10 Dec 2015

Hilary Heilbron QC gives 14th Annual International Arbitration Lecture

Three factors generate unpredictability in arbitration: diversity, discretion, and decision-making dynamics.

The increased diversity of tribunals and the greater exercise of discretion probably make predicting outcomes more difficult, but it appears that is a price parties are prepared to pay.

That was the conclusion of Hilary Heilbron QC, who gave the 14th Annual Clayton Utz / University Of Sydney International Arbitration Lecture, "Dynamics, Discretion And Diversity ‒ A Recipe For Unpredictability In International Arbitration?" to 200 members of Australia's international arbitration community at the Federal Court of Australia's NSW Registry on Wednesday 25 November. They were joined virtually by a global audience, who watched a live stream of the lecture.

The annual Clayton Utz and University of Sydney International Arbitration Lecture is designed to promote and support the development and study of international arbitration and international dispute resolution in Australia and the Asia-Pacific region.

In a stimulating lecture, Ms Heilbron drew on her wealth of experience and expertise in commercial disputes and international arbitration to identify three factors which generate unpredictability in arbitration: diversity, discretion, and decision-making dynamics.

The greater embrace of international arbitration globally has meant the historic perception of international arbitration as being a few well-known arbitrators from the West trying disputes between Western countries is no longer common; Ms Heilbron said "today we find tribunals composed of arbitrators coming from an increasingly wide trans-global, multi-ethnic and diverse gender, pool."

These arbitrators also enjoy wide powers under institutional rules. Ms Heilbron argued that "in the context of the exercise of any of these discretionary decisions and in relation to the ultimate conclusory decision on the factual and/or legal merits, the inter-play and dynamics of the members of the tribunal is therefore critical. "

This potential for uncertainty of outcomes, she suggested, will only increase.

Nonetheless, while "legal prediction will remain an art, not a science", this does not mean that improvements are impossible. Ms Heilbron argued that this potential uncertainty could be reduced, and sketched out three reform options:

  • the introduction of a more robust appellate system to provide more uniformity;
  • the provision of more reported redacted decisions by institutions; and
  • improvements in the method of appointing tribunals, and in particular the presiding arbitrator.

For the full lecture, including video, and previous years' lectures, please visit our dedicated Clayton Utz / University Of Sydney International Arbitration Lecture website.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.