At the CIArb Fellowship Program Training, A Firsthand Arbitration Experience

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By Sakshi Solanki

The Chartered Institute of Arbitrators’ Accelerated route to Fellowship (International Arbitration) Assessment was held Oct. 7-8,  2022, at Williams & Connolly LLP’s Washington, D.C., office. It was sponsored by CPR.

I was invited to join and participate with nearly 15 senior practitioners, who attended this training program and brought their litigation, arbitration, and mediation backgrounds.

The CIArb faculty included five moderators, John Buckley, senior counsel at Williams & Connolly LLP in Washington; Jim Reiman, who heads his own Chicago ADR practice; Merriann Panarella, an arbitrator and mediator based in Wellesley, Mass., who also serves as a board member of CIArb’s North America Branch; Kenneth Reisenfeld, a Washington-based partner in Baker & Hosteler LLP, who heads the firm’s global investor-state arbitration practice, and Gaela Gehring Flores, an international arbitration practice partner in the Washington office of Allen & Overy. 

The faculty reviewed with the students the laws, rules and procedures governing arbitration. They also assessed participants on their legal knowledge, understanding of the problems presented, and skills as an acting arbitrator or lead counsel.

The participants worked on a fact pattern that involved a complex international construction dispute. The insurance contract between the parties had an arbitration clause which was subject to UNCITRAL Arbitration Rules, and the working documents were based on Panamanian and English law.  The place of the arbitration was Toronto.

The training involved 22 interesting exercises, either in a discussion or a roleplaying format, where the participants were divided as either the claimant or the respondent, and where they often played the role of an arbitral tribunal.

There were two breakout rooms for the exercises, and students were shuffled four times in the two training days so that everyone could engage with each other on the exercises. 

Among the problems implicated were the constitution of the tribunal, the language of the arbitration, and the challenge and replacement of an arbitrator.  Each attendee argued diligently for their assigned side or roleplayed as the arbitral tribunal. I found each exercise to be fun and highly interactive when we discussed various possibilities in resolving a particular issue.

As the training proceeded, the fact pattern got more intense. Issues of fraud, corruption, and expert witnesses were discussed. Toward the end of the first training day, Jim Reiman lectured on drafting procedural orders. He emphasized the importance of drafting orders in a way to avoid difficulties at the latter stage of the proceedings. After the end of the first day, the attendees were asked to draft either an interim award or a procedural order overnight, based on what was discussed.

The training not only relied on UNCITRAL arbitration rules but also made references to the CIArb Code of Professional and Ethical Conduct, which often comes into play to govern arbitrator conduct. There were also references made to the International Bar Association Rules on the Taking of Evidence in International Arbitration to deliberate on issues of discovery and production of documents.

All the attendees were also expected to draft a final award as the presiding arbitrator. They had to decide the case on the merits and rule on every issue that was submitted.

This was an excellent opportunity for me to be present in a room full of senior knowledgeable practitioners and see them strategize on various accounts and in different roles. The training had a perfect blend of real-time scenarios and use of substantive laws, which I thoroughly enjoyed. It was an unforgettable experience, and I appreciate the faculty of the CIArb, CPR, and the fellow participants who were extremely kind and gracious in allowing me to observe as well as participate in these two days of extensive training.

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The author, an LLM candidate at the American University Washington College of Law in Washington, D.C., focusing on International Arbitration and Business Law, is a Fall 2022 CPR Intern.

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India Court Strikes Arbitration Award, Raising Questions about the Use of BITs

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By Shourya Arora

In August, the Delhi High Court granted relief to the Indian government by setting aside a $562.2 million International Chamber of Commerce arbitral award made in favor of Devas Multimedia due to Devas’s sudden termination of its contract with Antrix Corp., a commercial arm of the Indian Space Research Organization, India’s state-owned national space agency. Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., ICC Case No. 18051/CYK. The main grounds for this annulment were that it was illegal and went against India’s public policy.

The Devas-Antrix saga began with the alleged wrongful termination of a 2005 agreement between two Indian companies, Devas Multimedia Private Ltd. and the Indian State-owned entity, Antrix, for the lease of an electromagnetic spectrum frequency, or S-band, on two satellites. Devas planned to provide mobile multimedia and broadband data services to the Indian market using the S-band spectrum.

Antrix terminated the contract in 2011, citing, among other things, that it was unable to obtain the necessary frequency and orbital slot coordination (the “Article 7(c) ground”) and that the CCS decision was a force majeure event rendering the performance of the Contract impossible (the “Article 11 ground”).

Devas commenced an ICC arbitration seated in New Delhi under the contract terms, claiming damages for wrongful termination. On Sept. 14, 2015, the ICC tribunal issued the award, ordering Antrix to pay USD 562.5 million in damages plus interest. But in late summer, on Aug. 29, the court annulled the arbitral award because it was patently illegal and in contravention of Indian public policy. See Bhadra Sinha, “Antrix-Devas case: What was the dispute & why SC upheld NCLAT order to wind up Devas for fraud,” The Print (Jan. 19, 2022) (available at https://bit.ly/3Vwuzyh).

BIT Disputes

This factual framework sparked two reported bilateral investment treaty arbitrations by Devas’ shareholders against India for expropriation of investments and treaty norms. The shareholders received favorable damages awards in these investment treaty arbitrations.

First, note that in January 2022, the India Supreme Court upheld Devas’ compulsory winding up on the grounds of fraud–referred to as the “Liquidation Judgment”–in the context of enforcement proceedings pending in multiple jurisdictions concerning the award discussed above and the investment treaty arbitration awards.

According to clause 34(2)(b)(ii) of the Indian Arbitration and Conciliation Act 1996, a court may annul an arbitral award if it is “in conflict with the public policy of India.” Explanation 1 to  section 34 of the act’s arbitral award would be in opposition to India’s public policy only if:

  1. the making of the award was induced or affected by fraud or corruption; 
  2. it contravenes the fundamental policy of Indian law; or 
  3. it conflicts with the most basic notions of morality or justice. 

