Anyone who has ever started a trial in the United States will confirm that litigation in America is difficult and very expensive. Among the advantages, they say that the decisions of the courts are strictly enforced here. As, however, in the case of an alternative method of dispute resolution – arbitration. In this blog post, we will briefly describe how the arbitration process in the USA is regulated, how the decisions of the arbitral tribunals are enforced and what obstacles can be faced when deciding to conduct an arbitration in the US.
The United States is a party to virtually all international treaties and conventions that facilitate the recognition and enforcement of arbitral awards.
In addition, US courts may apply the procedural rules set forth in the Federal Civil Procedure Rules, the local procedural rules of the judicial district in which the enforcement action was initiated, and the individual actions of the judge deciding the enforcement action.
In the United States, which is a signatory to the New York Convention, there is still a special approach to its provisions.
In particular, the Convention applies:
- only to the recognition and enforcement of judgments rendered in the territory of another contracting state;
- to commercial disputes only, regardless of whether they are contractual.
Information available in the arbitration process
The arbitrator may ask the US court to authorize the identification and freeze of assets to satisfy the arbitral award. The arbitrator can request documents from the debtor (and any institution that may have information about the debtor's assets) and interview people with the relevant information.
Providing information is the responsibility of the parties, and the result of failure to comply with such a requirement will be financial sanctions.
Documents must be submitted in English and that foreign language documents must be accompanied by a certified English translation. The translator must provide proof that he or she is a certified translator and that the translation is correct and accurate.
After the peaceful settlement of the dispute in the USA, the party can challenge the court's decision not to recognize the arbitral award by filing an appeal.
American judges have no specialization. For example, an appeal in a criminal case may be considered in the building of an arbitration court, after which the same judge may immediately proceed to consider an arbitration dispute between business partners. Cases are allocated by a computer, the judge does not know in advance what kind of case he will come across: criminal or civil.
There is also a commission that monitors manifestations of corruption in the judicial system, and the work of this commission is well established. As soon as a corruption proposal comes to a judge, he is obliged to immediately report it. If he does not do this, he will lose the right to engage in legal activities forever.
The court may cancel the award only if it finds at least one of the following limited grounds:
- the decision is the result of corruption or fraud;
- there is obvious bias or proven corruption on the part of the arbitrator;
- illegal actions of the arbitrator, such as refusal to hear evidence.
Obtaining legal assistance from the US courts
American courts provide legal assistance to courts of other states, if a bilateral international treaty on legal assistance in civil cases is signed with these states. Both states are parties to the 1965 Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, and 1970 Hague Convention on Evidence Abroad in Civil or Commercial Cases. In addition, in cases not covered by international conventions, American courts can also provide legal assistance under certain circumstances.
IQ Decision UK legal professionals have analyzed some aspects of the arbitration procedure and enforcement of arbitral awards in the United States. Dispute resolution by US arbitration requires special attention and understanding of how the procedure will proceed. In this case, legal advice on the arbitration process will help to deal with all the issues that have arisen. To order a comprehensive consultation, please fill out the feedback form below.