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Arbitration

Mediation

Arbitration

Mediation

International arbitration has developed a body of precedents over the years that have significantly shaped the field. While the importance of specific precedents can vary based on context and perspective, here are some of the most notable and influential precedents in international arbitration:

Prima Paint Corp v. Flood & Conklin Mfg. [1967]

This case highlighted that Arbitration clauses as a matter of federal law are ‘separable’ from the contracts in which they are embedded, and that where no claim is made that fraud was directed to the arbitration clause itself, a broad arbitration clause will be held to encompass arbitration of the claim that the contract itself was induced by fraud.

This case highlighted that Arbitration clauses as a matter of federal law are ‘separable’ from the contracts in which they are embedded, and that where no claim is made that fraud was directed to the arbitration clause itself, a broad arbitration clause will be held to encompass arbitration of the claim that the contract itself was induced by fraud.

The Supreme Court of Canada ruled on the enforceability of forum selection clauses and choice of law clauses in contracts between the parties. The decision emphasized that when forum selection clauses and choice of law clauses effectively deprive consumers of their rights under consumer protection legislation, they may be deemed unenforceable. The rules of New York Convention have also been discussed in the case.

The case discussed whether the parties’ arbitration agreement did (as a matter of interpretation) and could (as a matter of law) extend to claims that the parties’ underlying charter parties were procured by bribery. The doctrine of separability is applied: “The principle of separability means that the invalidity or rescission of the main contract does not necessarily entail the invalidity or rescission of the arbitration agreement.” The arbitration agreement must be treated as a ‘distinct agreement’ and can be void or voidable only on grounds which related directly to the arbitration agreement” and “[t]he doctrine of separability requires direct impeachment of the arbitration agreement before it can be set aside”.

The UK Supreme Court ruled that a Saudi Arabian company couldn’t enforce an arbitral award against the Pakistani Ministry of Religious Affairs, as the Ministry hadn’t agreed to the arbitration agreement in question. The case clarified the principles of enforcing arbitral awards against non-signatory state entities.

The importance of the decision is that it clarifies what has, for some time, been an uncertain area of law as to which law should apply to the arbitration agreement where none is expressly stated. The Sulamerica case established a three-stage test: a) the express choice of the parties; b) in the absence of an express choice, the implied choice; and c) where the parties had not made any choice, the law with which the arbitration agreement has its closest and most real connection.

The UK Supreme Court has clarified how the governing law of an arbitration agreement is to be determined when the law applicable to the contract containing it differs from the law of the seat of the arbitration.

The UK Supreme Court considered the following issues: a) what law governed the validity of the arbitration agreement? b) if English law governed, was there any real prospect that a court might find at a further hearing that KFG became a party to the arbitration agreement in the franchise agreements? c) as a matter of procedure, was the Court of Appeal justified in giving summary judgment refusing recognition and enforcement of the award?

This case clarified the principle of “fork in the road,” which prevents an investor from pursuing both local court remedies and international arbitration simultaneously.

This case established the doctrine of “denial of justice” as a basis for investment arbitration claims, allowing investors to claim damages if the host state violates its obligation to provide fair and equitable treatment.

This case addressed the concept of “fair and equitable treatment” and helped to shape the understanding of the standard’s application in investment arbitration.

This case contributed to the interpretation of “umbrella clauses” in investment treaties, clarifying the scope of protection offered to investors for breach of contractual commitments.

This case was instrumental in defining the principles of “expropriation” and “indirect expropriation” in investment arbitration, offering guidance on when state measures could be considered as tantamount to expropriation. Besides, the case addressed the issues regarding interim measures.

This case dealt with the concept of “legitimate expectations” and how changes in regulatory frameworks can impact the expectations of foreign investors.

This case is significant for its massive monetary award and the discussion it generated regarding issues such as jurisdiction, expropriation, and fair and equitable treatment.

This case raised questions about the compatibility of certain state measures, such as nuclear phase-out policies, with investment treaty obligations.

This case involved a challenge to Uruguay’s tobacco control measures and highlighted the intersection between investment arbitration and public health concerns.

While not an arbitration case itself, this ruling by the Court of Justice of the European Union had a significant impact on investment arbitration by declaring the arbitration clause in the intra-EU BITs incompatible with EU law.

These cases have contributed to the development and interpretation of principles and standards in international arbitration, particularly in the context of commercial and investment disputes.

Due to the strict confidentiality requirement in mediation, most public case law arises from court proceedings. While the significance of these cases may vary based on context, they collectively contribute to the foundation of mediation. Here are some cases that have become well-known within the mediation community.

