Author: Guillermo Coronado Aguilar

When talking and getting into conversations with people outside the small world of international arbitration, I often get asked that sacrosanct question, Hey, so what is international arbitration? Like if it were something quite weird or evilish, created by someone in Mount Doom (from the Lord of the Rings). Created for the sole benefit of stripping out the judicial power of Courts.

However, international arbitration is just a simple way to resolve disputes, it is just a tool or a mechanism. Which has been around us from quite a lot of time, possibly more than 200 years now. For example, before the US having a Supreme Court, it first started with a type of Arbitration Court to solve disputes between the thirteen colonies. And made as well its way first into the resolution of international disputes between states, there is a huge work made by A.M. Stuyt, regarding international arbitrations, you will see a lot of interstate arbitrations, not only the famous Alabama Claims between the US and the UK, which where resolved in Geneva. Then there is a progression of arbitration being adopted by countries to resolve commercial disputes, the example is the UK Arbitration Act of 1889, then the creation of an institution that of the London Court of International Arbitration.

Afterwards, you have the creation of the Permanent Court of Arbitration in 1899 its reforms in 1907, and then the creation of the ICC with its International Court of Arbitration, which is celebrating 100 years now. The idea again was to resolve disputes between commerce people. From an international vantage point.

We can say that international arbitration is a trusted tool to resolve disputes between states and also between commerce people. In the 1930s, there was also the possibility to sue states by individuals; an example is the RCA case v China under the rules of the Permanent Court of Arbitration. Later on, there was a more institutionalized movement to create an institution that could administer disputes between foreign investors and states receiving investment, created under the auspices of the World Bank, or ICSID, the International Center for Settlement of Investment Disputes.

So, we can say at least that international arbitration has been around quite some time and has been applied to resolved inter-state disputes, as well as disputes between individuals (mostly in commercial disputes) and as well to solve disputes between foreing individual investors and states.

What created the possibility to have a robust international arbitration “system“, was the enactment of instruments that help in having a more streamline process when international awards were issued by the Arbitral Tribunals, in this case it is in my perspective the famous New York Convention of 1958, which eliminated the double exequator, that is the necessity to be recognized in the country where the award was issued, and then to be recognized in the country where the award was sought to be enforced. With that the process was much easier, but the second obstacle was how the national courts will behave with such international awards, therefore UNCITRAL published a model law in 1985, so it was easier for countries to have a road map for the adoption of rules that could regulate not only the recognition of international awards, but as well to regulate international arbitrations.

Afterwards, more countries adopted or created their own rules for international arbitration, as well as centers for the administration of international arbitrations, which can be counted in the hundreds right now. The list is huge and keeps growing time after time. Thus, international arbitration can be said to be a trusted tool to resolve international disputes that has been around for quite some time.

This was a small historical perspective on international arbitration; later we will delve more into what international arbitration is. The element is what is international and what is arbitration. If you want to know more about international arbitration and international dispute settlement, follow us for more news and insights.

Lets say that you already had the experience of arbitration, maybe in moots, or maybe in real practice, or you have assisted an arbitrator, but you are still with a sense of whether you can enhance your knowledge on the subject of international arbitration. Below you will find a possible place to enhance your knowledge in international arbitration.

Most probably, you want to go the extra mile and seek an specialized program in international arbitration, but you don’t know where to study it. If you haven’t made up your mind, allow me to present to you the LLM in International Arbitration and Dispute Resolution by the University of Hong Kong.

Why Hong Kong, you may ask?

It is one of those venues with a vibrant arbitration community, no wonder it is the place for the Willem C. Vis Arbitration Moot (East edition) as well as hosting international institutions like the renowned arbitration center like HKIAC, as well as various law-firms specialized in the subject of international arbitration.

Why the University of Hong Kong?

The University of Hong Kong, offers a top-notch arbitration program, it is one of the top QS ranked universities in the world with a diverse and specialized faculty experts in international arbitration and international disputes.

Not only that HKU offers different scholarships, apply before December 1st, 2023, to benefit from the generous scholarships offered by the Graduate School of HKU.

