Introduction

It is a great honor for me to be here at the Working Session of the ICC International Court of Arbitration, and to have the opportunity of sharing with you some thoughts on the ways in which the federal courts in the United States become involved with arbitration. Although arbitration is often referred to as the primary 'alternative' method of dispute resolution, it is a mistake to think that arbitration is sealed off entirely from national judiciaries. It is not. Instead, national judiciaries support, to greater or lesser degrees, the process and outcomes of arbitral proceedings. Thus, while arbitration serves as a substitute for litigation in a national court, those same national court proceedings are an important complement to arbitration. In the time I have, I shall briefly describe how the U.S. courts (which, I believe, are typical in this respect) handle issues relating to arbitration. I will be speaking primarily about the federal courts in the United States, but it should be borne in mind that the state courts also can and do become involved with arbitration. Indeed, the courts of some states, such as New York, are quite experienced in this field.

Courts are no strangers to arbitration. At the outset, there may be a question about whether there is an agreement to arbitrate the subject of the dispute, whether any such agreement is enforceable, and whether the court or the arbitrator is responsible for resolving the former two questions. Next, the parties may need to resort to a court to secure the appointment of the arbitrator or arbitrators, if the agreement is silent or if the appointment process has broken down.1 (That of course would not be necessary if the parties have specified an arbitral institution, such as the ICC International Court of Arbitration, but they do not always take this step.) A court may become involved with a motion to enforce an arbitrator's order for someone to appear and testify in the proceeding.2 If the arbitrators have ordered interim measures, the parties may resort to the courts for enforcement assistance. And finally, once the arbitration has run its course and the arbitrator has issued an award, there may be post-award proceedings in which one side may be seeking either recognition or enforcement of the award and the other side may be seeking vacatur or a refusal to enforce.

As an initial caveat, the cases to which I will be referring do not all relate to international arbitral proceedings. That is because U.S. judges (who work within the common-law tradition in which case law is precedential and an important part of the law) do not tend to confine their research to international cases when issues about arbitration come before them. There has been a rich set of decisions in the broader field of arbitration from both the U.S. Supreme Court and the federal courts of appeals over the last twenty years or so.3 All of them shed light on the attitudes of the courts to arbitration in general, which after all has some common features no matter whether domestic or international, insofar as it is a binding, out-of-court method of dispute resolution. It can be contrasted with mediation, a non-binding option that can be used by itself, in conjunction with arbitration, or in conjunction with court proceedings.4

That said, a look at the Supreme Court decisions reveals that there are at least three, if not four, types of arbitration that come before the courts. Over the years, the most common type has been labor arbitration. For decades, labor unions have agreed to no-strike clauses in collective bargaining agreements, in exchange for a reliable arbitral procedure for the resolution of industrial disputes. Secondly, we have significant experience with domestic commercial arbitration; groups like the American Arbitration Association (AAA), the Financial Industry Regulatory Authority, and countless other industry-specific groups have offered arbitration services for years. A third category, well known in Europe, has exploded in recent years: consumer arbitration. The AAA, for example, now has special rules for consumer arbitration. Demand for those services has grown in the wake of such Supreme Court decisions as CompuCredit Corp. v. Greenwood,5 in which the Court upheld the validity of arbitration agreements between individual consumers and banks that issued credit cards. That decision had the effect of preventing the consumers from suing in court to vindicate their alleged rights under the Credit Repair Organization Act. Another important decision in this line was AT&T Mobility LLC v. Concepcion,6 which found that the FAA [Page92:] preempted a California statute that purported to brand as 'unconscionable' clauses in consumer contracts that waive class arbitration. And of course there is international arbitration, which has a long and distinguished history reaching far back to at least the time of the Industrial Revolution and the expansion of global maritime trade.7

Arbitration agreements, arbitrability, jurisdiction

Let's begin at the beginning, with the question whether the parties have agreed to arbitrate a dispute; if so, whether they (or others) can be compelled to participate in the arbitration; and who (the court or the arbitrator) is authorized to decide these questions. The FAA states that any 'agreement in writing to submit to arbitration an existing controversy' arising out of a contractual arrangement involving the interstate commerce of the United States is 'valid, irrevocable, and enforceable', unless ordinary principles of contract law would invalidate the agreement.8 As the U.S. Supreme Court noted in a 1985 decision, Mitsubishi Motors Corporation v. Soler Chrysler-Plymouth, Inc. ,9 the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) also provides in Article II that agreements in writing to arbitrate are enforceable, and that the courts of a contracting state must refer the parties to arbitration unless they find 'that the said agreement is null and void, inoperative or incapable of being performed'.10

In Mitsubishi, the U.S. Supreme Court rejected the argument that antitrust cases were categorically unsuitable for arbitration. To the contrary, the Court concluded, nothing in either U.S. law or the New York Convention justified the assumption that arbitrators could not apply this body of law, even though it is based on statutes. This was just one of many cases in which the Court expressed a favorable attitude toward arbitration and the enforceability of agreements to arbitrate. Again in the context of antitrust law, the Court in American Express Company v. Italian Colors Restaurant11 decided that an arbitration agreement between American Express Company and merchants who accept those credit cards was enforceable, despite the fact that the agreement required the merchants to waive the possibility of class arbitration and the fact that the costs of individual arbitration were likely to be discouragingly high.

The Court has regularly found that state laws that place barriers in the way of arbitration are preempted by federal law. Thus, for instance, in AT&T Mobility LLC v. Concepcion,12 the Court ruled that a contractual clause requiring arbitration (and again banning class-wide procedures) had to be enforced, even if it was unconscionable as a matter of the law of California. It saw the state rule as 'an impermissible obstacle to the accomplishment of the FAA's objectives'.

The Court has also been sensitive to the Kompetenz-Kompetenz question: who decides whether something is arbitrable? The leading Supreme Court case on this point is First Options of Chicago, Inc. v. Kaplan.13 The underlying dispute in that case involved debts incurred in the course of stock-market transactions. When some investors could not pay their debts to the firm that cleared their stock trades, the firm sought arbitration by a panel of the Philadelphia Stock Exchange. The investors resisted arbitration on the ground that they had never signed the agreement that contained an arbitration clause. The arbitrators, however, rejected that argument, resolved the dispute, and entered an award. The investors then asked the court to refuse to confirm the award on the ground that they should not have been compelled to arbitrate in the first place.

The Supreme Court recognized that it really had three questions before it: first, whether the investors were liable to the clearing company; second, whether there was a valid agreement to arbitrate; and third, 'who should have the primary power to decide the second matter'. Here is the Court's answer to the third question:

Just as the arbitrability of the merits of a dispute depends upon whether the parties agreed to arbitrate that dispute, … so the question who has the primary power to decide arbitrability turns upon what the parties agreed about that matter. Did the parties agree to submit the arbitrability question itself to arbitration? If so, then the court's standard for [Page92:] reviewing the arbitrator's decision about that matter should not differ from the standard courts apply when they review any other matter that parties have agreed to arbitrate. … When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally … should apply ordinary state-law principles that govern the formation of contracts. … [But there is] an important qualification, applicable when courts decide whether a party has agreed that arbitrators should decide arbitrability: Courts should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.14

When that 'clear and unmistakable evidence' is missing, then the court will decide independently whether the matter is arbitrable.15

Most recently, the Court followed this pattern in a case involving sovereign investment arbitration, BG Group PLC v. Republic of Argentina.16 There, an arbitration panel had awarded the BG Group (private investors) damages against Argentina, in a proceeding conducted pursuant to a 1990 bilateral investment treaty. The treaty required a party seeking arbitration first to bring suit in a local court. Although BG Group had not done so, the case proceeded to arbitration. The arbitrators decided that Argentina's own conduct had waived, or excused, BG Group's failure to comply with the local-litigation requirement. On the merits, they ruled that Argentina had not expropriated the Group's investment, but that it had denied the Group 'fair and equitable treatment.' They awarded BG Group USD 185 million in damages.

