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Arias Fábrega & FábregaDillon EustaceErdem & ErdemMarval O’Farrell & MairalNiederer Kraft & FreyRajah & TannUdo Udoma & Belo-OsagieVerus Advocates

Featuring contributions from

Dispute ResolutionGuide 2016

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INTRODUCTION

IFLR | DISPUTE RESOLUTION 2016 1

D ispute resolution continues to evolve. As the slowdown among emerging jurisdictionsrumbles on, contracting parties are finding themselves in new and unlikely situations,with counterparties often unfamiliar with developed norms.

Local laws and systems trip up parties and court systems can be impossible to navigate. Dis-putes are often becoming more complex, too: in 2016, while US volumes have decreased, high-rate work has grown.

Speaking of growth, class actions are set to soar, both in the US but also increasingly in theUK. Litigation funding is playing a key role in this, increasing the number of potentialclaimants in interest rate benchmark cases, from individuals to large corporations and highlysophisticated asset managers. Banks could be the source of legal claims linked to a huge rangeof areas, including mortgages, structured credit products, corporate loans and interest rate de-rivatives.

Law firms are being challenged too though. Litigation rosters are under scrutiny on bothsides of the Atlantic, with even entrenched firms being cut from some. Russian sanctions con-tinue to bite, and have also created more complex disputes.

Hong Kong appears to be the beneficiary, enjoying a unique set of advantageous featuresgoing well beyond its British-based common law legal system.

All these factors make the publication of IFLR’s Dispute Resolution Guide particularlytimely. The Guide provides in-depth analysis of the most pressing dispute resolution issues indifferent countries around the world.

We have an interview with Alexis Mourre, president of the ICC’s International Court ofArbitration. Mourre shares his views on everything from financial disputes, spreading the rep-utation of arbitration and the growing furore over investor-state arbitration.

The IBA’s Anne Véronique Schlaepfer, co-chair of the body’s arbitration committee featurestoo. Schlaepfer explains why the organisation is targeting Africa, and how perceptions towardsarbitration – and arbitrators – can change over time.

Readers will also enjoy an interview with Teresa Cheng, chairperson of the Hong Kong In-ternational Arbitration Centre. Cheng discusses Asia’s growing popularity as a dispute resolutionhub and considers the challenges facing female arbitrators in 2016.

And of course we have jurisdictional insights from leading firms in Argentina, India, Ireland,Myanmar, Nigeria, Panama, Switzerland and Turkey.

We hope you enjoy the guide and it serves as a resource you turn to often.

Tom YoungIFLR

Settling scores

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CONTENTS

IFLR | DISPUTE RESOLUTION 2016 3

ContentsIBA

New frontiers

4

ICC Court Of Arbitration

A brave newworld

Country reports

ARGENTINAStrategies for success 11Ricardo Ostrower and Martín VainsteinMarval O’Farrell & Mairal

INDIAReciprocal relationships 13Krishnayan Sen and Ankit JainVerus Advocates

IRELANDA new rulebook 18John O’RiordanDillon Eustace

MYANMARThe alternatives 22Jainil Bhandari and U Min TheinRajah & Tann

NIGERIAThe shadow of uncertainty 27Uzoma Azikiwe and Festus OnyiaUdo Udoma & Belo-Osagie

PANAMACreditors’ new handbook 31Claudio De CastroArias Fábrega & Fábrega

SWITZERLANDIdentity crisis 34Daniel Eisele and Tamir LivschitzNiederer Kraft & Frey

TURKEYA three-stage review 37Piraye Erdem and Suleyman SevincErdem & Erdem

Expert analysis

6Hong Kong International Arbitration Centre

Looking east

8

SWITZERLAND

IFLR | DISPUTE RESOLUTION 201634

T he association of underwriters known as Lloyd’s or Lloyd’s of Lon-don has been admitted to the insurance business in Switzerlandsince 1947. Since 1994, Lloyd’s of London has had a branch in

Switzerland. From a Swiss regulatory perspective, Lloyd’s of London istreated as equivalent to an actual insurance company. It is represented byits general representative in Switzerland. However, Lloyd’s of London is notan insurance company. It does not underwrite insurance or issue policies ofinsurance. Rather, Lloyd’s of London is an insurance market located in Lon-don where members who are also referred to as names or underwriters selland buy insurance risks. The underwriters form groups called syndicatesthat may or may not be incorporated entities.

