Asian

Dispute Asian Dispute Review is sponsored by:

Hong Kong International Arbitration Centre

Review
Chartered Institute of Arbitrators, East Asia Branch
Hong Kong Institute of Arbitrators
Hong Kong Mediation Council

Editorial Board Members November 2004

Hong Kong International Arbitration Centre
Peter Caldwell
News
Christopher To
62 News
Chartered Institute of Arbitrators, 64 Useful Websites
East Asia Branch
Winnie Whittaker
66 Forthcoming Events
John Cock
Arbitration
Hong Kong Institute of Arbitrators 67 Minority Share Redemption Disputes Between Shareholders of Finnish
Edwin Chan Limited Liability Companies
Paul Varty Jouko Huhtala, Marko Hentunen, Marcus Möller

Hong Kong Mediation Council 69 CIETAC Financial Dispute Arbitration Rules: Practice and Problems
Andrzej Cierpicki James M Zimmerman and Diarmuid O'Brien
Norris Yang
71 Attempting The Impossible: The New IBA Guidelines On Conflicts of
Consulting and Commissioning Editor Interest in International Arbitrations
Robert Morgan Nick Longley

73 Soybean Contracts and FOSFA Arbitration

Editor and Publishing Director Samuel CC Wong
Diane O'Hare
76 Ex parte or Default Proceedings in International Arbitration
Published by Ben Beaumont
Hong Kong International Arbitration Centre
38/F, Two Exchange Square, Online Dispute Resolution
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79 ICODR 2004: Enhancing Understanding - Part 2
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Benjamin G Davis and Alan Gaitenby
Fax: (852) 2524 2171
Email: adr@hkiac.org Mediation
Website: www.hkiac.org 82 Pioneering an Approach to Mediating Large Disputes
Ian Hanger and John Cooper

86 Towards a New Definition of Mediation

Rhiân Williams

Case Report
91 Wal-Mart Recovers Chinese Domain Name
Gabriela Kennedy and Paloma Wong

(c) Hong Kong International Arbitration Centre, 2004 Book Review

All Rights Reserved
92 Law, Practice and Procedure of Arbitration by Sundra Rajoo
Asian Dispute Review is published quarterly for US$128 per year Robert Morgan
 News

ADR in Asia Conference

The ADR in Asia Conference was held this year at the Island Shangri-La in Hong Kong
on 15 September 2004. ADR in Asia is a conference devoted to arbitration and other
forms of alternative dispute resolution and was organized by the Hong Kong International
Arbitration Centre in conjunction with the Hong Kong Corporate Counsel Association. The
Conference was well attended by over 100 delegates from countries throughout Asia. It
was such a success that it will certainly be held again next
year. The date set down for it is 15 September 2005 - so
please mark your diaries!

62 [2004] Asian DR
News

[2004] Asian DR 63
 Useful websites

TREATIES AND CONVENTIONS ON ARBITRATION

The 1923 Geneva Protocol on Arbitration Clauses Contracting States and Measures Taken by Them for the
On the site of Juris International Purpose of the Convention
http://www.jurisint.org/pub/01/en/doc/150_1.htm http://www.worldbank.org/icsid/pubs/icsid-8/main-eng.htm

Information on the Protocol

The 1966 Strasbourg Convention Providing a Uniform
http://www.jurisint.org/pub/01/en/150.htm
Law on Arbitration
The 1927 Geneva Convention on the Execution of On the site of the Council of Europe
http://www.coe.fr/eng/legaltxt/56e.htm
Foreign Arbitral Awards
On the site of Juris International
The 1972 (Moscow) Convention on the Settlement by
http://www.jurisint.org/pub/01/en/doc/151_1.htm
Arbitration of Civil Law Disputes Resulting from
Information on the Convention
Relations of Economic and Scientific-Technical
http://www.jurisint.org/pub/01/en/151.htm
Cooperation
The 1958 United Nations Convention (New York) on On the site of Juris International (see VII)
http://www.jurisint.org/pub/01/en/doc/161_1.htm
the Recognition and Enforcement of Foreign Arbitral
Awards Information on the Convention
http://www.jurisint.org/pub/01/en/161.htm
On the site of UNCITRAL
http://www.uncitral.org/english/texts/arbconc/58conv.htm
The 1975 (Panama) Inter-American Convention on
The 1961 (Geneva) European Convention on International Commercial Arbitration
International Commercial Arbitration On the site of the Organization of American States (OAS)
http://www.sice.oas.org/dispute/comarb/iacac/iacac2e.asp
On the site of Juris International
http://www.jurisint.org/pub/01/en/doc/153_1.htm
The 1979 (Montevideo) Inter-American Convention on
Information on the Convention
Extraterritorial Validity of Foreign Judgments and
http://www.jurisint.org/pub/01/en/153.htm
Arbitral Awards
The 1962 (Paris) Agreement Relating to Application of On the FTAA site (see V)
http://www.alca-ftaa.org/busfac/comarb/intl_conv/caicmoe.asp#fjaat
the European Convention on International Commercial
Arbitration The 1987 (Amman) Arab Convention on Commercial
Arbitration
On the site of the Council of Europe
On the site of Juris International
http://www.coe.fr/eng/legaltxt/42e.htm
http://www.jurisint.org/pub/01/en/155.htm (click on "English").
The 1965 Washington Convention on the Settlement of
The 1993 OHADA Treaty on the Harmonization of
Investment Disputes Between States and Nationals of
Business Law in Africa (Port-Louis, Senegal)
Other States
On the site of Juris International
On the site of the World Bank/the International Center for
http://www.jurisint.org/pub/ohada/text/text.01.en.html
the Settlement of Investment Disputes (ICSID)
http://www.worldbank.org/icsid/basicdoc/9.htm Information on the Treaty
http://www.jurisint.org/pub/ohada/index_en.html
List of Contracting States
http://www.worldbank.org/icsid/constate/c-states-en.htm

TREATIES AND CONVENTIONS OF

INTEREST TO ARBITRATION AND ADR PRACTICE
1959-1996 Bilateral Investment Treaties The 1965 Hague Convention on the Service Abroad of
On the site of ICSID (see IV) Judicial and Extra-Judicial Documents in Civil or
http://www.worldbank.org/icsid/treaties/treaties.htm Commercial Matters
BIT bibliography On the site of the Hague Conference on Private International
http://www.worldbank.org/icsid/pubs/treatbibl/main.htm Law
http://www.hcch.net/e/conventions/menu14e.html

64 [2004] Asian DR
 Useful websites
The 1968 European Convention (Brussels) on
Jurisdiction and Enforcement of Judgments in Civil and
Commercial Matters
On the European Union's legal research site EurLex
http://www.europa.eu.int/eur-lex/en/lif/dat/1968/en_468A0927_01.html
Consolidated version, incorporating amendments:
http://www.europa.eu.int/eur-lex/en/lif/dat/1998/en_498Y0126_01.html
The 1970 Hague Convention on Taking Evidence
Abroad in Civil or Commercial Matters
On the site of the Hague Conference on Private International
Law
http://www.hcch.net/e/conventions/menu20e.html
The 1971 Hague Convention on the Recognition and
Enforcement of Foreign Judgments in Civil and
Commercial Matters
On the site of the Hague Conference on Private International
Law
http://www.hcch.net/e/conventions/menu16e.html
Supplementary Protocol
http://www.hcch.net/e/conventions/menu17e.html
The 1973 Hague Convention on the Law Applicable to
Products Liability
On the site of the Hague Conference on Private International
Law
http://www.hcch.net/e/conventions/menu22e.html
The 1974 United Nations (New York) Convention on
the Limitation Period in the International Sale of
Goods
On the site of UNCITRAL
http://www.uncitral.org/english/texts/sales/limitcon.htm
The 1978 Hague Convention on the Law Applicable to
Agency
On the site of the Hague Conference on Private International
Law
http://www.hcch.net/e/conventions/menu27e.html
The 1978 United Nations Convention ("Hamburg
Rules") on the Carriage of Goods by Sea
On the site of UNCITRAL
http://www.uncitral.org/english/texts/transpor/hamburg.htm
INVESTMENT TREATY ARBITRATION
A website providing free online access to the text of
international investment law documents and all publicly
available investment treaty awards.
http://ita.law.uvic.ca
The 1980 European Convention (Rome) on the Law
Applicable to Contractual Obligations
On the European Union's legal research site EurLex
http://www.europa.eu.int/eur-lex/en/lif/dat/1980/en_480A0934.html
1998 consolidated version, incorporating the most recent
amendments
http://www.europa.eu.int/eur-lex/en/lif/dat/1998/en_498Y0126_05.html
The 1980 United Nations Convention (Vienna) on
Contracts for the International Sale of Goods
On the site of UNCITRAL
http://www.uncitral.org/english/texts/sales/salescon.htm
The 1986 Hague Convention on the Law Applicable to
Contracts for the International Sale of Goods
On the site of the Hague Conference on Private International
Law
http://www.hcch.net/e/conventions/text31e.html
The 1988 United Nations Convention (New York) on
International Bills of Exchange and International
Promissory Notes
On the site of UNCITRAL
http://www.uncitral.org/english/texts/payments/bilnote.htm#TOP
The 1988 European Convention (Lugano) on
Jurisdiction and the Enforcement of Judgments in Civil
and Commercial Matters
On the European Union's legal research site EurLex
http://www.europa.eu.int/eur-lex/en/lif/dat/1988/en_488A0592.html
The 1992 United Nations Convention (Vienna) on the
Liability of Operators of Transport Terminals in
International Trade
On the site of UNCITRAL
http://www.uncitral.org/english/texts/transpor/ott.htm#TOP
The 1995 United Nations Convention (New York) on
Independent Guarantees and Stand-By Letters of
Credit
On the site of UNCITRAL
http://www.uncitral.org/english/texts/payments/guarant.htm
For further ADR websites please see:
http://www.arbitration-icca.org/directory_of_arbitration_website.htm
http://www.mediate.com/articles/boskey.cfm
[2004] Asian DR 65
 Forthcoming events
Function Title Place Date

Events of 2004
International Commercial Arbitration in the Asia-Pacific Region - Asian Arbitration Conference 2004 Sydney Nov. 3
http://www.hkiac.org/pdf/nov2004-Arbitration%20Conference.pdf
ABA Section of Dispute Resolution, Build Better Corporate Boards: New York Nov. 4-5
Better Decision-Making Through Collaboration.
http://www.abanet.org/dispute/buildbettercorporateboards.pdf
International Commercial Arbitration in Latin America: The ICC Perspective Miami, USA Nov. 7-9
International Chamber of Commerce (ICC)
http://www.iccwbo.org/
International Advanced Arbitration Practice Workshop (IAAP) Paris Nov. 8-9
http://www.iccwbo.org/
Divorce and Custody Mediation - Mediation Training and Consultation Institute (USA) Chicago, USA Nov. 8-12
http://learn2mediate.com/index.php
KLRCA-CIETAC Joint Conference on Business Opportunities & Resolving Trade Disputes - Kuala Lumpur Nov. 9
China & Malaysia Experience
http://www.rcakl.org.my/pdf/cietacbroc.pdf
Divorce and Custody Mediation - Mediation Training and Consultation Institute (USA) Boulder, USA Nov. 15-19
http://learn2mediate.com/index.php
21st Joint Colloquium on International Arbitration - International Chamber of Commerce (ICC) Paris Nov. 19
http://www.iccwbo.org/
Meeting Business Needs in the Middle East - Effective Dispute Resolution for the Region Dubai Nov. 23-24
Dubai International Arbitration Centre
http://www.arbitrators.org/Dubai/DUBAI%20FLYERS%20CIAW.pdf
ABA Judicial Division and Section of Dispute Resolution, Mediation for Judges. Phoenix, USA Nov. 29-Dec3
http://www.hkiac.org/main.html
The 11th Geneva Global Arbitration Forum - International Arbitration Institute Geneva Dec. 1-2
http://www.iaiparis.com/dwnld/agenda/Program%202004.doc/
KLRCA Symposium on The Essentials in Arbitration. Experienced Arbitrators sharing their knowledge, Kuala Lumpur Dec. 7
philosophy & skills
http://www.rcakl.org.my/pdf/fullesstlseminar.pdf
IBA SERL Gas Conference - International Bar Association Berlin Dec. 9-10
http://www.ibanet.org

Events of 2005
ITA -CANACO Workshop in Mexico City: "Arbitral Advocacy and Enforcement of Arbitral Awards." Mexico City Jan. 24
http://www.cailaw.org/ita/
Centre for International Legal Studies, International commercial Arbitration, Mediation, and Dispute Resolution. Steamboat Springs, Feb. 13 -19
http://www.cils.org/ USA
Mediating the Litigated Case Irvine, USA Mar. 17 - 18
http://www.hkiac.org/main.html
Spring Conference of the Institute for Transnational Arbitration's Academic Council: Washington,DC. Mar. 30
"Arbitration and the Involvement of Non-Parties: Transparency, Intervention and Appeal"
http://www.cailaw.org/ita/
99th Annual Meeting of the American Society of International Law: "New World Order or a World in Disorder? Washington, DC. Mar. 30-Apr. 2
Testing the Limits of International Law"
http://www.asil.org/annual_meeting/index05.htm
School of International Arbitration - 20th Anniversary Conference - London Apr. 10 - 12
"Contemporary Problems in International Arbitration"
http://www.ccls.edu/
American Bar Association (ABA), Section of Dispute Resolution, Los Angeles Apr. 14 -16
Seventh Annual Section of Dispute Resolution conference
http://www.abanet.org/dispute/documents/callproposals.doc
18th Annual Summer Professional Skills Program in Dispute Resolution. Malibu, USA Jun. 9 -11
http://www.cailaw.org/ita/
16th Annual ITA Commercial Arbitration Workshop Dallas, USA Jun. 16
http://www.cailaw.org/ita/
IBA International Bar Association 2005 Conference Prague, Sep. 25 -30
http://www.ibanet.org Czech Republic

For more information on these Conferences go to www.hkiac.org and click on Events

