International Rescue – what you can do if global supply chains break down

Tom Cox: My name is Tom Cox, I am a Partner in the Dispute Resolution Group at Gowling and I am delighted in conjunction with Quadrant Chambers to welcome you to this event which we are putting on as part of London International Disputes week. I know a number of you are here for the week and I hope you are having a great time and being warmly welcomed into our city. This session, as you will be aware, is on global supply chain disputes, how they might be resolved, how they might be avoided altogether, we are going to be digging into some of those topics and I am delighted to have a fantastic panel alongside me actually a truly global panel as will become apparent in a moment for a global topic but I am delighted to have them with me.

So turning to the panel, I am going to introduce you, ask you to introduce yourselves but as part of that, that is partly to check the microphones are working and partly to check the voices are working but I am also going to ask you if I may as a sort of ice breaker question and I am afraid it is a legal ice breaker so it is not the most exciting but in the context of this talk, I am going to ask each of you to get out your crystal balls and predict, we are obviously in a time of global shocks that are causing issues for supply chains internationally, for you to predict what you think the next global shock is going to be in 2026 that is going to keep us all in business so Joe I will start with you if I may.

Joseph Sullivan: Sure, I am Joe Sullivan, I am Barrister in practice at Quadrant Chambers. I practice cross commercial law in litigation and arbitration. 2026 I am going to go for cyber attacks I think we have seen this year the effect of cyber attacks on supermarkets for example the end of a supply chain but one can see they are increasing each year QBE says it is about 50% higher this year than last year and that trend is likely to continue. One it does not take much imagination to see the effect of a major cyber attack on supply chains particularly for just in time supply so that is what I am going to go for Tom.

Tom: It is a pretty good bet to me. Sophia?

Sophia Allouache: Hi, I am Sophia Allouache I am a Principal Associate at the Paris office as you might hear from my accent. So for me the one key disruption that I foresee for 2026 is the implementation of the European Directive on corporate due diligence, perhaps you are wondering why I speak about that in a post era of Brexit, well the answer is quite straightforward the Directive will apply to both EU and non-EU companies and such companies will be required to take responsibility for adverse impact of their activities on human rights and environment but not only on their own activities of the one adverse subsidiaries and other suppliers so the goal of the Directive is quite clear, it is to encourage companies to have responsible business practice. It is a great step forward in terms of accountability and transparency, however it will raise two main new disputes I might say. The first one is that companies will have to end relationships with suppliers if they do not apply the duty of care. So this will increase the number of disputes based on unlawful termination and the second type of dispute is that even if it did not close on themselves another company will have to enter a bad violations of human rights and damage the environment so for me 2026 will be a new, will see new legal exposure.

Tom: That is super interesting and we lasted two minutes before we mentioned Brexit so we have done really well. Nis?

Nils Kupka: Hi, my name is Nils Kupka, I am a Disputes Partner at Gowling WLG in Frankfurt, Germany practicing arbitration and litigation, I have seen quite a few supply chain disputes in my practice. Well 2026 at least a major risk factor that I predict is geo-political competition intention and how that can effect global energy supply, seeing for example that we in Europe are heavily dependent on liquified natural gas from the US, China and Qatar as the big major players. I think the competition between the US and China could have a negative impact on energy supply for us here in Europe and any other regional tensions that in South East Asia that can add to this would just add to the negative impact. Yes, that is my prediction for a major risk factor for 26.

Tom: Energy issues from Nils, Tom we touched on some of the impact of your neighbours and perhaps if you introduce yourself and I suspect your prediction may be aligned with your neighbour's predictions.

Thomas Yates: Very close to home. Hello and good morning everyone, my name is Tom Yates and despite the English accent I am Disputes Partner in the Ottawa office of Gowlings in Canada. With the caveat that if I had a crystal ball I would be a commodities or derivatives trader rather than a lawyer, I think we are going to see continued trade problems caused by Trump's tariffs. That is not particularly insightful but I think if I had to guess what would happen is I see perhaps that China using its almost monopoly on rare earth minerals and using that as leverage in its kind of negotiations with Trump and if I was in the industry reliant on rare earth minerals I would be very nervous right about now.

Tom: Excellent thanks Tom and finally I will pass to you Richard.

Richard Bielby-Wright: Good morning, my name is Richard Bielby-Wright, I am the head of legal at Aston Martin, I left private practice about 20 years ago now, I feel old, and I have worked pretty much in the manufacturing industry since then the majority in automotives so you know automotive is one of those industries which has one of the most complex supply chains out of everything and it is very global so it is something that we spend quite a lot of time on as in-house lawyers. I think mine, 2025 was summed up in my world as instability, I think 2026 we have heard that is going to have instability again and I think that is a real problem for business. We have regulations coming out of the US which are purely political but impose a huge amount of pressure and resource and cost-intensive activities on supply chains so we will have transparency requirements you know as an automotive company I have a thousand suppliers for a car. I am supposed to understand tier end level suppliers for every single component to check whether there is any forced labour or whether under the EU I have to check whether there has been deforestation including having satellite imagery of deforestation happening as we speak in a Brazilian rainforest and then the next time the EU wake up and go well that is not really achievable so even though you spent lots of time and effort doing that we are now going to delay implementation by two years. The instability is what is difficult and that is very difficult for all levels of the supply chain. So for me I think it is unfortunately a continuation prediction of what we have seen in 25.

Tom: Thank you Richard that is super insightful so that is the future, crystal balls away, fortunately this is being recorded so whether any of this is accurate or not we will be able to judge this time next year so watch this space but we are going to put our crystal balls away for a moment and we are going to move on shortly to the key questions of right what remedies and relief can you obtain when supply chain disputes arise but I think to ground that I am actually just going to ask the panel again very briefly to share some of their insights and their experience of what they are actually seeing now in terms of their live disputes. So for that I am going to come straight back to you Richard, if that is OK not least because for us we obviously only see in practice disputes when they have gone beyond the nascent stage and have got the actually need legal remedy external lawyer stage but Richard you see it all so, from your perspective, can you perhaps just give an overview of the types of dispute that you are seeing and also what it is that is driving that.

