"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well."

-Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Saturday, September 18, 2010

Fortnightly Roundup of SSRN Articles on Arbitration (September 1 - 15)

The 2010 Amendments to the International Arbitration Act: A New Dawn for Australia?
Richard Garnett and Luke R. Nottage

Abstract:
On 6 July 2010 Royal Assent was given to amendments passed by the Australian Federal Parliament relating to the International Arbitration Act 1974 (Cth) (IAA). These were the first substantial changes to the IAA for over 20 years and consequently warrant close scrutiny. Along with some other innovations, they follow most of the 2006 revisions to the 1985 UNCITRAL Model Law on International Commercial Arbitration (Model Law), which has been particularly popular for Australasian jurisdictions updating their arbitration legislation. The amended IAA also provides the agreed core for Australian states and territories updating their Commercial Arbitration Acts (CAAs), although they adopt some variants given that their focus is on domestic arbitrations. This paper considers the amended IAA’s aims, writing requirements for arbitration agreements, enforcement of foreign awards, exclusion of the Model Law, interim measures, confidentiality, other substantive matters, and the temporal application of the 2010 amendments. It concludes that their scope is somewhat limited and unadventurous, but should significantly enhance the legal regime for international arbitration in Australia.

Drinking Poison to Quench Thirst': The Discriminatory Arbitral Award Enforcement Regime under Chinese Arbitration Law
Manjiao Chi

Abstract:
Arbitration makes sense only when the award can be enforced satisfactorily. With the development of the Chinese economy, arbitration is becoming popular in China. Despite the progress and achievements China has made, the award enforcement regime under Chinese arbitration law is seriously defective due chiefly to the out-dated “dual-track system”, unsatisfactory enforcement of the New York Convention awards and prohibition of ad hoc arbitration. These measures make Chinese arbitration law increasingly discriminatory against domestic arbitration and lower courts, and consequently hurt the competitiveness of Chinese arbitration. To ensure the healthy development of Chinese arbitration, mere amendment of legislation is not enough; rather, a full-range judicial reform is needed.

Is Chinese Arbitration Act Truly Arbitration-Friendly? Determining the Validity of Arbitration Agreement Under Chinese Law
Manjiao Chi

Abstract:
This article mainly discusses three major issues in relation to the validity of arbitration agreements under Chinese Arbitration Act (CAA). In addition to the introduction part, Part II and Part III of this article concentrate on the formal requirement and the mandate substantive requirements of arbitration agreements respectively, and Part IV deals with the challenge to the validity of arbitration agreements. The aim of this article is to provide an explanation of CAA provisions relating to arbitration agreements, analyze their defects, explore the methods to improve these provisions in order to help remove unnecessary concerns and serve as references for future amendment work of CAA.

The Fading of Compulsory Consolidation of Arbitration: A Fight between the Principles of Efficiency and Party Autonomy in International Commercial Arbitration
Manjiao Chi

Abstract:
International commercial disputes are getting more complex with the time being, which necessitates the adoption of compulsory consolidation of arbitration by the courts in some countries and regions. In practice, courts usually justify their decisions on three major grounds. However, compulsory consolidation of arbitration in essence is in violation of major principles and natures of international commercial arbitration system, and thus has insurmountable pitfalls. Consequently, a review of recent legislation and practice shows that compulsory consolidation of arbitration is fading nowadays world-widely.

Time to Make a Change? A Comparative Study of Chinese Arbitration Law and the 2006 UNCITRAL Model Law and the Forecast of Chinese Arbitration Law Reform
Manjiao Chi

Abstract:
In addition to the introduction (Part A) and conclusion (Part F), this Note consists of four parts: Part B discuses the legal framework of Chinese arbitration law; Part C, D and E respectively focus on three major amendments of the 2006 UNCITRAL Model Law vis-√†-vis the Chinese arbitration law: the written form requirement of arbitration agreement, the interim measures of protection in arbitration proceedings and the recognition and enforcement of arbitral award, and raise suggestions for the upcoming reform of Chinese arbitration law in these aspects. This Note observes that the transplantation of the “new standard” into Chinese arbitration law is an issue of more political than legislative nature. Even though China may partly adopt the “new standard” under the current sociopolitical background, no fundamental outbreak could be expected unless the complete judicial independence is achieved.

Non-Signatories to the Arbitration Agreement: Recent Developments in Brazil
Pedro Costa Braga

Abstract:
This draft article touches on Brazilian case law relating to jurisdiction over non-signatories of arbitral clauses. It discusses upper court decisions on both the “extension” and the “assignment” of arbitral clauses under Brazilian law.

