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Conference on Rules for Institutional Arbitration and Mediation

20 January 1995, Geneva, Switzerland

 

Commentary: The Conduct of Arbitral Proceedings under the Rules of Arbitration Institutions; The WIPO Arbitration Rules in a Comparative Perspective
(Articles 48 to 58 and 73 to 76)
by Gerald Aksen
Reid & Priest, New York


It is quite a daunting challenge to give some comments in five minutes on the Rules that we have in front of us and the presentations that have been made today. Let me say briefly that you have been privileged to hear probably some of the best and most knowledgeable speakers, at least we think so in the United States, on this problem today. The subtlety of some of their remarks made have gone unnoticed. The opening speaker praised the individuals, the human factor behind arbitration. These institutions and these Rules would be meaningless without people to administer them in a way that promotes progress. I think that point is absolutely correct.

The last speaker has spoken of the dramatic changes in the WIPO Rules that don’t exist elsewhere, ending up with the subject of confidentiality. To summarize what has happened to international arbitration is really to look at the subject of confidentiality. In the past thirty years of my life, I was always taught that a prime reason why parties use international arbitration is because it is confidential. Every American businessman was told that by his lawyer. We now have a dramatic set of Rules in WIPO which clearly indicates that somehow arbitration is not confidential, because we now need several paragraphs to protect confidentiality. However, you will look hard in those Rules to find any sanction if the confidentiality is breached.

Recently, I was privileged to serve in an ICC arbitration where the losing party, the day after the award was released, sent it to the press, in order to use the arbitration award as a method of bringing the winning party back to the settlement table because the loser was unhappy with the decision. I suggest to you that, in intellectual property disputes, you will have more of that kind of situation than you will in normal commercial contract disputes. I have never seen the kind of arguments made as those that are made in high-tech intellectual property disputes. We have had quite a few with American parties in the past few years. The most famous one involved IBM and Fujitsu. The only solution for the arbitrators was to stop the arbitration and turn it into a mediation. So that the greatest challenge to international arbitration will be found in the area of disputes concerning intellectual property.

My summary of the Rules is simple. It doesn’t matter what sort of Rules you use. At the end of the day, unless you have good arbitrators and good lawyers, the Rules don’t mean very much. I rarely read these Rules, except if a question arises in a particular case, and if those of you who practice in this field are to be kept up to date, you need to have in your library the Rules of at least twenty-five arbitral institutions (1). Many of these choices arise when you are negotiating a contract. I suggest to you, if you tell your client, if the client comes in and says to you: "we are drafting the contract today and we have to decide immediately which institution’s Rules to use in this contract," and if you, as a lawyer, gave him a summary of all of those various Rules, the client will throw you out of the room. So you will have to make the decision very quickly. And which Rules to put into your contract, I can assure you, in my experience, it makes little difference which ones you use.

Nevertheless, I commend WIPO for forcing the international community to review all of the institution’s Rules of all of the other organizations and to come up with at least a new and specialized alternative. On balance, competition is good for the ultimate users of arbitration. This is the best suggestion today, and the "gang of four" has done a splendid job. You can disagree with many of the individual comments, there were several points in here that are probably illegal in United States law, such as the truncated tribunal, things like that. But it doesn’t matter. At the end of the day, you probably won’t have that situation arise very often. I think it’s, as Dr. van den Berg said, in 80% of the cases where they have to appoint arbitrators in the Netherlands, it works very smoothly. I suggest to you, in more than 80% of the international arbitrations, most of the individual points that these Rules try to sort out will not come about.

It is impressive to me to see the number of people in this room today. If you hold a Conference like this in the United States, you get maybe fifty lawyers that attend. To have this kind of an audience shows the importance of this subject in what I consider to be the heartland of international arbitration, namely in Geneva. So I suspect that these Rules will have a significant impact on the world. It will take at least ten years to find out how many parties use these Rules and whether or not the fine work done will have the meaning that they intended. When I applaud the Rules, I applaud the people that worked on them. There are differences. And, as the French say "vive la différence." I suggest, at the end of the day, ten years from now, if we have a similar Conference, there will be problems with these Rules and there will be plaudits given to these Rules. But, nonetheless, I think that our hosts and the people who worked with them are truly to be complimented and we have probably today the most well thought-out set of Rules ever drafted, although you may disagree with individual points.


Notes

1. These include, for example, World Intellectual Property Organization (WIPO), United Nations Commission on International Trade Law (UNCITRAL), International Chamber of Commerce (ICC), International Center for Settlement of Investment Disputes (ICSID), Japan Commercial Arbitration Association (JCCA), Stockholm Chamber of Commerce (SCC), American Arbitration Association (AAA), London Court of International Arbitration (LCIA), Swiss Arbitration Association (ASA), Netherlands Arbitration Institute (NAI), Asian-African Legal Consultative Committee Cairo Regional Center (AALCC), Euro-Arab Chamber of Commerce (EACC), Inter-American Commercial Arbitration Commission (IACAC). In addition, there are the distinguished arbitral institutions in Beijing, Budapest, Geneva, Hamburg, the Hong Kong Special Administrative Region of the People’s Republic of China, Kuala Lumpur, Mexico City, Milan, Moscow, Seoul, Vancouver, Vienna, Warsaw and Zurich.

 

Commentary - Michael Schneider

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