and/or the challenged arbitrator—rather than concentrating on the merits of his or her case. Multiple unsuccessful challenges might end up being detrimental only to the party that initiated them from the perspective of that party’s credibility in front of all members of the arbitral tribunal.111 The party might ponder replacing their legal representative for offering poor advice (in this case to frivolously challenge the arbitrator) in the hope that the challenged arbitrator will not hold a grudge against them for making the frivolous challenge. Should a disgruntled party thereafter lose the case on its merits, a challenge to the award may well ensue. If the challenging party wins the arbitration, that party, as well as the losing party, might assume it was due to the successful use of guerrilla tactics to influence the dynamics of the arbitral process, and that the guerrilla ultimately manipulated or coerced the arbitral tribunal into finding in its favour. From the above analysis, it is clear that, on the one hand, the opportunity to make a challenge to an arbitrator is something which needs to be preserved and protected. Abuse of this right is therefore not countered by preventing challenges, but rather by ensuring promptness, speed, transparency and consistency in the challenge processes. Currently, this is achieved through measures such as time limits for bringing challenges and the use of guidelines, such as the IBA Guidelines on Conflicts of Interest. Most modern institutional rules now also allow the proceedings to continue pending the outcome of a challenge.112

Non-participation Another disruptive tactic sometimes employed by uncooperative parties is refusal to participate in the arbitration. This may take various forms, from express notification of non-participation to behaviour which eventually has to be treated by the arbitrators as requiring them to proceed with the arbitration ex parte on the application of the other party. The second situation is the more oppressive, since it puts considerable pressure on the tribunal and involves difficult questions of judgment. In any event, the participating party will still have to prove their case (there is no

111

Verbruggen (n 107). For example, SIAC Arbitration Rules 2016, r 15.4 states ‘After receipt of a notice of challenge under Rule 15.2, the Registrar may order a suspension of the arbitral proceedings until the challenge is resolved. Unless the Registrar orders the suspension of the arbitral proceedings pursuant to this Rule 15.4, the challenged arbitrator shall be entitled to continue to participate in the arbitration pending the determination of the challenge by the Court in accordance with Rule 16’. Similarly, 11.9 HKIAC Arbitration Rules 2018, art 11.9 states: ‘Unless the arbitrator being challenged resigns or the non-challenging party agrees to the challenge within 15 days from receiving the notice of challenge, HKIAC shall decide on the challenge. Pending the determination of the challenge, the arbitral tribunal (including the challenged arbitrator) may continue the arbitration’.

112

The Various Forms of Guerrilla Tactics and their Impact …

75

default award),113 and any award following ex parte proceedings will need to set out precisely the circumstances of non-participation.114 Non-participating parties may well subsequently resist enforcement of an award, alleging that they were not afforded an opportunity to present their case. We can see that this tactic once again involves the exercise of legitimate rights in a disruptive way. Provided that there is a valid arbitration agreement and an arbitrable dispute, parties are generally to refer that dispute to arbitration unless they mutually agree to rescind their agreement to arbitrate.115 They cannot, however, be compelled to participate in the arbitration.116 There can be legitimate reasons for a party, usually the respondent,117 to resist arbitration. They may believe that there is no valid arbitration agreement between them and another party, or that the claim

113

The arbitral tribunal will not treat the respondent’s failure to participate as admission of the claimant’s allegations. The claimant would still have to argue its own case, which might entail arguments the respondent would have made and provide rebuttals to those. See for example Blackaby and others (n 105) 512 para 9.30: ‘[t]he task of an arbitral tribunal is not to “rubber stamp” claims that are presented to it; rather, it must make a determination of these claims, so the tribunal must take upon itself the burden of testing the assertions made by the active party, and it must call for such evidence and legal argument as it may require for this purpose’. 114 However, perhaps both the arbitral tribunal and the claimant might be required to take proactive steps regarding the service of relevant documents on the non-participating party, which is important for the recognition and enforcement of the arbitral award. The arbitral tribunal should have notified the non-participating respondent of the deadlines and that the matter might be heard and an award granted. See for example the New York Convention, art V(1)(b) which states that the recognition and enforcement of the award may be refused if ‘[t]he party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case’. Also see Montrose Canned Foods Ltd v Eric Wells (Merchants) Ltd [1965] 1 Lloyd’s Rep 597 at 602: ‘In my judgment, it is incumbent upon arbitrators to take steps to ensure, so far as is reasonably possible, before they make an award, that each of the parties to the dispute before them know the case which has been put against them, and has had the opportunity to put forward that party’s own case. … [I]t was the duty of the arbitrators as a matter of natural justice, before they proceeded to make an award on the basis of the arguments and submissions of one side only, to make sure that the buyers did not wish to put their case before the arbitrators’. 115 Thomas E Carbonneau, Carbonneau on International Arbitration: Collected Essays (JurisNet, LLC 2011) 202. 116 Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) Ltd [2019] SGCA 33; English Arbitration Act, s 41(4) for example empowers the Tribunal to continue the proceedings in the absence of a party: ‘[i]f without showing sufficient cause a party—(a) fails to attend or be represented at an oral hearing of which due notice was given, or (b) where matters are to be dealt with in writing, fails after due notice to submit written evidence or make written submissions, the tribunal may continue the proceedings in the absence of that party or, as the case may be, without any written evidence or submissions on his behalf, and may make an award on the basis of the evidence before it’. 117 Chartered Institute of Arbitrators (CIArb), ‘International Arbitration Practice Guideline: Party Non-Participation’ (2016) 1 accessed 12 April 2020: ‘Even though it is rare for a claimant, having commenced the arbitration, to fail to proceed with its claim, it does occasionally happen’.

76

3 The Nature of Guerrilla Tactics in International Arbitration

falls outside the scope of the original arbitration agreement.118 One option for such a party, as we have seen, would be to contest the jurisdiction of the tribunal, but they may simply decide to take no part in an arbitration they regard as invalid, and challenge any award, or enforcement.119 On the other hand, a respondent might decide not to participate ‘in the belief that it will enhance jurisdictional objections or in an effort to disrupt the arbitral process’.120 For example, a respondent’s defence and/or counterclaim might have no or little chance of success, and therefore, they may regard a final outcome of the dispute as undesirable.121 In such a case, the party might not expressly declare their intention not to participate, but instead choose to follow a course of delay and disruption. This might, for example, involve a failure to respond to correspondence or a failure to comply with procedural orders. Because a fundamental principle of arbitration is to allow each party a fair hearing, tribunals are understandably careful to afford parties every opportunity to participate before proceeding ex parte. Such tactics can lead to long and frustrating delays, particularly where a party gives out mixed messages by participating for a while and then ceasing to participate.122 Perhaps the guerrilla is not familiar with the arbitral process and the impact of being served a Notice of Arbitration. Non-participation in a valid arbitration carries with it the risk of being fixed with an award without having taken advantage of the right to influence it. This is therefore a fairly drastic course of action for a party to take, and it may commend itself more to those who are particularly confident that they will win on enforcement or those who have nothing to lose, and wish to delay final resolution for as long as possible. The power to proceed with the hearing and issue an award notwithstanding the non-participation of a party provides the primary control for addressing this guerrilla tactic,123 and it means that ultimately the tactic should not prevent the resolution of 118

Stefan Kröll, ‘The Arbitration Agreement in Enforcement Proceedings of Foreign Awards: Burden of Proof and the Legal Relevance of the Tribunal’s Decision’ in Stefan Kröll and others (eds), International Arbitration and International Commercial Law: Synergy, Convergence and Evolution (Kluwer Law International 2011) 321. 119 In Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) Ltd (n 116), it was held that the respondent could choose not to participate at all in the arbitration proceedings and may still object to the jurisdiction of the arbitral tribunal in the setting aside (or challenge) of the proceedings. 120 Gary B Born, International Commercial Arbitration: Commentary and Materials (2nd edn, Kluwer Law International 2001) 449. 121 Eunice Chan Swee En, ‘Singapore Court of Appeal Decision: Does Art. 16(3) Model Law Preclude Setting Aside Proceedings?’ (2019) Kluwer Arbitration Blog accessed 12 April 2020. 122 Chartered Institute of Arbitrators (CIArb), ‘International Arbitration Practice Guideline: Party Non-Participation’ (2016) (n 117) 1. 123 For example: UNCITRAL Model Law, art 25 states: ‘Unless otherwise agreed by the parties, if, without showing sufficient cause, (a) the claimant fails to communicate his statement of claim in accordance with article 23(1), the arbitral tribunal shall terminate the proceedings; (b) the respondent fails to communicate his statement of defence in accordance with article 23(1), the arbitral tribunal shall continue the proceedings without treating such failure in itself as an admission of the claimant’s

The Various Forms of Guerrilla Tactics and their Impact …

77

arbitrable disputes under a valid arbitration agreement. However, it can clearly delay the resolution of a dispute, especially in the case where a party participates, stops for some time, and then resumes participation.124 Disruption in itself may fulfil the guerrilla’s objective.

Failure to Comply with the Arbitral Tribunal’s Orders During the course of an arbitration, a tribunal may issue procedural orders and directions. These are not awards, but are concerned with the conduct of the arbitration.125 They ‘help to move the arbitration forward; they deal with such matters as the exchange of written evidence, the production of documents and the arrangement for the conduct of the hearing’.126 The parties are free to agree on the procedure to be followed, but in the absence of agreement, the tribunal normally has discretion to conduct the arbitration ‘in such manner as it considers appropriate’ (this is, for example, the formulation in Article 19 of the UNCITRAL Model Law). In practice, arbitrators often attempt to get agreement from the parties to the orders and directions they make and record the fact of this agreement in the text of the order. In an ideal arbitration, both parties would comply with all procedural orders and directions, and there would be no slippage in the agreed or stipulated timetable. In practice, however, things may not go quite that smoothly, and tribunals frequently have to decide what to do when a party fails to comply with its orders, or at least requests an extension of time for compliance. On the one hand, it might be said that the tribunal faced with such a request should avoid any unnecessary delay and expense,127 and so refuse any request for extending time limits. On the other hand, the tribunal has a duty to give each party a reasonable opportunity to present its allegations; (c) any party fails to appear at a hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the award on the evidence before it’. Also see Sarah Grimmer, ‘Three Scenarios That Raise Due Process Issues’ in Andrea Menaker (ed), International Arbitration and the Rule of Law: Contribution and Conformity: ICCA Congress Set (Wolters Kluwer 2017) 146, 148: Even prior to the constitution of the arbitral tribunal, if it is satisfied that the nonparticipating respondent had been properly notified of the arbitration, the appointing authority could – and indeed would – appoint an arbitrator on behalf of the non-participating respondent in such scenario ‘if it is satisfied on a prima facie basis that it has competence to act as requested, bearing in mind that the arbitral tribunal ultimately has the power to determine any jurisdictional objections, once constituted’. 124 Peter Turner and Reza Mohtashami, A Guide to the LCIA Arbitration Rules (Oxford University Press 2009) 38 para 3.29. 125 Alan Redfern and others, Law and Practice of International Commercial Arbitration (4th edn, Sweet & Maxwell 2004) 369 para 6.52. 126 Blackaby and others (n 105) 503–504. 127 Jeffrey Maurice Waincymer, Procedure and Evidence in International Arbitration (Kluwer Law International 2012) 384–386. For example, Art 13.1 of the 2018 HKIAC Rules states ‘Subject to these Rules, the arbitral tribunal shall adopt suitable procedures for the conduct of the arbitration in order to avoid unnecessary delay or expense, having regard to the complexity of the issues, the

78

3 The Nature of Guerrilla Tactics in International Arbitration

case,128 and this might be thought to constitute a powerful factor in favour of a lenient approach to extensions of time. The latter approach will normally be adopted if the request for an extension appears to be legitimate or if the failure to comply is justified,129 for example, if the party reasonably misunderstood the order. However, it is a question of degree. If the terms of the order were clear and non-compliance was blatant, for example, or if it is obvious that the party has acted unreasonably, say in requesting repeated extensions of time without any explanation or justification, the non-compliance begins to look more like guerrilla tactics, and the tribunal may choose to lean towards the duty to save costs and time. Ultimately, the arbitral tribunal is meant to strike a balance and act fairly towards the two parties, but this is quite often easier said than done, especially with participants who may speak different languages and be from different legal cultures. Tribunals rightly regard the outright exclusion of evidence as quite a drastic response and one which increases the likelihood of a later challenge for lack of due process. They tend to be reluctant to take this course if an extension of time does not cause too much inconvenience by, say, causing the loss of hearing dates. They will no doubt also have in mind the possibility of penalising the non-compliant party in costs, which may be preferable to exposing the award to the risk of challenge. Also, where an arbitral tribunal grants an extension, when faced with this tactic, the ‘misbehaving’ party may well ‘give a very poor impression and undermine its own credibility before the arbitral tribunal’.130 ‘An obstructive counsel is less likely to have the ear of the tribunal than a cooperative one on occasions when the messenger matters as much as the message’.131

Witness Coaching ‘Witness coaching’ is included here as a guerrilla tactic, but it is important to note that the perceived threat to the integrity of the process may in this case actually stem to an extent from dissimilar approaches and alternative views of what is acceptable amount in dispute and the effective use of technology, and provided that such procedures ensure equal treatment of the parties and afford the parties a reasonable opportunity to present their case’. 128 For example, English Arbitration Act 1996, s 33(1)(a); Victoria Commercial Arbitration Act 2011, s 18; the International Arbitration Act of Singapore (Chapter 143A), s 24. 129 For example, the Swiss Rules of International Arbitration of the Swiss Chambers Arbitration Institution (SCAI) accessed 23 September 2021 (the Swiss Arbitration Rules 2021), art 25 of states: ‘1. The time limits for written submissions, including for the Statement of Claim and the Statement of Defence, shall be set by the arbitral tribunal after consulting with the parties. A time limit shall not exceed 45 days, unless the complexity of the case or other circumstances justify a longer time limit. 2. The arbitral tribunal may extend any time limit if it considers that an extension is justified’. 130 Leng Sun Chan, ‘Practical and Strategic Decisions in Arbitration’ in Romesh Weeramantry and John Choong (eds), (2017) 19(3) Asian Dispute Review 121. 131 Leng Sun Chan (n 130).

