Mr Price, welcome to the Arbitration Workshop! Firstly, we are extremely honoured that you agreed to give us an interview and to share your perspective with our readers.
Q. Before we delve in, may we request you to kindly introduce yourself and tell us about the origins of your interest in the field of International Arbitration?
A. I am a partner in the London Litigation & Trial Department of Latham & Watkins. I am Fellow of the Chartered Institute of Arbitrators (CIArb), a Committee Member of the London Branch of the CIArb, and one of the Executive Committee Members of the Branch's Young Members Group. I am also Secretary of The City of London Law Society Arbitration Committee. I have worked in international arbitration for a little over 10 years. I started as a trainee in the arbitration group at Latham, and over the years I have advised on a number of large commercial arbitrations with a particular focus on the construction and energy sector, but I have also worked in investment treaty arbitration and English court litigation too. Last year I finally completed my COVID-delayed MSc in Construction Law from King's College London, which was a demanding but incredible experience from which I learned a huge amount. I also have a significant advisory practice dealing with UN / UK / EU sanctions and export controls, and that has been a real focus of my work this year with the invasion of Ukraine.
Q. The Law Commission of England and Wales has recently published its proposed revisions to the Arbitration Act 1996. The proposed revisions relate to matters such as the summary dismissal of unmeritorious claims, confidentiality, and jurisdictional challenges to awards, among others. What is your take on it? Are you entirely happy with the proposed reforms or is there an aspect you feel the Law Commission has not dealt with? How do the reforms in the long-term impact London as an arbitration hub?
A. The Arbitration Act 1996 is a successful piece of legislation. It modernised English arbitration law very considerably when it was introduced, and has helped make London one of the most popular seats of arbitration. But we cannot rest on our laurels, particularly in a world where other seats (Singapore springs particularly to mind) provide compelling alternatives. So after twenty five years it is right that we take stock of the Act and whether it needs to be refined. The Law Commission has done a good job in identifying areas where change might be appropriate, but it is important that, having published its consultation paper, it now reflects on the huge volume of responses that are being provided, and really considers the views of practitioners and users.
In the areas you mention, I agree with some of the Law Commission’s proposals, but not others. For example, the Law Commission proposes to include a statement in the Act making it clear that arbitrators may summarily dismiss unmeritorious claims. I believe this is helpful in clarifying that arbitrators do have this power, and in encouraging them to use it. By contrast, however, the Law Commission has decided not to address confidentiality in a reformed Act. But I believe that users might benefit from a general statement about the confidentiality and privacy of arbitrations, and the situations where those principles do not apply, as confidentiality remains an important reason for people choosing arbitration. I also do not agree with the proposal to change the process for challenging an award on the basis that the arbitrators lacked jurisdiction, from a complete re-hearing before the court to merely an appeal if the party has already fought and lost the issue of jurisdiction before the arbitrators. That puts the court in a worse position than the arbitrators in determining jurisdiction. It seems a fundamental point of principle that a party should have the right to a de novo review before the court on an issue that goes to the consent of that party to arbitrate in the first place. By contrast an appeal may be appropriate where the issue is one of the fairness of the procedure adopted to try the case, but where the arbitrators’ jurisdiction to try the case is not in doubt. It is interesting that Singapore retains the full re-hearing approach for jurisdictional challenges based on the seminal English Supreme Court case of Dallah Estate and Tourism Holding Company v The Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46.
Q. In Enka Insaat Ve Sanayi AS v OOO “Insurance Company Chubb” [2020] UKSC 38, the English Supreme Court clarified the law regarding ascertaining the governing law of an arbitration agreement in the absence of an express choice of law provision. More recently, in Kabab-Ji SAL v Kout Food Group [2021] UKSC 48, the English Supreme Court confirmed the principles set out in Enka v Chubb. What possible lessons can contracting parties take away from both cases?
A. One fundamental lesson is to include a provision in your arbitration agreement explicitly stating the law that is to apply to the arbitration agreement. Where the law governing the underlying contract is different to the law of the seat of arbitration, that is the solution to dealing with the issues raised by Enka. Interestingly, the decision in Kabab-Ji suggests that some commonly worded governing law provisions in contracts will in themselves amount to an express choice of the law governing the arbitration agreement in any event. But a separate express choice of law provision for the arbitration agreement is probably helpful.
The difficult issue that arises from Enka is the fact that where there is no express choice of law governing the arbitration agreement, but the underlying contract is governed by foreign law, that foreign law now applies to the arbitration agreement. In addition, that foreign law constitutes an agreement within the meaning of Article 4(5) of the Act to disapply the non-mandatory provisions of the Act where those provisions relate to substantive (as opposed to procedural) matters. Those matters are instead governed by the foreign law applicable to the arbitration agreement, as opposed to English law under the Act as the law of the seat. This could lead to some surprising outcomes. For example, the principle of “separability” in section 7 is a non-mandatory substantive provision. Where the foreign law of the underlying contract (and therefore the arbitration agreement) does not recognise the principle of separability, the door suddenly opens to arguments that because the underlying contract is unenforceable (eg. for illegality), the arbitration agreement falls away as well, rather than remaining viable because of the principle of separability enshrined in section 7 of the Act and the decision of the House of Lords in Fiona Trust & Holding Corp v. Privalov [2007] UKHL 40. I think most users of arbitration in England would consider that an unwelcome outcome.