Argentina challenged the award in an action filed in the federal courts. The first-instance court affirmed the award; the court of appeals, reviewing the local-litigation requirement independently, held that the award should be vacated for failure to comply with that condition; and then the Supreme Court reversed the court of appeals' decision and concluded that the local-litigation requirement was a procedural precondition to arbitration (and thus an issue for the arbitrator), not a condition relating to Argentina's consent to arbitrate (which would have been for the court).

Although the Supreme Court has not recently taken up any cases involving enforcement of agreements to arbitrate, such matters do arise from time to time in the courts. Thus, for instance, [Page93:] the Court of Appeals for the Eleventh Circuit (which covers Alabama, Florida, and Georgia) held that an arbitration clause in a cruise-ship employee's employment contract was enforceable under Article II of the New York Convention.17 That article, the court concluded, does not recognize unconscionability as a ground for denying a motion to compel arbitration.

In another case, the Sixth Circuit faced the question whether to grant a motion to compel arbitration in Kentucky in a case involving several disputes between two branches of the same church, one based in Australia and the other in Kentucky.18 Despite the fact that court proceedings were under way in Australia, the court ordered arbitration in Kentucky and declined to issue an antisuit injunction directed to the Australian proceedings.

Appointment of arbitrators, summoning of witnesses

Once an arbitral proceeding has begun, especially if it is being conducted under the auspices of a respected organization, it is rare for courts to become involved in it. The power to do so exists, however. For federal courts the source of that power is again the FAA. Section 5 of the Act addresses the appointment of the arbitrators. It states that the method specified in the agreement should be followed, if there is one. If no method is specified, or if a party fails to follow the method in the agreement, or if there is any other problem, then the court has the power to 'designate and appoint' an arbitrator or arbitrators or to fill a vacancy.19 Only 104 court decisions, from courts at all levels, appear under this statutory heading, which is a sign of how rarely this problem comes up.

The FAA also addresses the power of the arbitrators to summon witnesses to appear at the proceeding and to require the witnesses to bring documentary evidence with them.20 Critically, as the statute says, 'if any person or persons so summoned to testify shall refuse or neglect to obey said summons, upon petition the United States district court for the district in which [the arbitrators] … are sitting may compel the attendance of such person or persons before said [Page94:] arbitrator or arbitrators, or punish said person or persons for contempt in the same manner provided by law for securing the attendance of witnesses or their punishment for neglect or refusal to attend in the courts of the United States'.21 Once again, it is rarely necessary to resort to this power; there are only 48 decisions associated with that provision of the United States Code.

Recognition and enforcement of awards

The most important support that courts the world over give to arbitral proceedings occurs in proceedings to confirm, recognize or enforce an arbitral award. The FAA confers this power in section 9; the New York Convention calls for it in Article III, and other conventions and bilateral treaties have language to the same effect. Critically, under both domestic law and the New York Convention, the grounds for refusing to recognize and enforce are strictly limited. Under Article V of the New York Convention, a party seeking to avoid recognition and enforcement must provide proof that one of five specified fundamental problems exists, namely, incapacity of a party or invalidity of the agreement under the applicable law; a party's lack of proper notice or inability to present the case; subject matter not within the terms of the submission; improper composition of the arbitral body or improper procedure; and an award either not yet binding or set aside by a competent authority.

The FAA has a similar, though not identical, list. An award may be vacated (1) where it was procured by corruption, fraud, or undue means, (2) where there was 'evident partiality or corruption' in one or more arbitrators, (3) where the arbitrators were guilty of serious misconduct in conducting the proceeding, or (4) 'where the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final, and definite award upon the subject matter was not made'.22

Some of these grounds, in the wrong hands, might undermine the finality of an arbitral award, but the courts have construed them very narrowly. For example, a lawsuit brought by a company seeking to vacate an arbitration award on both procedural grounds and the ground of alleged 'manifest disregard of the law' came before me in 1996. It was an international arbitration between a Wisconsin company and an Australian company, though the international nature of the agreement played no role in the decision.23 In the opinion (which I happened to write), we reiterated several critical principles:

• Factual or legal errors by arbitrators - even clear or gross errors - do not authorize courts to annul awards.

• Insufficiency of the evidence is not a ground for setting aside an arbitral award.

• The parties are not entitled to reargue their claims in a proceeding to vacate an arbitral award.

We summarized these points as follows: 'If courts were to undertake the kind of searching review of arbitral awards that Super Products invites here, arbitration would be transformed from a commercially useful alternative method of dispute resolution into a burdensome additional step on the march through the court system.'24 That is not an attractive prospect to any judge, nor would it be a proper use of the court's authority to decide whether to give effect to an arbitral award.

I will conclude with some more technical information about the post-award phase in the United States. Both federal and state courts have authority to entertain these actions, if they are properly in the United States. In some instances, as acknowledged in the proposed Restatement of the U.S. Law of International Commercial Arbitration that is being prepared by the American Law Institute under the direction of Professor George Bermann, only the courts of the foreign arbitral situs may act.25 That said, if the parties to an arbitration whose situs is outside the United States have specifically chosen the law of arbitration of the United States or a U.S. state, that U.S. court will have concurrent jurisdiction to confirm or vacate the award.

Otherwise, the most important question for a U.S. court considering an arbitral award is whether the award may be subject to either the New York or the Panama Conventions, or if it is a non-Convention award. Convention awards, because they arise under the laws and treaties of the United States, automatically fall within the jurisdiction of the federal courts. Non-Convention [Page95:] awards often do too, but only if what we call 'diversity' jurisdiction exists - that is, if the parties are citizens of different U.S. states or one party is a citizen of a U.S. state and the other party is a citizen or subject of another country.

The court must also assure itself that it has adjudicatory power over the defendant or its assets (known to American lawyers as personal jurisdiction or quasi-in-rem jurisdiction, respectively). In a 2009 decision, the Court of Appeals for the Second Circuit had before it a case involving a Swedish arbitration award in favor of Frontera Resources Azerbaijan and against the State Oil Company of the Azerbaijan Republic.26 The first-instance court dismissed Frontera's petition to confirm the award in New York because it concluded that it could not exercise personal jurisdiction over the State Oil Company. Its reason was that the State Oil Company had insufficient contacts with New York to satisfy the due process clause of the Fifth Amendment to the U.S. Constitution. Frontera did not dispute the lack of contacts. What it argued instead was that a court does not need personal jurisdiction to confirm a foreign arbitral award, because the New York Convention does not mention any such ground. The Second Circuit rejected that analysis. Jurisdiction over the person of the defendant or at a minimum the assets involved in the case, it confirmed, is a constitutional necessity in all cases before all courts of the United States. The only possible (and interesting) exception the court noted would apply if the State Oil Company could be characterized as an agent of the State of Azerbaijan. In that case, the due process protections of the Fifth Amendment do not apply, because a foreign state is not the kind of entity protected by that Amendment. If the foreign-sovereign exception is not present in the case and the sole target of the enforcement proceeding is local assets, it may be necessary for a litigant to comply with attachment procedures. The rules in this respect vary from state to state within the United States.

