Dr Lee spoke at the International Chamber of Commerce (ICC) Forum
Dr Joseph Lee recently presented a specialist report on intra-corporate dispute arbitration at the ICC Forum held in Brussels.
This public engagement event was attended by practitioners from Jones Day, Meyerlustenberger Lachenal, Hanotiau & van den Berg, Stibbe, White & Case, Linklaters and Matray, Matray & Hallet. This discussion was based on Dr Lee's article on intra-corporate dispute arbitration which will be published in Arbitration in 2017.
Intra-corporate dispute arbitration (ICD arbitration) refers to arbitration for resolving corporate disputes between shareholders and the company, between shareholders and the company directors, between shareholders themselves, and between shareholders and other corporate constituents. In practice, ICD arbitration is commonly used to resolve disputes in closely held companies. In the fund industry, sovereign wealth funds, in particular, often use it as a preferred dispute resolution mechanism to resolve disputes arising out of their investment. Yet, it is a very much under-used method of dispute resolution by private equity houses both in closely held companies and listed companies. As fund managers are under a fiduciary duty to pursue claims, arbitration can be a forum for fund managers to address corporate governance issues and obtain redress. Dr Lee argued that ICD arbitration in listed companies can enhance corporate governance and improve firm value while manage the risks of adverse publicity in litigation. However, as speed is vital in capital markets, attention should be paid to the issue of how interim and final injunctions to obtain specific performance of obligations can be obtained in arbitration.
Dr Lee also drew attention to the impact of EU consumer law on ICD arbitration in listed companies. While a company can include an arbitration clause in its constitution or articles of association, such a clause may not be enforceable under EU consumer law where a retail investor is treated as a consumer.
Dr Lee also discussed the impact of Brexit on arbitration highlighting the opportunities that Brexit may bring (for example, possibly, the availability of anti-suit injunctions to restrain court proceedings in EU Member States) but also the challenges, particularly those due to increased uncertainty for the financial services industry.
Date: 4 January 2017