Richard: Sure, for us, it is always the same sort of dispute with the suppliers which is pounds shillings and pence, cents and dollars. So, you know 10, 15 years ago costs were pretty stable, input costs for suppliers were pretty predictable, nobody was losing a lot of money the pricing was fine. Now, of course, after COVID and the Ukrainian war we see huge cost inflation and in my world I am building a car which is going to have a seven or eight year life span, I will source the supplier two years before I even start building it and at that point I will lock in a price. That price is effectively then on a long-term contract which says 10 years. Now in most manufacturing industries you will see some clauses which allow movements of raw materials based on a published index right but nobody is writing contracts that say "Dear Mr Supplier you can change the price any time you feel like it because your costs change" and of course costs have gone up hugely in that time period so you have a lot of suppliers who come and say I cannot afford to do this anymore. I want to change the price of the things, the goods and services that I supply you.

Now on the customer side, the customer says, "hang on I set the price of my product based on the cost that I had at the time on the basis of a budget, it is not for me to suddenly take a whole load of cost on myself just because your input costs have changed" and that is where you see the disputes arising. You know you get skirmishes where the supplier says, "I want more money" and their procurement team or the customer will say "you can't have it because they've got a material cost target they need to meet, you can't have it". And then things start to escalate. And that is where I see most of the disputes. 90% of the time you commercially come to a situation where you resolve it yourselves. Going to formal dispute resolution is always usually a last step or it is a strategic step. But I think very difficult our cost base and at the moment that is where I foresee most of the issues.

Tom: Brilliant. So sticking to a degree of automotive, I am coming to you next Nils. Your practice is by no stretch exclusively automotive but you do do lots in the automotive sector. From a German perspective, is that similar to the types of dispute that you have been seeing.

Nils Kupka: Absolutely and I can fully agree with Richard. This is exactly the type of disputes that I have seen also. Not in my practice, disputes about price adjustments where either tier two or tier one suppliers were requesting an adjustment of the prices under long term supply agreements and, yes, first thing that we look at is whether there is a price adjustment clause in the price index clause. Very often we see that there are sort of negotiation clauses in there and then depending on how they are drafted, whether they even give a supplier a right that the parties sit down at a table and start negotiating. And at the OEM for example, "no I don't want to sit down", then here suppliers sometimes ask for an injunction just because they withheld supply because they say, "look, as long as you are not fulfilling your obligation to sit down with me and negotiate, I am now stopping supply". So that is what we see.

During, still with the Ukrainian crisis, we of course see disputes about force majeure and change clauses, discussions of at least about that. In Germany we have a specific provision covering cases of force majeure, its when there is a fundamental change in what the parties thought is the basis of their contract to their agreement and if unforeseeable events then happen. So there is a specific provision under German statutory law that is then always looked at. The hurdles and requirements are quite hight. And other times of disputes that we see in the Automotive industry are delays where part of the agreement is first an engineering part and then a series supply part and then engineering takes longer than expected. And then the question always arises, is the timeline timetable in the contract, is that a strict one? Was that mandatory or is the language soft enough that you can say, we are doing just the best effort to achieve the timelines or the or as I would always say, its mandatory because I already advertised this new model and I cannot wait another two years. But yes, price adjustment and delays, I think that is the most typical disputes that I see.

Tom: Very good, Sophia.

Sophia: Yes. Actually we say we see the same tendencies in France. Actually we witnessed recently an increase in disputes based on inflation. I have a recent example where a chocolate manufacturer came to us because one of his distributors refused to pass on a huge cocoa price hike and actually our clients said that the contract performance had become too build excessively for him and after careful consideration our client decided that terminating the contract was actually the only way to avoid worsening his financial situation. And this is actually possible in France because we have a provision similar to that in Germany. In France, one article provides that, a party can request the other one to renegotiate the contract if unforeseen circumstances make performance excessively difficult. So if the renegotiation fails the party can either terminate the contract or ask a Judge to adjust it. This is particularly useful when you have an imbalance in the bargaining powers such as in the food sector.

Tom: You are ticking all the boxes Sophia in terms of, we have had Brexit and we have now had French disputes over food. Tom we come to you next.

Thomas: So I think we are seeing two things in Canada's supply chain area. One is we are seeing disputes where there are just general delays in the supply chain that are causing issues for our clients to meeting their own contractual obligations. For example I have got a current ICC Arbitration in the space industry where my client is responsible for designing, manufacturing and launching satellites into space and it is a very complicated industry with very specialist third parties providing components. And there has been real issues with that industry in terms of accessing components, there has been bankruptcies in launch providers, the people that send the rockets up into space, Virgin Orbit went into bankruptcy a couple of years ago. And that has impacted my client's ability to meet its project timelines for launching satellites for third parties. Fortunately in my case the client had the foresight in their project timeline to put, rather than an absolute obligation, to put a reasonable commercial endeavours obligation into their contact and so they can point to that to explain why there has been delays because their suppliers have been not able to provide components in a timely manner compared to when the contract was entered into. And even then we have still got an ICC Arbitration that is going to a hearing next year as to whether our client has fulfilled the reasonable commercial endeavours obligation to procure those components in order to launch those satellites into space.

The other issue we are seeing which may not surprise anyone is tariffs and the impact of tariffs on our clients. We are not seeing disputes at the moment but we are seeing a lot of enquiries from our clients relating to the impact of tariffs. Obviously it has a bit impact for fixed price contracts and so we are seeing the type of enquiries of advice on whether the contract is actually a true fixed price contract or whether there is room for adjustment based on whether there is a carve out for taxes, duties, etc or whether we can rely on a material adverse change clause or a change in law clause.

