Resolver Autumn 2011

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

CIArb’s costs of international arbitration survey: the fi ndingsWill the ongoing economic crisis result in a greater role for ADR in the banking and fi nance sector? Relief over Jivraj v HashwaniLegal round-upHow to handle electronic records www.ciarb.org November 2011

Commanding respect –Captain Sliwa

Michael on the perils of negotiating with Somali

pirates

p01_cover.FINAL.1.indd 1p01_cover.FINAL.1.indd 1 25/10/11 08:53:1625/10/11 08:53:16

Show us a hotel room that comes with its own cheese grater.

Call us now on 0845 30 96 285 www.sacoapartments.co.uk

From only £78per night

In comparison to hotels, serviced apartments offer a real home from home for business and leisure travellers, giving you more...

Flexibilitystay from 1 night

to 1 year

Choicestudio,1, 2 and 3 bed options in over 100 UK

locations

Spacebags more space than most hotel

rooms

Valuegreat nightly rates

and no hidden extras

RES.10.11.002.indd 1RES.10.11.002.indd 1 25/10/11 09:29:3425/10/11 09:29:34

LEADERWELCOME TO THE latest issue of The Resolver. In this edition you will fi nd articles on the key fi ndings of CIArb’s Costs of International Arbitration 2011 Survey (see page 4), what the latest ADR trends are in the fi nance and banking sector (see page 6), advice on handling electronic records (see page 14) and our usual round-up of the latest news and updates from the branches (see page 16).

My presidential activities have continued apace since the last issue came out in the summer. They have included meeting with most of the Australian State Attorneys General to encourage them to quickly enact the new proposed Uniform Domestic Arbitration Law in Australia; working with Professor Phillip Capper FCIArb to deliver the annual International Commercial Arbitration Diploma Course at Oxford; visiting branches in

the UK including the western counties and the Channel Islands; chairing the UK Branch Chairs’ meeting in London; and presiding at the landmark “Costs of International Arbitration” Conference in London, at which details of CIArb’s Costs of International Arbitration 2011 Survey were unveiled, as well as many issues concerning the effi ciency and cost of international arbitration debated by experts from around the world.

I continue to be encouraged by the global outreach and relevance of CIArb and enthusiasm of members

for the very important activities of the Institute. The remainder of my Presidential year promises to be busy in the UK, the Middle East,

North American and Asia.As this will be my last Presidential introduction may I say that it has been a great privilege

and pleasure to serve as President of CIArb. I would like to take this opportunity to welcome my successor Jeff rey Elkinson FCIArb from Bermuda, the President of CIArb for 2012.

Doug Jones AM FCIArb President of CIArb

“I continue to be encouraged by the global outreach and relevance of CIArb”

CONTACTSRedactive Publishing Ltd17 Britton Street, London EC1M 5TPT: +44 (0)20 7880 6200

EDITORIALT: +44 (0)20 7880 6200E: [email protected]

Editor: Rima EvansSub editor: Victoria Burgher Art editor: Adrian TaylorPicture editor: Sam Kesteven

ADVERTISING Sales manager: Steve GriceT: +44 (0)20 7880 6220E: [email protected] executive: Edward TaylorT: +44 (0)20 7880 6243E: [email protected]

PUBLISHING DIRECTORJason GrantE: [email protected]

PRODUCTIONProduction manager: Jane EastermanDeputy production manager: Kieran Tobin

Chartered Institute of Arbitrators12 Bloomsbury Square, London WC1A 2LP, UKT: +44 (0)20 7421 7444E: [email protected]: www.ciarb.org

MEMBERSHIP T: +44 (0)20 7421 7447E: [email protected]

COURSES & QUALIFICATIONS T: +44 (0)20 7421 7439E: [email protected]

LEGAL SERVICES T: +44 (0)20 7421 7424Sandra GreenawayE: [email protected]

MARKETING, COMMUNICATIONS & SPONSORSHIP T: +44 (0)20 7421 7488Sarah BallE: [email protected]

EVENTST: +44 (0)20 7421 7427E: [email protected]

ROOM HIRET: +44 (0)20 7421 7423Giles AndrewsE: [email protected]

DISCLAIMER: The contents of this publication are not intended to be a substitute for either general or specifi c legal advice on individual matters, and readers are strongly encouraged to seek competent legal advice.

Registered Charity N0− 803725

© 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: Arbitration survey sparks costs debate; ICC arbitration rules updated6-7 Analysis: How the ongoing economic crisis is affecting ADR in the banking sector9 Law round-up: Excalibur Ventures LLC v Texas Keystone Inc & Ors; Lanes Group plc v Galliford Try Infrastructure Ltd

OPINION8 Adam Samuel: Should the debate end despite the decision on Jivraj v Hashwani?17 My toughest dispute; Best of the ADR debate

REGULARS AND FEATURES10 Cover: Captain Sliwa Michael talks about the negotiation of his life – dealing with Somali pirates14 How to... handle electronic records15 CIArb news: Director General Michael Forbes Smith MCIArb retires18 What’s on: round-up of upcoming training courses

CONTENTS

Doug Jones

November 2011 | THERESOLVER 3

p03 contents.FINAL.indd 3p03 contents.FINAL.indd 3 25/10/11 08:56:2525/10/11 08:56:25

4 THERESOLVER | November 2011

WATCH

The launch of CIArb’s survey exploring the costs of international arbitration has highlighted the need for “an ongoing exercise in transparency in arbitration cost”, according to CIArb’s President Doug Jones AM FCIArb.

The survey – based on 254 international arbitrations conducted between 1991 and 2010 – was launched at CIArb’s Costs of International Arbitration Conference in London in September. Most respondents (which included party representatives and tribunal members) were from the UK (32 per cent) and wider Europe (20 per cent), with the rest from Asia, the Middle East, Africa, North America and Australasia.

The survey showed that claimant costs averaged nearly 10 per cent higher in the rest of Europe compared with the UK. External legal fees were more than 26 per cent higher and common costs – such as arbitrators’ fees – were over 18 per cent higher in Europe than in the UK. Party costs were returned as around 13 per cent higher in civil law countries than common law countries.

These controversial fi ndings caused debate at the conference

and led to an agreement between CIArb and the Swiss Arbitration Association to build on the fi ndings by joining in an ongoing eff ort to increase the transparency of international arbitration costs.

Other fi ndings of the survey showed that claimants spent 12 per cent more than respondents, and that the average length of an arbitration was between 17 and 20

months. The survey also found that at least 50 per cent of claims were between £1,000,000 and £50,000,000, while at least 75 per cent of arbitral awards were for £10,000,000 or less.

One major outcome of the conference was recognising the need for international arbitrators to have a “tool kit” to develop fl exible procedures designed to

John Wright FCIArb, Chair of the Board of Trustees at CIArb, presents the survey results at the Costs of International Arbitration Conference

We don’t like paying for irrelevant factual exploration. When you read an award a few points seem to be decisive. Robert Webb QC, Chair of Autonomy Corporation Plc at CIArb’s Costs of International Arbitration conference

New ICC arbitration rules address international need

Arbitration survey sparks costs debateCIArb’s fi ndings highlight the need for early understanding of dispute issues

suit each arbitration. Potential tools include effi cient deployment of experts, limited production of documents, time-limited hearings, expeditious delivery of awards and transparency by institutions regarding the performance of arbitrators.

Jones said: “There is no longer any doubt that costs are an issue for users of international arbitration. Key to the process is a need to gain a deeper understanding of the issues early on in a particular dispute, in order to design processes to fairly and expeditiously resolve those issues.”● The CIArb Costs of International Arbitration 2011 Survey is available at: → www.ciarb.org/s/costs-survey

The ICC has launched a revised version of its rules of arbitration aimed at better serving the needs of businesses and governments engaged in international commerce and investment.

The rules, last updated in 1998, come into force on 1 January 2012.

Approved in Mexico City by the ICC World Council in June, additions to the rules include

that the arbitral process is conducted in an expeditious and cost-eff ective manner.

To address the growing demand for a more holistic approach to dispute resolution techniques, the rules are published in a booklet that also includes the ICC ADR Rules, which provide for mediation and other forms of dispute resolution.

Both sets of rules defi ne a structured, institutional framework intended to ensure transparency, effi ciency and fairness in the dispute resolution

process while allowing parties to exercise their choice over many aspects of procedure.

