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Hong Kong Arbitration Week 20-25 October 2019

Hughes Krupica’s Dispute Resolution Expertise
A significant part of Hughes Krupica’s service business relates to dispute resolution. Hughes Krupica has represented various parties as counsel in relation to disputes in real estate; construction and marine construction sectors.

Victor Smith, a Chartered Arbitrator with over 48 appointments as an arbitrator for institutional and ad hoc disputes in a broad range of jurisdictions with a focus on Asia, and 35 appointments as party representative, is the lead advisor and consultant to Hughes Krupica in its dispute resolution matters. Victor is also the current Chair of the ICC Commission on ADR and Arbitration to Thailand, a member of the ICC Commission ADR and Arbitration, Paris, the Chair of the Chartered Institute of Arbitrators (“CIArb”) Thailand Branch and a Fellow of CIArb. Victor also has an LLM in International Commercial Law, a diploma in International Commercial Arbitration, a post-graduate diploma in arbitration and a BSc Degree in Quantity Surveying.

Desmond Hughes is a Senior Partner at Hughes Krupica and is responsible for its dispute resolution, hotel investment, real estate and transnational corporate/commercial practices. Desmond has worked on over 25 disputes as counsel and co-counsel. Desmond qualified as a solicitor in England and Wales in 2002, passed the Hong Kong Overseas Lawyer Qualification examination in 2012 and has operated and owned as partner two key legal practices in Asia including Hughes Krupica over a 17-year period to date. Desmond is the current Vice-Chair of the ICC Thailand Commission on ADR and Arbitration, a member of the ICC ADR and Arbitration Commission, Paris, and the current Vice-Chair of the Chartered Institute of Arbitrators Thailand Branch. Desmond is a Fellow of the Chartered Institute of Arbitrators and is in the latter stages of completing his LLM in International Corporate and Commercial Law at King’s College London, part-time course whilst continuing his professional work commitments.

Hong Kong Arbitration Week

As of 2019, Hong Kong has hosted 8 Hong Kong Arbitration Week events in association with the Hong Kong International Arbitration Centre (“HKIAC”) . Various law firms, legal tech, forensic, dispute resolution service providers and media outlets support Hong Kong Arbitration Week. The event is structured as a mixture of presentations, seminars, panel discussions, keynote speaker events and evening social and networking activities. The attendees comprise a diverse mix of professionals connected to dispute resolution such as lawyers; arbitrators; judges; barristers; advocates; Government officials; business leaders and executives; scholars and industry experts. This is a good opportunity for anyone interested or involved in dispute resolution to exchange ideas, learn about industry developments and practice and to meet existing and new contacts in a structured but enjoyable forum.

Hughes Krupica's Involvement in Hong Kong Arbitration Week
In keeping with the spirit of the flexibility of dispute resolution and party autonomy, part of the convenience of Hong Kong Arbitration Week is the flexibility available to select the events from a menu. Desmond Hughes attended key events between 21st-25th October through to 25th which included a cross-border M&A training and knowledge session organized by the American Bar Association (“ABA”) with a minor element of dispute resolution included in the program. A fuller report on the ABA Cross-Border event will be issued separately to this report.
Skadden, Arps, Slate, Meagher & Flom - Emergency Arbitration, Interim Measures and Expedited Procedures (Monday 21st October)
The panelists discussed and compared procedures in different jurisdictions, the practical issues relating to the use of procedures and examples of where a particular dispute may warrant their use.

Although emergency arbitration procedures were not empirically used often, the value of the availability of emergency arbitrators was clearly beneficial to users and is supported by institutions such as HKIAC. Expedited procedures were discussed in relation to the balance between the oft-described benefits of ‘efficiency’ and the need in certain cases to allow for more substantive preparation and analysis. As is the case in many party relationships, there is no one-size fits all solution for disputes and it was noted that the dispute or claim value threshold may not always be appropriate if the complexity of a dispute warrants a non-expedited procedure with hearings. Parties and their advisors must understand and utilize any opt-in or opt-out default positions with care, to ensure the rights of parties are maintained to proceed with the dispute track they believe they are bargaining for.

