In a six-year dispute between Monster Energy Co and City Beverages, LLC d/b/a Olympic Eagles Distributing (Olympic), a judge sitting in the Central District of California has denied Olympic's motion to compel arbitration in a forum other than the Judicial Arbitration and Mediation Services (JAMS), finding that the JAMS' filing of two amicus briefs did not create reasonable doubt as to its partiality.
The US Supreme Court has unanimously held that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards does not prohibit US courts from applying the domestic law doctrine of equitable estoppel when determining whether an international arbitration clause can be enforced by a non-signatory to compel arbitration. In doing so, the court effectively extended the holding in Arthur Andersen LLP to international arbitrations under Chapter 2 of the Federal Arbitration Act.
Existing dispute resolution proceedings are inevitably experiencing the impact of the COVID-19 outbreak. Where possible, hearings have been delayed or relocated. However, with many lockdowns extended for the foreseeable future, some hearings will still need to be held. Notably, the American Arbitration Association acknowledges that these are appropriate times to permit (and indeed require) the use of viable alternatives to in-person hearings.
The New York Appellate Division has reaffirmed that the manifest disregard doctrine is a "severely limited… doctrine of last resort" that requires more than a mere error of law to warrant vacating an arbitral award. This case involved the acquisition contracts between Daesang and NutraSweet, under which NutraSweet could rescind the deal if it was sued for antitrust law violations. After NutraSweet exercised this right, Daesang commenced an arbitration proceeding for breach of contract.
Unbeknown to many, Section 1782 of Title 28 of the US Code permits parties to obtain discovery in the United States in aid of non-US legal proceedings, including – in some instances – international arbitrations. Such discovery can include documents and sworn testimony (eg, depositions). In conducting an arbitration seated outside the United States (or other non-US legal proceedings), it is useful to understand the mechanics, requirements and key issues of Section 1782 discovery.
The Rescue Plan Act 2021 was recently signed into law, providing much-needed relief that will enable airlines and aviation contractors to keep employees on payrolls. The act provides eligible air carriers and eligible contractors with $14 billion and $1 billion in financial assistance, respectively, exclusively for the continuation of employee wages, salaries and benefits.
Air carriers must comply with federal law that mandates mask wearing but also accommodate passengers with a disability that prevents them from wearing a mask. To guide carriers, the Department of Transport recently issued a notice of enforcement policy describing the factors which it will take into consideration when deciding how to enforce these potentially conflicting obligations.
The US Department of Transportation has issued a new regulation which substantially revises its rules governing the transportation of service animals on board aircraft. Under the new regulation, airlines will no longer be required to transport emotional support or comfort animals in cabin. Airlines will be required to transport only service dogs (and not other species) and a passenger with a disability may bring a maximum of two service dogs in cabin.
Under a bipartisan bill introduced in the US Senate, the Transportation Security Administration (TSA) would be required to conduct temperature checks on all passengers and other individuals seeking entry to an airport's sterile area. Airlines have been lobbying for the TSA to conduct such temperature checks for several months. During a 120-day pilot programme, the TSA would screen all individuals for a fever of 100.4 degrees Fahrenheit or higher before they would be allowed to enter an airport's sterile area.
The US Department of Transportation (DOT) recently issued a consent order assessing a $70,000 civil penalty against Volaris, the Mexican low-cost airline, for alleged violations of the DOT's regulations governing lengthy tarmac delays. The facts of the case and the DOT's rationale for assessing violations did not break new ground, but aspects of the DOT's order may provide insights into how it is approaching enforcement during the COVID-19 pandemic.
Various federal agencies recently issued a request for information (RFI) which seeks insight into the financial industry's use of AI in the provision of financial services to customers and appropriate AI governance, risk management and controls. The RFI reflects the federal agencies' increasing interest in AI, particularly regarding the risks that it poses to consumers and the safety and soundness of financial institutions.
