In conversation with Sarah Grimmer, Secretary General, Hong Kong International Arbitration Center

Sarah Grimmer

Sarah Grimmer, a former senior counsel at the Permanent Court of Arbitration, was recently appointed as the Secretary General of the Hong Kong International Arbitration Center.

A graduate of the University of Wellington in New Zealand and Cambridge University in the United Kingdom, Sarah Grimmer practiced Refugee Law before becoming a member of the international arbitration group at Shearman & Sterling LLP (Paris). She spent three years as deputy counsel at the ICC International Court of Arbitration (Paris), and has been with the Permanent Court of Arbitration for the last decade.

In India to attend the NITI Aayog arbitration conference in New Delhi and the HKIAC arbitration clause negotiation workshop in Mumbai, Sarah caught up with with Bar & Bench’s Varun Marwah for a short interview.

Edited excerpts

Varun Marwah: What were some of the key takeaways from the NITI Aayog conference?

Sarah Grimmer: The panel session, which I participated in, focused on case management, the do’s and don’ts or best practices. The session centered on the Arbitration and Conciliation (Amendment) Act, 2015 with the panelists conveying their views on the amendments, especially with respect to Section 29A.

Varun Marwah: So are you for or against the twelve-month timeline stipulated under Section 29A?

Sarah Grimmer: I have concerns about it; I believe that it can cause problems. While it was included with the best of intentions considering the problems associated with delays, I don’t think it is a completely beneficial amendment. You will not find this kind of a time limit prescribed in any other modern jurisdiction.

A statutory time limit of this kind provides a party that wishes to obstruct the proceedings with an opportunity to do so. Many arbitral proceedings last more than twelve months, and do so legitimately. The case is not overly delayed but rather is complex or is divided into different phases. The average duration for HKIAC administered arbitrations, for example, is twelve and a quarter months from commencement of the arbitration to rendering of the award.

In a case which has legitimately been going on for more than twelve months, under the new Act, a party may unreasonably withhold its consent to the six-month extension, and may resist an application to the court for an extension, in which case the tribunal’s mandate may be terminated. This kind of procedural obstruction is really disconcerting, so I think there needs to be more questioning around the implications of the statutory time limit.

Varun Marwah: How is your new role at the HKIAC similar or different to your previous roles?

Sarah Grimmer: In terms of case oversight, the work at HKIAC is similar to that of the ICC Secretariat in Paris where we administered thousands of cases under the ICC Rules of Arbitration. Likewise at HKIAC, our primary function is to administer cases under our rules and other procedural rules. My principal role at the PCA was to act as secretary or a registrar to tribunals.

Varun Marwah: You have also emphasized on the need for a competent support staff at such institutions.

Sarah Grimmer: Yes, it is essential to have highly qualified staff within the Secretariat, comparable in qualification to those people with whom they interface. So when you are dealing with the best law firms in the world, your staff have to be on a par, so that when someone calls the Secretariat, they are able to speak to someone who has a sophisticated appreciation for the procedural issues at play in their case. To my mind, that is imperative.

Varun Marwah: Hong Kong and Singapore appear to have an almost synchronized approach towards third party funding. But why the hesitance towards litigation funding?

Sarah Grimmer: Hong Kong started the consultation process on Third Party Funding in Arbitration in 2013. A consultation paper was released in October 2015, which included a study of the practices in different jurisdictions and then in October 2016, the Law Commission Report was released.

The common law principles of maintenance and champerty have been held by the Hong Kong courts to continue to apply in Hong Kong and to prohibit third party funding of litigation, with some limited exceptions. There was some question as to whether these principles also applied to third party funding for arbitration following that question being expressly left open by the Court of Final Appeal in 2007 in Unruh v Seeberger.

The final report recommends that the Arbitration Ordinance be amended to state that the principles of maintenance and champerty do not apply to arbitration and associated proceedings under the Arbitration Ordinance. This does away with the doubt and brings the position of Hong Kong, i.e., that third party finding in arbitration is permitted, in line with other leading jurisdictions.

Varun Marwah: You have also spoken of the many procedural issues which you have faced during the course of your career.

Sarah Grimmer: Every stage of the arbitration involves its own procedural issues. To name a few: there are issues around the constitution of the tribunal. Appointments by institutions on behalf of parties are critical. Challenges to [the] arbitrator must be dealt with carefully.

There are also many procedural issues throughout the proceedings. For example, document production disputes—which arise in many major arbitrations—interim measure applications, security for costs applications, temporary restraining orders, time-tabling issues, disputes around the conduct of hearings. The list goes on.

Varun Marwah: Do you feel that the establishment of the Mumbai Centre for International Arbitration (MCIA) will have an adverse impact on HKIAC’s Indian client base?

Sarah Grimmer: The MCIA is an important development for domestic arbitration in India. During my time here, I have developed the strong impression that there is a real demand for institutional support in domestic arbitrations. There is a lot of ad-hoc arbitration in India, but not a lot of institutional arbitration in the domestic context.

To the extent that those domestic arbitrations are remaining ad-hoc, it will not have a big impact on the HKIAC, because I do not think those parties would have necessarily opted for administration by an international institution, although we could certainly provide that support.

Varun Marwah: We don’t see too much Indian participation at the HKIAC, why so?

Sarah Grimmer: Although HKIAC has been around since 1985, our case load involving Indian parties has not been very significant. One of the reasons being that Hong Kong was only gazetted in India in 2012. This allowed other institutions to gain a significant “head-start” in the jurisdiction over HKIAC.

Soon after the gazettal of Hong Kong by the Indian Government, we have stepped up our efforts to promote our services in India. We have seen an increase in the number of HKIAC cases involving Indian parties.

Varun Marwah: As someone with considerable arbitral experience, what would be your advice for the MCIA?

Sarah Grimmer: For MCIA, it would be wise for them to look to experienced institutions to see what works. HKIAC has been in existence for 30 years.

According to the sixth international arbitration survey released by Queen Mary University of London, HKIAC was ranked by users as the most preferred arbitral institution outside of Europe. Participants said their choice of institution was based on an assessment of the quality of its administration, neutrality and level of “internationalism”.

I think MCIA can draw inspiration from the tried and tested. It would be important for MCIA to promulgate a sound set of arbitration rules and to appoint excellent arbitrators when needed. The Centre should take all steps it can to ensure that proceedings under its auspices are completed efficiently and that any awards rendered are valid and enforceable.