Daniel Gaw

Introduction

When determining the seat of arbitration and the proper law of an arbitration agreement, is it relevant that the choice of a particular seat and/or law may invalidate the arbitration agreement? In BNA v. BNB,[1] the Singapore Court of Appeal (“SGCA”) reached a result that effectively answered this question in the negative. Specifically, the Court held that the law of the People’s Republic of China (“PRC”) governed an arbitration agreement despite a real risk that the arbitration agreement would be rendered invalid as a result. In doing so, the Court reversed the decision of the Singapore High Court (“SGHC”),[2] which had held that Singapore law governed the arbitration agreement.

This paper takes a closer look at the case and highlights three key takeaways relating to: (a) the express choice of law for an arbitration agreement; (b) the implied choice of law for an arbitration agreement; and (c) the relevance of the validation principle. It concludes that the SGCA’s decision was correct notwithstanding the unsatisfactory outcome for the party that relied on the arbitration agreement.

Summary of the Case

Facts

In BNA v. BNB, the Korean sellers commenced arbitration against a Chinese buyer for alleged non-payment of amounts due under a contract for the sale of industrial gases (the “Agreement”). Article 14.1 of the Agreement provided that “[t]his Agreement shall be governed by the laws of the People’s Republic of China”, while Article 14.2 provided for disputes to be “submitted to the Singapore International Arbitration Centre (SIAC) for arbitration in Shanghai, which will be conducted in accordance with its Arbitration Rules”.

The buyer objected to the tribunal’s jurisdiction. It contended that the arbitration agreement was invalid because: (a) the arbitration was seated in the PRC and the arbitration agreement governed by PRC law; (b) PRC law prohibited a foreign arbitral institution like SIAC from administering the arbitration of a domestic dispute; and (c) in any event, even if the dispute had sufficient foreign elements, PRC law nonetheless prohibited a foreign arbitral institution from administering an arbitration seated in the PRC.

The tribunal’s decision

The majority of the tribunal held that it had jurisdiction over the dispute because: (a) the arbitration was seated in Singapore; (b) the arbitration agreement was thereby governed by Singapore law; and (c) PRC law was therefore irrelevant on the question of jurisdiction.[3] In reaching that decision, the majority applied the validation principle and effective interpretation principle, which it summarised as follows: “[I]t makes no commercial or logical sense for parties to intentionally select a law to govern an arbitration agreement which would then invalidate it.”[4] The dissenting arbitrator, however, took the view that the tribunal lacked jurisdiction because: (a) the proper law of the parties’ arbitration agreement was PRC law; (b) the parties’ dispute was classified in PRC law as a domestic dispute; and (c) PRC law prohibited a foreign arbitral institution from administering the arbitration of a domestic dispute.[5]

The SGHC’s decision

Dissatisfied with the tribunal’s jurisdictional decision, the buyer asked the SGHC to decide the issue pursuant to Section 10(3) of the Singapore International Arbitration Act. The SGHC upheld the tribunal’s jurisdiction on the basis of two key findings.

First, the court considered that the arbitration agreement referred not only to Shanghai, but also Singapore, as a potential seat of arbitration. Specifically, the reference to the SIAC Rules included Rule 18.1 thereof, which provided that if the parties did not agree on a seat of arbitration, then it shall be Singapore unless the tribunal determines otherwise.[6] The question was therefore whether the phrase “arbitration in Shanghai” amounted to an agreement by the parties on the seat of arbitration. As a matter of construction, the court held that the reference to Shanghai merely identified the venue of arbitration and not a seat, as Shanghai was a city and not a law district.[7] In contrast, the express reference to the SIAC Rules was “the clearest possible manifestation” of the parties’ intention to have their arbitrations seated in Singapore.[8]

Having found that Singapore was the seat of arbitration, the SGHC turned to determine the proper law of the arbitration agreement, applying the three-stage choice of law analysis set out by the English Court of Appeal in Sulamérica v Enesa Engelharia SA:[9] (a) Have the parties expressly chosen the proper law of their arbitration agreement? (b) If not, have they impliedly done so? (c) If there is no express or implied choice, then with what system of law does the arbitration agreement have its closest and most real connection?[10]

            Under the first stage, the court found that the express choice of law to govern the main contract did not amount to an express choice of law in respect of the arbitration agreement. Proceeding to the second stage, the court accepted that the starting point was that the proper law of the contract (PRC law) would also govern the arbitration agreement.[11] It held, however, that this presumption was displaced in favour of the law of the seat (Singapore law). This was because the choice of PRC law “would defeat the parties’ manifest intention to resolve their disputes through arbitration”.[12] Interestingly, the court did so despite having rejected the validation and the effective interpretation principles as being “nakedly instrumental”.[13]   

The SGCA’s decision

On appeal, the SGCA reversed the SGHC’s decision. The key point of departure for the SGCA was the SGHC’s interpretation of the phrase “in Shanghai” as referring merely to the venue of arbitration and not the seat. In the SGCA’s view, “where parties specify only one geographical location in an arbitration agreement, and particularly where, as here, the parties express a choice for ‘arbitration in [that location]’, that should most naturally be construed as a reference to the parties’ choice of seat”.[14] The fact that Shanghai is not a law district was immaterial as commercial parties often only specify either the city or country in their arbitration agreements.[15] Given that the parties had agreed on the PRC as the seat of arbitration, the default choice of Singapore as the seat under SIAC Rule 18.1 did not apply.

Turning to the proper law of the arbitration agreement, the Court held that the express choice of PRC law to govern the main contract did not constitute an express choice of law for the arbitration agreement.[16] It did, however, amount to an implied choice of law for the arbitration agreement.[17] There was nothing to displace this implied choice because the law of the seat was also PRC law.[18] It followed that the validity of the arbitration agreement was to be determined by the PRC courts applying PRC law.

Analysis

The SGCA’s decision is noteworthy for three points which are discussed further below. 

Express choice of law for an arbitration agreement

            The SGCA decided that an express choice of law in respect of the main contract does not, in and of itself, also constitute an express choice of the same law in respect of the arbitration agreement. The SGCA’s approach is consistent with the concept that the arbitration agreement is separable from the main contract and more specific words are required to make an express choice of law in respect of the arbitration agreement. 

That said, no absolute rule can be laid down in this regard, and it is ultimately a matter of contract interpretation as to whether the parties have expressly chosen a law for their arbitration agreement. For instance, if the parties define the term “Agreement” in a manner that clearly includes the arbitration agreement therein and then subject the entire “Agreement” to a particular law, then that may amount to an express choice of law in respect of the arbitration agreement.[19] 

Implied choice of law for an arbitration agreement

Common law courts have diverged on the issue of whether the law of the main contract or the law of the seat should be presumed to be the implied choice of law for an arbitration agreement. In Singapore, an Assistant Registrar concluded that it should be the law of the seat,[20] while other High Court decisions have ruled in favour of the law of the main contract.[21] Likewise, in the recent UK case of Enka v. Chubb, the Court of Appeal and Supreme Court arrived at different conclusions on this issue – the former preferred the law of the seat,[22] while the latter held in favour of the law of the main contract.[23] The SGCA’s decision in BNA v. BNB confirms that, as a matter of Singapore law, the law of the main contract will presumptively be the implied choice of law for the arbitration agreement, and the choice of a different seat is insufficient to displace that presumption.

