Paris, 9 April 2018

ICC Court President Alexis Mourre and ICC Court Secretary General Alexander Fessas opened the conference by urging the audience not to ignore the recent changes in the dispute resolution area so that Paris can remain an attractive seat for international arbitration in the future. They further mentioned that gender, regional and generational diversity implemented by ICC is a vector of positive change.

Euro vision: A year in review

Members of the panel: Gabriele Ruscalla (Counsel, ICC International Court of Arbitration, Paris), Marianne Kecsmar (Partner, Pellerin Kecsmar Mirza Avocats, Paris; Mermber of the ICC Court), Sabine Konrad (McDermott Will & Emery Rechtsanwälte Steuerberater LLP, Frankfurt), Brian Kotick (Senior Associate, Mannheimer Swartling Advokatbyrå, Sweden), Patricia Peterson (Chartered Arbitrator, Paris)

From the meteoric emergence of specialised commercial courts across the continent and innovative statutory law amendments to the latest from the ICC Court Headquarters in Paris, this rapid-fire panel session reported and commented on recent developments in the European arbitration market. The discussions notably concerned how French courts balance between not reviewing the merits of the award and analysing whether there is a violation of international public policy; in light of the recent Belokon and Indagro decisions involving criminal proceedings and money laundering.1

Crounching tiger, not-so-hidden dragon: The advent of the Belt and Road

This panel focused on the Belt and Road projects and their impact on arbitration. Justin D’Agostino (Global Head of Practice – Disputes, Regional Managing Partner – Asia, Herbert Smith Frehills, Hong Kong, Member of the ICC Court and Chair of the ICC Belt and Road Commission) recalled that the estimated value of Belt and Road projects planned or already underway is of US$ 900 billion. He then underlined that because the project is likely to generate a large number of disputes, it will create great competition between arbitration seats and arbitral institutions in order to become the fora for the resolution of these disputes. Furthermore, Justin D’Agostino stressed that since Chinese investors will be financing these projects, the resolution of disputes should be adapted to the Chinese culture, in particular by bringing more mediation into the process.

Peter Thorp (Arbitrator, Thorp Arbitration, Paris) explained that China has already taken initiatives in providing dispute resolution for disputes arising from the Belt and Road project. In particular, he noted that CIETAC launched the Silk Road Arbitration Center in Xi’an in 2017, and that three international commercial courts will be established in China in 2018. Peter Thorp further explained that because it already has an extensive footprint in the region, ICC has a strong position in the market for the resolution of disputes arising out of the projects.

Helen Shi (Partner, Fangda Partners, China; Member of the ICC Court and Member of the ICC Belt and Road Commission) pointed out that the projects include several aspects and will involve a diversity of contracts. Therefore, she explained that contractual parties will have their own agenda and dispute resolution clauses will likely be very different and diverse.2

How do you solve a problem like the B word?

Isabelle Michou (Partner, Quinn Emanuel Urquhart & Sullivan, Paris) opened the discussion with the statement that Brexit will likely create opportunities for other arbitration seats, in light of the uncertainty surrounding the United Kingdom’s exit from the European Union. In contrast, Samantha J. Rowe (International Counsel, Debevoise & Plimpton LLP, London) posited that London should remain an attractive seat, given its legal expertise and the education of its judges and lawyers. Moreover, Samantha J. Rowe explained that in the long term, London will become even more attractive for arbitration as a result of its exit from the European Union, for two main reasons:

  • English courts will not be prevented from issuing anti-suit injunctions against parties in European Member States, and
  • investment arbitrations in London will not be subject to the recent Achmea ruling by the Court of Justice of the European Union (‘CJEU’).3

On this last point, Isabelle Michou explained that defenses against enforcement of awards on the basis of non-compatibility with the European Union law, such as the ones raised in the Micula case, will no longer be valid in London.

Kai-Uwe Karl (Global Chief Litigation Counsel, GE Renewable Energy, United Kingdom) explained that Brexit will not have any impact on arbitration users. Furthermore, he noted that the right to practice law for English professionals in other European countries will likely remain.4

The case of investor-state disputes reform

The panel discussed investment arbitration disputes in light of the recent Achmea ruling. With regards to the European Commission’s reform, Stephen Balthasar (Senior Legal Counsel, Allianz SE; Professor, University of Bayreuth, Germany) indicated that it will not deal with disputes between European Union Member States, such as in Achmea, but will only concern investment disputes between European Union member States and third countries. He thought it was doubtful that the initiative would help investors and governments, but stressed that it is more important to implement substantial guarantees for intra-EU investors.

