Chicago International Dispute Resolution Association
Undisputed Facts
Newsletter of The Chicago International Dispute Resolution
Association
Winter 2001
Panel
Membership Growing
As of November 1, 2000 the number of CIDRA Panel neutrals and approved experts
reached forty-five. The arbitrators and mediators who have met the standards
for admission as CIDRA panel members include neutrals from Chicago as well as
from the international community.
Mediation
Training
The training committee, Jan Bohn, Jack Cooley, Joseph Stone and Teresa Frisbie,
are planning a mediation training to take place in the spring. The training
will address international aspects of mediation and will include both introductory
and advanced courses. Anyone interested in these courses should contact Jan
Bohn at 847-358-8856.
A
New Way to Resolve International Business Disputes in Illinois
By Peter V. Baugher and Steven M. Austermiller
Arbitrations are increasing and are usually a better way to resolve international
disputes than litigation in a foregin jurisdiction. The Chicago International
Dispute Resolution Association provides our region with a new arbiration forum.
It complements the enactment of the state's International Commercial Arbitration
Act, a statutory framework facilitating international trade and dispute resolution
in Illinois.
I.
Introduction
As international business booms, Illinois lawyers are increasingly challenged
to resolve business disputes between domestic and foreign parties. Attorneys
drafting contracts that involve two internationally diverse parties must consider
including arbitration, choice of law, and choice of forum provisions to prevent
future entanglements in distant or unforeseen jurisdictions.
Lawyers should also be prepared to specify the dispute resolution rules that
will govern and to appoint an organization to administer this process. Adding
such clauses tailored to the transaction gives companies a road map for resolving
disagreements and may help them preserve valuable business relations that would
otherwise be jeopardized.
The new Illinois International Commercial Arbitration Act (ICAA)1 provides
comprehensive, easy-to-follow arbitration procedures recognized by the international
business community. To conform to global business preference for arbitration,
ICAA's drafters based it on the UNCITRAL Model Arbitration Law (the United Nations
"Model Law").2 ICAA serves as an important instrument for handling the complexities
of transnational disputes because it offers a legal framework accepted throughout
the world.
Prior to the enactment of ICAA, Illinois companies seeking to arbitrate international
business disputes had to rely on either the Federal Arbitration Act ("FAA")
or the Uniform Arbitration Act ("UAA"), both of which have proved inadequate
for international disputes.3 ICAA is specifically designed to apply to international
business disputes and has a broad jurisdictional reach.
This article describes the expansion of international trade in Illinois and
the circumstances that prompted the establishment of the Chicago International
Dispute Resolution Association (CIDRA) and the enactment of ICAA. It also elaborates
on the growing importance of arbitration in cross-border commerce, the creation
of a legal infrastructure in Illinois geared toward transnational dispute resolution,
and the key provisions of the new law and its role in facilitating international
commercial arbitration.
II.
Expansion of Global Commerce and the Growing Importance of Arbitration
As international commerce increases, so does the volume of international business
disputes. Export sales in the top 10 Illinois industries were more than $31
billion in 1998, and import purchases undoubtedly exceeded that number. Additionally,
new inbound and outbound foreign investment surpassed previous levels. Some
of these deals will fail, and not all contracts will be performed as planned.
As a result, Illinois lawyers can anticipate a growing number of clashes between
domestic business entities and their foreign partners.
When an international trade contest erupts, at least two countries are likely
to have jurisdiction over the dispute, and which nation's laws apply may be
unclear. This magnifies the importance of effective dispute resolution. It is
crucial for both parties to plan how to work out problems at the same time they
plan for contract performance. A legal framework that provides the parties maximum
autonomy and control over the dispute resolution process reduces the risks of
international commerce.
Most businesses are reluctant to be subjected to another country's unfamiliar
laws, legal process, jury systems, and discovery procedures. Some question the
partiality of local judges and attorneys toward local business. There are also
problems with the unpredictability of outcomes and enforcement of judgments
from one country to another. Although a worldwide judgments convention is currently
being negotiated in the Hague, its enactment any time soon is doubtful, and
the U.S. is not presently a signatory to any treaty on recognition and enforcement
of foreign civil judgments.
