Arbitration

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We have previously reported on changes the Law Commission was considering to the Arbitration Act 1996 (the Act). The Law Commission has now published its final report (the Final Report, available here).

The report draws to a close a review of English arbitration legislation that began in January 2022. A draft bill to implement the Commission’s conclusions and recommendations into law is provided with the report so it is now for the UK government to decide whether to introduce those changes to parliament.

The Eleventh Circuit upheld an arbitral award last month despite the arbitrators’ failure to make certain disclosures regarding potential sources of bias. The litigation involved a dispute between the Panama Canal Authority, the government agency responsible for the operation and management of the Panama Canal, and Grupo Unidos por el Canal, S.A., the contractor hired to construct the Panama Canal expansion. Complications with the project caused progress to be “severely delayed and disrupted,” resulting in liability disputes between the parties. 

Parties to an arbitration agreement sometimes choose to include a delegation clause, which is a provision that delegates to the arbitrator—rather than a court—gateway questions of arbitrability, such as whether the agreement covers a particular controversy or whether the arbitration provision is enforceable at all. See Caremark LLC v. Chickasaw Nation.

In Holley-Gallegly v. TA Operating, LLC, the Ninth Circuit recently reinforced the Supreme Court’s decade-old distinction between the analysis needed to determine whether a dispute is subject to arbitration on the one hand, and whether an arbitrator has been legally delegated the authority to make that threshold determination on the other. The decision provides important lessons to practitioners litigating disputes regarding the enforceability of delegation clauses.

Last month saw the end of the second round of the UK Law Commission’s consultation on reform of the Arbitration Act 1996, the legislation which provides the framework for arbitration in England and Wales. We have reported on the current status of the consultation and are watching for the final recommendations.

England is one of the most popular jurisdictions for commercial parties to resolve disputes through arbitration: London and Paris were ranked as the top two preferred cities in the world in 2022. To ensure England’s arbitration regime remains modern and competitive, the Law Commission –  a body responsible for considering and recommending legislative change to the UK government – is currently considering updates to the legal framework of arbitration in England & Wales, the Arbitration Act 1996 (the Act).

The Ninth Circuit recently issued an opinion that could shape how companies draft and revise two oft-encountered types of contracts: terms of service agreements (“TOS”) and arbitration clauses.

In Jackson v. Amazon.com, Inc., the Ninth Circuit affirmed the district court’s order denying Amazon.com, Inc.’s motion to compel arbitration in a case brought by a proposed class of “Amazon Flex” drivers. Amazon Flex is a delivery program run through a smartphone app that Amazon uses to engage individuals to make Amazon deliveries in their personal cars. 

The choice of arbitration institution can arise at any point in an investment cycle: from finalising initial agreements at fund or portfolio company level, or on an ad hoc basis when a dispute arises.

To help demystify some differences – this article sets out the key features of three commonly used international arbitration regimes that an asset manager should take into account when making such a choice.

The United States Supreme Court recently resolved a circuit split regarding when a party has waived its contractual right to arbitrate by participating in litigation prior to seeking to arbitrate a dispute. In Morgan v. Sundance, Inc., the Court held that the party seeking to resist arbitration does not need to show that it has been prejudiced by the other party’s delay in seeking to compel arbitration. Notably, and in holding that “the Eighth Circuit erred in conditioning a waiver of the right to arbitrate on a showing of prejudice,” the Supreme Court decided against the use of “custom-made rules, to tilt the playing field in favor of (or against) arbitration.”