Resolver

1 THERESOLVER | November 2010

THERESOLVERT H E Q U A R T E R L Y M A G A Z I N E O F T H E C H A R T E R E D I N S T I T U T E O F A R B I T R A T O R S

Scotland launches new centre for international arbitrationChanges to UK employment law will bring opportunities for mediatorsWhy the uprisings in the Middle East are good news for the rule of lawLegal round-upHow to deal with insolvency and arbitration www.ciarb.org May 2011

ADR in construction -How deep

has the impact of recession

been on demand?

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www.alvarezandmarsal.com

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The Law Society of NSW is the largest direct membership association for solicitors in Australia.

www.lawsociety.com.au

The Law Society of NSW is proudly sponsoring the Gala Dinner of the Chartered Institute of Arbitrators Asia Pacific Conference 2011.

26–28 May 2011 – Sydney Australia

www.ciarb.org/conferences/asia-pacific

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LEADERWELCOME TO THIS edition of The Resolver, which covers a variety of topics, including workplace mediation (p6) and the opportunities it aff ords commercial and civil mediators, as employers look for cheaper and more eff ective ways of resolving disputes at work. Interest in this sector is growing and CIArb now off ers courses on workplace mediation, both for the beginner and the experienced practitioner. See → www.ciarb.org/education-and-training/course-fi nder/ for details.

There is also an in-depth look at ADR in construction, (p10) asking how demand for adjudication has stood up in the fi nancial crisis as well as examining other forms of ADR that are becoming popular. Elsewhere, we off er a practical piece advising on the issues involved in dealing with an insolvent party in arbitration proceedings (p14).

This year has started off as a busy one for me, as President, with visits to the Indian Branch (in Hyderabad and Delhi) and to the New York, Washington, South Eastern, and Houston Chapters of the North American Branch (p16).

Early spring will see me speaking in Frankfurt to the German-American Lawyers’ Association Conference; in London for the UK and European Branch Chairs’ meeting and the annual meeting of the London Branch; at the Willem C Vis (East) Moot in Hong Kong; and then the Willem C Vis Moot in Vienna, which will

see me arbitrating, speaking at associated events, and hosting a CIArb participants' function at the British Embassy. At the end of last month I attended engagements with the Japan Chapter in Kyoto and Tokyo. On behalf of all members of CIArb, I would like to convey my deepest sympathy and concern for those aff ected by the devastating natural disaster that has befallen the country.

I have been greatly impressed by the energy of all of the branches and chapters I have visited so far. I feel privileged to play a role in encouraging the Institute's global outreach.

Doug Jones AM FCIArb President

“I have been greatly impressed by the energy of chapters and branches I have visited so far”

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© THE RESOLVER is published on behalf of the Chartered Institute of Arbitrators (CIArb) by Redactive Publishing Ltd (RPL), 17 Britton St, London EC1M 5TP. This magazine aims to include a broad range of opinion and professional issues and articles do not necessarily refl ect the views of CIArb nor should such opinions be relied upon as statements of fact. All rights reserved. This publication may not be reproduced, transmitted or stored in any print or electronic format, including but not limited to any online service, any database or any part of the internet, or in any other format in whole or in part in any media whatsoever, without the prior written permission of the publisher. While all due care is taken in writing and producing this magazine, neither CIArb nor RPL accept any liability for the accuracy of the contents or any opinions expressed herein. Printed by Pensord Press Ltd ISSN 1743 8845

CIArb ENQUIRIES

WATCH4-5 News: CIArb members join Crossrail panel; EU Mediation Directive deadline looming6-7 Analysis: Mediation at work may be on the rise due to changes in UK employment law9 Law round-up: Nanjing Tianshun Shipbuilding Co Ltd v Orchard Tankers PTE Ltd; Fulham Football Club v Sir David Richards

OPINION8 Essam Al Tamimi: The recent Middle East uprisings are likely to be good news for the rule of law in these countries17 My toughest dispute; Best of the ADR blogs

REGULARS AND FEATURES10 Cover: How has ADR in the construction sector been affected by the global downturn?14 How to... deal with insolvency and arbitration15 CIArb news: including the latest from branches 18 What’s on: round up of upcoming training courses

CONTENTS

Doug Jones

May 2011 | THERESOLVER 3

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4 THERESOLVER | May 2011

WATCH

The adjucation panel will take a partnership approach to help parties resolve issues effi ciently

Crossrail adjudicators ready for actionCIArb members have been appointed to an adjudication panel to manage disputes that may arise in a £16 billion railway project for LondonThe Crossrail project, the largest construction project in Europe, includes 118km of new railway track and 37 stations, eight of which will be brand new central London stations and others upgrades, 11 of which are major reconstructions. At the peak of construction it is estimated that Crossrail will employ as many as 14,000 people.

All contractors involved are required to comply with the Crossrail Construction Code. In addition, an independent Crossrail Complaints Commissioner has been appointed who will decide on any public complaints about Crossrail construction that cannot be resolved.

However, the scale of the project led Crossrail Ltd to ask the Institution of Civil Engineers (ICE) to establish and manage an independent Crossrail Adjudication Panel. This comprises 14 members, any one of whom may be appointed as adjudicator by agreement between the parties, or failing which, by nomination by the ICE. Each member underwent a rigorous selection process.

Crossrail Ltd chose ICE to develop and manage the Crossrail Adjudication Panel because of its neutral position and because it drew up the NEC form of contract.

Adjudicators will act under the terms of the NEC3 Adjudicator’s Contract. NEC3 provides for a partnering-based approach for resolving issues and disputes, to help parties discuss and resolve issues effi ciently, potentially avoiding the need for adjudication.

Adjudicators, once appointed, will be able to consult the ICE dispute resolution panel for procedural guidance.

The panel includes a diverse range of construction professionals including architects, civil engineers, mechanical and electrical

engineers, quantity surveyors, structural engineers and lawyers. Among its members are: Peter Aeberli FCIArb, Chartered Arbitrator; Daniel Atkinson FCIArb; Gordon Bathgate FCIArb, Chartered Arbitrator; Peter Chapman FCIArb, Chartered Arbitrator; Peter Cousins FCIArb, Chartered Arbitrator; Christopher Dancaster FCIArb, Chartered Arbitrator; Brian Holloway FCIArb, Chartered Arbitrator; Robert Isherwood FCIArb; Niall Lawless FCIArb, Chartered Arbitrator; David Loosemore MCIArb; John Marrin QC FCIArb, Chartered Arbitrator and Alan Turner FCIArb.

Brendan Van Rooyen, Dispute Resolution Services Manager at the ICE will be administering the panel.

Update provided by CIArb Trustee Niall Lawless FCIArb

CIArb’s Costs of International Arbitration Survey is still live. It aims to highlight where and how costs are incurred and ways to make international arbitration more cost effi cient. To participate visit → www.ciarb.org/conferences/costs

Robert Gordon University (RGU) in Aberdeen will be the fi rst Scottish University to off er an online LLB from September. The course is accredited by the Law Society of Scotland and adds to the growing list of RGU online programmes, including a number which are accredited by CIArb.

Derek Auchie MCIArb, Senior Lecturer in Law and online LLB course leader said: “Our experience with online learning has inspired us to expand our distance off ering. This will be a premium online course aimed mainly at graduates and is designed to be available to graduates of any discipline and from any jurisdiction. We have already attracted applications from all around the world.

“This is an exciting time for online learning and this course will employ new, interactive technology, including synchronous online seminars. Lectures will be delivered via presentations supported by audio, creating a classroom environment.”

Applications are accepted until 30 June. For more information on the course please contact Derek Auchie email [email protected]

‘Exciting time’ for online learning

CROSS

RAIL

£

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Scotland ‘to take lead in arbitration’ thanks to government-backed centreA new Scottish Arbitration Centre will help the country become a world leader in international arbitration, according to Scottish ministers.

The centre, which opened in Edinburgh in March, is backed by the Scottish government, CIArb, the Faculty of Advocates, the Law Society of Scotland and the Royal Institution of Chartered Surveyors.

