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You are here: Home / Archives for Arbitration / Court Decisions / Confirmation / Vacation of Arbitration Awards

Confirmation / Vacation of Arbitration Awards

CASE UPDATE: UK COURT REJECTS LATEST CHALLENGE TO ENFORCEMENT OF $88 MILLION GAZPROM ARBITRATION AWARD

March 26, 2008 by Carlton Fields

On June 14, 2007 and November 27, 2007, we reported on a $88 million arbitration award rendered in Russia involving energy giant Gazprom, and efforts to enforce the award in the United States and the United Kingdon pursuant to the New York Convention, the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the UK’s Arbitration Act of 1996. In a last attempt to avoid the arbitration award, it was contended to the UK Commercial Court that the award should not be enforced because it was contrary to public policy due to fraud in the underlying arbitration proceeding and the underlying reinsurance transactions, which appeared not to transfer any risk. The Commercial Court has rejected the presentation, concluding that the award had been confirmed through the Russian courts and that the alleged irregularities were insufficient to warrant a refusal to enforce the award. Gater Assets Limited v. Nak Naftogaz Ukrainiy [2008] EWHC 237 (Comm. Feb. 15, 2008).

This post written by Rollie Goss.

Filed Under: Arbitration Process Issues, Confirmation / Vacation of Arbitration Awards, UK Court Opinions

ARBITRATION AWARDS UPHELD OVER CHALLENGES TO ARBITRATOR

March 12, 2008 by Carlton Fields

Two recent decisions addressed requests to vacate arbitration awards due to concerns over arbitrator qualifications and bias. In Woods v. P.A.M. Transport, Inc., Case No. 07-605 (USDC N.D. Tex. Feb. 8, 2008), a motion was filed to vacate an arbitration award on the basis that the arbitrator failed to disclose that he had been removed from the American Arbitration Association's list of approved arbitrators. The court held that insufficient evidence was presented that the arbitrator was not sanctioned by the AAA, or that such facts, if true, justified vacation of the award under the FAA. The court also held that the moving party had not demonstrated that the award was in manifest disregard of law. In In re Aviles v. Allstate Ins. Co., Case No. 2007-6808 (N.Y. Sup. Ct. App. Div.), the court reversed an Order vacating an arbitration award on the basis that the arbitrator was biased. There was no transcript of the arbitration hearing available, and a clearly insufficient record to support a determination that the arbitrator was biased.

This post written by Rollie Goss.

Filed Under: Confirmation / Vacation of Arbitration Awards

CONTROVERSY OVER ARBITRATION AWARD CENTERS OVER WHETHER PARTIAL AWARD WAS FINAL

March 4, 2008 by Carlton Fields

A single arbitrator heard evidence on claims for monies allegedly due under a facultative reinsurance contract. The arbitrator entered a partial final award, finding liability for indemnity payments, no liability for certain defense costs and requiring supplemental submissions on the amount of the indemnity and cost obligations. The parties moved for confirmation or vacation of this award, and the court declined to act, stating that the award was not yet final. The court remanded the matter to the arbitrator for further proceedings. On remand, the arbitrator held to his indemnity determination but decided that further submissions justified an award of defense costs. A final award was entered for $3 million, plus interest. The prevailing party sought to confirm the award, and the losing party contended that the partial award was final as to the defense cost issue, and the arbitrator did not have authority to change that ruling under the doctrine of functus officio. The court held that the partial award was not final, and hence the doctrine did not apply, and confirmed the final award, entering final judgment on the award. Employers' Surplus Lines Ins. Co. v. Global Reinsur. Corp., Case No. 07-2521 (USDFC S.D.N.Y. Feb. 2008).

This post written by Rollie Goss.

Filed Under: Confirmation / Vacation of Arbitration Awards, Week's Best Posts

COURT FINDS ARBITRATION CLAIMS BARRED BY PRIOR CLASS SETTLEMENT

February 26, 2008 by Carlton Fields

Plaintiffs allegedly suffered losses relating to stock options in WorldCom stock. They filed an NASD arbitration asserting claims, and were members of a class certified with respect to WorldCom stock losses. The class action settled and the proposed settlement received final approval one month before the arbitration hearing. The Claimants in the arbitration were members of the settlement class and had not excluded themselves from the class. The settlement's final approval Order included a fairly typical release of claims and an injunction against class members maintaining or participating in legal proceedings seeking to pursue claims that were released by the settlement. The arbitration proceeded, and Claimants recovered an award, at least part of which was for losses released by the class settlement. Both the District Court and the Court of Appeals found that the award should be vacated to the extent that it awarded damages for claims that had been released by the class settlement. Rich v. Spartis, No. 06-1723 (USCA 2d Cir. Feb. 8, 2008).

This post written by Rollie Goss.

Filed Under: Confirmation / Vacation of Arbitration Awards, Week's Best Posts

CASE UPDATE: FOURTH CIRCUIT FINDS LOWER COURT’S INTERPRETATION OF ARBITRATION AWARD INSUFFICIENT

February 5, 2008 by Carlton Fields

On June 20, 2006 we reported on a decision of a US District Court decision declaring the relationship between two arbitration awards. The Fourth Circuit has reversed that decision. The district court was asked to determine whether an arbitration panel’s second award was intended to supplement or incorporate the first award. After receiving yes/no responses from two of the three arbitrators, the district court concluded that the first award had been factored into and setoff by the second.

The Fourth Circuit reversed and remanded, concluding that while the district court correctly concluded that the second arbitration award was ambiguous and correctly sought clarification from the arbitrators, the procedure employed by the district court to clarify the ambiguity was unsuccessful. The court was “unable to discern, without further discovery into the arbitrators’ intent, how the one-word response from two of the arbitrators resolved the ambiguity.” The Burlington Insurance Company v. Trygg-Hansa Ins. Co., No. 06-2082 (USCA 4th Cir., Jan. 17, 2008).

This post written by Lynn Hawkins.

Filed Under: Arbitration Process Issues, Confirmation / Vacation of Arbitration Awards, Week's Best Posts

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