ELEVENTH CIRCUIT REJECTS MANIFEST DISREGARD
The Eleventh Circuit has joined the First and Fifth Circuits in holding that the manifest disregard of law doctrine is not a valid basis for vacating arbitral awards after the Supreme Court’s Hall Street Associates opinion. In Frazier v. Citifinancial Corp., No. 08-15188 (11th Cir. Apr. 30, 2010), the losing party in an arbitration sought to vacate an arbitral award on statutory grounds and on three non-statutory grounds: (1) that the award was arbitrary and capricious; (2) that the award was in violation of public policy; and (3) that the award was in manifest disregard of law. The Court concluded that Hall Street “compels” the conclusion that judicially-created bases for vacature are no longer valid. The Court rejected the Second and Ninth Circuit’s characterization of the doctrine as a judicial interpretation of the statutory ground that an award may be vacated if the arbitrators exceeded their powers. Manifest disregard is now no longer a viable basis for vacating arbitral awards in three Circuits.
This post written by Rollie Goss.