Concerning the Achmea decision, Deva Villanúa (Independent Arbitrator; Partner, Armesto & Asociados, Madrid) reminded the audience of the details of the case and noted that the Advocate General had indicated that the arbitral tribunal’s jurisdiction was confined to BIT breaches and not to European Union law breaches. Furthermore, she indicated that the CJEU decided that the Treaty on the Functioning of the European Union precluded arbitration under BITs between EU member States. On the consequences of Achmea ruling, Kathryn Khamsi (Partner, Three Crowns LLP, Paris) pointed out that it is still uncertain whether arbitral tribunals will give it deference.

Michele Potestà (Senior Associate, Lévy Kaufmann-Kohler, Switzerland) then analysed the UNCITRAL reform initiative on investment arbitration. She explained that the working group reflects the divergence of States’ representatives' views on investment arbitration, which can be divided into four camps:

  • denial of investors’ right to bring cases against States,
  • consent to the current ICSID system,
  • encouragement towards more heavy reforms, and
  • no position as yet.

Michele Potestà also highlighted a major issue for the reform: the appointment of arbitrators. She stressed there is a real concern that the process of appointment may become politicised and suggested that a solution may lie in institutional appointment or the use of rosters for competent arbitrators.

Tomorrowland: AI, smart contracts, blockchain and the end of arbitration as we know it?

Laurence Burger (Partner and Chair, European Branch, Landolt & Koch, Geneva), opened the panel discussions by defining ‘artificial intelligence’, ‘blockchain’ and ‘smart contract’. Ambrož Arko (Founder and CEO, Tribunalis, Slovenia) pointed out that using blockchain in dispute resolution can ensure confidentiality and a quick resolution of disputes and gave the example of insurance flight delay contracts, in which consumers get an automatic refund for delay. Ambrož Arko however flagged special risks in using smart contracts for dispute resolution, such as the irreversibility of transactions, the fact that the parties’ intent may not be reflected, and the decentralization of the system.

With regards to robotised arbitration, Gauthier Vannieuwenhuyse (Senior Associate, Hogan Lovells, Paris) examined the advantages of this new tool, such as the development of a more predictive justice, and the early identification of the chances of success for the parties. He further explained that during the proceedings, artificial intelligence can be used for the management of documents, and consequently lower the costs of arbitration. With regards to a complete robotised arbitration through smart contracts, Gauthier Vannieuwenhuyse pointed out that it is unclear whether decisions resulting from those smart contracts would constitute an award under the New York Convention, as the Convention requires awards to be signed and reasoned.

On the same topic, Niuscha Bassiri (Partner, Hanotiau & Van Den Berg, Brussels) flagged the issue of the compatibility of algorithms with due process, explaining the need for ethics. She further explained that two elements are necessary for a robotised arbitration: data and criteria as to chances of success. She expressed concern regarding the unconscious bias affecting data and the definition of chance of success suffer, especially as algorithm takes into account past practice. To address these issues, she advised that software engineers creating such new types of dispute resolution processes should work closely with arbitrators and counsel in order to come to a reasonable definition of ‘success’.

Concluding the conference, Živa Filipič (Managing Counsel, ICC International Court of Arbitration, Paris) noted that all of the changes discussed during the conference have undeniably had an important impact on international arbitration. Referring in particular to Achmea, she expressed the hope that these changes represent in fact a ‘productive disorder’ for international arbitration, as previously mentioned in the conference.


1
République du Kirghizistan v. M. Belokon, Paris Court of Appeals, 21 February 2017, n°15/01650.SA Ancienne Maison Marcel Bauche v. Indagro, Paris Court of Appeals, 27 September 2016, n° 15/12614.

2
For more information on ICC and the Belt and Road development strategy, see https://iccwbo.org/dispute-resolution-services/belt-road-dispute-resolution.

3
The Slovak Republic v. Achmea BV, CJEU, Case C-284/16.

4
Ioan Micula, Viorel Micula, S.C. European Food S.A, S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, https://www.italaw.com/cases/697.