SW Legal Educational Publishing

Arbitrators Not Required to Hold Hearings
Description Federal court refused to modify the award of an arbitration panel that refused the request that they hold a hearing by one of the parties to arbitration. The decision of the panel to base the award on the written submissions was within its authority and the court will not intervene.
Topic Alternate Dispute Resolution
Key Words Arbitration; Hearings; Modifying Awards
C A S E   S U M M A R Y
Facts A dispute between Griffin and Petrojam went to arbitration. Petrojam requested that the arbitration panel hold a hearing. The panel responded that it would hold a hearing after all documents were submitted. Later, Petrojam suggested a hearing was not needed if written submissions were adequate. Since there was no objection from Griffin, the panel set submission dates. Griffin missed deadlines, but the panel waited until it sent its submissions. After all materials were submitted, Griffin requested a hearing, but the panel issued the award based on the written submissions. Griffin then sued in federal court to have the award modified based on the panel's failure to hold a hearing.
Decision Suit dismissed. "Since the Panel decided to rule without a hearing, it apparently concluded that any factual matters in dispute were not material." The panel never promised Griffin there would be a hearing. "As long as an arbitrator's choice to render a decision based solely on documentary evidence is reasonable, and does not render the proceeding 'fundamentally unfair,' the arbitrator is acting within the liberal sphere of permissible discretion." As the Second Circuit Court of Appeals has noted, "an arbitration award should be enforced, despite a court's disagreement with it on the merits, if there is a barely colorable justification for the outcome reached."
Citation Griffin Industries, Inc. v. Petrojam, Ltd., - F.Supp.2d - (1999 WL 997148, S.D.N.Y.)

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