Colin Ong QC, Dr Colin Ong Legal Services
This is an extract from the fourth edition of GAR’s The Guide to Advocacy. The whole publication is available here.
One cannot underscore enough the importance of effective advocacy on the prospects of success of any international arbitration matter. However, before one can even start preparing for written or oral advocacy, one needs a proper road map and strategy setting out how one would like to deal with the case. Experienced and successful lead counsel will all agree that, in the conduct of international arbitration, it is difficult to overstate the importance of spending time thinking about and preparing a good case strategy at the outset. It is important to note that, while case strategy, investigations and case preparation activities are not advocacy, they do have a very close interaction with advocacy and a direct impact on what advocacy options are open to counsel. As such, one can say that, without proper case strategy and efficient case preparation, counsel is unlikely to get to the stage where he or she can effectively carry out oral and written advocacy.
Counsel with a well-thought-out case strategy will be in a better position to avoid and evade any traps or pitfalls on the journey to the final hearing. The case strategy is the road map and acts as a counsel’s secret means of guiding his or her team towards a successful preparation for good written and oral advocacy. Without a proper case strategy, there is no road map for the legal team to know where they have to go, and counsel is likely to get distracted along the way before he or she realises that his or her team and client will become the losers in the arbitration. A good case strategy and proper preparation to lay down the groundwork for effective oral and written advocacy is, therefore, absolutely essential to the proper handling of an arbitration from the time of the notice of arbitration right through to the end of the final hearing.
The golden rule – know your tribunal
The golden rule of advocacy should be: help your tribunal. And in order to achieve this, first and foremost, an advocate should know its arbitrators and try to understand how they will approach the case.
Although most arbitrators share similar ways of approaching the procedure, different cultural backgrounds and distinct methodologies may affect the outcome. But, at the end of the day, any arbitrator will look for a narrative and an analytical framework that makes sense of the facts, is consistent with the legal rules applying to the substance, and does not offend a sense of fairness. It is therefore vital for an advocate to place himself or herself in the arbitrators’ shoes, and try to think as they likely will.
Don’t fall in love with your case
I remember, in my first years at the Bar, an old colleague telling me what he saw as the three fundamental rules of a trial lawyer: don’t believe what your opponent says, don’t believe what your client says, and above all, don’t believe what you say. There is, of course, a part of irony in this, but a good advocate should never fall too much in love with his or her case. A good dose of scepticism and self-criticism may sometimes improve your advocacy.
Be the first to be clear
The second way of helping your tribunal is to keep your arguments as simple and focused as possible. Many complex cases boil down to three or four decisive questions. The party who first manages to convey its arguments on those key issues in a clear and structured way will take a considerable lead in the arbitration. It is as a consequence important not to weaken a party’s core arguments with the many peripheral questions that will inevitably arise, and to which the arbitrators will pay little, if any, attention.
Don’t underestimate the importance of the hearing
A good advocate should also be mindful that an arbitrator’s learning curve is very different from that of a counsel. There are key phases in the procedure, such as the evidentiary hearing, at which the arbitrators’ views on the case will start crystallising, and it is important that by then an advocate has been able to convey a structured and coherent vision of the case that, ideally, a tribunal could adopt almost in its entirety to make its award. Serge Lazareff once said that he used to write his awards on the documents, but that he made his decision at the hearing, and there is some truth in that. Advocates should bear that in mind when deciding whether they should request closing arguments, post-hearing briefs, or both. Duplications of arguments, rhetoric and aggressive language, from that perspective, can only hurt a party’s case. A wise advocate will always be able to explain the most complex concepts in the simplest terms, and will at all times be courteous, pedagogical and mindful of the necessity not to waste the tribunal’s and the opponent’s time.– Alexis Mourre, Independent arbitrator
While advocacy itself is an elusive art that is usually inborn for lawyers, there are ways to improve one’s advocacy techniques over time. The art of strategy is even more complex, as it embodies a number of other skill sets, including the need for a mastery of the applicable law in the specific fields of law that surround the dispute. It requires deep analytical and logical reasoning, a mastery of the arbitration rules of procedure and a good case presentation methodology. It will also include the need to have full understanding of the applicable law and how the arbitrators and opposing counsel are likely to operate. The background training and experiences of a lawyer are very likely to influence his or her individual perception as to how advocacy should be conducted. The lawyer’s perception as to the proper sources of law and how he or she should present a client’s evidence and the legal reasoning will also generally determine the style of advocacy that he or she will deploy in the arbitration process arguments.
Common lawyers who are trained to rely upon doctrine of stare decisis and case precedent will have very different views and techniques of legal reasoning and presentation from their civil law counterparts, who will often be better skilled in the technique of jurisprudential reasoning, the pairing of statutory material and academic jurisprudence. They will also be used to the system of iura novit curia, which allows parties to a legal dispute to assume that the court or arbitral tribunal is familiar with the law that is applicable to their case. Lawyers who are trained in the common law system generally are taught to put a lot of emphasis in the oral presentation of their case submissions; base their legal reasoning on precedence, cross-examination and re-examination of witnesses; and excel at putting their factual and legal case orally to the arbitrators. Conversely, lawyers trained in the civil law system accord far greater deference to reliance on documentary evidence and upon the expected role of the arbitrator to put questions to the witnesses. This means that civil law advocates tend to have a lot more experience in perfecting their written advocacy. They will generally have had a lot of experience with cases that require them to put together well-thought-out written briefs that tell the story to the tribunal. It also means that they are less likely to have built up tens of thousands of hours of oral advocacy experience in developing the techniques of cross-examination and oral submissions that are second nature to common law lawyers.
