XIV International Arbitration Congress, Costa Rica

The XIV International Arbitration Congress (CAI Costa Rica 2023) took place in February in San José, where over 200 leading professionals and experts in the field of international arbitration from all over the world gathered to discuss relevant and current issues in this area.
In addition, this edition celebrated the 100-year anniversary of the Court of the International Chamber of Commerce (ICC). The ICC worked hard in the successful coordination and preparation of every detail, making it a well-worth celebration.

CAI Costa Rica is widely recognized in the world of international arbitration for allowing participants to exchange insights and discuss current challenges in the world of arbitration. It helps to promote academic development by understanding the problems and challenges faced by the arbitration and commercial dispute resolution community through the insights of important professionals with vast experience in the field. It also constitutes an opportunity to strengthen relationships between arbitration professionals and the institutions that promote its use around the world.

This year, we saw panels and conferences by leading arbitration experts, both regional and global, who shared their experiences and celebrated the return of that face-to-face attendance that has been so missed in this post-pandemic period. A wide range of issues affecting arbitration were covered, such as the need to strengthen relations with the judiciary, the importance of implementing and strengthening mediation, the need to pay greater attention to financial planning, the clear conceptualization of damages to obtain a correct compensation, the correct handling of the theory of the case, and the impact of the use of the different technologies.

Anniversary: ​​100 years of the ICC Court

(Left-Right): María Fernanda Garza, Mariamalia Guillen (President of the ICC Costa Rica) and Andrea Hulbert (President of the Arbitration and RAC Commission, ICC Costa Rica)

The International Court of Arbitration (ICC) is the arbitration institution with the greatest international projection and is celebrating its 100th anniversary. Therefore, a special space was dedicated to commemorating its history and main contributions to the development of the Arbitration Institute and Alternative Dispute Resolution. Andrea Hulbert, President of the ICC Costa Rica Arbitration and ADR Commission, presented 5 of the main contributions.

As the most outstanding, she referred to the scrutiny of the awards, which "consists of a procedure prior to the signing of the awards by the arbitral tribunal." In other words, the court must "submit it, in the form of a project, to the Court" who is in charge of "ordering modifications of form and, respecting the freedom of decision of the arbitral tribunal" and may even "draw their attention to points related to the merits of the controversy."

As a second contribution, the process that the Court began in 2022 for the publication of the awards was highlighted - with this - achieving greater transparency.

The third relevant aspect was the implementation of the reduction on the fees for arbitrators when they delay the drafting of the awards without justification. "In 41% of cases between 2016-2021, court fees were reduced."

As a fourth point, she referred to the implementation of the abbreviated process, which has a very recent modality and represents a cost reduction of up to 20%, with a maximum duration of 6 months. "To this regard, I would like to, again, bring up the statistics to verify that these were correct measures: from 2012 to December 2022, we had 212 requests for an emergency arbitrator and from March 1, 2017 to December 1, 2022, 495 abbreviated procedures".

Finally, as a fifth point, probably one of the most innovative ones, was the launch of the "ICC Case Connect platform": a case management platform focused on the needs of external users. The system is optional, but according to Ms. Hulbert, "the idea is that in a few months it will be mandatory for new cases, as it is the most modern and efficient option"

Finally, it is essential to highlight the erroneous belief that arbitration before the ICC is only for complex and international processes. Contrary to this belief, in recent years the ICC has noticed a change, mainly in some Central and Latin American countries. For example: according to panelist Hulbert, "25% of all ICC cases in 2021 involve parties of the same nationality – which leads us to conclude that they are domestic cases. An example of this growth in domestic ICC cases in Latin America is what we are seeing in Brazil and in Mexico, where the number of ICC cases has grown considerably in the last 3 years".

Likewise, regarding the application of mediation, the ICC Court is in a position of "partner of businesses " whose objective, according to the various representatives of the ICC, is to provide different options for dispute resolution tools for various situations such as: dispute boards, mediation, abbreviated procedure and regular arbitration.

Similarly, regarding diversity in arbitration, according to court statistics, in Latin America there is a reported 72.1% participation of men and 27.9% of women. In other words, there is still much to improve on this issue in international trade.

