Arbitration in Finance

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Rethinking the Use of Arbitration Clauses by Financial
Publication Institutions
Journal of International Irene Han
Arbitration (*)
In 1995, this journal published an article considering the use of arbitration clauses in the area
of banking and finance, which was observed to be ‘practically non-existent’ at the time. In the
Bibliographic reference two decades that have followed, financial institutions have gradually increased their use of
Irene Han, 'Rethinking the arbitration clauses. However, arbitration has yet to become the norm in resolving
Use of Arbitration Clauses by international financial disputes, and there is a gap between the use of arbitration in the field
Financial Institutions', of banking and finance and in the general commercial sphere. This article explores the
Journal of International justifications provided for this gap – in particular, financial institutions’ traditional preference
Arbitration, (© Kluwer Law for litigation – to argue that many of these justifications are in fact misconceived. The article
International; Kluwer Law also highlights fundamental characteristics of arbitration that make it highly appropriate for
International 2017, Volume use in the financial context. In particular, four widely used financial transactions are
34 Issue 2) pp. 207 - 238 identified as being highly suited to arbitration. The article then considers two case studies of
current efforts being made to promote the use of arbitration clauses. Finally, three
suggestions are proposed to further facilitate the increased use of arbitration clauses by
financial institutions.
P 207
P 208 1 Introduction
In 1995, this journal published an article considering the use of arbitration clauses in the
area of banking and finance, (1) which was observed to be ‘practically non-existent’ at the
time. (2) In the two decades that have followed, financial institutions have gradually
increased their use of arbitration clauses, with arbitration clauses finding their way into a
range of financial agreements. Nevertheless, arbitration has yet to become the norm in
resolving international financial disputes. This is in marked contrast to the popularity of
arbitration in the commercial sphere more generally (3) : in a recent survey, 52% of
P 208 respondents listed international arbitration as their most preferred mechanism for
P 209 resolving cross-border disputes; (4) the same survey revealed a much lower uptake
amongst financial institutions, with only 23% of respondents in the financial sector
considering arbitration to be their preferred dispute resolution mechanism. (5) In a
separate survey, it was found that only 6% of the financial institutions interviewed had
used arbitration in more than 5% of their total disputes. (6) Indeed, the general consensus
amongst legal scholars and practitioners is that the use of arbitration in financial
transactions has ‘[lagged] behind the growth in other sectors,’ (7) with financial institutions
showing a strong preference for litigation, the traditionally used dispute resolution
mechanism in the financial sector. (8)
In this article, I build on the literature that has grown around the use of arbitration clauses
in banking and finance in the last twenty years to argue that there is no justification for the
gap between the use of arbitration clauses in international financial disputes and in the
broader international commercial context. In particular, I focus on the use of arbitration as
compared to litigation to argue that, in many ways, arbitration is in fact a superior method
of international dispute resolution for financial institutions, and its use should be further
promoted.
Thematically, my argument is divided into three broad parts to show that: (1) the
justification for this gap – that litigation is inherently more suited to financial dispute
resolution – is fundamentally misconceived; (2) a number of financial transactions are in
fact particularly suited to arbitration; and (3) efforts have been, and should continue to be,
made to further promote the use of arbitration clauses by financial institutions and ensure
that arbitration continues to evolve and adapt to the current commercial context.
The article is organized into eight sections. Section 2 defines the scope and terms of this
article. Section 3 addresses the first theme by considering the arguments against the use of
arbitration by financial institutions, and demonstrating that many of these arguments are
P 209 misconceived. Sections 4 and 5 address the second theme: in section 4, I examine the ways
P 210 in which arbitration is a superior dispute resolution mechanism to litigation,
particularly in the financial context. In section 5, I identify four common financial
transactions that are especially suited to arbitration. Sections 6 and 7 address the third
theme by discussing recent institutional efforts made to encourage the use of arbitration
clauses by financial institutions, and further reforms that will improve the desirability and
ease of using arbitration. Section 8 concludes.
2 Definitions
2.1 Arbitration
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Arbitration is ‘perhaps the oldest form of alternative dispute resolution’. (9) Although the
current international arbitration system is held in place by a ‘complex system’ (10) of
national laws and international treaties, the concept of arbitration is a fundamentally
simple one (11) : it is a method of dispute resolution whereby parties agree to submit their
current or future disputes for resolution by a chosen private individual whose expertise
and judgment they trust. This individual is the arbitrator (alternatively, an arbitral
tribunal), who will consider each party’s arguments and reach a binding decision. The
binding nature of arbitrators’ decisions (‘arbitral awards’) sets them apart from other forms
of alternative dispute resolution, such as mediation. (12)
Arbitration is different from litigation in three fundamental ways. First, it takes place
outside the court, often outside either party’s home jurisdiction. Second, it is premised on
parties’ consent and autonomy (13) : parties agree to use arbitration as the chosen dispute
resolution mechanism, and agree to choose their own arbitrators. Third, arbitration is a
private process: unlike litigation, which is a public process, arbitration is conducted in an
‘environment of confidentiality’. (14) These three differences also reflect the key underlying
characteristics of arbitration – neutrality, party autonomy, and privacy – which I will draw
on to demonstrate how arbitration is appropriate for international financial dispute
resolution, and also to determine how arbitration might continue to evolve while
maintaining its fundamental distinctions from litigation. (15)
P 210
P 211 Generally, there are two types of arbitration: ad hoc and institutional. The former is
conducted ‘pursuant to rules agreed by the parties themselves or laid down by the arbitral
tribunal,’ (16) while the latter involves a specialist arbitration institution (17) which
administers the arbitration under its own arbitral rules. (18) The arguments in this article
generally apply to both types of arbitration, although a distinction will be made where
appropriate.
Additionally, there are three types of arbitration agreements: ‘arbitration clauses,’ which
are prospectively drawn up and agreed to before the occurrence of any dispute between
the parties (19) ; ‘submission agreements,’ which are agreements to arbitrate made after
the dispute has arisen; and ‘agreements to arbitrate,’ which are deemed to arise in
international instruments concluded between states. (20) This article will focus on the use
of arbitration clauses for two reasons: first, submission agreements are very rare, as it is
‘often difficult for parties to agree to arbitrate once any damage has been done’ (21) ;
second, the focus of this article is on financial institutions, rather than agreements
between states.
2.2 Financial institution

Financial institutions are institutions that engage in activities related to ‘finance,’ defined
as the ‘management of large amounts of money’. (22) This includes banking and financial
activities such as loans, bonds, derivatives, and project finance. In this article I focus
particularly on retail and investment banks, which provide finance through different types
of transactions to other entities such as states and corporations. Much of the literature
identifies bankers in particular as being reluctant to embrace arbitration, in contrast to
areas such as insurance, where arbitration is often used to settle commercial disputes
because it is seen as being more cost-efficient than litigation. (23) Because banks are often
the parties with greater bargaining power, and also tend to be the parties enforcing debt
obligations, the focus of my analysis will be on the advantages of arbitration for banks in
their role as plaintiffs. However, the arguments raised will also apply in large part to bank
and non-bank defendants.
P 211
P 212 3 Traditional Preference for Litigation
Litigation has historically been preferred as the primary means of dispute resolution in the
financial sector. In particular, there has been a strong preference for the courts of New York
and England, (24) which have ‘long had a reputation for providing a high degree of legal
certainty,’ (25) as well as high quality judges and judgments. (26) Indeed, in a 2013 survey,
82% of respondents in the financial sector expressed that litigation was their first choice of
dispute resolution mechanism. (27)
On one level, this reflects what has been described as a ‘herd mentality’ (28) amongst
bankers, and a reluctance to change from their traditional preference for litigation before
national courts. (29) Critics have observed bankers’ tendency to be conservative (30) and
uneasy about arbitration. (31) One commentator further argues that ‘the world of
arbitration and the world of banking are apart. Arbitration practitioners consider bankers
as being most ungrateful for not showing more gratitude to the many advantages that
arbitration offers … Conversely, bankers reproach arbitrators for not understanding the
basics of a banker’s business.’ (32)
On a deeper level, however, there may be practical and theoretical justifications
underpinning the traditional preference for litigation. These include the suitability of
litigation for simpler arrangements such as loan transactions, the availability of appeal
mechanisms, and the relative ease of joining third parties. This section considers each of
these justifications, and addresses some of the weaknesses in these arguments.
3.1 Simplicity
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One reason that litigation has been preferred in the financial sector is that courts have
been perceived as better able to deal with simple factual disputes concerning the
enforcement of a mere payment obligation. (33) Park notes that in the context of simple
P 212 loan transactions, ‘a debtor’s default usually results from simple inability or unwillingness
P 213 to pay, rather than any honest divergence in the interpretation of complex or ambiguous
contract terms’. (34) As such, litigation is seen as an easier and faster way to settle disputes
(35) than arbitration, the specialized nature of which may seem unnecessary. (36) As one
banker states, ‘if we are owed money we sue. Why bother with arbitration?’ (37)
However, this objection is in itself over-simplistic. It assumes the ability to prospectively
decide, at the time of concluding an agreement, whether a conflict will be simple or
complex, when in fact this is often not possible to determine. Moreover, depending on the
factual circumstances, even simple loan transactions can give rise to complex disputes
that may concern issues such as currency exchange provisions, computation of payment,
and the effect of government regulations. Thus it would be naïve to expect only disputes
arising from the borrower’s clear breach of its unilateral and unconditional repayment
obligations. (38) While this argument does not address the further objection that the New
York or English courts would in any case be able to handle more complex issues with
sufficient expertise, a point that will be addressed in further detail below, it is clear that
the perceived simplicity of potential proceedings is not in itself a reason to prefer
litigation.
3.2 Summary proceedings