66 [2004] Asian DR

Minority Share Redemption
Disputes Between Shareholders of
Finnish Limited Liability Companies
The settling of disputes arising between shareholders in limited liability companies can be complex.
But, in this article, the authors take the reader step by step though the procedures involved in this
process in Finland.
Jouko Huhtala,
Marko Hentunen and
Marcus Möller
D
isputes between shareholders of
Finnish limited liability companies
are often settled in arbitration in
accordance with the Finnish Arbitration Act
(967/1992, as amended, the "Arbitration
Act"). The shareholders may for example
have entered into a shareholders' agreement
that provides for disputes between the
shareholders relating to the company in
question being settled by way of arbitration,
or the articles of association of the
company may contain an arbitration clause.
Pursuant to the Arbitration Act, arbitration
clauses that are contained in shareholders'
agreements that have been executed in
writing, or in the articles of association of a
company, shall be deemed to have the
effect of an arbitration agreement.
However, the Finnish Companies Act
(734/1978, as amended, the "Companies
Act") provides for certain minority share
redemption disputes to be settled by
arbitration, even if there is no arbitration
agreement between the shareholders and
neither the articles of association of the
company nor a shareholders' agreement
between the parties contains an arbitration
clause. According to the Companies Act, a
shareholder holding more than nine-tenths
of the shares of a company and the votes
carried by all shares, shall have the right to
redeem the shares held by the other
shareholders at the going price. On the
other hand, a shareholder, whose shares
Arbitration
may be redeemed in accordance with the
said rule, has the right to demand that his
shares be redeemed. In such a situation,
disputes relating to the right of redemption
and/or the terms and conditions for
redemption (e.g., the redemption price)
shall, unless otherwise agreed between the
shareholders, be settled in arbitration.
With regard to listed companies, the
right and/or duty to redeem shares,
according to the provisions of the
Companies Act, is usually preceded by the
redemption obligation set forth in the
Finnish Securities Market Act (495/1989,
as amended, the "SMA"). Accordingly, a
shareholder, whose holding in a Finnish
listed company exceeds two-thirds of the
voting rights carried by the shares, has a
duty to redeem the remaining shares issued
by the company. It should further be noted
that the articles of association of a
company may include even stricter
redemption provisions that set forth an
even lower threshold for the redemption
duty.
Notwithstanding any stricter redemption
provisions that may apply, a shareholder
whose holding exceeds the nine-tenths
threshold shall, when the said threshold has
been exceeded, without delay, notify the
company that it has the right to redeem the
other outstanding shares of the company. If
the shareholders do not reach agreement
on the terms and conditions of redemption,
the redeeming shareholder shall notify the
company of its redemption claim and the
company is under the obligation to notify
the shareholders of the said claim. The
company shall also apply to the court
having jurisdiction over its registered
domicile, for appointment of a trustee to
look after the interests of absent and
passive shareholders during the redemption
procedure. Where disputes have concerned
listed companies, the trustees have generally
been certified public accountants.
Upon the application of a party claiming
redemption, the Central Chamber of
Commerce of Finland shall, for each
redemption dispute, decide upon the
necessary number of arbitrators, which, in
general, with respect to smaller companies,
is one, and with respect to larger companies,
is three, and appoint the chairman of the
arbitral tribunal. In accordance with its
Arbitration Rules, the Arbitration Institute of
the Central Chamber of Commerce hears
the respondent and requests the respondent
to submit a written reply in response to the
request for arbitration. Where necessary,
the claimant may be required to ensure the
communication to the respondent by
verifiable means of the documents
necessary for such hearing. However, at
this point it should be noted that the rules
of the Arbitration Institute of the Central
Chamber of Commerce are only applicable
as far as the appointment of the arbitral
tribunal is concerned. In other respects the
proceedings are primarily governed by the
provisions of the Companies Act and the
Arbitration Act.
In determining the redemption price,
the arbitral tribunal shall, according to the
Companies Act, take into account all the
relevant circumstances of each individual
case. However, the Companies Act does
not in detail regulate the actual arbitration
[2004] Asian DR 67
 Arbitration
proceedings, and thus the general provisions
of the Arbitration Act are applicable.
With regard to procedure, the
Arbitration Act stipulates, among other
things, that the arbitral tribunal must
provide the parties with sufficient
opportunities to present their case. In order
to promote the appropriate and expedient
settlement of the matter, the arbitral
tribunal may ask witnesses or other persons
to appear in order to be heard and request
a shareholder or another person to submit
to the arbitral tribunal any document that
may be of relevance to the case. It has, in
fact, become an established practice to
arrange an oral hearing in disputes relating
to redemption of minority shares in listed
companies.
If the redemption right is not disputed
or if a decision thereon has become final,
but the redemption price has not been
agreed upon or ordered, the redeeming
shareholder has the right to receive title to
the share certificates against the provision
of a security approved by the arbitral
tribunal for payment of the redemption
price (in general, bank guarantees are
approved by arbitral tribunals). In this case
the shareholder is entitled to the going
interest on the redemption price from the
provision of the security until the final
determination of the redemption price.
The arbitral tribunal may issue partial
awards during the proceedings and a final
award at the end of the process. The
arbitral tribunal may further, if the parties
have so agreed, decide by a separate award
a certain issue that is relevant for the
resolution of the dispute, e.g. the existence
of the redemption right in order to enable
transfer of title to the shares as set out
above.
If title to the shares subject to
redemption has not already been transferred
to the redeeming shareholder as set out
above, the holders of the shares must,
within one month from the agreement on
the redemption price or from the date on
which the decision thereon has become
final, deliver the share certificates to the
redeeming shareholder against payment of
the redemption price. If the share certificates
are not delivered, the redeeming shareholder
shall without delay deposit the redemption
price with the county government having
jurisdiction over the registered domicile of
the company. Provided that the appropriate
deposit is made and the redeeming
shareholder does not reserve the right to
reclaim the deposit, title to the shares is, in
this case, transferred to the redeeming
shareholder at the moment the deposit is
made.
A shareholder dissatisfied with the
arbitral award has the right to refer the
matter to a court of law by bringing an
action against the counterparty. The action
shall be brought within two months from
the date when the shareholder received a
copy of the arbitral award.
Generally, the redeeming shareholder is
liable for all costs arising from arbitration
relating to redemption of minority shares.
However, for particular reasons, the arbitral
tribunal may consider it reasonable to order
the original holder of the shares subject to
redemption to be liable for all or part of the
costs.
Jouko Huhtala, Marko Hentunen and
Marcus Möller
Castren & Snellman, Helsinki, Finland

 !"#$%
Hong Kong International Arbitration Centre

Looking for a venue to hold

arbitrations, mediations or
other forms of dispute resolution, seminars
or training courses?
HKIAC offers custom built and comfortable rooms at competitive rates.
For viewing and room booking details, please visit
HKIAC's Website: http://www.hkiac.org
or contact Primrose Law at
tel 2525 2381 / fax 2524 2171 / email adr@hkiac.org

68 [2004] Asian DR

CIETAC Financial Dispute Arbitration
Rules: Practice and Problems
The new CIETAC Rules for Financial Dispute Arbitration are analysed in this article. The authors
have identified certain disadvantages in the administration of CIETAC rules and also in the enforcement
of the decision.
James M. Zimmerman and
Diarmuid O'Brien
I
n April 2003, CIETAC issued rules
designed to provide a summary and
prompt forum for resolving disputes
relating to financial transactions.1 The CIETAC
Financial Dispute Arbitration Rules give a
broad and sweeping interpretation to the
term "financial transactions". This term is
defined as referring to transactions arising
between financial institutions, or arising
between financial institutions and other
natural or legal persons in the currency,
capital, foreign exchange, gold and insurance
markets that relate to financing in both
domestic and foreign currencies. The term
also refers to the assignment and sale of any
and all types of financial instruments and
documents denominated in both domestic
and foreign currencies, including but not
limited to: (1) loans; (2) deposit certificates;
(3) guarantees; (4) letters of credit; (5)
negotiable instruments; (6) fund transactions
and fund trusts; (7) bonds; (8) collection and
remittance of foreign currencies; (9) factoring;
and (10) reimbursement agreements
between banks.2
As the above merely comprises
examples of the types of financial dispute
falling within the remit of the rules, there is
ample scope for other finance-related
disputes to be referred to CIETAC under
these Rules. In order for the financial
arbitration rules to apply, the disputing
parties are required specifically to refer to
the Rules in their arbitration agreement, and
a failure to so specify may result in the
application of the CIETAC's general rules of
arbitration.
Under the Financial Dispute Arbitration
Rules, the parties may agree to a venue
Arbitration
outside China and, a procedure other than
that detailed in the financial rules, which
said procedure will prevail subject to the
approval of the Arbitration Commission.
Arbitrators are required to be selected from
CIETAC's dedicated panel of Chinese
financial specialists.
The Financial Dispute Arbitration Rules
apply a fast-track arbitration procedure.
Notification of acceptance, or otherwise,
of the Application for Arbitration must be
issued by CIETAC within five days of its
receipt of the application. A rejection of an
application must be accompanied by the
reasons therefor. The tribunal may comprise
a sole arbitrator or three - failure by the
parties to designate the number of arbitrators
will result in CIETAC making a determination.
Unless otherwise agreed upon by the
parties, where a sole arbitrator is to be
appointed, such appointment must be
jointly made by the parties, or alternatively,
they must entrust the appointment to the
Chairman of CIETAC, within seven business
days of the date of receipt of the Notice of
Arbitration. If three arbitrators are to be
appointed, each party must effect an
appointment within the foregoing seven
business day period, while the parties are
afforded a second seven-day business
period in which to jointly appoint the
presiding arbitrator - or entrust such function
to CIETAC.
In default of the appointment of any
arbitrator within prescribed time limits, such
appointment will be effected by the
CIETAC Chairman. Consistent with its fast-
track theme, the respondent is granted
fifteen business days to file its defence and
counterclaim, in each case with supporting
documentation. In turn, the claimant has
fifteen business days in which to file an
answer to the respondent's counterclaim, if
any. Considerable flexibility is afforded to
the tribunal in the manner of conducting
the arbitration - the rules provide that the
arbitral tribunal may conduct the arbitration
in "such manner as it considers appropriate"
but must provide reasonable opportunity to
each party to present his case.
The parties may jointly agree on a time
limit for the presentation of evidence, or, in
default of agreement or a determination of
such time by the tribunal, the parties must
submit all evidence and submission
documentation within three days prior to the
date of the first oral hearing of the case.3
Subject to any mandatory rules of law
governing the contract underlying the
dispute, the arbitral tribunal must, in default
of agreement by the parties, apply
international standards in determining the
applicable substantive law. In all cases, the
arbitral tribunal must take into account the
terms of the contract, the usages and
standard practices of the trade, and abide
by the principles of fairness and
reasonableness. An award must be rendered
within forty-five business days from the
date on which the tribunal is formed -
considerably faster than the nine-month
period afforded generally under the CIETAC
Arbitration Rules. If necessary and justifiable,
the CIETAC Secretary-General may extend
the foregoing time limit by up to fifteen
business days. In respect of any matter not
provided for in the financial rules, CIETAC's
general Arbitration Rules will apply.
The introduction of the financial
arbitration rules has paralleled and
complemented CIETAC's jurisdictional
expansion over recent years. A 1998
revision to the arbitration rules expressly
permitted the arbitration of disputes
[2004] Asian DR 69
 Arbitration
involving Foreign Invested Enterprises, while
an amendment in 2000 formally extended
CIETAC's jurisdiction over domestic cases
and placed it in direct competition with
'domestic arbitration institutions' such as
the Beijing Arbitration Commission. 4
N o t w i t h sta n d i n g these h ea l t hy
developments and the observation that
CIETAC's rules generally conform to
international standards, there can be certain
drawbacks to arbitrating before CIETAC.
These are explored below. Indeed, as at
the end of August, CIETAC - including its
branches in Shanghai and Shenzhen - had
received few cases based on the new
financial arbitration rules. According to
CIETAC, only one case has actually been
arbitrated under the new rules, and a
decision is pending. The drawbacks are as
follows:
(a) Administration: Firstly, from a
procedural perspective, the CIETAC
Secretariat plays a considerably greater
role in the administration of the
arbitration than similar arbitration
commissions overseas, thereby limiting
the role of the arbitrators. Secondly,
with CIETAC, arbitrators may only be
selected from CIETAC's drafted list of
approved arbitrators - a separate list of
approved arbitrators has been drafted
for financial disputes. With cases
becoming increasingly more technical
and complex, it can often prove
difficult to select and nominate a
suitable arbitrator from the dedicated
list. Moreover, even where a party finds
Asian
Dispute
Review
70 [2004] Asian DR
a suitably qualified and technically
proficient arbitrator, it can be difficult to
secure his services at relatively short
notice.
(b) Enforcement: An award rendered by
C I E TAC i s a d o m e st i c awa rd ;
accordingly, the successful party will
not benefit from the New York
Convention on the Recognition and
Enforcement of Foreign Arbitral Awards.
A PRC court is entitled to refuse
recognition and enforcement of an
overseas rendered award only in
accordance with the limited criteria set
forth in the Convention. However, such
court may examine a domestically
(mainland Chinese) rendered award on
the basis of the merits of the case. As
CIETAC is a mainland organisation, ipso
facto there are more grounds available
for setting aside and refusing
enforcement of a CIETAC award that
would not apply to an arbitral award
rendered overseas or a Hong Kong
arbitral award. It is noteworthy that the
Financial Dispute Arbitration Rules do
permit the arbitral venue to be located
overseas - consequently, the Convention
would apply to any award rendered by
CIETAC overseas or in Hong Kong.
Having regard to the foregoing, we
recommend parties to seek settlement of
contractual disputes via arbitration at a
location outside China. In practice, while
the Chinese party will normally seek
CIETAC arbitration and the foreign party
overseas arbitration, the eventual outcome
Call for Papers
If you are interested in submitting an article to Asian Dispute Review,
please send it as a Word document by email to:
Diane O'Hare, Editor, Asian Dispute Review:
will depend on the relative strengths and
weaknesses of the parties, their bargaining
positions and general leverage. For
international arbitration, we recommend
the Hong Kong International Arbitration
Centre (HKIAC), the Singapore International
Arbitration Centre (SIAC), or ICC arbitration
which can be located at a venue of choice
(except mainland China). SIA and ICC
rendered awards will be enforceable in
mainland China under the New York
Convention. Those rendered in Hong Kong
(by HKIAC or ICC) will be enforceable in
China under a special arrangement that is
similar to the New York Convention.
James M Zimmerman and Diarmuid O'Brien
Squire, Sanders & Dempsey, Beijing
1 Financial Dispute Arbitration Rules (adopted on 4
April 2003 by the China Council for the Promotion
of International Trade/ China Chamber of International
Commerce).
2 Financial Dispute Arbitration Rules, art. 2. Securities
related disputes are excluded from the Rules.
3 Subject to the agreement of the parties, the
tribunal will determine whether or not to hold oral
hearings. Notification of a hearing must be served on
the parties at least ten working days before the
scheduled hearing.
4 CIETAC's jurisdictional expansion in 2000 is
generally considered a reaction to the 1996
expansion of the arbitral jurisdiction of domestic
institutions to include foreign-related disputes. See
State Council Notice of the Office of the State
Council Concerning Clarification of Several Issues
regarding the Implementation of the Arbitration Law
of the People's Republic of China.
adr@hkiac.org

