NEW YORK STATE BAR ASSOCIATION INTERNATIONAL SECTION Seasonal Meeting 2017: Guatemala, September 2017 Track 1: Disputes Panel 7: Hot Topics in International Litigation and Arbitration A. Guerilla Tactics in International Arbitration B. Dublin, Ireland: Ideal Venue for International Arbitration David Barniville SC Dublin, Ireland
A. Guerrilla Tactics in International Arbitration 1. What are guerilla tactics? 2. Why are they a problem? 3. What measures exist to deal with them?
1. What are guerrilla tactics? International Arbitration Parties Party representatives / counsel Potentially several different jurisdictions Home jurisdictions of the parties. If different, home jurisdictions of the parties counsel. Seat of the arbitration Law governing the arbitration Home jurisdiction(s) of the arbitrator(s) - Different legal / professional / ethical rules applying to counsel: Potentially conflicting.
- Differences between common law and civil law jurisdictions on range of legal / ethical issues including (a) witness communications; (b) Document production / disclosure; (c) duty to bring adverse authorities to attention of Arbitral Tribunal; (d) ex parte communications with arbitrator(s) (e) attorney / client privilege etc. - Differences within common law jurisdictions ex US v England & Wales, Canada, Ireland. - Differences within civil law jurisdictions / Latin America countries (For ex: re witness communication). - Context: Rogers (2002) international arbitration is an ethical no man s land Born (2014) Rubik s cube of different ethical obligations.
Guerrilla Tactics - No common / accepted definition - Conduct which is: (a) Unlawful / unethical / abuse of the law or applicable procedural rules; (b) Intended to obstruct, delay, derail or sabotage the arbitration; and (c) Deliberate (conscious tactical decisions) - Can arise in private party arbitration and investor / state and state/state arbitrations. - Range from criminal conduct, unethical / unprofessional conduct to conduct explicable by different legal cultural backgrounds.
Criminal / Extreme Guerrilla Tactics (Taliban tactics): - Murder / imprisonment / kidnapping / assault / intimidation of arbitrator - Assault / intimidation / harassment of opposing party / witnesses - Wiretapping opposing counsel s meeting rooms - Corruption / fraud / bribery etc - Use of forged documents = Rare but do happen / are alleged in private / State arbitrations (ex. Timor Leste v Australia: allegations of bugging by Australia (withdrawn in 2017); Himpurna California Energy Ltd v Republic of Indonesia (1999) (one of arbitrators persuaded by agents of Respondent not to attend hearing); Qatar v Bahrain (2001) (use of forged documents)). Other Guerrilla Tactics: - Repeated frivolous challenges to arbitrator (often followed by frivolous court challenges).
- Abuse of document production - Persistent failure to comply with procedural orders / deadlines - Ignoring procedural orders / directions - Changing counsel at the last minute (Hrvatska v Slovenia (2008)) - Creating conflicts of interest - Raising excessive frivolous objections so as to run the clock at an evidentiary hearing - Making false statements of fact / submissions not supported by any evidence.
Others - Some borderline / potentially explicable by different legal cultures: - Ex parte communications with arbitrator (common law vs civil law / Chinese approach: cf US Code of Ethics for Arbitrators in Commercial Disputes). - Pre-testimonial communications with witnesses (common law vs civil law approach: cf some Latin American jurisdictions not prohibit such communications): But issue re extent of communications. - Document production/disclosure (ethical duties on lawyers re clients compliance with document preservation and disclosure contrast common law vs civil law approach).
Others where difference in ethical approach explicable by different legal cultures: - Disclosure of authorities that may harm case (required under many common law professional rules ex. Ireland, England & Wales, New York Rules of Professional Responsibility; but not under most civil law systems) - Making submissions on fact without evidence in support (permitted under some systems such as Saudi Arabia; Precluded under many). - Different approaches to cross examination / advocacy: Excessive objections / bullying cross-examination: American attorneys are often accused of interjecting excessive objections, bullying witnesses on cross examination, concocting creative interpretations of legal rules and strategically jockeying for procedural advantages. To their European counterparts, the American approach to arbitration total warfare is disruptive and counterproductive. American attorneys are often regarded as ungentlemanly if not barbaric It is worth noting, however, that while European arbitration specialists are frustrated with American excesses, they too are subject to criticism from Asian parties and attorneys for treating commercial disputes as a zero-sum gain and brazenly inflexible in negotiation and mediation processes (Various sources quoted by Prof. Catherine Rogers in :Guerrilla Tactics and Ethical Regulation, Guerrilla Tactics in International Arbitration (2013). - Zealousness / creative argumentation (style vs ethics).
2. WHY ARE THEY A PROBLEM? Guerrilla Tactics in International arbitration on the increase? 2011 Survey by Sussman and Ebere for American Review of International Arbitrations (2011): 68% had experienced guerrilla tactics. 2014 paper by Rivkin seeing such tactics more often. (2014 Seoul Arbitration Lecture: Ethics in International Arbitration ). May 2017, Law 360 interview with Elliott Polebaum arbitrators increasingly having to respond to the guerrilla tactics of overzealous counsel and that such tactics seem to be on the rise lately.
Why? High stakes: New entrants: non-application of some professional rules of conduct to international arbitration (cf position in Ireland, England & Wales and New York): lack of binding / coordinated approach. Lead to delay / disruption / increased costs. Unfair playing pitch for counsel subject to different ethical rules to their opposing counsel. Counterproductive - Where sanctions are available - Adverse inferences - Bounce of the ball.
