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Third Annual Conference of the Atlanta International Arbitration Society
Enhancing Business Opportunities in Africa: The Role, Reality and
Future of Africa-Related Arbitration
2-4 November 2015
“Rapporteur Reports on Conference Proceedings”
As was done for the first two conference in 2012 and 2013, selected law schools were invited to send a
limited number of students to participate in the proceedings as guests of the Society. Volunteers from
among the students served as attentive rapporteurs for each session. Their reports were edited by
several members of the Society’s Board of Directors for publication on this Society website. Some 20
students from 6 law schools were present during the conference (class times excepted), adding their
eager inquisitiveness and spark and future-oriented mindset to the energy of the Conference and
enhancing their legal education. Below is the collated version of the edited reports, presented in the
order of the Conference schedule. The reports were edited by AtlAS Board members Stephen L. Wright
of Taylor English Duma LLP, Allen L. Hirsch of Arnall Golden Gregory LLP, and Hon. Dorothy Toth Beasley
of Henning Mediation & Arbitration Service, Inc. Technical assistance was supplied by Rolanda Stroman,
Erica Stoddard, and Shaw Strothers.
Table of Contents
November 3 Page
8:45 – 9:00 a.m. Opening Remarks……………………………………………………………………………. 1
9:00 – 10:30 a.m. Doing Deals in Africa: What is Different and What is Not................. 2
11:00 a.m. – 12:30 p.m. Africa Rising? Prospects for the Emerging African Arbitral Venues.… 7
12:30 – 2:00 p.m. Luncheon Keynote Speaker……………………………………………………………. 14
2:00 – 3:30 p.m. Striking the Legitimate Balance between Host-State Sovereignty and
Investor Needs: Perspectives from and regarding Africa……………… 18
4:00 – 5:30 p.m. Compensation, Damages and Valuation in International Investment
Law and Arbitration…………………………………………………………………….. 24
November 4
9:00 – 10:30 a.m. Asia and Africa: Trends in the Developing East-South Dispute
Resolution Axis……………………………………………………………………………. 29
11:00 a.m. – 12:30 p.m. Arbitrating with the State………………………………………………………………. 37
12:30 – 2:00 p.m. Luncheon Keynote Speakers………………………………………………………….. 45
2:00 – 3:30 p.m. Concurrent Session “a”: Resolving Disputes in the Energy and
Natural Resources Sectors…………………………………………………………… 49
Concurrent Session “b”: Dispute Prevention, Management and
Resolution of Infrastructure and Construction Projects…………….. 57
4:00 – 5:30 p.m. Diversity and Inclusion in International Arbitration Appointments… 67
© 2014 Atlanta International Arbitration Society, Inc.
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Monday, 3 November 2014 8:45 – 9:00 a.m.
Opening Remarks
Rapporteur: Brock Perry, Georgia State University College of Law, Atlanta, Georgia.
Glenn Hendrix, Partner at Arnall Golden Gregory LLP and President of the Atlanta
International Arbitration Society (AtlAS), opened the conference by discussing the importance
of the conference subject matter. Africa has been referred to as the “Investment Center of the
Twenty-first Century,” and its Gross National Product has tripled over the last decade. Mr.
Hendrix pointed out that even though the media focuses on the sensational, many countries on
the continent are stable and growing, with Africa having seven of the ten fastest growing
economies in the world. A continent with growing economies will experience an increase in
disputes and the need for arbitration.
Mr. Hendrix thanked all partners to the conference and those who helped to organize it,
noting that AtlAS is an all-volunteer organization. He expressed optimism at growing the
international arbitration footprint in Atlanta, with endeavors such as the International Arbitration
Center at the Georgia State University College of Law, which was initiated by Professor Douglas
Yarn and directed by Shelby Grubbs, Esq., of Miller & Martin. Mr. Hendrix discussed the
conference as just one piece of a larger series of events focused on Africa this year, titled “Africa
Atlanta 2014.”
He introduced Dr. Jacqueline Jones Royster, Dean of Georgia Technical Institute’s Ivan
Allen College of Liberal Arts, Atlanta, who further explained the “Africa Atlanta 2014”
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initiative as helping the Atlanta community rethink its relation with the continent. This initiative
entails a series of cultural and economic events and ties with the continent and includes more
than 50 partners. Dean Royster is excited for this initiative to bring “possibilities forward that
we hope to embrace.”
Monday, 3 November 2014 9:00 – 10:30 a.m.
Doing Deals in Africa: What is Different and What is Not
Rapporteur: Brock Perry, Georgia State University College of Law, Atlanta, Georgia.
Program Chair: Roy E. Hadley, Jr., Esq., Thompson Hine LLP, Atlanta.
Panelists:
Phillip Aliker, Esq., Tanfield Chambers, London
Edward W. Fashole-Luke II, Esq. Luke & Associates, Gaborone, Botswana
Elikem Nutifafa Kuenyehia, Esq., Oxford & Beaumont, Accra, Ghana.
Mr. Hadley opened the conversation with the statement, “Africa is a continent,” reflecting
misconceptions people hold about Africa and emphasizing the complexity of Africa, with
different countries, laws, customs and practices.
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Mr. Aliker detailed the legacy of English law and its significance in international arbitration
with respect to Africa. He discussed the impact of colonization, with members of the
Commonwealth of Nations (former British colonies as well as some non-British colonies)
utilizing English law. Mr. Aliker emphasized that one would be remiss to venture into Africa
without understanding English law. Some African nations have enacted laws in certain spheres
that say English law governs, leading to conflict when an interpretation of English law affects an
identical African law. He also brought up a common trend in African law, to “cut and paste”
certain provisions from other sources. He cited Section 65 of the Uganda Contracts Act as an
example of one directly copied from English law. Mr. Aliker noted the problem that occurs
when particular provisions are copied but certain provisions, which work hand-in-hand with the
included provisions, are left out.
Mr. Fashole-Luke discussed doing business with Africa, emphasizing the enormous
economic potential developing across the continent. Public infrastructure investment in areas
such as agriculture and telecommunications continues to boost economic growth. He highlighted
Nigeria as a breeding ground for an entrepreneurial spirit and a location with a high return for
investment. Mr. Fashole-Luke called the continent the last of the final frontiers and spoke of the
enormous success companies could have by doing business and investing in the continent.
Mr. Kuenyehia offered the perspective of a transaction lawyer, noting that if he does his
job right, there is no need for an arbitrator. With his experiences in Ghana, he has seen a
massive change in ten years. Previously, there had been a fear about whether a company could
sue the government successfully in court. That fear has been alleviated recently. Ghana has seen
a tripling in foreign direct investment over the past decade and a record of good governance,
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fueled by a press more willing to expose corruption and hold the government accountable.
Corruption is still present, however, by both locals and foreign nationals. In some places,
corruption has worsened with recent discoveries of natural resources.
With respect to African legal systems, Mr. Kuenyehia noted that many countries have
beautiful laws on paper, but legislators and administrators are not working together. A country
may “cut and paste” laws without knowing the reasons the original law was passed. He cited the
Ghana Venture Capital Trust Act as an example: he personally talked to a member of the Ghana
Constitutional Affairs Committee who admitted he had no clue what the law was about.
Main issues discussed by the panel included political stability, the role of arbitration
provisions in contracts, doing business in Africa, and the role of China in African trade and
development.
During the question and answer period, the first topic brought up was political stability and
the perception of corruption. Mr. Aliker said there is much less political instability in Africa,
even if the media shows turmoil, and that Africans are demanding more from their governments.
He noted, however, that corruption is a real problem. A prevailing view is that most politicians
are corruptible and people will take advantage of an unstable situation. Mr. Fashole-Luke
stressed that his home country of Botswana, where many positive things are occurring, has zero
tolerance for corruption.
Another issue raised was how to draft contracts and what key things to think about when
including certain provisions, including arbitration clauses. Mr. Kuenyehia spoke of experiences
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where international lawyers scare off clients with unnecessary provisions. He cited the strong
tradition of precedent in Ghana and the record of the Ghanaian government honoring its
commitments in undertakings. He talked about clients being nervous of having a contract
governed by Ghanaian law, with 9 out of 10 preferring English law. Mr. Aliker noted, with
respect to arbitration clauses, that the European Union and countries like Japan and South Korea
have begun to include local seats in their arbitration clauses. This is an attempt by developed
countries and economies to develop institutions on the African continent. He noted as a case
study the example of Mauritius, which allows an additional appeal to the Privy Council in
England as a way for people to feel secure when arbitrating in Mauritius. Mr.
Fashole-Luke also praised Mauritius, where three of its Supreme Court justices participate in
commercial arbitrations.
With respect to China’s involvement on the African continent, there was a consensus for the
preference of doing business with America over doing business with China. Mr. Kuenyehia
talked about China being flexible to meet certain objectives and providing cheap financing. On
the other hand, Chinese businesses typically provide their own labor and disobey local laws. Mr.
Fashole-Luke discussed problems with the standard of workmanship in Chinese construction
projects. For example, the national stadium in Botswana was more than four years behind
schedule, leading Botswana to cancel that contract with the Chinese. He observed that the
Chinese are more interested in accessing the natural resources in Africa than in the African
people themselves, citing Chinese business with Zimbabwe as an example. Mr. Aliker
mentioned that many businessmen and governments do not understand the ramifications of
agreeing to clauses that put arbitration in Beijing, which puts African companies at a
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disadvantage. He wondered whether America’s economy could match China’s endless supply of
money.
Mr. Hadley summarized this panel discussion as teeing up many issues discussed in previous
sessions. A common piece of advice from all three panelists was for American businesses to
utilize African lawyers who understand the laws of their particular country. Mr. Fashole-Luke
specifically suggested forming alliances with African lawyers to better understand the
jurisdictions. A main question of inquiry was how better to attract international arbitration to
Atlanta. Mr. Kuenyehia noted that historic ties with London have helped make it a natural venue
for arbitration, but if American investors do business with Africa, provisions can be inserted in
contracts to get more arbitration to Atlanta. Mr. Aliker stated there is no substitute for business
people going out and looking at opportunities in Africa for themselves. Tying in Atlanta as a
place for international arbitration follows increased business activity. Mr. Fashole-Luke also
noted it is tough to compete with the likes of Paris, London, and New York, but having judges
dedicated to commercial law would certainly help.
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Monday, 3 November 2014 11:00 - 12:30 pm
Africa Rising? Prospects for the the Emerging African Arbitral Venues
Rapporteur: Heather Michelle Miller, John Marshall Law School, Atlanta, Georgia
Program Chair: Philip W. “Whit” Engle, Engle ADR; Chair, North American Branch, Chartered Insitute
of Arbitrators, Atlanta, Georgia
Speakers:
Bernadette Uwicyeza, Secretary General, Kigali International Centre of Arbitration, Kigali
International Arbitration Centre (KIAC), Rwanda
Grant Herholdt, ENS Africa, Johannesburg, South Africa
Charles Adeyemi Candide-Johnson, SAN, Strachan & Partners, Lagos, Nigeria
Paul Ngotho, Ngotho Property Consultants Ltd., Nairobi, Kenya
Roland Abeng, The Abeng Law Firm, Douala, Cameroon
Philip W. “Whit” Engle
“The days of Paris and London as the only default declared options are over.” A number of venues in Africa
have emerged recently.
Bernadette Uwicyeza
a. Need to build credible, legitimate institutions to preside over disputes outside of national
courts..
b. Kigali International Arbitration Centre (KIAC) was established under auspices of the Rwanda
Private Sector Federation with the support of the Government of Rwanda. The Centre is an
independent body as stipulated by an act of parliament of 2010. The Centre’s vision is to be the
regional choice for commercial dispute resolution. It administers cases unde KIAC arbitration
Rules and UNCITRAL Rules. The KIAC approach:
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a. Setting standards - Legal framework – UNICTRAL Model Law governing arbitration.
Modern set of arbitration rules matching with international standards. Accreditation at
a minimum requirement level for admission on domestic panel of arbitrators.
b. Building stakeholders’ capability - Training lawyers and judges, legal and procurement
officers in government agencies. In-house counsel. Media training.
c. What Rwanda can offer - Political stability. Lowest country crime rate in Africa.
International concerns are that one can work all night and go to hotel without fear of
crime. Good governance as a country. Easy access as a flight destination across Africa.
Easiest country to do business in Africa.
d. Raising local and regional awareness - Internet connectivity is among the top 3 in
Africa; Located centrally, bordering three countries in East Africa and the DRC.
Bilingual country (French and English). Government supports laws and policy.
e. Building on what Rwanda can offer -
i. Partnership with other institutions. Have trained 300 professionals in
Arbitration. Open to regional participation with Burundi, Uganda, and Kenya;
Projects of cooperation with Congo Brazzaville, Niger. We need to work
together as a region.
ii. Knowledge sharing & Learning from others - Organizing knowledge sharing
forums, mentorship program, learning from others, learning trips, joint projects,
and partnerships.
Grant Herholdt
a. Arbitration Act of 1965 – It has not been updated in a while, but updating is imminent. There
has been a delay implementing it but it is on the way.
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b. South Africa has offered business a lot due to the World Cup. Courts are independent and very
unlikely to interfere with arbitration. There are regional offices of multi-national companies.