Relevance of validation principle

The SGCA purported not to address the validation principle when determining the proper law of the arbitration agreement, reasoning that it had no scope for operation in a case where both the law of the main contract and the law of the seat was PRC law.[24] In this author’s view, however, the Court had implicitly rejected the validation principle when determining that the seat of arbitration was Shanghai. Specifically, the Court held that the potentially invalidating effect of PRC law was irrelevant when determining whether the phrase “arbitration in Shanghai” referred to the venue or the seat of arbitration. This was because there was no evidence that the parties were aware that the choice of proper law of the arbitration agreement could have an impact upon its validity.[25] The Court’s reasoning here was arguably an implicit rejection of the validation principle, which “rests on the rational assumption that parties would prefer to have an agreement upheld than not”[26] and does not require actual evidence that the parties had actually turned their minds to the issue of validity in a particular case.

It is submitted that the SGCA’s approach was correct. The validation principle cannot be used to override a clear and express term of the contract simply because giving effect to that term would invalidate the contract or part of it. In this case, the natural meaning of the phrase “arbitration in [city/country]” is that the specified location would be the seat of arbitration, as confirmed by numerous cases and commentaries.[27] Had the word “Shanghai” been substituted with another city (e.g. London), a court or tribunal would undoubtedly have no difficulty with interpreting that phrase as designating the seat of arbitration. It would be unprincipled to depart from the parties’ express choice of the arbitral seat simply because that choice results in certain undesirable outcomes that they perhaps might not have foreseen.  

Conclusion

The SGCA decided in BNA v. BNB that the words of an arbitration agreement should be given their natural meaning unless there are sufficient contrary indicia to displace that reading, and “the parties’ manifest intention to arbitrate is not to be given effect at all costs”.[28] The decision was correct as it is not the function of the courts to save the parties from the consequences of poorly drafted or ill-advised arbitration clauses. It underscores the importance of choosing the seat of arbitration and proper law of the arbitration agreement with care. 

Daniel Gaw is an LL.M. candidate (Vanderbilt Scholar) in the International Business Regulation, Litigation and Arbitration program at the NYU School of Law and an Associate in Dechert LLP’s International Arbitration group. He holds a Bachelor of Laws (First Class Honours) from the National University of Singapore and was formerly a Justices’ Law Clerk of the Supreme Court of Singapore.

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[1] [2019] SGCA 84.

[2] [2019] SGHC 142.

[3] BNA v. BNB [2019] SGHC 142 ¶ 8.

[4] BNA v. BNB [2019] SGCA 84 ¶ 18.

[5] Id.

[6] BNA v. BNB [2019] SGHC 142 ¶ 104.

[7] Id. ¶ 108.

[8] Id. ¶ 109.

[9] [2013] 1 WLR 102.

[10] BNA v. BNB [2019] SGHC 142 ¶ 17.

[11] Id. ¶ 111.

[12] Id. ¶ 117.

[13] Id. ¶¶ 48 and 53.

[14] BNA v. BNB [2019] SGCA 84 ¶ 65.

[15] Id. ¶ 92.

[16] Id. ¶ 61.

[17] Id. ¶ 62.

[18] Id. ¶ 94.

[19] Kabab-Ji SAL v Kout Food Group [2020] EWCA Civ 6 ¶ 62.

[20] FirstLink Investments Corp Ltd v GT Payment Pte Ltd [2014] SGHCR 12 ¶ 16.

[21] BCY v BCZ [2016] SGHC 249 ¶ 65; Dyna-Jet Pte Ltd v Wilson Taylor Asia Pacific Pte Ltd [2016] SGHC 238 ¶ 31.

[22] [2020] EWCA Civ 574 ¶ 91.

[23] [2020] UKSC 38 ¶ 170(iv).

[24] BNA v. BNB [2019] SGCA 84 ¶ 95.

[25] Id. ¶ 90.

[26] Enka v. Chubb [2020] UKSC 38 ¶ 198 (dissenting judgment of Lord Burrows).

[27] BNA v. BNB [2019] SGCA 84 ¶¶ 66-68.

[28] Id. ¶ 104.

Professor Franco Ferrari, the Center’s Director, and Dr. Friedrich Rosenfeld, Global Adjunct Professor at NYU Law in Paris, Visiting Professor at the International Hellenic University in Thessaloniki and Lecturer at Bucerius Law School in Hamburg, have co-authored a book entitled “International Commercial Arbitration: A Comparative Introduction” for which Adjunct Professor John Fellas acted as Consultant Editor.

The book is a concise comparative introduction to international arbitration. With reference to recent case law from leading arbitration jurisdictions and up-to-date rules revisions (including by the German Arbitration Institute, HKIAC, the International Chamber of Commerce, the London Court of International Arbitration (LCIA), the Singapore International Arbitration Centre SIAC), and the Vienna International Arbitration Centre), it provides a comparative analysis of the issues raised in arbitration, from the time of #drafting of arbitration clauses to the rendering of the award and the post-award stage. After introductory remarks on the applicable normative framework, the book covers arbitration agreements and their enforcement, the initiation of #proceedings, the constitution of the tribunal, the taking of evidence, issues arising in complex arbitrations, as well as the #award and the post-award regime.

More information can be found on the publisher’s website.

Introduction

The doctrine of separability, which provides that the invalidity of the substantive commercial contract does not affect the validity of the arbitration agreement except if the arbitration agreement itself is directly impeached as void ab initio, has been widely accepted in the arbitration jurisprudence.

[1] However, it has been adopted by the Indian Supreme Court (“Court”) only recently. By way of its judgment in N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. & Others (“N.N. Global Judgment”), the Court has for the first time answered in negative – “Whether an arbitration agreement would be non-existent in law, invalid or un-enforceable, if the underlying contract was not stamped as per the relevant Stamp Act?”[2]

The N.N. Global Judgment is noteworthy as by applying the doctrine of separability of arbitration agreement from the underlying contract, the Court has undertaken a complete departure from its previous decisions. It has declared that its previous judgments which held that the non-payment of stamp duty on a commercial contract would invalidate even the arbitration agreement and render it non-existent in law and un-enforceable, are bad in law.[3] In fact, since this is the first time the Court has adopted a diametrically opposite view on this issue in complete dismissal of the precedent set by its co-ordinate bench, the issue has now been referred to a Constitution Bench of five judges of the Court so that the law may be authoritatively settled.[4]   

Factual and Procedural Background

Indo Unique had entered into a contract with the Karnataka Power Corporation Ltd. (“KPCL”) pursuant to an open tender. Subsequently, Indo Unique executed a sub-contract, being Work Order dated September 28, 2015 (“Work Order”), with M/s N. N. Global Mercantile Pvt. Ltd. (“Global Mercantile”) for transportation of coal. Clause 10 of the Work Order incorporated an arbitration clause providing for resolution of disputes by an arbitrator appointed by mutual consent. Further, in satisfaction of the requirements of Clause 9 of the Work Order, Global Mercantile had furnished a bank guarantee for INR 33.6 million in favor of the State Bank of India, the banker of Indo-Unique. Thereafter, certain disputes arose between Indo Unique and KPCL. Consequently, Indo Unique invoked the bank guarantee furnished by Global Mercantile under the Work Order.

