AN ALIGNMENT OF THE STARS FOR INTERNATIONAL ARBITRATION IN NEW YORK
A convergence of three distinct developments has led to a recent ‘perfect storm’ positioning New York as an optimal situs for international commercial arbitrations: (i) the worldwide economic downturn; (ii) the growing chorus of US courts mandating deference to arbitral decisions and respect for arbitration clauses (a refrain sounded most recently by the US Supreme Court in Oxford Health Plans LLC v. Sutter, 569 U.S. ___, slip op. No. 12-135 (June 10, 2013)); and (iii) the opening of the New York International Arbitration Center (NYIAC). The synchronicity of these developments – the decision in Oxford coinciding with the opening of the NYIAC, both on the heels of the 2008 economic collapse – has reshaped the landscape of international arbitration in the United States, elevating New York as a forum uniquely suited for the resolution of international commercial disputes with the certainty, finality and speed that parties crave.
The economy overburdens the courts
Notwithstanding the signs of recovery that have started to emerge, the effects of the economic crisis continue to be felt as courts face budget constraints (resulting in furloughed staff and backlogged dockets) and businesses see meagre margins with which to negotiate and resolve disputes short of litigation. The result is a circumstance that plagues commercial disputants at an accelerated pace: an alarming increase in the number of disputes that parties have no choice but to litigate, as matters they might have compromised five years ago are now an ‘all in’ proposition for businesses that cannot afford to settle. At the same time, the already overwhelmed courts have fewer and fewer resources to handle their burgeoning caseloads, so parties face the prospect of waiting years longer for a court decision – protracted time that will be filled with legal fees. It is no wonder that parties are increasingly turning to arbitration for a swift and efficient resolution of their disputes.
Oct-Dec 2013 issue
Victoria A. Kummer