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Increased Controversy in the US Over Arbitration

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Following on from Jeff Glen’s presentation on Arbitration at the Kiev AGM…

Increased Controversy in the US Over Arbitration

Shortly after my presentation on challenges to arbitration in the United States Federal courts at the Kiev AGM, the New York Law Journal published an article on compulsory arbitration by agreement under American law.  The article sets out the disputes over arbitration within the US, highlighting the problem of eliminating recourse to the courts in contract, like employment or brokerage agreement, where there is no realistic alternative to either agreeing to arbitration or not entering into the contract at all.

The article notes several cases that were then pending in the US Supreme Court in which this issue arose. On June 21, 2010, the Supreme Court decided, in a 5-4 decision , that where an arbitration agreement specifically confers on the arbitrator the exclusive power to "resolve any dispute relating to the interpretation, applicability, enforceability, or formation of this Agreement, including ... any claim that all or any part of this Agreement is void or voidable," a court has no power to void the Agreement, or the arbitration provisions contained in the Agreement, on the ground of unconscionability.  Rent-a-Center, West v. Jackson, 2010 WL 2471058.  The effect of the decision is to empower the arbitrator to decide whether the party that agreed to arbitration, perhaps in situations where was grossly unequal bargaining power, will be relieved of his "choice" of arbitration.  A few days later, the Supreme Court held, this time without dissent on the point, that whether a particular dispute had been committed to arbitration in a less all-encompassing agreement is a matter for judicial determination.  Granite Rock Co. v. International Brotherhood of Teamsters, 2010 WL 2518518.

I do not know the position of other countries regarding enforcement of arbitration in situations of allegedly unequal bargaining power.  "Unconscionability" is a claim to avoid a contract that is prominent in the Uniform Commercial Code, which governs contract interpretation in most American jurisdictions.  If, as the accompanying article suggests, legislation will empower the courts to review these types of claims, there will be a substantial question whether American courts will enforce foreign arbitration awards under the New York Convention where a challenge of "unconscionability" is raised, particularly in countries in which that defence is not part of the local jurisprudence.

 Jeff Glen

 

 

Winner of the Interleges Award 2010 is announced

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Winner of the Interleges Award 2010 is announced

Topic - RECEPTION AND ENFORCEMENT OF INTERNATIONAL ARBITRATION ORDERS AND AWARDS 

Prize - €4,000

 

First place

Interleges is delighted to announce the winner of this year’s Interleges Award, in memory of Interleges-founder Stephen Rayner, as Tomasz Hara.

 Tomasz will join the Interleges members in Kiev at their AGM to collect his prize and spend time with the network’s members.

The prize winning essay is available to read here, and below is a short introduction to Tomasz and his legal career to date.

         “I am Polish and I am 22. I grew up in south-western Poland, near the city of Wroclaw. I started high school in Wroclaw, but spent the final year in Omaha, Nebraska. While in the US I decided to go to university in the UK and study law. For a variety of reasons I chose to do an LLB in English and European Laws at the University of Essex. This four-year degree involved a year abroad, which I spent in Vienna. I am about to sit my final exams in May and June. My interest in arbitration was sparked by the Willem C Vis Moot Court, in which I took part during my second year of studies; I have been coming back to the event as a coach since then. I seriously consider arbitration as an area of law into which I would like to qualify.


I did a host of internships in London and Warsaw and in effect I secured a training contract with Allen & Overy (in London), which will begin in March 2012. My plan for next year is to finish the mandatory Legal Practice Course (LPC); I obtained a place at the College of Law in London. I consider the possibility of postponing my training contract and enrolling on an LLM, possibly in legal theory and possibly in the US. I have no plans for this summer, but I am still looking for interesting internships. I would be delighted to obtain some experience in International Arbitration.”

Second place

In a year of a very high standard of submissions, Interleges is pleased to award Artur Barczewski second place.

Artur’s essay can be read here, and below is a short introduction to him and his legal career so far.

       “I grew up in Midzyrzecz, a small town located in the Western part of Poland. After completing elementary education in my hometown, I enrolled in a German-Polish project at the European School Marie & Pierre Curie in Guben (Germany), where I finally graduated in 2005. In the same year, I was admitted at the Free University of Berlin as a student of Law. A year later, I changed my course of study from German law to a Bachelor and subsequent Master degree in German and Polish Law at the European University Viadrina Frankfurt (Oder). The decision was particularly beneficial as it opened an additional possibility of taking a state examination not only in Germany, but also in Poland. In addition, it gave me a valuable insight into two different civil law jurisdictions.

From the very beginning of my study in Frankfurt (Oder), I was very pleased to have the opportunity to work as a student assistant at the Chair of Public International Law, European Law and International Constitutional Law. During this time, I gained a great experience in the field of academic research and was focused on International and European Law, especially European Security and Defence Policy and Piracy at Sea. In 2008, I participated in an essay competition organized by Warsaw office of the international law firm Hogan & Hartson and the daily Polish newspaper “Rzeczpospolita”. With the essay on “The notion of ´investment´ under the ICSID Convention and Bilateral Investment Treaties” (in German) I was privileged to come first place. The winning essay was later published in the Polish Arbitration Bulletin “Biuletyn Arbitra?owy“, issue no. 9.

The success of the first essay gave me both the courage and motivation to submit further contributions on current issues in arbitration. By way of example, in the issue no. 11 of the Polish Arbitration Bulletin I discussed in my paper, “The Fate of the Arbitration Clause in the Case of Insolvency under German Law” (in German), an interesting and highly debated topic of the impact of insolvency proceedings on arbitration. Moreover, my particular interest for arbitration and international commercial law was further developed in April 2009 when I took the opportunity to intern with Hogan & Hartson Jamka Sp. K. Warsaw at the litigation and arbitration department. In addition, in July 2009 I took part in a summer school on alternative dispute resolution organized by Humboldt University of Berlin and Tulane Law School. 

After obtaining a Bachelor degree in 2008, I have been continuing my education on the Master course in German and Polish Law at the European University Viadrina. In autumn 2009, I applied for a leave of absence in order to perfect my English skills and benefit from Erasmus scholarship at the University of Hull, United Kingdom. As Erasmus exchange student, I am currently taking modules in areas of International Commercial Law and European Law.”

 

The subject of the Interleges Award 2011 will be announced shortly.

   

 

Italian member and Vice-President of Interleges Stefano de Bosio responds to Wall Street Journal article on Geographical Indications

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Original WSJ article

Stefano de Bosio's response

 

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