Confirmation / Vacation of Arbitration Awards

A SHORT SUMMARY OF RECENT ARBITRATION DECISIONS

January 20, 2010 by Carlton Fields

This post briefly summarizes circuit and district courts’ recent decisions concerning arbitration awards, none of which vacate an award.

Awards Upheld:
National Postal Mail Handlers Union v. American Postal Workers Union, No. 08-5487 (D.C. Cir. Dec. 18, 2009) (agreeing with the district court that the arbitrator probably erred, but noting the deferential standard of review given to labor arbitration decisions, affirmed the decision of the district court, which upheld the award).

Mishra v. Doctors Hosp. of Augusta, LLC, No. 09-12548 (11th Cir. Dec. 3, 2009) (concluding that the district court did not err in compelling arbitration or in affirming the arbitration award).

Peng v. Gabay, Case No. 05-3939 (USDC D. N.J. Dec. 29, 2009) (denying plaintiffs’ motion for reconsideration as the plaintiffs’ arguments did not address any new evidence or controlling decisions and confirming the FINRA panel’s award, which, among other things, dismissed the plaintiffs’ claims for failure to comply with the panel’s discovery orders).

Cardell Fin. Corp. v. Suchodolski Assocs., Inc., Case No. 09-6148 (USDC S.D.N.Y. Dec. 16, 2009) (granting petition to confirm the award and denying cross-petition to vacate the award, finding that the panel neither exceeded authority nor exhibited a manifest disregard of the law and that the respondents were not denied a meaningful opportunity to present their case).

Matthew v. Papua New Guinea, Case No. 09-3851 (USDC S.D.N.Y. Dec. 9, 2009) (denying the petition to vacate the award; the petitioner failed to show the award was made in manifest disregard of the law or the arbitrator exceeded his authority, committed misconduct, or rendered an ambiguous or indefinite award).

Dailey v. Legg Mason Wood Walker, Inc., Case No. 08-1577 (USDC W.D. Pa. Dec. 8, 2009) (granting a motion for summary judgment to confirm a FINRA panel’s award; the plaintiff failed to establish that the award was completely irrational or that the arbitrator demonstrated evident partiality or acted in manifest disregard of the law).

MPJ, My Pers. Jet, A.V.V. v. Aero Sky, L.L.C., Case No. 09-693 (USDC W.D. Tex. Nov. 30, 2009) (accepting the conclusion from the Magistrate Judge’s Report and Recommendation that the plaintiffs’ motion to confirm the award should be granted; no procurement of award by evident partiality, arbitrator exceeding authority or misconduct, or corruption, fraud or undue means).

Francis v. Landstar Sys. Holdings, Inc., Case No. 09-238 (USDC M.D. Fla. Nov. 25, 2009) (denying the motion to vacate award in employment dispute; the arbitrator did not exceed her powers, and no basis existed to conclude that the award was made in manifest disregard for the law).

Damages:
Mason Tenders Dist. Council v. Circle Interior Demolition, Inc., Case No. 07-11227 (USDC S.D.N.Y. Dec. 22, 2009) (adopting the Magistrate Judge’s Report and Recommendation in its entirety, finding that the amount of damages is clear from the face of the award and that the plaintiff is entitled to interest).

Motion to Alter or Amend Judgment:
Waddell v. Holiday Isle, LLC, Case No. 09-0040 (USDC S.D. Ala. Dec. 10, 2009) (denying motion to alter or amend judgment that challenged, among other things, the court’s denials of the motion to vacate and supplemental motion to vacate).

Finality of Award:
Mitsubishi Heavy Indus., Ltd., v. Stone & Webster, Inc., Case No. 08-00509 (USDC S.D.N.Y. Sept. 29, 2009) (dismissing both the petition to vacate and the cross-petition to confirm, ruling that the award is not final and ready for review and refusing to address the parties’ arguments concerning whether part of the award should be vacated or confirmed).

This post written by Dan Crisp.

THIRD CIRCUIT RULES ARBITRATORS NOT CORRUPT

January 14, 2010 by Carlton Fields

Following the New Jersey District Court’s confirmation of an arbitrator’s award in favor of the defendant/appellees, the appellants filed an appeal to the Third Circuit challenging the final judgment. The challenge was based on appellant’s assertion that the arbitrator demonstrated bias by failing to ensure that certain documentary evidence was disclosed in a timely manner.

The Third Circuit affirmed, holding that the arbitrators’ conduct revealed no partiality or corruption and that the arbitrators were not guilty of misconduct in refusing to postpone the hearing or in refusing to hear pertinent evidence. Further, the Court ruled that the arbitrators did not impose an improper burden on appellants such that vacatur or modification of the award was required. Andorra Services v. Venfleet, Ltd., Case No. 08-4902 (3d Cir. Dec. 10, 2009).

This post written by John Black.

