New York Court of Appeals Rules on Arbitrator Partiality

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.