According to a federal district court in Pennsylvania, the time limit for challenging an arbitration award under the Federal Arbitration Act (FAA) is not tolled by a rejected request for interpretation or reconsideration of the award.

In Oberwager v. McKechnie Ltd., Civ. A. No. 06-2685, 2007 WL 4322982 (E.D. Pa. Oct. 10, 2007), McKechnie and Oberwager entered into a stock purchase contract containing an arbitration agreement. The parties submitted a dispute over escrowed funds to arbitration.

The arbitrator entered an award in favor of McKechnie on January 9, 2006. Oberwager filed a request for interpretation of the award. The arbitrator denied this request on March 20, 2006, and delivered his decision to the parties on March 22, 2006.

On June 21, 2006, Oberwager filed a court action seeking vacatur or modification of the award under Delaware law. McKechnie moved for summary judgment on January 17, 2007, contending that the application for vacatur or modification was untimely under the FAA because it was not made within three months of the award's filing or delivery.

The Court agreed that the application was untimely and thus dismissed the suit. As the Court observed, the FAA requires motions to vacate or modify to be served upon the adverse party "within three months after the award is filed or delivered." McKechnie claimed that the award was filed or delivered by the arbitrator on January 9, while Oberwager maintained that the award was not delivered until the arbitrator denied his request for interpretation on March 20.

The Court held that the award was filed and delivered on January 9, because that filing "evidence[d] the arbitrator's intent to resolve all claims submitted to him" and "contained all of the formalities and content of a final award."

The March 20 rejection of Oberwager's request for interpretation was not the award date, according to the Court, because the rejection did not qualify as an award under section 12 and did not fall within any exception to the functus officio doctrine. Since the March 20 rejection did not correct a mistake apparent on the face of the award, did not adjudicate an issue submitted, and did not resolve doubt as to whether the arbitration submission was fully executed, that rejection did not fall within the recognized functus officio exceptions that could have tolled the award date.

According to the Court, policy considerations also supported treating January 9 as the award date because disappointed parties "should not be able to delay the intentionally short limitations period for challenging an award merely by filing for a post-award decision."