August 2015 Archives


| No Comments

See the attached article by Section Member Stephen A. Hochman, Esq.

When and How to Use Mediation to Your Aadvantage.pdf

Saving Time & Money in Arbitration: Tips for Advocates


By Jeffrey T. Zaino

Saving time and saving money continue to be important reasons why attorneys and their clients use arbitration. However, when it comes to realizing these savings, users of the arbitration process often see the arbitrator as the sole agent responsible for delivering economy and efficiency. The arbitrator's role in this regard, while important, is only part of the picture. There are many things party advocates can do to assist the arbitrator in delivering an economical and efficient process for their clients.

The starting point is the advocate's mindset. It is important that attorneys approach the process with an "arbitration mindset" rather than a "litigation mindset." Challenging the "litigation mindset" is not easy, but here are a few things attorneys can do that will help.

These include:

1. Proactively collaborate with arbitrators to promote process choices that lead to efficient and economical arbitration proceedings.

2. Ask the arbitrator to intercede whenever proposed changes to rules or procedures threaten the efficiency and economy of an arbitration proceeding.

3. Do not rely on litigation procedures to form a framework for arbitration but rather capitalize on arbitration's flexibility to bypass such procedures and ensure an efficient and economical proceeding for their clients.

4. Actively seek the arbitrator's guidance regarding their case presentations for ways to make the process more efficient and economical when compared to litigation.

Closely associated with challenging the "litigation mindset" is a need to move away from reliance on extensive (and expensive) discovery. There is no statutory or common law right to discovery in arbitration. Therefore, there are several things arbitration advocates should do to minimize discovery to the greatest extent possible.

These things include (but are not limited to) the following:

1. Vigorously adhere to the principle of limited discovery in arbitration.

2. Intentionally encourage/require client participation in discovery discussions.
3. Passionately pursue what your client needs, not everything you may want.

4. Diligently avoid interrogatories and requests for admissions.

5. Earnestly follow the notion that witnesses should only testify once, and that is at the evidentiary hearing.

6. Conscientiously avoid fishing expeditions.

Next up in the effort to save time and money in arbitration is considering whether motion practice is a help or hindrance. The prevailing view of motion practice in arbitration is that motions likely to expedite or facilitate the proceedings are acceptable. Motions likely to be unproductive are strongly discouraged.

When it comes to motion practice, advocates should consider the following:

1. Arbitrators have the authority to consider any form of motion-including issues of arbitrability--and to grant any from of relief, subject to limitations imposed by the parties' arbitration agreement, applicable rules, or law.

2. Arbitrators have authority to consider any type of motion and have the discretion to grant any form of relief that the arbitrators deem just and equitable and within the scope of the agreement of the parties.

3. Advise the arbitrator of your intentions regarding motions--imminent and prospective--as early as possible.

4. Seek the arbitrator's permission before presenting motions.

5. Be very selective when contemplating filing motions. Generally, file only motions likely to promote efficiency and economy.

6. Refrain from filing motions likely to be unproductive.

Let's look at a number of specific motions to gain a little more insight into their efficacy in the context of arbitration.


AAA rules [Commercial R-32(b), Construction 32(b), Employment 30] explicitly give arbitrators the authority to bifurcate arbitration proceedings. Arbitrators will typically only allow bifurcation after deliberate forethought and discretion.

When weighing whether to file a motion for bifurcation, it is important for an attorney to understand that arbitrators may consider some of the following factors in determining if it should be granted:

• Whether substantive issues in the arbitration are significantly different from each other or significantly complex to justify bifurcation.

• The amount and type of evidence needed to support each issue.

• Whether the evidence necessary for a later phase will overlap or will be mutually exclusive.

• Whether the evidence necessary for a later phase of the hearing will be prejudicial or inflammatory.

• Whether evidence necessary for a later phase of a hearing is sensitive.

• Whether resources will be conserved by bifurcation or would increase costs with multiple phases.

• Whether a second phase of the arbitration will be voluminous.

• The effect that bifurcation may have on discovery (if allowed).


Postponements are the primary cause of delay in commercial arbitration cases and the chief frustration of arbitrators and parties. Prior to filing a postponement request a party should first contact the other party (or parties) involved to see if
they have any objection to the request. Generally, arbitrators will strongly discourage requests for postponements and will only consider them when good cause is shown. It is up to the arbitrator's discretion to determine what constitutes "good cause." If granting a postponement, arbitrators will generally reschedule the hearing for the earliest possible date.

Factors considered by arbitrators when weighing whether to grant or deny a request to postpone a hearing include, but are not limited to:

• The reasonableness of the request, i.e. are the supporting reasons sound?

• The comments of the other party or parties opposing the request.

• Whether granting or denying the request will be prejudicial to any party.

• The number of prior postponements, whether mutual or unilaterally requested.

Arbitrators must also consider whether denying a postponement request could be interpreted as "misconduct" sufficient to warrant vacatur of the final award as provided for in Section 10 of the Federal Arbitration Act (FAA), i.e. "Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown..." The Uniform Arbitration Act and many state arbitration statutes contain a similar provision.

