REFLECT ON...
What creditors can do when a sovereign nation defaults?
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FEATURING Jamie Drinnan explains Arbitration Agreements — wording required to exclude a right of appeal P6 on a point of law LEGAL LIGHTS • ISSUE 18
Author profile with Daniel Greenberg, editor of Craies on Legislation, Stroud’s Judicial Dictionary, Jowitt’s Dictionary of English Law and General Editor of P14 Westlaw UK’s annotated statutes
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LEGAL LIGHTS • ISSUE 18
FEATURES
CONTENTS
24
16
Regulatory Muscle: FSA still swinging, while on the ropes
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Author profile
What can Creditors do when a sovereign nation defaults?
ALSO INSIDE 4 WELCOME 5 LIGHTS NEWS 6 ARTICLE Jamie Drinnan explains arbitration agreements – wording required to exclude a right of appeal on a point of law 10 MISSED OUT ON SOME KEY 2009 TITLES? 14 AUTHOR PROFILE Author of Jowitt’s Dictionary of English Law, Stroud’s Judicial Dictionary, Craies on Legislation 16 ARTICLE - FEATURE What can Creditors do when a sovereign nation defaults? Mike Blake/REUTERS
19 BOOKSHOP All the best from the Thomson Reuters Legal Library 22 ADVERTORIAL Archbold: International Criminal Courts Practice, Pleading and Evidence Description A paddle boarder makes his way along the coastline after sunset in Cardiff, California, January 31, 2009. REUTERS/Mike Blake
24 ARTICLE Regulatory Muscle: FSA still swinging, while on the ropes 27 LEGAL BREAK
LEGAL LIGHTS • ISSUE 18
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WELCOME
WELCOME TO LEGALLIGHTS...
Cover image: REUTERS/Ognen Teofilovski A view of Dojran Lake, 170 km (106 miles) south of the Macedonian capital Skopje, is seen February 5, 2009. The lake survived an ecological disaster after a drought and excessive use of its water, which caused its water level to fall nearly 10 meters.
In this issue Jamie Drinnan, an associate in Wragge and Co’s Commercial Litigation team, confirms that clear and unequivocal wording is required if the parties to an agreement wish to exclude a right of appeal from an arbitral award. Daniel Greenberg, editor of Craies on Legislation, Stroud’s Judicial Dictionary, Jowitt’s Dictionary of English Law and the General Editor of Westlaw UK’s annotated statutes, takes us through a typical day in the life. We take a look at the legal aspects of sovereign debt restructuring and what creditors can do when a sovereign nation defaults with Dr Rodrigo Olivares- Caminal. We also hear from Christopher Elias, Westlaw Business Currents author for Europe, about how The Financial Services Authority (FSA) has been flexing its regulatory muscle. And as always we look at the latest new titles and editions from our publishers around the world and we highlight some of the major new books that have already been published this year.
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EDITOR Robyn Clayton robyn.clayton@thomsonreuters.com WRITERS Jamie Drinnan, Daniel Greenberg, Dr Rodrigo Olivares and Christopher Elias DESIGN Thomson Reuters (Legal) in-house design team PHOTOGRAPHY Reuters, Corbis SALES Martin Reed martin.reed@thomsonreuters.com Rodrick Anderson rodrick.anderson@thomsonreuters.com Leila Lobo leila.lobo@thomsonreuters.com PRINTING Abbeystar Print Solutions www.abbeystar.co.uk DISTRIBUTION Document Despatch www.documentdespatch.com
LEGAL LIGHTS • ISSUE 18
NEWS
LIGHTS NEWS
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LEGAL LIGHTS • ISSUE 18
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ARTICLE – FEATURE
ABOUT THE AUTHOR Jamie Drinnan is an associate in Wragge & Co’s Commercial Litigation team. A specialist in international commercial arbitration, he acts for clients in arbitrations under all the major arbitral rules, including ICC, LCIA and UNCITRAL, in various locations around the world. In addition, Jamie has extensive experience litigating disputes in the English courts, with a particular focus on disputes of an international nature.
ARBITRATION AGREEMENTS JAMIE DRINNAN (Wragge & Co LLP)
WORDING REQUIRED TO EXCLUDE A RIGHT OF APPEAL ON A POINT OF LAW Shell Egypt West Manzala GmbH v Dana Gas Egypt Limited confirms that clear and unequivocal wording is required if the parties to an agreement wish to exclude a right of appeal from an arbitral award.
