First impression crucial in international arbitration
Recently, an international arbitration case that my team had been working on for two years finally went to the hearing stage against a highly reputable U.S. firm. Every hearing day consisted of eight hours of oral advocacy in English, including opening and closing statements and cross examination of seven witnesses.
The arbitration took place in Seoul, was conducted in English between a Korean and foreign party.
What may surprise the reader is that this type of proceeding is commonplace for my team. Although the legal market in Korea has not fully opened its doors yet, in reality, the international dispute resolution market opened a long time ago.
According to statistics of the International Chamber of Commerce, the largest arbitral institution in the world, the number of international arbitration cases involving Korean companies in 2009 ranked second in Asia.
This incredibly high usage can be attributed, to some extent, to the increase in Korean companies venturing into overseas markets.
Accordingly, the number of related disputes has increased with international arbitration now clearly the preferred method of resolving international disputes for Korean companies.
Due to this increase, I set out below three key lessons I have learned from my experience over the last two decades of practice in this area. Further, the core lessons generally apply to cross-border disputes as well.
First impressions are lasting ones
The initial stages of an international arbitration are crucial. In order to commence arbitration, the claimant must file a request for arbitration.
This request is your first opportunity to present your case and although all arbitrations are different, it is generally advisable to fully submit all your arguments and supporting evidence at this stage as it is difficult to significantly change your main arguments during the course of the proceedings.
Further, in contrast to domestic litigation, there is a very limited appeals process in international arbitration and therefore you only get one real opportunity to present your case putting more pressure to “get it right” the first time.
Companies undertaking international arbitration need to make greater efforts to ensure proper and effective communication with their attorneys. Unlike domestic litigation, international arbitration and cross border disputes are usually conducted in a foreign language using unfamiliar procedures.
Such unfamiliarity requires the companies to make more effort to support and communicate with their legal representatives than in a domestic litigation.
It is advisable to have a specific person or team in charge of these arbitration cases so that there is a clear line of communication with the external legal team.
Understand factual matrix
Finally, in order to succeed in international arbitration, it is of paramount importance to understand the factual matrix of the dispute.
That is why a company needs to pay particular attention to the collection of related and relevant documents at a very early stage of the proceedings. Since an arbitral tribunal will, in many cases, make its determination based on the factual evidence, rather than on the pure law, if this evidence is not sufficient, the likelihood of success will diminish as well.
If the factual matrix is in your favor and you have presented them clearly to the tribunal, the outcome is unlikely to depend on whether
English or Korean law applies since most nations’ laws are based on common sense allowing for a reasonable decision to be made.
The three points I make do not apply in all cases but I believe they are a good rule of thumb when confronted with international arbitration or litigation.
Yoon Byung-chol is a lawyer at Kim & Chang