Print version

Overview
Parties are increasingly transacting business across a range of jurisdictions. The parties themselves may reside in a number of different countries, each subject to quite different laws and legal systems. Complicating matters further, their transactions may involve activities in yet other jurisdictions, where they otherwise have no presence or familiarity.

As the rate of global business activity continues, parties have increasingly recognised the importance of avoiding or resolving disputes within a relatively stable, understood and neutral process. Private arbitration agreements have proven very successful in this regard.

International arbitration processes have become widely recognised throughout the world. These processes are given considerable support by legislation in various countries, including legislation incorporating or adopting different international conventions or rules, such as the Panama Convention, the Vienna Convention or the UNCITRAL Model Law.
 

Some issues

As with domestic arbitration, parties generally appreciate the opportunity in international arbitration for their dispute to be determined flexibly, privately and enforceably, with relative time and cost efficiency and appropriate technical input. However, listed below, are some of the special issues that arise in the context of international arbitration.

  • Arbitrator selection: The background and experience of arbitrators is particularly significant in an international context. Knowledge of the governing law of the contract and familiarity with the culture, language and process of the seat of the arbitration are just some of the matters to be considered. Too often, parties do not understand the implications of arbitrator selection procedures and options.
  • Institutional or ad hoc arbitration: The parties need to consider whether to conduct any arbitration according to the rules of an institution. Parties regularly do not understand the alternative institutions and rules available and their implications. Where ad hoc arbitration is preferable, the procedural alternatives again must be clearly understood and particularly the advantages and disadvantages.
  • Law of the contract: The governing law will regulate the rights and obligations of the parties. Clearly, care needs to be taken in selecting the appropriate law, understanding the law that will be applied and appreciating the relevant risks and potential consequences.
  • Place of the arbitration: The place or seat of the arbitration may not correlate with the law of the contract; in fact, it may be desirable that it does not. The place of the arbitration will determine procedural issues, which may impact on the issuing of subpoenas, applications for security for costs and rights of appeal from the award. The seat of the arbitration will not necessarily mean that hearings are all held there. The seat of the arbitration can have a very fundamental impact on the way in which the arbitration will proceed, including the extent of discovery obligations and the way in which evidence is likely to be entered.
  • Privacy/confidentiality: Whether arbitral proceedings will be confidential at law differs from country to country. Parties should consider and understand when confidentiality will apply and to what extent.
  • Privilege: Special issues can easily arise through the involvement of multiple parties on behalf of a single dispute participant. It can be critical to appreciate from the outset whether communications with lawyers in one country will be privileged in any arbitration, having regard to the laws of the contract and place of arbitration.
  • Resourcing and technology: The efficient management of resources and technology can be critical. Enormous amounts of time and money can be wasted while grappling with logistical and timing issues. On the other hand, effective use of technology and time zones can provide substantial advantages in both time and cost, including 24-hour working processes that use time zone differences to maximum advantage.
  • Sovereign risks: Parties need to understand the nature and extent of sovereign risks. Sovereign risks will apply not only to their transaction but also to the arbitration process, both in terms of applicable law and process.

Needs analysis
  • Are you familiar with the range of special issues applicable to international arbitration processes?
  • Do you understand the circumstances in which various options will lead to significant strategic advantage or disadvantage for particular parties?
  • When entering into contracts, does your organisation ensure that any agreed arbitration process will be binding and enforceable?

Our services

Our high calibre team:

  • provides detailed advice on alternative arbitration structures, including relevant considerations, requirements, suitability, advantages and disadvantages
  • assists in the negotiation and drafting of enforceable arbitration processes, including multi-tiered, hybrid and tailored processes
  • works with clients to strategically and cost effectively implement arbitration processes to achieve superior outcomes.