Client Alert

Second Circuit Decision Clarifies and Bolsters Arbitrators Authority

February 11, 2010

James E. Berger

On January 14, 2010, the U.S. Court of Appeals issued a key ruling clarifying arbitrators authority in two key areas. Specifically, in T. Co. Metals v. Dempsey Pipe & Supply, Inc., the Court of Appeals (a) clarified the narrow scope of the manifest disregard doctrine, and (b) refined its rules concerning arbitrators authority to amend final awards once they have been issued. Taken together, the Courts ruling in T. Co. makes clear that Second Circuit (and the district courts under its jurisdiction) will apply an exceedingly narrow scope of review to arbitral awards, and that they will, wherever possible, defer to arbitrators decisions both on both their arbitral jurisdiction and the merits of the controversies that are referred to them.

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