Because of the confluence of civil and common law in international arbitration, the art of strategy and preparation for effective advocacy is likely to be the most difficult and sophisticated stage for counsel. It requires the widest range of skill sets and will often require a lot of experience and practice in appearing before both civil and common law tribunals and against opposing counsel from both systems of law.
When should the preparation of a case strategy begin?
The preparation and development of a case strategy should begin after one has learned the initial facts of a case, seen the key documents, conducted initial interviews with potential witnesses of fact, and conducted informal investigations on the factual and legal bases of the case. Counsel should formulate their overall case strategy very carefully at the outset, as this will eventually lead to favourable conditions for them to apply their advocacy skills. The case strategy will be the bedrock on which successful conditions for advocacy can be developed. A good overview case strategy will also allow counsel to carry out a proper investigation and preparation of facts and legal principles necessary for the case memorials. A good case strategy will also enable counsel to initiate a favourable case management protocol with the tribunal and, if all goes well, it should lead to favourable conditions for counsel to apply their oral and written advocacy skills.
A well-thought-out case strategy at the outset will provide the necessary guidance for all essential actions that will need to be dealt with in arbitration. These include collating initial documentary evidence; investigating the facts and legal issues involved; selecting and interviewing the best witnesses to assist in building the case; preparing solid written advocacy essentials such as memorials; producing an effective opening submission; determining which exhibits are to be relied upon for the purposes of preparing one’s witnesses and cross-examining the opposition; carrying out oral submissions at the hearing; and preparing solid post-hearing written submissions.
While one should develop a good initial case strategy, it will sometimes become apparent that the presentation of additional facts through oral and documentary evidence requires the development of the case strategy. The case theory of the arbitration may have to be revised and may be in a slower state of evolution and require to be updated, as more relevant and material information becomes available to counsel. While one can make adjustments to one’s case strategy and allow some flexibility, one must not have any form of strategy that is purely reactive in nature or is being developed as the arbitration proceeds. Such a reactive case strategy will be a sure way to place the legal team and its client at a strategic disadvantage. Anything short of a consistent and clear strategy towards certain key goals will undermine one’s overall chances of winning the arbitration. Shortly after the initial first meeting with a client, counsel needs to be able to advise his or her client as to how to he or she proposes to deal with the dispute.
Good investigative skills assist in the preparation of the case
The planning of the case strategy goes hand in hand with the need to prepare the case as it unfolds, from the time counsel is first instructed to the time that memorials are filed, and long after. Counsel need to have good investigative skills and know how to look for evidence, collate oral and written evidence, and select and interview witnesses, in addition to conducting legal research on the case. Counsel need to know how to investigate any factual allegations made by the opposing party. Counsel need to try to find out the legal basis of the opposing party and how to manoeuvre their case so as to derail their opponent’s own case strategy. It is important to know what type of expert witnesses may need to be instructed.
When should one begin investigation and case preparation?
The case preparation needs to begin at almost the same time as the first investigation into the key issues surrounding the dispute. Unless and until counsel has a clear feel of the issues at stake and the historical facts that may support the case theory, it will be extremely difficult, or even impossible, to develop any kind of meaningful case strategy that can withstand the pressures of the arbitration process.
Counsel will often be given a lot of documentation and told a lot of background information by their clients. They need to make quick decisions to separate and sort out the relevant material and important issues at the outset. It will otherwise be extremely difficult for counsel to make any crucial decisions as to the path to be taken and the interlocutory procedures that they will need to apply in the course of the arbitration. At these initial stages, there is often a struggle between solicitors and in-house lawyers on the one hand, and counsel on the other, as to the necessity of the expenditure on investigation. In cases involving larger claims, it is easier for counsel to persuade solicitors and in-house lawyers to conduct an early investigation into the facts of the case. While early investigations will often add additional costs early on, experienced counsel will agree that, on average, one finds that this early expenditure on investigation can lead to a significant reduction in legal and expert fees later on in the arbitral process. Such a step also tends to lead to a more manageable and advantageous arbitration procedure, which will then allow counsel to perform oral and written advocacy at the best possible levels and hopefully lead to a successful award in favour of the client. An early investigative process will almost always facilitate counsel’s decision as to how his or her written submissions should be structured.
