Tag Archives: Contracts & Third Parties

New York’s Highest Court Dismisses Complaint By French Asset Management Firm Alleging Breach of Fiduciary Duty and Unlawful Interference with Contract

Oddo Asset Mgt. v. Barclays Bank PLC, et al., No. 126 (NY 2012), involves the application of state common law principles to an international transaction gone bad.   Two investment vehicles, SIV-Lites and Oddo Asset Management, were French asset management companies with over 350 institutional clients and investment of 16.6 billion Euros.  They purchased mezzanine notes … Continue Reading

Federal Court of Appeals Affirms Dismissal of State Law Claim of Fraud By Combination of State Substantive Law Requirements and Federal Procedural Pleading Requirements

Stephenson v. PricewaterhouseCoopers (PWC), 11-1204-cv (2d Cir. 2012) (Summary Order), addresses the viability of claims against Canadian-organized PWC for fraud and negligence arising from PWC’s unqualified audit reports attensting to the accuracy of one of the “feeder funds” into Bernard Madoff Investment Securities, LLC, which, as the Second Circuit says, “was later revealed to be a … Continue Reading

Eleventh Circuit Determines That Some But Not Claims Must Be Arbitrated

Jane Doe v. Princess Cruise Lines, Ltd., No. 10-10809 (11th Cir. 2011), addresses the important necessity of careful corporate drafting of international arbitration provisions, a topic we have posted on in the past. Plaintiff Doe alleged a harrowing story of a woman working for Princess Cruise Lines on one of its ships, who alleged she … Continue Reading

Court Directs One Party To Arbitrate But Not Another, Finding that “Doing Business As” Is Not a Recognized Means of Compelling Non-Signatory To Arbitrate

In this interesting treatment of the issue of compelling a non-party to arbitrate, In the Matter of the Arbitration Between: Sunskar LTD. v. CDII Trading, Inc., et al., 11 Civ. 2499 (S.D.N.Y. 2011)(DLC), provides a good synopsis of the law and practice of the federal courts on compelling non-signatories to arbitrate.  The issue arises with … Continue Reading

Released Claims Against Non-U.S. Sovereign Not Revived By Subsequent Expansion of Plaintiff’s Statutory Rights

We have recently been focused on how international law firms can offer more than just litigation help to clients — that is, how corporate lawyers and drafters of contracts can avoid or at least ameliorate some of the problems encountered in connection with the pursuit of an international dispute.  Recently we discussed the benefits of … Continue Reading

Arbitration Compelled for Industry-wide Antitrust Claim Made Against A Single Defendant Despite Active Participation in Multidistrict Litigation for Over A Year

Nokia Corp., et al. v. AU Optronics Corp. (AUO), et al., MDL No. 1827 (N.D. Cal. July 2011), orders arbitration on the basis of reasoning that is noteworthy for the litigation of international disputes.  Nokia’s complaint alleges a price-fixing conspiracy by suppliers of liquid crystal display (LCD) panels.  AUO asserted, as its fifty-second affirmative defense:  To the extent Nokia … Continue Reading

Second Circuit Requires Arbitrator To Detemine Statute of Limitations Despite Specific Reference in Contracts Invoking New York Law and Procedure and Despite New York Law That the Issue Is For the Court, Not the Arbitrator; Conflict with New York’s Highest Court Apparent

Bechtel Do Brasil Constucoes LTDA., et al. v. UEG Araucaria LTDA, 10-0341-cv (2d Cir. Mar. 2011), decides whether, under federal arbitration law of the FAA as well as specific New York law principles, the court or arbitrator decides a statute of limitations defense. The decision holds that the arbitrator decides the issue given the language … Continue Reading

New York Federal Court Confirms that Issue of Joinder/Consolidation Is for Arbitrator, Not the Court, Notwithstanding Stolt-Nielsen

In Safra Nat’l Bank (SNB) v. Penfold Investment Trading, Ltd., 10 Civ. 8255 (S.D.N.Y. Apr. 2011),  the plaintiff sought an injunction to enjoin a AAA arbitration and sever Penfold’s separate claims into separate arbitration proceedings.  Each defendant was allegedly induced to purchase an investment security by the SNB broker.  The arbitration agreement apparently did not … Continue Reading