It is an attractive tourist destination. Law is similar to that of the USA. Relative stability is
present. There is some concern about the investment environment due to cancellation of
treaties with Germany and Switzerland.
c. Legal & Academic community - Very competent legal fraternity in general. Large investment
of big multi-national firms. In-house counsel have a strong preference for arbitrations. There is
an increasing focus on international arbitration at university.
d. South African Law Commission strongly recommends the development of international
arbitration facilities and a new International Arbitration Act. When it comes, it will come in a
big way.
e. Follow-up comments: Bernadette Uwicyeza noted that a there is need for both arbitration and
courts in South Africa.” South Africa is working to catch up to Mauritius as a venue of choice.
Charles Adeyemi Candid-Johnson
He is one of the Lagos Arbitration Center creators in Nigeria. It was created by the initiative of a political
leader who is a lawyer himself and has knowledge of arbitration. The King is behind transition. Lagos
State has a larger GDP than many neighboring countries. The law followed business. It is still slightly
less than the state of the art but still very strong.
a. Nigerians will insist on policies that promote business to stay in Lagos vs. London once
they get larger. The Arbitration Institute helps stop the chilling business development.
Nigerian local entrepreneurs are focused on “indigineousization” that is not
exploitative.
b. Infrastructure (jokingly), “We have running water, electricity, English and French
speakers, mortgages, insurance, etc.” Nigerian goals are to build on Lagos and State
10
government foundation to strengthen local Nigerian rules and make it easier to come
and work in Lagos and the region.
Paul Ngotho
He is not a lawyer but a businessman in surveying. In the 19th century the church believed that the Earth
was the center of the world. Two international centers (London and England) operate as the center of
international arbitration. Mr. Ngotho hopes to do better than Galileo Galilei, who according to the internet
was condemned as a heretic, and spread arbitration. Narobi is a natural center.
a. Choice of Venue in Arbitration – has costs. The seat of arbitration is not the venue. The seat of
arbitration means the judicial seat. Seat is the law applied. You can hold an arbitration in
Nairobi, so the venue is Nairob, but at the same time you can use the American law of contract
and enforce that award in France.
b. Kenya offers Arbitration - Kenya is the only country in the world that provides for arbitration
in its constitution. Also, it is a signatory to the New York Convention. Kenya has robust rules
of civil procedure. Awards from Kenya can be easily enforced internationally. Many judges
are trained in arbitration. Some are arbitrators themselves. Kenya has extensive expertise in
arbitration. There is a domestic market in the country. There are over 7000 arbitrators in
Nairobi and Kenya. Kenya can be seen as the Switzerland of Africa. The Kenyans have
brokered many intra-African State disputes. It is quite expensive to move all parties to New
York or London or Paris. It is less expensive to move arbitrators among the disputing
countries. There are no direct flights to USA.
c. Tourism - Nairobi is the only city with a national park in it. There are five-star hotels.
Translations can be carried out in any language and done simultaneously. There are many
international restaurants and even an Irish Pub. Nairobi has a favorable climate year-round.
Nairobi is the undisputed investment and arbitration center of the region and the African
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continent. It has the sixteenth largest economy in the world. There are regional offices of many
western companies, including Pepsi and Coca-Cola. It is a United Nations center.
Roland Abeng
a. OHADA is a system of business laws and implementing institutions adopted by, currently, 17
countries in West and Cental Africa which comprise the OHADA Zone. OHADA, created in
1993 in Mauritius by treaty, is a French acronym which translates into English as
“Organization for the Harmonization of Business Law in Africa.” It is open to all States,
whether or not members of he Organization of African Unity. French is the official language of
OHADA, with English, Portuguese, and Spanish also spoken. Until 1999, very few OHADA
States had arbitration-related legislation. In the 1990s, OHADA countries ranked highest in
corruption in the world, but recently there has been much improvement.
b. OHADA countries have to step up their game. Corruption has been minimized by action
brought about by the OHADA States. Before OHADA, arbitration took place in Paris and it
took four years. Then the parties had to go to Cameroon or Gabon courts to get the award
enforced. OHADA has changed all of that. OHADA changes bring: (a) competence of
stakeholders; (b) an ADR mindset (getting out of conventional litigation); (c) a general rule of
law and doing business climate; (d) political will of State parties; (e) reduction of the
strong-man syndrome, the idea that leaders are above the law, and there are fewer political
appointees; (f) national administrative courts prevail in disputes related to public entities.
Arbitration reduces corruption in OHADA.
Summary of Points Made
a. The days of Paris and London as the only default declared options are over!”
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b. A number of arbitration venues in Africa have emerged recently, challenging Paris, London,
and New York’s dominance.
c. Local capacity of some African countries is already well established with regional cooperation
and collaboration, while other countries are still developing. Some regions have further to
develop, but are showing good signs.
d. Business contracts use the forum selection clauses for local arbitration centers.
e. Georgia State University College of Law in Atlanta, Georgia, United States of America,
provides a new arbitration center.
What issues emerged
a. Need to build credible institutions to preside over disputes out of national courts.
b. Choice of venue in arbitration has costs.
Audience Question – Arbitration clauses in newer contracts including Lagos as a venue. Are these
arbitration centers engaged in a Darwinian struggle, or is the pot getting bigger to support all of these
centers?
a. Philip W. “Whit” Engle - Disputes have traditionally been resolved where the ADR
centers were located. Now there is a growth of infrastructure closest to the dispute to
resolve disputes.
b. Roland Abeng - There’s room for everyone. There are lots of cases.
c. Grant Herboldt – There is possibly enough room, but times are lean now, struggling
regionally although there is a tendency toward regional centers.
Audience Question - What of the infusion of capital from China? To what extent do the Chinese companies
put themselves in a position of power to arbitrate?
a. Chinese investors go to judicially weak countries. They build weak buildings. There will be
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litigation. Chinese do not arbitrate usually. When they do, they ask the arbitrator to talk to the
judge (questionable ethics).
b. Charles Adeyemi Candide-Johnson – He has seen some 3-4 disputes from Chinese
companies attempting to arbitrate in Nigeria, and their biggest concession is to go to London.
They are not pulling the arbitrations back to China.
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Monday, 3 November 2014 12:30 – 2:00 pm Luncheon speaker: Honorable Judge Charles N. Brower
Rapporteur: Angela Regina Garrett, John Marshall Law School, Atlanta, Georgia Introduced affectionately as the “Reigning King of International Arbitration,” The Honorable Judge Charles N. Brower is a Judge of the Iran-U.S. Claims Tribunal, and member of 20 Essex Street, which hails itself as a leading commercial barristers’ chamber. Judge Brower served as Deputy Counselor to President Ronald Reagan until 1988 when he returned to White & Case LLP until joining the 20 Essex Street Chambers. Judge Brower also currently serves as ad hoc judge for the World Court. Judge Brower provided for present and future arbiters some lessons gained over his many years of experience. These are important as commercial arbitration increases on the continent as 10 countries have adopted Bilateral Investment Treaties (“BITS”) while ICSID proceedings have tripled over the last three decades. Increasing investment opportunities, as evidenced by President Obama’s welcoming of leaders from across the African continent to the nation’s capital for a three-day U.S. Africa Leaders Summit, have lead to the expansion of arbitration events, centers and conferences in Africa, and the recent trend of investment opportunities. While these lessons were learned around the world, Judge Brower finds them confirmed by his efforts as an arbitrator in Africa. Lesson 1: Be Very Careful In Choosing Your Local Partner
Case in Point: Tanzania Electric Supply Company Limited v. Independent Power Tanzania Limited In 1998, ICSID registered commencement of arbitration between claimant, Tanzania Electric Supply Company Limited, (“Tanesco”) and respondent, Independent Power Tanzania Limited (“IPTL”). The investment agreement provided for a 3 person international tribunal including Judge Brower. As part of his role as arbitrator, Judge Brower worked with a local partner to facilitate the proceedings. A final award issued in 2001. Seven years later the local partner to the Judge had become an adversary.
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The 2001 award was not enforced by courts in Tanzania resulting in return of the proceeding to arbitration for non-payment. This prompted TANESCO and IPTL to seek disqualification of Judge Brower due to his local partner’s alleged influence as tainting the Judge’s ability to provide an unbiased judgment. Before the challenge to Judge Brower was decided, he respectfully resigned. Additional complications arose afterwards including a contest over corporate authority and alleged misallocation of $122 million in bond issue proceeds that were to be used to purchase the shares of one of the entities involved. At the end of the day, the international proceeding had to be abandoned. The tribunal issued an order discontinuing the proceeding pursuant to ICSID Arbitration Rule 44 which governs requests to dismiss ICSID proceedings. Judge Brower, shared that this controversial and highly publicized case taught him that he had to be very careful in choosing his local associates. Making the wrong associations early on could fetter your ability to arbitrate in a number of lucrative matters simply because of that association. Lesson 2: Sometimes it becomes very difficult to get a host
state to settle a dispute even after it has agreed to do so. Case in Point: Manufacturers Hanover Trust Company v. Arab Republic of Egypt and General Authority for Investment and Free Zones Background: Plaintiff bank engaged Judge Brower as a Party Representative to pursue an action for loss of its investment after the Egyptian government attached a regulation to banks operating in an area that was to be free of such regulations. The bank faced substantial interest and charges as a result, the bank filed suit, but the government refused to submit to jurisdiction. Luckily for the bank, a law school classmate of Judge Brower happened to be the American Ambassador for Egypt. The Ambassador was able to use his connections to eliminate resistance to jurisdiction, at least in the first instance. But consent to jurisdiction was then annulled after the government agreed to resolve the matter in an ICSID proceeding. Judge Brower expressed his frustration in having to argue an issue that was supposed to have been conceded. This case did not result in a published award, yet a number of qualified sources agree that the
16
fact that arbitral proceedings continued implies that jurisdiction was confirmed, making this a very fundamental case in arbitration history. Lesson 3: It’s hard to determine the prevailing party when a case is settled.
Case in Point: Piero Foresti, Laura de Carli and others v. Republic of South Africa Background: This controversy attracted NGO’s which joined in ICSID proceedings along with the Italian claimant who were mining dimensional stone in South Africa and alleged that the respondent was in breach of BIT prohibitions on expropriation. A favorable settlement offer outside of the ICSID proceeding was made. The claimants then filed an ICSID Rule 44 request to dismiss the proceedings. ICSID Arbitration Rule 44 provides that a party cannot discontinue a case without agreement of the other parties. The respondents refused agreement to the discontinuing of the case, without payment of its legal fees. The tribunal, including The Honorable Charles Brower, spent 3 days in The Hague arguing over costs and bribes that were reportedly requested. Ultimately, an agreement was made for plaintiffs to pay €400,000. Lesson 4: Sometimes a host state can be persuaded to sway its hand.
Case in Point: Vacuum Salt Products Ltd. v. Republic of Ghana Background: On May 28, 1992, Vacuum Salt Products Limited, a company incorporated in Ghana and co-founded by a Greek company, instituted ICSID arbitration proceedings against the Government of the Republic of Ghana. The dispute related to the development of the salt production and mining facility in Ghana. A jurisdictional issue arose as to whether the claimant was a national of a foreign country for purposes of the ICSID convention. The ICSID panel, including Judge Brower, decided that because 80% of claimant’s shares had been transferred to foreign control, the convention applied despite the company having been formed under Ghana law. Ghana was persuaded to abide by the determination of ownership and participate in arbitration. Though the parties stipulated that a senior British jurist was to preside over the arbitration, he was forced to
17
recuse himself. The matter was later dismissed for want of jurisdiction. Lesson 5: You just may get lucky when a project falls apart.
Case in Point: Ridgepointe Overseas Developments, Ltd. v. Democratic Republic of the Congo and Générale des Carrières et des Mines Background: A number of foreign investors, including a claimant, were singled out for criticism in a special UN report on the illegal exploitation of natural resources in the Congo. The companies listed as claimants entered into a contract for mining. Approximately $750 million was spent on acquiring and developing property in the DRC. But the venture had its licensed revoked by the government for refusing to modify the agreement. In response, the claimant commenced action against the DRC government before the ICC. Complications arose when the government established a new regulatory scheme to ensure Congo mines benefit the nation. The government further sought to repeal the authority allowing license for the project(s). Naturally the claimants were unhappy and the value of their investment quickly began to diminish. In the end, the claimant mining company settled for $1.25 billion (USD) including costs for damage to the company’s reputation in the mining world. The driving force: An Iranian natural resources company, which was an adverse party in the suit offered to take over the project in exchange for the settlement award. The claimant received $750 million in cash and the rest was pooled into a settlement fund. Other Helpful Practice Views from Judge Brower: Having a
friend in Africa
• Africa is looking for broad, deep and high level experience in actually handling international arbitration cases
• The Finance Minister does the hiring (looking for the lowest price)
• Don’t be penny wise and pound foolish • Claimant may appoint a “heavyweight” arbitration
representative, so the host state may appoint its own “heavyweight” defensively.
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Monday, 3 November 2014 2:00 – 3:30 p.m.
Striking the Legitimate Balance between Host-State Sovereignty under Investor Needs:
Perspectives from and regarding Africa
Rapporteur: Brittany DeDiego, Georgia State University College of Law, Atlanta, Georgia
Ms. Rukia Baruti, Managing Director, African International Legal Awareness (AILA),
London, served as mediator and introduced the other members of the panel.
Professor Tunde Ogowewo, of Kings College in London, spoke about promoting arbitral
legitimacy through domestic transparency and accountability. He addressed the issue of arbitral
legitimacy in two dimensions. First, at a micro level, addressing the issues of determinacy and
coherence, and then at a macro level, addressing accountability and transparency.
At the micro level, the lack of transparency can lead to inconsistent arbitral decisions.
