int'l arbitratin outline

8/3/2019 Int'l Arbitratin Outline

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1. Is the dispute subject to arbitration?a. is the subject-matter arbitratable?b. are the claims arbitratable?c. are the parties subject to arbitration?

POLICY:To be efficient but also honor the agreement between the parties and try toget consistent results.

RESOLUTIONOF INTERNATIONAL DISPUTES

Rule: recognition of foreign substantive lawCase: Sung Hwan v. Rite-Aid

NY courts have pJD over foreign courtdecisions even if the cause of axn by theforeign court is NOT recognized in NY providedthat the money judgment satisfies Article 53 orNYs Civil Practice Law Rules. i.e. a foreigncountrys substantive law will still be enforcedin NY.

enforce foreign decision; authority to enforceforeign decision

there is NO federal law to enforce foreignjudgment

this case is NOT about arbitrationthe NYConvention is about enforcing foreignarbitration

this is a non-arbitration arena case

Law: Article 53 CPLR

Scope limited to judgments of foreign states granting or denyingrecovery of a sum of money, other

There are carve outs in 5304 where a foreign jdgmt will NOT berecognized

CPLR has long arm statute to determine if its court has JD to see ifKorean Ct. has jD

May a Court recognize a foreign jdmt?

Does the court of enforcement have jD(jD 1) to determine whether it has jD(jD 2) to decide if it can enforce foreign

Court identified 5 elements forpredicating jD under 302(3):1. D commits tort outside State2. cause of axn arises from act3. the act caused injury to

person/property w/n State4. D expected or should

reasonably have expectedthe act to haveconsequences in the State

5. D derived substantialrevenue from interstate orintl commerce [LaMarca v.

Intl jdmts need treaty to b

enforced. In United Statesthere were NO treaty, it is possible to award foreign jdunder NYs Article 53 or 3


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jdmt? Look under 5305(a) and if no jD,then look under CPLR 302(a)(3).

Is there a K? [If P never interacted withD, there can be no K claim asserted.

But under Sung Hwan v. Rite Aid,remember a tort claim was arbitrated.The jD from enforcing a tort judgmtcomes from CPLR 302.

Rule: forum selection clause; forum nonconveniensCase: M/S Bremen and Unterweser v.Zapata

For promoting global commerce and

maintaining the desired certainty ofcommercial disputes, a party canNOT ignorethe forum selection clause in its K even if it canrecover more in the home state than thenegotiated forum state.

Policy: To eliminate uncertainty.

A situation that is foreseeable at the timeof K-ing may NOT be deemed an inconvenient.

K was about towing from LA to Italy

forum selection clauses are prima facie valid

main points of this case: pro-business

FEDERAL LAWAND TREATYFRAMEWORK

Rule: arbitration clause in K; preemptive lawsuitCase: Moses H. Cone v. Mercury [SCOTUS1983]

BACKGROUND: P[hospital] enter into a K with D[construction company Mercury] which saysthat demand for arbitration should be made

w/n reasonable time and that a demandcanNOT be made after SoL. Additionally allclaims must first be submitted to an architectbefore the matter is appealed to an arbitrator.A conflict arises and instead of going throughthe agreed procedure, the hospitalpreemptively files a law suit seeking adeclaratory judgment that there is NO right to

A forum selection clause canonly be enforced if thesubstantive law of the state that

is being asked to enforced it hasjD to do so i.e. enforcement offorum selection clauseagreement is subject to law ofthe state.

If a forum is inconvenient, itma be unreasonable and

PRE-EMPTIVELAWSUIT

use this towards a tacticaladvantage; seek a declaratory

jdmt that other side has NOclaim

is this an arbitrability issueand/or a suit similar toinducement in the fraud since

the hos ital is tr in to et

Suit 1:a stayinitiallygranted for djis lifted somatter ispending incourt

Suit 2:Mercuryseeks arB,hospital filesand grantedstay pendingsuit 1 [b/csame issue].Mercuryappealing


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arbitrate b/c the time has passed based on theSoL agreed to by the parties. In other words, itis seeking to be indemnified by the courts fromarbitration.

ISSUE: Whether dt. ct. properly stayed axn

that is still pending in st. court for an axn toarbitrate when there is a possibility that thetime for bringing arbitration claim may haveexpired.

HOLDING: No. Federal law from 2 FAA overnsissues in either state or federal court and theact establishes that as a matter of federal law,any doubts concerning scope of arbitrableissues should be resolved in favor ofarbitration.

Policy of Arbitration Act requires liberal

reading of arbitration agreement. Arbitration Act establishes that as a matter offederal law, any doubts concerning scope ofarbitrable issues should be resolved in favor ofarbitration, whether problem at hand isconstruction of K language itself or allegationof waiver, delay, or like defense to arbitrability.

Even when an identical issue in state court ispending, an arbitration agrt will override thejudicial proceeding.

Rule: conflict b/w state and federal law, waiver ofjudicial proceedingCase: Southland Corp. v. Keating [SCOTUS,1983]

BKGD: Appellees are individual franchisees whosigned agrt with clause requiring arB on anycontroversy or claim arising out or relating to theagreement or breach thereof. They file suit inCali st. ct. alleging fraud, misrepresentation,breach, violation of disclosure requirements ofCali Franchise Investement Law (FiL). Southlandfiles motion to arbitrate. Trial court found allcauses of axn EXCEPT FiL arbitrable matter.Southland appeals.

ISSUE: Whether a state law that voids a Kprovision requiring arbitration is superceded by afederal law that enforces arbitration.

WHERETHEREIS CONFLICTBETWEENSTATELAWTHATVOIDSARBITRATIONANDFEDERALLAWTHATPROMOTESARBITRATION (2 FAA) FEDERALWINSUNDERSUPREMACYCLAUSE.


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HOLDING: Yes, the federal law prevails under theSupremacy clause.

Federal law prevails under the SupremacyClause and arbitration is still enforced when aState law bars waiving judicial proceedings even

in a freely negotiated K. FAA 2 is declared a national policy applicableequally in states as well as federal courts.

RATIONALE: Congress has authority underCommerce Clause to create a body of federalsubstantive law (here its the FAA)

Rule: Defenses Against Enforcement ofArbitration Award under UN ConventionNYC, basic notions of moralityCase: Parsons v. RAKTA

Art. V(2)(b) which allows refusal ofenforcement of award if it is contrary to publicpolicy shall be narrowly construed. PUBLICPOLICY DEFENSE

Arbitration enforcement may be denied onlywhen forum states most basic notions ofmorality/justice are violated.

Intl politics is NOT a public policy thatjustifies a refusal to enforce an arbitrationaward.

Art. V(2)(a) authorizes a court to denyenforcement of a foreign arbitral award when

the subject matter of the difference is NOTcapable of settlement by arbitration under thelaw of that forum country, but the mere factthat an issue of national interest mayincidentally figure into the resolution of abreach of k claim does NOT make the disputeNOT arbitratable (i.e. it is still arbitratable).NON-ARBITRABILITY DEFENSE

Art V(1)(b) deny enforcement of an arbitral

award if other party was NOT able to presenthis case, but an inability to produce a witnessb/c witness had a prior teaching commitment isNOT a lack of due process that warrants not-enforcement. DUE PROCESS DEFENSE;Inadequate opportunity to presentdefense

The public policy of the Statethats relevant is the statewhere the enforcement ofaward is being sought.

Just b/c a state is somehowimplicated in a case , itcanNOT be concluded that thstate is vitally interested in


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Article V(1)(c) is ajurisdictional defense.It concerns an agreement to arbitrate orarbitrability. If the subject-matter is NOT w/nthe arbitration agreement, the award does NOThave to be enforced. This defense requires

that the challenging party rebut thepresumption that the arbitral body is actingw/n its powers.

9 U.S.C. 10 nullifies an award if it is inmanifest disregard of law. Do NOT rely onthis case for understanding this doctrine.

ARBITRABILITY SUBJECT MATTER

SCHERKV. ALBERTO-CULVER (1974)

INTERNATIONALCOMMERCIAL DISPUTESHOULD NOTBEDIFFERENTIATEDB/WDOMESTICANDINTL

[compare with Shearson which is for domestic arbitration]

NOT GOODANALYSIS

Issue: IS an American party trying to take advantage of American law thatbrings a cause of axn against a foreign company that perhaps the foreigncompany did NOT know about still precluded from judicial proceedings infavor of arbitration?Holding: Yes.

A provision to arbitrate may be invalid if the issue is that the inclusion ofthe arbitration clause in the contract was the product of fraud or coercion,but a dispute based on allegations of fraud is still arbitrable.

A-C claims that it was defrauded by Scherk in violation of the Sec-Ex Actconcerning the sale of trademarks. A-C wanted to rescind the K, but Srefused so A-C brought suit in court concerning Ss fraudulentrepresentations. S moves to stay the action pending arbitration. TheSCOTUS here held that the arbitration clause is to be respected and enforcedby federal courts under the FAA.

The FAA 2 states that an arbitration agreement shall be valid,irrevocable, and enforceable, save upon such grounds as exist at law or in

equity for the revocation of any contract. The court found that an agrt to arbitrate is a specialized kind of forum-selection clause that posits not only the site for suit but also the procedureto be used in resolving the dispute.

RULE: Courts read this case for the holding that intl agrt to arbitrateshould be enforced, even for anti-trust matters.

RULE: The court enforced arbitration even when domestic law wouldpreclude enforcement [Wilko was still good law at this time].


