When counsel do not help arbitrators… nor their clients

The topic will be introduced by Ugo DRAETTA, Università Cattolica di Milano

Who will discuss with
– Antonias DIMOLITSA, A. Dimolitsa & Associates

– Charles KAPLAN, Orrick Rambaud Martel

– Fernando MANTILLA SERRANO, Latham & Watkins
– Diego P. FERNÁNDEZ ARROYO, Sciences Po Law School

 

Every arbitrator has occasionally been frustrated by situations where counsel have not helped them in duly performing their job consisting in arriving at a fair and reasonable resolution of the dispute, thus also damaging the clients they represent. These occasional counsel’s attitudes may be attributable to various degrees of incompetence, dishonesty or other types of inappropriateness.

The result is that counsel, whose behavior is supposed to be exclusively focused on helping the arbitrators to perform their duties properly and their client to win their case, instead end up damaging their clients’ interests at least in two ways: (a) by risking, mainly due to their conduct, an adverse decision by the arbitral tribunal on the merit of the case and/or (b) by causing inefficiencies in the arbitration proceedings, which in turn result in an undue increase of the time and cost of the arbitration, or imply the risk of a cost allocation by the arbitral tribunal against the counsel’s client.

The first category of situations includes cases where counsel (a) take an “all-or-nothing” approach preventing the arbitrators from adopting intermediate solutions which may be otherwise justified, (b) behave in a disloyal or dishonest manner, e.g., through ex parte communications or by providing false information to the arbitrators, (c) show incompetence or unprofessionalism, e.g., by arriving unprepared to the hearings, filing unnecessarily long submissions or producing excessive amounts of documents. The second category of situations includes cases where counsel (a) abuse of, or misuse the document production process, (b) adopt obstructive or dilatory tactics, (c) behave in an unnecessary aggressive manner, (d) show inability or unwillingness to catch settlement opportunities.

The two categories of situations are sometimes interlinked or have overlapping or multiple effects, as it may well happen that an unfavorable decision by the arbitral tribunal is at least partially induced by an improper behavior of counsel having the effect of unduly increasing time and costs of the proceedings. The unfavorable decision may concern the merit of the case as well as the consequent allocation of the arbitration costs by the arbitral tribunal, or only the latter.