Arbitrator Did Not Exceed Jurisdiction Because Awards Ruling On Access To Records Did Not Violate Public Policy.
Sometimes the Court’s weariness with a dispute drips onto the page as in this description of an appeal from judgments entered after the trial court denied petitions “to vacate the most recent arbitration awards in a decade-long dispute pitting plaintiff against his brothers . . . “ One can hear the justices collectively sigh in a footnote reciting that the arbitrator “had issued awards concerning the parties in July 2005, September 2006, August 2008, May 2009, July 2010, and March 2011.”
Plaintiff had filed two petitions to vacate two 2012 awards. Plaintiff’s petitions failed, and so plaintiff appealed. The plaintiff’s chief argument on appeal was that the arbitrator had exceeded its powers by denying him a right to a complete review and inspection of records of various business entities.
However, the parties had submitted their entire dispute to the arbitrator, agreeing to arbitrate the disclosure of the entities’ documents. The submission agreement also covered future disputes over access to documents. And “parties may submit for decision issues they were not contractually compelled to submit to arbitration,” in which event courts look to “both the contract and to the scope of the submissions to determine the arbitrator’s authority.” Porter v. Golden Eagle Ins. Co., 43 Cal. App.4th 1282, 1291 (1996). By submitting the access issue to the arbitrator in 2009, the plaintiff recognized the arbitrator’s ongoing jurisdiction over the entities’ document production obligation.
Plaintiff had one last argument: failure to allow further access to documentation ran contrary to public policy, and therefore provided a ground for vacating the arbitrator’s award. Not so, said the Court of Appeal – plaintiff had been receiving copies, and whether he received copies or originals was not a public policy issue.
The Court of Appeal also noted that “plaintiff cites us to no case or statute that makes an ‘explicit expression of public policy’ “ behind the Corporation Code’s requirements of access to books and records. Perhaps so, though you and I can probably think of a host of public policy reasons for requiring that shareholders and partners shoud have access to business records.
NOTE: This is the second time I have reported on a case in which the arbitral forum was a Beth Din, a Jewish rabbinical court.