News & Analysis

The Roles of the Three Parts of the Permanent Court of Arbitration

Published

4 months ago

May 30, 2023

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H.E. Amb. Marcin Czepelak, the Fourteenth Secretary-General of the Permanent Court of Arbitration (PCA)

The Permanent Court of Arbitration comprises a three-part organizational structure, namely, the Administrative Council, Members of the Court and the Secretariat. The essence of this structure is to facilitate the attainment of its mandate as a global dispute resolution body with each part having a different responsibility that contributes to its success. To be sure, the Administrative Council oversees the PCA’s policies and budgets, the Members of the Court are the panel of independent potential arbitrators from which a member to a dispute may pick from and PCA Secretariat, also known as the International Bureau, headed by the Secretary-General, provides the Court and its tribunals with the requisite administrative support.

PCA Administrative Council

The Administrative Council of the PCA entails the diplomatic representatives of the contracting Parties accredited to The Netherlands. The Council is chaired by the Netherlands Minister for Foreign Affairs and works in consultation with the Secretary-General of the PCA to shape the policy of the organization including providing general guidance on the work of the PCA and supervising the administration, budget and expenditure of PCA. In carrying out its mandate, the PCA Administrative Council is guided by the Rules of Procedure of the Administrative Council of the Permanent Court of Arbitration.

In terms of reporting, the Administrative Council receives the Annual Reports of the Secretary General on the activities and expenditures of the PCA. On its part, the budget of the PCA is funded by contributions from Contracting Parties and income from arbitrations. In this regard, parties to arbitration are expected to cover the cost of hearing their cases including arbitrator fees, registry and administrative costs based on their respective fees’ arrangement with the PCA.

The International Bureau (Secretariat)

The Secretariat of the Permanent Court of Arbitration (PCA), also known as the International Bureau is headed by the PCA Secretary General and consists of an experienced team of legal and administrative staff of various nationalities. As explained in the PCA website, “The bureau provides administrative support to tribunals and commissions, serving as the official channel of communications and ensuring safe custody of documents. The International Bureau provides services such as financial administration, logistical and technical support for meetings and hearings, travel arrangements, and general secretarial and linguistic support. It also provides administrative support to tribunals or commissions conducting PCA dispute settlement proceedings outside The Netherlands.”

The mandate of the International Bureau is not limited to PCA Contracting parties and is available to provide information and advice to any parties contemplating dispute resolution, including states and nationals of states that are not parties to the Conventions. The organization and the Internal Working of the International Bureau is regulated by the Rules Concerning the Organization and Internal Working of the International Bureau of the Permanent Court of Arbitration. Since 2010 the Permanent Court of Arbitration as opened Offices in Africa, Asia, Latin America and Europe to make its services more accessible in different regions of the world. In particular, the PCA opened its office in Mauritius in September 2010, Singapore Office in January 2018, Buenos Aires Office in October 2019, Vienna Office in April 2022 and Ha Noi Office in November 2022.

Members of the Permanent Court of Arbitration (PCA)

The Members of the Court are “potential arbitrators” nominated by Contracting Parties to form a panel from which parties to a dispute before PCA may pick arbitrators. As such, each of the 122 Contracting Party state is entitled to nominate up to four persons of “known competency in questions of international law, of the highest moral reputation and disposed to accept the duties of arbitrators” as “Members of the Court.” The Members of the Court are appointed for a term of six years and their appointments can be renewed. Kenya currently has Four Members who include Former Attorney General Prof. Githu Muigai, Chair of Chartered Institute of Arbitrators (Kenya Branch) Dr. Wilfred Mutubwa, University of Nairobi Law Lecturer Dr. Kenneth Wyne Mutuma and University of Nairobi Senior Lecturer Dr. Kariuki Muigua.

The Members of the Court may be selected by Parties to a dispute. However, parties are not under obligation to select arbitrators from the list of the Members of the Court. In addition to forming “a panel of potential arbitrators,” the Members of the Permanent Court of Arbitration from each Contracting Party constitute a “national group.” As a National Group, the Members are entitled to nominate candidates for the election to the International Court of Justice under article 4(1) of the Statute of the International Court of Justice. The Members of the Court, along with the judges of the ICJ, like Members of National Assemblies and National Governments (Cabinet Members/Ministers) of Sovereign States and Current Heads of States, are among the handful of groups that are entitled to nominate candidates for the Nobel Peace Prize.

