A good commercial lawyer sees beyond the law

Success in international arbitration Slides prepared by James Hope

Seminar in Kiev, Ukraine

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Session I – Before the case starts

Some issues for discussion:

• Drafting an effective arbitration clause

• Securing evidence and protecting rights

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Drafting an effective arbitration clause

• A standard SCC arbitration clause:

Any dispute, controversy or claim arising out of or in connection with this contract, or the breach, termination or invalidity thereof, shall be finally settled by arbitration in accordance with the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce.

Recommended additions:The arbitral tribunal shall be composed of three arbitrators/a sole arbitrator. The seat of arbitration shall be […]. The language of the arbitration shall be […]. The substantive law of […] shall be applied.

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Drafting an effective arbitration clause

• An expedited SCC arbitration clause:

Any dispute, controversy or claim arising out of or in connection with this contract, or the breach, termination or invalidity thereof, shall be finally settled by arbitration in accordance with the Rules for Expedited Arbitrations of the Arbitration Institute of the Stockholm Chamber of Commerce.

Recommended additions:The seat of arbitration shall be […]. The language of the arbitration shall be […]. The substantive law of […] shall be applied.

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Drafting an effective arbitration clause

• A combined SCC arbitration clause

Any dispute, controversy or claim arising out of or in connection with this contract, or the breach, termination or invalidity thereof, shall be finally settled by arbitration administered by the Arbitration Institute of the Stockholm Chamber of Commerce (the “SCC”).

The Rules for Expedited Arbitrations shall apply, unless the SCC in its discretion determines, taking into account the complexity of the case, the amount in dispute and other circumstances, that the Arbitration Rules shall apply. In the latter case, the SCC shall also decide whether the Arbitral Tribunal shall be composed of one or three arbitrators.

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Drafting an effective arbitration clause

• A combined SCC arbitration clause based on value

Any dispute, controversy or claim arising out of or in connection with this contract, or the breach, termination or invalidity thereof, shall be finally settled by arbitration administered by the Arbitration Institute of the Stockholm Chamber of Commerce (the “SCC”).

The Rules for Expedited Arbitrations shall apply where the amount in dispute does not exceed EUR 100,000. Where the amount in dispute exceeds EUR 100,000 the Arbitration Rules shall apply. The Arbitral Tribunal shall be composed of a sole arbitrator where the amount in dispute exceeds EUR 100,000 but not EUR 1,000,000. Where the amount in dispute exceeds EUR 1,000,000, the Arbitral Tribunal shall be composed of three arbitrators. The amount in dispute includes the claims made in the Request for Arbitration and any counterclaims made in the Answer to the Request for Arbitration.

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Drafting an effective arbitration clause

• A combined SCC mediation / arbitration clause

Any dispute, controversy or claim arising out of or in connection with this contract, or the breach, termination or invalidity thereof, shall be solved by mediation in accordance with the Rules of the Mediation Institute of the Stockholm Chamber of Commerce.

Where the dispute cannot be settled by mediation, it shall be finally settled by arbitration administered by the Arbitration Institute of the Stockholm Chamber of Commerce (the “SCC”).

The Rules for Expedited Arbitrations shall apply, unless the SCC in its discretion determines, taking into account the complexity of the case, the amount in dispute and other circumstances, that the Arbitration Rules shall apply. In the latter case, the SCC shall also decide whether the Arbitral Tribunal shall be composed of one or three arbitrators.

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Drafting an effective arbitration clause

Drafting tips:

• It is usually best to keep it simple

• Call a specialist if:

– The other party proposes complex drafting– The contract involves more than two parties– You want to consolidate or join disputes arising out of

different contracts– Interim remedies might be required

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Securing evidence and protecting rights

Ask yourself some difficult questions:

• What are the issues in the case (or the potential case)?

• What are your arguments?

• What evidence will you need to produce in order to support and prove your arguments?

(Be careful about the ‘paper trail’ …)

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Securing evidence and protecting rights

What is evidence?

• How will you tell your side of the story?

• Documents often provide better evidence than witnesses

• Emails can be critical

• The importance of internal documents (e.g. board minutes, internal emails etc.)

