All posts by Nicole Dugan

Somehow Finding a Way to Avoid Arbitration.

By: Patrick Ouellette, ALR Senior Editor, 2021

Moses H. Cone Memorial Hospital v. Mercury Construction Corp. has been one of the most widely used and potent cases for arbitration since it was decided by the Supreme Court in 1983.[1] This case expressed that the legal system favors arbitration, and that where an arbitration agreement contains broad language, any ambiguity about whether a claim must be arbitrated should be resolved in favor of the arbitration.[2] This has lead to arbitration exploding in use, as parties attempting to avoid arbitration are frequently funneled back to arbitration using the reasoning from Moses H. Cone Memorial Hospital.

However, a case that was recently decided in the second circuit has shown that the ruling in Moses H. Cone Memorial Hospital, while expansive, is not necessarily a catchall. In Cooper v. Ruane Cunniff & Goldfarb Inc., the second circuit reversed a decision from the district court, saying that a dispute over the employee profit-sharing account was outside the purview of arbitration agreement.[3] The facts of the case are as follows: Cooper is an employee with DST Systems, Inc. (“DST”), a company that has an employee profit sharing account with a third party supplier, Ruane, Cunniff & Goldfarb, Inc. (“Ruane”). For his employment with DST, Cooper signed an employment agreement with DST, which included an arbitration agreement. During Cooper’s employment, Ruane invested a large portion of the profit sharing account into a single stock. The stock lost a significant amount of money, greatly reducing the value of the profit-sharing account. Cooper brought a putative class action against Ruane, who looked to avoid by compelling arbitration based on the nature of the dispute being related to Cooper’s employment.

The district court ruled that the arbitration was appropriate due to equitable estoppel doctrine. The district court reasoned that the dispute was related to Cooper’s employment at DST. However, the second circuit reversed, stating that the employment agreement does not pertain to Ruane’s handling of the profit sharing account.[4] Although the arbitration agreement covered any legal claims “arising out of or relating to employment,” the second circuit ruled that there must be some sort of direct relationship between the parties who signed the arbitration agreement.[5]

The implications of this case can be very interesting for arbitration in the future. While this case is certainly outside the normal course of arbitration agreements, it still shows that there is a limit to the broad power of Moses H. Cone. I believe that the court correctly ruled to reverse the district court decision. Similar to the second circuit, I believe that if there was not a limit placed on the broad mandate to arbitrate, an arbitration agreement could govern any dispute that occurs between an either party that signs the agreement and a third party.

[1] Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24 (1983)

[2] Id.

[3] Cooper v. Ruane Cunniff & Goldfarb Inc., 990 F.3d 173, 175 (2d Cir 2021)

[4] Id. at 185

[5] Id. at 184

ARBITRATION CASES WITH UNEXPECTED OUTCOMES.

By: Kyle Yager, ALR Senior Editor, 2021

Arbitration is one of the most commonly used forms of alternate dispute resolution in the U.S.[1] However, despite its commonality, some of the developed rules surrounding arbitration are rather unexpected. Accordingly, I have provided a short list briefly detailing some of the most unusual rulings from arbitration cases in the U.S.

First, in Dealer Computer Servs. v. Michael Motor Co., the Fifth Circuit Court of Appeals held that parties must preserve any basis for vacatur by objecting during the arbitration proceedings.[2] Essentially, the court held that a party interested in appealing an arbitral award based on arbitrator bias must first inform the arbitrator herself that they believe she is biased.[3] This certainly creates somewhat of a Catch-22 for arbitration parties who are concerned about bias of the arbitrator.

