P.R.I.M.E. Finance – benefits and challenges

The stated aim of the Panel of Recognised International Market Experts in Finance (abbreviated P.R.I.M.E. Finance) is to facilitate dispute settlement, reduce legal uncertainty and foster stability in the global financial markets. 

To achieve this, P.R.I.M.E. Finance seeks to be more efficient, cheaper, and predictable than both domestic courts and established arbitration centres. It has notably assembled a panel of experienced arbitrators that are familiar with the requirements and specifics of the industry. It has also based its arbitration rules on the 2010 arbitration rules of the United Nations Commission on International Trade Law (the UNCITRAL Rules), and established its seat in The Hague.

We set out below the benefits and challenges of using P.R.I.M.E. Finance's dispute resolution services. It also offers legal opinions and advisory services, as well as judicial training, and a library and specific database of relevant case law and papers. 

The benefits of using P.R.I.M.E finance

The benefits of using P.R.I.M.E. Finance as an arbitration institution can be summarised as follows:

A concentrated body of specialists.  

The panel consists of over 80 specialists in market practice, relevant law, arbitration and mediation, drawn from financial institutions, leading law firms, the judiciary, regulatory agencies and academia. It includes retired and sitting judges, central bankers, regulators, representatives from private practice and derivative market participants (both dealer and buy side). 

Greater certainty about who will arbitrate the dispute.  

This is because the tribunal will be drawn from its panel of specialists. 

P.R.I.M.E. Finance Arbitration Rules are based on the 2010 UNCITRAL Rules.  

The UNCITRAL Rules are well-established – having been first introduced in 1976 – and widely used. Many users will, therefore, be already be familiar with most of the rules used by P.R.I.M.E. Finance. 

Potential for fast resolution to disputes.  

There are some deviations from the UNCITRAL Rules, which primarily relate to expedited and emergency proceedings. Under Article 2(a) of the P.R.I.M.E. Finance Arbitration Rules, parties may agree to shorten proceedings if the arbitral tribunal approves. Article 26(a) and Annex C provide for emergency arbitral proceedings (i.e. provisional measures) prior to the constitution of the arbitral tribunal. 

Limited scope for appealing the award.  

This characteristic, however, is not unique to arbitrations brought under the rules of P.R.I.M.E. Finance. 

Awards benefit from enforcement under the New York Convention.  

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 obliges all 147 contracting States to recognise arbitral awards made in the territory of another contracting State as binding and enforce them in their own territory if required. Again, while this characteristic is extremely useful from the user's perspective, it is not unique to P.R.I.M.E. Finance but is common to all arbitration as long as the State in which the arbitration takes place and the State in which the award is being enforced are both signatories to the New York Convention. 

Award may be published in anonymous form.  

Under Article 34(5), an award may be made public with the consent of all parties. Furthermore, Article 34(5) permits P.R.I.M.E. Finance to publish an award or order in its entirety, in anonymised form, if no party objects within one month after receipt of the award or order.  The intention behind this provision is to build up a body of precedent case-law which can be relied upon in later proceedings to ensure consistency. 

Seat or place of arbitration in the Netherlands.  

The proceedings are located in a safe, tried and tested, arbitration seat.  The courts of the Netherlands will be available to support arbitration proceedings, if needed. 

The challenges of using P.R.I.M.E. Finance

The challenges of using P.R.I.M.E. Finance as an arbitration institution can be summarised as follows:

Untried and untested.  

As noted above, P.R.I.M.E. Finance was established on 16 January 2012 and it is unlikely to have administered any arbitration proceedings yet, and so it is not clear how effective an institution it is.  As such, the advantages set out above have are yet to be tried or tested.  This is in contrast with proceedings under the auspices of other arbitral institutions such as the ICC and the LCIA who have a long and wide-ranging experience in administering arbitration proceedings.  

Uncertainty about the doctrine of precedent.  

While P.R.I.M.E. Finance's intention to develop a body of precedent case-law is interesting and attempts to deal with the perceived inconsistency of arbitral decisions, it remains to be seen how the system will function.  For example, there is no provision to give the doctrine of precedent binding force on later P.R.I.M.E. Finance arbitral tribunals.  If it is merely to be persuasive, then this is little different to the situation as it stands in other arbitration proceedings which may and do look to judgments of national courts for assistance. 

Risk of lack of anonymity.  

As noted above, in the interests of developing a doctrine of precedent P.R.I.M.E. Finance may publish entire awards or orders in anonymised form without the consent of the parties under Article 34(5).  There is a risk that party anonymity could be lost as the identity of the parties may be obvious from the content of the publication. 

Availability of arbitrators. 

Given that the panel of P.R.I.M.E. Finance is currently limited to approximately 80 experts, there may be an issue of availability of those experts to hear disputes.  The experts do not work for P.R.I.M.E. Finance on an exclusive basis.  A number of them are in demand and already have difficulty in providing sufficient availability in other arbitration proceedings.  This could become an issue as users are restricted to appointing experts from the P.R.I.M.E. Finance panel. 

Background and experience of arbitrators.  

An inherent challenge in relying on a panel of experts is that the scope of industry expertise and nationalities available may not be fully representative.  This may become less of an issue as the panel expands its numbers, but, for the time being, given the restriction to appoint experts from the panel, it may prove difficult to find experts with the background and experience required to deal with certain particular disputes. 

Overall, P.R.I.M.E. Finance is an interesting project and could provide a valuable contribution to resolving complex financial disputes.

Fonte:http://www.allenovery.com/publications/en-gb/Pages/P-R-I-M-E--finance-%E2%80%93-benefits-and-.aspx