“Declining Professional Diversity in International Arbitration”

By: Dr Nobumichi Teramura (Assistant Professor, Universiti Brunei Darussalam; Affiliate, Centre for Asian and Pacific Law at the University of Sydney), Dr Luke Nottage (Professor of Law, University of Sydney; Special Counsel, Williams Trade Law) and Mr James Tanna (Research Assistant, University of Sydney)[1]

On 20 June 2016, the Australian Centre for International Arbitration (ACICA) signed the Equal Representation in Arbitration Pledge, to improve the profile and representation of women in arbitration.[2] Since then, we have witnessed the international arbitration (IA) community’s significant collective progress towards greater diversity, especially over the last few years. These initiatives include Racial Equality for Arbitration Lawyers (REAL), the Rising Arbitrators Initiative (RAI) and the appointment of first woman President of the ICC International Court of Arbitration. We should certainly celebrate this advancement of equality in race, age and gender, although the main beneficiaries of the diminishing gender gap are reportedly white women based in Europe or North America.[3]

In addition, we should be aware that the burgeoning debate seems to leave out discussion of a further area where diversity is lacking in the IA community – an analysis of professional diversity. While the key groups and publication outlets for IA are dominated nowadays by those practising primarily as full-time lawyers, there is hardly any awareness or sustained discussion about the limitations of overlooking diversity of professional backgrounds, perhaps partly because arbitration rules usually do not require arbitrators to have any specific experience, training or qualifications. Nonetheless, for example, the ACICA Guidance Note on the Appointment of Arbitrators prompts parties to consider ‘diversity and issues of equal representation, such as gender, age, geography, culture, ethnicity, and professional background of the arbitrator’.[4]

Involving more non-lawyer practitioners (NLPs, such as engineers, architects, accountants) or those who are primarily academics could significantly reduce the persistent formalisation in IA.[5] Expanding professional diversity could also lead to other benefits, including indeed more gender diversity, given that academia does not have the same non-linear remuneration structures for lawyers that disadvantage career progression for many women.[6] These and other issues associated with professional diversity are outlined in our recent research article entitled “Lawyers and Non-Lawyers in International Arbitration: Discovering Diminishing Diversity”.[7] That research article also empirically analyses the ways legal practitioners have come to prevail across the key nodes of influence within the IA sector. The rest of this blog post introduces our key empirical findings.[8]

Associations and Institutions Promoting Arbitration

First, we examined key groups that promote IA but do not themselves administer arbitration cases. The influential groups examined were the International Council for Commercial Arbitration (ICCA), the Chartered Institute of Arbitrators (CIArb) and the International Bar Association (IBA).

The ICCA Board as of September 2021 largely comprised individuals falling primarily in the category of practising “Lawyer” (84%), executives of “International or Arbitral Organisations” (IAOs, typically leaders within arbitral institutions) (5%), “Mixed” (typically those having multiple professional engagements) (5%) and “Academic” (4%, essentially full-time). We also examined the composition of ICCA Taskforces for all years: Lawyer (61%), IAOs (18%), lawyers and NLPs working in Litigation Finance (7%), Mixed (7%) and Academic (6%). Authors of entries in the Young ICCA Blog between 19 October 2010 and 17 February 2021 fell into the categories of Lawyer (86%), Academic (10%) and Mixed (2%). Analysis of presentations in ICCA Congresses and related chapters in the ICCA Congress Series over the last 30 years also indicated the growing prevalence of Lawyers (60% over the entire period) within ICCA publications, and in parallel reflecting only small proportions of IAOs (14%), Academic (12%) and Mixed (9%).

The lack of diversity in professional backgrounds was also salient in the other groups. For example, the vast majority of CIArb Board Members in 2021 were from the Lawyer category (78%), in contrast to NLPs making up 15% of the Board (despite the earlier influence of NLPs in CIArb until around the 1990s) and no members falling into the Academic category. Speakers in CIArb Webinars from July 2020 to March 2021 comprised Lawyers (75%), Academic (12%), NLPs (9%) and IAOs (2%).

Meanwhile, the data is comparable at the IBA. As for the committee membership for proliferating IBA instruments, such as the Evidence-Taking Rules, there was an even heavier prevalence of Lawyers (95%) although this was less surprising given that the IBA is essentially a global federation of lawyers’ associations. Similarly, for IBA webinars, mostly from 2020 but also some from 2021, 94% of the key participants were Lawyer; only 4% could be coded as IAOs, while 2% were Academic.

Arbitration Institutions and Their Leaders

Next, we analysed the international and regional arbitration institutions having high caseloads and/or those deemed reasonably representative of civil or common law traditions and geographical diversity. These were ACICA, the International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA), the Swiss Arbitration Centre, the International Centre for Dispute Resolution (ICDR), the Singapore International Arbitration Centre (SIAC), the Hong Kong International Arbitration Centre (HKAIC), the China International Economic and Trade Arbitration Commission (CIETAC), the Asian International Arbitration Centre (AIAC), the Japan Commercial Arbitration Association (JCAA), the Korean Commercial Arbitration Board (KCAB), the Thai Arbitration Institute (TAI) and the newer Thai Arbitration Centre (THAC).

To discern professional diversity within the leadership of these arbitration centres, we looked overall at the membership of various Boards, Councils, Committees, Taskforces and Courts as of 2021. The combined analysis confirmed Lawyers’ predominance (76%), as well as the comparatively small ratios of NLPs (11%), Academics (6%) and IAOs (1%).[9] We further investigated speakers and moderators at webinars and conferences organised by those arbitration centres in 2020 and the first half of 2021: Lawyers (80% in 2020 and 83% in 2021), IAOs (8% and 4% respectively), Academics (5% and 6%) and NLPs (4% and 5%).   

Indicative Journals, Books and Blogs

We also considered major journals for international arbitration, complementing an earlier analysis of periodicals and other publications.[10] These were Arbitration International (associated with the LCIA), Arbitration: The International Journal of Arbitration, Mediation and Dispute Management (CIArb), Asian International Arbitration Journal (SIAC) and the Journal of International Arbitration (published by Wolters Kluwer). Again, the overall extent of Lawyer involvement was striking. Editors of these four journals as of September 2021 were mostly Lawyer (75%), although there were somewhat more Academic (22%) than say for the leadership of the arbitration institutions as examined above. Then, we examined all the discernible articles (other than book reviews) published in the four journals from the late 1980s, when three were being published and some debate emerged about the role of NLPs in arbitration.[11] Sampling the journals essentially at five-yearly intervals (in 1989, 1994, 1999, 2004, 2009, 2014 and 2019-21) gave the following proportions for authors: Lawyer (71%), Academic (19%), IAOs (2%), NLPs (4%) and Mixed (3%). Analysing authorship categories over time found that absolute numbers and proportions of articles written by Lawyers had grown, especially over 2000-2010.

