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COURT’S LIMITED POWER OF REVIEW OF AN ARBITRATION AWARD EXPLAINED IN DEPTH, VACATION OF AWARD REVERSED (FIRST DEPT).

The First Department, reversing Supreme Court, in a full-fledged opinion by Justice Friedman, determined that Supreme Court did not have the power to order reconsideration of certain portions of the arbitration award (of over $100 million). The opinion is too detailed and comprehensive to fairly summarize here. The importance of the opinion is its detailed explanation of a court's limited power to review an arbitration award, even where the arbitrators got the law wrong:

The order vacating the award in part cannot be justified under the “emphatic federal policy in favor of arbitral dispute resolution” embodied in the FAA [Federal Arbitration Act],  a policy that “applies with special force in the field of international commerce” … . Under the FAA, even if an arbitral tribunal's legal and procedural rulings might reasonably be criticized on the merits, an award is not subject to vacatur for ordinary errors of the kind the court identified in this case, as opposed to manifest disregard of the law, a concept that … means “more than a simple error in law”… . “The potential for . . . mistakes [by the arbitrators] is the price for agreeing to arbitration” … , and, “however disappointing [an award] may be,” parties that have bargained for arbitration “must abide by it” ( ,,, [“Errors, mistakes, departures from strict legal rules, are all included in the arbitration risk”]). Accordingly, we reverse, grant the petition to confirm the award, and deny the cross motion to vacate it. Matter of Daesang Corp. v NutraSweet Co., 2018 NY Slip Op 06331, First Dept 9-27-18

ARBITRATION (COURT'S LIMITED POWER OF REVIEW OF AN ARBITRATION AWARD EXPLAINED IN DEPTH, VACATION OF AWARD REVERSED (FIRST DEPT))/FEDERAL ARBITRATION ACT (FAA) (COURT'S LIMITED POWER OF REVIEW OF AN ARBITRATION AWARD EXPLAINED IN DEPTH, VACATION OF AWARD REVERSED (FIRST DEPT))

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