Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

International Arbitration Update: Global Developments and Trends To Watch

Skadden Publication

Betsy A. Hellmann Nicholas Adams Julie Bédard Sharmistha Chakrabarti Kate Davies KC Daniel Gal KC John L. Gardiner Gregory A. Litt Bruce Macaulay Rory McAlpine Timothy G. Nelson Jennifer Permesly Anke C. Sessler Friven Yeoh Valentin Autret Peter Beaumont Devika Khopkar Max D. Stein

In the inaugural issue of this newsletter, we examine significant developments, court rulings and trends to watch in Africa, Asia, Europe, Latin America, the Middle East and the United States.

Trends To Watch

Recent Developments

Trends To Watch

Africa

Hyperinflation. Many jurisdictions across Africa have been beset by hyperinflation, causing major problems for entities in the region with contracts that provide for payment to be made in U.S. dollars. Such payment clauses are relatively common, especially where the counterparty is a foreign entity and insists on U.S. dollar payments as a way to insulate itself from inflationary pressures in the local market. This has given rise to a number of disputes in the last year.

Geopolitics in West Africa. Chinese and Russian influence across some parts of (particularly) West Africa is growing. In some cases, such influence extends to government bodies and entities that may be operating under the control of groups that have been designated as terrorist organizations by Western governments. This may give rise to unique challenges for overseas investors operating in West Africa, including the risk of violation of sanctions and anti-terrorist legislation. There is also a worrying increase in politically motivated resource nationalism, which poses a challenge for all entities operating in the extractive and similar industries.

Argentina

Argentina’s sweeping policy changes under President Javier Milei’s administration have reached foreign investments. In July 2024, the Argentine Congress enacted Law 27.742, an omnibus bill that, among other things, provides various benefits to qualifying large foreign investments in capital-intensive sectors.

If a foreign investment qualifies as a protected investment, such investment is entitled under the new law to benefit from:

  • Tax, customs and regulatory stability.
  • The ability to freely export goods and pay dividends while enjoying exemptions from foreign currency exchange restrictions.
  • Protection from expropriation or confiscation.

The new regime also provides for arbitration as a dispute resolution method, while also retaining the controlling shareholders’ rights under applicable bilateral investment treaties.

Colombia

President Gustavo Petro’s administration has signaled policy changes that may lead to an increase in demands for arbitration from foreign investors. Some commentators believe this is why the administration has also proposed to renegotiate arbitration provisions in international investment treaties that appear aimed at distancing the country from the International Centre for Settlement of Investment Disputes (ICSID) regime.

Since taking office, President Petro also has pursued policies affecting key economic sectors, including:

  • Oil and gas: implementing a ban on new exploration projects, despite oil comprising about one-third of Colombia’s export revenue.
  • Energy: issuing decrees that will have his administration assume the functions of the Energy and Gas Regulator (CREG), as well as proposing a bill to reduce the ability of renewable energy generators to access the spot market.
  • Health care: intervening in major Health Promotion Entities after legislative defeat of proposed health care reforms.
  • Mining: enacting a decree that grants the Ministry of Environmental and Sustainable Development broad authority to suspend mining projects.

France

In response to increasing competition from other arbitration-friendly jurisdictions, France is taking steps to modernize its arbitration law. France’s initiative follows similar efforts by the U.K. and Switzerland, reflecting a global trend toward enhancing arbitration frameworks with a view to capturing a larger share of the arbitration market.

In November 2024, France’s then-minister of justice appointed a working group of arbitration specialists — including prominent judges, law professors, arbitrators, lawyers and International Chamber of Commerce (ICC) leadership — to conduct a comprehensive review of France’s current arbitration laws. The group was tasked with identifying potential areas for improvement to ensure that France remains at the forefront of international arbitration. The group submitted its report on March 20, 2025.

The working group’s ambitious proposals are built around four main objectives:

  1. Centralize arbitration law. The cornerstone of the reform is the creation of a stand-alone “Code de l’arbitrage” (arbitration code) that consolidates arbitration rules that currently are scattered across multiple codes, unifies the rules for domestic and international arbitration, and streamlines procedures. The reform also seeks to centralize arbitration-related litigation under specialized judicial authorities, especially within the Paris judicial system.
  2. Promote flexibility. The reform seeks to eliminate outdated formalism, including requirements for arbitration agreements, and expressly recognize electronic arbitral awards. It also seeks to simplify how awards are communicated and signed.
  3. Establish protections for certain types of parties. The reform introduces heightened safeguards in consumer, labor and family arbitrations. It affirms the independence and impartiality of arbitrators, prohibits sole reliance on algorithmic decision-making, and enhances rules around arbitrator disclosure and recusal.
  4. Improve arbitral efficiency and enforcement. The reform seeks to streamline the enforcement of arbitral awards, including by eliminating the suspensive effect of set-aside proceedings in domestic cases and clarifying the exequatur process. The reform also strengthens the role of the “juge d’appui” (support judge), who can assist with urgent procedural issues and ensure that parties’ rights are upheld in cases of economic hardship or procedural deadlock.

The March 2025 report sets the groundwork for legislative reform expected in the months ahead and reflects a push by France to reaffirm its commitment to arbitration by offering a legal environment that is predictable, efficient, inclusive and modern.

Germany

German Arbitration Act. Until the dissolution of the so-called “Ampel” coalition in November 2024, the German Legislature had plans to modernize the German Arbitration Act. Proposed changes in the Draft Act for the Modernization of the German Arbitration Law included the:

  • Abolition of specific form requirements for arbitration agreements (except for consumers).
  • Introduction of the possibility for retrials in exceptional cases, such as document forgery.