We further studied editors and authors of influential books and blogs. For books, for example, we investigated the International Arbitration Law Library Series published by Wolters Kluwer, with 59 titles since 1993 when the first volume of the Series was published. Coding editors and authors of these volumes and individual chapters demonstrated the dominance of Lawyer (50%) although a significant minority were from Academic (39%). Other professions such as IAOs, NLPs and Mixed occupied relatively small proportions (3%, 2% and 6%, respectively). On blogs, our analysis concentrated on Kluwer Arbitration Blog (KAB), as one of the most well established and widely read arbitration-related blogs. Comparing the KAB’s editorial team for August 2021 and 2018 (the latest year for which the Wayback Machine online allowed us to access a snapshot of the list of all editors), 80% were Lawyers and 20% were Academics. In addition, we studied backgrounds of blog authors in February, June and November in 2009, 2014 and 2019-21. The sampling found a similar prevalence of postings by Lawyer (79%), some by Academic (16%) and very occasionally by authors from an IAO (2%).

Concluding Remarks

The phenomena confirmed by our empirical research are clear: the entrenchment of lawyers through the world of IA, and the corresponding decline in involvement and influence of full-time academics and especially other NLPs. This growing lack of diversity in professional backgrounds contrasts with gender diversity, which has experienced some statistical improvements in appointments of arbitrators or other leadership positions in some arbitration centres.[12] One response to that ongoing “diversity deficit” might be to encourage more involvement of academics and NLPs in the leadership and activities of the significant arbitration associations and centres, as well as leading publication venues.[13] Such a response will help the IA sector develop diversity of perspectives because, as Joshua Karton suggests, such diversity may be enhanced by arbitrators with varied experiences who may think differently from the arbitration mainstream.[14] At least, we need more discussion and ongoing debate about the remarkable and continuing decline in professional diversity within IA.


[1] This article is a version of Nobumichi Teramura, Luke Nottage and James Tanna, ‘Declining Professional Diversity in International Arbitration’, Kluwer Arbitration Blog (Blog Post, 3 April 2022) <http://arbitrationblog.kluwerarbitration.com/2022/04/03/declining-professional-diversity-in-international-arbitration/>,

[2] ACICA, ‘Media Release: Australian Centre for International Commercial Arbitration Signs Equal Representation in Arbitration Pledge’ (20 June 2016) <https://acica.org.au/wp-content/uploads/2016/06/Media-Release-Equal-Representation-in-Arbitration-Pledge.pdf>.

[3] Kiran Nasir Gore, ‘2021 In Review: Continued Strides in Favor of Diversity and Sustainable Development in International Arbitration’, Kluwer Arbitration Blog (Blog Post, 27 February 2022) < http://arbitrationblog.kluwerarbitration.com/2022/02/27/2021-in-review-continued-strides-in-favor-of-diversity-and-sustainable-development-in-international-arbitration/>.

[4] See <https://acica.org.au/wp-content/uploads/2022/01/ACICA-Guidance-Note-on-the-Appointment-of-Arbitrators-FF1.pdf> (emphasis added), available via <https://acica.org.au/acica-practice-procedures-toolkit/>.

[5] Nobumichi Teramura, Ex Aequo et Bono as a Response to the ‘Over-Judicialisation’ of International Commercial Arbitration (Wolters Kluwer, 2020).

[6] Claudia Goldin, Career and Family: Women’s Century-Long Journey toward Equity (Princeton University Press, 2021).

[7] Luke Nottage, Nobumichi Teramura and James Tanna, ‘Lawyers and Non-Lawyers in International Arbitration: Discovering Diminishing Diversity’ (September 2021) manuscript at <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3926914>. A shorter version of that paper is also forthcoming in Shahla Ali, Filip Balcerzak, Giorgio Fabio Colombo and Joshua Karton (eds), Diversity in International Arbitration: Why It Matters and How to Sustain It (Elgar, 2022).

[8] As elaborated in the research article, including the methodological Appendix, we basically categorised all individuals in accordance with their primary profession at the time they were a member of the relevant arbitral organisation, the relevant publication was written, or the relevant presentation was given.

[9] The proportion for ACICA was higher in 2021: see Luke Nottage, Nobumichi Teramura and James Tanna, ‘Lawyers and Non-Lawyers in International Arbitration: Discovering Diminishing Diversity’ (n 7) 24. Tracking its Board size and composition over time, see also Luke Nottage and Richard Garnett, “The Australian Centre for International Commercial Arbitration” in Helene Ruiz Fabri (gen ed) Max Planck Encyclopedia of International Procedural Law(Oxford University Press, 2019) via https://www.mpi.lu/mpeipro/.

[10] Luke Nottage, ‘International Arbitration and Society at Large’ in Andrea Bjorklund, Franco Ferrari and Stefan Kroll (eds), Cambridge Compendium of International Commercial and Investment Arbitration (Cambridge University Press, forthcoming 2022), manuscript at <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3116528>.

[11] The Asian International Arbitration Journal was published from 2005.

[12] ICCA, Report of the Cross-Institutional Task Force on Gender Diversity in Arbitral Appointments and Proceedings (The ICCA Reports No 8, 2020).

[13] Andrea K Bjorklund et al, ‘The Diversity Deficit in International Investment Arbitration’ (2020) 21(2-3) The Journal of World Investment & Trade 410.

[14] Joshua Karton, ‘Diversity in Four Dimensions: Conceptualizing Diversity in International Arbitration’ (March 2022) <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4054031>.

Developing Diversity within Diversity Discourse: Remembering Non-Lawyers in Arbitration, in Asia and Beyond

This is the title of a presentation (Powerpoints in PDF here) for the 28-29 May 2022 19th ASLI Asian Law Conference, hosted this year by the University of Tokyo, based on an empirical study by myself, ANJeL-in-ASEAN convenor Asst Prof Nobumichi Teramura, and USydney research assistant James Tanna. It adds some directly Asia-related data to the analysis presented in a forthcoming chapter in Shahla Ali, Giorgio Colombo et al (eds) Sustainable Diversity in International Arbitration (Elgar, mid-late 2022), with a longer paper available via SSRN and a posting summarising key empirical findings via Kluwer Arbitration Blog.

Our presentation for ASLI also suggests that given the relative influence still of law professors in developing international arbitration in Asian states, particularly perhaps those more influenced by the civil law tradition, the large and growing dominance of full-time lawyers across the field may have a significant indirect impact on international arbitration in Asia.

Presentation Abstract: This paper, co-authored with Asst Prof Nobumichi Teramura (UBrunei) and James Tanna (USydney), highlights a curious lack of diversity within the proliferating discourse about the lack of diversity in international arbitration. There is hardly any awareness or at least sustained discussion about limited diversity of professional backgrounds, and more specifically the dominance nowadays of those with practising lawyer positions or primary careers – including more recently in Asia – across the key groups and publication outlets for international arbitration. Yet this encroachment of lawyers was still being contested in the 1990s, as being linked to burgeoning costs and delays, and such “formalisation” has been re-emerging in recent years. Diversifying the world of international arbitration to involve more non-lawyers, including academics, could promote various other objectives too, and thus enhance the legitimacy and sustainability of international arbitration.

This paper therefore analyses empirically the ways lawyers have come to dominate key nodes of influence within the world of international arbitration. We examine this worldwide and in the Asian region, thus also giving a sense of geographical diversity. Part I looks at lawyers in key general associations or organisations promoting international arbitration, including their leadership and presenters at symposiums. Part II focuses on various arbitration centres globally and regionally, which actually administer cases. Part III examines contributions to some key arbitration journals (including the Asian International Arbitration Journal), an influential book series, and a widely-read Blog. The conclusion reiterates that restoring more non-lawyers in the world of international arbitration should help not only to reduce formalisation and inefficiencies in international arbitration, but also have various other salutary effects, including potentially improving gender diversity.

