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Second Circuit Reaffirms Manifest Disregard Standard of Review for Arbitral Awards

December 02, 2008

By James E. Berger, Christopher F. Dugan and Charlene Sun

On August 21, 2008, we issued a Client Alert reporting that the U.S. District Court for the Southern District of New York had held, based on the U.S. Supreme Courts ruling in Hall Street Associates, L.L.C. v. Mattel, that the manifest disregard standard of review of arbitration awards under the Federal Arbitration Act (FAA) was no longer good law. The U.S. Court of Appeals for the Second Circuit has now had occasion to rule on the continued validity of manifest disregard review, and expressly held that manifest disregard of the law continues to constitute a valid ground for non-recognition of an arbitral award, despite the Supreme Courts ruling in Hall Street.

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