3. MEASURES TO DEAL WITH GUERRILLA TACTICS What ethical rules should apply? Who should enforce them? - National bar associations / regulatory bodies? How practical / effective? - Arbitral Institutions? Rules. - Arbitral Tribunals? But depends on rules / scope of powers. Most extensive / serious guerrilla tactics not a matter of ethics but breach of the criminal / civil law: cf State involvement; which jurisdiction applies? Answer obvious for dealing with most of these tactics: Arbitral institutions adopt rules to be applied to all arbitrations under those rules to be applied by all Arbitral Tribunals applying those rules. Rules will apply as a matter of contract.
Some arbitral institutions / other bodies have acted: - IBA Guidelines on Party Representation in International Arbitration (2013). - IBA Rules on Taking of Evidence in International Arbitration (2010). - IBA Guidelines on Conflicts of Interest in International Arbitrations (2014) - LCIA Arbitration Rules (2014) with Annex: General Guidelines for the Parties Legal Representatives. - AAA International Centre for Dispute Resolution: International Dispute Resolution Procedures (2014) Standards of Conduct for Parties and Representatives (2014). Rules of some arbitral institutions give wide power to impose sanctions (including costs): ex ICC; LCIA; ICDR; SIAC.
IBA Guidelines on Party Representation in International Arbitrations (2015) - Application depends on agreement of parties or determination of arbitral tribunal (but on what basis?) - Deal with many of the ethical issues generally lean towards common law approach. - Not displace applicable mandatory laws, professional or disciplinary rules. - Guidelines 4 6: Party Representation (of Hrvatska; Compare with Romperol v Romania (2010)) - Guidelines 7 8: Communications with Arbitrators (Prohibited except in very limited circumstances) - Guidelines 9 11: Submissions to Arbitral Tribunal (not make knowingly false submissions of fact: duty to correct etc).
- Guidelines 12 17: Information Exchange and Disclosure (need to advise client re preservation of documents; advice re reasonable searches; advise re non production of documents). - Guidelines 18 25: Witnesses and Experts (contact permitted; can assist in preparation of witness statements and expert reports; can meet to discuss and prepare testimony: some issues not resolved coaching). - Guidelines 26 27: Remedies for misconduct (misconduct = breach of Guidelines and any other conduct arbitral tribunal determines is contrary to duties of party representative: Remedies include admonishment; drawing adverse inferences; apportioning costs etc). - Issues: Application of Guidelines; Not address some areas (ex privilege / confidentiality; submissions / duty to disclose negative authorities).
LCIA Rules / Annex General Guidelines for the Parties Legal Representatives (2014). - Binding for arbitrations under LCIA Rules (A 18.5) - But short and very general (7 paragraphs). - Not displace mandatory laws / professional rules / codes of conduct - Preclude legal representatives (a) making repeated unfounded challenges to jurisdiction / authority of Arbitral Tribunal (paragraph 2). (b) Knowingly making false statements (paragraph 3). (c) Knowingly procuring or assisting in preparation of false evidence (paragraph 4) (d) Knowingly concealing documents (paragraph 5) (e) Making unilateral contact with members of Arbitral Tribunal (paragraph 6)
LCIA Rules - Arbitral Tribunal may withhold approval of change of legal representatives (A 18.4). - Arbitral Tribunal may impose sanctions (A 18.6) including reprimands, conditions, any other measure (including costs allocations). AAA ICDR Rules and Standards of Conduct for Parties and Representatives (2014) - ICDR Rules require party representatives to comply with ICDR guidelines (A. 16) - ICDR Guidelines = Standards of Conduct for Parties and Representatives: - quite general - deal expressly with guerrilla tactics (unmeritorious steps, tactics, frivolous actions, harassment, threats of evidence etc). - Wide discretion re costs (A 34).
Rules of other arbitral institutions confer wide powers re costs allocation ex ICC, SIAC etc. Examples of sanctions / remedies: Hrvatska v Slovenia (2008) (ICSID) (prohibiting addition of counsel) (cf Romperol v Romania (2010) (ICSID) (refusing to prohibit counsel acting) Pope & Talbot v Canada (2000) (UNCITRAL / NAFTA) (costs sanction for breach of privilege / confidentiality) Victor Pey Casado v Chile (ICSID) (costs sanction for ex parte contacts with one of arbitrators).
- Need for Arbitral Tribunals to clamp down on conduct; ensure same rules apply to both sides; tie down applicable rules at the outset; enforce those rules.
B. DUBLIN: IDEAL VENUE FOR INTERNATIONAL ARBITRATION Dublin: excellent alternative to (complementary to) long established arbitration centres such as London, Paris etc. English speaking jurisdiction Common law Member of European Union Accessible Neutral politically Irish diaspora in US etc.
Independent judiciary (No. 6 in World Economic Forum: Global Competitiveness Report (2014 2015). Modern arbitration legislation: Arbitration Act, 2010: - Implements the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards. - Adopts the UNCITRAL MODEL LAW (2006) for international and domestic arbitrations - Reflects best international practice. Very limited grounds for challenge to arbitral awards in Irish Courts; No appeals to court on points of law.
Pro-arbitration judiciary; specialist arbitration High Court judge; one-stop shop for (limited) challenges with no appeals; speedy determination of challenges; narrow approach taken to public policy challenges. 2010 Act respects parties agreement re costs (including prior agreement that each side bear its own costs) (Contrast with English Arbitration Act, 1996). Dedicated arbitration centre: Dublin Dispute Resolution Centre supported by the Bar of Ireland Other reasons.
THANK YOU.