Tom: That is really interesting. It feels like the consensus globally is it is pretty uniform in terms of what these disputes are. The question then that follows of course is from a practitioner's perspective, what can you do about it. What are the remedies, reliefs that are available. So I am going to send to you Joe on that, if I may, and I think it would be really interesting for the benefit of the audience here and on line, if you could perhaps just from a UK English Law perspective give us a feel for the reliefs and remedies that are available on an interim and final stage in the context of supply chain disputes. In particular I think we need to look at whether those reliefs are equally available depending on the mechanism through which parties have decided to resolve their contract, if they are going down the Court litigation route or going down an arbitration route. If you could give us a feel for that I think that would be really helpful.

Joseph: Sure. Well we deal with litigation first. On a final basis obviously the principle thing that you will often be looking at damages, so damages awarded from the Court following a trial. But there is a lot of other remedies that the Courts can give here in England. So specific performance, injunctive relief, declarations as to the parties' rights and indeed obligations under supply contracts. There is also relief that can be given at an interim stage which can assist in these disputes. So its is possible to obtain pre-action disclosure if that is necessary in order to be able to bring a claim. One can obtain third party disclosure in advance of a claim brought to Court. And one can obtain other interim relief which is generally intended to preserve the situation so that the litigation can proceed fairly so injunctive relief to preserve the status quo either freezing orders in order to ensure that an judgment that is obtained is enforceable, even search orders in extreme cases if there is a need to preserve evidence when one cannot rely on the counterparty to the litigation preserving that evidence for itself. So there is a pretty broad range of relief available from the Court.

When one comes to arbitration, again, at a final level, very broad relief available in London seated arbitrations. More or less anything that a Court can do, an arbitrator can do although the effectiveness of that relief is not always going to be the same as if its granted by the Court because of course relief granted by an arbitrator will not be binding on third parties. And that is a particular issue when one comes to cases involving property and interim relief. One of the great advantages of being able to obtain interim relief from the Court, interim injunctive relief, is that it is subject ordinarily to a penal notice and so breach can be a Contempt of Court and anyone who helps the respondent breach the Order can also themselves be in Contempt of Court. So if it gets a freezing order and serves it on the banks then the banks will freeze the money, that is not so straightforward in an arbitration. You can go to Court to obtain interim relief for the Section 44 of The Arbitration Act in support of arbitration but the circumstances in which that can be done are not always completely clear.

There is a case, a decision of Mr Justice Legatt (as he was, now up in the Supreme Court) called General Metals, where he said, "if you could have gone to the arbitrators to get this relief, then the Court won't rate it". Now given that most institutional rules now have provision for emergency arbitrators (they say they can get those on board very quicky and indeed the new Arbitration Act makes clear that emergency arbitrators can grant relief in English seated arbitrations) there are risks in going to Court because the Judge might say, why are you here, why haven't you gone to the arbitrator? But in my experience, as long as you can show that there is a good reason and that could be, you need to go ex parte, without notice, or you need the Order to bite on third parties, usually you will be able to get what you need.

Tom: Yes thanks, I think that is really clear. That is obviously the position from an English Law, UK perspective and, just turning to the panel very briefly, does that resonate Nils? Is that similar to the situation in Germany?

Nils: Yes, its very similar. So the reliefs that can be granted from German Courts are also quite broad. We do not have the type of disclosure procedures that you have here in the UK. The reliefs most often sought in the types of disputes that I mentioned before is injunctive relieve. Actually there are tough negotiations, it almost, really none goes to proper arbitration or proper Court proceedings but its more threatening with supply stops, handing in an injunction or we have a system called "handing protective brief" beforehand so that an injunction cannot be handed down ex parte'd so that is something that we see very, very often. In arbitration, because injunctive relief from the Courts is always available in Germany even if the parties have agreed on an arbitration clause, I have to say I see very little interim measures handed down by arbitrators or arbitration tribunals. And I also have to say that, if parties agree on the use of the DIS, German Arbitration Institute, DIS rules do not contain provisions on so called emergency arbitrator. The rules were revised in 2018 and expressly avoided such provisions on that, and I think it makes that the Rules, it was a sign of trust in the German Courts because they handle these interim measures in quite a timely manner so I think that was the reason, yes.

Tom: And just very briefly, Sophia, Tom, similar framework, similar landscape in France and in Canada?

Sophia: Yes, in France absolutely, a broad range of interim relief. The main point I would like to highlight is that, when you appoint an emergency arbitrator the decision he renders when he is sitting in France is an order, its not an award. So there is not an automatic enforcement and you still need to go to a Court. So actually it is not that useful to go in front of an emergency arbitrator in France.

Thomas: Yes, the situation in Canada is almost identical to the UK. Arbitrators have the ability to grant interim relief and the Courts can and will grant interim relief in support of arbitration if there is particular reasons to go to Court such as my colleague mentioned. The issue of whether there is an emergency arbitrator provision or not hasn't been an issue before the Canadian Courts, they do not really concern themselves with that. And like the UK Courts you can get an Order in support of arbitration in the afternoon if its that urgent but more traditionally you can do it within a couple of weeks. I was involved in obtaining an injunction within a couple of weeks in support of arbitration. The arbitration legislation in Canada is based on the UNCITRAL Model Law, the 2006 UNCITRAL Model Law, and that allows the enforcement of interim measures by the Tribunal. So you can enforce those interim measures ordered by the Tribunal subject to the limitations that have already been mentioned about third parties and the powers of compulsion.

