Transnational Notes

The Center for Transnational Litigation, Arbitration, and Commercial Law is glad to be able to announce that its Director, Professor Franco Ferrari, has just published the Spanish version of the book titled “Recognition and Execution of Foreign Arbitral Awards: A Concise Guide to the New York Convention’s Uniform Regime”, which Professor Ferrari co-authored with Professor Friedrich Rosenfeld, and which Professor Charles T. Kotuby edited. The Spanish version, titled “Reconocimiento y ejecución de laudos arbitrales extranjeros”, was prepared by Professor Juan Ignacio Stampalija, a professor at the Universidad Austral, Buenos Aires.

This edition analyses case law from major arbitration jurisdictions, including, thanks to the contribution of Professor Stampalija, many Latin American ones, to explain the New York Convention’s sphere and scope of application, the duty to recognize and enforce arbitration agreements and arbitral awards as well as its limitations, the grounds for refusal related to jurisdiction, those related to proper notice and the ability to present one’s case, the grounds for refusal related to procedure and those related to the award’s status under the law applicable to it, as well as the grounds for refusal related to public policy, and the procedure and formal requirements for recognition.

This is the second book co-authored by Professor Ferrari in Spanish, the first one being a comparative introduction to international commercial arbitration, which Professor Ferrari co-authored with Professors Friedrich Rosenfeld, John Fellas, and Julio Cesar Rivera (h). titled “Arbitraje Comercial Internacional”.

The Center is glad to announce that it will host, together with SciencesPo Law School, an in-person conference to take place on April 24, 2024, at NYU School of Law titled “Exceptionalism in International Commercial Arbitration”. This conference is the second conference co-hosted by the Center and SciencesPo Law School on the topic of exceptionalism, the first one having been held in Paris, at SciencesPo Law School, in November 2023.

The aim of the conference is to highlight by means of a comparative exercise that there are very many differences among the various international commercial arbitration regimes, despite claims of convergence. The speakers will identify features of various arbitration regimes, which are peculiar to those arbitration regimes. In doing so, they will address, inter alia, the arbitrability of claims, arbitration clauses in adhesion contracts, the competence-competence principle, the constitutional review of arbitral awards, deference to decisions upholding an award, the duty of disclosure, the extension of arbitration agreements to non-signatories, resort to the forum non conveniens doctrine at the enforcement stage, and pre-arbitration requirements.

The speakers will be Rafael Alves, Jessica Beess und Chrostin, Caroline Kleiner, Pedro J. Martinez-Fraga, Francesca Ragno, Julio Rivera Jr., Friedrich Rosenfeld, Daniel Schimmel, Linda Silberman, and Juan Ignacio Stampalija. Professor Franco Ferrari, the convener of the conference, will act as moderator. For more information, including on how to register, please click here.

On April 23, 2024, the Center will host Judge Fabienne Schaller, who will give a lecture titled “The Evolution of French Arbitration Law: Teaching From Recent Case Law”. Judge Schaller will focus on decisions rendered in 2022 and 2023 by the International Commercial Chamber of the Paris Court of Appeal (ICCP-CA) of which Judge Schaller is the President. Specifically, she will address the decisions that have either developed or changed the French arbitration regime.

As for Judge Fabienne Schaller, she is a President in the International Commercial Chamber of the Paris Court of Appeal (ICCP-CA). Before taking up this position, she served as an Appeal Judge in the Commercial Division of the Paris Court of Appeal (2016-2018), specializing in transport law, unfair competition, agency, and wrongful termination of contracts. She served as a first instance Judge in the white collar crime division of the High Court of Paris (2014-2016). Between 2008 and 2014, she worked at the Ministry of Justice participating in negotiations for EU directives on procedural safeguards in criminal proceedings and several international conventions within the Counsel of Europe in Strasbourg. Fabienne holds a master in law from Paris Nanterre Law School and an LL.M. in trade regulation from NYU School of Law. After practicing as a lawyer in Paris and New York, she joined the Bench in 1997 and was appointed a Judge in the first instance.

For more information, and for how to register, click here.

The Center for Transnational Litigation, Arbitration, and Commercial Law is glad to announce that it is convening, together with Bucerius Law School, McGill University – Faculty of Law, and University of Verona School of Law, an in-person arbitration conference focusing on soft law. The event, titled “Soft Law in Arbitration: Concepts and Examples”, will take place on Friday, March 22nd, 2024, starting at 11.00 am, at the University of Vienna, thanks to the generous invitation by Professor Paul Oberhammer, the Dean of the Law School.

Over the years, many soft law instruments addressing various issues that often come up in arbitration (including evidentiary issues, party representation, conflicts of interest, etc.) have been elaborated with the goals of providing guidance to both parties and arbitral tribunals. Still, the increase of the number of these instruments has raised questions as to the impact of soft law in general, and some of these instruments in particular. The conference will address not only the underlying concept of soft law, but also the consequences of the proliferation of soft law instruments, such as their constraining power and repercussion on the flexibility of arbitral proceedings, their relationship with hard law, the role of soft law in the determination of the applicable law, the relevance of soft law for matters of procedure, the use of soft law in investment arbitration, etc. 

The various topics will be addressed by Professors Marco Torsello, Friedrich Rosenfeld, Pilar Perales Viscasillas, Geneviève Saumier, Caroline Kleiner, Andrea Bjorklund, and Dr. Ajar Rab.

Opening remarks will be given by Professors Paul Oberhammer and Stefan Kröll. Professor Franco Ferrari, the Center’s Director, will act as moderator.

For the full program, see here.

The Center is glad to announce that it will host, together with SciencesPo Law School, the 4^th edition of the Intergenerational Arbitration Symposium (IGAS). The in-person Symposium, which will take place on Tuesday, March 12, 2024, from 9.00 am – 12.30 pm, at SciencesPo Law School, allows young scholars interested in commercial arbitration to present their ideas and have more experienced scholars and practitioners comment on their presentations and the papers on which their presentations are based.

