 "Double-edged sword for London's arbitration crown")
There has been a lot of recent talk about the potential impact of Brexit on London's apex position in the worldwide pecking order of commercial arbitration. Sceptics are worrying about the possibility of other prominent centres, such as Paris, Singapore or Hong Kong, gaining ground.
As the result of the Brexit referendum now makes the UK's eventual disassociation with the EU (European Union) a certainty, the future of London's arbitration scenario and the iconic International Court of Arbitration, will undoubtedly receive much global attention.
If initial theories are to be considered, there is enough reason to put scepticism aside. A common consensus amongst experts in the field is that London's future in the sphere of international commercial arbitration is set to remain strong.
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"There will only be a marginal, if any, effect on London as a seat of arbitration. Commercial parties from all over the world select London as a venue for their international arbitrations because of its high standards of independence and integrity, built up over two centuries," said Sarosh Zaiwalla, senior partner, Zaiwalla & Co Solicitors.
Some professionals in the domain even venture to say the days to come could prove even more lucrative than before for the global arbitration capital. "London as an international commercial arbitration centre will continue to flourish. With the Brexit, the city might see even more arbitration-related activity" said Nishikant Deshpande, fellow, Indian Council of Arbitration.
Additionally, an exit from many of the former EU strictures and conflicts in laws might give London a further edge as the preferred seat of international commercial arbitration in the days to come.
London has long been the globally preferred seat for international commercial arbitration, with English law being the foremost choice for such agreements across the world, according to a 2010 Queen Mary International Arbitration Survey. This can be largely attributed to the UK's global reputation, efficient court structure, strategic geographic location and established common law system.
Nonetheless, Brexit will undoubtedly have an impact for the international arbitration situation, in both Britain and the EU. Key EU legislation on reciprocal enforcements jurisdictional issues, and contractual obligations such as the Brussels Regulation and Rome Conventions will no longer apply to the UK and might create complications in the short term.
Eventually, the UK could reach similar agreements with the EU again or seek to join the existing 2007 Lugano Convention or the 2005 Hague Convention on choice of court agreements, to regularise and potentially better the cross border position for the future.
In the interim, the UK's domestic arbitration law, the English Arbitration Act of 1996, is expected to manage the situation of enforcement effectively enough and whatever complications that might arise should be minimal. As the UK will still be a signatory to the New York Convention of 1958, the enforcement of London-based arbitration awards would still be validated globally under that system.
"Brexit could still be a double-edged sword for London's status as the hub for international commercial arbitration. It might not get impacted directly. However, its importance might gradually diminish due to the effect on its status as pre-eminent financial centre in the absence of freedom of movement," said Tejas Karia, partner, Shardul Amarchand Mangaldas & Co.
Some still expect the importance of Paris to rise as a preferred arbitration destination as a result of the recent referendum, with EU parties preferring the additional advantages of the Brussels Regulation framework and maintain regularity.
At the very least, a variety of contracts and investment treaties will need to be re-negotiated and made 'Brexit-proof'. Companies entering into arbitration agreements in the future will also need to be mindful of choosing the appropriate seat of the arbitration and governing law to mitigate any potential ambiguities in these uncertain times.