The fate of the modernization effort is uncertain.

Energy policy. Political changes as a result of the German election may bring about changes to the regulatory environment, in particular as it relates to energy policy. This may include measures that negatively affect existing or planned investments in the energy sector, in particular in renewables. It is possible that foreign investors may seek to make claims against Germany under its extensive scheme of bilateral and multilateral investment treaties.

Hong Kong

Sports arbitration. Following the Hong Kong chief executive’s 2024 policy address, an Advisory Committee on Sports Dispute Resolution chaired by the deputy secretary for justice was set up to support Hong Kong’s drive to become a sports arbitration hub. The committee will advise the government on the design and implementation of a pilot program on sports dispute resolution, which is expected to be launched in the second half of 2025.

Key features of the pilot program are expected to include:

  • Possible government funding for athletes who engage in arbitration with national sports associations.
  • A set of model arbitration rules to be introduced around June 2025, which will serve as a point of reference for the administrating organizations in the preparation of their own arbitration rules.
  • A special focus on commercial disputes. Matters such as anti-doping would fall outside the pilot program.

IOM. The International Organization for Mediation (IOM) is the first intergovernmental organization dedicated to resolving disputes through mediation. The Convention on the Establishment of the International Organization for Mediation was concluded in Hong Kong in 2024, and a signing ceremony for the Convention will be held in Hong Kong in 2025. As part of the Hong Kong government’s bigger push toward mediation, it will be establishing the headquarters for the IOM in Hong Kong, which will support mediation in the region. The government also announced in November 2024 that it will be incorporating a mediation clause in all government contracts.

Mexico

Mexico recently implemented a process to replace its entire cadre of federal judges. Rather than a competitive process based on several exams, judicial candidates will now run for election, which is slated to be held in 2025 in two stages.

Given the uncertainty associated with such a significant change, companies doing business with Mexican entities may choose to build into their contracts:

  • arbitration clauses to resolve disputes, including domestic ones, or
  • consent to the jurisdiction of courts outside of Mexico.

This may lead to an increase in arbitration cases involving Mexican companies. It remains to be seen how the newly staffed federal judiciary will respond to an increased number of domestic arbitrations and to the enforcement in Mexico of more foreign arbitral awards and foreign judgments.

Panama

Panama is facing significant financial challenges due to arbitration claims from foreign investors that amount to around $57 billion — over half of the country’s gross domestic product. These claims largely arise from government actions affecting foreign investments in the Cobre Panamá copper mine, the operating license for which was invalidated by Panama’s Supreme Court. In addition, certain gold mining projects initiated arbitration proceedings after the Panamanian government canceled the projects or denied permits for them.

These legal disputes may cast uncertainty over Panama’s investment climate, potentially discouraging future foreign investment and impacting long-term economic growth. The amount of potential liability may also lead to political backlash against investment treaties, similar to the experience in other Latin American countries such as Argentina, Venezuela and Ecuador.

People’s Republic of China

On November 4, 2024, a revised draft of the Arbitration Law (2024 Draft) of the People’s Republic of China was submitted to the Standing Committee of the 14th National People’s Congress (Standing Committee) for first reading. The Standing Committee subsequently released the 2024 Draft for public consultation.

Key amendments in the 2024 Draft include:

  • Confirming the validity of arbitration proceedings conducted online (draft Article 11).
  • Reinforcing the doctrines of separability and “competence-competence” (draft Articles 27 and 28).
  • Shortening the time limit for setting aside arbitration awards from six months to three months (draft Article 69).
  • Enabling ad hoc arbitration for disputes involving foreign-related maritime affairs or foreign elements between enterprises registered in pilot-free trade zones established by approval of the State Council (draft Article 79).

The 2024 Draft may undergo a further round of revision in 2025 before it becomes law.

Peru

Since late 2024, the Peruvian arbitration community has been debating the effects of a decree that mandates arbitrators and arbitration centers to register with a national registry. Critics argue that the registration system grants ostensible legitimacy to substandard arbitration centers.

With approximately 300 such centers now registered, some critics are concerned about the quality of the institutions and fear that substandard centers (and the arbitrations they administer) will erode confidence in the arbitral system. At the same time, some critics have asserted that the registration requirements for arbitrators are too burdensome and could discourage qualified individuals from serving as arbitrators.

Further regulation is expected this year and, with it, a better understanding of the full impact of the changes to the system of arbitration in Peru.

United Kingdom

The long-awaited reforms to the Arbitration Act 1996 have finally become law, with the Arbitration Act 2025 (the 2025 Act) receiving royal assent on February 24, 2025.

The amendments made in the 2025 Act include:

  • Codification of an arbitrator’s duty of disclosure.
  • Clarification on the law governing the arbitration agreement.
  • Confirmation of an arbitral tribunal’s powers to summarily dismiss claims in certain circumstances.
  • Clarification of the powers of the court in support of arbitration and emergency arbitrators.
  • Revisions to the framework for challenges to an arbitral tribunal’s substantive jurisdiction.

These reforms are aimed at bringing greater clarity to arbitration agreements and promoting greater efficiency, with the goal of enhancing the attractiveness of London-seated arbitrations. The 2025 Act will apply to any applicable arbitral proceedings initiated on or after the date when its substantive provisions come into force. This date remains to be set out in forthcoming regulation, but the government has indicated that this will be “as soon as practicable.”

