Scandinavian Reinsurance Co. v. Saint Paul Fire and Marine Ins. Co.
668 F.3d 60
| 2d Cir. | 2012Background
- Arbitration arose under a stop-loss retrocessional reinsurance contract between Scandinavian and St. Paul to interpret liability limits and the structure of experience accounts.
- Two panel members (Dassenko and Gentile) failed to disclose concurrent service in a related arbitration (Platinum Arbitration) ongoing at the same time.
- The district court vacated the St. Paul Arbitration Award on evident partiality grounds based on nondisclosure and potential conflicts.
- The Platinum Arbitration involved overlapping arbitrators, related parties, a common witness, and similar contract terms, but Scandinavian argues the nondisclosure does not show evident partiality.
- The Second Circuit reversed, holding that overlapping service alone does not establish evident partiality; the award is to be confirmed.
- Disclosure standards and the role of ARIAS Canon IV-guided disclosures were discussed, but nondisclosure did not warrant vacatur under the FAA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether nondisclosure of concurrent service shows evident partiality | Scandinavian argues nondisclosure demonstrates bias | St. Paul contends no evident partiality from overlap | No evident partiality; disclose not enough to vacate |
| What standard governs vacatur for evident partiality | Applied Industrial framework applies | Standard does not compel vacatur here | Evident-partiality standard requires a reasonable bias inference; not met here |
| Role of overlap versus direct party relationship | Overlap implies material conflict | Overlap alone is not a material conflict of interest | Overlap alone insufficient to vacate; not a material conflict |
| Appropriate remedy when disclosure failures occur | Vacatur justified due to nondisclosure | Vacatur not warranted by nondisclosure alone | Vacatur not required; confirm award and deny vacatur |
Key Cases Cited
- Morelite Constr. Corp. v. N.Y.C. Dist. Council Carpenters Benefits Funds, 748 F.2d 79 (2d Cir. 1984) (evident partiality standard—partiality must be reasonably inferred)
- Applied Industrial Materials Corp. v. Ovalar Makine Ticaret Ve Sanayi, 492 F.3d 132 (2d Cir. 2007) (duty to investigate/disclose potential conflicts; prophylactic rule for nondisclosure)
- Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145 (U.S. 1968) (disclosure guidelines significance in showing potential conflicts (White, J.))
- Lucent Technologies Inc. v. Tatung Co., 379 F.3d 24 (2d Cir. 2004) (disclosure and partiality considerations; non-disclosure analysis)
- Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 560 U.S. 5? (U.S. 2010) (limits of vacatur and deference in arbitration)