This new facility will build on the Arbitration (Scotland) Act 2010 to give Scotland a world-class legal framework for arbitration, stated the government. Fergus Ewing, Community Safety Minister, said at the launch: “With its distinguished legal tradition, innovative

“Three years and four changes of solicitor later, I issued an agreed award dismissing the claim and counterclaim” → See my toughest dispute, by Neville Tait FCIArb, on page 17

The deadline is looming for EU member states to implement new rules for EU cross-border mediation. Member states (except Denmark, which opted out) have until 21 May to implement the EU directive. The directive does not apply to UK domestic mediation. We now know some of what is proposed in England and Wales and, separately, in Scotland. In both jurisdictions, the changes will not be extended to UK domestic mediation.

In England and Wales, a Statutory Instrument (SI) eff ective from 6 April makes changes to the Civil Procedure Rules. It gives eff ect to mediation settlements being enforceable but only where the parties have agreed and whether or not there are proceedings (Article 6). It states the rules that will apply where a person seeks disclosure of evidence arising from a mediation (Article 7). There is no provision for Article 4 (the quality of mediation), Article 5 (recourse to mediation) or to the fi rst part of Article 7 (confi dentiality of mediation and mediators not being called to give evidence). There is nothing about Article 8 of the directive (extending the limitation period during a mediation) but it is understood that draft amendments to the Limitation Act will shortly be published to give eff ect to that article.

In Scotland, a draft SI called ‘The Cross-Border Mediation (Scotland) Regulations 2011’ has been published. That draft SI proposes giving eff ect to Article 7 (confi dentiality of mediation and mediators not being called to give evidence) and sets out draft amendments to the law of Scotland as to limitation and prescription periods (Article 8). The draft SI does not deal expressly with any other articles of the directive.

It follows that implementation may well be diff erent in Scotland and in England and Wales.

Cross-border rules change in the offi ngReport by David Cornes FCIArb

legislation and ready access to advice and facilities, Scotland is well placed to compete as an attractive and cost-eff ective venue for arbitration on the global stage.”

Richard Farndale MCIArb, Honorary Secretary and Treasurer of CIArb’s Scottish Branch, said: “Through its Scottish Branch, CIArb is delighted to support the formation of the Scottish Arbitration Centre. This new venture will drive forward the promotion of arbitration in Scotland, following opportunities arising from the new Arbitration (Scotland) Act 2010.”

The centre’s headquarters are in Dolphin House, in an offi ce owned by City of Edinburgh Council.

Edinburgh is home to the Scottish Arbitration Centre, which opened in March

Right to replyI refer to Ben Beaumont’s response in the Feb 2011 issue to my opinion article in the previous issue. He was not to know it was based on an address to the AGM of the Wales Branch, the fuller argument being more comprehensive, and that it referred to data from Glasgow Caledonian University.

That data had not been updated to show that the number of adjudications in 2008 was the 1,432 he mentions, before he adds

that the number is falling year on year. The question is whether the fall is due to adjudication reducing disputes or encouraging their settlement, or whether parties are resorting to other procedures, possibly mediation. If it is the latter, it seems illogical to claim that adjudication works, and, of course, for simple payment disputes the fall might have resulted from outlawing pay-when-paid clauses and not from the introduction of statutory adjudication.

As for activity in the Technology and Construction Court in 2010, in the May 2010 edition of Arbitration Kenneth T Salmon refers to an avalanche of cases in the last quarter of 2009 and suggests the trend continued in early 2010. In 2009 Coulson J in Primus v Pompey aired his fears that adjudication was in danger of revisiting some of the ineffi ciencies of the past, where the costs outweighed the claim.

Whether the contractor is to be blamed for directing disputes to

adjudication after completion does not alter the fact that the procedure has not lived up to the billing given to it, including by Lord Ackner.

I do not claim adjudication does not work in any circumstance, but if it had worked in all circumstances this debate would be unnecessary. It would have worked better if government had also excluded the right to raise cross-claims in the same proceedings.

Derek Griffi ths FCIArb

READER FEEDBACK Email letters [email protected]

DRE

AMST

IME

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6 THERESOLVER | November 2010

NEWS ANALYSISWORKPLACE MEDIATION

THE BENEFITS and opportunities of ADR are being pushed centre stage in the UK by a government keen to fi nd ways of saving money and cutting red tape.

Proposed reforms to the civil justice system have put a greater focus on mediation and ADR (see The Resolver, February 2011) particularly in respect of family court procedures. But an additional raft of changes to employment legislation is also giving rise to a greater push towards mediation, highlighting the role it can play in workplace disputes.

Last month, consultation ended on seeking views on measures for resolving workplace disputes. This included asking for views on how to achieve earlier “resolution of workplace disputes so that parties can resolve their own problems, in a way that is fair and equitable for both sides, without having to go to an employment tribunal”.

This key strand is being seen as paving the way for mediation at work to take on a much more prominent role, shifting employers’ mindset about the part it can play and its eff ectiveness.

It could signal a great opportunity for mediators, according to Clive Lewis ACIArb, Managing Director and Founder of Globis Mediation Group. This is not just for specialist workplace mediators, but for civil and commercial mediators too.

“This review is the biggest thing to have happened in this country for promoting mediation. It’s a very exciting time for our industry as there is likely to be a huge increase in demand,” says Lewis, who is also a trained and accredited civil and commercial mediator.

TThis also coincides with a

rise in confl ict at work. While various factors, including vastly strengthened employment legislation, have shifted workplace relationships to being more rights-based over a number of years, causing a steady rise in the number of disputes at work, there has been a much sharper upturn during the recent fi nancial crisis.

A survey on confl ict management released last month by Europe’s largest HR professional body, the Chartered Institute of Personnel and Development (CIPD), concluded: “The fi ndings confi rm the scale of workplace confl ict is remarkable and has increased in the recession.”

The number of management days and HR time spent on addressing confl ict issues has risen since 1997, from 13 to 18 days for disciplinary cases and from nine to 14 days for grievance.

Lewis says: “People are now much more likely to talk about their workplace rights and how the law protects them. They are also more likely to lodge a grievance, rather than try to have a dialogue with their colleague about how their relationship can get back on track.”

This is where mediation at work has a role. Essentially it is all about options and ways to get relationships on an even keel.

The business case is proven. “When an organisation embraces the concept of confl ict resolution and mediation, everyone is likely to win,” Lewis says. Failure to resolve or address disputes at work can contribute to lower levels of productivity, customer service, employee engagement and lead to higher levels of sickness or absence, he adds.

Organisations in the CIPD survey also reported additional benefi ts, including reducing or eliminating the stress involved in using more formal processes, and avoiding costs in defending claims. The latter is crucial, of course. Lewis cites the example of one private sector organisation where 12 in-house mediators were trained at a cost of under £30,000. In just one year the fi rm saved £517,000 as a result of improved confl ict management.

While the use of mediation at work is not new, awareness is still relatively low, according to Judith Hogarth, an independent

“In just one year, the fi rm saved £517,000 as a result of confl ict management”


Mediation at work is on the rise as changes to UK employment law raise its profi le. So what are the opportunities for mediators?

Work in progress

IMAG

E: IS

TOCK

Globis Mediation Group is delivering workplace mediation courses for CIArb for complete beginners, as well as conversion courses aimed at more experienced practitioners. For details see → www.ciarb.org/education-and-training/course-fi nder/

See also the story on page 15. Clive Lewis’s latest book, Resolving Workplace Confl ict: 12 Stories, is out now.

MOREINFO

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workplace mediator and qualifi ed solicitor. The CIPD survey showed that almost half of organisations that have used workplace mediation at some point have increased its use over the past two years. But while Hogarth agrees it is catching on, it is still fairly under-used. Although she says: “Once organisations become familiar with mediation they tend to come back. The government changes will defi nitely stimulate interest and raise awareness.”

And workplace mediation is not just a UK phenomenon, Lewis says. “The US and several other countries are more advanced in this area. There is some catching up to do in this country, although we have some leading thinkers on the topic,” he says.

Amid this growing interest, ‘conversion courses’ for commercial and civil mediators to become accredited workplace mediators are becoming more popular. But what is the crossover between the discipline of workplace mediation and civil or commercial mediation? And to what extent is workplace mediation even recognised as

a distinct mediation discipline requiring further training?

Workplace mediation is an umbrella term for two aspects of mediation at work: employment mediation and workplace mediation (see panel below).

Each requires a diff erent skillset, explains Lewis. In workplace cases, where you may be dealing with high levels of emotion because people have fallen out and they want to be listened to, a mediator role crosses with that of a facilitator in negotiating a joint discussion. By contrast, in employment cases it is more about negotiating a deal, the terms of an employee’s exit from the organisation.