THE CASE
SUMMARY
“The dispute shall be submitted to the arbitrators in such manner as they shall deem appropriate and the decision of the majority of the arbitrators, rendered in writing, shall be final, conclusive and binding on the parties, and the judgment upon such decision may be entered in any court of a country having jurisdiction.” (Emphasis added.)
A recent decision in the Commercial Court considered the extent to which the words “final, conclusive and binding” can be construed as excluding a right of appeal on a point of law under section 69 of the Arbitration Act 1996 (“the 1996 Act”). Section 69(1) of the 1996 Act provides that: “Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings.” Mrs Justice Gloster, in her judgment in Shell Egypt West Manzala GmbH v Dana Gas Egypt Limited, agreed with Mr Justice Ramsey’s stance in Essex County Council v Premier Recycling Ltd that the words “final and binding” are not sufficient to exclude a right of appeal on a point of law. Her judgment reinforces the need for parties to use clear and unequivocal drafting in their arbitration agreements when seeking to exclude a right of appeal.
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In Shell Egypt West Manzala GmbH v Dana Gas Egypt Limited, Mrs Justice Gloster considered the effect of an arbitration clause which included the following:
A dispute had arisen between the parties which had been submitted to arbitration in accordance with the above clause. An award was subsequently made by the tribunal in favour of Dana Gas. Shell then applied to the court for permission to appeal the award under section 69 on points of law arising in it. Dana Gas cross-applied for an order that the court had no jurisdiction to hear such an appeal as the parties had expressly excluded the right to appeal in their arbitration agreement.
THE SUBMISSIONS While it was not in dispute that section 69 permitted the parties to an arbitration agreement to exclude any right of appeal to the court under that section, the argument focused on whether the emphasised words in the arbitration clause above excluded that right of appeal.
LEGAL LIGHTS • ISSUE 18
Dana Gas submitted that the combination of words “final, conclusive and binding” showed that the parties had agreed in unequivocal terms that there should be no ability to appeal against the Award. It made the following main submissions: • The plain intent and meaning of that wording was that any award should be final and binding on the parties, and conclude all matters in issue between them without further argument or recourse. • Notwithstanding the decision in Essex County Council v Premier Recycling Ltd that the words “final and binding” were insufficient by themselves to amount to an exclusion of the right of appeal, the addition of the word “conclusive” was intended to supplement the words “final and binding” and was therefore intended to exclude a right of appeal so far as the parties were contractually able to do so. • The parties in this case had gone out of their way to modify the usual provisions of the UNCITRAL Rules (which refer to an award being final and binding, but do not state that it is “conclusive”) by inserting the word “conclusive” into the arbitration provisions. It was therefore particularly important to ensure that the word “conclusive” was given meaningful effect. The word could not be dismissed as merely boiler-plate. The parties must be taken to have intended to provide for the arbitral process to conclude all matters in issue without recourse to the court.
SHELL
...the use of the words ‘final and binding’, in terms of reference of the arbitration are of themselves insufficient to amount to an exclusion of appeal
Shell contended that Dana Gas’ submissions should be rejected and made the following main submissions: • Section 58(1) of the 1996 Act provides that, unless otherwise agreed by the parties, an award made by a tribunal pursuant to an arbitration agreement was “final and binding” on the parties. Section 58(2) expressly provides that this does not affect the right of a person to challenge the award in accordance • with the provisions of Pt 1 of the Act (which includes section 69). The arbitration clause in issue went no further than this and therefore did not exclude any rights of appeal. • Use of the words “final, conclusive and binding” merely indicated that an award made by an arbitral tribunal should be res judicata between the parties. The words said nothing about whether a party had a right of appeal or a right to seek permission to appeal. • In Essex County Council v Premier Recycling Ltd, Ramsey J held that the words “final and binding
LEGAL LIGHTS • ISSUE 18
decision” did not exclude the parties’ rights under section 69 and that, for the purposes of section 69(1), any agreement to exclude the effect of that section had to be clear. The word “conclusive” added nothing to “final” or “binding” and fell far short of the clear words that would be needed to exclude the parties’ statutory rights. • It was not difficult to draft a clear agreement to exclude a party’s statutory rights under section 69. Examples that achieved such a result can be found in the Rules of the London Court of International Arbitration (LCIA) (r 26.9): “All awards shall be final and binding on the parties. By agreeing to arbitration under these Rules, the parties undertake to carry out any award immediately and without any delay …; and the parties also waive irrevocably their right to any form
7
of appeal, review or recourse to any state court or other judicial authority, insofar as such waiver may be validly made;” …and the International Chamber of Commerce (ICC) Rules (art 28.6): “Every Award shall be binding on the parties. By submitting the dispute to arbitration under these Rules, the parties undertake to carry out any Award without delay and shall be deemed to have waived their right to any form of recourse insofar as such waiver can validly be made.”
wording is necessary, albeit that no express reference to section 69 is required. • In the context of a fairly standard arbitration clause, the use of the words “final, conclusive and binding” in isolation would not convey to a reasonable person that the parties had agreed to exclude all rights of appeal on points of law under section 69.
