Campaign to form global forum for bank disputes gathers momentum

NGO wins support from A&O vet for disputes forum in The Hague

Some of the City’s leading law firms are set to be drawn into an ambitious bid to create a global bank disputes tribunal in The Hague.

The Dutch not-for-profit organisation World Legal Forum (WLF) is leading the initiative, which is expected to see legal and financial specialists from around the world meeting before June to discuss plans to create a special tribunal for hearing financial disputes.

Allen & Overy (A&O) special US counsel Jeffrey Golden (pictured) is heavily involved in the initiative and sits on the WLF preparatory committee for the tribunal, which also includes senior delegates from The International Swaps and Derivatives Association and the European and Dutch central banks.

The Hague-based WLF, which works in partnership with firms such as A&O and De Brauw Blackstone Westbroek, is in the process of inviting legal and financial specialists as well as regulators and trade bodies to the event, expected to take place at the Peace Palace in The Hague before the end of May.

The meeting will cover the benefits of creating an international financial markets tribunal, what it would look like, how it would operate and how its decisions could be enforceable internationally. It will also look at a potential timescale for creating any venue.

Golden told Legal Week: “Until now the discussion has focused on the nature of the problem and now momentum is gathering. This group will look at what concrete steps can be taken to ensure a more settled body of authoritative law for the wholesale financial markets, including providing training for judges.”

The discussions come as growing numbers of financial institutions face disputes prompted by the global recession but are reluctant to seek recourse by traditional methods of litigation or arbitration.

A&O litigation chief Tim House said: “If there were a standing tribunal to which banks and counterparties would willingly submit that had experienced lawyers with financial expertise adjudicating, then that might be attractive for banks embroiled in cross-border financial litigation.”

Simmons & Simmons head of financial markets litigation Jonathan Kelly, who is set to leave the firm for Cleary Gottlieb Steen & Hamilton, said: “Many litigators will still have the age-old problem of being unwilling to bring claims against banks and other clients with whom they have close working relationships in other spheres.”

For more analysis, see A suitable venue.