John Beechey FCIArb, Chair of the ICC International Court of Arbitration, said: “It is one of the principal aims of the International Court of Arbitration to ensure that its rules promote effi ciency in the arbitral process and that they refl ect current practice, consistent with the overriding objective of doing justice between the parties.”● To download a copy of the ICC Rules of Arbitration go to: → www.iccwbo.org/ICCDRSRules

CRED

IT

provisions to address disputes involving multiple contracts and parties; updated case management procedures; the appointment of an emergency arbitrator to order urgent measures; and changes to facilitate the handling of disputes arising under investment treaties and free trade agreements.

Other amendments have also been made to the rules to ensure

Breakdown of party costs in international arbitration

SOURCE: CIArb

63%EXTERNAL LEGAL 11%

BARRISTER

8%EXTERNALEXPENSES

5%WITNESS10%

EXPERTS

3%MANAGEMENT

p04.FINAL.indd 4p04.FINAL.indd 4 25/10/11 08:58:4725/10/11 08:58:47


Changes to Construction Act mean oral contracts can go to adjudication

New regulations on securities arbitration in Qatar have come into force. While Qatari rules of arbitration are in urgent need of revision, partial modernisation took place recently by issuing a decree relative to securities arbitration.

This decree as announced by the Qatar Financial Markets Authority (QFMA), contains key principles and rules necessary for conducting a quick, cost-eff ective arbitration and where only an action for nullity can be raised against the award. Changes include:• The Arbitration Committee being composed of three arbitrators and being granted the exclusive jurisdiction to rule on securities disputes. Hence, it excludes the disputing parties from submitting their disputes to courts or any other judicial authority;• The committee having the right to decide exclusively on the existence and validity of the arbitration agreement or the disputed contract; • The request of arbitration, the statement of claim and counter claim now having to be lodged at the Disputes Registrar Offi ce. Fixed time limits are based mainly on multiples of seven. Thus the defendant is granted 21 days to submit their statement of defense and counterclaims if any. The claimant’s reply to any counterclaim and fi nally the defendant’s fi nal reply is granted 14 days’ time limit each;• Small claims disputes (up to £16,715) to be resolved by one arbitrator on a documents-only procedure without hearings;• In all cases, the applicable law shall be Qatari Law and the seat of arbitration located in Qatar. The language of arbitration shall be Arabic or English according to the parties’ agreement;• Allowing hearings to be conducted electronically; • Arbitrators’ fees being calculated on an hourly rate basis with maximum fees based on the amount of the dispute.Report by Minas Khatchadourian, CEO and Secretary General of the Qatar International Centre for Arbitration

Qatari arbitration rules updated

Changes to the Housing Grants, Construction and Regeneration Act 1996, which regulates dispute resolution and payment provisions in the construction industry, came into force on 1 October in England and Wales and at the start of November in Scotland.

Key changes include the fact that oral construction contracts will now fall within the act and can now be referred to adjudication; it will no longer be necessary for contracts to be in writing. Further changes have

More careers tips, please!The career development article (“The only way is up”, August 2011) included “Making the most of CIArb”. The tips are great, but could you give more information? You mentioned including the CIArb logo on a business card – perhaps you could tell us how to do this? And in terms of persuading parties to specify CIArb as the nominating body, can you give an example of an arbitration clause that can be incorporated into a contract?

Joel Teo MCIArb

CIArb responds: Many thanks for your feedback, Joel. In terms of the CIArb logo, we have recently added a “logos” section to the members’ area of CIArb’s website → www.ciarb.org/members/services/logos.

Here you can download the correct logo to match your membership status. You will also fi nd a “Use of the CIArb logo” document, with full guidelines on how to use this logo on business cards, letterheads and website. If you have any problems or questions Email [email protected]

For an example of an arbitration clause that could be incorporated into a contract specifying CIArb as the nominating body, take a look at the “Model contract clauses and agreements” section of CIArb’s website → www. ciarb.org/dispute-resolution/dispute-resolution-contract-clauses.

This includes clauses designed to be incorporated into arbitration, adjudication or mediation agreements, including a “Suggested Arbitration Clause” pointing

parties towards “an arbitrator to be appointed by the President or a Deputy President of the Chartered Institute of Arbitrators”.

Another important way of making the most of CIArb is to ensure your profi le is up to date on CIArb’s membership directory → www.ciarb.org/members/directory. Make sure you fi ll in as much information as you can (such as “specialism”, “job role”, “contact details”) to make the most of this useful networking tool.

Good luck in your ADR career.

READER FEEDBACK Email letters [email protected]

ISTO

CK

Building change: contractors now have enhanced rights if not paid

also been made to the rules governing adjudication.

Other changes to the act include a new payment notice regime that gives the person or company being paid the right to serve its own notice.

Pay-when-certifi ed provisions that link payment to other contracts will now generally not be enforceable. Contractors and consultants will now also have enhanced rights to suspend performance of their obligations if they have not been paid, according to Hugh James law fi rm.

“Moving from a mediation into an arbitration means taking particular care over the procedure” → See my toughest dispute, by Mair Coombes Davies FCIArb, page 17

p05.FINAL.indd Sec1:5p05.FINAL.indd Sec1:5 25/10/11 11:38:1825/10/11 11:38:18


NEWS ANALYSISADR IN BANKING AND FINANCE

Q: Is there expected to be a fl ood of litigation claims as a result of the continuing fi nancial crisis? A: Starting with a bit of background, there is a series of causes to the current economic crises. Put simply, in 2008 it emerged that some mortgage lenders (especially in the US) had lent money to people who could not aff ord to repay it and whose properties did not have suffi cient equity to cover the value of the loan. Many of these lenders had sold or refi nanced the poor loans by mixing them in with good loans (if they had any) and off ering them as assets backing the issue of bonds.

Other banks and fi nancial institutions had bought these bonds and suddenly realised they could be worthless. This caused a massive loss of confi dence and banks stopped lending money to each other, causing a loss of liquidity in fi nancial markets. This became known as the “sub prime” or “toxic loan” crisis.

In parallel, it emerged that many governments around the world (especially in the west) had been expanding their expenditure by borrowing money from the same fi nancial markets that had now lost confi dence and liquidity. Governments have had to introduce austerity measures to cut back their budgets. Finally, ordinary citizens in many countries have themselves borrowed too much and are struggling to cope with their own repayments at a time when their disposable earnings are reducing as taxes and prices are rising.

QAgainst that background, it

has been said that two things are needed to start litigation – confi dence and money (it is expensive to litigate even if you win) and both have been in short supply for some time now. That said, the US Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac (the federal mortgage fi nance houses that buy mortgage loans and mortgage securities issued by lenders in the US) has recently fi led lawsuits against 17 global banks including Royal Bank of Scotland, HSBC and Barclays. The lawsuits claim the banks misrepresented the quality of mortgages they packaged and sold to Fannie Mae and Freddie Mac, both of which subsequently had to be bailed out by the US government.

This could be the beginning of a fl ood of people engaging in litigation. At one end you have banks and fi nancial institutions that need to restore the strength of their balance sheets and repair their asset bases. At the other end you have investors, both private and corporate, who are aggrieved that they have lost money through, as they see it, no fault of their own.

Q: So will there be a push towards greater use of ADR in the City?A: It is worth remembering that according to fi gures published by TheCityUK, the fi nancial services sector in the City of London and the UK contributed a £35 billion trade surplus in 2010 and that the sector and related professional services employed 1.9 million people (6 per cent of total UK employment). Financial services contributed £53 billion in tax revenue in 2009-10, 11 per cent of total UK tax receipts.

The sector is more than just banking, but to operate successfully it requires stable conditions that give certainty and confi dence. Long drawn out public disagreements played out in court will do little to provide this. In addition, private investors who have suff ered losses will not necessarily want this made public. There is potentially a signifi cant role for ADR that provides independent and private resolution of disputes, but there must be public confi dence in the integrity and fairness of any form of ADR process.

There is a diff erence between privacy and secrecy and market confi dence will not be restored if people suspect a “cover up.”

“Market confi dence will not be restored if people suspect a ‘cover up’”


How has the continuing global economic crisis aff ected the use of ADR in the banking and fi nance sector? We ask Karl Davies

Mediating money

IMAG

E: IS

TOCK

p06-07_newsanalysis.FINAL.indd 6p06-07_newsanalysis.FINAL.indd 6 25/10/11 09:04:1225/10/11 09:04:12

Q: How developed is the use of ADR in this sector?A: In dynamic, fast-moving markets most disputes are resolved informally through the most basic form of ADR – negotiation and discussion. In the past, when large-scale, diffi cult problems have been taken through the courts it has led to instability and uncertainty, which damages market confi dence.

