Second Circuit empowers ICDR arbitrator to issue amended award | Practical Law

Second Circuit empowers ICDR arbitrator to issue amended award | Practical Law

Abby Cohen Smutny (Partner) and Lee A. Steven (Counsel), White & Case LLP

Second Circuit empowers ICDR arbitrator to issue amended award

Practical Law Legal Update 9-501-4064 (Approx. 2 pages)

Second Circuit empowers ICDR arbitrator to issue amended award

Published on 04 Feb 2010International, USA
Abby Cohen Smutny (Partner) and Lee A. Steven (Counsel), White & Case LLP
The Second Circuit has held that an arbitrator had the power to amend an award pursuant to requests made by the parties, and that therefore there was no ground for vacatur of the award under the Federal Arbitration Act. The court also held, affirming the ruling of the District Court, that the arbitrator's calculation of damages was not in manifest disregard of the law.
In T.Co Metals, LLC v Dempsey Pipe & Supply, Inc., (January 14, 2010 2d Cir.), the Second Circuit held that the arbitrator had the power to amend an award pursuant to requests made by the parties, and that therefore there was no ground for vacatur of the award under Section 10 of the Federal Arbitration Act (FAA). After rendering an ICDR award, the arbitrator issued an amended award to correct "clerical" errors under Article 30(1) of the ICDR Rules, which permits the arbitrator to correct any clerical, typographical, or computation errors. According to the court, the amended award could not be vacated because the parties expressed their intent for the scope of Article 30(1) to be decided by the arbitrator by agreeing to arbitration under the ICDR Rules and by invoking those Rules in their applications to the arbitrator. The court thus reinstated the arbitrators' amended award, and overturned the decision of the US District Court for the Southern District of New York, which had partially vacated the amended award.
The court also held, affirming the ruling of the District Court, that the arbitrator's calculation of damages was not in manifest disregard of the law. The lower court had ruled that manifest disregard was not a viable ground for vacating an arbitral award after the Supreme Court's decision in Hall Street Associates LLC v Mattel, Inc. 552 U.S. 576 (2008), but even if it were it would be inapplicable here. The Second Circuit held that manifest disregard is still a viable ground for vacatur, citing the Second Circuit's holding in Stolt-Nielsen S.A., et al. v AnimalFeeds Int'l Corp., 548 F.3d 85 (2d Cir. 2008), but agreed with the lower court that the damages calculation was proper and not in manifest disregard of the law.