Arbitration in Asia

David Bateson is a leading international arbitrator who has been involved in over 100 arbitrations in Africa, Asia, Europe, the Middle East and South America and has extensive experience in disputes in a variety of industry sectors. With Asia being a global hot-spot for investments, we decided to speak with David about how he has seen Asia’s legal sector progress, what makes a top arbitrator and why companies should opt for the method when solving disputes.

What was the main (professionally based) reason for practising in Asia?

I was a colonial boy, with a liking for warm weather and cold beer, so Asia was the obvious destination. In 1980, Hong Kong was a British colony, with common law applicable, and I could get admitted automatically.  The 15% tax rate also helped. It has been an enjoyable, rewarding and diverse career in Asia over the past 37 years, 35 of which was a partner of an international law firm, Mallesons King & Wood Mallesons, and two years as a full-time arbitrator with 39 Essex Chambers.

My main specialisation is construction/infrastructure/resources, and there has been massive spending and investment on these sectors in Asia during my time here, and consequently many large and high profile disputes. I have also handled a lot of cases in the Middle East.

With such experience in disputes in a variety of industry sectors, where do you think arbitration is the most useful?

In the eighties and nineties, most arbitrations were in the construction and shipping sectors. These days it is used in most industry sectors, even financial, because:

• arbitration is neutral and confidential;
• you can select an industry expert as arbitrator(s), instead of being arbitrarily allocated a judge who may have no industry knowledge;
• in certain jurisdictions courts are untrustworthy;
• arbitration procedures are more adaptable and flexible than courts;
• ease of enforcing arbitration awards worldwide under the New York Convention – most countries have adopted this convention.

In your time in Asia how have you seen the legal sector progress?

The legal sector in Asia has grown exponentially and apart from the reliable jurisdictions of Hong Kong and Singapore, there has been a gradual improvement in the quality of lawyers in other jurisdictions and in arbitration laws, assisted materially by the adoption of the UNCITRAL Model Law; some refer to this progression as “the golden age of arbitration”. In response to this, courts are upgrading efficiency and adopting alternative dispute procedures such as mediation. The Singapore International Commercial Court has also been set up to hear international commercial cases and many jurisdictions have introduced emergency arbitration, so emergency relief can be given prior to the constitution of a tribunal. Another recent trend is third party funding in arbitrations, and the laws in Hong Kong and Singapore have recently been amended to allow this.

Institutions have also improved procedures to give arbitrators the tools to speed up certain cases that deal with recalcitrant respondents; for example, fast-track and expedited procedures and even early dismissal of hopeless claims.

With Asia becoming more of a hotspot for international investment have you seen disputes increase/progress? How have these changes affected those you represent?

As global trade flourishes, and countries are keen to attract inward investments, it is true that there are more and more bilateral and multilateral investment treaties in Asia. About 10% of claims made under the ISCID Convention originate from Asia.

However, there has been a recent backlash against investment treaty arbitrations. The perception of a small group of mostly Western arbitrators deciding on public law issues that regulate the conduct of developing nations, causes resentment. There have been many challenges to arbitrators on the grounds of issue conflict – prejudgment based on acting usually for states or investors, or past publications or advocacy.

A few Latin American states have renounced bilateral investment treaties, and potentially a court may be established by the EU to hear investment treaty disputes.

You have been labelled as one of the “top arbitrators in the region”. As Thought Leader can you explain how you achieved this title?

With such extensive experience, you begin to develop a reputation and an established track record. It is an incremental process, where every little movement helps build up your reputation in the sector; from securing the first appointments, getting on the panels of many institutions, word of mouth recommendations and personal friendships that are developed throughout the years of liaising, wining and dining at key conferences, all the way to using your specialised knowledge to publish articles and books. It is vital to be perceived as reasonable, friendly, efficient and decisive; there is a backlash against the time and cost of international arbitrations, so there is a high need to diminish passivity, as clearly, delays and inefficiencies are unwelcome.