Undeniably there is debate in the industry about whether diff erent skills really are required for workplace mediation – and whether conversion courses are necessary. But Lewis says: “Increasingly, people understand – and are convinced – that there is enough of a diff erence in the workplace area that warrants a conversion of skills. Mediators have an obligation to provide a duty of care to parties in a dispute and it’s a serious matter if the mediator cannot get it right.”

The main diff erence is in the area of negotiation, he adds. “You might go through hours in a workplace case listening to


1. ‘Employment mediation’ refers to a mediated dispute in the workplace where the settlement is about how to manage someone leaving the organisation, for example, with a compromise agreement. Or, it could be used for someone that has left the organisation but is taking their dismissal to an employment tribunal, in which case mediation would seek to agree terms of settlement.

2. ‘Workplace mediation’, on the other hand, is where there is an ongoing relationship and the mediation explores how colleagues, of which there might be two or more, can get their relationship back on track.

It is possible for a dispute to start as a workplace case but end up as an employment case.

THE TWO ASPECTS OF WORKPLACE MEDIATION

someone express their emotion as a result of how they feel they have been treated. But they may not be seeking fi nancial compensation – they may just want an apology. These cases require softer skills.”

There is a defi nite crossover of skills in the employment-dispute scenario. Lewis says: “The set-up here is familiar territory for commercial mediators since the emphasis is on negotiation around legal rights. You are more likely to be in a room with an employee and an employee representative,” he says.

More generally, workplace mediation shares some key tenets with other forms of mediation, such as the ability to listen, ask questions, explore issues and fi nd routes on which to negotiate, and fi nd ways to translate an agreement in principle into specifi cs.

But this common ground only serves to highlight the opportunities available for mediators wanting to expand their expertise and make the most of current legislative and cultural changes in the workplace arena.

“There is much more interest in workplace mediation. Now is the time,” says Hogarth. �

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OPINIONMIDDLE EAST UPRISINGS

SOME PEOPLE MAY FIND IT diffi cult to make sense of the sudden uprisings of the Arab people and the dramatic changes that have been happening in the Middle East towards democracy.

The current movement in the Arab world is neither a coup nor is it initiated by foreign forces. It has come as a surprise to Western intelligence agencies, as it is not led by any particular party or leader.

The eff ect of the current situation has been powerful, stretching beyond each aff ected country even to those nations that are relatively stable. The movement was led by students fed up with the corruption endemic in their systems (in particular the leadership); rising unemployment; the over-use of secret service and intelligence facilities and the excess use of the police force. The last 30-40 years have seen leadership in Arab countries, which were supposed to be democratic republics, being dominated by members of elite ruling families, which in turn has undermined the whole system and the democratic concept.

Continuous years of interference in the judicial and legislative processes and elections – to the extent that the judicial and legislative systems either totally collapsed or became part of the executive power of the president

Essam

Al Tamimi– also caused those states to experience a deterioration in their social and economic power, becoming totally dependent on foreign aid.

The street movement started with Tunisia, followed by Egypt demanding changes. Due to the demographic similarity, the common religion, the Arabic language and in many cases the unifi ed race of most of the Arab nationals, the movement spread on within days, progressing into

other Arab states in an almost identical fashion, to countries such as Algeria, Yemen, Bahrain, and the Sultanate of Oman.

Even in countries that are stable (those within the Gulf Cooperation Council) changes are being made in favour of democracy and for the creation of jobs. It is likely that the same will follow throughout the Arab World – Syria and Morocco have already moved to introduce laws to off er their people a better life.

At the same time, due to lack of experience in democracy in the Middle East over the last 400 years and in some states a lack of education and qualifi ed people, it is inevitable that countries embracing democracy as a result of uprisings on the streets will soon be suff ering from setbacks and internal clashes. The cost will be high, the process slow, and

Essam Al Tamimi FCIArb is Senior Partner at Al Tamimi & Company in Dubai. He is also Chairman of the UAE Branch

The eff ect of the current situation has

been powerful, stretching beyond

each aff ected country even to

those nations that are relatively stable

there will be many lessons learnt in the coming months.

However, the process will prove to be great news for transparency in the legal and political systems throughout the Arab world. Gradually there will be increased respect for the importance of the rule of law, the independence of the judicial system and the free media.

It is likely we shall now see rapid improvement in the judicial and legislative system through an elected democratic process. This will have a tremendous eff ect on the rule of law in the area and entire legal system, which will bring us closer to the structure currently at work among the international community, in particular, the western world.

The only question that remains is whether the Islamic movement in the Arab world will get a piece of the cake. It is likely that on a short-term basis and due to the democratic process, the Islamic movements will have a percentage of the seats within each parliament and a similar involvement in future governments. However, it is unlikely to be in any radical way, nor is it expected that the Islamic movement will have full control of a government or the people in most Arab countries.

Although most Arab countries have been, and are, Islamic in nature this is unlikely to have signifi cant eff ect on the legal and judicial systems which come out as the biggest victor in the current revolutions taking place. �

The past months have seen dramatic movements towards democratisation unfold in the Arab world. While it will be painful in the short term, it is good news for the rule of law

ONLINE

Join the debate at → www.ciarb.org/forum

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THE PROCEEDINGS arose out of a shipbuilding contract between Nanjing Tianshun Shipbuilding (NTS) and Orchard

Tankers PTE (OTP). The contract provided for arbitration in London. OTP paid the fi rst four instalments under the contract against the background of a refund guarantee issued by a Chinese bank.

A dispute arose between NTS and OTP regarding the delivery of the vessel, and OTP purported to exercise its right to cancel the contract by reason of delay in delivery. NTS sought to dispute OTP’s entitlement to cancel the contract and refused to repay the instalments. OTP contended that NTS’ claim should have been made by bringing arbitration proceedings within a 30-day period pursuant to article X of the shipbuilding contract. Article X stated: “The seller shall have the right to dispute the buyer’s cancellation and/or rescission by instituting arbitration in accordance with article XIII, if such institution of arbitration is made within 30 days of the buyer’s cancellation and/or rescission”. NTS alleged, however, that a failure to bring arbitration proceedings within that period did not bar its right to dispute the cancellation but merely barred the remedy to be obtained by way of an arbitral award. NTS also maintained the arbitral tribunal, whose appointment it instigated, lacked jurisdiction to determine the legitimacy of OTP’s cancellation given its own failure to commence arbitration within 30 days. It challenged the jurisdiction of the tribunal under section 67 of the Arbitration Act 1996 and, in the alternative, sought permission to appeal against awards made by that tribunal under section 69.

FULHAM FC was competing with Tottenham Hotspur FC to secure the transfer of Peter Crouch from Portsmouth FC.

Fulham alleged that Sir David Richards, the chairman of the FA Premier League, interfered in the transfer negotiations and took action to facilitate the player’s move to Tottenham – in preference to a bid put forward by Fulham – thereby breaching the League’s articles of association and rules. Fulham sought to bring the matter before the courts by way of an unfair prejudice petition under Section 994 of the Companies Act 2006. The club argued that Richards and the Premier League (as a result of its failure to take adequate action to prevent Richards’ conduct) had acted unfairly towards its members by promoting the interests of one club over another. Fulham sought an injunction to restrain Richards from participating in future transfer negotiations and an order that he cease being the chairman or a director of the Premier League. Richards and the Premier League applied for a stay of the unfair prejudice petition under section 9 of the Arbitration Act 1996 on the grounds that the issues raised in the petition fell within the scope of the arbitration agreements contained in the rules of the Football Association and the Premier League’s rules, respectively. The court was required to weigh two directly confl icting decisions, namely Re Vocam Europe Limited [1998] BCC 396 and Exeter City v Football Conference [2004] 1 WLR 2010, which ignored the earlier decision in Vocam and concluded that the right to bring an unfair prejudice petition before the courts cannot be altered or removed by contract.

○ THE JUDGEMENTThe court held that a contractual time limit for instituting arbitration may raise some diffi culties. In determining whether failure to comply with the time limit bars either the right or the remedy, the court referred to Mustill and Boyd’s The Law and Practice of Commercial Arbitration, second edition, which states: “The Court will lean in favour of construing them as ‘claim-barring’ rather than ‘remedy-barring’ ”. The court refused NTS’ application under section 67 and denied leave to appeal under section 69.

