1. Arbitration is the most satisfactory method of resolving global trade disputes: Sarosh Zaiwalla, Zaiwalla & Co

Arbitration is the most satisfactory method of resolving global trade disputes: Sarosh Zaiwalla, Zaiwalla & Co

An arbitration is a private and confidential forum chosen by the parties to resolve legal disputes which would otherwise need to be decided in a court of law.

By: | Updated: October 20, 2016 5:25 PM
 Sarosh Zaiwalla, Founder and Senior Partner, Zaiwalla & Co

Sarosh Zaiwalla, Founder and Senior Partner, Zaiwalla & Co

An arbitration is a private and confidential forum chosen by the parties to resolve legal disputes which would otherwise need to be decided in a court of law. An arbitration tribunal for this purpose is appointed with the consent of the parties, as unlike a court of law, an arbitration tribunal’s jurisdiction derives from the consent of the disputing parties. Zaiwalla & Co is a specialist law firm dealing with high value commercial litigation with particular expertise in international arbitration. Here’s the excerpt from an interview with Sarosh Zaiwalla, Founder and Senior Partner, Zaiwalla & Co.

1. Who are Zaiwalla &CO?

Zaiwalla & Co is a firm of English solicitors located in the legal district of the City of London. It is a specialist law firm dealing with high value commercial litigation with particular expertise in international arbitration. The firm has been in London now for 34 years. At a reception hosted in the House of Lords on the occasion of the firm’s 30th anniversary the chief guest, the then UK Attorney General, Rt Hon Dominic Grieve QC MP, said in his speech that what the firm had achieved for the development of English law would be remembered even after 100 years. There are more than 104 judgments reported in the English law reports where Zaiwalla & Co acted for one of the parties. Sarosh Zaiwalla, the firm’s founder and now Senior Partner, has been involved in over 1000 international arbitrations. He also served as India’s representative on the Court of Arbitration of the International Chamber of Commerce (ICC) in Paris for 12 years. Zaiwalla & Co has a strong Indian connection, having acted for the Indian government in its cases in the English courts for several years.

2. What is arbitration? Throw some light on its international context.

An arbitration is a private and confidential forum chosen by the parties to resolve legal disputes which would otherwise need to be decided in a court of law. Most arbitrations are conducted by tribunals composed of either one arbitrator (appointed by a neutral authority) or three arbitrators, where each party selects one arbitrator and the third arbitrator is then selected to act as chairman by those arbitrators. Arbitration is commonly included in international contracts as the agreed means of resolving any legal disputes arising out of the contract. This is because the parties may be located in different countries, speak different languages and possibly have different legal cultures. In such cases, there is often a desire to have any dispute relating to the contract decided by a forum in a neutral country, rather than the national courts of one or the other party. An international convention concluded in New York in 1958, and now ratified by more than 150 countries, also provides for an effective means of enforcing arbitration awards internationally, which is another attraction of arbitration for international parties. The confidentiality of the process is also often considered an important advantage of arbitration over court proceedings.

3. Who are your major clients?

Historically our major clients were from India but now our clients are from Russia, China, the middle East and Africa. Recently the firm was consulted by the Russian Federation as a consultant to advise on challenging the USD 50 billion arbitration award against the Russian Federation in favour of the Yukos shareholders which was issued by Permanent Court of Arbitration in The Hague. Zaiwalla & Co is also at present handling a USD 600 million litigation dispute in the English court between two Russian oligarchs. The firm is also presently handling a USD 70 million claim in the English court for Erdenet of Mongolia which owns the second largest copper mine in the world. The firm succeeded in the UK Supreme Court for Bank Mellat the largest Iranian private bank following and the firm is handling for Bank Mellat a USD 4 billion claim in the English court against the British government. The firm has handled many client cases in the European Court of Justice (ECJ) in Luxembourg, including one for a client from Uganda.

4. What are your core areas of practice?

Zaiwalla & Co’s core areas of practice are International Arbitration anywhere in the world and high value commercial litigation. Our practice covers many sectors of commercial activity, such as: shipping; oil & gas; banking; international joint ventures and particular expertise in international trade sanctions. Many of the cases which the firm handles have been transferred to the firm by clients mid-stream from large international law firms. The firm also acts for Indian and other banks in UK.

