Oracle Corporation v. Wilson
OPINION AND ORDER re: 5 MOTION to Vacate Arbitration Award. filed by Oracle Corporation: Oracle Corporation ("Oracle" or "Petitioner") petitions this Court, pursuant to Section 9 of the Federal Arbitration Act (&q uot;FAA"), to vacate an arbitration award against it and in favor of Felicia Wilson ("Wilson" or "Respondent"). Oracle alleges that the Arbitrator, Betty Weinberg Ellerin, refused to hear pertinent and material evidence and d isregarded a dispositive contractual provision. In Wilson's opposition, she asks the Court to modify the rate of interest applied. For the reasons stated above, Petitioner's motion to vacate the arbitration award and Respondent's request to modify the interest rate are DENIED. The Clerk of the Court is respectfully directed to terminate Doc. 5 and close the case. (Signed by Judge Edgardo Ramos on 8/22/2017) (jwh)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
OPINION AND ORDER
– against –
17 Civ. 554 (ER)
Oracle Corporation (“Oracle” or “Petitioner”) petitions this Court, pursuant to Section 9
of the Federal Arbitration Act (“FAA”), to vacate an arbitration award against it and in favor of
Felicia Wilson (“Wilson” or “Respondent”). Oracle alleges that the Arbitrator, Betty Weinberg
Ellerin, refused to hear pertinent and material evidence and disregarded a dispositive contractual
provision. In Wilson’s opposition, she asks the Court to modify the rate of interest applied.
For the following reasons, Oracle’s motion to vacate the arbitration award and Wilson’s
request to modify the rate of interest are DENIED.
A. Factual Background
At all relevant times, Wilson was employed by Oracle as a salesperson. Pet. Vacate Arb.
Award ¶ 9. She sold Oracle’s software products and services to its business customers and was
paid a commission on those sales. Id.; Mot. Vacate Arb. Award at 2. As relevant to this petition,
the amount of her commission was governed by two documents: (1) a fiscal year Incentive
Compensation Terms and Conditions, which set forth the compensation terms applicable to
Oracle salespersons generally (“Terms and Conditions”); and (2) a fiscal year Individualized
Compensation Plan (“ICP”), which set forth her individualized commission rates. Collins Decl.
Ex. 6 (“Final Award”) at 1; Collins Decl. Ex. 3 (“Mot. to Dismiss”) at 2.
The ICP provides, inter alia, that “Commission for any sales credit from a single
customer in excess of 250% of quota in the given fiscal year will be calculated at 0.2x of the tier
1 rate” (the “Single Customer Provision”). Collins Decl. Ex. 3 Ex. 1 (“ICP”) at 1. It also
establishes the “Applications (EPM) Sales Target” 1 at $2,969,480. Id. The Terms and
Conditions allow for such reductions on commissions in a section entitled “Commissions that
Exceed Maximum Commission or Deal Threshold.” Terms and Conditions at 5-6. That section
states, “Cumulative Sales Credit that exceeds 250% of the acceleration target for Plans that
include multi-tier rate schedules may be subject to a modified Commission Rate as detailed in
the Employee’s Individualized Compensation Plan.” Id. It further explains that the reduced
commission rates “have been established to ensure reasonable compensation is paid, especially
in the case of unplanned windfalls and unexpected gains and that earnings reflect a reasonable
valuation of the Employee’s contribution toward a transaction.” Id. at 5. In other words, the
apparent purpose of the foregoing provisions is to ensure that genuine effort on the part of
salespersons is adequately rewarded while at the same time preventing excessive commissions
for relatively modest efforts.
The Terms and Conditions define “Sales Target” as “the sales goal set forth in the Individualized Compensation
Plan.” Collins Decl. Ex. 3 Ex. 2 (“Terms and Conditions”) at 80. Oracle argued during the arbitration proceeding
that the Applications (EPM) Sales Target is the same as a “quota.” Mot. to Dismiss at 3. Wilson stated that “Sales
Target” was a specifically defined term under the Terms and Conditions that is not interchangeable with the term
“quota.” Collins Decl. Ex. 4(“Opp. Mot. to Dismiss”) at 5-6.
