PROTECTIVE MEASURES IN SUPPORT OF ARBITRATION JAMES H. CARTER COMBAR NORTH AMERICAN MEETING 1 JUNE 2017

THREE IMPORTANT PROTECTIVE ACTIVITIES Protecting the arbitral process, including Emergency Arbitrators’ orders Protecting arbitrating parties from frivolous challenges and collateral attacks on awards Protecting arbitrators from improper assertions of civil liability

PROTECTING THE ARBITRAL PROCESS: EMERGENCY ARBITRATOR ORDERS Many arbitral rules and some statutes now provide for them AAA (1999, opt-in), ICDR (2006, opt-out), ICC (2012, opt-out) Statutes in Singapore (2012), Hong Kong (2013) Are interim awards “final” and enforceable? In US, if finally dispose of an issue or award interim relief to preserve integrity of an eventual award Domestically, interim awards can include an order to post security or for production of documents

ENFORCING EMERGENCY ARBITRATOR ORDERS Yukos v. Microsoft: interim award required executing an agreement Was it final enough (though possibly modifiable by a full tribunal)? Was it too final? (Did the arbitrator exceed his authority?) Order defined parties’ rights fully, for an interim period, was enforced “Ordinary procedural rulings” nevertheless would not qualify Law is still developing under NY Convention, but courts appear sympathetic and practical

PROTECTING ARBITRATING PARTIES Most statutory grounds for vacating awards are specific and limited, so counsel seek open-ended alternatives Court limitations on the open-ended grounds: “Manifest disregard” of the law or facts (compare Arb. Act 1996, s.68) Public policy

PROTECTING ARBITRATING PARTIES Sanctions against attorneys for tactics, in extreme circumstances 28 USC section 1927 (unreasonable multiplication of costs) “Failure to abide by” an arbitral award Failure to respond to motion to confirm award Rule 11, Fed. Rules of Civil Procedure (frivolous arguments) May apply to unreasonable evasion of obligation to arbitrate, but threshold is high Can apply to frivolous suits against arbitrators (Landmark Ventures)

PROTECTING ARBITRATORS Differing national approaches to arbitrator immunity English: bad faith Civil Law: contractual, recklessness US: functional, quasi-judicial immunity RUAA: expressly exempts failure to disclose Common law protections also strong, as in NY Counsel could be sanctioned for abuses Same immunity typically extends to arbitral institutions

PROTECTING ARBITRATORS Exceptions to immunity in US are exceedingly narrow “Complete nonperformance” in rendering an award (arguably) “Pervasive bias and corruption” (NAF, MBDA cases) Misleading arbitrator advertising (arguably) (JAMS case)