The very name “Paris Arbitration Week” suggests a nod (or even faint Gallic shrug) to the city’s (slightly) more famous fashion event. PAW’s second “edition” took place last month and attracted over 1000 international arbitration practitioners and academics in an assortment of ages, genders and nationalities which, for one week at least, belied the traditional image of international arbitration as the province of elderly white men.

London's Burning

A wide range of sessions addressed sectors from energy and finance to cross-border insolvency as well as issues from challenges to arbitrators and artificial intelligence to awards of damages. The future of investment treaty arbitration loomed large (in the light of the recent decision of the ECJ in Slovak Republic v Achmea BV) as, inevitably, did Brexit. One session even bore the (almost literally) incendiary title “London’s Burning: Paris s’éveille?”

Competitive

International dispute resolution is a competitive business with arbitral institutions vying  with each other to be chosen by disputing parties and periodically revising their rules to catch up with (or steal a march) on the procedures of their rivals. It is also an economic and political endeavour, with Singapore (through SIAC and its more recent specialist international commercial court) and Dubai (with its DIFC Court and arrangement with the LCIA) demonstrating how well they understand that commerce thrives where it can depend on efficient, expert and honest tribunals to adjudicate its disputes. Sometimes, as with Kazakhstan’s new commercial court, this involves recruiting all of its judges from overseas.

Brexit creates uncertainty

The problem for London is that the still-unknown shape of Brexit creates uncertainty. In particular, nobody knows what jurisdiction and enforcement arrangements will be made between the UK and the EU beyond the likely transitional period. Moreover, even if the UK ends up with some Lugano-like relationship with the EU, if many businesses relocate across the channel because of the perceived advantages of the Single European Market, will that mean that international litigation and arbitration in London will decline?

France sets up English law courts

Such uncertainty creates opportunity for others and the French have made a bold attempt to make a virtue of the dominance of English law in international finance and trade by trying to lure their resolution to Paris in the hope that the industry which generates them will follow. In February of this year, the French authorities opened an international chamber within the Paris Cour d’Appel which hears cases in English and can take account of other laws (including the common law). More ambitious still, is the French proposal last summer to establish courts which would actually apply English law. This is a shrewd move, attempting to beat the UK at its own game just as it has raised doubts over its long term fitness to play. In the short term, the success of these ventures will depend on the attractions of a clear French alternative over the potential “no-deal” abyss in which hardline Brexiteers in the UK seem to rejoice.

Contract clauses

If, post-Brexit, the orders of UK courts are not to be readily enforceable in the EU then there must be a real danger that disputes with a European dimension will no longer be resolved in London. The French initiative is surely aimed at persuading those writing contracts now to reconsider the choice of London which would until recently have seemed automatic. If European disputes depart then perhaps non-European disputes will follow, as London’s legal lustre finally begins to fade. This must depend, in part, on the continued choice of English law in international contracts for the obvious reason that parties are likely to be advised that it is best applied by the courts and (tribunals) which really know how to do it. It is of course at just this connection between English law and jurisdiction that recent French initiatives are aimed.

London becomes the new Switzerland

On the other hand, perhaps London will be able to make a virtue of its new status as an outsider. Indeed, as some participants at the “London’s Burning” session in Paris this month wondered, it could seek to emulate Switzerland as a separate and neutral jurisdiction and thereby maintain and even expand its reputation as the natural destination for the resolution of international disputes. 

Further drift

Whether such a middle-European model can be reconciled with the neo-imperial destiny which some Brexiteers seem to hope for, is another matter but one thing seems certain, whatever is to happen needs a plan; gone are the days when these things could be left to take their own course on the assumption that everything was certain to turn out alright in the end. The price of further drift could be very high, not least because immense damage could be done in this period of uncertainty even if a satisfactory deal is eventually reached.

Shantanu Majumdar is a barrister at Radcliffe Chambers