Foreword to the Dispute Resolution and Arbitration Global Guides | Practical Law

Foreword to the Dispute Resolution and Arbitration Global Guides | Practical Law

A foreword to the Dispute Resolution and Arbitration Global Guides. These are Q&A guides to litigation and enforcement, and arbitration in key jurisdictions around the world.

Foreword to the Dispute Resolution and Arbitration Global Guides

Practical Law UK Articles 0-536-9785 (Approx. 4 pages)

Foreword to the Dispute Resolution and Arbitration Global Guides

by Lord Phillips of Worth Matravers
Published on 01 Nov 2017United Kingdom
A foreword to the Dispute Resolution and Arbitration Global Guides. These are Q&A guides to litigation and enforcement, and arbitration in key jurisdictions around the world.
For a full list of jurisdictional Q&As and in-depth analysis articles visit global.practicallaw.com/arbitration-guide and global.practicallaw.com/dispute-guide.

Foreword

I was delighted when I was asked to write a foreword for these practical legal guides covering dispute resolution (ADR) and arbitration. In the first three decades of my life in the law, the only form of ADR was negotiation. Any sensible person who finds himself or herself party to a dispute will wish to resolve it, if possible, by this means. It is interesting to note that a large number of actions that are brought in England often end in a negotiated settlement before trial. It is not difficult to see why given the costs attached to resolving a dispute by adversarial litigation.
In recent times, a lot has been said about the importance of ADR, and I am an enthusiastic supporter of it. The idea that there is only one just result of every dispute, which only the court can deliver is, I believe, often illusory. Litigation has a cost, not only for the litigants but for society, because judicial resources are limited and their cost is usually born – at least in part – by the state. Parties should be given strong encouragement to attempt to resolve their dispute before resorting to litigation.
Following my retirement as President of the Supreme Court, I took on the role as President at the Qatar International Court. I succeeded Lord Woolf, who sat as its first President from 2009 until 2012. The Court was set up as part of a strategy to attract international business and financial services into Qatar. It operates as a specialist court which provides national and international civil and commercial dispute resolution. A distinguishing feature of the court is that its judges have considerable experience of resolving complex disputes and the procedures that operate in it are similar to those found in common law jurisdictions. The court is currently engaged in seeking to establish a dispute resolution centre where the court will supervise arbitration and adjudication.
Where parties are adamant that they want to commence litigation, there should be, built into the process a stage at which the court can require parties to attempt mediation – perhaps with the assistance of a mediator supplied by the court.
In a number of jurisdictions the courts make orders which, on their face, compel the parties to resort to ADR. What are the pros and cons of compulsory mediation? There have been strong views expressed about this on both sides. Those opposed to it argue that compulsion is the very antithesis of mediation. The whole point of mediation is that it is voluntary. How can you compel parties to indulge in a voluntary activity? In fact, statistics show that settlement rates in relation to parties who have been compelled to mediate are just about as high as they are in the case of those who resort to mediation of their own volition.
When I started at the English Bar over 50 years ago arbitrations were the seed bed of much of our contract law, for you could appeal to the Commercial Court by a case stated on any issue of law, and appeals regularly went up to the House of Lords. A quick inspection of law reports in the 1960s will show you that decisions of the Lords laid down in the law of frustration, anticipatory breach and damages all started life as arbitrations. The law has now changed, and the right to appeal has been precluded, except in comparatively rare circumstances. This change came about because it was believed that the intervention of the Courts was a disincentive to English arbitration. I regret this move. To me, the move inhibited the development of the common law to meet modern commercial requirements.
There are now just a few circumstances where the courts must inevitably become involved with arbitrations. I will give two examples with reference to two recent Supreme Court decisions. The first decision is Jivraj v Hashwani [2011] UKSC 40. This is an example of the exercise of the power of review by the court of the seat of the arbitration. What was in issue was the legality of the appointment of an arbitrator. The dispute arose out of a joint venture between two members of the Ismaeli community, over which the Aga Khan presides. They had agreed an arbitration clause which provided for three arbitrators who had to be "respected members of the Ismaeli community." Both parties fell out and Mr Hashwani purported to appoint as an arbitrator Sir Anthony Coleman who was not a member of an Ismaeli community. Mr Hashwani contended that the requirement that arbitrators should be members of the Ismaeli community was void because it infringed anti-discrimination regulations under the European Communities Act 1972. The relevant regulation provided that it was unlawful for an employer, in relation toemployment, by him of a person personally to do any work to discriminate against a person on the grounds of his religion or belief. To the surprise and concern of most of those involved in international arbitrations the English Court of Appeal held that the requirement that the arbitrators should be members of the Ismaeli community fell foul of this regulation. The implication of this was that it might also be unlawful under English law to specify in an arbitration clause that arbitrators should be of a particular nationality. That is why the decision caused such a concern. The Supreme Court, in a decision to which I was party, unanimously reversed the Court of Appeal. Lord Clarke wrote the lead judgment. This held that it was simply not right to describe arbitrators as employed by the parties who appointed them. It followed that the discrimination regulation had no application. I am happy to say that this decision has been widely welcomed.
The other case, Dallah Real Estate v the Government of Pakistan [2010] UKSC 46, provoked much wider interest. I did not sit on this case, regrettably, but I will explain a little bit about it. The case considered the extent of the power of an enforcing court to review a decision of the arbitrators as to their own jurisdiction. The issue was whether the Government of Pakistan was a party to an arbitration agreement and whether an award made by an arbitral tribunal under that agreement can be enforced against the Government of Pakistan in the United Kingdom. The Supreme Court unanimously dismissed the appeal finding that the Government was not a party to the arbitration agreement. It did so on the basis that a tribunal has jurisdiction to determine its own jurisdiction for its own purposes; a court, whether within the country where the tribunal is located or within a foreign country where an attempt is made to enforce the award, can and must revisit the question of jurisdiction. The arbitral tribunal could only have jurisdiction by consent, and could not give itself jurisdiction, if there was no relevant consent under the applicable law. Whether consent exists is an issue subject to ordinary judicial determination. The Court held that the Government had established that there was no such common intention to make it a party to the agreement. The decision of the Supreme Court has been generally well received by those who have written articles on Dallah. Despite the result it has been seen as supportive of, rather than unfriendly to, international arbitration.
Looking back on my life in the law, a guide such as this would have been very useful. Not only does it help explain some of the black letter law relating to litigation, arbitration and other dispute resolution mechanisms, it gives practitioners an authoritative commentary on issues that affect a number of practice areas today. The critical analysis incorporated into this guide comes from leading practitioners who offer a valuable insight into each area of expertise. The guide covers a large number of countries. This is extremely useful for practitioners looking to incorporate some comparative analysis into their legal arguments, or for any practitioner needing to navigate the law in a particular jurisdiction. This helps considerably with any comparative legal analysis. I think that one of the fascinations of comparative law is considering how different jurisdictions have approached common problems sometimes independently, sometimes influenced by one another. The precise and concise country guides help practitioners navigate their way through complex rules and procedures which would be overwhelming to those who are not trained in that jurisdiction, or do not specialise in the relevant area.
This guide provides readers with a wealth of information relating to the practical aspects of litigation, ADR mechanisms and in particular, arbitration. Since my retirement from the Supreme Court, I have had many people visit me from all walks of life. These people have ranged from law students and academics I come across in my office at King's College London to legal practitioners, judges and politicians. I will gladly recommend this guide to them. The information contained in it is both relevant and accessible to law students, current practitioners, law firms and law departments alike.