Post-Hearing Issues In International Arbitration - Chapter 8 - The Future of Manifest Disregard
Christopher R. Drahozal is the John M. Rounds Professor of Law and Associate Dean for Research and Faculty Development at the University of Kansas School of Law. He is an Associate Reporter for the Restatement (Third) of the U.S. Law on International Commercial Arbitration, and was the Chair of the Arbitration Task Force of the Searle Civil Justice Institute. He is serving as a Special Advisor to the Consumer Financial Protection Bureau, assisting with its statutorily mandated study of arbitration clauses in consumer financial services contracts. Professor Drahozal has written extensively on the law and economics of arbitration. He has authored a casebook on commercial arbitration published by Lexis Publishing (now in its third edition) and a co-edited a book on empirical research on international commercial arbitration published by Kluwer Law International. His articles have appeared in the Journal of Legal Studies, the Journal of Empirical Legal Studies, Law and Contemporary Problems, the Vanderbilt Law Review, the Illinois Law Review, and the International Review of Law and Economics, among others. He has made presentations on arbitration law and practice throughout the United States, Canada, Europe, and Asia. Prior to teaching, Professor Drahozal was in private law practice in Washington, D.C., and served as a law clerk for the Iran-U.S. Claims Tribunal, the United States Supreme Court, and the United States Court of Appeals for the Fifth Circuit.
Originally from: Post-Hearing Issues in International Arbitration
“In unrestricted submissions ... the interpretations of the law by the arbitrators in contrast to manifest disregard are not subject, in the federal courts, to judicial review for error in interpretation.”1
The above-quoted language, from the United States Supreme Court’s now overruled decision in Wilko v. Swan,2 has been regularly cited as authority for courts to review arbitration awards for manifest disregard of the law.3 The (almost) universal definition of manifest disregard is that a party seeking vacatur of an award must show that “the arbitrators appreciated the existence and applicability of a controlling legal rule but intentionally decided not to apply it.”4 Until the Supreme Court’s decision in Hall Street Associates, L.L.C. v. Mattel, Inc.,5 every federal circuit had recognized some form of manifest disregard review, even though manifest disregard is not expressly listed as a ground for vacating awards in the Federal Arbitration Act (FAA).6 A number of state courts, too, had construed their state arbitration acts as providing for manifest disregard review.7
I. Hall Street and Manifest Disregard
II. Stolt-Nielsen and Manifest Disregard
III. Manifest Disregard in the Circuits: Varying Approaches
A. Manifest Disregard as a Non-Statutory Ground
B. Manifest Disregard as Excess of Powers
C. No Review for Manifest Disregard of the Law
IV. The Future of Manifest Disregard in the Supreme Court