In-House Counsel of the Parties - Chapter 3 - Behind the Scenes in International Arbitration
Ugo Draetta is Professor of International Law at the Catholic University of Milan, Italy. As an international arbitrator, he has acted in over 50 arbitration proceedings. Mr. Draetta is former Vice President and Senior Counsel -- International -- for General Electric Co. (USA); member of the Scientific Committee of the Italian Arbitration Association; member of the Board of editors of the Revue de droit des affaires internationales/ International Business Law Journal, published by Sweet & Maxwell. For more information see www.ugodraetta.com
Originally from Behind the Scenes in International Arbitration
CHAPTER THREE -- IN-HOUSE COUNSEL OF THE PARTIES
I. THE PLAYERS MOST CONSPICUOUS BY THEIR ABSENCE FROM THE ARBITRATION PROCEEDINGS
The parties’ in-house counsel are conspicuous by their absence from international arbitral proceedings.
In speaking of the parties’ in-house counsel, I mean to refer exclusively to those working in sophisticated, modern legal departments, whose general counsel reports directly to the CEO, controls the choice of outside counsel and contacts with them, and is an integral part of the company’s management. He or she is a business partner of the CEO and in the company’s organizational chart, is at the same level as those in other key corporate functions: finance and administration, human resources, sales and marketing, production, planning, and so on. The general counsel in such companies heads the internal legal department and is responsible for the management, either directly or via outside counsel, of all the legal issues confronting the company.
This model of the in-house legal department is more or less standard in American companies, but not in those of continental Europe, where the internal legal function is often subsumed under other corporate functions and its role relegated to that of minor matters such as debt collecting and performing straightforward corporate duties such as drawing up minutes of the board of directors, powers of attorney, and so on. When more important issues arise, management resorts directly to outside lawyers, circumventing the internal lawyers.
The situation in continental Europe, however, is changing fast, and now there are companies with in-house legal departments to rival those of American corporations.
IN-HOUSE COUNSEL OF THE PARTIES
12. The players most conspicuous by their absence from the arbitration proceedings.
13. Memo to in-house counsel on their role in an arbitration: (a) Choosing arbitration as a dispute settlement mechanism and drafting the arbitration clause;
14. ... (b) Managing and documenting pre-arbitration attempts at settlement;
15. ... (c) Contributing to the decision to initiate an arbitration;
16. ...(d) Selecting outside counsel and controlling them during the proceedings;
17. ... (e) Selecting the arbitrators in collaboration with outside counsel;
18. ... (f) Determining the arbitration strategy: written submissions, hearings and the role of corporate management;
19. ...(g) Organizing internal resources: claims, documents, witnesses and experts;
20. ... (h) Proactively participating in attempts at settlement.