The Various Forms of Guerrilla Tactics and their Impact …

79

in different legal cultures, rather than deliberate disruption.132 The Preamble to the IBA Guidelines on Party Representation in International Arbitration certainly reads as if it is directed towards guerrilla tactics, being ‘inspired by the principle that party representatives should act with integrity and honesty and should not engage in activities designed to produce unnecessary delay or expense, including tactics aimed at obstructing the proceedings…’. However, the Guidelines recognise that in the area of witness preparation the risk of inequality may be due to disparate practices which might ‘threaten the integrity of the arbitral proceedings’.133 Guidelines 18–25 address the problem by setting out best international practice with respect to the preparation of witness and expert testimony. For example, they state that party representatives may assist in the preparation of witness statements, but should seek to ensure that statements reflect the witness’s own account and should not invite or encourage a witness to give false evidence. Most people are familiar with the presentation of factual witness evidence during court proceedings. Parties to an international arbitration may similarly wish to rely on the evidence of factual witnesses.134 Usually witness evidence is presented in the form of written statements and it will be necessary for parties’ legal representatives to contact and interview the witness to collect the facts of the case135 and produce the witness statements for use in the arbitration.136 Generally speaking, there is broad consensus that it is permissible for there to be contact between the legal representative and the witness for the purpose of preparing witness evidence.137 If there is any dispute regarding the content or accuracy of the evidence, such that opposing counsel wishes to question the relevant witness by way of oral examination, 132

Nathan D O’Malley, Rules of Evidence in International Arbitration: An Annotated Guide (Informa Law 2013) 113 para 4.16. 133 IBA Guidelines on Party Representation, Comments to Guidelines 18–25. 134 Waincymer (n 127) 898: ‘even though such statements are commonly disregarded as evidence in civil law systems’. 135 Fabian von Schlabrendorff, ‘Interviewing for Testimony in International Arbitration Proceedings: The Quest for Developing Transnational Standards of Lawyers’ Conduct’ in Miguel Angel Fernandez-Ballester and David Arias Lozano (eds), Liber Amicorum Bernardo Cremades (Wolters Kluwer España; La Ley 2010) 1163. 136 For example, the IBA Rules on the Taking of Evidence in International Arbitration, adopted by a resolution of the IBA Council 17 December 2020 accessed 21 September 2021 (the IBA Rules on the Taking of Evidence), art 4.3 states: ‘[i]t shall not be improper for a Party, its officers, employees, legal advisors or other representatives to interview its witnesses or potential witnesses and to discuss their prospective testimony with them’. Also see the IBA Guidelines on Party Representation, guideline 24: ‘A Party Representative may, consistent with the principle that the evidence given should reflect the Witness’s own account of relevant facts, events or circumstances, or the Expert’s own analysis or opinion, meet or interact with Witnesses and Experts in order to discuss and prepare their prospective testimony’. 137 Schlabrendorff (n 135) 1161: citing William W Park, ‘The 2002 Freshfields Lecture – Arbitratio’s Protean Nature: The Value of Rules and the Risks of Discretion’ (2003) 19(3) Arbitration International 279, 288; George von Segesser, ‘Witness Preparation in International Commercial Arbitration’ (2002) 20(2) ASA Bulletin 222; Michael Bühler and Carroll Dorgan, ‘Witness Testimony Pursuant to the 1999 IBA Rules of Evidence in International Commercial Arbitration – Novel

80

3 The Nature of Guerrilla Tactics in International Arbitration

then the relevant witness might appear at the hearing of the arbitration for crossexamination.138 In addition to assisting with preparation of the written statement, a legal representative of the party would generally assist its witness in preparing for oral examination. However, there is some variation in legal culture as to the method and style of such preparation. For example, in some civil law jurisdictions the parties’ legal representatives are not permitted to speak with the witnesses before a hearing and any preparation of a witness might be regarded as an attempt to influence the evidence.139 What is perfectly acceptable in one jurisdiction might appear unethical to those accustomed to different styles and methods and might ultimately have the effect of diminishing the perceived reliability of that witness in the eyes of those individuals.140 It is helpful to look at three ways in which a party’s lawyers may be involved in the preparation of witnesses and their statements, namely witness interviewing, witness familiarisation, and witness coaching.141 It is commonplace for witness statements to be drafted by or with the help of lawyers, and it is sometimes quite obvious that the statement thus produced is so tailored to the needs of the party that it no longer reflects the words of the witness. This would not be permitted under the IBA Guidelines on Party Representation,142 but it still happens because it is a question of judgment, and over-zealous representatives want to win the case for their client. The actions of over-zealous representatives may backfire, however, as there is a risk that the witness or the party representatives will lose credibility, and also that the or Tested Standards?’ (2000) 17(1) Journal of International Arbitration 12, note 38 with further references; Lucy Reed and Jonathan Sutcliffe, ‘The “Americanization” of International Arbitration?’ (April 2001) 16(4) Mealey’s International Arbitration Report 42. 138 David St John Stutton, Judith Gill and Matthew Gearing, Russell on Arbitration (24th edn, Sweet & Maxwell 2015) 259 para 5–154. 139 For example, the Swiss National Rules of Professional Conduct, art 7 ‘prohibits any action by counsel that would influence witnesses’. However, Swiss Arbitration Rules 2021, art 27(2) states ‘.…It is not improper for a party, its officers, employees, legal advisors, or counsel to interview witnesses or potential witnesses’. 140 Zurich Court of Appeals of October 24, 2003, ZR 106 (2007) 65. 141 There are multiple ways to preapare witnesses and their statements because arbitration rules are generally silent or provide little guidance on this topic. For example, the LCIA Arbitration Rules 2020, art 20.6 states: ‘Subject to the mandatory provisions of any applicable law, rules of law and any order of the Arbitral Tribunal otherwise, it shall not be improper for any party or its authorised representatives to interview any potential witness for the purpose of presenting his or her testimony in written form to the Arbitral Tribunal or producing such person as an oral witness at any hearing’. Similarly, Swiss Arbitration Rules 2021, art 27(3) states: ‘Any person may be a witness in the arbitration. It is not improper for a party, its officers, employees, legal advisors, or counsel to interview witnesses or potential witnesses’. Also see the IBA Rules on the Taking of Evidence, art 4.3 (n 136) and the IBA Guidelines on Party Representation, guideline 24 (n 136). 142 IBA Guidelines on Party Representation, Comments to Guideline 11 states: ‘Guideline 11 addresses the presentation of evidence to the Tribunal that a Party Representative knows to be false. A Party Representative should not offer knowingly false evidence or testimony. A Party Representative therefore should not assist a Witness or Expert or seek to influence a Witness or Expert to give false evidence to the Tribunal in oral testimony or written Witness Statements or Expert Reports’.

The Various Forms of Guerrilla Tactics and their Impact …

81

witness may not be ‘up to proof’ when giving oral evidence under cross-examination. Interviewing a witness involves questioning and recording a witness’s evidence in order to produce a witness statement.143 The purpose of witness familiarisation is ‘to educate fact witnesses on the theory, practice and procedure of giving evidence’.144 Without this assistance, a witness may face an unduly stressful experience during cross-examination.145 Interviewing and preparation, in the sense of familiarisation, are generally regarded as legitimate practices in international arbitration.146 Coaching witnesses, on the other hand, is more controversial, since it involves making suggestions to a witness about what they should say or attempting to persuade them to change their evidence.147 Even where witness preparation is not being used as a deliberate guerrilla tactic, ‘it can certainly reflect the uneven playing field, and is a cause of concern’.148 For example, one party’s legal representative may be from England, where witness coaching is prohibited,149 while the other party’s American legal representative might feel obliged and ethically responsible to coach a witness.150 It may appear to the English legal representative that the American legal representative is not playing by the rules. Also, consider the following vignette: ‘An Australian lawyer felt that from his perspective it would be unethical to prepare a witness; a Canadian lawyer said it would be illegal and an American lawyer’s view was that not to prepare a witness

143

For example, the IBA Rules on the Taking of Evidence, (n 136) art 4.3; the IBA Guidelines on Party Representation, (n 136) guideline 24. 144 Ula Cartwright-Finch, ‘Human Memory and Witness Evidence in International Arbitration’ in Tony Cole (ed), The Roles of Psychology in International Arbitration (Kluwer Law International BV 2017) 205. 145 Schlabrendorff (n 135). 146 Blackaby and others (n 105) 391 para 6.124: ‘In international arbitration it is well recognised that witnesses may be interviewed and prepared prior to giving their oral testimony’. 147 Cartwright-Finch (n 144). 148 Wessel and McAllister (n 64) 8. 149 Barristers qualified in England are governed by the rC9 of the Code of Conduct in the BSB Handbook accessed 6 May 2020: ‘.4 you must not rehearse, practise with or coach a witness in respect of their evidence’. Similarly, for solicitors, RELs and RFLs in England, 2.2 of the Solicitors Regulation Authority Code of Conduct accessed 6 May 2020: ‘You do not seek to influence the substance of evidence, including generating false evidence or persuading witnesses to change their evidence’. 150 For example, the American Bar Association Model Rules of Professional Conduct under r 3.3: although it states that ‘… the lawyer must not allow the tribunal to be misled by false statements of law or fact or evidence that the lawyer knows to be false’, it further adds that ‘a lawyer should resolve doubts about the veracity of testimony or other evidence in favor of the client’. Geders v United States (1976) 455 US 80, 89: the Supreme Court held ‘the extent of any “coaching” is properly within the scope of cross-examination’.

82

3 The Nature of Guerrilla Tactics in International Arbitration

would be malpractice’.151 Evidently, there are obvious differences, even between common law jurisdictions, concerning the issue of witness preparation. If the parties are from different legal systems, such as one from a common law background and another from the civil law system, ‘[e]thical clashes are much more striking’.152 Moreover, it is not only legal representatives, but tribunal members who may be from different legal cultures. Whatever the clash of cultures, there are limits to the degree to which the preparation of witnesses can be used as a guerrilla tactic in international commercial arbitration. The IBA Rules on the Taking of Evidence are widely (though not universally) accepted as guidelines. Parties can indicate which of the other party’s witnesses they require to present themselves at the hearing to give oral examination, as can the arbitrators. Perhaps the most important control to prevent unfairness is to have experienced arbitrators who understand and are familiar with the diverse range of approaches they face. The tribunal members will consider the totality of the evidence, including documents, witness statements and any oral evidence, before deciding how much weight to afford it. It has been said that ‘most arbitral tribunals regard the testimony of fact witnesses as sometimes less reliable than the documents that were brought into existence at the time of the events that gave rise to the dispute’.153 Experienced arbitrators are also skilled at recognising coached witnesses.154

Disrupting Cross-examination If a party submits a witness statement or presents a witness to prove a fact, the opposing party is generally allowed to cross-examine that witness.155 Crossexamining in international arbitration can be a crucial process for evaluating witnesses, although generally it is not available in domestic court litigation in civil law jurisdictions.156 ‘Putting the witness under stress and giving him or her 151

Mary C Daly, ‘The Dichotomy between Standards and Rules: A New Way of Understanding the Differences in Perceptions of Lawyer Codes of Conduct by U. S. and Foreign Lawyers’ (1999) 32(4) Vanderbilt Journal of Transnational Law 1154. 152 Wessel and McAllister (n 64) 8. 153 Blackaby and others (n 105) 389 para 6.120, which also points out that most witnesses in commercial arbitrations are likely to have some interest in the outcome of the case, having had some connection with the transaction on one side or another. 154 Blackaby and others (n 105) 392 para 6.124: [Coaching] ‘would almost always be counterproductive. Experienced arbitral tribunals tend to have good “noses” for sniffing out inaccuracies in stories told by witnesses, and invariably cross-check oral testimony against the available corroborative documentary and other evidence’. 155 ICC, ‘Effective Management of Arbitration: A Guide for In-House Counsel and Other Party Representatives’ (2014) 54, 55 accessed 2 January 2020. 156 Rachael D Kent, ‘An Introduction to Cross-Examining Witnesses in International Arbitration’ (2006) 3(2) Transnational Dispute Management 1; John Henry Merryman and Rogelio PérezPerdomo, The Civil Law Tradition: An Introduction to the Legal Systems of Europe and Latin

The Various Forms of Guerrilla Tactics and their Impact …

83

less time to think and to potentially craft an answer is a pivotal part of crossexamination’.157 However, interruptions by the other party’s legal representative during cross-examination can be disturbing.158 As with witness coaching, a clash in legal cultures can give one side the impression that the other side is committing ‘foul play’ during cross-examination. American attorneys are often accused of interjecting excessive objections, bullying witnesses on cross-examination, concocting creative interpretations of legal rules and strategically jockeying for procedural advantages. To their European counterparts, the American approach to arbitration ‘total warfare’ is disruptive and counterproductive. American attorneys are often regarded as ‘ungentlemanly’ if not barbaric.159

While much of this may stem from a clash in professional styles as opposed to deficiencies in professional ethics, such conduct can, when taken to extremes, amount to a guerrilla tactic.160 There are at least two scenarios where an objection might be appropriate. If it appears the cross-examiner is ‘unfairly attacking the witness or if the questions being asked appear unnecessary or immaterial’,161 it may be legitimate to appeal to the tribunal to protect the witness from bullying or to prevent time wasting. There is a balance to be struck, however, and tactical or unfounded objections to the opposing party’s cross-examination with an aim to disrupt the cross-examiner’s flow should not be permitted.162 Traditional rules of evidence applicable in court generally do not strictly apply in international arbitration.163 So long as they are relevant and material, a wide range of questions is permissible and ‘there are fewer grounds on which to object to the form of a question’.164 Numerous objections ‘are more likely to annoy the arbitral tribunal than to derail the cross examination’.165 Cross-examination can itself be excessive or constitute unfair bullying, for example where there is behaviour such as ‘cutting-off a witness’s answer, or using

America (3rd edn, Stanford University Press 2007) 116: ‘Cross-examination, in particular, seems foreign to the civil law proceeding’. 157 Ragnar Harbst, A Counsel’s Guide to Examining and Preparing Witnesses in International Arbitration (Kluwer Law International 2015) 142. 158 Harbst (n 157). 159 Rogers (n 12) 333. 160 Rogers (n 12) 333. 161 Kent (n 156) 2. 162 Harbst (n 157). 163 For example, SIAC Arbitration Rules 2016, r 19.2 states: that the ‘Tribunal shall determine the relevance, materiality and admissibility of all evidence. The Tribunal is not required to apply the rules of evidence of any applicable law in making such determination’. Also, English Arbitration Act 1996, s 34(2)(f) states that the tribunal shall consider ‘whether to apply strict rules of evidence (or any other rules) as to the admissibility, relevance or weight of any material (oral, written or other) sought to be tendered on any matters of fact or opinion, and the time, manner and form in which such material should be exchanged and presented’. 164 Kent (n 156) 8. 165 Kent (n 156) 8.