To combat these litigation difficulties businesses often voluntarily elect
to arbitrate transnational disputes. The advantages of arbitration include:
a conflict resolution mechanism chosen by the parties and tailored to their
needs, a neutral decision-maker that often possesses professional industry expertise,
a set of neutral, pre-determined procedures, privacy, and a binding resolution,
usually without appeal.
Arbitration permits parties from different countries to do business together
without having to resort to one another's legal systems. Likewise, arbitration
is more likely than litigation to preserve the parties' commercial relationship
and end their dispute in a reasonably fair, quick, and cost-effective manner.
III.
The Chicago International Dispute Resolution Association4
Increased international commercial activity in Illinois led to the establishment
of CIDRA and the adoption of ICAA. Illinois lawyers engaged in these matters
were keenly aware of the evolving world environment and believed that improving
the climate for international arbitration and mediation in Illinois would help
Illinois compete globally. They also knew that both domestic and foreign businesses
involved in international trade and investment generally prefer arbitration
to litigation for dispute resolution.
The first step was to form an organization that would enhance Illinois' suitability
as a forum for resolving transnational business disputes. CIDRA's founders chose
to locate in the Merchandise Mart at World Trade Center Chicago.
CIDRA was established in 1997 as an Illinois not-for-profit corporation intent
on promoting international dispute resolution and improving Illinois international
legal infrastructure. Next, CIDRA enlisted the assistance of the International
and Foreign Law Committee of the Chicago Bar Association to draft a law that
would encourage arbitration of international commercial disputes in Illinois.
Together they developed a statute that could provide guidance and default rules
for parties who chose to settle their disputes by arbitration. The Illinois
legislature recognized that enacting ICAA would assist the state's determination
to expand its role as a leading commercial center by providing a legal framework
attractive to international businesses.
Parties electing to arbitrate their dispute in Illinois will be afforded the
advantages of ICAA, which mirrors the UNCITRAL Model Arbitration Law.5
ICAA provides the requisite substantive legal framework for transnational dispute
resolution while the CIDRA rules offer a comprehensive set of procedures.
In fact, CIDRA is the only arbitral organization that has purposely drafted
its rules in light of ICAA. CIDRA also offers a Midwest-based neutral and private
forum for international dispute resolution. Additionally, CIDRA maintains a
roster of qualified attorneys and experts ready to serve as arbitrators, mediators,
or fact-finders. Thus, international disputes governed by ICAA can now be conducted
conveniently with CIDRA procedural rules in Illinois.
IV. Statutory Framework for Arbitration
A. The New York Convention
The problems associated with litigation in foreign jurisdictions are not new.
Attempts to offer a workable arbitration alternative have been made both internationally
and in the United States. The most important multinational effort to enhance
arbitration is the 1958 United Nations Convention on the Recognition and Enforcement
of Foreign Arbitral Awards (the "New York Convention").6 The New York Convention
provides that each signatory nation shall recognize arbitral awards as binding
and enforce them according to the rules of the territories where the award is
relied on under the conditions specified in the Convention.7
Before the New York Convention gained worldwide acceptance, it was difficult
for parties to enforce an arbitral award outside the country in which the arbitration
took place. Many foreign tribunals were reluctant to recognize arbitral awards
rendered against their nationals. Furthermore, many foreign tribunals lacked
the legal procedures to honor awards. Today, over 100 nations are signatories
to the Convention.8 The United States ratified
the New York Convention in 1970, enacting it as Chapter Two of Title 9, the
Federal Arbitration Act, 9 USC sections 201-208.9
B.
The Federal Arbitration Act and the Uniform Arbitration Act
Despite its useful codification of arbitration practice on a national level,
the FAA does not differentiate between domestic and international commercial
arbitration.10 Moreover, the FAA leaves many
gaps in the procedural rules that diminish the attractiveness of the United
States as an international arbitration forum. The FAA does not discuss the use
of experts, what language shall be used if not agreed to by the parties, whether
oral hearings must be held, or the availability of interim or provisional remedies,
for example.