Attempting the Impossible:
The New IBA Guidelines on
Conflicts of Interest in International
Arbitrations
The IBA's new Guidelines regarding conflicts of interest are explained in this article. Some criticism
is levelled but the author concedes that it is hard to make rules for every situation and notes that
feedback to the IBA will result in refinement of these Guidelines.
Nick Longley
I
n response to an ever increasing
number of challenges to arbitrators, the
International Bar Association (IBA)
assembled a working party to consider and
draft Guidelines on Conflicts of Interest in
International Arbitration (the Guidelines).
The Working Party was led by Otto de
Witt Wijnen, who recently described the
problems that the Working Party had to
address as enormous and complex. Given
that each jurisdiction adopts vastly different
approaches to issues of bias and conflict of
interest and the almost infinite number of
situations in which a conflict of interest
could arise, a better description of the task
might be 'impossible'.
Despite the enormity of the task and
after two years of work, on 22 May 2004,
the Council of the IBA approved and
published the Guidelines. The Guidelines
set out the Working Party's understanding
of the best current practice on the
identification of conflicts of interest and
disclosure rules in international arbitrations.
Although the Guidelines expressly state
that they are not intended to override any
law, the Working Party's stated intention is
to reduce the growing problems of conflicts
of interest and:
help the decision making process,
national laws, judicial decisions [and]
arbitration rules,1
Arbitration
or in other words to create a degree of
uniformity of approach to conflicts of
interest.
The purpose of this article is to provide
an introduction to the main themes of the
Guidelines and provide a cursory
comparison with the current regime for
conflicts of interest in arbitrations in Hong
Kong.
Format of the Guidelines
The Guidelines are set out in two parts.
The first part sets out seven general
principles, called General Standards and
explanatory notes for each Standard. The
second part of the Guidelines is a practical
application, which divides potential conflict
of interest situations into three colour
coded lists. The Red List, which sets out
situations where a conflict of interest exists,
is subdivided into two. The non-waivable
Red List sets out severe conflicts of
interests, where the arbitrator must not act,
whereas the waivable Red List lists situations
where the arbitrator can only act with the
express consent of the parties.
The second list is the Orange List,
which lists situations where a conflict could
exist in the eyes of the parties. The final list
is the Green List, which is a list of situations
where no actual or apparent conflict exists.
Examples from each list appear at the end
of this article.
The General Test for Conflicts of
Interest
General Standards 1 and 2 contain the
general test for when an arbitrator is in a
conflict of interest and cannot serve.
General Standard 1 requires all arbitrators
to be impartial and independent. This
requirement ends when the final award is
handed down and does not continue
during any challenge.
General Standard 2 states that an
arbitrator must not serve when either:
(a) he considers that he has doubts over his
ability to be impartial or independent;
or
(b) if facts or circumstances exist that,
from a reasonable third person's point
of view, having knowledge of the
relevant facts, give rise to justifiable
doubts as to the arbitrator's impartiality
or independence.
The requirement that an arbitrator must
be both impartial and independent reflects
the test in Article 12 of the UNCITRAL
Modal Law but is in contrast to the test in
the Hong Kong Arbitration Ordinance2 or
the English Arbitration Act,3 both of which
only require arbitrators to be impartial.
General Standard 2 (c) sets out a test
for what is meant by 'justifiable doubts'
which are:
If a reasonable and informed third party
would reach the conclusion that there was
a likelihood that the arbitrator may be
[2004] Asian DR 71
 Arbitration
influenced by factors other than the merits
of the case as presented by the parties in
reaching his or her decision.
There are two important differences
between this test and the test for bias set
out in Article 3.3 of the HKIAC Domestic
Rules. First the test in the Domestic Rules is
perhaps broader. Article 3.3 requires an
arbitrator to disclose to the parties any
circumstance likely to create an impression
of bias and requires a proposed arbitrator
not to serve if he has any interest which, if a
party knew of it, might lead him to think
that the arbitrator might be biased. Second,
the Guidelines set out an objective test for
the disqualification of arbitrators, whereas
the disqualification test in Article 3.3 relies
on the subjective views of the parties.
There is a further difference between
the Domestic Rules and General Standard
2. Under Article 3.3, no person can serve
as an arbitrator in any dispute in which that
person has or has had any interest which
might lead a party to think that the
proposed arbitrator might be biased, except
by consent of the parties.
The approach of the Working Party,
however, is that there are some conflicts
that are so severe that an arbitrator cannot
serve and these conflicts cannot be waived
by the parties. Examples of such conflicts
are listed on the non-waivable Red List and
include:
(a) where there is an identity between the
arbitrator and the party, i.e. where the
arbitrator is a director of a party; or
(b) where the arbitrator has a significant
economic interest in the matter at stake.4
The inclusion of a non-waivable list is
perhaps a useful protection for disputants,
particular in Hong Kong, where the practice
of including arbitration agreements in
standard non-negotiable tender documents
means that the consensual nature of the
arbitration agreement is more theoretical
than real.
Disclosure
General Standard 3 sets out the general
test for disclosure by the arbitrator. The
test is that the arbitrator must disclose facts
and circumstances which may:
in the eyes of the parties, give rise to
doubts as to the arbitrator's impartiality and
independence.
72 [2004] Asian DR
The wording reflects the wording used
in the ICC Rules of Arbitration.5 Although
the test for disqualification is objective, this
disclosure test is subjective, placing the
opinions of the parties at centre stage.
However under the Guidelines, party
autonomy has limits. Any issue appearing
on the Green List, in the view of the
Working Party, does not require any
disclosure no matter what the views of the
parties might be. Although a review of the
situations on the Green List might support
the views of the Working Party, there are
obvious difficulties with the drafting. This
difficulty applies to situations listed on both
the Green and Orange lists. Each situation
listed is open to interpretation.
For instance, the arbitrator is under a
duty to disclose the fact that he has a
material shareholding in one of the parties if
it is publicly listed6 but not when that share
holding is insubstantial.7 Similarly there is an
obligation to disclose close personal
friendships with the parties 8 but not
relationships through membership of the
same professional organisation or social
club.9
However, the Guidelines do not and
cannot legislate for every conceivable
situation. The proposed arbitrators must
exercise their discretion to disclose
information in accordance with the General
Standards. General Standard 3 (c) comes
to the aid of the arbitrator. It states that any
doubt as to whether to disclose, should be
resolved in favour of disclosure.
The Lists
The Red List
The two-part Red List sets out those
situations where a conflict of interest could
arise. The situations on the non-waivable
Red List are illustrations of situations deriving
from the principle that no person can be
their own judge and there are two
examples from that list above. The
waivable Red List sets out less severe
situations such as:
(a) where the arbitrator holds shares in a
party of an affiliate; and
(b) where the arbitrator is a lawyer in the
same firm as a firm advising one of the
parties.
The Orange List
The Orange list sets out situations
which could be a conflict and which must
be disclosed. The Orange List includes:
(a) where the arbitrator's law firm currently
acts for one of the parties in an
unrelated matter without creating a
significant commercial relationship; and
(b) where the arbitrator and Counsel are
members of the same chambers.
The Green List
The Green List sets out those situations,
which the Working Group considers do not
raise a conflict of interest and raises no duty
of disclosure. The Green List includes:
(a) where the arbitrator has previously
expressed a general opinion in an
unrelated forum concerning an issue
arising in the arbitration; and
(b) where the arbitrator has previously
worked with one of the Counsel as Co-
Counsel.
Closing Comments
The Guidelines will provide useful
guidance to proposed arbitrators, parties
and their advisers on the approach to
adopt when considering whether a conflict
of interest exists. They might be particularly
useful in arbitrations governed by laws or
rules, which require arbitrators to be both
impartial and independent. It should be
borne in mind, however, that the publication
of the Guidelines is the beginning rather
than the end of the story. The Working
Party has requested feedback on the actual
use of the Guidelines so that consideration
can be given to revision and refinement.
If you would like a full copy of the IBA
Conflict of Interest Guidelines please see
the IBA website (www.ibanet.org).
Nick Longley
Tanner de Witt, Hong Kong
1 The Guidelines - Introduction Para 4.
2 Section 2GA requires an arbitration tribunal to act
fairly and impartially between the parties.
3 See section 24 of the Arbitration Act 1996.
4 General Condition 2 (d).
5 Article 7(2).
6 Orange List Article 3.5.1.
7 Green List Article 4.5.2.
8 Orange List Article 3.4.3.
9 Green List Article 4.4.1.

Soybean Contracts and
FOSFA Arbitration
This article examines FOSFA arbitrations such as those involving soybean contracts. The author
argues the case for choosing Hong Kong as the seat of arbitration instead of London.
Samuel C C Wong
T
rade between China as importer
and the USA, Brazil and Argentina
as exporters in soybean, has
become very significant, reaching an import
figure of 21 million tonnes for China for the
year 2003. Soybeans are imported into
China for crushing: soybean oil is used for
human consumption and soybean meal for
animal feed. This makes China the largest
importer of soybean in the world. However,
the trade in soybean is dominated by a few
international grain traders: among others,
Cargill, Bunge, Dreyfus and ADM. Contracts
are generally made in accordance with the
seller's standard forms of contract, with
arbitration in London per FOSFA (Federation
of Oils, Seeds and Fats Associations ("the
Federation")). This article explores two
questions: (1) whether the standard forms of
contract allow for a fair allocation of risks,
and (2) whether FOSFA arbitration in London
best serves the needs of the parties.
Background
It is timely to explore the above two
issues as a result of the recent suspension
of Brazilian soybean shipments due to
contamination. On 24 May 2004, Notice
No 58 was issued by the Administration of
Quality Supervision, Inspection and
Quarantine of the People's Republic of
China (AQSIQ). The Notice reported that
AQSIQ Guangdong had once again found
pesticide-coated soybeans, so called "red
beans", in a shipment from Brazil. The
exporter was Louis Dreyfus Asia Pte Ltd
and the suppliers to Dreyfus were ADM Do
Brazil, Cargill Agricola SA and Bianchini SA
Industria Comerico E Agricultura. The
Notice, more importantly, announced the
suspension of Louis Dreyfus, ADM Do
Brazil and two other suppliers from
exporting soybeans to China. But there was
an exception: for shipments already en
route, the Notice permitted importation
Arbitration
provided that the cargo complied with the
requirements of AQSIQ. Subsequently,
further notices were issued, such as the
notice of 31 May 2004, which announced
the rejection of a shipment of 58,944
tonnes of soybean on board M/V Nordstra,
by AQSIQ Guangdong. It was found that
there were 2.8 to 4.6 red beans per
kilogram. The pesticide which coated the
red beans was carboxin, a material harmful
to humans and animals.
This caused serious alarm to those
involved in the trade: the importers, the
exporters and the brokers. Shiploads of 50,
000 to 60,000 tonnes of soybeans with
cargo values in excess of US$ 20 million per
shipload were stranded. Applications for
GMO Safety Certificate and GMO Labelling
Certificate for genetically modified soybeans
in accordance with the regulations of the
Ministry of Agriculture of the PRC were
suspended. Likewise, in relation to suspended
exporters, applications by PRC importers for
CIQ Certificates (import permits) for the
discharge of soybean in Chinese ports were
returned and not processed.
There were accusations that the Chinese
Government used quality as a pretext to
depress soybean prices. In fact, soybean
prices did drop dramatically from about
US$ 450 to US$ 300 per tonne. Intense
political pressure was exerted by Brazilian
and US interests and vigorous negotiations
took place. It was eventually agreed that
China would permit resumption of import
of Brazilian beans provided that a limit of
one red bean per kilogram was not
exceeded. This was announced on or
about 22 June 2004. With the resumption
of discharge, the question arose as to which
party should bear the consequences of the
delay and the loss and damage that
accrued as a result. For example: the drop
in the price of soybean; the additional
charter hire due to demurrage; idle plant
capacity due to raw material shortage;
unfulfilled or cancelled contracts and claims
from buyers of soybean oil and soybean
meal. These are matters of the substantive
law of contract and the provisions of the
particular contract governing apportionment
of risks.
Substantive law
This must be the first thing to ascertain.
In fact, from the contracts I have perused
so far, English law applies, even though
none of the contracting parties are English
and the place of performance is China. This
arose out of the incorporation of FOSFA
contract forms. As an example, a Cargill
contract provides:
"This contract is made upon the terms,
conditions and rules, including the arbitration
clauses of this contract, in the form FOSFA
22 in force at the date of this contract....."
Clause 28, the Domicile clause, of
FOSFA 22 provides:
"This contract shall be deemed to have
been made in England and the construction,
validity and performance thereof shall be
governed in all respects by English Law...."
Frustration and Force Majeure
Under English law, a contract can be
discharged by frustration, by breach or by
performance. The consequence under each
scenario is markedly different. Take the
example of the soybean case: if the US
Government imposes a ban, making it
illegal to export soybean due to war1or
prohibition2, or the Chinese Government
bans import due to a change in the law3,
exchange control or, as in this case, due to
the threat of contamination, the contract can
be discharged and both parties can be
excused from performing it. However, the
frustrating event must be one that is beyond
the parties' control. If so, it would be a case of
subsequent impossibility, of supervening
events occurring after the contract was
entered into, making it impossible if not illegal
to perform.
When that happens, what would be the
[2004] Asian DR 73
 Arbitration
consequence for a shipment of soybean that
is en route? If there is no other provision such
as a "force majeure" clause in the contract
which provides for the consequences of the
frustrating event and the contract is held to be
frustrated, all monies paid by the buyers (by
letters of credit or otherwise) before the time
of discharge shall be recoverable from the
sellers4. If this were to happen, it would be
very favourable to the Chinese importers in a
falling market, but this in fact is not the case.
The reason lies in the provisions of the
contracts. The force majeure clause in the
Cargill contract provides that the contract is
subject to the "force majeure clause in
FOSFA 22", while other contract forms
stipulate that the contracts are "subject to
the usual force majeure practices as per
FOSFA". So what do FOSFA 22 and the
usual practices of FOSFA have to say? Not
surprisingly, the force majeure clause only
deals with prevention of shipment and not
with events at discharge. It says: "Should
shipment...be prevented at any time during
the last 30 days of the contract shipment
period by reason of Act of God, strikes,
lockout, riot, civil commotions, fires or
other cause comprehended by the term
Force Majeure at port of loading...the time
allowed for shipment shall be extended to
30 days beyond the termination of such
cause..." and under the prohibition clause in
the event of prohibition of export of the
country of origin, if shipment proves
impossible during the extended 30 days,
any unfulfilled part shall be cancelled.
But this is only one half of the catch.
Under the Import licence and quota clause,
the buyer is required to guarantee "all
import licences/ quota...and any certification
demanded by Chinese authorities beyond
those specified in this contract", an absolute
duty and failure by the buyer to obtain
import licences or quota is "not to constitute
a reason to declare force majeure".
With this in place, all the risk of the
contract falls upon the buyer. In the case of
Bangladesh Export Import Co Ltd (BEI) v.
Sucden Kerry SA 5 , the buyer (BEI) was
under an absolute duty to obtain an import
licence and the contract term stipulated
that inability to obtain one did not constitute
force majeure. Sugar imports were
subsequently prohibited by the Bangladesh
Government after the contract was entered
into. It was held that this prohibition was not
a frustrating event and BEI, unable to
perform, was ordered to pay US$ 2.6
million pursuant to the seller's counterclaim.
74 [2004] Asian DR
These and other features of these
soybean contracts are biased in favour of
sellers in risk allocation, such as terms that
provide for phytosanitary inspection, quality,
condition, and weight to be final at load
port as per independent surveyor at the
seller's option. It leads one to wonder
whether the buyers should collectively
negotiate for more equitable terms.
FOSFA Arbitration
Typically, two types of arbitration
clause are used: (a) arbitration to take place
in London as per FOSFA and (b) arbitration
to take place in Hong Kong or Hong Kong
arbitration as per FOSFA.
Seat of Arbitration
In the absence of any agreement to the
contrary, the procedural law of an arbitration
will be the law of the jurisdiction where the
arbitration is to take place.6 So, for London
arbitration, English procedural law under the
Arbitration Act 1996 would govern. However,
a problem arises in relation to Hong Kong
arbitration. The question is whether Hong
Kong is merely the place of arbitration with
English procedural law to apply or whether the
Hong Kong Arbitration Ordinance (Cap 341)
(the Ordinance) governs. In a soybean contract
that is currently under arbitration pursuant to
clause (b), the Ordinance applies by consent of
the parties. Thus the problem was resolved
without the arbitrators having to decide the
issue. But there are serious differences between
the effect of the Ordinance and the Rules of
Arbitration and Appeals of FOSFA under
English procedural law.
Two-tier system
FOSFA arbitration is a two-tier system.
Firstly, an arbitration takes place before two
arbitrators, one appointed by each party
and, if the arbitrators cannot agree, an
umpire would be appointed to take over
the case. The arbitrators appointed by the
parties then assume the role of advocate/
agent for their respective parties. Secondly,
each party has the right to appeal to the
Federation against the first tier tribunal's
award (the second tier). Under English law,
an appeal is a complete rehearing of the
case. Thus, the award of the first tier
tribunal is not final and a repeat of the
hearing is expected in big money cases,
with further costs to the parties.
FOSFA arbitrators
The parties can only appoint as arbitrator
one who is a trading, full broker, or full non-
trading member of FOSFA or a nominated
representative of a trading, full broker or full
non-trading member of the FOSFA. Criticisms
of this system are: (1) that the parties are
limited in their choice of arbitrators; (2)
members of FOSFA or their nominees are
often persons with no legal background or
judicial capacity, and are therefore incapable
of properly adjudicating the cases before
them; (3) the commodities traders belong to
a small community dominated by key
players: the question is whether an arbitrator
appointed in the circumstances from the
FOSFA list can be truly (or perceptibly)
independent and impartial; (4) there is a lack
of Asian representation in the Federation,
with virtually no known practising Asian
FOSFA arbitrator.
Further, an appeal is heard before a
tribunal of five arbitrators, none of whom is
appointed by the parties.
No legal representation at
hearing
Parties may not be represented by
members of the legal profession (Rule 4(g)).
This will prevent or hamper parties from fully
and properly ventilating their cases. Even at
the appeal stage, the Board of Appeal has
the right to decide whether legal
representation at the hearing is granted.
Obscure time bar clause
Under the Procedure for claiming
arbitration and time limits provisions, Clause
2(a) and (b), the Rules of Arbitration of
FOSFA impose a time bar for seeking
arbitration: 21 consecutive days after the
date of discharge of the goods for claims on
quality and/or condition, and 120
consecutive days after the day of final
discharge of the goods for other types of
claim. For the unwary, the need for a party
to dispatch the notice of claim together with
the name of its appointed arbitrator to the
other party and to the Federation within the
above period can be a deadly trap. Failure to
serve the required notice of claim within the
time stipulated results in the claim being
deemed to be waived and absolutely
barred, unless the arbitrators in their absolute
discretion otherwise determine.
Security for costs
Another undesirable consequence of
FOSFA arbitration under English law is the
prospect of a respondent seeking an order
for security for costs. This is a peculiar

