KEEPING THE STATUS QUO: INTERIM MEASURES IN … · Committee recognized the work of Salih Mahmoud...

Among the many benefits of international arbitration, one frequently overlooked isthe parties’ ability to define the scope of interim measures that are available pendinga final award in the arbitration. All too often, parties agree to boilerplate arbitrationclauses without giving any thought to the need for, or availability of, interimmeasures — such as injunctions and attachments — to preserve the status quo andprotect the arbitral panel’s ability to render an effective award.

The failure to consider interim measures when drafting international arbitrationagreements may lead to unexpected and potentially devastating consequences. Insome jurisdictions, parties who chose arbitration to avoid the expense and publicityof litigation may find their dispute in a very expensive and public court proceedingunder the guise of an application for an injunction or order of attachment “in aidof” the arbitration proceeding. These “in aid of” litigations often take on a life oftheir own — complete with pleadings, discovery, briefs, affidavits, court arguments,and even evidentiary hearings. On the flip slide, in other jurisdictions, parties mayfind themselves unable to obtain effective interim relief with the result that a victoryin the arbitration is meaningless because the status quo is altered significantly or theassets at issue are dissipated before the award is rendered, confirmed, and enforced.

Fortunately, these consequences can be avoided by choosing the forum andprocedures for interim relief at the time the arbitration agreement is drafted. Theparties may define the scope of interim measures by providing for such relief in theirarbitration agreement, by choosing arbitration rules that empower the arbitrators toaward interim measures, or by choosing to exclude the issue of interim measuresfrom the scope of their arbitration agreement and expressly reserving the right toseek interim measures in local courts.2

This article describes the default rules for interim measures under the principalinternational arbitration rules, the choices parties have to depart from these defaultrules, and some practical considerations when making those choices.

Volume 23, Issue 2

Winter 2007

FOCUS: INTERNATIONAL ARBITRATION

IN THIS ISSUE

Keeping the Status Quo: InterimMeasures in International ArbitrationAgreementsby John J.P. Howley page 1

Co-Chairs’ Noteby Louis F. Burke and Jerome C. Roth page 2

Freedom of Representation and theUnauthorized Practice of Law: TheChanging Landscape in Domestic andInternational Arbitrationby Mark C. Fleming page 7

Using Pre-Arbitration Forum Contactsin Determining Long-Arm Jurisdictionin Post-Arbitration Proceedingby Kenneth I. Schacter,Susan Kim, and Brian R. Hole page 13

International Arbitration –A Primer for the Young Lawyerby Michael A. Roche page 17

Career Options With A Difference:International Commercial Arbitrationby Nosizi Ralephata page 22

Postscriptby the Editors, James L. Loftis and Edward M. Mullins page 27

KEEPING THE STATUS QUO: INTERIMMEASURES IN INTERNATIONAL

ARBITRATION AGREEMENTS

by John J.P. Howley 1

Continued on page 3Defending LibertyPursuing Justice

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The International Litigation Quarterly – Winter 2007Section of Litigation, American Bar Association

The views contained within do not necessarily reflect the views of the American Bar Association, the Section of Litigation, or the Committee.

The International Litigation Quarterly is published four times a year, Spring, Summer, Fall, and Winter, by the Section of Litigation.

American Bar Association, 321 N. Clark Street, Chicago, IL 60610http://www.abanet.org/litigation/home.html

© 2007 by the American Bar Association. All rights reserved.

The International Litigation Committee has had abanner year and is gearing up for another.

Our Committee newsletter was selected by the ABALitigation Section leadership as the best newsletter ofthe year within its category, reflecting the extraordinaryefforts of Ed Mullins and Jim Loftis along with theirterrific staffs (and, in particular, Stephanie Schwausch).Ed and Jim are always in search of new topics andauthors so please let us know if you’d like to write anarticle or suggest a subject matter.

The Committee’s Darfur project represents some of themost important work currently being done by the ABA.At the annual meeting in Hawaii this past August, ourCommittee recognized the work of Salih MahmoudOsman, a Sudanese lawyer recently elected to thatcountry’s parliament, who has worked tirelessly onbehalf of the victims of the genocide. The ABA Houseof Delegates approved the resolution drafted by ourCommittee and sponsored by the Section of Litigation,calling on the United States government to takeincreased action to halt the ongoing tragedy, includingpassage of pending legislation that had stalled at thehouse conference stage. Now, the Committee isworking with Section leadership to establish a team oflawyers from around the U.S. who would travel toAfrica to train Sudanese lawyers on best practices forlocating, collecting, and presenting evidence of thegenocide to the International Criminal Court, whichhas launched an investigation of the matter pursuant toa referral from the United Nations Security Council.

We have also planned a terrific set of MCLE paneldiscussions on international litigation topics. OurOctober teleconference on arbitration in China,organized by Brooks Allen and chaired by David

Miyamoto, was a huge success with over 125participants around the globe. Topics included theenforceability of arbitral awards in the PRC, includingthose awarded by Hong Kong tribunals, and limitationsimposed by PRC law on the ability of companies,including foreign entities, to select arbitration. Futureteleconferences are being planned on the issue ofinternational class actions, particularly in the securitiesfraud field, the jurisdiction of American courts overalleged fraudulent conduct abroad, and discovery issuesarising when documents or other information are in thepossession of foreign subsidiaries or affiliates.

We are also continuing to increase our ties to other barassociations, including the ABA Section ofInternational Law and the Union Internationale desAvocats. Both of us will be speaking on a panelregarding comparative class action issues at the UIA’sannual Congress in Brazil in early November. TheCommittee is co-sponsoring with the UIA a winterseminar in Sestriere, Italy in February 2007 on thetopic of litigating representations and warranties inthe M&A field (contact either of us for moreinformation). The Committee is also working onprograms for the UIA annual Congress to be held inParis in November 2007 and a jury trial program to beheld in Barcelona during 2007.

Please mark your calendars for the Section AnnualMeeting to be held in San Antonio April 11-14, 2007and let us know if you have any ideas for a program orbreakfast meeting.

Most critically, we will be continuing to examine the key cutting edge issues that confront us asinternational litigators, both in the private and public sectors.

Co-Chairs’ Note

by Louis F. Burke and Jerome C. Roth

Louis F. BurkeLouis F. Burke PC

21st Floor460 Park Avenue

New York, NY 10022-1906

(212) [email protected]

Jerome C. RothMunger Tolles & Olson LLP

27th Floor560 Mission StreetSan Francisco, CA

94105-2989(415) 512-4010

[email protected]

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[T]he principal

international

arbitration rules have

been amended to grant

arbitrators specific

authority to award

interim measures . . .

While these rules

authorize arbitral

panels to award or

order interim

measures, they do

not specify the type

of interim relief that

may be granted . . .


Interim Measures Under the AAA-ICDR, ICC,and UNCITRAL Rules

In recent years, the principal international arbitrationrules have been amended to grant arbitrators specificauthority to award interim measures pending finalresolution of the parties’ dispute. Indeed, some rulesprocedures allow the parties to obtain interim reliefbefore the arbitral panel is appointed. Arbitral panelsnow are empowered to award interim relief under allthe major international arbitration rules: theInternational Chamber of Commerce (ICC), theInternational Centre for Dispute Resolution of theAmerican Arbitration Association (ICDR-AAA), theLCIA Arbitration International (LCIA), and theUnited Nations Commission on International TradeLaw (UNCITRAL).

The ICDR-AAA, ICC, and UNCITRAL rulesprovide arbitrators with broad discretionary authorityto order any interim measures the arbitrators deem“necessary” or “appropriate.” For example, Article 21of the AAA-ICDR International Arbitration Rules,entitled “Interim Measures of Protection,” provides:“At the request of any party, the tribunal may takewhatever interim measures it deems necessary,including injunctive relief and measures for theprotection or conservation of property . . . Suchinterim measures may take the form of an interimaward, and the tribunal may require security for costsof such measures.”

The ICC Rules contain a similar grant of broaddiscretionary authority to the arbitral tribunal toaward any interim measures it deems “appropriate.”Under the heading “Conservatory and InterimMeasures,” Article 23(1) of the ICC Rules provides:

Unless the parties have otherwise agreed, assoon as the file has been transmitted to it, theArbitral Tribunal may, at the request of aparty, order any interim or conservatorymeasure it deems appropriate. The ArbitralTribunal may make the granting of any suchmeasure subject to appropriate security beingfurnished by the requesting party. Any suchmeasure shall take the form of an order, giving

the reason, or of an award, as the ArbitralTribunal considers appropriate.

Article 26 of the UNCITRAL rules contains asimilarly broad grant of authority to arbitrators toaward interim measures: “At the request of eitherparty, the arbitral tribunal may take any interimmeasures it deems necessary in respect of the subjectmatter of the dispute, including measures for theconservation of goods forming the subject matter ofthe dispute, such as ordering their deposit with athird person or the sale of perishable goods . . . Suchinterim measures may be established in the form ofan interim award. The tribunal shall be entitled torequire security for costs of such measures.”

Ambiguity: A Benefit or a Detriment?

While these rules authorize arbitral panels to award ororder interim measures, they do not specify the typeof interim relief that may be granted or the standardto be applied when granting such relief. The broadlanguage “whatever interim measures it deemsnecessary” in the AAA-ICDR rules, “any interim orconservatory measure it deems appropriate” in theICC rules, and “any interim measures it deemsnecessary” in the UNCITRAL rules leaves open thepossibility that an arbitral panel could award not onlytraditional interim measures such as injunctions andattachments, but also creative measures notanticipated by the parties when they entered intotheir agreement to arbitrate.

This ambiguity, of course, could be a benefit or a detriment to the client depending upon the natureof the underlying agreement or relationship. Theparties may want to provide the arbitrators with thebroadest possible discretion to fashion interimmeasures appropriate to the particular circumstancesthat exist when a dispute arises. If that is the case,then parties may want to agree upon the broad,discretionary grants of authority in theseinternational arbitration rules.

In other agreements or relationships, however, theparties may wish to limit the arbitrators to awardingstandard interim measures — such as an injunctionto preserve the status quo or an attachment to secure

Continued from page 1

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[T]he parties should

consider whether

it is in their best

interests to leave the

arbitrators with broad

discretion to award

interim measures.

Article 25.1 of the

LCIA rules provides

that the arbitral

tribunal may order

a party to provide

security for all or part

of a claim . . .

and preserve assets pending the arbitration. Underthose circumstances, the parties can and shouldspecify in their arbitration agreement the types of interim measures that may be awarded by the arbitrators.

Another issue left open by the various arbitrationrules is the standard to be applied by the arbitratorswhen granting interim relief. Unlike the typical rulesfor granting interim relief in court, the AAA-ICDR,ICC, and UNCITRAL rules do not define thestandard to be applied by the arbitral tribunal whenconsidering a request for interim measures. Partiesmay argue that the same standards should apply aswould apply in a court under the law governing theirunderlying agreement.

For example, parties may argue that arbitratorsshould award an interim injunction only upon ashowing of a likelihood of success on the merits,irreparable harm, and a balance of the equities infavor of granting relief. This standard, however, is notexpressly required by any of these rules.

Indeed, an equally plausible argument can be madethat the only criteria for interim relief pursuant tothese rules are whether the arbitrators deem aparticular interim measure to be “necessary,” underthe AAA-ICDR and UNCITRAL rules, or“appropriate,” under the ICC rules.

Once again, the parties should consider when theyare drafting their arbitration agreement whether it isin their best interests to leave the arbitrators withbroad discretion to award interim measures based onnothing more than a determination that such relief is “necessary” or “appropriate,” or whether the parties would be better served by agreeing upon aspecific standard for granting interim relief. If thelatter, then the parties should set forth the standard intheir agreement to arbitrate, for example, by agreeingthat the arbitrators will apply the law of a particularjurisdiction to any claim for interim measures.

More Specificity in the LCIA Rules

The LCIA Arbitration International rules provide amore detailed description of the arbitral tribunal’sauthority to order interim relief, including a more

specific description of the types of interim measuresthat may be awarded, but also leave open the samequestion of the standard to be applied. Article 25.1 ofthe LCIA rules provides that the arbitral tribunal mayorder a party to provide security for all or part of aclaim, to preserve, store, or dispose of property relatedto the subject matter of the dispute, and to order anyother remedy on a provisional basis that the tribunalwould have the power to order in a final award:

The Arbitral Tribunal shall have the power,unless otherwise agreed by the parties inwriting, on the application of any party:

(a) to order any respondent party to a claim orcounterclaim to provide security for all or part ofthe amount in dispute, by a way of deposit orbank guarantee or any other manner and uponsuch terms as the Arbitral Tribunal considersappropriate. Such terms may include theprovision by the claiming or counterclaimingparty of a cross-indemnity, itself secured in sucha manner as the Arbitral Tribunal considersappropriate, for any costs or losses incurred bysuch respondent in providing such security. Theamount of any losses payable under such cross-indemnity may be determined by the ArbitralTribunal in one or more awards;

(b) to order the preservation, storage, sale, or otherdisposal of any property or thing under thecontrol of any party and relating to the subjectmatter of the arbitration; and

(c) to order on a provisional basis, subject to finaldetermination in an award, any relief which theArbitral Tribunal would have power to grant inan award, including a provisional order for thepayment of money or the disposition of propertyas between any parties.