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RULE: contemplation of arbitrable issue; defense to arbitration raise astatute designed to protect a class; arbitrability on certain agreed issues;statutory counterclaim

POLICY: Court wants to enforce a provision that obviates the danger that a K dispute mightbe submitted to a forum hostile to interests of one of the parties or unfamiliar with theproblem are involved.

POLICY: FAA is designed to allow parties to avoid the costliness and delays of litigation andto place arbitration agreements on same footing as other Ks.

POLICY: SCOTUS does NOT want to demean justice by exalting US law.

MITSUBISHI MOTORS CORPV. SOLER CHRYSLER-PLYMOUTHSCOTUS[1985]bringing up rights under statutory claims, international business

THISCASEISIMPORTANTISBECAUSEITADDRESSESTHEISSUEOFWHATTODOWHENANISSUECOMESUPTHATTHEPARTIESDID NOTEXPLICITLYAGREETOARBITRATEBUT

ARISES UNDERTHEARBITRATIONAGREEMENT.

The arbitration agreement provides for arbitration in foreign country of alldisputes, controversies, or differences which may arise b/w A and B out ofor in relation to Articles 1-5 of Sales Agreement.

o Finding: the court said that the exclusion of some areas ofpossible dispute from the scope of an arbitration clause doesNOT serve to restrict the reach of an otherwise broad clauseinsofar as the allegations underlying the claims touch matterscovered by the enumerated articles {the matter} is properlyresolved in favor of arbitrability.

A brings suit to US court under FAA and NYC to seek an order under FAA4 and 201 to compel arbitration under Article 6 under Sales Agreement inforeign country.

B [does NOT want to go to court] counterclaims in the US court under a USstatute [Sherman Act]

Issue: can an arbitration clause be read to encompass statutoryclaims NOT provided in the arbitration agreement? So what you

have is a party, B, raising a uniquely American defense in American courteven though the parties agreed to arbitrate in foreign country. The issuebecomes should the American courts still enforce the arbitrationagreement even though that defense or charge (here it is a counterclaim)is not a cause of axn under the arbitration agreement.

o B argues that as a matter of law a court canNOT construe an

arbitration agreement to encompass claims arising out of statuesdesigned to protect the class in which B belongs


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o Finding: court does NOT agree with party avoiding arbitration,

B, because it finds NO reason to presume AGAINST arbitration inthe FAA. The court cites 2 of FAA which states that anagreement is valid, irrevocable, and enforceable and MosesCones which states the U.S. policy of favoring arbitration

because its trying to enforce a private contract.o Finding: the court also finds NO reason to NOT enforce an

arbitration agreement even when a party raises claims foundedon statutory rights. By agreeing to arbitrate a statutory claim, aparty does NOt forgo the substantive rights afforded by thestatue; it only submits to their resolution in an arbitral ratherthan judicial forum.

Issue: are anti-trust claims non-arbitrable even though a partyhas agreed to arbitrate them? this was raised as an issue because Bwas suggesting that there is a public policy reason that the anti-trust issueshould be heard by the courts and NOT an arbitration agreement even

though it was agreed that parties arbitrate this issue.o Finding: the court finds that out of concern for international

comity, respect for the capacities of foreign and transnationaltribunals and sensitivity to the need of the internationalcommercial system for predictability in the resolution of disputesrequire ENFORCEMENT of the parties agreement even if the courtassumes a contrary result would be forthcoming in a domesticcontext. This policy was explained in The Breman where theScotus said it is NOT good for trade and commerce to have theparochial view that US laws should dominate. Again the policy isto enforce an agreed contract. The court also analogized to

Scherk v. Alberto-Culverand suggested that the arbitrationagreement is a specialized kind of forum-selection clause wherethe parties had specified in advance the forum in which disputesshall be litigated and the law applied.

FACTS: A sales agrt provides for arbitration by Japan CommercialArbitration ofall disputes arising out certain articles of the agrt.Soler argues that it statutorily benefits from the federal and local antitrustlaws (Sherman Act) though the abC does NOT mention these statute, sothe statute canNOT be read to contemplate arbitration of these statutoryclaims.

Policy: concerns of international comity, respect for the capacities offoreign and transnational tribunals, and sensitivity to the need of the intlcommercial system for predictability in the resolution of disputes allrequire enforcement of the arbitration clause in question even if a contrary

result would be forthcoming in a domestic context. [BREMANDOCTRINE:ENFORCEARBITRATIONFORSAKEOFINTERNATIONALAGRT]


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this case is an interpretation of FAA; if Congress does NOT expressly writethat the subject matter is excluded, then its NOT excludedits a veryliberal reading

SHEARSON/AMERICAN EXPRESSV. MCMAHON[SCOTUS 1987]SUBJECTMATTERARBITRABILITYOFDOMESTICLITIGANTS; STATUTORY & CL CAUSES

OFAXN, OVERLAPBETWEENCIVILANDCRIMINALPROVISIONS

ISSUE: Whether statutory prohibition against waiver of a civil/criminal causeof action can override an agreement to arbitrate.Holding: No. The Duty to enforce arbitration agreement is NOT diminishedwhen a party raises claims founded on statutory rights.

The arbitration agreement with a customer agreement: any controversyarising out of or relating to transaction

B filed complaint against A in US dt. ct for violating US statutory laws

(Exchange Act and RICO). Here the statutory law (sL) declared itself tooverride any condition, stipulation or provision asking person to waivecompliance with sL.

A compels arbitration.o FAA 2 says arbitration shall be valid, irrevocable, and

enforceableo FAA 3 says court must stay proceeding if the issue is arbitrable

o FAA 4 authorizes fed dt. ct. to issue order compelling

arbitration if there has been a failure, neglect, or refusal tocomply with arbitration agreement

o The duty to enforce arbitration is NOT diminished when a party

bound by an agreement raises a claimed founded on statutoryrights {Mitsubishi}

o By agreeing to arbitrate a statutory claim, a party does NOT

forgo the substantive rights afforded by the statute; it onlysubmits to their resolution in an arbitral rather than judicialforum.

There was NO Congressional intent to limit or prohibitwaiver of a judicial forum, it would be deducible fromstatutes text or legislative history or from an inherentconflict b/w arbitration and the statutes underlying

purpose.o FINDING: There is NO irreconcilable conflict between the

arbitration agreement and RICOs underlying purpose. B tried toargue that RICO was too complex but court said that potentialcomplexity should NOT suffice to ward off arbitration.

[Mitsubishi]o FINDING: A conduct that can result in both civil and criminal

liability does NOT mean there is NOT a bona fide civil action.


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RODRIGUEZV. SHEARSON/AMEX [SCOTUS 1989]overrules Wilko; predispute dispute limited to judicial forum

Issue: Whether a federal statute that calls for exclusive jurisdiction in a

specific forum precludes enforcement of arbitration agreement. This isslightly different from Shearson in that in Shearson the issue was over waiverof substantive rights whereas here the issue is restriction on forum.

A signed standard customer agreement with B.

The arbitration agreement read that parties agree to settle anycontroversies relating to the accounts through binding arbitration thatcomplies with specified procedures.

A charged B with violating federal statute. The statute at issue specificallyprovided for jurisdiction in either state or federal courts.

o Finding: 2 of FAA declares it a matter of federal law that

arbitration agreements shall be valid, irrevocable, andenforceable. Under this section, the party opposing arbitrationcarries the burden of showing tht Congress intended in aseparate statute to preclude a waiver of judicial remedies or thatsuch a waiver conflicts with the underlying purposes of that otherstatute.

Rules

Default: According to FAA 2, an issue/dispute (a) must go toARBITRATION.

It is irrelevant if a contract as a whole is being challenged based on statelaw or federal law because FAA preempts. In summary, FAA determines

the issue (x) and enforces separability. A challenge to the VALIDITY of the K as a whole (k), and not specifically the

arbitration clause (ac) must go to the arbitrator. It is important to notethat a VALIDITY is NOT the same thing as EXISTENCE of the contract.

ARBITRABILITY ARETHE PARTIES/CLAIMS SUBJECTTOARBITRATION? issues to know: what happens if a party to the arbitration agreement is a

subsidiary of Y and Y has all the assets can Y be brought to arbitrate?

issues to know: to whom can a party bring a claim?

issues to know: when can/cant a non-signatory be brought? how can youmake a 3rd party subject to arbitration?

General Answer: use traditional principles of CONTRACTLAW such as agency, piercing the corporate veil, estoppel

Definition [Piercing the Corporate Veil]: Piercing the corporate veildescribes a legal decision to treat the rights or duties of a corporation as therights or liabilities of its shareholders or directors. Usually a corporation istreated as a separate legal person, which is solely responsible for the debts it


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incurs and the sole beneficiary of the credit it is owed. Common law countriesusually uphold this principle of separate personhood, but in exceptionalsituations may "pierce" or "lift" the corporate veil. A simple example would bewhere a businessman has left his job as a director and has signed a contract tonot compete with the company he has just left for a period of time. If he set upa company which competed with his former company, technically it would be

the company and not the person competing. But it is likely a court would saythat the new company was just a "sham", a "fraud" or some other phrase, andwould still allow the old company to sue the man for breach of contract. A courtwould look beyond the "legal fiction" to the reality of the situation.

Collins and Aikman v. Building Systems {2nd Circuit,1995}

leading case on how to determine scope of arbitration arbitrability ofclaims

ISSUE: Whether a claim/allegation that pleads conduct that arises out of or is

related to a K with an arbitration clause is arbitrable even when the conductarises out of another K. In other words, what is the scope of the arbitrationclause?