Limiting Testimony

AAA rules [Commercial R-34(b), Construction 33(b), Employment 30] provide that arbitrators have the authority to determine the admissibility, relevance, and materiality of the evidence offered and may exclude evidence deemed by the arbitrator to be cumulative or irrelevant. If a party's advocate cannot demonstrate that such testimony would be unfairly prejudicial, such requests to limit testimony on the basis of prejudice will generally be denied by the arbitrator. Section 10(a) of the FAA provides that refusing to hear evidence "pertinent and material to the controversy" is a ground for vacating the award.

Efficient and economical ways of presenting expert testimony in arbitration include:

• Have expert witnesses meet before the hearing to prepare a list of those points on which they do and do not agree so they can focus on points in dispute.

• Having both experts available for simultaneous questioning. This can greatly enhance the arbitrator's ability to understand, analyze and make decisions.

• It may be possible to conduct the joint examination of the experts after the arbitrator has received the experts' reports and before any other testimony is taken.

Asserting a Counterclaim

Under all of the AAA's arbitration rules, no new or different claim or counterclaim may be submitted without the consent of the arbitrator after the arbitrator is appointed.

Party advocates need to be aware that factors considered by arbitrators when deciding whether to allow new or different claims or counterclaims include, but are not limited to:

• Will allowing the claim/counterclaim be prejudicial to the other party?

• Will NOT allowing the claim/counterclaim be prejudicial to the requesting party?

• Will allowing the claim/counterclaim promote judicial economy and fairness?

• Is the request substantive or put forth for the purposes of delay, etc.?

To avoid this situation, the parties and the arbitrators should consider including--as part of the Preliminary Hearing Scheduling Order--that the parties submit terms of reference, i.e. a statement of the issues that the parties feel the arbitrator must decide.


Arbitrators may impose sanctions if empowered to do so by the parties' arbitration agreement, applicable arbitration law, or applicable governing administrative rules. Absent such empowering authority arbitrators are reluctant to impose sanctions. The Revised Uniform Arbitration Act §17(d), 21(b), (c) give arbitrators the authority to grant broad relief including an award imposing sanctions for noncompliance with discovery orders. In any given case, counsel should brief the arbitrator on his or her authority to impose sanctions. Arbitrators are likely to shy away from imposing evidentiary sanctions, such as precluding the admission of certain evidence or testimony, because the Federal Arbitration Act (and applicable state arbitration statutes) provides that failure to hear material and relevant evidence can constitute a basis for vacating an award. 9 U.S. C. §10(a)(3). The AAA's Commercial Rules (amended 10/1/13) added a new section (R-58) giving arbitrators the authority to order appropriate sanctions, upon a party's request, where a party fails to comply with its obligations under the rules or with an order of the arbitrator.

While all the forgoing items do not represent the entire universe of things attorney advocates can do to help ensure arbitration is an efficient and economical process for their clients, each is an important and effective step in the right direction.

Article appearing in the Dispute Resolution Journal, please see the attached.

DRJ - Jarvis.pdf

Section member Lisa Renee Pomerantz will be presenting a program at the Conference entitled: What's a Neutral to Do?: Dealing with Ethical Issues Faced by Party Representatives in Commercial ADR.

For more information on the Conference or to register, go to the following link:


| No Comments

See the attached guidelines on social media. This was prepared by the Social Media Guidance Note Committee:

Thomas D. Halket, Chair
Stephen P. Gilbert
Herbert H. (Hal) Gray, III
Larry D. Harris
Robert A. Holtzman
William H. Lemons
Peter L. Michaelson
Edna Sussman
Irene C. Warshauer
John H. Wilkinson


Your Longest Arbitration Case - What are your thoughts?


Either as an advocate or arbitrator, what has been your longest arbitration case? Why did it take so long? Please post your comments/thoughts below.

Appearing in the Dispute Resolution Journal, by Jay E. Grenig and Rocco M. Scanza

DRJ - Grenig and Scanza.pdf

Posted by Securities Arbitration Alert in Arbitration, Court Decisions, News, Securities Arbitration on August 20, 2015.



Article appearing in the Dispute Resolution Journal by Margaret M. Toohey

DRJ - Toohey.pdf

Article by Collin R. Flake appearing in the Dispute Resolution Journal.

DRJ - Flake.pdf

Please see the following link:

This Legal Update was first published by Practical Law Litigation web service at For more information about Practical Law, visit

By Gerald M. Levine, Esq.

Unlike typical arbitrations in which awards are final and binding online dispute resolution of domain names under the Uniform Domain Name Dispute Resolution Policy, the UDRP, can proceed to de novo actions in federal district courts under the Anticybersquatting Consumer Protection Act, the ACPA. The ACPA is a section of the Trademark Act of 1946, the Lanham Act. There are two possible claims under the ACPA. In both, the losing party is aggrieved by the award; either the domain name holder forfeits the domain name which is cancelled or transferred to the trademark owner; or trademark owners fail to prove domain name holders lack rights or legitimate interests in the domain names or are guilty of abusive registrations of the domain names.

There have been a number of notable UDRP awards that have moved to federal court. Unlike the UDRP in which injunction is the sole substantive remedy, under the ACPA the winning party is entitled to damages and attorneys' fees, whether it be to the trademark owner or the domain name holder. Taking the situations one at the time. There are actually three possibilities, in two of which the trademark owner becomes a defendant in ACPA actions.

