Understand Your Rights. Solve Your Legal Problems
In this article, Lawyer Monthly hears from experienced notary public Mihail Florin Gavrila, who discusses the vital role played by the Apostille Convention and skilled notaries in international document legalisation.
A notary public in England is a public officer appointed by the Archbishop of Canterbury, regulated by the Court of Faculties.
In England, one of the primary responsibilities of a notary public is to confirm the authenticity of documents intended for use overseas. They accomplish this by validating the identity, capacity and willingness of the individual involved in the transaction. The purpose of the notarization procedure is to prevent fraud and ensure that documents are legally recognised in other countries.
If they wish to purchase property in Spain, for instance, British nationals are required to present specific legal documentation. Before these documents can be recognised in Spain, they must first be notarised in England. Here is where a public notary enters play. After verifying the legitimacy of the documents and the individual's identity, they notarise the documents.
In England, the notary public is also responsible for administering oaths and declarations and producing legal documents for international use. A nApotary public is essential to the procedure, even if they do not issue the apostille themselves. After the document has been notarised by a public notary, it is sent to the Foreign, Commonwealth & Development Office (FCDO) in England for the apostille to be affixed. The apostille validates the document for international use by confirming the authenticity of the notarization.
In the first place, the disparity between national legal systems is one of the greatest obstacles. Countries with civil law, common law, hybrid, or traditional legal systems have distinct requirements for document recognition. Other jurisdictions may not require notarisation.
Next, problems associated with the authentication of authenticity present yet another formidable barrier. Even if a document has been notarised by a notary public, it may still require additional authentication for foreign recognition. This procedure may require an apostille, a certification under the 1961 Hague Convention, or consular legalisation in countries that are not party to the Convention.
In the first place, the disparity between national legal systems is one of the greatest obstacles.
Additionally, language barriers pose a substantial barrier to the international acceptance of documents. A certified translation may be required if a document is written in a language not comprehended in the receiving jurisdiction.
Beyond this, document submission timeliness can impact international legal recognition. In some jurisdictions, documents must be issued recently or notarised to be considered authentic.
Lastly, changes in the legal status or personal circumstances of the parties involved may prevent international legal recognition of a document. For instance, previously issued documents may no longer be valid if a person gets married or divorced, changes their name, or if a business alters its organisational structure or ceases to exist.
The Apostille Convention is an international agreement formulated by the Hague Conference on Private International Law. It was intended to end the need for foreign documents to be authenticated by diplomatic or consular officers of the receiving country. The origin of the term ‘apostille’ is French, where it refers to a certification or annotation. It refers to the certificate issued in accordance with the Convention that verifies the origin of a public document.
According to the Apostille Convention, public documents issued in one signatory country and intended for use in another signatory country are recognised without the need for consular legalisation – the traditional method of validating documents for international use. This substantially simplifies the process of document legalisation by eliminating the previously required authentication steps.
The process begins with the issuance of the document in the country of origin by an authorised individual or entity, such as a notary public. The apostille is affixed to the document by a designated competent authority, such as the Foreign, Commonwealth & Development Office (FCDO) in the United Kingdom. The apostille certifies the signature's authenticity, the signer's capacity, and, if applicable, the identity of the seal or stamp affixed to the document.
The Apostille Convention has had a transformative effect on the international exchange of documents, with several substantial advantages. Eliminating the need for multiple authentications or legalisations will save time and simplify the process.
Expenses are also reduced. Multiple authentications and legalisations can rapidly add up in cost, especially if translation or international shipping is required. By requiring a single certification, the Apostille Convention reduces these expenses. This increases the legal certainty. The apostille ensures that public documents are acknowledged expeditiously, and that the possibility of documents being denied due to doubts about their authenticity is minimised.
The Apostille Convention has had a transformative effect on the international exchange of documents, with several substantial advantages. Eliminating the need for multiple authentications or legalisations will save time and simplify the process.
The 1961 Apostille Convention or Hague Convention standardises the process of document authentication among member nations, enabling the free and efficient transfer of public documents across international borders.
However, many countries are not subject to the Apostille Convention. Various examples include Afghanistan, Canada (The Apostille Convention will come into effect in Canada on 11 January 2024), Cuba, Egypt, Iran, Iraq, the UAE (United Arab Emirates) and Zimbabwe.
The expedited procedure of the Apostille Convention does not apply to documents destined for use in these non-participating nations. These documents must instead undergo consular legalisation, a more traditional and frequently complex procedure.
Consular legalisation necessitates multiple verification procedures. After notarisation in the country of origin, the document must be legalised by the department of foreign affairs in the country of issuance. Following this, the document must be legalised by the embassy or consulate of the destination country. Particularly for first-time participants or organisations, the process can be time-consuming, expensive, and occasionally perplexing.
The distinction between Apostille Convention participants and non-participants regarding the simplicity of document legalisation highlights the Convention's vital role in facilitating international transactions. However, it also highlights the challenges faced by countries that are not signatories to the Convention.
Nonparticipation can be caused by a variety of factors. Some nations may not have joined the Convention because their legal systems are fundamentally distinct or incompatible with its principles. Others may be unable to utilise the Convention's streamlined procedure due to administrative or practical constraints.
Despite these obstacles, overall participation in the Apostille Convention is rising. This trend is fuelled by a growing awareness of the Convention's benefits, which include reducing the costs and saving time associated with international document exchange.
The Apostille Convention has significantly streamlined the procedure for signatory nations to recognise foreign documents. Individuals and institutions from countries that are not signatories to the Convention, however, must rely on alternative means to ensure international recognition of their most vital documents.
Countries that are not signatories of the Apostille Convention require consular legalisation to recognise documents. In contrast to the streamlined procedure outlined in the Convention, consular legalisation involves multiple stages and multiple authorities, thereby increasing the procedure's complexity and duration.
The distinction between Apostille Convention participants and non-participants regarding the simplicity of document legalisation highlights the Convention's vital role in facilitating international transactions.
Typically, the process of consular legalisation begins with the notarisation of the document in the issuing country by a notary public. The document is then legalised by the country's foreign affairs department. The final step is for the embassy or consulate of the country in which the document will be used to authenticate it.
This procedure may appear daunting, but it can be navigated in a variety of ways. Many nations provide online access to distinct guidelines and procedures that assist individuals and organisations in understanding and traversing the consular legalisation process.
Second, there are services available to assist with the legalisation of documents. These services can manage the entire process, from notarization to embassy legalisation, thereby saving time and decreasing the likelihood of error. Some of these services also offer document translation, which may be necessary if the document is to be used in a country where the official language differs from the document's language.
A chain of authentications, also known as the ‘Chain Authentication Method’ or ‘Chain Attestation Method’, is an alternative to consular legalisation in certain circumstances. The document is ultimately authenticated by the embassy or consulate of the country where it will be utilised. This procedure can be even more time-consuming and costly than consular legalisation, but it may be the only option if consular legalisation is not feasible.
Formerly known as the Foreign & Commonwealth Office, the Foreign, Commonwealth & Development Office (FCDO) administers the apostille certificate application process in the United Kingdom. The FCDO issues an apostille certificate to legalise United Kingdom public documents for use in apostille Convention member countries.
The first step in acquiring an apostille certificate is establishing that the document is a UK public document. The FCDO can only issue an apostille for original or certified copies of British documents. Documents that can be legalised include birth, marriage, and death certificates, court documents, and documents issued by a notary public or government agency.
After obtaining the appropriate document, it must be evaluated to ensure apostille eligibility. The FCDO verifies that the document bears the signature, stamp, or seal of a public organisation or official in the UK. This may be a registrant's signature on a marriage certificate or the notary's seal on a document.
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The document must then be transmitted to the FCDO. This can be done by mail or with a premium same-day service.
The FCDO then verifies the document's signature, seal, or stamp and, if everything is in order, issues the apostille certificate. The certificate is a small piece of paper that is affixed to the back of your document. It contains information such as the document's country of origin, who signed it and in what capacity, any seals on the document, the place and date of certification, the issuing authority, the apostille certificate number, and the issuing authority's insignia.
The eligibility of the document for an apostille is one of the initial and most significant obstacles. Not all documents are eligible for an apostille certificate. Prior to initiating the procedure, it is necessary to verify the document's eligibility to avoid disappointment or delay.
Another potential pitfall is the authenticity of the document. The apostille certificate is affixed to the original or a certified copy of a document bearing a recognised signature, seal, or stamp. Photocopies are typically not acknowledged unless they are authorised by a recognised authority. Rejection of a submitted document lacking a recognised seal, stamp, or signature is common.
Timing is another crucial consideration. The apostille certificate process can be time-consuming, especially if conducted via mail. It is crucial to consider these deadlines, particularly if the document must be completed by a certain date.
A second potential issue is the failure to determine whether the recipient country is a member of the Apostille Convention. The apostille certificate is legitimate only in countries that have signed the Hague Convention. If the document is destined for a non-member state, a consular legalisation process may be required.
Remember that the apostille certificate only verifies the origin of the document and the authenticity of any signatures, seals, or stamps it exhibits. It does not validate the content of the document. This distinction may be relevant when the document's content, rather than its origin, is at issue.
Birth certificates, passports and other identification documents must typically be legalised for international travel. Frequently, these identification documents are required for international transactions, immigration procedures, and employment abroad.
Remember that the apostille certificate only verifies the origin of the document and the authenticity of any signatures, seals, or stamps it exhibits. It does not validate the content of the document.
Marriage and divorce certificates are frequently required to prove marital status when applying for a spouse's visa or immigrating with a spouse. When applying for certain categories of visas or remarrying abroad, divorce certificates are required.
Diplomas, transcripts and other academic documents must often be legalised for study abroad programmes, international employment and immigration purposes. It verifies that the credentials were earned from a reputable institution and are genuine.
Documents such as articles of incorporation, meeting minutes, powers of attorney and contracts are included in Business and Corporate Documents. Businesses extending abroad or engaging in international transactions frequently require these documents to be legalised to establish their business legitimacy.
