Supreme Court Ruling Impacts Arbitration Appeals

By: Jason L. Richey, Amy Ream, K&L Gates, Pittsburgh

Following the Supreme Court’s decision in Hall Street Associates, LLC v. Mattel, courts across the country have divided as to whether an arbitrator’s “manifest disregard of the law” remains a proper basis for judicial review of arbitration awards.  For construction disputes taken to arbitration, this unsettled question could impact the final outcome of the dispute.

Whether “manifest disregard of the law” is an acceptable ground for judicial review of an arbitration award concerns the application of the Federal Arbitration Act (FAA).  The FAA provides expedited judicial review for confirming, vacating, or modifying an arbitration award.  Under the FAA’s expedited review process, a reviewing court must confirm an arbitration award unless a specific ground for judicial review exists.  The primary grounds for judicial review appear in the statute itself, under sections 10 and 11 of the FAA.  These sections set forth specific grounds, such as an arbitrator’s material miscalculation of an award, that trigger a court’s power to vacate or modify an award.

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