Award Confirmation Is Appropriate Even If Damages Portion of Award Has Already Been Paid in Full

The Southern District of Texas confirmed an arbitration award even though the damages portion of the award had already been paid in full.

In Variable Annuity Life Insurance Co. v. Bencor, Inc., No. Civ.A. H-05-1843, 2006 WL 1492249 (S.D. Tex. May 30, 2006), Bencor initiated arbitration pursuant to a marketing agreement with Variable. In the arbitration, Bencor sought damages and a declaratory judgment as to its rights under the agreement. The arbitrators awarded Bencor damages in excess of $8 million and determined that Bencor was entitled to compete with Variable after Variable stopped paying commissions due under the agreement.

Bencor moved to confirm the award even though Variable had already paid in full. In opposing the motion, Valcor argued that confirmation was improper because it had already paid the award and was not seeking vacatur or modification.

The Court confirmed the award because “[u]nder both the Federal Arbitration Act and the Texas Arbitration Act, if a party applies for a court order confirming an arbitration award, the court–assuming jurisdiction–must confirm the award unless there are grounds for vacating, modifying, or correcting it.” The Court noted that Variable had cited no authority “to support its position that ‘a party must refuse to honor an arbitral award before the award can be confirmed.’”