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Archive for May, 2009

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LinkedIn Commercial and Industry Arbitration and Mediation Group Follow-Up Post

May 29th, 2009 Commercial and Industry Arbitration and Mediation Group, General 1 Comment »

On May 21, 2009 we announced the formation of a LinkedIn Commercial and Industry Arbitration and Mediation Group (post available here).  At that time the group was 29 members strong, and we are pleased to report that the group has since grown to 65 members.  There have been a number of interesting discussions, and group members have access to several ADR blogs, as well as articles posted by other group members.  It is an excellent networking and educational opportunity for anyone interested in commercial and industry ADR. 

We welcome new members.  Persons who should consider joining this group include arbitrators; mediators; in-house and outside counsel; law professors; dispute-resolution consultants; members of  ADR organizations; business entity representatives and principals whose day-to-day responsibilities include dispute resolution; and law students and other students of commercial and industry ADR. 

If you are already a member of LinkedIn, please click here to apply for membership in the Group.  If you are not a LinkedIn member, click here, and you will be guided through the process of creating a profile (which does not have to be completed in one step).  Once your profile is started, and you have a log-in name and password, you can apply for membership in the Group.  Joining LinkedIn is free, as is joining the group. 

We hope you’ll join us and participate in the discussions!

Hall Street Meets Pearl Street: Stolt-Nielsen and the Federal Arbitration Act’s New Section 10(a)(4)

May 29th, 2009 Arbitrability, Authority of Arbitrators, Awards, Grounds for Vacatur, Practice and Procedure, United States Court of Appeals for the Second Circuit 11 Comments »

Introduction

Victoria VanBuren’s May 4, 2009 guest post,  Hall Street Meets S. Maestri Place: What Standards of Review will the Fifth Circuit Apply to Arbitration Awards Under FAA Section 10(a)(4) after Citigroup? (available here), looked at the scope of Section 10(a)(4) in the Fifth Circuit after Hall Street Assoc. v. Mattel, Inc., 128 S. Ct. 1396 (2008) and Citigroup Global Markets, Inc. v. Bacon, 562 F.3d 349 (5th Cir. 2009). Today we look at the scope of Section 10(a)(4) in the Second Circuit after Hall Street met Pearl Street in Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), petition for cert. filed Mar. 26, 2009 (No. 08-1198), in which the Second Circuit said that, notwithstanding its prior case law suggesting otherwise,  “manifest disregard of the law” is not an independent basis for vacating an arbitration award foreclosed by Hall Street, but one encompassed within Section 10(a)(4)’s prohibition against arbitrators “exceed[ing] their powers.  .  .  .”  As we shall see, the Second Circuit justified that holding by taking a more expansive view of Section 10(a)(4) than it previously had, a view that may also permit challenges based on “manifest disregard of the agreement.”  Continue Reading »

Disputing and The Forum Have Formed a Commercial and Industry Arbitration and Mediation Group on LinkedIn!

May 21st, 2009 General 9 Comments »

On May 19, 2009 Victoria VanBuren, blog master of Disputing, I, and others formed a LinkedIn Group called the Commercial and Industry Arbitration and Mediation Group.  The group is a forum for the discussion of issues and the sharing of information concerning commercial and industry arbitration, mediation and other forms of alternative dispute resolution.  Participation in the Group is an excellent networking and educational opportunity.  As of the time this was posted, the group has 29 members with diverse backgrounds, all of whom are interested in commercial and industry ADR. 

Victoria VanBuren — a talented young ADR and intellectual property attorney, Forum guest blogger, and computer science student  — and I are principally responsible for the day-to-day management of the group.  Victoria’s CV is here.  We have also enlisted the support of the following experienced and talented ADR professionals who also act as Group Managers:   

Don Philbin – Don is a Panelist and Shareholder at Conflict Solutions of Texas, and an adjunct professor at Pepperdine University School of Law’s prestigious Straus Institute on Dispute Resolution. Victoria introduced me to Don recently and I have found that he not only is a pleasure to work with, but also has a wonderful sense of humor. We are quite honored to have someone of Don’s caliber participate as a Group Manager.  Learn more about him here. 

Karl Bayer – Karl is a skilled trial lawyer and Dispute Resolution Expert and is the principal of Karl Bayer Dispute Resolution.  Karl has been a great mentor and role model for Victoria and has an excellent practice. You can learn more about Karl and his practice here.  We are all looking forward to Karl’s active participation in the group after he finishes up with a rather grueling, two-month long trial. 

