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In confirming an arbitration award, a federal district court in Texas held that a party waived any objection to arbitrability by voluntarily participating in arbitration.
In Garner v. MBNA America Bank, N.A., No. 3:05-cv-1029-R, 2006 WL 2354939 (N.D. Tex. Aug. 14, 2006), MBNA initiated arbitration to resolve a billing dispute with Garner. The arbitrator awarded MBNA $23,777.69 plus interest. Garner moved to vacate the award, arguing that he never agreed to arbitrate any dispute with MBNA.
The Court held that Garner waived any right to object to the arbitrability of the dispute by voluntarily submitting to and participating at arbitration. In reaching this holding, the Court noted that a motion to stay arbitration would have been the proper procedure for challenging the arbitrability of the dispute. The Court also noted that Garner failed to preserve any objection by formally objecting during the arbitration.
As the Court observed, it would have been “unfair to MBNA” to allow Garner to challenge the arbitrability of the dispute and give him “a second bite at the apple after he took his chances at arbitration.” Accordingly, the Court confirmed the award.
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