Contract and Procedure
Christopher R. Drahozal and Peter B. Rutledge
Abstract:
This paper examines both the theoretical underpinnings and empirical picture of procedural contracts. Procedural contracts may be understood as contracts in which parties regulate not merely their commercial relations but also the procedures by which disputes over those relations will be resolved. Those procedural contracts regulate not simply the forum in which disputes will be resolved (arbitration vs litigation) but also the applicable procedural framework (discovery, class action waivers, remedies limitations, etc.). At a theoretical level, this paper explores both the limits on parties' ability to regulate procedure by contract (at issue in the Supreme Court's recent Rent-A-Center decision) and the scope of an arbitrator's ability to fill gaps in parties' procedural contracts (at issue in the Supreme Court's recent Stolt-Nielsen decision). At an empirical level, this paper taps a largely unexplored database of credit card contracts available at the Federal Reserve in order to examine actual practices in the use of procedural contracts.
Claim-Suppressing Arbitration: The New Rules
David S. Schwartz
Abstract:
Binding, pre-dispute arbitration imposed on the weaker party in an adhesion contract so-called "mandatory arbitration" should be recognized for what it truly is: claim-suppressing arbitration. Arguments that such arbitration processes promote access to dispute resolution have been refuted and should not continue to be made without credible empirical support. Drafters of such arbitration clauses are motivated to reduce their liability exposure and, in particular, to eliminate class claims against themselves. Claim-suppressing arbitration, furthermore, violates two fundamental principles of due process: It allows one party to the dispute to make the disputing rules; and it gives the adjudicative role to a decision maker with a financial stake in the outcome of key jurisdictional decisions "that is to say, arbitrators have authority to decide their own power to decide the merits, a question in which they have a financial stake. The Supreme Court has facilitated this doctrine through a series of poorly-reasoned and incoherent decisions, in which the Court's liberal wing has been particularly inept at seeing the stakes for consumer and employee plaintiffs. Exploiting Justice Breyer's incoherent line of majority opinions attempting to identify "gateway" issues, the conservative Court majority has recently insulated all questions of enforceability of arbitration clauses from judicial review and is on the verge of allowing corporate defendants to immunize themselves from class actions through use of arbitration clauses.
Are Arbitrators Above the Law? The 'Manifest Disregard of the Law' Standard
Michael H. LeRoy
Abstract:
Arbitration is supposed to be final and binding. But federal and state laws, and judicial doctrines, allow courts to vacate arbitrator awards. This study contemplates the role of courts when they review awards that “manifestly disregard the law” - a term that means the arbitrator knew the law but chose to ignore it. Given the norm of arbitral finality, should courts vacate these rulings?
Hall Street Associates v. Mattel, Inc., 552 U.S. 576 (2008), failed to answer this question. The parties asked a court to review their award for errors of law. This standard is not in the Federal Arbitration Act (FAA). Hall Street ruled that courts cannot review awards beyond the FAA’s express terms. The parties’ standard prompted Hall Street to ask whether courts may apply “manifest disregard of the law,” even though it is not in the FAA. Inscrutably, Hall Street answered: “Maybe the term ‘manifest disregard’ was meant to name a new ground for review, but maybe it merely referred to the [FAA’s] § 10 grounds collectively, rather than adding to them.”
I analyze “manifest disregard” by using historical and empirical methods. Common law courts vacated awards for “fraud,” “corruption,” “partiality,” or if arbitrators “exceeded powers.” The FAA enumerates these as grounds to vacate awards. In the same sequence with these terms, nineteenth century courts vacated awards for “manifest mistake” or “palpable mistake” of the law. I contend that Congress inadvertently omitted “manifest disregard” from the FAA. To answer Hall Street’s equivocation: “Manifest disregard of the law” is part of the FAA.
This sets the stage for my empirical question: Has Hall Street led courts to confirm more awards, thus promoting finality? The answer is yes. In 46.4% of federal cases and 21.8% of state cases, parties in my database argued that an award manifestly disregarded the law. Still, state appellate courts confirmed more employment awards after Hall Street was decided on March 3, 2008 - 88.9% (16/18), compared to 70.9% (73/103) from 1975 until Hall Street. Federal district courts confirmed 93.7% of awards (164/175) before Hall Street, and 90.9% (30/33) after. Federal appeals courts confirmed awards at a high rate before and after Hall Street (87.8% and 85.7%).
Unfortunately, Hall Street’s muddled analysis has split federal circuits. The Fifth and Eleventh Circuits ruled that Hall Street ended “manifest disregard,” but the Second, Sixth, and Ninth Circuits still treat it as part of the FAA. The First, Third, Fourth, and Tenth Circuits avoided ruling on the standard. In addition, state courts have differed in their reactions to Hall Street.
This fractured approach implies that the Supreme Court may reconsider its vague treatment of “manifest disregard.” The Court should affirm this standard. My findings show that review for “manifest disregard” does not erode finality. The standard translates to nanoscale review of awards. As one court put it: “There is...a way to understand ‘manifest disregard of the law’ that preserves the established relation between court and arbitrator...It is this: an arbitrator may not direct the parties to violate the law.” Judges have applied this concept for two centuries to ensure that private tribunals conform to the laws. This rationale is particularly relevant because so much arbitration has changed from a voluntary to mandatory process. Judicial review must be allowed to correct an arbitrator’s intentional flouting of the law. If “manifest disregard” is eliminated, arbitral finality will rise above the crowning principle of the American constitutional system: “No man in this country is so high that he is above the law.” (U.S. v. Lee, 106 U.S. 196, 220 (1882)).
Shifting the Paradigm of the Debate: A Proposal to Eliminate At-Will Employment and Implement a 'Mandatory Arbitration Act'
Zev J. Eigen , Nicholas Menillo and David Sherwyn
Abstract:
This article recasts the debate over mandatory arbitration of employment disputes as a discussion of the need to overhaul some critical elements of the way in which workplace rights disputes are adjudicated. Efforts to overhaul the system such as the Arbitration Fairness Act perpetuate the status quo of unjust cost-driven exploitation by law-breaking employers and employees alike. The authors provide an alternative two-part solution. First, we propose a "Mandatory Arbitration Act" that attempts to remedy legitimate problems like forum privacy that increase bad employers' abilities to hide from the law, while retaining significant benefits of pre-dispute arbitration like flexibility, speed, and reduced costs which augment access to justice for low wage earners. Second, we propose that employees engaged in interstate commerce can be terminated only if there is cause for the termination or severance pay given in lieu thereof. The article outlines a new employment standard that will provide employees with protection, allow employers to operate with greater certainty, and restore creditability and accountability to discrimination law.
