Michael McIlwrath, Global Chief Litigation Counsel for GE Oil & Gas opened his recent article An Unamicable Separation: Brexit Consequences for London as a Premier Seat of International Dispute Resolution in Europe with the following quote, attributed to the most prolific of all authors, ‘unknown’:
“I try not to think of divorce as failing at marriage but rather winning at bitterness and resentment.”
It’s hardly the first time that an author has reached for a marriage simile when describing the messy UK/EU relationship, but McIlwrath’s particular area of nuptial difficulties is the connection between the settlement resulting from the pending Brexit negotiations and London’s attractiveness as a seat of arbitration.
As with all things Brexit related, the concern does not result from any concrete expected outcome, but rather the uncertainty of the subsequent framework – and the rancorous climate in which the negotiations are taking place. As the author notes: “Although the future arrangement might soften the negative feelings over separation, the sense of trust will inevitably be diminished.”
At a legal crossroad
Reading the article one is struck by the similarities in ground covered by Lord Thomas, the Lord Chief Justice in his Bailii lecture in March 2016. From the text of that, it seems that not all interested parties will mourn a decreased role for the UK as a global arbitral seat. Musing on the historic influences bleeding over from arbitral proceedings into the development of domestic commercial law, his Lordship concluded by saying;
“My view is clear. In retrospect the UK went too far in 1979 and again in 1996 in favouring the perceived advantages for arbitration as a means of dispute resolution in London over the development of the common law; the time is right to look again at the balance”
Brexit therefore provides a legal crossroad; in line with the buccaneering rhetoric coming from certain on the UK political field there may be the opportunity to aggressively become – as Mauritius, Singapore, and Hong Kong have been doing – an attractive, ‘near-shore’ arbitral centre. Or it may be a chance to withdraw, and in the best tradition of taking back control, redraw the procedures of the commercial law in order to put the UK courts back firmly in charge.
A new beginning?
In any event, as McIlwrath notes, in the shorter term, the uncertainty opens up the UK to predation. Showing an admirable consistency with the matrimonial imagery, he notes that “Brexit opens the door to suitors for London’s arbitration business”.
Lord Thomas’s vision of a re-balancing of influence may have to wait therefore; UK law makers may find themselves too preoccupied with keeping hold of the house, the dog and the really nice bedding to worry much about the balance of power between the common law and the lex arbitri.
Written by Peter Boyle.
Peter Boyle is currently pursuing an LLM in Public International Law at the University of Kent in Brussels. A UK native, he has been resident in Belgium since 2013.