Tom: So that is I think the domestic landscapes but of course in the context of this talk, international disputes week, but also the nature of supply chains full stop which are typically international particularly manufacturers in this jurisdiction for example. The ability to obtain an Order or an award is one facet but then actually if you are dealing with an international counterparty, the ability to enforce it is just as, if not, potentially more important one would think. So coming back to you on this Joe, and we will focus from a UK perspective to begin with, having obtained your Order or award, how easy is it comparatively to enforce those internationally, I am not expecting a blow by blow recount of every jurisdiction in the World but sort of in general terms, can you give us a feel for the routes and the regimes and the comparison between Court Orders and arbitration awards.

Joseph: Sure. Well so far as arbitration awards are concerned obviously they are very broadly enforceable under the New York Convention. In terms of enforcing a foreign seated arbitration award in the UK it is very simple. You just apply to the Court for recognition of the award, can apply for enforcement under The Arbitration Act and there are some procedural requirements, you need a full authenticated copy of the award, the arbitration agreement and then as long as you have that, there are very limited circumstances in which the Court will refuse recognition or enforcement of things like public policy if it is contrary to public policy, if it is outside the scope of the agreement, if the agreement itself is invalid, but really quite limited. When one comes to Judgments, it is not always so easy to enforce those internationally as one knows and depends where you are going. But in terms of enforcing foreign Judgments here in England and Wales, under the Common Law it is pretty restrictive. So you have to show that the defendant, jurisdiction was established against the defendant, either because they submitted to the foreign jurisdiction or because they were physically present when the proceedings were started. You can only enforce money Judgments and the circumstances in which the Court will refuse or may refuse to enforce the Judgement are broader than would be the case under arbitration laws. But we have recently entered into the 2019 Hague Convention, it coms into force on 1 July here, and that provides a broader scope for enforcement of awards to the signatories to that event which basically the EU, except for Denmark, the UK, Uruguay and Ukraine. And in those cases it is not necessary to show personal jurisdiction, it is sufficient to have the sorts of jurisdictional basis that one would be able to obtain permission to serve out here. So is it a contract that was going to be performed in that jurisdiction. Is it an agreement that was reached in the jurisdiction, things like that. And a broader range of Judgments can be enforced under the Hague Convention. The limitations are much narrower so, exemplary and punitive damages, that can be difficult to enforce but apart from that, and insolvency does not fall within the scope of the Convention, but otherwise it is pretty general. Unless it is a Judgment that is contrary to public policy then usually it will be easy enough to enforce.

Tom: So think, yes, from that, I think that is really helpful. Just a quick point on that though, in terms of interim awards, so if we was to obtain an injunction here and wanting to enforce it in the EU lets say, that is pretty challenging is it not?

Joseph: That is extremely challenging in terms of interim injunctive relief. Partial final awards in arbitrations are usually enforceable and so if you can persuade your arbitrator to grant you interim relief in the form a partial final award, which I have done, that then makes enforcing that award, even on an interim basis, much easier.

Tom: So, yes, there are challenges there but there are also ways through. Just to make, having mentioned Brexit, just to make us feel better or worse about matters, Nils, could you just give us a quick flavour from a European perspective if you are trying to enforce between Member States. How does that compare?

Nils: For arbitrary awards, even if they are interim or partial or final, the same obviously. And when it comes to interim measures from the Courts, that is governed by the Brussels Recast Regulation in Articles, I think, 35 and 36. And it is actually recognition at least quite easy but I would always make sure that the Court handing down the injunction is a Court that also has jurisdiction in the main proceedings and I would always recommend not to have an ex parte decision because that also makes it then easier even under the Brussels Recast Regulation to recognise and enforce it in the other Member State.

Tom: That is really interesting. The mention of Brexit and Brussels Recast made for obvious reasons because that was something that we used to benefit from and no longer do. But Richard, I think we have an example do we not of a scenario where you have got the ability to, or do, obtain an interim injunction but it may be that it feels like, to the Courts, that it feels like there are then barriers to enforcing that internationally. Actually in a practical sense, the case we had, that did not really possibly matter did it?

Richard: No, and I think my far more learned colleagues will be able to talk as they have done about the actual ability to enforce, but there are a lot of intangible reasons why you may still want to take some sort of action even if enforcement is quite difficult. So in our case I think it was going to take us six months to enforce an interim Judgment, in Italy I believe it was, and as Nils has said, if you want to annoy a big manufacturer, the first thing you do is say, "I'm going to stop shipping you bits and I'm going to put your production lines on stop and the thousands of people that you employ in that factory, you are going to pay them to do nothing. And all those products that you are selling, you are not going to be able to make or sell and I know you don't hold huge stocks of everything because who wants to hold a huge ton of inventory on your balance sheet". So if you want to wind up and you want some attention as a supplier, go and threaten to stop ship. What will happen is most likely the manufacturer will say "I'm going to go and get an interim injunction to stop you doing that because this is my day to day bread and butter in running my business". Now, that all comes from a skirmish. As we have discussed before, probably about the supplier saying, "I wanted something and I think it is dammed unreasonable that you have not given it to me and we have not been able to resolve it so I'm going to press the red button which says I'm going to stop your production line and that will get me some attention". But the attention it will get if you do that is an application for an interim injunction. Now whether or not that is enforceable for six months in Italy, Joe has already said number (1) if you get it, and usually when I look at when times we go, well usually because it is just a supplier deliberately breaching the supply contract, the obligation to supply the bits on the dates that are agreed at the price that is agreed, you are fairly much no firm ground. So number (1) you will get some of your costs back so it is not going to cost you £35,000, it is going to cost you £35,000 and less the amount you get back. Number (2) from a negotiating position, it sounds a bit like a child in a playground but it is a little bit, I won, you lost, I won, you lost, which puts a different footing onto resolving the commercial dispute that underlies it. Again we are seeing that sometimes this is useful to actually go to Court because you will find there is a subsidiary of a larger group who are being difficult and stopping ship or threatening to stop ship and when they suddenly have to appear in court, ooh there is a parent company based somewhere else, who was not aware of this going on, and they are coming in and go "why on earth are you doing this, you are going to lose this and we are going to have a Judgment against us as a group so you will need to sort it out". And in fact we had one I think where they agreed a Consent Order on exactly the terms we were seeking from the Judge on the morning of the Hearing rather than be embarrassed in front of the Judge because their parent company had arrived with their legal team and said, "what on earth are you doing here". So it also sets a precedent that as a manufacturer, I am willing to enforce my rights. I am not always just going to sit there and watch you do this and not actually take any action which again on a strategic bargaining position gives you a little bit more when you come to actually negotiate this because we never get to the final injunction, the interim is enough to unlock what is needed to resolve the dispute. If it is not, then we will go and protect our production lines because that is everybody's bread and butter that works in the factory.

