Interview

Interviewee : Mr. Gary Born Wilmer Cutler Pickering Hale and Dorr LLP Interviewer : Korean Commercial Arbitration Board

What major influences in your life led you to arbitration laws are continuously being refined. These a career in international arbitration? efforts have contributed to a significant increase in the selection of arbitration as the method to resolve This might come as a surprise, but I didn’t even disputes arising from international commercial consider becoming a lawyer until I was finished with transactions. my US undergraduate studies. As a student I was interested in history and religion and it was only With respect to the future, Asian states have relatively late in my studies that it occurred to me that appeared to be particularly receptive to the concept of law would be an interesting, worthwhile possibility. Bilateral and Multilateral Arbitration Treaties (“BATs” Even after focusing on law, I was first attracted to the and “MATs”). If Asia is the first region to adopt, it idea of transactional work and came to international will position itself as a pioneer on the cutting edge of arbitration relatively late via the classroom, when advancement of the international arbitration system. teaching law during the 1980s; I taught international dispute resolution for a year and fell in love with the subject, putting my classroom and scholarly work Korea is one of many Asian countries that together with practical experiences. have entered into various investment treaties. Yet, there has been a global debate as to whether investment treaty arbitration will continue to Arbitration is a field that is constantly evolving. flourish. What are your views regarding the Do you foresee any radical changes in international future of investment treaty arbitration in Asia? arbitration in the near future, in particular, the Asia Pacific region? Investment treaties generally provide both substantive legal standards protecting foreign Indeed – arbitration has been, and continues to investments and specialized dispute resolution be, widely adopted as a preferred dispute settlement mechanisms, and consequently contribute to mechanism across the globe, including Asia. Over promoting foreign direct investment. With the the past years, there has been a notable increase involvement of an Asian state-party in around 40% in international commercial transactions in Asia. of BITs, and almost a fifth of all investment disputes, As arbitration continues to expand across Asia, Asian states have consistently occupied a central role in local institutional rules and national international investment treaty arbitration.

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• Korean Arbitration Review of Korea are currently under under currently are of Korea In addition to updates to the existing arbitration arbitration existing the to updates to addition In Arbitration institutions and centers are service- are centers and institutions Arbitration in essential are structures government Efficient arbitral rules of the Korean Commercial Arbitration Arbitration Commercial rules Korean arbitral the of with line in them brought 2011 in (“KCAB”) Board amendments Furthermore, standards. international Act Arbitration the to local the arbitration in changes These discussion. as a Korea South aimed promoting are at framework arbitration. international for seat in arbitration in interest increased the framework, of arbitrations number increased the along with Korea, of creation led parties, the to Korean South involving Seoul. in The center center arbitration international the equipped modernly and venue a convenient provides proceedings, arbitral of conduct the for as and such, asa meeting competitiveness its augmented has Korea pro- the Together, tribunals. and parties placefor Seoul in legal center the and framework arbitration international of the forefront the to Korea South bring scene. arbitration As SIAC has adopted new governance structures, structures, new adopted governance has SIAC As of arbitration structures of governance kind what arbitral for attractive be greatly would centers arbitrators? parties international or services administration they provide providers: arbitrations, institutional fee.a for In exchange in administration the in role a key play centers arbitration proceedings:of the and charge of overseeing in they are service the arbitration, for request registering of the of the costs on advances receiving and fixing challenge and arbitrators, of appointment arbitration, compensation. their fixing to addition in best the provide to institutions and centers for order institution’s service, the increasing attractive most and Over the past few years, efforts have been made to to been made past few have efforts Over the years, I would not necessarily speak of advantages, but speakI would not necessarily but of advantages, Despite its advantages, it is true that investment investment that it is true advantages, its Despite system. arbitration Korea’s modernize and enhance international the to significant changes made The What do you see in the future of international of international future the see do you in What establishment the Seoul with in along arbitration Resolution Dispute Seoul International of the 2013? Specifically, May (SIDRC) in Center arbitration an as develop Seoul can how further place?friendly rather characteristics that may suit the preferences of of preferences the suit may that characteristics rather parties. legal Since many rules generally are codifiedin transparency be greater may there countries, law civil proof easeand local of access to Secondly, laws. applicable follows the evidence of foreign law and law civil rules in evidence of local and proof for law jurisdictions.

