Carita Wallgren-Lindholm – Keynote Speech

GOOD AFTERNOON

My name is Carita Wallgren-Lindholm and the program says that she will discuss the role of smaller states, seats and institutions in international arbitration.

It is a reasonable premise of my presentation that the lovely Edinburgh is situated in a smaller state and is deemed to constitute a smaller seat and that the Scottish Arbitration Centre can be held to constitue a smaller institution, all this relatively speaking

Likewise I believe that my home country Finland, Helsinki and our arbitration centre, the Finland Arbitration Institue, the FAI, fulfill those same criteria of being “smaller”. As do in fact the other Nordic countries, maybe with the exception of the Stockholm Chamber of Commerce Institution, the SCC, established, as its Finnish homologue, in 1917 and which jumpstarted in 1978 and has been something of a forerunner ever since.

And maybe it is not too bold to jump to the conclusion that I in a way representing what is “smaller” is why I have been invited to speak to you today. Thank you very much – I am delighted to be in Edinburgh with you this September day. It is easy to feel an affection for Scotland, for the local arbitration centre and its relentless champions all since its inception. You will know whom I mean. Not only because they are so likeable- but also since it all makes so much sense- in particular going forward as I predict.

It is well known that relaive newcomers in any sector can navigate more unfettered, can be more innovative and take more risk, have less luggage and less stakeholders defending status quo and acquired rights, and need not fear losing their established position by reform that turns out to be hugely unpopular among existing users. A parallel can be drawn to startups and niche law firms which often have proven to be fertile ground for innovation and who manage to challenge established corporations and big law. And we can all agree that the SAC has proven to be innovative, to say the least, in all the many areas that the arbitration community agrees need to be considered and even rethought today. Much as I also think it is uncontroversial that while every era has its need for rethinking, the need today is probably greater than ever before, at least in my lifetime. Many fundaments are, if not shaking, at least questioned (I need not mention the effects of the climate crisis, war, populism, on the one hand, and AI, diversity, multiculturality, learnings from covid, shift in generational mindset etc, on the other). It is interesting to see how themes for arbitration conferences increasingly, and in my view at long last, deal with non-technical themes- as illustrated by ICCA HongKong 2024: International Arbitration: a human endeavor. Ours is a people’s business!

So in addition to being more agile and more easily and quickly adaptable to the expectations of today, what can small states, seats and institutions bring to the table in this era, for, on the one hand a) disputing parties and, on the other b) dispute resolution in general, and thereby to the whole arbitration community.

A.I will commence by what I believe small actors can contribute to arbitration on and its continued development generally. (I will not be discussing commodity instituions or small states that have hundreds of institutions but mainly states with one arbitral institution, mostly found in its capital). I will be referring to “smaller actors” without distinguishing between the state, the seat or the institution; as we know, most institutions to some extent reflect their seat and the lex arbitri thereat, and even local arbitral practices – although often vehemently denied- (maybe with the exception of the ICC that is generally perceived as anational). The agglomera􀆟on of arbitration resources in certain seats often will have the effect that even if arbitrations are conducted according to what is called “best international practice”, tacit biases in favor of certain familiar procedural solu􀆟ons and the pictures in the heads of participants when filling gaps, are rarely as “anational” as claimed. And as we know, most institutional arbitration rules are not very prescriptive and do allow the Tribunal- or rather its Chair- to fill the many blanks with substantive content aligned with his or her legal culture, and put his or her color on the conduct of the proceedings. Which is ok of course. I think the aforesaid offers small actors certain advantages that I will discuss in greater detail below.

But before I elaborate more on my favorite topic of arbitral culture, I will deal with certain more tangible contributions of smaller actors: smaller and therefore, as said, more agile instututions can “afford” to be more experimental and can thereby function as a “testing laboratory” for the big ships that turn more slowly. The old and big institutions with global reach again have a heritage and established structures that the up-andcoming can adopt, model upon and test in their turn. This is conducive to healthy competition and, most important, mutually rewarding crossfertilization at best. In the same manner as the interaction between big law and the niche challengers.

I already menotined innovation- e.g. digitalization of arbitration- where I believe eg. the SCC, a smaller actor, has been seen as a forerunner. The SAC no doubt can be seen as a champion of advancing women as arbitrators (I make a fairness footnote here that arbitral institutions generally have led the way in advancing women arbitrators). And while some could debate the diversity ingredients of the SAC:s first all-female panel, the institution has certainly put its foot down audibly, and for the good. The same goes for greener arbitrations.

Smaller actors, as often regional and closer to the users in their state, also contribute to raising general awareness of international arbitration as a tool to solve disputes and thereby lower the threshold for using the institutions with global outreach. I witnessed a development in my own country over the decades that experience with the local institution increased confidence in small and midsized companies to also dispute before institutions such as the ICC or the LCIA. Thereby the tide lifts the small and the big boats alike-maybe a bit in the same fashion as adjacent fashion stores, while competing, also are said to increase the customer base for all.

B) I will then turn to what smaller actors can offer specific parties different from the big institutions: the regionality of a small actor can obviously lower the threshold for use, especially for small and mid-sized companies and for counsel that do not as of yet belong to the “global elite” of arbitration practitioners; the environment and the Institution’s secretariat feel familiar as also the manner in which they go about things. I have heard of nervousness in counsel from small jurisdictions when they call the Secretariat of a big institution for the first time. Regionality can also mean legal familiarity in the sense of the default tone of the proceedings (always of course depending on the Chair): more or less inquisitorial; focus on written or oral evidence; Prague or IBA rules of evidence as the natural choice etc.