Tom: Yes, and that is a very …

Joseph: And if it is well written, it really helps you in the negotiating so that …

Tom: Yes, absolutely. And the other point I was going to add on that as well is, as Joe mentioned, if you are getting an interim injunction in this country it is supported by a penal notice and because of that penal notice, the directors of the company, so let us say it is a company that is based exclusively outside of the jurisdiction, it may be that technically this has not been enforced on us domestically and therefore it is not front of mind. The reality is, if you have the benefit of that injunction in the UK, that means that those individuals, those directors of that company, they cannot do any further business in person in the UK going forward for example. So hypothetically the next time they land at Heathrow, if they breach the penal notice by refusing to comply with the Order, there could be a policeman waiting for them (there will not be) but there could be a policeman waiting for them because they have committed a Contempt of Court. Now as further lever that I think it is worth bearing in mind …

Joseph: There will be one waiting if we find out they are coming.

Tom: I am conscious that time is moving on so I am going to quickly move on to perhaps something a little bit more constructive which is, OK, looking at, for those of you who are drafting dispute resolution clauses, there have been a number of points that have been raised by the panel so far, what are those points that actually you think you ought to be bearing in mind. Perhaps by reference to your national position or the idiosyncrasies of your core system or the tribunals you typically go to, what factors might you be thinking about for your dispute resolution clause. I will start with you Tom if I may.

Thomas: Yes I think if you are thinking of drafting a dispute resolution clause in Canada, I think there is two perhaps unique features to bear in mind in addition to other issues such as enforceability and confidentiality. Canada specific, there is two things. I think one is, unlike here in England, we do not really have a system of specialist commercial Court Judges that are kind of experts in their field that you want to go to other than perhaps in Toronto. Toronto has a specialist commercial list but they are the exception to the rule and so the quality of Judges you get can be variable. There may be people that are doing criminal on one day family the next your $100 million commercial court case the next. The second issue which is as a kind of recent ex-pat that went to Canada, the biggest thing that shocked me was, the time it takes in Canada to get to a trial and a Judgment. In Canada the average time is five years. Now that is pretty shocking and they are changing the rules to try and aim for a target of two years but it is currently five years. Now, that can work for you or against you depending on which side of the dispute you are and what your strategy is, but when you are actually drafting the dispute resolution clause, that is the thing to bear in mind if you want something rather quicker, go for arbitration.

Tom: So overall timing for consideration. Nils, from a German perspective, a key factor that you think.

Nils: I think yes, you have to look at your supply chain. If that is an international one you would probably then prefer arbitration over Courts. If it is a purely domestic supply chain, which is never the case, but you would probably then go for the Courts in Germany because in a supply chain dispute you actually always want to make sure that if it really comes to a proper dispute that other parties in the supply chain are also bound to want a Court or if an arbitrary tribunal has found it is the right case in your dispute and from the German Courts, if you are involved in a dispute, you can issue a so called Third Party Notice to a third party who will then join the proceedings and will be bound to the findings in your dispute. That is not the general position, the general case in arbitration. There are some rules for example, the DIS rules from the German Arbitration Institution, they have now issued new rules that you can still select and then also issue a Third-Party Notice but that requires that all the parties, all the suppliers along the supply chain then have the same arbitration clause basically in their contract. That is very difficult but I would discuss that with the client, whether that is feasible or not.

Tom: So you need to bind third parties and that is something Joe that you and I think referred to at the outset, is one of the challenges. And just sticking with you, what would you point to in particular.

Joseph: Yes, I mean that point that Nils makes is important and you can do that here in the UK as well in Court. As long as you can establish jurisdiction against all of the relevant parties you can have it all tried at the same time with the same findings of facts that will bind everyone which can cause problems in supply chains. For example in a number of them, where if you are somewhere in the middle of the chain, you are going to be involved in at least two different disputes. If you have two different arbitration clauses you can then end up with the risk of findings which conflict across the two arbitrations when you are as a buyer and a seller.

But other considerations are of course confidentiality in arbitrations, the ease at which you can obtain interim relief that is binding on third parties which I have said before is easier to do in the Courts than it is in the tribunal. And then in cases involving property rights, obviously tribunals can give awards, can give declarations of trust, declarations regarding proprietary interests, but again, those have no in rem effect and so insofar as third party recipients of that property are concerned, you are going to need to pursue the other proceedings in order to give effect to the findings that have had from the tribunal.

Tom: So do you mean to go and get your stuff, that sort of claim.

Joseph: Yes, you will not be able to enforce the award against a third party.

Tom: Finally, turning to you Sophia.

