International Arbitration 2017

537 Pages·2017·7.27 MB·English

ICLG
The International Comparative Legal Guide to:
International Arbitration 2017
14th Edition
A practical cross-border insight into international arbitration work
Published by Global Legal Group, in association with CDR, with contributions from:
Accuracy DLA Piper UK LLP Paul, Weiss, Rifkind, Wharton & Garrison LLP
Ali Budiardjo, Nugroho, Reksodiputro Dr. Colin Ong Legal Services Popovici Niţu Stoica & Asociaţii
AlixPartners Duff & Phelps Portolano Cavallo Studio Legale
Andersen Tax & Legal Eric Silwamba, Jalasi and Linyama PUNUKA Attorneys & Solicitors
Anderson Mori & Tomotsune Legal Practitioners Rojs, Peljhan, Prelesnik & partners
Attorneys at law Ratiolex Ltd Freshfields Bruckhaus Deringer LLP Salazar & Asociados
Baker McKenzie Georgiev, Todorov & Co. SBH Law Office
BDO LLP Gregoriou & Associates Law Firm Secretariat International
Bekina, Škurla, Durmiš and Spajić Ltd. HFW Sedgwick Chudleigh Ltd.
Bizlink Lawyers Homburger Weber & Co.
BMT LAW Kachwaha and Partners Williams & Connolly LLP
Boss & Young, Attorneys-at-Law König Rebholz Zechberger Wilmer Cutler Pickering Hale and Dorr LLP
BRISDET Linklaters LLP
Brödermann Jahn RA GmbH Loyens & Loeff Luxembourg S.à.r.l.
Cases & Lacambra Matheson
Christophe Dugué – Avocat Moroglu Arseven
CMS Cameron McKenna Njeri Kariuki Advocate
Costa e Tavares Paes Advogados Norburg & Scherp
The International Comparative Legal Guide to: International Arbitration 2017
Preface:
■ Preface by Gary Born, Chair, International Arbitration Practice Group,
Wilmer Cutler Pickering Hale and Dorr LLP
General Chapters:
1 Class, Collective and Mass Arbitrations – Charlie Caher & Jonathan Lim,
Contributing Editors
Wilmer Cutler Pickering Hale and Dorr LLP 1
Steven Finizio and
Charlie Caher, Wilmer Cutler 2 Pre-award Interest, and the Difference Between Interest and Investment Returns –
Pickering Hale and
Gervase MacGregor & David Mitchell, BDO LLP 8
Dorr LLP
3 Effective Use of Financial Experts in Arbitration – Kathryn Britten & Greg Huitson-Little,
Sales Director
AlixPartners 11
Florjan Osmani
4 What to Know Before Going Into Arbitration – Carl Jenkins & A. Scott Davidson, Duff & Phelps 17
Account Director
5 Construction Damages in International Arbitration – Theodore E. Needham III & Mark Baker,
Oliver Smith
Secretariat International 21
Sales Support Manager
6 Arbitrating in New York: The NYIAC Advantage – James H. Carter & John V.H. Pierce,
Paul Mochalski
Wilmer Cutler Pickering Hale and Dorr LLP 27
Sub Editor
7 Independent Review of a Claim by Experts: Its Rise in Popularity and Benefits –
Oliver Chang
Anthony Theau-Laurent & Jonathan Ellis, Accuracy 31
Senior Editors
8 The Toolbox of International Arbitration Institutions: How to Make the Best of It? –
Suzie Levy, Rachel Williams
Professor Dr. Eckart Brödermann & Dr. York Zieren, Brödermann Jahn RA GmbH 35
Chief Operating Officer
Dror Levy
Asia Pacific:
Group Consulting Editor
Alan Falach 9 Overview Dr. Colin Ong Legal Services: Dr. Colin Ong, QC 40
10 Australia HFW: Nick Longley & Brian Rom 54
Publisher
Rory Smith 11 Brunei Dr. Colin Ong Legal Services: Dr. Colin Ong, QC 64
Published by 12 China Boss & Young, Attorneys-at-Law: Dr. Xu Guojian 73
Global Legal Group Ltd. 13 Hong Kong HFW: Peter Murphy & Fergus Saurin 85
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London SE1 3PL, UK 14 India Kachwaha and Partners: Sumeet Kachwaha & Dharmendra Rautray 94
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Email: [email protected]
URL: www.glgroup.co.uk 16 Japan Anderson Mori & Tomotsune: Yoshimasa Furuta & Aoi Inoue 116
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19 Overview Wilmer Cutler Pickering Hale and Dorr LLP: Franz T. Schwarz &
Ashford Colour Press Ltd
July 2017 Krystyna Khripkova 144
20 Austria Weber & Co.: Stefan Weber & Katharina Kitzberger 154
Copyright © 2017
Global Legal Group Ltd. 21 Belarus SBH Law Office: Timour Sysouev & Alexandre Khrapoutski 163
All rights reserved 22 Bulgaria Georgiev, Todorov & Co.: Georgi Georgiev & Tzvetelina Dimitrova 174
No photocopying
23 Croatia Bekina, Škurla, Durmiš and Spajić Ltd.: Hrvoje Spajić & Ivana Ostojić 184
ISBN 978-1-911367-63-5 24 Greece Gregoriou & Associates Law Firm: Stelios H. Gregoriou 192
ISSN 1741-4970
25 Romania Popovici Niţu Stoica & Asociaţii: Florian Nițu & Raluca Petrescu 200
Strategic Partners
26 Russia Freshfields Bruckhaus Deringer LLP: Noah Rubins & Alexey Yadykin 210
27 Slovenia Rojs, Peljhan, Prelesnik & partners: David Premelč & Timotej Kozar 226
28 Turkey Moroglu Arseven: Orçun Çetinkaya & Burak Baydar 236
29 Ukraine CMS Cameron McKenna: Olexander Martinenko & Andriy Stetsenko 245
Western Europe:
30 Overview DLA Piper UK LLP: Ben Sanderson & Elinor Thomas 254
31 Andorra Cases & Lacambra: Sheila Muñoz Muñoz & Miguel Cases Nabau 258
Continued Overleaf
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The International Comparative Legal Guide to: International Arbitration 2017
Western Europe, cont.:
32 Belgium Linklaters LLP: Joost Verlinden & Matthias Schelkens 268
33 England & Wales Wilmer Cutler Pickering Hale and Dorr LLP:
Charlie Caher & John McMillan 278
34 Finland Attorneys at law Ratiolex Ltd: Timo Ylikantola & Tiina Ruohonen 294
