Dr Veronika Korom is a professor of international business law and arbitration at the prestigious ESSEC Business School (Paris and Singapore) and a triple-qualified attorney admitted to practice in England & Wales, France and Hungary. She regularly advises companies and states in large-scale and complex investment and commercial arbitrations arising in a variety of economic sectors (including energy, construction, telecommunications, civil aviation and mining) and under the main arbitration rules (ICSID, UNCITRAL, ICC, LCIA, VIAC and SCC). She also represents clients in various types of annulment and setting-aside proceedings, as well as in domestic enforcement proceedings and proceedings before the courts of the European Union. Veronika Korom also regularly sits as arbitrator in commercial disputes (LCIA, VIAC and HCCI). She is the President of the Hungarian Arbitration Association, a member of the Academic Forum on ISDS as well as a member of VIAC’s International Advisory Board. She is referenced on the list of arbitrators of the Court of Arbitration of the Hungarian Chamber of Commerce and on the list of arbitrators of the OHADA Common Court of Justice and Arbitration, and has been included by the European Commission in its List of Candidates Suitable for Appointment as Arbitrators and TSD Experts in disputes under extra-EU investment protection agreements. Veronika Korom has been recognised as a ‘Future Leader’ in arbitration in France by Who’s Who Legal in 2019-2022.

Veronika, when did you decide to focus on arbitration and international investment arbitration law?

My first encounter with international law and arbitration happened thanks to the The Philip C. Jessup International Law Moot Court Competition. As an undergraduate law student, I was part of the team representing Hungary. We won 10th place in the international finals in Washington D.C. The finals were sponsored by Shearman & Sterling, and I was offered the possibility to do an internship in their arbitration team in Paris under the supervision of Yas Banifatemi. The internship was a fantastic experience and a true eye-opener for me.

I remember I was given a particular legal problem to research, which I did, relentlessly, day and night, for weeks, only to later discover that my findings were needed for a …. footnote in one of Emmanuel Gaillard’s articles. At that moment, I understood that arbitration was a highly demanding field of legal practice and that in order to excel, no detail can be left unattended, even the footnotes have to be thoroughly researched and argued.

After this first experience, my path led me away from arbitration for a while. I embarked on an LLM degree at Oxford University as a Chevening scholar and on a PhD in France as a French government scholar, then worked as a research assistant and later as a researcher in comparative contract and company law first at the Institute for European and Comparative Law at Oxford University, then at the Business Law Department of the Vienna University of Economics and Business Administration and the Université Libre de Bruxelles, before completing a training contract with Clifford Chance in London and Paris in banking and finance. Once I qualified as a solicitor, I was offered the possibility to return to the international arbitration team of Shearman Paris as an associate. Born in Hungary, having spent a part of my childhood in Germany, and having studied and worked in both Eastern and Western Europe, I was assigned early on to the high-profile intra-EU investment treaty (BIT and ECT) arbitration cases that the firm was handling back then. It was a steep but fascinating learning curve, which got me hooked on arbitration for good. I will forever be grateful to Yas Banifatemi and Emmanuel Gaillard for the formative years I got to spend in their arbitration team.

So my path to arbitration may have been more long-winded than that of many other arbitration practitioners, but I believe that the legal knowledge, skills and experience that I have taken on board over the years have made me a more rounded arbitration practitioner with a better understanding of the business and legal problems that lead to disputes.    

Indeed, the disputes we handle – whether as arbitrators or counsel – are most often not about the procedural rules, but about complex substantive factual and legal issues. A solid experience in transactional work can give arbitration practitioners the necessary tools to better understand and tackle these substantive issues.

What was the biggest challenge for you being an arbitrator – the most challenging case  (anonymous description of legal issues)?

As a general remark, I find it interesting how in the beginning of one’s arbitrator career, one typically gets appointed in smaller value disputes, and often as sole arbitrator. These lower value disputes often involve less sophisticated or experienced parties and counsel, and may therefore make it more difficult for the young arbitrator to ascertain the relevant facts and obtain the necessary evidence, or to ensure that the parties respect the rules of the procedure. Therefore, I find that such cases can represent a bigger challenge for a young arbitrator than one might initially think.

Something else I have noted are the cultural differences in the „way things are done” between proceedings conducted under the auspices of the LCIA or the ICC on the one hand and before certain Central and Eastern European arbitration centers on the other. In my experience, such cultural differences can relate for example to the interaction between the parties and the arbitral tribunal, the role the parties want to play in shaping the arbitral process, the way in which the parties argue their case and how hearings are prepared and conducted. Finding out about these cultural differences and adapting to them can be challenging.

