Principles of American Procedural Law “Creeping In” to International Arbitration Dr. Manfred...
-
Upload
paula-maxwell -
Category
Documents
-
view
218 -
download
0
Transcript of Principles of American Procedural Law “Creeping In” to International Arbitration Dr. Manfred...
Principles of American Procedural Law “Creeping In” to International Arbitration
Dr. Manfred Heider
Introduction
We lawyers have often invoked „cultural differences“ to mean a clash of legal processes such as the different procedures used in civil and common-law countries. More recently „cultural differences“ have been invoked by both civil and common-law practitioners to criticize – with some justification – the use by U.S. attorneys of litigation-style procedures in the arbitration forum that expand time and costs of the arbitration process … But another cultural development that has the pendulum swinging in the other direction seems to have gone virtually unnoticed. That is the growing impact of international norms on arbitration practices …
William K. Slate II, President and CEO of the American Arbitration Association, ICCA Congress 2004, Beijing, China
Dr. Manfred Heider
Different Legal Systems
Legal Culture – Legal Traditions
Legal Culture: develops from religious, political, economic and cultural elements
Legal Traditions and Systems: build on traditional legal sources and their application (e.g., Roman Law, Canon Law, Ancient Germanic Law)
Dr. Manfred Heider
Different Legal Systems
Common Law
Predominant to varying degrees in:
The United States, Great Britain, anglophone Africa, India and Pakistan
Civil Law
Predominant to varying degrees in:
Continental Europe, francophone Africa , Latin America, Japan, China, Indonesia
Dr. Manfred Heider
Different Legal Systems
Common / Civil Law Hybrids:
Scotland, Quebec, Louisiana, Sri Lanka, South Africa;
Israel (also influenced by Talmudic tradition)
Dr. Manfred Heider
Different Legal Systems
A couple of basic differences:
Common LawPrinciple of Party Representation - Inductive Reasoning - Case Law - “Ultimate Truth” (complete truth)Civil LawInquisitorial Principle - Deductive Reasoning - Statutory Law - “Judicial Truth” (high probability)
Therefore: Different understanding of the roles of judges and party representatives
Dr. Manfred Heider
How did the “creeping in” come about?
• Globalization of trade
• Increasing importance of arbitration in dispute resolution
• Arbitration is frequently the lowest common denominator for partners from differing legal systems
• Arbitrators must be flexible and find a compromise solution to questions of procedure
Dr. Manfred Heider
In which stages of the proceeding are US-principles creeping in?
• The commencement of the proceedings
• The taking of evidence
• The hearings
• The legal evaluation
• The award (costs)
Dr. Manfred Heider
Commencement of the Proceedings
Common Law
Cursory “Notice Pleading”, No document submissions
Civil Law
Submission of complete legal and factual arguments, Document submissions
Prevailing Practice
Depends on the arbitrator – predominantly Civil Law Approach
Dr. Manfred Heider
Taking of Evidence
Preliminary note: What is Discovery?
United States:
Discovery is defined as pre-trial devices that can be used by one party to obtain facts and information about the case from the other party in order to assist the party‘s preparation for trial. (Black‘s Law Dictionary 466, 6th ed. 1990)
United Kingdom:
Discovery is the disclosure and production of contemporary documents for inspection by the other party. (David St.J. Sutton, Discovery and Production of Evidence in Arbitral Proceedings, ICC, 1989)
Dr. Manfred Heider
Taking of Evidence
Common Law (US)
Discovery (Rules 26-37 Fed.R.Civ.P.):
Production and inspection of documents, Written interrogatories, Witness depositions, Requests for admission
Civil Law
Discovery light ? (e.g., öZPO §§ 303 et seq., dZPO §§ 422 et seq.)
Prevailing Practice
Discovery is limited by IBA Rules on Taking of Evidence in International Commercial Arbitration Art. 9 (2) and “Redfern Schedule.” Non-compliance is subject to the free consideration of evidence.
