In this Video, Jason Fry, Secretary General of the International Court of Arbitration at the International Chamber of Commerce (ICC), discusses the new 2012 ICC Arbitration Rules.

by Jeremy Clare The United States District Court for the Southern District of New York confirmed an arbitration award and granted attorney’s fees in favor the defendant because the plaintiffs’ claims were meritless and lacked any proper purpose. Background In DigiTelCom, Ltd., et al., v. Tele2 Sverige AB, No. 12-CV-3253 (S.D. N.Y. July 25, 2012), two Russian telecommunications companies, DigiTelCom, Ltd. (“DTC”) and Tele2 Sverige AB (“Tele2”), were in a dispute regarding three different contractual agreements. According to the three agreements, the parties initiated arbitration before the International Centre for Dispute Resolution. The arbitration panel ultimately dismissed all of DTC’s claims and awarded attorney’s fees and costs to Tele2. District Court DTC’s motion to vacate the award contended that the arbitral tribunal (1) imperfectly exercised its powers by rewriting the contracts in question; (2) manifestly disregarded the applicable law; and (3) created a strong inference of partiality or bias with an inconsistent and irrational decision. First, the district court concluded that the arbitral tribunal properly exercised its powers when it interpreted the contracts. Second, the court noted that DTC did not cite any particular principle or law that the tribunal ignored and concluded that DTC’s disagreement with the award was inadequate to establish a manifest disregard of the law. Third, the court concluded that DTC’s speculative allegations of partiality were not enough to establish grounds to vacate the award. DTC also asked the court to vacate the fee award on the grounds that the tribunal manifestly disregarded the law. The court first noted that DTC never objected to the distribution of costs and fees to the tribunal and that there was no evidence that the tribunal was aware of the law and consciously disregarded it. Therefore, DTC’s objection was deemed waived. In dicta, the court also concluded that there was no evidence that the tribunal’s decision was inconsistent with applicable rules and laws. Finally, Tele2 requested that the court impose attorneys’ fees against DTC. The court noted that it should be careful not to chill parties’ good-faith challenges to arbitration awards, but must also discourage parties from bringing petitions based on mere dissatisfaction with the tribunal’s conclusions. The court concluded that DTC’s claims were entirely meritless and DTC acted for improper purposes. The court consequently confirmed the award and granted attorneys’ fees for Tele2. Jeremy Clare is a law clerk at Karl Bayer, Dispute Resolution Expert. Jeremy received his J.D. from the University of Texas School of Law in 2012 and received a B.A. from the University of South Carolina where he studied political science.