It is possible, though not likely if assets are present, that the U.S. court will consider dismissing the recognition and enforcement action under the forum non conveniens doctrine. The draft Restatement, however, excludes this possibility for Convention cases. It suggests that 'an action to confirm a U.S. Convention award or enforce a foreign Convention award is not subject to a stay or dismissal in favor of a foreign court on forum non conveniens grounds'.27 The Comment points out that actions for post-award relief are supposed to be summary in nature, and thus that the complexities that often might persuade a court to dismiss in favor of an alternate foreign court should not be present. No one will be taking new evidence, and the range of acceptable legal arguments is quite narrow. If the action is for vacatur of a U.S. Convention award, it would be particularly unsuitable for the application of forum non conveniens, unless the parties have designated or acknowledge the existence of another forum with concurrent jurisdiction over the matter.

If parallel litigation is taking place, it may be coordinated through the doctrine of lis pendens. In such a case, the court in which the case is first filed will proceed with it, and courts with later-filed cases will postpone their own work until the first court is finished. Comments to the draft Restatement suggest that there is no reason not to apply this principle if the two courts involved belong to the same jurisdiction and both are competent to hear the case.

Conclusion

Especially in the area of international commercial transactions, arbitration for many years has been a mature system of dispute resolution that fits the needs of many actors. It serves in part as a substitute for litigation in national courts, and in part simply as a different path companies may wish to take. (Interestingly, for many years there was an increase in both cases submitted to arbitration and civil commercial cases before national courts. This suggests that each option offers advantages and disadvantages, and it reinforces the strong support for party autonomy that our legal systems recognize.) When arbitration is their choice, businesses know that there are many reputable bodies that provide services for these proceedings, and that there is an effective network for enforcing the resulting awards. National courts function as a backstop in the system, and are happy to play that role.

I hope that this presentation has reassured you that the courts in the United States are both hospitable to arbitration and appreciative of the excellent work done by the ICC International Court of Arbitration and its sister arbitral institutions around the world. I thank you again for the opportunity to talk with you, and I look forward to continuing to learn about your own work.

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Discussion

Question: You said that you are authorized to appoint arbitrators. In our experience, finding a good and appropriate arbitrator is a complicated task. How do you go about it? In India, for example, judges normally appoint retired fellow judges as arbitrators as this is the easiest way for them to find a good arbitrator. What is your approach?

Judge Wood: Obviously, we would first wish the parties to designate someone. However, we are talking here about a situation in which that process has broken down. In one of my cases, an arbitral tribunal was in place and for some reason one of the arbitrators had to withdraw, leaving a vacancy. In such a situation, we would proceed in much the same way as we do when appointing counsel in cases. Cases often come before our court in which a party is not represented by a lawyer. If the case is considered to be sufficiently complicated that we need to ask a lawyer voluntarily to take up the case, then we have our staff find a lawyer from a group of people whom we have found to be reputable and reliable lawyers. If we require our staff to find an arbitrator, there are alternative dispute resolution organizations like JAMS, which is essentially an organization of arbitrators, that they could approach. Many of the people who act as arbitrators with such organizations are, in fact, retired state or federal court judges. But the court does not always directly pick the person; sometimes the organization does that.

Question: The scheme set out in the UNCITRAL Model Law on International Commercial is that in ad hoc arbitration, if the parties fail to agree on the person to chair the tribunal, the courts will act as the appointing authority. In the Asia-Pacific region, there are national laws, such as in Hong Kong and Singapore, that designate institutions as the appointing authority even for ad hoc arbitration. And in some jurisdictions, like India or Taiwan, the appointing procedure in the courts is conducted like a lawsuit, with service of process as in litigation. In some cases, the court looks into jurisdictional issues in addition to making an appointment. Do you have a view on what would be considered the proper way of handling such issues in the United States? Do you think it is better to have that function performed by an institution that is more familiar with the individuals being sought?

Judge Wood: When a case is filed in court in support of arbitration, the court first makes sure that it is the right court for the case to be proceeding in. If the party files in San Francisco and the arbitration is taking place in New York, the San Francisco court is likely to say that it is not the right court to be handling the case. If the case is filed in a federal court, it can simply be transferred to the New York court, which is one of the advantages of the federal system. If it is filed in a state court in California, the court will have to dismiss the action, and the case will have to be refiled in the correct court. So a court will begin by reviewing whether it is the right place for the action. After doing this, the court may then look to see whether, in their agreement, the parties have in any way designated an institution to handle these things. If they have, then the court will defer to that institution. But in the kind of cases I have seen, they have not. Maybe this is because they were not very sophisticated in drafting contracts with arbitration procedures, who knows? Let me tell you about one of my absolute favourites from the arbitration proceedings that have come before me. This case was brought around the year 2000 and had to do with who was going to represent the United States in the Sydney Olympics in the 75-kilogram weight class of Graeco-Roman wrestling. There were many who wondered how on earth the Court of Appeals for the Seventh Circuit came to be dealing with the Sydney Olympics and Graeco-Roman wrestling. The short answer is through the arbitration of a dispute over who had won the final match sponsored by USA Wrestling, the winner of which was to go to the Sydney Olympics. The first question we had to answer was why the case was in Chicago. It could have been in Denver, which is where USA Wrestling is located, and probably would have been in Denver but for the arbitration. However, the arbitration was in Chicago, so we were the right court.

Question: In the Global Gold case, a US court was requested to review a decision of the ICC International Court of Arbitration. The US court decided that the request was inadmissible because, under the parties' agreement, the matter had been referred to the ICC Court as an administrative institutional body. Do you have any views on that? I have a second question relating to an ICDR case in which I was an arbitrator some years ago. The award was challenged before the Southern District of New York, which issued a decision I found fascinating. It held that the challenge was frivolous and imposed sanctions on counsel. This was a very bold and good decision. I wonder what your views are.

Judge Wood: To begin with the second question, in one of my cases we sanctioned counsel because, under the Federal Rules of Appellate [Page97:] Procedure, if an appeal is made that has absolutely no basis and is in bad faith - for instance, aimed simply at postponing the moment when a person has to pay - then we can issue an order. Obviously, counsel has a chance to explain why it was not frivolous and in bad faith, but if we are not convinced by their explanation, then we can fine them a monetary amount. Under the American rule on attorneys' fees people normally pay their own attorneys' fees, but we can assess attorneys' fees against the side that was wasting everybody's time. So what the Southern District of New York did is certainly well within the court's power. There are several laws giving that power. As for the first question, could you provide a bit more detail?

