USCIB Urges Reversal of 1-800 Contacts FTC Ruling

USCIB filed an amicus brief with regards to 1-800 Contacts, Inc. case to highlight the challenges American businesses would face under the recent Federal Trade Commission’s (FTC) decision’s approach to antitrust liability for trademark settlements, and explain the potential negative impacts the decision would have on businesses, consumers and competition if left to stand.

USCIB General Counsel Nancy Thevenin led the process for USCIB. “The Commission’s decision creates substantial uncertainty regarding the enforcement and settlement of intellectual property rights, increases the risk of arbitrary enforcement against even routine settlements, and potentially exposes settlements to such risk for decades,” warned Thevenin. “The decision should be reversed.”

Earlier this year, the FTC decided to impose antitrust liability against 1-800 Contacts, the largest online retailer of contact lenses in the U.S., on the basis that 1-800 Contacts’ settlements of trademark infringing lawsuits against at least fourteen competing online contact lens retailers restricted trade. Among other things, USCIB’s amicus argues that the Commission’s decision ignores the critical importance to business of intellectual property rights and its enforcement and would unfairly require the lawful exercise of such rights to a higher pro-competition standard.

USCIB thanks Eileen M. Cole, Bryant D. Gant and Seiji Niwa of member firm White & Case for their work with the amicus.

 

USCIB Sponsors Seminar on Mitigating Business Risk With Arbitration

USCIB/ICC USA sponsored a seminar in Albuquerque, New Mexico on June 14 on international arbitration and how that state’s businesses can use arbitration to mitigate the risks of doing business overseas. Some thirty New Mexico business executives, lawyers and law students attended the presentation, which was opened by Roberta Cooper Ramo, former president of both the American Bar Association and the American Law Institute.

Marek Krasula, counsel for the ICC International Court of Arbitration in New York and David Wilson, partner at Sherman & Howard in Denver, provided an overview of ICC arbitration and how to best draft contracts to provide for it. Matthew Draper, a partner at Draper & Draper in New York and Santa Fe, moderated a panel discussion addressing issues of particular relevance to local companies, such as using arbitration to protect IP rights, recovery of attorneys’ fees by prevailing parties, and keeping the costs of arbitration to a minimum.

“The ICC’s new Expedited Procedures, which apply when less than two million dollars is at stake, reduce significantly the time and cost of dispute resolution, and may be a good fit for New Mexico companies,” said Draper.

Vice Dean of the University of New Mexico School of Law Camille Carey noted in her closing remarks that she hoped the law school would expand opportunities for students to learn about international arbitration.

Annual Proskauer Lecture Analyzes Challenges of Arbitration Community

As in previous years, USCIB was honored to co-sponsor the 7th annual Proskauer Lecture on International Arbitration along with Proskauer, Columbia University School of Law’s Center for International Commercial and Investment Arbitration Law and the International Chamber of Commerce (ICC) International Court of Arbitration. Taking place on May 14, the event opened with a welcome by Peter Sherwin from USCIB member law firm, Proskauer, and featured a lecture by widely respected commercial and investment arbitrator Mark Kantor.

The lecture focused on the topic Legitimacy Challenges to International Commercial Arbitration on the Horizon? Kantor reflected on the challenges that the arbitration community is currently facing, including bad press from cases that involve state or state-owned entities with large monetary awards, as well as the lack of diversity in the arbitration industry.

USCIB’s General Counsel, who leads USCIB’s work on Arbitration, Nancy Thevenin gave a closing statement, thanking the co-sponsors and attendees. “The Proskauer lecture series draws globally-renowned experts to educate the international arbitration community in New York, and beyond, on specific topics,” reported Thevenin following the successful event. “Through presentations like Mark’s, the lecture series has become a must-attend event.”

USCIB, or ICC USA, is the U.S. National Committee to the ICC and serves as a contact point in the U.S. for the ICC’s multi-faceted dispute resolution services.

Arbitration Committee Meetings Plan for Upcoming Year

USCIB President and CEO Peter Robinson speaks at the NY Arbitration Committee luncheon

USCIB co-hosted Washington, DC and New York City luncheons of its Arbitration Committee on January 25 and 29, respectively. The meetings brought together local arbitration professionals for an update on new initiatives, as well as a look back on 2018 accomplishments by the ICC International Court of Arbitration©.

