Black swans and transformative thinking: Australian Arbitration Week 2023

Summary

This year's Australian Arbitration Week was held in Perth from 8 – 13 October 2023 with attendees travelling from Asia, Europe, the United States, Africa, New Zealand and Australia to attend the over forty events organised by ACICA, other arbitral institutions, arbitral organisations, law firms and arbitrator's and barrister's chambers.

The event was the best-attended Australian Arbitration Week so far and Ashurst was represented at the main conference and at various events throughout the week by Georgia Quick (Partner, ACICA President and Head of the Australian International Arbitration practice); Arne Fuchs (Partner and Head of Public International Law & Investment Arbitration); Jeremy Chenoweth (Partner and ACICA Fellow); Bill Smith (Partner and Chair of the ACICA Practice and Procedure Board); Catherine Pedler (Partner); Matthew Blycha (Partner); Michael Weatherley (Partner); Luke Carbon (Senior Associate) and Thomas Gaffney (Senior Associate, and Chair of the ACICA ACT Committee).

In this update, we highlight some of the key themes for arbitration that emerged over the course of the week and that we expect to continue to be developed over the course of the coming months and years.

Black swan events and the International Arbitration Conference 2023

ACICA & CIArb's International Arbitration Conference was the lead event of the week. The theme of the Conference, referring to the Western Australian state emblem, was "Following a Black Swan: Transformative thinking and what comes next for International Arbitration". Conference participants discussed the black swan event of our time (the COVID-19 pandemic) and dispute resolution post-pandemic, including new ideas and advances in technology that have emerged.

Georgia Quick opened the Conference with the welcome address and introduced the keynote speaker, Kanaga Dharmananda SC (Quayside Chambers). Mr Dharmananda SC observed how arbitration could learn from black swan events in his address and suggested that steps should be taken to improve its adaptability in the future. Mr Dharmananda SC noted that the procedural flexibility of arbitration presents a great opportunity for parties to address unique challenges arising from their dispute with innovative solutions.

The Conference featured eight sessions ranging from the exploration of arbitration practice internationally and developments across continents in a session titled "Around the World and Back"  to insights from general counsel on their experience of arbitration in a session titled "General Counsel Roundtable". The general counsel discussion highlighted the importance of relationships with external counsel, the confidentiality of arbitration as a key benefit to arbitration, and the attraction of flexibility, speed and lower cost of arbitration relative to litigation (including by not "mimicking" litigation processes in arbitration).

The Conference also included a session titled "Environmental, Social and Governance (ESG): Corporate Responsibility or State Responsibility?" that considered how investor and commercial rights could be balanced against the public interest and ESG obligations, as well as a session titled "Arbitration New Frontiers: AI, Sustainable Practices and Other Ideas" that considered the role of artificial intelligence in arbitration and the role of the arbitration community in contributing to climate change initiatives.

Discussions about how to optimise the arbitral process continued over the week, including at a workshop hosted by Clifford Chance titled "ACICA Practice & Procedures toolkit: Cutting edge tools for timely, cost effective and fair arbitral proceedings". The workshop featured speakers Bill Smith, Jo Delaney (Partner, HFW), Mark Mangan (Partner, Dechert), Caroline Swartz-Zern (Counsel, ACICA) and Suzanne Spears (Founder, Paxus LLP). ACICA also hosted a session titled "Arbitrator Roundtable" during which best international practice on key aspects of an arbitration – from pre-appointment to drafting of an enforceable award – was discussed. The roundtable was chaired by Deborah Tomkinson (Secretary General, ACICA) and the speakers were Georgia Quick, Matthew Gearing KC (Quayside Chambers), Brenda Horrigan (Independent Arbitrator), Professor Doug Jones AO (Sydney Arbitration Chambers), Dr Sam Luttrell (Partner, Clifford Chance), Lucy Greenwood (Greenwood Arbitration) and Lucy Martinez (Martinez Arbitration).

Investment risks and investment arbitration

Many events over the course of Australian Arbitration Week explored the role of investment protections, their obstacles, and potential solutions to overcome those obstacles.

Cross-border investments are inherently exposed to political risks. Catalysts for political (and regulatory) change include nationalism and "de-globalisation", climate change, the energy transition, digitalisation, supply chain crises, and military conflicts.  Companies with international investments and operations should therefore carefully examine existing and future political risks and determine how best to protect their foreign investments.

Ashurst hosted a panel discussion moderated by Catherine Pedler on "Protecting foreign investment in times of unprecedented disruption?" featuring panellists Arne Fuchs and Judith Levine (ACICA Vice President and Independent Arbitrator). The panel discussed geopolitical trends, such as nationalisation, and how public international law can balance between protecting investors' rights and respecting state sovereignty. The panel also considered why international investors need to understand the benefits and limits of investor-state dispute settlement, as well as what other investment protection tools are available to them, including political risk insurance, government contracts, and crisis management.

Technology and artificial intelligence

The use of technology in arbitration has changed profoundly since the onset of the pandemic. It could be said that there has been a paradigm shift, with many procedural conferences and hearings now taking place virtually and greater use being made of electronic case file management systems. In that time, significant advancements have also been made in artificial intelligence. The launch of ChatGPT is a notable example. Generative artificial intelligence models like ChatGPT have the ability to understand, interpret, and generate persuasive language. Greater use of technology, including artificial intelligence, by arbitration practitioners is inevitable and the challenge will be in how these innovations are put to use appropriately.