35 France Christophe Dugué – Avocat: Christophe Dugué 302
36 Germany DLA Piper UK LLP: Dr. Frank Roth & Dr. Daniel H. Sharma 311
37 Ireland Matheson: Nicola Dunleavy & Gearóid Carey 320
38 Italy Portolano Cavallo Studio Legale: Micael Montinari &
Luca Salamone 330
39 Liechtenstein König Rebholz Zechberger: MMag. Benedikt König &
Dr. Helene Rebholz 340
40 Luxembourg Loyens & Loeff Luxembourg S.à.r.l.: Véronique Hoffeld 349
41 Netherlands BRISDET: Fanny-Marie Brisdet & Bo Pietersz 357
42 Spain Andersen Tax & Legal: Iñigo Rodríguez-Sastre &
Elena Sevila Sánchez 367
43 Sweden Norburg & Scherp: Fredrik Norburg & Pontus Scherp 375
44 Switzerland Homburger: Felix Dasser & Balz Gross 382
Latin America:
45 Overview Baker McKenzie: Luis M. O’Naghten 393
46 Bolivia Salazar & Asociados: Ronald Martin-Alarcon &
Rodrigo Jimenez-Cusicanqui 406
47 Brazil Costa e Tavares Paes Advogados: Vamilson José Costa &
Antonio Tavares Paes Jr. 413
Middle East / Africa:
48 Overview – MENA Freshfields Bruckhaus Deringer LLP: Sami Tannous & Amr Omran 421
49 Overview –
Sub-Saharan Africa Baker McKenzie: Gerhard Rudolph & Michelle Wright 428
50 Kenya Njeri Kariuki Advocate: Njeri Kariuki 431
51 Nigeria PUNUKA Attorneys & Solicitors: Elizabeth Idigbe &
Emuobonuvie Majemite 438
52 Sierra Leone BMT LAW: Glenna Thompson 454
53 South Africa Baker McKenzie: Gerhard Rudolph & Michelle Wright 461
54 United Arab Emirates Freshfields Bruckhaus Deringer LLP: Sami Tannous & Amr Omran 471
55 Zambia Eric Silwamba, Jalasi and Linyama Legal Practitioners:
Joseph Alexander Jalasi, Jr. & Eric Suwilanji Silwamba, SC 484
North America:
56 Overview Paul, Weiss, Rifkind, Wharton & Garrison LLP:
H. Christopher Boehning & Priyanka Timblo 493
57 Bermuda Sedgwick Chudleigh Ltd.: Mark Chudleigh & Alex Potts 501
58 Canada Baker McKenzie: Matthew J. Latella & Christina Doria 511
59 USA Williams & Connolly LLP: John J. Buckley, Jr. & C.J. Mahoney 520
PREFACE
I am privileged to have been invited to preface the 2017 edition of The
International Comparative Legal Guide to: International Arbitration,
one of the most comprehensive comparative guides to the practice of
international arbitration available today. The Guide is in its fourteenth
edition, which is itself a testament to its value to practitioners and clients
alike. Wilmer Cutler Pickering Hale and Dorr LLP is delighted to serve as
the Guide’s Editor.
As the international business community continues to embrace international
arbitration as a means of resolving international commercial disputes, it
is critical to maintain an accurate and up-to-date guide regarding relevant
practices and legislation in a variety of jurisdictions. The 2017 edition
of this Guide accomplishes that objective by providing global businesses
leaders, in-house counsel, and international legal practitioners with ready
access to important information regarding the legislative frameworks
for international arbitration in over 44 individual states. It also surveys
national and regional practices concerning international arbitration from the
perspective of leading and experienced practitioners in these jurisdictions.
This fourteenth edition of the Guide will serve as a valuable, authoritative
source of reference material for lawyers in industry and private practice
seeking information regarding the procedural laws and practice of
international arbitration, provided by experienced practitioners from
around the world.
Gary Born
Wilmer Cutler Pickering Hale and Dorr LLP
Chair, International Arbitration Practice Group, Wilmer Cutler Pickering
Hale and Dorr LLP. Mr. Born is the author of International Commercial
Arbitration (2nd ed. 2014); International Arbitration: Law and Practice (2nd
ed. 2016); and International Arbitration and Forum Selection Agreements:
Drafting and Enforcing (5th ed. 2016).
Chapter 1
Class, Collective and
Charlie Caher
Mass Arbitrations
Wilmer Cutler Pickering Hale and Dorr LLP
Jonathan Lim
1. Arbitration proceedings involving multiple parties are becoming brought by one or more claimants on behalf of a large and possibly
increasingly common. There are several types of multiparty indeterminate number of persons who all have identical arbitration
arbitrations: (i) arbitrations involving one contract but more than agreements with the same defendant or defendants.
two parties; (ii) arbitrations involving multiple contracts with more 5. Historically, a number of U.S. courts were opposed to class
than two parties where either the contracts are related, or there is arbitration on the basis that it purportedly subverted the privity of
some relationship or affiliation between the parties; and (iii) large- the arbitration agreement; the courts took the view that only the
scale multiparty arbitrations involving a claim by one or a few parties to a particular contract or set of contracts could be parties
representatives on behalf of a class or mass of parties, who may to an arbitral proceeding.4 Class arbitration was therefore not
have no relationship or affiliation with one another other than the permissible, because the multiple claimants within a class usually
fact that their disputes arise out of a common fact pattern. had no contractual relationship at all with one another.
