The Restrictive Approach to Legal Representation in Arbitration Proceedings and its Unintended Consequences in Nigeria

Arbitration by Nick Youngson CC BY-SA 3.0 Alpha Stock Images

Fikayo Taiwo, PhD candidate at the University of Essex, published in the Journal of International Arbitration an article titled ‘The Restrictive Approach to Legal Representation in Arbitration Proceedings and Its Unintended Consequences in Nigeria’.

The issue of legal representation in arbitration proceedings accounts for one of the sub-factors of ‘formal legal structure’ and ‘national arbitration law’ that disputing parties consider before choosing a seat of arbitration. Indeed, the ability of disputing parties in arbitration to freely select their desired representatives is embedded in the foundational principle of party autonomy, which continues to act as an incentive to settle cross-border disputes through international arbitration. However, while this may be the norm, a few countries take a different approach.

In Nigeria, a literal interpretation of the national arbitration rules prevents parties from selecting persons not admitted to the Nigerian bar as their representatives in arbitration proceedings. Upon being approached, courts of coordinate jurisdiction have interpreted the provisions in different ways. Therefore, this article examines the probable impact of this position on parties’ non-selection of the jurisdiction and its law in international arbitration proceedings. The article identifies scope for reform in the law and makes suggestions for creating a more liberal legislative and judicial framework in order to promote Nigeria as a seat of international arbitration.

The full article is published in Issue 2, Volume 37 of the Journal of International Arbitration and can be accessed here.

Whose Autonomy is it Anyway? Freedom of Contract, the Right to Work and the General Principles of EU Law

Dr Niall O’Connor, Lecturer in Law at the University of Essex, has authored an article exploring the significance, in the employment context, of freedom of contract as a fundamental right in article 16 of the EU Charter of Fundamental Rights (the Charter).

For the first half of its existence, few could have foreseen that article 16 would soon be at the centre of debates surrounding the precise place of business freedoms within EU employment law. This has changed following a number of controversial decisions in which the Court of Justice of the EU (CJEU) relied on article 16 to undermine the effectiveness of employee-protective legislation.

This article examines the nature of freedom of contract as both a fundamental right and a general principle of EU law and its effects in the employment context. Critical Legal Studies (CLS) is relied on to show that existing arguments as to the use of Article 16 as a radical tool in the employment context have been both exaggerated and underplayed.

Finally, the article explores potential counterweights to freedom of contract as a fundamental right, notably the right to work found in article 15 of the Charter.

The article was published as an Advance Article on 6 November 2019 in the Industrial Law Journal and is currently free to access here.

Cross-Border Mergers in the EU: Shareholders’ Derivative Suits Against Corporate Directors

Dr Georgios Zouridakis, Lecturer in Law at the University of Essex, has published a new chapter in the edited collection Cross-Border Mergers: EU Perspectives and National Experiences (Springer 2019).

Dr Zouridakis’ study shows that shareholders championing corporate interests may face several obstacles following cross-border mergers within the EU, depending on whether the suit is temporally prior to the merger or vice versa. The fact that, post-merger, the company ceases to exist (and is succeeded by another entity in another jurisdiction), gives rise to issues regarding the application of rules intrinsic to the mechanics of derivative suits and particularly those on: continuous ownership; contemporaneous ownership; costs; and on the requirement for shareholders to first demand the board to take action.    

Given that the derivative suit, in all its variations, is a form of shareholder-led representative action, provided by most European countries – and often the only such available – this chapter argues in favour of a policy facilitating such shareholders’ enforcement of corporate claims in the cross-border merger context. 

Dr Zouridakis’ chapter is included in the collection Cross-Border Mergers, which was edited by Dr. Thomas Papadopoulos and published by Springer in October 2019.

This edited volume focuses on specific, crucially important structural measures that foster corporate change, namely cross-border mergers. Such cross-border transactions play a key role in business reality, economic theory and corporate, financial and capital markets law. Since the adoption of the Cross-border Mergers Directive, these mergers have been regulated by specific legal provisions in EU member states.

This book analyses various aspects of the directive, closely examining this harmonised area of EU company law and critically evaluating cross-border mergers as a method of corporate restructuring in order to gain insights into their fundamental mechanisms. It comprehensively discusses the practicalities of EU harmonisation of cross-border mergers, linking it to corporate restructuring in general, while also taking the transposition of the directive into account.

Exploring specific angles of the Cross-border Mergers Directive in the light of European and national company law, the book is divided into three sections: the first section focuses on EU and comparative aspects of the Cross-border Mergers Directive, while the second examines the interaction of the directive with other areas of law (capital markets law, competition law, employment law, tax law, civil procedure). Lastly, the third section describes the various member states’ experiences of implementing the Cross-border Mergers Directive.

