Perhaps because of vacations, there have not been many non-routine published arbitration opinions in the last week; in fact, there was not even enough meat to fill a column on Tuesday. The material today almost exclusively falls within the field of international arbitration, although there is a valuable article on avoiding claims of litigation waiver in the U.S.
In Morgan v. Sundance, Inc., 142 S. Ct. 1708 (2022), SCOTUS held that a court could not impose a rule requiring a showing of prejudice to establish litigation waiver, where that element did not exist in other waiver contexts. The test, therefore, hinges on whether the party seeking to compel arbitration participated “substantially” in the litigation.
An article in the current University of Miami Law Review, Shin, Patel, Comparato, and Maldonado, ARTICLE: Beware of Testing the Waters; Wading into Litigation Could Cost the Company Its Arbitration Right, 77 U. Miami L. Rev. 893 (Summer 2023), available on-line at https://repository.law.miami.edu/umlr/vol77/iss4/4/, discusses Morgan and gives a Circuit-by-Circuit analysis of waiver law. In addition, it provides a set of recommendations for minimizing the risk of forfeiting arbitration rights – the upshot of which is assert the right to arbitration early, frequently, and consistently.
Treaty Arbitration; Scope of Review of Jurisdictional Determination
If international arbitration is a specialty, then Olin Holdings Limited v. State of Libya, 2023 U.S. App. LEXIS 17620 (2nd Cir. July 12, 2023), addresses a niche. An opinion by Judge Kahn, writing for herself and Judges Calabresi and Lohier, addresses the scope of judicial review over an international arbitration panel’s jurisdictional decision.
The case arises out of Olin’s application under the New York Convention to confirm an award for $147,882,000 issued by a panel operating under the ICC rules. The court rejects Libya’s argument that the arbitral panel’s jurisdiction was a question of contract formation, not arbitrability. The opinion highlights that a bilateral investment treaty is a “standing offer to arbitrate disputes covered by the [t]reaty.” (Internal citation omitted; brackets in opinion); an agreement to arbitrate is formed when a party thereto consents to arbitrate in accordance with the treaty’s terms.
The opinion also reconfirms that the invocation of the ICC’s rules, which include a competenz-competenz provision, delegates issues of arbitrability to the arbitral tribunal, unless the Secretary Geneal provides otherwise.
The current issue of the International Bar Association’s Dispute Resolution International contains several useful articles. While the IBA’s website has a paywall, the articles are all available on LEXIS Advance.
Talita Ramphal discusses the conflict between arbitrating parties’ desire for confidentiality and the benefits derived from the publication of arbitral awards. She proposes that institutions publish anonymized decisions, but allow the parties to retain the right to compel confidentiality in their arbitration agreement, Ramphal, Confidentiality in International Commercial Arbitration: A Plea for a (Practical) Balance between Confidentiality and Transparency in the Publication of Awards, 17 DRI 91.
Two articles address the computation of awards, also known as the quantum, in international arbitrations. Smitha Menon discusses what she views as shortcomings in the management of damages evidence, Menon, Inadequate Handing of Damages in International Arbitration, 17 DRI 79. As a result, awards may suffer from “the lack of analysis or improper analysis.” She highlights three causes. First, there are differences in approaches to damage computation and the use of experts in the various jurisdictions from which arbitrators and counsel are drawn. Second, she chides practitioners for not “stepping up” to the challenge of “sufficiently master[ing] and engag[ing] meaningfully with the quantum exercise.” Finally, while recognizing that experts may act as “hired guns,” she places the blame for experts who go “off on their own tangent” on counsel for failing to collaborate with their experts. To those of us who grew up in U.S. commercial litigation, the last two issues were standard parts of our practice.
In the realm of “there’s an app for that,” Gabrielle Nater-Bass, describes an interactive web app prepared by the Task Force on Damages of the International Council for Commercial Arbitration and the American Society for International Law, Nater-Bass, The Damages in International Arbitration (DIA) App, 17 DRI 85. The DIA “provides guidance on the key legal, quantitative and procedural issues related to quantifying damages in international arbitration.” It is available for free on the ICCA webpage. I’m looking forward to getting into it.
Hong Kong International Arbitration Centre and the China International Commercial Court
Mariel Dimsey, the Secretary General of HKIAC, and Dong Long, a Managing Counsel, provide an overview of the CICC and its ties with HKIAC in an article that discusses the “one-stop” tie between the two institutions, Dimsey and Dong, Introduction to the China International Commercial Court and Procedural Innonvations in Aid of Arbitrations in Hong Kong, 17 DRI 55. While the article does not have a broad audience, it is an important history and practicum for those who practice in those venues.
No summary of literature on international arbitration would be complete without a reminder that the ALI has approved the magnum opus¸ Restatement of the U.S. Law of International Commercial and Investor-State Arbitration. It is available and searchable on the LEXIS Advance website and is an invaluable starting point for every question you might have in the field.
Have a good weekend and, if you are under the heat bubble, be safe.
David A. Reif, FCIArb