A and B sign a K1 with arbitration agreement. Later they sign K2(confidentiality agreement) that does NOT have an arbitration agreementNOR does it refer to K1. After K2 terminated in accordance with its ownterms, A gave proper notice to terminate K1 and so it was terminated.Later, B seeks arbitration and claims K2 was a ruse. Other claims of axninclude:

o Fraud in obtain information through K2

o Fraud in the inducement of K2

Analysis:

2 FAA: a written provision arising out of K is valid, irrevocable, andenforceable

Moses Cone: any doubt concerning the scope of arbitrable issue should beresolved in favor of arbitration.

is the arbitration clause broad or narrow? TEST

o Arising out of/relating to is BROAD the presumption is that

the claims are arbitrable.

Finding: the claims even though they are pleaded throughK2 are related to K1

Approach: Look at the conduct/allegation of the action,NOT the label of the legal cause of action. If the allegationsthat are made touch matter then they are arbitrable.

In determining whether a particular claim falls within thescope of the parties arbitration agreement, the court


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focuses on the allegation in the complaint rather than thelegal causes of actions asserted

Note: It is NOT clear what touch means so this can be anargument in defense of NOT arbitrating.

o Claims may be bifurcated even if they arise from the same set of

facts.

THOMSON-CSF V. AMERICAN ARBITRATION ASSOCIATION[2ND CIRCUIT,1995]

parent/subsidiary assuming obligation, agency, NONSIGNATORY [leadingcase]

Issue: Whether a nonsignatory party that has absorbed a signatory partythat was bound to arbitrate is now also bound to arbitration.HOLDING: despite ordinary principles of K and agency law, the new parentcompany did NOT voluntarily submit to arbitrate its disputes and therefore is

NOT subject to arbitration.

A enters into agreement w/ B in which B agrees to only supply equipmentto A. A was bought by another company, C, who sold it to D. Now A is adivision of D. B told D of agrt that D MUST buy from B based on Bsoriginal contract with A. D refused to acknowledge agrt b/w A and didNOT consider itself bound.

o To summarize: a SIGNATORY party is trying to compel

arbitration of a NONSIGNATORY since the NONSIGNATORY is nowthe parent of the OTHER SIGNATORY to the original agreement.

Arbitration agreement said all disputes b/w theparties to theagreement; parties includes affiliates

Rule: a nonsignatory may NOT be bound to arbitrate except as dictatedby some accepted theory under agency or contract law (incorporation byreference, assumption, agency, veil piercing, estoppel)

JLM V. STOLT-NIELSEN[2ND CIRCUIT, 2004]non-signatory compelling signatory, arbitrability of adhesion K, scope of

arbitration agreement

arbitration agreement says any and all differences of whatsoeverarising out of this Charter shall be put to arbitration in NYC or London.

Issue: Does the arbitration clause cover claims under the ShermanAct? [scope]Holding: Any and all is a broad arbitration agreement and thereforecollateral clauses are arbitrable.o Inquiry: does the dispute arise beyond core issues?


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o The court here found that the Sherman Act claims are w/n

the collateral matters encompassed by the broad arbitration clause.

Issue: Whether a non-signatory parent or subsidiary company of asignatory company is covered by an arbitration agreement.

Holding: a non-signatory may compel a signatory to the arbitrationagreement where a careful review of the relationship among theparties, the Ks they signed, and the issues raised - factually specificinquiry are intertwined with the agreement .

TRACERV. NATIONAL ENVIRONMENTAL SERVICES COMPANY[9TH CIRCUIT,1994]

only case that says arising out of is a NARROW clause; dissolvation ofpreliminary injunction

X [Tracer] sues Y [NESC], seeking damages and injunctive relief. X thenmoves for preliminary judgment. X and Y had a licensing agreement andpursuant to the clause, Y moves for arbitration. The dt. ct. grants X thepreliminary injunction AND grants Y the motion to compel arbitration.Arbitrators do NOT find a reason to continue injxn against Y and dismiss theclaim for which the district court granted injxn. Therefore, Y moves to dt. ct.to remove preliminary injxn. Dt.ct. removes injxn BASED ON THEARBITRATORS FINDINGS. So X appeals for the removal arguing that thearbitrators did NOT have jD to dissolve the injunction.

why would x appeal removal of preliminary injxn if arbitrator concluded it

was NOT warranted? ARBITRABILITY!!! the party is arguing that arbitratordid NOT have jD to issue/review/dissolve [preliminary, permanent] injunction.

ANALYSIS: THEISSUEISWHETHER ARBITRATORHASJD TOREVIEW/ISSUE/DISSOLVEINJUNCTION.1. Acknowledgement that FAA requires piecemeal resolution when

necessary to give effect to an arbitration agreement. [Moses Cone]2. Determination whether the arbitration agreement is broad/narrow.

a. Here the arbitration agreement reads: in the event of anycontroversy or claim arising out ofthis agreement suchcontroversy shall be settled by arbitration.

b. Precedent is that arising under is a narrow clause. Arisingunder is the same as arising out of. Therefore, this too is anarrow arbitration agreement.

3. Determination whether this a claim that arises under this contract.a. The contention/claim against the party here it is trade secret

does NOT relate to the interpretation or performance of thecontract.


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b. The claim here is actually a tort claim. It is NOT determinative thatbut for this licensing agreement, there would be NO tort claim.

c. Therefore this is an independent wrong from the breach of thelicensing agreement. Therefore, this cause of axn does NOT requirethe interpretation of a contract and therefore it is NOT arbitrable.

d. Therefore, arbitrator did NOT have jD to dissolve the injxn becausethe injunction arises out of a right, a right which is NOT arbitrable.

TEST [ATLEASTTHISCOURTSTESTONWHETHERAMATTERISARBITRABLEORNOT]:1. is the issue broad or narrow?2. does the issue involve an interpretation of the contractual relationship

b/w the parties? This inquiry asks whether the matter occurred but forthe contract.

LITIGATION STRATEGY:Whether party goes to arbitration or not, can still at least ask for preliminary

injunction.

LITIGATION STRATEGY:When a party seeks injxn or removal of injxn, the issue is whether thismatter is arbitrable.

PREMIUM NAFTAV. FILISHIPPING [HOUSEOF LORDS, 2007]British concept of severability of arbitration agreement from principal

contract; rescinding of K

Issue: Whether a contract may be rescinded because it wasoriginally formed through bribery of an agent who entered into theagreement representing a party?

Holding: No. Under the separability doctrine, the arbitrationagreement is a separate contract from the main K and since theparties had the intention of resolving ALL disputes arising under orrelated to the K, bribery does NOT make the contract voidable.

ARBITRABILITY WHO DECIDES?

Arbitrabiity is (1) the ability to be arbitrated or (2) the state of beingarbitrable

PRIMA PAINTV. FLOODAND CONKLIN [SCOTUS, 1967]doctrine of severability; fraudulent inducement of K; rescission

BACKGROUND:


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Arbitration agreement embodies entire understanding of the parties onthe subject matter. Any controversy or claim arising out of or relatedto settled by arbitration in NYC according to rules of AAA.

F&C serves a notice of intention to arbitrate, so P files suit in Dt. Ct.

seeking rescission to the K b/c of fraudulent inducement.

ANALYSIS:1. FAA 2 says an arbitration award is valid, irrevocable, andenforceable.2. FAA 3 says once court is satisfied that the issue is arbitrable, ifparties agreed to refer matter to arbitration, then court must stayproceedings.3. FAA 4 says federal remedy for failure, neglect, refusal to arbitrateunder written agrt. This sections says that should a party fail toarbitrate it has right under this provision to go to court to order

arbitration.

AWUAH????[2ND CIRCUIT, 2004]arbitrability of adhesion K

Issue: Whether use of a standard form of K which includes anarbitration clause amounts to an adhesion k when the other party hadno choice as to whether to accept the K or NOT.Holding: If the claim is fraud in the inducement of the K, then the

claim is subject to arbitration. If the claim is fraud in the inducementof the arbitration agreement an issue that goes to the making ofthe agreement to arbitrate, the federal courts may proceed toadjudicate it.

Who Decides whether a matter (a) is arbitrable x? Who hasprimary power to decide arbitrability (y)? Did the partiesagree to arbitrate matter (a) (x)?

if parties did NOT agree to submit the question of who decideswhether they agreed on a matter or not, then the court should decide

just as if the court would decide any other question not submitted toarbitration.

As to whether the parties agreed to arbitrate the matter (x) of whodecides (y) whether parties agreed on (a) or not

in deciding whether parties agreed to arbitrate a certain matter (x,xy), courts should generally apply ordinary state-law principles thatgovern the formation of Ks.


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o Court should NOT assume that parties agreed to arbitrate

arbitrability (xy) unless there is clear and unmistakable evidence thatthey did so.

Test: whether a claim ancillary to breach of K is arbitrable:

1. is arbitration clause broad or narrowa. if narrow, a collateral matter will generally be outside itspurviewb. if broad, there is a presumption of arbitrability

PRIMA PAINT:This case introduces the doctrine of severability/separability. It holds that anarbitration agreement is a separate contract based o its interpretation of the2 of FAA.

BUCKEYE CHECKCASHING:

A challenge to the validity of the contract is subject to arbitration.

Here a party alleges that the K has a provision that allows for chargingusurious interest rates. Even though the K allows it, charging usuriousinterest rates is illegal (at least here in Florida). Therefore, P argues that thecontract is void from the beginning, ab initio. SCOTUS says it does NOT matterthat under Florida law, the contract is void or voidable. Under the doctrine ofseverability, the arbitration agreement was made validly regardless ofwhether a certain provision of the contract might render the entire contractvoid. The court says in FN1, that the issue of a contracts validity is differentfrom the issue whether any agreement between the alleged obligor and

oblige was every concluded.

