main image

Archive for the ‘Personal Jurisdiction’ Category

Confirming Awards Part II | Post-Award Federal Arbitration Act Enforcement Litigation | Section 9 of the Federal Arbitration Act | Businessperson’s Federal Arbitration Act FAQ Guide

June 19th, 2020 Arbitration and Mediation FAQs, Arbitration as a Matter of Consent, Arbitration Law, Arbitration Practice and Procedure, Awards, Businessperson's FAQ Guide to the Federal Arbitration Act, Confirmation of Awards, Consent to Confirmation, FAA Chapter 1, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 9, Nuts & Bolts, Nuts & Bolts: Arbitration, Personal Jurisdiction, Petition or Application to Confirm Award, Section 9, Small Business B-2-B Arbitration, Statute of Limitations 1 Comment »
Confirming Awards Procedure

In the last segment of this Businessperson’s Federal Arbitration Act FAQ Guide, we discussed the substantive requirements for confirming a Chapter One Domestic Award. Now we turn to the procedural requirements.

What are the Procedural Requirements for Confirming a Chapter One Domestic Award?  

The key procedural requirements for confirming arbitration awards are:

  1. The party seeking confirmation may apply for it “within one year after the award is made.  .  .”;
  2. Notice of application must be properly served;
  3. Venue must be proper; and
  4. The “court must grant” confirmation “unless the award is vacated, modified or corrected” under Section 10 or 11 of the FAA.

9 U.S.C. § 9.

Continue Reading »

Arbitral Subpoenas | Section 7 of the Federal Arbitration Act | Businessperson’s Federal Arbitration Act FAQ Guide | Nuts and Bolts of Pre-Award Federal Arbitration Act Practice

May 14th, 2020 Arbitral Subpoenas, Arbitration Law, Arbitration Practice and Procedure, FAA Chapter 1, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 7, Federal Rules of Civil Procedure, Nuts & Bolts, Nuts & Bolts: Arbitration, Personal Jurisdiction, Practice and Procedure, Pre-Award Federal Arbitration Act Litigation, Section 7, Subpoenas 4 Comments »
arbitral subpoenas Section 7

This segment of the Businessperson’s Federal Arbitration Act FAQ Guide concerns the enforcement of arbitral subpoenas under Section 7 of the FAA.

Arbitrators can require the parties before them to produce documents, appear for depositions, and testify at hearings. That power is not self-executing but is derived from Federal Arbitration Act-authorized judicial enforcement of arbitration agreements and awards. If, for example, parties do not comply, the arbitrators may, absent contract language to the contrary, impose sanctions, including attorney fee awards or adverse inferences on merits issues.

But resolving disputes often requires testimony and documentary evidence from persons who are not parties to the dispute. Courts have subpoena power and can compel third-party witnesses within their jurisdiction to testify, produce documents, or both. They can enforce that power through contempt sanctions.

Arbitrators have no such inherent power over third parties and FAA-authorized judicial power to confirm (i.e., reduce to judgment) arbitration awards does nothing to impose legally enforceable obligations on persons not lawfully parties to, or otherwise bound by, those arbitration awards.

Section 7: Arbitral Subpoenas

Continue Reading »

Venue and Hearing Procedure | Application to Compel Arbitration | Businessperson’s Federal Arbitration Act FAQ Guide | Nuts and Bolts of Pre-Award Federal Arbitration Act Practice under Sections 2, 3, and 4 (Part IV)

April 27th, 2020 Application to Compel Arbitration, Arbitration and Mediation FAQs, Arbitration Practice and Procedure, Businessperson's FAQ Guide to the Federal Arbitration Act, FAA Chapter 1, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 4, Federal Courts, Federal Rules of Civil Procedure, Motion to Compel Arbitration, Nuts & Bolts: Arbitration, Personal Jurisdiction, Petition to Compel Arbitration, Practice and Procedure, Small Business B-2-B Arbitration 2 Comments »
hearing procedure venue

This segment of the Businessperson’s Federal Arbitration ACT FAQ Guide focuses on the venue and hearing procedure aspects of compelling arbitration under Section 4 of the Federal Arbitration Act.  

