Developments in Arbitration in Asia Pacific – A Regional Perspective

1. Developments in Arbitration in Asia Pacific – A Regional Perspective Nish Shetty

2. Overview • Rise of Asia Pacific as an Arbitration Hub • Regional Round-up • “Twin Asian Cities of Arbitration” Singapore & Hong Kong • Snapshot of players in the region • India as a ‘seat’ of international arbitration? • Future of International Arbitration in Asia ICC Arbitration & Amicable Dispute Resolution – Focus on India

3. Rise of Asia Pacific as an Arbitration Hub ICC Arbitration & Amicable Dispute Resolution – Focus on India

4. Twin Asian Cities of Arbitration – Singapore & HK • Regionalisation of Arbitration. • Regional institutions: CIETAC, SIAC, JCAA, KLRCA, PDRC, VIAC, HKIAC …and the list goes on. • Major European International Institutions establishing in the region e.g. ICC, LCIA etc • Singapore & HK emerging as the leaders • NB only Singapore is a‘reciprocating territory’ for the purposes of NY Convention in India. ICC Arbitration & Amicable Dispute Resolution – Focus on India

5. Hong Kong • “Gateway to China”: HK’s greatest appeal and drawback • New Hong Kong Arbitration Ordinance (Cap. 609) effective since 1 June 2011. • Largely modelled on UNCITRAL Model Law: • Key features: • Unified system for domestic & international arbitration • Interim measures (ML provisions adopted) • Express Duty of Confidentiality • Med-Arb/Arb-Med • Bespoke enforcement process for awards rendered in Mainland China ICC Arbitration & Amicable Dispute Resolution – Focus on India

6. Hong Kong (cont.) - Enforcement • Different processes under HK Ordinance for enforcement of: • Awards rendered in NY Convention States • Other Awards (e.g. awards rendered in Taiwan) • Awards rendered in Mainland China (in application of Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the Hong Kong Special Administrative Region, which became effective from 1 February 2000. • China’s side: In 2010 China Supreme People’s Court issued “Notice Concerning Questions of Enforcement of Hong Kong Arbitral Awards in the Mainland” – streamline enforcement for ad hoc/institutional awards seated in HK • Conclusion – HK is the ‘seat’ of choice for China-related matters. ICC Arbitration & Amicable Dispute Resolution – Focus on India

7. Hong Kong (cont.) Med/Arb – Arb/Med • What is it? • Med/Arb – Arbitrator acts as a mediator at the out-set of matter, then proceeds as arbitrator if matter does not resolve. • Arb/Med – Arbitrator ‘swaps hats’ to act as mediator • China influence (CIETAC Arbitration Rules – Article 40) • Benefits • Familiarity with the case and parties ICC Arbitration & Amicable Dispute Resolution – Focus on India

8. Med-Arb cont. • Disadvantages: • Arbitrator wearing ‘two hats’ may not be able to distinguish between roles • Disclosure requirement under s34 of Arbitration Ordinance on Arbitrator if mediation fails to disclose to all other parties any confidential information obtain during the mediation that is “material to the arbitration proceedings” …may dissuade parties from frank discussions during mediation. • Recent example: Impression of bias post mediation → enforcement refused: Gao Haiyan v Keeneye Holdings Ltd [2011] HKEC 514. ICC Arbitration & Amicable Dispute Resolution – Focus on India

9. Med-Arb cont. • Gao Haiyan v Keeneye Holdings Ltd [2011] HKEC 514 • Facts of the case: The tribunal wearing their ‘mediator hats,’ wined and dined friend of one of the parties and suggested friend “work on” that party with a proposed settlement figure. • HK court may refuse to enforce if it would be “contrary to public policy” (s40E(3) of the Arbitration Ordinance (Cap. 341)). • Public policy: incl. “award made in circumstances that would cause a fair minded observer to apprehend a real possibility of bias on the part of the arbitral tribunal” • Inherent risk of Med-Arb. ICC Arbitration & Amicable Dispute Resolution – Focus on India

10. Snapshot #1: Malaysia • Recent‘upgrade’to the Arbitration Act 2005: Arbitration (Amendment) Act 2011 (shortly to come into effect). • Highlights: • Clear wording to preclude court intervention except in limited circumstances • Power to grant interim measures for arbitrations with seat outside Malaysia • Narrowing of ground of appeal on a question of law → must be a question of law that “substantially affects the rights of one or more of the parties.” ICC Arbitration & Amicable Dispute Resolution – Focus on India