Applying the TEST1. is the arbitration clause broad or narrow?

a. the court finds that the arbitration clause is broad. If it werent,then there would be NO issue of arbitrability.

JLMV. STOLT-NIELSENThe issue ofnon-signatory is for the courts to decide unless the partiesagree to submit this issue to arbitration.

CHOICEOF LAW: STATEV. FEDERAL

State law can trump federal law in cases of arbitration if the partiesagreed to abide by the state law [Volt v. Stanford]. The state law iswhat the parties agreed to, so the state law should be enforced.

But what happens if the state law limits


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INTERIM MEASURES: These are temporary actions taken before final awards. they are needed to

prevent irreparable harm [harm that canNOT be compensated by money].

It is noteworthy that all three sets of rules, AAA, ICC, UNITRAL permit

interim measures. The major inquiries in this section are

o what can should the courts do when a party comes to court to

seek an interim measure?

ANALYSIS: Is this a a NYC case?

If Yes Article V of NYC

If NO FAA 10

IRANV. US [ARBITRATION 1984]

interim measure, specificity, maintenance of status quo

Here the court awarded interim measure to Iran. This allowed Iran to enjoinUS from selling its property. The reasons why interim measures wereawarded is because(1) the property that would be lost would be irreplaceable(2) Iran was very specific about its requests.What the tribunal was trying to do was maintain the status quo before a finalaward is determined.

SPERRYV. GOVERNMENTOF ISRAEL[S.D.N.Y. 1982]interim measure preliminary injunction, differences between what

arbitrator/judiciary can do, refuse enforcement of award, manifest disregard,Foreign Sovereign Immunities Act

BACKGROUND:Israel and Sperry enter into a K to design a communication system. This is alot of money so the transaxn is conducted via a letter of credit. A disputeoccurs, so the tribunal puts the letter of credit in escrow until final judgment.It is this order that Sperry wants to confirm but Israel wants to vacate. So aninterim award has been ordered; the inquiry becomes what to do with thisorder. Israel argues that this award is preliminary injunction that the CoA

had previously decided is NOT consistent with US law.

1. How is an award confirmed? FAA 9 provides that a court must grantan order confirming an award unless the award is vacated, modified, orcorrected as prescribed in 10,11.

2. On what statutory grounds may an award be vacated? FAA 10,11lists reasons why an award may be vacated. The court says it is a well-


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settled proposition that judicial review of an arbitration award should benarrowly limited. Here, Israel is arguing that FAA 10(a)(4) allows Israel tovacate the award if the arbitrators exceeded their powers. This is NOT aprovision in the FAA anymore. Can a court vacate an award becausethe arbitrator has exceeded the power the court would have? No.

The court recognizes that arbitration is a different forum than the court oflaw.3. What types of awards can a court review? Firstly, note that a

tribunal can issue many types of awards: jurisdictional award, interimmeasures, damages. These are all types of awards. However, the rule isthat only awards that are final are subject to judicial review.Disposition of an issue that is severable from other issues still before thearbitrators may be deemed final and subject to confirmation.

4. Did the arbitrators exceed their powers under FAA 10(a)(4)?Israel argues that the tribunal exceeded its powers by ignoring thedoctrines of res judicata and collateral estoppel since the matter was

already decided in CoA. This court says no, that a different matters werepresented to the courts so the matters that the tribunal heard were NOTjudicially settled. Therefore, the arbitrators did NOT exceed their powers.

a. LITIGATIONSTRATEGY: ANEXAMPLEOFANARBITRATOREXCEEDINGITSPOWERSITRESJUDICATAANDCOLLATERALESTOPPEL. MAKESURETHATIFYOUUSETHISSTRATEGY, THE SAME MATTERHADBEENADJUDICATEDALREADY, AND NOT ADIFFERENTVERSIONOFIT.

b. GOOVERWITH ADAM: WHYDIDTHECOURT NOT REMOVETHEINTERIMMEASURE? WHYDIDTHECOURTTHINKITMADESENSETOKEEPTHEAWARD? ANOTHERQUESTION: ISNTTHISAWARDSUBJECTTO NYC? DOESTHISMEANTHATTHEAWARDCANONLYBEVACATEDUNDER ART 5 ORCANITALSOBEVACATEDUNDER 10 AND 11 GROUNDS? ARE 10 AND 11 ONLYFORDOMESTICAWARDS?

5. On what non-statutory grounds may an award be vacated? The

second ground is non-statutory but where manifest disregard byarbitrators is evident, the US courts may refuse to enforce the award.This doctrine was NOT fully explored in this case.

The following cases illustrate what is to be done if parties have anagreement to arbitrate and one party seeks interim measure in court b/c

tribunal is NOT in effect or the court canNOT grant the interim measure (forexample b/c a party is seeking an attachment order to a third party and thecourt canNOT issue the order because the 3rd party is NOT a signatory to theK].

DEFINITION: FOREIGNATTACHMENT is property awarded to 3rd parties to secure ajudgment or to be sold in satisfaction of a judgment.


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MCCREARYTIREV. CEAT [3rd Circuit, 1974]foreign attachment, prejudgment attachment, when can a US court grant

interim measure*contrast this with Carolina Power, has opposite holding

1. What agreements are governed by NYC? To find out, must look at202 of FAA. This section says that a legal commercial relationship asdescribed in 2 of FAA falls under NYC. Also, at least one of the litigantsMUST be foreign.

2. Where in NYC does it say how to deal with interim measures?It doesnt. Since NYC does NOT address interim measures, 3 of FAAsays that if any suit or proceeding is brought to US court for any issuethat is arbitrable, the court will stay the trial. Therefore, the US court ispowerless to do anything about an interim measure because it isconsidered interlocutory. Since it is interlocutory, the arbitration has notbeen completed yet. This means that if any party brings a proceeding to

US courts to argue an interlocutory proceeding, US courts arecompelled by FAA 3 to stay the trial until arbitration is complete.

3. Conclusion: Here the foreign attachment award is considered aprejudgment award, but since it is interlocutory, the measure canNOT beappealed. The court does NOT involve itself in the interimmeasure a prejudgment arbitration.

CAROLINA POWERAND LIGHTV. URANEX [N.D. CAL. 1977]using 3rdparty to bring signatory to arbitration; prejudgment attachments

* contrast this with McCreary, which has opposite holding

BACKGROUND:To bring Uranex, a signatory to an arbitration agreement, within the properjurisdiction, Carolina attaches a debt to a 3rd party, Homestake. WhatCarolina is doing is transferring the debt that Uranex owns by Homestake,a party in California with the hopes of bringing Uranex within California jDunder quasi in rem. Uranex eventually goes to arbitration but Carolina wantsto maintain the attachment in order to protect any award that Carolina mightreceive in arbitration. Uranex files a motion to dismiss attachment.

ANALYSIS:1. Is this an NYC case? Yes because Uranex is a French company, so

with a foreign litigant, this qualifies as NYC case even if the award isNOT a foreign award.

2. What does NYC say about prejudgement attachments? Nothing.So the issue becomes whether a prejudgement attachment is inconsistentwith NYC. The court does NOT follow McCreary and finds that nothing inNYC preclude a prejudgment attachment. There is nothing to preventthe P from commencing the axn by attachment if such procedure is


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available under the applicable law. Section 4 of the FAA grants dt.courts the power to actually order the parties to arbitration, but thisprovision has NOt been interpreted to deprive the courts of continuing jDover the axn.. Conclusion: NYC does NOT bar attachmentpending arbitration [unlike McCreary which ruled that an proceeding

must be stayed until arbitration is complete].3. So what is the conclusion: Prejudgment is allowed because there isNOTHING in the convention that disallows it.

4. LITIGATIONSTRATEGY: DOESTHISMEANTHATANYINTERIMMEASUREAXNTHATIS NOT MENTIONEDINNYC ISALLOWED?

COOPERV. ATELIERSDELA MOTOBECANE [NY CoA, 1982]notice of attachment of debt

BACKGROUND:The issue here is whether an order of attachment is valid. During pendency

of an action to seek permanent stay of arbitration in court, P commencesaction for money judgment and obtains an ex parte attachment of a debtowned by a New York corporation to D. P then seeks to confirm theattachment and was opposed by D, who moved to dismiss the complaint andvacate the attachment. The court confirms the attachment and grants astay of arbitration. Is the courts confirmation of an interim measurepermissible?

ANALYSIS:1. How does the court frame an attachment? The provisional remedy

of attachment is in part a device to secure payment of money judgment.

2. So will the court grant an order of attachment? No. The order hereis vacated since the underlying dispute between the parties involves theirobligations under a contract which provides that disputes are to beresolved by arbitration and prearbitration judicial action in such casesshould be restricted to determining whether arbitration may becompelled. Essentially, this is a blanket endorsement of McCreary, whichdirects parties to arbitration and does NOT interfere with any arbitralproceedings.

3. Conclusion: the court will NOT endorse an interim measure/provisionalremedy because the underlying dispute is subject to arbitration.

TOYO TIREV. CONTINENTAL TIRE [9TH CIRCUIT 2010]

dissolution of joint venture before arbitration begins

BACKGROUND:Toyo and Continental used to be joint venture partners until a dispute arised.Both go to arbitration but before arbitration Continental wants to dissolve theventure and distribute the assets. Toyo in judicial court moves to StOP thedissolution. Dt.Ct. denies the motion to stop [i.e. allows the dissolution to


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continue] because it believes it lacks authority to stop the dissolution. Toyoappeals dt. ct. decision.

ISSUE:Can a court grant an interim measure to dissolve a joint venture?

