International Arbitration

BELGIAN COURT CONFIRMS INDEPENDENCE

OF JUDGE SCHWEBEL

In the recent judgment of Republic of Poland v. Eureko and
Stephen M. Schwebel⁽²⁾, the Brussels Court of Appeals confirmed the lack of merit of the Republic of Poland’s challenge against Judge Schwebel, an arbitrator in the case of Eureko v The Republic of Poland.

This case had been widely reported, due to Judge Schwebel's prominence — he was president of the International Court of Justice in the Hague from 1997 to 2000 and is a much respected figure in international arbitration today. It also illustrates the increasing tendency of challenges being made against arbitrators worldwide.

We have prepared a summary of the issues surrounding this judgment. Please read it here.

⁽¹⁾ Please note that the author acted as Judge Schwebel’s counsel (together with
Pierre Van Ommeslaghe) before the Belgian courts. Mr Schwebel’s intervention was for the purpose of giving the parties and the courts all factual information needed concerning the challenge; it was not meant to be contentious.

⁽²⁾ Brussels Court of Appeal of 29 October 2007, R.G. 2007/AR/70, to be published with comments from Professor B. Hanotiau.

GERMAN FEDERAL COURT OF JUSTICE: ARBITRATION CLAUSE BEATS JURISDICTION CLAUSE IN

BATTLE OF THE FORMS

According to a recently published judgment of the German Federal Court of Justice (BGH)⁽¹⁾, a standard jurisdiction clause does not conflict with an arbitration clause contained in the terms and conditions of the other contracting party. The Court held that a jurisdiction clause does not necessarily imply that arbitration was to be excluded and that only state courts are competent to decide this issue. This judgment is an indication of the German courts’ pro-arbitration approach.

Contract Contained Two Contradictory Sets of Terms and Conditions

The claimant, seeking compensation for services rendered to the defendant, had started legal proceedings in German state courts. The contract between the parties included two separate sets of general terms and conditions. While the first set contained a clause titled “place of jurisdiction”, stating that the competent forum shall be the competent court at the seat of the supplier, the second set contained an arbitration clause. In a separate clause of the contract the parties had agreed on “place of jurisdiction: S.” The defendant raised the defence of an arbitration agreement.

In view of the arbitration agreement, the Regional Court of Potsdam, as well as the Higher Regional Court of Brandenburg and the Federal Court of Justice, rejected the claim as inadmissible.

With this ruling, Germany sends a clear signal that it is willing to uphold arbitration agreements. For our readers, we have prepared a brief overview of the issues in this case. Please read it here.

⁽¹⁾ BGH, judgment of 25 January 2007, VII ZR 105/06, published in
Neue Juristische Wochenschrift Rechtsprechungsreport, issue 24 of 30 December 2007, p. 1719

ARBITRATION IN SINGAPORE 2007

2007 was an exciting year for arbitration in Singapore. The city state achieved several milestones in further establishing itself as an international arbitration centre.

These included, in chronological order:

• the release of the Singapore International Arbitration Centre’s Arbitration Rules, third edition;
• the introduction of the Law Society Arbitration Scheme;
• the announcement of the Singapore government’s agreement with the Permanent Court of Arbitration to set up a regional facility in Singapore;
• the hosting of the Meeting of the ICC’s Commission on Arbitration and the International Bar Association Conference;
• the opening of the International Centre for Dispute Resolution in Singapore; and
• the announcement of liberalisation for foreign law firms practising in Singapore to conduct international arbitration work.

These recent developments, complemented by legislation that encourages international arbitration and an established policy of minimum judicial intervention, were introduced against the backdrop of several interesting decisions in the Singapore High Court and Court of Appeal.

To read about the decision that was perhaps the most interesting of these, please click here.

UNIQUE ARBITRAL REGIME

TO BE ESTABLISHED IN THE MIDDLE EAST

The Dubai International Financial Centre (DIFC) and the London Court of International Arbitration (LCIA) have agreed to collaborate in establishing a new arbitration forum for the Middle East.

The announcement, at the LCIA’s autumn symposium held at the DIFC, had been foreshadowed in the legal press and therefore did not come as too much of a surprise to the delegates. However, the follow-on announcement made by Ibrahim Belselah (Head of Arbitration for the DIFC) in relation to the jurisdiction of this new arbitral regime was greeted rather differently and sparked a flurry of questions and audience-led discussion.

The proposed dispute resolution regime, once operative, is almost guaranteed to create a level of accessibility, certainty, and confidence unrivalled in the Middle East.

For our readers, here is a brief discussion of the sea change that this new arbitration forum represents.

ECUADOR PLANS TO WITHDRAW

FROM AT LEAST NINE BILATERAL INVESTMENT TREATIES

The Republic of Ecuador has announced plans to withdraw from at least nine bilateral investment treaties, known as BITs.

BITs generally provide investors from one contracting state investing in the other contracting state with protection from expropriation and discrimination. BITs also provide that disputes with the host state concerning an investor’s investment may be resolved by arbitration in a neutral forum, rather than in the courts of the host state.

For more information about this development, please read here.

NEWS FROM THE ARBITRATION INSTITUTIONS

American Bar Association Releases Revised Disclosure Paper

The American Bar Association (ABA) has released a revised draft of its paper on potential conflicts of interest which should be disclosed by arbitrators. The draft, issued by the disclosure subcommittee for arbitration of the ABA’s Dispute Resolution Section, sets out recommended “best practice” disclosure guidelines to be used by arbitrators and includes a disclosure checklist and commentary to assist arbitrators in identifying and disclosing relationships and circumstances that may give rise to partiality issues.

The subcommittee has requested comments to the draft by
29 February 2008, with the aim of presenting the revised document to the ABA Dispute Resolution Section Council on 2 April 2008. See here
for a copy of the draft.

Activists Lobby in Support of Bolivia’s Withdrawal from ICSID

Campaigners have lent their support to Bolivia following the country’s attempt to block the registration by the International Centre for the Settlement of Investment Disputes (ICSID) of a claim lodged by Euro Telecom, a subsidiary of Italian telecommunications firm Telecom Italia.

Last year, Bolivia became the first nation to withdraw from the ICSID Convention, although the legal impact of the withdrawal remains unclear. In November 2007, the ICSID Secretariat responded to Bolivia’s request that ICSID not register the Euro Telecom claim, indicating that the question as to whether ICSID had jurisdiction should be determined by a panel of ICSID arbitrators.

Now 800 citizen groups have signed a petition addressed to the president of the World Bank objecting to the registration, claiming that failure to respect the Bolivian government’s decision to withdraw from ICSID “would only give further credence to the view that this is a system which undermines national sovereignty in favor of the interests of private corporations”.

No response has yet been given by ICSID.

A copy of the petition presented to ICSID is available here.

IN THIS ISSUE

Europe
Belgian Court Confirms Independence of Judge Schwebel

German Federal Court of Justice: Arbitration Clause Beats Jurisdiction Clause in Battle of the Forms

Asia
Arbitration in Singapore 2007

Middle East
Unique Arbitral Regime to be Established in Middle East

The Americas
Ecuador plans to withdraw from at least nine bilateral investment treaties

News from the Arbitration Institutions

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Editor, International Arbitration Newsletter

Kate Knox, London
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Diederik de Groot
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