Dr. Manfred Heider
Taking of Evidence
“Redfern Schedule” (Prof. Alan Redfern)
Parties are to fill out a four-columned table:
1.Documents (or document types), whose production is demanded by the opponent;
2.Reasoning for the demand;
3.Objections to the demand;
4.Reasoned decision by the tribunal
Dr. Manfred Heider
Aside: Discovery Orders by United States
Federal Courts for foreign arbitrations?
28 USC § 1782 (United States Code):
Assistance will be offered when the proceedings for which the information is sought are adjudicative in nature
Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) : U.S. Supreme Court broadens the scope of§ 1728.
First instance of assistance to an international tribunal was in 2006:
Oxus Gold PLC (ad-hoc UNCITRAL, BIT U.K./Kirgizstan)
Roz Trading Ltd. (VIAC)
Dr. Manfred Heider
Taking of Evidence
Common Law
Experts are appointed by the parties and subject to cross-examination
Civil Law
Experts are appointed by the court and submit a written report; Possible examination during the hearing.
Prevailing Practice
At the discretion of the tribunal, usually both types of experts are appointed.
Dr. Manfred Heider
Hearings
Common Law
Witness evidence preferred (generally under oath); Probative value of documentary evidence less than oral statements under oath
Civil Law
Documentary evidence preferred, Mistrust of witness evidence, Administration of oath to witnesses is the exception.
Prevailing Practice
Depends on the tribunal, usually a combination
Dr. Manfred Heider
Hearings
Common Law
Parties may serve as witnesses; cross-examination
Civil Law
Parties are not witnesses, no American-style cross-examination
Prevailing Practice
Submission of written witness statements, short examination, Parties make statements, cross-examination “light” as per IBA Rules Art. 8(4) (comp. öZPO), “Witness Conferencing” (simultaneous examination of multiple witnesses)
Dr. Manfred Heider
Hearings
Common Law
Generally a single hearing without adjournments; Judges not permitted to attempt settlement discussions; U.S. Court Room set up
Civil Law
Hearing over several dates; Judges encourage settlement discussions; U-shaped judge’s table
Prevailing Practice
Inconsistent. Arbitrators to be restrained regarding settlement discussions
Dr. Manfred Heider
Legal Evaluation
Common Law
Emphasis on case law, written analysis of the legal arguments with extensive citations from previous decisions, the most important points are pled orally
Civil Law
Emphasis on statutory law and legal commentaries; Pleadings regarding the legal arguments submitted in writing.
Prevailing Practice
Depends on the applicable law on the merits and the origins of the arbitrator. Overly extensive legal submissions become undesirable if they impede the speedy progress of the proceedings.
Dr. Manfred Heider
Legal Evaluation
Common Law
Evidence regarding legal issues under foreign law is usually presented by way of expert opinions, Exposition of favorable and unfavorable case law with an explanation as to why the favorable side wins.
Civil Law
Direct studies of the sources of law and legal materials
Prevailing Practice
Depends on the arbitrators
Dr. Manfred Heider
Costs
Common Law (US)
Generally no compensation for costs; Exception: when the defeated party acted unfairly or fraudulently or when governed by special legal norms
Civil Law
Costs follow the event
Prevailing Practice
Discretion of the tribunal (e.g., Vienna Rules Art. 31, § 609 ZPO), Moderated costs follow the event: Art. 28(4) LCIA-Rules
Dr. Manfred Heider
Conclusion
The great divide in international commercial arbitration is, in my view, not so much between the civil law and the common law traditions; it is between jurisdictions that favor and support arbitration and jurisdictions that are distrustful of arbitration. Sadly, the latter jurisdictions are often also jurisdictions where the rule of law is generally shaky. To work well, international commercial arbitration really needs the rule of law.
Pierre A. Karrer (Dispute Resolution Journal Feb-Apr 2008)
Dr. Manfred Heider