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By Marcel Tabajara Dias Ruas (Bogo & Ruas Sociedade de Advogados, Indaial, Santa Catarina, Brazil)

The Brazilian Superior Court of Justice (hereafter “STJ”) has recently delivered an important judgment regarding the enforceability of contracts containing arbitration clauses.

Under Brazilian Law (Civil Procedure Code, article 585, II), contracts and other private documents establishing the duty of a party to pay a precise amount of money at a pre-established date, if signed by two witnesses, might be enforced before the Courts regardless of a prior judgment. In the aforementioned judgment, the STJ held that such a rule is to be applied even if the agreement being enforced contains a dispute resolution clause under which the parties must settle any dispute through arbitration.

Continue reading Enforcement action of contracts containing arbitration clauses in Brazil

By Artem Doudko and Veronica Astashonak of White & Case LLP

There is no doubt that the decision in Gazprom[1] was widely anticipated by everyone in the arbitration community. Primarily it was seen as an opportunity for the European Court of Justice (“ECJ”), now renamed the Court of Justice of the European Union (“CJEU”), to depart from its highly controversial decision in West Tankers[2], if not to overturn it altogether. But this wasn’t the only reason. The Gazprom case allowed the CJEU to consider and bring more clarity to a number of other issues, such as the impact of the Recast Regulation[3], the relationship between European Union law and obligations of Member States under other international law instruments and the position of arbitral tribunals that are not seated in a Member State.

Continue reading “Thou shall not sue!” – who decides?

PART I – PART II

By Samiron Borkataky (I. G. & Associates, New Delhi)

In a recent case before the High Court of Delhi (India), the Court hearing an application for an interim injunction to restrain an ICC arbitration on grounds of alleged fraud, had to consider the following issues:

1. Whether Section 5 of the Indian Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) read in conjunction with Section 16 of the said Act, “confers an absolute bar on the judicial authority to entertain a suit in a case where there is an arbitration clause between the parties”?[1]

2. In a case where “fraud, forgery, manipulation, and collusion are alleged by one party, would the disputes be arbitrable; and whether the facts of the present case warrant entertaining the present suit for declaration and permanent injunction; and grant of temporary injunction during the pendency of the main suit”?[2]

Continue reading FRAUD: The Demon of Arbitration in India – Part II of a II Part Series.

by Nicholas Querée, Peters & Peters Solicitors LLP

Multilateral development banks and the fight against bribery, corruption and fraud

In order to safeguard billions of US dollars invested in projects in developing and transitional economies each year, international multilateral development banks (“MDBs”) are increasingly using internal procedures to debar or blacklist firms and individuals suspected of having participated in “sanctionable practices”, such as bribery, corruption, and fraud, from obtaining development bank-financed contracts. In doing so, MDBs have increasingly adopted roles akin to more familiar transnational bribery and corruption regulators such as the US Department of Justice and the UK Serious Fraud Office.

The World Bank (the “Bank”) in particular has expressed its stated aim to facilitate a “global conversation against corruption”, in which it debarred over 250 entities and individuals in 2013 and over 100 in 2014. Most recently, in February 2015, the Bank sanctioned four companies on the basis of suspected fraud and corruption in relation to projects in Bolivia, Bangladesh and Cambodia. Debarment can result in serious financial consequences for entities and individuals, particularly given that from 2010 the five largest MDBs have agreed to mutual recognition of debarment decisions.

Continue reading Challenging supranational regulators through an independent arbitral mechanism: the World Bank Sanctions Board

by Louis A. Russo & Donald Houser, Alston & Bird[1]
In Matter of Belzberg v. Verus Invs. Holdings Inc., 2013 NY Slip. Op. 06729 (No. 149, October 17, 2013), the New York State Court of Appeals (the highest court in New York State) reversed a decision of the Appellate Division, holding that a non-signatory could be compelled to arbitrate under the direct benefits estoppel doctrine (i.e. an exception to the general rule that only signatories to an arbitration agreement are bound to that agreement). In considering the law developed under the Federal Arbitration Act for guidance, the Court relied on previous precedent set by the Second, Fourth, Fifth and Eighth Circuit Court of Appeals of the United States. In doing so, the Court concluded that the benefit received by the non-signatory was indirect, rather than direct, because it could not be traced directly to the agreement containing the arbitration clause.
Continue reading New York’s Highest Court Rejects Attempt to Compel Nonsignatory to Arbitrate Under the Direct Benefits Estoppel Doctrine