The Institute of Transnational Arbitration (ITA), in collaboration with the ITA Board of Reporters, is happy to inform you that the latest ITA Arbitration Report was published: a free email subscription service available at KluwerArbitration.com delivering timely reports on awards, cases, legislation and current developments from over 60 countries and 12 institutions. To get your free subscription to the ITA Arbitration Report, click here.
The ITA Board of Reporters have reported on the following court decisions.
Stephan Adell, Adell & Merizalde, ITA Reporter for the Dominican Republic
The Dominican Constitutional Court held that arbitral awards are not subject to constitutional actions such as the “acción directa de inconstitucionalidad”.
A v. B and C Ltd., Supreme Court of Finland, Case No. S2022/186, Decision No. 2023:38, 01 June 2023
Anna-Maria Tamminen and Viktor Saavola, Hannes Snellman Attorneys, ITA Reporters for Finland
The Supreme Court evaluated, as a first question, whether the prohibition of appeals under section 17(3) of the Finnish Arbitration Act (the “FAA”) also applies to court’s decision to reject an application for the appointment of an arbitrator. As a second question, the Supreme Court evaluated whether a pathological dispute resolution clause referring to a non-existent arbitration board and non-existent rules was ‘pathological’ in a way that it was apparent, as referred to in section 17(1) of the FAA, that there were no legal grounds to resolve the dispute in arbitration.
BGH – I ZB 33/22, Federal Court of Justice of Germany, I ZB 33/22, 09 March 2023
Patrick Gerardy, Cleary Gottlieb Steen & Hamilton LLP, and Harry Nettlau, Willkie Farr & Gallagher LLP, ITA Reporters for Germany
If a state court at the seat of the arbitral tribunal dismisses an application to set aside an arbitral award, such a dismissal has no binding effect in a German court proceeding to declare the same (foreign) arbitral award enforceable pursuant to Sec. 1061(1) of the German Code of Civil Procedure (Zivilprozessordnung, or “ZPO”) in conjunction with the New York Convention (“NYC”). The prospective respondent in such an enforceability proceeding may file a request with the competent German court to declare that the respective award must not be recognized in Germany. Such a declaratory action or request is not subject to a time limit. If, however, the applicant requests a declaration of enforceability of the same arbitral award, the declaratory request becomes moot for lack of a legal interest (since the same issues will be decided with the ordinary enforceability proceeding).
Patrick Gerardy, Cleary Gottlieb Steen & Hamilton LLP, and Harry Nettlau, Willkie Farr & Gallagher LLP, ITA Reporters for Germany
Pursuant to Sec. 1054(1) sentence 2 of the German Code of Civil Procedure (Zivilprozessordnung, or “ZPO”), it is formally sufficient if the majority of tribunal members signs an arbitral award, provided that a reason for any missing signature is stated in writing. In this respect, a mere note “signature could not be obtained” is not sufficient.
Ioannis Vassardanis, Ioannis Vassardanis & Partners, ITA Reporter for Greece
Preliminary order by an Arbitral Tribunal. Under Greek law, interim measures can be ordered by arbitral tribunals under strict conditions. Interim measures are not enforceable unless validated by the Greek courts under Art. 17§2 L. 2735/1999. A stay of execution application before the Athens Court of Appeal was rejected, as the preliminary order, not having been validated by a Greek Court, was not yet enforceable, and thus, there was no legal basis for such an application thereof.
Akiko Inoue, Hisaya Kimura and Koki Yanagisawa, Nagashima, Ohno & Tsunematsu, ITA Reporters for Japan
The Intellectual Property High Court ruled differently from the WIPO ruling issued prior to the lawsuit, adding that its judgment differed because the WIPO Ruling had been rendered based on (i) the rules on burden of proof applicable to the arbitration proceedings and (ii) the evidence submitted in the arbitration proceedings at that time and therefore the high court judgment should not be affected by the WIPO Ruling.
José A. Moreno Rodríguez, Altra Legal, ITA Reporter for Paraguay
On June 15, 2022, the Constitutional Chamber of the Supreme Court of Justice rejected a challenge of unconstitutionality, considering that the rulings of the inferior courts did not meet the requirements to be deemed as arbitrary or contrary to the constitutional order.
Fernando Cantuarias Salaverry, Law School of Universidad del Pacìfico, ITA Reporter for Peru
The Commercial Chamber of the Superior Court of Justice of Lima declared the annulment of an award unfounded.
Viva Dadwal, King & Spalding LLP, ITA Reporter for the United States of America
Multiple judgment creditors of the Bolivarian Republic of Venezuela brought actions in which they moved for writs of attachment fieri facias on, inter alia, shares of a Delaware corporation that was a wholly-owned subsidiary of Venezuela’s national oil company. The oil company intervened and moved to dismiss on the basis that it was no longer Venezuela’s alter ego following a change in government. The United States District Court for the District of Delaware granted motions for writs of attachment and denied the oil company’s motions to dismiss. Appeals were taken and consolidated, and Venezuela intervened. The Court of Appeals affirmed the District Court’s decision, finding that the oil company was still the alter ego of Venezuela and lacked sovereign immunity in the U.S.
Nathaniel J. Bilhartz, King & Spalding LLP, ITA Reporter for the United States of America
Grupo Unidos por el Canal, S.A. et al (“Grupo Unidos”) sought to vacate an ICC tribunal’s awards in favor of Autoridad del Canal de Panama (the “Canal Authority”) in an arbitration arising from a construction project that Grupo Unidos performed on the Panama Canal.
Grupo Unidos argued that the arbitrators had failed to timely disclose their prior involvement in arbitrations that also involved other members of the tribunal and counsel for the Canal Authority and that the relationships among the arbitrators and counsel would lead a reasonable person to question the arbitrators’ impartiality.
The district court denied Grupo Unidos’s motion to vacate and granted the Canal Authority’s motion to confirm the awards, finding that “the allegations of possible bias … are so weak that, even if a reasonable person could believe that a potential conflict exists, confirmation of the award would not violate” basic notions of morality and justice.
The Eleventh Circuit upheld the district court’s decision, concluding that none of the late-disclosed relationships constituted “evident partiality” and finding that “Grupo Unidos has presented nothing that comes near the high threshold required for vacatur.”
Julian Ranetunge, King & Spalding LLP, ITA Reporter for the United States of America
Respondent Antrix Corp. Ltd. (“Antrix”), an Indian company wholly owned by the national space agency of the Republic of India, challenged a District Court’s order confirming a foreign ICC arbitration award rendered against it in favour of Petitioner Devas Multimedia Private Limited (“Devas”), an Indian company.
The U.S. Court of Appeals for the 9th Circuit (“Appeals Court”) ruled that the District Court had erroneously failed to apply the “minimum contacts” test. While personal jurisdiction over a foreign state in a civil action is governed by the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1330, longstanding 9th Circuit precedent establishes that the traditional minimum contacts analysis must also be satisfied. The District Court also erred in concluding that Antrix had the requisite minimum contacts with the U.S. As a result, the Appeals Court reversed the District Court’s judgment confirming the award.
In a concurring opinion, two Circuit Judges opined that the precedent applying the minimum contacts test to the exercise of personal jurisdiction over foreign states has no foundation in the Constitution or the FSIA, and is contrary to the views of other courts of appeals. They explained that, in an appropriate case, it should be reconsidered en banc.
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