In depth: ‘Law has become a geopolitical instrument’, litigators told

Rarely has the programme of a major legal conference been such a hostage to current events. The theme of this year’s annual litigation forum, organised in Madrid by the International Bar Association, was war. And the rolling news updates last week kept 420-odd lawyers from 60 jurisdictions on tenterhooks as they met under the slogan: ‘The world has lost its compass: we need to talk about litigators!’

If there was a consensus at the forum, it was that our multi-polar conflict-ridden world has plenty of work for litigators. But they will have to learn to work in a world lacking old perceived certainties.

Keith Oliver, head of international at global disputes specialist Peters & Peters, dated the birth of the new age precisely. The world changed, he said, on 23 March 1983 when president Reagan announced the Strategic Defense Initiative ‘star wars’ anti-missile shield. That announcement spelled the end of the decades-long doctrine of mutually assured destruction (MAD), and, by the end of the decade, the Soviet Bloc itself. 

In turn, Oliver said, the collapse of MAD ‘led us all into a completely false sense of security about our lives and the rule of law. We’re now living in a world of unparalleled chaos, with no immediate answers.’

Such a world inevitably creates cross-border disputes – and complicates the business of resolving them. ‘Are we seeing a breakdown in the system?’, asked Sandrine Giroud of the Geneva bar, warning of a clash between the rule of law and geopolitics. ‘It’s not the end of the rules-based system but we’re seeing the emergence of a new strategic environment. Law has become a geopolitical instrument.’

‘We no longer live in a world with a single agreed-upon international order,’ concurred Daniel Birk, partner at Chicago firm Eimer Stahl. ‘You really can’t have a rules-based order if no one agrees what the rules are and whether they should be bound by them.’ Litigators have to adjust to working with totally incompatible jurisdictions at the same time. 

A consequence is that litigation becomes a tool of geopolitics where several jurisdictions are competing in the same dispute and deploying a new armoury of legal tools. ‘We’re seeing a lot more anti-enforcement injunctions that were once very rare,’ noted Lydia Danon of commercial dispute specialists Cooke, Young & Keidan. 

Singapore-based Lawrence Teh, global co-head of arbitration at Dentons, observed that one driver of today’s multi-polar world was east Asia’s economic growth and consequent assertion of different cultural values. ‘The search is now for a tribunal which understands how Asians think and how they do business – what they want is their idea of neutrality. But in the past two years, polarisation has become even greater.

‘Part of a litigator’s job is to engage in strategy,’ he said. ‘Courts try to be neutral, but sometimes their hands are tied. You have to decide whether the forum your client has chosen is the best at the end of the day. It’s sad, but litigators sometimes litigate about where to litigate. That’s part of our job.’

All this means that courts themselves have become geopolitical players. The issue surfaces particularly in the context of sanctions. Danon warned of the potential perils of acting for clients fighting such measures: ‘If the court rules that they are sanctioned, where does that leave the law firm? It’s a strict liability offence. A very risky enterprise.’ 

Life gets particularly tricky when governments cite national security. ‘In the US, courts are extremely hesitant to challenge any national security designation,’ said Birk. This even applies to president Trump’s executive orders targeting law firms, he suggested, predicting that, if the battle gets that far, the Supreme Court could be reluctant to second-guess a president’s decisions. His advice to firms working in these areas: ‘Engage early and often with your sanctions regulator.’ 

One incident very much in delegates’ minds was this month’s jailing in Paris of executives of the Lafarge cement company over payments made by its Syrian subsidiary to ISIS in 2013/14. What, one delegate asked, might be the liability of paying an Iranian toll for the Strait of Hormuz – would that amount to a criminal breach of US sanctions?’ With the situation in the Gulf developing hour by hour, no one had a quick answer.

However, former Court of Appeal judge Dame Elizabeth Gloster, now an international commercial arbitrator at One Essex Court, predicted an explosion of litigation arising from global conflicts. ‘War is not good just for arms dealers but for lawyers,’ she said. ‘In war, parties try to escape their obligations.’ Claims arise from disputes over force majeure clauses, over insurance, reinsurance, business interruption and war damage. 

As one significant recent development in force majeure and the doctrine of ‘reasonable endeavours’, Gloster pointed to the Supreme Court ‘s decision in RTI v MUR Shipping. The court was asked to consider, in a shipping contract which became untenable because of sanctions, was it ‘reasonable endeavours’ to require a party to accept non-contractual performance (in this case, payment in euros rather than dollars)? The Supreme Court ruled for a strict application on the ground that ruling otherwise would affect the certainty of contracts, she said. 

Closer to the frontline, Ukrainian lawyer Dmytro Marchukov, now based in Germany, spoke of the war’s toll on his own profession. Colleagues from his firm put their careers and lives on hold in order to fight the Russian invaders. ‘Some of them will not come back.’ Marchukov has been working on litigation arising from the annexation of Crimea, but noted that awards against Russia remain unenforced. One hope he held out was in foreign courts applying universal jurisdiction to war crimes: one Russian is behind bars in Finland. 

The good news is that there is a route from battlefield to courtroom. Recent history holds one way forward: South Africa’s Truth and Reconciliation Commission, which ran for eight years as part of the process of dismantling apartheid. ‘It was born of a desperate desire to help people move forward,’ recalled Julia Ferraz-Cardoso of ENS South Africa.’ We had to find a way of making people feel they had been noticed; it gave them a voice. It was really about political renewal.’ Maybe it could become relevant in other jurisdictions, she suggested. 

However, in the current global climate, truth and reconciliation will be a very long game. One delegate noted that litigation relating to the second world war was still ongoing. Gloster recalled as a young QC acting on litigation arising out of the confiscation of oilfields in the Russian Revolution of 1917. ‘We were arguing Russian history from 1917 in the 1980s. Expensive silks were arguing in the English Chancery Division about Soviet history.’

But however long and drawn-out, such proceedings offer at least the possibility of a way forward: law-law is better than war-war, as Churchill didn’t quite say. 

The conference opened with calls for litigators to see themselves as custodians of civilised exchange. ‘As the international order recedes, law becomes a vital factor in security and a new role for litigators emerges,’ said the co-chair of the IBA litigation committee, Jacques Bouyssou of Alerion Avocats, Paris. ‘We contribute case by case a maintenance of order in a disordered world.’

On a similar theme, the IBA’s immediate past-president, Almudena Arpon de Mendivil, of Madrid firm Gomez-Acebo & Pombo, said that, by bringing to the table legal expertise alongside ethical values, litigators create trust. ‘At a time when the world is losing its compass, we have to shine a strong light on lawyers’ ability to build trust; we are merchants of trust. Our work as lawyers is weaving a tapestry of trust and stability which reinforces the rule of law and in turn contributes to economic growth.’

However, she acknowledged that some work will be needed to sell that concept. IBA research suggests that 80% of lawyers believe they play a positive role in society – but among the general public, that falls to 54%. ‘Mind the gap!’, Arpon de Mendivil warned.