2. This article focuses on the last type of large-scale multiparty 6. That position changed over time, as courts in some U.S. states
arbitration, which is less frequently encountered than the other forms – most notably, California – held that class participation in certain
of multiparty arbitration. Such arbitrations have been variously arbitrations was permissible.5 These state court decisions also held
referred to as “class”, “collective” or “mass” arbitrations. As that class arbitration would offer a fairer and more efficient solution
discussed below, these terms are sometimes used interchangeably, than requiring separate causes of action to be pursued in separate
although they may carry important conceptual differences.1 Class arbitrations.
arbitration originated in the U.S., drawing mainly from class action
7. However, a number of important issues remained unresolved,
litigation as understood within in the U.S. court system. While class
including: whether an arbitral tribunal had the authority to interpret
arbitration has not been replicated elsewhere, with a few exceptions,
the arbitration agreement and authorise class arbitration; and whether
more broadly conceived notions of collective and mass arbitration
class arbitration was allowed even where the arbitration agreement
have also developed in both the U.S. and other jurisdictions across
does not expressly authorise class arbitration.6 It was also unclear
the world, in both commercial and investment treaty arbitration.
whether class arbitrations were compatible with the Federal Arbitration
3. This chapter surveys these developments and summarises the Act (the “FAA”), which was enacted in 1925, before the emergence of
current jurisprudence and commentary on class, collective and mass class action litigation, and did not address class arbitration expressly.
arbitrations. It will therefore cover:
8. In 2003, the U.S. Supreme Court considered these issues for
a. class arbitration in the U.S.;
the first time in Green Tree Financial Corp. v Bazzle.7 In Bazzle,
b. class arbitration outside of the U.S.; multiple homeowners under separate loan contracts with Green
c. collective arbitration; and Tree initiated several class actions in court, and in response Green
d. collective and mass claims in investment arbitration. Tree requested that the court compel individual arbitrations. The
lower state court certified the class and ordered arbitration before a
sole arbitrator. The arbitrator subsequently issued an award against
A. The Development of Class Arbitration in
Green Tree, who then challenged the award in the U.S. courts on the
the U.S. basis that the imposition of class arbitration was not in accordance
with the parties’ arbitration agreements, since those agreements
4. Class arbitration first developed in the U.S. It was based on class were silent on the issue.8 The South Carolina Supreme Court
action litigation suits under Rule 23 of the Federal Rules of Civil rejected Green Tree’s challenge and upheld the award, holding that
Procedure – civil suits in which one or more named plaintiffs assert “class-wide arbitration may be ordered even when the arbitration
claims on behalf of a defined class of similarly-situated persons agreement is silent, if it would serve efficiency and equity, and
against one or more defendants. Similarly, class arbitration involves would not result in prejudice”.9
one or more named claimants asserting claims in arbitration on
9. The U.S. Supreme Court did not reach a majority decision (split
behalf of a defined class of similarly-situated persons against one
4-1-3-1), and issued a fragmented set of opinions. However, a
or more defendants.2 In addition, like U.S. class actions suits,
majority of five of the nine judges accepted that an arbitrator had the
class arbitrations proceed on an opt-out basis, which means that
authority to interpret an arbitration agreement and decide whether
members of a class (a large and possibly indeterminate group of
class arbitration was permitted, even in the case where class action
persons) subject to class arbitration would be parties to the dispute,
arbitrations are not expressly authorised in the relevant arbitration
unless they take affirmative steps to opt out and pursue a separate
agreement.10
arbitration claim.3 The typical class arbitration involves claims
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Wilmer Cutler Pickering Hale and Dorr LLP Class, Collective and Mass
10. Bazzle was therefore widely interpreted as authority that both in the future. It is relatively well-settled that class arbitration will be
arbitrators and judges can order class arbitration even where an permitted where expressly authorised by an arbitration agreement.
arbitration agreement does not expressly authorise class arbitration.11 However, where an arbitration agreement does not so provide, it
This landmark decision opened the door to a substantial increase in is not clear whether class arbitration can proceed, and whether
the number of class arbitrations in the U.S.12 It also prompted two an arbitral tribunal has the authority to interpret the arbitration
U.S. arbitration institutions, the American Arbitration Association agreement, such that the U.S. courts must defer to its decision, and
(“AAA”) and JAMS, to promulgate specialised rules for class U.S. federal and state courts continue to grapple with these issues.25
arbitrations.13 Following Bazzle, over 300 class arbitrations were
initiated under the AAA Rules between 2003 and 2012 alone,
B. Class Arbitration Outside the U.S.
collectively involving billions of dollars in claims.14
11. Since 2010, however, a series of U.S. Supreme Court decisions
17. Outside the U.S., there have been very few reported instances
have appeared to limit the effect of Bazzle and cast doubt on
of U.S.-style class arbitration. One notable exception is Canada,
whether class arbitration is permitted absent express agreement in
whose courts have considered, although only obiter dicta, the
an arbitration clause.
