Respondent moved for an immediate stay of an arbitration of claims relating to the purchase of insurance and to vacate the panel’s interim award requiring the posting of pre-hearing security. Petitioner moved to confirm the interim award.
Respondent’s sole basis for vacating the interim award was that the panel issued its interim award without conducting a full hearing on the merits of its defenses. It predicated this request upon 9 U.S.C. § 10(a)(3), contending that the arbitrator refused to hear evidence pertinent and material to the controversy, relying on Home Indem. Co. v. Affiliated Food Distributors, Inc., 1997 WL 773712 (S.D.N.Y. Dec. 12, 1997). The panel distinguished Home Indemnity, in which the arbitration panel had “specifically conditioned . . . discovery on [the] posting of security,” and refused “even a threshold review of the underlying dispute,” finding instead that the panel in this matter had “expressly ordered that discovery proceed while the motion for pre-hearing security was litigated” and that Petitioner “produced over 40,000 pages of discovery… prior to the interim award… unlike the panel in Home Indemnity, the panel here provided [Respondent] with adequate opportunity to present its evidence and argument,” including “extensive briefing and oral argument.”
The court further commented that “[b]y its very nature, … a request for pre-hearing security is made on a limited record at an early stage of the arbitration proceedings and may be ordered before a full hearing on all defenses.” The court confirmed the panel’s interim award. Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Source One Staffing LLC, Case No. 16-6461 (USDC S.D.N.Y. May 17, 2017).
This post written by Nora A. Valenza-Frost.
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