Tag Archives: ADR-IN Blog

Quick Hits: Timeliness, vacation selection, Deflategate and conduct unbecoming

Arbitrator exceeded authority ruling on the merits after finding grievance untimely

 Amalgamated Transit  Union, Local 85 grieved the actions of the Port Authority of Allegheny County in unilaterally revising its performance code governing absenteeism. At the arbitration the Port Authority maintained  that the grievance was untimely, and even if timely was without merit. The Arbitrator agreed that the grievance as untimely but ruled further that in any event the PA had not breached the contract. The Union sought to vacate that portion of the decision addressing the merits of the grievance. It claimed that once the arbitrator determined the grievance was untimely the arbitrator was without authority to rule on the merits. The trial court rejected the Union’s efforts, finding that the Union had never sought to bifurcate the procedural from the substantive issues. On appeal the Commonwealth Court of Pennsylvania reversed. It agreed with the Union, concluding:  ” Because the merits portion of the arbitration award cannot logically flow from the CBA due to the arbitration panel’s disposition as to timeliness, the arbitration award does not satisfy the essence test.”
The Court’s opinion can be found here.

City erred in canceling vacations during Republican convention 

The City of Cleveland, in anticipation of hosting the Republican National Convention, announced that no vacations would be approved for the time period surrounding the convention. The Cleveland Police Patrolmen’s Association grieved this decision as contrary to its cba. The parties agreement provided for 52 one week “furlough” [vacation] periods during the calendar year and further provided that the same number of officers would be on furlough during each of the furlough periods. Arbitrator Alan Miles Ruben upheld the Union’s grievance. He found that the management rights provision of the cba did not override the explicit language of the cba. However, in light of the disruption that would be created in recanvassing for vacation, and the undisputed need for an “all hands” response, he ordered the City to pay the most senior fifty (the number otherwise eligible for vacation)  Patrol Officers scheduled on duty, in seniority rotation, time at the call in rate overtime rate. Cleveland.com reports  on the decision and links to the award here.

Two briefs filed seeking reconsideration of Deflategate decision

 The NFL Players Association has filed a request for reconsideration with the Second Circuit, seeking a rehearing of the Court’s decision upholding the suspension of Tom Brady. A copy of the Union’s brief is available here. The New England Patriots filed  an amicus brief in support of the request.


Termination of police officer for racially derogatory text messages upheld

Arbitrator Carey M. Fischer has upheld the termination of a Fort Lauderdale police officer who engaged in an exchange with coworkers of text messages containing “disparaging and offensive racial terminology.” Arbitrator Fischer rejected the officer’s claims that the messages had been improperly intercepted, that he had a right to privacy in communicating with fellow officers, and that his communications were protected by the First Amendment. The arbitrator observed: “The heat of battle is one thing; denigrating a whole group as part of one’s personal entertainment is another. A slip of the tongue in a fit of pique or a one time indiscretion maybe allowable. But, the conduct in this case is not.” Accordingly he upheld the decision of the City that grievant had engaged in “conduct unbecoming a police officer” and found sufficient cause for dismissal. Local10 reports on the case and links to Arbitrator Fischer’s award here.

Source: ADR

CA9: Decision that an award is not "plausible" is insufficient to vacate

A dispute arose between Drywall Dynamics, Inc and the Southwestern Regional Council of Carpenters concerning attempts by the Company to withdraw from a multi employer bargaining arrangement. The Company’s initial attempt to terminate its participation was rejected by the Union as untimely. A second rejection occurred after the association and the Union entered into a Memorandum of Understanding extending the cba for an additional year. In response to a grievance concerning the Company’s claimed breach of the cba, an arbitration panel determined that the Company’s purported withdrawal was untimely. 

The Union sought to confirm the award and the Company sought to vacate it. The District Court vacated the award, concluding that the arbitrator’s interpretation of the agreement was not plausible, and that it was contrary to public policy.