As with the other international arbitration rules, theLCIA rules also authorize the arbitrators “to order anyclaiming or counterclaiming party to provide securityfor the legal or other costs of any other party by wayof deposit or bank guarantee or in any other mannerand upon such terms as the Arbitral Tribunalconsiders appropriate.”

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The International Litigation Quarterly – Fall 2006Section of Litigation, American Bar Association


Page 5

The LCIA rules provide greater guidance on the typesof interim measures that may be awarded by anarbitral tribunal than is provided in the otherinternational arbitration rules, but the LCIA rulessuffer from the same ambiguity on the standard to beapplied when the tribunal considers applications for interim measures. Accordingly, if the parties choose the LCIA rules to govern their dispute,they should also consider whether they want to define in their agreement the standard the arbitraltribunal must apply when deciding an application forinterim measures.

Timing Is Everything

When choosing international arbitration rules,parties also should consider the practical issue oftiming. Under ordinary circumstances, it is notunusual for several weeks or even months to passbetween the time arbitration is commenced and thearbitral tribunal is formed and ready to meet toconsider an application for interim measures.

The AAA international arbitration rules provide inArticle 37 for the appointment of a single, emergencyarbitrator to decide applications for interim measuresbefore the arbitral tribunal is constituted. Thisprovision may be of little assistance, however, if oneparty asserts that the dispute is not within the scopeof the agreement to arbitrate. Under thosecircumstances, the arbitral tribunal must first decidewhether the dispute is properly before it before it canaward any relief, interim or otherwise. While thatissue is being decided, assets can be dissipated or thestatus quo can otherwise be altered beyond repair.

These practical considerations may force parties into a judicial forum to obtain interim measures. As described below, however, local courts are notalways eager or willing to intervene in a dispute that the parties have agreed would be resolvedthrough arbitration.

Going to Court for Interim Measures and the NewYork Convention

The principal international arbitration rules alsocontemplate that the parties may apply to a court forinterim measures, particularly during the period of

time when the arbitration has been commenced butthe arbitral panel is not yet in a position to considerinterim relief.

The ICC arbitration rules provide in Article 23(2)that “the parties may apply to any competent judicialauthority for interim or conservatory measures”before the file is transmitted to the arbitral tribunaland at other times if appropriate. The AAA-ICDRinternational arbitration rules provide in Article21(3) that “[a] request for interim measures addressedby a party to a judicial authority shall not be deemedincompatible with the agreement to arbitrate or awaiver of the right to arbitrate.”

U.S. courts, however, are divided over whether a court may order interim measures when the partieshave agreed to arbitrate a dispute and their agreementfalls within the terms of the United NationsConvention on the Recognition and Enforcement ofForeign Arbitral Awards, or the New YorkConvention.3 This international treaty is designed toensure that signatory nations will enforce provisionsfor arbitration in international commercialagreements and will recognize and enforce arbitralawards made in other signatory nations.4

Under the New York Convention, once a courtdetermines that the parties have entered into a validand enforceable agreement to arbitrate aninternational commercial dispute, the court “shall . . . refer the parties to arbitration.”5 Somecourts have interpreted this mandatory language asprohibiting it from taking any action other thancompelling the parties to arbitrate their dispute,including arbitration of any provisional remedies.6

These courts reason that when the parties include astandard arbitration clause in their contractsrequiring arbitration of “any dispute arising out of”their agreement, it would violate both the New YorkConvention and the parties’ agreement to allow oneparty to litigate the issue of interim measures in acourt.7 These courts conclude that “the very purposebehind the Convention is to bring about thesettlement of appropriate disputes solely througharbitration proceedings, and to allow a resort to[courts for interim measures] would seem to put an unnecessary and counterproductive pressure on a situation which could otherwise be

When choosing

international

arbitration rules,

parties also should

consider the practical

issue of timing.

[L]ocal courts are

not always eager or

willing to intervene in

a dispute that the

parties have agreed

would be resolved

through arbitration.

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The parties easily

can avoid any

confusion caused by

these decisions by

addressing the issue of

interim measures in

their agreement

to arbitrate.

[I]t is advisable to

include agreements

on forum selection,

choice of law,

personal jurisdiction,

and service of

process as well.

settled expeditiously and knowledgeably in an arbitration context.”8

Other courts disagree, holding that, while the NewYork Convention requires that a court direct theparties to arbitration for the underlying dispute,“[t]here is no indication in either the text or theapparent policies of the Convention that resort to[interim measures in a court] was to be precluded.”9

The parties easily can avoid any confusion caused bythese decisions by addressing the issue of interimmeasures in their agreement to arbitrate. Even in thosejurisdictions where courts have held that the New YorkConvention prevents courts from ordering interimmeasures in aid of an international arbitration, courtshave held that parties to an arbitration agreement maypreserve their right to seek interim relief from thecourts by expressly excluding the issue of interim relieffrom the scope of the disputes they have agreed toarbitrate or expressly agreeing that disputes overinterim relief will be heard by a court.10 These courtsreason that the New York Convention applies only todisputes that the parties have agreed to submit toarbitration. To the extent the parties have decided notto submit a dispute to arbitration, the New YorkConvention does not apply.

This interpretation of the New York Convention issupported by Article V of the New York Conventionitself, which provides that it does not apply to“matters beyond the scope of the submission toarbitration” or to matters “not contemplated by ornot falling within the terms of the submission toarbitration.” When the parties expressly choose tohave the interim relief portion of their disputeresolved in a court, even though the dispute will beresolved on the merits in arbitration, the New YorkConvention does not apply.11

Parties to an international arbitration agreement mayreserve their right to seek interim measures in a courtby stating that right in their agreement. In a recentcase, this was accomplished by stating in thearbitration agreement that either party could apply“to any court in the State of New York to seekinjunctive relief to maintain the status quo until the

arbitration award is rendered or the controversy isotherwise resolved.”12

It is important to consider, however, that suchlanguage merely preserves a party’s right to seekinterim relief in a court. In international arbitrationagreements, it is advisable to include agreements onforum selection, choice of law, personal jurisdiction,and service of process as well. Otherwise, a partyseeking interim relief in aid of an internationalarbitration could spend weeks or months arguingover procedural and jurisdictional issues, includingthe complicated issue of serving a person or entitythat may be outside the U.S., when a primarypurpose of reserving the right to seek interim relief ina court was to avoid delays in obtaining relief beforethe arbitral panel is constituted.

Conclusion: The Power to Choose

Parties to arbitration agreements have a number ofchoices to make when it comes to ensuring thatappropriate interim measures will be available in theevent of a dispute. They should look carefully at theprovisions authorizing interim measures whenchoosing the arbitration rules to govern any dispute.They also should consider whether they want theissue of interim measures decided by the arbitraltribunal or by a court. If they choose to have thearbitrators decide the issue of interim measures, theparties should consider describing in their arbitrationagreement the types of interim measures thearbitrator may award and the standard the arbitratorsmust use when deciding whether interim measuresshould be awarded. If the parties choose to haveinterim measures decided by a court, they shouldexpressly reserve the right to make an application to acourt in their arbitration agreement. And, regardlessof which forum or rules the parties choose, theyshould set forth in their agreement appropriateprovisions governing choice of forum, choice of law,consent to jurisdiction, and service of process toensure that the desire for interim measures to preservethe status quo is not frustrated by disputes overprocedure and jurisdiction.

Continued on page 26

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Page 7

The presence of a

non-admitted lawyer

in an arbitration may

lead to protracted

litigation . . .

The law of commercial

arbitration generally

seeks to honor the

parties’ agreement

as much as possible,

including giving great

flexibility to the parties

to craft their own

arbitral procedures.

6

Must a lawyer who appears as counsel in anarbitration proceeding be licensed to practice in thejurisdiction where the arbitration takes place? Thisissue has surged to life in the United States in the pastten years and presents a potential conflict betweentwo important public policy interests: a jurisdiction’sinterest in regulating the legal profession versus thenational and international interest — reflected innational arbitration law and internationalconventions — of encouraging private alternativedispute resolution.

The issue has high stakes. Parties have claimed that anon-admitted lawyer’s participation in an arbitrationconstitutes a basis for striking the pleadings filed bythe lawyer or even for vacating the resultingarbitration award. Non-admitted lawyers may also beunable to recover fees for work done in arbitrationsoutside their own jurisdictions. The unauthorizedpractice of law may lead to disciplinary measures or— in some jurisdictions — criminal prosecution. Ifnothing else, the presence of a non-admitted lawyerin an arbitration may lead to protracted litigation inlocal courts to determine what consequences, if any,should follow.

The current trend, both in the United States and inforeign jurisdictions, favors allowing non-admittedlawyers to appear as arbitration counsel on atemporary basis. But the law in this area is far fromuniform and offers many potential traps for anunwary arbitration lawyer.

The Arbitral Tradition of Freedom of Representation

The law of commercial arbitration generally seeks tohonor the parties’ agreement as much as possible,including giving great flexibility to the parties to crafttheir own arbitral procedures. This preference

generally includes a party’s right to be represented bycounsel of choice or, for that matter, by no counsel atall. Indeed, lawyers were the exception, not the rule,in business arbitrations in the United States in theearly 20th century. As one court put it in 1925, “[t]opermit participation by counsel as a matter of rightwould be fatal to the efficacy of arbitration.”2

As arbitration grew in popularity as a method forresolution of commercial disputes, parties invariablysaw the advantage of being represented by attorneysin arbitration just as they did in litigation. Mostmodern arbitration rules expressly provide thatparties may be represented by whomever they wish, either by legal counsel or by nonlawyers.3

The principle of freedom of representation came tobe viewed as part of the “common law” ofinternational commercial arbitration. While it wasformalized by statute in some countries,4 practitionerssimply took it for granted in the United States andmany other jurisdictions.

Before the late 1980s, parties to arbitrations rarelyquestioned their opponents’ right to be representedby a lawyer who was not admitted in the jurisdictionwhere the arbitration happened to be sited. Whensuch challenges were raised, they were usuallyunsuccessful. For instance, a U.S. court held in 1982that a New Jersey lawyer did not engage in theunauthorized practice of law by acting as counsel in aNew York arbitration, citing the fact that anarbitration is “not a court of record,” is of “aninformal nature,” and “has no provision for theadmission pro hac vice of local or out-of-stateattorneys.”5 And a court in Barbados concluded thatthe national regulation of the legal profession “didnot affect . . . the common law right of a party, ifpermitted by the arbitrator, to be represented bysomeone chosen by him.”6

Freedom of Representation And TheUnauthorized Practice of Law:

The Changing Landscape In Domestic AndInternational Arbitration

by Mark C. Fleming 1

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The ABA’s Model

Rule 5.5 generally

prohibited lawyers

from engaging in

the practice of law in

a jurisdiction where

doing so violated

that jurisdiction’s

regulation of the

legal profession . . .

Bombshells: Turner and Birbrower

Two judicial decisions from opposite sides of theworld made major ripples in what appeared to be thesettled calm of freedom of representation.

In a 1988 decision called Turner (East Asia) Pte Ltd v.Builders Federal (Hong Kong) Ltd.,7 the High Court ofSingapore ruled that foreign lawyers could notrepresent parties in arbitrations sited in Singapore.While the decision may have been partly motivatedby a desire to maximize the opportunities forSingapore’s local bar to participate in internationalarbitrations, it ironically had the opposite effect ofencouraging parties to site their arbitrations outsideSingapore in jurisdictions more friendly to freedomof representation.8

The Singapore Parliament recognized this weaknessand amended the law in 1992 to allow foreigncounsel to appear in arbitrations sited in Singapore,although it still required foreign lawyers to associateSingapore counsel for matters involving Singaporelaw.9 Even this restriction was eliminated in 2004,because it was found to be unnecessarily detrimentalto Singapore’s attractiveness as an arbitration venue.10

Today, most major arbitration jurisdictions outsidethe United States place no limits whatsoever onrepresentatives in international arbitrations, andmany others require representation by lawyers but donot require that the lawyers be admitted to the local bar.11

The situation in the United States is less uniform.The controversy erupted in 1998 with the notoriousdecision in Birbrower, Montalbano, Condon & Frank,P.C. v. Superior Court,12 in which the Supreme Courtof California ruled that a New York law firm violatedCalifornia’s ban on the unauthorized practice of lawbecause its lawyers performed legal work inCalifornia, including preparing for an arbitration,without being licensed in California. The court heldthat the firm’s client was not required to pay for thefirm’s “illegal local services.”13 Interestingly, theBirbrower court expressly stated that the case did notinvolve out-of-state arbitration counsel, because noneof the Birbrower firm’s work actually occurred inarbitration (the parties settled the case before anyarbitration was necessary). However, the court hinted

strongly (albeit in a footnote) that it would not beinclined to treat arbitration any differently absentlegislative direction.14 Thus, even though Birbroweritself did not involve an arbitration, it was roundlyviewed as articulating the position that, at least inCalifornia, freedom of representation in arbitrationwas limited by local bar regulations.

