Confirmation / Vacation of Arbitration Awards

ARBITRATION ROUND-UP

November 3, 2010 by Carlton Fields

Manifest Disregard:

Amway Global v. Woodward, Case No. 09-12946 (USDC E.D. Mich. Sept. 30, 2010) (rejecting multiple manifest disregard of law challenges, including that arbitrator, in applying Michigan law, failed to follow Fifth Circuit ruling that plaintiff’s standard agreement was illusory and unenforceable under Texas law)

Church Insurance Co. v. Ace Property & Casualty Insurance Co., Case No. 10-00698 (USDC S.D.N.Y. Sept. 23, 2010) (granting unopposed petition to confirm award; court’s independent review found no evidence of manifest disregard)

Exceeding Arbitrators’ Authority:

Wachovia Securities, LLC v. Brand, Case No. 08-02349(USDC D.S.C. Aug. 26, 2010) (granting motion to confirm award; panel did not exceed authority to make award under South Carolina Frivolous Civil Proceedings Sanctions Act)

Ike America, LLC v. Kredit Karte, Inc., Case No. 10-03153 (USDC E.D. Pa. Sept. 1, 2010) (granting motion to confirm award; rejecting argument that award was improper because the award creditor’s sole shareholder was an Italian national whose immigration status did not allow him to collect income from the award, and argument that arbitrator exceeded authority because part of the award held the award debtor responsible for the actions of a non-party)

Octagon, Inc. v. Richards, Case No. 10-00652 (USDC E.D. Va. Oct. 5, 2010) (holding that because an arbitration agreement severable from an unlawful agreement covered the dispute, the matter was arbitrable, and because the dispute was of the type contemplated by both parties to be submitted to arbitration, the arbitrator did not exceed her powers)

Choice of Law:

Eyewonder, Inc. v. Abraham, Case No. 08-03579 (USDC S.D.N.Y. Sept. 3, 2010) (California rules governing unconscionability of employment agreement did not apply where sufficient contacts supported “a sufficiently reasonable relationship between New York and the transaction”)

Remand for Clarification:

Ernest v. Lockheed Martin Corp., Case No. 07-02038 (USDC D. Colo. Sept. 1, 2010) (denying motion to partially vacate arbitration award and motion to confirm arbitration award to allow remand to arbitrator for a mutual, final and definite award on the limited issue of back pay damages; observing that remand for clarification is necessary when there is more than one reasonable interpretation of the arbitration panel’s award)

Personal Jurisdiction:

NGC Network Asia, LLC v. Pac Pacific Group International, Inc., Case No. 09-08684 (USDC S.D.N.Y. Sept. 20, 2010) (denying motion to transfer, stay or dismiss petition; movant agreed to arbitrate in New York and thus also consented to personal jurisdiction and venue there)

Claim Preclusion:

Belmont Partners, LLC v. Mina Mar Group, Inc., Case No. 10-00005 (USDC W.D. Va. Oct. 1, 2010) (granting motion to confirm the arbitration award and denying motions to suspend and vacate the award; judgment by Canadian court had claim preclusive effect barring this court from deciding whether to modify or vacate the award)

Timeliness of Motion to Vacate:

R&Q Reinsurance Co. v. American Motorist Insurance Co., Case No. 10-02825 (USDC N.D. Ill. Oct. 14, 2010) (denying motion to vacate as untimely since it was filed one day after the “three month” deadline in Federal Arbitration Act section 12, declining to read “three months” to mean ninety days)

Arbitrator Bias:

CRC, Inc. v. Computer Sciences Corp., Case No. 10-04981 (USDC S.D.N.Y. Oct. 14, 2010) (rejecting motion for vacatur of a partial arbitration award and disqualification of the American Arbitration Association panel that issued it based on assertion of arbitrator bias due to professional connections between the arbitrator’s law firm and the law firm representing the respondent)

This post written by Brian Perryman.

NO MANIFEST DISREGARD OF LAW FOUND IN EMPLOYMENT ARBITRATION DISPUTE

October 19, 2010 by Carlton Fields

An order denying a petition to vacate arbitration awards arising out of an oral employment contract dispute, mentioned in our January 20, 2010 post, was affirmed on appeal to the Second Circuit. The arbitrator dismissed the claim as barred by the Statute of Frauds. The appellant-employee sought to establish that the arbitrator manifestly disregarded the law by failing to give any weight to the employer’s oral representations. The Second Circuit found no such manifest disregard, and affirmed the district court’s denial of vacatur. Matthew v. Papua New Guinea, No. 10-0074-CV (2d Cir. Sept. 30, 2010).

This post written by Brian Perryman.