○ WHAT IT MEANSThis case provides guidance on the meaning and eff ect of a contractual time limit for instituting arbitration. While the court indicated that the absence of expressly barring words is not conclusive, it appears English courts will adopt the guidance in Mustill and Boyd that such time limits are “claim-barring” rather than “remedy-barring” – preferring the views of McNair J in Metalimex Foreign Trade Corp v Eugenie Maritime Ltd [1962] 1 Lloyd’s Rep. 378, to Roche J in Pinnock Bros v Lewis and Peat Ltd [1923] 1 K.B. 690.

Report by Tony Marks, MCIArb Director of Legal Services and Julio César Betancourt MCIArb, Head of Research and Academic Aff airs at CIArb.

Full judgement available at: → www.bailii.org/ew/cases/EWHC/Comm/2011/164.html

○ THE JUDGEMENTThe court held Exeter had been wrongly decided and the decision in Vocam should be followed. In Vocam the court granted a stay of an unfair prejudice petition on the basis it related to matters of dispute which were covered by an arbitration clause contained in a shareholders’ agreement entered into between the parties. It was decided the disputes raised in the petition fell within the scope of the arbitration agreements, and therefore the stay of the court action in favour of the arbitration agreement was granted.

○ WHAT IT MEANSThis decision confi rms the position that disputes which would otherwise be raised through an unfair prejudice petition before the courts can be referred to arbitration. It also refl ects the pro-arbitration stance of the English courts by recognising that parties should be free to agree how their disputes are resolved. However, parties seeking to rely on arbitration agreements contained in shareholders’ agreements should not assume the court will grant a stay of an unfair prejudice petition in all situations.

Report by Chris Parker, Partner, dispute resolution and Ben Jolley, Associate, international arbitration group at Herbert Smith LLP.

The full article is available at: → www.herbertsmith.com

LAWROUND-UP

○ ARBITRATION

○ ARBITRATION

THE CASE

THE CASE

Fulham Football Club v Sir David Richards [2010] EWHC 3111 (Ch)

Nanjing Tianshun Shipbuilding Co Ltd v Orchard Tankers PTE Ltd [2011] EWHC 164

An overview of recent key court cases

FAILURE TO COMPLY WITH CONTRACTUAL TIME LIMITS FOR COMMENCEMENT OF ARBITRATION

SHAREHOLDERS’ UNFAIR PREJUDICE DISPUTES MAY BE ARBITRATED

Time limits are “claim-barring”

rather than “remedy-barring”

Parties should be free to agree how

their disputes are resolved

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ADR IN CONSTRUCTIONTHE FINANCIAL CRISIS

DEMAND FOR dispute resolution

in construction is generally counter-cyclical. It is widely accepted that when contracts become scarcer, companies attempt to recover losses that they might have previously merely regarded as a business cost.

That may be true for normal fl uctuations in the business cycle. It seems to have applied at the beginning of the deep global fi nancial crisis (GFC) we are currently living through. But in the protracted collapsed bubble of the UK construction sector, demand for adjudication has unexpectedly declined (see graph on page 12).

Statutory adjudication (under the Housing Grants, Construction and Regeneration Act 1996, amended 2009) is the construction industry’s most popular and successful ADR tool used mainly to maintain cash fl ow. Not only are adjudication decisions statute-backed but the

Building back upBy Greg Bousfield Illustration: Brett Ryder

In construction itself the result has been a slide in project approvals, and a rise in cancellations

Demand for construction fell through the fl oor during the recession. But has the trend been the same for ADR in the sector?

process is quick and relatively cheap. Adjudication aimed at achieving a quick interim decision, which was to be fully resolved in subsequent arbitration or litigation. However, few decisions are taken further – another reason for satisfaction with adjudication.

Yet with trading conditions as they are, more recourse has been made to cheaper ADR methods such as mediation, not least because the cost of adjudication is growing. Litigation, sought out more frequently, has also often been settled with mediation or just simple negotiation.

The media is now using mild terms for the GFC like “downturn”. But that description is far removed from what has happened to construction over the period, as the UK Offi ce for National Statistics (ONS) fi gures show.

In contrast to new private housing construction orders in the years 2005-7, which averaged £3.75 billion annually, during 2009 orders caved in to £1.2 billion and have now recovered slightly to hover around the £1.5 billion mark.

Private non-housing excluding infrastructure orders (private commercial) peaked in 2006 and again in 2008 at more than £8 billion annually. This fi gure roughly halved in 2009 and has only been making a very cautious recovery. Private industrial orders also approximately halved from an average of about £1.8 billion immediately prior to the crisis.

Public and private infrastructure orders initially held up far better, but are now sliding. Changes to government planning policies and general government cutbacks seem certain to add to that in the future.

The situation for private housing and private commercial sectors improved slightly in 2010. But the Council of Mortgage Lenders says funding conditions will remain challenging. With large sums of borrowing under state schemes such as the Syndicated Loan Scheme due to be repaid from April this year there is little prospect of any mid-term turnaround.

Building company insolvencies appear to have peaked in 2009, although they are still rising in Scotland which entered the crisis later than in England and Wales. Business services employment has been amongst the hardest hit across the board which, of course, includes construction-associated industries and dispute resolution professionals.

In construction itself the result has been a slide in project approvals and a rise in cancellations, delays and scope-backs.

The upshot for adjudication is that referrals have stalled (aside from a peak early in the crisis) more quickly than the contraction in construction workload, according to

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The upshot for adjudication is that referrals have stalled (aside from a peak early in the crisis) more quickly than the contraction in construction workload



research from the Glasgow Caledonian University Adjudication Reporting

Centre (GCUARC). This corresponds with practitioners’ experience.

“The industry was certainly expecting a big jump in adjudications but that hasn’t eventuated,” says adjudicator Chris Dancaster FCIArb. As well as direct fi nancing problems, “fi rms may also simply be too busy trying to get work or may have laid off the support staff that normally deal with claims,” he says.

Those who are still working may not be motivated to claim. Practitioners paint a picture of a money-strapped industry trying not to make waves and upset precarious cash fl ows. The costs and risks of adjudication itself also play a role in reluctance to claim.

Parties may hold off as long as possible, says Nigel Grout FCIArb, an arbitrator, adjudicator and quantity surveyor in civil infrastructure construction. “Perhaps some people are just choosing to go to adjudication only on disputes that have, to some extent, run their course,” he says.

Underbidding has clearly signifi cantly increased and it was thought that this should also generate disputes as contractors attempt to claw back margins through variation claims. This has apparently been counteracted by fears of losing future work and the fear of an adjudication going the wrong way. Contractors may simply be settling for continued cash fl ow.

“I think underbidding happens more with smaller, unsophisticated employers who use a contractor for a one-off job. In these circumstances they may put in big variation claims,” says engineering and construction disputes specialist Dr Robert Gaitskell QC

FCIArb, a barrister practising from Keating Chambers. “But often adjudicators will refuse these claims, leaving the contractor in dire straits because he doesn’t have the funds he needs.”

It’s not surprising then that practitioners say they are having more trouble getting fees from clients since the GFC started.

Has the fl at demand for adjudication been to the gain of other resolution tools aside from simple negotiation?

Demand for mediation services in construction has reportedly increased during the GFC, although to what extent is diffi cult to assess.

The dispute-prone sector is not particularly mediation friendly, not least because parties perceive adjudication to be quicker and more fi nal. Amid diffi cult trading conditions parties

are also likely to come to dispute resolution with hardened positions and not the willingness to compromise required for mediation. Mediators see that as a professional challenge.

“Demand for mediation is limited in the construction industry,” Grout says. “It’s rarely written into contracts. Adjudication is the process everyone is aware of and likes. On the other hand, people will get exposed to mediation because it is actively encouraged by the courts, so it could become more popular in construction.”

As well as most areas of civil law, a pre-action protocol applies to parties seeking to litigate in the UK’s specialist construction court, the Technology and Construction Court (TCC). But in the absence of comprehensive data it is not yet clear whether the GFC has encouraged greater use of mediation in resolving the higher number of applications received during the last two years.

However, mediation may also be discouraged by the absence of a pre-action protocol for statutory adjudication. Steve Bond FCIArb, European Chair of Covington & Burling’s Arbitration Practice Group says the process may be easier to broach if required by legislation.