In the fiscal year ending in May 31, 2014, Wilson’s commissionable sales totaled
$10,456,055.14. Final Award at 1. The entirety of that amount was to a single customer, 2
Pearson, Inc. (“Pearson”), an education publication and services company. Id.; Mot. to Dismiss
at 4. Wilson had been working on the Pearson sale for 30 months, and avers that she attended
324 formal calendared engagements, and reviewed, authored or participated in nearly 14,000
emails and other documents for the sale. Opp. Pet. Vacate at 1-2. Wilson claims that her
supervisors assured her multiple times that the Single Customer Provision would not apply to the
Pearson sale. Wilson Aff. ¶ 5. In July 2014, her commission on the Pearson sale was calculated
at $873,638.10. Opp. Pet. Vacate at 6. However, on August 11, 2014, Oracle advised Wilson in
an email that it would be deducting $257,355.79 from that amount pursuant to the Single
Customer Provision. Wilson Aff. at ¶ 2. Wilson states that her supervisors urged her to initiate
an internal Compensation Review (“CERT”) to appeal this decision. Id. at ¶ 5.
On August 20, 2014, Wilson filed a CERT application online. Opp. Mot. to Dismiss at 9,
Ex. B. The application was recommended for approval throughout seven levels of review, but it
was ultimately rejected by the highest level of management. Id.
B. Procedural History
In or around December 2015, Wilson filed an arbitration claim against Oracle pursuant to
the Employment Agreement & Mutual Agreement to Arbitrate (“Arbitration Agreement”) that
requires her to submit all “claims arising out of or related to [her] Oracle employment” to
arbitration. Pet. Vacate Arb. Award ¶¶ 10, 12. The Arbitration Agreement further requires all
arbitration proceedings to be conducted pursuant to the FAA, and the Judicial Arbitration &
Wilson disputes that Pearson should be considered a single customer because Pearson is a “compound group
customer” that encompasses its many affiliates. Opp. Mot. to Dismiss. at 4.
Mediation Services (“JAMS”) Employment Arbitration Rules and Procedures (“JAMS Rules”).
Id. at ¶ 11.
On or around April 18, 2016, Wilson submitted a Statement of Claim in the arbitration
proceeding, alleging breach of contract and breach of the covenant of good faith and fair dealing
in processing Wilson’s CERT. Id. at ¶ 12; Collins Decl. Ex. 2 at 3. On May 20, 2016, Oracle
filed a Motion to Dismiss Based on Express Contractual Terms (“Motion to Dismiss”) pursuant
to JAMS Rule 18, which permits a party to request summary disposition of a claim or issue upon
notice to the other interested parties. 3 Pet. Vacate Arb. Award at ¶ 13. In its Motion to Dismiss,
Oracle contended that Wilson’s commission on the Pearson sale was subject to the Single
Customer Provision and that her compensation was properly calculated in accordance with that
provision. See generally Mot. to Dismiss. On or around June 11, 2016, Wilson filed her
Opposition to the Motion to Dismiss, arguing that the Single Customer Provision did not apply
because (1) Pearson was not a single customer, (2) there was no agreed upon “quota” under the
Single Customer Provision, and (3) the term “tier 1 rate” in the provision at issue is ambiguous at
best. Opp. Mot. to Dismiss at 3. Importantly, she also made a cross-motion for a summary
award, requesting that the Arbitrator rule in her favor based on the undisputed facts. Id. at 1, 9.
On August 30, 2016, the Arbitrator held oral argument on the Motion to Dismiss (“Oral
Argument”). Pet. Vacate Arb. Award ¶ 16. Counsel for both sides attended the Oral Argument,
as well as Wilson, and Matt Feiner (“Feiner”), an Oracle in-house counsel. Goldston Decl.
