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The Supreme Court of Connecticut held that an arbitrator did not exceed his powers by awarding damages for breach of a non-compete agreement where the arbitration agreement excluded proceedings to enforce the non-compete agreement.
In Kelly v. Camillo, No. CV 054004458 S, 2006 WL 2773600 (Conn. Super. Sep. 13, 2006), Dr. Camillo, a dentist, entered into an employment contract with a dentistry corporation, Dorrance T. Kelly, D.D.S., P.C. (“Kelly”), which contained non-compete language and an arbitration agreement which excluded from its scope enforcement of the non-compete terms. After Kelly terminated Camillo’s employment, he continued practicing locally as a dentist in violation of the non-compete agreement. Kelly initiated arbitration seeking damages; Camillo did not appear, and an award was issued in Kelly’s favor.
Camillo did not file a motion to vacate the award. Kelly sought to confirm the award, claiming that because Camillo did not file a motion to vacate the award or to modify it within the appropriate time, the court did not have discretion to review the award. Camillo claimed that, because the arbitration agreement excluded from its scope the enforcement of the non-compete agreement, the arbitrator had exceeded his powers and the arbitral award should be vacated under common law rules of vacatur.
The Court agreed with Kelly and found that, because Camillo did not file a timely motion to vacate or modify the award, the Court “[was] required to confirm the arbitration award and it [could not] vacate the award on any of the statutory grounds listed…”
The Court further reasoned that, even if it were to review the case on its merits, the award would be affirmed. The arbitration agreement only excluded the enforcement of the non-compete agreement from the scope of the arbitration agreement, and the definition of “enforce” implies specific performance. Because the arbitrator awarded money damages as a remedy for the breach of the non-compete agreement instead of injunctive relief, the arbitrator did not exceed the scope of authority granted by the arbitration agreement.
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