The Limits of Procedural Private Ordering
Jaime Dodge
Abstract:
Civil procedure is traditionally conceived of as a body of publicly-set rules, with limited carve-outs – most commonly, forum selection and choice of law provisions. I argue that these terms are mere instantiations of a broader, unified phenomenon of procedural private ordering, in which civil procedure is no longer irrevocably defined by law, but instead is a mere default that can be waived or modified by contract. Parties are no longer merely selecting between publicly-created procedural regimes but customizing the rules of procedure to be applied by the court – from statutes of limitations, discovery obligations and the admissibility of evidence, to burdens of proof, available remedies and standard of review – before a dispute arises. The resulting conversion of procedural rules from publicly-created guarantors of procedural justice to privately-bargained commodities fundamentally alters our system of civil procedure.
But the impact transcends civil procedure, as the existing doctrine allows parties to use procedural terms not only to reinforce their substantive obligations under contract or statutory default rules, but to circumvent limits on the alienability of non-waivable rights – reducing even those substantive laws designated as mandatory to a mere set of default rules.
I argue that while procedural contracting can often enhance both private and social welfare, we should not permit its use as a mechanism for contracting around existing limits on private ordering. The Article concludes by exploring the viability of a symmetrical approach, whereby any applicable limitations upon the substance of a contract are applied with equal force both to substantive terms and procedural terms. Likewise, this approach denies enforcement to procedural contracts seeking to modify elements of procedure that have been removed from the ambit of modification via stipulation during the litigation process, creating symmetry between pre- and post-dispute contracts.
The degree of procedural alteration permitted is thus a function of the contracting parties’ right to modify or waive the underlying substantive right that gives rise to the claim at issue; the procedural contract is then treated as an ex post stipulation, for purposes of determining the judicial enforceability of the particular modification. In this way, the symmetrical approach permits procedural contracting to further the parties’ legitimate ends, while preventing its use as a method for circumventing limitations on private ordering.
Iura Novit Curia and Due Process
Julian Lew
Abstract:
A recent survey of 817 international commercial arbitrations revealed that ninety one different laws or systems where applicable in those cases. The choice of applicable law is of great importance in international arbitration but in most cases the question of "which law applies?" is resolved by the parties express choice of law. By contrast the process by which the arbitrator ascertains sufficient knowledge of the content of that applicable law is rarely considered. This article explains the different ways in which an arbitrator may learn the rules of law that it must apply to the specific issues that arise before the Tribunal. Approaches to this issue differ in national courts both within common law and within civil law legal systems, with some adopting the principle of iure novit curia - the court knows the law - and others relying on the parties to plead and prove the law to the court. In international arbitration there is no uniform practice applied to this issue. This paper suggests that in international arbitration neither approach to the content of laws question prevails. Subject to due process requirements and in absence of agreement of the parties, arbitrators are free to develop procedures appropriate to the needs of the specific arbitration.
Afterthoughts: International Commercial Contracts and Arbitration
Luke R. Nottage
Abstract:
This article mainly responds to Professor Bonell’s three proposals to expand usage of the UNIDROIT Principles of International Commercial Contracts (UPICC). As UPICC are primarily opt-in rules, they can be more ambitious than the United Nations Sales Convention (CISG). They also needed to be, being designed for all commercial contracts - including many more relational contracts. This imparts a somewhat different 'vibe' to UPICC, creating one impediment to the proposal for a UN Declaration urging interpretation of CISG in light of UPICC. As a formal reasoning based legal system, particularly in contract law, Australia also still struggles with such soft law initiatives. More promising will be law reform clarifying that courts, not just arbitrators in proceedings with the seat in Australia governed by the UNCITRAL Model Law on International Commercial Arbitration, are free to apply 'rules of law' - including UPICC - as the governing law. Elevating UPICC into a Model Law for International Commercial Contracts would also be useful. Australia could then adopt or adapt provisions as the basis for more comprehensive reform of its contract law. This would better mesh with burgeoning relational transactions, and many norms (such as good faith) could also extend to domestic dealings.
Revelation and Reaction: The Struggle to Shape American Arbitration
Thomas Stipanowich
Abstract:
In this article, Professor Stipanowich explores recent decisions by the U.S. Supreme Court and the implications for the respective domains of courts of law and arbitration tribunals regarding so-called “gateway” determinations surrounding the enforcement of arbitration agreements and the contracts of which they are a part. The decisions address the complex interplay between federal substantive law focusing on questions of arbitrability, a body of law defined and expanded by the Court under the Federal Arbitration Act (FAA), and the law of the states and bring into play competing judicial philosophies of contractual assent and contrasting views about the balance between policies promoting the autonomy of contracting parties and judicial policing of overreaching in the context of contracts of adhesion.
According to Prof. Stipanowich, the Court’s current jurisprudence, which may be seen as establishing and expanding a “second tier” of the “revealed” substantive law of arbitrability under the FAA first given shape and substance in the 1980s, is a flashpoint for special concerns associated with standardized contracts directing consumers and employees to arbitrate. Prof. Stipanowich believes that this will inevitably add momentum to current efforts to enact national legislation outlawing pre-dispute arbitration agreements in consumer, employment and other classes of contracts, with possible negative consequences for business-to-business arbitration.
In part I of his article, Prof. Stipanowich offers a short history of the evolution of Supreme Court decisions concerning the “revelation” and expansion of federal substantive law under the Federal Arbitration Act (FAA). Parts II and III then discuss recent Supreme Court cases reflecting the Court’s continuing reliance on the wellspring of divined federal law as a basis for promoting party autonomy in arbitration while limiting lower courts’ ability to police such agreements. Part IV briefly explores the dynamic political response to the extreme, non-nuanced pro-arbitration position developed in modern Court jurisprudence. Finally, Prof. Stipanowich concludes the article by calling for carefully crafted legislation or administrative regulations limiting the use of arbitration agreements in adhesion contracts or establishing due process standards for such agreements.
