Editor: Please describe your background for our readers.
Davidson: Until I retired at the end of 2003, I had spent my entire legal career at Baker & McKenzie, where eventually I became co-head of the litigation group in the New York office. I came to JAMS, both as executive director, which takes up a bit of my time, but primarily as a full-time arbitrator and mediator. Since joining JAMS, I have been appointed to deal with a broad variety of disputes across many commercial disciplines from accounting and financial markets matters to insurance coverage issues, construction, intellectual property, securities, tax and telecoms, and oil and gas disputes sited in most major venues of the world.
Editor: You have also been called upon by other dispute resolution administering organizations.
Davidson: Yes. I am fortunate to have served in disputes administered by many, ranging from the ICDR, the AAA, CPR, the ICC, CIETAC in China, the Hong Kong International Arbitration Centre and many ad hoc matters. I find, now that I don't have client responsibilities, I can organize my calendar to more effectively use my time, especially when I serve as a sole arbitrator. Now that JAMS has opened its first international ADR center, the internationalization of the practice will most definitely expand.
Editor: What do you see as the main questions facing the arbitral process, practice and acceptance today?
Davidson: The most pressing are the interrelated issues of the time and cost of arbitration. We are being challenged on one of the mantras of arbitration - that it is faster and cheaper than litigation - especially in international proceedings. I still very much believe by the way that an experienced arbitrator can move a matter to resolution much more expeditiously than a national court and with far less expense, even accounting for the arbitrator's fees and the fees of an administering provider organization.
Editor: Tell us more on the subset of the question of time and cost with respect to e-discovery in arbitration.
Davidson: I see it as less of a problem in arbitration than it is in a U.S. federal court.
Editor: Why so?
Davidson: I think the formal nature of the Federal Rules are less conducive to a quick, efficient resolution of these issues. The arbitration rules on e-discovery appear as guidelines, so parties can most always avoid the considerable expense of broad e-disclosure provided that the arbitrators are trained so they are not only sensitive to the issues, but really understand what e-discovery is all about.
Editor: Does JAMS focus on this in training arbitrators?
Davidson: Yes. We train our arbitrators at least once and usually twice in the course of a year. We have a full-day session, part of which is devoted to e-discovery. We also have ongoing practice development calls. The goal is to keep everyone on top of the technical information so that they're capable of resolving these things fairly.A lot of it is technical. I think if you gave a questionnaire to most average lawyers or arbitrators, they would not do very well on electronic discovery issues.
Editor: Unfortunately, you're right.
Davidson: With proper training, it is far less of a problem. It certainly scares the daylights out of our brethren overseas who see it as one more annoying and expensive stratagem of the American bar, but the process is not well understood. I heard a presentation at a conference in Vienna a couple of years ago by a lawyer practicing in London, in which he made a rather good case that electronic discovery in arbitration is really our friend. If you, for example, have a claim about defective widgets and you think that communications between Smith and Jones during the month of October 2007 were important, nowadays you don't have to send two associates to rummage through 50 boxes of documents or six file cabinets, you can simply ask for all the e-mails between Smith and Jones in October 2007 that contain the word "widget." So it's a matter of really focusing in an intelligent way on the issues that count and educating arbitrators and counsel that there is less to fear than meets the eye.
Editor: Certainly, with some technologic help, one can go through a massive amount of material if it's all stored electronically.
Davidson: Lawyers who have been dealing with the IBA Rules on the Taking of Evidence essentially do targeted discovery in a non-electronic fashion. Under those Rules, you have to use a rifle and sometimes one with a telescopic sight, not a shotgun. The same should hold true for e-discovery.
Editor: It works pretty well when you've got serious parties opposing each other, but in some jurisdictions it is still: "You show me a copy of the document you want me to produce and I'll see if I have it."
Davidson: Right. It doesn't work in all cases.
Editor: Tell us what your recent experience has been in terms of access to the courts in support of arbitrations, such as Section 44 applications under the Arbitration Act in England.
Davidson: Well, as an arbitrator, I would not see very much of this unless it impacted upon a case in which I was sitting and then I would be presented with a court order that I would obey. Internationally, while I have two ICC cases pending in London, neither of those have involved any of these kinds of preliminary matters. I have two cases now before the Hong Kong International Arbitration Center, which I find to be another very friendly forum without any hint of interference by the local court system. An application for preliminary relief was made to me directly in one of the cases. I've had an arbitration in China under the CIETAC rules and have had very good experience there as well. CIETAC panels are, I believe, reluctant to entertain applications for interim or preliminary relief, and I have rarely heard of a pre-award court order impacting a pending arbitration. One reason is the practical problem of enforcement.
