Chief Judge Frank H. Easterbrook of the United States Court of Appeals for the Seventh Circuit is not only a brilliant judge, writer and law professor, but a master of (among many other things) arbitration law. He understands better than most judges how commercial arbitration is supposed to work, what the Federal Arbitration Act is supposed to achieve, and how to implement the Act to ensure the parties get not only what they bargained for, but also the potential to realize the benefits that private, voluntary dispute resolution can offer. His arbitration-law opinions are clearly written, imbued with common and commercial sense, and seem purposely designed to make sometimes elusive concepts readily understandable to courts, arbitrators, parties and counsel. They tend to ensure that the objective, reasonable expectations of the parties are enforced, not frustrated. Continue Reading »
Archive for the ‘Evident Partiality’ Category
Arbitration Nuts & Bolts: Vacating Arbitration Awards – Part III.B: Evident Partiality (Enforcing the Parties’ Expectations of Neutrality)
January 12th, 2010 Awards, Evident Partiality, Nuts & Bolts, Nuts & Bolts: Arbitration, Practice and Procedure 3 Comments »Introduction
Part III.A of the evident partiality segment of this series discussed the parties’ reasonable expectations of neutrality. Today we consider how those expectations are enforced.
“Evident partiality” challenges typically arise out of one of two scenarios. First, there are “presumed bias” cases in which the arbitrator’s relationship to the parties or the controversy would lead a reasonable person to conclude that the arbitrator was biased, even though the challenger cannot prove actual bias. Second, there are evident partiality challenges based on allegations of actual bias. For example, suppose a neutral said on the record during the proceedings prior to deliberations: “Party A, frankly I have distrusted your company’s business motives for many years, but hearing your witnesses’ testimony has simply confirmed what I’ve suspected all along.” While the chances of an arbitrator making such a statement (let alone on the record) are exceedingly slim to non-existent, it would provide the basis for an evident partiality challenge (which would probably succeed) based on proof of actual bias.
The difference between “presumed” and “actual” bias is simply one of proof. One is based on circumstantial evidence and the other on direct evidence. Our focus will be on “presumed bias” cases, because they arise with greater frequency. Actual bias is very difficult to prove, and if it or something approaching it can be established, then that proof would in any (or most any) event meet the standards necessary to establish evident partiality. Continue Reading »
Arbitration Nuts & Bolts: Vacating Arbitration Awards – Part III.A: Evident Partiality (Expectations of the Parties)
January 4th, 2010 Awards, Evident Partiality, Grounds for Vacatur, Nuts & Bolts, Nuts & Bolts: Arbitration, Practice and Procedure 5 Comments »Introduction
In this Part III of our Nuts & Bolts feature on vacating arbitration awards (Parts I and II here and here) we consider the second statutory ground for vacating an award under the Federal Arbitration Act: “where there was evident partiality…in the arbitrators…” 9 U.S.C. 10(a)(2). What constitutes “evident partiality” or arbitral bias has been the subject of numerous judicial decisions setting forth various standards and applying them to a wide range of fact patterns. The decisions are not easy to reconcile (some may, indeed, be irreconciliable) and generally the standards are of limited utility in practice. Matters are complicated by judicially-created rules concerning disclosure of potential conflicts of interest and the consequences that may or may not flow from a breach of those rules. To say “evident partiality” is an elusive subject understates the case. Continue Reading »
