A N O - N O N S E N S E T A L K

B Y

S O P H I E N A P P E R T

Is Arbitration Still Relevant?

Litigation

2!

�  The image ¡  Expensive ¡  Lengthy ¡  Public

�  The real world ¡  Coercive powers ¡  Injunctive relief ¡  Role of ADR

Arbitration

3!

�  The image ¡  Quick ¡  Cheap ¡  Confidential

�  The real world ¡  Consensual ¡  Private, but not necessarily

confidential ¡  Party control over

appointment of arbitrators ¡  No coercive/injunctive powers ¡  Flexible procedure, but

beware multi-party ¡  Easy enforceability of award

(New York Convention)

Arbitration (2)

4!

�  Institutional rules or ad hoc? �  Institutional = administered = fee

Leading Institutions!

!The West!• International Chamber of Commerce (ICC)!• The London Court of International !Arbitration (LCIA)!• International Centre for Dispute Resolution!(ICDR)!• Stockholm Chamber of Commerce!• Swiss Rules of International Arbitration!!

The Middle East!• Dubai International!Arbitration Centre (DIAC)!• Cairo Arbitration Centre!• Arab Centre for !Commercial Arbitration!• ICC National Committees!

Others!• Permanent Court of Arbitration!• The International Centre for the Settlement of Investment Disputes (ICSID)!

Arbitration (3)

5!

�  Ad hoc ¡  Bespoke rules ¡  UNCITRAL Arbitration Rules ¡  Arbitration Act 1996 ¡  No fee, but no administrative body

Expert Determination

6!

�  Useful for technical disputes on discrete issues

�  Can save time and costs �  Can preserve contractual

relationship �  Careful drafting of the

clause

Beware! �  Limited ability to challenge

÷  Expert answered wrong question ÷  “Manifest error” is interpreted very

restrictively ÷  Fraud

�  Cannot challenge for error of fact or law

�  No due process �  “The third way”

ADR

7!

�  Means to assist settlement

�  Party control �  Flexible process �  Room for constructive

solutions �  Confidential �  Part of tiered dispute

resolution system

Beware! �  Willingness of the

parties to submit to the process

�  Not suitable for certain kinds of disputes

�  Impose deadlines

Checklist for clauses

8!

�  How short can a clause be? �  Which arbitration rules? �  One or three arbitrators?

¡  How many “sides”? �  Web of agreements – consider consolidation �  Place and language of arbitration

Drafting a clause

9!

�  Consider tiered clauses ¡  Negotiation or ADR as a preliminary step ¡  Provide a time frame

�  Beware too many/unnecessary tiers, which may lead to waste of time/costs

�  Expert determination ¡  Circumscribe the dispute carefully

Spot the defect (1)

10!

This JVA shall be governed by and interpreted in accordance with the laws of Turkey, excluding its conflict of laws rules. Any dispute, controversy or claim arising out of or relating to this JVA, or the breach, termination or invalidity thereof, which cannot be settled amicably between the parties, shall be finally settled by arbitration in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce (“ICC”) by three (3) arbitrators selected from the ICC list of arbitrators.

Spot the defect (2)

11!

The three (3) arbitrators shall be nominated a follows: The claimant (in the first instance) shall nominate one (1) arbitrator and the respondent (in the first instance) shall nominate the second arbitrator, and the third arbitrator shall be nominated jointly by the two (2) arbitrators so nominated. If either Party fails to nominate its arbitrator or the two arbitrators of the arbitral tribunal fail to nominate the third arbitrator then the missing arbitrator shall be appointed under the ICC rules. The award shall be final, binding and enforceable by any court having jurisdiction for that purpose. The arbitration shall be conducted in the English language in Geneva. The arbitrators shall not have the power to amend or add to the provisions of the JVA.

Arbitration as a business tool

6/12/14 12

�  Choice of ¡  Rules ¡  Forum ¡  Arbitrators

�  Enforceable awards

Arbitration as a business tool

6/12/14 13

�  EARLY consideration of ¡  Drafting of the arbitration agreement ¡  Choice of forum ¡  Choice of arbitrators

Business Tool No 1: The Arbitration Agreement

6/12/14 14

�  Before you write anything down, consider ¡  Type of contract ¡  How many parties ¡  How many sides ¡  Inter-related agreements

Business Tool No 1: The Arbitration Agreement

6/12/14 15

�  Limits to the arbitration process ¡  No coercive powers

÷ Need support of the courts ¡  Multiple contracts or parties to be catered

for specially ¡  NOT inexpensive or quick ¡  Limited confidentiality

Business Tool No 1: The Arbitration Agreement

6/12/14 16

�  Institutional or ad hoc �  The language of arbitration �  The procedure

¡  A multi-step dispute resolution process ¡  Assistance from State courts during the

arbitration process �  Confidentiality clause

Business Tool No 2: Choosing the Forum

6/12/14 17

�  A Neutral Forum �  A legal system based on the rule of

law �  State Courts supportive of

arbitration �  State a party to the New York

Convention

Business Tool No 3: Choosing the Arbitrators

6/12/14 18

�  A crucial step within the parties’ control

�  Independance and impartiality �  Technical or industry knowledge or

experience ¡  The Energy Arbitrators’ List

�  Role of the party-appointed arbitrator

Business Tool No 4: A Binding and Enforceable

Award

6/12/14 19

�  The 1958 New York Convention ¡  Award recognised and enforced without

examination of the merits of the dispute ¡  Breadth of recognition that is not available

to foreign judgments

Achilles’ Heels

�  Reaching Third Parties �  Piercing the Corporate Veil

¡  “Single economic entity” �  Interim relief �  Compelling enforcement

Arbitrating against a State party

6/12/14 21

�  Special considerations apply ¡  Choice of law ¡  Publicity ¡  Enforcement

Conclusions

6/12/14 22

�  Dispute resolution should be part of your business strategy

�  Time and cost saving measures can be factored into your dispute resolution clause

�  Take early advice

Thank You

�  Sophie Nappert

�  T +44 20 7831 8441 �  E snappert@3vb.com