Which Arguments Are Winning On Appeals From Arbitration So Far In 2015?
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Today I present a collection of recent state and federal appellate court decisions that vacate or un-vacate arbitration awards. The seven opinions below emphasize how difficult it is to prove that an arbitrator exceeded his or her power and suggest that the surest way to vacate an arbitration award is still by presenting evidence that an arbitrator had significant ties to the opposing party.
VACATED
The Supreme Court of Alabama vacated an award for evident partiality. Municipal Workers Compensation Fund, Inc. v. Morgan Keegan & Co., Inc., __ So. 3d __, 2015 WL 1524911 (Ala. Apr. 3, 2015). Alabama has determined, under the FAA, that arbitration awards may be vacated if the evidence shows a “reasonable impression of partiality” by the arbitrators. In this case, the court found that one of the three FINRA arbitrators did not disclose the significant relationship between his financial firm and the respondent’s firm (including co-underwriting equity and debt issuances and being co-defendants in lawsuits). Even though there was no evidence that the arbitrator was aware of those business relationships, the court found the FINRA arbitration rules obligated the arbitrator to discover those relationships and he did not satisfy that duty. Therefore, the arbitration award was vacated for evident partiality.
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