HOLDING:No. A court DOES have authority to issue injunctive relief and stopContinental from dissolving the business. This authority comes from ICCrules, which the parties agreed to which allows judicially imposed interimrelief including injunctive relief. But since Toyo is seeking an interimmeasure to maintain status quo AND the meaninfulness of the arbitrationprocess, the court will grant interim measure to stay [i.e. suspend] thedissolvation of the business.

Rule: Emergency relief must be awarded or else arbitration process

becomes nullified.

Judicial Enforcement/Scope of New YorkConvention

BERGESENV. JOSEPHN MULLER[2D CIRCUIT 1983]what is NOT domestic case; 1st case to show arbitration in US is NOT

domestic; reservation to NYC

BACKGROUND:

Bergensen is a Norwegian owner and Muller is a Swiss charter. Therefore,both parties are foreign entities. There was arbitration which ruled in favorof Norway. Norway tried to enforce the award in NY and Muller appeal.

ISSUE: DOESTHE NYC APPLYTOCOMMERCIALARBITRATIONAWARDRENDEREDINTHE US?HOLDING: YES. NYC ISAPPLICABLETOANAWARDARISINGFROMARBITRATIONHELDINNYBETWEENTWOFOREIGNENTITIES. [NYC ARTICLE I, FCC 201].

ANALYSIS:1. Is this a NYC agreement? Yes because both parties are foreign

and/or the awards were made within the legal framework of another

country e.g. they were pronounced in accordance with foreign law oinvolved parties domiciled or having their principal place of businessoutside the enforcing jD.

2. What is the policy behind this broad construction? The courtsbelieve this broader construction is more in line with the intended purposeof the treaty which was entered into to encourage the recognition andenforcement of intl arbitration awards.


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3. Does NYC apply? Need to look at US Reservations when it ratified thetreaty. They are set forth in Article I(3): the first provides that any nationmay on the basis of reciprocity declare that it will apply the NYC only tothose awards made in the territory of another contracting state. thesecond states that the NYC will apply only to differences arising out of

legal relationships considered as commercial under the national law of thestate declaring such a reservation.

INTERNATIONAL STANDARD ELECTRICV. BRIDAS [S.D.N.Y. 1990]jD over foreign award; vacancy, enforcement

ISSUE: WHERECANAPARTYGOTOVACATEORSETASIDEANAWARD? WHOHASTHEAUTHORITYTOVACATE/SETASIDEAWARD? UNDERWHICHLAWISAMOTIONTOVACATEORSETASIDEAWARDDETERMINED?

HOLDING: Vacancy is determined where the procedural law permits.

BACKGROUND: ISE is a US company that arbitrates with Bridas, an Argentineancompany. ISE and Bridas enter a shareholders agreement, but ISEAreneges. Bridas goes to arbitration as per their agreement for breach offiduciary responsibility and breach of K. An award is granted to Bridas. ISEfiles petition to vacate while Bridas files petition to enforce. Note that here,the site for arbitration is Mexico, but the choice of law is US law.

ANALYSIS:1. Where is there statutory ground for vacating or setting aside an

award? NYC Art. V(1)(e) provides that an application for setting aside

or suspension of the award can be made only to courts of thecompetent authority of the country in which or under the law of whichthat award was made. The under the law refers exclusively toprocedural and NOT substantive law, UNLESS there is an agreement b/wparties that award is to be governed by arbitration law different fromarbitration law of country in which award was made. The arbitralprocedural law under which the arbitration was conducted is the law usedto determine subject matter jD to vacate a foreign arbitral award. In thiscase, the parties subjected themselves to procedural law of Mexico.Therefore, only the Mexican courts have jurisdiction under NYC tovacate the award.

2. WHATARESOMEDEFENSESTHATAPARTYCANRAISETO NOT VACATEANAWARD? Thedefenses that can be raised are (1) Article V(1)(b). This is a due process/Inability to present its case defense. (2) Article V(1)(c). This is arguingthat the arbitrator went beyond the scope of its powers. (3) Article V(2)(b), public policy defense.

a. ARTICLE V(1)(B): Inability to present case defense. ISC says itcould NOT present its case b/c the parties were NOT given the courtexperts identity nor a meaningful response to rebut that opinion.


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The court ruled considering that ISC has NOT demonstrated aninability by NOT having raised an objection and it even paid for itsfee for arbitration. Rule: When a party has the chance to raise anobjection for a procedural proceeding but chose not to, this is NOT aground for dismissing a vacantur ruling.

b. ARTICLE V(1)(C): Arbitrator exceeded scope of submission. ISCargues that arbitrals decion was based on matters beyond thescope of submission to its because the damages were based onequitable norms rather than on the law. The court finds thisargument not persuasive because the arbitration agreement has anamiable compositeurs provision, a provision that permits thearbitrators to decide the dispute according to the legal principlesthat they believe to be just without being limited to any particularnational law and to disregard legal technicalities and strictconstructions which would be required to arbitration agreementwithout this provision.

c. ARTICLE V(2)(B): Public Policy Defense. ISC says enforcement ofthe law would be contrary to public policy. However, the court saysthat manifest disregard is a judicial creation that is NOT the samething as a contravening public policy. Therefore, this defense isinvalid.

Judicial Enforcement/Enforcing Arbitration Agreement

1. NYC makes Arbitration Agreement Enforceable.2. FAA actually enforces Arbitration Agreement.

MARCHETTOV. DEKALB GENETICS CORP[N.D. IL 1989]enforcement of arbitration agreement outside US

BACKGROUND:The arbitration agreement says all disputes will be settled in Italy. P bringssuit in United States but D wants to move to dismiss, claiming that the suitshould be brought to Italy.

Issue:So how do you try to enforce an arbitration agreement in a forum outside the

US?

Analysis:1. The issue becomes under what law does a court decide whether to stay or

compel arbitration? Is it the law of the country as designated by thearbitration agreement? Or is it US law, since the suit was filed in US and asignatory to the arbitration agreement wants to compel arbitration wherethe parties agreed.


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a. This is US federal law because 203 says an action or proceedingfalling under NYC shall be deemed to arise under the laws andtreaties of the US.

b. This means that it is the US courts who get to decide if thearbitration agreement is valid or not. If it is, then the US courts are

bound to the NYC because of the FAA, so they must enforcearbitration.2. FAA governs enforcement, interpretation, and validity of the arbitration

clauses in commercial Ks. Moses Cone.3. There is a presumption in favor of arbitration. Mitsubishi.4. FAA 201 enables NYC into US law. NYC is designed to encourage

arbitration of international commercial disputes and unify the standards.Therefore, 201 allows US courts to enforce arbitrationagreements that provide for arbitration in a foreign forum.

a. However, there are limitations: USs reservations to the NYC.5. FAA 203, 206 confer the power to compel arbitration anywhere in the

world where the parties have agreed. However, they are limited byreservations made by the U.S.

6. Before the US courts compel arbitration in a foreign forum, certainelements must be satisfied. These elements are from Article II of theNYC. If these factors are met, then arbitration is mandatory. They are:

a. is there a written arbitration agreement?b. does the agreement provide for arbitration in a signatory country?c. does the agreement arise out a commercial legal relationship?d. does the commercial transaction have a reasonable relationship to

the foreign state?7. For the party that does NOT want to enforce arbitration agreement, there

is a limitation in Art. II 3, where it says that a court does NOT have tocompel arbitration if it finds that the said agreement is null and void,inoperative, or incapable of being performed.

8. Rule: The stay or enforcement of an arbitration agreement is USFederal law even though US law may have nothing to do with thearbitration agreement because the US is bound to NYC as it isimplement by Chapter 2 of the FAA.

REPUBLICOF NICARAGUAV. STANDARD FRUIT CO.[9TH CIR. 1991]enforceability of a K;; implementing K was NEVER signed; arbitrability

Issue:Whether the arbitration agreement can still be enforced if there is a questionabout the enforceability of the contract as a whole.

Analysis:1. It is the courts responsibility to determine the threshold question of

arbitrability.


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2. Based on the severability doctrine implicit in FAA and NYC, both thesebodies of law say that if there is an arbitration agreement, it should beenforced.

3. Here there is NO dispute whether theres an agreement. As a matter offederal law, any doubts concerning the scope of arbitrable issues should

be resolved in favor of arbitration. Moses Cone4. Rule: When determining whether to enforce an arbitrationagreement, the courts should look at the validity of thearbitration agreement and NOT the contract as a whole. In otherwords, arbitrability is determined by reference to arbitration clause.

5. Rule: if you have an enforceable arbitration agreement, thedispute is for arbitration

a. Compare this with Three Valleys

National Iranian Oil v. Ashland Oil [5TH CIRCUIT 1987]refusal to comply with forum selection clause in a location that is a non-

signatory-to-NYC state {Iran}

FRAMEWORK:A party to the arbitration agreement tries to enforce arbitrationagreement/compel arbitration at a place other than where they had agreedto arbitrate.

BACKGROUND:Ashland, a party to an arbitration agreement, refuses to abide by the forumselection clause in the arbitration agreement because it is dangerous nor hasit agreed it arbitrate anywhere else. Iran tries to compel arbitration in

Mississippi as opposed to Iran claiming that it has waived its forum selectionclause and because it is impossible to render performance.

1. Argue that there is a strong federal policy favoring the private resolutionof contract disputes.

a. However, the court does NOT exercise the severability doctrinehere probably because Iran is the enemy of the US.