In London, the City Disputes Panel (CDP) was established in 1994 with the support of the Bank of England, the City of London Corporation, Lloyd’s of London and others, after several court cases that had an impact on the fi nancial markets. The CDP provides a combination of market knowledge (through appointing experienced practitioners as tribunal members or co-mediators) and absolute integrity (by having eminent and respected former judges as tribunal chairmen and the most experienced leading mediators to work with the practitioner co-mediators).

Q: Are there examples from other countries where ADR is

more established in the banking and fi nance sector? A: In Hong Kong, October 2008, a special dispute settlement scheme was launched to deal with Lehman Brothers-related investment products. The scheme provides for voluntary mediation and arbitration proceedings by experts recommended or appointed by the independent Hong Kong International Arbitration Centre (HKIAC). It was designed with the support of the Hong Kong Monetary Authority to off er investors a fast and cost effi cient way of resolving disputes.

In July 2011 it was reported that HKIAC had received 355 requests for mediation since its launch. As of May 2011, 143 mediations have been conducted under the scheme, with 127 achieving full settlement. Hence, the settlement rate is around 89 per cent. Post-mediation interviews revealed that the parties were satisfi ed with both the process and the professional performance of the mediators.

In many of our European competitor countries, including France, Belgium and Germany, mediation is also being used to assist small and medium businesses to obtain fi nance. The exact details and processes vary, but in essence the schemes are broadly similar. If a business seeks a loan from its bank and is turned down the business can invoke the local credit mediator scheme.

A mediator from a local panel with knowledge of business fi nance works with the bank and the business to help iron out problems, improve communication, or even restructure the fi nance package and the conditions and requirements of the lender. Figures suggest the schemes are very eff ective in securing funds to help smaller businesses fl ourish.

Q: What is the value of applying ADR techniques in the banking and fi nance sector?A: Confi dence, stability, certainty and privacy (in appropriate circumstances). Q: Is there a form of ADR that would be particularly eff ective? A: Like most uses of ADR this depends on what the parties want to achieve and whether they want to work out a solution between themselves or want some form of evaluative or determinative process. I have already described how mediation might play a role. Additionally mediation may help resolve investors’ disputes with their managers.

The CDP has a track record of designing bespoke processes to evaluate and determine claims, although enforcement is contractual rather than statutory. This sort of approach may be helpful in encouraging banks and fi nance houses to engage with the process. International banks are subject to regulators and supervisors all over the world. They also have to consider varying approaches to solvency tests and


disclosure requirements. A global bank might not necessarily want to deal with the international consequences that could fl ow from an arbitral award enforceable under the New York Convention, but might agree to a locally enforceable determination. But then this might not be acceptable to the other parties.

Q: What are some of the challenges around encouraging greater use of ADR in this sector? A: International banks operate with diff erent regimes for supervision and regulation in diff erent parts of the world. Attitudes to privacy and secrecy vary from country to country. Regulators and supervisors are often concerned with rule breaking and “penalties” – they want to punish those who have behaved inappropriately, but are not necessarily as concerned about individual compensation. This can cause tensions. For example, banks in the UK are currently expected to increase the size of the reserves in their balance sheets; they are also being called upon to lend more to businesses and to eliminate losses and become more profi table, yet not to overcharge customers. Some regulatory and government authorities dislike “private” or “confi dential” arrangements fearing that secrecy leads to a “cover-up.” �

Karl Davies was a retail banker for almost 30 years and involved in managing disputes involving the bank. He was a pioneer in the use of mediation. He is also former Chief Executive of the City Disputes Panel

p06-07_newsanalysis.FINAL.indd 7p06-07_newsanalysis.FINAL.indd 7 25/10/11 09:04:2025/10/11 09:04:20


OPINIONDISCRIMINATION

IT WAS INTERESTING WHILE IT lasted. Last year, the Court of Appeal in Jivraj v Hashwani concluded that the UK regulations implementing European Directive 2000/78/EC prevented the enforcement of an arbitration clause that required arbitrators to be of a particular religion, at least where English law applied to the substance. In its view, the directive applied to arbitrator appointments as “contracts of service”. The Equality Act 2010 complicated matters. It consolidates the UK legislation implementing the directive forbidding discrimination in the area of such contracts on the basis of “race”, defi ned by the act as including nationality. So, the Court of Appeal eff ectively banned discrimination on those and other directive grounds, such as disability and sex.

The UK Supreme Court ([2011] UKSC 40) consisting of fi ve judges, all arbitration practitioners, unanimously reversed the Court of Appeal decision.

Lord Clarke, with whom the majority agreed, distinguished workers engaged on a self-employed basis from independent suppliers of services. The directive only covers the fi rst group, which “performs services for and under the direction of another person”. This does not include “independent providers

Adam

Samuel of services who are not in a relationship of subordination with the person who receives the services”. This test, from the European Court of Justice’s decision in Allonby v Accrington and Rossendale College, enabled the court to place arbitrators in the second category outside the “contract for services” defi nition. Lord Clarke also interpreted “access to self-employment or to occupation” in the directive’s Article 3(1)(a) as referring to the

possibility for people to be self-employed.

The argument regarding the nature of arbitrators goes back 400 years. As Lainé pointed out in 1899, the arbitrator is not

the parties’ agent and does not operate “under the direction of the parties”. As Lord Clarke put it, they are “an independent provider of services… not in a relationship of subordination with the parties who receive their services”.

Lord Clarke added: “Once an arbitrator has been appointed, at any rate in the absence of agreement between them, the parties eff ectively have no control over him.”

Lord Clarke distinguished arbitrators from municipal judges. Although judges enjoy freedom of decision, they are “not free agents to work as and when they choose”.

Lord Clarke also decided that the arbitration clause in question was

Adam Samuel FCIArb is Chair of CIArb’s Arbitration Sub-Committee and is a member of the Practice and Standards Committee. The views expressed here are his own and not those of the sub-committee, the committee or the Institute

Once an arbitrator has been appointed,

at any rate in the absence of any

agreement between them, the parties

eff ectively have no control over him

exempt from the directive because the parties had an ethos based on religion and belief. Membership of the Ismaili community was an occupational requirement that was a proportionate means of achieving a legitimate aim, even where English law applied.

Lord Clarke felt that Ismailis could regard a procedure conducted and through which facts were determined by fellow members of their community as one in which they could have confi dence. This refl ects centuries of communities resolving disputes among themselves without necessarily determining that a religious or other non-legal standard would apply.

The court declined to correct an error in the Court of Appeal’s judgement that invalidated the whole arbitration clause void on the basis of the “invalid” discriminatory element. Lord Clarke could usefully have stated that where the overwhelming objective of a defective clause is to have disputes resolved by arbitration, the court will simply excise the objectionable provision.

The English arbitration community is relieved. It can continue agreeing to choose and to select arbitrators without Equality Act problems on the basis of nationality and presumably also on the basis of race, religion, disability, sex and sexual orientation. Is this good? Is choosing arbitrators by nationality out of date in an era of multiple nationality and residence? The Jivraj decision should not end this discussion. �

The Supreme Court’s Jivraj decision allows discrimination on the basis of race, religion and nationality when appointing arbitrators. But should the debate end there?

ONLINE

Join the debate at → www.ciarb.org/forum or on CIArb’s LinkedIn group → www.linkedin.com

Ip08_opinion.FINAL.indd 6p08_opinion.FINAL.indd 6 25/10/11 09:07:0125/10/11 09:07:01


EV AND TKI entered into an agreement to collaborate on bids to acquire and develop petroleum blocks in Iraqi

Kurdistan, and to produce and sell petroleum from the blocks. The agreement provided for ICC arbitration in New York. A dispute

arose concerning the transfer of TKI’s rights to Gulf Keystone, and EV’s legal requirements to participate in any such bid, or in any venture for the exploration and development of hydrocarbons in that region. EV started an action in the Commercial Court against TKI and the Gulf defendants (the GD), alleging breaches of the agreement. On the same day, EV also began arbitration proceedings against TKI and the GD and sought similar relief against them. Despite the fact that the GD were not signatories to the agreement, EV alleged they were nonetheless parties to it, and therefore bound not only by its contractual provisions, but also by the arbitration clause. The GD maintained they were not parties to the agreement and so not bound by the arbitration clause, and applied to the English court for an injunction restraining the arbitration proceedings. The GD had not made any submissions to any arbitral tribunal, nor had they taken any material step in the arbitral process, primarily because there was as yet no arbitral tribunal. Later on, EV issued an application to stay the Commercial Court proceedings. The court was asked to consider, among other things, whether it had jurisdiction to grant an anti-suit injunction to restrain EV from proceeding with the ICC arbitration against the GD.