aspect of English law put in place to protect
an English defendant or respondent from an
action taken by a foreign plaintiff or
claimant in England. While the arbitration
legislation has been amended so that
security for costs cannot be exercised on
the ground that the claimant is ordinarily
resident or incorporated outside the United
Kingdom, there is no judicial guidance as to
how the tribunal is to exercise its discretion7.
In Bank Mellat8, Kerr and Walker LJJ said that
"the English courts should be slow in
applying the jurisdiction to order security
for costs in international arbitration unless,
in the particular circumstances of each
case, there was some more specific
connection with England other than the
mere fact that the parties had agreed that
the arbitration was to take place there." The
question is whether FOSFA arbitration is
such a specific connection as to trigger the
power to order security for costs. In a
commodity arbitration under FOSFA
involving the writer and governed by English
law, where both parties were foreign,
security for costs was applied for by the
respondent on the ground that there might
be difficulties in enforcing arbitral awards in
China against the Chinese claimant. This
was notwithstanding that China is a signatory
to the New York Convention9 and regularly
enforces Convention awards.
Hong Kong Procedural law
The UNCITRAL Model Law ("the Model
Law") applies to an international arbitration
conducted in Hong Kong or governed by
Hong Kong procedural law: Part IIA of the
Ordinance. Features of international
arbitration in Hong Kong include the
following:
(1) there is finality of the award10: recourse
against an award is restricted to matters
of procedural unfairness, disputes not
falling within the submission to
arbitration, the composition of the
tribunal not being in accordance with
the agreement to arbitrate, non-
arbitrability under Hong Kong law and
contravention of Hong Kong policy;
(2) unless the parties have agreed the
number of arbitrators, Hong Kong
International Arbitration Centre is
empowered to determine this question11;
(3) the parties are free to agree on a
procedure for appointing arbitrators. Failing
agreement, each party shall appoint an
arbitrator and the two appointed arbitrators
shall appoint the third arbitrator12;
Arbitration
(4) there is no restriction as to qualification
or nationality of an arbitrator, unless
otherwise stated in the arbitration
agreement. Thus, for complex
commercial disputes involving serious
arguments as to issues of law, legally
qualified arbitrators conversant in the
relevant areas of law can be appointed;
(5) there is no restriction against legal
representation at a hearing, whether by
local or foreign counsel: in fact, in most
cases where hearings took place in
Hong Kong, parties were routinely
represented by counsel and solicitors;
(6) intervention by a Hong Kong court is
minimal and circumscribed by the
Model Law13
(7) it is arguable that the tribunal may not have
jurisdiction to order security for costs of
the respondent14 and this accords with the
agreement of the parties to an international
arbitration for the arbitration to take place
in a neutral venue.
A case for Hong Kong arbitration
Disputes involving soybean contracts
between US or Brazilian exporters/traders
and Chinese importer/processors are
matters that fall within the definition of
'international arbitration' under the
Ordinance. It is suggested that Hong Kong
would be a more appropriate seat for such
arbitrations than the UK for the following
reasons:
(1) Hong Kong is a neutral venue acceptable
to both parties;
(2) H o n g Ko n g i s ge o g ra p h i ca l l y
advantageous for both parties and
convenient to witnesses (compared
with travelling to UK to give evidence);
(3) the Hong Kong Ordinance is user-
friendly and fully reflects party
autonomy;
(4) section 2GA of the Ordinance requires
(and permits) the arbitrator to use
procedures that are appropriate to the
particular case15. This would, subject to
contrary agreement by the parties,
unfetter an arbitrator from a set
procedure and allow him the use of
alternate procedures depending on the
complexity of the case, with the aim of
achieving the fair, expeditious and
economical resolution of disputes - the
stated objectives of the Ordinance16;
(5) Hong Kong has a pool of experienced
bilingual arbitrators, experienced
barristers, solicitors and experts in trade
and maritime disputes; and
(6) the common law is a large part of the
substantive law of Hong Kong, as well as
the basis of the commercial law applicable
to many international trade transactions.
By virtue of both 'one country, two
systems' under Hong Kong's Basic Law and
the Closer Economic Partnership
Arrangement of 2003, Hong Kong's role is
to complement mainland China in the
provision of legal or related services for the
ad va n ce m e nt, re g u l a r i s at i o n a n d
furtherance of trade between Chinese and
foreign entities. In this respect, it is submitted
that Hong Kong arbitration is well suited to
serve the needs of both foreign traders and
Chinese business entities in the resolution of
international commercial disputes, of which
the disputes arising out of the threat of
contaminated soybean is but one example.
It is suggested that an arbitration clause
which clearly stipulates Hong Kong as the
seat of arbitration (and applying the
UNCITAL Model Law) should be promoted
for soybean contract disputes.
A recommended arbitration clause could
read as follows:
"Any dispute or difference of any kind
whatsoever which arises or occurs between
the parties in relation to any thing or matter
arising under or out of or in connection with
this contract shall be referred to arbitration
which shall take place in Hong Kong in
accordance with the Arbitration Ordinance
of Hong Kong Cap 341 then in force."
Samuel C C Wong
Barrister at Law and Chartered Arbitrator, Hong Kong
1 Fribrosa v. Fairbairn, Lawson Combe Barbour Ltd
[1943] AC 32.
2 Societe Co-operative Suisse de Cereales v. La Plata
Cereal Co. SA (1947) 80 Ll. L Rep. 530, 542.
3 Nile Co for the Export of Agricultural Crops v. H.& J.
M. Bennett (Commodities) Ltd [1986] 1 Lloyd's Rep 555.
4 Section 1(2) of the Law Reform (Frustrated Contracts)
Act 1943.
5 [1995] 2 Lloyd's Rep 1.
6 Bank Mellat v. Helliniki SA [1984] QB 291.
7 Section 38(3) of the Arbitration Act of 1996.
8 Bank Mellat v. Helliniki Techniki [1984] 1 QB 291 at
292.
9 New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards.
10 Article 34 of the Model Law.
11 Article 10 of the Model Law, as modified by section
34C(5) of the Ordinance.
12 Article 11 of the Model Law.
13 Article 5 of the Model Law.
14 See Article 17of the Model Law (but cf section 2GB
(1)(a) of the Ordinance) and paragraph 13-123 of
Arbitration in Hong Kong: a Practical Guide, Editor in Chief:
the Hon Mr Justice Ma, Sweet & Maxwell Asia, 2003.
15 Section 2GA(1)(b) of the Ordinance.
16 Section 2AA of the Ordinance.
[2004] Asian DR 75
 Arbitration
Ex parte or
Default Proceedings in
International Arbitration
At present there is no unity of opinion among senior arbitration figures as to the proper course
of action to be taken in the event of a default in arbitration proceedings. The author argues that there
is a need for guidance and offers some suggestions to alleviate uncertainty.
Ben Beaumont
E
x parte or default proceedings in
international arbitration occur regularly.
And yet, detailed guidance as to how
to proceed is lacking and opinions are
divided. The adequacy of the process can
be vital to the success or failure not only of
the arbitration process but of any
subsequent enforcement attempt. The
reason appears to be that explicit guidance
would inhibit the tribunal in some
jurisdictions. The majority of parties and
international tribunals would agree that
there is a need for guidelines as to how to
proceed in such circumstances.
The very important question of the
procedure to be used when one party does
not comply with the directions of the
tribunal is not an area much discussed and
yet it is a situation which occurs regularly in
a variety of circumstances and requires ex
parte action.
There are many occasions when one
party may not participate at all in the
proceedings or may not comply with an
order of the tribunal. It is at that stage that
Article 28, of the UNCITRAL Arbitration
Rules applies. Article 28 states:
DEFAULT Article 28
1. If, within the period of time fixed by the
arbitral tribunal, the claimant has failed
to communicate his claim without
showing sufficient cause for such failure,
the arbitral tribunal shall issue an order
for the termination of the arbitral
proceedings. If, within the period of
time fixed by the arbitral tribunal, the
76 [2004] Asian DR
respondent has failed to communicate
his statement of defence without
showing sufficient cause for such failure,
the arbitral tribunal shall order that the
proceedings continue.
2. If one of the parties, duly notified under
these Rules, fails to appear at a hearing,
without showing sufficient cause for
such failure, the arbitral tribunal may
proceed with the arbitration.
3. If one of the parties, duly invited to
produce documentary evidence, fails
to do so within the established period
of time, without showing sufficient
cause for such failure, the arbitral
tribunal may make the award on the
evidence before it.
The key point here is that this article is
mandatory, if the parties adopt the
UNCITRAL Rules unamended, whereas the
authority given in the UNCITRAL Model
Law, Article 25 is only available "unless
otherwise agreed by the parties".
Article 25. Default of a party
Unless otherwise agreed by the parties,
if, without showing sufficient cause,
(a) the claimant fails to communicate his
statement of claim in accordance with
article 23(1), the arbitral tribunal shall
terminate the proceedings;
(b) the respondent fails to communicate his
statement of defence in accordance
with article 23(1), the arbitral tribunal
shall continue the proceedings without
treating such failure in itself as an
admission of the claimant's allegations;
(c) any party fails to appear at a hearing or
to produce documentary evidence, the
arbitral tribunal may continue the
proceedings and make the award on
the evidence before it.
The provisions of the Model Law,
Article 25 (a) and (b), are very similar to
those provisions in the UNCITRAL Rules as
to the power to proceed. However, the
absence of a defence does not permit the
tribunal to treat that absence as an
admission that the issues set out in the claim
or counterclaim are substantiated.
The London Court of International
Arbitration (LCIA) Rules, Article 15(8),
directs that, where a respondent has failed
to submit a statement of defence, then the
tribunal may proceed with the arbitration
and make an award. The ICC International
Court of Arbitration Rules, Article 6(3),
gives a wide and general power to the
tribunal. The tribunal is authorised to
proceed with the arbitration notwithstanding
a refusal or failure to participate in all or part
of the arbitration.
The Model Law, Article 25(c), permits
the tribunal in the above circumstances to
proceed to make an award upon the
evidence before the tribunal. Article 25(c)
specifically refers to a power given to the
tribunal to decide the issue upon the
evidence before it. It is not clear whether
that direction refers to evidence before the
tribunal at the time of the act of default. If
the phrase "on the evidence before it" is the
key condition, then the tribunal must be
instructed, within the applicable rules or law
or by agreement of the parties, as to the
stage in the proceedings when the evidence
is deemed to be before it.
In the alternative the non-defaulting

party could be required to submit all its
evidence and make submissions. There is
no unity of opinion among senior arbitration
figures as to the proper course of action
that should be taken in the event of a
default. The inference is drawn that each
jurisdiction should fall back upon the
procedure that would apply before the
local courts at the seat of arbitration in
litigation involving civil disputes.
Mustill and Boyd in Commercial
Arbitration, (2nd ed, Butterworths, 1989)
discuss default procedures. At page 538
the learned authors emphasise that the
tribunal must keep in mind the need for
adherence to the burden of proof. The
tribunal must not make an award unless the
claimant has proved its case, or likewise the
respondent, where applicable. No authority
is cited for this suggestion.
The authors also state that where the
terms of the arbitration agreement require a
full oral hearing, it will be sufficient for the
tribunal to waive that requirement and
require that such oral evidence be submitted
in sworn form. How this suggestion
improves the search for "the truth", in
achieving the necessary burden of proof, is
uncertain.
In my view the tribunal must examine
the arbitration law at the seat of the
arbitration. If the jurisdiction at the seat of
the arbitration has adopted the Model Law,
Article 25(c), then it is suggested that the
tribunal can decide the dispute upon the
evidence before it at the time of the act of
default. In any event the tribunal should
determine a fair and equitable burden of
proof and inform the parties thereof. The
need to ensure that all necessary evidence
is before the tribunal, in order to be seen to
meet the burden of proof, is vital. It is not
sufficient to issue an order that the claimant
has failed to prove its case. There is a duty
upon the tribunal to require the claimant to
fill the gaps, all the while adhering to the
rules of natural justice, by copying all such
requests, or demands, to the defaulting
party. The requirement is not noted in
Mustill and Boyd. It is submitted that the
defaulting party must be kept supplied with
copies of all correspondence, pleadings,
evidence and submissions up to and
including the issuance of an award.
It must be explicit that unless the non-
defaulting party complies with those
requirements the tribunal will proceed with
Arbitration
the arbitration. However, it may be unable
to establish that the non-defaulting party
has met the burden of proof. There may
arise the issue of a costs order being made
against the non-defaulting party by reason
of its failure to comply. Proofs of evidence
made by means of affidavit or affirmation
must be taken and submitted to the
tribunal. The tribunal will transmit all such
evidence to the defaulting party.
Redfern and Hunter in the Law and
Practice of International Commercial
Arbitration (3rd ed., Sweet and Maxwell,
1999) examine both ex parte hearings and
default awards. The authors, at page 336,
assume that the defaulting party will usually
be the respondent.
Redfern and Hunter do not examine the
situation where there is more than one
party, and only one of those parties is in
default. The example of a recently joined
respondent which fails, from the outset, to
co-operate is apposite. Against which
respondent does the tribunal take default
action, against the defaulting respondent,
both respondents, or all respondents? In
any event the tribunal must act in a way
where this exercise of discretion must be
able to be seen to be carried out fairly and
equitably. Action must be taken against the
defaulting second respondent whatever the
situation of the other respondents.
Redfern and Hunter state that, in any
award issued as a result of exercising a
decision to proceed in default, the tribunal
must state in the award the circumstances
which caused the tribunal to proceed ex
parte. This is a crucial comment. It must be
adhered to rigorously.
Redfern and Hunter state that the
tribunal has no authority to issue an award
in a procedure similar to a default judgment.
It is suggested that the learned authors are
not correct. The commentary to the Model
Law makes quite clear that the Working
Group was unwilling to spell out a detailed
procedure for fear of clashing with the
default procedures in individual jurisdictions
(Sixth Working Group Report, para 83).
83 As regards the three variants presented
in subparagraph (b), the Working Group,
after deliberation, adopted the wording
of variant B. That wording, while
according certain discretion to the
arbitral tribunal, contained a
limitation which was considered
useful in view of the fact that under
many national laws on civil
procedure default of the defendant
in court proceedings was treated as
an admission of the claimant's
allegations. (Emphasis added)
It is clear, in my view, that the Working
Group anticipated that a default without proof
procedure would be acceptable in international
arbitration. Paragraph 71 of the First Working
Group Report supports this conclusion.
71. However, divergent views were
expressed as to whether the model
law should contain a provision to
that effect which would set forth
the conditions for such continuation.
Under one view, an attempt should
be made to formulate the conditions
for such continuation......Under
another view, it was not practical to
regulate this issue in the model law,
since such regulation might not be
readily acceptable in some countries
in view of their general position on
ex parte judgements. (Emphasis
added)
The parties may, by agreement,
authorise the tribunal to make an award
using a default procedure, which does not
require the examination of the merits of the
case, and which permits a tribunal to issue
an award in the case of an undefended
claim or, where appropriate, counterclaim.
An arbitral award which suggests the
correct procedure to follow in the absence
of a party is described by Redfern and
Hunter (op cit) at page 170. In the case of
Turriff Construction (Sudan) Ltd. v
Government of the Republic of Sudan
(Survey of International Arbitrations 1794-
1970, Case No. A31), the hearings
continued over 22 days in the absence of
the Sudanese Government. This approach
must be correct where, as in this case,
there is no agreement to the contrary (the
Turriff tribunal had express power under
the submission agreement to proceed in
default). A tribunal, when in any doubt as to
whether the burden of proof has been
achieved must seek further evidence, at the
same time ensuring that the absent party is
not prejudiced. Such attention to detail may
preclude a successful challenge at the time
of enforcement - that the losing party was
deprived of an opportunity of putting its
case (Model Law, Articles 34 (2)(a)(ii); 36
(1)(a)(ii); and New York Convention 1958
Article V 1 (b)).
[2004] Asian DR 77
 Arbitration
The New Zealand Law Commission in
Report No. 20, addressing the adoption of
the Model Law, noted concerns as to the
adequacy of Article 25. As a result an
additional clause 25(d) was enacted which
states: "....if without showing sufficient
cause.....the claimant fails to prosecute the
claim, the arbitral tribunal may make an
award dismissing the claim or give directions,
with or without conditions, for the speedy
determination of the claim." Two issues are
important to note here. By this addition
New Zealand is using the fact that the
Model Law is just that, a Model Law,
capable of adaptation to make it effective in
the view of the Commission. Further New
Zealand, unlike many jurisdictions has retained
the original Article skeleton of the Model
Law. It is regrettable that so many jurisdictions
ignore the original UNCITRAL skeleton while
retaining the concepts. This makes research
very difficult and that is why authoritative
texts such as those by Robert Morgan and
Neil Kaplan are so essential.
A default, without proof, procedure
should be allowed where the parties are
fully aware of the implications and agree
thereto explicitly. The UNCITRAL Rules
could be modified to add an Article 28(4).
This would confer a discretion on the
tribunal to use a clearly stated procedure
after inviting the views of the parties and
then issuing a reasoned determination as to
which procedure would be appropriate.
The submission of a claimant as to why it
should not have to prove its case would be
of interest. The tribunal must choose the
procedure which proves most equitable to
the parties, and is overtly undertaken and
set out in the award.
Ben Beaumont
Barrister (Hong Kong and England & Wales) and
Observer to UNCITRAL

