AustLII Home | Databases | WorldLII | Search | Feedback

Legal Education Digest

Legal Education Digest
You are here:  AustLII >> Databases >> Legal Education Digest >> 2007 >> [2007] LegEdDig 45

Database Search | Name Search | Recent Articles | Noteup | LawCite | Author Info | Download | Help

Nottage, L --- "International Arbitration and Commercial Law Education for an International World" [2007] LegEdDig 45; (2007) 15(3) Legal Education Digest 19

International Arbitration and Commercial Law Education for an International World

L Nottage

[2007] LegEdDig 45; (2007) 15(3) Legal Education Digest 19

Legal Stud Research P, No. 07/84, November 2007, pp 1–24

Education systems world-wide are under growing pressure to reform. One impetus comes from changing demographic trends, often an aging population (as in Japan and Australia), but also greater cross-border mobility (including both shorter-term students and longer-term residents). A second cause of pressure is a shift away from strong forms of welfare statism; meaning education is seen more as a private investment in human capital and possibly a strategic public good, rather than a broader public good. A third factor prompting education reform is global economic liberalisation, requiring domestic institutions to offer new forms of training for those allowed to engage in new cross-border activities, as well as allowing institutions from abroad to more readily access education services markets that are themselves being liberalised. A fourth impetus for change is the Information Technology (IT) revolution.

Legal education is no longer immune to such pressures. Yet responses in different countries, as in other law-related fields characterised by increased globalisation, are never identical.

On the one hand, globalisation combines with economic pressures to ‘compete’ particularly with greater private delivery of legal education services. On the other, we find resistance from local traditions, attempts by the universities to meet and perhaps still help shape new ‘market’ trends, and their lingering sense of public mission. The field of Alternative Dispute Resolution (ADR) is a fruitful area of study, for this represents ‘private justice’ in tension nonetheless with certain public interests, as well as being a growth area for legal education services in Australia, Japan and elsewhere.

Formally and functionally, arbitration law and practice in Australia can be divided into two spheres. Australia ‘received’ the old English common law, and then largely adopted English arbitration legislation, even when enacting (largely uniform) Commercial Arbitration Acts in its various states in the mid-1980s. A few years ago, New South Wales and Victoria initiated a process to reform their Acts, drawing primarily on the English Arbitration Act 1996, although the process has stalled as those favouring a broader approach have come forward. Preserving the English tradition stems partly from lawyerly conservatism. But it is also seen as supporting the resolution of domestic disputes by arbitration, which (as in England) is still conducted by arbitrators without necessarily much legal training, like engineers in the construction area. However, as in England too, lawyers have begun to exercise more control over domestic arbitration, as advocates as well as lawyers. Indeed, this led to a backlash from the mid-1980s, with a former Chief Justice of New South Wales (Sir Laurence Street) becoming instead a strong proponent of the mediation of commercial disputes — albeit a highly ‘evaluative’, not very ‘facilitative’, form of mediation.

Responding to such criticisms that arbitration was becoming too expensive and especially too time-consuming, arbitration specialists in Australia have begun to urge further ‘importing’ of new techniques and norms developed for ICA (international commercial arbitration) especially from the mid-1990s, aimed at addressing similar concerns raised in cross-border arbitration over the 1980s. In this endeavour, Australia can draw on the Model Law, which it adopted into its (federal) International Arbitration Act in 1990, to be used especially in international arbitrations.

Such a tension should be less of a problem in Japan, since its Arbitration Act 2003 extends the same Model Law regime to both domestic and international arbitrations (as, indeed, under the old legislation), and arbitration has never had as much traction in domestic dispute resolution. However, the tension is important for understanding the development of arbitration teaching in Australia, and perhaps in other Asia-Pacific countries.

On the one hand, since its establishment in 1975, the Institute of Arbitrators and Mediators of Australia has long provided courses to train and accredit its arbitrators, initially especially for domestic dispute resolution. The Australian Branch of the Chartered Institute of Arbitrators (CIArb), founded in England but active worldwide, has a similar focus but may have more potential to develop international dimensions to its programs. The Australian Commercial Disputes Centre (ACDC) was set up in 1986 with the strong support of Sir Laurence Street and the Hon Terry Sheahan (former NSW Attorney-General) in order to promote ADR generally, and continues to provide training and accreditation services. It remains a not-for-profit organisation with some government support, so it is less reliant on fees from memberships or administering mediations, arbitrations and other ADR processes. Indeed, as it has helped foster other ADR organisations and individual ADR suppliers, ACDC’s own caseload of ADR processes administered has declined from around 200 to 30 per annum, mostly mediation and almost entirely domestic cases; and it has specialised its training programs in fields such as dispute resolution involving local governments.

By contrast, the Australian Centre for International Arbitration (ACICA), another not-for-profit body founded in 1985 to promote adoption of the Model Law regime and other measures to establish ICA in Australia, has provided more limited educational opportunities, concentrating on hosting conferences. Filling this gap somewhat, the new Australasian Forum for International Arbitration (‘AFIA’) has begun offering workshops two or three times a year with a focus on ICA, venturing beyond Australia recently to host events in Hong Kong and Singapore. AFIA is aimed more at younger legal practitioners already interested in this area — and often already very proficient, drawing often on experience for many years working in arbitrations overseas as well in increasingly specialised Australian law firms. However, the Forum has no plans (yet) to develop a series of courses leading to accreditation in the field of ICA.

