Index of Content

The Good, the Bad and the Ugly

There can be no doubt that internatiQnal arbitration, particularly in the Asian region, has seen the most remarkable progress over the last 25 years. When I first came to Hong Kong in 1980, there were put a handful of arbitration cases. Now, the Hong Kong International Arbitration Centre (HKIAC) handIes over 300 new cases a year. In addition to that, there are ad hoc cases in Hong Kong which' swell the numbers. Similarly, in China, China International Economic and Trade Arbitration Commission's (CIETAC) caseload has increased dramatically, from 35 in 1985 to nearly 1,000 towards the end of the 1990s. Other centres in the region, such as the Singapore International Arbitration Centre (SIAC) have also seen increases. The International Chamber of Commerce (ICC) has seen its caseload go up substantially over this period and the number of cases involving Asian parties has dramatically increased.

It is not my purpose to consider the causes of this phenomenon but, in passing, it has to be said that the more trade there is, the more disputes there will be and the boom in Asian economies over this period has proved the point. With China's booming economy and its accession to the WTO, perhaps we can expect even more trade and thus even more disputes.

What then has caused clients, practitioners and judges to look so favourably on international arbitration? There can be no doubt that the success of the New York Convention 1958 and the effect of the United Nations' harmonisation effort which led to the UNCITRAL Model Law on International Commercial Arbitration (Model Law) in 1985 are the two pillars upon which modern international arbitration law and practice rest.

It might be helpful if I set out a checklist which parties and their lawyers should consider before agreeing on an arbitral venue:

  1. The jurisdiction is a party to the New York Convention. As ease of enforcement is one of the main advantages of arbitration, this is a crucial factor.
  2. The jurisdiction has adopted the Model Law or has enacted legislation based on the Model Law. This factor requires legislation which acknowledges party autonomy, limits the intervention of the courts, permits arbitrators to decide their own jurisdiction (kompetenz-kompetenz) and recognises the doctrine of separability of the arbitration clause.
  3. The judges of the jurisdiction support arbitration and recognise that their role is primarily supportive of the arbitration process. For example, the judges accept the role of minimal court intervention and apply the concept of international public policy rather than their own, perhaps parochial, standards.
  4. The jurisdiction has an arbitration centre which can provide hearing rooms with all necessary facilities at reasonable prices and which can generally provide administrative services for the proceedings.
  5. The jurisdiction has the necessary infrastructure; (ease of communication, travel, hotels, etc.).
  6. The immigration regime is compatible with international arbitration (i.e. arbitrators, counsel and witnesses can enter and leave the jurisdiction without unnecessary administrative hassle, cost and delay).
  7. There is an open house on legal representation; (ie: foreign lawyers and non-lawyers can represent their clients in international arbitrations free of any local bar or other restrictions).

The New York Convention now applies in over 140 jurisdictions and it is easier to enforce an arbitral award than a judgment. The Model Law has been adopted in numerous countries around the world and, even where it has not been adopted, it has formed the basis of new and up-to-date legislation on arbitration. The essential features of the Model Law are:

  1. Scope of Application. Article I provides that the Model Law applies to international commercial arbitration as defined in Art.I(3). Of the definitions set out, the most frequently applied will be the first, which provides that arbitration is international if the parties have, at the time of the conclusion of .their agreement, their places of business in different countries. It is also of note .that Art. I (3)(b)(ii) provides that an arbitration will be treated as international if the place with which the subject matter of the dispute is closely connected is outside the State in which the parties have their places of business. This is best exemplified by Fung Sang Trading Ltd v Kai Sun Sea Products & Food Co Ltd where the parties were both from Hong Kong, the place of arbitration was Hong Kong and the arbitration was to be governed by Hong Kong law. However, because delivery was to be in China, it was held that this was a "substantial" part of the obligation and therefore, the arbitration was considered an international arbitration and the UNCITRAL Model Law applied.
  2. Extent of Court Intervention. Article 5 makes clear that: "in matters governed by this Law, no court shall intervene except where so provided in this Law."
  3. Form of Arbitration Agreement. Article 7(2) follows the New York Convention by requiring that the parties' arbitration agreement should be in writing. Article 7(2) classifies an agreement as being in writing if "It is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defence in which the eXistence of an agreement is alleged by one party and not denied by the other;" or there is a reference in a contract to a document containing an arbitration clause provided the contract is in writing and there are sufficient words of incorporation of the provision.
  4. Arbitration and the Courts. Article 8 obliges the court to refer to the parties to arbitration if seized with a claim on the same subject-matter unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed.
  5. Interim Measures by the Court. Article 9 preserves the right of a party to seek interim protective measures from the court.
  6. Number of Arbitrators. Article 10 states that the parties are free to determine the number of arbitrators, failing which there shall be three arbitrators.
  7. Challenge to Arbitrators. Articles 12 and 13 set out the basis and procedure for challenging the appointment of an arbitrator (on grounds of lack of impartiality or independence).
  8. Kompetenz-Kompetenz. Article 16(1) contains two well-versed principles sacrosanct to arbitration: the principle of separability, i.e. an arbitration clause which forms part of a contract shall be treated as an agreement independent of the contract; and the principle of kompetenz-kompetenz, i.e. the arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. Article 16(3) provides for the tribunal to determine an issue of jurisdiction either as a preliminary question or in an award on the merits.
  9. Interim Measures. Article 17 is drafted in very broad terms and provides that, unless otherwise agreed by the parties, the tribunal may make an interim measure of protection in respect of the subject matter of the dispute.
  10. Equality of Treatment. Article 18 restates the fundamental procedural rights of the parties: that the parties shall be treated with equality and each party shall be given a full opportunity of presenting its case.
  11. Arbitral Procedure. Article 19 provides for party autonomy in the choice of arbitral procedUre, providing that the parties are free to agree the procedure to be followed by the tribunal (subject tq the provisions of the Model Law). Failing such agreement, the tribunal may conduct the arbitration in the manner it considers appropriate (again subject to the provisions of the Model Law). The power so conferred upon the tribunal includes the power to determine the admissibility, relevance, materiality and weight of any evidence.
  12. Substance of the Dispute. Article 28 gives the parties autonomy in choosing the applicable law to govern their disputes providing that the tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substancy of the dispute; states that, unless otherwise expressed, the choice of substantive law shall not include the conflict of law rules applicable under that substantive law; '-1ij1d 'provides that, in the absence of choice by the parties, the tribunal will apply the law determined by such conflict of law rules it considers applicable.
  13. Form of Award. Article pI provides that the award shall be in writing and state the reasons upon which it is based unless the parties have agreed otherwise.
  14. Recourse against an Award. Article 34 provides the exclusive grounds on which an arbitral award may be set aside by the courts of the place where the arbitration takes place. These are limited to:

    (a) Ground 1, of any one of the following :
    • a party to the arbitration agreement was: under some incapacity or the arbitration agreement is not valid under the applicable law;
    • a party was unable to present its case!
    • the award deals with issues outside the,submission to jurisdiction;
    • irregular composition of the arbitral tribunal.

    (b) Ground 2, either:
    • the subject-matter of the dispute is not capable of settlement by arbitration (under the law of the State where the arbitration takes place);
    • the award conflicts with the public policy of the State where the arbitration takes place.

    The Model Law therefore contains no basis for intervention by the court for error of law.

  15. Recognition and Enforcement of an Award. The Model Law regime borrows from the New York Convention. Article 36(1) repeats the provisions contained in Art.V of the Convention as the sole grounds for refusing.recognition and enforcement of an award. These are essentially the same grounds as are set out in Art.34 of the Model Law for the setting aside of an arbitral award with the addition that an enforcing State can refuse to recognise and enforce an award if the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which the award was made, Art.6(1)(v). In other words, this provision provides an appropriate link between setting aside an award at the place where the award is made and the obligation on the enforcing State to enforce an award. It must be noted that Art.36, by stating "irrespective of the countrY in which [the Award] was made," cuts across the reciprocity reservation, which many States have taken. In Hong Kong for example, Ch.VllI of the Model Law, which contains Art.36, was not enacted because Hong Kong had the benefit of the New York Convention first through United Kingdom's accession on its behalf and, as from July 1, 1997, by China's accession. Both States made the reciprocity reservation.

So, in many jurisdictions around the world, the legislative framework is favourable to arbitration. Judges in many jurisdictions are strongly supportive of arbitration and have resisted the temptation to second-guess arbitrators as some of their predecessors did. Arbitration, mediation, adjudication, dispute review boards are all common features of modern dispute resolution. Most court systems have enough work keeping up with the huge flow of criminal work and administrative law without the need to be involved in the resolution of commercial disputes which were always the remit of merchants before court systems were set up.