In response, Global Mercantile filed a commercial suit against Indo Unique and its banker seeking a declaration that Indo Unique was not entitled to fraudulently encash the bank guarantee as the Work Order had not been acted upon and no loss was suffered by Indo Unique as a result. Pursuant thereto, Indo Unique filed an application before the Commercial Court under Section 8 of the Arbitration and Conciliation Act (“Arbitration Act”) seeking reference of the dispute to arbitration. This was opposed by Global Mercantile as not maintainable since the bank guarantee was an independent contract. By way of judgment dated January 18, 2018, the Commercial Court accepted Global Mercantile’s argument and rejected the application while holding that its jurisdiction was not ousted by the arbitration agreement in the Work Order.

Challenging the decision of the Commercial Court, Indo Unique approached the Bombay High Court with a writ petition[5]. The High Court, by way of judgment dated September 30, 2020, set aside the Commercial Court’s judgment. It held that it was the admitted position that there was an arbitration agreement between the parties and therefore the application under Section 8 was maintainable. The High Court further held that the issue that the non-stamping of the Work Order rendered the arbitration agreement unenforceable could be raised by Global Mercantile before a court under Section 11[6] of the Arbitration Act or before the arbitral tribunal. Aggrieved by the decision of the High Court, Global Mercantile approached the Court.

Analysis Of The N.N. Global Judgment

Numerous issues were raised by Global Mercantile before the Court, however this paper concentrates on the findings of the Court on the issue – “Whether an arbitration agreement would be enforceable and acted upon, even if the Work Order dated 28.09.2015 is unstamped and un-enforceable under the Stamp Act?”[7]. Global Mercantile argued that the application under Section 8 of the Arbitration Act for reference of disputes to arbitration was not maintainable. It contended non-maintainability on the ground that the Work Order not being stamped as per the relevant Stamp Act could not be received in evidence or acted upon, thus, the arbitration clause contained therein also could not be enforced. On the other hand, Indo Unique contended that non-payment of stamp duty on the Work Order was a curable defect and did not render the Work Order unenforceable. Therefore, opportunity should be granted to Indo Unique to cure the defect by paying the deficient stamp duty.  

The Court, while arriving at its holdings in the N.N. Global Judgment, analyzed the development of the doctrine of separability internationally through judgments delivered in the United Kingdom[8], United States[9] and France[10]. The Court acknowledged that Section 16 of the Arbitration Act recognizes the doctrine of separability and kompetenz-kompetenz in India. Further, Section 5 and Section 11 of the Arbitration Act enshrine the legislative policy of minimal judicial intervention. A conjoint reading of Section 5 and Section 16 of the Arbitration Act reveals that the issue whether the main contract is voidable is to be resolved through arbitration. On a careful perusal of the relevant Stamp Act, the Court opined that stamp duty is not chargeable on an arbitration agreement and is only payable on the main contract. The non-payment of stamp duty on the Work Order did not invalidate it but only created a deficiency which could be cured by payment of the requisite stamp duty.

The Court held that on an application of the doctrine of separability – (a) the arbitration agreement contained in the Work Order being independent and distinct from the underlying contract; and (b) no stamp duty being chargeable on it – the arbitration agreement would survive independent of the Work Order. Arbitration agreement would not be rendered invalid or unenforceable on the ground that the contract containing it cannot be acted upon due to non-payment of stamp duty. The N.N. Global Judgment declared that the previous judgments on this issue are bad in law for not upholding the doctrine of separability. Further as a co-ordinate three-judges’ bench of the Court had previously arrived at a contrary decision, in deference to the doctrine of stare decisis, the issue was referred to a Constitution Bench of the Court for authoritative determination.

Comments On The N.N. Global Judgment

The issue of enforceability of an arbitration agreement contained in an unstamped agreement has previously been addressed by the Court in numerous judgments. The Court in SMS Tea Estates Pvt. Ltd. v. M/s Chandmari Tea Co. Pvt. Ltd.[11] held that until the payment of stamp duty with penalty, a court cannot act upon the contract which means consequently the court cannot act upon the arbitration agreement contained in the contract. This issue also came up for the consideration of the Court in 2019 in Garware Wall Ropes Limited v. Coastal Marine Constructions and Engineering Limited[12] wherein it was held that the Stamp Act applies to the whole contract, hence, it is impossible to separate the arbitration clause contained in the contract from the remainder of the contract to give the arbitration clause an independent existence. This position of the Court was further cited with approval by a three judges’ bench in Vidya Drolia & Ors. v. Durga Trading Corporation[13], which held that arbitration agreement presupposes the existence of a valid and enforceable agreement, so it does not exist when a party cannot sue and claim rights based on an unenforceable agreement.

The Court by way of the NN Global Judgment was right in declaring the judgment in SMS Tea Estates Pvt. Ltd. and Garware Wall Ropes Limited as bad in law and doubt the correctness of the view adopted in Vidya Drolia & Ors. as these judgmentscompletely disregard the well-established doctrine of separability.[14]The doctrine of separability is incorporated in Article 16(1) of the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”) which provides that a decision of the arbitral tribunal that a contract is null and void will not automatically render the arbitration clause invalid. The Arbitration Act was codified and implemented in India with a view to implement the Model Law to create a unified legal framework for the fair and efficient settlement of disputes.[15] In fact the doctrine of separability contained in Article 16(1) of the Model Law is codified in Section 16(1) of the Arbitration Act. Therefore, the previous judgments of the SC clearly failed to appreciate that the doctrine of separability is the mandate of the codified law in India and are thus bad in law. 

The legislative policy of promoting arbitration by limiting judicial intervention in arbitration can be gleaned from the 2015 amendment to Section 11 of the Arbitration Act. The Court has interpreted the amendment to reflect the legislative intent that at the pre-reference stage, courts seized of the matter must exercise minimal judicial intervention and only decide on the issue of existence of arbitration agreement.[16] The Court has repeatedly emphasized that under the now amended Section 11(6A) of the Arbitration Act, in deference to the doctrine of kompetenz-kompetenz embodied in Section 16, the scope of court’s examination is limited to determining the existence of the arbitration agreement and all other preliminary / threshold issues are to be decided by the arbitrator.[17] Thus, once a court has prima facie determined that an arbitration agreement exists, issues regarding the invalidity of the agreement due to non-stamping have to be referred to an arbitrator in terms of the arbitration agreement.

Further, the stamp duty is only a fiscal measure to secure revenue and not a weapon of technicality, so there is no bar on an unstamped instrument being acted upon once the defect is cured.[18] In any event, under the Stamp Act no stamp duty is levied on an arbitration agreement. Hence, non-stamping of the main agreement (a) does not affect the validity of the arbitration agreement; and (b) does not render the main agreement void and is only a technical defect which can be cured by payment of stamp duty and penalty. This being the case, a party cannot be permitted to misuse the Stamp Act to deny the other party the pre-agreed remedy of arbitration.  

