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Lord Peter Goldsmith QC, a former Attorney General of the UK, is the Vice Chairperson of the Hong Kong International Arbitration Centre. In a career spanning over four decades, Lord Peter Goldsmith has managed to found the Bar of England and Wales’ Pro Bono Unit, become one of the leading barristers for commercial international arbitration, and is currently the London Co-Managing Partner and European and Asian Chair of Litigation at Debevoise & Plimpton.
In this e-mail interview, Lord Peter Goldsmith shares his views on regional arbitration, the Law Commission of India’s recent recommendations on arbitration law, and more.
Anuj Agrawal: According to the Queen Mary survey, Hong Kong is the world’s third most preferred and used seat, and the most popular seat in Asia.
Lord Peter Goldsmith: Let me start by saying something about why Hong Kong is successful as a leading venue for international disputes. I think the best way to do that is to refer to a few of the Chartered Institute of Arbitrators London Centenary Principles which I was privileged to be involved in drafting.
Principle: An independent judiciary experienced in international commercial arbitration and respectful of party autonomy
Response: The independent judiciary of Hong Kong is amongst the things that make Hong Kong proud. The Hong Kong courts have extensive experience dealing with commercial cases as well as multi-jurisdictional disputes involving cross-border transactions and/or international parties. The Court of Final Appeal, the highest level court in Hong Kong, includes distinguished foreign judges drawn from the highest courts of other common law jurisdictions. One foreign judge will sit alongside two permanent Hong Kong judges to form a truly impartial bench. The judiciary has promoted its pro-arbitration stance through case decisions, sustaining Hong Kong’s position as the preferred seat of arbitration in the Asia-Pacific Region. Any perception that Hong Kong is not ‘independent’ as it is part of China is simply misplaced.
2. Legal expertise
Principle: A legal profession experienced in international commercial arbitration and international dispute resolution, offering choice to those seeking representation in arbitration and before the national courts
Response: Currently, 53 overseas law firms, including many of the world’s leading ones, have established a presence in Hong Kong. A number of law firms from Mainland China have also established business presence in Hong Kong, linking international clients with the Chinese market.
Principle: Adherence to international treaties and agreements on the ready recognition and enforcement of foreign arbitration agreements, orders and awards made at the seat of the arbitration in other countries
Response: Hong Kong awards are enforceable in many countries in the world including India through the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the new York Convention to which Hong Kong has been a party since 1980. Further, the Hong Kong courts have well demonstrated their readiness to support arbitration and the Arbitration Ordinance gives the courts wide enforcement powers to support arbitration. At the same time the Hong Kong Courts have a hands off approach to interference with the arbitral process in line with the UNCITRAL model law.
Principe A clear right to arbitrator immunity from civil liability for matters done or omitted to be done in good faith in capacity as arbitrator
Response: Section 104 of the Arbitration Ordinance shields arbitrators from liability by providing immunity to the tribunal unless the act is proven to be done or omitted to be done dishonestly. “Dishonesty” is the term used in the legislation as opposed to “good faith” in its counterpart in the UK. Similar protection is provided to administrators and appointers under section 105 of the same Ordinance.
Anuj Agrawal: In May this year, you spoke about growing regionalism in arbitration. Do you think there is enough of a market for both, HKIAC and SIAC to exist? How do you think neighbouring IAC’s can differentiate themselves?
Lord Peter Goldsmith:: As I have said I believe that regionalism in arbitration is indeed growing. There are many pieces of evidence of this. One of the strongest areas of development has been Hong Kong (which has long had an arbitration practice and culture) and the more recent developments in neighbouring Singapore. It seems clear that there is enough work for both.
I have to boast that at the moment Hong Kong seems to have the edge judging on recent surveys of users. But the credit for that goes to the outstanding professional team in our secretariat who have been driving forward reform and the highest quality of practice.
Anuj Agrawal: During the same speech you also noted that,
“European Parliamentarians don’t even want to use the word arbitrator so toxic has it become.”
Do you see this trend being repeated in other regions as well?
Lord Peter Goldsmith: I have noted that the debates in relation to the two investment protection and investment promotion treaties the TTIP and TPP have led to a great deal of hostility against arbitration. I believe it is to be ill placed and based often on a misunderstanding of the arbitral process.
But it is impossible to ignore.
There are improvements in arbitration, particularly investment arbitration that can be made and this debate is spurring on change. One example is the UNCITRAL new rules in relation to transparency of arbitration process. That is important as the lack of transparency had been the cause both of misunderstanding and of hostility.
Anuj Agrawal: Last year, the Law Commission of India released a report recommending several changes to the country’s arbitration laws, including limiting the scope for judicial interference. Your thoughts on the need for judicial restraint in arbitration proceedings?
Lord Peter Goldsmith: I very much commend the Law Commission of India for its 246th Report which recommended significant amendments to the Arbitration and Conciliation Act, 1996 with a view to making arbitration a preferred mode for settlement of commercial disputes in India. The Report recommends steps to make arbitration more user-friendly, cost effective and expeditious.
These include introducing an institutional model of arbitration in India, balancing between judicial intervention and judicial restraint in arbitration matters, neutrality of arbitrators and providing wide interim powers to arbitrators. These are, at a global level, the most significant issues that any practitioner of arbitration is concerned about in any arbitral regime.
On the specific issue of judicial intervention, I believe it is important that there is a right balance struck with judicial restraint.
The Report attempts to do exactly this by recommending measures such as:
It is to be commended that the President of India has recently promulgated the Arbitration and Conciliation (Amendment) Ordinance, 2015 which amends the Act, largely taking into account the recommendations of the Law Commission.
This (and its eventual adoption by the Parliament) is a positive step towards ushering in much needed and awaited arbitral reforms in India. The government and the Law Commission are to be commended for their efforts on this front.