Posted on February 11, 2016
Readers, if you missed the Georgetown International Arbitration Week event on the effect of the Choice of Court Agreement Convention on international arbitration yesterday, you missed a pretty good discussion. Marta Pertegás started us off with an overview of the history of COCA and of the Hague Conference more generally, and she showed us a map of states, including significant states such as China, Australia, and Canada, that were at various stages of considering signing the Convention. Chuck Kotuby and I both discussed the reasons why US ratification and implementation is so important. David Stewart and Peter Trooboff presented the two approaches to implementation in the US— the cooperative federalism approach and the federal-only approach.
There was one piece of important and distressing news. Let me give a simplified overview to put the new development in context. The bar, several academics, and others have proposed implementing the COCA by way of a federal statute, just as the United States implemented the New York Convention by enacting Chapter 2 of the FAA. The Uniform Law Commission and others have pushed back, rejecting a “federal-only” approach. The two sides have been trying for a few years to reach an agreement on a cooperative federalism model that would require enactment of both a federal statute and statutes in each state. Recently, a working group had put together a proposal for a cooperative federalism solution. (I have read the working group proposal, and indeed am credited as a member of the group despite my very limited involvement, but I am not going to reprint it here, because I understand that it may be published in the near future).
The news is that the ULC has rejected the working group’s proposed compromise. Because the working group proposal was tilted fairly heavily in favor of the ULC’s position—at least from the perspective of the “federal only” crowd—Professor Stewart opined that the attempt to negotiate a mutually acceptable cooperative federalism approach had failed. If so, then it may be that the Office of the Legal Adviser will offer up “federal-only” legislation. The trick, though, is persuading sixty-six US senators to support ratification, and it seems difficult to image that it would be possible to get the Convention through the Senate if the ULC were publicly asserting that ratification is bad for states’ rights. It’s unclear whether there’s a realistic chance that could happen.
There are all kinds of reasons we should be pressing for ratification and implementation. It’s in the interest of private litigants who want to be able to chose a US forum with some assurance that the resulting judgment will be enforced abroad. It’s in the public interest to expand the influence of our courts and our law and to preserve our influence in the Hague Conference to ratify conventions like COCA that we proposed in the first place. Basically no one thinks that the Convention is a bad idea. Given that, and with due respect to the legitimate concerns about federal encroachment on what has traditionally been an area governed by state law, I really am not sure what important interests the ULC thinks it is protecting that are worth possibly scrapping the project altogether, at least as far as the US is concerned.
For those who are interested, I encourage you to check out the Hague Conference’s bibliography on COCA, as well as a 2013 memorandum from the Legal Adviser that lays out the history and that suggests that if additional efforts at compromise fail, the State Department may be prepared to “focus its energies” on a federal-only approach.
I am not going to reprint my comments from the panel discussion, but I do want to make one point that I made at the panel. The US has liberal laws in a lot of areas relevant to our concerns. A party to a foreign action can serve process here by basically any means appropriate without asking permission of the US government or a US court. An interested person can invoke the aid of our courts to gather evidence for use abroad, and aid will be liberally granted. Under the UFCMJRA and similar uniform laws, foreign money judgments are generally enforceable here. But these are all unilateral measures. Until the entry into force of the Service and Evidence Conventions, US litigants didn’t enjoy reciprocal benefits in many states (and even today they don’t in many states, including some that are parties to these Conventions, but that’s a different story). COCA will similarly level the playing field in the area of recognition and enforcement of certain judgments, just as the New York Convention did for arbitral awards. It’s in our self-interest to ratify this Convention.