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November 23-25 ,2018
The London Court of International Arbitration
Conference Schedule
Events and Conferences run by CIArb across the globe.
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Beirut's Professional Center for Mediation (CPM)
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Founded by Johanna Hawari-Bourjeily, a criminal lawyer by training and a mediation graduate from Ifomene, the CPM makes the rebuilding of human bridges its motto
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The introduction of training in professional mediation was a challenge in a cultural environment where negotiation and mediation, often confused, are considered innate.
As the first mediation center in Lebanon and in the region, the non-profit CPM defines itself as a social project to "promote peace, peacekeeping tools and the culture of non-violence through what we know. make".
With the citizen's empowerment as the guiding principle ("giving people the freedom to choose between violence and non-violence"), its development revolves around three missions:
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- the mediation training of professional mediators (500 to date), but also student mediators and student mediators, the insertion since 2014 of optional mediation and CNV at USJ, plus the objective to make these subjects compulsory in the school;
- he mediation of conflicts and disputes: nearly 60% of the work done at the center is voluntary and allows to offer this service to the poor;
- the project incubator: the projects supported by partners (the Agence universitaire de la francophonie, UNESCO, the UNDP, to name just a few) are, by their diversity, the breeding ground that will allow to "create this common language that transcends everything, both cultural and professional differences ". With this in mind, the center has implemented projects in the political, legal, religious, intercommunity, intercultural and many others. The most important of these projects is undoubtedly the schools, which currently includes 23 public and private schools in which trainee and mediator trainees are trained and followed, as well as teachers and parents of pupils.
The professional mediation center also participates in international negotiation and mediation competitions. In 2015, the CPM team won the international negotiation competition organized in Vienna and, in 2018, the CPM came in second place in the international mediation competition organized by the ICC in Paris.
The evolution over the eleven years of existence of the CPM is notable and demands for training, awareness and mediation are constantly increasing. The branch of Tripoli in Northern Lebanon began operations in 2011. A branch is expected to open soon in the South and also in Dubai, proof, if any, of the need for peaceful human relations in this region of the world.
It goes without saying that the substantive work undertaken since the establishment of the CPM has largely contributed to the development of mediation in Lebanon and if, to quote Camus, "peace is the only fight that is worth fighting", then let's all go up to the front!
Nada Khair
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Data Privacy in International Arbitration
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October 2018
The GDPR has cast an international spotlight on data protection due to its wide territorial scope of application and high penalties. Since arbitration proceedings will inevitably handle personal data and the legal issues arising in connection therewith are manifold, it appears wise to tackle data-protection concerns as early as possible.
Data protection in the EU has tightened
The General Data Protection Regulation (GDPR) came into effect on 25 May 2018. Four months into its application, it is apparent that the new data protection regime in the EU imposes a range of unchartered obligations on companies processing personal data and provides rights to those individuals whose data is processed. Any violation thereof can be fined by up to four per cent of a company's annual global turnover or €20 million, whichever is higher, and can affect any company offering goods or services in the EU, irrespective of its establishment.
The vast reach of the GDPR is rooted in the definitions of processing personal data. Protected "personal data" includes simple information such as a work email address, telephone number or an IP address - anything through which a person can be identified. "Processing" is equally broad, encompassing any operation of personal data such as the organisation, use or erasure of information. The GDPR in general prohibits any processing of personal data or transferring data to non EU-countries absent a valid justification, establishing a "privacy-by-default" regime.
The GDPR provides for several exemptions, which include inter alia, the explicit consent by the data subject, the necessity to process personal data for the performance of a contract, or to comply with a legal obligation, or for the purpose of a legitimate interest. In practice, consent comes with the downside that it can be withdrawn at any time and contains a right of the data subject to transmit the collected data to any other company. Processing personal data for the performance of a contract, to comply with a legal obligation or for the purpose of a legitimate interest is more relevant in the context of arbitration, but requires a careful balance of the data subject's interests. The transfer of data across EU borders, a frequent phenomenon in international arbitration, is also allowed where it is necessary for the establishment, exercise or defence of a legal claim.
Complimentary to the obligations imposed on companies, data subjects enjoy wide-ranging rights such as requesting access to the personal data, access to information concerning, inter alia, the purpose of the processing and to whom the information has been disclosed, as well as the right to erasure. All provisions are flanked by the GDPR's underlining principles set out in Article 5, including the principle of purpose limitation and data minimization.