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78 [2004] Asian DR
 Online Dispute Resolution

ICODR 2004:
Enhancing Understanding
Part 2

In a two-part article, the authors discuss the 2004 International Competitions for Online Dispute
Resolution (ICODR). Part one, which was published in the August 2004 issue, gave an introduction to
the ICODR and a detailed examination of the technical procedures involved in the running of the
ICODR. This is the second part of the article in which the role and responsibilities of the Administrator
of the ICODR are examined.

Benjamin G Davis and independence through technical backdoors
or specialised access for one party as
Alan Gaitenby opposed to other parties. Even if the
actions do not amount to claims of fraud,
they may still have the chilling effect of
III. The Administrator's Role
eliminating trust.
against each other in one of the rooms. In
2003, this potential risk led to a very
interesting situation about which I have
reflected at length.
A student mediator from School B
dropped out just before a mediation round

P
robably the most important lesson I1
learned in creating ICODR is how
m u c h re s p o n s i b i l i t y fo r t h e
independence and neutrality of Online
Dispute Resolution systems rests on the
shoulders of the administrator. Equality of
treatment in design of the spaces is an
essential component. As I could dictate
access, there was the possibility that I could
design rooms with or without certain
features for students in the same competition
and no one would necessarily be the wiser.
One side might be given a "backdoor"
access that the other side did not have.
Only by exchanging passwords (which
would be hard to do since the students did
not know who was in which room) would
students see what other rooms looked like.
Clearly, to be able to say one had set up a
fair competition, the rooms had to be
equal. However, in the real world, with the
pressures of making money, one can
wonder if an administrator for real disputes
might feel pressure to give one side greater
privileges/access than the other. I refer to
this problem as structural independence
tensions that arise, and emphasise here
only the need for great attention to
eliminating even the appearance of lack of
The level of trust in the administrator that
is required rises when the role of the
computer platform is more extensive than
providing a dispute resolution space. In
systems with analytical support, the user
trusts the computer to calculate accurately
the user's preferences to determine the
optimal result. If for some reason,
unbeknownst to one party or the other, the
manner of calculation by the computer (or
algorithm) were to be altered by the
administrator, a suboptimal result could be
unfairly made to appear as an optimal result.
This computer generated optimum may
inadvertently be given more credibility due to
its coming from an ostensibly "neutral"
computer (sometimes called the fourth party)
as opposed to from one or the other party.
In other words, the same issues present in the
offline world of having a reliable neutral as a
third party are also needed when the
technology is being selected.
The random allocation of teams to
rooms was vital so as not, consciously or
unconsciously, to give one party an
advantage. However, perfect randomness
was not possible as at least twice the result
was for students from the same school to
potentially be placed in different roles or
in Room 1 and, thanks to the kindness of
another team's coach, there was a possibility
that a second student from another school
(School A) could serve as a mediator. The
problem was that the mediator in Room 1
had to be switched with the mediator in
another room (Room 2) as one of the
parties in Room 1 also came from School A.
This was done and a place reserved for the
second student from School A to act as a
mediator in Room 2. However, that second
student declined at the last minute and, out
of desperation, I asked one of the students
in the hall at my law school whether he
wanted to participate. He said yes and
ultimately served as mediator in Room 2
where the second student from School A
would have served. The new mediator from
my law school ultimately won a medal in
the competition. I was happy for the
student but I wondered if I had somehow
betrayed the trust of the rest of the
students as, due to the late decline of the
second student from School A, I could have
switched the mediators again so that the
student from my law school would have
served in the original mediation in Room 1
rather than Room 2. The result would have
been that the student from my law school,

[2004] Asian DR 79
 Online Dispute Resolution
who had joined late, would have mediated
with completely different students and
might not have scored so highly. Did I
somehow favour the student from my
school? I reflected at length on this and
remembered my rationale had been that I
had already changed these rooms once and
did not want to create greater confusion by
changing rooms again - it did not appear
professional. However, someone else might
think I should have changed everything
back to the original status quo. While I feel
comfortable with my decision, this
experience highlights one burden on the
administrator and more broadly the vigilance
needed by the administrator in selecting the
neutrals for the dispute resolution.
A second concern I had involved a
situation where, again due to last minute
changes, the end result was that the
advocates on both sides of one arbitration
room were from the same law school. This
happenstance came to light just after the
start of the arbitration round and, as an
organiser, I was worried that I had somehow
compromised the competition. With the
other organiser we determined to disclose
our concerns to the teams in that
competition, explain the likely consequences
of a change and invite them to object to the
team placement within a specified period
of time. As it turned out, none of the other
schools objected during the time allowed
for objections and the round went smoothly
from there. However, in thinking over the
experience, it did strike me that the
confidence in the competition was likely
enhanced by our presenting the difficulties
to all the parties rather than keeping it to
ourselves.
A third concern was that I had involved
one participant. As part of the rules, it is
specified that each student participant is to
have a faculty coach. It turned out that one
student had signed up without stating they
had a faculty coach while other students at
that same school did have a faculty coach.
When the first student was not active
enough, the lack of a faculty coach came
to light and a request was made to the
faculty coach for the school to enter into
contact with the quiet student. This
situation created an interesting authentication
problem in which the role of the faculty
coach was now seen in a different light. In
addition to helping the students prepare for
the competition, the faculty coach role
80 [2004] Asian DR
now also was one of a "local authenticator"
letting the organiser of the competition
know that true students are enrolled and
participating. It raised the difficulty of
authenticating persons on the periphery in
a worldwide structure and suggested that
the key is to have local authentication by
someone that is trusted (a chamber of
commerce, a court, an administrative
service, or, as here, a professor). While
competing globally, each local authentication
was a pillar on which the whole ICODR
edifice stood. Trust was being built team by
team, coach by coach.
A fourth concern I had involved the
evaluators. While evaluators came from
around the world, some evaluators accepted
to evaluate more than one or two rooms
while others did not, and many of the
evaluators were American. While in the
past the ultimate results showed a great
diversity of medals won by schools of
various nationalities, I did wonder if legal
culture played a role in the evaluations in a
manner that I did not seek. As a practical
matter, the evaluators were greatly
appreciated for what they did, but even
with many countries represented, some
cultural bias (language or legal culture) may
have crept in. We do not know but will
endeavour to be sensitive to this issue each
year.
In addition, evaluators appeared to do a
better job of completing the specific criteria
evaluations (seven to nine discrete categories
for each team) than in ranking the teams.
Some evaluators only saw one room and
were therefore only able to evaluate two
teams or one mediator or arbitral tribunal.
As a result, we eliminated the ranking by
evaluators and kept the specific criteria
evaluations. This approach appears for now
as the best that we can do.
More intriguing was the discussion in a
recent Online Dispute Resolution Workshop
held at the University of Edinburgh in June
2003. During the Fall of 2002, one
evaluator had visited a law school and had
spoken with students about tactics and
strategies for the ICODR competitions.
Notwithstanding the random allocation of
evaluators to rooms and the anonymous
process, this evaluator was assigned to a
room where a student participant seemed
to be using the strategies and tactics that
the evaluator had mentioned at the Fall
meeting. This illustrates how concern about
independence and neutrality could arise in
an anonymous setting. What I learned from
this is that notwithstanding the most
aggressive efforts of the administrator,
serendipitous things happen. When those
things happen, we must rely on the neutral
or evaluator to figure out what is the right
thing to do. One could think that in an
anonymous setting, the evaluator should
immediately draw the suspicion to the
attention of the administrator (as drawing
the matter to the attention of the teams
would run the risk of loss of anonymity).
The kind of immediate recognition that
would happen in face-to-face dispute
resolution was not possible here. This text-
based setting suggests a real need to be
extremely careful in reading what is put in
the room. Suspicions might be acted on
early to make sure that no improper
contact had occurred. Some might think
that the evaluator should not have
participated in the competition after his
suspicion had been aroused. One could
also think that a vague hunch was simply
not enough to have an evaluator removed.
Transposing these concerns to a situation of
a real dispute, one wonders if more
extensive care concerning the appearance
of independence is important to the online
dispute resolution environment in order to
help it flourish. No clear answer arose in
the discussion, but it brought forth another
aspect of the Online Dispute Resolution
environment and a vital exchange of ideas.
At the end of the day, as the
administrator, I have to ask myself whether
each student was given a fair opportunity
to compete on a level playing field in the
year's ICODR. I feel that we have achieved a
fair international competition and this is a
cause for tremendous elation. I think it tells
all students that we are able to design an
easily accessible global competition where
- no matter what the modest means of the
students - they can be judged on their
ability anonymously and by experienced
evaluators. It is not the student's school,
background or how they look, but what
they do in the room that is evaluated.
Having seen students who have done well,
having read the joy of their coaches in
hearing of the students' achievements, and
having seen how impressed some evaluators
have been with the work of the students, I
know that a real sense of accomplishment
has been felt by students in these virtual
 Online Dispute Resolution
competitions. The satisfaction of the
students is as real as that experienced in
any sport or competition in the physical
world. I sensed that a way of conducting
dispute resolution worldwide that is
independent, neutral and global in a way
that so far has only been reserved for the
well-off is possible through these little steps
of alerting law students to the power of the
internet.
I am also greatly appreciative of all
those who make these competitions
possible. In addition to the people behind
the technologies described above, we have
been pleased to have the assistance of the
Harvard Program on Negotiation in the
selection of the mediation problems. The
Hong Kong International Arbitration Centre,
the London Court of International
Arbitration, the International Chamber of
Commerce International Court of
Arbitration, the Arbitration and Mediation
Centre of the World Intellectual Property
Organization, the International Centre for
Dispute Resolution of the American
Arbitration Association, and the Permanent
Court of Arbitration in the Hague have,
over the years, all enthusiastically permitted
us to make reference to them to help with
the realism of the experience. At the heart
of the experience is the Center for
Information Technology and Dispute
Re s o l u t i o n of t h e U n i ve r s i t y of
Massachusetts and the financial support of
the University of Toledo College of Law and
Hamline University School of Law. Without
their assistance, this idea would not have
come this far. Finally, there are the
students, coaches and evaluators. On the
ICODR web page one can see the faces of
some of the students, coaches, evaluators
and organizers2. I find it remarkable how all
share this common experience while
remaining in our home locations. To bring
this point home - the two authors of this
article have now been working together for
over three years on this project and have
never met physically.
IV. The spirit
I was privileged to know and work with
the late Michel Gaudet, former Chairman of
the ICC International Court of Arbitration
and tireless worker at the ICC Institute of
World Business Law. He once told me
about a spirit - a spirit that I had felt in the
room at lunch on Gaudet Day, a day held in
honour of Chairman Gaudet, with 150
sophisticated international lawyers present. I
remember asking an ICC Court counsel,
Odette Lagace, during lunch that day, "Do
you feel something in this room?" Without
us having spoken, Chairman Gaudet wrote
to me a week after Gaudet Day that that
spirit I had felt in the room was the spirit he
had felt when he first went to work with
Jean Monnet in the early 1950s, beginning
the extraordinary task of creating what has
now become the European Union. He
wrote that in his career, whenever he had
felt that same spirit where people were
together, he knew that what was going on
in that place was something that was
helping humanity to progress. I felt honoured
that he had given me that insight to guide
me. I feel this spirit during the ICODR
competitions and I keep a hope alive that
these efforts by all these extraordinary
people are helping humanity to progress in
making a portion of the internet - a dispute
resolution space - a place for connection,
of learning about justice and of hope for
peace. While people have ideas, institutions
such as ICODR help preserve those ideas.
Those institutions eventually have power
and the ultimate question is for what goal
that power is used. I hope that I will be able
to make future ICODR competitions honour
that spirit, which works towards helping
humanity to progress and enhances
understanding for all so that we grow
together.
Benjamin G Davis
Associate Professor of Law,
University of Toledo College of Law
Alan Gaitenby
Adjunct Professor, Legal Studies Department,
University of Massachusetts,
Amherst and Assistant Director of the Center for
Information Technology and Dispute Resolution.
This article is adapted with permission from Kluwer
Law International, (c) 2003, Benjamin G. Davis, ICODR
2003: Helping Humanity Progress, Journal of
International Arbitration, 20(6), 589-597.
1. For ease of reading, we have written this in the
first person using "I" rather than "we" generally
throughout the text.
2. http://www.ombuds.org/cyberweek2003/
icodr2003_pics.html (Last visited March 12, 2004).
For general information, see http://www.odr.info/
icodr.php (Last visited March 12, 2004)
[2004] Asian DR 81
 Mediation
Pioneering an Approach to
Mediating Large Disputes
The type of dispute resolution process chosen should be appropriate to a particular dispute. The
authors have developed a type of dispute resolution which they call a "Senior Executive Appraisal
Mediation" (SEAM). They discuss the effectiveness of this form of mediation in a large and complex
dispute.
Ian Hanger and
John Cooper
B
oth mediation and arbitration are well
established as effective methods of
dispute resolution in Australia -
the latter involving the submission of a
dispute for determination by an independent
third party and the former involving the
resolution of the dispute by mutual
agreement between the parties utilising the
skills of an independent third party.
Not all disputes fit comfortably into
either the mediation or the arbitration
process. We argue that it is essential to
design a dispute resolution process that
suits the particular dispute rather than to try
to make the dispute fit into a process. It is
only through taking this flexible approach
that a number of disputes we have been
involved with have been effectively and
efficiently resolved with our input. The
process that we have recently adopted is a
hybrid one. It is akin to a mini trial but we
have declined to use that term because the
term has different meanings depending on
where you are. We thought that the most
apposite term in Australia was to call it a
"Senior Executive Appraisal Mediation"
("SEAM"). It is based on and adapted from
a procedure described by Sir Laurence
Street in a paper given many years ago. We
have added the word "mediation" after the
words "senior executive appraisal" to
describe better our adaptation of the
process in which we were involved which
requires both appraisal and mediation. It is
a flexible process and we will describe the
nature of the process and our experiences
82 [2004] Asian DR
in dealing with it. In a nutshell it involves an
experienced mediator working with two
senior officers of disputing organisations
who listen to presentations from their own
employees who are in conflict and then
meet with the mediator to resolve the
conflict.
We will deal with the topic under the
following headings:
Needs from an ADR process
Our dispute - the background
Initiation of the process
The protocol
The hearing
Was SEAM effective?
Lessons learned
Which cases are suitable for SEAM?
Needs from an ADR process
An ADR process has four fundamental
needs. It must be economical. It must be
fast. The parties must perceive it to be fair.
It must minimise the risk to the parties.
There are two other needs that it is
desirable to satisfy. The process should be
amicable and it should facilitate an ongoing
relationship between the parties. In order
to meet each of these needs the ADR
process must be flexible.
The mediation process also usually
takes account of the psychological need of
a person to be heard and to be understood.
This is a need which is generally not
satisfied by the litigation or arbitration
process because of their very formal and
rigid nature and the insistence by the
tribunal, quite properly, that all evidence be
relevant and that it be otherwise admissible.
Witnesses are prevented from giving their
account in their way. Instead, they are
asked to answer questions designed to
bring out evidence in the manner the
lawyers think most appropriate. Much
evidence is excluded by rules of evidence
which, while logical to lawyers, are not
logical to their clients. Clients frequently
feel that they have failed to get their
message across to a judge because of the
formal and rigid nature of the process and
the application of the rules of evidence.
They are therefore psychologically
dissatisfied.
Those experienced in mediation work
will have noticed the delight of participants
when given feedback showing that the
mediator understands and acknowledges
the concerns being expressed. In our view
it is part of human nature to want to justify
an action that has been taken, not only to
the opposing party, but also to a significant
other person. That is why, despite the
encouragement of the mediator to look and
talk to the other party, a client will address
the mediator rather than the other party.
Like the ancient mariner, we all have a need
to tell our story to a significant other
person. That need increases if our
company's finances are affected by our
actions or if our own reputation or
prospects are affected. Who better to
satisfy that need than, not only a mediator,
but also the CEO of the company?
During the SEAM hearings the tribunal
must utilise significant listening skills. We do
not suggest for a moment that a SEAM is an
exercise in psychotherapy but one cannot
help drawing on principles applied over
many years in the field of psychology and