The N.N. Global Judgment, by accepting the doctrine of separability, has finally brought the Indian arbitration law in line with the international practices. The UK Court of Appeal, while accepting that the principle of separability exists in English Law, had held that if the arbitration clause is not directly impeached it is capable of surviving the invalidity of the contract so that the arbitrator has the jurisdiction to determine the initial validity of the contract.[19] When the validity of the contract is challenged, the arbitration agreement is treated as an autonomous procedural contract and not as an element of a material-legal contract.[20] The internationally accepted doctrine of separability has finally been accepted and applied by India’s apex court.

Conclusion

In recent times, the Court has adopted a policy to promote India as an arbitration-friendly nation. This is evident from its decision in A. Ayyasamy v. Parmasivam & Ors., wherein it held – “The Arbitration and Conciliation Act, 1996, should in my view be interpreted so as to bring in line the principles underlying its interpretation in a manner that is consistent with prevailing approaches in the common law world. Jurisprudence in India must evolve towards strengthening the institutional efficacy of arbitration. Deference to a forum chosen by parties as a complete remedy for resolving all their claims is but part of that evolution.”[21] The N.N. Global Judgment is another in a series of pro-arbitration judgments of the Court aimed at evolving a robust framework of Indian arbitration law, benchmarked against the best international practices. The World Bank’s Doing Business 2020 report reveals that India ranks 63^rd in the ‘Ease of Doing Business Rankings’.[22] Promoting India as an arbitration-friendly jurisdiction is vital for attracting more investments and the N.N. Global Judgment is a welcome step in that direction.

Ananya Dhar Choudhury is an LL.M. candidate in the International Business Regulation, Litigation and Arbitration program at the NYU School of Law. Prior to attending NYU, she worked as an Associate with the Litigation and Disputes Resolution team at Cyril Amarchand Mangaldas, a leading full-service law firm in India.

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[[1]] Tibor Varady et al., International Commercial Arbitration: A Transnational Perspective 192 (7th ed. 2019).

[[2]] N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. & Others, 2021 SCC OnLine SC 13 at ¶1.

[[3]] Id. at ¶12.

[[4]] Ibid.

[[5]] Under Article 226 of the Constitution of India, every High Court has the power to issue to any person, in its territories, any direction for the enforcement of any of the rights and for any other purpose. Further, Article 227 of the Constitution of India bestows the High Court with supervisory jurisdiction over all courts and tribunals throughout its territorial jurisdiction. Therefore, in this case the Bombay High Court had supervisory jurisdiction over the Commercial Court to pass any direction it deems fit.

[[6]] If the parties fail to agree on the appointment of an arbitrator or tribunal, then either party may approach the court under Section 11 of the Arbitration Act requesting the court to make such an appointment. The decision of the court, pursuant to such a request, is final.

[[7]] N. N. Global Mercantile Pvt. Ltd., supra at ¶2.

[[8]] The House of Lords in Fili Shipping Co. Ltd. and others v. Premium Nafta Products Ltd. and Others, [2007] UKHL 40 held that the main agreement and the arbitration agreement must be treated as having been separately concluded. The arbitration agreement can be invalidated only on a ground which relates to the arbitration agreement and not as a mere consequence of the invalidity of the main agreement.

[[9]] The US Supreme Court in in Buckeye Check Cashing, Inc. v. Cardegna et. al., US SC 440 (2006) held that challenge to the contract does not prevent a court from enforcing a specific agreement to arbitrate contained therein.

[[10]] The French Cour de Cassation in Gosset v. Caparelli, Cass. Civ. Lere, 7 May 1963 (Dalloz, 1963), 545 held that the arbitration agreement is completely autonomous in law and remains unaffected by the possible invalidity of the main contract.

[[11]] (2011) 14 SCC 66 at ¶19.

[[12]] (2019) 9 SCC 209 at ¶19, 22.

[[13]] (2021) 2 SCC 1 at ¶147.

[[14]] N. N. Global Mercantile Pvt. Ltd., supra at ¶6.10, 6.12.

[[15]] Preamble to the Arbitration Act; Harpreet Kaur, The 1996 Arbitration and Conciliation Act: A Step Toward Improving Arbitration in India, 6 Hastings Bus. L.J. 261, 264 (2010).

[[16]] Duro Felguera v. Gangavaram Port Ltd., (2017) 9 SCC 729 (affirmed by a three-judge bench of the Court in Mayavati Trading Pvt. Ltd. v. Pradyuat Deb Burman, (2019) 8 SCC 714).

[[17]] Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd, (2020) 2 SCC 455 at ¶7.8, 7.10.

[[18]] Hindustan Steel Limited v. M/s Dilip Construction Company, (1969) 1 SCC 597 at ¶7.

[[19]] Harbour Assurance v. Kansa General International Insurance, [1993] 1 Lloyd’s Rep. 455 (CA).

[[20]] Sojuznefteexport v. Joc Oil Limited, 15 Yearbk. Comm. Arb’n 384 (1990).

[[21]] A. Ayyasamy v. Parmasivam & Ors., (2016) 10 SCC 386 at ¶53.

[[22]] World Bank Group, Doing Business 2020, World Bank, https://openknowledge.worldbank.org/bitstream/handle/10986/32436/9781464814402.pdf.

Adjunct Professor Pedro Martinez-Fraga was invited to teach a course on private international law at the prestigious Hague Academy of International Law. The Hague Academy, which, since its creation in 1923, has occupied premises at the Peace Palace in the Hague, alongside the highest judicial institutions such as the International Court of Justice and the Bureau of the Permanent Court of Arbitration, is a centre for research and teaching in public and private international law, with the aim of further scientific and advanced studies of the legal aspects of international relations. It does not have a permanent teaching staff, but its scientific body, the Curatorium, freely calls upon academics, practitioners, diplomats, and other personalities from all over the world whom it considers qualified to give courses, in English or French (with simultaneous interpretation). These courses are given in the form of a series of lectures, on general or special subjects.

Professor Martinez-Fraga, a leading practitioner in the field of investor-State international arbitration, international commercial arbitration, and transnational litigation, including complex jurisdictional disputes concerning common law and civil law issues, and co-leader of the International Arbitration practice of Bryan Cave Leigthon Paisner, joins the ranks of other NYU faculty who over the years have taught courses at the Hague Academy, such as Professor Franco Ferrari (Forum shopping despite unification of law, 413 Collected Courses of the Hague Academy of International Law (2021)), Professor Ryan Goodman (International Humanitarian Law and the Use of Lethal Force, 2019), Professor José Alvarez (The public international law regime governing international investment, 344 Collected Courses of the Hague Academy of International Law 193 (2009)), Professor Linda J. Silberman (Cooperative efforts in private international law on behalf of children: the Hague Children’s Conventions,  323 Collected Courses of the Hague Academy of International Law 261 (2006)), who will also give the General Course on private international law during the Hague Academy’s 2021 summer session, Theodor Meron (International law in the age of human rights, 301 Collected Courses of the Hague Academy of International Law 9 (2003), and Status and independence of the international civil servant, 167 Collected Courses of the Hague Academy of International Law 285 (1980)), and late Professors Thomas M. Franck (Fairness in the international legal and institutional system, 240 Collected Courses of the Hague Academy of International Law 9 (1993), and Minimum standards of public policy and order applicable to collective international commodity negotiations, 160 Collected Courses of the Hague Academy of International Law 395(1978)), and Andreas F. Lowenfeld (International litigation and the quest for reasonableness : general course on private international law, 245 Collected Courses of the Hague Academy of International Law 9 (1994), and Public law in the international arena : conflict of laws, international law, and some suggestions for their interaction, 163 Collected Courses of the Hague Academy of International Law 311 (1979)).

