Unreported / Non-Citable
Background
Teleport Mobility and Northern Lights obtained an arbitration ruling against Krzysztof Sywula in a business dispute. Sywula challenged the award in the Northern District of California, arguing that the arbitrator should have been disqualified, disregarded governing law, and proceeded unfairly after his lawyer withdrew.
The district court confirmed the arbitration result. On appeal, Sywula renewed his objections under the Federal Arbitration Act’s narrow grounds for vacatur. The Ninth Circuit evaluated the arbitral process rather than retrying the underlying commercial dispute.
The Court’s Holding
The Ninth Circuit affirmed in a nonprecedential memorandum. It found no legally sufficient showing of evident partiality or disqualifying nondisclosure. The challenged circumstances did not establish the kind of concrete, undisclosed interest that would justify overturning an award.
The panel also rejected the claim that the arbitrator manifestly disregarded the law. Even if a court might disagree with the arbitrator’s treatment of a California rule, ordinary legal error is not enough. Vacatur requires a much stronger showing that the arbitrator recognized governing law and deliberately refused to apply it.
Finally, the proceedings were not fundamentally unfair merely because Sywula’s counsel withdrew. He had roughly six weeks to retain replacement counsel before the hearing, a materially different situation from cases involving withdrawal only days before trial. The arbitrator could proceed without violating the basic procedural fairness required in arbitration.
Key Takeaways
- Judicial review of arbitration awards remains exceptionally narrow.
- A disagreement with an arbitrator’s reading of California law is not manifest disregard by itself.
- Evident-partiality arguments need a concrete undisclosed relationship or interest, not speculation.
- When counsel withdraws, the available replacement period and the party’s diligence matter to fundamental-fairness review.
- Parties should preserve objections during arbitration but should not expect post-award review to resemble an appeal on the merits.
Why It Matters
California businesses that select arbitration generally receive finality along with speed and privacy. This case reinforces that courts will not vacate an award simply because the losing party identifies a debatable legal ruling.
For counsel facing withdrawal or substitution near a hearing, the practical record matters: document efforts to find replacement counsel, request reasonable relief promptly, and explain concrete prejudice. A six-week interval may be viewed as sufficient absent stronger facts.