Another advantage offered by litigation is that summary proceedings are available through
litigation, but not arbitration. Bankers argue that summary proceedings are particularly
valuable in the context of simple claims for unpaid debts, and can present efficiency
advantages by enabling faster debt recovery through litigation than arbitration. (39) While
claims that are undefended or have hopeless defenses would be subject to summary
procedures in courts, they would take longer to resolve (40) and cost more if resolved
through arbitration, which generally requires each party to have its case heard. (41)
P 213 This argument faces three practical difficulties, which together suggest that, in reality, the
P 214 benefit of obtaining summary or default judgments from the courts may be overstated.
First, it is possible for debtors to resist an application for summary judgment without great
difficulty. For example, they can raise defenses that lack real merit, but are complex
enough to avoid summary judgment. (42) The consequence of such a strategy is that the
resulting court proceedings will not necessarily be quicker than arbitration.
Second, arbitrators are also provided with tools that enable them to resolve disputes
quickly and efficiently. For example, Article 22(1) of the ICC Rules provides that tribunals
must ‘conduct the arbitration in an expeditious and cost-effective manner,’ and empowers
the arbitral tribunal to ‘adopt such procedural measures as it considers appropriate’. (43)
In Essar Global, the English High Court recognized that this could, in appropriate cases,
extend to the granting of a form of summary judgment, though it should be noted that in
that case the procedure adopted was held to have gone ‘beyond the summary judgment
procedure adopted in the courts of New York or London’. (44) More recently, the Arbitration
Institute of the Stockholm Chamber of Commerce has included provisions on summary
procedures in its draft arbitration rules. Whether this will ultimately be adopted remains
to be seen. (45)
Third, the arbitral process is capable of acceleration in other ways. Expedited, ‘fast-track’
provisions are increasingly becoming available under the rules of a number of
international arbitration institutions, (46) allowing parties to agree to shorten time limits
(47) and even agree that no reasons be given. (48) In addition, parties have the option of
asking for preliminary determinations. (49) Unlike summary procedures, parties to a
preliminary determination have the right to present their case and any relevant evidence.
To enable more efficient resolution of the dispute, tribunals can streamline arbitral
P 214 procedures to ‘[determine] some but not all of the issues in dispute,’ such as questions
P 215 relating to jurisdiction and contractual interpretation. (50) This enables the tribunal to
narrow down the issues or, in some cases, dispose of the arbitration entirely. (51)
These provisions do present their own risks, for example, there is a danger of tribunals
breaching due process by using preliminary determinations in inappropriate
circumstances, such as where parties do not have a fair and reasonable opportunity to
present their case (52) ; conversely, there is also the risk, in such contexts, of due process
‘being used as a sword’ by parties to threaten arbitrators into accepting their procedural
proposals. (53) However, such risks can be adequately addressed by strengthening
tribunals and enhancing arbitrators’ knowledge of and ability to choose the appropriate
procedural options available under arbitration, and do not in themselves provide a reason
to avoid arbitration.
3.3 Ability to appeal

Unlike litigation, which generally enables decisions to be appealed to a court higher up in
the curial hierarchy, arbitral awards can only be set aside on very limited procedural
grounds. The rules of most major arbitration institutions do not provide any framework for
appeal. (54) For example, the UNCITRAL Model Law expressly provides that awards shall be
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‘final and binding,’ (55) while the ICC Arbitration Rules provide that each party ‘shall be
deemed to have waived their right to any form of recourse insofar as such waiver can
validly be made’. (56) As such, the absence of a ‘second chance’ in arbitration may provide
a further reason for reluctance about arbitration. (57)
P 215 However, the benefits of an ability to appeal are overstated. While it is true that parties
P 216 should have recourse against aberrant decisions, (58) the arbitration system currently
strikes a good balance between the need for procedural fairness on the one hand, and the
importance of finality on the other. On one hand, the framework for international
arbitration provides sufficient protection of procedural fairness – the 1958 Convention on
the Recognition and Enforcement of Arbitral Awards (‘New York Convention’) and the
UNCITRAL Model Law (59) provide an exhaustive (60) list of procedural grounds which a
party can use as a defense to resist enforcement, allowing courts to set aside the award.
These include circumstances involving a ‘serious breach of due process,’ (61) for example,
where a party was not given proper notice of the appointment of an arbitrator or was
otherwise unable to present its case, (62) or where the composition of the arbitral tribunal
was not in accordance with the parties’ agreement. (63)
On the other hand, the general finality of arbitral awards is in the parties’ interests.
Particularly in the financial context, the ability to appeal a decision may in fact work
against the interests of a bank that has prevailed in what may have been a long and
difficult trial, (64) with appellate procedures necessarily increasing the time and costs
associated with obtaining a final award. (65) Moreover, opponents may be able to
significantly delay recovery of judgment debts by skilfully manipulating the appeals
process, which would be especially damaging in a sector where time is frequently of the
essence. As such, the preference of commercial efficacy over legal perfection is justified
overall, so long as parties are able to ensure that the process can be ‘performed with
integrity’. (66) This may be achieved, for example, through the use of carefully drafted
arbitration agreements and reputable arbitration institutions.
3.4 Greater legal certainty

Litigation may also be preferred because it is perceived as providing for greater legal
certainty in two related ways: through the availability of precedent and therefore the
predictability of outcomes.
P 216 Courts in common law jurisdictions apply the doctrine of precedent. As such, court
P 217 decisions can provide guidance to the market on how standard documentation such as
the ISDA Master Agreement should be interpreted, (67) thereby reducing confusion and
eliminating risks resulting from inconsistent interpretation. In contrast, the private and
confidential nature of arbitral awards has prevented the publication of decisions and the
establishment of a system of precedent. As such, Freeman notes that ‘for as long as banks
favor precedent rather than fearing it, this is likely to represent an advantage of litigation
in national courts over international arbitration’. (68)
The lack of transparency in the arbitral decision-making process is undeniably
problematic. The potential for inconsistency in decision-making is a key shortcoming of
arbitration that ought to be addressed. In sections 5 and 6, I will consider ways in which
certain international bodies are and should be responding to this challenge.
The second way in which litigation is argued to promote greater legal certainty is by
rendering predictable outcomes through the courts’ application of legal principles and the
enforcement of parties’ agreements. This is particularly true with respect to the courts of
England and New York, which have a strong reputation for promoting legal certainty by
taking a commercially sensible approach to enforcing written agreements according to
their terms. (69) In contrast, arbitrators have been criticized for having a tendency to
render decisions that are equitable in nature, and not strictly based on contractual terms
and legal principles. (70) This is particularly undesirable for banks, which are often able to
exercise considerable influence over their contractual terms, (71) and will thus want these
terms to be enforced accordingly.
These concerns are unfounded. Decisions cannot be rendered ex aequo et bono without
parties’ express consent, (72) and in fact equitable factors only play a greater role in
arbitration than in state proceedings to the extent that arbitrators ‘have a natural
tendency to take into account the underlying economic interests of the parties, as well as
the usages, customs and business practices of the relevant commercial or industrial
sector’. (73) In this sense, the holistic and pragmatic approach taken in arbitration is not a
weakness but a significant strength that helps to ensure a fair and commercially desirable
decision overall. Again, any concerns relating to legal certainty may again be adequately
addressed through careful drafting and selection of arbitration institutions.
P 217
P 218 3.5 Joining third parties
Another argument for preferring litigation is the relative ease of joining third parties in the
context of multi-party disputes, which may arise in the context of transactions that involve
a number of different parties, such as syndicated loans and project finance. Because
courts’ power to consolidate proceedings or join additional parties is typically conferred
on them by the civil procedure rules of their respective jurisdictions, (74) party consent is
not required. In contrast, arbitration is an entirely consensual process, and parties cannot
4
be joined against their will. (75) This limitation on joinder poses the risk that inconsistent
decisions will be produced as a consequence of resolving related disputes in separate
proceedings. (76) There is also a risk that if some parties to the dispute were not party to
the arbitration agreement, the same matter will be subject to concurrent arbitration and
litigation proceedings, costing additional time and money. (77)
Although these risks can be avoided by obtaining all parties’ consent to joinder of
proceedings, this may in practical terms be a highly complex task. As such the consensual
nature of arbitration is, in this context, a significant weakness overall. Thus in section 7, I
recommend further changes to improve the ease of joinder in multi-party arbitrations, in
particular the introduction of bespoke arbitration clauses that explicitly provide for
joinder, and consider recent efforts by international arbitration institutions to address this
issue.
3.6 Interim remedies