by Holly Hayes Our health care conflict resolution series began with Part I, applying the “principled negotiation” method to health care (post available here) and followed with Part II, examining a case study of “Separating the People from the Problem” (post available here). In this post, let’s take an example of a physician and a hospital group negotiating to buy the physician’s practice to see how “positional bargaining” results in failure to find a solution. Physician: I need you to buy my practice for $X and I will not take weekend call. If you don’t want to buy my practice, my partners and I can take it down the road to hospital Y. Hospital Representative: We are willing to offer you $Z for your practice and we must have a weekend call rotation as part of the deal. Physician: You don’t care about me or my practice, this discussion is over. Wise solutions acknowledge interests, not positions. The basic problem with the physician and the hospital representative is not that one is buying and one is selling, the conflict is between their interests or their concerns, fears, needs and desires related to the negotiation. What are some tools to help reconcile interests rather than merely seeking to compromise positions? In Getting to Yes, Roger Fisher and William Ury describe techniques for identifying interests so that options can be developed that meet both party’s interests. Ask “Why?” – put yourself in their shoes. Ask “Why Not?” — why doesn’t the other side agree with us? Realize each side has multiple interests – the physician wants a secure income for his family, he wants time with his family so he does not want to always be on call. Realize the most powerful interests are basic human needs – security, economic well-being, control over one’s life, a sense of belonging, recognition. Talk about interests – make your interests come alive for the other side. The hospital representative can talk about ways to include the physician in decision-making at the hospital and about what the hospital needs in terms of income to make a profit to reinvest in its people and physical plant. Using these techniques, let’s see how the conversation between the physician and the hospital representative is more productive: Physician: I need you to buy my practice for $X and I will not take weekend call. If you don’t want to buy my practice, my partners and I can take it down the road to hospital Y. Hospital Representative: I understand you have spent your time and your own income to build such a successful practice. You have been a great partner for us for five years. Can you help me understand how you arrived at the $X figure and talk a little about the call issue? Physician: We recently bought an MRI and quite a bit of other costly equipment that would be included in the purchase price. I have spoken with some other physician practices and this price seems fair. I just want to be fairly compensated for the value my partners and I have brought to this practice over the past five years. In terms of call, I want time with my family on the weekends. I am afraid that if one of my partners leaves, I will have to take both my call and their call and who knows when a new physician could be recruited. I want control over my life. Hospital Rep: Would it be alright with you if we had both your accountant and my CFO take a look at the practice financials? There are also some industry standards we could apply to the purchase price. As for call, you make a very good point about how much call would be needed. Of course, my problem is that I need to provide certain coverage or the hospital cannot provide certain services and those patients will go down the road. This is a problem across the country and I know many hospitals have begun to pay very high prices to provide call for certain specialties. I wonder if you would consider being part of our medical staff executive committee as part of a purchase package? This would not guarantee you no call, but it would give you a chance to help make policy about how we move forward. If we can reach agreement on purchasing your practice, it will take both of us to make the best decisions for a successful partnership. Physician: Yes, I can agree to those next steps. I am starting to feel a level of comfort that I will be treated fairly. As the two parties talked about their interests by asking questions and realizing that the most powerful interests are basic human needs, they both came closer to the purpose of negotiating — serving their interests and finding an acceptable solution. Part IV in our series will explore more on this topic – “how to invent options for mutual gain”. We welcome any comments you have about conflict you have experienced in health care and lessons you have learned. Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at: holly@karlbayer.com.

Professor S.I. Strong (University of Missouri School of Law) has posted “Mass Procedures as a Form of ‘Regulatory Arbitration’ – Abaclat v. Argentine Republic and the International Investment Regime,” 38 The Journal of Corporation Law __ (forthcoming 2013) on SSRN. The abstract is: Commentators and counsel agree that Abaclat v. Argentine Republic is one of the most important investment arbitrations in recent years. Described alternatively as “unprecedented,” a “landmark ruling” and a “quantum leap,” the jurisdictional and dissenting awards were voted the most controversial arbitration decisions of 2011 by experts in the field. Although Abaclat addresses a number of issues of first impression, perhaps the most novel aspect of the dispute is that it marks the first time that a large number of claimants – in this case, 60,000 Italian natural and legal persons – have joined together in a single treaty-based (ICSID) arbitration. While large-scale dispute resolution procedures may not seem that remarkable to U.S.-trained lawyers familiar with class action litigation, such techniques are unusual in most national courts outside the United States and unprecedented in the investment realm. In particular, such procedures give rise to the question of whether the international investment regime is in the process of embracing a form of “regulatory arbitration” that is akin to regulatory litigation. Regulatory litigation results when individual litigants enforce certain public laws as a matter of institutional design. If such a device is developing in the investment realm, it could provide a new solution to certain intransigent problems relating to large-scale international injuries. However, such a mechanism could also require a radical re-evaluation of traditional notions regarding the concept of “regulation” and intensify debates about the proper role and goals of investment arbitration as a matter of public international law. This Article takes a unique and intriguing look at the issues presented by Abaclat, considering the legitimacy of mass procedures from a regulatory perspective and using new governance theory to determine whether a new form of regulatory arbitration is currently being developed. In so doing, the discussion describes the basic parameters of regulatory litigation and analyzes the special problems that arise when regulatory litigation is used in the transnational context, then transfers those concepts into the arbitral realm. This sort of analysis, which is entirely novel as a matter of either public or private law, will shape future inquiries regarding the propriety of both treaty-based arbitration and contract-based arbitration, including domestic forms of class arbitration. The full article may be downloaded here. Other scholarly papers by Professor S.I. Strong are here.