In addition to the Members of the Court, PCA also maintain a list of arbitrators who specialize in disputes relating to the environment and natural resources as part of its environment dispute resolution services. In addition to arbitrators, PCA also keeps a list of scientific and technical experts who may be appointed as expert witnesses under the PCA’s Environmental Rules. Further, the PCA in readiness for arbitration of disputes arising from outer space maintains lists of arbitrators and experts who specialize in disputes relating to outer space activities in connection with its Rules for Arbitration of Disputes Relating to Outer Space Activities.

Reference

PCA Website: https://pca-cpa.org/en/about/introduction/history/ (accessed on 31st May 2023).

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News & Analysis

Disruption of Arbitration by Online Dispute Resolution (ODR)

Published

7 hours ago

September 28, 2023

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By Dr. Kariuki Muigua, PhD (Leading Environmental Law Scholar, Policy Advisor, Natural Resources Lawyer and Dispute Resolution Expert from Kenya), Winner of Kenya’s ADR Practitioner of the Year 2021, ADR Publisher of the Year 2021 and CIArb (Kenya) Lifetime Achievement Award 2021*

The Coronavirus disease (COVID-19) pandemic unsettled not only the global economy but also many professions and they are all seeking to stay afloat during the pandemic. Due to the preventive measures recommended by the World Health Organization which included social distancing among others, it became almost impossible for professionals to operate from their traditional physical offices. The legal profession was not spared either. The legal practice in many parts of the world including the African continent had been by way of physical attendance in courtrooms where the judges and magistrates, advocates and witnesses physically present their cases. The physical presence of employees in law firms also become difficult.

Court hearings shifted to being conducted virtually via online platforms. Arguably, this has disrupted dispute resolution systems in a way not experienced before. Apart from the effects of pandemic, the changes in the dispute resolution sector have also been largely attributed to the ascendancy of information technology, the globalization of economic activity, the blurring of differences between professions and sectors, and the increasing integration of knowledge. Technology has greatly impacted the way dispute resolution is done in many ways.

The shift to online hearings has not only affected litigation but also ADR practice and specifically arbitration, which had ordinarily operated like litigation though physical hearings. Notably, the world has experienced new business trends through electronic transactions, e-banking, e-commerce, crypto currency, artificial intelligence, financial technology and arguably, dispute resolution has also grown beyond physical meetings to Online Dispute Resolution (ODR), a branch of dispute resolution which uses technology to facilitate the resolution of disputes between parties through online-mediation, online-arbitration and online-negotiation, among others. In a variety of methods, the parties can use the internet and web-based technology. ODR can be completed wholly online, via email, videoconferencing, or both.

Covid-19 led to unprecedented advancement in the use of technology as a tool for enhancing accessing to justice for all. Many countries around the world were forced to rethink their approach to administration of justice both quickly and efficiently in order to ensure that, where possible, hearings can proceed. This led them to adopt virtual hearings – conducting hearings remotely in order to minimise the risk of transmission of COVID-19 and ensure the health of all parties in attendance is maintained. While the danger of the pandemic has passed, stakeholders of access to justice are rethinking physical hearings and increasingly thinking about investing in virtual hearings. For instance, in Kenya, it is commendable that the Judiciary recently embarked on enhancing the use of technology in judicial proceedings in all courts, especially during the COVID19 pandemic period, including the use of: (a) e-filing; (b) e-service of documents; (c) digital display devices; (d) real time transcript devices; (e) video and audio conferencing; (f) digital import devices; and (g) computers in the court.

With increased globalisation, ADR Practitioners are tapping technology from the comfort of their homes or offices regardless of the geographical location or distance to engage in dispute resolution. The result is that ADR practitioner are using technology to tap into the ever growing international alternative modes of Dispute Resolution such as international arbitration, mediation and Online Disputes Resolution (ODR) especially in the face of rapidly growing networking and borderless legal practice, with the introduction of diverse social media platforms that allow interconnectivity beyond the national boundaries and enabling cross-border relationships between clients and their lawyers and law firms amongst themselves.

