ANNUAL REVIEW

Commercial Arbitration 2013

March 2013  |  LITIGATION & DISPUTE RESOLUTION

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Financier Worldwide canvasses the opinions of leading professionals around the world on the latest trends in commercial arbitration.

 

UNITED STATES

Thomas G. Rohback

Axinn Veltrop & Harkrider LLP

One of the biggest challenges facing parties, whether in judicial litigation or in arbitration, is the extremely high cost of litigation. As a result, many valid disputes become simply too costly to litigate. At the other extreme, some of the very largest cases are often resolved without a judicial or arbitral decision precisely because the risk of an unfavourable decision is too great.”

 

CANADA

Robert J.C. Deane

Borden Ladner Gervais

Commercial disputes across Canada are increasingly complex and international due to the significant number of Canadian companies active in the global market, particularly in industries such as energy, oil and gas, mining, maritime, pharmaceutical and other health-related sectors, telecommunications, and intellectual property. At the same time, corporate clients are demanding competitive and creative fee arrangements to combat the inherent costs of such disputes.”

 

BRAZIL

Jairo Saddi

Saddi Advogados Associados

Arbitration in Brazil is now consolidated. Reinforcing the attractiveness of international commercial arbitration in Brazil, and dealing with the mistrust of investors in award enforcement, still remain the key issues. However, Brazil is on the right track. Indeed, in 1995, there were only four procedures involving Brazilian parties among arbitrations under the ICC, but this number rose to 74 in 2010, according official numbers.”

 

MEXICO

Marco Tulio Venegas

Von Wobeser y Sierra, S.C.

Over the past few years, the Mexican government has implemented a strong reform agenda aimed at attracting foreign investment. This policy includes comprehensive amendments in several sectors of the economy, such as the public sector, energy, telecommunications, and even the enactment of legal provisions regulating public-private partnerships. Accordingly, commercial disputes have increased the use of arbitration.”

 

UNITED KINGDOM

Marie Berard

Clifford Chance

Regarding challenges, the changeable economic climate led to some contracts and projects running into financing difficulties. These changing conditions have caused many parties to re-examine their contracts and seek to renegotiate them on more favourable terms to better reflect the prevailing economic climate, often delaying work on the underlying project until agreement on new terms are reached.”

 

GERMANY

Benno A. Packi

v. Boetticher Hasse Lohmann

A recurring theme in the arbitration scene is the phenomenon of the so-called ‘arbitration guerillas’, meaning that attorneys-at-law often use extremely tough tactics, such as repeated recusals of arbitrators due to asserted impartiality. It is under discussion whether an ethical code of conduct or rather clear standards for the assumption of impartiality may help in such situations.”

 

FRANCE

Caroline Duclercq

Altana Law Firm

With the financial crisis, the French economy has slowed down – but has not come to a stop. As a consequence, an increase of disputes relating to contract terminations and defaults in payment can be observed. In the meantime, contracts, and consequently disputes, relating to certain areas of industry have also increased, such as renewable energies or telecommunications, mainly due to the facts that these industries are on the rise and are less impacted by the crisis.”

 

LUXEMBOURG

Fabio Trevisan

Bonn Steichen & Partners

We have noted an increase in the complexity of the litigations submitted to us. Such complexity is due to the matters concerned, which are mostly financial and corporate disputes, in the context of the financial crisis. Indeed, investors are more frivolous and wish to protect their interests as much as possible. As Luxembourg is a premier financial place, such disputes are the heart of the litigation submitted to the Luxembourg courts.”

 

SWITZERLAND

Urs Weber-Stecher

Wenger & Vieli AG

As one of the original venues for arbitration, Swiss institutions have been offering institutional arbitration for commercial disputes for more than 100 years – for instance Zurich’s Chamber of Commerce since 1911. One of the major challenges today is the increasingly competitive environment of international dispute settlement. Various countries such as Germany and Austria in Europe, or Singapore and Hong Kong in the Far East, continue to increase their efforts to create attractive conditions for dispute settlement.”