New York Federal Court Enforces Forum-Selection-Clause Requiring Enforcement of Arbitral Award in Bulgaria; Specifically Targeted Evidence of Corruption Required and Not Proferred

Zeevi Holdings Ltd. v. Republic of Bulgaria, No. 09 Civ. 8856 (S.D.N.Y. Apr. 2011), decides whether a party with a valid arbitral award may invoke the provisions of the New York Convention to enforce the award in the U.S. or rather must comply with the forum-selection clause of the underlying agreement, which the Court here … Continue Reading

Fifth Circuit Grants and Then Withdraws Mandamus, But New York Convention Removal By Non-Defendant Still Improper

The Fifth Circuit’s decisions in In re Chrystal Power Co. Ltd, No. 11-40115 (5th Cir. 21 March 2011), on rehearing (16 May 2011), address whether mandamus lies for a District Court order erroneously permitting removal of a case to federal court under the New York Convention, as codified in 9 U.S.C. secs. 201, et seq. Crystal … Continue Reading

Canada Rebuffed In Effort To Dismiss Claims Against It on Forum Non Conveniens Grounds

Cruise Connections v. Attorney General of Canada, Civil Action No. 08-2054 (D.D.C.  15 Feb. 2011), is the decision on remand from the D.C. Circuit Court of Appeals, 600 F.3d 661 (D.C. Cir. 2010). The D.C. Circuit opinion had ruled the District Court had jurisdiction over Canada by reason of the commercial activity exception to the … Continue Reading

U.S. Supreme Court’s AT&T Mobility Decision Holds that FAA Preempts State Law Prohibition on Arbitration Clause Preclusion of Class-wide Arbitrations

We recently reported on the Second Circuit’s decision in  In re: American Express Merchants’ Litigation, Dkt. No. 06-1871-cv (2d Cir. Mar. 2011), in which the Court of Appeals revisited the issue of whether contractual prohibition of arbitrating federal antitrust claims as class actions was valid under the Federal Arbitration Act (FAA).  The Court of Appeals held that the waiver was invalid. Enter … Continue Reading

On Remand from Supreme Court, Second Circuit Adheres To View that Waiver of Class Action Treatment in Antitrust Arbitration Is Invalid

Last year, in the antitrust litigation brought by merchants against American Express (Amex), the Second Circuit Court of Appeals decided that (1) the question of the enforceability of the class action waiver provision was properly decided by the court rather than the arbitrators, and (2) the class action waiver provision was unenforceable under the Federal … Continue Reading

Denial of Section 1782 Discovery Based on District Court’s Discretion Highlights Differences in Judicial Approaches

In re Application of Caratube, 10-0285 (D.D.C. 2010) [730 F.Supp. 2d 101] (In re Caratube op on Reconsideration) merits a short discussion in light of our posting on the Third Circuit’s  decision concerning Chevron’s § 1782 discovery efforts.  Caratube involved a § 1782 petition by the oil company directed at persons and entities in the U.S., … Continue Reading

New York’s Highest Court Keeps A Crack in the Door: Overturns Arbitration Award on Grounds Suspiciously Akin To “Manifest Disregard”

We have followed the door closing by the federal courts in essentially shutting out the means of challenging arbitral decisions on the basis of “manifest disregard” of the law (see the discussion of the questionable vitality of the “manifest disregard” standard in our e-book, International Practice: Topics and Trends).  (See also our blog discussions of … Continue Reading

Second Circuit: It’s the Court, Not the Arbitrator, Who Determines Contract Formation Issue of Whether There Exists An Agreement To Arbitrate

In Dedon GmbH, et al. v. Janus et Cie, 10-4331-cv (2d Cir. Jan. 2011) (unpublished), the Second Circuit addressed the argument that it was the arbitral panel and not the court that was to address its own jurisdiction. The Court of Appeals issued a short but important reminder that, in the Second Circuit at least, … Continue Reading

