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Posted March 10, 2009

Experts Discuss Future of International Arbitration

Strong

Attorneys who work and write about international arbitration gathered at the Law School on Feb. 27 to discuss issues surrounding the growing practice.

The symposium, “International Arbitration: A Look to the Future,” was hosted by the J.B. Moore Society of International Law.

Stacie Strong, an associate professor at the University of Missouri School of Law, spoke about international commercial class-action arbitration, which she said can be difficult to research due to its private nature.

While commercial arbitration often goes forward without complications, Strong said class actions present a much more difficult case because they are seen in some countries as a phenomenon exclusive to the United States.

“Civil law jurisdictions dislike representative actions because it violates fundamental precepts about what litigation is — the right of a claimant to assert a cause of action is individual, [that] it is not representative in nature,” Strong said. “Also, defendants have the right to — kind of like in criminal law — defend against individual people. So if you have unnamed claimants, you don’t even know their causes of action, particularly when you start thinking about damages.”

Henry Burnett, a partner with Fulbright & Jaworski, said that while international arbitration appeals to some parties because of the lack of opportunities for appeal, others will not participate for the same reason. He cited a study that asserts that more than 50 percent of Fortune 1000 corporations that don’t resolve disputes by international arbitration abstain because of concerns over having restricted appeal rights.

“Arbitration tribunals don’t always get it right, Burnett said. “In the past it’s an attribute that’s been looked at as a good thing, but now it’s actually coming under some significant pressure.”

Greg Williams, a partner at Hughes Hubbard & Reed, explored the role of nonsignatories, or parties that never signed onto a relevant arbitration agreement or underlying contract

Though it is widely accepted that a party that has not agreed to arbitrate cannot be forced to arbitrate, and arbitration should not be a matter of coercion, Williams said it is not uncommon for nonsignatories to seek to take advantage of an arbitration agreement, or for a signatory to seek to compel a nonsignatory to arbitrate.

• Reported by ashley matthews