Reinsurance Focus

Four recent non-reinsurance opinions have applied accepted principles in the confirmation of arbitration awards:

• A party may not successfully contend that an arbitration award entered pursuant to what is referred to as the “baseball arbitration” process is “manifestly irrational and prejudicial” when the parties agreed to use that process.  The Court also found that a claim that the award was the result of corruption, fraud or undue means failed because the proof of fraud was vague, rather than clear and convincing, and there was no nexus demonstrated between the alleged fraud and the basis for the award.  U.S. Steel Mining Co. v. Wilson Downhole Services, Case No. 02-1758 (USDC W.D. Pa. Oct. 5, 2006)
• An arbitration award was confirmed where a panel granted a Respondent summary judgment, holding that the doctrines of res judicata, collateral estoppel and waiver all precluded the panel from deciding the merits of the Petitioner's claims.  Sherrock Bos., Inc. v. DaimlerChrysler Motors Co., Case No. 06-351 (USDC M.D. Pa. Oct. 12, 2006)
• An arbitration award was confirmed, rejecting a contention that the award failed to draw its essence from the contract at issue, since the arbitrator's award arguably construed the contract.  Appalachian Regional Healthcare v. Ky. Nurses Assoc., Case No. 06-150 (USDC E.D. Ky. Oct. 13, 2006)
• An arbitration award was vacated on the basis that it failed to draw its essence from the underlying contract, where an award contravened express contractual limits on the authority of the arbitrator.  The Court rejected the suggestion that it was merely disagreeing with the award.  Truck Drivers Local Union No. 164 v. Allied Waste Systems, Inc., Case No. 05-73509 (USDC E.D. Mich. Oct. 16, 2006).