From the Rainbow Warrior to investor-state arbitration – Law News speaks with top international arbitrator Gary Born

International arbitration expert Gary Born has been visiting the country recently as part of the Arbitrators’ and Mediators’ Institute of New Zealand (AMINZ) conference, which this year took place in Queenstown earlier this month.

Gary Born

The theme of this year’s conference was “Dispute Resolution on the Edge” – something Mr Born is well-qualified to speak about, having been at the leading edge of international arbitration for many years. As a partner at the London office of US law firm Wilmer Cutler Pickering Hale and Dorr LLP and Chair of its International Arbitration Practice Group, he heads a team of 70 people and is widely regarded as the world’s preeminent authority on international commercial arbitration and international litigation.

Mr Born has participated in more than 600 international arbitrations under all leading institutional rules, including four of the largest ICC arbitrations and several of the most significant ad hoc arbitrations in recent history. He also regularly sits as an arbitrator and has served in this capacity in more than 200 arbitrations.

Law News was fortunate to speak with Mr Born while he was on our shores, and took the opportunity to quiz him about his involvement in the historic arbitration between Greenpeace and the Republic of France (arising out of the sinking of the Rainbow Warrior in 1985), his views on investor-state arbitration provisions in the TPPA and other free trade and bilateral agreements, and his experiences of international investment arbitration generally.

Greenpeace v the French Republic

The sinking of the Rainbow Warrior is an event which still resonates today as a dark day in the history of our country. As every New Zealander knows, the investigations subsequent to the incident exposed the involvement of the Republic of France in the tragedy, leading to much outrage and media coverage worldwide.

For Mr Born, the arbitral proceedings which came in the aftermath of the incident were his first taste of international arbitration. He represented Greenpeace and helped secure for it a substantial sum in compensation for the destruction of its vessel. By anyone’s standards, it was a noteworthy case with which to commence one’s career, and despite (or perhaps because of) its several unusual aspects, Mr Born describes it as a “chief contender” for the “highlight of his career” case.

“It was a unique experience – it wouldn’t matter if it was your first arbitration or your last arbitration. It was different for many reasons – because it was a claim against a state under international law, because there was a specially-created tribunal just for this case, because of the popular interest that the incident generated (not only in New Zealand but internationally), and also because there were lots of interesting legal issues for the lawyers.

“At the beginning, it involved a detective story of sorts, as no one initially knew who the perpetrators were. Once the French eventually acknowledged that they had been involved and expressed a measure of desire to make reparations, negotiations could begin. However, although in principle they were prepared to pay compensation, there was a fairly wide disparity in terms of what the amount should be, so that was the principal issue in the arbitration.”

Obviously, it is hard to talk of “satisfaction” with a negotiated outcome in this kind of situation. But Mr Born considers that, to the extent possible in the circumstances, both parties were in accord with the outcome that was ultimately achieved.

“It’s a qualified ‘yes’. The result produced acceptance – the French paid and Greenpeace didn’t pursue further claims. On the other hand, the tribunal recognised that you can’t entirely repair things after an event like that and that there are definitely limitations to the legal process – it was ultimately a very fundamental international wrong and someone died as a result of it. However, I think that both sides thought the result was fair and neutral and that the legal process did as well as it could.”

Investor-state arbitrations under free-trade/ bilateral investment agreements

As Mr Born has been involved in many investor-state arbitrations under all manner of international agreements, we wanted to know what he thought about the investor-state arbitration chapter of the TPPA which has been big news here recently – and not all of it positive.

Mr Born stressed that any means of dispute resolution is “a kind of damage control or damage limitation”. International investment disputes involving claims against states and/ or governments can present “especially difficult issues”, he says. On the whole, he considers that arbitration has done a reasonable job of resolving disputes in this context – “better than the alternative”, in any event.

“There is no perfect way to resolve international disputes – that was true for the Rainbow Warrior case and it is also true in international investment and international business disputes. These kinds of disputes are, by their very nature, destructive rather than constructive. They detract from productive enterprise, so there is a real interest in getting them resolved in the fairest, most efficient way possible.

“The objective of international arbitration is to provide a form of dispute resolution that is genuinely neutral, whomever the dispute is between. A process that allows both parties – the investor and the host state alike – to put their claims and defences in an international, neutral and reasonable expert proceeding is the best way to resolve such disputes.

“There have been 400 or so investment dispute arbitration awards reported. Although one can find fault with any body of decisions that is that extensive, most observers, when they step back from that body of precedent, acknowledge that the outcomes arrived at have been fair and sensible in the overwhelming majority of cases. Investors prevail in some of the cases, but they also lose in a substantial amount of cases. And in about one third of cases, the parties manage to find a compromise.”

As for the criticisms that have been expressed about the efficacy and appropriateness of these kinds of mechanisms (for instance concerns raised in the 2012 open letter from international jurists to TPPA negotiators that the protection of interests of transnational corporations might be “prioritised” over the right of states to regulate and govern their own affairs – see, Mr Born’s view is that some of these concerns may have been overstated or taken out of context.

“It is important to remember that every country in the world these days, from large countries such as the US and China down to smaller countries like New Zealand, is already subject to important international law obligations and restrictions. For example, New Zealand is already bound by the UN Charter and a huge number of other treaties on things as diverse as trade, human rights, the environment, international criminal matters, etc. No country is an island – we are all bound by countless international bridges which countries have chosen to build for very good reasons and because they bring important benefits.

“The unstated starting point of the sovereignty criticism is that, without the TPPA, countries would be in splendid isolation, free to govern their own affairs as they wish. However, this is not true for any country – countries all over the world have already collectively agreed on international solutions.

“The TPPA is by no means unique in imposing international obligations, and in many ways is much like other agreements that have already been entered into by contracting states. It is not unusual to conclude these types of agreements – it is part and parcel of living in today’s international world.”

Furthermore, he considers that the good reputation of New Zealand’s legal and regulatory systems stands us in good stead under these types of agreement.

“Whereas some countries have serious domestic issues with protectionism, the competence of the judiciary, issues with the legislature and other challenges, New Zealand fortunately has an exceptionally good record in those areas and in protecting both foreign and local business interests – meaning it is already very likely to satisfy the international commitments it has entered into.

“Conversely, it is very important to keep in context the benefits it can bring – New Zealand is undertaking these commitments but other countries are at the same time opening their economies to it. And given that New Zealand already does the things it is promising to do, in that sense the TPPA is a win-win.”

The importance of listening

Mr Born attributes much of his success in the course of being an international advocate to an early appreciation of the importance of listening.

“A very important part of being able to persuade a tribunal is listening to their concerns and questions. It is not just about what you say to them but what they are saying. This is important in any adjudicated process, but especially in the international context, where the parties are coming from completely different backgrounds – potentially with different languages, cultures, ethnicities and legal systems.

“It is essential to not assume you know the answers, or even the questions for that matter – you have to listen really hard to know what’s critical and essential to the parties and to those making the decisions.”

And that is probably good advice for us all.

Contact Us
Phone 09 303 5270
Fax 09 309 3726