Question: It was a case in which the claimant, the US company Global Gold Mining, initiated arbitration against four respondents in Armenia. The ICC Court took a decision in its capacity as the administering institution, by which it excluded the first respondent from the case. The problem was that the first respondent in fact controlled the company that was the subject of the dispute. The other three respondents were there simply because they needed to be there, but had no active role and no assets. The claimant complained that the decision of the ICC Court deprived it of any possibility of recovery. It sued the ICC for breach of contract and sought damages, alleging the decision to be wrong.

Judge Wood: We have had a couple of similar cases in which people tried to sue the institution, and they were held to be not well-founded. We have held that the organization sponsoring the arbitration cannot be sued. Something akin to judicial immunity applies to them: they are not the ones who have done anything to you, so to speak. The cases I am thinking of, which did not concern the ICC, were not allowed to go forward.

Question: So you can challenge the award, but not the decision made by the institution?

Judge Wood: Right, you can challenge the award, not the institution; that is exactly the line.

Question: You mentioned that sometimes the courts would look at the arbitration agreement and also the principle of unconscionability. Is this unconscionability vis-à-vis the contract or vis-à-vis the clause?

Judge Wood: The Supreme Court has said that it has to be the contract as a whole. You might have a challenge relating to the formation of the contract, or in common law countries a challenge relating to consideration, or you might have an unconscionability challenge. But if the contract as a whole is not vulnerable to any of those challenges, then you cannot single out the arbitration clause as unacceptable. On top of that, many contracts are in fact completed. Take a building contract where the building is finished and there was an arbitration clause maybe in the agreement between the general contractor and some of the other contractors. The arbitration clause survives the end of the contract in case there is a post-construction dispute. So we are quite careful not to say that there are special rules just for the arbitration part of the agreement.

Question: One of the problems with the New York Convention in various parts of the world is that judges are inexperienced in dealing with it. This is not their fault; for many of them it is something new. One of the answers is to have specialist courts in these jurisdictions. You have said that you are quintessentially a generalist. I wonder whether there has been any movement in America to have specialist judges deal with arbitration.

Judge Wood: This is an interesting question. I would say no at the federal court level, although if you look at the state courts this is why some lawyers might choose state courts in some states. Delaware, for example, has a specialized commercial court. The Supreme Court of New York, which is a trial-level court, has some specialized sections, I believe. So some states have chosen to do that or at least have decided that civil and criminal are to be separated. Our answer to the problem - which is not confined to the New York Convention but could apply also to trust cases and many other matters - is to try to stress education. The Federal Judicial Center tries to educate judges about these things. I guess I have dealt with arbitration for a long time. I started my career after finishing clerking at the Office of the Legal Adviser of the US State Department and have since done miscellaneous things, including an ICC arbitration when I was in private practice. So the idea of specialization is not completely foreign to me from my pre-judicial period. However, we do not like the idea of specializing the federal courts. And the Federal Circuit is not specialized in the way European courts are. It has what I would refer to as a hodgepodge of jurisdiction: it does patent cases, international trade cases, government employee cases - whatever Congress has decided to give it. So I am not sure there would be gains to be had from specialization.

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Question: I have a question related to one of the grounds you mentioned for setting aside awards, namely the evident partiality of the arbitrators. It is very common in the world of international arbitration to see US arbitrators making disclosures that are very detailed, at least from an international perspective, such as arbitrators disclosing that their children go to the same school as the children of some of the counsel, and so on. But from what one sees in case law, US courts do not seem to be so strict when it comes to setting aside awards on grounds of partiality. What is your view on how much should be disclosed, and why do you think US arbitrators go in for excessive disclosure?

Judge Wood: You would be shocked at the amount I have to disclose as a federal judge. I cannot say I love it, but it is something I fully understand. I have to file an extremely detailed financial disclosure statement every year; I have to report all the travel I have undertaken; I have to look and see what stocks my husband owns and what my children are doing. I have two children who are lawyers and I need to make sure that every time the law firms they work for come before me they have absolutely nothing to do with the case. If the day comes when they are partners in the firms, I will not be able to sit in those cases at all because they will have a financial interest. So arbitrators are thinking against this background of extremely detailed disclosure. I would say it probably helps protect against corruption in the judiciary. It makes for great transparency. Everybody knows how much money I have and how much I earn. If I suddenly buy a 20-million dollar house - not that I am going to anytime soon, I assure you - they would ask where the money comes from, and would be right to do so. So that is what they are thinking of. Yet, we can look at it from the other side. A few years ago, my colleague Richard Posner expressed an opinion in relation to a situation where it was complained that an arbitrator had a relationship with somebody. I think it was one of those remote relationships. He said that in arbitration you bargain for a different set of rules and if you accept - let us assume it is an ICC arbitration - the rules that the ICC uses, you should not be heard to complain. Besides, what is partiality anyway? It must mean something other than just knowledge. It must mean some inappropriately close relationship and almost a stake in the proceedings. One of the great advantages of international commercial arbitration is that you can select an expert set of decision-makers. You might not want generalists like judges to decide your case. If it is a construction case, you might want people who are qualified engineers. If it is a pharmaceutical case, you might want people who know something about drugs, and so on and so forth. What Judge Posner said in that decision is that it is not a good idea to superimpose on arbitration the same rules as judges use.

Question: In China, manifest disregard of law in the arbitration procedure is a criminal offence and can lead to a three-year prison sentence. Is it a federal offence in the United States, or do you have judicial immunity?

Judge Wood: Certainly for judges, there is judicial immunity. The worst that could happen, if it became a pattern of behavior, is, I suppose, that the judge could be impeached by the House of Representatives and removed from office. But I have never seen an impeachment on that ground in the entire history of the United States.

Question: My question relates to setting-aside procedures and their consequences. You can have the same tribunal deciding the case again, or a new tribunal, or even the court itself judging the case. I know that in the United States a case can be remanded to the original tribunal. Do you see that as appropriate?

Judge Wood: Normally you would see a remand to the original tribunal, but I would say this probably depends on what the reason for setting aside the award was. If, for example, the award is set aside due to evident partiality, then it would be inappropriate to send it back to the same flawed tribunal, so we would look and see what the problem is. We face the same question if we reverse the decision of one of our trial judges. Our usual rule is to send the matter back to the same judge, but there are times when we think that a new pair of eyes and a new perspective are needed. I would suspect we would do the same in arbitration. So the usual rule would to send it back to the same tribunal or at least send it back for further proceedings and, in the case of institutional arbitration, let the institution decide whether or not a new tribunal is necessary.

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Question: Would you please briefly elaborate on the level of immunity from civil liability that an American arbitrator enjoys?

Judge Wood: We have analogized it to the level of immunity enjoyed by judges, which is complete immunity. I have not seen a case in which somebody has succeeded in suing an arbitrator for coming to the wrong decision or mismanaging the arbitration, for example. Of course, if the arbitrator went out and burned your house down, that is a different matter, but I have never seen a case in which we could have removed immunity.

Question: You mentioned that Abbott and Boeing tend not to write arbitration clauses into their agreements. I can understand that in domestic agreements, and also in international agreements where they have superior bargaining power and can insist on having their home courts. But what options are there if the non-US counterparty does not want the US courts, punitive damages and jury trials?

