The first questions to address, perhaps, is why not a female? A fellow colleague of mine, a male, who is active in the international arbitration arena asked me this very question. From a male’s perspective – is there anything that a male arbitrator or even male counsel representing a party could do which the female counterpart could not? Honestly, I cannot think of one thing. Yet, referrals seem – and this is purely based on anecdotal evidence – go more to males than the female counterparts. In fact, after recently attending a conference in Dublin, I overheard one female practitioner saying to another female practitioner, “Women simply do not refer cases to other women.” Are we then the culprits ourselves? It would be rather ironic if the women are contributing to holding women back. I actually can imagine this being the case. There are a few women out there who have worked exhaustingly to build up a reputation landing them in this prestigious male-dominated club and for those of you having appointed female arbitrators or referred cases to a female practitioner, it is likely one of very very few.

This leads back to a former post of mine on this blog, Choosing the Young Buck or the Weathered Veteran, which looked how clients can take the lead in making changes to their bottom line by going outside the standard circle of names. This occurs amongst the female arbitration circle as well. What referrals do go to females, go to the very same core small group of females. It’s a double hit to the rest – females are underrepresented in international arbitration and what does come in may go predominantly to the very same ones. These females presumably have referrals to pass out on occasion – I ask them – do you refer them to females or males? All things being equal of course, would you choose the male? Naturally, these are rhetoric questions and not ones I would expect anyone to have to publicly address, but it would have been interesting to see those statistics.

Clients themselves can help level the playing field for women by also giving equal thought – not just to the young bucks in order to get fresh ideas and truly rein in costs – but also to diversity. Many in-house counsel are women. How many of them are in the position to choose the arbitrator or outside counsel, I do not know as I do not have these statistics, but I wonder whether the “best” candidate is ever female? Women are sufficiently and perhaps even over represented at arbitral institutes. This could imply that the arbitration community is at least comfortable with women administering arbitrations.

There is no easy answer to this concern. Many female attorneys are flocking to conferences, getting on arbitral institute arbitration lists, working hard at firms of all sizes and statures to break into the fold. Therefore, the availability of ambitious, intelligent and experienced female arbitration practitioners exists. It is not a lack of supply and quality candidates that stands in the way. What is then? Is it us, the females ourselves? I certainly do not think there is an active movement against women (and surely not by women themselves) – indeed there are wonderful organizations sprouting up to assist females in networking and growing their careers, including in the arbitration industry. Those key, famous female arbitration practitioners are some of the best mentors to many. I only wonder, when it comes down to providing the actual work and opportunities whether we hesitate to choose a fellow woman. If so, how can we overcome this?

This past spring, I moderated a panel at a joint ABA Section of International Law and Los Angeles Bar Association Conference on International Arbitration. This panel provided a view from the client on choosing international arbitration versus going to the local courts. In other words, the idea was to hear what the client really thought. Among the panelists were representatives from a large, well known international food company who provided us practitioners with some candid thoughts to chew on. One of the representatives made it very clear that rarely would they choose international arbitration. Although a past preference, the process has become too long and too expensive. Trusting attorneys to reign in overburdened arbitrators appeared to be one of the reasons given. Another was that it simply made more sense to them to go to a country (I believe the example given was the Ukraine) and take their chances on their court system. With a judgment from the local courts, the client felt there would be a better chance of getting their judgment enforced than with an arbitral award. It would likely not take as long and there would not be a window for, let’s just say, interesting behind the scene events, to happen which prevent an otherwise sound arbitral award from being enforced.

I know I was not alone in being a little surprised to hear this and as an international arbitration practitioner, a little disheartened. However, it appears that predicting what a client wants, as a whole, would be fool hearted. Why? No two clients think alike.

