Originally from Alternatives to the High Cost of Litigation

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The Ninth U.S. Circuit Court of Appeals four years ago generated buzz throughout the legal community and among arbitration practitioners about the levels of disclosure to be made by arbitrators when it issued Monster Energy Co. v. City Beverages LLC, 940 F.3d 1130, 1135 (9th Cir. 2019) (available at bit.ly/43HZ5Ic).

The court vacated an arbitration award on grounds that the arbitrator’s failure to disclose his ownership interest in JAMS, coupled with the fact that JAMS had administered 97 arbitrations with the respondent over the previous five years, created an “impression of bias.”

Accordingly, Monster Energy stood for the proposition that an arbitrator who had limited business ties with the parties nevertheless could be considered potentially biased if the arbitration provider the arbitrator was a member of had financial incentives to be biased.