• By way of contrast, the UNCITRAL Rules simply provide (by art 32(2)) that “The award shall be made in writing and shall be final and binding on the parties. The parties undertake to carry out the award without delay”.
• Although, on their face, the words “final, conclusive and binding” are words of considerable width, the reality is that the expression “final and binding”, in the context of arbitration and arbitration agreements, has long been used to state the well-recognised rule that an award is final and binding in the traditional sense and creates a res judicata and issue estoppel between the parties.
It had never been suggested that the effect of this provision in the UNCITRAL Rules was to exclude the parties’ rights under section 69.
• The conclusion reached by Ramsey J in Essex County Council v Premier Recycling Ltd is correct, namely that:
CONCLUSION
• “...the use of the words ‘final and binding’, in terms of reference of the arbitration are of themselves insufficient to amount to an exclusion of appeal.”
The judge held that the phrase “final, conclusive and binding” is not to be construed as an agreement excluding the parties’ rights of appeal under section 69 of the 1996 Act. The judge concluded that: • In order to amount to an agreement as envisaged by section 69(1) of the 1996 Act, sufficiently clear
• By adding the word “conclusive”, the parties should not be taken to have gone out of their way to modify the usual provision of the UNCITRAL Rules, so as to exclude any statutory right of appeal on a point of law under section 69.
COMMENT The Commercial Court’s judgment makes it clear that the words “final, conclusive and binding”, or similar words in an arbitration agreement, simply restate the general rule that an award creates a res judicata and issue estoppel. If the parties wish to exclude a right of appeal from an arbitral award, clear words to that effect are required—either by adopting the LCIA or ICC Rules (referred to in the judgment and quoted above) or by making an unequivocal statement to that effect in the arbitration clause.
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LEGAL LIGHTS • ISSUE 18
REUTERS
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LEGAL LIGHTS • ISSUE 18
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This issue we speak to Daniel Greenberg, the Editor of Craies on Legislation, Stroud’s Judicial Dictionary, Jowitt’s Dictionary of English Law and the General Editor of Annotated Statutes on Westlaw UK
AUTHOR PROFILE Could you tell us about your professional background as a barrister and parliamentary draftsman? I went straight to the Bar from University, and after pupillage joined the Lord Chancellor’s Department, then one of the most interesting and enjoyable homes for a lawyer in the public service. I enjoyed working on legislation more than anything else, and after a few years I joined the Office of the Parliamentary Counsel – where all Government Acts of Parliament are written – and I have been there ever since. How has the legal profession changed from when you first started out? Fewer lawyers even bother to pretend that they want to change the world rather than just make money. What do you think are the key challenges facing practitioners today? To re-establish a perception of the law as a
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genuinely useful profession, whose primary aim is to avoid disputes rather than to foment and profit from them. Law is absolutely essential to society, and lawyers can rightly see themselves as a vital public-service profession: but too often they are perceived as doing much more harm than good. I have a good friend at the human rights and criminal bar who has spent his entire career thinking only of how he can help others to avoid injustice: but too few of the public even know that lawyers like that exist. The only important challenge for the profession is to change the perception of lawyers as fundamentally selfserving (by changing the underlying reality). The last edition of Jowitt’s Dictionary of English Law published over 30 years ago, what were the key challenges you found in the updating of this dictionary? The biggest problem was knowing what not to throw away. An enormous amount of Jowitt was historical even when the work was first published 60 years ago: but just to rip out everything old
LEGAL LIGHTS • ISSUE 18
would have been a horrendous mistake. In legal research and practice it is often necessary to understand concepts used centuries ago; and part of the beauty of Jowitt has always been its combination of history and modernity. What are the key recent changes that have affected the contents of Jowitt’s Dictionary? Some of the most important fields of law – housing law, environmental law, discrimination law, human rights law, European law and administrative law – barely existed when the last edition was published. We had to commission experts in these fields to start more or less from scratch. You are the author of Craies on Legislation, Stroud’s Judicial Dictionary and the Editor of Annotated Statutes on Westlaw UK. How do you manage to juggle your time between writing and your day-to-day work as a parliamentary draftsman? Until 2008 I juggled my time by a process of juggling. At the end of 2008 I went part-time as a civil servant, precisely because I wanted to have more time for my private writing projects, including launching the Westlaw UK Annotated Statutes, an exciting concept that required a lot of attention. Do you have any other projects on the horizon? I published a short work about religious politics earlier this year; my next project is to produce a much longer novel, which makes all the points that I made in the first book but much more effectively. When that’s done, there are plenty more ideas.
