INTERNATIONAL ARBITRATION AND THE COURTS Devin Bray Heather L. Bray Editors JURIS
Questions About This Publication For assistance with shipments, billing or other customer service matters, please call our Customer Services Department at: 1-631-350-2100 To obtain a copy of this book, call our Sales Department: 1-631-351-5430 Fax: 1-631-673-9117 Toll Free Order Line: 1-800-887-4064 (United States & Canada) See our webpage about this book: www.arbitrationlaw.com COPYRIGHT 2015 JurisNet, LLC All rights reserved. No part of this publication may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems without permission in writing from the publisher. Printed in the United States of America. ISBN 978-1-937518-76-9 JurisNet, LLC 71 New Street Huntington, New York 11743 USA www.arbitrationlaw.com
Summary Table of Contents About the Editors... xiii About the Authors... xv Foreword... xxi Chapter 1 Arbitration and the Role of Law Sir Anthony Evans... 1 Chapter 2 Shattering the Barrier of Inarbitrability Thomas E. Carbonneau... 15 Chapter 3 Arbitrating Arbitrability Alan Scott Rau... 57 Chapter 4 The Arbitrator's Mission and the Application of Law in International Commercial Arbitration W. Laurence Craig... 139 Chapter 5 Court Litigation over Arbitration Agreements: Is it Time for a New Default Rule? Jack Graves... 203 Chapter 6 Judicial Assistance by German Courts in Aid of International Arbitration Reinmar Wolff... 233 Chapter 7 The Extraterritorial Reach of 28 U.S.C. 1782 in Aid of Foreign and International Litigation and Arbitration Tyler B. Robinson... 269 iii
iv INTERNATIONAL ARBITRATION AND THE COURTS Chapter 8 Two to Tango: Domestic Grounds for Vacatur Under the New York Convention Harout Jack Samra... 305 Chapter 9 The UK Supreme Court Speaks to International Arbitration: Learning from the Dallah Case George A. Bermann... 337 Chapter 10 Sovereign Immunity as a Barrier to the Enforcement of Investor-State Arbitral Awards: The Re-Politicization of International Investment Disputes Andrea K. Bjorklund... 363 INDEX... 405
Table of Contents Chapter 1 Arbitration and the Role of Law Sir Anthony Evans... 1 I. The Law in Dubai and the DIFC... 8 II. The Law in Bermuda... 12 III. Enforcement... 12 IV. Concluding Remarks... 13 Chapter 2 Shattering the Barrier of Inarbitrability Thomas E. Carbonneau... 15 I. The Barriers to Arbitrability... 15 II. Widening the Arbitrability of Statutory Claims... 19 III. Internationalism and Arbitrability... 22 IV. Toward a Rule of Universal Arbitrability... 27 V. Mandatory Law and Arbitrability... 40 VI. Conclusion... 53 Chapter 3 Arbitrating Arbitrability Alan Scott Rau... 57 I. The Gateway Issue... 58 II. The Question of Timing... 62 III. The Allocation of Decisionmaking Power... 80 IV. On the Clear and Unmistakable : This Is All One Big Overblown Latke... 97 V. The Dilemma of Institutional Rules... 110 A. Thai-Lao Lignite... 122 v
vi INTERNATIONAL ARBITRATION AND THE COURTS B. Schneider v. Kingdom of Thailand... 131 VI. The Lesson to be Drawn... 135 Chapter 4 The Arbitrator's Mission and the Application of Law in International Commercial Arbitration W. Laurence Craig... 139 I. Introduction... 139 II. The Nature of Arbitration... 141 A. Commerce and the Spirit of Arbitration... 141 B. Choice of Arbitrator by the Parties... 152 C. Different Arbitrations, Different Expectations... 156 III. Application of Law and its Limits... 158 A. Choice of Law... 158 B. No Judicial Reviewability of Arbitral Errors of Fact or Law... 163 C. Some Reflections on the Arbitrator as Amiable Compositeur... 169 D. Manifest Disregard of the Law... 175 IV. Constraints on the Arbitrator's Mission... 178 A. Duty to Respect Public Policy... 178 1. Truly International Public Policy?... 178 2. Bribery and Corruption... 180 3. Laws of Mandatory Application (Lois de Police)182 B. Duty to Render an Enforceable Award... 188 C. Duty to Render Reasoned Awards... 189 D. Culture, Conscience and Expectation of the Parties.. 193 Chapter 5 Court Litigation over Arbitration Agreements: Is it Time for a New Default Rule? Jack Graves... 203 I. Introduction... 203 II. Litigation Over Arbitration Agreements and Negative Competence-Competence... 205
TABLE OF CONTENTS vii A. The Basic Problem and an Array of Possible Solutions... 206 1. A Strong Version of Negative Competence- Competence... 207 2. An Absolute(?) Version of Contractual Competence-Competence... 208 3. A Flexible Version of Negative Competence- Competence... 209 4. The Lack of a Clear Standard under the UNCITRAL Model Law... 209 5. An Option for Early Court Determination of Jurisdiction... 210 B. The Basic Problem Jurisdiction Brussels I Style... 210 C. The New York Convention and Article II(3)... 214 III. Addressing the Problem Through Article II(3) of the New York Convention... 217 A. Possible Solutions to the Problem... 217 B. Means for Bringing Any Solution About... 220 IV. Arbitration as a Default in International Commerce... 221 A. Arbitration as the Default... 222 B. A Small, Though Significant, Step Beyond the Status Quo... 223 1. A Significant, and Perhaps Controversial, Presumption of Consent... 225 2. The Panama Convention and a Bare Bones Arbitration Agreement A Pre-existing Template for a Default Legal Regime... 229 V. Conclusion... 232 Chapter 6 Judicial Assistance by German Courts in Aid of International Arbitration Reinmar Wolff... 233 I. Introduction: Challenges of Accessing Evidence Abroad... 233 II. Common Approaches: An International Comparison... 234
