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Consistent with other Circuits that have considered the issue, the Fourth Circuit has determined that courts can confirm time-sensitive arbitration awards, such as temporary injunctions, before the arbitration is complete.
In Arrowhead Global Solutions, Inc. v. Datapath, Inc., 166 Fed. Appx. 39 (4th Cir. 2006), Datapath was a subcontractor of Arrowhead Global Solutions (“AGS”), a satellite receiver supplier. Datapath sued AGS for breach of contract when AGS gave some satellite work to another company.
Pursuant to an arbitration clause in the subcontract agreement, the dispute went to arbitration. During the arbitration, the arbitrator enjoined AGS from sharing Datapath’s proprietary information with the other company. Before the arbitrator had rendered an award on the merits, Datapath moved to have the District Court confirm this temporary injunction.
The District Court confirmed the award, and AGS appealed, arguing that the court could not confirm the equitable relief because the award was not final.
On appeal, the Fourth Circuit noted that the Federal Arbitration Act compels courts to confirm arbitration awards except under limited circumstances, and that nothing in the Act mandates that an award be final before it can be confirmed. In order for arbitrators to have the power to issue temporary equitable relief, the Court explained, district courts must have the power to confirm and enforce that relief.
Otherwise, the arbitrator’s order would not have teeth. Waiting until a decision on the merits to confirm time-sensitive relief could render the relief meaningless, said the Court. The Court stated that this approach “makes sense,” and cited with approval similar holdings from the Sixth, Seventh, and Ninth Circuits, the other Circuits that have considered this issue.
The Court’s decision supporting an arbitrator’s ability to grant meaningful equitable relief protects arbitration’s value as an effective tool for resolving all aspects of a dispute. This case recognizes the inherent power of an arbitrator to provide parties with any legal or equitable relief available under the law. The notion that arbitrators only have the power to issue monetary rewards is incorrect. They, like judges, can issue temporary and permanent injunctive and other equitable relief.
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