GALLIFORD TRY INFRASTRUCTURE (GTI) entered into a construction agreement with Lanes Group (LG). The agreement provided for adjudication under the Institution

of Civil Engineers (ICE) adjudication procedure. GTI terminated its agreement with LG on the grounds that it had failed to proceed with the works with due diligence and make good defective work. There were various disputes between the parties concerning the identity of the adjudicator to be appointed before the ICE appointed Mr Atkinson. The time for submissions passed and LG did not submit its response to the adjudicator. Mr Atkinson issued a “Preliminary Views and Findings of Fact” (the preliminary document). The impression created by the preliminary document was that LG was not going to participate in the adjudication. Later on, Mr Atkinson decided LG should pay GTI £1,360,145.28 plus its fees. This decision reproduced much of the preliminary document. LG initiated court proceedings to challenge the adjudicator’s decision. LG alleged that the preliminary document looked and read like a decision. It also contended that a fair-minded observer would have concluded there was a possibility the adjudicator was biased. The court was asked to consider whether Mr Atkinson’s fi nal decision was the product of apparent bias. Although several issues were raised on the conduct of the adjudicator, the main point was that the adjudicator had only heard from one side and yet presented a document, when there was no need to present one at all.

○ THE JUDGEMENTThe court decided that under s37 of the Senior Courts Act 1981 it had jurisdiction to grant injunctions restraining arbitrations where the seat of the arbitration was in a foreign jurisdiction. The court held it would proceed with caution in restraining arbitration proceedings where there was an agreement for the arbitration to have its seat in a foreign jurisdiction and the parties have “unquestionably agreed” to the foreign arbitration clause. But in this case the Gulf defendants

made clear they did not recognise the jurisdiction of the ICC.

○ WHAT IT MEANSThe case provides guidance as to the court’s discretion to stay court proceedings where the claimant has voluntarily brought court and arbitration proceedings, and to grant injunctions restraining a foreign arbitration where the arbitral tribunal has yet to be constituted. Once a claimant has begun proceedings against a defendant domiciled in the jurisdiction and the court is seized of them, it cannot at the request of the claimant stay the proceedings in favour of proceedings elsewhere, if the defendant objects.

Full judgement available at: → www. bailii.org/ew/cases/EWHC/Comm/2011/1624.html

○ THE JUDGEMENTThe court held that the release of provisional views is not common in adjudications. It referred to the test of apparent bias and the perception of the fair-minded observer and concluded that the preliminary document led the court to a finding of apparent bias. Waksman J therefore dismissed the application for summary judgement to enforce the adjudicator’s decision. The court also granted declaratory relief on the basis that GTI could not start adjudication proceedings again.

○ WHAT IT MEANSDocuments expressing provisional views on the case are not likely to be helpful or appropriate and so adjudicators are advised not to issue preliminary fi ndings unless the parties expressly ask them to do so or the adjudicator considers there might be another basis for one or other party’s claim, which had not been addressed by either. In either event, if provisional views are ever appropriate, it is surely after both parties have submitted their response to the adjudicator.

The full article is available at: → www.bailii.org/ew/cases/EWHC/TCC/2011/1679.html

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

LAWROUND-UP

○ ADJUDICATION

○ ARBITRATION

THE CASE

THE CASE

Lanes Group plc v Galliford Try Infrastructure Ltd [2011] EWHC 1679 (TCC)

Excalibur Ventures LLC v Texas Keystone Inc & Ors [2011] EWHC 1624 (Comm)

An overview of recent key court cases

Adjudicators are advised not to issue preliminary fi ndings

unless expressly asked

ANTI-ARBITRATION INJUNCTIONS

THE RELEASE OF “PROVISIONAL” VIEWS IN CONSTRUCTION ADJUDICATION

The Gulf defendants did not recognise the

ICC’s jurisdiction

p09_law.FINAL.indd 1p09_law.FINAL.indd 1 25/10/11 09:09:0925/10/11 09:09:09


PROFILECAPTAIN SLIWA MICHAEL

CAPTAIN SLIWA YOUSIF Michael MCIArb has a deceptively ordinary and modest sounding job title. An Insurance and Legal Manager at Zodiac Maritime Agencies, which manages and operates one of the largest diversifi ed privately owned fl eet of ships trading worldwide, he has climbed to a senior position through a combination of hard work, loyalty and acquired expertise. And the offi ce he works from, overlooking the River Thames in London is plush, comfortable and functional, without being overly ostentatious. It’s hard to believe then that, amid all this respectability, mediator and arbitrator Captain Michael was one day plunged into the centre of events involving one of the most dangerous and notorious group of criminals of our modern day – Somali pirates.

While it’s hard to shake off the romantic notion of pirates, the reality of these

buccaneers’ lifestyle and their ruthless, brutally violent methods and tactics, has meant that much of the western Indian Ocean is now regarded as some of the deadliest waters to sail. Commercial vessels continue to be routed through here since alternative paths are too costly and slow. In this knowledge and confi dent on the back of an increasing number of successful piracy acts, including tourist attacks that have attracted signifi cant media attention, reports suggest that gangs are becoming yet bolder and more aggressive (tying up hostages and hanging them from ceilings or fi ring gun shots during negotiation phone calls) in order to get what they want – ransoms worth millions of dollars from ship owners. Currently it is believed Somali pirates are holding around 15 ships and hundreds of hostages.

“No one thinks it will actually happen to them,” says Captain Michael. “But eventually this happened to our ships, despite all the best management practices.”

It happened during the Christmas and New Year period of 2009. While Captain Michael was on holiday he received notifi cation that pirates

had seized one of their chemical tankers. Two days later in a separate attack a car carrier loaded with millions of dollars worth of cargo was also taken. Both were in the Indian Ocean Gulf of Aden area, one on its way to Saudi Arabia and the other heading for the Suez Canal. The crew – around 20 members on each ship – were collected together and held at gun point.

Captain Michael continues: “The industry consensus then was that pirates would not be able to take a car carrier because the deck is so high from water level that it’s diffi cult to climb aboard. Also, these ships go at high speeds – more than 20 knots – which is thought to provide some protection from pirates. Yet they were taken. The ships’ masters would have been ordered to take the ships to an area to be anchored off the Somali coast. After that we fi nally heard the pirates demands.”

By this time the company, as is usual practice, had employed a security company specialising in negotiating with pirates. These consultants provide scripts for companies to use when talking to the pirates and advise that a senior person shouldn’t do the negotiating.

Captain Michael explains: “Initially the pirates make ridiculously high demands, it can be around $15 million, although it depends on how big the ship is or how valuable the cargo. At fi rst we spoke to them every day. This went on for about six weeks. They wouldn’t budge from their demands and we were left to negotiate against ourselves. We went back and forth and back and forth. Eventually we realised we weren’t really getting anywhere.”

Up until this point, Captain Michael’s direct involvement was as part of a

Commanding role

“Management believed using my negotiating skills in this way would break the deadlock”

By Rima EvansPhotography: Peter Searle

ADR specialist Captain Sliwa Michael had to put all his dispute resolution skills to the test when he found himself in a life or death situation having to personally negotiate the release of two vessels captured by Somali pirates

p10_13 profileFINAL.at.indd 10p10_13 profileFINAL.at.indd 10 25/10/11 09:11:2125/10/11 09:11:21




PROFILECAPTAIN SLIWA MICHAEL

small crisis team set up to handle the incident. Those doing the actual negotiating (but using scripts from the

security company) were handpicked from the team of staff . Yet this deadlock forced management to take a fairly radical decision. “Going against the advice of the consultants, my management asked me to take control and personally take over the direct negotiations with the pirates. They believed using my negotiating skills in this way would break the deadlock.” And so Captain Michael was thrown into the centre of the crisis.

It seemed a logical move since Captain Michael had been responsible for much of the negotiations in commercial disputes for the company. “I have always been told I am a naturally good negotiator,” he says. A strong interest in ADR techniques was born out of the responsibilities he has held at work dealing with insurance and legal matters, as well as handling and negotiating diffi culties with contracts and overseeing arbitration and mediation procedures. He is now an accredited mediator, an experienced arbitrator and a CIArb Member.

Iraqi-born Captain Michael’s early career, however, was dominated by sailing. Following a UK education he went to sea for more than 10 years working on commercial tankers and cargo ships, and gaining the qualifi cation of Master Mariner.

