Bakhai v. BDO USA, P.C.
1:24-cv-23896
| S.D. Fla. | Jul 29, 2025Background
- Kashyap Bakhai, a former partner of Morrison Brown Argiz & Farra (MBAF), became a partner of BDO USA, P.C. after BDO acquired MBAF.
- Bakhai was terminated by BDO in January 2023 for allegedly leaking confidential information and failing to disengage with a problematic client.
- Bakhai filed for arbitration, claiming his termination was without contractual cause; BDO counterclaimed for breach of contract and unjust enrichment.
- The arbitration panel found BDO lacked cause to terminate Bakhai and awarded him damages, attorney's fees, and costs.
- Bakhai petitioned to confirm the arbitration award in federal court under the FAA; BDO moved to vacate, alleging panel misconduct, fraud, and exceeding authority.
- Both parties objected to a magistrate judge's report and recommendation; the district court reviewed these objections de novo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitration panel exceeded its authority under FAA § 10(a)(4) | Panel properly interpreted partnership contract; no overreach | Panel misapplied law and ignored agreement’s terms | Court held panel acted within its authority—no modification/ignorance of contract |
| Whether panel committed misconduct by refusing to admit key evidence under FAA § 10(a)(3) | Exclusions were reasonable and did not prejudice BDO | Was prejudiced by not being able to present relevant evidence or expert testimony | Court found no prejudice; panel’s evidentiary rulings reasonable |
| Whether arbitration award was procured by fraud under FAA § 10(a)(1) | Alleged false testimony immaterial and not willful perjury | Witness perjured herself, affecting outcome | Court agreed testimony was incorrect but not perjurious or material; no vacatur |
| Whether post-judgment interest rate set by panel can be changed to federal rate | Interest rate awarded by panel controls | Should use 28 U.S.C. § 1961 federal rate | Court held arbitration panel’s interest rate applies |
Key Cases Cited
- Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (distinguishes FAA vacatur/modification grounds as exclusive and stresses deference to arbitral awards)
- Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (confirms extremely narrow review of arbitral awards—courts may not review merits)
- Frazier v. CitiFinancial Corp., LLC, 604 F.3d 1313 (confirms strong presumption of arbitration award confirmation and limited exceptions)
- Gherardi v. Citigroup Glob. Markets, Inc., 975 F.3d 1232 (arbitrator error, even serious, is not vacatur ground unless contract “ignored”)
- Bonar v. Dean Witter Reynolds, Inc., 835 F.2d 1375 (sets three-prong test for vacatur of arbitration award for fraud)
- United States v. Cavallo, 790 F.3d 1202 (defines perjury as willful intent to give false testimony)