[This is the title of the 6th Annual ADR Address for the Supreme Court of New South Wales, co-organised by the Australian Disputes Centre. It was orginally to be presented on 2 November 2023 but my e-bike accident meant deferring it until 22 February 2024! The public lecture includes several comparisons to developments in Japan and other Asian countries. Registration and other information regarding this lecture event, including the forthcoming paper, are available via https://disputescentre.com.au/events/supreme-court-of-new-south-wales-adr-address-2023/. The Introduction is reproduced below, a few more details are published on 12 February 2024 via the Kluwer Arbitration Blog, and my draft Powerpoints for the public Address are here. Past presenters and topics were:
I thank Chief Justice Bell and the Supreme Court of New South Wales for hosting this event, and Deborah Lockhart and her team at the Australian Disputes Centre for organising this Annual ADR Address. I particularly appreciate their flexibility in deferring the presentation date after my e-bike accident late last year, and for everyone’s attendance today instead. I acknowledge the Gadigal People of the Eora Nation as the traditional custodians of this land, along with their elders. I also acknowledge the elders from the judiciary who have presented the past five Annual Addresses, which I refer to in my paper soon available via the ADC webpage, and I am grateful for other information and feedback on earlier drafts from them and several others. As my paper is now too long to present verbatim, and Alternative Dispute Resolution is all about flexibility, I will mainly present this Address around these Powerpoint slides (also available in draft via my University of Sydney blog).
Introduction
International arbitration (IA) has burgeoned especially since the 1990s, including across the Asian region (as elaborated below in Part 2). The growth originated in international commercial arbitration (ICA), but it has been bolstered especially over the last 10-15 years from mostly now treaty-based investor-state arbitration (ISA). However, as in the 1990s, concerns are again building about escalating delays and especially costs (Part 3). This is due not just to the growing complexity of transactions and therefore disputes. Other factors contributing to costs and delays arguably include IA still having no real competitors for cross-border dispute resolution, the growth of large law firms and the billable hours culture, conservatism about controlling legal costs (eg via caps on fees or sealed offers), the double-edged sword of confidentiality, and the proliferation of soft law instruments.
There has been quite extensive discussion in case law and commentaries about the relationship between ICA and international litigation conducted through courts, as part of an overall system for resolving cross-border commercial disputes.[1] The present paper takes an even more encompassing view. It teases out some connections or influences among ICA, ISA, international and domestic mediation, which may be or become more or less productive, particularly from the perspective of reducing costs and delays.
Cross-fertilisation from mediation practice has not yet borne much fruit globally in the form of hybrid Arb-Med, where parties authorise arbitrators themselves to act as mediators (Part 4), in ISA and even in ICA. Instead, Med-Arb and other multi-tiered dispute resolution clauses (involving separate neutrals) are becoming more prevalent in cross-border transactions, aiming to reduce the costs and delays associated with proceeding to IA (Part 5). However, the spread has not been uniform across the world of ICA, and has not yet impacted much on investment treaties and therefore ISA. In addition, cross-fertilisation partly from ISA regarding the consequences of non-compliance with pre-arbitration steps in such clauses is causing complications, although it may lead to constructive solutions in ICA as well as ISA. Overall, various cross-overs are already evident among ICA, ISA and international mediation, and such cross-fertilisation needs to be tracked and channelled into the most productive interactions.
[1] See, eg, Michael Hwang, ‘Commercial Courts and International Arbitration—Competitors or Partners?’ (2015) 31(2) Arbitration International 193; James Allsop and Samuel Walpole, ‘International Commercial Dispute Resolution as a System’ in Sundaresh Menon and Anselmo Reyes (eds) Transnational Commercial Disputes in an Age of Anti-Globalism and Pandemic (Hart 2022) 43; Franco Ferrari and Friedrich Rosenfeld, ‘Deference in International Commercial Arbitration: Setting the Stage’ in Franco Ferrari and Friedrich Rosenfeld (eds), Deference in International Commercial Arbitration (Wolters Kluwer, 2023) 3.