On June 7, 2021, from 9.30 to 10.45 am NY time, the Center will host, together with the Milan Chamber of Arbitration, a webinar focusing on the study entitled “Responsible private funding of litigation” authored by Jérôme Saulnier with Ivona Koronthalyova and Klaus Müller, European Added Value Unit, Directorate-General for European Parliamentary Research Services (EPRS), and the research paper annexed to it entitled “State of play of the EU private litigation funding landscape and the current EU rules applicable to private litigation funding”, co-written by Professors Cristina Poncibò and Elena D’Alessandro, University of Turin, Law Department, with cooperation, inter alia, by Dr. Niccolò Landi. While the study aims at determining whether and why the European Union should act in the field of private litigation funding, the research paper’s goal is to give a comprehensive overview of private litigation funding (or third-party litigation funding – TPLF) in the European Union, by describing the main players on the European TPLF market (i.e. funders, claimants and lawyers) and analyzing the EU legal framework.

The event will also compare the key findings of the study and research paper, to be identified by Professor Cristina Poncibò and Dr. Niccolò Landi and Professor Marco Torsello, with private litigation funding in the commercial arbitration context, a topic to be addressed by Dr. Domenico Di Pietro.

Professor Franco Ferrari will moderate the event.

For more information, including how to register, see the flyer.

On 6 May 2021, at 12.30 pm NY time, Professor Franco Ferrari, the Center’s Director, will deliver a lecture on “Limits to Party Autonomy in International Commercial Arbitration”, based on a paper co-authored with Dr. Friedrich Rosenfeld to be published in the forthcoming Cambridge Compendium of International Commercial and Investment Arbitration, which Professor Ferrari is editing together with Professors Andrea Bjorklund (McGill) and Stefan Kröll (Bucerius). The event is co-hosted by and DIS40 (Young Arbitration Practitioners of the Deutsche Institution für Schiedsgerichtsbarkeit e.V. (DIS) – German Arbitration Institute.

In his talk, Professor Ferrari will challenge the liberalist premise that international arbitration is a process between two rational parties who are at liberty to choose how to resolve their disputes by means of alternative dispute resolution. But he will do so without any intention to downplay the key role of party autonomy or to depart from the liberalist tradition. The point that will be made is simply that arbitration involves at least four potential stakeholders whose interests may overlap in some cases but diverge in others. And this entails limitations to party autonomy.

To register and receive the access code for the online meeting, send an email to germany@aia-arbit-40.org.

Professor Franco Ferrari, the Center’s Director, will give a talk entitled “Relevance of the Seat for International Commercial Arbitrations”. The talk, to be given on Monday, April 19^th, 2021, starting at 8.30 am NY time, and hosted by the Center for Alternative Dispute Resolution of Jindal Global Law School, will show that, despite statements to the contrary, the seat is important at all stages of an arbitration’s life-span. At the pre-award stage, the seat triggers the application of the arbitration regime in the very many States in which the arbitration regime is based on the territorial approach. The seat also determines where the arbitral award “was made”, which is essential for the post-award stage (both for set-aside and recognition and enforcement proceedings). As Professor Ferrari will show, from this it follows that in international arbitration choosing the seat is of paramount importance. Foregoing the choice of the seat means giving up an arbitration planning tool, for which there is no appropriate remedy.

Further information, including how to register, is available on the flyer.

The Center for Transnational Litigation, Arbitration, and Commercial law together with NYU’s International Arbitration Association will be hosting a webinar entitled “What parties really want: a general counsel’s view of arbitration.” The webinar will take place on 5 April 2021, from 6.30 pm. to 7.45 pm.

A lot has been written about the presumed advantages of arbitration. This webinar will focus on whether these writings reflect the view general counsel has of arbitration and its advantages over litigation, and whether there are specific arbitration related issues of particular interest to general counsel.

The speakers will be Edgar Martinez and John Fellas. Franco Ferrari will moderate the event.

Edgar Martinez is the General Counsel of Japan Tobacco International Mexico, which commercializes the Camel, Winston and LD tobacco brands in the Country. He has been listed by the Legal 500 as within the top 100 General Counsels in Mexico. Edgar supports Legal Directors of other jurisdictions within the Company in arbitration matters, including the Global General Counsel.  He is a part time professor at his alma mater, Panamericana University – Mexico City, where he teaches Arbitration and Private International Law. Edgar has experience as counsel in arbitration and arbitrator. He has an L.L.M. in International Commercial Arbitration Law by Stockholm’s University and has been admitted to the Paris bar.

John Fellas is a full time arbitrator at Fellas Arbitration and an adjunct professor at New York University School of Law. He has over three decades of experience in international dispute resolution, and has acted as counsel and has served as co-arbitrator, chair or sole arbitrator in arbitrations all over the world, under all the major arbitration rules, and across a range of sectors. John is recognized as a leading international arbitrator by all the major legal directories including Chambers USA where he is ranked as “one of the best—his reputation is phenomenal and deserved.” He received a B.A. (Hons.) in law from the University of Durham, and both an LL.M. and an S.J.D. from Harvard Law School. 

Franco Ferrari is a Professor of Law and Director of Centre for Transnational Litigation, Arbitration, and Commercial Law at the NYU School of Law. Prior to joining NYU, he was Professor of International Law at Verona University, and Professor of Comparative Law at Tilburg University in the Netherlands and the University of Bologna in Italy. Franco Ferrari has published more than 300 law review articles and book chapters in various languages and 35 books in the areas of international commercial law, conflict of laws, comparative law, and international commercial arbitration. He is a recipient of the 2018 Certificate of Merit for High Technical Craftmanship and Utility to Practicing Lawyers and Scholars awarded by the American Society of International Law for the 4 volume Encyclopedia of Private International Law. He also acts as an international arbitrator both in international commercial arbitrations and investment arbitrations.

Participation in the webinar is free, but it requires registration.