The last instalment discussed the following FAQ related to Section 4 applications to compel arbitration: “What Papers Comprise an Application to Compel Arbitration and how are they Served?”

This segment addresses two FAQs:

  1. How does a Federal Court “Hear” an Application to Compel Arbitration?  
  2. In what Federal Court may an Application to Compel Arbitration be Filed?

Introduction: Section 4 and its Component Parts

As explained in our prior posts, Section 4 consists of 386 words jammed into a single paragraph, but it is easier to digest and follow if we divide it into subparagraphs or subsections, which we do below, using bold and bracketed text: 

[(a) Who may Petition what Court When and for What.] A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.

[(b) Notice and Service of Petition.] Five days’ notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the manner provided by the Federal Rules of Civil Procedure.

[(c) Hearing Procedure and Venue.] The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. The hearing and proceedings, under such agreement, shall be within the district in which the petition for an order directing such arbitration is filed. If the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof.

[(d) Jury Trial, where Applicable] If no jury trial be demanded by the party alleged to be in default, or if the matter in dispute is within admiralty jurisdiction, the court shall hear and determine such issue. Where such an issue is raised, the party alleged to be in default may, except in cases of admiralty, on or before the return day of the notice of application, demand a jury trial of such issue, and upon such demand the court shall make an order referring the issue or issues to a jury in the manner provided by the Federal Rules of Civil Procedure, or may specially call a jury for that purpose.

[(e) Disposition upon Trial.] If the jury find that no agreement in writing for arbitration was made or that there is no default in proceeding thereunder, the proceeding shall be dismissed. If the jury find that an agreement for arbitration was made in writing and that there is a default in proceeding thereunder, the court shall make an order summarily directing the parties to proceed with the arbitration in accordance with the terms thereof.

9 U.S.C. § 4 (bold and bracketed text added).

How does a Federal Court “Hear” an Application to Compel Arbitration?

What we refer to as “Section 4(c)” provides that “[t]he court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.” But, Section 4 continues, “[i]f the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof.” 9 U.S.C. § 4.

Continue Reading »

California Supreme Court Upholds Default Judgment Confirming $414,601,200 Default International Arbitration Award

April 20th, 2020 Arbitration Practice and Procedure, Award Confirmed, Awards, California Supreme Court, Confirmation of Awards, Default Award, FAA Chapter 1, FAA Chapter 2, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 9, International Arbitration, Personal Jurisdiction, Practice and Procedure, Service of Process Comments Off on California Supreme Court Upholds Default Judgment Confirming $414,601,200 Default International Arbitration Award
default judgment award confirm

On April 2, 2020 the California Supreme Court rejected a service-of-process challenge to a default judgment confirming a $414,601,200 international arbitration award. The parties agreed that notice could be given, and service of process made, by Federal Express (“FedEx”), and the Court held that the petitioner was not required to make service under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, November 15, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638 (the “Hague Convention”).  

Facts and Procedural History

Party A, apparently headquartered in the U.S., and Party B, headquartered in China, entered into a memorandum of understanding (“MOU”), which contemplated the two companies forming another. But that didn’t happen and Party A demanded arbitration against Party B under the arbitration agreement in the MOU.

Party A served the arbitration agreement by FedEx, as agreed. Party B did not appear in the arbitration and the arbitrator, after hearing evidence, entered a default arbitration award. Service of the arbitration demand was made by FedEx, and Party B was given notice of each of the proceedings that comprised the arbitration.

The Arbitrator made a default award against B in the amount of $414,601,200. Party A commenced confirmation proceedings in a California state court, serving B by FedEx, as expressly agreed in the parties’ agreement.

But Party B did not appear at the confirmation proceedings, and the Court entered a default judgment confirming the award.

Party B then challenged the default judgment, contending that the Court lacked personal jurisdiction over it because service was made by FedEx, and not through the procedures prescribed by the Hague Convention.

The trial court rejected the challenge, the intermediate appellate court reversed, and the California Supreme Court, in a unanimous decision, reversed the intermediate appellate court.

The California Supreme Court’s Decision to Uphold the Default Judgment

The question before the California Supreme Court was whether the Hague Convention preempted the parties’ right to serve by their agreed method of service, FedEx. California’s highest court said the answer was “no.”

Continue Reading »