Robert Bear – Robert (CV here) is the owner of RAB Actuarial Solutions, where he offers his services as a consulting actuary, reinsurance consultant and insurance and reinsurance arbitrator. Before forming RAB, Robert was a Senior Vice President and Chief Actuary at PXRE Group Ltd. Robert brings a lot of experience to bear, including experience in the actuarial field, which is relevant to both insurance and reinsurance dispute resolution.  Indeed, panels of actuaries like Robert are sometimes called upon to resolve actuarial disputes pursuant to commutation clauses in reinsurance contracts, and individual actuaries also serve as members of regular reinsurance arbitration panels resolving less arcane reinsurance disputes.  Once you think you really understand the reinsurance business, go talk to an actuary!

Commercial and industry ADR is a broad topic and covers the spectrum from arbitrations and mediations arising out of general, commercial contracts through more specialized forms of dispute resolution used by various industries, including the reinsurance, maritime, telecommunications, securities, financial services, construction industries and others.  We also consider labor and employment arbitration and mediation to be within this spectrum. 

Topics of group discussion may include, but are not limited to, practice and procedure under the Federal Arbitration Act, the New York Convention, the Panama Convention and state arbitration statutes; recent state and federal case law and legislative developments, including the Arbitration Fairness Act of 2009 and other proposed anti-arbitration legislation; news and events pertinent to commercial and industry ADR; international commercial and industry arbitration; the mediation and arbitration process; class arbitration; domestic and international arbitration and mediation organizations and societies and their rules; arbitration and mediation strategies for parties, arbitrators and mediators; industry-specific arbitration practices and procedures; labor arbitration; employment arbitration and mediation; arbitration and mediation technology; proposals for improvement of the process; arbitrator and mediator ethics; confidentiality; and other issues pertinent to commercial and industry ADR. 

Persons who should consider joining this group include arbitrators; mediators; in-house and outside counsel; law professors; dispute-resolution consultants; members of  ADR organizations; business entity representatives and principals whose day-to-day responsibilities include dispute resolution; and law students and other students of commercial and industry ADR.  The purpose of the group is information sharing and professional networking, not job searching or marketing.  Job postings, if any, should be listed in the Jobs Section (as opposed to the Discussion Section). 

If you are already a member of LinkedIn, please click here to apply for membership in the Group.  If you are not a LinkedIn member, click here, and you will be guided through the process of creating a profile (which does not have to be completed in one step).  Once your profile is started, and you have a log-in name and password, you can apply for membership in the Group.  Joining LinkedIn is free, as is joining the group. 

We hope you’ll join us and participate in the discussions! 

[Editor’s note:  For a good book on using LinkedIn as a networking tool, read Jan Vermeiren, How to Really Use LinkedIn (Booksurge 2009).  There are also a number of other books on the subject available at Amazon.com or your local bookstore.]

Reinsurance Nuts & Bolts: Honorable Engagement Clauses

May 18th, 2009 Arbitrability, Authority of Arbitrators, Nuts & Bolts, Nuts & Bolts: Reinsurance, Reinsurance Arbitration 1 Comment »

Introduction

In today’s Nuts & Bolts post we take a brief look at honorable engagement clauses, which are sometimes referred to as “honorable undertaking” clauses.  Honorable engagement clauses are, for practical purposes, a species of choice of law clause.   Generally, they confer upon arbitration panels a degree of freedom to depart from the strict rules of law and evidence, and to interpret the contract as an honorable engagement rather than literally according to its terms.  They are premised on the now arguably outmoded historical concept that a reinsurance contract is more than a contract, but an honorable undertaking, a deal that  is closed when the parties shake hands over a cocktail (or three), and one by which the parties are honor-bound to abide.  They also recognize that reinsurance is an arcane business with its own peculiar set of customs, practices and norms, and that, if the parties so agree, arbitrators should be reasonably free to apply these norms in deciding a case, even if a court faced with the same facts would or could not. 

Honorable engagement clauses are more common in older reinsurance contracts than in those written today.  But many reinsurance disputes arise out of long-tail asbestos or environmental claims arising out of decades-old contracts, a great many of which contain these clauses.  And the clauses can have some significant implications in those disputes. Continue Reading »

Guest Post — Mediating Reinsurance Disputes: A Case Study

May 14th, 2009 Guest Posts, Mediation, Reinsurance Mediation 2 Comments »

Introduction

I am very pleased that Phil Loree Jr. asked me to guest blog for the Loree Reinsurance and Arbitration Law Forum.  I have known Phil for quite some time and have worked with him on various matters over the years.  Phil suggested that I write something about my experiences mediating reinsurance disputes.  This guest post is a revised version of an article I published in the September 2006 edition of JTW News, a popular, U.K.-based reinsurance trade publication.    