The recently adopted special arrangement for the mutual recognition of court ordered interim measures (Arrangement Concerning Mutual Assistance in Court-Ordered Interim Measures in Air of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region. See English translation).  (“HK/PRC Special Arrangements”) between Hong Kong and the Mainland People’s Republic of China (“PRC”) received coverage in this session and many subsequent sessions. Parties to arbitral proceedings seated in Hong Kong and administered by an authorized institution may, prior to issuance of the arbitral award, apply to the relevant PRC courts for interim measures. The current authorized arbitral institutions are the HKIAC; the International Court of Arbitration of the International Chamber of Commerce; the China International Economic and Trade Arbitration Commission Hong Kong Arbitration Center; the Hong Kong Maritime Arbitration Group; the South China International Arbitration Center (HK); and the eBRAM International Online Dispute Resolution Centre.

Latham & Watkins - ICC Arbitration Seminar (Monday 21st October 2019)
Alexis Mourre, President of the ICC International Court of Arbitration provided the opening remarks on Hong Kong’s International Arbitration Landscape – Adapting to New Dynamics. Mr. Mourre discussed, amongst other things, the growth in number and value of disputes in the region reflective in its continued economic rise. Mr. Mourre also discussed the ICC’s continued activities to support dispute resolution in Asia and in international links with Asia, and discussed the adaptive methodologies required to remain flexible for the benefit of the parties as the principal users of the arbitral system.

The subsequent seminar was moderated by Justin D’Agostino, Chair of the ICC Belt & Road Commission and the panel members comprised Rimsky Yuen SC, Barrister and former Hong Kong Secretary for Justice, Peter Quayle, Deputy General Counsel, Asian Infrastructure Investment Bank, Hongwei (David) Jia, Founding Partner LongAn (Shenzhen) Law Firm and Meg Utterback, Partner of Kong & Wood Mallesons.

The seminar primarily centered around the HK/PRC Special Arrangements which were noted for the first but not the last time in the arbitration week as a ‘game-changing’ development under which parties were expected to benefit greatly from the co-operation for and recognition of interim measures. It was noted that the arrangements had already been utilized on 5 separate occasions since implementation. Information on the PRC test and requirements for securing interim measures was also provided included the report that PRC Courts would highly likely always require a security or bond to support the application and that such bond could be provided by cash or with bank guarantees or with payment insurance.

4th Annual Harbour Lecture by Sophie Lamb QC, Global Co-Chair of International Arbitration, Latham & Watkins “Is Arbitration Sustainable? ” (Monday 21st October 2019)
Sophie Lamb QC delivered a wide-ranging analysis of the global changes, framed within the United Nation’s Sustainable Goals, which are impacting upon the role of arbitration in society. Ms. Lamb discussed climate change impact, corporate governance and changes to the concept of investment in the context of perceived ‘privatisation of justice’. See summary at Kluwer Arbitration Blog, 24th October 2019 by Felicia Chang and Dominique Young, Clifford Chance.

Ms. Lamb also discussed the historical lack of diversity in the arbitration sector and how this has been addressed and continues to require a modern reformist approach. Ms. Lamb discussed the various uses of new technology in arbitration and business, the benefits and challenges arising from that use and the balance between tool-supplement, process enhancement, and human oriented tasks. Ms. Lamb further mentioned new developments in dispute resolution such as new state backed international commercial courts and the Singapore Convention on Mediation and concluded with an opinion that technological advancement should on the whole be embraced and not feared, but with mitigation of risks such as cybersecurity measures, data protection and appropriate resource allocation methods.

The venue for this talk was filled with hundreds of delegates and the presentation was clearly well received, topical and stimulating.

ADR in Asia Conference: Arbitrating for Settlement
The conference day was opened with welcoming remarks by Matthew Gearing QC and a keynote address by Karl Hennessee, Senior Vice-President and Head of Litigation, Investigations & Regulatory Affairs at Airbus Group. Mr. Hennessee provided information on his positive and negative experiences with the arbitral process and cited one experience when a party decided to use an arbitral award as a contract interpretation tool, attaching the interpretative provisions of the award to a contract to reduce doubt or information gaps between the parties before entering into the contract and for post contract reference purposes.

Mr. Hennessee encouraged those involved in the production process of an award to consider the topic, purpose, audience and timeliness of the product, remembering that the product is designed to service the users, ‘laypeople’, and not the lawyers involved in the process itself.

Issues with unpredictability of outcomes between parties involved in arbitration in comparison to litigation were cited in relation to an article written by Jill I. Gross Bargaining in the (Murky) Shadow of Arbitration (24 Hary. Negot. L. Rev. 185 (2019) pp 185-212).

