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Daly life at the PCA
Edward Machin 31/07/2012
Having spent a decade at the Permanent Court of Arbitration, its deputy secretary-general Brooks Daly exp...
Imagine, if you can, a place far from the identikit, sterilised sky-scrapers which house lawyers from Wall Street to Canary Wharf, La Defence to Central, Hong Kong. Where security passes and canteen food are replaced by tower clocks, majolica vases and rose gardens. Hard, isn't it?
Not if you're Brooks Daly. That's because Daly, as deputy secretary general of the Permanent Court of Arbitration (PCA), works in just such a place: the institution's official home, the Peace Palace.
Built thanks to a USD 40 million cheque written by Scottish-American steel magnate Andrew Carnegie, the Palace – which opened its doors to the PCA in 1913, and has also been home to the International Court of Justice for more than sixty years – continues to stand head and shoulders above its fellow international dispute resolution venues, in terms of aesthetics if nothing else.
With its wonderfully ornate stained glass windows, gold candelabras and chandeliers of Bohemian crystal, and Persian rugs on the building's walls and floors alike, the neo-renaissance Palace truly is a wonder to behold. And having spent a decade walking the PCA's marbled halls, Daly confirms that the thrill is yet to wear off.
"I feel very lucky to have this kind of working environment," the Los Angeles native explains. "The Peace Palace was established as an idealistic building to house an idealistic institution, and we continue to benefit from the high hopes of the founders evidenced by the opulent design for the building."
And benefit it does. With a healthy docket of pending cases, including both high-profile investor-state and state-state disputes, the PCA has almost ten times as many mandates as when Daly arrived – from 7 in 2002 to the 69 it is administering today. He categories the typical PCA case, if there is such a thing, as "extremely large and extremely complex, often with quantified claims over one billion euros."
The institution is also being asked to administer a growing number of land and maritime disputes, such as that between Croatia and Slovenia over a 13 km square stretch of border near Piran Bay in the northern Adriatic, which both states have claimed ownership of since the dissolution of Yugoslavia in 2003.
Indeed, with governments and multinationals alike fighting for an ever-dwindling supply of natural resources, once-assumed boundary lines – and their potential riches, both mineral and monetary – are now being contested with increasing regularity. And having long set its stall out to specialise in inter-governmental spats, such an approach is now starting to pay dividends for the PCA.
"Our focus on cases that involve governments has made us relevant at a time when this sort of case has been multiplying," Daly explains. "Given that many investor-state disputes are ad hoc proceedings, with no institution specified in the treaties, the PCA started to become one of the serious options for administrative support in the big BIT cases from the early 2000s on."
Things weren't always so successful, however. The institution – founded in 1899 as the world's first global body to hear the settlement of disputes between states – was at something of a loose end during its first hundred years, as governments seemingly took their grievances anywhere but the PCA. (The institution heard only 18 cases between 1899 and 1999, two-thirds of which involved either the US, UK or France.)
Now, though, the mandates are coming thick and fast, meaning that the PCA secretariat seldom has little to pause for breath. "Like any arbitral institution, we're trying to ensure the most efficient conduct of proceedings as possible," says Daly, whose who leads a 34-member team including 19 counsel and six case managers. "The difference here is that we're brought the most complex, largest claims, with the most demands of anything I've encountered."
Whether that be organising site visits for the seven-member tribunal hearing the Indus Waters Kishenganga arbitration between Pakistan and India, or arranging for the arbitrators, parties and, their counsel, interpreters and court reporters to attend arbitral hearings in non-traditional venues such as Costa Rica and Namibia, it's all in a day's work for Daly and co.
Sounds like a potentially thankless task. "If we don't hear anything that's the best we can hope for," says Daly, whose office only tends to receive feedback if things have gone belly-up. "Our goal is to quietly assure smooth proceedings; we're the least important link in an international arbitration," he adds. (Those with even a fleeting experience of lengthy, document and procedure-heavy disputes would no doubt dispute the latter.)