Some bankers have also expressed a fear that arbitration will hinder access to interim
remedies such as injunctions and stay orders. (78) Although there is no available
information on the frequency of the need for interim relief in the financial context, it is
likely that interim relief will often be required if a party wishes to prevent assets which
could be used to satisfy a claim from being placed out of reach in a different jurisdiction,
(79) or potentially to prevent fraudulent encashment of bank guarantees. (80)
P 218
P 219 Both the UNCITRAL Arbitration Rules (81) and the rules of major arbitration institutions
(82) allow parties to apply for interim remedies from an arbitral tribunal or a state court.
However, in reality, the availability of interim remedies is uncertain. Parties face a
‘conundrum’ (83) : on the one hand, an arbitral tribunal may not be able to effectively
grant interim measures for a number of possible reasons – relief may be urgently required
before a tribunal can be formed, or it may require the involvement of third parties over
which the tribunal does not have jurisdiction; additionally, interim remedies from an
arbitral tribunal may be difficult to enforce. (84) On the other hand, if parties seek interim
relief in a national court, that court may decline to grant the requested measure because it
does not wish to interfere in the arbitral proceedings, (85) or because it considers that
judicial interim relief is incompatible with the arbitration agreement. (86) In Channel
Tunnel, for example, the House of Lords held that it had jurisdiction to provide interim
relief but declined to do so on the grounds that this would unduly ‘take out of the hands of
the arbitrators … a power of decision which the parties have entrusted to them alone’. (87)
I argue that the inherent flexibility of arbitration means that these concerns can largely be
addressed by changes in arbitral rules and procedures. For example, the ICC Arbitration
Rules provide for ‘emergency arbitration,’ allowing parties to receive urgent interim relief
where necessary. (88) In addition, the UNCITRAL Model Law now attempts to improve
enforceability of interim measures by ‘[limiting] the number of circumstances in which the
court may refuse to [do so]’. (89) While it should be admitted that the consensual nature of
arbitration means that interim measures must generally be granted on an inter partes
basis, there is considerable scope for further changes to improve access to interim relief.
One area for improvement relates to the division of powers between courts and arbitral
tribunals – a possible solution is for reform of the UNCITRAL Model Law to more clearly
indicate when interim relief can be provided by arbitral tribunals and courts, respectively.
Section 44(5) of the UK Arbitration Act 1996 may provide useful guidance in this respect: it
provides that ‘the court shall act only if or to the extent that the arbitral tribunal … has no
power or is unable for the time being to act effectively’.
P 219
P 220 4 Increasing Interest in Arbitration
Despite the perceived weaknesses discussed above, there is a ‘broad consensus’ (90) that
arbitration has recently seen a rise in usage by financial institutions. This is confirmed by
statistics from the International Chamber of Commerce, which indicate that the number of
arbitrations in the financial sector more than doubled from around fifty in 2008 to over 110
in 2010. (91)
There are a number of key driving factors behind this growth in interest, including the
internationalization of many banking and financial transactions, the increase in
transactions with emerging markets, (92) and the increased complexity and sophistication
of disputes. (93) These changes have exposed the deficiencies of traditional dispute
resolution through litigation, at the same time highlighting the ability of arbitration to deal
with these difficulties as a ‘useful alternative’. (94) This section will consider the
advantages offered by arbitration, including the relative ease of enforceability, as well as
benefits arising from its key characteristics: party autonomy, neutrality, and privacy.
4.1 Enforceability
One of the most significant advantages of arbitration over litigation lies in the ease of
enforcing foreign arbitral awards as compared to foreign court judgments. Enhanced
enforceability is widely recognized as the ‘main attraction’ of arbitration, (95) and is
achieved through a comprehensive regime for the cross-border enforcement of arbitral
awards (96) created by the New York Convention. Article III of the Convention provides that
each of the contracting states ‘shall recognize arbitral awards as binding and enforce them
5
P 220 in accordance with the rules of procedure of the territory where the award is relied upon,
P 221 under the conditions laid down in [its] articles’. (97) There are currently 155 contracting
state parties (98) to the Convention, reflecting its widespread success and application.
In contrast, there is no similar global Convention for the international enforcement of
foreign court judgments. (99) While some cross-border enforcement regimes have been
created through bilateral treaties (100) or multilateral conventions, (101) the system is
‘patchy’ (102) overall, and often ‘depends on the vagaries of the local law of the place of
enforcement’. (103) Moreover, enforcement may be subject to further restrictions; for
example, the UK’s bilateral treaties only extend to enforcement of judgments for a sum of
money. (104) As such, outside the limited regimes for cross-border enforcement of court
judgments, litigation, even in financial centres such as London or New York, will not be
productive if the judgments obtained cannot be enforced against the relevant
counterparty. (105)
Enforceability is particularly relevant in the current financial context, where financial
transactions increasingly involve parties from emerging markets (106) that may not have a
strong culture of compliance. (107) In this context, arbitration may be preferred because of
its potential to reduce ‘enforcement risk’ (108) thanks to the widespread application of the
New York Convention. It also has the potential to lower the cost of the financial transaction
(for example, through lower interest rates) by reducing the risk of non-recovery. (109) A
further, related benefit is that rating agencies may ‘look more favorably upon transaction
documentation that contains an arbitration agreement’ rather than a jurisdiction
agreement in favour of state courts. (110)
P 221
P 222 Of course, even in contracting states of the New York Convention, enforcement is not
guaranteed. For example, legal scholars have noted the difficulty of enforcement in Saudi
Arabia, where conflict with principles of Islamic law may restrict enforcement, (111) and in
India, where considerations of public policy (defined broadly as the fundamental policy or
interests of India (112) ) may prevent the enforcement of the award if it is inconsistent with
Indian domestic law. (113) However, these limitations are arguably a result ‘not [of] the
weakness in the arbitral process but rather of the applicable legal system’. (114) As such,
the use of arbitration remains an important means of avoiding the pyrrhic victory (115) of
obtaining favourable but unenforceable court judgments, and in such contexts can be the
only efficient way to resolve disputes. (116)
4.2 Party autonomy

