|
Arbitrators are not guilty of misconduct when they proceed with a hearing despite the fact that a party filed a motion to stay the arbitration in court because a previous court order directed that all motions to the stay the proceedings should be directed to the arbitrators, a federal court in California held.
In In re Betta Products, Inc., Nos. 03-10925, 05-1046, 2007 WL 521211 (Bankr. N.D. Cal. Feb. 15, 2007), Betta brought an action against Distribution Systems and Services, Inc. (DSS), alleging breach of contract and conversion.
The Court ordered all claims to arbitration, and also ordered that any motions to stay the arbitration proceedings should be directed to the arbitrators. However, Betta failed a motion to stay the arbitration hearing in court and failed to appear at the arbitration proceeding. The arbitrators issued an award in DSS's favor.
Betta asked the Court to vacate the award, arguing that the arbitrators committed misconduct by not postponing the hearing at Betta's request. However, the Court found no grounds for vacatur and confirmed the award. Betta was not entitled to a stay of the hearing just because it asked for one.
Additionally, the Court pointed out that Betta was in its current situation because it failed to understand the role of the court once the dispute was sent to arbitration, despite the fact that the court made it clear that everything about the dispute was to be resolved by the arbitrators.
"Betta seems to believe that the court retained or reserved the power to dismiss the dispute, as if the arbitrators were special masters or the arbitration was some sort of court-ordered mediation. However, the court's order made it clear that the entire dispute was in the hands of the arbitrators, and that proceedings in this court were stayed pending the arbitrators' decision."
Subscribe to a free weekly update on ADR case law and
legislation
|