Opinion
1:99CV00334
April 19, 2002
MEMORANDUM OPINION and ORDER
The parties to this case stand poised to begin a second round of arbitration in an attempt to bring final resolution to their conflict. The first arbitration, resulting in an award confirmed in part and modified in part on October 29, 2001, did not achieve this end, in part because this court had identified and set apart several claims as non-arbitrable. Following the arbitration, however, the Fourth Circuit reversed this court's ruling, finding that all of the parties' claims were indeed subject to arbitration.
On August 8, 2001, the court entered a stay of all proceedings pending further arbitration, reiterating that instruction in its October 29, 2001 order. Accordingly, both Plaintiffs and Defendant proceeded to select arbitrators to serve on the second arbitration panel. Plaintiffs designated Mr. Caleb Fowler, and Defendant in turn chose Mr. Robert Green. Plaintiffs immediately objected, noting that Mr. Green had served as Trygg-Hansa's party-appointed arbitrator in the first arbitration proceeding. Defendant, however, stood by its choice.
Plaintiffs have now moved the court to disqualify Mr. Green, alleging that he is not an unbiased and disinterested arbitrator by virtue of his involvement in the first arbitration. The gravamen of Plaintiffs' complaint concerns the modification made by the court to the first arbitration panel's final award. As indicated in its order dated October 29, 2001, the court determined that one sentence of the arbitration award improperly addressed those matters which were not before the panel, and therefore struck that language from the award. The award was confirmed in all other respects. Plaintiffs claim that Mr. Green, as a member of the "tainted" panel that considered improper evidence, is no longer a disinterested party. Plaintiffs also base their request on the appearance of bias that Mr. Green's presence would, in their opinion, bring to the panel.
After careful consideration of this matter, the court has reached the conclusion that it lacks authority to review Mr. Green's qualifications before the second arbitration panel has issued an award. Neither the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq., nor the Convention on the Recognition and Enforcement of Foreign Arbitration Awards (the "Convention Act"), 9 U.S.C. § 201, et seq., contains any provision for judicial review of an arbitrator's qualifications prior to the issuance of an award. Moreover, the majority of courts that have evaluated the issue have concluded that such scrutiny only may occur in a proceeding to confirm or vacate an award. See Florasynth, Inc. v. Pickholz, 750 F.2d 171, 174 (2d Cir. 1984); see also Michaels v. Mariforum Shipping, S.A., 624 F.2d 411, 414 n. 4 (2d Cir. 1980) ("[I]t is well established that a district court cannot entertain an attack upon the qualifications or partiality of arbitrators until after the conclusion of the arbitration and the rendition of an award"); Marc Rich Co. v. Transmarine Seaways Corp. of Monrovia, 443 F. Supp. 386, 387 n. 3 (S.D.N.Y. 1978) (same) Accord Crim v. Pepperidge Farm, Inc., 32 F. Supp.2d 326, 330 (D. Md. 1999) (observing that pre-award challenges would open "floodgates to litigation").
The award issued by the first arbitration panel is not at issue here and cannot serve as the basis for the present challenge to Mr. Green.
Plaintiffs have identified several cases in which pre-award scrutiny of an arbitrator was allowed. However, in each of those cases, a specific arbitrator had been named in the agreement itself. Any challenge to an arbitrator so named would thus be a matter of reformation, under general principles of contract law. See Aviall, Inc. v. Ryder Sys., Inc., 110 F.3d 892, 895-96 (2d Cir. 1997) (collecting cases). Because the agreement at issue here did not specifically designate an arbitrator but left that choice to the parties, a challenge grounded in contract principles would be unavailable in the present case.
Plaintiffs also rely on Metropolitan Prop. Cas. Ins. Co. v. J.C. Penney Cas. Ins. Co., 780 F. Supp. 885 (D. Conn. 1991) (attempting to distinguish Florasynth, Michaels, and Marc Rich). The court inMetropolitan, however, relied heavily on practical considerations, stating that it was a "virtual certainty" that the plaintiff would seek to vacate any award in which the challenged arbitrator had participated; therefore, it would be "just" and "expeditious" to settle the question before the arbitration had commenced rather than forcing the parties into a "prolonged, costly proceeding." 780 F. Supp. at 894. While such an approach may indeed save resources, it is supported by neither the text of the FAA or the Convention Act, nor federal case law.
Moreover, the arbitrator in Metropolitan stood accused of "overt arbitrator misconduct," including ex parte meetings with the defendant prior to the arbitration, which constituted a violation of the terms of the parties' agreement. The allegations here — namely, that Mr. Green heard evidence that was outside the scope of the first arbitration and may have formed opinions regarding that evidence — pale in comparison, especially because the very goal of the second arbitration is to consider those matters which were erroneously excluded from the first arbitration.
Therefore, having determined that Plaintiffs have articulated no basis upon which the court may disqualify Mr. Green,
IT IS HEREBY ORDERED that Plaintiffs' Motion to Disqualify Robert Green as Arbitrator [117] is DENIED.