The authentication of court orders, affidavits and other legal documents may be necessary for their use in international legal proceedings or business transactions. Documents pertinent to international adoption, guardianship and inheritance disputes may fall under this category.
If a property is being purchased, sold, or transferred internationally, deeds, land registration documents and mortgage agreements may need to be authenticated.
Certain medical records or health certificates may require legalisation for travel or relocation, especially if a specific medical condition must be declared.
In cases of international probate disputes or repatriation of remains, it may be necessary to authenticate a death certificate.
Each of these documents has its own procedure for notarisation and legalisation, based on the regulations of the issuing country and the country where the document will be used. All such documents are required to bear the original signature, mark, or seal of a recognised authority.
Before commencing the notarisation and legalisation process, it is essential to determine which documents, if any, require legalisation. This may include corporate documents, contracts, financial documents and other confidential data. Understanding the specific requirements of the foreign jurisdiction where the documents will be used is also crucial, as different countries have variable recognition procedures for foreign documents.
Employ a notary public. A notary public is a public official authorised to authenticate and certify signatures, authority and capacity on international documents. The notary will ensure that your documents are correctly signed and that the signers are authorised to do so. In addition, they can provide certified copies of documents, which may be required in specific circumstances.
Before commencing the notarisation and legalisation process, it is essential to determine which documents, if any, require legalisation.
Consider using a legalisation service. Employing a legalisation service could be advantageous for businesses handling numerous sensitive documents. These services handle the entire process, from notarisation to acquiring the apostille Certificate from the Foreign, Commonwealth & Development Office (FCDO) and any additional embassy or consular legalisation that may be necessary. This can save the company significant time and effort.
Ensure document security. Sensitive documents often contain confidential information. It is essential to collaborate with dependable professionals who will securely manage your documents. Consider using secure courier services to reduce the risk of document loss or damage.
Notarisation and legalisation can be time-consuming processes, particularly when multiple documents or countries are involved. Consider these timeframes when planning international business activities to avoid unanticipated delays.
Legalisation of international documents is subject to alterations in international law and treaties. It is essential to stay abreast of any developments that could affect your business. A professional legalisation service will keep abreast of these changes as part of their service, making them invaluable in this regard.
Given that each nation has its own legal system and requirements, it can be challenging to grasp the complexities of notarization and legalisation. Whether you are an individual or a business, you must familiarise yourself with these procedures if you want your documents to be acknowledged in foreign jurisdictions.
Given the complexity of the system, it is often advisable to consult with specialists, such as legalisation services or international solicitors, to navigate it effectively. This is especially true for organisations that deal with a significant volume of sensitive documents.
While the Apostille Convention has simplified the legalisation process for its member nations, the situation is different for non-member countries. For these jurisdictions, the process can be more complicated and often requires additional steps, such as embassy or consular legalisation.
Some nations have begun to recognise electronically notarised and legalised documents, also known as e-apostilles, as the world shifts towards digitalisation. Currently, however, not all jurisdictions recognise these. It is essential to keep abreast of these trends and alterations in the countries where your documents will be used.
In addition to this, for notarisation and legalisation processes, original documents or certified copies are required. Always maintain the originals of important documents and handle them with care throughout the process.
Due to the lengthy nature of the legalisation process, planning is essential. Whether you are studying abroad, conducting an international business transaction, or dealing with international legal issues, you must allot sufficient time for the notarisation and legalisation of documents.
Unit 1, The Gatefold Buildings, 36 Blyth Rd, Hayes, London UB3 1AG, UK
Tel: +44 07853 430310
Mihail Florin Gavrila is a notary public and advocate (Higher Rights Criminal Proceedings), regulated by The Faculty Office and the Solicitors Regulation Authority and a member of The Notaries Society. Mihail is qualified in three jurisdictions: England, the Republic of Ireland (non-practising) and Romania (non-practising).He currently works as both a solicitor and a notary, with a focus on his notarial practice, offering a full range of notarial services to personal and business clients.
OCBOCC’s Victor Angelo L Galura takes a close look at mining law in the Philippines, its development over the years and the greatest concerns facing mining companies in the nation.
The following are the primary laws that regulate the ownership of mineral rights in the Philippines:
In addition to the requirements under the Labor Code, the Mining Act also states that all contractors and entities are to strictly comply with safety rules promulgated by the Secretary. This includes DENR Administrative Order No. 2000-98, which provides for the safety and health standards in mining operations. The Mining Act also provides the minimum age of persons who are to be employed in any phase of a mining operation.
The Bureau of Working Conditions (BWC) also issues occupational safety and health standards which must be complied with by all employers in the country. Under these standards, the mining industry falls under the definition of a ‘hazardous workplace’ and must comply with these additional requirements:
From our experience, most conflicts regarding mining laws arise from the issue of ownership over the land in which the minerals are found. Our Constitution provides that the state owns all minerals and other natural resources. It also explicitly provides that: “The exploration, development, and utilisation of natural resources shall be under the full control and supervision of the State.”
Notwithstanding the state ownership of the minerals, this does not completely do away with the rights of the owners of the land in which these minerals are present.
In the Philippine Mining Act, it is provided that “subject to prior notification, holders of mining rights shall not be prevented from entry into private lands and concession areas by surface owners, occupants, or concessionaires when conducting mining operations therein”. This being the case, the contractor authorised by the government to conduct mining operations cannot be prevented by the owners of private lands from mining there. However, these owners must be justly compensated for any damage to the property caused by said mining operations. Conflict arises when there is a disagreement on what would amount to just compensation for the damage done to the property.
In addition to this, if it is necessary to build, construct or install infrastructure on private land for mining operations, the contractor may build these on said private land, subject to the payment of just compensation.
Another point of conflict appears when the land containing the minerals is considered part of the ancestral domain of indigenous people. In this scenario, the Indigenous People’s Rights Act provides that “No ICCs/IPs will be relocated without their free and prior informed consent, nor through any means other than eminent domain. Where relocation is considered necessary as an exceptional measure, such relocation shall take place only with the free and prior informed consent of the ICCs/IPs concerned.”
From our experience, most conflicts regarding mining laws arise from the issue of ownership over the land in which the minerals are found.
Mining companies should ensure they comply with all environmental regulations, including obtaining the necessary permits and licenses, conducting environmental impact assessments and implementing effective environmental management plans. Failure to comply with these regulations can result in fines, penalties, or even closure of operations.
Mining companies should be aware of the rights of indigenous communities and ensure that they are consulted and involved in decision-making processes related to mining activities on their ancestral lands. They should ensure they comply with all labour standards and respect human rights, including those of their workers and local communities.
In addition to the above, mining companies should ensure that benefit-sharing arrangements with local communities are fair and equitable and that local communities receive a fair share of the benefits generated by mining activities.
Finally, mining companies should be aware of the risks of corruption and bribery in the Philippines and ensure that they have effective anti-corruption policies and procedures in place.
In general, mining companies should be proactive in their approach to legal compliance and stakeholder engagement and work closely with local communities, governments and civil society organisations to ensure that mining activities are conducted in a responsible and sustainable manner.
The Philippine Mining Act of 1995 introduced significant changes to the regulatory landscape of mining law in the Philippines. The law required mining companies to conduct environmental impact assessments and implement environmental management plans, as well as introducing a revenue-sharing scheme to ensure that local communities benefit from mining activities.
In recent years, there have been several developments in the regulatory landscape of mining law in the Philippines. In 2012, the government implemented a moratorium on new mining permits and cancelled 75 existing permits due to concerns over environmental damage and social unrest. This was lifted in 2019, but stricter regulations on mining operations, including a requirement for mining companies to set aside funds for the rehabilitation of mining areas and the creation of a trust fund to benefit local communities are implemented. Disputes are usually over land rights, environmental damage, and alleged human rights violations by mining companies.
Mining companies should be aware of the rights of indigenous communities and ensure that they are consulted and involved in decision-making processes related to mining activities on their ancestral lands.
One of the more recent developments is the passing of DENR AO 2021-40, which lifted the ban on open-pit mining. However, this is still subject to restrictions which ensure that the operation of such project would not pose any hazard to public health and safety that might result from ground failure or physical deterioration.
Increased global demand for minerals has led to increased exploration and mining activities in the Philippines, particularly in areas with high mineral potential.
As a counterpoint, there is a growing emphasis on responsible and sustainable mining practices in the Philippines, driven by concerns over environmental damage and the negative social impacts of mining activities. This has led to the development of stricter regulations and standards for mining operations, as well as increased scrutiny from civil society groups and the public.
The mining industry in the Philippines is increasingly using technology and innovation to improve efficiency and reduce the environmental impact of mining activities. This includes the use of drones and other remote sensing technologies to conduct exploration and monitoring, as well as the adoption of cleaner and more sustainable mining processes. Notwithstanding this, small-scale mining is still widely practiced in the country and is expressly allowed under the law.
There is a growing focus on community development in the mining industry in the Philippines, with mining companies working to engage and empower local communities and ensure that they benefit from mining activities. This includes the implementation of benefit-sharing arrangements and the provision of education, health and infrastructure projects in mining-affected communities.
The industry is working to balance economic growth with responsible and sustainable practices, while addressing the needs and concerns of local communities and stakeholders.
Victor Angelo L Galura, Associate
Ortega, Bacorro, Odulio, Calma and Carbonell Law Office (OCBOCC)
Ortega Bacorro Odulio Calma & Carbonell
140 L.P. Leviste St., Salcedo Village 1227 Makati City, Philippines
Tel: +63 28818-2321
Fax: +63 28810-3153
Victor Angelo L Galura is an associate at OCBOCC. He was first admitted to practice law in the Republic of the Philippines in 2017 and his practice covers immigration, corporate law, labour law, IP, mining law and civil and criminal litigation. In addition to his broad experience, he is fluent in both English and Filipino.