Sophia: Yes. So for me two factors should be pointed out. The first we mentioned there, it is confidentiality. It is actually clear when you are, depending on the industry, for instance in pharmaceutical and energy it can be crucial to have only a few people that are involved in the dispute. And the second factor for me is less of a factor than a question that I think you should ask yourself when drafting the clause, and it is, whether you should or not add a compulsory mediation or negotiation phase for three months for example before moving to arbitration or to Court. ADR Alternate Dispute Resolution is actually highly effective because parties can shape their decision. They do not have to wait for an arbitrator or a Judge to decide for them. It is also a way to restore the dialogue because people are forced together around the table and to start to speak again. And the last advantage of having this clause is that an escalation clause with an idea helps you speed up the resolution process and reduce costs so it is a huge impact.

Tom: And that aligns Richard with what you said I think at the outset about how the majority of these things get resolved commercially. I intentionally asked the private practice lawyers and barristers first knowing that, having said I would talk to them, actually you are the one who can actually tell us what you actually do from an Aston Martin perspective. So perhaps you are prepared to share whether you agree with any of this, whether they have been speaking complete rubbish.

Richard: Of course I agree. Look I think the key is, it is not always a one size fits all. There is a temptation that when you come to some standard terms and conditions or a standard contract someone plucks a precedent off which says, we will do non-binding mediation and then we will do arbitration and then we will have a choice of law which somebody wants to be in England and Wales, the other party wants to have it neutral, next door to where they are which speaks the same language and is very similar to the law that they are used to in their own territory. If that happens, just pick Brazil or somewhere and then see if they want a neutral jurisdiction. But the point is, I think you have to look at what you as your client or me as a business wants to do. So we very much have a compulsory mediation step. Terminating a long term relationship with a supplier is really problematic for them, right. Let us remember they have invested a whole load of time, capital equipment, D&D, most of that is going to be amortised over a period of supply of parts. So if we terminate in year one, all that investment is not going to be recovered so they are very reluctant to just walk away from all that unless they really, really have to. They also lose the revenue, a sales director loses his bonus for the year. And from a manufacturers perspective, if I want to re-source a steering wheel which has got an airbag in it, that is going to take me 18 – 24 months and probably cost me about £15 million of engineering costs and we have to crash test cars. So there is no easy break here for either party and neither of them wants to have that sort of relationship and that break. So for us it is very much compulsory mediation. We want to get the right people in the room at the right level to try and resolve this. To give everybody a fit chance to feel that they have actually got an opportunity to resolve this.

Strangely and probably a little bit strategically we then do not have arbitration. We have straight litigation. Probably the strategic reason for that in my warped mind is, most of our suppliers supply lots of other car companies. As suppliers supply lots of pharmaceutical companies. When it comes to confidentiality, they are probably the ones who want to keep this confidential more than I do because that is going to set a precedent and get them a reputation with all their other customers. So strangely by having litigation it probably puts a little bit more pressure on people to resolve it earlier in the mediation. And of course, what people forget is, you can change your mind. So if there is two people who say, actually we do not want this to be out in the public well lets agree to go to arbitration then. Or, we are having a big dispute about whether a part that someone or goods that someone provided us met the quality requirements, well, there is no point asking a bloody Judge whether this steering wheel works properly or not is there, there is no point asking that arbitrator either. What we will do is we will have an expert determination and we will go to an institute of mechanical engineers or something else and we will have an expert decide to do it.

So I think you can be flexible. Clearly you have to look at who your counterparties are. If you want it to be enforceable, arbitration is going to be easily more appropriate for certain jurisdictions. Chinese counterparties we will always have a Singaporean arbitration clause. There is no point having an English law jurisdiction clause. So you have to be able to flex your standard position appropriately depending on who the other side is. But I think the key is to understand as a business and your client's business, how do they actually want to resolve the disputes practically.

Tom: I suspect everyone in the room and on-line will agree, that is absolutely great advice. Conscious of running slightly short of time and I do want to leave a little bit of time for questions in case there are any in the room. So the last topic I want to cover is, moving away from the "we need legal redress now stage" looking at that topic and what that looks like. I am just going to come back to you Richard in the first instance but also ask the rest of the panel. If you can come up with one sort of 'top tip' or similar, what would it be to help parties view the recommendation for us to recommend to our clients, help parties to avoid the disputes in the first place or supply chains in the first place or to help resolve them at an early junction. So I am afraid I am going to make you work for your dinner.

Richard: Short of time I will do some quick points. Number one, do not ignore it. There is a temptation to just keep batting the issue away. That just creates more and more tension until it boils over and when it boils over it becomes a dispute that you have to resolve. Secondly, people want attention right. They are doing this because they do not feel they are getting what they reasonably deserve to get. So getting the right seniority of each side to talk about it rather than just letting it bubble at the bottom will sometimes sort of resolve that. And the other thing is, when you can be, be fair. I mean I have quite a lot of people who will come, we will have an argument at pricing and we will say the supplier wants a load of money. And I will say, if we had to go somewhere else, would it cost more or less. If the answer is it will cost me more, then I will need to do something here to maintain that relationship. Give myself a little bit of leeway, give them a small price increase and perhaps that is the carrot rather than a "I am going to sue you" stick and perhaps team it up with a "another price review in 12 months' time to see whether we can take that increase out" or "I would like some annual economics", "some price reductions based on time". Offer something if it is going to benefit you. Do not just stick your feet in the ground because the alternative may be worse than the current one you have got.

Tom: Brilliant. Tom you touched on tariffs earlier, have you got any tariff related suggestions, recommendations at the contracting stage?

Thomas: Yes in terms of tariffs, it is an obvious point that everybody seems to be looking at it now belatedly but when you are drafting it, make sure your pricing, especially if it is fixed pricing, is net of taxes, tariffs, duties, imports, etc so that you make clear that the risk falls on the customer rather than you as the supplier. And on the supply chain, again, it is an obvious thing but try and build in redundancy and resilience in your supply chain. That might not be easy if you are buying Aston Martin steering wheels or complex optics in satellites, but where you can build in redundancy, do so.