Domain name holders have litigated in two situations; one is defensible and the other not. In the defensible case domain name holders lose under the UDRP and prevail under the ACPA because they have priority in registering domain names earlier than first use of any trademarks in commerce. In other words, the first to register a domain name has a right to it regardless whether it corresponds to a later acquired trademark. In the indefensible case, holders lose because their choices of domain names are identical or confusingly similar to trademarks, lack rights or legitimate interests in the domain names, and are found to have registered and are using the domain names in bad faith.

Parties have a right to vindicate their claims under the ACPA but it comes at a price. Under the ACPA the court has discretion to award damages up to $100,000 per domain name. In a recent case of the indefensible kind filed in the Federal District Court for the Eastern District of New York, for example, involving two domain names incorporating the word "Trump plus the name of real estate ventures in India" the domain name holder was on the wrong end of a damage award of $32,000. There are similar awards against misguided domain name holders in other federal cases in which their grievances were mere mirage.

But, there are also misguided trademark owners who overreach their rights, abuse the UDRP proceedings-- enabled it has to be said by Panels who misapply domain name jurisprudence--and find themselves as defendants in indefensible cases under the ACPA. Two recent examples will suffice to illustrate the problem of overreaching. The disputes were initiated with UDRP complaints and were granted even though the trademarks were not in commerce when domain names were registered. They were clearly overreaching trademark owners, but the domain name holders commenced action respectively in the Federal District Court for the District of Columbia and the District Court for the District of Colorado, with the not startling result that the trademark owners quickly entered into stipulated settlements and consent judgments for $25,000 and $50,000 respectively including permanent injunctions to get out of their bad situations.

ADR in Technology and Applied Science Cases: A Better Way


This article by Michael H. Diamant was published in the Dispute Resolution Journal.

Dispute Resolution Journal Vol 70 No 1.pdf

See the below flyer for more information and to register:

Save the date.pdf

Recently published in the Dispute Resolution Journal

By Raymond G. Bender

DRJ article.pdf

Information on upcoming ACR and NYSDRA 2015 Annual Conferences

| No Comments

The Association for Conflict Resolution (ACR) is holding its 2015 Annual Conference from October 7-10, 2015 at the Atlantis Casino Resort Spa in Reno, Nevada. For more information, please visit the Conference website at

The New York State Dispute Resolution Association is holding its 2015 Annual Conference from September 28-30 at the Holiday Inn in Saratoga Springs. For more information, please visit


| 1 Comment

Attached article by Michael Levy.


NON-PAYMENT BY ONE PARTY - What are your thoughts?


What action other than suspension could/should an arbitrator take for non-payment by one party? Please post your comments/thoughts below.

Q&A at GigaLaw with Author of 'Domain Name Arbitration' Book

| 1 Comment

An article by Arbitrator Theodore Cheng that appeared in Resolution Alley, a column about the use of alternative dispute resolution in the entertainment, arts, sports, other related industries:

Why Mediation Works When Negotiation Fails

| 1 Comment

By Stephen A. Hochman, Esq.

1. Mediation permits each party (and his or her attorney) to communicate directly to the other party (rather than communicating only through their respective attorneys).

2. A mediator can let the parties vent their feelings, put emotions behind them, focus on their real needs and interests and then make a rational cost/benefit and risk/reward analysis of the differences between litigating and settling.

3. A mediator can be an "agent of reality" to help the parties and their advocates overcome "advocacy bias" and other cognitive barriers to objective risk analysis.

a. Advocates have a tendency to fall in love with their arguments, and parties have a tendency to believe what they want to believe.

b. A mediator has more credibility than the opposing party in pointing out the weaknesses in each party's case so as to assist each party in making an objective risk/reward and cost/benefit analysis of its litigation alternative.

c. A mediator can help the parties focus on their tolerance for or aversion to risk (e.g., a defendant might prefer paying $250,000 to avoid a 20% risk of losing $1,000,000, whereas a plaintiff might prefer a 20% chance of winning $1,000,000 rather than a certainty of receiving $250.000).

4. A mediator has a different agenda than the parties.

a. A party's agenda may be (i) to get (or keep) as much as possible in a zero sum negotiation or (ii) to "win," "get even," be vindicated or satisfy a similar non-economic need.

b. The mediator's sole agenda is to assist each party in finding a way to settle on terms that (i) meet its real needs and interests and (ii) are preferable to its litigation alternative.

5 A mediator can help the parties create added value.

a. A mediator can suggest ways to enlarge the pie (e.g., non-monetary benefits that cost one party less than the value of that benefit to the other, the difference being the "added value").

b. When the mediator suggests a method for adding value to each party in separate confidential caucuses, that may enhance its perceived value to each party, whereas if one party (e.g., a seller) suggests a method of creating added value directly to the other (e.g., a buyer) by offering to give the buyer a discount on future orders, the buyer may feel entitled to keep all of the added value because the fact that the seller (as opposed to the mediator) suggested the discount may be perceived by the buyer as a benefit primarily to the seller who suggested it,thus causing the buyer to expect more than a fair share of the added value.

6 Communicating directly to the other party or party representative that has the major stake in the outcome can minimize the risk of a conflict of interest between that party and its negotiating representative.

a. Litigators may have financial or ego needs that may, consciously or subconsciously, cause them to overvalue the strengths of their case and thus prefer to focus on the advantage of winning in litigation over a settlement that would avoid the risk of losing.

b. A party's negotiating agent may have a different need from its principal or employer (e.g., a credit manager may wish to avoid taking responsibility for a write-off).

