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|Foreign Lawyers & Arbitrators : Imperialism In The Law? (Part 2)|
|Monday, 02 July 2012 01:17pm|
©The Edge (Used by permission)
by Tommy Thomas
THE INTERNATIONAL ARBITRATION CIRCUIT
By the trial and error method which characterizes the common law system, it had become settled for centuries that judges, as decision-makers in the dispute resolution process, must hear and determine disputes before them in open court, to which not only the parties can attend, but also the public and the media. Open justice is the norm : hence, it is transparent. Because it is self-evident that judges are not fallible, an appeal process exists : the first appeal automatic, and the second and final, with leave or permission of the Court. This promotes accountability. Each level of the Court is expected to give written reasons for its decision, which serves 2 functions. First, it explains to the losing party (the most important person in the court-room) why he lost. Secondly, the grounds of judgment are reported and published to serve as the law of the land so that similar disputes in the future are decided in like manner. To ensure that judges are free from bias, influence or punishment – particularly from the State — they are guaranteed security of tenure. Finally, to ensure that access to the courts is open to the unemployed, the refugee and the beggar, court fees are always kept to a minimum. Costs payable to the successful party is within the court’s discretion and is certainly reasonable.
None of these hallmarks exist in arbitration proceedings. The growth of international commercial arbitration in recent years has been described as its “Golden Age”. Malaysia as an open economy, currently enjoying the largest IPO market in Asia and the 17th largest trading nation in the world dealing with over a trillion ringgit annually for its imports and exports, is a massive source of work for international arbitrations. When a Malaysian company enters into a commercial contract with a foreign country, say, from Germany, for the sale and purchase of goods, the parties would invariably agree to arbitrate disputes arising from that contract. Each party would usually nominate 1 arbitrator, with the chairman being appointed by the 2 party-nominated arbitrators or an agreed appointing authority. They would often agree to a neutral law, say, the laws of England, as the governing law of the contract, and the seat of arbitration, say, Singapore.
The phenomenal growth and globalization of trade and services have resulted in the commensurate growth of international contracts between parties and counter-parties from different countries. Invariably, these contracts contain an arbitration clause leading to the growth of arbitration, which United States and United Kingdom international law firms and chambers monopolise. When they do not have sufficient work in their home countries — all of which are still reeling from the 2008 global financial crisis — and which jurisdictions already suffer from over-capacity of lawyers, developing nations like Malaysia, are the natural source of work and income. Singapore’s historical role as the entreport of South East Asian trade acquires a new dimension : it offers itself as the unrivalled centre, not just for Asean arbitration, but all of Asia, to exploit the great economies of China, India, Japan, and Korea.
The leading lights of the arbitration world (mainly arbitrators, barristers and solicitors from the West) descended into Singapore recently to attend the International Council of Commercial Arbitrators. The key-note speech by Sundaresh Menon, the Attorney-General of Singapore, created waves because raw truths were publicly uncovered in the presence of major arbitration players.
Among the critical observations that Menon drew attention to included :—
Before assuming the office of Attorney-General, Sundaresh Menon, was the pre-eminent counsel in Singapore in arbitration matters. The old adage that where you stand depends on where you sit may account for his comments on not just consensual private arbitrations, but also on the proliferation of investment treaty arbitration involving nations. The establishment of international commercial and investment tribunals which have assumed a wide compulsory jurisdiction over a whole range of matters and have handed down awards that could be enforced against nations, have resulted in a real loss of a nation’s sovereignty and its freedom to act, even within its own territory on what was always accepted as purely domestic matters.
The resultant emergence of an “international administrative law” is not what most nations had bargained for. Its effects were stated by the Attorney-General as follows:-
Does this not suggest imperialism? Another cause of concern is that the arbitrators who are deciding disputes of a public law nature affecting nations are in effect shaping economic, tax and monetary policies, without any experience or expertise because they are only schooled in commercial law. And who are these decision-makers? According to Menon :-
Lawyers and arbitrators in peripheral countries must be sufficiently astute to take the necessary measures to meet the threat of foreign dominance, even in their own backyard. Indifference and apathy are no longer options. From a Malaysian perspective, the challenge for Malaysian lawyers, particularly corporate and commercial solicitors who are in the frontline of attack, is to enhance their practice by improving standards and publicising their accomplishments. They must aspire to be the best and the brightest in the region. A country that has produced Nicol David has the potential to produce champions in other areas of human endeavour.
Without wishing to be supporting protectionism, we must collectively persuade our business community which includes within its ranks GLC’s, multinationals and chambers of commerce, to give preference to Malaysian lawyers for all their work. If arbitration clauses are to be included in international contracts, these influential institutions must bargain for the Kuala Lumpur Regional Centre to be the seat of arbitration. At every opportunity, our lawyers and arbitrators should be recommended. A Malaysian dimension must be encouraged. As far as State arbitrations are concerned, the Malaysian government must receive proper advice (and not from foreigners) as to whether to continue to support arbitration under bilateral investment treaty (BIT) or to withdraw or place reservations, as Bolivia, Norway, Australia and Venezuela have recently done.
Challenges present opportunities. It is an iron law of history that over time colonies that are part of an empire or under imperialistic control gain their freedom. But liberation is seldom given on a plate; instead, it must be the secured after struggle. Anglo-Saxon domination of legal services cannot be eliminated in the foreseeable future. The task is to ensure that its dominance is reduced so that there is room for lawyers and arbitrators of all nations.
21st June 2012
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