Court of Appeal vacates arbitration award as being in manifest disregard of law
In an action filed by an insurance agent against John Hancock Mutual Life and two affiliates, Patten v. Signator Insurance Agency, Inc., Case No. 05-1148 (4th Cir. March 13, 2006), the United States Court of Appeals for the Fourth Circuit vacated a District Court decision denying a motion to vacate an arbitration award filed by an insurance agent, finding that the arbitration award failed to draw its essence from the governing arbitration agreement and was made in manifest disregard of law. The Court found that the arbitrator disregarded an unambigous provision in the agreement containing an arbitration clause by implying a one year statute of limitation into the arbitration agreement, where the agreement did not contain any limitation agreement, but an earlier, superceded agreement, did contain a one year limitation provision. Applicable law provided either a three or a six year limitation period.
