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CENTRE FOR ADVANCED RESEARCH IN DISPUTE SETTLEMENT (CARDS)

‘ARBIT PLENUM’

ARBITRATION WEEKEND 2018

29-30 SEPTEMBER

VENUE: DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY,


VISAKHAPATNAM

DAY 1 – 29 SEPTEMBER 2018 (Saturday)

SESSION I:

Panel Discussion on-

“Third-Party Funding from a Common law, Civil law and Middle Eastern perspective”

Article I: Françoise Lefèvre; Peter Callens; Guillaume Croisant, Legality of third-party


funding mechanisms under Belgian law, Belgian Review of Arbitration (van Hooft and
Tossens (eds), Jan 2017)

This article examines the legality of third-party funding mechanisms under Belgian law. It is
one of the most important of these mechanisms, which are often popular in international and,
in some jurisdictions, national arbitration. The article further identifies the hypotheses where
the legality of those mechanisms will be assessed under Belgian law and their legal nature in
this jurisdiction. After having concluded the third-party funding under Belgian law as a
general rule, the article points out that it should be taken into consideration. Finally, the
article assesses whether the relationship between a third-party funder and a funded party may
amount to an alternative investment fund in the meaning of the AIFM Directive, and stresses
the consequences of such qualification. The purpose of the article is to examine the legality of
the mechanisms for financing arbitral disputes by third parties under Belgian law. It first
recalls the form and origin of these mechanisms that are in full development in international
arbitration and, in some States, national. It then identifies the main hypotheses in which their

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validity is likely to be assessed in the light of Belgian law, and examines the qualification that
they could receive in this legal system. After concluding their legality of principle in Belgian
law, the article analyzes the main legal provisions likely to frame the implementation of these
mechanisms. Finally, it examines the risk that the relationship between the third-party funder
and the funded party could be qualified as a fund.

Article II: Varun Mansinghka, Third- Party Funding in International Commercial


Arbitration and its Impact on Independence of Arbitrators: An Indian Perspective, Asian
International Arbitration Journal (Pryles and Chan (eds); May 2017).

This paper discusses the question of validity of third party funding in leading common law
jurisdictions and compares the same to the position in India. Further, the paper highlights the
need for mandatory disclosure of third-party funding, focussing on funding's potential impact
on independence of arbitrators. Finally, the paper proposes a disclosure model which
preserves independence of arbitrators while safeguarding the interest of all the stakeholders,
including the funders.

SESSION II:

Panel Discussion on:

“Considerations for Choice of Seat and Governing Law in International Arbitration”

Articles I: Gary B. Born, The Law Governing International Arbitration Agreements: An


International Perspective, 26 SAcL 814 (2014)

The choice-of-law rules applied by arbitral tribunals differ in several respects from the
approaches followed by domestic courts. Those differences arise in connection with three
distinct choice-of-law problems: (i) the determination of the law applicable absent a choice of
law by the parties, (ii) the interpretation and supplementation of the law chosen by the
parties, and (iii) the application of mandatory norms. As far as item (i) is concerned,
arbitration-specific choice-of-law rules typically grant arbitrators more freedom than ordinary

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conflict-of-laws norms. In relation to international sale of goods transactions, for example,


Article 4(1)(b) of the Rome I Regulation on the law applicable to contractual obligations
provides for the application of the law of the country where the seller has his habitual
residence (unless the contract is more closely connected with another country), while Article
28(2) of the UNCITRAL Model Law on International Commercial Arbitration allows
arbitrators to determine the applicable law on the basis of the conflict rule of their choosing.
Under the arbitration laws of several countries, arbitrators are even entitled to apply non-
national law such as general principles of law, the UNIDROIT Principles of International
Commercial Contracts, or principles common to the parties’ legal systems. With regard to
item (ii), arbitral tribunals may similarly resort to non-national legal sources when
interpreting, or filling the gaps of, the applicable domestic law. This was expressly
contemplated by the drafters of the aforementioned UNIDROIT Principles according to
whom the Principles “may be used to interpret or supplement domestic law” (see Preamble).
As to item (iii), the conflict rules of codifications such as the Rome I Regulation lay down
specific rules regarding the application of the mandatory norms of both the forum and other
relevant jurisdictions. The former cannot be transposed to international arbitration due to the
absence of a “forum” of international arbitral tribunals. The latter, while not directly
applicable, may be taken into account by arbitral tribunals. However, it is more likely that
arbitral tribunals will view the question of the application of specific mandatory norms from
the angle of possible enforcement problems that may result from the non-application of those
norms.