Disputes Related to Healthcare Across National Boundaries: The Potential for Arbitration
Amar Gupta Sr. , Deth Sao and David A. Gantz
Abstract:
Trade in international health services has the potential to play a leading role in the global economy, but its rapid growth is impeded by legal barriers. Advances in technology and cross-border movement of people and health services create legal ambiguities and uncertainties for businesses and consumers involved in transnational medical malpractice disputes. Existing legal protections and remedies afforded by traditional judicial frameworks are unable to resolve the following challenges: (1) assertion of personal jurisdiction; (2) choice of forum and law considerations; (3) appropriate theories of liability for injuries and damages arising from innovations in medical care and delivery of health services; and (4) enforcement of foreign judgments. Such legal uncertainties and ambiguities call for a uniform means of redress that is more flexible and predictable than litigation in a court room. Given such needs, arbitration offers a potential solution, as it is a private streamlined adjudication process that has been successfully utilized on an international level to resolve several of the above mentioned legal quandaries. The voluntary, flexible, and legally binding nature of arbitration agreements across jurisdictions makes this form of dispute resolution more efficient and adaptive to changes in the health services industry than litigation. With careful construction of an approach that accounts for arbitration costs, reasonable recovery amounts, and complementary mechanisms such as no-fault compensation, international arbitration of medical malpractice disputes will reallocate the legal risks borne by businesses and consumers more fairly and efficiently.
Relationship Between FDI Inflows and Bilateral Investment Treaties/International Investment Treaties in Developing Economies: An Empirical Analysis
Aishwarya Padmanabhan
Bilateral Investment Treaties (BITs) or International Investment Agreements (IIAs) - often perceived as admission tickets to investments - are agreements signed between two countries under which each country binds itself to offer treaty based protection to investments and investors of the other country. This treaty based protection includes not expropriating foreign investment unless there is a public purpose and accompanied by compensation; national treatment; most favoured nation treatment; treating investors and investments in a fair and equitable manner; allowing free repatriation of profits; and providing an investor-state dispute settlement system (also known as investment treaty arbitration) under which foreign investors can directly bring a case at an international arbitral tribunal like the International Convention for the Settlement of Investment Disputes (ICSID) without the consent of their state if the investor feels that the host country violated the BIT or IIA.
Large numbers of BITs/IIAs are being signed with great alacrity by developing countries, like India and other developing countries, in a bid to attract more FDI inflows. The rationale behind signing these treaties is that it is believed by these countries that they will result in increased foreign investment flows into the country.
This paper attempts to see if there is a positive and direct correlation between signing BITs/IIAs and foreign investment inflows in developing countries like India, South American and Asian countries. This hypothesis would be either proved or disproved by the researcher. Data would be collected for this purpose from the Ministry of Trade and Commerce, Foreign Ministry of the respective countries. Further, even after assuming that there is a direct and positive relationship, it would also be studied whether it is prudent for developing economies to be overly-enthusiastic in signing BITs/IIAs given the restriction on policy space accorded to the host nations because majority of BITs/IIAs are structured purely from the perspective of foreign investors, granting them extensive rights without recognizing the right of sovereign states to regulate in the national interest leaving limited manoeuvrability to the host state. This warrants a detailed discussion in order to understand the serious consequences of the investment treaty obligations on host countries. This need has been augmented in light of the increasing number of investor-state treaty disputes and arbitrations at the ICSID and how it has become important for these developing countries to learn lessons and be cautious while negotiating their BITs or IIAs by considering adding adequate safeguards that will allow them to deviate from their treaty obligations in case a situation arises and thus, avoid potential protracted litigations that could cost millions as in the famous CMS v. Argentina case in the 1990s.
Thus, the paper would conclude by not only understanding whether the hypothesis proposed was validated or not, but also provide prescriptive arguments in favour of carefully assessing the impact of BITs on foreign investment inflow before entering into negotiations and signing them by the developing countries and to also adequately reserve its right to regulate foreign investments in the BIT in view of its national interest in light of the preceding case studies in this area.
Has International Law Outgrown Trail Smelter?
Jaye Ellis
Abstract:
The Trail Smelter arbitration, generally considered one of the cornerstones of international environmental law, is an ambiguous and puzzling piece of legal reasoning. The famous dictum in that case appears to stand for a proposition – states are strictly liable for trans-boundary environmental damage arising on their territory – that is not generally accepted in international law. In this paper, the difficulties of reconciling the Trail Smelter arbitration with contemporary international law on environmental protection and on state responsibility are analysed, and recent developments in the field of responsibility and liability for trans-boundary damage are assessed. It is argued that the process of trying to make sense of Trail and seeking to extract lessons from this case can help us to better understand international environmental law – and in particular the difficulties that this body of law poses to the framework of international law.
Book Review: Shari’a Law in Commercial and Banking Arbitration
Tony Cole
Book Review of Abdulrahman Yahya Baamir's, 'Shari’a Law in Commercial and Banking Arbitration' (Ashgate 201'7.
Business and Human Rights: The Search for Effective Remedies
Willem van Genugten
Abstract:
Are John Ruggie’s Guiding Principles going far enough? Maybe yes, from the perspective of States, but for sure no from the perspective of human rights NGOs, and in between from the perspective of the present paper. It shortly discusses some core notions and shortcomings: 1) Let States share their responsibilities with the civil society, without ‘privatizing these responsibilities away.’ 2) Keep using and further developing other means of pressure upon companies, alongside the legal ones; ask States to further frame the context and the space for self-regulation; keep pressuring upon further detailing international obligations, including ongoing specifications of the concept of extraterritoriality. 3) Keep reading promises by companies into contracts. 4) Keep emphasizing that treaty bodies and Courts have to go after the real perpetrators and should not be ‘captured’ and hindered by the traditional international law paradigm. 5) Keep looking at the reliability of national legal systems and the need to have backups, preferably by other national systems or, if appropriate and needed, international ones. 6) Keep looking at practical problems such as costs, the absence of (para)legal representation, the non-accessibility of legal language. 7) Keep using ‘in between means’ such as round tables, mediation and arbitration. Emphasis upon prevention and being proactive if possible, while using proportional, low cost means first, with hard legal means as last resort. Finally, 8) Keep emphasizing the need of human rights impact assessments, in order to work evidence based. Human rights discourses are sometimes driven by morality and ideals, but the best approaches match with empirical findings.
Drawing the Right Lessons from ICSID Jurisprudence on the Doctrine of Necessity
Amin George Forji
Abstract:
Bilateral investment treaties (BITs) and the International Centre for the Settlement of Investment Disputes (ICSID) have over the years injected an important dynamic into public international law, that is, the replacement of a political remedy (peaceful cooperation amongst nations) by a legal one (settlement of investment disputes). The institution of ICSID and the revision of BITs in line with its rules have opened the way for direct investors’ claims and investor-state arbitration. The obvious implication of a compulsory arbitration provision is that it has made up for many shortcomings of the diplomatic protection mechanism with, “the potential for an individual investor, with or without the approval of its home government, to press a conflict that may ultimately have diplomatic implications and may affect relations between the two countries concerned”. It is however still debated whether such a mechanism guarantees fairness and equity for both investors and host states, or merely advantages one BIT signatory to the detriment of the other. Argentina has had more cases before the ICSID tribunals than any other country. Faced with an economic crisis in 2001–2002, it ran into conflict with foreign investors when it repealed the Convertibility Law on which most of its BITs had been negotiated. Could that action be justified as one taken in times of peril and in dire need, as sanctioned by international law, or was it just an outright breach of Argentina’s own contractual commitments?