Along these lines, it should be noted that this edition of the Congress not only celebrated the first centenary of the ICC Court, but also the first female president of the International Chamber of Commerce, María Fernanda Garza. As a panelist, Garza explained her interesting and complex career at the ICC, where she started at the age of 23 as a representative of an SME in Mexico, her home country. In said chamber, she faced all kinds of adversities as its first female businesswoman and as a mother.

However, when asked about the work of women within the ICC and its various work commissions, she responded that "as women we must participate and cooperate in the same commissions as everyone else because we have the same obligations and difficulties as businessmen". She shared her experiences and how they have led her to lead projects of global significance.

The Judiciary and Arbitration


(Left – Right): José María Alonso (José María Alonso Abogados, Spain), José Rafael Fernández (Arbitrat Law, Costa Rica) and Jesús Remón (Uría Menéndez, Spain)

One of the most talked-about panels of the congress was the one led by José María Alonso and Jesús Remón from Spain, together with José Rafael Fernández from Costa Rica. They captivated participants talking about judicial intervention in matters of arbitral competence and nullity of awards.

One of the most important recommendations provided by these experts in international arbitration was that the powers of the State should stop looking at Arbitration with mistrust, or as competition. On the contrary, the arbitration professionals´ expectation is that the judges and the judicial courts act as a guarantee, and not as a risk for arbitration.

In other words, the powers of the State should fulfill a more collaborative function, and not mere surveillance, taking advantage of the ius imperium that it naturally holds. This means that the State has the capacity to enforce the laws and judicial decisions, even through the use of force if necessary, and so although arbitration is an autonomous process and independent of the judicial system, the ius imperium of the judges can be useful in certain stages of the arbitration process such as in the recognition of awards through the application of coercive measures and the order of precautionary measures, among others.

It is essential that there is full respect on the part of the judges towards the competence and power of the arbitrators to settle the conflict; without replacing the criteria of the arbitrator with his criteria. Likewise, it must be remembered that the efforts to maintain and fulfill the fundamental rights established in the Political Constitution correspond to the judges of the Republic. Therefore, in turn, there must be full respect for the autonomy of the will of the parties, as is the free choice of the conflict resolution method they wish to use.

Mediation and the Singapore Convention


George Lim (Senior Counsel of the Singapore Bar)

On the other hand, experts in Mediation and Conciliation from Panama, Costa Rica and Singapore with the special participation of George Lim, exposed the difficulties faced by these methods of alternative dispute resolution and the benefits that are reflected in international judicial and arbitration processes. A mediator with over 40 years of experience, a member of the Singapore Bar Association since 1981 and an appointed Senior Counsel of the Singapore Bar Association since 2010, Mr. Lim served as Singapore Mediation Consultant for UNCITRAL working group II which gave rise to the "United Nations Convention on International Settlement Agreements Resulting from Mediation", now known as the Singapore Convention on Mediation.

On this occasion, they discussed the importance of implementing staggered clauses more frequently to promote the implementation of mediation, and how including mediation in an arbitration clause can humanize the process by giving the parties the opportunity to discuss the problem more collaboratively and come up with a solution that works for both parties. This can be especially helpful in disputes where the parties want to preserve a business or personal relationship, as mediation can help prevent the situation from becoming hostile or fractured. Also, including mediation in an arbitration clause can save time and cost, as the mediation process is often less expensive and faster than arbitrations or court proceedings.

The discussion in this panel became very interesting and highly relevant for the country, when Mr. Lim explained the benefits of signing and ratifying the Convention, an issue that is still being processed by the Government of the Republic of Costa Rica. As part of the public, the former minister of foreign trade, Dyalá Jiménez Figueres, who has fought for the Convention to be finally signed and ratified in the country, expressed her concerns. Before this intervention, it was also possible to observe the positive response of the Minister of Justice and Peace, Mr. Gerald Campos Valverde, who also exposed the difficulties currently facing the powers of the Republic and explained why the Convention is necessary and why it is so urgent to expedite it in order to improve the judicial system.

