Parties having a qualifying dispute would chose their own substantive law (with NJ law serving as the “gap filler”) and would be able opt into such a center’s procedural rules or any other set of procedural rules the parties agree to choose.
Sep 16, 2016 1:07 PMThe New Jersey (NJ) Senate, by unanimous vote, has passed Senate Bill 602, the "New Jersey International Arbitration, Mediation and Conciliation Act", sponsored by Senate Minority Leader Thomas H. Kean, Jr.A step in the right direction, if this bill becomes law as presently written, it would empower public research universities in the state to establish centers for arbitration and mediation, with such centers providing their own procedural rules.
Parties having a qualifying dispute would chose their own substantive law (with NJ law serving as the “gap filler”) and would be able opt into such a center’s procedural rules or any other set of procedural rules the parties agree to choose.A qualifying dispute would be one in which one or more of the parties is a non-US resident (individual or corporate) as defined by the bill, or when the property or other asset(s) in controversy are located outside of the United States, or when the underlying business relationship significantly concerns some foreign jurisdiction. Domestic commercial disputes may also be arbitrated or mediated at such a center, provided the parties expressly agree to avail themselves of such a facility in the dispute resolution clause of the underlying contract.Parties who elect to have their dispute heard before a panel or tribunal housed by an arbitration center in NJ would have to fully fund a bond equal to the amount of their exposure in the controversy. Additionally, the parties would be deemed to have voluntarily submitted themselves to the (in personam) jurisdiction of the courts of New Jersey upon the execution of their agreement to arbitrate in the state, but only to the extent required by the arbitration and enforcement its resulting decision.Having been passed by the NJ Senate, the bill now moves to the relevant committee of the NJ General Assembly.JHI will continue to track this legislation.
Sep 9, 2016 11:44 AMThis is one day of the year all of us set aside for remembering, but there is never a day when we forget.
As with dates officially deemed "National Holidays", JHI's New York HQ Office - per annual Firm tradition - will be closed for business this Monday, September 12, in observance of the 15th anniversary of September 11, 2001.Just as JHI is proud to perform work that may make some small contribution to what, some day, may be the development of a broad, self-sustaining middle class in the Middle East, JHI is honored to be a witness to the resurgence of downtown Manhattan. The Financial District's magnificent comeback is best symbolized by our neighboring Liberty Tower:
September 11 will be a day of remembrance and reflection for us all. JHI will resume offering high-quality professional services on Tuesday, September 13.JHI also wishes our many friends in the Muslim world a happy Eid Al Adha holiday. We would also like to advise clients and friends who do not observe this holiday to expect delays in certain services due to office closures - particularly banks and government offices - throughout the Middle East region during the holiday, which is scheduled to begin at sundown on Sunday, September 11.
Nov 25, 2014 5:53 PMArbitration clauses are often heavily negotiated and complex enough to be referred to as “a contract within the contract”. The reasons for this are obvious (even to us transactional practitioners). The exact terms of a dispute resolution clause can have far-reaching consequences.One of the goals in crafting such a clause is to mitigate the irreconcilability of disputes as they arise by putting your client in the best possible position in the event of a scenario that triggers termination and subsequent arbitration. Naturally, both sides have this in mind during negotiations. But, what happens in jurisdictions where the enforceability of arbitration clauses may be considered by some, fairly or unfairly, to be a somewhat unsettled question?Until recently, while the Kingdom of Saudi Arabia (or, KSA) has been a member to the New York Convention (on the enforcement of arbitral awards), this did not always lead one to predict with certainty that a Saudi court would recognize the validity of the arbitration clause in your agreement with a local party and direct that party to resort to arbitration, as per your agreement. In the past, senior judicial officials and other legal professionals in Saudi Arabia have on occasion issued public pronouncements that arbitration clauses are contrary to Shari’ah and are therefore invalid, and should not be enforced by Saudi courts.That is to say, in Saudi Arabia you may have had the right to enforce an arbitral award granted by a tribunal (keeping in mind the difficulty some may experience in attempting actual collection in the Kingdom), but such public pronouncements may have lead some to wonder if you could successfully assert that the underlying dispute be entered into arbitration in the first place (in the KSA), depending on whether or not the judge in the Saudi court deciding the question deemed your particular arbitration clause (or, arbitration clauses generally) to be appropriate under, or contrary to, Shari'ah.