As the aggravation, expense and amount of time required to arbitrate or litigate escalate, parties to reinsurance disputes are beginning to opt either by contract or ad hoc agreement to mediate reinsurance disputes. For them, depending upon the case, less is more; that is, compared to arbitration or litigation, mediation is a less aggressive, less costly, less damaging and less divisive alternative to tip the balance of power and opportunity in both parties’ favor.  A careful, experienced and patient mediator views disputes between parties, not as a battle, but as an opportunity to empower them to structure a resolution that best meets their respective short and long term needs. 

Despite this trend, many still claim mediation is unnecessary, expensive and unproductive — complaints based mostly upon its non-binding nature and prior “bad” experiences with ineffective mediators.  From my discussions with many satisfied client and lawyer participants and my own work mediating cases, I have found that parties and their counsel can and do benefit in many ways — even if no settlement immediately results — from mediating their reinsurance disputes before an effective mediator.  Continue Reading »

Introducing Loree Reinsurance and Arbitration Law Forum Guest Blogger Peter A. Scarpato, Esq.

May 14th, 2009 General, Guest Posts, Mediation, Reinsurance Mediation 2 Comments »

This week we are delighted and honored to feature Peter A. Scarpato, Esq. as a guest blogger on the Forum.  I have known Peter since 1990, when he was the General Counsel of American Centennial Insurance Company in run-off, and I was an associate at Miller, Singer, Raives & Brandes, P.C.   We have stayed in touch over the years and have worked together on matters where Peter was the key client contact, both at American Centennial, and later, at the American International Group. 

Currently the President of Conflict Resolved, LLC, Peter is a full-time ADR professional who has extensive experience as an arbitrator, umpire, counsel, mediator and negotiator in hundreds of reinsurance and other commercial disputes, settlements and commutations.  He is a run-off specialist for all forms of property and casualty insurance and reinsurance; warranty; surety; and various types of program business.  He is an ARIAS-U.S. certified arbitrator and mediator who also holds ADR certifications or positions for FINRA Dispute Resolution (formerly the National Association of Securities Dealers (NASD));  Executive Mediator Services; Reinsurance Association of America (RAA); Construction Dispute Resolution Services LLC; the United States District Court for the Eastern District of New York; New York State Supreme Court – Commercial Division; and Case Closure, LLC.  Continue Reading »

Arthur Andersen LLP v. Carlisle: The United States Supreme Court Says that Non-Signatories Can Enforce Arbitration Agreements Whenever State Law Would Permit them to Enforce Contracts Generally

May 12th, 2009 Appellate Practice, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Sixth Circuit, United States Supreme Court 1 Comment »

Introduction

The Second Circuit and other courts have recognized that signatories may enforce under Sections 3 and 4 of the Federal Arbitration Act  arbitration agreements against non-signatories whenever common-law principles of contract and agency would permit such enforcement, and that non-signatories may enforce arbitration agreements against signatories at least under an estoppel theory, and possibly under other theories of contract and agency.  See, e.g., Ross v. American Express Co., 547 F.3d 137, 143 & n.3 (2d Cir. 2008); Ross v. American Express Co., 478 F.3d 96, 99 (2d Cir. 2007); Astra Oil Co. v. Rover Navigation, Ltd., 344 F.3d 276, 279-80 & n.2 (2d Cir. 2003); Thomson-CSF, S.A. v. American Arbitration Assoc., 64 F.3d 773, 776-80 (2d Cir. 1995).  The Second Circuit likewise allows interlocutory appeals from the denial of  Section 4 motions to compel arbitration, or Section 3 motions to stay litigation in favor of arbitration, brought by or against non-signatories.  See, generally, 478 F.3d at 99.

Certain other circuits have held that nonsigatories may not invoke Section 3 or 4 based on an estoppel theory, or at least cannot appeal on an interlocutory basis the denial of an estoppel-based Section 3 or 4 application.  See, e.g., DSMC Inc. v. Convera Corp., 349 F.2d 679, 683-84 (D.C. Cir. 2003) (then Roberts, J.); Re Universal Service Fund Tel. Billing Practice Litigation v.Sprint Communications Co., 428 F.3d 940, 945 (10th Cir. 2005) (limiting holding to whether Court of Appeals had appellate jurisdiction at interlocutory stage).  These Courts have relied on Section 3’s and 4’s requirement that the relief sought must be “under” a written agreement to arbitrate, and their determination that an estoppel claim by a non-signatory is not one “under” a written agreement to arbitrate.    