The issue with separability could be repeated in relation to other non-mandatory sections of the Act that deal with substantive matters. The uncertainty caused by this development is something that is concerning and which the Law Commission should address as a priority in its review. At present this issue is considered by the Law Commission as a matter of minor importance. However, I, and many other practitioners, believe it is matter of fundamental importance.
Q. While many institutions and jurisdictions expressed remote hearings as the ‘new norm’ of conducting arbitration proceedings in the last year, it appears that the world might be returning to normalcy in terms of increased physical hearings. What are your thoughts on the same, and if you could also shed some light on the disruption that remote hearings have caused to the industry of commercial arbitration? How did your firm adapt to the work from home and remote hearing culture?
A. The world of lockdowns seems a long time ago now. I think there was a great deal of scepticism in some quarters as to whether remote hearings would be functional and / or fair. There were concerns that the technology would not be up to the task, that it would be difficult to cross-examine, and that time zones would mean hearings taking many weeks longer. But, in my experience, these issues were generally overcome, and I think an element of remote hearing will probably stay with us for the future (particularly for discrete applications and case management hearings). It is difficult to justify, for example, flying a witness halfway round the world to testify for ten minutes when they could simply join the hearing remotely. But I do think though that there is some value in having all the key participants together in the same hearing room. It focuses minds and leads to better dialogue.
Q. Having considerable experience with economic sanctions, do you have any specific observations on how sanctions may impact commercial disputes and commercial arbitration?
A. I think we are entering a world where we are likely to see the increased use of economic sanctions, and that impacts both the underlying legal relationship between parties, but also (sometimes) their ability to resolve their disputes through arbitration.
The impact of sanctions on the underlying legal relationship requires careful consideration. The questions that need to be considered include: do the sanctions apply to a transaction as a jurisdictional matter? Do the sanctions actually prevent performance of the obligation in question? What have the parties agreed about the impact of sanctions in their contract? These are difficult questions, and the answers are not intuitive. For example, with the sanctions against Russia, those sanctions can apply to transactions that are predominantly carried out in jurisdictions that do not impose sanctions, but which in part touch upon the territory of a country or organisation (such as the US, UK and EU) that does impose sanctions. You could have an Indian company dealing with a Russian company, but the US, UK or EU considers that its sanctions apply to that transaction because part of it (perhaps a payment) is performed or occurs within their territory.
You need to look at the nature of the sanctions very carefully. The restrictions they impose vary to a great extent. There is a considerable difference between dealing with an asset freeze target, where most transactions will be impossible, and dealing with the target of sectoral sanctions, where most transactions will actually be viable. Often sanctions-related disputes involve a party seeking to use the sanctions as an excuse to get out of an inconvenient relationship, and much of the time the answer is that strictly speaking the transaction can be performed. The final level of analysis is then whether there is some sort of sanctions clause (akin to a force majeure clause) that excuses performance where it has been disrupted rather than made unlawful. Interestingly though, in the case of the sanctions against Russia, anecdotal evidence suggests that some obligations are simply impossible (rather than unlawful) to perform, because many actors in the financial and business world will no longer permit payments to be made to Russia-related parties.
Arbitrating these sorts of disputes brings in an extra layer of complexity. If the seat of arbitration is in a jurisdiction that imposes sanctions, then the arbitration must be conducted in compliance with those sanctions. Arbitrators, parties and counsel may be required personally to comply with particular sanctions (ie. an arbitrator who is a US national). The sanctions may form part of the governing law of the contract in dispute, or may be considered mandatory laws that override the parties' choice of law or constitute a form of relevant public policy. There may be conflicting sanctions regimes (ie. US/UK/EU sanctions v Russian counter-sanctions) which amongst others things could lead to parallel proceedings. Each case is going to have a unique combination of these issues, and the answers will also differ depending on the stage you are at (ie. before the Tribunal, the courts of the seat, or on enforcement). I think we will see in the coming years a fascinating body of jurisprudence being built up in this area.
Q. Are there any specifics of arbitral practices that you particularly enjoy? What practices do you employ to engage and keep up with the recent trends in arbitration? Is there any particular practice you would recommend young lawyers should regularly engage in to become better in the field?
A. It is important to keep practicing the basics - good clear concise written work, compelling advocacy, and good client management. Without these basics you cannot get anywhere in arbitration. These are skills that take considerable time to master and require constant practice. You never stop improving your drafting or learning about advocacy. Any opportunity for a young lawyer to practice advocacy, including mooting, is incredibly valuable and helps build confidence.
Q. What would be your word of advice to the readers hoping to be future arbitration practitioners and academicians?
A. Spend time familiarising yourself with some of the key literature on international arbitration and get a good base of knowledge on arbitration law in the particular jurisdiction in which you are qualified, but also be aware of some of the key authorities and from other jurisdictions and tribunals. Have a good working knowledge of fundamentals like the three pillars of international arbitration: the New York Convention, the UNCITRAL Arbitration Rules and the UNCITRAL Model Law. Meeting other people in the arbitration community at seminars and conferences is also a valuable way to stay up to date in the fast-moving world of arbitration law, and it is also a lot of fun. You make some great friends whilst learning about interesting and difficult legal issues.
The Editorial Team at the Arbitration Workshop would like to thank Mr. Robert Price for taking out time from his busy schedule and for sharing his perspectives with us!
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