This year’s event will be divided into three parts, focusing on “Arbitration beyond Party Autonomy”, “State Control of Arbitral Awards, and “Arbitration and Climate Change”. The speakers at this year’s edition of the IGAS will be Mesut Akbaba, Gustavo Alfonso Delgado Bravo, Estefania Delgado, Saasha Mapani, Marco Seregni (NYU LL.M. ’23), and Chitransh Vijayergia.

Professor Giuditta Cordero-Moss, Mr José Ricardo Feris, and Mr. Noah Rubins, will act as discussants, and Mr. William Brilliat-Capello, Ms. María De La Colina, and Ms. Magdalena Bulit Goni as moderators.  

The conveners, Professor Franco Ferrari, the Center’s Director, and Professor Diego P. Fernández Arroyo will give opening and closing remarks, respectively.

For the detailed program, click here.

To enroll, follow this link: https://www.sciencespo.fr/ecole-droit/en/events/fourth-intergenerational-arbitration-symposium/

The Center for Transnational Litigation, Arbitration, and Commercial Law is glad to be able to announce that it will host an arbitration seminar together with ADA University School of Law. The event, titled “International Arbitration in a Globalized World: Challenges to Fundamental Concepts and Perspectives,” will take place in Baku, Azerbaijan, on February 15^th, 2024.

The event is part of a series of seminars hosted by the Center for Transnational Litigation, Arbitration, and Commercial Law in different countries together with institutions operating in those countries. The events are intended to bring together academics, practitioners, and arbitrators to examine certain fundamental features of international arbitration to determine whether the role attributed to them corresponds to reality and is justified from a theoretical perspective, and, to the extent that this is not the case, how they should be reconsidered, taking into account modern arbitration practice and the expectations of various stakeholders, such as the parties, the arbitrators, the public at large, and the arbitral institutions.

Opening remarks will be given by Dr. Fariz Ismailzade (Vice Rector, ADA University), Dr. Rashad Ibadov (Founding Dean, ADA University School of Law) and Hon Kamala Abiyeva (Chair of the Commercial Chamber of the Supreme Court of the Republic of Azerbaijan), and Prof. Franco Ferrari, the Center’s Director.

The event will feature Prof. Franco Ferrari, Toghrul Guluzade (Adjunct Lecturer, ADA University, Member of London Court of International Arbitration (LCIA), Head of Legal Department “Azerbaijan Industrial Corporation” OJSC), Prof. Kamalia Mehtiyeva (Université Paris-Est Créteil, President of Azerbaijan Arbitration Association), and Domenico Di Pietro (Independent Arbitrator) as speakers and commentators.

Shirin Gurdova, Dr. Aygun Mammadzada, Shahlar Mammadov, and Kamil Valiyev will act as discussants.

For more info, please click here.

Join us for a seminar co-hosted by NYU School of Law’s Center for Transnational Litigation, Arbitration, and Commercial Law, the University of Oslo’s Centre for Commercial Law, and convened by Professor Giuditta Cordero-Moss.

The in-person event, titled “Drafting Contracts and International Arbitration,” will take place on February 8th, 2024, at NYU.

The event will take the form of a panel discussion among current and former transactional lawyers involved in drafting, negotiating, and deciding on international commercial contracts. The purpose of the discussion is to address contract clauses the construction of which has proven to raise issues, clauses that the drafts intended to be interpreted literally but may be read differently by arbitrators, etc. The panelists will discuss, among others things, the circumstances under which these clauses are drafted and the expectations of the drafters when they insert them into the contract.

The event is part of a series of workshops organized around the world, including in Oslo, Rome, Paris, London, Sao Paolo, and Singapore. It is part of an empirical research project, which analyzes whether international contracts are construed uniformly in arbitration, or whether legal traditions play a role despite the framework being an international one.

The starting point of the research is the realization that lawyers spend considerable resources to draft contract terms that reflect the interests of the businesses they represent. But, in case of dispute, will arbitrators give effect to the contract terms as drafted? Apparently not, and certainly not always, according to a pilot study carried out by Professors Giuditta Cordero-Moss (University of Oslo), Diego P. Fernandez Arroyo (SciencesPo), Cristiano Zanetti (Universidade de Sao Paolo), Gary Bell (NUS), and the Center’s Director, Professor Franco Ferrari. 

The pilot study can be found on the Kluwer Arbitration Blog under the title “Pilot Empirical Contracts in Project on Construction International Arbitration.”

The panelists are Gregory Classon, Myrna Barakat Friedman, Richard Gray, Mark Kantor, and Lisa D. Love. The event will be moderated by Prof. Giuditta Cordero-Moss; Professor Ferrari will give the closing remarks. For more info (including the exact time and venue, on how to register, etc.), please see the conference flyer.

The Center is glad to be able to announce that it will host a seminar together with the Singapore International Arbitration Centre and Maxwell Chambers. The in-person seminar, titled “Challenging Fundamental Notions of International Arbitration”, to take place on January 25th, 2024, from 2.00 pm – 6.00 pm SGT, at Maxwell Chambers, will examine certain fundamental features of international arbitration to determine whether the role attributed to them corresponds to reality and is justified from a theoretical perspective; and, to the extent that this is not the case, how they should be reconsidered, taking into account modern arbitration practice and the expectations of various stakeholders, such as the parties, the arbitrators, the public at large, and the arbitral institutions.

Opening addresses will be given by Daryl Chew (Chairman of Maxwell Chambers, Partner at Three Crowns LLP, Singapore), Kevin Nash (Registrar, SIAC), and Professor Franco Ferrari, the Center’s Executive Director.

As per the attached program, Professor Ferrari will then give a lecture on “Party Autonomy”, arguing that there are limits to what is considered the most important element and characteristic of arbitration. Timothy Cooke (Partner at Reed Smith LLP, Singapore) and Rebecca James (Partner at Linklaters, Singapore) will act as discussants.

The second lecture, focusing on “Cost and Time Efficiency of International Commercial Arbitration”, will be given by Kevin Nash; Professor Darius Chan (Singapore Management University; Fountain Court Chambers; Director, Breakpoint LLC) and Xuanzhong Wang (Deputy Counsel, SIAC) will comment.

