National Indemn. Co. v. IRB Brasil Reseguros S.A., No. 16-1267-cv, 2017 U.S. App. 1686 (2d Cir. Jan. 31, 2017) (Summary Order).

In March 2016, a New York federal court affirmed an order confirming three arbitration awards issued in favor of a retrocessionaire in a reinsurance dispute. See our June 2016 Reinsurance Newsletter for a summary of the case. The Second Circuit recently affirmed.

The appeal was based on the alleged evident partiality and misbehavior of the umpire, which are grounds for vacatur under Section 10 of the Federal Arbitration Act (FAA). The salient fact is that the umpire was appointed as party-arbitrator by an entity allegedly identical to retrocessionaire in a separate case while this arbitration was pending.

The Second Circuit reasoned that a reasonable person would find no evident partiality in view of the following circumstances: the umpire had a purely professional relationship with the retrocessionaire and its affiliated entity, without any familial, business or employment connection; he voted against the retrocessionaire’s affiliated entity in his party-arbitrator role; he acted as party-arbitrator on behalf of parties opposed to the retrocessionaire in other cases. 

The Second Circuit did not address the argument of misbehavior because it was improperly raised for the first time on appeal.