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An Indiana federal district court confirmed an arbitration award despite objections from the losing party that the arbitrator committed misconduct in failing to grant a request for a third continuance.
In Twist v. Arbusto, No. 4:05-CV-187-SEB-WGH, 2008 WL 3982365 (S.D. Ind. Aug. 22, 2008), Twist and Arbusto were investment entities that entered into various contracts to purchase oil and gas securities. All of the executed contracts contained an agreement to arbitrate. After a dispute, the parties submitted a joint demand for arbitration and selected an arbitrator.
Following, Twist moved for a continuance because its managing partner was scheduled to undergo hip replacement surgery at the same time as the arbitration proceedings. Instead of continuing the arbitration, the arbitrator advanced the hearing date. However, immediately prior to the hearing Twist's attorney had a heart attack and Twist requested another continuance, which the arbitrator granted.
Twist requested a third continuance when the rescheduled arbitration date happened to be days prior to Twist's managing partner's hip surgery. The arbitrator denied Twist's third request, but noted that the partner could participate by video or teleconference if he was unable to attend in person. Twist's managing partner did not attend the arbitration in person or otherwise.
After reviewing the evidence and arguments, the arbitrator made an award in favor of Arbusto. Arbusto moved to confirm the arbitration award and Twist filed a motion to vacate the award. Twist argued that the arbitrator committed misconduct in failing to grant the third continuance request.
The Court noted that when a reasonable basis exists for an arbitrator's determination not to grant a continuance, the court will be reluctant to vacate an award on the ground of arbitrator misconduct. Further, the arbitrator's determination will not be opened up to evidentiary review unless fundamental fairness has been violated.
The Court concluded that the arbitrator's determination was reasonable. When the second arbitration hearing date was set, Twist did not raise an objection due the conflict with the surgery. Instead, Twist waited over a month to raise an objection. The Court also noted that while hip replacement surgery is serious, Twist never alleged or produced evidence that indicated that the partner was facing a life threatening condition that required immediate attention.
Further, the Court determined that Twist was not unfairly prejudiced by the partner's absence at the arbitration proceedings. Twist did not present any evidence that the arbitrator's alleged misconduct affected the outcome of the proceedings. Twist was represented by counsel and the arbitrator heard testimony from Twist's vice president and six former employees. The arbitrator also admitted and reviewed all of Twist's submitted documentary evidence.
The Court determined that the arbitrator's decision not to grant the third continuance did not constitute arbitrator misconduct or preclude Twist from fair arbitration proceedings. Accordingly, the Court confirmed the arbitration award in favor of Arbusto.
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