Q&As

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These Q&As seek to briefly address common questions faced when dealing with Arbitration matters.

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Latest Arbitration News

California district court rules on challenges to AAA award alleging arbitrator’s use of AI (Lapaglia v Valve)

Arbitration analysis: A consumer filed for arbitration under the American Arbitration Association (AAA) rules against Valve, parent of the Steam digital gaming platform, alleging violations of federal and state unfair competition laws. The arbitrator dismissed all claims and issued a zero-dollar award. After the award was confirmed, the consumer sought to vacate it, arguing, inter alia, that the arbitrator delegated authority to AI. The court did not rule on the merits and dismissed the case for lack of jurisdiction. Relying on the Supreme Court’s decision in Badgerow, the court noted that the FAA established substantive rules governing arbitration agreements but did not itself confer federal jurisdiction or create a federal cause of action. Parties seeking to confirm or vacate an arbitration award would therefore need to demonstrate an independent basis for federal jurisdiction. Since no such basis was established, the court dismissed the case. Written by Gizem Alper, International Legal and ADR Consultant.

Court of Appeal clarifies approach to conflicting dispute resolution clauses (Tyson v GIC Re, India)

Commercial analysis: The Court of Appeal has clarified the interpretation of conflicting dispute resolution clauses. Where inconsistent provisions (for example, conflicting arbitration and jurisdiction clauses) are contained within the same document, the document must be read as a whole, with effect given to all clauses if possible. However, this principle has limited application where the conflicting clauses are in different documents and governed by a hierarchy provision or 'confusion clause'. In that instance, (as in this case), where the clauses are inconsistent the hierarchy clause will apply. This significant judgment highlights the value of a clearly drafted express hierarchy provision in cases of conflict. Written by Harriet Campbell, senior knowledge lawyer at Penningtons Manches Cooper.

: LexisNexis Middle East publishes whitepaper on AI ethics in legal practice

LexisNexis Middle East has published a whitepaper on ‘Navigating the Digital Scale of Justice: Ethics & AI’, examining how the integration of trust, accountability and transparency are essential when utilising artificial intelligence (AI) in legal practice. The paper also highlights ethical challenges such as accountability for AI outputs, risk of hallucinations and false authority. It also stresses the importance of transparency and consistent human oversight.

Measuring loss in charterparty, carriage of goods and sale of goods disputes: a Court of Appeal decision

Commercial analysis: In Hapag-Lloyd AG v Skyros Maritime Corporation and Agios Minas Shipping Company, the Court of Appeal has clarified the law on damages in relation to a claimant’s ability to recover market loss in circumstances where the claimant’s contractual arrangements with third parties mean that it would not have been able to take advantage of the market. The judgment deals with damages for late redelivery of vessels under a time charter but will be relevant to other claims for market loss, for example for early redelivery and in carriage of goods and sale of goods disputes. Anna Fomina and Alex Andreou of HFW consider the matter in their article below. Please note that the Hapag-Lloyd AG, the charterers in this case, have applied for permission to appeal to the UK Supreme Court and the outcome of their application is awaited.

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