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Keywords

jurisdictionarbitrationappealburden of proofarbitratormarine insurance

arbitrationarbitrator

Related Cases

Scandinavian Reinsurance Co. Ltd. v. Saint Paul Fire and Marine Ins. Co., 668 F.3d 60, 2012 A.M.C. 928

Facts

Scandinavian Reinsurance Company Limited and St. Paul Fire & Marine Insurance Company entered into a stop-loss retrocessional agreement in 1999. Disputes arose regarding the interpretation of the agreement, leading St. Paul to demand arbitration in 2007. The arbitration panel, which included two arbitrators who failed to disclose their concurrent service in another arbitration, ruled in favor of St. Paul. Scandinavian later petitioned to vacate the arbitration award, claiming evident partiality due to the nondisclosure.

Issue

Whether the failure of two arbitrators to disclose their concurrent service as arbitrators in another, arguably similar, arbitration constitutes 'evident partiality' within the meaning of the Federal Arbitration Act.

Rule

Evident partiality under the Federal Arbitration Act (FAA) is found only when a reasonable person would conclude that an arbitrator was biased towards one party. The FAA does not grant subject matter jurisdiction to federal courts without an independent basis. Courts review arbitration awards under the FAA with a limited scope, focusing on evident partiality and not allowing for de novo review.

Analysis

The court analyzed the circumstances surrounding the arbitrators' nondisclosure of their concurrent service. It determined that the mere fact of overlapping service did not imply bias, as there was no evidence suggesting that the arbitrators were predisposed to favor one party. The court emphasized that the burden of proving evident partiality lies with the party asserting bias and that the nondisclosure must indicate a material conflict of interest.

We conclude that, under the circumstances of this case, the fact of Dassenko's and Gentile's overlapping service as arbitrators in both the Platinum Arbitration and the St. Paul Arbitration does not, in itself, suggest that they were predisposed to rule in any particular way in the St. Paul Arbitration. As a result, their failure to disclose that concurrent service is not indicative of evident partiality.

Conclusion

The Court of Appeals reversed the district court's decision, holding that the failure to disclose concurrent service did not constitute evident partiality under the FAA.

We therefore reverse and remand with instructions to the district court to confirm the award.

Who won?

The prevailing party in this case is St. Paul Fire & Marine Insurance Company. The Court of Appeals found that the nondisclosure of concurrent service by the arbitrators did not meet the threshold for evident partiality, thus upholding the arbitration award in favor of St. Paul. The court emphasized that the circumstances did not suggest bias and that the burden of proof for evident partiality was not met by Scandinavian.

The court concluded that 'taken together, these factors indicate that Dassenko and Gentile's simultaneous service as arbitrators' in the two proceedings 'constituted a material conflict of interest.'

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