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Posts Tagged ‘Confirming Awards’

Arbitration Law FAQs: Confirming Arbitration Awards under the Federal Arbitration Act

September 18th, 2018 Arbitration and Mediation FAQs, Arbitration as a Matter of Consent, Arbitration Practice and Procedure, Awards, Federal Arbitration Act Enforcement Litigation Procedure, Final Awards, Judicial Review of Arbitration Awards, Nuts & Bolts, Nuts & Bolts: Arbitration, Small Business B-2-B Arbitration Comments Off on Arbitration Law FAQs: Confirming Arbitration Awards under the Federal Arbitration Act

Introduction

Confirming Arbitration Awards 1

Confirming Arbitration Awards 1

Favorable arbitration awards are wonderful things, but they are not self-enforcing. Sometimes the other side voluntarily complies, but if not, there is really not much of anything the arbitrator can do to help.

Arbitrators are not judges and do not have the authority to garnish wages, seize property,  foreclose on encumbered property, freeze bank accounts, impose contempt sanctions, and so forth. Parties can delegate to arbitrators broad adjudicatory and remedial authority, but that is relevant only to the nature and scope of their awards, and does not confer power on the arbitrators to enforce their awards coercively.

Apart from its potential preclusive effect in subsequent litigation or arbitration, an arbitration award stands on the same footing as any other privately prepared legal document, and for all intents and purposes it is a contract made for the parties by their joint agent of sorts—the arbitrator or arbitration panel. It may be intended by the arbitrator or panel, and at least one of the parties, to have legal effect, but it is up to a court to say what legal effect it has, and, if necessary, to implement that legal effect through coercive enforcement.

A judgment, by contrast, is an official decree by a governmental body (the court) that not only can be coercively enforced through subsequent summary proceedings in the same or other courts (including courts in other states and federal judicial districts), but is, to some extent, self-enforcing. A judgment, for example, can ordinarily be filed as a statutory lien on real property, and applicable state or federal law may, for example, authorize attorneys to avail their clients of certain judgment-enforcement-related remedies without prior judicial authorization.

Confirming Arbitration Awards 2

Confirming Arbitration Awards 2

The Federal Arbitration Act, and most or all state arbitration statutes, provide for enforcement of arbitration awards through a procedure by which a party may request a court to enter judgment on the award, that is to “confirm” it. Once an award has been reduced to judgment, it can be enforced to the same extent as any other judgment. See, e.g., 9 U.S.C. § 13 (Under Federal Arbitration Act, judgment on award “shall have the same force and effect, in all respects, as, and be subject to all the provisions of law relating to, a judgment in an action; and it may be enforced as if it had been rendered in an action in the court in which it is entered”); Fla. Stat. § 682.15(1)( “The judgment may be recorded, docketed, and enforced as any other judgment in a civil action.”); N.Y. Civ. Prac. L. & R. § 7514(a) (“A judgment shall be entered upon the confirmation of an award.”).

Chapter One of The Federal Arbitration Act (the “FAA”), and most or all state arbitration statutes, authorize courts to confirm domestic awards in summary proceedings. State arbitration-law rules, procedures, limitation periods, and the like vary from state to state and frequently from the FAA, and state courts may apply them to FAA-governed awards (provided doing so does not frustrate the purposes and objectives of the FAA). And Chapter 2 of the FAA provides some different rules that apply to the confirmation of domestic arbitration awards that fall under the Convention on the Recognition of Foreign Arbitral Awards (the “Convention”), and the enforcement of non-domestic arbitration awards falling under the Convention (i.e., awards made in territory of a country that is a signatory to the Convention.

But let’s keep things simple, and take a brief look at the FAA’s requirements for confirming arbitration awards, as applicable in federal court for domestic awards not falling under Chapter Two of the Federal Arbitration Act in situations where there is no prior pending action related to the arbitration, and  there are no issues concerning federal subject-matter jurisdiction, personal jurisdiction, sufficiency or service of process, venue (i.e., whether the suit should have been brought in a different federal judicial district), or the applicability of Chapter One of the FAA (9 U.S.C. §§ 1-16).  We’ll also discuss how applications to confirm are supposed to be summary proceedings, why timing of an application is important, and how courts decide them.