Foreign Investment and Measures Adopted on Grounds of Necessity: Towards a Common Understanding
Tarcisio Gazzini
Abstract:
During the grave economic crisis that hit Argentina between 1999 and 2001, the Argentine government adopted a series of drastic measures which adversely and substantially affected inter alia foreign investment. These measures generated a stream of claims by foreign investors concerning alleged violations of obligations stemming from bilateral investment treaties (BITs). The paper discusses how ICSID tribunals have dealt with these necessity pleas with a view to identifying common patterns and divergences on the main substantive and procedural issues. It focuses first on the legal nature of Article XI and Article 25 of the Draft Articles on State Responsibility prepared by the United Nations International Law Commission (hereinafter Draft Article 25) as expression of customary international law, as well as their co-ordination. It also briefly discusses the alleged self-judging character of Article XI and then examines and compares the conditions that need to be satisfied in order to adopt measures on grounds of necessity under Article XI and customary international law.
Lok Adalat – A Strategic Forum for Speedy and Equitable Justice
Vijaykumar Shrikrushna Chowbe and Priya Dhanokar
Abstract:
Lok-Adalat has symbolized a human sensitive forum to provide amicable, speedy, cheap justice by adopting informal procedure and avoiding technicalities. Present article has attempted the history and development of Lok-Adalat in India. An analysis has been made on potential utility of Lok-Adalat as one of the ADR tools. An exploration has been made about the validity of the award of Lok-Adalat and grounds that keep it open to challenge for its judicial review. At the end, SWAT analysis of Lok-Adalat has been made and its probable solution in the form of Permanent Lok-Adalat has been discussed.
Present article, thus provide a deep insight of Lok-Adalat and its potential utility to the existing legal system which has been overburdened with pending litigations. Concluding remarks are self-explanatory demanding the adaptations of concept of Lok-Adalat to suit the changing need of poor and needy people. The suitable recommendations have been made to that effect.
Background and Overview of Current Arbitration
Rodrigo Andrés Moscoso Valderrama and Juan Carlos Villalba Cuéllar
Abstract:
Arbitration is the oldest settlement in the history of mankind. Today represents an alternative emotional compared to late payment of state judges and has great benefits in the field of commercial law and international law. This article aims to take a tour through the history of international arbitration in order to clarify the origins of the figure and its current development.
Contracting for State Intervention: The Origins of Sovereign Debt Arbitration
Mark C. Weidemaier
Abstract:
Most models of contracting behavior assume that contract terms are meant to be enforced, whether through legal or relational means. That assumption extends to dispute resolution terms like arbitration clauses. According to theory, contracting parties adopt arbitration clauses because they want to arbitrate disputes and because they believe that a counter-party who has agreed to arbitrate will keep that promise rather than incur the resulting legal or extra-legal sanction.
In this article, I describe how this standard account cannot explain the origins of arbitration clauses in sovereign bond contracts. Drawing on original archival research and secondary sources, the article traces the routine use of arbitration clauses to U.S. dollar diplomacy in the first decades of the 20th century and shows that these early clauses were not designed to facilitate an arbitration between lender and borrower. Instead, the clauses were designed to justify intervention by capital-exporting states on behalf of disappointed citizen-investors and to convince prospective investors that the prospect of such intervention would deter default. These early arbitration clauses, then, were little more than efforts to signify and project power by capital-exporting states. The article traces the evolution of arbitration clauses over the first half of the century and concludes that lenders often hoped (typically in vain) that these clauses would enable them to harness the enforcement capacity of state actors.
Preliminary Effects of the Japanese Arbitration Act of 2003 on the Nation’s Arbitration System and the Effectiveness of Including Provisions for Expanded Judicial Review in Japan
Anthony P. Bertero
Abstract:
Japan is the second largest economy in the world and is home to some of the largest international companies in existence, yet it is rarely chosen as the forum for arbitration proceedings under modern international commercial contracts. Foreign companies may avoid arbitration under the Japanese Commercial Arbitration Association because of the historical power maintained by arbitrators who have, until the Arbitration Act of 2003, had judicially recognized power above and beyond those found in the UNCITRAL Model Law and United States arbitration systems.
Presumption Meets Reality: An Exploration of the Confidentiality Obligation in International Commercial Arbitration
Alexis Brown Stokes
Abstract:
Much has been written about the duty of confidentiality in international commercial arbitration. Most scholars and practitioners agree that a presumption of confidentiality - whether implied or explicit - exists between the parties to an international commercial arbitration. However, there is a disconnect between that presumption and the frequent realities of disclosure and publicity imposed by courts, arbitrators, and sometimes even the parties themselves. Despite the English Court of Appeal's 1997 decision in Ali Shipping v. Shipyard 'Trogir', which signaled a revived movement toward a judicially enforceable duty of confidentiality, the question of confidentiality in international arbitral proceedings is far from settled. Thus, through a comprehensive survey of relevant common law, statutory law, institutional rules, contract theory, and scholarly commentary, this article attempts to fill in the gaps between presumption and reality by shedding light on the current meaning of confidentiality in international commercial arbitration.
U.S. Anti-suit Injunctions in Support of International Arbitration: Five Questions American Courts Ask
Chetan Phull
Abstract:
International arbitration is an increasingly popular dispute resolution mechanism, however, the threat of foreign court intervention unremittingly remains. It is therefore important for a party seeking to enforce an arbitration agreement to know which jurisdictions are most amenable to protecting arbitration agreements, and what courts in these jurisdictions consider material in deciding whether to issue an anti-suit injunction (ASI) against the party seeking to sidestep arbitration through a foreign court order. In the United States, courts in certain jurisdictions in particular have shown a willingness to protect arbitration agreements through ASIs, in the presence of certain factors. The author has uncovered five fact-specific questions from the case law produced by these courts that are material to the courts’ issuance of ASIs. In the abstract, the questions consider: actual refusal to arbitrate and parallel foreign litigation; recognition and enforcement of an arbitration award enjoined by a “competent authority” under the New York Convention; the res judicata effect of U.S. judgments; the strong public policy in favor of arbitration; and bad faith by the party seeking to hinder arbitration. The additional element of whether an ASI to enforce an arbitration agreement is requested
Christopher R. Drahozal and Peter B. Rutledge
Abstract:
This paper examines both the theoretical underpinnings and empirical picture of procedural contracts. Procedural contracts may be understood as contracts in which parties regulate not merely their commercial relations but also the procedures by which disputes over those relations will be resolved. Those procedural contracts regulate not simply the forum in which disputes will be resolved (arbitration vs litigation) but also the applicable procedural framework (discovery, class action waivers, remedies limitations, etc.). At a theoretical level, this paper explores both the limits on parties' ability to regulate procedure by contract (at issue in the Supreme Court's recent Rent-A-Center decision) and the scope of an arbitrator's ability to fill gaps in parties' procedural contracts (at issue in the Supreme Court's recent Stolt-Nielsen decision). At an empirical level, this paper taps a largely unexplored database of credit card contracts available at the Federal Reserve in order to examine actual practices in the use of procedural contracts.
