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Stating that simply because a Court has jurisdiction to do something does not mean that it is right to do so, an Oklahoma federal court vacated its earlier decision to confirm an arbitration award where the losing party had twice stated its intention to move to vacate the award.
In Burlington Northern & Santa Fe Railway Co. v. Public Service Co. of Oklahoma, No. 05-CV-53-TCK-FHM, 2007 WL 593621 (N.D. Okla. Feb. 21, 2007), an arbitrator issued an award favoring Public Service Co. of Oklahoma ("PSO"), and within two weeks PSO filed a motion to confirm. In timely fashion, Burlington Northern and Santa Fe ("BNSF") filed two motions indicating its intent to move to vacate the award.
More specifically, BNSF argued that the Court lacked jurisdiction to confirm an award before the three-month period allowed by the Federal Arbitration Act (FAA) to challenge the award had expired. Relying heavily on a 1932 case, The Hartbridge, 57 F.2d 672, the Court held that nothing in the FAA prevented a winning party from bringing a motion to confirm at anytime after the award was issued. The Court had jurisdiction to confirm.
However, noting that the Court had not even considered a second motion from BNSF arguing that the Arbitration Panel had exceeded its authority–and reiterating its intention to file for vacatur–the Court stated that just because it had jurisdiction did not mean confirming the award was fair.
Again following The Hartbridge, the Court ruled that it had erred in not considering the second motion and in basically ignoring BNSF's twice-stated intention to file for vacatur. Declaring that failing to consider BNSF's motion was "fundamentally unfair and counter to the interests of justice," the Court vacated its confirmation of the award.
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