Articles II: George A. Zaphiriou, Choice of Forum and Choice of Law Clauses in
International Commercial Agreements, 3 Int’l Trade L.J. 311 (1978)

The author has discussed the various issues that arouse while determining the appropriate
forum and applicable law in cases of interstate and transnational disputes. Although the
modern day agreements specifically provide for the choice of forum and choice of law, the
courts can work mechanically accepting the agreement as the grund norm. There are various
trends and practices adopted by various courts in dealing with these issues. The English
courts are considered to be lenient than the American courts in matters of determining

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appropriate forum and governing law. The English courts give greater weight to the forum
and governing law decided by the parties. The English courts would accept for the parties
decided law and forum, even there is no connection between the transaction in dispute and
the governing law agreed. The only case where the parties’ agreement as the forum and
governing law is disregarded by the English courts is when adhering to the agreed law and
forum would cause a breach of a public policy in England. The American courts wouldn’t
accept with the agreed forum and governing law, unless there exists a connection between the
transaction in dispute and the agreed forum & governing law. This requirement of connection
between the transaction and agreed law and thoroughly dealt by the author in this article.

SESSION III:

Panel Discussion on -

“Best Practices in International Arbitration – A Practitioner’s Perspective”

Articles I: Gary B. Born, Disclosure in International Arbitration, International Commercial


Arbitration (Second Edition), Kluwer Law International 2014, pp. 2319-2423

Procedures for the disclosure (or discovery) of evidentiary materials, which facilitate the
arbitrators’ task as fact-finders, can play an essential role in international arbitration. The
parties’ right to obtain disclosure of evidentiary materials from one another is an important
procedural aspect of many international commercial arbitrations. It is sometimes suggested
that disclosure is a modern innovation, which is in tension with at least some aspects of the
arbitral process. That is inaccurate. In reality, the existence of power on the part of the
arbitral tribunal to require the parties to produce documentary or other materials, relevant
and important to resolving the matters in dispute, is a venerable and important aspect of
the arbitral process. There is a long tradition of disclosure in state-to-state arbitrations,
where the authority of arbitral tribunals to compel disclosure from parties was well
recognized by the mid 19th century. The same authority existed, at least in common law
systems, in the 19th and 20th centuries. The authority to require the disclosure of materials
that are important for the resolution of the parties’ dispute is a significant and intrinsic
element of the adjudicative process, which international arbitral tribunals, like other

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adjudicatory bodies, both should and do presumptively possess. It is therefore not


surprising that many contemporary international arbitrations involve a measure of
disclosure. Nonetheless, the existence and scope of disclosure or discovery is often
contested, with differing views of these matters being taken in civil law, common law and
other systems. At the same time, developing international practice and guidelines reflect
an emerging consensus on the general value of disclosure in the arbitral process and on the
appropriate scope and procedures for disclosure. Most disclosure in international
arbitration occurs entirely within the context of the arbitration, under the control of the
arbitral tribunal, and only involving the parties to the arbitration (and not third parties).

Articles II: Dr. Richard H. Kreindler, Best Practices in International Arbitration, Shearman
& Sterling LLP – Frankfurt Conference Paper for Inclusion in ASA Bulletin, ASA Swiss
Arbitration Association Conference, 2006.

The costs of arbitration, including notably the costs of party representation and most
particularly “attorney’s fees,” are qualitatively and quantitatively a significant component in
the overall arbitration dispute. The trend is toward ever more intensive, and thereby ever
higher, costs, especially in large-scale construction and investment disputes. Should the loser
pay all, including attorney’s fees? How should the disposition of the issue be handled: In the
arbitration agreement? In the procedural directions of the tribunal? In the motivation of the
final award on costs? Is a “best practice” on cost allocation, including attorney’s fees,
desirable? Overall, if a general statement had to be made, then it would be that “costs follow
the event” largely prevails in English and Continental European arbitration practice and the
“American Rule” largely prevails in US domestic and much US-seated international
arbitration practice. However, “Loser Pays All” in its pure form -- as opposed to one of the
various above-referenced forms of “costs follow the event” -- cannot necessarily be said to
have general application to most recent arbitration cost awards, particularly in the treaty
based investment arbitration area.