The last lecture, entitled “The New York Convention’s Uniform Regime”, will be delivered by Domenico Di Pietro (Di Pietro Arbitration); Matthew Secomb (Partner at White & Case LLP, Singapore) and Jae Hee Suh (Partner at Allen & Overy, Singapore), will act as discussants. For more information, see the flyer here.

The Center for Transnational Litigation, Arbitration, and Commercial Law is glad to announce that it will host, together with the School of Law of the Pontificia Universidad Católica de Chile and SciencesPo Law School, an arbitration conference focusing on current issues and future challenges. The event, to take place on the campus of the Pontificia Universidad Católica de Chile in Santiago on Nov. 16^th and 17^th, 2023, will be divided in various parts, focusing on transparency in international arbitration, the importance of case management conferences in complex arbitrations, the scope of arbitrability, economic hardship in international arbitration, the law applicable to the merits and the impact of non-State rules, the New York Convention’s interpretation, the clean hands doctrine, ESG principles in arbitration, and the State as claimant in international arbitration, respectively.

On the occasion of the conference, Professor Franco Ferrari, the Center’s Director, will give one of 35 talks to be given over the course of the two-day conference. Specifically, Professor Ferrari’s talk will address “Transnationalism and Its Impact on the Law Applicable to the Merits”. Professor Friedrich Rosenfeld, Global Adjunct Professor at NYU Paris, will speak on “The New York Convention as an Instrument of Uniform Law”.

For the full program, please click here.

On 9 and 10 November 2023, the Center for Transnational Litigation, Arbitration, and Commercial Law will host, together with Columbia Law School and the Arbitration Channel,  the 2^nd conference on “Arbitration in 2 Worlds” focusing on peculiarities of the Brazilian and the US arbitration regimes. On this occasion, the Center’s Director, Professor Franco Ferrari, will give the closing address titled “Limits to Party Autonomy in International Commercial Arbitration”, based on a recent publication co-authored by Professor Ferrari with Professor Friedrich Rosenfeld (published in the Cambridge Compendium of International Commercial and Investment Arbitration (2023), a three volume publication co-edited by Professor Ferrari).

For the full program of the two-day event, please click here.

The Center is glad to announce that, together with SciencesPo Law School, Queen Mary University of London, and National University of Singapore Law, it will host once again the Cross-Examination Moot. The Cross-Examination Moot, which won the Award for the Best Development in Arbitration in 2022, is a competition for university teams with an exclusive focus on cross-examination techniques in international arbitration. Students will attend various rounds of hearings during which they will cross-examine each other’s witnesses and experts (https://www.crossmoot.com/). This year’s edition, to take place from November 4^th – 8^th, 2023, in Paris, will be held on the premises of SciencesPo Law School.

For more information regarding the schedule and venue of the Cross-Examination Moot, please click here.

The Center will also host a conference titled “Exceptionalism in International Arbitration”. The event, co-hosted by SciencesPo Law School and the Arbitration Academy and to be held on Wednesday, November 8^th, 2023, also at SciencesPo Law School, is divided into two parts, addressing exceptionalism in the pre-award and post-award stages, respectively.

The first part will be moderated by Carine Dupeyron, while the speakers will be Carole Malinvaud, Professor Francesca Ragno, Professors Loukas Mistelis, and Rafael Alves.

The speakers tackling exceptionalism in the post-award stage will be Professors Caroline Kleiner, Friedrich Rosenfeld, Juan Ignacio Stampalija, and Mariana França Gouveia. This panel will be moderated by Fabienne Schaller.

Professor Franco Ferrari, the Center’s Director, will give the introductory remarks, while Professor Diego P. Fernández Arroyo will give the closing remarks.

For more information, please click here.

Professors Franco Ferrari, the Center’s Director, Friedrich Rosenfeld (Global Adjunct Professor of Law at NYU Paris and Partner at Hanefeld, Paris/Hamburg), and Caroline Kleiner (Professor of Law at Universite’ Paris Cite’) have just published the book titled Arbitrage Commercial International. Une approche comparative. The book, which is based on the English version authored by Professors Ferrari and Rosenfeld, with Professor John Fellas (Adjunct Professor at NYU School of Law) acting as Consultant Editor, has benefitted greatly from Professor Kleiner’s knowledge of French arbitration law and how it differs from the arbitration law of other jurisdictions. Like the original English version, the French version is divided into 12 chapters, namely Introduction to International Commercial Arbitration, the Recognition of Arbitration Agreements and Relevant Exceptions, the Principle of Competence, Initiation of Arbitral Proceedings and Constitution of the Arbitral Tribunal, Procedure, Evidence, Complex Arbitrations Involving Multiple Tiers, Contracts and Parties, the Award, the Set-Aside of Awards, the New York Convention: Introduction, Scope of Application, Formal Requirements and Procedure, the New York Convention: the Duty to Recognize and Enforce Arbitral Awards, and the Relevance of the Post-Award Phase in the Pre-Award Phase.

The Preface was penned by Hon. Fabienne Schaller, President of the International Commercial Chamber of the Paris Court of Appeal.

The Center is glad to be able to announce that on Monday, October 2^nd, 2023, it will host a conference titled “The Impact of Sanctions, Selected Issues” in collaboration with the Law Department of Bergamo University.

The event, which will be moderated by Professors Maria Caterina Baruffi, a professor at Bergamo University, and Ruggiero Cafari Panico from the University of Milan, will be opened by Professor Caroline Kleiner, a professor at the University Paris Descartes, who will give the keynote address entitled “Deference in international arbitration and economic sanctions”. The other speakers include Professor Marco Torsello, a professor at Verona University and Global Professor at NYU’s Paris site, Dr. Jacques Moscianese, an Expert Associé at the ESSEC Business School Paris, and a future scholar-in-residence at the Center, as well as Dr. Fabrizio di Benedetto. Professor Franco Ferrari, the Center’s Director, will give the closing remarks.

For more information, please click here.

Professor Franco Ferrari, the Center’s Director, has just published a paper titled “International Commercial Arbitration is also National” in a multi-language volume edited by Gilberto Giusti, Eliana Baraldi, Eduardo Vieira de Almeida, and Gustavo Favero Vaughn, and coordinated by Paula Akemi Taba Vaz, titled “Arbitragem e Poder Judiciário.”

