Confirmation / Vacation of Arbitration Awards

ARBITRATION ROUND-UP

May 2, 2012 by Carlton Fields

Manifest Disregard

Biller v. Toyota Motor Corp., No. 11-55587 (9th Cir. Feb. 3, 2012) (affirming confirmation of award, no manifest disregard of the law)

Giller v. Oracle USA, Inc., Case No. 11-02456 (USDC S.D.N.Y. Feb. 14, 2012) (denying vacatur, no manifest disregard, no evident partiality)

Latour v. Citigroup Global Markets, Inc., Case No. 11-1167 (USDC S.D. Cal. March 16, 2012) (vacatur denied, no manifest disregard)

Collins v. Chicago Investment Group, LLC, Case No. 11-01105 (USDC D. Nev. March 20, 2012) (vacatur denied, arbitrator did not exceed scope by transferring matter from Nevada to Illinois, no manifest disregard)

Exceeded Scope

Muskegon Central Dispatch 911 v. Tiburon, Inc., No. 09-2214 (6th Cir. Feb. 2, 2012) (affirming vacatur where arbitrators exceeded scope of submission)

Tucker v. Sterling Jewelers, Inc., Case No. 09-14102 (USDC E.D. Mich. Feb. 10, 2012) (denying vacatur, arbitrator did not exceed scope of submission, no manifest disregard of the law)

Dubois Logistics, LLC v. United Food and Commercial Workers Union, Local 23, Case No. 11-34 (USDC W.D. Pa. March 5, 2012) (vacatur denied, arbitrator did not exceed scope, denying attorneys fees to prevailing party)

Garlyn, Inc. v. Auto-Owners Ins. Co., No. A11-1520 (Minn Ct. App. March 26, 2012) (affirming in part, reversing in part, affirming lower court’s vacatur where arbitrators did not exceed scope of submission in finding for petitioner on merits, but reversing lower court’s denial of vacatur of statutory pre-award interest, as that portion of award exceeded the scope of the submission)

Buy Rite Auto Glass, Inc. v. Progressive Casualty Ins. Co., No. A11-1492 (Minn. Ct. App. April 9, 2012) (affirming in part, reversing in part, affirming lower court’s denial of vacatur where arbitrators did not exceed scope of submission in finding for petitioner on merits, but reversing lower court’s denial of vacatur of statutory pre-award interest, as that portion of award exceeded the scope of the submission)

New York Convention on Enforcement of Foreign Arbitral Awards

SEI Societa Esplosivi Industriali SpA v. L-3 Fuzing and Ordnance Systems, Inc., Case No. 11-149 (USDC D. Del. Feb. 17, 2012) (confirming Swiss award under New York Convention on the Recognition and Enforcement of Foreign Arbitral awards, precluding review for manifest disregard, and finding award did not exceed scope and did not violate United States public policy)

Greatship (India) Limited v. Marine Logistics Solutions (Marsol) LLC, Case No. 11-420 (USDC S.D.N.Y. Jan. 24, 2012) (dismissing action to confirm foreign award for lack of personal jurisdiction over respondent)

Subway International, B.V. v. Bletas, Case No. 10-01715 (USDC D. Conn. April 3, 2012) (motion to confirm granted, personal jurisdiction satisfied under New York Convention, FAA applied where arbitration foreign parties took place in United States between)

Res Judicata

Druz v. Morgan Stanley, Inc., Case No. 10-6281 (USDC D.N.J. March 8, 2012) (denying vacatur of award previously confirmed by court, under principle of res judicata)

Evident Partiality

Urban Associates, Inc. v. Standex Electronics, Inc., Case No. 04-40059 (USDC E.D. Mich. Feb. 17, 2012) (denying vacatur, no evident partiality, no failure or refusal to hear material evidence, arbitrators did no exceed powers) (magistrate judge’s report and recommendation and district court’s order)

This post written by John Pitblado.

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COURT OF APPEALS RE-AFFIRMS ORDER DENYING MOTION TO VACATE ARBITRATION AWARD, DISTINGUISHES STOLT-NIELSEN

April 30, 2012 by Carlton Fields

Dr. Ivan Sutter filed a putative class action complaint against Oxford Health Plans in state court, alleging that Oxford had improperly denied, underpaid, and delayed reimbursement of claims. The court granted Oxford’s motion to compel arbitration and ordered all procedural issues to be resolved by the arbitrator, including those pertaining to class certification. Prior to the Supreme Court’s decision in Stolt-Nielsen, the arbitrator ruled that the arbitration clause in Oxford’s primary care physician agreement authorized class arbitrations. The clause at issue provided that: “No civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration.” The district court denied Oxford’s motion to vacate and the Third Circuit affirmed.

