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Posts Tagged ‘Arbitration Award Practice Blog’

New Arbitration Award Practice Blog Posts on Arbitrators Exceeding their Powers under the Federal Arbitration Act

December 27th, 2014 Arbitrability, Arbitration and Mediation FAQs, Arbitration as a Matter of Consent, Arbitration Practice and Procedure, Grounds for Vacatur, Loree & Loree Arbitration-Law Blogs, Small Business B-2-B Arbitration Comments Off on New Arbitration Award Practice Blog Posts on Arbitrators Exceeding their Powers under the Federal Arbitration Act

We’ve posted in the Arbitration Award Practice Blog the first two posts of a series concerning arbitrators exceeding their powers under  the Federal Arbitration Act in circumstances where they make awards against persons who are not parties to the pre-dispute arbitration agreement that precipitated the arbitration:

  1. Do Arbitrators Exceed their Powers by Imposing Liability on Corporate Officers who were not Parties to the Arbitration Agreement?
  2. Do Arbitrators Exceed their Powers by Imposing Liability on Corporate Officers who were not Parties to the Arbitration Agreement?—Part II

These posts are designed to illustrate to persons learning about arbitration law basics a point that more experienced practitioners know all-too-well: arbitration law can be counterintutive, and even its relatively straightforward general rules or principles do not apply to all factual scenarios.

For example, under the Federal Arbitration Act the answer to question posed by the articles: “it depends.” If a corporate officer participated in the arbitration solely as a party representative; nobody demanded, requested, argued or suggested that the corporate officer should have been deemed a party; and the corporate officer did not request in his individual capacity relief from the arbitration panel, then the arbitrators would be exceeding their powers were they to make an award against the corporate officer.

But as a general rule, arbitrators do not, on their own motion, award relief to or impose liability on persons who are not parties to the arbitration agreement. But see NCR Corp. v. Sac-Co., Inc., 43 F. 3d 1076,  1080 (6th Cir. 1995) (arbitrator ordered punitive damages to non-parties even though neither party requested such relief). While arbitrators occasionally do render awards granting relief to or against arbitration agreement nonsignatories, usually that occurs only when someone has requested such relief.

That’s what happened, for example, in Stone v. Theatrical Investment Corp., No. 14 Civ. 6494 (PAE), slip op. at 1, 8-9 (S.D.N.Y. Dec. 2, 2014). Stone was a contract dispute between two parties A, a trust, represented by its trustee, and B, a corporation. A demanded arbitration against B under the contract’s pre-dispute arbitration agreement, but also demanded arbitration against B’s CEO, asserting that the arbitrator should pierce the corporate veil and hold the CEO jointly and severally liable for the corporation’s alleged breach of contract. The CEO participated in the arbitration as a party representative for B, but never informed the arbitrator that it objected to her jurisdiction to award relief to him. In addition, the CEO requested the arbitrator to grant him relief in his individual capacity.

Not surprisingly, the general rule did not apply in Stone, a point we discuss briefly in the second of the two Arbitration Award Practice Blog posts. In fact it seems odd that the CEO moved to  vacate the award against it on the ground that he did not agree to arbitrate the dispute. It suggests (but certainly does not establish) that perhaps the CEO thought he could make the argument he did despite the arbitration strategy he chose to purse. We do not know whether that is so, however, and there might be other reasons why the CEO opted to pursue that strategy.

Assuming that the CEO did not wish to arbitrate the veil-piercing claim there was much he could have done to ensure a judicial determination of that matter. And that’s something we’ll address in a future post in the Arbitration Award Practice Blog.

 

The Loree Law Firm Launches Arbitration Award Enforcement Practice Website and Arbitration Award Practice Blog, which will focus on Federal Arbitration Act Arbitration Award Enforcement

December 17th, 2014 Awards, Loree & Loree Arbitration-Law Blogs Comments Off on The Loree Law Firm Launches Arbitration Award Enforcement Practice Website and Arbitration Award Practice Blog, which will focus on Federal Arbitration Act Arbitration Award Enforcement

Last week Loree & Loree launched its Arbitration Award Enforcement Practice Website, which is designed to highlight the award enforcement and challenge services we offer as part of our arbitration and arbitration law practice (referred to in our website as our Arbitration Law, Practice & Procedure practice, but what’s in a name?). As part and parcel of that, the website also provides what we hope will be some useful general information about the Federal Arbitration Act and proceedings to confirm, vacate, modify or correct arbitration awards.

We used a WordPress platform to create, and continue to use it to maintain, the site, and WordPress makes it pretty easy to make a blog part of the site, so we of course could not resist the opportunity to create a blog that is limited to the limited subject matter of the site itself: Federal Arbitration Act and state arbitration law award enforcement practice, a topic we’ve blogged a lot out about here at the Forum since 2009. The new blog is the Arbitration Award Practice Blog. Continue Reading »