Furthermore, under section 34 (2a)of the Act, a domestic arbitration award may be revoked if it is discovered to be “vitiated by patent illegality appearing on the face” of the award. Pankaj Bajpai, “Arbitral award vitiated by patent illegality appearing on face of same, calls for interference: SC,” LegitEye (Aug. 6) (available at https://bit.ly/3yRuYl9). An arbitral award cannot be set aside on patent illegality merely because of an erroneous application of the law or by reappreciation of evidence.

The Court held that the tribunal, in the Antrix-Devas case, had committed patent illegality as it (i) incorrectly excluded the pre-contractual negotiations between the parties, (ii) rendered contradictory findings on the applicability of the force majeure clause, and (iii) the finding of fraud in the winding-up proceedings established that the ICC Award “conflict[s] with the ‘most basic notions of justice,’“ and “thus antithetical to the fundamental policy of Indian law.“ (See the first link above to the opinion.) For all these reasons, the Court allowed the s34 application and set aside the ICC Award.

More recently, in February 2022, Devas brought another BIT claim against India under the India-Mauritius BIT in which Devas shareholders claim that the retaliatory investigations, seizure of funds, and raids by Indian authorities on Devas are part of an audacious scheme to avoid paying the awards. It is still unclear, however, how the August setting-aside ruling will affect the proceedings of this case, and what the ultimate outcome may be.

What’s Ahead?

The Court’s decision to set aside the award is the most recent development in the Devas-Antrix saga’s 10-year history. It is probable that the claimants in the continuing India-Mauritius BIT case, which involves allegations of governmental retaliation, will rely on this judgment. The setting-aside judgment was described as “a mockery of the international arbitration system and a warning to investors that the Indian judiciary is being weaponized against those who assert their legal rights” by the claimants’ attorney.

With reasonable success, claimants Devas and its shareholders have sought to have their arbitral awards enforced in other jurisdictions. It remains to be seen whether enforcement courts defer to this setting-aside decision, even though enforcement courts typically are reluctant to enforce arbitral awards that have been annulled in the seat courts.

The dilemma for India: India is not a signatory to the ICSID Convention. This is for historical reasons, as it has always been of the view that the supremacy of its courts cannot be compromised by providing finality and immunity from the challenge for an ICSID arbitral tribunal decision.

India seems to have gotten caught on the wrong foot. At one level, it has exposed itself to criticism of not being an investment-friendly destination–an image it cannot afford, given the country’s enormous task to pull its millions out of poverty. On the other hand, there are legal issues that it must now face with billions at stake.

Lessons for India: There is now, somewhat all of a sudden, a new dimension to bilateral investment treaties (and indeed, the picture is unfolding the world over).

To begin with, India needs to examine if its current BITs need to be modified or refined in light of the recent global experience. What are the legitimate rights a foreign investor must be assured of, and where does a country need to draw the line?

Second, India must realize its inherent disadvantage in BIT investment arbitrations. It is generally recognized that investment arbitrations are skewed in favor of foreign investors. This disadvantage is further fueled by the limited pool of investment arbitrators and lawyers and the negligible participation of Indians in it. As a result, India is driven to appoint non-Indians as arbitrators or lawyers in most of its BIT disputes.

It should be a legitimate expectation of a nation as vast and commercially significant as India to participate in the decision-making process where it is involved. India thus needs to take vigorous steps to train and upgrade the skills of its law officers, and focus on giving arbitrations and arbitral institutes a boost so that locally grown talent is nurtured and emerges.

Third, India must consider whether it should accede to the ICSID Convention. More than 140 countries have ratified the Convention as of now (more have signed and are in the ratification process). Can India afford to sit outside this community of nations?

Lessons for the investors: Fighting a legal battle against a host country isn’t an ideal situation for any long-term investor. An investor’s focus must be on molding its business plans to fit in with realities on the ground, taking the thick with the thin, just as any domestic investor would. A foreign investor’s interest would be equally well served (and foreign investment not suffer) if the treaty in question is confined to protecting against seriously inequitable or unfair treatment. If a BIT is too expansive, its interpretation or application is not in the best interest of investors or the future of BITs.

The following are some recommendations for future BITs–especially for Indian BITs:

  • If inserted, the “FET Standard” should be defined as exhaustively as possible. “‘Fair and equitable treatment’ includes the obligation not to deny justice in criminal, civil, or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world.” 2004 U.S. Model BIT (available at https://bit.ly/3ghp9ao). In addition, exceptions to the application of the standard should be indicated.
  • There should be a saving clause for the use of regulatory powers, preferably as an exception to the FET clause. States must be free to regulate sovereign affairs without fearing an expensive investment arbitration claim. The regulation, however, should not be arbitrary or discriminatory.
  • The defense of “necessity” should be given a definite shape and boundaries of application. Tribunals should assess impugned actions of the state within such ambit. (States have made pleas of necessity under various investment treaties, notably the Argentina-US BIT (Article XI), which provides that the state may take measures “necessary” for “public order,” “the fulfillment of its obligations with respect to the maintenance or restoration of international peace or security,” and its “essential security interests.” Argentina–United States of America BIT (1991) (available at https://bit.ly/3CMVGNc).)  
  • The respondent-state must be empowered to raise counterclaims based on the claimant’s obligations. Furthermore, the respondent-state must have equitable remedies, such as challenging the claimant’s bona fides. For this purpose, the BIT may provide a stage for determining a prima facie breach.
  • The loser should pay all costs of arbitration proceedings. For instance, Norway’s Model BIT requires the “costs of arbitration shall in principle be borne by the unsuccessful Party.” See the model at https://bit.ly/3g28zeq, noting that the tribunal may apportion such costs “if it determines that apportionment is reasonable, taking into account the circumstances of the case.”

