A recently-released survey by Queen Mary School of International Arbitration (QML) highlights continued confidence in the future of London as a seat of arbitration and the continuing popularity of arbitration within the energy and finance sectors. The survey also records a growing enthusiasm for the use of arbitration to resolve technology disputes and confidence in the role that technology can play in further increasing the efficiency of arbitration. The QML survey has been published since 2006 and, drawing on nearly 1000 responses, aims to capture a snapshot of developments in international arbitration.
Future growth of arbitration in the energy, finance, and technology sectors
A majority (60%) of in-house counsel surveyed stated a preference for arbitration (together with ADR) as a means of resolving cross-border disputes. Enforceability of awards, flexibility, and the avoidance of local courts were all cited as attractive aspects of arbitration.
Arbitration has long been a popular means of resolving disputes within the energy sector. The latest QML survey suggests that this trend continues, with 85% of respondents expressing the opinion that use of arbitration is likely to increase.
Historically, the use of arbitration within the banking and finance sector has not been as widespread as in energy and infrastructure. The latest QML survey suggests that this historic position is continuing to shift. 56% of respondents anticipate an increase in the use of arbitration as a means of resolving banking and finance disputes.
The survey also highlighted the growing popularity of arbitration as a means of resolving disputes in the technology sector. 81% of those surveyed believe that use of arbitration will grow in this area. A number of users reported that this trend would be encouraged further if institutions were to publish lists of arbitrators with industry-specific experience.
London's future as a seat of arbitration
Overall, those surveyed cited "general reputation and recognition", and "formal legal structure" as primary considerations in determining the choice of seat. "Formal legal structure" was understood to include neutrality and impartiality of a seat's legal system, its national arbitration law, and its track record in enforcing agreements to arbitrate and arbitral awards.
In this year's survey, London was cited as the most popular choice of seat (64%), followed by Paris (53%), Singapore (39%), Hong Kong (28%), Geneva (26%), New York (22%) and Stockholm (12%).
Of those surveyed, 55% did not expect Brexit to have an impact on the choice of London as a seat of arbitration. Respondents believe that the "formal legal structure" available in England is likely to remain unchanged and to continue to support arbitration.
Use of technology to streamline arbitration
The survey highlights users' optimism as to the role that technology can play in making arbitration even more efficient. Already, some 73% of respondents reported "always" or "frequently" making use of "hearing room technologies". Nearly half of respondents already make use of videoconferencing as part of arbitral proceedings, stressing that one of the most significant advantages is the ability to cut the costs of travel and venue hire.
As to the future use of technology, 98% of users felt that arbitrators should make use of "hearing room technologies" more often, along with videoconferencing (89%) and cloud-based storage (91%). Whilst many users are currently unfamiliar with the use of artificial intelligence and virtual hearing rooms, a significant majority of respondents thought that use of these will have a significant impact on the future of international arbitration.
Part of Bird & Bird's series of Arbitration SpeedReads aimed at providing busy practitioners and in-house counsel with easy to read updates on topical Arbitration issues.
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