Because the practice of law in the United States isregulated by the several states, not by the federalgovernment, arbitration practitioners faced theuncertainty that other state courts or bar regulatorsmight follow the course charted by Birbrower. Therewas, however, no certainty in the matter. Most states’rules of professional conduct — many of whichtracked the Model Rules of Professional Conductpromulgated by the American Bar Association — didnot address the issue clearly. Although the ABA’sModel Rule 5.5 generally prohibited lawyers fromengaging in the practice of law in a jurisdiction wheredoing so violated that jurisdiction’s regulation of thelegal profession, it provided no guidance as towhether appearance in an arbitration wouldconstitute such a violation. Thus, as of 1998, therewas a significant risk that the law would not be settleduntil each state’s high court had decided its ownversion of Birbrower.

One Response — ABA Model Rule 5.5

In an effort to encourage uniformity andtransparency, the ABA formed a task force of expertsto study several issues raised by themultijurisdictional nature of modern U.S. lawpractice, including the prevalence of out-of-statecounsel in arbitrations. After receiving extensivetestimony and written submissions and conductingan exhaustive review of literature, the ABA Task Forcerecommended, and the ABA adopted, amendmentsto Model Rule 5.5.

The amended Model Rule 5.5 sets forth certainspecific circumstances in which a lawyer admittedand in good standing in one U.S. jurisdiction mayprovide legal services on a temporary basis in another.One of the permitted situations is where thetemporary services “are in or reasonably related to apending or potential arbitration, mediation, or other

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The ABA’s Model Rule

has made significant

progress in achieving

clarity in state

regulation of out-of-

state counsel appearing

in arbitrations.

A minority of states

has rejected the Model

Rule or adopted it with

major substantive

limitations.

alternative dispute resolution proceeding in this oranother jurisdiction, if the services arise out of or arereasonably related to the lawyer’s practice in ajurisdiction in which the lawyer is admitted topractice and are not services for which the forumrequires pro hac vice admission.”15

The ABA Model Rule represents an effort to craft amiddle ground between pure freedom ofrepresentation and strict adherence to local barrequirements. The proviso that the services “arise outof or [be] reasonably related to” the lawyer’s practicein the lawyer’s own jurisdiction places an outsidelimit on the extent of a lawyer’s out-of-statearbitration work and echoes a similar limitation inthe American Law Institute’s Restatement of the LawGoverning Lawyers.16 It is unclear how restrictivesuch a limitation actually is, since a lawyer with areputation as skilled arbitration counsel will doubtlessbe able to argue that every arbitration engagement“arise[s] out of” practice in the home jurisdiction.

The ABA’s Model Rule has made significant progressin achieving clarity in state regulation of out-of-statecounsel appearing in arbitrations. Sixteen states haveadopted the Rule’s arbitration provision essentiallyunchanged: Arkansas, Delaware, Georgia, Indiana,Iowa, Louisiana, Massachusetts (effective January 1,2007), Minnesota, Missouri, Nebraska, New Mexico,Ohio (effective February 1, 2007), Oregon,Pennsylvania, Utah, and Washington.

Some other states have adopted the Rule but imposedtheir own additional requirements. For instance,Arizona requires out-of-state attorneys to informtheir clients that they are not admitted to practice inArizona and to obtain “informed consent” to therepresentation.17 Both Florida and North Dakotarequire payment of a fee to the state bar, and SouthDakota requires payment of state sales tax.18 NorthDakota limits practice by a nonresident attorney tofive years,19 and Florida also limits an out-of-statelawyer to three Florida arbitrations per year.However, none of Florida’s restrictions applies tointernational arbitrations.20

A minority of states has rejected the Model Rule oradopted it with major substantive limitations.California, for instance, adopted a statute afterBirbrower that permitted out-of-state counsel to

appear in arbitrations, but required the association ofa California-admitted attorney as “attorney ofrecord.”21 Furthermore, the California statute isscheduled to sunset on January 1, 2007; unlessrenewed, California will presumably revert to therestrictive regime heralded by Birbrower.

Maryland also requires that out-of-state counselassociate local counsel for arbitrations.22 While theinvolvement of locally-admitted counsel may makeeminent sense where the litigation is governed bylocal law, parties may view it as an unnecessaryexpense and inconvenience if the substantive issuesare to be decided under the law of another state or aforeign country.

Other states are even more restrictive. For instance,where the Model Rule requires that the out-of-statearbitration relate only to the lawyer’s practice in ajurisdiction where the lawyer is admitted, Idaho,North Carolina, and South Carolina require that thearbitration relate to the lawyer’s representation of anexisting client in such a jurisdiction.23 New Jersey hasa similar requirement, although it may also besatisfied if the dispute itself originates in a state wherethe lawyer is admitted to practice.24

Until this year, Nevada appeared to exemplify one ofthe most restrictive approaches of all, with Nevadabar regulators taking the view that no unadmittedlawyer could appear as arbitration counsel.25 TheSupreme Court of Nevada appeared to relax thisposition with a new rule effective May 1, 2006,which permits occasional practice by an out-of-stateattorney in certain situations, including in a matterincident to work being performed in a jurisdiction in which the lawyer is admitted and in a matter in which the out-of-state attorney is associated with Nevada counsel who actively participates in the representation.26

This varied landscape is also affected by the fact thatmany states have different rules for internationalarbitrations. Such rules are generally more hospitableto the party’s choice of representative. Thus, somestates that place restrictions on the appearance of out-of-state counsel in arbitrations — most notablyCalifornia — expressly waive those restrictions in the case of international arbitrations.27 In Florida,

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[M]any U.S.

jurisdictions still

have no express

rule addressing

out-of-state

arbitration

counsel.

similarly, the annual limit of three arbitrations forout-of-state counsel does not apply to internationalarbitrations.28

Other Responses — Recent Judicial Decisions

While the ABA Model Rule offers welcome clarity for arbitrations sited in states that have adopted it,many U.S. jurisdictions still have no express ruleaddressing out-of-state arbitration counsel. In those states, an out-of-state lawyer appearing asarbitration counsel still faces a potential risk of aBirbrower-style challenge.

In 2003, an intermediate appellate court in Illinoisrejected an effort to vacate a Chicago arbitrationaward on the grounds that the victor was representedby a California attorney not licensed in Illinois. Eventhough Illinois has not adopted ABA Model Rule 5.5, the court viewed it as persuasive “in that itreflects the modern trend in the law ofmultijurisdictional practice.”29 The Illinois courtdeclined to follow Birbrower, finding that it created“too harsh a result.”30

The Supreme Judicial Court of Massachusettsrecently addressed a similar challenge in SuperadioLimited Partnership v. Winstar Radio Productions,LLC.31 Superadio, which lost an arbitration sited inMassachusetts, moved to vacate the award on twogrounds, arguing, among other things, that thevictorious party was represented by an attorney whowas not admitted to practice in Massachusetts.Superadio claimed that an award obtained throughrepresentation by an out-of-state lawyer was procuredby “undue means” and should therefore be vacatedunder Massachusetts’ state arbitration act. TheMassachusetts court also decided a companion case,Mscisz v. Kashner Davidson Securities Corp.,32 in whichplaintiffs in a securities arbitration sited in Bostonsought a declaratory judgment that the defendants’attorneys, who were admitted in New York but notMassachusetts, would engage in the unauthorizedpractice of law if they appeared in the arbitration andthat any resulting award would be procured by undue means.

The Massachusetts court resolved the cases byholding that, even assuming arguendo that an out-of-state lawyer engaged in the unauthorized practice of

law by appearing in a Massachusetts arbitration, sucha violation would not constitute “undue means”warranting vacatur of an arbitration award. Thecourt, therefore, did not decide whether appearanceby out-of-state counsel in a Massachusetts arbitrationconstituted the unauthorized practice of law. Thecourt’s brief discussion of the issue, however,suggested sympathy with the Model Rule approachand skepticism toward the position ascribed toBirbrower. The Massachusetts court cited the ABAModel Rule approvingly, noting that it was underconsideration by the court’s advisory Committee, andrightly observed that Birbrower was inappositebecause it did not involve arbitration.33 Shortly beforethis article went to press, the court issued notice thatit was adopting the ABA Model Rule verbatim,effective January 1, 2007.

Two other decisions are also worth mentioning. In2004, the Supreme Court of Ohio upheld adisciplinary action against a respondent who“regularly” represented claimants in securitiesarbitrations sited in Ohio, finding that therespondent’s actions constituted the unauthorizedpractice of law.34 However, it is not clear from theopinion whether the respondent was even a lawyer, orwhether his arbitration work in Ohio would havebeen permissible had it arisen out of or related to alawful practice in another state.

The Supreme Court of Arizona also held in 2000 thata disbarred attorney violated his disbarment order byappearing as arbitration counsel.35 The continuingrelevance of these decisions to the situation of out-of-state arbitration counsel appears to be limited,however, because Arizona and Ohio have sinceadopted versions of the ABA Model Rule addressingthe issue squarely.

Do Arbitration Representatives“Practice Law” at All?

An interesting wrinkle in the recent Massachusettsdecisions is that the court left open the possibilitythat representing a party at arbitration might notconstitute “the practice of law” at all, even thoughnone of the parties made that argument.36 The courtmay have found it prudent to suggest this possibilityin light of a Massachusetts statute, enacted in 1935,

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Exempting arbitration

proceedings from the

definition of the

“practice of law” may

well create practical

difficulties . . .

A separate issue arises

when parties wish to be

represented by counsel

licensed in another

country in a U.S.-sited

arbitration.

that provides that “[n]o individual, other than amember, in good standing, of the bar of thiscommonwealth shall practice law” unless authorizedto appear pro hac vice in court.37 Certainly, the easiestway to reconcile freedom of representation inarbitration with the plain text of such a statute wouldbe to hold that arbitration counsel does not “practicelaw.” But such an approach would be doctrinallyquestionable in light of established definitions of thepractice of law, which are generally broad enough toinclude the activities of arbitration counsel.38 Indeed,the ABA’s new Model Rule 5.5 is clearly drafted onthe assumption that arbitration counsel engages inthe “practice of law”; if it were otherwise, anexception for temporary practice by arbitrationcounsel would be unnecessary. Exempting arbitrationproceedings from the definition of the “practice oflaw” may well create practical difficulties in otheraspects of legal practice, such as professionalinsurance coverage and the applicability of legalethics requirements.

The obvious advantage of contending thatrepresentation in arbitration is not the “practice oflaw” is that it saves the traditional right of parties tobe represented by nonlawyers at arbitration. Theremay be other ways to reach this desirable resultwithout holding that lawyers do not practice lawwhen they appear in arbitrations. For instance, thereare some activities, such as negotiating commercialcontracts, that clearly constitute the “practice of law”when performed by a lawyer applying legal trainingand expertise, yet that are not off limits tononlawyers, provided that the nonlawyers do nothold themselves out as licensed attorneys and do notpurport to render legal advice. Whether a particularactivity constitutes the “practice of law” might bedetermined not solely by the nature of the activity,but also by other factors, such as the professionalqualifications and background of the personperforming the task and the expectations of theclient. One state high court appeared to draw thisdistinction when it noted that “some actions whichmay be taken with impunity by persons who havenever been admitted to the practice of law, will befound to be in contempt if undertaken by asuspended or disbarred attorney.”39

Representation by Lawyers Admitted Outside the United States

A separate issue arises when parties wish to berepresented by counsel licensed in another country ina U.S.-sited arbitration. Research has not disclosed ajudicial decision addressing this issue. The ABA hasrecommended a rule that would authorize thetemporary practice of law by foreign lawyers inarbitration proceedings in circumstances similar tothose set forth in ABA Model Rule 5.5, provided thelawyer is “a member in good standing of a recognizedlegal profession in a foreign jurisdiction, the membersof which are admitted to practice as lawyers orcounselors at law or the equivalent and subject toeffective regulation and discipline by a dulyconstituted professional body or a public authority.”Only four U.S. jurisdictions — Florida, Georgia,Pennsylvania, and the District of Columbia — haveadopted this rule or a similar policy specificallyallowing temporary practice by foreign lawyers.

