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I transcribe Toby Landau BA BCL (First Class Honours) (Merton College, Oxford) QC's answer at 84:16.

My funniest case probably was my first ever international arbitration, which is a 84:23 case that, Neil [Kaplan CBE QC SBS], you know about a lot. And that was a case called Green Mining and that was a case way back, where I think, Neil, you would have been an expert in that case, I think. Yeah it was an international arbitration, it was seated in Washington, it was under ICC rules, and I acted with Lucy Reed and Martin Hunter. And the instructions we were given were to lose the case. And we had to lose it on jurisdiction because it was all to do with an OPIC policy and basically the interest was to exhaust remedies. So they wanted to lose an ICC arbitration in order to then go and pick up on a triple A arbitration later. So that was our instruction : lose the case. The chairman of the tribunal was somebody called John Evita [Note by Greek Area 51 Proposal: I can't deduce his surname's spelling.], and he sat with [I can't deduce how to spell this person's name.] who was then 85:20 general counsel of the World Bank, and a at the time a humorless very strict stern Attorney General from Trinidad.

  1. It feels outlandish and uncanny to instruct a barrister to deliberately lose the case. Isn't this unethical? Wouldn't an arbiter find such an instruction sly or deceitful?

  2. I'm not an arbiter. What's "a triple A arbitration"?

  3. Please ELI5 in layman's terms the strategy here "to exhaust remedies"? What's "a triple A arbitration"?

BlueDogRanch
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  • Ethical for the client to instruct, or for the lawyer to accept such instruction? The former is not a question about law. The latter may be. – Greendrake May 15 '20 at 02:45
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    @Greendrake The latter. –  May 15 '20 at 03:37
  • On the secondary questions: https://en.wikipedia.org/wiki/Exhaustion_of_remedies , American Arbitration Association? – richardb May 15 '20 at 07:42
  • Do you want it explained like you're five or do you want it in layman's terms? One of these is barely the purpose of Stack Exchange, the other is not at all. –  May 15 '20 at 09:15
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    @Nij - I assume your comment indicated the answer is obvious - it is not to me. Please consider answering or at least hint. – George White May 16 '20 at 00:13
  • So the client wanted to go to a higher court but couldn’t until this case was decided. And they preferred going to the higher court to winning the case in the lower court for some reason. So it was in the clients best interest to lose the case. I assume opposing lawyer should have figured this out, talked to their client, and then also tried to lose the case. Making it doubly interesting and very confusing for the judge. Acting in the clients best interest would be legal and ethical, as long as no laws are broken. – gnasher729 May 16 '20 at 08:46

1 Answers1

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Losing on jurisdiction

This is a key point and worth understanding before anything else.

The barrister doesn't actually mean "lose". The first thing an arbitrator must do is decide if they have jurisdiction to hear the arbitration. If they don't have jurisdiction the arbitration is over before it really begins and ends without a determination. If they do have jurisdiction then they will proceed to decide the arbitration "on the merits" - this results in a binding determination.

"Losing" on jurisdiction means that the dispute is unresolved and you move on to the next rung in the dispute resolution ladder. "Losing" on the merits means you're screwed and you pull out your cheque book.

Normally, the person who initiates the arbitration wants the arbitrator to have jurisdiction and its the other party who is trying to convince them that they don't. Or not - more often then not both parties are happy to have their dispute resolved by arbitration at this point. In this case, the person who initiates the arbitration wants it to fall over so they can do something else.

Ethics

A barrister has three ethical duties: one to the court (or, in arbitration, to the arbitrator(s)), one to their client and one to their client's opponent. Using the Australian Bar Association Barristers' Conduct Rules as a guide (since all will be similar), the duties are:

  1. To the tribunal: to act with independence in the administration of justice and to not knowingly mislead the court. There is no suggestion in the court that losing on jurisdictional ground thwarts justice nor that there is any intention to deceive the arbitrator(s). No ethical problems here.

  2. To their client: "must promote and fearlessly and by all proper and lawful means the lay client's best interest to the best of the barrister's skill and diligence ..." but "must not act as the mere mouthpiece ... must exercise the judgements called for by the case independently". The client believes that it is in their best interests to lose this arbitration (I'll deal with why this might be so latter). If the barrister's independent judgement agrees with this assessment then there is no ethical problem here.

  3. To the opponent: "must not knowingly make a false statement to the opponent". Again, no problems here.

Ethically, the barrister is on solid ground.

Tripple A arbitration

"Tripple A arbitration" refers to an arbitration conducted under the relevant rules of the American Arbitration Association. Remember the strategy here is to lose jurisdictionally an arbitration under the International Chamber of Commerce rules.

Exhaustion of Remedies

Is a doctrine that prevents a court or tribunal from considering a case unless and until all remedies available in another forum have been exhausted. For example, where I live in if you are unhappy with a government decision, you have to exhaust all administrative remedies before you can go to court. This usually means you have to follow the complaints/appeals process of the relevant government department, only when that is exhausted can you seek a hearing in the NSW Civil and Administrative Tribunal (which is not a court even though it operates like one - legally it is a branch of the executive, not the judiciary), failing there, you may be required to appeal to the discretion of the relevant Minister and only then can you go to court.

In this particular circumstance, the ICC arbitration was something that had to be done before an AAA arbitration could be started. This is possibly a contractual obligation or, more likely, the client was going to take someone else to the AAA Arbitration rather than the other party in ICC Arbitration, possibly the OPIC itself. This might be advantageous if, for example, you foresee problems collecting if you won the ICC Arbitration such as your opponent is a recalcitrant foreign government.

Why?

There are 2 possible outcomes of the ICC arbitration:

  1. The arbitrator(s) or a court decides that they do not have jurisdiction to conduct the arbitration. This leaves the dispute unresolved and, in this case, allows the forum to move on to the AAA arbitration.
  2. The arbitrator(s) or a court decides that they do have jurisdiction and the arbitration proceeds to its conclusion and someone wins and someone loses. Unless the arbitrator(s) have royally screwed up, this will be a final and binding determination - no appeals, the loser pays up.

The client wants No 1 and not No 2.

Some reasons why the might include:

  • Different opponents as suggested above,
  • They think their chances of winning on the merits are better under AAA rules than ICC rules,
  • There may be higher limits on awards under AA rules than ICC rules.
Dale M
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  • As a followup, if the client wished the lawyer to deliberately lose on the merits, would that be unethical? – sharur May 17 '20 at 05:21
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    Nope. Happens all the time when a client realises its cheaper to give up now and pay up than to fight the case and lose later. The client will just instruct the lawyer to concede the claim. But If you dispute something like the amount of damages then you have to keep arguing. – Shazamo Morebucks May 17 '20 at 06:43