United States

Tariffs. The Trump administration has imposed a 10% tariff on goods from most countries, a 25% tariff on goods from Canada and Mexico (with some exceptions) and tariffs up to 245% on goods from China. Canada, Mexico and China have filed complaints against the United States before the World Trade Organization (WTO), and several countries have begun retaliatory tariffs against the United States. (See our April 30, 2025, article “The Tariff Revolution.”) At the commercial level, it is possible that parties feeling the effects of tariffs may seek to avoid contractual obligations by claiming that the terms of their contracts excuse nonperformance based on a “change in law” or force majeure, or that it is excused by the doctrine of “impossibility.” Such disputes may play out in United States and foreign courts and international arbitration tribunals for some time to come. 

Clean energy contract disputes. The Trump administration’s executive orders concerning energy have paused offshore wind developments in federal waters and frozen federal grants and loans for clean energy projects. This has given rise to challenges for clean energy developers that already invested significant sums and have energy projects underway. Additional executive orders and/or changes in legislation may be on the way for other renewable energy sources as well, potentially resulting in disputes surrounding such energy projects.

Recent Developments

France

Paris Court of Appeal Sets Aside Award Due to Business Relationship Between Presiding Arbitrator’s Law Firm and Party

On May 2, 2024, the Paris Court of Appeal annulled a Paris-seated ICC award on the basis of a business relationship between the presiding arbitrator’s firm and one of the parties’ parent companies (which the applicant discovered only after the arbitration concluded).

In that decision, Opportunity Fund v. Telecom Italia S.p.A., No. 21/08610 (Paris Court of Appeal, 2 May 2024), the court found that this relationship raised reasonable doubts about the arbitrator’s independence.

The case involved a group of companies operating under the name “Opportunity,” which applied for the annulment of an arbitral award that had been issued in 2016 in a $15 billion dispute against Telecom Italia. Opportunity’s application was based on Article 1520.2 of the French Code of Civil Procedure, which provides that a party can apply for the annulment of an arbitral award if the arbitral tribunal was improperly constituted.

Opportunity argued that the presiding arbitrator’s law firm, Gide, had a business relationship with Vivendi, the parent company of Telecom Italia, compromising the arbitrator’s independence and impartiality. This relationship was not disclosed before the final award was issued and only came to light afterward.

The court upheld Opportunity’s application. It recalled that:

1. The determination of whether there was a conflict of interest requires examining whether the circumstances were likely to raise reasonable doubts in the parties’ minds as to the arbitrator’s independence and impartiality.

2. The assessment of an arbitrator’s independence involves identifying specific and verifiable facts outside the arbitrator’s control that could influence the arbitrator’s judgment, e.g., personal, professional or financial ties to one of the parties.

The court considered that, in Telecom Italia’s case, two sets of circumstances compromised the presiding arbitrator’s independence.

First, Vivendi had a “manifest interest” in the outcome of the dispute, as evidenced by:

  • Its significant ownership stake in Telecom Italia.
  • Vivendi’s “direct involvement” in Telecom Italia’s executive decisions.
  • The large amount in dispute, which necessarily was a concern for Vivendi.

Second, Gide, where the presiding arbitrator was a partner, had a significant business relationship with Vivendi. It had acted as counsel of Vivendi and Vivendi’s subsidiaries multiple times, both before and during the arbitration (although the presiding arbitrator herself had not). In the court’s view, these circumstances were likely to raise reasonable doubts as to the presiding arbitrator’s independence (even though, as the court said, her integrity was not in question).

Germany

Frankfurt Higher Regional Court Confirms Third-Party Effect of Arbitration Agreement Contained in Framework Contract

On January 2, 2025, the Frankfurt Higher Regional Court found that an arbitration agreement contained in a framework contract and concluded for the benefit of third parties is effective and can validly be invoked by third parties against the signatories of the framework contract.

In the case, a German pharmaceutical company had concluded a long-term framework supply contract with a company based in the People’s Republic of China. The framework supply contract allowed affiliates of the German company to purchase products under the terms of the contract.

Over the years, affiliates of the German company purchased products based on individual purchase contracts as provided in the framework supply contract. When impurities in the purchased products forced the German company to recall some of its own products, its subsidiaries filed for arbitration against the Chinese company based on an arbitration clause contained in the framework supply contract.

In an interim award dated December 21, 2022, the arbitral tribunal found that it had jurisdiction over the case. The Chinese company then applied to the Frankfurt Higher Regional Court for a declaration that the arbitral tribunal had no jurisdiction.

The Frankfurt court dismissed the Chinese company’s application. It held that, although arbitration agreements principally only apply as between the parties to a contract and their legal successors, third parties could exceptionally rely on an arbitration agreement if the underlying contract is a contract to the benefit of third parties within the meaning of Section 328 of the German Civil Code (i.e., a contract that directly confers enforceable rights to a third party).

The court further found that the fact that the arbitration agreement had a third-party effect and thereby restricted the third party’s right to access ordinary courts did not render the agreement impermissible to the detriment of third parties. This is because, as the court stated, the third parties could choose whether to enter into individual purchase contracts under the terms of the framework supply contract.

Federal Court of Justice Strengthens Enforcement of Arbitral Awards

On July 11, 2024, the Federal Court of Justice quashed an April 2023 decision by the Frankfurt Higher Regional Court in which the lower court held that an arbitration award that was signed by only two of the three arbitrators and containing a note that the “signature [of the third arbitrator] could not be obtained” was invalid because it did not meet the formal statutory requirements for arbitral awards.

The Higher Regional Court had based its decision on Section 1054 (1) sentence 2 of the Code of Civil Procedure, which stipulates that for tribunals consisting of more than one arbitrator, the signature of the majority suffices if the reason for the missing signature is indicated. In the view of the Higher Regional Court, this meant that the note indicating that the other arbitrator could not sign the award was insufficient because it did not say why the signature could not be obtained.

