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IAA Conference questions if international arbitration is in jeopardy

April 06, 2018

Lena Šutanovac LLM ’ 18

Is international arbitration in jeopardy? More than twenty eminent practitioners and academics met at Penn Law last week to discuss this most pressing of questions. Over 150 students from Penn Law and other universities, together with many practitioners from the Philadelphia, New York and Washington DC markets, attended the day-long conference hosted by the Penn Law International Arbitration Association.

They met in the wake of a year in which arbitration has come under sustained attack. Eminent judges in the UK have criticized the ousting of national jurisdiction; politicians in America have threatened to tear up treaties which allow for investor-state dispute mechanisms; courts in Mexico have indicated a willingness to peer through the veil and allow appeal of arbitral awards on the merits.

Despite such uncertain political context, participants at the conference were nearly universally confident about the future of international arbitration. This confidence was rooted in the overwhelming growth of arbitration: over the last few years it has ballooned in popularity, responding to the needs of parties, unaffected by political and social debates. So long as it can offer greater speed, lesser expense and greater certainty than traditional litigation, the speakers generally agreed that there will always be a demand for arbitral services.

Participants also discussed interesting developments in the technological security within institutions and between parties. The ingenuity of certain participants to attempt to gain the upper-hand in arbitration through the use of technology including social media hacking, long-lens cameras, and recording devices, was brought starkly into focus by several interesting ‘war stories’ told by the practitioners in the room.

A third panel discussed the political backlash against Investor-State Dispute Settlement mechanisms. This elicited strong debate among an incredibly distinguished panel of trade and investment lawyers, bringing in a variety of perspectives from a range of practitioners, interests, and geographies.

The keynote address by Professor George A. Bermann discussed the startling discrepancy in views about arbitration between those who participate in the system and those who are simply looking at it form the outside. He suggested that ultimately there needed to be a trade-off in interests between parties; that the arbitration system will not necessarily suit all political persuasions, but that the system can be designed in such a way as to reduce objections certain parties hold. This should be done, in the Professors’ view, in a way which is most positive for arbitration as an institution.  The Professor also gave a fascinating insight into the discussions within the authors of the Third Restatement of U.S. Law of International Arbitration. He posed the fascinating question, left for the audience to discuss: are there certain extrinsic values which we should prioritize above the interests of arbitration generally?

The future trends for international arbitration? Speakers predicted the fight against corruption through arbitral mechanisms; increasing nationalism another factor which will result in increased scrutiny for arbitral institutions. Arbitration may also face competition from mediation; a method which benefits from the speed and affordability which arbitration historically had as its sole preserve. The main trend predicted? That arbitration would continue to thrive despite the challenges it will face.

The organizing team, led by LLMs Derin Coker, Avantika Panwar, Shoyurendu Ray, Lena Sutanovac, and Florence Vanhulle, were delighted by the success of the day and the plaudits received from participants and attendees. Given this success, one can expect the 3rd International Arbitration Conference to be held next year.


Watch the recording of the day-long event below.