You obtained an award in an arbitration. The arbitrator directed your adversary to pay. But the deadline has passed and you have not received payment. Now what? The award must be confirmed by a state or federal court so that you can use judicial execution practice to collect on the award. Under Section 9 of the Federal Arbitration Act, 9 U.S.C. 9, “the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title.”
Often, the losing party attempts to “appeal” the award to a state or federal court asking it to vacate the award. It well settled that this Court’s review of an arbitration award is “exceedingly narrow” and “highly deferential.” Egan Jones Ratings Co. v. Pruette, 765 Fed.Appx. 659, 662 (3d Cir. 2019); Liuna v. Molfetta Indus. Co., Inc., 365 Fed.Appx. 347, 350 (3d Cir. 2010)(“Review of arbitration awarded under the FAA is “extremely deferential.”) As the Third Circuit recently opined, “[t]he sine qua non of judicial review of an arbitration award is a heavy degree of deference to the arbitrator.” Monongahela Valley Hosp. Inc. v. United Steel Paper & Forestry Rubber Mfg. Allied Indus. & Serv. Workers Int’l Union AFL-CIO CLC, 19-2182, 2019 WL 7286693, at *3 (3d Cir. Dec. 30, 2019).
In Hall St. Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 584 (2008), the Supreme Court resolved a Circuit split involving the grounds on which an arbitration award may be vacated or modified. In that case, Justice Souter writing for the majority held that sections 9 and 10 of the Federal Arbitration Act (“FAA”) enumerate the exclusive grounds upon which an arbitration award may be vacated or modified. Id. (“We now hold that §§ 10 and 11 respectively provide the FAA’s exclusive grounds for expedited vacatur and modification.”) The exclusive grounds for vacating an award are set for in Section 10 of the FAA. They are: “corruption, fraud, undue means,” “evident partiality or corruption in the arbitrators,” “misconduct,” “misbehavior,” “exceed[ing] … powers.” 9 U.S.C. § 10(a)(1)-(4). Erroneous findings of fact or mistakes of law are insufficient grounds to vacate an arbitration award. New Jersey Bldg. Laborers Dist. Councils Local 325, Liuna v. Molfetta Indus. Co., Inc., 365 Fed.Appx. 347, 350 (3d Cir. 2010) (“The district court may not vacate an arbitration award merely because it would decide the merits differently.”); Egan Jones Ratings Co., 765 Fed.Appx. at 662 (“It is not proper for a reviewing court to “reexamine the evidence” when reviewing an arbitration award, and errors in factfinding do not justify reversal.”)
As the Third Circuit has held, “exceeding one’s powers, however, is not synonymous with making a mistake. Ross Dress for Less Inc v. VIWP, L.P., 750 Fed.Appx. 141, 144 (3d Cir. 2018). As the Supreme Court explained in Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013):
“A party seeking relief under [Section 10(a)(4)] bears a heavy burden. It is not enough to show that the arbitrator committed an error—or even a serious error. Because the parties bargained for the arbitrator’s construction of their agreement, an arbitral decision even arguably construing or applying the contract must stand, regardless of a court’s view of its (de)merits. Only if the arbitrator acts outside the scope of his contractually delegated authority—issuing an award that simply reflects his own notions of economic justice rather than drawing its essence from the contract—may a court overturn his determination. So the sole question for us is whether the arbitrator (even arguably) interpreted the parties’ contract, not whether he got its meaning right or wrong.”
Id. at 569.