possibility of adopting U.S.-style class arbitration in several
12. In Stolt-Nielson v AnimalFeeds,15 the U.S. Supreme Court decisions invalidating class action waivers in consumer claims, and
vacated an award which had held that class arbitration was appear open to permitting class arbitration even where the parties’
permissible even though the various arbitration agreements were agreement is silent on the issue.26 However, there have not yet
silent on class arbitration, where the parties had stipulated that been any reported instances of class arbitration in Canada. The
their arbitration agreement was “silent” as to the availability of other notable exception is Colombia, where the Colombian courts
class arbitration. It held that Bazzle had not reached a majority in the Valencia v Bancolombia case, ordered claims under similar
and therefore did not decide this issue. The Court then held that arbitration agreements to proceed by way of class arbitration,27 and
an arbitration agreement could not be interpreted as permitting upheld the subsequent class arbitration award.28
class arbitration unless it was clear that “the parties had agreed to
18. In Europe, there have been no reported judicial decisions on the
authorize class arbitration”, which could not be inferred from the
permissibility (or otherwise) of class arbitration. Many jurisdictions
fact of an agreement to arbitrate, without more.16 It also held that the
in Europe do not recognise or provide any mechanism for U.S.-style
arbitrators had exceeded their authority by considering their “own
class action procedures in their domestic litigation systems.29 For
consideration of sound policy” based on the perception of a “post-
example, English civil procedure rules permit representative actions
Bazzle consensus… that class arbitration is beneficial”, rather than
through Group Litigation Orders, but these are not like U.S.-style
interpreting the parties’ contract.17 The Court further reasoned that
class actions because they are not opt-out procedures whereby
“class-action arbitration changes the nature of arbitration to such
members of a class are presumptively treated as parties unless they
a degree” that the bare fact of the parties’ agreement to arbitrate,
specifically choose to be excluded.30
without more, could not be read as consent to class arbitration.18
19. There are a number of challenges to adopting U.S.-style class
13. As commentators have observed, Stolt-Nielson appeared to
arbitration in the European context. First, U.S.-style class arbitration
reverse Bazzle on the interpretation of silence regarding class
procedures are arguably incompatible with the requirement for
arbitration in the parties’ arbitration agreement.19 The U.S. Supreme
party consent to jurisdiction under many national arbitration laws.
Court’s reasoning that class arbitration “changes the nature of
For example, in England, Section 35(2) of the English Arbitration
arbitration” has also been heavily criticised by commentators as
Act 1996 provides that the court can only consolidate multiple
reflecting an overly narrow view of arbitration as a small-scale and
arbitrations where all the parties consent to such consolidation. This
bipartite procedure – one that is out of touch with the actual practice
consent requirement would not be satisfied by all members of a class
of arbitration, which has taken widely varying and flexible forms,
under U.S.-style class arbitration.31
and encompasses multiparty and high-stakes disputes.20
20. Second, U.S.-style class arbitrations raise potential due process
14. In 2013, the U.S. Supreme Court again considered the
concerns regarding the selection of the tribunal because most of the
permissibility of class arbitration under the FAA in Oxford Health
class members are unlikely to have any opportunity to participate in
Plans v Sutter,21 but this time refused to vacate the tribunal’s award,
the selection of the tribunal. This issue may affect the enforceability
which had found that class arbitration was permissible. This time,
of any class arbitration award.32 Commentators note that such
the Court emphasised that the award-debtor bore a significant
challenges may be difficult to overcome in European jurisdictions
burden of proof in establishing that the arbitrators had exceeded
without some form of legislative reform.33 By contrast, such
their authority under Section 10(a)(4) of the FAA, and this burden
concerns do not arise in the U.S. context, because the court retains
had not been discharged.22
a role in U.S. class arbitrations to ensure due process protection of
15. The Court distinguished Stolt-Nielson as a special case where absent class members. In addition, in the case of class arbitrations
the arbitrators were not construing the contract but attempting to under specialised class arbitration rules, such as the “AAA
make public policy.23 By contrast, in Oxford Health Plans, the Supplementary Rules for Class Arbitrations”, there are particular
tribunal had focused on the specific text of the arbitration clause provisions addressing the method of appointment of the tribunal.34
that stated “no civil action… shall be instituted before any court”

and reasoned that the parties’ intent was to vest in the arbitration
process, everything that was prohibited from the court process, C. The Development of Collective
which would therefore include class actions. Thus, the Court Arbitration
found that the tribunal’s decision permitting class arbitration was
entitled to judicial deference because the tribunal did “construe the 21. In recent times, other forms of large-scale multiparty arbitration
contract”.24 proceedings besides class arbitrations have developed, both in
16. In light of these recent decisions by the U.S. Supreme Court, the U.S. and elsewhere. One notable form of such proceedings
the current status of class arbitration in the U.S. is unclear, and it is is collective arbitration, which has been defined loosely by
uncertain how class arbitration in the U.S. will continue to develop commentators to include all types of large-scale, representational
2
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Wilmer Cutler Pickering Hale and Dorr LLP Class, Collective and Mass
or collective redress mechanisms that are not U.S.-style class 28. There has not been much discussion of the compatibility of
arbitration.35 The key difference is that collective arbitrations are other major arbitral rules – such as the HKIAC, ICC, LCIA or SIAC
not based on an opt-out procedure, whereby members of a class are Rules – with class or collective arbitration procedures. There are no
taken to automatically have participated in a class arbitration unless reported cases of class or collective arbitrations under any of these
they take affirmative steps to opt out of the action. arbitral rules, although all of them incorporate some form of joinder
22. This section discusses two types of collective arbitration. It also and/or consolidation procedure for administering multi-contract and
discusses whether collective or class arbitration would be compatible multiparty disputes.
