Commercial Arbitration

United States

Michael P Lennon, Jr and Ryan E Bull

Baker Botts LLP

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

    The United States ratified the New York Convention on 30 September 1970, and it entered into force on 29 December 1970. The United States made two reservations: it only applies the convention to awards made in other contracting states, and it only applies the convention to disputes arising from legal relationships, whether contractual or not, that are considered commercial under US law.

  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

    Yes, for example, the United States is a party to: the Washington (ICSID) Convention, which provides a self-executing enforcement mechanism; the Inter-American Convention on International Commercial Arbitration (the Panama Convention), which provides for the general enforceability of awards rendered in member states; and the Energy Charter Treaty, which requires member states to make provisions for ‘effective enforcement’ of awards resulting from the ECT’s dispute resolution process.

  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?

    The Federal Arbitration Act, 9 USC sections 1 et seq (the FAA), governs commercial arbitrations related to interstate and foreign commerce or maritime transactions. The FAA, which is not based on the Model Law, was adopted in 1925 to foster a national policy promoting arbitration.

    Chapter 1 of the FAA governs domestic, interstate arbitrations and contains general provisions pertaining to the arbitral process, such as appointing arbitrators and subpoenaing evidence. Chapter 2 of the FAA implements the New York Convention. Chapter 2 will not apply unless the parties’ relationship has a sufficient connection to a foreign state. 9 USC section 202. Chapter 3 of the FAA implements the Panama Convention. The general framework in chapter 1 will also apply to international arbitrations governed by chapters 2 and 3 so long as its provisions are not inconsistent with the relevant conventions.

    Some states have arbitration statutes that purport to govern international arbitrations occurring in those states. The FAA pre-empts state law to the extent that it conflicts with the FAA, limiting state law to a gap-filling role.

  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

    The American Arbitration Association is based in the US. The AAA administers international arbitrations under its commercial rules, and also maintains the International Centre for Dispute Resolution (ICDR), which administers international arbitrations and acts as an appointing authority under its International Dispute Resolution Procedures.

    JAMS is a large alternative dispute resolution centre that also acts as an appointing authority. JAMS International administers cross-border disputes and is based in New York and Rome. JAMS also has a strong working relationship with the Hong Kong International Arbitration Centre.

  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?

    Yes, parties can have a foreign arbitral institution administer an arbitration seated within the US.

  6. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?

    There are no specialist arbitration courts in the United States. Arbitration issues may be raised in both federal and state courts. However, matters pertaining to arbitration agreements under the New York or Panama Conventions are generally removable to federal court. 9 USC sections 205, 302. The federal judiciary is generally familiar with US law relating to international arbitration. Occasionally, federal courts will develop conflicting rules on arbitration issues because of the division of the intermediate appellate court system into 12 separate circuits.

    7. Agreement to arbitrate

  7. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?

    Written agreements to arbitrate are ‘valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’ 9 USC section 2. Although the FAA governs the effect of arbitration agreements, non-arbitration law usually governs whether an agreement has been formed and how that agreement should be interpreted.

    Under the FAA, parties can agree to submit future disputes to arbitration if they arise from their commercial contract or maritime transaction. They can also agree to arbitrate a dispute that has already arisen from such contracts or transactions.

    Unlike the New York Convention, the FAA does not explicitly require that an arbitration agreement be signed or contained in an exchange of letters. Thus, US courts will uphold a written arbitration agreement so long as parties have demonstrated consent to the agreement by words or conduct. International arbitration agreements, however, must meet the New York Convention’s form requirements as specified in chapter 2 of the FAA.

  8. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?

    Generally, there are no subject matter limitations to arbitrability under the FAA, except criminal law, which remains exclusively the province of national courts.

    The Arbitration Fairness Act has twice been introduced in Congress. If passed, the Act would prohibit agreements that require arbitration in employment, consumer, franchise and civil rights disputes. The applicability to and implications for international arbitration are widely debated in academic and practice circles.

  9. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?

