By HUSNIYE GUNGOR
International arbitration is the preferred method for resolving cross-border disputes for Turkish businesses, because of the enforceability of arbitration awards, as opposed to litigation, according to Claudia Salomon, president of ICC International Court of Arbitration. “It also creates a neutral process for Turkish businesses instead of having to be in the courts of their counter-party,” she said.
The International Chamber of Commerce’s (ICC) Turkey National Committee, one of the most influential among ICC’s 100 national committees, has been operating for many years under the umbrella of the Union of Chambers and Commodity Exchanges of Turkey (TOBB). ICC Turkey National Committee organizes traditional arbitration conferences in order to share the experiences of the ICC International Court of Arbitration and to enlighten the business world with regards to arbitration.
There is a trust that Turkish businesses have in ICC Arbitration in particular, in terms of foreign investment. However, international arbitration is also an important neutral forum for Turkish construction companies, which are doing business all over the world and entering into contracts with governments, said Salomon, who was in Istanbul to attend this year’s conference. “We see Turkish parties utilizing ICC Arbitration very frequently just like many others around the world, as it is the most international arbitral institution. Last year, we had parties from 145 different countries participating in ICC Arbitration, and it took place in 120 different cities, including Ankara and Istanbul, as well as in Paris, London, Singapore, and Geneva, literally all over the world,” she said.
WHAT IF A DEAL GOES BAD?
It is important for businesses when they enter into a contract and make a crucial decision to make a risk assessment, even at a time when they hope a deal goes very well, and they’re excited about entering into a new business relationship. They still have to think about what happens if the deal goes bad, Salomon warned, and decide in advance what to choose litigation or arbitration. “ICC has been recognized as the world’s most preferred arbitral institution, because of its nearly 100-year history, being so global and international, and the quality of the service that it provides,” she noted.
Over 170 countries around the world have signed the arbitration treaty, known as the New York Convention, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. It’s one of the most successful multinational treaties around the world. This shows that international arbitration is an important avenue of recourse. Countries also see it as important for their economic development and for facilitating and fostering cross-border trade.
“There are definitely countervailing wins around the world that can make enforcement more difficult in different parts of the world. So, we’re very attuned to watching those developments and then listening to the business community regarding different strategies that they take in connection with these issues. We’re also seeing in this last year crises upon crises in shifting geopolitics, economic crisis as we’re hopefully emerging out of the pandemic,” Salomon noted.
SWITCHING TO VIRTUAL HEARINGS
The international arbitration community, like the entire global business community, had to adapt during the pandemic and it proved to be incredibly adaptable, according to Salomon. They all switched quickly to virtual hearings, and other virtual case management conferences, she said. “The presumption about whether your hearings need to be in person has really flipped as a result of the pandemic,” said Salomon adding that in a case in November, where she was sitting as an arbitrator in a non-ICC case, the parties have agreed that the hearing will be held via video conference as a cost-saving method. “Now, there are certainly cases in which parties prefer to be in person because of the number of witnesses or complex issues or technical evidentiary questions. But it means that the parties are assessing this on a case-by-case basis,” Salomon said.
In terms of the future, Salomon thinks that technology itself is really going to shape arbitration in so many different ways. In October, the ICC launched the ICC Case Connect, which is a platform that enables the parties and their counsel, arbitrators, and the ICC secretary to have access to the case file, and no longer have to look back at emails with bulky attachments.
TECH-RELATED DISPUTES TO ARISE
However, to Salomon, technology-related disputes continue to emerge, as we see new technologies like smart contracts or blockchain. We’re also going to see kind of multi-sector disputes as transactions become more complicated, she said. “So, we may have a dispute in the construction industry that also involves technology or finance issues. We see that certainly in Turkey and we’re seeing that in places like China, or disputes involving Chinese parties,” she cited.
The flow of capital is also defining the types of disputes that will arise, Salomon added. “While it used to be so much a focus of investment into China, now, of course, the flow of money is out of China,” she underlined.
Summing up, ICC International Court of Arbitration President Claudia Salomon said that international arbitration is, in essence, a venue of recourse when a Turkish company needs to pursue a claim that can be much more efficient in a neutral forum, with an ability to enforce an award anywhere in the world. “So, we would urge any Turkish company entering into international contracts to assure that their contracts include ICC International Arbitration clauses,” she stated.
ICC wants to be a one-stop-shop for dispute resolution
This year, the 17th ICC Turkey Arbitration Day was held in Istanbul on October 21, 2022. The event was focused on developments related to international arbitration and international dispute resolution, as well as various tools and techniques that businesses can use, according to Claudia Salomon, president of ICC International Court of Arbitration. “I thought the quality of the panels was very sophisticated. We were very honored to have one of the CEOs of one of Turkey’s largest construction companies participate with me in a fireside chat so that the audience could really have the benefit of understanding some of the economic issues and trends that are impacting Turkish business and in essence, global business. We were also really pleased to have some judges on the panel in the morning as well discussing various developments in Turkish arbitration law,” she said. “The last panel at the conference also highlighted the Alternative Dispute Resolution (ADR) tools, which include mediation, expert determination, and the use of dispute boards. And we really encourage all of those tools. And ICC in essence wants to be this one-stop-shop for parties’ dispute resolution, and dispute avoidance needs, wherever they are in the world. So, we are offering that suite of services,” she added.
Furthering diversity as the first woman president of ICC
Claudia Salomon is the first woman to lead the world’s most preferred arbitral institution in its almost 100–year history. “The focus on diversity in international arbitration is significant because we recognize that diversity and inclusion are key to the legitimacy of international arbitration, that we know that the global business community is extremely diverse. They rightfully have an expectation that they’re the arbitrators in resolving their disputes are diverse. There have been great strides, although there’s still work to be done in the context of gender diversity of arbitrators. But we are focused also on diversity broadly defined. And this, of course, includes race and ethnic and geographic diversity, age, diversity. And also, an issue that I’ve particularly focused on is disability inclusion and international arbitration,” she said. Salomon is also an independent arbitrator, specializing in international, investor–state, and complex commercial disputes. She is widely recognized as one of the leading arbitration practitioners of her generation. Additionally, Salomon is a Fellow of the Chartered Institute of Arbitrators.