Corruption and Illegality in Asian Investment Arbitration

Written by: Asst Prof Nobumichi Teramura (UBD-IAS, CAPLUS affiliate) and Luke Nottage

[Updates: I have co-authored draft introductory and Thailand chapters for this book project proposed with Springer, and will present them at an invitation-only webinar for book contributors hosted by UBrunei on 15 June 2022, as well as at Griffith University’s Law Futures Centre on 21 July 2022.]

The Institute of Asian Studies at the Universiti Brunei Darussalam (UBD-IAS) has recently funded a conference volume project on this important topic, involving several professors from the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS).

Bribery and other serious illegal behaviour by foreign investors are widely condemned in any society. The problem is that people seem not to have reached a consensus on the consequences of corruption and illegality in international investment and especially in investment arbitration – a transnational procedure to resolve disputes between a foreign investor and a host state. A core issue is whether a foreign investor who violated a host state’s law would be awarded protection of its investment, as per its contract with the host state and/or the applicable trade or investment agreement between the home state and the host state. Some suggest such protection would be unnecessary, as the investor committed a crime in the host state, while others attempt to establish an equilibrium between the investor and the host state. Some others claim to protect investment, invoking the sanctity of promises made. This research explores ‘Asian’ approaches toward the issue, considering the extent to which significant states in Asia are likely to become ‘rule makers’ rather than ‘rule takers’ regarding corruption and serious illegality in investor-state arbitration. To this end, we will employ a comparative method, inviting scholars from the Asia-Pacific region, including UBD-IAS and other institutions.

The Principal Investigator is Dr Nobumichi Teramura, the Co-Principal Investigator is Assoc Prof Bruno Jetin (UBD-IAS Director), Luke Nottage (appointed also now a Visiting Professor at UBD) is another contributor and the others are listed below. Many have previously worked together on related Asia-focused projects, notably their co-edited volume with Shahla Ali on New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution (Wolters Kluwer 2021) and Luke Nottage’s book co-edited with Julien Chaisse on Investment Treaties and International Arbitration Across Asia (Brill, 2018; expanding on country reports from a 2017 JWIT special issue on ASEAN with Prof Sakda Thanitcul as joint special editor and supported by the Sydney Southeast Asia Centre).

This new project’s primary purpose is to examine Asian approaches and case studies regarding corruption and serious illegality in international investment arbitration. It focuses on corruption-related disputes between private parties and public sector entities. It also covers other serious illegal conduct by foreign investors  related to or broadly equivalent to corruption and bribery, including serious non-compliance with key provisions of national laws regulating the admission or operation of foreign investment.

Regional free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership Agreement (RCEP Agreement) mandate member states to combat corruption and other illegal conduct. However, they remain silent on how specifically to deal with public-private disputes arising from corruption and illegality. Trade and investment law experts have become well aware of the problem, and some suggest treaty reforms even at a global level. Against this backdrop, the research aims to accumulate Asian perspectives, for Asia to build the foundation of leading the next rounds of treaty reforms. In particular, it intends to address the following questions:

  1. Whether Asia has been and will remain ‘ambivalent’ about international law prohibiting corruption and illegality. How have Asian countries been combatting corruption and other illegal activities particularly as to foreign investment? What laws and rules exist, and how do they operate in respective jurisdictions? What are the recent developments?
  2. Whether and how Asian countries have dealt with corruption and illegality in relation to foreign investment projects. If they have faced any international investment cases, what are the outcomes and consequences?
  3. Whether Asian countries have been or are more likely to become ‘rule makers’ rather than ‘rule takers’ in international investment law (as explored generally in the Brill and Wolter Kluwers books mentioned above) regarding corruption and illegality.

Those questions will support us to achieve the central objective: to examine Asian approaches toward  corruption and illegality in international investment arbitration. As we enter an age in which Brunei is increasing its engagement with foreign companies, it is probable that there will be disputes that need to be arbitrated, and corruption and illegality in investment arbitration are issues which other countries in the region are already facing. This research project will help the Bruneian authorities and the academic community, and counterparts in other Asia-Pacific jurisdictions as well as further afield especially when engaging with this region, learn more about such topical issues and potential counter-measures.

More specific expected outcomes include:

  1. One international online research workshop in mid 2022 and one international symposium in early 2023 (depending on pandemic travel restrictions), both in Brunei, for the contributors to present their papers and exchange opinions.
  2. An edited volume in the IAS-Springer Book Series on “Asia in Transition” based on the research papers by the contributors. (A further grant will be applied for to assist with related copy-editing etc, and CAPLUS interns and other Sydney Law School resources will assist particularly with the chapters authored by CAPLUS members.)
  3. A journal article co-authored by Professor Nottage, A/Professor Jetin and Dr Teramura for a Q1 Scopus journal.

Contributors based at UBD:

Name and FICsDescription of contribution
Dr Nobumichi TERAMURA (UBD-IAS)Principal Investigator – general editor and author of chapters for the edited volume in the IAS-UBD “Asia in Transition” series
Associate Professor Bruno Jetin (UBD-IAS)Co-Principal Investigator – general editor and author of chapters for the edited volume in the IAS-UBD “Asia in Transition” series
Yang Amat Mulia Pengiran Indera Negara Pengiran Anak Haji Puteh ibni Al-Marhum Pengiran Pemancha Pengiran Anak Haji Mohamed AlamGeneral contributor (re corruption, investment, arbitration and the Asia-Pacific) and author of the forewords of the edited volume
Professor Ahmed Masood Khalid (UBD-SBE)Contributor (re business and corruption)
Dr Masairol Bin Haji Masri (UBD-SBE)Contributor (re business and corruption)
Dr Hammeed Abayomi Al-Ameen (UBD-SBE)Contributor (re business law and corruption)

Other Contributors:

Professor Luke NottageUniversity of Sydney, Australia (CAPLUS Associate Director); UBD (visiting professor)Co-organiser – general editor and author of chapters for the edited volume in the IAS-UBD “Asia in Transition” series
Dr Colin Ong QCArbitration Association of Brunei Darussalam; and Colin Ong Legal ServiceContributor (re standard of proof for corruption allegations)
Professor Sakda ThanitculFaculty of Law, Chulalongkorn University, ThailandContributor (re Thailand)
Professor Sirilaksana KhomanFaculty of Economics, Chulalongkorn University; National Anti-Corruption Commission (NACC), ThailandContributor (re Thailand)
Mr Antony CrockettHerbert Smith Freehills, Hong KongContributor (re Indonesia)
Professor Simon ButtUniversity of Sydney (CAPLUS Co-Director)Contributor (re Indonesia)
Professor Romesh WeeramantryNational University of Singapore; Clifford ChanceContributor (re Lao Republic)
Justice Anselmo ReyesSingapore International Commercial CourtContributor (re corruption regulations for economic warfare)
Professor Vivienne BathUniversity of Sydney (former CAPLUS Director)Contributor (re China and Hong Kong)
Professor Joongi KimYonsei Law School, South KoreaContributor (re South Korea)
Professor Dai TamadaKyoto University, JapanContributor (re Japan)
Dr Prabhash RanjanSouth Asian University, IndiaContributor (re India)
Dr Martin JarrettMax Planck Institute, Heidelberg, GermanyContributor (re general investment law and investor misconduct)
Professor Tim LindseyUniversity of Melbourne, AustraliaContributor (re Indonesia)
Dr Jocelyn CruzDe La Salle University, the PhilippinesContributor (re the Philippines)

Publications and Webinars on Asia-Pacific arbitration and ISDS

On 23 March 2022 Kyoto University awarded Luke Nottage an LLD by publications for his book of selected/updated and some new essays on International Commercial and Investor-State Arbitration: Australia and Japan in Regional and Global Contexts (Elgar, 2021). In addition, a Transnational Dispute Management report of (Young-OGEMID listserv) Q&A about the book was published in February 2022.