Conclusion: Be Careful Out There

Lawyers preparing to represent a party in anarbitration sited in a jurisdiction in which they arenot admitted to practice must be careful not to runafoul of local bar requirements. While the practice inmany countries other than the United States appearsto favor freedom of representation in arbitrations, thepractice in U.S. jurisdictions is far from settled oruniform. Where the jurisdiction has adopted ModelRule 5.5 or a similar rule, compliance should bestraightforward. Where no clear rule is in place,counsel would be well advised to associate a locally-admitted attorney for the arbitration. Counsel mightalso consider seeking express permission from thearbitrator to appear in the proceeding, as reviewingcourts will occasionally treat such determinations asdiscretionary where there is no applicable statute orrule. Ultimately, however, the landscape in theUnited States is subject to change until all states haveeither a rule or a high court decision squarelyaddressing the issue, and caution remains the bestapproach for counsel not licensed in the jurisdictionwhere the arbitration is sited.

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4See, e.g. Gary B. Born, Int’l Comm. Arb.: Commentary & Materials514 & n.150 (2d ed. 2001) (citing Australian Int’l Arb. Amend. Act(1989) § 29).

5Williamson v. John D. Quinn Constr. Corp., 537 F. Supp. 613, 616(S.D.N.Y. 1982).

6Lawler, Matusky & Skeller v. Att’y Gen’l, Civ. Case No. 320 of 1981(High Ct. Barb. Aug. 22, 1983), excerpted in Born, supra note 4, at515-16.

7[1988] Sing. L. Rep. 1037, reprinted in 5 J. Int’l Arb. No. 3, at 139 (1988).

8See, e.g., David W. Rivkin, Restrictions on Foreign Counsel inInternational Arbitrations, XVI Y.B. Comm’l Arb. 402, 404 (1991);Julian D.M. Lew et al., Comp. Int’l Comm. Arb. 543 (2003);Michael J. Moser ed., Arb. in Asia IX-58 (2001) (commentingreservedly that Turner “resulted in some unhappiness”).

9See, e.g., Lew, supra note 8.

10Second Reading Speech on Legal Profession (Amend.) Bill 2004 byS. Jayakumar, Minister for Law (June 15, 2004), available athttp://notesapp.internet.gov.sg/__48256DF20015A167.nsf/AllDocsByDocID/A477F86271B84CA448256EB6000FF1A2.

11 See Michael Polkinghorne, More Changes in Singapore: AppearanceRights of Foreign Counsel, 22 J. Int’l Arb. No. 1, at 75-79 (2005);Rivkin, supra note 8, at 412.

12949 P.2d 1 (Cal. 1998).

13Id. at 13.

14See id. at 9 n.4.

15ABA Mod. R. for Prof. Conduct 5.5(c)(3).

16Restatement (Third) of Law Governing Lawyers § 3 (2000).

17Ariz. R. Prof. Cond. 5.5(e).

18R. Reg. Fla. B 1-3.11(d); N.D. Admiss. to Prac. R. 3.B.1; S.D. R.Prof. Cond. 5.5(c)(5).

19N.D. Admiss. to Prac. R. 3.B.4.

20R. Reg. Fla. B 1-3.11(d); id. Rule 4-5.5(c) comment.

21Cal. Civ. Proc. Code § 1282.4(c)(10).

22R. Governing Admiss. to the B. of Md. 14.

23Idaho R. Prof. Cond. 5.5; N.C. R. Prof. Cond. 5.5; S.C. R. Prof. Cond. 5.5.

24N.J. R. Prof. Cond. 5.5.

25David A. Clark, Unauthorized Practice of Law, Nev. St. Bar EthicalArticle, available at http://www.nvbar.org/Ethics/Ethics_articles.htm#Unauthorized%20Practice (Sept. 20, 2001).

26Nev. R. Prof. Cond. 5.5(b)(4), (5).

27See Cal. Code Civ. Proc. § 1297.351 (stating that the representativeof a party to an international arbitration sited in California “need notbe a member of the legal profession or licensed to practice law inCalifornia”); Conn. Gen. Stat. § 51-88(d)(3) (similar).

28R. Reg. Fla. B. 4-5.5 comment.

29Colmar, Ltd. v. Fremantlemedia North Am., Inc., 801 N.E.2d 1017,1026 (Ill. App. Ct. 2003).

30Id.

31844 N.E.2d 246 (Mass. 2006).

32844 N.E.2d 614 (Mass. 2006).

33Superadio, 844 N.E.2d at 251 n.4.

34Disciplinary Counsel v. Alexicole, Inc., 822 N.E.2d 348, 349 (Ohio 2004).

35In re Creasy, 12 P.3d 214 (Ariz. 2000).

36The Court phrased the issue as whether “representation of a party byan out-of-State licensed attorney at a Massachusetts arbitrationproceeding constitutes the practice of law.” Id. at 250 (emphasisadded); see also Mscisz, 844 N.E.2d at 616.

37Mass. Gen. L. c. 221, § 46A.

38E.g., In re Shoe Mfrs. Protective Ass’n, 295 Mass. 369, 372 (1936)(defining the practice of law as “the practice of directing andmanaging the enforcement of legal claims and the establishment of thelegal rights of others”).

39State v. Schumacher, 519 P.2d 1116, 1125 (Kan. 1974).

1Mark C. Fleming is a junior partner at Wilmer Cutler Pickering Haleand Dorr LLP in Boston. His practice focuses on appellate litigation,international litigation, and international arbitration. He co-wrote theBoston Bar Association’s brief as amicus curiae in the recent casesmentioned in the text addressing the effect of Massachusetts’unauthorized practice of law rules in arbitration.

2Larry E. Edmonson, Domke on Commercial Arbitration § 2:4, at 2-9to 2-10 (3d ed. 2005) (quoting Matter of Kayser, reported in N.Y.L.J.(Jan. 14, 1925) (Wagner, J.), aff 'd, 208 N.Y.S. 885 (App. Div. 1925)).

3See, e.g., AAA, Comm. Arb. R., R-24 (Sept. 15, 2005) (“Any partymay be represented by counsel or other authorized representative.”);JAMS Comprehensive Arb. R. & Proc. & Pro., R. 12 (Feb. 19, 2005)(“The Parties may be represented by counsel or any other person ofthe Party’s choice.”); Securities Industry Conference on Arb., Arb.’sManual 9 (May 2005) (“Parties need not be represented by anattorney in arbitration. They may choose to appear pro se (on theirown) or be represented by a person who is not an attorney, such as abusiness associate, friend, or relative.”); Rules of the LCIA, art. 18.1(Jan. 1, 1998) (“Any party may be represented by legal practitioners orany other representatives.”); Rules of Arb. of ICC, art. 21.4 (Jan. 1,1998) (“The parties may appear in person or through duly authorizedrepresentatives.”). The arbitration rules of the UNCITRAL, which arefrequently adopted in ad hoc international arbitrations, also providethat “[t]he parties may be represented or assisted by persons of theirchoice.” UNCITRAL Arb. R., art. 4, adopted by G.A. Res. 31/98,U.N. GAOR, 31st Sess., U.N. Doc. A/RES/31/98 (1976).

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In June, the Second

Circuit Court of

Appeals decided an

issue of first impression:

whether pre-arbitration

contacts can be used to

establish personal

jurisdiction in post-

arbitration litigation.

Both the FAA and the

New York Convention

provide limited bases

for refusing to enforce

an award.

In June, the Second Circuit Court of Appeals decidedan issue of first impression: whether pre-arbitrationcontacts can be used to establish personal jurisdictionin post-arbitration litigation. In Solé Resort, S.A. deC.V. v. Allure Resorts Management, LLC,2 the SecondCircuit held that the parties’ pre-arbitration contactswith New York that led to the formation of thecontract at issue in an arbitration were relevant todeciding whether New York had long-arm jurisdictionover the parties in post-arbitration litigation, eventhough the arbitration had taken place in Miami,Florida. Surprisingly, prior to the Second Circuit’sdecision, no court in the country squarely hadaddressed, let alone decided, this important issue. Aslitigation relating to international arbitration expandsin the United States, the Solé decision likely willbecome the benchmark for future litigation on thissignificant issue.

The Enforcement Conundrum

Post-arbitration litigation in many arbitrations isgoverned by the Federal Arbitration Act (FAA), 9U.S.C. § 1, et seq. Specifically, sections 9 and 10 ofTitle 9, which govern confirmation and vacatur of anarbitral award, respectively, provide that an“application may be made to the United States districtcourt in and for the district within which the awardwas made.” The FAA itself applies to arbitral awardsrendered in the United States in cases involving solelydomestic parties (where interstate commerce orcommerce with foreign nations is involved). TheConvention on the Recognition and Enforcement ofForeign Arbitral Awards (commonly known as the“New York Convention”), codified at 9 U.S.C. §§201-208, applies to arbitral awards rendered (1)abroad; (2) in the United States where the arbitrationwas between two foreign parties; or (3) where thedispute has some other nexus to foreign states.3 Thedomestic FAA (chapter 1 of the FAA) is applicable toactions brought under the New York Convention

(chapter 2 of the FAA) to the extent they are not inconflict. 9 U.S.C. § 208. The FAA thus fills in theinterstices in the New York Convention.

9 U.S.C. § 202, one of the provisions implementingthe New York Convention, provides that “anagreement or award arising out of such a relationshipwhich is entirely between citizens of the United Statesshall be deemed not to fall under the New YorkConvention unless that relationship involves propertylocated abroad, envisages performance orenforcement abroad, or has some other reasonablerelation with one or more foreign states.” TheSeventh Circuit has interpreted § 202 to mean that“any commercial arbitral agreement, unless it isbetween two United States citizens, involves propertylocated in the United States, and has no reasonablerelationship with one or more foreign states, fallsunder the [New York] Convention.”4 The SecondCircuit has held similarly.5

Both the FAA and the New York Convention providelimited bases for refusing to enforce an award.Although not without some controversy, some courts,including the Second Circuit, have applied the“manifest disregard of law” standard that many courtshave found to be implied in the FAA to New YorkConvention awards.6

While both the FAA and the New York Conventionset forth procedures for post-arbitration litigation,they do not provide the court with personaljurisdiction over the parties or subject matterjurisdiction over the action. Instead, there must be anindependent basis for the court to exercise such jurisdiction.7

In the ordinary case, personal jurisdiction is not anissue because the post-arbitration litigation mostfrequently takes place where the arbitration occurred— and where the parties have consented tojurisdiction — or it occurs in a forum in which theparties are subject to general personal jurisdiction.

Using Pre-Arbitration Forum Contacts inDetermining Long-Arm Jurisdiction

in Post-Arbitration Proceeding

by Kenneth I. Schacter, Susan Kim, and Brian R. Hole 1

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[W]hat is the scope

of the relevant

contacts for

determining long-

arm jurisdiction in

post-arbitration

litigation?

challenge the arbitrators’ finding against it on thistort claim.

Allure moved to dismiss the petition on the groundthat the New York court did not have personaljurisdiction over it, arguing that the claim made in thepetition itself, which sought to vacate the award, didnot arise out of its New York contacts. That is, Allurecontended that, because Solé’s petition challengedonly the actions of the arbitrators, Allure’s pre-arbitration contacts with New York were immaterial,and the only relevant fact for long-arm jurisdictionpurposes was the place where the arbitration occurred.Because the arbitration occurred in Florida, Allureasserted, it was not subject to long-arm jurisdiction inNew York. Allure also argued that the fraudulentinducement counterclaim could not form the basis forpersonal jurisdiction because the arbitration panel hadruled against Solé on this claim, and thus, accordingto Allure, determined that no fraud occurred.

The District Court for the Southern District of NewYork (Hon. Jed S. Rakoff ) agreed with Allure andgranted its motion to dismiss.10 The district courtfound that, since Solé was complaining only of theactions of the arbitrators, the claims in the petition didnot “arise out of” Allure’s pre-arbitration transaction ofbusiness in New York within the meaning of NewYork’s long-arm statute. The district court reasonedthat “the claim that Solé now seeks to lodge with thiscourt relates to the allegedly unlawful actions of thearbitrators themselves — and none of Solé’s allegedNew York contacts has anything to do with theallegedly arbitrary and capricious determinations andallegedly manifest disregard of the law, which occurredentirely in Florida.”11 The only case that the districtcourt cited in so holding was Crow Construction Co. v.Jeffrey M. Brown Assocs., Inc.,12 a venue case that did notconcern personal jurisdiction. Because the parties hadarbitrated their dispute in Florida, the district courtconcluded that it did not have personal jurisdictionover Allure in New York.

The district court also held that Solé’s fraudulentinducement counterclaim in the arbitration, whichconcerned activities in New York, could not form thebasis for personal jurisdiction in the post-arbitralproceeding because, according to the court, “thearbitration panel already determined that Allure wasnot guilty of” fraudulently inducing the contract.13

The jurisdictional conundrum arises, however, when,as in Solé, one party wishes to litigate the award’svalidity in a forum other than that in which thearbitration occurred and contends that the court hasjurisdiction over the opposing party under the forumstate’s long-arm statute. In that case, the followingquestion presents itself: what is the scope of therelevant contacts for determining long-armjurisdiction in post-arbitration litigation?

