|
In confirming an arbitration award, a federal district court in Missouri held that the Federal Arbitration Act (FAA) does not require confirmation proceedings to occur in the district where the award was made.
In DTV Network Systems, Inc. v. Skywalker Communications, No. 4:06MC87SNL, 2006 WL 2987040 (E.D. Mo, Oct. 17, 2006), DTV Network Systems, Inc. (DTV) filed a motion to confirm an arbitration award. In opposition, Skywalker Communications (Skywalker) argued that venue was improper and, alternatively, that the award should be vacated as “completely irrational” or as “manifestly disregarding the law.”
On the venue issue, the Court found that Section 9 of the FAA did not require confirmation proceedings to occur in the district where the award was made because the venue provision uses permissive language in providing that “such application may be made to the United States court in and for the district within which such award was made.” Although the arbitration took place in Washington D.C., the parties’ arbitration agreement allowed for confirmation “in any federal or state court having jurisdiction thereof.” Since the Court originally had diversity jurisdiction and previously entered a stay, venue was proper.
The Court found no basis for concluding that the award was “irrational.” Arbitration awards are only “irrational” when they fail to draw their “essence from the agreement.” But Skywalker’s challenge basically amounted to an argument that the arbitrator had insufficient evidence to make his decision. Since courts are not in the business of reconsidering the merits of arbitration awards, the Court rejected this argument.
Likewise, there was no evidence that the arbitrator identified but ignored an applicable, governing legal principle. Thus, Skywalker failed to demonstrate “manifest disregard” of the law.
Subscribe to a free weekly update on ADR case law and
legislation
|