    Third parties can be bound by an arbitration clause under general principles of agency and contract law. Arthur Andersen LLP v Carlisle, – US –, 129 S Ct 1896 (2009). In Carlisle, a case involving a domestic arbitration, the Supreme Court recognised that ‘‘traditional principles’ of state law allow [enforcement] against non-parties to the contract through ‘assumption, piercing the corporate veil, alter ego, incorporation by reference, third-party beneficiary theories, waiver and estoppel.’’ Id at 1902. At least one appellate court subsequently has observed that Carlisle’s principles are ‘relevant for [cases] governed by the New York Convention.’ Todd v Steamship Mut Underwriting Ass’n (Bermuda) Ltd, 601 F3d 329, 334-35 (5th Cir 2010). Prior to Carlisle, federal courts had applied both federal common law and the law governing the arbitration agreement to decide issues surrounding the power of third parties to invoke (or be bound by) arbitration agreements.

  10. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?

    As a general rule, when parties have clearly agreed to arbitrate their dispute, the issue of consolidation is ‘a matter of procedure’ that should be left to the arbitrator. We note, however, that the United States Supreme Court recently has held that an arbitrator cannot order parties to participate in a class arbitration when the arbitration agreement is silent on the question of class arbitration. See Stolt-Nielsen SA v AnimalFeeds Int’l Corp., 129 S Ct 2793 (2009).

  11. 11.Groups of companies
    Is the “group of companies doctrine” (or any other method of piercing the corporate veil) recognised in your jurisdiction?

    US courts are reluctant to ignore corporate formalities, but may pierce the corporate veil, for example, when the parent corporation ‘dominates and controls the subsidiary’ or where recognising corporate formalities would perpetuate fraud or injustice. These are fact-intensive, case-by-case inquiries.

  12. 12.Separability
    Are arbitration clauses considered separable from the main contract?

    Under federal law, arbitration clauses are separable from the main contract under the ‘severability doctrine.’ As applied in the US, the doctrine provides that, unless the parties otherwise intend, ‘arbitration clauses as a matter of federal law are ‘separable’ from the contracts in which they are embedded, and that where no claim is made that fraud was directed to the arbitration clause itself, a broad arbitration clause will be held to encompass arbitration of the claim that the contract itself was induced by fraud.’ Prima Paint Corp v Flood & Conklin Mfg Co, 388 US 395, 402 (1967) (footnote omitted).

  13. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?

    The FAA does not expressly address competence-competence. However, as a matter of federal common law, the existence, validity and, in principle, substantive scope of an arbitration agreement will be decided by courts unless the parties have ‘clear[ly] and unmistakabl[y]’ agreed to leave such questions to the arbitral tribunal. First Options v Kaplan, 514 US 938 (1995). Once it is determined that a dispute is covered by a valid arbitration agreement, procedural questions or claims of ‘waiver, delay, or a like defense to arbitrability’ are left for arbitral determination. Howsam v Dean Witter Reynolds, 537 US 79, 84 (2002).

    In deciding whether parties have ‘clearly and unmistakably’ agreed to vest arbitrators with competence to decide the scope of an arbitration agreement, US courts are not entirely consistent. Some courts have held that an agreement to arbitrate ‘all disputes’ was a clear and unmistakable reflection of intent to arbitrate issues of arbitrability. See, eg, Shaw Grp Inc v Triplefine Int’l Corp, 322 F3d 115, 120 (2d Cir 2003). Also, courts have concluded that the incorporation of institutional rules granting arbitrators the power to consider challenges to their jurisdiction demonstrates a clear intent to leave questions of arbitrability to the arbitrators. See, eg, Fallo v High-Tech Inst, 559 F3d 874 (8th Cir 2009) (AAA Rules); Qualcomm Inc v Nokia Corp, 466 F3d 1366 (Fed Cir 2006) (same). That approach is not uniform, however. See Telenor Mobile Commc’ns AS v Storm LLC, 524 F Supp 2d 332, 350 (SDNY 2007), aff’d, 584 F3d 396 (2d Cir 2009) (finding that incorporation of the UNCITRAL Arbitration Rules – providing that the ‘tribunal shall have the power to rule on objections that it has no jurisdiction’ – did not satisfy First Options’s clear-statement rule).

  14. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?