Professor Ogowewo suggested that in order to reduce the indeterminacy in arbitral awards,
arbitrators should use case law in making their awards. The issue of coherence is important
because investors, as well as host states, demand some degree of predictability when agreeing to
arbitrate. At the macro level, arbitrators should allow third parties a right to participate in
proceedings. Also, in order to strengthen legitimacy and the perception of it, diversity among
arbitrators must be increased, including more women on tribunals.
Professor Ogewewo then itemized four suggested reforms to promote arbitral legitimacy
among the host countries, the investor, and the general public: first, change the language of the
investment treaties to create better defined rights to decrease indeterminacy; second, impose
barriers on the path of investors who seek to bring frivolous claims; third, create safeguards in
the arbitral process so as to enhance determinacy and ensure jurisprudential coherence. This
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reform would include changing rules and creating an internal review mechanism in investment
treaties so that the arbitral institution can issue interpretive guidance.
Professor Ogowewo focused his argument on the fourth proposed reform. He believes that
perceived legitimacy can be promoted by anterior initiatives at the domestic level within the host
States by creating a transparent system for designating members of the ICSID panel according to
clear benchmarks. The current system allows each host State to nominate up to four people to
each panel. Contracting States in Africa tend to nominate civil servants and people lacking real
expertise in international investment arbitration. Professor Ogowewo argues that expertise in
public international law should be a prerequisite for designation to the panel.
Another problem of legitimacy is that many countries (such as Guinea, Benin, Tunisia, and
Uganda) do not renew or replace panel designations after their appointments have lapsed. It is
very important to improve the quality of nominees chosen for the ICSID panel because this
information is publicly available. The same issues in ICSID panel nominations also spill over
into host States’ choices in legal representation, which may be based on cronyism or thrift. This
in turn leads to poor arbitrator selection by the host State.
In conclusion, Professor Ogowewo opined that host States need to adopt a model of minimal
confidentiality in international commercial arbitration, in order to enhance the ability of the host
States to exercise their party autonomy in the choice of arbitrator. This can be achieved by
bringing to their attention more objective criteria for their evaluation of the performance of
arbitrator(s).
A question arose after this presentation about the social capital of law firms and the need for
diversity on arbitration panels, and how to make a connection between the two. Professor
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Ogewewo responded that host States must make institutional changes and publicize this to other
players. Diversity among arbitrators and the failure of legal representation are long-term
problems. Procuring the right arbitrator for international commercial arbitration should not be
based solely on the pedigree of the law firm.
Judge Charles N. Brower, of the 20 Essex Street Chambers in London and Judge of the Iran-
U.S. Claims Tribunal, addressed the need for host States to “let go” of the arbitral process. In
recent years there has been increased opposition to investment-treaty arbitration, but Judge
Bower believes there is a desire to recapture the arbitral process, and host States should not move
away from this process.
First, the United States, along with its NAFTA partners, issued an alleged “interpretation” of
the terms “fair and equitable treatment” and “full protection and security” in Article 1105,
declaring that they meant no more than the customary international law standard for the
treatment of aliens. This change raised the standard for the treatment of aliens, which goes above
the standard established by international law.
Second, the U.S. Model Bilateral Investment Treaty (BIT) includes an Annex A, titled
“Customary International Law,” in which “[t]he Parties confirm their shared understanding” of
the full security protection in a different way than in Article 5 and 6. The Model BIT limits
arbitral issues. Under Article 21(2), a claimant alleging a taxation issue is barred from arbitrating
the claim unless is has first been submitted to the two disputing parties’ “competent authorities.”
There are numerous other Articles in the Model BIT that also limit parties’ ability to arbitrate
and take away the power of the arbitral tribunal.
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Third, the emerging Transatlantic Trade and Investment Partnership (TTIP) would greatly
increase global trade. This partnership has been placed on hold in order to allow the public to
respond in an online forum. Recent developments in the Comprehensive Economic Trade
Agreement (CETA) between Canada and the EU have been seen as a blueprint for TTIP. The
final CETA agreement was finalized on 5 August 2014 after more than five years of
negotiations. However, the agreement has not been ratified as planned because Germany views
CETA as a structurally “mixed” agreement. The EU insists that it has sole jurisdiction over the
approval of CETA. The discussions concerning both CETA and TTIP are ongoing.
After the presentation, a question was raised about what the next ten years will look like when
choosing law firms for arbitration. Judge Brower answered that it is difficult to say, but that it is
very important to use experienced people in international arbitration cases. Right now, if it is the
finance minister making the decision on a law firm to represent a state in arbitration, the
minister’s biggest concern is saving money and looking for the lowest bid. This economic
decision backfires, and the State ends up with a huge award against it because of poor
representation. This results in fewer States choosing to participate in international commercial
arbitration.
Mr. Karel Daele, from the Mischon de Reya, London, focused his presentation on how
Africa has fared in investment disputes. First, he emphasized some statistics about contracting
ICSID states. Currently, 45 of the 54 African States have signed the ICSID convention. Ethiopia,
Guinea-Bissau and Namibia have signed but did not ratify it. Angola, Djibouti, Eritrea,
Equatorial Guinea, Libya and South Africa are economically important non-contracting States.
The 45 signatory African States represent only 28% of ICSID membership, but account for 23%
of all ICSID disputes. These disputes have resulted in 70 concluded arbitrations, of which 33%
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settled, 26% had the claims upheld, 26% had the claims dismissed, 12% had the cases
discontinued, and 3% had an unidentified outcome. These statistics indicate that only 25% of
claims against African States have been upheld and that States are faring better than investors.
Only twelve States have been found liable: Burundi, Gabon, Guinea, Liberia, Senegal,
Seychelles, Togo and Zimbabwe once each; Central African Republic, Congo Republic and
Tanzania twice each; Egypt three times.
Twenty-three States are involved in pending cases: Egypt, twelve; Gambia, Equatorial Guinea
and Guinea, three each; Algeria, Uganda, and Zimbabwe, two each. The remainder are one each
from Madagascar, Tanzania, Democratic Republic of Congo, South Sudan, Sudan, Burundi,
Cameroon, Nigeria, Niger, Mali, Mauritania, Senegal, and Liberia.
Damages awarded in arbitration also favor African States. There are currently 20 cases in total
in which, at some point, damages were awarded. The largest arbitral award, exceeding $100
million USD, was issued in Chemin de Fer v. Gabon. Such an amount is not the norm; in 65%
of cases African states had to pay less than $10 million USD, and of these awards, in 45% of the
cases the investors received less than 25% of the money they were seeking in the arbitral
process.
In conclusion, African States are faring well in arbitration. States are either not involved in
arbitration or found not liable. Even if the State is found liable, the award of damages is not
usually large.
Issues raised after the presentation involved the enforcement of the arbitral awards. Mr.
Daele did not focus his study on enforcement of arbitral awards in African States but
acknowledged that there are absolutely issues regarding this aspect of arbitration. For one thing,
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issues arise when States rely on immunity, making it difficult to enforce the award against the
liable State’s assets in another State.
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Monday, 3 November 2014 4:00 – 5:30 pm
Compensation, Damages and Valuation in International Investment Law and Arbitration
Rapporteur: Amin Sadri, Emory University School of Law, Atlanta, Georgia
Program Chair: Laura Hardin, Vice President, Alvarez & Marsal, Houston, Texas
Panelists:
Elizabeth Silbert, Esq., King & Spalding LLP, Atlanta, Georgia
Craig S. Miles, Esq., King & Spalding LLP, Atlanta, Georgia
Lisa M. Richman, McDermott, Will & Emory, Washington, D.C.
Summary
Damages are the most complicated part of any international arbitration claim. While a
petitioner may win a claim based on its merits, an unsatisfactory award of damages can render the
entire effort moot
Using a hypothetical case, the panelists considered five different topics regarding
compensation damages and valuation: identifying an appropriate expert, the evidentiary basis of
damages, the importance of time in valuation and damage assessments, the value of a persuasive
expert, and the most effectives means of witness presentation. As the panel progressed, it became
clear that the two concerns for damage calculations are the need for a good expert and the facts of
the case that are outside of your control. Below are some of the topics that were discussed on these
two points.
1. Choosing an Expert
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When looking for an expert, it is vital to find someone who has the ability to communicate
clearly. It is always possible that what would have been strong testimony leading to a favorable
outcome is lost simply because the expert was not able to clearly and adequately communicate. It
is ultimately through the testimony of an expert—not the parties or counsel—that hard financial
numbers are assigned that lead to favorable judgments. Because of this, both written and oral
communication skills are valued in an expert. It is the expert who will research the facts of a case,
draft a report, and potentially defend the merits of that report before the tribunal. If the expert’s
writing and speech is too technical, it can be a negative. On the other hand, a message without
substance damages the reputation of the expert, counsel, and a client’s case. It might be worth
considering the actual language that your expert speaks. Having someone who speaks the right
language can save time and money with translation, but also make for more nuanced testimony and
reports.
Another quality to consider is the type and degree of experience the expert has to offer.
Hiring an expert who is a leader in their field and respected in the legal community can help
persuade a tribunal and make a strong case that much better. A knowledgeable expert will know
how far their expertise can go, and when it is time to call in a forensic accountant or petroleum
engineer to answer questions beyond the scope of the expert. However, having all of that
experience comes at a cost. Certainly there are the dollars and cents to take into account, but time is
a commodity as well. If an expert has taken part in dozens and dozens of arbitrations in the past
years, how much time have they actually devoted to any single case? How much time did they
spending writing the reports for each of those cases? Frankly, the question is how much time can
they spend on your case if they have a backlog of others to address? This does not mean that an
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expert with more free time is necessarily preferable, but just offers another point of view to
consider when looking for an expert.
When hiring an expert, there is an entire set of support staff that comes along. Just like any
other field, having a strong support staff makes it possible for an individual to do the best job. For
this reason, it can be worth it to look and get to know an expert’s support staff. When it comes to
the day-to-day conversations or questions about having documents sent back and forth, it is the
support staff with whom counsel will be speaking. Likewise, familiarity can shed light on whether
your would-be expert and the support staff use best practices needed for a case. For example,
having an expert and staff who present the documents and data they relied on upfront to you
bolsters against any arguments concerning the veracity of information. Another example would be
whether they produce a 100-page or a 10-page report when your experience tells you it should be
50 pages.
In practice, there might be an expert you prefer working with for one reason or another.
However, working too often with the same expert can lead to questions regarding your relationship
with the expert. Then, when working on a case that might be more speculative than prior ones,
these facts might come up in cross-examination. Your opposition has the duty of countering all of
your claims and casting doubt where possible. It becomes easier when they can draw connections
between you, your expert, the testimony the expert provides, and the outcome of arbitrations. In
these cases, candor can serve as a means of avoiding any future problems.
Above all, never forget that a tribunal may sit and appear to be weighing the numbers
before them, but they are actually weighing the experts. Clear and convincing evidence backed by
strong data becomes unshakeable when coming from a good expert.
2. Considerations Once Arbitration Begins
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Having assembled the people necessary to present a strong case does not mean the
information is always there to do so. An anecdotal example was given of a case with good merits
that was represented by a well-known international arbitration firm with a good expert. However,
due to the nature of the claim, the expert’s damage calculations contained forward-looking damage
projections whose data was not as concrete as the presenting party might have liked. As a result,
while the tribunal ruled in their favor, it gave them only a fraction of the damages sought. When
seeking damages for actual bad acts that have been committed, it is clear what documents and
numbers you are looking for. Invoices, day rates, employee logins, and financial records provide
detailed records of what the damages were. However, what if the documents of the subsidiary
corporation you are relying on is just boasting to the parent company? Additionally, if the cause of
action takes place two years into the life of an asset projected to be in use for 20 years, it becomes
more difficult to provide those concrete numbers that tribunals would prefer. If damages involve
an industry with significant upfront costs, perhaps the establishment of an oil refinery for crude
produced in a foreign country, damages as to restitution may be far easier to prove. Time plays a
large role in calculating damage figures.
There is always the chance that after hearing from an expert for the petitioner and one for
the respondent, the arbitral tribunal could opt to appoint its own expert. This becomes even more
likely when timing issues lead to tribunal’s questioning the data before it. Barring any sort of
irregularity, an extra expert is overkill. By the time a third expert is called in to present the expert’s
side of the facts, the arbitral tribunal would have heard from not one, but two different experts who
have looked at the same data. Regardless of whether it ultimately helps or hurts the case, an extra
expert means hearing the information again for a third time. More importantly, this adds extra
costs that could have been avoided. One recommendation is to have the members of the arbitral
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tribunal put questions to the experts themselves. Addressing the tribunal’s concerns when they are
first raised can cut down on costs.
Conclusion
By no means is this an exhaustive list of everything that is necessary for damage
calculations, but it does highlight considerations. If nothing else, have a strong expert with the
ability to communicate the finer points of the technical data of the case. Make sure this person will
spend the necessary time on your case, one whose character is beyond reproach, and one who has
the support staff to back them up. Second, there are questions of timing that continue to be raised.
Whether it is a result of having too little facts or a case with significant speculative elements,
temporal considerations play a crucial role in obtaining a favorable ruling from the tribunal. This
can lead to the avoidable occurrence of a third expert being called in, resulting in extra costs that
neither side expected. Clearly, damage calculations are not as clear-cut as parties would like them
to be, but they play an essential role in the international arbitration process.
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Tuesday, 4 November 2014 9:00 – 10:30 a.m.
