Yesterday, the all-party parliamentary group (APPG) for alternative dispute resolution held a three-hour session as part of an inquiry on London’s future as an international dispute resolution centre, with the Chartered Institute of Arbitrators (CIArb) as secretariat. Jonathan Wood, head of international arbitration at RPC and CIArb chair of the board of trustees, kicked off witness statements by highlighting the strengths of English law as seen to be “a fair system, incorruptible and flexible,” citing also the CIArb London principles and high overseas usage levels among the reasons why London has a strong position to protect. Paula Hodges QC, head of global arbitration practice at Herbert Smith Freehills and vice president of the LCIA Court, said “London does have to hold on to its position.” The session panel comprised parliamentarians John Howell, chair of APPG for ADR, Christina Rees, vice-chair of APPG for ADR, and John Spellar, chair of APPG for Singapore and APPG for transatlantic trade. The two sessions were “The current landscape – why is effective dispute resolution imperative for trade and investment and what makes London a leading dispute resolution centre?” and “Challenges and opportunities for London’s leading status in dispute resolution.”

Perceived Brexit threat

Audley Sheppard QC, LCIA board chair and global co-head international arbitration at Clifford Chance, noted a number of threats to London, including growing assertiveness from competing legal systems in Asia and potential loss of influence by British banks in the global economy. On the issue of Brexit, witnesses agreed with Lucy Greenwood, an independent arbitrator and CIArb trustee, that “threats may be more perceived than real,” adding “we hear people are concerned about it, but even the perception can be enough.” Witnesses stressed London has to be united and give “a powerful message post-Brexit that it will be business as usual,” Ms Greenwood said. Paris and Asia are seen as the main seats looking to take business from London, though Mr Sheppard suggested that whilst Singapore was full of announcements not much was happening in reality, suggesting the “build it and they will come” approach of Singapore would not work in the arbitration space. Witnesses also agreed, closer to home, that Ireland while becoming more competitive is “not as far advanced as London,” Ms Hodges said.

Changed legislative approach needed

Critical of suggestions the Arbitration Act 1996 should be watered down to reduce confidentiality, “clients do not want their cases contributing to making English law, they are definite on that,” stated Ms Greenwood, adding that while the threat of amending the act “has receded” the threat nevertheless remains. Ms Hodges noted in the legislative drafting process generally, more attention should be paid to alternative dispute resolution, because “when new legislation is being introduced the court system is covered but arbitration is often forgotten about, forcing the arbitration community to make representation after the fact.” Ms Greenwood also made a plea for smaller disputes to get more attention, and argued there was a big potential here that should not be ignored by London and UK legislators. Visas for witnesses, which have become a major issue between the US and South America due to policies of the Trump administration, is also a problem needing to be addressed by the UK, as there have been problems. Facilities in London also came under scrutiny, with Ms Hodges making a plea for improved facilities at the LCIA, which are far behind the standard of facilities in competing centres.

Fewer risks

Session comments echoed last week’s CIArb annual general meeting, address by Lord Neuberger, who became an international arbitrator at One Essex Court after retiring from presidency of the supreme court of England and Wales. He said given the type of Brexit is still unclear, it is difficult to identify specific risks to London as a centre for arbitration, but that there must be fewer risks the closer the ongoing relationship with the EU.  Any negative effects of Brexit are likely to be reputational as in some quarters it may be viewed as undermining the UK’s traditionally international outlook.  This might affect whether arbitration professionals wish to base themselves in London.  However, there may be  benefits from Brexit.  For example, the enforceability of awards depends on the New York Convention, which is unaffected by Brexit, but judgments of courts in the UK may prove more difficult to enforce in the EU post-Brexit when mutual enforcement arrangements no longer apply.  This could make arbitration more attractive than court proceedings.  After Brexit, courts in the UK may be able to stay litigation even in EU countries, which is not possible now.  This would be an advantage for London compared with Stockholm or Paris, as problematic EU case law would not apply.