International Arbitration and Litigation

315 Pages·2014·1.28 MB·English

International Arbitration and Litigation

CRAIG C. MARTIN
JASON J. GREEN

JENNER & BLOCK LLP

AUTHOR INFORMATION

 CRAIG C. MARTIN  JASON J. GREEN1
Partner Associate General Counsel
Tel: [phone] CC Industries, Inc.
Fax: [phone] Tel: 312 750-6717
E-Mail: [email protected] E-Mail: [email protected]

CRAIG C. MARTIN is Co-Chair of Jenner & Block’s Litigation Department. He represents
corporations in international arbitrations, cross-border disputes and investigations. He also serves as
lead trial and appellate counsel in litigation matters in the state and federal courts throughout the
United States. In addition to his litigation and disputes practice, Mr. Martin counsels boards and
board committees of public and private companies. Mr. Martin is AV Peer Review Rated, Martindale-
Hubbell’s highest peer recognition for ethical standards and legal ability. In 2009, members of the
Leading Lawyers Network named him one of the “Top 100 Business Lawyers in Illinois.” In 2011, he
received the Judge Learned Hand Human Relations Award from the American Jewish Committee, for
his extraordinary professional accomplishments and dedication to philanthropic and civic endeavors.
Mr. Martin is a member of the Commercial Club of Chicago, the Economic Club of Chicago, a
member of the board of directors of the Lyric Opera of Chicago and its Executive Committee, and the
Chairman of the Board of Directors of the Boys and Girls Clubs of Chicago. He is a member of the
American Bar Association and its Section of Litigation, where he has served in various leadership
positions, and co-chaired the 2012 annual meeting in Chicago. Mr. Martin attended the University of
Notre Dame, receiving his B.A. Magna Cum Laude in 1985, and Harvard Law School, receiving his
J.D. in 1988.

JASON J. GREEN is the Associate General Counsel at CC Industries, Inc., a holding and
management company operated by the prominent, Chicago-based Crown family. Mr. Green was
previously a partner at Jenner & Block, where he focused his practice primarily on the areas of
complex commercial litigation, including breach of contract, fraud, and other business torts,
bankruptcy litigation, and technology litigation. Mr. Green has represented Fortune 500 clients in state
and federal courts, before arbitration panels, and in cross-border disputes around the world. He has
been recognized by Illinois Super Lawyers as a “Rising Star” in business litigation in 2010, 2011,
2012, and 2013. In 2003, Mr. Green was recognized with the 2003 Albert E. Jenner, Jr. Pro Bono
Award for his work in successfully defending death row inmates from challenges to the clemency
orders they had been issued by former Illinois Governor George Ryan. Mr. Green attended the
University of Illinois, Urbana-Champaign, receiving his B.S. in Civil Engineering in 1999 and The John
Marshall Law School, receiving his J.D. in 2002.

1 Mr. Green previously was a Partner at Jenner & Block LLP
© 2014 Jenner & Block LLP. This publication is not intended to provide legal advice but to provide general
information on legal matters. Transmission is not intended to create and receipt does not establish an attorney-
client relationship. Readers should seek specific legal advice before taking any action with respect to matters
mentioned in this publication. The attorney responsible for this publication is Craig C. Martin. ATTORNEY
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TABLE OF CONTENTS

I. CHAPTER 1: INTRODUCTION TO INTERNATIONAL ARBITRATION ...................1
A. The History of International Arbitration ..................................................................1
B. Other Forms of International Alternative Dispute Resolution .................................3
C. Power and Discretion of Arbitral Panel ...................................................................5
D. Reasons for Preferring International Arbitration .....................................................5
1. Neutral Forum ..............................................................................................5
2. Discovery .....................................................................................................6
3. Confidentiality .............................................................................................7
4. Non-Precedential Judgment .........................................................................7
5. Flexibility .....................................................................................................7
6. Finality .........................................................................................................9
7. Speed ..........................................................................................................11
8. Cost ............................................................................................................11
E. Ad-Hoc Arbitration ................................................................................................12
F. Discussion of the Major Institutional Arbitral Regimes ........................................13
G. Other Arbitral Organizations .................................................................................16
II. CHAPTER 2: ROLE OF NATIONAL LAW ...................................................................17
A. Substantive Rules Of Arbitration v. Procedural Rules Of Arbitration ..................17
1. Substantive Rules of Arbitration ................................................................17
a. Choice of Law Provisions ..............................................................17
b. Determining Whether the FAA or State Law Applies ...................18
2. Procedural Rules of Arbitration .................................................................20
B. The New York Convention’s Treatment Of National Law ...................................21
C. National Arbitration Statutes .................................................................................22
1. United States ..............................................................................................22
a. Federal Arbitration Act ..................................................................22
b. Relevant State Laws Governing Arbitration ..................................23
2. Other Relevant National Law ....................................................................25
3. U.S. Adoption of UNCITRAL Model Law ...............................................26

