Bakhai v. BDO USA, P.C.
1:24-cv-23896
| S.D. Fla. | Jul 29, 2025Background
- Kashyap Bakhai was a partner in the accounting firm MBAF, which was later acquired by BDO USA, P.C.; Bakhai became a partner at BDO under a new partnership agreement.
- BDO terminated Bakhai's partnership interest based on allegations he leaked confidential information and failed to disengage from a client accused of sexual harassment.
- Bakhai initiated arbitration, claiming he was terminated without cause under the partnership agreement; BDO counterclaimed for breach and unjust enrichment.
- A majority of the arbitral panel held Bakhai was not validly terminated for cause; BDO's evidence of misconduct was found unconvincing, and Bakhai was denied due process at termination.
- Bakhai petitioned to confirm the arbitration award; BDO moved to vacate, citing exceeded authority, evidentiary misconduct, and fraud.
- Magistrate Judge Lett recommended confirming the award; the district court adopted this in part, overruling all BDO objections, sustaining a narrow Bakhai objection, and confirmed the award.
Issues
| Issue | Plaintiff's Argument (Bakhai) | Defendant's Argument (BDO) | Held |
|---|---|---|---|
| Whether panel exceeded its authority | Panel properly applied contract terms and legal standards | Panel modified the contract/ignored express language; applied wrong law | Panel acted within authority and merely interpreted the contract; objection overruled |
| Panel's exclusion/limitation of evidence | Panel rightly limited BDO's hearsay/cumulative evidence | Panel misconduct by preventing material evidence on Bakhai’s misconduct | Panel’s limits were reasonable; no prejudice or misconduct; objection overruled |
| Award procured by fraud (witness perjury) | No willful perjury; Perez’s error immaterial | Perez’s false testimony tainted the award and was material | No clear evidence of intentional perjury; testimony immaterial; objection overruled |
| Validity of post-judgment interest rate | Interest rate of 10.5% per arbitral award should stand | Rate should be federal post-judgment rate under 28 U.S.C. § 1961 | Cannot modify arbitral award’s post-judgment rate; 10.5% stands; objection overruled |
Key Cases Cited
- Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (2008) (FAA provides mechanisms for confirming, vacating, or modifying arbitration awards and limits grounds for vacatur)
- Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013) (Arbitrators’ contractual interpretation controls unless it ignores or contradicts contract terms)
- Frazier v. CitiFinancial Corp., LLC, 604 F.3d 1313 (11th Cir. 2010) (Courts must confirm arbitration awards unless statutory grounds for vacatur are met)
- Bonar v. Dean Witter Reynolds, Inc., 835 F.2d 1375 (11th Cir. 1988) (Test for vacatur due to fraud in arbitration: clear evidence, non-discoverable, and material to outcome)
- United Paperworkers Int’l Union AFL-CIO v. Misco, Inc., 484 U.S. 29 (1987) (Limits on vacatur due to arbitrator's evidentiary misconduct; must amount to bad faith or prejudice)