Arbitration - New Focus May Be Enforcement
by Michael Fox
As courts adopt to the pro-arbitration views of both the U.S. and Texas Supreme Courts there seems to be a new focus reviewing arbitration awards. In Houston Village Builders, Inc. v. Falbaum (Ct. App - Houston [14th] 1/23/03), an arbitration award in favor of Village Builders was set aside for failure of the arbitrator to adequately disclose his background. In this case the key failure was that he had a long standing relationship as an attorney for a trade association, of which Village Builders was a member (along with over 1,300 other companies). The court also rejected several avenues which would have placed a burden of discovery of this information on the plaintiff.
A dissent by Justice Kern Thompson Frost points out some of the problems that could be caused by what he sees as an over strict standard.
For arbitrators (and parties selecting arbitrators) who are currently engaged in an active legal practice, this case if widely followed, could create substantial problems. Little of the value of an expedited procedure is maintained if it is subject to being set aside for grounds that are truly unrelated to the merits of the case.