Drawing Upon A Worldwide Network Of Arbitration Expertise

Sunday, May 1, 2005 - 01:00

Editor: Mr. Dunham, would you tell our readers something about your background and career?

Dunham: My family has lived in France for the last 40 years. I attended two boarding schools in England and then did a combined English and French law degree program at the London School of Economics and the University of Strasbourg. At the end of that program I received an LL.B from LSE and a Diplôme d'Etudes Juridique from Strasbourg. Having obtained these degrees, I worked as what is now called a trainee solicitor at Coudert's London office. I then qualified as a solicitor in 1994 and was invited to work for the firm's dispute resolution department in Paris. Since joining Coudert, I have worked almost exclusively in international commercial arbitration.

Editor: How did you come to Coudert Brothers?

Dunham: In 1988 I was a summer associate under Laurie Craig, a long-serving partner and now acting consultant at Coudert's Paris office. He is widely recognized as one of the preeminent members of the international arbitration community. I caught the arbitration bug at this time, and I went on to apply for a position at the firm's London office so as to complete the process to qualify as a solicitor there.

Editor: What are the advantages for you of arbitration over litigation?

Dunham: The clearest advantage is the comfort that arbitration provides foreign investors (and I use the term broadly) in knowing that any dispute they have will be resolved in a neutral venue. In many instances, securing the right to resolve a dispute outside of the national courts of the country in which the foreign parties are investing is a key consideration for them in committing to that investment. Another advantage is that the parties usually have some control over the selection of the arbitrator or arbitrators appointed to resolve their dispute. Generally speaking, if the dispute is significant in terms of either issues involved or amount in dispute, it will be submitted to a panel comprised of three arbitrators where each party will be in a position to nominate one arbitrator. While the arbitrator should be independent and act impartially, the fact is that if the parties exercise their choice judiciously, the nominated arbitrator should ensure that the position of the nominating party is properly considered by the arbitrators as a whole. This right also allows parties to select arbitrators with appropriate experience in the relevant issues, whether they are legal or technical.

Another advantage is the relative speed in which disputes submitted to arbitration can be resolved. The International Chamber of Commerce, the largest international arbitration institution, publishes figures on this, and the ICC indicates that that the average length of an arbitration is 18 months. While this may seem lengthy, however, the average duration of proceedings before national courts can take a similar period of time (if not more) particularly if one takes account of the appeal procedure before national courts. The grounds for appealing a court decision are to be contrasted with the more restrictive grounds upon which an arbitral award can ordinarily be set aside. I spoke at an ICC conference on arbitration developments in Latin America last year, and I was struck by the number of practitioners who welcome the advent of international arbitration in that region as a means of relieving the extraordinary caseload of the national courts. The caseload, of course, is another very significant factor in the substantial delay in reaching judgment.

In addition, it is in principle easier to enforce an arbitration award in a foreign jurisdiction than it is a national court judgment. And the ability to keep the matter confidential is at least a possibility in arbitration. In arbitration under the rules of the London Court of International Arbitration, confidentiality applies unless the parties decide otherwise, and other arbitral rules permit the parties to determine whether they wish to keep the dispute confidential. Very often they do.

Editor: Is there still a perception that if you are a foreigner in a national court you may have the deck stacked against you?

Dunham: Many parties do indeed have that perception whether rightly or wrongly. I recently acted for a major U.S. client. While the agreement provided for arbitration, the other party - which was French - had proposed during the course of the contractual negotiations to submit any future dispute to the French courts. The American party demurred on the basis of its reservations about having a fair trial. There is still an obvious reluctance on the part of foreign parties to submit their cases to national courts, and this is particularly strong where the courts in emerging countries are concerned.

Editor: Could you describe some of the recent developments in international arbitration?

Dunham: Latin America has seen a proliferation in arbitration in recent years. The statistical records of the ICC shows that since 2002 the number of Latin American arbitrations has tripled and represent some 15 percent of all arbitrations filed with the ICC. Similarly, the number of investment treaty arbitrations concerning Latin America has increased rapidly since 2000. These have been brought principally before the International Center for Settlement of Investment Disputes, which was founded pursuant to the Washington Convention concerning the settlement of disputes between national states and the nationals of other states. The claims submitted are principally based on bilateral treaties in which states extend an open-ended invitation to investors to settle investment disputes through ICSID or other arbitration rules. By the end of 2004 there were in excess of 30 pending arbitrations at the Center against Argentina alone, and that accounted for 40 percent of all arbitrations pending at the Center. Sixty percent of the cases were against Latin American and Caribbean countries. In response to this development, we have recently boosted our Latin American arbitration expertise by recruiting Professor Eduardo Silva Romero, who was formerly Deputy Secretary General of the ICC International Court of Arbitration.

