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| 5.__Presumption of evident partiality.__An arbitrator appointed | as a neutral arbitrator who does not disclose a known, direct | and material interest in the outcome of the arbitration | proceeding or a known, existing and substantial relationship | with a party is presumed to act with evident partiality under | section 8723, subsection 1, paragraph B. |
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| | 6.__Substantial compliance.__If the parties to an | arbitration proceeding agree to the procedures of an | arbitration organization or any other procedures for | challenges to arbitrators before an award is made, substantial | compliance with those procedures is a condition precedent to a | motion to vacate an award on that ground under section 8723, | subsection 1, paragraph B. |
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| | 1. The notion of decision making by independent neutrals is | central to the arbitration process. The UAA and other legal | and ethical norms reflect the principle that arbitrating | parties have the right to be judged impartially and | independently. III Macneil Treatise § 28.2.1. Thus, Section | 12(a)(4) of the UAA provides that an award may be vacated | where "there was evident partiality by an arbitrator appointed | as a neutral or corruption in any of the arbitrators or | misconduct prejudicing the rights of any party." See RUAA | Section 23(a)(2); FAA Section 10(a)(2). This basic tenet of | procedural fairness assumes even greater significance in light | of the strict limits on judicial review of arbitration awards. | See Drinane v. State Farm Mut. Auto Ins. Co., 153 Ill. 2d 207, | 212, 606 N.E.2d 1181, 1183, 180 Ill. Dec. 104, 106 (1992) | ("Because courts have given arbitration such a presumption of | validity once the proceeding has begun, it is essential that | the process by which the arbitrator is selected be certain as | to the impartiality of the arbitrator."). |
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| The problem of arbitrator partiality is a difficult one | because consensual arbitration involves a tension between | abstract concepts of impartial justice and the notion that | parties are entitled to a decision maker of their own | choosing, including an expert with the biases and prejudices | inherent in particular worldly experience. Arbitrating parties | frequently choose arbitrators on the basis of prior | professional or business associations, or pertinent commercial | expertise. See, e.g., Morelite Constr. Corp. v. New York City | Dist. Council Carpenters Benefit Funds, 748 F.2d 79 (2d Cir. | 1984); National Union Fire Ins. Co. v. Holt Cargo Sys., Inc., | ______F.Supp. ____ , 2000 | WL 328802 (S.D.N.Y. March 28, 2000). The competing goals of | party choice, desired expertise and impartiality must be | balanced by |
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