Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.
Arbitration is increasingly used as a vehicle for settling transnational commercial disputes. Arbitration in this context originates not because the arbitral process is speedier or less costly than municipal courts—a perception which in fact is not true in many cases—but rather because the parties are simply unwilling to litigate in another’s home territory. Unless the arbitral process results in a recovery, however, it is a meaningless gesture. In appropriate circumstances, as in the case of litigation in courts, to ensure recovery a party may require a pre-award attachment to secure payment of an expected award.
On November 18, 1982, in Robert R. Cooper v. Ateliers de la Motobecane, S.A., the New York Court of Appeals, by a 4-3 decision, vacated a preaward attachment obtained in New York as security for an arbitral award to be rendered in Switzerland. The decision—the first Court of Appeals case squarely addressing the issue of attachment in aid of arbitration—has the potential for reducing the effectiveness of this provisional remedy in the international arbitration context.