An early investigative process will also generally allow counsel the benefit of the critical facts at hand. When acting for a claimant, knowledge of these facts will allow counsel to assist his or her client to draft and send out pre-arbitration letters giving notice to the opponent setting out the relevant facts and legal principles in his or her favour for the purposes of an advantageous costs award at the end of the hearing. When acting for a client who is a respondent, counsel will also need to get all the relevant facts out and interview witnesses as soon as possible before the party files any answer to any notice of arbitration. It is essential that counsel are able, within the procedural time frame, to set out a convincing answer, defence and any counterclaim as fully as possible to provide a convincing introduction to the tribunal. For case strategy to work to its full advantage, it is essential for counsel to be able to set out and frame a case in the way in which he or she wants the tribunal to understand and accept it. A better understanding of the case and a good interaction between counsel and a tribunal often leads to a higher likelihood that the tribunal may be more willing to accept the procedures that counsel is likely to propose along the way.
Key factors to consider for the proper preparation of a case strategy
When one is first developing a case strategy, it is essential to fully understand the factual theory of one’s own planned case and the development of the legal theories in support of it. However, it is equally essential to understand and anticipate the factual evidence that supports the case of the opposing party and anticipate the possible legal theories that the opponent will be likely to deploy to support its own case. To a more limited extent, it will also be important to try to understand where the opposing law firm is incorporated or established, as law firms and counsel from different jurisdictions are subject to different bar and law society ethical rules. Such rules can significantly affect how different counsel may prepare their case strategy for oral and written advocacy. A later section of this chapter deals with this aspect of case strategy.
The initial stage of preparing case strategy in arbitration is for lead counsel to take a step back to have an overview of the underlying structure of the commercial relationship between the parties. While disputes can take place between parties in any business, it is not always immediately obvious to third parties, including lawyers, what the parties are actually disputing. In the majority of cases, the crux of the dispute tends to be about whether or not a party is in breach of contract or failing to perform certain obligations under the contract. However, it is important for counsel to ask his or her instructing party whether there may be other submerged disputes, including a dispute about how a business is to be run or even direct or indirect control of the business itself. Counsel needs to know if his or her client is still doing business with the opponent on other matters and if the client would like to maintain an amicable relationship after the arbitration has taken place. Counsel needs to know if there is any particular interest for the parties to continue doing business on other businesses that may not form part of the matters in dispute in the arbitration. Counsel needs to know if the parties have reached a stalemate position in which all goodwill has already broken down and the parties will remain irreconcilable. This is an important part of how the case strategy is to be developed, as counsel needs to advise his or her client on possible hostile legal steps and any interlocutory actions that the parties may seek to employ against each other.
The arbitration clause – stick or twist?
One of the first questions to be asked is whether the parties to the arbitration really should stick with the arbitration provision on which they had agreed when entering into their contract. The contract in issue in a $2.5 billion case in which I sat as a co-arbitrator had provided for ICC arbitration, with the ICC Court to appoint all three arbitrators. When the dispute arose, however, both sides, a Fortune 50 US company with various joint ventures with the respondent state, decided to scrap the arbitration clause in their contract. Instead, they agreed that first they would choose together a tribunal president, then, with both sides having knowledge of that choice, the parties would proceed to appoint their party-appointed arbitrators simultaneously, but without knowledge of the other party’s appointee. Not surprisingly, both co-arbitrators knew the tribunal president well. In the end there was a unanimous award for the claimant for the requested $2.5 million, including interest. The parties soon agreed to immediate payment of the award, minus the substantial interest, and their other joint ventures continued.– Charles N Brower, Twenty Essex Chambers
Parties that have an ongoing relationship in other matters or a long-term business relationship that is expected to continue into the future tend to want to manage hostilities and conduct the arbitration in a more restrained and less aggressive manner. Counsel should always bear in mind that there is no single best way to conduct the practice arbitration. Unlike court litigation, which is centred heavily on strict rules of court procedure, arbitration is flexible and offers a lot of room for counsel to tailor-make the dispute resolution process to deal with the core issues of the dispute.
What other elements should form part of a good case strategy?
Each legal team that handles a case has one main goal: to win the case. It needs to be able to persuade the arbitral tribunal that the merits of the case are in its client’s favour. Counsel will only be able to do this with a good case strategy that showcases his or her own merits and strengths while undermining the case of his or her opponent. Counsel also needs to make a decision as to the client’s desired end result. In the event that the client has other existing relationships with the opponent and wishes to continue to do business regardless of the outcome of the arbitration, counsel needs to be able to navigate the arbitration proceedings in such a professional way that the disputing parties will not be pushed beyond the point of no possible reconciliation after the arbitration. Conversely, if the dispute is between joint venture partners who absolutely cannot work together any more, counsel will need to decide at the outset whether a successful award will actually settle the situation or whether it will remain a paper victory only and leave the parties still disputing within the business or company.
At the outset of being instructed by solicitors or by in-house counsel, before one can shape the case strategy and decide on the style of case preparation, one needs to look at the choice of law, choice of language and seat of the arbitration. These three practical legal factors will decide which arbitrators are to be appointed and define how the case is likely to be run. Counsel will need to know how the majority of the tribunal is likely to allow the arbitral proceedings to be run and will need to anticipate what recourse one could get from the tribunal under the law of the seat of the arbitration.
