International arbitration has seen significant growth over the past few decades, emerging as a popular alternative to traditional court litigation for resolving cross-border disputes. But is it truly the panacea it’s often made out to be? In our Platform9 Session, Velimir Zivkovic, an Associate Professor at Warwick University and an expert in international arbitration, shared his insights into this field.
The Rise of Arbitration
Arbitration’s popularity has surged, particularly since the mid-20th century. Zivkovic explains the rationale behind this growth:
“You are, let’s say Irish, I’m Serbian. We have a Rule of Law in our jurisdictions, in our national jurisdictions, and you trust your courts, but I don’t trust your court. It may seem to me that it’s rigged. It may seem to me that it’s biased. It seems to me that you know the process, the language, everything. You know it way better than I do. And I would prefer something neutral.”
This desire for neutrality has driven many businesses to opt for arbitration in their international contracts.
The Promise and Reality of Arbitration
Arbitration is often touted as a faster, more efficient alternative to court litigation. However, Zivkovic cautions against overly optimistic expectations:
“Arbitration has very good PR. PR wise, law firms involved in arbitration, arbitral institutions, arbitrators themselves have done a wonderful job of promoting the potential advantages of arbitration, including speed and speed then translates into efficiency of the process more generally, meaning less costs.”
However, he adds a caveat: “It’s not a fairyland. It’s not some sort of paradise where you will get quick and efficient and cheap justice. It’s not like that.”
The reality, as Zivkovic points out, is more nuanced: “The answer to many of these things are, it depends. I just hate lawyers who say, yeah, absolutely. And unfortunately that is probably the most common answer because it’s also the most true answer that you can say and give.”
The Arbitration Process
Zivkovic walked us through the typical steps of an arbitration process, highlighting its complexity:
- Preparing and filing the claim
- Response from the other party, often including counterclaims
- Exchange of submissions, which may involve several rounds
- Oral hearings (in larger disputes)
- Tribunal deliberation and award issuance
He notes that delays often occur in the final stage: “A lot of delays occur actually in this stage, you might think you’ve done everything on your end, but it still might be, I don’t know, six months before you actually see the results of what you have been doing for a year.”
Arbitration Centers and Specialization
While some arbitration centres have historical specialisations (like Stockholm for East-West disputes), Zivkovic notes that most major centres aim for diversity:
“Most big arbitration centres do not want to specialise. There are benefits of being open to various kinds of things, to various types of disputes. And I would say most of them don’t [specialise].”
Challenges in Arbitration
Arbitrator Availability
One significant challenge is the availability of top arbitrators. Zivkovic points out:
“If you want a big name, you know, you want someone trusted, you want someone you know is going to do a good job. Well, they might be booked, you know, they might be fully booked.”
This can lead to delays or situations where much of the work is done by assistants rather than the appointed arbitrator.
Gender Diversity
The field of arbitration still struggles with gender diversity. The international nature and travel is considered a challenge for women. Zivkovic explains:
“It’s big part of it is why there aren’t also more women in leading roles in law firms, partnership roles, which is that very often careers of women take different routes, are hampered by a number of reasons.”
He notes that improvements are being made, but progress is slow.
The Impact of Technology
The COVID-19 pandemic accelerated the adoption of virtual hearings in arbitration. While this has increased accessibility and reduced costs, Zivkovic notes that it’s not without challenges:
“Online hearings and in-person hearings are not the same. The experience that you get, the ability to read body language, the ability to judge someone’s performance, let’s say as a witness or as an expert is different.”
The Role of AI in Arbitration
Artificial Intelligence is making inroads into all legal fields, including arbitration. However, Zivkovic emphasises its limitations:
“It cannot do the most important job, which is to be an arbitrator. That’s because it’s not intelligence. It’s artificial intelligence, but the emphasis is on artificial, not on intelligence.”
He sees AI as a tool to assist with tasks like drafting and document analysis, rather than a replacement for human judgement.
The Future of Legal Education
As technology changes the legal landscape, Zivkovic stresses the importance of core legal skills:
“The point is the law school needs to teach you to understand whether or not what AI has done for you, is actually accurate. Does it make sense? If you’re using AI to learn law, then you won’t actually know whether or not it’s accurate or not.”
He argues that a strong foundation in legal reasoning and critical thinking remains crucial for effective use of new technologies in law.
Conclusion
While arbitration offers many advantages for international dispute resolution, it’s not a one-size-fits-all solution. As Zivkovic reveals, its effectiveness depends on various factors, from the specifics of the case to the chosen arbitrators. As the field continues to change, considering technological advancements while maintaining the core principles of legal reasoning, arbitration is likely to remain a key tool in the global legal landscape.
