In this feature, Jan Heuvels shares advice on the most effective techniques for arbitrating a multi-jurisdictional dispute, drawing upon experience gained from over 30 years of practice.
1. The necessity to work across multiple international jurisdictions has a significant impact on arbitration.
To start with, parties involved in an international dispute must carefully consider the choice of the arbitral institution. Different arbitral institutions have their own rules and procedures, which may vary in terms of efficiency and suitability for cross-jurisdictional cases. Some institutions, such as the International Chamber of Commerce (ICC) and the London Court of International Arbitration (LCIA), as well as some other arbitral institutions have a good track record of handling complex international disputes.
Also, the choice of applicable law is a crucial decision that impacts the substance of the dispute. Parties may opt for the law of a related jurisdiction or choose a governing law that is neutral and unrelated to either party's home jurisdiction.
The seat or legal place of arbitration is also significant as it determines the procedural law and supervisory jurisdiction over the arbitration process. The choice of seat affects matters such as the enforceability of the arbitral award and the degree of judicial intervention in the proceedings. Parties should select a seat that is arbitration-friendly and recognised under international conventions, such as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
International arbitration often involves parties, arbitrators and counsel from different countries, speaking different languages and having diverse cultural backgrounds. This presents challenges in communication and understanding. It is important to ensure effective interpretation and translation services are available and arbitrators are chosen with relevant language skills and cultural understanding.
The choice of applicable law is a crucial decision that impacts the substance of the dispute.
One of the primary advantages of arbitration is the enforceability of arbitral awards across multiple jurisdictions. However, the process of enforcing awards can vary from country to country due to differences in national laws and bilateral or multilateral treaties. Parties should consider the enforceability of the award in the jurisdictions where assets are located or where enforcement may be sought.
Some jurisdictions have public policy restrictions that may impact the enforceability or conduct of an arbitration. It is important to understand any limitations or constraints imposed by the local laws of relevant jurisdictions to ensure compliance and avoid potential challenges to the enforcement of the arbitral award.
2. Multi-jurisdictional arbitrations cover a wide range of matters.
These can include, for example, multi-party re/insurance arrangements, or commercial disputes involving international contracts, such as cross-border sales, distribution agreements, joint ventures, franchise and licensing arrangements. These disputes can relate to breach of contract, non-payment, quality issues, intellectual property rights, or competition law matters.
Other areas include large-scale construction, procurement and infrastructure projects disputes between owners, contractors, subcontractors and other stakeholders (concerning issues such as delays, cost overruns, defective work, variations in scope, or termination of contracts), or disputes in the energy and natural resources sector, including oil and gas, mining, and renewable energy (involving disputes over concession agreements, production sharing contracts, supply agreements, pricing disputes, or environmental issues). An international dimension is also frequently found in cross-border M&A and shareholder disputes.
3. The complexity of multi-jurisdictional arbitrations is due to several factors.
As mentioned above, parties involved in multi-jurisdictional arbitrations come from different legal systems with distinct laws, procedural rules and legal traditions. This diversity can lead to challenges in harmonising legal principles, interpreting contractual provisions and applying the relevant laws consistently across jurisdictions.
Determining the applicable law in a multi-jurisdictional arbitration can be complex. Parties need to consider conflict of laws principles and choose the governing law that will govern the substantive issues in the dispute. This decision may have implications for the interpretation of the contract, the availability of remedies and the standards applied to assess liability and damages.
Parties, arbitrators, legal counsel, and witnesses will likely have diverse languages and cultural backgrounds. Language barriers can complicate communication and lead to misunderstandings. Cultural differences may impact negotiation styles, approaches to dispute resolution and expectations regarding procedural fairness.
Each jurisdiction has its own procedural rules and practices governing arbitration proceedings. These differences can relate to the appointment and qualifications of arbitrators, disclosure obligations, document production, the conduct of hearings and the admissibility of evidence. Parties and arbitrators must navigate these variations, ensuring compliance with the applicable rules and achieving procedural fairness.
Determining the applicable law in a multi-jurisdictional arbitration can be complex.
Enforcing arbitral awards across multiple jurisdictions can be challenging. As mentioned above, the New York Convention provides a framework for the recognition and enforcement of arbitral awards, but domestic laws and judicial practices in different jurisdictions can still create obstacles. Parties must carefully consider the enforceability of the award in the relevant jurisdictions and take necessary steps to maximise its effectiveness.
Multi-jurisdictional arbitrations often involve complex party structures, including multinational corporations, joint ventures, or consortiums. Managing the interests, roles and obligations of these parties can be intricate, especially when they have differing objectives, cultures, corporate structures and legal obligations in various jurisdictions.
4. An experienced arbitrator will employ several strategies to plan effectively for and overcome the complexities and challenges associated with multi-jurisdictional arbitrations.
