general remarks on the work of the Task Force from an institution’s perspective

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Alice Fremuth-Wolf (anonymous) dghenriques commented

The Draft Report was very helpful to us when considering whether to implement rules on TPF in the new Version of the Vienna Arbitration Rules 2018 (still in the drafting process). We have not yet seen many TPF-cases but see that this is a new issue that should be tackled by institutions and arbitration rules.

We had a Special Working Group dealing with this issue and came to the conclusion that it is too early for VIAC to implement rules as the discussion process in the arbitration community is still ongoing, TPF is not yet that widely used in this part of the world and we wanted to avoid to implement a rule that is not in accordance with the recommendations of the TPF Task force and that might have wideranging effects on the market not yet foreseen or intended. TPF exists and per se not to be discouraged as it might be the only way for some parties to be able to file a claim at all. The draft report reassured us that it is a very difficult task to find provisions to take into account all concerns and come to a balanced result.

For us the critical issues were the following that were also the main concerns for the Task Force:

(1) Definition of TPF: I agree with the approach of the Report to have a broad definition in order to encompass not only traditional forms of TPF that would run too short and give leeway to circumvention. In the other hand this should not lead to a discouragement of TPF as such.

(2) Disclosure requiremements. We were faced with the following questions: What should be disclosed, by whom, in what detail, and what is the most reasonable procedure of disclosing? Is the mere existence and identity of the TPF sufficient? The answers provided in the Report largely correspond to our thoughts.

(3) Costs: should costs of TPF be awarded to the winning Party as Party costs? Problem: this could amount to a contract to the detriment of a third Party that is forbidden in many jurisdictions. May an arbitral tribunal render cost orders directly against a TPF? The answer provided in the Report (no costs orders against TPFs) to the latter question seems sensible. In addition, provision on security for costs have to be seen in conjunction and have likewise to be tackled in order to avoid inconsistencies.

We are closely watching the progress of the report and its recommendations and will then re-evaluate whether to include a provision in the Vienna Arbitration Rules. We thank the Task Force for its excellent work and we will continue to closely watch the process!