psychiatry. Listening involves giving full
attention to the speaker with both body
and mind; acknowledging the speaker by
showing interest in, and respect for, what
the speaker is saying; inviting more
information where such is either helpful to
the panel or the panel feels that it would be
helpful to the speaker to get more off his/
her chest and summarising what a speaker
has said. The process of summarising
serves two purposes:
(a) it ensures to the panel member that he
or she has properly understood the
concerns expressed; and
(b) it reassures the speaker that the message
sent is a message received.
We would suggest for this reason,
where possible, that it is the "opposing"
CEO who should be encouraged to do the
summarising.
The mediator chairing the SEAM panel
has to appreciate that CEOs also like to be
heard and understood and in prive sessions
with CEOs the mediator should apply the
same principles.
Our dispute - the context
The dispute in which we first employed
the SEAM process related to a major road
project in Queensland. The project was bid
as a lump sum design and construct
contract.
It was a very large and complex project
with a very tight delivery period. The
project was made more complex by the
fact that through traffic had to be maintained
during the whole of the construction
period. The contract was quite prescriptive
in terms of performance requirements,
technical requirements, programming and
contractual requirements.
It was alleged that during the course of
the project there were many variations,
directions, ambiguities in documents, and
other contractual issues. It was also alleged
that there were some mistakes in the
sequencing documentation provided by the
principal and problems with other designs
and information provided by the principal.
Finally, it was alleged by the contractor that
the superintendent under the contract had
failed to administer the contract properly.
Essentially, the contractor brought claims
for variations, delay costs, disruption costs,
acceleration costs and damages for breaches
of contract.
The principal alleged that there were
Mediation
failings by the contractor in respect of
design and construction quality and an
entitlement to liquidated and other damages.
The principal also alleged that the
contractor's claims were time barred.
The claims were complex and
significant. The superintendent had not
issued decisions on all of the claims, and
many of the decisions made by the
superintendent had been disputed by one
or both parties. The parties had been
unable to resolve the majority of their
disputes with the assistance of the
superintendent. The relationships between
the parties were strained at all levels; on site
and at different levels of management.
It was considered by the parties that
the traditional dispute resolution process in
the contract (which involved mediation and
then arbitration) was unlikely effectively
and efficiently to resolve the dispute. There
was a desire on both sides for a cheap, fast
and non-acrimonious solution and a desire
to continue with an amicable business
relationship on this project and for the
future.
Initiation of process
The process began with a meeting
between the mediator and the two CEOs
to discuss the nature of the dispute and
then to consider the options for a speedy
resolution. Arbitration, mediation, senior
e xe c u t i ve a p p ra i s a l a n d e x p e r t
determination were all discussed and the
relevant benefits and advantages and
disadvantages of each process considered.
What was clear is that the CEOs were
prepared to trade off what might be
described euphemistically as a Rolls Royce
system of arbitration or litigation as against
a quick and cheap process. They indicated
that they were prepared to live with rough
justice and wanted to resolve this dispute
and resume a satisfactory business
relationship. They did not want the dispute
to escalate by virtue of a litigious process.
They jumped at the idea of being personally
involved in a process whereby they listened
to presentations from their relevant
employees and then made decisions on
particular aspects of the dispute in
consultation with each other and the
mediator.
The role of lawyers was discussed and
they were anxious to avoid the dispute
turning into a legalistic dispute. The
mediator suggested that lawyers should be
involved at all times but that presentations
should be done by the persons actually
involved. It was agreed that a lawyer should
be, in effect, the captain of the team for
each side but that their role would be an
organisational role rather than a speaking
role.
The CEOs agreed to draft a preliminary
agreement between themselves in respect
of the process and to return a week later to
discuss the draft. This was done and some
suggestions made by the mediator and
adopted. This turned out to be a more
important step than had been at first
envisaged by the mediator. The CEOs
having put considerable energy into drafting
the agreement were very committed to
making it work. Nor did they want their
agreement redrafted by either of their
solicitors.
The Protocol: The creation of alliances -
a retrospective look at alliances - a bit
of amateur psychology
Some of what we are about to say in
this matter occurred deliberately; some of it
is has been perceived with the wisdom of
hindsight to have occurred; and a small
amount of it is wishful thinking.
Step 1 - Before the SEAM process can
begin, it is essential that each of the CEOs
trust and have confidence in the mediator's
skills and integrity. To achieve this, the
mediator had quite lengthy conversations in
a relaxed and informal atmosphere with
each of the CEOs alone.
Step 2 - It is necessary to establish trust
between the two other members of the
panel. They should approach the process
knowing that they are going to have
different opinions from time to time but
that each will act with absolute integrity.
Hence the mediator and the CEOs worked
on getting to know and trust each other
before the hearings commenced.
Step 3 - Each of lawyers must have
confidence in the mediator. This probably
exists prior to the initial approach being
made to the mediator but if it does not exist
then the mediator must make an effort to
create the trust before the SEAM
commences.
Step 4 - The lawyers for the parties
must know, respect and trust each other.
In our experience steps 3 and 4 had been
accomplished long before this dispute
arose. That is to say the mediator and the
[2004] Asian DR 83
 Mediation
lawyers had all known each other well for
many years and the lawyers trusted each
other and the mediator to the extent that
they were supportive of the CEOs meeting
with the mediator without the lawyers
present.
Step 5 - In the SEAMs with which we
have been involved, experts have played a
vital role. The matters could not have
proceeded without expert input on a daily
basis. Experts exert a very large influence
on their own clients and on their own legal
team. It is therefore necessary for the
mediator to develop a rapport with the
experts such that they appreciate that they
are not just helping their own team but that
they are helping the mediator and the panel
to resolve the dispute. They should be
encouraged to step out of what so many
see as their adversarial role and to step into
the role of an independent expert trying to
help clients resolve a difficult matter. It is up
to the mediator to convey this message to
them.
Step 6 - The experts should ideally
develop a relationship of trust and mutual
respect for each other, and again, both the
mediator and the SEAM panel can assist in
this regard. It may be that the panel will
have private discussions with experts or ask
experts to enter conclaves to discuss and
try to resolve specific issues and then
report back to the panel. We find that the
fewer people present in the room, the more
frank the discussion.
Step 7 - We speak now of the
theoretical ideal. The panel should aim to
minimise the conflict by reducing the
tension between the most promising parties
on either side - that is to say if the panel has
gained an impression that Bloggs on side A
has less of a conflict with Smith on Side B
than the other members of the respective
teams, then one might give Bloggs and
Smith a mutual task. For example, in our
particular mediation there were many
smaller matters that the panel did not feel
should be dealt with by the panel because
they did not involve a very large part of the
conflict or a very large amount of the
money. Bloggs and Smith could be
appointed to sort that matter out between
them in private conference with the panel
saying that they would abide by the
recommendation made by Bloggs and
Smith. Given a joint task and delegated
responsibility to resolve issues, it was hoped
84 [2004] Asian DR
that barriers might begin to fall.
Step 8 - Proceeding in a similar fashion
(in an ideal world) one then attempts to
minimise the conflict between other
individuals in the dispute. This is a counsel
of perfection and of course as much as one
would like to mend all of the damaged
relationships, it does not happen. In the end
from the psychological viewpoint one does
the best one can to mend the relationships.
The hearing
Prior to the hearing, the SEAM panel
had met with the solicitors for the parties
and together broke the hearing process
down into discrete issues, agreed days for
the discussion of discrete issues and
allocated time to the parties to deal with
each issue. A flexible approach was
adopted and if the solicitors could agree on
a discrete issue the panel accepted their
recommendations.
Prior to the hearing of the particular
issues the parties exchanged position papers
and then at the hearing each party was
given a specific limited and equal time to
deal with the item on the agenda for that
day. Again, some flexibility was permitted
but in our experience the parties observed
the time limitations fairly well, although not
without considerable effort and sometimes
discomfort. Presentations were generally
done utilising PowerPoint with printouts of
the presentation being given to the panel
members and opposing parties. The
presentations were usually very factual and
of a very high standard. They usually
clearly apprised the panel of the issues and
of each party's case even though they were
given in a short period of time. The panel
engaged in the listening and questioning to
which we have earlier referred. Questions
asked by one party of the other for the
purpose of understanding a position were
permitted by the panel but no cross-
examination was permitted by a party of
the other party. On some occasions the
written material was sufficient for the panel
to deal with an issue without the need for
presentations. After each session the
mediator discussed the material with the
panel members and, in a large number of
cases, agreement was reached within a
couple of hours.
The SEAM hearings occurred with
several days' break in between sessions
and, if necessary, the panel met between
sessions (sometimes with others) to consider
further the material that had been presented.
Where the panel could not arrive at a
resolution on a particular matter, then the
three members kept a note of what A
would accept and what B would offer and
at times would do trade-offs as against
o t h e r m at te r s w h e re t h e re wa s
disagreement. Alternatively, the mediator
would attempt to ascertain why the two
panel members arrived at different figures
and the panel would then work out a way
to overcome the hurdle to a settlement on
that issue. That generally involved going
back and getting more detail on a very
precise issue and appropriate directions
would be given through the solicitors to
investigate that matter further and give a
further presentation on a particular point.
Was SEAM effective?
Yes, SEAM was effective on this dispute
and has been successful on others.
It resolved all issues in dispute between
the parties.
The resolutions arrived at were diverse
in nature. They involved payments of
money, extensions of time, agreements
to rectify work, waiver of rights and
affirmation of contractual obligations.
The process gave the panel a "helicopter
view" of the claims and the parties'
respective cases and provided "rough
justice" and an opportunity for the
parties, and importantly their people, to
be heard. It was cathartic. It also gave
each of the CEOs a first hand look at
their respective organisation's case.
Both parties were happy with the
process and happy to reach resolution.
Neither party viewed the result as a
win, which in itself suggests the process
was effective.
The process was relationship building.
The parties owned and ran the process
and worked very closely with each
other to resolve the issues. The panel
members formed strong bonds.
It was efficient. It took about 4 months.
An arbitration would have taken years.
It cost each party approximately about
one tenth to one fifth of the estimated
costs of an arbitration.
Lessons Learned
There were many lessons learned by all
parties to the dispute and all those involved

in the SEAM process.
The main lessons learned are as follows:
it is critical to understand fully the
parties' objectives before recommending
any form of alternative dispute resolution
and then to ensure that the process
selected will meet the parties' objectives;
the choice of mediator is absolutely
critical. The parties (CEOs, panel
members, management and presenters)
must fully trust and respect the
mediator;
there is a real need to educate the
parties fully about the process (including
cost and time) and the consequences
of not participating fully and in good
faith in the process (including the cost
and time involved in more formal
processes if the ADR process does not
succeed). Not all parties fully understand
the nature of ADR processes (including
whether they are binding or non-
binding) or the timing or cost involved.
Additionally most clients tend to
underestimate the resources, cost and
time other more formal processes such
as arbitration and litigation will consume.
In our SEAM the lawyers were asked to
submit to the CEOs and the mediator
the likely cost and timing involved in
pursuing arbitration if the SEAM did not
succeed. The estimates were realistic.
This helped the parties appreciate the
importance of trying to make the SEAM
work;
there is a need to deal with the
contractual processes which will
otherwise continue to operate while
the ADR process is working. For
Mediation
example, in our dispute it was agreed
that all notice and dispute process
provisions under the contract would be
halted during the SEAM so that no
party would be disadvantaged. It was
also agreed that the process would
constitute the meeting of the parties'
CEOs under the dispute resolution
clause in respect of the issues submitted
to the SEAM;
there is a need to focus on the small
issues and the large issues, and if there
are a significant number of small issues,
to deal with these early and agree a
process which will allow them to be
resolved. It is important to monitor that
process to ensure progress (by way of
agreement) is being made;
in most ADR processes deeds of
settlement can cause significant anxiety.
The main anxiety arises in respect of
the releases to be given by the parties.
SEAMs are no different in this regard
and if anything, because of the large
number of complex issues in dispute,
and the likelihood of future obligations
under the contract remaining to be
performed, the terms of settlement are
often difficult to finalise. To avoid this,
we recommend fully discussing the
breadth of the releases at the outset of
the process and working on the terms
of settlement early.
Which cases are suitable for
SEAM?
It is not suggested that the SEAM
process is cheap. It ties up a large amount
of resources for a relatively short period of
time. We would suggest that the following
factors indicate circumstances in which
SEAM may be appropriate:
(a) the issues are many and involve large
amounts of money;
(b) the organisations concerned are large
enough for the CEOs not to have been
involved at the grassroots level prior to
the SEAM;
(c) a desire by the stakeholders to mend
the relationship and genuinely to resolve
the issues without resort to litigation
and in a quick and cheap fashion
without excessive attention to detail;
(d) a willingness by senior management to
be involved in the process.
Conclusion
If ADR processes are to be effective
and efficient they must at least meet the
fundamental needs of:
being economical;
being fast;
being perceived to be fair; and
minimising the risk to the parties.
Because every dispute is different, ADR
processes are only likely to succeed in
meeting these needs if they are designed to
suit the subjects and the subject matter of
the particular dispute.
Ian Hanger QC
Brisbane
John Cooper
Allens Arthur Robinson, Sydney
[2004] Asian DR 85
 Mediation
Towards a New Definition of
Mediation
Mediation is not a culturally neutral process. It is shaped by the cultural contexts from which it
emerges. This article explores the critical implications when mediation is used in cross cultural contexts
and makes the argument that mediation should be relationship focussed rather than outcome focussed.
Rhiân Williams
I
n a dispute, disputants are normally,
and quite rightly, focussed on what
they need to resolve. There are often
particular outcomes that they wish to
secure. Those outcomes tend to make
sense to the disputants because of the
ways in which they understand the dispute,
their and others' role in it, and the needs
they wish to satisfy. Disputants very rarely
understand the perspective of other
disputants, even though, in many instances,
they may believe they do. Indeed, it is often
the misunderstandings that escalate the
dispute because they feed the disputants'
negative perceptions of one another.
The outcomes sought by a particular
disputant fit the understanding that disputant
has of the dispute. Yet the "dispute" is a
shared property. It belongs to all the
disputants involved and each of their
"stories" of the dispute builds to a more
complete picture. The challenge for the
mediator is to assist disputants to move
beyond their individual and partial viewpoint
to a shared understanding that enables the
development of mutually acceptable
agreements. In essence, mediators are
assisting disputants to transform their
understanding of the dispute in order to
resolve it. How then do mediators effect
this transformation and what are the range
of factors that impact on the design of the
mediation process such that such a
transformation is best enabled?
According to Chris Moore in his book
The Mediation Process, people in dispute,
or in any communication exchange, have
three interdependent needs as represented
86 [2004] Asian DR
by the following diagram - termed the
Satisfaction Triangle:
Procedurally, people need to believe
that a process is fair, that it gives them an
opportunity to have their say, and that it is
not biased or prejudiced in any way.
Emotionally, people need to feel OK about
themselves and their participation in
discussion or dispute resolution processes.
They need to feel listened to, acknowledged,
respected and validated as part of their
participation. Substantive needs relate to
the issues or things that are the subject of
the negotiation. These can be material and
tangible, for example, land, rights, money
or intangibles such as, for example, respect,
recognition or consideration. Disputes are
not resolved by dealing with only one or
two of these needs or sides of the triangle.
People may often appear to get their
tangible, substantive needs met in a dispute
resolution process and yet not feel happy
about the outcomes because their
emotional or procedural needs have not
been met. For example, a dispute between
a separating couple may reach a "fair"
substantive outcome in the division of
property, and yet one person may continue
to feel aggrieved because their emotional
need to understand why the relationship
ended has not been addressed.
It is also useful to overlay "how" and
"what" over the satisfaction triangle. The
procedural and emotional arms of the
triangle parallel the "how" of how people
resolve their issues and the substantive arm
parallels "what" needs to be resolved. Thus
in the separating couple example above,
whilst a 'what' or an outcome has been
achieved, the 'how' of how people feel has
been left dissatisfied, which in turn, may
ultimately lead to dissatisfaction with the
'what'.
It is important to recognise that culture
is one of the key forces shaping how
disputants constitute their procedural,
emotional and substantive needs. In his
book Understanding Ways - Communicating
Between Cultures, Kerry O'Sullivan provides
the following example of a negotiation
b et we e n C h i n e s e a n d Au st ra l i a n
counterparts on an aid project in China.
"Prior to the meeting, the Chinese side
had been very concerned about the
(culturally inappropriate) behaviour of one
of the Australians. The Chinese head-of-
project began by praising the work of all
people involved in the project. He spoke at
length about the difficulties overcome and
the enormous contributions made and

