In In the Estate of James H. Rice, No. 10-10-00021-CV (Tex.App.- Waco, Aug. 10, 2011) the court found the appeal was appropriate for mediation and on April 20, 2011, ordered the parties to mediate this case. The mediation took place at the McLennan County Dispute Resolution Center (“DRC”) on June 15, 2011. The court, however, received a letter from DRC dated June 22, 2011 which stated the following: the mediation session ended abruptly when Appellant, James H. Rice, Jr. unexpectedly left the premises and did not return, prior to the mediation being terminated, adjourned, or recessed by the DRC’s volunteer mediator. As a result, the parties were unable to reach any agreement and the mediator, in the absence of the Appellant, pronounced the mediation terminated with the parties at impasse. The court was not persuaded by appellant’s explanation that he “felt it best to put this matter in the hands of the Court” and dismissed the appeal.

Via the Securities Law Prof Blog, we learned of SEC Commissioner’s Elisse B. Walter’s comments on mandatory securities arbitration at the 2011 annual NASAA Conference: Regardless of changes in the relationship between investors and the professionals to whom they turn for advice, disagreements will arise that need to be resolved quickly and fairly. Following the dictates of Dodd-Frank, the SEC intends to thoroughly review the mandatory arbitration provisions that are written into most brokerage contracts. I believe that in recent years FINRA has provided a relatively cost-effective way to fairly resolve disputes. Nonetheless, I also completely understand the frustration of investors who are denied their opportunity for a day in court and find themselves forced to make their case in front of an arbitration forum. As readers may already know, the Restoring American Financial Stability Act of 2010 (a.k.a. the “Dodd-Frank Wall Street Reform and Consumer Protection Act” ) would give the SEC the power to ban or limit mandatory arbitration in certain agreements. The final version of the bill is here. Here are some relevant provisions: SEC. 921. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION. (a) AMENDMENT TO SECURITIES EXCHANGE ACT OF 1934.—Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o), as amended by this title, is further amended by adding at the end the following new subsection: ‘‘(o) AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.— The Commission, by rule, may prohibit, or impose conditions or limitations on the use of, agreements that require customers or clients of any broker, dealer, or municipal securities dealer to arbitrate any future dispute between them arising under the Federal securities laws, the rules and regulations thereunder, or the rules of a self-regulatory organization if it finds that such prohibition, imposition of conditions, or limitations are in the public interest and for the protection of investors.’’. (b) AMENDMENT TO INVESTMENT ADVISERS ACT OF 1940.—Section 205 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–5) is amended by adding at the end the following new subsection: ‘‘(f) AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.— The Commission, by rule, may prohibit, or impose conditions or limitations on the use of, agreements that require customers or clients of any investment adviser to arbitrate any future dispute between them arising under the Federal securities laws, the rules and regulations thereunder, or the rules of a self-regulatory organization if it finds that such prohibition, imposition of conditions, or limitations are in the public interest and for the protection of investors.’’ Stay tuned. Technorati Tags: law, ADR, arbitration  

In Cape Flattery Limited v. Titan Maritime, LLC, No. 09-15682 (9th Cir. July 26, 2011) Cape Flattery, a shipowner had contracted with Titan, a salvage company, to remove a stranded vessel from a reef. The contract contained the following arbitration clause: Any dispute arising under this Agreement shall be settled by arbitration in London, England, in accordance with the English Arbitration Act 1996 and any amendments thereto, English law and practice to apply. Titan moved the vessel from the reef, however, serious damage was inflicted on the reef and the U.S. government sued Cape Flattery for $15 million for damages to natural resources pursuant to 33 U.S.C. 2702(b)(2). Shortly thereafter, Cape Flattery sued Titan seeking indemnity and/or contribution alleging gross negligence in its salvage of Cape Flattery’s vessel. Titan moved to compel arbitration pursuant to the salvage agreement. The district court, however, refused to compel arbitration. Titan appealed. The Ninth Circuit held that the claim for indemnification was collateral to the salvage contract and did not “arise out of” that contract. The court agreed with the trial court’s reasoning that the “arising under” language in the agreement signifies a narrow arbitration agreement. If the parties had intended all disputes associated with the contract to be resolved by arbitration, the court said, the parties would have used broader language such as “arising out of or relating to.” Therefore, the court concluded that the present dispute was not arbitrable.

The International Chamber of Commerce (“ICC”) released its new Arbitration and ADR Rules on September 12, 2011, in Paris. The Rules, effective on January 1, 2012, address developing issues in international arbitration, such as multiparty contracts and causes of delay and excessive costs. Read the ICC press release here. The Rules may be downloaded here. Technorati Tags: arbitration, ADR, law