International Arbitration Provisional Remedies - Part 5 Chapter 4 - The Practice of International Litigation - 2nd Edition
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.
In the case of Robert R. Cooper v. Ateliers de la Motobecane, the New York Court of Appeals, by a vote of 4 to 3, vacated a pre-award attachment obtained in New York as security for an arbitral award to be rendered in Switzerland. The court came to its decision by concluding that the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the so-called “New York Convention”) did not permit the granting of such provisional remedies as prejudgment attachments in international arbitration.
In the chapter on “Attachment in Aid of Arbitration” we criticized the then recently decided case and noted that, as a result of the Cooper case, there was a need to “clearly establish the right of parties in international arbitration to seek provisional remedies such as attachment in aid of arbitration in United States courts.” On January 1, 1986, the New York State Legislature amended section 7502 of the C.P.L.R. by expressly providing for the granting of prejudgment attachments and injunctions in arbitrations. In so doing, the Legislature overruled the Cooper case and placed New York on an equal footing with such countries as Australia, Israel, Japan, Italy, West Germany, Austria, East Germany, Nigeria, Kuwait, Sweden and Switzerland, all of which grant provisional remedies in aid of arbitration.
As far back as 1944, the Second Circuit Court of Appeals in Murray Oil Products Co. v. Mitsui & Co., held that attachments in aid of arbitration were permitted under the Federal Arbitration Act (“FAA”). The court held that, although the Act substituted arbitrations for trials as the method of resolving disputes, it did not deprive parties of their rights to provisional remedies.
In coming to the conclusion that it did, the Second Circuit extended to non-maritime parties a right which the Act itself expressly extended to maritime parties. Section 8 of the Act states that, in any proceeding begun by a libel in admiralty, the aggrieved party has the right to seize the other party’s property accordinreg to the usual course of admiralty proceedings.