Resolving Cross-Border Disputes Using International Arbitration - - PowerPoint PPT Presentation

Resolving Cross-Border Disputes Using International Arbitration

Outline

Outline

What is commercial arbitration? Why choose arbitration? Potential drawbacks of arbitration How to take advantage of arbitration Investor-state arbitration Impact of CETA on international arbitration

What is 
 International Arbitration?

Commercial arbitration is a type of alternative dispute resolution (ADR) where the two sides agree to submit their disagreement to a private individual for a final and binding decision.

Key Features of Commercial Arbitration

Substitute for court Consensual Faster, more efficient, and more streamlined than court Parties appoint arbitrator(s) More flexible, informal Final and binding

Commercial Arbitration as an ADR Mechanism

Why Choose
 International Arbitration?

Why Choose International Commercial Arbitration?

• 1. Decisions are enforceable worldwide
• 2. Decisions are final and binding
• 3. Neutral forum
• 4. Parties select arbitrator
• 5. Flexible process
• 6. Efficient dispute resolution
• 7. Confidentiality
• 8. Recovery of Costs

Key Benefits

Worldwide Enforcement

1

Worldwide Enforcement

If the losing side refuses to carry out the arbitrator’s decision, the successful side will have to enforce it in a country where the losing side has assets Unlike court judgments, arbitration awards are enforceable virtually worldwide under the New York Convention This is by far the most significant benefit of international arbitration

Worldwide Enforcement

159

Contracting States

Worldwide Enforcement

Worldwide Enforcement

The successful party can apply to a local court for a judgment enforcing the arbitral award Also prevents the losing side from trying to re-litigate the dispute in domestic courts Very limited exceptions to resist enforcement Enforcement cannot be resisted on the basis that the case was wrongly decided

Finality of Decisions

2

Finality of Decisions

An arbitral award is final and binding on the parties Appeals are extremely limited and very rarely successful Generally, appeals are only permitted on serious grounds related to a defect in the arbitration itself Courts around the world are increasingly reluctant to interfere with awards Limited grounds of appeal are widely accepted Any doubts tend to be resolved in favour of arbitration

Neutral Forum

3

Quality of Decisions

Avoid going to court in the home jurisdiction of one of the parties Neutral decision-makers and forums many arbitration rules expressly provide that the deciding arbitrator must be of different nationality than the parties arbitrations typically take place in major and trustworthy commercial hubs (London, New York, Stockholm, etc.)

Parties Appoint Arbitrator(s)

4

Parties Appoint Arbitrator(s)

Parties get to select arbitrator Unlike the courts, the two sides can select arbitrator or arbitrators with the specific expertise that the parties desire

Flexibility

5

Flexibility

The two sides are free to select procedural rules that best suit their specific dispute Many institutional rules to choose from OR Can craft their own unique rules Less formal rules of evidence Unlike courts, arbitration tribunals generally tend not to exclude evidence and instead apply a more flexible approach

Efficient Dispute Resolution

6

Efficient Dispute Resolution

Faster, cheaper, more efficient procedure than court process No lengthy oral discoveries or depositions More streamlined document exchange Hearings much shorter than trials

Confidentiality

7

Confidentiality

Unlike typical court proceedings, arbitrations can be: undertaken entirely in private and kept entirely confidential

Recovery of Costs

8

Recovery of Costs

Unlike court process, the successful party in an arbitration typically recovers some or all of its costs, including its legal costs Discourages frivolous claims Encourages the two sides to: behave professionally and civilly settle their dispute

Potential Drawbacks of International Arbitration

Potential Drawbacks of International Arbitration

Potentially high upfront costs Potential early delays Limits on arbitrators’ powers Difficulties associated with multi-party disputes No binding precedent

How to Take Advantage

• f Arbitration

How to Take Advantage of Arbitration

Investor-State Arbitration

What is Investor-State Arbitration?

Historically, private investors had little recourse against a state that had harmed their investment Starting in 1990s countries began to enter into Bilateral Investment Treaties (BITs) BITs require states to provide certain guaranteed protections to foreign investors Where states fail to provide those protections, BITs allow foreign investors to sue before independent and impartial international arbitration tribunals

What is Investor-State Arbitration?

Investor protections are found in treaties BITs Free Trade Agreements (NAFTA, CETA) Sector-specific Agreements (Energy Charter Treaty) Binding and enforceable awards States almost always agree by abide by the outcome of these proceedings

Proliferation of BITs

Proliferation of BITs

Proliferation of Investor-State Cases

50 100 150 200 250 300 350 1960 1970 1980 1990 2000 2010 2000s 1990s 1980s

Investor-State Arbitration Process

Very similar to international commercial arbitration Tribunals typically made up of 3 members If the state wins, the investor typically does not pay costs for public policy reasons

CETA’s Impact

Impact of CETA on International Arbitration

Does not affect private international arbitrations Contains a new dispute resolution mechanism for investor- state disputes The new mechanism is not in force yet Once CETA is ratified by all states, the new mechanism will replace the mechanisms in Canada’s BITs with EU members However: the dispute resolution mechanism may never come to force due to ongoing legal challenges

Thank you