THE AUTHOR:<\/strong> On May 14th, the Arbitration Channel held its 18th International Arbitration Conference of Rio de Janeiro (the “Conference”) at the FGV Rio campus. Organized by Jo\u00e3o Bosco Lee<\/a>, Lauro Gama<\/a>, and Mauricio Almeida Prado<\/a>, and presented by Lauro Parente, the Conference focused on “Impossibility in International Arbitration.” The event featured 22 speakers across four panels, an introductory keynote speech, and a closing report. <\/p>\n\n\n\n The introduction to the theme of impossibility in international arbitration comprised (i) a keynote speech by Jos\u00e9 Ricardo Feris and (ii) a panel on obstacles in the constitution, functioning, and jurisdiction of arbitral tribunals. <\/p>\n\n\n\n Jos\u00e9 Ricardo Feris began his speech with the Latin maxim \u201cAd impossibilia nemo tenetur,\u201d highlighting that no one can be obliged to fulfill an impossible obligation. He argued that in international arbitration, the impossibility is often overlooked due to the emphasis on autonomy of will. According to Feris, we are accustomed to the idea that anything agreed upon by the parties is allowed in International Arbitration. However, the autonomy of will is imperfect and can lead to impossible situations. <\/p>\n\n\n\n Feris identified the origin of this issue in the premature, untrained, hasty, and overly standardized exercise of the autonomy of will when drafting arbitration clauses. He detailed four main themes impacting arbitration legitimacy: access to justice, initiation of arbitration and tribunal constitution, ethical issues, and problems related to multiple proceedings<\/a>. Feris concluded that addressing these issues requires collaborative efforts from arbitrators, arbitration institutions, and the judiciary to mitigate the imperfections in the exercise of autonomy of will. <\/p>\n\n\n\n Following the keynote, the first panel of the Conference, moderated by Michelle Grando<\/a> and initiated by Gisela Mation<\/a>, focused on various obstacles to the arbitral tribunal and their impact on arbitration’s effectiveness. Ana Serra e Moura<\/a> from the ICC highlighted issues arising from poorly drafted arbitration agreements, such as imprecise identification of arbitral institutions, hybrid clauses (addressed by the ICC in Articles 1(2) and 6(2) of the Arbitration Rules<\/a>), inefficient or illegal choices regarding arbitrators, overly specific arbitrator qualifications, and conflicts between autonomy of will and fundamental principles (Article 12(9) of the Arbitration Rules<\/a>). <\/p>\n\n\n\n Pedro Metello de N\u00e1pole from PLMJ discussed the complications of over-regulating arbitration clauses, suggesting that parties should rely on standard clauses provided by institutions to avoid unforeseen issues. He shared experiences of non-cooperative parties causing delays, especially through frequent arbitrator challenges that suspend procedures. Despite these challenges, Ana countered that concerns about arbitrator challenges are exaggerated, citing ICC statistics showing a low success rate for such challenges, indicating that arbitral institutions are effectively managing these problems. <\/p>\n\n\n\n The panel also addressed external factors affecting arbitral procedures, with Galina mentioning the new Russian legislation that grants jurisdiction to Russian courts if a party claims no access to justice through international arbitration. This has become a significant issue. <\/p>\n\n\n\n The Conference also featured panels on: (i) court intervention in situations where arbitral tribunals cannot exert their own jurisdiction and (ii) protecting the integrity of arbitral proceedings. <\/p>\n\n\n\n The panel on “Court Intervention in Situations Where the Arbitral Tribunal Cannot Exert its Own Jurisdiction,” initiated by Leonardo de Campos Melo<\/a> and moderated by Andr\u00e9 Marini<\/a>, offered diverse perspectives on court and tribunal interactions. Andrea Carlevaris discussed interim measures, detailing five scenarios where arbitrators cannot exercise their jurisdiction, including legislative limitations, lack of power over third parties, measures requiring state judges by their nature, restricted tribunal powers in the arbitration clause, and material impossibility due to tribunal non-constitution. <\/p>\n\n\n\n Andrea noted that emergency arbitration rules address some issues but not all. James Hosking<\/a> responded