New York Business Litigation Lawyer Blog
After an extensive selection process to select arbitrators, and 10 hearings over 19 months, defendant sought an injunction to stay the continuation of an AAA arbitration and to disqualify the remaining two arbitrators. At a point prior to that, the panel chair disclosed that his daughter-in-law was an attorney working for the same firm that was representing plaintiff. Not seeing a conflict, the other panel members supported the chair’s efforts to stay on the panel. After defendant objected, the AAA removed the chair from the panel, but not the “wing” arbitrators.
Defendant sought to disqualify those two remaining panel members because they did not agree to disqualify the chair and were thus “compromised by their improper participation” in the chair’s disclosure process and efforts to stay on the panel, which purportedly demonstrated their impartiality against defendant. It appears from the decision that defendant was not just complaining about the chair’s discussion with the other two arbitrators about the conflict and his resignation, but their knowledge that defendant challenged their partiality, all of which rendered them unfit to continue as arbitrators.
After noting that the AAA had the final say about disqualification of arbitrators, and did not bar the type of discussion of which defendant complained, the court held that defendant was not entitled to the injunction finding “neither the appearance [of] nor ‘probable partiality.’” Reiterating the reluctance of courts to interfere in a pending arbitration, especially as AAA rules and procedure were on point to the issues of which defendant complained, the court rejected defendant’s argument that the disqualified arbitrator somehow poisoned the remaining two. The court underscored its opinion of defendant’s application by pointing out that defendant’s concern about the remaining arbitrators’ opinion of defendant was entirely of its own making in that until the lawsuit was filed those two arbitrators were not aware that defendant was challenging their role as the remaining arbitrators. The court closed its opinion by rejecting the remaining claims of bias asserted by defendant and reminding defendant that it could object to the panel’s decision in court.
One wonders how badly defendants were losing before the AAA panel that prompted it to attack the three retired federal judges that made up that panel.
Huntsman International, LLC v. Albemarle, Corp.