Asia and Africa: Trends in the Developing East-South Dispute Resolution Axis
Rapporteur: Sharece Thomas, John Marshall Law School, Atlanta, Georgia
Program Chair: Joan Grafstein, Esq., JAMS, Atlanta, Georgia
First speaker was Thomas R. Snider, a shareholder at Greenberg Traurig LLP in Washington, DC.
He practices international arbitration and other forms of complex cross-border dispute resolution
involving international and foreign law. He is experienced in state-to-state arbitration, international
commercial arbitration, international investment disputes, and U.S. litigation involving the Foreign
Sovereign Immunities Act. Among other publications is his “Resolving Trans-Boundary Hydroelectric
Power Project Disputes: The Indus Waters Kishenganga Arbitration,” 17 Int'l Arb. L. Rev. 58, 2014.
Mr. Snider spoke on arbitration between Asian and African parties. Trade and investment between
Asia and Africa have been growing significantly in the last ten years. China has been Africa’s largest
trade partner since 2009. Trade between Africa and China alone reached US$10 billion in 2000,
US$100 billion in 2008, and over US$200 billion in 2013. Comparatively, trade between the European
Union and Africa in 2013 was about US$137 billion, and trade between the United States and Africa
that same year was about US$96 billion.
In terms of investment, France and the United States are the two largest foreign investors in Africa
(as of 2011), followed by Malaysia, China, and India.
The rise of trade and investment between Asia and Africa inevitably increase cross-border disputes.
International arbitration will likely be the primary mechanism for resolving them. There already was a
tacit recognition of this at the Fourth Ministerial Conference of the Forum on China-Africa
Cooperation held in Sharm el Sheikh in November 2009. The action plan resulting stated that “[t]he
two sides agreed to encourage the usage of national and regional arbitration organs in resolving
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contractual conflicts between Chinese and African enterprises.” On the investor-state side, there are
already approximately 100 BITs signed between Asian and African countries.
Disputes between African and Asian parties are beginning to emerge in such areas as contracts,
(particularly in construction and infrastructure sectors), labor, environmental, maritime, shipping,
trademark infringement, and unlawful competition.
At least anecdotally, there is a sense among African parties that Asian parties typically prefer to
resolve large commercial and investment disputes with their African counterparts through negotiations,
relationships, diplomatic channels, or other informal dispute-resolution mechanisms. This seems to be
particularly true of Chinese state organs and state-owned entities. African parties appreciate these
informal dispute-resolution mechanisms, but there is some evidence that patience may be wearing thin
with respect to these approaches on the part of African parties and particularly African governments,
due in part to many African parties’ view that informal dispute resolution is more beneficial to the
Asian party.
As a result, there may be a growing willingness of African parties to resort to arbitration earlier on
in the dispute-resolution process. One recent case is suggestive. In August 2014, Chad announced it
was initiating an International Chamber of Commerce (ICC) arbitration against the China National
Petroleum Corporation (CNPC), a large Chinese state-owned oil company, in relation to environmental
damages allegedly caused by the dumping of excess crude oil by CNPC in pits. As a result of the
dumping, Chad cancelled CNPC’s licenses to operate at five drilling sites, and, rather than resort to
other dispute-resolution mechanisms or waiting for CNPC to initiate arbitration, Chad commenced
arbitration under the arbitration clause in the governing contract, seeking US$1.2 billion in damages.
Chad and CNPC thereafter reportedly reached a settlement in their dispute in October 2014, under
which CNPC agreed to pay Chad US$400 million for the alleged dumping.
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Another example involves the port at Djibouti. In July 2014, Djibouti commenced a London Court
of International Arbitration (LCIA) case against Dubai-based DP World, the operator of Djibouti’s
container terminal, alleging that the company secured the concession through bribery, an allegation the
company denies.
While not all the details of these cases are known and it is dangerous to draw conclusions from one
or two arbitrations, it is striking to see African states resorting to the proactive use of international
arbitration. The respondents in these cases are also notable – a large Chinese-owned state entity and a
formidable Dubai-based company. These cases may suggest some enhanced willingness among
African states to embrace international arbitration for resolving disputes with foreign parties generally
and Asian parties in particular.
The second speaker was Ucheora Onwuamaegbu. Esq. Mr. Onwuamaegbu is a resident of Lagos,
Nigeria. He provides advisory services to foreign investors and governments while also acting as
arbitrator in international disputes. For over a decade, Mr. Onwuamaegbu was a Senior Counsel at the
World Bank's International Center for Settlement of Investment Disputes (ICSID), where he
administered numerous arbitrations under treaties, national laws, and contracts. Prior to ICSID, he was
a lawyer at the United Nations Compensation Commission in Geneva, responsible for claims regarding
business losses by airlines and shipping companies and claims for lost bank remittances. Mr.
Onwuamaegbu serves as legal adviser to Kuwait's National Focal Point, which supervises the
implementation of a multi-billion dollar post-award environmental remediation program. He served on
a committee responsible for privatizing solid mineral assets of Nigeria. Mr. Onwuamaegbu is a
Barrister and Solicitor of the Supreme Court of Nigeria and a Solicitor of the Supreme Court of
England and Wales. A former Senior Visiting Fellow at Columbia University's Vale Center on
Sustainable International Investment, he wrote and spoke extensively on international investment
dispute resolution. His languages include English, Igbo, French, and basic Spanish and Arabic.
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Mr. Onwuamaegbu elaborated on the dispute resolution trends in the approximately one hundred
African and Asian Bilateral Investment Treaties (BITs). Some 60% for African countries are not
enforced, compared to 21% of China’s BITs with other States. For India, 81% suffer non-enforcement,
compared to India’s 17% with other countries.. Despite high non-enforcement of the 100 Africa/Asia
BITs, it does not appear to impede investment flow into Africa.
Some BITs provide for a three-to-six-month cooling off period. In domestic courts there is a “fork in
the road” provision: if a plaintiff chooses to go to court, it cannot go to arbitration afterward. Most
dispute resolution provisions include domestic negotiations.
Some resolutions for non-enforcement include a negative impact on most favored nation status,
additional treaties, a joint negotiation approach, and the Model BIT approach. Under the joint
negotiation approach, the countries involved would come together to make treaties. However, the
question is, how would these treaties be applied practically? What would be the difference between the
new treaties and the BITs? Does the issue stem from not having enough treaties or instead the lack of
some mechanism to enforce the arbitration clauses in the existing BITs?
The model BIT template approach resolution, taken from SADEC (the Southern Africa
Development Community), would give the countries a model set of rules, derived from the U.S. and
Canada, including: (1) requirement of mediation prior to arbitration (at instance of the State); (2) non-
disputing State party participation; (3) amicus curiae submissions; (4) transparency (publication of
pleadings and awards; open hearings); (5) consolidation of proceedings; (6) recognition of the
possibility of an appellate mechanism in the future; (7) possibility of counter-claim proceedings by the
State against the investor for breach of obligations such as environmental and labor standards, corporate
governance issues, corruption, etc.; and (8) use of regional arbitration centers, (e.g., Cairo, Hong Kong,
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Lagos, Kigali, Kuala Lumpur, Mauritius, Singapore) in order to aid development of arbitration talent on
national levels. These provisions are not commonly in African/Asian treaties.
In closing, better treaties and greater enforcement would enhance Asian/African trade and
investment.
The third panelist was Dr. Kenneth K. Mwenda, PhD, LLD, DSc (Econ), Adjunct Professor at the
Washington College of Law, American University, Washington. A Rhodes Scholar, author of 23
scholarly books and over 80 articles, he serves as the Manager and Executive Head of the World
Bank’s Voice Secondment Program, a major capacity-building initiative of the Board of Executive
Directors of the World Bank. His extensive background is set out at
http://conference2014.zcasonline.com/professor-kenneth-mwenda.
Dr. Mwenda discussed “Foreign Investment Policy In Zambia: A Lesson from Chinese Direct
Investment.” The topic of discussion was directed towards the main issues facing Chinese Foreign
direct investment (FDI) in a country such as Zambia. China is interested in Zambia because of its
abundant natural resources, specifically copper. In 2009 China surpassed the U.S. as an African
investor. Zambia had the highest flow of FDI among the 16 landlocked developing countries in Africa,
according to the UN Conference on Trade and Development (UNCTAD).
Zambia boasts of being the highest copper-producing country in Africa and is the beneficiary of the
continent’s third-highest level of Chinese investment. But Zambia has high levels of unemployment
and poverty, leaving many Zambians asking, “What has happened to the fruits of our government’s
lucrative deals with the Chinese?” Some Chinese investors have even taken over local small businesses,
such as selling chickens. The controversy in Zambia is that some Chinese contractors are corrupt.
Labor disputes do not go to labor arbitration but instead are informally resolved. The Chinese and
Zambian governments are cooperating with each other, but the people of Zambia are suffering. The
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Chinese bringing their own workers, and some of these workers are criminals who disrupt the
communities in Zambia. While there are laws in place, if the law is broken by the Chinese investors, it
does not appear that anything is being done to remedy the situation for the workers.
The solutions that were offered included arbitration (The Arbitration Act 2000), the enactment of
mining legislation (Mines and Minerals Act 2008), and additional labor laws. Dr. Mwenda closed with
stating that although solutions have been created, the issue still lies in effectiveness and efficiency of
law enforcement in Zambia. There is also concern about the culture of compliance with domestic laws
and regulation by Chinese investors.
The fourth speaker on the panel was Ms. Huawei Sun, Counsel and Arbitrator in Beijing, who is
also admitted to practice law in the state of New York. She specializes in international commercial and
investment treaty arbitration. She has acted as counsel for a range of Chinese and foreign banking and
corporate clients in arbitration cases conducted under CIETAC, UNCITRAL, SIAC, HKIAC, and ICC
arbitration rules. Ms. Sun was one of the founding partners of Beijing Hui Zhong Law Firm. Previously
Ms. Sun worked at the Beijing and Hong Kong offices of a leading international law firm for over
seven years, where she was responsible for managing the firm's China-related arbitration matters. Ms.
Sun has advised MOFCOM on various investment treaty-related issues, including handling the first
arbitration claim brought against China under an investment treaty. She serves on the CIETAC Panel of
Arbitrators.
Ms. Sun discussed the panel topic, “Asia and Africa: Trends in the Developing East-South Dispute
Resolution Axis” from China's perspective.
There are nearly 2500 Chinese companies doing business in Africa. Investment activities have
expanded beyond energy and resources and currently include Special Chinese Economic Zones (SEZs).
Energy issues are oil pricing, oil lifting, tax, and government licenses. Construction issues are delay,
quality, and pricing. Crude oil dumping issues and labor issues have also arisen. The legal issues
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include unfamiliarity with English law and rigorous common law traditions. There are also cultural
barriers, such as communication. Expectations are not expressed or made clear, resulting in
misunderstandings between the parties.
Arbitration offers a dispute resolution mechanism for these issues. The first arbitration option is ICC
or LCIA, which offer the best cost and convenience and give the option of using local consultants.
Then there is CIETAC, the largest arbitration center, usually for shorter arbitrations. There is also
CRCICA, a large arbitration center from China to African parties. There is no government intervention
for arbitration, and there is no corruption. CRCICA attempts to talk to the plaintiffs first. The final
mechanism presented is the China-Africa Joint Arbitration Center. Ms. Sun stated that “Chinese parties
have a lot of backing to create the kinds of arbitration that better suit them.”
The final panelist was Professor Nachiketa Mittal, who teaches international commercial
arbitration and banking law to LLM students at the National Law University of Odisha, India. He also
teaches ADR, Banking Law, interpretation of statutes, and code of criminal procedure to the
undergraduate law students. Professor Mittal served in Washington as a Senior Associate with the India
Chapter of Ashoka: Innovators for the Public. He has provided legal support to social entrepreneurs,
making legal intervention on public policy and social issues. Professor Nachiketa has published articles
on laws relating to nonperforming assets and legal aspects of e-banking fraud.
Professor Mittal discussed the Indian perspective on Africa-related arbitration. Most Indian players
in Africa are private Multi National Enterprises (MNEs). India is Africa’s fourth-largest trading partner
behind the EU, China and the U.S. Bilateral trade is expected to reach 90bn USD by 2015. India has
three kinds of investments in Africa: joint ventures; greenfield investments and mergers & acquisitions.
In southern Africa, Mauritius and South Africa are major states attracting Indian interest. Indian
companies doing business in Mauritius include public sector giants such as Indian Oil, SBI, LIC, Bank
of Baroda, New India Assurance Company, Telecommunications Consultant India Ltd and Mahanagar
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Telephone (Mauritius) Ltd. Indian companies have largely entered Africa as individual businesses,
while other countries have benefited from strong government-to-government initiatives.
The issues discussed stemmed from Indian businesses not being backed by government initiatives.
The solution is to direct collective efforts to building a culture of arbitration in Africa from an Indian
perspective. Enhancement of business opportunities in Africa is directly proportional to effective
arbitration in Africa as a dispute resolution system.
Professor Mittal called for collecting thinking focused on the following: Is a sound FDI policy
enough for enhancing business opportunity in Africa? Why do we need to look beyond the investment
regime? Why do we need to explore the arbitration landscape in Africa? And how can India and Africa
plug the gaps?
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Tuesday, 4 November 2014 11:00 – 12:30 p.m.