¶ 3(a); Collins Supp. Decl. ¶ 4. Several days prior to the Oral Argument, the Arbitrator denied
Wilson’s request to present witness testimony. Pet. Vacate Arb. Award ¶ 16. The Arbitrator
JAMS Rule 18 provides that “[t]he Arbitrator may permit any Party to file a Motion for Summary Disposition of a
particular claim or issue, either by agreement of all interested Parties or at the request of one Party, provided other
interested Parties have reasonable notice to respond to the motion.”
stated that she would only hear attorney arguments, but allegedly noted that if she denied the
motion, she would schedule an evidentiary hearing. Id. However, during the Oral Argument 4,
the Arbitrator asked Wilson questions, and Wilson answered, providing what Oracle refers to as
unsworn testimony. 5 Id. at ¶ 17. Oracle claims that it did not receive any notice that the
Arbitrator was going to hear such unsworn testimony. Id. However, Oracle did not object to the
questioning or cross-examine Wilson. Id.; Goldston Decl. Ex. 1.
After the Oral Argument, by letter dated September 12, 2016, Oracle wrote to the
Arbitrator, stating that the case should be decided on the contractual language in the ICP, and
that any evaluation of the underlying business purpose behind the Single Customer Provision is
irrelevant given the express contractual terms. Collins Supp. Decl. Ex. 1. Nevertheless, it
offered to present witness testimony on the business purpose behind the Single Customer
Provision if the Arbitrator thought it necessary since it had not provided any fact witnesses at
Oral Argument. Id.
On September 15, 2016, the Arbitrator conducted a conference call (“Conference Call”),
in which counsel for both parties participated. Goldston Decl. Ex. 1. Notes of the call taken by a
JAMS administrator who was also on the call shows that the Arbitrator “asked each side to raise
any objections to issue a decision based on [Wilson]’s in person testimony at the August 30th inperson hearing and the papers submitted to the Arbitrator.” Id. Counsel for Wilson did not
object. Id. He stated that the Arbitrator should decide on the submitted papers if she finds the
papers to be sufficient, and that the Arbitrator should conduct an evidentiary hearing if she
The Oral Argument appears not to have been recorded or transcribed, but the parties have provided declarations
describing statements made at the proceeding.
Wilson contends that the Arbitrator also heard testimony from Feiner, characterizing Feiner as an Oracle executive
responsible for Oracle’s employee contract management and its alleged policies in connection therewith, but Oracle
claims that Feiner had only spoken at Oral Argument in his capacity as Oracle’s attorney, not as a fact witness.
Goldston Decl. ¶ 3(a); Wilson Aff. ¶ 4; Collins Supp. Decl. ¶ 4.
determined that the contract was ambiguous. Id. The notes of the Conference Call further state
that “[Oracle]’s counsel waived the opportunity to cross examine.” Id. The Arbitrator stated that
she would issue her decision 60 days from August 30, 2016. Id.
On November 1, 2016, JAMS issued the Final Award, denying Oracle’s Motion to
Dismiss and granting Wilson’s cross-motion for a summary award, awarding Wilson the
remaining balance of her commission prior to the application of the Single Customer
Provision—$257,335.79—plus interest at 3% per annum “in light of prevailing money market
conditions.” Pet. Vacate Arb. Award at ¶ 18; Final Award at 4. In granting the award, the
Arbitrator refused to apply the Single Customer Provision to the Pearson sale. Id. As the award
makes clear, the Arbitrator did not interpret the Single Customer Provision in isolation, but read
it in conjunction with the Terms and Conditions, which provided that commission modifications
have been “established to ensure reasonable compensation is paid, . . . and that earnings reflect a
reasonable valuation of the Employee’s contribution toward a transaction.” Terms and
Conditions at 5; see Final Award at 2-3. Based on the “voluminous uncontradicted documentary
evidence [that] overwhelmingly demonstrates that [Wilson’s] work on [the Pearson sale] was
extraordinary,” the Arbitrator determined that the full pre-modified commission on the Pearson
sale would not have given Wilson an “unplanned windfall” as that term is contemplated in the
Terms and Conditions. Final Award at 2-3. Specifically, she noted that the sale involved over 2
years of intensive effort. Id. at 3. In fact, the Arbitrator noted that Wilson’s superiors had also
interpreted the Single Customer Provision to be inapplicable to her extensive work on the
Pearson sale. Id. Thus, she determined that the Single Customer Provision should not have been
invoked to reduce Wilson’s commission on the Pearson sale. Id. at 4.
