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ANNUAL REVIEW

Commercial Arbitration 2019

March 2019  |  LITIGATION & DISPUTE RESOLUTION

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Arbitration has become one of the most attractive forms of commercial dispute resolution in recent years. Parties have been drawn to its flexibility, speed and enforceability of arbitral awards, among other benefits. With courts in many jurisdictions remaining fiercely pro-arbitration, it is set to remain a powerful tool through which international trade will be championed and disputes resolved.

 

UNITED STATES

Glenn P. Hendrix

Arnall Golden Gregory LLP

“Arbitration continues to grow in the US, in part because businesses are seeking to avoid some of the more plaintiff-friendly aspects of the US judicial system, including juries and broad discovery. As one court recently put it in Aspic Eng’g & Constr. Co. v. ECC Centcom Constructors: “We have become an arbitration nation”. But there is an emerging backlash against the ‘arbitration nation’ in some parts of the US, especially in connection with ‘business-to-individual’ (B2i) disputes. Last year a California court refused to enforce an arbitration agreement between a law firm and one of its lawyers, indicating that even arbitration agreements with sophisticated individuals are vulnerable to challenge.”

 

CANADA

Lauren Tomasich

Osler

“We have seen increased sophistication when parties elect to proceed by arbitration – either by virtue of an arbitration clause or when a dispute is underway. In other words, parties are becoming more selective about when to choose arbitration, and when they do, they are generally savvier in negotiating and adopting procedures that make arbitration as efficient and effective as possible. Notably, this does not mean using the ‘expedited’ procedures that are a feature of some institutional rules, but rather, thinking critically about how best to facilitate an arbitration, whatever its scope or complexity.”

 

ARGENTINA

Ricardo A. Ostrower

Marval O’Farrell & Mairal

“2018 will be remembered as the year in which Latin America consolidated its commercial arbitration overtures. The most striking development during this period took place in July 2018 when Argentina and Uruguay almost simultaneously adopted new international arbitration laws. Both acts are based on the 2006 version of the UNCITRAL Model Law, which has inspired more than 75 states, including most of the world’s main arbitration laws. In the case of Argentina, the enactment of the International Commercial Arbitration Law should not be analysed in isolation, but within the framework of a strong agenda aimed at strengthening arbitration and, more broadly, at attracting foreign business and investments to Argentina.”

 

UNITED KINGDOM

Maria Frangeskides

Orrick, Herrington & Sutcliffe (UK) LLP

“The trend for the commencement of investment treaty arbitration cases continues, with investors fiercely protecting their foreign investments by way of arbitration against host states. Further work in this area has been undertaken by the UNCITRAL Working Group on Investor-State Dispute Settlement Reform. In the Achmea case, a ruling by the European Court of Justice (ECJ) that the arbitration provision in the bilateral investment treaty between The Netherlands and the Czech and Slovak Republic was inconsistent with EU law was a surprising development.”

 

FRANCE

Serge Gravel

FLV & Associés

“The jurisdiction of arbitral tribunals is often challenged by litigants. Indeed, the validity of the arbitration agreement and its scope are frequently questioned. The jurisdiction issue may be raised either during the arbitration proceedings, including at the very beginning, or when the arbitration award is being challenged in court. Challenging jurisdiction is nothing new, but it seems to be increasingly resorted to in all types of arbitration proceedings, including investment disputes. Many interesting and complex problems may arise, including which law the arbitrators should apply, especially when one seeks to extend an arbitration clause to a non-signatory of the underlying business agreement.”

 

NETHERLANDS

Timo Jansen

Lexence

“The Dutch administration of justice established the Netherlands Commercial Court (NCC) on 1 January 2019. The NCC offers a swift resolution of international commercial disputes by specialised judges in the English language, against a slightly higher administration fee. With this initiative, the NCC is positioned as an alternative dispute resolution mechanism to arbitration. Because parties can only voluntarily appear before the NCC, a forum clause to that effect is required, similar to arbitration clauses in commercial contracts.”

