LD 1218
pg. 47
Page 46 of 94 An Act To Enact the Revised Uniform Arbitration Act Page 48 of 94
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LR 468
Item 1

 
Challenges based upon a lack of impartiality, including
disclosed or undisclosed facts, interests, or relationships
are subject to the developing case law under Section 23(a)(2).
Courts also are given wider latitude in deciding whether to
vacate an award under Section 12(c) and (d) that is permissive
in nature (an award "may" be vacated) rather than Section
23(a) which is mandatory (a court "shall" vacate an award).

 
Section 12(c) and (d) also require a party to make a timely
objection to the arbitrator's continued service in order to
preserve grounds to vacate an award under Section 23(a)(2).
Bossley v. Mariner Fin. Grp., Inc., 11 S.W.3d 349, 351 (Tex.
Ct. App. 2000) ("A party who does not object to the selection
of the arbitrator or to any alleged bias on the part of the
arbitrator at the time of the hearing waives the right to
complain."). Where the arbitrator makes the disclosure under
Section 12(c) prior to the hearing, the party normally must
object prior to the hearing; if the arbitrator fails to
disclose a required fact under Section 12(d), the party should
object within a reasonable period after the person learns or
should have learned of the undisclosed fact.

 
5. Special problems are presented by tripartite panels
involving non-neutral arbitrators - that is, in situations
such as where each of the arbitrating parties selects an
arbitrator and a third, neutral arbitrator is jointly selected
by the arbitrators chosen by the parties. See generally III
Macneil Treatise § 28.4. In some such cases, it may be agreed
that the arbitrators chosen by the parties are not regarded as
"neutral" arbitrators, but are deemed to be predisposed toward
the party which appointed them. See, e.g., AAA, Commercial
Disp. Resolution Pro. R-12(b), 19. However, in other
situations even the arbitrators appointed by the parties may
have a duty of neutrality on some or all issues. The integrity
of the process demands that the non-neutral arbitrators chosen
by the parties, like neutral arbitrators, disclose pertinent
interests and relationships to all parties as well as other
members of the arbitration panel. It is particularly important
for the neutral arbitrator to know the interest of the
arbitrator selected by each of the parties if, for example,
such non-neutral arbitrator is being paid on a contingent-fee
basis. Thus, Section 12(a) and (b) apply to non-neutral
arbitrators but under a "reasonable person" standard for
someone in the position of a party and not a neutral
arbitrator. Nasca v. State Farm Mut. Automobile Ins. Co., 2000
WL 374297 (Colo. Ct. App., April 13, 2000) (finding that
party-appointed arbitrator had duty to disclose substantial
business relationship with the party).

 
Section 12(c) and (d) also apply to non-neutral arbitrators
but with a somewhat different effect than to a neutral
arbitrator. For example, an undisclosed substantial
relationship between a


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