In quashing the Frankfurt Higher Regional Court’s decision, the Federal Court of Justice stated that “the arbitration award at issue fulfils the requirements of Section 1054 (1) sentence 2 of the Code of Civil Procedure regarding the indication of a reason for the missing signature of the arbitrator.”

In its view, the law merely required an indication of the reason for the absence of the signature(s) of the other tribunal member(s). An award with a note indicating that the “signature [of the third arbitrator] could not be obtained” fulfilled that requirement and did not require the reason that prevented the third member from signing the award.

The Federal Court of Justice further held that, in contrast to the rules applicable to judgments of ordinary courts, the indication of the reason required by Section 1054 (1) sentence 2 of the Code of Civil Procedure is merely intended to make it clear that the signature of an arbitrator is not just accidentally omitted.

Hong Kong

Hong Kong Court Rejects Jurisdictional Challenge and Grants Anti-Suit Injunction Against Russian Bank

On December 27, 2024, the Hong Kong Court of First Instance rejected a jurisdictional challenge by a Russian Bank (Bank B) and granted an anti-suit injunction in aid of arbitration, in favor of a licensed bank headquartered in Germany (Bank A) (Bank A v Bank B [2024] HKCFI 2529).

Bank A sought an anti-suit injunction after Bank B commenced proceedings in Russia in breach of an arbitration agreement providing for Hong Kong arbitration. Bank B challenged the Hong Kong court’s jurisdiction, arguing the dispute was a matter of foreign affairs beyond the remit of the Hong Kong courts. The court disagreed and held that there was no “state” or “act of state” involved in the matter before the court.

The court also rejected Bank B’s other challenges to the anti-suit injunction sought by Bank A. Among others, Bank B had argued that it would be “contrary to the public policy of Hong Kong to grant the relief sought” by Bank A. The court found, however, that the relevant public policy “on the facts of the present case is that of upholding the parties’ autonomy and their agreement to submit their disputes to arbitration in Hong Kong.”

This conclusion is consistent with the principle in Hong Kong that foreign proceedings instituted in breach of an arbitration agreement ordinarily should be restrained by the grant of an injunction, unless there are strong reasons shown to the contrary.

Hong Kong Court Grants Security for Costs Against Plaintiffs Seeking To Set Aside Arbitral Award

On November 1, 2024, the Hong Kong Court of First Instance ordered security for costs against the plaintiffs who had applied to set aside an arbitral award. The court further ordered that the set-aside application be dismissed with indemnity costs in the event the plaintiffs fail to provide such security.

In reaching its decision (P1 and P2 v D [2024] HKCFI 3052), the court drew a distinction between an application in the determination phase and one in the challenge phase. Whereas the former concerns an application for security for costs in the course of an arbitral proceeding, the latter seeks security for costs in the course of a set-aside proceeding before the court, so different considerations apply.

Given that the application was made in the challenge phase, the court found that while arbitral tribunals cannot award security for costs solely on the ground that the (arbitration) claimant is a resident overseas, as against a plaintiff in a set-aside application, the applicable legislation does not circumscribe the court’s power in the same manner. Accordingly, the court ordered security.

The court also held that impecuniosity should not be elevated into a typical requirement when seeking security for costs before the court, and that, even in its absence, courts are entitled to take into account the ease of enforcement in the jurisdiction where the plaintiff is ordinarily resident to order security for costs.

HKIAC Publishes Practice Note on Compatibility of Arbitration Clauses Under Its Arbitration Rules

On January 20, 2025, the Hong Kong International Arbitration Centre (HKIAC) published “Practice Note on Compatibility of Arbitration Clauses under the HKIAC Administered Arbitration Rules” (HKIAC Practice Note (20 January 2025) that examines:

  • The HKIAC’s practices in assessing the compatibility of arbitration agreements in multiparty, multicontract scenarios.
  • Its approach to the constitution of arbitral tribunals presiding over a consolidated or single arbitration.

The Practice Note focuses on Articles 28 and 29 of the 2018 and 2024 HKIAC Administered Arbitration Rules, which set out procedural mechanisms for (i) multiple related arbitrations to be consolidated, and (ii) disputes arising out of multiple contracts to be heard in a single arbitration, respectively.

The Practice Note makes clear that, to be compatible, the arbitration agreements need not be identical, but any differences must be surmountable by the parties, the tribunal and/or the HKIAC. It further emphasizes that, when making decisions under Articles 28 and 29, the HKIAC adopts a pragmatic approach, and its overriding goal is to facilitate a fair and speedy resolution of the dispute without unnecessary expense. The HKIAC also seeks to promote party autonomy, the integrity of the arbitral proceedings and equal treatment of the parties.

As a general observation, the HKIAC has found arbitration agreements to be compatible where:

  • It is practically feasible and procedurally efficient for the claims to be heard in a consolidated or single arbitration.
  • The differences in the arbitration agreements do not undermine the consent of the parties (via their adoption of the HKIAC Rules) to have their claims consolidated or heard in a single arbitration.
  • Permitting consolidation or a single arbitration does not unduly open the award to challenge in the future.

India

India Plans To Revamp Model Bilateral Investment Treaty, Enters Into New Treaty With the UAE

In 2015, India revised its model bilateral investment treaty (BIT), limiting investors’ rights and making it more difficult for investors to sue the country.