“The biggest obstacle to mediation is that no-one wants to be the fi rst to propose it because they see it as a sign of weakness,” he says. “So having it as an option as a pre-trial requirement in the UK and some other countries is a very good idea.”

As the project size grows, mediation seems to become more acceptable. Practitioners argue mediation might have a major advantage in the GFC because it allows for fl exible settlement. Less is known about how often agreements might later fall apart.

“In Dubai, for example, parties who are often big UK contractors have been initiating mediation in disputes where pushing too hard will just send the other side into bankruptcy,” Gaitskell says. “So it’s actually better to take a mediated deal to get the money in a few years time.”

As mediation expands internationally, cultural expectations can signifi cantly aff ect how it is approached. It may lend itself particularly well to situations where both sides want to save face, if not future business relations.

“Arbitration and courts don’t really work that well in Dubai. It’s hard to get the money even if you win,” says Nicholas Gould FCIArb, partner at specialist construction law fi rm Fenwick Elliott and Chairman of CIArb’s Adjudication Sub-Committee. “It’s much better to have dialogue, and mediation is suitable for that. But you need to take longer and talk things through

Demand for mediation in construction has increased during the GFC, although to what extent is diffi cult to assess

ADR IN CONSTRUCTIONTHE FINANCIAL CRISIS

Number of adjudication referrals each year from 1998

SOURCE: GLASGOW CALEDONIAN UNIVERSITY ADJUDICATION REPORTING CENTRE

2500

2000

1500

1000

500

0Year 11998-1999

Year 21999-2000

Year 32000-2001

Year 42001-2002

Year 52002-2003

Year 62003-2004

Year 72004-2005

Year 82005-2006

Year 92006-2007

Year 102007-2008

Year 112008-2009

Year 122009-2010

TIME PERIODS RUN FROM MAY-APRIL



THERESOLVER

so everyone has the situation straight in their minds. In the UK we are more concerned with pinning things down on paper. Hopefully mediation will take off in Dubai and be more successful than the formal methods.”

“In the UK you can generally wrap up a mediation in a day,” Gaitskell says. “In China or Taiwan, if you arbitrate, you could lose and also lose face. There you need a week for mediation. You have to build consensus from scratch. You have to look at every issue from various sides until you have covered the whole ground. But although it takes longer, you get the same sort of success rates as mediation elsewhere.”

Bond notes that while multi-tiered dispute resolution clauses in contracts make sense, mediation is a very long way from being standard in international contracts which still overwhelmingly give preference to arbitration.

“Mediation can contribute to a prompt resolution of the dispute but it doesn’t always arrive at the desired result. However, it’s good to have a menu of options and increasingly people are expressing interest in mediation because they don’t want to go to a fully-fl edged arbitration.”

Grout points out that the UK construction industry was also fairly chary about adjudication when it fi rst appeared as a replacement for arbitration. “Writing mediation into contracts would obviously give the industry a push in that direction.”

A popular ADR method also making a fairly recent debut on the UK construction scene are dispute boards. A dispute board is “typically a group of professionals appointed by the parties to a construction project, often a civil engineering contract, process plant or major infrastructure project,” according to John Wright FCIArb, Joint Head of the Construction and Engineering group at Bird & Bird LLP.

Dispute boards exist in one of two forms: a dispute review board (DRB) or a dispute adjudication board, (DAB) the main diff erence being that DRBs give recommendations whereas DABs make interim binding decisions.

Standing dispute boards are more expensive – three or four industry specialists are appointed on a retainer and visit regularly to detect and resolve confl icts before they become disputes. The fact the group is appointed for the entire duration of a project is what makes it more costly. Ad hoc dispute boards however are appointed only once a dispute arises. DRBs, much more prevalent in the US, according to

Wright, were fi rst used in the US in the 70s. The fi rst use outside of the US was in the 1980s for World Bank-funded development contracts. DRBs are expensive compared with other ADR processes but they are increasingly run on smaller projects in the US with only one board member.

“Dispute boards are now fairly standard in any large long-term construction project,” Bond says. “DRBs were used extensively in the Channel Tunnel project and were very successful in resolving almost all disputes before they got to arbitration. The World Bank model provides for dispute review boards, they have proven to be very useful, perhaps expensive, but worthwhile in terms of avoiding more costly arbitration.”

Gaitskell believes long-term presence of DRBs as part of a project may dampen down spurious confl icts and claims arising in recessionary periods. Practitioners do however report a jump in preference for ad hoc boards.

“With people wanting to get their money quickly and cheaply, we’ve seen an increase in ad hoc adjudications by about 25 per cent,” Gaitskell says. Grout comments that while the process may be more popular at the moment, it is still a distinct second best to the Construction Act variant. “This is the cheaper version of adjudication. It doesn’t have the court backed guarantees attached to statutory adjudication. For that reason I don’t think it will take off ,” he says.

Although arbitration has increased for larger international disputes, adjudication has superceded domestic construction arbitration in the UK. The LCIA, for example, reports that its case load increased 87 per cent in 2008/2009 over the previous 24-month period but the great bulk of this was made up of international arbitration. Streamlined processes such as the Society of Construction Arbitrators’ 100-day arbitration procedure are reportedly fi nding

little use.The GFC has driven demand

for cheaper ADR processes and served to more acutely highlight the pros and cons of all the

options. However the position of adjudication as the dominant form of dispute resolution in the construction sector is not set to change in the foreseeable future. The GFC has been something of a judgement on the rising costs of adjudication, but it still remains relatively inexpensive, quick and, of course, enforceable compared with some alternatives.

Will the number of disputes start to rise again as liquidity returns? One change that may trigger an increase in disputes is the inclusion of sustainability clauses in construction contracts in the UK as the government tries to hit targets to address climate change. Although experts are divided on how much ADR activity this might lead to. “Disputes might occur as to whether a contractor has sourced a particular contract from a sustainable source, but I don’t see it as a big growth area ,” says Jonathan M Cope FCIArb, director of construction dispute resolution service provider MCMS.

It may not be the next big thing but it will certainly be an area to watch.

Greg Bousfi eld is a freelance legal journalist


HOW TO…

1 ⁄ Prior insolvency Diff erent legal

systems characterise insolvency as being either territorial (relating only to assets located in the jurisdiction where the insolvency proceedings take place) or universal (involving assets anywhere in the world). With a territorial insolvency, it may still be possible to commence arbitration proceedings where there are assets outside of the jurisdiction of the insolvency. However, where an insolvent party’s assets are located in the same jurisdiction as the arbitration proceedings, there is a danger of an anti-arbitration injunction being imposed by the domestic court.

2 ⁄ Powers of the administrator Where a potential

respondent is in administration (but prior to liquidation) national legislation frequently provides that the administrator has the power to decide if that respondent can be a party to arbitration. However, since international arbitration is independent of national courts, it may still be possible to enforce an arbitration agreement even without the administrator’s consent. This is particularly the case if the seat of arbitration is diff erent to the insolvency jurisdiction.

3 ⁄ Subsequent insolvencyWhere insolvency

proceedings are commenced during the course of arbitration proceedings, most jurisdictions provide for the stay of ongoing proceedings; however, national courts diff er as to whether international arbitration falls within the defi nition of ‘proceedings’. It may be in a claimant’s interests to appear before the insolvency court and try to obtain permission to proceed with the arbitration. In any event, arbitrators are not necessarily bound by court orders, particularly when the seat of the arbitration is outside the jurisdiction of the insolvency. In some cases, a tribunal may continue with an arbitration even if the national court dealing with the respondent’s insolvency has ordered a stay.

4 ⁄ Serving respondents Claimants must

take particular care to ensure an insolvent respondent is properly served with proceedings, and also serve the proceedings on any administrator. Where an insolvent respondent does not participate in the proceedings, the claimant should be ready to explain to the

tribunal all the measures taken to contact the respondent.

5 ⁄ SecurityWhile some arbitration rules

enable tribunals to order that a respondent provides security for all or part of the amount in dispute, a tribunal may well refuse to order security in the case of an insolvent respondent, since this would put the claimant on an unequal footing with the respondent’s other creditors.

6 ⁄ CostsAn insolvent party will often make no

payment towards the costs of the arbitration, leaving the claimant to make substitute payments and bear all the expenses of the case. Any such payment is unlikely to be recoverable prior to the tribunal rendering an award.