Syndicates – whether incorporated or not – can sometimes be composedof hundreds or even thousands of underwriters and are managed by so-calledmanaging agents. Managing agents appoint the active underwriters, whoare individuals with principal authority to accept insurance and reinsurancerisk on behalf of the members of a syndicate. The active underwriters sub-scribe to a slip on behalf of their underwriters for a percentage of the risk.As a result, the insurance contract is entered into between the policyholderand each individual underwriter, not the syndicate or the active underwriter.

It is the underwriters that are the risk carriers under the insurance. However,typically the underwriters are not identified in the insurance policy. Thepolicyholder and/or the beneficiaries under the insurance policy will there-fore have no information on the identity of the underwriters.

Being among the most prominent of insurances worldwide, coverage dis-putes related to Lloyd’s insurances arise on a regular basis. It comes as nosurprise that not every coverage dispute can be resolved amicably. If an am-icable solution cannot be found, a party having subscribed to a Swiss Lloyd’sinsurance policy (a policy governed by Swiss law, prorogating a forum inSwitzerland) may face procedural obstacles should it want to commencelegal action against Lloyd’s insurers.

Who are the risk carriersGenerally, a statement of claim must identify the claimant and thedefendant. This comes as no surprise and is an express requirement underthe Swiss Civil Procedural Code. Hence, if a policyholder and/or abeneficiary under an insurance policy want to commence legal proceedingsin connection with a Lloyd’s insurance policy before a Swiss court, they willneed to identify the rightful defendant in a first step. While normally thisshould not create any major problem and certainly no true obstacle for aparty that wishes to commence legal action against its contractualcounterparty, in the case of claims under a Lloyd’s insurance policy thesituation is different. The multiparty structure of Lloyd’s insurers may raiseserious problems when attempting to identify and designate the parties tothe legal proceedings.

Lloyd’s insurers are not a contracting party to the insurance policy andconsequently not contractually liable for the remittance of any payments

Identity crisis

Daniel Eisele and Tamir Livschitz of Niederer Kraft & Frey examine the procedural obstaclesto commencing a lawsuit against Lloyd’s

“Lloyd’s of London is treated as equivalent to an insurancecompany

SWITZERLAND

IFLR | DISPUTE RESOLUTION 2016 35

under the insurance policy. Rather, the policyholder and the risk carriers(the underwriters who have subscribed to the Lloyd’s insurance policy) arethe contracting parties. Notably, it is also not the syndicates that can be seenas contractual counterparty to a policyholder under a Lloyd’s insurers, if theunderwriters to the policy choose to organise themselves in such a form (thisgenerally being the case).

It is therefore also of little interest from a Swiss procedural law perspectivewhether or not the syndicates are incorporated entities. In case the syndicatesare not incorporated, Swiss law does not recognise them per se as entitieswith independent legal personality. Such entities have no standing and there-fore cannot be sued as a separate party to legal proceedings. But if the syn-dicates are incorporated entities, and would therefore in principle beregarded as entities with a separate legal personality from a Swiss procedurallaw perspective, they are not the risk carriers under the insurance. Therefore,they do not qualify as the counterparty of the policyholder under the Lloyd’sinsurance policy. The risk carriers under the insurance policy remain theunderwriters.

As a result, and applying the general rules of Swiss procedural law, poli-cyholders and insured persons that wish to take legal action against Lloyd’swould need to do so by commencing legal action against the subscribingunderwriters. This in turn could prove difficult because, as a rule, the pol-icyholders as well as the insured persons do not know the identity of theunderwriters subscribing to the Lloyd’s insurance policy. One of the pecu-liarities of Lloyd’s insurance policies is that they typically do not list the sub-scribing underwriters. It may therefore prove difficult for an ordinaryplaintiff to identify the risk carriers, which would need to be listed as de-fendants in a legal action against Lloyd’s insurers.