A job at another shipping management company preceded the one at Zodiac, where he has now been for 27 years and has earned a reputation with management as a highly eff ective negotiator. Yet the diff erence between his commercially orientated work and being faced with negotiations that could mean the diff erence between life and death is obvious, and was felt keenly by Captain Michael at fi rst. “Initially I was reluctant to take this responsibility on, I was not happy about it. But we were coming to an impasse and just not getting anywhere.”

Captain Michael took control of negotiations of both ships, having to jump daily from one telephone call to another with both sets of pirates. Interestingly the pirates’ own negotiators are usually highly fl uent in English (Captain Michael is convinced one of the pirates he dealt with was even educated in the West). All he could do was put faith in the expertise and skill he had acquired over the years.

“A big part of successful negotiating is gaining people’s confi dence. We exchanged diffi cult and threatening words with the pirates, but we also exchanged light-hearted moments. I guess that is where the Stockholm Syndrome comes in. You have to give that

impression anyway. For example, one of the pirates had said, ‘Captain Michael we want cash’, and I replied, ‘Well I wasn’t thinking of sending a cheque!’.

“You have to fi nd those moments and ways to get them on your side, to cooperate. Also these guys are stuck on the ship as well and want to go home. So you give and take.

“The pirates’ most valuable asset was the crew and, of course, that was the big problem. If it was just the ship that had been taken it would have been diff erent. But you have a responsibility for the crew, that they don’t come to any harm. Although, generally speaking, the pirates don’t harm the crew, they ransack all their belongings, take all their personal stuff , laptops or cash or whatever. But you still have to be careful it doesn’t get to a serious situation where someone gets injured or even killed.”

In the main the crew may not be physically harmed, but they don’t escape the pirates’ terror tactics. Captain Michael explains: “The pirates use divide and rule to create diffi culties

within the crew themselves. Some may sympathise with the pirates, while others don’t. They also used fear tactics to put pressure on us by telling the crew that their employer didn’t care about them and then getting the crew to phone their families to repeat that message to them.

“The pirates would also take a member of the crew behind the accommodation, fi re a couple of shots and claim they had killed the person. They hadn’t killed them, they just wanted to frighten the crew to put more pressure on us.”

The hostage situation went on for fi ve long months (although the average is about 200 days). Sometimes the company and pirates didn’t speak for a week “to play hard to get” and on one occasion the pirates even telephoned Captain Michael’s home in a bid to intimidate him. The families of the crew were regularly updated on the situation.

Then fi nally one day there was a breakthrough in negotiations – a ransom demand for each ship was agreed (the actual sums cannot be disclosed), subject to all the crew being released safely.

Yet the ordeal didn’t end there. There was still the process of having to get the ransom money to the pirates and the ships actually released – which involved a dramatic James Bond-style operation, planned with utter precision to the exact minute.

In such piracy situations, once the ransom is agreed, a specialist company is hired to take the money, all tightly packed into a yellow,

Maritime arbitration is too dominated by lawyers and the legal profession, believes Captain Michael.

Stressing that the view expressed is a personal one, not representative of his company, he adds: “I think the industry can be better served if there is a greater commercial input. Practising arbitrators should embrace a variety of disciplines and a corresponding breadth of expertise, yet it is dominated by solicitors and barristers. This imbalance means the industry is deprived of sufficient choice, particularly in disputes where technical considerations are equally as important as the legal aspects.”

Captain Michael is also concerned at the rising cost of arbitration, caused by, he says, factors such as too high fee rates,

and arbitrators failing to curb costs by, for example, limiting time wasting and excessive discovery requests.

“I can see an argument for capping legal and arbitrators fees. Also arbitrators and users have the discretion, power and flexibility for resolving disputes efficiently. It is up to us to rise to that challenge,” he says.

Finally, he says take up of mediation is still slow in the shipping industry despite it having a valuable role.

“I think parties believe that if they were to negotiate they would want to do it without a third party involved. If there is no will to compromise, it isn’t worth doing.”● For information about the costs of international arbitration, see CIArb’s costs survey results: → www.ciarb.org/s/costs-survey

MICHAEL ON ADR IN THE MARITIME SECTOR

“You have to fi nd the light-hearted moments and ways to get them on your side, to cooperate”



THERESOLVER

waterproof tube, by aeroplane at an agreed appointed time. The pilots fl y out to a place where a smaller plane is waiting, transfer the money and fl y off again to nearby the ship.

Captain Michael says: “I was stuck here in the offi ce all night while this went on, although we had a system here that meant we could trace the planes’ location by computer. We told the pilots that until all the crew could be seen standing on the deck safe and well, nothing should be done. Even after the pilot confi rmed he could see the ship and all the crew he rang me again to get my fi nal permission to drop the money. It was all planned so precisely.

“Meanwhile the pirates were told to be ready nearby in a skiff . Once the pilot was given the go-ahead and the tube was dropped into the water, the pirates went out to pick it up and take it back to the ship,” he says.

This operation was carried out for both ships. Once the money was counted by the pirates and the captain, the pirates left and the

ships sailed to a port of refuge in Oman and the crew were released.

“It was a very satisfying moment when we were able to get the crew and the ships out safely,” Captain Michael recalls. “It was such an anxious time. The crew certainly suff ered, but when the ships were freed and taken into port, we sent doctors out to examine them and specialists to counsel them. The ships were also left in a terrible dirty mess.”

Captain Michael adds: “The whole experience was very stressful, not something I would want to repeat. I felt that if anything happened to any of the crew I wouldn’t be able to forgive myself. I would have had to examine my conscience to think whether I did something wrong in my negotiations to create that situation. But you have to try and remain calm through it all. After it all ended I went on holiday for a few weeks.

“The company has also learned something and now we carry armed guards on all ships transiting the piracy areas.”

It must have been tough adjusting back to normal working life after such a remarkable and stressful experience, but Captain Michael’s level-headed, calm temperament must have massively helped. Was he hailed as a bit of a hero afterwards? Modestly he laughs and shakes his head.

Looking to the future, although he is beyond retirement age now, he would like eventually to develop his own practice mediating and arbitrating in maritime or insurance disputes.

“I would very much like to develop that. That is where my interest lies,” he says.

Any party that did appoint Captain Michael certainly couldn’t complain he lacked breadth of experience.

• Captain Michael stresses that the views he expresses on piracy are his own and do not necessarily refl ect those of his company.

Career1984–present: Insurance and Legal Manager, Zodiac Maritime Agencies Ltd, London.Responsibilities include dealing with all types of commercial contracts, Charter parties and coordinating and overseeing all arbitrations and High Court actions; overall responsibility for the insurance and legal departments 1975–1984: General Manager Operations, Gulf Shipping Group of Companies, London

1962–1975: At sea as Deck Offi cer up to command level on commercial tankers and cargo ships for various companies including Shell Tankers

Education• Master Mariner• Chartered shipbroker• CEDR accredited mediator

Membership of professional bodies• Member of CIArb• Member of the Baltic Exchange• Fellow of the Institute of

Chartered Shipbrokers• Supporting member of the London

Maritime Arbitrators Association• Member of various committees

and panels at the British Chamber of Shipping

• Member of the Baltic Exchange/LMAA Mediation Panel

• Director on the Board of the North of England Protection and Indemnity (P&I) Association

Languages• Fluent in Arabic

Interests• Golf

Potted CV: Captain Sliwa Michael


HOW TO…

TODAY’S TECH-SAVVY practitioners are used to records being kept on electronic media such as external hard disk drives, memory sticks, mobile phones and PDAs, not on paper.

Current media usually present few issues, but other data storage devices, such as fl oppy disks, which may be reminiscent of the “computer stone age”, can be diffi cult to access. But records of any kind stored on obsolete systems may still be relevant to a dispute and necessary for its resolution. Here are some tips to consider if those records are required during an arbitration.

1 ⁄ Identify the data storage device and

software necessary to access the data This may not be an easy task for records stored long ago and on a medium (such as a disk or tape) that was separate from its reader device. You may still have the medium, but not the reader device. For example, in the case of fl oppy disks the disks may have been kept, but not the disk drive necessary to read them. Also, unlike today’s fi les that contain metadata on program type, the program that created such old fi les may not always be easily identifi able.

2 ⁄ Find hardware and suitably updated

driver software to read the mediumRemember that not only the reader device itself, but also the correct driver software and an appropriate cable, are required to operate peripheral devices. The driver software is unique to the device and the computer operating system, but as operating systems have evolved drivers have not always been updated. And even if such drivers and their software were available, you will need to obtain the appropriate cable to connect to a modern computer.