84

3 The Nature of Guerrilla Tactics in International Arbitration

body language to signal displeasure with the witness’.166 However, a ‘confident controlled presentation will be more effective than an emotional or aggressive approach’167 as the latter can backfire and result in the arbitral tribunal sympathising with the witness.

Ex Parte Communications As already discussed, arbitrators are required to be independent and impartial. It is also generally accepted that they must act, and be seen to act, judicially, in accordance with the rules of due process. This means that an arbitrator should not engage in unilateral communications with a party or any of its representatives relating to the arbitration or the dispute unless permitted by law.168 There is a risk that such communications, irrespective of whether they relate to the merits of the dispute or to procedural matters, will be seen as to depriving the other party of a fair hearing and influencing the outcome of the arbitration.169 ‘[W]hat cannot be done in the open, before the eyes of all parties, should not be done at all’.170 The problem is that communicating with one party undermines the confidence in the arbitrator’s neutrality. The duty to act judicially overlaps with the duty to act independently and impartially. For example, the test of the latter according to Art. 12(2) of the UNCITRAL Model Law is whether the circumstances give rise to justifiable doubts about the arbitrator’s independence or impartiality. There does not have to be actual bias.171 Upon the occurrence of any unilateral communication, the arbitrator ought to promptly notify the remaining parties and arbitrators of the substance of the communication and provide the other side an opportunity to respond. The general disapproval of ex parte communications regarding the arbitration is also reflected in the institutional rules.172 166

Kent (n 156) 6. Kent (n 156) 2. 168 For example, under UNCITRAL Model Law, art 17B, ‘a party may, without notice to any other party, make a request for an interim measure together with an application for a preliminary order directing a party not to frustrate the purpose of the interim measure requested’. 169 Franz T Schwarz and Christian W Konrad, The Vienna Rules: A Commentary on International Arbitration in Austria (Kluwer Law International 2009) 165 para 7–132. 170 Martin F Gusy and others, ‘Commentary on the ICDR International Arbitration Rules’ in FrankBernd Weigand (n 102) 1567. 171 The test for bias varies across different jurisdictions; Lawson Lundell LLP, ‘The Apprehension of Bias in Arbitral Proceedings: A Cautionary Tale for Counsel and Arbitrators’ (2018) (accessed 2 January 2020). 172 For example SIAC Arbitration Rules 2016, r 13(6) states ‘No party or person acting on behalf of a party shall have any ex parte communication relating to the case with any arbitrator or with any candidate for appointment as party-nominated arbitrator, except to advise the candidate of the general nature of the controversy and of the anticipated proceedings; to discuss the candidate’s 167

The Various Forms of Guerrilla Tactics and their Impact …

85

There are at least four possible reasons why a party might attempt such onesided communications. First, the party may hope to influence the arbitrator with information and arguments, as the opposing counsel and consequently their views are both not present.173 Second, the fact of ex parte communications might be used as leverage to pressure an arbitrator or push the other party into mounting a challenge, thus causing delay. Third, the legal culture or domestic laws of the parties or their legal representative(s) might actually generally recognise and permit one-sided communications.174 Finally, the role of party-appointed arbitrators is occasionally misunderstood by some parties who mistakenly have the view: ‘I pay you, so I can call you’.175 While the analysis above focuses on post-appointment ex parte communications, some parties conduct ex parte pre-appointment communications in the form of interviews with potential party-appointed arbitrators, which are also potentially problematic.176 It is in fact common practice to conduct ex parte pre-appointment interviews, and therefore, these are not necessarily unethical in themselves.177 qualifications, availability or independence in relation to the parties; or to discuss the suitability of candidates for selection as the presiding arbitrator where the parties or party-nominated arbitrators are to participate in that selection. No party or person acting on behalf of a party shall have any ex parte communication relating to the case with any candidate for presiding arbitrator’. Similarly, HKIAC Arbitration Rules 2018, art 11(5) states: ‘No party or its representatives shall have any ex parte communication relating to the arbitration with any arbitrator, or with any candidate to be designated as arbitrator by a party, except to advise the candidate of the general nature of the dispute, to discuss the candidate’s qualifications, availability, impartiality or independence, or to discuss the suitability of candidates for the designation of a third arbitrator where the parties or party-designated arbitrators are to designate that arbitrator. No party or its representatives shall have any ex parte communication relating to the arbitration with any candidate for the presiding arbitrator’. 173 Donemark JL Calimon and Camille Khristine I Aromas, ‘Philippines’ in Liz Williams (ed), Baker & McKenzie International Arbitration Yearbook 2013–2014 (JurisNet, LLC 2014) 253. 174 Margaret L Moses, The Principles and Practice of International Commercial Arbitration (3rd edn, Cambridge University Press 2017) 159; William W Park, ‘Soft Law and Transnational Standards in Arbitration: The Challenge of Res Judicata’ in Arthur W Rovine (ed), Contemporary Issues in International Arbitration and Mediation: The Fordham Papers 2015 (Koninklijke Brill 2017) 57: For example, ‘[u]ntil 2004, practice in the United States presumed party-nominated arbitrators to be nonneutral and thus allowed unilateral communication with their appointers’. 175 Klaus Peter Berger, ‘The In-House Counsel Who Went Astray: Ex-Parte Communications with Party-Appointed Arbitrators’ in Bernd Ehle and Domitille Baizeau (eds), Stories from the Hearing Room: Experience from Arbitral Practice (Essays in Honour of Michael E Schneider) (Kluwer Law International 2017) 11. 176 Niklas Elofsson, ‘Ex Parte Interviews of Party-Appointed Arbitrator Candidates: A Study Based on the Views of Counsel and Arbitrators in Sweden and the United States’ (2013) 30(4) Journal of International Arbitration 401. 177 Born (n 106) 1522; CIArb, Practice Guideline 16: The Interviewing of Prospective Arbitrators

accessed 24 May 2020 (the CIArb Guidelines on the Interviewing of Prospective Arbitrators); the IBA Guidelines on Conflicts of Interest in International Arbitration, Adopted by resolution of the IBA Council on Thursday 23 October 2014 Updated, 10 August 2015 (the IBA Guidelines on Conflicts of Interest), para 4.4.1 states that an arbitrator need not disclose if ‘[t]he arbitrator has

86

3 The Nature of Guerrilla Tactics in International Arbitration

Parties are also permitted to hold ex parte discussions with their appointed arbitrator over the appointment of a tribunal chair. An ex parte interview with an arbitrator enables the party to make an informed decision with regard to which arbitrator the party should nominate as opposed to merely relying on publicly available information or the advice or views of the legal representative.178 Moreover, such interviews could expose any unconscious bias the potential arbitrator might have. However, such an interview is not necessarily recorded and monitored, which means that a party could attempt to discuss the facts or the merits of the case with the potential arbitrator, and the ‘temptation for misdemeanour can be irresistible’.179 Coupled with the fact that an arbitrator might need not subsequently disclose that any initial contact was made with the party,180 if the absent party loses in an arbitration and becomes aware of such contact, it may suspect manipulation, dishonesty and allege an appearance of bias dating from the outset. As the Chief Justice of Singapore has said, ‘Put bluntly, the arbitrator is being interviewed for an appointment, which it is in his professional interest to try to secure’.181 It is of course a question of degree and judgment and of the reasonableness of the behaviour in the particular circumstances. The burden is really on the arbitrator to ensure he or she is not compromised by a guerrilla attempting ex parte communications and interviews. Some scenarios are clearly excessive. For example, in one case involving ex parte interviews, a party spent more than 50 hours with a potential had an initial contact with a party, or an affiliate of a party (or their counsel) prior to appointment, if this contact is limited to the arbitrator’s availability and qualifications to serve, or to the names of possible candidates for a chairperson, and did not address the merits or procedural aspects of the dispute, other than to provide the arbitrator with a basic understanding of the case’. Similarly, the IBA Guidelines on Party Representation, guideline 8 states ‘[i]t is not improper for a Party Representative to have Ex parte Communications in the following circumstances: (a) A Party Representative may communicate with a prospective Party-Nominated Arbitrator to determine his or her expertise, experience, ability, availability, willingness and the existence of potential conflicts of interest. … (d) While communications with a prospective Party-Nominated Arbitrator or Presiding Arbitrator may include a general description of the dispute, a Party Representative should not seek the views of the prospective Party-Nominated Arbitrator or Presiding Arbitrator on the substance of the dispute’. See also The School of International Arbitration, Queen Mary University of London, ‘2012 International Arbitration Survey: Current and Preferred Practices in the Arbitral Process’ 6 accessed 24 May 2020: ‘Overall, 86% of respondents consider pre-appointment interviews to be either appropriate (46%) or appropriate sometimes (40%)’. 178 Richard M Mosk and Tom Ginsburg, ‘Becoming an International Arbitrator: Qualifications, Disclosures, Conduct, and Removal’ in Richard Chernick, Daniel M. Kolkey and Barbara Reeves Neal (eds), Practitioner’s Handbook on International Arbitration and Mediation (3rd edn, JurisNet, LLC 2012) 406–407. 179 Sundaresh Menon CJ, ‘Adjudicator, Advocate, or Something in Between? Coming to Terms with the Role of the Party-Appointed Arbitrator’ (2017) 34(3) Journal of International Arbitration 365. 180 The IBA Guidelines on Conflicts of Interest, para 4.4.1 (n 177) falls under the Green list, which is ‘a non-exhaustive list of specific situations where no appearance and no actual conflict of interest exists from an objective point of view. Thus, the arbitrator has no duty to disclose situations falling within the Green List’. 181 Menon CJ (n 179).

The Various Forms of Guerrilla Tactics and their Impact …

87

arbitrator before nominating.182 It has been suggested that unilateral communications are more likely to lead to removal of the arbitrator and indicate a reasonable apprehension of bias if they ‘are intentional or frequent, go beyond administrative matters or are not promptly disclosed to the other party…’.183 This would appear a good rule of thumb for arbitrators.

Abuse of Document Production A party in international arbitration generally will submit to the other participants copies of the documents in its possession on which it intends to rely to substantiate its claim(s) or defence(s).184 Such a party will usually also request specific documents or categories of documents from the opposing party on the grounds that such documents are relevant and material to the outcome of the case and ought to be produced.185 Contemporaneous documents can provide valuable evidence as part of the arbitrators’ truth-seeking process.186 Factual witnesses may have vague or faulty recollections, or may be invested in assisting one side. Assuming it is not faked, the documentary record can be a useful tool to corroborate or challenge witness accounts, often being more reliable in revealing what actually happened. In practice, however, there are few areas of the arbitral process which give rise to as many time-consuming disputes, and as much mutual suspicion and professional outrage as document production. In the past, disputes about documents were in part due to an absence of express universal ethical rules in relation to the process of document disclosure,187 combined with the different legal backgrounds of the parties, legal representatives and/or the arbitrators. For example, parties from civil law jurisdictions may regard it as inappropriate to provide the other side with documents that might appear unfavourable to their case on the basis that ‘a party can choose which documents in its possession it wishes to produce’.188 In common law systems, on the other hand, parties are

182

Dominique Hascher, ‘ICC Practice in Relation to the Appointment, Confirmation, Challenge and Replacement of Arbitrators’ (November 1995) 6(2) ICC International Court of Arbitration Bulletin 4. 183 Stutton, Gill and Gearing, Russell on Arbitration (n 138) 423 para 7–123. 184 Claudia T Salomon and Sandra Friedrich, ‘Obtaining and Submitting Evidence in International Arbitration in the United States’ (2013) 24(4) The American Review of International Arbitration 569; O’Malley (n 132) 25 para 3.05. 185 Oliver J Armas and George Bundy Smith, ‘The Impact of U. S. Litigation’ in James H Carter and John Fellas (eds), International Commercial Arbitration in New York (Oxford University Press 2010) 55. 186 William W Park, ‘Arbitrators and Accuracy’ (2010) 1(1) Journal of International Dispute Settlement 25. 187 Rogers (n 12) 325. 188 Peter Griffin, ‘Recent Trends in the Conduct of International Arbitration – Discovery Procedures and Witness Hearings’ (2000) 17(2) Journal of International Arbitration 19.

