3 November, 2012

 

Legal News & Analysis – Asia Pacific – Singapore – Dispute Resolution

 

This is an extract of a paper delivered by Cavinder Bull, SC, in September 2012 at the International Construction Conference in London jointly organized by the UK Society of Construction Law, The UK Technology and Construction Solicitors’ Association and Technology & Construction Bar Association of UK. Cavinder was invited to address the Conference on the subject of International Advocacy. 
 
There has been a significant increase in the number of international arbitrations in Asia in the last 5 years.  In Singapore, for example, the Singapore International Arbitration Centre handled 188 new cases in 2011, more than double the 90 new cases which it handled in 2006 and nearly triple the 64 new cases which it handled 10 years ago, in 2001. 
 
In particular, construction arbitrations are on the rise.  This is a natural consequence of the continued economic growth in many parts of Asia which has resulted in more construction and infrastructure development. Arbitration is the established mode of dispute resolution for the disputes that inevitably arise from such projects, especially when they are international in nature. The sizes of the construction disputes in Asia also continue to increase with the average amounts in issue growing rapidly.  The types of dispute that have been referred to arbitration cover the full range of construction and engineering, from commercial and residential buildings to roads, tunnels, and bridges, in numerous countries across Asia. 
 
This increase in economic activity comes at a time when Asian businesses and Asian economies have significant bargaining power.  This has resulted in Asian parties having a greater say in respect of the venue of the arbitration, the rules to be applied and even, though to a lesser extent, the choice of law.  Asian businesses and corporations which were in the past content to agree to arbitration in more established arbitration venues 
 
like London and Geneva are now more likely to insist on arbitration closer to home. This has resulted in more arbitrations being held in places like Singapore, Hong Kong and Malaysia.  
 
Some of these venues have invested heavily in arbitration infrastructure; Maxwell Chambers in Singapore being the most obvious example.  This is a dedicated arbitration facility in Singapore which houses state of the art arbitration hearing rooms, and where a host of arbitration relevant services are available including, for example, translation and transcription services. 
 
The increase in the number of arbitrations being held in Asia has been accompanied by a noticeable and perhaps natural increase in the number of arbitrations where Asian arbitrators are appointed to arbitral panels.  Some arbitral institutions are well known to prefer appointing, if possible, a presiding arbitrator from the seat of the arbitration.  This is usually explained as being useful since the presiding arbitrator will then tend to have some knowledge of the arbitration laws applicable in the country where the arbitration is likely to take place.   
 
Moreover, Asian corporations are more willing today than say 10 years ago to appoint an Asian arbitrator, not so much out of parochialism but because they believe that an Asian arbitrator will understand the evidence of Asian witnesses and the perspectives of an Asian business dealing with challenging projects in developing countries. 
 
All this therefore means that the arbitration advocate should expect to face a multinational arbitral panel.  In particular, the advocate should anticipate addressing and be prepared to address arbitrators who are from Asia or who live and work in Asia. The Asian contexts of many of these arbitrations grow in significance with the addition of arbitrators who themselves will approach these disputes from an Asian perspective. 
 
There is of course a central core of such work which has no cultural nuance, Asian or non-Asian.  A written agreement says what it says and if the governing law is English law or New York law (as it often is), it makes no difference whether the contract is to be performed in Singapore or Manchester. Likewise, expert evidence on the capabilities of various machinery will not differ depending on which continent they are being operated in. The main thrust of the construction arbitration practitioner’s work will remain the same and his or her skills may be deployed usefully regardless of where the seat of the arbitration is and regardless of where the construction or engineering project is located. 
 
However, it is important to realise when arbitrating in places like Singapore, Hong Kong or Beijing that there are cultural differences and historical perspectives that will subtly define how an Asian arbitrator hears what an arbitration practitioner has to say in submission.  Such subtle interplay also defines what an Asian arbitrator may take away from the cross-examination of an Asian witness. The arbitration practitioner who is unaware of such dynamics may be putting all the “right” questions and may believe that he or she is getting all the “right” answers, only for the arbitrators with a deeper knowledge of Asia, taking away quite a different message from the exercise. 
 