As a civil law country, do you think Korea Korea think do you country, law a civil As practitioners arbitration to advantages offer could jurisdictions law common in available not are that Asia?in

treaty arbitration has come under fire recently, with with recently, fire under come has arbitration treaty from states American Latin of three withdrawal the system’s of the ICSID, questioning wide coupled with have reforms of potential a number and legitimacy, investment been Nevertheless, this. remedy proposed to is particularly This flourish. to continues arbitration such as Asia, in true as developments recent reflected in Agreement, ASEANof the expansion the Investment investment expansive of more adoption China’s and is no reason there view, my In agreements. protection will not continue arbitration investment believeto that future. the in trend previous follow its to attractiveness as an economical, competent, responsive other hand, the appellate review of arbitral awards and active center. Their attractiveness depends on the goes against the general principles of finality and res extent to which the governance structure is adapted judicata. More significantly, it arguably compromises to best serve the disputing parties throughout their the objectives of speed and efficiency for which arbitration. arbitration is primarily sought.

Notably, the structure must be adapted to the Anecdotal evidence and empirical research indicate number of cases brought before the institution: the that international businesses generally prefer efficiency higher the numbers, the greater the need for a more and finality over the opportunity for appellate review. sophisticated governance structure. To that end, Consequently, their arbitral agreements do not usually arbitration service-providers must continually adapt provide that the award may be subject to review. their internal management regarding division of Arbitral institutions are service-providers, and to a tasks, and this was notably the case of SIAC, where certain extent at least, the services they provide are its heightened popularity and consequent increase demand-based. If there is an increase in parties’ trust in caseload led to the need to revise its internal and demand for existing institutional appellate review structure. Now, a Court of Arbitration oversees the mechanisms, it is likely that arbitral institutions will case administration arbitral appointment functions of adapt their rules to provide this service. The question SIAC, while the board of directors remains in charge is whether institutional appellate arbitration rules can of managing corporate and business development encourage parties to agree on the use of the mechanism functions. and increase its general popularity, thereby kick- starting a trend where more institutions will adopt such rules. The AAA is now providing parties with the option of agreeing to appeal their arbitration International arbitration practice has shown that award through its Optional Appellate there have been some difficulties when parties agree Arbitration Rules. Do you perceive this to on appellate review. The first arises where parties agree be the next trend in the kind of services to on the concept that the award may be reviewed, but be provided by arbitration institutions? are faced with the wide absence of institutional review mechanisms to assist and frame the process. In this On a preliminary basis, it should be noted that respect, the introduction of optional appellate rules parties have always had the possibility to agree that by arbitral institutions may improve and enhance the their award would be subject to review, arbitration parties’ experience by providing a more standardized being a predominantly consensual dispute resolution practice and a neutral forum. It is therefore conceivable process that may be tailored to suit the parties’ that optional appellate rules would encourage parties particular procedural needs. On one hand, there to provide for the review of their award. If the few is a substantial advantage in parties having the existing institutional mechanisms were to gain parties’ opportunity to opt for a review mechanism if they see trust, this would in turn lead to more demand, making fit: mainly, an anomalous or simply erroneous award it likely that arbitral institutions would increasingly may be corrected. This ultimately serves to uphold adopt such provisions to meet the demand. the legitimacy of the entire arbitral process. On the

