Arbitration Award Confirmed Despite Denial of Discovery and Evidentiary Hearing
Recently, a federal court confirmed an arbitration award in an amount in excess of $185 million in a proceeding in which the arbitrator denied the respondent the opportunity for discovery as well as an evidentiary hearing. See 245 Park Member v. HNA Group (International), No. 22-cv-1536-(JGK) (S.D.N.Y. July 25, 2022). What warranted such an unusual result?
October 17, 2022 at 10:47 AM
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Abraham J. Gafni, Neutral, Mediator and Arbitrator with ADR Options. Courtesy photo
ADR
Recently, a federal court confirmed an arbitration award in an amount in excess of $185 million in a proceeding in which the arbitrator denied the respondent the opportunity for discovery as well as an evidentiary hearing. See 245 Park Member v. HNA Group (International), No. 22-cv-1536-(JGK) (S.D.N.Y. July 25, 2022). What warranted such an unusual result?
The matter involved the investment by petitioner in an affiliate of respondent. As consideration and express inducement for its investment, petitioner secured contractual rights and protections including an absolute and unconditional guaranty from respondent and others. The guaranty contained an arbitration provision that provided in part:
"In the event of any dispute under this guaranty, such dispute shall be submitted to final and binding arbitration in New York, New York, administered by JAMS in accordance with JAMS streamlined arbitration rules and procedures … Each party shall submit to such arbitrator its position on each matter in dispute and any applicable materials that it desires that such arbitrator consider in making its determination within seven business days following the appointment of the arbitrator. Such arbitrator shall consider only the materials submitted to it for resolution. Each party shall cooperate with JAMS and with the other parties in scheduling the arbitration proceedings so that a final nonappealable award is rendered within 30 calendar days after submission thereof to arbitration "
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