Arbitrator Boundaries - Exploring the Evolving Limits on Arbitrator Authority - Part 3 - Chapter 1 - AAA Yearbook on Arbitration and the Law - 24th Edition
Thomas J. Brewer is now in his twelfth year as a full-time Commercial Arbitrator and Dispute Resolution Neutral. He has over twenty-five years of experience (1985-present) serving as an arbitrator, has served as a sole or panelist arbitrator in more than eight hundred cases and frequently serves as the neutral chair of three-arbitrator panels. In recent years his arbitration caseload has been focused heavily on international, energy, pharmaceutical and other licensing, healthcare industry and intellectual property disputes. He has served as an arbitrator in cases administered by AAA, ICDR, JAMS, ICC, LCIA, SIAC, under the UNCITRAL, CPR, and Society of Maritime Arbitrators rules, and in numerous other non-administered cases. He is a member of the American Arbitration Association’s International, Commercial, Large Complex Case, Energy and Healthcare panels of arbitrators, and is also a member of the International, Energy, Oil and Gas, Health Care & Life Science, and National panels of neutrals of the CPR Institute of Dispute Resolution. He is a Fellow of the College of Commercial Arbitrators. Mr. Brewer received his B.A. from Dartmouth College and his J.D. from the Harvard Law School. He also received a B.A. in jurisprudence from Oxford University, which he attended as a Rhodes Scholar. He is based in Seattle, Washington.
Litigators and arbitrators are well aware of the various, but limited, statutory grounds on which a court may vacate arbitration awards under the Federal Arbitration Act (“FAA”) and companion state arbitration statutes.2 The purpose of this paper is to focus on one of these—the allegation that an arbitrator has exceeded his or her authority. Section 10(a)(4) of the FAA, 9 U.S.C. §10(a)(4), authorizes vacatur of arbitration awards where “the arbitrators exceeded their powers. . . .” The Uniform Arbitration Act, the Revised Uniform Arbitration Act, and most other state arbitration statutes contain comparable provisions.
The discussion that follows will begin with a review of some intriguing empirical research into cases where disappointed parties have attempted to vacate arbitration awards. This research, although based on a sample that does not permit statistically “representative” conclusions, does suggest that the “exceeded powers” ground is becoming one of the most frequently asserted, and may perhaps be the most frequently successful, of all of the various statutory and other grounds advanced by parties seeking vacatur of awards.
The discussion then reviews several developments in the recent case law that, taken together, suggest we may be seeing even more frequent resort to “exceeded powers” challenges to arbitration awards in coming years. In particular, we shall consider whether parties disappointed by the U.S. Supreme Court’s Hall Street3 decision in 2008 may be expected to make increasing use of the “exceeded powers” ground to challenge awards in the future. In that regard, the paper also considers whether such challenges might herald the onset of a new era of diminished deference by the courts to review of arbitral awards.