viii INTERNATIONAL ARBITRATION AND THE COURTS A. Potential Approaches... 234 B. Article 27 of the UNCITRAL Model Law... 236 C. Adoption of Article 27 of the UNCITRAL Model Law and Creation of Similar Rules... 237 1. Switzerland... 238 2. France... 238 D. Jurisdictions Granting Judicial Assistance for International Arbitration... 239 1. England... 239 2. United States... 239 E. Conclusion... 243 III. Judicial Assistance from German Courts under Section 1050 of the ZPO... 243 A. Concept of Section 1050 of the ZPO... 243 B. Scope of Judicial Acts Covered by Section 1050 of the ZPO... 245 1. Taking Evidence... 245 2. Other Judicial Acts... 247 3. In Particular: Applications for Preliminary Judgments... 248 4. Admissibility of the Requested Act under the Laws of Civil Procedure... 251 5. No Empowerment of the Arbitral Tribunal to Carry Out the Judicial Acts... 253 IV. Prerequisites for Judicial Assistance... 254 A. Motion... 254 1. Entitlement to File the Motion... 255 2. Form and Content of the Motion... 256 3. Exclusion or Limitation of the Motion by the Parties to Arbitration... 256 B. Competent Court... 257 C. Legal Examination by the Court... 258 1. Formal Criteria... 258 2. Substantive Criteria... 262 D. Deciding the Motion... 263 1. Procedure for Deciding Motions... 263 2. Court Decision, Remedies and Costs... 264
TABLE OF CONTENTS ix V. The Procedure for Taking Evidence... 265 A. Principle: German Civil Procedure... 265 B. Particularity: The Arbitral Tribunal s Right to Participate... 266 C. Introduction of Evidence Taken in the Arbitration Proceedings... 267 VI. Conclusion... 268 Chapter 7 The Extraterritorial Reach of 28 U.S.C. 1782 in Aid of Foreign and International Litigation and Arbitration Tyler B. Robinson... 269 I. Introduction... 269 II. The Prevailing View That Section 1782 Does Not Authorize Discovery Of Documents Located Abroad... 272 III. A Lone Dissenting Voice That Others Have Declined to Follow... 277 IV. A Critical Review of the Existing Debate... 279 A. The Plain Language of Section 1782... 280 B. The Limitations of the Secondary Sources of Statutory Intent... 283 C. The Policy Objectives of Section 1782... 285 V. Extraterritorial Witness Discovery Under Section 1782.. 290 A. The Federal Rules Applied to Witnesses Abroad... 291 B. The Federal Rules Applied to Witnesses under Section 1782... 294 C. The Extraterritorial Reach of Section 1782 to Obtain Oral Testimony from Non-Party Foreign Witnesses... 297 D. The Extraterritorial Reach of Section 1782 to Obtain a Statement From a Non-Party Foreign Witness.. 299 VI. Conclusion... 302
x INTERNATIONAL ARBITRATION AND THE COURTS Chapter 8 Two to Tango: Domestic Grounds for Vacatur Under the New York Convention Harout Jack Samra... 305 I. Introduction... 305 II. The FAA and the New York Convention... 307 A. The Provisions of the FAA... 307 B. The Provisions of the New York Convention... 309 C. Federal Arbitration Policy... 313 III. Article V and the Second Circuit in Yusuf... 314 IV. The Eleventh Circuit in Industrial Risk Insurers... 324 V. Revisiting Article V(1)(e)... 328 VI. Conclusion... 334 Chapter 9 The UK Supreme Court Speaks to International Arbitration: Learning from the Dallah Case George A. Bermann... 337 I. Introduction... 337 II. The Facts... 338 III. The State as Non-Signatory of the Arbitration Agreement.. 340 IV. The Role of the Court of Enforcement... 349 A. Ancillary Issues... 350 1. Partial Awards... 350 2. Estoppel for Failure to Seek Annulment... 352 3. Parallel Annulment Proceedings... 353 B. Levels of Inquiry and Deference... 354 1. Levels of Jurisdictional Review... 354 2. Deference to the Arbitrators... 358 V. Conclusion... 361
TABLE OF CONTENTS xi Chapter 10 Sovereign Immunity as a Barrier to the Enforcement of Investor- State Arbitral Awards: The Re-Politicization of International Investment Disputes Andrea K. Bjorklund... 363 I. Enforcement of Investor-State Arbitral Awards... 368 A. Execution of Awards under the ICSID Convention.. 368 B. Execution of Awards under the New York Convention... 371 II. Municipal State Immunity Laws... 374 A. Establishing Jurisdiction Over States for Enforcement Purposes... 376 B. Establishing Jurisdiction Over State Assets... 377 1. Waiver of Execution Immunity... 378 2. Commercial Assets... 380 III. Solutions Or More Problems?... 387 A. Changes in International Law... 387 B. Changes in Municipal Law... 388 C. Changes in Investors Strategies... 391 D. Home State Assistance... 396 E. Multilateral Pressure... 398 IV. A Re-politicization of Investment Disputes?... 399 V. Conclusion... 402 INDEX... 405