Marc J. Goldstein Arbitrator & Mediator NYC
January 31, 2011

U.S. Court Holds “Manifest Disregard” Cannot Be A Ground to Refuse Confirmation of Convention Award

In another blow to the misconceptions of  foreign arbitration lawyers about U.S. arbitration jurisprudence, a U.S. federal judge in Washington, in a searching scholarly opinion, has systematically dismantled, and summarily rejected, all arguments advanced for applying “manifest disregard of the law” to refuse confirmation of an arbitration award under the New York Convention.

That doctrine, the Court held, if it survives and in whatever conception it survives, is no more than a ground permitting vacatur of an award that a U.S. Court may lawfully vacate, i.e. one that is made in or under the arbitral law of the United States. It has no role to play in proceedings to confirm a Convention award, the Court held, as it has “no grounding in the treaty.” (International Trading & Industrial Investment Co. v. Dyncorp Aerospace Technology, 2011 U.S. Dist. LEXIS 5954 (D.D.C. Jan. 21, 2011)).

First among the arguments dissected by the Court in DynCorp was the notion that Article V(1)(C) of the Convention is in substance co-extensive with FAA Section 10(a)(4), and permits refusal of confirmation on any ground that would comprise “exceeding powers” of the arbitrator under Section 10(a)(4).  But Article V(1)(C) reaches only situations where the arbitrator decided matters beyond the submission to arbitration, and thus deals with only one of many  potential scenarios in which the arbitrator may be said to have exceeded her powers.

The Convention enumerates quite precisely and exclusively stated grounds for refusing confirmation, and by negative implication excludes all other possible grounds, the Court held. “Such a narrow reading of the New York Convention comports with the context in which the Convention was enacted, as a broad construction of the Convention would do nothing more than erect additional hurdles to confirmation of arbitral awards, which in turn would contravene the ‘principal purpose’ of the Convention, i.e., ‘to encourage the recognition and enforcement of commercial arbitration agreements in international contracts.'”







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