88

3 The Nature of Guerrilla Tactics in International Arbitration

expected to make fuller disclosure, i.e. to disclose any and all documents in their possession that are relevant to the case, except those that are privileged.189 There are differences in approach even amongst common law jurisdictions. For example, in the US, ‘it is generally accepted that both parties should have full knowledge of every potentially relevant piece of information before presenting their case on the merits’.190 ‘American lawyers often appear to their foreign colleagues as asserting a right to shoot first and aim later, asking how they are to prove a claim without the other side’s documents’.191 Where applications for documents are made even before the tribunal is familiar with the case, it would appear that ‘[o]nly in hindsight might the arbitrator understand adequately the documents’ relevance to the dispute or their materiality to the outcome’.192 The concept of relevance is in fact inextricably tied in to any analysis of efficiency and fairness in this area. Often the documents which are actually referred to at hearings may be a small proportion of those produced during the course of protracted pre-hearing wrangles over production, which indicates that much time and expense is being wasted on irrelevant evidence. Early identification of the issues in the arbitration is thus a key part of the whole document production process. The Redfern Schedule has come to be a useful tool in this regard.193 In an area with so much divergence in what is viewed by practitioners as acceptable, it may easily happen that even if there is no intention to disrupt, one side comes to regard the other’s requests for document production as oppressive, or views the document production by the other side as suspiciously inadequate. This mistrust can develop into a sort of war over document production which can waste huge amounts of time and costs, even in the absence of intentional guerrilla tactics. Arbitrators, too, may make orders for production with the expectation that parties will comply according to the standards of relevance with which the arbitrators are familiar, but this may be far from the case. Intentional guerrilla tactics can happen in this area, too, of course, and might be suspected where a party through its legal representative: (i) demands repeated time 189

Charles N Bower and Jeremy K Sharpe, ‘Determining the Extent of Discovery and Dealing with Requests for Discovery: Perspectives from the Common Law’ in Lawrence W Newman and Richard D Hill (eds), The Leading Arbitrators’ Guide to International Arbitration (2nd edn, Juris Publishing 2008) 342; Emmanuel Gaillard and John Savage, Fouchard, Gaillard, Goldman on International Commercial Arbitration (Kluwer Law International 1999) 689; for example the US Federal Rules of Civil Procedure, r 26(b)(1) states that ‘[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable’. 190 Salomon and Friedrich (n 184) 551. 191 Park (n 186) 39. 192 William W Park, ‘Rules and Reliability: How Arbitrators Decide’ in Cole (n 144) 10. 193 Blackaby and others (n 105) 383–384 paras 6.100–6.102.

The Various Forms of Guerrilla Tactics and their Impact …

89

extensions claiming that there is insufficient time to prepare the evidence to substantiate its case;194 (ii) makes unwarranted document requests or unjustified objections to document requests; (iii) makes vague and general document requests for ‘secret files’ or unspecified evidence, commonly referred to as fishing expeditions, ‘wherein parties attempt to “discover” their case, as opposed to substantiate it’.195 (iv) produces false evidence; (v) conceals or destroys documents;196 (vi) attempts to submit new evidence after the deadline set by the tribunal;197 (vii) produces copious amounts of irrelevant and immaterial documents and/or electronically stored information to the opposing side;198 (viii) claims confidentiality or privilege ‘to shield disclosure of voluminous amounts of information’;199 or (ix) attempts to rely on inadvertently received confidential or privileged documents from the opposing party. It is the arbitrators who are in the front line to deal with this sort of tactic. Again, ensuring the availability of high quality arbitrators who are familiar with diverse legal cultures is crucial in order to have effective control over document production in international arbitration. This is so whether one is considering a clash of cultures or deliberate guerrilla tactics. Even if some of the tactics that have been described could be said to occur due to a cultural and legal clash, it is doubtful that any legal system would allow a situation that is blatantly unethical, such as the presentation of false evidence or destruction or concealment of documents.200 The same can be said in international arbitration.201 194

Albert Bates Jr and R Zachary Torres-Fowler, ‘Abuse of Due Process in International Arbitration: is Due Process Paranoia Irrational?’ (2017) 1(2) The American Journal of Construction Arbitration & ADR 252. 195 Nathan D O’Malley, Rules of Evidence in International Arbitration: An Annotated Guide (2nd edn, Informa Law from Routledge 2019) 62 para 3.77. 196 Tyler B Robinson, ‘Document Production in International Arbitration – How Much is Too Much? Observations from a Common-Law Perspective’ in Marcus Wirth, Christina Rouvinez and Joachim Knoll (eds), Search for Truth in Arbitration: Is Finding the Truth What Dispute Resolution is About?: ASA Special Series No35 (JurisNet, LLC 2011) 110. 197 Bates Jr and Torres-Fowler (n 194). 198 Reto Marghitola, Document Production in International Arbitration (Kluwer Law International 2015) 125. 199 Bates Jr and Torres-Fowler (n 194) 263. 200 For example, the English CPR 31.10.6 requires solicitors ‘to take positive steps to ensure that their clients appreciate … not only the duties of disclosure and inspection … but also the importance of not destroying documents which might possibly have to be disclosed’ and taking steps to ‘ensure that documents are preserved’. Similarly, the Ontario, Canada Code of Professional Conduct, s 5.1–3/1 requires a lawyer to ‘explain to their client the necessity of making full disclosure of all documents relating to any matter in issue’ and ‘assist the client in fulfilling the obligation to make full disclosure’. 201 For example, LCIA Arbitration Rules 2020, Annex to the LCIA Rules states: ‘…Paragraph 3: An authorised representative should not knowingly make any false statement to the Arbitral Tribunal or the LCIA Court. Paragraph 4: An authorised representative should not knowingly procure or assist in the preparation of or rely upon any false evidence presented to the Arbitral Tribunal or the LCIA Court. Paragraph 5: An authorised representative should not knowingly conceal or assist in the concealment of any document (or any part thereof) which is ordered to be produced by the Arbitral Tribunal…’.

90

3 The Nature of Guerrilla Tactics in International Arbitration

Of course, the situation might not be that simple if a document were destroyed prior to any dispute or pursuant to a well-established internal or corporate document retention policy?202 Furthermore, relying on inadvertently received confidential or privileged documents is usually prohibited.203 During the twenty-first century, the tools available to practitioners and arbitrators have evolved considerably, and much effort has been expended in providing guidance on the standard practice to be followed in document production. The IBA Rules on the Taking of Evidence in International Arbitration 1999 became ‘almost universally recognised as the international standard for an effective, pragmatic and relatively economical production regime’.204 The 2020 edition sets out procedures for parties to produce the documents on which they rely and to request production of relevant and material documents from the other side. The IBA Rules also set out suggested mechanisms for resolving objections to production and encourage consultation, including the holding of a case review conference at which document production can be considered. The lynchpin of the tribunal’s control under the Rules is the requirement for the party requesting documents to show both relevance and materiality to the outcome of the case. It should be noted that a tribunal may thus even deny requests for relevant documents if they consider that they would not be material to the outcome of the arbitration.

Anti-arbitration Injunctions and Italian Torpedoes Legal advisers often assist their clients to choose an arbitration seat in an arbitrationfriendly jurisdiction where the courts play a valuable supportive role but tend to keep interference in arbitrations to a minimum. This approach is reflected in Article 5 of the UNCITRAL Model Law. As noted earlier, the jurisdiction of arbitrators is derived from, and defined by, agreement between the parties. An arbitral tribunal should at the outset satisfy itself that it has jurisdiction under a valid arbitration agreement 202

Blackaby and others (n 105) 388 para 6.115. In common law jurisdictions, such as England, Australia and Canada, lawyers are prohibited from relying on such documents and are required to either return or destroy such documents after notifying the opposing party. For example, the Australian Solicitors Conduct Rules, effective 1 July 2015, accessed 22 May 2020, r 31 states: ‘31.1 Unless otherwise permitted or compelled by law, a solicitor to whom material known or reasonably suspected to be confidential is disclosed by another solicitor, or by some other person and who is aware that the disclosure was inadvertent must not use the material and must: 31.1.1 return, destroy or delete the material (as appropriate) immediately upon becoming aware that disclosure was inadvertent; and 31.1.2 notify the other solicitor or the other person of the disclosure and the steps taken to prevent inappropriate misuse of the material. 31.2 A solicitor who reads part or all of the confidential material before becoming aware of its confidential status must: 31.2.1 notify the opposing solicitor or the other person immediately; and 31.2.2 not read any more of the material. 31.3 If a solicitor is instructed by a client to read confidential material received in error, the solicitor must refuse to do so’. 204 Blackaby and others (n 105) 381 para 6.95. 203

The Various Forms of Guerrilla Tactics and their Impact …

91

to hear and determine the dispute referred to it, and Article 16 of the Model Law confirms the well-established principle that the tribunal is competent to rule on its jurisdiction. Some institutional rules, like those of the ICC, provide a mechanism for a provisional check on jurisdiction by a body such as the ICC Court.205 However, the competent courts of the seat will normally have ‘concurrent control’ to review the tribunal’s decision on jurisdiction or to decide whether jurisdiction exists. This does not necessarily mean that the arbitration has to be put on hold if one party seeks a ruling from the court: ‘…Therefore, if the validity of the arbitration agreement itself and thus the competence of the arbitrator is impugned, he or she does not have to stop proceedings but can continue the arbitration and consider whether he or she has jurisdiction’.206 The abuse of jurisdictional challenges in general as a guerrilla tactic has been considered above. The present focus is specifically on a particular mechanism for mounting a court challenge, by seeking an injunction to restrain. In a modern, arbitration-friendly jurisdiction, whether a court challenge to the jurisdiction is made prior to the issue of an award or afterwards (in the latter case by means of an application to set aside or refuse recognition or enforcement) courts will generally give effect to valid arbitration agreements. This idea is enshrined in Article II of the New York Convention, which makes it mandatory for the courts of Contracting States to refer disputes subject to an arbitration agreement to arbitration ‘unless the said agreement is null and void, inoperative or incapable of being performed’.207 Although at the time of drafting the Model Law it was recognised that concurrent control might lead to delaying tactics, in practice if care is taken to choose a neutral seat with a modern judicial approach, these should get short shrift. In practice, a party who takes part in an arbitration may be subject to time limits for objecting to the jurisdiction of the tribunal, for example, under the Model Law, Art 16(2), and this will discourage tactical challenges during the proceedings. However, this will not prevent a party from revisiting a tribunal’s decision of jurisdiction for the purposes of setting aside an award or resisting its recognition or enforcement, whether or not it has taken part in the arbitration. As we shall see, it will also not 205

For example, ICC Arbitration Rules 2021, art 6(4) states: ‘In all cases referred to the [ICC] Court under Article 6(3), the Court shall decide whether and to what extent the arbitration shall proceed. The arbitration shall proceed if and to the extent that the Court is prima facie satisfied that an arbitration agreement under the Rules may exist. In particular: (i) where there are more than two parties to the arbitration, the arbitration shall proceed between those of the parties, including any additional parties joined pursuant to Article 7(1), with respect to which the Court is prima facie satisfied that an arbitration agreement under the Rules that binds them all may exist; and (ii) where claims pursuant to Article 9 are made under more than one arbitration agreement, the arbitration shall proceed as to those claims with respect to which the Court is prima facie satisfied (a) that the arbitration agreements under which those claims are made may be compatible, and (b) that all parties to the arbitration may have agreed that those claims can be determined together in a single arbitration. The Court’s decision pursuant to Article 6(4) is without prejudice to the admissibility or merits of any party’s plea or pleas’. 206 Jack Tsen-Ta Lee, ‘Separability, Competence-Competence and the Arbitrator’s Jurisdiction in Singapore’ (1995) 7 Singapore Academy of Law Journal 421–422. 207 Similar wording is found in Article 8 of the UNCITRAL Model Law.

