Beyond the Pandemic: A U.K. Research Center Issues Disputes Guidelines

By Jacqueline Perrotta

In response to the Covid-19 pandemic, the British Institute of International & Comparative Law (“BIILC”) developed the “Breathing Space” series to discuss the impact of the pandemic on the legal and business world, and reflect on preserving commercial relationships further promoting economic sustainability.

The BIILC is a center for research projects, seminars, and publications to advance and develop the understanding of international and comparative law in the U.K. and globally. As part of the Breathing Space series, the first and second “concept notes” focused on the legal and business communities’ reliance on private law and how disputes arise during the pandemic, particularly the burden on the courts, and how dispute resolution can be used to foster rather than impede economic recovery. 

Last September’s third concept note in the series outlined the best practices for dispute resolution, continuing the discussion of how business uncertainty and the effects of the pandemic inhibit economic growth.

Using the guidelines as a different perspective from which to view legal and business disputes in light of the pandemic, BIILC is encouraging efficient dispute resolution, keeping existing relationships intact and strengthening new commercial partnerships.

The guidelines outline three main concepts: (A) interactions between contractual parties; (B) dispute resolution considerations, and (C) ADR and legal proceedings, focused on efficient proceedings and resolution using ADR techniques or other available procedures.

Subpart A, interactions between contractual parties, highlights the conduct of contractual parties and the goal of supporting the relationships by discussing and balancing each parties’ perspective. Subpart B, dispute resolution considerations, focuses on the behaviors geared toward resolving disputes and preventing further aggravation by appointing appropriate parties and addressing each sides’ limitations. Finally, Subpart C tackles dispute resolution through official procedures and efficient resolution, using ADR techniques such as mediation or arbitration.

Meant to supplement a business’s existing practices rather the supplant them altogether, the guidelines are a reminder that maintaining meaningful commercial relationships is essential to the success of the overall economy.  

Helen Dodds, co-drafter of the BIILC guidelines, says the aim is to provide a “menu to help make sensible choices,” and should be referred to generally when tackling disputes and coming to resolutions between parties.

By tailoring the guidelines and revising them slightly to make them more applicable globally, BIILC has provided a simple but effective reference tool. While the focus is on commercial contracts, the guidelines can also apply more broadly to commercial torts matters.

Many U.K. firms and organizations have commented on these guidelines and their potential across legal and business communities, Dodds says, noting the importance behind implementing these best practices and making the guidelines as universal as possible.

The guidelines can be applicable in any culture, jurisdiction, or legal system, says Dodds, who is a member of the Commercial Dispute Resolution Taskforce of LawtechUK, which works on digital initiatives to benefit the U.K. legal services sector. She also is former Global Head of Legal, Dispute Resolution, at Standard Chartered Bank.

The catalyst for the guidelines was the pandemic, but looking forward, the goal is to have the guidelines used broadly and globally, collating the ideas and practices in a succinct and cohesive document.  Dodds says that the guidelines assist in promoting good choices so that business and legal communities can contribute to economic recovery by promoting less confrontational dispute resolution, ultimately preserving commercial relationships and decreasing the costs of disputes.

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The author, a J.D. student who will enter her second year this fall at Brooklyn Law School, is a 2021 CPR Summer Intern.

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EEOC (and Congress) Rolls Back ADR Policy

By Cai Phillips-Jones

A new U.S. Equal Employment Opportunity Commission rule affecting the agency’s conciliation process became effective Feb. 16, but was repealed via a Senate resolution last month. The May 19 Senate move signals “disapproval”; In order for the rule to be fully overturned, the House will have to vote on the joint resolution, and it must be signed into law by President Biden.

Passage is likely in House, where it awaits consideration. The conciliation process rule, devised under the Trump Administration, drew fire from Democrats because it required more information in early stages of discrimination complaints to be provided to employers, and critics said that could spark retaliations.  Republican supporters said the process supported settlements. See, e.g., Daniel Wiessner, “Senate votes to repeal EEOC settlement rule that ID’ed bias victims,” Reuters (May 19) (available at https://reut.rs/3wcIYCG).

Conciliation is a mediation-like process that aims to increase the speed at which EEOC complainants get relief. Conciliation is conducted by an EEOC investigator rather than a third-party mediator, and takes place after the agency has found evidence of discrimination.

The new rule required the EEOC to share the factual and legal basis of any findings of discrimination with employers about findings of discrimination during the conciliation process. The rule aims to increase the transparency of the conciliation process by providing the employer with more information about their potential liability.

