A Massachusetts federal district court determined that even if an arbitral panel acted ‘unfairly’, it was acting within its ‘legal authority when it reviewed and denied respondents’ requests for subpoenas’. Rogers v. Ausdal Financial Partners, Inc. No. 15-12899-FDS, (USDC D. Mass., March 9, 2016). The Court rejected Respondents Norton and Ausdal Financial Partners, Inc.’s argument that the panel’s failure to issue subpoenas to non-parties denied them a fair opportunity to obtain material evidence through discovery. [Read more…]
Arbitral Panel’s Denial of Request to Issue Subpoenas to Numerous Non-Parties Did Not Deny Respondents a Fair Hearing
June 20, 2016 by
Parties in Massachusetts Cannot Contractually Expand the Scope of Judicial Review of an Arbitration Award
June 11, 2016 by
The Supreme Judicial Court in Massachusetts recently held that the parties to a commercial arbitration agreement could not contractually alter the grounds for judicial review of an award that are set forth in the Massachusetts Uniform Arbitration Act for Commercial Disputes (MAA), G. L. c. 251. Katz, Nannis & Solomon, P.C. v. Bruce Levine, 473 Mass 784 (2016). In so deciding, Massachusetts joins the ranks of Georgia, Maine, North Dakota, and Tennessee. [Read more…]
Second Circuit Reverses District Court’s Award of Fees and Costs Incurred in Seeking to Confirm an Award
February 3, 2016 by
After affirming, in short order, the district court’s confirmation of the arbitral award, the Second Circuit holds that a party who prevails in an arbitration is not entitled to recoup the fees and costs it incurred in seeking to confirm the arbitral award. Zurich American Insurance Co. v. Team Tankers A.S., No. 14-4036-cv, January 28, 2016.
Petitioner-Appellant Vinmar (the “shipper”) chartered a ship from Respondent-Appellee Team Tankers ( the “carrier”) to move a chemical called ACN from Texas to South Korea. ACN is a raw material that is most valuable in its colorless form. If ACN comes into contact with other chemicals, it can ‘yellow’ which reduces its value. When ACN arrived in South Korea it was stored in on-shore tanks; six weeks later, it had yellowed. The shipper claimed that the vessel had been contaminated with a chemical that caused ACN to yellow. [Read more…]
Second Circuit Upholds Pre-Dispute Agreement to Arbitrate before non-FINRA Arbitration Forum
February 2, 2016 by
Finding a conflict between FINRA Rule 13200 and a pre-dispute private agreement to arbitrate before a non-FINRA forum, the Second Circuit holds that “FINRA Rule 13200 does not prohibit a pre-dispute waiver of a FINRA arbitral forum.” Credit Suisse Securities (USA) LLC v. John David Tracey et al, No. 15-345-cv, January 28, 2016. Accordingly, the Second Circuit affirmed the district court’s order dismissing the former employees’ claims before a FINRA panel and compelling them to pursue their clams in the JAMS forum. [Read more…]
The Massachusetts SJC Affirms Vacatur of an Arbitration Award Granting Attorney’s Fees
January 12, 2016 by
Relying on principles of statutory construction, the Supreme Judicial Court held that even in light of a finding that all of the claims or defenses are ‘wholly insubstantial, frivolous, and not advanced in good faith’, an arbitral panel lacks the authority to award attorney’s fees unless the parties provided for the award of fees in their agreement to arbitrate. Beacon Towers Condominium Trust v. George Alex, SJC-11880. January 7, 2016.
Supreme Court Holds the FAA Preempts California’s Contract Interpretation, Reaffirming Class-Arbitration Waivers
December 21, 2015 by
Finding that the California Court of Appeal did not place arbitration contracts “on equal footing with all other contracts”, the Supreme Court held that California’s interpretation of the arbitration contract was pre-empted by the FAA. DIRECTV, INC. V, IMBURGIA, No. 14-462, Dec. 14, 2015. The Court did not question whether the Court of Appeal’s decision was a proper statement of California law, but “whether the Court of Appeal’s decision in fact rests upon ‘grounds as exist at law or in equity for the revocation of any contract.’”
New York Judge Vacates Arbitration Award Due to Evident Partiality
November 19, 2015 by
Finding that trust in the neutrality of the adjudicative process is the bedrock of the FAA, New York Supreme Court Judge Lawrence Marks vacated an award in favor of the Washington Nationals in a dispute over television fees. TRC Sports Broadcasting Holding v. WN Partner, 652044/2014, Nov. 4, 2015. The Court found that Proskauer Rose’s representation of Major League Baseball, the arbitrators and the Nationals over the objections of Petitioner MASN (previously TRC Sports) and the Baltimore Orioles was ‘unquestionably inconsistent with impartiality’. [Read more…]
Third Circuit Reverses Vacatur, Finding Waiver of an Arbitrator’s Insufficient Disclosure
October 23, 2015 by
The Third Circuit adopts the constructive knowledge standard in holding that a party waives its right to challenge an award based on an arbitrator’s insufficient disclosures. Goldman, Sachs & Co v. Athena Venture Partners, L.P. No. 13-34612, (3rd Cir. Sept. 29, 2015). Under a constructive knowledge standard, a party may not conduct a background investigation on an arbitrator after the award solely to seek vacatur. [Read more…]
Chevron’s Arbitral Award Against Ecuador Confirmed by D.C. Court of Appeals
August 18, 2015 by
The D.C. Circuit affirmed the trial court’s holding that it has jurisdiction under the Foreign Sovereign Immunities Act (FSIA) to confirm an arbitral award in Chevron’s favor and rejected Ecuador’s argument that confirmation should be denied under the New York Convention. Chevron Corporation and Texaco Petroleum Company v. The Republic of Ecuador, No. 13-7103, (D.C. Cir. August 4, 2015).
This long-standing battle between Chevron and Ecuador began in the early nineties when an agreement between the parties allowing Chevron to develop Ecuadorian oil fields in exchange for providing below-market oil to Ecuador was set to expire. Before the expiration date, Chevron filed several breach of contract suits against Ecuador. In 1995, the parties entered a settlement agreement terminating all rights and obligations between them but providing for the continuation of the pending lawsuits. [Read more…]
California Upholds Arbitration Clause in Consumer Contract
August 11, 2015 by
In a long-awaited decision, the California Supreme Court held that SCOTUS’s decision in Concepcion requires enforcement of the class action waiver but does not limit the unconscionability rules applicable to other provisions of the arbitration agreement. Sanchez v. Valencia Holding Company, LLC, (August 3, 2015) __ Cal. 4th __, S1999119. Both the trial court and the Court of Appeals found the arbitration clause, which was in a standard automobile contract, unconscionable. The Court, in a thorough analysis of each of the arbitration agreement’s provisions, did not find any of the challenged terms unconscionable. [Read more…]