"The parties, their counsel and the arbitrators are the keys to the whole thing," Daly continues. "We just need to be the glue to hold everything together, or the lubricant to keep it moving where required. We're always in the background, and not those being congratulated at the end of a case."
Is the administrative role somewhat akin to the best sport referees, then – those that seem to exist within the very fabric of the game? "Perhaps," says Daly, before pausing to think. "I actually see it more like that of a traffic warden."
Daly, 44, began legal life as a transactional attorney at Latham & Watkins in Los Angeles, where he specialised in M&A and securities work. Not quite your typical disputes practitioner's profile, it's fair to say.
But a chance meeting at a birthday party in Paris, where Daly was looking to continue his career, saw him recommended for, and ultimately secure, a position at the ICC International Court of Arbitration. The year was 1999.
With no experience in the field, having spent five years working on IPOs for Thrifty Payless and the Ralphs/Food4Less merger, among others, Daly nonetheless fit the whip-smart, multi-lingual type the Court seems to attract almost without trying. And far from playing catch-up, learning on the job was simply par for the course at the Paris-headquartered body, which recently appointed a new secretary-general, Andrea Carlevaris, to replace the outgoing Jason Fry.
"Even if you have done arbitration before as counsel, at the ICC you're really learning how an administrative institution works," Daly explains. "I didn't find that experience with drafting contracts rather than pleadings was a disadvantage, perhaps because many of the drafting assignments for the ICC Court required a clear, formulaic presentation."
And what better place to cut one's arbitral teeth than the world's most prolific disputes institution, one which has administered close to 20,000 cases since its creation, in 1923. (Last year, 796 requests for arbitration were filed, concerning 2,293 parties from 139 countries. With the exception of 2009, that is the highest number of cases taken to the ICC for well over a decade.)
Daly points to the snowflake-like individuality of the files landing on his desk during that time as being a continued source of fascination. Crucially, cases included not only the story of a transaction gone wrong, but, he says, were coloured by the – often widely differing – cultural idiosyncrasies of the parties, lawyers and arbitrators.
But, like all good things, it had to come to an end. Daly, who spent three yearsat the institution, takes up the story. "The ICC was, and is, a tremendous experience and training ground, although it's typically not a long-term position," he says. "I was looking to continue working in arbitration, and the PCA's activity in cases involving states, including inter-state disputes, sounded particularly interesting. So I sent off my CV."
Hired initially as special counsel, a decade later he's still there. And though he claims to be taken with "many aspects" of the arbitral process, including counsel, academic and arbitrator, there's much work yet to be done at the Peace Palace.
"The activities of the PCA remain very exciting, and the development of the institution is still my dominant interest," says Daly, a one-time fish out of water now charged with ensuring his employer continues to reflect and fulfil the ambitions of its founders.
And Tsar Nicholas II of Russia, who convened the Hague Peace Conference at which the PCA was established, would no doubt approve. Indeed, the often politically-charged flavour of the disputes now regularly brought to its door – such as the arbitration between the Sudanese government and the Sudan People's Liberation Movement over the contested Abyei region – highlight the extent to which the PCA has grown into a supranational court capable of administering the most wildly technical, heated disputes.
And for Daly, playing even a small part in the peace process for Africa's longest-running and bloodiest civil war made him feel "that you're doing something useful with your career, which of course keeps things interesting." As such, it's unsurprising to hear him say that the Court is now enjoying the most exciting time in its century-plus history.
He's not wrong, either. The PCA has more investor-state cases pending than ever before, while the institution's original mandate to resolve disputes between governments is also being roundly fulfilled. (It is currently hearing six state to state cases, including Ecuador v USA, Bangladesh v India, Mauritius v UK and the aforementioned Croatia/Slovenia and Indus Waters disputes.)
"There's an incredible amount of dedication to the institution from the staff here, who are all inspired by the work that we're doing," says Daly. "It's especially exciting to be here at a time when this previously moribund institution is starting to find its feet."
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