On the Union’s appeal, the Ninth Circuit has reversed. In doing so it recognized that language of several earlier opinions suggested that an award would be deemed to have drawn its essence from the parties cba as long as it was a “plausible interpretation of the contract.” It determined however, that the plausibility inquiry did not authorize an independent basis for an attack on the merits of the award. Finding that the term was “somewhat misleading” the Court decided to eliminate its use. It concluded:

...it is time for us to retire the use of “plausibility” as a term to describe the courts’ role in reviewing labor arbitration awards. We do not, of course, propose any substantive change to the settled law in this area, nor could we. We merely reiterate, and emphasize, the fundamental concept  Hawaii Teamsters articulated, drawing on decades of Supreme Court jurisprudence: the quality—that is, the degree of substantive validity—of an arbitrator’s interpretation is, and always has been, beside the point. Instead, the appropriate question for a court to ask when determining whether to enforce a labor arbitration award interpreting a collective bargaining agreement is a simple binary one: Did the arbitrator look at and construe the contract, or did he not?

Concluding that the panel’s  analysis was grounded in a reading of the parties’ agreement the Court found that the award was entitled to be confirmed.

The Court also rejected the Company’s public policy challenges to the award which had claimed the award violated a policy of voluntary relationships between employers and multi employer associations and that it improperly imposed union representation on the Company’s employees. 


The Ninth Circuit’s opinion can be found here.
Source: ADR

Working below classification, seniority and management rights

These were the topics in issue in a recent award by Arbitrator Richard Beens.

 The dispute arose between Boise White Paper and Steelworkers Local 159 and involved interpretation of the parties’ cba. The agreement had what the arbitrator described as a strong management-rights clause providing:


Section 3.1 The Company has the right to assign work to employees, irrespective of any past practices or previous agreements which purported to limit or reserve the types of work to be assigned to employees in any way. Further, nothing contained in this Agreement including, but not limited to, the Recognition Article shall limit in any way the Company’s right to assign work to employees covered by this Agreement or to other employees not cover by this Agreement.

The Company and Union were parties to a separate Memorandum of Understanding which also addressed the assignment of work and was designed to enhance efficient operation of the facility. It was the relationship between these two documents that formed the basis for the Union’s claim. Specifically the Union challenged Company’s temporary assignment of bargaining unit employees to jobs below their attained position on the seniority ladder. 


The Progression Ladder which had previously been in place at the facility engendered what the arbitrator referred to as a “not my job” refrain from unit employees. The MOA was designed to address that perception and enhance the efficiency of a struggling operation. The Union claimed, however, that the MOA did not authorize the Company to temporarily assign employees downward, and claimed that such an assignment violated employees’ seniority rights.


Arbitrator Beens rejected these claims, concluding:


The Union argues that the giving the Employer the right to assign downward nullifies the seniority provisions of the CBA. I disagree. Union members continue to accrue seniority during their temporary assignments and are only assigned to positions for which they are qualified, again as required by the CBA. The Union presented no evidence that [Grievant’s], or any other Local 159 member’s, seniority or qualification status was in any way affected by a temporary assignment.

                                                     ***

In summary, Article 3.1 gives the Employer broad rights to assign employees, “…irrespective of any past practices or previous agreements which purported to limit or reserve the types of work to be assigned to employees in any way.” The CBA, MOA, and Pay for Knowledge provisions relied on by the Union do not modify the Employer’s rights to make temporary downward assignments under Article 3.1. Base[d] on the clear, unambiguous contract language, I must deny this grievance. 

Arbitrator Beens’ award can be found here.

Source: ADR

MD Court: Arbitrator exceeded his authority when he relied on a cba provision the County was not authorized to negotiate

Prince George’s County, MD and the Prince George’s County Police Civilian Employees Association were parties to a cba that included  language providing that covered employees were entitled to a notice of their eligibility to have a Union representative present prior to an investigatory interview.

Grievant was the subject of both a criminal investigation regarding alleged crimes and an internal affairs investigation concerning workplace conduct. Grievant was interviewed by employees of the Department’s Criminal Investigations Division concerning the alleged crimes, and separately by the Department’s Internal Affair’s Division concerning workplace issues. Grievant was provided the requisite notice concerning the Internal Affairs investigation but not for the CID interview. Grievant’s employment was ultimately terminated. An arbitrator overturned the dismissal, concluding in part that the failure to provide notice of grievant’s eligibility for the presence of a Union representative during the CID investigation violated the cba and undermined the County’s claim of just cause

The City sought to set aside the award, arguing, inter alia, that the award was against public policy. The Court of Special Appeals granted the County’s request, concluding (in an opinion discussed in Weingarten and criminal investigations of employees) that the award was contrary to an explicit , dominant, and well-defined public policy of effective law enforcement. The Union appealed, and the Maryland Court of Appeals has now affirmed, but on different grounds. The Court described the issue before it as:

whether a county has the authority under the county’s code to enter into a collective bargaining agreement requiring that, before a criminal investigative interview of one of the county’s police civilian employees, the employee be advised of the right to have a union representative present at the interview—i.e., that the employee be advised of a Weingarten right in the collective bargaining agreement.

