Reinsurance Focus

In Adam Tech., the Court of Appeals for the Fifth Circuit affirmed the denial of a motion to appoint an arbitrator. The court held that there had been no “lapse in the naming of an arbitrator” under FAA Section 5, deciding rather that it was Adam’ Tech.’s failure to comply with the International Center for Dispute Resolution’s rules that prompted the ICDR to appoint an arbitrator against Adam Tech.’s objection. The court also held that the challenge to the ICDR’s rules was a procedural question left for the arbitrators to decide under the Supreme Court’s Howsam decision and that Adam Tech.’s challenge to the appointment was premature because it was filed before a final award had been rendered. Adam Tech. Int’l, S.A. v. Sutherland Global Servs., Inc., No. 12-10760 (5th Cir. Sept. 5, 2013).

Joyce Green had entered into an agreement in 2012 with U.S. Cash Advance Court requiring disputes to be resolved through arbitration under the Code of Procedure of the National Arbitration Forum. The NAF, however, has not been accepting new consumer cases since 2009, following a settlement with the Minnesota Attorney General. The district court refused to appoint an arbitrator under FAA Section 5, holding that the selection of NAF was “integral” to the agreement. The Court of Appeals for the Seventh Circuit disagreed. The appellate court first pointed out that the agreement did not require appointment of a NAF arbitrator but only the use of the NAF Code of Procedure. It further held that the identity of the arbitrator was not so important as to vitiate the whole contract and ordered the district court to appoint an arbitrator to adjudicate the dispute under the NAF Code of Procedure. A dissenting judge sharply disagreed, opining that the majority was re-writing the terms of the parties’ contract. Green v. U.S. Cash Advance Ill., LLC, No. 13-1262 (7th Cir. July 30, 2013).

In PK Time Group, LLC, a federal district court denied a petition to remove a panel of arbitrators. Petitioner PK Time sought removal of the arbitrators after liability had been decided in favor of the opposing party, Cinette Robert, but before the issue of damages had been decided. PK Time argued that the arbitrators had demonstrated bias and had committed misconduct by speaking at a conference at which Cinette Robert’s expert also spoke, and that was sponsored by the company that employed the expert, and by making improper discovery rulings. The court dismissed the petition as an improper pre-award challenge that also failed to demonstrate arbitrator bias. PK Time Group, LLC v. Cinette Robert, Case No. 1:12-cv-08200 (USDC S.D.N.Y. July 13 2013).

This post written by Ben Seessel.

See our disclaimer.