Arbitration, obviously. Or is it?Hanenburg-Yntema Fonds – Leuven - 14 March 2012

Prof Geert Van CalsterLeuven law gavc@law.kuleuven.be

Overview of Presentation

• Intro – what’s in a name• Arbitration, obviously.• Or is it?• Conclusion

‘ADR’ and arbitration

ADR and arbitration

‘Alternative’: ie alternative to ‘litigation’ i.e. the courtsA‘DR’: various methods:

- Mediation (with neutral third party)- Arbitration (with neutral third party)- Negotiation (without neutral third party)- ‘Collaborative law’ (with a larger group of

professionals) (mostly confined to family law; quid insolvency…?)

‘Arbitration’• Not new: see already the 1958 New York

Convention on the recognition and enforcement of foreign arbitral awards

• Two broad categories: – ‘Investor-State arbitration’, a better name for

which is Investor-State dispute settlement: the novelty lies in standing under international law, rather than in the ‘arbitration’ element

– ‘Commercial’ arbitration, whether international or national

‘Arbitration’

• Both categories are subject to criticism

• Today’s focus: commercial arbitration • Advantages of arbitration now

seemingly so obvious that arbitration clauses are included matter of factly in nearly all contracts of a decent size

Arbitration, obviously.• Choice galore:

• Choose your arbitrators (know-how and experience; but also character and MO)

• Choose your law• Choose your procedure, which on the

whole can be more flexible than in litigation (but see: standardised rules of ICSID etc)

Arbitration, obviously.

• Speed: Belgian and Italian torpedos not possible • Especially for jurisidictions with trial by jury, and

with punitive damages: decreased likelihood that the findings will be ‘over the top’

• ‘Equity’ or fairness: the ‘good’ arbitrator (see choice, above) will tend not to let the case be determined by technicality, or obsession with detail, but rather with a ‘fair’ outcome given the spirit of the contract

• ! The private character of the proceedings (idem of course for investor /State)

Or is it?

Or is it?

Choice of arbitrators: Independence and impartialityThe Solomon effect Cost? Not necessarily lower, especially with three-arbitrator panel

Or is it?

Speed? But very limited rights for appeal Speed? But lack of formality might mean quite the oppositeSpeed? But if you do appeal, you may find yourself involved in even lengthier legal battles than those you wanted to avoid.Speed? But enforcement abroad may be an issueSee in this respect also the West Tankers issue (case details on gavclaw.blog)

Arbitration, obviously. Or is it?Hanenburg-Yntema Fonds – Leuven - 14 March 2012

Prof Geert Van CalsterLeuven law gavc@law.kuleuven.be