The 65 papers contained in the volume, which cover all aspects of the arbitration process, are divided into various chapters, addressing the duty to disclose, confidentiality, conflicts of jurisdictions, extension of the arbitration agreement to non-signatories, the principle of iura novit curia and its impact on arbitration, the role of judicial precedents, interim measures, judicial cooperation, the role of estoppel, guerilla tactics, the post-award phase, enforcement of awards, constitutional control over arbitration, arbitration and corporate law, consumer law and arbitration, tax law issues, competition law issues, bankruptcy and arbitration, legal fees in arbitration, etc.

In regard to the paper by Professor Ferrari, it shows that the seat of arbitration is important at all stages of an arbitration’s life-span. At the pre-award stage, the seat triggers the application of the arbitration regime in many States in which the arbitration regime is based on the territorial approach. The seat also determines where the arbitral award “was made”, which is essential for the post-award stage (both for set-aside and recognition and enforcement proceedings). From this it follows that, in international arbitration, choosing the seat is of paramount importance. Foregoing the choice of the seat means giving up an arbitration planning tool, for which there is no appropriate remedy. In effect, where the seat constitutes the connecting factor making applicable a given arbitration regime, as it does under most arbitration regimes, it does so irrespective of the parties’ choice, that is, irrespective of who ultimately will identify the seat. The parties’ failure to choose a seat directly will render applicable the default rules for identifying the seat, thus leaving one of the most pivotal decisions to a third-party, however this third-party will be identified.

On the occasion of the 2021 Brazilian Arbitration Day at NYU, to take place on Aug. 31, 2021, from 9.00-noon, Professor Franco Ferrari will give the keynote speech entitled “The impact of anti-Covid measures on substantive law solutions”. The event, once again co-hosted by CAM-CCBC (Centro de Arbitragem e Mediação) and NYU’s Brazilian Legal Society, will be opened by Ms. Eleonora Coelho, President of CAM-CCBC, and will also feature Marcelo Ferro, Christian Leathley, Erika Levin, Pedro J. Martinez-Fraga, Rose Rameau, Guilherme Recena Costa, Frederico Singarajah, and Gretta Walters. Luíza Kömel, Deputy Secretary General of CAM-CCBC, and Rekha Rangachari, Executive Director of the New York International Arbitration Center, will act as moderators for the sessions on “Persuasion: Strategies for effective oral advocacy skills from the Counsel’s and the Tribunal’s perspectives” and “Arbitration War Stories: what the books don’t teach you”, respectively.

Registration is required.

On June 7, 2021, from 9.30 to 10.45 am NY time, the Center will host, together with the Milan Chamber of Arbitration, a webinar focusing on the study entitled “Responsible private funding of litigation” authored by Jérôme Saulnier with Ivona Koronthalyova and Klaus Müller, European Added Value Unit, Directorate-General for European Parliamentary Research Services (EPRS), and the research paper annexed to it entitled “State of play of the EU private litigation funding landscape and the current EU rules applicable to private litigation funding”, co-written by Professors Cristina Poncibò and Elena D’Alessandro, University of Turin, Law Department, with cooperation, inter alia, by Dr. Niccolò Landi. While the study aims at determining whether and why the European Union should act in the field of private litigation funding, the research paper’s goal is to give a comprehensive overview of private litigation funding (or third-party litigation funding – TPLF) in the European Union, by describing the main players on the European TPLF market (i.e. funders, claimants and lawyers) and analyzing the EU legal framework.

The event will also compare the key findings of the study and research paper, to be identified by Professor Cristina Poncibò and Dr. Niccolò Landi and Professor Marco Torsello, with private litigation funding in the commercial arbitration context, a topic to be addressed by Dr. Domenico Di Pietro.

Professor Franco Ferrari will moderate the event.

For more information, including how to register, see the flyer.

Professor Franco Ferrari, the Center’s Director, will give a talk in the context of the Coimbra International Arbitration Meeting to take place online from 8 to 10 October 2020. The talk entitled “How International Should International Arbitration Be?” is scheduled to take place on the second day of the three-day event, which will also include a workshop on “New Paradigm in International Arbitration in Times of Covid: Wishful Thinking, Necessity or Mere Survival?”, a round table on “Arbitration During the Pandemic: Solutions, Issues and Balance”, as well as sessions on “Innovation and Alternative Dispute Resolution”, “Arbitration and Industry – From Gogreen to Digital Transformation”, and “Hot Topics”.

Coimbra International Arbitration Meeting (JPEG: 51 KB)

Xin MA

The Supreme People’s Court of the People’s Republic of China (SPC) and the government of Hong Kong Special Administration Region (HKSAR) signedthe Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administration Region (hereinafter Arrangement) on April 2, 2019. This Arrangement came into force on October 1, 2019 both in Mainland China and in the HKSAR. The SPC promulgated it in the form of Judicial Interpretation,[1] according it national mandatory force.[2] This Arrangement for the first time allows the People’s court to order interim measures in aid of commercial arbitral proceedings[3] outside Mainland China,[4] though limited to those seated in Hong Kong.

Up to now, the SPC and the HKSAR have already signed six arrangements[5] in relation to mutual judicial assistance in civil and commercial matters. In addition to this Arrangement, the SPC intends to strengthen Hong Kong as a unique seat for Sino-related alternative dispute resolution in the Asia-Pacific area. This short article tries to clarify several implications of this Arrangement for foreign parties, in the context of negotiating and drafting arbitration clauses with a Sino party, and in the context of seeking court-ordered interim measures in a People’s court against a Sino party.

What Interim Measures Can Be Ordered by A People’s Court?

While the HKSAR is a common law jurisdiction and has adopted the Model Law, Mainland China is a civil law jurisdiction and its arbitration law does not resemble the Model Law. Thus, “Interim Measure” as defined in the Model Law, does not exactly correspond to its Mainland China counterpart.

