In Docs of CT LLC v. Biotek Services LLC, the Supreme Court of Georgia considered an appeal brought by Docs of CT LLC, seeking to vacate an arbitration award on the grounds that “the arbitrator exhibited partiality and engaged in misconduct.”
Docs of CT and Biotek submitted a contractual dispute to arbitration. A hearing was set to determine Biotek’s damages after the arbitrator found Docs of CT in default as to liability. Prior to the hearing, the arbitrator ruled that Docs of CT would not be permitted to introduce evidence at the damages hearing if it did not produce discovery set forth in a prior scheduling order. Docs of CT failed to produce the required discovery, and its counsel withdrew from the case before the hearing. The arbitrator permitted Docs of CT’s corporate representative to observe the hearing but not participate, and awarded Biotek more than $1.7 million in contract and trade secret damages, interest, and attorneys’ fees. Docs of CT then moved to vacate the arbitration award in state court alleging arbitrator misconduct and partiality. In support of the motion, Docs of CT submitted copies of emails between Biotek’s counsel and the arbitrator after Docs of CT’s counsel had withdrawn from the case. The emails included a transmittal of exhibits and a spreadsheet for calculating damages, which were requested by the arbitrator. The emails were not sent to Docs of CT’s corporate representative. Docs of CT argued that the emails constituted improper ex parte communications and that the arbitrator had engaged in misconduct and partiality by engaging in the ex parte communications with Biotek’s counsel.
The trial court denied the motion to vacate, and the court of appeals affirmed the denial. In affirming the decision, the court addressed the “prejudice” standard under applicable Georgia law for vacating an arbitration awards due to ex parte communications. The court rejected Docs of CT’s argument that ex parte communications during an arbitration proceeding are “per se” prejudicial, concluding that the case presented no basis for departing from the general rule that “the affected party must establish ‘actual’ prejudice by demonstrating how the conduct in question affected or influenced the outcome of the proceeding.” The court noted that federal court decisions addressing the prejudice standard have likewise applied the general rule requiring the affected party to prove prejudice. The court then found that Docs of CT had offered no basis for concluding that the ex parte communications affected or influenced the outcome of the arbitration, and affirmed the decision of the court of appeals.
Docs of CT, LLC v. Biotek Services, LLC, No. S24G0435 (Ga. May 28, 2025).
