Arbitration Clauses In Contracts Research Articles

Staring into voidness — Courts grapple with arbitration clauses in tainted contracts

Arbitration has a noble lineage that stretches back into time. It has evolved from a simple attempt to resolve disputes in the presence of a local authority to a more technical presentation before an independent arbiter. In South Africa, arbitrations have statutory recognition. This article focuses on an arbitration clause that is embedded in a substantive agreement where the agreement was induced by fraudulent misrepresentation by a party to the agreement. The general principles of the law of contract would dictate that fraud makes the contract voidable at the instance of the innocent party. But our courts have equivocated in deciding whether the tainted contract also besmirches the arbitration clause. While earlier decisions confirmed the autonomy of the arbitration clause, two judgments of the Supreme Court of Appeal (‘SCA’) in particular held that the arbitration clause foundered with the main agreement. The article argues that the SCA’s findings were misconceived and suggests that the SCA’s reluctance to allow arbitrators to decide on the validity of an arbitration clause in a contract instigated by fraud is incorrect. It is argued that consonant with international practice, an arbitration clause should be considered a clause separate from the main agreement that will not be affected by the invalidity of the main agreement. A subsequent SCA decision recognised the primacy of an arbitration clause incorporated into an agreement. The article also proffers the possibility of reading into a contract a tacit term that all disputes arising from the main agreement will be arbitrated.

American and European Perspectives on Arbitration Agreements in Online Consumer Contracts

This article offers a discussion of systemic differences between the American and European approach to the application of arbitration clauses in contracts between consumers and enterprises (businesses) included in the digital environment. The first section features a summary of the relevant US regulations and jurisprudence, with special emphasis on judgments of the Supreme Court concerning arbitration as used in online consumer contracts. An analogous analysis is then offered, as part of a legal comparative study, of solutions applied in the European Union. The discussion is accompanied by the author’s suggested reasons for the differences found, while pointing to some of the most recent proposals of legislative changes from the European Commission.

Investors´ protection in the U.S.: the issue of mandatory arbitration clauses in contracts between investors and brokerage/advisory firms

Abstract This paper proposes a review of the American literature, as well as the main rulings of Supreme Court of United States, aiming to map the pros and cons of inserting a mandatory pre-dispute arbitration clause in contracts between investors and brokerage/advisory firms that trade on the securities market. The study discusses some proposals to banish this sort of clause and some ideas to reach a middle ground solution.

Regulating Forced Arbitration in Consumer Financial Services: Re-Opening the Courthouse Doors to Victimized Consumers

Forced arbitration clauses have become almost unavoidable in contracts for financial services and products ranging form credit cards to private student loans. This report examines how the financial services industry uses these clauses to defeat consumers' rights and evade accountability for their wrongdoing.As the report explains, the forced arbitration process harms consumers by relegating them from the civil justice system to an inferior forum for vindicating their rights. In contrast to the courts, forced arbitration tends to be secretive, less independent of industry, more prone to erroneous and arbitrary rulings, more likely to discourage the pursuit of claims with procedural barriers, and more likely to provide inadequate relief for compensating victims of corporate wrongdoing.The report examines the 2016 proposal by the Consumer Financial Protection Bureau (CFPB) to limit the use of forced arbitration clauses in contracts for financial services and products, and finds that the proposal is consistent with the agency's statutory obligation to protect consumers. The report goes on to explain that the CFPB would better fulfill its statutory mandate by revising its proposal to include stronger protections for consumers.