92

3 The Nature of Guerrilla Tactics in International Arbitration

prevent a party from seeking to restrain the pursuit of the arbitration via the issue of an injunction in the courts of a less scrupulous or less neutral jurisdiction. Accordingly, there have been circumstances in which an anti-arbitration injunction, described by one commentator as a ‘nightmare scenario’,208 can be sought before a national court (usually the national court of the challenging party) to circumvent the parties’ agreement to arbitrate.209 The order would be made against the relevant party to suspend or terminate the commencement or continuation of the arbitration.210 Additionally or alternatively, albeit less commonly, it may be served upon the arbitral tribunal ‘with the consequence that the tribunal is, either explicitly or tacitly, denied the power to rule on its own jurisdiction’.211 Although such injunctions may be granted for legitimate reasons (e.g. if there is a breach of an exclusive jurisdiction clause), in the past they ‘have been made for the intended purpose of protecting nationals of the issuing court and to intimidate the tribunal’.212 Frequently such cases involve disputes between the State of the issuing court, or an entity owned by that State, and a foreign party.213 Such tactics may involve blatant attempts to evade the arbitration agreement and bring the foreign party before the national court of the State party. Such circumstances certainly qualify as guerrilla tactics. An arbitral tribunal faced with an anti-arbitration injunction issued by a national court from a jurisdiction other than the seat of the arbitration may be faced with difficult decisions. The tribunal could choose to disregard the anti-arbitration injunction and carry on with the arbitration, on the basis that it has the power to rule on its own

208

Julian Lew, ‘Achieving the Dream: Autonomous Arbitration’, (2006) 22 Arbitration International 180. 209 Nadja Erk-Kubat, Parallel Proceedings in International Arbitration: A Comparative European Perspective (Kluwer Law International 2014) 131: ‘Anti-arbitration injunctions are defined as orders issued against a party (or, at times, even against arbitrators) to preclude the initiation or continuation of an arbitration or the enforcement of an arbitral award (anti-enforcement injunction) on the grounds that the parties’ arbitration agreement was either invalid or did not cover the claims asserted before the arbitrators’. 210 Lew (n 208); Shell Petroleum Development Company of Nigeria Limited v Crestar Integrated Natural Resources Limited Appeal No CA/L/331M/2015. 211 Emmanuel Gaillard, ‘Reflections on the Use of Anti-Suit Injunctions in International Arbitration’ in Loukas A Mistelis and Julian DM Lew (eds), Pervasive Problems in International Arbitration (Kluwer Law International 2006) 205. 212 Lew (n 208). 213 For example, in Karaha Bodas Co. LLC (KBC) v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and PT, PLN (Persero) Decision of 18 December 2000, 16(3) Mealey’s IAR C-2 (2001) (the Pertamina case) an arbitral award was granted in favour of KBC. Subsequently, Pertamina, the Indonesian company, sought and was granted an injunction by the District Court of Central Jakarta, Indonesia, against KBC to prevent it from enforcing the arbitral award,

The Various Forms of Guerrilla Tactics and their Impact …

93

jurisdiction.214 Moreover, the arbitral tribunal has a general duty to avoid unnecessary delay and costs. Nonetheless, any arbitral award subsequently rendered by the arbitral tribunal might be faced with obstacles at the time of enforcement, especially if the winning party is trying to enforce the arbitral award in the same jurisdiction where the injunction was granted.215 Furthermore, continuation of the arbitration from that point might be viewed as an abuse of the court’s process.216 Also, if by the time the arbitral tribunal renders an arbitral award, the court determines that the arbitral tribunal did not possess jurisdiction to begin with, the arbitral award could be set aside and the parties will ‘have wasted unnecessary costs on the substantive hearings and the arbitrators’ fees’.217 Thus, the arbitral tribunal may opt for suspending the arbitration.218 Nevertheless, if an application to a national court for an anti-arbitration injunction has been initiated, the opposing party could instead request the arbitral tribunal or the national court of the seat of arbitration to issue an anti-suit injunction. The anti-suit injunction would then counter the application for an anti-arbitration injunction, as well as that court’s acceptance of jurisdiction. Alternatively, the opposing party may appear before the national court hearing the application for an anti-arbitration injunction to request for a stay of its proceedings, arguing that that court was exercising its power prematurely in the light of the existence of a valid arbitration agreement. A similar notorious guerrilla tactic which also involves an unmeritorious challenge in a court occurs where a party brings parallel proceedings in breach of an agreement to arbitrate before ‘a court renowned for being slow’, or perhaps one believed to favour its own nationals, thereby increasing costs and putting pressure on the other party.219

214

Julian David Matthew Lew, ‘Control of Jurisdiction by Injunctions Issued by National Courts’ in Albert Jan Van den Berg (ed), International Arbitration 2006: Back to Basics?: ICCA Congress Series No 13 (Kluwer Law International 2007) 219; Born (n 106) 855; Nicholas Poon, ‘The Use and Abuse of Anti-Arbitration Injunctions ‘(2013) 25 The Singapore Academy of Law Journal 260; Gary B. Born, International Commercial Arbitration (3rd edn, Kluwer Law International 2021) 1312: ‘[v]irtually no authorities support the notion that, when presented with a challenge to its jurisdiction, an arbitral tribunal must suspend proceedings and await judicial resolution of the jurisdictional challenge’. 215 Lew (n 208). 216 Sabbagh v Khoury & Ors [2018] EWHC 1330 [35]. 217 Poon (n 214) 260–261. 218 Northern Regional Health Authority v Derek Crouch Construction Co Ltd [1984] 1 QB 644 (CA) 673: Regardless of whether or not there is an anti-arbitration injunction, if ‘an Arbitrator has reason to believe that he is being asked to decide issues which the Court currently has under consideration, he should ask himself whether the Court, if asked, would be likely to enjoin him from proceeding. If the answer is ‘Yes’, he should indicate his view and give the parties an opportunity of applying to the Court for a mandatory injunction requiring him to proceed. If the answer is ‘No’, he should indicate his view and give the parties an opportunity of applying to the Court for a prohibitory injunction restraining him from proceedings’. 219 Thomas Panighetti, ‘Has London Out-maneuvered the Italian Torpedo’ (2013) 5 Yearbook on Arbitration and Mediation 284.

94

3 The Nature of Guerrilla Tactics in International Arbitration

One version of this in the European Union was sometimes referred to as the Italian torpedo. Prior to the Brussels Regulation of 2012 (Brussels II)220 coming into force, parties from the European Union member States in the case of any dispute could bring an action in Italy, which was notoriously slow, even though Italy had no connection to the claim, to frustrate their opponents.221 In this way, the misbehaving party might simply notify the arbitral tribunal and the opposing party of the commencement of the proceedings and request that the arbitral tribunal stay the arbitration on the back of the commencement itself without actually securing an injunction since prior to the recast Brussels II there was a mandatory stay in favour of the court first seized.222 In a situation where such proceedings in breach of the agreement to arbitrate are commenced, the opposing party will likely find itself with a new cause of action against that breach and can request the arbitral tribunal for permission to amend and expand their relief to include damages for such breach, which damages would generally reflect the cost of pursuing the jurisdictional battle in that court. Furthermore, if the arbitral tribunal does order a stay of the arbitration, then the opposing party will also find itself suffering procedural injustice as a result of the delay owing to such vexatious proceedings.

Unethical Party-appointed Expert Witnesses Commercial disputes may involve technical matters, and the proper assessment of such matters in order to make a determination may require specialised knowledge and skill not possessed by the arbitrators. It is common to use experts to provide their opinion on such matters which will be based on the facts in the case seen through the prism of their knowledge and experience.223 Sometimes tribunals appoint their own experts, but the more relevant situation for our purposes occurs in the common situation where each party appoints its own expert witness. In practice, the experts’ views will be contained in experts’ reports, but they may be required to appear before the tribunal for cross-examination. If a factual witness provides false evidence, the factual witness may have been found to have committed perjury.224 Expert witnesses on the other hand provide their 220

Council Regulation (EC) No 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters accessed 15 September 2021. 221 Goshawk Dedicated Ltd v Life Receivables Ireland Ltd [2008] I L Pr 50 (Irish High Court) [6.3]. 222 Panighetti (n 219) 277. 223 VS Mani, International Adjudication: Procedural Aspects (Martinus Nijhoff Publishers 1980) 234: ‘Expert evidence is presented before a tribunal in cases involving complicated facts that require elucidation or solution by persons having, by virtue of their specialization, training, vocation or experience, a special and intimate knowledge of these or similar facts’. 224 Doak Bishop and Margrete Stevens, ‘International Code of Ethics for Lawyers Practicing Before International Arbitral Tribunals’ in Albert Jan van den Berg (ed), Arbitration Advocacy in Changing

The Various Forms of Guerrilla Tactics and their Impact …

95

opinion on relevant technical issues in the dispute. An expert witness may be wrong in his or her honest opinion but would not on that basis itself have committed perjury, unless the facts stated were false, for example the expert’s credentials.225 Even if evidence given is not on oath, the fact that an award resulted from knowingly false evidence may make it vulnerable to challenge. Expert witnesses, including those instructed by the parties, should be independent, and they have been as described as a crucial resource. However, there are various circumstances in which a partyappointed expert witness might be regarded as unethical in his or her conduct. This is commonly where he or she might not be seen as independent but instead is suspected of being a ‘hired gun’. Party-appointed expert witnesses are always (to some extent) hired guns because they are paid to give opinions that the party paying them wants to hear. After all, ‘no party has submitted an expert report that said the party did not have a claim for damages’.226 A common general complaint is that an expert witness assumed the role of the party’s legal representative and behaved like an advocate in his or her client’s cause by not offering an objective and a balanced view.227 More specific examples include the following situations: if an expert witness is paid on a conditional or contingency fee basis, this could give rise to suspicions of bias;228 second, expert witnesses have been accused of being extremely selective in considering evidence and ignoring or suppressing any evidence that would go against his or her client’s position;229 third, the expert witness may be reluctant to disclose any shift in opinion caused by reading the analysis contained in the opposing party’s expert witness report;230 fourth, the expert witness may profess to be competent to give evidence notwithstanding a lack of the requisite expertise in relation to the specific issues on which he or she is

Times: ICCA Congress Series No 15 (Kluwer Law International 2011) 418. For example, the Swiss Criminal Code, art 307 provides possible criminal liability for false testimony in arbitration. Although there is no explicit duty in England for witnesses to tell the truth unless under oath, they may still be liable if such conduct prevents the course of justice. 225 Baber v Kenwood Manufacturing Co Ltd (1978) 1 LLR 179 at 181; Bernard K Duffy and Martin Jacobi, The Politics of Rhetoric (Greenwood Press 1993) 140. 226 Daniel Greineder, ‘Global Arbitration Review: The Middle Eastern and African Arbitration Review 2019 – Expert Evidence’ (April 2019) accessed 3 January 2020. 227 UBC (Construction) Ltd v Sung Foo Kee Ltd [1993] 2 HKLRD 207; Munkenbeck and Marshall v Kensington Hotel [1999] 15(3) Const LJ 231; Pearce v Ove Arup Partnership Ltd and Ors [2001] EWHC Ch 455; London Underground v Kenchington Ford Plc [1998] 63 Con LR1 TCC; Royal and Sun Alliance Trust Co Ltd v Healy and Baker LTL 19/10/2000; Great Eastern Hotel v John Laing Construction [2005] EWHC 181. 228 Factortame Ltd v Secretary of State for the Environment (No. 2) [2002] EWCA Civ 93; [2002] 4 All ER 97; [2003] BLR 1. 229 Royal and Sun Alliance Trust Co Ltd v Healy and Baker (n 227). 230 National Justice Compania Naviera SA v Prudential Assurance Co Ltd (The Ikarian Reefer) (No 1) [1993] 2 Lloyd’s Rep 68.

96

3 The Nature of Guerrilla Tactics in International Arbitration

testifying;231 fifth, an expert witness may allow for the legal representative of the party that appointed the expert witness to independently draft or amend the substantive content of the expert’s opinions in the expert report.232 It is clear that there may be great difficulty for arbitrators in attempting to make a decision on issues which are not within their field of expertise when they are faced with conflicting statements of opinion from two witnesses who profess to be experts on those issues. The IBA Rules on the Taking on the Evidence contains a section that provides guidance for party-appointed expert witnesses.233 This is intended to assist the tribunal in its task and to remind the expert of his or her duties. For example, it requires the signed report to contain a description of the instructions to the expert, and a statement of the expert’s independence from the parties, their legal advisors and the tribunal. The expert’s opinions and conclusions should also describe the methods, evidence and information used in arriving at them, and the experts have to affirm genuine belief in the opinions expressed. Reports which comply with this guidance should be easier for arbitrators to assess. In addition, generally the less objective and independent an expert witness appears, the less credible the expert witness is likely to be in the eyes of an experienced arbitral tribunal. ‘[E]xpert witnesses who exaggerate and distort facts and commercial or scientific standards lose the respect of the arbitral tribunal. Honesty and realism are in an expert’s own best interest. When arbitrators lose trust in an expert witness, they will not believe anything he or she says’.234 The twenty-first century has thus seen rather more focus on the concerns surrounding the independence of expert witnesses. The CIArb also introduced a Protocol for the Use of Party-Appointed Expert Witnesses in International Arbitration (2007). It provided a procedure for identifying the issues to be dealt with by way of expert evidence, the number of experts, their identity, what tests or analyses are required, the independence of the experts, the contents of the experts’ opinions, privilege, meetings of experts and the manner of expert testimony.

Another common guerrilla tactic is when appointing a multiplicity of experts on the same or similar issues and/or the parties adducing experts’ reports on different aspects of the case, with consequent delays as each then addresses the matters raised by the other party.235 This is avoided by specifying the number of experts and the precise issues their evidence should address in a direction from the tribunal.

231

Proton Energy Group SA v Orien Lietuva [2013] EWHC 2872 (Comm); [2014] 1 All ER (Comm) 972; Humber Oil Terminals Trustee v Associated British Ports [2012] EWHC 1336 (Ch). 232 Robin Ellis Ltd v Malwright Ltd [1999] BLR 81. 233 The IBA Rules on the Taking of Evidence, art 5 is titled ‘Party-Appointed Experts’. 234 Greineder (n 226). 235 Stutton, Gill and Gearing, Russell on Arbitration (n 138) 261 para 5–161.

