Innovations in Arbitration:

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1 Innovations in Arbitration: Adapting for the next 100 years Judith Levine Senior Legal Counsel Permanent Court of Arbitration Chartered Institute of Arbitrators London Centenary Conference 3 July 2015

2 Over 100 years ago Hague Convention for the Pacific Settlement of International Disputes 1899 Recognized arbitration as most effective and equitable means of settling legal disputes where diplomacy has failed Defined arbitration as settlement of differences by judges of own choice, on basis of respect for law Established PCA to be accessible at all times for immediate recourse for international differences La paix par l arbitrage, 1914

3 The last 100 years PCA case activity since % of total cases were brought in last 15 years Mandate evolved to include mixed arbitrations (private/public disputes) under investment treaties and contracts Cases Initiated Cases Cumulative

4 Adapting for the next 100 years? 1. New Issues II. III. IV. New Accessibility New Technical Needs New Mechanisms

5 Part I New Issues Climate Change. and Environment Business and Human Rights Outer Space?

6 What does it mean for lawyers?

7 Climate Change and Future Legal Disputes?

8 and for Arbitration? Inter-State cases Investor-State cases Contract cases

9 Business and Human Rights 5. Dispute resolution. Any dispute between the parties to, and arising under, the terms of this Agreement shall first be presented to and decided by the [Steering Committee].... Upon request of either party, the decision of the SC may be appealed to a final and binding arbitration process [UNCITRAL]

10 Outer-Space and Technology Disputes

11 Part II New Accessibility Non-State Actors Transparency Alternative Funding Approaches Voices of Non-Parties Host Country Agreements

12 Accessibility & Abyei New actors New demands: fast-track resolution

13 Accessibility & Abyei Languages: testimony in Arabic, Dinka and English. Arabic version of Award Finance/Costs: PCA s Financial Assistance Fund, pro bono services to SPLM/A Full transparency: publication of all documents, open hearings, webcast

14 Non-Parties Participating at the invitation of tribunals at their own request, as amici as witnesses as observers

15 Host Country Agreements Provision of facilities and services Privileges and immunities Relevant to CIArb London Principles 6. Accessibility and safety entry for parties, witnesses, and counsel protection of the participants, their documentation and information 7.Facilities functional facilities hearing rooms 10. Immunity a clear right to arbitrator immunity

16 Host Country Agreements Safe passage of witnesses PCA HQ & Supplementary Agreement Example: Yukos

17 Host Country Agreements Relevant to deciding place of arbitration? Example: Philip Morris Asia Limited v. Australia PO3 39. Indeed, if the Parties cannot agree, the choice of a place of arbitration in Europe for a dispute between two Parties in Asia and Australia could be seen as implying that no suitable place is available in that region of the world. Both Parties agree that Singapore is such a suitable place, though the Respondent expresses a marginal preference for London. In such circumstances the Tribunal feels that the choice of Singapore is the more natural and logical one. 40. Some further considerations would seem to confirm this preference convenience and travel distances of the parties and costs of support services needed would seem to speak in favour of Singapore over London Finally, the PCA, which is administering the present arbitration, has concluded a Host Country Agreement with Singapore, but not with the UK

18 Part III New Technical Demands Technical Experts Site Visits Panels of Specialist Arbitrators

19 Technical Experts as Arbitrators Indus Waters Kishenganga arbitration (Pakistan v. India) Treaty provided for one member to be a highly qualified engineer If parties cannot agree, appointed by Rector of Imperial College or MIT

20 Site Visits Kishenganga Hydroelectric Project, July 2011 site visit

21 Site Visits London Principles 6. Accessibility and safety adequate safety and protection of the participants

22 Site Visits Not just for interstate arbitrations Tribunal site visit to inspect environmental harm in arbitration between company and a state PCA negotiated privileges and immunities and arranged security Site visit was transcribed Relevant CIArb London Principles 6. Accessibility and safety protection of the participants, their documentation and information 7. Facilities functional facilities including transcription services 10. Immunity a clear right to arbitrator immunity

23 Panels of Expert Arbitrators IBA Recommendation (iv) The Task Force encourages arbitral institutions to take appropriate steps to develop rules and/or expertise specific to the resolution of environmental disputes. PCA Optional Rules for Arbitration of Disputes Relating to Natural Resources and the Environment PCA Optional Rules for Conciliation of Disputes Relating to Natural Resources and the Environment Both have lists/panels of arbitrators with expertise (used in a 2012 emissions trading case)

24 Part IV New Mechanisms Uptake on environmental rules? Future arbitration under and related to UNFCCC? Review panels, conciliation and other ADR

25 Uptake of Environmental Arbitration Rules Insertion of rules in model contracts Examples of disputes in practice Adaptation of rules for model contracts (appeal mechanism for approvals) Adaptation of rules for Model Statute on Legal Remedies for Climate Change

26 Future arbitrations under UNFCCC? UNFCCC, Article 14: 1. In the event of a dispute Parties shall seek a settlement of the dispute through negotiation or any other peaceful means of their own choice. 2. When ratifying a Party may declare in a written instrument.. That it recognizes as compulsory. Arbitration in accordance with procedures to be adopted by the [COP] as soon as practicable, in an annex on arbitration IBA Recommendation (i) The UNFCCC COP should adopt the PCA as the UNFCCC s preferred arbitral body.

27 and in contracts related to the UNFCCC? Contribution Agreements (between States and Fund) Arrangements with (private) Accredited Entities

28 Climate Change & Environmental Liability The Compact A liability regime for biodiversity damage Agreement drawn up by the private sector for use by UN Member States Mechanism to address potential liability for deliberate or inadvertent damage to the environment as a result of commercial operations Applies modified version of PCA Environmental Rules

29 Business & Human Rights Arbitration Tribunal? Proposal by Lawyers for Better Business A specialist set of arbitral rules tailored to business and human rights disputes A roster of arbitrators with a specialism in human rights disputes A roster of experts on human rights issues A registry (the PCA) to administer the proposed arbitrations A fund to assist human rights claimants with payment for the proposed arbitrations

30 Other new mechanisms? Conciliation of Environment Disputes? Clean Development Mechanism dispute example Involving project developer and host state over failure to issue carbon credits generated by project. initiated as arbitration; moved to conciliation (PCA env t rules); settled. Mediation for Investment Disputes? IBA s Investor-State Mediation Rules New working group of Energy Charter Secretariat

31 New mechanisms review panels Participants: 4 states, 2 IGOs, and a fishing entity Resolved within 6 weeks Conducted in 4 languages Fully transparent proceedings Cost approx. EUR 100,000 Russian Federation accepted recommendations

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