Recent Posts

An excellent article in the most recent issue of Arbitration International (Vol. 25, No. 4) discusses the challenges facing all participants in international arbitrations (and indeed all arbitrations) to rein in costs. The article, entitled “Inside Out: A User’s Perspective on Challenges in International Arbitration” is written by Jean-Claude Najar, General Counsel France for General Electric. I take a quote from Mr. Najar’s article as the theme for this Commentary: ” “(A)rbitral tribunals should be assessed on the robustness of their cost-saving procedures. While the parties do exercise a fair amount of control over an arbitral proceeding, arbitrators should play…
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A new federal district court decision from Dallas embraces the position of the U.S. Second and Third Circuit Courts of Appeals that the U.S. Federal Arbitration Act (“FAA”) does not permit non-party subpoenas for pre-hearing document discovery, but only permits such subpoenas if they require the non-party to appear at an arbitration hearing and to bring the documents to the hearing. In those earlier cases, the courts concluded that this result was required by the clear language of FAA Section 7. (The Second Circuit’s decision in the Life Receivables case was discussed in an Arbitration Commentaries posting on January 15,…
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In a practical demonstration of how rigorous are the standards under New York law for compelling a non-signatory to arbitrate under the “estoppel” and “alter ego” doctrines, the Chief Judge of the U.S. District Court in Manhattan has issued a decision denying a motion to compel Deutsche Bank AG (“DB”) to arbitrate before a FINRA panel claims relating to the marketing of Auction Rate Securities (“ARS”). (Oppenheimer & Co. v. Deutsche Bank AG, 2010 U.S. Dist. LEXIS 19655 (S.D.N.Y. Mar. 2, 2010). The case is one of many that arose in the wake of the collapse of the ARS market….
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A judge in the U.S. District Court in Manhattan has vacated a reinsurance arbitration award on grounds of evident partiality of the presiding arbitrator and one party-appointed co-arbitrator. The award was signed by these two arbitrators, with the third arbitrator registering dissent. During the course of the proceedings, the two arbitrators who ultimately signed the award had been appointed to sit together on a second case. Their disclosures about the new appointments failed to mention that parties in the two cases were affiliates, that there was a common witness whose testimony had already been heard and evaluated in the second…
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Adhering to well-settled principles concerning the separability of the arbitration clause, the U.S. Sixth Circuit Court of Appeals reversed an order that had denied a motion to compel arbitration, and held that the lower court improperly relied upon allegations of fraud in the inducement of the entire contract and that there were no sufficient allegations of fraud pertaining specifically to the agreement to arbitrate. The Court also rejected Appellee’s attempt to characterize the dispute as one involving the existence, rather than the validity, of the entire contract, and held that where the position taken is that the signatory to the…
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Readers of these Commentaries will have been exposed recently to Second Circuit decision in January 2010 concerning the powers of an international arbitrator to reconsider and change the outcome under the rubric of correcting “clerical” and “typographical” errors. (T. Co. Metals LLC v. Dempsey Pipe & Supply, Inc., 2010 U.S. App. LEXIS 893 (2d Cir. Jan. 14, 2010)). On the heels of that decision — which sustained the powers of the arbitrator to change the award, as a consequence of the deference due to the arbitrator’s interpretation of the ICDR’s “clerical error” rule — comes a decision of the British…
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