It contended that federal subject matter jurisdiction under the New York Convention was strictly limited to actions to compel arbitration, enforce or vacate awards, stay an arbitration, or obtain preliminary relief in aid of arbitration. The team simultaneously moved to dismiss the petition to disqualify the arbitrator, principally on three grounds: (i) a United States court has no authority to consider a claim of arbitrator bias before issuance of a final award (ii) a court in the United States has no jurisdiction to remove an arbitrator in a Bermuda-seated arbitration and (iii) even if the court had the power to consider the allegations of the petition, the facts alleged did not state a cognizable claim of bias under either Bermuda or New York law.įor its part, Endurance moved to remand the case back to state court for lack of federal jurisdiction over its petition. Chapter 2 of the Federal Arbitration Act incorporates the New York Convention into federal law and provides for federal question jurisdiction over all proceedings “falling under” the New York Convention. District Court for the Southern District of New York based on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”). The Chaffetz Lindsey team removed the state court petition to the U.S. After the ICC Court rejected Endurance’s petition to disqualify, Endurance filed the same objections in a petition in New York State court. Endurance further contended that the ICC had tainted the appointment by sharing with the arbitrators the parties’ submissions in the ICC appointment process. Endurance contended that the ICC-appointed arbitrator would be biased against it, because those submissions showed that the Chaffetz Lindsey clients preferred an arbitrator with qualifications similar to those of the person appointed, while Endurance had urged the ICC to pick someone with a different profile. Pursuant to the governing arbitration clause, the parties asked the ICC Court of International Arbitration to appoint the presiding arbitrator. However, Endurance subsequently objected that the person whom the ICC Court appointed was biased against Endurance’s counsel based on experience in a prior, unrelated arbitration. (“Endurance”), a Sompo International affiliate. The firm’s clients were two Bermuda entities in a Bermuda-seated Arbitration against Endurance Specialty Insurance Ltd. It also reinforces the high standards that apply when a party challenges an arbitrator for bias. July 2023 – Chaffetz Lindsey recently won a victory in federal court in Manhattan in a case that clarifies both the broad subject matter jurisdiction of federal courts over disputes arising from international arbitrations and, at the same time, the narrow scope of their supervisory power.
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