There are many arbitrations arising out of the Russian Federation, particularly in the oil and gas and construction sectors. Both Russian state entities and Russian parties have for some time accepted to submit their disputes to arbitration. Our Moscow office is regularly involved in these disputes. Asia is another region - and in particular China - which is giving rise to an increasing number of arbitrations. The principal arbitration institution in China, CIETAC, is presently updating its rules to bring them into conformity with the rules of the other major international arbitration institutions. The managing partner of our Beijing office, Jingzhou Tao, recently published the first comprehensive treatise on international arbitration in China, which describes this development well.

Editor: References are often made to the "Americanization" of arbitral proceedings. What is exactly meant by this?

Dunham: It generally reflects a concern on the part of non-U.S. practitioners over the perceived adoption of certain features of American court proceedings, including entitlement to extensive discovery of documents, as well as the emphasis on hearings and the oral testimony of witnesses and experts. All of this is to be contrasted with the emphasis placed in the legal culture of civil law countries both on a limited right to discovery and on written pleadings rather than oral hearings.

I believe that international arbitration is truly meant to be an alternative means of dispute resolution. It represents a great opportunity to blend the best features of our various legal cultures, and generally there is an appropriate balance in most international arbitrations. It is useful to refer to the rules of the International Bar Association for taking evidence in international commercial arbitrations. These effectively prevent the requesting party from embarking on a fishing expedition, such as requesting documents with no reference to relevance or specificity.

One other point is that parties should beware of confusing international arbitration with litigation. One often encounters parties in arbitration who approach it from the perspective of their own legal tradition. U.S. parties regularly seek extensive discovery and are surprised when they do not get it. Indeed, some of the aggressive tactics that they bring to an arbitration - aggressive cross-examination being a prime example - often backfire with arbitrators.

Editor: Can you tell us about some of the recent cases you have handled?

Dunham: One of the fascinating aspects of international arbitration is that one can work on different industry sectors in various countries. We are often called upon to travel to a variety of places, and in my case that includes Geneva, Lisbon, Dublin, London, Stockholm, Hong Kong and Singapore. The firm handles construction and oil and gas disputes, and very often these overlap. Last week I attended hearings in Lisbon, together with Portuguese co-counsel, concerning a complex construction dispute. I am also waiting for an award in a major construction arbitration where the amount in dispute exceeds 300 million dollars and involves hidden defects in the electrical and mechanical components of a major industrial plant. The plant was purchased by a French client, and the arbitration took place in Singapore and required several hearings on the merits and on quantification of damages.

Editor: How does the arbitration practice fit into Coudert's firm-wide practice?

Dunham: We have arbitration specialists throughout our network of offices, and we have many opportunities to work together on the same matters. For instance, we recently worked together with the Los Angeles office in representing a client in an ICC arbitration. The other side was an Eastern European state entity which had misappropriated our client's assets. Currently, we are seeking to enforce the award, which involves working with a number of our offices in seeking to establish where this entity has assets that the award can be executed against. We have also been working closely with our Stockholm, Moscow and London offices in connection with a substantial ad hoc arbitration brought by a French party against a Russian state entity.

We were recently involved in a major construction arbitration - with an amount in dispute exceeding 1 billion dollars - between Latin American and North African parties. This drew upon the talents of partners from our London, New York and Washington offices, in addition to Paris. Members of our African department here in Paris also assisted with some of the legal issues, as the contract in dispute was governed by the local law of the North African party.

We are also working on two arbitrations with our Beijing office involving a Chinese party on one side and foreign investors on the other. This was submitted to the Stockholm Chamber of Commerce arbitration rules.

To the extent that Coudert Brothers has a practice that extends across the world, the international arbitration practice is indeed worldwide and draws upon the resources of the entire firm - expertise and personnel - wherever located.