with the joinder, consolidation and multi-contract arbitration 29. It would be very difficult, in principle, to fit class or collective
procedures that are provided for under the rules of major arbitration arbitration within these procedures, given the criteria expressed in
institutions, such as the HKIAC, ICC, LCIA or SIAC Rules. these rules. For example, the joinder mechanisms tend to require
23. The first type of collective arbitration developed in the U.S., (albeit to varying degrees and expressed in different ways) that
partly as a response to U.S. case law on class arbitrations. Under the additional party to be joined be bound by the same arbitration
U.S. law, collective arbitration is distinct from class arbitration agreement.48 This would not cover class or collective arbitrations
because it provides for opt-in rather than opt-out procedures. where multiple claims are initiated by multiple parties under distinct
Unnamed members of a defined class of potential claimants are arbitration agreements. Some rules additionally provide that joinder
therefore not parties to a dispute unless they opt to participate in is also possible where all the parties, including the additional party
the dispute. Thus, in Velex v Perrin Holder & Davenport Capital to be joined, consent to such joiner.49 Although this may be broad
Corp.,36 the U.S. District Court for the Southern District of New enough to encompass the joinder of a large number of claimants
York allowed collective arbitration of certain claims under the Fair within a class, which would resemble something akin to class
Labor Standards Act, despite a prohibition of class arbitration under or collective arbitration, it requires the express consent of the
the Financial Industry Regulatory Authority (“FINRA”) Arbitration respondent, which would be extremely difficult (if not impossible)
Rules. The court in that case reasoned that the “critically important to obtain in practice.
difference” between collective and class arbitrations is that collective 30. Likewise, the provisions for consolidation or multiple contract
arbitrations are “opt-in” procedures, and therefore only bind arbitration under these rules tend to require either that the claims
similarly situated individuals who have “affirmatively consented to be made under the same arbitration agreement, or that the claims
join the action” (for example, by adding one’s name to the action).37 be made under compatible arbitration agreements and arise out of
24. According to commentators, collective arbitration is a recent a single or related series of economic transactions.50 As discussed
phenomenon and it is unclear whether and which precedents relating above, the former criterion would not cover class or collective
to class arbitration will apply to collective arbitration.38 While some arbitrations. The latter criterion would also not encompass class or
decisions have discussed applying the Bazzle approach to collective collective arbitrations because claims on behalf of a class of multiple
arbitration,39 there are others that also discuss the non-applicability parties tend to involve separate and distinct transactions whose only
of Stolt-Nielsen to collective arbitration based on differences in link is that they involve a common fact pattern and claims against
procedures.40 the same respondent – it is highly unlikely that this will satisfy
the criteria under the rules. Some rules additionally provide that
25. The second type of collective arbitration developed at the
consolidation would be possible where all the parties agree51 – again,
initiative of the German Institution of Arbitration (the “DIS”).
while this may theoretically encompass class or collective arbitration,
Following a decision in April 2009 by the German Federal Court of
it requires the express consent of the respondent and therefore such a
Justice which held that shareholder disputes were arbitrable,41 the
provision is of little practical value to potential claimants.
DIS created a specialised set of rules, entitled the “Supplementary
Rules for Corporate Law Disputes” (“the DIS Supplementary
Rules”). These rules describe a unique form of large-scale multiparty D. Collective and Mass Claims in
arbitration that is administered by an arbitral institution for a narrow Investment Treaty Arbitration
range of disputes – i.e., those involving limited liability companies
and partnerships, but not listed companies.42 Commentators have
31. Largescale multi-party arbitration proceedings have also
described arbitration under the DIS Supplementary Rules as
featured in the context of investment treaty arbitration. The most
Europe’s first form of collective arbitration.43 There are, however,
prominent instances of such collective or mass arbitrations in
differences with U.S.-style class and collective arbitration, which
the investment treaty context can be found in the jurisdictional
have been described as “trans-substantive” because they apply
awards of Abaclat v The Argentine Republic,52 Ambiente Ufficio
regardless of the subject matter and type of dispute.44
v The Argentine Republic,53 and Giovanni Alemanni v Argentine
26. The DIS Supplementary Rules provide that they apply only Republic54 – three cases which arose out of the Argentinian
where the parties have referred to these rules in their arbitration government’s attempts to restructure its sovereign debt following
agreement within or outside the articles of incorporation, or have the 2001 financial crisis, offering to exchange existing Argentine
otherwise agreed on their application.45 debt instruments for new debt instruments at a 65% discount.
27. The DIS Supplementary Rules also provide for mechanisms to 32. In all three cases, claims were commenced by holdout Italian
define and involve “Concerned Others” who may be treated as either bondholders against Argentina under the ICSID Convention
intervenors or parties, with different rights and responsibilities.46 pursuant to the 1990 Argentina-Italy Bilateral Arbitration Treaty
Both claimants and respondents may nominate “Concerned Others”. (“BIT”).55 The tribunals in all three cases accepted jurisdiction
The joinder of a “Concerned Other” does not require the consent over and found admissible claims by very large numbers of
of the other parties – they may be joined as of right within a fixed claimants: approximately 60,000 in Abaclat; 90 in Ambiente and
time of 30 days from the statement of claim, or subsequently at the 74 in Alemanni. Both the Abaclat and Ambiente tribunals reached
discretion of the tribunal.47 In contrast, the AAA Supplementary majority decisions that were accompanied by strong dissenting
Rules and JAMS Class Action Procedures do not include such opinions, while the Alemmani tribunal’s decision was unanimous.
mechanisms or features, and all members of a class (usually
33. All three jurisdictional awards attempted to address the question
claimants) are to be treated equally.
of characterisation and terminology, using the terms “collective” and
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Wilmer Cutler Pickering Hale and Dorr LLP Class, Collective and Mass
“mass” but not attaching any particular legal significance to these from that found in a contractual agreement between specific parties
terms, choosing instead to focus on substance over form in deciding in the commercial arbitration context.70 Because such consent
jurisdiction over and admissibility of such claims. In Abaclat, the is found in an open-ended offer by a host State contained in an
majority characterised the claim as “mass proceedings”, following investment treaty, it is “inherently” directed by that State towards
a preliminary observation that there was “no uniform terminology a multitude of unspecified and potentially qualifying investors who
concerning the various kinds of proceedings involving a high meet the conditions specified in the treaty.71
number of proceedings”.56 It did not ascribe any particular legal 39. There are also recent decisions that appear to limit the
significance to the term.57 In Ambiente and Alemanni, both tribunals availability of collective or mass claims in investment arbitration.
