Commercial Arbitration in the ECO Region

1. Commercial Arbitration in the ECO Region Regional Arbitration Centres: A Practitioner View Catriona Nicol 1 December 2014 www.mcnairchambers.com

2. Regional arbitration centres • Key international arbitration institutes – LCIA, ICC (most commonly used) • But increasing number of regional and specialist institutions in existence. In Iran: • Arbitration Centre of the Iran Chamber (established 2002) • Tehran Regional Arbitration Centre (commenced activities in 2005) (3 cases in 2009; 3 cases in 2010) • Significant increase in recent years: • Before 1940, only 10% of institutions around today existed • 70% created in last 30 years • 50% created in last 20 years • 20% created in last 10 years • Middle East has increased from one arbitration centre in early 1990s to over 90 listed on Arab arbitration list • Greater choice for arbitrating parties means greater competition for institutions www.mcnairchambers.com

3. What makes a successful institution? • Key factors: • Arbitral institution rules • National arbitration laws • Approach of national courts • Personnel, facilities and infrastructure – institutional and jurisdiction • Survey carried out in 2010 listed key factors as including: • Neutrality/”internationalism” • Reputation/recognition • Previous experience of institution www.mcnairchambers.com

4. Arbitral institution rules • First and foremost – arbitral institution rules need to meet the needs of the parties • Must address: • Standard requirements – processes applicable to arbitration, appointment of arbitrators, challenges to arbitrators • Also include provisions on emergency arbitrators, expedited arbitrations, multi-party and multi-contract • Responsive to changes in legislation, regional/international trends, requirements of parties, progress of other institutions (ie, see series of changes to rules of existing institutions) www.mcnairchambers.com

5. National laws and courts • Arbitration does not exist in a vacuum – method of dispute resolution that functions within a legal system • Impossible to exclude operation of national laws and national courts entirely – even UNCITRAL Model Law and New York Convention recognise that they have a role to play • What is that role? • Ideal relationship – arbitration operating free from “controls of parochial national laws and without the review and interference of national courts” • Nightmare relationship – undue and damaging court and law intervention • Most practical solution – court support (in between the two) www.mcnairchambers.com

6. National laws • Successful regional arbitration centre requires an arbitration-friendly legal environment • National arbitration law based on UNCITRAL Model Law • Accession to New York Convention • Allow for limited intervention before and during arbitral process: • Intervention only where required by parties and in support of the arbitration • Involvement after conclusion of arbitration – limited grounds to challenge/set aside arbitration award • Supportive government is crucial – successful centre requires constant evaluation and examination of the arbitration law to ensure that the law addresses the needs of the parties and processes are in place to support arbitration (see the growth of Singapore) www.mcnairchambers.com

7. National courts • National laws dependent on interpretation and application by national courts • Without supportive national courts, parties will not even consider a regional arbitration centre • Courts should adopt policy of limited and careful intervention • Intervention only where in support of arbitration and where requested by parties • Judges: • Familiarity with arbitration matters • Respect for arbitration process • Highly skilled and respected • Neutral and independent www.mcnairchambers.com

8. Arbitrators, personnel and institutions • Experienced and respected arbitrators essential • What makes a good arbitrator? • How to attract good/experienced arbitrators? • Availability of other personnel – bilingual lawyers, experts, translators, court reports, institution staff • Institution • Experienced staff (administrators and case handlers) • Importance for ensuring there is no timetable slippage (large scale arbitrations sometimes criticised for speed of resolution/delay/expense) • Willingness/ability to organise conferences/seminars to raise awareness of arbitration and institution (both regionally and internationally – marketing) www.mcnairchambers.com

9. Facilities/infrastructure • Facilities for arbitrations and parties: • Purpose built facilities for arbitral institution? Meeting rooms/hearing venues/technology • Hotel/conference facilities – not only arbitrators and parties, but also witnesses, lawyers, experts, other staff? • Infrastructure: • Transport links/accommodation facilities • Safety and political stability www.mcnairchambers.com

10. Examples – successful institutions • SIAC (Singapore International Arbitration Centre) • Formed in 1981 • Caseload has tripled in last ten years • Government is extremely responsive and has the ability to update and improve legislation in a matter of months • Courts have contributed by being supportive of arbitration, upholding the finality of awards and keeping intervention to a minimum. • Capable and professional Secretariat • Rules have kept pace with developments in international arbitration (5th edition released in 2013, with major changes also promulgated in 2007 and 2010) www.mcnairchambers.com

11. Examples – successful institutions • Kuala Lumpur Regional Centre for Arbitration (KLRCA) • Formed in 1978 • Before 2011, it was handling around 20 cases a year; in 2013, it oversaw 156 cases and in 2014, over 230 • Malaysia amended its Arbitration Act in 2005, which was then updated with the Arbitration (Amendment) Act in 2011. • One key selling point – affordability - KLRCA’s rules were amended last year to ensure that its fees are 20 percent lower than the likes of SIAC and HKIAC • Also note liberalisation of Malaysia’s legal industry – allows foreign lawyers to appear in arbitrations and exempts foreign arbitrators from paying withholding tax on the fees earned. • Also introduced its i-Arbitration Rules, which deal with the arbitration of disputes arising from commercial transactions premised on Islamic principles www.mcnairchambers.com