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ICC Arbitration Conference Celebrating ICC Arbitration Rules Translation into Hungarian: A Bittera, Kohlrusz & Toth Summary

ICC Arbitration Conference Celebrating ICC Arbitration Rules Translation into Hungarian: A Bittera, Kohlrusz & Toth Summary

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Three European law firm partners walk into a Bar Association. No punchline here, just a fascinating look into how these partners came together on a mission to translate ICC arbitration rules into Hungarian. To mark the publication of the translated rules, one partner each from Bittera, Kohlrusz & Toth; LFB Laszlo Fekete Bagamery; and Jeantet – Avocats, brainstormed and co-organised a half-day arbitration conference at the headquarters of the Budapest and Hungarian Bar Associations in Budapest.

More than 60 participants attended from Hungary, Slovakia, Serbia, Austria, France, and Italy, including more than 20 in-house counsels. Consisting of two panel discussions and a fireside chat, the event covered issues ranging from the role of general counsel in arbitration, to efficiency in running arbitration, and evidence and witness management.

Andras Daniel Laszlo, Founding Partner at LFB Laszlo Fekete Bagamery, opened the conference, recalling that the founders of the ICC referred to themselves as merchants of peace, quoting the well-known international commercial arbitration book, appropriately named “Dealing in Virtue”. Laszlo highlighted that these values are in as much need of promotion today as they were after the first world war and expressed his hope that the publication of the ICC Arbitration Rules in Hungarian might be a little building block in the process.

The official introduction from Hjordis Birna Hjartardottir (Counsel at the ICC International Court of Arbitration) was followed by a discussion on the role of general counsels in arbitration procedures. Ioana Knoll-Tudor (Partner, Jeantet – Avocats, Paris), discussed recommended practices for handling disputes – as well as avoiding them – with Michael Mcilwrath (Chair of the Governing Body for Dispute Resolution Services at the ICC International Court of Arbitration).

Mcilwrath, a seasoned expert with over 22 years’ experience as an in-house counsel in charge of international disputes, is also the founder of MDisputes in Florence, Italy. He encouraged using the model ICC clauses to their fullest potential and relying on them as a time-saving solution instead of agonising over potentially convoluted self-drafted clauses.

Knoll-Tudor and Mcilwrath also agreed on the importance of leadership and teamwork for in-house counsels, particularly in the pre-arbitration phase. The value of having everyone on the same page right from the start is often overlooked. Deep involvement in all elements of the arbitration procedure is also critical, meaning that in-house counsels are involved in all correspondence and are present at the Case Management Conference, ensuring their full support every step of the way. Mcilwrath further encouraged adding a mediation phase in arbitration clauses, enhancing the possibility of a productive negotiation before initiating arbitration. Most arbitration rules, including the ICC’s, have a model mediation-arbitration clause that is easy to include in contracts.

After a short coffee break, the conference continued with the first panel, investigating the requirements of designing and running an efficient ICC arbitration (moderated by LFB Partner László).

Referring back to Mcilwrath’s advice of sticking to model ICC clauses, Professor Istvan Varga (Chair Professor, Civil Procedure Department at Eötvös Loránd University, Budapest) began by talking about a recent award rendered in a case with a hybrid HCCI/ICC clause. Commentators both from the panel and the audience agreed that hybrid clauses are risky and should be avoided, while the award (which was sustained in annulment) shows the high level of sophistication of Hungarian arbitration practice and the pro-arbitration stance of the Hungarian courts.

The panel then moved on to the topic of choosing outside counsel for international arbitration, led by Pál Kara (Chief Legal Advisor, MOL Group, Budapest), and discussed whether international, full-service firms, or boutiques specializing in international arbitration are more suitable. While there was no clear-cut or sweeping answer, it was a lively debate that highlighted the challenges posed by the huge volume of complex international arbitration cases, particularly in certain industries.

Covering tips and tricks for appointing arbitrators, Marianne Kecsmar (Partner, PKM Avocats, Paris and Member of the ICC Court) detailed the particularities of the ICC procedure as opposed to other arbitration institutions. Commentators noted the ICC’s uniquely wide pool of arbitrators, enabling it to appoint the best fit in situations where the parties can’t agree. As for whether one should always appoint an arbitrator qualified in the applicable substantive law, the panel was divided.

Michal Kocur (Managing Partner, Kocur and Partners, Warsaw) summarized his principles for devising and conducting an efficient arbitration in terms of cost and time. These principles included the fact that good rules must be adopted both at the very outset of the procedure, as well as at the case management conference, and must be included in the terms of reference. Those rules must subsequently be strictly enforced, and arbitrators must not succumb to due process paranoia.  In the ensuing debate, the panel agreed that the active involvement of in-house counsel at the initial stage of the procedure can substantially increase the chances of having an efficient procedure.  

The second panel was moderated by Milan Kohlrusz (Partner, bktp) and included a round table discussion between Mark Baja (Legal Director Hungary, Microsoft), Peter Ban (Director of Legal and Compliance, E.ON Hungaria), Peter Mittak (Head of Legal Division, Egis Pharmaceuticals Plc), and Dr. Peter Henning (Legal Counsel, AviAlliance GmBH).

Opening with a further discussion of Mcilwrath’s earlier statement, the panel debated whether the ICC’s model clause remains a boiler plate, or if parties these days tend more to have strategic views, particularly on aspects such as the taking of evidence, the language of the documents, experts, witnesses, etc.

Moving on to the topic of expert witnesses, the panel discussed how in-house counsels are involved and make decisions in this regard. They concluded that in many cases, while they rely on external counsel, in-house counsels often also send employees to provide information to the experts.

The panel further agreed that most in-house counsels preferred party-appointed experts to one appointed by the tribunal. The general view was that it is not only less expensive, but also that they may have some control on the questions and issues to be covered by the expert. It is also still possible for parties to have their own experts to review and help counsels in addition to the expert appointed by the tribunal, however this option would incur even more expenses.

Members of the panel also agreed that it is not easy to find an expert who has the relevant depth of knowledge on specific industries, or who will fully understand the company’s culture. 

In terms of legal experts, the panel agreed that, while it’s quite a rare requirement, all members were in favour of appointing them when necessary, particularly in situations where a legal expert would add more value and expertise than the external counsel alone.

By Bittera Kohlrusz & Toth

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

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The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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