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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
What are your top priorities during your presidency of the ICC International Court of Arbitration?
We are more conscious than ever of our users' concerns concerning the time and cost of arbitration proceedings, and we will be ever more rigorous and demanding as to the expeditiousness of our arbitrations. Much progress has already been made in ensuring that our tribunals conduct proceedings in the most efficient manner. Save in exceptional cases, ICC awards are made between 18 and 24 months after the request for arbitration, and our teams closely monitor the progress of the case when extending the time limit for rendering the award. We do not hesitate to press those tribunals that do not act with the desired efficiency, and this generally produces very good results. And we do not hesitate to financially sanction unacceptable delays, in the rare instances where they happen. We will be very transparent with our arbitrators in making it clear that failure to produce a draft award in a reasonable time has consequences in terms of the determination of their fees. We will also seek to reduce, to the maximum extent possible, the time needed to constitute arbitral tribunals.
I will also seek to give more voice to our users by creating a platform allowing corporate counsel to interact directly with the Court's leadership on a permanent basis. It is of the utmost importance that the voice of corporate counsel be heard and fully taken into account in our decisional practice and future strategic plans. I am very happy, in this regard, that the Court's Governing Body is chaired by a corporate counsel.
There are many other questions on the table. A unique feature of the ICC Court is its global reach and transnational nature. In contrast to all other arbitral institutions, the Court is not rooted in any particular jurisdiction and is not the expression of any legal culture. We are not funded by any government and do not have links with any state. Our rules do not provide for any seat by default when the parties did not agree on the legal venue. We administer cases from three continents, thanks to the presence of our teams in Paris, New York and Hong Kong. Our Secretariat is able to administer cases in more than 25 different languages. The Court itself is composed of 130 members from 80 different jurisdictions, and avails itself of the support of some 90 ICC national committees, giving it a unique global reach. We will in the months to come reinforce and expand that global reach, and to that end we are working on the possibility of opening an office of the Court in Latin America. We will also hold our Court sessions not only in Paris, as was the case in the past, but also abroad. In 2016 we will hold plenary sessions in New York and Hong Kong. We want to make sure that the Court is at all times perceived as a truly international organization, not as a civil law or common law institution or as a French or European organization. From that perspective, I expect our Court members on all continents, as well of course as our 17 Vice-Presidents, to act as ambassadors of the Court on a global basis and help us create even more proximity with our users worldwide.
We will also need to increase the diversity of the arbitration community. Arbitration is still too often seen as a club of old, male, western practitioners. It is an important goal for the Court, when appointing arbitrators, either directly or upon the proposal of a national committee, to favour whenever possible the rise of a new generation of arbitrators, including from emerging jurisdictions. Gender diversity also matters much to us, and I am proud that our bureau of vice presidents respects perfect gender equality.
Another important point is making sure that the integrity and fairness of the arbitration process is at all times beyond any doubt. We will be very demanding in making sure that conflict disclosures made by our arbitrators are transparent and provide the parties with all the relevant information needed to assess whether there is a reasonable doubt as to the arbitrator's independence and impartiality. Equally, the Court will be as robust in rejecting frivolous and tactical challenges as it will be rigorous in sanctioning failures to comply with the arbitrators' duty to disclose. The Court has always played a pioneering role in this respect and will continue to do so. I welcome, in this respect, that the International Bar Association's arbitration committee has adopted in its new Conflicts Guidelines our position on the so-called advance waivers. Our strong view is that those waivers have no effect as to the arbitrators' ongoing duty to disclose.
