{"id":899118,"date":"2021-09-08T15:26:40","date_gmt":"2021-09-08T21:26:40","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=899118"},"modified":"2021-09-08T15:26:46","modified_gmt":"2021-09-08T21:26:46","slug":"arbitrator-qualifications-dispute","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-qualifications-dispute\/","title":{"rendered":"Disputes Over Arbitrator Qualifications: The Northern District of California Offers Some Guidance"},"content":{"rendered":"\n<p>Justin K. Fortescue | <a href=\"https:\/\/www.whiteandwilliams.com\/resources-alerts-Disputes-Over-Arbitrator-Qualifications-The-Northern-District-of-California-Offers-Some-Guidance.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">White &amp; Williams<\/a><\/p>\n\n\n\n<p>The selection of an <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/its-not-over-until-the-panel-sings\/\" target=\"_blank\" rel=\"noreferrer noopener\">arbitration panel<\/a> can often lead to disputes between the parties regarding things like whether a particular candidate is qualified, whether a challenge to an arbitrator\u2019s qualifications can be addressed pre-award and whether a party that names an unqualified arbitrator should lose the opportunity to name a replacement. In\u00a0<em>Public Risk Innovations v. Amtrust Financial Services<\/em>, No. 21-cv-03573, 2021 U.S. Dist. LEXIS 129464 (N.D. Ca. July 12, 2021), the court provided answers on all three of these issues.<\/p>\n\n\n\n<p>In&nbsp;<em>Amtrust<\/em>, the parties filed cross-motions to compel arbitration. Although both parties agreed the dispute was arbitrable, they disagreed about whether Public Risk Innovations, Solutions and Management\u2019s (PRISM) arbitrator was qualified under the terms of the applicable contract. In seeking to have PRISM\u2019s arbitrator disqualified, Amtrust argued that he: (1) was not a \u201ccurrent or former official of an insurance or reinsurance company\u201d; and (2) was not \u201cdisinterested.\u201d Amtrust also argued that because PRISM named an unqualified arbitrator (and presumably the time to appoint had passed), PRISM should be deemed to have failed to select an arbitrator as required by the contract and that Amtrust had the right to select a second arbitrator of its choice.<\/p>\n\n\n\n<p>In evaluating the issues, the court first recognized the general proposition that a court cannot entertain an attack on an arbitrator\u2019s qualifications until after a final award has been issued. However, because the parties both agreed that the court should decide the issue upfront, rather than waiting until after the arbitration, the court proceeded to evaluate the qualifications of PRISM\u2019s arbitrator.<\/p>\n\n\n\n<p>With respect to Amtrust\u2019s first argument, that the arbitrator was not a \u201ccurrent or former official of an insurance or reinsurance company,\u201d the court noted that the arbitrator had been \u201cgeneral counsel to numerous joint powers authorities and self-insurance joint powers authorities and risk pools.\u201d<a href=\"https:\/\/www.whiteandwilliams.com\/resources-alerts-Disputes-Over-Arbitrator-Qualifications-The-Northern-District-of-California-Offers-Some-Guidance.html#_ftn1\">[1]<\/a>&nbsp;While recognizing that some courts have held that self-insurance does not mean the same thing as insurance, the court held the arbitrator\u2019s experience at JPAs satisfied the requirement of the contract at issue. In support, the court noted that the parties\u2019 contract indicated the word \u201cinsurance\u201d should be interpreted broadly since the contract referred to PRISM as a company even though it was a public entity. The court also noted that \u201ca more generous interpretation of insurance\u201d would be consistent with the specific process that the parties agreed to for selection of the arbitration panel \u2013&nbsp;<em>i.e.<\/em>, that the whole point of the selection process was to allow each side to pick an arbitrator representative of its general interests and then have those arbitrators pick the third neutral.<\/p>\n\n\n\n<p>As to Amtrust\u2019s second argument, that PRISM\u2019s arbitrator was not disinterested, the court agreed and held that he was not qualified to serve. In finding the arbitrator was not disinterested, the court held that the arbitrator \u201ccould feel some pressure to take positions favorable to PRISM\u201d since he was currently an official for: (1) entities that have members who are also members of PRISM; and (2) entities that are members of PRISM itself. Notably, the court reached its conclusion despite the fact that there was no indication that the other entities or their members had any direct financial interest in how the parties\u2019 dispute was resolved.<\/p>\n\n\n\n<p>Lastly, although the court found PRISM\u2019s arbitrator was not qualified, the court rejected Amtrust\u2019s argument that PRISM had forfeited its right to name a replacement. In holding Amtrust\u2019s argument was \u201cmeritless,\u201d the court noted that PRISM did not fail to appoint an arbitrator and the fact that PRISM\u2019s arbitrator turned out to be unqualified did not mean PRISM failed to act.<\/p>\n\n\n\n<p>This case is important as it demonstrates that at least some courts will be willing to address disputes over the qualification of arbitrators pre-award, at least where the parties agree the court should do so. The case also provides some insight into how courts will interpret an arbitration provision that requires arbitrators to be a \u201ccurrent or former official of an insurance or reinsurance company.\u201d<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><a href=\"https:\/\/www.whiteandwilliams.com\/resources-alerts-Disputes-Over-Arbitrator-Qualifications-The-Northern-District-of-California-Offers-Some-Guidance.html#_ftnref1\">[1]<\/a>&nbsp;Joint powers authorities (JPAs) are legal entities that allow two or more public agencies to jointly exercise common powers.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Justin K. Fortescue | White &amp; Williams The selection of an arbitration panel can often lead to disputes between the parties regarding things like whether a particular candidate is qualified, whether a challenge to an arbitrator\u2019s qualifications can be addressed pre-award and whether a party that names an unqualified arbitrator should lose the opportunity to&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/arbitrator-qualifications-dispute\/\">Continue reading <span class=\"screen-reader-text\">Disputes Over Arbitrator Qualifications: The Northern District of California Offers Some Guidance<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41],"tags":[9895,9001,10342],"class_list":["post-899118","post","type-post","status-publish","format-standard","hentry","category-arbitration","tag-advise-consult","tag-arbitration-panel","tag-arbitrator","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Disputes Over Arbitrator Qualifications: The Northern District of California Offers Some Guidance - Advise &amp; 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