Concluding that the County had no such authority, the Court went on to decide that the arbitrator had therefore exceeded his authority by relying on a provision of the cba that was beyond the County’s authority to enter into. It noted: 

In sum, a careful review of Maryland case law and authority from other jurisdictions leads to the conclusion that an arbitration award may be vacated where an arbitrator exceeded his or her authority and that an arbitrator exceeds the arbitrator’s authority by issuing an award where one of the parties lacked authority to enter into the underlying contract. For the reasons set forth above, we conclude that PGCC § 13A-109(a) does not confer upon the County the authority to enter into a collective bargaining agreement requiring that a police civilian employee be advised of a right to have a union representative present before a criminal investigative interview by the Prince George’s County Police Department.

In light of this conclusion the Court found it unnecessary to decide the public policy question addressed by the Court of Special Appeals.

The Court’s opinion in Prince George’s County Police Civilian Employees Association v. Prince George’s County, Maryland can be found here.
Source: ADR

Another unsuccessful public policy challenge to an arbitrator’s award

The City of Cleveland terminated the employment of a police officer for her essentially undisputed actions of stabbing a romantic partner.

 Grievant had been dating and, for a time, living with the partner. He had a criminal history of convictions for a number of offenses including drug possession, sexual battery, attempted kidnapping and  gross sexual imposition. On March 12, 2012 the two engaged in an argument and grievant, while intoxicated, stabbed the partner several times and fled the scene. She was found in her vehicle with a cord that was suspended from the ceiling of the car wrapped around her neck. Grievant was arrested and charged with felonious assault. She was subsequently charged with a reduced offense and sentenced to county jail for six months. The sentence was suspended but her employment was terminated.

In an award (discussed here) Arbitrator Paul Gerhart ordered her reinstatement. He concluded that while grievant had engaged in “particularly egregious” conduct the temination was not for just cause. Arbitrator Gerhart relied on evidence that other officers who had engaged in arguably similar behavior had not been terminated and found that this evidence of disparate treatment undermined the City’s case. He noted also a number of mitigating factors and reinstated her (without back pay) subject to her refraining from alcohol  and her compliance with any requirements imposed by the City’s Employee Assistance Program.

The City sought to set aside the award but the trial court refused to do so. The Court of Appeals of Ohio has now affirmed that decision and upheld the award. City of Cleveland v. Cleveland Police Patrolmen’s Association. The City claimed that the award was contrary to public policy, a claim that the Court quickly rejected. The Court observed that the City had failed to state a well defined public policy argument and noted:

The arbitrator acted within his discretion, and the City did not effectively argue how his decision is in conflict with public policy. The City only argues that the public should be able to have the confidence in police officers and that officers should hold themselves to the highest ethical standard. However, there are many cases where police officers have not held themselves to such a high standard, and yet they were not terminated from their jobs. 

The Court also rejected the City’s claims that the arbitrator improperly required it to use progressive discipline and did not issue a “final” award because he essentially deferred to the City’s Employee Assistance Program to decide what, if any, continuing counseling was appropriate.
Source: ADR

Patent Database from worldwide countries.

1.P ATENTS-COPE – (WIPO) : http://www.wipo.int/patentscope/en/

2. PatFT – United States Patent and Trademark Office (USPTO) : http://www.uspto. gov/patent

3. Espacenet – European : https://www.epo. org

4. JplatPat – Japan : https://www.j-platpat.inpit.go.jp/web/all/top/BTmTopEnglishPage

5. SIPO – China: http://english.sipo. gov.cn/  http://www.pss-system.gov.cn/sipopublicsearch/ensearch/searchEnHomeIndexAC.do