11. Snapshot #2: Thailand • One step forward – two steps back. • Pro-arbitration trends up to the early 00s, incl: • Arbitration Act BE 2545 2002 (Model Law based); • Party to the NY Convention • Arbitration clauses included in government contracts • Anti-arbitration in recent history • 2004: resolution of Cabinet in 2004 that no arbitration clause in any administrative contracts between private entity & govt. → (Thai govt. loses investor-state arbitration) • 2009: blanket ban on arbitration clause in all contracts between private entity & govt. (with some exceptions on a case-by-case basis subject to approval by cabinet). • Anti-arbitration court decisions and obstructive parties. ICC Arbitration & Amicable Dispute Resolution – Focus on India

12. Snapshot #3: Indonesia • State of Play • Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution (no Official English language version). • Indonesian national arbitration institution BANI often required by State entities: (although BPMIGAS (upstream oil and gas regulator), has been known to agree to off-shore in recent times). • Bad reputation and a number of traps and tricks to bear in mind (especially if arbitration is Indonesia-seated), but Indonesian courts increasingly enforcing foreign awards. ICC Arbitration & Amicable Dispute Resolution – Focus on India

13. India as a ‘seat’ for International Arbitration • What do arbitration users say makes a good seat? 62%* of in-house counsel say the #1 criteria is Formal Legal Infrastructure, i.e. 3 key components: • National Arbitration Law; • Track Record in Enforcing Agreements to Arbitrate and Arbitral Awards; • Neutrality and Impartiality of Legal System. *Source: White & Case/Queen Mary 2010 International Arbitration Survey: Choices in International Arbitration” ICC Arbitration & Amicable Dispute Resolution – Focus on India

14. India as a ‘seat’ – Singapore Case Study The 3 Key Components – Singapore example • National Arbitration Law • Most recent amendments to International Arbitration Act implemented in 2010; • Active legislature – amendments to improve the legislation made in a matter of months. • Track Record in Enforcing Agreements to Arbitrate and Arbitral Awards • Non-interventionist, pro-arbitration approach of judiciary to arbitrations. • Exemplary record for the enforcement of foreign arbitral awards; • Neutrality and Impartiality of Legal System • Singapore listed as first in the world for neutrality under the Corruption Perceptions Index ICC Arbitration & Amicable Dispute Resolution – Focus on India

15. India as a ‘seat’ – Singapore case study • Additional ‘ingredients’ in a good seat: “…it appears that the promotion of Singapore as an arbitral seat with conferences and the active involvement of more arbitral institutions (such as ICC and AAA/ICDR) have paid dividends and Singapore clearly emerges as the most popular Asian seat”* Source: White & Case/Queen Mary 2010 International Arbitration Survey: Choices in International Arbitration” • Maxwell Chambers opened. Occupiers include: ICC,SIAC, ICDR, ICSID, PCA, LCIA, WIPO, SCMA, CIArb, SIArb * Source: White & Case/Queen Mary 2010 International Arbitration Survey: Choices in International Arbitration” ICC Arbitration & Amicable Dispute Resolution – Focus on India

16. Future of Arbitration in the Region • Growth of more be-spoke rules tailored to cultures in the region (e.g. Med-Arb). • Institutional rules likely to increasingly tailor to provide for Expedited Procedures. • Enforceability remains the key factor. ICC Arbitration & Amicable Dispute Resolution – Focus on India

17. Ratification/Accession State Bangladesh 1992 Brunei 1996 Cambodia 1960 Hong Kong SAR (1997 via PRC) India 1960 Indonesia 1981 Japan 1961 Laos 1998 Malaysia 1985 Mongolia 1994 Nepal 1998 Pakistan 2005 People's Republic of China 1987 Philippines 1967 Singapore 1986 South Korea 1973 Sri Lanka 1962 Thailand 1959 Vietnam 1995 Enforcement of the New York Convention Non-members of the New York Convention include: Bhutan, North Korea, Taiwan and Myanmar 17 ICC Arbitration & Amicable Dispute Resolution – Focus on India

18. Arbitration-friendly jurisdictions • Top of the class: • Hong Kong • Singapore • Japan • Generally reliable: • Malaysia • South Korea 18 ICC Arbitration & Amicable Dispute Resolution – Focus on India

19. Arbitration-friendly jurisdictions • Improvement / further improvement required: • China • Vietnam • Philippines • Thailand • India • Indonesia 19 ICC Arbitration & Amicable Dispute Resolution – Focus on India

20. Developments in Arbitration in Asia Pacific – A Regional Perspective