Improvements and Innovations in International Arbitration

322 Pages·2017·12.9 MB·English

2015 International Arbitration Survey:
Improvements and Innovations in International Arbitration
The dynamic and party-driven nature of international
arbitration allows for dispute resolution processes
that its users can tailor to their ever-changing needs.
Stakeholders have proven remarkably innovative and,
perhaps consequently, the system of international
arbitration is constantly evolving. Collective feedback
on these innovations is as indispensable as it is rare.
The 2015 International Arbitration Survey aims to fill
this gap by reviewing the perceived effectiveness of
past innovations and testing the viability of selected
future developments.
Introduction
Paul Friedland Professor Loukas Mistelis
Head of International Arbitration Practice Group, White & Case LLP Director, School of International Arbitration, Centre for Commercial Law Studies
The world of international arbitration does White & Case is proud once again to sponsor It is my great pleasure to introduce the 2015 the perceived effectiveness of innovations to
not stand still. Marked by flexibility and party this survey. The School of International International Arbitration Survey on Improvements address time and cost issues; and ways in which
autonomy, international arbitration is a dynamic Arbitration has produced a first-class study and Innovations in International Arbitration. This different actors and entities can contribute to
field of law which is constantly developing to of what has evolved, what has remained is the sixth survey undertaken by the School of improvements in this field.
meet the needs of its users. Keeping track of its constant, and what changes users believe will International Arbitration, Centre for Commercial
At times, the survey’s collected feedback
ever-evolving trends is a challenge. improve the system. I am confident that this Law Studies, Queen Mary University of London,
challenged our own expectations, signalling a
survey will be welcomed by the international and the third one conducted with the generous
The 2015 International Arbitration Survey, transition from anecdotal to empirical knowledge.
arbitration community as a highly valuable support of White & Case LLP.
entitled ‘Improvements and Innovations in It appears from the results that some of the
empirical contribution.
International Arbitration,’ has sought to discover 2015 marks the 30th anniversary of the School of most hotly debated topics in arbitration do not
these trends and to identify what users of We thank Professor Loukas Mistelis and International Arbitration, and the tenth anniversary necessarily represent the most divergent views.
international arbitration want from the process. Mr Rutger Metsch (White & Case Research of the commencement of our engagement with Respondents, for example, do not generally
This edition saw the widest pool of respondents Fellow) for their exceptional work in producing empirical international arbitration surveys. We consider arbitration ‘overregulated’, and a majority
complete the survey, with 763 questionnaire this publication, and to all those who have seized this opportunity to reflect on the even expressed a need for further regulation of
responses received and 105 interviews contributed their time and knowledge to this evolution of international arbitration by revisiting specific actors. This is perhaps an indication that
conducted. Views were sought not only important study. topics from previous surveys and by considering the arbitral community is apprehensive of further
from in-house counsel, private practitioners respondents’ desired future developments extensive ‘macro-regulation’ but would welcome
and arbitrators, but also from academics, in arbitration. limited corrective ‘micro-regulation’.
experts, institutional staff and third-party
Any form of stimulated change can be considered I hope and expect that you will find the survey’s
funders, thereby providing a diverse pool of
an ‘innovation’; however, positive feedback is findings of interest to you and your practice
knowledgeable respondents. The survey breaks
essential for that innovation to be seen as an and that they will provide the basis of fruitful
down many of the results by role, providing rare
‘improvement’. This survey provides invaluable discussions and further innovations and
insight into the varying views of the different
insight into stakeholders’ perceptions of such improvements.
stakeholders of international arbitration.
developments in international arbitration. We
sought to explore views on topics such as
arbitration’s best and worst characteristics;
2015 International Arbitration Survey: Improvements and Innovations in International Arbitration

Contents
Executive Summary 2 Appendices 50
The Study 4 Methodology 51
1 International Arbitration: the ‘State of Play’ 5 School of International Arbitration, Queen Mary, University of London 54
2 The Evolution of Seats and Institutions 11 White & Case International Arbitration Group 55
3 Reducing Time and Cost 24 White & Case International Arbitration Partners 56
4 Soft Law and Guidelines 33 Acknowledgements 58
5 Role and Regulation of Specific Actors 37
2015 International Arbitration Survey: Improvements and Innovations in International Arbitration 1
Executive Summary
International arbitration is constantly The key findings from the survey are: Preferred and improved seats Preferred and
evolving in response to the changing improved institutions
Views on international ■■ The five most preferred and widely used
needs of its users. Its adaptability and
seats are London, Paris, Hong Kong,
party-driven nature allow for a system arbitration ■■ The five most preferred arbitral institutions
Singapore and Geneva.
