Insights

The world has watched in horror as tragedy has unfolded in Israel because of the brutal terrorist attacks carried out by Hamas.  Nothing can compensate for the devastating loss of life, for the trauma suffered by those injured or kidnapped, or for the grief, sorrow, fear, and anger felt by family members.  For the past twenty-five years, American victims or family members have held Iran accountable in U.S. courts for its sponsorship and support of murderous and terrorist acts like those carried out by Hamas in Israel.  The U.S. legal system may again be a vehicle to hold Iran and its proxies to account today.

The Saudi Center for Commercial Arbitration (SCCA) has published the second edition of its arbitration rules, which came into effect on May 1, 2023 and applies to all arbitrations commenced on or after that date. As compared to the 2018 rules, these amendments are aimed at making the SCCA more attractive to a variety of business sectors. The new rules are the fruit of two years of consultation with industry experts, all in an effort to meet the highest standards in international arbitration. Some of the noteworthy amendments include the establishment of the SCCA Court, the removal of references to Sharia law, and new regulations regarding consolidation, cybersecurity, joinder, and emergency protective measures.

Can a technology company be found liable for allegedly aiding and abetting terrorism based on a terrorist organization’s use of the company’s general online platform? In Twitter v. Taamneh and Gonzalez v. Google, the Supreme Court answered: generally, no.

On December 15, 2022, in Raad v. Bank Audi SAL, Case No. 21-2612, the U.S. Court of Appeals for the Second Circuit vacated the Southern District of New York’s decision to dismiss the breach of contract case on forum non conveniens grounds. In its Summary Order, the Court of Appeals found that the forum selection clause in the General Agreement between the depositors and the bank did not contain language directing that Beirut courts have exclusive jurisdiction over disputes arising from their agreement. While this decision gives a glimmer of hope to these account holders, the Summary Order certainly does not ensure victory for the Raads just yet. Importantly, the ruling also does not have precedential effect, meaning it will provide limited support for others seeking to bring claims against Lebanese banks for refusing to release their funds. Nonetheless, this decision demonstrates that persons and entities with funds locked behind capital controls instituted unilaterally by Lebanese banks due to the ongoing Lebanese financial crisis may still have a path to redress in U.S. courts.

Can a party in an international arbitration compel a person in the United States to provide testimony or produce documents? For decades, the answer to this question has been “maybe, depending on where the person is located.” Today, the Supreme Court definitively and unanimously answered this question, and the answer may leave some pleased and others disappointed.

According to recent reports, Ukrainian President Zelenskyy has directly requested that the United States designate Russia as a State Sponsor of Terrorism (“SST”), an action that the United States has been considering for some time. The designation would have far-reaching implications and would automatically trigger some of the most aggressive unilateral sanctions in the United States’ arsenal, including restrictions on financial transactions, defense exports and sales, and foreign aid. These would further ramp up pressure from even the existing slew of sanctions imposed on Russia and its oligarchs.

With the geopolitical and economic crisis in Russia and Ukraine growing rapidly from recent events, international commercial operations in the region will be severely impacted in some manner, and many such impacts will result in disputes.  The events surrounding the peso crisis in Argentina in early 2000s, as well as those in Venezuela from the actions of Hugo Chavez, and others arising out of the Arab spring, all resulted in dozens of international disputes. We may see the same from current events, and there will be dispute options available to numerous companies with operations in either country who are experiencing severe disruptions of operations, loss of profit, or destruction of property, including, potentially: investor-State arbitration, domestic litigation, or claims tribunal recovery.

The highly anticipated 2022 revised rules of the Dubai International Arbitration Centre (“DIAC”) were approved by the DIAC’s Board of Directors on February 25, 2022. The revised rules will come into effect starting March 21, 2022 and will govern all new requests for arbitration that are submitted on or after that date.

Dubai’s government recently made significant changes to its arbitral framework as part of its effort to strengthen the position of the Emirate as a dominant center for international dispute resolution in the region. Decree No. 34 of 2021 (the “Decree”), issued by Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum on September 14, 2021 and effective as of September 20, 2021, has fundamentally altered the existing arbitration framework in Dubai, and has the potential to have significant impacts for parties whose arbitration agreements name the now-abolished institutions.

For over 18 months, COVID-19 has relentlessly impacted businesses and commercial relationships in Latin America. In an effort to prevent the virus’s spread, governments across the region implemented lockdowns, gradual phased re-openings, and several other measures. With the recent spread of the Delta variant and vaccination rates remaining low compared to the United States, Canada and much of Europe, the region is expected to continue to experience outbreaks, and governments may be forced to impose further COVID-related restrictions.