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DAY 2- 30 SEPTEMBER 2018 (Sunday)

SESSION IV:

Panel Discussion on-

“Technology in International Arbitration/ Block Chain and Artificial Intelligence- The


Future of Arbitration”

Article I: Albert Jan van den Berg (ed), Arbitration and New Technologies, International
Arbitration: The coming of a new age? ICCA Congress Series, Volume 17, Kluwer Law
International 2013, pp. 643-651

Technology is perhaps the epitome of a global industry. All sophisticated modern businesses
rely on technology to function. There is a global market for the provision of IT services, and
for the support of systems. Technology companies in turn rely upon international contracts
for supply chain, distribution, installation, support and licensing. Internet is the fastest-
growing medium for conducting business. Ecommerce encompasses the global marketplace.
Technology is likely to continue to evolve with technology being used to make the process of
justice delivery in arbitration easier, cost effective and convenient. When used – and
especially Information Technology can help the parties in international arbitration to save
time and costs and to ensure that the arbitration is managed and conducted efficiently. The
use of IT in the arbitral process is in its infancy, but it is increasingly gathering a strong
momentum. For instance, major arbitral institutions like the International Chamber of
Commerce, the American Arbitration Association, and the World Intellectual Property
Organization Arbitration and Mediation Centre have recently launched projects offering case
management websites, virtual case rooms, extranets, and other IT tools allowing multiparty
communications.

Article II: Can the application of Blockchain Technology broaden the horizons for
arbitration? Kluwer Arbitration Blog,

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URL:(http://arbitrationblog.kluwerarbitration.com/2018/08/08/blockchainmining-disputes-
scheduled/)

Consumers, governments, and public interest groups have increasingly raised concerns over
human rights abuses in the mining sectors. Blockchain technology can reduce this burden by
facilitating transparency in the supply chain. The application of this technology in the mining
sector has the potential to have a significant effect on the arbitration of mining-related
disputes. Blockchain technology can help address this very issue of supply chain
transparency and efficiency by providing a platform on which ownership information of
tagged minerals is recorded on a digital ledger that can only be updated or modified upon
predetermined conditions such as when all members of the blockchain network agree to the
modification. This is exactly the kind of initiative that Cobalt Blockchain, a mineral resource
company, is launching. Arbitrators should be prepared for the arrival of blockchain
technology in the realm of mining sector disputes and should welcome it. This is because
automating transparency in the supply chain will help manage the evidence and will make it
easier to make findings relating to the origin of a mineral. It will do this by removing the
need to spend time and energy backtracking the chain of ownership and sifting through the
evidence to establish whether the mineral was sourced from a mine in a conflict area and
whether anyone benefitted from human rights violations when doing so.

International Chamber of Commerce took a lead and has issued guidelines on the use of
Information Technology (IT) in arbitration, devised a web-based system for conducting and
managing arbitration proceedings, and established an online clearinghouse system for small
claims. Technologies have also had a significant impact on the nature of evidence and the
process has become fast. The use and acceptance of IT in international arbitration has
substantially increased, and advances in technology have led to solutions that previously were
not readily available or technically mature. For less economically stable countries it is
difficult to avail the benefit of international arbitration and IT can render arbitration being
more accessible, for instance can make it possible for parties with less economic power to
save certain costs that disadvantage them against more powerful ones. In online arbitration,
parties may decide to conduct hearings online and to examine and cross-examine witnesses,
or hear experts, using teleconferencing or videoconferencing. The information exchanged is
highly sensitive and should be secured and encrypted Documents and evidence that are filed
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before the Arbitral tribunal may be scanned copies of the originals or can be protected and
authenticated with the help of digital signatures. Institutions could introduce mandatory filing
and communication systems under which data would be transmitted exclusively through an
internet-based secured platform, moving away from sharing external drives, hard copies and
emails with sensitive attachments.

