Tuesday, August 03, 2004
The Second Circuit agreed. While the Court agreed that where an arbitrator hid a conflict, such action might suggest evident partiality so as to warrant vacatur. But that rule must be applied on a case by case basis. Where the arbitrator made the disclosure, even though the AAA did not follow through, no presumption of bias can be made. And requiring vacatur whenever a disclosure was accidently not made would run counter to the policy of encouraging and supporting arbitration. The Court also noted that Tatung knew of the policy of providing disclosures, yet it never asked about the missing disclosure until after it lost.
The Court further agreed with the District Court that the joint ownership of an airplane by two of the arbitrators, which ended over a decade ago, was too insubstantial to warrant vacatur of the award.
Finally, the Court agreed with the District Court that the fact that an arbitrator served as a litigation consultant for Lucent in an unrelated case did not warrant vacatur. The arbitrator's relationship had materially ended before Lucent appointed him an arbitrator.
Tatung had asked the Second Circuit for leave to take discovery regarding the conflict if it did not vacate the award. Becasue Tatung had not sought that relief from the District Court, the Second Circuit declined to do so.
The decision in Lucent Technologies Inc. v. Tatung Co. can be found here.