18 June 2008
Key Points:
"Anyone trading internationally is crazy if they don't allow for the possibility of a dispute emerging and the outcome of that dispute."
Doug Jones should know. As a major projects lawyer, Doug learnt early on the benefits of international arbitration.
"My interest in international arbitration came out of the projects work I was doing. International projects are high-value, high-risk and long-term contracts, and the resolution of issues between parties to those contracts occurs on almost every project.'
"International arbitration serves international project work - as it serves a range of other international commercial activities - by providing an independent, enforceable regime in which parties can, if they can't sort out their own problems, have compulsory determination of disputes which arise between them."
While litigation has its place, says Doug, there are problems with it once you go offshore.
"Court judgments of domestic courts are very difficult to enforce outside their own jurisdictions because there are few overarching international conventions allowing them to be enforced, unlike international arbitration."
"International arbitration also has a guarantee of some level of independence from the countries of the two parties - you'll almost always have a hearing in a neutral forum, with a neutral tribunal deciding the dispute."
There are other advantages, he says, beyond enforcement, including time and cost, but the major one is the possibility of maintaining a commercial relationship.
"Broadly speaking, it tends to remove a lot of the common law adversarial advocacy of prolonged cross-examination and complete reliance on the hearing. Parties are left with their honour and there are a lot fewer bruised egos at the end. The underlying objective is to preserve relationships, and parties move on and do business."
"A significant challenge is to keep is international arbitration commercially relevant. This challenge has been met to a degree by the influence of civil lawyers, but discovery is becoming significant as a cost issue, and now electronic discovery, as is the influence from the American system of depositions."
"There is also the need to embrace and effectively provide mechanisms to enable Islamic law issues to be dealt with. That's being approached by a number of Islamic law jurisdictions adopting a Western model but there remains a real issue of integrating these principles procedurally into arbitration. For example, under some shariah law concepts arbitration is meant to be consensual until the very end and therefore you can walk away half-way through."
So the attraction for clients is clear. What keeps Doug coming back to it?
"With international arbitration, you are taken outside one's comfort zone, using unfamiliar procedures and laws quite different to those you are used to, which is one of the most interesting intellectual challenges for lawyers. The work I do both as an advocate and as an arbitrator represents a really exciting area of my activity."
Apart from the mental stimulation and challenge coming from the exposure to different systems, Doug enjoys the collegiality.
"There is a community of international arbitrators, and one of the exciting things is that it's getting a lot younger, with a lot of young lawyers really keen to be part of the process and contribute significantly to it."