For example, the 2015 Model BIT:

  • Requires that foreign investors pursue local remedies for at least five years before commencing a BIT arbitration against India (Article 15).
  • Narrows the scope of protected “investments” (Article 1.4).
  • Excludes any taxation measures imposed by India from the scope of treaty protection (Article 2.4(ii)).
  • Does not allow investors the benefit of a “most-favored nation,” or MFN, clause.

India reconsidered its position after other countries resisted entering into a BIT based on the 2015 Model BIT. In February 2025, during her budget speech, India’s finance minister, Nirmala Sitharaman, announced that “the current model BIT will be revamped and made more investor-friendly” as a way to “encourage sustained foreign investment.”

In her speech, the minister referenced two new BITs signed in 2024. One of those two treaties — with the United Arab Emirates — is now in force and contains certain concessions by India in favor of UAE investors. For example:

  • The requirement to exhaust local remedies was five years under the model BIT but is three years under the UAE BIT (Article 17.1).
  • Whereas the model BIT excluded “portfolio investments,” the UAE BIT includes within the scope of protection investments in the form of “[s]hares, stocks and other forms of equity participation” as well as “[b]onds, debentures, and loans and other debt instruments” (Article 1.4.B and 1.4.C).

However, consistent with the 2015 Model BIT, the UAE BIT does not include an MFN clause and instead provides that “[a] determination that there has been a breach of another provision of this Treaty, or of a separate international agreement, does not establish that there has been a breach of this Article” (Article 4.3).

And, like the 2015 Model BIT, the obligation to accord investments “full protection and security” under the UAE-India BIT is expressly limited “to [the] physical security of Investors and to Investments made by the Investors of the other Party which does not require a treatment in addition to or beyond that which is required by the customary international law regarding the Minimum Standard of Treatment of aliens” (Article 4.2).

The India-UAE BIT softens some of the state-friendly positions under the 2015 Model BIT but not others. It remains to be seen whether, in revamping the 2015 Model BIT, India goes further to achieving the finance minister’s stated goal of making the model BIT “more investor-friendly.”

The Netherlands and Brazil

Dutch Court Reaches Important Milestone in the Saga of Petrobras Investors Seeking Compensation for Lava Jato-Related Losses

In the wake of the now decade-old Lava Jato (Operation Car Wash) scandal in Brazil, investors filed a slew of lawsuits against Petrobras seeking compensation for damages stemming from the alleged fraud and bribery schemes perpetrated by Petrobras and certain of its officers.

In the United States, a class action led to a $3 billion settlement concluded in 2018. In the Netherlands, however, an action filed by a compensation fund representing certain shareholders and bondholders continues.

In a July 2023 interim ruling, the Dutch court found that Petrobras acted unlawfully but delayed a final decision until gathering expert testimony on the laws of Brazil, Argentina and Luxembourg. The plaintiffs moved to compel Petrobras to disclose arbitration awards issued in disputes involving other shareholders, arguing these awards offered relevant insights into Brazilian law.

However, the Dutch court was unpersuaded that arbitrators’ interpretations of Brazilian law in the arbitration awards would be superior to those of Brazilian court cases and sources.

In October 2024, the Dutch court dismissed all claims under Brazilian and Argentinian law because those laws do not allow the recovery of indirect losses, and it dismissed the Spanish law claims as time-barred. The court found that Petrobras’ conduct amounted to fraud under the laws of Luxembourg and the Netherlands and granted the plaintiffs’ request for a declaratory judgment.

Singapore

SIAC’s New Arbitration Rules Come Into Force

On December 9, 2024, the Singapore International Arbitration Centre (SIAC) announced the release of the seventh edition of its arbitration rules, which are to apply “to any arbitration which is commenced on or after” January 1, 2025, where the parties have agreed to the latest SIAC rules (2025 Rules).

In line with the arbitral rules of other institutions, the 2025 Rules now include an express provision (Rule 38) that requires parties to disclose the existence of any third-party funding agreement and the funders’ identities in their notice of arbitration or response thereto, or as soon as practicable upon concluding a third-party funding agreement. The tribunal may also order parties to disclose funding details and may take the existence of funding into account when apportioning costs.

The 2025 Rules introduce a number of new procedural techniques to increase the efficiency of the arbitral process:

  • Streamlined procedure (Rule 13, Schedule 2). The “streamlined procedure” applies to disputes valued at 1 million or less Singapore dollars (unless the SIAC president decides that this limit should not apply). Proceedings are heard by a sole arbitrator and must conclude within three months after the tribunal’s constitution. This three-month period is one of the most expedited procedures provided under institutional rules.
  • Emergency arbitrator procedure (Rule 12.1, Schedule 1). Applicants can now file an application for the appointment of an emergency arbitrator up to seven days prior to submitting a notice of arbitration, whereas previously such application had to be filed together with or after the notice of arbitration. Parties can also now obtain certain protective preliminary orders (pursuant to Schedule 1) on an ex parte basis.
  • Coordinated proceedings (Rule 17). Where the same tribunal has been constituted in two or more arbitrations, and the arbitrations share common legal or factual issues, Rule 17 allows the tribunal to conduct the arbitrations concurrently or sequentially, to align certain procedural aspects or to suspend one arbitration pending another proceeding. This is in addition to the tribunal’s power to consolidate found in Rule 16.
  • Preliminary determination (Rule 46). The tribunal can make final and binding determinations of any issue ahead of the final award where (i) the parties agree that the tribunal may determine such an issue on a preliminary basis, (ii) the applicant can demonstrate that preliminary determination would contribute to savings of time and costs, and a more efficient and expeditious resolution of the dispute, or (iii) the circumstances of the case otherwise warrant the determination of the issue on a preliminary basis.