Prior to the arbitration, an experienced arbitrator will thoroughly research and understand the laws, regulations and procedural rules applicable to the dispute in each relevant jurisdiction. This includes reviewing the governing law, arbitration laws, and any relevant international conventions or treaties.
An experienced arbitrator will then adopt proactive case management techniques, such as setting clear timelines, managing document production, and conducting efficient hearings. Regular communication with the parties and their legal representatives can help address issues promptly and ensure smooth progress of the proceedings.
Organising pre-hearing conferences with the parties and especially with clients in a timely manner and reasonably in advance can help clarify procedural matters, discuss potential challenges, and establish a roadmap for the arbitration process. These conferences provide an opportunity to address jurisdictional issues, choice of law, language considerations and other key aspects upfront.
In my experience, a flexible and tailored approach to the arbitration process is crucial in multi-jurisdictional cases. An experienced arbitrator will consider the specific needs and circumstances of the parties, considering their legal systems, cultural backgrounds, language preferences and any practical limitations they may face. This may involve adapting procedures, accommodating language requirements and allowing for cultural differences in communication and presentation styles.
Technology can be used to facilitate communication and overcome language barriers. Video-conferencing platforms, document management systems and real-time translation services can enhance efficiency and ensure effective communication among parties, arbitrators and witnesses from different jurisdictions.
In my experience, a flexible and tailored approach to the arbitration process is crucial in multi-jurisdictional cases.
Collaborating with co-arbitrators and legal experts who possess knowledge of the relevant jurisdictions can also be beneficial. Co-arbitrators with experience in the applicable legal systems can provide valuable insights and help bridge gaps in understanding. Engaging legal experts familiar with the laws and practices of specific jurisdictions can provide expert opinions and assist in interpreting and applying local laws.
Issues may also arise that require interaction with national courts, such as applications for interim measures, challenges to jurisdiction, or enforcement of awards. An experienced arbitrator should be prepared to coordinate with national courts, understanding the relevant procedures and effectively navigating the interface between arbitration and the court system.
5. An extensive network of international contacts is invaluable in assisting with arbitration matters spanning multiple jurisdictions.
Contacts will include legal professionals with expertise in various jurisdictions. These contacts can provide insights into local laws, regulations and procedural rules, helping the arbitrator understand and navigate the legal landscape in each relevant jurisdiction. They can offer advice on jurisdictional issues, choice of law and specific legal considerations that may arise during the arbitration. Other contacts who are native speakers of different languages and familiar with diverse cultural norms can aid in overcoming language and cultural barriers. They can provide translation services, assist with interpretation during hearings and ensure effective communication between parties, witnesses and the arbitrator. They can also offer guidance on cultural sensitivities, negotiation styles, and expectations, facilitating smoother interactions.
Contacts with expertise in various industries and disciplines can serve as potential expert witnesses in the arbitration, providing specialised knowledge and opinions on technical, financial, or scientific matters relevant to the dispute. They can assist in presenting complex evidence and help the arbitrator understand industry-specific practices and standards. Chambers of Commerce and business contacts in various jurisdictions can provide information on local business practices, commercial customs and potential sources of expert witnesses. They may also assist with finding suitable venues for hearings, arranging logistics and facilitating local support services.
Contacts familiar with local enforcement practices and legal systems can offer insights into the enforceability of arbitral awards in different jurisdictions. They can provide information on local laws, court practices and potential challenges that may arise during the enforcement process, assisting the arbitrator in considering the practical implications of the arbitration.
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An extensive network will also encompass connections with international arbitration institutions, professional organisations and industry associations. These contacts can provide information on best practices, procedural guidelines and resources to support the arbitrator in managing the arbitration effectively.
6. Addressing the complexities and challenges in multi-jurisdictional arbitrations requires careful planning, coordination and the involvement of experienced legal counsel and arbitrators with expertise in handling such disputes.
Effective case management, clear communication and a comprehensive understanding of the legal and cultural nuances across jurisdictions are essential to help achieve a successful resolution. It would be commercially sensible if parties could focus, plan and be advised on at least some of these complexities at the time of entering their contract, deal, or arrangement, and not only when a dispute has already arisen. In my experience, this is unfortunately not always the case.
Jan Heuvels, Solicitor & Europäischer Rechtsanwalt
Grosse Elbstrasse 45, 22767 Hamburg , Germany
Tel: +49 40 5393 1110 | +49 16 2249 5159
Fax: +49 40 5393 1111
Jan Heuvels founded Heuvels Law after 30 years with a leading international law firm specialising in transport, trade, energy and insurance. Today, Jan continues to work with clients using his legal skills and experience – as well as his extensive international network – to help them achieve their commercial and strategic goals. Jan is a recognised dispute resolutions specialist in the international insurance and reinsurance markets. He also assists clients in other markets with their general and commercial disputes by responsibly managing any arbitration, mediation or other ADR proceedings.
