Volume 9, Issue 1 (July 2020)

 

TABLE OF CONTENTS

 

 

Editorial

 

 

Online Arbitration

Jeffrey M. Waincymer

This editorial addresses the policy and practical considerations when we seek to use online systems with international arbitration. It traverses the criteria by which online dispute resolution should be evaluated, considers the powers, rights, and obligations of the parties, outlines some of the key practical approaches that tribunals might encourage, and considers some of the key stages of a typical arbitration, to consider how online systems may best be utilised.

 

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Articles

 

 

A Trap for the Unwary: Delineating Physical and Legal Protection under Full Protection and Security Clauses

Thomas Snider & Aishwarya Nair

This article considers the scope of protection accorded by the full protection and security standard and the potentially inadvertent impact of the wording of certain FPS clauses on this scope. Based on a review of the FPS clauses in model bilateral investment treaties issued by 45 countries around the world, this article identifies a growing trend towards limiting the scope of FPS clauses to providing physical protection and security and assesses the typical styles of drafting such FPS clauses. This article concludes, with the support of investment arbitration awards, that broadly-worded FPS clauses – even if expressly limited to physical protection and security – may enable claims related to the legal protection and security of investments to be successfully raised.

 

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Fork in the Road in Investment Disputes

Sergiy A. Voitovich

Some investment treaties provide that once the dispute has been submitted to the court of the host State or to international arbitration, the choice of one of these procedures will be final. Such provisions are called ‘fork in the road’ provisions. In this paper, based on a review of the major cases dealing with FITR provisions, the author suggests some thoughts on the nature of the FITR concept and practical methods of addressing FITR-based arguments in investor-State disputes. In the author’s view, ideally the ‘triple identity test’ and the ‘same fundamental basis’ test should be jointly applied to the analysis of case-specific FITR issues. Apparently, the most tenable decision would be if both tests show the same result. While the triple identity test with all its formalism, has clear criteria, the same fundamental basis test needs clarification. Based on some arbitral decisions, the author considers that the fundamental basis should include both the factual and the legal/normative basis for the claims to be considered essentially the same.

 

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A Conservative Model of Arbitration: The Russian Experience

Prof. Oleg Skvortsov

Between 2015-2019, large-scale arbitration reforms were carried out in Russia. As a result of these reforms, a conservative model of arbitration emerged. Simultaneously, Russian lawmakers rejected the liberal approach to arbitration that had prevailed in Russia for the previous 25 years. This article analyses the reasons and prerequisites for the reform and its consequences. In particular, it investigates the widespread phenomenon which has received the name “pocket arbitration”. The role of the higher state courts that fought against pocket arbitration as well as anti-arbitration judicial practice resulting from the confrontation between the courts and arbitration are noted in this article. Special attention is paid to the ideology of conservative reform and its legal technique. The author assumes that each legal technique can be applied to regulate arbitration even within the framework of a liberal model, but it is their combination that creates a conservative model in the form of an integral regulatory system. The analysis results in the conclusion that an unfavourable atmosphere has been created in Russia for the consideration of disputes through arbitration.

 

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More Rights for More People?: The Struggle of Independent Contractors to Arbitrate Employment Claims against International Organisations

Luis Bergolla

This article discusses an arbitration that took place under the Employment Arbitration Rules of the American Arbitration Association, in which I was the Claimant’s pro bono attorney. The parties to this arbitration were an individual and her employer—an international organisation based in the United States. This article focuses on the organisation’s argument that the parties’ different nationalities and the individual’s post-employment relocation outside the U.S. rendered the dispute ‘international’. Accepting this characterisation would have been fatal to the arbitration to the extent that each party would have been responsible for 50% of the arbitrator’s fees and arbitration costs under the AAA’s International Arbitration Rules—something prohibitive for most employee-claimants—whereas under the Employment Rules only the organisation would have been financially responsible. Unfortunately, when the AAA decided to administer the case under the Employment Rules, the organisation asserted its immunity of jurisdiction and withdrew from the arbitration. Contrasted with the recent arbitration cases in which the workers of large corporations have sought to annul arbitration clauses, this case speaks about an individual who, unable to have her day in court, struggled—and failed—to preserve her right to settle her employment claims in arbitration.