7 ⁄ Confl icts of interestThe claimant should

check whether there is any potential confl ict of interest between the arbitrators and the administrators. Such situations may disqualify an arbitrator from further involvement in the proceedings, and it may be necessary to replace an arbitrator or continue with a truncated tribunal.

In 2008, the catastrophic eff ect of the credit crunch spread to most world economies. As in previous recessions, insolvency has aff ected rising numbers of individuals and companies, and parties to agreements to arbitrate are increasingly likely to fi nd themselves dealing with insolvent companies. What are the issues to bear in mind?

…deal with insolvency and arbitration By Sarah Walker and Chris Stone Illustration: Cameron Law

Sarah Walker MCIArb is a Partner and Chris Stone an Associate in Bird & Bird’s International Arbitration Group, in London

P14 THERESOLVER | May 2011

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November - CIArb Alexander Lecture will be held. The speaker will be The Right Hon The Lord Phillips of Worth Matravers, PC, President of The Supreme Court and CIArb’s new Patron (see also story below).To register your interest email [email protected]

16th

Lord Phillips to be Patron

Course hailed as a success

CIArb is delighted to announce that The Right Hon The Lord Phillips of Worth Matravers, PC and President of The Supreme Court has accepted an invitation to become CIArb’s Patron.

This is the Institute’s most senior ambassadorial position which is carefully chosen and appointed by the Institute’s Board of Trustees.

Lord Phillips takes over from Prof Dr Karl-Heinz Böckstiegel. He is the fi rst President of The Supreme Court, having been Senior Law Lord from 1 October 2008. He was previously the Lord Chief Justice of England and Wales.

He began his second stint as Lord of Appeal in Ordinary in October 2008. Before that Lord Phillips served as a Judge of the High Court of Justice, Queen’s Bench Division from 1987 to 1995, where he sat in the Commercial Court and presided over the Barlow Clowes and Maxwell prosecutions.

He was promoted to the Court of Appeal in 1995 and elevated to Lord of Appeal in Ordinary on 12 January

1999, then appointed Master of the Rolls and Head of Civil Justice on 6 June 2000, a post he held until 2005.

Lord Phillips will serve as Patron at CIArb for the next three years.

CIArb Director General Michael Forbes Smith MCIArb said: “We are delighted that The Rt Hon The Lord Phillips of Worth Matravers, PC President of the Supreme Court, has done the Institute the signal honour of agreeing to become our Patron. His acceptance adds lustre to the distinguished line of patrons, Mrs Anson Chan and Professor Dr Karl-Heinz Böckstiegel, since the 2005 Royal Charter’s introduction.”

CIArb’s delivery of the Introduction to International Arbitration course in Bahrain last year has proved successful – with a pass rate of 82 per cent.

The training, which was run at the request of the Bahrain Chamber of Dispute Resolution (BCDR-AAA), took place throughout October and November 2010. Seventy-three candidates submitted an assignment, with 60 passing the course and becoming Associate members.

The course was fi rst run in 2009 and is delivered entirely in Arabic.Anita Phillips ACIArb Education and Training Manager at CIArb, said:

“International courses are very important to us, providing an opportunity to off er the benefi ts of Associate membership worldwide.”

CIArb NEWS

There’s still time to sign up for CIArb’s Asia Pacifi c Conference 2011: ‘Investment and Innovation in International Dispute Resolution,’ which takes place in Sydney 27-28 May. The two-day forum will consider challenges and opportunities for international dispute resolution practices driven by reform and regional investment. For more about the conference programme and speakers, as well as early-bird booking until 30 April visit→ www.ciarb.org/conferences/asia-pacifi c/

ONLINE

Workplace mediation training launchedCIArb has introduced new workplace mediation training, off ering courses for the complete beginner to the more experienced practitioner.

A range of courses culminating in accreditation in workplace mediation are now available, from one-day introductory courses to fi ve-day courses that will equip delegates with the skills to be an accredited and competent workplace mediator.

A three-day conversion course is also aimed at civil/commercial mediators looking to add workplace and employment mediation to their portfolio.

CIArb has appointed Globis Mediation Group as its workplace mediation training partner. Managing Director and Founder Clive Lewis ACIArb, will be leading the training. He has been a workplace mediator for eight years and is the author of The Defi nitive Guide to Workplace Mediation and the recently published Resolving Workplace Confl ict: 12 Stories. Candidates will learn both the theory and practice of workplace mediation. To fi nd out more go to → www.ciarb.org/education-and-training/course-fi nder/

From left: Leslie Alekel ACIArb and Michael Forbes Smith MCIArb sign a contract with Clive Lewis and Jack Fallow from Globis Mediation Group

Lord Phillips will serve for three years

Competition for writersA student writing competition has been organised in conjunction with the annual symposium convened by the Center for the Study of Dispute Resolution at the University of Missouri School of Law.

The competition is being sponsored by CIArb’s North American Branch and off ers a $300 prize to the competition winner, who may also see their winning submission published in CIArb’s Journal, together with other symposium papers. Further information on criteria for submissions can be found at → www.law.missouri.edu/csdr/symposium/2011/writing.html

This year’s symposium held by the University of Missouri School of Law, will be held on 21 October. It is entitled, ‘Border Skirmishes: The Intersection Between Litigation and International Commercial Arbitration.’ and will feature Gary Born as keynote speaker as well as expert panellists from Canada, Austria, Switzerland and the United States. An associated works-in-progress conference for academics and scholarly-minded practitioners is scheduled for 20 October. → www.law.missouri.edu/csdr/symposium/2011

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NORTH AMERICA

US visitsSeveral North American Chapters welcomed visits from CIArb’s President Doug Jones. During his visit to Washington DC, Doug spoke at Georgetown University Law Center on the role of party-appointed experts in international arbitration and then met with the Investment Claims Team of the Offi ce of International Claims and Investment Disputes of the US Department of State.

In New York, he attended a dinner hosted by the New York Chapter. Doug also attended a dinner hosted by the Texas Chapter in Houston,

where he, Ben Sheppard MCIArb, Chairman of the Texas Chapter, Jim Lawrence MCIArb, Head of the Blakely Advocacy Institute at the University of Houston Law Center and Ann Ryan Robertson FCIArb, Chair of the North American Branch discussed the NAFTA Moot that will take place this fall.

The following day, Doug addressed a joint meeting of the Texas Chapter and the Houston International Arbitration Club. During his visit to the Southeast Chapter, Doug addressed the Miami International Arbitration Society. Individual NAB Chapters have been preparing for the Vis and other moots.

EAST ASIA

Korean courseIn February the Institute joined forces with the Korean Commercial Arbitration Board and the Korean Council for International Arbitration to stage Seoul’s fi rst Specialist in International Arbitration course.

During the fi rst fi ve days of the course, local experts met with nearly 100 law students and lawyers to contribute 20 two-hour classes, in Korean and English, covering international arbitration procedure and law. On the sixth day, Louise Barrington FCIArb and Christopher To FCIArb joined Benjamin Hughes MCIArb, co-chair

of the ADR unit of Shin & Kim, in conducting a one-day Introduction to Arbitration course. Those who successfully complete the post-course assignment will be eligible to join the institute as Associates.

In January, the East Asia Branch Young Members Group visited the Dialogue in the Dark Exhibition Centre in Mei Foo to experience a journey of ‘living in the dark’ . The exhibition’s goal is to build bridges between people with and without disabilities and to turn sympathy into respect. It included a tour in complete darkness, being guided by VIPs – visually-impaired persons.

For longer versions of branch news → www.ciarb.org/branch-news

President praises India BranchCIArb’s President, Doug Jones AM FCIArb was welcomed by the Indian Branch in February. Chairman Lalit Bhasin FCIArb and Honorary Secretary Chandrakant Kamdar FCIArb organised a series of events including meeting with the branch’s board and other members to discuss branch activities and ways of enhancing CIArb’s infl uence in India.

Although the branch has good links with the ADR community it is looking to expand its geographic reach in India by, for example, including members on its board from other parts of the country, currently not represented.

Opportunities for co-operation between the Indian Branch and other branches, for example Dubai, Singapore and Australian Branches, in the training of arbitrators and mediators in India was also explored with the President.

On 9 February, Doug Jones, Lalit Bhasin and Chandrakant Kamdar visited the Amity Law School and addressed more than 300 students and staff on the role of CIArb and

INDIA

aspects of international commercial arbitration. In the evening a reception was organised by the India Branch, attended by eminent representatives of the legal profession and business leaders.

