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The fact that an award is entered and sent to the arbitrating parties during a court-ordered stay of arbitration pending an extraordinary appeal of a previous court order compelling arbitration does not render the award void and unenforceable, according to the Court of Appeals of Tennessee.
In Diagnostic Center v. Steven B. Stubblefield, M.D., P.C., No. E2005-02662-COA-R3CV, 2006 WL 2872466 (Tenn. Ct. App. Oct 10, 2006), Stubblefield, a cardiologist, dissociated from his partnership with Diagnostic Center (Diagnostic). Stubblefield subsequently began a solo practice allegedly in violation of the covenant not to compete contained in the Diagnostic partnership agreement.
Diagnostic obtained an order to compel arbitration and stay litigation. An interlocutory appeal followed, which resulted in the court ordering the parties to proceed with arbitration, and an award was issued in favor of Diagnostic.
After Stubblefield’s application for extraordinary appeal was rejected, Diagnostic sought to confirm the award. Stubblefield argued that the award was “void and unenforceable” because it was transmitted to the parties during the stay ordered by the Court of Appeals.
The Court rejected this argument, stating that the mere fact “that the award was simply transmitted to the parties during the stay … does not render it void.” Indeed, the trial court “did not act upon the award during the stay” and there was no evidence that the arbitrator was aware that a stay had been issued.
The Court confirmed the award and assessed costs of the appeal to Stubblefield.
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