Hume Publishing, 902 F.2d at 931 (citing O.R. Thus, the Federal Arbitration Act allows arbitration to proceed with only a summary hearing and with restricted inquiry into factual issues. In applying the statutory grounds for the granting of a motion to vacate an award, we always bear in mind that the basic policy of conducting arbitration is to offer a means of deciding disputes expeditiously and at lower costs. United Steelworkers of America, 823 F.2d 1289 (9th Cir. Hoteles Condado Beach, 763 F.2d at 38 Sunshine Mining Co. Arbitration proceedings are not constrained by formal rules of procedure or evidence. Only after it is determined that there could be no proper basis for the award, should a court consider looking beyond the statute to determine the applicability of court made standards for the vacatur of an arbitration award.Īn arbitrator enjoys wide latitude in conducting an arbitration hearing. Prudential Bache Securities, 703 F.Supp 78, 79 (S.D. had the burden to set out sufficient grounds to vacate the arbitration award in his moving papers," and "a party seeking to vacate an arbitration award on the grounds of manifest disregard of the law may not proceed by merely objecting to the results of arbitration.") Chasser v. Securities, 857 F.2d at 748 ("At the outset, we note that. Schmidt, 942 F.2d at 1577-78 (the court considers whether there was any reasonable basis upon which the arbitration panel may have acted) O.R. The onus is upon the party requesting the vacatur to refute this inference and in turn every rational basis upon which the arbitrator could have relied. Therefore, to protect against negative inferences being derived from an arbitrator's silence, an arbitration award that only contains a lump sum award is presumed to be correct. It is well settled that arbitrators are not required to explain an arbitration award and that their silence cannot be used to infer a grounds for vacating the award. For example, in the Second Circuit, awareness may be inferred if the governing law has such widespread familiarity, pristine clarity, and irrefutable applicability that a court could assume the arbitrators knew the rule, and not withstanding, "swept it under the rug." Advest, Inc., 914 F.2d at 10 Bobker, 808 F.2d at 933. 2d 695 (1986)) (Although declining to adopt the manifest disregard of the law standard, the court stated that the standard could only be satisfied when "arbitrators understand and correctly state the law, but proceed to disregard the same."). Delphi Industries, Inc., 783 F.2d 743 (8th Cir.), cert. Securities, Inc., 857 F.2d at 746 (citing Stroh Container Co. Some courts require that the arbitrator's subjective awareness of the disregarded law be actually stated in the award, while others are willing to infer awareness. There is inconsistency among courts throughout the United States on the degree of the "showing in the record" required to satisfy the manifest disregard of the law standard. Before a court may vacate an arbitration award on the basis of a manifest disregard of the law, "there must be some showing in the record, other than the result obtained, that the arbitrators knew the law and expressly disregarded it." O.R. Advest Inc., 914 F.2d at 8 Raiford, 903 F.2d at 1413 ("When the parties agreed to submit to arbitration, they also agreed to accept whatever reasonable uncertainties might arise from the process.").Īlthough "courts are generally prohibited from vacating an arbitration award on the basis of errors of law or interpretation," this court has considered whether the "manifest disregard of the law" by arbitrators is a proper basis for vacating an award in commercial cases. Although these courts have retained a very limited power to review arbitration awards outside of section 10, nonreviewability remains the general rule and exceptions are rare. Other courts, including this court, have held that an award may be vacated if it is "arbitrary and capricious." See Raiford, 903 F.2d at 1411-12 (citing United States Postal Services v. Securities, Inc., 857 F.2d at 746 Merrill Lynch, Pierce, Fenner & Smith, Inc. Specifically some courts have considered whether "manifest disregard of the law" by the arbitrators may warrant vacating an award. § 10, several federal courts have found other grounds, derived from the statutory list, for vacating arbitration awards in commercial cases. Although the Supreme Court has limited the grounds for vacatur to the categories enumerated in 9 U.S.C.
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