Most significantly, the FAA has few default guides for parties unable to agree
on the rules they wish to govern the tribunal.11
Under that structure, the parties are forced to negotiate all possible contingencies
and procedures or risk an arbitration that collapses before it can be completed.
As a result, many turn to private institutions and rely on their rules. However,
this expedient does not remedy the problem of gaps in the FAA commonly perceived
and criticized by foreign counsel.
The FAA was never meant to "occupy the entire field of arbitration," domestic
or international.12 State legislatures may
enact their own arbitration statutes, including provisions covering the conduct
of international arbitration within their borders, provided that such enactments
do not "undermine the goals and policies of the FAA."13
To fill the gaps in the federal scheme, states were forced to enact their own
arbitration laws.
Early in the 1960s Illinois, along with most other states, enacted the Uniform
Arbitration Act (UAA).14 However, only state
arbitration laws that supplement the FAA and do not contradict its provisions
are upheld.15 Even with the UAA, Illinois
still lacked a statute addressing international commercial arbitration. The
UAA offers even less guidance on international commercial arbitration than the
FAA. Like the FAA, such relevant international trade terms as "commerce" or
"commercial" are undefined in the UAA.
Furthermore, there is no indication that the UAA even contemplated international
contracts containing arbitration provisions. Although the Uniform State Law
Commissioners began a review of the UAA in 1997, the UAA's overhaul is probably
still several years away, and the extent to which it will treat international
issues is unknown.
Eventually, some U.S. states began to enact their own international arbitration
statutes. At least 13 states have now passed international arbitration laws:
Illinois, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Maryland,
New York, North Carolina, Ohio, Oregon, and Texas.
All of these states recognized that the expansion of trade and the growing
importance of arbitration marked an irreversible business trend. On this basis,
they adopted codes that seek to provide a hospitable and familiar statutory
framework supportive of international commercial arbitration. The common motivating
factor of these states is to facilitate trade by devising a legal framework
for international dispute resolution so that foreign companies will be more
inclined to do business in the United States and with U.S. companies.
In 1998, Illinois became one of the trend-setting states and adopted the Illinois
International Commercial Arbitration Act.16
Like most of the other states' laws, ICAA was strategically based on the United
Nation's Model Law to attract foreign businesses that were familiar with and
trusted the Model Law. The worldwide acceptance of the Model Law was intended
to strengthen Illinois' position as a trading center suitable to companies from
all countries.
V. The Illinois Commercial Arbitration Act
A.
The UNCITRAL Model Arbitration Law
The principal advantage of the Model Law derives from its international origin.
Its overriding objective is to provide all jurisdictions that adopt it a comprehensive
set of substantive rules to facilitate resolutions through private arbitration
of civil disputes that are both (a) international and (b) commercial in character.
The United Nations General Assembly established the UN Commission on International
Trade Law (UNCITRAL) in the late 1960s to promote the unification of international
trade law on a global basis.17 UNCITRAL has
achieved significant results in this field, including developing in 1976 its
widely accepted UNCITRAL Arbitration Rules, and in 1980, a companion set of
Conciliation Rules.
In 1982, the UNCITRAL Working Group on International Contract Practices began
work on a Model Law on International Commercial Arbitration. The new law was
to provide a model for national laws in countries without an arbitration law,
or where existing law needed modification to conform to contemporary arbitral
standards.
UNCITRAL's policy goals in preparing the Model Law included the following:
(1) to allow the parties the autonomy and freedom to choose how their disputes
should be determined, and limit the role of national courts; (2) to establish
mandatory provisions to ensure fairness and due process; (3) to provide a default
framework, so that if the parties are unable to agree on procedural matters
(such as the composition of the arbitral tribunal), the arbitration could still
go forward; and (4) to further aid the enforcement of awards and arbitration
agreements, and clarify controversial issues.
The Model Law was unanimously approved by UNCITRAL in 1985, and shortly thereafter
the UN General Assembly voted to encourage nations to consider adopting it.
To date, more than 20 countries have done so, including Australia, Canada, Cyprus,
Germany, Hong Kong, Nigeria, and Singapore. Canada, Hong Kong, and Singapore
are among Illinois' largest trading partners.
