May 14, 2020 - On May 13th, the LSTA hosted a webinar, International Arbitration and the Financial Sector, which was presented by Rick Gray of Gray Arbitration LLC, Jeff Zaino and Luis Martinez of the American Arbitration Association (AAA), and Jeff Wurst of Armstrong Teasdale LLP. There are many reasons for including arbitration in international disputes, including a higher receptivity of many international parties, a neutral choice of forum, and flexibility of proceedings. In addition, there is a degree of predictability of arbitration proceedings which allows for a familiar and flexible process established by the parties that obviates the need to resort to national courts and thus avoids “home court” advantages. Other advantages to selecting arbitration include the confidentiality, justice, speed and economy of the proceedings. Further, because parties themselves typically select the arbitrators, they can appoint experienced arbitrators with particular subject-matter expertise to hear their case. There are particular advantages in enforcement: any award granted by the arbitrators may be recognized and enforced in foreign courts pursuant to international treaties, such as the 1958 New York Convention, which has been signed by 163 countries to date.
The International Centre for Dispute Resolution (ICDR), which was created in 1996 after AAA decided to centralise its international caseload and initiatives, focuses on providing international conflict management services for the global business and legal communities. Its rules and procedures are intended to apply to all manner of international commercial disputes. Speed and efficiency are key objectives of arbitration, and the ICDR estimates that it takes approximately 135 days on average to obtain an award from the date detailed submissions are filed. Absent party agreement, the ICDR may appoint the arbitrator(s) for a case using the ICDR list method. Any person nominated to serve as arbitrator is first advised of the identity of the parties and potential witnesses and is asked to conduct a conflicts check; the arbitrator candidate must disclose all potential conflicts and, assuming he/she is not conflicted, sign an oath confirming his/her independence and impartiality. Any circumstances that might give rise to justifiable doubts as to the arbitrator’s independence and impartiality must be disclosed. Once they are appointed, and while the case is being heard, the arbitral tribunal must give each party a fair opportunity to be heard, and may order disclosure of documents. If they order document production, however, they must take into account applicable principles of privilege. Efficiency is a prime objective of arbitration. The ICDR Rules provide that parties must make every effort to avoid unnecessary delay and expense. In addition, an arbitral tribunal may take such additional steps as are necessary to protect the efficiency and integrity of the arbitration. As regards caseload, with the number of international financial services arbitration cases up 9% in 2019, the panelists are expecting this year to be another busy year. The ICDR is expecting an uptick of disputes arising from the current economic stress arising out of the pandemic and likely more defenses will be raised that are based on force majeure, frustration, or impossibility. Of course, with the current lockdown, they noted that there has been a procedural impact, and consequently, there is a movement towards conducting hearings via videoconference. Finally, looking further ahead, they are expecting further cases to arise out of Brexit and the LIBOR transition which is fast approaching. Click here for the replay and slides.