Author: Richard Kreindler*
Published: December 2006
Categories of Disputes
Choice of Forum/Place of Proceedings
Description: The focus of my remarks is one narrow, but crucial aspect of the challenges of parallel arbitration and/or litigation proceedings, namely, shopping for an arbitral forum. The basic notion behind arbitral forum shopping is similar to that in civil litigation: namely, shopping around for a suitable jurisdiction and venue, or seat, in a contractual or non-contractual situation in which, potentially, more than one option legitimately exists, or indeed more than one has already been invoked or more than one has already been exhausted.
Thus arbitral forum shopping may entail one or more of the following: there is or there is not contractual privity; there is or there is not a private agreement to arbitration; there may be multiple treaty-based options of dispute resolution mechanisms; there is or there is not an agreement to a specific seat, and an agreement to specific arbitral rules; there may be multiple arbitrations with the same or with different seats and with the same or different sets of rules; and there may be parallel agreements to arbitration and the local courts with the same or with a different seat or venue.
Against this background, I pose two questions: First, what is the impact of forum shopping on international arbitration, how do the motivations for forum shopping in litigation apply to forum shopping in arbitration, and what are the possibilities for controlling such shopping? Second, in light of the development of forum shopping in arbitration in recent years, particularly in the investment context, does it impact negatively on international arbitration, affecting choices parties might otherwise make for or against arbitration?
*Dr. Richard Kreindler is a partner with Shearman & Sterling LLP in Frankfurt, Germany, focusing on international commercial, construction and investment arbitration and litigation. This article is adapted from remarks presented by Dr. Kreindler at the 24th Annual Meeting of the ICC Institute of World Business Law in November 2004 in Paris, and as more fully presented in Parallel State and Arbitral Procedures in International Arbitration, Chapter 6, DOSSIERS OF THE ICC INSTITUTE OF WORLD BUSINESS LAW, NO. 692, available from www.iccbooks.com. The presentation style has been intentionally preserved.