SIAC-NYU School of Law Seminar 2024: Challenging Fundamental Notions of International Arbitration
29 February 2024
Daniel Gaw (WongPartnership LLP) / 1 February 2024
On 25 January 2024, the Singapore International Arbitration Centre ("SIAC") and New York University ("NYU") School of Law's Center for Transnational Litigation, Arbitration, and Commercial Law jointly held a seminar titled "Challenging Fundamental Notions of International Arbitration" ("Seminar").
The Seminar, which was hosted by Maxwell Chambers in Singapore, featured a series of three lectures focusing on specific aspects of international arbitration, including: (a) party autonomy; (b) cost and time efficiency of international commercial arbitration; and (c) the New York Convention's uniform regime. After each lecture, two discussants provided comments and thoughts on the issues raised in the lecture.
Lecture 1: Party Autonomy
Prof Franco Ferrari (NYU School of Law), who delivered the first lecture, challenged the view that party autonomy in international arbitration is unfettered. He argued that there are limitations on party autonomy both at the pre-arbitral stage and after arbitration is commenced:
- At the pre-arbitral stage, national courts apply certain conditions regarding the validity, existence and scope of arbitration agreements which impose certain limitations on party autonomy. These include form requirements, rules on subject matter arbitrability, and objective criteria on whether a dispute resolution mechanism qualifies as arbitration.
- Post-commencement, party autonomy is also limited by various factors such as the default terms of appointment and mandatory rules that cannot be derogated from, whether imposed by law or by arbitral institutions.
In response, Mr Timothy Cooke (Reed Smith) pointed out that party autonomy in international arbitration is manifested through the parties' ability to choose the seat and the institutional rules which will govern the arbitration. He noted that legislatures and arbitral institutions have developed various innovations to attract users, such as Singapore's enactment of a law specifying that IP disputes are arbitrable and SIAC's popularisation of emergency arbitration.
Ms Rebecca James (Linklaters) agreed, noting that parties decide through their exercise of freedom and autonomy what institutional rules they will be bound by. She further observed that institutional rules generally afford parties a large degree of freedom and provide for more flexibility and room to tailor procedures compared to national courts.
Lecture 2: Cost and Time Efficiency of International Commercial Arbitration
The second lecture was delivered by Mr Kevin Nash (Registrar, SIAC). His main point was that time and costs are an important reason why parties choose arbitration, and that all arbitral actors have a part to play in controlling these costs and may enter the arbitration with different expectations. To that end, from the institutional perspective, Mr Nash queried whether institutions carry a mandate to proactively manage arbitrations and discussed the best way to achieve this efficiency while balancing party autonomy, party expectations and due process. In this regard, Mr Nash noted some of the advantages and challenges of administering cases conducted under SIAC's Expedited Procedure and looked ahead to the possibilities with SIAC's Streamlined Procedure contemplated in the draft 7th Edition of the SIAC Rules. He closed by noting that an underreported marker of efficiency is the increased rate of settlements in cases conducted under SIAC's special procedures, in particular, emergency arbitration and early dismissal.
Prof Darius Chan (Singapore Management University; Fountain Court Chambers; Breakpoint LLC) suggested several ideas that institutions could consider to further control the time and costs of arbitration. These include empowering the tribunal to issue an unreasoned decision with reasons to follow later if requested by the parties; having the institution's counsel confer with the parties before the tribunal is constituted on how best to control time and costs (similar to what assistant registrars do in the Singapore courts); or even allowing arbitrators to double-hat as mediators for the same dispute.
Ms Xuanzhong Wang (SIAC) opined that there is value in institutions taking on a more pro-active role, especially when dealing with less sophisticated users of arbitration. For example, SIAC counsel can point parties to provisions in the SIAC Rules, such as the Expedited Procedure, and ask them to consider whether they wish to adopt those procedures. She also noted that the Draft 7th Edition of the SIAC Rules allows the Registrar to convene an administrative conference with the parties before the tribunal is constituted, thus providing an avenue for SIAC to talk to the parties about the various procedural tools available and explain certain aspects of SIAC arbitration.
Lecture 3: The New York Convention's Uniform Regime
Delivering the third lecture, Mr Domenico Di Pietro (Di Pietro Arbitration) explained how the New York Convention balances the needs of international arbitration with the public policies of the Contracting States. It does so by allowing domestic law to come into play at various junctures, such as in Article V(2)(b), which allows a country's courts to refuse recognition and enforcement of an award where doing so would be contrary to that country's public policy.
One issue highlighted by Mr Di Pietro related to the different approaches adopted by different jurisdictions to the enforcement of an award that has been annulled at the seat of arbitration. In France and the US, courts may enforce annulled awards, while the same is not the case elsewhere. In that regard, Dr Matthew Secomb (White & Case) argued that the enforcement of awards that have been set aside at the seat of arbitration involves a clash between common sense and the optimal outcome. The common sense is that if the parties chose a seat and the courts of the chosen seat have set aside the award, then people should respect that; but that is not the optimal outcome. Ms Jae Hee Suh (Allen & Overy) argued that the New York Convention itself confers special status on the courts of the seat, and the raison d'etre of the annulment procedure would be frustrated if the enforcement court could simply disregard the seat court's decisions. She agreed, however, that a delocalised approach makes sense from the parties' perspective, as they would want an award that is enforceable in as many jurisdictions as possible.
The second issue explored by Mr Di Pietro concerned the enforcement of "judgment awards" - i.e. an award that has been recognised and enforced by a state and converted into a judgment of that state's courts. Ms Suh noted that countries like the US, UK, Australia and Singapore permit parties to make a strategic decision as to whether they wish to enforce the award itself or a judgment of a foreign state enforcing the award (assuming that the foreign state's judgments are enforceable in the forum). The question that arises is whether this option should be taken away, given that it potentially allows a party to circumvent the controls in the New York Convention for the recognition and enforcement of awards. Ms Suh pointed out that the argument in favour of allowing the judgment route is that it is only available where the enforcing jurisdiction considers that the foreign court's judgments deserve a degree of comity or deference. In response, Dr Secomb argued that the pro-arbitration approach would be to allow parties to enforce judgment awards if there is an artificial obstacle to going through the award route.
Conclusion
All in all, the Seminar provoked a stimulating afternoon of discussion between the lecturers, discussants and audience members on various key topics in international arbitration. Despite being titled "Challenging Fundamental Notions of International Arbitration", the Seminar demonstrated that one fundamental feature of international arbitration - its ability to bring together legal practitioners from different cultures and jurisdictions to discuss dispute resolution from a transnational rather than parochial perspective -- remains alive and well.
TDM/OGEMID was Media Partner of the event.
Daniel Gaw is a Partner in the Commercial & Corporate Disputes and International Arbitration Practices at WongPartnership LLP. He is an APAC member of the YSIAC Council and holds an LL.M. in International Business Regulation, Litigation and Arbitration from the NYU School of Law.
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