This past week, as I enjoyed Dublin while attending the ABA International Law Section’s Fall Meeting, I enjoyed listening to a panel about mining in Africa. From joint ventures to dispute resolution mechanisms, the panel addressed the entire gambit. This included giving us the privilege of hearing from a client – a large, multinational mining company. The thoughts I heard were – in Africa, we are definitely not risking the courts, we will choose for international arbitration. It sounded like the complete opposite of the thoughts expressed at the panel in Los Angeles.

OK – so hope remains. Perhaps it is the region, perhaps it is the industry, perhaps it is simply the personal preference of the General Counsel for a client that influences which path is chosen. But international arbitration’s is alive and well. That being said, I cannot deny the increasing interest in international litigation over international arbitration. It is not a blank – this is always better over this. Instead, it is something to consider with every single jurisdiction. The panel I moderated in Dublin addressed exactly this issue – a client wanted to expand and the panelists from varying jurisdictions advised on whether litigation or arbitration would be preferred and why. That would make for a fascinating in-house counsel handbook.

Maintenance refers to the funding or providing of financial assistance to a holder of a claim, which allows the claim to be legally pursued, when the funder or provider of financial assistance holds no connection or valid interest in the claim itself. Champerty takes it one step further by adding that this funder or financial provider has a direct financial interest in the outcome of the claim. Here the funder provides the money in exchange for a portion of the damages should the claim prevail. The reasons surrounding why these acts were considered morally and ethically against public policy such as to make them illegal can best be described by the following quotes.

In 1843, Jeremy Bentham was quoted when describing the circumstances surrounding the origination of maintenance and champerty. He stated, “A mischief, in those times it seems but too common, though a mischief not to be cured by such laws, was, that a man would buy a weak claim, in hopes that power might convert it into a strong one, and that the sword of a baron, stalking into court with a rabble of retainers at his feet, might strike terror into the eyes of a judge upon the bench. At present, what cares an English judge for the swords of a hundred barons? Neither fearing nor hoping, hating nor loving, the judge of our days is ready with equal phlegm to administer, upon all occasions, that system, whatever it be, of justice or injustice, which the law has put into his hands.”

This description of the doctrine’s birth circumstances was later echoed in 1908 in the case of British Cash and Parcel Conveyors v Lamson Store Service Co, “The truth of the matter is that the common law doctrine of maintenance took its origin several centuries ago and was formulated by text-writers and defined by legal decisions in such a way as to indicate plainly the views entertained on the subject by the courts of those days. But these decisions were based on the notions then existing as to public policy and the proper mode of conducting legal proceedings. These notions have long since passed away, and it is indisputable that the old common law of maintenance is to a large extent obsolete.” The final sentence in British Cash reveals already the changing landscape of this public policy, reflecting the more modern perspective.

Therefore, it is quite clear that very distinct circumstances arising out of times past led to the public policy doctrine of maintenance and champerty. This doctrine resulted in both civil and criminal penalties. However, in modern times the courts grew more relaxed towards this doctrine (as noted in the final sentence quoted above from British Cash).

The next logical question to ask is, does this principle of maintenance and champerty extend to arbitration. With respect to the United Kingdom, the answer appears to be yes.

In arbitration, even though it is a private dispute resolution mechanism which allows parties to avoid some of the constraints encountered when appearing before the courts, there are also several similarities. Arbitrators do consider and decide disputes similar to judges in the national courts. Arbitration, and in particular international arbitration, can involve large amounts of damages, such as is commonly involved before the courts and judges. Moreover, arbitral awards are just as binding as court judgments and have less ability to appeal (at least in the United Kingdom and arguably most other jurisdictions which are parties to the New York Convention of 1958). Despite these evident similarities, the concept of maintenance and champerty and its relationship to arbitration was not clearly decided until 1998.

