This year our country has seen many changes. Ukrainian Parliament adopted changes to the Constitution in a part concerning justice and the new Law on the Judicial System and Status of Judges. These laws have utmost importance in the context of our country’s movement toward maximum democratization, independence and reorganization of the judiciary system. It was highlighted by the Deputy Head of the Presidential Administration of Ukraine Oleksiy Filatov on 03.11.2016 at the opening of Kyiv Arbitration Days 2016, the sixth annual conference organized by the Ukrainian Bar Association and held under the slogan: Think Big! Notewothy, a number of renowned and recognized European and American experts in the field of international arbitration came to Kyiv to exchange experience and barter ideas.
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The first session covered the topic “Regulatory madness: is arbitration really overregulated?” Exploring the concept of soft law, Anton Baier, President of the Vienna International Arbitral Centre, emphasized that “soft law” is worded like a law, but is not really a law as long as. It has no imperative stance. Giving examples from his arbitration practice in Austria, Bayer underlined: “Soft law is not a new law and not an imperative law. Soft law is a solution, reconciliation, and orientation.”
Nata Ghibradze, Associate at Hogan Lovells (Germany), informed on normative regulation of soft law and labeled it as a tool for reaching balance between honesty and efficiency. In particular, she stated that the IBA Rules concerning conflict of interests in international arbitration is one of the important (if not the most important) parts of “soft law”: “IBA Directives are applied in 65% of all arbitration cases in Germany, where conflict of interest is present. Worldwide, this figure is 67%.”
“My experience with soft law shows that the farther you go, the less you know”, - Counselor at JSC Spenser and Kaufmann Volodymyr Yaremko described his arbitration experience with soft law application. He noted that in international arbitration, thousands of pages have been written on soft law; it is constantly developing, numerous directives are drafted, therefore consultations of soft law specialists will be in demand pretty soon: “It (soft law) brings more problems than decisions to lawyers. In my country, majority of courts and lawyers know nothing about “soft law” and do not apply it, so the proceedings go a bit easier”. According to Yaremko, in various jurisdictions soft law is applied differently: in some countries it is developing full tilt ahead, while in other countries it faces criticism.
During the second session “Client: your best enemy”, Eliza Gluszhko, Senior Associate at Garrigues (Poland), told about organization of team work during arbitration cases: “From my experience, I might say that work in a small team of lawyers is more efficient than in a big group. The bar team leader should have clear vision of every team member’s potential and make a detailed plan of work.” In her opinion, team members should have meetings more often to keep abreast of current cases.
According to Olena Perepelynska, Partner at Integrites, financial aspect is one of the reasons why international arbitration is so attractive. However, in terms of Ukraine the number of arbitration cases is not sufficient for those who are willing to work with them.
Alexander Milner, Arbitrator at Fountain Court Chambers (Great Britain), pointed out that the lawyer may independently choose instruments to defend his position in court and offer arguments in a manner he finds necessary. According to Milner, to work with witnesses is very important. “They should be able to give proper words during arbitration. The issue of how to “train” witnesses depends on the jurisdiction of a certain country. “In the UK, for example, it is prohibited”, the British lawyer stated and gave the most widely known example of a dispute, in resolution of which testimonies of witnesses played a key role (dispute between Boris Berezovskiy and Roman Abramovych).
During the third session, the participants of the Kiev Arbitration Days 2016 conference had a discussion about trust to arbitrators, arbitral institution and arbitration in general as a tool of disputes` resolution in the world. Oleksandr Volkov, lawyer of YEPAP Ukraine, who moderated this session, raised the reasons for to address arbitration, not national courts, as well as the issue what kind of arbitrators (experienced, young, or famous) inspires more trust. James Freeman, Counselor at Allen&Overy LPP (Great Britain), stated that there is an urgent need of attracting new people to arbitration, preferably young, with new ideas and mentality.
Aleksandre Khrapoutski, Partner at Sysouev, Bondar, Khrapoutski LLС (Belarus), stressed that arbitration courts are an important element of judicial system, which requires developing. He believes that arbitration specialists are highly inneeded and highlighted negative aspects of arbitration as a profession: “They (the arbitrators) are often criticized for making their services too expensive, tightening the timeframes, let along being always busy”.
“We need to be confident to trust”, - stated in his speech Simon Sloane, Partner at Fieldfisher (UK). In his speech he gave comprehensive analysis of the concept of trust and its role in dispute resolution process. Besides, comparing the concept of trust and risk of bias, he pointed out that trust is a backbone of the system of relations between the parties to the arbitration proceedings.
Summing up the discussion, Markiyan Kliuchkovskyi, Member of the Organizing Committee, Partner at EPAP Ukraine, emphasized that these days, international arbitration as an alternative tool for resolution for case resolution is gaining popularity across the world.