Claim-Suppressing Arbitration: The New Rules
David S. Schwartz
Abstract:
Binding, pre-dispute arbitration imposed on the weaker party in an adhesion contract so-called "mandatory arbitration" should be recognized for what it truly is: claim-suppressing arbitration. Arguments that such arbitration processes promote access to dispute resolution have been refuted and should not continue to be made without credible empirical support. Drafters of such arbitration clauses are motivated to reduce their liability exposure and, in particular, to eliminate class claims against themselves. Claim-suppressing arbitration, furthermore, violates two fundamental principles of due process: It allows one party to the dispute to make the disputing rules; and it gives the adjudicative role to a decision maker with a financial stake in the outcome of key jurisdictional decisions "that is to say, arbitrators have authority to decide their own power to decide the merits, a question in which they have a financial stake. The Supreme Court has facilitated this doctrine through a series of poorly-reasoned and incoherent decisions, in which the Court's liberal wing has been particularly inept at seeing the stakes for consumer and employee plaintiffs. Exploiting Justice Breyer's incoherent line of majority opinions attempting to identify "gateway" issues, the conservative Court majority has recently insulated all questions of enforceability of arbitration clauses from judicial review and is on the verge of allowing corporate defendants to immunize themselves from class actions through use of arbitration clauses.
Are Arbitrators Above the Law? The 'Manifest Disregard of the Law' Standard
Michael H. LeRoy
Abstract:
Arbitration is supposed to be final and binding. But federal and state laws, and judicial doctrines, allow courts to vacate arbitrator awards. This study contemplates the role of courts when they review awards that “manifestly disregard the law” - a term that means the arbitrator knew the law but chose to ignore it. Given the norm of arbitral finality, should courts vacate these rulings?
Hall Street Associates v. Mattel, Inc., 552 U.S. 576 (2008), failed to answer this question. The parties asked a court to review their award for errors of law. This standard is not in the Federal Arbitration Act (FAA). Hall Street ruled that courts cannot review awards beyond the FAA’s express terms. The parties’ standard prompted Hall Street to ask whether courts may apply “manifest disregard of the law,” even though it is not in the FAA. Inscrutably, Hall Street answered: “Maybe the term ‘manifest disregard’ was meant to name a new ground for review, but maybe it merely referred to the [FAA’s] § 10 grounds collectively, rather than adding to them.”
I analyze “manifest disregard” by using historical and empirical methods. Common law courts vacated awards for “fraud,” “corruption,” “partiality,” or if arbitrators “exceeded powers.” The FAA enumerates these as grounds to vacate awards. In the same sequence with these terms, nineteenth century courts vacated awards for “manifest mistake” or “palpable mistake” of the law. I contend that Congress inadvertently omitted “manifest disregard” from the FAA. To answer Hall Street’s equivocation: “Manifest disregard of the law” is part of the FAA.
This sets the stage for my empirical question: Has Hall Street led courts to confirm more awards, thus promoting finality? The answer is yes. In 46.4% of federal cases and 21.8% of state cases, parties in my database argued that an award manifestly disregarded the law. Still, state appellate courts confirmed more employment awards after Hall Street was decided on March 3, 2008 - 88.9% (16/18), compared to 70.9% (73/103) from 1975 until Hall Street. Federal district courts confirmed 93.7% of awards (164/175) before Hall Street, and 90.9% (30/33) after. Federal appeals courts confirmed awards at a high rate before and after Hall Street (87.8% and 85.7%).
Unfortunately, Hall Street’s muddled analysis has split federal circuits. The Fifth and Eleventh Circuits ruled that Hall Street ended “manifest disregard,” but the Second, Sixth, and Ninth Circuits still treat it as part of the FAA. The First, Third, Fourth, and Tenth Circuits avoided ruling on the standard. In addition, state courts have differed in their reactions to Hall Street.
This fractured approach implies that the Supreme Court may reconsider its vague treatment of “manifest disregard.” The Court should affirm this standard. My findings show that review for “manifest disregard” does not erode finality. The standard translates to nanoscale review of awards. As one court put it: “There is...a way to understand ‘manifest disregard of the law’ that preserves the established relation between court and arbitrator...It is this: an arbitrator may not direct the parties to violate the law.” Judges have applied this concept for two centuries to ensure that private tribunals conform to the laws. This rationale is particularly relevant because so much arbitration has changed from a voluntary to mandatory process. Judicial review must be allowed to correct an arbitrator’s intentional flouting of the law. If “manifest disregard” is eliminated, arbitral finality will rise above the crowning principle of the American constitutional system: “No man in this country is so high that he is above the law.” (U.S. v. Lee, 106 U.S. 196, 220 (1882)).
Shifting the Paradigm of the Debate: A Proposal to Eliminate At-Will Employment and Implement a 'Mandatory Arbitration Act'
Zev J. Eigen , Nicholas Menillo and David Sherwyn
Abstract:
This article recasts the debate over mandatory arbitration of employment disputes as a discussion of the need to overhaul some critical elements of the way in which workplace rights disputes are adjudicated. Efforts to overhaul the system such as the Arbitration Fairness Act perpetuate the status quo of unjust cost-driven exploitation by law-breaking employers and employees alike. The authors provide an alternative two-part solution. First, we propose a "Mandatory Arbitration Act" that attempts to remedy legitimate problems like forum privacy that increase bad employers' abilities to hide from the law, while retaining significant benefits of pre-dispute arbitration like flexibility, speed, and reduced costs which augment access to justice for low wage earners. Second, we propose that employees engaged in interstate commerce can be terminated only if there is cause for the termination or severance pay given in lieu thereof. The article outlines a new employment standard that will provide employees with protection, allow employers to operate with greater certainty, and restore creditability and accountability to discrimination law.
