B/E Aeropsace, Inc., v. Jet Aviation St. Louis (S.D.N.Y., July 1, 2011)
Plaintiff sought a temporary restraining order and preliminary injunction staying its upcoming arbitration with defendant. The arbitration is administered by defendant The American Arbitration Association (“AAA”) and stems from a dispute involving allegedly incorrect engineering data plaintiff provided to defendant. The crux of plaintiff’s complaint is that the arbitrators selected by defendants do not meet the requisite qualifications for arbitrators of disputes between plaintiff and defendant as set forth in the arbitration clause of their contract.
The court has jurisdiction to hear this matter under Section 4 of the Federal Arbitration Act. Specifically, the court held that where the “parties have agreed to arbitrate, but disagree as to the operation or implementation of that agreement, under the [FAA] it is properly a matter for the court.
In order to obtain a preliminary injunction, an applicant must show “(1) irreparable harm in the absence of the injunction and (2) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the movant’s favor.”
The court held that plaintiff is unlikely to succeed on the merits of his claim. Specifically, the court held that the two arbitrators at issue were qualified as defined by the arbitration clause. The arbitration clause only required arbitrators that are “professional business persons knowledgeable of the aircraft industry.”
With respect to the first arbitrator he conducts a full-time dispute resolution practice where he arbitrates and mediates complex business disputes, as well as being a former judge, processor, and name partner of a law firm. That qualifies him as a professional business person. In addition, with regards to knowledge of the aircraft industry, his current alternative dispute resolution practice focuses on the aircraft industry. He has resolved claims involving aircrafts, including manufacturing defects, inaccuracies in manuals, and other related issues. These experiences serve to make him knowledgeable of the aircraft industry.
With respect to the second arbitrator he qualifies as a professional business person because he is a name partner at a law firm and also has experience providing professional alternative dispute resolution services. In addition, for two years he served as outside counsel to Piper Aircraft which also qualifies him as a person who is knowledgeable of the aircraft industry.
Since plaintiff cannot prove that he will likely succeed on the merits of his claim, he cannot meet the elements for an injunction.
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