Tom: Nils, a top tip from your side. Perhaps based on some of the disputes that you have seen over the years.

Nils: Then I go for the delayed disputes that I have. I have seen many cases where engineering was part of the agreement and where then disputes arise around "is the timeline binding or not" and I would say or recommend, make sure that the wording in this context is accurate.

Tom: There is real clarity around what the time requirements are. Sophia I will come to you last.

Sophia: Yes. So for me the advice would be proactive contract management. And anticipation. So you can adapt the force majeure close, you can integrate the possible need to renegotiate the contract and you can actually anticipate the dispute by select the forum and entering that throughout the contract chain, the group of contracts. There is a consistency in the dispute resolution forum as you said earlier.

Tom: So continuing to review your contracts, review those force majeure provisions particularly in light of things that we can see occurring in the world and making sure that there is clarity whose responsibilities lie where.

I think in terms from the panel discussion part of the session I think we are pretty much at an end but I do not know if anyone in the room has questions. My colleague Sean I know has been manning the virtual chat and there are no questions I am pleased to say. If anyone has got any questions here, I think we will bring a microphone down. Yes sir?

Don from City Law School and [unclear 00:56:40]: My question is to Sophia. You said that under French law, if I was to revise a contract there has been excessive change, etc, how common is that. Are you seeing cases in practice where the Judge has actually re-written the contract or do they shy away from that exercise.

Sophia: It is actually very rare because the French Judge then amount to interfere in the parties' agreement. So for instance, if you go in, from what we have seen for now because it has not been in place for a long time, but what we have seen is that Judge then asks the party to try a mediation and try to find an agreement. So even if you go to them and say "OK we discussed we did not find anything" they will let you change one segment of claim, one segment of difference and then ask you to go back to the discussion. And usually, parties find something at least from what we have seen so far.

Don: Would you likely to see the Judge opening up the draft contract and re-writing it?

Sophia: No, it is very rare.

Nils: From a German law perspective, in German law it is very rare but, just the fact that such a provision exists and of course there is a huge grey area because it is not crystal clear how a Judge would decide a case, it gives either one party of the other a lot of bargaining power in negotiations.

Tom: Just bringing you in here Joe. That was something that struck me, the existence of that kind of statutory provision. Obviously in terms of the way that the Courts interpret our contracts, the direction of travel for the last decade or so, has it not been away from that kind of intervention anyway.

Joseph: Yes. I mean outside of consumer legislation there is just really no way for the Courts in England to do that. They have taken, it is effectively a policy decision that favours certainty over, I suppose it is important to say, individual cases of fairness, and that is reflected in for instance the approach to frustration which sounds similar to the French and German rules regarding frustrating events in contracts. But in England it is, people raise it a lot, but it is almost never successful. The parties are pretty much held to their bargain in Court.

Tom: I have got another question here Chris I think. [banging noise] I do not know whether that is someone trying to get out of here.

Chris: A very interesting discussion. We talked very generally about interim relief in injunctions and I understand from Richard that these positions of when you do get them that is very rare because you have got a very straight forward breach of contract case. In other instances you might have other issues in place, sanctions that might come into play, we did not talk about them. I was just wondering to Joe, do you have any examples of case law that, where Judges have considered these cases that we could look out for from an English law perspective?

Joseph: In terms of injunctive relief, there are absolutely tons and tons of case law about it. There is a new, we had a case recently where the Courts looked at the approach to injunctive relief. There was a case actually just this year, the name of which will escape me, Tom may know, a decision on Freezing Orders where the threshold test in terms of merits for a Freezing Order was revisited. Do you remember that?

Tom: I cannot help you on that but I can help you on, I am sure we can pick up on that after, is that the area I can help you on, and this is a shameless plug, but I am going to make it nonetheless is, it is true that there are comparatively few reported decisions where a specific performance has been granted in terms in in particular say an automotive contract saving "you are going to continue supply pending X". Actually I think Joe or Richard made reference to a decision we had a couple of years ago where actually that Order it ended up being granted by way of undertakings with Richard on the steps of the Court. But that was granted. But the reason I mention it is, in that Hearing, the Head of Commercial Court referred to the willingness of the Commercial Court to grant those Orders and mentioned two cases. Those two cases as it turns out were actually cases that had been done by this firm which is the reason I am shamelessly plugging it. Because there are not that many of them and this firm, different firm previously but, yes, there are not a huge number of them but the Courts and the Commercial Court in particular is prepared to grant those Orders so I can certainly share those cases with you. They are rare but, as Richard said, part of the reason they are rare is not because the Court is not prepared to grant them, Mr Justice Foster was very clear, that actually the Commercial Court is prepared to grant those Orders. The reason they are rare in my view is that, as Richard noted often, it is pretty straightforward. If someone is bang to rights, they are required to do something and they are not doing it, and if then the necessary consequences are then in place i.e. this is going to cause redundances, huge issues and losses that cannot be compensated by way of damages, if that is the case and it is so straightforward, then actually a party is on the wrong end of one of those applications. He is going to look at it and go, well actually we cannot fight this, we are going to lose, we are going to be on the end of a penal notice and a major costs award so therefore we are not going to fight it. So I think the reason why there are not that many cases reported is not because the Court will not grant them, it is because actually in practice, parties back down.

Joseph: The other thing is that, for urgent ex parte injunctions, the Judge often gives its temporary Judgments that just are not reported and it all settles before the return date so you just never have a record. I remember going to a talk about five years ago with a Silk talking about an injunction that he got, the first injunction of this kind, everyone in the audience was "I've been doing this for sort of 15 years" there is just never … it was the first reported case of an injunction.