Oxford sought reconsideration from the arbitrator after the Supreme Court held in Stolt-Nielsen that “a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.” The arbitrator reaffirmed his decision, holding that the arbitration provision indicated that the parties had agreed to resolve disputes through class arbitrations because the clause’s first phrase was broad enough to encompass class actions, and the second phrase made clear that all disputes, including class actions, were to be arbitrated. The Third Circuit held that the arbitrator’s interpretation of the arbitration provision was not totally irrational, even after Stolt-Nielsen, and thus affirmed the district court’s denial of Oxford’s second motion to vacate. The Third Circuit held that Stolt-Nielsen was distinguishable because the parties in that case had stipulated that the arbitration provision was “silent” as to class arbitrations, i.e., that there was no agreement on whether disputes could be resolved by class arbitration. The court further stated that Stolt-Nielsen “did not establish a bright line rule that class arbitration is allowed only under an arbitration agreement that incants ‘class arbitration.’” Sutter v. Oxford Health Plans, LLC, No. 11-1773 (3d. Cir. Apr. 3, 2012).

This post written by Ben Seessel.

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COURT REJECTS REPETITIVE CHALLENGE TO CLASS ARBITRATION UNDER STOLT-NIELSEN

April 17, 2012 by Carlton Fields

After losing on essentially the same issue in an appeal to the Fourth Circuit Court of Appeals, the defendants in an ongoing class arbitration Amerix Corporation and Genus Credit Management initiated an action on the eve of termination of the class arbitration attacking the propriety of class arbitration, alleging that the arbitrator was exceeding the scope of his authority as defined in Stolt-Nielsen and Concepcion. They also filed a motion under Fed. R. Civ. P. 60(b) seeking review of the court’s decision declining to vacate the arbitrator’s initial Clause Construction Award. The class claimants moved to dismiss this new action, filed an opposition to the Rule 60(b) motion, and moved for attorneys fees.

The District Court concluded that res judicata could apply to bar reconsideration of the clause construction, which the court declined to vacate. Further, the court explained that Stolt-Nielsen did not present a sufficient change to revisit prior issues, and thus, the law of the case doctrine precluded relitigating the construction of the arbitration clause. Finally, the court held that Stolt-Nielsen itself provided another ground for dismissing the new action. Specifically, the court ruled that the arbitrator’s decision was based on applicable law and contract principles, so his determination to allow class arbitration did not run afoul of Stolt-Nielsen. Unlike Stolt-Nielsen, the agreement was not silent as to the parties intent, which the arbitrator was able to determine in the instant case. Thus, the new action was dismissed. Additionally, the court denied further review under Rule 60(b) and denied the motion for attorneys fees. Amerix Corp. v. Jones, Case No. 11-02844 (USDC D. Md. Jan. 17, 2012).

This post written by John Black.

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COURT OF APPEALS VACATES $185 MILLION ARBITRATION AWARD WHERE CLAIMANT FAILED TO ABIDE BY TREATY’S PREREQUISITE OF BRINGING A LAWSUIT IN THE ARGENTINEAN COURTS

April 16, 2012 by Carlton Fields

The United States Court of Appeals for the D.C. Circuit has vacated an arbitration award in excess of $185 million issued against the Republic of Argentina and in favor of a British company, BG Group, PLC, that had invested in gas distribution in Argentina. It reversed a district court order that, as we reported earlier, had confirmed the award. The court cited BG Group’s failure to abide by a provision in the governing Bilateral Investment Treaty between Argentina and the U.K. requiring disputes to be submitted to an Argentinean court and litigated for eighteen months without resolution before an arbitration could be commenced. The appellate court further rejected the arbitration panel’s decision that it would be “senseless” to comply with this provision, which the panel based on an opinion, rendered by a former Argentinean Attorney General and Minister of Justice, that it could take six years to resolve BG Group’s claims in the Argentinean courts. The court of appeals further held that the district court erred in determining that the arbitrators properly decided the threshold question of arbitrability because there was no clear and unmistakable evidence that the arbitrators should decide the issue where the precondition of bringing the dispute to court had not been met. Republic of Argentina v. BG Group, PLC, No. 11-7021 (D.C. Cir. Jan. 17, 2012).

This post written by Ben Seessel.

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SECOND CIRCUIT ORDERS DISMISSAL OF SUIT TO CONFIRM A PERUVIAN ARBITRATION AWARD IN NEW YORK ON FORUM NON CONVENIENS GROUNDS

April 4, 2012 by Carlton Fields

The Peruvian arbitration awarded over $21 million in connection with a consulting agreement for engineering studies on water and sewage services in Peru. A Peruvian statute, however, significantly limited the amount the consultant could recover from the Peruvian government. Consequently, the consultant filed a petition to confirm the award in U.S. district court in New York, where the consultant hoped to collect the full amount of the award from Peruvian assets located there. The lower court denied dismissal of the petition, in part, due to the policy supporting international arbitration under the Panama Convention. Over a vigorous dissenting opinion, the Second Circuit panel majority reversed, holding that “the cap statute is a highly significant public factor warranting [forum non conveniens] dismissal.” The court acknowledged: “Although enforcement of [international] awards is normally a favored policy of the United States and is specifically contemplated by the Panama Convention, that general policy must give way to the significant public factor of Peru’s cap statute.” Figueiredo Ferraz v. Republic of Peru, No. 09-3925 (2d Cir. Dec. 14, 2011).

This post written by Michael Wolgin.

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