Verve Communications Pvt. Ltd. v. Software International Inc.

Verve Communications Pvt. Ltd. (Verve) (plaintiff) contracted to provide services to Software International Inc. (SII) (defendant). The contract contained an arbitration clause requiring binding arbitration of contract disputes, to be decided “entirely on the papers, with no live witnesses or appearances by any party,” pursuant to rules of the American Arbitration Association (AAA). At one point, the parties disputed whether SII owed a payment to Verve under the contract. In April 2010, Verve filed a demand for arbitration, and the parties mutually agreed on an arbitrator. In accordance with the AAA’s rules, the arbitrator conducted a scheduling conference, ordered a discovery cutoff by mid-September 2010, and set a briefing schedule. The arbitrator’s order stated that any discovery dispute was to be presented to the arbitrator “immediately” so as not to cause delay. Subsequently, SII retained new counsel, and the arbitrator extended the discovery period to November 4, 2010. The arbitrator also extended the briefing schedule and advised the parties, as before, to present discovery disputes “immediately.” On the date that reply briefs were due in December 2010, SII’s counsel requested an additional 60 days to conduct discovery to obtain access to a computer server owned by a company called Devix. The server supposedly contained information showing that work performed by Verve was deficient. The arbitrator denied SII’s request, finding that SII’s request was untimely and not sufficiently detailed in its reasoning. The arbitrator also found that SII had not provided sufficient evidence of Verve’s deficient services and accordingly drew an “adverse inference” against SII. The arbitrator concluded that Verve was entitled to payment. In district court, SII filed a motion to vacate the arbitrator’s award.