Management of the Case Theory

Another panel that caught the attention of the different professionals was that of the Case Theory from the perspective of the arbitrator and the correct handling that the litigants should give it. As the panelists explained, the Case Theory is a guiding thread that the lawyer must follow during the arbitration procedure and that comprises 3 elements: legal theory, facts, and evidence. To be called Case Theory, there must always be a correlation.

The Case Theory is the legal strategy used to present the facts and arguments of a party in the arbitration process. This strategy must be coherent, persuasive, and based on facts and evidence.

Some of the reasons why the correct handling of the Case Theory in arbitration is important are the following:

Clarity in the presentation of the facts and arguments: this facilitates the understanding of the arbitrator and increases the chances that the argument will be convincing.

Identification of the key elements of the case: a well-structured Case Theory allows the lawyer to focus on the most important points and prevents the arbitrator from being distracted or confused by unnecessary information.

Solid and coherent arguments: The Case Theory allows the lawyer to identify the most solid and coherent arguments and to present them clearly and convincingly.

Effective persuasion: A well-designed Case Theory can persuade the arbitrator of the validity of the party’s position.

Likewise, according to professionals in the field, there are 7 essential errors that trial lawyers should not make:

To stop following the Case Theory: this is the most recurring mistake. The litigants start the process with their allegations, and as the process progresses they abandon those allegations. To avoid this, it is advisable to define a strategy and to know the case well, so to not lose credibility.

To propose several theories: It is good to protect yourself, but "the very same facts and evidence cannot possibly support 6 or 7 different legal theories." It loses meaning and, therefore, credibility. It is advisable to stick with a single theory. This shows more strength and security.

For the Case Theory to appear at a very advanced stage: This happens when the common thread is not observed in the writings and only the facts are addressed. It is not until later, during the hearing, that the Case Theory appears. This affects the credibility and strength of the case. It seems to be a positive aspect, but it usually ends up playing against you.

Excess of facts and evidence: When there is an excessive amount of facts and evidence without correlation to the Case Theory, it can affect the defense of the case. It is understandable that sometimes this happens at the request of clients. However, one should remember that "NO means NO" and that the role of the lawyer is to be able to control the mood of the client.

Lack of simplicity: The lawyer must be able to present his theory of the case in a clear and simple way (if not, it is understood that he does not have a clear picture of the case, or that the case is not a good one). You must focus, centralize and simplify your legal theory; longer than necessary text is dangerous.

Leaving "loose ends": this happens when the Case Theory does not explain all the facts and evidence presented. It is important to be able to fit the facts (including those of the other party) into the Case Theory. The "loose end" may distract the court and the court may give you more attention than is necessary.

Not following logic: you must have the ability to demonstrate to the Court that you have the experience and that it is something that makes sense.

In conclusion, the correct handling of the Case Theory is essential for the success of any arbitration process. A well-structured Case Theory makes it possible to present the facts and arguments in a clear and organized way, it identifies the key elements of the case with strong and coherent arguments, and it convinces the arbitrator of the validity of the party’s position.

The use of new technologies in International Arbitration

Another interesting topic that was analyzed and discussed during the congress is the significant impact that technologies have on arbitration processes. As technology advances and legal practice evolves New technologies have been created as, thus, emphasis was placed on Artificial Intelligence (AI), virtual reality as the metaverse, augmented reality, and holograms.

On the one hand, AI already helps lawyers perform routine and repetitive tasks more efficiently, such as document and contract review, case law research, and legal data management. Plus, it frees up time for professionals to focus on more creative and important tasks like dispute resolution and legal strategy.

On the other hand, augmented reality and virtual reality (AR/VR) can have a significant impact on the way legal disputes are resolved. These technologies can help lawyers present evidence more effectively and persuasively, and allow them to demonstrate evidence in more visual and detailed ways. For example, lawyers can use augmented reality to show complex details in construction or accidents, and allow arbitrators and judges to examine the evidence up close. In addition, augmented reality and virtual reality can also allow witnesses to appear remotely, even if they are in another city or country. This can be particularly useful in international cases or in disputes where a key witness cannot personally attend the hearing at the arbitration center.

