Carlton Fields

The dispute involved Telemicro’s breach of a contract with Major League Baseball Properties for the rights to broadcast MLB games in the Dominican Republic. Telemicro failed to make payments under the contract, prompting MLB to terminate the contract and demand arbitration. In response to the arbitration demand, Telemicro sought a stay of the arbitration proceedings in a New York state court, and failed to submit an arbitrator ranking list to the American Arbitration Association. As a result, the AAA deemed Telemicro to have accepted the entire list of proposed arbitrators and made an appointment from it. Shortly thereafter, Telemicro’s request for a stay was denied. After a six-month proceeding, the arbitrator issued a final award to MLB, including an award for attorneys’ fees.

On the motion to confirm the award before the Southern District of New York, Telemicro argued that the decision to proceed with the appointment of an arbitrator despite the pendency of its motion for stay in New York state court constituted a due process violation. Telemicro argued that it would not have been able to participate in the selection of the arbitrator without waiving its challenge to the jurisdiction of the arbitration. The court was not persuaded, noting that Telemicro failed to explain why it waited until the last day the list was due to seek a stay, and further that Telemicro took no action to challenge the appointment of the arbitrator within the arbitration process after the stay was denied. Furthermore, MLB made “a credible argument” that Telemicro’s submission of the list of potential arbitrators would not have waived its right to seek a stay.

Telemicro also argued that the arbitrator manifestly disregarded the law when making the award of attorney’s fees. The parties’ contract, however, stated that Telemicro would “reimburse MLB for any attorney’s fees and all costs and other expenses incurred by MLB in connection with the breach” of the agreement. Lastly, the court found Telemicro’s argument that the arbitrator acted in manifest disregard of the law because he viewed the MLB’s invoices in camera to be baseless, stating that such reviews are frequently performed in camera.

Major League Baseball Props., Inc. v. Corporacion de Television y Microonda Rafa, S.A., Case No. 1:19-cv-8669-MKV (S.D.N.Y. Sept. 14, 2020).