Given the increasing number of countries that have adopted the Model Law, Illinois
businesses seeking to penetrate emerging markets and maintain their business
relationships with major industrialized nations are now able to bring to the
table the same arbitration framework used by those countries.
To date, no case law interprets ICAA. The Act is new, and few arbitral decisions
are ever publicly reported. Fortunately, most of the provisions are relatively
self-explanatory, and some commentary is available on the Model Law.18
B. Jurisdiction
Many businesses, both foreign and domestic, will benefit from ICAA. Its jurisdictional
reach is broad because it applies to any international commercial arbitration
where the arbitration is conducted in Illinois. To qualify as "international,"
one of the following requirements must be met: (1) the parties are internationally
diverse; (2) the place of arbitration (Illinois) is outside of the country(ies)
of the parties; (3) the place of arbitration is where the "predominant part"
of performance or "subject matter of the dispute is most closely connected";
or (4) the parties agree that the subject matter relates to more than one country.19
Most commonly, ICAA would apply to a dispute between an American company and
its foreign trading partner. ICAA can also apply to a dispute between two foreign/nondomestic
parties. The parties could even be from the same country.
For example, two Toronto businesses that chose to resolve their dispute in
Chicago could do so under ICAA jurisdiction. Two Illinois businesses that contract
to resolve their disputes by arbitration may also find themselves subject to
ICAA.
For instance, if Caterpillar were to sell a plant located in Mexico City to
a Chicago firm, the Act would apply to any dispute connected with that sale
as long as the parties had agreed that the subject matter of the arbitration
(the plant sale) relates to more than one country. Practitioners should be mindful
of this and consider inserting appropriate language into their contracts if
they want ICAA to apply to their future arbitrations.20
C. Judicial Involvement
ICAA envisions minimal court involvement in the arbitration process. There
is to be no court intervention in the arbitration except where ICAA specifically
provides for it.21 Under ICAA, judicial intervention
is permissible to appoint neutrals, decide challenges, and determine jurisdiction.22
Judicial intervention on these issues is not subject to appeal. The final and
binding nature of these permissive judicial interventions is meant to break
an impasse in an arbitration so that it can proceed as the contracting parties
intended.
In the event of a dispute, the parties are to commence the arbitration without
any court filings. If a party does file a complaint in court when there is an
arbitration clause in the parties' contract, ICAA directs Illinois courts to
order the parties to begin to arbitrate, as long as the lawsuit defendant seeks
to initiate arbitration no later than when it submits its first substantive
pleading.23
The Act does envision arbitration and court actions proceeding concurrently
in certain circumstances. In addition, ICAA provides that a court may grant
an "interim measure of protection" before or during the arbitral proceeding.24
This refers to equitable remedies such as injunctions and protective orders.
However, the arbitral tribunal will also have the power to order such remedies.25
The only court with jurisdiction in an ICAA matter is the Illinois circuit court
of the county where the place of arbitration is located.26
D. ICAA Procedures
An important role of the new law is that of "gap-filler." Because many contracts
merely provide that disputes be resolved through arbitration, and possibly specify
a choice of forum and choice of law, ICAA offers a default determination of
a range of procedural issues. Lawyers should review these provisions during
the contract drafting process as a checklist of points to consider and to make
sure they will accommodate the client's needs. To the extent that these provisions
are undesirable, most can be avoided by inserting contrary language in the contract's
arbitration clause.
In the absence of such contrary provisions, the following ICAA rules apply:
- There is one presiding arbitrator. The circuit court of the appropriate
county has appointment power unless the parties decide among themselves who
serves as the arbitrator.27
- If the parties have contracted for three arbitrators and fail to reach agreement
on the appointment procedure, ICAA provides that each party shall appoint
one arbitrator and that these two arbitrators appoint the third. If the two
arbitrators cannot agree on a third, the court appoints the third. The court's
appointments under this Act are not appealable.28
- The arbitrator must disclose "any circumstances likely to give rise to
justifiable doubts as to his or her impartiality or independence." Any party
may challenge the appointment of an arbitrator based on that standard.29
- The tribunal rules on its own jurisdiction over claims.30
Objections to jurisdiction must be raised in the statement of defense.31
As with the challenge procedure for arbitrators, a party has 30 days from
an adverse ruling on jurisdiction questions to a appeal to the circuit court.32
If the party misses that deadline, ICAA states "[t]he arbitral tribunal may,...
