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Guide to Regional Arbitration (volume 7 - 2019)

Survey Results

02 January 2019

This survey, which is now in its fifth iteration, began in 2013 and was revised in 2015 when GAR first asked counsel and arbitrators if they preferred using hearing centres to hotels, and, if so, what exactly they were looking for.

We now update it every year to show which of the current hearing centres best conforms to what people want.

But first, let’s go back to the beginning, and the key question: are arbitration-specific hearing spaces an improvement over hotels?

Not everybody, it turns out, likes them.

“I have a strong preference for holding the hearing at a hotel,” one Swiss counsel told GAR when we first asked this question. “This enables us to set up ‘war rooms’ on-site that can be accessed outside of ordinary working hours. This greatly facilitates hearing preparation before and after the actual hearing time. In contrast, at [a well-known arbitration hearing centre] for example, it is very difficult or impossible to access the breakout rooms before or after standard working hours. For this reason alone, I am not a big supporter of stand-alone dedicated arbitration hearing centres,” he said.

On the other hand, not everybody wants to visit their files in their pyjamas (and not every hearing centre is off-limits to those who do – many are happy to let you in out of hours). But it shows that people do have preferences, sometimes strong. So in 2013 and 2015 GAR decided to get to the bottom of them.

The result are the tables and commentary in this report.

The first finding was a strong preference of the 300-odd participants for hearing centres over hotels. Our Swiss interlocutor it turned out had been in the minority. Many intensified their response with a “by far” or “without any doubt”.

What’s so appealing about going “bespoke”?

In follow-up comments, respondents who favoured hearing centres used variants on the same theme. Hearings are stressful enough without worrying about silly details. Hearing centres are simply better at making everything run smoothly, and take care of the day-to-day.

“A hearing centre is better equipped to assist lawyers at a demanding moment,” said one source, “they’re simply more likely to be responsive to urgent requests.”

Our original survey also asked whether users were happy with the number of arbitration hearing centres around the world (Table C), and the amount of space. Although it appears to show reasonable satisfaction, a follow-up question – where GAR readers were asked if there were particular cities in which it was hard to find good space for a hearing – generated a long list and indicated the opposite.

Cities or regions where people highlighted difficulties included (remember this is from 2015) Geneva (“Go to Lausanne” said one person), Zurich, New York (the NYIAC had yet to open), Stockholm (the Stockholm International Arbitration Hearing Centre was also yet to open), Moscow, Tokyo, Beijing and India – not to mention “the whole of Africa and many parts of Asia”. (Editor’s note: the original survey also predated the launch of the Swiss Arbitration Hub, an online way to find and book arbitration-friendly hotels.)

Anecdotally, even in 2018, many GAR readers still feel the same. In the course of the past year GAR journalists have had private conversations about the number of hearings that still have to take place in hotels in London and Paris – two cities that have well-liked hearing centres.

Why don’t some people like arbitrating in hotels? After all, wherever you are, they’re generally thick on the ground. For one thing, in some locales there are problems with availability.

“Have you tried booking [meeting] space for a long period in Hong Kong?” asked one contributor to the original survey. “It’s nearly impossible to book the same hotel for the entire duration you’re likely to require.” This, he added, can be true even of the hotel you are staying in.

The same goes for New York during UN week, or almost any city “during fashion week!”

Client’s don’t always react well to the idea of a hotel, or their finance departments don’t. They can balk at paying top dollar at an expensive hotel, which in turn can have ramifications. One contributor told a story about arriving at a four-star hotel that was “so bad we immediately tried to upgrade our rooms to the suites”. Unfortunately for his side, the opponents had arrived a day earlier and done just that. “So no suites were left.” The case settled on the first day “and we were all very happy to leave”.

Beyond that, there’s the hotel’s lack of familiarity with the arbitral process. Setting up a room for a hearing is an art unto itself and, save for a few hotels in Switzerland, not a core skill of the trade. That leads to annoyances such having to continually re-explain room layouts, mix-ups over security and privacy, and – above all – confusion about who’s allowed access to which rooms.

Even something as simple as (unexpected) photocopying can be difficult at a hotel. “You can make hotels work,” said one US counsel and arbitrator, “but it’s definitely more of a pain, and absolutely definitely requires a site visit beforehand to avoid surprises.”

On top of that, the life of a grand hotel is rich and varied and can spill over into the arbitration. One arbitrator remembers how he had to move his hearing after an Arab princess arrived unannounced and demanded the use of the hotel’s entire conference area. Where did he and his colleagues end up? Downstairs, in the disco, he reported with some glee. More common is being interrupted by a wedding DJ or a round of “Happy Birthday”.

“My bête noire [when using Dutch hotels],” reports one Dutch lawyer, “is soup, which [they] insist on serving because it is always part of the lunch deal! And they do so irrespective of time. They just leave it there for hours – and then you’ve got a bubbling smelly pot in the middle of everything.”

“On one occasion, they left it in the breakout room overnight. Not only was the smell truly impressive, the thing got so overheated that I burnt my hand lifting the lid,” she says.

Law firm offices or the arbitrators’ offices of course can be an option; indeed, Table B finds a small percentage of users who favour these above all other options.

But the meeting rooms in law firms can be small and may not amount to neutral territory. Furthermore, as more arbitrators move out of large firms, their ability to host matters on their own premises is reducing. (While larger law firms may have space they are not always willing to give over valuable client areas to hearings, viewing the hubbub as unwelcome in their otherwise still halls.)

