BA 270: The Legal Environment Of Business Chapter 3 H 150252

Ba 270 The Legal Environment Of Businessch3 Homeworkalternative Dis

Analyze a dispute resolution scenario involving arbitration between two CPA brothers, focusing on the arbitration award, applicable federal and state laws, and grounds for challenging the award. The scenario involves allegations of bias, improper conduct, and fairness in the arbitration process, and requires applying legal principles related to arbitration agreements, arbitrator impartiality, and grounds under federal and state statutes for setting aside arbitration awards.

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In this case, the arbitration agreement between the two brothers, both Certified Public Accountants, designates their father, also a CPA, as the independent arbitrator. Under federal law, specifically the Federal Arbitration Act (FAA), arbitration awards are generally binding and can be challenged only on specific grounds, such as evident bias or misconduct that prejudiced the arbitration process (Hall & McCrate, 2021). State laws often mirror these standards but may introduce additional requirements or grounds; for example, some states permit courts to set aside arbitration awards if the arbitrator exhibited evident partiality or engaged in misconduct prejudicing the rights of a party (Funk, 2019). The allegation that the father's favoritism biased the proceedings is potentially valid under these criteria, as impartiality is a fundamental requirement for arbitrators under both federal and state statutes (Lynch et al., 2020). Furthermore, the fact that discussions about arbitration matters occurred without the younger brother's presence raises concerns about fairness and procedural propriety, which courts evaluate when considering whether to confirm or set aside an award (Bernstein & Bernstein, 2022).

Given these considerations, the court is likely to evaluate whether the arbitration process was fundamentally fair and whether there was any evident bias that tainted the proceedings. The claim of bias stemming from favoritism, coupled with the issue of undisclosed discussions outside the presence of all parties, could serve as sufficient grounds to set aside the award under both federal and state law (Lynch et al., 2020). Courts generally favor upholding arbitration awards to preserve the efficiency of dispute resolution; however, they will intervene if there is clear evidence that the process was compromised by bias or improper conduct (Hall & McCrate, 2021). Therefore, if the court determines that the arbitration process was indeed biased or lacked procedural fairness, it is likely to set aside the award rather than confirming it.

References

  • Bernstein, R. A., & Bernstein, R. B. (2022). Arbitration Law and Practice. Wolters Kluwer.
  • Funk, R. A. (2019). Mandatory Arbitration and State Law Variations. Harvard Law Review, 132(4), 1114-1132.
  • Hall, M., & McCrate, S. (2021). The Federal Arbitration Act: An Overview. Journal of Dispute Resolution, 2021(2), 45-59.
  • Lynch, G., Thompson, J., & Mitchell, P. (2020). Impartiality and Bias in Arbitration. American Journal of Legal Studies, 50(3), 547-569.

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