Arbitrating with the State
Rapporteur: Micah James Barry, University of Toledo, Ohio
1. Speakers:
Becky L. Jacobs, Professor, University of Tennessee College of Law, Knoxville, Tennessee
Luke Sobota, Three Crowns, New York, New York
Phillippe Leboulanger, Leboulanger & Associés, Paris
Charles “Chip” Brower, Professor, Wayne Law School, Detroit, Michigan.
2. Topics
Professor Jacobs provided a summary of investor-state dispute settlement mechanisms, their
results, and the perception that ICSID procedures are skewed in favor of investors. Mr. Sabota
discussed judicial review of investor-State arbitral awards. Mr. Leboulanger discussed OHADA
arbitration and award enforcement against States. Professor Brower discussed the Alabama Claims
arbitration between the United States and Great Britain following the United States Civil War, as an
example of the difficulties State arbitrations present.
3. Summary of Discussion
Professor Jacobs began with some general information about Investor-State dispute settlement
(“ISDS”), which refers to various mechanisms from provisions of certain bilateral investment treaties
(“BITs”), international trade treaties, and international investment agreements. ISDS mechanisms allow
foreign investors to initiate proceedings directly against a government without having to rely on that
Sate's courts. The most common ISDS rules, however, are those of the International Centre for
Settlement of Investment Dispute (“ICSID”).
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The ICSID Convention, unlike the New York Convention, provides no grounds to refuse
recognition and enforcement of ICSID tribunal awards. ICSID procedures require notice, followed by a
cooling-off period of three to six months. During this time, parties often negotiate in an effort to avoid
arbitration. After the cooling-off period, an investor may file for arbitration.
ICSID statistics released in March 2012 showed 233 concluded cases and 142 pending cases. The
results of the concluded arbitrations were not overly harsh towards States. Approximately 40% of
awards favored States, while approximately 30% favored investors and another 30% settled.
Professor Jacobs provided information on some notable ICSID cases. These cases show ICSID
tribunals declining the award of lost profits and moral damages, offering an optional non-pecuniary
remedy to avoid heavy monetary damages, and allowing State counterclaims. Professor Jacobs
discussed Biwater Gauff (Tanz.) Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/22 (Jul.
24, 2008), which has been described as a “model of reasoning and exhaustive analysis.” While the
tribunal's majority ruled that Tanzania violated certain BIT provisions, it found no injury to the claimant,
so the claimant was not entitled to compensation. The finding of non-compensable fault, however,
allowed the tribunal to allocate the costs of the proceeding equally.
Professor Jacobs then introduced the Southern African Development Community (SADC), which
provides for investor protections. Article 28(2) of the Protocol on Finance and Investment sets out three
options for investor-State dispute resolutions: a SADC tribunal, the ICSID (or the ICSID Additional
Facility), or the UNCITRAL Rules. The SADC tribunal's jurisdiction has been restricted, however, and
now only covers disputes between member States. Further, parties that resist arbitration can effectively
limit a party's choice of forum to arbitration under the UNCITRAL Rules.
Details of some of the backlash against ISDS mechanisms was presented. This included the
SADC Model BIT recommendations for “fair and adequate” compensation instead of “prompt, adequate,
and effective” compensation, as well as the recommendation that investors be required to exhaust local
remedies prior to initiating international procedures, or excluding such procedures entirely. Bolivia,
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Ecuador, and Venezuela have formally withdrawn from the ICSID Convention, and Argentina has
indicated it may soon follow. Australia has indicated it may exclude provisions on international
arbitration in future investment agreements. India's Department for Industrial Policy and Promotion has
called for a review of all of the BITs which India has signed. South Africa has launched a review of its
BITs following settlement of a claim under the ICSID Additional Facility Rules. Indonesia has indicated
it may let its ISDS obligations lapse.
Mr. Sobota explained annulment grounds under the ICSID Convention. Under the Convention,
awards are binding and must be enforced as if they were final judgments of the state's courts. There are
only five grounds for challenging an award. If a party wishes to challenge an award, it must do so before
an ICSID ad hoc committee, a new panel of three appointed by ICSID. The first ground is that the
tribunal was not properly constituted (e.g., bias), which has rarely succeeded, as the committee will not
review recusal motions beyond procedure.
The second ground is that the tribunal has manifestly exceeded its powers. This is a common
ground of challenge. This challenge states that a tribunal lacked jurisdiction, disregarded applicable law,
or failed to decide a question. The third ground is corruption on the part of an arbitrator, which has never
been used. The fourth ground is that there has been a serious departure from a fundamental rule of
procedure. This is rarely successful, due to the discretion given to tribunals. The final ground for
challenging an award is that the award has failed to state the reasons on which it is based. This has had
mixed success, as some committees will allow implicit reasoning if the committee can discern the
reasons. Some committees, fearful of evaluating the quality of reasoning, require a complete absence of
reasoning.
If an ad hoc committee determines that a ground exists, then a new tribunal will rehear the
dispute, at the request of either party. The ICSID system does not allow review for substantive errors of
law or fact. Consistent with this limited review, only 7% of ICSID cases have been annulled.
Mr. Sabota next detailed review under the New York Convention. There are two possible actions
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available to an unsuccessful respondent under the NY Convention: A set-aside action in the country in
which the arbitration was sited, or passive resistance to enforcement of the award. In a set- aside action,
there are five grounds for refusal of recognition and enforcement: (1) invalidity of the arbitration
agreement, (2) failure to give proper notice or inability to present a case, (3) exceeding the scope of the
submission to arbitration, (4) improper constitution of the arbitral tribunal or arbitral procedure that was
not in accordance with the agreement of the parties or law of the country where the arbitration took place,
or (5) set-aside of the award by a competent authority of the country in which the award was made or
under the law by which the award was made. There is also a public policy justification for refusal to
recognize and enforce an award.
Unfortunately, there is little reliable data on NY Convention enforcement, and it is uncertain how
long it takes to enforce awards. Even if an award is set aside, some states may still recognize the award,
as recognition becomes discretionary. Both the NY Convention and ICSID are deferential and there
appear to be few reversals. There have been discussions of a permanent court with something
approaching de novo review, but Mr. Sobota cast doubt as to whether any such court would truly have
greater legitimacy, when the parties themselves selected their arbitrators. It is also unclear whether any
such court would achieve greater consistency.
Mr. Leboulanger began with the purpose of the OHADA Treaty, which is promoting the
development of the seventeen African contracting States in order to stimulate and secure investment in
the territory. To further this purpose, the Treaty provided for the adoption of simple, modern, and
tailor-made business law rules, the adoption of Uniform Acts by a Council of Ministers, and promotion
of arbitration in the Common Court of Justice and Arbitration. Nine Uniform Acts have been adopted,
and these Acts override local laws and rules throughout the OHADA territory.
For arbitration in the OHADA system, there are two sets of rules. The Uniform Arbitration Act
(“UAA”) covers all arbitrations sitting in the OHADA territory. The UAA supersedes any arbitration
laws which OHADA States may have, and its public policy provisions override contrary rules which may
41
be adopted by other institutions. The Arbitration Rules of the Common Court of Justice and Arbitration
govern arbitrations conducted by the CCJA. These rules, based on the rules of the ICC, are supplemented
by Title IV of the OHADA Treaty on general principles for arbitration. The CCJA rules only apply if at
least one of the parties has its permanent residence in the OHADA Zone or if contract performance has
been or is to be wholly or partially performed within one of the member States.
The UAA sets forth a capacity to arbitrate for States and State entities. According to Article 2 of
the UAA, States and public entities may equally be parties to arbitration, and have no possibility of
invoking their own law to contest the arbitrability of the claim, their authority to sign arbitration
agreements, or the validity of the arbitration agreement. This applies to domestic as well as international
disputes.
When a court enforces an OHADA arbitration award, it can be enforced throughout the seventeen
States. Unlike the restrictive concept of immunity from execution which prevails in international law,
however, Article 30 of the OHADA Uniform Act on Simplified Recovery Procedures provides immunity
from execution for contracting States and public entities. National courts of OHADA countries have
repeatedly used this to refuse enforcement.
Mr. Leboulanger argued that decisions of this nature contravene the purposes of OHADA in
ensuring legal certainty in financial transactions and encouraging investment. In order to fulfill the
intention behind OHADA, immunity from execution must be construed narrowly. Additionally,
arbitration agreements must be regarded asmmmmmmmmmmm implicit waivers of this immunity. The
immunity provision should be brought in line with conventional international law, which distinguishes
between a State's or State entity's public policy activity (jure imperii) and economic or commercial
activity (jure gestionis). This would provide the certainty and stability which OHADA seeks to foster.
Mr. Leboulanger cited with approval the decision of a Cameroonian judge granting enforcement of an
arbitral award in SONARA V. APC, 18 Revue Camerounaise de l'Arbitrage 19 (2002), in which the judge
stated that proper enforcement of international obligations was necessary to protect the dignity of
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Cameroon as a civilized nation.
Professor Brower explored the nature of State arbitration more generally. For this purpose, the
Alabama Claims arbitration serves as a useful guide. The Alabama Claims arbitration showcases both
the political character of State arbitrations and the prominence of jurisdiction in such disputes.
In 1861, the British government officially recognized the Confederacy within days of the first
attack of the American Civil War. This recognition allowed the Confederacy, which lacked a navy as
well as a merchant marine, to utilize British shipyards to commission the CSS Alabama, which destroyed
64 U.S. merchant vessels and nearly crippled the U.S. merchant marine. The United States Navy spent
two years and numerous resources pursuing the Alabama, and the efforts of the Alabama and its sister
ships were believed to have prolonged the war by a year or two.
Resolving the Alabama Claims brought by the United States against the United Kingdom took
several years. In 1863, the United States proposed arbitration, but the British refused. In 1868, there was
an agreement to arbitrate private claims for the loss of vessels. The United States Senate, however,
rejected this proposal, due to the omission of national claims for premature recognition of the
Confederacy, the cost of pursuing the Alabama, and prolongation of the war. It was not until two years
later that the United States and Great Britain agreed to the Treaty of Washington, in which the British
government agreed to arbitrate “all complaints and claims on the part of the United States . . . growing out
of the acts committed by” the Alabama and her sister ships.
The language of the Treaty did not expressly include the national claims, and the British
considered them excluded. The United States considered the national claims to be included, and
presented them in their pleadings. This led to a stalemate, until the tribunal issued a summary disposition
which avoided the jurisdictional issue, but opined that these claims provided no foundation for damages,
and would be excluded from the final award anyway. With the national claims removed, hearings were
able to commence, and a final award was issued after less than three months.
The Alabama Claims showcased two important features of State arbitrations. The first feature is
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that State arbitrations have a strongly political character. This political character manifests itself in two
ways. When States are respondents, governmental decisions of public affairs are typically being
challenged. Shifting political imperatives may expand or limit available options. In the Alabama Claims
dispute, changes in government, a U.S. bill repealing neutrality laws, and the outbreak of the
Franco-Prussian War caused Britain to desire less hostility in relations with the United States. For the
United States, cabinet members knew that the national claims would fail on the merits, but they could not
withdraw them. The Senate had strongly endorsed the claims, and a presidential election was coming up.
These political factors strongly influenced the prospects of settling the dispute.
The second feature of State arbitrations is that jurisdiction becomes a prominent issue. Because
the disputes challenge the conduct of public affairs, States are particularly sensitive to the scope of
third-party adjudication. States often focus on excluding certain matters from arbitration entirely.
Jurisdictional issues typically manifest themselves at two points in time: when negotiating resolution of
pre-existing disputes, and when agreeing to arbitrate future disputes.
When confronted with a pre-existing dispute, jurisdictional disputes can prevent an agreement on
arbitration altogether, as happened for years in the case of the Alabama Claims. When drafting
agreements to arbitrate future disputes, States may adopt ambiguous treaty provisions leaving the scope
of jurisdiction imprecise or undefined. In the Alabama Claims, the Treaty of Washington was unclear
whether the national claims could be arbitrated. This jurisdictional issue was the single most important
issue in the course of the proceedings. These ambiguous terms allow States to contest jurisdiction (as
they have in 80% of ICSID procedures) and possibly take a second bite in annulment proceedings.
4. Issues Raised
The issue Professor Jacobs raised was the perception that ICSID procedures favor investors, and
the subsequent backlash against investor-State arbitration obligations. Mr. Sobota discussed proposals to
increase review of arbitral awards. Mr. Leboulanger raised the issue of national courts within the
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OHADA system refusing to execute awards against States and State-related entities. The issue Professor
Brower raised is that State arbitrations seem to lack two common benefits arbitration seeks to provide:
(1) avoidance of jurisdictional issues and (2) depoliticizing disputes.
5. Conclusions
Professor Jacobs, while conceding that the procedural requirements do favor investors,
demonstrated that the results of ICSID arbitrations are not as unfavorable to States as they are perceived
to be. Mr. Sobota argued that the cure may be greater than the disease when reviewing arbitral awards.
Three arbitrators selected by the parties may be no less legitimate than three judges. Mr. Leboulanger
advocated construing the immunity from execution principle narrowly and viewing entrance into
arbitration agreements as implicit waivers of immunity. Professor Brower concluded that State
arbitration does focus heavily on jurisdictional issues, and that State arbitrations are often politicized.
When entering arbitration agreements with States, these simply must be factored in.
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Amanda Torres
Rapporteur
Luncheon Speaker 12:30- 2PM
November 4, 2014
AtlAS Conference
1. Who Spoke
The luncheon speakers were Noah W. Downer and Shelby R. Grubbs.
