Confirmation / Vacation of Arbitration Awards

FEDERAL COURT DENIES MOTION TO VACATE ARBITRATION AWARD AND SANCTIONS PARTY SEEKING VACATUR

November 15, 2012 by Carlton Fields

Employer Southwestern Electric Cooperative entered into an agreement with the International Brotherhood of Electrical Workers, Local 702 regarding the number of union members’ sick days. The agreement included a grievance procedure and an arbitration process for grievances that could not be resolved internally. A union employee sought thirteen weeks of sick leave; Southwestern and the union deadlocked on whether the employees’ request should be granted. The dispute was submitted to arbitration and the arbitrator sided with the employee.

Southwestern moved to vacate, arguing that the arbitrator’s award did not draw its essence from the parties’ agreement and, further, that the arbitrator exceeded his authority in rendering the award. The court denied the motion to vacate, finding that the arbitrators’ decision “had a plausible foundation in the agreement.” The court further held that the challenge to the award was “substantially without merit” as the court could not “discern how [Southwestern] could logically believe that th[e] dispute was not subject to arbitration.” Accordingly, it granted the union’s motion for sanctions under Federal Rule of Civil Procedure 11, ordering Southwestern to pay the union’s fees and costs in defending the motion to vacate. Sw. Elec. Coop., Inc. v. Int’l Bhd. of Elec. Workers, Local 702, Case No. 11-1047 (USDC S.D. Ill. August 27, 2012).

This post written by Ben Seessel.

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ELEVENTH CIRCUIT AFFIRMS CONFIRMATION OF AWARD IN INTERNATIONAL ARBITRATION

November 14, 2012 by Carlton Fields

The Eleventh Circuit Court of Appeals affirmed a Florida federal court’s confirmation of an award from an international arbitration, which was challenged by Triangula Pisos E Paineis, LTDA (“Triangulo”), the party against whom the award was made. Triangulo contended that the award should be vacated under a provision of the Federal Arbitration Act allowing vacatur based on an arbitrator’s refusal to hear evidence pertinent to the controversy. Without deciding whether the FAA even applied, as Triangulo had argued, the Court held that even if it did, Triangulo failed to make the requisite showing to demonstrate that the arbitrator had in fact refused to hear pertinent evidence. It affirmed the trial court’s denial of vacatur and confirmation of the award against Triangulo. Triangulo Pisos E Paineis, LTDA v. BR-111 Imports & Exports, Inc., No. 12-10776 (11th Cir. Aug. 24, 2012).

This post written by John Pitblado.

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FEDERAL COURT CONFIRMS ARBITRATION AWARD IN DISPUTE BETWEEN REINSURER AND INSURERS BUT ORDERS ARBITRATION AWARD UNSEALED

November 1, 2012 by Carlton Fields

Reinsurer AXA and insurers New Hampshire Insurance Company, American Home Insurance Company, and National Union Fire Insurance Company arbitrated a dispute over reinsurance coverage of primary policies that had been underwritten by AIG’s Energy Division in 1996/1997 and 1997/1998. The arbitration was only commenced after years of contentious litigation over coverage-related issues. The arbitration panel issued an award, largely in favor of AXA. AXA petitioned to have the arbitration award confirmed under the FAA. The insurers stipulated to the award’s confirmation, but both sides asked the court to keep the award out of the public court record. When the award was filed with the Petition to confirm the award, the court granted the request of the parties to seal the award. In the order confirming the award, however, the court denied the request to keep the award sealed, without any discussion of the reasons for its change of position, and directed the clerk to unseal the award, which is now public. In re AXA Versicherung AG, Case No. 12-6009 (USDC S.D.N.Y. Sept. 6, 2012).