2. 4 says a party aggrieved by the alleged failure, neglect, or refusal ofanother to arbitrate under a written agreement for arbitration maypetition any US dist. ct. for an order directing that such arbitrationproceed in the manner provided for in the agreement.the court shall

make an order directing the parties to proceed to arbitration inaccordance with the terms of the agreement. The hearing andproceedings under such agreement shall be within the district in whichthe petition for an order direct such arbitration is filed.

a. Therefore 4 mandates two conditions:i. that the arbitration be held in the st. in which the court sitsii. AND the arbitration be held in accordance with the agreement

of the parties.


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1. Since the arbitration agreement said that arbitrationshall be held in Iran, the court held that it did NOT havethe power under 4 to compel arbitration elsewhere.

2. Rule: Location of arbitration agreement must beenforced unless a party raises an Article V

defense.3. Also, Iran is NOT a signatory to NYC. 206 grants US courts the powerto compel arbitration only in signatory countries.

4. National Oil next raises an impossibility defense, saying that it canNOTpossibly bring Ashland to arbitration in Iran.

a. Rule: In order to override the venue designation in anarbitration agreement, the party must show that the venueprovision is severable from the rest of the arbitrationagreement. This determination rests on whether theparties INTENDED to separate the venue provision from therest of the arbitration agreement.

i. Here, the choice of law provision and other duties pertainingto arbitration are assigned to Iran. Therefore, the court findsthat there was NO intent to separate the venue provision fromthe arbitration agreement.

5. Rule: the courts will NOT rewrite arbitration agreement becausearbitration is a creature of contract.

INTERGENV. GRINA [1st Circuit 2003]enforcing arbitration agreement; P is a non-signatory but D wants arbitration

so presents theories

FRAMEWORK:A foreign company (D) and its American agent want to compel arbitrationagainst another foreign company. However, P AND D are both NOT asignatories to the arbitration agreement.

FINDING:P, Intergen, is NOT bound by the arbitration agreement, so D, AlstormcanNOT compel arbitration.

ANALYSIS:1. To enforce the arbitration agreement, the court makes the initial query:

Arbitrability Inquirya. is there a valid agreement to arbitrate?b. is the movant entitled to invoke the arbitration clause?c. is the other party bound by that clause?d. does the claim asserted come within the clauses scope?

2. What law governs?a. FAA governs because it is through the FAA that the US courts can

recognize and enforce a foreign arbitration award.


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3. Theory for supporting notion that non-signatories can be bound byarbitration provision: Judicial Estoppel

a. this doctrine prevents the litigant from presenting a claim that ithad presented in an earlier/previous claim

b. this doctrine is invoked with a party has adopted on position,

secured a favorable decision, and then taken a contradictoryposition in search of legal advantage.i. This is position a party would be taking in a revised pleading

c. Rule: An amendment to a its complain prior to the issuance of anysubstantive ruling addressed to the original compliant does NOTconfer an advantage to the amending party. Therefore, thisdoctrine canNOT be employed.

4. Theory for supporting notion that non-signatories can be bound byarbitration provision: Equitable Estoppel

a. thisdoctrine applies to stop a party from enjoying rights andbenefits under a contract while at the same time avoiding its

burdens and obligations; this doctrine is used to prevent a partyfrom benefiting without sacrificing anything.

5. Theory for supporting notion that non-signatories can be bound byarbitration provision: Third Party Beneficiary

a. To use this doctrine, there must be evidence that a contractingparty intended to confer a benefit on a third party.

i. There must be a clear intention on the part of the contractingparty.

ii. Rule: Just because a parent company benefited does NOTmean it is a third party beneficiary.

6. Theory for supporting notion that non-signatories can be bound by

arbitration provision: Agencya. To use this doctrine, the following elements must exist:

i. an agency arrangement must existii. the arrangement must be relevant to the legal obligation in

dispute7. Theory for supporting notion that non-signatories can be bound by

arbitration provision: Alter Egoa. Under federal common law, there is NO precise litmus test for

determining when the corporate form should be ignored.b. The overreaching principles is that corporate form may be

disregarded only if considerations of fairness or public necessity

warrant such a step.c. The test that court uses is:

i. whether the entities in question have ignored theindependence of their separate operations

ii. whether the defendant employed the multiplicity of entities aspart of an artifice or scheme to defraud

iii. whether holding the corporate form inviolate would lead tosubstantial injustice or inequity


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d. HOWEVER, the court cautions against invoking this doctrinebecause common ownership and common management withoutmore are insufficient to override corporate separateness.

e. Another reason why the courts do NOT want use this doctrine isbecause it is designed more to help third party; it is an equitable

doctrine.

ARTHUR ANDERSENV. CARLISLE[SCOTUS 2009]enforcing arbitration agreement; appealing under 16(a)

Rules:

If a court denies a motion to arbitrate, this decision is arbitrable.

If a court grants arbitration, this is NOT appealable b/c it is NOT considereda final order 16(3)

Here D asserts arbitration [3] and it wants to stay litigation but the court

denies this action. Therefore, D invokes 16(a) and appeals.

6th Circuit rejects this because D is NOT a signatory to the arbitrationagreement, so it canNOT invoke 16(a) because there is no agreement toarbitrate.

However, a non-signatory can motion to stay proceedings and compelarbitration if state contract law allows him to enforce the arbitrationagreement.

ENFORCING AWARDS:BIOTRONIKV. MEDFORD MEDICAL INSTRUMENT [D.NJ 1976]

enforcing awards; declaratory judgment; no show to arbitration

Rules:207 provides that within 3 years a party to arbitration can confirm anaward in any court that has jurisdiction against any other party to the

arbitration. The court shall confirm the award unless it finds one of thegrounds for refusal or deferral of recognition or enforcement of the awardspecified in the said Convention.

Therefore, the default rule is that awards are enforceable unless thereis an Article V defense. The burden is on the party opposing theenforcement.

Holding:


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There is NO fraud when the winning party did NOT raise issues favorable toparty that did NOT show up for arbitration and the other party had anopportunity to be heard.

NORTHROP CORP. V. TRIAD INTL MARKETING [9TH CIRCUIT 1987]

enforcing award; change in foreign nations laws make compliance with AAillegal; choice of law;

law keeps performance from happening

ISSUE:How do you regard a contractual relationship when a transaction outside theUS is made illegal when the foreign government changes its laws.

Holding:This turns on the choice of law in the contract.

Background:N supposed to pay T commission on sales of aircraft they paid at somepoint but then in 1975 Saudi Arabia issued a decree that barred payingcommissions so N stopped paying the commissions. T claims in arbitrationthat N breached for NOT paying commissions; N defends on the grounds thatSaudi Law makes it illegal to pay the commissions. Arbitration occurs andan award is rendered in favor of T.

Analysis:

This becomes a contract interpretation issue. This is an agreementgoverned by the laws of Cali so Cali laws should determine the effect of the

decree on Ns obligation of the K. The Saudi Law is NOT determinative.o But under Cali law, what is the effect of the Saudi decree on the

parties? The court does NOT use Saudi law because it is NOT thegoverning law of the contract

o Court found that even though Saudi issued a decree, N could still

pay commission and T could still perform its obligations. Thedecree is NOT preventative.

o Court next looks at public policy: is enforcing this award

contrary to US public policy?

Court finds that just because it is illegal in Saudi does NOTmean it is illegal in Cali.

o LITIGATION STRATEGY:Think about how you would protect yourselffro unexpected changes. Could you have foreseen the changescoming?

IRAN AIRCRAFT INDUSTRIESV. AVCO[2ND CIRCUIT 1992]Due process under Article V(1)(b); evidentiary hearing; inability to present to

present case


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defense rejectedBACKGROUND:Avco argues that the district court properly denied enforcement of the Awardpursuant to Article V(1)(b) of the New York Convention because it was unable

to present its case to the Tribunal.

RULES:

giving proper notice of arbitration proceedings is essential and a partyshould be given the opportunity to respond. Mathews v. Eldridge

ENCYCLOPAEDIA UNIVERSALESV. ENCYCLOPADEIA BRITANNICA[2ND CIRCUIT2005]

arbitrators exceeding their powers; courts do NOT enforce arbitration b/c ofagreed upon arbitral procedures

Background:Arbitration tribunal selected third member without proper adherence to thearbitration agreement. This is a grounds for refusing to enforce an awardunder Article V(1)(d). This reads:

The composition of the arbitral authority or procedure is NOT inaccordance with the agreement of the parties or NOT in accordancewith the law of the country where the arbitration took place.BoP: The party opposing the enforcement of an arbitral award has theburden to prove that one of the NYC Article 5 defenses applies.

Finding:The arbitral award was improperly composed under Article 5(1)(d). Becauseit was improperly composed, it had NO power to bind the parties. Theappointment of the third arbitrator was premature and therefore thecomposition of the arbitral authority was NOT in accordance with the partiesagreement. The process and procedure is NOT in accordance with what theparties agreed.

Rule/Lesson: There is a strong public policy in favor of arbitration butcourts should NOT overlook agreed upon arbitral procedures in deference tothat policy.

CHINA MINMETALSV. CHI MEI [3RD CIRCUIT 2003]absence of agreement can avoid enforcing award; opposing jD or

challenging jDBACKGROUND:A party appeared in arbitration even though it was challenging jD.


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Finding:The courts will NOT enforce an arbitration agreement if there is NOarbitration agreement; If the courts did, then anyone can be bought.

COMMERCIAL UNIONV. LINES [2ND CIRCUIT 2004]

party had deceived for the specific intent to avoid regulations

Background:E re-domesticates itself to Bermuda to take advantage of another countrysbankruptcy laws. Com agrees to arbitrate the fraud issue and seeksrescission of K. Arbitrators issued an award to E even though it unanimouslyacknowledged that E re-domesticated by receipt. Aribitrators said that thearbitration panel is the final adjudicator and that commercial union is NOworse off in Bemurda than in Massachusetts. They feel that when thearbitration is completed, Comm end up in the same position as it would havebeen had there bee NO re-domestication. Comm moves to vacate while E

moves to confirm. Dt. Ct. denied Comms motions and affirmed the award.Comm appeals.