    If parties anticipate that an arbitral award may need to be enforced in the US, they should consider including a provision in their arbitration agreement permitting courts to enter judgment on a final award.

  15. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?

    Institutions administering arbitrations seated in the US continue to report constant or growing numbers of international arbitration filings. Given the nature of ad hoc arbitration, it is difficult to estimate how many ad hoc arbitrations are conducted in the US or to compare that figure with administered arbitrations.

  16. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.

    There are no restrictions on multi-party arbitration agreements. There are no particular drafting points to be gleaned from the FAA, for example, in relation to appointment of arbitrators. Drafters will always be guided by the need to prepare an arbitration agreement that gives substantive and procedural fairness to all parties.

    17. Commencing the arbitration

  17. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?

    The FAA does not provide specific deadlines or procedures for commencing an arbitration. Consequently, the terms of the parties’ arbitration agreement and applicable arbitration rules will determine which steps the parties must take to commence an arbitration, such as whether they must first engage in negotiations or follow a particular filing procedure.

    18. Choice of Law

  18. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

    Where the parties specify a governing law, their choice generally will be respected. Where parties have failed to specify a governing law, US courts have ‘almost uniformly’ held that arbitrators have broad freedom to determine the applicable choice of law rules and substantive law. Born, International Commercial Arbitration 2115 (2009); see also ICDR Rules article 28(1) (requiring the tribunal to ‘apply such law(s) or rules of law as it determines to be appropriate’). If parties intend for one body of law to govern their entire relationship, ie all claims whether in contract or tort, including fraudulent inducement, they should use broad language in the choice of law clause.

    19. Appointing the tribunal

  19. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?

    The FAA provides that the ‘method of naming or appointing an arbitrator or arbitrators’ provided in the parties’ agreement ‘shall be followed.’ 9 USC section 5. Laws or professional codes of conduct may prevent certain individuals, such as serving judges, from accepting appointments. Born, International Commercial Arbitration 1449 (2009).

  20. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?

    The FAA does not restrict non-nationals from acting as arbitrators. Article 2 of the Panama Convention specifies that ‘[a]rbitrators may be nationals or foreigners.’ Arbitrators are not exempt from US immigration laws.

  21. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?

    If the parties’ appointment mechanism fails for any reason, the FAA authorises courts to appoint the necessary number of arbitrators according to the parties’ agreement, upon the application of one or more parties. If the agreement does not address procedures for appointing an arbitrator, the court will appoint a sole arbitrator using its discretion. The court can also make an appointment when vacancies arise.

  22. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

    The FAA does not address the issue of arbitrator immunity. However, the clear trend among the federal courts of appeal favours granting immunity to an arbitrator with respect to claims that arise out of decisional acts.

  23. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

    Unlike some national arbitration acts, the FAA is silent on whether arbitrators can secure payment of their fees. Arbitral institutions administering arbitrations in the US routinely collect deposits from parties to cover the fees of the tribunal and other costs of the arbitration.

    24. Challenges to arbitrators

  24. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?

    Challenges to arbitrators are governed in the first instance by the applicable procedural rules. The FAA itself does not specify a procedure for challenging arbitrators pending an arbitration. Courts generally do not hear challenges to arbitrators on an interlocutory basis. See, eg, Gulf Guar Life Ins Co v Conn Gen Life Ins Co, 304 F3d 476, 490 (5th Cir 2002). In this respect, the US follows the minority position by only allowing parties to challenge an arbitrator once a final award has been rendered. Born, International Commercial Arbitration 1566 (2009). An arbitrator will be removed in an interlocutory proceeding only in the most extreme case. Id at 1568-69.

    Arbitration institutions may take account of the IBA Guidelines. Federal courts have, in some instances, looked to the IBA Guidelines to determine the standard of an arbitrator’s behaviour with respect to the parties. See Applied Indus Materials Corp v Ovalar Markine Ticaret ve Sanayi, AS, No. 05-cv-10540, 2006 WL 1816383, at *8 (SDNY 28 June 2006) aff’d, 492 F3d 132 (2d Cir 2007). In addition, with respect to arbitrations seated in the US, the ‘evident partiality’ standard for vacatur of an arbitral award is an important background concept.

