The court was petitioned to appoint an umpire when the arbitrators appointed by the litigants – an insurer and certain insureds – failed to do so. The insureds opposed the petition, arguing that the party arbitrators should be ordered to select one of the candidates that the arbitrators had been proposing. The arbitration agreement stated, however, that “if the two arbitrators fail to agree on a third party arbitrator within 30 days of their appointment, [then] either party may make application to a court of competent jurisdiction in . . . New York.” Section 5 of the FAA also directs the district court to “designate and appoint an arbitrator . . . or umpire, as the case may require,” following “a lapse in the naming of an arbitrator . . . or umpire.” The court thus held that the arbitration agreement and the FAA authorized the court to appoint an umpire.
The court then considered the field of proposed candidates, and selected one of the individuals proposed by the insurer. The court rejected the insureds’ argument that the selected umpire was likely to be partial to the insurer due to his certification by ARIAS (which, according to the insureds, could be biased towards insurance companies). The court found that the insureds’ candidates were less qualified in that they did not have any personal experience serving as an arbitrator or as an umpire. The insurer’s candidates, in contrast, had previously served as umpires in numerous arbitrations. The court selected the most experienced candidate among the group proposed by the insurer, explaining that, while certification with a particular organization or specific arbitration experience is not required to serve as an umpire, “reason dictates” that those credentials should be determinative. Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Beelman Truck Co., Case No. 17-CV-2946 (USDC S.D.N.Y. July 17, 2017).
This post written by Gail Jankowski.
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