We are pleased to share our forward-looking and practical guide, International arbitration: top trends in 2020.
In the fifth edition of this annual publication, we consider the implications of COVID-19 on the practice of international arbitration as well as highlighting the other key issues that our global network expects to shape the arbitration landscape this year.
Our guide explores some of the challenges and opportunities arising out of these developments and highlights certain steps that companies can take to protect themselves in 2020 and beyond.
- COVID-19: the global pandemic is already causing widespread implications for investors, States and other commercial actors. The practical impact on international arbitration is evident with changes to procedural timetables and hearings required to minimise the need for in-person contact. The arbitration community is well placed to adapt to the evolving needs of the situation given the flexibility of the system and the technology that exists.
- Global warnings: global trading dynamics continue to present challenges for our investor clients. Geopolitical instability, evolving regulatory regimes and increasing resort by States to fiscal and other measures to squeeze investors, show no sign of abating during 2020. We outline some of the key concerns for investors and highlight ways in which clients can protect their investments in this volatile climate.
- Reforming investor-State dispute settlement: investor-State arbitration has been subject to many changes as ISDS reform efforts continue. We analyse the current status of reforms across the globe and consider what this means for the future of investment arbitration.
- Brexit – an arbitration perspective: Brexit will not impact arbitrations seated in London and arbitral awards will continue to be enforceable under the New York Convention. For UK investors, however, Brexit-related uncertainties in the UK’s future trading arrangements will persist through 2020 as the deadline for reaching a deal with the EU, and for securing new trading agreements with third countries, is extended to 31 December 2020.
- Digging deeper: we shine a spotlight on mining arbitrations and analyse specific trends affecting the sector. Mining companies are increasingly the target of resource nationalism measures by States through increased taxes, royalties or revised regulations and customs controls. Environmental and human rights issues are likely to be raised with increasing regularity as States wrestle with the balance of sustainable development.
- Data protection and cybersecurity: data protection and cybersecurity are gaining more prominence in international arbitration and we expect this to continue in 2020, not least because the threat of significant fines has proved real. Welcome industry guidance is being published, and we should see increased awareness of personal data and cybersecurity issues as well as heighted efforts to ensure compliance.
- AI and digitalisation: the growing desire to increase the use of Artificial Intelligence (AI) and other digital tools to aid the arbitration process, together with the expanding availability of AI-driven tools currently on the market and being developed, should lead to an increasing use of such technology in the coming year and beyond. This is likely to be accelerated by COVID-19, particularly as regards the use of technology to facilitate virtual hearings.
- Broadening role of the courts: the final month of 2019 saw the courts in two critical jurisdictions – the United States and China – demonstrate an increased willingness to act in aid of international arbitration. While the limits of these developments have not been fully tested, they create opportunities going forward for arbitrations involving parties from the world’s two largest economies.
- The need for speed – post M&A disputes: new and evolving tools for resolving post M&A disputes quickly and efficiently – including expedited procedures, summary dismissal and emergency procedures – are expected to lead to an increase in the proportion of high-value cross border deals that include arbitration clauses, and of post M&A and shareholder disputes that are referred to arbitration.
- Global projects: global projects can give rise to multiple and complex disputes. While these are well-suited to and commonly referred to international arbitration, we expect to see a renewed focus on increased efficiency and use of ADR, including mediation, as the arbitration community respond to the findings and recommendations of two recent studies focussed on construction industry arbitration.
- More diverse and greener arbitrations: calls for more diversity in international arbitration are not new but continue to gain momentum. We are seeing gender diversity efforts leading to positive results in terms of female appointments, and initiatives to address other forms of diversity increasing in prominence. The call for greener arbitrations took a significant step forward in 2019 and we expect to see the trend growing in importance in 2020 and beyond, reflecting increased global momentum and awareness of climate change issues more generally.
If you would like to find out more about any of these topics, please contact one of us, or any of our colleagues in the international arbitration group.