London has for a long time dominated as a prestigious international arbitration hub, attracting multi-million dollar cases from the various continents.
The London Court of International Arbitration (LCIA) for many decades was the preferred choice of multi-national firms for the settling of international commercial disputes.
Top legal firms in London also attracted major international commercial disputes from around the world.
In spite of London’s foothold on the global arbitration market, that dominance is fast declining as a result of growing arbitration hubs in Asia and Africa.
A desk analysis of the arbitration market by ADR Daily, indicate that more international corporations and parties are shifting to non-traditional arbitration hubs in Asia and Africa that are offering equally quality services.
More foreign investors are also opting for arbitration by Arbitration Courts and private centres in countries hosting their investments without heading for London.
The analysis also shows that leading arbitration courts and centres in Singapore, Hong Kong, Dubai, Lagos, Kigali and Mauritius have gained momentum and attracting bigger international cases.
An International Arbitration Survey by Queen Mary University and White & Case, released in October 2015, found that “while the London Court of International Arbitration (LCIA) and International Chamber of Commerce (ICC) in Paris still dominated, more businesses now prefer the Singapore International Arbitration Centre (SIAC) and Hong Kong International Arbitration Centre (HKIAC) over the more mature seats of Geneva, Stockholm and New York, representing a significant widening of the playing field.”
According to analysts, a major factor causing the shift from London to the non-traditional arbitration hubs is the high cost of arbitration in London, Geneva and Germany.
Apart from the fact that clients have become conscious of the cost of arbitration whether they win or lose, they are anxious about quality services and expeditious settlement, which the non-traditional hubs are competently offering.
London’s competitive advantage in the use of arbitral legal framework based on the English legal system, which is commonly accepted by international parties, is being overcome by the non-traditional hubs that adopted international and regional arbitration conventions to handle cases.
For instance in Africa, a 2016 analysis of “Arbitration in Africa: Past, Present, and Future” showed that most of the African countries have consciously enhanced their legal framework to support arbitration by signing on to various international and regional treaties, and harmonization their laws.
“While Africa, like its European counterpart, does not have a harmonised arbitration law that applies to the continent as a whole, it is clear that Africa is rapidly improving in one of the most important factors affecting the choice of seat,” the study concluded.
This has offered increased comfort to foreign investors that, in the event of a dispute, an arbitration seated in Africa will be governed by laws that are in accordance with internationally recognized principles.
Some of the established arbitration institutions in Africa that have continue to gain international recognition and also attract major cases, include the Lagos Court of Arbitration, the Cairo Regional Centre for International Commercial Arbitration (CRCICA), Lagos Regional Center (RCICAL), the Cour Commune de Justice et d’Arbitrage (“CCJA”) in Cote d’Ivoire, the Kigali Centre for International Arbitration (KIAC), and the LCIA-MIAC Arbitration Centre (a collaborative union between the LCIA in London, the government of Mauritius, and the Mauritius International Arbitration Centre.
As the certainty of trust in the non-traditional arbitration hubs continue to grow among the global business community, analysts believe it is important for multi-national firms to choose arbitration seats in the investment hosting countries or regions.
According to Austin Gamey, a renowned Ghanaian ADR practitioner, it does not make economic sense for an international firm operating in an African country to spend highly on arbitration in London when that dispute can be competently settled by an arbitration court or centre in that country.
By Nii Adotey/adrdaily.com