Generally speaking, I am used to writing about complexity theory and international law in my other blog, tuglobalista.com. I do enjoy talking about international law as a complex system and keep my curiosity about arbitration and complex systems swirling around my head.

Some of the questions that I have also relate to the issue of international dispute settlement, and in concrete therms with international arbitration being a complex system. But with that comes the necessity to fine thread the element of complexity, and in the other side that of international arbitration.

For starters, the first question to answer is: What is arbitration?

The second question to answer is: What is a complex system?

Arbitration is a mechanism for resolving disputes. Two or more parties agree to solve a dispute before one, three, or more individual members, which in turn form an arbitral tribunal. Such a mechanism is typically agreed upon through an arbitration clause, either before or during a dispute, contained in a special agreement or an arbitration clause. The dispute is typically resolved through a final award. The intricacies of all the processes are a matter for another post.

Now to the second question. What is a complex system?

In essence a complex system is understood as a system that is created and composed by the interaction of many individuals. (This is obviously a simple definition).

But with that simple definition we can say then that taking complex systems for one side and with international arbitration in the other side. We get the idea that international arbitration as a complex system, is the understanding that international arbitration is a complex system that is composed by the interaction of many individuals.

The vision that I am providing about international arbitration suggests that there is a merging of public and private arbitration, that means, disputes resolved in the public sphere and disputes resolved in the private sphere. Where to draw the line, is quite hard I do not attempt to do it.

What does entail to say that international arbitration is a complex system?

First is that it is composed of a great number of agents, which can be organizations or individuals. On the side of the organizations, we can name the usual suspects, like institutions that administer international arbitrations, but also other institutions like UNCITRAL, which has been working on the standardization of international arbitration rules and, under its work, adopted the New York Convention for the recognition of international awards and arbitration agreements, as well as a model law so countries could change their laws regarding arbitration. And finally, the UNCITRAL Rules of Arbitration, which are rules of ad hoc arbitration when no institution is involved, Also, within this realm of organizations involved, there are other institutions, universities and think tanks with specialized programs, and finally, law firms.

Under a smaller grain, we can see the individual, in this sense, the type of individuals that compose the system is quite diverse, you have academics, lawyers (with all the ranks), as well as arbitrators, students, and administrative staff that works within the institutions that administer arbitrations, and finally arbitral tribunals (however their existence is subject to the dispute, it is created and finishes with the dispute)

That is the complex world of international arbitration, and the individuals tend to interact with each other.

Following the question, how do these agents interact with each other? In my opinion, the interaction has two possible forms: within the disputes and outside the disputes. That is, within disputes, the arbitral tribunal interacts with the parties involved, which in essence are the lawyers who represent clients in arbitration.

Outside arbitration, that is the whole academic discussions that take part of arbitration, the gossip around international arbitration, the actual courses taken by students and the lectures dictated by academics, also by lawyers with experience in arbitration, but as well being professors of universities. Academics writing about new cases, etc.

A consequence of all of that, is that international arbitration seen as a complex system, then causes that the world of international arbitration is subject to change. Changes, in essence come from inside, even if there are external factors.

Some of the changes are caused by technological evolution, and others are due to extreme events. And sometimes, we will see that those extreme events prompt the adoption of new technologies. We experienced firsthand such two elements that caused international arbitration to behave differently, applying new technologies that allowed for the continuation of disputes in the distance.

To look at international arbitration as a complex system opens new ways of looking at phenomena taking place in it and how it behaves, for example, from a network systems approach, the existence of small-world phenomena coupled with non-linearities. Which is the case with international arbitration; that is, it seems to be that a small number of individuals get almost all the attention. It seems then that is a type of industry of a winner takes all situation. You have small clusters and centers that have almost all the cases; for example, in investment arbitration, it seems to be the case that a small number of individuals are appointed on repeated occasions to act as arbitrators. Which is a phenomenon that seems to repeat in commercial arbitration and also seems to be the case with law firms. The above also seems to follow another aspect of the creation of niches in complex systems.