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• Korean Arbitration Review However, to maintain their allure and uphold the the uphold and allure their maintain to However, is inspired (BAT) Treaty Arbitration Bilateral The states, two that is BAT a of concept The fundamental appellate legitimacy decisions, institutional their of scopeof their the restrict strictly must mechanism mistakes the repeating reviewcarefully to avoid the and courts national reviewing by made previously ICSID panels. annulment a very interesting introduced you Recently, during- Treaty Arbitration Bilateral the - topic Seoul. to please Could you last visit your readers?explain our to this states where system, arbitration investment the by a providing agreements international conclude of out arising of disputes resolution the for mechanism states of the of one a national by made investment an basic The concept state. other of the territory the in in can, arbitration commercial international that is concept the from benefit circumstances, appropriate been has developed that in arbitration to of consent (BITs). Treaties Investment Bilateral a treaty conclude Canada, and Ethiopia example for all category of a particular that of disputes providing shall be resolved nationals between respective their is a BAT a BIT, Like arbitration. international by concluded agreement between two international an provides it that is BAT the of The corner-stone states. resolve to as mechanism default a arbitration for of between nationals disputes commercial international choose to may parties the Since states. contracting the mechanism, resolution default dispute of the opt-out remains process arbitral the control to autonomy their BATs in mechanism default the Therefore, intact. a not indicated have parties where onlywould apply disputes. potential resolving respect to choice with The finality of an arbitral award is a cornerstone cornerstone a is award finality arbitral The an of award, review the for of forum alternative an As However, it is not sufficient for institutions to to institutions for sufficient it is not However,

of the effectiveness of arbitration as a mechanism to to as mechanism a arbitration of effectiveness the of finality This though the is upheld disputes. resolve While review of awards. appellate of extensive absence and costs of reducing advantage the has absence this legitimacy crucial the for remains it delays, potential seek able to are the parties that process arbitral of the awards. review of untenable significant body the offers appellate institutional an review national both once by at avoiding of advantage The more positions. divergent inevitable their and courts, mechanisms, appellate adopt that institutions arbitral potential legitimate their for plan may parties more the an of reviewed. creation The award their need have to body to parties allows appellate the institutional of review. power exclusive its for provide expressly

Some arbitration institutions have adopted adopted have institutions arbitration Some rules. What their in mechanism an appellate Do developments? such viewson your are international in trend will be a rising this think you arbitration? rules. appellate Firstly, of optional a set adopt simply scope delimit the and define clearly rules the must be must that crucial a is This characteristic review. of a repeat avoid to institutions arbitral mind by in kept annulment ICSID’s under mixed experiences of the extensively have hoc ad committees where procedures, This provisions. relevant applied and the interpreted wisdom the about raised questions interpretation of success the Additionally, mechanisms. of such largely would mechanism appellate institutional the the efficiency effect overall on and its on speeddepend the burdensome process: more arbitral the of the it. adopt to parties for likely less the mechanism, In that sense, a BAT, like a BIT, does not rest on UNCITRAL and ICC Rules and important judicial explicit party consent to arbitration, or on a negotiated decisions in the UK, US, Switzerland, France, India, arbitration agreement in a commercial contract, but Singapore and elsewhere; it is important to stay abreast rather on a constructed notion of consent, similar of these developments. Second, my own thinking on to that in BITs. Indeed, BITs contain an open offer various issues has developed - on issues of recognition from the state for investors of a defined nationality to and enforcement of arbitral awards, annulment arbitrate their disputes. The consent to arbitration is of awards, choice of law governing international perfected when the investor accepts the state’s standing arbitration agreements, arbitrator independence, offer to arbitrate. conduct of counsel and other issues.

The adoption and proliferation of BATs would There have been both positive and negative bring a number of benefits. Firstly, the BAT effectively developments in international arbitration, all of which facilitates parties’ access to arbitration, the preferred are important. On the positive side, decisions like BG mechanism for resolution of international commercial Group in the US and Bharat Aluminium in India, and disputes due to its neutrality, efficiency, expertise and the revised French arbitration statute, strengthen the enforceability. Secondly, the BAT would also show international arbitral process. On the negative side, a state’s commitment to international arbitration, decisions like Dallah in the UK have the opposite thereby promoting international transactions. effect and are difficult to reconcile with the New York Furthermore, the BAT will reinforce the recognition Convention. My second edition attempts to describe and enforcement of arbitral awards between the and synthesize all these disparate developments, contracting states. Finally, since states are free to as well as to expand coverage of recognition and limit the general scope of the BAT’s applicability, as enforcement of awards, annulment of awards, choice well as the scope of dispute to which it applies, these of law governing international arbitration agreements, limitations would provide welcome answers to any arbitrator independence, and conduct of counsel, all of future questions of arbitrability. which are important recurrent issues both in practice and in theory of international arbitration.