6. INP AIRS – India : http://ipindiaservices.gov.in/patentsearch/search/index.aspx

7. DEPATIS – Germany : https://depatisnet.dpma.de/DepatisNet/

8. AusPAT – Australia : http://pericles.ipaustralia.gov.au/ols/auspat/

9. CPD – Canadian Patent Database : http://www.ic.gc.ca/opic-cipo/cpd/eng/introduction.html

10.Czech Republic: http://www.upv.cz/en/client-services/online-databases/patent-and-utility-model-databases.html

11.EAPATIS – Eurasian Patent Organization (EAPO) : http://www.eapatis.com/ensearch/

12. Finland : http://patent.prh.fi/patinfo/default2.asp

13. Ireland : http://www.patentsoffice.ie/en/patents_searching.aspx

14. IPONZ – New Zealand : http://www.iponz.govt.nz/cms

15,KIPRIS – Korean Intellectual Property Rights Information Service : http://eng.kipris.or.kr/enghome/main.jsp

16.IPOS – Singapore : https://www.ip2.sg/RPS/WP/CM/SearchSimpleP.aspx?SearchCategory=PT

17.Industrial Property Office of Slovak Republic  : http://data.indprop.gov.sk/Patenty/index.php

18.Slovenia Intellectual Property Office (SIPO): http://www2.uil-sipo.si/dse.htm

19.Swissreg – Switzerland :  https://www.swissreg.ch/srclient/faces/jsp/start.jsp

20.IPSum – United Kingdom : https://www.ipo.gov.uk/p-ipsum.htm

21.IP .com: http://ip.com/

22.MAREC – Information Retrieval Facility: http://www.ir-facility.org/prototypes/marec

23.Patents.com: http://www.patents.c om/

24.Google Patents: http://www.google.com/advanced_patent _search

25.Free Patents Online: http://www.freepatentsonline.com

26.Thomson Reuters : http://thomsonreuters .com/en/products-services/intellectual-property/patent-research-and-analysis.html

27.Questel – Orbit.com: http://www.qpat.com/#WelcomePage

28.MineSoft -PatBase : http://www.patbase.com

29. ProQuest DialogTM: http://www.proquest.com/products-services/ProQuest-Dialog-Patents-Collection.html

30.Science and Technical Network (STN): https://www.stn.org/stn/ & http://www.cas.org

31.Equerion : http://www.lexisnexis.com/en-us/products/total-patent.page

32.PatSeer : http://patseer.com/

33.Molecular Connections Patent Information Retrieval System – MCPaIRS: http://www.mcpairs.com/app/

Source:

  1. Patent Database: Their Importance in Prior Art Documentation and Patent Search,  Vikram Singh, Kajal Chakraborty, and Lavina Vincent, (NISCAIR-CSIR, India, 2016)

Have you received objection letter during trademark registration, under Section 11 and Section 12 of the Trademark Act 1999, Trademark Rules 2002.

Trademark objection letter dom IP office

similar mark result

In trademark registration it is quite obvious that many individual  applicants may skip the procedure for doing a prior search of the word mark, before making an application with the trademark registry. A trademark search, under the public search link should be conducted by applicant, not only in the single class, but also under other classes than the one class the applicant is interested,  trademark might exist in other relevant classes. It helps to check,  if there are similar marks registered by parties.

Especially, 50 % similarity is highly possible if word mark  are constructed with common names, and generic words. Probably, deceptive or similar marks might exist. Because, most human being thoughts are quite same to a quite extent.

Well, what happens, if an individual applicant does not conduct a prior trademark search and stills files a mark. Then, there is a high probability that the trademark registrar would send an objection notice for the similarity issue. Because, the general tendency in that most marks are based on generic and common words used by individuals. If so, the registrar of trademark would seek a representation from the applicant on the account of Section 11 and Section 12 of the Trademark Act, 1999

For example, the objection would say…

The Trademark Act, 1999 and Trade Mark Rules 2002 and the trade mark applied for is open to objection under the following sections :

1) The Trade marks -which are devoid of any distinctive character, that is to say, not capable of distinguishing the goods or services of one person from these of another person; which consist exclusively of marks or indications which may serve in trade to designate the kind, quality, quantity, intended purpose, values, geographical origin or the time of production of the goods or rendering of the service or the characteristics of the goods or service;

2) The trade Mark application is open to objection on relative grounds of refusal under section 11 of the Act because the same/similar trademark(s) is/are already on record of the register of the same or similar goods/services. The detail of similar trademark is enclosed herewith

Same as provided in Sec.12, a trademark shall not be registered if, because of its-identity with an earlier trademark and similarity of goods or services covered by; the trademark; or its similarity to an earlier trademark and the identity or similarity of the goods or services covered by the trademark.