That is the precise question answered by the SecondCircuit in Solé.

The Solé District Court Decision

The Solé case involved two foreign entities, AllureResorts Management, LLC, a Turks & Caicoscompany, and Solé Resort, S.A. de C.V., a Mexicancompany. Solé and Allure had entered into a hotelmanagement agreement pursuant to which Alluremanaged Solé’s resort in the Riviera Maya area ofMexico. After approximately one year of poor results,Solé terminated the agreement. As required by thecontract, Allure commenced an arbitrationproceeding in Miami alleging that the contract hadbeen wrongfully terminated. Allure sought in excessof $9 million in the arbitration, and Solécounterclaimed for fraud.

A majority of a three-arbitrator panel found in favorof Allure and awarded it approximately $2 million indamages for alleged lost profits. The third arbitratordissented from the damages award. Because bothentities were foreign, and the dispute involved a hotelproperty located in Mexico, the arbitration wassubject to the New York Convention.

Solé petitioned the district court in New York tovacate the damages award on the ground that thearbitrators had manifestly disregarded applicable lawby engaging in speculation in awarding Allure futurelost profits.8 In its petition, Solé asserted that the NewYork court had personal jurisdiction over Allureunder New York’s long-arm statute, CPLR § 302,because the underlying hotel management agreementbetween the parties had been solicited, negotiated,performed, and terminated in New York.9 Solé alsoargued that its fraudulent inducement counterclaimprovided a jurisdictional basis because the allegedfraud occurred in New York, although it did not

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The court concluded,

pre-arbitration

contacts with a forum

state are relevant to

determining long-

arm jurisdiction in

post-arbitration

litigation.

The Second Circuit Reverses

On appeal, the Second Circuit disagreed with thedistrict court’s reasoning and vacated its orderdismissing the case for lack of personal jurisdiction. It concluded that Allure’s pre-arbitration contactswith New York were pertinent to the personaljurisdiction analysis in post-arbitration litigation. Thecourt reasoned:

We think that New York contacts underlyinga contract that provides for arbitration havethe requisite relationship under [CPLR]section 302(a)(1) to a claim challenging theresults of that arbitration. Arbitration isentirely a creature of contract . . . Anyarbitration proceeding is thus an extension ofthe parties’ contract with one another, amechanism through which they attempt toensure compliance with the terms of thatcontract. Without the contract, thearbitration, and its resultant judgment, asubsequent challenge to that judgment nevercould exist. There is therefore a substantialrelationship between a challenge to thearbitrators’ decision and the contract thatprovided for the arbitration.14

Based on this reasoning, the circuit court held that“any transaction of business in New York inconnection with a contract as to which there is anarbitration provision bears an ‘articulable nexus’ to achallenge to the arbitrators’ disposition of a disputepursuant to that arbitration provision.”15 Thus, thecourt concluded, pre-arbitration contacts with aforum state are relevant to determining long-armjurisdiction in post-arbitration litigation.

The Second Circuit observed that “[w]hile thequestion has not been directly addressed in thecontext presented by this appeal, there is case lawsupporting our position.”16 The court referencedseveral cases in which courts in fact examined theparties’ pre-arbitration forum contacts (withoutexplaining why this was appropriate), and then heldthat such contacts were insufficient to supportpersonal jurisdiction. “By implication, these casesassume that such contacts are germane to thequestion of post-arbitration personal jurisdictionunder New York’s long-arm statute.”17 The Second

Circuit rejected the district court’s reliance on CrowConstruction, observing that that case involved “amotion to transfer, which requires consideration ofthe convenience of the parties and the location ofwitnesses . . . In such an inquiry, the location of anarbitration itself might be a determining factor.”18

In sum, the court held, “while New York's long-armstatute does not extend to the full reach permitted bythe United States Constitution, it is not constrainedby convenience. Instead, it simply asks whether theparties’ activities in New York and the asserted claimare substantially related. And while the arbitrators’actions themselves took place outside New York,those actions necessarily bear a substantialrelationship to the events underlying the contractthat created the arbitration.”19

The court also disagreed with the district court’sconclusion that the arbitrators’ finding against Soléon its fraudulent inducement claim meant that NewYork contacts related to that claim were not relevantfor jurisdiction purposes. It held that, by “confiningits decision to the facts as determined by thearbitrators,” the district court had erred:

Like Allure’s breach of contract claim, Solé’sfraudulent inducement claim arose out ofevents surrounding the formation andperformance of the contract with Allure andformed a part of the arbitration proceedings.And while Solé does not challenge thearbitrators’ determination of the merits ofeither of these claims in its petition, all of thefacts underlying that contract are substantiallyrelated to Solé’s claim that the arbitrators’judgment is infirm. Thus, just as the districtcourt should have looked to all of Allure’scontacts with New York underlying themanagement agreement with Solé whenconsidering jurisdiction under section302(a)(1), it should have looked beyond thearbitrators’ decision to that same set of factswhen considering jurisdiction under section302(a)(3).20

The Second Circuit vacated the district court’sdecision and remanded the case for furtherconsideration of Allure’s motion to dismiss for lack ofjurisdiction, including Allure’s pre-arbitrationcontacts with New York.21

162159.qxp 12/14/2 6 11:39 AM Page 15


[T]he Solé Resort

case represents the

first time that a

federal court has

explicitly addressed

the significance of

pre-arbitration

contacts with the

forum state . . .302(a)(3), a New York court may exercise jurisdiction over a non-resident if that person “commits a tortious act without the statecausing injury to person or property within the state” and that partyeither “(1) regularly does or solicits business or derives substantialrevenue from goods or services in the state, or (2) expects or shouldreasonably expect the act to have consequences in the state andderives revenue from interstate or international commerce.”

10Solé Resort, S.A. de C.V. v. Allure Resorts Management, LLC, 397 F.Supp. 2d 426 (S.D.N.Y. 2005), vacated, 450 F.3d 100 (2d Cir. 2006).

11Id. at 429.

122001 U.S. Dist. LEXIS 13392 (S.D.N.Y. 2001).

13Id. at 429-30.

14450 F.3d at 104.

15Id. citing McGowan v. Smith, 52 N.Y.2d 268, 272, 419 N.E.2d 321,437 N.Y.S.2d 643 (1981).

16Id.

17Id. The Court cited several federal cases: BHP Trading (UK) Ltd. v.Deep Sea Int'l Shipping Co., 1991 WL 198747, at *4 (S.D.N.Y. Sept.23, 1991) (“Plaintiff ’s claim . . . arises not from a breach of the[contract related to New York], but from a breach of [an agreement],which, it is conceded, had no connection with New York”); AndrosCompania Maritima S.A. v. Intertanker Ltd., 714 F. Supp. 669, 675-76 (S.D.N.Y. 1989) (noting that “the only ‘business’ which couldhave been transacted, and out of which this claim to enforce anarbitration award could have arisen, was the underlying . . .contract”); In re Transatlantic Bulk Shipping Ltd., 622 F. Supp. 25, 26(S.D.N.Y. 1985) (“The charter party was not negotiated or made inNew York nor does it consent to New York jurisdiction or adopt NewYork law”). It also cited one New York state case: Salamon v.Friedman, 11 A.D.3d 700, 783 N.Y.S.2d 651 (1st Dep’t 2004) (“[Thestate court] had long-arm jurisdiction over the appellant [undersection 302(a)(1)] through his ownership and use of real property inthe State of New York, which was the subject of the petition toconfirm the arbitration award.”).

18Id. at 105.

19Id. (citation omitted).

20Id. at 106.

21Id.

1Mr. Schacter is a partner in the New York office of BinghamMcCutchen LLP. Ms. Kim is counsel and Mr. Hole is an associate inthe Hartford office of the firm. Bingham McCutchen represented SoléResort in the arbitration and in the post-arbitration proceedingsdescribed in this article.

2450 F.3d 100 (2d Cir. 2006).

3The New York Convention provides that it will “apply to therecognition and enforcement of arbitral awards made in the territoryof a State other than the State where the recognition and enforcementof such awards are sought, and arising out of differences betweenpersons, whether physical or legal. It shall also apply to arbitral awardsnot considered as domestic awards in the State where theirrecognition and enforcement are sought.” Convention art. I(1)(emphasis added).

4Jain v. de Mere, 51 F.3d 686, 689 (7th Cir. 1995).

5Yusuf Ahmed Alghanim & Sons, W.L.L. v. Toys “R” Us, Inc., 126 F.3d15, 19 (2d Cir. 1997).

6In Toys “R” Us, the Second Circuit held that the implied “manifestdisregard” standard applied to New York Convention cases, where theaward was made in the United States. Other courts, however, havedisagreed. E.g., Industrial Risk v. M.A.N. Gutehoffnungshutte, 141 F.3d1434 (11th Cir. 1998); Nicor Int'l Corp. v. El Paso Corp., 318 F. Supp.2d 1160 (S. D. Fla. 2004).

7E.g., Ford v. Hamilton Investments, Inc., 29 F.3d 255 (6th Cir. 1994);Garrett v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 7 F.3d 882 (9th Cir. 1993).

8Several weeks after Allure filed a petition to vacate, Allure filed apetition to confirm the award in the United States District Court forthe Southern District of Florida. On Solé’s motion, the Florida courtstayed the proceeding based on the “first-filed” doctrine pending theoutcome of Solé’s New York petition. Following the Second Circuit’sdecision, Allure consented to personal jurisdiction in New York andto the transfer of its Florida action to the New York federal court,where the parties’ respective petitions to vacate and to confirm arebeing litigated at the time this article is written.

9Under the New York long-arm statute, CPLR § 302(a)(1), a courtmay exercise personal jurisdiction over any non-resident defendant ifthe defendant “transacts any business” in New York and the claimarises from that transaction of business. Sunward Elecs., Inc. v,McDonald, 362 F.3d 17, 22 (2d Cir. 2004). Under CPLR §

Conclusion

The Second Circuit’s decision in the Solé Resort caserepresents the first time that a federal court hasexplicitly addressed the significance of pre-arbitrationcontacts with the forum state in determining

long-arm jurisdiction in a post-arbitrationproceeding. Its holding that such contacts must beconsidered in weighing long-arm jurisdiction providesa potentially wider choice of forums to thosechallenging, or seeking to confirm, arbitral awards.

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Page 17

[P]arties often find

themselves in court

even before they begin

to arbitrate, arguing

whether arbitration

is truly required in

their case.

Attorneys must carefully

investigate all potential

sources of an agreement

to arbitrate before

deciding whether to

challenge arbitrability.

Although the use of arbitration has increased in manyareas of the law, its growth is particularly notable inthe context of international disputes. Indeed, all ofthe primary benefits of arbitration in general, i.e.,avoidance of the uncertainties, delays, and expense ofthe judicial system, are heightened with respect tointernational arbitration.

In the words of William K. Slate II, President andCEO of the American Arbitration Association(AAA), “[p]arties to complex disputes arising frominternational commercial transactions — who seek toavoid the delays, cost and capriciousness of litigationin foreign courts — are increasingly turning tointernational arbitration for the following benefits:neutrality, process control, enforceability, cost-effectiveness and confidentiality.”2 Thus, asglobalization increases the number of cross-borderbusiness and personal disputes, it is important foryoung lawyers to understand at least the basics of the international arbitration process.3 This articleseeks to offer some fundamental tips to help younglawyers as they encounter issues involvinginternational arbitration.

Examine the Parties’ Arbitration Agreement

Since arbitration is a “matter of contract,” it is well-established that “a party cannot be required to submitto arbitration any dispute which he has not agreed soto submit.”4 Thus, attorneys must first carefullyexamine whether their clients have agreed to arbitratein the first place, and, if they have, exactly whichdisputes are covered by their agreement.

Although arbitration is intended to avoid the costsand hassles of litigation, parties often find themselvesin court even before they begin to arbitrate, arguingwhether arbitration is truly required in their case.Indeed, unless the parties “clearly and unmistakablyprovide otherwise . . . [t]he question of arbitrability . . .is an issue for the courts, not the arbitrator.”5

However, it is important to realize that the U.S.Supreme Court has expressed a particular desire toconstrue arbitration agreements expansively in theinternational context. Thus, out of concern for“international comity, respect for the capacities offoreign and transnational tribunals, and sensitivity tothe need of the international commercial system forpredictability in the resolution of disputes,”6 theSupreme Court has stated that agreements that aresilent or ambiguous as to arbitration should beinterpreted in favor of arbitrability.7

Additionally, even when a client has not signed aseparate arbitration agreement, he can still be boundby an arbitration clause contained in, or incorporatedby reference into, another contract between theparties.8 In some cases, clients also can be bound byagreements to arbitrate entered into by their parent orsubsidiary, or wherever “the ordinary principles ofcontract and agency so dictate.”9 Thus, attorneysmust carefully investigate all potential sources of anagreement to arbitrate before deciding whether tochallenge arbitrability.

