Arbitrator Bias Furnishes A Proper Basis To Vacate An Award.
A canceled real estate sale resulted in an arbitration award adverse to the seller. Seller Pham appealed, on the grounds that the arbitrator was biased. While the grounds for vacating an arbitration award are exceedingly narrow, bias can constitute misconduct, and thus serve as a basis for vacating the award. Here, the arbitrator, in explaining the basis for her award, questioned the credibility of defendant Pham, because Pham used an interpreter. The arbitrator believed that Pham, who had been in the country for many years, and who had participated in sophisticated business deals before, did not need an interpreter and was only using an interpreter to create the impression she was unsophisticated.
The Court of Appeal disagreed. Writing for the court, Justice Dato pointed out that Pham had used an interpreter during a negotiation with plaintiff; that one who has been in the country a long time may still have imperfect language skills; and that one who has language comprehension issues may nevertheless participate in sophisticated business transactions. The arbitration award was vacated. FCM Investments, LLC v. Grove Pham, LLC, et al., No. D080801 (4/1 10/17/23) (Dato, O'Rourke, Do). Questioning Pham's credibility because she used an interpreter created a reasonable impression of possible arbitrator bias.
COMMENTS. This case is unusual factually and procedurally.
First, we have blogged about a number of cases in which parties did not speak English as a first language, and this weighed in a court's assessment of whether an untranslated arbitration agreement written was unconscionable. In the instant case, language comprehension is a factor, but only because the use of an interpreter impacted the arbitrator's assessment of witness credibility. That's unusual. It may raise a question about how often the use of an interpreter has some impact on the arbitrator's evaluation of a witness. Because the arbitrator never mentions it, there is no way to know. Here, if the arbitrator had said nothing about the use of the interpreter, her award might well have stood intact.
Second, the question of bias usually arises because the arbitrator fails to make a timely disclosure of qualifications. But that's not what happened here. In fact, the issue of bias was not raised before the trial court, and thus would usually be forfeited on appeal. However, Justice Dato explained that the issue of bias could be decided as a matter of law because it was apparent on the record, and the Court of Appeal could reach the issue because it involved the integrity of the legal process.
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