On January 25, 2017, Petitioner filed the instant motion to vacate the arbitration award.
Oracle argues that the Arbitrator failed to conduct an evidentiary hearing and disregarded the
parties’ contractual agreement. Doc. 5. On February 24, 2017, Wilson filed her opposition to
the instant motion and asserted that the award should be confirmed, except that the Arbitrator
improperly fixed a prejudgment interest of 3% instead of the applicable New York statutory rate
of 9%. Doc. 16.
The FAA provides a “streamlined” process for a party seeking “a judicial decree
confirming an award, an order vacating it, or an order modifying or correcting it.” Hall St.
Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 582 (2008). District courts “treat a petitioner’s
application to confirm or vacate an arbitral award as akin to a motion for summary judgment.”
City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 136 (2d Cir. 2011) (internal
quotation marks omitted). The award should be confirmed “if a ground for the arbitrator’s
decision can be inferred from the facts of the case.” D.H. Blair & Co., Inc. v. Gottdiener, 462
F.3d 95, 110 (2d Cir. 2006) (quoting Barbier v. Shearson Lehman Hutton, Inc., 948 F.2d 117,
121 (2d Cir. 1991)). “The arbitrator’s rationale for an award need not be explained, and . . .
[o]nly a barely colorable justification for the outcome reached by the arbitrators is necessary to
confirm the award.” Id. (internal quotation marks omitted). Confirmation of an arbitration
award is thus “a summary proceeding that merely makes what is already a final arbitration award
a judgment of the court, and the court must grant the award unless the award is vacated,
modified, or corrected.” Id. (internal quotation marks omitted). This “severely limited” review
promotes the twin goals of arbitration, namely to settle disputes efficiently and avoid long and
expensive litigation. Willemijn Houdstermaatschappij, BV v. Standard Microsystems Corp., 103
F.3d 9, 12 (2d Cir. 1997) (citations omitted).
Conversely, “[a] party moving to vacate an arbitration award has the burden of proof, and
the showing required to avoid confirmation is very high.” D.H. Blair & Co., 462 F.3d at 110
(citation omitted). The party moving to vacate an award bears “the heavy burden of showing
that the award falls within a very narrow set of circumstances delineated by statute and case
law.” Duferco Int’l Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383, 388 (2d Cir.
2003). Thus, a party seeking vacatur of an arbitrator’s decision “must clear a high hurdle.”
Stolt-Nielson S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 671 (2010). Under the FAA, a court
may vacate an award:
(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing,
upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the
controversy; or of any other misbehavior by which the rights of any party have been
(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a
mutual, final, and definite award upon the subject matter submitted was not made.
9 U.S.C. § 10(a) (emphasis added). In addition, as “judicial gloss” on these specific grounds for
vacatur, the Second Circuit has held that “the court may set aside an arbitration award if it was
rendered in manifest disregard of the law.” Schwartz v. Merrill Lynch & Co., Inc., 665 F.3d 444,
451 (2d Cir. 2011) (internal quotation marks omitted).
A. Fundamentally Fair Hearing
Under Section 10(a)(3) of the FAA, vacatur is warranted if, inter alia, the arbitrator was
guilty of misconduct in refusing to hear evidence pertinent and material to the controversy.