Second, in KPMG LLP v. Cocchi, the Supreme Court of the United States (“SCOTUS”) held that when a dispute presents some arbitrable claims and some nonarbitrable claims, the arbitrable claims must be arbitrated even if the result will lead to piecemeal litigation.[4] In its per curiam decision, SCOTUS reconciled the issue presented with the Federal Arbitration Act (the “Act”).[5] SCOTUS explained that “when a complaint contains both arbitrable and nonarbitrable claims, the Act requires courts to ‘compel arbitration of pendent arbitrable claims when one of the parties files a motion to compel, even where the result would be the possibly inefficient maintenance of separate proceedings in different forums.’”[6]

Lastly, in Buckeye Check Cashing, Inc. v. Cardegna, SCOTUS held that an arbitration clause is severable from the rest of the contract. [7] In so doing, SCOTUS explained that an arbitration clause in an unenforceable contract must, itself, be enforced unless the challenging party challenges the arbitration clause itself.[8] SCOTUS continued its analysis by explaining that, because the challenge was brought against the contract at large and not the arbitration clause itself, the arbitrator was the real decision making authority on the issue.[9]

These three cases represent some of the more surprising rulings in arbitration case law. Sometimes what may seem intuitive in arbitration is actually quite the opposite. Notably, this is not a comprehensive list, nor based on any sort of data set, and there are certainly many more unconventional results in arbitration cases throughout the U.S.

[1]. See Tala Esmaili & Krystyna Blokhina Gilkis, Alternative Dispute Resolution, Cornell Law School (June 8, 2017), https://www.law.cornell.edu/wex/alternative_dispute_resolution.

[2]. Dealer Computer Servs. v. Michael Motor Co., 485 Fed. Appx. 724, 727 (5th Cir. 2012).

[3]. See id.

[4]. See KPMG LLP v. Cocchi, 565 U.S. 18, 22 (2011).

[5]. See id. at 19.

[6]. Id. at 22.

[7]. Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445 (2006).

[8]. Id. at 445–446.

[9]. Id. at 446

POSTMATES ABANDONS APPEALS IN COURIER MASS ARBITRATION CASES.

By: Patrick Brogan, ALR Senior Editor, 2021

In April 2021, Postmates Inc., dropped appeals in the Ninth and Seventh Circuit Courts of Appeals that attempted to fight off thousands of arbitration demands filed by the company’s contracted couriers.

Postmates, founded in 2011, offers its customers on-demand delivery of food, groceries, and other goods from restaurants and retailers.[1] Orders are placed online or via mobile application and delivered directly to consumers by Postmates couriers.

Postmates’ couriers have accused Postmates of improperly classifying them as independent contractors, rather than employees, to deny the couriers of employment benefits. Upon working for Postmates, couriers agree to resolve all job-related disputes with Postmates in arbitration. Accordingly, over 10,000 couriers filed arbitration demands against Postmates in a strategic mass arbitration campaign. Under the California state law known as SB 707, the company is responsible to pay the fees and costs of arbitration.[2]

In an attempt to avoid the payment of these arbitration expenses, Postmates filed a motion in district court to strike down SB 707. Judge Philip Gutierrez denied Postmates’ motion and ruled that the California state law is not preempted by the Federal Arbitration Act and does not violate either the federal or state constitutions.[3] In denying Postmates’ motion, Judge Guitierrez ordered Postmates to pay the fees and costs of arbitration to the American Arbitration Association (AAA).

In its next attempt to avoid payment of arbitration expenses, Postmates pointed to the class action waiver in its contracts with couriers. In an appeal of a motion to compel arbitration of the first wave of courier demands, Postmates argued that the mass arbitration campaign violated the class action waiver. The Ninth Circuit Court of Appeals held that the issue of breach of contract was for an arbitrator, not the court, to decide.[4]

While many may have expected Postmates to appeal the Ninth Circuit’s decision, Postmates business filed motions for voluntary dismissal in the Ninth and Seventh Circuits. This decision may open the door for the arbitration cases to move forward, though it may also signal that the sides have or will agree to a settlement.