Counsel will need to be able to anticipate whether or not the opponent will be likely to approach the case head on or whether it is likely to seek to take out additional interlocutory applications as part of his or her strategy in building the case.
Counsel will need to decide from the outset whether or not it may decide to make an application to bifurcate or even trifurcate the arbitral proceedings. One should already be preparing the list of issues involved in the case and continue to work on defining the issues as more evidence comes to light.
Counsel will need to be able to anticipate whether he or she has adequate documents at hand, and whether he or she or his or her opponent is likely to be seeking interim relief from the tribunal. Counsel needs to anticipate the likelihood of his or her opponent or even himself or herself making applications to the tribunal on jurisdictional challenges or other applications that may be critically important for one party but extremely disruptive to an opponent. These may include the likelihood of challenges being made against arbitrators personally or against the jurisdiction of the tribunal; the likelihood of any applications for security of costs; anti-suit injunctions; preservation orders; emergency arbitration proceedings; applications for onerous US-style document disclosure productions; and other lesser-used strategies, such as one side obtaining assistance from the authorities of the seat of arbitration. In the event that one side has a strong relationship with the authorities in any country that has a questionable reputation with its police and security forces or immigration authorities, one can also expect all sorts of problems being made for one’s witnesses, legal team and expert witness team.
Important points should be raised with the opposition early on for consideration of costs
In the earliest stages of any arbitration, a key factor of any decision-making process in case strategy must be the financial status of the client. Counsel needs to know the case that the client needs to prove and the avenues that remain available to the client. Counsel needs to work very closely with the client at the outset of being instructed and ask for the client to set out his or her key priorities and desires. Counsel will need to be able to engage the client and explain any limitations, such as costs and loss of time. Counsel needs to know if the client is prepared to settle and, if so, on what commercial and financial terms.
The issue of costs is often overlooked at the beginning of an arbitration. Even if one is acting for a party with very deep pockets, it is important for counsel to emphasise to his or her instructing solicitors and client that the costs estimates for any arbitration are simply estimates and not an absolute limit. Clients ought to be informed at the outset and reminded throughout the arbitration process that they will need to keep enough funds to see the arbitration to an end. As part of case strategy, it is important to try to anticipate whether or not opposing counsel is likely to try to deliberately engage in guerrilla tactics as part of their strategy to wear down the opponent both in terms of excessive expenditure of fees, costs and time. Most, but not all, guerrilla tactics are carried out to either force a settlement agreement or derail the arbitration.
Possible guerrilla tactics that counsel needs to factor in for costs
As part of case strategy and case preparation, it is important for lead counsel to consider whether he or she fully understands the rules of the game. Matters of procedure in international arbitration are not set out in any common statute, rule or code. The UNCITRAL Model Law has been adopted in whole or in part in many countries and has gone a long way towards providing guidance on the fundamental principles of the arbitral process and what it is intended to achieve. However, the final procedures that are adopted in any arbitration differ from one arbitration to another depending on the nature of the dispute, the applicable procedural law (often the law of the seat), any institutional rules adopted, the background of the arbitrators, and the counsel themselves.
There have been many discussions about the subject of ‘guerrilla tactics’ in international arbitration. It is important to note that guerrilla tactics may not always amount to any violation of laws or procedural rules of arbitration, although there are a few that are readily and universally considered unethical. However, it is also important to remember that different counsel from different jurisdictions and countries have their own set of bar rules, law society rules and court ethical guidelines to follow. There are constant heavy intellectual debates as to whether there is a need for regulation of counsel conduct in international arbitration and, if so, whose standards should be applicable. One can see that powerful arbitration bodies are at loggerheads with each other, not just over some of the provisions of the 2013 International Bar Association Guidelines on Party Representation in International Arbitration, but even from the approach adopted for dealing with these differences in ethics of different legal professional bodies in different jurisdictions. Counsel needs to be able to anticipate the possible arsenal of weapons that his or her opponent will employ and know from the outset which of these are guerrilla tactics. However, it is hard to categorise some borderline tactics as guerrilla tactics.
The art of persuasion is simplicity
The art of persuasion is simplicity and relying on the relevant issues. Perfect command of the language of the arbitration may not always assist the tribunal. Rather, the tribunal will need to be guided by a road map through the issues and evidence rather than be presented with hyperbole and exaggeration.– Julian Lew QC, Twenty Essex Chambers
Be in control and keep it simple
Advocacy is like boxing. If you control the ring, you are likely to win the prize fight. But be subtle. No histrionics. No overstating your case. You start off with a clean piece of paper and it is for you as the advocate to paint the picture you want the tribunal to accept and adopt. So keep it simple. Don’t mix up bad points with good points, or you risk the good points going the same way as the bad ones.– Ian Hunter QC, Essex Court Chambers
Most professional ethical rules have been developed purely with national court litigation in mind. Counsel and law firms are regulated by their local bar rules or local law society rules. However, as there is no necessity for counsel to be lawyers, let alone registered practising lawyers, they will not be subjected at all to any local bar ethical rules. It is incumbent on counsel to consider as part of his or her case strategy and case preparation the possibility of going against a law firm domiciled in a country with very different standards of lawyers’ ethics. In this event, counsel needs to be aware of the possibility of opposing counsel or a law firm from another jurisdiction being allowed to prepare witnesses or being able to initiate actions that are considered to be ethically wrong or even reprehensible in the other jurisdiction. It would not be correct to insist that a non-lawyer counsel from Arcadia is to be subject to the ethical standards of a lawyer or a law firm from Utopia. The lawyer or law firm from Utopia may not be allowed to prepare or coach his or her witnesses but the non-lawyer advocate from Arcadia may be entitled to prepare and coach his or her witnesses in mock arbitration hearings.