Determine the Appropriate Arbitral Institutionand Procedural Rules

Once the decision to arbitrate has been made eitherwillingly, or ordered by the court, it is important todetermine which arbitral institution and set ofprocedural rules will govern the proceedings. In thisrespect, attorneys must differentiate between ad hocand institutional arbitrations.

In an ad hoc arbitration, the parties write their ownprocedural rules to govern the proceedings.Normally, parties to an ad hoc arbitration agreementrely on the United Nations Commission onInternational Trade Law (UNCITRAL) Rules indrafting their agreement.10

Because it is difficult to foresee all of the issues thatmay arise under a given international agreement, and

International Arbitration — A Primer for the Young Lawyer

by Michael A. Roche 1

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[A]pproximately

77 percent of parties’

contracts pre-specify

the substantive law

to be applied by the

arbitrators . . .

because dealing with all of these matters in advancewould make contracts “lengthy and unwieldy,”parties often choose institutional arbitration.11

Institutional arbitrations make use of anadministrating body that oversees the arbitrationprocess from the filing of a claim through theissuance of an award by the tribunal. Most majorinstitutions promulgate their own specific proceduralrules. Some institutions do not require use of theirown rules, and in these cases the parties are free tochoose any set of rules they wish to control theirproceedings. However, this could lead to problems asit could result in an institution interpretingunfamiliar rules.

Even when given the option not to do so, mostparties prefer to arbitrate under the procedural rulesof the arbitral institution they have selected.Moreover, as with most aspects of internationalarbitration, when the parties have chosen an arbitralinstitution but have not specifically selected a set ofprocedural rules, the arbitration will be conductedunder the procedural rules of the institution itself. Assuch, parties and their attorneys must carefullyconsider these issues when entering into anarbitration agreement.

While the International Chamber of Commerce(ICC) administers the bulk of internationalarbitrations under either its own rules or theUNCITRAL Rules, other regional and internationalinstitutions also play an important role. These bodiesinclude the International Centre for DisputeResolution (ICDR) of the American ArbitrationAssociation (AAA), the London Court ofInternational Arbitration (LCIA), the ChinaInternational Economic and Trade Commission(CIETAC), and the Commercial Mediation &Arbitration Center for the Americas (CAMCA).

Don’t Forget About Choice of Law

Another important consideration for parties enteringinto an international arbitration agreement is choiceof law. Although approximately 77 percent of parties’contracts pre-specify the substantive law to be appliedby the arbitrators, choice of law remains a neglectedaspect of international arbitration agreements.12 Inthose cases in which the parties have failed to make achoice of law determination, the arbitrators are

usually afforded wide latitude to select theappropriate substantive law. Although the proceduralrules chosen by the parties may influence thearbitrators’ choice-of-law determination, arbitratorshistorically have made this decision by: applying thesubstantive law of the place of the arbitration;applying the choice-of-law rules of the place of thearbitration; applying the choice-of-law rules of thevarious locations connected to the dispute to see ifone single substantive law predominates; applying thechoice-of-law rules of another jurisdiction, such as thelocation where the award will likely be enforced or thejurisdiction which would have heard the dispute butfor the arbitration clause; or applying generalprinciples of private international law.13

Given that the parties’ failure to make a preliminarychoice-of-law determination divests them of controlover such an important aspect of the arbitrationprocess, it is crucial for attorneys to advise theirclients to contemplate this issue in advance.

Selecting a Proper Forum

While some parties seek to avoid controversy by usingonly general language in their arbitration agreements,they are not doing themselves any favors by failing todeal with significant issues upfront.14 Indeed,“anything not stipulated to in the arbitration clause . . . will be decided upon by the institutionaccording to its rules.”15

In choosing a forum for the arbitration of anypotential disputes, parties should consider factors of both convenience and practicality. From aconvenience standpoint, parties should select a forumwhich is geographically convenient to the parties and the likely witnesses to a potential dispute. Theparties should also consider “[o]ther aspects, such astravel expenses, office and communication facilitiesand the availability of a pool of qualified arbitrators”when making this decision.16 Additionally, clientsshould be informed that, once they have agreed toarbitrate in a particular forum, federal courts in theUnited States will later enforce that decision absentextenuating circumstances.17

In terms of practicality, parties should increase thelikelihood that their arbitral awards will be enforcedby choosing to arbitrate only in countries that have

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Page 19

[E]xamine how

the desired forum

characterizes

important issues . . .

[A]void forums which

reduce the efficacy of

the parties’ prior choice-

of-law determinations

by imposing excessive

mandatory laws on

the arbitrators.

f

y

g

y

a

ratified either the New York or Panama Conventions(discussed below). Similarly, given that the partieslikely have chosen arbitration to increase their ownautonomy, they should avoid forums “whose courtshave wide latitude for judicial intervention.”18 In thisrespect, parties should examine how the desiredforum characterizes important issues as eithersubstance or procedure. While the parties’ choice-of-law determination usually will cover substance, theprocedure of the forum is applied unless the partieshave otherwise stipulated in their arbitrationagreement. As such, parties wishing to arbitrate in aforum that classifies an important issue as proceduralshould specify in their arbitration agreement exactlyhow this issue is to be decided by the arbitrators.Additionally, parties should avoid forums whichreduce the efficacy of their prior choice-of-lawdeterminations by imposing excessive mandatorylaws on the arbitrators.19

Selecting the Arbitrators

Attorneys must also take into account howarbitrators will be chosen. Although most arbitratorsrespect the choice-of-law and other determinationsmade by the parties in the arbitration agreement,“the arbitrator’s ‘omnipotence’ [nonetheless] allowsthe third-party neutral to apply mandatory law that was meant to be circumvented by contractingfor arbitration.”20 Thus, it is important for attorneysto remind their clients that “[o]nce a decision to refer a dispute to arbitration has been made, nothing is more important than choosing the rightarbitral tribunal.”21

Parties normally specify both the number ofarbitrators and the manner in which they will bechosen in their arbitration agreement. Parties caneither provide for the use of a sole arbitrator, or anarbitration panel comprised of three or moreindividuals. When three arbitrators are chosen,parties are normally allowed to interview theirprospective arbitrator in order to determine whetherthey find them acceptable.

In ad hoc arbitrations, the parties often designate anappointing authority to select one or more arbitratorsin the event of a dispute requiring arbitration. Partiesto ad hoc agreements also frequently use a listprocedure, either in conjunction with, or in the

absence of, an appointing authority. Under the listprocedure, the parties rank various arbitrators inorder of preference in an attempt to convene anacceptable arbitration panel. Additionally, when theparties have chosen to use an arbitration panel, eachside may be given the opportunity to directly appointan equal number of arbitrators. In the case of an odd-numbered panel, each side appoints an equal numberof arbitrators, with the party-appointed arbitratorschoosing the remaining individual.

In institutional arbitrations, parties normallysurrender some of their ability to appoint thearbitrators. In these cases, the institution acts as“another layer” in the appointment process.22 Asalways, unless the parties otherwise have provided intheir arbitration agreement, the individual proceduralrules of the chosen arbitral institution determine howthe arbitrators are to be appointed. Although theinstitution normally makes the ultimatedetermination as to the appointment of thearbitrators, parties are sometimes given anopportunity to nominate individuals who are thenconsidered by the institution.

Besides contemplating the size and selection of thearbitration panel, attorneys also should advise theirclients to include in their agreement some generalselection criteria for the individual arbitrators.Recommended issues that should be addressedinclude: the requisite expertise, skill, andqualifications of the arbitrators; the availability of the arbitrators; the language spoken by thearbitrators; and the nationality of the arbitrators,especially where one party to the arbitrationproceeding is a foreign state.

Enforcement of Arbitral Awards

The ever-increasing popularity of internationalarbitration is largely a result of courts’ readiness to enforce arbitral awards. Indeed, in the UnitedStates, “the federal courts today play a subdued role [in international arbitration] by essentiallyrubber-stamping arbitral agreements, proceedingsand awards.”23

International arbitral awards are largely enforcedunder two conventions: the Convention on theRecognition and Enforcement of Foreign Arbitral

162159.qxp 12/14/2 6 11:39 AM Page 19


The United States

did not ratify

the New York

Convention, which

was created in 1958,

until 1970 . . .

Courts in the

United States afford

great deference to

arbitrators’ decisions

in general . . .

[O]nce an

international

arbitral award has

been rendered,

parties face an

uphill battle in

attempting to

convince a court

to disturb the

decision of the

arbitrators.

Awards (the “New York Convention”), and the Inter-American Convention on International CommercialArbitration (the “Panama Convention”). While theNew York Convention is truly international in scope,having been ratified by 137 nations to date, thePanama Convention is much more limited, with 19signatories in North, Central, and South America,and the Caribbean.24

The United States did not ratify the New YorkConvention, which was created in 1958, until 1970,although it ratified the Panama Convention the sameyear it was adopted, in 1975. The United StatesCongress has incorporated its obligations under bothConventions into the Federal Arbitration Act (FAA).The New York Convention is incorporated into theFAA at 9 U.S.C. Chapter 2, while the PanamaConvention is incorporated at Chapter 3.

Courts in the United States have provided four basic requirements for the application of the NewYork Convention: “(1) there must be a writtenagreement; (2) it must provide for arbitration in theterritory of a signatory of the Convention; (3) thesubject matter must be commercial; and (4) it cannotbe entirely domestic in scope.”25 Moreover, Congresshas specified that courts must comply with theUnited States’ international treaty obligations under both Conventions. With respect to the New York Convention, 9 U.S.C. § 207 states that“[t]he court shall confirm the [international arbitral]award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of theaward specified in the said Convention.”26

Additionally, 9 U.S.C. § 302 incorporates byreference many of the provisions applicable to theNew York Convention, including Section 207, toalso apply to the Panama Convention. Where bothConventions apply, however, 9 U.S.C. § 305(1)states that, unless the parties have agreed otherwise,the Panama Convention will apply “[i]f a majority ofthe parties to the arbitration agreement are citizens ofa State or States that have ratified or acceded to the[Panama] Convention.” Otherwise, the New YorkConvention applies.27

While courts in the United States afford greatdeference to arbitrators’ decisions in general, this iseven more accurate in the international context.Indeed, U.S. circuit courts generally agree that

“Article V of the [New York] Convention lists theexclusive grounds justifying refusal to recognize an[international] arbitral award.”28 Because Article Vdoes not include non-statutory, common law groundslike mistake of fact or manifest disregard of the law,both of which are occasionally used by U.S. courts tovacate domestic arbitral awards, most courts haveagreed that these grounds are inapplicable in theinternational arbitration context.29 Still, at least oneU.S. circuit has held that “the Convention mandatesvery different regimes for the review of arbitral awards(1) in the state in which, or under the law of which,the award was made, and (2) in other states whererecognition and enforcement are sought.”30 Withrespect to awards rendered under the PanamaConvention, however, it has been held that manifestdisregard of the law “is not a basis for vacatingarbitration awards under the Panama Convention orfor refusing to recognize or execute arbitration awardsunder the Panama Convention, even if those awardswere rendered in the United States.”31

Finally, it is important for parties seeking to vacate aninternational arbitral award under the public policyexception of the Conventions to realize that thispossibility is remote at best. Indeed, this ground isusually interpreted as being available “only whereenforcement would violate the forum state’s mostbasic notions of morality or justice.”32 As such, it isclear that once an international arbitral award hasbeen rendered, parties face an uphill battle inattempting to convince a court to disturb the decisionof the arbitrators.

Conclusion

In light of the rapid expansion of international law ingeneral, it is essential for practitioners to familiarizethemselves with the international arbitrationprocess.33 As demonstrated by the foregoing sections,international arbitration is an incredibly nuanced areaof the law that requires much advance deliberation onthe part of both attorneys and their clients. Byconsidering the topics discussed in this article,however, practitioners can ensure that their clientstake the necessary steps to obtain advantageousarbitral awards which will be readily enforced bycourts in both the United States and abroad.

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V

a

g

y

a

y

y

1Michael A. Roche is a young litigator who practices at theinternational litigation and arbitration boutique of Astigarraga DavisMullins & Grossman, P.A. in Miami, Florida.

2Quoted in AAA Center Administers its 1000th International Case, 10WORLD ARB. & MEDIATION REP. 149, (June 1999).

3See John A. Barrett, Jr., International Legal Education in the UnitedStates: Being Educated for Domestic Practice While Living in a GlobalSociety, 12 AM. U. J. INT’L L. & POL’Y 975, 982 (1997).

4Alamria v. Telcor Int’l, Inc., 920 F. Supp. 658, 662 (D.Md. 1996)quoting AT&T Tech., Inc. v. Communications Workers, 475 U.S. 643,648 (1986).

5Alamria, 920 F. Supp. at 663 quoting AT&T Tech., Inc., 475 U.S. at 649.

6Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S.614, 629 (1985).

7First Options of Chicago v. Kaplan, 514 U.S. 938, 944-45 (1995).