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The author, an LLM student at the Caruso School of Law at Pepperdine University in Malibu, Calif., is a Fall 2022 CPR Intern.

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ACC’s Tori Payne on Measuring Diversity Efforts

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By Cenadra Gopala-Foster

On Oct. 3, the CPR National Task Force on Diversity in ADR hosted Association of Corporate Counsel Vice President and Chief Membership Officer Tori Payne. She led a presentation on the ACC Foundation Diversity, Equity & Inclusion Maturity Model.

As described by Payne, the model is a living, evolving tool designed for use by legal departments. It outlines clear descriptions for three levels of DEI maturity–“early,” “intermediate,” and “advanced.”

For example, progress throughout the three levels for “governance and resourcing,” policies entail moving from the early stage of having little to no consistent policies incorporating an anti-racism or DEI message toward an intermediate level where the company adopts basic governance models with clear distinctions between policy-planning formulation and execution, closing the gaps between policies and practices, and monitoring identified goals and objectives.

At the final, a “mature” level, policies and projects operate with a consistent feedback loop using a cross-section of functional stakeholders, with diversity and equity resources–including budget–committed to the function. DEI also continues to develop in these mature settings–see below.

The ACC’s main concern for the model was practicability, reported Payne, so the in-depth descriptions can aid DEI efforts and gauge where improvements are needed.

The DEI Maturity Model was jointly developed by ACC and the ACC Foundation, in consultation with an advisory committee of DEI leaders from the legal and business communities who are responsible for advancing DEI results at their organizations. The tool derived from ACC’s recognition that law firms and in-house companies’ were challenged to assess the effectiveness of their DEI efforts without clear indicia for progress and success. The model provides business leaders with a critical snapshot of where their departments are currently and a roadmap on achieving future goals.

For example, in 2011, 11.7% of lawyers identified as people of color; a decade later in 2021, it has rose only 3% to 14.6%. Payne said she hopes this tool will give company leadership the insight to improve diversity efforts.

Throughout Payne’s presentation, she reaffirmed the importance of metrics, and how essential they are  for DEI efforts. Metrics will help DEI efforts to measure progress, which will in turn affect future budgetary decisions. The ACC, she said, intends for this model to continue to be refined and improved based on the valuable feedback from those who use it.

Both CPR and the ACC recognize that diversity pledges can serve an important educational and consciousness-raising function. Payne expressed support for CPR’s Diversity Commitment-Ray Corollary Initiative. She further noted that the maturity model would aid companies who sign the CPR Pledge in creating additional policies and supportive mechanisms that will increase the nomination and selection of diverse  neutrals. She stressed the need for companies to work only with provider firms that mandate all neutral requests, including diverse individuals.

CPR has taken a step toward encouraging diversity with a new Diversity Commitment Clause, which can be used by companies in their contract’s arbitration agreements. The clause was revised in the summer. It states that “[t]he parties agree that however the arbitrators are designated or selected, at least one member of any tribunal of three arbitrators shall be a member of a diverse group, such as women, persons of color, members of the LGBTQ community, disabled persons, or as otherwise agreed to by the parties to this Agreement at any time prior to appointment of the tribunal.”

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The author is 2022-2023 CPR Intern under CPR’s consortium agreement with Washington, D.C.’s Howard University School of Law, where she is a second-year student.

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The ADR Legacy of CPR’s Founding Father, James F. Henry–In Memoriam

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Jim Henry

CPR’s founder, James F. Henry, has passed away.

He leaves behind a legacy trailblazing the use of methods other than litigation to resolve business disputes. His impact is immeasurable.  He is responsible for promoting processes, techniques, and tools for alternative dispute resolution for major business conflicts, and expanding its use by lawyers throughout the world.

He founded and then served as president and chief executive officer of CPR, overseeing its initial initiatives with a group of in-house counsel to later include law firm practitioners, academics, and international firms and partner organizations, from CPR’s inception until his 2000 retirement. 

Even after his retirement, he continued to advocate for better dispute resolution, writing–including in Alternatives to the High Cost of Litigation, which he founded in 1983 (and for which he served as publisher during his CPR years)–and occasionally speaking.

CPR established the James F. Henry Award in 2002. It honors outstanding achievement by individuals for distinguished, sustained contributions to the field of ADR, based on their leadership, innovation and sustaining commitment to the field.

“We’re all privileged and humbled to be walking in Jim Henry’s footsteps,” said Allen Waxman, CPR’s president and chief executive officer since 2019. “He foresaw in a way many others did not the need for business to find better ways to resolve their conflicts than what court systems might offer.  He was a maven for innovation, pushing for greater creativity, efficiency, and fairness in ADR processes.  We are all beneficiaries of his work and leadership.”

Henry died on Aug. 28. He had lived in Waccabuc, N.Y., where he resided for seven decades. He was 91.

Henry’s family has announced a celebration of his life on Sunday, Nov. 13, at 3:00 p.m., in Waccabuc.  They have asked that if you are able to attend, please let the family know so that they can send you an invitation.  The contact is Stephen Henry at shenry@henrylacey.com.   

Henry founded CPR in 1977 to continue previous foundation work on social justice issues that included studying poverty, Native American issues, and tropical disease eradication. In due course, it became the Center for Public Resources (later to change to the International Institute for Conflict Prevention and Resolution); its subject focus was business ADR. His delivery devices included new sets of conflict resolution rules, tools, initiatives and programs. (A timeline of Henry’s and CPR’s history is available on CPR’s website here.)

Initially, he and the organization championed mediation and negotiation. He strove to have lawyers talk first before marching to courts. That resulted in the mid-1980s in CPR’s signature “Pledge,” the Corporate Policy Statement on Alternatives to Litigation. (See background and text https://bit.ly/3CDmyjH.)  Under the nonbinding pledge, a company agrees that it will consider—and be ready to negotiate–a resolution with the dispute resolvers at its adversaries.  