The rule has been viewed as a rollback of the Supreme Court decision in Mach Mining v. EEOC, 575 U.S. 480 (2015) (available at https://bit.ly/2TmuMZg), which limited the amount of information employers received about EEOC discrimination findings.

The Senate vote to overturn the new conciliation rule is the latest example of EEOC rules changing since the Biden administration took office. In addition to this rule change, a conciliation pilot program was ended earlier than expected, in January. The pilot program made a small change to the existing EEOC program by mandating that settlement offers be shared with “appropriate levels of [EEOC] management” before being shared with the respondent.

In January, the EEOC also ended a mediation pilot program, which expanded the use of mediation to additional case types and during more phases of the EEOC administrative process. The mediation pilot program was announced on July 7, 2020, and was originally scheduled to run for six months, ending in January 2021. On Jan. 6, the pilot was extended until September, 2021. But the EEOC reversed course weeks later, and under new Biden Administration EEOC leadership, ended the program on Jan. 27.

In addition to expanding the availability of mediation, the pilot program also increased the use of video-conferencing mediation and electronic feedback from mediation participants. The video conferencing and electronic communication elements will be carried forward from the pilot program, as will the ability for parties to request a mediation at any point during the EEOC process.

It appears that the only major part of the pilot not being continued is the expansion of mediation to additional case types. EEOC cases are individually evaluated for referral to mediation. Some case types, however, including class and systemic charges, have historically been exempted from mediation referrals. During the pilot, these exemptions were suspended. The end of the pilot likely signifies a return to exempt status for these cases.

In the Jan. 27 press release terminating the previously extended pilot but noting the popularity and success of EEOC mediation, the new EEOC Chair, Charlotte A. Burrows, endorsed the continuing use of mediation and conciliation when appropriate. “I strongly support the prompt and voluntary resolution of discrimination charges whenever doing so is consistent with our mission,” she noted in a statement in the release, adding, “The Commission will continue to strengthen its conciliation and mediation programs in accordance with the overarching goal of preventing and remedying discrimination in the workplace.”

Burrows was critical of the pilot program’s implementation by predecessor chair Janet Dhillon. As an EEOC Commissioner last July, Burrows, noting that the program hurt the agency’s traditional enforcement role, said that Chair Dhillon “lacks authority to institute this sweeping change unilaterally, because it contradicts policy formally approved by a Commission vote.” See Paige Smith, “EEOC Alters Mediation Process Under New Temporary Program,” Bloomberg Law (July 7, 2020) (available here).

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The author, a J.D. student who will enter his third year this fall at Yeshiva University’s Benjamin N. Cardozo School of Law in New York, is a 2021 CPR Summer Intern.

[End]

Dispute Resolution Mechanisms Report on the China Belt and Road Construction Projects

By Mylene Chan

The Beijing Arbitration Commission/Beijing International Arbitration Center, the  China International Contractors Association, and Tianjin University Department of  Engineering Management jointly released a report on the use and nature of dispute resolution mechanisms in Belt and Road Construction Projects (BRI Report). 

The report provides interesting insights into the ADR preferences of the many players involved in the project, including on the types of disputes, arbitrator selection, the availability of mediation, and more.

China initiated the Belt and Road Initiative (BRI) in 2013 to connect Asia with Africa and Europe through land and maritime networks. The BRI has spawned massive infrastructure investments.  For more on the Belt and Road Initiative, see a researcher’s website here, and see Andrew Chatzky and James McBride, “Backgrounder: China’s Massive Belt and Road Initiative,” Council on Foreign Relations (Jan. 28, 2020) (available at https://on.cfr.org/3vfXhoX).

The April 2021 BRI Report (available in Chinese at https://bit.ly/3pHEDFj) examined the experiences of Chinese general contractors regarding the use of arbitration to resolve BRI disputes. From March 2020 to May 2020, the BRI Report interviewed more than 1,000 experts from 13 industries participating in BRI projects around the world, including trading companies, electrical contractors, financial institutions, investment companies, and general contractors. Respondents’ roles included insurers, suppliers, financiers, subcontractors, owners, and general contractors.

The interviews revealed a number of interesting data points. Disputes were mostly between general contractors and project owners. Disputes also arose between general contractors and subcontractors, among parties within joint ventures, and between general contractors and suppliers. The issues in dispute primarily involved project delay, change of construction, unforeseeable risks, payment issues, and suspension and termination of projects.

