Even in the current Asian economic climate - where making the most of the next business opportunity is often a higher priority than entering a lengthy, costly dispute process - disputes do happen, leaving companies to choose from a range of resolution options. ALB recently talked to a group of top litigators from the diverse and litigious jurisdictions of Singapore, India, Japan, Korea and Hong Kong to find out if litigation is indeed on the rise and how clients can prepare for success

Is litigation on the rise as a preferred method of cross-border dispute resolution? Although arbitration is tipped to be the growing dispute resolution mechanism of choice in Asia, lawyers argue that litigation is indeed on the rise and is still often the preferred method to resolve disputes in many developed jurisdictions. "In general, litigation is still regarded as the preferred dispute resolution method both in domestic and cross-border disputes in most parts of Asia," says Bae Kim & Lee's head of international arbitration and litigation Kap-You Kim. In Japan, South Korea, Hong Kong and Singapore, lawyers cite "confidence in local courts and judicial proceedings" as the reason for this preference. However, KhattarWong's head of litigation K Anparasan says litigation is not on the rise in Singapore, with companies preferring to avoid acrimonious disputes and arbitration often being written into Singaporean contracts, while Fox Mandal Little partner Mamta Tiwari (a veteran of the Dhabol-Enron affair in which she was respondent's counsel) also says "arbitration is definitely on the rise and preferable in India", with many cross-border contracts containing arbitration clauses.

What percentage of your cross-border cases would go to litigation?
In South Korea, Kim says litigation as a percentage of crossborder disputes is around the 50% mark, with Anparasan saying Singapore is slightly more. In Hong Kong, the majority of cases are going to litigation and the rest to arbitration, while Uchida says in Japan "the total percentage of arbitration or mediation against litigation would be very low". In a win for arbitration, Tiwari says India is seeing a 60/40 split of arbitration cases over litigation disputes.

Are foreign investors gaining more confidence in litigating in your jurisdiction?
In Hong Kong and Singapore, lawyers say, as expected, that foreign investors have had confidence in litigating in those jurisdictions for a long time because of the independence and impartiality of their respective judiciaries. Mori Hamada & Matsumoto's senior partner Harumichi Uchida says some foreign parties retain suspicion about litigating in Japan, but that there is no real reason for this, with Japan boasting a very capable, fair and neutral judiciary. However, he says the limits on discovery make obtaining evidence from a counterparty difficult, and that the pace of litigation may be slower than expected by business clients.

Kim says foreign investors have confidence litigating in Korea, especially after experiences in the jurisdiction and are impressed by the faster timetable relative to other jurisdictions.

Herbert Smith's head of dispute resolution in Asia, Mark Johnson, says case backlog is no longer such a problem in Hong Kong because of the favourable economic climate. Meanwhile, Tiwari warned that "delays and protracted litigation may at times cause discomfort" in India, although she says it is a place where clients feel the rule of law always prevails.

Are litigation awards being enforced effectively? Is this becoming easier or harder?
There has not been much in the way of change across jurisdictions when it comes to enforcement, with results depending on a range of factors such as the nature of the dispute, entity of the parties, place of business of the parties, and the place where the property and assets of the judgment debtor are situated, according to Tiwari. "There have always been difficulties in enforcing judgments, particularly in relation to cross-border litigation awards," Johnson says of Hong Kong. "There continue to be problems, but progress is being made towards reciprocal enforcement in some areas." Kim says that enforcement depends if reciprocity is available with the country in question, though his feeling is that enforcement is becoming generally easier than before.

Is litigation chewing up the lion's share of legal budgets of companies in Asia and does cost continue to be a major concern for clients?
One of the major concerns when it comes to litigation is how much it will cost clients, though lawyers argue that legal budgets at present are currently not being directed in the majority to litigation but, instead, to a wide range of areas such as legal advice, drafting of agreements and setting up new companies. Uchida argues that Japan can boast lower litigation costs when compared with the US, due to the lack of discovery, though Johnson says litigation is still relatively expensive in the developed Asian jurisdictions of Singapore, Hong Kong and Tokyo.

Tiwari says there is no doubt litigation costs are on the rise in India, with many foreign companies forced to litigate in disputes with smaller parties, which often do not have arbitration clauses in their contracts.

Do clients prefer using a panel of law firms in their dispute resolution strategy?
While lawyers say the use of panels varies from client to client, they are generous in their understanding of the need for panels. "There are advantages to having a panel of lawyers, such as the client is assured of a full range of legal services at all times and the client is able to switch to another of the lawyers on their panel in the event a conflict of interest arises," Anparasan says.

Johnson agrees: "As long as clients consider carefully their choice of law firm for each individual dispute, then this approach can be effective."

Kim says in Korea companies usually have a panel of four to five firms, while in India it depends on the type of client. "While public sector entities would have a panel of law firms/lawyers who they would consider while going in for litigation, private sector entities would ordinarily approach a firm either directly or through a referral," she says.

What type of fee arrangements are normal in litigation cases in your region?
Flexibility is the key for both clients and firms when it comes to fee arrangements, though lawyers say they are restrained from offering some types of agreements, such as US-style contingency fees, in jurisdictions such as Singapore and Hong Kong. Across jurisdictions, hourly rates are most common, though firms are willing to accommodate fixed-fee or capped-fee arrangements on a case-by-case basis.

"Lump sum payments, contingency fee arrangements or certain success fee arrangements are all quite popular in domestic litigation in Asia, though time charge-based fee arrangements still prevail in international litigation," Kim says.

In Japan, Uchida says that fixed fee arrangements used to prevail, as they were determined by the Bar Association, but these fee schedules were cancelled due to anti-trust law and now hourly charges are preferred.

Are clients prepared for the new territory of e-discovery in Asia?
"As a general rule, Asian companies are not well prepared for e-discovery, though they are becoming more prepared. Most reputable companies take and maintain retention policies for both document discovery and e-discovery," Kim says.

Other lawyers agree that clients should be better prepared on discovery issues.

"The document retention policies of Hong Kong-based corporates are usually quite comprehensive; however, adherence to the policies tends to be less consistent than in Europe or the US," Johnson added about e-discovery in Hong Kong.

Tiwari says it will take a long time for e-discovery to become a common process in Asia and this may explain the lack of preparation. However, she says it is an ordinary practice for the lawyers to have all the records relating to the litigation at hand.