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LEGAL REPORT: LITIGATION Arbitration becoming the 'new' civil litigation One of the main benefits of commercial arbitration is that it's much easier to enforce arbitral awards than court decisions in foreign jurisdictions. BY JENNIFER MCPHEE A rbitration is fast- becoming the new civil litigation when it comes to resolving transna- tional business battles. Canadian businesses now increasingly pick arbitration over the courts, especial- ly when the justice system in the far-flung country is sketchy, say experts. The rise of Canadians' in- creased role in international commercial arbitration has been fuelled by Canada's fairly recent emergence as a player in the global econo- my and the perception that Canadians are fair and neu- tral, say lawyers. "It's only in the last dozen years that the business community has awakened to the op- portunities around the world," says Da- vid Haigh, a partner at Burnet Duckworth & Palmer LLP in Calgary, who acts as counsel and arbitrator in international commercial arbitrations. "We had some international activity before that, but now it's becoming much more widespread." One example of this is Canadians' foray into exploring for and exploiting natural resources in developing countries in Latin America and Africa. But civil litigation in these places can drag on for decades — cases have spanned 30 years in Africa, says one lawyer. And the judges may be corrupt or not inde- pendent. When speaking to business groups, Haigh uses a simple analogy to drive home the point that companies should steer way clear of these courts. "Wherever you go in the world where you can't drink the water, don't trust the judges," he says. And some businesses also see reasons to stay out of other countries' justice systems, even in developed countries. "Even in a country like the United States, a lot of people from other places in the world wouldn't want to be in the United States courts because of things like the jury sys- tem or the punitive dam- ages," says Barry Leon, a partner at Torys LLP in Toronto with extensive expertise in internation- al arbitration. Besides avoiding other countries' court systems, a major advantage of ar- bitration over the courts is that it's easier to enforce an arbitral award in anoth- er jurisdiction. More than 100 contracting states to the 1958 New York Convention — widely credited for paving the way for international arbitration — have agreed that their courts will recognize and enforce arbitral awards made in other contracting states with very limited exceptions. By comparison, enforcing a court judgment somewhere else can be much more difficult, says Leon. "Sometimes it means hav- ing to re-litigate the whole issue because the court there just won't recognize the foreign judgment," he says. "I think there's www. C ANADIAN Law ye rmag.com JANU AR Y 2008 53 MICK COULAS