7. A proposal suggested by a mediator may avoid a knee-jerk negative reaction, which might have been the reaction if the other party made the same proposal.

a. When made by the mediator rather than one's adversary, the proposal is more likely to be considered and evaluated rather than suspected or attacked.

b. If one party makes a final "take-it or leave-it" proposal to the other, the other may not be willing to accept an ultimatum from its adversary, whereas if a respected mediator makes a proposal that he or she believes is better for both parties than their litigation alternative, it is more likely to be accepted by both parties.

8. By making a mediator's proposal as a last resort to avoid impasse, the mediator can overcome the posturing that negotiators often use in an attempt to settle on terms that are better than their worst-case alternative to litigation.

a. Because each party knows that, if it accepts (albeit reluctantly) the mediator's proposal, the mediator will not reveal its acceptance to the other party unless the other party also accepts the proposal, there is no downside in accepting the proposal as long as it is at least somewhat better than its worst-case alternative to litigation.

b. One definition of a good settlement is when both parties are equally unhappy because they agreed to a less than ideal settlement that nevertheless was determined by each party to be better than its uncertain or "role-the-dice" litigation or arbitration alternative.


| 1 Comment

By Stephen A. Hochman, Esq.

I. The Pre-Mediation Stage

A. Subjects to Discuss at a Pre-Mediation Conference with the Mediator (Either in a Joint Conference or Privately)

1. Scheduling the mediation so as to allow sufficient time for the process to work

2. Asking the mediator to get your adversary's ultimate decision maker to be present at the mediation (including their insurance carrier, if applicable)

a. If the ultimate decision maker is unavailable, suggest that he or she be available by phone (including cell phone)

b. Suggest that the mediator get a guarantee from your adversary that the ultimate decision maker will meet with the mediator in a private caucus at a future date if needed to break impasse

3. The desirability of having the parties exchange relevant documents or information prior to the mediation

4. Other information you should tell, or questions you should ask, the mediator

B. Contents of the Pre-Mediation Submission

1. What should it include and should you share it with your adversary?

2. What confidential information should you share (or not share) with the mediator?

C. Who Should You Bring to the Mediation?

1. The representatives of your client who were involved at the deal level

2. The higher level decision makers

3. Key witnesses

4. Experts

5. Your client's insurance carrier, if applicable

D. How Should You Prepare Your Client for the Mediation?

1. Explain the process, the extent of confidentiality, the role of the mediator and the fact that the opposing party as well as the mediator is the audience.

2. Find out your client's needs and interests and the desirability of giving or getting non-monetary benefits.

3. Discuss of the strengths and weaknesses of your client's case.

4. Adjust your client's expectations as to its BATNA and WATNA as well as its MYLATA in the context of its business alternatives as well as its litigation alternatives.

5. Discuss settlement options (e.g., monetary and non-monetary consideration, future business, confidentiality, non-disparagement agreements, etc.).

6. Plan the negotiation strategy.

a. Explain the need for the negotiation dance.

b. Explain the need for patience.

7. Explain the role of your client (i) in the joint session and (ii) in the caucuses:

a. In the joint session, consider having your client explain his or her suffering and feelings (but avoiding accusatory statements or hot buttons), and acknowledge adversary's sufferings or feelings.

b. In the caucuses, consider good cop, bad cop strategy and what not to tell the mediator.

c. Advise your client as to when to speak, and when not to speak, and ways you and your client can privately signal each other.

d. Advise your client as to how to respond to the adversary's accusations or provocations.

8. Prepare your client for likely questions the mediator may ask.

E. Consider Requesting Pre-Mediation Meetings, Such As:

1. a four-way meeting (with clients) or a two-way meeting (lawyers only), without the mediator:

a. to explore settlement and avoid the cost of mediation;

b. to decide on the ground rules for the mediation.

2. a four-way (with clients) or two-way (lawyers only) meeting with the mediator

a. to agree on the mediation process;

b. to define and narrow the issues;

c. to discuss sensitive party relationship issues.

3. a pre-mediation caucus with the mediator, either with or without your clients.

F. Consider Bringing a Draft Settlement Agreement to the Mediation.

II. The Joint Session (Should It Ever Be Avoided?)

A. Your Opening Statement

1. Should you use the positional bargaining approach - e.g., "We believe we will win in litigation because...."?

2. Should you use the fair settlement approach - e.g., "We are here because we want to settle on terms that are fair to (or better than the alternative for) both parties"?

3. Should you use the problem solving approach?

a. Explain your desire to accommodate your adversary's needs.

b. Explain the impediments to accommodate those needs, for example:

(x) the strength of your case and your duty not to settle if your litigation alternative is better;

(y) practical constraints (e.g., financial inability).

c. Invite your adversary to provide information or ways to overcome the impediment (e.g., what are the weaknesses in my case that I may have missed, or how can we give you benefits other than money).

4. Should you propose focusing on business deal alternatives in the joint session?

5. To what extent should you avoid telling the other side its weaknesses and use the mediator to tell them their bad news?

