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Manifest error voids arbitration

Manifest error voids arbitration
Halligan v. Piper Jaffray Inc., CA2, 148 F.3d 197

It was considered ?black letter law? that a court would not vacate an arbitrator?s award for errors of law or fact committed by the arbitrator. In Halligan, however, the court did just that based on its finding ?manifest disregard? of the law by the arbitrator.

Manifest disregard means more than error or misunderstanding with respect to the law. However, to modify or vacate an arbitration award because of ?manifest disregard,? a court must find both that (1) the arbitrators knew of a governing legal principle yet refused to apply it or ignored it altogether, and (2) the law ignored by the arbitrators was well defined, explicit, and clearly applicable to the case.

In this instance that the parties agreed that the arbitration panel was correctly advised of the applicable legal principles and the Second Circuit vacated the arbitration panel?s award and remanded the matter back to the federal district court for further action.

The decision is posted on the Internet at:http://openjurist.org/148/f3d/197

Full post as published by New York Public Personnel Law on September 21, 2009 (boomark / email).