The main form of dispute resolution elected by BRI Chinese companies, according to the report, was negotiations/top-management discussions. The next four forms of dispute resolution in descending importance were commercial arbitrations, commercial mediations, dispute hearings, and litigation in local courts.

The top reasons given for choosing arbitrations, according to the BRI Report, were, in descending importance, independence and impartiality, enforceability of judgments, confidentiality, professionalism, and fairness. Top concerns when choosing arbitration included a lengthy process/high cost, an inability to reverse the judgement, a lack of understanding of arbitration institutions and arbitrators, the limitation of arbitration clauses in contracts, and low efficiency. 

The interviewees indicated that the main reason for choosing a particular arbitration center was its reputation. Interviewees also considered independence and fairness, efficiency, location, and strength of specialties. The parties’ nationality and the contract’s governing law played a role as well.

The speed of arbitration was also cited as an important consideration. While the arbitrations generally lasted between one to three years, most interviewees deemed an arbitration duration of less than one year as efficient. The greater speed of arbitration in China was a factor in preferring Chinese arbitration centers.

The main consideration in selecting arbitrators was arbitration experience in the relevant industry. The next four top selection considerations in descending importance were legal and specialized knowledge, industry experience, familiarity of law, independence and impartiality.

Interviewees cited the application of non-Chinese law, the use of non-Chinese languages in arbitration processes, unfamiliarity with the arbitration process, the high cost of arbitration, and uncertain arbitration results as major frustrations during the arbitration process. Factors affecting the cost and efficiency of arbitration included the professionalism of arbitrators, complexity of evidence, management of arbitration centers, difficulty of disputes, and professionalism of lawyers.

The top three services sought by BRI Chinese companies in the survey results, in descending importance, were a speedy arbitration process, independent mediation services outside of the arbitration process, and mediation within arbitration centers. The top three dispute resolution skills and knowledge in which BRI Chinese companies hoped to see improvements were international arbitration practice, contract negotiations, and knowledge of U.S. and British contract law.

Because Chinese culture favors dispute resolution outside of courts, the BRI, populated by Chinese companies, has a great need for alternative dispute resolution. To minimize value-deflating conflicts, the BRI Chinese companies should consider incorporating dispute prevention at the outset of contract formation—the January 2021 CPR Dispute Prevention Provisions are a good example. The provisions supplement traditional dispute resolution clauses, rather than replace them, by calling for, for example, parties’ commitment to the principle of early identification and discussion of disagreements, and flexible options to use the services of a third-party as facilitator or neutral as disagreements arise in contract performance.

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The author, an LLM candidate, at Yeshiva University’s Benjamin N. Cardozo School of Law in New York, is a 2021 CPR Summer Intern.

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Y-ADR Interview Series: From In-House Counsel to Ombuds

CPR’s new Y-ADR Interview Series returns this week with another discussion on in-house work, law practice development, and careers in dispute prevention and resolution.

This week, Y-ADR Steering Committee member Elizabeth Chan, an associate in the London office of Three Crowns, discusses career advice and conflict resolution with Timothy Shore, former ombudsman at Pfizer Inc. in New York.

Shore discusses his work in more than 30 years at Pfizer in the legal, business, and human resources functions.  He served as the pharmaceutical giant’s first Chief Ombudsman, and talks about his design work involving the function to address employment issues, including using alternative dispute resolution.

He discusses his views on the value of a role for restorative justice in dispute resolution in corporate contexts, and provides advice for young practitioners looking to go in-house.

Lizzie Chan’s interview is her third in the series.  The previous interview, with CPR Y-ADR co-chair Jason Klingensmith, Assistant General Counsel, at General Motors Co. in Detroit, is available on CPR Speaks here.  The kickoff interview in the series, with Jason’s GM colleague Brittany Mouzourakis, is available on CPR Speaks here.

Watch above, and share the interview on YouTube here.

CPR’s Young Leaders in Alternative Dispute Resolution educates the next generation of leaders on the full spectrum of dispute prevention and resolution mechanisms, and offers unique networking and professional development benefits to participants. Through periodic seminars and other initiatives, participants are introduced to CPR and gain an insider’s view into how CPR’s community of corporate counsel, law firm counsel, and other experts in the field are using dispute prevention and resolution techniques to manage conflict.

Y-ADR is open to the conflict prevention and resolution community–attorneys, professionals, academics and students–45 years old and younger, or those with less than eight years of professional experience in international or domestic ADR practice or other areas of conflict prevention and resolution.