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How do you relax in your spare time? I collect old legal documents, but I am not allowed to keep them at home and enjoy them in my spare time because they are “old and smelly”. My wife Julia and my four children – Yisroel, Avi, Shira and Elisheva – are capable of absorbing as much of my time as we can all manage, although none of it seems to be very relaxing. Ultimately, the bath is the only place in this world where true relaxation is to be found. Take us through a day in the life of Daniel Greenberg I get up in time to be late for synagogue at 7. Then I cycle to Whitehall if it is a Parliamentary Counsel day, or on other days to my parents’ home where I have converted my old bedroom into an office. If in Whitehall, I work extraordinarily hard for about half an hour and spend the rest of the day interrupting colleagues and preventing my assistant from getting any
LEGAL LIGHTS • ISSUE 18
work done. Unlike most of my colleagues, I hold lots of meetings, because they are so much more fun than working. I generally get home some time between 6 and 8 o’clock. The evenings (and weekends) are occupied with Westlaw emails, other writing work, persecuting my son (the other one is studying abroad), being unjustly accused of persecuting my daughters, eating (my wife is a superb cook), attending meetings about one or other of my Jewish communal responsibilities and, whenever possible, the bath. Daniel Greenberg is a part-time Parliamentary Counsel and a part-time author and legislation consultant; this article is written in a private capacity and represents purely personal views.
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ARTICLE
WHAT CAN CREDITORS DO WHEN A SOVEREIGN NATION DEFAULTS? DR RODRIGO OLIVARESCAMINAL
• Approach of new creditor nations like China adds uncertainty • Centralised approach to deal with default have lacked support from all parties The only practical solution for the vast majority of creditors faced with a sovereign debt default will be to enter into a restructuring proposed by the sovereign debtor warns Dr Rodrigo OlivaresCaminal, in his new book Legal Aspects of Sovereign Debt Restructuring. In his book Dr Rodrigo Olivares-Caminal explains that although debt holders may obtain favourable court rulings to collect money owed by a sovereign actually trying to enforce the ruling to gain assets through litigation may be a “futile and hopeless labour”.
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Most sovereign assets held outside a sovereign debtor’s own jurisdiction are protected by sovereign immunity or other legislation. Protected assets include: • Diplomatic missions such as embassies • Payments to and from multilateral organisations such as the IMF • Central bank reserves and • Military assets In the case of a default other sovereign assets will be quickly repatriated. Sovereign debt expert Dr Rodrigo OlivaresCaminal says that the risks involved with funding years of litigation, often across several jurisdictions, makes legal action appropriate only for the most sophisticated distressed debt traders.
LEGAL LIGHTS • ISSUE 18
Is China a wildcard? Dr Olivares-Caminal says in “Legal Aspects of Sovereign Debt Restructuring” that a wild card in any sovereign defaults of the future will be the role played by new debt holders such as China (particularly in the area of bilateral debt). Comments Dr Olivares-Caminal: “Countries like China and their sovereign wealth funds are now huge providers of debt but because their status as major creditors is new they have not been active participants in a sovereign debt restructuring before. There is the frequently voiced concern that China’s policy on lending is partly driven by geopolitics. That may bring any future debt restructuring into completely unchartered territory.” Market solution only foreseeable approach Dr Olivares-Caminal explains in “Legal Aspects of Sovereign Debt Restructuring” that opposition from both low and high income countries (including the US) to IMF proposals to create a statutory framework for sovereign defaults means there is no statutory or otherwise regulated approach to dealing with a sovereign debt restructuring.
So far the market has managed to find solutions for almost all sovereign defaults. Even if a statutory approach did exist there are very few sanctions available to force a sovereign nation to stick to agreed rules
Dr Olivares-Caminal says that although the UN (assisted by Dr Olivares-Caminal) is working on voluntary guidelines these are likely to be several years away. Dr Olivares-Caminal says that although a statutory method for dealing with a sovereign default might seem superficially attractive a market based solution by negotiation between the debtor nation and its creditors is likely to be the best way forward.