OCBOCC has a diversified general law practice and works alongside leading law firms in major cities around the world. It handles all aspects of corporate, commercial and international business transactions, protection and enforcement of intellectual property rights, technology transfers, civil and criminal litigation, admiralty, labour-management relations, taxation, aviation law, estates and trusts, media law, immigration and family law.
The main laws applicable to intellectual property issues in Ecuador are the following:
The Ecuadorian laws that relate to copyright protection are the following:
Finally, the Authority in Ecuador constantly uses the prejudicial interpretations issued by the Court of Justice of the Andean Community.
Concerning filing an application in defense of copyright, as a first alternative, it is possible to file an application for administrative tutelage action before the IP OFFICE (SENADI). In this case, there is no single procedure for applications in defence of copyright, but there is a common procedure for the protection of all IPC rights.
Based on the experience of the applications filed before the IP OFFICE, in cases where the purpose is to safeguard copyright, the moral or patrimonial right to be protected must be clearly specified under the arguments outlined in the application.
With these specifications, the application is admitted for processing and, if deemed necessary, the IP OFFICE can grant provisional precautionary measures at the beginning of the administrative procedure. Subsequently, a term is granted to present evidence and then a final resolution is issued. This type of action is uncommon in Ecuador, as only 61 administrative tutelage actions were filled in 2022.
Another alternative route to obtain judicial precautionary measures is included in the General Code of Procedures in article 133.1, which establishes the possibility for the holder of a right to request preventive measures to avoid or to prevent the infringement or the continuation of the infringement of its intellectual property rights. In this case, once the request is filed, it is admitted for processing and after a hearing is held, the precautionary measures may be ordered.
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Although this mechanism is more expeditious, it becomes complex for the civil judges to determine or know precisely the scope of the copyright in each case. If the precautionary measures are granted, the plaintiff must file a main action within 15 days requesting a declaration of infringement of its intellectual property rights and an order that the defendant pay damages.
It is also worth mentioning that there are no specialised intellectual property judges in Ecuador. Therefore, to protect copyrights, Ecuadorian law allows the authors to resort to both judicial and administrative remedies.
In general, trademark and copyright protection has increased over the last decade.
It is worth mentioning that the IP OFFICE does apply the prejudicial interpretations of the Court of Justice of the Andean Community, which increases the legal certainty around the protection of IP rights in general and copyrights and trademarks in particular.
However, on certain issues, such as the granting of patents of invention, the analysis made by the examiners is almost null and most patents that have been granted in countries of the region fail to be granted in Ecuador, although they use the same legislation.
It is worth noting that the criteria for compulsory licensing of patents have been well developed by the competent authority recently, which is the opposite of what happened in the previous decade. In its latest resolutions, there has been a clear application of the domestic legislation and a wide use of the prejudicial interpretations issued by the Court of Justice of the Andean Community.
Regarding border measures, there has been a change since the authority before whom a request is filed is now the National Customs Service. This change means that internally, between the intellectual rights authority and the customs authority, there is a constant exchange of information that allows more agile work on the part of the customs authority.
There are no specialised intellectual property judges in Ecuador. Therefore, to protect copyrights, Ecuadorian law allows the authors to resort to both judicial and administrative remedies.
It is unlikely that new regulations will be developed about intellectual property in Ecuador during the remainder of 2023.
However, it is expected that IP OFFICE will continue to develop, based on the current regulations, a clearer and more concrete modus operandi about the filing and substantiation of administrative procedures aimed at preventing and sanctioning the infringement of IP rights.
Although unlikely, Ecuador may finally implement a specific law related to medical devices in terms of the intellectual property rights derived from them. Ecuador is one of the few countries that have not legislated specifically on the subject.
Finally, and due to the prejudicial interpretations of the Andean Court of Justice, it is possible that the national legislation will finally be governed by the supranational legislation, especially Decision 486, which indicates fewer inventions as unpatentable compared to the Código Ingenios.
José Meythaler Baquero, President
Sebastián Meythaler Galarza, Head of IP
Edf Josueth González, Av 6 de diciembre, y, Quito 170517, Ecuador
Tel: +593 2-223-2720
E: smeythaler@lmzabogados.com | jmeythaler@lmzabogados.com
José Meythaler is the president and main partner of Meythaler & Zambrano. He has advised several companies in public law, corporate law, intellectual property, competition law, investment arbitration, oil law, banking and pharmaceutical law. As a result of his successful career, he is recommended by several legal publications. He is a referee of the Mediation and Arbitration Centre of the Ecuadorian American Chamber of Commerce and has been president of the Intellectual Property Committee of the Ecuadorian American Chamber of Commerce since 2010.
Sebastián Meythaler is Head of the Intellectual Property Litigation Department and Deputy Head of the firm's General Litigation Department. He specialises in advising transnational corporations, mainly pharmaceutical and agrochemical companies, regarding the defense of their patents, the protection of their test data, their competition rights and the counterfeiting and smuggling of their products. He has written several books on the protection of test data in the Andean Community of Nations, evidence in pharmaceutical patent litigation and patentability criteria in Ecuador.
Meythaler & Zambrano is one of the most prestigious law firms in the Ecuadorian market. Founded in 1995, the firm specialises in national and international legal counseling and litigation for international and domestic corporations. The firm´s highly qualified team focuses on intellectual property, regulatory counsel, competition and antitrust, arbitration and mediation, corporate and commercial affairs, dispute resolution, taxes, public procurement and public law.
In this feature, Spoor & Fisher partner Lance Abramson expands on the trends he has witnessed in the South African IP sector to date and predictions for how the patent scene will develop from summer 2023 onwards.
South African patent law is a most exciting area of law to be practising in during 2023, with a number of dynamic changes lying in the road ahead.
As a starting point and to set the scene: in order to obtain patent protection for an invention in South Africa, the invention needs to be globally new and inventive, which is a requirement for patents in all countries around the world. In legal terms, ‘new’ means that the invention cannot have been made available to the public anywhere in the world and in any way. This includes a public disclosure by written or oral description or use of the invention.
‘Inventive’, in short, means that the difference between the current invention and what is globally available cannot be an obvious difference. Put another way, the invention needs to be not just different but inventively different from what is currently globally available.
In addition to the new and inventive requirement, South African patent law has some exclusions on what can be patented which is also in line with other countries around the world. For example, business methods, mathematical methods and scientific theories are some of the categories that cannot be patented.
A South African patent is obtained by filing a patent application at the South African Patent Office which needs to meet the legal requirements set out in the South African Patent Act and Regulations, some of which are mentioned above.
There is, however, one crucial difference between South African patent applications and patent applications filed in other countries, in that South African patent applications are not examined at the time of filing. As long as all the formalities are completed and the correct fees paid the application will proceed to grant as filed. Only if the granted patent is later challenged or an attempt is made to enforce the granted patent will the courts at that point investigate if the granted patent is valid.
South African patent law is a most exciting area of law to be practising in during 2023, with a number of dynamic changes lying in the road ahead.
This is in contrast to other countries, which have an examination system in which an examiner is assigned to each patent application after filing. The examiner will review the patent application to confirm that the subject matter is appropriate for a patent and that all regulatory requirements have been met, and will then conduct a search and issue an opinion as to whether the described invention is new and inventive or not.
However, the position in South Africa is changing! On 23 May 2018, the South African Cabinet approved the Intellectual Property (IP) Policy of South Africa which proposes, inter alia, the introduction of Substantive Search and Examination (SSE) of patent applications in South Africa. Under this new system, the Patent Office (CIPC) will examine patent applications to determine whether the applications meet the formal and substantive patentability requirements.
In preparation for the proposed patent regime, the Patent Office has already recruited patent examiners who were trained on search and examination by representatives of the European Patent Office (EPO).
The next step of the training started in 2021, which is an experiential learning component in the form of an unofficial search and examination trial period. During this trial period, substantive search and examination of patent applications is carried out and these are sent to patent attorneys who review and respond to the findings. During this phase, the reports will not be legally binding and will not form part of the official application files.
SSE can only officially be implemented once the current South African Patents Act and its regulations are amended to allow for the legislative framework to introduce SSE. The draft of the amendments has not yet been published for public comment, and we do not have any indication as to when the draft will be published. Furthermore, the process of passing a bill, and signing it into law by the South African president, is a lengthy process. However, change is certainly in the air!
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Another interesting area of change of course relates to the rapid development of AI and its impact on practising patent law. One example of this has already occurred where a patent application was filed in a number of countries around the world for an invention autonomously generated by an artificial intelligence, referred to as Dabus (Device for the Autonomous Bootstrapping of Unified Sentience). The challenge has been to determine who should be cited as the inventor (Dabus or its creator) and who owns the invention.
Most patent offices have decided that AI systems cannot be cited as inventors. In South Africa, as there is no examination, as discussed above, the patent application filed here proceeded to grant as South African patent no 2021/03242. It remains to be seen what our courts would hold if this patent was ever challenged or an attempt is made to enforce the granted patent. It is likely, in our view, that the courts would find Dabus was incorrectly cited.
A similar question arises as to who owns the copyright in the work produced by, for example, ChatGPT, and much has already been written about this question in law which has not yet been resolved. There are three possibilities: that the copyright vests in the AI, in the programmer of the AI or in the person that uses the AI to generate the work.
AI tools will most certainly profoundly impact the legal profession. AI tools are already being used to automate drafting tasks currently done by attorneys. This provides efficiency benefits to attorneys and their clients. In the field of patent law, there are already AI tools which can assist a patent attorney to draft and file patent applications, although these tools are not yet ubiquitous.
It is certainly not far away that AI tools will be available to assist patent examiners with the patent examination process described above. Indeed, there are potential opportunities and challenges that AI presents and will present for inventors, patent attorneys and other stakeholders in the patent system.
Most patent offices have decided that AI systems cannot be cited as inventors.
A further area of interesting and rapid development is the digitally immersive world known as the metaverse and its ramifications for IP – including patents. There has been an enormous growth of patent applications which relate to virtual reality technologies in the past five years. These patents relate, for example, to systems for generating and interacting with a virtual reality environment, systems for managing ephemeral locations in a virtual universe and other virtual reality and augmented reality technologies.
