The U.S. Court of Appeals for the Third Circuit has found that post-award objections to an arbitrator were waived because the party had constructive knowledge of the arbitrator’s alleged insufficient disclosure. According to the Court, a “sore loser” is not permitted to “game the system” and conduct a background investigation on an arbitrator after an award with the sole motivation to seek vacatur.
The Court also held that a party is precluded from challenging an award where alleged malfeasance, ranging from conflicts-of-interest to non-disclosures of disciplinary proceedings, could and should have been reasonably discovered. The Third Circuit held that had due diligence been conducted after the disclosure, it would likely have discovered the true extent of the concerns about the arbitrator’s character and fitness to serve on the panel, such as a number of other complaints for the unauthorized practice of law, and that the disclosure itself was false.
The Court’s opinion in Goldman Sachs & Co. v. Athena Venture Partners, L.P., can be found here.