Judge Wood: You could, of course, simply put a choice-of-court and choice-of-law provision into your agreement. Sometimes people will choose the courts in the UK, sometimes other courts. It is true that people are terrified of US jury trials, but do you know that only 1.5% of civil cases in the United States end up with a trial at all? The thought that jury trials are out there scaring everybody to death should be recast as the thought of the possibility of a jury trial, because it usually will not happen. Be that as it may, I suppose the backstop would be to include a mediation provision, or perhaps to choose the courts of a neutral third country.

Question: One last question regarding the use of forum non conveniens as a ground for denying recognition and enforcement. From your perspective, does that sit well with the New York Convention? How frequently is it invoked?

Judge Wood: I think it sits very badly with the New York Convention if the award comes within the scope of the Convention. It is hard for me to imagine why somebody would have brought a recognition and enforcement action in the United States if there are no assets there. Let us suppose this happens and an applicant with no assets in the US files a vacatur action in the belief that as the US is a New York Convention country it is worth a try. The US court is likely to be concerned about that and should ask itself whether by law the United States is a 'convenient' forum simply because it is a party to the New York Convention. If the award was entered in Paris in France and the assets are located in Switzerland, the court would be right to ask what it has to do with this case and decide that it is not going to address the case. This would be dismissal without prejudice, by the way. Of course, you can never dismiss for non-convenience grounds unless there is an adequate alternative where the claim can be brought. In my example of a person going to New York to have an award vacated that had been rendered in Paris and concerned assets in Switzerland, the court would probably refer the applicant to the courts in those places.

[Page100:]

Appendix A: U.S. Supreme Court Decisions on Arbitration, 2010-2015

Wellness Int'l. Network Ltd. v. Sharif, 135 S. Ct. 1932 (2015) - The Court held that bankruptcy judges may adjudicate Stern claims with the parties' consent. The majority analogized this to the parties' ability to consent to private arbitration. Chief Justice Roberts dissented, joined by Justice Scalia. The Chief Justice also analogized to arbitration, arguing that arbitrators cannot enter judgment-instead a party must seek enforcement from a court. He would have held that bankruptcy judges must be in the same position with respect to Stern claims.

Department of Transportation v. Association of American Railroads, 135 S. Ct. 1225 (2015) - The Court held that Amtrak is a governmental entity, therefore the Passenger Rail Investment and Improvement Act of 2008, which grants Amtrak and the Federal Railroad Administration rule-making power, is constitutional. The Chief Justice concurred, but noted that the Act's arbitration provision (among others) is likely unconstitutional. The Act requires Amtrak and the Federal Railroad Administration to resolve certain disputes through arbitration. The Chief Justice took the view that if that provision refers to a private arbitrator, it violates the non-delegation doctrine; if it refers to a public arbitrator, it violates the Appointments Clause.

BG Group PLC v. Republic of Argentina, 134 S. Ct. 1198 (2014) - An arbitration panel awarded a private investor (BG Group) damages against Argentina, pursuant to a 1990 bilateral investment treaty between Argentina and the United Kingdom. The treaty requires a party to bring suit in local court before seeking arbitration. The arbitrators determined that requirement was excused because Argentina's behavior toward BG Group had been 'fair and equitable', as required by another section of the treaty. Argentina sought a review in the federal courts, claiming that the arbitration panel lacked jurisdiction. The district court affirmed the award; D.C. Circuit vacated the award, holding that a court must review the arbitrators' jurisdictional determination de novo, and then deciding the local court requirement was not excused. The Supreme Court reversed, applying contract law principles to the treaty, and holding that the local court requirement was a procedural precondition to arbitration (which an arbitrator interprets), not a condition relating to Argentina's consent to arbitrate (which a court must consider de novo). The court therefore deferred to the arbitrators' determination. Chief Justice Roberts dissented, joined by Justice Kennedy. The Chief Justice would not have interpreted the treaty as an ordinary contract. Instead, because it is a treaty between two sovereigns, there is no arbitration contract with any private investor-rather, the treaty contains a standing offer to arbitrate, which any investor can accept by complying with the terms, i.e. filing a suit in the local court. Therefore, a court must review the arbitrators' determination of jurisdiction de novo.

American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013) - A group of merchants that accept American Express charge cards brought an antitrust suit against American Express, claiming that the company used its monopoly in the charge-card market to force the merchants to accept very high fees for American Express credit cards (effectively, a tying claim). American Express moved to compel arbitration, citing the arbitration clauses in its contracts with the plaintiffs, which, in addition to mandating that all disputes between the parties be submitted to arbitration, contained a clause barring class arbitration. The Second Circuit found the class-waiver clause unenforceable after concluding that the costs of arbitrating the antitrust claims far exceeded the maximum individual recovery any plaintiff could hope to obtain (even allowing for the possibility of treble damages). The Supreme Court reversed, reasoning that nothing in the antitrust laws signaled an intent to override the class arbitration waiver and also that the class waiver did not prevent the 'effective vindication' of a plaintiff's rights.

Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064 (2013) - A group of physicians brought suit against Oxford Health Plans alleging that Oxford failed to properly and promptly reimburse physicians for their services. The suit was submitted to arbitration, and the arbitrator concluded that the arbitration could proceed on a class-wide basis. Oxford sought to vacate that decision, but the district court, the Third Circuit, and the Supreme Court all refused to do so, reasoning that the arbitrator had arguably interpreted the parties' contract and thus that there was no basis for vacatur. It distinguished Stolt-Nielsen S.A. v. AnimalFeeds International Corp. , 559 U.S. 662 (2010), on the ground that, in that case, the parties had stipulated that their agreement did not contemplate class arbitration.

[Page101:]

Nitro-Lift Technologies, L.L.C. v. Howard, 133 S. Ct. 500 (2012) (per curiam) - Two former employees of Nitro-Lift went to work for a competitor, allegedly in violation of a non-compete clause in their employment contracts. Although the contracts also required any disputes between the parties to be submitted to arbitration, the Oklahoma Supreme Court concluded that arbitration was not mandatory in this particular dispute because the non-compete clauses at the core of the parties' dispute were unenforceable under Oklahoma law. The Supreme Court reversed, holding that the application of Oklahoma law to the employment contracts was a decision for the arbitrator to make in the first instance, and that the fact that the merits of the underlying dispute appeared to turn on state law did not render the dispute unsuitable for mandatory arbitration.

Marmet Health Care Center, Inc. v. Brown, 132 S. Ct. 1201 (2012) (per curiam) - West Virginia Supreme Court's holding that state public policy prohibited pre-dispute arbitration agreements in cases involving personal injury or wrongful death was preempted by the Federal Arbitration Act (FAA).

CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2011) - The plaintiffs, who obtained a particular type of credit card, sued CompuCredit for alleged violations of the Credit Repair Organizations Act (CROA). CompuCredit moved to compel arbitration, but the Ninth Circuit concluded that CROA claims were non-arbitrable. It reasoned that the disclosure provision of the CROA conferred upon consumers an express right to sue for violations of the disclosure provision and that the CROA contained a non-waiver provision preventing waiver of any rights under the Act; because mandatory arbitration interfered with the right to sue, it therefore violated the CROA's non-waiver provision. The Supreme Court reversed, holding that the CROA did not, in fact, confer a specific right to sue in a court of law for violations of its provisions and thus did not indicate Congress's intent to prevent arbitration of claims arising under the Act.

