Since our last update arbitration ebulletin, there have been a multitude of important developments around the globe. We highlight just a few of them here – more developments can be found on our searchable Arbitration Notes blog. Please do subscribe for regular updates. Local developments: Russia, Middle East, England, Singapore
- The Russian arbitration reforms took effect (some on 1 September 2016 and others on 1 February 2017) – the reforms include certain requirements as to use of arbitral institutions registered in Russia and choice of Moscow as a seat. We have been assisting a number of clients who enter into Russian related transactions to consider the impact of these reforms on the arbitration clauses already entered into and the dispute resolution choices for future agreements.
- The English courts have issued a number of decisions with practical and legal significance: The Supreme Court has held that there is no power to order security under the English Arbitration Act 1996 or the scheme of the New York Convention 1958 when there is a challenge to recognition and enforcement of the award in the English courts. In another recent decision, the English Court issued a reminder that perceived characteristic of confidentiality in arbitration may be a false assumption, refusing to anonymise a judgment rejecting a challenge to an award. It also restated the need for restricting unilateral communications between counsel and a party-nominated arbitrator to uphold the integrity of the arbitral process and avoid the appearance of bias.
- Middle East developments: The UAE amended its Federal Penal Code, introducing potential criminal sanctions for arbitrators. It remains to be seen how the new law will be enforced, however we have seen its effects first-hand, with an increasing number of arbitrators withdrawing from UAE-seated tribunals and refusing nominations to sit as arbitrators in such tribunals. We also comment on recent cases which have caused some doubt over the enforcement of Dubai-seated awards in the DIFC. On a more positive note, in February 2017, Qatar issued a new arbitration law, the first arbitration law in the Gulf states to follow the UNCITRAL Model Law. A number of the recent Middle East developments are summarised here in our post on developments in 2016 and trends for 2017.
- There have been further developments in third party funding for arbitration and related proceedings. In March 2017, Singapore passed amendments to the Civil Law Act legalising third-party funding in arbitration and related proceedings, opening up a significant new market for funders worldwide.
Key enforcement decisions: US and China
- There have been a number of key enforcement decisions in the past few months: the influential U.S. Court of Appeals for the Second Circuit (the Second Circuit) considered an arbitral award's preclusive effects and its ability to bind third parties, as well as issuing valuable guidance on the correct procedure and terminology for the enforcement of New York Convention awards. The Chinese courts have enforced a CIETAC Hong Kong Arbitration Center arbitral award in mainland China for the first time. We also reported on a positive decision from the Qatar courts demonstrating an increasing willingness to enforce foreign arbitral awards.
Institutional rules and clauses
- Institutional Rules & clauses updated: the ICC announced a number of changes to the ICC Arbitration Rules late last year, and the new ICC Rules 2017 took effect on 1 March 2017. Noteworthy changes include an expedited process and steps towards increasing transparency and accountability in the decision-making of the ICC Court. The Thailand Arbitration Institute (the TAI) also issued new rules which took effect on 31 January 2017. The new TAI Rules mark a significant and positive departure from the previous rules. The German Arbitration Institution (the DIS) has adopted a new arbitration clause to be used with the 2002 ISDA Master Agreement.
Brexit & Dispute Resolution
- Since our last update, the UK Government has published its White Paper on Brexit: Andrew Cannon, Hannah Ambrose and Vanessa Naish comment on the indications given therein as to the future of state-to-state, investor-state and domestic dispute resolution.
Future of investor-state dispute resolution
- Herbert Smith Freehills has responded to the EU Commission's public consultation on the future of investor-state dispute resolution and the proposed Multilateral Investment Court.
Inside Arbitration: Issue 3
- We have also published the third issue of our publication Inside Arbitration. Amongst the articles included are an interview with Kigali International Arbitration Centre's Secretary-General, Dr Fidèle Masengo, insights into development of commercial arbitration on the African continent and optimum dispute resolution choices for parties negotiating Africa-related contracts, a global perspective on the availability of security for costs and claim in international arbitration and a handy comparative table on state immunity.