Research Updates on Corporate Governance, Corporate Responsibility and Corporate Regulation

Dr. Onyeka Osuji, Reader in Law, has been busy this year publishing and presenting his research at an international conference. Here are a few updates on his recent activities:

Corporate Governance Publications

Edited book: F Ngwu, O Osuji, C Ogbechie and D Williamson (eds), Enhancing Board Effectiveness: Institutional, Regulatory and Functional Perspectives for Developing and Emerging Markets (Routledge 2019).

Enhancing Board Effectiveness seeks to examine the conceptualization and role of the board in a variety of contexts and articulate solutions for improving the effectiveness of the board, especially in developing and emerging markets. Enhancing Board Effectiveness therefore addresses the following central questions:

  1. To what extent is the concept and role of the board evolving?
  2. What rights, powers, responsibilities and other contemporary and historical experiences can enhance the effectiveness of the board, especially in the particular contexts of developing and emerging markets?
  3. What socio-economic, political, regulatory and institutional factors/actors influence the effectiveness of the board and how can the policies and practices of such actors exert such influences?
  4. In what ways can a reconstructed concept of the board serve as a tool for theoretical, analytical, regulatory and pragmatic assessment of its effectiveness?

In examining these issues, Enhancing Board Effectiveness investigates theoretical, socio-economic, historical, empirical, regulatory, comparative and inter-disciplinary approaches. Academics in the relevant fields of accounting, behavioural psychology/economics, development studies, financial regulation, law and management/organizational studies, political economy and, public administration will find this book of high interest.

Book chapter: O Osuji, ‘Club Theory and Performance Evaluation’ in F Ngwu, O Osuji, C Ogbechie and D Williamson (eds), Enhancing Board Effectiveness: Institutional, Regulatory and Functional Perspectives for Developing and Emerging Markets (Routledge 2019).

This chapter applies the club theoretic model to contextualise voluntary clubs in public interest regulation through corporate governance, particularly in the developing and emerging markets. Drawing on the political theory of corporation and the institutional perspective, the chapter proposes an enforced self-regulatory system for directors’ individual and collective performance evaluation that centres on voluntary clubs and is propped by facilitative public regulation. It argues that when voluntary clubs are properly and legally equipped to effectively perform corporate governance regulatory roles, directors, shareholders, market participants, stakeholders and society can all benefit.

While it frames corporate governance clubs within regulatory institutional frameworks, the chapter demonstrates the impact of voluntary rules, standards and procedures on individual director and board effectiveness and therefore aligns private governance with broader society expectations. It highlights internal, external and independent quantitative and qualitative methods for evaluating board performance and demonstrates how barriers to improvement can be identified and tackled and how positive factors for effectiveness can be recognised and improved on.

The proposals include research, training, education and other methods for continuous individual and collective development, operation of stringent voluntary clubs at industry and sub-sector levels, preventative, retributive and corrective enforcement measures, club membership as a prerequisite, performance-related certification, licensing and disqualification, and facilitative public regulation. 

Corporate Responsibility Publications

Book chapter: O Osuji, ‘Tackling Corruption through Corporate Social Responsibility’ in J Ellis (ed), Corruption, Social Sciences and the Law: Exploration Across the Disciplines (Routledge 2019)

This chapter examines how corporate social responsibility (CSR) can be used as an effective solution to official corruption, especially in developing countries. Despite wide-ranging legal interventions, official corruption persists as a significant public interest issue for various reasons. It is shown that the law’s limited scope and effectiveness has engendered alternative and complementary anti-corruption regulation opportunities within the scope of CSR. Ideally, CSR can help to identify gaps in substantive law and enforcement process and how to plug them. However, the anti-corruption impact of CSR seems modest to date.

The chapter proceeds to establish the theoretical linkages between CSR and anti-corruption principally through the political CSR, governance CSR and institutional theoretic models. It identifies effective self-regulation, accountability and responsible global leadership as the core principles of an anti-corruption CSR paradigm before outlining its components. It demonstrates how corporate conscience, whistleblowing and individual and collective responsibility can overcome informal signals and ends with a restatement of the challenges and opportunities in using CSR for anti-corruption promotion. Before concluding, the chapter outlines certain steps corporations can undertake to demonstrate anti-corruption CSR.

Conference paper: Dr. Osuji was invited to present at the Sixth Annual Conference of the Kuwait International Law School (May 2019) a paper entitled ‘Corporate Social Responsibility, Stakeholder Needs and Sustainable Development: Overcoming Contextual and Regulatory Challenges through the Values Paradigm’.

The emergence of sustainable development as a matter of global concern has been complemented by the recognition of the roles of different segments of society in promoting it. As the Sustainable Development Goals 2015 (SDGs) exemplify, corporations and other private stakeholders are increasingly regarded as active partners in the sustainable development agenda. The tools for advancing corporate and stakeholder involvement in sustainable development therefore includes corporate social responsibility (CSR), which was originally conceived as a voluntary management tool.

