In a proceeding under the Federal Arbitration Act (“FAA”) to determine if a dispute must be arbitrated, a federal district court performs a more limited function than in a plenary civil action. On an application to stay an action allegedly referable to arbitration, the court decides only if “the issue involved in such suit or proceeding is referable to arbitration under [a written arbitration] agreement.” 9 U.S.C. § 3. On a petition to compel arbitration, the court decides only whether “ the making of the agreement for arbitration or  the failure to comply therewith” are in issue. 9 U.S.C. § 4. If the court is satisfied that the two matters are not in issue, it must direct the parties to arbitrate in accordance with the agreement. But if either matter is in issue, the court must proceed summarily to trial. Id.
David Barres is a Member in the firm's New York office. His practice is focused on commercial litigation and arbitration, including complex breach-of-contract, fraud, and securities matters. David has extensive experience representing banks in bankruptcy litigation and other commercial matters, including the defense of fraudulent transfer claims and the litigation of disputes concerning the valuation of businesses and assets. He has arbitrated and mediated numerous international and domestic commercial disputes.
The courts undoubtedly have the power to grant provisional remedies in aid of a pending arbitration – including temporary restraining orders, preliminary injunctions, and attachments. As a recent Fifth Circuit decision reminds us, the courts also can grant such remedies in aid of an arbitration that has yet to be commenced. Indeed, those remedies may be available under state law, even if the future arbitration is governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention”), and even if the arbitration will be sited in a state other than the one in which the interim remedy is sought.
For nearly thirty years, federal and state appellate courts have been split on the issue of whether the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters, November 15, 1965 (“Hague Service Convention” or “Convention”), permits service of process by mail. In Water Splash, Inc. v. Menon, 197 L. Ed. 2d 826, 830 (2017), the Supreme Court resolved that issue, holding that the Convention does not prohibit such service.
Federal public policy favors arbitration and the broad interpretation and enforcement of arbitration agreements. So how can an arbitration agreement be held by a court to be void as against public policy? One answer from a state court (in circumstances where the Federal Arbitration Act did not apply) is that toying with a statutory arbitration scheme could do the trick.
In an effort to streamline arbitration proceedings where possible, the International Court of Arbitration of the International Chamber of Commerce (“ICC”) announced on November 4, 2016 that it would issue new Expedited Procedure Rules, effective March 1, 2017, which will comprise the new Appendix VI of its Rules of Arbitration (“ICC Arb. R.”). The ICC also announced that it will amend ICC Arb. R. Article 30, which is its current rule governing expedited procedures, as well as Appendix III, which contains the schedules of administrative expenses and arbitrator fees.
When effective, the new Expedited Procedure Rules (“EPRs”) will apply automatically if the amount in dispute does not exceed US$2,000,000 (App. VI, Art. 1(2)), although the ICC Court of Arbitration will have discretion, after consultation with the arbitral tribunal and the parties, to decide that the rules ought not apply to a particular case (id., Art. 1(4); and ICC Arb. R. 30(3)(c)). The EPRs also will not apply if the parties’ arbitration agreement came into effect before March 1, 2017, or if the parties expressly agreed to opt out of the Expedited Procedure Rules. (ICC Arb. R. Art. 30.)