Going into the future, technology will lead to tremendous growth of international trade, interstate deals, bilateral and multilateral treaties. In turn, dispute resolution will increasingly continue becoming global and smart ADR practitioners must therefore up their game with international best practices as with the advent of internet, telecommunication systems. As a matter of fact, ADR is no longer limited to one jurisdiction or regions as e-commerce increase the amount and size of cross-border transactions. Thus, as it has rightly been pointed out, ‘the COVID-19 pandemic may prove a catalyst for justice system players including ADR practitioners to fully embrace technology and reduce their reliance on in person hearings and hard copy documents, particularly for dispute management purposes, even after the pandemic. However, even this brings in its wake numerous privacy challenges and especially due to possibilities of leakage of documents due to cyber insecurities. But all the same, the ADR fraternity had better get ready for a future where Online Dispute resolution is the main thing.

*This article is an extract from the Book: Settling Disputes Through Arbitration in Kenya, 4^th Edition (Chapter Thirteen), Glenwood Publishers, Nairobi, 2022 by Dr. Kariuki Muigua, PhD, Senior Advocate of Kenya, Chartered Arbitrator, Kenya’s ADR Practitioner of the Year 2021 (Nairobi Legal Awards), ADR Lifetime Achievement Award 2021 (CIArb Kenya), African Arbitrator of the Year 2022, Africa ADR Practitioner of the Year 2022, Member of Permanent Court of Arbitration nominated by Republic of Kenya and Member of National Environment Tribunal (NET). Dr. Kariuki Muigua is a foremost Environmental Law and Natural Resources Lawyer and Scholar, Sustainable Development Advocate and Conflict Management Expert in Kenya. Dr. Kariuki Muigua is a Senior Lecturer of Environmental Law and Dispute resolution at the University of Nairobi School of Law and The Center for Advanced Studies in Environmental Law and Policy (CASELAP). He has published numerous books and articles on Environmental Law, Environmental Justice Conflict Management, Alternative Dispute Resolution and Sustainable Development. Dr. Muigua is also a Chartered Arbitrator, an Accredited Mediator, the Managing Partner of Kariuki Muigua & Co. Advocates and Africa Trustee Emeritus of the Chartered Institute of Arbitrators 2019-2023. Dr. Muigua is recognized among the top 5 leading lawyers and dispute resolution experts in Band 1 in Kenya by the Chambers Global Guide 2022 and was listed in the Inaugural THE LAWYER AFRICA Litigation Hall of Fame 2023 as one of the Top 50 Most Distinguished Litigation Lawyers in Kenya.

References

Muigua, K., Settling Disputes Through Arbitration in Kenya, 4^th Edition, Glenwood Publishers, Nairobi, 2022, p. 335 to 340.

News & Analysis

Difference between Traditional ADR Versus Digital Disputes Resolution

Published

14 hours ago

September 28, 2023

Admin

By Dr. Kariuki Muigua, PhD (Leading Environmental Law Scholar, Sustainable Development Policy Advisor, Natural Resources Lawyer and Dispute Resolution Expert from Kenya), The African Arbitrator of the Year 2022, Kenya’s ADR Practitioner of the Year 2021, CIArb (Kenya) Lifetime Achievement Award 2021 and ADR Publisher of the Year 2021 and Author of the Kenya’s First ESG Book: Embracing Environmental Social and Governance (ESG) tenets for Sustainable Development” (Glenwood, Nairobi, July 2023).

A perusal through many of the African countries’ legal, policy and institutional frameworks on Alternative Dispute Resolution (ADR) practice reveal that most of them are still focused on the traditional arbitral processes that are mainly physical in nature. However, with technological evolution, there has been emergence of new areas of commerce which naturally also come with related disputes. One such area is the digital commerce platforms. Consumer behavior and business models have changed dramatically as a result of digitalisation and technological disruption, which was expedited by the effect of the COVID-19 pandemic. Apart from pandemic impacts, the rise of information technology, globalization of economic activity, blurring of distinctions between professions and sectors, and increased integration of knowledge have all contributed to developments in the legal sector. Technology has greatly impacted the way law and legal experts are operating in this era as far as enhancing efficiency is concerned.