Hence the application is liable to be refused. Accordingly, you are requested to submit your response/submissions, if any, along-with supporting documents and receipt of this examination report or you may apply for a hearing.

Please note that if no reply is received or request for a hearing is applied for within the time of one month, the said application shall be treated to have been abandoned for lack of prosecution under the Trademark Act 1999 and there after the status of application in the computer database shall reflect as abandoned.”

Having received such objection letter from the trademark office, it is advisable that following procedures could be followed to get the applied mark to your rights.

– Do a trademark search with all relevant classes of goods/services and generate a report
– Identify, how many objections, oppositions, abandoned and registered categories are there in the reports
– If you find your mark similarity to any of the section, your strategy of reply should differ. (For example, If there are many objections, it is highly possible that chances of getting your mark would be challenging.)
– Be determined to justify that your trademark conception  is constructed based on your product and market, where your goods/services are sold.
– Within specified time, send a reply to the registrar with the a help of a trademark attorney.
– Await for the reply/action/response.
– Based on the reply, you shall decide to apply for hearing.
– Upon the result of the hearing, the mark might face yes or no reply. If yes, it would proceed for publishing, if no,  you should modify your mark at the earliest.

However, do keep in mind that, even if the register accepts your mark application based on the reply/hearing, you could expect a opposition/litigation from the owners of similar trademark once after it is published for public view.

Hence, always take an expert advise for an amicable process of owning your trademark and successful registration. Of course, do preliminary work, before deciding your mark.

Good luck with your Trademark rights.

Article written for the IP -Blog by Devarajan G – Trade Mark Attorney. PGN WISSEN & CO

Case Scenario :

super example

The attached report is a result of mark “Super”, which resulted 800+ marks filed. Out of which, around 650 marks are either abandoned, refused, objected, opposed. That reflects nearly 70 % mark applications are filed without prior search or a preliminary advice obtained from the Trademark Attorney, which should not be neglected.

Should I Hire an Attorney to Help Me File My Trademark Registration? – https://t.co/t1RCCXPY1D

Trademark

time, normally 5 years in most jurisdictions. In the case of a trademark registration, failure to actively use the mark in the lawful course of trade

United States trademark law

trademark registration rules. The Lanham Act grants the United States Patent and Trademark Office (“USPTO”) administrative authority over trademark registration

Trademark filing in Chennai

Photo courtesy nic.in : Indian Patent Office, Chennai PGN & WISSEN offers services for the trademark registration and legal services with the Trademark registry Chennai. If you are  a new startup or a company already into business for a long period. The first process of starting a business always begins with the …
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Arbitrator, India to become a ADR hub!

India is under the transformation of developing its human resources, and to utilise its legal experts to shape the alternative dispute resolution mechanism in India. Particularly, the government is under the process of revamping it’s large and knowledge resources for creating the international arbitration landscape.  While, the smaller countries like the Singapore, Hong Kong, Dubai, have emerged as a successful landing hubs for resolving dispute resolution.

Ministry of Law and Justice, Legislative department has published the Gazette No 9 of 2015 “The Arbitration and Conciliation (Amendment) Ordinance, 2015, promulgated by the President Pranab Mukherjee. This ordinance amends the Arbitration and Conciliation Act 1996. The ordinance is largely delegates the exercising powers of the High Court and Civil Court.

 First, jurisdiction of Court substituted in such a manner that the arbitration other than international commercial arbitration, the jurisdiction is directs to principal Civil Court, includes High Court in exercise of its ordinary original civil jurisdiction.  by the

 1. A distinction has been made as regards to jurisdiction, in case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary  original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court ion small Causes;

 2. In the case of international commercial arbitration, the high court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that high court.