The highly anticipated Supreme Court case Servotronics v. Rolls-Royce PLC and Boeing was expected to finally resolve the Circuit split regarding whether U.S. courts may order and compel discovery to aid in international commercial arbitrations under 28 U.S.C. § 1782. In a disappointment to practitioners and courts alike, the petitioner in Servotronics stipulated to the dismissal of its petition ahead of scheduled oral arguments, leaving the issue unresolved and forcing parties to continue navigating disparate jurisdictions. Fortunately, it appears that the Supreme Court will not lack new opportunities to provide clarity, as parties race to file similar petitions on the issue.

The new, revised 2021 ICC Rules reflect a shift toward greater modernization, efficiency, integrity, and enforceability. The changes, which apply to all cases registered with the ICC on or after January 1, 2021, are partially influenced by the impact of COVID-19 and the necessary technological adaptations that the Court, like parties and their counsel, have been forced to undergo. This shift is now codified in the revised Article 26(1), which empowers a tribunal to decide whether a hearing should be conducted in person, or remotely by videoconference or telephone, and in the revised Article 3(1), which removes the requirement of paper filing and replaces it with the presumption of electronic transmission. Other notable changes to the ICC Rules include:

Business disruptions caused by the global COVID-19 pandemic have demonstrated the importance of including clauses in contracts to appropriately govern the parties’ rights and obligations when such disruptions occur. Even as many U.S. jurisdictions begin the process of loosening the restrictions imposed to stop the spread of the pandemic, it is to be expected that business disruptions will continue. Accordingly, before you enter into any new contracts, you should consider carefully the force majeure and/or hardship clauses you include to address such business disruptions.

The pandemic is affecting the entire world, particularly countries that were already in crisis, such as Venezuela, which are in a more vulnerable position to combat the consequences of the coronavirus. In collaboration with PAE-Legal, this alert provides an overview of the measures adopted by Nicolás Maduro in Venezuela. The pandemic—together with the previously existing shortages of gasoline, food and supplies—is significantly affecting commerce and threatens to completely shut down the country’s economy.

Many businesses have issued notices to and/or received notices from a contracting party invoking force majeure, or a similar doctrine to excuse non-performance, based on a COVID-19 related business disruption. However, it is not always clear that the party issuing the notice is permitted to either suspend performance or terminate the contract because of a force majeure event.

The impacts of COVID-19 are rapidly evolving and quickly disrupting business operations. If they haven’t already done so, many businesses are deciding whether to activate contractual force majeure clauses or looking to other doctrines that may excuse non-performance. While many businesses during this global pandemic may want to address performance disruptions amicably to the extent possible, understanding how disputes over force majeure clauses are decided allows a business to act strategically. This is true whether you are the party seeking damages for non-performance or invoking a defense to performance. Even with a well-crafted force majeure clause, parties can disagree about whether the defense applies, what the implications are to continued performance, and what damages, if any, are recoverable. While each dispute is highly fact-specific and likely to be affected by the language of the contract and governing law, we provide guidance below on the factors most likely to be relevant to resolution of the dispute.

In our previous Crowell & Moring alert, we discussed how COVID-19 is affecting commercial activities and dynamics in Latin America, particularly in Colombia and Mexico. Our second edition focuses on the measures currently in place in two South American nations: Argentina and Peru. Like most of the region, unprecedented measures in Argentina and Peru are causing business interruptions across all industries, forcing companies to review their commercial agreements and determine whether “force majeure” or other similar concepts may help them to mitigate the disruption.

In a world battling a global pandemic, it was only a matter of time before COVID-19 and its impact on commercial relationships arrived in Latin America and the Caribbean. As the vast majority of countries in Latin America and the Caribbean have confirmed cases, governments have increasingly implemented unprecedented measures and other efforts to prevent the spread of the virus. 

COVID-19 likely will lead many contracting parties to consider declaring that a force majeure event has occurred when performance has become impossible or significantly more difficult. But the exact wording of the force majeure clause will matter a great deal in determining whether non-performance is legally excused. Force majeure clauses can be very different. You should consider carefully the language of a force majeure provision, and the questions below, before deciding on your response to a business disruption.

Force majeure and related doctrines may allow a contracting party to suspend or terminate performance when certain unforeseeable events that are beyond the control of the parties occur, such as a global pandemic or government action or prohibition. However, the mere existence of a force majeure clause and qualifying event may not excuse non-performance if that event is not the actual cause of the business disruption.