Issue:Since Emlico used deceit, any advantage it gained should be denied.

Finding:This is a public policy issue because the court has to balance the publicpolicy favoring arbitration with NOT allowing a wrongdoer to benefit/profitthrough his wrongdoing. The court decides to vacate.

Principle: courts should NOT enforce fraudulent conduct.

SARHANKV. ORACLE[2ND CIRCUIT 2005]joint and several liability; jD; non-signatory PARENT

Background:Here there is an American parent company, Oracle, with a Foreignsubsidiary. Dt. Ct. confirms an arbitration award against foreign subsidiarybut PARENT appeals. The award was rendered j/s against Oracle and itssubsidiary in Egypt.

The agreement was between Sarhank and the subsidiary

jD:203 gives dt. ct. s-m jD over cases brought to enforce arbitrationagreements under NYC. To invoke sm-JD1. claim a cause of action under NYC2. describe a written agreement b/w Systems and Sarhank


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3. show legal relationship b/w Oracle and Sarhank because Systems was ashell company

4. describe arbitral awarda. Therefore, Sarhank has pleaded an award under NYC therefore

there is s-m jD.

Defense:Oracle argues that under Article V(2)(b) US courts are NOT required toenforce an agreement if its s-j is NOT capable of arbitration in US or if arbitralaward is against public policy.

1. under US law, whether a party has consented to arbitrate an issueto be decided by court in which enforcement of award is sought.The court uses domestic K law to determine whether the partiesagreed to submit the issue of arbitrability to arbitrators [FirstOptions]. In other words, courts should have primary responsibilityabsent parties agreement to determine arbitrability.

2. What law should US apply to see if award is enforceable?a. American contract law because there was NO agreement b/w

Oracle and Sarhank

VACATING AWARDS:

MOBIL OIL INDONESIAV. ASAMERA OIL (INDONESIA) S.D.N.Y 1980arbitrators exceeding their powers 10(a)(4)

How do you argue that arbitrators exceeded their powers?

argue that arbitrators made a mistake in applying the choice-of-law powero This provision is given the narrowest of readings

o Here there is NO challenge to arbitrators b/c they did what they

were supposed to do

as long as it is barely colorable, the award is valid

COMMONWEALTH COATINGSV. CONTINENTAL CASUALTYCO. SCOTUS 1968arbitrator bias

FAA section 10 allows awards to be vacated where it was procured bycorruption, fraud, or undue means or where there was evident partiality

i. These provisions show Congress provided for an impartial arbii. Even if there was no finding of arbitrator being guilty of fraud or biasin deciding, and it is true that arbitrators cannot be severed from alltheir ties w/ the business world, however, with an inkling of pecuniaryinterest, theres a simple req of disclosure to the parties of anydealings that might create an impression of bias (AAA rules section 18)


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iii. However concurrence states that non-disclosure only creates apresumption of bias and where non-disclosure is not calculated,presumption can be overcome

POSITIVE SOFTWAREV. NEW CENTURYMORTGAGE (5TH CIRCUIT 2007)

arbitrator bias

arbitrators mere non-disclosure of prior connections w/ one of parties toarb is insufficient, standing alone. Arbitrator who claimed he had nothingto disclose had been member of another firmOther firm together with firm that was one of the parties in thisarbitration, had been counsel for party in a patent litigation (about 7years or more in the past)

i. Failure to disclose must involve significant compromisingconnection to one of parties

ii. Evident partiality evident means clear to the vision orunderstanding (synonymous w/ manifest, obvious, and apparent)partiality means biasiii. Award may not be vacated bc of trivial or insubstantial priorrelationship b/w arbitrator and the partiesiv. Reasonable impression of bias standard is interpreted practicallyrather than w/ utmost rigorv. In this case, previous representation by two of the 34 attorneys inunrelated litigation at least 7 years ago was not enough to be evidentpartiality

HYPO:What happens if you have an international arbitration award? A real one(this one is domestic) but the award is rendered outside US and in thatcase, the losing party discovers that arbitrator failed to disclose that hiscousin was lawyer who won case for that party but losing party finds itastonishing and wants to do something about it. What can it do?

1) If its so wrong, it can always seek to have award vacated but only atthe place where award was rendered

2) If the winning party tried to enforce award in US, losing party woulddefend is there a provision in Article V of NY Convention thatmatches? V(1)(d) deals with whether proceeding is in accordancewith parties agreement

a. How would you take this provision and argue thats a basis fornot holding award?

i. Require independence and impartiality and disclosure soif you argue there is failure to disclose, there was lack ofindependence then its probable that arbitrators violatedrules this would help its critical if somehow arbitration


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hasnt proceeded in accordance with those requirements,its not in accordance with arbitration clause

ii. Understanding what the rules are and how they can beused, is often key to how to vacate an award

HALL STREETV. MATTEL (SCOTUS 2008)request to deviate, scope of judicial review NOT jD by private K [FN2];manifest disregard of law; review for error of law; standard of review

Issue: Can parties contract to have matters reviewed by court for vacaturand modification that are beyond what is provided in FAA 10, 11?Holding: No. The reasons provided for in 10,11 are exclusive.

Hall Argues the Following:1. in Wilko the court was saying that manifest disregard of the law is a

ground for which courts can overrule arbitration award. Hall extends this

argument by saying that if courts have leeway to expand grounds forvacancy, contracting parties should also.

a. NO!!!!! The court does NOT buy this argument for the followingreasons:

i. court does NOT like the leap from judicial expansion intoprivate expansion

ii. what exactly does manifest disregard mean?2. FAAs purpose is to enforce agreements so if the parties agreed to vacatur

on certain grounds, the court must enforce.a. NO!!!! the court does NOT buy this argument either b/c there is

something that prevents the FAA from expanding its scope

i. ejusdem generic doctrine specifies that a general word willbe interpreted to be consistent with specificsthis suggeststhat FAA canNOT be expanded

b. FAA 9 is restrictive b/c it says must grantunless for thefollowing. this also indicates that 9 was intended to be restrictive.

3. Can parties agree to contract for greater review of arbitration awards?a. Court said parties canNOT do this b/c reasons for vacating awards is

EXCLUSIVE.i. Defense: however, look at Volt. According to Volt, parties

can incorporate state law, so perhaps state law can allow for astandard of review.

4. Summary: Statutory grounds for expedited judicial review to confirm,vacate, or modify/correct arbitration award are exclusive and canNOT besupplemented by contract. Also, arbitrations are contracts and partiescan contract for the standard of review. The issue becomes whether thisis enforceable? Some parties even K for no review b/c they want finality.

Dissent:


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Dissent says majoritys decision conflicts with FAA and ignores historicalcontext.

ENFORCING VACATED AWARDS:

CHROMALLOY AEROSERVICESV. ARAB REPUBLICOF EGYPT [D.D.C. 1996]res judicata of an issue decided in a foreign court; unique b/c arbitration

agreement prohibits seeking appeal; award is set aside

Issue: Can annulment of an arbitration award made in a foreign competentauthority of the country in which or under the law of which that award wasmade be used to deny enforcement of an award?Holding: No, not under the doctrine of international comity. This isbecause no nation is under an unremitting obligation to enforce foreigninterests which are fundamentally prejudicial to those of the domestic forum.

Analysis:

The precise question is whether the US court should give res judicata effectto the decision of the Egyptian Court of Appeal, NOT whether the courtproperly decided the matter under Egyptian law. Here the court hasassumed that the Egyptian Courts decision is proper.

The court finds that the act of state doctrine as a whole does NOT require aU.S. court to defer to a foreign sovereign on these facts.

Baker Marine v. Chevron [2nd Circuit, 1999]confirmation of award in U.S. declared vacated in state under whose laws

arbitrated under

Background: There is arbitration in country X. Yet the court of country Xsets aside the award when the winning party tried to enforce the arbitrationaward. Therefore the winning party brings suit in U.S. to confirm the award.Arbitration Agreement: any dispute, controversy, or claim arising out ofthis K or the breach, termination or validty therefof, shall be finally andconclusively settled by arbitration in accordiance w/ Arbitration Rules ofUNCITRAL. The arbitration procedure not governed by UNCITRAL shall begoverned by the substantive laws of Nigeria and contracts shall be governedby the substantive laws of Nigeria. K also said judgment upon the award of

the arbitrators may be entered in any court having jD.

Analysis:

This dispute arises under NYC b/c party is seeking enforcement ofarbitration award in a nation other than the nation where the awards weremade (Art. 1 allows for the enforcement of awards in a territory of a Stateother than the State where the recognition and enforcement of suchawards is sought.


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Article V(1)(e) provides that a court may refuse enforcement of an awardthat has been set aside or suspended by a competent authority of thecountry in which or under the law of which the award was made. i.e. if aforeign court sets aside or vacates an award, the US court may refuse toenforce the award that was set aside of suspended as long as the original

vacatur was done by the competent authority

Holding:

[From Termorio]: b/c there is noting in the record indicating that theproceedings before the foreign court is other than authentic, the dt. ct. isobliged to respect the jdgmt of foreign ct.

