Second Circuit Court of Appeals Rules on “Evident Partiality”

george — Sun, 12 Feb 2012 17:45:27 +0000

In this case, the Court of Appeals reversed the district court’s vacatur of an award and ruled that non-disclosure by two arbitrators of their concurrent service in another similar case did not rise to the level of ”evident partiality” under S. 10(a)(2) of the Federal Arbitration Act. While the Court stated that it would have been better had the arbitrators disclosed the potential conflict of interest, “…a better course is not necessarily the only permissible one.” Since the “evident partiality” standard is “at its core, directed to the question of bias…”, a party does not meet its burden of establishing evident partiality by demonstrating that an arbitrator has failed to make a disclosure. The Court stated that evident partiality “… will be found where a reasonable person would have to conclude that an arbitrator was partial to one party to the arbitration… [u]nlike a judge, who can be disqualified in any proceeding in which his impartiality might reasonably be questioned…” Useful — although not dispositive — factors to be considered in determining evident partiality are: ”(1) the extent and character of the personal interest, pecuniary or otherwise, of the arbitrator in the proceedings; (2) the directness of the relationship between the arbitrator and the party he is alleged to favor; (3) the connection of that relationship to the arbitrator; and (4) the proximity in time between the relationship and the arbitration proceeding.”

Scandinavian Reinsurance Company Limited v. Saint Paul Fire and Marine Insurance Company et al, 2nd Cir. Ct. Appeals (Feb. 3, 2012)

New York Court of Appeals Rules on Arbitrator Partiality

george — Sat, 19 Nov 2011 17:11:13 +0000

In U.S. Electronics, Inc. v. Sirius Satellite Radio, Inc. (Nov. 15, 2011), the New York Court of Appeals considered the meaning of “evident partiality” of an arbitrator as a basis for vacatur of an arbitration award under s. 10(a)(2) of the Federal Arbitration Act. The Court followed the Second Circuit Court of Appeals’ decision in Morelite Const. Corp. v. New York City Dist. Council Carpenters Benefit Funds (748 F.2d 79, 84 [2d Cir. 1984]) which declined to follow the ” appearance of bias” standard suggested by Justice Black in Commonwealth Coatings Corp. v. Continental Casualty Co., (393 U.S. 145 [1983]), and held that the “reasonable person” standard ( ”…where a reasonable person would have to conclude that an arbitrator was partial to one party to the arbitration”) should be applied.

U.S. Electronics, Inc. v. Sirius Satellite Radio, Inc.

George Gluck

Second Circuit Court of Appeals Rules on “Evident Partiality”

New York Court of Appeals Rules on Arbitrator Partiality