How incremental change fuels arbitration

September 2024

Is international arbitration on a steady upward path or reaching a plateau? Two contrasting views exist, but both may be missing the bigger picture, writes Shannon Ng of Opus2.

International arbitration, a cornerstone of global dispute resolution, may be sitting at a crossroads. As we look toward its future, opinions diverge. Some believe it is poised for continued growth, while others predict a plateau. However, both agree that improvement is essential.

Securing a strong future for arbitration will require an understanding of the challenges facing it and a willingness to embrace small, but impactful changes.

Diverging views on the future

The future of international arbitration can be seen through two lenses: one optimistic, the other cautious. Those in the first camp point to a long history of steady growth, despite challenges like the global financial crisis and the COVID-19 pandemic. They believe that arbitration will continue to thrive, riding an unbroken wave of success.

On the other hand, some see a more complex picture. Arguing that after a period of rapid expansion, arbitration may have hit its plateau. They cite outcomes that fall short of arbitration’s original intent and worry that without significant change, stagnation is imminent.

Understanding the forces at play

As with many opposing opinions, the truth likely lies somewhere in between these two extremes. The future of arbitration will be shaped by a myriad of factors – political, economic, demographic, and technological – that are difficult to predict with certainty. This complexity makes it hard to rely solely on past trends to confidently forecast the future.

However, this uncertainty does not mean we are powerless to shape the future. In fact, there is an opportunity here for those who are willing to embrace modest but meaningful changes. Focusing on evolution rather than revolution offers the most promising and sustainable path to improvement and innovation in arbitration.

The impressive potential of minor modifications

Historically, change in arbitration has been driven primarily by governing bodies and arbitral institutions. For example, in recent years, the UAE has adopted new arbitration laws including reforms in 2023 that enhanced arbitrator impartiality, encouraged virtual proceedings, and aligned the region’s legal framework more closely with global standards – all positive steps that position the region for growth. However, the international arbitration community can’t solely rely on these organisations to determine the path forward.

Instead, individuals can make incremental changes to inspire evolution within arbitration. From optimising processes by adopting new technology to exploring new ways to engage with peers, when successfully managed, these changes, while modest, can have major benefits. This shift in mindset empowers practitioners to shape the future of arbitration.

A challenge for the arbitration community

The traditional focus of arbitration has been on securing an enforceable award, often at the expense of considering other important factors. However, to foster innovation, we must broaden our perspective.

Within the larger dispute resolution landscape, the international arbitration community is known for being very close-knit, intellectual, and intensely passionate. Long-time practitioners and industry leaders know each other well, collaborate closely, and often serve as pillars to the industry’s most notable events.

While this helps facilitate the sharing of knowledge and advance international arbitration, it can be intimidating to inexperienced or under-resourced newcomers. To support ongoing growth in arbitration, we must recognise these institutions and bonds may appear impenetrable to eager but inexperienced newcomers. If unaddressed, this intimidating barrier will limit the diversity of arbitration.

The community may also unintentionally create an echo chamber effect, connecting almost exclusively with those holding similar titles. Bloomberg Law’s 2021 Legal Operations Survey [1] illustrated this mindset finding that 82 percent of respondents believed that multi-disciplinary teams can only include lawyers. As lawyers surround themselves primarily with peers from similar backgrounds, they may miss out on insights and inspiration that could be gained from experts in a wide variety of roles and in other areas of dispute resolution.

A call to broaden horizons

To shape the future of international arbitration, we must expand the dialogue, include a wider range of participants, and adopt technology that enables innovation as well as greater accessibility.

It’s crucial to consider how arbitration can retain the culture of close collaboration while also welcoming new voices. In practice, this means finding ways to reduce or remove barriers to participation.

Small changes that could have a big impact:

– Hosting localised meetings to foster community outside of traditional international arbitration hubs
– Offering scholarships for junior practitioners to join arbitration events like Paris Arbitration Week (PAW) and ICCA
– Encouraging long-time practitioners to engage with newcomers and outsiders to share insights and seek out new perspectives
– Leveraging virtual and hybrid hearings to ensure accessibility
– Adopting advanced technology [2] that supports remote collaboration and facilitates the sharing of electronic bundles and the electronic presentation of evidence
– Empowering innovation and process optimisation to deliver more timely and cost-effective outcomes

We can’t predict the future, but we can invent it

What international arbitration will look like in the future is almost impossible to predict, but that uncertainty presents an opportunity. By embracing incremental changes, broadening the range of voices involved in the process, and encouraging innovation with technology, we can help ensure that arbitration continues to evolve to meet the needs of a changing world. As we look to the future, it is up to all of us to help shape it.

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