 

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Limitation Period for the Recognition and Enforcement of Foreign Arbitral Awards

Guiqiang Liu

When seeking the recognition and enforcement of foreign arbitral awards, the limitation period is one of the factors that award creditors need to consider. The limitation period, however, varies significantly in different countries. This article conducts a comprehensive survey of the limitation periods in the Contracting States of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards by studying relevant legislation, case law, and survey reports. The author argues that the current diversified practice on limitation periods among the Contracting States undermines certainty and predictability in international commercial transactions, and at the same time, prejudices commercial parties’ interest. To solve the problem, the article proposes three solutions. First, the best approach is to harmonise limitation periods at the international level by providing a uniform limitation period in the New York Convention. Second, another viable approach is to urge the Contracting States to provide specific limitation periods in their domestic laws, so as to provide a clear and predictable time for both award creditors and award debtors. Alternatively, with no further changes at either the international or the domestic level, the only option for award creditors would be to seek enforcement in another forum or enforce the arbitral awards in the form of judgments in certain jurisdictions.

 

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Independence and Impartiality of Arbitral Tribunals: Legality of Unilateral Appointments

Udian Sharma

An independent and impartial arbitral tribunal is one of the cornerstones of arbitration law. Apropos of this, the unilateral appointment of arbitrators raises a reasonable apprehension of partiality and bias, resulting in a collapse of the arbitral process. This article will attempt to analyse the law of asymmetrical clauses present in arbitration agreements, thus questioning the unfettered right of a party to appoint arbitrators solely. This article shall compare the principles of contractual laws qua the principle of equity, through legislative intent and judicial interpretations of unequal clauses. Further, the contemporary developments under the Arbitration and Conciliation Act, 1996, along with the significant judicial pronouncements on the issue of unilateral appointment of arbitrators shall also be critically examined. The article shall also examine the ambiguity and the conflict created by divergent decisions of the courts, while discussing the international jurisprudence on this issue. This article concludes by proposing to achieve a system of ‘faceless tribunals’, through the advancement of arbitral institutions and the use of artificial intelligence in the appointment of arbitral tribunals, which can reduce the presumption of partiality.

 

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Jurisdictional Issues in Indian Arbitration Cases: A Uniformized Approach

Soumil Jhanwar

One of the major goals of the legal regime of arbitration is the elimination of the need for courts in resolving arbitrable disputes. However, court assistance is very frequent in arbitration. This may be for conducting procedural supervision or testing substantive validity. In light of this, the determination of the court with valid jurisdiction is crucial. This determination is a two-step process. First, one needs to determine the seat of the arbitration. Then, the appropriate court must be decided on the basis of the law of the seat. Both steps of the process are very complex and have led to various conflicting judgments in India. This article attempts to provide rationally sound and normatively defensible tests for the determination of the seat and the appropriate court. In Part I, the article looks at the conflicts in the determination of the seat where an agreement does not explicitly mention a seat. In Part II, the article looks at the domestic conflicts in determination of jurisdiction. The aim of the article is to uniformize these two determinations in order to make the law more predictable.

 

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Notes

 

 

Virtual Arbitration: The Impact of COVID-19

David Bateson

The need of the international community to resolve their disputes during the COVID-19 pandemic has resulted in a sudden increase in the number of arbitrations taking place virtually. Governments have imposed containment measures, making it impossible to conduct in-person arbitrations. Several concerns have been raised regarding the adequacy of present-day procedural frameworks to accommodate virtual arbitrations, witness testimonies, and cross-examination taking place virtually, and limitations of new technologies, and issues arising therefrom. This note addresses these concerns in light of the various soft law instruments that were already in place or have been developed to facilitate the transition to virtual arbitrations as the ‘new normal’. In addition to serving as guidelines on how to conduct arbitrations, take evidence, and handle witness testimonies and cross-examinations, these soft law instruments ensure that the rights of the parties are not prejudiced as a result of arbitrations taking place virtually. Lastly, after listing some of the platforms available to the parties for conducting virtual arbitrations and features thereof, this note concludes with some remarks on how the ‘new normal’ impacts the future of arbitration.

 

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“If in Doubt, Disclose?”: Arbitrator Conflicts, Challenges and Repercussions

Robert S. Pé

In view of the increase in challenges being raised against arbitrators, this note examines two real-life case studies with opposite outcomes to consider their differences in context and to explore the importance of disclosure.

 

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N.V. International and the Confounding Case of Limitation for Arbitration Appeals in India

Anhad S. Miglani

The Arbitration and Conciliation Act, 1996 was enacted with a view, inter alia, to develop a fair and efficient system of arbitration in India, with minimal judicial intervention. Yet, ironically, in balancing the interests of fairness against the need for efficiency, judicial intervention sometimes becomes inevitable. The Supreme Court, recently faced with a similar situation, was called upon to decide on the contours of the limitation period applicable to arbitration appeals under the Arbitration Act. Highlighting efficiency and speedy resolution as the foundation of India’s arbitration regime, the Court laid down a law favouring seemingly restrictive and technical considerations at the expense of certain settled legal principles. In light of the same, this note is an attempt to analyse and evaluate the rationale behind the decision and the implications thereof on parties, proceedings and the law itself.

 

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