    25. Interim relief

  25. 25.Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

    The FAA does not expressly grant courts broad power to issue provisional remedies when parties have chosen to submit their disputes to arbitration. Unless the parties’ agreement or the applicable rules of arbitration provide otherwise, courts and the tribunal have concurrent jurisdiction to consider requests for provisional relief.

    US practice is mixed regarding court-ordered interim relief in international arbitration. Some courts have concluded that the New York Convention only allows courts to compel arbitration before an award is issued and therefore refuse to consider requests for interim relief in aid of a pending arbitration. The principal line of authority for this position began with McCreary Tire & Rubber Co v CEAT, SpA, 501 F2d 1032 (3d Cir 1974). Other courts have concluded that both the New York Convention and the FAA permit courts to issue prejudgment attachments or preliminary injunctions in support of arbitration. In this respect, some US lower courts have issued provisional relief – including attachments and seizures of vessels – in support of arbitrations seated in foreign countries.

    US courts may grant anti-suit injunctions, but they are generally considered extraordinary relief, and concerns of comity will counsel restraint whenever a court is asked to enjoin parallel litigation in a foreign country. US courts may issue an injunction in support of an arbitration agreement if the parties to the arbitration agreement are the same as those in the parallel litigation and the resolution of the case before the court is dispositive of the foreign action. Paramedics Electromedicina Comercial Ltd. v GE Med Sys Info Techs Inc, 369 F3d 645 (2d Cir 2004). Beyond the two basic conditions presented in Paramedics, courts will sometimes require a showing of irreparable injury or other factors, such as a violation of US public policy, to issue an anti-suit injunction.

  26. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?

    The FAA is silent as to whether courts or tribunals can order security for the legal fees and costs of the prevailing party. Depending on the applicable arbitration agreement and procedural rules, arbitrators may have jurisdiction to entertain an application for security for costs, and US courts have affirmed prejudgment security measures issued by arbitrators. See, eg, Banco de Seguros del Estado v Mut Marine Offices, Inc, 230 F Supp 2d 362, 372-75 (SDNY 2002). In addition, US courts have applied article VI of the New York Convention to require posting of sufficient security pending resolution of petitions to vacate arbitral awards under the convention.

    27. Procedure

  27. 27.Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (e.g. general duties of the tribunal and/or the parties)?

    The FAA does not provide an elaborate set of procedures for the conduct of arbitrations, leaving the parties and tribunal free to adapt the arbitration procedure to suit their needs. Courts applying the FAA generally require arbitrators to provide a ‘fundamentally fair hearing … meet[ing] the minimal requirements of fairness — adequate notice, a hearing on the evidence, and an impartial decision by the arbitrator.’ Slaney v Int’l Amateur Athletic Fed’n, 244 F3d 580, 592 (7th Cir 2001). Importantly, these standards do not compel arbitrators to follow particular rules of evidence or to consider all the evidence; the arbitrator fulfils his obligations by providing each party ‘an adequate opportunity to present its evidence and arguments.’ Generica Ltd v Pharmaceutical Basics Inc, 125 F 3d 1123, 1130 (7th Cir 1997).

  28. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?

    Section 4 of the FAA provides that an aggrieved party can petition a federal court that would otherwise have jurisdiction over the dispute and the parties for ‘an order directing that such arbitration proceed in the manner provided for in such agreement.’

    9 USC section 4. Section 4 itself contains a summary procedure for obtaining an order requiring the parties to proceed with arbitration according to the terms of their agreement. There is no express default provision in the FAA, leaving the issue to the parties’ agreement, default provisions of the applicable rules and tribunal discretion.

    A party that does not participate in an arbitration still may be able to challenge the resulting award on grounds such as a failure to receive notice of the proceeding, or lack of jurisdiction over the dispute. See, eg, Choice Hotels Int’l Inc v SM Prop Mgmt, LLC, 519 F3d 200, 208 (4th Cir 2008) (award not enforced when arbitrator proceeded with merits hearing even though parties had not been properly served).

  29. 29.Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Commercial Arbitration generally be taken into account?

