{"id":887118,"date":"2016-02-17T09:55:53","date_gmt":"2016-02-17T16:55:53","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=887118"},"modified":"2016-02-17T09:55:53","modified_gmt":"2016-02-17T16:55:53","slug":"mastering-dispute-resolution-clauses","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/mastering-dispute-resolution-clauses\/","title":{"rendered":"Mastering Dispute Resolution Clauses"},"content":{"rendered":"<p>Steven K. Davidson and Michael J. Baratz | Steptoe &amp; Johnson LLP | February 9, 2016<\/p>\n<p><strong>Three Tips for Better Enforcement of Arbitral Awards<\/strong><\/p>\n<p>Congratulations\u2014you won your arbitration but now the other side refuses to pay.\u00a0 Steptoe\u2019s judgment enforcement practice is among the best in enforcing and collecting on awards and judgments.\u00a0 Enforcing an award can be difficult.\u00a0 But with a few changes to your <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/insurance-appraisal-called-almost-perfect-method-of-alternative-dispute-resolution\/\" target=\"_blank\">dispute resolution<\/a> provision, you can improve your chances (and speed) of recovery.\u00a0 Follow these three practical suggestions to reduce your headaches after a hard fought victory.<\/p>\n<p>Three practical tips to improve your dispute resolution provision should you need to enforce an arbitral award:<\/p>\n<ol start=\"1\">\n<li><strong>Consent to Personal Jurisdiction and Select a Forum for Enforcing an Award<\/strong><\/li>\n<\/ol>\n<p>Parties often include <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/4-court-of-appeal-opens-pandoras-box-on-definition-of-contractor-for-forum-selection-clauses\/\" target=\"_blank\">forum selection clauses<\/a> as well as explicit consent to personal jurisdiction when they opt\u00a0<em>not\u00a0<\/em>to arbitrate.\u00a0 Yet, when parties select arbitration, they focus exclusively on the arbitration (rules, location, procedures,\u00a0<em>etc.<\/em>) but often neglect to consider enforcing an award\u2014typically failing to select a forum for converting the award into a judgment.<\/p>\n<p>This omission can present real issues as some courts have required award-creditors to establish personal jurisdiction over the award-debtor to enforce the award.\u00a0\u00a0<em>See, e.g., Frontera Res. Azer. Corp. v. State Oil Co. of Azerbaijan<\/em>, 582 F.3d 393 (2d. Cir. 2009);\u00a0<em>First Inv. Corp. of the Marshall Islands v. Fujian Mawei Shipbuilding, Ltd.<\/em>, 703 F.3d 742 (5th Cir. 2012).\u00a0 Other courts have entertained\u00a0<em>forum non conveniens\u00a0<\/em>challenges.\u00a0\u00a0<em>See, e.g., Monegasque Du Reassurances v. Nak Nafogaz of Ukraine<\/em>, 311 F.3d 488 (2d Cir. 2002).\u00a0 Regardless of your view of these decisions, parties can control this issue through proactive drafting of <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/arbitration-clauses-under-attack-do-they-harm-consumers\/\" target=\"_blank\">dispute resolution clauses<\/a>.<\/p>\n<p>We suggest including provisions in your agreements that both consent to personal jurisdiction for enforcement of an arbitral award and select forums in which enforcement can proceed.\u00a0 There can be particular issues that arise in various jurisdictions and so you should consult with us or counsel before adopting boilerplate language.\u00a0 Such consent could materially streamline enforcement and eliminate procedural hurdles.<\/p>\n<ol start=\"2\">\n<li><strong>Appoint Domestic Agents for Service of Process on Foreign Individuals or Entities<\/strong><\/li>\n<\/ol>\n<p>Relatedly, converting a commercial arbitral award into a judgment often requires commencing a plenary action\u2014including service of process.\u00a0 More and more disputes involve international arbitration and when an award-debtor is \u201cnot within any judicial district of the United States,\u201d service of process can be arduous.\u00a0 Whether through the Hague Convention on Service, letters rogatory, pursuant to a foreign country\u2019s law, or other means, the process is fraught with peril and delay.\u00a0 These issues can become even more pronounced if the award-debtor is a foreign sovereign or an agent or instrumentality of a foreign sovereign.\u00a0 Here too, proactive drafting can streamline the process.<\/p>\n<p>For private individuals or corporate entities in a foreign country, we recommend that dispute resolution provisions appoint an agent within the United States to accept service on behalf of the foreign award-debtor for purposes of enforcing an award.