UK: Take Your 'Seat' - The Relative Merits Of European Arbitral Seats

Last Updated: 26 July 2019
Article by Silvia Farre

On the 19th June 2019, DLA Piper hosted a debate at their London office on the relative merits of conducting arbitration proceedings in different European seats of arbitration. The panel discussion moderated by James Carter brought together arbitration specialists from six of the firm's European offices. Each of the panellists provided an insight into the key advantages of their city as a seat of arbitration; the benefits of using the local arbitration institution and its rules; and one recent development in, or notable feature of, substantive commercial or contract law in the jurisdiction.

London - LCIA (London Court of International Arbitration) and English Law

Anna Mills opened the debate, speaking about the reputation of the English legal system and London's status as a global financial centre. Lawyers, courts, arbitrators and institutions are of the highest quality and with an unrivalled reputation for impartiality and diversity. London is also geographically well-placed and easily accessible to parties.

The LCIA Rules themselves provide maximum flexibility - parties can benefit from expedited and emergency appointment of arbitrators, whilst costs are calculated independently of the amounts in dispute. Moreover, the Arbitration Act 1996 provides a valuable framework and arbitrators enjoy a symbiotic relationship with the English courts. Anna made specific reference to English law principles that recognise the parties' freedom to contract and a commercial approach to contractual interpretation.

Cologne - DIS (German Arbitration Institute) and German Law

Dr Frank Roth highlighted that the DIS is well-connected to the Benelux via an international train station hub and two regional airports, whilst the institute's conferencing infrastructure ensures even greater accessibility for parties.

He alluded to the strengths of the current DIS Arbitration Rules (effected on 1 March 2018), which provide a particular focus on early dispute resolution, ensuring efficiency and catering for international clientele. The reliable German legal system has served as a template for many foreign jurisdictions and a large corpus of case law is constantly refining statutes, which creates a level of legal certainty and predictability for parties.

Stockholm - SCC (Stockholm Chamber of Commerce) and Swedish Law

Karl-Oscar Dalin spoke about how Stockholm has functioned as a neutral safe haven for arbitration from the Middle Ages to the Gazprom-Naftogaz arbitration of 2014-2018. Notwithstanding its long history of arbitration, parties conducting proceedings at the SCC can expect to benefit from modern rules in the SCC Rules (2017).

Sweden has a civil law system with common law features and its legislator use a comparative legislative method. The revised Arbitration Act (effected on 1 March 2019) includes, inter alia, provisions which specify the explicit mandate of arbitrators and raises the threshold for challenging an arbitral award. The revised act brings Swedish laws in line with international trends and will likely foster the further growth of international arbitration in Stockholm.

Vienna - VIAC (Vienna International Arbitral Centre) and Austrian Law

David Christian Bauer advocated for the Vienna seat, arguing that it is an experienced hub for arbitration in a neutral country at the heart of Europe.

The new VIAC Rules (2018) represent a modern, lean and flexible approach to arbitration, at reasonable costs. New elements introduced by the VIAC Rules include: allowing for security for costs, the provision of Vienna as a fall-back place of arbitration, and allowing for expedited proceedings if agreed to by the parties. Austrian substantive law is long-established, provides solutions for many unforeseen scenarios, and the courts tend to focus on parties' intentions rather than on the wording of contracts.

Paris - ICC (International Chamber of Commerce) and French Law

Maxime Desplats cited ICC's unparalleled experience, having arbitrated over 24,000 cases and with approximately 800 new cases per year. The ICC Secretariat is familiar with most issues faced by arbitration users, and it is available for discussion in Paris, New York, Hong Kong and Sao Paolo. Parties benefit from additional protection against the risks of set aside, as the ICC (governed by the 2017 ICC Rules) scrutinises and validates all draft awards before they are issued. Additionally, costs are predictable (particularly with the ICC cost calculator available online).

Maxime also argued that Paris is a safe seat, pointing to the modernised French arbitration law (effected in 2011) and experienced, pro-arbitration judges. There are very few legal means to stall arbitration proceedings and extension of arbitration agreements to third parties is possible. French law also generally prohibits punitive damages, which brings legal certainty regarding the maximum amount of damages a tribunal can order.

Amsterdam - NAI (Netherlands Arbitration Institution) and Dutch Law

Michiel Coenraads and Wouter de Clerck contended that Amsterdam is a practical and commercial choice of seat. The NAI is an efficient alternative to ICC and LCIA due to its concise and simple arbitration rules (the NAI Rules) (2015), which provide for institute appointed arbitrators.

Moreover, the Dutch courts have a strong track record in big-ticket set aside and enforcement proceedings and the modern Dutch Arbitration Act (2015) provides for extensive interim measures in support of arbitration. These include ex-parte pre-judgment attachments, money judgments in injunctive relief proceedings, and emergency arbitration (arbitraal kort geding).

If you would like to know more details about any of the arbitral seats or any of the institutional rules referred to in this article, please feel free to contact one of the panellists directly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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