Certiorari Denied in Eleventh Circuit Case Finding Lack of Arbitrator Disclosure Did Not Warrant Vacatur
Posted on Categories Arbitration Awards, Arbitrators, Fed Arbitration Act, SCOTUSTags , ,

By George H. Friedman, SAA Publisher & Editor-in-Chief

Certiorari has been denied in Grupo Unidos por el Canal, S.A. v. Autoridad del Canal de Panama, 78 F.4th 1252 (11th Cir. 2023), a case we covered in SAA 2023-34 (Sep. 7) and SAA 2024-10 (Mar. 7).

We borrow from our past reporting. Relying on recently-announced Eleventh Circuit precedent -- that the grounds set forth in FAA section 10 are the sole basis for challenging “foreign” awards under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“UN Convention”), where the arbitration took place in the United States – the Grupo Court had found that the Arbitrators’ alleged lack of complete disclosure did not warrant Award vacatur.

Incomplete Disclosure

We quote liberally from the Opinion, starting with the facts and procedural history: “After Grupo Unidos por el Canal, S.A., received two adverse awards amounting to more than a quarter-billion dollars in an arbitration arising out of its construction work on the Panama Canal, Grupo Unidos sought wide-ranging disclosures from each of the three members of the panel pertaining to possible bias. Each arbitrator disclosed for the first time that he had served on panels in other, unrelated arbitrations in which an arbitrator or counsel involved in Grupo Unidos’s arbitration also participated. Following the disclosures of the new information, Grupo Unidos challenged the impartiality of the arbitrators before the International Court of Arbitration (‘ICA’) of the International Chamber of Commerce. The ICA agreed that some arbitrators failed to make a few disclosures but, notably, did not find any basis for removal and rejected Grupo Unidos’s challenges on the merits. Thereafter, Grupo Unidos moved -- unsuccessfully -- for the vacatur of the awards in the United States District Court for the Southern District of Florida. Autoridad del Canal de Panama, in turn cross-moved for confirmation of the awards, which the district court granted.” And the holding on appeal: “Because we agree with the International Court of Arbitration and the district court that Grupo Unidos has presented nothing that comes near the high threshold required for vacatur, we affirm the denial of vacatur and the confirmation of the awards.”

SCOTUS Review Sought …

The December 2023 Petition in Grupo Unidos por el Canal, S.A. v. Autoridad Del Canal de Panama, No. 23-660, raised these questions: “1. What is the standard for determining whether an arbitrator’s failure to disclose constitutes evident partiality justifying vacatur of the arbitral award under the Federal Arbitration Act, 9 U.S.C. § 10(a)(2)? 2. Whether an arbitrator’s failure to disclose relationships with a party’s counsel or a party-appointed arbitrator constitutes evident partiality.”

… And Denied (As We Predicted)

The Court’s March 25 Order List on page 2 denies Certiorari, as usual without comment. Our editorial comment in no. 10 was spot on: “We don’t see the Court taking up this case. We find that courts are reluctant to second-guess ADR administrators on this issue.”

 

(ed: No surprise here.)