Another interesting angle to consider at the intersection of the metaverse and patents is the use of NFTs (non-fungible tokens) to represents patents in the metaverse. For example, the ownership of the patent can be captured and certified in an NFT, which would certify not only who the current owner of the patent is but would also capture, in a way that could not be tampered with, the historical chain of ownership of the patent, for example. This could lead to a huge cost reduction when recording assignments of patents at various patent offices around the world, which is a tedious and costly exercise. Already, IBM and IPwe have teamed up to create the infrastructure for an NFT-based patent marketplace.
For a South African patent attorney, 2023 represents an exciting time to be practising law – the introduction of patent examination, the rise of AI and the metaverse will mean our world in the months and years ahead will be vastly different from what lies behind us. As with all things, this dynamic change brings opportunity to those who are willing to adapt and leverage. At over 100 years old, the law firm Spoor & Fisher clearly have adaptation as part of our DNA and look forward to harnessing all of these changes for the better of our team and clients!
Lance Abramson, Partner
11 Byls Bridge Boulevard, Building No. 14, Highveld Ext 73, Centurion, Pretoria, 0046, South Africa
Tel: +27 11 994 5111
Lance Abramson is a patent attorney and an Attorney of the High Court of South Africa. With more than two decades of experience, Lance brings expertise in the filing of applications in the electric, electronic, software and nanotechnology fields and related litigation. His practice focuses primarily on domestic and international patent and design matters.
Spoor & Fisher is a pan-African IP law firm with over 100 years of history that prides itself on its ability to handle the intricacies involved in registering and enforcing IP in every African country. Its teams comprise specialists in trade marks, patents, copyright, anti-counterfeiting, registered designs, commercial IP, IP audits and all other aspects of IP law.
In this article, Luis Felipe Pellon provides an in-depth look at subrogation actions and the legislation that governs them in Brazil, going on to explore the differences in how such actions are handled by international courts.
According to Brazilian law, subrogation arises from the fulfilment of the obligation by a third party, with the consequent transfer to the new creditor of the rights, lawsuits, privileges and guarantees of the original creditor. Although there is a substitution of persons, the debt is not extinguished and becomes due to this third party, but only on the terms and limits in which the subrogation will occur.
Payment with subrogation is provided for in Articles 346 to 351 of the Brazilian Civil Code and may be legal or conventional. Conventional subrogation arises from the will of the parties and must be expressed in a contract, setting its limits and conditions, so that it is possible for the parties to restrict or extend the rights to be assigned by virtue of the subrogation. On the other hand, legal subrogation arises exclusively from law, from which its operation is independent of any contract or term, with the only necessary prerequisite being the presentation of the receipt of the discharge given by the original creditor.
With regard to insurance, subrogation is governed by Article 768 of the Civil Code, which, by express provision, restricts subrogation to the amount actually paid by the insurer to its insured. In addition, according to that same article, the insurer may exercise its rights only against third parties who are not the spouse, descendants, ascendants, consanguineous or in-law relatives of the insured. However, all these restrictions may be removed in the event that one or more of these persons have intentionally contributed to the occurrence of the indemnified claim.
In this way, whenever there is a deductible or when the value of the damage is higher than the indemnity limit, the insured will be entitled to have against the party responsible for the damage the corresponding excess compensation, simultaneously with its insurer. It is not uncommon to have problems in these situations, especially when the insured receives amounts and gives discharge to the third party without properly safeguarding the rights of its insurer. For this reason, the second paragraph of Article 768 provides that any act of the insured that diminishes or extinguishes the rights of the insurer shall be ineffective.
The insurer may exercise its rights only against third parties who are not the spouse, descendants, ascendants, consanguineous or in-law relatives of the insured.
It is an essential obligation of the insured to collaborate with its insurer for the analysis of the cause and to the extent of the damages, as well as for the identification of its cause and its causative agent. The refusal to cooperate in this regard is grounds for refusal to pay compensation. Much has been discussed about the extent to which the insured can protect or hide certain information by claiming confidentiality agreements. There is, however, an understanding that confidentiality cannot go beyond information about certain industrial processes, never extending to something that gives rise to compensable damages.
It is very common for engineering risk policies and great risks policies in general to contain a large number of co-insureds and even co-beneficiaries. The fact that they are mentioned in this condition in the policy automatically excludes them from the effects of any subrogation. However, it is worth noting here that they cannot intentionally cause a claim. In certain cases, the penalty for this could even mean refusing to pay compensation.
There are several factors stemming from the original contracts taken to insurance which can complicate subrogation. In fact, limiting clauses in the contracts previously concluded between the insured and third parties (service and goods providers), such as limitation of value or exclusion of lost profits from eventual compensation, are quite common. These limits are not valid for the insurer, who finds himself in the contingency of receiving less in subrogation than he paid for the indemnification of the claim. There is also the election of applicable law and jurisdiction and arbitration clauses, whose question is: would it be possible to apply them to an insurer, having been concluded prior to the insurance contract, without the consent of the insurer?
We believe not, because the law of arbitration requires the free will of the parties to agree to the removal of the state jurisdiction. As the insurer did not participate in this decision, the constitutional guarantee of the inalienability of the jurisdiction of the common justice would be hit. The Superior Court of Justice has recognised (REsp 1.962.113/RJ) that the institute of subrogation does not transmit procedural issues.
It is very common for engineering risk policies and great risks policies in general to contain a large number of co-insureds and even co-beneficiaries.
This issue is not unanimous abroad. The Federal Court of Justice of Germany (Bundesgerichtshof) has already faced this question (BGHZ 68, 356) and has also ruled to the effect that the arbitration clause, by removing the natural judge, is not enforceable against those who are not its signatory. The courts of the United States also have a position contrary to the application of the arbitration clause to resolve a dispute in the absence of an expression of will by one of the parties. The United States District Court of New Jersey, in Association of New Jersey Chiropractors et al v AETNA, Inc. et al, based on the precedent set in CardioNet, Inc. v CignaHealth Corp, thus decided on the understanding that there was no express manifestation of the insurer, accepting the arbitration clause.
The Supreme Court of the United Kingdom has also denied the extension of the arbitration clause to a non-signatory, the government of Pakistan, a beneficiary in a contract between a real estate company (Dallah) and a trust, which was extinct after the change of the Pakistani government. The plaintiff company obtained the conviction of the government of Pakistan in arbitration. This, in turn, prevented the enforcement of the award because in the view of the Supreme Court of the United Kingdom, there was no material evidence that the government of Pakistan was a legitimate party to the arbitration agreement.
Several aspects should be checked before initiating a subrogation action. First, on the side of the insurer, verify the existence of co-insurers, since each one responds independently for its share and, therefore, all have to be represented in the action, under penalty of losing the right. Observe the time bar limitation periods which, in some cases (e.g. general stores) are very short. If necessary, file an interruptive protest of the time bar even if the compensation has not yet been paid, which the law provides to the interested party (CC, art. 203).
Also check in the policy if the causative agent is not listed as co-insured or co-beneficiary, and if this makes the action unfeasible. Check the deductibles and other mandatory participations of the insured, as well as if the total loss was greater than the limits of the policy, which should be duly noted in the subrogation action. Check if there is a counter-guarantee agreement; if it complies with the legal requirements, the signatures, grants and the liquidity and enforceability necessary for the execution of the guarantee and recovery of the indemnity against the causative of the damage.
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Next, the original contract, which is the object of the insurance and which binds the third party to the insured, must also be carefully examined. Check if there are indemnification limits imposed by the contract and if there is an arbitration clause and/or legal jurisdiction and venue. Also verify if the evidence characterising the liability of the third party causing the damage is consistent, as well as whether its financial capacity (or insurance coverage) is sufficient to support the payment in case of losing the action.
Luis Felipe Pellon, Founder
Pellon & Associados Advocacia Empresarial
Rua Desembargador Viriato 16, CEP 20030-090, Altavista Building, Rio de Janeiro, Brazil
Tel: +55 21 3824-7800
Luis Felipe Pellon has worked on insurance and reinsurance matters for 30 years, covering all its legal and operational aspects. Luis deals with contracts, claims, lawsuits, arbitration, product development, corporate, tax and governmental issues. Based in Rio de Janeiro and serving clients all over the country and abroad, Luis frequently works with industry associations, especially AIDA WORLD, of which he is a member of the Presidential Council.
Pellon & Associados has a long and special relationship with the insurance market, as a leading law office in the Brazilian insurance market with over 100 lawyers distributed among its offices in Rio de Janeiro, São Paulo and Vitoria. The firm renders a full range of services to insurers, reinsurers, brokers and agents, from consultation to court litigations and administrative proceedings, in all jurisdictions.
This month we have the pleasure of hearing from Nikos Koritsas and Nikos Salakas at Koutalidis Law Firm, both of whom were deeply involved in the PSI process. Sharing first-hand knowledge of the proceedings, they shed light on the many challenges involved in each step and the consequences for Greek society that continue to be felt after ten years.
The Greek financial crisis started to surface in 2009 with a loss of confidence in the officially reported statistical data by the Greek Authorities. Following early elections and a change in the government in October of 2009, the officially reported fiscal deficit was revised through a Statement by the Governor of the Bank Greece from 6%, which was the deficit communicated in August of 2009 pre-election, to “12% of the GDP or higher”. This revealed the weaknesses of the Greek statistical system and triggered an intervention of Eurostat in order to identify and fix said weaknesses, in collaboration with ELSTAT, the Greek statistical authority. Nevertheless, it also led to a loss of confidence of the markets in Greece.
Suddenly, the markets closed for a member of the eurozone, an economic elite currency union which was totally unprepared for such an occurrence and was caught by surprise. The euro was at risk, as contagion for other eurozone members seemed inevitable given their exposure to the Greek sovereign debt.
