Arbitrator’s Early Withdrawal Leaves Parties Unsatisfied

Two commercial entities who had signed an arbitration agreement retained JAMS/Endispute and arbitrator John B. Bates to arbitrate their dispute.  At the conclusion of the arbitration hearing, Bates apparently announced that he was withdrawing as arbitrator, but that he was willing to continue to work with the parties as mediator.  Bates provided no ethical reason for his withdrawal.  One of the parties sued JAMS and Bates for breach of contract; Bates raised arbitral immunity as a defense.  The court rejected the defense, finding that Bates’s early withdrawal “defeats rather than serves the adjudicatory purpose of arbitration” underlying the immunity defense.

The case is Morgan Phillips, Inc. v. JAMS/Endispute, L.L.C., ___ Cal.Rptr.3d ___ (Cal. App. 2 Dist. June 20, 2006).

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