Confirmation / Vacation of Arbitration Awards

VARIOUS RULINGS WITH RESPECT TO ARBITRATION AWARDS

June 17, 2009 by Carlton Fields

Manifest Disregard of Law: Macromex Srl v. Globex Int’l Inc., No. 08-2255 (2d Cir. May 26, 2009) (affirming district court’s confirmation of award, finding no manifest disregard of law); Brezden v. Associated Sec. Corp., Case No. 09-2771 (USDC C.D. Cal. June 1, 2009) (denying petition to vacate, finding no manifest disregard of law) (respondents have since filed a Notice of Appeal); Holland v. Wachovia Sec., LLC, Case No. 08-1772 (USDC S.D. Cal. May 15, 2009) (dismissing petition to vacate; manifest disregard of law allegation did not necessarily depend on resolution of a substantial question of federal law). None of these opinions discuss the continued viability of this doctrine after the Supreme Court’s Hall Street Associates opinion.

Petitions to Vacate: United Gov’t. Sec. Officers of Am., Int’l Union v. Pinkerton Gov’t Servs., Inc., Case No. 08-285 (USDC E.D. Tenn. June 03, 2009) (denying defendant’s motion to dismiss an action to vacate and modify an award, finding the court was not deprived of its concurrent jurisdiction); Steward v. H & R Block Fin. Advisors, Inc., Case No. 08-5994 (USDC D. Minn. May 28, 2009) (dismissing petition to vacate, rejecting petitioner’s numerous claims).

Public Policy: Columbia Gas of Ohio, Inc. v. Util. Workers Union of Am., Local 349, No. 08-3616 (6th Cir. May 15, 2009) (affirming the district court’s confirmation of award, enforcement of the contract agreement not contrary to public policy).

Miscellaneous: Parham v. Am. Bankers Ins. Co. of Fla., Case No. 07-706 (Ala. May 29, 2009) (finding no indication that the clerk entered the arbitrator’s order as the judgment of that court as required, ruling that the trial court’s order is void and vacated, dismissing the appeal for lack of subject matter jurisdiction as no final judgment exists); Med. Shoppe Int’l., Inc. v. Turner Invs., Inc., Case No. 09-00102 (USDC E.D. Mo. May 7, 2009) (granting application to confirm award as the allegations of bias failed and the court lacked jurisdiction to review allegations of factual errors); Dzanoucakis v. The Chase Manhattan Bank, USA, Case No. 06-5673 (USDC E.D.N.Y. Mar. 31, 2009) (granting motion to confirm award, finding sufficient evidentiary basis to establish the existence of an arbitration agreement and no evidence of impartiality).

This post written by Dan Crisp.

ARBITRATION AWARD SUMMARILY CONFIRMED WHERE NO DISPUTE ABOUT THE AWARD EXISTED

June 10, 2009 by Carlton Fields

A petition to confirm a $187,000 reinsurance arbitration award was granted where there was no dispute that the court had jurisdiction over the parties and subject matter of the action, or that the claims at issue were properly submitted to the arbitration panel for resolution. In fact, the amount of the award had already been paid. The petitioner apparently wished the award confirmed simply to avoid any doubt in future litigation. That request was granted. Global Reinsurance Corp. v. Argonaut Ins. Co., Case No. 08-8482 (USDC S.D.N.Y. May 22, 2009).

This post written by Brian Perryman.

CONFUSION OVER HALL STREET CAUSES COURT TO ADOPT “BELT AND SUSPENDERS” APPROACH TO MANIFEST DISREGARD CLAIM

May 28, 2009 by Carlton Fields

A software company’s (Xtria) appeal of the trial court’s refusal to vacate a commercial arbitration award was rejected, along with Xtria’s assertion that the arbitrator made a gross mistake or manifestly disregarded the law because the claims of Xtria’s sales agent (International) were barred due to a previous settlement entered into between Xtria and International’s subsidiary (Tracking Systems). The settlement defined Tracking Systems to includes its “past, present and future affiliate.” In a subsequent arbitration between Xtria and International concerning Xtria’s alleged breach of another contract, the arbitrator refused to apply the settlement to International because, although it was Tracking System’s parent company, it was not an “affiliate” under California law, because International controlled Tracking Systems, not the other way around. The arbitrator awarded International $1.35 million for breach of contract. The trial court confirmed the award.