This situation has led to some quite entrepreneurial activity by universities. Several have collaborated with the CIArb to offer arbitration courses leading to accreditation as CIArb arbitrators. These have included Macquarie University, the University of Notre Dame, the University of Adelaide and the University of Queensland. A similar broader initiative is an ambitious postgraduate/accreditation course that I helped lecture in over two weeks in mid-2006 at the University of New South Wales, co-organised by the CIArb, ACICA and ACDC.

Other collaboration has also begun to emerge. For example, the course in ICA offered by Sydney Law School (USydney) now has a major book prize sponsored by the CIArb. More importantly, a large Australian law firm has co-hosted a major International Arbitration Lecture every year since 2002.

Slowly, perhaps more slowly than other less ‘traditional’ law faculties around Australia, USydney has also begun to incorporate more arbitration in its undergraduate (LLB) courses. ICA also forms the centerpiece of the dispute resolution part of my new ‘International Commercial Transactions’ course. Like teachers in US law schools, I have experimented with the order in which I teach arbitration as opposed to other dispute resolution procedures. I always teach some ‘negotiation’ at the start of the course, when we look at international treaties or substantive contract law. But I think it is probably best to later begin the dispute resolution part of the course with a class on ‘cross-border litigation’, since all USydney students have to have done some private international law; then two classes on ICA, showing its advantages over litigation; and finally a class on ‘mediation’.

In addition, USydney is thinking of offering an entire course on (domestic) arbitration. This preference for more specialised arbitration courses, also evident in the US, is probably shared with other Australian universities.

Moreover, ICA courses, especially at larger law faculties (like also UMelbourne), tend to be offered over an entire semester. However, many universities rely on intensive courses. A more recent phenomenon is for intensive courses to be offered to, or with, US law schools running a ‘summer school’ at an Australian university. ICA is regularly taught intensively in the Marquette Law School program offered at the University of Queensland; and I once taught ICA in Chapel Hill’s program at USydney. However, mostly US and foreign students attend such courses.

Despite this comparatively strong tradition in arbitration teaching in Australia, even at universities, there is very little overt reflection on what should be its rationale and guiding features. I agree with the view of Professor Stephen Ware, in the US, that teaching arbitration at universities cannot be primarily focused on ‘teaching students how to be arbitrators’. In particular, I share his view that arbitration law is ideal for nurturing the following ‘fundamental lawyering skills’ promoted by the American Bar Association’s ‘MacCrate Report’ in 1992, which would (and should) be valued by most Australian law faculties too: (1) problem solving; (2) legal analysis and reasoning; (3) legal research; (4) factual investigation; (5) communication (oral and written); (6) counseling; (7) negotiation; (8) litigation and ADR procedures; (9) organisation and management of legal work; and (10) recognising and resolving ethical dilemmas.

Another skill I have emphasised in my ICA course is oral communication, especially in the form of mooting.

Finally, through all this, I believe that university level arbitration education, especially at postgraduate level, has a particular responsibility and opportunity to add a broader perspective on the past, present and future of ICA — and hence law more generally nowadays. As mentioned above, in my ICA course this means stressing two main themes: tensions among (i) internationalisation, domestication, and regionalisation, and (ii) between informality and formality in legal processes. This perspective helps identify links between various central topics in ICA law and practice nowadays, which may be crucial in resolving particular problems (in negotiating or drafting arbitration clauses, arbitral or judicial proceedings, or revising laws or rules of arbitral institutions). But it also encourages students to think about possibly similar tensions and trajectories in other areas of their study and practice of law.

For a topic like ICA — rooted in international instruments, ‘soft law’ and widely shared practices, despite still significant local and regional variants — there is particular scope for institutional collaboration across borders, especially by now turning the challenge of IT into new opportunities for students and teachers. Mostly, these have involved increasingly successful moot competitions, involving teams of students traveling to a venue in one country to participate in mock negotiations and/or arbitrations to resolve substantive commercial law disputes. However, some intriguing recent experiments have used e-mail and video-conferencing to engage students in different countries in the structured negotiation of commercial contracts (including dispute resolution clauses) and (in a recent Australia-Japan initiative) dispute resolution through direct negotiations. In other words, we do not necessarily need to restrict ourselves to areas involving more heavily ‘globalised’ law and practices in order to train the next generation of global lawyers. This paper concludes by suggesting more cross-border courses or programs combining elements of both sets of experiments. Further experiments along these lines may offer the best scope to tease out the trajectory and tensions within the globalisation of commercial law, both procedural and substantive, and thus maintain critical mass at the level of universities seeking to resist outright ‘corporatisation’.