[ ]: thanks everyone for a really interesting discussion. With some of the complexities of these long complex international supply chains geopolitical, CS Triple D etc. it seems there is some rationale for vertically integrating and consolidating some of those supply chains and I think we are seeing some of that in the automated industry. I was wondering if you are seeing new types of disputes arising out of that I mean it strikes me that there are complications if customers' client relationships are suddenly becoming competitor relationships do you see trends emerging in that regard?

Tom: That is not something…. I am looking at you Richard …as something that is coming across your radar it is not something that I confess I have come across.

Richard: In automotive there is a very different approach depending on which manufacturer you are. Nils has probably said to us in Germany there is a three big German auto VAG, Mercedes Benz and BMW and none of the three shall speak, meet and if you leave one and go to the other you will never be welcomed back in Munich ever again there is that approach.

There is the approach which other OEMs take which is slightly more collaboratively working with competitors and you know for small OEMs manufacturers such as ourselves we do not have the resources of the BMW and Mercedes to go inventing brand new technology at great expense so if there is a proven technology which happens to be owned in a supply chain by a competitor so be it.

We look for brand differentiation elsewhere you know obviously the Chinese manufacturers domestic manufacturers have shown how successful it is if you try and keep supply chains within your group you know BYD, Build Your Dreams famously, you know virtually owns the mine that the materials come out of all the way to the dealers that sell the car produces absolutely some stability. You have got to have deep pockets and a lot of management skills to be able to pull that off but you know at the moment I do not see a lot of friction in the industry around that. There is a lot of uncertainty I think any certainty you get working with another partner is a benefit to share some of the cost.

You know we have seen a lot of EV volume softening which has left a lot of OEMs and a lot of suppliers in significant amounts of distress. There was only a supplier yesterday that you know said to us "..have you got…could you do anything with 20,000 plastic door handles that I made for Fisker..". They do not quite fit my DB12…you know it is a nice question. So I think at the moment automotive is definitely and possibly other issues are definitely just sort of trying to stabilise what they are doing they are not really falling out with each other very much at the moment and really do not want to fall out with their suppliers it is more about how do we manage the macro-economic issues which are causing us a whole load of difficulty

Tom: I think I am conscious we are now five minutes over time so we probably have time for one more question that Mr Chorley had a question?

Mr Chorley: Thank you Tom for having me here. Thank you all the panellists. Michael even though we are talking about 2026 futuristic perspective international dispute I am handling two matters back in India. We are still carrying on that legacy and the dispute arising out of Covid pandemic force majeure so my question is two parts and anybody can pick this up 1) what is your experience that actually you are still facing because I am dealing with two matters dispute arising out of non-performance of a contract in Covid pandemic time and the weird language of the force majeure clause and then one can argue about not taking no frustration and 2) how you have now changed because we have also talked about drafting of the contract and the clauses. Now considering and keeping that in mind and the impact which we have already suffered of pandemics like this what change you have done in your contract drafting and maybe in your respective jurisdiction that is my two parts….thank you.

Joseph: Well I mean as to the first part of the question yeah there has been a lot of Covid related disputes which to be clear depend on force majeure or frustration arguments and my experience is that in English places or English law governed cases rather where there is a sufficiently clearly drafted force majeure clause then it is okay and the party that wants to rely on it can…. otherwise the argument never works frustration pretty much never works on the basis of Covid and as for drafting I will have to leave that to someone else I think.

Tom: Yeah I think the only thing that I will add to that is that I would say from a litigator's perspective as Joe said unfortunately being something of a damp squib I think we had lots of you know immediately after Covid obviously we had a huge number of enquiries about what this means for our contracts but actually in terms of from my perspective translating into big disputes that has not happened.

On a drafting side the particulars of which I would pretend to talk about if my colleagues in the commercial team I know have amended their provisions accordingly but I would not be able to give you the details on….I do not know if anyone else on the panel has anything particular to add on that but it is something that as with all things in the same way you know it is as Sophia rightly said major events like that do cause or should cause parties to think about and revise their force majeure provisions that is something we absolutely have done and advised our clients to do but I probably cannot give you the specifics on how it has been in just there are specific…you know there are arguments about you know what is or is not a pandemic and all those kind of categorisation questions so I am not going to negatively give you advice on that now but I am sure my colleagues can give you proper advice. Any comments from the rest of the panel?

Thomas: Yeah I think like after Covid we suddenly saw people facing the realisation that force majeure clauses are not a cure to all wheels and especially as English law is the same as Canadian law they are creatures of contract and so you either fall within it or you do not and a lot of people assumed you know that Covid would be a force majeure event where dissatisfied and then as a result they have re-drafted their force majeure clause to include pandemics, epidemics etc. and what I am seeing now is that same process being carried out but in relation to supply chain issues, global disruptions, tariffs so again we are getting the same queries are going "..oh I cannot do the contract anymore because my supplier is saying it is now going to take two years rather than one year to deliver these goods.." surely that is a force majeure event and we are saying "..well let us have a look at force majeure clause…no.." and now we are seeing on the commercial side people are re-drafting their force majeure clauses wider and wider to include those types of things and again whether you can get away with that is a matter of commercial negotiation, power balances etc. and sometimes we are seeing it of parties agreeing to that type of language as a customer but making it conditional on well if it is not cured within six months I have a right to walk away without liability so there is normally like a cost to expanding your force majeure clause.

Tom: I am conscious that lots of people have tight deadlines around disputes week so I think I am going to pull stumps on it is the English expression here but to the extent if anyone wants to continue those conversations there is tea and coffee outside and that just leaves me to thank you all so much for attending both in person and online.

I would like to thank particularly the business development team of Gowling and of Quadrant for the efforts they have put on to host this event but more than anything else please can I thank my panellists for what I hope has been a really interesting discussion from your perspective it has certainly been very interesting from mine and I am grateful to them for their time and hard work so put our hands together.