 

SWITZERLAND

Dieter Hofmann

Walder Wyss Ltd

“Arbitration rules in Switzerland have remained unchanged for some time. However, the lex arbitri for international arbitration proceedings seated in Switzerland is currently being amended. The first draft text was published in 2017 and stakeholders were given the opportunity to comment on it. The contents of the new lex arbitri will not significantly differ from that of the present lex arbitri. Rather, the amendment serves to modernise the current text, for example by making certain key holdings of the case law of the Swiss Federal Supreme Court an express part of the law or by clarifying certain language.”

 

GERMANY

Sarah Lindemann Büthe

Wach + Meckes LLP

“In 2018, procedural developments dominated Germany’s commercial arbitration space. The German Arbitration Institutes (DIS) issued new rules in March 2018. The new rules seek to provide faster, more directed dispute resolution through tighter timelines and more hands-on management by arbitral tribunals. Less than a year later, in December 2018, the Rules on the Efficient Conduct of Proceedings in International Arbitration, known as the Prague Rules, were launched.”

 

AUSTRIA

Désirée Prantl

Freshfields Bruckhaus Deringer

“The current trend in Austria, much like in other major arbitration markets, is to further improve the efficiency and legitimacy of the arbitral process. Experience shows that cost-awareness has increased among users of arbitration. Also, the time-efficient conduct of arbitral proceedings has become a major concern. Consistent with this, in 2018, the Vienna International Arbitral Center (VIAC) introduced the new Vienna Rules, which provide a number of innovations designed to enhance efficiency. Another issue that has gained prominence is the importance of determining the extent of the confidentiality obligations that apply to arbitration, since arbitration is not confidential per se.”

 

SWEDEN

Sandra Kaznova

Advoktfirman Hammarskiöld & Co

“Certain amendments to the Swedish Arbitration Act entered into force on 1 March 2019. These changes were the result of a review that was carried out in order to modernise the legislation and to ensure that Sweden remains an attractive destination for international arbitration. As the Arbitration Act has been perceived as well-functioning, no drastic changes were included in the amendments. Small changes were included, however. For example, the time period for challenging awards has been shortened to two months and a parties’ ability to appeal an appellate court’s ruling in challenge proceedings to the Supreme Court is now subject to the Supreme Court granting leave to appeal.”

 

SAUDI ARABIA

Wissam Hachem

Al-Enezee in association with EKP

“To create a better regulated and more reliable environment for arbitration as an effective tool of dispute resolution, Saudi Arabia has successfully seen a number of significant reforms and developments over the last decade. The most recent of these was the enactment of the Implementing Regulations of the new Arbitration Law in 2017, which provide clarification to the 2012 Arbitration Law. Additionally, and in line with Saudi Arabia’s Vision 2030 and the National Transformation Plan, a specialised commercial arbitration centre has been established – the Saudi Centre for Commercial Arbitration (SCCA) – which offers the advantage of a local institution.”

 

UNITED ARAB EMIRATES

Daniel Breytenbach

Horizons & Co

“By far the most important recent development in the UAE arbitration sector is the enactment of the UAE Federal Arbitration Law No. 6 of 2018 (FAL). The FAL is predominantly based on the UNCITRAL Model Law on International Commercial Arbitration and replaced and superseded Articles 203 to 218 in the UAE Civil Procedures Code which previously governed arbitrations seated in onshore UAE, and which was widely held to be outdated and not suited for international arbitration.”


CONTRIBUTORS

Advoktfirman Hammarskiöld & Co

Al-Enezee in association with EKP

Arnall Golden Gregory LLP

FLV & Associés

Freshfields Bruckhaus Deringer

Horizons & Co

Lexence

Marval O’Farrell & Mairal

Orrick, Herrington & Sutcliffe (UK) LLP

Osler

Wach + Meckes LLP

Walder Wyss Ltd


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