5th Circ. Says Arbitration Group Not On Hook For $12M Tab

Law360 (April 7, 2020, 8:58 PM EDT) -- The American Arbitration Association doesn't have to foot a $12 million legal bill after arbitrators' ethics violations voided the outcome of an arbitration proceeding in a more than $100 million dispute over liability for sinkhole damages, the Fifth Circuit ruled Tuesday.

In a published opinion, a three-judge panel held the Federal Arbitration Act bars Houston-based Texas Brine Co. from collecting arbitral fees and related legal bills from the AAA for an arbitration proceeding that was vacated due to ethics violations by the panelists. The circuit court held the company's challenge was properly dismissed because vacating the arbitration was the only remedy Texas Brine was...

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