While most would be thinking ‘fringe benefits’, Harvey Nichols CEO Joseph Wan only has one thought on his mind – ‘arbitration’.

Heading for Harvey Nicks, I harboured dreams of being given a personal shopper for the day – a complimentary pair of Jimmy Choos even. But forget shopping, sweetie. When I meet the chief executive officer of the retail therapist’s nirvana, Joseph Wan, it is clear that he has something other than designer labels on his mind.

For Wan is a born-again arbitrator. He cannot get enough of the stuff. Donna Karan and Armani may feature briefly in our conversation, but it is my eyes that light up, not his, because what shopping is to me, arbitration is to Wan.

Even his office is barren of luxury goods. There are no sneak previews of next season’s collections here. Instead we sit at a wobbly table that I can only think was rejected by Harvey Nichols’ quality control. Similarly, Wan is a man without pretensions. A charming and straightforward Hong Kong businessman, he is the right-hand man with whom cool multimillionaire Dickson Poon entrusts the growing Harvey Nichols empire. Manchester is the latest addition – the store opens today (11 August), but only after a full inspection and the all-clear from Wan.

His interest in arbitration developed soon after he took on the Harvey Nichols role. Poon’s luxury fashion retail company Dickson Concepts acquired the freehold premises and business of the Knightsbridge store back in 1991 for £53m. Wan, Poon’s KPMG adviser since 1979, was by this time in-house at Dickson Concepts.

“It was me who personally did the negotiations with Burton Group and did the due diligence of the company to ascertain whether it was worthwhile to make an investment,” says Wan. “I concluded that it was definitely worthwhile.”

The original plan was to leave Harvey Nichols’ existing management team in place, but 10 months on it was still making a loss, prompting Poon to replace the store’s American managing director with Wan.

He laughs when I mention the ‘right-hand man’ epithet bestowed on him by the business press. “I’ll tell you what my relationship is like with Mr Poon,” he says, “and then you can tell me whether you think it’s accurate or not.”

Poon has a reputation for very hands-on management and is no doubt keeping a close eye on Harvey Nichols, but Wan is certainly not a ‘yes man’.

“I enjoy a very good working relationship with my chairman Mr Poon,” says Wan. “The principal reason why I believe our relationship has lasted so long and is continuing so strongly is because Mr Poon has always been able to trust me fully and leave everything to me. I, of course, am accountable to him, but he doesn’t interfere. He just allows me to go about my work.

“Although I am an employee of the company, he has always treated me as an external adviser. It is not a master-and-
servant relationship, and that is why the relationship is strong and is continuing.”

With Poon’s backing, Wan steered Harvey Nichols into profit within a year, took it to flotation in 1996, and took it private again last year after the stock market ceased to appreciate its charms. New Harvey Nichols stores have been launched in Leeds, Birmingham, Edinburgh, Riyadh and now Manchester.

How anyone has managed to do all this when there are so many shopping hours in the day beats me, yet somehow Wan has also managed to find the time to train as a chartered arbitrator. The store’s expansion plans planted the idea. Shortly after Wan arrived, a dispute with the architect who designed Harvey Nichols’ new fifth floor restaurant went to arbitration.

“When I looked at all the refurbishment contracts or the contracts for building new stores, there was always an arbitration clause. At that time I didn’t know much at all about arbitration,” he confesses. “It was exactly because of that ignorance that I said someone in the business must know about arbitration.”

His board colleagues agreed, but in the absence of any willing volunteers, Wan decided to enrol himself as an associate of the Chartered Institute of Arbitrators.

“The initial purpose was just to find out more about arbitration,” says Wan. However, having started an evening course to become an associate of the institute, very quickly the whole subject of arbitration as an alternative to litigation began to appeal. “I found the whole subject fascinating,” he enthuses, “and that’s why, starting from the needs of the business, I developed a personal interest in knowing as much as I could about arbitration.”

Wan says he did not just want Harvey Nichols to get better at fire-fighting its inevitable clashes with architects and developers – he also wanted to be able to brief his lawyers more effectively when contracts were being drawn up. Those lawyers include Norton Rose, Ashurst Morris Crisp, Dundas & Wilson, and now potentially Macfarlanes, which impressed Wan when it advised Poon on the take private.

“I honestly believe that my contracts these days are much better contracts. The proof is that, in the last six or seven years, I’ve had no disputes where I’ve had to go to court, or even to arbitration,” he says.

Wan was attached to an experienced arbitrator, took the necessary evening classes and examinations and finally qualified as a chartered arbitrator two years ago. Having experienced his fair share of litigation horror stories in the past, he is now a committed ambassador for the arbitration cause. He talks a lot about “giving something back” and is involved with the institute’s Mortgage Code Arbitration Scheme and the Personal Insurance Arbitration Scheme.

Wan favours arbitration for the usual reasons: speed, privacy, the chance for parties to choose a relevant expert to arbitrate and, of course, the cost savings associated with minimal involvement from lawyers.

“With due respect to all lawyers, clearly they have no choice but to deal with a number of clients at any one time, so it’s very rare for a lawyer to be able to devote his undivided attention to one case,” says Wan. “I’ve come across situations when they’ve arrived in court and they haven’t fully and comprehensively studied the case, and they’ve said something factually or conceptually not quite right in front of the judge, which has resulted in an unfavourable judgment.”

But the point he labours most is the value of arbitration skills in preventing disputes altogether. His experience came into play last year, when Poon’s buyout of Harvey Nichols was challenged by Deutsche Bank, which owned 15 per cent of the business. Poon, who already owned 51.1 per cent, planned to take private the 49.9 per cent of the company, which was floated in 1996 for 250p per share. But fund manager Ruth Keattch went to great lengths to voice the German bank’s dissent, saying that the business was worth 300p per share.

“[The manager at Deutsche Bank] raised her objection not only through the normal channel, which should normally be quite private, but in the newspapers, which was quite unreasonable,” states Wan. “Of course, as a listed company I had no choice but to seek independent legal advice to see what would be the proper response to the situation.” Norton Rose advised on a letter to be sent to Deutsche with a standard paragraph at the end threatening litigation.

Wan says: “I would entirely agree that that was proper legal advice, but however proper things might be, in business there’s always the exercise of judgement. In the end, when I exercised my judgement, I thought that that paragraph would not contribute much, but potentially could have other negative consequences in terms of making the whole situation worse in terms of a dispute.”

Wan persuaded his lawyers that the paragraph should be removed. “Perhaps that’s why you didn’t hear much [in the press] afterwards.” The deal went ahead on Poon’s pricing.

When I leave Wan’s office, I do so with Harvey Nichols shopping bags sorely missing from my arms. But as far as arbitration goes – Joseph Wan, you have sold it to me.
Joseph Wan
Harvey Nichols