Molecular Dynamics Ltd. v. Spectrum Dynamics Medical Limited

Background

The court considered two letter motions by the petitioners in a post-arbitration proceeding. The first sought limited discovery and oral argument. The second sought permission to file an additional letter and evidence supporting allegations of fraud. The requested discovery included discovery directed at Arbitrator Jennifer Kirby.

Legal standard

The court explained that courts give substantial deference to arbitration decisions. Discovery in a proceeding seeking to vacate or confirm an arbitration award is available only in limited circumstances, when it is relevant and necessary to resolve an issue raised in the application. Discovery directed at an arbitrator concerning the arbitrator’s decision requires clear evidence of improper conduct. A request may be denied when it is merely a fishing expedition aimed at finding some possible basis for a bias claim or at examining the arbitrator’s decision-making process.

Analysis

The petitioners alleged that the arbitrator rushed the proceedings, ignored serious fraud allegations, new contrary evidence, and established New York law, and did not confirm whether she had reviewed a draft award prepared by a prior arbitrator. The court found these allegations too sparse to constitute clear evidence of improper conduct. The court also relied on the arbitrator’s 124-page partial award, which stated that she had no interest in seeing the prior arbitrator’s draft and that she intended to draft the tribunal’s awards herself.

The court concluded that the discovery request concerning the arbitrator appeared to be an attempt to probe her decision-making process, which is not a permissible purpose for discovery in this setting. The court separately denied discovery concerning the fraud allegations because the arbitrator had already considered the evidence the petitioners sought to submit again and found it irrelevant to her determination. The court stated that discovery aimed at relitigating issues previously presented to the arbitration panel is barred.

The court also denied the request to file additional evidence. It found that the proposed documents were of the same nature as documents already before the arbitrator and would not change the ruling on discovery. The court reminded the petitioners that a request for permission to file additional documentation is only a request and that documents should not be attached in the hope of influencing the court before permission is granted.

Disposition

The court denied both motions. It denied the request for limited discovery, including discovery concerning the arbitrator and the fraud allegations, denied the request for leave to file additional evidence, and found no need for oral argument. Judge Katherine Polk Failla directed the clerk to terminate the pending motions at docket numbers 46 and 51.