The pledge idea spread from CPR to companies throughout the legal world.  It became CPR’s signature effort in the 1980s.  Thousands of big companies and subsidiaries signed on.

That led to a similar pledge for law firms—that they would discuss with the clients in appropriate case the use of ADR. Industry commitments followed, in which groups of businesses agreed to resolve, by negotiation or mediation, specific disputes that arise among the competitors within those industries. (The pledges and commitments can be seen here.) Similarly, Henry spearheaded efforts at CPR to bring together academics and attorneys at all levels to translate theory into effective practice.

The resonance of Henry’s CPR pledge continued well after his retirement, and continues today. In 2012, a “21st Century Pledge” modernized the idea to institutionalize the pursuit of corporate ADR systems. 

CPR has continued this tradition of pledges seeking innovation in dispute management by recently establishing a pledge that businesses will consider incorporating mechanisms into their arrangements with others, not just to resolve disputes, but prevent them altogether.  See CPR’s Dispute Prevention Pledge for Business Relationships (revised April 5, 2022) at www.cpradr.org/resource-center/adr-pledges/dispute-prevention-pledge-for-business-relationships.  

The pledge didn’t stand alone at CPR, even in the mid-1980s.  With the assistance of the late Harvard Law School Prof. Frank E.A. Sander, Henry established the CPR Awards (go here for details on this year’s awards-entry deadline next month and submission instructions), to recognize but also to incentive business and academic development of the processes and systems that CPR began to produce, including nonadministered arbitration rules and guidelines for establishing and using minitrials. 

Those resources and materials, and many others including international and translated versions, are still vital, and can be found on CPR’s website at https://bit.ly/3ryxCID. (Sander became the longest serving member of Alternatives’ editorial board, from its 1983 inception until his death in 2018.)

Henry correctly projected that private ADR forums initiated by companies and industries would continue to proliferate after CPR’s 1980s work. He cited and worked to expand corporate dispute resolution programs ranging from employment settings to case management. He later worked with court administrators on programs that impacted the installation of ADR offices by Presidents George H.W. Bush and Bill Clinton in the 1990s in every federal court in the nation, as well with executive branch government ADR officials. And he expanded CPR’s initiatives to arbitration rules and ethics standards for ADR providers and practitioners.

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Henry’s principle delivery system, however, actually was the lawyers themselves.

Exhibiting a lifelong devotion to improving society through law, Henry continually emphasized best practices in lawyering.  He had confidence that excellent legal skills would bring the informal dispute resolution processes that had been performed for years to a valued place in legal operations and management.

Henry set out to assemble those people, and make them available to disputes.  CPR Dispute Resolution has grown its Panel of Distinguished Neutrals to more than 600 neutrals today, and has addressed cases valued in the billions of dollars.

Henry saw the work of lawyers as the key to ADR success, as well as CPR, a New York-based nonprofit.  He was a tireless cheerleader throughout his tenure as CPR’s president and CEO until his 2000 retirement for bringing out the best in the legal profession, and making ADR skills a requirement.

That in turn created a network of devotees to, and members in, what came to be known in the mid-1990s as the CPR Institute for Dispute Resolution, ahead of the current name that added the international perspective begun under Henry. CPR members have led in the use of commercial conflict resolution for their clients’ problems, both in house and at law firms, world-wide.

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Jim Henry was born in 1930 in Grand Rapids, Mich., and attended Williams College.  He later served as a U.S. Army Intelligence Officer, and was awarded law degrees from the Georgetown University Law Center in Washington, D.C., and the New York University School of Law.

CPR President Allen Waxman said, “On behalf of the board and staff at the International Institute for Conflict Prevention and Resolution, we send deepest condolences to Jim’s wife, Susan Henry, and their three children and eight grandchildren.”            

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The November issue of Alternatives to the High Cost of Litigation has published an expanded version of this tribute to Jim Henry’s life.  See CPR News, 40 Alternatives 154 (November 2022) (available at https://bit.ly/3DgLuMV). An archive of Henry’s Alternatives feature articles can be accessed directly on the Wiley Online Library at https://bit.ly/3ylmkLs.

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CPR Amends Its Employment-Related Mass Claims Protocol

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The International Institute for Conflict Prevention and Resolution has announced amendments to its Employment-Related Mass Claims Protocol–the ERMCP or Protocol.

The ERMCP provides an innovative mechanism for more efficient and effective resolution of a mass of employment-related cases. The Protocol features a “Test Case Process” followed by a global mediation process informed by the Test Cases.

The ERMCP incorporates CPR’s Administered Employment Arbitration Rules.

An initial set of revisions to the Protocol by a CPR Task Force comprising leading counsel from the plaintiff’s bar, in-house employment counsel, corporate defense attorneys, and neutrals (arbitrators and mediators) was produced in April 2021 in connection with the release of the CPR Administered Employment Arbitration Rules (see CPR Speaks (April 14, 2021).  A second set of revisions that, among other things, incorporated CPR’s Due Process Protections, and makes changes to align with CPR’s updated Diversity Commitment, was promulgated in October 2021 (see CPR Speaks (Oct. 14, 2021).

The just-released Version 2.1 ERMCP amendments arise from CPR’s administrative experience under the Protocol. These changes relate to payments under the Protocol as well as additional clarifications on timing and the opportunity to mediate cases outside the mediation process.

CPR has added a requirement that, subject to any applicable fee waiver, claimants pay a part of the appointment fee as specified on the CPR Fee Schedule, which, in keeping with CPR’s Due Process Protections, will in no event be greater than the court fee required to file an action in a court of competent jurisdiction at the place of arbitration, or if none is specified, in the county of the claimant’s primary place of residence.

