NLRB Opens a New Chapter in Class Arbitration Saga
The United States Supreme Court’s decision in AT&T v. Concepcion last April appeared to signal the demise of class arbitration in the United States. That decision upheld a consumer contract arbitration agreement that waived the consumer’s right to initiate a class action lawsuit or arbitration. In its recent D.R. Hutton v. Cuda decision (Case 12-CA-25764), however, the National Labor Relations Board (the “Board”) has opened a new chapter in the class arbitration saga by ruling that certain class waivers in employee arbitration agreements violate the National Labor Relations Act (“NLRA”). This ruling will almost certainly be appealed to a federal court of appeals and may reach [...]
Route 66: Diverting the Italian Torpedo
West Tankers Inc v Allianz SpA v Generali Assicurazione Generali SpA [2012] EWCA Civ 27
On 24 January 2012, London’s status as a pro-arbitration forum was given a major boost when the Court of Appeal handed down judgment on the latest chapter of the West Tankers dispute. Upholding an earlier Commercial Court decision of 6 April 2011, the Court of Appeal agreed that a declaratory arbitral award could be enforced as a judgment of the English Court under section 66 of the Arbitration Act 1996 (the “Arbitration Act”). The intended effect was to allow West Tankers to establish the primacy of the declaratory award over any subsequent inconsistent judgement of the Italian Courts thereby po [...]
Arbitration Agreements Versus Agency Deference
When the strong federal policy in favor of honoring arbitration agreements in the U.S. comes into conflict with another strong legal principle, which one should come out on top? The United States Court of Appeals for the Ninth Circuit recently illustrated this tension in Kolev v. Euromotors West/The Auto Gallery, 658 F.3d 1024, holding that a mandatory arbitration agreement in an auto sales contract was invalid because a federal agency’s regulation supposedly barred it. This decision demonstrates the danger of excessive deference to agency rules, which can limit the enforcement of arbitration agreements on dubious legal grounds.
The plaintiff, Diana Kolev, bought a used Porsche from an a [...]
Bribery and an Arbitrator’s Task
Adjudicating contract disputes where it is alleged that the contract has been tainted by bribery, either in its procurement or in its performance, presents difficult issues for arbitrators, as well as for counsel. While the arbitrability of disputes involving allegations of bribery is generally no longer in doubt, a tribunal will still confront a number of issues when adjudicating such claims.
This is particularly true where the allegations of bribery are themselves in dispute, as well as where the parties have not raised any such allegation, but the facts and circumstances suggest that bribery has tainted the contract underlying the dispute. It is now well-settled that any such contract s [...]
Implied Waiver Of the Right to Arbitrate
In February 2011, the United States Supreme Court granted certiorari in Stok & Associates, P.A., v. Citibank, N.A, (No. 10-514). The question presented was whether, under the Federal Arbitration Act (“FAA”), a party should be “required to demonstrate prejudice after the opposing party waived its contractual right to arbitrate by participating in litigation, in order for such waiver to be binding and irrevocable” – an issue on which the United States Courts of Appeals are divided. However, the parties settled their dispute before any merits briefs had been filed and the Court accordingly dismissed the case on June 2, 2011.
Stok and Associates (“Stok”) is a small Florida law fi [...]
U.S. Court of Appeals Illustrates Obsolescence of Law that Allows Court to Consider Timeliness Challenge to Arbitrable Claim
On March 22, the United States Court of Appeals for the Second Circuit held in Bechtel do Brasil Construções Ltda. v. UEG Araucária Ltda., 638 F.3d 150, that the question whether a claim subject to arbitration was time-barred was for the arbitrator, not the district court, to decide, notwithstanding a New York state law that permits an arbitral party to assert a limitations defense in court. Above all, the Bechtel decision illustrates the obsolescence of laws like this New York provision, whose usefulness is highly questionable and whose application is effectively limited to situations where it is unnecessary in the first place.
In 2000, UEG Araucária, a Brazilian energy company, entere [...]
