Collecting debts in international disputes

Dumler and partners took part in the conference by Russian Arbitration Association “Collecting Bad Debts: Throwing Good Money after Bad?” 

In his opening remarks Roman Zykov, General Secretary of the RAA, noted the novelty of the event and its significance for improving the efficiency of Russian business and interaction with foreign colleagues and clients. In this case, said Mr. Zykov outlining the scope of the conference that in the course of the four sessions will detail the "life-cycle" management of qualitative client-oriented business: first, the speakers will talk about the financing of the third party as one of the most relevant trends in international commercial and investment arbitration, further study participate in the arbitration of persons not involved in the process as the parties or the Tribunal, the speakers will move to the second important topic, the role of experts in arbitration. Then there will be leading experts in financial investigations and global asset tracing debtors. In conclusion, the lawyers will tell about interim measures that could be imposed by state courts in support of arbitration in England, Cyprus, BVI and Switzerland.

At the beginning of the first session, Duarte Henriques, partner at BCH Lawyers, a member of the ICCA – Queen Mary University Task Force on Third Party funding, spoke about the relevance of the Institute's third-party financing (third-party funding), as well as its main problems, namely: the problem of evaluation of the success of the party-the subject of funding, the role in litigation (commercial litigation), the issue of state and non-state regulation of business third party funding. James Popperwell, partner at Macfarlanes, introduced colleagues in the theoretical basis of the institution third-party financing, the history of the Institute, as well as on the prevention of “eating” big financiers are small, and the approaches developed in English by state courts on this issue. Michael Redman, as the representative and director of a large funder, among other things, are involved in asset tracing, and enforcement solutions Burford Capital, spoke about how occur competition among financiers for the right to "sponsor" a great deal, as well as what are customers of such firms. Report by Tatiana Menshenina, partner at Withers, dealt with the negative aspects and traits of globally used Institute funding by a third party. In particular, she said, there may be a conflict of interests between the financier and the Tribunal (the Tribunal), and then increase risks or biased consideration of the dispute or the challenge of an arbitrator, or unenforceable decisions. So, there are three "classic" cause for conflict of interest when engaging a third party funding:

  • Abitur advises the financier, supporting the plaintiff
  • Firm of an arbitrator on an ongoing basis providing consulting services to the client or vice versa
  • Often arbitrators are barristers, and work on the debt, they may currently or previously to present to the financier or its controlled companies, which inevitably leads to a conflict of interest.

The second session was dedicated to experts in international arbitration. Victor Dumler, session moderator, noted that arbitration disputes often win on the facts, not the law, whereas the law plays a supplementary role, and experts are called to help establish the facts relevant to the dispute. Doug Hall of Smith & Williamson, presented a report on the role that experts have played in various arbitration tribunals, on why the expert cannot be called third party in the dispute, and about which methods of obtaining data from experts are there, and how important it is to imagine what will tell the expert during the hearings, and how not to make it in the "roulette". Dominic Pellew, Dentons, in addition to a detailed account on cross-examination as a popular method of obtaining the "right" evidence and several important tips (to be short in his questions, to focus on the details, to ask witnesses questions, the answers to which are precisely known, ask broader questions to create debate and discussion, in passing the "directing" expert or witness in the right direction).

The third session developed directly the theme of the conference. Alessandro Volcic, managing Director of the Moscow office of Kroll, spoke about the many ways available search assets, including sometimes analytical methods and procedure design, customer expectations and on the scope of what is permitted. Mike Lakort, Director General of International Conflict, told about how the detectives-investigators involved in the search for assets. This includes identification of the country where presumably the assets are located, the establishment of contacts with local investigators or active search with departure on place, and also different ways of recording information about assets, their status and movement.

The fourth and last session of the conference was more international in nature. The session was moderated by Roman Zykov, who briefly described the problem and the effectiveness of security measures. Stephen Phillipson, PCB Litigation, said about the peculiarities of the operation of the English law in the context of certain types of interim measures, and Stavros Paul, partner at Patrikios Pavlou & Associates, talked about the features of Cyprus law and judicial practice in relation to, including Russian companies.

Please visit the RAA website to view the full program.