Following are this month’s recent developments in international arbitration law published by the International Law Office (free registration is required to view the articles): Finland: New legislation promotes mediation for commercial disputes Mexico: Appointment and powers of emergency arbitrators USA: New York legislature considers Article 75 bill Brazil: Superior Court sheds light on the concept of public order Malaysia: Court empowered to issue injunction pending dispute resolution Technorati Tags: law, ADR, arbitration

In Weingarten Realty Investors v. Miller, No. 11-20676 (5th Cir. Nov. 1, 2011), Weingarten Realty Investors (“WRI”) and Miller Sheriden, LLC (“Miller”), created a joint venture. WRI loaned that joint venture $75,000,000 under the Loan Agreement between WRI and the joint venture. Miller did not sign the Loan Agreement individually but did sign a third-party guarantee (“Limited Guarantee”) for the loan, on the same day the Loan Agreement was executed, in which guarantee he and Miller guaranteed half of the loan. There is no arbitration clause in the Limited Guarantee and the Loan Agreement does not list the Limited Guarantee as a Loan Document. When the joint venture did not pay the note on the extended maturity date, WRI unsuccessfully sought payment from the guarantors. WRI sued Miller pursuant to the Limited Guarantee. Miller moved to compel arbitration and the district court denied the motion. The district court held that Miller is not entitled to arbitration because he is not a party to any Loan Document. Miller then appealed the denial of the motion to compel arbitration and also moved for a stay on the underlying case pending appeal of the arbitration motion. The district court denied the stay. Miller appealed to the U.S. Court of Appeals for the Fifth Circuit. The Fifth Circuit affirmed the district court’s denial of the stay pending appeal, holding that while a district court has the discretion to stay the proceedings on the merits, a stay is not automatic. The court denied Miller’s stay because Miller “fails to show a likelihood of winning on the merits or that the balance of equities tips in his favor.” Technorati Tags: law, ADR, arbitration

The following bills relating to alternative dispute resolution were introduced by the 112nd U.S. Congress. The session convened in Washington, D.C. on January 3, 2011 and will end on January 3, 2013. Click on the bill number to read its text and on the status link to find the bill’s most recent legislative action. Bills that passed: Patent Reform Act of 2011 (a.k.a. America Invents Act). The Act provides, among other things that parties to a derivation proceeding may resolve the dispute via arbitration. See Section 135(f). H.R. 1249; Status. H.R. 1249 was signed by President Obama on Sept. 16, 2011 and became Public Law No. 112-29. Bills still pending: Consumer Mobile Fairness Act of 2011. The bill would amend title 9 of the United States Code to prohibit mandatory arbitration clauses in contracts for mobile service. S. 1652; Status. Disaster Recovery Act of 2011. The bill would create a dispute resolution program to facilitate an efficient recovery from major disasters. S. 1630; Status. Personal Data Protection and Breach Accountability Act of 2011. As introduced, the bill provides that “the rights and remedies afforded by this section shall not be abridged or precluded by any predispute arbitration agreement. S. 1535 IS; S. 1535 RS; Status. Emergency Jobs to Restore the American Dream Act. The bill would create an emergency jobs program during 2012 and 2013. The bill provides that each unit of general local government that is an entitlement community and each State that receives funding under the Act shall agree to the arbitration procedure described in the Act to resolve certain disputes. H.R. 2914; Status. American Specialty Agriculture Act. The Act would create a non-immigrant H-2C work visa program for agricultural workers and provides that any H-2C worker may, as a condition of employment with an employer, be subject to mandatory binding arbitration and mediation of any grievance relating to the employment relationship. H.R. 2847; Status. Arbitration Fairness Act of 2011. Declares that no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment, consumer, or civil rights dispute. S.987; Status. H.R.1873; Status. Labor Relations First Contract Negotiations Act of 2011. Amends the National Labor Relations Act to require mediation and, if necessary, binding arbitration of initial contract negotiation disputes. H.R.129; Status. Surface Transportation Board Reauthorization Act of 2011. Certain appropriations for the Surface Transportation Board, including requiring the Board to establish a binding arbitration process to resolve rail rate, practice, and common carrier service disputes. S.158; Status. Endocrine Disruptor Screening Enhancement Act of 2011. “In the event of any dispute about an appropriate share or a fair method of determining an appropriate share of applicable costs of the testing requirements in a test order, any person involved in the dispute may initiate binding arbitration proceedings by requesting the Federal Mediation and Conciliation Service to appoint an arbitrator from the roster of arbitrators maintained by such Service or a hearing with a regional office of the American Arbitration Association.” H.R.553; Status. Non-Federal Employee Whistleblower Protection Act of 2011. It includes provisions on the nonenforceability of waivers and arbitration of disputes. S.241; Status. National Guard Technician Equity Act. Provides for a technician’s rights of grievance, arbitration, appeal, and review beyond the current stage of the adjutant general of the jurisdiction concerned. H.R.1169; Status. Postal Operations Sustainment and Transformation Act of 2011. Section 401 of the Act includes arbitration and labor dispute guidelines. S.1010; Status. Soledad Canyon High Desert, California Public Lands Conservation and Management Act of 2011. Advises the use of arbitration under Subchapter IV of chapter 5 of section 5 of the USC. S.759; Status. FAA Air Transportation Modernization and Safety Improvement Act of 2011. Requires the FAA Administrator and employee bargaining representatives, if their own negotiations and the services of the Federal Mediation and Conciliation Service (FMCS) have failed to lead to an agreement, to submit their controversy to the Federal Service Impasses Panel, subject to specified procedures, for binding arbitration. H.R.658; Status. Medical Care Access Protection Act of 2011 (MCAP Act). The limitations within the act apply to arbitration, and nothing in the act is meant to supersede arbitration. S.197; Status. Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011. Provides that, “whether by arbitration or other means, in any health care lawsuit, the court shall supervise the arrangements for payment of damages to protect against conflicts of interest that may have the effect of reducing the amount of damages awarded that are actually paid to claimants.” S.1099; Status. S.218; Status. H.R.5; Status. U.S. Postal Service Improvements Act of 2011. Authorizes arbitration boards to consider the financial condition of the USPS in rendering decisions. S.353; Status. Preventing Homeowners from Foreclosure Act of 2011. Directs the Secretary of Housing and Urban Development (HUD) to implement a competitive grants program for states and local governmental entities to establish mediation programs to assist mortgagors under home mortgages facing foreclosure on such mortgages. H.R. 1131; Status. Local Jobs for America Act. The bill provides that each unit of general local government that is an entitlement community and each State that receives funding under this Act shall agree to the arbitration procedure described in Act to resolve certain disputes. H.R. 2828; Status. Preserving Homes and Communities Act of 2011. Directs the Secretary of HUD to: (1) establish a grant program to make competitive grants to state and local governments to establish mediation programs that assist mortgagors facing foreclosure, and (2) develop and implement a plan to monitor conditions and trends in home ownership and the mortgage industry and the effectiveness of public and private efforts to reduce mortgage defaults and foreclosures. S.489; Status. H.R.1477; Status. Restoring Democracy in the Workplace Act. Declares that a specified rule prescribed by the National Mediation Board relating to representation election procedures shall have no force or effect. H.R. 548; Status. Community Access Preservation Act (CAP). Amends the Communications Act of 1934. Sets forth provisions regarding: (1) LGS or state enforcement, (2) nonbinding mediation and court proceedings concerning disputed support amounts, […]