Today, some are hopeful that the passage of the KSA's new Arbitration Law of 2012 (based on the UNCITRAL Model Arbitration Law) to supplant the KSA Arbitration Law of 1983, and the creation of judicial training centers and the subsequent appointment of judges to serve in a new commercial court system in the KSA, will lead to greater clarity on the subject of the enforcement of arbitration clauses. As with any legal reform, time will tell.In the neighboring United Arab Emirates (UAE), the considerations differ. The validity of the arbitration clause, the formation of the contact, and the nature of the relationship between the parties themselves are just a few of the considerations that a court could measure in weighing the enforceability of a given arbitration clause.
Any Emirati national (individual or corporate) has the right to avail itself of the protection and justice of the courts of the UAE. In the past, this may have prompted some local parties in the UAE to move that a local court should assert jurisdiction, despite the existence of an arbitration clause. It should be said, however, that in the UAE (a commercial hub in the Gulf region that has become famous for the "City of Dreams", Dubai, and increasingly the "Green Emirate" of Abu Dhabi), such motions should rely on more than this basic right if a party wishes to succeed in its attempt to escape arbitration under a valid clause.
Following certain provisions of the UAE (federal) Civil Code, judges in local courts should hold that validly written arbitration clauses are enforceable, except when there exist particular circumstances. For example, in disputes arising from registered commercial agency agreements a judge may deem an otherwise valid arbitration clause unenforceable and declare it void on the grounds that clauses calling for alternative dispute resolution (or, ADR) in such contracts are contrary to, or inconsistent with, "Public Policy". (Please note: the commonly used, colloquial term "sponsorship agreement" is much broader and could refer to several different types of business relationships in the UAE; whereas, "registered commercial agency agreements" refers to a specific type of business relationship, which must also be properly registered with the relevant government office in accordance with both the law and the terms stipulated in the agreement itself.)So, what do you do when doing business internationally, and some of your relationships are with parties in the Middle East?Negotiate an arbitration clause.
And, retain an experienced attorney with local knowledge (preferably one with a presence in the specific jurisdiction in question: the laws of Middle Eastern jurisdictions, like the laws of countries in other regions of the world, are subject to change).
If the local party with which your company is doing business has attachable assets outside of the Middle East in a country where collections may be deemed less frustrating, that can be a plus. But, as with just about everything else, there is no substitute for experience -- and solid, relevant legal experience may be one of your best assets at the negotiating table.
Mar 6, 2014 1:38 PMThe government of the Kingdom of Saudi Arabia (KSA) recently announced its intention to establish training centers for judges. Such training centers will be administered by the KSA Ministry of Justice. This comes on the heels of King Abdullah's creation of 5,000 new judgeships in the KSA, and is accompanied by vocal opposition from the Kingdom's more traditional, conservative quarters.
For years, the commercial community in the KSA (both local and foreign) has expressed a need for greater transparency in Saudi courts. Procedurally and substantively, a perceived lack of predictability has resulted in a chilling effect on commerce in the KSA.
Arbitration clauses in contracts are of uncertain enforceability in the KSA, as senior judicial officials have, in the past, deemed such clauses to be "contrary to Shari'ah". Accordingly, irrespective of any arbitration clause in any business arrangement entered into, in the event of an irresolvable conflict between the parties one could reasonably expect such a dispute to be adjudicated before a Saudi court.
The uncertain enforceability of arbitration clauses and perceived unpredictability of the courts have combined to generate something of a chilling effect on investment in the KSA. Meanwhile, Gulf Cooperation Council (GCC) provisions that call for entities native to any GCC Member State to be treated as a local company by the governments of each of the other Member States have added to the investment boom in smaller Gulf countries such as Qatar and the United Arab Emirates: some companies enter those jurisdictions in the hope that, at some point, they might be able to access the much larger Saudi market without completely exposing their investment (or, their employees) to the Saudi legal system.
It is hoped by many in the commercial community that the addition of 5,000 new judges, uniformly trained in the enforcement of commercial and corporate law, will improve the overall business environment in the KSA by generating a greater sense of transparency and predictability in the courts.
The details are as yet unknown; and, conservative elements who view laws and their interpretation as coming from God, not precedent, statute or human beings generally, still have opportunities to oppose the establishment and effective administration of such training centers. JHI will continue to track such developments as they arise.