2011 OFII General Counsel Conference Washington, D.C. International Arbitration Practical Strategies for Improving Efficiency and Limiting Expense The Voice of the Users: Expectations and Frustrations Dr. Anke Sessler, Chief Counsel Litigation, Siemens AG

2011 OFII General Counsel Conference Washington, D.C. Overview I.Flexibility of the Process – There is No "One- Fits-All"-Approach II.More Efficiency with the New Arbitration Rules? III. Selection of Arbitrators – What Really Matters

2011 OFII General Counsel Conference Washington, D.C. I.Flexibility of the Process – There is No "One- Fits-All"-Approach – Arbitration has become more litigious, formalistic and less flexible. – Proceedings should be custom-tailored to the needs of the parties in the specific dispute. – No "international standard"-procedure.

2011 OFII General Counsel Conference Washington, D.C. II.More Efficiency with the New Arbitration Rules?  Expectations of "the" user - quick and efficient resolution of disputes - adequate and predictable results

2011 OFII General Counsel Conference Washington, D.C. 1.Efficiency as a general guideline of modern arbitration rules “The arbitral tribunal and the parties shall make every effort to conduct the arbitration in an expeditious and cost-effective manner, having regard to the complexity and value of the dispute.” (Art ICC Rules 2012)

2011 OFII General Counsel Conference Washington, D.C. 2.Case Mangement and Procedural Timetable “[…] the arbitral tribunal shall convene a case management conference to consult the parties on procedural measures that may be adopted […] Such measures may include […] case management techniques described in Appendix IV.” (Art ICC Rules 2012) “The Tribunal may in its discretion […] exclude cumulative or irrelevant testimony or other evidence and direct the parties to focus their presentations on issues […]” (Art SIAC Rules 2010) “[…] the arbitral tribunal shall establish the provisional timetable of the arbitration [...]” (Art UNCITRAL Rules 2010)

2011 OFII General Counsel Conference Washington, D.C. 3.Availibility of the Arbitrator “Before appointment or confirmation, a prospective arbitrator shall sign a statement of acceptance, availability, impartiality and independence…” (Art ICC Rules 2010) “Note. Any party may consider requesting from the arbitrator the following addition to the statement of independence: I confirm, on the basis of the information presently available to me, that I can devote the time necessary to conduct this arbitration diligently, efficiently and in accordance with the time limits in the Rules.” (Annex, UNCITRAL Rules 2010) “The Chairman shall also consider whether the arbitrator has sufficient availability to determine the case in a prompt and efficient manner appropriate to the nature of the arbitration.” (Art SIAC Rules 2010)

2011 OFII General Counsel Conference Washington, D.C. 4.Expedited Proceedings - Expedited proceedings have the potential to change the way how smaller disputes are handled. -UNCITRAL (-) -ICC (-) -SIAC (+) > Art. 5 SIAC Rules SCC (+) > Separate "Rules For Expedited Arbitrations 2010"

2011 OFII General Counsel Conference Washington, D.C. 5.Frontloading? “A brief description of the claim and an indication of the amount involved, if any” (Art. 3.3.e UNCITRAL Rules 2010). “[A] brief statement describing the nature and circumstances of the dispute, specifying the relief claimed and, where possible, an initial quantification of the claim amount;” (Art. 3.1.e SIAC Rules 2010) “[A] description of the nature and circumstances of the dispute giving rise to the claims and of the basis upon which the claims are made” (Art. 4.3.c) ICC Rules 2012) “A summary of the dispute” (Art. 2 (ii) SCC Rules 2010) and “a preliminary statement of the relief sought by the Claimant” (Art. 2 (iii) SCC Rules 2010).

2011 OFII General Counsel Conference Washington, D.C. 6.Costs “In making decisions as to costs, the arbitral tribunal may take into account such circumstances as it considers relevant, including the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner.” (Art ICC Rules 2012)

2011 OFII General Counsel Conference Washington, D.C. 7.Emergency Arbitrator SCC: Art. 32 (4) und Appendix II SIAC: Rule 26.2 und Schedule 1 ICC: Art. 29 and Appendix V “A party that needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal (“Emergency Measures”) may make an application for such measures pursuant to the Emergency Arbitrator Rules in Appendix V.” (Art ICC Rules 2012)

2011 OFII General Counsel Conference Washington, D.C. III.Selection of Arbitrators – What Really Matters -General - Impartial/neutral - Suited for the case - Business-background/ experience in business sector - Experience in arbitration -Appropriate knowledge of relevant substantive area of law - Legal background/education and training -Language - Case management skills - Predictability of the outcome

2011 OFII General Counsel Conference Washington, D.C. International Arbitration Achieving the Promise of Efficient Dispute Resolution Dan Toal Paul, Weiss, Rifkind, Wharton & Garrison LLP

2011 OFII General Counsel Conference Washington, D.C. International arbitration is not necessarily cheaper or more efficient than litigation The potential for efficient dispute resolution in arbitration stems from the ability of the parties to structure the process The flexibility of arbitration can be either a strength or a weakness The arbitration agreement itself provides the best opportunity to structure an efficient arbitration process

2011 OFII General Counsel Conference Washington, D.C. Key Considerations 1.Arbitrator Selection How many? What happens if the parties can't agree? Expertise required? Nationality? 2.Choice of Law Limited to contract disputes? Applied to all disputes between the parties?

2011 OFII General Counsel Conference Washington, D.C. Key Considerations (cont.) 3.Discovery: be careful about relying on "norms" of international arbitration Depositions? Interrogatories? Documents – potential limitations "Material and necessary" standard Documents that the parties intend to rely on Hardcopy documents Cost-shifting

2011 OFII General Counsel Conference Washington, D.C. Key Considerations (cont.) 4.Dispositive Motions Most arbitral rules silent about availability Arbitrators often reluctant to allow 5.Other Issues to Address Arbitral organization Language of arbitration Seat of arbitration Confidentiality Written witness statements Form of the Award

2011 OFII General Counsel Conference Washington, D.C. Investment Treaty Arbitration

2011 OFII General Counsel Conference Washington, D.C. Investment Treaties >2700 bilateral and treaties protecting foreign investment from adverse government action Treaty rights are directly enforceable by investors in binding international arbitration

2011 OFII General Counsel Conference Washington, D.C. Corporate Structure & Investment Treaties US subsidiaries dealing with problems in the US can turn to the treaties of their ultimate parent’s home country, or any intermediate country in the corporate structure If activities in other markets are structured through a US entity, can use US treaties or any intermediate country’s treaties to deal with problems in those markets Parent AHoldCo BUS CoSubCo C

2011 OFII General Counsel Conference Washington, D.C. Using Investment Treaty Rights & Arbitration Structuring business and transactions to maximize investment treaty protection (akin to tax treaty analysis) Leverage in dealing with national and local regulators Arbitration when faced with adverse government action, even if contracts would otherwise direct the dispute to domestic courts