International Arbitration Legal Update, Second Edition

Keywords: international arbitration,

Legal Updates:

ICC LAUNCHES TASK FORCE ON REVISION OF RULES AS APPOINTING AUTHORITY

31 August 2015: The ICC set up a 'Task Force on the Revision of the Rules of ICC as Appointing Authority in UNCITRAL or other Ad Hoc Arbitration Proceedings'. The Task Force's mission will be to determine if amendments to the Rules of ICC as Appointing Authority in UNCITRAL or other Ad Hoc Arbitration Proceedings are useful or necessary, and proceed with these amendments. Alejandro López Ortiz, partner in Mayer Brown's International Arbitration practice in Paris, has been appointed as a member of this Task Force.

NEW PRACTICE GUIDELINES PUBLISHED BY THE CIARB

20 September 2015: The Chartered Institute of Arbitrators' (the "CIArb") Practice and Standards Committee published three updated sets of guidelines on jurisdictional challenges, applications for interim measures and applications for security for costs. Fifteen remaining sets of guidelines are still under review. The three updated guidelines set out best practice for arbitrators responding to procedural issues and common challenges. They are not prescriptive nor do they contain any legal advice.

CONCLUSION OF THE TRANS-PACIFIC PARTNERSHIP (THE "TTP")

4 October 2015: Trade ministers from 12 countries in the Asia-Pacific region concluded the TTP, a regional trade agreement involving 40% of the world economy, that combines trade and investment liberalisation. The 12 parties to the TTP are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam. The TTP focuses upon rules and disciplines in areas such as government procurement, labour and intellectual property rights. The TTP is designed to enhance market access by removing or reducing tariff and non-tariff trade barriers and it adopts a regional approach by enabling the development of production and supply chains.

QMUL INTERNATIONAL ARBITRATION SURVEY

6 October 2015: The Queen Mary University of London published its sixth annual survey on Improvements and Innovations in International Arbitration. The survey presents quantitative data in relation to international arbitration practices and trends. Key statistics revealed from the survey include the following:

90% of those surveyed prefer arbitration as a dispute resolution mechanism. Survey respondents view the enforceability of awards as arbitration's most valuable characteristic, closely followed by its ability to avoid specific legal systems/ national courts, its flexibility, and the ability it offers parties to select their own arbitrators. Costs were listed among arbitration's worst characteristics, along with the lack of effective sanctions during the process, the lack of insight into the arbitrators' efficiency and the slowness of the process. Survey respondents would welcome more publicly accessible data regarding the average length of a case, as well as the speed of obtaining an award. The five most preferred institutions are the ICC (Paris), LCIA (London), HKIAC (Hong Kong), SIAC (Singapore) and SCC (Stockholm). To read the full survey, please click here.

ICC TO PUBLISH REASONS FOR ADMINISTRATIVE DECISIONS

8 October 2015: In demonstration of its commitment to improving transparency in international arbitration, the ICC announced its decision to communicate reasons for certain administrative decisions made under the ICC Rules of Arbitration, upon the parties' request. The cost of such communications may be passed on to users through the increase of administrative expenses.

If so requested by the parties, the ICC will now provide the reasons behind its decisions in relation to:

Challenges of an arbitrator; Replacement of an arbitrator; Consolidation of arbitration proceedings; and Decisions on the existence of an arbitration agreement. INDIA TAKES TWO PRO-ARBITRATION STEPS: NEW ARBITATION ORDINANCE ADOPTED AND NEW DRAFT MODEL BIT RELEASED

23 October 2015: The Indian Arbitration and Conciliation (Amendment) Ordinance (the "Ordinance") entered into force, though it still requires parliamentary approval. The Ordinance amends the Indian Arbitration and Conciliation Act 1996 and reinforces the Indian government's commitment to improve business conditions in India. Key changes implemented by the Ordinance include the amendment to the definition of 'court' so that matters concerning international arbitration can only be referred to high courts; the introduction of the possibility to obtain interim relief and the collection of evidence by Indian Courts in arbitrations seated outside of India; and a limitation on the length of arbitral proceedings and on the length of challenges to awards dealt with by the court.

India has also made a move towards finalising the Indian Model Bilateral Investment Treaty (the model "BIT") that has been underway for some months. The Law Commission of India (the "LCI") released a new draft of the Model BIT which now includes wording aiming to reassure foreign investors that laws will not be suddenly changed. Likewise, it proposes the inclusion of a 'fair and equitable treatment' provision which would protect foreign investors from violation of due process and harassment by the Indian State, and of a 'most favoured nation' provision.

To read the full text of the Draft BIT, click here.

LCIA RELEASES INFORMATION ON COSTS AND DURATION DATA

3 November 2015: In another attempt to improve transparency and enable users to make informed decisions about arbitration institutions, the LCIA published information on the average cost and duration of an LCIA arbitration. The LCIA data provides an insight into the costs and duration of actual cases administered under LCIA Rules between January 2013 and June 2015. The average duration of an LCIA arbitration is 16 months. The mean cost of an LCIA arbitration is US$ 192,000; the median cost is US$ 99,000.

EU COMMISSION PRESENTS PROPOSAL FOR NEW DISPUTE RESOLUTION MECHANISM: THE INVESTMENT COURT SYSTEM

12 November 2015: The EU Commission formally presented the US with its proposal for a new dispute resolution mechanism, the Investment Court System, to be used in the Transatlantic Trade and Investment Partnership (the "TTIP"), which is currently under negotiation, rather than the traditional Investor-State Dispute Settlement ("ISDS") mechanism. The dispute resolution mechanism to be included in the TTIP has been the source of great global debate. On the one hand, national governments and MEPs have opposed the inclusion of an ISDS mechanism, arguing that a permanent investment court would be a more effective, neutral and transparent means of resolving disputes than arbitration. Likewise, critics argue that an ISDS mechanism would allow business to sue governments whenever new laws reduce their profits. On the other hand, arbitration practitioners and academics have argued that an ISDS mechanism, which has been tried and tested and which provides for an effective flexible process, should be included, rather than the proposed investment court which its critics argue has been motivated by the desire for political appeasement.

DIFC-LCIA ARBITRATION CENTRE RELAUNCHED

18 November 2015: The LCIA announced the relaunch of the DIFC-LCIA Arbitration Centre in Dubai. As part of the relaunch, the Arbitration Centre moved its offices to the iconic DIFC Gate Building. The relaunch and relocation of the Arbitration Centre concludes the restructuring of the Centre following the passage of Dubai Law No. 7 of 2014, which amended certain provisions of Dubai Law No. 9 of 2004 which, in turn, created the Dubai International Financial Centre (the "DIFC"), including its judicial authority. The new law establishes the Dispute Resolution Authority...