Hosted by Washington, DC Subcommittee Chair, Jonathan Greenblatt of Shearman & Sterling, the Washington Luncheon featured a presentation by and discussion with the Secretary General of the ICC Court Alexander Fessas, who provided an update on the ICC’s cases in 2018, use of the expedited and the emergency arbitrator procedural rules and the ICC Court’s goals for 2019. This was followed by an interactive panel discussion with Grant Hanessian of Baker & McKenzie, Claudia Frutos-Peterson of Curtis, Mallet-Prevost, Colt & Mosle LLP, and Christopher Ryan of Shearman & Sterling, providing practical guidance for handling arbitrations involving states and state-entities and describing key differences when handling investor-state and commercial disputes. The program ended with USCIB General Counsel Nancy Thevenin providing an update on developments in USCIB’s Arbitration Committee.

Hosted by Hanessian, the New York Luncheon several days later featured executive summaries from key members of the ICC International Court of Arbitration, including President Alexis Mourre, Secretary General Alexander Fessas and Counsel for North American Cases Marek Krasula. Mourre provided insight into trends in U.S. cases during the past year and expected developments in the coming year. This was followed by a town hall-style Q&A moderated by Claudia Salomon of Latham & Watkins, who also serves as the vice president of the ICC Court, with questions about the ICC Court’s diversity initiatives, arbitrator appointment process and plans to publish some of its awards.

USCIB Supports Singapore Convention on Mediation 

International businesses now have a powerful tool that will greatly facilitate international trade and commerce. The new Singapore Convention will make enforceable settlement agreements resulting from international mediation.

USCIB joined the US Chamber of Commerce, NFTC, and NAM to co-sign a letter of support for the U.S. signing and ratifying the Singapore Convention on Mediation. The letter was sent to U.S. Secretary of State Michael Pompeo on November 1. The treaty negotiation was launched by the U.S. with the aim of developing a cost-effective international legal mechanism for resolving cross-border commercial disputes between private parties.

“By encouraging the use of mediation as a viable path to resolving commercial disputes, the Convention reduces cost and eliminates the need for duplicative litigation,” the letter stated.

The Convention also improves the enforcement process by obliging governments to recognize the legal status of any mediated settlement. As a result, the Singapore Convention helps mitigate risk when entering into a commercial relationship with businesses in foreign markets and raises the standards of fair trade globally.

USCIB Hosts Arbitration Luncheon on B2B Data Breaches Disputes

Program focused on the coming wave of data privacy and security disputes between businesses, the legal claims and defenses asserted in these cases and the key role of ADR in resolving these disputes.
Where there is a breach, companies need to examine who owned the data, who had custody of the data and the source of the breach.

 

USCIB’s Arbitration Committee hosted a luncheon with Squire Patton Boggs on October 3 focusing on arbitrating B2B data breach disputes. As data breaches are increasingly more common, business-to-business (“B2B”) disputes arising from security incidents between companies are also on the rise. The luncheon program focused on the coming wave of data privacy and security disputes between businesses, the legal claims and defenses asserted in these cases and the key role of ADR in resolving these disputes.

Divided into two panels, the first panel, which was moderated by USCIB General Counsel, Nancy M. Thevenin, focused on the business problem of data breach disputes. Speaker, Nancy Saltzman, former executive vice president, general counsel and company secretary of EXL Service, advised businesses to review their new and old contracts for data breach provisions and risk allocations. Where there is a breach, companies need to examine who owned the data, who had custody of the data and the source of the breach. Saltzman explained that a breach can occur internally within one’s own company via human or system error or externally via hacking.

Edward Chang of Cyber Risk Management at Travelers described how a breach may release a company’s sensitive information or personally identifiable information of its customers. Chang explained that in terms of insurance, this is a fast moving field with about 70 different issuers that provide coverage for B2B data breaches. He specified that there are four basic schemes for coverage: (a) incident response; (b) business interruption losses; (c) fraud and business email compromise; and (d) liability. Both speakers agreed that it is not uncommon for companies to quickly go through $10 million worth of coverage where a breach occurs.

The second panel, moderated by Frederic Fucci, an independent arbitrator with Fucci Law & ADR, PLL and chair of the Transactional Lawyers Subcommittee focused on how alternative dispute resolution (ADR), as opposed to litigation, was an effective means of resolving these disputes. Speaker Joseph V. DeMarco, founder and principal at DeVore & DeMarco LLP, emphasized that the confidentiality of mediation and arbitration was a key advantage. Speaker, Gary L. Benton, FCIArb, FCCA, an independent arbitrator with Gary Benton Arbitration and founder of the Silicon Valley Arbitration & Mediation Center, added that with ADR, the parties can select neutrals with the technical expertise to effectively resolve data breach disputes.