Further, the rise of platforms and apps with multiple integrated services ranging from transportation to finance and telemedicine has altered how services are consumed, with businesses increasingly relying on electronic transactions and digital solutions for everything from sourcing to invoicing and payments. Secure and smooth cross-border data transfers are critical for the digital economy’s growth and the protection of consumers’ interests. The traditional legal and institutional frameworks on arbitration cannot, arguably, respond to the related disputes as they currently are. There is thus need for African countries to respond to the digital and technological evolution by putting in place corresponding infrastructure to address the disputes that are bound to arise from the same.

ADR procedures have been linked to a number of benefits over litigation, including being quicker, cheaper, and less restrictive on procedural norms. In the twenty-first century, alternative dispute resolution (ADR) aims to develop a faster, more cost-effective, and more efficient approach than litigation, which is time-consuming and expensive. Foreign investors prefer mediation or arbitration over the national court system because they are concerned about the effectiveness of national courts in cross-border conflicts. In the context of cross-border commerce, dispute resolution through arbitration/ADR is not just a domestic but also an increasingly rising worldwide phenomena.

Contemporary ADR methods and procedures are thought to be more efficient and constructive than traditional schemes for managing conflicts and settling disputes because they help parties collaborate by reducing animosity and diminishing competitive incentives during the process, and in part, allows for a more satisfactory process through the conflict management expertise of professional negotiators and state-of-the-art in the field. The features of flexibility, cheap cost, absence of complex processes, collaborative issue solving, salvaging relationships, and familiarity with the general public are the core selling points of ADR methods.

Digital disruption has been felt across all modes: digital versions of products or services compete with physically embodied versions, and digital distribution/facilitation business models compete with conventional distribution business models. Technology has also crept into the realm of alternative dispute resolution thanks to advancements in the field. There is now online mediation, online arbitration, and even block chain arbitration, which employs the same block chain technology as cryptocurrencies. Alternative conflict resolution, sometimes known as “online dispute resolution,” is becoming more popular.

The United Kingdom’s Digital Dispute Resolution Rules provide for an automatic dispute resolution process which means a process associated with a digital asset that is intended to resolve a dispute between interested parties by the automatic selection of a person or panel or artificial intelligence agent whose vote or decision is implemented directly within the digital asset system (including by operating, modifying, cancelling, creating or transferring digital assets). It is, however, worth pointing out that these Rules have also created room for the traditional ADR mechanisms by providing that ‘any dispute between interested parties arising out of the relevant contract or digital asset that was not subject to an automatic dispute resolution process shall be submitted to arbitration in accordance with the current version of these rules at the time of submission; however, any expert issue shall be decided by an appointed expert acting as such rather than as an arbitrator’.

The emergence of Online Dispute Resolution (ODR) as a supplement to Alternative Dispute Resolution (ADR) might result in a meaningful paradigm shift in how conflicts are resolved outside of conventional court systems. It has been argued that the traditional court system is incapable of administering justice ‘on a large scale,’ and that ADR and ODR are more appropriate because they provide the architecture and tools to handle online disputes and can more proportionally handle functions that judicial authorities can no longer handle. International commercial disputes may quickly grow into huge trade disputes with significant political and economic ramifications, necessitating the greater use of extrajudicial dispute settlement rather than litigation in national courts. As a result of globalization, effective and dependable systems for resolving commercial and other general issues involving parties from several jurisdictions have become not only desirable but also essential.

*This article is an extract from the Article “The Evolving Alternative Dispute Resolution Practice: Investing in Digital Dispute Resolution in Kenya” by Dr. Kariuki Muigua, PhD, Senior Advocate of Kenya, Chartered Arbitrator, Kenya’s ADR Practitioner of the Year 2021 (Nairobi Legal Awards), ADR Lifetime Achievement Award 2021 (CIArb Kenya), African Arbitrator of the Year 2022, Africa ADR Practitioner of the Year 2022, Member of Permanent Court of Arbitration nominated by Republic of Kenya and Member of National Environment Tribunal (NET). Dr. Kariuki Muigua is a foremost Environmental Law and Natural Resources Lawyer and Scholar, Sustainable Development Advocate and Conflict Management Expert in Kenya. Dr. Kariuki Muigua is a Senior Lecturer of Environmental Law and Dispute resolution at the University of Nairobi School of Law and The Center for Advanced Studies in Environmental Law and Policy (CASELAP). He has published numerous books and articles on Environmental Law, Environmental Justice Conflict Management, Alternative Dispute Resolution and Sustainable Development. Dr. Muigua is also a Chartered Arbitrator, an Accredited Mediator, the Managing Partner of Kariuki Muigua & Co. Advocates and Africa Trustee Emeritus of the Chartered Institute of Arbitrators 2019-2023. Dr. Muigua is recognized among the top 5 leading lawyers and dispute resolution experts in Band 1 in Kenya by the Chambers Global Guide 2022 and was listed in the Inaugural THE LAWYER AFRICA Litigation Hall of Fame 2023 as one of the Top 50 Most Distinguished Litigation Lawyers in Kenya.