Provided,  the sections 9, 27, and clause (a) of sub-section (1) and sub-section (3) of section 37 shall also apply to international commercial arbitration, even if the place of arbitration is outside India. and an arbitral card made or to be made in such place is enforceable and recognised under the provisions of Part II of this ordinance. i.e sections apply to international commercial arbitration even when the place of arbitration is not in India:

  • Section 9 (2) which deals with interim measures by the Court,
  • Section 27 that deals with Court assistance in taking evidence,
  • Section 37(1)(a) which states than an appeal shall lie on orders granting or refusing to grant measures under Section 9, and

3. In a case the arbitration agreement or certified copy thereof is not available to the party applying for reference for arbitration, such party can file an application praying the Court to call upon the other party to produce the same.

4. If the court passes any interim measure under Section 9, the arbitral proceedings must commence within 90 days of the court doing so.

5. No application for interim measure under Section 9 shall be entertained after the arbitral tribunal has been constituted unless the remedies under Section 17 have been rendered inefficacious.

6. The High Court may frame rules for the purpose of determination of fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal. However, such rules shall not apply to international commercial arbitration and in arbitrations where parties have agreed for determination of fees as per the rules of an arbitral institution.

7. The provisions to ensure independence of arbitrators have been elaborated upon under Section 12. The Fifth Schedule has also been inserted enumerating certain grounds for the same. A potential arbitrator must disclose in writing circumstances such as the existence of direct or indirect, past or present relationship with any of the parties or in relation to the subject matter of the dispute which is likely to give doubts as to independence shall be disclosed. Further disclosures in writing with respect to circumstances which are likely to affect their ability to devote time towards the arbitration shall be made. The applicability of this sub-section can be waived by the parties in writing, subsequent to the dispute having arisen.

8. Interim measures ordered by the arbitral tribunal have been delineated as follows:

Appointment of a guardian for a minor or person of unsound mind

  • Measures protecting goods, or amount of money, or property which is subject matter of the dispute
  • Interim injunction or appointment of receiver
  • Such other measures for protection

9. A time limit of twelve months from the date of entry of the tribunal upon reference has been provided under Section 29A before which the award shall be made by the tribunal. Additional fees shall be provided to the tribunal if an award is made between six months. If the parties give consent to an extension, it shall be made for a further period up to six months.

10. Fast track procedure has been instituted under Section 29B wherein parties may agree in writing to have their dispute resolved by a fast track procedure. The award shall be made within six months.There shall be no oral hearing, and decisions shall be made on the basis of written pleadings, documents, and submissions filed by the parties, along with any further information called for from the tribunal. Oral hearings shall be made if all the parties agree and the tribunal finds it necessary. A new Section 31A has been added giving specific provisions for costs regime.

11. The ambit of setting aside an award for being in conflict with public policy under Section 34 has been broadened to include not only contravention with Section 75 or Section 81, but also if it is in contravention with the “fundamental policy of Indian law” or if it in conflict with the “most basic notions of morality or justice”.
The ordinance is largely in line with the recommendations put forth in the 246th Report of the Law Commission of India. The amendments would be a step forward in making arbitration an easier, faster and more cost effective method of dispute resolution, especially to attract foreign investors to invest in India, have a first instance of remedy from a forum of arbitrator.

Applicability of Rules of International Commercial Arbitration

Indian Council of Arbitration announced a compliance about the binding procedures for international entities. That is based on the Rules of International Commercial Arbitration of the Council has been effective from 1st January, 2014, which recommends a standard arbitration clause, as reproduced below, which may be included in any contract or agreement for resolution of any international commercial dispute/s without modification or modified as may be required or according to the parties’ preferences:

“Any dispute or difference whatsoever arising between the parties out of or relating to the construction, meaning, scope, operation or effect of this agreement or the validity or the breach thereof shall be settled by arbitration in accordance with the Rules of International Commercial Arbitration of the Indian Council of Arbitration and the award made in pursuance thereof shall be binding on the parties.”

However, as per Rule 2 (i) of the said Rules of International Commercial Arbitration, any arbitral reference having adopted the Council as a facilitating institution for arbitration of dispute/s, will be considered as “International Commercial Arbitration” where at least one of the parties is;

  1. An individual who is a national of, or habitually resident in any country other than India; or
  2. A body Corporate, which is incorporated in any country other than India; or
  3. A company or an association or a body of individuals or a partnership firm, whether incorporated or not, whose central management and control is exercised in any country other than India; or
  4. The Government of a foreign country.”The reference or references as such having fulfilled any of the criteria above will strictly be considered as international commercial arbitration and in that case, the Rules of International Commercial Arbitration of the Council, as effective from 1st January, 2014, will be applicable to such reference in supercession of Rule 4 of the Rules of Arbitration & Conciliation of the Council, effective from 8th May, 2012. This is for information and strict compliance
Indian Arbitration Council

ADR added to Financial List?

