Elaine is a partner whose career epitomises what it means to work in international arbitration. Qualified in England and Singapore, she has spent time in Paris and Tokyo, and worked for the last three years in Singapore. In January, she re-joined our team in Japan, where she continues to act as counsel in arbitrations under all the major institutional rules, as well as leading multi-jurisdictional investigations and advising clients on issues relating to bribery, corruption, fraud, corporate governance and compliance. Elaine also sits as arbitrator.
You are returning to Tokyo after your time in Singapore. How has Japan weathered the pandemic commercially and what kind of disputes are you expecting on your return?
Japan was significantly impacted by Covid. Its border closures were extensive and lifted only late last year. While the borders were closed, it was impossible to obtain visas for foreigners to enter Japan; companies faced real difficulties renewing their workforces, travelling for meetings or getting foreign consultants into the country for site visits, etc. Japan remains the third largest economy in the world, so there were high levels of activity domestically during the pandemic. Nevertheless, the economy remains highly dependent on international trade, which obviously slowed during Covid. Our work for Japanese clients involves supporting them at all stages of their international investments. On the disputes side, that may mean acting for a Japanese trading house in an arbitration arising out of a major infrastructure or natural resources project, for example.
Other world events have also had an impact on Japanese investors. We recently advised a Japanese client on a dispute involving a significant Russian energy project; many other clients' Russian investments have been impacted by sanctions as well as the pandemic. Covid also had a big impact on manufacturing, including as a result of the semiconductor shortage, so we anticipate numerous disputes in that sector too.
Now it has re-opened, we are seeing huge amounts of activity in Japan. I have been there a few times recently, including immediately after the border controls ended. There were lots of foreigners in Tokyo on business and much buzz around the city as activity levels returned to normal.
Your practice straddles international arbitration and investigations, including bribery, corruption and corporate governance. Is corruption on the rise and is arbitration effective for resolving disputes involving corruption?
Globally, the enforcement landscape has been very active in the last few years. We are seeing high levels of activity from national authorities, regulators and the multilateral banks. Japanese corporates and trading houses do business across the globe, including in regions where corruption is endemic. The nature of these investments, for example in the energy and infrastructure sectors, also mean clients frequently face requests for bribes or encounter illegal activity. Japanese corporations often acquire shareholdings in companies based in difficult jurisdictions, where corruption is commonplace. Pre-acquisition, it can be difficult to obtain a full picture of the target's customs and practices. Post-acquisition, it can be difficult to ensure those companies are compliant with our clients' head office requirements on bribery and corruption.
If there is a real allegation of corruption, the first step is to conduct an investigation to find out what happened and who is involved. We can then advise the client on its rights and obligations, including self-reporting requirements and internal processes. Where the investigation confirms there has been corrupt activity and the share purchase or shareholders agreement includes anti-bribery and corruption representations and warranties, our client can potentially sue the seller for breach. Most often, that will be in international arbitration. Breaches of this nature can cause clients significant damage, through the cost of running the investigation and – in some scenarios – where they have had to report to a regulator and pay a fine. Arbitration provides effective recourse that is enforceable virtually worldwide, thanks to the New York Convention.
Arbitration has always been a very international process, involving people from all over the world and extensive travel. Will the post-Covid world of virtual hearings and meetings mean an end to international arbitration as we know it?
Some of the travel is definitely gone for good, now that we know so much can be done remotely. I would expect most procedural hearings, for example, to be held virtually from now on. It is less clear what will happen with evidentiary hearings. A lot depends on the size of the dispute, the length of the hearing, the administering institution, and – crucially – the preferences of the arbitrators, parties and counsel. Most likely, we will end up with a hybrid approach. For example, witnesses who are unwilling or unable to travel to a hearing can easily be examined virtually. This was already happening before the pandemic, but is now more widespread and easier, thanks to Covid-driven advances in technology. The ability to host meetings and hearings virtually also makes it easier to get all the various participants together. This, in turn, should reduce delay and help the arbitration process run more efficiently.
Overall, I don't think arbitration will become less international. The field is international by its nature, involving a mixture of laws, legal systems, and the legal backgrounds of the parties, their lawyers and the arbitrators. I can't see that going away.
Diversity remains a hot topic, but there are signs of progress – particularly as regards gender. As an Asian female practitioner who also sits as arbitrator, how do you encourage parties to consider a broad range of arbitrator candidates? And are parties really better off with younger, more diverse tribunals than a bench of older, experienced usual suspects?
As counsel, we have a big part to play in encouraging clients to consider a broad range of candidates when they select an arbitrator. Herbert Smith Freehills is very focused on diversity; we have systems to help clients (and ourselves) appoint diverse tribunals. The firm maintains a list of female arbitrators, for example, and we aim always to include qualified female arbitrators in our suggestions to clients. I definitely think it's important to have a diverse range of arbitrators, not just a mix of male and female, but diverse in all respects: culture, nationality, ethnicity and legal background, for example. It makes sense to tap into the minds of people with a range of backgrounds; it is healthier for the outcome of the case and the profession – it helps us regenerate.
Moreover, the usual suspect arbitrators are extremely busy; appointing younger or less well-known practitioners ensures our clients get a tribunal that can give their dispute the time and attention it deserves.
What would you have done if you hadn't become a lawyer?
I love writing, so maybe a journalist. I would love to be a travel writer.
Where would you like to retire, and why?
Italy. It has gorgeous nature and amazing food; I love the people and the fashion, the lifestyle, and just the whole feel of it. I'd totally embrace la dolce vita!