The case is an interesting one to follow as the debate over categorization of gig-economy workers continues. Undoubtedly, companies in Silicon Valley will keep a close eye on the progress of arbitration claims brought en masse by independent contractors. One of those companies particularly interested in this case is Uber. In December 2020, Uber Technologies completed its acquisition of Postmates for $2.65 billion to strengthen its delivery of food, groceries, and other goods to customers.[5]

[1] See About Us (Apr. 9, 2021) https://postmates.com/about.

[2] See 2019 California Senate Bill No. 707.

[3] Postmates Inc. v 10,356 Individuals, CV202783PSGJEMX, 2020 WL 1908302 (CD Cal Apr. 15, 2020).

[4] Adams v Postmates, Inc., 823 Fed Appx 535, 536 (9th Cir 2020).

[5] See Uber Completes Acquisition of Postmates (Dec. 1, 2020) https://investor.uber.com/news-events/news/press-release-details/2020/Uber-Completes-Acquisition-of-Postmates/default.aspx#:~:text=SAN%20FRANCISCO%2D%2D(BUSINESS%20WIRE,process%20of%20integrating%20U.S.%20operations.

Novel Issues in Canadian Labour Arbitration Related to COVID-19.

Author: Professor Richard Bales, https://www.onu.edu/directory/richard-bales

Novel Issues in Canadian Labour Arbitration Related to COVID-19

Abstract: The COVID-19 pandemic of 2020-21 changed working conditions for millions of Canadians quickly and dramatically. Employers responded by requiring employees to quarantine, implementing workplace COVID policies, disciplining employees who violated those policies, changing work schedules, cancelling leaves or vacations, and furloughing or laying off employees. Unions have challenged many of these actions, raising a variety of novel issues that are now being resolved through labour arbitration. This article surveys those labour arbitration awards.

Read the full article here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3823163

Rick Bales: ONU College of Law (visiting at Peking School of Transnational Law – Shenzhen, China 2020-21) Web bio,  Email, SSRN,  LinkedIn

Arbitration’s Role in Debt Collection.

By: Patrick Ouellette, ALR Senior Editor, 2021

Based on the ever-increasing popularity of the arbitration in the American legal system, more and more contracts are being written to include mandatory arbitration agreements. This has come to include many lender agreements, in both commercial and consumer debt. Since these contracts are including arbitration agreements, it is important to examine the effect that arbitration can have on the debt collection industry.

Debt collection can include either a debt between the original borrower and the original lender, or an obligation between the original borrower and a third party that has purchased the right to the debt from the original borrower. The third party assumes the debt that the borrower owes, and, as such, is governed by the terms of the original contract. This means that if the original contract has a mandatory arbitration agreement, the third party must arbitrate its claims. Arbitration is used in debt collection when a borrower falls behind on the required payments. An arbitrator will hear the facts of the case, render a decision, and then a court will confirm the decision of the arbitrator.[1] An arbitrator’s decision can lead to such actions as garnishment of wages of a delinquent borrower.[2]

Although the arbitration cases can seem like an open and shut case for the lender, arbitration can actually be used as a defense for a borrower who is looking for options to lower their payments.[3] As it was mentioned earlier in this post, the arbitration agreements in most contracts are mandatory. This means that the borrower can force the lender to arbitrate the late payments. Most arbitration agreements cap the amount of the arbitrator’s fees that the borrower has to pay at $250, with the lending party forced to cover the rest of the expenses.[4] If the expenses are such that trying the case in front of the arbitrator would be unprofitable, the lender may just forgive the expense rather than trying to collect. Additionally, the borrowing party may decide to represent themselves pro se, which is much cheaper than hiring an attorney to represent them, which the lending party must do based on the volume of claims they must litigate. This allows for the borrowing party to drag on the proceeding to run up the costs of the arbitration, to further make it unprofitable to collect.

Even with the possibility that the borrower can manipulate the system, arbitration is still a positive in debt collection. Arbitration can lead to a reduced price for the borrower, and a satisfactory outcome for the lender when compared to not getting paid at all.

