Navigating Legal Challenges in Data Centre Operations

Data centres are crucial to the digital world we live in. They support everything from storing our photos and files in the cloud to making sure we can send emails across the globe in seconds. But running a data centre isn’t simple, especially when you consider the maze of laws and regulations that come with it. This is where having a great lawyer that understands the data centre industry can make a big difference for data centre owners and operators. We look in further detail at the role our lawyers play in advising datacentres.

Understanding the Legal Terrain for Data Centres

The legal world surrounding data centres is complicated. It covers a lot of ground, from the specifics of property and building laws to the details of data privacy and cybersecurity rules. Add to this the mix of local, European, and international regulations, and it’s clear why expert legal advice is critical.

For example, data privacy laws, especially with the EU’s GDPR, have set strict rules on how personal data should be handled. This doesn’t just affect companies in the EU; it also impacts any company dealing with EU citizens’ data. Knowing these laws inside out is crucial for avoiding legal issues and fines.

Focus on Sustainability and Energy

Data centres use a vast amount of energy, which puts sustainability and energy efficiency in the spotlight. Navigating the legal landscape here is essential for tapping into renewable energy incentives and meeting sustainability goals, such as those outlined in the European Green Deal and the UK’s net-zero emissions target by 2050. For more information on the latest regulations impacting Datacentres see here.

More Than Just Compliance

Commercially minded lawyers do more than ensure you’re following the law. They’re also strategic advisors, helping with growth and managing deals. This includes everything from buying properties, negotiating leases and construction deals, to getting the necessary permits for expanding your data centre. With the growing interest in investing in data centres, having the right legal advice is crucial for making deals, negotiating contracts, and doing due diligence to protect your interests.

Tackling Data Sovereignty and Emerging Tech Challenges

Laws around data sovereignty, which govern where data can be stored and processed, add another layer of complexity, especially for data centres operating across borders. Plus, new technologies like 5G and the Internet of Things are creating fresh legal challenges, from telecoms licensing to questions around artificial intelligence and data ethics.

Leveraging Legal Expertise

Having a great lawyer who understands data centres isn’t just about solving legal problems. It’s about combining knowledge in technology, law, and strategy to help your business stay ahead. It’s about seeing legal expertise not just as a necessity but as a strategic advantage, making sure your operation is ready for the future.

At Conexus Law, we aim to provide comprehensive legal advice that covers every aspect of running a data centre. From planning and site acquisition to construction, leasing, and finance, we have the expertise and industry connections to help you move quickly and efficiently through negotiations and to focus on what really matters. We’re enthusiastic about data centres, their global significance, and staying on top of sector innovations, ensuring our clients are well-equipped to thrive in the digital age.

Exploring the latest developments in sporting venues

As the world of sports evolves, so does the need for state-of-the-art stadiums and arenas. From design and materials to technology and sustainability, the construction industry is constantly innovating to deliver venues that meet the demands of athletes, fans, and the environment. In this article, we will explore the latest developments in sports stadium and arena construction in the UK, Europe and around the world.

Design and Materials

Gone are the days of plain, utilitarian sports venues. Today’s stadiums and arenas are architectural marvels that blend function with form. In the UK, Tottenham Hotspur’s new stadium is a shining example of design innovation. The 62,000-seat stadium boasts a retractable pitch that allows for the installation of a synthetic NFL playing surface for games played in London. The venue also features a glass-walled tunnel that leads from the locker room to the field, giving fans a unique view of the players.

Another trend in stadium design is the use of sustainable materials. Many stadiums are now incorporating recycled materials into their construction, as well as using locally-sourced materials to reduce transportation emissions. The recently opened Allianz Field in Minnesota, USA, is the first stadium in the world built entirely from sustainably-sourced timber.

Technology

Technology has had a significant impact on the construction of sports venues. From augmented reality and 3D printing to drones and robots, innovative technologies are streamlining the construction process and enabling the creation of complex designs that were previously impossible.

One example of this is the new Las Vegas Raiders Stadium in the USA. The stadium features an advanced security system that uses facial recognition technology to monitor fans entering the venue. The system uses cameras that can scan thousands of faces per second and can detect anyone who is on a banned list. This technology not only enhances security but also speeds up entry times for fans. This technology has also been deployed at selected locations near to “high risk” fixtures in the UK for the same purpose but as yet does feature permanently in UK arenas.