Another key advantage of arbitration is the flexibility and autonomy that it affords to
contracting parties who can, within certain limits, determine the main elements of their
arbitration, (117) thus avoiding the ‘strait-jacket of national procedural systems’. (118) In
particular, parties are able to design the arbitral process by choosing their arbitrator and
the relevant procedure to use.
4.2[a] Choice of Arbitrator
Parties can choose their arbitrators, ensuring that their dispute will be heard by
individuals with the necessary expertise. This is particularly relevant in the financial
context, where ‘the lightning speed of developments in national and international
financial and capital market law’ (119) has resulted in disputes often concerning technical
P 222 and increasingly complex factual and legal questions (120) with which judges and
P 223 especially juries are unlikely to be familiar. (121) Parties who arbitrate can choose
specialized arbitrators, for example, international bankers and lawyers with extensive
professional and practical financial experience, (122) who will likely be able to better
understand the relevant issues. (123) The importance of this advantage should not be
understated; a survey of in-house counsel in the financial sector has indicated that the
expertise of the decision-maker is in fact perceived as the number one advantage of
arbitration. (124)
4.2[b] Choice of Procedure
Additionally, parties can customize the arbitral process by choosing many of the
procedural features of the arbitration. These include the seat of the arbitration, the
language used, the type of arbitration (ad hoc or institutional), and the relevant rules to
apply. (125) Importantly, parties are also often able to specify the speed of the
proceedings by requesting expedited procedures. As mentioned above, this is a relatively
new development that seeks to reduce required costs and time in the arbitral process.
(126) For example, Rule 5 of the Arbitration Rules of the Singapore International Arbitration
Centre allows parties to request the shortening of time limits and the presentation of
reasons in summary form in certain limited circumstances. (127) While it should be
acknowledged that expedited procedures are not suitable for all financial disputes, and
that they are reliant on the cooperation of the other party, the availability of such
procedures does add a further layer of flexibility to the arbitral process.
4.2[c] Neutrality
Arbitration should also be preferred to litigation in a cross-border context because it
enables parties to choose a third jurisdiction as the arbitral seat, providing a more
‘politically and procedurally neutral forum’ for dispute resolution, (128) thus improving the
6
perceived fairness of the procedure. (129) This does not entirely preclude the involvement
P 223 of the courts, since courts of the seat will have certain powers in relation to the arbitration.
P 224 (130) However, the fact that the dispute is resolved away from the ‘home court’ (131) of
either party may be particularly attractive to state entities, for whom sovereignty is
important, and who generally prefer to avoid submitting to foreign courts’ jurisdiction.
(132) It is also valuable to international organizations, which may be keen to avoid
accusations of bias that may arise if they favour the courts of one of their Member States.
(133) Both these entities are frequently involved in transactions with financial institutions.
Additionally, selection of a neutral forum through arbitration helps to avoid situations
where court proceedings may be subject to various forms of governmental influence. (134)
Litigation is inherently unsuitable for the resolution of cross-border disputes, since
domestic courts are generally required to prioritize ‘preserving the internal coherence of
their system [over] attuning it to the needs of transnational commerce’. (135) Moreover,
arbitration can aid risk control, since arbitrators, unlike national judges, are not bound to
apply notions of national public policy, which encompasses legislative changes that may
potentially require judges to apply such changes to declare parts of the parties’ agreement
ineffective. (136)
4.2[d] Privacy and Confidentiality
The privacy and confidentiality of arbitral proceedings present another important
advantage. Although these terms are often used interchangeably, the current trend in
international commercial arbitration is to distinguish between the two (137) : ‘privacy
means that hearings are not open to the public … [c]onfidentiality, on the other hand,
concerns the obligation of the participants not to disclose information related to the
proceedings to third persons’. (138) Confidentiality attaches to the materials ‘created,
presented and used in the context of the arbitral process,’ (139) potentially extending even
after the arbitral proceedings. (140) Both are particularly important in the financial
context, and offer strong reasons for preferring arbitration.
P 224 Privacy is clearly protected under the rules of many major arbitration institutions. (141)
P 225 This protection is particularly justified in the financial context, where financial
institutions place a premium on the value of privacy. (142) While negative publicity may
occasionally be useful in exerting pressure on counterparties, (143) the argument that
publicity is beneficial can largely be dismissed on the grounds that overall, the pressure of
publicity ‘hardly plays a decisive role when the question at stake is whether or not the
borrower will meet his payment obligations’. (144) Moreover, negative publicity poses a
significant threat to banks’ international reputations and relationships with other banks
and commercial entities, (145) both of which are matters considered to be of ‘paramount
importance’. (146) Such reputational damage has been particularly undesirable after the
global financial crisis of 2007–2008, because banks are eager to maintain consumer
confidence, as well as their overall standing in the industry. (147)
Confidentiality is equally important in the financial context. This is because the public
nature of court trials exposes a variety of private internal documents to public scrutiny.
These documents often contain valuable trade secrets and information about internal
operations, (148) which banks are likely to be keen to prevent from appearing in the
financial or public press. (149) The protection of confidentiality is less certain, particularly
in jurisdictions such as Australia, which have not only rejected an implied term of
confidentiality (150) but also recognized a ‘public interest exception’ to confidentiality in
the controversial case of Esso v. Plowman. (151) However, such difficulties may largely be
avoided by the express inclusion of a confidentiality provision in the parties’ agreement.
4.2[e] Finality
P 225 As noted above, arbitral awards are generally not appealable, and can only be set aside
P 226 for reasons relating to the tribunal’s jurisdiction or breaches of due process. (152)
Arbitration rules typically provide that awards are ‘final and binding’ (153) or that parties
will irrevocably waive their rights to review. (154) This finality is in fact a key strength or
arbitration, since it allows for decisive clarification of the disputed legal issues, and a
more permanent resolution of the relevant conflict between the parties. Although there are
limited circumstances where access to appeal is important, particularly where a party
wishes to have a legal issue definitively determined by the highest court with effect for the
entire sector, (155) finality is generally commercially desirable. It increases certainty in the
ultimate result (156) and saves costs and time that would otherwise be spent on exhausting
appellate avenues. Finality is particularly important in the financial context, where time is
often of the essence in the context of recovering debts. (157)
4.2[f] Cost- and Time-Efficiency
Arbitral proceedings also have the potential to be faster and cheaper than litigation. (158)
Outside the United States, arbitral proceedings generally do not involve the process of
discovery, which is not only time-consuming (159) but also expensive. (160) Additionally,
arbitration can reduce transaction costs associated with risks arising from unfamiliarity
with foreign legal process, as well as the uncertainty of enforcement. (161)
Nevertheless, critics have noted that arbitration is not necessarily always faster and
cheaper than litigation, particularly in the commercially oriented courts of London and
7
New York. (162) Indeed, practitioners have identified the length of time taken to resolve
disputes as the second most significant disadvantage of international arbitration. (163)
Overall, speed and lower costs depend largely on parties’ design and management of the
arbitration procedure, and are in themselves weaker reasons for preferring arbitration to
litigation.
P 226
P 227 5 Appropriateness of Arbitration in Particular Financial Transactions
In this section I provide examples of specific financial transactions whose characteristics
make them particularly suited to arbitration. In analyzing each transaction, I consider four
main factors that will likely have a bearing on the suitability of arbitration: (1) the novelty
of the transaction; (2) the complexity of the transaction and the need for expert input; (3)
the number of parties involved; and (4) whether the transaction is likely to involve multi-
jurisdictional elements. In addition, I identify other factors that may influence the
appropriateness of arbitration with respect to particular transactions.
5.1 Loans
Banks are often involved in the provision of loans, defined as a ‘promise by one person (the
lender – here, the bank) to pay a sum or sums of money to or on behalf of another (the
borrower) in consideration of the borrower agreeing to repay that sum of money on
demand or at a fixed future date’. (164) Loans may involve a single lender and borrower, as
is the case with bilateral loans, or they may involve multiple lenders, in the form of
syndicated and club loans. Syndicated loans enable a number of financial institutions to
provide loans to a borrower under a single agreement, (165) and are often used as a
‘standard tool’ in financing transactions. (166) On the other hand, lenders using a club loan
structure typically act parallel to each other, rather than under the same agreement. (167)
In both cases, borrowers’ choice to borrow from multiple lenders may result from factors
such as the size of the loan or the high risk involved. (168)
Bilateral loans arguably present the clearest example of where the simplicity and
summary proceedings arguments in favour of litigation might apply, in which context
lenders neither need nor desire the advantages offered by arbitration. (169) This is
because loans are far from a novel type of financial transaction, and significant expertise
is not required to understand the basic and fundamental features of a loan. As such,
P 227 bankers have argued that loan agreements are unlikely to give rise to any legal difficulties
P 228 or technical questions since they generally involve no more than ‘simple obligations of
the borrower to repay the loan upon maturity, or in the event of default situations’. (170)
In section 3, I have already rebutted both arguments in a general sense. While it is true
that litigation may be suitable where the dispute is indeed simple and can be resolved
through summary proceedings, the availability of fast-track arbitration proceedings means
than arbitration is no less appropriate. Additionally, not all loan agreement disputes
involve simple situations where a borrower has defaulted and breached its unilateral
obligation to repay the loan. (171) In fact, disputes may raise a range of legal and financial
issues that are potentially highly complicated and technical, especially where the loan is
cross-jurisdictional. One example of a dispute arising under a loan agreement is where a
defendant seeks to avoid payment of a commitment fee on an unused portion of its loan
by arguing that the conditions required for payment have not yet been fulfilled (172) – such
disputes are clearly far from simple. As such, the special expertise of experienced
arbitrators will be highly relevant and necessary in many disputes in this context.
The need for expertise is even more relevant where there are multiple lenders. This
creates two potential levels of dispute (173) : those between the borrower and lenders, and
those amongst the lenders. This no doubt adds to the range of legal and financial issues
that may arise, and increases the importance of expert determination. Additionally, the
difficulty of joining third parties – a current weakness of arbitration – does not raise
significant challenges in the context of syndicated loans, since the relationships between
the parties are in large part regulated by a single contract, which could include an
arbitration clause. On the other hand, a greater challenge may arise in the club loan
context, since the borrower will have separate contracts with each lender. However, this
can easily be overcome if all parties agree to provide contractual consent to the later
joinder of potential proceedings.
5.2 Bonds
Bonds are a specific type of loan involving the issue of transferable debt securities (174)
from the borrower to the (usually multiple) lenders. Generally, the issue of bonds is
arranged by investment banks (acting as managers), which enter into a subscription
agreement with the borrower, under which the managers agree to find lenders in return for
P 228 a fee. (175) In addition to the subscription agreement, the borrower has a contractual
P 229 relationship with each lender, the terms and conditions of which are set out in a deed poll.
Banks may play any of the three roles in a bond transaction: they may help to issue bonds,
act as lenders by purchasing bonds, or use bonds to raise finance. Disputes are particularly
likely to arise where the bank is in the latter two roles, for example, upon borrower default
on interest payments, where the bank is acting as a lender.
Bonds are not a novel type of financial transaction, and there is substantial market
8
practice relating to the resolution of disputes in this context, thus the requirement for an
arbitrator’s specialized expertise is less obvious. However, the enhanced enforceability of
arbitration presents a significant advantage over litigation, especially where disputes are
cross-jurisdictional in nature. With the growing use of cross-jurisdictional bonds,
particularly in emerging markets, arbitration provides vital protection for banks acting as
lenders, enabling them to successfully enforce payment and other obligations set out in
the deed polls of bonds issued by borrowers in different jurisdictions. In contrast,
enforcement in local courts may be difficult, providing a strong reason for avoiding
litigation.
The appropriateness of arbitration in the context of bond transactions is not affected by
the fact that borrowers often have no idea who their ultimate lenders, the bondholders,
are. This is because consent to arbitration can be obtained if borrowers include an
arbitration clause in the terms of the deed poll, which lenders are deemed to have
accepted upon purchase of the bond.
5.3 Derivatives
Banks, particularly investment banks, are frequently involved in trading derivatives, which
are ‘contracts whose value depends on (or “derives” from) the value of an underlying asset,
reference rate or index’. (176) Derivatives are one of the fastest growing sectors in the
current financial markets. (177) Their underlying concept is simple; they consist of contracts
under which two parties agree that they will pay or make deliveries to each other some
time in the future. (178) Derivatives can be traded internationally and domestically in two
primary forms: on financial markets (‘exchange-traded’), or directly between
counterparties (‘over-the-counter’ or ‘OTC’). The latter form represents the majority of
global derivatives transactions. (179)
P 229
P 230 Unlike exchange-traded derivatives, which are governed by an exchange, OTC
transactions are negotiated between parties and are therefore particularly suited to
arbitration. Unlike loans and bonds, derivatives are a novel financial transaction that
courts are less likely to be familiar with. More importantly, arbitration is highly
appropriate because of the complexity of the disputes involved, which may require
understanding of specialized concepts: for example, disputes that arise may concern the
timing, calculation, and settlement of margin calls, which are a form of collateral for OTC
transactions. (180) As such, parties to derivative transactions often ‘take comfort from the
expertise available through the choice of arbitrators’. (181) These benefits outweigh any
difficulties with joinder that may arise in multi-party derivatives transactions, such as
where a derivative contract forms part of a larger transaction (182) ; moreover, such
difficulties may be avoided if parties provide for joinder in each contract. Indeed, it has
been observed that ‘the great complexity and the peculiarities of financial
instruments … are the main reasons why the financial community has increasingly
accepted arbitration’ in this context. (183)
5.4 Project finance

