Current Trends In International Arbitration And Dispute Resolution

Thursday, 14th May 2015

The sharp growth in cross-border economic activity continues to dominate trends in international arbitration. Principally, the increase of multi-jurisdictional transactions has triggered an increase in the number of disputes. The greater participation of developing economies in transactions has also led to disputes being managed away from the longer-established international arbitration centres like London to centres in the Middle East and Far East. In particular, the Singapore International Arbitration Centre (SIAC) has witnessed an increase in its filings.

However, it is important to recognise that the emergence of additional centres has triggered competition between the new centres to attract parties to their venues. While historically it was customary practice for centres to keep the awards of claims confidential, they are now sometimes being used to incentivise parties to choose a specific centre based on the size of the likely award. In spite of this, statistics indicate that the growth of filings remains distributed across multiple venues with no one centre emerging as a clear preference over the others. Needless to say, London remains a global leader as a forum for international dispute resolution.

Potential effects of the UK’s general election

The recent general election may perhaps impact the future of dispute resolution and the strength of international arbitration within the UK.  In the previous Coalition, the majority party in the Coalition government, the Conservatives maintained a generally ‘pro-business’ approach. However, future policy is not yet certain.

Regarding this issue, Conservative Peer, Lord Hodgson recently raised a potential cause for concern in the pending Consumer Rights Bill, which is currently under scrutiny. Clause 80 relates to private actions in Competition Law. If this clause is approved, business may be increasingly vulnerable to litigation.

Lord Hodgson emphasised the need to promote Alternative Dispute Resolution in order to provide a cost-effective redress for consumers and simultaneously support the overriding objective of the judicial system to deal with claims in a just and proportionate manner.

What might the future hold?

In 2014, the promulgation of the use of arbitration and more cost-effective forms of dispute resolution was evident both at an international and domestic level. Meanwhile, the drive to cut costs within the ADR sphere was reflected in ever more innovative proposals.

At a domestic level for example, the advisory group for online dispute resolution (ODR), established by the Civil Justice Committee, published a report on the merits of online dispute resolution for low value civil claims in February. The proposals actively encourage the idea of using online methods to bring efficiencies to dispute resolution and remove them from the formality of the judicial system. It even cited eBay as an example which sees around 60 million trader disputes resolved through its ODR system each year.

These proposals are at the opposite end of the spectrum from international arbitration claims between large corporate organisations but they may offer an insight into the general direction in which the justice system and the wider dispute resolution environment may be headed.

Expectations for the future

The future of arbitration is somewhat unpredictable as it is to some extent dictated by the political and economic cycle.  In 2015, there will likely be a greater shift within the EU towards alternative dispute resolution (ADR), as EU member states have until 9 July 2015 to implement Directive 2013/11/EU which proposes the use of ADR in consumer and trade disputes.

Furthermore, the UK government continues to strive towards collective actions regimes for consumers and business alike alongside modifications to private enforcement of competition law.  Finally, individuals and businesses may need to familiarise themselves with new measures which facilitate filing claims electronically and solving disputes online which are due to be implemented at the close of 2015.

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