Having an international arbitration claim land on your desk is one of the most challenging scenarios in-house counsel can face. It is vitally important to the business for in-house counsel to come to grips with the claim quickly and effectively coordinate the strategy and response on behalf of the company.

This series of brief guides will review some of the most pertinent points to consider when coordinating the defense to an international arbitration claim.

Part two deals with the steps to be taken once the documents, evidence and witnesses have been secured, in the period immediately preceding the actual claim. To read part one, click here.

It is imperative that employees are immediately instructed to preserve any and all relevant documents relating to the dispute. If key documents are accidentally deleted or destroyed, the corporation will be unable to rely on them and may also be in breach of disclosure obligations, depending on the rules applicable to the arbitration.

Communication—both internal and external—is of the essence at this stage to limit damage and to ensure that all employees are on message and working to minimize further damage.

Key employees should be advised of the potential dispute, to prevent any unwitting disclosures to the other side or third parties. This will particularly be the case if it is not commercially practicable for the company to stop communicating with the claimant, for instance when other contractual obligations require such communications. As a result, a procedure should be put into place whereby all external communications (especially those intended for the claimant) can be reviewed by counsel.

Key employees also should be made aware of the potential risk that disclosure obligations can pose to both external and internal communications, including emails and chat logs. Even the most innocent of communications can be subject to the disclosure process, and can unwittingly reveal anything from the company’s position or opinion towards the dispute to proving the company’s overall liability, especially when those communications also include metadata. Therefore, internal and external communications in writing about the dispute should be avoided where possible.

It may be the case that some employees who were working on the project that has become the subject of the dispute have since left the company. In such a situation, particular attention should be paid to collecting evidence from these former employees and anyone who is known to be leaving the company imminently. It will be far more difficult to insist that former employees make themselves available, unless there were clauses to this effect in their severance agreement. Thus, more time may be required to obtain their evidence and work around their individual schedules.  

The tactically astute in-house counsel will work to answer core questions as soon as possible, and before external counsel is instructed, so that no time is wasted and correct instructions can be given.