Project finance refers to the financing of ‘the development or exploitation of a right,
natural resource or other asset where the bulk of the financing is … to be repaid principally
out of revenues produced by the [relevant] project’. (184) Project finance is often used to
finance large, ‘capital-absorbing’ (185) industries such as gas, electricity, and
telecommunications, and often involves banks as lenders or guarantors. It has been
characterized as involving a ‘global structure with links,’ (186) whereby a large number of
parties from different countries negotiate multiple and separate contracts as part of the
same project.
P 230 Project finance transactions began to develop in their modern form in the 1970s, (187) and
P 231 can be considered a relatively novel, special type of transaction. Importantly, the
inherent complexity of project finance transactions makes them well suited for arbitration.
This complexity arises from the structure of the transaction itself, where multiple parties
are connected through an ‘aggregate of multiple, sometimes intertwining, contracts and
documents,’ (188) and creates disputes that are of a highly technical and complicated
nature. An example of such a dispute is where a party defaults on a loan agreement, and
parties must determine whether certain conditions (such as completion of the project) are
satisfied such that multiple guarantors from different jurisdictions can be called on to
repay the loan. (189) Other disputes may relate to complex financial and legal issues such
as the future application of cash flows and the assignment of contractual rights. (190)
Because such disputes require detailed risk analysis (191) and specialized knowledge of
the structure of the transaction and the market more generally, (192) it is particularly
important that they are resolved by individuals with the requisite expertise and familiarity
with project finance. In contrast to arbitrators, judges in national courts are likely to lack
the specialized knowledge required to adequately deal with the issues that arise.
While I have earlier identified the requirement for all parties’ contractual consent for
joinder of proceedings as a potential weakness of arbitration, this feature may in fact serve
as an important advantage in project finance. This is because of the importance of
‘transactional unity’ (193) in this context, and the interlinked nature of relationships and
disputes: for example, in the context of a construction project, a dispute over a loan
agreement may have implications for the implementation of contracts concerning
9
construction and management of the project. (194) Here, litigation raises two important
risks: first, that disputes may be fragmented across different courts in different
jurisdictions; second, that even if disputes are consolidated in a single domestic court by
giving exclusive jurisdiction to one court, ‘the practical result … may be the proliferation of
cross-claims, the introduction of third parties and other procedural challenges, at the risk
of a lengthy procedure and a not-so-satisfactory result’. (195) On the other hand, the risk of
inconsistency can largely be avoided through the use of arbitration, which allows parties to
harmonize proceedings by providing prior consent to join all relevant proceedings. This in
turn provides parties with greater control over the overall dispute resolution process.
P 231
P 232 Another reason why arbitration is highly suitable for project finance is the fact that state
governments are often involved in these transactions. In this context, the importance of
state sovereignty makes the availability of a ‘neutrality safeguard’ (196) particularly
important. Importantly, the risk of non-enforcement by domestic courts is also reduced
through the use of arbitration.
6 Ongoing Institutional Change

It is encouraging to observe that various institutions around the world have recognized the
importance and appropriateness of arbitration, and have sought to creatively address its
current shortcomings through the introduction of new rules and structures. This section will
consider two examples of recent, important efforts to increase the use of arbitration by
financial institutions.
6.1 PRIME Finance

The Panel of Recognised International Market Experts in Finance (‘PRIME Finance’) is a
Dutch not-for-profit foundation established in January 2012 to ‘help resolve … disputes
concerning complex financial transactions’. (197) In addition to dispute resolution services
including arbitration, PRIME Finance also aims to provide services such as judicial training
and a database of ‘all significant judicial decisions relating to complex financial
transactions from around the world’. (198)
PRIME Finance seeks to enhance the use of arbitration by financial institutions in a number
of ways. First, it helps parties to effectively identify and appoint arbitrators with the
necessary expertise in resolving complex financial disputes. This is achieved through a
carefully vetted panel of potential arbitrators, consisting of ‘over 100 legal and financial
experts’ (199) including judges, bankers, and academics. The provision of such a broad pool
of experts importantly offers financial institutions a ready selection of arbitrators with the
specialized knowledge and experience to deal with disputes arising out of complex
financial transactions.
P 232 The Panel also provides for interim measures (200) and the institution of emergency
P 233 arbitral proceedings where requested by the parties. (201) These provisions were
introduced in response to the widespread need for ‘speedy resolution of conflicts,’ (202)
and are particularly relevant to transactions involving simple debt claims, where
expedited procedures are a necessary and appropriate alternative to court summary
proceedings. (203)
A particularly interesting innovation of the Panel is its solution to the challenges
associated with the lack of transparency. Article 34(5) of the Arbitration Rules provides that
‘PRIME Finance may include in its publications excerpts of the arbitral award … in
anonymized form.’ This enables subsequent arbitral tribunals to consider previous
decisions, facilitating greater consistency in decision-making. Additionally, awards may be
made public with the consent of all parties (204) : however, it is not clear whether this
consent is to be provided before or after the award is made. As a result, it is uncertain
whether this provision would be effective in applying the pressure of negative publicity on
the parties.
The Panel does have limitations; for example, it is uncertain whether, from a practical
perspective, Panel members who are arbitrators in high demand can be appointed as
‘Emergency Arbitrators’ within seventy-two hours of the application. (205) In addition,
whether financial institutions will begin using the Panel on a widespread basis remains to
be seen. Overall, however, it represents a promising and creative approach to encouraging
the use of arbitration by financial institutions.
6.2 ISDA Master Agreement

A second example of an important development is the recent inclusion of arbitration
clauses in the Master Agreements provided by the International Swaps and Derivatives
Association (ISDA). ISDA is a global trade organization for the OTC derivatives market, and
its Master Agreements are widely used by financial institutions as the ‘industry-standard
framework documentation’ for OTC derivatives. (206) Thus ISDA’s inclusion of arbitration
clauses in its Master Agreements will no doubt have a crucial impact on the use of
arbitration by financial institutions trading in OTC derivatives.
P 233
P 234 The converse was also true: until the publication of the ISDA Arbitration Guide
containing the new model arbitration clauses was published in September 2013, (207)
ISDA’s Master Agreements referred only to the exclusive jurisdiction of state courts. (208)
10
Although parties were free to modify the standard form Master Agreements, few did so.
(209) While this could be attributed to inertial acceptance of the choice of litigation
contained in ISDA Master Agreements, (210) the failure to use arbitration also stemmed
from a more fundamental lack of awareness of the benefits of arbitration on different
levels – by individual financial institutions, and across the financial sector.
Recognizing this, the ISDA Arbitration Guide 2013 was introduced to fulfil two purposes:
first, to give an introduction to the law and practice of international arbitration, and
second, to provide a ‘range of model arbitration clauses covering a number of institutions
and seats of arbitration around the globe’. (211) These seek to overcome a key challenge
identified by ISDA: that parties often failed to use arbitration effectively, as a result of
limited knowledge and poorly drafted clauses. (212) While these arbitration clauses may
still require customization in certain circumstances, for example where parties wish to
provide for joinder or fast-track procedures, (213) the availability of standard form clauses
will make it much easier for financial institutions to adopt arbitration clauses in their
agreements.
As such, ISDA’s move to recognize the importance of arbitration not only reflects a growing
trend toward arbitration (214) but also contributes to this trend by increasing awareness of
arbitration and encouraging its use.
7 Further Change
Although arbitration presents many advantages in relation to financial dispute resolution,
it is not a ‘magic potion’. (215) Not only is arbitration not always appropriate, it is also in
need of continued change and adaption. One solution is for parties to better tailor the
P 234 arbitral tribunal to their needs; a recent ICC Report (216) recommends a number of ways in
P 235 which parties can do so, such as by introducing case management techniques to reduce
time and costs, and by consenting expressly to joinder. However, change at the
institutional level is both appropriate and necessary. In this section I recommend three
further changes to make arbitration more readily used by financial institutions: first,
making previous decisions more widely available in redacted form; second, establishing a
uniform approach to expedited proceedings; and third, introducing model clauses on
joinder and consolidation. These changes should help to enhance the effectiveness and
appropriateness of arbitration in the financial context, without compromising its key
characteristics of flexibility, autonomy, neutrality, and privacy.
7.1 Publication of previous decisions

The approach by PRIME Finance in publishing previous decisions in a redacted form is an
innovative and highly desirable approach to balancing the need for consistency in arbitral
decision-making whilst also protecting parties’ confidentiality. This approach has also
been adopted by a number of other international arbitration institutions, (217) and its
desirability is reflected in the fact that 64% of respondents in a recent survey stated that
the publication of awards in a redacted or summarized form would be an improvement to
international arbitration. (218) The publication of previous decisions is particularly
important in areas of banking and finance such as derivatives and syndicated lending,
where there is considerable emphasis on standardization. (219) To better promote
consistency across different arbitration institutions, this change should be adopted by all
arbitration institutions, and decisions should be made available for arbitrators to consult
in the context of ad hoc arbitrations.
A practical concern that may arise as a result of this approach is that parties may engage
in forum shopping by choosing arbitration institutions that are most likely to deliver a
favourable decision. On one hand, it may be argued that since freedom of choice is a key
benefit offered by arbitration, this should not be problematic. On the other hand, this
choice will likely be in the hands of the party with greater bargaining power. While power
imbalances are inevitable, this concern can in large part be overcome if arbitrators ensure
P 235 that the reasoning in their awards is transparent, and that disputes are resolved in a fair
P 236 and commercially sensible fashion, enabling both parties to enjoy the benefits of
greater certainty and consistency in arbitral decision-making.
7.2 Expedited proceedings

The benefits of expedited proceedings were identified in section 3. While many arbitration
institutions have adopted rules providing for expedited proceedings, these rules are
hardly uniform; for example, ‘emergency arbitration’ under the ICC Arbitration Rules (220)
allows for the provision of ‘urgent interim or conservatory measures,’ but does not allow
the arbitration proceedings themselves to be expedited, while the LCIA Rules provide for
the expedited formation of an arbitral tribunal without setting a timeline for completing
the proceedings. (221) This discrepancy is confusing and restricts parties’ ability to
properly tailor proceedings to the timelines they wish to use. As such, international
arbitration institutions should work on increasing the flexibility of their expedited
proceedings to remove this unnecessary limitation on the autonomy otherwise offered by
arbitration.
In an alternative and recent effort to respond to this challenge, the Arbitration Club in
London introduced a ‘Financial Services Expedited Arbitration Procedure’ in late April
11
2015, (222) providing model clauses compatible with the rules of various major arbitration
institutions. (223) These clauses provide a significantly expedited framework procedure in
which, for example, awards are rendered within four weeks of the hearing, and reasons are
provided in summary form only. (224) It will be interesting to observe the future adoption
and use of this framework as another way of responding to the discrepancy in expedition
procedures provided under institutional rules. (225)
7.3 Joinder and consolidation