This hybrid-format 14 February 2024 seminar in Tokyo was planned primarily by the “Japan Arbitration Club” formed recently among younger arbitration experts and afficionados, led by Carlotta Bruessel (now with Nishimura & Asahi, Japan’s largest law firm, and previously working in Canberra and Sydney) who also moderated this seminar. My co-panellists included Eriko Kadota, now a managing associate in Tokyo with Linklaters (which co-sponsored the seminar and provided the venue) who competed successfully for ANJeL’s “Team Australia” in the intercollegiate negotiation and arbitration moot competition (INC) while a student at Sydney Law School. Other event supporters were the Australian Network for Japanese Law (ANJeL), the International Chamber of Commerce’s Young Arbitration and ADR Forum (ICC-YAAF, as this year’s Vis Moot applies the ICC Arbitration Rules) and the Moot Alumni Association for the Vis moot. The latter’s Japan members and others have started coordinating a “pre-moot” competition for Japanese university teams before they go to the main Vis Moot held in Vienna or the spin-off Vis East Moot held in Hong Kong.
The main focus of this seminar was to share experiences and ideas especially for Japanese students and coaches about what to expect in the Vis Moots. However, to that end I added some contrasts with the INC, which has also greatly enhanced interest and skills in arbitration among Japanese and other law students over the last two decades.
My first encounters with the Vis Moot dated back to the late 1990s, when I was joined as associate professor at Kyushu University Law Faculty by Hiroo Sono, who had already attended the Vis Moot and eventually became Dean of the Law School at Hokkaido University. (We also ended up co-authoring in 2019 a Kluwer book on Contract Law in Japan.) I took his prescient advice to attend the Sixth Vis Moot in Vienna as a mock arbitrator around Easter in 1999, as he had done in 1997. Then we ran a small courses for the Japanese-language LLM program and then new English-language LLM/LLD program in Kyushu University to coach a team that competed in the Seventh Vis Moot in Vienna in early 2000. Already there had been one Japanese team, from Meiji Gakuin University (competing in the Fifth and Sixth Vis Moots), but there was very little awareness of the competition around that time – or indeed about arbitration – in Japan. Writing articles in Japanese (in 1186 Jurisuto and 67 Hosei Kenkyu / Journal of Law and Politics, in 2000) with Professor Sono and in English (66 Hosei KenkyuPart I and Part II in 1999) to promote more interest in the Vis Moot, I speculated that its growth already over the 1990s was linked partly to states starting to accede to the UN Sales Convention (CISG, agreed in 1980 and in force from 1988). It was even clearer that the numbers of teams per country were rising, generating critical mass and even by then creating scope for “pre-moots” before the main competition in Vienna – as seen from this Figure 1 reproduced Part II of my 1999 article in Hosei Kenkyu:
Japan acceded in 2008 (as explained in his JJL article here), thanks significantly to the efforts of Professor Sono who was seconded around then to the Ministry of Justice from Hokkaido University to promote understanding and engagement with CISG. This has made the UN Sales Convention directly relevant for Japanese traders and their legal advisors, who also need to assist Japanese subsidiaries and affiliates especially in Asian states that are also increasingly member states of CISG. Another contemporaneous development has been the comparatively belated but (especially since 2017) significantly greater interest in international arbitration among stakeholders in Japan (including now some very large local law firms, as well as branches of Western firms that were allowed full profit-sharing partnerships with Japanese bengoshi lawyers from 2004). This evolving context helps explain why by the 30th Vis Moot in Vienna held in 2023, there were four teams from Japanese universities (out of by then 380 teams in total): Doshisha, Kwansei Gakuin, Waseda and Seinan Gakuin. And for the 20th Vis East Moot in 2023, for example, Nagoya University reached the final eight teams.
These are impressive achievements for teams coming from a country where the native language is not English (the language of the Vis Moots), which helps Australian and other university teams; and not even a Western language, which helps continental European and other teams that have also been frequent and often very successful competitors as well. A further challenge for Japanese teams has been that traditionally the law schools from common law jurisdictions put more emphasis on mooting generally, to build up the oral advocacy skills needed for the court cases that drove the development of the common law. (Already in 1999 I was impressed by the enthusiasm and skills of a team from an Indian law schools, which are also now often top performers in both Vienna and Hong Kong moots.) However, more opportunities for mooting and oral argumentation have grown also within the civil law tradition countries, including Japan – perhaps linked to its postgraduate Law School program inaugurated from 2004, which (with some difficulties) has expanded the numbers and skills of bengoshi lawyers. This gradual transformation in Japanese legal education more generally is arguably also reflected in the growing popularity and skill levels associated with the INC moot held in Tokyo towards the end of each year since 2002.
