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Hogan Lovells research shows global upturn in commercial disputes

07 June 2010

Figures obtained by the International Arbitration practice at Hogan Lovells have revealed a 16% increase in the number of cases brought before the main arbitral institutions across the globe, suggesting that the number of commercial disputes resulting in legal proceedings is increasing in the wake of the economic downturn.

The figures, which compare the number of cases before the leading international arbitration institutions across the globe during 2009, showed that London had seen an almost 30% increase in disputes. The statistics are likely to be seen as evidence that businesses and governmental entities are increasingly turning to alternative means of dispute resolution, as well as traditional litigation, to resolve contentious matters. 
Other key findings were that:

  • Singapore saw the largest increase in the number of cases before its local arbitral authority, the Singapore International Arbitration Centre, with a 61% increase on 2008. However, the picture in Asia was mixed with the Chinese International Economic and Trade Arbitration Association (CIETAC) seeing a slight decrease in cases.
  • In Germany, the Deutsche Institution für Schiedsgerichtsbarkeit (DIS) saw a 40% increase in cases with the total amounts in dispute reaching a record high for that institution of €1.2bn. This was driven in part by an apparent increase in the use of international arbitration by financial institutions.
  • However, London still leads Germany in terms of the number of cases. The London Court of International Arbitration (LCIA) reportedly had 285 cases filed before it in 2009, 121 more than the DIS.
    • The number of matters being decided under International Chamber of Commerce (ICC) rules has increased by 23% over the past year, with nearly 75% of new cases concerning amounts in dispute of over US$1m.
  • The International Centre for Settlement of Investment Disputes, which often deals with disputes arising from oil, gas, mining, electric power and transportation, saw an increase in cases of almost 20% on the previous year.

Speaking about the results, Michael Davison, the London-based co-Head of the International Arbitration practice at Hogan Lovells, says:

"Given the increases across the board, there can be little doubt that more disputes are filtering through following the global economic downturn, and that this trend is evident across industry sectors and geographies. In Europe, London still seems to be leading the way with 285 cases filed with the LCIA in 2009, however Germany has seen the largest percentage increase in cases currently before the DIS, so the picture is mixed. Perhaps of most concern to the European institutions, however, could be the rate of growth that Singapore is experiencing as a centre of International Arbitration. There appears to have been a 60% increase in cases currently before the Singapore International Arbitration Centre, which reflects the institution's increasing importance for the settlement of disputes across involving parties not just in Hong Kong, Korea, China and Japan, but also from the United Arab Emirates and India."

Speaking about the results, Daniel E. González, the Miami-based co-Head of the International Arbitration practice at Hogan Lovells, says:

"The near 20% increase in cases before the American Arbitration Association's International Court of Dispute Resolution is an interesting one not just because of what it says about the market in the United States, but also because this institution is increasingly prominent as the forum of choice for parties involved in disputes in Latin America. Miami in particular is fast establishing itself as a major centre for the resolution of such matters."

The survey collates figures from the London Court of International Arbitration (LCIA), Deutsche Institution für Schiedsgerichtsbarkeit (DIS), the International Chamber of Commerce (ICC), Stockholm Chamber of Commerce (SCC), Singapore International Arbitration Centre (SIAC), Chinese International Economic and Trade Arbitration Commission (CIETAC), American Arbitration Association - International Court of Dispute Resolution (AAA-ICDR) and International Centre for Settlement of Investment Disputes (ICSID) for January to December 2009.  The number of cases shown by the figures do not necessarily represent new proceedings brought in the calendar year.

 
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