Last week, the U.S. Supreme Court held that courts must enforce arbitration agreements even if the plaintiff’s Complaint contains nonarbitrable claims. In KPMG LLP v. Cocchi, 565 U.S. ___ ( 2011) the Fourth District Court of Appeal of the State of Florida upheld a trial court’s refusal to compel arbitration in a lawsuit involving claims brought against the auditing firm KPMG LLP (“KPMG”) by investors owners of a limited partnership (“Respondents”) who were defrauded by Bernie Madoff. Respondents alleged four causes of action: negligent misrepresentation; violation of the Florida Deceptive and Unfair Trade Practices Act; professional malpractice; and aiding and abetting a breach of fiduciary duty. KPMG filed to a motion to compel arbitration based on the audit agreement that existed between itself and the Respondents. That agreement provided that “[a]nydispute or claim arising out of or relating to . . . the services provided [by KPMG] . . . (including any dispute or claim involving any person or entity for whose benefit the services in question are or were provided) shall be resolved” either by mediation or arbitration. The issue was whether the Respondents’ claims were derivative of the partnership, (therefore, arbitrable) or direct (nonarbitrable). The trial court denied KPMG’s motion and the appellate court affirmed, holding that the negligent misrepresentation and consumer fraud claims were direct claims thus, not subject to the arbitration agreement. The Court of Appeal, however, did not address the professional malpractice and the breach of fiduciary duty claims. Citing Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 217 (1985), the Supreme Court stated that “when a complaint contains both arbitrable and nonarbitrable claims, the [Federal Arbitration] Act requires courts to compel arbitration of pendent arbitrable claims when one of the parties files a motion to compel, even where the result would be the possibly inefficient maintenance of separate proceedings in different forums.” The Court further explained that “[a] court may not issue a blanket refusal to compel arbitration under the Federal Arbitration Act merely on the grounds that some of the claims could be resolved by the court without arbitration.” Accordingly, the Supreme Court vacated the decision and remanded for the appellate court to determine whether the other two claims require arbitration. Technorati Tags: law, ADR, arbitration