On appeal, the award was again confirmed. The appellate court noted the United States Supreme Court’s decision in Hall Street Associates, LLC v. Mattel, Inc., and Fifth Circuit precedent holding that the “manifest disregard” vacatur ground is no longer a federal common law standard, and contrary state law is preempted by the Federal Arbitration Act. However, the appellate court stated that “without making a determination that the so-called common-law grounds for vacatur no longer exist,” it would address Xtria’s manifest disregard argument “in the attitude of cautiously donning both a belt and suspenders.” However, Xtria’s argument was unavailing since the arbtirator did not manifestly disregard the law in: (1) interpreting the settlement agreement; (2) determining the parties’ intent to exclude International from the settlement; or (3) deciding that International was not a Tracking Systems “affiliate.” There was also no “gross mistake” in the arbitrator’s decision. Xtria v. Int'l Ins. Alliance Inc., Case No. 06-08-00073 (Tex. App. May 15, 2009).

This post written by Brian Perryman.

NINTH CIRCUIT FINDS THAT THE DISTRICT COURT LACKED JURISDICTION TO CONFIRM ARBITRATION AWARD AGAINST THE UNITED STATES

May 19, 2009 by Carlton Fields

In a proceeding in which the United States declined to participate, an arbitration panel awarded over $93 million to Park Place Associates, Ltd. (“Park Place”) on a breach of contract claim against the United States, which subsequently filed a motion to vacate in district court, which denied the motion to vacate and granted Park Place’s motion to confirm the award. On appeal, the Ninth Circuit first affirmed the denial of the motion to vacate, finding jurisdiction sufficient, since the United States had commenced civil proceedings in the district court by filing a complaint and a motion to vacate, and rejecting United States’ manifest disregard of the law arguments. Next, the court vacated the grant of the motion to confirm, concluding that, in this case where the action is to confirm a contract-based claim against the United States, the Tucker Act, which conditions its waiver on jurisdiction to the Court of Federal Claims, is the only means by which the United States can be said to have waived sovereign immunity, and, thus, the district court lacked jurisdiction to confirm the award. The court then remanded the case to the district court with instructions to dismiss the confirmation action as barred by sovereign immunity. United States v. Park Place Assocs., Ltd., No. 05-56235, No. 05-56312 (9th Cir. Apr. 22, 2009).

This post written by Dan Crisp.

RULE 60(B) MOTION NOT AVAILABLE TO CIRCUMVENT OR EXPAND THE FAA’S GROUNDS FOR VACATUR OF AN ARBITRATION AWARD

May 7, 2009 by Carlton Fields

On October 6, 2008, we reported on a Texas district court entering orders, over a period of several months, confirming two arbitration awards, granting partial final judgment under Rule 54(b), denying a stay without bond, and denying a Rule 59 motion to set aside the partial final judgment.

Halliburton Energy Services, Inc. (“Halliburton”) has since moved for relief under Rule 60(b), for discovery relating to its Rule 60(b) motion, and for a protective order on discovery into its assets. Halliburton claimed that documents recently discovered in its own files conclusively establish a key issue determined in the arbitration and sought discovery into the opposing party’s knowledge of these documents. The court, after declining to rule on the issue of the motion’s timeliness, denied the motion for relief under Rule 60(b), holding that Rule 60(b) was not available to vacate the award and, on the merits, finding that Halliburton presented no evidence of fraud or misconduct, could not show that these documents would have changed the proceedings, could not show that the judgment was inequitable, had the opportunity to fully and fairly present its case, and could not show due diligence in its search for documents. Finally, the court denied the motion for discovery related to the Rule 60(b) motion and granted the motion for a protective order, finding that discovery into Halliburton’s assets was not supported by the record. Halliburton Energy Servs., Inc. v. NL Indus., Case No. 05-4160 (USDC S.D. Tex. Mar. 31, 2009).

This post written by Dan Crisp.