disclaimed the usefulness of labels such as “mass”, “collective”, For example, in Guaracachi America and Rurelec v Bolivia,72 the
“aggregate” or “representative”. The Ambiente majority held that tribunal held that Bolivia did not consent to claims by multiple
these were not “technical terms with a fixed meaning, at least not claimants under two different treaties, namely the U.K.-Bolivia BIT
in the framework of the ICSID Convention”,58 and found that none and the U.S.-Bolivia BIT. The availability of collective or mass
of the terms carried any legal significance under international law.59 claims is therefore likely to be limited where multiple investors are
34. In order to determine jurisdiction, the tribunals in each of the seeking to claim against multiple different treaties. Also, in Erhas
three cases focused essentially on question of whether Argentina’s v Turkmenistan, the tribunal declined jurisdiction over a claim by
general consent to ICSID arbitration under the Argentina-Italy BIT 22 Turkish investors against Turkmenistan, on the basis that there
encompassed consent to claims by multiple investors being brought were entirely “unrelated claims” advanced by unrelated claimants
collectively against it in a single arbitral proceeding. The Alemanni in relation to different and unrelated investments.73
tribunal, as well as the Abaclat and Ambiente majorities, took the
view that there was such consent.
E. Conclusion
35. The Abaclat majority reasoned that, if the tribunal had
jurisdiction over each individual claimant, it was difficult to
40. As the disputes submitted to arbitration grow in complexity
conceive of how the tribunal could lose such jurisdiction simply
and scale, there has been an increased demand for mechanisms
because the number of claimants crosses a certain threshold.60 It also
that provide an efficient means for resolving large-scale multiparty
reasoned that the type of investment, namely bonds, was susceptible
disputes, particularly those involving a very large number of claims
to a large number of investors which would require “collective
based on a similar or substantially similar fact pattern. Courts and
relief” in order to provide “effective protection” to the investment.61
tribunals have also, in recent years, paid increased attention to
This reasoning was endorsed by the Ambiente majority, which also
providing a more efficient means of redress for such claims.
considered that the travaux preparatoires of the ICSID Convention
41. The use of such mechanisms can benefit parties, including
and the numerous examples of past ICSID cases involving multiple
claimants, among several other factors, supported this conclusion.62 through the potential savings in cost and time from a single
proceeding, and the avoidance of inconsistent and contradictory
The Alemanni tribunal reached the same result based on slightly
decisions. Nevertheless, they also raise difficult questions relating
different reasoning, choosing to focus on the fact that Article 25 of
to consent, which may also create uncertainties at the post-award
the ICSID Convention speaks of “consent in writing” and “consent”
and enforcement stage.
but does not set out a staged process by which some kinds of consent
are to be established differently from others.63 42. It is clear that the law regarding class, collective and mass
arbitrations is in a state of development. The lack of clarity and
36. The dissenting arbitrators in Abaclat and Ambiente argued that
consistency is unhelpful, and undermines the certainty that is
there was no consent, observing in both cases that ICSID practice
needed by individuals, corporations and government entities who
required an additional “secondary consent” from the Respondent
deal with transnational economic transactions, and who may have
State to the particular type of arbitration proceedings. The Abaclat
to deal with large-scale multiparty disputes that span multiple
dissent drew on U.S. jurisprudence in Stolt-Nielsen and AT&T
Mobility LLC v Concepcion,64 observing that collective or mass jurisdictions and legal systems. As class, collective and mass
arbitrations become more common, the hope is that the international
arbitrations were fundamentally different to bilateral arbitration
arbitration community and courts will develop a harmonised and
and “change[d] the nature of arbitration”, and that therefore a mere
consistent approach to the issues.
consent to ICSID arbitration under the Argentina-Italy BIT “did not
cover collective mass claim actions (regardless of the denomination)
and that a special or secondary consent is needed”.65 The Ambiente
Endnotes
dissent distinguished “mass claims proceedings” (which it stated,
tended to be “representative proceedings”) from ordinary “multi-
1. See e.g. Abaclat and others v The Argentine Republic,
party proceedings”, reasoning that the former was incompatible ICSID Case No ARB/07/5 (Decision on Jurisdiction and
with the ICSID arbitration system in light of the silence of the Admissibility, 4 August 2011), at para. 484. (“It should be
ICSID basic texts.66 It stated that, unlike “mass claims proceedings”, stressed that there is no uniform terminology concerning the
ordinary “multi-party” proceedings were not incompatible and various kinds of proceedings involving a high number of
therefore were capable of being consented to on an ad hoc basis by parties, and that various jurisdictions, courts and authors refer
respondent States.67 to different terms and meanings.”)
2. See e.g. S. I. Strong, Class, Mass, and Collective Arbitration
37. The issues regarding consent in Abaclat, Ambiente and Alemanni
in National and International Law, 2013, at para. 1.12; R.
are difficult and have been hotly debated by commentators.68 For
Kent and M. String, Availability of Class Arbitration Under
example, some commentators have observed that the Abaclat
US Law, in A. Van den Berg (ed.) Legitimacy: Myths,
majority undervalued the importance of the State’s consent in
Realities, Challenges, ICCA Congress Series No. 18, 2014,
international law, and ignored the more important question of 853, at p. 853.
whether Argentina had in fact consented to mass proceedings.69
3. See e.g. S. I. Strong, Class, Mass, and Collective Arbitration
38. However, other commentators have pointed out that the nature in National and International Law, 2013, at para. 1.13;
of consent in investment treaty arbitration is fundamentally different Keating v Superior Court, 645 P.2d 1192, 1208–1209.
