A federal court in Pennsylvania recently confirmed a final arbitration award in favor of Choice Hotels, denying the franchisee’s motion to vacate the award. Choice Hotels Int’l, Inc. v. Jai Sai Baba LLC, 2025 WL 2636596 (E.D. Pa. Sept. 11, 2025).
Lathrop GPM LLP represented Choice Hotels in the case. The dispute stemmed from the franchisee’s allegations of fraud and breach of contract against Choice Hotels. Following a lengthy evidentiary hearing the arbitrator rejected all of the franchisee’s claims and awarded Choice Hotels its attorneys’ fees, costs, and expenses. Choice Hotels moved to confirm the award, while the franchisee sought to vacate it. The franchisee argued vacatur was warranted on three grounds: (1) misconduct, based on the arbitrator’s refusal to hear certain evidence; (2) evident partiality, because the arbitrator had previously served in multiple Choice Hotels arbitrations; and (3) that the arbitrator exceeded his authority by issuing the award later than anticipated.
The court rejected all three claims, emphasizing the strong presumption in favor of enforcing arbitration awards under the Federal Arbitration Act. First, the court held that the arbitrator provided the franchisee an adequate opportunity to present its case, including extending the hearing to allow additional time, and his refusal to allow cross-examination of one witness who submitted testimony via affidavit in arbitrator-ordered supplemental briefing did not produce an unfair hearing. Second, the court found no evident partiality because the franchisee knowingly agreed to the arbitrator after full disclosure of his prior cases. And third, although the AAA commercial arbitration rules contemplate a deadline for issuance of the award the contract itself imposed no strict deadline, and the court held that any delay did not prejudice the franchisee. The court confirmed the award in its entirety.