On 10 February 2021, from 14:30 to 16:00 (Rome, Italy time), Professor Ferrari, the Center’s Director, will give a talk regarding the seller’s liability for violating third party intellectual property rights under the United Nations Convention on Contracts for the International Sale of Goods (“CISG”). The issue is addressed in CISG Article 42 and over the years has led to divergent case law. Professor Ferrari will give his talk on the occasion of a conference entitled “Virus, Vaccines and Arbitration Clauses: Orderly Circulation is Key” hosted by the Italian Forum for Arbitration and ADR, the Milan Chamber of Commerce, and the Italian Association for Arbitration (AIA). The conference will address the issues raised by the 28^th Annual Willem C. Vis International Commercial Arbitration Moot.

 To register, please use the link to be found on the conference flyer.

INTRODUCTION

In its recent decision, The Russia Federation v. Luxtona Limited,[1] the Ontario Superior Court addressed the standard of review applicable to a challenge to an arbitral tribunal’s jurisdictional decision under Article 16(3) and 34(2)(a)(iii) of the UNCITRAL Model Law on International Commercial Arbitration. The Court notably dealt with the inclusion of fresh evidence[2] as part of that challenge. The Court ruled that the judicial review of an arbitral tribunal’s jurisdiction takes the form of a review on a “correctness” standard, not a trial de novo. Consequently, while a court may review questions of law to reach the correct decision, it must defer to the arbitral tribunal’s factual findings, unless the challenging party shows the tribunal made a “clear and overriding” error in its appraisal of the facts.[3] As such, parties must obtain leave of the Court to adduce fresh evidence.[4]

This decision breaks from tradition. Ontario case law, like in other Model Law jurisdictions has generally tended more toward a trial de novo approach granting courts unfettered original jurisdiction to determine an arbitral tribunal’s jurisdiction, including the right to make factual findings and rehear witnesses.[5] As such, parties could file fresh evidence as of right.

The Ontario Court’s decision in Luxtona is a welcome evolution. Its outcome achieves an appropriate balance between holding a trial de novo and giving full deference to an arbitral tribunal’s jurisdictional ruling. While the decision regrettably fails to address the strongest arguments from jurisdictions having adopted the trial de novo approach, which opens it up to future challenges, stronger reasons can be offered in support of the “correctness” review approach.

1. SUMMARY OF THE DECISION

In Luxtona, the plaintiff, Luxtona Limited initiated arbitral proceedings against the Russian Federation pursuant to the Energy Charter Treaty for failing to protect its investment in Yukos, one of Russia’s largest oil companies at one point. While Russia signed the Treaty, it had never ratified it. Luxtona argued that Russia was bound by the Treaty and its arbitration clause,[6] since signatories of the Treaty also agree to its provisional application pending ratification.[7] Russia argued that the provisional application of the Treaty is inconsistent with Russian law and therefore, does not apply. Following an initial arbitration hearing in Toronto in which Russian law experts testified for both sides, the arbitral tribunal determined that it had jurisdiction to hear the dispute.[8]

Russia challenged the ruling in the Ontario Superior Court under Articles 16(3) and 34(2)(a)(iii) of the Model Law, in force in Ontario.[9] In support of its application, Russia filed additional expert evidence. Luxtona objected to its inclusion. A first Superior Court judge, Dunphy J., ruled that the evidence could be admitted as of right,[10] referring to the precedent of United Mexican States v. Cargill, Inc.[11] rendered by the Ontario Court of Appeal in 2011. In Cargill, the Court had stated that correctness review “is consistent with the reasoning in [Dallah Real Estate Holdings v. Pakistan].”[12] In that case, rendered months before Cargill, the Supreme Court of the United Kingdom set aside an arbitral award on the basis that the arbitral tribunal did not have jurisdiction to render an award on the parties’ dispute. In reaching its conclusion, the Court heard additional evidence including expert evidence on French law.[13]

The second judge, Penny J., took over the proceedings and ordered submissions from the parties on the standard of review and admissibility of the fresh evidence. At trial, Penny J. ruled that review on a “correctness” standard applies. As such, the court must consider whether the arbitral tribunal has reached the correct decision on jurisdiction. Normally, this will entail deference to the evidence on the arbitral record and thus, a party must obtain leave of the court to submit fresh evidence on a review of the type found under Article 16(3) of the Model Law.[14] Penny J. ruled that a party seeking to adduce fresh evidence must show that the evidence: (1) “could not have been obtained using reasonable diligence, (2) would probably have an important influence on the case, (3) is apparently credible, and (4) is such that, if taken with the other evidence adduced in the arbitration, it would be expected to have affected the result.”[15] Russia conceded that its evidence would be inadmissible under this test.

2. APPRAISAL

Luxtona adopts an appropriately deferential standard of review for a tribunal’s jurisdictional decision. While the decision suffers from its failure to address the strongest arguments for the trial de novo approach, “correctness review” remains appropriate, nonetheless.

First, a review on a “correctness” standard is appropriate to resolve challenges to jurisdictional decisions under Article 16(3) of the Model Law. Under this approach, a court retains the power to overturn an arbitral tribunal while giving deference to the arbitral tribunal’s factual findings. This protects the parties’ consent to arbitrate only disputes agreed upon in advance, while, at the same time, promoting the finality and effectiveness that arbitration seeks to promote.[16]

While the trial de novo approach protects consent to arbitration, this approach overstates the court’s importance in ensuring that the parties’ consent is being respected and devalues the arbitral tribunal’s ability. Indeed, an arbitral tribunal will often be just as capable if not more capable than a court to rule on its jurisdiction. A tribunal is often constituted with three arbitrators who are experts in the subject area of the dispute, whereas a domestic court judge usually sits alone and has no expertise.[17] Reviewing a jurisdictional decision on a “correctness” standard gives proper weight to the arbitral tribunal’s factual findings. It recognizes, first, that the arbitral tribunal has assessed the credibility of witnesses and considered the evidence at length, while at the same time giving the court the power to overturn its decision if it finds legal errors. Second, “correctness” review focuses the court’s analysis on specific challenges to the arbitral tribunal’s legal reasoning. Contrary to a trial de novo, which demands completely rehearing the jurisdictional question, including the factual findings, from a practical point of view, “correctness” review forces the challenging party to point out specific legal errors made by the arbitral tribunal.[18]

Second, while Penny J. regrettably fails to address significant arguments usually put forward by courts applying the trial de novo approach, “correctness” review remains appropriate and can withstand these objections. The most consistently stated argument put forward for adopting the trial de novo approach is that Article 16(3) of the Model Law states that, after an arbitral tribunal has ruled on its jurisdiction, a party may request that a domestic court “decide the matter”.[19] No provision in Article 16 or the Analytical Commentary supports this interpretation.[20]

Another objection is that if the court was limited to a process of review, “it might be reviewing the decision of a tribunal that itself had no jurisdiction to make such a finding.”[21] This argument ignores the arbitral tribunal’s competence-competence, that is, its capacity to “rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement” [our emphasis] enshrined in Article 16(1) of the Model Law. A trial de novo sterilizes this principle and wastes significant party resources. Since, under Article 8 of the Model Law, a court must refer the parties to arbitration at one party’s request, this forces the parties to obtain an initial jurisdictional ruling from the arbitral tribunal, which a court may completely disregard if a party decides to challenge it.

