Confirmation / Vacation of Arbitration Awards

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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ARBITRATION ROUNDUP

September 12, 2012 by Carlton Fields

Accrual of Actions to Dispute Award:

International Relief and Development, Inc. v. Ladu, Case No. 12-1302 (4th Cir. June 14, 2012) (affirming order confirming award; motion to vacate filed beyond FAA’s three-month filing deadline; upholding finding that appellant had actual notice of award where no evidence suggested “definitively or firmly” that findings were mistaken);

International Brotherhood of Electrocal Workers, Local 50, AFL-CIO v. Metro Electric Engineering Technologies, Inc., Case No. 11-14333 (USDC E.D. Mich. July 25, 2012) (granting summary judgment confirming award due to expiration of statutes of limitations regarding award issued in connection with a collective bargaining agreement under the Labor Management Relations Act; letters from panel advising of defendant’s liability accrued defendant’s rights to dispute confirmation of award).

Jurisdiction:

Paralikas v. Ford Motor Credit Co., LLC, Case No. 10-3308 (USDC E.D.N.Y. June 14, 2012) (dismissing action to vacate award; FAA does not provide an independent basis for federal subject matter jurisdiction).

Class-Wide Arbitration:

Rame, LLC v. Popovich, Case No. 12-1684 (USDC S.D.N.Y. June 9, 2012) (denying petition to vacate award permitting class-wide arbitration; “manifest disregard” still viable in Second Circuit, but not present in this case; arbitrator did not exceed authority where dispute resolution agreement provided that “all claims” could be decided by arbitration).

Scope of Arbitration:

Schneider v. Thailand, Case No. 11-1458 (2d Cir. Aug. 8, 2012) (affirming order confirming award under New York Convention, notwithstanding lower court’s failure to determine “clear and unmistakable” evidence that scope of arbitration agreement would be decided by arbitrators before performing deferential review of award; because UNCITRAL Rules were incorporated in arbitration agreement, appellate court could infer intent for arbitrators to decide scope of agreement; noting “manifest disregard” inapplicable to foreign awards);

Langlais v. Pennmont Benefit Services, Inc., Case No. 11-5275 (USDC E.D. Pa. July 11, 2012) (granting motion to confirm $3.8 million award as to signatories of arbitration agreement, but only in their capacities reflected in agreement; denying motion as to non-signatories because motion to confirm “is not the proper time or procedural vehicle to make such determinations”).

Manifest Disregard/Evident Partiality:

Fund Raising, Inc. v. Alaskans For Clean Water, Inc., Case No. 09-4106 (USDC June 26, 2012) (denying fundraiser’s motion to vacate $8 million award in favor of former client environmental advocates; “manifest disregard” standard applied where arbitrator’s application of law challenged; no manifest disregard nor “complete irrationality” in, among other findings, arbitrator’s interpretation of confidentiality clause, finding of fiduciary duty, finding judicial estoppel, and awarding punitive damages for actions related to perjury);

Digitelcom, LTD v. Tele2 Sverige AB, Case No. 12-3082 (USDC S.D.N.Y. July 25, 2012) (granting motion to confirm award issued by International Centre for Dispute Resolution and granting attorney’s fees award for disingenuous motion; among other things, arbitrator did not commit “manifest disregard” nor exhibit “evident partiality”);

Trademark Remodeling, Inc. v. Rhines, Case No. 11-1733 (USDC D. Md. Aug. 6, 2012) (granting motion to enforce award; finding no evident partiality or corruption, fraud, or undue means despite defendants’ disclosure of confidential information, providing gift card to adverse witness, and manner in which hearing was conducted; no exceeding powers or “manifest disregard” for arbitrator’s use of evidence and findings beyond contract);

P.H. Glatfelter Co. v. United Steel, Paper and Forestry, Rubber Manufacturing, Energy, Allied Industrial and Service Workers International Union, Case No. 11-741 (USDC S.D. Ohio Aug. 21, 2012) (granting summary judgment vacating award issued in connection with a collective bargaining agreement under the Labor Management Relations Act; evident partiality existed where arbitrator failed to disclose that he had 6 first cousins employed at paper mill at issue in arbitration).

This post written by Michael Wolgin.

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AWARD UPHELD AGAINST FOOTBALL PLAYER’S WORKERS’ COMPENSATION CLAIM FOR FAILURE TO SUPPORT APPLICATION OF STATE LAW

August 16, 2012 by Carlton Fields

A former professional football player, whose National Football League employment contract waived application of California workers’ compensation law, sought to vacate an arbitration award that denied the player’s pursuit of California workers’ compensation benefits for injuries that allegedly occurred over the course of the player’s football career. The court rejected the player’s arguments that the award constituted a violation of California and federal labor policy, and that the award reflected a manifest disregard of California law. The player’s injuries, the court explained, could not be sufficiently tied to events occurring in California. Without a “clear” indication that a California court would apply that state’s law, the award could not be deemed to violate California and federal labor policy, which in turn precluded the player’s contention that the award violated the Constitution’s Full Faith and Credit Clause. Matthews v. National Football League Management Council, Case No. 11-5186 (9th Cir. Aug. 6, 2012).

This post written by Michael Wolgin.

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COURT CONFIRMS ARBITRATION AWARD DESPITE MANIFEST DISREGARD CLAIMS AND ARGUMENT THAT PANEL EXCEEDED ITS AUTHORITY

August 13, 2012 by Carlton Fields

This petition for vacatur followed the last of three arbitrations between American Centennial Insurance Company, a company with its principal place of business in Delaware, and Global International Reinsurance Company, a Barbados company, pursuant to a reinsurance agreement between the parties. While in runoff, ACIC changed its ownership structure through a series of reorganizations and acquisitions. In response, Global sought a reduction of its reinsurance obligations as provided for by their agreement. In the third arbitration, an award was issued in favor of Global. The losing party filed a petition to vacate the award, but the United States District Court for the Southern District of New York confirmed the arbitration panel’s order. Despite the losing party’s argument that the arbitrators had exceeded their authority and displayed manifest disregard for the law and the parties’ agreement (which had an honorable engagement clause and also required the panel to provide reasons for its order), the court held that the panel had acted within its “wide discretion.” Furthermore, the court found that, in discussing the terms of the agreement, the parties’ dispute, the findings of the earlier arbitration panels, and the rationale for awarding less than was sought, the panel went further than necessary in explaining its award since the agreement did not request detailed factual findings and conclusions of law. Thus, the petition to vacate the award was denied and the award was confirmed. American Centennial Insurance Co. v. Global International Reinsurance Co., Case No. 12 Civ. 1400 (USDC S.D.N.Y. July 9, 2012).

This post written by Brian Perryman.

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