4
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Wilmer Cutler Pickering Hale and Dorr LLP Class, Collective and Mass
4. See e.g. Vernon v Drexel Burnham &Co. Inc. 52 Cal.App.3d 28. See L. H. Kuck and G. A. Litt, International Class Arbitration,
706, 716. in World Class Actions: A Guide to Group and Representative
5. Keating v Superior Court, 31 Cal.3d 584; G. Born, Actions Around The Globe, 2012, 700, at pp. 720–723.
International Commercial Arbitration, at pp. 1508–1509. 29. B. Hanotiau, Complex Arbitrations, 2005, at paras. 557–613;
6. A number of decisions by U.S. federal courts (but not the U.S. G. Born, International Commercial Arbitration, 2014, pp.
Supreme Court) declined to allow class arbitration, ordering 1523–1524.
parties to pursue separate arbitrations under each arbitration 30. See e.g. I. Hunter QC and L. Flannery, Class Action and
agreement, unless the parties’ agreement clearly authorised Arbitration Procedures – United Kingdom, in P. Billiet (ed.),
class arbitration. See e.g. Gammaro v Thorp Consumer Class Arbitration in the European Union, 2013, 185, at p. 197.
Discount Co., 828 F.Supp. 673, 674 (D. Minn. 1993); Champ 31. Because it is very unlikely that such members would have
v Siegel Trading Co., 55 F.3d 269, 275 (7th Cir. 1995). provided specific consent to having their disputes heard in a
7. Bazzle v Green Tree Fin. Corp., 539 U.S. 444 (U.S. S.Ct. single class action proceeding in their arbitration agreements.
2003). See also I. Hunter QC and L. Flannery, Class Action and
8. Bazzle v Green Tree Fin. Corp., 539 U.S. 444 (U.S. S.Ct. Arbitration Procedures – United Kingdom, in P. Billiet (ed.),
2003), at p. 444. Class Arbitration in the European Union, 2013, 185, at p.
198.
9. Bazzle v Green Tree Fin. Corp., 351 S.C. 244, 266 (S.C.
2002). 32. See e.g. G. Nater-Bass, Class Action Arbitration: A New
Challenge?, ASA Bull. 671, 680-687; I. Hunter QC and L.
10. Bazzle v. Green Tree Fin. Corp., 351 S.C. 244, 266 (S.C.
Flannery, Class Action and Arbitration Procedures – United
2002), at p. 453; R. Kent and M. String, Availability of
Kingdom, in P. Billiet (ed.), Class Arbitration in the European
Class Arbitration Under US Law, in A. Van den Berg (ed.)
Union, 2013, 185, at p. 198.
Legitimacy: Myths, Realities, Challenges, ICCA Congress
Series No. 18, 2014, 853, at p. 857. 33. G. Nater-Bass, Class Action Arbitration: A New Challenge?,
ASA Bull. 671, 687–689.
11. See e.g. G. Born and C. Salas, The United States Supreme
Court and Class Arbitration: A Tragedy of Errors, 2012 21, at 34. S. I. Strong, supra note 2, at paras. 2.26–2.28.
p. 22; R. Kent and M. String, Availability of Class Arbitration 35. S. I. Strong, supra note 2, at para. 1.31.
Under US Law, in A. Van den Berg (ed.) Legitimacy: Myths, 36. Velex v. Perrin Holden & Davenport Capital Corp, 769 F.
Realities, Challenges, ICCA Congress Series No. 18, 2014, Supp. 2d 445.
853, at p. 857; S. I. Franck, supra note 2, at para. 1.22.
37. Velex, at pp. 446–447.
12. See G. Born, International Commercial Arbitration, 2014, at
38. S. I. Strong, supra note 2, at para. 1.33.
p. 1511.
39. Johnson v Long John silver’s Rests. Inc., 320 F Supp. 2d 656,
13. See e.g. S. I. Strong, Does Class Arbitration Change the
668.
Nature of Arbitration, 2012, 17 Harv. Neg. L. Rev. 201, at p.
206. 40. JetBlue Airways Corp. v Stephenson, 88 A.D.3d 567, 573–
574.
14. G. Born and C. Salas, The United States Supreme Court and
Class Arbitration: A Tragedy of Errors, 2012, 21, at pp. 30- 41. S v M, Case No. II ZR 255/08 (German Federal Court of
33. Justice, 6 April 2009).
15. Stolt-Nielson S.A. v AnimalFeeds Int’l Corp., 130 S.Ct. 1758 42. DIS Supplementary Rules, Introduction.
(2010). 43. S. I. Strong, Collective Arbitration Under the DIS Supplementary
16. Stolt-Nielson, at 1767-1776. Rules for Corporate Law Disputes, 29 ASA Bulletin 45, 2011,
at p. 64.
17. Stolt-Nielson, at 1775.
44. See S. I. Strong, supra note 2, at para. 2.151.
18. Stolt-Nielson, at 1775.
45. DIS Supplementary Rules, Section 1(1).
19. G. Born, International Commercial Arbitration, 2014, at p.
1516; S. I. Strong, supra note 2, at para. 2.5. 46. DIS Supplementary Rules, Sections 2–4.
20. G. Born and C. Salas, The United States Supreme Court and 47. See S. I. Strong, supra note 2, at para. 2.169.
Class Arbitration: A Tragedy of Errors, 2012, 21, at p. 39; 48. See e.g. HKIAC Rules, Art. 27.1; ICC Rules, Art. 6(4)(i);
S. I. Strong, Does Class Arbitration Change the Nature of SIAC Rules, Rule 7.1(a).
Arbitration, 2012, 17 Harv. Neg. L. Rev. 201, at pp. 268–269.
49. See e.g. SIAC Rules, Rule 7.1(b).
21. Oxford Health Plans LLC v Sutter, 133 S.Ct. 2064, 2069–70
50. See e.g. HKIAC Rules, Art. 28.1(b); ICC Rules, 10(b); SIAC
(U.S. S.Ct. 2013).
Rules, Rule 8.1(b).