An exacerbating factor is that a Lloyd’s insurance policy may be sub-scribed by hundreds of underwriters. In a case the authors are presently in-volved in, one of many syndicates subscribing the insurance policy iscomposed of 1,122 underwriters, which given the peculiarities of the par-ticular case the plaintiffs were in a position to identify. Normally, however,this may be a difficult task and will – at the least – require the investmentof significant effort and moneys in terms of lawyers’ fees and so on.

Procedural facilitation for claims against Lloyd’s insurersIn light of the above, one would think with good reason that it would beunreasonable to request policyholders and beneficiaries under a Lloyd’sinsurance policy to identify all underwriters subscribing to the particularinsurance policy. For this reason the Swiss courts have until recently in legalactions brought against Lloyd’s insurers, rather than insisting on the listingof the risk carriers under the Lloyd’s insurance as defendants, accepted amere reference to ‘Lloyd’s Underwriters, London (subscribing to Policy No.xxx)’, represented by the general representative in Switzerland’ as anadequate designation of the defendant.

This procedural facilitation granted by Swiss courts generally enabledpolicyholders or beneficiaries under a Lloyd’s insurance policy to commencelegal action against Lloyd’s insurers with relative ease, or at least without theneed to overcome a massive obstacle artificially imposed by Swiss procedurallaw. In line with this court practice, Lloyd’s insurers have agreed to not con-test the aforementioned party designation as inadequate or improper underSwiss procedural law aspects. Hence, until recently a policyholder or bene-ficiary under a Lloyd’s insurance policy acting as a plaintiff was – in devia-tion from the requirements under the Swiss Code of Civil Procedure – notrequired to identify the true contractual counterparties under the insurance

policy to properly designate the defendants in the legal action brought.However, a recent decision rendered by the Swiss Federal Tribunal concern-ing the inverse situation, where Lloyd’s insurers were acting as plaintiffs,raised serious questions as to whether the aforementioned court practicestill applies.

The Swiss Federal Tribunal In a decision dated December 9 2015, the Swiss Federal Tribunal heard acase brought by Lloyd’s insurers (jointly with another insurance company)against a Swiss company before the commercial court of the canton ofZurich. Since the relevant insurance policy had on the end of Lloyd’sinsurers been underwritten by more than 2,000 underwriters, Lloyd’sinsurers refrained from separately listing each underwriters of the particularinsurance policy in question. Instead, it commenced the legal action bybringing the claim as ‘Lloyd’s Underwriters, London (subscribing to PolicyNo. xxx)’, apparently in reliance on the aforementioned court practiceadopted for the benefit of beneficiaries under a Lloyd’s insurance policywhen acting as plaintiffs against Lloyd’s insurers.

The defendant opposed the action brought by Lloyd’s insurers on thegrounds that the latter had failed to properly designate the parties (the plain-tiffs in the action). The commercial court of the canton of Zurich upheldthe objection and refused to consider the case. It concluded that ‘Lloyd’sUnderwriters, London (subscribing to Policy No. xxx)’ was an insufficientdesignation of the party in cases where Lloyd’s insurers acted as plaintiffs.Lloyd’s insurers appealed the decision to the Swiss Federal Tribunal. Thelatter affirmed the decision of the commercial court of the canton of Zurichholding that ‘Lloyd’s Underwriters, London (subscribing to Policy No. xxx)’was an insufficient designation of the party taking legal action.

Since the decision of the Swiss Federal Tribunal concerned a case whereLloyd’s insurers acted as plaintiffs, one should think that the decision wouldnot put the aforementioned court practice in doubt, ie the procedural facil-itation for beneficiaries under a Lloyd’s insurance policy when commencinglegal action against Lloyd’s insurers (as defendants). This would certainlyhold true had the Swiss Federal Tribunal in its decision – in contrast to thedecision of the commercial court of Zurich it reviewed on appeal – notomitted to clearly distinguish between cases in which Lloyd’s insurers act asplaintiffs and cases in which they act as defendants. Rather, the Swiss FederalTribunal in its decision observed in a general manner that pursuant to Swisslaw ‘Lloyd’s Underwriters, London (subscribing to Policy No. xxx)’ was aninsufficient designation of a party in a legal action. Without interpretingthe language used by the Swiss Federal Tribunal in its decision, one mustconclude that the designation of Lloyd’s insurers in a legal action by refer-ence to ‘Lloyd’s Underwriters, London (subscribing to Policy No. xxx)’might not be a sufficient party designation, regardless of whether Lloyd’sinsurers act as plaintiffs or defendants.