Comments:
Markiyan Malskyi, Candidate of law (PhD), Lawyer, Partner and Head of international disputes practice at JSC Arzinger
This year, the conference again offered us an opportunity to see recipes of international cuisine of disputes resolution. Ukrainian and foreign arbitration experts, representatives of international arbitration institutions and public authorities shared their exclusive approaches to selecting ingredients for their “meals” for international arbitration. Irrespective of the fact that this event was only one day long unlike two days in previous years this format enriched the “taste” as it appeared to be more practically oriented and inspired its participants for discussions on topical issues of international arbitration. In particular, participants of Kyiv Arbitration Days discussed burning issues of conflict of interests of arbitrators and representatives of the parties, work with client’s expectations, team building intended for work under arbitration projects and interaction of roles of each team member in such teams, financing by the third parties and its impact on international disputes resolution. The organizers and speakers managed to cover urgent issues of both commercial and investment arbitration.
At the opening of Kyiv Arbitration Days, all those present here were all ears to the latest news presented by Oleksiy Filatov, Deputy Head of the Presidential Administration of Ukraine, on the progress of judicial system reform designed to promote arbitration and on the law-making work and expectations for the coming six months.
Besides, the speakers and participants discussed the issue whether arbitration is really overregulated. The experts noticed rapid evolution of soft law, its impact on international relations and arbitration, and intensification of international arbitral institutions aiming their efforts to systemize and unify soft law. In particular, they spoke about application of the Recommendations of International Bar Association to conflict of interests and representation of the parties in international arbitration giving examples of specific cases. At the same time, the participants of the discussion expect competition between arbitration institutions to go further.
A representative of the Ministry of Justice of Ukraine shared the “inside” view from the position of the state’s interests and challenges that Ukraine faces as the state in the international investment arbitration.
Developing the topic of today’s challenges, the experts were active in sharing their opinions on selection of arbitrators, in particular, on the matters of institutional appointments, closed (limited access) lists, and freedom of choice.
Financial aspects of arbitration were not set aside as well. The speakers and participants discussed the possibility of receiving financing from the third party in arbitration in the CIS countries. One of the conclusions voiced is that it is time to stop worrying about financing by any third party, and start taking advantage of it instead.
Practically each topic discussed was illustrated by updated statistics and scientific findings. It means that this year the topics for discussion are selected correctly and are closely applicable to real life situations.
I see again that the idea of Kyiv Arbitration Days was taking efforts. This positive tradition should be kept for us to have opportunity to discuss various ideas and look for efficient ways of resolving urgent issues of international arbitration to ensure its values for Ukrainian and international business.
Volodymyr Yaremko, Counselor at JSC Spenser and Kaufmann
With years passing, it is harder and harder to impress Ukrainian audience and foreign counterparts. And this challenge is motivating for the Organizing Committee and speakers. This year, they succeeded, I believe. First of all, it was a good decision to make everything in one day. Thanks to that, the event was intense and energetic.
During the conference, the participants made prognosis for the future, so now it would be interesting to see whether the anticipation about “soft law”, financing and enforcement of decisions come true. Next year, we need to meet and check it up.
Irina Nazarova, Program Coordinator of the conference, Managing Partner at JSC ENGRADE.
Over 6 years of its existence, the Kiev Arbitration Days conference has become an important international event anticipated by the arbitration community in Europe and North America. This year, we welcomed 130 delegates from Central, Eastern, and Western European countries and the United States of America. The highlight of the conference was its special reports. Kai Hober (Chairman of the Board of Directors of the Arbitration Institute of the Stockholm Chamber Commerce) presented analysis of arbitration development in a global perspective, and Maxim Kodunov (Head of the Department for representation of interests of the state in foreign jurisdiction bodies of the Ministry of Justice of Ukraine) focused on alarming trends in disputes between the state and investors.
Colleagues from the Organizing committee made a significant input to the conference to be successful and perspective. We are grateful to Sabine Konrad, Lisa Richman, Erhard Bome, Mathias Voklovich, and Markian Kluchkovskyi for their devotion and efforts. Also, I would like to outline organizational talent and work of the Secretariat of Presidential Administration of Ukraine. The team headed by Oleksandra Ehert is worth praising!
To conclude, I would to like to highlight that the conference showed high level of our Ukrainian colleagues. Admittedly, knowledge and expertise of the Ukrainian specialists meet international standards.
Markiyan Kliuchkovskyi, Member of the Organizing Committee, Partner at EPAP Ukraine
Arbitration is a system aimed at creating global and universal means of disputes` resolution that would be the same for all. We should look for common points in arbitration.
The issues discussed at the conference are the most common issues of arbitration. In particular, we considered the issues of recognition and enforcement of arbitration decisions in the Eastern European countries including the decisions awarded against the state where the problematic issues of sovereignty arise.
The piece of drama presented here was meant to show cultural differences between continental European and American traditions and interpretation of arbitration.
The important aspect discussed at the end of the conference touched relatively new term in arbitration, which means financing of claims by third party (funder). Thus, the discussion of practical issues arising from this new phenomena was the point of interest of the forth session. What should we do with it? How much of influence such funders may have on the course of the case and how can they intervene in the position of a party? In other words, we have the third party appearing with its interest in arbitration, which is uncommon for arbitration.
In Ukraine, these issues are still discussed theoretically, nobody applies it yet. However, it is just a matter of time, as the practice shows that this mechanism is functioning.