On 2 March 2022 Prof Luke Nottage joined Dr Michael Hwang SC (Singapore), Neil Kaplan CBE QC SBS (Hong Kong), Hafez Virjee (Paris) for a public webinar entitled “Between Theory and Practice”, discussing the development of international arbitration particularly in the Asia-Pacific region and the place of Australian practitioners in this global market: watch the recording here. The webinar also discussed the benefits of pursuing international arbitration as an elective course, in the context of the large range of international arbitration materials made available to Sydney Law School students and staff through the Delos Dispute Resolution platform thanks to a subscription donated by Dr Hwang.

On 25 February Luke Nottage was interviewed for a podcast recording by a Bosnia-based association for arbitration, discussing the hot topic of transparency vs confidentiality particular in investor-state dispute resolution. Below is the outline of key points discussed.

In addition, Luke Nottage spoke on ISDS and investment treaties at the UoW Transnational Law and Policy Centre‘s co-hosted symposium on topics being negotiated in the Australia-India FTA (recording here), focusing on mandatory mediation before investors arbitrate disputes, and was then invited to speak on ISDS reform more generally for a symposium hosted by the Indian government’s Centre for Trade and Investment Law.

Some of Luke Nottage’s related recent publications include an overview chapter for a new book on the Asian Turn in Foreign Investment, an econometric analysis of ISDS-backed treaties on FDI flows, international arbitration and society at large (in the new Cambridge Compendium), professional diversity in international arbitration, and a review forthcoming in the Australian Law Journal of a new book on International and Australian Commercial Arbitration.

* * *

25 February 2022 webinar on Transparency in ISDS:

  • Pros and cons of transparency in international arbitration generally?
    • Fewer costs and delays in procedures and award-writing if procedure limited to the parties/counsel and arbitrators, not wider public
    • vs leads to more info asymetries in this market for services (arbitrators, especially lawyers, even expert witnesses) hence potential costs and delays: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2987674
    • If diminishing net cost savings, even in intl commercial arbitration, less attractive balance from rule of law perspective, undermining legitimacy of international arbitration compared to (more public) litigation – see (Menon CJ article, quoted in my JoIA article on ACICA Rules 2021 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3931086: incidentally, those don’t relax confidentiality but do require disclosure of third-party funders)
    • Especially in investor-state arbitration, given its inherent greater public interests, and growing media attention (and polarisation)
  • Current regime:
    • Already considerable (surprising) transparency in ISA re awards (2/3): https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3227401 **
    • ICC Rules (mostly an ICA org, occasionally ISA): no confidentiality imposed on parties
    • ICSID Convention / Rules (2/3 of ISA cases): likewise, but eg „shall promptly“ publish „excerpts of legal reasoning“ in awards, need consent of parties for full award (or leak!)
    • Ad hoc arb UNCITRAL Rules (eg 2010): likewise, can publish awards if parties consent, arbitrator discretion re other transparency (eg Philip Morris v Australia procedural order)
      • Revised 2013 for transparency in all treaty-based arbs, then 2014 Mauritius Convention to extend transparency to pre-2014 treaties (whether UNCITRAL or other Rules)
  • The recent amendments of investment arbitration rules (most notably ICSID) and dispute resolution clauses in IIAs [eg] to allow third-party submissions.
    •  ICSID already in 2006 had amended its Rules for Convention and AF cases to somewhat expand confidentiality – https://icsid.worldbank.org/resources/rules-and-regulations/amendments/about
    • Recently decided further ICSID Rules revisions (since late 2016) align AF Rules (which also now can be adopted even without any party being member of the ICSID Convention) with expansive transparency across all stages as in UNCITRAL Rules; plus for ICSID (Convention states) Arb Rules eg at https://icsid.worldbank.org/resources/rules-amendments
      • [Proposed Rule 62] Automatic publication of award if 60 days pass and no objection lodged by a party (cf earlier debate that such „deemed consent“ too incompatible with Convention, which would need to be then amended but too many member states!)
      • [Rule 63] Publish excerpts of legal reasoning re decisions other than awards, eg on jurisdiction (eg recently under Australia-Egypt BIT: do treaties providing that a host state „shall“ consent to ISA provide advance consent to that procedure? Earlier see my https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2424987)
      • [Rule 64] publish other docs lodged (eg party submission) also if agreed by parties or tribunal discretion / weighing
      • [Rule 65] shall allow non-parties to attend hearings (and publish transcript or recording) unless a party objects
      • [Rule 66] but subject to redaction etc for „confidential information“ (listed types below)
      • [Rule 67] expanded provisions so tribunals MAY allow submissions etc by „non-disputing parties“ eg amicus curiae – text below bolded
      • [Rule 68] provisions so tribunals SHALL allow „non-disputing treaty parties“
  • Tension between the transparency concerns expressed by the States in the context of ISDS and the lack of actual application of the transparency rules in practice. 
    • Yet only 9 ratifications of Mauritius Convention, few of the big players (eg Canada 2016, Switzerland 2017, Australia 2020 alongside review of old BITs – but no public report!): lose control / treaty negotiating leverage? Prefer incorporating tailored regime in treaties, anyway need to do so (Rules options provided, and/or amendments) for post-2014 treaties as Mauritius Convention doesn’t apply to those
    • Some host states have been reticent about too much transparency, including in treaty (re)drafting or UNCITRAL reform deliberations: exposes their (even alleged) poor governance (hence many investors favour transparency, potentially even encouraging settlement: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2065636), impede settlement (only partly empirically justified? ** and see further Ubilava at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3352181), more costs and delays (arguments over exceptions to transparency: Prof Zachary Douglas at https://www.claytonutz.com/ialecture/previous-lectures/2020)
  • Impact of legal tradition and culture on the approach to transparency in ISDS?
    • Less determined by say civil vs common law tradition, more eg socialist law / governance (eg Vietnam etc haven’t even ratified ICSID Convention, Chinese treatise were slow to incorporate much transparency) or developing country status (eg India?)
    • Culture might have some (small) impact: surveys etc show Eastern parties / counsel see confidentiality as advantage over litigation compared to Western, more generally think of eg https://en.wikipedia.org/wiki/The_Farewell_(2019_film) ?
  • Possible solutions to the improvement of transparency, while maintaining the benefits of confidentiality that the parties desire
    • States party should try to agree in treaties in advance
    • or during proceedings (but then host state and investor, and often acrimonious generally)
    • Otherwise, tribunals and counsel need to be aware of the competing interests, pros and cons of transparency (especially for costs and delays) as discussed above, when weighing whether and how to allow disclosures.

