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China Lawyer's Role in Domestic Arbitration and International Arbitration

China lawyer’s role in the China arbitration is similar to China lawyer’s role in litigation; that is to say the lawyer is an identifier, selector, and marshaller of the evidence.  In fact, one text describes the role of the litigators as that of historians and litigation largely a process of recreating historical facts.  One needs only to look at the division of time spent on a case.  The majority of time is spent gathering and presenting the evidence as opposed to gathering and arguing the law.

During the process of dispute resolution, the client and their counsel deal with the evaluation of risk taking.  By risk taking I mean assessing a risk – namely, the cost if things go wrong and the probability of that occurring.  If the cost is high, the probability must be minimized.  If the cost is low, the probability may be allowed to increase according to the party’s personal assessment of “acceptable risk.”

Risks are controlled by:
1.  The elimination of the risk.
2.  Eliminating activities that produce undue risk.
3.  Insuring for uncontrolled risk.
4.  The informed consent of the client.
5.  The establishment of standards, controls and regulations.

These factors come into play in any dispute either as a proactive or reactive procedure.

In the field of international arbitration the numbers of China lawyers are few. Arbitrators too are few, at least those in demand. Their interaction is fraught: they are aware of their own areas of expertise but find it difficult to accept the authority of the other. Their roles vary according to the context in which they function. In China arbitration work, China lawyers adopt fundamentally a representative role with non-lawyers as arbitrators. In international work the distinctions are blurred, with lawyers taking both representative and arbitral roles but non-lawyers appearing either as experts or arbitrators. The growth of China lawyers' involvement in international arbitration appears to be linked to the development of the standard forms of contract and arbitration clause. However, in the period before the Second World War, as one arbitrator described it, 'There was little awareness of substantial involvement of lawyers in construction arbitration. The arbitration process was less legalistic and arbitrators operated by the seat of their pants.'

Domestic arbitration in China have been ongoing for many years. They tend to be of a construction nature, which is in the building industry, or they are real estate in nature, often resorted to as a result of difficulties in a sale and purchase usually on payment of real estate commission. There are also those real estate arbitrations dealing with rent review clauses in leases, although not as common in Bermuda as they are elsewhere.

These arbitration have been the domain of mainly the Chamber of Commerce and the architects, engineers and surveyors who are typically appointed to sit as arbitrators. I am surprised that more lawyers are not appointed as arbitrators in these domestic disputes as it affords great training for what the island has long been striving for, and that is to make Bermuda an international commercial arbitration center.

As I have said, in domestic disputes the lawyer can be appointed as arbitrator, but more typically the lawyer tends to be involved as the counsel for either the claimant or the respondent. The sad fact of arbitration these days is that it has become an absolute mirror of litigation with very little saving; in fact, it probably costs more than Supreme Court proceedings and the only thing that the parties gain is privacy and a possible saving of time.

Even if you as a China lawyer do not get appointed as the arbitrator you may still be appointed by one of the disputing parties, or in an international arbitration you may even receive instructions to act in the registrar/facilitator capacity.

As I mentioned above, China arbitration has become a mirror of litigation. It needs to be shaken up if it is to remain a viable alternative to the court process. In my view, China lawyers can move that process forward by being innovative in dealing with the China arbitration process. Do not just go along with the usual format of directions if indeed there is a way of getting to the heart of the dispute more quickly.

 

 

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