5. How is arbitration effective in settling global trade disputes?

Arbitration is rightly considered to be the most satisfactory method of resolving global trade disputes. This is for many reasons. Firstly, it provides a dispute resolution mechanism in which the parties can ensure that they appoint arbitrators who have specialist experience. For example, in a trade dispute the parties can chose arbitrators if they so wish who have commercial experience in a particular industry. Secondly, arbitration is confidential which business houses usually prefer. Thirdly, most countries including India have agreed to United Nations New York Convention on enforcement of International arbitration awards referred to above. Under the New York Convention, the courts of the country where an arbitration award is sought to be enforced is bound to enforce the award under a summary process, and to allow its enforcement as though an order of the local court. The grounds for refusing enforcement or challenging an international arbitration award under the New York Convention are very limited.
Arbitration is particularly effective in cross-border disputes, where the rules of private international law might otherwise require the parties to sue in the local court of a country where one of the parties may feel at a disadvantage such as, for example, where the local courts suffer from long delays, an unfamiliar legal process or the possibility of multiple appeals. Arbitration is in most instances more expeditious, offers greater prospects of finality, and avoids much of the technical and procedural issues which can often plague the litigation process in court.

6. How long does arbitration typically last? Is the process confidential?

An arbitration proceeding can be finished in three months, or it can last for two years or even more. The duration depends on how strict the Arbitration tribunal is in setting, and ensuring adherence by the parties with, the timetable for the exchange of pleadings, documents and witness statements.
The process is intended to be confidential. This is expressly stated in the rules of some arbitration institutions. It is also recognised to a significant extent in English law and court practice, as most arbitration-related court hearings are heard in private to preserve the confidentiality of the process. However, confidentiality has eroded somewhat over time. Sometimes this is because of collateral court proceedings which then become public. Also, large public companies that are regulated will usually have to provide some limited information about arbitration cases involving the company to its auditors, the market authorities and shareholders.

7. What if someone is unhappy with the arbitrator’s decision? Is there any appeal process?

Arbitration is normally intended to be final and binding. The rules of some arbitration institutions say just that. Usually there is a very limited availability to challenge an arbitration award. The English Arbitration Act permits an appeal on questions of law but with leave of the commercial court. The court would only give leave to appeal if there are serious and substantial questions of law of some importance. If leave to appeal is refused there is no further appeal remedy.
Under the New York Convention, an arbitration award can be resisted or enforcement refused on the ground that the Tribunal did not have jurisdiction or, stating matters loosely, where there has been a failure of due process. The attitude of national courts to international arbitration awards, and their interpretation of the New York Convention, is not universally consistent. The Indian Supreme Court has on some occasions taken a broad interpretation of the public policy ground in the New York Convention to refuse enforcement of an International Arbitration Award.

8. How does one set the arbitration in motion?

The parties in their contract may provide how and when the arbitration is set in motion. Some contracts provide that the parties should first try to mediate their dispute during a certain fixed period before starting an arbitration. Otherwise, to formally commence the process, a notice is usually sent either in accordance with the arbitration rules of the institution (where the parties have designated institutional arbitration) or, absent any rules, then in accordance with the governing law of the arbitration agreement. The notice should set out the nature of the dispute and what is claimed and (where there is a 3-member arbitration panel) it should include that party’s nomination of an arbitrator. Once the arbitration tribunal has been constituted, it will then formally start to move the case forward.

9. Can one be represented during the proceedings?

Yes the parties can either represent themselves or appoint lawyers to represent then during the arbitration proceedings. Another significant attraction of arbitration is that even a non-lawyer can appear in the proceedings for a party.

10. How are the arbitrators chosen?

The Arbitrators are usually chosen by the parties themselves. The choice of the arbitrators is very important. The duty of a party-appointed arbitrator is not only to be fair to both parties, but he has an additional duty to ensure that after the hearing the case of the party appointing him is fully understood by his co arbitrators; although it is not his function to be an advocate. Very often one finds that where a party is from a developing country, there is a tendency to appoint a jurist from their country. However clever that person may be, he may not always be able to communicate in the way he should with. The Arbitrators are usually chosen by the parties themselves. The choice of the arbitrators is very important. The duty of a party-appointed arbitrator is not only to be fair to both parties, but he has an additional duty to ensure that after the hearing the case of the party appointing him is fully understood by his co arbitrators; although it is not his function to be an advocate. Very often one finds that where a party is from a developing country, there is a tendency to appoint a jurist from their country. However clever that person may be, he may not always be able to communicate in the way he should with is co arbitrators.

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