"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.

Wednesday, November 3, 2010

Fortnightly Roundup of SSRN Articles on Arbitration (October 16 - 30)

Capping the Costs of Consumer and Employment Arbitration
Michelle Eviston and Richard A. Bales

Arbitration agreements requiring arbitration but imposing costs of thousands of dollars can effectively make it impossible for consumers and employees to bring their disputes in any forum. The Supreme Court has stated that high costs can make an arbitration agreement unenforceable, but has not articulated clear standards. Lower courts are split two ways on the issue: some courts have adopted a per se approach and others a case-by-case approach. This article argues that the Federal Arbitration Act should be amended to take a third approach: arbitration fees paid by consumers or employees should be limited to what consumers or employees would pay if they litigated their claim.

Maryland's International Commercial Arbitration Act: Business Opportunities
Francis J. Gorman

In 1990 Maryland enacted the Maryland International Commercial Arbitration Act, Md. Cts. & Jud. Proc. Code Ann. §§ 3-2&01 to 09, statute dealing with international commercial arbitration's within the State of Maryland. Uniquely in the United States, the Act precludes the application of state law to international commercial arbitration's within the state, making federal law the sole applicable body of law.

The purpose of the Act is to make Maryland an attractive site for international commercial arbitration's - attractive both to Maryland-based businesses involved in international business transactions and to other U.S. or foreign-based businesses looking for a US. site for international arbitration's. To this end, the Act makes only one body of law-uniform federal law-applicable to the process and enforcement of international commercial arbitration's in Maryland; thus it should eliminate any argument that Maryland law applies to the process and enforcement of international commercial arbitration in the state. This will add certainty and uniformity to the business and legal climate for international arbitration's held here.

Sapphire Arbitration
Martins Paparinskis

An entry on the Sapphire Arbitration for the Max Planck Encyclopaedia of Public International Law.

The Use and Enforcement of Arbitration Agreements in U.S. Courts with a Focus on the Western Hemisphere
James J. Woodruff II

A review of the use of arbitration agreements and their treatment by U.S. Courts.

Fighting for the Debtor's Soul: Church Autonomy and Religious Arbitration
Michael A. Helfand

While courts often think of religion in terms of faith, prayer, and conscience, many religious groups are increasingly looking to religion as a source of law, commerce, and contract. As a result, courts are being called upon to apply the church autonomy doctrine – which bars courts from reviewing matters of faith, doctrine, and church governance – where commercial conduct is religiously motivated. In this Article, I consider an example of the challenges faced by courts when trying to interpret and regulated religious commerical conduct: the constitutionality of imposing sanctions for violating the Bankruptcy Code's automatic stay by submitting a dispute for religious arbitration. In considering this example, I suggest that courts, instead of trying to take religion out of the equation, need to develop an increasingly sophisticated understanding of the religious dynamics of a case to know when they can – and cannot – review and regulate the conduct in question.

Arbitrator Appointments in Investment Arbitration: Why Expressed Views on Points of Law Should Be Challengeable
Tony Cole

This paper argues that contrary to contemporary practice, it should be possible to prevent an arbitrator being appointed to a tribunal because he/she has expressed opinions on general principles of law that will have a central role in the arbitration, even where no judgement has been made regarding the application of those laws to the case at hand.

The Serviceable Texts of International Commercial Arbitration: An Embarrassment of Riches
Jack J. Coe Jr.

International commercial arbitration as an institution owes much to the endeavor of comparative law technicians whose consensus-based texts have significantly unified the basic international arbitration model. This essay describes some leading examples of such formula and briefly suggests the role they have already played in the relatively new context of NAFTA investment arbitration. The penultimate section introduces certain newly published texts and works in progress that are likely to exert a further unifying influence. Taken together, they illustrate how, over time, international commercial arbitration – a largely private, autonomous mechanism – has been edified and refined by the steady introduction of new sources of normative guidance.

Sources of Law and Arbitral Interpretations of Pari Materia Investment Protection Rules
Martins Paparinskis

Reliance by investment treaty arbitration tribunals on the case law of their predecessors is an empirically well-documented process in contemporary law. This practice has given rise to different attempts of conceptualisation both in the case law itself and in legal writings. This chapter does not address the contribution of case law to the development of international law in general or international investment law in particular. The present analysis instead considers the logically anterior question in the context of investment arbitration, namely whether and how arbitral elaborations in earlier cases of pari materia rules from other treaties are legally relevant for interpreting a particular treaty rule. It is suggested that even though the traditional approaches cannot fully explain the existing practice, no qualitatively new framework has emerged and therefore a more formalistic or alternatively a more cautious approach to interpretation and sources would be preferable. In particular, to the extent that the anterior adjudicator has explained a rule of customary or treaty law that falls within the admissible interpretative materials of the particular interpretative exercise, verbatim reliance on the case law in the manner is perfectly permissible. In the absence of such nexus, direct reliance on earlier awards for case-by-case elucidations would be justified only in limited circumstances.