The Federal Reserve Board recently published guidance for examiners on how to assess a supervised firm's progress in its transition away from the use of the London Interbank Offered Rate (LIBOR). This article summarises the notable features of this guidance. Firms should allocate adequate attention and resources to the effective design, implementation and execution of their LIBOR transition plans
The London Interbank Offered Rate (LIBOR) is being phased out and replaced by risk-free rates globally. The Office of the Comptroller of the Currency recently issued a self-assessment tool to help national banks, federal savings associations and federal branches and agencies of foreign banking organisations evaluate their preparedness for LIBOR's expected cessation.
In 2020 the Securities and Exchange Commission (SEC) issued new guidance and adopted amendments to its rules and forms, including Form 20-F, to modernise and simplify disclosure requirements. Registrants should consider the guidance on key performance indicators and management discussion and analysis disclosure, and the related amendments, when preparing Form 20-F. For companies with a calendar year end, Form 20-F must be filed with the SEC by 30 April 2021.
It is time for foreign private issuers to prepare their annual reports on Form 20-F. For companies with a calendar year end, Form 20-F must be filed with the Securities and Exchange Commission (SEC) by 30 April 2021. This article discusses the developments, trends and topics that may be the SEC's areas of focus during the 2021 review process.
A recent influx of proposed federal and state legislation seeks to strengthen and modernise the antitrust laws and expand antitrust enforcement. The political momentum behind these attempts reflects noisy bipartisan support for legislators to do something about the ever-growing economic power and political influence of Google, Facebook, Amazon and other so-called 'tech giants'. However, the proposed legislative 'solutions' may go well beyond the original causes of political concern.
For the first time, a private party has successfully challenged an acquisition and obtained an order requiring a divestiture of a company that had been acquired years before the case was filed. In a highly anticipated decision, a court of appeals has affirmed that order. The decision serves as a stark reminder of the antitrust litigation risk that the acquiring party to a transaction faces, potentially even years after the transaction closes.
The Hart-Scott-Rodino Antitrust Improvements Act (as amended) is the pre-merger notification statute for the United States. The Federal Trade Commission (FTC) recently announced that the minimum threshold will be adjusted to $92 million for transactions consummated on or after 4 March 2021. Moreover, the FTC has announced that it is temporarily suspending the grant of early terminations to allow the agency to review "the processes and procedures used to grant early termination".
In December 2020 the Antitrust Division of the US Department of Justice (DOJ) indicted an individual employer owner, for the first time, for agreeing with a competing owner to reduce the wages that their workers were being paid. Moreover, on 5 January 2021 the DOJ indicted a corporation for conspiring with two competing employers to allocate a medical employment market by agreeing not to solicit each other's senior employees. These rapid-fire developments are of critical importance to all companies.
One topic that directors were asked about in the PwC 2020 Annual Corporate Directors Survey was environmental, social and corporate governance (ESG). Although 55% of directors surveyed considered ESG issues to be a part of the board's enterprise risk management discussions, 49% saw a link between ESG issues and the company's strategy and 51% recognised that ESG issues were important to shareholders, directors were not convinced that they are connected to the company's bottom line.
Legislation (eg, California's board racial and ethnic and gender diversity mandates) is not the only route that diversity advocates are employing to diversify the ranks of corporate directors. Moral suasion, together with implicit or explicit voting pressure, is another avenue that some groups are pursuing. One group following this path is the Russell 3000 Board Diversity Disclosure Initiative, which sent a letter to companies on the Russell 3000, urging that they all disclose board racial, ethnic and gender data.
CEO pay attracts a lot of attention in ordinary times, but in times of severe economic distress when corporate performance and stock prices plummet and companies engage in substantial lay-offs, furloughs and pay cuts for employees, CEO pay can attract intense scrutiny. In those circumstances, paying the same or greater levels of CEO compensation can seem unfair to employees and invite shareholder and public criticism. How have boards addressed this issue?
The Financial Reporting Council recently published an updated version of its guidance for companies on corporate governance and reporting during the COVID-19 crisis to include new sections on exceptional or similar items and alternative performance measures.
While company managements have long engaged with shareholders at annual meetings and investor presentations, the notion of director engagement with shareholders is a more recent development. But why is shareholder engagement increasingly being added to corporate director job descriptions? This article posits several theories for the trend and identifies the most common engagement topics, provides data on the frequency of engagement and highlights emerging practices relating to director engagement.