New ICSID (Convention) Arbitration Rule 66

Confidential or Protected Information

For the purposes of Rules 62-65, confidential or protected information is information

which is protected from public disclosure:

(a) by the instrument of consent to arbitration;

(b) by the applicable law or applicable rules;

(c) in the case of information of a State party to the dispute, by the law of that State;

(d) in accordance with the orders and decisions of the Tribunal;

(e) by agreement of the parties;

(f) because it constitutes confidential business information or protected personal

information;

(g) because public disclosure would impede law enforcement;

(h) because a State party to the dispute considers that public disclosure would be

contrary to its essential security interests;

(i) because public disclosure would aggravate the dispute between the parties; or

(j) because public disclosure would undermine the integrity of the arbitral process.

Rule 67

Submission of Non-Disputing Parties

(1) Any person or entity that is not a party to the dispute (“non-disputing party”) may

apply for permission to file a written submission in the proceeding. The application

shall be made in the procedural language(s) used in the proceeding.

(2) In determining whether to permit a non-disputing party submission, the Tribunal

shall consider all relevant circumstances, including:

(a) whether the submission would address a matter within the scope of the dispute;

(b) how the submission would assist the Tribunal to determine a factual or legal

issue related to the proceeding by bringing a perspective, particular knowledge

or insight that is different from that of the parties;

(c) whether the non-disputing party has a significant interest in the proceeding;

(d) the identity, activities, organization and ownership of the non-disputing party,

including any direct or indirect affiliation between the non-disputing party, a

party or a non-disputing Treaty Party; and

(e) whether any person or entity will provide the non-disputing party with financial

or other assistance to file the submission.

(3) The parties shall have the right to make observations on whether a non-disputing

party should be permitted to file a written submission in the proceeding and on any

conditions for filing such a submission.

(4) The Tribunal shall ensure that non-disputing party participation does not disrupt the

proceeding or unduly burden or unfairly prejudice either party. To this end, the

Tribunal may impose conditions on the non-disputing party, including with respect

to the format, length, scope or publication of the written submission and the time

limit to file the submission.

(5) The Tribunal shall issue a reasoned decision on whether to permit a non-disputing

party submission within 30 days after the last written submission on the application.

(6) The Tribunal shall provide the non-disputing party with relevant documents filed in

the proceeding, unless either party objects.

(7) If the Tribunal permits a non-disputing party to file a written submission, the parties

shall have the right to make observations on the submission.

** “… around 85% of cases where either the investor or the state have won are fully Public, and almost all the rest are only Partly Confidential. For settled cases, as italicised, 41% are Public or Partly Confidential.  This suggests that minimising costs and delays through early settlement may often be facilitated by keeping the outcome at least partly private, but not necessarily in all situations.”

“International and Australian Commercial Arbitration” – Book Review

[Update: this review will be published in the Australian Law Journal.]

This [new book analysing a field also important to Japan and other Asia-Pacific jurisdictions (LexisNexis, 2022, xii +735pp: ISBN 9780409353075, Paperback $185.)] is an authoritative and comprehensive 640-page commentary on both international and domestic arbitration law in Australia, from two eminent former full-time judges (Clyde Croft and Marilyn Warren) and one early-career academic (Drossos Stamboulakis) all now affiliated with Monash University. It is supplemented first by the text of the International Arbitration Act (IAA)and its first two Schedules, the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NYC) and the 2006 revised United Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (ML). The book also adds the text of the UNCITRAL Arbitration Rules, devised for ad hoc arbitrations but also forming the core of some institutional arbitration rules, as for the Australian Centre for International Commercial Arbitration,[1] whose first edition Rules Croft helped draft (before judicial appointment) drawing on his detailed knowledge of the UNCITRAL Rules.[2] Although these international instruments and legislation are freely available online, it is helpful to have their text appended in this volume, although it must add somewhat to the cost of the paperback or hardback versions.

The volume fills a significant gap in the literature on the comparatively small but lively field of arbitration in Australia. On the last page, as “related LexisNexis titles”, the publisher lists the commentary by Croft and others focused on domestic arbitration,[3] and another by Malcolm Holmes and Chester Brown on the IAA.[4] The present volume is more discursive and principles-based, rather than a section-by-section commentary, and covers domestic and international arbitration in Australia – both centred on the ML regime since 2010. There also exists an edited collection of essays on various aspects of international arbitration law and practice in Australia, including two chapters co-authored by Croft.[5] However, those analyses date back to 2010 (when the most significant amendments were made to the IAA) and include some more normative material (such as suggestions for further reform to legislation and arbitration rules). A more recent new book of selected (mostly updated) essays examines Australia but also compares developments particularly in Japan.[6] That also includes an analysis of investment treaty arbitration, a hybrid field of growing importance in Australia and worldwide, but not covered in the volume presently under review.[7] In short, this important new volume should fill a gap on the bookshelves (or eBook readers) of all those interested in domestic and international commercial arbitration in Australia.

It will be useful for practitioners seeking a clear overview of key principles enacted and applied by courts particularly in the Australian context, as well as university teachers and students of international commercial arbitration. The volume is written in a somewhat hybrid style. Although it is primarily a textbook, it includes sometimes quite lengthy extracts from judgments, making the volume also somewhat like “cases and materials”. These extracts are mainly from Australian case law (sometimes generated by two of the three authors when still serving on the Supreme Court of Victoria, particularly by Croft as he was charged with its Arbitration List), but also from case law particularly in Singapore and Hong Kong. That is very appropriate given the ML core and wider common law tradition shared with both those jurisdictions, and hence their influence on case law and some legislative reform in Australia.[8] Those jurisdictions also attract many more international arbitrations, hence court challenges generating case law on topics that Australian courts have not yet had to canvas or in as much detail. However, the present authors also refer to further crucial resources for correctly interpreting the international instruments and principles in contemporary arbitration. These include especially UNCITRAL documentation, including its Case Law Digest summarising key judgments worldwide, UNCITRAL’s Explanatory Note to ML (eg at pp 76-9).[9]

In coverage, after a Foreword by Robert French (former Chief Justice of the High Court of Australia), chapter 1 (pp 1-26) first introduces the “Nature of Arbitration and its Historical Development”. This includes its development in Europe, in England (including Derek Roebuck’s interesting argument that there was no less arbitration activity there in the 18th than early 20th century, undermining somewhat the view that English judges were quite wary and hence interventionist about arbitration from the 19th century), and in colonial Australia. The commentary then contrasts arbitration with other forms of dispute resolution (although the volume barely covers the hot topic of “Arb-Med” or arbitrators actively encouraging settlement), followed by the advantages and disadvantages of arbitration (highlighting advantages, but acknowledging the problem of cost – and, one might add, delays). Chapter 1 ends with a short analysis of “the bases of arbitral and judicial power”, emphasising the centrality of party agreement for arbitration as illustrated in a (quite lengthy) extract from High Court judgment unanimously rejecting a constitutional challenge to the ML regime for enforcing awards.[10] However, the commentary briefly mentions that “arbitral and judicial power may be affected by an exercise of the general sovereign power of the state, although such circumstances are exceptional” (p 26).[11]