Sustainability

Sustainability has become a critical consideration in sports stadium and arena construction. Venues are now designed with energy-efficient lighting, heating, and cooling systems to reduce energy consumption. Many stadiums are also using renewable energy sources such as solar power to reduce their carbon footprint.

In Europe, the Allianz Arena in Munich, Germany, is a prime example of a sustainable stadium. The venue features an outer shell made up of over 2,800 air-filled ETFE cushions that regulate the temperature inside the stadium. The roof of the stadium is also fitted with solar panels, which generate renewable energy that can power the stadium and nearby buildings. The Nef stadium in Istanbul, Turkey recently broke the Guinness World Record for the most solar power output from a sports facility, generating enough renewable electricity to power 2,000 homes.

As sports continue to captivate audiences around the world, the demand for innovative stadiums and arenas is set to grow. Construction professionals are rising to the challenge, using the latest materials, designs, and technologies to deliver venues that are sustainable, secure, and stunning.

Monaco. Conexus Law is coming for you!

Conexus Law is attending Data Cloud Congress in Monaco

Ed Cooke and Nancy Lamb will be there #datacloudglobalcongress meeting current and future clients and contacts.

Please contact Ed Cooke and/or Nancy Lamb for a scheduled catch-up. Otherwise we look forward to seeing you around and about!

Ed Cooke joins the Digital Infrastructure Advisors Panel at Data Centre World London

Day one at Data Centre World London and Conexus managing partner Ed Cooke is joining the Digital Infrastructure Advisors panel discussion hosted by The DCA (Data Centre Alliance)’s Steve Hone. The 30 minute ‘Connecting the Digital Dots’ session starts at 12.25 in the Edge & Future Strategies Theatre and will explore how investors and customers can overcome current security, legal and sustainability challenges. Other panel members, all members of the DIAL advisory board, are Stephen Whatling, CEO Keysource, Stephen Lorimer Technical Director Keysource and
Jim Hart CEO Business Critical Solutions (BCS).

Stephen Whatling, will outline how newly launched DIAL, as a multi-disciplinary advisory team, can support clients. The discussion will finish with a Q&A.

DIAL is specialist group with CEO Mike West, providing a range of advisory services to corporates, investment funds, and owners and operators in the data centre market and the wider digital infrastructure arena. Current projects include private and public facilities, colocation and hyperscale developments across the globe.

To find out more about the Digital Infrastructure Advisors, please contact Ed Cooke.

Nancy Lamb Joins Conexus Law to Launch Collaborative Contracts Service

Conexus Law continues its growth and recruitment drive with the hire of Nancy Lamb, a leading expert in data centre construction contracts.

Lamb, who is known for her straight-talking, no-nonsense approach, offers to understand, negotiate and implement construction contracts to maintain project momentum and avoid expensive disputes. Conexus Law’s managing partner, Ed Cooke, and Lamb will be launching a new and unique service using the latest techniques for collaborative contracting exclusively for the data centre industry.

Ed Cooke; “As a law firm specialising in data centres we need lawyers totally embedded in the sector. A construction lawyer with big law firm experience who has super-niched in data centres, Nancy is one of the best and we’re thrilled that she’s joining our growing team at a critical stage in our development. Demand is soaring for a lawyer with Nancy’s exceptional skills and background. I’ve seen her in action, she gets things done, she delivers results.”

Nancy Lamb trained at Pinsent Masons later joining the firm’s top-ranked Construction Team before moving to Hill Dickinson LLP, also in construction. Lamb moved on from private practice law firms to work in various executive roles for Tyco Fire Product, Sudlows and MiCiM.

Nancy Lamb; “Conexus Law is the right choice for me for many reasons and here are my top two. Ed can see the value I will bring to clients because of my unique insight having worked in both the legal world and on project delivery. Second, the potential is huge. Collaborative contracts are so important because they acknowledge and value relationships – rather than processes – and the start to moving away from the existing adversarial and confrontational nature of construction projects. We can do better than that! A collaborative approach is particularly important in the data centre sector because the pool of stakeholders is so small. I’m looking forward to working with Conexus Law clients and introducing my own connections.”