The Arbitrators Perspective: Cultural Issues in International Arbitration
Shahla F. Ali

Abstract:
The theme of cultural convergence and divergence in international arbitration practice is both broad and deep. It is played out daily in multiple arbitral locations, at the crossroads of different legal systems, party and counsel behavior, arbitrator predisposition, and local customs. Examining both the convergence and divergence of approaches to arbitration in diverse settings provides an avenue to understanding the impact of globalization on the international practice of law.

This chapter introduces us to this vast subject matter, taking a higher view while at the same time touching briefly on cultural differences in arbitration practice between mainland China and Hong Kong where the author is located. The author goes one step beyond strict arbitration to explore the cultural aspects of using mediation in combination with arbitration, analyzing with surveys how this approach has been received worldwide.

The Role of Domestic Courts in International Commercial Arbitration
Angualia Daniel

Abstract:
With the tremendous growth in international trade and investments, international commercial arbitration has become a frequently used mechanism to settle investment/trade/contractual disputes. Most people are of the opinion that resolution of dispute by litigation in court is time consuming and money consuming whereas arbitration may speed the resolution and lower the expenses of disputes. However to ensure the integrity of the arbitral process and protect the public interest, the courts must support and supervise that process. On the other hand, to prevent the confidence of users of the arbitral system from being damaged, the level of judicial control should not be too high. The debate in international commercial arbitration is what scale of judicial intervention should be allowed. While it is argued that arbitration must be free from courts, in order to be effective, it is also accepted that arbitration needs the support of national courts to be effective. Flowing from this contention laws and rules has been formulated to balance the competing interests.

Resolving Disputes in the Asia Pacific: International Mediation and Arbitration in East Asia and the West
Shahla F. Ali

Abstract:
How diverse cultures approach conflict in the context of the integration of global markets is a new arena for research and practice. To date, most of the research on international arbitration has focused exclusively on Western models of arbitration as practiced in Europe and North America. While such studies have accurately reflected the geographic foci of international arbitration practice in the late twentieth century, the number of international arbitrations conducted in East Asia has recently been growing steadily and on par with growth in Western regions.

Resolving Disputes in the Asia-Pacific Region presents empirical research about the attitudes and perceptions of over 115 arbitrators, judges, lawyers and members of the rapidly expanding arbitration community in China, Hong Kong, Korea, Japan, Singapore, and Malaysia as well as North America and Europe. The both covers both international commercial arbitration and "alternative" techniques such as mediation, providing an empirical analysis of how both types of dispute resolution are conducted in the East Asian context. The book examines the history and cultural context surrounding preferred methods of dispute resolution in the East Asian region and sheds light on the various approaches to international arbitration across these diverse regions.

This book will be of great interest to students and scholars of international arbitration and dispute resolution, comparative and Asian law, as well as anyone dealing with potential conflict in international business relationships in East Asia.

When is a Forum 'More Favourable'? The Use of MFN Clauses to Found an Investment Arbitration Tribunal’s Jurisdiction
Tony Cole and Madhur Agrawal

Abstract:
The goal of this article is to provide a baseline analysis of the operation of MFN clauses in the international investment law context, from which more refined analyses can be made of the operation of a particular clause in a particular context. The restriction of the present analysis to this baseline approach is necessary because although MFN clauses are a common feature of international investment agreements, the language in which they are expressed can differ significantly, and any such differences will, of course, impact upon their manner of operation. However, while attention must ultimately be paid to the specific language adopted in each individual MFN clause, this does not entail that nothing can be said regarding the operation of such clauses generally. Rather, it simply means that the general analysis offered here can always be varied by States through the language they choose for the MFN clause they adopt. That is, the analysis offered here provides a first step in the analysis of any individual MFN clause, it does not provide the final word.

From Jumping Frogs to Graffiti-Painted Walls Legal Issues Caused by Mistranslation in International Commercial Arbitration
Marianne Dellinger

Abstract:
In a world of global business and connectivity, the translation industry has become vital to today’s commercial players. Nonetheless, translation services are often considered fungible and thus not given much thought. This often leads to mistranslation and legal problems requiring solution by international arbitral institution and courts of law.

This article examines existing translation standards in select arbitral conventions, institutional rules, and select national legislation. On that background, it analyzes typical resolutions of legal issues caused by substandard translation in both arbitral and post-arbitral proceedings. In spite of some existing rules governing translation, the outcome of quasi-legal and legal proceedings in this area is highly uncertain and divergent. Thus, the article proposes possible preventive solutions to the demonstrated problem.