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III. CHAPTER 3: DRAFTING THE AGREEMENT TO ARBITRATE ...............................26
A. Introduction ............................................................................................................26
B. Where Arbitral Clauses Appear .............................................................................27
1. Commercial Contracts ...............................................................................27
2. Post-Dispute Agreements...........................................................................27
C. Best Practices for Drafting .....................................................................................27
1. Scope of Arbitration ...................................................................................28
2. Exclusivity of Arbitration ..........................................................................29
3. Finality of Arbitration ................................................................................29
4. Recommended Elements for Arbitral Clauses ...........................................30
5. Sample Provisions from Various Arbitral Regimes...................................31
D. Important Considerations in Drafting Arbitral Clauses .........................................33
1. Confidentiality ...........................................................................................33
2. Choice of Law ............................................................................................35
a. Law governing the arbitration agreement. .....................................35
b. Procedural law. ..............................................................................36
c. Substantive law. .............................................................................37
3. Place of Arbitration ....................................................................................38
4. Arbitral Awards .........................................................................................42
a. Allowable Damages. ......................................................................42
b. Currency. ........................................................................................43
c. Interest............................................................................................43
d. Costs and Attorneys’ Fees. ............................................................45
5. Interim Relief .............................................................................................46
6. Discovery ...................................................................................................46
7. Split Clauses, Stepped Clauses, and Conditions Precedent .......................47
8. Arbitrator Selection and Qualifications .....................................................47
9. Waiver of Sovereign Immunity .................................................................49
10. Summary Disposition.................................................................................49
11. Consent to Entry of Judgment....................................................................50
12. Kompetenz/Kompetenz Doctrine ...............................................................51
IV. CHAPTER 4: VALIDITY OF AN AGREEMENT TO ARBITRATE ............................52
A. New York Convention ...........................................................................................52
1. The Agreement Form: Must be in writing .................................................53
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2. Eligible Disputes: Existing or future disputes, often limited to
those of a commercial nature, that are capable of settlement by
arbitration, were intended to be submitted to arbitration, and
are not purely domestic ..............................................................................54
3. Exceptions to Recognition: Null and void, inoperative, or
incapable of being performed ....................................................................57
B. Panama Convention ...............................................................................................58
1. The Agreement Form: Must be in Writing ................................................58
2. Eligible Disputes: Existing or future disputes, arising with
respect to a commercial transaction, intended to be submitted
to arbitration, and not purely domestic ......................................................59
3. Exceptions to Recognition: None...............................................................60
V. CHAPTER 5: CHOICE OF LAW ....................................................................................60
A. Choice of Law Governing Validity of Arbitration Agreement ..............................60
1. Arbitral Law Regarding Validity of Agreement to Arbitrate ....................61
2. National Law Regarding Validity of Agreement to Arbitrate ...................62
B. Choice of Procedural Law .....................................................................................63
C. Choice of Substantive Law ....................................................................................66
D. Choice of Law Governing Enforcement of Arbitral Awards .................................68
1. Arbitral Regime .........................................................................................68
2. National Law ..............................................................................................68
a. Examination of National Arbitration Laws ....................................70
VI. CHAPTER 6: COMPOSITION OF ARBITRATION PANEL AND LOCATION OF
ARBITRATION ................................................................................................................71
A. Composition of Arbitral Panel ...............................................................................72
1. The Number of Arbitrator(s) ......................................................................72
2. Selecting the Arbitrator(s) ..........................................................................73
3. Selection and Examination of Available Arbitrators .................................74
4. Challenging Selection of an Arbitrator ......................................................74
5. Determination of Arbitrator’s Fees ............................................................76
B. Seat of Arbitration (Location) ................................................................................76
1. Default Location of Various Arbitral Regimes ..........................................77
2. Party Selected Location .............................................................................77
a. Arbitrating in Different States .......................................................77
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b. UNCITRAL Model Law ................................................................78
VII. CHAPTER 7: CONSOLIDATION AND MULTIPARTY ARBITRATION ..................79
A. Consolidation of Multiple Arbitrations ..................................................................79
1. Existence of Multiple Disputes ..................................................................79
2. Consent Requirement .................................................................................80
B. Third Parties in International Arbitration ..............................................................83
C. Basis for Third Party Joinder .................................................................................85
VIII. CHAPTER 8: COMMENCING ARBITRATION ...........................................................87
A. Filing the Notice of Arbitration .............................................................................87
B. Service of Process ..................................................................................................88
C. Administrative Issues .............................................................................................88
D. Statement of Claim ................................................................................................89
E. Costs of Commencing Arbitration .........................................................................89
F. Jurisdiction .............................................................................................................91
G. Potential Interim Relief ..........................................................................................91
1. Use of National Courts to Obtain Interim Relief .......................................93