admit a later plea if it considers the delay justified."33
The same rules apply for a plea that the tribunal exceeded the scope of its
authority. The court's decision on these issues is not appealable.34
- The tribunal is to determine the rules of pretrial and trial procedure,35
the place of arbitration,36 the language
to be used in the proceedings,37 and whether
there are to be any oral hearings.38
- If a respondent fails to file a statement of defense, the tribunal shall
continue the proceedings "without treating the failure in itself as an admission
of the claimant's allegations."39 This leaves
open the possibility that such a failure could, coupled with other evidence,
form the basis for finding admissions.
- With regard to experts, ICAA provides a hybrid between the American and
continental legal systems. It states that the tribunal "may appoint one or
more experts to report to it on specific issues to be determined by the arbitral
tribunal." The tribunal may even require a party to provide the expert with
information, documents, or property to assist him or her. That is typical
in continental or civil law countries, where the tribunal takes a more active
fact-finding approach. However, ICAA also provides a common law twist. If
a party requests it, the expert shall participate in a hearing where the parties
"have the opportunity to put questions to the expert and to present [their
own] expert witnesses."40
- The tribunal may issue subpoenas to parties or nonparties for the attendance
of witnesses and for the production of books, records, documents and other
evidence. ICAA states that production will be for the purpose of presenting
evidence at the arbitration hearing and "will not include pre-trial discovery
as known in common law countries."41 In
certain circumstances, an evidence deposition may be taken. However, "[n]o
other discovery shall be permitted unless otherwise agreed by the parties."42
Again, the discovery rules are a mix between the American and continental systems.
The prohibition of pretrial discovery is attractive to many non-American litigants,
who view the permissive and wide-ranging pretrial discovery of the American
system as costly, time consuming, and disruptive to companies unaccustomed to
having to disclose information about their businesses.
Additionally, the discovery limitation makes it more likely that the dispute
will be resolved in a relatively short period. Thus, if the client would benefit
from expansive pretrial discovery, his or her lawyer must insert the appropriate
language into the controlling documents.
E. Tribunal Findings
Unlike the other rules, the sections relating to the tribunal's findings are
quasi-substantive. The tribunal is to render its judgments on the basis of the
"strict rule of law."43 The Act explicitly
prohibits decisions based on anything else, such as amiable compositeur (equity
and good conscience), unless the parties expressly authorize the panel to do
so.44 This provision is intended to assure
that law, rather than vague appeals to equity or pressure to "split the baby,"
will govern the arbitration.
Because of that, the choice of law issue is paramount. It should always be
considered at the contract-drafting stage. ICAA provides that any choice of
law, unless otherwise expressed, will be construed as referring to the substantive
law of that jurisdiction and not its conflict of law rules.45
With regard to conflict of law rules, the arbitral panel may apply any conflicts
rules it considers applicable.46 This differs
from the typical American practice, where the conflicts rules of the forum jurisdiction
automatically apply.47
Significantly, when it comes to costs, the Act departs from American jurisprudence
in favor of an approach found abroad. Unless otherwise agreed by the parties,
the tribunal may award "costs," in addition to the amount in dispute and interest.
Costs are defined to include " (1) the fees and expenses of the arbitrators
and expert witnesses; (2) legal fees and expenses; (3) any administration fees
of the institution supervising the arbitration [such as CIDRA or the American
Arbitration Association Association]; and (4) any other expenses incurred in
connection with the proceeding."48
No fee-shifting clause is required in the parties' contract for attorney fees
and the other costs to be awarded. To the contrary, if a party wants to avoid
fee shifting, it must specifically contract against it.
VI.
Conclusion
Illinois practitioners should consider ICAA and CIDRA early in the negotiation
of a cross-border business transaction to provide their clients with a blueprint
for resolving disputes. ICAA gives Illinois a legal infrastructure that facilitates
international commercial arbitration.