8See Standard Bent Glass Corp. v. Glassrobots Oy, 333 F.3d 440, 448(3d Cir. 2003).

9Alamria, 920 F. Supp. at 669 quoting Thomson-CSF v. AmericanArbitration Assoc., 64 F.3d 773, 776 (2d Cir. 1995).

10See Deborah L. Holland, Drafting a Dispute Resolution Provision inInternational Commercial Contracts, 7 TULSA J. COMP. & INT’L L.451, 462 (Spring 2000).

11See Lisa C. Thompson, International Dispute Resolution in theUnited States and Mexico: A Practical Guide to Terms, ArbitrationClauses, and the Enforcement of Judgments and Arbitral Awards, 24SYRACUSE J. INT’L L. & COM. 1, 21-22 (Fall 1997).

12See Simon Greenberg, The Law Applicable to the Merits inInternational Arbitration, 8 VJ 315 (2004).

13Id. at 318-27.

14See A Beginner’s Guide to Resolving Transnational Disputes ThroughArbitration, 68 N.Y. ST. B.J. 10, 16 (Nov. 1996).

15Id. at 13.

16Id. at 17-18.

17See Filanto, S.p.A. v. Chilewich International Corp., 789 F. Supp.1229, 1241 (S.D.N.Y. 1992) (requiring parties, in “the interests ofjustice,” to arbitrate in Moscow pursuant to arbitration agreement,even though conditions in Russia remained “unsettled”); Pauly v.Biotronik, 738 F. Supp. 1332, 1335-36 (D. Or. 1990) (requiringparties to arbitrate in Bern, Switzerland, under German substantiveand procedural law even though plaintiffs complained that they didn’tspeak German, given that plaintiff Pauly had not demonstratedproper standard that arbitration in Europe would “be so gravelydifficult and inconvenient that [Pauly] for all practical purposeswould be deprived of his day in court”). But cf. National Iranian OilCo. v. Ashland Oil, Inc., 817 F.2d 326, 331-34 (5th Cir. 1987)(holding that court could not compel parties to arbitrate in Iran,pursuant to arbitration clause contained in parties’ contracts, giventhat Iran was not then a signatory of the New York Convention.Additionally, given that the parties had chosen Iran as the desiredsitus of arbitration, the court could not order them to arbitrate in anyother jurisdiction, including Mississippi, no matter that it wasinconvenient, if not impossible, for parties to arbitrate in Iran asoriginally agreed).

18See Holland, supra note 10, at 465.

19Id.; see also William S. Fiske, Should Small and Medium-SizeAmerican Businesses ‘Going Global’ Use International CommercialArbitration?, 18 TRANSNAT’L LAW. 455, 470-75 (2005).

20See Fiske, supra note 19 at 472-73.

21Emilia Onyema, Selection of Arbitrators in International CommercialArbitration, INT. A.L.R. 2005, 8(2), 45-54 (2005) (citation omitted).

22Id. at 49.

23Fiske, supra note 19 at 470.

24See United Nations Commission on International Trade Law, Status1958 — Convention on the Recognition and Enforcement of ForeignArbitral Awards, (last visited Oct. 10, 2006)<http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention_status.html>; Office of International Law, Organization ofAmerican States, Washington, D.C., Multilateral Treaties B-35: Inter-American Convention on International Commercial Arbitration, (lastvisited Oct. 10, 2006) <http://www.oas.org/juridico/english/sigs/b-35.html>.

25Smith/Enron Cogeneration Ltd. Partnership, Inc. v. Smith CogenerationInt’l, Inc., 198 F.3d 88, 92 (2d Cir. 1999).

26Pursuant to Article V of the New York Convention, a court mayonly refuse the recognition and enforcement of an internationalarbitral award where there is proof of one or more of the followingsummarized grounds: (1) (a) the parties were under some incapacityor the agreement is not valid under the law of the countries to whichthe parties were subject, or alternatively, of the country where theaward was made, (b) the party against whom the award was invokeddid not receive proper notice of the appointment of the arbitrator, (c)the award deals with matter(s) not contemplated by the parties’agreement, (d) the composition of the arbitrator(s) was not inaccordance with the parties’ agreement, (e) the award has been setaside or suspended in the country in which it was made, or (2) (a) the subject matter of the dispute is not capable of settlement by arbitration under the law of that country, or (b) the recognition or enforcement of the award would be contrary to the public policy of that country. Similarly worded grounds permitting courts’refusal of international arbitral awards appear in Article V of the Panama Convention.

279 U.S.C. § 305(2).

28M&C Corp. v. Erwin Behr GmbH & Co., KG, 87 F.3d 844, 851 (6th Cir. 1996); Industrial Risk Insurers v. M.A.N. GutehoffnungshutteGmbH, 141 F.3d 1434, 1446 (11th Cir. 1998) (stating that “[i]nshort, the Convention’s enumeration of defenses is exclusive”).

29M&C Corp., 87 F.3d at 851.

30Yusuf Ahmed Alghanim & Sons v. Toys “R” Us, Inc., 126 F.3d 15, 23(2d Cir. 1997).

31American Life Insurance Co. v. Parra, 269 F. Supp. 2d 519, 525 (D. Del. 2003).

32Admart AG v. Stephen and Mary Birch Foundation, Inc., 457 F.3d302, 308 (3d Cir. 2006) (citation omitted).

33See Jenny S. Martinez, Towards an International Judicial System, 56STAN. L. Rev. 429, 441 (Nov. 2003) (citing an almost two-foldincrease in the number of international commercial disputes resolvedthrough arbitration during the period from 1992-2003, and hailingthe New York Convention as “one of the great successes ofinternational law”).

162159.qxp 12/14/2 6 11:39 AM Page 21

International

arbitration is

a practice area

that young

litigators should

keep in mind

when molding

their careers.


This quarter’s article introduces us to Vikki Rogers, anAssociate at Mazur Carp & Rubin in New York. Vikkialso teaches international arbitration as an adjunctprofessor at Villanova Law School. Vikki has worked asa case manager at the International Centre for DisputeResolution (ICDR), at the American ArbitrationAssociation, and practiced international arbitration inGermany and New York at a prestigious internationallaw firm.

International business disputes inherently involvedispute resolution in a foreign jurisdiction, underforeign laws and procedures, and to a large extent, ina foreign language. As a result, multinationalcorporations concerned with foreign proceedings,issues of confidentiality, and lack of familiarity withthe foreign jurisdiction, often reject internationallitigation as a viable dispute resolution mechanism intheir contracts in favor of international disputeresolution. Notably, there has been an ongoingdebate over which system is more accessible,promotes trust and respect, and leaves the partiesmore satisfied with the outcome. In an attempt tointroduce empirical data and statistics to the issue,PricewaterhouseCoopers, in association with theSchool of International Arbitration, Queen Mary, University of London, has published a study examining the corporate attitudes and practices surrounding international arbitration(“PricewaterhouseCoopers study”).2 The results showthat international arbitration is a practice area thatyoung litigators should keep in mind when moldingtheir careers.

Expounding on the increasingly sophisticated nature of international dispute resolution as a result of the growth and complexity of internationaltrade and investment, the results of thePricewaterhouseCoopers study indicate an upwardtrend of more corporations opting for internationalarbitration to resolve disputes as opposed to litigationthrough the national courts. The results indicate aswell that, while international arbitration can provide

distinct advantages over litigation through moreflexible processes and the wide enforceability ofawards, some of the major disadvantages includeexpenses and the time required to bring the matter tofull resolution. Below are some of the significantfindings from the study:

• 73 percent of respondent corporations stated apreference for international arbitration toresolve their cross-border disputes;

• The most cited advantages to internationalarbitration are flexibility of procedure,enforceability of awards, the privacy afforded by the process, and the ability of parties toselect the arbitrators;

• The tactical significance of some features of international arbitration, e.g., the choice of seat of arbitration may not be fully appreciated;

• A clear dispute resolution policy provides animportant strategic advantage when negotiatingdispute resolution clauses for cross-bordercontracts, and 17 percent of the respondentsstated that a dispute resolution policy directlyproduces cost savings, while a further 69percent indicated that a dispute resolutionpolicy helps to minimize escalation of disputes;

• There is widespread support for regionalarbitration institutions;

• Corporations are looking for arbitrators with an established reputation in theinternational arbitration community, and,currently, there is a relatively small pool ofexperienced arbitrators;

• Although international arbitration cansometimes be at least as expensive astransnational litigation, it may represent bettervalue for the money;

Career Options With A Difference:International Commercial Arbitration

by Nosizi Ralephata 1

162159.qxp 12/14/2 6 11:39 AM Page 22

[A]s with any

worthwhile career

investment, the level of

interest generated may

be higher than the

positions available . . .

Very few U.S.

law firms make

arbitration

a separate

practice group.


• With increasing awareness of internationalarbitration as a dispute resolution process, thereis growing demand from corporations for moreeducation on the tools and tactics ofinternational arbitration; and

• 95 percent of corporations expect to continueusing international arbitration.

A Career in International Arbitration

In light of the results of the PricewaterhouseCoopersstudy, particularly that 95 percent of the corporationssurveyed indicated that they expect to continue usinginternational arbitration, and added to that, the smallpool of experienced arbitrators available, a career ininternational arbitration may prove to be a lucrativeoption in the long-run for a young lawyer.

It is also worth noting that, as different countriescompete for economic strategic positioning on aglobal scale, increased traffic is generated in the areaof international trade.3 With that comes therealization of dealing with the different legal systemsof the global players.

Frequently, there is a lack of familiarity with eachcountry’s legal process, which breeds uncertainty, andto some extent, distrust. This adds exponentially tothe appeal of arbitration as a means of resolvingdisputes. However, as with any worthwhile careerinvestment, the level of interest generated may behigher than the positions available, so grades usuallybecome the critical determining factor;4 and assurmised by Vikki Rogers in an interview with theauthor, entrance to the international arbitrationpractice is inherently competitive as the practice isgenerally dominated by the larger law firms.

One possible way to enter is to go overseas andpractice in an international arbitration group, largelyfound in London, Paris, or Frankfurt. Some firms arereceptive to Americans willing to live and practiceoverseas for a few years. Because very few U.S. lawfirms make arbitration a separate practice group, thetypical route would be through litigation and then tryand pick up arbitration work. Knowledge of, orproficiency in, a foreign language or particularinternational experience is an advantage.

In addition, Rogers noted that, because theinternational arbitration field is a very smallcommunity, early preparation — such as attendingrelevant conferences and publishing a substantialpiece in the field5 — is an advantage. Thus, the younglawyer should hone down on internationalarbitration as the practice area of choice early in his orher career. The young litigator also may want todetermine whether or not he or she is willing to takea risk in focusing on this area. Moreover, invoking theconfidence and attention of partners or practicemanagers so that they are willing to invest theirresources in you will have a significant impact inshaping a career in international arbitration.

For Vikki, getting chosen to participate in the WillemC. Vis International Arbitration Moot, which takesplace in Vienna, was the initial foot in the door thatshe needed to embark on a career in internationalarbitration. The competition is comprised of 156teams from 49 countries and provides a great learningexperience and early networking opportunities. “Afterthat experience, I got the international arbitrationbug and knew I wanted to do that for a living,” she recalls.

Capitalizing on that rare opportunity, she took on theextra load and coached the team during her third yearin law school. She continued through the year rightafter law school. Vikki thus had the advantage ofreturning to Vienna during her second year as a coachfor the Pace Law School Vis team, and this return tripmaterialized into another door opening event whenshe was invited by the University of Cologne to be aresearch assistant at its Institute for European andInternational Cooperation, and simultaneously coachtheir moot team for a year. That job was the nexusthat enabled Vikki to maximize on her interactionswith several German law firms’ internationalarbitration groups: “In particular, I heard severalgood things about the arbitration group at Shearman& Sterling in Frankfurt. I initiated contact with thepractice group’s team leader during a practice sessionfor the VIS moot team. I had an interview shortlythereafter and then started working for the group,and so in a manner of speaking, I believeinternational arbitration chose me after the moot.”

162159.qxp 12/14/2 6 11:39 AM Page 23

Some attorneys

fail to appreciate

that the venue

or “seat” of the

arbitration is a

significant tactical

consideration.


Practicing in Germany

Corporations involved in an international arbitrationtend to seek firms that specialize in internationalarbitration, are experienced in the subject matter ofthe dispute, and have access to counsel in the place ofthe dispute to provide regional expertise and theapplicable law.6 U.S. firms often fit that bill. Forknowledge of the larger cases, U.S. companies oftenwill hire specialized arbitrations groups, frequentlyfound at larger firms (generally in the U.S. orEurope) or specialized international arbitrationboutiques.