6. Avoid hyperbole, overstatement, strident tone and accusatory or insulting statements (e.g., "It's a lie", "Your position is absurd", "Your case stinks and is worth only nuisance value").

7. Show empathy to the other side if appropriate.

8. Don't discuss money or other types of consideration yet.

B. How Should You Evaluate and Respond to Your Adversary's Opening Statement?

1. Listen for clues as to their needs and interests.

2. Be prepared to respond if your adversary communicates threats, insults or a positional bargaining approach.

C. Consider Communications After the Opening Statements

1. to get clarification or information from your adversary (as opposed to arguing);

2. to explore possible business deal alternatives to litigation.

III. The Initial Caucus

A. Consider Asking the Mediator For His or Her Views as to the Litigation Alternative.

B. Should You Negotiate with the Mediator?

C. To What Extent Should You Disclose the Weaknesses in Your Case to the Mediator?

D. Consider the Extent to Which You Should Hold Back Some Strengths or Arguments For Later.

E. Give the Mediator Ammunition to Show the Other Side Its Weaknesses.

F. Coach the Mediator Not to Permit the Other Side to Discuss Money Before the Mediator Does Risk Analysis with Them

G. Don't Make or Respond to "Out-Of-The-Ballpark" Offers or Demands.

H. Coach the Mediator to Discourage the Other Side to Avoid Making "Out-Of-The-Ballpark" Offers or Demands.

I. Consider Using the Mediator:

1. to convey difficult messages to your adversary;

2. to get information from your adversary;

3. to test the viability of settlement alternatives;

4. to orchestrate the negotiation;

5. to help get your client to be realistic about his or her litigation alternative.

J. Coach the Mediator to Let the Other Side Vent and Have Its Feelings Validated so It can Focus on Tomorrow Rather Than Yesterday.

IV. Subsequent Caucuses

A. Consider When and How It's Better to Let the Mediator be the Author of Your Proposals to Avoid Reactive Devaluation.

B. Make a Reasonable Opening Offer or Response Through the Mediator:

1. Leave room for movement;

2. Consider offering a range rather than an absolute number.

C. Look for Clues in what the Mediator Tells You About the Other Side.

D. Consider Holding Back Some Strengths and Some Proposals Until the Final Caucus.

E. Don't Accept the Other Side's Proposals Too Quickly.

F. Support Your Proposals with Reasons.

G. Coach the Mediator on How to Let (A) the Plaintiff Feel It is Getting the Last Available Dollar From the Defendant or (B) the Defendant Feel It is Not Overpaying (As The Case May Be)

H. Should You Tell the Mediator Your Real "Bottom Line" (or "Last Dollar")?

I. Should You Say to the Mediator "This is the Most We Will Pay Unless You Can Show Me I'm Missing Something?"

J. Explain to the Mediator the Basis of Your Rational Costs/Benefit Analysis.

V. Breaking Impasse and Closing the Deal:

A. Consider Offering any Available Non-Monetary Concessions at This Time (e.g., Apology, Letter of Recommendation or Amended U-5).

B. Consider Suggesting that the Mediator Propose Conditional Offers.

C. Consider Orchestrating a Mediator's Proposal.

D. Don't Accept the Mediator's Proposal Too Quickly.

E. Consider Baseball or High/Low Arbitration to Close the Gap.

F. Consider Finalizing a Potentially Controversial Settlement Agreement Even Though the Dollar Amount is Still Open:

1. It commits both sides to the process;

2. It creates momentum -- how can we let it fail now?

G. Consider Whether the Process Should Keep Going or Take a Breather.

H. Consider Whether the Lawyers or the Parties Should Confer Separately with Each Other or with the Mediator.

I. Consider the Desirability of Imposing a Deadline (Even if Flexible).

VI. Conclusion- Mediation is an adversarial as well as a collaborative process.

"This Legal Update was first published by Practical Law Litigation web service at For more information about Practical Law, visit"

In Devon Robotics, LLC v. DeViedma, the US Court of Appeals for the Third Circuit held that Section 16 of the Federal Arbitration Act (FAA) does not confer appellate jurisdiction over an order denying a motion for summary judgment.

Devon Robotics filed a lawsuit against Gaspar DeViedma and McKesson Corporation over a failed agreement to distribute robotic medical devices. The agreement contained an arbitration clause. Devon Robotics sued for breach of fiduciary duty, tortious interference with current and prospective contractual relations, defamation and conspiracy. DeViedma filed a motion to dismiss in response, arguing in part that the complaint should be dismissed in favor of arbitration. The district court granted the motion in part, but allowed two of the claims to proceed against DeViedma.

DeViedma later filed a motion for summary judgment on these two remaining claims, arguing once again that they should be arbitrated. The district court denied summary judgment. DeViedma then filed an interlocutory appeal seeking review of the district court's order denying summary judgment on the arbitration issue. In turn, Devon Robotics sought to dismiss the appeal for lack of jurisdiction on various grounds, including that:

• The order denying summary judgment was not an order denying an application to compel arbitration, and thus it was not appealable under 9 U.S.C. § 16(a)(1)(C).
• DeViedma's notice of appeal was defective because he inadvertently cited to the wrong statute.
• DeViedma waived his right to compel arbitration because he did not seek to appeal the district court's denial of his motion to dismiss, and instead engaged in
protracted litigation.