9 U.S.C. § 10(a)(3). Courts have interpreted Section 10(a)(3) to permit vacatur only if the
misconduct amounts to violation of “fundamental fairness.” Tempo Shain Corp. v. Bertek, Inc.,
120 F.3d 16, 20 (2d Cir. 1997). “Arbitral misconduct typically arises where there is proof of
either bad faith or gross error on the part of the arbitrator.” In re Cragwood Managers, L.L.C.
(Reliance Ins. Co.), 132 F.Supp.2d 285, 287 (S.D.N.Y. 2001) (internal quotations marks and
modifications omitted). Arbitrators must “give each of the parties to the dispute an adequate
opportunity to present its evidence and argument,” but need not follow “all the niceties observed
by the federal courts” such as the Federal Rules of Civil Procedure or the Federal Rules of
Evidence, nor hear all of the evidence proffered by a party. Tempo Shain Corp., 120 F.3d at 20
(citations omitted); see also Glob. Scholarship All. v. Wyckoff Heights Med. Ctr., No. 09 Civ.
8193 (RMB), 2010 WL 749839, at *2 (S.D.N.Y. Feb. 24, 2010). There is also no bright line rule
that requires arbitrators to conduct oral hearings. ST Shipping & Transp. PTE, Ltd. v.
Agathonissos Special Mar. Enter., No. 15 Civ. 4983 (AT), 2016 WL 5475987, at *4 (S.D.N.Y.
June 6, 2016) (citations omitted). To demonstrate arbitral misconduct, the challenging party
must show that his “right to be heard has been grossly and totally blocked,” Stifel, Nicolaus &
Co. v. Forster, No. 14 Civ. 6523 (RWS), 2015 WL 509684, at *5 (S.D.N.Y. Feb. 6, 2015)
(internal quotation marks omitted) (emphasis added), and that this exclusion of evidence
prejudiced him, Rai v. Barclays Capital Inc., 739 F. Supp. 2d 364, 372 (S.D.N.Y. 2010), aff’d,
456 F. App’x 8 (2d Cir. 2011).
Oracle argues that the Arbitrator refused to hear pertinent and material evidence when
she issued the Final Award in response to its Motion to Dismiss. It asserts that denial of a
motion to dismiss must be followed by discovery and an evidentiary hearing, and thus, issuance
of an award in Wilson’s favor was a refusal to permit such discovery and hearing. However, as
Oracle concedes, there were two pending motions before the Arbitrator: its Motion to Dismiss
and Wilson’s cross-motion for summary disposition. Pet. Vacate Arb. Award ¶¶ 14-15; see Opp.
Mot. to Dismiss at 1, 9. Specifically, Wilson requested “an award in her favor [on the contract
claim], if that can be determined without hearing.” Opp. Mot. to Dismiss at 1 (emphasis added).
Wilson further stated that even though her alternative claim of breach of the covenant of good
faith and fair dealing based on her rejected CERT application may require a hearing, that issue
“may never  be reached unless Oracle’s contract position is sustained.” Id. (emphasis added).
Oracle did not object to Wilson’s filing of the cross-motion nor does it argue that her crossmotion prior to a hearing was invalid for any reason. In fact, JAMS Rule 18 permits one party to
submit a motion for summary disposition of a particular claim or issue.
Oracle nonetheless asserts that the language of the Final Award demonstrates that it was
issued only in response to its Motion to Dismiss, and not in response to Wilson’s cross-motion.
Oracle contends that the Arbitrator’s decision was not rooted in any of the three counterarguments proffered by Wilson in her Opposition to the Motion to Dismiss, which also served as
her cross-motion, and that the Final Award does not specifically mention Wilson’s cross-motion.
