Is it possible that the Russian government wants to compensate the aviation leasing companies for aircraft and engines that the government expropriated? Continue Reading Remedy for Russian Aircraft Expropriation – FSIA Lawsuit
The Supreme Court Rules That § 1782 Does Not Apply to Private Arbitrations
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.”Continue Reading The Supreme Court Rules That § 1782 Does Not Apply to Private Arbitrations
Supreme Court Set To Resolve Circuit Split Concerning Foreign Arbitration Discovery Rules
On December 10, 2021, the U.S. Supreme Court granted certiorari in two cases to determine whether district courts can compel discovery proceedings in private foreign arbitrations. The two consolidated cases are ZF Automotive US, Inc., et al. v. Luxshare, Ltd. and AlixPartners, LLP, et al. v. The Fund for Protection of Investors’ Rights in Foreign States.
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Supreme Court May Be Asked to Decide Whether State Insurance Laws Reverse-Preempt the New York Convention
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.
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SCOTUS Finally Agrees to Address Discovery for Use in Foreign Arbitration
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.
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Insisting on Live, In-person Arbitration Hearings During The Pandemic
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.
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Supreme Court Opens the Door for Non-Signatories to Enforce Arbitration Agreements, Resolving Circuit Split
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.
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Rolls-Royce Seeks to Resolve Circuit Split on Whether District Courts Can Order Discovery For Use in Private Arbitration
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.
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Major Arbitral Institutions Update Guidance Regarding COVID-19
Since our last update, a little over a month ago, many major arbitral institutions have updated their guidance regarding COVID-19 in light of the continuing impact of the pandemic on ongoing proceedings. Below we have included updated guidance from major arbitral institutions and expanded the chart to include a number of new institutions. Thirteen major arbitral institutions[i] also issued a joint statement regarding “Arbitration and COVID-19.”[ii] The statement encouraged parties and arbitrators to work together to mitigate the effects of COVID‑19 on proceedings while still ensuring fairness.
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The Impact of COVID-19 on International Arbitration Hearings
International arbitration often equals international travel for both counsel, witnesses, and arbitrators. But with the new reality of travel restrictions, “shelter in place” orders, remote work, and restrictions on gathering, in person hearings, especially among persons from different nations, may not be feasible, at least in the short term, and maybe longer.
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Privacy And Confidentiality Are Siblings, Not Twins
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.
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