7 November 2018
SIAC-KAA Seoul ADR Festival Seminar

By Philip Kim, Senior Associate, Herbert Smith Freehills

The Seoul ADR Festival Seminar, hosted by SIAC and the Korean Arbitrators Association (KAA) on 7 November 2018, was an opportunity for practitioners to join "A Conversation with International Arbitral Institutions". Insights were shared on a range of topics including the appointment of arbitrators and the inner workings of international arbitral institutions. A consistent theme was the importance of cooperation between institutions, to create a larger "mooncake" that all those in the international arbitration field can share. The seminar was well-attended by practitioners, in-house counsel and academics.

The opening address was delivered by Mr Ki-Su Lee (Chairman and CEO, KAA), where he welcomed practitioners, academics, a former judge and former presidents of the KAA to the conference.

In the first session, Mr Michael Lee (Vice President, International Centre for Dispute Resolution (ICDR), American Arbitration Association (AAA)) shared his insights on how to build a career as an international arbitrator. Mr Lee noted the lack of a requisite exam or qualification to "become" an arbitrator, and that an arbitrator’s career often begins by being a party-appointed arbitrator before joining the panel of an arbitral institution. Mr Lee emphasised the central importance of building one’s reputation and credibility as an arbitrator.

Mr Xu Wei (Deputy Secretary General, China International Economic and Trade Arbitration Commission (CIETAC)) then gave his observations on the growth of arbitration in China. In 2017, for example, CIETAC accepted 2,298 arbitration cases and also launched the Public-Private Partnership Arbitration Centre. Mr Xu also expressed a desire for more collaboration between CIETAC and Korean arbitral institutions.

In the next session, Mr Chan Leng Sun, SC (Deputy Chairman, Singapore International Arbitration Centre (SIAC); Senior Counsel and Arbitrator, Essex Court Chambers Duxton) considered the special features of maritime arbitration in Singapore and London, highlighting the different practices, rules and culture of the arbitral institutions that specialise in maritime disputes. For example, the use of "umpires" is a unique feature of maritime arbitration, and the London Maritime Arbitration Association does not administer the arbitration and instead adopts a very "light touch" approach. In addition to providing a practitioner's insight into maritime arbitration, Mr Chan's presentation pointed to the potential of maritime arbitration as a source of inspiration for improvement of procedures in commercial arbitrations. It will be interesting to see if cross fertilisation of ideas for improvement would lead to the adoption of "umpires" and other unique features of maritime arbitration in general commercial arbitration.

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Members of the audience

Group photo with speakers and delegates

The final session was a lively discussion moderated by Dr Hongseok Aaron Kim (Vice Chairman, KAA) with the panel comprising Mr Chan, Mr Chen Zhao Hui (Deputy Secretary General, CIETAC Fujian Sub-Commission), Mr Kevin Nash (Deputy Registrar and Centre Director, SIAC), Mr Lee and Mr Xu.

The panel first delved into the question of how to be appointed as an arbitrator and the essential qualities, experience or skills that an arbitrator requires. Mr Lee and Mr Chen emphasised the distinction between being listed on an institutional panel and actually being appointed in a particular case. A particular focus was on the need to gain experience as an arbitrator, which Mr Nash described as a 'chicken and egg' situation that faces younger arbitrators seeking out their first appointment.

The panellists then shared their perspectives on the issue of arbitrator fees, which are often calculated either on the basis of an hourly rate or a percentage of the sum in dispute. Mr Lee acknowledged the difficulties here with his answer that "it depends". Mr Chan emphasised the connection with the complexity of the case as well as the skills and experience of the arbitrator – but noted that typically younger arbitrators would be willing to take on smaller value cases to gain the necessary experience. Mr Nash discussed the ICC Commission report indicating the usual spread of fees in a typical arbitration being 83% in counsel fees, 15% in arbitrator fees and 2% in the institution's administrative fees – and that generally counsel and the arbitrator are happy where the ratio is approximately 5:1.

In discussing the scenario where a party refuses to pay its share of the arbitrator fees (particularly in the context where there is increasing use of contingency fees and third party funding), the panel agreed with Mr Chen's comments about the importance of obtaining appropriate and timely deposits from the parties.

The discussion then turned to what each arbitral institution was doing to support the Korean community in the field of international arbitration. Mr Nash noted the growth of SIAC in Korea, and that Korean parties have constantly been within the top ten foreign users of SIAC, with Korean arbitrators being the seventh most frequently appointed at SIAC. Mr Nash also mentioned the efforts of Ms Seah Lee (Head (North East Asia), SIAC) and the importance of her role in the Korean market. Mr Chen added that there are many similarities between China and Korea, and asked whether Koreans are familiar with Chinese mooncakes. He used the analogy that all those working in arbitration are dividing up a mooncake to share – and that we should be trying to make a bigger mooncake through cooperation among arbitral institutions. In doing so, everyone can get a bigger share. What was implied in these discussions was that this cooperation would lead to better procedures that are more just and efficient, thereby making international arbitration more attractive for its users, compared to other forms of dispute resolution.

The closing remarks of Mr Chan returned to this theme of cooperation and collaboration between arbitral institutions in order to improve the arbitral process and serve the business community. This echoed his earlier remarks about the fact there is a real dialogue occurring between arbitral institutions which has led to some harmonisation of practices and the creation of consistent experiences for end users. The final message was that arbitral institutions should work together to make a "better, bigger and more delicious mooncake".
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