To conclude, the program emphasized the importance for businesses to focus on and negotiate the data breach provisions of any contract in which they are providing access to their data and to consider obtaining insurance to protect against data breaches. The program also emphasized using ADR to resolve these disputes. For example, using the standard ICC arbitration clause followed by provisions for the place of arbitration, applicable law, number of arbitrators with required expertise and language would be a sufficient starting place.

The New York Convention Turns 60

By Grant Hanessian

Hanessian is a partner at Baker McKenzie in New York and chair of USCIB’s Arbitration Committee. He is the U.S. member of the ICC Court of Arbitration and an adjunct professor of law at Fordham Law School. Contact him at grant.hanessian@bakermckenzie.com

Grant Hanessian

A few weeks ago, the 60th anniversary of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards – the “New York Convention” – was celebrated at United Nations headquarters and the U.S. Courthouse in New York.

The tremendous success of the New York Convention, which provides for national court enforcement of foreign arbitration awards and agreements, is one of the principal reasons arbitration has become the preferred choice of parties around the world for resolving cross border commercial disputes. Virtually all the world’s major trading nations have ratified the convention.

Following a conference at the UN featuring representatives from the International Chamber of Commerce, UN Commission on International Trade Law (UNCITRAL), International Bar Association, International Council for Commercial Arbitration, and U.S. Department of Commerce, a “birthday” celebration was held at the U.S. Courthouse on Pearl Street in Manhattan. ICC and UNCITRAL served as co-hosts of the event.

“The New York Convention is a tremendous example of how business and governments can work together to strengthen global governance, and its enduring relevance is a testament to ICC’s leadership in shaping the global environment for private dispute resolution over the past century,” ICC Secretary General John Denton observed at the reception. USCIB General Counsel Nancy Thevenin, who is immediate past chair of the New York State Bar Association International Section, helped organize the event and also made remarks.

ICC’s preeminence in international commercial arbitration is of course well known. The ICC International Court of Arbitration, created in 1923 to encourage settlement of disputes arising from international trade, has administered more than 23,000 disputes involving parties and arbitrators from 180 countries and independent territories.

It may be less well known that ICC initiated the process that led to creation of the New York Convention. At the UN conference, Anna Joubin-Bret, secretary of UNCITRAL, noted that ICC’s Commission on Arbitration and ADR prepared the first draft of the convention and submitted it to the UN in 1953. The UN Economic and Social Council then produced an amended draft that was discussed during a conference at UN Headquarters in May and June 1958, resulting in the UN’s adoption of the New York Convention on June 10, 1958.

Prior to adoption of the New York Convention, parties seeking to enforce foreign arbitral awards usually had to obtain two court decisions of exequatur, one from the country where the award was issued and another at the place of enforcement.  The convention eliminated the requirement of double exequatur, significantly restricted the grounds for national court refusal of recognition and enforcement and placed the burden of proving such grounds on the party opposing such recognition and enforcement.

Under the New York Convention, national courts considering applications for recognition and enforcement of foreign awards may not review the merits of the arbitral tribunal’s decision. National courts have generally construed the grounds for refusal of recognition and enforcement under the Convention narrowly, and they have exercised their discretion to refuse recognition and enforcement only in exceptional cases. Enforcement of arbitral awards by national courts is now considerably easier than enforcement of national court judgements in many countries, greatly facilitating resolution of international business disputes.

The New York Convention, and complementary UNCITRAL texts such as the UNCITRAL Model Law on International Commercial Arbitration in 1985, have led to an increasingly harmonized arbitration law. The UNCITRAL model law, which has now been adopted by 111 jurisdictions in 80 countries, essentially repeats the grounds of the New York Convention for enforcement and setting aside foreign awards.

At the UN event, Helene van Lith, the secretary of the ICC Commission on Arbitration and ADR, emphasized the role ICC continues to play in applying and interpreting the convention through Court of Arbitration scrutiny of awards and the publication of the forthcoming third revised edition of the ICC Guide to National Procedures for Recognition and Enforcement of Awards Under the New York Convention. The increasing availability of national court decisions interpreting the Convention and UNCITRAL model law, through such sources as the ICC Guide and the online Case Law on UNCITRAL Texts, has importantly contributed to a uniform and predictable application of arbitration law around the world.

In these times when multilateral trade arrangements are under stress, everyone interested in the continued growth of international business should applaud the extraordinary vitality of the New York Convention as it enters its seventh decade.

