2016 gave us a bumpy ride for so many reasons, and developments in the arbitration world were no exception. While there can be no promises that 2017 will be as turbulent, the year still promises to provide some interesting developments in the arbitration arena. So as 2017 kicks in, with new year resolutions made and broken, Practical Law Arbitration has been looking ahead to the anticipated arbitration-related developments in 2017 and beyond.
Institutional rules, transparency and the pledge
We may need a crystal ball to predict some changes to the arbitral landscape (see ISDS, intra-EU BITs, Brexit and Trump below). However, one area requiring no soothsayer is in the production of new and amended rules, new projects and other initiatives by the arbitral institutions. Already this year we have seen the launch of new Stockholm Chamber of Commerce (SCC) Arbitration Rules and Singapore International Arbitration Centre (SIAC) Investment Arbitration Rules, and in March we can expect the International Chamber of Commerce’s (ICC’s) revised rules to be published, including an expedited procedure that will automatically apply to arbitrations with amounts in dispute below $2 million. What is unforeseen however, is whether these new provisions will cause issues with enforcement of ICC awards if parties are caught unaware of the fact that the new provisions will expressly override the parties’ agreement when the expedited procedure applies. With the Dubai International Arbitration Centre (DIAC) and the German Institute of Arbitration (DIS) also overhauling their rules, we may see revised versions in force before the year is out.
The trend towards increased transparency, with many of the institutions publishing data on average cost and durations of proceedings, as well as other initiatives, will no doubt continue throughout 2017. Notably, we are very likely to see further efforts aimed towards implementing the Equal Representation in Arbitration Pledge.
Legislation and third party funding
Looking back over our review of 2016, it’s clear that third party funding of arbitration claims will continue generating widespread interest and discussion. While we eagerly await publication of the final report of the ICCA/QMUL Task Force on Third Party Funding, expected by the end of the year, we can anticipate further progress of new legislation to allow third party funding in Singapore and Hong Kong, with Hong Kong already gazetting the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Bill 2016 just before the close of 2016.
In addition to third party funding legislation, amendments to arbitration legislation is at various stages in several jurisdictions, including Canada, New Zealand, South Africa and Sweden, with publication of the draft amendments to the Swiss Arbitration law expected this month. Also on the cards this year are the amendments to the Hong Kong Arbitration Ordinance regarding intellectual property (IP) rights. In the meantime, those of us in England and Wales will have to wait patiently to see if the Law Commission includes the English Arbitration Act in its forthcoming programme of reform, following a consultation that ended in October 2016.
ISDS, intra-EU BITs, Brexit and Trump (crystal ball time)
This is the part where predicting the future becomes particularly challenging. One thing that is clear is that the debate surrounding investor-state dispute settlement (ISDS), particularly in relation to free trade agreements being negotiated between the EU and other countries, will remain a hot topic in 2017. In parallel, the European Commission’s (EC’s) aim to reform ISDS in the form of a permanent multilateral investment court will continue to keep us captivated. Those with views on this have until 15 March 2017 to respond to the new EC public consultation on options for multilateral reform of investment dispute resolution. Continuing the EU theme, the Court of Justice of the European Union’s decision on whether intra-EU BITs are compatible with EU law may be given in 2017 (or possibly 2018) and this is likely to have a significant impact on ongoing disputes. With that subject in mind, we may also see further progress in the EC infringement proceedings against five member states requesting that they terminate their intra-EU BITs. Moving across the Atlantic, the future of the Transatlantic Trade and Investment Partnership (TTIP), North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP) have all become shrouded in uncertainly since the election of Donald J Trump.
Not wanting to be outdone by other countries, the UK also holds its own Trump card in the form of Brexit. While Prime Minister Teresa May hardly shocked us all with the statement that “Brexit means Brexit”, and last week the former Conservative leader Iain Duncan Smith provided another revelation that the UK government’s main objective in Brexit negotiations is to leave the EU (who knew?), all of us remain in the dark as to the full implications for the UK in general, not to mention for arbitration. We will certainly be closely monitoring the potential implications of Brexit on arbitration, especially regarding the EU’s trade and investment policy and future free trade agreements, as well as on London as an arbitration centre.
What we can foresee with some certainty is that, while we pound the pavement in an attempt to rid ourselves of excess holiday weight, we are bound to hit more bumps along the way this year.
More detail on the changes outlined here, along with many others, can be found in our What to expect in 2017 article.