Arbitration Panel Sanctions Lance Armstrong for Lying Under Oath in Previous Arbitration

Today, a tri-partite arbitration panel sanctioned Lance Armstrong $10 million, ordering him to pay that amount to a prize insurer (who insures price incentives for athletes), as punishment for lying under oath about doping during a previous arbitration among the same parties. SCA Promotions, Inc., the insurer, seeks confirmation of the award in a Texas state court.
According to the Wall Street Journal, “The prize insurer SCA Promotions Inc. asked a Texas state judge to confirm the arbitration award against Armstrong, in a filing Monday. It wants the court to enter a $10 million judgment against Armstrong and former team owner Tailwind Sports, a move which it believes will enable it to collect payment.”
As we all know, overturning an arbitration award is extremely difficult to do. The question here is whether this arbitration award represents the resolution of a new dispute or is the re-opening of a dispute that had previously been settled. Several years ago, after Armstrong testified in a previous arbitration that he was not involved in doping, the parties settled their dispute, which resulted in SCA paying 7.5 million dollars to Armstrong. This settlement agreement represented Armstrong’s bonuses, interests and attorney fees. In addition, the agreement stated that, “[n]o party may challenge, appeal or attempt to set aside” the settlement. It also said the agreement was “fully and forever binding.” The settlement agreement also conferred jurisdiction on the arbitration panel to resolve any disputes that might arise out of the settlement agreement.
After it learned that Armstrong was involved in doping, SCA sued, demanding over $12 million. Armstrong rejected this demand and claimed that Texas law did not permit the company to reopen the original settlement agreement. Characterizing the issue as sanctions for fraud, the arbitration panel agreed to conduct a second arbitration. The majority of arbitrators issued an award that requires Armstrong and Tailwind Sports to pay SCA $10 million as punishment for lying under oath and frustrating the arbitral proceedings.
It seems unlikely that the arbitration award will be overturned. Failing to correctly interpret Texas law is not a basis for overturning the award. The question whether the arbitrators exceeded their authority when they issued a sanction to Armstrong for lying under oath in the previous arbitration hearing also seems a long shot (although not impossible since this case appears to be unique). To protect the integrity of the arbitration process, arbitrators should be able to sanction a party who deliberately lied under oath about a material issue in dispute. The previous settlement agreement was based on fraud and thus should not be binding on the parties. As a side note, for those who do not typically read arbitration awards, it is not at all surprising to see the third arbitrator dissent from the panel’s decision. That arbitrator was party-appointed – appointed to the panel by Lance Armstrong and his company, Tailwind. To see the arbitrators’ opinions, go to

One thought on “Arbitration Panel Sanctions Lance Armstrong for Lying Under Oath in Previous Arbitration”

  1. I tend to forget that Lance Armstrong is from the DFW area, but his disastrous downfall is enlightening. Although he may have committed some sort of fraud that can be followed to the first arbitration resulting in his favor, the second outcome seems questionable.
    People often have negative feelings towards arbitration compared to other alternative dispute resolution, because of arbitration’s binding, non-appealable decisions. In this case, not only is an arbitration award vacated in a sense, but has also been appealed in a way (more than seven years down the road).
    As the dissent pointed out, this seems to go against any and all precedent and valid law in Texas. This result gives a new, overseeing power to arbitrators that could lead to a wave of new “re-arbitrations” for any reason found out after the fact.
    SCA had the opportunity to challenge the award up to 90 days afterward, and seven and a half years to revisit the subject through arbitration is literally unheard of.
    It seems as though the proper direction SCA should be required to take is through the court system in a civil action against Armstrong. Yes, there should be a remedy to fraudulent actions during arbitration, but to allow that remedy through the actual arbitration process (NINE YEARS LATER) could open up a huge can of worms of dual-arbitrations and not-so-binding rewards, changing the entire purpose and realm of arbitration as alternative dispute resolution.

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