References

Muigua, K., “The Evolving Alternative Dispute Resolution Practice: Investing in Digital Dispute Resolution in Kenya,” Available at: http://kmco.co.ke/wp-content/uploads/2022/04/The-Evolving-Alternative-Dispute-Resolution-Practice-Investing-in-Digital-Dispute-Resolution-in-Kenya-Kariuki-Muigua.pdf (accessed 28^th September 2023).

News & Analysis

Navigating the Digital Dispute Resolution Landscape: The Opportunities

Published

24 hours ago

September 27, 2023

Admin

Technology is a disruptive phenomenon that has the capacity to end traditional business models, to cast whole industries into oblivion, and to destroy traditional crafts, arts, and professions. Rapid digitalization is affecting all aspects of life including the way we interact, work, shop and receive services as well as how value is created and exchanged. Technology has impacted the nature and practice of the legal profession in Kenya and across the globe in the 21st century. Despite its relatively slow progress in embracing technology, the legal profession has in the recent past been more adaptive to technology as a matter of necessity due to ascendancy of information technology, the globalization of economic activity, the blurring of differences between professions and sectors, and the increasing integration of knowledge. The expansion of digital trade and digitally enabled transactions has been tremendous in Kenya, and digitization has become a vital element of a wide range of daily activities and service delivery.

With more and more individuals throughout the globe engaged in immediate cross-border exchanges of digital commodities, and as the infrastructure that supports the Internet increases, obstacles of distance and cost that previously appeared insurmountable have begun to fall away. This, therefore, calls for investment in institutional frameworks that will ably overcome the challenges that come with digital economy, as far as management of the digital trade disputes is concerned. Digital transformation has also affected the resolution of disputes and the enforcement of claims. The disruptions caused by the COVID-19 pandemic have brought to light, the impact of technology on modern legal practice and led to the adoption of practices such as virtual court sessions, electronic filing of pleadings and online delivery of judgments and rulings.

The use of technology has also permeated into the field of Alternative Dispute Resolution (ADR) with practices such as online mediation, online arbitration, smart contracts and block chain arbitration being embraced. It has been argued that the traditional court system is incapable of administering justice on a large scale in light of the digital transformation and there is need to embrace digital dispute resolution in order to effectively manage technology related disputes. Digital dispute resolution has been described as the process of managing disputes on the internet through the use of suitable technology or platforms. It involves the use of technology to facilitate the rapid, cost effective and specialised resolution of disputes involving digital technology including crypto assets, cryptocurrency, smart contracts, distributed ledger technology, and fintech applications.

Digital Dispute Resolution is often compared to Online Dispute Resolution (ODR) which refers to a set of processes that allow for the resolution of disputes via online mechanisms such as the internet or some form of technology that allows for virtual communication. Technology has the ability to make dispute resolution more efficient. It has been observed that technology is transforming the landscape of dispute resolution by generating an ever- growing number of disputes and at the same time challenging the effectiveness and reach of traditional dispute resolution avenues such as courts. Technology holds the promise for an improved dispute resolution landscape that is based on fewer physical, conceptual, psychological and professional boundaries, while enjoying a higher degree of transparency, participation and change. Technology could be used to ensure that every case has a single data set that can be used at every stage of the dispute resolution process in order to avoid the repetition of the same facts and issues in pleadings, witness statements, expert reports, skeleton arguments and opening and closing written submissions.