\u00a0 \u201c[P]arties to a contract may agree in advance to the jurisdiction of a given court, to permit notice to be served by the opposing party, or even to waive notice altogether.\u201d \u00a0<em>National Equipment Rental, Ltd. v. Szukhent<\/em>, 375 U.S. 311, 315 (1964).\u00a0 The United States Court of Appeals for the Second Circuit found proper service of process where the dispute resolution provision specifically allowed service by mail on a party\u2019s representative.\u00a0\u00a0<em>Doctor\u2019s Associates, Inc. v. Distajo<\/em>, 107 F.3d 126, 136 (2d Cir. 1997).\u00a0 We recommend appointing the agent within the United States so that you will be able to serve process efficiently without resort to foreign methods\u2014we have noted that issues can arise if a foreign agent is selected but that foreign country does not permit service in that way.<\/p>\n<p>When it comes to serving process on foreign sovereigns and their agents and instrumentalities, the FSIA expressly authorizes parties to enter into a private arrangement.\u00a0 The Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. \u00a7 1608, governs service of process on a foreign sovereign or its agents and instrumentalities and provides that service of process may be accomplished \u201cin accordance with any special arrangement for service\u201d between plaintiff and the foreign state and its agents or instrumentalities.\u00a0\u00a0<em>Id.<\/em>\u00a0 Successfully serving a foreign government can be difficult; a contractual provision provides a pragmatic approach.<\/p>\n<ol start=\"3\">\n<li><strong>Setting Post-Judgment Interest Rate in Dispute Resolution Provision<\/strong><\/li>\n<\/ol>\n<p>Given today\u2019s low interest rate environment, many post-judgment interest rates are below one percent.\u00a0 Indeed, the current federal post-judgment interest rate as of this writing is 0.33%.\u00a0 Even if the arbitral panel sets a decent post-award interest rate, some courts hold that the Federal Arbitration Act (FAA) requires application of the post-judgment statutory rate after an <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/the-arbitrability-of-statutes-of-limitations-in-reinsurance-disputes\/\" target=\"_blank\">arbitral award<\/a> is converted to a judgment.\u00a0\u00a0<em>See\u00a0<\/em><em>Westinghouse Credit Corp. v. D\u2019Urso<\/em>, 371 F.3d 96, 100 (2d Cir. 2004);\u00a0<em>Tricon Energy Ltd. v. Vinmar Int\u2019l, Ltd.<\/em>, 718 F.3d 448, 457 n.14 (5th Cir. 2013);\u00a0<em>Fid. Fed. Bank, FSB v. Durga Ma Corp.<\/em>, 387 F.3d 1021, 1024 (9th Cir. 2004);\u00a0<em>Parsons &amp; Whittemore Ala. Mach. &amp; Servs. Corp.,<\/em>\u00a0744 F.2d 1482, 1484 (11th Cir. 1984).\u00a0 (It should be noted, however, that ICSID awards are treated differently since the recognition of such awards are governed by separate treaty and statute in the US).<\/p>\n<p>But these same courts also hold that private parties have&#8230;<\/p>\n<p><a href=\"http:\/\/www.lexology.com\/library\/detail.aspx?g=41d9ae73-4595-479a-b9ee-332cc5d69cc0&amp;utm_source=Lexology+Daily+Newsfeed&amp;utm_medium=HTML+email+-+Body+-+General+section&amp;utm_campaign=Lexology+subscriber+daily+feed&amp;utm_content=Lexology+Daily+Newsfeed+2016-02-11&amp;utm_term=\" target=\"_blank\">To finish reading this article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Steven K. Davidson and Michael J. Baratz | Steptoe &amp; Johnson LLP | February 9, 2016 Three Tips for Better Enforcement of Arbitral Awards Congratulations\u2014you won your arbitration but now the other side refuses to pay.\u00a0 Steptoe\u2019s judgment enforcement practice is among the best in enforcing and collecting on awards and judgments.\u00a0 Enforcing an award&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/mastering-dispute-resolution-clauses\/\">Continue reading <span class=\"screen-reader-text\">Mastering Dispute Resolution Clauses<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9,436],"tags":[],"class_list":["post-887118","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","category-dispute-resolution-2","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Mastering Dispute Resolution Clauses - Advise &amp; Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/mastering-dispute-resolution-clauses\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mastering Dispute Resolution Clauses - Advise &amp; Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Steven K. 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