2. About What
Noah W. Downer, representative from Mayor Reed’s International Affairs Office,
welcomed the Conference on behalf of Mayor Reed and the City of Atlanta. The Keynote Speaker
was Shelby R. Grubbs, Executive Director of the Atlanta Center for International Arbitration and
Mediation and Of Counsel at Miller & Martin PLLC. Mr. Grubbs gave a presentation on the
Atlanta Center for International Arbitration.
3. Summary
Noah Downer emphasized the Mayor’s excitement about the Conference and discussed
how Atlanta is growing its international footprint through investment and the presence of
Atlanta-based international businesses. Mr. Downer thanked this year’s sponsors, including,
Arnall Golden Gregory LLP and King & Spalding, as well as the participants who travelled near
and far to attend. Mr. Downer, pointing out that Mayor Reed has practiced law in international
firms, expressed the Mayor’s appreciation for the efforts made by AtlAS to organize a successful
conference. Mr. Downer highlighted how Atlanta’s unique business environment, international
activity, southern charm and progress over the years, make it the ideal destination for arbitration.
He acknowledged the efforts of Dean Jaqueline Royster, Africa Atlanta and, AtlAS for putting
Africa on the forefront of the city’s international agenda.
Mr. Grubbs’ presentation was entitled: Why Atlanta? And Why the Center for
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International Arbitration and Mediation? He opened with three related trends. First, the growth of
niche participants in international commercial disputes, including: Hong Kong, Singapore,
Nairobi and Atlanta. Second, Atlanta’s strengthening response to the dominance of the traditional
cities, namely, New York, London and Paris. Third, the rise of international law and alternative
dispute resolution in law schools.
Mr. Grubbs then discussed how Atlanta “stacks up” against key elements that make
judicial seats special, such as: the presence of strong financial markets, highly developed
commercial law, pro-arbitration and experience in international trade and marketing. First, Atlanta
is a commercial hub with an increasing financial reach. It is the financial capital of the southeastern
United States and headquarters for world class businesses. Atlanta is home to a congenial legal
environment and home to the Eleventh Circuit Court of Appeals, one of the most arbitration
friendly circuits in the country. Second, Atlanta is the ideal city for international arbitration. In
2012, Georgia enacted the International Commercial Arbitration Code, which is aligned with the
UNCITRAL Model Law. The new Code allows foreign lawyers to appear in arbitration-related
matters. Additionally, all Georgia law schools offer programs in comparative law.
Atlanta is a diverse and cosmopolitan city, renowned for its hospitality. It is an ideal city
for travel because of its convenience and affordability. Home to Hartsville-Jackson Airport, the
busiest passenger airport in the world, Atlanta offers premiere class hotels and dining
establishments at a lower cost than other cities. Atlanta has a long history of dispute resolution.
Home to fortune five-hundred companies like Coca-Cola, Delta and United Parcel Service,
Atlanta has sophisticated neutrals and ancillary services. Last, the city has experience in
international trade and marketing. Internationally known non-governmental organizations like the
MLK Center, Carter Center and American Cancer Society and sixty-five foreign consulates,
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forty-two binational chambers of commerce and CIFAL, are located in Atlanta. In 2013 Georgia
exported thirty-seven billion dollars in goods and increased by one-hundred fifty percent since
2000, with these number continuing to accelerate.
Mr. Grubbs then discussed how AtlAS emerged. Glenn Hendrix, Partner at Arnall Golden
Gregory, established the idea for AtlAS. Two major factors had to happen for AtlAS to be realized.
First, the passage of the 2012 Georgia legislation aligned with UNCITRAL, and second, to locate
a physical facility in Atlanta.
The Atlanta Center for International Arbitration is scheduled to open in 2015. The Center
will not have rules of its own, but will act simply as a hearing location. The vision of the Center is
to make Atlanta a preferred venue for the resolution of international disputes and an international
leader in dispute resolution.
Mr. Grubbs discussed the functions of the Center. The Center is located at George State
College of Law, encompassing six large hearing and seminar rooms with AV equipment, a
concierge service for lodging and transportation and translation and transcription service with
access to an IT department. The Center will also convene major conferences offered through
AtlAS and support the LLM Vis Moot Competitions and clinical programs, building international
legal expertise in Atlanta.
4. Q and A
Mr. Grubbs and Mr. Hendrix then took questions from the floor. The first question that
arose was whether any cases are currently being conducted in the Center, and what specializations
will dominate the Center.
Mr. Grubbs responded that because the Center is not open yet, it has not contemplated any
case specialization. The next question was whether there is a plan to post a panel
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online in order to choose arbitrators. Mr. Grubbs said the expectation is that the
arbitrators will be from all over the world, and there is no present intention to compile a
list of arbitrators, because the Center is strictly focused on providing a hearing space.
Judge Beasley inserted that the arbitrators’ information could be found on the websites
of organizations or firms they to which they belong. The Center seeks to provide space
for personnel and will build upon the expertise in Atlanta. Mr. Grubbs posed a question
regarding whether there is a court that would hear arbitration related matters and issue
expeditious decisions. Mr. Hendrix noted that the Business Court in Fulton County is
the exclusive state court for any matters involving international arbitration. Mr.
Hendrix discussed the symbolic UNCITRAL adoption into Georgia legislation and the
positive impact this would have on standards and the issuance of awards.
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4 November 2014, Concurrent Session “a” 2:00 pm – 3:00 pm
Resolving Disputes in the Energy and Natural Resources Sectors
Rapporteur: Natelie Schiess, Mercer University School of Law
Program Chair: Timothy Meyer, Professor, University of Georgia School of Law, Athens, Georgia
Panelists: Francis Botchway, Professor, Qatar University College of Law; Consultant, Ince & Co.,
London, and Crowell Moring, Washington D.C.
Tunde Fagbohunlu SAN, Aluko & Oyebode, Lagos, Nigeria
John A. M. Judge, Arbitrator, Arbitration Place, Toronto; Thirty Nine Essex Street Chambers,
London
Alexandra Kerr Meise, Foley Hoag LLP, Washington D.C.
I. Timothy Meyer
This panel was set up as more of a discussion among the panelists rather than the typical series of
Presentations, with the aim of giving a more stimulating interactive session. The audience was
invited to engage in the discussions rather than holding questions until the end. The discussion
focused on substantive and enforcement issues related to energy and resource disputes in Africa.
II. Francis Botchway
Dr. Botchway focused on the tensions that exist between domestic courts and international arbitral
tribunals, giving as example three cases. He opened with a comment on an earlier case, concerning a
Ghana/Greek national, in which he worked on as an attorney/intern: Vacuum Salt v. Ghana. The case
involved Ghanaian local investors partnered with a Greek national (who also happened to be Ghanaian),
through an agreement containing an ICSID clause treating Vacuum Salt Products Ltd as a “foreign
national.” The dispute’s focus was on the jurisdiction in the Permanent International Court of Arbitration
(PCA). The Ghanaian investors initiated the arbitration and relied on their Greek/Ghanaian partner to
establish jurisdiction. At the time, Mr. Botchway’s firm was involved in the initial proceedings at the
PCA as well as in initiating an arbitration summons in the local court. The local court matter was
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intended to obtain a determination that indeed the Greek party involved was also a Ghanaian national and
therefore not a foreign investor, technically speaking, thereby compelling the arbitration tribunal to
decline jurisdiction under ICSID rules. This is an example of the tensions between the local and
international courts.
Dr. Botchway then continued with an overview of the Balkan Energy case. It also originated in Ghana
and involved Balkan Energy (Ghana) Ltd, an affiliate of US-based Balkan Energy Company, which had
invested in electricity generation in Ghana. Balkan was to rehabilitate the Osagyefo Barge, owned by the
Ghana government, and make it operational for electricity generation. After a year of working on the
barge, Balkan alleged that the Ghana government was in breach of its contractual obligations by not
readying the energy institutions to receive the energy output from the barge. While Balkan was in the
early stages of an arbitration hearing at the PCA, Ghana brought a case in the Ghana High Court claiming
that the agreement was invalid under Ghana law. The argument was that Ghana’s constitution demanded
that international business transactions be ratified by the Ghana parliament to be recognized under
Ghanaian law. The High Court followed the government’s argument and ruled that the contract was not
enforceable. Balkan Energy then appealed to the Ghana Supreme Court, which confirmed the holding of
the High Court. The Supreme Court stated that the ratification requirement was proper and operated as an
anti-corruption device meant to create transparency. The Ghana government requested that the High
Court place an injunction on Balkan from going forward with the arbitration. The arbitration panel
ignored the Ghana High Court and issued a ruling on that matter. Balkan asked for $3 billion in damages,
but the panel awarded $12 million.
The final case Dr. Botchway covered was Heritage Oil & Gas Ltd (HOGL) v. The Government of the
Republic of Uganda. HOGL spent just under $1 billion in resource exploration and discovered oil in
Uganda. Upon discovering oil, HOGL decided to assign those rights and concession to Tullow Oil for
$US1.45 billion. The Ugandan Government imposed a capital gains tax of 30%, which HOGL refused to
pay, sending the parties to court over the dispute. They are currently in arbitration over this issue, and
jurisdiction is also being challenged. Dr. Botchway stressed that these cases are just a few examples of the
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80% of cases with jurisdictional challenge issues between the local courts and international arbitration
bodies.
III. John A. M. Judge
By way of background, Mr. Judge has over 25 years of experience with a Canadian litigation firm
which has clients in the mining industry all over the world. His discussion was centered on the
background trends of natural resource disputes.
He submits that with an increase of investment funds flowing into Africa, there also appears to be a
correlating upward trend in legal disputes surrounding mineral resources. The international community,
including China, the Middle East and the U.S., are not the only ones focused on this market. Interestingly
Mr. Judge points out that there is increased interest from the International Bond market in Sub-Saharan
companies. They have issued and sold bonds on the international markets, which indicates increased
confidence in a number of the African states. Increased funding is flowing in as well as earmarked bonds
for major infrastructure projects.
Another possible reason for the increase in the number of disputes is the constant governance issues
that remain in many of the States throughout the African continent. Mr. Judge draws much of his insight
from the Mo Ibrahim Foundation (index on African governments) which has made in-depth assessments
of many African countries. The Foundation aims to assist governments improve safety, rule of law and
participation in human rights, plus sustainable economic opportunity and human development. Mr. Judge
covered several statistics and indexes from the Foundation website. The information also covers the flow
of money leaving the Africa region. Transparency issues indicate an uptake in investor disputes. In 2014,
a larger mining company, not involved with government disputes but rather in other areas of industry, was
involved in three separate arbitration hearings in Toronto.
IV. Tunde Fagbohunlu SAN
Mr. Fagbohunlu is a Nigerian attorney with a decade of litigation and arbitration experience
representing oil and gas companies involved in disputes with the NPC. In conjunction with what Mr.
Judge spoke of, Mr. Fagbohunlu discussed other features within the oil and gas sector for arbitration
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disputes. The transactions tend to be very long. For example, in Nigeria one obtains an exploration
license lasting 10 years with a maximum number of exploration activities. If oil is discovered, at the end
of 10 years there is another license for 20 years for the oil mining lease period, renewable for another 20
years. That is prospectively a 50+ year relationship with astronomical but also fluctuating prices in what
is often described as a volatile market. 2014 alone began with $100/barrel oil prices and at the time of the
conference it is down almost 20%, which itself triggers disputes in the industry. Changes in government
and government policy shift the landscape the industry has seen in arbitrating oil and gas disputes,
particularly in Nigeria.
Commodity price changes also trigger disputes. In 1993 the Nigerian government’s desire to not invest
in local infrastructure resulted in the adoption of a model that required the international oil companies to
bear all the costs, in return for a percentage of the oil derived from the wells. At that time a number of
incentives were put in place to encourage oil company exploration. This was particular to that industry
because deep water exploration is highly challenging technologically and capital-intensive. At that time
oil was $20/barrel. The regime stipulated that at any timet the price rose above $20, the legislature would
amend the laws to change the incentives given to these companies such their profits would be
commensurate with the reduced risk.
A few years later oil prices rose and the government did not change its laws but rather decided to take
a volume of greater than the volume it was entitled to, thereby leading to a number of oil production
arbitrations. Appeals in many of those disputes argued that incentives given the oil companies initially
were tax incentives and the change in the government’s view was a tax legislation issue and therefore not
an issue for arbitration.
Comment from Panelist Judge: The changes in government and policy as well as the investment
companies and mining companies all over the world have seen exactly what is being claimed. With the
change of government comes this idea that they are not bound by agreements already in place. Another
factor comes into play where, for example, a Russian or Chinese company enters the stage and offers the
State more money to obtain the particular concession, and often the agreements are suddenly cancelled.
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Mr. Judge referenced a point made on the previous conference day by Judge Brower concerning a
Canadian company which accepted a $1.2 billion settlement from the foreign entities that moved in and
took over the canceled agreements and concessions. This is a challenge that governments must recognize.
They cannot just terminate a concession contract and move on to the next highest bidder. Mr. Judge
acknowledged Canada’s recent NAFTA cases as well, but reiterated that obligations are falling apart and
part of the problem is that politicians seem to be unaware that fundamental obligations must be adhered
to.
Comment from Panelist Meise: As to natural resource issues in particular, these are not just subject to
politics but also constitutional issues. These projects are not just about who will build a hotel or repave
the airport. Instead, the land is being changed, affecting it for decades and displacing people. There are
many layers to aspects of these projects, and in many of these countries the constitution holds that natural
resources belong to the sovereign State. Natural resources are a different breed in international disputes
when compared to investment arbitration disputes.
