The defendant sought to vacate an arbitration award, arguing that the arbitrator prejudiced the defendant by refusing to order discovery it requested and failed to apply California law to the analysis of attorneys’ fees and costs. The Southern District of California disagreed with the defendant’s argument and confirmed the award.
As to the defendant’s argument concerning discovery, the court recognized that the arbitrator issued a series of procedural orders specifically addressing discovery and ordering the disclosure of documents. The court found that the defendant “failed to demonstrate that the arbitrator’s refusal to order disclosure of certain requested documents demonstrated deprived the defendant of an adequate opportunity to present its evidence and arguments” and concluded that the “arbitrator’s refusal to order disclosure of certain requested documents was not done in bad faith and was not so gross as to amount to affirmative misconduct.”
As to the defendant’s argument that the arbitrator failed to apply California law to the award of attorneys’ fees, the court found that the arbitrator did not exceed its authority by applying ICC rules to the award of costs and fees. The parties’ agreement provided that the arbitration “shall be conducted in accordance with the Rules of Conciliation and Arbitration of the ICC.” California law permits the parties to incorporate by reference into their contract the terms of another document. Here, the reference to the application of the ICC rules was “clear and unequivocal.” Moreover, the parties’ agreement provided that the arbitration award “may include an award of costs, including reasonable attorney’s fees and disbursements.” The court determined, “pursuant to the parties’ agreement, the award of attorneys’ fees in the arbitration award is governed by ICC Rules” and concluded that the arbitrator did not exceed its authority.
Aeryon Labs, Inc. v. Datron World Communications, Inc., No. 3:19-cv-02168 (S.D. Cal. Mar. 4, 2020).
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