This led to first rescue package for Greece of €110 billion. As no stability or support mechanism existed in the EU at the time, the package was made available to Greece by certain eurozone members (€80 billion) and the IMF (€30 billion), which was invited to support the process by contributing its expertise in sovereign debt restructuring. The first rescue package came with a memorandum setting out a long list of structural changes as prior actions, aimed at helping Greece to overcome the situation. Nonetheless, it was obvious that it was a temporary and imperfect solution.
In July of 2011, the heads of state of the euro area and EU institutions published a statement acknowledging the efforts made by the Greek government to stabilise public finances and reform the economy. Moreover, the statement made express the intention of eurozone members to further support Greece (with the IMF) through a new program in order to cover the financing gap, estimated at the time at €109 billion. This second program would be made available through the then newly-established rescue fund of the European Financial Stabilisation Mechanism, the European Financial Stability Fund and the European Stability Mechanism, an EU treaty institution established in the meantime in response to the crisis.
The Greek financial crisis started to surface in 2009 with a loss of confidence in the officially reported statistical data by the Greek Authorities.
On the other hand, the statement set the Private Sector Involvement (‘PSI’) as a strict conditionality to the voluntary contribution of the private sector in this burden-sharing. As EU banks and insurance companies were the majority holdings of the Greek Government Bonds (‘GGBs’) in the private sector, a first proposal for the PSI was tested with them, offering four options for exchanging their GGBs with new ones that had longer maturities and implied an NPV loss of approximately 21%. Soon, however, it became apparent that this was not enough, as the macroeconomic projections had further deteriorated for Greece and its sovereign debt was on an unsustainable path.
In October of 2011, the Eurogroup came out with a very comprehensive statement on Greece, stating again its support to Greece but making also clear that the PSI had a vital role in establishing the sustainability of the Greek debt, targeting a 120% debt to GDP in 2020. To achieve this, the private sector was invited to accept a voluntary GGBs exchange with a nominal discount of 50% at the beginning of 2012.
By the end of 2011, the Greek sovereign debt exceeded €350 billion, €205 billion of which were held by the private sector through GGBs. This was the perimeter of the eligible GGBs invited in the PSI exchange.
The PSI is the largest restructuring of sovereign debt to date. But it was not only this that made it unique. One of the most important features of the PSI was the constitution of a steering committee of creditors following the initiative of the Institute of International Finance (‘IIF’) and some of the largest European banks.
The forming of steering committees of creditors was a practice that had been abandoned for several years in sovereign debt restructurings, but given the size of the PSI and the timeframe for its consummation, the private sector creditors decided to move forward with a committee. This committee, which was informally constituted, led the negotiations with Greece, which was undergoing an unprecedented financial and political crisis with riots in the streets on a daily basis and a coalition government with very narrow margins of tolerance by the electorate. Had this steering committee not existed, it is highly arguable whether the PSI would have been completed.
Further, the PSI was structured as a voluntary and majority-based exchange. Although the vast majority of the GGBs was governed at the time by Greek law, which theoretically allowed Greece to simply pass a law imposing a haircut on its creditors, which itself would have exposed Greece to high risk of challenges both under the Greek Constitution and the European Convention on Human Rights, Greece opted for a consent solicitation and the retroactive introduction of collective action clauses in the Greek law-governed GGBs (‘CACs’).
Under these CACs, all Greek law-governed GGBs (aggregating to approximately €172 billion of face value) were treated as one series, whilst quorum for accepting the exchange was set at 50% and majority at 2/3 of those tendering their GGBs. Non-Greek law-governed GGBs (of approximately €19.9 billion face value) and some bonds guaranteed by Greece (of approximately €6.7billion) that were invited in the PSI included their own CACs. This meant that the whole of the range of eligible bonds that were invited in the exchange included CACs, increasing the chances of success and reducing the legal risk for challenges.
The PSI is the largest restructuring of sovereign debt to date.
To avoid contagion risk, GGBs held by the public sector were excluded from the PSI. 31 December 2011 was set as the cut-off date for GGBs eligible for the PSI and so, shortly before its announcement, GGBs of approximately €43 billion face value held by the ECB and €13.5 billion held by national central banks were exchanged with newly issued GGBs with identical characteristics. In this way, public sector GGBs were not invited in the PSI.
On 24 February 2012, Greece announced the invitations for the PSI. Approximately €206 billion worth of GGBs were invited in the exchange, whilst GGBs holders were offered the following for every €1,000 face value of existing GGBs:
The new GGBs would be governed by English law, subject to the jurisdiction of English courts and contain negative pledge and cross-default provisions. Most importantly, however, they were made subject to a co-financing agreement with one of the EFSF facilities, which provided for a pro-rata redemption with the EFSF. This amounted to a face value ‘haircut’ of 53.5% and an implied NPV haircut of 74%. A 90% minimum participation threshold was set by Greece as a condition for the exchange.
On 9 March 2012, the Greek government announced that 91% of the €177 billion Greek law-governed GGBs with the new CACs had been tendered, with 94% of those tendered accepting the exchange. Almost all guaranteed GGBs were exchanged. The acceptance of foreign law-governed GGBs was initially lower, but following two extensions the percentage increased significantly.
Finally, GGBs of €199.2 billion face value participated in the PSI and were exchanged for €29.7 billion of EFSF notes and €62.4 billion of new GGBs. The exchange was successful, paving the way for the second rescue package by the official sector for Greece – this time through the EFSF rather than direct facilities of other EU members – and reducing the risk of a collapse of Greece and the eurozone as a whole.
As is the case in every Greek tragedy, however, someone had to be sacrificed for the catharsis to occur. Undoubtedly, in the PSI drama, these were the Greek banks. With an immediate loss estimated to €38 billion as a result of their participation in the PSI, their regulatory capital ratios fell below minimum regulatory levels overnight. The Hellenic Financial Stability Fund, the investment arm of the Greek government, established in the meantime for supporting the recapitalisation and consolidation of the Greek banking sector with EFSF funds, had to step in and provide immediate support in order to avoid the banking licenses’ immediate revocation by the Bank of Greece (as at the time the ECB had not taken over the regulatory supervision of systemic banks).
As is the case in every Greek tragedy, someone had to be sacrificed for the catharsis to occur.
Three rounds of recapitalisation of Greek banks had to be completed following the PSI in 2013, 2014 and 2015 (involving further private sector involvement) so that the Greek banks could address the regulatory requirements triggered by the PSI, as well as a wave of NPEs and NPLs that was caused by financial crisis. Further, the sector underwent a massive consolidation with just five banking licenses surviving: four systemic and one non-systemic. The very fact that the Greek sovereign debt crisis was not triggered by the banking sector, as was the case in other sovereign debt crises, but rather by unfortunate fiscal policy and public overspending, made the Greek banking drama even bigger.
The restructuring team of Koutalidis Law Firm acted as the Greek counsel to the Steering Committee of private sector creditors, both in the first (but unfinished) attempt for the PSI between July and October of 2011 but also in the actual PSI exchange in 2012. Allen & Overy acted as international counsel in the first attempt, joined by White & Case in the 2012 PSI. The experience gained by our team and the challenges faced were unique.
First of all, the very participation in a legal team composed of leading practitioners from two of the top-tier international law firms, working around the clock for almost five months, was an intensive course on coordination and collaboration. Further, the complexity and challenge of the legal issues of PSI was unprecedented. Ranging from conflicts of laws questions, such as the significance of the so-called ‘local law advantage’ (namely the power of a sovereign to unilaterally amend debt governed by its laws by enacting amendments) and the choice of the clearing system (in Greece) weighted against the governing law (English) for debt instruments such as the GGBs, to constitutional rights issues, such as the compliance with the Greek Constitution of the retroactive enactment of CACs, the number and complexity of the questions and issues raised was unique.
Furthermore, the exposure and experience of advising more than 40 international and Greek banks and insurance companies, through a steering committee organised by the IIF in direct negotiations with the head of government and ministers of an EU sovereign, was a once-in-a-professional-lifetime experience.
Above all, however, the PSI reaffirmed that there are some key principles that must be followed and applied in all kinds of debt restructurings. That was a significant lesson learned for our team. Having all (or as many as possible) of the creditors round the same negotiating table is one of those principles. The ranking of claims should be very carefully considered and respected through intercreditors (such as the co-financing agreement between PSI bondholders and the EFSF), securing for equally ranking claims pari passu and pro rata payments (a matter which resulted in litigation for several years in Argentina’s debt restructuring where this principle was challenged – see NML Capital Ltd v Republic of Argentina).
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Avoiding coercive action, unless absolutely necessary, is another lesson. Coercive action in democracies, even where intense public interest may be served, triggers high litigation risks. Consensual solutions should be preferred. Greece made the right choice in preferring a consent solicitation and an even retroactively enacted set of CACs, leading to a restructuring based on majority decision to a unilateral reduction of its debt imposed through legislative acts, giving Greece a moral high ground, which no judge can ignore.
Burden-sharing by the private sector in large restructurings is also a principle which was confirmed through the PSI. In the aftermath and experience of the Lehman Brothers financial crisis, governments were reluctant to use taxpayers’ money in a debt restructuring even of a sovereign without first seeing the private sector sharing part of the financial burden. This is a principle introduced and cemented also in the legislation and tools developed for bank restructurings and resolutions (SRMR and BRRD, ESM DRI etc.) in response to the Lehman Brothers crisis. In line with this, the effective priority of official sector money through the exemption of the GGBs held by the ECB, the National Central Banks and other Official Sector Institutions from the PSI, was also significant.
This unprecedented experience gained by our team through its participation in the PSI was applied in virtually all of the smaller or larger debt restructurings in which Koutalidis Law Firm was involved post-PSI.
The PSI was one of the key milestones in mastering the Greek financial crisis, but it left deep scars in the Greek economy and society. The financial impact on social security funds, banks and corporates from their participation in the PSI exchange was perhaps unmeasurable. A wave of legal cases and challenges made their way through the Greek courts, the European Court of Human Rights, the International Centre for Settlement of Investment Disputes and any other venue lawyers could think of. Moral, legal and social arguments were ignited and lasted for years before they were settled.