LEGAL LIGHTS • ISSUE 18
Adds Dr Olivares-Caminal: “So far the market has managed to find solutions for almost all sovereign defaults. Even if a statutory approach did exist there are very few sanctions available to force a sovereign nation to stick to agreed rules.” Under negotiations between Argentina and its bondholders over its 2004 debt restructuring creditors saw their 92% “haircut” reduced to 75%. With no statutory route likely to appear on the horizon to guide sovereign debt restructurings bondholders will have to enter negotiations under “collective action clauses” (CACs) of the relevant bonds. A CAC allow a majority of bondholders to agree a debt restructuring that then becomes binding on all bondholders. This stops a minority of bondholders endlessly preventing a restructuring from going ahead – often in the hope of getting better terms for their portion of the debt. However, Dr Olivares-Caminal says that based on IMF data close to half of tradeable bonds do not have this clause (55.8% in 2005) do not have a CAC. Dr Olivares-Caminal also says that one obstacle to bondholders getting a relatively swift resumption of payments (albeit with a substantial haircut) through an agreed restructuring is where a distressed debt fund (vulture fund) acquires a large enough holding in a smaller issue of debt to constitute a blocking holding. Legal Aspects of Sovereign Debt Restructuring is available from www.sweetandmaxwell.co.uk
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REUTERS/Jose Manuel Ribeiro
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• Provides a comprehensive guide to the EU regulation and competition law in the electronic communications, broadcasting and internet sectors
April 2010 £560 / €630 4
Aug 2010 £625 / €700
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TELECOMMUNICATIONS, BROADCASTING AND THE INTERNET: EU COMPETITION LAW AND REGULATION 3RD EDITION Laurent Garzaniti
• Gives you authoritative answers to questions such as: Is a certain type of trademark registrable in a particular country? Can you file an opposition against an application to register a trademark? Must you use a trademark to maintain a registration’s validity?
• Addresses not only the theoretical underpinnings of research, but also the practicalities of writing, conducting, analysing and reporting
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LOOSELEAF
Margaret McKerchar
• Assists researchers to make sound choices to effectively address their research objective
TRADEMARK PRACTICE THROUGHOUT THE WORLD
SWEET & MAXWELL
June 2010, 9781 847 03415 1 £195 / €273 7
KEATING ON NEC3 David Thomas QC assisted by Keating Chambers • Provides detailed guidance on the three contracts that comprise the NEC3 suite of construction contracts • Reproduces the three NEC3 contracts in full – with clause-by-clause commentary explaining how they are intended to operate
CARSWELL
• Gives invaluable assistance for drafting, with practical discussion on why particular clauses are used and possible amendments
TAXATION OF CORPORATE REORGANIZATIONS
• Highlights ambiguities and explains questions of interpretation that can arise
Davies Ward Phillips & Vineberg LLP, Colin Campbell, Raj Juneja, Paul Lamarre, Siobhan Monaghan
Oct 2010, 978 1 847 03331 4 £193 / €271
• This in-depth, applied approach will enable practitioners involved in tax planning to easily research and apply the tax law and requirements applicable to corporate reorganizations to their work. July 2010, 978 0 7798 2287 4 £70 / €80 20
LEGAL LIGHTS • ISSUE 18
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MORAL RIGHTS
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Kevin Garnett QC and Gillian Davies
Paul Cohen and Arthur Marriott QC
• Presents a comparative analysis of moral rights in jurisdictions around the world
• Provides a comprehensive guide to international anti-corruption law and practice from a UK perspective
• Examines moral rights in more than 25 major jurisdictions, including France, Germany, Russia, India, China, Japan,USA and Brazil
• Considers the US Foreign Corrupt Practices Act and OECD Anti-Bribery Convention
• Enables readers to compare moral rights protection in established civil law jurisdictions with those in common law countries Aug 2010, 978 0 421 72940 7 £165 / €231 9
8 EDITION
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ISLAMIC FAMILY LAW RAFFIA ARSHAD • Helps readers gain understanding of the basic concepts of Islamic Family Law and how they can use the English legal system to satisfy the needs of Muslim clients – how to proceed with the case and the most appropriate course of action
• Provides a clear, narrative account of mental health law in England and Wales
• Deals with the roles and duties of social workers, doctors and families • Goes through the law in clear language for legal and non-legal practitioners alike • Examines the legal definition of mental disorder and establishes the grounds for compulsory powers
CLERK & LINDSELL ON TORTS PROFESSOR MICHAEL A JONES
Oct 2010, 978 1 847 03891 3 £235 / €329
5TH EDITION
• Deals with the practical aspects of anticorruption investigations, including forensic and accounting issues
• Covers all aspects of the protection of industrial designs (mass-produced products) in the UK, including the European Design Directive
• Considers copyright protection for industrial designs
Brenda Hale, Justice of the Supreme Court of the United Kingdom
• Steers readers through the legal process of dealing with the mentally ill, from admission to hospital and treatment to leaving hospital and community care
20TH EDITION
• Examines how the WTO agreement has affected compulsory licensing
MENTAL HEALTH LAW
• Explains anti-corruption laws and investigative regimes in a variety of major common and civil law jurisdictions
Martin Howe QC
• Interprets major case law, including many important decisions on unregistered design right
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Aug 2010, 978 0 414 04172 1 £145 / €203
RUSSELL-CLARKE & HOWE ON INDUSTRIAL DESIGN TH
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INTERNATIONAL CORRUPTION
• Unrivalled breadth and depth of coverage on all areas of tort law • Deals with all areas of tort, including negligence, defamation, nuisance and trespass, plus statutory torts
June 2010, 978 0 414 04169 1 £69 / €97 14
A PRACTITIONERS GUIDE TO INTERNATIONAL COMMERCIAL ARBITRATION
• Sets out the general principles, including liability and causation
Steven Finizio and Duncan Speller, Wilmer Hale
• Establishes responsibilities, obligations and entitlements
• Details the contractual arrangements necessary to provide for arbitration in the event of a dispute, and the process of the arbitration itself
• Deals with both individual and commercial torts • Deals with each tort individually, chapter by chapter September, 978 1 847 03796 1 £335 / €469
• Takes the reader step-by-step through the process, from commencement to enforcement of awards • Includes checklists, glossary and lists of contacts July 2010, 978 0 4140 4304 6 £130 / €182
• Details not only matters relating to marriage (nikah) and divorce (talaq) but also more complex issues such as forced marriages and adoption
AUG 2010, 978 1 847 03599 8 £87/ €122
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YOUR ESSENTIAL COMPANION TO THE INTERNATIONAL CRIMINAL COURTS
ARCHBOLD: INTERNATIONAL CRIMINAL COURTS PRACTICE, PLEADING AND EVIDENCE Archbold International Criminal Courts provides a comprehensive guide to the practice, procedure and rules of evidence applicable to all international criminal courts.
Information is easy to find and follow, making the task at hand simpler for you. The work presents the material in a comprehensive manner with detailed annotation. Commencing with a valuable history of the ICC, you are also able to gain helpful background knowledge of the Court.
So that you can efficiently prepare for a case and follow it through to the best conclusion, the work advises on pre-trial procedure and offers guidance on directly participating in trial proceedings. What’s more, it details how to manage specific offences such as crimes against humanity, crimes of aggression and genocide, as well as incorporating the topics of sentencing, appeals and legal aid.
EXPERT COMMENTARY GIVES YOU A DEEPER INSIGHT The authors, Karim Khan and Rodney Dixon, helpfully disperse commentary between carefully selected sections, parts of statutes and drafts treaties, so further understanding can be gained of the subject at hand. But that’s not all…
COVERS EVERY TYPE OF INTERNATIONAL COURT No matter which international court you are practicing in, this is the work to have at hand. It covers the ICTY, ICTR, ICC, ECCC and UN Special Courts for the prosecution of serious international crimes in Sierra Leone, Cambodia and Lebanon.
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The work also comes with a back of book CD-ROM as part of your purchase which includes essential appendices, including the relevant parts of the statutes and rules governing the structures of the various international courts and tribunals together with their powers to obtain co-operations from states and their powers of coercion. Your map through the International Courts • Provides a comprehensive guide to the practice, procedure, and rules of evidence applicable to all international criminal courts • Covers the rules, processes and decisions of trial and appellate chambers of the International Criminal Tribunals • Advises on how to prepare for cases and directly participate in trial proceedings
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• Details how to manage specific offences such as crimes against humanity, crimes of aggression, genocide etc • Covers the emerging field of victim participation and reparation • Covers the ICTY/ICTR/ICC/ECCC, UN Special Courts for the prosecution of serious international crimes in Sierra Leone, Cambodia and Lebanon • Disperses commentary between the carefully selected sections, parts of statutes, draft, treaties etc. • Includes essential appendices on CD-ROM including the relevant parts of the statutes and rules governing the structures of the various international courts and tribunals together with their powers to obtain cooperation from states and their powers of coercion 3rd edition, November 2009 £304.23(£299.00 + £5.23 VAT)
“ Without this uniquely honed text book, it would be impossible for practitioners to navigate through the maze of procedural and substantive law, touching areas well beyond Europe, from Cambodia to Sudan” Michael Mansfield QC, leading Defence Counsel before the ICTY
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WHAT’S NEW FOR THE 3RD EDITION There has been a marked increase in the work of all the courts. The jurisprudence has dramatically multiplied, with hundreds of decisions each month, especially in the procedural field. This has meant a huge amount of updating for this new edition including: • Latest jurisprudence from the trials and appeals in the ICTY and ICTR • Coverage of new courts which are only getting started such as the ECCC • New chapter on victim participation • Appendices on Cambodia and Lebanon including the new rules of procedure and evidence for Lebanon What’s more, the 3rd edition will now include a back-of-book CD-ROM which includes appendices so all the information you need is to hand.