Again, Vikki Rogers: “While in Germany, mypractice was really international. The majority of theinternational arbitrations I worked on involvedconstruction law disputes implicating the laws ofSpain, the Netherlands, Argentina, Venezuela, India,and the U.S., among others. On all my cases, weretained local counsel to get the specialized domesticlegal knowledge, as well as identified local experts forthe case. The cases I worked on were administered bythe ICC International Court of Arbitration (ICC),but I since have become very familiar with AmericanArbitration Association (AAA) through my positionas an international case manager at the InternationalCentre for Dispute Resolution (ICDR). My clients allwere American (even with respect to the cases Iworked on in Germany), but the opposing partyalways was from another country. While at ICDR, Imanaged 45-55 arbitrations at any given time,involving counsel and arbitrators from every part ofthe globe.”

Choice of Law

Some attorneys fail to appreciate that the venue or“seat” of the arbitration is a significant tacticalconsideration. The procedural law of the venue willdetermine the support intervention that may berequired from local courts during the arbitration.7 Inaddition, “although most contracts will routinelydefine the applicable law and thus preempt choice-of-law disputes, on occasion, some circumstances willarise in which the law of applicable forum is not verywell developed for the legal issue at hand,” Vikkiexplains. “In one construction law case I was involvedin, we had construction experts from the U.S. to

advise regarding the relevant technical issues; then weretained local legal counsel and local experts for otherpoints (for example, we hired a professor in thecountry of the project to comment on the currentpolitical situation which was allegedly impacting theproject). When the applicable law was not dispositiveon an issue, we would also reference U.S. law to helpguide the tribunal. If referencing U.S. law did notseem appropriate given the character of the case orissue, then we also might take a broader comparativeapproach on a particular point of law.”

Work/Life Balances

Europe traditionally has enjoyed more regulated workhours and is regarded as more protective of itsemployees and their rights.8 Such sentiments add tothe view that professionals in Europe enjoy a betterwork/life balance as compared to say, New Yorkers.Analyzing the work ethic in the different countries asit impacted her, Vikki found that, on average, herwork hours were shorter in Germany, and the workday generally started around 9 a.m. untilapproximately 7 or 8 p.m., and weekends weregenerally work-free, while the supposed typical workhours in New York were longer on average, andincluded weekends.

Contrary to the common perception that Americanshave more disposable income, and thus enjoy moreluxurious surroundings, Vikki found that the livingand workspace were more aesthetically pleasing inGermany. “Every full-time employee, includingsecretaries and paralegals, had relatively spaciousoffices with windows. In New York, it is notuncommon that new associates tend to share roomswith three or four associates, and are expected to workat least 60 hours per week. The pace was not nearly asfast in Germany, and we certainly enjoyed morevacation time there — six weeks plus a several days offfor religious observances. In New York, the averagevacation time is four weeks. Apartments weregenerally larger and newer, and at least a third cheaperthan New York, and other living costs were generallymuch cheaper in Germany.”

Not that New York does not have its benefits.“Frankfurt is considerably smaller than New York.New York definitely offers more to do with your free

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[W]hether moving to

a foreign country is a

worthwhile career

move is determined

by the income and

benefits offered.

[I]nternational

commercial

arbitration is a

dynamic field that

offers a lawyer the

opportunity to

practice with

exceptionally

competent lawyers,

on complex and

exciting issues of

law, and facing

challenges that can

be encountered only

in an international

context.


f

time. And, although Frankfurt is considered aninternational city, it is dominated by relatively fewprofessional types and lacks somewhat in diversity.New York definitely offers more diversity and anopportunity to meet people pursuing all sorts ofcareers, from a multitude of backgrounds.”

One of the factors informing a young lawyer’sdecision-making process on whether moving to aforeign country is a worthwhile career move isdetermined by the income and benefits offered. In thecase of practicing international arbitration inGermany, Vikki noted that the actual dollar amountremuneration appears to be more in the U.S.: “WhenI worked in Germany, my salary was about a third lessthan for the same associate-level position in NewYork; however, the cost of living was less in Germany.The bonus was the same, however, and the otherbenefits were generally better, including betterhealthcare packages (taxes, though, are considerablyhigher in Europe). It is also important to note that theworking hours, cost of living, salary and benefits, etc.vary significantly among European cities and even canvary within firms in a city.”

Diversity

Reflecting on how the different countries deal withdiversity issues, Vikki observed that in both countriesthere were relatively few ethnic minorities working aslawyers in the office. However, the legal communityas a whole is very diverse given the internationalcharacter of the work. “As for women, at the associatelevel, the arbitration group in Germany was small and mostly women; the litigation group in New Yorkwas large and probably evenly split between men andwomen. At the partner level in Germany, I wasn’taware of any female partners; and in New York, I was only aware of a few female partners. So at thehigher levels, the field generally still appears to be male dominated. I personally know only a few handful of women around the world who have stayed with arbitration long term. Although I am not sure why, I only can guess that it is because the hours are very demanding and there is still a climate in which women leave if they chose to have a family or desire to have a greater work/life balance.

In an effort to change this trend, among otherreasons, a relatively new group called “ArbitralWomen” was created as an informal organization forwomen who practice international commercialarbitration around the world. They hold periodicmeetings and gatherings, generally around majorarbitration conferences. The organization is very good for networking, and also offers a forum to share the latest developments ininternational arbitration.

Parting Thoughts

Commenting from the vantage point of one whoactively has been involved in an internationalarbitration in a wide range of settings, includingacademia and private practice, Vikki believesinternational commercial arbitration is a dynamicfield that offers a lawyer the opportunity to practicewith exceptionally competent lawyers, on complexand exciting issues of law, while facing challenges thatcan be encountered only in an international context.“Because of all of these unique attributes, it is a verydemanding field that requires a lot of hard-work. Butthe pay off is worth it on a number of different levels.It offers exciting and challenging opportunities withinthe academic context, from the institutionalperspective, and as a professional practioner. It willdefinitely satisfy a person’s wanderlust and curiositytowards foreign culture and practice.”

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1Nosizi Ralephata is an attorney with Turner Padget Graham &Laney in Charleston, South Carolina. She is chair of the U.S.Litigators’ Role Abroad Subcommittee of the International LitigationCommittee of the Section. This article is the latest in her series aboutyoung litigators’ options in international litigation. She can bereached at [email protected]. She is always on the lookout for stories and tales of young litigators practicing abroad.

2http://www.pwc.com /internationalaribtrationstudy2006.pdf. Thestudy was conducted during a six-month period and was comprisedof an online questionnaire which was completed by 103 respondents;as well as 40 in-depth interviews.

3See, e.g., Singhania & Partners, Solicitors and Advocates June 2006India Legal News Update, reporting India’s GDP growth at 8.4%,with a projected Foreign Direct Investment inflow of U.S.$12 billionin 2006-2007.

4By using creative and proactive thinking, sometimes less than perfectgrades can be circumvented through such methods as publishing anddeveloping specific sought after skills in the field.

5Care to the substance and place of publication should be taken as themarket is flooded with articles by practitioners on internationalcommercial arbitration.

6http://www.pwc.com /internationalaribtrationstudy2006.pdf. (Executive Summary).

7See in-depth analysis and discussion of the venue considerationsunder Section 6 of the PricewaterhouseCoopers study.

8http://www.iht.com/articles/2006/05/10/business/labor.php; JohnTagliabue, The New York Times, May 11, 2006.

6See, e.g., Cooper v. Ateliers de la Motobecane, S.A., 57 N.Y.2d 408(1982); Metropolitan World Tanker Corp. v. P.N. PertambanganMinjakdangas Bumi Nasional, 427 F. Supp. 2 (S.D.N.Y. 1975);McCreary Tire & Rubber Co. v. CEAT S.p.A., 501 F.2d 1032 (3d Cir. 1974).

7See, e.g., McCreary Tire, 501 F.2d at 1038.

8Metropolitan, 427 F. Supp. at 4.

9Carolina Power & Light Co. v. Uranex, 451 F. Supp. 1044 (N.D. Cal. 1977).

10See, e.g., CanWest, 804 N.Y.S.2d at 549; HSBC.,279 A.D.2d at 251.

11Id. at 565-66.

12Id. at 565.

1John J.P. Howley is a partner in Kaye Scholer LLP in New York. He has represented domestic and foreign clients in internationalarbitrations under AAA-ICDR, ICC, and UNCITRAL rules. He isadmitted in New York and various federal courts, and he is aregistered foreign lawyer in England and Wales.

2See, e.g., CanWest Global Communications Corp. v. Mirkaei TikshoretLtd., 9 Misc.3d 845, 804 N.Y.S.2d 549 (Sup. Ct. Cty. 2005); HSBCBank USA v. Nat’l Equity Corp., 279 A.D.2d 251, 719 N.Y.S.2d 20(1st Dep’t 2001).

3Convention on Recognition and Enforcement of Foreign ArbitralAwards, (1970) 3 U.S.T. 2517, T.I.A.S. No. 6997 (“New YorkConvention”).

4See, e.g., Carolina Power & Light Co. v. Uranex, 451 F. Supp. 1044(N.D. Cal. 1977).

5New York Convention, Article II(3).

Keeping the Status Quo (Continued from page 6)

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As this issue’s Co-Chairs’ Note so graciously mentions,the ABA Litigation Section recently honored The ILQas this year’s best print publication for its category. Ofcourse, upon accepting the award at the LitigationLeadership meeting, an unnamed Editor immediatelydropped it. Luckily, the rugged Lucite award (good thinking, ABA!) did not break. That wouldhave been embarrassing.

While the praises of Messrs. Burke and Roth aregratefully accepted (and, of course entirely warranted),there were a number of things that helped to makeThe ILQ a stand-out publication last year in additionto the obviously top-notch editorial work from yours truly.

In a world where “content is king,” we have beenlucky to have been able to chose from an excellent andwide-ranging body of work from our contributors.Last year, we published articles with topics rangingfrom Allison Butler’s review of China’s take on the UNConvention on International Sale of Goods and JasonYackee’s scholarly work on the new HagueConvention on Choice of Court Agreements, toThomas Brewer’s analysis of the circuit split overattempts to increase the scope of judicial review ofarbitration awards. We also have benefited fromregular contributors like U.S. Litigators’ Role AbroadSubcommittee Chair, Nosizi Ralephata, whose superband insightful articles on young litigators practicingabroad has brought an interesting new dimension tothe subject of international litigation.

The importance of having such varied andconsistently high-quality submissions cannot beoverstated. Of course, even the best writing can be leftto gather dust if not for the efforts of those whose job

it is to make sure it is presented in an appealingmanner. As one assistant editor’s Portuguesegrandmother was want to say, “os olhos comemtambém.” 1 The superb work of Stephanie Schwauschand her team at Vinson & Elkins have made sure thatthe layout of each edition has been a feast for the eyesas much as the mind.

Finally, while we have been able to address a variety ofissues this year, we also have been fortunate in beingable to consider certain subjects in more depth.Themed editions, like this past spring’s “Destination:Asia” and this issue’s “Focus: InternationalArbitration,” have provided a way to explore certainregions and topics more fully. The positive feedbackwe have received on this type of issue helped us decideto make it an ongoing tradition. Readers can lookforward to a Latin America themed issue next quarter.

Needless to say, while we cherish the honor bestowedupon our publication, we also are aware of the burdento continue working to this high standard. Putsimply, to do this publication we rely in large part onyou, the faithful reader, to remain active asCommittee Members, to recruit your colleagues, andto contribute your thoughts and analysis in futurearticles, commentaries, and reviews. Getting involvedis easy. Simply forward contributions to one of theeditors using the contact information below. Withoutyour contributions, we cannot hope to replicate oursuccess in this coming year and, more importantly,give ourselves a second chance to successfully acceptthe award without immediately dropping it. Thus atoast to your continued contributions and improvedhand-eye coordination of the editorial staff of theSection of Litigation’s best Committee journal, The ILQ.

postscriptby James L. Loftis and Edward M. Mullins

1Or in English, “the eyes also eat.”

EDITORS

James Lloyd Loftis PartnerChair, International Dispute ResolutionVinson & Elkins RLLPCityPoint, 33rd FloorOne Ropemaker StreetLondon, EC2Y 9UEUnited Kingdom (44) [email protected]

Edward M. MullinsShareholderAstigarraga Davis Mullins & Grossman, P.A. 701 Brickell Ave.16th FloorMiami, FL 33131(305) [email protected]

ASSISTANT EDITORS

Douglas GuilianoAssociateAstigarraga Davis Mullins & Grossman, P.A.701 Brickell Ave.16th FloorMiami, FL 33131(305) [email protected]

Eugene J. Silva IIAssociateVinson & Elkins LLP1001 Fannin StreetSuite 2500 Houston, TX 77002-6760(713) [email protected]

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Your source for information about:

• International Litigation Committee News• Programs and Events

• Past Issues of The International Litigation Quarterly• Membership Information and Registration

Visit:www.abanet.org/litigation/committee/international/home.html

for this information and more

www.abanet.org/litigation/younglawyers/home.htmlfor information dedicated for young lawyers

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