Alim v. KBR (Kellogg, Brown & Root)—Halliburton
331 S.W.3d 178
Tex. App.2011Background
- Arbitration of Alim's claims against KBR under the Halliburton Dispute Resolution Plan governed by the FAA.
- AAA appointed arbitrator Scott Rosuck after the parties struck proposed arbitrators.
- Rosuck answered in his notice of appointment that no party representatives had appeared before him; he asserted a conflicts check had been performed.
- Graves (KBR party representative) previously appeared before Rosuck in a Halliburton matter; Ungerman (KBR counsel) reportedly met Rosuck years earlier in a different case.
- At the hearing start, Rosuck stated he had no vested interest and had no prior relationship with the parties or counsel; he had met Ungerman and Graves previously but claimed no ongoing ties.
- Alim moved to vacate after the award; the trial court denied vacatur and granted KBR's motion to confirm the award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did nondisclosure of prior relationships show evident partiality? | Alim: failure to disclose Graves's prior appearance created partiality. | KBR: prior contact attenuated; not disclosable; waiver possible. | Yes; nondisclosure constitutes evident partiality and vacatur is warranted. |
| Was there waiver of the objection to the arbitrator's partiality? | Alim did not knowingly waive by not objecting at start or during proceedings. | KBR: waiver due to Alim's silence after Rosuck's opening remark. | Waiver not established; objection preserved. |
| Did Rosuck have an ongoing duty to disclose and amend his written appointment? | Alim: Rosuck failed to amend written disclosures despite discovering a prior relation. | KBR: ongoing duty was not properly defined by Rosuck; decisions about conflicts rested with him. | Rosuck's failure to disclose and amend supported vacatur. |
Key Cases Cited
- TUCO v. Burlington Northern R.R., 960 S.W.2d 629 (Tex. 1997) (evident partiality from nondisclosure; objective impression of partiality matters)
- Commonwealth Coatings Corp. v. Continental Cas. Co., 393 U.S. 145 (1968) (nondisclosed information may show partiality)
- Thomas James Assocs., Inc. v. Owens, 1 S.W.3d 315 (Tex. App.-Dallas 1999) (extension of TUCO to FAA arbitrations)
- In re Kellogg Brown & Root, 80 S.W.3d 611 (Tex.App.-Houston [1st Dist.] 2002) (FAA arbitration context; vacatur standard for evident partiality)
- In re Chestnut Energy Partners, Inc., 300 S.W.3d 386 (Tex.App.-Dallas 2009) (FAA proceeding; de novo review of trial court on procedural matters)
- Roehrs v. FSI Holdings, Inc., 246 S.W.3d 796 (Tex.App.-Dallas 2008) (procedural posture in arbitration/vacatur context)