Party Whose Lawyer Changed Sides Waived Right to Seek Vacatur

In Técnicas Reunidas de Talara S.A.C. v. SSK Ingenieria y Construccion S.A.C., Case No. 21-13776 (11th Cir. July 22, 2022), decided under the Panama Convention, the Eleventh Circuit held that the Técnicas, losing party, waived the right to seek vacatur on public policy grounds, based upon the side-switching of two lawyers that represented it during the arbitration. Before post-closing briefs were filed, the lawyers notified Técnicas that within a few weeks after the final hearing day, they joined the firm representing its opponent. However, Técnicas did not raise an objection until an award issued a year later.

Técnicas’ failure to raise an objection to the arbitral panel was a key fact upon which the court based its conclusion of waiver. The court stated that disqualification was within the panel’s authority to order any interim or conservatory measure it deemed appropriate. As additional support, it cited section 3.9 (d) and 3.9 cmt c of the Restatement of the U.S. Law of International Commercial & Investor State Arbitration (Proposed Final Draft 2019):

Courts generally refer to the arbitral tribunal issues regarding disqualification of counsel,” RESTATEMENT, supra, § 3.9(d). And arbitral tribunals have the power to disqualify conflicted attorneys. See id. § 3.9 cmt. c.

The opinion discloses that the lawyers who changed firms informed the panel and both lead counsel of their move shortly after informing their former client, and promised to maintain the confidentiality of the information they learned. Absent express client consent, this would not have sufficed to permit others in the lawyers’ new firm to continue representing the opponent under the rules of professional conduct of Florida, where this International Court of Arbitration case was seated. It should also be noted that some of the cases collected in the restatement comment (which is cited by the Eleventh Circuit) hold that an arbitrator does not have the power to disqualify counsel. There is conflicting case law on this point.