Beebe Medical Center v. Insight Health Services Corp., C.A. No. 16705-VCS, 751 A.2d 426 (Del. Ch. 1999)

Daniel B. Rath, while at Duane, Morris & Heckscher, represented the plaintiff in an action to vacate an arbitration award where the defendant’s law firm was also simultaneously representing the arbitrator in litigation in the Superior Court of Delaware. The arbitrator cast his vote on liability against the plaintiff and the arbitrator’s vote was decisive, as the arbitration was decided on a 2-1 vote of the panel and an award adverse to Beebe. Only after the liability aspect of that decision did the arbitrator’s client relationship with the law firm surface.  Dan argued that the arbitrator’s client-lawyer relationship with the defendant’s counsel constituted “evident partiality” under section 5714(a)(2) of the Delaware Uniform Arbitration Act, relying also on the Supreme Court’sinfluential opinion interpreting the evident partiality standard, Commonwealth Coatings Corp. v. Continental Casualty Co. 393 U.S. 145 (1968).  The Court of Chancery granted the plaintiff’s motion for summary judgment and vacated the arbitration award due to the arbitrator’s manifest disregard of law, even though it is not expressly stated as ground for judicial review in Delaware’s arbitration statute.

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