USA Trends and Developments Contributed by: Matthew Kirtland, Denton Nichols and Courtney Hikawa, Norton Rose Fulbright US LLP
Norton Rose Fulbright US LLP 1550 Lamar Street Suite 2000 Houston TX 77010 USA Tel: +1 713 651 5151 Fax: +1 202 662 4643 Email: matthew.kirtland@nortonrosefulbright.com Web: www.nortonrosefulbright.com
Introduction The landscape of international arbitration in the United States is mature yet still evolving. The US Supreme Court has begun to rethink decades of “arbitration exceptionalism”, signalling its view that arbitration agreements deserve no more – and no less – judicial favour than other types of contracts. Even so, US courts have fortified their reputation for unhesi - tating enforcement of arbitral awards against foreign sovereigns and state-owned enterprises, cementing the country’s status as a go-to forum to enforce arbi - tral awards against severing parties. These judicial trends stand in contrast, however, to the US executive branch’s trajectory, with successive presidential administrations pausing on International Investment Agreements and Investor–State Dispute Settlement. Meanwhile, recent rulings have curtailed a once- powerful tool of US-style discovery for parties seek - ing evidence in support of arbitrations seated abroad, forcing practitioners to look for possible substitutes. Together, these developments paint a picture of a juris - diction that remains deeply important to international arbitration, but whose relationship with it is evolving in complex and sometimes contradictory ways. “Arbitration Exceptionalism” In recent cases, the US Supreme Court has signalled a possible departure from “arbitration exceptional -
ism”. A single federal statute, the Federal Arbitration Act (FAA), governs both international and domestic arbitration in the US. The core part of the FAA is over 100 years old and is relatively short, with few detailed rules. Because the FAA’s text leaves many specifics unaddressed, court decisions – especially those of the US Supreme Court – have filled in the gaps and play a central role in shaping US arbitration law. During the latter part of the 20th century and into the 2010s, the US Supreme Court repeatedly stressed that the FAA reflected a federal policy to favour and promote arbitration, stating in Moses H . Cone Memo- rial Hospital v Mercury Construction Corp ., 460 U.S. 1, 24 (1983) that the FAA “is a congressional declaration of a liberal federal policy favoring arbitration agree - ments”, and in AT & T Mobility LLC v Concepcion , 563 U.S. 333, 346 (2011) that “our cases place it beyond dispute that the FAA was designed to promote arbitra - tion”. Building on that view, the Supreme Court’s FAA decisions favoured liberal enforcement of arbitration agreements, even over objections that other federal statutes or state law should render the dispute non- arbitrable; see Southland Corp . v Keating , 465 U.S. 1, 16 (1984), holding that the FAA superseded California state law that purported to invalidate franchisor-fran - chisee arbitration agreements, and Shearson / Ameri- can Express v McMahon , 482 U.S. 220, 227-28 (1987), holding that the federal Securities Exchange Act’s conferral of “exclusive jurisdiction” on federal courts did not override an arbitration agreement enforceable under the FAA.
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