When it comes to international arbitration, there are agents who tend to specialize in particular types of disputes within a complex system. Some of these agents focus on interstate arbitration, while others specialize in investment arbitration, others in commercial arbitration involving international sales, still others in construction disputes, long-term complex contracts, sports-related disputes, etc. I hope you get the idea.

So, arbitration is complex—much more complex than what we seem to accept, even if the rules are quite standard.

Mind mapping is a good technique when you want to have a snapshot of the controversies you are in front of, to know the parties and the relevant facts of the case, it is your compass in the great mass of information that you will have to navigate.

A mind map will help as well in avoiding getting lost within the woods!

We prepared a mind map for the upcoming UP-ICC Moot 2020, in this case you will see the information in Spanish, since the case and everything is in Spanish, we will try our best to have an example in English.

I hope is for the benefit of the community and specially the arbitrators for the next oral virtual rounds!

Let’s say that you were appointed as an arbitrator, having a natural excitement is really great, time for a quick celebration is ok, however, there is a rush of excitement and also you must act promptly and diligently, if the parties are all set, and also the Arbitral Tribunal is determined, you need to have a preparatory conference for the Arbitration which will lead to the Procedural Order number one, also known as the “PO1”.

As I said, having previous experience to arbitrations is not that important, what is fundamental is that you are a good lawyer, and, you already know what you need to be a good lawyer.

Having previous experience in arbitrations, could be an optimal situation for acting as an arbitrator, however, if you are appointed and you don’t have previous experience, you can find that there are out there tons of tools, guidelines and courses, so you can equip yourself with ‘arbitration tools’.

Keep in mind to always remain, neutral, impartial and give the parties the possibility to present their case. The guidelines that you can find as a first stop will be the UNCITRAL Notes on Organizing Arbitral Proceedings, they can help you in setting the preparatory conference to your arbitration in which you can deal with the following matters:

1. Determine the arbitration rules
2. Language of the proceedings
3. Place of the arbitration or the arbitral seat
4. Administrative services for the arbitral tribunal
5. Deposits in respect of the costs of the proceedings
6. Confidentiality of the arbitration as well as a possible confidential agreement between the parties, and between the arbitral tribunal and the parties
7. How to send communications between parties and the arbitral tribunal
8. The means for sending documents
9. Exchange of written submissions
10. Procedural aspects on how to provide with written submissions and evidence
11. Defining the points at issue, what needs to be settled first and then second, etc. Possible bifurcation of the proceedings
12. If there are possible settlement negotiations and the effect on the schedule of the proceedings
13. Documentary evidence
14. Other evidence
15. Witnesses
16. Expert witness
17. Hearings
18. Multi-party arbitration
19. Requirements on filing or delivering the award
20. Schedule of the arbitration

After reviewing all the matters with your co-arbitrators and the parties to the dispute, being agreed and signed by all the parties involved. You can conclude that such “PO1” is the blueprint for your arbitration.

After the agreed terms under the PO1, then the race has started, with that if appointed as an arbitrator, your responsibility will be to issue an enforceable award on time, thus, your award writing tasks starts from such a moment.

The Moot season for the Vis family has started.

With that it starts a tradition.

The tradition to read, to print the problem, to highlight, to put ideas into possible drafts, to practice your advocacy skills, to be once and for all the lawyer you want to become.

Indulge yourself into the vis problem, have fun and enjoy!

Let’s say that one day, some client of yours arrives with a possible arbitration claim, you already did your request of arbitration, however, there was the point in time that you have to appoint an arbitrator, and the question that arrives then is, where do I find an arbitrator?

One possibility is that in your city there is an actual law bar or a lawyer’s bar association, request them with a recommendation of a practitioner involved in arbitration, if not, also ask the dean of the faculty of the university or universities in your city, so they can give you a recommendation for a possible arbitrator, the chambers of commerce can give you a hint of possible arbitrators, and of course the institutions for arbitration they will give you proposals for handling your dispute.