 

RUSSIA

Sergey Treshchev

Squire Sanders Moscow LLC

Notwithstanding the fact that the Highest State Commercial Court (HSCC) decrees have already hit the headlines, we do believe that they are worth mentioning once again. These decrees have recently rocked the legal boat and changed the way that deals are done. We refer to the NLMK and Sony Ericsson cases. From now on, corporate disputes – those dealing with Russian company shares – lack arbitrability and no disproportional arbitration clause can be applied.”

 

TURKEY

Karen Akinci

Akinci Law

This is a very exciting period in Turkey. In the run up to the celebration of the centenary of the Republic in 2023, many new projects are being tendered. This has been supported by the PPP system brought into effect this year, which will see many hospitals, schools and other amenities brought to the cities and regions. Opportunities are not only to be found in the construction industry. In the area of telecommunications, internet usage is exceptionally high in Turkey giving great opportunities to software and hardware development.”

 

CHINA

Peter Yuen

Fangda Partners

In mainland China, one of the biggest challenges we saw in 2012 was the overall slowing-down of the growth of China’s economy, which has led to a general decline in the profitability and liquidity of companies. This in turn has led to companies defaulting either under their contracts with third-parties or on their financial covenants or obligations owed to foreign investors.”

 

HONG KONG

Russell Coleman SC

Temple Chambers

The costs of dispute resolution are always a practical issue, and a recurrent theme in Hong Kong is how best for tribunals and the parties to manage costs and ensure appropriate proportionality for the particular dispute. Experienced arbitration practitioners and arbitrators are increasingly conscious of the need to achieve a fair and just resolution of the dispute, without unnecessary expense and as soon as practicable.”

 

INDIA

S. S. Naganand

Just Law

There is a slow but significant switch over to institutional arbitration from ad hoc arbitration. Many high courts in India have set up arbitration and mediation centres to encourage ADR. These centres have empanelled many former judges to arbitrate disputes. A number of construction disputes are going for arbitration, although the progress is slow as arbitrators are allowing parties to delay the proceedings.”

 

MALAYSIA

Nahendran Navaratnam

Kadir Andir & Partners

Current market challenges include the inability of litigants to appreciate and respond to the increasing pace at which dispute resolution is now conducted. Clients and lawyers are also finding it harder to respond and cope with the growing complexity of disputes, owing to the availability of electronic communications that make retrieval and storage of information – and thus easy disclosure of evidence – by way of discovery applications more common and also more detailed.”

 

SINGAPORE

Karam S. Parmar

Tan Kok Quan Partnership

The most critical hurdle standing in the way of arbitration is its increasing cost. The arbitral forum and arbitrators’ fees are not inexpensive. As the trend is to prepare for arbitrations as thoroughly as preparing for court trials, counsel charges have spiralled upwards. The demand for specialist counsel and arbitrators has also contributed to the rising costs. This is a big challenge and, if unchecked, arbitration runs the risk of pricing itself out of being a viable alternative to court litigation.”

 

UNITED ARAB EMIRATES

Paul Turner

Al Tamimi & Company

The biggest challenge is probably persuading local companies to choose arbitration as their preferred dispute resolution procedure when negotiating their contracts. Clients find arbitration expensive compared to the costs of litigation. They also know how the court system works, whereas for many, arbitration is still the little sister. That is not the case for international companies. For them the challenge is whether to use local arbitration centres or to stick to the better known institutions in Paris or London.”


CONTRIBUTORS  

Akinci Law

Al Tamimi & Company

Altana Law Firm

Axinn Veltrop & Harkrider LLP

Bonn Steichen & Partners

Borden Ladner Gervais

Clifford Chance

Fangda Partners

Just Law

Kadir Andir & Partners

Saddi Advogados Associados

Squire Sanders Moscow LLC

Tan Kok Quan Partnership

Temple Chambers

v. Boetticher Hasse Lohmann

Von Wobeser y Sierra, S.C

Wenger & Vieli AG


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