Legal news and trends for Canadian in-house counsel and c-suite executives
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GLOBAL UPDATE INTERNATIONAL ARBITRATION companies turn to arbitration past decade has attracted businesses that have never before ventured beyond their local markets. "Today, anyone with a computer can click and sell anywhere in the world," says Brian Casey, a partner at Baker & McKenzie and an internationally recog- nized expert in commercial arbitration. Consequently, businesses need protection from C foreign clients that don't pay, deliver faulty goods, or otherwise breach a contract. Suing in a for- eign jurisdiction can be problematic, especially if the country has a less sophisticated legal and court system or a different legal tradition. Suing in Canada may be easier, but successful judgments are anadian companies venturing abroad do so at their peril if they fail to consider the potential protection offered by international arbitration. Accelerating globalization over the unenforceable outside the country except, by treaty, in Great Britain. Increasingly, companies are turning to arbitra- tion to settle disputes that arise from international commercial transactions. "If your business is leaving Canada, you should include an arbitration clause," advises Casey. "Without such a clause, you could end up in an unfriendly legal jurisdiction where the other side has home court advantage. You just don't know what you're getting into." According to Casey, arbitration's benefits can be manifold: home court advantage. agreed upon by both parties in advance. decided within 18 months, while it may take two to three years to get a court date. proprietary information or intellectual property is involved. tially costly appeals. expertise in the field, as opposed to appearing before a randomly assigned judge. enforceable in most jurisdictions around the globe. Indeed, 137 countries have ratified the 1958 New York Convention, a UN treaty that provides teeth to arbitrators' awards. The only significant holdout is Taiwan. Explains Casey: "The New York Convention rec- a respected global institution to handle any commercial disputes that might arise with a foreign partner. There are three major international arbitration institu- tions that offer one-stop shopping, from arranging the place and time of the arbitration to providing a list of neutral arbitrators. They also provide wording for a potential arbitration clause that refers the dispute to their institute. However, even if the contract fails to include such a clause, their services remain available to the parties once a dispute emerges. The three institutes are the London Court of International Arbitration (www.lcia-arbitration.com), the International Court of Arbitration, a division of the Paris- based International Chamber of Commerce (www.iccwbo. org), and the International Centre of Dispute Resolution run by the New York City-based American Arbitration Association (www.adr.org/icdr). All are capable of arranging arbitrations in most major cities around the world, either through their field offices or through their relationship with local arbitration insti- tutes. In Canada, ADR Chambers and ADR Chambers Arbitration institutions offer one-stop shopping U nless you have experience with international arbitra- tion, advises expert Brian Casey, you should rely on International also provide full arbitration services. While these major institutes provide similar services, each has particular geographic and industry strengths. Consult an expert before choosing. Meanwhile, parties operating under the NAFTA or other bilateral investment treaties have specialized institutions such as ICSID, the International Centre for the Settlement of Investment Disputes, which is a division of the World Bank in Washington. 14 APRIL 2008 C ANADIAN Lawyer INHOUSE