Source: https://www.adrtimes.com/library/2012/4/19/law-updates-on-arbitration-enforcement.html
Timestamp: 2019-04-21 17:24:56+00:00

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MUSKEGON CENTRAL DISPATCH 911 v. TIBURON, INC., No. 09-2214 (6th Circuit 2012) (unpublished) (2/2/12) Arbitration agreement contained in a System Implementation Agreement (“SIA”) under which Tiburon was to design, implement, and maintain an integrated public safety computer system for MCD. Progressive dispute resolution clause. The Arbitration Agreement evidences the unambiguous intent of the parties to apply Michigan law in any subsequent appeal of the arbitration award. Under Michigan law, arbitrators can fairly be said to exceed their power whenever they act beyond the material terms of the contract from which they primarily draw their authority, or in contravention of controlling principles of law. The Arbitrator exceeded his powers (1) by concluding MCD had the responsibility to escalate and complete the DRP; and (2) by reading Section 13 as the exclusive remedy for breach of contract. The parties intended a mutual obligation to carry out the dispute resolution escalation process. The functus officio doctrine provides the circumstances in which remand to the original arbitrator, rather than a new arbitrator, is appropriate. Where a vacated arbitration award is remanded and requires a reopening of the merits of a claim, remand to a new arbitrator is appropriate.
OZORMOOR v. T-MOBILE USA, INC., No. 10-2235 (6th Circuit 2012) (not for publication) (1/25/12) Under the manifest-disregard-of-the-law standard, we may set aside the arbitrator’s decision only if, after applying clearly established legal precedent, no judge or group of judges could conceivably come to the same determination.
WACHOVIA SECURITIES, LLC v. BRAND, No.10-2111 (4th Circuit 2012) (2/12/12) A court sits to determine only whether the arbitrator did his job-not whether he did it well, correctly, or reasonably, but simply whether he did it. § 10(a)(3) allows courts to vacate arbitration awards only “where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced.” Mistakes lack the requisite intentionality to fall within §10(a)(3)’s reach. Because Wachovia did not allege intentional misconduct, §10(a)(3) offers it no relief. The court would not overturn an award for violating §10(a)(3)’s protection against “any other misbehavior by which the rights of any party have been prejudiced” where the arbitrators attempted to address one party’s unhappiness with the fairness of the hearing and that party refused to take advantage of the opportunity provided. Manifest disregard continues to exist as either an independent ground for review or as a judicial gloss. The panel was not compelled to import state law procedural requirements if it found a different procedure to be better suited to the needs of the arbitration. Manifest disregard means: (1) the applicable legal principle is clearly defined and not subject to reasonable debate; and (2) the arbitrator refused to heed that legal principle. It is not an invitation to review the merits of the underlying arbitration.
REPUBLIC OF ARGENTINA v. BG GROUP PLC, No. 11-7021 (D. C. Cir. 2012) (1/17/12) The arbitral panel exceeded its authority by ignoring the terms of the parties’ agreement. That agreement, in the form of a Bilateral Investment Treaty between the United Kingdom of Great Britain and Northern Ireland, and Argentina provided that disputes between an investor and the host State will be resolved in the host State’s courts. If, however, no final court ruling is forthcoming within eighteen months or the dispute is unresolved after a court ruling, the Treaty provides that resort may then be had to arbitration. The investor invoked the arbitration clause without first filing a claim in the host state court. The arbitral panel nonetheless ruled it had jurisdiction, found Argentina had violated the Treaty, and awarded BG Group damages. The arbitral panel rendered a decision wholly based on outside legal sources and without regard to the contracting parties’ agreement establishing a precondition to arbitration. Because the Treaty provides that a precondition to arbitration of an investor’s claim is an initial resort to a contracting party’s court, and the Treaty is silent on who decides arbitrability when that precondition is disregarded, the court that the question of arbitrability is an independent question of law for the court to decide.
IN THE MATTER OF: THORPE INSULATION CO., No. 10-55744 (9th Cir. 2012) (1/30/12) In non-core proceedings, the bankruptcy court generally does not have discretion to deny enforcement of a valid prepetition arbitration agreement. In core proceedings, by contrast, the bankruptcy court, at least when it sees a conflict with bankruptcy law, has discretion to deny enforcement of an arbitration agreement. A bankruptcy court has discretion to decline to enforce an otherwise applicable arbitration provision only if arbitration would conflict with the underlying purposes of the Bankruptcy Code. Continental filed a proof of claim, and Thorpe objected to the claim, so under 28 U.S.C. § 157(b)(2)(B), the allowance or disallowance of that claim was a core proceeding. Because Congress intended that the bankruptcy court oversee all aspects of an asbestos § 524(g) reorganization, only the bankruptcy court should decide whether the debtor’s conduct in the bankruptcy gives rise to a claim for breach of contract. Arbitration in this case would conflict with congressional intent. Arbitration of a creditor’s claim against a debtor, even if conducted expeditiously, prevents the coordinated resolution of debtor-creditor rights and can delay the confirmation of a plan of reorganization. The bankruptcy court had discretion not to enforce the arbitration clause.
SCANDINAVIAN REINSURANCE CO. LTD. v. ST. PAUL FIRE AND MARINE INS. CO., No. 10-0910-cv (2nd Cir. 2012) (2/3/12) 9 U.S.C. § 10(a)(2). Two of the three members of the arbitral panel failed to disclose their simultaneous service as arbitrators in another proceeding in which a common witness, similar legal issues, and a related party were involved ≠ evident partiality. Evident partiality may be found only “‘where a reasonable person would have to conclude that an arbitrator was partial to one party to the arbitration.’” Overlapping service as arbitrators in both arbitrations does not, in itself, suggest that they were predisposed to rule in any particular way in the St. Paul Arbitration.
BELIZE SOCIAL DEVELOPMENT LIMITED v. GOVERNMENT OF BELIZE, No.10-7167 (D. C. Cir. 2012) (1/13/12) A court may adjourn enforcement proceedings (grant a stay) only on the grounds explicitly set forth in the N.Y. Convention. The phrase “under the law of which” refers to the procedural law governing the arbitration, not the substantive law governing the Agreement. A London arbitration panel ruled in favor of the Belize company. The company then sued in U.S. District Court to enforce the arbitration award. Mandamus is appropriate where no grounds for deferral of recognition or non-enforcement of the arbitral award were found.
BILLER v. TOYOTA MOTOR CORPORATION, No. 11-55587 (9th Circuit 2012) (2/3/12) Arbitration award affirmed. JAMS employment arbitration rules. The FAA authorizes limited review of the Final Award. Neither erroneous legal conclusions nor unsubstantiated factual findings justify federal court review of an arbitral award. § 10 of the FAA provides no authorization for a merits review. The parties, by choosing the FAA as the vehicle for judicial review, may not by contract expand the scope of judicial review beyond that which the FAA authorizes. Under § 10 of the FAA, vacatur is appropriate where it is evident that “the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.” 9 U.S.C. § 10(a)). Under the FAA, arbitrators are not required to set forth their reasons for the award. FAA does not authorize a judicial merits review of arbitration awards. Manifest disregard of the facts is not a grounds for vacatur. For an arbitrator’s award to be in manifest disregard of the law, it must be clear from the record that the arbitrator recognized the applicable law and then ignored it.

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