Low-Cost Option to Resolve Business Disputes

An aerospace lawyer has launched a new arbitration body to help aerospace companies resolve contractual disputes without spending huge sums on court action.

Paul Jebely, a Hong Kong-based attorney who specialises in aerospace work, has established The Hague Court of Arbitration for Aviation (Hague CAA), and launched the initiative at the Farnborough Airshow. The court will open for business in August, though Jebely says that, following some early posts about the idea on professional social-media site LinkedIn, he has already received several expressions of interest from companies keen to use the system.

“Having observed the rise and rise of arbitration as some judicial courts became increasingly removed from or oblivious to the commercial realities of the aviation industry, it became apparent that there is need that is not being served,” Jebely says. “By mostly overlooking arbitration, the aviation industry had done itself a disservice.”

The new body has a volunteer advisory board of over 70 people, including lawyers, airlines, aircraft and engine lessors, banks, brokers and others, who, Jebely says, together account for “well over 1,000 years” of experience. Together with the independent arbitrators and the NAI, Jebely hopes to have established a body that will be considered independent and trustworthy.

Jebely has invested a substantial amount of his own money in the initiative, which he says the corporate and legal structure of the Hague CAA will prevent him from getting back. The court will offer firms a streamlined route to resolve disputes that, while not being cost-free, will certainly help them reach an agreement without spending anything like the sums required for court action – and, Jebely says, with specialist input layered across the operation, firms can feel more certain that the decision reached will be realistic, and will take all the necessary specifics of the industry and the technical considerations into account.

Cases will be administered by the Netherlands Arbitration Institute, a body set up in 1949, and will be presided over by an independent specialist arbitrator. Initially, Jebely says, those people will not necessarily have specialist experience of the aviation and defence sectors, but, over time, a cadre of aerospace-specialist arbitrators will grow. Each arbitrator will be supported by specialist juniors, one appointed by parties to the arbitration.

Eventually, he says, the goal is to have the Hague CAA written in to business contracts as the agreed authority for resolving disputes. For now, companies can apply to the Court to arbitrate, and, providing both sides sign up to the process and agree to be bound by its outcomes, the Hague CAA can arbitrate on any dispute.

Jebely followed the launch at Farnborough on 20 July with an official opening the following day in The Hague and a website on 22 July, which includes full rules for the Court and model clauses for contracts, as well as allowing parties to apply for arbitration and mediation services.

“The history of aviation is punctuated by innovation and paradigms that shift slowly, then suddenly […] As arbitration – and specialised arbitration more specifically – become woven into the fabric of the globalised economy, it is time for the framework of dispute resolution in our industry – an industry that is indeed one of the great globalizers – to evolve. The Hague CAA is an innovation that the industry needs, and the paradigm begins to shift now,” observed Jebely.