Lloyd's Maritime and Commercial Law Quarterly
OPENING MORE DOORS THAN IT CLOSES
Stolt-Nielsen v. AnimalFeeds International
Class arbitration—a procedural device that transplants aspects of US-style class actions into the arbitral context—is one of the most controversial developments in the field of international commercial arbitration today, facing criticism from both within and without the United States. Once considered a purely domestic dispute resolution mechanism, class arbitration has shown an increasing inclination and ability to involve non-US parties.1
Perhaps the most heavily scrutinised aspect of class arbitration is whether the procedure can be adopted in situations where the arbitration agreement is silent or ambiguous as to class treatment. That issue was recently discussed by the United States Supreme Court in Stolt-Nielsen SA v. AnimalFeeds International Corp,2 which involved an antitrust claim brought in the international maritime context. Although the court handed down an opinion that was embraced by a clear majority, the decision leaves numerous questions unanswered. Rather than end the controversy about the availability of class proceedings in arbitration, Stolt-Nielsen will only serve to increase litigation and confusion.
The procedural posture of the dispute is somewhat unusual and played a large role in the eventual disposition of the case. The matter arose when a number of charterers filed a series of class actions in different US federal courts, alleging civil antitrust violations against several international shipping companies. Because the charterparties in question3 included arbitration agreements referring “[a]ny dispute arising from the making, performance or termination of this Charter Party” to arbitration in New York “in conformity with the provisions and procedure” of the Federal Arbitration Act (“FAA”),4 the defendant in one of the lawsuits moved to compel arbitration. A federal appellate court subsequently determined that the agreement was binding and that the claims should proceed in arbitration. However, while that appeal was pending, the Judicial Panel on
1. See, eg, SI Strong, “Enforcing Class Arbitration in the International Sphere: Due Process and Public Policy Concerns” (2008) 30 U of Pennsylvania J of International Law 1, 3–5.
2. (2010) 130 S Ct 1758; [2010] 2 Lloyd’s Rep 360.
3. The cases initially involved the Vegoilvoy and Asbatankvoy charterparties, but the Supreme Court dealt only with disputes arising under the former: Stolt-Nielsen SA v. AnimalFeeds Int’l Corp (2008) 548 F 3d 85 (2d Cir), 88–89.
4. 9 United States Code §§ 1–307.
LLOYD’S MARITIME AND COMMERCIAL LAW QUARTERLY
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