As we know, the new edition of your magnum opus, International Commercial Arbitration in You have participated in many arbitration April 2014 has just been published. Could cases as both counsel and arbitrator, could you tell us more about this new treatise and you please tell us briefly about the most what updates you have made which are especially unforgettable case you have participated in valuable for international arbitration practitioners and commentators? All my cases are special and unforgettable, but two cases are worth mentioning. There are two main reasons for the second edition of the treatise. First, there have been a number of My first arbitration was Greenpeace v. Republic of important legislative, judicial, institutional and other France (also known as the “Rainbow Warrior” case). developments since 2009 - including significant The “Rainbow Warrior” was a protest vessel belonging legislative reforms in France, revisions of the to Greenpeace (an environmental advocacy group),

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• Korean Arbitration Review Second would be the Abyei Arbitration – a case – a case Second Arbitration Abyei would be the country 1954, the in independence Sudan’s Since arbitration first, – ways many in unique Thiswascase international law. This case had extremely important important extremely case This had law. international responsibility state of issue the on implications in of non-intervention doctrine of the breach for involved questions interesting Other law. international reparations. and of force use responsibility, individual a pursue to determination my caseThis strengthened of as I became aware arbitration international in career on have it can impact the and importance practical its arena. international in rule the of law establishing Dorr’s and Hale Pickering Cutler Wilmer where the represented Group Arbitration International (SPLM/ Movement/Army Liberation People’s Sudan delimitation and definition the over a dispute in A) of Sudan against Government Area the Abyei of the Court Permanent the of auspices the under (GoS)and Hague. the in of Arbitration generally war, civil engulfedwas almost continuous by north Arabic-speaking largely the Muslim, pitting non-Muslim other and Christian againstprimarily the SPLM/A, the GoS and the 2004, In the south. negotiated group, and resistance Sudanese principal The (CPA). Agreement Peace signed a Comprehensive auspices Nations United concluded was under CPA a permitting and war civil the aimedand ending at could decide Sudan which southern in referendum A central state. independent an form not to or whether of a territory status the was CPA the by addressed issue called Abyei Sudan, the south-central located in and between border southern the on Area, whichlay GoS and the disputes, other Among Sudan. northern SPLM/A boundaries disagreed territorial the about decided parties the to Area. Ultimately, Abyei the of disagreements. their arbitrate its with a dispute usedwas of resolving as a means It goes without saying that the Rainbow Warrior Rainbow the Warrior that goes saying without It In parallel, France and Greenpeace concluded concluded Greenpeace and parallel, France In case involved very sensitive questions of public of public questions very sensitive case involved