The Various Forms of Guerrilla Tactics and their Impact …

97

Creating a Conflict of Interest As we have noted, arbitration laws236 and rules237 require all members of an arbitral tribunal to be impartial and independent of all relevant parties throughout the proceedings, with a possibility of challenge by a party who believes an arbitrator doses not satisfy this requirement. If there are circumstances which would give rise to justifiable doubts as to an arbitrator’s impartiality and independence in the mind of a reasonable and informed third person, the arbitrator should not take the appointment. If the arbitration has commenced, an arbitrator should not continue to act if he or she has any doubt as to his or her ability to be impartial or independent. The IBA Guidelines on Conflicts of Interest set out guidance as to how particular scenarios should be viewed and what action should generally be taken in those circumstances. For example, at one extreme, scenarios in the ‘Non-Waivable Red List’ are those in which an arbitrator should not act, even with the consent of the parties, whereas at the other extreme, the ‘Green List’ deals with situations where there is not even an objective appearance of a conflict of interest, let alone an actual conflict, and so not even disclosure is required. Scenarios on the ‘Waivable Red List’ and the ‘Orange List’ lie in between these extremes. We have seen that there is still scope for a recalcitrant party to delay and disrupt proceedings by launching spurious challenges where there is no real conflict of interest, though the Guidelines no doubt assist in disposing of these quickly. It is also sometimes possible for a party to engineer a conflict in order to have a similar effect, or specifically to undermine the other side’s choice of arbitrator or counsel. A party might attempt to create an actual or apparent conflict of interest in an arbitration in order to remove the opposing party’s appointed arbitrator or legal representative, thereby creating an unfair advantage to the party who created the conflict.238 The misbehaving party might do this by (i) initiating a claim against them (i.e. the opposing party’s appointed arbitrator or legal representative), (ii) causing the arbitrator or legal representative to become a witness in the case, (iii) appointing a ‘necessary’ witness or expert in the arbitration with whom they might be affiliated, or (iv) appointing a legal representative who has or had a connection with an arbitrator,239 any of which would have the effect of creating a conflict of interest and 236

For example, UNCITRAL Model Law, art 12 requires arbitrators to be independent and impartial. Likewise, under German Code of Civil Procedure (ZPO), s 1036(2), impartiality or independence is a ground to challenge an arbitrator. However, English Arbitration Act 1996, s 33 only provides that arbitrators be impartial. Similarly, under the Swiss Federal Statute on Private International Law, art 180, arbitrators are only required to be independent. 237 For example, ICC Arbitration Rules 2021, art 11(1) states ‘Every arbitrator must be and remain impartial and independent of the parties involved in the arbitration’. Similarly, the LCIA Arbitration Rules 2020, art 5 requires arbitrators be ‘impartial and independent at all times’. 238 T Leigh Anenson, ‘Creating Conflicts of Interest: Litigation as Interference with the AttorneyClient Relationship’ (2006) 43(2) American Business Law Journal 173. 239 For example, in Hrvatska Elektroprivreda d.d. v Republic of Slovenia, (ICSID Case No. ARB/05/24), Decision of 6 May 2008, there was a change in the respondent’s legal team (just some days prior to the merits hearing) which resulted in the inclusion of a barrister who was a

98

3 The Nature of Guerrilla Tactics in International Arbitration

consequently potentially prevent the arbitrator or legal representative from acting in their original capacity in the arbitration. With regard to the first scenario, frivolous or vexatious claims are usually dismissed.240 As for the second and third scenario, similar to most arbitration laws and rules, Article 19(2) of the UNCITRAL Model Law states: Failing such agreement, the arbitral tribunal may, subject to the provisions of this Law, conduct the arbitration in such manner as it considers appropriate. The power conferred upon the arbitral tribunal includes the power to determine the admissibility, relevance, materiality and weight of any evidence.

Therefore, the tribunal has the discretion not only to admit evidence that might be relevant and material but also to reject evidence ‘that is irrelevant or repetitious or unsuitable to prove the facts it purports to prove’.241 Moreover, some arbitration rules, such as the LCIA Arbitration Rules 2020, require the parties to act in good faith and empower the arbitral tribunal to do everything necessary to discharge its general duties.242 Article 18.4 of the LCIA Rules now specifically empowers the tribunal to withhold approval of any change or addition to a party’s legal representative ‘where such change or addition could compromise the composition of the Arbitral Tribunal or the finality of any award (on the grounds of possible conflict of interest or other like impediment)…’. Guidelines 5 and 6 of the IBA Guidelines on Party Representation similarly state that the tribunal may exclude a party representative in such circumstances, and indicates that the representative should not accept appointment where they have a relationship with an arbitrator that would create a conflict of interest ‘unless none of the Parties objects after proper disclosure’.243

member of the same set of Chambers as the Presiding arbitrator in the case. The tribunal in that case found that ‘the Respondent’s conscious decision not to inform the Claimant or the Tribunal’ about the involvement of the counsel in the case was one of the key factors which led to its finding that the involvement of the counsel in question was inappropriate and improper; A similar scenario was included as one of the procedural issues in the Twenty Seventh Annual Willem C. Vis International Commercial Arbitration Moot (2019–2020) where there was a possible conflict of interest between the Respondent’s appointed expert witness and the Claimant’s appointed arbitrator. The mooters had to argue whether or not the arbitral tribunal should exclude Respondent’s appointed expert witness: accessed 6 May 2020. 240 The concept of summary judgment, i.e. judgment entered into by a court at an early stage and without a full trial, is available in various domestic court litigation systems. Similarly, assuming that there exists an arbitration agreement, few arbitral institutions have such procedures available in their arbitration rules. 241 Konstantin Pilkov, ‘Evidence in International Arbitration: Criteria for Admission and Evaluation’ (2014) 80(2) Arbitration 147. 242 LCIA Arbitration Rules 2020 r 14.2 states: ‘The Arbitral Tribunal shall have the widest discretion to discharge these general duties, subject to the mandatory provisions of any applicable law or any rules of law the Arbitral Tribunal may decide to be applicable; and at all times the parties shall do everything necessary in good faith for the fair, efficient and expeditious conduct of the arbitration, including the Arbitral Tribunal’s discharge of its general duty’. 243 See also Hrvatska Elektroprivreda d.d. v Republic of Slovenia (n 239).

The Various Forms of Guerrilla Tactics and their Impact …

99

Multiplicity of Arbitration Proceedings We now consider the guerrilla who launches claims arising out of the same agreement, in a multiplicity of proceedings. This may come about in different ways. Gaillard points out that should the aggrieved party decide to commence arbitration but be concerned about whether the arbitral tribunal ‘will be sympathetic to its case, that party could decide to “test the waters” by submitting to arbitration only one of its claims’.244 Generally, an arbitrator’s characteristics such as gender, age, working experience, ‘professional background, geographical origin, the dominant legal tradition in that region, and language’245 are some of the factors that might indicate how arbitrators think and decide.246 Thus, a party may wish to ascertain whether this arbitral tribunal was suited to hear more than just the first claim in due course. However, this concept of ‘testing the waters’ may constitute an abuse of process, because the recipient of the claim is misled into thinking it has been sued for just that one claim, when in fact there are others held in reserve. If they decide that they are satisfied with the composition of the tribunal, the guerrilla may decide to amend their initial pleading to include all those remaining claims.247 If the guerrilla is not satisfied with the composition of that first arbitral tribunal, they might commence another or even multiple arbitration proceeding(s) pursuant to the same arbitration agreement. The commencement of subsequent arbitration proceedings would then have to be decided by another arbitral tribunal or multiple arbitral tribunals in order to increase its perceived chances of winning, very similar to the concept of roulette. The odds of winning are higher when betting on multiple numbers concurrently rather than on a single number.248 Or it could simply be that the guerrilla wants to make matters more difficult for the other side.249 Assuming these subsequent claims all fall within the ambit of the arbitration clause, do they all have to be accepted by the tribunal(s)? If the parties have agreed to institutional rules empowering consolidation of arbitrations, this may be one option to minimise the effect of a multiplicity of proceedings. For example, if any subsequent arbitration proceeding were commenced, the opposing party could request the arbitral tribunal in the first arbitration proceeding to consolidate the subsequent arbitration(s) into a single arbitration proceeding.250 244

Gaillard (n 3) 7. Johan Lindholm, The Court of Arbitration for Sport and its Jurisprudence: An Empirical Inquiry into Lex Sportiva – ASSER International Sports Law Series (Asser Press 2019) 263. 246 Todd N Tucker, Judge Knot: Politics and Development in International Investment Law (Anthem Press 2018) 129–130. 247 Gaillard (n 3) 7. 248 John Marchel, in T Laine Cunningham (ed), 101 Casino Gambling Tips: Affordable Strategies & Techniques for Maximizing Profits & Reducing Losses (Four Suits Pub 1998) 66; Tony Leino and others, ‘The Relationship Between Structural Game Characteristics and Gambling Behavior: A Population-Level Study’ (2015) 31(3) Journal of Gambling Studies 1302. 249 Gaillard (n 3) 7. 250 For example, HKIAC Arbitration Rules 2018, art 28.1 states: ‘HKIAC shall have the power, at the request of a party and after consulting with the parties and any confirmed or appointed arbitrators, 245

100

3 The Nature of Guerrilla Tactics in International Arbitration

One of the factors an arbitral tribunal might take into account with regard to whether consolidation should be ordered is whether all the claims in the separate arbitrations have been made pursuant to the same arbitration agreement.251 Usually, if consolidation of the arbitrations is ordered, they are ‘consolidated in the arbitration that commenced first’.252 However, its efficacy against guerrilla tactics is minimal, given that consolidation usually has to occur prior to the formation of the tribunal in the second arbitration, unless the same tribunal is appointed in both arbitration proceedings.253 Arguably, it is possible for the arbitral tribunal constituted under the first arbitration to issue an injunction to prevent the subsequent arbitrations from continuing. Where there is a final arbitral award, however, it may be possible to prevent a guerrilla from re-arbitrating matters which have been determined by it. Although there is no doctrine of precedent in international arbitration because of the confidentiality to which awards are generally subject, a final award can have an effect on other claims between the same parties under the doctrine of res judicata.254 It is well established that arbitration awards finally dispose of disputes between the parties to the arbitration, unless perhaps they are set aside or nullified by a competent court (there have been debates and contrary judgments as to whether a foreign award that has been set aside at the State in which the arbitral award was rendered may be enforced in other States). Thus, any attempt to ‘reopen’ matters can give rise to res judicata, at least in common law jurisdictions, in particular, ‘cause of action estoppel’ or ‘issue estoppel’. ‘Action estoppel’ can preclude ‘a party from challenging the same cause

to consolidate two or more arbitrations pending under these Rules where: (a) the parties agree to consolidate; or (b) all of the claims in the arbitrations are made under the same arbitration agreement; or (c) the claims are made under more than one arbitration agreement, a common question of law or fact arises in all of the arbitrations, the rights to relief claimed are in respect of, or arise out of, the same transaction or a series of related transactions and the arbitration agreements are compatible’. 251 For example: CEPANI Arbitration Rules 2020, art 13(2)(b); HKIAC Arbitration Rules 2018, art 28.1(b) (n 250). 252 Dimitar Kondev, Multi-Party and Multi-Contract Arbitration in the Construction Industry (Wiley Blackwell 2017) 112. 253 For example, SIAC rules 8.7 states: ‘After the constitution of any Tribunal in the arbitrations sought to be consolidated, a party may apply to the Tribunal to consolidate two or more arbitrations pending under these Rules into a single arbitration, provided that any of the following criteria is satisfied in respect of the arbitrations to be consolidated: a. all parties have agreed to the consolidation; b. all the claims in the arbitrations are made under the same arbitration agreement, and the same Tribunal has been constituted in each of the arbitrations or no Tribunal has been constituted in the other arbitration(s); or c. the arbitration agreements are compatible, the same Tribunal has been constituted in each of the arbitrations or no Tribunal has been constituted in the other arbitration(s), and: (i) the disputes arise out of the same legal relationship(s); (ii) the disputes arise out of contracts consisting of a principal contract and its ancillary contract(s); or (iii) the disputes arise out of the same transaction or series of transactions’. 254 K R Handley and George Spencer Bower, The Doctrine of Res Judicata (LexisNexis 2009) 1: ‘A res judicata is a decision, pronounced by a judicial tribunal having jurisdiction over the cause and the parties, that disposes once and for all the matter(s) so decided, so that except on appeal it cannot be relitigated between the parties or their privies’.

The Various Forms of Guerrilla Tactics and their Impact …

101

of action in subsequent proceedings’,255 while issue estoppel means that ‘where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to re-open that issue’.256 A guerrilla’s aspirations may also be frustrated by what in common law jurisdictions is termed ‘the rule in Henderson v Henderson’.257 This rule is now seen as a distinct doctrine preventing abuse of process, in particular preventing parties from raising matters which ought to have been raised in an earlier proceeding. In fact, ‘..an abuse of process may arise…where the issue could and should have been raised at an earlier stage…and…that may be the case at different stages of the same proceedings as well as in subsequent proceedings…’.258 On this basis, a tribunal’s decisions on preliminary issues might be relied upon to prevent guerrillas attempting to reopen in the same hearing issues that have already been finally resolved. This is an area where some civil law countries have somewhat different, and narrower, formulations, which clearly recognise the res judicata effect of an award,259 but limit res judicata to the cause of action estoppel and to the operative part of the award, but not the reasoning.260 However, others extend res judicata ‘to the reasons constituting the necessary foundation of the judgment’.261 And similar to the rule in Henderson v Henderson, certain civil law countries prevent parties from ‘raising a new action based on legal grounds which could have been raised, but were not raised, in earlier proceedings’.262

255

Virgin Atlantic Airways Limited v Zodiac Seats UK Limited (formerly known as Contour Aerospace Limited) [2013] UKSC 46 [17]. 256 Arnold v National Westminster Bank plc [1991] 2 AC 93 [104]-[105]. 257 Handley and Bower (n 254). 258 Daewoo Shipbuilding and Marine Engineering Company Limited v Songa Offshore Equinox Limited [2020] EWHC 2353 [128]. 259 Bernard Hanotiau, ‘The Res Judicata Effect of Arbitral Awards’ (2003) Special Supplement ICC International Court of Arbitration Bulletin 43. 260 Philippe Hovaguimian, ‘The Res Judicata Effects of Foreign Judgments in Post-Award Proceedings: To Bind or Not to Bind?’ (2017) 34(1) Journal of International Arbitration 82: ‘Some civil law countries view res judicata as arising only with regard to the operative part of a judgment and not its ratio decidendi, with the exception of findings made on certain defences’. 261 Philippe Hovaguimian (n 260). 262 Philippe Hovaguimian (n 260) 83: ‘In a 2006 decision, the French Cour de Cassation held that the claimant (and, in a later decision, the defendant) was under the obligation to raise at first instance all of the legal grounds which could be relied upon (a so-called ‘concentration des moyens’) so that a subsequent claim based on an initially omitted ground was barred by the res judicata effect of the first judgment. Spanish law similarly provides that legal grounds that could have been invoked in the earlier proceedings will be considered identical to those raised in later proceedings for the purpose of res judicata’.

