"The AIFC’s International Arbitration Centre: Objectives and Reality"
Wilder Alejandro Sanchez and Lucia Scripcari
International Policy Digest
17 March, 2019
Originally published:
https://intpolicydigest.org/2019/03/17/the-aifc-s-international-arbitration-centre-objectives-and-reality/
The IAC at a Glance
The International Arbitration Centre aims to present itself to
potential clients as a 21st-century international standard arbitration
and alternative dispute resolution entity. Hence, it comes as no
surprise that its new headquarters will be located in what was once the
Expo 2017 centre
in Astana. In an interview with the authors, the Registrar and Chief
Executive of the IAC, Mr. Christopher Campbell-Holt, explained that the
Centre’s brand new headquarters will cover nine thousand square metres
of space, with 15 or more meeting rooms, in addition to private
conference rooms, as well as state-of-the-art technology including video
conferences so that IAC arbitrators and staff can easily communicate
with clients around the world.
The AIFC is intended to assist Kazakhstan to become the “hub” for
business in Central Asia, in addition to attracting business from
European and Asian markets. Any geographical challenge for businesses in
dispute from distant markets will be overcome by the IAC’s
state-of-the-art technology, including an
eJustice Project
which was launched in late February 2019. This is “an online portal
that enables parties to file cases at the AIFC Court and IAC
electronically from anywhere around the world without having to be
physically present in Astana. It can assist with the management of full
end-to-end electronic processing of legal documents and administration
in cases.”
The IAC’s chairman,
Barbara Dohmann QC,
is an internationally renowned arbitrator and commercial litigator with
professional experience at the ICSID, LCIA, the London Metal Exchange
(where she is a member of the Arbitration and Arbitration Appeals
Panel), the Paris International Chamber of Commerce, and the Hong Kong
International Arbitration Centre.
As for the arbitrators themselves, they consist of more than
30 professionals from across the world.
Mr. Campbell-Holt explained that this is a multinational team of legal
professionals by design, as the IAC wants to send a clear message that
its services are available to both a Central Asian and extra-regional
clientèle. Thus, it is important that the IAC’s arbitrators have
different cultural backgrounds and languages so they will be more in
tune with the customs and traditions of the IAC’s clients. Moreover, the
multinational composition of the IAC’s arbitrators sends a message to
potential clients that this is an arbitration centre that will serve all
parties impartially and neutrally independent of the Kazakhstani state.
In addition to the IAC Chairman who is a woman, out of the 28
arbitrators at the IAC, 23 are men and five are women. Mr. Campbell-Holt
explained that the arbitrators were chosen because they are all
professionals that can offer world-class service, and there are plans to
expand this list in the near future. He also highlighted that its staff
includes six Kazakhstani citizens, five of whom are female.
A Modern and Efficient Arbitration Centre
It is important to stress that with the establishment of the AIFC’s
IAC, Kazakhstan has created a unique centre for dispute resolution in
Central Asia, given how this new entity provides a more efficient forum
for dispute resolution than anything else the region currently
possesses. This is best demonstrated by the fact that the IAC’s
arbitration regulations are based, among others, on the United Nations
Commission on International Trade Law (UNCITRAL) with some influence
from the English Arbitration Act. The combination of these two models
creates a predictable legal framework that can provide confidence to
parties considering arbitration as to the efficiency of the proceedings,
should they choose to utilize the IAC’s services. Moreover, Kazakhstan
acceded to the New York Convention on 20 November 1995.
Furthermore, the IAC offers parties flexibility in choosing the rules
and procedures which they wish to utilize to resolve their disputes.
For example, parties may agree that the IAC will administer their
arbitration according to the IAC’s own Arbitration and Mediation Rules
(2018). These rules include procedures for the resolution of investment
treaty disputes and expedited arbitrations for disputes with amounts of
less than $5 million and amounts of lower value at the discretion of the
parties, according to Mr. Campbell-Holt.
Additionally, while only a limited number of arbitration rules (such
as the ICC, the ICSID, the ICDR, and the SCC Rules) deal with the
parties’ need to obtain urgent protective measures before the
constitution of the tribunal, the AIFC’s international arbitration rules
have adopted rules concerning Interim Relief through Emergency
Arbitration, along with other up-to-date rules and procedures.
The enforcement of arbitral awards as well as of interim relief once
ratified by the AIFC Court, an independent entity headed by the Rt. Hon.
The Lord Woolf CH, a former Lord Chief Justice of England and Wales,
and staffed by former English common law judges and lawyers, will be
subject to a writ of execution order issued by the Court itself. The
decisions of the AIFC Court are to be enforced in the Republic of
Kazakhstan in the same way and on the same terms as decisions made by
other courts in Kazakhstan. Additionally, the jurisdiction of the Court
will extend to civil and commercial matters. Again, this makes the AIFC,
as a whole, as something unique to the region, as we are not talking
about just an arbitration centre, but a conglomerate of complementary
entities that can help each other to resolve disputes impartially and
expeditiously at minimum cost.
While it is true that Kazakhstan is a unitary state and its
sovereignty extends to its entire territory, an amendment dated March
2017, subsection 3-1, stipulates that a special legal order relating to
financial matters (e.g. the AIFC) may be established within the
territory of Astana in accordance with constitutional law. The
constitutional amendment ensures the highest international standards of
legal procedure, thus providing certainty, predictability, and
efficiency.
Astana Is Betting (Heavily) on the IAC
The AIFC enjoys significant support from the Kazakhstan government.
It is expected that the IAC will in time be very busy given how Astana
is focused on attracting international investors – case in point, the
aforementioned partial privatization of Kazatomprom and the planned
privatization of several subsidiaries of Kazakhstan Engineering. Hence,
the diversity and experience of the IAC’s arbitrators will be a critical
factor to ensure that potential clients regard this entity as neutral
and professional.
A final factor that will influence the success of the IAC beyond
Kazakhstan’s borders has to do with the country’s foreign policy. Astana
enjoys good relations with other Central Asian states – including
Uzbekistan. Kazakhastani foreign policy will, ideally, contribute to a
greater IAC involvement in arbitration cases in neighboring states.
Final Thoughts
The AIFC’s IAC’s goal is straightforward: to become the arbitration
system of choice not only for Kazakhstan, but for all of Central Asia,
and maybe beyond. We have highlighted the major areas of interest
relating to the IAC: it aims to be as flexible as possible in order to
adapt to the needs of its clients, this includes the e-filing of cases;
the AIFC has adopted English Common Law although the parties may agree
to apply any law, civil or common, at the IAC; and it has a
multinational list of arbitrators. As this is a new international
arbitration centre, potential clients must be reassured that they will
receive just and professional treatment.
As the AIFC commences its second year of operations, it will be
important to monitor how potential clients look at this new Central
Asian financial hub, and the confidence they have on its many entities
and interests, including the International Arbitration Centre.
W. Alex Sánchez is an analyst who focuses on international security and geopolitics.
Lucia Scripcari is a Moldovan student finishing her degree in Law at Istanbul Sehir University (Turkey).
The views expressed in this article are those of the authors
alone and do not necessarily reflect those of any institutions with
which the authors are associated.