are the ICC, LCIA, HKIAC, SIAC and SCC.
and processes that can be tailored as
■■ 90% of respondents indicate that
required. Stakeholders at all levels have international arbitration is their preferred ■■ The primary factor driving the selection of ■■ Respondents’ preferences for certain
a seat is its reputation and recognition.
proven ambitious in their aspirations to dispute resolution mechanism, either as a institutions are predominantly based
improve international arbitration further. stand-alone method (56%) or together with ■■ Respondents’ preferences for certain seats on an assessment of the quality of
For an innovation to be considered an other forms of ADR (34%).1 are predominantly based on their appraisal their administration and their level of
improvement, however, a comprehensive of the seat’s established formal legal ‘internationalism’. Institution-specific
evaluation of its effectiveness is required. ■■ “Enforceability of awards” is seen as infrastructure: the neutrality and impartiality distinguishing features are considered
arbitration’s most valuable characteristic,
Collective feedback mechanisms, of the legal system; the national arbitration to be less important.
followed by “avoiding specific legal
law; and its track record for enforcing
which are essential stimulants to systems,” “flexibility” and “selection ■■ An institution’s reputation and recognition
agreements to arbitrate and arbitral awards.
material improvements, are rare in a of arbitrators”. is essential to its commercial appeal.
field of law where confidentiality is ■■ Respondents expressed the view that the Respondents will select an institution
valued and practice is both diverse and ■■ “Cost” is seen as arbitration’s worst feature, most improved arbitral seat (taken over because of its reputation and their previous
followed by “lack of effective sanctions
dispersed globally. the past five years) is Singapore, followed experiences of that institution.
during the arbitral process”, “lack of insight
by Hong Kong.
into arbitrators’ efficiency” and “lack ■■ Respondents expressed the view that the
The objective of this empirical study is
of speed”. most improved arbitral institution (taken over
to collate the views of a comprehensive
the past five years) is the HKIAC, followed
range of stakeholders on improvements ■■ The majority of respondents do not favour by the SIAC, ICC and LCIA.
and innovations, both past and potential, an appeal mechanism on the merits in either
in international arbitration. The survey was commercial or investment treaty arbitration. ■■ Respondents feel that arbitral institutions
could contribute to the improvement
conducted over a six month period and ■■ A growing concern in international arbitration of international arbitration by publishing
comprised two phases: an online questionnaire is a perceived reluctance by tribunals to act
data not only on the average length of
completed by 763 respondents (quantitative decisively in certain situations for fear of the
their cases, but also on the time taken
phase) and, subsequently, 105 personal award being challenged on the basis of a
by individual arbitrators to issue awards.
interviews (qualitative phase). Further party not having had the chance to present Respondents also welcome increased
information about the sample of questionnaire its case fully (“due process paranoia”). transparency in institutional decision-making
respondents and interviewees can be found in on the appointment of, and challenges
the Methodology section in the appendices. to, arbitrators.
1. Please note that due to rounding, some percentages shown in the charts may not equal 100%.
2
Reducing time and cost ■■ Respondents believe that arbitration Soft law and guidelines Role and regulation
counsel could be better at working
of specific actors
■■ The procedural innovation perceived as together with opposing counsel to narrow ■■ Respondents generally have a positive
most effective at controlling time and cost perception of guidelines and soft law
issues and limit document production, ■■ A clear majority of respondents think
in international arbitration is a requirement instruments in international arbitration.
encouraging settlement (including the use that tribunal secretaries (68%) and third
for tribunals to commit to a schedule for These instruments are seen to supplement
of mediation) during an arbitration, and party funding (71%) are areas which
deliberations and delivery of final awards. existing rules and laws, and to provide
not ‘overlawyering’. require regulation.
guidance where little or none exists.
■■ 92% of respondents favour inclusion of ■■ When arbitration and mediation are used ■■ A small majority of respondents (55%) think
simplified procedures in institutional rules in conjunction, it appears that a minimal ■■ 70% of respondents are of the opinion that that the conduct of arbitrators requires
for claims under a certain value: 33% would there is currently an adequate amount of
overlap between the two processes more regulation.
have this as a mandatory feature and regulation in international arbitration.
is preferred.