Editor: Jerry Cohen gave a talk at the American Foreign Law Association a few years ago, and, after all his years of promoting rule of law in China, his was a rather bittersweet comment on an arbitration in which he had participated. Essentially, the award was ignored by the respondent and there was no available judicial assistance for enforcement or collection.
Davidson: I've heard Jerry speak on two occasions at China conferences sponsored by Juris Publishing. He made similar observations. He's also disappointed, as many people are, over the arrest and detention of the former head of CIETAC. I'm moderating a panel at the ABA International Law Section meeting in Miami in October on arbitration in China exploring whether a non-Chinese party can get a fair shake and an enforceable award. On my panel will be the head of CIETAC, the chairman of the Hong Kong International Arbitration Center and the secretary general of the Beijing Arbitration Commission. I think it's the first time that these three people will have appeared on the same podium to speak about these issues. We'll have a couple of practitioners as well, so it has the promise of being a lively and timely discussion.
Editor: That sounds terrific, if people are willing to be diplomatically frank.
Davidson: I certainly hope so. I know all of these people now, and I think we can press them with hard questions. It should prove to be very interesting. The ABA has given us 90 minutes, which is more than the usual time, and I'm looking forward to it.
Editor: Do you see a change in China's attitude toward the arbitration of international disputes?
Davidson: There have been some empirical studies on awards in China, some of which we're going to reproduce for purposes of this ABA program.One study is ongoing by a professor at one of the New York area law schools.His preliminary findings are that Chinese nationals do not prevail in a disproportionate number of cases that involve foreign companies.
Editor: That's encouraging, but the Rio Tinto affair has been something of a public relations black eye for China.
Davidson: Yes. All we can say is that we hope that the positive trend in arbitration cases continues. Certainly the people with whom I have dealt are acting professionally and in good faith. The CIETAC proceeding that I sat in was, in my view, completely fair.
Editor: The change in attitude toward arbitration in Latin America over the past 30 years has been dramatic. In general, the countries have moved from a strict Calvo Doctrine position to a willingness to pass legislation promoting arbitration. There seems to have been a tacit recognition that the local courts do not present a reliable, impartial way to resolve investment and other commercial disputes.
Davidson: I think that's correct, and I think there's something else going on.Whatever the world's experience with international arbitration, whether good or bad in any particular case, the process has generally received favorable reviews. Arbitrators, especially those that operate under the auspices of the well-known institutions, are believed to be honest and fair. I think that's the major reason why the procedure is viewed favorably. The New York and ICSID Conventions indirectly and effectively address the twin fears of political bias and corruption in litigating in some national courts.
Editor: You really don't hear of arbitrator misconduct.
Davidson: Not dishonest conduct. The complaints tend to be that the arbitrator may be slow or not too bright, or perhaps he or she may be overly expensive and insistent on writing a long and overly scholarly award, but very rarely do you find suspicions that an arbitrator was corrupt. By contrast, lack of complete disclosure is an ongoing concern.
Editor: Please tell our readers what you think of the recent attacks on bilateral investment treaties and ICSID, the World Bank's dispute resolution facility, especially after the Argentine pesification cases and Ecuador's withdrawal from its BITs.
Davidson: Well, under BITs, the state parties are dragged many times kicking and screaming into these proceedings and often they are at fault, if one views "prompt adequate and effective compensation" as being the invariable rule of international law. One can understand that if they are consistently on the losing end of these proceedings that domestic political and economic pressures would cause their governments to object. The countries that usually lose these arbitration proceedings are often in very desperate economic straits, their people are very poor, their infrastructures are not very good. Many of them therefore view the process as inimical to their development aspirations.
Editor: We always try to ask the same question at the end of an interview: what is the question that we should have asked that we haven't?
Davidson: Am I having a good time? And the answer is yes, I'm fortunate to be extremely busy as an arbitrator and as a mediator. The work is challenging and interesting and doing it full time allows me the true luxury of delving into cases in a complete way.
Published August 5, 2009.