2. Enforcement of Interim Arbitration Awards ..............................................94
H. Appointment of the Arbitral Panel .........................................................................95
IX. CHAPTER 9: RESPONSE TO FILING OF ARBITRATION .........................................95
A. Response to Notice of Arbitration or Statement of Defense ..................................95
B. Counterclaims ........................................................................................................96
C. Failure to Reply ......................................................................................................97
D. Anti-Suit Injunctions ..............................................................................................98
E. Challenges to Jurisdiction ......................................................................................99
1. Challenges Before the Arbitration Panel ...................................................99
2. Challenges in National Courts .................................................................101
F. Sovereign Immunity.............................................................................................103
X. CHAPTER 10: DISCOVERY IN ARBITRATION .......................................................104
A. Discovery in Litigation vs. Arbitration ................................................................104
1. Civil Law Systems ...................................................................................105
2. Common Law Systems ............................................................................105
B. Rules of Leading Arbitral Authorities Relevant to Document
Production ............................................................................................................106
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1. International Chamber of Commerce Rules of Arbitration: ....................106
2. UNCITRAL Arbitration Rules: ...............................................................106
3. London Court of International Arbitration Arbitration Rules: ................107
4. American Arbitration Association Commercial Arbitration
Rules and Mediation Procedures: ............................................................107
5. China International Economic & Trade Arbitration
Commission Rules: ..................................................................................108
6. Japan Commercial Arbitration Association Rules: ..................................108
7. World Intellectual Property Organization Arbitration Rules: ..................109
8. ICDR – Guidelines for Arbitrators Concerning Exchanges of
Information : ............................................................................................109
9. AAA-ICDR International Arbitration Rules: ...........................................110
10. International Bar Association Rules on the Taking of Evidence
in International Arbitration: .....................................................................110
11. International Institute for Conflict Prevention & Resolution
Protocol on Disclosure of Documents and Presentation of
Witnesses in Commercial Arbitration: .....................................................111
12. Singapore International Arbitration Centre Arbitration Rules: ...............112
C. Drafting Discovery Requests ...............................................................................113
1. IBA Rules on the Taking of Evidence in International
Arbitration: ...............................................................................................113
a. Specificity . ..................................................................................113
b. Materiality ....................................................................................113
c. Lack of Availability to the Requesting Party and
Relative Financial Burden of the Parties .....................................113
d. Basis for Belief that the Responding Party Has the
Requested Information. ................................................................113
D. Electronic Discovery ............................................................................................113
1. A Developing Issue ..................................................................................113
2. Sample Guidelines: ..................................................................................114
E. Discovery Disputes ..............................................................................................115
1. ICDR Guidelines for Arbitrators Concerning Exchanges of
Information: .............................................................................................115
2. IBA Rules on the Taking of Evidence in International
Arbitration: ...............................................................................................115
F. Compelling 3rd Party Evidence or Witnesses .....................................................117
1. Lack of Enforcement Power by the Panel ................................................117
2. Assistance of National Courts ..................................................................118
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a. United States ................................................................................118
1) 28 U.S.C. § 1782 ..............................................................118
2) Relevant Case Law ..........................................................118
b. Europe ..........................................................................................121
1) England ............................................................................121
2) Switzerland ......................................................................121
G. Depositions ..........................................................................................................121
1. ICDR Guidelines for Arbitrators Concerning Exchanges of
Information: .............................................................................................122
XI. CHAPTER 11: PRE-HEARING CONFERENCES .......................................................122
A. Timing of Pre-Hearing Conferences ....................................................................122
B. Preparing for the Pre-Hearing Conference ..........................................................123
C. Attendance of Senior Representatives of the Parties ...........................................123
D. Matters for Discussion .........................................................................................123
1. Determination of Procedural Matters, including Subsequent
Hearings and Discovery. ..........................................................................123
2. Role of Arbitral Panel in Facilitating Settlement .....................................127
E. After the Pre-hearing Conference ........................................................................127
XII. CHAPTER 12: RULES OF EVIDENCE .......................................................................127
A. Rules of Leading Arbitral Authorities Relevant to the Taking of
Evidence ...............................................................................................................127
B. International Bar Association Rules on the Taking of Evidence .........................129
1. Scope of the IBA Rules of Evidence .......................................................129
2. Agreement of the Parties ..........................................................................130
3. Inspection .................................................................................................130
4. Relevance .................................................................................................131
5. Hearsay ....................................................................................................131
6. Attorney Client Privilege .........................................................................132
a. Overview of the Attorney Client Privilege ..................................132
b. Attorney Client Privilege in International Arbitration .................132
7. Confidentiality .........................................................................................133
8. Oral Testimony at the Evidentiary Hearing .............................................133
9. Discretion of Panel ...................................................................................134
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