KPMG LLP v. Cocchi, 132 S. Ct. 23 (2011) (per curiam) - A Florida court refused to submit a case to arbitration after concluding that two of the four claims raised by the plaintiffs were non-arbitrable. Citing the rule that arbitrable claims must be submitted to arbitration even when paired with non-arbitral claims, the Supreme Court reversed and remanded for a clearer determination whether the remaining claims in the suit were or were not subject to arbitration.

AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) - The plaintiffs sued AT&T for misrepresentation and fraud after AT&T charged them approximately $30 in sales tax for their ostensibly 'free' mobile phones. AT&T sought to compel arbitration, but the district court and the Ninth Circuit found the contract's mandatory arbitration clause (which prohibited class-wide arbitration) unconscionable under general state-law contract principles, which deem class-action waivers unenforceable under certain circumstances. The Supreme Court reversed, holding that California's interpretation of its state unconscionability doctrine was preempted by the FAA. In the Court's view, application of the unconscionability doctrine in the context of arbitration clauses containing class waivers interfered with the FAA's purpose of promoting arbitration. Rather than conceptualize the unconscionability doctrine as a general principle of contract law that falls within the FAA's rule that arbitration agreements 'shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract', the Court viewed the unconscionability doctrine as a state-law rule that created 'an [impermissible] obstacle to the accomplishment of the FAA's objectives'. The Court additionally expressed concern that class-wide procedures were ill-suited to arbitration and would undermine Congress's objective that arbitration provide a speedy and streamlined means of dispute resolution. Finally, the Court was unsympathetic to the plaintiffs' (and the California courts') argument that mandating individual arbitration had the power to shield defendants from any liability for their violations of the law, provided that the individual claims were too small to justify arbitration on an individual basis.

Granite Rock Co. v. International Brotherhood of Teamsters, 130 S. Ct. 2847 (2010) - In a labor dispute between Granite Rock and the Teamsters, the Teamsters sought to compel arbitration, while Granite Rock resisted it. The question of arbitrability hinged, in part, on the date on which the parties ratified a collective bargaining agreement (CBA) containing an arbitration clause. Relying on the general principle that whether the parties have agreed to arbitrate any given claim is typically a matter for a court, and not the arbitrator, to decide, the Supreme Court held that the date of the CBA's ratification was subject to resolution by the district court.

Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (2010) - The plaintiff sued his former employer for discrimination. His employment contract contained an arbitration clause, requiring [Page102:] that a variety of disputes arising under the contract, including claims of discrimination, be submitted to arbitration. The arbitration agreement also stated that questions concerning its own validity were to be decided by the arbitrator. Citing prior decisions in which it had held that an agreement to arbitrate disputes arising out of a contract is 'severable' from the rest of the contract-meaning that the agreement to arbitrate is enforceable even if the validity of the rest of the contract is being challenged-the Supreme Court held that the plaintiff could be required to arbitrate the question of the arbitration agreement's validity itself. So long as the plaintiff was not specifically challenging the portion of the arbitration agreement that rendered the validity of the agreement arbitrable, the Court reasoned that the matter could still be subject to arbitration. If, however, a plaintiff directly and specifically challenges an arbitration agreement's delegation of questions concerning its own validity to the arbitrator, then the validity of that delegation is properly decided by a court.

Stolt-Nielsen S.A. v. AnimalFeeds International Corp. , 130 S. Ct. 1758 (2010) - A supplier of raw material for animal feed brought antitrust claims against several international shipping companies. The parties agreed that the dispute was subject to arbitration under the shipping contract-known as a 'charter party' in maritime law-that governed their relationship. Although the charter party made no mention of the possibility of class arbitration, AnimalFeeds sought to have the arbitration proceed on a class-wide basis, and the arbitration panel agreed to allow it to do so. The Supreme Court vacated the arbitration award, concluding that the arbitrators lacked any basis for allowing class arbitration: the parties had stipulated that the arbitration agreement did not contemplate class arbitration; no background principle of maritime or state law appeared to provide for class arbitration; and, indeed, the arbitrators' sole rationale for allowing class arbitration appeared to be that they thought it was a preferable way of handling the arbitration and had been used by other arbitrators. The Court, however, concluded that policy preference alone was insufficient to justify class arbitration absent any contractual or other legal support for the procedure. Nor was the mere fact that the parties had agreed to arbitrate sufficient, given the substantial procedural differences between individual arbitration and class arbitration. Ultimately, the Court concluded that whether or not to submit to class arbitration was a matter of contract and thus dependent on the parties' intent.

Appendix B: Significant U.S. Court of Appeals Decisions on International Arbitration, 2008-2015

Chevron Corp. v. Ecuador, 795 F.3d 200 (D.C. Cir. 2015) - Chevron filed a petition in the D.C. district court pursuant to the New York Convention seeking confirmation of an international arbitration award against Ecuador. The district court confirmed the award. The D.C. Circuit affirmed. The court held that the action fell within the scope of the arbitration exception in the Foreign Sovereign Immunities Act (FSIA) because the bilateral investment treaty between the United States and Ecuador included a standing offer to arbitrate investment disputes for all U.S. investors, and Chevron properly accepted that offer. It further held that Chevron's lawsuits against Ecuador constituted 'investments' under the treaty, that the issue of whether the dispute fell within the treaty's scope was for the arbitration tribunal to decide, and that enforcing the arbitration award did not violate U.S. public policy.

Belize Social Development Ltd. v. Gov't of Belize, 794 F.3d 99 (D.C. Cir. 2015) - Belize Social Development Ltd (BSDL), the assignee of the monetary portion of a foreign arbitral award against the Government of Belize (GOB), petitioned the D.C. district court for confirmation and enforcement of the award. The district court granted the Government of Belize's motion to stay the petition pending the resolution of a case involving the parties that was before the Belize Supreme Court. BSDL petitioned for a writ of mandamus from the D.C. Circuit. The D.C. Circuit granted that writ. On remand, the district court granted BSDL's original petition. GOB appealed that decision, arguing that the FSIA barred jurisdiction. The D.C. Circuit ultimately held that the district court had jurisdiction over GOB under the FSIA's arbitration exception. The D.C. Circuit held that GOB failed to provide any evidence to support its allegation that its Prime Minister lacked the constitutional authority to enter an agreement to arbitrate (as opposed to the entire original contract). Because GOB could not negate the arbitration clause, the court could not reach the merits of its claim that the Prime Minister lacked the authority to enter into the entire original agreement. The D.C. Circuit also rejected GOB's argument that the New York Convention did not apply because the transaction was a 'governmental'-not 'commercial'-transaction. The court held that a transaction is 'commercial' under the New York Convention so long as it has [Page103:] 'a connection with commerce' and that the presence of a governmental party does not destroy its commercial character.

