The Bexar County Dispute Resolution Center (“BCDRC”) awarded our blog contributor Don Philbin with its Distinguished Service Award for 2011. The BCDRC recognized Don Philbin for his community service, particularly in multi-party and public policy disputes. Read more here. Please join us in congratulating Don!

In Rain CII Carbon, LLC v. ConocoPhillips Co. No. 11-30669 (5th Cir. March 9, 2012) ConocoPhillips Company (“Conoco”) appeals the district court’s judgment confirming an arbitration award favorable to Rain CII Carbon, LLC (“Rain”). Since 2005, Conoco and Rain were parties to a long-term supply contract which includes a complex formula for capturing the market price of green coke. The contract provides that if a party believed the formula no longer yielded market price, negotiations could be reopened, and if that failed, a “baseball” arbitration would ensue whereby each party submitted a proposal and the arbitrator selected one. In 2008 Conoco reopened market price negotiations. The parties were unable to reach and agreement and the dispute was submitted to arbitration. In 2011 the arbitrator awarded $17,702,585.33 to Rain and Conoco moved to vacate the award. The district court refused to vacate and Conoco now appeals. Conoco asserts that the arbitrator exceeded his powers in two ways: failing to select only one proposal, per the parties’ baseball arbitration agreement; and failing to render a reasoned award. Failing to select only one proposal. Conoco asserts that the arbitrator used parts of both proposals in his award, rather than selecting only one as required by the contract. However, because the arbitrator removed the two provisions derived from Conoco’s proposed draft award from his final award, identifying them as clerical errors, the Fifth Circuit concluded that Conoco’s argument failed. Failing to render a reasoned award. Conoco disputes that the award was a “reasoned award.” First, the Fifth Circuit stated that according to Fifth Circuit jurisprudence, “a reasoned award is something short of findings and conclusions but more than a simple result.” Then the court outlined decisions from the Eleventh, Sixth and Ninth Circuits. Finally, the court concluded that the eight-page award is more than a simple result. Accordingly, the Fifth Circuit denied vacatur and affirmed the district court’s judgement. Technorati Tags: arbitration, ADR, law

By Michael McIlwrath On March 6, 2012, the New York Times published an Op-Ed article by Prof. Amalia D. Kessler of Stanford Law School criticizing obligatory arbitration for denying access to justice, especially in the context of consumer and employment law disputes. Here in Europe, arbitration generally cannot be made into an obligatory process for many types of disputes as it is in the United States. In Italy, for example (and it’s the same in France and Germany), an employer cannot require its employees to opt out of their right to be heard in court by asking them to submit disputes to arbitration. Interestingly, however, the sentiments Prof. Kessler expresses against arbitration resemble what we hear for opposing another form of out-of-court dispute resolution: mediation. The same constituencies are discussed, and the arguments nearly identical. Some years ago, as a member of the CPR Institute’s European Advisory Committee, I was part of a small group that worked with the European Commission to draft a European ADR Code of Conduct. In our drafting sessions, the voices most against mediation came principally from representatives of employment law and consumer protection groups, as well as bar associations concerned about lawyers losing work via a diminished caseload. Opposition to mediation comes from the many of the same quarters today. In fact, the arguments are so similar that you could replace the word “arbitration” with “mediation” in Prof. Kessler’s article and, with only one or two exceptions, render it fit for publication as an editorial opposing mediation in the legal journal of any European country where the process is being introduced. As a good example, Prof. Kessler’s criticism of “…institutions composed of respected community leaders seeking to persuade disputants to accept an equitable compromise in secret, lawyer-free proceedings and without regard to the formal rule of law,” is exactly what was voiced by Italian lawyers who went on strike several times over the past year. They opposed exactly this form of justice (especially the “lawyer-free” part). Of course, mediation is not arbitration, and a failure in mediation does not deny a party to their day in court (or arbitration, as the case may be). As those of us who believe in the mediation process find ourselves explaining and again, the things that Prof. Kessler identifies as being wrong with arbitration can be seen as advantages of mediation. When the alternative is paying for lawyers, and facing years of delay and uncertainty that many justice systems struggle to provide through the courts, why not let parties have their disputes resolved with the facilitation of respected leaders who persuade them of the value of an equitable compromise in an inexpensive process? Sounds good to me. Technorati Tags: arbitration, ADR, law MICHAEL MCILWRATH is Senior Counsel, Litigation, for the GE Oil & Gas Division in Florence, Italy. His experience in international arbitration includes representing the company in disputes under the rules of various international and regional arbitration institutions and under ad hoc procedures around the world, and in coordinating the activities of outside counsel in domestic court and arbitral proceedings. He has published numerous articles in the fields of international arbitration, mediation, and negotiation, and is co-author, with John Savage, of International Arbitration and Mediation: A Practical Guide (Kluwer Law International). Michael is a member of the European Advisory Committee of CPR, and acted as an industry representative to the European Commission (Justice) in the creation of a European ADR Code of Conduct. He was Chair of the International Mediation Institute (IMI), in 2009. In addition, he was the co-vice chair with mediator Judith Meyer (and chair, Singapore ambassador at large Tommy Koh) of the IMI Independent Standards Committee. He is also a member of the board of directors of the National Center for Science Education, in Oakland, California.

We invite you to check out Professor Thomas J. Stipanowich’s (pictured right) latest article: The Arbitration Fairness Index: Using a Public Rating System to Skirt the Legal Logjam and Promote Fairer and More Effective Arbitration of Employment and Consumer Disputes. The piece is being published in an arbitration symposium issue of the Kansas Law Review, but it is now available for download here. The abstract is as follows: Recent Supreme Court decisions have heightened concerns about the degree of effective judicial oversight of consumer and employment arbitration under binding predispute agreements. Efforts to address such concerns are largely stymied by a political logjam. Because binding arbitration serves as the adjudicative backdrop for many kinds of consumer disputes or employer-employee conflict, the choice of arbitration and the kind of justice available under arbitration agreements may be every bit as important as consumer warranties and other substantive rights and remedies. Yet consumers and employees tend to know very little about arbitration and how it affects their rights and obligations; arbitration programs are an arcane and little-understood domain. This article explores the possibility of skirting the legal logjam through an Arbitration Fairness Index, an independent system to rate and rank consumer and employment arbitration programs. It discusses the major role ratings systems play in society and posits numerous benefits that might come from an Index that enhances understanding and awareness of the use and impact of arbitration programs. It identifies criteria for the development of an effective rating system, considers due process protocols and other standards and studies that might be of relevance to its creation, proposes a template of twenty-four elements as a basis for the Index, and explores issues associated with its implementation. It concludes that although there are significant challenges associated with obtaining the several sources of information that will underpin program ratings, an Arbitration Fairness Index will be a unique and valuable resource that complements and reinforces other current initiatives and raises consciousness of arbitration programs to a new, more appropriate level. Technorati Tags: arbitration, ADR, law