The American Lawyer - Focus Europe, Summer 2011

sometimes loath to impose such discipline for fear of being seen to encroach on the parties’ ‘right to be heard’.”

WHAT OTHER ASPECTS OF THE
PROCESS GIVE RISE TO CONCERNS
OVER MOUNTING COSTS?

Michael Stepek: “Critics point to
the disinclination of arbitral
tribunals to dispose of matters on
the basis of threshold challenges to
jurisdiction, or on the arbitral
equivalent of motions to dismiss for failure to state a
claim upon which relief can be granted. It is often
queried by end-users why arbitrators allow the case to
proceed to its end only after each side has been able to
submit whatever arguments and evidence it wishes,
notwithstanding the arbitrators’ views as to the
relevance or necessity that they do so.”
Charles Adams: “This misperception on the part of
end-users of the arbitral process has been fuelled in
recent years by the large numbers of so-called
investment treaty cases in which the consideration by
the tribunal of a respondent government’s preliminary
jurisdictional challenge to a claimant’s dubious standing
as a ‘foreign’ investor is ultimately ruled upon and
upheld, but only after many tens and hundreds of
thousands of dollars in fees and expenses later. End-
users would undoubtedly welcome more rigor on the
part of arbitral tribunals in the early dismissal of claims
that are bound to fail.”

Charles Adams at Akin Gump in Geneva

HAVE ANY TRENDS DEVELOPED THAT ADDRESS THE CONCERN THAT THE PROCESS CAN BE TOO EXPENSIVE? Charles Adams: “Up until now the focus of international arbitration has been concentrated in Western Europe and other parts of the Western world, which means increased costs, not just in terms of the administrative and ancillary costs of the proceedings such as for hearing space, stenographers and the like, but legal costs too. Recently though, this geographic dominance has been challenged by the growth of regional centers in places such as Hong Kong, Singapore and Dubai. The growing market share of these regional centers is perceived by some consumers of the arbitral product to be a benefit, because they are geographically closer and have rules that are as fully functional as the longer-established centers.”

ARE THERE ANY CRITICISMS OF THE PROCESS ITSELF? Michael Stepek: “Today there has come into being within the community of international arbitration, a class of professionals (mostly lawyers, but also retired judges, academics and engineers) who act only as arbitrators, and who frown on the practice of brethren who in various cases can be found on either side of the

divide between arbitral bench and
arbitral bar. The argument is made,
by or on behalf of professional
arbitrators, that this is a healthy
development, insulating arbitral
tribunals from internecine
jealousies and conflicts of interest
in the rather closed universe of
international arbitration
practitioners and promotes the
evolution of a uniform body of
international arbitral
jurisprudence.”
Charles Adams: “The end-users of the arbitral
product do not see it this way, however. It is often said
that, if one wants professional finders of fact and law,
distanced from the rough-and-tumble of advocacy, then
it should be on national courts with their more robust
procedural protections and rights of appeal, than in the
instances of international arbitration. The view is held
by many end users that it is healthy and invigorating for
the arbitral process to have lawyers (or academics, or
engineers) acting as advocates here and arbitrators
there, bringing to bear in either capacity a rather more
holistic sense of international arbitration as a practical,
real-world, consumer-driven mechanism for the
resolution of commercial disputes.”

Michael Stepek at Akin Gump in Geneva

SO WHY SHOULD THE BUSINESS COMMUNITY TURN TO A
JURISDICTION LIKE SWITZERLAND TO RESOLVE ITS
DISPUTES THROUGH ARBITRATION?
Charles Adams: “Switzerland is one of the most stable
regimes in which to conduct international arbitration.
The domestic courts take a hands-off approach, and the
non-intrusion of the Swiss domestic courts in the
process is certainly a benefit. There is also a well-
developed infrastructure in place and compared to
other centers such as London or Paris it is perhaps
surprisingly lower in cost.”
Recently Akin Gump Strauss Hauer & Feld LLP secured
an unqualified result on behalf of Elektrim Finance B.V.,
a Dutch issuer of b500m of Euro-linked exchangeable
bonds, in an international arbitration adverse to Vivendi
Universal SA, and four of its French and Polish affiliates
and is currently lead counsel to ALSTOM Power in a
case which involves claims and counterclaims in excess
of b55m arising out of an agreement for the erection of
two 50 megawatt coal-fired boilers and turbines with
related ‘balance of plant’ facilities at Prony Bay, New
Caledonia.