ADR for Financial List?Regulatory action against banks has been a principal theme in financial services litigation in recent years. The most notorious regulatory finding against UK banks concerned misselling of payment protection insurance (PPI), which according to the Financial Conduct Authority (FCA), has cost lenders more than £20bn since January 2011

Further investigations have revealed manipulation of more sophisticated products and market mechanisms. These include the foreign exchange (FX) scandal, where traders manipulated the value of currency to obtain a profit, and the rigging of the London Interbank Offered Rate (LIBOR) or similar ends. HSBC, Barclays, RBS, Citigroup, JP Morgan and UBS have received regulatory fines in the UK and US, with Deutsche Bank this year agreeing to pay $2.5 billion relating to LIBOR and other currency manipulation.

Despite the pursuit by the regulators, civil redress against the banks has been much more limited than in PPI, although the exposure is potentially much larger. One factor is the complicated nature of picking apart such financial claims. In the example of FX, negotiating the currency risk, convoluted financial structures, assessment of damages and collecting sufficient evidence amongst a vast array of digital data is daunting. It can be problematic for a business or investor without the most intricate and sophisticated knowledge of the sector to analyse the potential liability and make a claim.

Such detailed understanding of the sector is also required of any tribunal. To this end, the Government is attempting to improve the position at judicial level with the creation of a new Financial List of specialist financial services judges. The List is a joint initiative between the Chancery Division and the Commercial Court (part of the Queen’s Bench Division) that will hear disputes relating to financial claims valued at more than £50 million or which pertain to significant market issues, such as cases involving equity, derivatives, FX and commodities markets.

Specialists needed?

The Financial List attracted a great deal of attention, not least for the possible impact on financial services litigation. Parham Kouchikali, a partner at RPC, observes: “Some of the cases that reach the List will be the multi-million pound oligarch-type disputes but I think we will also continue to see complex financial product litigation and claims against banks, including by investors and counterparties who could have substantial losses arising from benchmark manipulation, for example FX.”

While the creation of a specific Financial List has been broadly welcomed, uncertainty remains over the format and practicality of the List. With the announcement of the List come both new case management procedures specific to financial services cases, and a new test case procedure for matters of market importance. It is proposed that parties to test cases bear their own costs, forgoing to the normal loser-pays principle. However, it is unclear whether litigants would be willing to assume the risk for costs in a case against a bank with no possibility of recovery.

“There remain questions over how a specialist court will entertain more creative claims against banks,” Kouchikali says. “Recent decisions suggest that courts may be moving away from the bank-centric approach with an eye on developments in the regulatory environment which have led regulators, like the FCA or the Securities and Exchange Commission in the US, sanctioning banks for improper conduct.”

Threat of litigation

The threat of litigation is looming, however. US law firm Scott and Scott has already said to be exploring a multi-million pound case against a number of UK and US banks over the FX manipulation. In July, it was reported that the firm was looking for UK and European claimants. Any such case, of course, would be issued in the US, where class action proceedings (and usually settlements) are more common.

While the existence of a new List may serve to temper future conduct of banks, it may also increase banks’ exposure claims if investors’ confidence in the new judicial system grows. Critics of recent regulatory fines suggest that quantum is derived not from any transparent calculation but from the particular bank’s ability to pay. But while any regulatory system must be transparent, predictable and consistent, few banks will want to settle claims publicly while the banking sector has some distance to go in restoring public (and political) trust.

Kouchikali observes that banks really do not want to go over historic wrongdoings in open court or disclose lots of potentially damaging documents, which means that confidential mediation and early settlements are likely to be an attractive option for them. “High-profile claims generate lots of media exposure and the banks do not want the reputation impact such cases have. It may be preferable to try to avoid going to court,” he concludes.

ADR, therefore, will likely form a component in the operation of the new Financial List, and those mediators with experience of the sector will see increased demand.

This post was written by Antony Collins who is a freelance journalist. He can be contacted at ac@acollinsmedia.com

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Source: JAMS ADR