Back to basics: fundamentals of international arbitration

In the past decade or so, the burgeoning of the international arbitration industry has been felt around the world and in all sectors. An article in The New York Times on 26 August 2013, entitled “Growth in global disputes brings big paychecks for law firms” suggested that the effect of ever-growing disputes on the business strategies of law firms was the global expansion of dispute resolution teams. Disputes have become big business for firms – and for arbitration institutions. If you consider the caseload reports from the various institutions in the region, you will see year-on-year growth. At the Hong Kong International Arbitration Centre (HKIAC), with the rate of annual growth of administered arbitration matters at approximately 30% over the past few years, we have experienced no different.

When considering the strategy of an arbitration institution, one has to wonder if the strategy is the same as that for a firm? Is the end goal increased revenue? Or is it similar rates of caseload growth? While strong numbers are certainly important and, to some extent, they suggest confidence in an institution, it is my view that an institution must focus on the service it provides to its users. As non-profit organisations, which most institutions are, we have the benefit of not having to be driven exclusively by the bottom line. For HKIAC, the long-term strategy is to maintain and continue to reflect on how to provide a premier service to our users.

And the service that we provide must further the guiding principles of arbitration as a mechanism to resolve disputes – party autonomy and enforcement. Our end goal should be to facilitate the arbitral process efficiently, and with a view of what the end users expect and deserve when choosing arbitration over another dispute resolution mechanism.

How do we achieve this? At HKIAC, we have taken a two-fold approach: dialogue and education.

The author, Chiann Bao, is Secretary General of the Hong Kong International Arbitration Centre