 Ok, then you find your possible candidates, or let’s make it more interesting, you were contacted in order to be the arbitrator, exciting news!, but there is one little problem, you don’t have previous experience as an arbitrator in actual real cases, you were only arbitrator in Moot court and tribunals, now this is the real deal.

If you are contacted in order to be appointed as an arbitrator, then there is the issue of whether or not have an interview with the possible “clients”, since what you want to remain is actual neutral and impartial, and not to commit any type of actions that will diminish not only your neutrality nor your impartiality but also the appearance of your neutrality and impartiality.

My suggestion is that you lay down or come up with some rules so you can actually establish proper ways to be contacted and proper ways to have your meeting, some like to be contacted just over the phone, no more than 30 minutes, others just an email will serve and others like to have a face-to-face meeting, as well, go for a no more than 30 minutes long conversation.

What to ask?, will be fairly simple, to know the name of the parties and if they are a holding, then to know the names of the subsidiaries to the holding, the name of the counsel representing the parties on both sides of the table if possible, and finally the rules of arbitration. To know the names of the parties and their counsel will help you in avoiding conflicts of interest, and also to know the arbitral rules will help you in preparing yourself to the rules agreed by the parties.

What to discuss?, in this case there are couple of things to discuss, one is your previous experience on arbitrations, either as an arbitrator or co-arbitrator, as well as your experience on the relevant knowledge of the substantive law, if you already know the parties, you need to know if it is an international sales problem or a joint venture problem in a certain industry like pharmaceutical, construction, automotive, etc. Also, you can discuss your time availability for the arbitration at hand.

What you should avoid discussing? Avoid getting into the details of the case, that is, if it is a sales contract, avoid actually reviewing the sales contract between the parties, or getting into details on how the actual dispute took place. Just, don’t do it, this is because the possible counsel or the parties will have an impression that you are their arbitrator and can go with you directly any time they want in order to discuss more things once you become “their” arbitrator.

After the appointment as an arbitrator and the constitution of the arbitral tribunal, you should avoid above all the so called inter-partes communications, whenever they could happen, include the arbitral tribunal and the other parties in the mix.

As you discovered with the answer and the request for arbitration, there will be the need for you to appoint an arbitrator, if it is a sole arbitrator you will need to agree with your counter party on this issue, and if you don’t agree, then it will be up to the judge by the request of one of the parties under an ad hoc arbitration, and if it is institutional arbitration this will be a task by the arbitral institution.

However, if it is a three member panel, then you are free to appoint your arbitrator, with this, you will need to make a conscious choice, you will perform what is called in the industry as a beauty contest, meaning that you will have interviews with possible arbitrators in order to be appointed to the dispute at hand.

But, what to expect and what to look for?

First, for my point of view make sure that your arbitrator actually speaks the language of the arbitration, as well as the possible second language of the contracts and documentation created, since it is of crucial importance that your arbitrator and the arbitral tribunal as a whole understands you.

Second, availability of time, and I cannot stress this enough, have an arbitrator that actually will devote her time to your dispute, that she will do her outmost diligent use of time in order to understand the dispute as well as to read the case files, you need this, and this is why you are appointing your arbitrator, also, make sure that your arbitrator will agree on exclusive confidentiality and not resort to junior lawyers for the reading the memorials, the evidence and drafting of the orders and the award.

Also, it is relevant that your arbitrator has previous experience in arbitration, whether as an actual arbitrator, secretary to the tribunal, part of the arbitral institutions, or if not, as a lawyer representing clients in arbitrations, with a good knowledge of the subject matter.

My personal ranking of what to look for an arbitrator is first the language, time availability, knowledge of the subject matter, and least, previous experience in arbitrations.

Why I rank in the last part the previous experience as an arbitrator, well, because even if international arbitration may appear as an intricate dispute resolution mechanism, it is a process that reflects what is commonly practice in any judicial arena where two parties have a legal dispute, and if you have a great lawyer with great knowledge of the law, then you are in a good standing on what to expect from your arbitrator.