A financial crisis of such size and strength, which lasted for more than a decade, threatened the unity – if not the very existence – of the eurozone, triggered a deep political crisis for several years in Greece and caused the imposition of capital movement restrictions in the Greek banking system for almost four years, required huge sacrifices. With hindsight, these were worthwhile. Greece, leveraging on the reprofiling of its sovereign debt that followed the PSI and the structural changes introduced in response to the crisis, is now one of the strongest-performing economies in the world that has been least affected by economic downturns.
Let’s hope that in the years to come, Greece and its people will not forget the lessons learned from the PSI and the financial crisis and never again will have to make similar sacrifices.
Nikos Koritsas, Managing Partner
Nikos Salakas, Head of Banking & Finance
The Orbit, 115 Kifissias Ave, Athens 115 24, Greece
Tel: +30 210 3607811
E: nkoritsas@koutalidis.gr | nsalakas@koutalidis.gr
Nikos Koritsas is managing partner of Koutalidis Law Firm. Drawing upon his extensive and internationally acclaimed experience in M&A, banking, capital markets, finance and restructuring, he leads the Koutalidis team with excellence-driven client solutions at the forefront of his strategy. Nikos Koritsas is recognised as a top-tier lawyer by IFLR, and his work focuses on challenging undertakings and complicated projects both in the Greek and the international corporate market.
Nikos Salakas is a partner at Koutalidis Law Firm and head of its banking and finance practice. With extensive experience in banking, finance and restructuring, capital markets, project finance and M&A, he is particularly active in complicated domestic and international transactions and has repeatedly been acknowledged by international legal directories for his successful track record, including as a Market Leader by IFLR. Nikos has also served as Chief Legal & Governance Officer and ExCo Member of a Greek systemic bank.
Koutalidis Law Firm is a leading law firm based in Athens, Greece. Founded in 1930, the firm serves major Greek and international corporations as well as significant investment and commercial banks and financial institutions. Koutalidis’s 60-strong team of legal experts have been recognised by numerous bodies for their excellence, including Chambers and Partners and The Legal 500.
In this feature, Jan Heuvels shares advice on the most effective techniques for arbitrating a multi-jurisdictional dispute, drawing upon experience gained from over 30 years of practice.
To start with, parties involved in an international dispute must carefully consider the choice of the arbitral institution. Different arbitral institutions have their own rules and procedures, which may vary in terms of efficiency and suitability for cross-jurisdictional cases. Some institutions, such as the International Chamber of Commerce (ICC) and the London Court of International Arbitration (LCIA), as well as some other arbitral institutions have a good track record of handling complex international disputes.
Also, the choice of applicable law is a crucial decision that impacts the substance of the dispute. Parties may opt for the law of a related jurisdiction or choose a governing law that is neutral and unrelated to either party's home jurisdiction.
The seat or legal place of arbitration is also significant as it determines the procedural law and supervisory jurisdiction over the arbitration process. The choice of seat affects matters such as the enforceability of the arbitral award and the degree of judicial intervention in the proceedings. Parties should select a seat that is arbitration-friendly and recognised under international conventions, such as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
International arbitration often involves parties, arbitrators and counsel from different countries, speaking different languages and having diverse cultural backgrounds. This presents challenges in communication and understanding. It is important to ensure effective interpretation and translation services are available and arbitrators are chosen with relevant language skills and cultural understanding.
The choice of applicable law is a crucial decision that impacts the substance of the dispute.
One of the primary advantages of arbitration is the enforceability of arbitral awards across multiple jurisdictions. However, the process of enforcing awards can vary from country to country due to differences in national laws and bilateral or multilateral treaties. Parties should consider the enforceability of the award in the jurisdictions where assets are located or where enforcement may be sought.
Some jurisdictions have public policy restrictions that may impact the enforceability or conduct of an arbitration. It is important to understand any limitations or constraints imposed by the local laws of relevant jurisdictions to ensure compliance and avoid potential challenges to the enforcement of the arbitral award.
These can include, for example, multi-party re/insurance arrangements, or commercial disputes involving international contracts, such as cross-border sales, distribution agreements, joint ventures, franchise and licensing arrangements. These disputes can relate to breach of contract, non-payment, quality issues, intellectual property rights, or competition law matters.
Other areas include large-scale construction, procurement and infrastructure projects disputes between owners, contractors, subcontractors and other stakeholders (concerning issues such as delays, cost overruns, defective work, variations in scope, or termination of contracts), or disputes in the energy and natural resources sector, including oil and gas, mining, and renewable energy (involving disputes over concession agreements, production sharing contracts, supply agreements, pricing disputes, or environmental issues). An international dimension is also frequently found in cross-border M&A and shareholder disputes.
As mentioned above, parties involved in multi-jurisdictional arbitrations come from different legal systems with distinct laws, procedural rules and legal traditions. This diversity can lead to challenges in harmonising legal principles, interpreting contractual provisions and applying the relevant laws consistently across jurisdictions.
Determining the applicable law in a multi-jurisdictional arbitration can be complex. Parties need to consider conflict of laws principles and choose the governing law that will govern the substantive issues in the dispute. This decision may have implications for the interpretation of the contract, the availability of remedies and the standards applied to assess liability and damages.
Parties, arbitrators, legal counsel, and witnesses will likely have diverse languages and cultural backgrounds. Language barriers can complicate communication and lead to misunderstandings. Cultural differences may impact negotiation styles, approaches to dispute resolution and expectations regarding procedural fairness.
Each jurisdiction has its own procedural rules and practices governing arbitration proceedings. These differences can relate to the appointment and qualifications of arbitrators, disclosure obligations, document production, the conduct of hearings and the admissibility of evidence. Parties and arbitrators must navigate these variations, ensuring compliance with the applicable rules and achieving procedural fairness.
Determining the applicable law in a multi-jurisdictional arbitration can be complex.
Enforcing arbitral awards across multiple jurisdictions can be challenging. As mentioned above, the New York Convention provides a framework for the recognition and enforcement of arbitral awards, but domestic laws and judicial practices in different jurisdictions can still create obstacles. Parties must carefully consider the enforceability of the award in the relevant jurisdictions and take necessary steps to maximise its effectiveness.
Multi-jurisdictional arbitrations often involve complex party structures, including multinational corporations, joint ventures, or consortiums. Managing the interests, roles and obligations of these parties can be intricate, especially when they have differing objectives, cultures, corporate structures and legal obligations in various jurisdictions.
Prior to the arbitration, an experienced arbitrator will thoroughly research and understand the laws, regulations and procedural rules applicable to the dispute in each relevant jurisdiction. This includes reviewing the governing law, arbitration laws, and any relevant international conventions or treaties.
An experienced arbitrator will then adopt proactive case management techniques, such as setting clear timelines, managing document production, and conducting efficient hearings. Regular communication with the parties and their legal representatives can help address issues promptly and ensure smooth progress of the proceedings.
Organising pre-hearing conferences with the parties and especially with clients in a timely manner and reasonably in advance can help clarify procedural matters, discuss potential challenges, and establish a roadmap for the arbitration process. These conferences provide an opportunity to address jurisdictional issues, choice of law, language considerations and other key aspects upfront.
In my experience, a flexible and tailored approach to the arbitration process is crucial in multi-jurisdictional cases. An experienced arbitrator will consider the specific needs and circumstances of the parties, considering their legal systems, cultural backgrounds, language preferences and any practical limitations they may face. This may involve adapting procedures, accommodating language requirements and allowing for cultural differences in communication and presentation styles.
Technology can be used to facilitate communication and overcome language barriers. Video-conferencing platforms, document management systems and real-time translation services can enhance efficiency and ensure effective communication among parties, arbitrators and witnesses from different jurisdictions.
In my experience, a flexible and tailored approach to the arbitration process is crucial in multi-jurisdictional cases.
Collaborating with co-arbitrators and legal experts who possess knowledge of the relevant jurisdictions can also be beneficial. Co-arbitrators with experience in the applicable legal systems can provide valuable insights and help bridge gaps in understanding. Engaging legal experts familiar with the laws and practices of specific jurisdictions can provide expert opinions and assist in interpreting and applying local laws.
Issues may also arise that require interaction with national courts, such as applications for interim measures, challenges to jurisdiction, or enforcement of awards. An experienced arbitrator should be prepared to coordinate with national courts, understanding the relevant procedures and effectively navigating the interface between arbitration and the court system.
Contacts will include legal professionals with expertise in various jurisdictions. These contacts can provide insights into local laws, regulations and procedural rules, helping the arbitrator understand and navigate the legal landscape in each relevant jurisdiction. They can offer advice on jurisdictional issues, choice of law and specific legal considerations that may arise during the arbitration. Other contacts who are native speakers of different languages and familiar with diverse cultural norms can aid in overcoming language and cultural barriers. They can provide translation services, assist with interpretation during hearings and ensure effective communication between parties, witnesses and the arbitrator. They can also offer guidance on cultural sensitivities, negotiation styles, and expectations, facilitating smoother interactions.
Contacts with expertise in various industries and disciplines can serve as potential expert witnesses in the arbitration, providing specialised knowledge and opinions on technical, financial, or scientific matters relevant to the dispute. They can assist in presenting complex evidence and help the arbitrator understand industry-specific practices and standards. Chambers of Commerce and business contacts in various jurisdictions can provide information on local business practices, commercial customs and potential sources of expert witnesses. They may also assist with finding suitable venues for hearings, arranging logistics and facilitating local support services.
Contacts familiar with local enforcement practices and legal systems can offer insights into the enforceability of arbitral awards in different jurisdictions. They can provide information on local laws, court practices and potential challenges that may arise during the enforcement process, assisting the arbitrator in considering the practical implications of the arbitration.
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An extensive network will also encompass connections with international arbitration institutions, professional organisations and industry associations. These contacts can provide information on best practices, procedural guidelines and resources to support the arbitrator in managing the arbitration effectively.