This post written by Ben Seessel.
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COURT GRANTS PETITION TO CONFIRM FOREIGN ARBITRAL AWARDS, DENIES MOTION TO SEAL

October 16, 2012 by Carlton Fields

Century Indemnity Company brought a petition to confirm three foreign arbitral awards it secured against AXA Belgium. AXA cross-petitioned to vacate the awards. Both parties filed motions to seal certain documents submitted to the court in light of a confidentiality agreement covering the arbitrations. The parties’ dispute centered on claimed underpayments by AXA, and alleged offsets AXA claimed it was entitled to, which it claimed negated amounts owed to Century under certain reinsurance treaties. Century initiated multiple arbitrations arising throughout the history of the parties’ payment disputes, which arbitrations were ultimately consolidated. The consolidated arbitration hearing took place in 2011. In February 2012, the panel rendered a decision favorable to Century, including a bad faith finding against AXA which resulted in an order of $250,000, or the amount of Century’s fees and costs, whichever was lesser. AXA challenged the award under the FAA, but the Court held that it failed to demonstrate the panel exceeded its authority under the submission, or that its decision was in manifest disregard of the law. The Court also addressed both parties’ motion to seal the record, finding neither demonstrated sufficient bases to seal, given the strong presumption in favor of public access to court files. Century Indemnity Co. v. AXA Belgium, No. 11 Civ. 7263 (USDC S.D.N.Y. Sept. 24, 2012).

This post written by John Pitblado.

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Round-Up Of Decisions Vacating or Confirming Arbitration Awards

October 4, 2012 by Carlton Fields

Following is a summary of court decisions, some confirming, others vacating, arbitral awards:

Windler v. Anheuser-Busch, Inc., Case No. 10-cv-00350 (USDC D. Colo. Aug. 22, 2012) (denying motion to vacate arbitration award, finding that arbitrator did not manifestly disregard the law on reasonable accommodations under the Americans With Disabilities Act)

Barrick Enterprises, Inc. v. Crescent Petroleum, Inc., No. 11-1778 (6th Cir. Aug. 27, 2012) (affirming district court’s confirmation of arbitration award involving dispute under a petroleum supply agreement; finding that ex parte communication between arbitrator and employee was not in excess of arbitrator’s powers and district court did not apply the wrong evidentiary standard in confirming the award)

Scurtu v. Hospitality & Catering Management Services, Case No. 1:07-cv-00410 (USDC D. Ala. Sept. 13, 2012) (denying motion to vacate or modify arbitration award where the movant failed to set forth any grounds under the FAA for vacatur or modification or show how the arbitrator’s award would have satisfied such grounds)

N.J. Regional Council of Carpenters v. Jayeff Construction Corp., No. 11-3872 (3d Cir. Sept. 12, 2012) (affirming district court’s decision vacating arbitration award where there was insufficient evidence that appellee non-union contractor had entered into collective bargaining agreement bearing arbitration clause)

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Smolcheck, Case No. 12-80355 (S.D. Fla. Sept. 17, 2012) (denying motion to vacate and granting motion to confirm arbitration award; rejecting movant’s arguments on evident partiality, arbitrator misconduct, and insufficient opportunity to be heard)

Quench LLC v. Liquor Group Wholesale, Inc., Case No. 3:11-cv-811 (M.D. Fla. Sept. 13, 2012) (denying motion to vacate and granting motion to confirm arbitration award; finding that arbitrator had jurisdiction over signatory to agreement and that respondent was not prejudiced, under the circumstances, by waiting until after the final hearing before deciding whether certain respondents were subject to the arbitrator’s jurisdiction)

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Schwarzwaleder, No. 11-2605 (3d Cir. Aug. 13, 2012) (reversing district court’s decision vacating arbitration award requiring former employee to repay a loan from her former employer; arbitrator’s decision was not “irrational” as to warrant vacatur)

Comerica Bank v. Howsam, No. B232749 (Cal. Ct. App. Aug. 20, 2012) (affirming orders denying vacatur and confirming arbitration award; finding that arbitrator’s failure to timely disclose potentially disqualifying circumstances, as required under California statute, was not a ground for vacatur of international commercial arbitration award, and, further, that the award was not procured by fraud or corruption, did not result from a manifest disregard of the law, and that the arbitrator did not exceed his powers in deciding alter ego issues)

This post written by Ben Seessel.

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