In consequence, a legal action taken against Lloyd’s insurers would inline with the general requirements of Swiss procedural law, need to identifythe risk carriers being the counterparties under the insurance policy – theunderwriters. This would apply regardless of whether the action was broughtagainst Lloyd’s insurers (as defendants) or by Lloyd’s insurers (as plaintiffs).This in turn could prove to be a difficult obstacle to overcome for a plaintiff,attempting to commence legal action against Lloyd’s insurers. This is par-ticularly true if the Lloyd’s insurance policy in question was underwrittenby hundreds, if not thousands of underwriters.

Considering the regulatory ramifications applicable to foreign insurersoffering insurance products in Switzerland, pursuant to which it must bepossible to take legal action in Switzerland against such foreign insurers, itis hoped that the facilitation given under the previous court practice to ben-eficiaries under a Lloyd’s insurance policy when taking action against Lloyd’sinsurers will be re-confirmed. It would certainly be in the interest of legalcertainty if the Swiss Federal Tribunal clarified and limited its recent decisionto situations where Lloyd’s insurers act as plaintiffs, since in such circum-stances a procedural facilitation does not seem warranted. But until this is

“Typically the underwriters arenot identified in the insurancepolicy

SWITZERLAND

IFLR | DISPUTE RESOLUTION 201636

the case, a party contemplating the commencement of legal action inSwitzerland against Lloyd’s insurers under a Lloyd’s insurance policy willneed to either accept the risk of suing the wrong party when identifyingLloyd’s insurers merely by reference to ‘Lloyd’s Underwriters, London(subscribing to Policy No. xxx)’, or to invest substantial efforts and moneyin an attempt to identify the ultimate risk carriers having underwritten theparticular Lloyd’s insurance policy in question.

About the authorDaniel Eisele specialises in large and complex litigation and arbitrationproceedings, commercial contracts and international businesstransactions in a variety of industries, particularly in connection withtrade and commerce, finance and banking and sports.

He has represented clients in more than 200 arbitration, court andother proceedings in various countries, mainly in connection withcommercial contracts (for example: purchase, deliveries, production,licensing, construction, M&A, finance, security, marketing, television,and agency) and other disputes. He has almost 20 years of professionalexperience. He regularly advises Swiss and foreign companies as well asindividuals in relation to major business projects, in particular inconnection with all types of agreements. He is experienced in draftingand negotiating legal documents.

He has special legal knowledge of the sports industry. He has beeninvolved in many major international sports events taking place over aperiod of more than 25 years, namely in relation to television, othermedia, marketing, sponsorship, licensing, ticketing, hospitality andevent organisation.

He won the ILO Client Choice Awards for ‘Litigation Switzerland’three times in a row, in 2014, 2015 and 2016. Legal 500 lists him as a‘leading individual’ in the area of litigation Switzerland.

Daniel EiselePartnerNiederer Kraft & Frey

T: +41 58 800 8366 (direct dial) E: daniel.eisele@nkf.chW: www.nkf.ch

About the authorTamir Livschitz has extensive experience in different fields of disputeresolution, with a particular focus on cross-border litigation andinternational arbitration. He is particularly experienced in banking,post-M&A, commodities and sports disputes.

He also acts as an arbitrator and represents clients in complex ad hocproceedings and arbitration proceedings conducted under variousinstitutional rules. He often speaks at dispute resolution events inSwitzerland and abroad. In addition he is engaged in corporate,commercial and employment law advice, with a particular emphasis onsports law where he advises clients in connection with media, marketingand licensing agreements, as well as on the staging of sports events

He became a partner at Niederer Kraft & Frey in 2016. Livschitz isfluent in seven languages. Chambers Global and Chambers Europe listhim as a leading individual in the area of arbitration in Switzerland.

Tamir LivschitzPartnerNiederer Kraft & Frey

T: +41 58 800 8000 E: tamir.livschitz@nkf.chW: www.nkf.ch

“Typically the underwriters arenot identified in the insurancepolicy