SUNDRA RAJOO

Slide 1: SUNDRA RAJOO Director Kuala Lumpur Regional Centre for Arbitration

“Developing the Asia-Pacific Region as a Centre for International Dispute Resolution” Four Seasons Hotel, Sydney 15th October 2010

Slide 2:One of the fastest growing core regions of the world, with progressive restructuring or production linkages, trade relations and foreign investments representing a transitional phase occurring in the broader restructuring process in the world economic system Includes East Asia, Southeast Asia, Australia and Oceania Asia and the Pacific are more economically integrated with the rest of the world than it is with itself

Slide 3:Klein (1989: 27) summed up: “The economic centre of gravity has moved eastward. During the next decade or two, I expect to see the centre squarely in the Asian-Pacific area. There will be more nations classified as having advanced (developed) industrial status.”

Slide 4:Asia –Pacific region has a strong manufacturing market due to the availability of cheap labour Manufacturing market includes huge amounts of textiles, electronics, automotive products, heavy equipment and consumer durable goods Import and export volume in the Asia-Pacific region show a large web of international ties between this region and the rest of the world

Slide 5:Increased economic openness of China, its accession to WTO and surge in exports across the region has created unprecedented opportunities for trade This led to the increase in economic developments and investments in the Asian region, and between the East and West Increasing risk of businesses being sued in foreign jurisdictions where commercial rights and obligations are subject to unfamiliar laws and procedural processes.

Slide 6:Defined by Ambrose Bierce as “…the substitution of many burning questions for a smoldering one.” ICC defines it as “…to provide for the settlement by arbitration of business disputes of an international character”. Article 1(3) UNCITRAL Model Law defines it as “…internationality arising from parties having their places of business in different states and the place with which the subject-matter of the dispute is most closely connected may be foreign to the parties

Slide 7:Business complications of working across borders Unfamiliarity of SME’s with legal and judicial environment of the proposed investment country Insufficient funds to invest for legal advise Encouraging trade and investments by ensuring simplicity in access to dispute resolution S.Jayakumar, “…booming and increasing sophistication in Asian economies” Increasing integration of global markets Increased demands for neutral dispute resolution forums that are international in scope

Slide 8:Asian advocates of arbitration have in recent years been engaged in a serious exercise centre of institution building One of the latest plans to set up a Commercial Arbitration Centre in Cambodia has gained support from The World Bank and IFC Arbitral institutions in Asia Pacific have been promoting their centers' and the net effect would be visible within the next 5 years or so.

Slide 10:The three main bodies are AALCO (Asian-African Legal Consultative Organisation), APRAG (Asia Pacific Regional Arbitration Group) and RAIF (Regional Arbitral Institutes Forum) E.g. Recently, KLRCA has won the bid to host the upcoming APRAG Conference in June 2011. This gives KLRCA, which is an AALCO based arbitral institution, an opportunity to be the APRAG Secretariat.

Slide 12:The ASEAN charter was on the 20th Nov 2007 to oversee dispute settlement mechanisms Salient features of the Protocol: Tight time lines for consultations, response and completion Good offices, mediation or conciliation may be provided by the Chairman of ASEAN or Secretary-General of ASEAN, acting in ex-officio capacity May only resort to arbitration under certain circumstances

Slide 13:Cont’ Arbitration to be conducted under the terms and Rules of the Protocol which may be modified subject to the agreement of disputing parties. The award of arbitral tribunal is final and binding on disputing parties Progress to be monitored through status reports submitted to the Secretary-General of ASEAN The Protocol is still unfit and not fully structured as a means of settlement on a regional basis

Slide 14:Cont’ Work such as complete and concise rules for reference to the ASEAN Summit and other instruments has to be completed as soon as possible The Protocol should be ratified soon to enhance the region’s capabilities in managing international disputes but also to address and overcome the current shortfalls of being able to function as an international dispute resolution centre

Slide 15:Efforts to make alternative dispute resolution a mandatory condition precedent to litigation Already condition precedent concerning matrimonial or family matters, construction, banking, insurance and maritime matters The existing legal system is not capable of coping with the ever increasing burden of civil litigation Mandatory ADR prior to litigation would ensure submit to a preferred ADR method In Malaysia for example, it is a condition precedent concerning a petition for divorce The refer to a Marriage Tribunal who will attempt to conciliate

Slide 16:Cont’ Systemic change possible by incorporating a provision respective to civil procedure codes across the region on arbitration or ADR as a condition precedent to litigation or invoking practice direction for national courts In Malaysia, Practice Direction No.5 of 2010 was issued concerning mandatory ADR prior to litigation. Same practice also followed in United States of America and Australia

Slide 17:Cont’ National courts should take a less interventionist approach concerning arbitration and will lead to greater autonomy Curtail judicial intervention by amending legislations governing arbitral proceedings. E.g. as provided in the UNCITRAL Model Law in Article 5.

Slide 18:International commercial arbitration can only work effectively if supported by appropriate systems of law and legal systems 4 types: Law that governs recognition and enforcement of arbitral agreements Law that regulates the actual arbitral proceedings Law that the arbitral tribunal must apply to substantive matters Law that governs recognition and enforcement of arbitral awards

Slide 20:In Nov 2008, Australia’s Attorney General announced its government’s intentions of reviewing their Arbitration Act 1974 It was targeted at overcoming the inconsistencies or irregular approaches of international arbitration within the ambits of various Australian states Regional oneness can be very well established through unified international laws and legislations Hong Kong, their existing Arbitration Ordinance provides separate regimes to cater for the conduct and performance of domestic and international arbitrations carried out locally

Slide 21:Cont’ A proposed Arbitration Bill in Hong Kong if passed, is aimed at making its legislation more user friendly and approachable In Singapore, the Arbitration (Amendment) Bill will serve to amend and supplement the current Arbitration Act of Singapore whilst empowering their courts to aid arbitration wherever possible All other relevant countries should follow suit This will enable the region to function as a hub for international dispute resolution by satisfying regional unity despite differences in economic developments, industrial growth and financial stability.