Increasing the transparency of the Court's procedures is also high on my agenda. We have decided that the Court may, at the request of the parties to an arbitration, communicate reasons for many of the administrative decisions it is called upon to take under the ICC Rules of Arbitration. This new service has been put in place in response to demand from users and is intended to further enhance the transparency of ICC arbitration proceedings. The new policy will enter into force immediately and will be applied where all the parties to a case so agree. This additional service offered by the Court applies to decisions on challenges of arbitrators, decisions to initiate replacement proceedings and subsequently to replace an arbitrator on the Court's own motion, as well as to decisions on the consolidation of arbitration proceedings and on joinders, and prima facie decisions on jurisdiction. The ICC Court's note to parties and arbitrators specifies that any request for the communication of reasons must be made in advance of the relevant decision in respect of which reasons are sought. This new service is a sign of our commitment to ensuring that ICC arbitration is fully responsive to the needs of our users the world over.
For a party facing a dispute, what advantages does the ICC Court have over the many other arbitration centres springing up around the world?
As I said, the Court is the only truly global arbitral institution. This guarantees that it is an absolutely neutral forum for the resolution of disputes, irrespective of the origins of the parties or the nature of the dispute. This neutrality is also ensured by special rules that are applied when a state or a state entity is present. For example, in such a case, the award will always be scrutinised by a plenary session of the Court, as opposed to a three-members committee. Another rule that applies when a state or a state entity is present is that arbitrators' appointments are made directly by the Court rather than upon the proposal of a national committee.
Another advantage is of course the quality of our rules. Not only are they the best in the world, but we have more than 80 years of experience in administering cases. Experience matters, and it gives immense value to our users and the arbitral community at large. Our fees schedule also ensures that arbitration costs remain limited and predictable for the parties.
But the most important and unique feature of our arbitration is, of course, the high quality of our scrutiny process. No ICC award can be notified to the parties before it has been examined and approved by the Court, either in a plenary session or in a three-member committee. All awards are carefully read and checked by the Secretariat, and when they come to the Court they are subjected to an in-depth discussion. The Court provides the arbitral tribunal with observations as to the award's form (with which the tribunal has to comply), and it can call the tribunal's attention to questions of substance. In the immense majority of cases, the Court's comments are accepted by the tribunal and incorporated into the award. This process rarely takes more than two or three weeks and adds great value, increasing the quality of our awards not only as far as questions of form are concerned, but also the clarity and coherence of the reasoning or the calculation of damages. Scrutiny considerably lowers the risk that an award will be annulled at the seat of the arbitration, and increases the likelihood that it will be enforced in other jurisdictions.
For which parties and types of disputes is arbitration likely to be of most benefit?
When a dispute involves parties from different jurisdictions, one of the main reasons parties choose arbitration is because they want a neutral forum. No institution can ensure the perfect neutrality of the process better than the ICC Court. Arbitration is of course particularly suitable in large, complex disputes, in which arbitrators will need to resolve difficult technical and legal issues, as well as to deal with complicated questions of damage valuation. For all these issues, having an experienced arbitral tribunal able to devote the necessary time to cases that often involve thousands of pages of submissions, as well as lengthy and complex expert reports and the hearing of numerous fact witnesses, is of course key. Finally, arbitration is more efficient in terms of time and costs than court litigation.
Is it difficult to promote arbitration in litigious societies, and in which of these countries is progress being made?
The acceptance of arbitration has now become universal, and progress is being made in many jurisdictions that used to be more sceptical or less favourable to the process. Case law around the world demonstrates that many of these jurisdictions - in particular India and parts of Latin America - are becoming more favourable to arbitration. Globally, there is more judicial restraint, less reviewing of the merits of awards, and there is now widespread deference to the New York Convention. So, even though there are still regrettable decisions, overall I think we are in a positive situation.
It is essentially a question of trust in the process, and trust is of course not a given. For example, I was recently in California, where corporate counsel from large hi-tech companies told me that they are used to court litigation, because they have judges that are highly specialised and knowledgeable of the technology industry. They want to know what arbitration offers that their courts don't. That is certainly a legitimate question. We are now in a world in which arbitration is not as much a given as it was in the past, and we need to make the case that it is more efficient than court litigation. We also need to ensure that arbitration remains at all times a fair and legitimate process. Trust takes decades to be established, but it can be destroyed very quickly. What is happening at the moment in the context of investor-state arbitration is a cautionary tale.
