JAMS - The International Resolution Experts

Wednesday, August 1, 2007 - 01:00

Editor: Please tell our readers about your professional background and experience.

Davidson: I am now a full-time mediator and arbitrator. Prior to joining JAMS, I was a partner at Baker & McKenzie where I was co-chair of the litigation group. I retired in 2003 after 30 years practicing international arbitration and litigation at the firm. Our office was particularly active in that practice. In the 1980s, for example, we represented more claimants at the Iran-U.S. Claims Tribunal than any other law firm. As a full-time neutral, I have now mediated some 70 disputes, many of them international, and have acted as an arbitrator in over 90 arbitration proceedings. In addition, I have administrative responsibilities monitoring the arbitration practice at JAMS, and I lead JAMS' international efforts together with Jay Welsh, JAMS' General Counsel.

Editor: Can you tell us about the experience of JAMS neutrals in international arbitration and its ability to provide skilled arbitrators for these proceedings?

Davidson: JAMS neutrals currently sit as arbitrators in numerous international arbitrations. I am personally acting in ten cases as we speak. It is important for people to realize that individuals affiliated with JAMS are able to serve - and often do serve - as neutrals in proceedings administered by other provider organizations such as the AAA, the ICDR, the ICC, CPR and the like. Several of our people are Fellows of the Chartered Institute in London. Litigators who appoint international arbitrators are sometimes unaware that JAMS neutrals can sit on any arbitration, even one not administered directly by JAMS. Additionally, aside from having individuals with substantial international arbitration experience here at JAMS, we also have access to the world's most prominent international arbitrators through our various alliances and professional contacts.

Editor: With which international organizations does JAMS work?

Davidson: We have international alliances with several provider organizations. We recently formed an alliance with the Hong Kong International Arbitration Centre ("the HKIAC"). We also have an alliance for international mediation through the MEDAL alliance in Europe. MEDAL is an alliance of the key mediation provider organizations including CEDR in the UK, CMAP in France, ACB Mediation in Holland and ADR Centre in Italy.

Editor: Does JAMS provide training on international arbitration issues?

Davidson: Yes. We do that in several ways. Our website and publications serve to educate people about our International Arbitration and International Mediation Rules. Our neutrals are also frequently called upon to speak at major conferences. For instance, I recently moderated a panel on the problem of excessive time and cost in international arbitration at the ABA International Law Section meeting in Washington, and recently conducted a CLE on international arbitration for the legal department of Columbia University. Our neutrals also train mediators for other provider organizations and for court-annexed programs.

Editor: Let's look at mediation for a moment. How many international mediation cases does JAMS handle?

Davidson: There has been tremendous growth in the number of international mediation cases that come to us. JAMS, as you may be aware, is the premier mediation provider in the world; it handles over 10,000 complex case filings a year. A 2006 survey of our neutrals revealed that we handle an international mediation every business day. For purposes of that survey, we defined an "international mediation" rather strictly: A mediation was "international" if either the mediator got on an airplane and conducted the mediation in another country, or if at least one of the parties flew into the United States to participate.

Editor: Is JAMS experiencing any decrease in the growth of its international arbitration business due to the perception that such proceedings are becoming increasingly lengthy and expensive?

Davidson: No. You must understand that we are a unique organization. Our neutrals come from the top tiers of retired counsel, retired federal and state court judges, and ADR professionals. Our people are almost always on the short list for these appointments. Having said that, there is no denying that many clients have become disaffected by the time and cost now associated with international arbitration. Because of this, various provider organizations have been exploring ways to make the process faster and less expensive. JAMS has been growing in popularity because of the quality of its neutrals, the fact that we practice ADR full-time (and are therefore available), and because the overall process tends to be less expensive and faster at JAMS.

Editor: Should international arbitration agreements require parties to take steps to resolve their dispute before engaging in arbitration?

Davidson: Many arbitration agreements now include so-called "step clauses" requiring one side to provide the other with a notice of a claim prior to instituting a formal proceeding. These clauses typically require executives from both parties to meet quickly and, if that effort fails to resolve the dispute, a formal mediation is then conducted. If the formal mediation cannot resolve the dispute in a defined period of time, then the parties may proceed to arbitration. It is becoming common for companies to include these step clauses in their agreements. The JAMS website (www.jamsadr.com) includes several sample clauses that counsel can use to tailor their own agreements.

Editor: Do these step clauses contribute to early settlements, or are they only bumps in the inevitable road to arbitration or litigation?

Davidson: You would be surprised at how many complex disputes get resolved with these threshold efforts. Our experience is that well over half of all cases - even the most complex and contested matters - settle when mediated at the very beginning of a dispute. Once a dispute has reached the stage of filing and discovery, upwards of 80% to 85% of our commercial cases settle at a mediation (or shortly thereafter). That percentage rises to over 90% for employment disputes. I had some skepticism of the process when I first came to JAMS. After mediating these cases and watching others do it, however, I am convinced of the value of the process. There is no doubt in my mind that interest-based facilitative mediation will eventually become the resolution mechanism of choice for companies throughout the world. It has not had more widespread acceptance internationally because mediation as an institutionalized way of resolving disputes is not as well-known or, with the exception of the U.K., as skillfully practiced abroad as it is here in the United States.