[1] Bill Fay, Debt Arbitration & Negotiation Services, Debt.org, (May 31, 2018) https://www.debt.org/credit/collection-agencies/arbitration/

[2] Id.

[3] Turning the Tables on Debt Buyers—Using Arbitration as a Defense to a Collection Lawsuit, Credit Defense Attorneys, (May 1, 2017) https://www.creditdefenseky.com/2017/05/01/turning-tables-debt-buyers-using-arbitration-defense-collection-lawsuit/

[4] Id.

ARBITRATION CASES EVERY UNITED STATES LAWYER SHOULD KNOW.

By: Kyle Yager, ALR Senior Editor, 2021

Arbitration has become a very popular and very important alternative legal dispute mechanism in the U.S. It plays a significant role in our justice system.[1] Because of this, whether you are a solo practitioner in general practice or in-house counsel for a Fortune 500 company, every lawyer would be better served having a base level understanding of our arbitration system.[2]

In the interest of developing a foundational comprehension of U.S. arbitration, there are three significant cases worth retaining a working understanding of. All three of these cases have played a substantial role in shaping the way arbitration functions in the U.S.

First, in Rent-A-Center, W., Inc. v. Jackson, the Supreme Court of the United States (“SCOTUS”) ruled that a federal court must enforce an agreement to arbitrate absent a challenge to the specific provision containing that agreement.[3] In so doing, the Court reversed the Ninth Circuit Court of Appeals.[4] This case demonstrates how specific you must be in challenging the validity of an arbitration agreement.

Second, in AT&T Mobility LLC v. Concepcion, SCOTUS held that the Federal Arbitration Act (“FAA”) preempts any conflicting state laws.[5] This ruling is a significant decision to keep in mind, because it is in your best interest to reference the FAA before relying on any state law regarding arbitration.[6]

Lastly, in Oxford Health Plans LLC v. Sutter, SCOTUS ruled in firm support of generally enforcing an arbitrator’s ruling.[7] In its analysis, the Court explained that the issue is not “whether the arbitrator construed the parties’ contract correctly, but whether he construed it at all.[8]” The Court further explained that even “grave error” in interpreting the contract is not enough to overturn an arbitrator’s ruling.[9] In sum, this case demonstrates how difficult it is to get an arbitration award vacated.[10]

These three cases are very important because they pervade throughout arbitration matters in the U.S. Notably, this is not a comprehensive list of significant arbitration case rulings to be aware of, but these serve as a good base for understanding the current U.S. arbitration system.

[1]. See Liz Kramer, Five Arbitration Cases You Should Know (Blogiversary Listickle #3), Arbitration Nation (Aug. 24, 2016) https://www.arbitrationnation.com/five-arbitration-cases-you-should-know-blogiversary-listicle-3/.

[2]. See id.

[3]. Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 74 (2010).

[4]. Id. at 76.

[5]. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 352 (2011).

[6]. See Kramer, supra note 1.

[7]. Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 573 (2013).

[8]. Id.

[9]. Id. at 572.

[10]. See Kramer, supra note 1.

 

SUPREME COURT GRANTS CERTIORARI IN ARBITRATION DISCOVERY CASE.

By: Patrick Brogan, ALR Senior Editor, 2021

On March 22, 2021, the U.S. Supreme Court granted certiorari in the case of Servotronics Inc. v. Rolls Royce PLC et al.[1] The plaintiff, Servotronics Inc., an aerospace parts manufacturer headquartered in Western New York, is seeking testimony and documents as discovery from the Boeing Company relating to an arbitration case involving Servotronics and British manufacturer: Rolls-Royce. The arbitration is being held in London and the question at hand is whether a federal court may order discovery of a person or company located in the United States at the request of a party to private international commercial arbitration.