P 236 The consensual nature of arbitrations (226) may create difficulties in joining third parties in
P 237 a multi-contract or multi-party context, or consolidating arbitral proceedings on
common questions of law or fact, (227) amounting to a ‘major weakness’ (228) of arbitration
in this context. There are two possible solutions to this challenge. First, arbitral rules could
be adapted to allow joinder of third parties or consolidation of proceedings without the
agreement of all parties. This solution has been adopted by the China International
Economic and Trade Arbitration Commission (CIETAC) in China, albeit in very narrow
circumstances. (229) However, such a change would be incompatible with the fundamental
nature of arbitration as an autonomous and consensual process, and should be
discouraged.
The second and preferred option is to further harmonize the arbitration clauses contained
in the various interlinked contracts relevant to a given financial dispute. This is generally
achieved through bespoke drafting in the particular context. (230) This process may be
further facilitated if arbitration institutions, as well as international organizations such as
ISDA, provide model clauses enabling joinder in different types of financial transactions, or
a master arbitration agreement under which parties expressly consent to the consolidation
of disputes arising from related agreements into a single proceeding. (231) One recent
example of such an effort is the introduction by the Singapore International Arbitration
Centre of new rules allowing the joinder of non-parties to the arbitration agreement, so
long as they have consented to the joinder. (232) This is a very welcome development, and
will provide guidance to parties drafting joinder provisions in complex multi-party
contracts, in addition to promoting consistency in the interpretation of these clauses.
Though requiring more effort in terms of drafting and coordination, the harmonization of
arbitration clauses is a far more plausible and desirable option as it recognizes the core
importance of party consent.
8 Conclusion
In this article I have argued that there is an unjustified gap between the use of arbitration
by financial institutions and more generally in the commercial sphere. In addressing many
of the purported weaknesses of arbitration, I have demonstrated that the reasons behind
P 237 bankers’ traditional reluctance to use arbitration are largely misconceived. This is all the
more so because of the many advantages that arbitration offers over litigation, including
enhanced enforceability, party autonomy, neutrality, and privacy. It is thus unfortunate
that financial institutions have been so slow to appreciate the suitability of arbitration for
the resolution of financial disputes.
I also considered four financial transactions that are particularly suited to arbitration,
either because they are novel transactions involving a high degree of technicality and
complexity, such as derivatives and project finance, or because they often involve cross-
border elements, such as bonds, in which context enforceability is a key advantage. I
further argued that even seemingly ‘simple’ loan transactions can give rise to complex
disputes, making arbitration highly appropriate.
Of course, arbitration has a number of shortcomings, and is not a panacea for all financial
disputes. As such, I have argued that certain aspects of the arbitral process should be
improved to promote greater uptake by financial institutions. I have recommended
changes to improve consistency and speed in arbitral decision-making, and have also
suggested that arbitration institutions can play a greater role in drafting arbitral rules that
will facilitate the smooth joinder of multiple disputes. These changes seek to address
arbitration’s shortcomings, without compromising its fundamental features of party
autonomy, neutrality, and privacy.
Ultimately, the uptake of arbitration in the financial sector will in large part depend on the
ability of arbitration to respond to the needs of financial institutions. While arbitration is
already a highly appropriate means for resolving many types of financial disputes, it must
continue to evolve and innovatively adapt to the ever-changing legal and economic
landscape, while at the same time maintaining its key characteristics. This will ensure that
it receives the use and appreciation it deserves, both by financial institutions and the
broader international commercial sphere.
References
12
*) BA, JD (Melb), BCL (Oxon). I would like to thank Professor Richard Garnett and the
Editorial Board for their insightful feedback. All remaining errors are my own. I can be
reached at hani@unimelb.edu.au.
1) Marcus C. Boeglin, The Use of Arbitration Clauses in the Field of Banking and Finance:
Current Status and Preliminary Conclusion, 15 J. Int’l Arb. 19 (1998).
2) Ibid. at 20.
3) Simon Greenberg, Christopher Kee & J Romesh Weeramantry, International
Commercial Arbitration: An Asia-Pacific Perspective 1 (Cambridge 2011).
4) Queen Mary University of London and PwC, 2013 Corporate Choices in International
Arbitration: Industry Perspectives, School of Arbitration, Queen Mary University of
London 6, www.arbitration.qmul.ac.uk/research/2013/index.html (accessed 26 Dec.
2016) (‘PwC Survey’).
5) Ibid. at 7.
6) International Chamber of Commerce, ICC Commission Report: Financial Institutions
and International Arbitration, 8 [41], www.iccwbo.org/Advocacy-Codes-and-
Rules/Document-centre/2016/Financial-Institutions-and-Internationa... (accessed 14
Dec. 2016) (‘ICC Commission Report’).
7) International Swaps and Derivatives Association, Memorandum on Use of Arbitration
Under an ISDA Master Agreement 3 [3.2] (19 Jan. 2011). (‘ISDA Memorandum’). See also
ICC Commission Report, supra n. 6.
8) See William W. Park, Arbitration of International Business Disputes: Studies in Law and
Practice 650 (2d ed., Oxford University Press 2012); Stefano Cirielli, Arbitration,
Financial Markets and Banking Disputes, 14 Am. Rev. Int’l Arb. 243, 245 (2003).
9) Cirielli, supra n. 8, at 244.
10) Nigel Blackaby and Constantine Partasides with Alan Redfern and Martin Hunter,
Redfern and Hunter on International Arbitration 3 (5th ed., Oxford 2009) (‘Redfern and
Hunter’).
11) Ibid. at 1.
12) See ISDA Memorandum, supra n. 7, at 2 [2.1]; Cirielli, supra n. 8, at 244; Jan Paulsson,
Nigel Rawding & Lucy Reed, The Freshfields Guide to Arbitration Clauses in
International Contracts 116 (3d ed., Wolters Kluwer 2011).
13) ISDA Memorandum, supra n. 7, at 2 [2.2]; Cirielli, supra n. 8, at 244; see also Richard
Garnett et al., A Practical Guide to International Commercial Arbitration 3 (Oceana
Publications 2000).
14) Garnett et al., supra n. 13, at 1.
15) PwC Survey, supra n. 4, at 22.
16) Redfern & Hunter, supra n. 10, at 52.
17) E.g. the International Chamber of Commerce in Paris (ICC), the Singapore
International Arbitration Centre (SIAC), the London Court of International Arbitration
(LCIA); the Hong Kong International Arbitration Centre (HKIAC).
18) Redfern & Hunter, supra n. 10, at 54.
19) Ibid. at 15.
20) Ibid.
21) Squire Sanders, A Practical Guide to Managing and Resolving Business Disputes in
China 4 (2012),
www.squirepattonboggs.com/~/media/files/insights/publications/2012/08/a-
practical-guide-to-managing-... (accessed 26 Dec. 2016) .
22) Oxford English Dictionary (online).
23) Park, supra n. 8, at 650.
24) See James Freeman, The Use of Arbitration in the Financial Services Industry, 16 Bus. L.
Int’l. 77, 78 (2015); Inka Hanefeld, Arbitration in Banking and Finance, 9 NYU J. L. & Bus.
917, 918 (2013).
25) Freeman, supra n. 24, at 78.
26) Ibid.
32) G Affaki, A Banker’s Approach to Arbitration, in Arbitration in Banking and Financial
Matters 63 (G Kaufmann-Kohler & V Frossard eds, Kluwer Law International 2003).
33) Hanefeld, supra n. 24, at 919.
35) Hanefeld, supra n. 24, at 919; Cirielli, supra n. 8, at 268.
36) Otto Sandrock, Is International Arbitration Inept to Solve Disputes Arising out of
International Loan Agreements? 11 J. Int’l Arb. 30, 35 (1994).
37) Anthony A. Connerty, Documentary Credits: A Dispute Resolution System from the ICC,
14(3) J. Int’l Banking L. 65, 65 (1999).
38) See Horacio A. Grigera Naón, ICC Dispute Resolution and International Finance, in Non-
Judicial Dispute Settlement in International Financial Transactions 73, 75 (Norbert Horn
