International Arbitration: 10 Key Challenges and Opportunities in 2018

Our new publication, Top Trends in International Arbitration for 2018, is a forward-looking, practical guide to the issues our global network has determined will be of critical importance to our clients in the year ahead.

Following a turbulent 2017, a number of legal, political and economic forces continue to shape the complex world in which our clients operate, giving rise to 10 key challenges and opportunities in 2018:

• Investor-state dispute settlement in the age of Trump. With the re-emergence of protectionism in the West and retrenchment from multilateralism in the US, investor-state dispute settlement remains the subject of intense debate.
• Bilateral investment treaties: rebalancing between ‘the West’ and ‘the rest’. The shift in political and economic power from Western states to emerging economies is changing the type of claims we see in international arbitration, with a marked increase, for example, in claims in which both the investor and host state are from traditionally capital-importing states (‘South-South’ claims) or from capital-exporting states (‘North-North’ claims).
• Arbitration in the age of Brexit. As the negotiations continue on the UK’s exit from the European Union and the future framework for the enforcement of court judgments remains uncertain, parties may turn to arbitration and the security of the New York Convention on the Recognition and Enforcement of Arbitral Awards to mitigate Brexit-related enforcement risks.
• China’s Belt and Road initiative: opportunities and risks. As the initiative continues to gather momentum, its impact for Asia and beyond will be far-reaching. With thousands of related infrastructure projects now in progress, we can expect an increase in the number of disputes, with a likely focus on Hong Kong and Singapore as arbitral seats.
• Intellectual property arbitration. The fast pace and sheer scale of digital transformation is likely to give rise to disputes, as seen with the recent increase in intellectual property arbitrations, an emerging trend that is set to accelerate.
• Gender diversity in arbitration. The Equal Representation in Arbitration Pledge has evolved rapidly from a proposal to tackle the under-representation of women in international arbitration to an award-winning global campaign that has put the issue of gender diversity firmly on the agenda. 
• Third-party funding: beyond the traditional model. The funding of arbitration claims has entered the mainstream, with increasing numbers of claimants offsetting the multi-year exposure of capital through bespoke funding arrangements.
• Arbitrating international tax disputes: what next? While tax-related disputes have become a prominent feature of commercial and investment treaty arbitration in recent years, the resolution through arbitration of state-to-state disputes arising under international tax treaties is an emerging trend.
• Summary dismissal gains ground. The increasing ability to defeat meritless claims at an early stage of arbitral proceedings may attract more financial institutions to international arbitration.
• The transformative potential of technology. Technology is driving change in international arbitration, with data analytics powered by artificial intelligence having the potential to affect every stage of the arbitral process, including arbitrator selection.

We look forward to facing these challenges and opportunities with our clients in the year ahead.

 If you would like to find out more about these key issues, please contact the international arbitration group.