Originally from World Arbitration And Mediation Review (WAMR)

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YOU CAN BET THE COMPANY BUT NOT THE

STATE: THE PROPER AND IMPROPER
CONDUCT OF SOVEREIGNS IN ARBITRATION
Laurence Shore

I. INTRODUCTION
Let me begin with a war story that I hope rises to the level of,
in Professor David Bederman’s felicitous phrase, a “systemic
example” of my paper’s argument today.
My first case against a sovereign was against the United States
of America. It was a Federal Tort Claims Act (“FTCA”) case, so not
an arbitration, but still relevant for present purposes. My opposite
number, the Assistant United States Attorney (“AUSA”), was
actually my former boss in the law firm at which I was then
practicing. In training me at the firm, he had been one of the
fairest and most ethical lawyers I had met. In the FTCA case,
however, he was all elbows and knees and a lot worse than that.
In the course of one deposition – I am happy to say that arbitration
has for a number of years permitted me to repress memories of
the depositional food fights – the AUSA clearly crossed the line
into sharp practice. During a break from the shouting over who
would be calling the magistrate first, I said to my former boss,
“What the hell are you doing? All this, and you represent the
government.” He stuck a long, bony finger into my chest and
replied, “You’re just another jerk suing the United States of
America.”
Maybe we both had a point, though mine was perhaps a bit
naïve. The sovereign’s legal representative in a commercial
matter is, like her opposing counsel, advocating her client’s
position, but to take a phrase from Professor Ian Brownlie’s
Separate Opinion in the CME v. Czech Republic case (an opinion to
which I will return), “the [State] is not a commercial entity.”1 That