Vacating Arbitration Awards for Manifest Disregard of the Law

Abstract

The Federal Arbitration Act (FAA) was enacted in 1925 by Congress to establish a national policy favoring arbitration and to end judicial indisposition to arbitration. Since then, courts have routinely enforced arbitration clauses in contracts. The FAA provides for expedited, but limited, judicial review of arbitration awards. The FAA sets forth specific grounds for vacating and modifying arbitration awards. Controversy arose, and remains, in the courts over whether there are other, nonstatutory grounds for judicial review of arbitration awards. This paper will examine the U.S. Supreme Court’s interpretation of the FAA in Hall Street Associates, LLC v. Mattel, Inc., regarding the nonstatutory ground for vacating arbitration awards known as “manifest disregard of the law.” Also addressed is the subsequent case treatment of Hall Street as it relates to manifest disregard of the law as grounds for vacating arbitration awards under the FAA.