sacrifices endured by the Australian
participants. He enumerated the successes
achieved. Only right at the end of the
speech did he comment on the importance
of respecting others' customs and working
for the common good.
At no stage was the name of the
offending party mentioned, but he expected
that from the outset the message was quite
clear" (O'Sullivan, 1994)
To the Chinese it was obvious that they
were communicating grave concerns about
the behaviour of one of the Australians -
their substantive concerns were clear to
them and how they communicated those
concerns was also clear. However, as
Sullivan goes on to point out, the speech
probably suggested to the Australians that
"... all was well." (Ibid) How the substantive
concerns of the Chinese delegates were
communicated did not translate to the
Australians in the same way.
The writer Edward T. Hall argues that
cultural contexts are critical to understanding
effective inter-cultural communication. Hall
argues that all cultures exist along a
continuum from high to low context. For
Hall, high and low context refers to the
amount of information that a person can
comfortably manage. This can vary from a
high context culture where background
information is implicit to low context culture
where much of the background information
must be made explicit in an interaction.
People from a high context culture often
send more information implicitly, have a
wider "network", and thus tend to stay well
informed on many subjects. People from
low context cultures usually verbalise much
more background information, and tend
not to be well informed on subjects outside
of their own interests. Hall argues that all
cultures exist along a continuum from low
to high context and that the following
values can be ascribed to each context
(See the table at right).
Put simply, in low context cultures the
majority of information is explicitly
communicated in the verbal message
whereas in high context cultures the
information is embedded in the context of
the relationship. Hall identifies that England
(including Australians and New Zealanders
of English origin), Germany, the US and
Scandinavian countries fit on the low
context end of the continuum and Asian
and indigenous cultures are on the high
context end. (Hall 1981)
The cultural context of mediators and
Mediation
their ability to recognise it is of critical
importance in the design of mediation
processes. In many instances when the
need is identified for mediation, high profile
mediators from outside the immediate area
or country are brought in and they will
often be drawn from low context cultures.
A low context culture mediator is often far
more comfortable working within the
limited amounts of time available for
mediation as this fits easily with the value of
"time" being a core priority in low context
cultures. Time urgent processes are often
justified on the grounds that certain, if not
all parties are busy; it is expensive to bring
people together and it is important to move
quickly to reach agreement so as to not
h o l d u p e c o n o m i c d eve l o p m e nt,
government or industry schedules, etc.
Whose need is this mediation process
meeting? Certainly not the need of
establishing and focusing on relationships as
a completely interwoven element of any
agreement process for those from high
context cultures.
There are many consequences of
LOW CONTEXT
(INDIVIDUALISTIC)
Mastery over nature
Personal Control over the environment
Doing
Future Orientation
Change
Time Dominates
Human Equality
Youth
Self-Help
Individualism/Privacy
Competition
Informality
Directness/Openness/Honesty
Practicality/Efficiency
Materialism
limiting the time of the mediation process.
It often forces participants to focus
prematurely on what will be done to
resolve matters thus defaulting to the low
context value of focusing on the future.
Whilst it may be argued that mediation is
about reaching agreements about what will
be done, it must also be acknowledged that
for high context cultures the need is to
explain and seek acknowledgement for
what has happened or what has gone
before. Unless there is an opportunity to
do this there may be vital elements missing
from any agreement or settlement from
the perspective of high context participants.
Another consequence of time limited
processes is that when issues are raised that
seem to relate to historical relationships
between the disputes, they are understood
by the low context mediator in a linear
sense as being in the past and separate
from future agreements. However, for
those from a high context cultural
perspective they are inseparable because
they define or contextualise the relationship
a n d t h e re fo re m u st b e re s o l ve d .
HIGH CONTEXT
(COLLECTIVE)
Harmony with Nature
Fate
Being
Past or Present Orientation
Tradition
Focus on Relationships
Hierarchy/Rank/Status
Elders
Birthright Inheritance
Group Welfare
Co-operation
Formality
Indirectness/Ritual/"Face"
Idealism/Theory
Spiritualism/Detachment
[2004] Asian DR 87
 Mediation
Furthermore in most disputes there is often
one or more groups who feel most strongly
about the historical relationship (particularly
in disputes when the history is often one of
colonisation and dispossession). Mediators
who frame discussion processes that allow
for the exclusion of historical contexts and
instead emphasise future agreements are
prioritising the interests of one or some
parties over others and in so doing are
being biased.
Some Australian writers on mediation
have sought to create schema that justify
the exclusion of particular interests from
the mediation process. In relation to how
indigenous Australians constitute their
interests in relation to land management
issues such as Native Title, it has been
argued that: "There are other interactions
between the parties and within the parties
that may have an influence on the conflict
but are in a sense excluded from the
conflict resolution domain. An example,
may be how the group interacts with its
elders or... conflict between members of
the group that is only amenable to
resolution by traditional law means. ...An
understanding of these interactions allows
the mediator to make decisions about what
issues should be in the negotiation and
which should not." (Jones 2000)
It is clear that some writers see a role
for mediators in "policing" what interests
can be brought into the mediation. Yet the
role of the mediator is not to "police" what
is in the mediation. The role of the
mediator is to facilitate the parties' decision-
making about how they will manage the full
range of issues that constitute and impact
on their disputes. Artificial exclusions or
third party determinations of what
constitutes appropriate issues for mediation
is a positional approach requiring parties to
ignore the full range of their substantive,
procedural, emotional interests in order to
achieve an "outcome" or "agreement".
If a time limited mediation process is
instituted that does not allow participants
the time to explore what is relevant to them
but instead pushes for agreements, then
when those agreements break down, as
they invariably do, participants blame each
other for this breakdown. Further to this,
the low context mediator may not
appreciate the consequences for those
involved of the loss of face associated with
the breakdown of agreements. This loss of
face then further contextualises the
88 [2004] Asian DR
relationship between the parties in dispute
and becomes itself part of the story or
history that needs to be resolved. Mediators
drawn from low context cultures may miss
the significance in high context cultures of
both the practice and symbolism of co-
operating. Whilst in low context cultures a
breakdown in an agreement is often also a
loss of face, it is normally seen as something
to be overcome. However, in high context
cultures a breakdown may be seen to be
indicative of the very nature of the
relationship between those involved and in
some instances may mean it is impossible
for the relationship to continue. In essence,
mediation processes that do not allow time
for the necessary level of discussion in
order to build genuine understanding and
cooperation can only serve, as observed by
Laurie Nathan, from the Centre for Conflict
Resolution at the University of Cape Town,
South Africa, to "... heighten the suspicion,
fear and anger of beleaguered disputants".
Mediators often lack an awareness of
how their own cultural context is shaping
their determination of procedural
acceptability. Models of mediation can
easily be seen to be culturally determined
when they are future focused and time
dominates with an emphasis placed on
pushing hard for settlement or agreement.
Approaches to mediation that emphasise
the need to discuss and understand what
has gone before in order to understand
how to move to any future agreement, and
that focus on relationships, allow for
participants from both high and low
context cultures to participate meaningfully
in the process. Inevitably this will mean that
any mediation process may seem to be
proceeding much more slowly from the
perspective of the low context culture
mediator. Yet it should lead to a more
meaningful and lasting engagement between
the stakeholders.
The emphasis on the importance of
taking time to build relationships as the pre-
requisite to securing sustainable outcomes
which are owned by stakeholders is being
recognised by those outside the mediation
community. In 1997 there were growing
forecasts of a very severe El Nino drought
for Pacific nations in the 1997/1998
summer. A number of countries, including
the Federated States of Micronesia, the
Republic of Palau and the Republic of the
Marshalls set up El Nino task forces and
insisted that their ministries all worked
together to prepare for the coming drought.
Whilst the El Nino resulting drop in the
rainfall was one of the most significant, its
impacts were far less.
In preparing for El Nino, a key thing was
learnt. There was a critical need to build
relationships in order to establish trust
between the scientists who forecast El Nino
and the people who were going to use the
forecasting information. In one instance
forecasters were describing the coming
drought whilst standing under a tin roof in
pouring rain. The only reason people
responded was that they trusted the
forecasters and the only reason they
trusted them was because relationships had
been built up. As one researcher involved
explained: it's "... eyeball to eyeball contact:
you can't write it in a paper and expect
people to believe you; it's got to be a
human, individual, personal trust
relationship". (Williams 2003)
It is also critical to appreciate the need
for technical experts to recognise that
communities are experts in themselves -
that is they are expert in what it will take to
make things work in that community.
Technical experts are concerned with
getting an outcome, or 'the right answer'
whereas in many instances creating
relationships with communities requires
time and a degree of comfort, at least
initially with ambiguity. However,
relationships are necessary to sustaining the
process of getting the community to
engage with the experts about both the
problems and the answers. This can also
be true for mediators. As Nathan points
out "the pressure on the mediator ... may be
intense particularly where a large number
of people are dying in ongoing hostilities.
Father Romano recalls that the Sant'Egidio
team in Mozambique was "put under
strong pressure to end the talks quickly....
Our awareness that every day more of war
meant more killings was an extremely hard
burden to bear." The mediators nevertheless
resisted the pressure because the "pathology
of memory could not easily be cancelled",
and because "there is no use in forcing
people to agree on anything. The only way
the process could have been successful and
the reason that made it successful was that
all the actors involved gained ownership of
the process...". (Nathan 1998)
Mediators need to work hard to
uncover the cultural biases within their
processes and their perceptions of what

