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Recent Developments in Commercial and Investment Arbitration in North America
The Center on International Commercial Arbitration offered the third of its webinar series on regional approaches to international arbitration with a panel discussion on April 27, 2021 about trends in North America. Leading practitioners and arbitrators discussed the recent developments in commercial and investment arbitration in Canada, Mexico, and the United States. Professor Horacio A. Grigera Naón, Director of the Center, moderated the discussion.
Henri Alvarez QC, Independent Arbitrator, commented on the case Uber Technologies Inc v Heller, 2020 SCC 16, before the Canadian Supreme Court. The Court declared unconscionable the arbitration clause in an adhesion contract signed by Uber with one of its drivers. Tina Cicchetti, Independent Arbitrator, Vancouver Arbitration Chambers, discussed recent trends in the review before Canadian courts of investment arbitration awards following the UNCITRAL Arbitration Rules. One of the main issues in this regard is the determination of the standard of review for jurisdictional and merits-related aspects. Most recently, this issue was discussed in The United Mexican States v. Burr, 2020 ONSC 2376, where the court had to determine if the arbitral tribunal had erred in its evaluation of jurisdiction.
Turning to trends in Mexico, Eduardo Siqueiros, Partner at Arb-Inter in Mexico, explained the recent attempts by parties to interpret the formality requirements under the applicable Mexican law on international commercial arbitration (inspired by the UNCITRAL Model Law) to include the authentication of the arbitral award before a Mexican notary public. In some instances, courts had understood this to including the authentication before such notary of the arbitrators’ signatures. While this practice had made it very hard to enforce foreign arbitral awards in Mexico, Eduardo Siqueiros added that the Mexican Supreme Court put an end to such burdensome and rigid interpretation in a recent judgment, where the Court clarified that authentication before notary public is no longer required (Judgment of the Supreme Court of Justice of Mexico in the Amparo proceeding 7856/2019, of October 14, 2020). Gabriela Alvarez, Partner, Curtis, Mallet-Prevost, Colt & Mosle SC, provided an overview of the changes the United States-Mexico-Canada Agreement (USMCA) will bring to investment arbitration involving Mexico. She emphasized the dual regime for a lesser protection for most investments and an enhanced protection (including fair and equitable treatment, and expropriation) for investments involving government contracts.
Natalie L. Reid, Partner, Debevoise & Plimpton LLP, presented on three noteworthy recent developments in international commercial arbitration before U.S. courts: (1) the now pending certiorari before the U.S. Supreme Court about the question on whether Section 1782 applies to international commercial arbitration tribunals in the case of Servotronics, Inc. v. Rolls-Royce PLC; (2) the application of the U.S. domestic doctrine of equitable estoppel to give effect and interpret the New York Convention, in particular its Art. II (GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC, 590 U.S. __ (2020)); and (3) the U.S. Supreme Court’s dismissal of the request for certiorari to provide clarity about the standards for “evident partiality” as ground for vacating arbitral awards under Section 10(a)(2) of the FAA in the case of Monster Energy Co. v. City Beverages LLC, 940 F.3d 1130 (9th Cir. 2019), cert. denied, No. 19-1333 (U.S. June 29, 2020). Lucinda Low, Partner, Steptoe & Johnson LLP, explained the latest developments in U.S. investment arbitration practice. She distinguished between developments within the U.S. from the U.S.’ outward bound practice. As to the U.S. courts’ domestic developments, she referred to the courts’ support to investment treaty arbitrations by granting Section 1782 applications for discovery. She also mentioned the impact of U.S.’ sanctions on investment arbitration and the challenges to enforcement of awards against state assets subject to sanctions. In addition, she referred to the ongoing debate about the forfeiture action of the U.S. authorities that the recent case of Optima Ventures v. the United States before ICSID has arisen (Optima Ventures LLC and Optima 7171 LLC v United States, ICSID Case No. ARB/21/11, Notice of Arbitration, 8 February 2021). As to the external dimension of the U.S., she highlighted the active participation as non-disputing party with at least eight non-disputing party submissions under seven treaties with the aim of establishing uniform state practice. The issues covered in these submissions range from national and most-favored-nation treatment, a clear evidence requirement in corruption allegation, to expropriation standards. This intense practice seems to imply a strong activist position on a broad range of legal questions that appear relevant to the U.S. government even beyond the recent change of Administration.
Watch the full panel discussion here.