In 2016, a Rolls-Royce engine, mounted in a Boeing 787 Dreamliner, caught fire during a test flight. Rolls-Royce claimed the fire was caused by a malfunctioning engine valve supplied by Servotronics. Rolls-Royce settled its claim with Boeing and later brought an arbitration case against Servotronics in London. During arbitration, Servotronics filed ex parte petitions in two federal district courts requesting issuance of subpoenas ordering testimony from individual Boeing employees and for Boeing to turn over certain documents. Servotronic’s cited 28 U.S.C. § 1782 (“Section 1782”) as its legal basis in its petition to the courts.

Section 1782 grants federal courts the discretion to order entities in their districts to turn over evidence to be used in certain foreign proceedings. The relevant text of the statute reads: “The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal” (emphasis added). [2]

In response to its petitions, Servotronics received two conflicting messages from the Circuit Courts. The Fourth Circuit held that Section 1782 may be used in private foreign or international arbitration.[3] Particularly, the Fourth Circuit pointed to the arbitral body in the case of Servotronics, the Chartered Institute of Arbitrators (CIArb), stating that CIArb was “acting within the authority of the state.”[4] On the other hand, the Seventh Circuit affirmed the lower district court’s denial of Servotronic’s petition.[5] In doing so, the Seventh Circuit held that the phrase “foreign or international tribunal” in Section 1782 does not refer to private commercial arbitration panels, but rather state-sponsored tribunals only.[6]

The Fourth and Seventh circuit courts are not the only appeals courts to weigh in on this issue. The Second[7] and Fifth[8] Circuits have taken positions similar to the Seventh Circuit, holding that reference to foreign or international tribunals in Section 1728 means state-sponsored tribunals. The Sixth Circuit[9], on the other hand, holds similar to the Fourth Circuit in that a private international arbitration panel is a tribunal under Section 1728.

The split among circuits warrants clarity from the Supreme Court. The case will be determined by the Court’s interpretation of the statute’s text, particularly the phrase “foreign or international tribunal.” Further, the Court must consider the role of the American court system in private arbitration, particularly private international arbitration. Finally, the Court’s decision should weigh the potential disparity in granting subpoena power to parties to arbitration conducted abroad, but not here in the United States.

[1] Servotronics, Inc., v. Rolls-Royce PLC, et al. No. 19-1847 (2021).

[2] 28 U.S.C. § 1782(a)

[3] Servotronics, Inc. v. Boeing Co., 954 F.3d 209, 216 (4th Cir. 2020).

[4] Id.

[5] Servotronics, Inc. v. Rolls-Royce, 975 F.3d 689 (7th Cir. 2020).

[6] Id.

[7] NBC v. Bear Stearns, Inc., 165 F.3d 184 (2d Cir. 1999).

[8] Republic of Kazakhstan v. Biedermann International, 168 F.3d 880 (5th Cir. 1999).

[9] In re Application to Obtain Discovery for Use in Foreign Proceedings, 939 F.3d 710, 723 (6th Cir. 2019).

 

How to Deal With Bad Faith in Arbitration

By: Patrick Ouellette, ALR Senior Editor, 2021

Arbitration is a voluntary process. Both parties are required to agree to arbitration in order for an arbitration agreement to be voluntary. Therefore, it stands to reason that parties should approach arbitration with openly and readily. However, in practice, anytime a disagreement becomes adversarial, there is a chance that one of the parties may attempt to stall or derail the proceedings. When this happens, a party is acting in bad faith, or not in the spirit of the agreement. Bad faith can be exhibited through numerous different ways. A party can fail to pay the arbitration fees that this party previously agreed to. The party may attempt to slow proceedings by asking for numerous continuances. Sometimes a party will just not show up to the proceedings when they are scheduled.

Regardless of the bad faith act, arbitration must proceed. However, arbitration faces a problem that courts do not face when a party is acting in bad faith. The courts have a much simpler remedy that arbitration does not have. Courts are able to render a default judgment to the party that has complied with all of their requisite duties.[1] A default judgment is a binding judgment in favor of either party based on failure to take action by the other party. Normally, a party failing to show up to court on the day of the trial will result in the default judgment being rendered.