As advocates, we know that it is not what we say that matters, it is what the adjudicator hears us say that counts. Persuasion sounds not in our own voices, but in the ears of those we seek to sway. 
 
In the international context of cross-border arbitrations, there are a host of “war stories” about the culturally insensitive or culturally naïve.  There have also been significant writings on the subject.  For example, Robert l Gegios and Stephen D R Taylor write about how the evidence of a fluent but non-native English speaker may well play out in a cross-cultural situation (Robert L Gegios and Stephen D R Taylor, ‘Cross-Cultural Understanding: An Essential Skill in International Advocacy’ in Anita Alibekova and Robert Carrw (ed), International Arbitration and Mediation – From the Practitioner’s Perspective (Yorkhill Law Publishing 2007):
 
 “A fluent English-speaking Japanese witness is likely to use less direct expressions in accord with a cultural aversion to public conflict. Further, he or she is perhaps looking at the hearing as part of wider business relationships, which may be best served by downplaying any conflict in the hope of minimizing future fallout. In addition to differences in phraseology, he or she is likely to apply indigenous delivery style, including use of pauses and accents. The result may  convey a very different literal interpretation to a native-speaking audience. Further, that audience may draw differences from non-verbal [cues] such as eye contact, arm crossing and so forth. There may be no recognition that these have a completely different meaning in the culture and mind of the speaker. The result may be an assumption of disingenuousness, or other similarly harmful onclusion, when in fact none existed.”  
 
In this hypothetical, the cultural sensitivity of the native-speaking audience is critical; whether this audience refers to the counsel conducting the cross-examination or the arbitration panel (See also: The Importance of Recognising Cultural Differences in International Dispute Resolution, Karen Mills, J.D., FCIArb., Chartered Arbitrator, adapted from a paper presented at the Chartered Institute of Arbitrators, Malaysia Branch International Arbitration Conference, held in Kuala Lumpur, 31 March – 1 April, 2006.)
  
With the increase of Asian representation in arbitral panels, it is less likely today that arbitral tribunals in Asia will be culturally ignorant when compared to what one might have encountered 10 years ago. It is thus even more important that arbitration counsel not be left behind. 
 
In the hypothetical of the Japanese witness, the end result might not be that insensitive arbitrators misinterpret the evidence of the witness.  Rather, the danger is that advocates practicing in that environment may fail to appreciate exactly how the evidence is being perceived by the arbitrators. 
 
The counsel conducting the cross-examination in the hypothetical may conclude his crossexamination believing that he has seriously damaged the evidence of the Japanese witness, not realising that the culturally sensitive arbitration panel, one of whom is from London, another from Japan and a third from Singapore, may fully understand the Japanese witness’ “use of pauses and accents” as the perfect response to the line of questioning.  In fact, were that witness to have given an articulate verbal rebuttal, the tribunal may well raise an eyebrow and hear in that not the words of a truthful witness but the sound of his lawyer’s voice.   (See also: The Importance of Recognising Cultural Differences in International Dispute Resolution, Karen Mills, J.D., FCIArb., Chartered Arbitrator, adapted from a paper presented at the Chartered Institute of Arbitrators, Malaysia Branch International Arbitration Conference, held in Kuala Lumpur, 31 March – 1 April, 2006).
 
For the advocate, understanding the perspectives of the adjudicator is crucial.  It is the adjudicator who we seek to persuade. As international arbitration advocates face more Asian faces in arbitral panels and cross-examine more Asian witnesses, we need to understand how Asian businesses are run and the factual contexts of the Asian projects that may be the subject matter of dispute. Most of all, we need to make efforts to understand how a growing cohort of Asian arbitrators will react to the exercise of our craft.  That will significantly improve our effectiveness as advocates seeking to assist our clients in the growing number of arbitrations in Asia. 
 
 
For further information, please contact:
 
Cavinder Bull, Director, Drew & Napier
cavinder.bull@drewnapier.com
 

 

 

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