Effective case management, clear communication and a comprehensive understanding of the legal and cultural nuances across jurisdictions are essential to help achieve a successful resolution. It would be commercially sensible if parties could focus, plan and be advised on at least some of these complexities at the time of entering their contract, deal, or arrangement, and not only when a dispute has already arisen. In my experience, this is unfortunately not always the case.
Jan Heuvels, Solicitor & Europäischer Rechtsanwalt
Grosse Elbstrasse 45, 22767 Hamburg , Germany
Tel: +49 40 5393 1110 | +49 16 2249 5159
Fax: +49 40 5393 1111
Jan Heuvels founded Heuvels Law after 30 years with a leading international law firm specialising in transport, trade, energy and insurance. Today, Jan continues to work with clients using his legal skills and experience – as well as his extensive international network – to help them achieve their commercial and strategic goals. Jan is a recognised dispute resolutions specialist in the international insurance and reinsurance markets. He also assists clients in other markets with their general and commercial disputes by responsibly managing any arbitration, mediation or other ADR proceedings.
But far less known than these are the deals that never left the launch pad. In this feature, we take a close look at those mergers which never managed to achieve completion. Whether foiled by regulatory requirements or simple due diligence failure, they serve as cautionary tales for legal and business professionals – and a tantalising glimpse of what could have been.
In 2014, US-based pharmaceutical giant Pfizer made a play to buy its chief European rival, the British-Swedish pharmaceutical and biotechnology company AstraZeneca. The two firms engaged in aggressive negotiations for close to two months in what might have been the biggest M&A deal in the healthcare sector’s history, with Pfizer making a $118 billion offer to the AstraZeneca board for control of the company.
The deal ultimately came apart due to the buyer’s overconfidence (a theme common in many of the attempted mergers discussed here), as Pfizer’s final offer of £55 per share was rejected by both the Astrazeneca board and its shareholders. However, the move also achieved a lasting effect in the legal sphere by drawing attention to tax inversion loopholes that allowed companies to cut their tax rate by acquiring a foreign rival in a lower-tax country and moving their headquarters there. The US Treasury’s subsequent crackdown on these loopholes has greatly reduced the likelihood of Pfizer making a second play for control of AstraZeneca.
The regulatory impact of the failed Pfizer-AstraZeneca acquisition was felt later in 2014 – once again in the healthcare sector. US-based drug manufacturer AbbVie pursued a merger agreement with Ireland’s Shire Plc, aimed at creating a new company with a market cap of around $137 billion and an employee headcount of 30,000. While not as earth-shattering as Pfizer’s offer for its rival, the $55 billion deal was another major play in the pharmaceuticals market.
Both firms agreed to the deal, but AbbVie’s plans to move its headquarters to the UK isle of Jersey for tax purposes proved its undoing. The US Treasury’s new rule regarding the inversions loophole introduced an "unacceptable level of risk and uncertainty" for the deal as a whole, according to AbbVie chief executive Richard A Gonzalez, which ultimately prompted the buyer to pull out. AbbVie paid a $1.64 billion fee as a result of backing out of the merger, and only recently managed to escape a hedge fund lawsuit over its actions.
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Kraft Heinz’s announcement of plans to buy out consumer goods titan Unilever in 2017 came as a shock to most of the business world, though leaks regarding Kraft Heinz’s intent had begun circulating since before talks between the companies began. The deal promised a paradigm shift in consumer goods and food products, with the Berkshire Hathaway-backed buyer valuing Unilever at an eye-watering $143 billion.
However, the deal folded only two days after it was announced. Kraft Heinz stressed that the decision was made amicably, pointing to the leak of its plans as a key factor in the decision. In the end, however, many legal and business commentators speculated that a culture clash may have been to blame; Unilever was widely known as a pioneer in standards with a focus on sustainability, whereas Kraft Heinz was known as a cost-cutter. If company compatibility was the primary issue, then the collapse of the purchase can be better attributed to a lack of due diligence on the part of deal-makers.
It is easy to overstep when attempting a hostile merger, especially when conditions are interpreted to be more favourable than they are in reality. This was the case with Comcast and its unsolicited attempt to buy out Walt Disney Co. in 2004 in a move to create one of the largest media and entertainment companies in the world. The American telecom giant made an offer that valued Disney at $54 billion, which was quickly rejected by then-chief executive Michael Eisner – who was ousted by Disney shareholders shortly afterwards.
Seeing the move as an indication of the shareholders’ willingness to agree to a merger, Comcast confidently pressed ahead with its takeover attempt. However, the shareholders proved just as reluctant as Eisner, and Comcast was forced to abandon its bid. The two companies have since clashed on a range of other M&A deals, with Comcast launching a counterbid to Disney’s plan to purchase Fox’s entertainment assets in 2017 and a looming showdown on the companies’ joint ownership of Hulu still developing.
Another attempt at a seismic deal in the telecommunications industry, in 1999 MCI WorldCom made a shock announcement of plans to buy Sprint Corp – then its closest competitor – for $129 billion, outbidding BellSouth. If successful, the acquisition would have created an international telecom superpower with control over 35% of the market’s long-distance telecom infrastructure, threatening the dominance of AT&T and its 42%.WorldCom was successful in its bid, with Sprint’s board acceding to the merger.
What put the brakes on the deal was international anti-competition law. The European Commission stepped in to declare that the newly created company would squash competition, leaving the two firms with no path forwards. The deal was abandoned and WorldCom went on to suffer an accounting fraud scandal that bankrupted the company. Ultimately, Sprint was bought out by T-Mobile and WorldCom itself by Verizon in 2006, laying the foundations for the new status quo in international telecom.
In this feature we hear from Cook Islands Finance CEO Alan Taylor, who offers a deep dive into the legislative measures that enable the Cook Islands jurisdiction to maintain a competitive presence in wealth protection.
The strength of the Cook Islands offshore jurisdiction is in its ability to pass laws to meet the needs of today’s society. The Cook Islands has used this ability to focus on what is an essential, but oftenneglected, element of wealth planning – the protection of assets – making it an industry leader in the preservation and protection of wealth. The Cook Islands has developed within its trust, foundation and company laws a wealth protection framework to benefit all HNWIs.
Cook Islands trust law is derived from English common law, as modified by the International Trusts Act 1984 (‘ITA’). In 1989 the ITA was amended to introduce comprehensive asset protection provisions seeking to protect the rights of individuals whose wealth is exposed to those who may attempt to take it by force, litigation or legislation whether through illegal, unethical or immoral means. The new laws were innovative and ground-breaking at the time, their success reflected in the number of jurisdictions that have since copied them in part or in whole.
The asset protection features of the ITA include:
Foreign judgments – a Cook Islands court will not recognise any judgment that is based upon any law inconsistent with the ITA or which relates to a matter governed by the laws of the Cook Islands. Any claim against assets in a Cook Islands international trust must therefore be
commenced de novo in a Cook Islands court.
Forced heirship – no Cook Islands international trust, or any settlement on it, shall be void or voidable, and nor shall the capacity of a settlor be questioned, in the event such trust or settlement may defeat the heirship rights of any person related to the settlor.
Bankruptcy – no Cook Islands international trust or any settlement on it shall be void or voidable in the event of the settlor’s bankruptcy in his home jurisdiction.
Spendthrift beneficiaries – any interest in trust assets given to a beneficiary shall not, during their lifetime, be alienated or pass by bankruptcy, insolvency or liquidation or be seized or taken in execution, by process of law.
The most significant trust law changes, however, were with respect to a creditor’s action against a transfer or transfers to a Cook Islands international trust, strengthening the position of the settlor in protecting his/her wealth. In that regard, the starting point was to abolish the Statute of Elizabeth.[1] From an asset protection point of view it is extremely important that trust assets are not in a jurisdiction which remains subject to the Statute. In its place, rules were enacted with statutory limitation periods providing certainty in determining whether a disposition to a Cook Islands international trust is fraudulent or not.
The Cook Islands has developed within its trust, foundation and company laws a wealth protection framework to benefit all HNWIs.
Those rules are detailed in s 13B of the ITA and include provisions deeming settlements and dispositions of property not to be fraudulent against a creditor in specified circumstances, as follows:
Section 13B(8) of the ITA provides that the date of the cause of action “shall be, the date of that act or omission which shall be relied upon to partly or wholly establish the cause of action”. Where there is more than one act or a continuing omission, the date shall be the date of the very first act or when the omission commenced.
Where a creditor’s claim is not precluded by the above deeming provisions, then the creditor must make a claim in the High Court of the Cook Islands within two years of the date of settlement or transfer of the property in question to the trust (s 13K(2)).
In summary, a creditor must commence an action in a court of competent jurisdiction within one year of the date of the disposition he is claiming against and in the Cook Islands High Court within two years of that same disposition. These rules provide a great deal of certainty for advisers and clients alike as well as the existing and future creditors of those clients.
Where a disposition is within the relevant periods, the creditor may be in a position to challenge that disposition as having been fraudulent. However, in doing so he/she must prove beyond reasonable doubt that the disposition was made with the principal intent to defraud that creditor. The standard of proof is therefore the criminal standard.
Under the ITA, where a fraudulent disposition is deemed to have taken place, it will not void the trust completely. The court will only allow the creditor access to the transfer or disposition the subject of the creditor’s claim. Accordingly, other transfers to the trust and the trust relationship itself will remain on foot.
The new laws were innovative and ground-breaking at the time, their success reflected in the number of jurisdictions that have since copied them in part or in whole.
Since the amendments to its trust laws, the Cook Islands has enacted limited liability company and foundation laws which also incorporate a number of asset protection features.
Limited Liability Companies Act 2008
The Cook Islands Limited Liability Companies Act 2008 (‘LLC Act’) contains several specific features designed to provide and enhance the protection afforded to a client’s wealth when holding, managing and investing assets through a Cook Islands limited liability company (‘CI LLC’).
