National Indemnity Co. v. IRB Brasil Reseguros S.A., 675 F. App'x 89

NICO (U.S. reinsurer) provided retrocession coverage to IRB (Brazilian reinsurer) for losses suffered by CSN, a Brazilian conglomerate; disputes over NICO’s liability produced multiple arbitrations over seven years.
A three-member tribunal (two party-appointed arbitrators and neutral umpire Daniel Schmidt) issued three awards in 2015 in favor of NICO; NICO sought confirmation in federal district court and IRB moved to vacate.
The District Court (S.D.N.Y.) confirmed the awards in a March 10, 2016 Memorandum and Order and entered judgment March 15, 2016; IRB appealed.
IRB’s primary challenge alleged evident partiality and misbehavior by umpire Schmidt based on (a) his prior refusal to withdraw in 2012 after IRB objected to his role in a separate matter for Equitas (an entity IRB says is effectively NICO’s affiliate), and (b) his acceptance of an Equitas party-arbitrator appointment in March 2015 while these arbitrations were pending.
The District Court found Schmidt’s Equitas-related work was professional and did not establish familial, business, employment, or financial ties indicating partiality; Schmidt had sometimes voted against Equitas/NICO interests.
IRB failed to raise its §10(a)(3) misbehavior argument below; the Second Circuit accordingly declined to consider it as waived. The Second Circuit affirmed confirmation and denied NICO’s request for appellate fees.

Issue	Plaintiff's Argument (NICO)	Defendant's Argument (IRB)	Held
Whether umpire Schmidt’s service for Equitas and related conduct shows "evident partiality" under 9 U.S.C. § 10(a)(2)	Schmidt’s Equitas appointments were professional and do not show partiality; awards should be confirmed	Schmidt’s prior refusal to withdraw and later Equitas appointment show a relationship creating evident partiality requiring vacatur	No—courts view evident partiality narrowly; given lack of familial/business/financial ties and Schmidt’s record of voting against Equitas/NICO interests, a reasonable person would not have to conclude partiality; awards affirmed
Whether umpire Schmidt’s conduct constitutes "misbehavior" under 9 U.S.C. § 10(a)(3)	NICO: argument not applicable / not raised	IRB: Schmidt’s conduct amounted to misbehavior warranting vacatur	Waived—IRB failed to raise §10(a)(3) before district court, so appellate court declined to address it
Whether confirmation should be denied under the Convention/FAA generally	Confirm because none of Convention or FAA vacatur grounds apply	Vacatur requested under FAA provisions embodied in the Convention	Confirmed—review of arbitration awards is severely limited; FAA vacatur standards not met
Whether NICO is entitled to appellate fees and sanctions	NICO sought fees under Fed. R. App. P. 38 and 28 U.S.C. § 1927	IRB opposed; its arguments were nonfrivolous	Denied—IRB’s arguments were not frivolous nor unreasonably multiplied proceedings

Duferco Int’l Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383 (2d Cir.) (standard of review: factual findings for clear error, legal conclusions de novo)
Scandinavian Reinsurance Co. Ltd. v. Saint Paul Fire & Marine Ins. Co., 668 F.3d 60 (2d Cir.) (arbitral review under Convention is narrowly cabined)
Yusuf Ahmed Alghanim & Sons, W.L.L. v. Toys "R" Us, Inc., 126 F.3d 15 (2d Cir.) (Convention incorporates FAA vacatur grounds for awards rendered in U.S.)
Applied Indus. Materials Corp. v. Ovalar Makine Ticaret Ve Sanayi, A.S., 492 F.3d 132 (2d Cir.) (definition of "evident partiality": a reasonable person would have to conclude arbitrator was partial)
Millea v. Metro–North R.R. Co., 658 F.3d 154 (2d Cir.) (arguments raised first on appeal are waived)
Star Mark Mgmt., Inc. v. Koon Chun Hing Kee Soy & Sauce Factory Ltd., 682 F.3d 170 (2d Cir.) (standards for awarding appellate fees under Rule 38)