In the case of Bevan Ashford v Geoff Yeandle, the Vice Chancellor Sir Richard Scott stated prohibition on contingency fees does extend to arbitration, when he said

“Arbitration proceedings are a form of litigation. The lis prosecuted in an arbitration will be a lis that could, had the parties preferred, have been prosecuted in court. The law of champerty has its origins in, and must still be based upon, perceptions of the requirements of public policy. I find it quite impossible to discern any difference between court proceedings in the one hand and arbitration proceedings on the other that would cause contingency fee agreements to offend public policy in the former case but not in the latter. In principle and on authority, the law of champerty ought to apply, in my judgment, to arbitration proceedings as it applies to proceedings in court. If it is contrary to public policy to traffic in causes of action without a sufficient interest to sustain the transaction, what does it matter if the cause of action is to be prosecuted in court or in an arbitration? If it is contrary to public policy for a lawyer engaged to prosecute a cause of action to agree that if the claim fails he will be paid nothing but that if the claim succeeds he will receive higher fee than normal, what difference can it make whether the claim is prosecuted in court or in an arbitration?”

Although the tort and criminal laws pertaining to champerty and maintenance have been abolished in the originating jurisdiction, the principles of common law champerty and maintenance applying to funding agreements remain. They also extend to private dispute resolution methods, such as arbitration. Many other jurisdictions, though, either do not follow these principles of maintenance and champerty or do not consider a private dispute resolution mechanism subject to principles which bind parties in a court setting.

In discussing this very situation with representatives of countries in Latin America, including Brazil, I received mixed reports. First, they had not encountered a market for third party funding in their respective jurisdictions and guessed that it would be unlikely that one would thrive due to the instability of the region. Another pointed out, though, that with respect to international arbitration, it would not be a problem as this is completely private. However, at least one other attorney felt contrary. The attitude seemed to be – if it is not specifically allowed per law, assume it is not allowed.

In contrast, in the United States there is variation amongst all the fifty states, with some still clinging to maintenance and champerty and others not in varying degrees. Some argue that third party funding should not thrive in the United States and others openly welcome it, within certain constraints…I would be interested in hearing from the readers how their respective jurisdictions would view third party funding in litigation or international arbitration. Is there a distinction between the public dispute resolution mechanism (ie the court systems) and the private (ie international arbitration)?

How does it work? A fund is created which operates to finance a dispute proceeding. This includes covering the attorneys’ fees and the tribunal’s fees. In exchange, the fund shares a portion of the awarded damages, but also takes on the risk that no damages are awarded. It is possible that the third party funder will also cover the costs of the winning party, which in large part may depend on the agreement involved and the norm of the applicable jurisdiction. In the United Kingdom, for example, the norm is that the loser pays; however, in the United States the loser only pays if a statute indicates such, which is definitely not the norm. This may or may not control the terms of the agreement with the funder, but is interesting nonetheless.

Could this be the answer to greater access to justice? Possibly, but not all claims are created equal. And, when looking at it from an investor’s standpoint, not all are worth the risk. Therefore, a significant amount of due diligence may be required early on in the process. The funders are going to want to know the ins and outs of the claim – whatever is available. This means already knowing and planning the entire case strategy – which witnesses are available and what can they say? What documentation exists? How likely is it that this claim will succeed on the merits? And, if it does, (and arguably most importantly) what do the damages look like? This often means bringing in valuation experts to already access the quantum stage. Often funders are looking for a claim with a likely success rate of 60% or even more.

In other words, a deep, thorough look into the party’s claim and its likelihood of success may already happen very early on –perhaps even before the request for arbitration is filed. Of course, evaluating and researching a case is always an important part of an attorney’s process from the start, but this may require already being “prepared” for presenting everything to the third party funder, right from the start. Moreover, the funders will consider the reliability of the damages being collected. What is the asset situation of the other party and how does their history on paying up look? In other words, what does the other party’s credit look like?