The Limits of Procedural Private Ordering
Jaime Dodge
Abstract:
Civil procedure is traditionally conceived of as a body of publicly-set rules, with limited carve-outs – most commonly, forum selection and choice of law provisions. I argue that these terms are mere instantiations of a broader, unified phenomenon of procedural private ordering, in which civil procedure is no longer irrevocably defined by law, but instead is a mere default that can be waived or modified by contract. Parties are no longer merely selecting between publicly-created procedural regimes but customizing the rules of procedure to be applied by the court – from statutes of limitations, discovery obligations and the admissibility of evidence, to burdens of proof, available remedies and standard of review – before a dispute arises. The resulting conversion of procedural rules from publicly-created guarantors of procedural justice to privately-bargained commodities fundamentally alters our system of civil procedure.
But the impact transcends civil procedure, as the existing doctrine allows parties to use procedural terms not only to reinforce their substantive obligations under contract or statutory default rules, but to circumvent limits on the alienability of non-waivable rights – reducing even those substantive laws designated as mandatory to a mere set of default rules.
I argue that while procedural contracting can often enhance both private and social welfare, we should not permit its use as a mechanism for contracting around existing limits on private ordering. The Article concludes by exploring the viability of a symmetrical approach, whereby any applicable limitations upon the substance of a contract are applied with equal force both to substantive terms and procedural terms. Likewise, this approach denies enforcement to procedural contracts seeking to modify elements of procedure that have been removed from the ambit of modification via stipulation during the litigation process, creating symmetry between pre- and post-dispute contracts.
The degree of procedural alteration permitted is thus a function of the contracting parties’ right to modify or waive the underlying substantive right that gives rise to the claim at issue; the procedural contract is then treated as an ex post stipulation, for purposes of determining the judicial enforceability of the particular modification. In this way, the symmetrical approach permits procedural contracting to further the parties’ legitimate ends, while preventing its use as a method for circumventing limitations on private ordering.
Iura Novit Curia and Due Process
Julian Lew
Abstract:
A recent survey of 817 international commercial arbitrations revealed that ninety one different laws or systems where applicable in those cases. The choice of applicable law is of great importance in international arbitration but in most cases the question of "which law applies?" is resolved by the parties express choice of law. By contrast the process by which the arbitrator ascertains sufficient knowledge of the content of that applicable law is rarely considered. This article explains the different ways in which an arbitrator may learn the rules of law that it must apply to the specific issues that arise before the Tribunal. Approaches to this issue differ in national courts both within common law and within civil law legal systems, with some adopting the principle of iure novit curia - the court knows the law - and others relying on the parties to plead and prove the law to the court. In international arbitration there is no uniform practice applied to this issue. This paper suggests that in international arbitration neither approach to the content of laws question prevails. Subject to due process requirements and in absence of agreement of the parties, arbitrators are free to develop procedures appropriate to the needs of the specific arbitration.
Afterthoughts: International Commercial Contracts and Arbitration
Luke R. Nottage
Abstract:
This article mainly responds to Professor Bonell’s three proposals to expand usage of the UNIDROIT Principles of International Commercial Contracts (UPICC). As UPICC are primarily opt-in rules, they can be more ambitious than the United Nations Sales Convention (CISG). They also needed to be, being designed for all commercial contracts - including many more relational contracts. This imparts a somewhat different 'vibe' to UPICC, creating one impediment to the proposal for a UN Declaration urging interpretation of CISG in light of UPICC. As a formal reasoning based legal system, particularly in contract law, Australia also still struggles with such soft law initiatives. More promising will be law reform clarifying that courts, not just arbitrators in proceedings with the seat in Australia governed by the UNCITRAL Model Law on International Commercial Arbitration, are free to apply 'rules of law' - including UPICC - as the governing law. Elevating UPICC into a Model Law for International Commercial Contracts would also be useful. Australia could then adopt or adapt provisions as the basis for more comprehensive reform of its contract law. This would better mesh with burgeoning relational transactions, and many norms (such as good faith) could also extend to domestic dealings.
Revelation and Reaction: The Struggle to Shape American Arbitration
Thomas Stipanowich
Abstract:
In this article, Professor Stipanowich explores recent decisions by the U.S. Supreme Court and the implications for the respective domains of courts of law and arbitration tribunals regarding so-called “gateway” determinations surrounding the enforcement of arbitration agreements and the contracts of which they are a part. The decisions address the complex interplay between federal substantive law focusing on questions of arbitrability, a body of law defined and expanded by the Court under the Federal Arbitration Act (FAA), and the law of the states and bring into play competing judicial philosophies of contractual assent and contrasting views about the balance between policies promoting the autonomy of contracting parties and judicial policing of overreaching in the context of contracts of adhesion.
According to Prof. Stipanowich, the Court’s current jurisprudence, which may be seen as establishing and expanding a “second tier” of the “revealed” substantive law of arbitrability under the FAA first given shape and substance in the 1980s, is a flashpoint for special concerns associated with standardized contracts directing consumers and employees to arbitrate. Prof. Stipanowich believes that this will inevitably add momentum to current efforts to enact national legislation outlawing pre-dispute arbitration agreements in consumer, employment and other classes of contracts, with possible negative consequences for business-to-business arbitration.
In part I of his article, Prof. Stipanowich offers a short history of the evolution of Supreme Court decisions concerning the “revelation” and expansion of federal substantive law under the Federal Arbitration Act (FAA). Parts II and III then discuss recent Supreme Court cases reflecting the Court’s continuing reliance on the wellspring of divined federal law as a basis for promoting party autonomy in arbitration while limiting lower courts’ ability to police such agreements. Part IV briefly explores the dynamic political response to the extreme, non-nuanced pro-arbitration position developed in modern Court jurisprudence. Finally, Prof. Stipanowich concludes the article by calling for carefully crafted legislation or administrative regulations limiting the use of arbitration agreements in adhesion contracts or establishing due process standards for such agreements.