the submitting agreement, arbitration separate a to liability financial the sinking for of France’s question The Geneva, in seated Switzerland. tribunal arbitral an Greenpeace pay to was France decided that tribunal million$5 damages, in million $1.2 “aggravated for legal and fees; interest expenses, and this damages,” victory who great those for as “a decisionmarked was use right of peaceful the abhor the and support protest of violence.” which had been scheduled to sail to Mururoa Atoll, Atoll, beenwhich scheduled had sail to Mururoa to testing. nuclear French protest to Polynesia, French in of actions the by voyage prevented was that However, Security of External General Directorate French the sinking vessel’s (“DGSE”) the in agents, resulting Criminal member). Greenpeace of one death the (and Zealand police New by in resulted investigations DGSE their agents (and twoof French arrests the initially France convictions). criminal subsequent Rainbow the on denied attack responsibility the for New on imposed and economic sanctions Warrior DGSE the arrest. for Zealand agents’ retaliation in acknowledged for responsibility France Subsequently pay to offered and Rainbow of the Warrior sinking However, Greenpeace. and France both to reparations to unable Zealand were Greenpeace and New France, so they concluded reparations, on agreement an reach about disputes submitting agreement, arbitration an DGSE the of agents to treatment and reparations for Nations Secretarythe United of the General Secretary award The an General rendered resolution. apologize Zealand formally to New to France requiring Zealand New $7 million pay to and (including for two of the transfer moral damage); the he also ordered of Europe outside isolated island DGSE agents “an to years.” of three a period for roots in what has been described as the “world’s most and legal aspects of their case, and in this respect, I destructive civil conflict.” Given the politically volatile emphasize the deep interplay between the two. It’s nature of the dispute, resolution of which was of important to have your own vision of where the case historical importance, involvement in this arbitration should go, but it’s also vital to understand how others was a great privilege but also a great professional see the case and to respond to that. Even the slightest challenge. Additionally, the arbitration was conducted nuance in a case’s factual elements can open a series of on expedited schedule, rising the adrenalin levels and new legal questions and make it appropriate to change not leaving any space for mistakes. a previously-defined strategy. In such circumstances, attorneys always need to be flexible and ready to adapt. Another unique feature of the case is that the oral hearings were open to the public and web-cast live Another piece of advice would be to always strive around the world, bringing a revolutionary approach to to be civilized and polite when dealing with opposing transparency in public international law arbitrations. counsel, in stead of being unnecessarily aggressive. One thing that one learns very quickly from sitting as an arbitrator is that petty squabbles and disagreements Is there anything you have not tried but between counsel, which are sometimes understandable would like to do in the future? in the heat of the battle, are usually beside the point as far as the tribunal is concerned. Focusing on those No… clashes takes time and energy away from the important issues, and in the eyes of the tribunal, can weaken the case of counsels that focus on stirring up trouble on What advice do you have for young attorneys issues that are irrelevant or clearly weak. in the Asian Region who are interested in the field of arbitration? If you could travel to anywhere at this very The first piece of advice is to develop that interest and moment, where would it be? take it to the next level. Arbitration is an interesting and exciting field of law, but it is also complex and Home. quite different from national litigation.

Inexperienced counsel can sometimes forget that one of the most valuable arts of advocacy isn’t speaking but listening. A solid understanding of the particulars is crucial for anyone who aspires to practice seriously. The advocate’s first function is to understand what issues concern the arbitrators, which means listening both to what the arbitrators say and sometimes to what they don’t say. As for attorneys who practice arbitration, both young and old, I would encourage them to always keep an open mind about the factual

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• Korean Arbitration Review Gary Born is the chair of the International Arbitration Practice Group at law firm Wilmer Cutler Wilmer law firm Practice Group at Arbitration GaryInternational is the chair of the Born of authorities in the fields leading is one of the world’s and Dorr LLP and Pickering Hale arbitration and litigation. international arbitral leading all under arbitrations, 550 than more in counsel as involved been has Born Mr. has been He history. the largest arbitrations in both ICC and ad hoc including several of regimes, leading international arbitration practitioners. years as one of the world’s ranked for the past 15 award in 2011 and Year” “Advocate of the inaugural Arbitration Re view’s He received the Global having served He sits as arbitrator, International Litigator” Best “World’s was recently voted the and ad hoc arbitrations. in some 150 institutional and the University of summa cum laude) Born is a graduate of Haverford College (BA 1978, Mr. US on the Friendly He clerked for Judge Henry J. summa cum laude). (JD 1981, Pennsylvania Supreme Court. Rhenquist on the U.S. CourtWilliam H. and Justice Appeals for the Second Circuit of international has published a number of leading works on international arbitration, Born Mr. He is the author of International Commercial litigation and other forms of dispute resolution. American the of recipient and field the in treatise preeminent the 2009), (Kluwer Arbitration the author of International He is also Certificate of Merit in 2010. Society of International Law’s Arbitration Selection and Forum International Practice (Kluwer2012), and Law Arbitration: Materials Cases and Arbitration: International Drafting and Enforcing (Kluwer 2010), Agreements: 2011). and International Civil Litigation in United States Courts (Aspen 5th ed. (Aspen 2011), He has taught law at Harvard Gallen University. Born is an Honorary Professor of Law at St. Mr. Georgetown University Law Center, Gallen University, St. Law School, Stanford Law School, University College London Virginia College of Law, University of National University of Singapore, Arizona College of Law. and the University of Gary Born