The Enforcement of Arbitral Awards - Chapter 9 - Law and Practice of Arbitration - 4th Edition

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Law and Practice of Arbitration - 4th Edition

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Chapter Nine: The Enforcement of Arbitral Awards

1. Introduction

Once the arbitral tribunal renders an award and the
administering arbitral institution delivers it to the arbitrating parties,
the arbitral process is concluded and jurisdiction reverts to the courts
for purposes of compulsory enforcement.1 The enforcement stage of
the process can consist of a number of events. The losing party can
fully comply with the terms of the award--in which case no
compulsory enforcement action is necessary. A party can file an
action to modify or correct the award to rectify evident clerical
mistakes.2 Also, despite the restraint of functus officio,3 when there
is unambiguity or confusion, an award can be remanded by the court
to the arbitrators for clarification.4 In the absence of voluntary
compliance, within the prescribed one-year time limit,5 an action to
confirm or vacate the award can be undertaken.6 The confirmation or
vacatur of awards is the final step in the process of arbitral
adjudication.

Federal court practice regarding the enforcement of domestic
arbitral awards is in keeping with the dictates of the emphatic federal
policy favoring arbitration. Most courts acknowledge a presumption
in favor of enforcement.7 In fact, the presumption is so strong that it
is nearly irrebuttable. It can be defeated only in exceptional
circumstances of extreme adjudicatory unfairness, profound arbitrator
incompetence, or when the court oversteps its authority and disagrees
with the determinations of the arbitrator.8 As a consequence, the
courts do not generally apply the FAA § 10 grounds for the judicial
supervision of awards with any rigor.9 Vacatur will be ordered only
if the arbitrators are corrupt, exceed their powers, or ignore the
parties’ fundamental adjudicatory rights or, possibly, the material
content of the arbitration agreement. A party opposing the
enforcement of an arbitral award cannot use the confirmation
proceedings to introduce new issues into the litigation by making
counterclaims. In effect, a party cannot make "counterclaims that go
beyond the issue of whether the award should be confirmed."10 Three
common law grounds supplement the statutory list: Enforcement can
be denied if the award reflects a manifest disregard of the law, is
arbitrary and capricious or irrational, or violates a well-established
statutory public policy.11 Somewhat paradoxically, the elaboration of
additional grounds for review in the case law has not created a
greater likelihood for awards of vacatur. The common law grounds
are basically surplusage that can make the confirmation of awards
more onerous.

The FAA does not govern labor arbitration. Accordingly, the
absence of a statutory regime to regulate the determinations reached
in the labor arbitration process created a need to articulate governing
standards at common law. These took into account the fact that labor
arbitrators interpreted collective bargaining agreements and federal
labor statutes in exercising their adjudicatory mandate. "Manifest
disregard of the law," along with the two other common law grounds