The Y-ADR Steering Committee is the leadership group for Y-ADR. Jason Klingensmith’s co-chair is Ulyana Bardyn, counsel in the New York office of Eversheds Sutherland. The Committee has extended its deadline for seeking applications for new members until June 15–for information, go here.

Follow CPR’s social media at the links at the bottom of this page for developments, and connect with Y-ADR’s LinkedIn page here.

If you would like to hear more about ombuds with Timothy Shore, join CPR for the June 16 CPR Employment Dispute Committee, where Tim will be joined by Joan Waters, University Ombuds Officer in the Ombuds Office at Columbia University, and Natalie Chan of Sidley Austin LLP. The panel will discuss ombuds programs, including how they are set up and the various services and powers they have to prevent disputes in corporations and universities. Information on the panel program Timothy will join, and registration, is available on CPR’s website here.

In addition, for more information on other dispute prevention techniques and practices, visit CPR’s website, which features the recently launched Dispute Prevention Pledge for Businesses, a new policy statement in which organizations pledge to incorporate dispute prevention mechanisms into their arrangements, here.

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Decline of Dialogue? Galton, Love & Weiss on Joint Sessions, Caucuses, and the State of Mediation

If the point of mediation is to get parties together to discuss and thereby resolve their problems, why is the distinct trend to keep the parties apart?

The cover story in the new June issue of Alternatives to the High Cost of Litigation presents a survey that shows how caucuses predominate and joint sessions are declining in mediation practice. 

The authors–veteran leaders in the profession—are Eric Galton of Lakeside Mediation Center in Austin, Texas; Lela P. Love, a law professor and director of the Kukin Program for Conflict Resolution at New York’s Benjamin N. Cardozo School of Law, and Jerry Weiss, founder of MediationInc, based in Shaker Heights, Ohio.

The authors join us in the YouTube video above to discuss their research.  Please like and share it at the YouTube link or below on Twitter, Facebook, and LinkedIn.

In their Alternatives article, “The Decline of Dialogue: The Rise of Caucus-Only Mediation And the Disappearance of the Joint Session,” 39 Alternatives 89 (June 2021), the authors chart the regional differences in the use of joint sessions and so-called phenomenon of “mediation without dialogue,” and use an example of how joint sessions can be deployed to reduce the conflict that caused the dispute.

Alternatives is available here to CPR members who are logged into the CPR website.  Subscription information is available at altnewsletter.com.

[END]

Roundup: Four New Arbitration Petitions Under Consideration at the U.S. Supreme Court

By Mylene Chan

Four recent petitions for writs of certiorari pending before the U.S. Supreme Court raise a number of interesting arbitration issues. While the Court may decline to hear these cases, they are worth following because they could help to define the scope of arbitration in both consumer and commercial contexts.

The cases are being briefed and will be scheduled for conferences.  If accepted, they likely would be argued in the 2021-2022 Court term beginning Oct. 4.

The Court already has two cases that will be argued in the new fall term, and which are awaiting hearing dates:

* * *

Here are the cases the Court will soon be considering:

Shivkov v. Artex Risk Solutions Inc., No. 20-1313

Shivkov centers on the availability of class arbitrations. In the case, the plaintiffs contracted with Artex and TSA Holdings LLC to set up and manage business entities—captive insurance vehicles the small business owner-plaintiffs entered into with the defendants–that the U.S. Internal Revenue Service later determined were illegal tax shelters.  The plaintiffs alleged the captive insurance schemes were “mass-marketed fraud” that caused the plaintiffs to be liable for back taxes, penalties, interest and “significant fees.”

The plaintiffs filed a class action against the defendants, alleging a variety of Arizona state and federal claims for breach of fiduciary duty, negligence, conspiracy and related claims.  Relying on an arbitration clause in the agreements, the defendants moved to compel arbitration.

The Ninth U.S. Court of Appeals ordered individual arbitrations of the plaintiffs’ claims. The appeals court first rejected the plaintiffs’ arguments that the defendants had a fiduciary duty to explain the arbitration clause to the plaintiffs, that the arbitration clause did not survive termination of the contracts, and that the arbitration clause did not cover all of the plaintiffs’ claims.

The appeals court also found that class arbitration was unavailable.  In so ruling, the appellate panel held that the availability of class arbitration is a gateway issue for courts–not arbitrators–to decide that the arbitration agreements did not provide for class arbitration. The Ninth Circuit also rejected the plaintiffs’ argument that the inclusion of the American Arbitration Association as the default arbitration method in the agreements was the equivalent of incorporating AAA rules about class arbitrability by reference into the agreements.