The Protocol also specifies that the appointment fee from both the claimant and the respondent in a particular case must be received by CPR prior to provision of a slate of candidates for that case. See Paragraph 4 of the Protocol here and the CPR Fee Schedule for details.

In light of questions received, Version 2.1 also makes clear that the parties may engage in a mediation (other than the ERMCP) at any time during the mass claims process, including during the Test Cases. It provides that any such mediation will be administered by CPR under the CPR Mediation Procedure. (See Footnote 21 of the Protocol.)

In response to other questions, Protocol Paragraph 6 also clarifies that the parties may jointly request an abeyance in connection with a mediation or otherwise of any pending arbitration. If an arbitrator has been appointed, the arbitrator will decide whether to approve such request.

CPR Dispute Resolution Services Senior Vice President Helena Tavares Erickson noted, “We always seek to improve on our innovations as we learn from experience and always welcome and appreciate the feedback provided by the users of our services and products.”

FAQs for the new ERMCP 2.1 can be found here. 

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Circuit Court Vacates an Arbitration Award after NFL Agent’s Fraud

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By Shourya Arora

Courts don’t often reverse arbitral awards, but France v. Bernstein, No. 20-3425 (3d Cir. Aug. 9, 2022) (available at https://bit.ly/3Kl7Pw8), is an exception and merits attention.

Courts vacate an arbitration award only in limited circumstances. Federal Arbitration Act Section 10(a)(1) authorizes courts to vacate arbitration awards that were “procured by fraud, corruption or undue means.” The FAA authorization for a court to vacate an award procured by fraud is precisely what Jason Bernstein claims was perpetrated by Todd France in the arbitration underlying this suit.

Bernstein and France are certified agents registered with the National Football League Players Association to represent NFL players in contract negotiations. Bernstein, according to the Third U.S. Circuit Court of Appeals opinion in the case, also owns Clarity, which represents professional athletes for marketing and endorsement contracts.

Kenny Golladay signed a standard representation agreement with Bernstein in 2016, before Golladay’s rookie season with the Detroit Lions. He signed a separate agreement with Clarity for representation in endorsement and marketing deals. In January 2019, Golladay terminated both contracts just three days after participating in an autograph-signing event Bernstein had no role in arranging. Golladay, who is now a wide receiver for the New York Giants, signed with France immediately after the autograph event.

Bernstein believed France was behind the autograph event and filed a grievance against France under the NFLPA dispute resolution provisions. The matter went to arbitration. In pre-hearing discovery, France denied possessing any documents about the autograph event or any involvement. France’s lies were not uncovered until after the arbitration was decided in his favor.

The Third Circuit reversed the district court’s confirmation of the arbitration award because France’s fraud procured it. France’s fraud was not discoverable through reasonable diligence and was material to the case, according to the opinion.

The panel, in a unanimous opinion by Circuit Judge Kent A. Jordan, cited Odeon Cap. Grp. LLC v. Ackerman, 864 F.3d 191 (2d Cir. 2017) (available at https://bit.ly/3dPoYBU), in which the Second Circuit addressed the standard for vacating an award on the ground that it was procured by fraud. Here is the standard as stated by the court:

. . . [T]o vacate an arbitration award on the ground that the award was fraudulently procured, the petitioner must demonstrate the fraud was material to the award. That is, there must be a nexus between the alleged fraud and the decision made by the arbitrators. The petitioner, however, need not demonstrate that the arbitrators would have reached a different result. In this case, Odeon failed to establish that Ackerman’s alleged perjury impacted the arbitration award. The district court, therefore, correctly denied the petition to vacate.

Most courts similarly have been reluctant to vacate an arbitration award on the statutory FAA basis of fraud. More than a mere showing of fraud is necessary. It must be demonstrated that there was a connection between the fraud and the arbitration decision. The predicate to a vacation of an arbitral award on the grounds of fraud has been explained as follows:

  1. The fraud must be materially related to an issue in the arbitration.
  2. The fraud must not have been discoverable with due diligence before or during the arbitration.
  3. The fraud must be established by clear and convincing evidence.

See, e.g., France, at 18-19.

Fraudulent conduct brought to the arbitrator’s attention before an award does not constitute fraud sufficient to justify overturning the award. Also, the requisite fraud has been found absent even where an arbitration award was made after one of the witnesses gave perjured testimony but where the arbitrators did not consider the witness’s testimony in making the award. Terk Techs. Corp. v. Dockery, 86 F. Supp. 2d 706, 709-10 (E.D. Mich. Div. 2000) (available at https://bit.ly/3AU4XTX).

As indicated by the cases mentioned above, it is complex but possible for a court to vacate an arbitral award based on fraud, even though proving fraud is tricky and usually requires extensive discovery. The takeaway is that even though vacating an arbitration award is an uphill battle, a court can still provide a safety net if a party doesn’t play by the rules–that’s the France result.

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The author, an LLM student at the Straus Institute for Dispute Resolution at Pepperdine University’s Caruso School of Law in Malibu, Calif., is a CPR Fall 2022 intern.

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Sharing Resources:  Alternative Dispute Resolution Academics Create a Repository of Best Teaching Practices

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By Ellen Waldman

What kind of legal professionals labor long and hard over their intellectual property . . . and then give it away? Law professors who teach alternative dispute resolution, that’s who.

In continuing acts of generosity not characteristic of the academy at large, educators focusing on providing students with knowledge and skills in conflict resolution mechanisms apart from litigation gather yearly to share teaching ideas and innovations with their friends and  colleagues. 

This community forum, under the banner of the American Bar Association’s Section of Dispute Resolution, often begins slowly, with participants feeling shy about presenting their newest simulation or in-class exercise as a practice worth emulating. But with the organizers’ encouragement, confidence grows, participants begin to shout out their contributions with growing enthusiasm, and the group takes on the call-and-response cadence of a jubilant church meeting.