    A tribunal may summon witnesses and ‘in a proper case’ require witnesses to produce books, records or documents ‘which may be deemed material as evidence.’ 9 USC section 7. The FAA empowers the court of the district in which the arbitrators are sitting to enforce the summons. Section 10 of the FAA authorises courts to vacate an award if the arbitrator ‘refuse[s] to hear evidence pertinent and material to the controversy.’

    Most other evidentiary questions are left to the parties’ agreement, the applicable rules of arbitration, and the tribunal’s discretion. For example, Article 20(6) of the ICDR Rules provides that the ‘tribunal shall determine the admissibility, relevance, materiality and weight of the evidence offered by any party.’ Witness statements are the norm for taking evidence in international arbitrations seated in the US, but are by no means universally required. Though not binding, it is not uncommon for arbitrators to consider the IBA Rules on the Taking of Evidence in International Commercial Arbitration as a guide.

  30. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?

    Section 7 of the FAA allows arbitrators to obtain witness testimony and documents by serving a summons ‘in the same manner as subpoenas to appear and testify before the court.’ 9 USC section 7. Where a witness fails to comply with a summons issued in this manner, the district court in the district where the tribunal is sitting has authority to compel compliance. Federal courts are split regarding the scope of section 7: some have held that it only permits production of evidence at an evidentiary hearing, while others have held that it allows pre-hearing discovery at the request of a party to the arbitration, but only in cases where the party demonstrates a need for the requested materials. See Born, International Commercial Arbitration 1924-26 (2009). Courts generally only honour these requests in ‘exceptional circumstances,’ such as before the arbitral tribunal has been constituted.

    Another means by which a US court may assist a tribunal in obtaining evidence is 28 USC section 1782, which authorises courts to order discovery ‘for use in a proceeding in a foreign or international tribunal.’ In 2004, the Supreme Court adopted an expansive meaning of ‘international tribunal.’ See Intel Corp v Advanced Micro Devices Inc, 542 US 241 (2004). This decision has led some, but not all, lower courts to order discovery in aid of arbitral tribunals pursuant to section 1782.

  31. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

    Parties are free to expressly provide arbitrators with the power to control discovery (or limit their authority to conduct discovery), and the applicable arbitral rules may also give the arbitrators considerable discretion in this regard. At a minimum, section 7 of the FAA allows arbitrators to summon witnesses and to have witnesses produce ‘material’ evidence at the hearing in ‘proper case[s].’ Courts have found that tribunals international arbitrations seated in the US have the inherent power to order disclosure from the parties, including electronic discovery, subject to the parties’ contrary agreement. US courts are divided on whether arbitrators can compel pre-hearing document discovery from third-parties.

  32. 32.Hearings
    Is it mandatory to have a final hearing on the merits?

    The FAA itself does not require a final hearing on the merits, so parties can choose to forego a hearing if they wish to have a dispute decided on their memorials alone. A tribunal’s refusal or failure to hold a hearing when requested, or to postpone the final hearing on sufficient cause shown, has been cited by courts as grounds for vacating an award under the FAA.

  33. 33.Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

    If the parties and tribunal agree that it would be more convenient to hold a hearing outside the seat of arbitration, courts likely would respect the parties’ autonomy in designing their arbitral procedures to suit their needs. Moreover, none of the FAA’s grounds for vacatur appear to apply if the parties and the tribunal agree to hold hearings or meetings outside the seat of arbitration. See 9 USC section 10(a).

    34. Award

  34. 34.Majority decisions
    Can the tribunal decide by majority?

    Although the FAA does not expressly permit awards to be issued by a majority of arbitrators, federal courts enforce arbitration awards rendered by a tribunal’s majority.

  35. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

    Because the FAA contains no express limitations on the types of relief, the parties’ agreement will determine the availability of particular relief. US courts recognise that ‘arbitrators have traditionally enjoyed broad leeway to fashion remedies.’ Anderman/Smith Co v Tenn Gas Pipeline Co, 918 F2d 1215, 1219 (5th Cir 1990). When the parties’ ‘agreement neither requires nor bars particular remedies, the arbitrator’s discretion is ‘at its zenith.’’ Kraft Foods v Office & Prof’l Emps Int’l Union, 203 F3d 98, 102 (1st Cir 2000).