On March 17, the plaintiffs filed a petition for a writ of certiorari and presented two questions: (1) Whether an agreement that specifies arbitration before the AAA as the default dispute resolution method also must specifically mention the AAA rules to avoid being considered ambiguous about whether the parties intended to apply the AAA rules; and (2) Whether the availability of class arbitration is a matter for an arbitrator to decide, or for a court to decide.

* * *

Eni USA Gas Marketing LLC v. Gulf LNG Energy LLC, No. 20-1462

The next case involves an attempt to use arbitration proceedings as a means of collateral attack on a previous arbitration award. In the case, Gulf entered into a Terminal Use Agreement (TUA) with Eni whereby Gulf would construct a natural gas terminal and Eni would use the terminal to deliver natural gas. The TUA contained a broad arbitration clause.

Eni initiated arbitration, alleging breach of contract, and arguing that the TUA was void because of unforeseen changes in the market. The arbitration tribunal found that the TUA had terminated and ordered Eni to pay Gulf for the value of Gulf’s partial performance under the TUA.

Eni then filed a second arbitration alleging a breach of contract claim left undecided from the first arbitration and misrepresentation. Gulf moved to enjoin Eni from pursuing the second arbitration. Eni argued that an arbitrator–rather than a court–should decide whether the first arbitration award precludes the second arbitration.

The Delaware Supreme Court enjoined Eni from pursuing the second arbitration. The Court reasoned that when a party files a second proceeding attacking a prior arbitration award, it circumvents the contractual  Federal Arbitration Act review procedure. The Court held that courts may intervene in a party’s attempt to seek arbitration when the objective is to rectify a prior unfavorable arbitration award by arbitrating claims in new separate arbitration proceedings. 

On April 15, Eni filed a petition for a writ of certiorari in the U.S. Supreme Court presenting the issue of whether the FAA permits a court to refuse to enforce an arbitration agreement delegating all questions, including a question of arbitrability, to an arbitrator where a party contends that the claim sought to be arbitrated represents a “collateral attack” on a prior arbitration award.

* * *

HRB Tax Group v. Snarr, No. 20-1570

This case looks at the scope of the Federal Arbitration Act preemption of state law in cases where plaintiffs seek a remedy of a public injunction. In HRB Tax Group v. Snarr, the plaintiffs sought to stop their tax service provider from continuing business practices they alleged are fraudulent.

HRB and the plaintiffs entered into agreements in which HRB offered the plaintiffs services in filing tax returns. The service agreements required all disputes arising from these agreements to be resolved through individual arbitration.

The plaintiffs, customers of H&R Block’s accounting services, alleged that the marketing of HRB’s tax filing services violated California’s Consumers Legal Remedies Act, False Advertising Law, Cal. Bus. & Prof. Code, and Unfair Competition Law. They filed a class action suit against HRB and sought a public injunction enjoining HRB’s alleged misleading web services and advertising.

HRB moved to compel arbitration, arguing that the Federal Arbitration Act, which provides that arbitration agreements are presumptively valid, preempts McGill v. Citibank, N.A. 393 P.3d 85 (2017) (which held that a contract is unenforceable when it entirely waives the right to seek public injunctive relief under consumer protection statutes). 

The Ninth Circuit denied HRB’s motion to compel arbitration. The court reasoned that HRB’s argument had been foreclosed by Blair v. Rent-A-Center Inc., 928 F.3d 819 (2019) (holding that the FAA does not preempt McGill.)

HRB’s May 10 U.S. Supreme Court cert petition asks whether California’s public policy rule declining to enforce agreements for individualized arbitration whenever a plaintiff seeks a public injunction is preempted by the Federal Arbitration Act.

* * *

Viking River Cruises v. Moriana, No. 20-1573

The fourth case raises questions about the applicability of agreements for bilateral arbitration to claims brought under California’s Private Attorneys General Act of 2004 (PAGA). In Viking River Cruises, aggrieved employees sought relief from an international cruise line.

Original plaintiff Angie Moriana agreed upon joining Viking as a sales representative to an arbitration agreement providing that any employment-related disputes would be arbitrated. The agreement also required Moriana to waive all rights to bring a class, collective, representative, or private attorney general action in the employment contract.

Moriana filed suit against Viking on behalf of the state and all other similarly situated employees alleging various California Labor Code violations under PAGA.

