4.01 Disqualification of Arbitrators: Evident Partiality and Related Grounds
Star Ins. Co. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 656 Fed. Appx. 240 (6th Cir. 2016)
Under Michigan Law, ex parte communications between a party and arbitrator that has been expressly prohibited by agreement of the parties will void the arbitral award, even absent a showing of prejudice.
Star sought to vacate an award on grounds of misconduct: specifically, ex parte communications by National with its party-appointed arbitrator during the course of the arbitration. The district court confirmed the award, denied a request to conduct discovery, and confirmed the award.
The Sixth Circuit ruled that the ex parte contacts voided the arbitration award. The arbitration was governed by Michigan law to the effect that a court will vacate an award if an arbitrator engages in “misconduct prejudicing a party’s rights”. The ex parte contacts clearly satisfied this rule: the parties expressly agreed to terminate ex parte communications with the Arbitration Panel after filing pre-hearing briefs. The Court also ruled that no showing of prejudice requirement, just that the ex parte communications happened.
Citations and References
a. Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Trust, 729 F.3d 99 (2d Cir. 2013) (holding that the arbitrator’s conduct did not reach the threshold to warrant vacatur when he talked to a non-party about his opinion before the final decision, scheduled a meeting when the movant’s chosen arbitrator was unavailable, and heard only one witness).