I will entertain the question of what small actors can offer specific disputing parties by taking Scotland as an example (knowing that my knowledge is insufficient, not only because Scots law conceptually and structurally is not always easy to get your hands around) while trying also to speak more generally, and finding examples in other small actors.

There are ofc certain must haves for all arbitration actors, base atiributes and functions that are a must and it is for each actor to ask: what are then my distinguishing features, my competitive advantage, what do I offer beyond the base functions.

I would think that the first strategic question for a smaller actor when building up its operations and reputation is “who is my audience” or rather “who are my prospective users”. I think every institution hopes to be an international player but that is also a matter of degrees: regionally cross-border, spherically international (Commonwealth/Germanic world/Nordic countries) or global. No doubt that strategic choice also will evolve over time.

In all events, the base atiributes are obviously a stable legal environment and arbitration-friendly (or at least arbitration knowledgeable) judiciary, enforcement of awards, modern state of the art institutional rules, technical proficiency and good digitalization level in the institutional services offered, accessibility to knowledgeable and efficient secretarial case management well versed in the trade etc. In the studies, commissioned by Stockholm and Toronto in 2018 and 2012, respectively, on the necessary attributes for success of an arbitral seat, are further included, as expected, availability of proficient counsel, court reporters, translators, adequate hearing facilities, accessibility by air, hotels etc. This is not rocket science and I think Edinburgh fulfils them all, in addi􀆟on to your national language being the lingua franca of arbitration (need to think about ease of air accessibility, debatable as it is, and the train from Edinburgh to London is lovely). Then I believe a good arbitration curriculum at the relevant university is important to foster the new generations of practitioners to secure continuity (we fall short in Finland). Also, I believe, a perception of “neutrality” – a difficult and politically charged word- is important, in the sense that you are on no-one’s side (or even, you are not powerful). A civil servant in Finland recently said that maybe Scotland would be a good place to arbitrate border and alike disputes for the Nordic Sami population inhabiting Northern Norway, Sweden and Finland.

But I was not asked to speak to the elements of success or business plan for a relatively new smaller actor but to its role in the whole. So I go back to the question what a smaller actor like Scotland could offer specific parties. I will say though that I believe adoption of the model law is a critical element of success in small jurisdictions (also here my country falls short). It is not enough that the local arbitration law is reasonably similar (as we say in Finland)- the choice of this seat may fall already at the threshold if you need to engage local counsel to find out how and where the national law differs.

I believe that the greatest contribution of smaller actors to specific disputing parties and the arbitration world as a whole is MINDSET- or rather the absence of a certain mindset. Scots law is, I am told, a mixed law (civil and common law layers) and I have heard that Scottish lawyers are natural comparative lawyers. I firmly believe that attractiveness of a smaller actor lies in the openness of mind in considering the law conceptually and its practice. And this comprising all aspects of being a legal practitioner, and an arbitrator, deontology included. The relativism that is fostered in a place where borders, language, practices- or sometimes even existence- is never taken for granted. Within this paradigm there is no absolute way of doing things and non-colonizing nations rarely say “this is how we do it”; “this is how it is and has always been done” (and yes my vocabulary may have become affected by the fact that I live part time in a British Overseas Territory). How often don’t we hear said that “this is the best practice in international arbitration”. And while I agree that uniformization, standardization and convergence of international arbitration is the goal, I am often tempted to say “whose best practice are you referring to” since it is obvious that we all fill in the gaps in the system with ingredients familiar to us. I am suspicious when practitioners claim they are virtually anational in terms of legal culture, since this runs counter to my observations. (Even when I as a Nordic person and native Swedish speaker sit in Sweden, I still sometimes feel that I am the only one in the room who does not take a certain procedural approach for granted). Without being a behavioral scientist or anthropologist I dare say that a distinct advantage of natives of small nations lies in a certain humility and openness before other practices, mostly acting on the assumption that differences exist and that others may do things better. I grew up in the shadow of the iron curtain being told abroad that I was not truly western and as a speaker of a minority language I claim that my children in fact benefited from being on their toes when we had guests, wondering if the guest would speak their language and having to focus on reading the soft signs. Not taking anything for granted and feeling marginalized I believe can become an asset while being too established also attitude-wise can be a limitation going forward in today’s multi-disciplinary world aiming to be diverse.

When I spoke about my arbitrator practice at the Centenary of the Finnish Bar Association a few years ago I addressed the biases that I as an arbitrator know I need to manage. And to manage them we need to recognize (and embrace) the differences out there. I have come to believe that small actors tend to do this with greater ease. And maybe, as arbitrators, and actors, to understand the need to explain what we are doing and what we expect, even with the risk of stating the obvious. Everyone does not always understand the boilerplate the same way. And to achieve harmonization, we must let ourselves be bothered to explain, and explain again. So I think that a factory installation of “not always having it my way” will assist arbitrators and counsel alike to sit and plead in many jurisdictions in a manner that will help all participants- parties, colleagues and witnesses to feel that the environment is theirs and, to use a modern cliché, where they can be their best selves. I believe that is and will increasingly become the role and contribution of small actors, including Scotland.