Kingsbridge Capital Advisors v. AlixPartners: What Confidentiality in Arbitration?
Just a few weeks ago, an arbitral award made headlines in the German press: “Advisors in Märklin deal to pay multi-million euro fine”, “Märklin: advisors to pay damages”, “Märklin fallout: Former owner awarded $18.7 million in judgment against consultant”, to name but a few examples. According to the newspapers, the US-based consulting firm AlixPartners was declared liable for damages for giving wrongful advice to the financial investor Kingsbridge Capital Advisors with regard to the takeover of the German model railroad manufacturer Märklin in 2006. It is said that an arbitral tribunal awarded €14m in damages to Kingsbridge because of irregularities in the due diligence fo [...]
A primer on pathological arbitration clauses in Swiss law
By Matthias Scherer and Sam Moss
In a recent decision issued on 7 November 2011 on a request for annulment of a partial award on jurisdiction rendered by the Court of Arbitration for Sport (“TAS”), the Swiss Supreme Court recalled and applied its previous jurisprudence on the interpretation of pathological arbitration clauses (Case 4A_246/2011).
The case arose out of a contract between a football club and an agent relating to the transfer of a player. The contract contained a dispute resolution clause which provided that “[t]he competent instance in case of a dispute concerning this Agreement is the FIFA Commission, or the UEFA Commission, which will have to decide the dispute that cou [...]
The Unavoidability of Uncertainty: One Lesson from the Recent U.S. Court Ruling in Argentina v. BG Group
It has become fashionable in recent years, each time an ICSID annulment decision is released that takes issue with the procedures or reasoning of an ICSID tribunal, for commentators to bemoan the lack of certainty, predictability and finality that this reflects in the ICSID system for adjudicating investment treaty disputes between investors and host States. Some commentators urge a return to greater use of ad hoc UNCITRAL arbitration, or arbitration before institutions other than ICSID, to avoid the perceived vagaries of the ICSID annulment process. Yet commentators often forget that these alternatives carry their own risks of uncertainty, inherent in the national court review process tha [...]
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 [...]
Mass claims and the distinction between jurisdiction and admissibility (Part II)
With the release of the Dissenting Opinion in Abaclat v. Agentina, we now have the benefit of a forceful critique of the majority’s decision that the Abaclat Tribunal has jurisdiction to hear the claims of over 60,000 Italian investors against Argentina under the ICSID Convention and the Argentina-Italy BIT. Professor Georges Abi-Saab’s Dissenting Opinion (the Dissent) raises a number of objections to the majority’s decision. Most importantly, it states that the Tribunal “faces two glaringly insuperable obstacles that prevent it from taking jurisdiction”. First, the investors’ security entitlements are not protected investments, in particular, because the investments were n [...]
Jivraj v Hashwani: A Pro-Choice, Corrective Ruling from the Supreme Court
In this post, we will first deal briefly with the facts in the case of Jivraj v Hashwani and the findings of the first instance judge and the Court of Appeal, which by now would be very familiar to anyone reading this blog. We will then look at the Supreme Court’s judgment ([2011] UKSC 40), in particular its observations on the “genuine occupational requirement” (GOR) issue (discussed below) which robustly support the broad autonomy of the parties inherent in consensual arbitration to appoint decision makers with an understanding of their legal systems, social traditions and commercial background.
The dispute arose out of an arbitration clause in a joint venture agreement which provided for [...]