Luke Carbon moderated a panel discussion on this topic with Lachlan McCalman (Chief Practitioner, Gradient Institute) and Natasha Blycha (Partner, Stirling & Rose) titled "Harnessing Generative AI: Large Language Models as Catalysts for Innovation in Arbitration". The panel discussed the potential for generative artificial intelligence to assist in almost all stages of arbitration from drafting legal documents, analysing complex contracts and large data sets, and researching precedents to even preparing submissions and awards. Importantly, however, the panel also explored the risks currently associated with using generative artificial intelligence, and the balance between leveraging artificial intelligence for increased efficiency and upholding the principles of due process and fairness.

Climate change disputes

The rise of climate change disputes was a key theme of various events over the week. Climate change related litigation and arbitration has more than doubled since 2017 according to the Global Climate Litigation Report: 2023 Status Review by the UN Environment Programme (UNEP) and the Sabin Center for Climate Change Law at Columbia University.

Speakers explored the intersection of law and politics on climate change. It was observed by reference to recent court decisions and arbitral awards that transformations in this space, such as new technology and rapidly changing regulation, require commercial parties and lawyers to re-consider their approach to risk identification and allocation. Arbitration offers valuable strengths for these kinds of disputes given its advantages over litigation with greater flexibility, ease of enforceability, and the ability to select decisionmakers with the relevant technical knowledge. However, practitioners will need to consider public policy considerations and arbitrability issues that arise in climate change disputes.

Australia as a seat

The potential for Australia as a pre-eminent seat for international arbitration was another key theme of the week. Speakers observed that Australia has highly trained arbitration lawyers, particularly with specialist skills in the energy, resources and infrastructure sectors.

The pro-arbitration stance and quality of decisions of Australian courts when dealing with arbitration was also repeatedly raised as an advantage for Australian-seated arbitrations. In this regard, speakers noted that Australian courts understand and respect the particular role carved out for them in arbitration legislation – which, in Australia's case, includes giving force to the UNCITRAL Model Law. 

Reasons offered by panellists for Australia’s increasing popularity as a destination for enforcement included the efficiency of Australian court decisions and the relatively low associated legal costs.

Careers in arbitration

A number of well-attended events were held focussing on careers in arbitration for junior members of the arbitration community. Ashurst and the Asia-Pacific Forum for International Arbitration hosted an event titled "Sundowners with Sandgropers: Ashurst and AFIA networking event – pathways to a career in arbitration". AFIA provides a forum for young practitioners to discuss issues and developments in international arbitration with a focus on the Asia-Pacific region. Marina Kofman (Kofman Arbitration) shared insights from her experience graduating from law school in Australia to starting her own arbitration practice. It is clear that there is strong interest in careers in arbitration in Australia.

Doing evidence in arbitration better

In September 2023, ACICA (in conjunction with FTI Consulting) launched the 2023 Evidence in International Arbitration Report which presents the results of its second survey focused on expert, lay and documentary evidence. The Report indicates that evidence has a significant impact on case outcomes and considers those impacts. The Report also covers key trends, including sustainability and equal representation.

ACICA presented the Report at the "Doing Evidence in Arbitration Better: Presenting the 2023 Evidence in International Arbitration Report" event. Discussion of the findings of the Report was chaired by Brenda Horrigan (Independent Arbitrator). The panel featured arbitrators, experts and counsel – Georgia Quick, Minoshi De Silva (Special Counsel, KWM), Victor Ageev (Senior Director, FTI Consulting), Kanaga Dharmananda SC (Quayside Chambers) and Martin Cairns (Managing Director, Sapere Forensic).

The panel agreed that the great advantage of arbitration in comparison to litigation is its flexibility and efficiency, and the challenge lies in making the most of those strengths. All panel members acknowledged that there was room for improvement to conduct the evidence element of arbitral proceedings in a more environmentally sustainable way.

The potential use case for unconventional approaches to evidence such as concurrent lay evidence was examined in a session titled "What's Next? Hot tubbing witnesses of fact and costs of arbitration – drive for greater efficiency" which was hosted by the Lighthouse Club Australia. In this session, speakers participated in a mock arbitration hearing which showed the progression of arbitration using traditional methods and then with concurrent lay evidence using a Simpsons based scenario. The speakers at the session were Georgia Quick, Michael Whitten KC (List G Barristers and former Lord Chief Justice of the Kingdom of Tonga), David Ulbrick (Partner, Pinsent Masons) and Alexandra Einfield (Senior Associate, Corrs Chambers Westgarth).

Ashurst international arbitration group

Ashurst’s global team of arbitration lawyers has extensive experience in developing dispute management strategies as well as conducting complex arbitration proceedings for our clients. We act in commercial and investment arbitrations.

Our international arbitration team comprises over 100 lawyers across 18 offices. Despite the geographic breadth of our practice, we operate as a single global team. Our common and civil law lawyers regularly work together on complex, high value arbitrations. We also regularly work alongside our clients’ preferred local lawyers on a co-counsel basis.

“The team is amongst a very small group of genuine arbitration (international and domestic) specialist groups in Australia. A team that focuses on technology in the arbitral process to streamline preparation and reduce cost.” 

Dispute Resolution: Arbitration, Legal 500 Asia-Pacific Australia, 2023

Authors: Luke Carbon, Senior Associate; and Christina Han, Lawyer.