International Arbitration - any preferences?

Has anyone ever used international arbitration to settle any contract disputes? I hope you could share your experience or recommend any specific bodies apart from the R.O.C. Arbitration Association. I don’t have a problem with them specifically, but my Taiwan project is planning to sign an agreement with an overseas partner, and I would like to offer an alternative to a Taiwan arbitor, just as a good faith gesture

Below are 3 I’ve found online that I imagine would be acceptable to my overseas partner, since they are 3rd party countries (neither Taiwan or their country). I found them listed at osec.doc.gov/ogc/occic/arb-98.html

Forget France. Way too expensive and they don’t speak English.

I like putting a Singapore arbitration provision in contracts, because people are extremely well educated in Singapore, so you should have good lawyers and arbitrators; I believe their arbitration system is very highly regarded (because they’ve been trying to woo business for years, to steal away from HK the crown as Asia’s business hub, and I believe they’ve done that through their good, fair laws and procedures that are consistently applied; it’s often fairly and centrally located; I would think most opposing parties would feel it’s a reasonable compromise; and I’d be very happy to fly there for a few days in the worst case scenario that a dispute arises which must be arbitrated.

Hong Kong would also be a reasonable selection, but I believe Singapore’s a better choice.

Thanks! Those are good points :slight_smile:

Actually, they seem to have a sister ICC organisation in Taipei (iccwbo.org/id15534/index.html) and other cities in Asia. If anyone has ever used them here, that could be useful to hear about

Your main concerns:

  1. Cost

  2. Fairness/Ease of Use

  3. Power to arbitrate (and enforcement)

  4. Arbitrations either come with a flat fee or per-hour/per diem rate. Be sure to check the arbitration centre guidelines (They may or may not also include the cost of the arbitrator). HK and Singapore should be relatively cost-effective.

to keep costs down, you may also wish to include the following terms in the arbitration clause:
1 arbitrator to be jointly appointed by the parties or by the arbitration centre (instead of 3)
1 day arbitration maximum (or consecutive days at least)

ICC may be more expensive and more than what you require.

Costs also include:

Travel costs - bringing you, your witnesses and documents to the arbitration.

Proximity - You want something relatively close by geographically to keep costs down,

language - if you are English-speaking, your documents are in English, find an English-speaking country. Otherwise, you may have to pay for translators, translations, notarizations of translations, etc.

Again, all this depends a lot on how much is at stake.

Also, depending on your particular business concern, some arbitration centres may be more expert in those fields than others (e.g. construction, hi-tech, etc.), but for general business contracts, this should not be a great concern.

  1. Fairness. HK and Sing should be OK

Generally, I would not recommend a foreigner in Taiwan to use the Taiwan arbitration association in any dispute against a Taiwanese. I know of cases of bias. While I can’t say all Taiwan arbitrations are horror stories where foreign parties are involved, my experience certainly left a bad taste (along the lines of open racist comments by the chief arbitrator towards my foreign client in front of my client in Mandarin that “[Your client’s nationality] are all liars”)

a. The best way to avoid disputes about the right to arbitrate is to use the form arbitration clauses (or as close as possible while fitting your business needs at the same time) that are often provided by the arbitration centre (or the Rules) that you have chosen. You don’t want to be wasting time and money fighting over arbitration before you get to arbitration. A lot of lawyers who draft contracts don’t pay attention to details of arbitration clauses, because it’s low priority for them.

b. enforcement. Because most countries have signed the NY Convention (which is agreement on enforcing arbitration awards in each other’s jurisdictions), you should be generally be ok. However, be safe and check the country where arbitration is to take place and the country where the counterparty’s assets (or the assets in dispute) are, and make sure they both have signed the treaty.

uncitral.org/uncitral/en/unc … ntion.html

because Taiwan is in that unusual state-no-state status, I forget whether it’s signed the treaty.