102

3 The Nature of Guerrilla Tactics in International Arbitration

A transnational approach was recommended by the International Commercial Arbitration Committee of the International Law Association in 2006.263 This took the view that res judicata formulations by domestic courts are not appropriate in the different context of international arbitration. The ILA suggested that an arbitral award should have conclusive and preclusive effects in subsequent arbitral proceedings if: (i)

it has become final and binding in the country of origin and there is no impediment to recognition in the country of the place of the subsequent arbitration;

(ii)

it has decided on or disposed of a claim for relief which is sought or is being reargued in the subsequent arbitration proceedings;

(iii)

it is based upon a cause of action which is invoked in the further arbitration proceedings or which forms the basis for the subsequent arbitral proceedings; and

(iv)

it has been rendered between the same parties.264

Items (ii) to (iv) are often referred to as the ‘triple identity test’ for res judicata (same relief, same subject matter, same parties).265 It has been acknowledged that there may be difficulties in delimiting the scope of res judicata. The most difficult question to answer in practice is whether the ‘cause of action’ is identical. There is a tendency to construe this term widely in that it suffices if the ‘question in dispute’ is identical. The ‘question in dispute’ would cover identical claims, counterclaims and all fundamental issues of fact and law already decided in the prior decision. However, it would not cover claims and defenses that were not raised in the earlier dispute….Regarding such claims, however, res judicata may apply where not affording preclusive effect to a tribunal’s prior decision would essentially amount to an abuse of rights or abuse of process by the party raising the claim in a second arbitration. This is the case where a claimant institutes a second arbitration for certain claims which it might just as well have raised in the first arbitration. The general Principle of good faith and fair dealing requires the claimant to raise all claims as early as possible under the circumstances and not intentionally withhold any claims for later determination.266

The ILA thus effectively supported the wider common law concept of issue estoppel in international arbitration, recommending that an arbitral award should not only have conclusive and preclusive effects in later arbitral proceedings as to determinations and relief, both in the dispositive part and in all reasoning necessary thereto; but also preclusive effects as to a claim, cause of action or issue of fact or law, which could have been raised, but was not, in the proceedings resulting in that award, provided that the raising of any such new claim, cause of action or new issue of fact or law amounts to procedural unfairness or abuse.267 263

Filip De Ly and Audley Sheppard, ‘ILA Final Report on Res Judicata and Arbitration*Seventysecond International Law Association Conference on International Commercial Arbitration, Toronto, Canada, 4–8 June 2006’, (2009) 25(1) Arbitration International 67–82. 264 Filip De Ly and Audley Sheppard, ‘ILA Final Report on Lis Pendens and Arbitration’ (2009) 25(1) Arbitration International 85. 265 Filip De Ly and Audley Sheppard (n 263) 76. 266 Trans-lex Law, ‘Commentary to Trans-Lex Principle’ accessed 25 July 2021. 267 Ly and Sheppard (n 264).

The Various Forms of Guerrilla Tactics and their Impact …

103

The ILA’s detailed analysis and recommendations are welcome, providing some ammunition for parties, and tribunals, to utilise in warding off guerrilla attacks; but its recommendations do not of course represent a real harmonisation of an approach to the scope of res judicata in international arbitration. In 2005, the year before the ILA final Report, one commentator said that, …the current arbitral framework falls short of providing a sufficient and autonomous regulation of the effect of international arbitral awards. Instead, the issue is referred, either expressly or impliedly, to the domestic provisions on res judicata [which are]…unsuitable in practical terms for application to international arbitration….268

The framework of regulation for international arbitration epitomised by the New York Convention thus continues to stipulate that awards shall be ‘binding’ without spelling out in detail the effects of a binding award.269 Specific practical difficulties remain. The determination of whether the ‘question in dispute’ determined in an earlier award is the same as that raised in another arbitration can in practice give rise to difficulties and differences of opinion even between very experienced arbitrators. See, for example, the majority and dissenting opinions on this point in Apotex Holdings Inc. and Apotex Inc. v USA.270 It has also been pointed out that arbitrators may be reluctant to take cognisance of previous awards which are subject to confidentiality agreements,271 and may fear the setting aside of their own awards for lack of due process if they refuse to hear arguments on a previously determined issue. Accordingly, ‘….some degree of uniformity, perhaps through a treaty mechanism, needs to be established at global or regional level with a view to sustaining the res judicata effect of issues already determined by lawfully constituted tribunals’.272

268

Stavros Brekoulakis, ‘The Effect of an Arbitral Award and Third Parties in International Arbitration: Res Judicata Revisited’ (2005) 16 The American Review of International Arbitration 5. 269 Brekoulakis (n 268): Nor can adequate regulation regarding the effect of an international award be found in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (New York Convention). This highly authoritative international treaty deals with the enforcement rather than the conclusiveness of an arbitral award. This explains the lack of any detailed provision with respect to the arbitral effect of an international award, apart from the brief statement in Article III that ‘[e]ach Contracting State shall recognize arbitral awards as binding…’. 270 (ICSID Case No. ARB(AF)/12/1) (NAFTA) (Award, 25 August 2014) [7.42]–[7.66]. 271 cf Associated Electric and Gas Insurance Services Ltd v European Reinsurance Company of Zurich [2003] 1 WLR 1041 for a robust approach viewing such cognizance as a type of enforcement of the first award. 272 Ilias Bantekas, An Introduction to International Arbitration (Cambridge University Press 2015) 192.

104

3 The Nature of Guerrilla Tactics in International Arbitration

Arbitrator Guerrilla Tactics: Corruption and Coercion, Hostile Behaviour, Reporting Back to a Party, Resignation The majority of the guerrilla tactics addressed in this book are carried out directly by a party to the arbitration and their legal representative rather than by members of the tribunal (although we have examined the possible involvement of witnesses in unethical behaviour), and complaints about arbitrators’ tactics are less common. However, it is plain that the integrity of international arbitration depends on the participants’ belief that arbitrators will comply with the duties and high standards to which they are held, which have in turn evolved to serve as safeguards against misbehaviour. An arbitrator may have many overlapping duties derived from law, from the express wording in the arbitration agreement, from institutional rules, or from what is accepted as best practice, such as that set out in ‘soft law’ guidelines like the IBA Guidelines on Conflicts of Interest. Examples are the duty to act promptly and with care, and to produce an award within any agreed time limit. We have already discussed the duty to be impartial and independent, and the duty to act judicially, and once again our discussion of guerrilla tactics by arbitrators will necessarily focus on those duties. Although it is possible that such tactics originate with the arbitrator, often they are in reality a sort of vicarious guerrilla tactic by a party to the arbitration who somehow subverts the independence and impartiality of a tribunal member.

Corruption or Coercion of an Arbitrator The most direct challenge to the arbitrator’s ethics is criminal activity, where corruption or bribery or threats take place.273 A compromised arbitrator can affect the result of an arbitration by favouring the corrupt party in the award, especially if he or she is a sole arbitrator, or if the other two members of a three person tribunal have differing views. Such an arbitrator can also have an impact during the proceedings, for example by exhibiting hostility towards the other party, contributing to delay, exerting biased influence on procedural rulings, leaking confidential information and sometimes by resigning to create even more delay and disruption. It goes without saying that an arbitrator should not accept bribes274 and should immediately inform the police on being 273

Inan Uluc, ‘Corruption in International Arbitration’ (2016) SJD Dissertations. Paper 1 28 accessed 16 September 2021: ‘The roots of corruption in arbitration, however, are deeply rooted. It is even possible to encounter marks of corruption in Ancient Greek arbitration. For example, Eriphyle, the sister of the King Argos, appears to have been ‘one of the first recorded instances of a corrupt arbitrator’, accepting bribes (of a magic necklace and a magic robe), to decide, inter alia, against her husband. 274 Margaret L Moses, The Principles and Practice of International Commercial Arbitration (2nd ed, Cambridge University Press 2012) 154: Arbitrators found to have accepted bribes will be subject to criminal laws.

Arbitrator Guerrilla Tactics: Corruption and Coercion …

105

approached. There has been some international focus on this problem. The Council of Europe’s Additional Protocol to the Criminal Law Convention of Corruption came into force in 2005,275 and as at 1 June 2021 has been ratified by forty-six countries. It extended the scope of the Convention to arbitrators in commercial, civil and other matters. States becoming Parties to the Convention are required to adopt measures to criminalise the ‘active and passive bribery of domestic and foreign arbitrators and jurors’.276 Threats to arbitrators are not addressed by the Convention, but in most cases and in most jurisdictions they will be criminal in any event,277 and should also should immediately be reported to the police.

Hostile Behaviour by an Arbitrator Arbitrators may also of course be compromised to varying degrees by connections with a party, or indeed by their own personal bias. For whatever reason, an arbitrator who takes an aggressive and hostile approach towards one party, its legal representatives or witnesses, and/or the party’s enquiries and applications, may well raise concerns of bias risks and risks challenge or setting aside of the award.278 However, it is a question of degree, and repeated hostile interruptions by an arbitrator of one of the party’s legal representatives or aggressive questioning of witnesses will not necessarily affect the validity of the arbitral award,279 nor amount to bias sufficient to succeed in a challenge.280 If there is a tribunal of three or more, an unethical arbitrator may have little ultimate effect on the outcome, but an arbitrator acting unprofessionally may undermine his or her credibility with the other members of the arbitral tribunal. It has been suggested that, the more aggressively the arbitrator behaves, ‘the more influential 275

Additional Protocol to the Criminal Law Convention on Corruption, Strasbourg, 15 May 2003, in force 1 February 2005, ETS 191 24 September 2021. 276 Summary, Treaty No. 191, Council of Europe Portal. 277 For example, under Swiss law, intimidation or coercion of arbitrators is a criminal offence. See Franz Xaver Stirnimann Fuentes, ‘Chapter 11: Revision of Awards’ in Manuel Arroyo (ed), Arbitration in Switzerland: The Practitioner’s Guide (Kluwer Law Arbitration, 2013) 1273–1274: ‘The criminal offences contemplated by this provision include perjury or giving false evidence before the arbitral tribunal or any other forum that is of relevance to the arbitral decision (Arts. 306 and 307 read together with Art. 309 of the Swiss Criminal Code (72) and comparable foreign statute); bribery of an arbitrator, a witness or an expert (Arts. 322ter and 322quater Swiss Criminal Code); forgery of evidence (Arts. 251–255 Swiss Criminal Code); intimidation or coercion of arbitrators, witnesses or experts (Arts. 180 and 181 Swiss Criminal Code); and procedural fraud (Prozessbetrug; Art. 146 Swiss Criminal Code)’. 278 Born (n 106) 1522; Hayne, Miller Farni, Inc. v Flume, 888 F Supp 949 (ED Wis 1995). 279 Vantage Deepwater Company et al. v Petrobras Americas Inc et al., Civ Action No 4:18-CV02246 (SD Tex, May 17, 2019); Fort Hill Builders, Inc v National Grange Mutual Insurance Co, 866 F2d 11, 13–4 (1st Cir 1989). 280 Born (n 106) 1522.

106

3 The Nature of Guerrilla Tactics in International Arbitration

the other arbitrator becomes in co-operating with the chairman’.281 If tactics by a party-appointed arbitrator are blatant, in theory it is possible that the presiding arbitrator or chair could intervene and warn or urge the misbehaving arbitrator to ‘behave’.282 However it is a delicate situation, and the presiding arbitrator may well in practice choose not to elevate the issue, partly because of the possible drastic consequences, which might include an investigation and possible removal of the arbitrator.283 It might be also felt that any challenge to the arbitrator should more properly be made by a party, or that a chair criticising a party-appointed arbitrator risks counter-allegations of bias. One possible course would be for the chair or president to raise the matter with the administering institution, but ultimately the formal remedy for an arbitrator’s hostile tactics is by way of a formal challenge by a party. Parties and their representatives are understandably reluctant to mount such challenges unless the misbehaviour is blatant, because they run the risk that the challenge will fail and they may anticipate that they will be subject to resentment in addition to what they see as bias.