Building on that last point, to what extent does international arbitration's effectiveness depend on the willingness of courts to recognise and enforce awards?
There is now wider acceptance of the international nature of arbitration, and the New York Convention is generally accepted and properly applied. There is also a broad consensus that an international arbitral award has a validity of its own. More and more jurisdictions are enforcing foreign awards in spite of their annulment at the seat. There are different approaches to this; France takes an entirely delocalized approach, while the US and the Netherlands look at whether the annulment decision should be accepted or disregarded. But in all cases, there is an acceptance that, when the award has been annulled at the seat, courts in the country of enforcement nonetheless have discretion to enforce it. There is also a growing body of investment awards holding that failure to enforce an award in compliance with the New York Convention is a violation of international law. These are important trends in favour of enforcement.
What should parties consider when drafting an arbitration clause to include in their contract?
I will say only two things. They should adopt institutional arbitration, for it is in my view preferable to ad hoc arbitration. And if parties opt for institutional arbitration, they should adopt the clause recommended by the particular institution. Do not try to reinvent the wheel or redraft what experienced institutions have done, save to the extent strictly necessary. In the vast majority of cases, it is advisable to include the clause recommended and proposed by the institution.
Some believe that party-appointed arbitrators' may lack the impartiality of one who is appointed by a third party. What are your thoughts on this point?
I do not think that this is the case. In the vast majority of cases, we see party-appointed arbitrators acting properly and in an impartial manner. There is now a growing consensus in the international arbitration community that party-appointed arbitrators need to be independent and impartial, and there is a growing awareness that unethical behaviour does not advance the case of a party that has appointed a biased arbitrator. In addition, arbitral institutions are more robust in replacing arbitrators who do not behave properly. In my view, the system of party appointments offers immense advantages, by allowing the parties greater participation in the process, and also by ensuring the diversity of the arbitral community, which would be jeopardised if appointments depended exclusively on institutions. I also think that the parties are in the first instance better placed to select the most suitable arbitrator for their case. Party appointments are the most broadly adopted method and it works well. I do not see more problems in tribunals where arbitrators have been appointed by parties as opposed to when appointed by an institution.
What are the most common misconceptions about arbitration?
The main misconception that you still see too often is that arbitration is a proxy for court litigation. Some counsel still try to import procedures that belong to litigation, but have no place in arbitration. An obvious example is document production. Some parties think there should be broad discovery or, on the contrary, object as a matter of principle to any form of document production. They fail to see that arbitration has its own procedures with respect to the disclosure of documents. That said, there is now a broad awareness that arbitration is distinct from court litigation, but some parties still act in arbitration as if they were before a court.
You've been practising law for more than 25 years. How have you seen attitudes towards arbitration change over that time?
There are two important trends. First, there is fiercer competition between institutions than ever before, and that is in part due to the fact that new institutions have emerged, in particular in Asia. There is also emerging competition between arbitration and court litigation. Some jurisdictions, such as Singapore and Dubai, have sought to create international courts with the aim of competing with arbitration. So it is a more open and competitive landscape.
The second trend is growing suspicion of arbitration in the context of investor-state arbitration. This has developed recently, particularly in the context of the negotiation of the TTIP [Transatlantic Trade and Investment Partnership]. There has been a pushback by some states, and the European Commission has taken a stand that is not exactly favourable to arbitration. There has been an anti-arbitration campaign led by some NGOs [non-governmental organizations], using arguments that are often based on misconceptions, and at times politically biased. My concern is that this negative climate spills over to commercial arbitration. This has not happened so far, but it is even more necessary to make the case for arbitration and the trust that it deserves. We need to make the case, over and over again, that arbitration is a fair and proper means of resolving disputes.