Arbitration: Eighth Circuit Holds That "Evident Partiality" Not a Basis for Reversal When Arbitration Agreement Does Not Call for Neutral Arbitrators
"Where an agreement entitles the parties to select interested arbitrators, "evident partiality" cannot serve as a basis for vacating an award under §10(a)(2) absent a showing of prejudice." The Eighth Circuit affirmed Winfrey, et al., v. Simmons Food, Inc., on this basis.
The underlying dispute was a between a group of poultry growers and a poultry company governed by an arbitration clause that "provided among other things, that 'each party shall appoint one arbitrator' and that these arbitrators 'shall jointly appoint a third arbitrator.'"
Both sides named their arbitrators, the growers naming J. Dudley Butler and the company Frank Hamlin. The company moved to have Butler struck because as biased because he had previously represented poultry growers and testified on their behalf before Congress. The District Court denied this motion, and the company withdrew Hamlin and nominated the preeminent Fayetteville attorney John Everett. Butler and Everett then named Mr. Hamlin as the "neutral" arbitrator.
The Eighth Circuit, affirming the panel's decision in favor of the growers, held that, unless the arbitration clause specifically provides for neutral arbitrators, an arbitrator's inclination toward one party or the other is not a basis for reversal "unless the objecting party proves that the arbitrator's partiality prejudicially affected the award"--which was not proved in this case.