by highlighting that emergency arbitrator rules demonstrate the arbitration community’s ability to address such challenges. He explained that emergency arbitrators operate under different constraints, mainly temporal. Their decisions are subject to local laws, have the nature of an order rather than an award, and are modifiable by the tribunal. <\/p>\n\n\n\n Marie-Isabelle Delleur<\/a> added that courts should support arbitration by applying the Kompetenz-Kompetenz principle, ensuring arbitration agreements are upheld unless manifestly null. She noted that some jurisdictions, like the UK, are particularly supportive of arbitration despite challenges like the new Russian legislation, as evidenced by the use of anti-suit injunctions and favorable court decisions maintaining the efficacy of arbitration agreements under British law. The Brazilian experience has also been positive regarding jurisdictional conflicts. <\/p>\n\n\n\n To sum up the issue, James Hosking likened international arbitration to “Mission Impossible” movies, where seemingly impossible situations are resolved through mechanisms like the U.S. discovery rules, illustrating the adaptability and resourcefulness of the arbitration framework. <\/p>\n\n\n\n The third panel of the Conference, chaired by Gustavo Schmidt and moderated by Nat\u00e1lia Nizrahi Lamas, focused on the enforceability of arbitral awards<\/a> despite parties’ cooperation. Sofia Martins<\/a> addressed challenges posed by antisuit and antiarbitration injunctions, emphasizing the importance of the arbitration seat in protecting proceedings. She recounted a case where she, as president of an ICC tribunal, proceeded with arbitration despite a state court’s suspension order, as the court lacked jurisdiction. Christian Albanesi<\/a> highlighted the need for arbitrators to include liability waivers in the Terms of Reference and to secure liability insurance, based on his experience with severe penalties imposed by a Mexican state court. <\/p>\n\n\n\n Alex Wilbraham<\/a> discussed third-party funding<\/a>, noting its growing acceptance as a means of access to justice, particularly in common law countries, despite initial stigma. He stressed that arbitral tribunals should consider conflicts of interest, confidentiality, and the possibility of requiring security for costs, although funding does not necessarily imply impecuniosity. Christian resumed the discussion by addressing guerrilla tactics used to delay or obstruct arbitration, such as procedural delays, abuse of mechanisms, and criminal activities. <\/p>\n\n\n\n To combat these tactics, Christian suggested setting clear expectations at the start of arbitration, incorporating the IBA Guidelines on Party Representation<\/a> into the terms of reference, taking a firm stance against disruptive behavior, sanctioning parties through cost penalties, cautiously excluding problematic representatives, and publicly acknowledging counsel who employ these tactics. Notably, the Chinese Arbitration Association Rules allow for public disclosure of arbitrators who fail to render timely awards under Article 41. <\/p>\n\n\n\n The third part of the Conference addressed the topics of: (i) “Anticipating the Arbitral Tribunal\u2019s view on the Dispute as a Way to Promote Settlement Between the Parties”; and (ii) the “Rapport de Synth\u00e8se.” <\/p>\n\n\n\n The last panel, chaired by Fl\u00e1via Bittar<\/a> and moderated by Renato Beneduzi<\/a>, explored perspectives on preliminary assessments. Anna-Katharina Scheffer discussed the German approach, emphasizing the state court’s procedural duty to facilitate settlements, pursuant to Section 278 of the German Civil Procedure Code, and Section 139, which obliges judges to establish facts, engage in legal discussions with parties, and provide legal indications to ensure complete submissions. However, these provisions do not necessarily apply in arbitration. <\/p>\n\n\n\n
Fernando Benites Goncalves<\/strong>, Associate at BMA Advogados<\/strong><\/p>\n\n\n\n
\n\n\n\nArbitration Channel\u2019s 18th Rio de Janeiro International Arbitration Conference<\/strong><\/h1>\n\n\n\n
Introduction to the Impossibility in International Arbitration <\/strong><\/strong><\/h2>\n\n\n\n
Impossibility In International Arbitration Proceedings <\/strong><\/h2>\n\n\n\n
The Solution to the Impossibility in the Arbitration Procedure <\/strong><\/strong><\/h2>\n\n\n\n