COURT DENIES MOTION TO RECONSIDER CONFIRMATION OF ARBITRATION AWARD

October 7, 2010 by Carlton Fields

Following a denial of its motion to vacate an adverse arbitration award, plaintiffs ABS Financial Services submitted a Motion for Reconsideration requesting that the US District Court for the District of New Jersey reverse its prior ruling and judgment. In its earlier decision, the Court had confirmed the arbitration award even though it contained errors of law because it determined that the the award was supported “by at least some of the evidence in the record and was an arguably reasonable construction of the parties’ contracts.” Noting the extremely difficult standard of review for motions for reconsideration, the Court denied the instant Motion, holding that it had not committed a clear error or manifestly disregarded the law in its prior ruling and judgment. ABS Brokerage Servs., LLC v. Penson Fin. Servs., Inc., Case No. 09-04590 (D. N.J. Aug. 16, 2010).

This post written by John Black.

NINTH CIRCUIT REVERSES CONFIRMATION OF ARBITRATION AWARD BASED ON IMPROPER FORUM

October 4, 2010 by Carlton Fields

The Ninth Circuit has reversed and remanded a district court’s confirmation of an arbitration award because the plaintiff/counterclaim defendant, a manufacturer located in Belarus, established a defense under the New York Convention. The parties agreed to an arbitration clause that requires disputes to be arbitrated where the “defendant” is located. Arbitration was commenced in California, but the plaintiff expressly reserved the right to have any counterclaims asserted against it arbitrated in Belarus. When counterclaims were filed, the arbitrator refused to dismiss them on the ground they should have been filed in Belarus. The district court confirmed the California arbitrator’s award against the plaintiff, which appealed to the Ninth Circuit.

On appeal, the court held that procedures used in the arbitration of “counterclaims” were not in accordance with the agreement. Invoking a defense under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”), the plaintiff contended the “arbitral procedure was not in accordance with the agreement of the parties” because the counterclaims should have been arbitrated in Belarus. The Ninth Circuit agreed. The arbitration agreement required that any “dispute” be arbitrated at “the defendant’s [site].” The term “dispute” encompassed both claims and counterclaims. Further, a party is a “defendant” as to any dispute whenever another party seeks damages or other form of relief against it. Polimaster Ltd. v. RAE Systems, Inc., No. 08-15708 (9th Cir. Sept. 28, 2010).

This post written by Brian Perryman.

ARBITRATION ROUND UP

September 16, 2010 by Carlton Fields

Manifest Disregard:

Paul Green School of Rock Music Franchising, LLC v. Smith, Case No. 09-2718 (3d Cir. Aug. 2, 2010) (affirming district court’s confirmation of arbitration award; holding no manifest disregard; declining to address whether the Third Circuit considers “manifest disregard” to be a valid ground for vacatur of an arbitration award under the FAA)

The Burton Corp. v. Shanghai Viquest Precision Industries, Co., Case No. 10 Civ. 3163 (USDC S.D.N.Y. August 3, 2010) (denying petition to vacate award; granting petition to confirm award; noting that in the Second Circuit, “manifest disregard” remains a valid ground for vacating arbitration awards; finding no manifest disregard; arbitrator did not exceed authority)

Kunz v. JHP Enterprises, LLC, Case No. 1:09CV115 (USDC D. Utah August 9, 2010) (granting motion to confirm FINRA award; no manifest disregard)

Ozormoor v. T-Mobile USA, Inc., Case No. 08-11717 (USDC E.D. Mich. August 19, 2010) (denying motion to vacate award; arbitrator did not exceed authority; no manifest disregard; upholding one-year limitation provision in arbitration agreement)

Westerlund v. Landmark Aviation, Case No. CV09-0686 (USDC C.D. Cal. August 9, 2010) (denying motions to vacate and motion to modify award; granting motion to confirm award; no manifest disregard; award not “completely irrational”; arbitrator did not exceed powers)

Choice of Law:

Idea Nuova, Inc. v. GM Licensing Group, Inc., Case No. 09-3652 (2d Cir. Aug. 9, 2010) (affirming district court’s (1) dismissal of complaint to vacate or modify arbitration award and (2) confirmation of award; concluding that by agreeing to submit disputes “to AAA arbitration for resolution,” the parties incorporated the AAA Commercial Arbitration Rules into their agreement)

Johnson v. Rosenfeld, Case No. 08-56911 (9th Cir. Aug. 13, 2010) (affirming district court’s confirmation of award and application of choice of law provision; holding that arbitrator did not violate California disclosure rules nor exceed his powers under California arbitration procedure)

Overlapping Remedies:

Kaliroy Produce Co. v. Pacific Tomato Growers, Inc., Case No. CIV 10-160 (USDC D. Az. Aug. 4, 2010) (denying motion to vacate award; granting petition to confirm award; holding that New York Convention’s remedies are not exclusive of remedies under the FAA; among other rulings: no manifest disregard, no violation of public policy, award did not “fail to draw its essence” from arbitration agreement; no evident partiality; Notice of Appeal to Ninth Circuit)

F. Hoffmann-La Roche Ltd. v. Qiagen Gaithersburg, Inc., Case No. 09 Civ 7326, 7396 (USDC S.D.N.Y. Aug. 11, 2010) (denying motion to vacate international arbitration award; granting motion to confirm award; finding that matter was “international” under the New York Convention but that FAA also applied; no manifest disregard; arbitrator did not exceed authority)

This post written by Michael Wolgin.