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International Arbitration News, Trends and Cases

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Construction arbitration: How to use innovation to increase efficiency

Karl Pörnbacher, head of the Hogan Lovells International Arbitration team in Germany, delivered the keynote speech at Vienna Arbitration Days 2021, which was held remotely on 12 February and focused on innovation and constants within construction arbitration. Read on to discover the key takeaways from Karl’s speech.

Constants of construction arbitrations include, notably, their complexity and the continued criticism of being too expensive and slow. When it comes to innovations, the construction industry should consider increasing the use of dispute avoidance mechanisms and how to manage arbitration proceedings more effectively, including the use of new technologies and increased digitalization that arose from the COVID-19 pandemic.

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Halliburton v Chubb: UK Supreme Court clarifies the position on arbitrators’ duties of impartiality and disclosure in London-seated arbitrations

A version of this post was originally published on Practical Law Arbitration blog and is reproduced with the permission of Thomson Reuters.

In Halliburton Company v Chubb Bermuda Insurance Ltd [2020] UKSC 48, the UK Supreme Court dismissed Halliburton’s appeal concerning its application to remove an arbitrator for apparent bias on the facts. However, it also emphasised the importance of arbitrator impartiality in London-seated arbitrations.

The judgment raises legal questions which are of general importance in arbitration. In particular, it addresses the circumstances in which an arbitrator may appear to be biased and, the related issue of when an arbitrator must disclose circumstances which may give rise to justifiable doubts about his or her impartiality.

Lord Hodge delivered the leading judgment (with whom Lord Reed, Lady Black and Lord Lloyd-Jones agreed). Lady Arden agreed with the outcome but some of her reasoning differed. In reaching its decision, the UK Supreme Court received interventions from a number of interested parties, including the ICC, LCIA, Chartered Institute of Arbitrators, LMAA and GAFTA.

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Enka v Chubb: Supreme Court decision promotes certainty and enforceability

This post was originally published on Practical Law Arbitration blog and is reproduced with the permission of Thomson Reuters.

The Supreme Court’s much-anticipated judgment in Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb addresses the correct approach under English law to determining the governing law of an arbitration agreement. The judgment seeks to promote certainty and enforceability of arbitration agreements, by providing that:

  • The parties’ choice of law in the governing law clause should generally also be interpreted as an express choice of law governing their arbitration agreement.
  • Parties should generally, as a matter of implied choice, be taken to have chosen a system of law to govern their arbitration agreement under which it would be valid.
  • In the absence of any express or implied choice by the parties, the governing law of an arbitration agreement will generally be that of the seat of the arbitration.

The court’s judgment also reaffirms that, where English law is the law of the seat, the English courts generally have jurisdiction to grant anti-suit injunctions to restrain breaches of the arbitration agreement, even where that agreement is not itself governed by English law.

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Revised LCIA Arbitration Rules 2020 to take effect 1 October 2020

The LCIA Arbitration Rules 2020 (the 2020 Rules) will take effect on 1 October 2020, replacing the existing LCIA Arbitration Rules 2014 (the 2014 Rules). The 2020 Rules incorporate a number of important updates that facilitate flexibility and efficiency in the arbitration process. In particular, the 2020 Rules reflect the LCIA’s recognition of the increasing role that technology plays in arbitration, a trend accelerated by the recent COVID-19 pandemic.

We have summarized the key updates below with links to the LCIA announcement and the complete 2020 Rules.

For our word-by-word comparison of the 2020 Rules and the 2014 Rules, click here.

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Paris Arbitration Week recap: Claims in climate change

Lucas Aubry and Amy Crowe

On 8 July 2020, as part of the Paris Arbitration Week, Hogan Lovells hosted a webinar titled “Claims in Climate Change“, a topic which has attracted much attention and debate in the arbitration community over the past twenty years. The panel discussion, moderated by Laurent Gouiffès, partner in Hogan Lovells’ Paris international arbitration team, was divided into three parts focussing on: (i) climate change issues in international commercial arbitration; (ii) the issues which may arise in the context of investment arbitration; and (iii) the rise of climate change litigation in France and the potential impact on arbitration.

A recording of the webinar can be found here.

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Does an arbitration agreement protect a debtor from the threat of liquidation?

Collaboratively authored by:

Hogan Lovells

Shardul Amarchand Mangaldas & Co

5 Fifteen Barristers

In several Commonwealth jurisdictions, the corporate legislation allows creditors to petition a court to order the winding up of a debtor in circumstances where that debtor is unable to pay its debts as they fall due. Such legislation generally presumes that the debtor is insolvent if it has failed to comply with a statutory notice requiring the debtor to pay a certain debt within a given period of time (a statutory demand). Where the debtor disputes that debt, the court ordinarily determines whether that dispute is genuine; that is, whether the debtor has a substantial and bona fide defence to the creditor’s claim. If the dispute is genuine, the court sets aside the winding up petition. The purpose of the exercise is to ensure that a statutory demand or winding up petition is not defeated by a debtor’s spurious or frivolous defences.

The question arises, however, whether the court is precluded from proceeding with that determination where the alleged dispute is governed by an arbitration agreement. The judgments recently delivered in different Commonwealth jurisdictions show that the matter is far from being settled. Even where courts in different jurisdictions have reached the same conclusion, their reasoning differed to some extent. This article, which is co-authored by arbitration practitioners from different jurisdictions, considers the approach taken by the courts in some parts of the Commonwealth, as well as the practical commercial implications of the current case law.

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No “Second bite at the cherry”: English court prevents party raising NY Convention defences to enforcement already decided in other jurisdictions

Originally posted on the Kluwer Arbitration Blog

The recent English High Court decision in Carpatsky Petroleum Corporation v PJSC Ukrnafta [2020] EWHC 769 (Comm) provides useful guidance on the English courts’ approach to determining whether a party is entitled to resist the enforcement of an award on one of the grounds set out in s. 103(2) of the Arbitration Act 1996 (which implements the grounds for refusal of recognition and enforcement of awards set out in Article V of the 1958 New York Convention), in circumstances where similar issues have already been addressed, or should reasonably have been addressed, in earlier proceedings in other jurisdictions relating to the recognition or enforcement of the award.

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COVID-19 – Implications for the Indo-German supply chains

India’s biggest export markets are the US and the EU. In particular Germany and India have an extensive trade history with bilateral trade amounting to Euros 21.9 billion in 2017-2018. Key sectors include IT, automotive, and especially pharma. Germany is one of the main buyers of Indian generics in the EU. Due to the outbreak of the COVID-19 pandemic, India has restricted the export of essential drugs in early March 2020, leading to supply chain disruptions which might also affect Germany in the long-term.

Given the close economic ties and the current supply chain disruptions which might lead to disputes, it has become crucial for a lot of German companies to closely follow the further developments in India and to carefully evaluate the effect of the COVID-19 pandemic on their supply contracts with Indian companies.

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