ADR professors look forward to being with their colleagues, whether in the same room or virtually.  But, for those who can’t attend–the organizers say they hope to resume in-person gatherings soon–the ideas presented are dutifully captured in a document titled the Legal Educators Resource Share, which is made widely available.

The resource is a valuable tool for practicing attorneys and ADR professionals, too. It is now more than 25 pages long, with hundreds of more pages of appendices–the actual, ready-to-use, material that teachers can hand out in class, such as simulation roles, out-of-class assignments, in-class worksheets, etc.  

The resource is the brainchild of Sharon Press and Barbara “Bobbi” McAdoo of Mitchell Hamline School of Law, in Saint Paul, Minn. The decade-old effort, with support from the ABA Dispute Resolution Section, began when they convened a group at the ABA DR Section’s Annual Conference and encouraged attending professors to submit and describe teaching resources that could be shared with the teaching community.

They compiled those resources in a document and made them widely available on academic sites as well as the blogosphere. When Prof. McAdoo retired, Prof. Noam Ebner of Creighton University in Omaha, Neb., took her place as co-organizer.

The resource document is divided into several categories, all of which can be helpful to novices and veteran professors alike: list servs; conferences; teaching/training materials, videos, and more. A brief sampling of the ideas reveals the contributors’ creativity and focus on securing student engagement.

Here are examples of the materials:

  • A discussion of the use of mindfulness meditation in a Legal Negotiation Class, complete with references to articles exploring the connection between mindfulness practices and creativity, feelings of well-being and the reduction of bias.
  • Guidance offered by the International Council for Online Dispute Resolution website, including  the ICODR’s online dispute resolution training standards.
  • “A Trisolan Map: Getting to Yes Exercise,” designed to help students make the jump from understanding the integrative negotiation method in theory, to actually applying it before engaging in a negotiation scenario. The exercise is a solo activity where the student plays the role of a fictional character in a fictional world, making negotiation decisions that seem very real. (For non-sci-fi immersives: The exercise is based on a Star Wars-inspired scenario.)
  • An article titled “Designing binge-worthy courses: Pandemic pleasures and Covid-19 consequences,” which draws on “the literature examining psychological and neuroscientific aspects of binge-watching television shows” to suggest approaches “to designing courses our students will want to binge-learn.”
  • A website developed by the ABA’s Legal Education , ADR, and Practical Problems (LEAPS) Project, designed “to help faculty incorporate practical problem-solving . . . into their instruction of a wide range of courses, including doctrinal, litigation, transactional and ADR courses.”
  • The “Stone Soup” Dispute Resolution Knowledge Project, offered by University of Missouri School of Law, Columbia, Mo., Professor Emeritus John Lande , which contains resources and tools for those who want to incorporate practitioner interviews and case observations into their classroom assignments.
  • Links to a variety of videos demonstrating various mediation styles and techniques. One of the most prolific videographers is Boston-based Suffolk University Law School Prof. Dwight Golann, who has shot and edited many videos, housed at the ABA/Suffolk University Law School Dispute Resolution Video Center and made openly available to all dispute resolution professors.   
  • Role-play simulations treating diverse subjects, ranging from probate to community divisions, to college spats, to European Union policy wrangles.
  • Exercises to assist students with getting comfortable on Zoom.
  • “Donald Trump and Stormy Daniels: An Arbitration Case Study,” containing excerpts from Daniels’ suit seeking to invalidate the arbitration clause embedded in the settlement agreement she signed with the former president; the TRO issued by an arbitrator that she violated by filing suit, and excerpts from an article written by the submitter, Brian Farkas–a Yeshiva University Benjamin N. Cardozo School of Law adjunct professor and a New York-based Arentfox Schiff associate–examining the public policy issues raised by the case.   

The list is extensive.

What is particularly noteworthy is the alignment between what these educators profess in the classroom and what they actually do. As proponents of dispute prevention and management, they teach their students to be creative problem solvers, to search for mutually beneficial outcomes and to “grow the pie”–not just look for ways to self-servingly apportion it.

And this is how they approach their life’s work. Far from hoarding their intellectual capital, they spread it around, assuming that if the next generation of lawyers has the benefit of the best teaching and writing out there, then we all win.  

The current version of the Legal Educators Resource Share linked above, and recent past versions, are located at ADRhub.com, a website maintained by Creighton’s Negotiation and Conflict Resolution Program. There also are plans by the organizers to have open access on the Mitchell Hamline School of Law Dispute Resolution Institute web page, which provides its DRI Press books and other teaching materials.

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The author, a longtime former law professor, joined CPR earlier this year and is Vice President, Advocacy & Educational Outreach.  Her bio on CPR’s website can be found here.

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CPR Council Meeting: Abraham Lincoln and Dispute Resolution

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By Xin Judy Wang

The June 22 CPR Council meeting featured a presentation on Abraham Lincoln and dispute resolution by the International Institute for Conflict Prevention & Resolution’s former CEO & President Thomas J. Stipanowich, the William H. Webster Chair in Dispute Resolution and a law professor at the Straus Institute at Pepperdine University’s Caruso School of Law in Malibu, Calif.

He served as CPR’s president and CEO from 2001 to 2006, and returned to discuss his project, “The Lincoln Way: Abraham Lincoln as a Problem Solver and Manager of Conflict.” 

Stipanowich began his presentation discussing the United States’ fascination with Lincoln, the 16th president. Possibly the nation’s most familiar historical figure along with George Washington, Lincoln lived one of the most documented and written-about lives from the nineteenth century. Almost everyone feels some level of familiarity with Lincoln, attaching him to particular principles, life experiences, or lifestyles. Lincoln was also a self-taught lawyer who worked on a broad spectrum of cases ranging from pig-stealing incidents to representation of railroads.