Foundations Act 2012
The Act incorporates a number of the asset protection features contained in the ITA, including those in relation to foreign judgements and forced heirship rights, but most significantly it has adopted the fraudulent conveyance rules providing dates and events to give certainty to creditors seeking to claim against transfers to the foundation.
Whilst supporting the offshore industry by passing laws to develop and enhance wealth protection, the Cook Islands government has also passed laws and regulations to ensure the Cook Islands is not included in the blacklists published by organisations such as the FATF, OECD and EU. The government’s commitment to meet its international obligations and ensure the Cook Islands is not a target for money laundering, tax evasion and other financial crimes, has cemented its international reputation and good standing ensuring the Cook Islands remains open for business and a wealth protection jurisdiction of choice.
Alan Taylor, CEO
P.O. Box 3255, Clarkes Building, Parekura, Rarotonga, Cook Islands
Tel: +682 21175
E: alan.taylor@cookislands.gov.ck
Alan Taylor is currently the interim CEO of Cook Islands Finance. He graduated from Auckland University in New Zealand with degrees in law and economics and is admitted to the bar in New Zealand, with working experience in the international financial services industry in the Cook Islands, Jersey and Singapore. Alan has held legal, business development and senior management positions in both public and private organisations and is a member of STEP, the Institute of Leadership and Management and the New Zealand Institute of Directors.
Cook Islands Finance is the operating name of the Financial Services Development Authority, the Cook Islands government agency responsible for the promotion and development of the country’s financial services industry. It seeks to increase awareness of the industry internationally in order to generate and sustain long term professional and client relationships.
[1] 13 Elizabeth 1 Ch 5 (1571).
In this article we hear from Jacqueline Waihenya, a highly experienced lawyer and ADR specialist, on how the ADR climate is changing in Kenya.
ADR was formally entrenched in our Constitution, 2010 in Article 159(2)(c) as a principle for exercising judicial authority in Kenya, which laid a constitutional foundation for arbitration and mediation that allowed courts to sanction their use within the court system.
Prior to this, arbitration was practiced in Kenya as an alternative to litigation per the Arbitration Act, 1995 (amended in 2009) based largely on the UNCITRAL Model Law. It was and remains the most prevalent ADR mechanism in commercial disputes. Later on, mediation was introduced as a court-annexed practice in 2012 via our Civil Procedure Act. However, the first cohort of court-annexed mediators were accredited by the Judiciary in 2016. I was accredited as No.005.
However, within Kenyan culture ADR remains widely practiced informally and primarily through negotiation and mediation, especially at family, religious and community levels. Before court accreditation I therefore practiced as a mediator from 2012 and did substantial pro bono work at FIDA Kenya, a female advocate organisation that champions women’s rights. This familiarity with mediation explains its acceptance and uptake in the more formal settings. Parties also appreciate their ability to have a greater say and increased control in the outcome of their cases.
Act No.12 of 2012 introduced mediation into our civil procedure process. It defined mediation as an informal and non-adversarial process where an impartial mediator encourages and facilitates the resolution of a dispute between two or more parties and it specifically excluded sitting judges from being considered mediators.
The Act further created a Mediation Accreditation Committee which certifies, accredits and trains mediators. It is this pool of mediators that become eligible to be appointed to mediate matters under the Court-Annexed Mediation program. Initially the pilot program was confined to Nairobi, the capital city, but mediation has since been devolved around the country to different stations with remarkable success.
The other development which indirectly arose from this Act is the emergence of a number of specialised tribunals which have been brought into force via statute. Examples include the Tax Appeals Tribunal, Sports Tribunal and Energy Tribunal. These pieces of legislation also bear strong provisions empowering Tribunals to adopt ADR in their processes, although they are yet to be harmonised and realised practically.
Within Kenyan culture ADR remains widely practiced informally and primarily through negotiation and mediation, especially at family, religious and community levels.
Though the High Court retains a supervisory role over mediation, arbitration and specialised tribunals, recent developments strongly point towards an entrenchment of the doctrine of exhaustion of primary jurisdiction. It is commendable that our courts by and large support the entrenchment of ADR.
One of the most enduring effects of recognising ADR within the judicial process is that formalisation institutionalisation has provided great advocacy, particularly for mediation and arbitration. Prior to 2016, ADR in Kenya was synonymous with arbitration and was applied mostly within commercial circles for its traditional benefits – that is, it is confidential, lends itself to specialised commercial needs, is generally quicker than litigation and is enforceable as a court judgment.
After 2016, mediation was introduced for commercial cases and cases in the family division, and the increase in demand was immediate. Initially, most mediators were absorbed by the Court-Annexed Mediation program as a secondary profession. However, in due time, a number turned to mediation as their primary profession.
Since then, mediation has experienced a higher than average growth and mediation outfits have turned to ply their trade privately. Insofar as arbitration is concerned, the number of arbitrators has definitely increased and in the ‘State of ADR’ research carried out by the Chartered Institute of Arbitrators, Kenya recorded a trajectory of growth in 2021. These are outright indicators that client demand for ADR services has increased.
Court-Annexed Mediation registers the highest rates of adoption within the family division and these are divided into Children Cases, Matrimonial Property and Probate. In Kenya, divorce mediation is expressly prohibited as conniving, condoning or consenting to a divorce is not allowed under our laws. Commercial mediation has further attracted high-value claims which have been resolved within a fraction of the time that was previously spent on the dispute resolution process. A new area that has also registered significant success is the employment and labour division.
Arbitration remains the most demanded ADR mechanism for commercial disputes. The case of construction disputes is bifurcated as a good number of standard form contracts also provide for construction adjudication prior to the appointment of an arbitrator.
The general attitude towards ADR methods in Kenya is favourable. They resonate with the cultural frameworks of the country and their gradual recognition as formal methods of dispute resolution has enabled strong and decisive dispute resolution stakeholder engagements at the Chartered Institute of Arbitrators Kenya and likeminded institutions such as the Nairobi Centre for International Arbitration (NCIA). These organisations have been enabled to better engage with the judiciary, led by successive chief justices as well as the attorney generals of the country since the promulgation of the Constitution.
Insofar as arbitration is concerned, the number of arbitrators has definitely increased
The judiciary has in fact been the frontrunner in the deepening of mediation. Today, mediation and ADR are recognised by the judiciary as a strong pillar of social transformation in the dispensation of justice.
Having been a member of the National Steering Committee that steered the National ADR Policy which was recently approved by the Kenyan Cabinet I believe that our country’s attitude is positive and we can expect that the practice of mediation, arbitration and construction adjudication will be further streamlined and enhanced.
Kenyan law favours the traditional facilitative mediation model, which can be gleaned from the definition adopted by Act No.12 of 2012. Practically all training institutions train mediators using this model, and where mediators have departed from this in resolving disputes this has formed the basis for challenge in courts. As such, evaluative mediation is not encouraged. Personally, I aim for transformative mediation models where possible, as this lends itself to long-term resolution. In the majority of mediations that I have handled, the time constraint has demanded a facilitative approach.
As Vice Chairperson of the Chartered Institute of Arbitrators Kenya Branch I chaired a taskforce which brought together the mediating community in our first CIARB Mediation Conference in October 2022 under the theme: ‘The Coming of Age for Mediation: Encounter from Africa’. This attracted over 200 delegates in addition to speakers and representation from the Kenyan judiciary, academics, CIARB, NCIA, mediating institutions and individuals from Kenya, Uganda, Rwanda, Tanzania and the UK. The Law Society of Kenya and East Africa Law Society were also present. It provided a platform to share experiences and discuss emerging issues.
I was introduced to arbitration during my pupillage from the perspective of counsel and as they say, one tends to follow in the footsteps of their pupil masters. However, it took me over a decade of practice to take the plunge and acquire formal introduction into arbitration and then mediation and construction adjudication in quick succession. As most ADR professionals will confess, that initial immersion was like a breadth of fresh air. It took determination to unlearn many of the sins that litigation lawyers tend to acquire in the course of adversarial practice, and the journey has been one of self-reflection compounded by the varied responses that I have received from parties depending on the type of ADR at hand.
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Today, I am a Chartered Arbitrator (CIARB), Chartered Mediator (ICMC) and Certified Advanced Construction Adjudicator (CIARB) living the multi-door dispute resolution dream. I have undertaken practical training with FIDIC at Kings College London and locally in Kenya and I am at the tail end of a second LLM master’s degree in International Dispute Resolution. As a neutral in arbitration, mediation and construction adjudication I have had the opportunity to resolve disputes that have been international or domestic in nature.
I believe that each dispute lends itself to a suitable dispute resolution mechanism and I have therefore taken the time to consistently increase my knowledge in arbitration, mediation and construction adjudication. In this way, I equip myself with the right set of tools to engage the appropriate dispute resolution mechanism for each dispute at hand. My journey so far has taken me to the International Mediation Institute (IMI) where I am a Certified Mediator and more recently to the inaugural FIFA Accredited Mediators.
I have had a great opportunity to have a front row seat to the ADR that works and I continue to mediate and adjudicate. I have also had several opportunities to engage in scholarship in mediation, construction adjudication and arbitration by writing articles as well as organising and addressing domestic and international conferences and workshops on the same.
Jacqueline Waihenya, Managing Partner
Moi Avenue, Jubilee Arcade, Third Floor – Office Suite No.13, Mombasa, Kenya
Jacqueline Waihenya is an advocate of the High Court of Kenya and managing partner of JWM Law LLP. Jacqueline is an ADR Expert and a Chartered Arbitrator of the Chartered Institute of Arbitrators (C.ARB/FCIARB), an International Federation of Consulting Engineers FIDIC Legal Professional and a member of the Dispute Resolution Board Foundation (DBRF). She is also a member of the Adjudication Society (London) and its Women in Adjudication branch.
JWM Law LLP is a full service corporate law firm based in Kenya. The firm’s staff handle a wide array of litigation, alternative dispute resolution, corporate governance and other legal matters. The firm also closely monitor events and trends and has developed a strategic sense for their dynamics and direction.
