Opinion ID: 2981427
Heading Depth: 2
Heading Rank: 2

Heading: Evidentiary Standards

Text: Crescent next asserts that the arbitrator engaged in an “improper application of evidentiary procedures.” Crescent argues that the Arbitrator relied on considerations like temperature, fuel/water tank content, evaporation, leakage, and other elements of geology and petroleum engineering when he lacked the expertise to do so, and that he did not give Crescent the opportunity to present expert testimony on the same subjects. Crescent also argues that the Arbitrator erroneously used an “all or 10 No. 11-1778 Barrick Enterprises, Inc. v. Crescent Petroleum, Inc., et al. nothing” approach, i.e., “unilaterally adopted the liability standard that Barrick had to be 100% responsible for any fuel shortages before liability could be attached to them,” and then stated that “the evidence was insufficient to deem Barrick 100% liable for Crescent’s fuel shortage.” This, Crescent argues, shows a “manifest disregard of the law,” and the award must accordingly be vacated. But the record does not bear this out. To begin with, “[a]rbitrators are not bound by formal rules of procedure and evidence.” Nat’l Post Office Mailhandlers v. United States Postal Serv., 751 F.2d 834, 841 (6th Cir. 1985). Furthermore, we note that this court and others have recognized a presumption in favor of an arbitration award’s validity. See, e.g., Kroger Co. v. Intern. Broth. of Teamsters, etc., 380 F.2d 728, 730 (6th Cir. 1967) (“It is axiomatic that a court will not review the merits of an arbitration award.”) (citation omitted); Telephone Workers Union of New Jersey, Local 827, Intern. Broth. of Elec. Workers, AFL-CIO v. New Jersey Bell Tel. Co., 450 F. Supp. 284, 291) (D. N. J. 1977) (“There is a presumption in favor of the award’s validity.”). These specific principles, taken together with the general principles guiding our review, mean that Crescent has a high bar to clear before we will find fault with the Arbitrator’s evidentiary decisions. But even if we could review Crescent’s claims without deference, the record simply does not support them. First, the Arbitrator did not rely on temperature, fuel/water tank content, etc. Rather, he merely opined that any number of factors other than an intentional short-changing by Barrick could account for discrepancies. Nowhere in the award does he engage in a geological analysis or an analysis based on petroleum engineering expertise, real or purported. In fact, he concludes that the discrepancies were attributable to Crescent’s accounting practices—a conclusion well within the 11 No. 11-1778 Barrick Enterprises, Inc. v. Crescent Petroleum, Inc., et al. Arbitrator’s expertise under the Order, which required him to use generally accepted accounting principles.3 Second, the Arbitrator did not unilaterally adopt an “all or nothing” liability standard. The award contains a single statement that “the evidence provided [was] insufficient to conclude that [Barrick] alone could have been the cause of the volume discrepancy”; but that is simply another way to phrase his finding that “any volume discrepancies that may exist are not readily attributable to the actions of [Barrick].” This does not amount to an impermissible evidentiary standard under which, as it alleges, Crescent was required to prove that Barrick was completely and solely responsible for the shortages before any liability could attach to Barrick. Nor does it amount to a manifest disregard of clearly established law. We thus reject Crescent’s evidentiary arguments.