J.P. Duffy welcomes Luis Martinez, vice president of the ICDR, and Thara Gopalan, director of arbitration and ADR for the Asia-Pacific region, to discuss the organization and its strategic plans for expansion in Asia. Together, they explore the ICDR’s role in the global arbitration landscape, the opportunities and challenges that lie ahead in this dynamic region, and the potential impact of these developments on the global arbitration community.

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Transcript:

Intro: Hello and welcome to Arbitral Insights, a podcast series brought to you by our international arbitration practice lawyers here at Reed Smith. I'm Peter Rosher, Global Head of Reed Smith's International Arbitration Practice. I hope you enjoy the industry commentary, insights, and anecdotes we share with you in the course of this series, wherever in the world you are. If you have any questions about any of the topics discussed, please do contact our speakers. And with that, let's get started. 

J.P.: Welcome back to the next episode of Arbitral Insights, in which we will discuss the ICDR and its Asia initiatives with Luis Martinez and Thara Gopalan, who are both vice presidents of the International Center for Dispute Resolution, or ICDR. I'm J.P. Duffy. I'm an international arbitration partner with Reed Smith, based in New York, that acts as both counsel and arbitrator in international arbitration seated around the world under a variety of governing laws and arbitral rules. I'm qualified in New York, England, and Wales, and the DIFC courts in Dubai where I previously practiced. I also have the good fortune to be listed on the ICDR arbitrator roster and to regularly sit as an arbitrator in ICDR Matters, as well as acting as counsel in arbitration governed by the ICDR rules. We're very fortunate to have with us today a repeat guest, Luis Martinez. Luis is the vice president for the ICDR, which is the international division of the American Arbitration Association. Luis is responsible for their business development covering the East Coast of the United States, Latin America, the Caribbean, the EU, and the UK. He's co-chair of the ABA's International Arbitration Committee and an honorary president of the Inter-American Commercial Arbitration Commission. He's admitted to practice in New York and New Jersey and is a dual citizen of Spain and the United States. And our third guest today is Thara Gopalan. Thara leads the ICDR in Asia and is based in the organization's Asian headquarters in Singapore. Thara brings extensive experience in commercial disputes to the table. Prior to joining the ICDR, she was a commercial disputes attorney, representing clients in international arbitrations and at all levels of the Singapore courts. Her expertise spans a wide range of industries, and she has a proven track record of successfully navigating complex legal issues, including high stakes to bet the company disputes. So as you can see, we have excellent guests today, and Luis and Thara will be able to tell us not just about the ICDR's ongoing initiatives around the world, but in Asia in particular. So we're really looking forward to hearing their insights. Let me just set the table a bit by talking for a moment about the ICDR for those that aren't as familiar with it. The ICDR was established in 1996 and is the international division of the AAA, which was itself founded in 1926. The ICDR provides dispute resolution services to businesses and organizations around the world in cross-border matters and administers all arbitrations filed with the AAA that have an international component. While it's based in New York, the ICDR has offices in Houston, Miami, Chicago, Los Angeles, and Singapore. And it also maintains a separate group called ICDR Canada for Canadian disputes. The ICDR has some of the most modern rules in the world, which it last revised in 2021. And you can learn more about those innovations in a podcast I recorded with Luis in April 2021 that's available on iTunes, PodBean, and the Reed Smith website. Now, to give you a sense of the scope of the ICDR's caseload, it administered 848 new claims in 2023 with an amount in controversy of 5 billion. So as you can see, they're one of the largest and most active arbitral administrators in the world. And we're really fortunate to have Luis and Thara here today to talk about that. Now, let's jump right in on that caseload and those caseload statistics for a minute. Luis, of the 848 new cases filed in 2023, what were the top three industries represented? 

Luis: Well, thanks, J.P. And it's a real pleasure to join you again on this podcast series and to be here with my colleague from our Asia Case Management Center. To touch base, our statistics are available on our infographics, which we do put one together each year to give some summaries and highlights of our particular caseload. You can find them on our website at icdr.org. But the top three caseloads came in using international arbitration, the ICDR system in the technology sector, the international construction sector, and international financial services. Those are the top three groupings we saw last year in 2023. 

J.P.: Now, Luis, that's interesting to me. I think the third category you mentioned was international financial services. Can you expand on that a bit? Because that's an area that I think is underrepresented in most institutions in the international arbitration space. 

Luis: Sure. They cover a range of different subtypes in the financial sector. There could be cases involving the financing of infrastructure projects. There could be cases involving financial documents in M&A agreements or shareholder agreements. It is an interesting cross-section, and it is an area that we are focusing on, not only in the international sector, but also working with our colleagues in the domestic divisions. So I think that with the construction and the technology caseloads are areas of focus for us. 

J.P.: That's great to hear. Now, Luis, tell me a bit more, too, about the technology sector and the types of cases you're seeing there. 

Luis: Sure. And that has been an expanding caseload for us in the last several years. The largest subtypes of these cases, they include, for example, software system developments. We have cases in related to that with partnership and joint ventures. You could have subcontracting agreements with independent contractors and, of course, licensing disputes. An interesting fact that goes with that is that over two-thirds of these technology cases, they actually settle prior to an award hearing and 28% prior to incurring any arbitrator compensation at all. As you know, we do a great deal at the outset to try to explore any procedural efficiencies. As we covered in the rules, the mediation step is actually obligatory with us unless the parties opt out. We will be amenable, of course, especially if the case falls within the appropriate range, use the expedited rules. So whatever the institution can do to bring the parties together and try to get these things settled at the earliest possible step is something that we try to explore. 

J.P.: That's really interesting. And I guess it's unsurprising to me that the technology sector would be so highly represented in the case statistics, because we really are seeing a lot more cross-border technology transactions, both in software, hardware. I mean, I think all the different facets of the technology sector, which is really, really broad. So that's pretty interesting. What are some of the other industries, Luis, that you're seeing cases come from? 

Luis: The other top leaders that use our rules are the real estate. We have entertainment cases. We actually are the administrators for the International Film and Television Alliance that also has opted to use our rules. Insurance, energy is very important. We have subgroups, by the way, that we've created joint teams internally, combining international and our commercial colleagues to focus on various sectors. So energy, construction, life sciences, financial services are all areas where we're pooling our resources and studying the market and seeing how best to position our domestic and international services. Energy is very important. And I think, you know, the subtopic of that, of course, obviously the upstream and downstream types of disputes, but certainly the ESG-related claims that we're going to be seeing and we're forecasting that that's going to be on the rise, Cases brought to mandate perhaps climate change-related policy or conduct. Cases brought to seek financial redress for damages associated with climate change, etc. And I think the energy sector is going to see a surge on that and probably some other sectors too because it's not limited only to the energy sector. 

J.P.: That's really interesting. And just to circle back on one of the earlier industries you mentioned, it's kind of fascinating to me. I've had the opportunity to sit as an arbitrator and to act as counsel in a few entertainment cases. And that's a sector globally that I think gets overlooked on occasion. People tend to not realize how broad that industry is and how much cross-border activity there is in that industry. So pretty fascinating. 

Luis: It also plays a large part in our history. I mean, as you mentioned, the ICDR was started in ’96, but going far back as 1927, we had a foreign division. And in the 50s, we also worked with the motion picture industry, which really helped us establish offices throughout the country because they wanted to have local offices in many locations where they have theaters. And that really led to our national infrastructure to provide ADR services in the United States.