Memories of Hans Smit the Arbitrator – Vol. 23 No. 3-4

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Author: Lawrence W. Newman*

Published: January 2013

Description: Some three decades ago, I was charged with the responsibility for identifying an arbitrator to be appointed by our client in an international arbitration involving an effort on behalf of our client, a Swiss power company, to escape from what had become an onerous fuel supply contract for a nuclear power plant in Switzerland (of which they do not have any today, thanks to a negative voting referendum some years later). My partner, Henry DeVries, who was also a full-time professor of law at Columbia, suggested that we consider his colleague, Hans Smit, who, he said, would be eminently qualified because of his academic and international background. He added, “Hans is very competitive.” I took this last comment to be of some importance as a desirable quality in a party-appointed arbitrator. We were dealing with a dispute under a contract that provided for arbitration under the rules of the American Arbitration Association. We had been concerned that if the rules and practices of the AAA were to be followed in the case, we would end up with a panel of all American arbitrators. Our research into the Uniform Commercial Code (New York law governed the contract) made us leery of the consequences of the strict application of the UCC. The cases allowing contracting parties to escape their responsibilities under long-term contracts on the basis of changed circumstances (UCC 2-615) were sparse; indeed, there seemed to be only one, the Alcoa case,1 which gave us only a modicum of comfort. Consequently, I implemented a strategy of trying to have a tribunal of what I called “fresh minds,” arbitrators who might look at applicable New York law outside the blinders imposed by the few decided cases.

Therefore, we sought “fresh minds” in the form of non-U.S. arbitrators. We requested the AAA staff to offer lists of arbitrators that were consistent with its practice in international cases of having arbitrators who were not nationals of either of the parties, in this case, American and Swiss. Following a hearing before the staff, the AAA accepted our argument and offered a list of proposed arbitrators, all of them international – non-Swiss and non-American. Many of them came from far away places such as Sri Lanka and Pakistan and were unknown to us and, presumably, also to the lawyers for the other side. Since both parties were not comfortable with the prospect of having the case decided by …

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*Lawrence W. Newman is Of Counsel in the Litigation Department of the New York office of Baker & McKenzie, where he specializes in international litigation an arbitration, as counsel and arbitrator. He is a founder of the International Arbitration Club of New York and, as of January 1, 2013, Chairman of the Arbitration Subcommittee of the Practices and Stnadards Committee of the Chartered Institute of Arbitrators.