South Korea

South Korea Loses Bid To Set Aside Arbitral Award Won by Mason Capital

On March 20, 2025, the Singapore International Commercial Court (SICC) rejected South Korea’s application to set aside a $43 million investment treaty award won by U.S. hedge fund Mason Capital over South Korea’s interference in a Samsung merger. In upholding the award, the SICC rejected arguments that the arbitral tribunal did not have jurisdiction and breached natural justice.

The case concerned a merger between Samsung C&T Corporation (SC&T) and Cheil Industries. Mason Capital was a shareholder of SC&T and contended that the merger had undervalued the company, negatively impacting its investment. The merger was approved by SC&T’s largest shareholder, Korea’s state-owned National Pension Service (NPS).

Mason Capital brought an arbitration against South Korea under the U.S.-South Korea free trade agreement (FTA), alleging that former South Korean President Park Geun-hye and other officials had improperly influenced the approval. In April 2024, a Singapore-seated tribunal ordered South Korea to pay $32 million in damages and $11 million in costs for violating the FTA.

The tribunal concluded that then-President Park’s solicitation of financial benefits had violated the fair and equitable treatment standard under the FTA, influencing the NPS’ decision to approve the merger.

South Korea sought to annul the award before the SICC, contending that then-President Park and her officials’ actions regarding the NPS merger vote did not qualify as “measures” taken by the state and thus that the tribunal lacked jurisdiction over the case. South Korea also claimed that the tribunal breached natural justice.

The SICC rejected these arguments and declined to annul the award against South Korea. It found that the government actions in question could be considered “measures” and that the intervention in a proposed merger can have a “legally significant connection” to the shares held in each company and their holders.

The SICC also ruled that the tribunal had not breached natural justice in refusing to admit certain court judgments into evidence because South Korea ultimately did not suffer prejudice as a result.

Switzerland

US Gymnast Jordan Chiles Challenges CAS Award on the Basis That the Tribunal Chair Had a Conflict

In August 2024, a Court of Arbitration for Sport (CAS) tribunal chaired by Hamid Gharavi issued an award that resulted in U.S. gymnast Jordan Chiles being stripped of her Olympic bronze medal, which was then awarded to Romanian gymnast Ana Bărbosu. On September 16, 2024, Chiles challenged the award on various grounds, including that Gharavi had a conflict of interest, given his prior representation of Romania.

Chiles’ score during the women’s gymnastics floor final at the 2024 Summer Olympics originally put her in fifth place. Chiles’ coach filed an inquiry over the score, which led to a score revision that moved Chiles to third place, overtaking Bărbosu.

On August 10, 2024, a CAS panel chaired by Gharavi heard the matter and ruled that Chiles’ score inquiry was filed four seconds late. Based on the CAS decision, the International Olympic Committee announced that Chiles’ score revision would be reversed and the bronze medal would be awarded to Bărbosu.

On September 16, 2024, Chiles challenged the CAS award in the Federal Supreme Court of Switzerland arguing, among other things, that Gharavi was conflicted because he had represented Romania — Bărbosu’s home country — as counsel in at least three ICSID arbitrations. However, the CAS award memorializes that Gharavi had disclosed his prior representation of Romania and that the parties did not object.

Under the 2024 International Bar Association (IBA) Guidelines on Conflicts of Interest in International Arbitration, based on the available facts, Gharavi’s past representation of Romania in ICSID arbitrations may fall under the Orange List, which flags situations in which “[t]he arbitrator currently serves, or has served within the past three years, as arbitrator or counsel in another arbitration on a related issue or matter involving one of the parties, or an affiliate of one of the parties” (3.1.5).

For scenarios under the Orange List, “the parties are deemed to have accepted the arbitrator if, after disclosure, no timely objection is made, as established in General Standard 4(a).”

United Arab Emirates

US Fifth Circuit Reverses District Court, Upholding Arbitration Clause Despite DIFC-LCIA Abolition

The U.S. Court of Appeals for the Fifth Circuit overturned a recent decision by the U.S. District Court for the Eastern District of Louisiana, which found that the DIFC-LCIA arbitration clause applicable to the dispute was unenforceable because the DIFC-LCIA no longer exists.

In November 2024, the district court found that because Decree No. 34 of 2021 had abolished the DIFC-LCIA Arbitration Centre and transferred all of its rights and obligations to the Dubai International Arbitration Centre (DIAC), the court could not compel Baker Hughes Saudi Arabia Co. Ltd to arbitrate against Dynamic Industries Saudi Arabia Ltd. The reasoning was that the arbitration clause provided for an arbitration administered by the DIFC-LCIA, and therefore the parties had not agreed to the forum.

In January 2025, the Fifth Circuit reversed this decision and held that “the parties’ dominant purpose was to arbitrate” (Baker Hughes Saudi Arabia Co. v. Dynamic Indus., No. 23-30827). It found that although the subcontract stated that disputes could be heard by the DIFC-LCIA, this was not the exclusive forum contemplated by the parties, and the parties had also agreed that arbitration could be conducted in Saudi Arabia.

The Fifth Circuit further stated that it was not clear that the part of the subcontract calling for disputes to be decided under the DIFC-LCIA rules was a forum-selection clause. Although other U.S. appellate courts have found that parties implicitly select a forum by selecting that forum’s rules, the Fifth Circuit stated that it had “lingering doubts” about adopting such a blanket rule approach.

However, it did not need to resolve that point in this case because it found that, even if the DIFC-LCIA provisions did amount to a forum-selection clause, the clause was severable and not integral to the subcontract: “Because the parties’ primary intent was to arbitrate generally, the district court is empowered to compel arbitration and to appoint a substitute arbitrator consistent with the parties’ intent as manifested in the subcontract.”