In turn, CIDRA offers the procedural rules and an Illinois-based forum for
resolving international business disputes. Together, they provide Illinois lawyers
and their business clients new ways to resolve disputes and arbitration mechanisms
that are more certain, efficient, and closer to home.
About
the Authors
Peter
V. Baugher is a partner at Schopf & Weiss in Chicago concentrating in business
litigation. He is president of the Chicago International Dispute Resolution
Association, immediate past chair of the CBA International & Foreign Law Committee,
and a drafter of the International Commercial Arbitration Act.
Steven
M. Austermiller is a business litigation attorney and a former partner at
Pedersen & Houpt in Chicago. He is a legal consultant in eastern Europe.
Meet a Cidra Neutral
This issue's spotlight is on Michael P. Avramovich. Michael is president of
Avramovich & Streeter, P.C., where he practices commercial, corporate and international
business law. His law firm works with affiliated law firms in Europe, Asia and
South America. He is also an adjunct professor of International Business and
Trade Law at the The John Marshall Law School, where he teaches Multinational
Corporations Law and Foreign Investment Law. He graduated from North Park University
in Chicago, and received his Juris Doctor from the John Marshall Law School,
where he was a member of the John Marshall Law Review. He completed advanced
legal education in International and Comparative Law at Georgetown University
Law Center in Washington, D.C., from which he received a Masters of Law Degree.
He also holds a Masters of Management from Northwestern University's Kellogg
School of Management and is a licensed C.P.A. Michael has lived and worked in
Switzerland, Rome, London and Tokyo. He was a chief financial officer for a
Fortune 500 company and has worked for a number of federal agencies, including
the Department of Justice, the SEC and the FTC. He is licensed to practice law
in both Illinois and the District of Columbia. Michael is fluent in French and
Italian.
Upcoming
ADR Events
November 30 - December 1 and
December 4 - 6, 2000 in London |
Chartered Institute of Arbitrators mediation training course |
| February 15-16, 2001 in Paris |
International Chamber of Commerce, Protecting intellectual property rights
in the new millenium |
| March 9, 2001 in Mexico City |
International Bar Association Fourth Annual Arbitration Day |
| March 10, 2001 in Mexico City |
London Court of International Arbitration North American/ Latin American
Councils' Symposium |
| April 6-7, 2001 in Brussels |
The UIA Forum of Mediation Centres |
| April 26-28, 2001 in Arlington, Virginia |
Third Annual American Bar Association Section of Dispute Resolution ADR
Conference, Collaboration in the Capital: The Power of ADR. |
| September 5-7, 2001 in Accra, Ghana |
London Court of International Arbitration Pan - African Council Fifth
Conference |
Book
Review
A New Book on E-commerce and the Law: A Must-read for Every Future-thinking
Lawyer and ADR Practitioner
A Review of @Risk: Internet and E-commerce Insurance and Reinsurance
Legal Issues
Edited by Robert Hammesfahr
Blatt Hammesfahr & Eaton (now Cozen & O'Connor)
Reactions Publishing Group Ltd (2000)
Nestor House London EC4V 5EX
UK +44(0)207 779 8180 Fax: +44(0)207 779 8200 Website:www.reactionsnet.com
Reviewed by John W. Cooley
Judicial Dispute Resolution, Inc. (JDR)
Chicago, Illinois
I approach this assignment to write a review of @Risk: Internet and E-commerce
Insurance and Reinsurance Legal Issues ("@Risk") (Reactions Publishing Group
Ltd, 2000) with both the delight and enthusiasm of a small child who has discovered
a new and shiny coin. To the child, the newly found item is not only delightful
in its nature and appearance, but the item's prospects of future-use potential
are exciting and horizon-expanding. So too, @Risk. Edited by Robert Hammesfahr
of the Chicago Law Firm of Blatt Hammesfahr & Eaton (now Cozen & O'Connor) and
written by the firm's lawyers, the book is a first-of-its-kind comprehensive
guide to E-commerce insurance issues generally and to issues concerning the
prosecution and defense of insurance and other types of legal claims arising
out of use of the Internet by individuals and businesses in a commercial context.
