Originally from Dispute Resolution Journal

"The current state of disarray in the law of vacatur of commercial arbitration awards cannot continue," say the authors. Most circuit courts have been reaching into "the separate and distinct body of labor arbitration case law and borrowing therefrom one of the 'other' non-statutory grounds for vacatur," they say. It is likely that substantive, reasoned awards will become a common feature of commercial arbitration and that this will lead to heightened levels of judicial scrutiny. As a result, the Supreme Court eventually will be obliged to decide the legitimacy of the nonstatutory grounds for vacatur. Then "other" non-statutory grounds, borrowed from labor law arbitration, should be rejected as inconsistent with the public policy and standards articulated in the FAA.

The law governing commercial arbitration is delineated in the Federal Arbitration Act (FAA)1. The Supreme Court has made clear that the FAA preempts conflicting state statutory law and held that the Act applies in the state, as well as federal courts.2 Section 10(a) of the FAA articulates four narrow grounds warranting vacatur of commercial arbitration awards that do not permit judicial evaluation of the merits of disputes submitted to arbitration. There is a general presumption reflected in the FAA and the attendant case law that the arbitrator “took a permissible route to the award where [a permissible route] exists.’’3