August 14, 2018

 

USCIB Joins ICC in Celebrating Anniversary of NY Convention

USCIB General Counsel Nancy Thevenin

New York’s international arbitration community recently celebrated the 60th anniversary of the New York Convention, which provides a universal basis for enforcement of arbitration agreements and awards is a source of particular pride to the International Chamber of Commerce (ICC), which initiated the drafting process that led to the Convention’s adoption by the United Nations in 1958. 

USCIB General Counsel Nancy Thevenin, who is also the Immediate Past Chair of the New York State Bar Association International Section and George Bermann Professor at Columbia Law School, helped organize the reception and noted in her remarks, “There is an elegance to the fact that this sparely worded document has been one of the mightiest tools employed by the international business community to foster trade and investment worldwide.”

The Convention, and the many complementary UNCITRAL projects, demonstrate the abiding importance of state cooperation to promote efficient, effective and equitable resolution of commercial and investment disputes.

For more information on this event, please visit ICC’s website.

Russian Sanctions: How Do They Affect US Business?

A roundtable discussion was held at HodgsonRuss LLP in New York on April 26, connecting participants from Washington DC, New York and Europe to discuss the recent sanctions imposed by the U.S. Government on Russia, enforcement trends and how they affect the way the U.S. companies conduct business around the globe. This event was organized by the Committee on Eastern Europe and Committee on International Trade of the International Section of the New York State Bar Association. Distinguished panelists included Charles R. Johnston (Citi), chair of USCIB’s Trade and Investment Committee, Michael Hendrix, OFAC, U.S. Department of Treasury, Hon. Volodymyr Yelchenko, permanent representative of Ukraine to the United Nations and Robert J. Leo, chair of the Committee on International Trade. The discussion was moderated by Serhiy Hoshovsky, chair of the Committee on Eastern Europe. Participation from overseas was moderated by Oleh Beketov, chapter chair in Kiev.

The event was opened by Paul M. Frank, a former chair of the International Section and renown international law attorney who hosted the event at his law firm. Yelchenko provided a comprehensive political context for the Russian sanctions and reminded of the events that led to their initial imposition in 2014. Michael Hendrix, an enforcement officer with OFAC, summarized legal framework for the sanctions and enforcement priorities as well as discussed some recent enforcement actions. Johnston provided a great overview of the sanction regime from the perspective of the U.S. business community, explaining in detail how the sanctions are becoming a new reality and how the U.S. businesses adapt to doing business. He also shared practical experiences of what U.S. companies do to stay compliant. Leo shared a very useful handbook on sanctions and practical tips on what to do when issues arise and how to stay compliant.

“The event provided a unique opportunity for the participants, especially those from the overseas, to ask questions and hear from people who are on the forefront of the sanction policy and enforcement at the US government, business community and legal profession,” said Nancy Thevenin, USCIB’s general counsel. “All panelists and participants agreed that the event was a major success and provided a great platform for sharing views and discussing major issues affecting business and legal community not only in the U.S. but also internationally.”

US and Canada ICC National Arbitration Committees Hold Annual Meeting

 

Axel Baum receives award

The co-chairs of USCIB/ICC USA’s and ICC Canada’s Arbitration Expatriate Subcommittees, Charles Kaplan of Orrick and Aren Goldsmith of Cleary Gottlieb Steen & Hamilton LLP organized their annual joint meeting in Paris on April 9th. The meeting was also organized by Andrew McDougall and Kirsten Odynski both of White & Case.

Held at Orrick, the co-chairs opened the meeting and introduced Alexander Fessas, secretary general of the ICC Court, who gave a presentation about recent developments at the ICC Court. Thereafter, Chris Moore of Cleary Gottlieb Steen & Hamilton LLP in London discussed the ICC Practice Note on summary dispositions and its future application. Vasuda Sinha of Freshfields Bruckhaus Deringer’s Paris office ended the substantive segment of the meeting with a presentation comparing the practice of the Canadian, U.S. and Paris national courts in supporting the taking of evidence for use in international arbitrations.

The meeting ended with McDougall providing an update on ICC Canada’s activities, and Grant Hanessian, chair of the USCIB/ICC USA arbitration committee, discussing recent developments with the group.

At that time, Nancy Thevenin, USCIB’s general counsel, presented Axel Baum of Hughes Hubbard & Reed, LLP with a plaque recognizing him for “his many years of leadership of the U.S. arbitration community in Europe and long-standing service on the ICC Arbitration Commission.”

Baum, who was one of the longest serving U.S. members of the ICC Commission, also served as the first chair of the U.S.’s arbitration expatriate committee and helped start the yearly tradition of the joint meeting. Baum also oversaw the transition of group’s leadership to Kaplan and Goldsmith.