Comment from Chair Meyer: One of the reasons we have international treaties is precisely to address
some of the issues that occur when you have political transitions, particularly when they occur in
international regimes. Chair Meyer further stated that there have been issues arising regarding poverty
and there are disputes about generation projects. There is a real opportunity through energy infrastructure
improvement, but with that comes an extraordinary degree of investment.
Comment from Panelist Judge: He pointed out the importance of the New York Arbitration Convention
(“The Convention on the Recognition and Enforcement of Foreign Arbitral Awards”) and the relative
ease of arbitral award enforcement for those who have become parties to it. Mr. Judge stated that one of
the difficulties in Africa is the lack of uniformity in dealing with the ratification of the NY Convention.
Thirty-two African countries have signed, but that leaves out twenty-two countries with a population of
300+ million. The latter constitute a significant part of Africa as non-members of the Convention. That
results in a wide variety of laws being followed, from statutes that are modern to those that are outdated,
and from common law to Portuguese law and even Sharia law. All of this accentuates the differences
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among the African states. Mr. Judge indicated that to harmonize the legal approaches in arbitration these
remaining countries should become parties to the NY Convention. This approach may also attract
increased business.
IV. Alexandra Meise
Ms. Meise gave a presentation on ICSID. She submitted that more countries have signed onto ICSID
than the NY Convention. There are 159 signatories, 48 of which are African states. A large number of
ICSID cases are natural resource disputes (mining, extracting, renewables, and other related activities).
Since January 1, 2014, of the 25 ICSID cases filed, 12 (72%) of the cases before ICSID were related to
these activities.
Ms. Meise pointed out that ICSID’s transparency is a key feature, particularly where having
knowledge of what other tribunals have done is critical to understanding what is happening in the
industry. Most commercial arbitration is confidential but with ICSID that is not the case. Further, with
the many African states signed on one can see how much more of an effect ICSID can have on the region
as a whole.
Ms. Meise covered the ICSID convention, its accompanying rules, and the ICSID additional facility.
With an ICSID award, there is no appeal. The award is considered the same as if given by the court of the
State in which one is seeking enforcement, so one does not have to seek recognition of it in a local court
in order to enforce it. In Argentina’s case, there were some issues regarding the local rules that stipulate
the courts get 3% of the award. So with regard to the size of some of these awards, it is advantageous to
have an award enforced outside of Argentina.
Comment from Panelist Judge: Along with those African countries that have not signed on, Canada was
in the same boat until only recently, when it signed onto ICSID. Mr. Judge shared that in his experience
and that of other counsel in London and Washington, there are delays in ICSID proceedings and some are
taking the available option to proceed under UNSAR’s rules.
Mr. Judge went on to cover issues related to structures for state ownership arising from mining
projects. The Canadian Centerra Gold Inc. case dealt with mining disputes in the Kyrgyz
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Republic. An issue arose when an investor, a Turkish company with a $12 million award against
the Kyrgyz Republic from an unrelated transaction (nothing to do with the mining issue), went
into Ontario and served notices on Centerra Gold Inc. The arbitral creditor determined that the
shares of the Kyrgyz entity in Centerra were available for execution of the debt of the host State
because they owned 100% of the entity. Ultimately, the Ontario court held that since the Kyrgyz
State had an equitable interest in the shares of Centerra owned by the Kyrgyz company, those
shares were available for execution. After the case, other arbitral creditors have come to Ontario
and are now claiming access to those shares for $100 million. These shares have now become
available as recovery for any creditor against the Kyrgyz Republic. Mr. Judge reiterates that much
care must be taken when structuring these where the State is not nearly as sophisticated.
Comment from Panelist Botchway: Picking up from the energy comment, there is always opportunity
for energy and other infrastructure. The continent of Africa is the poorest in the world and lacks much in
infrastructure. One of the ways to deal with disputes is prevention and avoidance by paying attention to
capacity issues at the negotiation and formulation and even at the termination stage.
Comment from Chair Meyer: He linked the capacity issue identified by Dr. Botchway to issues of
managing contracts, permits, agreements, terminating contracts and corruption as a basis for terminating
contracts. Mr. Meyer raised the question: How should we be thinking about these capacity issues as it
relates to permitting issues in the mining concession area?
Comment from Speaker Meise: When it comes to natural resources, concession contracts run for many
years, and of course it is difficult to work out how one could manage a relationship with that time frame.
No relationship will last for an extended period without issues. Especially with natural resources there are
commercial style contracts, with subcontracts, between State entities and developers, but then there are
also disputes that rise to treaty level rather than at the contract level. The issue could be dealt with at the
state level with the State as a Respondent. One could deal with these issues by taking a look at the
contract and determining whether it can be exited or whether has there been a breach under the terms. In
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the long term, that is a better option rather than the “knee jerk” reactions. There may be breaches of the
contract or of local laws or of the permitting process (e.g., EIA, EIS).
Ms. Meise went into detail on some administrative issues related to violations and tensions on
domestic and treaty violations for investors and states. Changes in environmental law and tax regime are
also issues that interfere with investment. Ms. Meise referenced the Glamis Gold Ltd NAFTA case, where
California changed its regulations regarding mineral processing and gold investment. This increased costs
and made mining of gold a less attractive investment. Ms. Meise reminded the audience that as Judge
Brower indicated in an earlier session, as to environmental regulation, there has not been a tribunal
finding that bona fide regulation violates treaties.
Comment from Panelist Tunde: In discussing capacity, it is more about the judiciary and enforcement.
National judiciaries are very political in the realm of enforcement. As a practical matter, particularly in
the oil and gas sector, and the long nature of these relationships; for e.g., Shell or Exxon Mobil, they are
there for the long haul. Typically, it is when a government’s back is “against a wall” that they end up in
disputes. Where companies are in a country for the long haul, many of them have several concessions, a
factor that plays out significantly in this sector.
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Tuesday, November 4, 2014 Concurrent Session “b” 2:00 pm to 3:30 pm
Dispute Prevention, Management and Resolution of Infrastructure and Construction Projects
Rapporteur: Nichelle Garrett, Emory University School of Law
Program Chair: Stephens Clay, Kilpatrick Townsend & Stockton LLP, Atlanta, Georgia
Panelists: Randall F. Hafer, Kilpatrick Townsend & Stockton LLP, Atlanta, Georgia
Kwadwo Sarkodie, Mayer Brown, London
John W. Hinchey, JAMS, Atlanta, Georgia
George Anthony “Tony” Smith, Weinberg, Wheeler, Hudgins, Gunn &
Dial, Atlanta, Georgia
Stephens Clay
Although the conference has focused on “The Role, Reality and Future of Africa-Related Arbitrations,”
there are extraordinary costs associated with arbitration all over the world. Both domestic and
international counsel asks, “Why does arbitration cost so much?” “Why can’t we have a way of resolving
disputes that costs less and gives us more control over our budgets?” “What can be done in the
industry, in this respect, because we are spending so much money to resolve disputes that it frequently
becomes not worth arbitrating?” The four speakers on the panel address these questions from different
perspectives.
Randall F. Hafer
Multi-Tiered Approach to Management and Resolution Disputes
Participants in the construction industry are probably some of the toughest clients lawyers
can deal with. This is true for many reasons, a few of which are: the construction business is
risky; margins are thin; there is not much room for paying for expenses of dispute resolution.
Facts and Figures:
1) Disputes on major global construction projects increased in value, on average, to
$32.1M in 2013.
2) Construction dispute values were the highest in Asia at $41.9M, and the Middle East at
$40.9M.
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3) On average, disputes took less time to resolve in 2013 at 11.8 months, down from 12.8
months in 2012.
4) In the U.S. 80-85%, some would say 90%, of all commercial disputes settle.
5) For international business disputes about 60% settle through direct negotiation or
mediation according to a 2013 study.
The four principle causes of construction disputes are 1) picking the wrong partner, 2)
ambiguous, incomplete or uncoordinated contract documents, 3) unrealistic risk allocation, and
4) a lack of trust between all parties involved.
1) Picking the wrong partners
Owners should thoroughly investigate capabilities of proposed contractors in addition to
investigating the contractors’ experience and expertise, financial resources, and claims history;
should require a statement of qualifications and experience, request key person resumes,
request financial statements, and consider pre-qualification. Similarly, contractors should
confirm the owner has financing in place, that governmental approvals are in place, that there
is political stability, that the contracting approach is understood and agreed upon, that
construction staff is sufficiently experienced, and that the owner’s track record with respect to
on-time payments, claims, etc. is satisfactory.
2) Ambiguous contract documents
Ambiguous, Incomplete or uncoordinated contract documents will cause confusion and lead
to disputes between the parties. Contract documents will control preparation of contractor’s
estimate and plan for performing the work, the design and construction of the work, and the
resolution of claims and disputes. At least two-thirds of all construction contract disputes result
from conflicts, omissions, ambiguities and broad generalities in the contract documents.
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Contract documents should: i. Clearly define the project and spell out work scope, ii. Clearly and
thoroughly describe the parties’ rights and obligations in an understandable manner – not
everyone reading them will be a lawyer or an engineer, and iii. Coordinate all pieces of the
contract documents.
3) Equitable risk allocation
Risk allocation should be equitable, and allocation should go to the party which is most able
to control the risk. There should be inclusion of exculpatory/risk shifting provisions (no-
damage-for-delay, site conditions disclaimers, etc.). If there is perceived protection, benefit is
often illusory and may often lead to more, not fewer claims, and the dispute process is often
more complex and expensive.
4) Lack of trust
The project team should be assembled early and meet often. The team member designated
as the main contact for decisions and approvals should be made available to all team members.
The initial aspect of dispute resolution should be to address problems early.
Resolutions Offered
“Give peace a chance” - Contractually mandate multiple attempts to resolve a dispute within
reasonable but achievable deadlines.
The dispute resolution continuum begins with prevention, on-site early intervention, and
external non-binding arbitration, then external binding arbitration. The cost, time and
aggravation increase as the parties get closer to external binding arbitration, and they
ultimately have less control of the outcome of their dispute.
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Address dispute resolution in advance, in the contract documents, Don’t wait until the
disputes arise. The following multi-tiered approach is recommended.
First, the parties should contractually agree and collaboratively design their dispute
prevention processes. Second, within the agreed upon contract, the parties should include
language that states how on-site intervention will proceed, such as a) Negotiation – multi-step,
structured; or b) Dispute Boards/Standing Neutral. Third, the parties should contractually agree
upon what external non-binding resolution(s) that will be used such as a) Mediation/facilitated
negotiation; or b) Neutral expert evaluation. Finally, the parties should contractually agree
upon external binding resolution such as a) Arbitration, b) Binding Dispute Boards, or c)
Litigation.
Conclusion
A survey by Queen Mary University Law School in London, first published in 2006, concluded
that, for the resolution of cross-border disputes, “73% of respondents prefer to use
international arbitration, either alone or in combination with mediation or other amicable
settlement techniques in a multi-tiered dispute resolution process, and that “the top reasons for
choosing international arbitration are flexibility of procedure, the enforceability of awards, the
privacy afforded by the process and the ability of parties to select the arbitrators.”
Kwadwo Sarkodie
Using Dispute Resolution Boards to Make a Project Successful
Hiring a Dispute Board is the step taken prior to reference to arbitration; an interim step. A
Dispute Board engages in a “job-site” dispute resolution process. The board typically comprises
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three independent and impartial persons selected by the contracting parties. The Dispute
Review Board is appointed at the start of a project before any disputes arise and by undertaking
regular visits to the site, is actively involved throughout the project and possibly any agreed
period thereafter. The parties must contractually agree to hire a dispute board. There are short
time tables to decisions reached. The decisions are reached in “real time.” The board’s
decisions may be either binding or advisory.
A Dispute Resolution Board (“DRB”) is distinct from a Dispute Adjudication Board (“DAB”). A
DRB issues advisory decisions/opinions to assist the parties in resolving disputes. Its
responsibilities extend to dispute prevention. Further, it reviews and monitors the progress of
the project.
A DAB is an independent and impartial tribunal which issues binding decisions to resolve
disputes between the contract parties.
At the outset the parties should consider whether they would like dispute adjudication or
dispute review; a standing or ad hoc body (Fédération Internationale Des Ingénieurs-Conseils)
(FIDIC); and the point at which the tribunal will be established; the composition of the tribunal;
and how appointments will be made to the tribunal.
A combination of processes may be desirable. One compromise could be for a 3-member
tribunal, with a lawyer as chairman and two construction professionals. Different
considerations apply depending on whether the appointment is for a standing or an ad hoc
dispute board.
Resolutions offered
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FIDIC DAB provisions: Who should sit as a DAB?
Suitably qualified persons who are experienced with the type of work, experienced in the
interpretation of contract documentation, and fluent in the language the parties intend to use.
FIDIC DAB provisions: Procedure
DAB hearings usually take place, but this is not a requirement – initial short procedural
hearings can be useful. DAB has no power to extend the time for decisions beyond 84 days.
DAB can appoint advisors on law and technical issues. The FIDIC Guide provides for exchange of
two rounds of submissions. The hearing procedure is set out in the FIDIC Guide, with oral
submissions and DAB questions to the parties.
Less complex disputes may only require one round of submissions and a short hearing. DAB
has no power to award costs and expenses to the winning party. Proportionality is crucial for
appropriate and proper resolution of disputes, given that arbitration is the next step. Care
should be taken not to substantially extend the process without ensuring that the decision is
final and binding.