• Don’t forget to look at your opponent’swebsite, and other public filings!

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Securing evidence and protecting rights

What should you do about an ‘unhelpful’ document?!

• Do not make things any worse– If you want to discuss the document, do so in a meeting,

not by email!

• If your opponent has the document, you should normally try to mention it before he does

• If the document is an internal document, your opponent may never get to know about it, but …

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Securing evidence and protecting rights

Document production is common in international arbitration:

• IBA Rules on the Taking of Evidence in International Commercial Arbitration (http://www.ibanet.org)

• Document requests are confined to: – a ‘narrow and specific requested category’ of documents,– that are reasonably believed to exist, and– that are relevant and material to the outcome of the case

• Negative inferences

• The rise of ‘electronic discovery’

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Session II – Building up your case

Some issues for discussion:

• Procedure in SCC arbitration

• Understanding the applicable law: working with foreign counsel

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Procedure in SCC arbitration

• A standard SCC arbitration clause:

Any dispute, controversy or claim arising out of or in connection with this contract, or the breach, termination or invalidity thereof, shall be finally settled by arbitration in accordance with the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce.

Recommended additions:The arbitral tribunal shall be composed of three arbitrators/a sole arbitrator. The seat of arbitration shall be […]. The language of the arbitration shall be […]. The substantive law of […] shall be applied.

Procedure in SCC arbitration

Arbitration A

• Two Swedish parties

• Both have Swedish counsel

• Swedish language

• Swedish co-arbitrators

• Swedish chairman

Arbitration B

• US party vs. Ukrainian party

• US counsel / Ukrainian counsel / Swedish counsel

• English language

• US / Ukrainian co-arbitrators

• Swedish or foreign chairman

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Some common procedural issues …

See the UNCITRAL Notes on Organizing Arbitral Proceedings (http://www.uncitral.org):

• Written submissions– How many?– Consecutive or simultaneous?– Should documentary evidence be attached?

• Disclosure or production of documents?– Is this permitted?– How extensive?– At what stage in the proceedings?– [IBA Rules on the Taking of Evidence in International

Commercial Arbitration]

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Some common procedural issues …

See the UNCITRAL Notes on Organizing Arbitral Proceedings:

• Witnesses– Are lawyers entitled to ‘coach’ witnesses?– Are written witness statements to be exchanged before the

hearing?

• Experts– Will experts be used?– Who appoints them? The parties, or the arbitral tribunal, or both?– Are they required to submit written expert reports before the

hearing?

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Some common procedural issues …

See the UNCITRAL Notes on Organizing Arbitral Proceedings:

• How will legal issues be argued?– As part of the parties’ written submissions?– Using legal experts?– Orally at the hearing?

• The hearing– How many days?– Format?– Written transcript?– Any post-hearing submissions?

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Understanding the applicable law: working with foreign counsel

A typical case:

• Arbitration in Stockholm

• Foreign substantive law

• Parties from yet another country or countries

• Arbitrators with different legal backgrounds and experience

What is the best legal team to win the case?

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Understanding the applicable law: working with foreign counsel

• Who are the arbitrators?

• What are the issues?– Some cases turn on the facts– Sometimes the law is essentially agreed, or unimportant

• Asking the right legal questions

• Language issues

• How do you prove what the law is?– Sources of law?– Legal experts?

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Understanding the applicable law: working with foreign counsel

• The importance of teamwork

• Some case studies …

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Session III – Presenting your case

Some issues for discussion:

• Written submissions: balancing facts and law, structuring the submission, how to pre-empt your opponent’s arguments

• Evidence: requesting documents and presenting evidence to the Tribunal

• Preparing the witnesses and drafting witness statements

• How to succeed at the hearing

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Some questions (for discussion)

• What is the purpose of a written submission?

• Do you expect your opponent to hand over damaging documents?

• Do you actually need witnesses? They can harm your case– "Defend me from my friends; I can defend myself from my enemies"

Attributed to Maréchal Villars (1653-1734) when taking leave of King Louis XIV

– “God protect me from my own witnesses; the other side’s witnesses I can handle myself”

• Are written witness statements a good idea?

• Is the hearing really so important?– The key to the case is often the wording of the contract