The Federalization of Consumer Arbitration: Possible Solutions

Over the past fifteen to twenty years, businesses dramatically increased the use of arbitration clauses in contracts with consumers. Although commentators criticize the use of arbitration to resolve consumer disputes because arbitration lacks the due process protections inherent in traditional litigation, efforts to regulate or eliminate the use of arbitration in this context have failed miserably. This failure is due in large part to the Supreme Court’s embrace of arbitration and the corresponding lack of federal legislative interest in addressing this issue. The Supreme Court’s arbitration jurisprudence, particularly as it applies to consumer disputes, is the surest example of the “federalization” of an area of law that federalism principles dictate traditionally belong to the states. Interpreting the Federal Arbitration Act (FAA), the Court routinely applies a preemption doctrine that effectively precludes states from regulating the use of arbitration to resolve consumer disputes. As a result, enforcement of state laws regulating the use of arbitration to resolve consumer disputes has become the exception rather than the rule.This Article will focus on the Supreme Court jurisprudence that led to the current situation in which state law plays a minimal role in arbitration doctrine. While state legislatures traditionally regulate contract law issues, the Supreme Court’s interpretation of the FAA has resulted in an anomalous situation in which federal law routinely trumps state laws attempting to reform arbitration. The Article will also explain how the Court’s Stolt-Nielsen (2010) and Concepcion (2011) decisions took the anti-federalism approach a step further – by permitting preemption in areas the FAA does not address. This expansion of the preemption doctrine further undermines the states’ ability to substantively regulate arbitration by defining arbitration in a very specific way and then declaring preempted any regulation or decision that is not consistent with the definition. Moreover, this expansion, together with Congress’ lack of interest in regulating arbitration, makes it quite likely that private dispute resolution providers will be the only institutions able to reform the arbitration process. Recognizing that arbitration law is largely federalized, this Article will then identify a number of possible reforms private dispute resolution providers could implement and review one of the more promising avenues of reform – arbitrator opinion-writing – in greater depth. This reform would have a number of beneficial effects. It would provide transparency in the arbitration process, address problems perceived to exist in the arbitrator selection process, make clear whether the parties received due process during the arbitration, and ensure that awards are carefully considered and evidence properly balanced.

Vacating Arbitration Awards for Manifest Disregard of the Law

The Federal Arbitration Act (FAA) was enacted in 1925 by Congress to establish a national policy favoring arbitration and to end judicial indisposition to arbitration. Since then, courts have routinely enforced arbitration clauses in contracts. The FAA provides for expedited, but limited, judicial review of arbitration awards. The FAA sets forth specific grounds for vacating and modifying arbitration awards. Controversy arose, and remains, in the courts over whether there are other, nonstatutory grounds for judicial review of arbitration awards. This paper will examine the U.S. Supreme Court’s interpretation of the FAA in Hall Street Associates, LLC v. Mattel, Inc., regarding the nonstatutory ground for vacating arbitration awards known as “manifest disregard of the law.” Also addressed is the subsequent case treatment of Hall Street as it relates to manifest disregard of the law as grounds for vacating arbitration awards under the FAA.

Litigation or Arbitration: View from the Trenches

In my business as president of a large consulting engineering firm, it was standard practice to avoid arbitration clauses in contracts. We routinely struck the clause from standard American Institute of Architects (AIA) agreements, and this seemed to be common practice among other architectural and engineering firms with which we did business. Now, I recognize that practice was likely because of a lack of understanding of the arbitration process. Here are a few of the issues that have changed my mind about the effectiveness of arbitration. Subsequently, I will discuss three conflicts resolved in litigation and court-ordered mediation that might have had different results had we had an arbitration clause in our contract.

Republicans Push for Malpractice Reform

Republicans Push for Malpractice Reform

Commentary: Drafting Arbitration Clauses in Contracts Involving Sovereigns

I HAVE been asked to discuss the special considerations that arise when entering into a transaction that may involve arbitration with a sovereign authority – in our hypothetical case the imaginary country of Abyssinia. I would like to take you back to 1996 when US Power was negotiating the power purchase agreement and deciding whether to make the investment in Abyssinia, and to run through some of the arbitration-related issues that US Power, or any other investor, should be thinking about when considering an investment with a state or its political subdivision or an agency or instrumentality of that state. These issues should be considered so as to avoid, or at least anticipate, some of the problems that we are going to see unfold during the course of the mock scenario. The availability of a dispute resolution mechanism that has the potential to result in an enforceable award is often a key factor in deciding whether to enter into a transaction with a foreign sovereign or its political subdivision. The first issue to be considered is whether there is a bilateral investment treaty (BIT), a multilateral treaty or a local arbitration law that will assure the enforceability of an arbitration award. Prospective investors should be aware that certain treaties may provide for international arbitration even if the investor is unable to reach agreement with the sovereign or its political subdivision on the terms of an arbitration agreement. Such treaties may in fact provide the investor with the best option for avoiding local court adjudication of the dispute. If multiple treaties are in effect, the investor should then determine which treaty has the best terms for the resolution of disputes through international arbitration. We know that Abyssinia has a BIT with the United States. If Abyssinia has a BIT with another …