This argument is unavailing. As discussed above, the Second Circuit has held that an arbitrator’s
rationale for an award “need not be explained, and the award should be confirmed ‘if a ground
for the arbitrator’s decision can be inferred from the facts of the case.’” D.H. Blair & Co., Inc.,
462 F.3d at 110 (quoting Barbier, 948 F.2d at 121). A ground for the Final Award can be easily
inferred from the record here. In addition to the three counter-arguments Wilson made in her
Opposition to the Motion to Dismiss, she generally requested that the Arbitrator issue an award
in her favor based on the undisputed facts. See Opp. Mot. to Dismiss at 1-3, 9. Specifically, the
facts she referenced, which she supported with more than 600 pages of documentary evidence,
included the 324 formal calendared engagements and more than 14,000 emails she participated
in for the Pearson sale over a 30 month period, explicit assurances from her supervisors, and
favorable determinations through seven levels of CERT review that the Single Customer
Provision would not apply to the Pearson sale. Id. at 2-3, 8-9. Thus, it can be inferred that the
Arbitrator granted the Final Award on Wilson’s contract claim based on what she determined to
be uncontroverted evidence presented by Wilson. 6 Final Award at 3-4.
There is also no evidence on the record which demonstrates that the Arbitrator prevented
Oracle from presenting pertinent and material evidence before she issued the Final Award.
Courts have held that a party is not denied a fundamentally fair hearing if it did not avail itself of
the opportunity to be heard by proffering further evidence, seeking discovery, or requesting an
evidentiary hearing. See Inficon, Inc. v. Verionix, Inc., 182 F. Supp. 3d 32, 41 (S.D.N.Y. 2016),
appeal withdrawn (July 15, 2016) (holding that the petitioner was not denied a fundamentally
fair hearing when it made the strategic choice not to present further evidence); Capgemini U.S.
LLC v. Sorensen, No. 04 Civ. 7584 (JGK), 2005 WL 1560482, at *7 (S.D.N.Y. July 1, 2005)
(“Capgemini cannot now argue that it was denied a fundamentally fair hearing when it did not
avail itself of the opportunity to be heard”); Matter of Arbitration between Carina Int’l Shipping
Oracle further attempts to show that even Wilson had expected that there would be a hearing by noting that
Wilson’s counsel, during the Conference Call, requested a hearing should the Arbitrator find that the contract was
ambiguous. This argument also fails. The requested hearing was specifically conditioned on a finding that the
contract was ambiguous, thereby preventing a decision on the submitted papers. The Arbitrator did not so find. As
the Final Award makes clear, she interpreted the contracts without reference to parol evidence. See Final Award.
Corp. & Adam Mar. Corp., 961 F. Supp. 559, 567 (S.D.N.Y. 1997) (“By its own tactical choice,
Adam waived the right to argue that the awarding panel committed misconduct under 9 U.S.C.
§ 10(a)(3) by not re-opening the evidentiary hearings”). JAMS Rule 27(a) also provides that
failure to object to a violation of or failure to comply with the JAMS Rules will be deemed
waiver of any objections. 7
The record shows that Oracle made a strategic decision not to rely on language aside
from the Single Customer Provision; a position that it reiterated in its September 12, 2016 letter
to the Arbitrator. See Collins Supp. Decl. Ex. 1. Indeed, the record shows that in response to
Wilson’s more than 600 pages of documentary evidence, Oracle did not proffer any documents.
It merely relied on one document that Wilson had already submitted, an amendment to the
contract between Oracle and Pearson, to dispute Wilson’s assertion that Pearson was not a single
customer. Collins Decl. Ex. 5 at 1-2. In addition, the only evidentiary request it made to the
Arbitrator was to present testimony on the business purpose behind the Single Customer
Provision if the Arbitrator thought it necessary, which it simultaneously admitted was “irrelevant
given the express contractual terms.” 8 Collins Supp. Decl. Ex. 1.
Furthermore, during the Conference Call, Oracle expressly turned down an opportunity to
object to the procedure the Arbitrator proposed to follow, the same procedure which Oracle now
decries as improper. See Goldston Decl. Ex. 1. The notes of the Conference Call reflect that the
Arbitrator specifically asked “each side to raise any objections to issue a decision based on
JAMS Rule 27(a) provides, “If a Party becomes aware of a violation of or failure to comply with these Rules and
fails promptly to object in writing, the objection will be deemed waived, unless the Arbitrator determines that waiver
will cause substantial injustice or hardship.”