makes for "good" mediation. Low context
mediators tend to focus on "what" people
need to negotiate. They see that at the
heart of their process are the substantive
issues. From my perspective as a practitioner
it is vital that mediators remember that
"how" people talk is as important as "what"
they need to talk about. Mediators must
start by negotiating with parties in dispute
the "how" of how they will talk about
"what" they need to negotiate. As this
paper has sought to explain, any limits on
the process have consequences for both
the disputants and the outcomes of the
process. Mediators must see that procedural
n e goti ations p recede substant ive
negotiations and that this is vital if parties
are to have a sense of ownership over both
the process and its outcomes. Mediators
need to be prepared to start by negotiating
and not imposing their process.
In Australia there has been a proliferation
of mediation services. Have a dispute with
your neighbour, your boss, your ex-partner
- business or personal, your church, your
council or just about anyone else and you
will probably be offered mediation. It is fair
to say, however, that whilst you might be
offered mediation services in every
Australian state and territory, with some
jurisdictions even having mandated
mediation processes, there is no one
approach to mediation that is universally
agreed. It does appear, however, that most
mediation processes tend to emphasise the
importance of achieving outcomes or
settlement, particularly where they have
been funded as a means of expediting
matters that might otherwise be dealt with
by the courts.
Both the Moore and Folberg & Taylor
definitions of mediation, which are broadly
accepted by mediation practitioners in
Australia, place a strong emphasis on
'settlement' as a core component of the
mediation process. Moore has defined
mediation as "the intervention into a dispute
or negotiation by an acceptable, impartial
and neutral third party to assist disputing
parties in voluntarily reaching their own
mutually acceptable settlement of issues in
dispute" (Moore 2003). Folberg & Taylor
describe mediation as "... a process by
which the participants, together with the
assistance of a neutral person or persons,
systematically isolate dispute issues in order
to develop options, consider alternatives,
and reach a consensual settlement that will
Mediation
accommodate their needs. Mediation is a
process which emphasises the participants'
own responsibility for making decisions that
affect their lives. It is therefore a self-
empowering process" (Folberg & Taylor
1984).
Both these definitions seem to place
the dispute at the heart of the mediation
process. If, as I have proposed, relationships
between parties are at the heart of many, if
not all, disputes, mediation is not merely a
process of enabling parties to 'settle'
dispute issues but is one that can assist
them to fundamentally renegotiate their
relationships with one another, and in so
doing transform their understanding and
the nature of 'their dispute'.
I would like to propose a definition of
mediation that draws on elements of both
the Moore and Folberg & Taylor definitions
whilst emphasising the centrality of
relationships rather than outcomes or
"settlement". I propose that: Mediation is a
process whereby people choose to come
together with the assistance of a non-
partisan and mutually acceptable third
party, who assists them to analyse and
discuss the causes of the differences
between them in order better to understand
and negotiate ways of fairly dealing with
each other. It is a process which recognises
that disputes are shaped by the relationships
between the disputants and that assisting
disputants to build and manage their
relationships with one another is central to
any meaningful, sustainable and mutually
agreed and acceptable resolution of dispute
issues.
I believe that if accepted, this definition
will require mediators to evaluate whether
their process is emphasising outcomes at
the expense of relationships. And if it is, is it
doing so because it reflects the cultural
context of the mediator rather than the
parties?
Approaching dispute system design
with this definitional approach has had
considerable impact on my own mediation
practice. Since 2000, I have been engaged
as a Process Advisor to the Aboriginal Legal
Rights Movement supporting their Statewide
Approach to negotiating Native Title. A key
responsibility of mine has been to design
relationship building processes between the
stakeholders, such as farmers, miners,
government or Aboriginal people. Each of
the stakeholders has a range of connections
and shared histories and these are often
points of misunderstanding between them.
Relationship building exercises are seen as a
key support to the negotiation process.
What has happened in South Australia is
that the groups have been brought together
in processes that focus not on the
substantive issues in relation to Native Title,
but rather on the procedural and emotional
issues of each stakeholder group. These
processes have brought people together
with the express purpose of building shared
relationships including cross-cultural
understanding in recognition that any lack
of understanding holds the potential to
derail the substantive negotiations.
The emphasis has been on humanising
the exchange. The pilot meeting for the
relationship building meeting was set up
between the boards of the Aboriginal Legal
Rights Movement and the South Australian
Farmers Federation. Traditionally farmers
and Aboriginal people have had a fraught
relationship in South Australia, particularly
since it was determined that Native Title
could co-exist with pastoral leases. The
meeting between the two boards was seen
as a very important meeting as it was vital
that when farmers and Aboriginal people
came to talk about 'what does Native Title
mean in practice?' or 'what does co-
existence mean in practice?' - it was
important that they had a shared
understanding of their various relationships
to land. During the preparation for the
meeting a number of the farmers had
identified quite confrontational questions
that they wanted to put to Aboriginal
participants in the meeting. My colleague
and I thought that we needed to introduce
the element of 'saving face' into the
process, so we asked the participants to
undertake a role reversal exercise. We
asked the farmers to imagine they were
Aboriginal people and thinking as Aboriginal
people what were the questions they
would want to put to farmers. We did the
same with the Aboriginal people by asking
them to imagine that they were farmers
and as farmers what were the questions
that they would want to put to Aboriginal
people.
Each of the boards identified all of the
questions that the other board had wanted
to put to them, but as Aboriginal people
were role-playing farmers and drafting the
questions, there was no heat in the
questions, because they had not come
from the actual farmers themselves. One
[2004] Asian DR 89
 Mediation
of the other powerful impacts of the
process was that each board gained an
understanding that the other board did
have an insight into how they saw things.
The process did not go on to discuss
substantive issues in any way. What it
allowed each of the participants the
opportunity to do was to explain in greater
detail their personal stories. Both the
Aboriginal participants and the pastoralists
chose to share quite personal and emotional
stories. What was powerful about this was
that at the end of that meeting both of the
groups decided that they wanted to
produce a joint statement indicating their
commitment to and support for working
together. They recognised the need to
work together because their connections
to land and country meant that, despite the
very difficult issues for negotiation, their
areas of commonality significantly
outweighed their differences. Furthermore,
they recognised that prior to coming
together they had seen their differences as
largely overwhelming any commonalities.
The opportunity to come together and get
to know each other without the pressure to
negotiate an outcome was seen as
invaluable by all attending.
Through the realisation that their
relationships and shared connections were
bigger than their current conflict, that
relationship was able to sustain them
Asian
Dispute
Review
90 [2004] Asian DR
through the difficult negotiating points that
lay ahead. As a practitioner, it reinforced
for me that the key to transforming conflict
is to assist the parties in conflict to
understand that the conflict is a part of
their relationship, not the whole of their
relationship.
As a mediator it is easy to measure the
success of the process by whether an
outcome has been achieved. However,
outcomes break down, and if insufficient
attention has been paid to the relationship
between the parties, there will be very little in
place to sustain a process of renegotiation.
The key to transforming conflict is to start,
not with the solution or the outcomes, but to
look at the relationships between all of the
stakeholders to that conflict, and to build in
processes that assist them to transform their
relationships. This approach of assisting
stakeholders to manage and transform their
relationships is one that has transformed my
own practice as a mediator. It has enabled me
to uncover some of the cultural biases within
my processes and to recognise that the very
act of preferencing outcomes or settlements
can actively work against achieving them.
After all, it is relationships, not conflicts, that
are the building blocks of societies.
RhiIân Williams
Dispute Resolution Consultant, Australia
Call for Papers
If you are interested in submitting an article to Asian Dispute Review,
please send it as a Word document by email to:
Diane O'Hare, Editor, Asian Dispute Review:
Refernces
Behrendt, L., (1995). Aboriginal Dispute Resolution,
Federation Press, Sydney.
Fo l b e rg a n d Tay l o r, ( 1 9 8 4 ) . Me d i at i o n : A
Comprehensive Guide to Resolving Conflict
without Litigation, Jossey-Bass, San Francisco.
Hall, E.T., (1981). Beyond Culture, Doubleday, New
York.
Jones, Craig, (2002). Aboriginal Boundaries: The
Mediation and Settlement of Aboriginal Boundary
Disputes in a Native Title Context, in National
Native Title Tribunal Occasional Paper Series No2.
Moore, C., (2003). The Mediation Process, Jossey-
Bass, San Francisco.
Nathan, L., (1998). A Case of Undue Pressure
International Mediation in African Civil Wars.
Centre for Conflict Resolution, University of Cape
Town South Africa. Staff Papers.
National Alternative Dispute Resolution Advisory
Council, (1997). Issues of Fairness and Justice in
Alternative Dispute Resolution, Commonwealth of
Australia, Canberra.
O'Donnell, M., (1997). The Development and
Delivery of Facilitation Services in Queensland,
1990-1996, Australian Dispute Resolution Journal
8(3):162-167. Ed. R. Charlton.
O'Sullivan, K., (1994). Understanding Ways of
Communicating between Cultures, Hale and
Iremonger, Sydney.
Williams, R. The Science Show ABC Radio National
(Transcript of an interview with Eileen Shea Climate
Project Co-ordinator East-West Centre Honolulu
Hawaii broadcast Saturday 5 April 2003) found at
www.abc.net.au/rn
adr@hkiac.org

Wal-Mart Recovers Chinese
Domain Name
Gabriela Kennedy &
Paloma Wong
T
his case concerned a dispute over
the domain name <
 .com>,
(ie Wal-Mart in Chinese characters).
The case was brought before the Asian
Domain Name Dispute Resolution Centre,
which is one of the four dispute resolution
providers accredited to hear complaints
brought under the ICANN Uniform Dispute
Resolution Policy. The ADNDRC has been
handling .com domain name disputes since
2002. Over 69 complaints have been
handled by ADNDRC so far and in most
cases those have had an Asian nexus. This
case was no exception.
The complainant was Wal-Mart, which
is a well-known retailer with a principal
place of business in the USA. The respondent
was Chen Qingrui. Prior to filing the
complaint, Wal-Mart sought to purchase
the disputed domain name from the
respondent's predecessor. Wal-Mart had
engaged in e-mail correspondence with
various owners of the disputed domain
name over the course of almost one year.
The Arguments
Wal-Mart brought forward evidence
that the disputed domain name was
identical to, or confusingly similar to, its
own trade marks and showed evidence of
its numerous trade mark registrations for
"
 " in the PRC. The complainant also
cited evidence of its various websites
accessible worldwide and in the PRC using
the domain names "www.walmart.com",
"www.wal-mart.com" and "www.wal-
martchina.com".
Secondly, Wal-Mart contended that the
respondent, Chen Qingrui, had no rights or
legitimate interests in the disputed domain
name. The complainant argued that there
was no relationship between the complainant
and the respondent that would give rise to
any licence, permission, endorsement or
authorisation by which the respondent could
own or use the disputed domain name,
which consisted entirely of Wal-Mart's "


" mark; and that the respondent did not
Case Report
hold any registered trade mark rights in
respect of the "
 " mark.
Thirdly, Wal-Mart argued that the
respondent had registered and used the
disputed domain name in bad faith. The
complainant put forward evidence that the
respondent registered the disputed domain
name for the purpose of selling or otherwise
transferring it to obtain unjustified benefits.
E-mail correspondence, between Wal-Mart
and the predecessors of the respondent in
which these entities sought an unreasonably
excessive amount of money to transfer or
sell the disputed domain name to Wal-
Mart, was produced as evidence. Further,
it was argued that the disputed domain
name had never resolved to any operational
website. The respondent also failed to
provide a real address and had in fact given
false telephone numbers when obtaining
the registration of the disputed domain
name.
The respondent denied all allegations
made by the complainant and claimed he
was not aware of the existence of any
"Wal-Mart" Chinese names or trade marks.
Chen argued that his choice of the name "

 " for the disputed domain name was
based on a name, which he liked, of a
character in the works of the famous
French writer, Jean-Jacques Rousseau.
Hedging his bets, Chen also claimed that he
remembered seeing a lighting store in
Zhong Shan city, Guangdong which used
the characters "
 " for its name and
that this inspired him to choose the
disputed domain name.
The respondent cited cases where
domain name complaints, brought by
famous brand owners, were rejected.
These included google.com v google.com.
cn, General Motors v hummer.com.cn, and
Paradox Security Systems Ltd v paradox.
com.cn, etc.
The respondent also argued that he was
entitled to use <
 .com> in any business,
provided such business was not in direct
competition with the complainant's business.
Chen asserted that <
 .com> would
never be used for any commercial or profit-
making purposes, but that it was a website
serving the interest of the public.
In response to the complainant's
argument regarding bad faith, Chen stated
that he had not obtained any commercial
gains from the disputed domain name.
The Decision
The panellist ruled in favour of the
complainant, Wal-Mart, and ordered the
transfer of the disputed domain name to them.
The panellist agreed with the arguments
put forward by the complainant, and noted
that the company had registered its "Wal-
Mart" trade marks in more than 46
countries. Wal-Mart owned 13 "
 "
trade marks in the PRC, among which the
latest predated the respondent's registration
of the disputed domain name.
Further, the panellist found that there
was not sufficient evidence to support
Chen's argument that the website to which
the disputed domain name resolved was
widely used and recognized; although
there were letters from the respondent's
relatives and friends certifying this.
Regarding bad faith, the panellist did not
agree with Wal-Mart's contention that
Chen had registered or acquired the
disputed domain name for the purpose of
selling it or to obtain unjustified benefits.
There was no evidence to show that the
quoted prices received by the complainant
as a result of anonymous approaches made
to predecessors of the respondent were
sent by the authorised agents of the
respondent for and on behalf of the
respondent. However, the panellist was
satisfied with the other evidence/arguments
regarding bad faith adduced by the
complainant, namely the passive holding of
the disputed domain name and the
respondent's failure to provide any address
in Whois, which is a searchable database
containing information about domain name
registration - whois.net. The panellist also
agreed that the giving of false telephone
numbers in Whois, in contravention of
ICANN policy, amounted to bad faith.
Gabriela Kennedy & Paloma Wong
Lovells, Hong Kong
[2004] Asian DR 91
 Book Review
Law, Practice and
Procedure of Arbitration
by Sundra Rajoo
(2003, Malaysian Law Journal\LexisNexis, Kuala Lumpur, ISBN 967-962-481-1), cxxxvi + 1396 pp, casebound
Robert Morgan
M
alaysia is one of a number of
'home-grown' international
arbitration venues in East Asia
possessed of well-known arbitration centres,
commissions or other institutions. In terms
of cases referred, the giants are China and
Hong Kong, the middle rankers are Singapore
and South Korea and the smallest are
Malaysia and Japan1. Or apparently so, in
the case of Malaysia: for annual figures
about international arbitration in Malaysia
are hard to come by, as a glance at the
Statistics page on HKIAC's website reveals2.
It should not be assumed, however, that
little arbitral activity goes on there. Far
from it: Malaysia has a profile in international
arbitration under the auspices of the Kuala
Lumpur Regional Centre for Arbitration
(KLRCA). It is also active in domestic
arbitration, servicing mainly the construction
industry. This, despite the fact that the
principal Arbitration Act 1952 ('the 1952
Act'), which governs both domestic and
international commercial arbitration
conducted in Malaysia, is based upon the
"vastly outdated"3 pre-1979 version of the
English Arbitration Act 1950. Amendments
thereto have been largely piecemeal, the
most important amending statutes being
the Arbitration (Amendment) Act 1980
('the 1980 Act') and the Convention on the
Recognition and Enforcement of Foreign
Arbitral Awards Act 1985 ('the 1985 Act').
Arbitration law reform in Malaysia has
been a protracted process, information about
which has been hard to come by over the
years. By comparison with the openness
about the subject shown in Hong Kong and
Singapore, reform appears to have been
regarded in Malaysia as something of a state
secret. It is now a matter of record, however,
that the Malaysian Government is considering
proposals by the Bar Council of Malaysia for
the enactment of a new Arbitration Act. The
draft Act is premised on the adoption of an
amended version of the UNCITRAL Model
92 [2004] Asian DR
Law which will apply to both domestic and
international arbitration, together with
additional optional rules for domestic
arbitrations covering, for example,
consolidation, judicial determination of
preliminary points of law and appeals against
awards on questions of law. The proposed
Malaysian approach is, therefore, broadly
similar to that proposed for Hong Kong in
2003 by the Hong Kong Institute of Arbitrators'
Committee on Hong Kong Arbitration Law.
There is considerable interest in
arbitration law and practice in Malaysia and
in the prospects for law reform. Sundra
Rajoo's book is, therefore, a welcome and
long overdue contribution to the subject. It
is the very first detailed and comprehensive
treatise on Malaysian arbitration. It performs
the dual functions of an authoritative
textbook, discussing the subject from first
principles, and a practice manual. The
arbitration process throughout is generally
discussed in a chronological manner, from
arbitration agreement to challenge and
enforcement of awards, thus facilitating
ease of reference. Given its special status
and its de-linking from national arbitration
law by virtue of section 34 of the 1952
Act, arbitration under the auspices of the
KLRCA is discussed in a separate chapter.
The appendices contain an extensive
collection of reference materials, both Malaysian
and foreign, embracing statutes, arbitration
rules and procedural and ethical guidelines.
Users and students of Malaysian arbitration are
thus provided with a 'one stop shop' in this
regard, and one which is particularly useful for
comparative purposes. In relation to statutory
materials, this is just as well, especially for
overseas users and academics, for very few
Malaysian statutes appear to be accessible
online4. The text of the new draft Arbitration
Act is set out at Appendix 17.
This reviewer's criticisms are limited to
the incompleteness of the statutory materials
in the appendices. These are as follows. (i)
Appendix 1 sets out the text of the 1952
Act as at 1 November 1972, which means
that sections 32-34 are missing - although,
curiously, they are referred to in the list of
sections at page 688. (ii) The 1980 Act has
been omitted from the appendices - an
important omission given that this Act was
the source of section 34 to the 1952 Act5.
(iii) Appendix 9, which purports to contain
the text of the 1985 Act, appears to be
incomplete as it merely sets out verbatim
the text of the New York Convention
without provisions to implement it6. The
New York Convention is then set out
verbatim once again in Appendix 10. Given
the aforementioned difficulties in accessing
Malaysian legislation online, these three
omissions detract from the usefulness of
the statutory materials appendices. Perhaps
the publisher would consider issuing
addenda pages with each copy of the book
to remedy this situation. (iv) Order 69 of
the Malaysian Rules of the High Court
(Arbitration Proceedings) ('the RHC') is
lumped together with trade union and
workmen's compensation legislation in
Appendix 4; the RHC surely merit an
appendix of their own.
These criticisms apart, this book is an
essential addition to the library of anyone who is
interested or involved in arbitration in Malaysia.
Robert Morgan
Barrister (England & Wales, Queensland)
1. See 'Statistics' link at the HKIAC website -
http://www.hkiac.org/en_statistics.html.
2. See note 1.
3. Rajoo, p 683.
4. This reviewer was unable to find any arbitration
laws and related rules of court listed at leading
websites such as www.worldlii.org, the Commissioner
for Law Revision's website, www.lawsofmalaysia.com
(which, in any event, is a commercial service) or the
Malaysian Judiciary website, http://www.kehakiman.
gov.my/acts.html.
5. The text of section 34 does, however, appear at
p 658 in the text.
6. In Hong Kong, by way of comparison, the
equivalent enactments in Part IV of the Arbitration
Ordinance (Cap 341) contain provisions additional to
the New York Convention.
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