  36. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

    The FAA permits dissenting opinions, but the practice is not especially frequent. It may be expected that an arbitrator who does not sign an award would issue a statement of reasons, ie, a dissenting opinion, for not doing so. See, eg, ICDR Rules, article 26(2) (requiring statement of reasons for the absence of an arbitrator’s signature).

  37. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?

    The FAA does not contain any express form requirements, but there must be a written award in order to submit a copy when a party seeks to confirm the award under 9 USC section 13(b).

  38. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?

    A party seeking to confirm an award covered by the New York Convention must apply to a court within three years after the award is made. 9 USC section 207. Under the FAA, parties must provide notice of a motion to vacate, modify, or correct an award to the adverse party within three months of the award being filed or delivered. 9 USC section 12.

    39. Costs and interest

  39. 39.Costs
    Are parties able to recover fees paid and costs incurred? Does the “loser pays” rule generally apply in your jurisdiction?

    The FAA does not address how parties should allocate the costs of the arbitration and parties’ legal fees. As a general rule in US proceedings, parties bear their own legal fees and costs. In the international arbitration context, however, US courts typically respect awards of costs and fees, especially where the applicable arbitral rules and law so provide. Born, International Commercial Arbitration 2492-93 (2009).

  40. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

    The FAA does not prohibit the award of interest. US courts generally enforce awards of interest that are made in accordance with the governing law of the arbitration agreement. The interest rate will vary depending on whether the party is seeking pre- or post-judgment interest and whether the parties’ contract is governed by federal law (which provides for an indexed rate of post-judgment interest, see 28 USC section 1961) or state law.

    41. Challenging awards

  41. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

    The FAA provides that arbitration awards are presumptively binding, with only limited grounds for vacatur in both the domestic and international contexts. 9 USC sections 10, 207. Confirmation of an arbitration award is meant to be a summary proceeding. Yusuf Ahmed Alghanim & Sons WLL v Toys ‘R’ Us Inc, 126 F3d 15, 23 (2d Cir 1997).

    Grounds for challenge are: ‘(1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehaviour by which the rights of any party have been prejudiced; or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.’ 9 USC section 10. Parties cannot by agreement expand the courts’ powers of review under the FAA. Hall Street Assoc LLC v Mattel, Inc, 552 US 576, 588 (2008).

    When considering applications to enforce international arbitral awards, US courts consistently conclude that the New York Convention’s grounds for challenging the recognition and enforcement of an award are exclusive and that they should be construed narrowly. However, if the arbitration was seated in the US, courts will assess a petition to confirm an award under both the New York Convention and the FAA’s grounds for vacatur. See Yusuf Ahmed Alghanim & Sons WLL v Toys ‘R’ Us Inc, 126 F3d 15 (2d Cir 1997).

  42. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?

    The Second, Ninth, and Sixth Circuits consider an arbitrator’s manifest disregard of law an additional ground to vacate an award. The Fifth and Eleventh Circuits do not recognise this ground following the Supreme Court’s decision in Hall Street Associates.

  43. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

    There is no clear law on this question. Presumably, as a matter of party autonomy, sophisticated commercial parties could agree that they will not seek to vacate, modify or correct an award, or could otherwise limit their rights of review. An agreement to restrict further the already limited judicial review available under the FAA would seem to be consistent with the FAA’s policy to limit judicial intrusion into the arbitral process, but the question is not yet settled in US law. In dicta, a Fifth Circuit panel implied that it would consider a claim that the parties’ broad waiver of any right of appeal could prevent the challenging party from seeking vacatur. Bettis Grp Inc v Transatlantic Petroleum Corp, Nos 01-20377, 01-20379, 2002 WL 31933189 (5th Cir 23 Dec 2002).