The President’s visit also included a meeting with other Indian ADR organisations including LCIA India and the International Centre for Alternative Dispute

Resolution to further the links between the Indian Branch and Indian ADR organisations.

Doug Jones said it was clear from discussions with the branch, Indian lawyers, in-house counsel and representatives of commerce that there is a real need for reform of dispute resolution in India and that the India Branch is playing an important role in furthering this objective.

President Doug Jones with India Branch which is playing a key role in ADR reform

CIArb NEWSBRANCH ROUND-UP

NORTH WEST, UK

A busy yearThe North West Branch enjoyed an active year in 2010. Events included presentations; the annual NW Branch Arbitrators’ and Adjudicators’ Surgery and also a mediation surgery which looks likely to be a regular feature.

A mock trial in conjunction with the CIOB was also held. Three dinners were organised – thanks go to the Dinner Chairman, Peter Dale FCIArb. Chairman Ian Williams FCIArb has been active in new membership initiatives. Honorary Secretary Michael Conway FCIArb will be standing down at the 2011 AGM, due to other commitments.

SCOTLAND, UK

Professions uniteThe Scottish Branch was one of 15 professional bodies that worked together to hold a networking event in February in Edinburgh. Thanks go to colleagues from the Law Society of Scotland, Chartered Institute of Bankers in Scotland, and the Institute of Chartered Accountants in England and Wales. Nearly 200 delegates heard Hamish Taylor of the Skills Exchange Network give a lively presentation.

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17 THERESOLVER | November 2010 May 2011 | THERESOLVER 17

IN PRACTICEMY TOUGHEST DISPUTE

1 ⁄ ADR should be outside legal systems Christopher WhitelawRecent reforms in Victoria and New South Wales in

Australia place more emphasis on early ADR. They require the parties and their lawyers to confi rm certain things have happened using ADR before the courts will allow them to progress further down the litigation track.

In the current debate about access to justice and the cost, ADR is mostly considered a mere component in the ‘legal system’ that exists to dispense ‘justice’ in civil and commercial disputes. This confi nes ADR to being considered in the legal paradigm of access to justice. But the best potential for ADR in civil disputes lies in using it outside the legal system.

The debate should, in my view, be considering how to harness the power of ADR before any access to justice via the judiciary or tribunals. Then many of the problems around access to justice would disappear.

To see full blog ADR and Access to Justice Part 2, 13 March 2011,visit → http://www.chriswhitelaw.com.au/blog/Christopher Whitelaw is a barrister and commercial disputes resolver in Sydney

2 ⁄ When should arbitrators mediate?Justin D’AgostinoShould arbitrators be permitted to serve as mediators of

the disputes they might ultimately determine? To those from common law traditions, the idea of combining the roles is rather alien, whereas in civil law jurisdictions, this is a relatively well accepted practice.

There are certain advantages to arbitrators facilitating the settlement of their disputes, such as the effi ciency of disposing of disputes amicably. Since arbitrators will be familiar with the case, they should be equipped with the sensitivity required to settle the matters in dispute. Balanced against this are a number of potential drawbacks to med-arb/arb-med. There is a (certainly perceived) risk that overseeing a mediation may threaten an arbitrator’s impartiality.

To see full blog Mediator-arbitrators: the perfect match or no love lost?, 15 February 2011, visit → http://kluwerarbitrationblog.com/Justin D’Agostino is Partner, Dispute Resolution at Herbert Smith LLP in Hong Kong

3 ⁄ Mediation’s golden era is nowConstructPRO UKThe UK government has announced the closure of more

than 150 courts to save £15 million a year in upkeep. But as more companies face disputes, what alternative do they have to legal action?

The answer is mediation. Ireland recently estimated that it could save €200 million of public money on legal costs by employing mediation instead of litigation. Kenneth Clarke, the UK Justice Secretary, has said that ADR has a role to play in the future of the justice system. So, is mediation the new black? Has the time come for mediation to step up? I believe there has never been a better time for mediation to shine.

To see full blog Mediation is the New Black, February 2011,visit → http://www.constructpro.com/blogConstructPRO UK LLP is a UK-based construction and property solutions provider

Follow CIArb and take part in the debate at:

twitter.com/Ciarb linkedin.com

BEST OF THEADR BLOGS

IT STARTED OFF so well as an appointment by agreement in a construction arbitration. Three years, 79 letters, two security for costs applications, 15 orders for directions, four changes of solicitor by the claimant, a twice-postponed hearing and a mediation later, I issued an agreed award dismissing the claim and counterclaim.

Could I have prevented this? Judge for yourselves. I was appointed in March of year one and set out a timetable with a hearing provisionally fi xed for January of year two. The claimant was subject to a company voluntary agreement and, unsurprisingly, the respondent made an application for security for costs against the claimant.

In July, I ordered the claimant to provide security for the period up to the close of pleadings and amended the timetable so the respondent was not required to serve their defence until a fi xed period following the provision of the security. The security was not provided on time but, mindful of the claimant’s fi nancial position, I granted further time followed by a peremptory order which was not complied with. A second order granted a short extension on condition the claimant paid for the costs wasted to date. The security was provided in February of year two, so I issued an award dealing with the wasted costs. By now, the claimant had instructed a new

Neville TaitFCIArb, Principal of JN Tait Associates, specialist in construction disputes

solicitor, who was replaced by a non-legal representative and then by another solicitor. By July, the claimant was in administration and so entered solicitor number four.

I was asked to return all fi les to this solicitor so they could review and re-submit the statement of case. It was not until May of year three that I was able to issue directions including a hearing for October.

Just days before the hearing, the claimant applied for an adjournment on the grounds they were not ready, since the parties had agreed to suspend preparation in order to hold a mediation which, ultimately, was unsuccessful. The respondent denied that this agreement existed. I adjourned

the hearing and heard submissions as to which party should be responsible for the wasted costs. By this time, the claimant had

appointed solicitor number fi ve. In November, I issued directions

requiring the claimant to pay the wasted costs and fi xed a hearing date for May of year four. In March, the parties advised me they had reached a settlement on a ‘walk away’ basis and I issued a fi nal agreed award dismissing the claim and counterclaim.

Throughout I had felt that the claimant’s case had some merit and did my best to keep the arbitration alive. With hindsight, it would probably have been to the claimant’s fi nancial benefi t if I had dismissed the claim in year one for failure to provide security for costs.

By July, the claimant was in administration and the administrator

appointed solicitor number four

Claims, counterclaims and the comings and goings of solicitors led to this construction dispute becoming a real challenge

UK

facebook.com www.ciarb.org/forum

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WHAT’S ONTRAININGCIArb professional training diary – May 2011–October 2011

Further information on all professional training courses can be found at: → www.ciarb.org/course-fi nderEducation Team • T + 44 (0)20 7421 7439 • F + 44 (0)20 7404 4023 • E [email protected]

ONLINE

2011MAY11thARBITRATIONIntroductionThis course provides candidates with an understanding of the general principles of arbitration.Duration: 1 dayFee: £499 + VATLocation: Birmingham

12thINTERNATIONAL ARBITRATIONIntroductionProvides an understanding of the principles of international arbitration.Duration: 1 dayFee: £499 + VATLocation: Birmingham

17thMEDIATIONModule 1 – Workplace mediationAimed at candidates who wish to become a CIArb Accredited Workplace Mediator.Duration: 5 daysFee: £2,595 + VATLocation: London

23thMEDIATIONAccreditation courseThis assessment programme is organised by the European branch of CIArb and provided by CIArb's mediation training provider, Facilit8. It is aimed at candidates who wish to become both a CIArb Member and a CIArb Accredited Mediator, and who want to represent clients in mediation.Duration: 5 days May, 3 days JuneFee: €2,500 (£2,183), €1,500 (£1,309) Location: Geneva

28thINTERNATIONAL ARBITRATIONModule 1 – Law of obligations and civil evidenceProvides candidates with a robust understanding and appreciation of the key, relevant aspects of the local jurisdiction's legal system.Duration: 7 monthsFee: €1500 + VATLocation: Geneva

31stMEDIATIONModule 2 – Workplace mediation accreditation assessmentAn assessment programme aimed at candidates who wish to become a CIArb Member and CIArb Accredited Mediator. It is aimed at those seeking to add workplace mediation to their skills portfolio.Duration: 1 dayFee: £1,295 + VATLocation: London