There is no arbitral misconduct where arbitrators have refused to hear evidence that is irrelevant or cumulative.
GFI Sec. LLC v. Labandeira, No. 01 Civ. 00793(JFK), 2002 WL 460059, at * 6 (S.D.N.Y. Mar. 26, 2002) (“An
award cannot be set aside because of an arbitrator’s refusal to hear cumulative or irrelevant evidence.”) (citation
[Wilson]’s in person testimony at the August 30th in-person hearing and the papers submitted to
the Arbitrator.” Id. The notes do not show that Oracle made any objections, but rather, state that
Oracle’s counsel waived the opportunity to cross-examine Wilson. 9 Id. On these facts, Oracle
cannot credibly assert that its “right to be heard has been grossly and totally blocked.” Stifel,
Nicolaus & Co., 2015 WL 509684 at *5.
Oracle has also failed to show that it was prejudiced by the alleged exclusion of evidence
as it does not identify the evidence that it would have presented, or why that evidence would
have caused the Arbitrator to resolve the dispute in its favor. Courts have found that such lack of
particularity defeats a claim for vacatur. NYKCool A.B. v. Pac. Fruit, Inc., 507 F. App’x 83, 8889 (2d Cir. 2013) (refusing to vacate the arbitration award where, inter alia, there was no
identified reason why an evidentiary hearing on the issue of joint and several liability would
have helped the arbitrators resolve the issue in the challenging party’s favor); see also ST
Shipping & Transp. PTE, Ltd., 2016 WL 5475987 at *5 (refusing to vacate the arbitration award
under Section 10(a)(3) and noting that petitioner failed to identify with any particularity what
evidence further discovery and a hearing would have adduced). Accordingly, the Court finds
that vacatur under Section 10(a)(3) is unwarranted.
B. Contractual Interpretation
A court can only vacate an award for manifest disregard of a commercial contract when
the arbitral award “contradicts an express and unambiguous term of the contract or if the award
so far departs from the terms of the agreement that it is not even arguably derived from the
Oracle argues that it did not object to Wilson’s testimony because, like the extra-contractual evidence in her
papers, matters outside the pleadings are typically not considered on a motion to dismiss, and thus, no objection
would have been necessary. However, as discussed above, there was also a pending cross-motion for a summary
award premised on what Wilson purported were undisputed facts, which she was allowed to bring under JAMS Rule
contract.” Westerbeke Corp. v. Daihatsu Motor Co., 304 F.3d 200, 222 (2d Cir. 2002). “[A]s
long as the arbitrator is even arguably construing or applying the contract and acting within the
scope of his authority, that a court is convinced he committed serious error does not suffice to
overturn his decision.” United Bhd. of Carpenters & Joiners of Am. v. Tappan Zee Constructors,
LLC, 804 F.3d 270, 275 (2d Cir. 2015) (quoting United Paperworkers Int’l Union v. Misco, Inc.,
484 U.S. 29, 38 (1987)). Therefore, Oracle must overcome an extremely high hurdle and
establish that the Arbitrator was not even arguably construing or applying the contracts at issue,
and that the award so far departs from the contracts that it is not even arguably derived from
The Court easily concludes that the Arbitrator was construing and applying the contracts,
and that her interpretation of the Single Customer Provision derived from the contractual terms.
From the face of the Final Award, it is evident that the Arbitrator examined the Single Customer
Provision not in isolation, but in conjunction with the section of the Terms and Conditions
entitled “Commissions that Exceed Maximum Commission or Deal Threshold.” 10 Final Award
at 2-3. That section specifically provided that provisions modifying the commission rate—such
as the Single Customer Provision—were established for a specific purpose, namely “to ensure
reasonable compensation is paid, especially in the case of unplanned windfalls and unexpected
gains and that earnings reflect a reasonable realization of the Employee’s contribution toward a
transaction.” Id. Based on this language, the Arbitrator construed the Single Customer
Provision to apply only if the commission on the Pearson sale would result in Wilson receiving
unreasonably excessive compensation.