Article 1 of this Arrangement defines Interim Measure in Mainland China as “property preservation, evidence preservation, and conduct preservation.”[6] If because of one party’s conduct, or for other reasons, enforcing an arbitral award becomes difficult, or any other damage may be caused to the applicant, the applicant may apply for the preservation of that party’s property, or for an order compelling that party to perform certain conduct or abstain from certain conduct.[7] If there is a likelihood that evidence may be destroyed, or lost, or difficult to obtain later, the applicant may apply for the preservation of evidence.[8] Parties can apply for such interim measures before or after the relevant arbitral institution or permanent office has accepted the arbitration case.[9] However, applications before the start of the arbitral proceedings face stricter judicial review in regard to the urgency of the circumstances.[10]

Ad hoc vs. Institutional Arbitration & Which Arbitral Institution to Choose?

Two issues should be considered when negotiating an arbitration clause in light of this Arrangement. First, Mainland China has not yet allowed ad hoc arbitration in its own jurisdiction.[11] Its attitude towards ad hoc arbitration is also reflected in this Arrangement: only institutional arbitral proceedings seated in Hong Kong are qualified to seek court-ordered interim measures in a People’s court. Though the award of ad hoc arbitration seated in Hong Kong could be enforced by a People’s court,[12] if a foreign party intends to fully benefit from Hong Kong’s preferential arrangements with Mainland China, institutional arbitration in Hong Kong would be a more valuable choice than ad hoc arbitration.

Shanghai Marine Court granted the first application pursuant to this Arrangement on October 8, 2019 for a settlement agreement enforcement arbitration submitted to HKIAC.[13] Notice, however, that the parties initially conducted an ad hoc arbitration to solve the original contract dispute and reached that settlement agreement agreeing upon HKIAC arbitration thereof. If such an institutional arbitration clause had not been negotiated and included in that settlement agreement, this application could not have been granted.  

Second, the choice of arbitration institution should be deliberately considered because not all of the institutional arbitration seated in Hong Kong is entitled to such court-ordered interim measure aid. The arbitral institutions or permanent offices which administer “arbitral proceeding in Hong Kong” for the purpose of this Arrangement have to satisfy certain requirements,[14] then apply to the HKSAR government and obtain mutual confirmation from both the SPC and the HKSAR government to be qualified.[15] The first confirmed arbitral institutions have been promulgated[16] and other arbitral institutions can be confirmed upon application in the future. Of those first six arbitral institutions or permanent offices, CIETAC Hong Kong office and SCIAC (Hong Kong) are permanent offices of arbitral institutions which are organized and registered in Mainland China. They excel in Chinese arbitration practice. Compared to ICC Asia Office and HKIAC, however, they may be less attractive because they are from the same jurisdiction as Sino parties. 

Practical Concerns When Seeking Interim Measures in A People’s Court

Some specific and practical concerns should also be addressed when seeking interim measures in a People’s court. Procedural as they may be, they can affect the success of the application. The first concern is to decide to which court to apply. The applicant may apply to the Intermediate People’s Court of the place of residence of the party against whom the application is made, or to the Intermediate People’s Court of the place where the property or evidence is situated.[17] However, this Arrangement requires that the People’s court which accepts the interim measure application be the same as the one to accept the enforcement application.[18] This requirement comes out of consideration for judicial efficiency; the ultimate purpose of interim measures is to guarantee the enforcement of the arbitral award.[19] Thus, there may be a trade-off between one court that is more advantageous for ordering interim measures and another that is more convenient for enforcing the arbitral award. Considering the urgency required for the interim measure, it might be practical to apply to the court where the interim measure can be directly implemented, since it has no need to ask for further assistance from another court, which may prolong the implementation process.      

The second concern is with regard to the notarization and authentication requirement. A foreign applicant’s documents of identity, as part of the materials for the interim measure application,[20] must be notarized and authenticated before their submission. The People’s Court bears a fairly rigid judicial attitude towards evidence formed outside Mainland China, requesting that all such evidence, including documents of identity, be notarized and authenticated.[21] Note that although notarization and authentication are a matter of formality, failing to complete those steps in a timely manner would jeopardize an application.

Another concern is with regard to security provision. The People’s courts may at their discretion require the foreign applicant to provide security for ordering property preservation or conduct preservation. Further, if such application is made before the relevant institution or permanent office has accepted the arbitration case, security must be provided.[22] Though there are legitimate policy justifications for requiring security provision, and Sino applicants face the same requirement,[23] it may in reality constitute an obstacle to the application’s success. Once required by the People’s court, failure to provide security may lead to the refusal to grant an interim measure.[24] Nevertheless, the foreign applicant may own no property in Mainland China, or the value of such property located in Mainland China may be not sufficient to satisfy the security requirement. Thus, a practical solution may be to ask a local or national guarantee company to provide security at some consideration; however, to do so entails hasty and expeditious negotiations at costs. It still remains to be seen how the People’s courts will exercise their discretion pursuant to this Agreement in regard to security provision. However, it is wiser for foreign applicants to prepare themselves in advance for such a security provision request.

On the other hand, certain conveniences related to the “pass-on” requirement in light of this Arrangement are noteworthy. Article 3 paragraph 2 of this Arrangement requires interim measure application materials produced by the applicant to be passed on to the relevant arbitral institution or permanent office, together with a pass-on letter addressed by such relevant arbitral institution or permanent office to the People’s court.[25] However, in practice, the SPC allows applicants submitting the interim measure application materials with the pass-on letter to proceed directly to the relevant People’s court, considering that the rigidity of the pass-on requirement may, given the urgency of the circumstances, jeopardize the application since Hong Kong is located outside Mainland China.[26] In the first application under this Arrangement, this is how HKIAC and the applicant proceeded.[27]

Conclusion

In light of this Arrangement, institutional arbitration is recommended. Parties should deliberately consider the suitable arbitration institution during arbitration clause negotiation, and choose the suitable court among the competent People’s courts for granting an interim measure. Besides other procedural concerns this article has mentioned, an applicant should prepare well in advance for how to satisfy the possible security provision requirement to ensure a successful application. Nevertheless, this Arrangement’s importancefor Sino-related arbitration “cannot be overstated”,[28] as Sarah Grimmer, Secretary-General of HKIAC has commented. Hong Kong will surely become a more attractive arbitration seat henceforth. 