Article III: Will the Commercialisation of Blockchain Technologies Change the Face of
Arbitration? Kluwer Arbitration Blog,

URL:(http://arbitrationblog.kluwerarbitration.com/2018/03/05/topic-tobe-confirmed/)

Blockchain has far wider-reaching potential and has the prospect fundamentally to disrupt
modern business practice in many sectors. . As users of arbitration are rushing to understand
and evaluate how blockchain can enhance their business, arbitration practitioners need to
appreciate what impact this trend could have for the popularity and physiognomies of
arbitration in the future. Smart contracts are anchored within a valid legal framework and that
parties identify, at the outset, the applicable dispute resolution mechanism. A sensible
solution, at this stage, is for parties to enter into ‘smart agreements’, meaning traditional legal
agreements (entered into in compliance with traditional principles of contract formation),
which contain one or more clauses that will be executed through smart contracts on the
blockchain. This approach ensures that parties preserve their ability to resolve both
blockchain and real-world disputes in a single chosen dispute resolution forum (or tailored
mechanisms for different types of disputes. The development of smart arbitration requires
close cooperation between lawyers on one side and computer, mathematical and
cryptography experts on the other side. Recent development in this respect include new
decentralised dispute resolution platform, such as Code Legit, which conducted the first
blockchain based smart contract arbitration. Introducing artificial intelligence in international
arbitration would work as a great assistance and work can be made easier and fast. It may
help to reduce time and costs in arbitration by streamlining document review or assisting with
legal research. Some tools may even help to establish forecasts or probabilities of success (or
failure) based on an analysis of case law and findings by individual arbitrators. There can be
online filing platforms where the parties to the online arbitration may file their documents
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and evidence through an independent and authorised third party provider. Finally, new
technologies and the disputes over the commercialization of those technologies have
triggered some new and innovative substantive causes of action raised in cases where a new
technology is at the core of the dispute. With adoption of Technology in international
arbitration in proper way efficiently and effectively can be a powerful toolbox for delivering
justice through arbitration.

SESSION V:

Panel discussion on-

“Procedure and Evidence in International Arbitration from a Practitioner’s and Expert’s


Perspective”

Article I: Frances P. Kao, Justin L. Heather, Ryan A. Horning, Martin V. Sinclair and Jr.,
Into the Hot Tub-A Practical guide to alternative expert witness procedures in international
arbitration, American Bar Association, The International Lawyer, Vol. 44, No. 3 (FALL
2010), pp. 1035-1044.

One of the central procedural elements of most international arbitrations involves the taking
and presentation of evidence. Although evidence-taking procedures in international
arbitration are (and should be) individually-tailored to the circumstances of particular cases,
there have nonetheless been efforts to develop uniform, predictable principles concerning
some of the basic structural aspects of the taking of evidence. A leading example of these
efforts is the International Bar Association’s Rules on the Taking of Evidence in International
Arbitration (“IBA Rules on the Taking of Evidence”) which were designed to provide a
neutral set of procedures for the presentation of witness and documentary evidence that
would be equally fair and familiar to both civil law and common law parties.

Many practitioners assert that it is unclear whether the alternative procedures achieve all the
desired results of time and cost efficiency, reducing the adversarial atmosphere and
narrowing the issues. But, given the increasing resort to alternative expert witness processes
by international arbitral tribunals, practitioners would do well to become familiar with these

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procedures and to anticipate the important decisions that have the combination of alternative
procedures that should be agreed to will differ depending on the nature of the case. The
combination of alternative procedures that should be agreed to will differ depend ing on the
nature of the case. For example, many practitioners agree that the meet and confer sessions
work best where the experts are addressing discrete issues and the broad underlying
principles governing the issues are largely not in dispute. This permits the experts to focus
solely on their discrete areas of disagreement to determine whether there can be common
ground between. The key to whether alternative procedures are ultimately successful is the
arbitral tribunal's ability to guide and control the proceedings. Ideally, the members of the
tribunal should be well prepared and familiar with the issues being discussed by the experts.
That way, the arbitral tribunal can focus the questioning, appropriately ask the experts for
responses to opposing statements, request further elucidation where needed, and probe areas
of inconsistency or disagreement.

Article II: Gary B. Born, Procedures in International Arbitration, International Commercial


Arbitration (Second Edition) Kluwer Law International 2014, pp. 2120-2318.

