Texas Court Reverses $22 Million Award on Basis of Evident Partiality

NEW ORLEANS - A Texas appeals court has reversed a $22 million arbitration award on the basis that the sole arbitrator failed to disclose a social and business relationship with an attorney who represented the prevailing party. Karlseng v. Cooke, No. 05-09-1002 (Texas App. Ct., 5th Dist.).

The Texas Court of Appeals, 5th District, ruled that the arbitrator's failure to disclose this relationship might have, to an objective observer, created a reasonable impression of the arbitrator's partiality. The court overruled a motion for rehearing on Sept. 9.

A partnership dispute arose between H. Jonathan Cooke and the law firm of …