It is easy to already see what kinds of concerns and considerations could arise. Not only ethically but just the practical aspects. Timing may be very important when bringing a claim and not knowing about financing the claim may delay the timing. On the other hand, of course, this could provide a very appealing alternative to a client bearing the entire financial risk. There are presumably many worthwhile claims that may not go pursued in part or even entirely due to the funding limitations.
To date, my experience has been only with third party funders as they have traditionally developed – those focusing on claims with large damages (large enough to provide them with a significant return after paying the costs of the proceedings). There are often claims from parties who neither have the cash flow to handle a full proceeding (despite a great likelihood of success), but whose prospective damages, although small to BigLaw or third party funders, are nevertheless quite a large sum from the perspective of the client – this then begs the questions, does it matter? Would the costs of the attorneys make a smaller claim simply not economically smart anyhow? Not always, with the recent rise in boutique law firms offering more competitive rates and flexible billing structures, smaller claims which are simply too small for BigLaw, have a viable chance at pursing a claim with a price tag more appropriate for their claim.

Are there also funders popping up who may also be in a position to target these smaller clients? From the financial risk-return-rewards and economic reality of pooling the funds to finance the funder itself, is it possible? I welcome comments and input on this.

Recently, a significant amount of unrest has occurred in Egypt in which traditionally the leading arbitral institute for the Middle East resides. The Cairo Regional Centre for International Arbitration (the Cairo Centre) has enjoyed being the leading international arbitration in the Middle East region for several years; however, the regional unrest may dissuade international businesses from going to Egypt for its international arbitrations. In its wake, though, another institution has planted its own roots and is working hard, and successfully so, to challenge the Cairo Centre as the leading international arbitration centre.

The Dubai International Arbitration Centre (DIAC) is conveniently located in one of the more modern business capitals of the Middle East. Already a region with a highly concentrated ex-pat community and several foreign businesses with joint venture locations, it is a location which can easily accommodate arbitrations amongst international parties. It has access to modern facilities and an international airport.

In 1965, the Dubai Chamber of Commerce and Industry was created as a non-profit entity representing the interests of those businesses located in Dubai. Stemming from this, in 1994, came the DIAC. In the past few years, the DIAC has worked rigorously to increase the breadth of backgrounds represented on its Panel of Arbitrators and overall global awareness of its services. This past March, the DIAC hosted its fifth Arbitration Dialogue in Soeul, Korea – tying on its event to the 14th Annual IBA International Arbitration Day. This forum provided an opportunity for leading practitioners and arbitrators worldwide to discuss trends in international arbitration and the growing role of the DIAC in the Middle East region. This Arbitration Dialogue followed two previous internationally held dialogues, one in London and the other in Paris. It has yet another planned for later this year, again in conjunction with an Annual IBA International Arbitration Day; this one to be held on October 30 – November 4 in its own backyard, Dubai.

During the Arbitration Dialogue in Soeul, Korea, the Dubai Centre reported receiving 431 arbitration cases in the year 2010; this represents a 47% increase from 2009. That is a remarkable jump and may indicate its growing importance in the region.

The DIAC may be one to watch for in the coming years.

Having worked for most of my career in The Netherlands before returning to my home country, the USA, I was a little surprised by what I noted and what I heard. Yes, I know about party appointed arbitrators. No, I did not realize that they could be so “non-neutral” as to be able to actively ensure the side of the party appointing is adequately considered and understood. Is that truly impartial and fair? Yes, this debate can be heard elsewhere and I have located a couple quality articles on the topic. Yet, my shock remains. I understand that in theory, if both parties have someone at least sympathetic to their culture, side, etc. then that may provide a balanced and fair panel. The party-appointed party may ensure that culture mistakes in communication are understood or approaches appreciated.

The question I ask myself should this be allowed? What concerns me is when you can actually tell who appointed the arbitrator by the questions they ask. Is that not taking it too far? Is the actual practice failing to reflect the fairness of the theory?

I have not witnessed this one-sided practice – at least not to such an obvious extent. Everyone knows that with a three arbitrator panel, the third arbitrator typically comes from a neutral country. This is completely understandable as to ensure no bias towards a certain culture, style or system exist. However, why would anyone want any member of the panel almost advocating for the other party – even if allegedly they have someone doing that for their own side? How can the parties ensure that the arbitrator they appointed will advocate to the same degree as the other side?

The concept of party appointed arbitrator – i.e. a non-neutral arbitrator so-to-speak is not universal and certainly not everyone would accept such a notion. Moreover, not every arbitrator agrees with or supports this notion. Therefore, they may either avoid any quasi-advocating activity or simply do it to a lesser degree because their personal views on it differ from the other party-appointed arbitrator. Then is the process truly fair? Some promote the practice of selecting an arbitrator who perceives your side favorably (or at least you believe it does) as one of the perks of international arbitration – the ability to shop around for the arbitrator. True, but shopping around for the most qualified arbitrator would remain a perk even if such an arbitrator is not free to ensure that your side is fully heard (versus the other party’s side). All arbitrators should equally ensure they fairly hear the evidence and understand both sides. Advocating a parties’ side – isn’t that the attorneys’ job? What I would recommend to clients is: shop for the RIGHT attorney to advocate your case and the RIGHT arbitrator who will fairly ensure all parties are being heard. If you have the right attorney, your side will be adequately advocated.

If this practice of overtly asking questions, etc to the favor of the party who appointed you continues, however, there is no way to ensure an entirely fair process for the reasons already set out above. It requires all panelists to openly consider every angle of both parties’ side to ensure a fair hearing. Perhaps simply looking to a neutral sole arbitrator is something to consider.

The dispute involves a contract dated back to 1997 between a Swiss company (“ATEL”) and a State-owned network operator in Slovakia (“SEPS”). Pursuant to the contract, ATEL paid a considerable amount of construction costs for a line from Poland to Slovakia which had not yet been constructed. In return it would receive priority access to the line for a non-renewable period of 16 years. Slovakia itself was not a party to the contract and the party actually concluding the contract was SEPS’ predecessor.

This agreement and its application caught the European Commission’s (“EC”) attention on April 10, 2006; three years after Slovakia’s accession date of April 16, 2003. The EC sent a formal notice to Slovakia and a reasoned opinion shortly thereafter. The EC initiated action against Slovakia claiming that pursuant to a Directive (Articles 9(e) and 20(1) of Directive 2003/54), the contract in question was contrary to Slovakia’s obligations. Essentially, the EC argued that the contract granted ATEL discriminatory access to the transmission system involved.

The AG went through a set-by-step analysis considering the application of EU law as well as the Energy Charter Treaty and the applicable BIT, namely the Investment Protection Agreement. After considering the EU Law, the AG did conclude that the contract was discriminatory, but considered whether this discriminatory behavior fell under an allowed exemption.

The AG only briefly discussed the relevancy of the Energy Charter Treaty, rather quickly dismissing its relevance, but spent quite a bit of time interpreting the applicable provisions of the Investment Protection Agreement. In doing so, the AG considered the relationship between this BIT and the EU laws. The relevant treaty provision of the EC (Article 307) was determined to be applicable and the Investment Protection Agreement’s provisions were interpreted in light of its application.

Article 307 EC addresses the relationships between the pre-accession rights of third countries and remedying the “incompatibilities with the EU Treaty to which they might give rise on the other by the virtue of the obligation that Member States have to take all appropriate steps to eliminate incompatibilities between pre-accession agreements and EU obligations.” (See para. 72 AG’s Opinion).

The AG pointed out that Article 307 EC effectively codifies the old international law principle that a “subsequent treaty that conflicts with an earlier one cannot legally affect the rights of a State that is a party only to the earlier treaty.” (See para. 73 AG’s Opinion). By reaching this conclusion, the AG went on to conclude that since the pre-accession treaty rights of Slovakia are not affected by its subsequent accession into the EU, that Slovakia would have a defense against the discrimination claim.

The AG finally concluded, “This may lead to the conclusion that there is an international obligation within the meaning of Article 301(1) EC and that Slovakia cannot force SEPS not to follow the terms of the contract without infringing its obligations under the Investment Protection Agreement. The consequence of this is that such an obligation concluded before the entry into force of the Treaty, cannot be affected by the Treaty, and as such Slovakia cannot be held to be in breach of its obligations under Articles 9 and 20 of Directive 2003/54.” (See para. 107-8 AG’s Opinion).

Ultimately, this is an interesting example of the growing pains that the EU is undergoing as it re-considers the relationship BITs may have within its Member States. This may have addressed a third-party contract, but it also involved a Member States’ BIT obligations versus EC obligations. In this case, the loophole seems to be pre-accession and contracts pre-dated EC obligations.

In the past year or so, many of the influential arbitration rules have undergone close scrutiny to see how well they still reflect current practice and whether revisions are necessary. As others on this blog have already mentioned, many rule changes (such as those pertaining to the influential IBA publications) have already been released and commented upon. The UNCITRAL Arbitration Rules were also already published in 2010, reflecting their first revision since being released in 1976. Key changes included updating the rules to greater reflect technological changes in actual practice, essentially streamlining the arbitrator appointment process. The UNCITRAL Arbitration Rules also explicitly provided for multiple party proceedings and disputes which may arise amongst the parties. One key change resulted in greater powers to the Appointing Authority under the UNCITRAL Arbitration Rules. These are just a few examples of the changes incorporated into the 2010 UNCITRAL Arbitration Rules.

However, the ICC Rules are still being considered and have not yet released their changes. Some of the proposed changes that are being considered involve keeping up with the technological advances as well. This includes possible electronic notifications for parties, online/electronic submissions, and other ways to more efficiently manage the cases. Moreover, more substantive areas are under consideration, including how arbitrators will be appointed, cases involving multiple parties, withdrawal of claims and issues pertaining to consolidation of claims.

In the American Bar Association International Law Sections Spring Meeting (being held from April 5-9, 2001 in Washington D.C.), there will be a program dedicated to considering these types of rule changes. The program will include changes already published to the IBA Rules on the Taking of Evidence and the release of the new IBA Guidelines on the Drafting of International Arbitration Clauses. The program will also consider the changes made to the UNCITRAL Arbitration Rules, providing the chance to find out why some changes were not made in addition to considering those which were made. We will have a chance to hear from a representative of the Permanent Court Arbitration on the UNCITRAL Arbitration Rules and a representative from the ICC on the proposed changes being considered to the ICC Rules. A unique opportunity to compare and contrast these rule changes and consider how well they truly reflect the changes and new trends occurring in international commercial arbitration and possibly even BIT related proceedings. The program is scheduled for Friday April 8, 2011 from 2:30 – 4:00 pm EST. Questions welcome!

This is not a new topic. I find myself often standing amongst professional peers when it comes up. You see it when someone is talking about the lack of female arbitrators. You hear it when someone is once again frustrated over the significant delays occurring in their arbitration proceeding because the arbitrators do not have time to meet or review or consider anything concerning the arbitration for another few months….the lists go on.

As I already alluded to, using the same arbitrators frequently does ensure a “recognized name” is working on your arbitration. It is easy to choose, because you have actually heard of them – no research required. You can feel confident that they could likely quote every important book written on the subject matter which may greatly influence the outcome of your arbitral proceedings. There is definitely confidence in their capabilities, their expertise.

The downside? I would say two are the most obvious: (1) time and, of course, (2) money. As the most sought after, they are likely the busiest as well. They always say “yes” because they truly want to do it, but can they truly do it? An oft-quoted remark when discussing a client’s perspective on using international arbitration is that the costs are simply too high. These costs are too high because proceedings can be dragged out for excessive lengths of time. The arbitrators are too busy. The costs are also too high for the second reason: money. With impressive experience comes a very high price tag.

In large, complex disputes, going to the big, experienced names makes sense. It may be a high profile case because a state is involved or it may simply be over an enormous amount of money. Maybe then it is worth the risk of increased costs due to time delays and large hourly rates.

But, what about all the other times? There are plenty of international arbitration practitioners who are either very willing to transfer their skill set to act as an arbitrator for a significantly smaller hourly rate (than the always chosen names, for example) and a more flexible schedule, or there are those who have done a few arbitrations and could continue to reasonably handle more. These practitioners have the experience. They have worked arbitrations. They have studied the crucial decisions. The benefits of international arbitration are not all lost: it can be a quicker, more cost efficient process. This will depend entirely on flexibility in choosing an arbitrator and the willingness to research and learn of those with the valuable skills and knowledge sought after – but a flexible schedule and reasonable rate.

Maybe the burden falls on those who complain about the costs and delays of international arbitration to expand their list of whom they would consider – or their outside counsel. There exists a temptation to want a certain arbitrator for the sake of claiming you are working on an arbitration with this known name. Maybe that kind of practice should be avoided…
The “young” or newer would-be arbitrators are an eager bunch. They are ready to open their schedules and dedicate themselves to timely, efficiently and skillfully serving as an arbitrator. Consider this pool of talent!

Another option is for these same clients or their counsel to directly ask the arbitrator about their availability. I do not mean the standard – do you have a conflict, are you available and willing, etc. I mean: how many arbitrations do you have actively going on right now? What is your calendar like? If a meeting needed to be held in a month, would you be available? You get the idea.

I know an up and coming arbitrator. He is a friend and a sort of mentor. Once we were considering him as an arbitrator for one of our arbitrations. He gladly passed on his CV, etc., but he also made sure we were aware of his schedule and another large arbitration for which he was also sitting as arbitrator. That is ideal. Yet, not everyone is going to do that or even admit to themselves the reality of their availability. We are a service industry. We say yes to cases; we do not turn them down. So, to those counsel representing the parties, ask the right questions, research outside the box and consider all the possible arbitrators – weathered veteran or young buck – to really find the best fit.

The questions presented before the court were:
“(1)(a) Whether review of an arbitration award for “manifest disregard of the law” or “complete irrationality” remains available after Hall Street Associates L.L.C. v. Mattel, Inc., 552 US 576 (2008), a question that this Court again expressly reserved in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 559 U.S. __, 130 S. Ct. 1758 (2010), and on which there is a clear Circuit conflict; and

(b) If such review is available, may a reviewing court determine whether an award is irrational under the totality of the circumstances (as the district court did here and as the Second Circuit permits), or are awards impregnable unless it is “clear from the record that the arbitrators recognized the applicable law and then ignored it” (as the Ninth Circuit below held).

(2) Whether the Federal Arbitration Act (“FAA”) requires vacatur of an arbitral award issued by arbitrators who failed to disclose material facts bearing on their integrity and their relationships with each other, in violation of the applicable rules governing arbitrations, or (as the Ninth Circuit held) are arbitrators required to disclose only their relationships with the parties and counsel, with the burden to investigate and unearth other material facts falling on the parties”(petition for certiorari as posted on SCOTUSblog, a blog contributed to closely following US Supreme Court decisions).

Manifest disregard is a subject of lengthy academic articles. It has already been frequently discussed on this blog and even some recently last week when discussing the Stolt Nielsen case. However, it remains unclear whether it remains as an option to essentially review the merits of the arbitral award in court. Despite split circuit treatment and a subsequent ambiguous decision in Hall Street Associates LLC v. Mattell, Inc., in which the Supreme Court held that grounds for vacatur are strictly found within the Arbitration Act, the Supreme Court decided against provided further light and clarification on this oft debate topic. Apparently, the Supreme Court, by denying cert, feels that its decision on Hall Street was not vague, but sufficient to settle the long-standing debate.