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[1] Judicial Interpretation〔2019〕No.14

[2] As the highest court in the People’s Republic of China, the SPC also functions as a de-facto rule-making power holder. Its judicial interpretation has played an important role directing judicial practice in Mainland China. Regarding the legal status, functions and limits of the SPC’s Judicial Interpretation, please see Li Wei, Judicial Interpretation in China, 5 Willamette J. Int’l L. & Dis. Res. 87 (1997).

[3] Investment arbitrations between a state party and a private party are not covered by this Arrangement.

[4] Please see Part One of《<最高人民法院关于内地与香港特别行政区法院就仲裁程序相互协助保全的安排>的理解与适用》(The Interpretation and Application of the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administration Region), (Sep. 26, 2019),

http://rmfyb.chinacourt.org/paper/html/2019-09/26/content_160433.htm?div=-1.

[5] The Arrangement on Mutual Entrustment in Service of Judicial Documents in Civil and Commercial Matters 1998; the Arrangement Concerning Mutual Enforcement of Arbitral Awards 1999; the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters Pursuant to Choice of Court Agreements between Parties Concerned 2006; the Arrangement on Mutual Taking of Evidence in Civil and Commercial Matters 2016; the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters (signed in January 2019, but has not come into force yet. The Choice of Court Arrangement will be superseded upon its commencement). Another arrangement is the Reciprocal Recognition and Enforcement of Civil Judgments in Matrimonial and Family Cases 2017.

[6] See Interim Measure Arrangement, Article 1, “Interim measure” referred to in this Arrangement includes, in the case of the Mainland, property preservation, evidence preservation and conduct preservation.

[7] See Article 100 of the Civil Procedure Law of PRC.

[8] See Article 81 ofthe Civil Procedure Law of PRC.

[9] See Id. Article 81, Article 100.

[10] See Wang, Shizhou, Civil Procedure in China 159 (2014).

[11] Article 16 of the Arbitration Law of PRC requires that an arbitration agreement must contain a designated arbitration commission; otherwise the agreement will be invalid. Regarding the consensus that ad hoc arbitration is not admitted in Mainland China, please see Shahla F. Ali & Tom Ginsburg, International Commercial Arbitration in Aisa 88-90 (2013).

[12]《最高人民法院关于香港仲裁裁决在内地执行的有关问题的通知》法［2009］415号 (Notice of the Supreme People’s Court on Issues concerning the Execution of Hong Kong Arbitral Awards in the MainlandNo. 415 [2009]).

[13] See “全国首例！上海海事法院裁定准许香港仲裁程序中的保全申请”, (the First Instance! Shanghai Marine Court Granted an Interim Measure Application in Aid of A Hong Kong Arbitral Proceeding), (Oct. 9, 2019),

https://shhsfy.gov.cn/hsfyytwx/hsfyytwx/spgk1356/spdt1420/2019/10/09/09b080ba6dac0657016dae2f47970000.html?tm=1574068535096.

[14] See Interim Measure Arrangement, Article 2 paragraph 1.

[15] See Interim Measure Arrangement, Article 2 paragraph 2.

[16] These arbitral institutions are: Hong Kong International Arbitration Centre, China International Economic and Trade Arbitration Commission Hong Kong Arbitration Center, The Asia Office (Hong Kong) of the International Chamber of Commerce (ICC) International Court of Arbitration, Hong Kong Maritime Arbitration Group, South China International Arbitration Center (Hong Kong) and eBRAM International Online Dispute Resolution Centre.

[17] See Interim Measure Arrangement, Article 3 paragraph 1.

[18] See Supra note 4, (4) of Part Two.

[19] Id.

[20] See Interim Measure Arrangement, Article 4 paragraph 1, paragraph2.

[21] Wang, Shizhou, Supra note 10, at 23-24.

[22] Id. at 159-160.

[23] Id. at 160.

[24] Id.

[25] See Article 272 of the Civil Procedure Law of PRC.

[26] See Supra note 4, (2) of Part Five.

[27] “HKIAC Receives Five Applications under Hong Kong-Mainland Arrangement on Interim Measures”, (Oct.11, 2019), https://www.hkiac.org/news/five-interim-relief-applications-under-new-arrangement.

[28] Id.

— Jack Davies

Section 68 of the Arbitration Act (UK) enables parties to challenge an arbitral award on the basis of a “serious irregularity affecting the tribunal, the proceedings or the award”.[1]  The section sets out an exhaustive list of irregularities on which an award may be challenged, including s 68(2)(d) — “failure by the tribunal to deal with all the issues that were put to it” — and s 68(2)(h) — “failure to comply with the requirements as to the form of the award”.[2]  In holding that “inadequate” or “insufficient” reasons cannot found a legitimate challenge under either s 68(2)(d) or s 68(2)(h), the English High Court’s decision in Islamic Republic of Pakistan v Broadsheet LLC has helpfully clarified the scope of those subsections.[3]  In short, the Court has taken a narrow, arbitration‑friendly approach to s 68, one which aligns with the purposes of s 68, the objectives of the wider Arbitration Act and international practice.  The Court also denounced prior case law that suggested a wider approach ought to be taken to the interpretation of s 68: this criticism was well warranted, and should lead to clarity in the law. 

Relevant facts

Broadsheet was engaged by Pakistan to trace and locate assets taken from various state-run institutions, and transfer them back to the government.[4]  As compensation, Broadsheet was to receive 20 per cent of the “amount available to be transferred”.  Approximately two years after signing its contract with Broadsheet, Pakistan (via the National Accountability Bureau) gave notice to rescind the contract, alleging that Broadsheet had committed repudiatory breaches of contract.  Broadsheet denied that allegation, and commenced arbitration proceedings against Pakistan.  The tribunal awarded Broadsheet USD 21,589,460 in damages.  Approximately USD 19m of that figure related to Broadsheet’s “loss of a chance” claim in relation to the Sharif family. 

Pakistan then challenged the award in the English High Court under s 68, alleging a serious irregularity that caused it substantial injustice. 