In many countries the system works well. Arbitrators are honest and conscientious. The law under which they operate is up-to-date and reflects modern commercial needs. The judges of those jurisdictions know that their role is to support the arbitral process, not to destroy it, and when it comes to enforcement they faithfully apply the New York Convention as a treaty obligation of their State. Unfortunately, there are jurisdictions in which there are considerable problems and which make doing business with a national of that State somewhat of a gamble. Wherever the arbitration is held and under whatever rules it is held, umess the national of that State has assets abroad, it will be necessary to apply to the courts of that State for final enforcement of that award. That is the moment when the domestic court can spring into action.

Let me summarise the areas in which problems have arisen where domestic courts act too soon:

  1. not recognising an arbitration clause by failing to refer parties to arbitration pursuant to the obligation so to do in the New York Convention;
  2. granting an anti-suit injunction in country A in circumstances when nationals in country A and B are arbitrating in country C under UNCITRAL Rules;
  3. removing arbitrators in an arbitration held in their country for who1Jy insufficient reasons;
  4. misapplying the terms of the New York Convention;
  5. not acting on an application to enforce;
  6. failing to render support to an international arbitration within a reasonable time.

Before giving some examples, it may be as well to go back to basic principles. The New York Convention, which has been adopted by virtually all commercial nations, provides in Art.2 that each contracting State: "shall recognise an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or may arise between them in respect of a defined legal relationship . . . concerning a subject matter capable of settlement by arbitration." It continues: "The court of a contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed."

The issue thus arises as to whether a State can be said to be implementing its New York Convention obligations if one of its courts isslies an anti-suit injunction of an international arbitration. It has been my view that the State would not be implementing its obligation in those circumstances and I am delighted that support for this view can be found in the view of Stephen Schwebel, a former President of the International Court of Justice in a paper he gave in Paris on November 21,2003 to the Institut pour l'Arbitrage International during the course of a seminar devoted solely to the problem of anti-suit injunctions. Having set out the problem, Judge Schwebel stated:

"When a domestic court acts, it acts as an organ of the state for whose actions that state is internationally responsible. When a domestic court issues an anti-suit injunction blocking the international arbitration agreed to in a contract, that court fails 'to refer the parties to arbitration. . . ' In substance, it fails anticipatorily to 'recognise arbitral awards as binding and enforce them' and pre-emptively refuses recognition and enforcement on grounds that do not, or may not fall within the bounds of Article V.

A party to a treaty is bound under international law - as codified by the Vienna Convention on the Law of Treaties - to perform it in good faith. As the Vienna Convention prescribes, a party may not invoke the provisions of its internal law as justification not to perform a treaty. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context in light of its object and purpose. The object and purpose of the New York Convention is to ensure that agreements to arbitrate and the resultant awards-at any rate, the resultant foreign awards-are recognised and enforced. It follows that the issuance by a court of an anti-suit injunction that, far from recognising and enforcing an agreement to arbitrate, prevents or immobilises the arbitration that seeks to implement that agreement is inconsistent with the obligations of the state under the New York Convention. It is blatantly inconsistent with the spirit of the Convention. It may be said to be: Inconsistent with the letter of the Convention as well, at ariy rate if the agreement to kbitration provides for an arbitral award made in the territory of another state. There is room to conclude that an anti-suit injunction is inconsistent with the New York Convention eveA when the arbitration takes place or is to take place within the territory of the Contracting State provided that one of the parties to the contract containing the arbitration clause is foreign or its subject matter involves international commerce. "

I have set out the views of Judge Schwebel at some length because, in my judgment, they provide a most authoritative statement of the position. As Judge Schwebel goes on to point out, a further problem with anti-suit injunctions of international arbitration is that they conflict with the principle that "the expectations of the parties to a contract as well as its provisions are critical to the interpretation and application of that contract." It is obvious that those expectations will be denied by the grant of an anti-suit injunction that bars the contractually mandated arbitration.


I will deal with several cases from this region.

In Indonesia, there are several examples of international arbitrations going wrong. I must preface. these examples with several possible causes. First, Indonesian judges are poorly paid. Secondly, judges in Indonesia, typically, have no training in international arbitration or the New York Convention.

In P.T. Perusahaan Dagang Tempo v P.T. Roche Indonesia, there was a dispute relating to the termination of a distributorship agreement. There was an arbitration clause providing for arbitration in English in Jakarta under the rules of the Indonesian National Board of Arbitration (BANI). Despite this, an action was commenced in court. The court refused to stay the action, holding that it had jurisdiction because the dispute was "a legal dispute" and not one of "technical matters." The court found that an arbitral tribunal only had jurisdiction for "technical matters." On any basis, this is an extraordinary position.