Investment Protection Law and Sources of Law: A Critical Look
Martins Paparinskis

During the last decade investment arbitration has made a considerable contribution to the development of investment protection law. This contribution discusses some sources of law implications of the extensive reliance that investment arbitration tribunals place on the case law interpreting pari materia treaty rules. It considers whether the interpreters are entitled to rely on interpretations of pari materia rules by reference to the concepts of ordinary meaning, generic terms, supplementary means or customary law. Underlying customary law apart, the authority to engage in such an interpretative exercise is not necessarily obvious. It may be advisable to reconsider the benefits of a more formalistic approach to sources with a clearer identification of applicable law. Whatever a priori jurisprudential reasons for consistency States may be presumed to have, practice shows them as satisfied with the existing framework encapsulating the procedurally and substantively fragmented system.

The Enron Annulment Decision's Exposure of Necessity's Endemic Uncertainty: A Welcome Critique

Sahib Singh

This is a comment on the Enron Annulment decision of 30 July 2010. The decision is fascinating for a number of reasons, but this post shall concentrate on the Committee's analysis of the "only means" requirement under the customary doctrine of necessity. Whilst highlighting the inherent ambiguity in the application of these words, the Committee's inquisitorial approach may create more problems than it solves. Accordingly, this post concludes with a rough sketch of logical steps a tribunal may take in applying the "only means" requirements under custom.

Interlocutory Review by Agreement of the Parties: A Preliminary Analysis
James E. Pfander and David R. Pekarek Krohn

Although the nineteenth century's final judgment rule no longer represents an absolute barrier to interlocutory appellate review, scholars disagree about what should take its place. Some favor a regime of discretionary interlocutory review, with power conferred on appellate courts to select issues that warrant intervention. Others reject discretionary review as a waste of appellate resources and call upon the rule makers to identify specific categories of non-final orders that always warrant review. While the Supreme Court's collateral order doctrine bears some similarity to this process of categorization, the Court may have called a halt to the judicial recognition of new categories in its 2009 decision in Mohawk Industries, Inc. v. Carpenter.

In this Article, we suggest a new approach to interlocutory review that combines elements of discretion and categorization. We argue that the district court should be empowered to certify a question for interlocutory review (categorically) whenever the parties to the litigation so agree (in the exercise of joint discretion). Drawing on the case-selection literature, we show that the parties will often share a financial interest in interlocutory review where they recognize that a decisive issue of law will survive any trial court disposition. Where the costs of preparing the case for trial are substantial and the risks of appellate invalidation significant, the parties have more to gain than lose through appellate review. What's more, the orders chosen by agreement of the parties make good candidates for immediate appellate review. Agreed-upon review will occur only as to issues that the parties regard as presenting close questions that the jury cannot settle.

The NLRA's Legacy: Collective or Individual Dispute Resolution or Not?
Carrie Menkel-Meadow

In this brief essay I review the legacy of the NLRA for dispute resolution - which is a mixed legacy, for both employment and labor rights, as well as for other areas of human disputing. The processes which grew around labor rights, including collective bargaining, negotiation, arbitration, mediation, med-arb and other "impasse" breaking techniques are good developments, demonstrating that there are other forms of dispute resolution, rather than winner-take-all litigation, brute struggles of power within "unassisted" negotiation, or worse, violent conflict. Labor processes, beginning with collective bargaining and grievance arbitration that became hybridized and more complex, such as grievance mediation and med-arb, were important innovations that spawned a whole new field in dispute resolution - dispute system design. But, in what many regard as a distortion of using alternative processes to reduce the contentiousness of litigation, or to save costs, or to serve some other (usually, employers') interests, arbitration placed in mandatory, pre-dispute contracts of employment (and now all other kinds of contracts) and then interpreted to be the only form of dispute resolution available, is a controversial legacy which is hardly producing labor "peace." Indeed, the very goals of "collective" employment rights may be eroded as rulings from non-union individual employment matters (and commercial contracts more generally) are being "blended" with and eviscerating what were often intended to be collective rights. The legal processes that have developed around the separation of legal concepts and consciousness of "employment" (seen as individual rights) versus labor (seen as collective rights) is one of the major themes of this essay.

In this examination of the NLRA's legacy it is important to recognize how much processes used to deal with labor-management relations have given us, but also how different processes for different purposes might be essential for producing not only labor peace, but labor justice. As I have argued about processes in general - process pluralism - process choice and variety may be essential for delivering some form of justice in different contexts. Labor relations might benefit from learning that lesson - one size will not fit all, including limited (under current law and practice) labor negotiation and bargaining strategies, "mandatory" commitment to grievance or employment arbitration in different contexts, whether contractual or statutory, and in my view, insufficient attention to mediation, for both collective and union-management, as well as individual, issues and disputes.