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ARTICLE
WESTLAW BUSINESS ARTICLE
REGULATORY MUSCLE: FSA STILL SWINGING, WHILE ON THE ROPES CHRISTOPHER ELIAS (UK) Westlaw Business Currents
The Financial Services Authority (FSA) has been flexing its regulatory muscle, even while its standard-bearer, Hector Sants, is retiring. Recent moves include record fines and criminal proceedings. Overall, the FSA has stepped up its enforcement and is upping the ante, in particular, on market abuse. At the same time, the recent resignation of the FSA’s Chief Executive, Sants, threatens to undermine the FSA’s ability to go on fighting. Hector Sants resigned as chief executive of the FSA earlier this month amid fears that the Conservative Party may abolish the FSA should
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they come into power. Mr Sants, who was appointed chief executive in 2007, has led the city regulator through a period of unparalleled turmoil, with the FSA blamed by many for failing to prevent the near collapse of the British banking system. His resignation comes amid increasing uncertainty of the FSA’s future and at the end of a period of intense activity for the FSA which saw it impose record fines, pursue exceptional criminal proceedings and turn on foreign nationals - a track record that may soon be coming to an abrupt end.
RECORD FINE Mehmet Sepil, chief executive of Genel Enerji, is
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which: “occurs in relation to (i) qualifying investments admitted to trading on a prescribed market and falls within any one or more of the types of behaviour set out in subsections (2) to (8).” There are no prizes for guessing that Heritage shares which are traded on the London Stock Exchange count as “qualifying investments” but what was the offending behaviour? In the case of Mehmet Sepil it boiled down to the fact that his decision to buy Heritage Oil shares was made following his discovery of confidential information; that Heritage had stumbled across potentially lucrative oil deposits in the Kurdistan region of Iraq. By way of background, back in 21 December 2008 Heritage had conducted test drilling at Miran in the Kurdistan region of Iraq. On 25 March 2009, Heritage announced that it had encountered oil shows during drilling operations in an exploration well at Miran, and that good quality light, sweet oil was recovered to the surface. Heritage announced that it was preparing to test the well and that the results of the test would be available in the near future.
REUTERS/Jessica Rinaldi
only too aware of the FSA’s recent ferocity. On 12 February 2010, he received the largest ever individual fine from the FSA for insider dealing. In its Final Notice, the FSA announced that Mehmet Sepil would be required to pay a financial penalty of £967,005 ($1,478,000) for engaging in market abuse in relation to Heritage Oil shares. The fine comes at the conclusion of what might ordinarily be described as blatant market abuse had it not been for the fact that Mehmet Sepil is a Turkish national who claims to have been unaware of FSA restrictions on insider dealing. It also sets an important precedent for the FSA to investigate the share dealings of foreign nationals where these nationals are privy to sensitive inside information on UK-listed companies. International companies beware! If you have employees who travel to the UK then ensure that they have a proper understanding of when they can and cannot buy and sell shares. Section 118 of the Financial Services and Markets Act 2000 defines “market abuse” as behaviour
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During the course of March 2009, Heritage and Genel Enerji, an oil exploration company, entered into merger discussions and a 25 per cent licence agreement to drill in the Miran oil field was agreed between Heritage and Genel Enerji. During the course of these negotiations it came to the attention of Mehmet Sepil and other senior executives of Genel Enerji that the Miran tests had revealed the presence of a sizeable amount of oil despite the fact that these results had not yet been announced to the markets.