Arthur Andersen:  Issues and Holding

On May 4, 2009, in Arthur Andersen LLP v. Carlisle, ___ U.S. ___ (2009) (Scalia, J.), the United States Supreme Court resolved the circuit split in favor of the courts permitting non-signatories to avail themselves of Federal Arbitration Act Sections 3 and 4.  There were two issues before the Court:

  1. Whether the federal appellate courts have jurisdiction under Federal Arbitration Act Section 16(a) to review denials of stays of litigation requested by litigants who were not parties to the arbitration agreement; and
  2. Whether Federal Arbitration Act Section 3 can ever mandate a stay sought by a nonsignatory to an arbitration agreement.

The Court held that federal appellate courts have jurisdiction to review appeals from denials of stays sought by non-signatories and that Section 3 can mandate a stay where applicable state law allows the enforcement of an agreement by or against a non-signatory.   Justice Souter dissented in an opinion joined by Chief Justice Roberts and Justice Stevens.  Continue Reading »

Recent United States Supreme Court Decision May Further Undermine ReliaStar Life Ins. v. EMC National Life Co. Holding

May 8th, 2009 Arbitrability, Authority of Arbitrators, Awards, Life Reinsurance, New York Court of Appeals, United States Court of Appeals for the Second Circuit, United States Supreme Court 1 Comment »

We recently critiqued ReliaStar Life Ins. Co. v. EMC National Life Co., ___ F.3d ___ (2009) (Raggi, J.), in which the United States Court of Appeals for the Second Circuit held that an arbitration panel was authorized to award under the bad faith exception to the American Rule attorney and arbitrator fees to a ceding company in a case where the parties had agreed that each “shall bear the expense of its own arbitrator.  .  .  and related outside attorneys’ fees, and shall jointly and equally bear with the other party the expenses of the third arbitrator.”  We believe that the majority opinion did not faithfully apply New York’s strict rules of contract interpretation and construction, which the parties expressly agreed would apply.  You can find our critique here, and a report on the case here.   Continue Reading »

The Senate Weighs in With Its Own Arbitration Fairness Act

May 7th, 2009 Arbitrability, Authority of Arbitrators, Legislative Developments, United States Supreme Court 1 Comment »

On April 29 — a/k/a “Arbitration Fairness Day” – – Senator Russ Feingold (D-WI) introduced the Senate’s version of the Arbitration Fairness Act of 2009 (S. 931).  The Senate’s version  tracks the House version in many respects, but there are some important differences between the two. 

The Senate Arbitration Fairness Act adds a Chapter 4 to the Federal Arbitration Act, rather than amending Section 2 of Chapter 1.  This Proposed Chapter 4 consists of two sections:  Section 401, entitled “Definitions”; and Section 402, entitled “Validity and Enforceability.”  Proposed Section 402(a) states:  “In General – Notwithstanding any other provision of this title, no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment, consumer, franchise, or civil rights dispute.”  Proposed Section 402(b) provides: 

(1)  IN GENERAL – An issue as to whether this chapter applies to an arbitration agreement shall be determined under Federal law.  The applicability of this chapter to an agreement to arbitrate and the validity and enforceability of an agreement to arbitrate to which this chapter applies shall be determined by the court, rather than the arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement. 

(2)  COLLECTIVE BARGAINING AGREEMENTS – Nothing in this chapter shall apply to any arbitration provision in a contract between an employer and a labor organization or between labor organizations, except that no such arbitration provision shall have the effect of waiving the right of an employee to seek judicial enforcement of a right arising under a provision of the Constitution of the United States, a State constitution, or a Federal or State statute, or public policy arising therefrom.  Continue Reading »

Guest Post: Hall Street Meets S. Maestri Place: What Standards of Review will the Fifth Circuit Apply to Arbitration Awards Under FAA Section 10(a)(4) after Citigroup?

May 4th, 2009 Awards, Grounds for Vacatur, Guest Posts, United States Court of Appeals for the Fifth Circuit 5 Comments »

Introduction

I am delighted to be invited to guest-blog today by Philip J. Loree Jr. of the Loree Reinsurance and Arbitration Law Forum.  I was thrilled that Phil jumped right on it when I suggested that we should guest-post on each others blogs in the near future. 

Phil did an outstanding job discussing the Arbitration Fairness Act of 2009 (read the post here) last week as a guest-blogger at Disputing.  He suggested that I  explore the topic of “manifest disregard of the law,” in light of the United States Supreme Court decision Hall Street Associates, LLC v. Mattel, Inc. 128 S.Ct. 1396 (2008), and the Fifth Circuit ruling in Citigroup Global Markets, Inc. v. Bacon, ___ F.3d ___ (5th Cir. 2009).  So, after conquering some initial, mild trepidation about my first guest-blogging experience, here I am.  Continue Reading »

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