Disputes Related to Healthcare Across National Boundaries: The Potential for Arbitration
Amar Gupta Sr. , Deth Sao and David A. Gantz
Abstract:
Trade in international health services has the potential to play a leading role in the global economy, but its rapid growth is impeded by legal barriers. Advances in technology and cross-border movement of people and health services create legal ambiguities and uncertainties for businesses and consumers involved in transnational medical malpractice disputes. Existing legal protections and remedies afforded by traditional judicial frameworks are unable to resolve the following challenges: (1) assertion of personal jurisdiction; (2) choice of forum and law considerations; (3) appropriate theories of liability for injuries and damages arising from innovations in medical care and delivery of health services; and (4) enforcement of foreign judgments. Such legal uncertainties and ambiguities call for a uniform means of redress that is more flexible and predictable than litigation in a court room. Given such needs, arbitration offers a potential solution, as it is a private streamlined adjudication process that has been successfully utilized on an international level to resolve several of the above mentioned legal quandaries. The voluntary, flexible, and legally binding nature of arbitration agreements across jurisdictions makes this form of dispute resolution more efficient and adaptive to changes in the health services industry than litigation. With careful construction of an approach that accounts for arbitration costs, reasonable recovery amounts, and complementary mechanisms such as no-fault compensation, international arbitration of medical malpractice disputes will reallocate the legal risks borne by businesses and consumers more fairly and efficiently.
Relationship Between FDI Inflows and Bilateral Investment Treaties/International Investment Treaties in Developing Economies: An Empirical Analysis
Aishwarya Padmanabhan
Bilateral Investment Treaties (BITs) or International Investment Agreements (IIAs) - often perceived as admission tickets to investments - are agreements signed between two countries under which each country binds itself to offer treaty based protection to investments and investors of the other country. This treaty based protection includes not expropriating foreign investment unless there is a public purpose and accompanied by compensation; national treatment; most favoured nation treatment; treating investors and investments in a fair and equitable manner; allowing free repatriation of profits; and providing an investor-state dispute settlement system (also known as investment treaty arbitration) under which foreign investors can directly bring a case at an international arbitral tribunal like the International Convention for the Settlement of Investment Disputes (ICSID) without the consent of their state if the investor feels that the host country violated the BIT or IIA.
Large numbers of BITs/IIAs are being signed with great alacrity by developing countries, like India and other developing countries, in a bid to attract more FDI inflows. The rationale behind signing these treaties is that it is believed by these countries that they will result in increased foreign investment flows into the country.
This paper attempts to see if there is a positive and direct correlation between signing BITs/IIAs and foreign investment inflows in developing countries like India, South American and Asian countries. This hypothesis would be either proved or disproved by the researcher. Data would be collected for this purpose from the Ministry of Trade and Commerce, Foreign Ministry of the respective countries. Further, even after assuming that there is a direct and positive relationship, it would also be studied whether it is prudent for developing economies to be overly-enthusiastic in signing BITs/IIAs given the restriction on policy space accorded to the host nations because majority of BITs/IIAs are structured purely from the perspective of foreign investors, granting them extensive rights without recognizing the right of sovereign states to regulate in the national interest leaving limited manoeuvrability to the host state. This warrants a detailed discussion in order to understand the serious consequences of the investment treaty obligations on host countries. This need has been augmented in light of the increasing number of investor-state treaty disputes and arbitrations at the ICSID and how it has become important for these developing countries to learn lessons and be cautious while negotiating their BITs or IIAs by considering adding adequate safeguards that will allow them to deviate from their treaty obligations in case a situation arises and thus, avoid potential protracted litigations that could cost millions as in the famous CMS v. Argentina case in the 1990s.
Thus, the paper would conclude by not only understanding whether the hypothesis proposed was validated or not, but also provide prescriptive arguments in favour of carefully assessing the impact of BITs on foreign investment inflow before entering into negotiations and signing them by the developing countries and to also adequately reserve its right to regulate foreign investments in the BIT in view of its national interest in light of the preceding case studies in this area.
Has International Law Outgrown Trail Smelter?
Jaye Ellis
Abstract:
The Trail Smelter arbitration, generally considered one of the cornerstones of international environmental law, is an ambiguous and puzzling piece of legal reasoning. The famous dictum in that case appears to stand for a proposition – states are strictly liable for trans-boundary environmental damage arising on their territory – that is not generally accepted in international law. In this paper, the difficulties of reconciling the Trail Smelter arbitration with contemporary international law on environmental protection and on state responsibility are analysed, and recent developments in the field of responsibility and liability for trans-boundary damage are assessed. It is argued that the process of trying to make sense of Trail and seeking to extract lessons from this case can help us to better understand international environmental law – and in particular the difficulties that this body of law poses to the framework of international law.
Book Review: Shari’a Law in Commercial and Banking Arbitration
Tony Cole
Book Review of Abdulrahman Yahya Baamir's, 'Shari’a Law in Commercial and Banking Arbitration' (Ashgate 201'7.
Business and Human Rights: The Search for Effective Remedies
Willem van Genugten
Abstract:
Are John Ruggie’s Guiding Principles going far enough? Maybe yes, from the perspective of States, but for sure no from the perspective of human rights NGOs, and in between from the perspective of the present paper. It shortly discusses some core notions and shortcomings: 1) Let States share their responsibilities with the civil society, without ‘privatizing these responsibilities away.’ 2) Keep using and further developing other means of pressure upon companies, alongside the legal ones; ask States to further frame the context and the space for self-regulation; keep pressuring upon further detailing international obligations, including ongoing specifications of the concept of extraterritoriality. 3) Keep reading promises by companies into contracts. 4) Keep emphasizing that treaty bodies and Courts have to go after the real perpetrators and should not be ‘captured’ and hindered by the traditional international law paradigm. 5) Keep looking at the reliability of national legal systems and the need to have backups, preferably by other national systems or, if appropriate and needed, international ones. 6) Keep looking at practical problems such as costs, the absence of (para)legal representation, the non-accessibility of legal language. 7) Keep using ‘in between means’ such as round tables, mediation and arbitration. Emphasis upon prevention and being proactive if possible, while using proportional, low cost means first, with hard legal means as last resort. Finally, 8) Keep emphasizing the need of human rights impact assessments, in order to work evidence based. Human rights discourses are sometimes driven by morality and ideals, but the best approaches match with empirical findings.
Drawing the Right Lessons from ICSID Jurisprudence on the Doctrine of Necessity
Amin George Forji
Abstract:
Bilateral investment treaties (BITs) and the International Centre for the Settlement of Investment Disputes (ICSID) have over the years injected an important dynamic into public international law, that is, the replacement of a political remedy (peaceful cooperation amongst nations) by a legal one (settlement of investment disputes). The institution of ICSID and the revision of BITs in line with its rules have opened the way for direct investors’ claims and investor-state arbitration. The obvious implication of a compulsory arbitration provision is that it has made up for many shortcomings of the diplomatic protection mechanism with, “the potential for an individual investor, with or without the approval of its home government, to press a conflict that may ultimately have diplomatic implications and may affect relations between the two countries concerned”. It is however still debated whether such a mechanism guarantees fairness and equity for both investors and host states, or merely advantages one BIT signatory to the detriment of the other. Argentina has had more cases before the ICSID tribunals than any other country. Faced with an economic crisis in 2001–2002, it ran into conflict with foreign investors when it repealed the Convertibility Law on which most of its BITs had been negotiated. Could that action be justified as one taken in times of peril and in dire need, as sanctioned by international law, or was it just an outright breach of Argentina’s own contractual commitments?
