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Confirmation / Vacation of Arbitration Awards

CONFIDENTIAL ARBITRATION AWARD AGAINST AXA RE CONFIRMED WITHOUT OPPOSITION

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A court recently confirmed an arbitration award against AXA Re in a reinsurance dispute involving reinsurance contracts entered into by predecessor companies in the 1970s. Details on the underlying arbitration are not available, as the petitioners’ filing was sealed by court order in accordance with a confidentiality agreement entered into by the parties in the arbitration. AXA Re did not oppose the petition nor appear in the court action, which was filed pursuant to the New York Convention. ACE Property & Casualty Insurance Co. v. AXA Re, Case No. 1:11-cv-07050 (USDC S.D.N.Y. Jan. 9, 2012).

This post written by Michael Wolgin.

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COURT CONFIRMS REINSURANCE ARBITRATION ORDERS OVER TIMELINESS AND FINALITY CONCERNS; REFUSES TO STRIKE CONFIDENTIAL FACTS IN PETITION

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A court has granted two unopposed petitions to confirm two arbitration orders under the New York Convention, in what was a dispute over documentation requirements of a forty-year old asbestos claims reinsurance agreement between Century Indemnity Company and certain London market reinsurers (LMRs). The first arbitration order required one of the LMRs to post letters of credit to secure Century’s then-outstanding claims. While the panel initially entered the order in 2006, the letters of credit were subsequently addressed in another order by the panel in 2008. The second order, entered in 2007 and made final in 2009, related to the panel’s findings on the merits of the reinsurance agreement’s documentation requirements. The court found that both orders were “necessarily incorporated” in the respective 2008 and 2009 orders, and were thus timely under the New York Convention’s three-year statute of limitations. In confirming the first order, the court explained that although it technically was not a final award (which is a requirement for jurisdiction under the Federal Arbitration Act), it was “sufficiently separate and final for federal court review and confirmation.”

Also noteworthy was the court’s denial of Century’s motion to strike, which argued that portions of the LMR’s petition contained gratuitous assertions that violated the parties’ confidentiality agreement and were intended to be a “press release for use in other matters.” The court found that the language at issue was related to the underlying controversy, that the panel’s orders were made public in the court record, and that “the mere fact that the parties ha[d] designated certain documents as confidential among themselves is insufficient to rebut the ‘strong presumption of public access to court records’ that exists in federal courts.” Century Indemnity Co. v. Certain Underwriters at Lloyd’s London, Case No. 1:11-cv-01040 (USDC S.D.N.Y. Jan. 10, 2012).

This post written by Michael Wolgin.

See our disclaimer.

ARBITRATION ROUNDUP

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Manifest Disregard:

L’Objet, LLC v. Samy D. Ltd., Case No. 11-3856 (USDC S.D.N.Y. Sept. 29, 2011) (confirming award, finding arbitrator did not exceed powers, commit misconduct, or exhibit manifest disregard of the law, in disallowing certain discovery, and interpreting applicable precedent)

Schwartz v. Merrill Lynch & Co., Inc., No. 10-0826 (2d Cir. Nov. 30, 2011) (affirming denial of motion to vacate arbitrator’s award, rejecting claim that retroactivity of Lilly Ledbetter Fair Pay Act did not suffice to establish manifest disregard of arbitrator decision made before passage of Act)

Diaz v. Colombina, S.A., Case No. 10-1426 (USDC D.P.R. Dec. 6, 2011) (confirming award, finding no basis for vacatur under enumerated categories in FAA)

Scope of Submission:

Wells Fargo Bank, N.A. v. WMR e-PIN, LLC, No. 09-3800 (8th Cir. Sept. 1, 2011) (Affirming confirmation of award, panel did not exceed scope of submission by ordering injunctive relief)

Wilkes Barre Hospital Co., LLC v. Wyoming Valley Nurses Assoc. PASNAP, Nos. 11-1134 and 11-1225 (3d Cir. Dec. 1, 2011) (affirming confirmation of award, finding arbitrator’s award did not exceed scope of submission based on nature of “mixed remedy” not specifically contemplated in parties’ Collective Bargaining Agreement)

Evident Partiality:

Anderson v. Cricket Comm’s, Inc., Case No. 11-2004 (USDC, W.D. Tenn. Sept. 23, 2011) (confirming award, finding no corruption, fraud or partiality by single arbitrator challenged by pro so litigant for declining to allow certain discovery)

Free Country Design & Construction, Inc. v. Proformance Group, Inc., Case No. 09-06129 (USDC W.D. Mo. Dec. 5, 2011) (confirming award, finding no evident partiality for “conflict of interest” based on arbitrator’s prior relationship with prevailing parties’ predecessor-in-interest, awarding attorney’s fees for post-arbitration litigation)

Validity of Arbitration Agreement:

Tricon Energy, Ltd. v. Vinmar International, Ltd., Case No. 10-05260 (USDC S.D. Tex. Sept. 21, 2011) (confirming award, finding valid agreement to arbitrate based on email exchanges which ratified certain disputed provisions of the parties’ agreement, including the arbitration provision)

Unity Construction Services, Inc. v. New Jersey Building Laborer’s Local Unions and District Councils, Case No. 11-6209 (USDC D.N.J. Dec. 12, 2011) (vacating award based on finding that no valid agreement existed as putative agent of contracting party had no authority to enter into agreement containing arbitration provision)

Duvall Contracting LLC v. New Jersey Building Laborer’s District Council, Case No. 11-02705 (USDC D.N.J. Dec. 16, 2011) (confirming award, finding valid agreement to arbitrate under Collective Bargaining Agreement applied to non-signatory company set up by principal of signatory company for purpose of avoiding use of union labor, contrary to CBA’s “double-breasting” provision)

This post written by John Pitblado.

