Arbitration Ireland. report on A Gathering of the Irish International Arbitration and Commercial Law Diaspora arbitrationireland.

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1 Arbitration Ireland report on A Gathering of the Irish International Arbitration and Commercial Law Diaspora 2013 arbitrationireland.com

2 On Friday, 22 nd November 2013, at the Dublin Dispute Resolution Centre, Arbitration Ireland welcomed 85 colleagues and distinguished guests for a conference aptly named: A Gathering of the Irish International Arbitration and Commercial Law Diaspora. It was particularly heartening to see such a warm and positive response from colleagues who had travelled from the United Kingdom, mainland Europe and the United States to participate in the conference. Proceedings commenced with an Opening Address from the President of Arbitration Ireland, Michael Carrigan of Eugene F. Collins, who welcomed the delegates and explained the rationale behind the conference, indicating that he hoped it would be the first of many! Report on Arbitration Act 2010 The first panel of speakers comprised Paul Gallagher SC, Gillian Cahill BL and Barry Mansfield BL, who gave a three year report on developments under the Arbitration Act, 2010, which was chaired by Ciaran Fahy, Consulting Engineer and Chairman of the Dispute Resolution Panel of Engineers Ireland improvements that the new Act has brought to the arbitral process within Ireland. He also considered some of the seminal decisions rendered under the 2010 Act, and highlighted the deference which the Irish Courts show to the arbitral process. Barry Mansfield BL focused on Article 8 of the Model Law, and in particular on the appropriate standard of review to be applied when making a determination on the validity or otherwise of an arbitration clause by the Irish courts, and the judgments delivered in that area, such as Barnmore Demolition v. Alandale Logistics. He also considered the Article 7 requirement that agreements be in writing, and the broad interpretation given to that article by the High Court in Mount Juliet Properties v. Melcarne Developments. Gillian Cahill BL concluded the session with a fascinating paper, which considered Irish jurisprudence in light of developments abroad in other Model Law jurisdictions. Gillian observed that not only were Irish courts being influenced by case law from those jurisdictions but Irish arbitration law was itself beginning to have an impact internationally. Paul Gallagher s expertise in the area is well known, with the Arbitration Act 2010 being enacted during his tenure as Attorney General. He very eloquently outlined the impetus for change to the pre-existing legislation, and the Arbitration in Particular Sectors After a short tea and coffee break, Michael Carrigan chaired session two, which dealt with arbitration in specific sectors. Arbitration Ireland was privileged to welcome Mark Appel, Senior Vice President of the ICDR, Andrea Carlevaris, Secretary General of the ICC in Paris, Ruth Byrne of King and Spalding, Pierre-Yves Tschanz of Tavernier Tschanz, Geneva and Ed Riley of Avolon Aircraft

3 Leasing. Each speaker dealt with a different aspect of the area, which gave the audience a fascinating look at a number of different sectors. Mark Appel commenced by speaking on the topic: how prevalent is international arbitration in particular sectors? He highlighted the distinct advantage arbitration has over litigation in sector specific disputes, which is the ability to appoint an expert in that area to hear your dispute. The ability to use a private dispute resolution system also has the benefit of preserving what he termed strategic commercial relationships and is thus a very attractive route for commercial entities to choose. Andrea Carlevaris considered the topic: do different sectors require different forms of arbitration clause and different procedures? Andrea pointed to a few very specific sectors, such as investment arbitration, quality arbitration (particularly in the area of commodities) and sports arbitration where the specific characteristics of the sector justified a separate regime. Beyond that, under the general umbrella of international commercial arbitration, in his view a more generalistic approach to rules and procedures could be taken, particularly where the ICC was concerned. Of more crucial importance, was ensuring that the correct candidate be chosen as arbitrator, which is a task that most arbitral institutions successfully achieve. Ruth Byrne examined the question whether arbitral institutions meet the needs of different sectors or whether sector tailored ad hoc arbitration was preferable in some sectors. Ruth looked at a number of different sectors and the innovations provided by sector specific institutions in their rules. One recurring theme within these innovations related to the speed of the process. This was evident when considering the energy sector, and institutions such as FOSTA and GAFTA, maritime disputes administered by the LMAA, or the P.R.I.M.E. Finance Arbitration Rules published in Ruth considered statistics from sectors within which arbitration was not prevalent, and noted that cost, speed, absence of appeal and absence of a summary procedure were some of the disincentives to parties within those sectors rather than the lack of a specific arbitral institution and/or rules. Pierre-Yves Tschanz then considered whether arbitrators should be specialists in the particular sector of the arbitration or whether there were any advantages to being a general arbitrator. In Pierre-Yves opinion, while there is certainly no hard and fast rule, there are two powerful factors weighing in favour of specialist arbitrators. Firstly, from a party s perspective ensuring that their arbitrator is capable of grasping the complexities of their dispute in a potentially niche area. And, secondly, from the arbitrator s view ensuring that it is cost effective to be able to undertake a dispute in which they have little or no expertise, and thus will be required to expend significant time becoming such an expert in order to render their award. The second session was wrapped up by Ed Riley, who looked at the role of in-house counsel in the aviationleasing sector. Ed outlined how commercial sensitivity within contracts led to arbitration becoming a preferred form of dispute resolution within certain areas of aircraft leasing, along with the technical nature of the dispute and the availability of an expert arbitrator being an advantage. Finally, he outlined how joint venture agreements are becoming more prevalent in aviation leasing and arbitration is certainly the preferred form of dispute resolution within those contracts. EU Free Trade Agreements and Investor-State Arbitration After lunch, the Conference continued with an extremely topical session on Investor-State arbitration and, in particular the likely future importance of arbitration in the context of EU Free Trade Agreements. Colm Ó hoisín SC began the session with an overview of Investor-State arbitration, summarising the Washington Convention 1965 and explaining the role of ICSID and the growth of Bilateral and Multilateral Investment Treaties (BITs and MITs) and the increase in volume of Investor- State Arbitrations arising out of those agreements, with 50 such cases being filed with ICSID in Whilst Ireland has had little exposure to Investor State Arbitration up to now, having only ever entered into one BIT, the position was likely to change as a result of the coming into force of the Lisbon Treaty. Article 207 Treaty on the Framework of the European Union (TFEU) now vests exclusive competence in the EU to conclude tariff and trade agreements with third countries, including in respect of foreign direct investment. The Free Trade Agreements that the EU is negotiating will typically include Investor Protection Chapters and provision for Investor-State arbitration and will create the potential for companies that invest in Ireland to submit disputes with the State to arbitration. Equally Irish companies investing in third countries will have the potential to bring their disputes with the host state of their investment to arbitration. Article 207 necessarily raises the issue of the continued validity of intra-eu BITs.