What are the Requirements for Confirming Arbitration Awards under the Federal Arbitration Act?

Confirming Arbitration Awards 3

Confirming Arbitration Awards 3

Like most other issues arising under the FAA, whether a court should confirm an award depends on what the parties agreed. Section 9 of the FAA, which governs confirmation of awards, says—with bracketed lettering added, and in pertinent part: “[A] If the parties in their agreement have [B] agreed that a judgment of the court shall be entered upon [C] the award made pursuant to the arbitration, and [D] shall specify the court, then [E] at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and [F] thereupon the court must grant such an order unless [G] the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title.” 9 U.S.C. § 9. Items [A] through [D] above each concern party consent as evidenced by the parties’ arbitration agreement.

The key substantive requirements for confirming arbitration awards are thus: Continue Reading »

SCA v. Armstrong: Anatomy of an Arbitration Award—Part I

February 23rd, 2015 Arbitration Practice and Procedure, Attorney Fees and Sanctions, Authority of Arbitrators, Awards, Confirmation of Awards, State Courts Comments Off on SCA v. Armstrong: Anatomy of an Arbitration Award—Part I

Armstrong Arbitration Award: Introduction

yay-15106666-digitalArmstrong-e1424717219396On Monday morning, February 16, 2015 attorneys for SCA Promotions, Inc. (“SCA”) and SCA Insurance Specialists, Inc. (“SCA Insurance”) (collectively, the “SCA Entities”) filed a petition in a Dallas County, Texas state court to confirm a $10,000,000.00 arbitration award recently made in the Matter of the Arbitration between Lance Armstrong and SCA Promotions, Inc. Ordinarily something like that is an event accompanied with all the fanfare of a tree falling in a deserted forest.

But this petition is different. It seeks to confirm an arbitration panel’s award of $10,000,000.00 in sanctions levied against cyclist Lance Armstrong for having lied under oath to the arbitration panel and the SCA Entities in an earlier arbitration proceeding. So its filing was widely reported and discussed by major national and international media providers.

Here’s a condensed and simplified version of the background: Continue Reading »

Federal Arbitration Act Litigation Procedure Blog Posts on Final Arbitration Awards

December 30th, 2014 Arbitration and Mediation FAQs, Arbitration Practice and Procedure, Awards, Confirmation of Awards, Functus Officio, Grounds for Vacatur, Judicial Review of Arbitration Awards, Loree & Loree Arbitration-Law Blogs, Nuts & Bolts, Nuts & Bolts: Arbitration, United States Supreme Court Comments Off on Federal Arbitration Act Litigation Procedure Blog Posts on Final Arbitration Awards

Back when we began posting in 2009 we published a “Nuts & Bolts”  series post about final arbitration awards, which you can read here. Interestingly, enough, that post, according to Google Analytics statistics, is one of the (if not the) most popular post we’ve ever published.

That may seem a bit strange, but it’s really not. Whether or not an arbitration award is a final arbitration award bears on a number of important issues, including whether the award can be confirmed, vacated, modified or corrected, and whether it is a decision that the arbitrators have the authority to revisit. And whether or not an arbitration award can be confirmed, vacated, modified or corrected before the conclusion of an ongoing arbitration proceeding has obvious time-bar consequences in light of the short limitation periods for confirming, vacating, modifying and correcting awards: to avoid forfeiture, it may be necessary to commence post-award Federal Arbitration Act enforcement proceedings before the arbitration proceeding has concluded. (See Loree Reins. & Arb. L. Forum posts here & here.)

Given the recent launch of  the Federal Arbitration Act Litigation Procedure Blog, and the need to start posting what we hope will be interesting and useful material, we decided to kick-off with the finality topic. Earlier today we published the first  segment of the series Federal Arbitration Act Finality: Is this Arbitration Decision a Final Award, An Interim Final Award, a Partial Award, a Partial Final Award or. . . What??, which you can read here.

That post outlines the topic and describes a hypothetical arbitration that gives rise to five types of awards and rulings, four of which are issued prior to the award that concludes the arbitration. Future posts  will discuss whether or not each type of award is, or may in some circumstances be, a final arbitration award for  purposes of Chapter 1 of the Federal Arbitration Act.