The Third Circuit dismissed the appeal. First, the court reiterated the final judgment rule, and noted that the denial of a summary judgment motion is not a final order. However, the court also noted that the FAA provides appellate jurisdiction over certain categories of interlocutory orders, including orders denying an application to compel arbitration. However, looking at the plain language of Section 16 of the FAA, which enumerates the specific types of arbitration-related orders from which an appeal may be taken, and analyzing the structure of the FAA, the court held that the statute provides no support for exercising jurisdiction over an order denying summary judgment.

The court also rejected DeViedma's argument that the order denying summary judgment should be construed as a motion to compel arbitration. In doing so, the Third Circuit looked at other circuits for their approaches in treating denials of other motions as denials of motions to compel arbitration under 9 U.S.C. § 16(a)(1)(C). It rejected the narrow approach of the US Court of Appeals for the DC Circuit (declining to treat a defendant's motion to dismiss as anything else) and the broad approach of the US Courts of Appeals for the First and Sixth Circuits (treating the denial of motions to dismiss as refusals to enforce arbitration).
Instead, the Third Circuit adopted the functional approach taken in the US Courts of Appeals for the Fourth and Tenth Circuits, holding that:

• Appellate jurisdiction under Section 16 should be determined by reviewing:
• the caption of the underlying motion;
• the relief requested in a motion, rather than the title of the motion; and
• the label and operative terms of the district court's order.
• A party's failure to cite to the governing provision of the FAA does not necessarily preclude jurisdiction.

The Third Circuit cautioned that the court should only engage in a "limited look" beyond the caption of the underlying motion to ensure that a true motion to compel is not overlooked. The court also concluded that, to be appealable under Section 16 of the FAA, a motion must at least request an order compelling arbitration or an order directing that arbitration proceed. Lastly, the court noted that appellate jurisdiction is not precluded where a motion seeks to compel arbitration as an alternative or additional form of relief.

Applying its newly adopted approach, the Third Circuit:

• Found that the district court's order made no reference to a motion to compel or the FAA.
• Concluded that DeViedma's motion was clearly one for summary judgment and not to compel arbitration because the motion:
• was not captioned as a motion to compel but as a motion for summary judgment;
• did not reference the applicable sections or comply with the procedural requirements of the FAA;
• referenced FRCP 56; and
• did not request an order compelling arbitration but only requested summary judgment and dismissal with prejudice.

As a result, the court held it lacked jurisdiction under Section 16(a)(1)(C) of the FAA, and dismissed the interlocutory appeal.


| No Comments

Preparing for an international arbitration is no easy task. In addition to the substantive of the case, there are many organizational points to consider.

NYIAC's Program Committee Chair, Aníbal Sabater, addresses these points in a resource designed to aid counsel and parties as they prepare for an international arbitration hearing.

This checklist includes a series of topics and specific questions designed to aid counsel and parties as they plan for an international arbitration hearing.

• Hearing Dates and Location
• Hearing Sequence and Time Allocation
• Attendees
• Witness Testimony
• Documents
• Hearing Space Set-up and Technology
• Logistics and Catering

Prepare for your next hearing, an download the checklist:


| No Comments

By Mark J. Bunim, Esq.

On January 6, 2015, the United States Court of Appeals for the Second Circuit, in a short but impactful Summary Order, (Sotheby's International Realty, Inc. v. Relocation Group, 14-253 CV; 2015 WL 64265) further circumscribed the doctrine of "manifest disregard." This decision virtually eliminated an unhappy party's ability to overturn an arbitration decision not in its favor, by using this doctrine. In issuing this ruling, the Second Circuit has come closer to the First Circuit and the Fifth Circuit, both of which interpret the United States Supreme Court ruling in Hall Street Assoc. v. Mattel, 552 U.S. 576; 128 S. Ct. 1396 (2008) as eliminating the doctrine of "manifest disregard" as an option to overturn an arbitrator's award.


In 2008, the U.S. Supreme Court ruled in Hall Street that parties could not expand the scope of judicial review of arbitration awards under the FAA beyond the four grounds listed in § 10 for vacating an Arbitrator's Award. Those grounds are: ( i.) the award was procured by corruption, fraud or undue means; (ii.) there was evident partiality or corruption by an arbitrator; (iii.) the arbitrator was guilty of misconduct in refusing to postpone the hearing upon sufficient cause or in refusing to hear evidence pertinent and material to the controversy or was guilty of other misbehavior to prejudice a party and (iv.) an arbitrator exceeded his/her powers or imperfectly executed them so that a mutual, final and definite award upon the subject matter submitted was not made.

The Court did not directly deal with the question of whether an award could still be vacated on the ground of Manifest Disregard of the Law and, since the Hall Street ruling, different Circuit Courts have taken different views of this subject.

Shortly after the Hall Street opinion was issued, the Second Circuit ruled in Stolt-Nielsen, SA v. AnimalFeeds Int'l. Corp, 548 F. 3d 85 (2d Circuit 2008) that "manifest disregard" as the grounds to overturn an arbitration award did survive Hall Street. However, that doctrine now had to be viewed as a "mechanism to enforce the parties' agreement to arbitrate". Id. at 95. The Court said this meant that to use manifest disregard, the "error was so obvious that it would instantly be perceived as such by the average person qualified to serve as an arbitrator." This ruling left the door slightly ajar to a party that lost an arbitration to use manifest disregard as a [remote] possible ground to overturn the arbitration award.