It is important for counsel to be able to anticipate the possibility of guerrilla tactics, which may take the form of continuous and systematic arbitrator challenges or recurring requests for extensions of time. There may also be a strategy of submitting an excessive number of documents from the opponent to obstruct the tribunal in its attempt to carry out its work efficiently. Ultimately, the intended objective of a party that decides to engage in guerrilla tactics is to obstruct, delay, sabotage and derail the arbitral proceedings. Guerrilla tactics may form part of the case strategy of counsel from jurisdictions that have comparatively minimal ethical regulations over local law firms.
Factors to be considered in arbitrations seated in unfamiliar jurisdictions
Counsel should be able to realise his or her own strengths and limitations at the stage of case strategy and case preparation. Where counsel is dealing with an arbitration seated in an unfamiliar place and governed by law with which he or she is not familiar, an important strategic decision needs to be made at the outset. Counsel will need to consider and decide whether he or she should be presenting the governing law issues by way of written memorials or through a legal expert witness report on the issues of law that apply to the dispute.
Such a decision also depends in part on the tribunal that has been, or is about to be, appointed. Counsel needs to decide whether he or she is likely to have an upper hand against the opposing counsel in the event that neither side decides to retain any legal expert. Counsel will also need to consider whether his or her party-appointed arbitrator and the chairperson are likely to be more familiar and comfortable at applying the principles of the governing law and the law of the seat than the other arbitrator. In the event that the answer is affirmative in both situations, counsel who is very familiar with the governing law will generally decide against the retention of any legal expert witness, as counsel will be better off bringing to life the legal issues at stake at the final hearing. Such counsel will also be more flexible and better able to fine-tune his or her case strategy after the disclosure and exchange of witness statement stages of the arbitration. Conversely, counsel who is not familiar with the governing law should consider appointing either a legal expert witness to deal with the issues of governing law or to consider finding an able local co-counsel who is familiar with those issues of law. A local counsel is also likely to have better access to potential witnesses and have the necessary language and cultural abilities, and this would allow the overall team to develop the legal theory based on factual evidence that local counsel may be better suited to gather.
In the event that counsel or the legal team decides to recommend the appointment of foreign counsel to deal with aspects of the governing law, then there are other strategic decisions that will need to be dealt with. When collaborating with foreign counsel in the capacity of co-counsel, lead counsel will need to work out the exact scope of responsibilities. Lead counsel also needs to work out the most fruitful manner of demarcation of the work and responsibilities between both law firms.
In the event that lead counsel decides to engage a legal expert witness to provide legal opinions as opposed to engaging co-counsel, it is critical that the engagement begins immediately or as soon as possible. This is to allow reasonable time to be given to the legal expert witness to fully understand the facts and issues at stake so as to be able to have meaningful discussions with counsel and solicitors. Counsel will also need to fully understand the perspective of the legal expert witness if he or she is to be able to properly develop the case strategy and procedures that he or she plans to deploy in the course of the arbitration.
Institutional transparency in confirming challenged nominated arbitrators
Even if counsel are familiar with the courts of the seat of an arbitration, it is also important for him or her to understand that not all arbitration centres are equally robust or transparent when it comes to dealing with challenges against the nomination of arbitrators, whether meritorious or not. Arbitration institutions have differing degrees of robustness when it comes to dealing with spurious challenges and confirming nominated arbitrators. At the highest end of the scale is the International Chamber of Commerce (ICC) arbitration system, which is the most transparent in this respect.
In a 2018 matter, the nominated presiding arbitrator, who was nominated by the co-arbitrators, was challenged by one of the parties who objected to his appointment solely on the ground that he was 76 years old at the time of nomination. It was alleged that it was not feasible to procure insurance to guard against human risk or ‘proceedings rehearing’ risk. In essence, the objecting party alleged there was a risk that, during the course of the arbitration, the 76-year-old arbitrator might suffer from health issues or otherwise become unable to continue in his role as president, with potentially serious consequences for the parties. The ICC Court rejected the challenge and decided to confirm the nominated presiding arbitrator. Significantly, the ICC provided its detailed grounds of reasoning, including a statement that there was also no indication that the prospective president’s health should be a source of concern as precarious health conditions may be a cause for concern irrespective of age.
