Cooley Secures California Appellate Win Upholding Right to Arbitral Finality

San Diego – June 24, 2022 – Cooley secured an appellate victory for Interwest Capital, a prominent California-based real estate investment firm, and its CEO and chairman Alex Roudi, which reinforces the contractual right to arbitral finality. Partners Steve Strauss and Erin Trenda led the Cooley team advising Interwest and Roudi.

On June 22, Justice Terry B. O’Rourke of the California Fourth District Court of Appeal, joined by Justices Judith McConnell and Richard Huffman, issued a 35-page opinion reversing a lower court’s order that had vacated a reasoned arbitration award that ruled entirely in favor of Interwest and Roudi. In finding that the arbitration award was not reviewable on the grounds asserted below, the court’s opinion validated the arbitrator’s findings and award of damages in favor of Interwest and Roudi.

The underlying arbitration award stemmed from multiple years of contested arbitration across two matters – a document inspection and accounting dispute against Interwest and a shareholder derivative matter against Roudi – brought by an Interwest shareholder, Reza Paydar. The arbitration award denied the claims asserted by Paydar against Interwest and Roudi, which included Paydar’s request for millions in damages and attorneys’ fees. After finding that Paydar was driven by animus and had misused his director rights for his own self-interest, the arbitrator also awarded damages of nearly $2 million to Interwest and Roudi on counterclaims for Paydar’s breach of fiduciary duty and the shareholder agreement.

The court’s opinion reinforces the California Legislature’s strong support of private arbitration and the finality of arbitral awards, noting that an arbitrator’s decision may be subject to judicial review under “limited and exceptional” circumstances.

Read the full public opinion

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