Student Groups in Action: Penn Law International Arbitration Association (PLIAA) asks ‘Is International Arbitration in Jeopardy?’

June 28, 2018

By: John Morgan LLM’18

More than twenty eminent practitioners and academics met at Penn Law in April 2018 for the day-long PLIAA conference, which addressed the most pressing questions in international arbitration. Over 150 students from areas universities, joined with practitioners from the Philadelphia, New York and Washington DC markets.

We are in the wake of a year in which arbitration has come under sustained attack. Eminent judges in the UK have criticised the ousting of national jurisdiction. Politicians in America have threatened to tear up treaties which allow for investor-state dispute mechanisms. Courts in Mexico have indicated a willingness to peer through the veil, and to allow appeal of arbitral awards on the merits.

Despite such uncertain political context, participants were nearly universally confident about the future of international arbitration. This confidence was rooted in the overwhelming growth of arbitration. Over the last few years, it has ballooned in popularity, responding to the needs of parties unaffected by political and social debates. So long as it can offer greater speed, lesser expense and greater certainty than traditional litigation, the speakers generally agreed that there will always be a demand for arbitral services.

Participants discussed fraught developments in the technological security within institutions and between parties. The desperation of certain participants’ attempts to gain the upper-hand in arbitration was brought starkly into focus by several ‘war stories’ told by practitioners in the room– particularly the use of technology, including social media hacking, long-lens cameras, and recording devices.

The keynote address was given by Professor George A. Bermann, Director for the Center for International Commercial and Investment Arbitration (CICIA) at Columbia Law School. Bermann focused on the discrepancy in views towards arbitration between those who participate in the system and those who are simply looking at it from the outside.

The arbitration law expert suggested that ultimately there needed to be a trade-off in interests between parties; that the arbitration system will not necessarily suit all political persuasions, but that the system can be designed in such a way as to reduce objections certain parties hold. This should be done, in the Bermann’s view, in a way which is most positive for arbitration as an institution.

Professor Bermann also provided fascinating insights into the discussions between the authors of the Third Restatement of U.S. Law of International Arbitration. He posed a fascinating question, left for the audience to discuss: are there certain extrinsic values which we should prioritise above the general interests of arbitration?

A discussion on the political backlash against Investor-State Dispute Settlement mechanisms elicited strong debate among an incredibly distinguished panel of trade and investment lawyers. This diverse group contributed a variety of perspectives from a range of practitioners, interests, and geographies. The panelists were split among pro-reform of the ISDS system, and those who believe that the system should remain as it is. The debate, moderated by Kabir Duggal, highlighted the main points of controversy and specifically addressed the establishment of a permanent investment court.

Participants made predictions on emerging trends for international arbitration. There was general agreement that global patterns of increasing nationalism will likely result in increased scrutiny of arbitral institutions. Many foresee a fight against corruption using arbitral mechanisms. Most speculated that arbitration is likely to face competition from mediation, a method which also benefits from speed and affordability. But the overwhelming consensus is that arbitration will continue to thrive despite the challenges it will face.

Conference Organizers: Avantika Panwar LLM’18, Florence Vanhulle LLM’18, Lena Sutanovac LLM’18, Derin Coker LLM’18, and Shoyurendu Ray LLM’18.

The Penn Law International Arbitration Association brings together students, practitioners, and academics to discuss the future of international arbitration.

This piece originally appears in the 2018 Global Affairs Review.