Why US startups should use online arbitration with an international seat

This blog entry will first provide some basic reasons why businesses should use arbitration, and then provide specific reasons why US startups should locate their arbitration outside their country using an online arbitration process.

First the reasons for arbitration:

Speed

Court cases take time, even for disputes that are relatively simple or over small amounts of money. You should use an arbitration process with rules from an institution that allow you to flexibly resolve disputes faster. If your arbitration is managed properly, you could get results in a third of the time required in court proceedings.

Cost

Litigation in court can be extraordinarily expensive, even in the preparation until the day before you get to court. This is over and above the time you sit waiting for money owed to you to come in. This  high cost adds unnecessary stress to your business life and may scare you away from actually making claims. Your arbitration, properly designed or using good institutional rules, could be streamlined to avoid costly courtroom-style procedures. A properly designed arbitration process will prevent you getting muscled out by a party that is much richer than you. Continue reading “Why US startups should use online arbitration with an international seat”

Time, Costs, Lessons from the Persero arbitration

Justice delayed is justice denied. The Persero Cases are three cases fought out in Singapore between 2011 and 2015 that relate to the enforcement of arbitral awards from construction contracts. They are a series of fascinating battles between two Indonesian parties (PT Perusahaan Gas Negara (Persero) TBK, an Indonesian company, and CRW Joint Operation, an Indonesian joint operation (a jv that doesn’t involve the setting up of a new legal entity) to a FIDIC construction contract with the amount in dispute ranging between 13 and 18 million dollars. The cases are complex and bring up numerous important points that merit mention as separate blog posts. This particular post highlights the potential implications of time and costs in arbitration, if done badly.

Timeline

Consider the timeline:

Continue reading “Time, Costs, Lessons from the Persero arbitration”

Bases on which to challenge an award under the Arbitration Act

Introduction

This blog post sets out some of the bases on which a party can challenge the enforcement of an arbitral award in England.

In England, The Arbitration Act, 1996 (the “Act“) provides a number of bases on which awards may be challenged, including section 67 (substantive jurisdiction, i.e. whether an arbitration agreement was in place underpinning the tribunal’s actions), section 68 (“serious irregularity”, i.e. where a tribunal “has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected”[1]) section 33 (general duties to be impartiality and expeditiousness), and points of law in section 69.

However, in Lesotho Highlands, the House of Lords made it clear that errors of law and adjudication are not generally grounds for setting aside awards,[2] i.e. a court will generally not be willing to overturn an award on the basis of the merits of the case.

Interim Arbitral Awards

I was faced with counsel on the other side that agreed to our choice of NY law in a contract but objected to our arbitration clause in the following manner:

“We have a policy against using arbitration, since it is expensive and doesn’t provide for injunctive relief.”

This response shocked me because this was experienced legal counsel from a very large company saying this.

Their opinion on cost irritated me because the arbitration clause we had proposed referred to an institution which would appoint one arbitrator and use simplified procedural rules for small disputes (some institutions will even have documents-only procedures as a default to keep costs low and procedures as short lived as possible. For example, the IEAC (www.expeditedadr.com )

But the whole notion that injunctive relief is not available under arbitration got me thinking.

Continue reading “Interim Arbitral Awards”