Enforcement of Arbitral Awards in Sub-Sahara Africa
Emilia Onyema

As the world celebrated the fiftieth anniversary of the New York Convention in 2008 it became necessary to examine the enforcement regimes for arbitration awards in Sub-Sahara Africa. This article examines the provisions for the recognition and enforcement, and requirements for the setting aside of both domestic and international arbitral awards under the arbitration laws of OHADA member states, Nigeria and Sudan, as representative of the legal regimes in Sub-Sahara African countries. The New York Convention applies to Convention awards in half of the countries of Sub-Sahara Africa. It is therefore relevant to examine the requirements for the enforcement of non-Convention awards in those states that are members of the New York Convention, and also in those states that are not members of the New York Convention. Different arbitration laws and regimes apply in the three representative jurisdictions chosen for this comparative analysis and these are also representative of the legal regimes in those countries with arbitration laws in the region. Though a generally supportive tendency towards the enforcement of arbitral awards can be gleaned from the examination of some arbitration-related judgments, this article again highlights the importance for the remaining countries in the region yet to sign up to and implement the New York Convention to consider adopting it, and for more arbitration hearings to be held within the region.

The COMESA Common Investment Area: Substantive Standards and Procedural Problems in Dispute Settlement
Peter Muchlinski

The Common Market for Eastern and Southern Africa (COMESA) is an organisation of 20 African states established in 1994, replacing the previous Preferential Trade Area between the members. Since its inception COMESA has taken an active role in the economic integration of its members. In 2000 the COMESA Free Trade Area was established. On 22 and 23 of May 2007 the twelfth Summit of COMESA Authority of Heads of State and Government, held in Nairobi, Kenya, adopted the Investment Agreement for the COMESA Common Investment Area (CCIA Agreement). According to COMESA, "the CCIA Agreement is a precious investment tool whereby the COMESA Secretariat contemplates to create a stable region and good investment environment, promote cross border investments and protect investment, and thus enhance COMESAs attractiveness and competitiveness within COMESA Region, as a destination for Foreign Direct Investment (FDI), and in which domestic investments are encouraged." Among the key pillars of the Agreement is the, "settlement of investment disputes through negotiations and arbitration mechanism." It is the purpose of this paper to examine the new CCIA Agreement and the investor-state dispute settlement mechanism that this treaty has put in place. It will do so not only through an examination of procedural structures, but also by considering the interaction between these and the substantive claims that can be brought by an investor under the Agreement. The paper will do so in three stages. First, so as to set the scene, the wider contemporary debate on the problems of investor-state dispute settlement, and their proposed solutions, will be examined so as to explain the background against which the dispute settlement provisions of the CCIA Agreement were finalised. It is clear from the face of these provisions that they seek to offer a new approach to investor-state dispute settlement which takes into account the types of problems that will be outlined below. Indeed it is fair to say that the CCIA Agreement is a significant new model for these purposes, in that it proposes an approach that is sensitive to the realities of developing states and of the particular conditions that influence approaches to international commercial arbitration in Africa. Given that the majority of International Investment Agreements (IIAs) are based on developed country or developed regional models, this requires that serious attention is paid to the CCIA Agreement in the wider investment law community. It offers an alternative formulation and points to how future generations of IIAs might be drawn up so as to provide, in the words of the Agreement, "investors with certain rights in the conduct of their business within an overall balance of rights and obligations between investors and Member States." The second part of the paper will offer a detailed analysis of the investor-state dispute settlement procedures in the CCIA Agreement. The third part will then consider the types of claims that an investor can make under the Agreement. There are numerous innovations in the substantive provisions of the Agreement that will have a significant effect on the subject matter of possible claims and thus on their admissibility before a tribunal whose jurisdiction is based on the Agreement.

Transnational Legality and the Immobilization of Local Agency
David Schneiderman

The organizational logic of the legal rules and institutions of economic globalization treats as suspect economic regulation issuing out of the democratic processes of national and subnational communities. In this way, economic globalization can be likened to state formation: as a cultural project with the object of actively suppressing alternatives. While undermining the regulatory capacity of local publics to tame markets, transnational legality prefers to draw on the normative ideas of comparative advantage, consumer freedom, and the rule of law. These discursive strategies prove an unstable basis for legitimation without the critical supports provided by national states in gaining and maintaining the consent of local publics. As the findings of a recent international arbitration panel indicate (CMS v. Argentina), transnational legality prefers to view the local as a threat to the maintenance of its political-economic order, one of open borders free of rent-seeking public regulation. This will be the case even when states, like Argentina, take measures to mitigate the hardships of a severe economic downturn. Some critical theorists, like Hardt & Negri in Empire, similarly relegate the local to a marginal place without appreciating its contradictory but sustaining role in globalization's future. Such theoretical interventions, operating in conjunction with the disciplining effects of globalization's legal order, help to immobilize, rather than empower, resistance to the monocultures of transnational legality. The question remains whether the shaky foundations upon which the legitimacy of transnational legality are structured will prove less durable than its immobilizing effects

No comments: