Preclusive Effect of Prior Award is Arbitrable Issue

A federal district judge in Indiana last week commendably resisted the temptation to impose a permanent stay of an ICDR arbitration that arguably was brought to reopen and relitigate issues decided in an earlier award that had been confirmed by the District Court and uphed by the US Seventh Circuit Court of Appeals. Citing a decision written by Justice Sonia Sotomayor when she was a federal district judge in Manhattan (North River Ins. Co. v. Allstate Ins. Co., 866 F. Supp. 123 (S.D.N.Y. 1994)), the Court held that the preclusive effect of the prior arbitration award is itself an arbitrable issue. Accordingly a temporary stay of this new arbitration, in a long -running battle between a US multinational and one of its former Moscow office executives, was dissolved and the ICDR arbitration will proceed. Masco Corp. v. Prostyakov, 2010 U.S. Dist. LEXIS 10372 (S.D. Ind. Feb. 5, 2010).