Dunnett v Railtrack plc [2002] EWCA Civ 303, (Practice Note) [2001] 1 WLR 2434 Court of Appeal Brooke, Robert Walker and Sedley LJJ

This case involved the defendants’ unwillingness to contemplate Alternative Dispute Resolution (ADR) because it would necessarily involve additional monetary payments beyond what had already been offered. This position demonstrated a misunderstanding of ADR’s purpose. Refusal to consider ADR when suggested by the court could lead to unfavorable cost consequences. On the grounds of refusing the mediation proposed by the court, the court ruled in favor of the claimant to recover the amount of legal costs from the defendant.  

This case underscores the importance of parties seriously considering Alternative Dispute Resolution (ADR) when suggested by the court․  

In this case, offshore property companies were embroiled in allegations of fraudulent transactions. The central issue was whether the Defendants could use excerpts from their position statement submitted during prior mediation with the Claimants, which referenced the disputed transactions. 

The Judge ruled that fraud constituted an exception to the general rule of confidentiality in mediation. As a result, the Defendants were permitted to present passages from their mediation position statement as evidence. This case is significant for being the first reported instance where English courts applied the fraud exception. 

In this legal matter, the claimant, a solicitor, alleged professional negligence against the Leading Counsel. The court ultimately dismissed the action, with the only remaining issue being the question of costs. Specifically, the court had to determine whether the defendant’s entitlement to costs should be revoked due to their refusal to engage in mediation, despite being invited to do so both before and after the proceedings commenced. The court sided with Mr. Leeming, supporting his decision to refuse mediation given the weak prospects of Mr. Hurst’s case. Mr. Leeming was granted costs amounting to £55,000, which included application costs.

Mr. Churchill initiated legal action against the council due to damage to his property caused by Japanese knotweed from a neighboring property owned by them. Despite being invited to participate in the council’s complaints procedure, he declined and proceeded with court proceedings. In response, the council requested an order from the court to stay proceedings and compel Mr. Churchill to engage in an out-of-court process.  

In a unanimous decision, the Court of Appeal determined that courts can indeed mandate parties to participate in ADR if it doesn’t hinder their ability to pursue a judicial hearing and the order is deemed “proportionate.” The lead judgment affirmed that “The court can lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process provided that the order made does not impair the very essence of the claimant’s right to proceed to a judicial hearing, and is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost.” 

The Court examined the impact of the Coates’ refusal to proceed with an already agreed-upon mediation process for which a mediator had been appointed. Despite initially agreeing to the mediation, the Coates withdrew from the process. The withdrawal significantly influenced the Court’s decision on costs, resulting in Leicester being ordered to pay costs up to January 1, 2002, but not thereafter, acknowledging the missed opportunity for a mediated settlement. Despite Coates’ refusal to continue with mediation, the court did not penalize them fully because of the overall outcome of the case, where Coates was successful on both the claim and the counterclaim. 

The Upper Tribunal considered the use of details from an unsuccessful mediation in the context of restrictive covenants. The objectors attempted to rely on mediation details to support their position, but the tribunal disregarded this material. Emphasizing the confidentiality of mediation, the tribunal highlighted that what occurs in mediation is generally without prejudice to the parties‘ public positions. Since the mediation, in this case, was conducted expressly on a without prejudice basis, one party cannot disclose confidential details without the other’s consent.  

Arbitration

  • United Nations Conference on Trade and Development, Module 5.1. International Commercial Arbitration: Overview
  • G. Born, International Commercial Arbitration, Third Edition
  • Redfern and Hunter on International Arbitration (Sixth Edition)
  • J. Paulsson, Arbitration in Three Dimensions (LSE Law, Society and Economy Working Papers 2/2010)
  • J. Lew, L. Mistelis and S. Kröll, Comparative International Commercial Arbitration.
  • B. Audit, The Choice of Applicable Law in International Arbitration
  • M. De Boisseson, ‘Substantive Law in International Arbitration: An Arbitrator's Perspective, in The Application of Substantive Law by International Arbitrators
  • P. Shaughnessy, The Emergency Arbitrator in The Powers and Duties of an Arbitrator.
  • Guide on the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards

Mediation

  • ⁠Jay Folberg, Dwight Golann, Lawyer Negotiation: Theory, Practice, and Law Lawyer ՝shing)
  • ⁠⁠Christopher W. Moore, The Mediation Process: Practical Strategies for Resolving Conflict (4th ed Jossey-Bass)
  • Omer Shapira, A Theory of Mediators' Ethics Foundations, Rationale, and Application (Cambridge University Press)
  • ⁠Chester A. Crocker (Editor), Fen Osler Hampson (Editor), Pamela R. Aall (eds), Herding Cats: Multiparty Mediation in a Complex World (USIP press)
  • AAA Handbook on Mediation (3ed ed)
  • ⁠Lisa Blomgren Amsler, Mediation at Work: Transforming Workplace Conflict at the United States Postal Service, Human Capital Management Series
  • Thomas A. Kochan and Todd Jick, The Public Sector Mediation Process: A Theory and Empirical Examination, The Journal of Conflict Resolution Vol. 22, No. 2 (1978), pp. 209-240