On June 13, 2022, the Supreme Court issued its highly anticipated decision on the issue of whether 28 U.S.C. § 1782 permits district courts to order discovery for use in international commercial arbitration or ad hoc investment arbitration. See ZF Automotive, Inc. v. Luxshare, Ltd., 142 S.Ct. 2078 (2022). In a unanimous opinion authored by Justice Amy Coney Barrett, the Court held that section 1782 does not authorize discovery for use in those two forms of international arbitration because only a governmental or intergovernmental adjudicative body qualifies as a “foreign or international tribunal.”
On August 12, 2021, the Ninth Circuit Court of Appeals decided whether Washington state law reverse-preempts the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”), in which case the state law would bar the enforcement of arbitration clauses in insurance contracts in states with similar anti-arbitration laws. CLMS Management Services LP et al. v. Amwins Brokerage of Georgia LLC et al., –F.4th—, 2021 WL 3557591 (9th Cir. 2021). While the Ninth Circuit agreed with the defendants that state law does not reverse-preempt the Convention, plaintiffs have indicated that they will seek review in the U.S. Supreme Court. Plaintiffs point to a circuit split, since the Second Circuit has previously held that an anti-arbitration provision in Kentucky insurance law trumps the New York Convention. If plaintiffs follow through with their intended petition for certiorari, and if the High Court grants review, the Court’s decision should provide insurance companies clearer guidance with respect to the arbitration clauses in their non-domestic policies, as companies should be able to determine whether they can invoke international arbitration in states that bar arbitration clauses in insurance contracts.
Continue Reading Supreme Court May Be Asked to Decide Whether State Insurance Laws Reverse-Preempt the New York Convention
On March 22, 2021, the U.S. Supreme Court granted certiorari in the case brought by Servotronics Inc., where it challenged the Seventh Circuit’s decision to reject discovery pursuant to 28 U.S.C. § 1782 for use in a private arbitration brought by Rolls-Royce PLC in London. The Supreme Court’s decision should resolve the current circuit split on the question of whether Section 1782 can be used for private international arbitration, which has been an ongoing topic of interest among international arbitration practitioners and scholars. …
Continue Reading SCOTUS Finally Agrees to Address Discovery for Use in Foreign Arbitration
Throughout the coronavirus pandemic, parties to an arbitration agreement and arbitrators have grappled with the issue of the right to a live, in-person arbitration hearing. Is there a due process concern that flows from conducting remote proceedings over one side’s insistence on in-person hearing? For example, parties’ facility with presenting testimony and evidence remotely may be limited, arbitrators’ technical proficiency may be lacking, and they may be uncomfortable with taking evidence remotely. Then there is the difficulty of presenting the case effectively across different time zones and the potential unfair advantage to one party over another caused by requiring one party’s witnesses and evidence to be presented outside normal business hours. In some cases, there may be physical evidence that is difficult to present remotely or the need for a site visit.
Continue Reading Insisting on Live, In-person Arbitration Hearings During The Pandemic
The Singapore International Arbitration Centre (“SIAC”) opened its first office outside of Asia in New York on December 3, 2020. According to SIAC, US parties are consistently among the top foreign users of SIAC and in 2020 alone, over 500 US parties have arbitrated under SIAC’s Rules. According to SIAC’s 2019 Annual Report, U.S. was the fourth top foreign user of SIAC, coming after India, Philippines, and China. As an increasingly popular arbitral institution, not just amongst parties located in Asia but worldwide, SIAC has taken the leap to become a global institution, aiming to have a greater presence in the Americas. In 2020, despite the global pandemic, there have been more than 1,000 cases filed with SIAC, marking a new record for the institution since its establishment in 1991.
Continue Reading The Singapore International Arbitration Center Opens Office in New York
On June 1, 2020 the United States Supreme Court issued a unanimous decision in GE Energy Power Conversion Fr. SAS, Corp. v. Outokumpu Stainless USA, LLC, No. 18-1048, 2020 WL 2814297 (U.S. June 1, 2020), holding that the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) does not conflict with the enforcement of arbitration agreements by non-signatories through domestic equitable estoppel doctrines. …
Continue Reading Supreme Court Opens the Door for Non-Signatories to Enforce Arbitration Agreements, Resolving Circuit Split
As discussed in our previous blog, many foreign companies favor private international arbitration for dispute resolution purposes in order to avoid being haled into a U.S. court and to avoid U.S.-style discovery. That calculus may change if the Supreme Court decides to consider whether a district court has authority to order discovery under 28 U.S.C. § 1782 for use in private commercial arbitration, which would resolve the current split amongst Circuit Courts.
Continue Reading Rolls-Royce Seeks to Resolve Circuit Split on Whether District Courts Can Order Discovery For Use in Private Arbitration
International arbitration is becoming an increasingly relevant forum for the resolution of intellectual property (“IP”) disputes. This should not be a surprise given multi-country licensing of patents, trademarks and trade secrets, as well as broader market forces such as globalization, digitalization, and the Internet. In a global economy, intellectual property rights (“IPRs”) are often a company’s most valuable assets. The ability to exploit, protect and enforce IPRs on a cross-border level is thus critical. As with other types of cross-border disputes, international arbitration provides an attractive forum for the resolution of disputes over IPRs.
Continue Reading The Growing Importance of International Arbitration for Intellectual Property Disputes
The International Council for Commercial Arbitration (ICCA) and the International Bar Association (IBA) have established a Joint Task Force on Data Protection in International Arbitration Proceedings. The task force will develop guidance for arbitration professionals with regard to data protection in arbitration proceedings. This guidance, which is expected to be published for comment later this year or in early 2020, aims provide practical guidance on the potential impact of data protection principles. In particular, it will recommend how information and evidence subject to the European Union’s General Data Protection Regulation (“GDPR”) is to be handled in international arbitration proceedings.
Continue Reading GDPR and International Arbitration at a Crossroad
In order to minimize the risk of litigation arising from investments in the United States, sovereign wealth funds (“SWFs”) should take care to avoid inadvertent or unnecessary waiver of sovereign immunity–before they establish operational or investment management presence in the United States.
SWFs generally benefit from sovereign immunity in the United States under the Foreign Sovereign Immunities Act (“FSIA”). As an agency or instrumentality of foreign state, they are generally entitled to immunity from the jurisdiction of the U.S. courts. However, an SWF may lose or limit its sovereign immunity where the SWF: (1) is involved in “commercial activities” in or affecting the United States; or (2) waives sovereign immunity, either expressly or by implication.
Continue Reading Sovereign Wealth Funds – Preserving Sovereign Immunity
When asked why they choose to resolve their disputes through international arbitration, parties often identify confidentiality as an important factor. While the parties may think their arbitration is confidential, in many cases, the proceeding is merely private. In the context of arbitration, privacy and confidentiality are not necessarily the same. Privacy means that arbitration proceedings are not open to the public, but privacy does not preclude the parties from disclosing the proceedings to third parties. Confidentiality, by contrast, means the parties (and the arbitrators) may not disclose the proceedings to third parties or the public, including evidence, written submissions, arbitral awards, and even the existence of the proceedings and the identities of the parties. Most arbitrations are private, but many arbitrations are not confidential. As the Australian High Court has held, privacy is an essential component of arbitration, but “absolute confidentiality” is not. Whether an arbitration is confidential can depend on the agreement of the parties, the applicable arbitration rules, and law of the forum country.
Continue Reading Privacy And Confidentiality Are Siblings, Not Twins