Of particular interest to mediators and arbitrators and lawyers who use ADR
processes are Chapters 16 and 17 covering topics of litigation and alternative
dispute resolution in relation to E-commerce. Chapter 17 is authored by Richard
L. Blatt, a lawyer and ADR practitioner and a member of the Working Group of
the Chicago International Dispute Resolution Association (CIDRA). Before discussing
those chapters specifically, an overview of the entire book would be appropriate.
A review of the Table of Contents of the book gives a sobering glimpse of its
exhaustive coverage of subject of E-commerce. The book has a total of 17 chapters.
While the subject matter would seemingly be quite technical, the clear and direct
writing style of the authors renders the content easily understandable by lawyers
or lay persons with a basic working knowledge of computers, the Internet, and
insurance. Chapters 1 and 2 are introductory in nature. Chapter 1 discusses
basic defini-tions relating to the Internet and E-commerce and Reports of the
U.S. Department of Commerce regarding the emerging digital economy. Chapter
2 addresses electronic contracts, digital signatures, clickwrap agreements and
other related topics. Chapter 4 covers Cyber-crime, including such topics as
the Federal Computer Fraud Act, National Stolen Property Act, and the Fourth
Amendment's applicability to the Internet. Chapter 5 discusses First Amendment
issues (defamation, privacy violations, etc.) and Chapter 5 identifies and explains
typical cyberloss risks (computer viruses, fraud online, spamming, products
liability). Chapters 6, 7, and 8 address, respectively, topics of web-related
intellectual property law, employment law issues, and E-commerce Y2K liability.
Chapters 9 through 15 provide in depth coverage of several E-commerce insurance
law coverage topics, including: first party property; commercial general liability;
directors and officers liability; errors and omissions, media liability, and
intellectual property; employment practices liability; fidelity, surety and
crime insurance, and reinsurance.
One outstanding feature of this book is the liberal infusion of hypothetical
cases and case analyses throughout many of its chapters. These numerous detailed
and realistic scenarios provide thought-provoking grist for interactive discussion
and analysis. This feature makes the book an ideal candidate for use as instructor's
resource material or as a source of student roleplay information for seminars
and educational courses on E-commerce and/or online dispute resolution.
Chapters (16 and 17) on litigation and ADR provide a comprehensive look at
considerations to take into account when deciding whether to go to court with
E-commerce disputes or to use some alternative to the court system. Chapter
16 covers such litigation issues as choice of forum, discovery, experts, damages,
and trial strategy. Chapter 17 on ADR, describes the principal ADR processes
and hybrids and discusses when it might be useful to employ each.
Finally, the book has eleven appendices containing a comprehensive collection
of E-commerce related legislation and key court cases.
Truly, @Risk is a fine piece of authoring and legal craftsmanship that greatly
simplifies and clearly communicates complex legal concepts concerning the Internet
and E-commerce, and in my opinion, is a must-read for every future-thinking
lawyer and ADR practitioner.
Model
Arbitration Clause or Separate Arbitration Agreement
"Any dispute, controversy or claim arising out of or relating
to this contract, or the breach, termination or invalidity thereof, shall
be settled by arbitration in accordance with the Chicago International Dispute
Resolution Association (CIDRA) Arbitration [and/or Mediation] rules as presently
in force."
Parties may wish to consider adding a provision that:
a) number of arbitrators shall be . . . (one or three);
b) place of arbitration shall be . . . (town or country); and
c) language(s) to be used in the arbitral proceedings shall
be . . . (language or languages).
Footnotes
("A New Way to Resolve International Business Disputes in Illinois")
| 1. |
710 ILCS 30/1-1, et seq. |
| 2. |
24 ILM 1302 (1985). |
| 3. |
710 ILCS 5/1, et seq. |
| 4. |
200 World Trade Center, Suite 2400, The Merchandise Mart, Chicago, IL
USA 60654; 312-409-1373 (telephone), 312-701-9335 (fax), cidra@sw.com
(e-mail), www.cidra.org
(Web site); Peter V. Baugher, president, Teresa Frisbie, executive director. |
| 5. |
CIDRA's Arbitration and Mediation Rules are available at its Web site:
www.cidra.org/rules.htm. |
| 6. |
9 USC ¤ 201. |
| 7. |
9 USC ¤ 201; also see the Inter-American Convention on International
Commercial Arbitration ("Panama Convention"), immediately following 9
USC ¤ 301. |
| 8. |
For more, see the United Nation's Web site at www.un.org/Depts/Treaty/final/ts2/newfiles/part_boo/xxii_boo/xxii_1.html. |
| 9. |
9 USC ¤ 1, et seq, 43 Stat 883. |
| 10. |
The FAA's definition of "commerce" as "commerce" among the several States
or with foreign nations does not provide a distinction. Additionally,
the terms "commerce" or "foreign nation" never again appear in the statute.
