COURT ALLOWS REPLACEMENT OF APPOINTED ARBITRATOR, REFUSES TO DISQUALIFY UMPIRE CANDIDATE FOR ALLEGED IMPARTIALITY
In a dispute concerning approximately $250 million in coverage obligations under two reinsurance policies issued by National Indemnity Company (“NICO”), IRB-Brasil Resseguros, S.A. (“IRB”) filed a motion to prohibit NICO from changing its party-appointed arbitrator two-years after appointment, and to stay the second of two pending arbitrations until the arbitrators in the first proceeding decided IRB’s motion to consolidate. The federal district court denied IRB’s request to bar NICO from replacing its appointed arbitrator, reasoning that a party is entitled to an arbitrator of its choice to act as a “de facto advocate for its position” and, furthermore, that, notwithstanding the passage of two-years, no action had been taken in the arbitration because a panel had never been fully constituted. The court granted the motion to stay that later-filed arbitration pending the arbitrators’ decision on the motion to consolidate. The court also denied a motion by NICO to disqualify IRB’s neutral umpire candidate due to alleged impartiality, finding that such challenges cannot be brought under the FAA until after an award is rendered. IRB-Brasil Resseguros, S.A. v. National Indem. Co., Case No. 11-1965 (USDC S.D.N.Y. Nov. 29, 2011).
This post written by Ben Seessel.
See our disclaimer.