JUNE13thARBITRATIONModule 4 –Award writingProvides suffi cient knowledge of and practice in all the requirements for the writing of a fi nal, reasoned and enforceable arbitration award in a commercial dispute.Duration: 4 monthsFee: £999 + VATLocation: London

13thINTERNATIONAL ARBITRATIONModule 4 – Award writingProvides suffi cient knowledge of and practice in all the requirements for the writing of a fi nal, reasoned and enforceable arbitration award in a commercial dispute.Duration: 4 monthsFee: £999 + VATLocation: London

29th & 30thARBITRATIONAccelerated route to FellowshipProvides a fast-track route to Fellowship through the domestic arbitration pathway.Duration: 2 daysFee: £1549 + VATLocation: London

29th & 30thINTERNATIONAL ARBITRATIONAccelerated route to FellowshipProvides a fast-track route to Fellowship through the international arbitration pathway.Duration: 2 daysFee: £1549 + VATLocation: London

JULY6th & 7thARBITRATIONAccelerated route to MembershipA fast-track route to Membership through the domestic arbitration pathway.Duration: 1.5 daysFee: £999 + VATLocation: London

24thINTERNATIONAL ARBITRATIONModule 4 –Award writingDuration: 4 monthsFee: Dhs 10,000Location: UAE

SEPTEMBER10th-18thINTERNATIONAL ARBITRATIONDiploma in International Commercial ArbitrationProvides a thorough understanding of the practice and procedure of international commercial arbitration and award writing.Duration: 9 daysFee: £5998 + VATLocation: Oxford

21stARBITRATIONIntroductionDuration: 1 dayFee: £499 + VATLocation: Manchester

22ndINTERNATIONAL ARBITRATIONIntroductionDuration: 1 dayFee: £499 + VATLocation: Manchester

OCTOBER4thMEDIATIONIntroductionProvides candidates with an understanding of the general principles of mediation.Duration: 1 dayFee: £499 + VATLocation: London

5thADJUDICATIONIntroductionProvides candidates with an understanding of the general principles of adjudication.Duration: 1 dayFee: £499 + VATLocation: London

5th-7thMEDIATIONWorkplace mediation conversion courseProvides an understanding of the theory of mediation in the workplace.Duration: 3 daysFee: £1395 + VATLocation: London

10thARBITRATIONModule 1 - Law of obligations and civil evidenceProvides candidates with a robust understanding and appreciation of the key, relevant aspects of the local jurisdiction's legal system and approach to obligations and evidence that infl uence, shape or otherwise have a bearing on how disputes may be treated and resolved according to law.Duration: 7 monthsFee: £1549 + VATLocation: London

10thINTERNATIONAL ARBITRATIONModule 1 - Law of obligations and civil evidenceProvides a robust understanding and appreciation of the key, relevant aspects of the legal system.Duration: 7 monthsFee: £1549 + VATLocation: London

10thADJUDICATIONModule 1 – Law of obligations and civil evidenceProvides a robust understanding of the key, relevant aspects of the legal system.Duration: 7 monthsFee: £1549 + VATLocation: London

10thARBITRATIONModule 2Provides candidates with a detailed knowledge and understanding of the law of arbitration.Duration: 5 monthsFee: £999 + VATLocation: London

10thADJUDICATIONModule 2Provide candidates with a detailed knowledge and understanding of the legal and procedural principles involved in statutory adjudication.Duration: 5 monthsFee: £999 + VATLocation: London

10thARBITRATIONModule 3To provide detailed knowledge of and guided practice in the main procedural elements involved in a commercial arbitration, so that

successful candidates are profi cient in giving independent advice.Duration: 6 monthsFee: £1549 + VATLocation: London

10thINTERNATIONAL ARBITRATIONModule 3To provide detailed knowledge of and guided practice in the main procedural elements involved in a commercial arbitration.Duration: 6 monthsFee: £1549 + VATLocation: London

10thMEDIATIONModule 3To ensure candidates have suffi cient knowledge of the relevant legal system and mediator-related laws to comprehend the context of the dispute.Duration: 6 monthsFee: £1549 + VATLocation: London

10thADJUDICATIONModule 3To provide detailed knowledge of the main procedural elements of statutory and contractual adjudication.Duration: 6 monthsFee: £1549 + VATLocation: London

18th-20thADJUDICATIONAccelerated route to FellowshipTo provide a fast-track route to Fellowship through the adjudication pathway.Duration: 3 daysFee: £1549 + VATLocation: London

21-23rdINTERNATIONAL ARBITRATIONAccelerated route to MembershipAccelerated route to FellowshipDuration: 2.5 daysFees: to be advisedLocation: Montreal, Canada

31stARBITRATIONModule 4 - Award writingDuration: 4 monthsFee: £999 + VATLocation: London

31stINTERNATIONAL ARBITRATIONModule 4 –Award writingDuration: 4 monthsFee: £999 + VATLocation: London

31stADJUDICATIONModule 4 - Decision writingTo provide suffi cient knowledge of and practice in all the requirements for the writing of a fi nal, reasoned and enforceable decision.Duration: 4 monthsFee: £999 + VATLocation: London

Courses are held in the UK unless otherwise indicated. Information on all courses can be found online at: → www.ciarb.org/course-fi nder

KEY: � ARBITRATION � ADJUDICATION � MEDIATION � INTERNATIONAL ARBITRATION � COMMERCIAL DISPUTE RESOLUTION

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AUSTRALIA’S PROJECT MANAGEMENT EXPERTS

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Mark Griffith - SydneyT +61 2 9299 9978

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Chris Stitt - BrisbaneT + 61 7 3255 0071

E [email protected]

MELBOURNE BRISBANE� �

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Our highly qualifi ed and awarded international arbitration team has a proven track record in providing simple solutions to complex international disputes.

We are single-minded when it comes to resolving issues for our clients. Irrespective of the issues at hand or the jurisdiction in question, our team is ready to assist with anything from drafting arbitration clauses to providing practical dispute management.

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CIArb Asia Pacific Conference 2011Investment and Innovation: International Dispute Resolution in the Asia Pacific

27 – 28 May 2011Sofitel Sydney Wentworth, Australia

Early bird booking rates available until 30 April 2011www.ciarb.org/conferencesCIArb’s Asia Pacific Conference 2011 is a dynamic two day forum which will considerchallenges and opportunities for international dispute resolution practices driven by reform andregional investment.

Speakers include:The Hon. Justice James Allsop, President, New South Wales Court ofAppeal, Australia; The Hon. Murray Gleeson AC, former Chief Justice of the High Court ofAustralia (Gala Dinner Speaker); Lord Peter Goldsmith QC, Former Attorney General,England, Wales and Northern Ireland & Head of European Litigation Practice, Debevoise &Plimpton, UK; Doug Jones AM FCIArb, President of CIArb 2011; Yu Jianlong, ViceChairman & Secretary-General China International Economic and Trade ArbitrationCommission; Cheng-Yee Khong, Hong Kong Director and Counsel of the ICC InternationalCourt of Arbitration Asia; Damian Lovell, General Counsel BHP Billiton, Australia; The Hon.Robert McClelland MP, Attorney General of Australia; Peter Rees QC FCIArb, LegalDirector of Royal Dutch Shell plc, The Netherlands; Rashda Rana FCIArb, General CounselAustralia & Project Management & Construction, Bovis Lend Lease, Australia – and many more!

For multinational companies and industry groups, international dispute resolution is an integralpart of good business practice. As the world emerges from the global financial crisis,investment and innovation are key to reshaping and rebuilding. With the rapid growth ofinternational trade, progressive legislative reform and technological innovation in disputeresolution, all eyes focus on the Asia Pacific region.

Who Should Attend?■ Judges and arbitrators

■ Practitioners in internationalcommercial arbitration andmediation

■ Corporate counsel and LegalDirectors of corporationsengaged in international trade

■ Lawyers advising corporationsengaged in international trade

■ Practising lawyers

■ Policy Makers

■ Regional Regulators

■ Investors

■ Financiers

■ Chief Executives and Senior Managers

W: www.ciarb.org/conferences E: [email protected] T: +44 (0)20 7421 7427

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Principal Sponsor:

Gala Dinner Sponsor: Networking Reception Sponsor: Welcome Reception Sponsor:

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