22. Oxford Health Plans, at 2068.
51. See e.g. HKIAC Rules, Art. 28.1(a); SIAC Rules, Rule 8.1(a).
23. Oxford Health Plans, at 2070.
52. Abaclat and others v The Argentine Republic, ICSID Case
24. Oxford Health Plans, at 2070. No ARB/07/5 (Decision on Jurisdiction and Admissibility,
25. See S. I. Strong, supra note 2, at para. 1.24; G. Born, 4 August 2011), (“Abaclat Majority Opinion”); Abaclat
International Commercial Arbitration, 2014, at p. 1523. See v The Argentine Republic (Decision on Jurisdiction and
e.g. Robinson v J & K Admin. Mgmt. Servs., Inc. 2016 WL Admissibility, Dissenting Opinion, Georges Abi-Saab, 28
1077102 at 4 (5th Cir. Mar. 17, 2016). October 2011), (“Abaclat Dissenting Opinion”).
26. See e.g. Seidel v Telus Comm’ns Inc. 2011 S.C.C. 15; Dell 53. Ambiente Ufficio SPA and others v The Argentine Republic,
Coputer Corp. v Union des consommateurs, 2007 S.C.C. ICSID Case No ARB/08/9 (Decision on Jurisdiction and
34; S. I. Franck, supra note 1, at paras. 1.28, 2.11; G. Born, Admissibility, 8 February 2013), (“Ambiente Majority
International Commercial Arbitration, 2014, at pp. 1523– Opinion”); Ambiente v The Argentine Republic (Decision on
1524. Jurisdiction and Admissibility, Dissenting Opinion, Santiago
Torres Bernardez, 2 May 2013), (“Ambiente Dissenting
27. Luis Alberto Duran Valencia v Bancolombia, digest by
Opinion”).
Jaramillo for Institute for Transnational Arbitration (ITA)
(Arb. Trib. From Bogota Chamber of Comm. Apr. 24, 2003), 54. Giovanni Alemanni and others v The Argentine Republic,
available at www.kluwerarbitration.com. ICSID Case No ARB/07/8 (Decision on Jurisdiction and
5
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Wilmer Cutler Pickering Hale and Dorr LLP Class, Collective and Mass
Admissibility, 17 November 2014); Alemanni and others 65. Abaclat Dissenting Opinion, at para. 190.
v The Argentine Republic (Decision on Jurisdiction and 66. Ambiente Dissenting Opinion, at paras. 97–99.
Admissibility, Concurring Opinion, J. Christopher Thomas
67. Ambiente Dissenting Opinion, at para. 100.
QC, 17 November 2014).
68. See e.g. R. Kabra, Has Abaclat v Argentina left the ICSID
55. The claims in Ambiente and Alemanni have since been
with a “mass’ive” problem?, Arb. Int’l, 2015, 1; M. Aggarwal
discontinued, while Argentina has very recently agreed to settle
and S. Maynard, Investment Treaty Arbitration Post-Abaclat:
the claims in Abaclat. See Ambiente v The Argentine Republic
Towards a Taxonomy of “Mass” Claims, Cambridge J. Int’l
(Order of Discontinuance of the Proceeding, 28 May 2015);
& Comp. L., 2014(3), 825.
Alemmani v The Argentine Republic (Order of the Tribunal
Discontinuing the Proceeding, 14 December 2015); Press 69. M. Weiniger and M. McClure, Looking to the Future: Three
Release, Task Force Argentina Announces Final Argentina “Hot Topics” for Investment Treaty Arbitration in the Next
Settlement for Italian Bondholders, 22 April 2016, available at Ten Years, 2013, 10(4) TDM 1, 4.
http://www.tfargentina.it/download/TFA%20Comunicato%20 70. M. Aggarwal and S. Maynard, Investment Treaty Arbitration
22%20aprile%202016_eng.pdf (last accessed 20 May 2016). Post-Abaclat: Towards a Taxonomy of “Mass” Claims,
56. Abaclat Majority Opinion, at para. 480. The Abaclat Cambridge J. Int’l & Comp. L., 2014(3), 825, at p. 835.
majority also observed that the claims were a hybrid 71. M. Aggarwal and S. Maynard, Investment Treaty Arbitration
type of “collective” proceedings, with features of both Post-Abaclat: Towards a Taxonomy of “Mass” Claims,
“representative” proceedings, i.e. where a high number of Cambridge J. Int’l & Comp. L., 2014(3), 825, at p. 835.
claims are brought by a representative on behalf of a mass
72. Guaracachi America, inc. and Rurelec plc v The Plurinational
or class, and “aggregate” proceedings, i.e. where a high
State of Bolivia, PCA Case No. 2011-17 (Award, 31 January
number of claims with a similar fact pattern are aggregated
2014), at para. 334.
and managed in a single set of proceedings.
73. See Luke Eric Peterson, An Uncitral Tribunal Declines
57. Abaclat Majority Opinion, at para. 480.
Jurisdiction Over a Joint Treaty Claim Brought Against
58. Ambiente Majority Opinion, at para. 121. Turkmenistan By a Series Of Unrelated Claimants,
59. Alemanni, at para. 267. Investment Arbitration Reporter (23 June 2015), available
http://www.iareporter.com/articles/an-uncitral-tribunal-
60. Abaclat Majority Opinion, at para. 490.
declines-jurisdiction-over-a-joint-treaty-claimbrought-
61. Abaclat Majority Opinion, at para. 490. against-turkmenistan-by-a-series-of-unrelated-claimants/
62. Ambiente Majority Opinion, at paras. 129–146. (describing Erhas and Others v Turkmenistan, UNCITRAL,
63. Alemanni, at para. 269. Award (8 June 2015)).
64. See Stolt-Nielsen SA v AnimalFeeds Int’l Corp 130 S Ct 1758
(2010); AT&T Mobility LLC v Concepcion 131 S Ct 1740
(2011).
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