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Highlights

SIAC-KCAB Seoul Conference 2019


19 September 2019
SIAC-KCAB Seoul Conference 2019
By Arie Eernisse, Foreign Attorney, Shin & Kim


The SIAC-KCAB Seoul Conference 2019 was titled “Cross-Border Construction Disputes in 21st Century Asia” and attracted more than 70 practitioners, in-house counsel and professionals.

Ms Seok Hui Lim (CEO, SIAC) opened the session, reporting that Korean parties are one of the top ten users of SIAC and that there are currently two members of the SIAC Court of Arbitration who are based in Korea. Mr Hi-Taek Shin (Chairman, KCAB International) followed with his opening address. He noted that Seoul is becoming a hub of international arbitration and that Korean construction companies have become frequent users of international arbitration, with approximately one-third of KCAB’s disputes arising from construction. He remarked that the availability of many dispute resolution options is a blessing, but it also means that careful planning is required.

Panel Session I: Strategic Considerations When Pursuing Construction Disputes
The first panel session addressed strategic considerations in construction disputes, mainly at the onset of the dispute resolution process. Mr John P. Bang (Member, SIAC Court of Arbitration; Senior Foreign Attorney, Bae, Kim & Lee LLC) expertly moderated a panel comprising Mr Michael Ashcroft QC (Arbitrator and Barrister, Twenty Essex), Mr Im Byung Woo (Partner, Kim & Chang), Mr Steven Y. H. Lim (Arbitrator and Barrister, 39 Essex Chambers), Mr Iain Potter (Director, MDD Forensic Accountants, Singapore), Mr Matthew Skinner (Partner, Jones Day), and Mr Thomas Walsh (Partner, Clifford Chance LLP).

The panel began with an interactive panel exchange about adopting appropriate dispute resolution mechanisms. Mr Bang observed that early strategic choices are critical in large and complex construction disputes as such choices can make a difference in terms of how quickly the dispute is resolved, how resources are utilised and whether remedies are appropriate. Mr Walsh explained that he often sees arbitration clauses in construction contracts that involve various complications and that escalation clauses are common. Mr Im opined that escalation clauses have become necessary to save time and costs but cautioned that Korean companies should be aware of differences between the typical Korean style of mediation and mediation pursuant to an international construction contract’s step clause. Offering a critical view, Mr Skinner remarked that it is difficult to know the merits of the case at the early stages of a dispute and, thus, a requirement to mediate early in a dispute may be disadvantageous and put the parties at risk.

Moving on to strategic considerations in the context of arbitration, the panellists discussed how companies are increasingly trying to ensure that they are covered by investor-state dispute resolution mechanisms. They also touched on the importance of using claims consultants or lawyers who evaluate claims when arbitration is being considered, and on the importance of ensuring that notice requirements are met (to avoid complete dismissal of claims despite lengthy arbitration proceedings).

The panellists focused next on stays, anti-suit injunctions and court-ordered interim relief, as well as notable aspects of emergency arbitrator proceedings. Mr Lim gave a detailed and helpful overview of the current state of the law. Mr Ashcroft called anti-suit injunctions a powerful weapon for parties, but he stressed that timing is crucial and that delay itself may cause a party to lose an anti-suit injunction application. Offering a forensic accounting expert’s view, Mr Potter examined the pros and cons of using the same expert for interim relief and substantive issues.

Further discussion ensued on pursuing investor-state arbitration in conjunction with, or in lieu of, commercial arbitration, third party funding for investment and commercial arbitration, and asserting claims against third parties and joining non-signatories.

IMG_4575-Edited DSC_9693-Edited
Left to Right: Michael Ashcroft QC, Iain Potter, Steven Y.H. Lim, John P. Bang, Byung Woo Im, Matthew Skinner and Thomas Walsh
 
Left to Right: Braden Billiet, Chan Hock Keng, Chris Bailey, Sue Hyun Lim, Rob Palmer, Michael Lee and Eugene Tan

Panel Session II: Managing Proceedings and Proving Your Claims
The second panel session, which was deftlymoderated by Ms Sue Hyun Lim (Secretary-General, KCAB International), featured as panellists Mr Chris Bailey (Partner, King & Spalding), Mr Braden Billiet (Managing Director, FTI Consulting), Mr Chan Hock Keng (Partner, WongPartnership), Mr Michael Lee (Arbitrator, Twenty Essex), Mr Eugene Tan (Partner, Clyde & Co Clasis Singapore) and Mr Rob Palmer (Office Managing Partner, Ashurst LLP).

The discussion began with a focus on ancillary dispute proceedings and parallel proceedings, with the takeaway being that arbitrators and parties should take a cautious approach to these proceedings when they arise. On the issues of consolidation and joinder, the panellists suggested that where parties foresee the possibility of multiple related disputes between themselves, they should proactively adopt contract language that allows for more convenient resolution of disputes between them.

Mr Billiet, a damages expert, next gave his views on the role of a technical expert, which he said was to assist the tribunal on matters within his or her expertise. When asked a question from the audience about a situation involving a tribunal that had ordered a single expert to give testimony on various disciplines, the panellists agreed that, in such a case, finding the right expert suited for the discipline on which expertise is required is important, and that experts should not stray outside the boundaries of their expertise.

The panel then discussed some important procedural and logistical issues to bear in mind while managing proceedings. Mr Chan stressed the importance of adopting appropriate rules for document production (e.g., IBA Rules or Prague Rules) to benefit one’s client. Mr Lee hailed the use of a case management conference to raise the tribunal’s awareness of what the case is about from the start and to ensure that it is able to understand the key issues at the disclosure stage. Mr Palmer shared that construction disputes are document (and expert) heavy and that Asia’s increasingly diverse arbitral panels may take varied approaches to assessing the evidence. However, he said it should not be automatically assumed that they will adopt their home jurisdiction’s common practices, as there are various international norms that are followed as well (e.g., witness statements).

Mr Palmer amusingly introduced the next topic with a quote from (the draconian) section 229 of Hammurabi’s Code (“If a builder builds a house for a man and does not make its construction sound, and the house which he has built collapses and causes the death of the owner of the house, the builder shall be put to death”). Mr Bailey then shared some critical insights about the importance of understanding and recognizing tensions between FIDIC contracts (which have a common law approach in mind) and non-common-law applicable law. Mr Tan homed in on another cross-jurisdictional challenge: ensuring commencement of proceedings within the required period of time in a foreign jurisdiction, considering the variance in statute of limitations periods, rules on when to start calculating delay and rules on waiver. An exchange with an audience member from Vietnam highlighted the importance of being aware of such differences.

Finally, Mr Billiet provided a concise and helpful overview of quantifying damages in a construction case, followed by Mr Bailey’s closing thoughts on the importance of taking a proactive approach to understanding how to address issues of damages and experts.

Conclusion
Both panels provided keen insights on a broad range of critically important topics for practitioners. Audience members not only gained numerous tips useful for construction arbitration practice but also a strategic framework for organizing this useful knowledge.
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