3 ⁄ Try to preserve the original

document appearance and format integrityThe original record format – its native format – will be the best way to access the record. The best program for reading a native format is the same brand and version of the program that originally created it. If that program is not available, use a newer version of the same program and, if that is not accessible, try a competing program. Use a reader or translation program only as a last

resort because it may make changes when converting or updating the fi le, which may be signifi cant. Alternatively, text fi les can be electronically scanned making them “searchable”, regardless of their original format. Two standard formats, TIFF (Tagged Image File Format) and PDF (Portable Document Format) are currently available on the market. Optical Character Recognition (OCR) programs retrieve the textual context from the scanned image. Both the recognised text and the image can be stored in a (hybrid) PDF fi le.

4 ⁄ Avoid changes to document

formats during the collection phase Once a relevant record has been identifi ed it should be produced in its native format. A native format that can be altered (such as MS Word format) should be copied in a locked format (a locked TIFF or PDF, for example) for the record. If such collected documents have already been reviewed by legal experts it is essential that other properly trained experts testify as to what has been changed, why it was impossible to avoid the change and what the implications are.

“Electronic records last forever… or fi ve years, whichever comes fi rst”

…handle electronic records By Raimund E Walch Illustration: Cameron Law

Raimund E Walch MCIArb is a member of the Technology Sub-Committee of CIArb’s Practice and Standards Committee

T14 THERESOLVER | November 2011

p14 howto.FINAL.indd 14p14 howto.FINAL.indd 14 25/10/11 09:13:5025/10/11 09:13:50


CIArb is launching a new course to introduce professionals from different backgrounds to the fi eld of Alternative Dispute Resolution (ADR). “Introduction to ADR” covers a range of theoretical and practical topics and offers a detailed examination of the most well-known forms of ADR

Elkinson to take the reinsCIArb’s Deputy President Jeff rey Elkinson FCIArb, an active arbitrator, mediator and counsel based in Bermuda, is preparing to take over from Doug Jones AM FCIArb as President of CIArb in January.

Elkinson was born in Ireland and graduated from Trinity College Dublin and Kings Inns Dublin with three law degrees. After initially practising as a barrister in Ireland and then Hong Kong, Elkinson moved to Bermuda in 1988.

In addition to being a member of the Bars of Ireland, Hong Kong, New South Wales and Bermuda, Elkinson is a member of the Bars of England and Wales, New York, United States Court of International Trade, United States Court of Appeals for the Federal Circuit and Eastern Caribbean Supreme Court.

As well as being a CIArb Fellow, Chartered Arbitrator and Mediator, Elkinson was instrumental in

establishing the Bermuda Branch of the Institute in 1994, of which he is now Chair. He is currently a Director/Partner of

Conyers Dill and Pearman Limited, the largest law fi rm in Bermuda.

Elkinson’s practice is in commercial litigation, arbitration and mediation, and he specialises in the areas of banking, trusts, insurance and reinsurance, construction, administrative law, telecommunications and energy.

Elkinson told The Resolver: “It’s been great to have had a year as Deputy President to observe Doug Jones in action, and I have admired his endless energy in the role of President. To be President is a great honour, and I am really looking forward to the year ahead.”

CIArb NEWS

Smith enjoyed ‘fascinating’ time as Director GeneralCIArb’s Director General Michael Forbes Smith MCIArb, who is retiring in February 2012, has described his tenure at the Institute as “fascinating”, but thinks it is the right time to go.

Smith, who has been at the helm since February 2006, told The Resolver: “This is the longest I have consecutively done the same job and been in the same place since I was 21. It has been fascinating, but it is the right time to move on.”

He added: “I hope the value I have added to the Institute in that time will serve it well into the future and that the things we have achieved can be built on. It is right we should be reinvigorating the executive because things should never stand still.”

Smith said some of his proudest achievements included the expansion of membership, which also has a greater international base, the improvement in CIArb’s communications and the establishment of a robust research base.

“Our research base is still to be developed further, but it means we can speak to an international audience about things that matter and need to be considered by all the disciplines we care for.”

So what key challenges remain for his successor? Smith said CIArb is an amazing organisation that brings together an extraordinary range of disciplines, cultures and jurisdictions. “Like all membership bodies the key thing is to be able to deal eff ectively, and in a timely manner, with members and that does require both administrative and diplomatic skills. I hope that in my time I have had more satisfi ed than dissatisfi ed customers.”

Smith, a CIArb accredited mediator, said he is keen to spend more time with his family and to pursue his interests of music and sailing once he leaves. He added: “I am not going to take on a further full-time job, but I am looking to do other things. I am about to start a part-time master’s degree, for example.”

CIArb will be advertising the Director General post shortly, aiming to make an appointment in the new year. It wishes to greatly thank Smith for his steadfast leadership and commitment to CIArb.

CIArb Director General Michael Forbes Smith retires in February 2012

Inaugural YMG conferenceThe inaugural conference of CIArb’s Young Member Group (YMG) is being held this month in Dublin, marking how much it has progressed since the group was launched in July last year.

The YMG, whose Chair is Gonçalo Malheiro ACIArb from Portugal and Vice-Chair Laurence Burger ACIArb from Switzerland, aims to promote and develop all forms of alternative dispute resolution in order to maximise the contribution that dispute resolution practitioners make.

Since the group’s creation a newsletter has been published and a YMG website is up and running, which features a forum.

The YMG is now keen to organise itself according to diff erent working groups, encourage members to participate actively in the group and attract more members.

If you have any queries or would like to become a member of CIArb’s YMG please get in touch. Email [email protected] or [email protected].

To fi nd out more about the YMG conference on 11 November visit: → www.ciarb.org/s/ymg-conference

CIArb Patron The Right Hon The Lord Phillips of Worth Matravers, KG, PC and President of the Supreme Court, will be the guest speaker at the Alexander Lecture in London on 16 November. From his unique vantage point, Lord Phillips will be exploring the landmark case of Dallah v Pakistan and its implications for the worldwide arbitration community. To book → www.ciarb.org/conferences/alexander-lecture

ONLINE

March 2012

p15_CIArbnews.FINAL.indd Sec1:15p15_CIArbnews.FINAL.indd Sec1:15 25/10/11 09:15:3125/10/11 09:15:31


NIGERIA

Entry courseThe Nigerian Branch ran an Arbitration Entry Course leading to accreditation of arbitrators by CIArb for the Kigali International Arbitration Centre under the auspices of the Rwanda Private Sector Federation.

The course ran in July in Gisenyi, Rwanda and 40 people attended, including engineers, architects, bankers, insurers and lawyers.

EUROPE

Brussels trainingThe European Branch organised a second introductory course in International Commercial Arbitration, which was held on 17 September in Brussels. The course participants came from Belgium, Germany, Italy and Spain. The Branch’s Module 2 Course in International

Arbitration, the Law of Arbitration, will begin in early November 2011 and details are available at:→ www.ciarb-europeanbranch.com/training or by contacting Stuart Ness MCIArb. Email [email protected]

NORTH AMERICA

Diverse activityThe North American Branch (NAB) was a co-sponsor of the “Foro de Arbitraje 2011” conference, which took place in Mexico City on 2 September. Speakers included members Herfried Wöss MCIArb, Mark Kantor FCIArb and Derrick Carson FCIArb. Ann Ryan Robertson FCIArb was a conference moderator.

In October, the New York Chapter presented the “Judges’ Program”, at the Fordham University School of Law, featuring three leading retired

American jurists who discussed their transition from the bench into arbitration.

The Washington DC Chapter and CPR Institute jointly sponsored a programme in October at Morgan Lewis in Washington DC on the construction of international energy projects and ADR. NAB Executive Board Member Professor Stacie Strong FCIArb organised a symposium on 21 October, “Border Skirmishes: The Intersection Between Litigation and International Commercial Arbitration”, at the Center for the Study of Dispute Resolution, University of Missouri School of Law.

LONDON

Arbitration in Latin AmericaThe CIArb/LCIA 7th Annual Joint Seminar, “Arbitration in Latin America” was held in September,

hosted by Norton Rose and chaired by London Committee Chairman Hew Dundas FCIArb. Delegates heard that the continent’s new “open for business”’ regulatory and investment outlook has meant a big increase in the popularity of arbitration.

The 8th LB Annual Mediation Seminar held in June at Clyde & Co was also a great success.

KENYA

Judicial postsFour Kenya Branch members have been appointed to senior positions in the judiciary of Kenya: Jonny Havelock FCIArb; Justice Richard Mwongo FCIArb; Professor Githu Muigai FCIArb; and David Majanja ACIArb.

Conference highlights arbitration in PRCCIArb’s East Asia Branch (EAB) and CEITAC South China Sub-Commission held a one-day conference on “Chinese Enterprises ‘Going Out of PRC’: Risks and Precautions” in July.