Attorney-General v. Mobil Oil NZ Ltd

Arbitration — Stay of proceedings — Convention on the Settlement of Disputes between States and Nationals of Other States — Jurisdiction of domestic courts — Arbitration clause in contract between Government and company — Reference of matter to International Centre for the Settlement of Investment Disputes — Whether domestic proceedings relate to matter over which proceedings brought pursuant to Convention — Dispute over effect of subsequently enacted legislation — Whether dispute arising under the terms of the agreement — Whether Court having residual discretion to take jurisdiction over matter — Whether Government bound by agreement to international arbitration — Arbitration (International Investment Disputes) Act 1979 — The law of New Zealand

Arbitration 'Agreements in Writing': Notes in the Margin of the Sixth Goff Lecture

IN THE Sixth Goff Lecture,1 Neil Kaplan referred to Article II(2) of the New York Convention,2 that an ‘agreement in writing’ for arbitration shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.3 This definition creates difficulties for arbitration clauses in contracts evidenced by bills of lading, sales confirmations, and charterparty recaps, which are binding if signed by only one party, or unsigned and sent by one party to the other who does not reply, or issued by a broker and sent to both parties who do not reply. Similar problems are created for contracts which include standard written terms with an arbitration clause only by reference, especially in salvage cases, where oral contracts are made over the radio telephone between tug and stricken ship, on the basis of a Lloyd's Open Form. He concluded (and I agree with him) that it was an ‘absurd result’ if a contract for the sale of goods or services would generally be enforced, but the clause in it …

Attorney—General v. Mobil Oil Nz Ltd

117Arbitration — Stay of procceedings — Jurisdiction of domestic courts Arbitration clause in contract between government and company Reference of matter to International Centre for the Settlement of Investment Disputes — Whether domestic proceedings relate to matter over which arbitration proceedings brought — Agreement containing favourable rights of purchase — Dispute over effect of subsequently enacted legislation Whether dispute arising under the terms of the agreement — Whether Court having residual discretion to take jurisdiction over matter — Whether government bound by agreement to international arbitration — Arbitration (International Investment Disputes) Act, 1979— The law of New Zealand

Cargill International SA v. M/T Pavel Dybenko

572State immunity — State entity — Enforcement by third party of arbitration clause in contract — Whether State-owned corporation in early stages of privatisation entitled to immunity — Whether immunity implicitly waived by conclusion of contract containing arbitration clause — Convention on the Recognition and Enforcement of Foreign Arbitral Awards — United States Foreign Sovereign Immunities Act 1976 — The law of the United States

Arab Organization For Industrialization, Arab British Helicopter Company and Arab Rapublic of Egypt v. Westland Helicopters Ltd, United Arab Emirates, Kingdom of Saudi Arabia and State of Qatar

International organizations — Personality — Concept of international legal personality — Organization's legal status not dependent upon law of State in which it has its seat — Limited nature of personality — Whether member States of organization liable for obligations incurred by organization — Constituent instruments of organization — Inference to be drawn from silence of constituent instruments regarding liability of members — Arbitration clause in contract concluded by organization — Whether binding upon member States State immunity — Jurisdictional immunity — Arbitration proceedings — Proceedings instituted against member State in respect of obligations of international organization — Whether State immune — Whether constitution of organization amounting to waiver of immunity — The law of Switzerland

Société Européenne d’Études et d’Entreprises v. People’s Federal Republic of Yugoslavia.

State Responsibility — For Breaches of Contractual Obligations — Contract between State and Foreign Company — Obligation of State to Fulfil Contract in Good Faith — Effect of Devaluation of Currency.State Responsibility — Claims — State Control Over Private Claims — Effect of Compromise of International Claims by State of Which Claimant is a National.Arbitration — Award — Appeal from, to Court of Third State in Which Award Pronounced.Conciliation — Award by Arbitrators as “amiables compositeurs”.Arbitration — In General — Arbitration Clause in Contract between Commercial Firm and State — Binding Force on Arbitrators of Exchange of Letters between that State and Government of the Firm-Effect of Such Exchange of Letters — Effect of Devaluation of Currency — Award as “amiables compositeurs” — Appointment of Arbitrator in Default by Court of Third State.

Arbitration: Validity of Arbitration Clause in Contract

Arbitration: Validity of Arbitration Clause in Contract