Chapter 2 (pp 27-96) turns to the “Australian Approach to Arbitration”, tracking the evolution of arbitration statutes. This included the initiative from Queensland law reformers to update legislation in the early 1970s, prompted by the more pro-arbitration English Arbitration Act 1950, as it seemed “at this time that the Australian courts entertained suspicion, if not a dislike, of arbitration and treated it as an inferior jurisdiction that needed close supervision” (p 29). It was quite surprising to learn of this early intiative, at least for this reviewer immigrating to Australia from 2001, given that other State and federal legislators and courts have arguably been more influential in promoting arbitration in recent decades across Australia.[12] Generally, however, case law developments along with legislative enactments particularly since 2010 do indeed seem to have reduced inconsistencies and some possible “perception that Australian courts hindered effective commercial arbitration by being unduly interventionist in a number of ways” (p 92), not necessarily in accordance with the uniform approach to supporting arbitration promoted by the NYC and ML regimes.[13] Nonetheless, the commentary notes that “[c]ourt rules have tended not to keep pace with the legislative developments facilitating international and domestic arbitration in recent years” (p 93).

The remaining Chapters 3-11 cover the standard “life cycle” of a commercial arbitration filing, proceeding and award enforcement or challenge. Key principles, provisions and case law are clearly set out. Some of the longer extracts from judgments could benefit from paraphrasing or further contextualisation, and could mean that future editions of the book may be needed quite soon. Vexed issues in Australian arbitration law are almost all touched on, although sometimes without much detail or normative assessment of what the law should be. An example is the interaction with the Australian Consumer Law, impacting on many business-to-business transactions, which is gaining in importance for public policy (and hence potential challenge for arbitration agreements and especially awards) as law reformers now suggest adding pecuniary penalties for unfair contract terms and violating mandatory consumer guarantees.[14] In addition, keen readers may like to match up this book’s treatment of vexed issues with recent proposals for further law reform (underpinned by local or foreign case law, ML-based statutes and commentary),[15] assisted by the helpful index (pp 719-35) and Overview of sub-topics at the start of each chapter.

In sum, this book is very much recommended for practitioners, the academic community, and those considering amending rules and legislation around arbitration in Australia.


# Professor of Comparative and Transnational Business Law, University of Sydney Law School; Special Counsel, Williams Trade Law.

[1] Nottage, Luke R. and Dreosti, Julia and Tang, Robert, The ACICA Arbitration Rules 2021: Advancing Australia’s Pro-Arbitration Culture (September 26, 2021). Journal of International Arbitration, 38:6, 2021 (Forthcoming), Available at SSRN: https://ssrn.com/abstract=3931086

[2] https://www.cambridge.org/core/books/guide-to-the-uncitral-arbitration-rules/DE8790A3707F69031D72729CF6885104

[3] https://store.lexisnexis.com.au/products/australian-commercial-arbitration-2nd-edition-skuaustralian_commercial_arbitration_2nd_edition

[4] https://store.lexisnexis.com.au/categories/practice-area/dispute-resolution-amp-civil-procedure-790/the-international-arbitration-act-1974-a-commentary-3rd-edition-sku9780409348132/details

[5] Chapters 5 (pp103-21) and 7 (pp 137-48) in Nottage and Garnett (eds) International Arbitration in Australia https://catalogue.nla.gov.au/Record/4975990 (Federation Press, 2010)

[6] https://japaneselaw.sydney.edu.au/2020/08/book-in-press-with-elgar/

[7] Compare also the introduction to the procedural and substantive law principles in investment treaties in a commentary by three Australian authors, https://www.booktopia.com.au/international-commercial-arbitration-simon-greenberg/book/9780521695701.html?source=pla&gclid=Cj0KCQiA9OiPBhCOARIsAI0y71CxTtzSq5mzZYT7CAGcHwJpXlNGUoO2smpLT_3rixw1uEDsMTCb3qUaAnvqEALw_wcB. A new edition of that book is forthcoming from Kluwer, along with national reports on key topics including eg Luke Nottage and Nathan Eastwood, International Commercial Arbitration: An Asia Pacific Perspective – 2021 Australia Report via https://www.wolterskluwer.com/en/solutions/kluwerarbitration

[8] Dean Lewis, ‘The Interpretation and Uniformity of the UNCITRAL Model Law on International Commercial Arbitration: Focusing on Australia, Hong Kong and Singapore’ (Kluwer Law International, 2016); Nottage, Luke R., Deference of Seat or Foreign Courts to International Commercial Arbitration Tribunals Concerning Procedural Issues: Australia in Regional and Global Contexts (January 21, 2022). Available at SSRN: https://ssrn.com/abstract=4013970

[9] With that Note extensively cited in the extract from Subway Systems Australia Pty Ltd v Ireland (2014) 46 VR at 52-6.

[10] TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 at 566-8.

[11] Citing Minerology Pty Ltd v Western Australia [2021] HCA and Palmer v Western Australia [2021] HCA 31. These disputes involving State legislation nullifying commercial arbitration awards may lead to an international treaty arbitration claim: see Luke Nottage, https://theconversation.com/clive-palmer-versus-western-australia-he-could-survive-a-high-court-loss-if-his-company-is-found-to-be-foreign-145334

[12] For example, Queensland was the second-last jurisdiction in Australia to enact the new uniform Commercial Arbitration Act based instead on the ML (in 2013), and has had some case law on international arbitration attracting criticism from commentators and other courts: see eg Cargill International SA v Peabody Australia Mining Ltd [2010] NSWSC 887.

[13] For more detail on this transition, first in Hong Kong then Singapore, see also Lewis (n 8).

[14] See Treasury, “Strengthening protections against unfair contract terms” at <https://treasury.gov.au/consultation/c2021-201582> and “Improving consumer guarantees and supplier indemnification provisions under the Australian Consumer Law” at <https://treasury.gov.au/consultation/c2021-224294>.

[15] See eg Nottage (2021 Elgar = n 6) pp129-75, updating https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2393232; Monichino, Albert and Teramura, Nobumichi, New Frontiers for International Commercial Arbitration in Australia: Beyond the ‘Lucky Country’ (December 2020). New Frontiers for International Commercial Arbitration in Australia: Beyond the ‘Lucky Country,’ in Luke Nottage, Shahla Ali, Bruno Jetin and Nobumichi Teramura (eds), New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution. Wolters Kluwer (2020), Available at SSRN: https://ssrn.com/abstract=3946073

ANJeL Team Australia runners-up again in Tokyo moot competition!

The cross-institutional Team Australia has put in a great effort to come 2nd overall again at the 20th Intercollegiate Negotiation Competition held (remotely) “in” Tokyo. Pipped by the National University of Singapore, but ahead of the University of Tokyo. Well done also to Chulalongkorn University, where USydney also has close links, for coming fifth overall.

Congratulations to our law students Hasan Mohammad (who also won the ANJeL Akira Kawamura Prize for the Sydney Law School Japanese Law course last semester) and Sarah Tang (completing our International Commercial Arbitration course this semester)!

