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Once parties agree to arbitrate under the NASD code of arbitration procedure, NASD notice rules trump statutory notice provisions, a Texas appellate court held.
In Ying Chun Tan v. Hung Pin Lee, No. CV2005-146, 2007 WL 582084 (Tex. Ct. App. Feb. 27, 2007), Hung Pin Lee filed an action against Ying Chun Tan and others with the National Association of Securities Dealers ("NASD"). All parties had agreed to use of the NASD code of arbitration procedure. Tan did not appear at the arbitration proceeding and an award was issued in favor of Lee. Lee moved to confirm the award.
The Court rejected Tan's argument that she had not received notice, required by the Texas Arbitration Act ("TAA"). The Court held that TAA was not applicable because Tan had agreed to use of the NASD code of arbitration procedure.
The Court further held that Tan received proper notice under the NASD code. The arbitrators found in the award that Tan had received sufficient notice and the court deferred to their finding. See Brozo v. Shearson Lehman, Hutton, Inc., 865 S.W.2d 509, 511 (Tex. Ct. App. 1993).
Tan participated in three phone conferences held prior to arbitration hearing in which the arbitrators determined notice would be sent by regular mail. A letter was sent by the arbitrators notifying Tan of the date of the arbitration hearing. It was not returned as undeliverable. Tan had moved and admitted she did not inform the arbitrators or the NASD of her new address.
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