The First Circuit, on the other hand, said that Hall Street meant that "manifest disregard to the law is not a valid ground for vacating or modifying an arbitral award for cases brought under the FAA." Ramos-Santiago v. United Parcel Service, 524 F. 3d 120 ( 1st Cir. 2008). The Fifth Circuit also held that after Hall Street, manifest disregard of the law is "no longer an independent ground for vacating an arbitration award under the FAA." Citigroup Global Markets, Inc. v. Bacon, 562 F. 3d 349 (5th cir. 2009).

On the other hand, the Sixth Circuit held that Hall Street only reduced the ability of the courts to use other grounds [other than the four set forth in the Court's opinion] to vacate an arbitration award but did "not foreclose" review for manifest disregard of the law Coffee Beanery, Ltd. V. WW, LLC 300 F 3d 415 (6th Cir. 2008). The Ninth Circuit has also held that Hall Street did not erase a court's ability to use the doctrine of manifest disregard to vacate an arbitral award but rather that manifest disregard is subsumed within FAA § 10 (a) (4) dealing with arbitrators exceeding their powers. Comedy Club, Inc. v. Improv West Asociates, 553. F. 3d 1277 (9th Cir. 2009).The Sotheby's Ruling

Sotheby's marks a meaningful move by the Second Circuit away from its Stolt-Nielsen opinion seven years ago and brings this New York based appellate court much closer to eliminating the "manifest disregard" argument.

In Sotheby's, supra, a District Court in Connecticut had vacated an arbitration award on the grounds of manifest disregard. The District Court had ruled that the arbitrators misapplied a Connecticut statute that required real estate brokers to meet certain statutory prerequisites before being able to collect a commission. The Second Circuit overturned the ruling holding that "[M]anifest disregard is a severely limited doctrine that imposes a heavy burden on the party seeking to vacate an arbitral award. It is a doctrine of last resort--its use is limited only to those exceedingly rare instances where some egregious impropriety on the part of the arbitrators is apparent."

The Second Circuit set forth a very difficult three prong test to find that "manifest disregard" has occurred. An appellant must argue and demonstrate that:

1. The law allegedly ignored [by the arbitrators] must not be unclear (on its face) and must be clearly applicable (to the facts at issue). (In the Sotheby's matter, the District Court had cited to unpublished cases and the statute's legislative history but admitted in its opinion that the statue, on its face, was unclear.)

2. The court must find that the arbitrators did err in the application of the law and that the outcome reached was erroneous. "Even where explanation for an award is non-existent, we will confirm it if a justifiable ground for the decision can be inferred from the facts of the case."

3. It must be demonstrated [by the challenger] that the arbitrators knew of the law's existence and its applicability to the case before them.

Thus, it should be apparent to followers of arbitration law that the bar has been raised so high by the Sotheby's ruling that "manifest disregard of the law" is virtually dead in the Second Circuit as a possible grounds to seek the vacation of an arbitration award [under the FAA].

Mark J. Bunim, is an Arbitrator and Mediator and on a number of panels including AAA and NAM .

Ten Mistakes Even Good Mediators May Make

| 1 Comment

By Stephen A. Hochman

1. Failing to get the right persons at the table.

2. Failing to explain the mediator's role as "agent of reality."

3. Permitting settlement negotiations to begin prematurely - i.e.,
a. prior to permitting the parties to vent;
b. prior to risk analysis and reality testing.

4. Failing to orchestrate the negotiations:
a. by discouraging "out of the ballpark" offers or demands;
b. by discouraging moves that send the wrong signal.

5. Failing to recognize that unrealistic expectations must be lowered gradually.

6. Being evaluative (a) too early or (b) in a joint session.

7. Failing to suggest ways to avoid reactive devaluation of sensible settlement proposals from the adversary.

8. Believing "bottom line" offers or demands.

9. Failing to "test the waters" before making a mediator's proposal.

10. Being impatient or failing to be persistent or giving up prematurely.

By Elizabeth J. Shampnoi Esq.

The arbitration clause is a key provision in any contract. In the event of a breach, this clause governs the method and process by which disputes are adjudicated. A well-drafted and considered arbitration clause is likely to result in a streamlined, efficient and cost-effective process that is tailored to meet the needs of the parties and keeps the process under control.

Still, what will happen in the event of a breach is likely not at the top of parties' minds when writing a contract; their primary focus is finalizing the deal. The arbitration clause becomes an afterthought, creating a rushed drafting process. Failing to thoughtfully consider terms or cutting and pasting a clause from another contract often leads to a frustrated dispute resolution process.

Taking the time to address eight key considerations when drafting an arbitration clause can prevent future conflict, cost and delay.

1) The Standard Arbitration Clause: Beginning with a standard arbitration clause will ensure that the intent to arbitrate is clear and unambiguous. You can find standard arbitration clauses on the websites of dispute resolution providers (i.e. AAA, CPR and JAMS). These clauses contain the necessary elements of an enforceable arbitration clause and act as a template from which counsel may begin drafting to shape the clause to meet the parties' needs.