One can then contrast the ICC Court’s approach to that of the Singapore International Arbitration Centre (SIAC) Court in a similar situation in which the prospective presiding arbitrator who had been nominated by the co-arbitrators was challenged by counsel for one of the parties. The sole objection made against confirmation of the prospective presiding arbitrator was on the grounds that counsel had worked closely in other cases with a single identified lawyer from the same law firm as the prospective presiding arbitrator. The co-arbitrators rejected the challenge on the grounds that none of the lawyers from the law firm of the nominated presiding arbitrator was participating in the arbitration. In short, there was no breach of the 2014 International Bar Association Guidelines on Conflicts of Interest. Nevertheless, the SIAC Court decided to accept the challenge and did not confirm the nominated presiding arbitrator. Notably, this decision was made without providing any reasoning whatsoever; the SIAC system does not require reasoning in this regard.
It is likely that the requirement of transparency by the ICC Court and the need for the ICC Court to provide reasoning for any decision on the confirmation or not of prospective arbitrators will limit the likelihood and number of unmeritorious challenges. It is important for counsel to fully understand the robustness and transparency of the courts of the seat of the arbitration in dealing against both meritorious and unmeritorious challenges – it is equally important to understand the extent of the transparency of the arbitral centres in dealing with challenges. A failure to understand this issue of transparency in the confirmation of arbitrators risks leading the parties to protracted and thus more costly proceedings.
Burden of proof considerations
It is always very important for lead counsel to decide at the outset who has to discharge the burden of proof and the standard of proof that is to be applied. It is important to consider this issue at the same time as compiling the list of issues that form part of the case. Counsel will then need to move on and decide how the issues are to be proved. At the initial stage, counsel will not have the full facts of the case at hand as he or she is still to look through the documentary evidence. As such, at the earliest stage, it is important for counsel to rely on the potential witnesses to provide an outline for the dispute.
Counsel should not lose sight of the fact that the client’s case will need to be proved by the factual and expert witnesses and not by counsel. One will need to decide the long-term path as quickly as possible and come to initial conclusions as to whether the potential witnesses are relevant and credible enough to assist counsel in pushing available documentary evidence so as to discharge the burden and standard of proof.
Once counsel knows what he or she will be able to say to the tribunal, he or she will also know what evidence will need to be sought from the factual witnesses. It is helpful to elicit from each witness what one would like to submit to the tribunal at the hearing and post-hearing brief stages. One of the most important benefits of careful case preparation, including proper selection of witnesses and a focused preparation of evidence, is the avoidance of many hours of aimless examination and cross-examination.
Choosing and setting up the appropriate tribunal
It is often said that an arbitration is only as good as the arbitral tribunal. As such, it is very important for a party to carefully choose who are to be the ultimate decision makers of fact and law. While the ability to select one’s tribunal is often touted as one of the advantages of the arbitration process, it also means that lead counsel will have to be very careful about deciding which arbitrator it is to appoint. This decision will have several important strategic implications on the arbitration itself. Much literature has been written about this selection process and it is a subject in itself. In short, one aims to appoint an impartial, fair and patient lawyer who is suitable for the arbitration in terms of technical expertise in the subject matter and whether the arbitration is governed under civil or common law. In terms of case strategy and case preparation, there are other important considerations as to whether one wants to have a tribunal that is ultra-efficient or one that is slow and careful.
Counsel acting for the claimant tend to want a very efficient tribunal that is able to deal with all interlocutory decisions, move to a final hearing and come out with a final award as soon as possible. Conversely, counsel acting for a respondent who may be caught unprepared by the arbitration tend to want to slow down the arbitration process. As part of their case strategy, they will probably insist on appointing a sole arbitrator who is a highly respected arbitrator with a busy caseload. Counsel for the respondent may also want to appoint an arbitrator who has multiple appointments at hand, is not very adept with technology and word processing, and is not very keen on travelling by air.
Counsel acting for a claimant who is faced with a three-arbitrator tribunal can also employ case strategy on improving the speed of the interlocutory process. Often, counsel will suggest that the three members of the tribunal may want to empower the presiding arbitrator to make procedural orders without having to consult the other arbitrators. Counsel for a respondent who prefers to slow down the hearing will be likely to insist on invoking his or her right to have all party-appointed arbitrators to be given an equal opportunity to make all decisions, including procedural decisions.
As a matter of case strategy, it is essential for counsel to understand the prospective arbitrator’s background to see if that person will fit the arbitration at hand. While one will always seek to appoint the most reputable and highest-ranked arbitrator possible, it is equally important to find out if the arbitrator has any special technical expertise to deal with the list of issues in the arbitration. The arbitrator’s cultural perspective is also important. He or she will generally be experienced in the field of the arbitration, and it should be considered whether it is required that the arbitrator needs also to have specialist financial or technical expertise. It is also taken that an arbitrator will need to be able to understand the commercial issues underlying the dispute. Experienced counsel will ensure that it appoints a good arbitrator who will not risk losing his or her credibility by appearing to be unfair or take over the role of a party’s advocate. It is taken that experienced counsel will appoint an arbitrator who will ensure that counsel will be given a fair opportunity to present the case.