To have procedural neutrality in international arbitration is very important as most of the


parties in the dispute are not of the same jurisdiction For- e.g., there would be a difference in
a Kuwaiti company, with procedural experience and expectations rooted in Islamic law and
culture, contracting with a French company, whose procedural experience and expectations
will be based upon contemporary European civil law procedures. Another prime objective of
international commercial arbitration is its procedural fairness. Parties agree to international
arbitration, among other things, in order to obtain fair and objective procedures guaranteeing
both parties an equal opportunity to be heard. This objective is inherent in the adjudicative
character of international arbitration, in which the arbitrators are obligated to decide the
parties’ dispute impartially and objectively, based on the law and the evidence the parties
present. One of the most fundamental characteristics of international commercial arbitration
is the parties’ freedom to agree upon the arbitral procedure. One of the central procedural
elements of most international arbitrations involves the taking and presentation of evidence.
Although evidence-taking procedures in international arbitration are (and should be)

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individually-tailored to the circumstances of particular cases, there have nonetheless been


efforts to develop uniform, predictable principles concerning some of the basic structural
aspects of the taking of evidence. A leading example of these efforts is the International Bar
Association’s Rules on the Taking of Evidence in International Arbitration (“IBA Rules on
the Taking of Evidence”) which were designed to provide a neutral set of procedures for the
presentation of witness and documentary evidence that would be equally fair and familiar to
both civil law and common law parties. Many practitioners assert that it is unclear whether
the alternative procedures achieve all the desired results of time and cost efficiency, reducing
the adversarial atmosphere and narrowing the issues. But, given the increasing resort to
alternative expert witness processes by international arbitral tribunals, practitioners would do
well to become familiar with these procedures and to anticipate the important decisions that
have the combination of alternative procedures that should be agreed to will differ depending
on the nature of the case.

SESSION VI:

Panel discussion on-

“Recognition and Enforcement of Arbitral Awards - The Challenges Ahead”

Article I: Pierre Lastenouse, Why setting aside an arbitral award is not enough to remove it
from the international scene, Journal of International Arbitration, Kluwer Law International
1999, Volume 16 Issue 2, pp. 25-48.

It is observed that an arbitral award that has been set aside has no existence. Hence, once the
award has been annulled, there is nothing left to be enforced. Professor van den Berg put this
by way of a maxim: “Ex nihilo nil fit”. According to this view, annulled awards, because they
no longer exist, cannot be enforced in any country. The New York Convention allows and,
indeed envisages, that arbitral awards issued in a country signatory to the New York
Convention (a “Signatory Country”) may be enforced in other Signatory Countries
notwithstanding their annulment in the country in which or under the law of which they have
been issued. The letter and the spirit of the New York Convention require that international
awards be capable of enforcement notwithstanding their annulment by a local court in the
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country where they have been issued. While it would be undesirable to eliminate the
possibility of setting aside arbitral awards, it is put forth that, in the absence of a common
centralized body responsible for deciding on the action to set aside awards issued in any
Signatory Country, international legal effect should not be given to a local decision for
setting aside an international award, so that annulled awards should, indeed, be capable of
enforcement. This solution furthers the interest of the parties to international arbitration and
can only enhance the credibility of arbitration as an effective means of international dispute
resolution.

Article II: Gunther J. Hovarth, What weight should be given to the annulment of an award
under the Lex Arbitri? Journal of International Arbitration, Kluwer Law International 2009,
Volume 26 Issue 2, pp. 249-266

Recently a trend has been observed in which the municipal courts have been repeatedly
required to enforce arbitral awards that have previously been set aside in their country of
origin. However, even today amongst the arbitration practitioners there have been questions
of legitimacy of enforcement orders for such awards. The French courts have manifested their
readiness to enforce annulled awards in principle, whereas others, like the U.S. courts, have
shifted from an enforcement-friendly attitude to a rather more reluctant approach. In order to
achieve full satisfaction of the claims assured by the arbitral award, even in a foreign country,
the arbitral award must be recognized and enforced in the target state. The recognition and
enforcement of foreign arbitral awards is, beyond the scope of national legislation,
predominantly governed by bi- and multilateral treaties. In the interest of maintaining
international comity, national courts generally recognize as binding the decisions of
competent courts in other sovereign states. Hence, a foreign court decision annulling an
arbitral award would generally be recognized, and the principle of ex nihilo nil fit would
apply to the enforcement of the award. In the field of free circulation of arbitral awards, the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10,
1958 (NYC) is of paramount importance. With over 140 signatories, the NYC is recognized
the world over as one of the foundations for maintaining the integrity of international
arbitration by ensuring recognition and enforcement of valid arbitral awards. While the NYC

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is universally recognized, the interpretation of its provisions is not always uniformly agreed
upon. In particular, Article V (governing the refusal of recognition and enforcement of
awards), has been given a quite varied interpretation, most likely due to its non-mandatory
character.

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