The Sixth Circuit recently held that a lower court erred by refusing to vacate an arbitration panel's interim and final awards due to ex parte communications between one of the arbitrators and the attorney for the appellee, reinsurer National Union Fire Insurance Company of Pittsburgh (NUFIC). The appellant, cedent Meadowbrook Insurance Group (Meadowbrook), and NUFIC entered into a reinsurance agreement containing an arbitration provision. When NUFIC asserted that Meadowbrook overbilled its reinsurance claims, the parties instituted an arbitration in front of a three person panel, including two party-appointed arbitrators and a neutral umpire. The parties agreed to scheduling orders that instituted a ban on all ex parte communications after the filing of the first brief in any arbitration. After the date of filing, the attorney for NUFIC and the arbitrator that had been selected by NUFIC commenced ex parte communications on three different occasions. The Sixth Circuit, upon review, found that while such ex parte communications did not void an award per se, the communications could void an award if they violated the terms of the arbitration agreement. The Sixth Circuit found here that the ex parte communications violated the scheduling orders and also prejudiced Meadowbrook's rights under the arbitration agreement. The Sixth Circuit therefore vacated both awards. Star Insurance Co. v. National Union Fire Insurance Co. of Pittsburgh, Pa., Case Nos. 15-1403/1490 (6th Cir. Aug. 18, 2016).
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