Seventh Circuit Allows Arbitrator to Hear Dispute over Original Award

After an arbitration award has been issued, a party may learn information that undermines the validity of that award and challenge the award in a second arbitration proceeding. Several questions may arise in this situation. For example, can a party arbitrator in the first proceeding also serve as an arbitrator in the proceeding that challenges the award? If the arbitrators signed a confidentiality agreement in the first proceeding, who construes how that agreement will affect evidentiary issues in the second proceeding? If the arbitration panel in the second proceeding rules on these issues, and a party seeks to enjoin the proceeding, can the expense of going forward with the second proceeding constitute the kind of irreparable harm needed to support the injunction? The United States Court of Appeals for the Seventh Circuit recently addressed each of these issues in Trustmark Insurance Co. v. John Hancock Life Insurance. Co., 631 F.3d 869 (7th Cir. 2011), cert. denied, 131 S. Ct. 2465 (2011).