    44. Enforcement in your jurisdiction

  44. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

    In accordance with the express terms of the New York Convention, US courts generally refuse to enforce arbitration awards that were set aside by courts of the arbitral seat. See, eg, TermoRio SA ESP et al v Electranta SP, 487 F3d 928 (DC Cir 2007) (affirming dismissal of arbitration award made in Bogota that was annulled by Colombian courts). However, at least one district court recognised an award made in Egypt under the laws of Egypt, even though it had been nullified by the Egyptian court designated to review arbitral awards. In re Arbitration between Chromalloy Aeroservs & Arab Republic of Egypt, 939 F Supp 907 (DDC 1996).

  45. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

    There is a long-standing tradition and trend in favour of enforcing awards in the US. Recent decisions do not alter this trend.

  46. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

    The United States follows the general rule that a sovereign or state entity waives its immunity by agreeing to arbitrate. The FAA specifically states that an arbitration award shall not be refused enforcement based on the Act of State doctrine, which prevents courts from reviewing the acts of foreign governments done within their territories. See 9 USC section 15.

    It is more likely that a US court will find that a sovereign or state entity is immune from execution, meaning that, even if an award is enforceable, the adverse party might not be able to collect the state entity’s assets located in the United States. The Foreign Sovereign Immunities Act permits execution against a foreign state ‘in aid of a judgment based on an order confirming an arbitral award entered against the foreign state,’ but only with respect to sovereign property used for commercial purposes in the United States. A state may therefore be able to resist execution of an award in property held for non-commercial purposes, even when it has waived its immunity.

    See 28 USC section 1605(a)(2). A recent federal decision from the District of Columbia required a foreign state to post a bonding pending resolution the foreign state’s petition to vacate an arbitral award rendered against it in the United States. See Republic of Arg v BG Grp PLC, Civil No 08-485, F Supp 2d 2010 WL 2264957, at *2 & n6 (DDC 7 June 2010). That decision was vacated, however, after the court denied the petition on the merits before the bond payment was due.

    47. Further considerations

  47. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?

    The FAA is silent on the issue. Courts are generally sceptical of claims that arbitral proceedings are inherently confidential, but they will typically enforce parties’ confidentiality agreements. Born, International Commercial Arbitration 2263 (2009). As a general rule, however, judicial proceedings are open to the public, and federal courts may require a particularised showing of need before sealing proceedings that relate to an otherwise confidential arbitration.

  48. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?

    In the absence of a confidentiality agreement, lower courts have concluded that parties could not resist disclosures of arbitration-related documents in subsequent litigation. See United States v Panhandle E Corp, 118 FRD 346 (D Del 1988). In addition, a confidentiality agreement will not ordinarily stop a party from complying with legal duties, such as the disclosure requirements of the Securities and Exchange Commission. Parties should be aware that the FAA requires the arbitration agreement and award to be included in any petition to enforce the award. 9 USC section 13. Absent an order sealing the record or particular documents within it, these filings will become part of the public record. Similarly, exhibits filed by a party in judicial proceedings will also become part of the public record in the absence of an order to seal the record or particular documents within it.

  49. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

    Unlike some other national arbitration acts, the FAA only addresses the duties of arbitrators obliquely vis-a-vis the grounds for vacating an award. In the US, the ‘Code of Ethics for Arbitrators in Commercial Disputes’ – as revised in 2004 by the American Arbitration Association (AAA) and American Bar Association (ABA) – provides an influential source of ethical standards for arbitrators. The AAA requires arbitrators chosen from its panel to adhere to the AAA/ABA Code of Ethics. Additional ethical guidelines can be found in the International Bar Association’s Rules of Ethics for International Arbitrators and, in the case of legal practitioners acting as arbitrators, the relevant standards of professional conduct established by their state bar associations.

    Notably, the AAA/ABA’s revised 2004 Code countered the traditional US practice by specifying that the duties of independence and impartiality apply both to presiding and party-appointed arbitrators. If parties agree to revert to the traditional US practice, the 2004 Code permits party-appointed arbitrators to be ‘predisposed’ to the appointing party but requires them to otherwise ‘act in good faith and with integrity and fairness.’ Cannon X, section A(1). They must also disclose to the parties and to the other arbitrators all interests or relationships that neutral arbitrators must disclose. Cannon X, section B(1).

  50. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?

    In general, parties might expect a more expansive discovery process in a proceeding involving American arbitrators.

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