United States Supreme Court Cases & Opinions

U.S. Supreme Court

Commonwealth Coatings v. Continental Cas., 393 U.S. 145 (1968)

Commonwealth Coatings Corp. v. Continental Cas. Co.

No. 14

Argued October 22, 1968

Decided November 18, 1968

393 U.S. 145

Syllabus

Petitioner, a subcontractor, sued the sureties on the prime contractor's bond to recover money allegedly due for a painting job. Pursuant to the arbitration provision in the contract, petitioner appointed an arbitrator, the prime contractor appointed another, and these two appointed a third. The third arbitrator was an engineering consultant whose services were used sporadically by the prime contractor, resulting in fees of about $12,000 over a period of four to five years. Petitioner challenges the arbitration award on the ground that this close business connection was not revealed until after the award was made. The Court of Appeals affirmed the District Court's refusal to set aside the award.

Held: Arbitrators should disclose to the parties any dealings which might create an impression of possible bias, and since the business connection between the arbitrator and the prime contractor was not disclosed here, the award can be vacated under § 10 of the United States Arbitration Act, which authorizes vacation of an award "procured by . . . undue means" or "where there was evident partiality . . . in the arbitrators." Pp. 393 U. S. 146-150.

382 F.2d 1010, reversed.