Possibilities and challenges of international arbitration

February 1st, 2019
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Director at Werksmans Attorneys, Roger Wakefield, spoke at the International Arbitration Seminar that was held in October 2018 in Johannesburg.

By Kgomotso Ramotsho

Werksmans Attorneys together with McDermott Will and Emery and the International Chamber of Commerce (ICC) jointly hosted the International Arbitration Seminar in October 2018 in Johannesburg. Director at Werksmans Attorneys, Roger Wakefield, said time is a great advantage in arbitration. He added that more efficient arbitrations mean less costs. He pointed out that the ICC has rules that give an arbitrator and the court, specific powers to curtail discovery, length of argument and submissions. He said with the rules, arbitrators cannot complain that they were not given due process to deal with their matter. However, he pointed out that there have been instances where a losing party would raise some concerns with how the arbitration process works.

Mr Wakefield added that there is a perception that ICC arbitrations are only suitable for complex claims, that they are lengthy and expensive, and that led to the revision of the rules in March 2017. He said the most significant revision was the introduction of an expedited procedure for claims amounting to a certain amount. He noted that the reason for the expedited procedure to be faster than the traditional standard procedure is case management. Case management must be held within 15 days of the arbitrator receiving the case file. The arbitrator must make an award within six months of the case management.

Mr Wakefield said art 30 of the ICC rules, provides that by agreeing to arbitrate under the ICC rules the parties agree that the expedited procedural rules shall take precedence over any contrary terms of the arbitration agreement. He added that the ICC court powers have been increased. The ICC has the power to appoint a sole arbitrator, arguably because a sole arbitrator is more efficient, which leads to speedy arbitration.

Mr Wakefield also discussed costs in arbitration. He said that ad hoc arbitrations are more expensive and take longer because they are not managed. He added that the ICC has taken steps to curtail costs for standard arbitration and administrative fees are much lower. He said that the ICC rules provide case management techniques. Techniques include –

  • embracing technology, by using video or telephone conferencing for meetings instead of physically being at the meeting;
  • curtailing the length of scope for submission statements or evidence;
  • avoiding unnecessary objections; and
  • complying with the rules.

Mr Wakefield pointed out that in terms of art 38(5) of the ICC rules, the tribunal has the discretion to award costs to the winning party, according to how the party had conducted itself.

Neutrality

Senior Legal Adviser at PetroSA, Jackie Lichaba, spoke at the International Arbitration Seminar.

Senior Legal Adviser at PetroSA, Jackie Lichaba, said neutrality is very important in arbitration. He pointed out that if one goes to court, arbitrators are perceived to have an inherent prejudice. He said that in instances where there is a long standing feud between two countries, parties stand a better chance to solve the matter through arbitration. He noted that an arbitration tribunal can be established in a seat at a country where it is neutral for both parties, with arbitrators from different nationalities.

Mr Lichaba said that one aspect of neutrality is the venue where the arbitration will take place. He pointed out that in choosing the venue for arbitration, there must be an equal footing because if a venue was chosen and there was a biased move to choose the venue favourable to one party it might be unfair for the other party. He added that it must be ensured that the venue chosen is party to one of the arbitration treaties, if not there might be some difficulties in enforcing the award.

Mr Lichaba said that the selection of an arbitrator is associated with citizenship of the arbitrator. He noted that it is important that the chairperson of the tribunal, for example, be of a different nationality from the arbitrators. He added that another issue of neutrality relates to the law, on which law will be applicable and which law will be neutral to all parties.

Partner at McDermott Will and Emery, Jacob Grierson, spoke about confidentiality at the seminar.

Partner at McDermott Will and Emery, Jacob Grierson, said if one asked the general public and users of arbitration about arbitration and why they use arbitration, they would often say it is important because it is done in private. He added that the 2010 International Arbitration Survey: Choices in International Arbitration by Queen Mary University of London survey asked users of arbitration why they chose to use arbitration in their matters, the response given by 62% of people was confidentiality. However, Mr Grierson said it may come as a surprise to the users of arbitration and to the general public to know that arbitration is not perfectly confidential. He pointed out that national laws of countries in the world with the exception of New Zealand and China do not provide for confidentiality and common law in some countries does not provide for confidentiality in arbitration.

Flexibility

Partner at McDermott Will and Emery, Stuart Mathews, said there is flexibility with regards to arbitration agreements, he added that it worked efficiently with experts. He pointed out that experts can sit next to each other during a matter, where they can both give their statements and also be cross-examined. He noted that often the tribunal will have a series of questions for another expert and ask the neutral expert what they thought of the other expert’s answers. He said in that process experts can end up agreeing on what should be the true position of the arbitration.

Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.

This article was first published in De Rebus in 2019 (Jan/Feb) DR 12.

 

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