The event in Shenzhen was a huge success, welcoming more than 400 delegates from Guangdong, Shenzhen and Hong Kong. The event brought together in-house counsel, lawyers and arbitration practitioners, as well as prominent offi cials such as the Deputy Secretary of Shenzhen City Government; the Deputy Director General of the Department of Treaty & Law, Ministry of Commerce, PRC; the Vice-Chair of State-Owned Assets Supervision and Administration Commission of Guangdong Province Government; and judges from Beijing Supreme People’s Court and Shenzhen Intermediate People’s Court.

EAST ASIA

Highlights of the event included interesting presentations from in-house counsel of big Chinese enterprises such as ZTE Corporation and Ping An Insurance (Group) Company of China Ltd.

In the last session, speakers from CEITAC, CIArb and judges spoke about arbitration as being the most recognised mechanism in resolving international trade disputes, as well as the current trend of

Chinese enterprise: Yeung Man Sing FCIArb, EAB Vice Chair (fourth on the left): Dr Han Jian, Secretary General of CIETAC South China Sub-Commission (middle); Huen Wong, Chairman of HKIAC (fourth from the right); Liu Xiachun, Deputy Secretary General of CIETAC South China Sub-commission (fi rst on the right)

CIArb NEWSBRANCH ROUND-UP

enforcement of international arbitration awards in PRC courts.

The event signifi es the close collaboration and cooperation between CIArb (EAB) and CEITAC South China Sub-Commission.

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

ONLINE

p16_branchnews.FINAL.indd 16p16_branchnews.FINAL.indd 16 25/10/11 09:17:3325/10/11 09:17:33

17 THERESOLVER | November 2010 November 2011 | THERESOLVER 17

IN PRACTICEMY TOUGHEST DISPUTE

Member posted: Arbitrators have a fact-fi nding function, mediators promote a settlement. There is nothing wrong with parties agreeing to independently settle their dispute during arbitration and their agreement being recorded as an arbitral award. In this case the arbitrators are not involved in the negotiating process and don’t hear confi dential information. But where arbitrators start as arbitrators and then switch to being mediators is problematic for me. In the fi rst scenario, the arbitrators do not function as mediators and if the parties fail to reach an agreement arbitrators still render their award without any hint of apparent bias. But in the second scenario the issue of apparent bias might occur. What if the parties fail to agree during the mediation process? The arbitrators/mediators should still render an arbitral award, but it might not be enforceable due to the apprehension of bias that might occur during mediation. I would stick with mediation followed by arbitration, not mix the two.

Member posted: CIArb has a standard clause for mediation followed, if necessary, by arbitration [→ www.ciarb.org/dispute-resolution/dispute-resolution-contract-clauses]. But the clause makes it clear that the mediator should not be the same person as the arbitrator. This appears to refl ect the concern that a mediator may, in confi dential sessions, hear assertions or form impressions that cannot be rebutted by the other side, and so the arbitrator may fall into unwitting bias.

Member posted: There is talk at the International Centre for Dispute Resolution of a concurrent mediation and arb process, where while the arbitration is pending, a separate mediator is appointed. This makes great sense and avoids some of the concerns raised.

Member posted: If the arbitrator knows how to conduct a mediation there is no reason why the arbitration should not mutate into a mediation. But once the arb/mediator has had private briefi ngs with the parties it is diffi cult to see how he/she can go back to being an arbitrator. Courts in some jurisdictions may consider that such private discussions would lead to potential breaches of natural justice and would not be prepared to enforce the award.

Member posted: Arbitration has its own fi xed rules and processes. Mediation relies too much on the mediator's unregulated opinion to ever be a fi nal decision upheld by the court. Can you imagine the jurisdictional challenges coming from a Med-Arb? No thanks.

Join CIArb’s LinkedIn group for more discussions and the chance to connect with colleagues – search for Chartered Institute of Arbitrators.

THE REASON IT WAS diffi cult is that the role of a mediator is very diff erent to that of an arbitrator. The knowledge gained from the parties is diff erent, the procedure is diff erent, and so is the end result. Moving from a mediation into an arbitration means particular care has to be taken over the procedure. Even greater care had to be taken in this case because the claimants were represented by a legal team while the respondents only had the help of a solicitor sporadically.

Overarching all this was a complex dispute stretching back many years covering issues ranging from boundary lines, rights of way, building foundations being undermined and access to neighbouring land for development completion to nuisance and harassment. It started when Mr and Mrs C bought some beautiful, remote, derelict stone barns and stables for conversion into a home. Access was via a rough, pot-holed lane passing between high hedge banks that was also a right of way and boundary to Mr and Mrs R’s home, a bungalow surrounded by fi elds. The barn development came to a halt when the stable foundations were undermined. Mr and Mrs R refused access to their land for remedial work to be carried out to the foundations and erected posts along the lane that Mr and Mrs C said encroached on

Mair Coombes DaviesFCIArb, Head of Civitas Law Dispute Resolution Division in the UK

their land. Relations spiralled down as animosity increased.

Mr and Mrs C began litigation. The case was adjourned by the court for mediation. The mediation began with a site visit with the parties’ experts who between them suggested six alternative boundary lines. What gradually emerged was that while the parties were comfortable with agreeing some issues, such as their future behaviour towards each other, and a timetabled scheme for the barn development, they were not prepared to agree on the line of the boundary and

the right of way. They wanted an order.

Mediation was not the solution. The experts suggested a documents-only arbitration. The

parties wished to appoint me as the arbitrator. After careful discussions to ensure the parties knew exactly what was involved in moving from mediation to arbitration, as well as a week’s adjournment for refl ection, the parties wrote requesting I accept the arbitration appointment and that the court case had been stayed to arbitration.

The arbitration developed with a peremptory order on the cross examination of a party’s new evidence to a contested hearing arbitration on limited issues.

The end result? A mediation agreement and an arbitration award that both parties have complied with courteously.

Moving from a mediation into an arbitration means

taking particular care over the procedure

My most diffi cult case was a Med-Arb. I was appointed as the mediator and then the arbitrator by the parties

UK

QUESTION ON CIARB'S LINKEDIN GROUP: MED-ARB IS USED IN MANY COUNTRIES. IS THIS KIND OF PROCEEDING USEFUL AND HOW CAN IT WORK BETTER?

Look out for coverage of CIArb’s 4th Annual Mediation Symposium in the February issue of The Resolver

BEST OF THEADR DEBATE

Follow CIArb and take part in the debate at:

twitter.com/Ciarb linkedin.com facebook.com www.ciarb.org/forum

p17_toughest dispute.FINAL.indd 17p17_toughest dispute.FINAL.indd 17 25/10/11 09:19:1525/10/11 09:19:15


WHAT’S ONTRAININGCIArb professional training diary November 2011 – March 2012

Further information on all of CIArb’s international 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

Courses held at 12 Bloomsbury Square, London (unless otherwise indicated)

2011NOVEMBER7th-9th & 11th–12th MEDIATION Module 1 – Commercial mediation training Provides the skills and knowledge necessary to become a CIArb Accredited Mediator, and/or represent clients in mediation.Duration: 5 daysFee: £2595 + VATLocation: London

15th ARBITRATION Introduction Provides an understanding of the general principles of arbitration.Duration: 1 dayFee: £499 + VATLocation: London

16th INTERNATIONAL ARBITRATIONIntroduction Provides an understanding of the principles of international arbitration.Duration: 1 dayFee: £499 + VATLocation: London

18th MEDIATION Module 2 – Commercial mediation assessmentAn assessment programme aimed at candidates who wish to become a CIArb Member and CIArb Accredited Mediator, to represent clients in mediation. Duration: 1 dayFee: £1295 + VATLocation: London

23rd–25th & 29th–30thMEDIATION Module 1 – Workplace mediation trainingAimed at candidates who wish to become a CIArb Accredited Workplace Mediator.Duration: 5 daysFee: £2295 + VATLocation: London

DECEMBER 5th–6thARBITRATION Accelerated route to membership To provide a fast-track route to Membership through the domestic arbitration pathway.Duration: 2 daysFee: £999 + VATLocation: London

6thMEDIATION Module 2 – Workplace mediation assessment

To assess and consolidate the knowledge gained in Module 1 – Mediation, and enable candidates to qualify as a CIArb Accredited Mediator. Duration: 1 dayFee: £1295 + VATLocation: London

7th-8thARBITRATION Accelerated route to Fellowship To provide a fast-track route to Fellowship through the arbitration pathway. Duration: 2 daysFee: £1549 + VATLocation: London

