Forfeiture of Right to Disqualify an Arbitrator

Forfeiture of Right to Disqualify an Arbitrator

Updated on July 22, 2021

Can parties to an arbitration disqualify an arbitrator prior to, during, or after the arbitration has taken place?

Parties to a contract often agree to a “contractual arbitration” of disputes that arise. If the arbitration provision is valid, one party may force the other to litigate the dispute before an arbitrator, as opposed to before the Courts. Once in a while, after the arbitrator makes his or her decision, a party to the arbitration will be displeased with the result. Generally, arbitration awards are not subject to subsequent judicial review to change the result. However, there are a few exceptions. There may be instances where you have the right to disqualify an arbitrator.

Vacating an Arbitration Award

Specifically, a court must vacate an arbitration award when: (a) the award was procured by corruption, fraud or other undue means, (b) corruption in arbitrator, (c) a party was prejudiced by arbitrator’s misconduct, (d) arbitrator exceeded his or her powers, (e) party was prejudiced by arbitrator’s refusal to postpone a hearing, hear evidence, or conduct contrary law, (f) arbitrator failed to make a required disclosure. (Code Civ. Proc. section 1286.2.) However, a recent California Court of Appeals decision demonstrates that Courts apply 1286.2 with some nuance.

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The Right to Disqualify an Arbitrator

In Alper v. Rotella, the losing party (“Alper”) to a contractual arbitration proceeding petitioned the Court to vacate the arbitration proceeding. Specifically, Alper contended that the arbitrator had been on strong prescription painkillers throughout the arbitration and was not able to properly perceive the evidence. Alternatively, the prevailing party (“Rotella”) argued, inpart, that the arbitrator had been transparent throughout the arbitration that he was on painkillers and Alper failed to timely request disqualification. Put another way, Alper knew the arbitrator was on strong painkillers and did not object until after Alper received an unfavorable verdict.

The Court of Appeals performed an analysis under the substantial basis test and ultimately upheld the trial court’s denial of Alper’s petition. First, the court acknowledged that an arbitrator may be disqualified in specific situations, including when an arbitrator is unable to properly perceive the evidence or properly conduct a proceeding due to permanent or temporary physical impairment. (Code Civ. Proc. section 170.1.) However, the court also determined that if a ground for disqualification under section 170.1 exists, e.g. physical impairment, the neutral arbitrator must disqualify himself upon the demand of any party made before the conclusion of the arbitration. (Emphasis added) To that end, a party may not “collaterally attack” an adverse ruling under 170.1 grounds once the arbitration has concluded.

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Forfeiture v. Waiver of Right to Disqualify an Arbitrator

Ultimately, the Court of Appeals found that Alper’s failure to timely request disqualification constituted a “forfeiture”. In doing so, the Court of Appeals distinguished a “forfeiture” from a “waiver”, the latter of which the trial court had incorrectly used to describe Alper’s actions. Specifically, a “forfeiture” is akin to a party’s failure to timely assert his or her right, while a waiver is an “intentional relinquishment or abandonment of a known right”. Here, Alper forfeited his right.

The attorneys at Schorr Law have years of experience representing clients in both Court proceedings and arbitrations. If you are involved in a legal dispute involving real property, contact Schorr Law to schedule a free consultation with our real estate attorney in los angeles today.

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