Also, with a very complete and interesting presentation by Patrizia Sangalli, from which the participants were able to learn about holograms and how they are not the same as virtual reality. A hologram is a three-dimensional image projected into space using light, and while both technologies aim to create an immersive experience, virtual reality creates a whole new, artificial world. In other words, the hologram shows three-dimensional objects in the real world, it is a mix between the real and the virtual.

As a general conclusion, professionals in this field agreed that these new technologies can also pose challenges for lawyers. For example, the use of algorithms to make legal decisions can increase the risk of bias and discrimination, which can negatively affect vulnerable groups. Furthermore, the automation of certain legal tasks can threaten lawyers’ jobs and affect the way legal services are delivered. Therefore, it is always important that legal professionals understand and adapt to changes in the legal landscape driven by technology, persevering the positive aspects of the Human Being, such as:

Creativity: Human beings have the ability to create new ideas, concepts, and creative solutions to complex problems. Although AI can generate ideas and solutions based on algorithms and data, it still cannot match human creativity.

Empathy: Human beings can feel empathy, compassion and sympathy towards others, which allows them to relate to and understand other people’s emotions and needs. Although the AI ​​can simulate some emotions and responses, it still cannot empathize in the same way as humans.

Flexibility: Human beings are capable of adapting to different situations and contexts in a flexible manner, and can change their behavior and strategies according to circumstances. Although AI can learn and adjust its behavior from data, it does not have the same flexibility and adaptability as humans.

Moral judgment: Human beings have the capacity to make decisions based on ethical and moral principles, and can assess complex situations and make informed decisions. AI cannot yet match this ability for moral judgment and may be limited by its algorithms and programming.

In short, although the AI ​​has several advantages in terms of speed and accuracy, humans still have a number of unique abilities that allow them to outperform the AI.

The participation of experts in arbitration processes


Ignacio Palacios (Quantum Global Solutions, Spain)

The event concluded with a panel of experts who presented their services and experiences in arbitration processes, where experts in arbitration shared their knowledge and experiences with experts in other subjects, such as Engineering, Economics, Construction, Project Management, among others.

The participation of experts or experts in arbitration processes is a common and very valuable practice to guarantee the fair and effective resolution of disputes. Experts or experts are professionals with specialized knowledge in a specific area, who are hired by one of the parties or by the arbitral tribunal to provide a technical or scientific opinion in relation to a matter in dispute and are very useful in a variety of cases. situations, such as:
Test interpretation.
Technical advice.
Assessment of responsibilities.
Hearing tests.

In summary, the participation of experts or experts in arbitration processes may be essential to ensure the fair and effective resolution of disputes in technical or scientific areas.

The celebration of the International Arbitration Congress of the CAI Costa Rica, ICC is fundamental for the exchange of academic knowledge; it promotes the development of arbitration and commercial dispute resolution and facilitates the creation of networks and promoting the region as an attractive place for investment and trade.


Abril Villegas for Latin Counsel
Associate at BLP, Costa Rica

Abril is a BLP Associate at the San José office. She specializes in the practice of Dispute Resolution.
She provides advice to national and international clients on negotiation and conciliation processes to settle disputes before going to the arbitration or judicial headquarters. She represents our clients before judicial and arbitration proceedings. Her experience is focused in the resolution of disputes in commercial, civil, and criminal law regarding civil liability matters. She also has experience in advising on the drafting of contracts and liability risk analysis.
Abril joined the BLP team as a paralegal in 2017 and was named an Associate in 2020. She is currently a member of the LGBTI+ Commission. Prior to joining the firm, she was a Paralegal at Oller Abogados.

Memberships:

- Young International Arbitration Group (YIAG) of the London Court of International Arbitration (LCIA)
- International Arbitration Commission and RAC of ICC Costa Rica
- IBA Arbitration Commission
- ICDR Young & International (Y&I)
- Board of Directors of the Costa Rican Bar Association
- Director of El Foro Magazine

avillegas@blplegal.com