After arbitration has occurred, parties may seek judicial enforcement of the arbitral award, converting the private determination into an enforceable judgment. Parties that did not prevail in the arbitration may, at the same time, seek to have the arbitral award vacated. This article concerns the doctrine that permits courts to vacate an arbitral award when the arbitrators “manifestly disregarded” the law, focusing on recent developments in the Second Circuit. Despite the exceedingly deferential scope of this doctrine, the Second Circuit has actually vacated a handful of arbitrations on grounds of manifest disregard, and the doctrine is routinely raised by litigants. We turn to three important issues the Second Circuit has recently considered, each of which helpfully illuminates the role of public courts in arbitration. The first issue is that the Second Circuit has identified manifest disregard as an extrastatutory form of judicial review, thus breaking from other circuits and from some of its earlier decisions. Although the issue does not appear to have been the subject of much focus, it has great consequence both for determining whether the doctrine is mandatory and whether it preempts conflicting state law. The second issue, building on the first, is whether parties may voluntarily choose either to eliminate review for manifest disregard or to permit review for error (which, as we will discuss, is a level of scrutiny foreign to the statutory scheme). The Second Circuit has held that parties may not prohibit courts from engaging in manifest disregard review. The circuits are divided as to whether parties may compel courts to engage in stricter review of arbitral awards than is provided either by the strict language of the Federal Arbitration Act or the manifest disregard doctrine. The third and last issue is the ephemeral rise and fall of the doctrine of manifest disregard of the evidence. Determining the limited instances when judges may examine the factual record developed at arbitration provides another opportunity to understand what courts mean by manifest disregard of the law.
Christian Turner and Joshua Ratner,
Origin, Scope, and Irrevocability of the Manifest Disregard of the Law Doctrine: Second Circuit Views
Available at: http://digitalcommons.law.uga.edu/fac_artchop/644