See our disclaimer.

NINTH CIRCUIT CONFIRMS ARBITRATION AWARD IN FAVOR OF IRAN’S MINISTRY OF DEFENSE

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The US Court of Appeals for the Ninth Circuit recently issued an opinion determining that an arbitration award of the International Court of Arbitration of the International Chamber of Commerce (“ICC”) in favor of the Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran was not “contrary to the public policy” of the United States under the New York Convention. The Court of Appeals agreed with the position of the United States as amicus curiae that confirmation of the award did not violate any public policy of the United States. The Ninth Circuit noted that there was a strong presumption in favor of foreign arbitration awards and that US relations with Iran were heavily regulated. The Court of Appeals noted that there was an inherent difference between an arbitration award and a “payment” which would be prohibited under existing sanctions law related to Iran. Furthermore, the Ninth Circuit declined to refuse to confirm the award as it could be authorized by the US government’s issuance of a specific license. The Court of Appeals concluded that Cubic’s argument that the ICC award was not yet binding on the parties was without merit. The Ninth Circuit also held that the district court’s judgment is a “money judgment” subject to post-judgment interest, and that a district court had discretion to award pre-judgment interest and attorney’s fees in an action to confirm an award under the New York Convention. The Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Defense Sys., Inc., No. 98-01165 (9th Cir. Dec. 15, 2011).

This post written by John Black.

See our disclaimer.

ARBITRATION ROUND-UP

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Manifest Disregard:

Zimmerman Ag and Cattle Co. v. Agro National, LLC, No. CV-11-29 (USDC D. Mont. Nov. 7, 2011) (denying motion to vacate, finding “mere error of law” insufficient to satisfy manifest disregard standard).

Rite Aid New Jersey, Inc. v. United Food Commercial Workers Union, Local 1360, No. 10-3558 (3d Cir. Oct. 26, 2011) (affirming denial of motion to vacate award, no manifest disregard).

New York City Dist. Council of Carpenters Pension Fund v. Star Intercom & Construction, Inc., No. 11 Civ. 03015 (USDC S.D.N.Y. Oct. 27, 2011) (granting motion to confirm arbitrator decision of default judgment against respondent, where arbitrator did not “dispense his own brand of justice,” no basis for vacatur).

Activant Solutions, Inc. v. Notoco Industries, LLC, No. C-11-02436 (USDC N.D. Cal. Oct. 26, 2011) (granting petition to confirm, no manifest disregard for arbitrator’s refusal to modify award).

Conflict of Laws:

Southern Pioneer Life Insurance Co. v. Thomas, No. 11-426 (Ark. Nov. 17, 2011) (affirming denial of motion to compel arbitration, holding FAA preempted by McCarran-Ferguson Act vis-à-vis Arkansas statute precluding arbitration of claims under insurance contracts).

Evident Partiality:

In re Wal-Mart Wage and Hour Employment Practices Litigation, No. 2:06-CV-00225-PMP-PAL (USDC D. Nev. Oct. 11, 2011) (granting motion to confirm, finding no “evident partiality” where arbitrator raised ethical issues pertaining to respondent’s counsel).

Patrizzi & Co. Auctioneers SA v. SDG Corp., No. 11-C-3589 (USDC N.D. Ill. Oct. 25, 2011) (granting motion to confirm, no “evident partiality” in allowing one party to submit evidence not on pretrial list and not the other party).

Exceeding Arbitrator’s Authority:

Verve Communications Pvt Ltd. v. Software Int’l, Inc., No. 11-1280 (USDC D.N.J. Nov. 9, 2011) (denying motion to vacate, arbitrator did not exceed authority by closing discovery period over objection and making award).

Choice Hotels Int’l v. Savannah Shakti Corp., No. DKC-11-0438 (USDC D. Md. Oct. 25, 2011) (granting motion for default, arbitrator’s default award on contract claims did not exceed scope of submission).

Class Arbitration:

Southern Communications Services, Inc. v. Thomas, 1:10-CV-2975-AT (USDC N.D. Ga. Nov. 3, 2011) (denying motion to vacate award holding class arbitration allowable, and granting class certification).

Scope of Arbitration:

Shah v. Santander Consumer USA, Inc. d/b/a Drive Financial Services, LP, No. 3:11-CV-00096 (USDC D. Conn. Nov. 16, 2011) (motion to compel arbitration granted, finding statutory claims “collateral matters” that implicate rights created under the contract).

Stay Pending Appeal / Appellate Jurisdiction:

Weingarten Realty Investors v. Miller, No. 11-20676 (5th Cir. Nov. 1, 2011) (affirming district court ruling denying stay of proceedings during pendency of appeal of decision denying motion to compel arbitration).

TransAmerica Life Insurance Co. v. Rapid Settlements, Ltd., No. 01-11-00240-CV (Tex. Ct. App. Nov. 10, 2011) (dismissing appeal for lack of jurisdiction, trial court order regarding offset to previously entered judgment non-appealable).

This post written by John Pitblado.