Finally, commentators argue that a court is not in a worse position to make assessments than the tribunal and should therefore be able to examine witnesses in the usual way.[22] As explained earlier, several reasons can make an arbitral tribunal’s factual findings of higher quality.

CONCLUSION

Luxtona paves the way for future challenges to arbitral jurisdiction being resolved through a review on the “correctness” standard. This is an appropriate break from Model Law jurisdictions which conduct the jurisdictional analysis de novo. While properly ensuring that parties have consented to arbitration, a review leaves space for domestic courts to overturn findings of arbitral tribunals. This promotes the efficiency that makes arbitration desirable in the first place.

Laurent Crépeau is an LL.M Candidate in the International Business Regulation, Litigation and Arbitration specialization at New York University School of Law. He holds a Bachelor of Civil Law and Juris Doctor from McGill University’s Faculty of Law.

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[1] The Russia Federation v. Luxtona Limited, 2019 ONSC 7558 (Can. Ont.).

[2] Fresh evidence is evidence that was not submitted during the arbitration but is submitted at the review stage.

[3] In Canada, this has been elaborated in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65.

[4] Luxtona, 2019 ONSC 7558, para. 66.

[5] See United Mexican States v. Cargill, Inc., 2011 ONCA 622 (Can.). See also Insigma Technology Co. Ltd. v. Alstom Technology Ltd. [2008] SGHC 134 (Sing.); M/s. Schlumberger Asia Services Ltd. v. Oil & National Gas Corporation Ltd. FAO(OS) No. 712/2006 (India Delhi HC). See also; Bowen Construction Limited (in receivership) v. Kelly’s of Fantane (Concrete) Limited (in receivership) [2019] IEHC 861 (Ir.); S Co. v. B Co., [2014] 6 H.K.C. 1436 (C.F.I.). Contra Government of the Lao People’s Democratic Republic v. Sanum Investment Ltd. [2016] SGCA 57; M/s Emkay Global Financial Services Ltd. v. Girdhar Sondhi, (2018) 9 SCC 49.

[6] Energy Charter Treaty art. 26(3)(a), Dec. 17, 1994, 2080 UNTS 95.

[7] Id. at art. 45.

[8] See Luxtona, 2019 ONSC 7558, para. 1-7.

[9] International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5. See UNCITRAL Model Law on International Commercial Arbitration, arts. 16(3), 34.

[10] The Russia Federation v. Luxtona Limited, 2018 ONSC 2419, para. 28 (Can.).

[11] United Mexican States v. Cargill, Inc., 2011 ONCA 622 (Can.).

[12] Cargill, supra para. 43.

[13] Dallah Real Estate and Tourism Holding Company v. Pakistan[2010] UKSC 46, para. 14.

[14] The Russia Federation v. Luxtona Limited, 2019 ONSC 7558, para. 66. (Can.).

[15] Id., para. 69.

[16] See William W. Park, Why Courts Review Arbitral Awards, in Law of International Business and Dispute Settlement in the 21st century: Liber Amicorum Karl-Heinz Böckstiegel 595, 596 (Robert Briner ed., 2001).

[17] See Emilia Onyema, The Jurisdictional Tension between Domestic Courts and Arbitral Tribunals, in International Arbitration and the Rule of Law: Contribution and Conformity(Andrea Menaker, ed., 2017), 481, 484-85.

[18] See Luxtona, supra note 15, para. 67.

[19] See e.g. Insigma Technology Co. Ltd. v. Alstom Technology Ltd. [2008] SGHC 134, para. 21 (Sing.).

[20] See Ilias Bantekas et al. UNCITRAL Model Law on International Commercial Arbitration: A Commentary (Cambridge University Press, 2020), 312 (stating the lack of clearly indicated standard of review for challenges under Art. 16(3)).

[21] See Insigma at para. 22.

[22] Id.

Professor Franco Ferrari, the Center’s Director, has just published the lectures on “Forum Shopping Despite Unification of Law” he gave during the summer 2019 session at the Hague Academy of International Law. The lectures, to which the entire volume 413 of the Recueil des cours is dedicated, show that forum shopping is ubiquitous in international commercial law and that this also holds true in respect of international commercial law stemming from uniform substantive law conventions. The lectures show that despite statements to the contrary, these conventions are unable to prevent forum shopping for many different reasons, both convention-extrinsic and convention-intrinsic. The convention-extrinsic reasons are reasons independent of the specific uniform substantive law convention which may be applicable in a given case. There are and will always be reasons for forum shopping that uniform substantive law conventions will not have any impact upon, such as the potential bias of the adjudicator or the costs of access to justice, just to name a few which were addressed in the lectures. As for the many convention-intrinsic reasons discussed in the lectures, Professor Ferrari asserts that no drafting efforts will be able to do away with them. Ultimately, this means that forum shopping is here to stay, despite the unification of substantive law through conventions. The lectures also show that this is not necessarily a bad thing, because forum shopping as defined in the lectures is not the evil commentators make it out to be.

The Center is glad to announce two webinars on “The autonomous v nationalistic interpretation of the 1958 New York Convention” to be hosted by the Center in collaboration with Oslo University. The webinars will be held on 21 and 25 January 2021; they will both start at noon and end at 1.30 pm Paris time.

As it is known, the 1958 New York Convention owes much of its success to being an international convention setting forth uniform rules. Its uniform recognition and enforcement regime not only lowers the parties’ costs of identifying under which circumstances an award will be recognized and enforced across jurisdictions; it also ensures that States cannot justify the failure to comply with their obligations under the New York Convention by reference to domestic law. Still, the courts of different contracting States apply the Convention differently. Oftentimes, this is due to the erroneous understanding of concepts employed by the drafters of the Convention. On the occasion of the two webinars, the presenters will examine whether a given concept must be interpreted autonomously rather than nationalistically, in light of domestic law, and, where this is the case, will attempt to define these autonomous concepts. The presentations will also identify which domestic law(s) to apply, to the extent that recourse to domestic law(s) is required.

On 21 January, the speakers (Burkhard Hess, Dennis Solomon, Winnie Ma and I) will address the autonomous interpretation in general, the notion of “arbitral award”, the arbitration agreement and issues of scope, as well as arbitrability.

On 25 January, the speakers (Francesca Ragno, Friedrich Rosenfeld, Giuditta Cordero-Moss, Lucas Lim) will tackle incapacity, the effect of deviations from the agreed upon procedure, the notion of “public policy’, and the procedure to enforce an arbitral award.

To register and for more info, please see the webinar’s flyer.

NYU’s Center for Transnational Litigation, Arbitration, and Commercial Law and the Dubai International Arbitration Centre host a webinar on November 25, 2020 at 9:00 AM to 10:30 AM (New York time).

This event will discuss due process as a limit to discretion in international arbitration from a broader, international perspective, from a regional (Middle Eastern) perspective as well as from the perspective of the UAE. The event will address what due process issues have arisen and how courts in the UAE as well as the DIAC have dealt with them, thus allowing participants to get an idea of how to combat the increasing “due process paranoia”.