The High Court’s decision

Pakistan’s primary complaint was that the tribunal did not explain, in any material way, the method by which it calculated the value of the Sharif family claim (i.e. the value of the chance that Broadsheet lost to receive payment in respect of recoveries made from Mr Sharif and his family).[5]  Pakistan relied principally on another recent High Court decision, Compton Beauchamp Estates Ltd v Spence, to contend that a failure of reasoning may constitute a valid challenge under s 68(2).[6]

Moulder J did not accept Pakistan’s submissions.  The Judge’s reasoning comprised three primary points.  First, as a matter of statutory interpretation, the Judge said the juxtaposition of ss 57 and 70(4) with s 68 means that “inadequate reasons” cannot found a legitimate challenge against an award under s 68.[7]  Section 57 entitles a party to apply to the tribunal to correct its award, or to issue an additional award.  Section 70(4) allows an English court to require an arbitral tribunal to state the reasons for its award in further detail, if the court considers that the tribunal’s reasons are insufficient, or perhaps “inadequate”, such that the court is unable to properly consider the merits of a challenge to the award under s 68.

Secondly, Moulder J did not accept the reasoning in the Compton decision as representing good law;[8] instead, the Judge preferred the contrary analysis given in Margulead Ltd v Exide Technologies[9]and UMS Holding Ltd v Great Station Properties SA.[10]  Because all relevant prior case law comprised other High Court decisions, the Judge was free to choose between the various analyses under the English system of stare decisis. 

Finally, Moulder J noted that a major purpose of the Arbitration Act was to reduce intervention by the English judiciary in arbitrations and arbitral awards.[11]  She considered that to allow challenges premised on “inadequate reasons” would be to expand unduly the scope of the High Court’s supervisory function in light of the Arbitration Act’s principles and objectives.[12] 

Analysis and appraisal of the decision

Moulder J’s decision should be applauded.  The Judge’s reasoning reflects an informed and pragmatic     approach to a section that, if interpreted erroneously, might have serious consequences for the future of arbitration in England.

First, the Judge’s statutory-interpretation point is correct.  If the UK Parliament had intended an inadequacy of reasons to be able to found a challenge under s 68, and such a challenge might lead to the award being set aside with the result that the parties have to “start from scratch”, then why would it provide the tribunal with the ability to give further reasons either on application of a party (s 57) or direction of the High Court (s 70(4))?  From reading the judgment, it appears, crucially, that Pakistan was never able to answer that question.  Inadequacy of reasons is not listed as one of the nine enumerated grounds in s 68(2).    The specificity of those available grounds means it is clear that the UK Parliament gave them substantial thought.  A traditional canon of English statutory interpretation is expressio unius est exclusio alterius.[13]  Where a statutory proposition might have covered many factors but only mentions some, unless those mentioned are listed merely by way of example, the rest are taken to be excluded from the proposition.[14]  Although not discussed by Moulder J, that canon applies with full force to s 68(2) and reinforces her reasoning.

Secondly, the Judge was correct to reject the analysis of Morgan J in Compton.  In that case, Morgan J stressed the importance of reasons in an arbitral award: “an arbitrator should explain why he has decided the essential issues in the way in which he has”.[15]  He reasoned, therefore, that “[a]n award which did not contain such reasoning would not comply with [the duty of an arbitrator to give reasons under s 52(4)][16] and that would give rise to an irregularity within s 68(2) of the 1996 Act”.[17]  No judge, in any of the relevant cases, has argued that an arbitral tribunal does not have a duty to give reasons for its award under s 52.  And no judge has doubted the importance of such reasons.  It is only natural and correct that parties are entitled to know the grounds upon which the tribunal has come to its conclusions, unless they waive that right.[18]  But that point still does not answer the question that Moulder J asked above: if a deficiency of reasons can be cured by a further award or clarification under either s 57 or s 70(4), then why should an award be liable to be set aside under s 68?  That remains the most crucial point of interpretation when evaluating the correctness of the decision in Islamic Republic.  Setting aside an award is simply too drastic a course of action to have available to litigants, when the relevant deficiencies can be cured with no prejudice to the complaining party.

Lastly, Moulder J’s reliance on the Arbitration Act’s objective of reducing judicial intervention in arbitration deserves both elaboration and applause.  The Judge made that point briefly, and did not cite any of the Act’s legislative history.  However, when that history is examined, it becomes clear that this is perhaps the strongest point in favor of disallowing an inadequacy of reasons to found a valid challenge under s 68.  Aside from the Bill itself, the most important piece of les travaux préparatoires to the Arbitration Act is the Departmental Advisory Committee’s 1996 report on the Arbitration Bill, where all provisions of the Bill were discussed in detail by the drafters, including the clause which was to be enacted as s 68.[19]  The drafters said that s 68 was intended only to be applied “by way of support for the arbitral process, not by way of interference with that process”.[20]  Furthermore, that s 68 was “really designed as a long stop, only available in extreme cases where the tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected”.[21]  In the light of these statements, it is very hard to see how the UK Parliament envisaged judges to be entitled to cast critical eyes over the reasoning in arbitral awards with an eye to invalidating them, particularly when further reasons are able to be requested or mandated under other provisions of the Arbitration Act.  The Act’s legislative history, then, adds further weight to Moulder J’s conclusions. 

An international comparison also highlights the propriety of the decision in Islamic Republic.  In enacting s 68, the UK Parliament deliberately provided for a variety of procedural challenges to awards that are not be able to be made under standard international practice.[22]  For example, under s 68, an award may be challenged on the grounds that the arbitral tribunal failed “to comply with the requirements as to the form of the award”.[23]  In contrast, art 34 of the UNCITRAL Model Law on International Commercial Arbitration contains comparatively few provisions upon which a party may apply to set aside an arbitral award rendered in an international arbitration.[24]  Those provisions parallel art 36 of the Model Law, which sets out the grounds on which a court may refuse to recognize or enforce an arbitral award.  Those grounds, in turn, parallel the grounds listed under art V of the New York Convention.[25]  In short, art V only allows for setting aside on grounds of incapacity, lack of jurisdiction, or major violations of due process.

