Review of Court Decisions - Dispute Resolution Journal - Vol. 45, No. 2
Originally from Dispute Resolution Journal
SECURITIES- FAILURE TO DISCLOSE-EVIDENT PARTIALITY-VACATUR OF AWARD- DAMAGES- AMOUNT OF AWARD- IRRATIONAL DETERMINATION OF AWARD- BURDEN OF PROOF
Failure to disclose a past association that has long since been severed is insufficient to vacate an arbitration award on grounds of evident partiality. In addition, the size of an award is neither a sufficient basis for a finding of partiality nor a statutory ground for vacating an arbitration award.
Marjory Kaye opened an investment account with Dean Witter Reynolds. She subsequently filed an action against Dean Witter for mismanagement of her account. This action was stayed pending arbitration. An arbitration award was rendered in Kaye's favor, and she moved to confirm. Dean Witter countered with a motion to vacate, alleging evident partiality by the arbitrator and that the amount of the award was determined irrationally.
The court denied Dean Witter's request for an evidentiary hearing, finding that Dean Witter failed to sustain its burden of proof on the issue of evident partiality. It also rejected Dean Witter's complaint of arbitrator corruption, which Dean Witter had based on the arbitrator's failure to disclose a past association with another securities company.