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Practical Tips for Conducting International Arbitrations
Deepankar Sanwalka
July 2011
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 2
Agenda
Resolving User Dilemma11
Effective Dispute Resolution 22
Expert Witness – ‘Opinion Matters’33
Resolving User Dilemma
3
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 4
Resolving User Dilemma – Why Arbitration?
Resolving
User
Dilemma
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 5
Resolving User Dilemma (contd.)
Resolving
User Dilemma
Neutral, speedy and expert dispute
resolution process
Single centralized forum , choice of
sole or presiding arbitrator
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 6
Resolving User Dilemma (contd.)
Resolving
User Dilemma
Less expensive and time
consuming than fully litigated
cases
Use of “best practices” in areas
such as the taking of evidence,
disclosure
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 7
Resolving User Dilemma (contd.)
Resolving
User Dilemma
The arbitration award is final and
limited right of appeal to the courts
Arbitrator decisions are legally
binding thus avoiding additional
cost of parties going to the court
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 8
Resolving User Dilemma (contd.)
Resolving
User Dilemma
Arbitration proceedings are not a
public hearing
Process is less adversarial than
litigation which helps to maintain
business relationships between the
parties
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 9
Disputes – Not just a Question of Law
Commercial & Industrial Activity
Agreements & Contracts Mergers, Acquisitions & related Transactions
Buying, Selling, Leasing, Borrowing, Lending or Investing
A situation where facts, people and organisations do not agree, or where financial or other business related behaviour may not comply with expectations.
What & How Why & Who
Accounting/ Commercial Issues
Legal Issues
Legal Team+Effective Dispute
Resolution=Expert Witness
Effective Dispute Resolution
10
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 11
Structured Approach for Dispute Resolution
Identification of key issues
Knowledge of court procedures & evidence
Presentation of information & expert witness assistance
Interpretation of information
Data management for discovery process
Unique Skill Sets
Blend of forensic accountants, lawyers & personnel with law enforcement background
A Forensic mindset
Accounting issues have to be approached in a manner consistent with the expectations of a court of law. Experience in international arbitration and dispute resolution.
Leveraging Technology
Use of forensic data analysis tools to sift through millions of lines of data to determine key accounting issues & backup assertions in plaints or contentions.
Expert Witness – ‘Opinion Matters’
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Ensure the evidence is correctly understood
When - Expert Witness ?
13
Key areas of the case are to be covered by expert
evidence
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Why - Expert Witness ?
14
Expert witness, particularly accountants advising on quantum,
can add value to settlement negotiations.
This could involve analysing
Nature of the claim and identifying those areas where it can be
improved
Aspects which will be vulnerable to evidence provided by the other
party
EXPERT FORENSIC SKILLSET
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 15
How Expert Witness can be Beneficial?
Outside of fraud, financial disputes that require complex quantification modelling or ‘what if’ calculations are those in which experts will be
most beneficial. Such experts would be best used providing a critical assessment of the facts and assumptions underlying the loss as well
as the quantification itself
In relation to forensic accounting, it is those cases where the issue of quantum is most difficult to resolve and where the
calculation of the amounts of damages may be very complex
F-Tech Capabilities: Data Analysis Digital Data Recovery Electronic Data Recovery
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Independence – The Key Criteria
16
Whilst the parties to the dispute are essential to the factual background and impacts on the business, it’s not unusual for them to become emotionally involved in the proceedings.
Equally, the advice of their incumbent accountants or tax advisers can be tainted by the importance to them of focusing always on doing their best to support their client
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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© 2011 KPMG, an Indian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a
Swiss Cooperative KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss Cooperative
Thank you!Deepankar SanwalkaHead – Risk Consulting , KPMGe-Mail: dsanwalka@kpmg.com Tel: +91 (124) 307 4302Mob: +91 9810184390
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