ADR and Mediation

In arbitration proceeding in which two arbitrators were unable to agree as to appointment of third arbitrator, Dist. Ct. could properly appoint third arbitrator under section 5 of Fed. Arbitration Act. Ct. rejected defendant's claim that Dist. Ct. lacked jurisdiction to appoint arbitrator where: (1) prior to said appointment, Dist. Ct. had determined that arbitrators could resolve separate issue regarding defendant's motion to compel de-consolidation of instant arbitration; and (2) defendant had argued that only Dist. Ct. could resolve de-consolidation issue before arbitration could continue. Ct. similarly found that Dist. Ct. had jurisdiction to appoint arbitrator during defendant's appeal of Dist. Ct.'s de-consolidation order since Ct. of Appeals lacked jurisdiction to consider defendant's appeal where de-consolidation order was interlocutory in nature and where said order did not fall within limited provisions for appeal under 9 USC section 16(a)(1)(B).

In action seeking specific performance of terms of parties’ settlement agreement or alternatively alleging breach of contract and fraud, Dist. Ct. erred in denying defendant’s motion to stay instant action based on arbitration clause contained in settlement agreement. While Dist. Ct. had found that defendant had waived its right to arbitrate instant dispute based on defendant’s participation in plaintiff's prior litigation seeking to reopen lawsuit that generated instant settlement agreement, record demonstrated no waiver where defendant's prior participation in lawsuit consisted of filing pleading that challenged court’s jurisdiction to hear plaintiff’s lawsuit based upon existence of arbitration agreement. Fact that defendant had prevailed in prior lawsuit and participated in plaintiff’s appeal of lawsuit’s dismissal did not require different result. Moreover, while Dist. Ct. rejected defendant’s request to stay portion of plaintiff’s action against non-signatories to settlement agreement based upon said arbitration clause, Dist. Ct. could not act on defendant’s request since defendant lacked standing to assert rights of non-signatory co-defendants.

Dist. Ct. erred in vacating portion of arbitration award that found that defendant had solely invented and owned certain foreign patents, after finding that arbitration panel had disregarded law when finding in favor of defendant as to ownership of foreign patents. Dist. Ct.'s rationale is not contained in any of four areas that arbitration award may be vacated under Federal Arbitration Act, and Dist. Ct.'s conclusion that arbitrators disregarded law by failing to discuss foreign patents separately from domestic patents did not justify vacatur of award. Ct. further noted that Dist. Ct. had failed to identify law that arbitrators had violated.