FYI, the treaty is basically like:

a. You go to X to arbitrate at Arbitration Centre. Arbitrator awards in favour of you. You take the award to Court in X to get it “validated”.
b. You then take the validated award to Y where the counterparty or assets are. You ask the court in Y to enforce the award.
c. But if Y doesn’t have a treaty with X, Y may ignore your award that you got in X.

I’m sure you can pm MT and I for specific questions, because as you can see, these questions are fact-specific, so what I’ve written are general guidelines.

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Guys, thank you - this is invaluable information.

I’ll look closer at the Singapore Arbitration rules and look to use those in the agreements. JFYI the assets for the project are in Taiwan, and in this instance, I am part of the group in Taiwan. So, in a way, it would be in our interests to keep things in Taiwan. That said, all of us involved in Taiwan are foreigners (boy, this is getting complicated :wink:)

Hire a lawyer to draft/review your agreements, but here’s a typical provision we agreed to in one case:

  1. Governing Law. This Agreement and all claims arising out of this Agreement shall be governed by, and construed in accordance with, the Laws of Singapore, without regard to any conflicts of law principles that would result in the application of any law other than the law of Singapore.

  2. Consent to Arbitration in Singapore. Each Party hereby irrevocably agrees that all disputes arising out of this Agreement or any transaction contemplated thereby shall be exclusively referred to and finally resolved by, arbitration in Singapore in accordance with the Arbitration Rules of the Singapore International Arbitration Centre (“SIAC Rules”) for the time being in force which rules are deemed to be incorporated by reference into this Agreement. Each of the Parties, further agrees that service of any notice or document by registered mail to such Party’s respective address set forth in Section 4 shall be effective service in any such Proceeding; irrevocably and unconditionally waives and agrees not to plead or claim in any court any objection to resolving disputes as described in this Section due to allegedly improper jurisdiction, venue or inconvenient forum; irrevocably and unconditionally waives its right to a bench trial or trial by jury in any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby and for any counterclaim with respect thereto. This Section sets forth the exclusive means of resolving disputes pertaining to this Agreement except as expressly provided to the contrary herein.

I also think Singapore would be a better choice than Taiwan. In my experience, Taiwanese arbitration has been fair, but they tend to mediate disputes rather than arbitrate and arrive at 50-50 splits without providing any reasoning for their decisions. Everyone goes home unhappy. If you do stay in Taiwan, pay close attention to the rules for choosing the arbitrators. On a panel of three, there will usually be a fact finder–i.e. an expert in construction etc. Make sure you can at least veto the choice of this expert or you will be at a serious disadvantage.

Another important reason to choose Singapore is that common-law style discovery is available there and they know how to apply it. In theory, this is possible in Taiwan, but in practice, discovery is an alien concept and they will revert back to Taiwan’s rules of evidence (this could be an advantage if you are the defendant.

As for bias, MATRA (the French company) won its arbitration case against DORTS in the Taipei MRT case way back in 1993. The courts overturned that decision on a technicality due to a late filing …

I vote for arbitration in SG using SIAC rules. I would not arbitrate in the 'wan.

You may want a “mediation, and if unsuccessful, arbitration” ADR clause.

I was happy to learn about this at the SIAC

Governing law doesn’t have to be Singapore (parties choose what law)

Arbitration can be done by mail - no need to go to Singapore

On average, an arbitration case takes 14 months

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Nice grave dig :smile:

Did you need the arbitration in the last 10 years?

The only experience I had was at an arbitration court in New York (icdr.org) against a Taiwanese hardware manufacturer: everyone had to be there in person, total proceedings were pretty quick (a few months from start to end), but the results in “my” case were not entirely satisfactory.

Probably it depends on the panel members, but on our panel one member out of three was so unbelievably obtuse. I know math is hard, especially if it involves percentages… But what troubles we had to go through to convince that person that contrary to his intuition field failure rates can in fact exceed 100%… Unbelievable. (Spoiler: if you replace every device in the field twice, you have 200%)

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Fortunately, I have not had to go to arbitration for commercial cases. I was looking up arbitration here for some new licensing agreements I’ve been negotiating and was happy to find the clauses suggested by @mother_theresa

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