Getting to the Law Applicable to the Merits in International Arbitration and the Consequences of Getting it Wrong
Linda Silberman and Franco Ferrari

Abstract:
This paper critically examines the importance of conflicts of laws rules in determining the law applicable to the merits. In doing so, it analyzes the various view taken on the issues both by commentators and arbitral tribunals. The paper also focuses on the consequences of an erroneous choice of law decision by the arbitrators in the context both of annulment and recognition and enforcement of arbitral award.

The Litigation-Arbitration Dichotomy Meets the Class Action
Richard A. Nagareda

Abstract:
Courts and commentators often conceive of litigation and arbitration as dichotomous regimes for civil dispute resolution. Two new decisions from the Supreme Court provide the occasion to rethink this conventional view. In Shady Grove v. Allstate Insurance, the Court acknowledges that a class action often alters dramatically the incidence of claiming but, for purposes of the Rules Enabling Act, the Court deems this effect to be merely “incidental.” In Stolt-Nielsen v. AnimalFeeds, however, the Court deems the use of class-wide arbitration to be such a “fundamental” change as to lie outside the authority of arbitrators in the face of contractual silence as to class treatment.

This Article – for the annual Federal Courts, Practice & Procedure issue of the Notre Dame Law Review – urges a more synthetic understanding of litigation and arbitration. For all their differences, the Court’s accounts of class treatment under the Rules Enabling Act and the Federal Arbitration Act (FAA) evidence a deep, but undertheorized, convergence. Shady Grove is the latest of the Court’s efforts to map the proper relationship between federal and state law under the Erie and Hanna doctrines. This Article explains how the Court’s arbitration jurisprudence has come to replicate key structural features of the Erie and Hanna doctrines in litigation. The Article then underscores the transnational dimensions of arbitration in our modern world of globalized commerce – one that frames in a new light the holding in Stolt-Nielsen within the context of the Court’s thinking about extraterritoriality and transnational recognition of judgments in litigation.

The Article then turns to a case now before the Court – AT&T Mobility v. Concepcion – concerning an arbitration clause that would waive the opportunity for consumers to participate in either a class action or a class arbitration. The Article explains how the approach of the lower courts in Concepcion presents the Supreme Court with the counterpart, in the arbitration setting, to the mistaken application of state law rightly overturned in Shady Grove under the Hanna doctrine. Such a view nonetheless would afford ample latitude for contextual, Erie-like analysis of other arbitration clauses with class waivers tantamount to exculpatory clauses. The Article concludes by situating its synthetic conception of litigation and arbitration within ongoing debate over the proposed Arbitration Fairness Act.

The End of Mandatory Securities Arbitration?
Jill Gross

Abstract:
In this essay, I examine recent Congressional efforts to ban pre-dispute arbitration clauses in securities brokerage account agreements and thus eliminate mandatory arbitration of customer-broker disputes. In the proposed Arbitration Fairness Act, Congress would ban such clauses in all consumer contracts, including in the securities industry. However, securities arbitration - whose fairness is regulated with substantial oversight by the Securities and Exchange Commission - does not suffer from the same features and flaws that critics of arbitration in other forums have excoriated as oppressively unfair. In the recently-enacted Dodd-Frank Act, Congress delegated to the SEC the authority to prohibit arbitration clauses in customer agreements through admininstrative rule-making. After examining these regulatory efforts, I argue that neither Congress nor the SEC should prohibit mandatory securities arbitration because it would have significant adverse consequences for investors and for the vitality of the dispute resolution mechanism. The essay concludes by asserting that regulators should not enact arbitration reform that needlessly and without foundation brands securities arbitration as the evil twin of adhesive consumer

Reinstatement in Arbitration: The Grievors' Perspective
Kelly Williams and Daphne G. Taras

Abstract:
Virtually absent in the arbitration literature is the voice of the grievor. We examine post-reinstatement experiences primarily from the perspectives of a group of seven Alberta grievors. We first review the declining frequency of Alberta arbitrations, the extent to which dismissal cases form a proportion of the arbitral caseload, and the relatively low rate of reinstatement. Findings are: (1) grievors are unaware of the public availability of arbitration awards; (2) reinstated grievors are critical of the union that successfully defended them; (3) they have a more benign view of management;(4) very little reinstatement assistance is offered; and (5) grievors' positive attitudes to their worksites are more determinative of successful reinstatement than remorse and acceptance of culpability.