Biggest, roomiest, cheapest

Approve or disapprove, hearing centres are opening all the time. As mentioned, since this report was first published, Stockholm, New York, Toronto and Seoul have all joined the list of cities with one centre, while others have gone through upgrades. Standards are being raised too. Toronto, for instance, is now home to “Arbitration Place”, where the rooms are named after varieties of wine, the furniture is Herman Miller, and the ethos is greater comfort and luxury. Meanwhile, cities such as Tokyo have centres planned.

When someone opts for a hearing centre, what are they truly looking for? Having established that a preference exists for hearing centres (in 2013), GAR moved onto answering this question. What aspect of a centre matters most? What makes one hearing centre “good”? In 2015, we canvassed users specifically on this. (Sample question: if you had a choice between two centres, which factors would make you pick one over the other?) Table D shows our results. As you can see, location, value for money, adequate space and comfort, reliable IT and helpful staff were identified as the things that mattered most.

Each year, we review the current crop of centres to see how they measure up. This year’s findings appear below.

Location

Location hasn’t changed much over the years. New centres have opened, but to date the original crop of hearing centres are in the same locations within their cities that they’ve always been.

Table E shows which centres people thought well located when we first asked in 2015.

The HKIAC’s “excellent location at the heart of Central [a district in Hong Kong]” put it top. As one participant noted, the HKIAC is close to a large number of business hotels, within walking distance of the major law firms (it’s in the same building as several), and right above the connection to the airport – Hong Kong’s 
Airport Express.

In the same vein, the IDRC in London drew comments about its suitable position within the capital – close to many of the structures that define legal London: the law courts, the Inns of Court, etc. On the other hand, Maxwell Chambers seemed to lose points with some for its position a little away from the main business district.

Price and value for money

While location is something of a fuzzy criterion, price, and by extension value for money, is harder to argue about.

Table F shows the average cost of a room per day at each hearing centre, as calculated from the centre’s published rate card, converted from local currency to US dollars in early October 2018. We have taken the prices for standard layouts, ignoring any bespoke options (where rooms are combined into bigger rooms or self-contained units) and extras such as catering.

It shows that, for example, the most expensive options at present are the NYIAC and the ICC (with Stockholm, Madrid and the PCA in the mix too). At the other end of the spectrum, the Scottish Arbitration Centre and the AIAC (formerly the Kuala Lumpur Regional Arbitration Centre) offer notably low rates. (Editor’s note: there is a caveat here. We were unable to obtain full details of the AIAC’s floor plan or rate card. Therefore the figure given in the table is tentative and may be revised.)

Meanwhile, in North America, Atlanta and Toronto offer a clear price alternative to New York.

Of course, hearing centres don’t necessarily compete with each other – they compete primarily with hotels, so ‘value’ depends more on the price of hotel space.

That said, if you have a choice, there are bargains to be had for the mobile.

Room size and comfort

Next in the list of preferences is “size”. Biggest isn’t always best, but in a service industry it definitely helps. As the customer, you know it means the centre is more likely to be able to fit you in when you want.

On top of that, an arbitration sometimes needs room to breathe. The bigger a centre is, as a rule of thumb, the less likely the rooms are to be cramped and inflexible (though the ICC, for example, has quite large rooms but fixed in a long and narrow shape).

Flexibility is useful too. In the future, we may evaluate this. How many different shapes of room, or types of layout, can a centre offer? For now though we’ve kept it simple and looked only at the number of hearing rooms and hearing room size. You can see the results of 2018’s survey in the following four tables.

Table G shows how many square metres the current crop of centres devotes to hearing rooms (we ignore breakout space). The figures are based on current floor plans and website information and represent the area covered when all hearing rooms are added together; we thus ignore any blended rooms (two or more combined) that the centre may offer.

Table H shows how many hearing rooms the centre can supply.

Table I shows the average size of a hearing room.

Table J shows the size of each centre’s largest hearing room (we have allowed blended options to count here).

What do these tables show?

For a start, it is clear that four centres – AIAC (with the caveat that we don’t have full information on it yet), Stockholm, the IDRC in London and Maxwell Chambers – have the edge for quantity of hearing rooms, with 22, 15, 14 and nine rooms respectively. One could make the case that Atlanta should be in this list, but only if three rooms that are in a different part of its building, to which it has access, are counted (one of which being its mighty “court room”, which is laid out like a US court of appeal).

Second, the tables illuminate just how far one city in particular has come in a short space of time. When this survey began, in 2013, Stockholm was identified as one of the places in which it was painful to organise a hearing. Today, it has three central hearing facilities that all operate under the umbrella of the Swedish International Arbitration Hearing Centre and, as these tables show, it is arguably the most hearing-friendly city in Europe – possibly the world.

Finally, Table J shows that for sheer size, the HKIAC or the World Bank in DC are the best options, but not by much. There are some pretty big rooms available around the world. (Note: the World Bank requires at least one state party.)

IT services

Technology is the other facet people told us to monitor.

Table K shows which centres got high marks for technology in 2015. While some respondents singled out a particular centre, it is fair to say that the majority of people said they found no difference among the centres they’d used on IT.

Three years on, GAR hasn’t heard of any centre that has broken away from the pack for IT. The figures in Table I are from our last in-depth survey of this aspect in 2015.

If nothing else, this annual review of hearing centres highlights how much progress has been made. Once upon a time, as one source explained at the outset of this project, “it was the exception rather than the rule to find good-quality arbitration centres.”

“In fact as a younger lawyer I recall being shocked at how poor hearing facilities were in some of the well-established seats: Paris, Zurich, Geneva, for example,” he said. Today it’s rare for an arbitration seat not to have at least one centre, and there are even calls for some cities – London and Paris, for example – to have more than one, to keep pace with cities such as Stockholm.

At least things are better than the old days. The future, it seems, is here – and it’s a good deal more comfortable.