Editor: What types of disputes benefit from the use of international arbitration or mediation?

Davidson: At JAMS our international ADR cases tend to involve larger commercial disputes. They include disputes over joint ventures, sales of goods, insurance or reinsurance, infrastructure projects, energy and construction. The IP area is also becoming very active internationally as more companies make, sell and use goods outside of their own countries. With respect to IP matters, we regularly deal with mediations and arbitrations involving trademark and patent licensing claims. These types of cases lend themselves either to arbitration or to mediated settlements. A substantial number of employment disputes, including international ones, are also successfully mediated.

Editor: Can international arbitrators grant relief in the form of a declaratory judgment, or can arbitrators in international proceedings issue provisional remedies such as preliminary injunctions?

Davidson: Yes. Arbitrations where the parties seek declaratory or equitable relief are becoming more and more frequent, particularly in proceedings involving intellectual property issues, licensing agreements and joint ventures. In joint venture disputes, for example, one of the parties may ask for relief that includes a finding that it is (or was) entitled to terminate the joint venture. The international arbitration rules of such organizations such as JAMS, the ICC, the LCIA, or the HKIAC provide for interim, interlocutory, or partial final awards, including the issuance of enforceable preliminary injunctions and other provisional remedies to protect parties in intellectual property and other disputes. For example, JAMS' International Arbitration Rules include Article 30, which expressly permits a Tribunal to grant any remedy or relief including specific performance of a contract. Article 26 of the JAMS Rules empowers an international Tribunal to take whatever interim measures it deems necessary, including the ordering of injunctive relief.

Editor: Are such remedies enforceable under the New York Convention?

Davidson: It depends on the country where you are attempting to obtain recognition and enforcement. The New York Convention requires countries to recognize and enforce Convention awards to the same extent as they would recognize and enforce their own domestic awards. While awards ordering the payment of money are straightforward, awards ordering equitable or declaratory relief are not always met with the same enthusiasm. The result is uncertainty in enforcement. Generally, an injunctive order is enforceable in most places in the world, but there is always a risk that a country will not enforce such an award on public policy grounds or otherwise. As a practical matter, most arbitrating parties will voluntarily comply with such orders rather than risk alienating the ultimate decision-makers.

Editor: Do you foresee an expansion of JAMS' services into China?

Davidson: JAMS International Arbitration Rules have now been translated into Mandarin and will be posted to the website shortly. We would not be doing that if we did not anticipate a significant amount of work coming from China. That being said, no provider organization except for CEITAC is involved at present in a major way in China. Everyone expects China to burst open. However, administrative impediments and legal constraints have made the process of expansion slower than most people anticipated. JAMS nonetheless foresees significant growth in the use of ADR in Asia, which is why we formed an alliance with the HKIAC.

Editor: What factors do companies need to consider when selecting rules to govern their international arbitration proceedings?

Davidson: Most provider rules have similar provisions. We think that JAMS' International Arbitration Rules have some distinct advantages. For instance, our rules have a liberal consolidation provision and the opportunity for online filing and email communications thereafter. We have no terms of reference, but we do have a process for vetting awards before they are issued. Our fees are also relatively modest when compared with other provider organizations. Other important factors relate to the ability of the organization to select qualified arbitrators and the ability of those arbitrators to chair an international proceeding efficiently. When you have parties from common law and civil law jurisdictions on opposite sides of a dispute, for example, an experienced arbitrator will know how to blend the procedural requests of the civil law and common law lawyers to establish acceptable and efficient procedures. For example, civil law parties prefer written submissions to oral argument or cross-examination. On the other hand, common law trained attorneys want to cross-examine witnesses and to argue their cases. A well balanced set of procedures established and monitored by an experienced Tribunal will accommodate these two traditions and ensure that parties feel that they were fully heard and had the ability to present their cases the way they wanted.

Editor: How important is the quality of counsel?

Davidson: The quality of counsel is very important. If the parties retain counsel who are constantly arguing in an inappropriate way, it can be a problem in terms of time and cost. You have to be certain that you select an arbitrator who can prevent that type of behavior. There has to be a balance between the issues in controversy and the amount of time and effort that one can expend in hearing those issues. That is where an experienced arbitrator comes in handy.

Editor: How do you get the maximum amount of information about an arbitrator?

Davidson: Parties should be comfortable with the neutrals who are, or may be, selected to hear their disputes. JAMS is unique in that we place complete resumes and specialist resumes on our website. Parties can visit our website at www.jamsadr.com and thoroughly examine the backgrounds of arbitrator candidates to make sure that the person selected fits their requirements.

Please email the interviewee at rdavidson@jamsadr.com with questions about this interview.