Viking moved to compel individualized arbitration of Moriana’s PAGA claims, arguing that Epic Systems Corp. v. Lewis 138 S.Ct. 1612 (2018), validates private predispute waivers of such claims. Viking claimed that Epic Systems overruled Iskanian v. CLS Transportation Los Angeles, LLC  59 Cal. 4th 348 (2014), a California Supreme Court decision holding that arbitration agreements that waived the right to bring PAGA actions are unenforceable.

The California Court of Appeal denied Viking’s motion to compel arbitration, reasoning that the real party in a PAGA claim is the state and Moriana was not acting as an agent of the state when she bound herself to arbitrate. The court  explained that Iskanian remains good law because Epic Systems differs fundamentally from a PAGA claim. Epic Systems addressed the enforceability of an individualized arbitration requirement against challenges that such enforcement violated the National Labor Relations Act.

Viking filed a petition for writ of certiorari on May 10. The issue the Court will decide to consider is whether the Federal Arbitration Act requires enforcement of a bilateral arbitration agreement providing that an employee cannot raise representative claims, including under PAGA.

* * *

The author, an LLM candidate at Yeshiva University’s Benjamin N. Cardozo School of Law in New York, is a 2021 CPR Summer Intern.

CPR Y-ADR Corporate Counsel Interview #2: GM’s Klingensmith on Career Tips, ADR in the Pandemic, and More

Following up on last week’s debut, CPR’s Y-ADR group’s new Corporate Counsel Interview Series returns this week with another discussion on in-house work and law practice development.

Click above and share the YouTube interview by Y-ADR member Elizabeth Chan, an associate in the London office of Three Crowns, who discusses career advice and conflict resolution with Jason Klingensmith, Assistant General Counsel, at General Motors Co. in Detroit.  Jason co-chairs Y-ADR’s Steering Committee.

Jason follows his GM colleague Brittany Mouzourakis, Counsel-Litigation, who discussed her career path with Elizabeth in the series kickoff last week, available on CPR Speaks here. In the Corporate Counsel Interview Series, in-house attorneys are asked to share their perspectives on dispute resolution mechanisms and their advice for young practitioners.

Jason also discusses ADR. He notes in the interview that GM relies heavily on arbitration in its vendor contracts, which he says is standard U.S. practice, and preferred for international contracts. He says the company has particularly focused on mediation in the pandemic, and “the remote mediation setting very amenable to resolving disputes.”

Watch above, and share the interview on YouTube here.

CPR’s Young Leaders in Alternative Dispute Resolution educates the next generation of leaders on the full spectrum of dispute prevention and resolution mechanisms, and offers unique networking and professional development benefits to participants. Through periodic seminars and other initiatives, participants are introduced to CPR and gain an insider’s view into how CPR’s community of corporate counsel, law firm counsel, and other experts in the field are using dispute prevention and resolution techniques to manage conflict.

Y-ADR is open to the conflict prevention and resolution community–attorneys, professionals, academics and students–45 years old and younger, or those with less than eight years of professional experience in international or domestic ADR practice or other areas of conflict prevention and resolution.

The Y-ADR Steering Committee is the leadership group for Y-ADR. Jason’s co-chair is Ulyana Bardyn, counsel in the New York office of Eversheds Sutherland. The Committee is seeking applications for new members, here, but note that the application period is closing this week.

CPR has posted the Y-ADR Corporate Interview Series on its website audio/video page, here. Follow CPR’s social media at the link (scroll to the bottom) for developments, and connect with Y-ADR’s LinkedIn page here.

[END]

Y-ADR Launches a New Corporate Counsel Interview Series, Providing an Insider’s View

CPR’s long-running Y-ADR group this week has kicked off a new Corporate Counsel Interview Series.

Click above and share the YouTube interview by Y-ADR member Elizabeth Chan, an associate in the London office of Three Crowns, who discusses in-house practice with Brittany Mouzourakis, Counsel-Litigation at General Motors Co. in Detroit.

CPR’s Young Leaders in Alternative Dispute Resolution (see www.cpradr.org/programs/y-adr) educates the next generation of leaders on the full spectrum of dispute prevention and resolution mechanisms, and offers unique networking and professional development benefits to participants. Through periodic seminars and other initiatives, participants are introduced to CPR and gain an insider’s view into how CPR’s community of corporate counsel, law firm counsel, and other experts in the field are using dispute prevention and resolution techniques to manage conflict.

Y-ADR is open to the conflict prevention and resolution community–attorneys, professionals, academics and students–45 years old and younger, or those with less than 8 years of professional experience in international or domestic ADR practice or other areas of conflict prevention and resolution.