Thus, the Arbitrator did precisely what she was required to do—she construed the two contracts in order to “give
full meaning and effect to all of its provisions.” LaSalle Bank Nat. Ass’n v. Nomura Asset Capital Corp., 424 F.3d
195, 206 (2d Cir. 2005) (citation omitted).
After thus construing the Single Customer Provision, the Arbitrator examined Wilson’s
contribution to the Pearson sale. The Arbitrator found that “the voluminous uncontradicted
evidence overwhelmingly demonstrates that [Wilson’s] work on [the Pearson sale] was
extraordinary.” Id. at 3. She noted that the undisputed facts demonstrates that the commission
was not “unplanned” or unexpected because Wilson’s work on the Pearson sale involved over 2
years of “intensive effort,” and that she received multiple assurances from her supervisors that
the Single Customer Provision would not be read to apply to the sale. Id. Based on these facts,
the Arbitrator determined that Wilson’s extensive efforts were proportional to the premodification commission under the ICP. Id. at 3-4.
Accordingly, the Court cannot find that this analysis comes close to a manifest disregard
on the part of the Arbitrator of the contracts at issue, and will not vacate the award merely
because Oracle disagrees with the Arbitrator’s interpretation. The Court finds that the award
validly applies the Single Customer Provision, and declines to vacate it.
C. Interest Rate
Wilson also requests that the Court modify the amount of the award pursuant to Section
11 of the FAA to reflect a prejudgment interest at the statutory rate of 9% under New York law
instead of the 3% awarded by the Arbitrator. Section 11 allows a district court to modify or
correct an arbitration award for any of the following mistakes:
(a) Where there was an evident material miscalculation of figures or an evident
material mistake in the description of any person, thing, or property referred to in
(b) Where the arbitrators have awarded upon a matter not submitted to them,
unless it is a matter not affecting the merits of the decision upon the matter
(c) Where the award is imperfect in matter of form not affecting the merits of the
9 U.S.C. § 11. Wilson does not specify which subsection it is seeking the modification under,
nor provide any case law supporting her position. Oracle states that JAMS Rule 24(g) gives the
Arbitrator discretion to determine the applicable interest rate “at such rate and from such date as
the Arbitrator may deem appropriate.”
The Court finds that none of the subsections of Section 11 allow the Court to adjust the
interest rate. Under Section 11(a), a court can only modify the calculation of an award if there is
an evident material miscalculation of figures as a result of “some careless or obvious
mathematical mistake.” Gold v. Opera Sols., LLC, No. 16 Civ. 8121 (JPO), 2017 WL 3267770,
at *3 (S.D.N.Y. Aug. 1, 2017) (citation omitted). There is no such evident material
miscalculation. Rather, the Final Award provides that the Arbitrator is applying a 3% interest
“in light of prevailing money market conditions” pursuant to JAMS Rule 24(g). Final Award at
4. As Oracle asserts, JAMS Rule 24(g) allows the Arbitrator to fix interest “at such rate and
from such date as the Arbitrator may deem appropriate.”
Section 11(b) is also inapplicable since there is no contention that the Arbitrator had
awarded upon a matter not submitted to her. Lastly, Section 11(c) is “limited only to matters of
form not affecting the merits of the controversy and ‘does not license the district court to
substitute its judgment for that of the arbitrators.’” LLT Int’l, Inc. v. MCI Telecomms. Corp., 69
F.Supp.2d 510, 517 (S.D.N.Y. 1999) (quoting Diapulse Corp. of America v. Carba, Ltd., 626
F.2d 1108, 1110 (2d Cir. 1980)); see also Hartford Fin. Holdings, Inc. v. Singer, No. 08 Civ.
2459 (PKC), 2010 WL 1838843, at *5 (S.D.N.Y. May 4, 2010). Were the Court to modify the
interest rate to reflect the New York statutory rate, it would be replacing the judgment of the
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