Four elements of CSR are arguably critical in relation to sustainable development. First, despite its traditional conception, one of the consequences of the growing global influence of CSR is that corporations, especially the large, high profile and consumer-facing ones, realistically do not have the option of ‘doing nothing’ with regards to socio-economic issues such as sustainable development. Second, the stakeholder framework of CSR implicitly acknowledges contextualism while sustainable development, as the SDGs show, also accept contextual priorities. Third, notwithstanding the universalist/internationalist theory, the concept of glocalisation recognises that local and global standards can co-exist in a mutually reinforcing manner. The fourth significant factor is the emergent recognition of CSR as a potential complementary regulatory tool by public and private authorities (Osuji, 2015; Osuji and Obibuaku, 2016). As exemplified by regulatory actions in some jurisdictions, the regulation of CSR enables its application to suit the sustainable development agenda of specific jurisdictional contexts. Overall, orthodox CSR practice seems to have followed a ‘stakeholder needs’ approach which can adapt CSR to promote sustainable development as a voluntary or regulated activity. 

Nonetheless, the following questions arise:

  1. Are there implications for using the stakeholder needs CSR model in promoting sustainable development in a specific jurisdictional context?
  2. Does contextualism allow a ‘values’ approach to CSR even when it is being used as a regulatory tool?
  3. To what extent can a ‘values’ CSR approach improve or complement the stakeholder needs model in addressing sustainable development in specific jurisdictional contexts?

Drawing on the institutional, including Scott (2001, 2008), and stakeholder theoretic models, this paper argues that a stakeholder needs CSR model may be inadequate for advancing sustainable development, especially in an emerging country context. The issues this raises include disguised motivations, insufficient clarity of goals, unintended assumption of legal responsibility and covert corruption. An alternative to the stakeholder needs model is the values approach which has sociological and institutional foundations.

The paper demonstrates that a values paradigm is feasible and may be an imperative aid for applying the stakeholder needs CSR model to sustainable development. The values paradigm can improve effectiveness of a regulated CSR as a sustainable development promotion and private regulation mechanism.  

Corporate Regulation Publication

Edited book: J Griffin, HK Chan, O Osuji and H Choo, 3D Printing: the development of a technical licensing framework with a focus on China (Routledge 2019).

The book is an output of the AHRC (Arts and Humanities Research Council) funded project, entitled ‘A Technological Licensing Framework for 3D Printed Content: A Focus on China’.

More specifically, it is a collection of materials, relating to empirical interviews, a work placement, workshops and publications that have been carried out in one of the world leading research projects into the legal impact of 3D printing. The project was funded by the AHRC and Newton Fund, and was largely carried out within China. It was designed to establish the perceived legal challenges faced by 3D printing companies, as well as a technical framework for an operational automated technical licensing system.

The main research questions addressed by this work are the following:

  1. How can an automated licensing platform framework enable 3D printing companies to licence 3D printed content and files in new ways? Examples would be online databases and/or the printing of 3D computer game characters.
  2. What is an effective technological solution to online licensing of 3D content?
  3. What is the impact of such a system upon copyright law, in particular copyright law in China and copyright law internationally?
  4. How will this pioneer the development of law that is digital in nature?

Workshop on ‘Brexit: Regulatory Challenges for Business Law’

10 May 2019 10.00am – 5.00pm University of Essex, Wivenhoe Park, Colchester, CO4 3SQ

The UK’s withdrawal from the EU will result in far-reaching, significant consequences for the regulatory spheres of both the UK and the remaining Member States. Even after the completion of the withdrawal process, EU laws will still impact businesses operating in the UK, both directly and indirectly. Fields which are most likely to be affected include product specifications, competition, employment, health and safety, banking and financial services, company law, insolvency, consumer protection and insurance. Despite this, there continues to be gaps in the research which has been carried out to explore the ultimate consequences of Brexit on the business regulatory environment.

This workshop, organised by the Commercial Law Cluster at the University of Essex, aimed to cover this research gap by exploring the opportunities and risks faced by UK business in this time of legislative change. In particular, this workshop focused on three key legal fields: (i) finance and banking law; (ii) corporate law; and (iii) maritime and insurance law.

The purpose of this workshop was to raise awareness and foster debate on the rules that will govern the UK after Brexit. The regulatory changes for each of these three economic sectors were discussed in separate panels. In each panel, invited speakers provided an overview of the opportunities and challenges faced by businesses. Invited discussants then complemented these presentations with views from both academia and legal practice.