Program:

• Opening Remarks: Ahmed Bin Hezeem, DIAC, Dubai

• Introductory Remarks: Franco Ferrari, NYU

• Due Process as a Limit to Discretion in Arbitration; A Global Perspective, Friedrich

Rosenfeld, NYU Paris, Hanefeld, Hamburg

• Due Process as a Limit to Discretion in Arbitration; The Perspective of the Middle

East, Nayla Comair-Obeid & Zeina Obeid, Obeid Law firm, Beirut

• Due Process as a Limit to Discretion in Arbitration; The Perspective of the UAE and

DIAC, Gordon Blanke, Blanke Arbitration LLC., Dubai

• Closing Remarks, Rashid Shahin, DIAC

For the full program and further information, please see the attached flyer (PDF: 1.41 MB).

To attend, please submit the webinar registration here.

On 19 November 2020, from 9:00 AM to 10:15 AM (NY Time), NYU’s Center for Transnational Litigation, Arbitration, and Commercial Law will host a webinar entitled “The Corruption Virus in Arbitration”.

As it is known, over the years both international and domestic lawmakers have worked together to combat corrupt activities and identify corruption as a matter of transnational public policy. Unsurprisingly, also in the context of international arbitration, corruption issues come up quite frequently. Arbitrators deal with this in various ways, often relying on general principles or/of transnational rules, in some cases without regard to a specific national source of law. In many cases they use ‘red flags’ to identify potential corruption.

Is this approach another example of ‘the arbitral legal order’ incorporating and reflecting the trends stemming from national legal systems? What standard is used when applying the red flag methodology, given that it was developed by business organizations, international bodies, non-governmental organizations, and academic institutions? How do those international or transnational standards factor in the applicable lex contractus, the procedural lex arbitri or the foreign lois de police? And does a disregard of these so-called red flags and ignoring potential corruption count as a violation of international public policy? And would such a violation justify a de novo review of the facts by national courts? Are these questions answered differently based on legal background, and, thus, in a continental law context as opposed to a common law one?

These issues will be addressed by the panelists, Jennifer Lim, Jeremy Sharpe, and Kevin Davis.

The event will be moderated by Dirk De Meulemeester.

To attend, please submit the webinar registration here.

Professor Franco Ferrari, the Center’s Executive Director, was invited to give the keynote address entitled “The Importance of the Seat of Arbitration” on the occasion of the opening of the Hamburg International Arbitration Center, a newly created facility aiming at promoting the attractiveness of Hamburg as a seat of arbitration. The Center will function as a common facility for the many arbitration activities already taking place in Hamburg. The online event, to be opened by the mayor of Hamburg, will also include a talk on “Hamburg as a legal hub” (in German) and a panel discussion on “Arbitration in Hamburg from different perspectives” (in English) with the participation inter alia of Luíza Kömel, the Deputy Secretary General of CAM-CCBC – Centro de Arbitragem e Mediação, and Professor Stefan Kröll, a former scholar-in-residence at the Center. The event will be moderated by Johanna Büstgens (Hamburg) and Tim Rauschning).

The event will be 17 November 2020, starting at 5 pm Hamburg time.

The event is free, but registration is required. To register, use this link or send an email to Ms. Jessy Wallis by 13 November 2020 at the latest.

NYU’s Center for Transnational Litigation, Arbitration, and Commercial Law and the Russian Arbitration Center at the Russian Institute of Modern Arbitration will host a webinar on November 12, 2020 from 9:30 AM to 10:45 AM (NY Time).

This event will discuss due process as a limit to discretion in international arbitration both from a broader, international perspective and from the point of view of the Russian legal system as well as from the point of view of an arbitral institution.

Panelists include Friedrich Rosenfeld, Mikhail Batsura, Natalia Gulyaeva, and Yulia Mullina.

The panel is moderated by Franco Ferrari.

To attend, please submit the webinar registration here.

The video for Professor Franco Ferrari’s talk, titled, “How International Should International Arbitration Be?”, given as the keynote address on the occasion of the 10th Coimbra International Arbitration Meeting organized by professors Mariana França Gouveia and Catarina Monteiro Pires is now available for viewing.

X EIAC Sessao 1730 from NYU School of Law on Vimeo.

On 16 October 2020, the 5^th Annual Conference on “The Future of the Commercial Contract in Scholarship and Law Reform” organized by the London Centre for Commercial and Financial Law will take place. The London Centre for Commercial and Financial Law was established in 2019 and is directed by Professor Mads Andenas QC, while Dr Maren Heidemann is the Centre’s principal academic convenor and project leader. The Centre hosts academic events and legal research projects focusing on commercial and financial law. It continues the work of the Centre for Corporate and Financial Law at the Institute of Advanced Legal Studies, School of Advanced Studies, University of London, UK.

This specific conference builds on research undertaken at the University of London (Institute of Advanced Legal Studies, School of

Advanced Studies) from 2016-2019, and will explore topics in commercial contract law with a focus on sustainability policies, broadly conceived. Aspects include legislative challenges as well as international dispute settlement.

This year’s keynote speaker will be Professor Franco Ferrari, the Center’s Director. Professor Ferrari is well known for his expertise in international commercial law – including arbitration – and for his commitment to uniform law such as the 1980 Vienna Convention on international commercial contracts (CISG) as well as for his work for UNCITRAL. In addition to Professor Ferrari, there will be panelists coming from all over the world and bringing comparative viewpoints to the table.

The conference is organized in four panels one of which traditionally focusses on commercial arbitration. Another focus is once again on ethical aspects of commercial contract law such as good faith and co-operation duties as well as green finance and sustainability in the digital economy.

A more detailed program is attached (PDF: 396 KB).

The Center is glad to be able to announce that this coming Wednesday, 14 October 2020, from 9.00 am to 11.00 am, it will host – together with SciencesPo Law School – the 1^st edition of the Intergenerational Arbitration Symposium., the overall topic of which will be “Procedural Issues in International Arbitration”.

The Symposium allows young scholars interested in commercial arbitration to present their ideas and have more experienced scholars and practitioners comment on their presentations and the papers on which their presentations are based. This year, two NYU graduates (Jack Davies and Lucas Lim) and two graduates from SciencesPo Law School (Rafaela M. da Magalhaes and Jack Biggs) will present their papers, and Professors Giuditta Cordero-Moss and Pierre Tercier will act as discussants. The event will be moderated by Karolina Rozycka and Alexandre Senegacnik.

To register, please follow this link. Registered participants will receive a link per email that allows them to participate.

More information on the Intergenerational Arbitration Symposium (PDF: 1.08 MB)

To mark the 40th anniversary of the United Nations Convention on Contracts for the International Sale of Goods (CISG), NYU’s Center for Transnational Litigation, Arbitration, and Commercial Law and UNCITRAL, the United Nations Commission on International Trade Law, hosted a series of webinars to assess the CISG’s impact over the last 40 years.

The webinar on September 15, 2020, analyzed the CISG’s relationship with other instruments relevant in the international commercial law context, in light also of the recent finalisation of the HCCH – UNCITRAL – Unidroit Legal Guide to Uniform Legal Instruments in the Area of International Commercial Contracts (with a focus on sales).

The recording is now available for viewing.