Conexus Law is recruiting technology and corporate partners while broadening its team of consultants. Since launching 2019, Conexus Law has built a consultancy team that includes Emma Cordiner, data centre real estate expert, and Gavin Johnson, who heads up the firm’s Buildtech team.

Ed Cooke; “We’ve set the bar high on our recruitment standards and it takes a special kind of lawyer to join our team. Big firm experience and a track record in our markets are important because clients expect leading edge advice and outlook. We also need ambitious people, with entrepreneurial flair, who are keen to play their part in growing our firm. There is an exciting future for the right candidates.”

Conexus Law is a unique, challenger brand, boutique law firm advising clients operating at the intersection of the built environment, technology and people.

For further advice on Collaborative Contracting please contact Nancy Lamb via her contact details below.

Nancy Lamb
Main: +44 (0)20 7390 0280
Mobile: +44 (0)7771 877234
[email protected]

Working in the Indian Data Centre Market

In 2020, the Indian Ministry of Electronics and Information Technology announced its draft Data Centre Policy, designed to make the country more attractive for domestic and foreign investment into the data centre sector. In this article, Ed Cooke, Founder at Conexus Law, shares some of his experiences of working on Indian projects including some of the key differences in design and construction contracts.

The vision

The government’s vision is to make India a global data hub, primarily by promoting the data centre sector to give it infrastructure status and creating a benign regulatory environment. Plans also include establishing Data Centre Economic Zones with high-quality power and connectivity infrastructure, water and other utilities, and creating financial incentives, particularly for the use of Indian-manufactured equipment and hardware. In fact, certain state governments, such as the states of Tamil Nadu and Uttar Pradesh, have already announced state-wide policies to encourage data centre development.

Over the past few years, a number of global data centre operators have announced investment partnerships focused on the Indian market. These include the recently announced joint venture between Digital Realty and Brookfield Infrastructure Partners, Yondr’s venture with Singaporean Everstone Group, AdaniConneX (a JV of EdgeConneX and Adani Group), and announcements of hyperscale data centre developments by the likes of CapitaLand, Hiranandani, NTT, and STT GDC. In fact, Mumbai, Hyderabad, Chennai, Bangalore and Delhi are already well advanced as important locations to serve the increasing Digital Transformation among the Indian domestic market and the global communications market. Mumbai, in particular, has been the premier choice for hyperscale developments due to its infrastructure availability and proximate subsea landing stations.

Understanding the differences

At Conexus Law, we have recently been working for US and European based clients on the construction of hyperscale size data centre projects in India. As commercial and legal advisors specialising in technology infrastructure, one of our regular tasks is to help clients enter new markets.

This includes helping them to understand the legal, commercial and cultural differences compared to operating in their ‘home’ environment. We always work with local partners and it is a part of our work that we really love doing.

The Indian legal system is fashioned on English common law, but overlayed with Indian legislation and regulatory laws. Indian court judgments set precedent and so it is important to understand both the legislative and common law context in which you are working.

In our experience, most data centre construction contracts in India are either based on a bespoke form of contract or a FIDIC standard form (usually a Yellow Book). There are also other inevitable regional differences.

Areas to focus on

As an example, labour and the supply chain are a huge and complex area in India and we often get involved in advising clients on their approach to procurement, and to monitoring second and third tier suppliers. Performance security, bonds and third-party guarantees/letters of credit are extensively used on large construction projects in India and we play a role in monitoring these. Also structuring payments against milestones – in particular protections around advance payments – are, in our experience, common in India.

The quality and workmanship – and in particular compliance with local and international codes and standards – is an area of real focus and aligns with detailed staged and integrated commissioning processes. There are also a number of compulsory insurances required in India alongside those which would normally be expected by an international client.

