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Looking ahead: anticipated developments in 2011: arbitration
Practical Law UK Articles 8-504-3991 (Approx. 5 pages)
Looking ahead: anticipated developments in 2011: arbitration
by PLC Arbitration
| Published on 05 Jan 2011 • ExpandAustralia, England, European Union...France, International, Spain, Switzerland, Wales |
A number of arbitration related developments are expected in 2011. The key areas to watch are highlighted in this article.
Brussels Regulation reforms: the arbitration exception
The European Commission published its legislative proposals for the reform of the Brussels Regulation on 14 December 2010. The Commission's proposals include a proposal to extend the arbitration exception contained in Article 1(2)(d) of the Brussels Regulation by adding a new provision requiring a court seised of a dispute to stay the proceedings where the question of arbitral jurisdiction is before either the courts of the seat or an arbitral tribunal. See Legal update, Brussels Regulation reforms: European Commission proposes to retain arbitration exception.
The Commission's proposal will be sent to the European Parliament and the Council to be considered under the ordinary legislative procedure (formerly the co-decision procedure). The Commission has indicated that final approval of the proposal is expected in the next two to three years.
The Ministry of Justice has published a consultation, Review of the Brussels I Regulation - How should the UK approach the negotiations, seeking views on whether it would be in the UK's national interests to opt in and apply the revised Brussels Regulation in the terms proposed by the Commission. The consultation, which seeks views on all the reform proposals including the arbitration exception, closes on 11 February 2011. For further discussion, see Legal update, MoJ consults on EC proposal to amend arbitration exception in Brussels I Regulation.
Arbitral institutions and rules
International Chamber of Commerce (ICC)
The ICC Commission Task Force is continuing its review of the ICC Rules of Arbitration. The Task Force was formed in October 2008 to ensure that the rules continue to meet the needs of users and to take into account any developments in the fields of arbitration and information technology since the current rules came into force in 1998. The new rules are expected to be launched in 2011.
In March 2009, a further ICC Task Force on arbitration involving states or state entities was tasked with reviewing the ICC rules and procedures and their use in disputes involving a state party, in particular in investment treaty arbitration. According to the ICC statistics in 2009, at least one of the parties was a state or state entity in 9.5% of cases. The Task Force met in 2010 to approve certain recommendations that will enhance the new ICC Rules in the settlement of such disputes.
We will continue to report on developments in 2011.
UNCITRAL
In 2010, the UNCITRAL Working Group II resumed its discussions on transparency in treaty-based investor-state arbitration (proposed revisions had previously been put on hold while the working group completed its review of the UNCITRAL Rules). The UNCITRAL Commission has tasked the working group with preparing a legal standard on the topic. At the latest meeting, the working group had preliminary discussions regarding the form and possible content of any standard, against the backdrop of widespread acknowledgement of the desirability of greater transparency in relation to international investment (see Legal update, UNCITRAL working group's report on transparency in investment arbitration). Discussions will continue at the next session, which will take place in New York on 7-11 February 2011. We will continue to report on developments in 2011.
New arbitration legislation
New legislation governing domestic arbitration came into force in Switzerland on 1 January 2011 (see Legal update, Switzerland: anticipated developments of 2010).
In addition, amendments to arbitration legislation are expected in Spain (see Legal update, Future amendments to the Spanish Arbitration Act) and Australian territories (see Legal update, Australia to get new domestic arbitration legislation). The new Commercial Arbitration Act, governing arbitration in Australian states and territories, is already in force in New South Wales and is pending in Tasmania. It is expected to be brought into force in other Australian states in 2011.
PLC Arbitration will continue to report on legislative developments in the multi-jurisdictional e-mail update.
Intra-EU BITs
The issues that can arise from the interrelationship between EU law and international investment law (specifically investment treaties to which EU member states are party) have given rise to a good deal of debate in recent months and have recently been considered by a number of arbitral tribunals (see Legal updates, UNCITRAL tribunal rules Slovak-Dutch BIT not affected by Slovakia's EU membership and ICSID decision on relationship between ECT and EU law). In July 2010, the EU Commission published a proposed investment policy (see Legal update, Commission publishes EU investment policy and sets its approach to bilateral investment agreements between member states and third countries), which was followed by the EU Foreign Affairs Council's conclusions on a comprehensive European investment policy (see Legal update, Council adopts conclusions on a European foreign direct investment policy). We will continue to report on developments.
Jivraj v Hashwani
In Jivraj v Hashwani [2010] EWCA Civ 712, the Court of Appeal held that arbitrators were in "employment" for the purposes of religious discrimination legislation and that an arbitration clause requiring the arbitrators to be Ismaili was unlawful. It also held that the offending part of the clause could not be severed to leave the rest of the clause intact, so the whole clause was void (see Legal update, Arbitrators are employees for the purpose of religion and belief discrimination). Of particular concern for the arbitration community is that the decision potentially applies to arbitration agreements which place restrictions on the nationality of individuals who may be appointed as arbitrators. This includes agreements which incorporate institutional rules, such as the ICC and LCIA Rules, that contain nationality provisions.
On 22 November 2010, the Supreme Court granted both parties permission to appeal. The appeal is expected to be heard in late 2011 (see Legal update, Supreme Court grants leave to appeal in Jivraj v Hashwani).