2) What is arbitrable?: If parties decide that not all disputes arising from their agreement should be arbitrated, counsel should specifically outline which disputes the arbitrator is authorized to hear and those that are reserved for the courts.

3) The Locale of the Arbitration: Specifying a locale in your arbitration clause can help to avoid disagreement later. Key factors to consider include convenience for the parties and witnesses and the available arbitrator pool.

4) Rules: Each administering organization offers a variety of rules to choose from depending on the substantive nature of the contract. They also may have rules designed for expedited and large complex matters. Understanding the differences between these rules is critical to selecting the most favorable set for your client. These rules, though, likely only address rules of arbitration. It is up to counsel to also identify the substantive and procedural law applicable.

5) The Arbitrator:
Background of the arbitrator: Preferred background can be included in the arbitration clause. However, avoid being too specific since if the pool is small, this could add delay and limit your choices.

Number of arbitrators: When deciding whether to use one or three arbitrators, consider cost and the nature of your agreement. Three arbitrators will automatically cost three times as much. Still, if the issues are complex or there is a lot of money at stake, the parties may wish to have three people determining liability and damages.

Method of selection: In the case of three arbitrators, each party may prefer to select one arbitrator and have those arbitrators identify the third. Such arbitrators may be neutral or non-neutral, which should be clearly outlined. Setting forth a deadline by which the arbitrator will be appointed and a default provision for non-compliance will prevent delay.

6) Discovery: Discovery in arbitration has become akin to that of litigation. To keep arbitration more efficient and less costly than litigation, counsel should consider including permitted and excluded forms of discovery and deadlines for completion.

7) Motion Practice: Motion practice should only be considered when it will streamline the process by limiting or narrowing the issues. One tool to ensure efficient motion practice is to draft a clause that sets forth the standard by which the arbitrator may consider motions (i.e., likelihood of success on the motion).

8) Confidentiality: The arbitrators and administering organization are bound to maintain the confidentiality of the proceedings; however, the parties are not absent agreement. The arbitration clause should contain language requiring the parties to keep the existence and substance of the proceedings private.

Elizabeth J. Shampnoi Esq. is a Director in the Dispute Advisory and Forensic Services Group at Stout Risius Ross, Inc.

"This Legal Update was first published by Practical Law Arbitration web service at For more information about Practical Law, visit"

In Chevron Corp. v. Ecuador No. 13-7103, 2015 WL 4619842 (D.C. Cir. Aug. 4, 2015), the US Court of Appeals for the District of Columbia Circuit considered whether to allow recognition and enforcement of an UNCITRAL award in Chevron's favor where Ecuador had consented to allow the tribunal to consider issues of arbitrability.

The court noted that where a contract is silent on the matter, courts presume that the parties intend courts, not arbitrators, to decide disputes about arbitrability. However, in 1993, the US and Ecuador signed a bilateral investment treaty(BIT) providing that the investor company may submit a matter to arbitration under the UNCITRAL rules, which the BIT incorporated by reference. Those rules provide that the arbitral tribunal has the power to rule on objections that it has no jurisdiction, including any objections with respect to the existence or validity of the arbitration clause and to determine the existence or the validity of the contract of which an arbitration clause forms a part. Therefore, Ecuador consented to allow the arbitral tribunal to decide issues of arbitrability, including whether Chevron had "investments" within the meaning of the treaty.

The court concluded its opinion noting that four courts have also considered and rejected Ecuador's argument that Chevron did not have the right to avail itself of the BIT's arbitration clause and stated that "Ecuador has given us no reason to conclude that these many authorities ruled in error." Ecuador had challenged the award in the Dutch court system and the challenge was rejected by the District Court of The Hague, The Hague Court of Appeal and the Dutch Supreme Court.

Case: Chevron Corp. v. Ecuador No. 13-7103, 2015 WL 4619842 (D.C. Cir. Aug. 4, 2015

An article by AAA Arbitrator Theodore Cheng entitled "Developments on Judicial Review Under the FAA after Hall Street," in Alternative Dispute Resolution, an on-line publication of the ABA Litigation Section. You can read the article at the link below:

Arbitrator Disclosures - What are your thoughts?


When an arbitrator is conducting a conflict check, should his or her conflicts database include arbitration counsel and their law firms, expert witnesses and other professionals? How extensive should the disclosures be? Please post your thoughts/comments below.

With changes affecting health care law, experienced mediators interested in mediating health care-related matters must become well-educated in the nuances and uniqueness of disputes within the field. This highly interactive, advanced mediation workshop provides such critical information.

Topics include:

• Health Care Disputes Subject to Litigation
• Accountable Care Organizations (ACO) Disputes
• Medical Staff Fair Hearings and Peer Review
• The Commercial Mediation Process: Soup to Nuts
• Anatomy of a Medical Malpractice Case
• Research Relevant to Medical Malpractice Lawsuits

Who Should Attend? Experienced mediators & attorneys, administrators, and health care professionals interested in the use of mediation in resolving disputes in their fields (prior mediation training is required to fully benefit).

For the full agenda, faculty bios, and CLE credit information, please visit:

About this Archive

This page is an archive of entries from August 2015 listed from newest to oldest.

July 2015 is the previous archive.

September 2015 is the next archive.

Find recent content on the main index or look in the archives to find all content.



Powered by Movable Type 5.11