In contrast, the longer list of procedural irregularities which may found a challenge under s 68 reflects the old English judicial tradition of heightened interference in arbitration.[26]  It must therefore be recognized that, if the approach taken by Morgan J in Compton was to stand — the same approach urged upon Moulder J by Pakistan in Islamic Republic — English judicial supervision of arbitration could substantially increase.  England already allows for heightened scrutiny of awards in contrast to international practice on this point and, should supervision from the bench extend to assessing the “adequacy” or “sufficiency” of a tribunal’s reasoning, parties might seriously think twice before choosing to seat their arbitrations in London.  After all, one of the key selling points of arbitration is a streamlined adjudicatory process.  Even acknowledging that international arbitration is far more complex and time-consuming than it was 50 years ago, it remains that a lack of a right of appeal on the merits can be a drawcard in attracting parties to arbitration.[27]  Allowing parties to challenge the adequacy of a tribunal’s reasons would undermine this.

Key takeaways and conclusions

Moulder J’s decision in Islamic Republic is an excellent one.  She has taken an arbitration-friendly approach to s 68 of the Arbitration Act and has ruled that English judges cannot invalidate an arbitral award for want of reasons on the tribunal’s part.  Instead, they have the power to request additional reasons, or an additional award, from the tribunal to address any perceived deficiencies in this regard.  Parties can have confidence that their arbitral awards will not be scrutinized in painful detail, as judges pore over every aspect of the tribunal’s thinking.  Moulder J’s decision supports the intention of the drafters of the Arbitration Act that s 68 really only function as a “long stop … in extreme cases”. 

The fact remains, however, that Moulder J’s decision is only another High Court judgment to add to the list that was cited to her by the parties in Islamic Republic.  Putting its compelling reasoning to one side, the judgment technically has no more authority than the contrary decision in Compton, given the English tradition of stare decisis.  Furthermore, it has not yet been cited or endorsed by any other cases.  Until appellate guidance is given, or Parliament amends the wording of the Arbitration Act to clarify matters, the issue remains unresolved.  That said, I consider that practically speaking, Moulder J’s analysis is persuasive and future High Court judges are likely to apply it.

Jack Davies is an LL.M. Candidate in the International Business Regulation, Litigation and Arbitration Program at NYU School of Law.  Prior to enrolling at NYU, Jack clerked for the current Chief Justice of New Zealand, Dame Helen Winkelmann, and then practiced commercial litigation in Auckland.

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[1]           Arbitration Act 1996 (UK), s 68(1). 

[2]           For any of the enumerated irregularities to lead to a successful challenge, the irregularity must have caused, or will cause, “substantial injustice” to the applicant: s 68(1).  Note also, in relation to s 68(2)(h), that pursuant to s 52(4) — a section titled “Form of award” — the award must “contain the reasons for the award unless … the parties have agreed to dispense with reasons”. 

[3]           Islamic Republic of Pakistan v Broadsheet LLC [2019] EWHC 1832 (Comm), [2019] WLR(D) 402. 

[4]           A broader summary of the background facts is given at [5]–[11] of the Court’s decision. 

[5]           See at [18(iii)]. 

[6]           Compton Beauchamp Estates Ltd v Spence [2013] EWHC 1101 (Ch). 

[7]           Islamic Republic of Pakistan v Broadsheet LLC, supra n 4, at [42].

[8]           Ibid. 

[9]           Margulead Ltd v Exide Technologies [2004] EWHC 1019 (Comm), [2005] 1 Lloyd’s Rep 324.

[10]          UMS Holding Ltd v Great Station Properties SA [2017] EWHC 2398 (Comm), [2018] Bus LR 650.

[11]          Islamic Republic of Pakistan v Broadsheet LLC, supra n 4, at [42].

[12]          Ibid.

[13]         FAR Bennion Understanding Common Law Legislation: Drafting and Interpretation (OUP, 2001, Oxford) at 88.

[14]          Ibid.

[15]         Compton Beauchamp Estates Ltd v Spence, above n 7, at [51].  Morgan J cited an older decision, Benaim (UK) Ltd v Davies Middleton (2005) 102 Cons LR 1 (QB), where the Court said in reference to s 68 at [95]: “It is strongly arguable that unless a party knows the reasons for an award there is automatically substantial injustice to him”. 

[16]          See footnote 3, supra. 

[17]          Compton Beauchamp Estates Ltd v Spence, above n 7, at [51].

[18]          See Arbitration Act 1996 (UK), s 52(4).

[19]         Departmental Advisory Committee on Arbitration Law “1996 Report on the Arbitration Bill” (1997) 13 Arbitration International 276.  See also Andrew Tweeddale and Keren Tweeddale Arbitration of Commercial Disputes: International and English Law and Practice (OUP, Oxford, 2005) at 765. 

[20]          At [280]. 

[21]          Ibid. 

[22]         Jean-François Poudret and Sébastien Besson Comparative Law of International Arbitration (2nd ed, 2007, Sweet & Maxwell, London) at 721. 

[23]          Section 68(2)(h). 

[24]         United Nations Commission on International Trade Law UNCITRAL Model Law on International Commercial Arbitration (1985, with amendments as adopted in 2006) accessible at: <https://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf>.

[25]         Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) (opened for signature 10 June 1958, entered into force 7 June 1959).   

[26]          Poudret and Besson, supra n 23, at 721. 

[27]         Frank-Bernd Weigand and Antje Baumann “Introduction” in Frank-Bernd Weigand (ed) Practitioner’s Handbook on International Commercial Arbitration (2nd ed, OUP, 2009, Oxford) 1 at 28.

At the end of November 2019, Professor Franco Ferrari, the Center’s Director, was appointed as a member of the Advisory Committee of the Saudi Center for Commercial Arbitration (SCCA). The Advisory Committee is composed of 14 Committee members (residing in 11 different countries with 10 different nationalities), each of whom was selected after a vigorous process of identifying leading international arbitration specialists. The Committee’s main task will be to advise the SCCA on its services and products to secure and promote international best practices and standards. In particular, the Committee will provide guidance on future revisions of the SCCA’s rules and procedures.