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Under the Federal Arbitration Act, the fact that a party's attorney and an arbitrator previously appeared in cases together does not create a conflict of interest sufficient to vacate an arbitration award when the party seeking the vacatur knew about the relationship prior to the arbitration and failed to object, a federal court in Michigan held.
In Uhl v. Komatsu Forklift Co., Ltd., No. 04-10148, 2006 WL 3751388 (E.D. Mich. Dec. 8, 2006), a three-member arbitration panel issued an award in Uhl's favor in a wrongful death proceeding.
When Uhl petitioned the court to confirm the award, Komatsu argued that the award should be vacated because a relationship between one of the arbitrators, Stein, and the attorney for an intervening plaintiff, Johnson, was not disclosed.
Stein and Johnson had previously appeared together in cases, with Stein representing the victim in product liability cases and Johnson representing a worker's compensation carrier that intervened to attempt to recover worker's compensation payments from the alleged tortfeasor.
Komatsu argued that Stein's failure to disclose this relationship resulted in the arbitration award being procured by fraud and showed evident partiality toward the plaintiff. However, the Court disagreed and confirmed the arbitration award.
The Court pointed out that Komatsu presented insufficient evidence to show that the relationship between Stein and Johnson created an actual conflict of interest. Additionally, the Court noted that Komatsu was aware of the relationship between Stein and Johnson before the arbitration proceedings, yet failed to object to Stein arbitrating the dispute until after the award in Uhl's favor was issued.
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