The programme and speakers included:

Welcome: Professor Theodore Konstadinides (University of Essex)

Keynote Presentation: Professor Takis Tridimas (King’s College London; Matrix Chambers)

Session One: Finance and Banking

Financial Markets: Professor Stuart Weinstein (Aston University) and Dr Flora Huang (University of Essex)

Banking Supervision: Dr Menelaos Markakis (Erasmus University Rotterdam) and Dr Anastasia Karatzia (University of Essex)

Session Two: Corporate Law

Chair: Dr Eugenio Vaccari

Company Law: Professor Janet Dine (Queen Mary University of London) and Dr Marios Koutsias (University of Essex)

Insolvency Law: Hamish Anderson (Norton Rose Fulbright) and José Carles (Carles Cuesta Abogados y Asesores Financieros, Madrid)

Employment Law: Dr Jennifer Gant (University College Cork) and Dr Niall O’Connor (University of Essex)

Session Three: Maritime, Shipping and Insurance

Chair: Dr Lijie Song

Shipping: Zoumpoulia (Lia) Amaxilati (Queen Mary University of London) and Dr Durand Cupido (University of Essex)

Insurance: Dr Keren Wu (University of East Anglia) and Dr Anna Antoniou (University of Essex)

Closing Presentation: Professor Steve Peers (University of Essex)

Social Justice in EU Financial Consumer Law

Dr Andrea Fejős, Lecturer in Law, University of Essex

Dr Fejős’ recent paper for Tilburg Law Review considers how social justice influences EU financial consumer law. It provides a new way of looking at social justice in consumer law by showing that equality of status based social justice has increasingly come to the fore in modern EU financial consumer law.

This emergent and complex set of private and regulatory rules on credit, insurance, investment and payment products has responded to the consequences of inequality between financial firms and consumers by engaging in product and rights regulation that balances the parties’ rights and duties and protects consumers from the consequences of status-based inequality. Looking forward the paper recommends that this social justice approach must be made transparent and become an express part of EU law and policy, both in order to raise consumer trust in the internal market and to more clearly set the future law and policy agenda.

Photo credit: Fortegra Blog

Executory Contracts in Insolvency Law

Dr Eugenio Vaccari, lecturer at the University of Essex, School of Law, has recently co-edited a book with Professor Jason Chuah, Head of Department at the City Law School at City, University of London. The book, Executory Contracts in Insolvency Law: A Global Guide is published by Edward Elgar.

Executory Contracts in Insolvency Law is the result of a research project that lasted for more than 2 years. The purpose of this project was to cover a gap on the treatment of executory contracts in insolvency in academic and professional literature.

On the academic side, few papers have so far investigated the principles that should govern the treatment of executory contracts in insolvency. Why and to what extent should insolvent companies be allowed to terminate or continue their contracts upon filing for a formal insolvency proceeding? Should the procedure, the purpose of the procedure or simply the nature of the business determine the outcome of the contract?

On the professional side, Executory Contracts in Insolvency Law aims at providing a comprehensive yet easily accessible guide on the treatment of these contracts in a larger number of jurisdictions than any other study conducted in the field to date. In an increasingly globalised world, practitioners may find that termination clauses in commercial contracts are governed by one law, while the main contract is subject to either English or New York law. A comprehensive outline of the main features of these laws is essential to provide timely and informed advice to the parties.

Executory Contracts in Insolvency Law offers a unique, comprehensive, and up-to-date transnational study of the topic, including an analysis of certain countries which have never previously been undertaken in English. Written by experts in the field, with extensive practical and theoretical knowledge of both research and professional experience, this is a ground-breaking investigation into the philosophies and rationales behind the different policy choices adopted and implemented by a range of over 30 jurisdictions across the globe.

With contributions from more than 40 insolvency law experts, this book provides extensive coverage of executory contracts, encompassing both developed and developing countries, and drawing on not only so-called common and civil law systems, but also, countries with hybrid systems of law. The book explores ipso facto clauses, improvements that could be made, as well as casting light upon procedural and tactical issues and considerations when attempting to address executory contracts in different jurisdictions.

Providing a globalised and comparative perspective on executory contracts in insolvency law, this book will be an invaluable tool for legal practitioners requiring a cross border perspective on the subject, as well as for academics and researchers pursuing a study of the topic. It will also benefit policy makers and institutions seeking to introduce insolvency law reforms in their home countries.

Saving Italian chocolate companies – and reforming Italian law

Eugenio Vaccari, lecturer at the University of Essex School of Law, has written for The Conversation on the problems of Italian chocolate company, Pernigotti, and how Italy’s approach to corporate rescue hurts the country.

Cases like Pernigotti, Ilva and Alitalia have become all too common in a country (Italy) whose industries often struggle to successfully compete, particularly with developing countries. And in spite of jobs being saved at Ilva, they also reveal serious problems with Italy’s approach to rescuing companies. It is a major drag on the economy, and desperately needs to be reformed.