Latham & Watkins’ Simon Bushell says managing public scrutiny is a crucial concern when choosing the arena for international legal battles
In recent years, London has been the venue for numerous high-profile Russian disputes fought out in the full glare of the public eye. But for the attention those cases have received in the Western media – with the public’s preoccupation with Russia’s big business and geopolitics – they might never have been brought. Certainly, it is impossible to imagine them ever having been brought in what you might consider the natural forum, Russia itself. Such cases highlight the importance of choice of forum when looking to engage the media.
Savvy and streetwise advisers understand how different jurisdictions and tribunals have different ground rules governing transparency and publicity around legal proceedings. So choosing a forum with a restrictive approach to media engagement can have a big impact on the tools available to them.
Often the choice of forum is determined upon signing a commercial agreement, long before any actual or particular dispute arises. Occasionally however, the choice can be made when a dispute crystallizes. If all other considerations – for example location of assets, judicial independence and relevant applicable laws – are evenly balanced, then a venue with a more media-friendly legal process could be decisive.
Generally speaking, if a dispute is heard in the ordinary courts of a particular country, the proceedings will be open to the public. On the other hand, if the dispute is being heard by way of a private arbitration process, the parties will most likely be constrained by contractual duties of confidence and the proceedings will be private.
There are nuances to these general propositions. There may be additional laws that restrict what information relating to ongoing proceedings can be published or broadcast by the media.
In the US, for example, although jury trials are commonly used in commercial disputes, the constitutional right to freedom of speech under the First Amendment is so enshrined that the press has a relatively free hand. But judges are responsible for directing jurors to refrain from paying any attention to the media; a potential juror could be disqualified if they have gained any awareness of the dispute from media coverage.
The position in the UK is different because all commercial cases are tried before a judge and, as in the US, judges are not considered to be influenced by the media (see “Order in the court,”). However, UK courts regulate how case documents can be used other than for the litigation itself. Briefing the media under these sorts of restrictions is a potential minefield.
Sometimes, media exposure is positively in the interests of one party – usually the claimant. For them, major financial centers such as London or New York will provide an easier route to develop media interest.
Offshore jurisdictions such as the Cayman Islands, British Virgin Islands or the Isle of Man tend to be less straightforward. Media access to materials and insiders may be hard to obtain and a claim may be viewed as less interesting because the forum is obscure and far away. This, of course, could be ideal for a litigant who wants to keep off the front pages. Then again, the media’s increasing suspicion of tax haven jurisdictions regarded as “sunny places for shady people” – particularly after the “Panama Papers” scandal – may actually encourage media interest. One way to elevate interest in proceedings in a far-flung location is to generate an appeal on an interim basis. For example, many Caribbean jurisdictions have final appeals that are heard in London by the Privy Council.
In arbitration, proceedings are confidential and therefore much less likely to be the focus of media attention. But that is not always the case. While most arbitration institutions have rules that build in privacy and confidentiality, some are more rigorous (and therefore more restrictive) than others. Media pressure can be achieved by launching satellite proceedings in a court against a party who has not signed the arbitration agreement. Later appeals or enforcement of arbitration awards in ordinary courts may bring previously confidential material into the public domain.
Investment treaty arbitrations have become an increasingly popular mode of dispute resolution if an investor feels that their interests have been unlawfully interfered with or prejudiced by a host state. These disputes are generally of considerable interest to the media, but parties are discouraged from briefing the media. There is, however, a view that such investment treaty cases should be made more transparent. It is worth noting that the largest award in legal history (to the best of my knowledge) arose out of an Energy Charter arbitration in The Hague involving Yukos – the $50 billion award was subsequently set aside by the public courts in The Hague, but until that point the case had been largely confidential.
In an effort to mirror the attractiveness of perceived confidentiality, some public courts have sought to adopt a “behind closed doors” approach. For example, in proceedings before the Singapore International Commercial Court – increasingly a hub for Southeast Asian (and more recently, Russian) disputes – parties can collectively agree to have the case heard entirely in private (see “London on the Singapore Strait?”). But even this approach, and the more robust arbitration rules, are unlikely to be watertight.
While no jurisdiction can guarantee a perfect situation, the variables within a company’s communications calculus will be materially affected by where the case is heard.
Head of Latham & Watkins’ London litigation team, Simon Bushell specializes in international disputes in the corporate, financial, commodities, private equity and banking sectors. Previously, he helped lead the London-based corporate fraud practice for Herbert Smith Freehills.
Latham & Watkins is a global law partnership with over 2,200 lawyers, specializing in complex business transactions.
Simon Bushell spoke to Jonathan Glass, a Partner in Brunswick’s London office.
Illustration: Jean-François Martin