In P.T. Branita Sandhini v P.T. Panen Buah Emas (judgment delivered January 6, 2004) the court had before it an action for US$25 million concerning the alleged wrongful termination of a cotton-processing agreement, which provided that it would be governed by Indonesian law. An arbitration clause provided for "arbitration in Singapore in accordance with the Arbitration Rules of the Singapore International Arbitration Centre." The court held that the arbitration clause involved a conflict as to which law was applicable. The court completely misinterpreted the arbitration clause when it stated "Article 19.1 also states that each dispute shall be resolved by arbitration in Singapore via arbitration laws from Singapore International Arbitration Centre, which is clearly not Indonesian law". Thus the court completely confused the governing law chosen by the parties with the choice of venue and procedural rules chosen by the parties. Because of this alleged conflict the court retained the case and refused a stay. As if this was not bad enough, the court then went on to hold that, because the dispute related to the termination of the agreement, it was not covered by the arbitration clause, which used the common language "any dispute arising' under this agreement shall be referred to and finally resolved by arbitration."

These two decisions from Indonesia are completely out of tune with international practice and show such a complete lack of understanding of and antipathy towards international arbitration that one is entitled to question why Indonesia ever ratified the New York Convention. Any party agreeing to arbitration in Indonesia must do so in the knowledge that, even putting aside the vexed question of enforcement of an award, they might not even get to first base in the arbitral process.

In another case from this region, one party refused to appoint an arbitrator and it took the court 23 months to appoint an arbitrator on behalf of that party. International arbitration cannot operate unless there is a court system which can be called upon to assist the arbitral process and can do so rapidly. I note from Mr Bunnag's'paper that it may take two or three years before a final decision can be obtained on an enforcement application for an arbitral award in Thailand. I have to say that this is disappointing. If arbitrators conduct a case with efficiency and dispatch, all this is wasted if it takes two or three yem:s to complete the enforcement process. Yes, of course the courts are busy with other cases but if a country wishes to make itself attractive as an arbitral venue and wishes to enjoy the economic benefits therefrom then I would suggest that it has to make an effort to see that the service it provides is efficient. Arbitration involves invisible exports which can be quite valuable.

Moving further west to the Indian sub-continent, there have been similar and equally surprising decisions. Just a few years ago, there was a case in the High Court of Dhaka involving a major construction project, an ICC arbitration being held in Bangladesh. The arbitral tribunal made an order relating to whether or not a statement could be used if the witness was unable to attend fqr cross-examination. This type of order was routinely made by tribunals. The tribunal held that, despite the witness's absence from the hearing, his statement would be given appropriate weight. Another dispute in this case concerned the admission of certain World Bank documents which had not been formally proved by any witness. The Bangladeshi party, dissatisfied with that order, went immediately to the court in Bangladesh and the. court removed the three most distinguished and experienced arbitrators on the grounds that they had acted in manifest disregard of the law and had thereby committed misconduct.

I am aware of another case where a judge in Dhaka granted an injunction against a US party to an arbitration in Singapore against a Bangladeshi contractor under the UNCITRAL Arbitration Rules. An injunction was also granted against the ICC who had a default appointing power under the contract. The effect of this order was to stop the Singapore arbitration in its tracks and the last three years have been taken up with applications to attempt to set aside the order. So, in this case, a Bangladeshi court took upon itself to interfere with an international arbitration being held in Singapore. With respect, the order made by the Bangladeshi judge was an abuse of judicial power under current international norms. If State court judges in Bangladesh or elsewhere are going to interfere in the arbitral process in this way, then parties will have to consider very carefully whether they want to use arbitration at all. It might have been a different story if an award was made against the Bangladeshi party and the award was taken to Bangladesh for enforcement. The court would then have ample oppo~ty to consider the complaints made and rule on them in the context of the grounds of opposition 1,lnder the New York Convention. Instead, it chose to stop the case from ever being heard, resulting in a complete distortion of the process agreed and a denial of one party's contractual rights. I refer back to Judge Schwebel's observations.

