FOURTH CIRCUIT STATES POST-STOLT NIELSEN VIEW ON MANIFEST DISREGARD
The U.S. Court of Appeals for the Fourth Circuit recently stated that manifest disregard remains a viable doctrine in an opinion refusing to vacate a $1.1 million arbitration award against Wachovia for frivolous litigation under state law. Wachovia argued that the panel committed manifest disregard of the law by failing to provide Wachovia adequate notice and hearing under the state statute. The court disagreed, holding the panel was not bound by the statutory procedure in awarding fees, and, in any event, Wachovia was partly responsible for any insufficient process based on its conduct in the arbitration. In so holding, the court provided its interpretation of the Supreme Court’s footnote on manifest disregard in Stolt-Nielsen: “We read this footnote to mean that manifest disregard continues to exist either ‘as an independent ground for review or as a judicial gloss on the enumerated grounds for vacatur set forth at 9 U.S.C. § 10.’ Therefore, we decline to adopt the position of the Fifth and Eleventh Circuits that manifest disregard no longer exists.” Wachovia Securities, LLC v. Brand, No. 10-2111 (4th Cir. Feb. 16, 2012).
This post written by Michael Wolgin.
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