Many will now be familiar with the annual Vis Moot, initiated in Vienna in 1993 in a low-key way by a professor from Pace University (New York) after his retirement from UNCITRAL. Students debate, in mock arbitration settings, issues both of arbitration law (especially the New York Convention and Model Law) and of substantive law, especially the 1980 UN Convention on Contracts for the International Sale of Goods (CISG). This moot has grown into a massive competition, involving around 160 teams (usually of at least four students each) from dozens of countries in 2005, and many hundreds of teachers and practitioners. Interest (and success) has always been strong from universities in Australia, especially those seeking to ‘compete’ with more established law faculties and improve their profile in specialist fields; and a few teams have come from Japan.

Accordingly, experience with CISG should be expanding around the world more than linearly, underpinning further success for the Vis Moot. Escalating exposure to CISG may also help explain why Japan reportedly is finally considering acceding to the Convention.

It may also explain the growing interest in the Vis Moot from the Asian region, where several countries have now acceded to CISG but others will be finding that their private international law rules lead to application of CISG as adopted in those nearby countries.

Another newer development in this region is the Intercollegiate Negotiation Competition (INC), initiated in Tokyo in 2002 also in a low-key way, but by professors and their seminars at two law faculties keen more to collaborate rather than compete at the institutional level. The INC is somewhat of a misnomer in that one round consists of mock commercial negotiations, but another involves arbitration of a contract law dispute under the UNIDROIT Principles of International Commercial Contracts (inaugurated in 1994 as ‘opt-in’ soft law, but with many of its provisions based on CISG).

Another distinctive feature of the INC is that law faculties can send teams to compete in both English and Japanese streams. The English-language ability of Japanese law students has been a significant constraint to them participating even in the Vis Moot (East). Adding an English stream to this Competition, on the other hand, allows Japanese students keen to use or improve their English to compete in that language, as well as allowing for international students to compete more readily. It will be interesting to try to determine if any significant differences emerge in style and outcomes, particularly in the negotiation round (less affected by the third party neutrals managing the hearings), depending on the legal background of students and even on whether they compete in English or Japanese.

Another set of more recent experiments tend to be less ambitious in involving just two universities, but mostly more ambitious in using additional IT to enhance learning experiences. A simpler model is the course taught by the late Professor Mal Smith from Chuo University in Tokyo, who had kept co-teaching a course in ADR in Asia for an international LLM course offered by Chulalongkorn University in Bangkok, which he first became involved in when based at the University of Melbourne.

Other courses have turned instead to IT solutions since the late 1990s. Before Professor Gerald McAlinn moved from Aoyama Gakuin University in Tokyo (AGU) to Keio Law School, he involved his students (as clients) with law students of Professor Arthur Rosett at UCLA Law School (as lawyers) in simulated contract negotiations conducted primarily by email.

More ambitious was the course first offered regularly in 2000 by Professor Dan Foote from Todai, and by various colleagues at the University of Washington (UW) Law School, after he moved from UW to Todai. These parallel courses added client interview simulations and, most importantly, video-conferencing involving joint lectures (by some with extensive experience as practitioners) and especially sessions to advance the contract negotiations between the teams from both sides.

A more recent experiment used similar (email plus high-quality videoconferencing) IT in parallel courses offered at AGU and ANU, but differed in several respects. First, it was designed as an optional part of each university’s course, which in the ANU case was open to both law students and Asian Studies students. Secondly and relatedly, the ANU fielded three teams, to negotiate respectively in Japanese, English, and a mixture of both, with AGU counterparts. Thirdly, it aimed at a more denationalised approach, mixing up roles (buyer/seller, etc) in the respective teams, and making currency a matter for the contract negotiations. Finally, it involved a first phase of negotiations towards reaching a deal (requiring deliberation on sales price, quantity, duration and shipping; but with all teams also ultimately agreeing on dispute resolution clauses); but then an external shock (force majeure, arguably) triggering a dispute and contract renegotiations.

Most of these educational initiatives, completely or (more often) partly involving ADR as an important part of contemporary procedural law and practice, have developed quite spontaneously out of mostly personal convictions and enthusiasm of the teachers involved, and connections among them.

From this perspective, I would like to conclude first by encouraging us all (particularly as procedural lawyers) to think of developing new courses or programs to maximise synergies and benefits, which would cover: (a) contract negotiations towards an initial deal (including major emphasis on dispute resolution clauses, plus background Arbitration Rules); (b) contract renegotiation following some breakdown in the underlying relationship (including ultimately a new or redrafted arbitration clause); then (c) resolution of further contract disputes due to a different breakdown, through arbitration (possibly even combined with mediation).

All aspects, including for the first time (to my knowledge) the last-mentioned arbitration proceedings, would also involve video-conferencing.

The now demonstrated educational benefits for the students justify the extra time and resources that nevertheless will be needed — and hopefully we can persuade our Deans and other workload managers accordingly! This broader-based pedagogical approach is also the area where universities retain their comparative advantage, and indeed their public mission even in liberalising economies, vis-à-vis professional associations and more narrowly commercial suppliers of education services. Particularly by turning the challenges of IT into opportunities to foster collaboration among universities especially across borders, we can all move more effectively into a new era in training global commercial lawyers for the 21st century.


AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.austlii.edu.au/au/journals/LegEdDig/2007/45.html