Foreign Investment and Measures Adopted on Grounds of Necessity: Towards a Common Understanding
Tarcisio Gazzini
Abstract:
During the grave economic crisis that hit Argentina between 1999 and 2001, the Argentine government adopted a series of drastic measures which adversely and substantially affected inter alia foreign investment. These measures generated a stream of claims by foreign investors concerning alleged violations of obligations stemming from bilateral investment treaties (BITs). The paper discusses how ICSID tribunals have dealt with these necessity pleas with a view to identifying common patterns and divergences on the main substantive and procedural issues. It focuses first on the legal nature of Article XI and Article 25 of the Draft Articles on State Responsibility prepared by the United Nations International Law Commission (hereinafter Draft Article 25) as expression of customary international law, as well as their co-ordination. It also briefly discusses the alleged self-judging character of Article XI and then examines and compares the conditions that need to be satisfied in order to adopt measures on grounds of necessity under Article XI and customary international law.
Lok Adalat – A Strategic Forum for Speedy and Equitable Justice
Vijaykumar Shrikrushna Chowbe and Priya Dhanokar
Abstract:
Lok-Adalat has symbolized a human sensitive forum to provide amicable, speedy, cheap justice by adopting informal procedure and avoiding technicalities. Present article has attempted the history and development of Lok-Adalat in India. An analysis has been made on potential utility of Lok-Adalat as one of the ADR tools. An exploration has been made about the validity of the award of Lok-Adalat and grounds that keep it open to challenge for its judicial review. At the end, SWAT analysis of Lok-Adalat has been made and its probable solution in the form of Permanent Lok-Adalat has been discussed.
Present article, thus provide a deep insight of Lok-Adalat and its potential utility to the existing legal system which has been overburdened with pending litigations. Concluding remarks are self-explanatory demanding the adaptations of concept of Lok-Adalat to suit the changing need of poor and needy people. The suitable recommendations have been made to that effect.
Background and Overview of Current Arbitration
Rodrigo Andrés Moscoso Valderrama and Juan Carlos Villalba Cuéllar
Abstract:
Arbitration is the oldest settlement in the history of mankind. Today represents an alternative emotional compared to late payment of state judges and has great benefits in the field of commercial law and international law. This article aims to take a tour through the history of international arbitration in order to clarify the origins of the figure and its current development.
Contracting for State Intervention: The Origins of Sovereign Debt Arbitration
Mark C. Weidemaier
Abstract:
Most models of contracting behavior assume that contract terms are meant to be enforced, whether through legal or relational means. That assumption extends to dispute resolution terms like arbitration clauses. According to theory, contracting parties adopt arbitration clauses because they want to arbitrate disputes and because they believe that a counter-party who has agreed to arbitrate will keep that promise rather than incur the resulting legal or extra-legal sanction.
In this article, I describe how this standard account cannot explain the origins of arbitration clauses in sovereign bond contracts. Drawing on original archival research and secondary sources, the article traces the routine use of arbitration clauses to U.S. dollar diplomacy in the first decades of the 20th century and shows that these early clauses were not designed to facilitate an arbitration between lender and borrower. Instead, the clauses were designed to justify intervention by capital-exporting states on behalf of disappointed citizen-investors and to convince prospective investors that the prospect of such intervention would deter default. These early arbitration clauses, then, were little more than efforts to signify and project power by capital-exporting states. The article traces the evolution of arbitration clauses over the first half of the century and concludes that lenders often hoped (typically in vain) that these clauses would enable them to harness the enforcement capacity of state actors.
Preliminary Effects of the Japanese Arbitration Act of 2003 on the Nation’s Arbitration System and the Effectiveness of Including Provisions for Expanded Judicial Review in Japan
Anthony P. Bertero
Abstract:
Japan is the second largest economy in the world and is home to some of the largest international companies in existence, yet it is rarely chosen as the forum for arbitration proceedings under modern international commercial contracts. Foreign companies may avoid arbitration under the Japanese Commercial Arbitration Association because of the historical power maintained by arbitrators who have, until the Arbitration Act of 2003, had judicially recognized power above and beyond those found in the UNCITRAL Model Law and United States arbitration systems.
Presumption Meets Reality: An Exploration of the Confidentiality Obligation in International Commercial Arbitration
Alexis Brown Stokes
Abstract:
Much has been written about the duty of confidentiality in international commercial arbitration. Most scholars and practitioners agree that a presumption of confidentiality - whether implied or explicit - exists between the parties to an international commercial arbitration. However, there is a disconnect between that presumption and the frequent realities of disclosure and publicity imposed by courts, arbitrators, and sometimes even the parties themselves. Despite the English Court of Appeal's 1997 decision in Ali Shipping v. Shipyard 'Trogir', which signaled a revived movement toward a judicially enforceable duty of confidentiality, the question of confidentiality in international arbitral proceedings is far from settled. Thus, through a comprehensive survey of relevant common law, statutory law, institutional rules, contract theory, and scholarly commentary, this article attempts to fill in the gaps between presumption and reality by shedding light on the current meaning of confidentiality in international commercial arbitration.
U.S. Anti-suit Injunctions in Support of International Arbitration: Five Questions American Courts Ask
Chetan Phull
Abstract:
International arbitration is an increasingly popular dispute resolution mechanism, however, the threat of foreign court intervention unremittingly remains. It is therefore important for a party seeking to enforce an arbitration agreement to know which jurisdictions are most amenable to protecting arbitration agreements, and what courts in these jurisdictions consider material in deciding whether to issue an anti-suit injunction (ASI) against the party seeking to sidestep arbitration through a foreign court order. In the United States, courts in certain jurisdictions in particular have shown a willingness to protect arbitration agreements through ASIs, in the presence of certain factors. The author has uncovered five fact-specific questions from the case law produced by these courts that are material to the courts’ issuance of ASIs. In the abstract, the questions consider: actual refusal to arbitrate and parallel foreign litigation; recognition and enforcement of an arbitration award enjoined by a “competent authority” under the New York Convention; the res judicata effect of U.S. judgments; the strong public policy in favor of arbitration; and bad faith by the party seeking to hinder arbitration. The additional element of whether an ASI to enforce an arbitration agreement is requested
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