Asignacion v. Rickmers Genoa Schiffahrtsgesellschaft mbH & Cie KG, 783 F.3d 1010 (5th Cir. 2015) - A Filipino seaman (Asignacion) brought a state court action to set aside a Philippine arbitral award against a German vessel owner (Rickmers) for injuries he suffered when the vessel was docked in New Orleans. After removal, the district court denied enforcement of the award pursuant to the public-policy defense in the New York Convention. The Fifth Circuit reversed, holding that the New York Convention's public-policy defense did not preclude enforcement of the award. It noted that although the seaman would likely obtain a more favorable award under U.S. general maritime law, an alternative public-policy concern prevailed: respecting the choice-of-law provision in the employment contract mandated by the Philippine government, which the court determined was important to the Philippine economy. The court held that given that the seaman's disability was found to be of the lowest grade, the award was not egregiously inadequate to an extent that justified setting aside the choice-of-law provision. The Fifth Circuit also held that the prospective-waiver doctrine did not apply to preclude enforcement of the award because the doctrine does not apply to arbitration, but rather only to statutory rights and remedies.

Sonera Holding B.V. v. Cukurova Holding A.S., 750 F.3d 221, 222 (2d Cir. 2014) (per curiam) - A Dutch holding corporation (Sonera) brought a suit in the Southern District of New York to enforce a final arbitration award against a Turkish holding company (Cukurova). The arbitration arose out of a share purchase between the two companies. The district court found that the Turkish holding company was subject to general personal jurisdiction in New York. The Second Circuit reversed, holding that subjecting the Turkish holding company to personal jurisdiction in New York would violate due process because it was not 'at home' in New York under Daimler and Goodyear (Sonera had not asserted specific personal jurisdiction). It also held that a standard entry-of-judgment clause in the share purchase agreement did not function as a waiver of personal jurisdiction.

Commissions Import Export S.A. v. Republic of the Congo, 757 F.3d 321 (D.C. Cir. 2014) - A judgment creditor (Commissions Import Export) filed a suit against the Republic of the Congo, seeking enforcement of an English judgment on an arbitral award pursuant to the New York Convention. The district court held that the three-year limitation period to confirm a foreign arbitral award set by the Foreign Arbitral Awards Convention Act (implementing legislation for the New York Convention) did not preempt the longer limitation period provided by the District of Columbia's Uniform Foreign-Country Money Judgments Recognition Act for enforcing a foreign court judgment. The D.C. Circuit reversed, holding that the District of Columbia Act's limitation period was not preempted because (1) an arbitral award was distinct from a foreign judgment, and (2) the District of Columbia Act's longer limitation period for foreign judgments would not frustrate the overriding purpose of the Act to facilitate international commercial arbitration.

MediVas, LLC v. Marubeni Corp., 741 F.3d 4 (9th Cir. 2014) - An American biomedical company and several individual plaintiffs filed suit in a state court against a Japanese multinational trading corporation, asserting claims based on state law arising out of the Japanese company's foreclosure of promissory notes related to a loan to the American company. After the case was removed, the district court issued an order compelling arbitration of some of the state law claims. The Ninth Circuit ruled that the order was an implicit stay pending arbitration rather than a dismissal of those claims, and thus was not a 'final decision with respect to an arbitration' appealable under section 16(a)(3) of the Federal Arbitration Act (FAA). It stressed the importance of the procedural history to its rationale, noting that the district court's order was in response to the Japanese company's 'motion to compel arbitration and stay litigation', which explicitly requested a stay, and the district court granted the motion with regard to the claims it decided were arbitrable. It also noted that the parties' actions conformed to this expectation, and the remainder of the parties' claims remained before the district court.

Pine Top Receivables of Illinois, LLC v. Banco de Seguros del Estado, 771 F.3d 980, 990 (7th Cir. 2014) cert. denied, 135 S. Ct. 2891 (2015) - Pine Top, the purchaser of an insolvent domestic insurance company's debts, brought an action against a foreign reinsurer seeking reimbursement. Pine Top moved to compel arbitration. The district court denied Pine Top's motion and dismissed the claims that demanded arbitration. The Seventh Circuit held that the district court's order declining to refer the dispute (governed by the Panama Convention) to arbitration was immediately appealable under the [Page104:] FAA because the FAA's residual clause conferred appellate jurisdiction over an order denying arbitration. It also held that the purchase agreement did not transfer the right to demand arbitration of disputes because it specifically authorized the purchaser to demand, sue for, compromise and recover all amounts of debts, but did not mention arbitration.

VRG Linhas Aereas S.A. v. MatlinPatterson Global Opportunities Partners Il L.P., 717 F.3d 322 (2d Cir. 2013) - When deciding whether to confirm an arbitral award, a district court must first address the question whether disputes over arbitrability are to be resolved by the arbitrator or by a court; that is, the court must decide who determines arbitrability before considering whether the dispute before the court is arbitrable, for if questions of arbitrability are left to the arbitrator, the court has only limited power to overturn the arbitrator's determination of arbitrability. See also Schneider v. Kingdom of Thailand, 688 F.3d 68 (2d Cir. 2012) (same).

Lindo v. NCL (Bahamas), Ltd. , 652 F.3d 1257 (11th Cir. 2011) - A cruise-ship employee sought to avoid arbitration of his personal injury claim by arguing that enforcement of the arbitration clause in his employment contract would be unconscionable. The Eleventh Circuit rejected this argument, affirming prior decisions in which it held that there is no 'public policy' defense to enforcement of arbitration under Article II of the New York Convention and that unconscionability is not a ground for denying a motion to compel arbitration.

Republic of Ecuador v. Chevron Corp. , 638 F.3d 384 (2d Cir. 2011) - This case arose out of the long-running litigation between citizens of Ecuador and Texaco (later acquired by Chevron) concerning environmental damage caused by Texaco's drilling and exploration operations in the Ecuadorian rainforest. That litigation commenced in New York, but was eventually dismissed on forum non conveniens grounds and refiled in Ecuador. Chevron then initiated arbitration proceedings against Ecuador under Ecuador's Bilateral Investment Treaty (BIT) with the United States, which provides for arbitration of investment disputes between the state of Ecuador and U.S. companies. Ecuador then moved to stay the arbitration on the ground that it overlapped with the ongoing Ecuadorian litigation and thus violated certain promises Chevron had made to the New York federal court in exchange for the forum non conveniens dismissal. The Second Circuit rejected this argument, reasoning that the subject matter of the arbitration was in fact distinct from the ongoing lawsuit and that, in any event, Chevron was not violating any agreement with the district court by initiating the arbitration. Because the Second Circuit concluded that a stay was not warranted on the merits, it declined to decide the threshold legal question whether it had the authority to stay an arbitration proceeding under the New York Convention in the first place.

Ario v. Underwriting Members of Syndicate 53 at Lloyd's for 1998 Year of Account, 618 F.3d 277 (3d Cir. 2010) - The insurer claimed that it had 'opted-out' of the FAA and the New York Convention by specifying in its arbitration agreement that 'the arbitration shall be in accordance with the rules and procedures established by the Uniform Arbitration Act as enacted in Pennsylvania'. The Third Circuit held that although parties to an arbitration agreement may choose to apply alternative standards and procedures to govern the conduct of an arbitration (and that a federal court will enforce such procedures, since doing so is consistent with the purpose of the FAA), the parties do not thereby 'opt-out' of the FAA (including Chapter II, which implements the New York Convention) and render it wholly inapplicable to disputes between them. The alternative procedures will be enforced as a matter of contract, but the FAA continues to supply the background default rules.

