B. Choice/Conflict-Of-Law Issues

• Jurisdiction: New York

B. Choice/Conflict-of-Law Issues

Following the U.S. Supreme Court's decision in Volt Information Sciences, Inc. v. Board of Trustees,¹⁶ when an agreement states, in effect, that the rights and liabilities of the parties shall be determined in accordance with New York law, it will no longer necessarily be read by the courts to preclude resort to the Federal Arbitration Act (FAA),¹⁷ when the underlying dispute is in the international or interstate commerce or maritime realm. This is so because of the proviso imposed by Volt that the chosen law cannot conflict with the terms of the FAA or the policies underlying it.¹⁸ This has implications for, among other things, awards for punitive damages, as discussed below, and class action waivers in arbitration agreements,¹⁹ as well as for the result if arbitration procedures fail. For example, the Second Circuit Court of Appeals has held that, under the...