Implications for international arbitration
Processing of personal data in arbitral proceedings
The general prohibitions on processing and transporting personal data will inevitably affect arbitration proceedings at all stages. Even an internal review of old correspondence and documents at the outset of a dispute in preparation thereof can constitute processing personal data, the purpose of which will have to be compatible with the purpose the data was originally collected for or be covered by consent. Employees may have to be informed that their data may later be processed and transferred in arbitral proceedings. Engaging external counsel as well as correspondence with the tribunal will require a transfer of personal data possibly across EU borders. It might therefore be wise to raise data protection issues in a data-protection protocol early in the proceedings, not least to present a concept for data-protection to regulatory authorities. It could identify what data will be relevant, if there will be a transfer outside the EU and set out measures to ensure that data processing is kept to a minimal and only concerning truly relevant data.
Evidence
Obligations imposed by the GDPR might also clash with a document production order by the tribunal, as the documents will contain personal data. Although at a first glance this seems covered by the exemption "compliance with a legal obligation", a document of an EU-advisory body on data protection1 clarifies that the exemption only covers legal obligations created by Member State law, not ones created by an arbitral tribunal order. Relevant is, however, an exemption under "legitimate interest". This will require a careful weighing of interests in the individual case, considering what type of data is being processed (if it is especially sensitive), their volume and possible measures like blackening the relevant documents. The principle of necessity and proportionality will also require carefully limiting document production to the extent necessary.
Expert witnesses
Another area when data protection issues can arise is dealing with expert witnesses. Although it is easy to ask for consent before involving them, consent carries the risk of a later withdrawal. Here though, the processing can fall under the exemption of "necessary for the performance of a contract to which the data subject is party", as the personal data (e.g., the name, profession) are relevant for the meaning of the expert statement in the arbitral process.
Transfer to non-EU countries
The transfer of data into non-EU countries requires either that the European Commission has deemed the destination country able to ensure a sufficient (or an acceptable) level of protection or that the transfer falls under the exemption of "necessary for the defence of a legal claim". The standard for necessity is high though; adequate steps are required to ensure that only relevant documents are transferred.
All of the above require strategic planning from the outset of a dispute, including for the internal investigation preceding an internal case analysis, litigation holds, the selection of arbitral institutions, the instruction of external counsel, the nomination of arbitrators etc. Companies are well advised to review their internal dispute-related processes in due time and to plan dispute-specific data protection strategies at the outset of a dispute.
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Global Pound Conference Series
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Launched in Singapore and finishing in London, the GPC Series convenes all stakeholders in dispute resolution -commercial parties, lawyers, academics, judges, arbitrators, mediators, policy makers, and others - at conferences around the world.
The local voting results, chats and comments are available, please
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At a recent excellent conference hosted by Professor Ulla Glaesser at Viadrina University in Frankfurt (Oder), one of the workshop sessions focussed on the extent to which mediators can or should disclose or express their views when engaged in politically-related mediation work - or more generally.
What a fascinating conversation we had. It was no mere academic exercise either. We had a representative from Ukraine who described the really difficult situations in which mediators could find themselves in that country. Are mediators agents of change or providers of a "service", we asked ourselves?
In his thought-provoking new book,
Politics, Dialogue and the Evolution of Democracy the legendary Ken Cloke reflects on an exchange between two distinguished American authors, Lawrence Susskind and Bernie Mayer. I quote the passages from Ken's book in full:
"In a recent issue of ACResolution, magazine of the Association for Conflict Resolution, two opposing positions on escalating political conflicts in the U.S. were taken by highly experienced, deeply intelligent leaders in the field of conflict resolution. The first was by Lawrence Susskind, founder of the Consensus Building Institute at MIT and a professor in the Program on Negotiation at Harvard Law School, writing:
Neutrality is central to the value we add as ADR professionals. Our neutrality allows us to earn the trust of all sides in a dispute... My contention is that many ADR professionals are so upset by what is happening in the Age of Trump that they are ready to risk their neutrality. While I understand their motives, I am convinced this would be a disaster for the profession... If you sign a petition, march peacefully, write op-eds, or lobby for your point of view, there is no way anyone who disagrees with the positions you have taken will accept you as a dispute resolution professional they can trust. I promise you that whatever actions we take in our personal lives will be noted.
A second, contrasting view was authored by Bernie Mayer, a professor at Creighton University and writer of several brilliant, profound and far-reaching books on conflict resolution:
We are, sadly, experiencing the rise of open and unconstrained racism, misogyny, anti-Semitism, and homophobic behavior in our public lives, abetted and even provoked by our President and his associates. Are we obligated to remain silent about this in order to maintain our status as credible neutrals? On the contrary, I think one of the great contributions we can make as conflict interveners is to call out unacceptable behavior, which is making it increasingly difficult for us to talk across our differences or to deal with the most important challenges we face as a society. We need to find constructive and effective ways to confront unacceptable behavior both in our capacity as conflict professionals and as citizens of our world. But we must do this in a way that recognizes that people can change, that interactions make a difference, that people who behave in an abusive manner still have genuine concerns that ought to be addressed, and that we ourselves are fallible.