Cultural considerations

When we are negotiating in a different country or culture, we work hard to understand how the approach of our negotiating partner might differ from your own. It is always risky to try to characterise a whole nation or culture by a set of rules and so there needs to be a lot of ‘finding your way’ with the relevant individuals. However, we find cultural frameworks such as the well-known Geert Hofstede index, can be useful as a starting point. For example, through that, we learn that Indian culture scores highly in relation to its appreciation of hierarchy. It is therefore important to establish early on where the individuals we are negotiating with fit and ensure that either negotiations on specific points are conducted at the right level. An alternative is to provide enough justification for our stance to enable the individual to take the decision back to his or her superiors and make a convincing argument. It is quite easy to cause offence by not respecting the hierarchical structure (perhaps by seeking to jump a level in order to get faster resolution of an issue). To the western negotiator who is often time pressured, negotiating can feel like a very slow process but it is important to temper frustrations for the long-term goal. Also remember, as with many Asian cultures, that the term ‘yes’ is often used to indicate understanding of the point being made, not agreement to it. In our experience, this can cause clients great difficulty when they report that an issue has been closed out, only to find it has not been.

In conclusion, investment in digital infrastructure is happening at scale in India and there is a vast amount of further potential in this market. In fact, investment in the Indian data centre market is expected to reach US$8 billion by 2026. There are inevitable challenges in meeting the demand of a very tech-enabled population and business sector quickly enough, with reliable infrastructure to overcome historic under-investment in the region, such as quality construction and availability of highly qualified labour. We are proud to be part of it.

How to Ensure Stadiums are Built on Time

Ian Timlin, head of sport at Conexus Law explains how to make best use of the law to ensure your stadium is built on time, on budget, on spec and generating revenue.

If the mantra “Plan, plan and plan again and build in extra contingency” ever applied, it is in relation to the construction of stadiums.

As Bath Rugby Club are finding out in the Court of Appeal (hearing 5 Oct 2021), you need to start with the basics and establish whether you can legally do all that you want at the site. Bath Rugby Limited (“BRL”) hold a long lease of an area in the centre of Bath used for playing rugby and football, known as “the Rec” and are planning to develop that area. However, the beneficiaries of restrictive covenants in respect of the Rec obtained a High Court ruling in September 2020 preventing BRL’s proposed development. Hence their time consuming and costly visit to the Court of Appeal in late 2021.

In tandem with the above, whilst proper site surveys, scoping of works and funding and budgeting, consideration of any likely backlash to the development, getting all stakeholders on-board, getting the legal agreements in place in good time, having a realistic project programme and contingency on many fronts are required, we explore below other matters that are in our experience are unique to getting your stadium built on-time, on-budget, with satisfactory quality and so it generates revenue.

  • Normal expectations for competitive tendering do not apply. For example, you go out to 6 main contractors for competitive build costs. In our experience, for certain specialised packages of the build (eg seating) all 6 potential main contractors come back with seating prices from the same or say two seating sub-contractors because of the limited supply pool. So how do you get competitive and transparent pricing? You need transparency in the tender process to understand what makes up the pricing of the proposed main contractors’ packages. You may even need to obtain and pass on the results of your own investigations for bespoke packages to proposed main contractors, or adopt a procurement approach which is more akin to management contracting.
  • Very large bespoke packages only available from limited suppliers often need a long lead time depending on other stadia being constructed in your region/continent at any given time. The procurement of the seating package is paramount and must be given early consideration and priority as should complex M&E elements.
  • You must absolutely adhere to the requirements of the sports’ governing body for the stadium’s proposed use/s especially regarding the playing surface and arena configuration requirements or player’s facilities (eg the construction materials and measurements of a running track or dimensions of a football pitch and dressing rooms and hospitality).
  • The views of stakeholders (eg athletes, local residents, governing bodies, disability groups, emergency services, health and safety, hospitality, fans, tv and media, match day or event operations, non-match day revenue generation, future maintenance operations) must be canvassed early to decide what of their views and requirements can or need to be incorporated in the proposed development.
  • In respect of stakeholders, do not underestimate the impact of television, media and smart technology on your stadium. Facilities must be appropriate and future proofed to accommodate television, media and smart technology (eg smart turnstiles and hospitality and food and beverage offerings equipment and offerings) with more than adequate data connectivity.
  • The traditional legal tool to try and get any construction project delivered on time is liquidated damages – a pre-agreed daily/weekly amount to be paid to the employer by the contractor for late completion of the construction project. However, in our experience on a mission critical stadium construction project (eg the London Stadium for the 2012 Olympics), no amount of accrued daily/weekly liquidated damages (however large) is going to compensate for the stadium not being ready for its planned event. The reputational damage to the employer, governing body and contractor plus the costs of moving an event to another stadium does not bear thinking about (eg moving TV, media, officials, competitors, training grounds and accommodation to an alternative existing venue). So creative thinking needs to be brought to bear to this issue. For example, you may not engage the cheapest main contractor on price but the one with the largest reputation to protect and who demonstrates in the tender process the serious steps that it will take to protect its business reputation whatever.
  • Consequently, stadium construction must be subject to the tightest of regular programme management, an understanding of what is on the critical path at all times, accurate, truthful and honest information flows from the contractor to the employer and its professional consultants and vice versa, quick and straightforward dispute escalation and resolution processes. The project culture must be open and collaborative in actions as well as words and be backed up with adequate legal drafting in contractual documents if any party decides to deviate from that path. All team members should understand schedules and deadlines before construction begins.

