STORY FROM: Reinsurance & Arbitration
Arbitrators Had Authority To Impose Sanctions, Court Rules
April 13, 2009
NEW YORK - An arbitration panel did not exceed its authority in awarding attorney and arbitrator fees as a sanction for a party's failure to arbitrate in good faith, a 2nd Circuit U.S. Court of Appeals majority has ruled. Reliastar Life Insurance Company of New York v. EMC National Life Co., No. 07-0828 (2nd Dist.).
In an April 9 opinion, the majority ruled that a clause in the parties' arbitration agreement requiring each party to bear its own fees and costs does not limit the arbitrators' authority to impose sanctions in the form of fees and costs.
In December 1997, ...