However, arbitration does not have a default judgment option for the arbitrator. Instead, arbitrators are not allowed to enter judgment purely because a party “failed to respond, appear, or defend.”[2] Instead, an arbitrator must still hear the case, and only make a ruling for a party when that party has met the burden of proof that is required in that case.[3] While this does make the presenting parties job easier, since there is no opposing side cross-examining the information that is being presented, there are still drawbacks. First, the arbitrator may be stricter to a party that is presenting unopposed.[4] Occasionally, the arbitrator may unofficially be forced to act as the other side, asking questions and refuting proof that is put forward by the party that is present.[5] Additionally, the party that was absent may join the proceedings at any time, with no penalty for their absence.[6] They are still entitled to present their evidence to the arbitrator. Finally, parties that do not pay their fees force the party that is following the arbitration agreement to front the costs for the proceeding. [7]Although these fees can be recouped upon judgment being rendered by the arbitrator, this still requires a greater sum of money to be laid out prior to judgment, which could mean greater financial risk if a party proves insolvent.

Arbitration needs a system to penalize parties that attempt to stall arbitration proceedings in an effort to drag on proceedings. Otherwise, arbitration can expect more bad actors to continue to slow down a process that has gained popularity due to the expediency at which it can resolve disputes.

[1] Fed R. Civ. P. 55

[2] National Arbitration Forum Code of Procedure R. 36(e)

[3] Ted Frank, The Absent Defendant: Arbitration vs. Court, available at https://www.overlawyered.com/2008/06/the-absent-defendant-arbitration-vs-court/

[4] Default Procedure In Arbitration Proceedings Under the American Arbitration Association Rules, available at https://www.stimmel-law.com/en/articles/default-procedure-arbitration-proceedings-under-american-arbitration-association-rules

[5] Id.

[6] Id.

[7] Id.

Fourth Circuit refuses to vacate arbitration award Despite claims of Arbitrator’s manifest disregard of law and deprivation of a fair hearing.

By: Patrick Brogan, ALR Senior Editor, 2021

In 2016, David Balch closed a large government contract on behalf of his employer: Oracle Corp. Shortly thereafter, Balch retired and demanded Oracle pay Balch the remaining bonus compensation, resulting from the government contract, in accordance with Balch’s compensation contract with Oracle. Balch claims that the amount Oracle paid him was less than he believed he was owed under the compensation contract. The compensation contract did not contain language capping the amount of bonus compensation Balch could be eligible to receive. Oracle refused to pay Balch any additional bonus compensation.

Balch filed a demand for arbitration against Oracle. He claimed that he was due the bonus compensation under the terms of both the compensation contract and the Maryland Wage Payment and Collection Law (“MWPCL”). The arbitrator ruled that Balch was not owed any additional compensation. Specifically, the arbitrator determined that the compensation contract allowed for Oracle to correct any “Administrative Errors” in the contract at any time and that Oracle not including a cap on Balch’s bonus compensation was an “Administrative Error.”

Balch petitioned to vacate the award and the matter was removed to the District of Maryland. There, Balch argued that the arbitrator denied Balch a fundamentally fair hearing by ignoring the essence of the compensation contract. In addition, Balch argued that the arbitrator manifestly disregarded the MWPCL.

The district court denied Balch’s petition to vacate the award.[1] With regard to the arbitrator ignoring the essence of the compensation contract, the district court ruled that “there was undisputed evidence presented that the failure to insert a cap into the plan was an ‘Administrative Error.’” Further, in ruling that the arbitrator afforded Balch a full and fair hearing, the court pointed to the arbitrator’s offering both Balch and Oracle the opportunity to conduct discovery, present evidence and make oral arguments. Finally, the district court ruled that the arbitrator did not manifestly disregard the MWPCL, but instead “identified and utilized controlling legal principles to analyze Balch’s claim.”