The teams from Japan and abroad hone and display skills in arbitrating disputes applying the UNIDROIT Principles of International Commercial Contracts, as well as negotiating and documenting a complex cross-border joint venture agreement. Team Australia won the Squire Patton Boggs prize for the best performance in the English-language round (also in 2018, when the Team came first), and won the ANJeL Prize for Teamwork (also won in 2019, when runners-up overall – as in 2020).

Terrific achievement given the extra stresses of lockdowns and other challenges for this year’s Team Australia students, mainly from USydney and ANU, as well as the difficult end-of-year timing. Unlike last year, Team Australia students were unable to meet in Canberra for a training weekend.

Many thanks for support from past mooters / graduates including our Stephen Ke, CAPLUS associate and former SLS RA / tutor Dr Nobumichi Teramura (now Assistant Professor at UBrunei), and especially coach and ANJeL advisor Prof Veronica Taylor from ANU. DFAT has also committed “New Colombo Plan” travel funding that we hope will become available next year so our students can compete in person in Tokyo.

More information can be found at https://www.teamaustralia-inc.net/ and https://www.negocom.jp/eng/.

Japanese and Asia-Pacific Dispute Resolution events over October 2021

Over this month I am pleased to contribute to three events regarding Asia-Pacific arbitration and dispute resolution. On 1 October, I am moderating a session on International Commercial Arbitration in Japan and Germany, at the comparative ADR conference hosted by Institute of Japanese Law at the FernUniversität in Hagen to commemorate the 30th anniversary of its online courses in Japanese law. The speakers are well-known lawyers Ms Yoshimi Ohara (Nagashima Ohno & Tsumematsu) and Dr Christian Strasser (HEUKING KÜHN LÜER WOJTEK). Other sessions compare investment treaty arbitration as well as mediation.

On 20 October I present two classes in a new postgraduate law course on international commercial arbitration developed for the University of Chile by Santiago-based lawyer and former USydney LLM student Ricardo Vasquez Urra, which we hope will be offered annually. This too draws on my recently published book on international commercial and investor-state arbitration, and parallels my co-teaching (with barrister Dr Anna Kirk) the LLM course on international commercial arbitration at the University of Auckland late last year and in 2022.

On 2 October, I present the module on consumer redress and access to justice for a new postgraduate intensive course on consumer protection developed by the University of Malaya. I highlight law and policy developments mostly by comparing Australia, Japan and Southeast Asia, building on books including ASEAN Consumer Law Cooperation and Harmonisation (CUP 2019) and Contract Law in Japan (Wolters Kluwer 2019, 2nd ed 2022), as well as other recent publications including Studies in the Contract Laws of Asia (especially Volume III, all reviewed here for the Journal of Japanese Law). We explore some law and practice around courts and tribunals, Ombudsman and related arbitration-like processes, mediation, and other processes for consumer redress.

P.S. On 26 October I also present on “Corporate Governance and Independent Directors in Southeast Asia” (focusing on Thailand and somewhat Malaysia) for a webinar on the Role of Independent Directors in Contemporary Asia, part of the Contemporary Asia International Forum Series 2021 at National (National Chung Hsing University) hosted by Professor I-Tzu (Edith) Su.

P.P.S. This marks the 250th posting on this Japanese Law and the Asia-Pacific blog, over more than a decade. Many thanks to occasional guest bloggers and all readers!

Asia ADR Week 2021 session on roles of in-house counsel [& ‘errors of law in arbitration’]

[Updates: A. Also in August 2021, I chaired a presentation via Monash University on “Errors of Law in Arbitration – Revisited”, with a recording here. Dr Benjamin Hayward argued that a tribunal’s application of a substantive law different from that expressly chosen by the parties, or not applying the conflict of law provisions of the seat (and any chosen Rules) where such substantive law is not expressly chosen, could constitute an error of applicable procedure and thus a ground for challenging the consequent arbitral award.

B. My co-authored article on the new ACICA Rules (mentioned at 7 below), including comparative references to Japan and other Asian jurisdictions, is available in manuscript form: Nottage, Luke R. and Dreosti, Julia and Tang, Robert, The ACICA Arbitration Rules 2021: Advancing Australia’s Pro-Arbitration Culture (September 26, 2021). Journal of International Arbitration, 38:6, 2021 (Forthcoming), Available at SSRN: https://ssrn.com/abstract=3931086

C. My co-authored article empirically examining the “formalisation” of international arbitration, and the diminishing influence of non-lawyers (or even in-house counsel) across key nodes of influence, is available in manuscript here (and shortened for a forthcoming Elgar book co-edited by Shahla Ali, Giorgio Colombo et al on “Sustainable Diversity in International Arbitration”): Nottage, Luke R. and Teramura, Nobumichi and Tanna, James, Lawyers and Non-Lawyers in International Arbitration: Discovering Diminishing Diversity (September 20, 2021). Available at SSRN: https://ssrn.com/abstract=3926914]

As part of the “Asia ADR Week” of events for 2021, coordinated by the Asian International Arbitration Centre based in Kuala Lumpur, as session was scheduled for the first day of the main conference – Thursday 19 August 4-5pm AEST (2-3pm KL time) – on the topic of “Starting In-House: The Role of General Counsel of Multinational Corporations in ADR”. [A recording is available on request for my USydney students.] Agreed session contributors were myself as moderator and:

  1. Ms Debolina Partap (Wockhardt Limited, general counsel based in Mumbai)
  1. Ms Esther Chow (Kone Elavator (M) Sdn Bhd, general counsel based in KL)
  1. Mr Nick Longley (Holman Fenwick Willan, based in Melbourne; formerly in a law office in Hong Kong as well as in-house for four years with a Japanese civil engineering company and now significant engagement with Korean firms)
  1. Mr Cameron Ford (Squire Patton Boggs, based in Singapore, and formerly in-house for over a decade)
  2. Mr Raymond Goh (China Tourism Group Corp Ltd, Group general counsel – International, in Hong Kong / China).

The assigned description was: “The role of an in-house counsel in shifting the focal point on dispute resolution from the traditional standpoint of litigation to the innovative vigor of ADR has resulted in the majority of Fortune 1000 companies preferring to use ADR as a means of resolving both international and domestic disputes. This session focuses on the multi-faceted role of in-house counsel in spearheading ADR as a principal means of resolving disputes.” The focus therefore was on evolving in-house counsel perceptions around Asia regarding alternatives to litigation (arbitration, mediation, other Alternative Dispute Resolution) to resolve cross-border disputes. Part of the backdrop is resurgent delays and especially costs in international commercial arbitration despite its continued spread east from the traditional (European then US) venues.

The first part of the session asked some general questions focused on our panelists currently or having worked extensively as in-house counsel [Ms Chow, Ms Partap, Mr Goh, Mr Ford]:

1. How do or should in-house counsel teams nowadays decide generally whether to provide for and/or engage in arbitration, mediation, expert determination or other ADR rather than cross-border litigation?

