“Where there is international trade, there will be international arbitration”

The eighth annual Open de Arbitraje in Madrid featured an international travel theme this year.

Publicado lundi, mai 9 2022
“Where there is international trade, there will be international arbitration”

The Open de Arbitraje returned to its usual May schedule for its eighth edition, less than seven months after its pandemic-delayed seventh edition in October 2021. This year’s event featured a world travel theme, with a focus on the lack of travel in recent years, international arbitration, and new trends in international and investment arbitration. Javier Íscar de Hoyos, the president of the European Association of Arbitration (EAA), opened the proceedings. The EAA is an organization dedicated to supporting and developing arbitration and mediation services and is responsible for hosting and organizing the Open.

“Arbitration is always moving forward and adapting to the current social, economic and, obviously, public health situation,” Íscar told Leaders Leagie. “That’s why this year the theme is ‘talking about arbitration while travelling all around the world.’”

One thing that hadn’t changed with this year’s Open was the hybrid model that it debuted at its last session, involving both in-person and online participation, with roundtable members participating via video chat from around the world.

In keeping with the theme of international travel, Clyde & Co.’s roundtable on arbitration and transport kicked off the event, moderated by Enrique Navarro, partner at Clyde & Co. The panel discussed the prevalence of arbitration in the transportation sector, with Juan Carlos Alfonso Rubio, Corporate General Secretary of Aena in Spain, saying that 25% of its contracts, about 3,000 in total, now included arbitration clauses in the event of a conflict. Most of these are subject to either English or New York law, the panel said, with 80% of disputes being settled in a UK court.

The second roundtable, hosted by Allen & Overy, discussed the importance of enforcing awards in arbitration. The panel was moderated by Antonio Vázquez-Guillén, co-managing partner at Allen & Overy, whose international arbitration practice is currently ranked as Leading by Leaders League. Vázquez-Guillén was joined on the panel by Benjamin Siino, founding partner of GBS Disputes in France, Anne Lespérance, head of Latin America Group, investment manager, and legal counsel at Omni Bridgeway in Canada, and Deva Villanúa, an arbitrator with Armesto & Asociados in Spain, who is currently ranked as a Leading arbitrator in Spain by Leaders League. One of the key issues the roundtable discussed were the challenges to enforcing awards, which may require significant resources. In addition, the process can be both time consuming and costly. Investors have to enforce their own awards in 40% of cases, yet for many the process remains an afterthought, according to Lespérance.

Enforcing awards can even involve personal danger for both lawyers and arbitrators, according to Villanúa, with some having to hire bodyguards in certain jurisdictions out of fear for their personal safety. Arbitration might not be the best forum to resolve disputes in which one side is willing to resort to violence or other extra-legal tactics, she added. “Where there is international trade, there will be international arbitration,” she said. “Have we killed the goose that laid the golden egg in arbitration? I think somewhat. We’ve expanded from a swift solution for specific issues to areas where it isn’t appropriate.” For arbitration to be possible, the free consent of equals acting in good faith is necessary, she added.

With the ongoing war in Ukraine, Freshfields’ roundtable on the implications of economic and political sanctions was particularly timely. The panel was moderated by Lluis Paradell, counsel for Freshfields in Italy. Freshfields’ international arbitration practice in Spain is currently Recommended by Leaders League. While the goals of sanctions are to impose costs on bad actors, diminish their ability to wage war, and diminish their economic base, they can also have a significant impact on international arbitration, and in some cases lock parties out of the international arbitration system. Arbitrators from certain countries may not be able to travel to all of the locations they may need to. Expert witnesses may also be unable to travel to an arbitration proceeding in order to testify because of sanctions. This can be particularly difficult for US lawyers and arbitrators, as the US Office of Foreign Assets Control, which is in charge of enforcing US sanctions, is not necessarily interested in collaborating with arbitrators to remedy the situation, the panel said. This makes it imperative that parties make sure that their contracts include strong sanctions clauses and robust compliance department to check their mandates.