The Third Circuit Court of Appeals heard the appeal of Bapu Corporation from a district court’s denial of its motion to vacate an arbitration award. The dispute centered on Choice Hotels International Inc.’s decision to terminate a Quality Inn license agreement with Bapu on the basis that Bapu had failed to make required renovations to the hotel. Bapu asserted that Choice’s claim for damages was barred by the applicable three year statute of limitations, and raised that issue and others in the parties’ arbitration. Ultimately, both the district court and the Third Circuit Court agreed that the arbitrator’s decision against Bapu, based partly on the fact that Bapu had waived its statute of limitations claim by failing to pursue it after initially raising it, did not provide a basis for vacatur. The Court side-stepped the question, however, of whether manifest disregard of law constituted an independent basis for vacatur of arbitration awards, after the Supreme Court’s ruling in Hall Street Associates, L.L.C. v. Mattel Inc., but noted a split of authority in the sister circuits on that question. The Court also rejected Bapu’s claim of arbitrator bias or corruption. Bapu Corp. v. Choice Hotels Int’l, Inc., No. 09-1011 (3d Cir. March 16, 2010).
This post written by John Pitblado.