The New York Supreme Court vacated the award entered in an arbitration of television rights between Mid-Atlantic Sports Network (“MASN”), the Baltimore Orioles, the Commissioner of Baseball (“MLB”) and the Washington Nationals. The arbitration was held by the Revenue Sharing Definitions Committee of Major League Baseball (“RSDC”). MASN and the Orioles filed a petition to vacate the award, and MLB and the Nationals moved to confirm it.
In vacating the award, the court discussed various grounds for vacatur under the FAA: corruption, fraud, misconduct of the arbitrator, use of undue means to procure the award, evident partiality, and corruption. The court found evident partiality existed here, because the law firm and lawyers opposing MASN and the Orioles served as counsel in other matters for every other entity in the arbitration, including the individual arbitrators. The court speculated that, to the extent that “there is no authority for a finding of ‘evident partiality’ in such a relationship,” it is because “arbitrators in similar situations have disqualified themselves rather than risk a charge of partiality.” While the “appearance of bias” is not a basis for vacatur under the FAA and therefore not applicable, the court noted that such an appearance existed here. The court further found that the panel completely ignored the prejudice established by MASN and the Orioles, which reflected “an utter lack of concern for fairness of the proceeding that is ‘so inconsistent with basic principles of justice’ that the award must be vacated.” TCR Broadcasting Holding, LLP v. WN Partner, LLC, Case No. 652044/2014 (N.Y. Sup. Ct. Nov. 4, 2015).