International Litigation & Arbitration: July 2020 Archives

A Party Cannot Be Both Party and Arbitrator: First Circuit Finds Arbitration Clause Unconscionable

The First Circuit Court of Appeals recently found an agreement's arbitration clause unconscionable where one party was given almost unfettered control over the selection of the arbitrators. In Trout v. Organización Mundial de Boxeo, Inc., plaintiff Austin Trout ("Trout"), a professional boxer, claimed the defendant World Boxing Organization's ("WBO") decision to move him from a weight class cost him to opportunity to pursue a world championship in that class. He brought claims under the Muhammad Ali Boxing Reform Act, as well as breach of contract, fraud, and negligence claims.

U.S. Supreme Court Allows Non-Signatories to Enforce Arbitration Agreements

In GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, the United States Supreme Court was presented with the question whether domestic equitable estoppel doctrines that allow a non-signatory to an arbitration agreement to compel arbitration in disputes arising under such agreement conflict with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, more commonly known as the New York Convention. The Supreme Court unanimously found no conflict, paving the way for non-signatories to agreements containing international arbitration clauses to compel arbitration using domestic doctrines of equitable estoppel.

First Circuit Affirms Dismissal of Class Action Claims Against General Electric by Victims of Nuclear Disaster Due to Availability of Adequate Alternative Japanese Forum

In March 2011, a massive 9.0 magnitude earthquake occurred just off the coast of Japan and triggered a 45-foot tsunami, which in turn breached the seawall and resulted in a series of explosions and a widescale nuclear disaster at the Fukushima Daiichi Nuclear Power Plant (the "FNPP") in Japan. Shinya Imamura and several other individuals and business entities from the surrounding area who suffered property damage and/or economic harm as a result of the disaster filed a class action lawsuit, against General Electric Company ("GE"), Imamura v. General Electric Co., in the U.S. District Court for the District of Massachusetts. They sought compensatory and punitive damages from GE, based on their assertions that GE negligently designed the nuclear reactors and safety mechanisms at the FNPP and was at least partially responsible for the nuclear disaster GE's corporate headquarters and principal place of business in Boston, Massachusetts provided basis for jurisdiction over the lawsuit in the Massachusetts federal court.

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