In the second session a debate style approach addressed the arbitral tribunal’s scope to “actively facilitate” party settlement of disputes, and further examined civil and common law approach differences between arbitral tribunal members. Issues of ‘fact finding’, objective to discover the ‘truth’ and cognitive bias were raised as relevant to these issues. The efficiency of provoking settlement based approaches and the benefits for the disputing parties in terms of cost and ongoing or future relationships was also mooted. The importance of obtaining consent in order to mitigate challenges to due process when addressing potential settlement paths was also discussed.

Methods for arbitral tribunals to consider promoting settlement were conveyed by the discussion panel members: shaping the proceedings at the beginning, using a flexible hybrid common/civil law approach to reduce issues on disclosure overload and over adversarial approaches to fact finding. Witness questioning and identifying key opportunities for potential settlement were also seen as important elements. Overall, balance is required between settlement promotion and accepting when parties have no interest in settlement at all, and continually monitoring for changes to this position of the parties and proceedings.

A brief presentation was provided on HK45 Group, targeting young and young-at-heart professionals for collaborative information exchange and social activities. HK45 has a wider membership than Hong Kong and actively encourages those not based in Hong Kong to become involved its activities.

The afternoon session covered the much promoted HK/PRC Special Arrangements and was followed by a very interesting one-on-one interview style session with Neil Kaplan QC, CBE, SBS, Arbitrator, Arbitration Chambers who discussed his views of arbitration’s development and his personal experiences in the development of his career.

The next session comprised an analysis of the links between psychology and the arbitral process and those participating within it. Reference was made to the Harvard developed “Implicit Association Test” , recommended as a valuable tool to identify and analyse social and other biases in individuals and to work on methods to reduce bias, in particular when issuing judicially reasoned awards and decisions. Training can overcome and mitigate these biases. Joe Navarro’s “The Power of Body Language” in 2009 was also cited as a valuable resource for professionals to review their behavioral tendencies. This presentation was concluded with references to negotiation tactics and behavior, noting that traditional understandings of competitive advantage in negotiation such as ‘who goes first’ may be altered by information and behaviour of the relevant parties.

The final presentation of the day related to the ICCA 2020 Congress to be hosted in Edinburgh, Scotland, United Kingdom at the Scottish Arbitration Centre. Mr. Andrew Mackenzie, Chief Executive of the Scottish Arbitration Centre, presented in traditional Scottish attire, a video presentation including a welcome address by the Scottish First Minister, Ms. Nicola Sturgeon, on her views of the benefits of arbitrating in Scotland. Interesting information on positive reasons for visiting Scotland to attend ICCA 2020 Congress was also provided.

 The Global Arbitration Review (“GAR”) 9th Annual GAR Live Hong Kong (Wednesday, 23rd October 2019)

Session 1: The Year in Review; an update on arbitration in Hong Kong and across the globe
The first session focused on Hong Kong and PRC developments relating to arbitration and therefore covered the HK/PRC Special Arrangements. The panel members explained that the PRC Test is based on American Cyanamid principles and is therefore based on a widely accepted normative framework, with the supporting PRC guiding model case of Eli Lilly v Huang Mengwei cited as an example.

The Singapore Convention on Mediation was cited as potential significant development in the array of solutions available to parties in dispute and may be attractive to PRC market players. However, it was noted that a sanction based settlement agreement may only be required if there is a likely breach at or close to the time of settlement, which is considered unlikely if the parties have arrived at such a settlement. The fact that mediators have to sign the mediation agreement and then need to manage their liability, and the potential for a party to challenge a signed settlement agreement for ‘serious breach’ by the mediator or a failure to disclose impartiality was cited as a potential weakness in the new system.

A few PRC specific issues were discussed such as the fact PRC law does not expressly recognize emergency arbitration procedures, but nevertheless has accommodated emergency procedures under institutional rules selected by disputing parties and has recognized onshore arbitration conducted by Offshore Institutions as per the Longlide case (Anhui Longlide Packing & Printing Co. Ltd v BP Agnati S.R. L 2013 Min Si Ta Zi No.13 Supreme People’s Court.