The Arbitration Fairness Act: Unintended Consequences Threaten U.S.
Edna Sussman

Abstract:
Various proposed bills to amend the Federal Arbitration Act (FAA) have been gaining support in the U.S. Congress. The most prominent of the bills introduced is the Arbitration Fairness Act of 2007 introduced in the 110th Congress in the House and the Senate and reintroduced in largely the same form in the 111th Congress in the House of Representatives. The Senate version of the bill was reintroduced in the 111th Congress with significant improvements. The bills’ proponents do not intend the bills to interfere with international arbitration, but the amendments do not distinguish between domestic and international disputes. The proposed Act is intended to render arbitration agreements invalid or unenforceable with respect to consumer, employment or franchise disputes, but the House version as drafted has much broader and unfortunate consequences. This paper reviews the proposed amendments to the FAA in the House version of the bill, their impact on international arbitration in the United States and the effect on U.S. companies, the U.S. legislation and Supreme Court decisions which form the basic legal predicate for international arbitration in the United States, why arbitration is the preferred method for dispute resolution in international matters, the U.S. role in international arbitration, the proposed amendments to the FAA as they relate to consumers, employees and franchises, the proposed amendments to the FAA as they relate to competence-competence and separability, the consequences of the Act’s substantive and procedural changes, questions as to whether the proposed amendments to the FAA implicate any treaty violations by the United States and finally whether the time has come for the enactment of a separate full-fledged federal international arbitration statute and suggest other legislative solutions to minimize unintended consequences.

Receptivity of ADR in Brazil for Commercial Disputes
Pedro Costa Braga

Abstract:
This article discusses the reasons for non-utilization of ADR in Brazil.It also suggests that mediation and other ADR may follow the footsteps of arbitration, which received broad acceptance by Brazilian lawyers and businesspeople. The article concludes with some steps to make ADR more popular in Brazil.

Designing Effective Med-Arb and Arb-Med Processes in Brazil
Pedro Costa Braga

Abstract:
This article discusses the use of med-arb and arb-med in Brazil, with presentation with legal and practical requirements to the effective use of those two ADR techniques.

Privatizing the Adjudication of Disputes
Bryan Caplan and Edward Peter Stringham

Abstract:
Must the state handle the adjudication of disputes? Researchers of different perspectives, from heterodox scholars of law who advocate legal pluralism to libertarian economists who advocate privatizing law, have increasingly questioned the idea that the state is, or should be, the only source of law. Both groups point out that government law has problems and that non-state alternatives exist. This article discusses some problems with the public judicial system and several for-profit alternatives. Public courts lack both incentives to be customer oriented and pricing mechanisms, plus they face problems associated with the bureaucratic provision of services.

When parties can choose their tribunals, in contrast, those tribunals must serve customers and be mindful about conserving resources. Competition between arbitrators also can allow for experimentation and the provision of customized services rather than a centrally planned, one size fits all system. Contracts with an arbitration clause can easily stipulate the choice of tribunal, and we argue that if government courts simply refused to overrule binding arbitration agreements, de facto privatization could easily take place. This article discusses how private adjudication of disputes could enable the market to internalize externalities and provide services that customers desire.

Alternative Dispute Resolution of Employment Discrimination Claims: Does Race Matter When Reading Ricci and Pyett?
Michael Z. Green

Abstract:
In the landmark article by Richard Delgado and his co-authors, Fairness and Formality: Minimizing the Risk of Prejudice in Alternative Dispute Resolution, 1985 Wisc. L. Rev. 1359, the authors attacked the increasing use of alternative dispute resolution (ADR) to resolve disputes because of the risks of prejudice. Using social science research, the authors argued that the informality of these methods of dispute resolution had a negative impact on persons of color. This paper looks at the impact of ADR in the workplace as a method to resolve employment discrimination claims and re-examines the concerns espoused by the Delgado article which has reached its twenty-five year anniversary. In particular, the paper compares the opportunities for formalized resolution of employment discrimination disputes through the courts with the informalized resolution of employment discrimination disputes under ADR. Using the Supreme Court's analysis in two recent cases, Ricci v. DeStefano and 14 Penn Plaza v. Pyett, as a framework for understanding purported post-racial analysis of employment discrimination dispute resolution, the author's thesis asserts that a balance of both informal and formal dispute resolution processes would represent the best possibilities for employees of color seeking racial justice in today's workplace. To achieve this balance, the author focuses on developing workplace arbitration and mediation processes that offer workers of color a fair opportunity for voice and resolution. With this focus, the author searches for racial justice opportunities that will allow employers, employees, and unions to converge their interests to support a comprehensive dispute resolution system.

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