In this feature, we look at the Caribbean's progress in the world of alternative dispute resolution, as some jurisdictions position themselves as centres for international arbitration.
Caribbean international financial centres (IFCs) are more than simply attractive places to seal a business deal over lunch at your favourite beachfront restaurant. These jurisdictions are positioning themselves to be venues for the satisfactory and efficient settlement of disputes when business deals go awry.
International arbitration - where parties to a dispute elect for an arbitral tribunal to privately settle disputes between them without recourse to courts of law - has become a preferred dispute resolution method for claims arising from cross-border business transactions. Statistics published by the major international arbitration centres reveal a general upward trend in arbitration filings , and agreement to arbitration has become commonplace in international commercial contracts.
Many factors account for the growing popularity of international arbitration, whether institutional or ad hoc. Parties avail themselves of a neutral forum and have greater flexibility and control over the proceedings than they would litigating before either party’s domestic courts. Parties can select arbitrators with specialist knowledge, which is especially valuable in highly technical commercial disputes.
The optimists among us look for “silver-linings” in these challenging times. One of these is affirmation of our capacity for innovation and adaptation as individuals and businesses, and our societies have adjusted, and innovated in response to the dramatic restrictions imposed on our way of life.
However, adaptation is not possible without the flexibility to achieve it. And flexibility is the hallmark of dispute resolution through arbitration. By contrast, courts are innately conservative and inflexible, with byzantine procedural rules and outdated traditions.
With the leading offshore financial centres (OFCs) promoting themselves as international arbitration centres, the Covid-19 pandemic provided an opportunity to showcase the advantages of arbitration as a form of dispute resolution.
The response of offshore courts to the pandemic varied between the various jurisdictions but in all cases were effectively shut down for several weeks, in some cases months, with only the most urgent applications being accommodated. Consistent with the traditional hierarchy, local bars were kept up-to-date with directives telling them what could and could not be done.