Confirmation / Vacation of Arbitration Awards

Awards upheld

TIG Ins. Co. v. Global Int’l Reinsurance Co. Ltd., 09-Civ-1289 (USDC S.D.N.Y. Aug. 7, 2009) (arbitration award confirmed, no manifest disregard of law)

UTGR Inc. d/b/a Twin River v. Mutuel/Gaming Clerks of Rhode Island, Local 334, No. 09-046-S (USDC D.R.I. Aug. 6, 2009) (arbitrator’s award in CBA dispute confirmed)

Waddell v. Holiday Isle, LLC, No., CV-09-0040 (USDC S.D. Ala. Aug. 4, 2009) (several motions to vacate arbitration award denied, no manifest disregard, one motion to vacate granted as beyond the submission)

WellPoint, Inc. v. John Hancock Life Ins. Co., No. 07 C 943 (7th Cir. Aug. 7, 2009) (affirming district court’s denial of motion to vacate arbitration award)

Parsons, Brinckerhoff, Quade & Douglas, Inc. v. Palmetto Bridge Constructors, No. RDB-09-633 (USDC D. Md. Aug. 25, 2009) (motion to confirm arbitration award granted) .

Award reversed

Globe Newspaper Co. v. Int’l Assoc. of Machinists, Local 264, District 15, No. 08-cv-11945 (USDC D. Mass. Aug. 5, 2009) (vacating arbitrator’s award in CBA dispute as against public policy)

This post written by John Pitblado.

Following a dispute over eight reinsurance agreements, Century Indemnity moved to confirm in part and vacate in part an arbitration award ordering Fencourt Reinsurance to pay a certain sum owed under the agreements. The paragraph at issue stated that “all other claim for relief are denied,” meaning that Century could not recover interest, attorneys’ fees and court costs under the agreement. The District Court for the Eastern District of Pennsylvania denied Century’s motion to vacate, finding the portion of the agreement concerning interest, fees and costs was ambiguous as it did not explicitly specify whether it applied before or after arbitration proceedings. Accordingly, the arbitration panel’s interpretation was not “completely irrational” nor did the panel exhibit a “manifest disregard” for the agreement. Century Indem. Co. v. Fencourt Reinsurance, Case No. 09-MC-53 (E.D. Pa. July 22, 2009).

This post written by John Black.

A court has vacated a FINRA arbitration award on the ground that the arbitrators exhibited manifest disregard of controlling law. Plaintiff moved to vacate the arbitration award denying its claims in FINRA proceedings that the defendant sold it Cuban bearer bonds that had been defaulted on in the wake of the 1959 communist revolution. After a two-day evidentiary hearing, the arbitators denied all of plaintiff’s claims. Plaintiff sought to vacate the defendant’s award on the ground that the arbitrators exceeded their powers, urging that they ignored the Cuban Assets Control Regulations, which prohibits transactions involving Cuban assets. The arbitration decision recognized the Regulations as applicable, but made no other mention of them, and made no findings of fact or conclusions of law regarding them. The court therefore awarded plaintiff its principal, compounded at the legal rate of interest. See More Light Investments v. Morgan Stanley DW Inc., Case No. CV 08-580 (USDC D. Ariz. July 29, 2009).

This post written by Brian Perryman.

Platinum Underwriters Bermuda, Ltd. reinsured PMA Capital Ins. Co., under a reinsurance agreement that contained a “deficit carry forward” provision. The parties disputed how certain deficits were to be calculated under the provision and arbitrated the claim. The arbitral panel awarded PMA $6,000,000, but eliminated the “deficit carry forward” provision from the contract, which provision ran to the benefit of Platinum. Both parties sought to vacate or modify the award. The court found the panel’s decision “completely irrational” – even under the broad grant of authority provided to the panel under the contract’s “Honorable Engagement Clause” – as the deficit carry forward provision was part of the essence of the contract and could not be written out of it. Moreover, the court saw no justification for the $6,000,000 award, other than as an equally irrational attempt to “compensate” Platinum for the elimination of the deficit carry forward provision. The Court granted PMA’s application to vacate the award, finding that an arbitration award that is not drawn from the essence of the contract is completely irrational, and therefore, in manifest disregard of the law. PMA Capital Ins. Co. v. Platinum Underwriters Bermuda, Ltd., No. 09-84 (USDC E.D. Pa. Sept. 15, 2009).

This post written by John Pitblado.

The plaintiff moved to vacate an arbitration award in favor of the defendant in disputes about grievance procedures arising from the parties’ Collective Bargaining Agreement (“CBA”). The disputes arose from the plaintiff’s disciplinary actions of certain members of the defendant unions. The court declined to vacate the award, relying on principles of deference to arbitral panels generally, and in particular under a CBA, deference to the arbitrators’ interpretation of the CBA and its procedural requirements. Continental Carbon Corp. v. United Steel, Paper and Forestry, Rubber Manufacturing, Energy, and Allied Industrial Service Workers Int’l Union, 08-cv-543-JHP-TLW (N. D. Okla. July 23, 2009).

This post written by John Pitblado.