Stipanowich said he was attracted to Lincoln’s legacy through a telling quote: “Discourage litigation. Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough.” The quote came from Lincoln’s lectures to fellow lawyers around 1850, many of whom were trial attorneys.

From this quote, Stipanowich saw a striking similarity between Lincoln’s peacemaking spirit and CPR’s mission to reduce conflict to enable purpose.

As Stipanowich’s project title suggests, Lincoln was a lifelong problem solver and a conflict manager.

Lawyer Lincoln encouraged fellow trial lawyers to discourage litigation and always sought ways to resolve conflict out of the courtroom to avoid the often-unsatisfactory result through trials. Stipanowich found evidence that Lincoln was an informal mediator and had served as an arbitrator. Once, he organized a minitrial with a judge outside the court, with the judge rendering a nonbinding decision that settled a dispute without going to trial.

Stipanowich found Lincoln recognizing that, especially for reputational conflict–a popular type of suit at the time–going to trial is not the best way, whether one is representing the plaintiff or the defendant. It was better to reach a negotiated settlement privately.

As a politician, Abraham Lincoln navigated across party lines to achieve resolutions in the context of a mega-negotiation to address every stakeholder group. He had contacts in different parts of the country, reaching out to border states and southern politicians. It was his awareness of changing circumstances that led to his campaign leading to the Emancipation Proclamation. The African American community’s support was critical for restoring the union as a growingly important constituency and a necessary force in the military.

As an individual, Lincoln wrestled with internal conflict on self-image, religion, and relationships. Stipanowich found Lincoln to be tremendously influenced by reading the autobiography of Ben Franklin as a teenager, thus developing an enduring rationalist spirit. Lincoln was clear in his mission and ambition: “Every man is said to have his peculiar ambition. Whether it be true or not, I can say for one that I have no other so great as that of being truly esteemed of my fellow men, by rendering myself worthy of their esteem.” In pursuit of such honor and respect, Lincoln wrestled with depression, a broken engagement, and an avoided duel.

Through navigating conflicts and periods of crisis stemming from his internal and external conflicts, Lincoln built and rebuilt a transformational leadership. Lincoln’s rational, problem-solving spirit is just as relevant today for lawyers, corporations, and interested parties. In Stipanowich’s 2009 article, “Lincoln’s Lessons for Lawyers,” he summarized Lincoln’s legal practice principles:

  1. Use litigation as a last resort—and be frank with your client about its costs and risks.  
  2. Try to be objective in assessing your client’s case; avoid “irrational optimism.” 
  3. Begin negotiating cooperatively and encourage the reliance of others by behaving in a logical and predictable way. Look for trade‐offs.
  4. Seek creative ways of bridging the gap to an agreement that achieves a client’s key goals and priorities in a simple, straightforward manner.
  5. Do not place your own financial interests or ego above the interests of the client.

Thomas, Stipanowich, “Lincoln’s Lessons for Lawyers” Dispute Resolution Magazine 18  (Feb. 1, 2010) (available at https://bit.ly/3INyalO).

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The CPR Council, the governance body of the CPR Institute, promotes the practice of more efficient and effective dispute prevention and resolution. It oversees the development of dispute management resources and tools. The Council’s web page is available at www.cpradr.org/about/cpr-council.

In addition to Tom Stipanowich’s presentation, the June 22 Council meeting also discussed the updated Council Charter, new Council programming, CPR Dispute Resolution Panelists, CPR’s new Immediation Platform for dispute resolution services, and the revised CPR Diversity Commitment. The meeting concluded with a networking session.

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The author, who will be a second-year student at Columbia University Law School in New York this fall, is a 2022 CPR summer intern.

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Judges as Mediators, and the Issues that Won’t Go Away

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By Mnotho Ngcobo

If you were to ask a layman what mediation is, the answer would probably be something along the lines of, “a private dispute resolution process where an independent private mediator would attempt to assist parties to reach an agreement/solution to whatever dispute they may be facing.”

But one of the problems with the typical layman’s mediation view is that it doesn’t account for a continually emerging group of individuals working their way into this ADR process–the judicial officers, including judges and magistrates (and noting that different countries have different names for these officials).

Often, parties go to mediation to avoid facing a judicial officer. That’s arguably the best part about ADR . . . or it used to be. Judicial officers are employed to adjudicate disputes. They are trained to uphold law and rules, while private mediators are specialists trained to facilitate disputes–they aren’t primarily focused on procedure, for example, because mediation by its nature is flexible and not rule-based.

What happens when a judicial officer AKA a judge mediates a case? What issues does it raise for the parties in disputes?

The truth is that parties often fear judicial officers, and when a judicial officer is facilitating a mediation, parties might not be comfortable. There is then a risk that a party would agree to something out of fear: What happens when the same judicial officer who facilitated the mediation between the parties is tasked with running the fairness hearing? This could cause problems, and some might cry “judicial overreach.”

An interesting case where the judicial officer facilitated the mediation and was also tasked with running the settlement agreement’s fairness hearing was decided earlier this year in McAdams v. Robinson, 26 F.4th 149 (4th Cir. Feb. 10, 2022)(available at https://bit.ly/3aECNBO).

This case arises from a class action lawsuit against Coppell, Texas, finance company Nationstar Mortgage LLC, alleging that Nationstar was in breach of the state and federal consumer protection laws, failing to timely acknowledge receipt of class members’ loss mitigation applications, respond to the applications, and diligently obtain documents to process them.

The case was litigated over six years. In 2017, a Maryland-based U.S. District Court judge referred the case for “Settlement or other ADR conference” before Magistrate Judge Timothy J. Sullivan, of Greenbelt, Md. In March 2020, the parties were ordered to conduct mediation. In June 2020, the parties filed a notice of settlement and a joint motion to proceed before the magistrate judge who had mediated the settlement. Among other things agreed upon in the proposed settlement agreement was that Nationstar would pay a $3 million relief fund, consisting of:

  1. Administrative expenses up to $300,000;
  2. Attorneys’ fees;
  3. A service award to the class’s representative; and
  4. Class claims.