In 2000, the Supreme Court 'of Pakistan had to consider Hubco v WAPDA. This was a dispute relating to a power project. A local company was a vehicle for foreign interests. lt entered into an agreement with the Pakistani Government and with a State-owned power entity of Pakistan called WAPDA. A dispute arose between the parties relating to the price of electricity. This was a tariff dispute and the Government argued that the tariff sought was too high. An international tribunal was formed for this ICC arbitration. A dispute arose between the parties regarding the scope of the arbitration clause and before the arbitration proceedings commenced (before the terms of reference were even signed), the arbitration was suspended. The respondent , made an application to the High Court in Lahore for an ex parte injunction preventingjtheclaimant from continuing with the London arbitration. The case was eventually brought before the Supreme Court of Pakistan. The issue raised there was the arbitrability of allegations of fraud and illegality. The court determined by a majority of three to two that, for reasons of public policy, this dispute was not within the scope of the arbitration clause. The majority judgnient was siX pages in length with no reference to authorities or explanation for its decision. flrhe dissenting opinion however was over 40 pages long and cited a considerable amoup' of authority. While the outcome of the case clearly does not follow the international standards of the scope of arbitration clauses, what is even more troubling is the influence of the government officials, some of whom, during the proceedings, openly commented on the adverse consequences on public policy if an ICC arbitration were to be allowed.

There are also mixed reviews when it comes to enforcement of foreign arbitration awards in China. First, it must be noted that, due to the lack of statistical data available, it is difficult to gauge the real enforceability of arbitral awards in China. However, from the information that does exist which is mainly anecdotal, several interesting trends have emerged.7 Generally speaking, awards have a higher likelihood of being enforced in major cities such as Beijing, Shanghai and Guangzhou than in smaller rural towns and smaller awards are more likely to be enforced than bigger awards. In the awards not enforced, insolvency of the respondent seems to be a significant reason. Interestingly, this study did not find that local protectionism was a substantial obstacle il} enforcing awards, although much anecdotal evidence is to the contrary. This again underscores the need for reliable data.

Another problem with enforcement of awards in China is the problem of inconsistency in the decisions of court cases dealing with arbitration. 'This may be attributed to lack of training on how to handle arbitral awards and a general lack of understanding of arbitration. One solution may be to designate specialist courts to deal with matters arising from arbitration cases. There must be something to be said for creating one body to deal with all arbitration issues coming into Chinese courts-specialist institutions with the ability to establish consistency in their decisions. One particular problem is the advisory opinion; a Chinese party may request an advisory opinion from its local court on the validity of an arbitration clause at any time before or during an arbitration. This then compels the other party to litigate the issue in a Chinese court before it can even proceed with the arbitration.

Immediately after the ICCA Conference in Beijing in May 2004 we will be holding a Judicial Colloquium with Chinese judges and I look forward to a frank exchange of views on matters arbitrational. I would like to propose an Asia-wide Judicial Colloquium on matters relating to international commercial arbitration and it seems to me that ICCA would have a role to play in promoting and organising such an event.

Let it not be thought that strange decisions only emanate from Asia. This is far from true. However, this is a conference about arbitration in Asia and we must highlight the difficulties and problems we see in this area and strive to improve the situation.


Thus far, I have been concentrating on where the courts have let international arbitration down. I hasten to add that there are many courts in Asia where the judges faithfully apply the obligations contained in the New York Convention. I now want to say a few words about another feature of international arbitration said to be having an adverse effect on the development of arbitration generally. The best expression I can use to cover this topic is "overlawyering." Too many lawyers are treating arbitrations as if they were mirror images of State court litigation in their own jurisdiction. This is really not acceptable. If parties wanted S~te litigation, they should not have agreed on arbitration. They should have agreed either to go to the courts of one of the contracting parties or, if this proved difficult, then to confer jurisdiction on a court with a good reputation for ability ~and impartiality. There are several such courts such as the Commercial Court in London,9 the US District Court for the Southern District of New York, the Supreme Courts of Victoria and New South Wales, the Court of First Instance in Hong Kong and High Court in Singapore.

I would submit that, by choosing arbitration, the parties are hoping to achieve something more flexible, less formal, less intrusive and hopefully less costly and more expeditious. However, the reality is different. Major law firms now have international commercial arbitration departments and they transport their own breed of litigation from venue to venue. There are frequently too many lawyers on the team. Instead of moving quickly to resolve the merits of the dispute, considerable time, cost and effort is put into ways of avoiding this. Instead, we see substantial jurisdictional issues, huge arguments about discovery and a whole host of procedural disputes which do not assist in moving the case forward to a resolution on the merits.