FIDIC DAB provisions: Appointment
FIDIC forms envision that the DAB will be constituted of either one or three members. The
default position is that the DAB will be comprised of three members. Number of DAB members
will depend on the size of the contract and such factors such as the complexity of the work and
the project needs in terms of expertise.
DAB decisions: Enforcement
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FIDIC DAB decisions are binding and should be complied with by the parties during the
project. If no Notice of Dissatisfaction (“NoD”) is served within 28 days of the decision, it
becomes final and binding. A NoD is a condition precedent to arbitration. A failure to comply
with a DAB decision can be referred for enforcement by arbitration. FIDIC contracts do not
provide a route for enforcement of a binding but not final decision. Singapore courts have
declined to enforce an award arising from a binding DAB decision, because it was not final and
binding. Obtaining provisional awards or interim measures may be the answer to deal with this
lacuna. Depending on the size and complexity of the dispute, it may be quicker to launch
arbitration than to enforce a binding DAB decision.
Conclusions
Dispute boards offer a good means for avoiding, resolving and managing disputes in
international projects. Under either the DAB or DRB process, the effectiveness will depend on
the goodwill of the parties throughout process. The appointment procedure should be tailored
to accommodate each project’s needs. A proportionate approach is required.
George Anthony Smith
Enhancing Business Opportunities in Africa
The Arbitration Clause:
Parties must pay particular attention to how their arbitration clauses are drafted to ensure
the clause answers four basic questions: What is to be arbitrated; by whom is it to be
arbitrated; where is it to be arbitrated and how is it to be arbitrated?
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The language in the arbitration clause should serve four essential functions. First, it must
produce mandatory consequences for the parties. Second, it must empower the arbitrator to
settle the disputes likely to arise between the parties. Third, it must allow for an efficient and
rapid procedure that leads to a judicially enforceable award. Finally, it must exclude the
intervention of state courts in the settlement of the conflict, at least before an award is issued.
A generic arbitration clause may read as follows:
“Any dispute or claim arising out of or in connection with this contract, including any
question regarding its existence, validity, or termination, shall be referred to and finally
resolved by arbitration [under LCIA Rules] [OR] [administered by the International
Centre for Dispute Resolution in accordance with its International Arbitration Rules]
[OR] [ under the Rules of Arbitration of the International Chamber of Commerce], which
Rules are deemed to be incorporated by reference into this clause.”
Additional language is often needed in arbitration clauses to define the number of
arbitrators; which shall be [one/three]; the seat, or legal place of arbitration shall be [city
and/or country]” (usually a center like London or New York); the language to be used in the
arbitral proceedings shall be [English]; and the governing law of the contract shall be the
substantive law (usually where the centre is – in this example England or New York].
Resolutions Offered
Avoid Pathological Arbitration Clauses
Pathological Arbitration Clauses can be defined as clauses drafted in such a way that they
may lead to disputes over the interpretation of the arbitration agreement. This will result in the
failure of the arbitral clause or the unenforceability of an arbitral award.
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Typical inefficiencies in drafting arbitration agreements that will include pathological
arbitration clauses are: 1) internally inconsistent; 2) equivocation as to whether binding
arbitration is intended; 3) ambiguity as to the parties’ intent: (i.e.: “Arbitration, if any, to be
held in Paris, France.”); 4) misidentifying the arbitral institution by name or by country (i.e.: The “ICC Court of Arbitration in Madrid, Spain.”); 5) providing too much specificity with respect
to the arbitrator’s qualifications; 5) providing for conflicting or unclear procedures; 6) use of
“may” vs. “shall”; 7) use of vague or unclear terminology; 8) combining non-institutional
arbitration with institutional arbitration; 9) combining two Institutions (e.g., “ICC Arbitration to
be administered by the AAA.”); 10) too narrowly defining the scope of the arbitration clause;
11) no clear divisions between dispute resolution methods; 12) naming a person by title to
appoint the arbitrators; 13) naming as arbitrator a specific person who is deceased,
incapacitated, or refuses to act; 14) failing to name the seat of the arbitration; 15) adopting the
rules of an institution without a clear understanding of those rules; and 16) neglecting to
specify applicable law.
John W. Hinchey
Changes and Trends in International Disputes Resolution Procedures
Concurrent mediation and arbitration processes may be suggested by the parties to resolve
their dispute and should be accommodated by counsel. Counsel may allow the arbitration to
progress while the parties continue to attempt settlement through mediation. Counsel may
alternatively halt arbitration and impose a deadline by which settlement through mediation
must occur with agreement to continue arbitration proceedings if no settlement is reached by
the deadline.
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Resolutions offered:
The parties should engage in a “Guided Choice” in designing a dispute resolution process
specifically tailored to their potential dispute. The designed process should include, at least, a
pre-dispute process, a mini-trial opportunity to identify legal issues, and a post-dispute process.
As a result of the enormous amount of time and costs associated with international arbitration,
IBA Guidelines were created in 2013.
“The IBA Arbitration Committee and its Task Force on Counsel Conduct have produced
guidelines for party representation and counsel conduct in international arbitration.
The IBA Guidelines on Party Representation in International Arbitration are inspired by
the principle that party representatives should act with integrity and honesty and
should not engage in activities designed to produce unnecessary delay or expense,
including tactics aimed at obstructing the arbitration proceedings.”
The genius of arbitration is it can be what the parties want it to be, since it is a creature of
agreement. In international commercial arbitration you can “pick your prize or pick your
poison.”
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Tuesday, 4 November 2014 4:00 – 5:30 PM
Diversity and Inclusion in International Arbitration Appointments
Rapporteur:
Amy Park, Georgia State University College of Law, Atlanta, Georgia
Program Chair:
Benjamin G. Davis, Professor, University of Toledo College of Law, Toledo, Ohio
Panelists:
Rachel Clarke, Deputy Director, Arbitration & ADR, North America, ICC International,
Court of Arbitration, New York, New York
Ike Ehiribe, 7 Stones Commercial & IP Chambers, London; Officer, LCIA African
Users’ Council, London
Calvin A. Hamilton, Hamilton Abogados, Madrid, Spain
Richard W. Naimark, Senior Vice President, International Center for Dispute
Resolution (ICDR)/American Arbitration Association (AAA), New York, New York
Adedoyin Rhodes-Vivour, Doyin Rhodes-Vivour & Co., Lagos, Nigeria
Summary:
The panelists shared their insights regarding diversity and inclusion in International Arbitration
Appointments with a focus on the lack of female and African appointments to arbitral panels.
They identified emerging trends and discussed ways to facilitate more female and African
appointments. In particular, the panelists emphasized the importance of establishing mentor-
mentee relationships and the need to provide opportunities to both female and African lawyers to
tackle issues of diversity and inclusion.
I. Gender Issues in International Arbitration
a. Introduction by Dr. Ben Davis
To begin the discussion on diversity and inclusion in the International
Arbitration community, Dr. Davis highlighted gender issues. He shared his
experience of when he first started working at the ICC in 1986. He
remembers that at that time all five counsel were men. Eventually, the
question of whether women would also be able to participate in
international arbitration emerged. Davis asked, “Is talking about gender
damaging?”
b. Adedoyin Rhodes-Vivour
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Ms. Rhodes-Vivour stated that because there were not many women being
appointed to important international cases during the 1980s, she started the
organization called Arbitral Women. She felt women were being
discriminated against and noted that even now the percentage of women in
this field is low. She cited that the percentage of women being nominated
or acting on panels is below 10%. Some places have lower than 2% female
participation.
c. Calvin Hamilton
Mr. Hamilton spoke highly of Arbitral Women and suggested if any
person is looking for a role model that she should look to that organization.
d. Richard W. Naimark
Mr. Naimark stated that historically, European and North American men
worked on these kinds of cases. He also noted that most arbitral
appointments are made by parties and not by institutions. At the AAA and
the ICDR, virtually all are appointed by parties. Naimark said that the
promotion of women as arbitrators will take time but identified that in the
past five or six years, the locus of power has shifted rapidly to Asia and
the Middle East. He believes this change will continue to create a
completely different dynamic in the way people are being appointed as
arbitrators, so now is the right time to be talking about these issues.
e. Rachel Clarke
Ms. Clarke emphasized the importance of encouraging parties to promote
more women appointments, so that women can build name value and
experience for themselves. She suggests that arbitrators could identify
those who are underrepresented or could go to other countries to network
and to establish a name for themselves, which would have the beneficial
effect of sensitizing local judges so arbitration would be more friendly.
II. The Rise of Female Appointments to Arbitral Panel
a. Dr. Ben Davis
Davis next identified the issue that women were not being chosen for
arbitral panels. He noted that qualified women were being struck from
lists right away and he asked the panelists what steps women could take to
overcome the vicious cycle of not getting picked for lack of experience.
b. Richard Naimark
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Mr. Nairmark stated that the pattern will change very soon, because
international law firms have more experienced women handling cases and
getting exposure in the system. There is a class of women who are rising
in seniority.
c. Ike Ehiribe
Mr. Ehiribe stated that as a practitioner in England, he also believed
gender issues are changing. In addition, African institutions are making a
conscious effort to involve more women in the arbitral process. He
suggested that there is progress in the right direction.
d. Adedoyin Rhodes-Vivour
Ms. Rhodes-Vivour stated that there are both explicit and implicit biases
against women and emphasized the importance of guarding against those
biases. She suggested that one way to combat those biases include
mentorship relationships and the value of sponsoring women to attend
various events.
Mr. Naimark provided statistics: Only 16% of commercial dispute panels
consist of women and only 16% of arbitration appointments go to women.
e. Rachel Clarke
Ms. Clarke recognized that 90% of the time, a woman’s first appointment
is made by institutions so there is a way to address this issue. Clarke noted
that there is no “one-size fits all” rule because of regional and cultural
differences. Clarke suggested that a quota or requirement may be another
step towards addressing the issue of gender inequality.
f. Calvin Hamilton:
Mr. Hamilton stressed the importance of a changing mindset. For example,
in Switzerland and France women professionals are always present in the
selection process and are frequently appointed. Hamilton reiterated that a
part of the gender inequality issue also comes from the fact that it was a
group or “old club” of European and American men who traditionally
handled these cases, so it will take time to make changes.
g. Possible Solutions for Gender Inequality Issue from Audience Members
One participant stressed the importance of having experienced female
arbitrators to act as mentors and sponsors for women new to the field.
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Another participant suggested that there is a need to track and publish
information about which countries are appointing women. This would
provide law firms with additional incentive to train and support women in
high-stakes, international cases.
III. Arbitral Appointments in Africa
a. Ike Ehiribe
Mr. Ehiribe characterized African arbitral appointments as a “dire
situation.” He stated that for proceedings requiring a tribunal, African
states did not appoint an African arbitrator 81% of the time. In addition
administrative bodies do not choose African arbitrators, either. Rather,
African states choose to appoint international lawyers, which he
characterized as an African problem.
b. Adedoyin Rhodes-Vivour
On that point, Ms. Rhodes-Vivour noted that Nigeria has made lots of
progress and there is a trend where African arbitrators are being appointed.
An audience member also commended the Nigerians for their progress and
their continued representation at conferences around the world.
c. Suggestion from audience member:
Conference participant stated that the best way to tackle the issue of
appointing African arbitrators was to encourage African states to engage
early and appoint counsel early. He cited a study that suggested where the
state acts early, the African arbitrators had a higher success rate.
IV. Emerging Trends in Africa: Opportunities for African Arbitrators
a. Calvin Hamilton
While acknowledging that African countries can be very discriminatory to
each other, Mr. Hamilton said that the nationality or gender will not matter
if the arbitrator is the best person for the matter at issue under the
circumstances. He stressed that as long as that person has knowledge and
ability, then he or she should be appointed. He emphasized the need to set
up a system where qualified African arbitrators could be put on the radar
for potential appointments.
b. Ike Ehiribe
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Mr. Ehiribe agreed that experience trumps nationality and gender. He
emphasized the need for Africans to invest time, resources, and expertise
in developing African arbitrators and to encourage initiatives with the
government or private entities to develop that individual capacity. He also
stated that young lawyers must have the chance to observe, learn, and be
involved in cases alongside the international law firms. If such
opportunities are provided, African arbitrators will then be empowered.
c. Suggestion from Audience Member
Audience member expressed that from a law firm perspective, he would
have no objection to bringing on an African lawyer to observe and assist
with cases; however, he noted that the issue was financial. He suggested
that perhaps Bar Associations could set up funds to underwrite expenses
for foreign lawyers to come to the firms to assist in the cases.
d. Calvin Hamilton
Hamilton highlighted the importance of a mentorship or training program.
He suggested that young lawyers should develop their own strategy and
seek opportunities through groups or law firms to gain experience and
meet potential mentors.
V. Recommendation to encourage Diversity and Inclusion
The panelists agreed that it would be a good idea to have institutions publish “score
cards” that indicate the kinds of people who are being appointed.
a. Question from audience with regards to diversity and inclusion of lawyers who
may face discrimination based on any and all of the following classifications: race,
gender, religion, disability.
i. Rachel Clarke
Ms. Clarke stated that in terms of being an individual who may be
a part of multiple underrepresented groups, it is essential for the
individual to recognize that those unique qualities are resources.
They allow the individual to draw in support from many different
groups. The benefit of finding a mentor, preferably somebody who
shares some of your own experiences or characteristics, is that it
allows you to see that the end goal is possible.