International Capital & Management Company arbitrated a dispute against Bear Stearns before the Financial Industry Regulatory Authority (“FINRA”). International Capital ultimately withdrew its claims in the arbitration, after which the FINRA panel ordered it to pay more than $300,000 of Bear Stearns' attorneys’ fees related to the withdrawn claims. International Capital moved to vacate this portion of the panel’s award.
The court denied the motion and confirmed the award, finding that although the relevant contract did not provide for attorneys’ fees, both parties had effectively agreed to allow the panel to award such fees by requesting and pursuing them during the course of the arbitration. Notably, the court distinguished this situation from one in which a party makes a boilerplate demand for attorneys’ fees, but never actually pursues such fees in the arbitration, indicating that the latter could have resulted in the panel exceeding its authority.
The court's decision was captioned Bear Stearns v. International Capital & Management Co., 650125/11 (N.Y. Sup. Ct., June 27, 2011).