The state of the art Tottenham Hotspur Stadium which opened late in April 2019 at a reported cost of circa £1billion (seating capacity of 62,850), being a multi-purpose stadium featuring the world’s first dividing retractable football pitch, which reveals a synthetic turf field underneath for NFL games in London, concerts and other events which includes smart tech such as the revolutionary bottom of the beer glass filling in the longest bar in Europe (65 metres), shows how far stadium have progressed and the trials and tribulations faced in their construction.

Contributors to this article were Ian Timlin, head of sport, Ed Cooke, Conexus managing partner and Earle Brady, specialist construction and engineering lawyer. Legal advice in the sports sector includes acting as one of the principal construction lawyers working for the London 2012 Olympic Games and Paralympic Games; and advising two Premiership football clubs over a period of 15 years on construction and engineering projects in and around their stadia and including two significant stadia extension projects.

For further legal advice in the sport sector, please contact Ian Timlin via his contact details below.

Ian Timlin
Main: +44 (0)20 7390 0280
Mobile: +44 (0)77 6742 7332
[email protected]

The Queen’s Speech May 2021 – Legal Update

This year’s Queen’s Speech contained several points that are relevant to our clients and the sectors we operate in. We have pulled together a list of the relevant legislative proposals, some of which were already known about, or carried over from the previous parliamentary session. We will continue to monitor the progress of these and provide timely updates.

ADVANCED RESEARCH AND INVENTION AGENCY BILL

This Bill is about developing the Life Sciences sector so it attracts people and business from across the world. This includes increasing public expenditure on research and development to £22 billion and creating an Advanced Research and Invention Agency which will be focused on funding high-risk, high-reward research and development.

PLANNING REFORM

Reforming planning laws and improving building safety were central to the Queen’s Speech. The change in planning laws to increase the number of new houses being built was announced proposals for areas which will be designated for growth, protection or regeneration, with developments in growth areas being harder for local opponents to block. The speech also made reference to the ongoing overhaul of the Building Regulations system in the UK with The Building Safety Bill still going through parliament.

PRODUCT SECURITY AND TELECOMMUNICATIONS INFRASTRUCTURE BILL

This is designed to ensure that smart consumer products, including smartphones and televisions, are more secure against cyber-attacks, protecting individual privacy and security. It also includes a commitment to the roll out of 5G mobile data coverage and gigabit-capable broadband to support better telecommunications coverage and connectivity.

TELECOMMUNICATIONS (SECURITY) BILL

This will give the Government new powers designed to ensure the long-term security and resilience of the UK’s telecoms networks and infrastructure and minimising the threat of high-risk vendors. It will also strengthen the security and oversight of technology used in telecoms networks including the electronic equipment and software used across the network which handle internet traffic and telephone calls.

ONLINE SAFETY BILL

The Online Safety Bill has been highly publicised and aims ‘to make the UK the safest place in the world to be online’, improving protections for users, especially children, whilst protecting freedom of expression, making companies responsible for their users’ safety online, and supporting a thriving and fast-growing digital sector. This will likely mean working with the industry to ensure there are clear legal definitions of what constitutes harmful online content, setting out the responsibilities that companies of different sizes have to observe and establishing clear codes of practice.

