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The Modern Necessity of Arbitration for High Stakes Global Disputes

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Justice Scalia of the United States Supreme Court famously decreed that, “arbitration is poorly suited to the higher stakes of class litigation.” [1]  But arbitration seems richly suited to the higher stakes of some of the world’s largest and most consequential business disputes.  According to a recent tally by American Lawyer magazine, about 120 complex international disputes worth more than $1 billion each are pending at international arbitration tribunals worldwide. In total, the United Nations Conference on Trade and Development estimates that at least 518 treaty claims cases were pending last year against 95 countries, and more than 100 known disputes between feuding private investors were arbitrated.

As a recent New York Times article points out, global investors increasingly resort to arbitration to resolve international debt woes, broken contracts, and soured business deals. Investment protections in international or bilateral treaties allow companies and commercial interests to bring suits against foreign governments or entities they control. Ecuador, Argentina, Venezuela, and the Czech Republic appear most often in claims brought by aggrieved investors, according to UNCTAD, which tracks worldwide investment. Canada, Egypt, the United States, and Poland are next on the list. Big awards also stem from contract disputes between private parties.

Investors prevailed over host countries in most of the disputes that are made public, with two-thirds of tribunal decisions favoring their claims, according to the U.N. body.  Nine public decisions last year awarded damages to the party claiming injury, with a record award of $1.77 billion against Ecuador for terminating an oil contract in 2006 with Occidental Petroleum.

The growth in international arbitration has primarily benefitted a small group of leading U.S. law firms, including White & Case, Shearman & Sterling and King & Spalding.  Other U.S. law firms are seeking to build international arbitration practices.

Paris-based Lazareff Le Bars is a boutique law firm dedicated to international arbitration and dispute resolution.  In partnership with U.S. based Girard Gibbs, Lazareff Le Bars offers representation before all major international arbitral tribunals.   Together, Lazareff Le Bars and Girard Gibbs have the capacity to represent clients in arbitration proceedings worldwide and in courts of law in the United States and France.

If you have questions about how Girard Gibbs and Lazareff Le Bars can serve you, please contact Daniel Girard, (415) 981-4800, or Benoit Le Bars, +33 (0) 1 80 18 25 30.

 


[1] AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1752 (2011)