Can a court recognize the broad authority of arbitrators but then usurp that authority by reviewing the award de novo? The author says the 2nd Circuit did exactly that.
A recent 2nd Circuit opinion that on its face appears to expand the power of arbitrators may actually undermine their authority by subjecting their exercise of contractually conferred comprehensive authority to de novo review. The case in question was ReliaStar Life Insurance Company of New York v. EMC National Life.1 The arbitration agreement between the parties called for arbitration of “any disputes or differences arising hereafter between the parties with reference to any transaction under or relating in any way to this Agreement.” A separate provision called for the parties to pay their own legal costs. It stated, “Each party shall bear the expense of its own arbitrator ... and related outside attorneys’ fees, and shall jointly and equally bear with the other party the expenses of the third arbitrator.”