What to Consider if Your Contractor Goes Bust

As a result of the pandemic, we have seen, and advised on, numerous instances where main contractors have downed tools or closed sites. In some cases, this has been a temporary hiatus to construction works as we and our client employers have persuaded or assisted main contractors to return to site. However, we have unfortunately seen occasions where the contractor has gone bust and never returned to site.

If faced with contractor insolvency, we set out below what you need to consider and those matters with which you may need to deal:

If you have a funding agreement, notify your funder of the contractor’s situation. Buy yourself some time with your funder to give you breathing space to work out how any outstanding works are to be completed. Remember that most funding agreements will contain obligations requiring you to provide information (such as news of insolvency) to the funder in a timely fashion.

Immediately secure the site and materials on it. Ascertain what you have paid for in full, what is part paid for and what are contractor or sub-contractor assets on site.

Prepare a detailed valuation of the works and, if you have one, request the contract administrator to undertake a formal valuation. Ascertain the works to be completed (including any defects not yet rectified), revise any works programme (including ascertaining what is on the critical path), calculate the costs to finalise the works, whether extra funding will be required to finalise them and any disputes about the works already existing.

Check insurance coverage and insure the site, the works and check the insurance position in respect of any third party assets to remain on site. The contractor will likely have carried public liability, employers liability, professional indemnity insurance (if providing design) and contractor’s all risk insurance. These may come to an end with its insolvency or termination of the building contract (see below). Decide what insurances you will need in place for the future of the project. Also check any insurances you have in place in respect of the project and whether they require you to inform your insurer of the main contractor’s insolvency.

Check the contractual documentation:

  • Be it a JCT contract, NEC form of contract or bespoke agreements, they should set out provisions for termination on insolvency of the main contractor. Follow the provisions of your contracts to the letter to formally bring your contract with the main contractor to an end, especially where you want to engage a new contractor to finish any works or oversee their completion yourself.
  • Is there a parent company guarantee or performance bond you can claim under?
  • Have the trigger events in such agreement occurred?
  • Do you have any collateral warranties from subcontractors? These may assist you and give you step in rights to take over vital supply chain contracts.

Make immediate checks to ensure that documentation for which the contractor was responsible can be located and is up to date (eg health and safety records, drawings, test certificates, manufacturers’ warranties etc).

Unless commercially imperative, do not make any further payments to any party about the works until you know your full position.

Decide how any outstanding works are to be completed after formal termination of the main contractor’s contract. Generally, the options will be a new main contractor or the employer or a construction manager to manage the existing or new sub-contractors. Agree a new contract with a new main contractor (likely to be on a cost plus basis) or with a construction manager.

Take advice as to whether you have any claims against the main contractor and whether these are commercially worth pursuing.

The first days after a main contractor has entered into some form of insolvency procedure are critical and it will be an intensive time of information gathering and decision making. It is however hoped that you will have seen some of the warning signs that your main contractor may be in difficulty (eg less activity on site, slow or late deliveries, plant or equipment disappearing from site, requests for accelerated payments, programme issues, persistent rumours about the main contractor’s financial position including sub-contractors and suppliers not being paid, late filing or qualified accounts being filed at Companies House and a new evasiveness in communications) before they go bust and you have been able to undertake some pre-planning before their insolvency occurs.

HOW CAN CONEXUS LAW HELP?

If you would like advice on your options where you believe that your main contractor may be in financial difficulties or after it goes into insolvency, please contact Ian Timlin or Ed Cooke whose details are below.

Ian Timlin
Main: +44 (0)20 7390 0280
Mobile: +44 (0)77 6742 7332
[email protected]

Ed Cooke
Main: +44 (0)20 7390 0281
Mobile: +44 (0)7535 123000
[email protected]

Arbitration – Why have an Arbitration clause in your commercial contract?

In recent months, we have written about using mediation and adjudication as dispute resolution tools. But let’s look at another option open to you, when you engage in your commercial contracts.

Below we consider Arbitration, and what benefits it might have for you in resolving conflicts arising from your commercial contracts instead of using Court proceedings.