For the same reason, it found that it did not need to decide whether the designated forum (the DIFC-LCIA) remained available in circumstances where a functionally identical successor forum (the DIAC) existed. The court did note that the DIAC’s rules and resources mirrored the DIFC-LCIA in many key respects.

The Fifth Circuit therefore reversed the district court’s judgment and remanded the case, instructing the district court to consider whether the DIFC-LCIA rules could be applied by any other forum available, including the London Court of International Arbitration (LCIA), DIAC or a forum in Saudi Arabia, and if so, to compel arbitration in that forum. Otherwise, it indicated that the district court should compel arbitration in Saudi Arabia.

Dubai International Financial Centre Court of Appeal Confirms Jurisdiction To Grant Interim Relief in Support of Foreign Proceedings

The Dubai International Financial Centre (DIFC) Court of Appeal in 2024 confirmed the DIFC courts’ jurisdiction to issue injunctive relief (including worldwide freezing orders) in support of proceedings outside of the United Arab Emirates (Carmon v Cuenda [2024] DIFC CA 003).

In this significant ruling, the DIFC Court of Appeal departed from its previous and controversial decision in Sandra Holding v. Saleh [2023] DIFC CA 003, in which it set aside a worldwide freezing order granted by the DIFC Court of First Instance in support of ongoing foreign legal proceedings in various jurisdictions.

In that decision, the Court of Appeal held that the DIFC courts did not have jurisdiction to grant injunctive relief in aid of pending legal proceedings in foreign courts in circumstances where a judgment had not already been rendered by a foreign court. However, on November 26, 2024, the Court of Appeal departed from this decision, finding that the DIFC Court of Appeal in Sandra Holding had taken “a wrong turning.”

The case concerned a worldwide freezing order issued by the DIFC Court of First Instance prior to the Sandra Holding decision, in support of ongoing legal proceedings in Hong Kong. After the Sandra Holding decision, Cuenda (the defendant) applied to set aside the freezing order on the grounds that the court had no jurisdiction to grant or maintain the order. The DIFC Court of First Instance granted the application.

On appeal from Carmon Reestrutura (the plaintiff), however, the DIFC Court of Appeal found that the Sandra Holding court had construed its jurisdiction too narrowly, wrongly attaching importance to the absence of specific wording in the DIFC Court Law No. 10 of 2004 conferring jurisdiction to grant freezing orders in support of pending foreign judgments.

The DIFC Court of Appeal clarified that it has statutory jurisdiction under Articles 24 of the DIFC Court Law and 7(6) of the Judicial Authority Law to recognize and enforce foreign judgments. It further elucidated that such jurisdiction includes the implied power to make an order to preclude a litigant from thwarting its express jurisdiction. Such authority allows the DIFC to issue protective or interim measures to prevent the dissipation of assets before a foreign judgment is rendered.

In making its decision, the court emphasized the need to align with international commercial practices and considered the circumstances in which it is appropriate to depart from its own previous decisions. It found that the principle in Sandra Holding should not be followed because it was legally incorrect; it also caused inconvenience by allowing the court’s jurisdiction to be thwarted. The DIFC Court of Appeal thus overturned the Court of First Instance’s decision, confirming a party’s ability to seek stand-alone relief in the DIFC courts in support of foreign legal proceedings.

United Kingdom

In Anti-Suit Injunction Case, UK Supreme Court Finds English Courts Have Jurisdiction To Grant Relief in Support of a Foreign-Seated Arbitration

In September 2024, the U.K. Supreme Court (UKSC) issued its decision in UniCredit Bank v RusChemAlliance [2024] UKSC 30, dismissing a Russian company’s appeal against an anti-suit injunction (ASI) that requires the company to terminate proceedings brought in Russia in breach of an English law-governed contract providing for an ICC arbitration seated in Paris.

The underlying dispute is between RCA, a Russian company, and two German companies (the Contractor) concerning the Contractor’s nonperformance of contracts for the construction of natural gas processing plants in Russia following Russia’s invasion of Ukraine. The Contractor refused to return RCA’s advance payments, so RCA demanded payment under seven bonds issued by UniCredit. The bonds are governed by English law and provide for ICC arbitration seated in Paris.

Despite the arbitration agreement included in each of the bonds, RCA initiated proceedings in Russian courts. In response, UniCredit sought and obtained injunctive and declaratory relief in the English courts on the basis that the parties had agreed to arbitrate disputes arising out of the bonds. UniCredit further asserted that the arbitration agreement in the bonds were governed by English law, and that the English courts were the proper place for UniCredit to bring its claim against RCA.

In affirming the Court of Appeal’s grant of an ASI in favor of UniCredit, the UKSC made a number of holdings about the authority of English courts relative to arbitral tribunals and the courts at the seat of arbitration. Specifically, the UKSC found that UniCredit’s resort to the English courts was not incompatible with the parties’ arbitration agreement because its request for an ASI was aimed at enforcing the arbitration agreement and supporting the arbitral process.

Further, the parties’ choice of a Paris-seated arbitration, to be subject to the supervisory jurisdiction of the French courts, did not mean that an English court “cannot or should not uphold the parties’ bargain by restraining a breach of the arbitration agreement.” As for the arbitral tribunal, UniCredit was not required to have sought relief from the arbitrators rather than the courts because an ASI issued by the arbitrators would be unlikely to be effective without court-backed sanction orders.

The UKSC also made an important ruling concerning the law governing the parties’ arbitration agreement. It held that absent express party choice as to the governing law for the arbitration agreement, the choice of law governing the contract (in this case, English law) would also apply to the arbitration agreement contained in it even if there is a different law of the seat (in this case, French law).