& Joseph J. Norton eds, Kluwer Law International 2000).
40) ISDA Memorandum, supra n. 7, at 11.
13
43) See also Singapore International Arbitration Centre, Arbitration Rules of the
Singapore International Arbitration Centre r. 19.1 (6th ed., 2016) (‘SIAC Rules’); LCIA
Arbitration Rules (effective 1 Oct. 2014), Art. 14.4 (‘LCIA Rules’).
44) Travis Coal Restructured Holdings v. Essar Global Fund Ltd. (Formerly Known as Essar
Global Ltd.) [2014] EWHC 2510 (Comm), [42]–[50].
45) Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce:
Draft for Public Consultation, Art. 39 (26 Apr. 2016) (‘SCC Draft Rules’).
46) See Rules of Arbitration of the International Chamber of Commerce, Art. 38(1) (‘ICC
Rules’); SIAC Rules, r. 5; LCIA Rules, Art. 9A; Hong Kong International Arbitration Centre,
HKIAC Administered Arbitration Rules 2013, Art. 41 (‘HKIAC Rules’); Australian Centre
for International Commercial Arbitration, ACICA Expedited Arbitration Rules (1 Aug.
2011) (‘ACICA Expedited Rules’).
47) Klaus Peter Berger, The Aftermath of the Financial Crisis: Why Arbitration Makes Sense
for Banks and Financial Institutions, L. & Fin. Mks. Rev. 54, 55 (2009); see e.g. ICC Rules,
Art. 38(1); SIAC Rules, r. 5.2(a).
48) See e.g. SIAC Rules, r. 5.2(e).
49) See e.g. LCIA Rules, Art. 26.1; SIAC Rules, r. 32.5.
50) Francis Hornyold-Strickland & Duncan Speller, Preliminary Determinations – Path to
Efficiency or Treacherous Shortcut?,
http://kluwerarbitrationblog.com/2016/04/21/preliminary-determinations-path-to-
efficiency-or-treache... (accessed 26 Dec. 2016).
51) Ibid.
52) This could conversely result in additional proceedings and increased time and
expense, leading Lord Wilberforce in Tilling v. Whiteman [1980] A.C. 1 to comment that
preliminary decisions could be ‘treacherous short cuts’. See Hornvold-Strickland &
Spencer, supra n. 50.
53) In this context, the threat is that if tribunals do not comply with a party’s proposed
procedures, that party will seek to render the award unenforceable by arguing that
the tribunal has breached due process. See Bernardo Cremades, Second Leading
Arbitrator Highlights Due Process Threat,
http://globalarbitrationreview.com/article/1076348/second-leading-arbitrator-
highlights-due-process-... (accessed 26 Dec. 2016).
54) Irene Ten Cate, International Arbitration and the Ends of Appellate Review, 44 NYU J.
Int’l L. & Pol. 1109, 1125 (2011).
55) United Nations Commission on International Trade Law, UNCITRAL Arbitration Rules
(as revised in 2010), Art. 34(2) (‘UNCITRAL Rules’); see also LCIA Rules, Art. 26.8; HKIAC
Rules, Art. 3.2.
56) ICC Rules, Art. 34(6). See also SIAC Rules, r. 32.11.
57) Laurence Shore, The Advantages of Arbitration for Banking Institutions, 14 J. Int’l
Banking L. 347, 348 (1999).
59) UNCITRAL Model Law, Art. 34.
60) See Parsons & Whittemore Overseas v. Societe Generale de L’Industrie du Papier, 508
F.2d 969 (1974).
61) See e.g. China Property Development (Holdings) Ltd. v. Mandecly Ltd., H.C.C.T. 53/2010,
[71] (2015), aff’d.
62) Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened
for signature 10 June 1958, 330 U.N.T.S. 3 (entered into force 7 June 1959) Art. V(1)(b)
(‘New York Convention’).
63) Ibid. Art. V(1)(d).
64) Shore, supra n. 57, at 348.
65) ICC Commission Report, supra n. 6, at 4, [21].
66) Ibid. at 9, [56].
67) Freeman, supra n. 24, at 80. See also PwC Survey, supra n. 4, at 7.
69) Ibid. at 78.
70) Berger, supra n. 47, at 56. See also Hanefeld, supra n. 24, at 919; Mark Kantor, OTC
Derivatives and Arbitration: Should Counterparties Embrace the Alternative 117 Banking
L.J. 408, 411 (2000).
72) United Nations Commission on International Trade Law, Model Law on International
Commercial Arbitration (with amendments as adopted in 2006), UN GAOR, 61st sess.,
Agenda Item 77, U.N. Doc. A/61/453 (2 Nov. 2006), Art. 28(3) (‘UNCITRAL Model Law’).
73) Berger, supra n. 47, at 56. See also Shore, supra n. 57, at 349.
74) ISDA Memorandum, supra n. 7, at 11. See Civil Procedure Act 2010 (Vic.), Civil
Procedure Act 1997 (U.K.).
75) Christopher Style & Stuart Dutson, Arbitration, International Commerce and
International Finance: Safety First, 10 J. Banking & Fin. L. & Practice 302, 304 (1999).
77) Boeglin, supra n. 1, at 25.
78) Ibid. at 27.
79) Raymond J. Werbicki, Arbitral Interim Measures: Fact or Fiction? 57(4) Disp. Resol. J. 62,
63 (2002).
80) Raja Bose & Ian Meredith, Emergency Arbitration Procedures: A Comparative Analysis, 5
Int’l Arb. Rev. 186, 189 (2012).
14
81) UNCITRAL Rules, Art. 26(9).
82) See e.g. ICC Rules, Art. 28(2); LIAC Rules, Art. 25.3; SIAC Rules, r. 30.3.
83) Werbicki, supra n. 79, at 64.
84) Ibid.
85) See e.g. Channel Tunnel Group v. Balfour Beatty, [1993] A.C. 334.
86) See e.g. McCreary Tire & Rubber Co. v. Ceat S.p.A., 501 F.2d 1032, [31] (3rd Cir. 1974); see
also Werbicki, supra n. 79, at 64.
87) Channel Tunnel Group v. Balfour Beatty, [1993] A.C. 334, 367–68.
88) ICC Rules, Art. 29. See also SIAC Rules, r. 30.2; LIAC Rules, Art. 9B.
89) UNCITRAL Model Law, Art. 13 n. 3.
91) International Chamber of Commerce, ICC International Court of Arbitration Bulletin Vol
20 No 1, 5 (2009); International Chamber of Commerce, ICC International Court of
Arbitration Bulletin Vol 22 No 1, 5 (2011).
92) ISDA Memorandum, supra n. 7, at 3, [4.1].
93) Hanefeld, supra n. 24, at 923. See also Cirielli, supra n. 8, at 245.
95) ISDA Memorandum, supra n. 7, at 1. See also ICC Commission Report, supra n. 6, at 9,
[52]; Sabrina Wang & Matthew McKee, Litigation and Arbitration in China: Which Is
Better? Lehman Lee & Xu’s Briefing Paper Series,
www.lehmanlaw.com/fileadmin/lehmanlaw_com/Publications/Briefing_Paper_Series
/Litigation_and_arbitrat... (accessed 26 Dec. 2016); Freeman, supra n. 24, at 80; Style
& Dutson, supra n. 75, at 304; Andrew Pullen, Developments for Arbitration of Financial
Sector Disputes, 1 Sing. Int’l Arb. Centre, www.siac.org.sg/2013-09-18-01-57-20/2013-09-
22-00-27-02/articles/320-developments-for-arbitration-of... (accessed 26 Dec. 2016).
97) New York Convention, Art. III.
98) United Nations Commission on International Trade Law, Status: Convention on the
Recognition and Enforcement of Arbitral Awards (New York 1958),
www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention_status.html
(accessed 26 Dec. 2016).
99) See e.g. Freeman, supra n. 24, at 81.
100) See e.g. Hong Kong Department of Justice, Arrangement on Reciprocal Recognition and
Enforcement of Judgments in Civil and Commercial Matters by the Courts of the
Mainland and of the Hong Kong Special Administrative Region Pursuant to Choice of
Court Agreements Between Parties Concerned,
www.doj.gov.hk/eng/topical/pdf/mainlandrej20060719e.pdf (accessed 26 Dec. 2016).
See also Style & Dutson, supra n. 75, at 304.
101) See e.g. Regulation (EC) No. 44/2001 of 22 Dec. 2000 on jurisdiction and the
recognition and enforcement of judgments in civil and commercial matters [2000] O.J.
L12/1 (‘Brussels I Regulation’) enabling cross-border enforcement across the EU;
extended to Norway, Switzerland, and Iceland through the Convention on Jurisdiction
and the Recognition and Enforcement of Judgments in Civil and Commercial Matters,
signed 30 Oct. 2007, [2007] O.J. L339/3 (entered into force 1 Jan. 2007) (‘New Lugano
Convention’).
104) ISDA Memorandum, supra. 7, at 4, [4.5].
106) Ibid.
107) See e.g. Freeman, supra n. 24, at 82; Style & Dutson, supra n. 75, at 304.
108) Pullen, supra n. 95, at 2.
109) See Park, supra n. 8, at 651.
111) Berger, supra n. 47, at 59; Freeman, supra n. 24, at 81. But cf. Abdulaziz Mohammed A.
Bin Zaid, The Recognition and Enforcement of Foreign Commercial Arbitral Awards in
Saudi Arabia: Comparative Study with Australia (PhD Thesis, The University of
Wollongong 2014), http://ro.uow.edu.au/cgi/viewcontent.cgi?
article=5033&context=theses (accessed 26 Dec. 2016).
112) Oil & Natural Gas Corp. Ltd. v. Saw Pipes (2003) 5 S.C.C. 705 (17 Apr. 2003).
113) Venture Global Engineering v. Satyam Computer Services Ltd., (2008) 4 S.C.C. 190 (10
Jan. 2008).
114) Berger, supra n. 47, at 59.
116) See Hanefeld, supra n. 24, at 924.
117) Cirielli, supra n. 8, at 248. See also ICC Commission Report, supra n. 6, at 3, [10].
118) Shore, supra n. 57,at 349.
120) Hanefeld, supra n. 24, at 925; Cirielli, supra n. 8, at 255; Kantor, supra n. 70, at 309–10.
121) See e.g. Shore, supra n. 57, at 347.
123) See e.g. Style & Dutson, supra n. 75, at 304.
125) Garnett et al., supra n. 13, at 13.
15