However, the INC moot differs in several ways from the Vis Moot, so the latter creates extra challenges for Japanese university teams – most of which compete now in both competitions. First, INC has a division or track where (sub)teams compete in Japanese, not just in English, and indeed the aggregate score for each university is reduced if competing only in one of the two languages. More preparations – in research, writing memorandums and the crucial practice moots – can therefore be done in Japanese as a native language. Japanese university teams competing only in English in the Vis Moots therefore need to factor in extra time and confidence-building exercises, perhaps involving more English-speakers as team members and coaches.
Secondly, the INC applies the UNIDROIT Principles of International Commercial Coontracts (first issued in 2004). Although their provisions overlap with CISG considerably, as later and opt-in rules of law (that parties must actively adopt), the UNIDROIT Principles can be more ambitious in their scope. They include provisions, say on regulating contractual unfairness, or allowing for adjustment of contracts in the event of supervening hardship, that are mostly left out of CISG for the applicable national law. The UNIDROIT Principles additionally apply to more complex (services and other) contracts than the international sale of goods, allowing for more arguments emphasising good faith and cooperation among the contracting parties than under CISG. In addition, the UNIDROIT as a restatement of the lex mercatoria are still not accepted by courts in many jurisdictions as governing law even if agreed upon by the parties for their cross-border contracts, unless combined with an international arbitration clause. And because arbitration is mostly confidential, whereas court litigation is mostly public, this means there is now much more publically-available case law on CISG from national courts around the world (and therefore related commentary) than on the UNIDROIT Principles as applied by arbitral tribunals.
The result of these differences is that arguments on contract law applying CISG in the Vis Moot tend to be more neo-classical and based on formal reasoning centred on the parties’ agreement and language used. By contrast, the arguments applying the UNIDROIT Principles in the INC moot can be more open-textured, appealing to wider contextual (moral, economic and other) considerations, although over the last decade or so these arguments have also become more formalised.
Thirdly, the INC is a one-shot competition. Each university only argues once in the arbitration round (and indeed only for one side, as assigned randomly by the organisers), even if the university fields multiple sub-teams competing in parallel. By contrast, the Vis Moot envisages that the higher-scoring teams can progress through to Finals, over many days of mock arbitration hearings. This also makes that competition more amenable to detailed and therefore more formal-reasoning arguments by the teams.
Fourthly, the INC traditionally did not address arbitration law problems, whereas those are often at least as important in the Vis Moot as the contract law problems. Recently, the INC incorporate some arbitration law questions in that round, but a key difference remains that the second day of the INC competition is a mock commercial negotiation seeking to reach agreement on a complex international joint venture. The skills required for successful negotiation, such as asking open-ended questions to try to understand the other side’s underlying interests, are often quite different that the more adversarial advocacy skills expected in international arbitration. Developing the latter is another challenge for Japanese university teams, even if students or coaches have become familiar with the INC moot.
Overall, the Vis Moot is designed to run as a quite formalised procedure, and has become more so as the numbers of teams competing in that competition has continued to grow. (This is true even of the Vis Moot East event, which I attended also in its earlier years when it was still smaller and therefore more like the Vienna moot over the 1990s.) This reflects the fact that the Vis Moots (in Vienna and to a growing extent also in Hong Kong) are also now a premier competition for students, coaches and mock arbitrators to network in order to enhance opportunities to actually practice international arbitration. There has also been resurgent formalisation of international arbitration over the last 10-15 years, including burgeoning costs and delays. Accordingly, Japanese participants in the Vis Moots should not be surprised to find that competition to be more rule-bound and intense even compared to moots like the INC.
Lastly, I share with you some excellent practical tips especially on oral advocacy for the Vis Moot (but also useful for the INC moot), from my colleague Prof Chester Brown. He has been lead coach for the University of Sydney Law School team that has competed very successfully in Vienna for around the last 15 years:
Present clear and simplified arguments
Signpost them (eg “We have three points …[but due to time the main focus will be on … unless the tribunal has particular interest in …]”)
If “respondent” on issues, respond to points made by claimants rather than reverting to written submissions
identify for the tribunal where parties agree or disagree (eg on the legal test)
use evidentiary record and precisely
remember points given for teamwork (eg for keeping to time)
remember one’s own timekeeping (eg if arbitrator questions a lot on an early issue, be ready to present on the second issue in say 1-2 not 6-7 minutes (& then ask for extra minute for both sides).
