UK and International Experience in the Admission, Regulation and Operation of Arbitral Institutions
Great Britain China Centre
Author: Yarik Kryvoi
States increasingly compete for arbitration users because it helps them to offload the courts, create business opportunities for domestic lawyers and serviced related to law (experts, interpreters, witnesses, conference organizers, hospitality industry). Foreign law firms also actively set up branches of their firms in what they perceive as arbitration hubs. In addition, the popularity of a particular jurisdiction among arbitration users sends a powerful signal to foreign investors about the rule of law and enhances the prestige of the arbitration venue.
This report shows that successful arbitration hubs such as London and Singapore appreciate the economic benefits that international arbitration can bring to them and create favorable conditions for arbitration institutions and users. This report concludes that most jurisdictions do not adopt any special rules for admission of foreign arbitral institutions. Moreover, some jurisdictions (e.g., Singapore) actively adopt various measures to liberalize access of arbitration users and institutions.
London and Singapore are respectively number one and number three most popular seats of arbitration in the world. Arbitration venues in Russia, which takes a more restrictive approach to regulating arbitration, are nowhere near the top of the list of preferred arbitration venues. On the contrary, many arbitration users with Russian and foreign law elements prefer to resolve their disputes abroad. The example of Singapore suggests that active policies to encourage international arbitration can result in impressive results, bringing economic and reputational benefits.
From the regulatory point of view, what matters in most jurisdictions is not whether the arbitration institution is foreign or domestic, but whether the award is foreign (e.g., issued in another jurisdiction). In accordance with the New York Convention, foreign (e.g., rendered abroad) arbitral awards are enforced with domestic courts playing a 'policing' role. Domestic courts can set aside arbitral rendered in the territory within their jurisdiction or refuse recognition/enforcement for awards rendered in foreign jurisdictions.
Leading international arbitral institutions register offices overseas to better cooperate with local partners and parties for marketing, training and case management. Some arbitral institutions setting up branches in various jurisdictions but usually this does not change the legal status of their awards under their domestic arbitration laws or the New York Convention.