127) SIAC Rules, r. 5. This rule provides that expedited procedures are available if: (1) the
amount in dispute does not exceed the sum of SGD 6,000,000; (2) the parties so agree;
or (3) in cases of exceptional urgency. See also ICC Rules, Art. 38(1); HKIAC Rules, Art.
41; ACICA Expedited Rules; LCIA Rules, Art. 9A.
129) PwC Survey, supra n. 4, at 7. See also ICC Commission Report, supra n. 6, at 10, [57].
131) Martin Hunter, International Commercial Dispute Resolution: The Challenge of the
Twenty-first Century, 16 Arb. Int’l 378, 382 (2000). See also Freeman, supra n. 24, at 82.
132) ISDA Memorandum, supra n. 7, at 10; Freeman, supra n. 24, at 82.
133) Philip Wood, Law and Practice of International Finance 73 (Sweet & Maxwell 1980).
134) Taroh Inoue, Introduction to International Commercial Arbitration in China, 36 H.K. L.J.
171, 174 (2006).
135) Shore, supra n. 57,at 348.
136) Cirielli, supra n. 8,at 253.
137) Ileana M. Smeureanu, Confidentiality in International Commercial Arbitration 1 (Kluwer
2012). But cf. Oxford Shipping v. Nippon Yusen Kaisha, [1984] 2 Lloyd’s Rep. 373 (26 June
1984).
139) Smeuleanu, supra n. 137, at 4.
140) Ibid. at 5.
141) See e.g. LCIA Rules, Art. 19.4; SIAC Rules, r. 24.4; HKIAC Rules, Art. 22.7; UNCITRAL Rules,
Art. 28(3).
143) Cirielli, supra n. 8, at 250. See also Berger, supra n. 47, at 58; P Wood, International
Loans, Bonds and Securities Regulation margin no 5-59 (Sweet & Maxwell 1995); ICC
Commission Report, supra n. 6, at 8, [43].
144) Sandrock, supra n. 36, at 53.
145) See e.g. Style & Dutson, supra n. 75, at 303.
146) Christopher Style & Stuart Dutson, Safeguarding Security with Arbitration Clauses Int’l
Fin. L. Rev. 31, 32 (1999); Cirielli, supra n. 8, at 250.
149) Kantor, supra n. 70, at 215.
150) Esso Australia Resources v. Plowman, (1995) 183 C.L.R. 10, 30 (7 Apr. 1995) (Mason, C.J.).
See also Luke Nottage & Richard Garnett, International Arbitration in Australia 187
(Federation Press 2010).
151) Esso Australia Resources v. Plowman, (1995) 183 C.L.R. 10, 32 (7 Apr. 1995) (Mason, C.J.),
48 (McHugh, J.).
152) ISDA Memorandum, supra n. 7, at 10. See also Berger, supra n. 47, at 57.
153) See e.g. UNCITRAL Model Law, Art. 34(2); HKIAC Rules, Art. 3.2.
154) ICC Rules, Art. 34(6); LCIA Rules, Art. 26.9; SIAC Rules, r. 32.11.
156) Anthony DeToro, Waiver of the Right to Compel Arbitration of Investor-Broker Disputes,
21 Cumb. L. Rev. 615, 618–619 (1990); Kantor, supra n. 70, at 414.
158) See e.g. Garnett et al., supra n. 13, at 12.
161) J.J. Spigelman, Foreword, in Nottage & Garnett (eds), supra n. 150, at vi.
162) Freeman, supra n. 24, at 79; Wood, supra n. 133, at 73; Boeglin, supra n. 1, at 27.
164) Mallesons Stephens Jacques, Australian Finance Law 274 (6th ed., Lawbook Co 2008).
165) Ibid. at 295.
166) Ibid. at 296.
167) Ibid. at 324.
168) Ibid. at 294.
169) O A Ruiz del Rio, Arbitration Clauses in International Loans, 4 J. Int’l Arb. 45, 67 (1987).
170) Cirielli, supra n. 8, at 267. See also Wood, supra n. 133, at 72.
172) Naón, supra n. 38, at 75.
173) Boeglin, supra n. 1, at 23.
174) Philip R. Wood, Law and Practice of International Finance 159 (Sweet & Maxwell 2008).
175) Ibid.See also Martin Hughes, Bond Issues: A Banking Lawyer’s Perspective, 7 J. Int’l
Banking & Fin. L. 263 (2000).
176) Mallesons Stephens Jacques, supra n. 164, at 76.
179) See e.g. ibid. at 84.
180) See ICC Commission Report, supra n. 6, at 11, [67].
181) Kantor, supra n. 70, at 414. See also ICC Commission Report, supra n. 6, at 12, [70].
16
183) Cirielli, supra n. 8, at 274. See also Bankers Trust Co. v. P.T. Jakarta Int’l Hotels &
Development, [1999] 1 Lloyd’s Rep. 910, 915.
184) Mallesons Stephens Jacques, supra n. 164, at 346, quoting Graham Vinter, Project
Finance: A Legal Guide xxviii (2d ed., 1995).
185) Christophe Dugue, Dispute Resolution in International Project Finance Transactions, 24
Fordham Int’l L.J. 1064, 1066 (2000).
186) Ibid.
187) Suzie Harris & Kathy Krueger, An Overview of the Project Finance Market 3 (Harvard
Business School 13 Dec. 1999) ,
https://faculty.fuqua.duke.edu/~charvey/Teaching/BA456_2001/Overview_project_fi
nance.pdf (accessed 26 Dec. 2016).
188) Dugue, supra n. 185, at 1067.
189) Naón, supra n. 38, at 81.
190) Dugue, supra n. 164, at 1068.
193) Dugue, supra n. 185, at 1065.
194) Ibid. at 1064.
195) Ibid. at 1077.
196) Ibid. at 1081.
197) PRIME Finance, About Us, http://primefinancedisputes.org/about-us (accessed 26
Dec. 2016).
198) PRIME Finance, Introduction to PRIME Finance, British Institute of International and
Comparative Law, www.biicl.org/files/6005_vanbaren_19-06-12_biicl.pdf (accessed 26
Dec. 2016).
199) PRIME Finance, History, http://old.primefinancedisputes.org/about-us/history/
(accessed 26 Dec.2016).
200) PRIME Finance, PRIME Finance Arbitration Rules, Art. 26 (‘Prime Finance Rules’).
201) Ibid. at Art. 26a, annex C.
202) Daniella Strik, Launch of PRIME Finance Arbitration Rules: Dispute Resolution in Global
Financial Markets, Kluwer Arbitration Blog,
http://kluwerarbitrationblog.com/blog/2012/01/17/launch-of-p-r-i-m-e-finance-
arbitration-rules-dispu... (accessed 26 Dec. 2012).
203) Pullen, supra n. 95, at 4.
204) PRIME Finance Rules, Art. 34(5).
205) Ibid. Art. 4. See also Herbert Smith Freehills, PRIME Finance: A New Dispute Resolution
Option for the Financial Sector, Herbert Smith Freehills Arbitration Notes,
http://hsfnotes.com/arbitration/2012/02/15/prime-finance-a-new-dispute-
resolution-option-for-the-fin... (accessed 26 Dec. 2016).
206) Pullen, supra n. 95, at 2. See also Kantor, supra n. 70, at 410.
207) ISDA, News Release: ISDA Publishes the 2013 Arbitration Guide,
www2.isda.org/news/isda-publishes-the-2013-isda-arbitration-guide (accessed 26
Dec. 2016).
208) ISDA, 1992 Master Agreement, s. 13(b); ISDA, 2002 Master Agreement, s. 13(b); Kantor,
supra n. 70, at 410.
209) Kantor, supra n. 70, at 410.
210) Ibid. at 419.
211) ISDA, supra n. 207.
213) See e.g. Freeman, supra n. 24, at 87.
214) ISDA, supra n. 207; Hanefeld, supra n. 24, at 923; Freeman, supra n. 24, at 84.
216) ICC Commission Report, supra n. 6.
217) See e.g. SIAC Rules, r. 32.12: ‘SIAC may publish any award with the names of the parties
and other identifying information redacted’; see also LCIA Rules, Art. 30; ICC, ICC
International Court of Arbitration Bulletin, www.iccdrl.com/ (accessed 26 Dec. 2016).
218) Queen Mary University of London and White & Case LLP, 2015 International Arbitration
Survey: Improvements and Innovations in International Arbitration, School of
Arbitration, Queen Mary University of London 5,
www.arbitration.qmul.ac.uk/docs/164761.pdf (accessed 26 Dec. 2016).
220) ICC Rules, Art. 29.
221) LCIA Rules, Art. 9A.
222) Arbitration Club, Financial Services Expedited Arbitration Procedure,
http://arbitrationclub.org.uk/financial-sector/eplaunch (accessed 26 Dec. 2016).
223) For example, the ICC, LCIA, and PRIME Finance.
224) Arbitration Club, Financial Services Expedited Arbitration Procedure: Towards an
Expedited and Cost Effective Award in Financial Services Disputes,
http://arbitrationclub.org.uk/wp-content/uploads/2012/08/30-April-2015-Launch-
Event-Document.pdf (accessed 26 Dec. 2016).
225) See generally, Andreas Respondek, Five Proposals to Further Increase the Efficiency of
International Arbitration Proceedings, 31 J. Int’l Arb. 507, 511 (2014).
226) See e.g. ICC Rules, Art. 7, 22.1(viii); LCIA Rules, Art. 24.1(b); UNCITRAL Arbitration Rules
2010, Art. 17(5).
17
227) Paulsson, Rawding & Reed, supra n. 12, at 99.
228) Berger, supra n. 47, at 58; Hanefeld, supra n. 24, at 934.
229) China International Economic and Trade Arbitration Centre, 2015 CIETAC Arbitration
Rules, Art. 19.
230) See Herbert Smith, Dealing with Multi-Party and Multi-Contract Arbitration Issues,
http://hsfnotes.com/arbitration/2012/06/11/dealing-with-multi-party-and-multi-
contract-arbitration-i... (accessed 26 Dec. 2016).
232) See SIAC Rules, r. 7.
18
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Arbitration in Finance

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2.2 Financial institution

3.2 Summary proceedings

3.3 Ability to appeal

3.4 Greater legal certainty

3.6 Interim remedies

4.2 Party autonomy

5.4 Project finance

6 Ongoing Institutional Change

6.1 PRIME Finance

6.2 ISDA Master Agreement

7.1 Publication of previous decisions

7.2 Expedited proceedings

7.3 Joinder and consolidation

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