ADR Case Law Update

Vol. 20 No. 3

By

Arbitration Clauses in International Investment Treaties

In BG Group PLC v. Republic of Argentina, 2014 WL 838424, __ S. Ct. ___ (2014), the Supreme Court held that in reviewing arbitration awards under a treaty, US courts should apply “threshold” provisions concerning arbitration, as they would for similar provisions in ordinary contracts, and review arbitrator decisions with deference. Treaties, the Court held, are simply contracts between nations and should be treated like any other contract. To read more: http://www.supremecourt.gov/opinions/13pdf/12-138_97be.pdf.

Beneficiary of a Trust Cannot Be Compelled to Arbitrate

In McArthur v. McArthur, 2014 WL 930789 (Cal. Ct. App. 2014), the court addressed whether a nonsignatory beneficiary of a trust could be compelled to arbitrate under the doctrine of delegated authority to consent. Because the beneficiary was not a signatory to the trust instrument and did not attempt to enforce rights in the trust instrument and because there was no applicable statutory scheme, the court held that the beneficiary was not bound by the arbitration agreement. To read more: http://www.courts.ca.gov/opinions/documents/A137133.pdf.

Preclusive Effect of Prior Arbitration Award is Arbitrable

In Employers Ins. Co. of Wausau v. OneBeacon American Ins., 2014 WL 715821 (1st Cir. 2014), the First Circuit, in an issue of first impression, held that when an arbitration award is confirmed by a court order, the preclusive effect of that decision on a subsequent arbitration is arbitrable. The confirmation of an arbitral award by a judge does not change the general rule that preclusion is arbitrable because the federal judgment confirming the award is distinct from the award itself. To read more: http://media.ca1.uscourts.gov/pdf.opinions/13-1913P-01A.pdf.

Order that Does Not Presumptively Stay Proceedings is Not Appealable

In MediVas LLC v. Marubeni Corp., 741 F.3d 4 (9th Cir. 2014), the court held that an order compelling arbitration that does not explicitly stay judicial proceedings is not appealable because it is not a “final decision with respect to an arbitration” under the Federal Arbitration Act. In addition, the court adopted a rebuttable presumption that an order compelling arbitration but not explicitly dismissing the underlying action stays the proceeding pending arbitration. To read more: http://cdn.ca9.uscourts.gov/datastore/opinions/2014/01/27/12-55375.pdf.

Trial Court Abused Discretion in Refusing to Enter Judgment on Mediated Settlement Agreement

In In Re Stephanie Lee, 411 S.W.3d 445 (Tex. 2013), the Texas Supreme Court, in a matter of first impression, held that a trial court abused its discretion by refusing to enter judgment on a mediated settlement agreement in a custody dispute based on a best-interests-of-the-child inquiry. The state statute at issue contains a narrow exception involving family violence, which was not applicable. The court suggests that if the welfare of the child is a concern, the trial court should issue protective and temporary orders and involve a government agency charged with protecting endangered children. To read more: http://www.supreme.courts.state.tx.us/historical/2013/sep/110732.pdf.

Indiana ADR Rules Do Not Apply to Settlement Negotiations without Mediator

In Ewing v. US Bank, NA, 2014 WL 904247 (Ind. Ct. App. 2014), the court dismissed, pursuant to FRCP 12(b)(6), the claim that a party failed to negotiate in good faith in violation of Indiana ADR rules. The trial court did not order the parties to mediation and they did not retain a mediator, the court held, so the ADR rules did not apply to their settlement negotiations. To read more: http://www.in.gov/judiciary/opinions/pdf/03101401cjb.pdf.

J.D. Hoyle is a law clerk with the ABA Section of Dispute Resolution.

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