Under English law, absent an express law governing the arbitration agreement, where there is a difference between the governing law of the contract and the law of the seat, the courts apply the law with which the arbitration agreement is most “closely connected,” and the general presumption is that it is the governing law.

By comparison, in the United States, there are conflicting authorities and no express guidance from the U.S. Supreme Court. On the one hand, the position in the “Restatement of the U.S. Law of International Commercial and Investor-State Arbitration” is that “absent a choice of law in the arbitration clause itself, a general contractual choice-of-law clause was intended to apply to the arbitration clause as well.” Some courts faced with this issue have found the reverse, however.

United States

Second Circuit Refuses To Order Discovery for ICSID Arbitration

In July 2024, the U.S. Court of Appeals for the Second Circuit refused to reinstate discovery orders obtained by an Italian construction group for its $2.2 billion investment treaty dispute against Panama on the basis that U.S. courts do not have power to order discovery in aid of ICSID arbitrations.

In 2022, the claimant in a 2020 ICSID arbitration, Italian construction group Webuild, sought discovery from a U.S. court against Panama, using a statute (28 U.S.C. § 1782) that authorizes discovery “for use in a proceeding in a foreign or international tribunal.”

In May 2022, the U.S. District Court for the Southern District of New York (SDNY) granted Webuild’s discovery request (the May Order).

In June 2022, after the SDNY decision, the U.S. Supreme Court issued its decision in ZF Automotive US, Inc. v. Luxshare, Ltd. and AlixPartners, LLP v. Fund for Protection of Investors’ Rights in Foreign States, finding that Section 1782 discovery was not available in aid of international commercial tribunals or ad hoc investment tribunals constituted under the UNCITRAL (United Nations Commission on International Trade Law) Rules.

The Supreme Court did not comment on whether other investor-state tribunals — such as ICSID tribunals — could qualify as a “foreign or international tribunal” under Section 1782. The respondent in the arbitration, WSP, moved to have the May Order vacated and in December 2022, the SDNY vacated its prior orders granting Webuild’s discovery request.

Webuild appealed to the Second Circuit, which rejected Webuild’s appeal on the basis that the characteristics of Webuild’s ICSID tribunal were “virtually the same as” the UNCITRAL tribunal in ZF Automative.

The Second Circuit did not expressly state that ICSID tribunals can never qualify as a “foreign or international tribunal” under Section 1782. Rather, the court focused on the fact that Webuild and Panama each had chosen their own arbitrators and that the ICSID chairman — who could appoint arbitrators from the panel of arbitrators — had not played a role in appointing the tribunal.

This leaves open the question of whether another ICSID tribunal — where the ICSID chairperson does have a role in appointing the chair or co-arbitrators — may qualify under Section 1782 as a “foreign or international tribunal.” The decision does demonstrate, however, that U.S. courts are closely questioning the extent to which Section 1782 discovery may be ordered to aid an arbitral tribunal (be it a commercial or investor-state tribunal).

Seventh Circuit Declines To Require Samsung To Arbitrate Mass Claims

In July 2024, the U.S. Court of Appeals for the Seventh Circuit reversed an Illinois district court order requiring Samsung to arbitrate claims brought by plaintiffs who alleged their Samsung devices unlawfully collect and store sensitive biometric data, in violation of Illinois law.

The appeals court found that there was insufficient evidence to prove that the plaintiffs were current Samsung customers with valid arbitration agreements. It further found that even assuming valid arbitration agreements, the plaintiffs had no right to compel Samsung to pay the administrative fees of the American Arbitration Association (AAA), which amounted to over $4 million.

This decision is an important one for corporations defending against mass arbitrations because it respected the termination of mass claims by an arbitral institution for the failure by the plaintiffs to advance the associated fees, which can run into the millions.

Paula Wallrich and thousands of other consumers (the plaintiffs) filed an arbitration with the AAA against Samsung. Under the AAA rules, there are certain fee requirements imposed when 25 or more similar claims for arbitration are filed. The rules require that both consumers and business entities pay filing fees to the AAA before the arbitration can proceed.

The plaintiffs alleged that Samsung participated in the unlawful collection and storage of data in violation of Illinois law. Samsung denied the plaintiffs’ allegations and refused to pay the more than $4 million AAA filing fees.

Relying on 9 U.S.C. § 4 of the Federal Arbitration Act (FAA), the plaintiffs filed a petition in district court to compel arbitration. The district court found in favor of the plaintiffs, compelled arbitration and ordered Samsung to pay the AAA filing fees.

On appeal, the Seventh Circuit reversed. Under the FAA, a party seeking to compel arbitration must show:

  • An enforceable written agreement to arbitrate.
  • A dispute within the scope of the arbitration agreement.
  • A refusal to arbitrate.

The Seventh Circuit ruled that the first prong had not been met because the plaintiffs failed to discharge their evidentiary burden that they were current Samsung device owners with valid arbitration agreements. The appeals court also found that the district court had exceeded its authority by ordering Samsung to pay the AAA filing fees.

The alleged arbitration agreement between the plaintiffs and Samsung delegated all arbitration fee disputes to the AAA. Under the AAA rules, the plaintiffs could have advanced Samsung’s share of filing fees, in addition to their own, but did not. The AAA considered the matter, decided against staying the arbitration, and terminated it. According to the Seventh Circuit, “[a]t that point, arbitration was complete, and the district court did not have the authority to flout the parties’ agreement and disturb the AAA’s judgment.”

This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.

BACK TO TOP