There is something accurate in both of these statements, yet there is also something I find missing. It should not, I think, be necessary to surrender one's political ideas, beliefs, values, ethics and morality in order to mediate or facilitate dialogues between people with opposing views. Being "neutral" in these conversations should not mean surrendering the freedom to think or have an opinion on important political issues. Otherwise, we capitulate to bullying, blackmail and intimidation, and end up, in the incisive critique of anthropologist Laura Nader, "trading justice for harmony."
On the other hand, "calling out unacceptable behavior" and engaging in polarizing confrontations, while useful in pressuring politicians and calling attention to social injustices, can quickly devolve into pointless name-calling, excessive personalization of political differences, distraction from problem solving, cyclical backlash and over-simplification of complex issues.
What is missing in this discussion is the deeper mediative truth that lies beneath both these statements: that it is possible for us to be open and unbiased without being neutral on issues that matter; i.e., to transcend both bias and neutrality, and work to transform conflict generating behaviors without slipping into unnecessarily apathetic or adversarial thinking."
What a lot of food for thought. Speaking personally, I write regularly for newspapers and other media outlets, offering views on political matters, mostly commenting on process and relationships rather than on the substantive issues. However, in this, I am necessarily drawn into commenting on the behaviour and attitudes of politicians and others. I believe it to be my duty to speak out about these matters. Indeed, as I write this, I have an
article in the Scottish edition of today's UK Times, reflecting on my learning in Frankfurt about the impact of Brexit in Europe.
I lead a not for profit organisation called
Collaborative Scotland which, by definition, promotes a certain way of discussing difficult constitutional questions, especially if framed as "What kind of country do we wish to be?". This is, I suppose, a political question. I have promoted a
Universal Declaration of Interdependence which may seem to sit uneasily with those who support independence in my country. And yet I argue strongly that there is no inconsistency. It is about how we do things rather than the substantive outcome. But what if I (secretly or even unconsciously) believe that this approach might help to achieve a particular outcome?
And what if a mediator is asked to facilitate negotiations, the very outcome of which will inevitably offend his or her political (or other) beliefs? Take the case of our colleague who has been asked to mediate on the question of where and how many wind turbines should be installed in a particular place, but who believes that no more wind turbines should be installed as we need to reduce energy consumption dramatically. Or the mediator with a gay son who believes that Jesus loves everyone unconditionally and that same-sex marriage should be accepted by the church, and who is invited to mediate between a group of church members who feel passionately that the Bible teaches otherwise and a group which takes a more permissive view.
These may be important questions for us in coming years. And even now, many of us will have wrestled with these sorts of issues in our work.
Interestingly, for me, the only (apparent) consequence of my own activities seems to be that I was judged to have my "own agenda" when advising a Committee of the UK Parliament. That agenda was perceived to be the promotion of a new way to encourage dialogue and openness in politics. My appointment was not renewed. I accept the charge against me and the consequences that flow from it. However, I have lost a role where I could with more discretion perhaps have achieved more influence.
A question arose in our conference session which I had not fully considered before: does mediation sit within or outside "the system"? This may beg the question about what we mean by "the system". What if we mean the litigation system? Or the justice system? Or the western democratic system? At what point can we no longer answer the question with a yes or no? At what point is mediation inescapably part of the system?
Would those promoting an authoritarian, hierarchical, directive culture wish to engage in a process which tolerates, encourages, and even requires open-minded engagement and dialogue, with respect for all points of view? Should mediators engage with such authoritarian thinking at all? What if the very engagement might change people's approach? What if participation in mediation itself can never be "neutral" in its effects? What if mediation is, for some at least, destabilising? What if the authoritarians discover that mediation can be a Trojan horse for a liberal, consensual approach?
A final thought: Mediation itself may actually be an agent of change whether we like it or not and whether or not we hold ourselves out as merely impartial facilitators of a process. If that is so, should we make it compulsory?
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Quote for the Day
Image Courtesy of Brad Heckman
See other images from Brad Heckman |
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Privy Council rules that assets of State-owned entities not immune from enforcement
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Botas Petroleum Pipeline Corporation v Tepe Insaat Sanayii AS [2018] UKPC 31
The Privy Council has issued a
judgment with important implications for companies that do business with States and state-owned entities. The Privy Council held that State immunity does not extend to the property of state-owned entities (SOEs). Such property is not to be considered "property of a State" that is immune from enforcement.