It demonstrates that the FSA will take a hard line on market abuse, even where the individuals involved are resident overseas and are unaware of the UK’s market abuse provisions
On 5 May 2009, Mehmet Sepil instructed his broker to purchase $2 million of Heritage shares, a day before Heritage announced the results of the drilling tests. Heritage’s share price promptly rose on 6 May by 19.7 percent following the announcement and Mehmet Sepil instructed his broker to sell the shares and pocketed a tidy profit of £267,005 ($411,935). The case is worthy of note for a number of reasons. It demonstrates that the FSA will take a hard line on market abuse, even where the individuals involved are resident overseas and are unaware of the UK’s market abuse provisions. This hard line will also not be softened significantly in light of the individuals bringing this market abuse to the FSA’s attention. In the case of Mehmet Sepil, he approached the FSA to bring his market abuse to the FSA’s attention, “expressing remorse” and offering “disgorgement” of his ill gotten gains. All of which was only good enough to see his overall fine reduced from £1,267,005 to £967,005.
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CRIMINAL PROCEEDINGS Mehmet Sepil’s fine comes after a string of high profile market abuse cases brought by the FSA recently including a number of high profile criminal proceedings. Also in the FSA’s sights is Malcom Calvert, a former partner at Cazenove, who is currently facing charges of insider dealing in the Southwark Crown Court pursuant to section 52 of the Criminal Justice Act 1993 for share dealings connected to a number of management buyouts. The FSA has also taken the almost unprecedented step of bringing criminal proceedings against Semperian PPP Investment Partners and William Doughty, its chief executive, for its failure to inform the FSA of a “change of control” of a FSA regulated subsidiary. This criminal case concerning “change of control” is only the second of its kind brought by the FSA and demonstrates an increasing agenda of criminal prosecutions. FSA Prosecutors claim that Semperian and Doughty failed to wait for regulatory approval before pushing through a deal to buy full control of a FSA-regulated subsidiary from Telereal, an investment and property services company. Some have expressed surprise at the FSA’s decision to pursue this as a criminal matter considering the FSA gave retrospective consent to the change of control and that, according to the FSA’s own estimates, there are 150 similar infringements in the first five months of last year alone. The FSA’s new found love of criminal prosecutions has not escaped the attention of many listed companies. Pearl Group, Prudential and Investec all disclosed the fact that the FSA has indicated
an agenda of criminal prosecutions as a change to the regulatory environment in recent filings.
MISLEADING MARKETING The FSA has also shown that it will take a strong stance on misleading marketing. On 20 January 2010, the FSA announced that it had fined Standard Life Assurance £2.45 million for serious systems and controls failings that resulting in the production of misleading marketing material for its Pension Sterling Fund. The FSA found that Standard Life failed to exercise proper controls over marketing material and mislead investors to believe that its Pension Sterling fund would be wholly invested in cash whereas it was in fact invested in floating rate notes.
CONCLUSION Since the onset of the credit crunch, the FSA has been fighting for its life. Charged publicly with failing to prevent excessive risk taking by banks and allowing a increasingly complex financial system to jeopardize the health of the British Economy it has been on the ropes ever since. Its recent rigor in imposing record fines and instigating exceptional criminal proceedings has seen the FSA come out fighting in an attempt to justify its continued existence as the city regulator. But the recent announcement of Hector Sants’ retirement has left the FSA in confusion and disarray. The announcement by the Conservative Party that an incoming conservative government would abolish the FSA and hand its regulatory responsibilities to the Bank of England may make it difficult for the FSA to recruit new staff and to retain existing ones, particularly if those members of staff are to occupy the position of chief executive of the FSA. All of which undermines the ability of the FSA to conduct market abuse investigations. As the FSA struggles to find its feet following this latest internal crisis, many companies and individuals may find that the threat of an FSA investigation may lack the punch it once did.
CURRENTS Westlaw Business Currents delivers lawyer-authored content and Westlaw Business source documents together with Reuters News to keep you informed of the latest developments in your areas of interest. Available online and delivered directly to your desktop, Westlaw Business Currents provides you with the news and timely analysis you need to stay on top of current trends and maintain a competitive advantage for your organisation and your clients. To sign up for Currents, go to: West.thomson.com / email sign up / Free email newsletters / subscribe to Westlaw Business Legal Currents Or email us for further information at: westlawbusiness-currents@thomsonreuters.com
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LEGAL BREAK TAKE SOME TIME OUT WITH A FEW BRAIN TEASERS
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SUDOKU Fill in the numbers to...ok you know the rules by now
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Can you name these three famous cities from our Reuters images? Answers below
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REUTERS
THE LEGAL LENS ON BUSINESS NEWS ANALYSE THE BUSINESS TRENDS THAT AFFECT YOU LINK TO RELEVANT FILINGS WATCH DEVELOPMENTS OCCUR BROWSE OUR HOT TOPICS SEARCH FOR YOUR SPECIALISATION currents.westlawbusiness.com