The later term is only indirectly implicated by the addition of ¤15 in
1988, "Inapplicability of the Act of State Doctrine." |
| 11. |
9 USC ¤¤ 1-14. |
| 12. |
Volt Information Sciences, Inc. v Board of Trustees of the Leland Stanford
Jr. Univ., 489 US 468, 477, 109 S Ct 1248 (1989) ("The FAA contains no
express preemptive provision, nor does it reflect a congressional intent
to occupy the entire field of arbitration."). |
| 13. |
Id, 489 US at 478. Most procedural aspects of arbitration not addressed
in federal statutes can be regulated by state or other local laws. |
| 14. |
710 ILCS 5/1-5/23. |
| 15. |
Allied-Bruce Terminix Companies, Inc. v Dobson, 513 US 265, 115 S Ct
834 (1995). |
| 16. |
710 ILCS 30/1-1 et seq; sponsored by Rep. Elizabeth Coulson (R-Glenview)
and Sen. Carl E. Hawkinson (R-Galesburg). |
| 17. |
24 ILM 1302 (1985). |
| 18. |
UNCITRAL offers extensive online resources at www.uncitral.org/. |
| 19. |
It is unclear what would happen if that contractual representation were
objectively false, although the arbitrators do have authority to rule
upon the tribuna's jurisdiction. 710 ILCS 30/1-5(b), (c). |
| 20. |
710 ILCS 30/15-5(a). |
| 21. |
710 ILCS 30 1/25. |
| 22. |
710 ILCS 30/10-10, 10-20, and 10-25. |
| 23. |
710 ILCS 30/5-10(a). |
| 24. |
710 ILCS 30/5-15. |
| 25. |
710 ILCS 30/15-10. |
| 26. |
710 ILCS 30/1-30. A defendant in an ICAA matter brought in Illinois
state court might be able to remove to a federal court in Illinois with
diversity jurisdiction (28 USC ¤ 1332), or under the Foreign Sovereign
Immunities Act (28 USC ¤¤ 1602, et seq.). |
| 27. |
710 ILCS 30/10-5, 10-10(d). |
| 28. |
710 ILCS 30/10-10(a)-(f). |
| 29. |
710 ILCS 30/10-15. |
| 30. |
710 ILCS 30/15-5(a). |
| 31. |
710 ILCS 30/15-5(b). |
| 32. |
710 ILCS 30/15-5(c). |
| 33. |
710 ILCS 30/15-5(b). |
| 34. |
710 ILCS 30/15-5(c). |
| 35. |
710 ILCS 30/20-10. |
| 36. |
710 ILCS 30/20-15. |
| 37. |
710 ILCS 30/20-25. |
| 38. |
710 ILCS 30/20-35. |
| 39. |
710 ILCS 30/20-40. |
| 40. |
710 ILCS 30/20-45. |
| 41. |
710 ILCS 30/20-50. |
| 42. |
Id (emphasis added). |
| 43. |
710 ILCS 30/25-5(c). |
| 44. |
Id. Although the arbitrators are able to "take into account the usages
of the trade applicable to the transaction." 710 ILCS 30/25-5(d). |
| 45. |
710 ILCS 30/25-5(a). |
| 46. |
Id. ILCS 30/25-5(a). |
| 47. |
See, e.g., Mass. Bay Ins. v Vic Koenig Leasing, 136 F3d 1116, 1120 (7th
Cir 1998). |
| 48. |
710 ILCS 30/25-20(i). |
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