Slide 22:Establish a set of common arbitration rules to resolve international disputes on a regional platform E.g. the Asia-Pacific Arbitration Rules Hong Kong International Arbitration Centre (HKIAC) possesses the Arbitration Ordinance (in Chapter 341 of the Laws of Hong Kong) which is recognised as one of the most advanced arbitration statutes in the world Kuala Lumpur Regional Arbitration Centre (KLRCA) was the first to adopt the latest UNCITRAL Rules on 15th August 2010

Slide 23:Cont’ These are examples to show efforts for betterment and improvisation of the current law and statues addressing the current problems in arbitration disputes These improvisation can be implemented into the a common set of regional arbitration rules Noteworthy that KLRCA in currently in the process of introducing its Fast Track Arbitration Rules, similar to summary judgments in courts, tailored to resolves the various types of international disputes

Slide 24:Joint training programmes by arbitral institutions in the Asia-Pacific region can achieve the paramount aims and objectives of attaining a regionalised arbitration regime To provide thorough understanding of practices and procedures of international arbitration Designed to cater for Asian-Pacific economic growth, ties and possible disputes that may arise Conduct well structured, monitored and professionally facilitated training modules Existence of overseeing authorities to ensure tutors and examiners are qualified academics or practitioners themselves

Slide 25:Cont’ To ensure participants obtain first hand experiences from professionals and know what exactly is required to make ADR the regional preferred method for resolving disputes Educate individuals on the nature and limits of arbitration and its treatment by the various Legal Systems of countries within the region Courses on arbitration and mediation must be methodical and thorough Conduct intensive classes comprising lectures, tutorials, discussions, workshops, practices and presentations Lastly, conducting examinations will ensure that participants are always “on the ball”

Slide 26:To expose individuals to foreign dispositions of disputes and resolving it Asia-Pacific compliments such an effort due to strategically located arbitral institutions across the region Carefully selected participants so that dispute resolution can be studied from diverse perspectives, e.g. legal or case counsels, work-force of the various AG’s Chambers Ability to address commonly faced issues in a local arbitration centre whilst seeking resolution in a foreign atmosphere Ability to acclimate to the legislation and judicial temperament of concerning foreign countries

Slide 27:Law faculties should make ADR subjects compulsory for graduating requirements to acquaint lawyers with it, especially in arbitration Ability to prepare future lawyers able to draft contracts with well thought of arbitration clauses Lawyers will be more positive towards dispute resolution through the various ADR methods Academic institutions throughout the region should attempt to extend law course with an additional semester dedicated wholly to study on ADR Future practitioners to be educated only resort to the courts only if necessary

Slide 28:E.g. State-of-the art Maxwell Chambers, Singapore International Chamber of Commerce (ICC) Hearing Centre, Paris Increasing number of modern dispute hearing facilities in the region show that arbitration is on the rise in Asia-Pacific countries Enhanced facilities conclusively show that Asia-Pacific can be placed on the map as a figure to accommodate international disputes not only legislatively and judicially but also in terms specialised and exclusive facilities and services.

Slide 29:Efforts to adopt effective procedures relating to arbitration from other arbitral institutions around the world e.g. the Emergency Measure of Protection ICDR was the first arbitral institution to provide an alternative to seeking interim relief through courts as part of standard international arbitration rules; e.g. Article 37 The SIAC Rules under Schedule 1 also provides similar emergency relief as found in Article 37. This generates greater flexibility for parties to international arbitral proceedings This will cause multinational companies to choose Asia-Pacific region as a preferred international dispute centre seeing that they will be allowed to make applications to the court, saving valuable time.

Slide 30:Introduced to improve the policy environment in facilitating international investments Designed to reduce uncertainty of costs involved in international commercial transactions and to oversee settlement of investment disputes Enforcement and improvement of this Code will increase confidence of international parties conducting investments in Asia-pacific in ensuring that arising disputes are resolved within the region itself and not elsewhere Further encourage and endorse agreements such as BIT’s (Bilateral Investment Treaties) and ICSID (International Centre for Settlement of Investment Disputes) to secure greater coperation and economic ties relating to trade and investments between countries within the region itself

Slide 31:Lawyers must at all times adopt values consistent with the needs of their clients The appropriate and positive attitude can make significant differences in the world or arbitration and ADR Lawyers should encourage ADR instead of litigation Genuine systemic changes can alter the roles of commercial lawyers whether international or domestic, in independent or in-house practices As international businesses becomes more sophisticated, so will the desire to resolve disputes fast and effortlessly With the right mindset, young lawyers can enshrine the Asia-Pacific region as a hub for international dispute resolution.

Slide 32:Developing the Asia-Pacific region as an international hub for dispute resolution is not an easy task and cannot be done overnight All the parties be it the sovereign states, governments, arbitral institutions, international entities and legal practitioners have to work hand-in-hand to address the current issues involving international disputes in the region Systemic changes in the legislatures, judicial systems, international treaties, mindsets and cooperation between arbitral institutions are essential Requires a constructive approach to create a regional resolution for a global solution