Illinova Generating Company

The Texas Supreme Court issued a decision in favor of Locke Lord client Illinova Generating Company – a subsidiary of Dynegy – in Tenaska Energy Inc. v. Ponderosa Pine Energy LLC.  The underlying case concerned a $125 million arbitration award in Ponderosa Pine Energy’s favor over the sale of a Cleburne power plant, which was later vacated by a trial court when it was found the arbitrator had failed to fully disclose the nature and extent of his relationship with Ponderosa’s counsel. The Dallas Court of Appeals reversed the judgment and confirmed the award on appeal, but the Supreme Court held that the arbitrator had a duty to fully disclose his relationships, and that his failure to do so created a reasonable impression of evident partiality. The Court’s opinion is significant because it reaffirms the duty of a neutral arbitrator to fully disclose all non-trivial facts and relationships with parties and their counsel that might create a reasonable impression of the arbitrator’s partiality. Brad Weber, Co-Chair of Locke Lord’s Antitrust Practice Group, led a trial team, including Associate Brad Knapp, that convinced a Dallas trial court to vacate the award.
Posted May 27, 2014.