Earlier in this paper, I referred to the doctrine of party autonomy which has been built into the Model Law. Perhaps the time has now come to have a second thought about the principle that parties are free to run their arbitration as they please. It is perhaps timely to reconsider this in jurisdictions such as England and Hong Kong where the legislature has placed upon arbitrators a statutory duty "to use procedures that are appropriate to the particular case, avoiding unnecessary delay and expense, so as to provide a fair means for resolving the dispute to which the proceedings relate. "

Perhaps the whole system falls apart where arbitrators encourage parties to attempt to agree on a procedural framework to the case. Perhaps instead it would be better for the arbitrators to take a grip of things at the very beginning and set out clearly how they want the case prepared so' that their tasks can be performed in the most convenient manner.

Later in this conference we will be discussing these very issues. We will be looking at what lay clients want out of arbitration, whether they feel they are getting it, and what the professionals think can be done to achieve it. We will be looking at fairness and justice, not only the outcome but also the process and we will be looking at important issues such as cost and speed. One of the problems with arbitration conferences is that there are too many lawyers telling other lawyers what they think businessmen want out of the arbitral process. We really must spend more time considering whether the system is giving business people what they want.

I know that cost is an issue but please do not be misled into thinking that institutional arbitrations are necessarily che~per than ad hoc arbitrations. They may be more expensive because of the fees of the institution.. Whether institutional or ad hoc, the fees of the lawyers and the experts are the major items and no institution can control that expenditure. It can of course be controlled by the client who takes a hands-on approach to the dispute. Unfortunately, this is rare. More importantly, costs can be contained by a strong and experienced tribunal exercising effective case-management.

It goes without saying that, if judges let the system down and the lawyers continue to conduct international arbitrations as if they were in their home court, the international business community will look at other means of dispute resolution. Perhaps this explains the great increase in the use of mediation and the eclipse of construction arbitration by the system of adjudication in the United Kingdom. Perhaps it explains the increasing use of dispute review boards whose decisions rarely get challenged in the courts. If a country gets a reputation for not being user-friendly to international arbitration, businesses will be wary of doing business with nationals or State entities of that country. If they do, then they will price-in the risk involved, which will not be in the interest of that country. The World Bank's insistence on the use of dispute review boards in cases where it lends large sums for an infrastructural project is some evidence of a lack of confidence in the effectiveness of international arbitration in certain jurisdictions.


International arbitration has come a long way in Asia over the last quarter of a century. There is no shortage of experienced arbitrators, thanks to the efforts of organisations such as the Chartered Institute of Arbitrators, which. has been training arbitrators all over the world, particularly in Asia.11 There is no shortage of legal practitioners experienced in international arbitration. The New York Convention and the Model Law provide a good statutory framework especially when supplemented by well-thought out local legislation. We must not place undue emphasis on the pathological situations which are the subject matter of many arbitration conferences. We must recognise that, for every award that has to go to court for enforcement, many more are settled voluntarily. For every award that is not enforced when perhaps it should have been, we must recall that many more are enforced faithfully under the New York Convention.

However, we must not be complacent. There is. a lot to do. There are too many unacceptable decisions. There is too much delay when a case gets into court. There are too many arbitrations being conducted as if they were in a court. Too much time is being wasted on trifling points and sometimes the bigger picture is being missed. International commercial arbitration is in urgent need of a reality check. I know that there are suspicions about international arbitration in some quarters where it is considered somewhat of a western conspiracy against developing countries. My experience does not support that conclusion at all. But that view will not subside until we achieve some important steps. First, the law and practice of international arbitration must be made more widely known to those judges called upon to exercise this jurisdiction in countries where there has been no long tradition of dealing with international commercial arbitration. Allied to this point I would submit that States should give very careful consideration to the setting up of specialist courts to deal with arbitration matters. This happens in Hong Kong and Singapore and elsewhere and it helps to achieve consistency and thus certainty which is an important part of commercial law. Secondly, we must embrace more well-qualified and fiercely independent arbitrators from developing countries into the arbitration mafia, for only in this way will we be able to begin to dispel the conspiracy myth. Thirdly, arbitrators from outside Asia arbitrating in Asia must be more aware of and sensitive to the various cultural factors at play, not only as between the tribunal and the parties but also as between the arbitrators themselves.

I hope that this arbitration conference will go some way towards helping to achieve these aims.

Neil Kaplan
Addressing the Chartered Institute of Arbitrators' Conference, Bangkok 27 March 2004
Journal of the Chartered Insitute of Arbitrators, August 2004

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