JAMS International ADR Blog

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How to prepare for mediation: a checklist

by Matthew Rushton on 12 Jan 2017

Clients have a right to expect a high level of technical expertise from their lawyers. Beyond this, what distinguishes the excellent from the merely acceptable in mediation advocacy is often the quality of prior preparation.

One salutary tale is that of the mediator who, while practising as a solicitor, acted for one of the world's leading professional gamblers. The gambler concerned made a living taking on all-comers at Blackjack. She became involved in a rights dispute and sought advice on her prospects of succeeding in a legal claim. The solicitor gave his standard line: "You've got a 70 per cent chance of succeeding with the claim, your costs will be X if you win and X if you lose." "Is that it?" she asked. "What kind of a risk assessment is that? I need to know about my opponent – what advice are they getting? What's their personality? Are they gamblers? Will they see this thing through to the end? How do they cope with stress? Will they break under cross-examination? Is their house on the line?" In short, she wanted a full risk assessment of all the relevant circumstances. Litigation was not a gamble she was about to undertake lightly.

The message is: the better informed you are of all the circumstances that might potentially affect the outcome, the better able you are to take advantageous decisions.

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ADR challenges for general counsel

by Philip McMullan on 09 Jan 2017

The legal system and legal profession are, by their very nature, conservative. There are good reasons for this. Certainty is key for businesses, to ensure that they operate within the law and that their investments are made with the full facts about potential liabilities. A legal system which changed the rules frequently would make it impossible to do business. And clients are unlikely to be impressed by a lawyer who wants to innovate with a new approach when there are millions of pounds in dispute. Stick to what works, what's tried and tested, to achieve a predictable outcome, is the conventional wisdom.

These facts were brought home to me when I recently discussed ADR with the general counsel (GC) of a large FMCG business and two litigation partners based in London. All are UK-qualified lawyers.

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Can parties to an arbitration seek injunctive relief?

by Philip McMullan on 05 Dec 2016

There are several reasons why parties to an arbitration might want to seek urgent injunctive relief during a dispute. Fear of assets being disposed of or otherwise put beyond reach must be among the most common. It was certainly a key factor in Gerald Metals SA v Timis, a recent case in which the High Court held that it did not have power to grant urgent relief in support of arbitration, in circumstances where timely and effective relief could be obtained through the arbitral process - for example, by appointing an emergency arbitrator.

The decision has introduced a degree of uncertainly into whether parties should proceed through the courts in English-seated arbitrations when they need to act fast to protect assets or evidence.

The facts

Gerald Metals is a commodities trader, which had entered into a financing arrangement with Timis Mining. Under the arrangement, Gerald Metals would advance $50 million to Timis Mining to finance the development of an iron ore mine in Sierra Leone. Timis Mining would then sell iron ore extracted from the mine to Gerald Metals in monthly shipments, subject to an offtake agreement. The $50million advance would be repaid (with interest) in monthly instalments deducted from the price of the iron ore shipments.

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The mediation process: what, when and where?

by Matthew Rushton on 02 Dec 2016

The mediation process presents an opportunity to engineer a more favourable settlement than might be achievable through the courts. As an alternative, it offers swift resolution of a dispute and the return to a productive working relationship. 

Mediation is about finding an intelligent, pragmatic and commercial basis for resolving a dispute above and beyond the minutiae of legal argument. If, during a mediation, the "right" legal answer is found, that should be seen as a fortunate by-product, and not the object of the exercise.

So, how should you conduct the mediation process

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Why Brexit negotiations will fail

by Matthew Rushton on 29 Nov 2016

Brexit negotiations present a soup of toxic ingredients familiar to any commercial mediator: high stakes, high emotions, personality clashes, lack of preparation, restricted time and a misconceived negotiation strategy.

At stake is the world order that has kept the peace in Western Europe for seventy years. The EU’s founding premise was to bind France and Germany in so tight an embrace that they could never again raise arms against each other. The Brexiteers are far from unified, but reject the status quo. At their outer fringes they rejoice in the possibility that Brexit could trigger the EU’s ultimate destruction. Their vision is a Europe of disaggregated independent states, with strong borders and restrictions on free movement of people.

The backdrop to these competing visions is emotional and antagonistic: threats of civil disobedience, coupled with a surge in hate crime and the murder of a Member of Parliament, hint at the likely social cost of an unsatisfactory outcome to negotiations. The economic cost of failure is likewise grave, and would fall disproportionately on the UK where lower investment, lower productivity, higher inflation and increased government borrowing could impact generations as yet unborn.