7th-8thINTERNATIONAL ARBITRATION Accelerated route to Fellowship To provide a fast-track route to Fellowship through the international arbitration pathway. Duration: 2 daysFee: £1549 + VATLocation: London

Open entryMEDIATION Module 4 – Mediation theoryTo demonstrate a robust academic knowledge of a chosen area of mediation.Duration: 6 monthsFee: £549 + VATLocation: London

2012MARCH1st ALTERNATIVE DISPUTE RESOLUTIONIntroduction to ADRProvides a complete explanation of the main categories of ADR. Duration: 1 dayFee: £350 + VAT

6thARBITRATION Introduction to Domestic ArbitrationProvides an understanding of the general principles of arbitration.Duration: 1 dayFee: £400 + VAT

6th INTERNATIONAL ARBITRATIONIntroduction to International ArbitrationProvides an understanding of the principles of international arbitration.Duration: 1 dayFee: £400 + VAT

7th-8thARBITRATIONAccelerated Route to Fellowship – ArbitrationTo provide a fast-track route to Fellowship through the arbitration pathway.Duration: 2 daysFee: £1550 + VAT

12th ARBITRATION & ADJUDICATIONModule 1 Law of Obligations and Civil EvidenceProvides a robust understanding of and appreciation of the key, relevant aspects of the legal system. Duration: 7 monthsFee: £1100 + VAT

12th MEDIATION Module 3 Mediation – Law for MediatorsProvides suffi cient knowledge of relevant legal systems and mediator-related laws to enable comprehension of the context of the dispute.Duration: 7 monthsFee: £1100 + VAT

12th–14thMEDIATION Workplace Mediation Conversion CourseProvides commercial mediators with an understanding of the theory of mediation in the workplace.Duration: 3 daysFee: £1500 +VAT

13th MEDIATION Introduction to MediationProvides an understanding of the general principles of mediation.Duration: 1 dayFee: £400 + VATLocation: London

13thADJUDICATION Introduction to AdjudicationProvides an understanding of the general principles of Adjudication. Duration: 1 dayFee: £400 + VAT

14th–15thARBITRATION Accelerated Route to Membership – Domestic ArbitrationTo provide a fast-track route to Membership through the domestic arbitration pathway.Duration: 2 daysFee: £1100 + VAT

15th INTERNATIONAL ARBITRATIONModule 2 International Arbitration – Law of ArbitrationProvides candidates with a detailed knowledge and understanding of the law of arbitration.Duration: 5 monthsFee: £1100 + VAT

19th–24th (22nd – Study Day)MEDIATION Module 1 Mediation – Commercial Mediation Training Provides the skills and knowledge necessary to become a CIArb Accredited Mediator, and/or represent clients in mediation.Duration: 5 daysFee: £2595 + VAT

26th ADJUDICATION Module 4 Adjudication – Writing a DecisionProvides suffi cient knowledge of and practice in all the requirements for the writing of a fi nal, reasoned and enforceable adjudication decision.Duration: 4 monthsFee: £1100 + VAT

27th MEDIATION Introduction to Workplace MediationProvides an understanding of the general principles of workplace mediationDuration: 1 dayFee: £499 + VAT

27th–28th (27th – Refresher Day)MEDIATION Module 2 Commercial Mediation AssessmentA chance to revise mediation techniques prior to assessment. Duration: 1 DayFee: £450 + VAT

28th MEDIATION Module 2 Mediation – AssessmentAn assessment programme aimed at candidates who wish to become a CIArb Member and CIArb Accredited Mediator, to represent clients in mediation. Duration: 2 daysFee: £1500 + VAT

29th INTERNATIONAL ARBITRATION Module 4 International Arbitration – Award WritingProvides suffi cient knowledge of and practice in the writing of a fi nal, reasoned and enforceable arbitration award in a commercial dispute.Duration: 4 monthsFee: £1100 + VAT

30thARBITRATION Module 3 Arbitration – Practice, Procedure, Drafting & Deciding – Domestic & International ArbitrationProvides detailed knowledge of, and guided practice in, the main procedural elements involved in a commercial arbitration. Duration: 6 monthsFee: £1550 + VAT

MAY21st–23rd & 30th–31st MayMEDIATION Module 1 Mediation – Workplace Mediation TrainingAimed at candidates who wish to become a CIArb Accredited Workplace Mediator.Duration: 5 daysFee: £2595 + VAT

Courses are also run internationally. More information → www.ciarb.org/course-fi nder

KEY: � ARBITRATION � ADJUDICATION � MEDIATION � INTERNATIONAL ARBITRATION � ARBITRATION � COMMERCIAL DISPUTE RESOLUTION & ADJUDICATION � GENERAL ALTERNATIVE DISPUTE RESOLUTION

NEW

p18 what's on.FINAL.indd 18p18 what's on.FINAL.indd 18 25/10/11 09:21:0625/10/11 09:21:06

Enhanced withNew Practice Tools

KluwerArbitration

www.KluwerArbitration.com

KluwerArbitration now includes two time-savingpractice tools: a set of 3 easy-to-use question andanswer Smart Charts, edited by Clifford Chance LLP,and a search-for-an-arbitrator tool, the IAI ArbitratorTool, developed in conjunction with the InternationalArbitration Institute (IAI).

NEW Comparative Smart ChartsThe question and answer Smart Charts allow you to quickly examineand/or compare specific content by particular jurisdiction or arbitralinstitution. The charts include:

■ Drafting an Arbitration Agreement: A comparative summaryof the main components of arbitration agreements across keyjurisdictions. It assists with the drafting of valid and bindingarbitration agreements and helps ensure that awards rendered inthose jurisdictions are not subject to challenge, or have difficultybeing enforced.

■ State Immunity: A comparative summary of the circumstances inwhich, and legal basis on which, immunity from enforcement maybe claimed by States and State entities across key jurisdictions.It assists with dispute management and planning and withenforcement once a favourable Award has been rendered.

■ Arbitral Institutions: An at-a-glancecomparative summary of the proceduralrules of the majorinternational ArbitralInstitutions.

The Smart Charts havebeen edited by AudleySheppard, Head ofInternational ArbitrationGroup, Clifford Chance LLP,with the assistance of adedicate team of countrycontributors.

NEW IAI Arbitrator ToolThe IAI Arbitrator Tool on KluwerArbitration allows you to search theIAI Directory and compare the members’ details. Searches can be runbased on a number of criteria: name, country of residence; nationality;languages spoken; experience, both as arbitrator, or as counsel;publications and Awards rendered. Where appropriate, links will beincluded to the full text of publications or awards on KluwerArbitration.The ‘Compare’ function allows you to view arbitrator’s side-by-side,to aid ease-of-use.

The IAI Arbitrator tool has been developed in conjunction withthe International Arbitration Institute (IAI). The IAI maintains aDirectory of members that is considered as one of the best sourcesof biographical information on arbitration specialists. It containsbiographical details over 600 members in 44 countries.

Benefits of Using the New Practice ToolsThe Practice Tools have been designed to help you:

■ Save valuable research time as you will be able to quickly andeasily compare specific areas of international arbitration byjurisdiction or institution.

■ Conduct powerful research by linking from the practice tools torelevant information such as awards or publications containedwithin KluwerArbitration.

HOW TO SUBSCRIBE

If you would like to subscribeto KluwerArbitration, pleasecontact our sales teamby telephone on

(+31) 172 64 1562or by email [email protected]

©Kluwer Law International

RES.10.11.019.indd 1RES.10.11.019.indd 1 25/10/11 09:29:5125/10/11 09:29:51

REUTERS/Charles Platiau

• Covers the theory, principles and practice of ADR with a strong emphasis

on mediation

• Addresses all main fi elds of dispute resolution including civil-commercial,

family and divorce, employment, environmental and restorative justice

• Explores and integrates models of practice, examining strategies and

providing precedents

• New chapters include an introduction to dispute resolution psychology

and provide insight into strategies for working with high confl ict parties

SWEET & MAXWELL

GUIDING YOU THROUGH DISPUTE RESOLUTION

ADR: PRINCIPLES AND PRACTICEHenry Brown & Arthur Marriott QC

PLACE YOUR ORDER NOWVISIT sweetandmaxwell.co.uk to order your copyEMAIL [email protected] 0845 600 9355 (UK) +44 (0)1264 388 560 (International) Quoting reference number: 0610403A

3RDEDITION

RES.10.11.020.indd 1RES.10.11.020.indd 1 25/10/11 09:30:0925/10/11 09:30:09