US District Court in New York reviews AAA Appellate arbitral panel decision with the same deference as arbitral awards under the FAA

On February 14, 2019, in considering cross applications to vacate and confirm an arbitration award, the United States District Court, S.D. New York decided to grant the same deference to a decision made by an appellate arbitration panel as is given to an arbitral award under the Federal Arbitration Act (“FAA”) (Hamilton v. Navient Solutions, LLC., No. 18 Civ. 5432 (PAC) (S.D.N.Y. February 14, 2019).[1]

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U.S. Supreme Court’s First Opinion of 2019: Kavanaugh Favours Arbitrators’ Power to Decide Arbitrability

The U.S. Supreme Court’s first opinion of 2019, written by recently appointed Justice Brett Kavanaugh, confirms the long-standing support of the Court for arbitrators to decide the issues of arbitrability of a dispute submitted to arbitration.  The unanimous ruling defends the provisions of the Federal Arbitration Act, confirming that a contract’s terms control who decides, in the first instance, whether a dispute is subject to arbitration.

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US Court of Appeals for the Second Circuit upholds decision of Southern District Court and confirms arbitral award against Pemex that was set aside at its seat

The US Court of Appeals for the Second Circuit (the Court of Appeals) has upheld the decision of District Judge Hellerstein in Corporación Mexicana de Mantenimiento Integral, S. De R.L de C.V v. Pemex-Exploración y Producción, No. 10 Civ. 206 (AKH), 2013 WL 4517225, (S.D.N.Y. Aug. 27, 2013), confirming an arbitration award in favour of COMISSA and against PEMEX. The award was affirmed and enforced even though it had been set aside by a court at the seat of arbitration in Mexico. In the opinion of the US Court of Appeals, Judge Dennis Jacobs, joined by Judge Raggi, found that to hold otherwise would be contrary to US public policy and "repugnant to fundamental notions of what is decent and just in this country."

The opinion is interesting for the Court of Appeals' careful consideration of the case's "truly unusual procedural history" and its relevance when considering the grounds for refusing to enforce an arbitral award under the Panama Convention (textually identical to Article V of the New York Convention). It is also interesting to consider this decision in light of the reasoning and rationale being adopted by other national courts which have also grappled with applications to enforce awards set aside at their seat.

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Dueling limitation periods: time-limit under the US Federal Arbitration Act trumped by state law on enforcement of foreign judgments

The US Court of Appeals for the District of Columbia Circuit rules that state law governing the limitation period for enforcing a foreign judgment that confirmed an arbitral award overrides the Federal Arbitration Act’s limitation period on award enforcement.

On July 11, 2014, in the latest decision in the long-running dispute between Commission Import Export (“Commisimpex”) and the Republic of Congo (the “Congo”), the US Court of Appeals for the District of Columbia Circuit[1] held that the three-year limitation period on enforcement of foreign arbitration awards specified by the US Federal Arbitration Act (“FAA”) does not pre-empt the limitation period permitted by local state laws with respect to enforcement of foreign judgments confirming an arbitration award. Award creditors may therefore be able to enforce an award in the form of a foreign judgment after the limitation period for enforcement of the underlying award itself has passed.

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Sharing it with the class – a review of recent US Supreme Court decisions on class action arbitration

The US Supreme Court recently issued two key decisions regarding the enforceability of class arbitration waivers and arbitrators’ powers to interpret arbitration agreements. In American Express Co. v Italian Colors Restaurant, the Court found that a class arbitration waiver was enforceable even though it thwarted a claimant from pursuing a federal claim due to prohibitive costs. In Oxford Health Plans LLC v Sutter, the Court permitted class arbitration without addressing whether the arbitrator’s interpretation of the arbitration clause was correct. These rulings continue the pro-arbitration federal policy and emphasise that careful drafting of arbitration provisions remains of paramount importance to ensure that arbitrators and the courts effectuate the parties’ intent.

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Application to remove arbitrators for bias – not on District Court’s watch

In a robust judgment, the US District Court of the Southern District of New York has rejected PK Time’s application to remove two arbitrators for alleged bias during its arbitration against Mr Robert (PK Time Group, LLC v. Robert, Docket No. 12 Civ. 8200 (PAC) (S.D.N.Y. July 23, 2013)). In a bifurcated procedure, PK Time (the claimant) succeeded at the liability stage. However, prior to completion of the quantum stage, PK Time applied first to the ICDR and then the New York courts, seeking the removal of the arbitrators for alleged bias.

The judgment clarifies the pre-emption of the Federal Arbitration Act over New York procedural law and the limited scope for court intervention before an award has been rendered.

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