Session 2: Issue with witnesses: making tactical decisions and developing strategy
The second session of the day related to issues with witnesses, making tactical decisions and developing strategy. Issues with setting aside of arbitral awards for lack of due process on technical grounds were discussed in relation to the P v D case in the U.K.((PvD (2019) EWHC 1277 (Comm)) under which the English High Court determined the award was set aside due to a core issue not being put properly to a witness in cross-examination. There was extensive discussion in the panel session and question and answers about different experiences of common law, civil law, mixed common/civil law arbitral tribunals and the different approaches counsel and arbitrators might apply to the extent they intervene by examining witnesses. The lack of universality of opinion was notable, with representatives from the U.S. strongly asserting that in U.S. arbitration proceedings or with U.S. influenced proceedings, the arbitral tribunal electing to cross-examine a witness of their own accord would be considered as unusual at best or totally unacceptable and a breach of due process at worst. Civil law professionals and arbitrators with experience of mixed jurisdictional matters expressed different views.

Expert evidence techniques were discussed including the alignment of different experts to eliminate from consideration agreed points and for efficiency to instead focus on non-aligned points. It was generally mooted that witness intimidation tactics and even ‘common’ adversarial cross-examination techniques popularized in certain common law jurisdictions were not considered a beneficial norm in arbitral proceedings.

Interlude: a Yum Cha Chat with Zia Mody

Partners, one of India’s most recognized law firms. Ms. Mody provided her personal account on growing a law firm from a small enterprise into a large enterprise and the focus on corporate governance that required. Ms. Mody then provided her analysis on global economic developments and contextualized India in that description.

Session 3: International arbitration in the era of tougher financial crime enforcement
In the third session, financial crime enforcement was considered in the context of issues that arbitrators should be aware of with can influence or taint arbitral proceedings, or can in rare but serious scenarios, result in criminal liabilities for the arbitrators themselves.

The World Duty Free Company v. Republic of Kenya ICSID Case was discussed under which a claimant invoking rights of protection under an investment treaty may lose its rights under international law if its actions were tainted by corruption and/or bribery. The differences between local custom and corrupt practices were discussed in the context of international and recognized standards, which are not all harmonized or uniform.

The extent of relevance of corruption to proceedings was further discussed, and a Michael Hwang S.C and Kevin Lim article was cited as a good reference of information, entitled “Corruption in Arbitration – Law and Reality” (available as essay 15 in Selected Essays on International Arbitration (Academy Publishing 2013) pp. 566-730) .

Panel members reminded the attendees of the Specially Designated Nationals and Blocked Persons list maintained by the U.S. Department of the Treasury which is available for inspection. This list should be inspected by professional practitioners as a matter of due diligence into the parties involved in a dispute or claim.

Session 4: The International Arbitration Team of the future - greener; more diverse, and better at combining with a family life?
This fourth session addressed a series of important current topics seriously affecting the lives of those entering the international arbitration arena, and those already operating within it. The seminar was structured so that two panels provided arguments for and against restricted working hours, better implementation of greener practices such as selective travel, and ensuring a better balance between family and working life.

Both panels submitted strong arguments supporting their allocated ‘case’. The audience participated in questions and answers and were asked to vote in favour of the panel with the strongest arguments. The panel in favour of more modern practices won the vote. It was noted that there is a widespread belief that in law and arbitration there must be an intense input involving long working hours and personal sacrifice in order to produce the most successful outcomes.

However, it was not clarified why this particular principle should be applied to law and arbitration, and not applied across the board to all professions and employment. There is a tendency in the legal world, perhaps from historical underpinnings, to believe that somehow the ‘importance’ of the profession means additional hours and sacrifice is a mandatory element. However, with the increasing global attention to wellbeing and green practices, the legal profession and its participants may be better off by modernizing and reforming to align with the parties they serve. On a personal level, families of professionals may also obtain greater benefits from a more balanced lifestyle.

American Bar Association Asia-Pacific Forum: Strategies to Navigate the Life-Cycle of a Cross-Border Deal – 24th-25th October 2019

The main focus of this 2 day forum was a hypothetical cross border transaction with sessions on machines and mergers; high-stakes cross-border transactions; bribery and corruption; deals gone bad; and ethics.

A separate report on the cross-border and M&A elements of this session will be produced by Hughes Krupica for circulation. The session on ‘Deals Gone Bad’ addressed the importance of trying to ensure that transaction documents are aligned to include properly drafted non-pathological arbitration clauses, that the correct timing of consultation with dispute resolution professionals to assist in negotiations an drafting of documentation is employed where practicably possible, in the best interests of clients.

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