The Y-ADR Steering Committee is the leadership group for Y-ADR. The Committee is chaired by Ulyana Bardyn, counsel in the New York office of Eversheds Sutherland, and Jason Klingensmith, assistant general counsel at General Motors. The Committee is currently seeking applications for new members, here.

Interviewee Brittany Mouzourakis also serves on the Y-ADR Steering Committee.

In the Corporate Counsel Interview Series, in-house attorneys are asked to share their perspectives on dispute resolution mechanisms and their advice for young practitioners.

CPR has posted the Y-ADR Corporate Interview Series on its website audio/video page, here. Follow CPR’s social media at the link (scroll to the bottom) for developments, and connect with Y-ADR’s LinkedIn page here.

[END]

Supreme Court Adds an Arbitration Case for the 2021-2022 Term

By Mark Kantor

Today is an important day in the US Supreme Court, as the Court agreed for the first time in many years to hear a case on abortion rights.  Court watchers will rightly focus extensively on that development.

In far-less significant news, but perhaps of interest to the arbitration community, this morning the U.S. Supreme Court also denied certiorari in Selden v. Estate of Silverman, 20-895, a Federal Arbitration Act case involving (1) whether vacatur on public policy grounds is permitted and (2) the proper standard for “evident partiality” vacatur.  The March 2020 Nebraska Supreme Court decision in the matter stands, upholding the confirmation of an arbitration as well as sanctions and attorneys fees.

The Court, however did grant certioraritoday in another FAA case, Badgerow v. Walters, No. 20-1143 (documents available at https://www.scotusblog.com/case-files/cases/badgerow-v-walters/).

The Question Presented in Badgerow is:

Whether federal courts have subject-matter jurisdiction to confirm or vacate an arbitration award under Sections 9 and 10 of the Federal Arbitration Act when the only basis for jurisdiction is that the underlying dispute involved a federal question.

Badgerow is thus a dispute regarding when, if at all, the U.S. federal courts have “federal question” jurisdiction over an FAA confirmation/vacatur dispute.  It will accordingly be of primary interest for U.S. litigators seeking a court ruling on whether a local state court or a federal court is the proper forum to decide whether an arbitration award can be confirmed or vacated under the FAA when the underlying arbitration award resolves a question of federal law.

Federal courts are forums of limited jurisdiction.  Longstanding jurisprudence holds that the FAA itself does not create federal court jurisdiction.  Rather, a party seeking to have a U.S. federal court forum for an FAA-related dispute must find an independent ground for jurisdiction. 

The implementing statutes for the New York and Panama Conventions do, however, expressly create federal subject matter jurisdiction for their covered international awards.  Consequently, the issue does not arise for those awards.

Badgerow poses the question of whether a federal court may “look through” to see if the underlying subject matter of the arbitration award resolves a “Federal question” and, if the answer is “yes,” take jurisdiction of the case.

The petitioner’s cert petition summarizes the legal issue and circuit split succinctly:

As this Court has repeatedly confirmed, the FAA does not itself confer federal-question jurisdiction; federal courts must have an independent jurisdictional basis to entertain matters under the Act.  In Vaden  v.  Discover Bank, 556 U.S. 49 (2009), this Court held that a federal court, in reviewing a petition to compel arbitration under Section 4 of the Act [failure to arbitrate under agreement; petition to United States court having jurisdiction for order to compel arbitration], may “look through” the petition to decide whether the parties’ underlying dispute gives rise to federal-question jurisdiction.  In so holding, the Court focused on the particular language of Section 4, which is not repeated elsewhere in the Act.

After Vaden, the circuit courts have squarely divided over whether the same “look-through” approach also applies to motions to confirm or vacate an arbitration award under Sections 9 and 10. In Quezada v. Bechtel OG & C Constr. Servs. Inc., 946 F.3d 837 (5th Cir. 2020), the Fifth Circuit acknowledged the 3-2 “circuit split,” and a divided panel held that the “look-through” approach applies under Sections 9 and 10. In the proceedings below, the Fifth Circuit declared itself “bound” by that earlier decision, and applied the “look-through” approach to establish jurisdiction.  That holding was outcome-determinative, and this case is a perfect vehicle for resolving the widespread disagreement over this important threshold question.

The question presented is:

Whether federal courts have subject-matter jurisdiction to confirm or vacate an arbitration award under Sections 9 and 10 of the FAA where the only basis for jurisdiction is that the underlying dispute involved a federal question.

[Emphasis is in the brief, which can be found here.]

The dispute will likely come up for oral argument before the U.S. Supreme Court sometime in its October Term.

