John Campbell: Arbitration revamp a new dawn for debt campaigners

As a result of their work, extremely cumbersome arbitration legislation has been replaced with a far more modern and practicable framework for which there is no ready parallel. With the establishment of the Scottish Arbitration Centre earlier this year also, Scotland has a powerful case for promoting itself internationally as a centre for all kinds of arbitration.

The act presents Scotland as a desirable venue for disputing parties wishing to submit themselves to arbitration, with its considerable geographical and cultural charms augmented by a cutting-edge legal framework, and a world-class body of arbitral experts.

In turn, Scotland presents itself as an attractive location for businesses in which to operate, corporations seeing that in setting up here, they are situating themselves in a country and legal system in which disputes can be solved with fairness, efficiency and no great expense.

Beyond this core purpose, however, it is remarkable to see that other groups – many not traditionally associated with arbitration – are seeing the developments as an opportunity to further their own work in innovative ways.

One of the most developed examples of this is the Family Law Arbitration Group Scotland, which has used the framework of schedule one of the Arbitration Act, amending the default Scottish Arbitration Rules, to create a set of strictures specifically applicable to family disputes. With both parties’ agreement, these can be chosen to govern any arbitration in the area of family law.

Another example involves work being done by Jubilee Scotland and the campaign for the cancellation of unpayable poor-country debt. Historically, the debt campaign received a strong impetus from Scotland, both in the original Jubilee 2000 campaign in the run-up to the millennium, and in the Make Poverty History march, which coincided with the G8 meeting at Gleneagles. These events brought about the cancellation of the debt of 40 of the world’s poorest countries, but did not leave in place a lasting framework within which a debtor and creditor could meet to decide on the restructuring or cancellation of debt. Neither did it help those which fell outside the Highly Indebted Poor Country initiative.

Now Jubilee Scotland is calling for Scotland to promote itself as an arbitral centre for resolving disputes over these unpayable, poverty-perpetuating debts, which would go some way towards highlighting this gap in the international financial architecture while, at the same time, working towards filling it.

There are many challenges. Creating bespoke rules for such arbitrations will involve making more substantial changes to the default guidelines than family law demands, specifically in terms of enshrining the concept of nation-to-nation equity at the centre of such arbitrations. There is then the formidable challenge of encouraging creditors to submit themselves to such a process where there is the potential for them to lose out. However, the lack of any viable alternative should offer encouragement to those undertaking the work.

In order to illustrate the justiciability of sovereign debt and the types of issues involved in these disputes, Jubilee Scotland will be holding a People’s Debt Tribunal in the Scottish Parliament on Wednesday which I have been invited to chair and where a representative of the Philippines, and a representative of the World Bank, will argue before an expert panel the possibility of cancelling the Philippines’ debt to the World Bank.

Unlike an actual arbitration, this event will culminate in a public vote, but will offer a compelling demonstration of the merits of bringing together debtor and creditor countries, and strengthen the conversation about the possibilities available to us as – armed with this new piece of legislation – we seek to promote Scotland on the world stage, to show that Scotland is not just open for business, but open for justice.

• John Campbell QC is an advocate with Oracle Chambers