Fourth Circuit Rules that Parties’ Agreement, Which Under U.S. Law Would Be Read To Include a Permissive Grant of Jurisdiction in South Carolina, Requires an Exclusively UK Forum Despite South Carolina Statute Prohibiting Exclusive Forum Clauses

Albermarle Corp., et al. v. AstraZeneca UK Ltd., No. 10-100 (4th Cir. 8 Dec. 2010), addressed the role of drafting in the interpretation of choice of law and choice of forum clauses, which we discuss in our e-book International Practice: Topics and Trends.  Albermarle involved an international agreement containing an English choice of law clause … Continue Reading

Seventh Circuit Rejects Argument that Breach of Forum-Selection Clause Entitles Party To Recover Attorney’s Fees, Citing “American Rule” Against Recovery of Fees Absent An Exception

In Fednav Int’l Ltd. v. Continental Ins. Co., No. 08-2650 (7th Cir. 1 Nov. 2010), the Seventh Circuit addressed the question whether a party could turn a forum battle into a breach of the governing contract’s forum selection clause so as to be entitled to recover the attorney’s fees expended to fight the forum battle.  … Continue Reading

Ninth Circuit Rules that Congress’s Use of the Phrase “Right To Sue” Precluded Parties from Agreeing To Arbitrate Any Dispute

Our most recent post, on 11/12/10, analyzed the First Circuit’s efforts to uphold private parties’ freedom to contract with each other concerning the forum and law to govern their international dispute.  By way of contrast, a recent decision by the Ninth Circuit Court of Appeals, Greenwood, et al. v. CompuCredit Corp, et al., No. 09-15906 … Continue Reading

Court of Appeals Finds Appeal Moot Based on Mid-Litigation Arbitral Ruling; Pendent Appellate Jurisdiction Also Found Lacking

In Invista S.A.R.L., et al. v. Rhodia, S.A., No. 09-2514 (3d Cir. 10/25/10), the Third Circuit reviewed an international arbitration to resolve the question of how is bound by an arbitration clause. The suit arose out of claims by Invista affiliates that the only way Rhodia SA would have been able to compete with Invista is by a … Continue Reading

International Arbitral Award Collectible Against Alter-Ego Despite Bankruptcy; Creditor Holds the Claim, Not the Trustee

 In Ahcom, Ltd v. Hendrik Smeding, et al., No. 09-16020 (9th Cir. 10/21/10), the Ninth Circuit addresses an issue that arises with some frequency in international practice (both litigation and arbitration):  the extent to which a creditor, holding an international arbitral award, may sue the alleged alter-ego of the debtor/defendant. Does the claim belong to all … Continue Reading

Montreal Convention Limits Carrier Liability Despite Party’s Claim of Stipulated Variance; District Court’s Reliance on Uncertified, Self-Translated Documents Upheld

Treaties and conventions are one of the backbones of our system of international cooperation and comity.  The Eleventh Circuit, in Eli Lilly and Co. v. Air Express Int’l USA, Inc., et al., No. 09-12725 (11th Cir. 8/23/10), addresses the evolution of one of those, applicable to limitations on liability for damage to air cargo.  The … Continue Reading

New York, like the U.S. Supreme Court, Confirms Strict Limitations on a Party’s Ability To Expand the Grounds To Appeal an International Arbitral Award and holds that this Issue Is Likely Left to the Arbitrators, Not a Court, To Decide.

The U.S. Supreme Court’s seminal decision in Hall Street Assocs, LLC v. Mattel, Inc., 552 U.S. 576 (2008), held that the “manifest disregard” of law standard cannot serve as a ground for overturning an arbitral award under the Federal Arbitration Act (FAA); that is, parties are limited to the narrower grounds set forth in the … Continue Reading

How To Fund International Litigation? Contrasting “Liberal” Europe with the “Conservative” U.S.?

International controversies, like domestic ones, need to be paid for.  One method of financing litigation is to obtain funds for either costs, or fees, or both, not from the client or from the law firm (e.g., in a contingency arrangement) but from independent sources altogether.  This is being referred to today as third-party financing.   It … Continue Reading
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