Arbitrator Incapacity 12 Months after Panel Convened Does Not Require Appointment of New Panel to Fill Vacancy

The incapacity of a party-appointed arbitrator 12 months into a reinsurance arbitration and after the panel had convened and ruled on
certain discovery motions did not necessitate the appointment of an entirely new panel.

While the arbitration clause was silent regarding the filling of vacancies (not unusual), a Nebraska federal district court held that appointing an entirely new panel and starting the whole proceeding anew would cause inappropriate delay and waste resources. If the new panel member appeared to be at a disadvantage, according to the court, the two existing members were in the best position to determine the proper course of action to resolve the problem.

The designation of a new umpire was unnecessary because the incapacitated arbitrator had previously participated in the selection of the neutral at the inception of the process; thus, the arbitration clause requirements had been satisfied.

National American Insurance Co. v. Transamerica Occidental Life Insurance Co., Case No. 8:01CV7, 2002 U.S. Dist. LEXIS 4154 (D. Neb.Mar. 12, 2002).