In 2011, Suzuki Motor Corporation (“Suzuki”)commenced arbitration proceedings in London by using the International Court of Arbitration (“ICC”), in order to compel Volkswagen AG to dispose of its Suzuki shares to Suzuki or Suzuki’s designated third party. It was only last year that Suzuki and VolkswagenAG finally reached a settlement after working its way through the ICC.
The two companies originally believed their strategic partnership would advance their global presence and spur the development of new, eco-efficient vehicles and engines. However, in less than two years, Suzuki cancelled the agreement and initiated arbitration proceedings, alleging that Volkswagen AG did not treat it fairly as they did not allow Suzuki access to its core technology. However, Volkswagen AG accused Suzuki of doing deals with its European competitor Fiat, in breach of their agreement.
In the final settlement to end the companies’ dispute with each other, Suzuki agreed to pay Volkswagen AGan undisclosed amount for various breaches. The ICC panel also ordered Volkswagen AG to sell its stake in Suzuki. As may be expected, due to the confidential nature of arbitration, Suzuki has not disclosed the settlement sum.
What is Arbitration?
Arbitration is an alternative to litigation as a means of resolving disputes. It is based on all parties’ agreement where all parties must agree to submit the dispute in question to arbitration and abide by the decision. Like a Judgment, the decision of an Arbitral Tribunal is final and binding. However, arbitration differs fundamentally from litigation in the following ways:
Contractual basis- Apart from statutory arbitration, the basis of arbitration contracts. The rights and obligations of the parties to arbitrate their dispute arise from the arbitration agreement they have agreed.
Jurisdiction- The parties usually choose where the arbitration is to take place that is, in which country.
Procedure – In contrast to the appointment of a Judge to preside over Court proceedings, the parties to an arbitration are able to agree on the procedure for selecting their Arbitral Tribunal. It is, therefore, possible, where the dispute is of a technical nature for example, for parties to appoint a tribunal with a high level of expertise in the area. Establishing the identity of the arbitral tribunal early on also allows parties to submit evidence to the arbitrators who may then identify key issues in the dispute as early as possible, whereas a Judge will usually be assigned later in the proceedings or a day prior to the Trial
Confidentiality – Arbitration may be preferable where the parties wish for matters to remain confidential. Hearings are usually held in private and the fact that a party is involved in arbitral proceedings is not usually in the public domain. Furthermore, English Law recognises an implied duty of confidentiality preventing disclosure of the documents produced in arbitration.
Finality – Whereas a Court Judgment will often be subject to appeals, national legislation typically only allows for the appeal of arbitral awards in very limited circumstances. These high thresholds mean that in most cases the initial award will be final. This may appeal to parties who are seeking a definitive result and do not want the dispute to be ongoing. However, this, of course, works both ways and parties who do not achieve the award they were hoping for will only have a limited right to appeal.
Enforcement of awards – Decisions of an Arbitral Tribunal are widely enforceable abroad by virtue of several conventions, in particular, the New York Convention. Other forms of alternative dispute resolution (such as mediation) are non-binding and depend on the parties concluding a Settlement Agreement
Bloomsbury Law- Arbitration Services
London has become one of the world’s most popular international arbitration centres in recent years. Therefore, access to high-quality advice and representation for parties involved in arbitration matters in London is crucial.
At Bloomsbury Law, our lawyers have experience of not only the substantive law relating to international arbitration but also the effective and efficient conduct of arbitral proceedings.
Our team works with clients to design and implement a process tailor-made for the circumstances of each case we handle, from the selection of arbitrators with appropriate experience, expertise, and availability, to the adoption of a bespoke procedural timetable focused on the earliest available hearing window.
Our philosophy is that arbitration, as an alternative to Court proceedings, should be conducted by all participants in a way designed to ensure a swift and certain outcome, particularly in high-value, commercially sensitive matters where the resolution of the dispute is of critical importance to the parties.
Examples of recent cases include:
- Acting for a luxury goods manufacturer in ICC arbitration proceedings arising out of the termination of a Distribution Agreement in Eastern Europe.
- Acting for a leading telecommunications technology provider in ICC arbitration proceedings to defend a multi-million-dollar claim for breach of contract under Korean law.
- Acting for a multi-national joint venture in disputes relating to the damage of air freight goods incorporating the ICC arbitration rules.
- Acting for a UK train operator in a successful appeal from arbitration to the High Court in respect of the operation of an industry compensation scheme for delays.
- Acting in a complex international dispute between Saudi and Taiwanese companies relating to termination and good faith provisions.
- Claim in the English Courts to challenge an arbitration award on grounds of serious irregularity and error of law.
Areas of Expertise
Our litigation department has the ability and resources to handle all types of disputes but is particularly active in the following areas:
- International Arbitration
- Contractual disputes
- Property litigation
- Civil fraud – asset tracing
- Professional negligence
- Directors’ liability
- Shareholder and partnership disputes
- Intellectual property
- Media law
- Debt management
- Tax litigation
Our Dispute Resolution team is headed by Jamil Ahmud and Nisha Chopra.
Jamil Ahmud is a lawyer and partner of Bloomsbury Law who acts for a broad range of clients including institutions, individuals, developers, entrepreneurs, investors and private companies and has acquired a reputation as a tough but sensible litigator.
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Nisha Chopra is a lawyer of Bloomsbury Law who advises and represents individuals and companies in respect of all aspects of litigation.
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