2. Does or should the approach change if the disputes involve commercial and government parties?

The second part of the session posed some more specific questions:

3. The latest QMUL international arbitration survey (with more than usual Asia-Pacific respondents) confirms the continued popularity of multi-tiered DR clauses, which commit parties contractually to try eg mediation before arbitration (rather than having waiting for the dispute to arise, and then try to achieve agreement to try other ADR before proceeding to pre-agreed arbitration). Yet are such multi-tiered clauses equally negotiated and invoked among companies and legal advisors in the Asian region? See http://www.arbitration.qmul.ac.uk/research/2021-international-arbitration-survey/ [cf eg Japan, Korea (Mr Longley), Malaysia (Ms Chow)]

4. Especially in the region, are there difficulties in enforcing say the mediation step (as a jurisdictional requirement say before being able to proceed to arbitration), and issues in determining the law applicable to that question? Cf eg this US report / chapter for a book / project by Profs Gu and Reyes: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3601337, and recent case law in Hong Kong etc (https://pulse.kwm.com/hong-kong/multi-tiered-dispute-resolution-clauses-what-happens-if-you-dont-comply/) [Mr Longley]

5. What prospects are there for more establishment and use of dedicated centres for mediation, especially in the Asian region (eg already Singapore / SIMC, but also recently Japan / JIMC and Vietnam / VMC)? See eg https://www.jimc-kyoto.jp/. Would it be easier for in-house counsel to promote cross-border mediation if institutional, rather than ad hoc?

6. Why is the 2019 Singapore Mediation Convention, aimed at facilitating enforcement of settlement agreements along the lines of the NYC, attracting many signatures (but not eg from Japan or Australia) but few ratifications? See https://uncitral.un.org/en/texts/mediation/conventions/international_settlement_agreements/status. What have been experiences in enforcing settlement agreements cross-border in Asia even without this new Convention?

7. Is there declining interest and practice of Arb-Med across Asia (except perhaps in mainland China and to a lesser extent Japan), linked perhaps to more use of separate mediation as part of multi-tiered DR clauses, and/or a sense that Arb-Med is not “global practice” which arbitration institutions and practitioners feel increasingly required to follow? Cf ACICA (for which Mr Longley and I served on the Rules drafting committee) which decided not to proceed with an Arb-Med provision in its 2021 Rules, although modelled on legislative provisions for domestic arbitrations: http://arbitrationblog.kluwerarbitration.com/2021/05/01/is-arb-med-un-australian/ [Mr. Goh]

8. Are there already or likely to be changes towards more use of mediation (either separate, or in Arb-Med) due to the pandemic, or eg has the enforced move to remote hearings etc created enough time, cost and arbitrator availability benefits to maintain adequate attractiveness for international arbitration? Is the recent rise of Expert Determination in Australian domestic dispute resolution driven by arbitration costs and delays in arbitration and litigation, thus likely to carry over into cross-border dispute resolution and beyond the pandemic? [Mr Longley, compared with say Malaysia – Ms Chow, and experiences from Singapore – Mr Ford]

Re-imagining the Japan-Australia (international arbitration) relationship

As a submission to the ANU’s Australia-Japan Research Centre project on “Reimagining the Japan Relationship”, funded by the DFAT-linked Australia-Japan Foundation, I have submitted the concluding chapter of my newly-published book: International Commercial and Investor-State Arbitration: Australia and Japan in Regional and Global Contexts (Elgar, 2021), which will be launched by Chief Justice Allsop of the Federal Court of Australia on 17 June 2021.

The book tracks the historical evolution of international arbitration, as the primary mechanism for resolving cross-border business disputes nowadays, in the direction of more globalisation but also more formalisation – reflecting in growing costs and delays. The COVID-19 pandemic has belatedly forced international arbitration mostly online, and new practices will likely persist as travel restrictions are eased (Part I). However, to maximise those possibilities and keep reducing costs and delays, there should be more structured and sustained bilateral cooperation between governments, law reform initiatives, arbitral institutions, judges, lawyers and academics (Part II).


Arb-Med for International Arbitration: in Japan, not Australia?

Active settlement facilitation by arbitrators in Japan, mirroring mediation by judges following the historically German/Austrian civil procedure law tradition, remains quite persuasive. This was evident from JCAA statistics analysed a decade ago by Prof Tatsuya Nakamura, prompting my commentary on this Blog (incorporated into chapter 4 of my new Elgar book, to be launched Thursday 17 June 2021 by Chief Justice Allsop of the Federal Court of Australia). Australia has also experimented with statutory Arb-Med provisions in New South Wales from 1990, and nation-wide from 2010 for domestic arbitrations under a more restrictive model, but Arb-Med has been far less popular in practice. The 2021 Rules of the Australian Centre for International Commercial Arbitration ended up not including Arb-Med provisions, but they were included (based largely on the 2010 legislation for domestic arbitration) in the September 2020 Consultation Draft Rules, so draft Article 55 reproduced below.

My analysis for the Kluwer Arbitration Blog (posted 1 May 2021) examines this topic in more detail. I suggest those draft Rule provisions could still be adapted anyway for individual contracts by parties and legal advisors (especially those from or familiar with Japan), other arbitral institutions (such as the JCAA) or legislators.

55. Mediation by an Arbitrator

55.1 An arbitrator may act as a mediator in relation to the dispute or a part of the dispute between the parties if each party has consented in writing prior to the arbitrator so acting.

55.2 If an arbitrator acts as a mediator, the arbitral proceedings must be stayed to facilitate the conduct of the mediation proceedings.

55.3 An arbitrator who is acting as a mediator:

(a) may communicate with the parties collectively or separately; and

(b) must treat any confidential information obtained from a party as confidential and for the purposes of these Rules, any information provided by one party to the arbitrator which that party: (i) has not provided to all the other parties; or (ii) has not expressly agreed can be provided to all the other parties, shall be treated as confidential.

55.4 If, during the course of any mediation, confidential information is obtained by the arbitrator and if the mediation terminates without a settlement of the entire dispute being reached, before recommencing the arbitration:

(a) the arbitrator must inform the parties if he or she has obtained confidential information during the mediation; and

(b) after so informing the party, the arbitrator must obtain the express written consent of all the parties before resuming to act as an arbitrator.

55.5 Following the termination of any mediation, no objection may be taken to the future involvement in the arbitration proceedings by the arbitrator on the grounds that the arbitrator acted as a mediator in relation to the dispute:

(a) if the arbitrator obtains the express written consent of all the parties to the arbitration required by Article 55.1; or

(b) if the arbitrator did not obtain any confidential information during the course of the mediation.

55.6 If an arbitrator has obtained confidential information during the course of any mediation and all parties do not consent to the resumption of the arbitration proceedings by the arbitrator, the arbitrator’s appointment is taken to have been terminated. Upon such termination, a replacement arbitrator is to be confirmed or appointed pursuant to the procedure by which the arbitrator being replaced was confirmed or appointed, except that:

(a) if there is a sole arbitrator, and if within [40] days of the parties authorising the arbitrator to act as mediator the parties have not reached agreement on the choice of a replacement sole arbitrator and provided written evidence of their agreed nomination to ACICA, the replacement sole arbitrator shall be appointed by ACICA with a mandate to commence upon termination of the appointment of the arbitrator who acted as mediator; or

(b) if there are three arbitrators, and if within [60] days of the parties authorising one or more arbitrators to act as mediator the parties have not reached agreement on the choice of one or more replacement arbitrators arbitrator and provided written evidence of their agreed nomination to ACICA, the replacement sole arbitrator(s) shall be appointed by ACICA with a mandate to commence upon termination of the appointment of the arbitrator(s) who acted as mediator.