ORDER VACATING CONFIRMATION OF ARBITRATION AWARD FOR LACK OF JURISDICTION AFFIRMED WHERE DEFENDANT DID NOT APPEAR IN CASE
On December 15, 2010, we reported on Aurum Asset Managers, LLC v. Banco de Estado do Rio Grande do Sul, in which a court vacated its prior confirmation of an arbitration award in favor of Aurum upon independently finding that subject matter jurisdiction was lacking over the case. The appellate court has now affirmed that decision, rejecting the argument that the award could be overturned only if it constituted a “clear usurpation of power.” The court explained that the “clear usurpation” legal standard applies only when jurisdiction has been litigated “such that re-litigation of the issue is barred by principles of res judicata.” Here, the defendant had elected to ignore the judicial proceedings. The lower court did not err by conducting its own jurisdictional analysis, finding that jurisdiction did not exist, and vacating the arbitration award. Aurum Asset Managers, LLC v. Bradesco Companhia de Seguros, No. 10-4281 (3d Cir. Aug. 15, 2011).
This post written by Michael Wolgin.