Frontera Resources Azerbaijan Corp. v. State Oil Co. of the Azerbaijan Republic, 582 F.3d 393 (2d Cir. 2009) - Following a contract dispute between Frontera and State Oil (SOCAR) that ended in a Swedish arbitration award in favor of Frontera, Frontera sought to confirm the award in the Southern District of New York. The district court dismissed the petition after concluding that it could not exercise personal jurisdiction over SOCAR. On appeal, Frontera argued that the district court erred in holding that a federal court requires personal jurisdiction to enforce an arbitral award under the New York Convention. The Second Circuit rejected this argument, holding that a district court must have either personal jurisdiction over the respondent or quasi-in-rem jurisdiction over respondent's property that could be attached to collect on the award. The Second Circuit also concluded, however, that if SOCAR could be characterized as an agent of the state of Azerbaijan, then the due process protections that limit the exercise of a federal court's personal jurisdiction would not apply at all, because a foreign state is not a 'person' for purposes of the Fifth Amendment. In so holding, the Second Circuit overruled its prior decision in Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300 (2d Cir. 1981), and aligned itself with the [Page105:] D.C. Circuit's holding in Price v. Socialist People's Libyan Arab Jamahiriya, 294 F.3d 82 (D.C. Cir. 2002).

Answers in Genesis of Kentucky, Inc. v. Creation Ministries International, Ltd. , 556 F.3d 459 (6th Cir. 2009) - Two branches of the same creationist church, one based in Australia, the other based in Kentucky, became embroiled in a series of legal disputes. Answers in Genesis (AiG) petitioned to compel arbitration in these disputes in the district court in Kentucky, and the motion was granted over Creation Ministries' (CMI) objection. On appeal, CMI argued that international comity required the federal court to abstain rather than decide the motion to compel arbitration, in light of ongoing judicial proceedings in Australia that predated AiG's motion. The Sixth Circuit assumed, without deciding, that abstention might sometimes be appropriate in similar circumstances, but nevertheless concluded that, considering the factors outlined in Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), abstention was not appropriate in this particular case.

Rogers v. Royal Caribbean Cruise Line, 547 F.3d 1148 (9th Cir. 2008) - Two cruise-ship employees who sued their employer claimed that the binding arbitration clause in their employment contracts was unenforceable because section 1 of the FAA contained a special carve-out for 'contracts of employment of seamen'. The Ninth Circuit disagreed, finding that the New York Convention governed enforcement of the parties' arbitration agreement and that the Convention did not incorporate section 1's carve-out for seamen's employment contracts. The Ninth Circuit further held that 46 U.S.C. § 10313, which presumes that federal courts shall have jurisdiction over seafarer wage disputes, did not prevent the parties' dispute from being arbitrated under the New York Convention. See also Aggarao v. Mol Ship Management Co., Ltd. , 675 F.3d 355 (4th Cir. 2012) (same).

Safety National Casualty Corp. v. Certain Underwriters at Lloyd's, London, 587 F.3d 714 (5th Cir. 2009) (en banc) - The insurance company sought to avoid arbitration, arguing that a Louisiana statute that had been interpreted to prohibit arbitration agreements in insurance contracts 'reverse-preempted' the New York Convention under the McCarran-Ferguson Act, which provides that '[n]o Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance' (15 U.S.C. § 1012(b)). The district court granted the company's motion to quash arbitration, but the Fifth Circuit reversed. The court reasoned that even assuming the New York Convention was not self-executing (a question it did not decide), the legislation implementing the Convention was not an 'Act of Congress' for purposes of the McCarran-Ferguson Act and that McCarran-Ferguson could not be used to reverse-preempt a treaty. See also ESAB Group, Inc. v. Zurich Insurance PLC, 685 F.3d 376 (4th Cir. 2012) (same).

Sourcing Unlimited, Inc. v. Asimco International, Inc. , 526 F.3d 38 (1st Cir. 2008) - The First Circuit held, in accord with other circuits, that a signatory to a contract containing an arbitration clause may be equitably estopped from seeking to avoid arbitration with a non-signatory over an issue intertwined with the contract that would typically be subject to arbitration. See also Aggarao v. Mol Ship Management Co., Ltd., 675 F.3d 355 (4th Cir. 2012) (same).

Gulf Petro Trading Co. v. Nigerian National Petroleum Corp., 512 F.3d 742 (5th Cir. 2008) - The plaintiff's claim against defendant under the Racketeer Influenced and Corrupt Organizations Act (RICO), based on actions defendant allegedly took to improperly sway the result of an arbitration (which included bribing the arbitrator), was an impermissible collateral attack on a previous arbitration award. A claim of wrongdoing in connection with an arbitration where the allegation is that the wrongdoing rendered the result of the arbitration unfair (as opposed to wrongdoing that causes independent harm) is really an attack on the arbitral award and must be pursued as such.

1
See U.S. Federal Arbitration Act (FAA), 9 U.S.C. § 5.

2
See FAA, 9 U.S.C. § 7.

3
See Appendix A for a summary of the key Supreme Court decisions from 2010 to the present, and Appendix B for a summary of important decisions from the federal courts of appeals.

4
Like the other federal courts of appeals, the Seventh Circuit has a mediation office, which is able to resolve approximately 20% of the civil appeals filed in the court.

5
132 S. Ct. 665 (2012).

6
131 S. Ct. 1740 (2011).

7
See e.g. J.A. Jaffe, 'Industrial Arbitration, Equity, and Authority in England, 1800-1850' (2000) 18 Law & Hist. Rev. 525; B.H. Mann, 'The Formalization of Informal Law Arbitration Before the American Revolution' (1984) 59 N.Y.U. L. Rev. 443; E. Moglen, 'Commercial Arbitration in the Eighteenth Century: Searching for the Transformation of American Law' (1983) 93 Yale L. J. 135.

8
FAA, 9 U.S.C. § 2.

9
473 U.S. 614 (1985).

10
New York Convention, Art. II.3.

11
133 S. Ct. 2304 (2013).

12
563 U.S. 333 (2011).

13
514 U.S. 938 (1995).

14
514 U.S. at 942(943.

15
Ibid. at 943; see also Granite Rock Co. v. International Brotherhood of Teamsters, 561 U.S. 287 (2010).

16
134 S. Ct. 1198 (2014).

17
Lindo v. NCL (Bahamas), Ltd. , 652 F.3d 1257 (11th Cir. 2011).

18
Answers in Genesis of Kentucky, Inc. v. Creation Ministries International, Ltd. , 556 F.3d 459 (6th Cir. 2009).

19
FAA, 9 U.S.C. § 5.

20
FAA, 9 U.S.C. § 7.

21
Ibid.

22
FAA, 9 U.S.C. § 10(a).

23
See Flexible Manufacturing Systems v. Super Products Corp. , 86 F.3d 96 (7th Cir. 1996).

24
Ibid. at 100.

25
Draft Restatement, Comment a.(iii), p. 319.

26
582 F.3d 393 (2d Cir. 2009).

27
§ 4-29.