Finally, a really interesting and somewhat challenging legal issue that I have recently had to deal with as presiding arbitrator related to the cross-border legal effects of judgments issued in foreign bankruptcy proceedings. We have had to decide whether the foreign bankruptcy court’s findings regarding the admissibility and lawfulness of certain set-off claims made in the context of the bankruptcy proceedings were binding on the arbitral tribunal which was seated in another country and applied the law of that other country. This case was a good reminder of the complex interplay between domestic bankruptcy regimes and international arbitration and of the importance of ensuring a smooth interaction between domestic courts and arbitral tribunals so that the resulting arbitral award can be enforced.

As an arbitration practitioner, do you see any particular change in the international arbitration landscape in the so-called post-pandemic era?

In response to the travel restrictions and social distancing measures brought about by the Covid-19 pandemic, the use of modern communication technology has increased exponentially in arbitration: instead of in-person meetings we connected with our colleagues and clients via MS Teams, instead of in-person conferences we held video conferences, and we replaced in-person hearings with virtual hearings.

The “good in the bad” resulting from the pandemic is that the arbitration community was forced to finally make better use of the available technology in order to be able to continue to work. Almost as a side-effect, this increased use of technology has finally brought about tangible results in terms of increasing the efficiency and cost-effectiveness of arbitration and reducing its carbon footprint. These issues had been widely discussed in the pre-pandemic years, but with relatively little results, until Covid hit.

I believe that many of these changes represent positive developments overall and that they are here to stay. Many, if not all, client meetings, witness and expert meetings, procedural meetings and tribunal deliberations can be perfectly held online. Hearings in (smaller) cases that do not involve the cross-examination of witnesses or experts will likely continue to be held online too. While the loss of the “human contact” is a clear disadvantage, the increase in cost-effectiveness and the reduction in CO2 emissions I believe outweigh the disadvantages. At the same time, for bigger disputes with multiple witnesses and experts, I believe parties and arbitrators will continue to prefer physical hearings.

What advice would you give to young law students who aim to specialize on arbitration law?

Work hard, persevere, and be curious and keen to learn. Do not overspecialize in arbitration too early, make sure you acquire a solid general legal background and develop the legal skills and instincts that will allow you to tackle legal problems arising in any industry and under any legal system.

Master the art of research, both factual and legal, pay attention to detail but never forget the big picture. Learn to construct a clear, well-structured and convincing narrative, both in writing and orally.

Be respectful, helpful and kind, arbitration is also about being a team player.

And finally, be patient – a career in arbitration is a marathon, not a sprint, and the many interesting things you will see and learn and the great people you will meet along the road will make the ride as enjoyable and fulfilling as the arrival at the destination.

As the President of the Board of the Hungarian Arbitration Association, how do you view the China-Hungary relations?

China is an important trading partner for Hungary and FDI flows between the two countries have been growing constantly over the past years.

In 2010, Hungary adopted its “Eastern Opening Policy”, in 2012 it joined the “16+1 Cooperation Initiative” between China and Central and Eastern European countries, and it was the first EU country to join China’s Belt and Road Initiative in 2013. Hungary also became a member of the Asian Infrastructure Investment Bank in 2017.

China has emerged as the biggest trading partner of Hungary outside of the EU and Hungary has been the largest recipient of Chinese FDI among the countries of Central and Eastern Europe between 2000 and 2020, with close to 6 billion USD said to have been invested by China in Hungary in 2021 alone. Leading global Chinese companies such as Huawei, Bank of China, BYD, Wanhua, ZTE, Lenovo, Nanjing Chervon Auto, Semcorp, and Shenzhen Kedali Industry are all present in Hungary today.

The number of Chinese speaking lawyers in Budapest is growing and more and more Hungarian law firms run “China desks” in an effort to attract Chinese business.

Many of the contracts signed with Chinese parties contain arbitration clauses, which typically provide for arbitration under the auspices of the VIAC or other Western European arbitral centers. As a result, arbitration proceedings in front of the Arbitration Court of the Hungarian Chamber of Commerce and Industry involving Chinese parties have been extremely rare. The Hungarian Arbitration Court and CIETAC entered into a cooperation agreement in 2018 to jointly promote the development of international arbitration and to strengthen their cooperation on the arbitration market.

A BIT was concluded between Hungary and China in 1991, and entered into force in 1993. According to publicly available information, this BIT has not yet been relied on in investment disputes to date.

The Hungarian Arbitration Association is proud to co-organize a full-day conference on 15 November 2022, in partnership with the ECAA and the Mathias Corvinus Collegium, to explore in more detail the economic ties between China, the EU and Hungary, and the dispute resolution practices and needs of such China-EU related business.