Introduction

The idea of this guide, The Guide to Telecoms Arbitrations, came about during the covid-19 pandemic. With the world entering a new paradigm of lockdowns and working from home policies, the need for enhanced telecommunication services has never been so acute. This is undoubtedly true of mobile and data services, both of which are core services offered by any telecoms operator, and demand for these services is unlikely to slow down. Coupled with the advent of new technologies such as 5G, the telecoms sector is undergoing radical changes and is expected to revolutionise ways in which we live, work and interact in society. It has already impacted arbitration usages, with the ever-increasing reliance on technology for legal research, document management and virtual hearings.

Predictably, a rise in arbitrations could result from this new paradigm and the changing landscape. As telecoms operators embark on their development spree, states will also want to regulate the sector to preserve their essential interests. Frictions between telecoms operators and foreign governments are inevitable in light of the massive investments involved in existing and new roll-out projects. Both domestic and international legal frameworks will naturally evolve to keep track of developments in the sector.

This guide is not intended to be a comprehensive toolbox for any kind of arbitration that arises in the telecoms sector. But since we must start somewhere, this first edition will cover both general and specific themes that will hopefully bring more insight to the arbitration community.

It may sound trite, but is arbitration really the preferred option to resolve telecoms disputes? The first port of call is to see what the end users of arbitration think. The guide therefore starts with an in-house perspective from Paul Werné, the former general counsel at one of the most prominent telecoms operators.[2] A chapter on the suitability of arbitration to new technologies by Nasser Ali Khasawneh, Maria Mazzawi and Ricardo Christie of Eversheds Sutherland LLP then follows.[3]

However, even when arbitration is preferred, the nature of the telecoms sector and its far-reaching and overlapping effects on a whole range of matters may give rise to issues of arbitrability, which may become important and relevant in the context of enforcement of arbitral awards.[4] This is addressed in a chapter by Emily Hay of Hanotiau & van den Berg.

When it comes to commercial arbitration in the telecoms sector, it is fair to say that this has been primarily driven by M&A disputes that can arise in a variety of scenarios.[5] While the governing law to these arbitrations will be subject to what the parties agreed to in their contract, a chapter by Will Hooker, Rosalind Axbey, Rachel Ong and James Newton of Pallas Partners LLP also looks at whether there is a different approach under common law as compared to civil law. Equally important are the valuation approaches most predominantly used in commercial arbitrations to assess damages, and this is explored by Kai F Schumacher and Christoph Wilmsmeier of AlixPartners.[6]

As for oil, gas and other natural resources, spectrum is the new scarce resource, one may say. Most of the telecoms infrastructure in use, such as towers, can be found on land. However, undersea cables have proliferated in recent times, which is not without posing difficulties when it comes to disputed maritime zones, as Michael J Stepek of Winston & Strawn LLP explains.[7] Further, the terrestrial nature of that infrastructure is by no means the end of the story. The satellite industry has now emerged as a direct competitor to telecoms operators, and this is likely to entail a rise of satellite disputes that may be subject to arbitration.[8] This is covered in detail by Laura Yvonne Zielinski, president of the Space Arbitration Association.

Part II of the guide is devoted to investment treaty arbitration in the telecoms sector. There is self-evidently a tension between the state’s sovereign right to regulate and the protection of the investor’s rights. The chapters in this part of the guide, authored by Reza Mohtashami QC, Leilah Bruton and Farouk El-Hosseny at Three Crowns LLP, and Babatunde Fagbohunlu and Inyene Robert of Aluko & Oyebode respectively, revisit the jurisprudence of the right to regulate and its limits[9] and also look more closely at the obligations of the investor and how these obligations have been revamped in more recent investment treaties.[10]

There are then two chapters that focus on recent developments. The Huawei saga has brought a new light to the defence of necessity,[11] as explored by David Hunt and Ben Love at Boies Schiller Flexner (UK) LLP, whereas armed conflict and civil unrest in different parts of the world have posed further challenges to the sector, as Michael Darowski and Romilly Holland of McDermott Will & Emery set out.[12] The final chapter, by Lucrezio Figurelli and Richard Caldwell of Brattle, deals with issues of compensation and the approach taken by investment treaty tribunals in recent cases.[13]

The final part of the guide gives a geographical perspective to telecoms arbitrations, with an overview of telecoms arbitrations in Africa by Magda Cocco, Tiago Bessa, Carla Gonçalves Borges, Marília Frias and Catarina Carvalho Cunha, and Bernardo Kahn at Vieira de Almeida,[14] and an overview of Latin America by Eduardo Silva Romero, José Manuel García Represa and Catalina Echeverri Gallego of Dechert LLP.[15] Other regions will be covered in the online edition.

This guide brings together leading arbitration practitioners who have a wealth of experience in telecoms arbitrations. It is hoped that, by focusing on a sector that will be impacting the world of arbitration in the coming years, this guide will be helpful for the arbitration community.

I would like to warmly thank all the persons who have made this project a reality, starting, of course, with the contributors and the teams that have assisted them. I also express gratitude to the team at Global Arbitration Review including David Samuels, Mahnaz Arta, Hannah Higgins, Jack Levy and Georgia Goldberg.

Wesley Pydiamah
July 2022


Notes

[1] Wesley Pydiamah is a partner at Eversheds Sutherland.

[2] See Chapter 1, ‘An In-House Perspective on Telecoms Arbitrations’.

[3] See Chapter 2, ‘Arbitration and the Advent of New Technologies’.

[4] See Chapter 3, ‘Issues of Arbitrability in Telecoms Arbitrations’.

[5] See Chapter 4, ‘M&A Arbitrations in the Telecoms Sector’.

[6] See Chapter 5, ‘Valuation Approaches in Telecoms Arbitrations: Commercial Arbitrations’.

[7] See Chapter 6, ‘Claims in Disputed Maritime Areas: Resolving International Disputes Arising from Activities Relating to Submarine Cables in Disputed Maritime Areas’.

[8] See Chapter 7, ‘The Rise of Satellite Arbitrations’.

[9] See Chapter 8, ‘Standards of Protection: The State’s Sovereign Right to Regulate and its Limits’.

[10] See Chapter 9, ‘Standards of Protection and the Obligations of the Investor’.

[11] See Chapter 10, ‘Is the People’s Good the Highest Law? The Concept of Necessity in Investor-State Protections’.

[12] See Chapter 11, ‘Civil Unrest and Investor–State Claims in the Telecommunications Sector’.

[13] See Chapter 12, ‘Valuation Approaches: Investment Treaty Arbitrations’.

[14] See Chapter 13, ‘A Look at the Future: the Growth of Telecoms Arbitrations in Africa’.

[15] See Chapter 14, ‘Telecommunications Arbitration in Latin America’.

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