The U.S. Court of Appeals for the Second Circuit has ruled that the language in the Federal Arbitration Act (FAA) establishes a one-year statute of limitations for the confirmation of awards governed by the law. The ruling creates a split among federal appeals courts which have come to different conclusions about the meaning of the word “may” in section 9 of the FAA, regulating the confirmation of arbitration awards in district courts. Both the Fourth Circuit in Sverdrup Corp. v. 10 WHC Constructors, Inc. (989 F.2d 148 (1993) and the Eighth Circuit in Val-U Constr. Co. of S.D. v. Rosebud Sioux Tribe (146 F.3d 573 (1993) have relied on the ordinary meaning of “may” to conclude that the one-year limitations period is permissive based. However, the Second Circuit said it disagreed with this reading of the FAA, in particular because of the U.S. Supreme Court’s reasoning in Cortez Byrd Chips, 9 Inc. v. Bill Harbert Constr. Co. (529 U.S. 193 (2000).

Source: Photopaint Technologies, LLC v. Smartlens Corp. (No. 02-7784). Mark Baker, Fulbright & Jaworski email: [email protected]