The case concerned a dispute between Tepe, a construction company based in Turkey, and crude oil transportation company Botas, with which Tepe had entered into two contracts for the construction of the Baku-Tbilisi-Ceyhan (BTC) crude oil pipeline. Disputes arose when Botas, a SOE of Turkey, terminated those contracts.
Those disputes were referred to separate arbitral proceedings seated in Paris under the rules of the International Chamber of Commerce (ICC), as provided for in the contracts. Both arbitral tribunals found that Botas' contractual terminations were unlawful and issued a number of awards in favour of Tepe worth approximately $96 million. Botas unsuccessfully appealed some of the arbitration awards to the French courts, and failed to make any payments under any of the awards even after exhausting all avenues of appeal.
Botas has two Jersey subsidiary companies, Turkish Petroleum International Company Ltd (TPIC) and Botas International Ltd (BIL). Tepe had Botas' shares in each of these companies was arrested (initially on an interim basis) in order to satisfy the awards. Botas objected on the grounds that Turkey has an interest in and/or control over the shares sufficient to engage State immunity.
In 2016, Jersey's Royal Court held that a SOE cannot assert immunity over assets it owns, and such assets can be thus be used to satisfy an arbitral award. This was upheld by the
Court of Appeal of Jersey. Botas then obtained leave to appeal from the Privy Council.
Botas maintained before the Privy Council first that the Jersey shares were the "property" of the Turkey because, although not legally or beneficially owned by Turkey, the shares were not used or intended for use for commercial purposes, and therefore were used for sovereign purposes and immune from execution. Botas also argued that the extent of the control exercised by Turkey over the shares meant that they were, for the purposes of the UK State Immunity Act (SIA) (extended to Jersey by the State Immunity (Jersey) Order, 1985), to be treated as the property of the Turkish State.
The Privy Council rejected both arguments. First, it held that, if it were to ascertain whether assets were the property of a State by reference to the underlying purpose for which they were held, that would "tend to undermine the evident purpose behind the establishment of separate entities by states". The distinction between an SOE and its assets on the one hand, and the State on the other, is a vital aspect of the SOE's ability to conduct business.
To determine entitlement to state immunity by reference to whether assets were being used for commercial or sovereign purposes, without first considering whether the assets belonged to the SOE or the State, "would effectively eliminate any difference between assets held by the state and by a separate entity".
The Privy Council rejected the second argument that the concept of "property of the State" should be wide enough to encompass situations where the State has no proprietary interest, but has possession or exercises some sort of control over the assets. The Privy Council confirmed that the nature of "ownership" of property under the relevant provision of the SIA must be of a quality against which a judgment creditor's rights can be enforced. As it would not be possible to enforce against a State's ability to control assets, this cannot be used to define whether or not an asset is the "property of the state". The Privy Council rejected Botas' reliance on the United Nations Convention on the Jurisdictional Immunities of States and their Property (and academic commentary) to claim that the notion of "property of a State" encompasses possession or control. Instead, the Privy Council endorsed a more limited reading of "property of State" in section 13(2)(b) of the SIA as "legally ascertainable interests in the relevant asset". The Privy Council emphasised that the question of what constitutes "property" is a question for the jurisdiction in which enforcement has been sought. It rejected Botas' argument that an autonomous international concept of "property" should be defined and applied.
The judgment endorses and protects the commercial advantages that are enjoyed by the State and SOEs due to their separate status.
 Click Link to read full article on Lexology
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Updating the WTO Dispute Settlement Mechanism is Critical for Canadian Business
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The World Trade Organization (WTO) dispute settlement system has been a remarkably good tool for resolving disputes, but it is not perfect and like any mechanism that has been in use for some time, it needs updating. The last 23 years have shown that a well-functioning WTO dispute settlement mechanism is critically important to Canadian business.
On October 24-25, 2018, Canadian International Trade Diversification Minister Jim Carr hosted a meeting in Ottawa of 13 trade ministers from around the globe to discuss strengthening and modernizing the WTO. Trade experts applauded the initiative, and the WTO Director-General praised Canada for its leadership. Updating the WTO is vitally important for Canadian business because Canada is a trade-dependent country and the rules-based system of the WTO has served Canadian business very well.
