The Case for a Coherent Application of Chapter 2 of the Federal Arbitration Act – Vol. 22 No. 1

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Author: Richard W. Hulbert*

Published: July 2011

Description: A decade and a half ago one commentator thought it “striking” that more than a quarter century of life after American accession, “there is still no real consensus” on “just when the New York Convention is supposed to be applied by American courts.” It is now 40 years since the United States became a party to the Convention, and there is still an absence of consensus on the application of the Convention. Indeed, intervening developments in the law since Professor Rau offered his accurate observation have only served to deepen the confusion and complexity that confounds international commercial arbitration in the United States. This is not so much a problem for the prevailing party in an arbitration conducted abroad seeking to enforce the award in the United States; in that case the command of the Convention and Chapter 2 of the Federal Arbitration Act, enacted to implement American accession to the Convention, have largely cleared the path. For an award rendered in an international arbitration conducted in the United States, however, serious difficulties persist, for reasons that reflect history, less than pellucid legislative draftsmanship, and judicial reluctance. The result is not compelled or preordained. We have in existing statutory and decisional law the materials necessary to extricate ourselves from this unhappy state of affairs. It is long since time that we did so.

These difficulties have become an issue of special current importance because of the initiative of the American Law Institute to undertake the preparation of a Restatement of the international commercial arbitration law of the United States.

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*The author is Senior Counsel to Cleary Gottlieb Steen & Hamilton LLP, an adjunct professor at New York University School of Law, and a former Vice Chairman of the ICC International Court of Arbitration. The author wishes to acknowledge the valuable research and editorial assistance of Rachel Goldbrenner, an associate at the Cleary Gottlieb law firm.