Jus Mundi interviewed the renowned arbitrator in the arbitration world, Bernard Hanotiau, Partner at Hanotiau & van den Berg. Since 1978, Bernard Hanotiau has been actively involved in more than 500 international arbitration cases as party-appointed arbitrator, chairman, sole arbitrator, counsel and expert in all parts of the world. He is the author of Complex Arbitrations: Multiparty, Multicontract, Multi-issue (Kluwer, second edition 2020) and of more than 120 articles, most of them relating to international commercial law and arbitration. Bernard Hanotiau is a member of the Brussels and Paris Bars.
Jus Mundi: Let’s start with your background. How and when did you become an arbitrator? And what stands out to you as your first memorable moment as an arbitrator?
Bernard Hanotiau: I started my career as an academic, as assistant professor in private international law at the University of Louvain. I then decided to do post-graduate studies in the United States. I did an LLM at Columbia University, followed by a PhD in private international law under the direction of Willis Reese, the reporter of the second Restatement on Conflict of Laws. When I came back to Belgium, I joined a law firm in Brussels where I had the opportunity to work on several arbitration cases. It was a unique opportunity. Arbitration cases were very rare at that time. My academic career also opened me several doors. I was put in contact with the general editor of the Journal de Droit des Affaires Internationales who asked me to collaborate with the review and to be the liaison officer with the ICC. I started to work a lot with the ICC Institute, organising seminars on international arbitration and even giving lectures on the topic. I had a foot in the house.
In 1980, the Brussels Bar organised a trip to the People’s Republic of China. I was lucky to be part of the trip and since I was on my own, I was invited to share a room with another person who was also on his own, the president of CEPANI, the Belgian Arbitration Center. When I came back to Belgium, I received my first arbitration as the sole arbitrator. I remember the case very well. It was a default arbitration.
Given the increased caseloads in arbitration globally, can you share some of the arbitration trends (investment/commercial) you have seen recently?
Since I started to practice arbitration in the eighties, things have changed fundamentally. In the beginning, an arbitration procedure involved a first management meeting, two rounds of submissions, with each party producing the documents they wanted to produce in support of their case, and a hearing. It was a very simple process. Things have dramatically changed at the end of the last century when the International Bar Association issued their Guidelines on document production. Before that time, there were no requests for document production in continental Europe. As I said above, each party would produce the documents on which they wanted to rely in support of their case and the other party did not have the opportunity to request additional documents.
Since 2000, there has been a continuous process of judicalisation (or Americanisation) of international arbitration. The submissions are longer and longer. From the beginning of the arbitration, the parties file a multitude of requests: requests for interim measures, for security for costs, for bifurcation, for document production, etc. They submit tons of documents, very long expert reports, and witness statements, some of which are sometimes of no use at all for the decision of the case. Investment arbitration follows the same trend. In that area, there are additionally more and more critics of the method of dispute resolution put in place. States and pressure groups put into question the legitimacy of a process where states are condemned to billions of dollars by private individuals. Proposals are made to replace the existing system by permanent tribunals, the members of which are appointed both by investors and states. Would this new orientation solve all the problems? I am not at all convinced.
What do you think are the challenges faced by arbitrators in recent times?
The work of an arbitrator has become much more difficult and time-consuming than before. Arbitrators are also more and more often subject to challenges. Additionally, actions to set aside awards have become much more frequent. Fortunately, they are not often successful.
The second edition of your book “Complex Arbitrations: Multi-party, Multi-contract and Multi-issue” was published recently. Can you briefly tell us your views on how an arbitration clause be extended to non-signatories: individuals, states, or other companies of the group?
First, the expression “extension of the arbitration clause to a non-signatory” is an easy expression but it is incorrect. An arbitration clause is never extended to a non-signatory. What the tribunal does is to determine the scope rationae personae of the arbitration clause and decide whether it includes the non-signatory. And they do this analysis on the basis of various theories of civil and commercial law. The civil theories are: agency and representation (is A, who signed the contract containing the arbitration clause representing B?), third party beneficiary (is somebody who receives benefits from a contract a party to the arbitration agreement?), incorporation by reference, individual or universal transfer (e.g. is the party who has taken over a contract party to the arbitration clause that it contains?), estoppel, express or implied consent. Commercial or corporation law theories are alter ego and piercing the corporate veil, in cases of confusion and fraud.
All these theories are referred to by courts and arbitral tribunals but my impression is that in the United States, agency and estoppel are the theories which are most frequently used and in the rest of the world implied consent, i.e., the role that the non-signatory has played in the negotiation, conclusion, performance and/or termination of the relevant agreement. I should add that some jurisdictions adhere strictly to the principle of privity of contract and refuse in most cases to extend an arbitration clause to a non-signatory, at least on the basis of the theory of implied consent: England, Holland, Germany, the PRC, Russia.
What is your opinion on double-hatting?
I am definitely against double-hatting, the fact of accepting to be arbitrator and counsel in investment arbitration. When you sit as an arbitrator, you risk to be suspected to promote theories which will be of assistance to you in your counsel cases. It definitely raises an issue of ethics but also of personal liability of the arbitrator/counsel concerned.
In our firm, we have decided to only accept arbitrator’s appointments and never to act as counsel in investment arbitration.
If you had the power to implement a change in arbitration proceedings, what would it be?
I would impose a limited budget to be spent by each party in the arbitration in which I am sitting as an arbitrator, taking into consideration the characteristics of the case. I would also impose a limit of pages for each submission and each expert report and the number of requests for document production that each party would have the right to file.
What is your advice to young arbitration practitioners to succeed in their career?
There are nowadays a lot of young talented lawyers specialising in international arbitration. It is not easy for them to find their way. I encourage them to actively participate in the activities of arbitral institutions and committees, to publish articles on hot substantive issues, and to create a network. The people of the same generation who specialise in international arbitration are not competitors, they are allies, they are the people who are going to appoint you later as arbitrators. I realise that Covid-19 makes things more difficult. It is here that senior arbitrators have a role to play to do the best they can do the promotion of the young talented lawyers who work in their law firms.
What are your hobbies? What do you like to do in your free time?
I used to say that my main hobby is to make my wife happy. In the traditional sense, my hobbies are various. Art is my first passion, my oxygen. I visit art galleries and I collect contemporary art. I am also a wine lover, especially Burgundy and I have a nice collection of premium wines. In terms of sport, my wife and I love to play golf and we are also divers. To be successful in your professional career, you have to have other centers of interest than the law.