Any remainder, the Fourth Circuit opinion noted, would go to a nonprofit that advocates for consumers. In exchange for the settlement relief fund, all claims against Nationstar would be released.

The magistrate granted the preliminary approval of the settlement agreement and scheduled a fairness hearing.

Petitioner McAdams, who had filed suit against Nationstar in a California action, filed an objection to the proposed settlement agreement. She maintained that the class notice was insufficient; the settlement was unfair, unreasonable, and inadequate; the release was unconstitutionally overbroad, and the attorneys’ fee award was improper.

Objection Overruled

The magistrate judge who mediated the case overruled McAdam’s objections and held that the distribution of the notice was sufficient; the settlement terms were fair, reasonable, and adequate; and the release was not too broad. The magistrate also went on to approve the $1.3 million attorney’s fee.

On appeal, the Fourth U.S. Circuit Court of Appeals affirmed in a unanimous opinion by Circuit Judge Albert Diaz.

The appeals court did not deal in detail with the issue of the magistrate judge having a dual role, as both a mediator and the judge approving the settlement.

Yet petitioner McAdams attacked the magistrate judge’s jurisdiction, holding that she did not consent to have the magistrate judge hear her case. Federal law provides that with the “consent of the parties,” a magistrate judge may conduct “any or all proceedings . . . and order the entry of judgment.” 28 U.S.C. § 636©(1). McAdams argued that the word “parties” includes her as an absent class member.

But the appeals court rejected McAdams’s assertion and held that absent members are not ‘within the contemporary meaning of the term “parties” as used in § 636.

McAdams also argued that this case presents a serious conflict of interest because the magistrate judge both mediated and approved the settlement agreement. The panel noted that it did not deal with this issue because McAdams did not “support that assertion” nor “preserve [it] for appeal.” The opinion states that McAdams did not move for the magistrate judge’s recusal or otherwise object. For those reasons, the Court did not deal with the conflict issue.

The Fourth Circuit has addressed with the issue of objector requirement in 1988 Trust for Allen v. Banner Life Ins. Co., 28 F.4th 513 (4th Cir. 2022) (available at https://bit.ly/3o47kvZ). In the case the objector argued that there was no burden on its part to show that the settlement was unfair, but rather the burden rested on the parties that sought settlement approval. The appeals court rejected this argument and held that the objector must clearly state its case to allow the other parties to fully respond and for the court to evaluate the issues. The court held that it is only when a sufficiently specific objection has been made, that the parties seeking settlement approval have the burden of proof.

The objector, like McAdams, failed to support it arguments.

The McAdams case creates severe implications for the absent class members. It may seem like the courts afford them less protection. Class actions not only affect the rights of the named plaintiffs, but also the rights of the absent class members. The court must play a major role in ensuring that the rights of all class members are recognized and protected.

The McAdams appeals panel held that absent class members are not parties to the action within the meaning of section 636(c), and, therefore, absent class members do not need to consent should the named plaintiff and defendant file a consent.

Removing and/or limiting such a right should be accompanied by some form of protection. This means that McAdam’s conflict-of-interest argument plays little to no role in this case since she, and others in her position, cannot object nor consent as absent class members.

The Magistrate’s Dual Role

Presiding judicial officers have long been performing this dual role of mediating and approving settlements. Some scholars argue that this dual role improves access to justice–in that there is no need to hire a private mediator, thus reducing costs for the parties involved.

Others counter that the dual role creates a conflict of interest. A judicial officer who mediated a case might be biased once the official has to decide on the same matter at a fairness hearing.

One of the biggest and most persistent issues is that a judicial officer determined to settle a case “has enormous power to coerce a settlement.” Patrick E. Longan, “Bureaucratic Justice Meets ADR: The Emerging Role for Magistrates as Mediators,” 73 Neb. L. Rev. (1994) (available at https://bit.ly/3z8fPMQ). The court can instill in the parties a fear of retaliation which would make going to trial unappealing.

Lawyers representing their clients before the judicial officer serving as a mediator might feel compelled to urge clients to accept whatever the judicial mediator is saying to avoid alienating the court, or be on the wrong side of the judicial officer, which would make their future cases before that judicial officer hard.

So while it may seem like a good idea to have judicial officers serve as mediators, it still can create some problems. A judicial officer who mediates a case might have his or her objectivity questioned later because, during mediation, parties will disclose information and the mediator would weigh in on that and might even advise the parties of the cons of going to trial. The judicial officer runs the risk of being committed to one view of the case.  

The risks of judicial officers serving as mediators far outweigh the benefits. In McAdams, the argument of conflict of interest could have been avoided if a different judicial officer had decided on the fairness hearing. The moment the magistrate judge ran the fairness hearing, the conflict arguments advanced above were triggered.

As McAdams demonstrates, the area continues to be one of intrigue both for case management efficiency, and the problems inherent in its use.  See a new article on the topic at Melissa B. Jacoby, “Other Judges’ Cases” NYU Annual Survey of American Law, Vol. 72, 2022 Forthcoming, UNC Legal Studies Research Paper (June 30, 2022) (available at https://bit.ly/3cj2PuY).

For more on McAdams, see Donald L. Swanson, “Judicial Mediator Serving As Deciding Judge In Same Case: An Overreach? (McAdams v. Robinson)” mediatebankry blog (Feb. 22, 2022) (available at https://bit.ly/3aEY3HC).

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The author, a South Africa attorney who received his LLM in dispute resolution from University of Missouri-Columbia Law School in May, is a 2022 CPR Summer intern.

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