Legal news and trends for Canadian in-house counsel and c-suite executives
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arbitration clause that will work in our favour?' Not so that it is totally one- sided, but for some reason you may be in a situation where it will be to your advantage to have a particular kind of arbitration, a certain set of rules or a certain place to have the arbitration heard. Often if you think about it ahead of time you can get that in the contract because the other side will not have thought about it." Keeping disputes out of the public eye is often viewed as a major benefit for companies that want to keep their business practices out of the media or have proprietary technologies or proc- esses they want to keep out of reach of competitors. Arbitration may have another salutary effect — dialing down the tension between business part- ners. "I have found arbitration, in part because of its lack of a public nature, tends to allow parties to resolve the of relationship of the parties. It is a dis- pute, and the outcome will be resolved by a third party." She notes Rio Tinto is currently going through the arbitration process with a long-term business partner and says that fighting it out in private will not ultimately salvage that relationship. "We're still in a dispute with them and it broke the business relationship. It's a big dispute, and I don't see how you can be in a big dispute and keep doing business together. And whatever the outcome, one party will be unhappy, and it will take time before, I think, we When I talk to corporate counsel, I will often talk about international arbitration as being part of risk management because that tends to get corporate counsel's attention as something important. BARRY LEON, Perley-Robertson Hill & McDougall LLP public, they are probably somewhat misguided as well," says Martin Valasek, a litigation partner with Ogilvy Renault LLP in Montreal. "Many companies that are entering into agreements are public companies and they do have disclosure requirements including dis- putes that are important to their bot- tom line. Secondly, when you are in an arbitration, it doesn't mean that you will always avoid the court system. The court system can come into play, even if everything is going reasonably well, one party might decide they want to go to the local court in the place of arbitration to get some assistance for example to enforce an order related to the arbitration. In that way, you can get breaches of the privacy bubble." Finally, unless it is specifically spelled out in the arbitration language, privacy can be stripped away by one of the par- ties. "Contractually you can try to pre- vent it, but nothing prevents one side from running to the local court and trying to set aside the award. Right then and there, the thing becomes public." Privacy is one benefit of interna- dispute and maintain the relationship," says Fisher. "You can, at different times in an arbitration context, determine what is in your interest and resolve the matter, whereas in my experience litiga- tion tends to create harsher feelings." Whether behind closed doors or potentially in the full glare of camera lenses, a dispute is still a dispute. That's the assessment of Marie-Christine Dupont, Montreal-based legal counsel with mining company Rio Tinto, who says that she has found little differ- ence between litigation and arbitration on the long-term relationship between two business partners. "Experiencing arbitration to me it is just the same as if we were in court litigation in terms can do business again." Dupont also says arbitration's tout- ed benefits of being cheaper and faster than court proceedings are not neces- sarily the case. "For instance with [the International Chamber of Commerce's International Court of Arbitration], I find it very long," she says. "Because it is long the procedure tends to be . . . more costly because it takes more time." Corporate counsel looking to arbi- tration as a way to ensure that corporate affairs are kept behind closed doors might also be disappointed with how the process often works in practice. "If people really are choosing international arbitration because they never want anything about their dispute to become tional arbitration and occasionally speed and financial savings, however Valasek says ultimately it is the implied promise of neutrality that is steering most companies to avoid litigation in favour of arbitration. "In my view, the most important feature and attractive feature of international arbitration is its neutrality," he says. "Not only are you avoiding some far-flung place, but your counterparty is avoiding your court because they probably feel the same way about your court," he says. Valasek adds that when the parties are coming together, there is clearly an interest in doing business together; one has some- thing they want to sell or they want to do a joint venture. "That's all fine and good, and they are in a honeymoon period. But when they start thinking about what will happen when things go wrong, it starts to get less interesting. That is really the most important factor driving the attractiveness and attention to international arbitration in those types of transactions." IH INHOUSE APRIL 2011 • 29