Never forget the goal
Never forget who the decision maker is. In most arbitrations the tribunal is composed of three qualified and experienced lawyers (i.e., colleagues). Your job as counsel is to convince them, not the client, the opposing party or its counsel or anyone else, but the arbitrators. Everything that you do as counsel must be geared towards this goal.– Kaj Hobér, 3 Verulam Buildings
However, what is often forgotten is the background culture of the arbitrator. It is critical to understand whether the arbitrator is a lawyer from the civil or common law tradition and who is to be the appointing authority in the event of a default situation in which it is not possible to agree the sole arbitrator or the presiding arbitrator.
Leaving aside the ICC and leading arbitration institutions such as the Hong Kong International Arbitration Centre, many arbitration institutions have a track record of appointing a great majority of arbitrators from either a civil law or a common law background. This does mean that counsel will need to factor into his or her case strategy what is to be the likely background of the arbitrator who will be appointed by the appointing centre should there be a default situation. Counsel will need to understand how the arbitral institution will be likely to act in the event of a default situation, and whether it is likely to appoint an arbitrator who will be familiar with and uphold the principles of the governing law of the contract that has been agreed by the parties. It is important to go through statistics of the arbitral institution and then decide whether one needs an arbitrator who truly understands the governing law or not. As an example, if one has an arbitration seated in a common law jurisdiction that is governed by civil law, such as Indonesia, and counsel believes that he or she has a weak case under Indonesian law but a good case under English law, then counsel is likely to appoint a very senior English or common law arbitrator but retains the right to accept or reject the appointment of the presiding arbitrator. The opposing side may appoint an Indonesian law expert and may then try to ask for agreement of an arbitrator who understands Indonesian law or civil law.
As part of counsel’s case strategy of not allowing his or her own party-appointed arbitrator to appoint the chairperson, the appointment process will fall to the appointing authority. If it is an authority such as SIAC, it will be much more likely for the authority to appoint an English or non-civil law arbitrator. This will increase the likelihood of the two common law arbitrators being on the same wavelength regarding common law principles. Such a case strategy will then reduce the importance of the application of the governing law and increase the focus on counsel’s advocacy skills. Similarly, where an arbitration is seated in a civil law jurisdiction such as Indonesia but is subject to common law (such as England), the same tactical consideration may come into play when black letter law does not favour a party.
It is also important to know how the majority of the arbitral tribunal is likely to approach the procedural choices that are to be made at the early stages of the arbitration. Again, experienced counsel who wants to downplay the application of governing law aspects is likely to appoint a well-known arbitrator who is in great demand but is one who comes from a system of law that is diametrically opposite to the governing law. Such a strategy then ensures that the arbitrator is unlikely to be able to devote more than the normal time and effort required to understand the issues and to apply local governing laws in the arbitration efficiently. There is no right of appeal in international arbitration and no right to set aside an arbitral award simply because the tribunal got the law wrong. If one is acting for the claimant, it is extremely important to ensure that the presiding arbitrator is someone who is not only a specialist in the governing law, but also has excellent case management skills.
Bifurcation and preliminary issue determinations
As part of case strategy and case preparation, counsel will need to think critically about whether there is any need to make an application for bifurcation. Some arbitral tribunals may, in complex cases, allow applications to bifurcate the proceedings, and allow the parties to deal with issues of damages only after the tribunal has rendered its ruling on liability. The party with the stronger case will be likely to seek bifurcation on the grounds that such a procedure can contribute to the early resolution of the dispute. A party that makes an application for bifurcation will generally premise its application on the grounds that the process will allow the parties and the tribunal to focus on fundamental issues at an early stage to make case management more effective and also to purportedly save costs. Whether this may be the actual situation will rest on the shoulders of counsel, who will need to persuade the tribunal through oral and written advocacy.
Such case strategy considerations are equally important to respondents in cases where a significant part of the claims may end up being dismissed for lack of jurisdiction. Bifurcation can be a helpful procedure for claimants if an early partial award on liability will be able to lay down a platform for without-prejudice settlement discussions before any expensive damages phase takes place. Counsel acting for respondents tend to apply for bifurcation of jurisdiction from merits, and even trifurcation at times when they also seek to split the liability and quantum phases.
Preliminary issue determination is another weapon used by counsel who wish to frame a case according to their case strategy and cut down the number of issues to be decided at the final hearing. However, as with bifurcations, applications for preliminary issue determination is a procedure that is not always accepted by arbitral tribunals and is also generally opposed by the opponent. As with bifurcation, an applicant for a preliminary determination will usually couch his or her application in a way that suggests certain threshold preliminary issues are able to resolve key issues of the arbitration or to significantly cut costs by limiting the amount of evidence that needs to be produced and sifted through by the tribunal. Some commonly seen themes include preliminary applications as to whether the remedies sought by a party are recoverable in law and whether or not there is indeed a proper defence of force majeure.
