June 15th, 2009
Arbitrability, Authority of Arbitrators, Class Action Arbitration, Consolidation of Arbitration Proceedings, United States Court of Appeals for the Second Circuit, United States Supreme Court
On May 29, 2009 we discussed Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), which held that “manifest disregard of the law” is not an independent basis for vacating an arbitration award foreclosed by Hall Street, but one encompassed within Section 10(a)(4)’s prohibition against arbitrators “exceed[ing] their powers. . . .” This morning the United States Supreme Court granted certiorari in Stolt-Nielsen to decide whether imposing class arbitration on parties whose arbitration clauses are silent on that issue is consistent with the Federal Arbitration Act. The Second Circuit found that the arbitrators did not exceed their powers when they ordered a class action arbitration, even though the contract was concededly silent on whether class arbitrations were permitted.
We shall post in the not too distant future an analysis of the issue the United States Supreme Court will decide, as its resolution potentially has important implications on the powers of arbitrators to consolidate arbitrations or order class-action arbitration proceedings.
Stay tuned. . . .
May 8th, 2009
Arbitrability, Authority of Arbitrators, Awards, Life Reinsurance, New York Court of Appeals, United States Court of Appeals for the Second Circuit, United States Supreme Court
We recently critiqued ReliaStar Life Ins. Co. v. EMC National Life Co., ___ F.3d ___ (2009) (Raggi, J.), in which the United States Court of Appeals for the Second Circuit held that an arbitration panel was authorized to award under the bad faith exception to the American Rule attorney and arbitrator fees to a ceding company in a case where the parties had agreed that each “shall bear the expense of its own arbitrator. . . and related outside attorneys’ fees, and shall jointly and equally bear with the other party the expenses of the third arbitrator.” We believe that the majority opinion did not faithfully apply New York’s strict rules of contract interpretation and construction, which the parties expressly agreed would apply. You can find our critique here, and a report on the case here. Continue Reading »