Badgerow is the second arbitration case slated for the new fall term.  On March 22, the Court agreed to hear Servotronics Inc. v. Rolls-Royce PLC, et al., No. 20-794, which will examine “[w]hether the discretion granted to district courts in 28 U.S.C. §1782(a) to render assistance in gathering evidence for use in ‘a foreign or international tribunal’ encompasses private commercial arbitral tribunals, as the Fourth and Sixth Circuits have held, or excludes such tribunals without expressing an exclusionary intent, as the Second, Fifth, and, in the case below, the Seventh Circuit, have held.”

Argument dates for both cases are expected this summer.

* * *

Mark Kantor is a member of CPR-DR’s Panels of Distinguished Neutrals. Until he retired from Milbank, Tweed, Hadley & McCloy, he was a partner in the firm’s Corporate and Project Finance Groups. He currently serves as an arbitrator and mediator. He teaches as an Adjunct Professor at the Georgetown University Law Center (Recipient, Fahy Award for Outstanding Adjunct Professor). He also is Editor-in-Chief of the online journal Transnational Dispute Management. He is a frequent contributor to CPR Speaks, and this post originally was circulated to a private list serv and adapted with the author’s permission.

[END]

Modeling for the World: Five UN Agencies Pledge to Accept Mediation Requests

By Russ Bleemer

The United Nations this week took a big step in modeling conflict resolution for resolving workplace disputes.  A new report says that, upon request, mediation will be the go-to method of resolving employment disputes for several high-profile UN agencies.

This effort not only serves the UN’s internal purposes but also provides an example for the governments world-wide that support UN efforts.

The Annual Report issued this morning by the Office of the Ombudsman for United Nations Funds and Programmes reveals that in 2021, its five associated UN agencies have elevated mediation’s role in their operations via a new Mediation Pledge in which the organizations each pledge to use third-party neutrals to address internal conflict.

The Ombudsman for United Nations Funds and Programmes works to resolve employment disputes within the United Nations Development Programme; the United Nations Population Fund; the United Nations International Children’s Emergency Fund, better known as UNICEF; the UN Office for Project Services, and the United Nations Entity for Gender Equality and the Empowerment of Women, known as UN-Women. 

Management and staff at the organizations have long been able to opt into the Ombudsman system, which, according to the Ombudsman’s website at  fpombudsman.org, provides informal grievance procedures with which the Ombudsman “may consider conflicts of any nature arising from employment“ within the organizations “and related funds and programmes.”

UN employees at the organizations can contact the Ombudsman “at any stage, for help on any work-related problem where a perspective outside of formal channels would be helpful.”

The new pledge, adopted this year by the five agencies, seeks to increase mediation use as part of the Ombudsman’s system of conflict resolution, with the signing agencies acknowledging that a mediated settlement addresses all parties’ interests and can lead to a more harmonious and less stressful workplace.   The texts of the pledges commit to increase mediation use backed by “statements of principles.” Other than the references to the adopting agencies, the pledges include the following:

  • In the event of a workplace conflict between [the signing agency] and a member of its personnel, the organization is prepared to discuss the possibility of resolving the conflict through Mediation.
  • At the request of the member of personnel or of [the signing agency], an initial discussion on the suitability of Mediation will be hosted by the Mediation Unit of the Office of the Ombudsman for United Nations Funds and Programmes.
  • At any time during the mediation process after the initial discussion, if one or both parties believe that Mediation is not viable in their case, either party may withdraw and proceed with formal options to resolve the matter.

The report further notes that the Ombudsman Office has been beefing up its mediation resources over the past year, in time for the pledge rollouts.  It has developed a new web page offering its materials at https://fpombudsman.org/what-we-do/mediation/. These include, among other items, a mediation guide (available in Arabic, English, French, and Spanish); a mediation training flyer; a guide for lawyers and parties in mediation; and a copy of the Ombudsman Office’s agreement to mediate.

The Ombudsman Office has also increased its outreach and training to promote the use and understanding of mediation services, including 14 specialized training sessions for human resources professionals worldwide that involved more than 450 UNICEF human resources staffers.

According to the new Annual Report, even in the face of the pandemic, this increase in mediation services led to record numbers of mediation cases in 2020, with a 97% settlement rate. Mediation now accounts for a greater proportion—almost double that of previous years—of cases brought to the Ombudsman office’s attention. Full details on the case breakdowns and the Ombudsman Office’s activities can be found in the report, just posted at the website link above.

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The author edits Alternatives to the High Cost of Litigation for CPR.

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