Reporting Back to a Party An arbitral tribunal’s deliberation takes place in the absence of the parties and their legal representatives.284 The process need not involve a formal meeting. Its form can vary,285 and it can occur at any stage up until the time the award is rendered.286 It is

281

Phillip Capper, ‘Dealing with Bias and Obstruction’ in Bernhard Berger and Michael E Schneider (eds), Inside the Black Box: How Arbitral Tribunals Operate and Reach Their Decisions (JurisNet, LLC 2014) 50. 282 Capper (n 281) 51. 283 Marc J Goldstein, ‘Living (Or Not) With the Partisan Arbitrator: Are There Limits to Deliberations Secrecy?’ (2016) 32(4) Arbitration International 591. 284 Elza Reymond-Eniaeva, Towards a Uniform Approach to Confidentiality of International Commercial Arbitration (Springer 2019) 65. 285 Decision of the Appointing Authority, Sir Robert Jennings, on the Challenge of Judge Bengt Broms (7 May 2000): ‘A rule of confidentiality of the deliberations must, if it is to be effective, apply generally to the deliberation stage of tribunal’s proceedings and cannot realistically be confined to what is said in a formal meeting of all the members in the deliberation room. The form or forms the deliberation takes varies greatly from one tribunal to another. Anybody who has had experience of courts and tribunals knows perfectly well that much of the deliberation work, even in courts like the ICJ which have formal rules governing the deliberation, is done less formally. In particular the task of drafting is better done in small groups rather than by the whole court attempting to draft round the table. Revelations of such informal discussion and of suggestions made could be very damaging and seriously threaten the whole deliberation process’. 286 Yves Derains, ‘Fifth Annual Commercial Arbitration Lecture: The Arbitrator’s Deliberation’ (2012) 27(4) American University International Law Review 912; David D Caron, ‘Regulating Opacity: Shaping How Tribunals Think’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (Oxford University Press 2015) 385.

Arbitrator Guerrilla Tactics: Corruption and Coercion …

107

widely accepted that the arbitrators have a duty not to disclose their deliberations,287 although arbitration laws are generally silent on the principle.288 Similarly, institutional rules generally do not specifically provide for deliberations to be confidential.289 The reason for confidentiality is ‘to protect the members of the Tribunal from outside influence and to enable them to freely exchange their views and arguments to reach a decision’.290 If, say, one of the parties suddenly makes a voluntary submission which addresses the exact points and concerns raised in the arbitral tribunal’s deliberations, it may be logical to deduce that one of the members of the arbitral tribunal is a ‘leaking arbitrator’ helping one of the parties to frame its case.291 Disclosing confidential deliberations prior to the final award could also help the losing party to cut its losses and ‘to establish an effective settlement strategy’.292

287

Caron (n 286) 384; Nathalie Allen Prince, William Hooker and David Turner, ‘How Can Arbitrators Best Protect Their Deliberations from Disclosure: New Challenges and Opportunities in England’ (2019) 36(2) Journal of International Arbitration 260; LCIA Arbitration Rules 2020, art 30(2) states ‘…[t]he deliberations of the Arbitral Tribunal shall remain confidential to its members…’; the Swiss Rules of International Arbitration of the Swiss Arbitration Centre, effective 1 June 2021 accessed 23 September 2021, (the Swiss Arbitration Rules 2021), art 44(2) states ‘[t]he deliberations of the arbitral tribunal are confidential,’ IBA Rules of Ethics for International Arbitrators (1987) (the IBA Rules of Ethics for International Arbitrators), art 9 states ‘The deliberations of the arbitral tribunal, and the contents of the award itself, remain confidential in perpetuity unless the parties release the arbitrators from this obligation. An arbitrator should not participate in, or give any information for the purpose of assistance in, any proceedings to consider the award unless, exceptionally, he considers it his duty to disclose any material misconduct or fraud on the part of his fellow arbitrators’. 288 Goldstein (n 283) 592–593: ‘There is no mention of the deliberations confidentiality in the United Nations Conference on International Trade Law (UNCITRAL) Model Law, or in the arbitration laws of Switzerland, Singapore, Hong Kong, Sweden, the United Kingdom, the United States, or Germany. France seems to be the exception, as it provides in Article 1479 of the New Code of Civil Procedure’; Gaillard and Savage (n 189) 750. 289 Goldstein (n 283) 593–594: ‘there is no specific mention of deliberations confidentiality in the UNCITRAL Rules, or in the arbitration rules of (to mention only a few notables) the International Centre for Dispute Resolution (ICDR), ICC, Stockholm Chamber of Commerce, World Intellectual Property Organization, China International Economic and Trade Arbitration Commission (CIETAC), American Arbitration Association (AAA) (Commercial), CPR Institute for Conflict Prevention and Resolution (CPR) (Administered), German Institution for Arbitration (DIS), or Singapore International Arbitration Centre’. However, a few arbitration rules do provide that the deliberations of the arbitral tribunal are confidential. For example, LCIA Arbitration Rules 2020, art 30.2 states ‘…[t]he deliberations of the Arbitral Tribunal shall remain confidential to its members and if appropriate any tribunal secretary, save as required by any applicable law and to the extent that disclosure of an arbitrator’s refusal to participate in the arbitration is required of the other members of the Arbitral Tribunal under Articles 10, 12, 26.6 and 27.5’. 290 Caron (n 286) 383; ‘Decision of the Appointing Authority, Judge W E Haak, on the Challenges of Judge Krzysztof Skubiszewski and Judge Hamid Reza Oloumi Yazdi’ (2 April 2008) 15. 291 Capper (n 281) 51–52. 292 Melanie van Leeuwen, ‘Pride and Prejudice in the Debate on Arbitrator Independence’ in Christoph Müller and Antonio Rigozzi (eds), New Developments in International Commercial Arbitration (Schulthess Juristische Medien AG 2013) 21.

108

3 The Nature of Guerrilla Tactics in International Arbitration

The other party may be unaware of any leak, and hence not in any position to challenge the arbitrator.293 The other arbitrators may have suspicions, but are unlikely to have any real proof of collusion. However, ‘[i]n the meantime, the secrecy of the deliberations has been violated and, as a result, the foundation of the collegial decision-making process has been violated’.294 ‘When arbitrators are unsure of the impartiality of their colleagues, each of them refrains from discussing the merits of the case before it is absolutely necessary in order to make a final decision’.295

Resignation Sometimes resignation of an arbitrator is used as a disruptive tactic, either on a compromised arbitrator’s own initiative or upon the instructions of the party that appointed that arbitrator.296 Any reason other than exceptional circumstances or reasonable grounds such as illness,297 incapacity or conflict of interest would be illegitimate grounds for resignation.298 If the arbitrator resigns at an early stage of the proceedings, that arbitrator is generally removed and replaced without any major delay or loss to the parties, although there may still be cost consequences.299 If it happens at a late stage (for example, during the hearing, during the tribunal’s deliberations or at the time of signing the award), the resigning arbitrator is presumably hoping that the arbitration comes to a halt until a new arbitrator is found and appointed.300 The new arbitrator will have to read the file and become familiar with the case and the parties might then need to repeat their submissions, which could

293

Leeuwen (n 292) 21–22. Leeuwen (n 292) 22. 295 Derains (n 286) 916; Goldstein (n 283) 597–598. 296 Jean-François Poudret and Sébastien Besson, Comparative Law of International Arbitration (2nd edn, Sweet & Maxwell 2007) 364; Paulsson Jan Paulsson and Georgios Petrochilos, UNCITRAL Arbitration (Kluwer Law International 2018) 22. 297 Levine (n 3) 292: For example, in Vanessa Ventures Ltd v Venezuela, ICSID Case No ARB(AF)/04/6, Award, [20], [30] (16 January 2013), ‘the presiding arbitrator resigned due to bad health five months before a scheduled hearing, with the replacement processes leading to cancellation of the hearing’. 298 For example, English Arbitration Act 1996, s 25(3) states: ‘An arbitrator who resigns his appointment may (upon notice to the parties) apply to the court - (a)to grant him relief from any liability thereby incurred by him, and (b) to make such order as it thinks fit with respect to his entitlement (if any) to fees or expenses or the repayment of any fees or expenses already paid’. section 25(4) further states that ‘If the court is satisfied that in all the circumstances it was reasonable for the arbitrator to resign, it may grant such relief as is mentioned in subsection (3)(a) on such terms as it thinks fit’. 299 David Caron and Lee Caplan, The UNCITRAL Arbitration Rules: A Commentary (2nd ed, Oxford University Press 2013) 290. 300 Yves Derains and Eric A Schwartz, A Guide to the ICC Rules of Arbitration (2nd edn, Kluwer Law International 2005) 193. 294

Arbitrator Guerrilla Tactics: Corruption and Coercion …

109

altogether cause considerable delay and increased expense.301 The affected party could sue the resigning arbitrator for costs arising from the breach of its contract to discharge its duty.302 On the other hand, the party could in theory apply to the court for specific performance, but in practice this is unrealistic as it will be unfeasible or even impermissible to try and force the resigning arbitrator to reconsider and fulfil his or her mission.303 If the arbitrator indeed steps down at an advanced stage, depending on the applicable arbitration law and procedural rules, ‘the remaining arbitrators may be entitled to proceed as a truncated tribunal’.304 It may be both cost-effective and time-saving for the truncated tribunal to continue with the arbitration and render an award which arguably ‘has a deterring effect on any party wishing to frustrate the proceedings’.305 However, the validity of a truncated arbitral tribunal’s award may be subsequently challenged,306 on the grounds that inter alia the composition of the arbitral tribunal was not in accordance with the parties’ agreement to arbitrate if it stipulates that the tribunal is to comprise three arbitrators and/or perhaps there is unequal treatment and representation as one party-appointed arbitrator was absent.

Conclusion Guerrilla tactics identified in this chapter ‘present different levels of reprehensibility’.307 Although such tactics may involve witnesses and arbitrators, for the most part this is where their independence and impartiality is compromised by a party to the arbitration. Some guerrilla tactics involve illegal acts and some are deliberate misbehaviour, but much friction is simply caused by the different cultures, expectations, approaches and assumptions of the participants. Control over guerrilla tactics is primarily in the hands of the tribunal, though institutions and national courts may also play a part, and arbitrators have various powers deriving from law, institutional rules and best practice guidelines or ‘soft law’ which can assist them. However, we have seen that guerrilla tactics often involve the exercise of a legitimate right in an oppressive or disruptive manner, and so control will have to be balanced by the need to give effect to due process. Friction caused by guerrilla tactics tends to escalate if parties retaliate to what they see as unfair behaviour. In a worst case scenario, if all parties employed multiple 301

Stephen M Schwebel, Justice in International Law: Further Selected Writings of Stephen M Schwebel (Cambridge University Press 2011) 200. 302 Caron and Caplan (n 299) 288. 303 Poudret and Besson (n 296) 363. 304 Judith Levine, ‘Late-in-the-Day Arbitrator Challenges and Resignations: Anecdotes and Antidotes’ in Chiara Giorgetti (ed), Challenges and Recusals of Judges and Arbitrators in International Courts and Tribunals (Koninklijke Brill NV 2015) 290. 305 Emilia Onyema, ‘Power Shift in International Commercial Arbitration Proceedings’ 9 . 306 Schwebel (n 301) 182–205. 307 Sussman and Ebere (n 25) 615.

110

3 The Nature of Guerrilla Tactics in International Arbitration

tactics concurrently and consecutively, considerable disruption, delay and cost would eventuate. Deliberate guerrilla tactics may be addressed by ensuring adequate powers are available to minimise disruption while maintaining the integrity and fairness of the process. Institutions are generally quick to respond to a perceived need for particular powers and mechanisms to be included in their rules. Friction stemming from different cultures and expectations may also be affected by applying such powers, but it is arguable that it is better to cut off such friction at its source, by harmonisation of procedures and standards as much as possible. Even where harmonisation has not or cannot be achieved, bodies comprising experienced practising members of the international arbitration community have privately developed non-mandatory guidelines and standards in soft law instruments. Such guidelines and standards have had their critics, but on the whole they have been invaluable, and are referred to extensively and regularly applied by tribunals and even by courts. At the very least, friction can be addressed by ensuring professional participants in international arbitration do not have a narrow view based on practice in their own jurisdiction, but are conversant with the main ways in which expectations and methods may differ in the international context.

References Primary Sources Arbitral Awards Apotex Holdings Inc. and Apotex Inc. v USA (ICSID Case No. ARB(AF)/12/1) (NAFTA) (Award, 25 August 2014) BSG Resources Limited, BSG Resources (Guinea) Limited and BSG Resources (Guinea) SARL v Republic of Guinea (ICSID Case No. ARB/14/22), Decision of 28 December 2016 ‘Decision of the Appointing Authority, Judge W E Haak, on the Challenges of Judge Krzysztof Skubiszewski and Judge Hamid Reza Oloumi Yazdi’ (2 April 2008) Decision of the Appointing Authority, Sir Robert Jennings, on the Challenge of Judge Bengt Broms (7 May 2000) Hrvatska Elektroprivreda d.d. v Republic of Slovenia, (ICSID Case No. ARB/05/24), Decision of 6 May 2008 Malaysian Historical Salvors, SDN, BHD v Malaysia (ICSID Case No. ARB/05/10), Claimant Malaysian Historical Salvors Sdn Bhd’s Memorial on Jurisdiction Arbitration Laws and Related Sources English Arbitration Act 1996 < http://www.legislation.gov.uk/ukpga/1996/23/contents> accessed 30 May 2020 German Arbitration Act, Tenth Book of the German Code of Civil Procedure (Zivilprozessordnung) (ZPO) < https://sccinstitute.com/media/29988/german-arbitration-act.pdf > accessed 30 May 2020 International Arbitration Act of Singapore (Chapter 143A), effective from 01 Aug 2016 to 20 Nov 2019 accessed 31 May 2020

References

111

UNCITRAL Model Law on International Commercial Arbitration, 1985, as amended in 2006 accessed 31 May 2020

Arbitration Rules Arbitration Rules of the Belgian Centre for Arbitration and Mediation (CEPANI), in force as from 1 Jan 2020. https://www.cepani.be/wp-content/uploads/2020/04/RULES-ENG-2020.pdf. Accessed 17 May 2020 Arbitration Rules of the Singapore International Arbitration Centre (SIAC) (6th edn), in force as from 1 August 2016