The United Kingdom has made progress towards embracing digital dispute resolution by adopting the Digital Dispute Resolution Rules which are meant to facilitate the rapid and cost-effective resolution of commercial disputes, particularly those involving novel digital technology such as crypto assets, cryptocurrency, smart contracts, distributed ledger technology, and fintech applications. The Rules must be agreed upon in writing by both parties, either before or after a disagreement arises. The Rules provide language for use in a contract, a digital asset (such as a crypto asset, digital token, smart contract, or other digital or coded representation of an asset or transaction), or a digital asset system. Further, the United Nations Commission on International Trade Law in its Dispute Resolution in the Digital Economy Initiative recognizes the importance of technology in enhancing the efficiency of dispute resolution but with emphasis on the need to take into account the disruptive aspects of digitalization, in particular with respect to due process and fairness.

In Kenya, the Digital Economy Blue Print envisages the use of digital dispute resolution mechanisms such as Online Dispute Resolution to enforce contracts, resolve disputes and protect consumers. These are some of the initiatives adopted towards embracing digital dispute resolution. Some of the technological innovations that have enhanced digital dispute resolution include the use of block chain technology and Artificial Intelligence (AI) programs such as smart contracts and Chat GPT. Block chain technology has facilitated Block chain Dispute Resolution (BDR) which provides a platform for management of disputes arising out of block chain and smart contract transactions or for traditional disputes that are not related to block chain transactions. Further, it has been contended that technologies such as AI could be used to quickly sift through the mass of complex facts to identify the key issues at the heart of each dispute thus enhancing the efficiency of dispute resolution.

Smart contracts have also been embraced in the field of digital dispute resolution. These are programs stored on a block chain that run when predetermined conditions are met. They are often used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss. Smart contracts can also automate a workflow, triggering the next action when conditions are met. Smart contracts are versatile and can be embraced in digital dispute resolution in order to enhance speed, efficiency, accuracy, transparency and cost effectiveness. Indeed, smart legal contracts are being adopted which execute automatically when conditions have been met. These include digital wills and legal agreements between organizations.

Further, it has been asserted that programs such as Chat GPT have the potential of enhancing efficiency and expeditiousness in dispute resolution in areas such as legal research and formulating legal opinions. It can provide quick and convenient solutions to many legal research and contract analysis tasks. Chat GPT can also foster dispute resolution mechanisms such as International Commercial Arbitration in areas such as language translation in disputes involving parties from different nationalities. It can also be used in text summarization and production of relevant case notes thus aiding the process of dispute resolution. Due to its ability to save time and effort by automating tasks and creating documents and communication quickly, Chat GPT and similar platforms will continue to have a significant impact on the legal landscape including dispute resolution. It is thus evident that there is immense potential for digital dispute resolution. However, despite its potential, digital dispute resolution raises several challenges.

*This article is an extract from the article “Navigating the Digital Dispute Resolution Landscape: Challenges and Opportunities,” by Dr. Kariuki Muigua, PhD, Senior Advocate of Kenya, Chartered Arbitrator, Kenya’s ADR Practitioner of the Year 2021 (Nairobi Legal Awards), ADR Lifetime Achievement Award 2021 (CIArb Kenya), African Arbitrator of the Year 2022, Africa ADR Practitioner of the Year 2022, Member of Permanent Court of Arbitration nominated by Republic of Kenya and Member of National Environment Tribunal (NET). Dr. Kariuki Muigua is a foremost Environmental Law and Natural Resources Lawyer and Scholar, Sustainable Development Advocate and Conflict Management Expert in Kenya. Dr. Kariuki Muigua is a Senior Lecturer of Environmental Law and Dispute resolution at the University of Nairobi School of Law and The Center for Advanced Studies in Environmental Law and Policy (CASELAP). He has published numerous books and articles on Environmental Law, Environmental Justice Conflict Management, Alternative Dispute Resolution and Sustainable Development. Dr. Muigua is also a Chartered Arbitrator, an Accredited Mediator, the Managing Partner of Kariuki Muigua & Co. Advocates and Africa Trustee Emeritus of the Chartered Institute of Arbitrators 2019-2023. Dr. Muigua is recognized among the top 5 leading lawyers and dispute resolution experts in Band 1 in Kenya by the Chambers Global Guide 2022 and was listed in the Inaugural THE LAWYER AFRICA Litigation Hall of Fame 2023 as one of the Top 50 Most Distinguished Litigation Lawyers in Kenya.