Canada has of course entered into many free trade agreements with its trading partners, but the dispute settlement mechanisms under those agreements have not been effective to protect Canadian trade interests. The state-to-state dispute settlement chapter under NAFTA is flawed because a defending party can block composition of an adjudicative panel, holding up resolution of the case. Unfortunately, the USMCA, should it come into effect, would not remedy this defect. Dispute settlement mechanisms in other free trade agreements also have flaws and therefore have not been used for a variety of reasons. Only the WTO dispute settlement system has proven to be an effective dispute resolution tool for Canada.
 Canadian business, through the Canadian government, has actively utilized the WTO dispute settlement process. Of the WTO's 164 members, Canada stands third in terms of number of disputes brought to the WTO for resolution, behind only the United States and the European Union, the economies of which are much larger. So far, Canada has brought 39 cases to the WTO for resolution, covering a wide variety of products and challenging measures taken by many countries. For example, Canada has brought challenges to protect exports of Canadian lumber, automobile parts, beef, salmon, scallops, seal products, canola and other agricultural products. It has challenged subsidies provided to foreign aircraft industries, discriminatory labelling requirements on Canadian pork and beef, discriminatory taxes applied to Canadian alcoholic beverages, and illegal trade remedy duties applied to Canadian cellulose pulp and coated paper. Canada is currently pursuing challenges against the United States' invocation of tariffs imposed under section 232 of the U.S. Trade Expansion Act against imports of steel and aluminum. Canada's challenges have covered measures taken by Australia, Brazil, China, the European Union, Japan, Korea, and the United States.
Canada's record of success with these challenges has been remarkably good. Although Canada has not succeeded on every claim, it has achieved at least a measure of success in most of its challenges. (The only case where Canada entirely failed was a challenge to the European Union ban on asbestos-containing products.) To be sure, Canada has faced WTO challenges of its own measures, but they have been fewer in number. Canada has been the respondent in 23 cases so far, but not all have proceeded to the adversarial phase. Of those that have, Canada lost cases pertaining to dairy exports, U.S.-produced magazines, imported grain, patent protection, aircraft subsidies, the Auto Pact, steel pipe, and renewable energy.
The WTO dispute settlement mechanism was established in 1995 and for most of the last 23 years had been widely praised as an effective and reliable means of resolving trade disputes between and among WTO members. Both developed and developing countries turned to WTO panels and the Appellate Body to resolve significant trade issues, many of which involved considerable economic consequences. To date, WTO members have filed 570 disputes, a remarkable number when compared with only 148 filed with the International Court of Justice since its creation in 1946, and the three state-to-state disputes filed under the NAFTA since 1994. And members continue to file disputes with the WTO (35 new cases so far in 2018).
However, over the last few years, the WTO dispute resolution system has had difficulty keeping up with demand, not only in terms of overall numbers of disputes, but also in terms of the sheer size (legally and factually) of the individual disputes. The relative efficiency of the WTO dispute settlement mechanism has become a thing of the past. In addition, some members have become increasingly dissatisfied with certain flaws in the system that have come to light over the years, such as the rules related to retaliation, transparency, and the inability of the Appellate Body to return a case to a panel for additional consideration (referred to as remand). The United States has been especially critical of the Appellate Body for what it considers over-reaching in its decisions and operating without regard to the rules of procedure. This dissatisfaction has led the United States to block appointments to the Appellate Body, bringing the entire dispute settlement mechanism perilously close to a halt.
In a joint communiqué issued at the close of the Ottawa meeting, WTO ministers stressed the "indispensable role that the WTO plays in facilitating and safeguarding trade" and undertook to "advance ideas to safeguard and strengthen the dispute settlement system." (Joint Communiqué of the Ottawa Ministerial on WTO Reform,
[email protected]).
Given this common resolve, Canadian corporations and business councils can and should continue to rely on the WTO system to facilitate and safeguard their trading interests. Corporate Canada can also usefully contribute ideas on how the WTO dispute settlement system could be reformed so that it can continue to function and support Canadian business interests.
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In an effort to recognize the specialization in the ADR community, we are creating 3 separate newsletters broadly covering these areas: Mediation - Arbitration - International ADR.
A newsletter focused in one of those areas will be sent out bi-monthly. In order for you to subscribe to as many types of newsletters that fit your particular practice/interests, please click on the Update Profile/Email Address link at the bottom of this email. From there you will be able to select which newsletters you wish to receive or if you would like to opt out all together.
Thank you for reading my newsletter, and as always, if you have any questions on any of the articles listed, do not hesitate to contact me.
Sincerely,
Thomas Valenti
Thomas P. Valenti, P.C.
350 W. Hubbard St., Suite 630
Chicago, IL 60654-3406
T: 312-803-0472
F: 888-667-2485
© April 2017 Thomas P. Valenti
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