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Singapore competes as an international dispute resolution centre

by Philip McMullan on 25 Nov 2016

Singapore has been steadily growing in importance as an international dispute resolution centre in Asia Pacific in recent years. The Singapore International Arbitration Centre's (SIAC) 2015 annual report noted that the jurisdiction had enjoyed its best year since the body was founded in 1991. Not only was it a record year in terms of the highest ever number of cases filed (271), SIAC also reported that the cases involved the highest ever total of sums in dispute – S$6.23bn, around US$4.4bn.

Singapore is vying with Hong Kong for the top spot in Asia Pacific but still has some way to go. The Hong Kong International Arbitration Centre's (HKIAC) 2015 annual report records 271 arbitrations, 22 mediations and 227 domain name disputes. The total aggregate sums in dispute for arbitration matters were US$6.2bn, around a third more than Singapore. Hong Kong has a six-year head start on Singapore (HKIAC was founded in 1985), so it is not surprising that it hosts more international arbitrations. But now the city-state is bringing forward legislation to make alternative dispute resolution (ADR), whether arbitration or mediation, more accessible, hoping to close the gap on its rival.  

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How is third-party funding used in UK arbitration?

by Philip McMullan on 17 Nov 2016

The use of third-party funding in UK arbitration has grown significantly in recent years, with some funders now reporting that their portfolio of cases is equally weighted between litigation and arbitration matters.

At a recent Q&A, Ruth Stackpool-Moore, director of litigation funding and head of Hong Kong at Harbour Litigation Funding, explained that the past 12 months have seen further exponential growth in the use of third-party funding generally and, particularly, an increase in the number of enquiries regarding arbitrations - especially from large, well-capitalised companies.

Now a decision of the High Court has further advanced the cause of litigation funding for arbitration in the UK. In Essar Oilfields Services Limited v Norscot Rig Management Pvt Limited, the High Court upheld an arbitrator's award, which ruled that nearly £2 million of arbitration funding costs were "other costs" within the meaning of the Arbitration Act 1996 and so were recoverable from the claimant. While the facts of the case are such that they may not amount to strong authority, the Court signalled that there is a distinct recoverability regime for parties to arbitration.

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Evaluating arbitrators: you be the judge

by Matthew Rushton on 10 Nov 2016

In 2007/8, I set up a now long-since defunct website (disputesloop.com) with the lofty aim of introducing some transparency into the appointment process of ADR neutrals. At its core, the site offered a battery of neutrals' CVs supplemented with free-form written feedback from users.

On one level, it aimed to substitute the kind of third-hand market gossip that makes some ADR careers and breaks others, with something substantial, first-person and, importantly, in the public domain. I was keen for this feedback repository to develop into a body of market knowledge to inform the uninitiated and to develop a framework for objective discussion of the competencies of mediators and arbitrators.

The hope was that users would become more discriminating in their choice of ADR professionals, more concerned to match skills and competences to the requirements of the case, and more articulate about what they wanted from ADR professionals. I also hoped that the site would guide the market's invisible hand to push out those who overtraded and under-delivered, while rewarding the capable and conscientious.  

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Hong Kong Arbitration Week: a note from a small island

by Matthew Rushton on 02 Nov 2016

For all the commendable change in international arbitration, we're still squeezing the wrong end of the toothpaste tube.

Despite two typhoons, a black weather signal, and the potentially bleak theme of "arbitration challenged", Hong Kong Arbitration Week (17-21 October, 2016) was an upbeat affair. And why not? Numbers of international arbitrations have been growing steadily worldwide for the last decade, with notable success in the Asia Pacific region.

But, as every investor knows, past performance is no guarantee of future results. Sir Vivian Ramsey outlined four areas of concern to the arbitral community in his keynote speech at the ADR in Asia conference: time and cost; competition (both from other ADR methods, and from new and existing commercial courts); the so-called "Thomas Point" (concern that courts should intervene more in arbitration to develop the common law); and, finally, ISDS issues and the prospect of a two-tier court for investor-state matters. 

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How is third-party funding affecting arbitration?

by Philip McMullan on 28 Oct 2016

Third-party funding has had a significant impact on litigation in recent years as corporates and law firms seek to control their risk profile while accessing capital that might otherwise be tied up for long periods.

At a recent Q&A session, organised by law firm Norton Rose Fulbright, leading players in funding set out how international arbitration is being affected by the availability of alternative funding mechanisms.

The growth of third-party funding

Asked about emerging trends, Ruth Stackpool-Moore, director of litigation funding and head of Hong Kong at Harbour Litigation Funding, explained the rapid changes she is seeing: "The past 12 months have seen further exponential growth in the use of third-party funding generally and, particularly, an increase in the number of enquiries regarding arbitrations.

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