New Zealand born Paul Key QC, an international arbitration specialist at Essex Court Chambers in London, discusses innovation, challenges and new trends in dispute resolution.
What is your role in dispute resolution?
I am a barrister based in London. I work as an advocate and as an arbitrator in international commercial arbitrations and investment treaty arbitrations. I also do court work, largely (though not exclusively) related to arbitral disputes.
The disputes in which I am involved usually have some high-value and cross-border commercial aspect to them. My clients are typically large commercial entities, states and very high net-worth individuals. Like most people who do this work, my work as an advocate involves work for both claimants and respondents. The arbitrations in which I am involved take place in various places around the world (e.g. New York, Geneva, Singapore, Vienna and Sydney) and my work involves frequent travel.
I became interested in dispute resolution for various reasons, including reasons of personal intellectual interest and social justice reasons. I like solving puzzles and dispute resolution always presents a number of puzzles that need to be solved, both in terms of legal issues and in terms of factual issues. However, I also wanted to assist people and entities to achieve justice and to be able to resolve their disputes in a fair and equitable manner.
Which processes do you use most frequently?
My arbitration work tends to follow, or only slightly to modify, a tried-and-tested general structure: one or more rounds of written pleadings, followed by one or more rounds of factual witness statements and expert reports, followed by an oral hearing, followed by a written closing brief.
Of course, each case has its own specific features and there are many cases in which I have been involved where a different structure has been adopted. However, as a general rule, the expectations of the users of the arbitration process and the sums of money involved lead to the same general structure being adopted.
One process which I have seen come into more prominence in the last few years is the use of witness conferencing (also known, in a somewhat colourful metaphor, as ‘hot tubbing’). This technique involves the tribunal and/or counsel questioning two or more witnesses at the same time.
Although it has advantages and disadvantages, I have seen its successful use in appropriate situations in a number of recent arbitrations. Whilst it is clearly not to be used in all situations, it is certainly a useful tool to be considered and a welcome addition to the range of techniques available in international arbitration.
How is the market currently addressing parties’ needs?
Unlike some other forms of dispute resolution, international arbitration involves the parties to the dispute agreeing to arbitration as the process by which their disputes will be resolved. Typically the parties also agree on the arbitral rules which will apply and which will form the basic ‘rules of the game’.
Given that there are various institutions which promote competing arbitral rules and procedural innovations, the starting assumption should be that the parties have chosen the best option available to them – or, at a minimum, the ‘least worst’ option. (Of course, this assumes that the parties have in fact paid attention to the various options on offer and conducted some comparative analysis of the advantages and disadvantages of the options. And clearly this assumption is not always correct.) In general terms, therefore, the arbitral process evolves to meet the needs and desires of the users of the process, namely the parties to the dispute.
The analysis becomes more complicated when one considers the nature and status of treaty arbitration, which many citizens around the world consider to be an assault on democratic control and oversight. If those disgruntled citizens affected by treaty arbitration are understood to be ‘users’ of treaty arbitration, they would clearly disagree with the suggestion that it meets their needs and desires. However, this is usually more an expressed concern about the very existence of treaty arbitration than a commentary on the specific procedures adopted in an individual treaty arbitration.
Of course, improvements can be made, even to international commercial arbitration. Two commonly-identified concerns are (i) the costs involved and (ii) the delays. The concerns are often well-justified. It appears that the providers of arbitration are taking note of these concerns and taking steps to address them. Only time will tell whether new measures will fully satisfy users.
How do you think dispute resolution processes are likely to change in the future?
There is an increasing recognition that some disputes can be amicably resolved through a process of mediation, thereby saving costs and time. I expect that this will become an increasing feature of court litigation, whether through courts compelling mediation or through penalising parties by way of costs orders for not undertaking mediation or otherwise.
Given that the arbitral process is a consensual one, the options to promote mediation in the context of arbitration disputes are fewer in number than those available to court disputes. However, it can be expected that ‘tiered ‘ dispute resolution clauses (whereby the parties agree to use mediation before resorting to arbitration) and tribunal-encouraged mediation will become more common than at present.
In the specific field of international arbitration, there are a range of other mechanisms which are available to promote cost-effective justice. This stems from the fact that international arbitration does not normally require any particular procedural steps, provided that the overall process is fair and just to all parties. These mechanisms available to promote cost-effective justice include dispensing with full formal written pleadings, conducting hearings by telephone or video-conference and the ‘hot-tubbing ‘ of multiple witnesses. It is now fairly standard for the tribunal to consider these options.
However, experience shows that it is often the parties themselves (or perhaps their advisors?) who are the most resistant to such innovations in the context of the arbitration of their own disputes. This is perhaps the result of a desire to put everything possible before the tribunal in an effort to win the dispute – and the perception that, if the case is not fully presented, the opposing party may gain some advantage.
Therefore, while new and innovative mechanisms to promote cost-effective justice are identified and adopted from time to time, it would be overly optimistic to expect in the near-future wholesale and widespread use of such mechanisms across the range of international arbitration disputes.
One area of innovation which does provide some prospect of real change in the way in which international arbitrations are run is the area of ensuring arbitrators have, and devote, sufficient time to each arbitration, thereby resulting in an earlier final award than might otherwise be the case. Particular innovations here include (i) requiring arbitrators to provide a signed statement of their future commitments on other cases and (ii) institutions making public the time which arbitrators have taken to resolve previous cases.
How could an improved cross-cultural dialogue promote different forms of dispute resolution?
As its descriptive title suggests, a defining feature of international arbitration is its ‘international’ element. There is therefore a history in international arbitration of different cultures meeting and attempting to find some mutually satisfactory method of resolving their disputes. While this is an on-going process and it cannot be claimed that all users are entirely satisfied with international arbitration, it is generally regarded by users as an acceptable method of resolving their disputes.
One area where international arbitration is exploring a greater recognition of its cross-cultural dimension is in the selection of arbitrators. The ‘average’ arbitrator is still a relatively-elderly, white male from Europe. Efforts are being undertaken to encourage parties and institutions to select a more culturally-diverse (and, indeed, gender-diverse) group of arbitrators. While, progress is undoubtedly slow, there is evidence of concrete progress in this area.
Interviewed by Natasha Mellersh.
Paul Key is a highly-regarded specialist for all forms of international commercial arbitration, including investment treaty arbitrations. He has regular and on-going involvement in many important and high profile cases, including appearing for the ICC in Jivraj v Hashwani (Supreme Court).