Professor S.I. Strong, Senior Fellow at the University of Missouri’s Center for the Study of Dispute Resolution wrote an excellent article about the international implications of class arbitration. The article is entitled “The Sounds of Silence: Are U.S. Arbitrators Creating Internationally Enforceable Awards When Ordering Class Arbitration in Cases of Contractual Silence or Ambiguity?” and appears at 30 Michigan Journal of International Law 1017 (2009).
Here is an excerpt:
The expansion of class arbitration into the international realm has not gone unchallenged. Instead, international defendants have already shown signs of their intent to fight tooth and nail against the development of international class arbitration, just as their U.S. counterparts did in the early days of domestic class arbitration. Many of the defenses to international class arbitration are the same as those used in domestic matters, and arbitrators are able to rely on a large and growing body of existing jurisprudence when considering those issues. However, the cross-border nature of international class arbitration gives rise to unique challenges, many of which have not yet been considered in the literature.
For reasons that will be discussed more fully below, it is anticipated that (1) most international class arbitrations will be seated in the United States, at least for the foreseeable future, and (2) vigorous opposition to international class arbitration will arise at the international enforcement stage. The battle will be fought particularly fiercely in cases where the arbitration agreement is silent or ambiguous about the possibility of class treatment, with losing defendants arguing that the decision to proceed as a class was presumptively improper in the absence of the parties’ explicit agreement to that particular type of procedure.
This sort of challenge will most likely be asserted as a procedural objection under Article V(1)(d) of the United Nations’ 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), and it is precisely these sort of arguments that will be the focus of this Article.
The article has been cited in papers submitted to the United States Supreme Court in the upcoming case of Stolt-Nielsen SA v. AnimalFeeds Int’l Corp. which is expected to be heard by the Court around December, 2009. You may download the full article here.
Read more about Stolt-Nielsen in our previous posts:
- GUEST-POST: Class and Consolidated Arbitration Under the Federal Arbitration Act: What Issues Will the United States Supreme Court Confront in Stolt-Nielsen, S.A. V. AnimalFeeds Int’l Co.? (August 6, 2009)
- GUEST-POST: The Emergence in the Last Month of an Express Judicial Recognition that Arbitration Clauses Barring Class Relief in Consumer Agreements Are Void (July 28, 2009)
- U.S. Supreme Court Grants Cert to Stolt-Nielsen: Class Action Arbitration Case (June 16, 2009)
- Sonia Sotomayor Meets Posner: Standards of Review for Arbitration Awards After Hall Street (June 2, 2009)
- Dead? Alive? Matter of Opinion? (Dec. 4, 2008)