TERMORIOV. ELECTRANTA [COA, DT. CT. 2007]grounds for nullification; enforcement of arbitration award on public policy

grounds; validity of a foreign judgment vacating an arbitration award

FRAMEWORK: X wins an award against Y in a foreign tribunal. Y has theaward nullified in the judicial forum of the state under which the tribunalmade its decision because it argued that the award could NOT have beenmade under the laws of the state. Despite the award NOW NULLIFIED, Xseeks enforcement in US courts because under FAA 201, an award must beenforced.

BACKGROUND: APPELLANTSSEEKINGTOENFORCEANAWARDTHATHASBEEN VACATED.Tribunal issues an award in favor of TermoRio. Losing party, Electranta, files

an extraordinary writ in Colombia, where the award was rendered tooverturn the award. The Colombian court does nullify the award on theground that the parties agreement violated Colombian law. Despite thenullification, an investor for TermoRio sought enforcement of the award.Investors argument is that under FAA 201 [enforces NYC], enforcement ofthe award is required. The Dt. Ct. dismissed TermoRios request forenforcement of the award which was nullified on the following grounds:1. failure to state a claim for which relief can be granted.2. forum non conveniens3. Dt. Ct. also dismissed TermoRios enforcement axn under Art. V(1)(e) of

NYC

ANALYSIS:

Firstly: who is the winning party? The one who initially won the award orthe one who was able to nullify it?

The way Termorio frames the argument:o Electranta is undermining the award by filing an extraordinary

writ to overturn the award. This led to the vacatur of the award.


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The basis for this overruling is that the arbitration agreementcalls for governing of the agreement via ICC rules and Colombianlaw but Colombian law does NOT permit use of ICC procedure.

o Breach of K claim

Electrantas defense:

o The award was properly vacated by Colombian courto Dt. Ct. lacks subject-matter jD by operation of the Foreign

Sovereign Immunities Acto SoL barred the suit

o complaint should be dismissed under doctrine offorum non

conveniens

Standard of review for failure to state a claim : de NOVO

Standard of review for forum NON conveniens : reversal only uponclear abuse of discretion

1stly: does the NYC apply?o the NYC allows courts in one country to enforce arbitral awards

rendered in another signatory country FAA 201o the NYC provides that signatory nations are to recognize and

enforce arbitral awards rendered in other nations (NYC Art. III)o HOWEVER, enforcement of awards may be refused if the award

was set aside by a competent authority in the country in whichthe award was made. Art. V(1)(e)

VALIDITYOFAFOREIGN JUDGMENTVACATINGANARBITRATIONAWARDo in Mitsubishi the court said there is a federal policy in favor of

dispute resolutiono General Rule: each contracting state shall recognize arbitral

awards as binding and enforce them in accordance with the rulesof procedure of the territory where the award is relied upon{NYC Art. III}

o General Rule: if the place where the arbitration award wasrendered is a party to the convention, then all other Conventionstates are required to recognize and enforce the award,regardless of the citizenship or domicile of the parties to thearbitration [Creighton Ltd.]

Exception: Those enumerated in NYC Art. Vo Rule: under the NYC only a court in a country w/ 1O jD over

an arbitral award may annul the award. [Karasha]o Rule: Art. V(1)(c) the state in which, or under the law of which

the award is made will be free to set aside or modify an award inaccordance with its domestic arbitral law; on the other hand,when there is an action for enforcement in a foreign state, thestate may refuse to enforce the award only based on Art. V

o The party trying to argue that theres no claim stated is saying

that a party to NYC does NOT need to recognize and enforcean award if refusing party furnishes proof that the award was set


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aside by a competent authority of the country in which or underthe law of which the award was made. Art (V)(1)(e). Appellees(refusing party) argue that there is NOTHING in the recordindicating that the proceedings were tainted or that thejudgment of the court is NOT authentic. therefore there is NOT

claim nor cause of action under FAA nor NYC. The courtagrees. It cites Baker Marine and states that it does NOT want tomechanically apply domestic law to foreign awards under theNYC because this would undermine finality and regularlyproduce conflicting jdmts. Another reason it cites is that theNYC does NOT exist to be enforced in Contracting states if ithas been lawfully set aside by a competent authority.

CONSIDERATIONOF PUBLIC POLICYo The party wanting to enforce the award, appellee, says US has

discretion under NYC to enforce an award despite annulment inanother country b/c Art. (V)(1)(e) says recognition and

enforcement maybe refused if the award was set aside by acompetent authority in the primary state. It also argues that astate is NOT required to recognize a foreign judicial proceeding ifthat proceeding is contrary to public policy. Appellant arguesthat the since the vacatur of the award was contrary to both theColombian and international law. This means that the vacatur isan insult to both international and US [how US?] policy.Therefore, the process of nullifying the award is just wrong. Tosupport its claim, appellant relies on In re Chromalloywhere thedt. ct. refused to recognize that the Egyptian court nullified anaward [meaning the dt. ct. recognized the award] because it

would violate US policy that favors arbitration. Appellees saythat In re Chramolloyis NOT applicable b/c in Chramolloytheparties contracted on the appealability of the vacated awardwhereas here, Electranta questioned and objected to the tribunalthat the arbitration panel was NOT proper nor authorized by law

o Court also holds that a jdgmt whether to recognize or

enforce an award that has NOT been set aside in the State inwhich it was made is quite different from a jdmt whether todisregard the axn of a court of competent authority inanother State.

o Court interprets NYC such that as the state in which or under

the law of which the award is made will be free to set aside ormodify an award in accordance with its domestic arbitral law,and its full panoply of express and implied grounds forrelief.This means that a primary State necessarily may setaside an award on grounds that are NOT consistent with the lawsand policies of a secondary Contracting StateThe NYC doesNOT endorse a regime in which secondary States routinelysecond-guesses the jdmt of a court in primary state when the


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court in the primary state has lawfully acted pursuant tocompetent authority to set aside an arbitration award made in itscountry.

o MYOWN SUMMARY: the threshold is very high for asking a UScourt to ignore the judgment of a court of competent authority in

a primary state vacating an award. it takes more than arguingit offends the public policy of US to overcome Art. V(1)(e).

o RULE/SUMMARYOFTHISCOURTSDECISION: when a competent foreign

court has nullified a foreign arbitration award, US courts shouldNOT go behind that decision absent extraordinary circumstancesNOT present I this case.

the test of public policy canNOT be simply whether thecourts of a secondary State would set aside an arbitrationaward if the award had been made and enforcement hadbeen sought w/n its jD. The policy behind this is thatdifferent states may have different grounds for setting

aside arbitration awards, which would lead to inconsistentenforcement of arbitral awards.

MOTIONTODISMISSFORFAILURETOSTATEACLAIMUNDER 12(b)(6)o Std that this case uses is dismissal is appropriate under 12(b)(6)

only if it is clear that NO relief could be granted under any set offacts that could be proved consistent with the allegations. Soappellees are arguing that the standard was NOT met.

o Appellants argue that appelles are raising an affirmative defense.

An affirmative defense can only support a 12(b)(6) dismissal ifthe defense is unavoidably established by the facts alleged onthe face of the complaint. Therefore, appellants argue that

Colombia has to conclusivelyargue that the nullification defeatsthe appellantss claim; however, application of the Art. V(1)(e)canNOT be conclusive under NYC and US law, an arbitrationaward maybe enforced despite having been nullified in thecountry in which it was issued. Therefore, this is NOT aconclusive issue so appellees motion for sJ should NOT begranted.

The court does NOT agree with this premise. WhY???

CONCLUSION:The CoA affirms the judgment of Dt. Ct.

LITIGATION STRATEGY:When a foreign company is involved, the foreign company should defendenforcement in US by doctrine offorum non conveniens

LITIGATION STRATEGY:


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Be mindful of state owned and state controlled companies: they may be anagency or instrumentality of the state meaning they are covered by theForeign Sovereign Immunities Act

YUKOSV. ROSENFT [COURTOF AMSTERDAM, 2009]enforcement of vacated awards; conflict of law

BACKGROUND:Yukos is awarded by tribunal. The award is overturned by a Russian court.So Yukos seeks to enforce the award in the Netherlands, even though it wasoverturned. It is important to note that Yukos is NOT challenging thenullification of the award, but just trying to enforce the award even thoughthe Russian court nullified it. The issue is whether Dutch courts under Dutchlaw recognize the overruling. So what we have here is an inquiry of conflictof law; a clash. Russian law overturns an award legally. But is this legalunder dutch law? Whether it is/isnt affects how the award can/cant be

enforced in Netherlands. Article V permits the recognition of the settingaside of an award but does Dutch law?

ISSUE:Whether Dutch law can refuse to recognize the overturning of a foreignaward if that overning is NOT legal under Dutch law.

Analysis:1. GENERAL RULE: under the principle of NYC the judge being asked to

render an award must respect the overturning of the arbitration rulings.2. HOWEVER, the recognition and enforcement of an award may be refused at

the losing partys request ifa. losing party gives the competent authority of the place were

recognition is being sought PROOF that (1) the award was set aside(2) by a competent authority of the country in which (3) the awardwas made. Article V(e)(2)

3. Premise: the question as to whether the rulings by the Russian civilcourt to overturn arbitration rulings may be recognized in the Netherlandsmust be answered on the basis of Dutch civil law.

4. Premise: Dutch judge does NOT have to recognize the overturned rulingin Russian court if the verdict given in the Russian court canNOT berecognized in the Netherlands.

5. General Rule: a foreign verdict is recognized as long as it was arrivedthrough due process.

6. Yukos argues that it didnt get due process b/c the judiciary was NOTimpartial NOR independent. The evidence it presents that the judiciarywas biased:

a. Analysis by a murdered journalistb. Analysis by a parliamentary assembly of the council of Europe

8/3/2019 Int'l Arbitratin Outlin

int'l arbitratin outline

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