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Arbitration in 2018: evolution, revolution or repetition?

“There is nothing permanent except change.” (Heraclitus)

The international arbitration world has lots in store for us in 2018. We can certainly expect more of the same when it comes to the ongoing debates on third party funding, Brexit, transparency and diversity. Naturally, we can also rely on the institutions to unveil new rules and guidance, and for those interested in investment treaty arbitration, the International Centre for Settlement of Investment Disputes’ (ICSID’s) project to amend its rules will be gathering pace this year. On that subject, we will continue to closely track the revolt against the current form of investor-state dispute settlement (ISDS) and where that debate will lead.

So what’s new? Hopefully the discussion in 2018 around the evolution of arbitration will give us some insight into what’s to come in the future, including the possibilities that information technology and artificial intelligence will bring us.

This blog post gives a brief overview of these developments. For more discussion on these key developments, be sure to check out our new what to expect in 2018 article. To keep track of all ongoing arbitration-related development throughout the year, see our what to expect tracker.

Institutional developments and legislative changes

There is no doubt that the arbitral institutions will be busy again this year, with new rules expected from the Hong Kong International Arbitration Centre (HKIAC), the German Institution of Arbitration (DIS), the Milan Chamber of Arbitration (CAM), the Dubai International Arbitration Centre (DIAC), as well as new expedited arbitration rules from the Chartered Institute of Arbitrators (CIArb).

Last year, we also saw the institutions continue in their efforts to meet users’ demands for a more cost-efficient and transparent process, with the International Chamber of Commerce (ICC) and the London Court of International Arbitration (LCIA) revealing their approach to certain issues in the form of new or revised guidance notes. It’s possible we will see more of this practice going forward. The Singapore International Arbitration Centre’s (SIAC) innovative proposal on cross-institution cooperation for the consolidation of international arbitration proceedings will also be one to watch in 2018.

Amendments to arbitration legislation are still progressing (at times slowly) across several jurisdictions, including Australia, New Zealand, Sweden, Switzerland, the United Arab Emirates (UAE) and Ukraine. In England and Wales, while Brexit continues to attract all the attention, the Law Commission left reform of the Arbitration Act 1996 out of its official programme of reform, but did leave the door open to it, if resources become available.

More of the same: third party funding; transparency and diversity; and Brexit 

Third party funding is likely to continue dominating the headlines in 2018, with several anticipated developments. The International Council for Commercial Arbitration (ICCA) and Queen Mary, University of London (QMUL) task force will present its final report at the ICCA Congress 2018 in Sydney. In Hong Kong, the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Bill is likely to enter into force and the HKIAC is also considering provisions on third party funding in its revised rules.

Similarly, the coming 12 months will undoubtedly see continued efforts to increase transparency and diversity in arbitrator appointments. You will all be familiar with the Equal Representation in Arbitration Pledge, which did much to focus attention on gender diversity. The Arbitrator Intelligence project also seeks to promote transparency and diversity in international arbitration and we look forward to seeing if there is further take-up of its questionnaire, which it encourages counsel and parties to complete at the end of an arbitration.

Lastly, we can’t possibly go without mentioning Brexit and its potential impact on London arbitration. However, whether you believe the effect will be positive or that it may result in a decline in London-seated arbitrations, and at the expense of being tediously repetitive, the full implications still remain unpredictable.

You say you want a revolution? Investor-state dispute settlement (ISDS) and ICSID reform

In the words of Thomas Jefferson, “a little rebellion now and then, is a good thing”, and with the debate over the future state of ISDS raging on, there seems to be widespread agreement that there is a need for reform and change. Criticism about legitimacy and lack of transparency (among other things) have given rise to various developments, including the EU’s proposal for an investment court system in its free trade agreements, a possible Convention establishing a permanent multilateral court for the settlement of investment disputes, and the United Nations Commission on International Trade Law’s (UNCITRAL) project to consider ISDS reform. However, quite what shape a future system should take is far from settled.

Perhaps the most concrete development in this arena is ICSID’s project to amend its arbitration rules, which will gather momentum throughout 2018. In May, while most of the UK’s attention will be preoccupied with the Royal wedding, a meeting of state experts will take place in Washington, DC to consider the background papers on potential areas of reform.

Finally, we await the Court of Justice of the EU’s decision in Achmea v Slovak Republic, as it will be the first time the ECJ has considered directly whether arbitration clauses in intra-EU bilateral investment treaties are compatible with EU law. If the ECJ follows Advocate General Wathelet’s opinion, while perhaps not revolutionary, this would at least shake things up a bit.

A dialogue on evolution: ICCA Congress 2018; QMUL Survey 2018; and cybersecurity

2018 promises to raise some interesting dialogue on the evolution of arbitration. Hundreds of delegates will gather in Sydney in April for the ICCA Congress 2018 to hear speakers talk on the evolution and future of arbitration. The topic is also under the spotlight in what is probably the most high profile survey of the year, the 2018 QMUL and White & Case International Arbitration Survey. As information technology, and the possibilities that artificial intelligence (AI) can provide, develops at lightning speed, what does the future hold from an arbitration perspective? Might we see AI replace arbitrators or other legal roles? Having spoken to both Siri and Alexa recently, hopefully we can keep our jobs for a little bit longer.

With cybersecurity issues having the potential to adversely impact arbitration, we will also be closely watching out for the first steps of the newly created working group on cybersecurity in international arbitration, launched by ICCA in late 2017.


Hopefully you have all had a restful festive period, because 2018 is certainly going to keep us all on our toes. You can keep track of all these developments and more in our What to expect tracker.

Practical Law Arbitration Suzie Noble

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