First, unless a party has agreed to arbitrate you cannot force them to do so. It is a private binding form of dispute resolution conducted before an impartial Arbitration body.

So why have an Arbitration clause in your commercial contracts to resolve disputes?

Well, litigation in England is a public proceeding before a Judge or Tribunal. It is not just public if the dispute eventually goes to trial. For example, many publications/journalists keep a watching brief at the High Court in London in respect of any Court claim issued. They can obtain copies of the pleadings (the Particulars of Claim, Defence and Reply) and often their attachments filed in any Court proceedings on payment of a small fee. This is without obtaining the Court’s permission to do so and without notice being given to any of the parties.

Arbitration is however private and confidential (unless you need to enforce an Arbitration award but even then the minutiae of your dispute is likely to remain confidential). Using Arbitration, it is easier for the parties to avoid damaging publicity and to preserve sensitive commercial information from entering into the public domain.

It also gives the parties greater variety and flexibility in how they resolve any dispute. The parties are free to choose their own tribunal – usually one or three arbitrators from one of the leading Arbitration bodies such as the International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA) or The International Centre for Dispute Resolution (ICDR). That provides focused expertise (factual and/or legal) and you get one panel dealing with all aspects of an Arbitration from the start to end of the process.

Arbitration rules are flexible and streamlined and parties are not bound by national Court rules. Flexibility extends to the choice of law, venue for and language of resolving the dispute. So if your counterparty is based abroad and not keen on English law or the English Courts dealing with any dispute, you could as a compromise suggest that your contract have an Arbitration clause stating, say, that any dispute between the parties, be governed by English law but heard in Geneva[or any other locality you and they agree on], will be resolved pursuant to the ICC Rules with three arbitrators and the language of the Arbitration will be English. That gets around a party not wanting to submit to the jurisdiction of the other party’s local/national court.

The parties are also given autonomy to shape the form and scale of the Arbitration. Arbitrators can be selected by the parties for their familiarity with commercial and trade matters and may not necessarily be lawyers (although at least one on a three member Arbitration panel is likely to be). That circumvents the problem in some jurisdictions of judges not having relevant experience of a particular area.

As a client, you can be represented by lawyers and/or technical experts at an Arbitration hearing and not just limited legal advocates having particular rights of audience in a particular jurisdiction.

An Arbitration award is normally final and binding. The grounds for challenging an award are limited. As such, an appeal of an Arbitration award is difficult and it potentially cuts down on years and years of litigation to different appellant courts.

In some countries, the national courts are over‐burdened and it can take up to 10 years for a matter to come to trial. Arbitrating a substantial dispute usually takes 14-18 months to get to a final hearing. So whilst roughly on a par with the current length of English High Court proceedings getting to trial, the speed of Arbitration can be an advantage when compared to litigating in some jurisdictions.

The New York Convention provides for the enforcement of Arbitration awards. As of March 2021, 168 countries are a party to it and agree to enforce Arbitration awards made in other countries in their country. So Arbitration awards are more widely and readily enforced than Court judgments.

In our experience, the major disadvantage of Arbitration is its cost. Each of the Arbitrators needs to be paid on a hourly rate basis plus the administrative expenses of the Arbitration body setting up the Arbitration and the hiring of a venue for hearings. This is usually opposed to a one off Court fee or relatively low Court fees paid during a Court action (up to and including a trial) and no Court venue charges.

It is also not particularly workable where you want to join third parties into disputes where your relationship with that third party is not governed by Arbitration or you have agreed to arbitrate with that third party using a different Arbitration body/clause to the one in which the primary claim against you is being made.

Arbitration will not be right for every commercial agreement and should be considered on a case by case basis. In respect of high value contracts with international elements (either in respect of one or both parties or the subject matter), it will be worth detailed consideration.

If you would like more advice on whether you should consider having an Arbitration clause in your contract, and the form of it, please contact Ian Timlin whose details are below.

HOW CAN CONEXUS LAW HELP?

For further advice on adjudication, please contact Ian Timlin via his contact details below. Ian has been a CEDR accredited mediator since 2000.

Ian Timlin
Main: +44 (0)20 7390 0280
Mobile: +44 (0)77 6742 7332
[email protected]