Selection of witnesses
The selection of witnesses is an important consideration that can affect case strategy. Counsel will need to decide at an early stage which factual witnesses will be ideal for the arbitration. At times, counsel may decide that the witness that is closest to the background facts may not be as ideal as one who may not have been involved in all the historical facts. Counsel may decide that the more knowledgeable witness is easily shaken when challenged and may start giving inconsistent or even false answers. Counsel may well decide to rely more on contemporaneous documents and minimal factual witnesses if his or her documentary case is very strong. Conversely, when faced with a case in which contemporaneous documents are not in his or her favour, counsel may decide to use factual witnesses who are both robust and clever enough to fill in the blanks where there are gaps between contemporaneous documents. It is always poor case strategy to encourage any witness to give evidence on issues with which they are insufficiently familiar. After identifying the most credible person to be a factual witness, it is important that lead counsel ensures that the factual witness is able to narrate his or her narrative of events in a simple and straightforward manner.
It is important that lead counsel is able to help the factual witness go through contemporaneous documents that would then form exhibits to assist the witness to narrate his or her account of events in his or her own words. As a matter of careful strategy, a seamless incorporation of such exhibits with the witness’s narration of events will greatly assist both counsel and witness at the hearing stage.
Lead counsel should always avoid incorporating legal arguments into witness statements but counsel needs to be able to know how to arrange the narration of the witness in such a way as to fit the key points of the case into the key legal principles that counsel is trying to rely upon. Just before the final hearing, counsel will then be able to put together opening written submissions that would allow the tribunal to easily understand the key legal principles that bolster the case and show how the facts provide a clear map and fit hand in hand with those key legal principles.
It is important for counsel to identify the right expert witness who will be able to help strengthen his or her case and someone who is able to prove the case theory of counsel. A good expert must be able to provide honest opinions and reasoned options that allow the advocate to properly assess and prepare the case theory properly. On the other hand, it is important for lead counsel to maintain absolute control in not allowing the expert witness to run the case. A good advocate will need to know how to strike a balance between the two positions. It is important that the expert witness does not appear to be too interested in supporting the client and does not take an unbelievable or illogical position that proves too difficult to properly defend. Lead counsel needs to ensure that his or her own credibility as well as that of the expert is always maintained to the highest standards. This overriding quality is critical to the effectiveness of counsel in both oral and written advocacy. The ultimate aim is to have the expert witness persuade and convince the tribunal to accept that the expert’s analysis and interpretation are correct. It is also equally crucial to be able to find a robust expert witness who will be able to come across as both credible and independent.
Experienced lead counsel will have experienced many situations in which there is almost an equilibrium between facts and legal theory, and they will know that if these cases involve a certain number of technical issues, the credibility of the experts and the version of expert evidence that is accepted by the tribunal have a critical effect on the decision in the case.
Non-legal issues that may affect case strategy
Counsel needs to keep an eye on non-legal issues that may affect the longer-term interests of his or her client. Such issues will often have nothing at all to do with the skills of an advocate or the knowledge possessed by the lawyer. The issues often fall far from the gaze of the average court litigator or arbitration counsel. They involve considerations such as a good in-depth knowledge of the nature of the client’s business and of the relevant market. In practical terms, this requires not only sophisticated legal knowledge but a broad grasp of context: the nature of the client’s business, the market and the client’s relationship with the other parties to the dispute.
Experienced advocates often prefer to adopt the ‘chess clock’ or ‘time guillotine’ approach, whereby each side has a fixed number of hours in which to present its case (including examination in chief, cross-examination of opposing witnesses, oral opening and closing submissions). This method will often favour the more experienced advocate who is used to working under time pressure and tends to work to the advantage of civil law practitioners, as he or she is likely to have already set out his or her written advocacy in a clear manner, and the limited time, chess clock method will generally force both sides to focus sharply on the key aspects of the case. There is not enough time for verbose oral submissions, and a shorter time frame usually forces counsel to consider only the key points that really need to be made to persuade the tribunal to adopt its preferred case theory. This limits repetitive oral submission and forces parties not to spend too much precious time on non-core issues.
Lead counsel who may need to cross-examine many witnesses and may need to focus on building a case tend not to be too keen on adopting such a methodology.
The best advocate must at the outset consider the eventual endgame that he or she hopes to be able to play out. Unless the groundwork has been laid out properly, the advocate cannot use his or her superior advocacy skills to the best effect. However, counsel also has to consider whether his or her strategy can provide the outcome that the client desires. In the event that counsel feels that the best case strategy will not be enough to protect his or her client, or feels the tribunal will not be able to issue a final award in time to accord the much-needed relief to his or her client, then counsel needs to inform the client as soon as he or she comes to any such conclusion.
Arbitration counsel needs to have a large and varied skill set that transcends the knowledge of law or good advocacy. He or she needs to appreciate, from the very outset of the case, just how important the overall case strategy needs to be. Counsel must be proactive, not just reactive, and has to be focused from the start on the outcome that the client wishes to achieve. A wide variety of factors, some of which have been outlined in this chapter, will contribute to the success of that strategy and to the final outcome of the arbitration. Each case will require its own strategy, even though there are many factors in common. Importantly too, strategic concepts in international arbitration differ greatly from those to be applied in domestic litigation because of the truly international and potentially diverse nature and approach of the parties, their counsel and the arbitral tribunals. The successful counsel in international arbitration picks up on all these varying factors and applies them to the best advantage of his or her client.
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