59% as an optional feature. ■■ Tribunal secretaries are widely used in
■■ It is inconclusive what effect conventions ■■ Of various specific instruments put to international arbitration: 82% of respondents
■■ Few respondents have experience with on enforcement of mediation agreements respondents, the IBA Rules on the Taking have either used their services or have
emergency arbitrators and some expressed of Evidence and the IBA Guidelines on
and settlement agreements resulting seen them used. Most respondents (72%)
concerns about the enforceability of Conflicts of Interest were the most widely
from mediations might have in practice, believe that arbitral institutions should offer
emergency arbitrator decisions. 46% of known, the most frequently used and the
particularly in terms of encouraging the use the services of tribunal secretaries. A vast
respondents would, at present, look to most highly rated.
of mediation. majority do not consider it appropriate for
domestic courts for urgent relief before
tribunal secretaries to conduct substantive
the constitution of the tribunal, versus
or merits-related tasks.
29% who would opt for an emergency
arbitrator. Nonetheless, 93% favour the ■■ Respondents are generally of the opinion
inclusion of emergency arbitrator provisions that it should be mandatory in international
in institutional rules. arbitration for claimants to disclose any use
of third party funding and the identity of the
funders involved, but not the full terms of
any funding agreement.
2015 International Arbitration Survey: Improvements and Innovations in International Arbitration 3
The Study
1 International Arbitration: the ‘State of Play’
Arbitration remains the Whilst the respondent group was composed CChhaartr t1 1: : WWhhaatt isis y yoouur rp rperfeerfererdre md emtheotdh oofd
Summary
preferred method of resolving of individuals who were predominantly ofr erseoslovilnvgin cgro csrso-bsosr-dbeorr ddiesrp udtiessp?utes?
■■ 90% of respondents indicate that active in international arbitration, the average
international arbitration is their preferred cross-border disputes
respondent also had experience in other areas
dispute resolution mechanism, either as a 2%2%
stand-alone method (56%) or together with Previous surveys by Queen Mary, University of law, business, and/or dispute resolution, and 5%
other forms of ADR (34%). of London have confirmed that corporate was thus able to make an informed choice
■■ “Enforceability of awards” is seen as counsel view arbitration as the premier about the alternatives. The strong preference
arbitration’s most valuable characteristic, dispute resolution mechanism for cross-border for international arbitration by its users
followed by “avoiding specific legal disputes.2 The current survey is broader demonstrates that arbitration better meets 34% 56%
systems,” “flexibility” and “selection
in scope and has sought the opinions of their demands than other readily available
of arbitrators”.
stakeholders at all levels in international options, such as commercial litigation.
■■ “Cost” is seen as arbitration’s worst
arbitration. This wider respondent group
feature, followed by “lack of effective
sanctions during the arbitral process”, showed a strong preference for arbitration over
“lack of insight into arbitrators’ efficiency” other options such as cross-border litigation International arbitration 56%
and “lack of speed”. or mediation. 90% of respondents said that International arbitration together with (other) ADR 34%
Mediation 5%
■■ The majority of respondents do not favour international arbitration is their preferred
Cross-border litigation together with ADR 2%
an appeal mechanism on the merits in dispute resolution mechanism, either as a Cross-border litigation 2%
either commercial or investment
stand-alone method (56%) or together with
treaty arbitration.
other ADR (34%).
■■ A growing concern in international
arbitration is a perceived reluctance by
tribunals to act decisively in certain
situations for fear of the award being
challenged on the basis of a party not
having had the chance to present its case
fully (“due process paranoia”).
2. 2013 International Arbitration Survey, p.6; 2006 International Arbitration Survey, p.5.
2015 International Arbitration Survey: Improvements and Innovations in International Arbitration 5
1 International Arbitration: the ‘State of Play’ (cont.)
The most valuable The outcomes are largely similar when the CChharatr t2 :2 W: Whahta at raer eth teh eth trheree em mosots tv avlauluabablel ec hcharaaractceterirsistitcicss of international arbitration?
characteristics of arbitration results are split by subgroups based on of international arbitration?
roles. There are, however, some differences
Enforceability of awards
65%
The popularity of arbitration may be better that illustrate the divergence in personal
Avoiding specific legal
understood by reference to the specific and professional interests of the surveyed systems/national courts 64%
characteristics of international arbitration respondents. For the in-house counsel Flexibility 38%
that respondents find most valuable. subgroup, for example, the second most Selection of arbitrators 38%
Unsurprisingly, “enforceability of awards” frequently listed valuable characteristic
Confidentiality and privacy 33%
and “avoiding specific legal systems/national was “confidentiality and privacy”. This
courts” were most frequently chosen, difference in priorities fits the subgroup’s Neutrality 25%
followed by “flexibility” and “selection of particular motives for choosing arbitration. Finality 18% 
arbitrators”. Other traditional benefits attributed Speed 10%
to international arbitration, such as “finality”
Cost 2%
and “neutrality”, were chosen less often.
Other 2%
0 10 20 30 40 50 60 70 80
Percentage of respondents
6