4 The next speaker of the afternoon, Norah Gallagher, Senior Lecturer at Queen Mary University of London, addressed the power struggle that has arisen over the approximately 200 intra-eu BITs that are currently in existence. The European Commission has taken the view that there is no need or place for intra-eu BITs that are an anomaly within the EU internal market. Most of the BITs provide for recourse to international arbitration, and the Commission considers that arbitral tribunals should not have any power to hear disputes arising within the EU. The Commission has intervened in a number of arbitrations, including Eastern Sugar BV v Czech Republic SCC Case No. 088/2004, Binder v Czech Republic UNCITRAL Award 6 June 2007, and Achmea BV (formerly Eureko BV) v Slovakia UNCITRAL, PCA Case No So far, no arbitral tribunal has disclaimed jurisdiction but it will be interesting to see if the Eastern European countries succeed in their efforts to bring the matter before the ECJ for determination. The coming into force of Article 207 TFEU also raises issues in relation to the resolution of future disputes that arise under any treaty negotiated by the EU on behalf of the member states. Who is the proper respondent to a claim, the State or the EU? Who bears financial responsibility for the claim? And who has control of the claim, including settlement? This was the focus of the final speaker of the session, David Herlihy, a partner in Skadden s international arbitration group based in London. David examined the provision of the Draft EU Regulation establishing a framework for managing financial responsibility linked to investor-state dispute settlement tribunals established by international agreements to which the European Union is party. Panel Discussion on Dublin as a Seat The Conference ended with a lively panel discussion on the development of Dublin as a seat for international arbitration. Arbitration Ireland was delighted to have Michael Collins SC, John L. Gardiner (partner at Skadden, New York) and Klaus Reichert SC (Brick Court Chambers, London) participate in the discussion chaired by Mr Justice Frank Clarke of the Supreme Court of Ireland. It was generally agreed that Ireland has in place all of the necessary building blocks to establish itself as a centre for international arbitration: we are a neutral Englishspeaking country with a state of the art arbitration law, cutting edge facilities and an excellent pool of expertise. One of the key pieces of advice that emerged from the discussion is that Arbitration Ireland should keep the international arbitration world informed of the jurisprudence from the Irish courts. The Irish courts are extremely supportive of arbitration and the decisions that are coming down in relation to the Arbitration Act 2010 are in line with international best practices. An important task for Arbitration Ireland in the coming months and years will be to publicise the important decisions being made here to both the international arbitration community and corporate counsel in corporations worldwide. Arbitration Ireland was delighted with the success of the Conference, and in particular thanks our international diaspora for their attendance and valuable contribution to all the day s sessions. The materials presented at the conference will be available in the Member s Section of the Arbitration Ireland website: The Association is already planning the next conference for Friday, 7th November 2014 and we hope to see you all there. We welcome expressions of interest from anyone who might wish to contribute at the Conference.

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