March 07, 2016 Articles

Third Circuit Rules No Second Bite at the Arbitration Apple

By Sarah Espinosa

On September 29, 2015, the U.S. Court of Appeals for the Third Circuit issued a precedential decision concerning whether and when a party to arbitration waives its right to challenge the arbitration award. The Third Circuit joined a number of other circuits, and cited as persuasive authority holdings from the Second, Eighth, and Ninth Circuits, in adopting a constructive knowledge standard in the assessment of motions to vacate an arbitration award as a result of an arbitrator's failure to disclose. Essentially, a party to an arbitration should not wait to investigate or allege arbitrator malfeasance until after a decision is issued, because if such knowledge could have been discovered prior, with reasonable care and diligence, the party will waive its ability to subsequently challenge the award.

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