DISTRICT COURT CONFIRMS FOREIGN ARBITRATION AWARD DESPITE PENDING PETITION IN CHINA; DEFENDANT APPEALS

January 12, 2010 by Carlton Fields

The Southern District of New York recently confirmed an arbitration award made by the China Maritime Arbitration Commission, over objections that enforcement of the award was inappropriate because the award was being challenged before the proper authority in China. This is a particularly noteworthy opinion because of the court’s willingness to confirm the arbitration award despite the fact that the defendant had filed a petition with a foreign jurisdiction to set aside the award, which means that the arbitral award was not final.

The Court confirmed the award under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Federal Arbitration Act (“the Convention”). Under the Convention, a court “shall confirm the award” unless one of seven enumerated exceptions applies. Applying those, in connection with the Second Circuit’s non-exhaustive list of six “competing concerns”, the court concluded that confirmation of the award was appropriate. The District Court, however, refused to award attorneys’ fees finding that the defendant had not delayed payment in bad faith.

Defendants have appealed this decision to the Second Circuit. China National Chartering Group Corp. v. Pactrans Air & Sea, Inc., Case No. 06-13107 (S.D. N.Y. Nov. 13, 2009).

This post written by John Black.

NINTH CIRCUIT AFFIRMS CONFIRMATION OF AWARD MADE THROUGH AN “UNUSUAL” ARBITRATION PROCESS

January 11, 2010 by Carlton Fields

The Ninth Circuit affirmed the confirmation of an arbitration award over the respondents objections that the process employed by the arbitration panel was unfair and resulted in an implausible interpretation of the reinsurance contracts. The petitioner, U.S. Life, contended that by closing a meeting of the panel with panel-retained workers’ compensation experts, the panel refused to hear pertinent evidence regarding the appropriateness of the respondent, Superior National, claims handling. U.S. Life also contended that the panel exceeded its authority by requiring U.S. Life to pay interest in excess of the award, pay all tendered bills, and pay all future bills within thirty days. Although noting the ex parte meeting with the experts was “unusual,” the Ninth Circuit determined that the arbitration process provided the parties with a fundamentally fair arbitration, and also that the arbitration award rested on a plausible interpretation of the governing arbitration documents. It accordingly affirmed the district court’s order confirming the award.

Of interest in this case was the district court’s order on U.S. Life’s request to waive or reduce the supersedeas bond for the appeal. The liability for the judgment was $592.8 million dollars. Although the petitioner presented evidence of “considerable financial strength,” the court found that standard practice was to set a bond amount of 1.25 to 1.5 times the amount of the judgment. The district court therefore entered a bond amount of $600 million. United States Life Insurance Co. v. Superior National Insurance Co., No. 07-55938 (9th Cir. Jan. 3, 2010).

This post written by Brian Perryman.

ROUND UP OF RECENT ARBITRATION AWARD CHALLENGES

December 9, 2009 by Carlton Fields

DMA International, Inc. v. Qwest Communications International, Inc., No. 08-1392 (10th Cir. Nov. 4, 2009) (affirming confirmation, denial of vacatur of arbitration award in fee dispute. No manifest disregard, arbitrator not partial or corrupt, no violation of public policy, arbitrator did not exceed his powers).

United Forming, Inc. v. FaulknerUSA, LP, No. 09-50073 (5th Cir. Oct. 27, 2009) (affirming confirmation, denial of vacatur of arbitration award in construction contract dispute. No conflict of interest or bias on part of arbitrators, rulings not so grossly incorrect as be “misconduct” or “misbehavior” under the FAA).

Oberwager v. McKechnie, Ltd., No. 08-1117 (3d. Cir. Oct. 20, 2009) (affirming summary judgment ruling that motion to vacate was untimely under FAA in stock purchase agreement dispute).

TSYS Acquiring Resolutions, LLC v. Electronic Payment Systems, LLC, No. CV-09-0155 (USDC D. Ariz. Oct. 22, 2009) (no manifest disregard absent demonstration that arbitrator was aware of controlling law).

Ario v. Cologne Reinsurance (Barbados) Ltd., 1-CV-98-0678 (USDC D. Pa. Nov. 13, 2009) (confirming award, no evident partiality, no manifest disregard of law).

The Householder Group v. Caughran, No. 09-40111 (5th Cir. Nov. 20, 2009) (affirming confirmation of NASD panel arbitration award, no evident partiality or bias)

Busch v. Southwest Securities, Inc., No. Civ-09-661-C (USDC W.D. Okla. Nov. 28, 2009) (confirming award in employment dispute, no arbitrator misconduct or refusal to consider material evidence).

Trustmark Ins. Co. v. Clarendon National Ins. Co., No. 09-C-1673 (USDC N.D. Ill. Nov. 20, 2009) (confirming award in reinsurance treaty dispute, refusing to consider post-award dispute as to payment obligations and “set-off” arguments as beyond purview of limited review of award under FAA).

Nat’l Union Fire Ins. Co. of Pittsburgh v. Odyssey America Reinsurance Corp., No. 05-CV-7539 (USDC S.D.N.Y. Nov. 18, 2009) (denying cross petitions for post-arbitration attorneys fees, and to vacate arbitration award of attorneys fees, respectively, relating to arbitration of reinsurance dispute).

This post written by John Pitblado.