Freshfields on International Arbitration

Global arbitration leaders Freshfields offer us some insight on their practice.

What is international arbitration and what do arbitration lawyers do?

International arbitration concerns the resolution of disputes involving parties from different countries that have agreed to resolve their differences before international arbitral tribunals instead of domestic courts. International arbitration can be divided between two main categories: (i) investment arbitration, which concerns the resolution of disputes between states and foreign investors arising under instruments providing for the protection of the latter’s investments (eg investment treaties or investment legislation); and (ii) commercial arbitration, which concerns the resolution of disputes between individuals or companies arising out of contracts.

Aside from representing parties in all stages of arbitration, lawyers practicing in this area may also work on litigation relating to arbitrations – including with respect to the enforcement of arbitral awards – and in alternative methods of dispute resolution. Moreover, arbitration lawyers typically provide advisory services to clients, especially with respect to the merits of potential claims and the drafting of sophisticated arbitration and dispute resolution clauses.

The life of a junior associate in international arbitration

Junior associates practicing international arbitration get heavily involved in cases from the outset of their careers. The tasks that a junior associate will be asked to do include: 

  • assisting with the drafting of memoranda of advice;
  • legal research and writing internal memoranda;
  • preparing for and attending interviews/meetings with fact and expert witnesses;
  • reviewing documents and developing the factual narrative of a case;
  • drafting sections of briefs and witness statements;
  • coordinating the logistics surrounding the filing of submissions before the tribunal; and
  • assisting with the preparation of oral advocacy (eg opening and closing statements, examination of witnesses) and attending hearings.

Given the international nature of these disputes, associates are expected to be willing to travel frequently in order to meet the demands of the cases.

How international is international arbitration? 

As the name suggests, this practice is truly international in nature. Aside from involving parties from two (or, in multiparty arbitrations, more) jurisdictions, these disputes typically: 

  • involve the application of laws from different jurisdictions (including, in investment arbitration, the application of public international law);
  • are before arbitrators from different countries and legal backgrounds;
  • require the participation of fact and expert witnesses who are often located around the world;
  • involve multiple languages; and
  • are interrelated with, and require knowledge of, geopolitical developments.

A single case may therefore require work to be performed in many countries and across several continents. To give an illustration, a recent case in which Freshfields was involved concerned a power plant in Eastern Africa. The dispute was between Eastern African and Asian companies. The case required the application of Canadian law and the law of an Eastern African country. Fact and expert witnesses were scattered across Canada, Cuba, the United States of America, the United Kingdom, Ghana, Ethiopia, Korea, China and Madagascar. The tribunal was comprised of arbitrators from the United States of America, the United Kingdom and New Zealand.

The growth of international arbitration 

The vast majority of arbitrations – especially commercial disputes – are confidential and are therefore not in the public domain. The most reliable statistics regarding the growth of international arbitration are those published by the institutions that administer the cases. The growing caseload of the world’s largest arbitration institutions is a testament to the growth of the practice of international arbitration.

Commercial arbitration has for many years been the dispute resolution method of choice for contracting parties from different jurisdictions. Among the benefits is the neutrality of the forum and the international enforceability of arbitral awards. Cases have steadily increased over the last decade. For example, the International Chamber of Commerce – one of the largest arbitration institutions in the world – increased its number of newly registered cases from just over 500 cases in 2005 to over 800 cases in 2015. 

As for investment arbitration, while many cases are confidential, there is significantly more publicly-available information as compared to commercial disputes. The International Centre for Settlement of Investment Disputes (ICSID) is the leading institution for the administration of investment disputes. In 2015, it registered more cases than in any previous year and more cases than had been registered throughout the 1990s.

The proliferation of investment arbitration is the product of several overlapping developments. Globalization has removed trade barriers leading to increased foreign direct investment and, with that, an increase in the number of disputes arising out of such investments. Also, the proliferation of international treaties providing for investment protections and investor-state dispute settlement (such as the recently signed Trans-Pacific Partnership) means that more investors find that they have rights and remedies in the face of Government measures adversely affecting their investments. Finally, many states that were historically considered as capital-importing states are now also capital-exporting states, which has increased the pool of foreign investors seeking to make use of those rights and remedies. All of this points to the continued growth of investment arbitration.

About Freshfields’ arbitration practice 

Freshfields is widely recognized as one of the world’s leading practices in this area. The team is consistently ranked in the top tier of every major legal directory, across all regions. We have the world’s premier investment arbitration practice, and are involved in advisory and contentious matters arising under bilateral and multilateral treaties all over the world.

The group is currently managing a caseload of some 200 matters that span the globe and are being conducted in eight different languages. Aside from the volume of its cases, the firm routinely works on the largest, groundbreaking and most complex arbitrations in the market.  Our lawyers have acted as counsel in a large array of industrial sectors in some of the most significant investment treaty arbitrations, many of which have contributed to shaping the legal landscape of investment treaty law. The team has achieved great successes for its clients, including, most recently, securing one of the largest awards ever rendered in an ICSID arbitration. 

The Inside View on Freshfields Bruckhaus Deringer>>>