Q&A: Arbitration and the video gaming industry
Published on 3rd Feb 2020
One potential effect of Brexit is that more parties could opt for arbitration instead of litigation as the method of choice for the final determination of disputes. Greg Fullelove, co-head of the International Arbitration Group at Osborne Clarke, explains why arbitration is an attractive option for the video gaming industry.
Is international arbitration a 'Brexit-proof' dispute resolution mechanism?
In short, yes. The legal framework for arbitration and the enforcement of arbitral awards is not established by EU law, nor dependent on the UK’s membership of the EU. Brexit should not have any direct negative effect on international arbitration; that is why international arbitration is being described as a "Brexit-proof" dispute resolution mechanism.
Why is London a popular choice of seat for arbitration?
London, and the UK as a whole, is arbitration friendly. The legislative framework is clear, the courts supportive – but not invasive – and the legal culture as a whole is pro-arbitration. English law's popularity is also a factor. If the contract is governed by English law, parties tend to gravitate towards London as the "seat of arbitration" and stipulate this in the contract. They know that they will find high-quality arbitrators who are English-law qualified – and the London Court of International Arbitration is a highly regarded institution.
Can arbitration help parties reach a quicker and cheaper solutions?
It can if the parties want to achieve that result. The beauty of arbitration is that it is far more flexible than litigation, with the parties having significant opportunities to input on the process.
"Expedited arbitrations", such as those under the International Chamber of Commerce (ICC) arbitration rules, can lead to cases being decided months, if not years, more quickly than they would be in some courts.
Why would arbitration be particularly attractive for the video gaming industry?
Our experience is that the video gaming industry is a tight-knit community and the main players often like to resolve disputes, however serious, in a way that does not damage reputation. Arbitration is ideal for this. Arbitration in England is, as a rule, both private and confidential. The parties can resolve their disputes while maintaining their existing relationships and, in many cases, away from the glare of publicity.
What should parties think about when drafting arbitration agreements?
Even for a basic clause, there are a number of decisions to be made including choosing a seat, language and rules for your arbitration, as well as deciding upon the number of arbitrators (one or three). Depending on your chosen seat, you should consider whether you need to have stipulations regarding confidentiality. If you are likely to have a number of lower-value disputes, you may want to consider an expedited procedure (perhaps by choosing the ICC Rules). Where there are multiple parties, you may want to tailor your clause to allow for consolidation of disputes or joinder of parties.
Our "five golden rules" guide is a good introduction to the basics.
This article is part of our Insights series:
What’s shaping the agenda for the interactive entertainment industry in 2020?
Read the series overview here, or view all games and interactive entertainment Insights here.