Mark your calendars! The International Chamber of Commerce (ICC) will host a two-day session on the 2012 ICC Rules of Arbitration in Paris, on October 8-9, 2012. Learning outcomes acquire theoretical and practical knowledge of the main changes in the 2012 ICC Rules of Arbitration on important topics such as Emergency Arbitrator; Case Management and Joinder, Multi-party/Multi-contract Arbitration and Consolidation study the 2012 ICC Rules of Arbitration in small working groups of about 10 participants applying various provisions to mock cases be provided with valuable insights from some of the world’s leading experts in arbitration including persons involved in the drafting of the New ICC Rules of Arbitration Who should attend? Arbitrators, legal practitioners and in-house counsel who already have knowledge in arbitration and wish to know more about the 2012 ICC Rules of Arbitration. Download the flyer here.

We invite you to read Professor Alan Scott Rau’s (pictured right) most recent article entitled “The Errors of Comity: Forum Non Conveniens Returns to the Second Circuit,” American Review of International Arbitration, Forthcoming August 2012, Energy Center Research Paper No. 12-04. Here is the abstract: What a federal court is expected to do when asked to enforce a foreign arbitral award — what constraints the Conventions impose on its normal course of adjudication — is of course a vast question. But there is one small piece of the puzzle that recurs frequently, and which has in particular been troublesome to the Second Circuit.: What remains of the inherent power of a common-law court to defer or dismiss litigation of a Convention case on the grounds that it constitutes an “inconvenient” forum? A decade ago a federal district court in Monde Re, “relying on the doctrine of forum non conveniens,” dismissed a petition to confirm a foreign arbitral award, and the Second Circuit affirmed. The received wisdom ever since has been quite hostile — uniformly to the effect that the obligations imposed by the New York and Panama Conventions make any recourse to the doctrine inappropriate. Despite the fact that the Convention in art. III allows contracting states to continue to use their “rules of procedure” in recognizing or enforcing foreign awards, that is a category of very weak explanatory power: While litigants may have to take local courts as they find them, the one thing art. III cannot be intended to do, is to permit local courts to devise rules that compete with, or undermine, or put up obstacles to, the rules of decision under which the Convention expects them to assess the legitimacy of awards. Now in Monde Re itself the respondent, the state of Ukraine, had not been a signatory to the contract nor did it participate in the arbitration: Its defense —“I was never a party to any agreement to arbitrate”— would indeed constitute an art. V ground for the refusal of recognition and enforcement. The inquiry then becomes, “just how do we go about answering the question?”— or more precisely, “just who is best placed to evaluate whether these ‘grounds’ are present? Or perhaps, “just who is to make the decision?” It is a familiar notion that the grounds for decision, and the identity of the appropriate decisionmaker, are likely to call for entirely distinct inquiries, and it seems plausible to say that the former may be so intertwined with the need to obtain foreign-source evidence, and with the need to assess foreign law, that it may become prudent to defer the decision to a foreign court. But by contrast the Second Circuit’s latest venture into the area, in Figueiredo Ferraz, is astonishing: Here the court deferred the enforcement of a Peruvian award on the basis of the “public interest factors” called for in the usual forum non conveniens analysis — and these “factors” did not refer in any way to any supposed difficulties a U.S. court might face in establishing the identity of the “proper party.” Instead the “public interest” was entirely that of Peru, for Peruvian legislation imposed a limit on what a government agency was permitted to pay annually in satisfaction of a judgment against it. Apparently such “public factors” were closely congruent with considerations of international comity. But none of this even comes close to being an art. V ground for the refusal of recognition and enforcement, and in a Convention case the usual recourse to a court’s “discretion” must be foreclosed: While by its terms the Convention may allow a contracting state to enforce awards even where the canonical art. V grounds are present, it extends no leeway whatever to refuse to do so when they are not. Whether on a motion to confirm a Convention award — or at an earlier stage on a motion to stay litigation or compel arbitration — a doctrine of forum non conveniens must in the structure of our law have only the most marginal presence. Anything more robust would be in considerable tension with the goals of the Convention to increase the currency of awards by limiting challenges and expediting enforcement. But although forum non must play a slender role of only intermittent interest, it has a role nonetheless, whenever a Convention defense is in play and the identity of the appropriate decisionmaker is in doubt. The trick is to preserve the classic virtues of prudence and restraint and economy of means in adjudication, while at the same time managing to respect the structure of the Convention, and being alert to the policies in support of the arbitral process that the Convention seeks to advance. The full text of the article can be downloaded (for free) here.

By Mark Kantor On April 24, the US Consumer Finance Protection Bureau (CFPB) announced that it is commencing its review of mandatory pre-dispute arbitration agreements with respect to consumer finance products and services. See the Bloomberg report of the CFPB announcement here. As readers may know, there has been heated discussion that the US Supreme Court decision in AT&T Mobility LLC v. Concepcion will enable financial institutions to compel consumers to arbitrate disputes under contracts of adhesion, but deny consumers the leverage of class actions – that Concepcion will de facto kill consumer class actions. The legislative authority of the CFPB to ban or limit pre-dispute arbitration agreements between a financial institution and a consumer for a “consumer financial product or service” has sometimes been overlooked in that discussion. Many consumer contracts do not involve consumer financial products or services (e.g., mobile phone contracts and retail sales). However, credit cards, bank accounts, money orders, money transfers, and many other financial services and products encompass a large proportion of consumer contracts typically containing arbitration clauses in the US. Back in 2010, the Dodd-Frank financial reform legislation banned mandatory pre-dispute arbitration agreements for residential mortgages and home equity lines of credit and for certain financial “whistleblower” disputes. In addition, that legislation (i) authorized the SEC, after a review, to limit or prohibit mandatory pre-dispute arbitration agreements with respect to claims against broker-dealers and investment advisors and (ii) authorized the newly created Consumer Finance Protection Bureau, after a review, to limit or prohibit mandatory pre-dispute arbitration agreements with respect to claims with respect to consumer finance products and services (read more here). The announcement by the CFPB triggers the beginning of the consumer finance arbitration review process contemplated by Dodd-Frank. The SEC has not yet formally begun its similar review with respect to broker-dealers and investment advisers (which, unlike the CFPB review of consumer finance transactions, is not limited to transactions with individuals). Mark Kantor is an international arbitrator who teaches courses in International Business Transactions and in International Arbitration as an Adjunct Professor at the Georgetown University Law Center (Recipient, 2006 Fahy Award for Outstanding Adjunct Professor). He is also a Fellow at the Vale Columbia Center for Sustainable International Investment (a joint undertaking of Columbia Law School and the Earth Institute at Columbia University).

Following are this month’s recent developments in international arbitration law published by the International Law Office (free registration is required to view the articles): United States: Arbitrability as a threat to finality of international arbitration awards France: Award annulled due to withdrawn counterclaims introduced by insolvent defendant International: Best practices: the importance of experienced arbitration counsel United Kingdom: War on enforcement or valid arbitration proceedings – who decides? Ecuador: State fails to comply with international arbitral award alleging human rights concerns Kenya: Alternative dispute resolution gains more legal recognition Ukraine: Obtaining security measures in support of arbitral awards Denmark: Tribunal rules on failure to pay security for counterclaim Lebanon: Overview (March 2012) United Kingdom: Mediation blues: agreement to mediate found not binding