By Jesse Van Genugten
Picture: Globe License: Public Domain
Constructed
as efficient and impartial adjudicative bodies for the resolution of
international disputes, arbitral tribunals issue globally enforceable awards as
a positive alternative to litigation in domestic courts. At least in theory. Faced
with public criticism that as a practical matter the tribunals are neither
impartial nor efficient, the system has come to a crossroads. This past year,
in response, various international bodies have endeavored to address concerns
with the current structure of international arbitration.
Investor-State
Dispute Settlement (ISDS)
In July
2017, at the annual United Nations Commission on International Trade Law
(UNCITRAL) in Vienna, the 60 member states resolved to open up a new forum to
first determine if the current ISDS system needs overhaul and if so, what that
improvement process entail. UNCITRAL’s newly inaugurated Working Group III will
discuss, compile, and reflect on interested parties’ experiences with the
current system—particularly focusing on a publically perceived lack of
legitimacy associated with the proceedings. (See UNCITRAL WGIII). UNCITRAL Rules on Arbitration
have been used in more than 30% of all ISDS cases, (see UNCTAD),
and therefore the new framework for state-led reform will likely shape the
landscape of the field for years to come.
Furthermore,
the World Bank’s International Centre for Settlement of Investment Disputes
(ICSID) has sought out, in the last year, member-state and expert opinion to
reform its arbitration rules. (See ICSID Amendment Process). In the next few months, the
Centre promises to publish background papers on several topics to improve its
arbitral proceedings, including expanding the arbitrators’ code of conduct and
providing a means for efficient consolidation of similar arbitral proceedings.
These academically oriented pieces will serve as a springboard for a modernizing
debate, and specifies a lens through which one can forecast future amendments
to the ICSID rules.
International
Commercial Arbitration
Diverse
in both the industries involved and nature of the underlying disputes, international
conflicts driving the use of commercial arbitration around the world show no
sign of decreasing in number. (See Global Arbitration News). Given the latest statistics
published, the Chinese International Economic and Trade Arbitration Commission
administered the most commercial arbitrations in 2016, but that number incorporates
both domestic and foreign disputes. On the other hand, the International Centre
for Dispute Resolution (ICDR), based in New York, served as the organization
responsible for administering the most foreign commercial arbitrations. Support
by ICDR, as a division of the American Arbitration Association, for reform therefore
proves significant in gauging developments in the field. Spearheading an
initiative to bolster the cyber-security measures necessary to protect
commercial arbitration disputes, as well as seeking to streamline the creation
of arbitral panels, ICDR has set its sights for reform high. (See 2018 Agenda) If these changes prove effective,
it could serve as a model for other international arbitration
institutions—particularly the largest few that share the bulk of the
proceedings—but that remains to be seen in 2018.