In reviewing the district court’s decision, the Fourth Circuit cited a strong presumption in favor of confirming the award.[2] Further, the court’s review was “limited to determin[ing] whether the arbitrators did the job they were told to do —not whether they did it well, or correctly, or reasonably, but simply whether they did it.”[3] After stating the appropriate standard for reviewing ruling regarding the vacatur of an arbitration award, the appeals court affirmed the district court’s decision to deny vacatur of the arbitration award.[4] In doing so, the court exemplified the presumption for courts to rule in favor of confirming arbitration awards, as well as the high bar required to overcome a claim of manifest disregard of law on the part of an arbitrator.

[1] See Balch v. Oracle Corp., No. 1:19-cv-01353 (D. Md. Nov. 15, 2019).

[2] See Williamson Farm v. Diversified Crop Ins. Servs., 917 F.3d 247, 253 (4th Cir. 2019).

[3] See Three S Del., Inc. v. DataQuick Info Sys., 492 F.3d 520, 527 (4th Cir. 2007).

[4] See Balch v. Oracle Corp., No. 19-2433 (4th Cir. Feb. 17, 2021).

THE NEW INTERNATIONAL CHAMBER OF COMMERCE ARBITRATION RULES

By: Kyle Yager, ALR Senior Editor, 2021

The International Chamber of Commerce (“ICC”) announced the introduction of its new arbitration rules on December 1, 2020.[1] The new rules went into effect on January 1, 2021 and apply to any cases filed from that date onward.[2]

The ICC is a leading international arbitration institution.[3] The ICC is the largest and most diverse business organization on the planet, with member companies spanning over 100 countries.[4] The ICC’s main functions include setting rules, resolving disputes, and advocating policy.[5] Through its dispute resolution role, the ICC’s services have many forms, but ICC arbitration is the most popular.[6]

The ICC’s new rules mark the second major arbitral institution to update their arbitration rules since the emergence of COVID-19.[7] The London Court of International Arbitration was the first, as they introduced new rules in October 2020.[8]

The ICC’s rule update is aimed at addressing the rapidly changing landscape of international arbitration.[9] In effect, the rules have included the following changes: extending scope for consolidation, permitting joinder of additional parties after constitution of the tribunal, and increasing the opt-out threshold for expedited arbitrations.[10] More broadly, the new rules have focused on efficiency, emphasized compliance with due process, provided new measures in an effort to prevent conflicts of interest, renewed their commitment to accountability, and embraced virtual arbitration.[11] Also, notably, the new rules have enacted “green arbitration.”[12] This initiative is designed in support of fighting climate change as it takes steps towards a more climate friendly approach in travelling and large hard copy filings.[13]

The 2021 Rules make significant improvements and take important steps toward the new age of arbitration. They introduce important aspects that “further modernize and bolster ‘efficiency, flexibility and transparency’, demonstrated notably by the new provisions pertaining to consolidation and joinder, party representation and disclosure of third party funding.”[14] The new rules seem to be leading international arbitral practices in the right direction; time will tell on their efficacy and if more expansive changes are needed.

[1]. See Michael Polkinghorne et al., New 2021 ICC Arbitration Rules, White & Case LLP (Dec. 7, 2020), https://www.whitecase.com/publications/alert/new-2021-icc-arbitration-rules.

[2]. Id.

[3]. See Aceris Law LLC, ICC Arbitration, Aceris Law LLC (May 12, 2020), https://www.acerislaw.com/icc-arbitration/.

[4]. Id.

[5]. Id.

[6]. Id.

[7]. Chiraag Shah et al., The New ICC Arbitration Rules, Morrison & Foerster LLP (Jan. 12, 2021), https://www.mofo.com/resources/insights/210113-new-icc-arbitration-rules.html.

[8]. Id.

[9]. Id.

[10]. See id.

[11]. See Polkinghorne, supra note 1.

[12]. Id.

[13]. See Shah, supra note 7.

[14]. Polkinghorne, supra note 1.