Irish challenge for man in the middle

With around 1,200 foreign corporations now operating in Ireland, the man charged with establishing the International Centre for Dispute Resolution in Ireland, Mr Marc Appel, says it was just a matter of time before the organisation located here.

"We should have been here five years ago," he says. "Sixty per cent of investment in Ireland is from the United States. US corporations are already here, already doing business. In many ways we are following our customers. Dublin is a European commercial capital, not just an Irish commercial capital."

The International Centre for Dispute Resolution is the international division of the American Arbitration Association (AAA), a body that allows businesses and corporations to resolve disputes through a process of arbitration rather than litigation.

The association's first international centre of dispute resolution was opened in New York in 1996. It officially opened its first European office in Dublin in June.

Why did it choose Dublin as its first European centre? "There's a number of reasons," explains Mr Appel. "We looked at a lot of European commercial capitals before we made our decision. The law in Ireland is supportive of the arbitration process. Ireland is a particularly good place and easy place to do business. "There are 1,200 foreign corporations in Ireland. The English language is the language of international arbitration, so having access to English-speaking barristers, solicitors and arbitrators is a good thing."

With globalisation now the buzzword, the international appetite for conflict management services continues to expand, according to Mr Appel, who says the increasing number of companies adopting dispute avoidance and management programmes is evidence of this. A key reason for this is that it provides a neutral standard, he says.

"One of the problems for business if you're doing business in multiple countries, there is a fair amount of uncertainty if you're involved in a dispute there," says Mr Appel.

"We used to have a great expression in the States about trying your case in another jurisdiction, there is always a fear of being what is called "home-towned". Think of that in context of an international situation. It brings an entirely new perspective to it."

He says he is not suggesting that anything untoward is happening in other jurisdictions or that the legal systems may be suspect.

"What I'm suggesting is that they may have a set of rules that you aren't going to be familiar with. Maybe this is a jurisdiction where you're not comfortable with the procedural matters of the courts," he says.

International arbitration creates a procedure that is the same no matter where business is conducted, according to Mr Appel.

"International arbitration, and to a great extent international mediation, is a risk-management strategy, really taking control of these things before they happen by inserting a clause in a contract that provides, if we have a dispute, this is how we are going to resolve it."

Avoiding litigation, with its resultant cost in money and time, makes good business sense for corporations, he says.

"If you are in business, uncertainty is the worst possible situation. If the matter is hung up or trapped in the courts of a foreign jurisdiction for three, four, five years and on, that's money that you can't be spending on business development, it's money you can't be spending otherwise and it's a terrible waste in terms of the use of corporate resources."

He insists that arbitration is a much different process.

"It's a relatively simple process and you don't have the pre-trial procedure you're likely to have in a litigation matter. You get before the decision-maker quickly, which is the key. You put the facts and they make a decision." Those decision-makers are the three arbitrators. Typically, in an international case parties in dispute each choose their own arbitrator. These two arbitrators then pick a third to chair the process.

"Our international centre will assist the parties by providing them with lists and resumes of people who are qualified to handle the particular matter."

He says the organisation can call on arbitrators who are familiar with all aspects of international business, such as international mergers and acquisition agreements, sales contracts, employment agreements and international franchise agreements.

A United Nations convention of the reciprocal enforcement of arbitration awards, passed in the 1950s and ratified by some 120 countries, ensures that the process has a 100 per cent record, according to Mr Appel.

"The problem with a court judgment is they are sometimes difficult to enforce. When you cross a border, they don't have the same effect, so it's difficult to collect."

With business becoming more international, the arbitration process is gaining greater prominence, he says.

"Globalisation has happened. It's really business without borders and you need a process you can enforce and count on, no matter where you are, whether you're in Kuala Lumpur, Dublin or New York."

Despite its US origins and Mr Appel's comments that it is following US business to Ireland, he is keen to stress that the international association is independent and not biased towards any country. "We're an international institution, not one that's tied to any particular country," he says. "I think the most important message we can give to business here and in the rest of Europe is that what you're getting from the International Centre for Dispute Resolution is a far cry from what you would get in US-style litigation. That's exactly what we're trying to avoid."

At the moment, the number of international arbitration cases is quite small compared to the numbers for the US. There were 510 international cases in 2000, a 162 per cent rise on the 1996 figure of 194 cases. The 198,000 cases filed with the AAA in the US in 2000 indicates how much scope there is for the service to grow, according to Mr Appel.

With such expected growth, he is expecting his stay in Ireland to be a very busy one.

"This is a start-up and start-ups are all about working hard and making contacts, and that's what I expect to be doing," he says. "It's an honour for me to open this office. It's not often the association opens offices with senior vice-presidents, but we wanted to make this one work."

Mr Appel, who was born in New York and brought up in New Jersey, is something of a veteran in the arbitration process, having dedicated 25 years' service to the AAA. He has served in a number of positions in offices around the United States, returning to New York in 1994.

An attorney with a BA in political science/peace studies, Mr Appel has been closely involved with AAA service innovations, including work with the US Olympic Committee, the development of employment factfinding procedures, the design of the construction dispute review board specifications and skills training for negotiators, mediators and arbitrators. Most recently, he was responsible for the association's construction and mediation services.

Mr Appel is already examining the potential offered by the construction industry here.

"With $40 billion [#46 billion] worth of construction coming into Dublin, there are huge opportunities for international arbitration in those contracts," he says.

Mr Appel will be permanently stationed in Ireland for the next nine to 12 months, when he will return to the US where his wife and family still live.

"They're coming over here in August and I'm going back on occasion," he says.

Despite his heavy workload, Mr Appel is taking some time to see his new place of work.

"This is too pretty a place not to see some of it," he says. "I've got my bike here. It's how I commute. I've been down to Dun Laoghaire and up to Howth, so I've been taking in some of the sights on my bicycle already. One of these days I'll hop on a train and get out west."