Another thing we’ll discuss will be the affect, if any, of Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) on the final award issue. Of all the many issues discussed in the Stolt-Nielsen case the one we hear relatively little commentary about is the Supreme Court’s rejection of the dissent’s argument that the class-arbitration consent award was not ripe for judicial review.  See 559 U.S. at 667 n.2. As part of the Federal Arbitration Act Litigation Procedure Blog final-award series, we’ll consider that aspect of the Supreme Court’s ruling and its relevance to the question whether a partial award can be a partial final award if the parties consent.

And unless we  somehow feel compelled  to publish yet another post this year, we’d like to take this opportunity to wish everyone a happy and prosperous New Year!

Philip J. Loree Jr.

 

Arbitration and Mediation FAQs: I Received an Arbitration Award in my Favor but my Adversary Refuses to Pay it. What can I do?

June 14th, 2014 Arbitration Agreements, Arbitration and Mediation FAQs, Arbitration Practice and Procedure, Authority of Arbitrators, Awards, Confirmation of Awards, Final Awards, Nuts & Bolts, Nuts & Bolts: Arbitration, Practice and Procedure, Small Business B-2-B Arbitration, State Arbitration Statutes, State Courts, Statute of Limitations Comments Off on Arbitration and Mediation FAQs: I Received an Arbitration Award in my Favor but my Adversary Refuses to Pay it. What can I do?

Favorable arbitration awards are wonderful things, but they are not self-enforcing. Sometimes the other side voluntarily complies, but if not, there is really not much of anything the arbitrator can do to help.

Arbitrators are not judges and thus do not have the authority to garnish wages, seize property,  foreclose on encumbered property, freeze bank accounts, impose contempt sanctions and so forth. Parties can delegate to arbitrators broad adjudicatory and remedial authority, but that is relevant only to the nature and scope of their awards, and does not confer power on the arbitrators to enforce their awards coercively.

Apart from its potential preclusive effect in subsequent litigation, an arbitration award stands on the same footing as any other privately prepared legal document, such as a contract. It may be intended by the arbitrators and at least one of the parties to have legal effect, but it is up to a court to say what legal effect it has, and,  if necessary, to implement that legal effect through coercive enforcement. A judgment, by contrast, is an official decree that not only can be coercively enforced through subsequent summary proceedings in the same or other courts (including courts in other states and federal judicial districts), but is, to some extent, self-enforcing. A judgment, for example, can ordinarily be filed as a lien on real property, and applicable state or federal law may, for example, authorize attorneys to avail their clients of certain judgment-enforcement-related remedies without prior judicial authorization.

But that doesn’t mean you’re out of luck; it means you need a court to enter judgment on the award, that is, to “confirm” it. Once an award has been reduced to judgment, it can be enforced to the same extent as any other judgment. See, e.g., 9 U.S.C. § 13 (Under Federal Arbitration Act, judgment on award “shall have the same force and effect, in all respects, as, and be subject to all the provisions of law relating to, a judgment in an action; and it may be enforced as if it had been rendered in an action in the court in which it is entered”); Fla. Stat. § 682.15(1)( “The judgment may be recorded, docketed, and enforced as any other judgment in a civil action.”); N.Y. Civ. Prac. L. & R. § 7514(a) (“A judgment shall be entered upon the confirmation of an award.”).

The Federal Arbitration Act (the “FAA”), and most or all state arbitration statutes, authorize courts to confirm awards in summary proceedings. State arbitration-law rules, procedures, limitation periods and the like vary from state to state and frequently from the FAA, and state courts may apply them to FAA-governed awards (provided doing so does not frustrate the purposes and objectives of the FAA).

But let’s keep things simple, and take a brief look at the FAA’s requirements for confirmation applicable in federal court when there is no prior pending action related to the arbitration, and  there are no issues concerning federal subject matter jurisdiction, personal jurisdiction, sufficiency or service of process, venue (i.e., whether suit should have been brought in another federal judicial district) or the applicability of the FAA.  We’ll also discuss how applications to confirm are supposed to be summary proceedings, why timing of an application is important, and how courts go about deciding them. Continue Reading »

Improving Arbitration-Award Making and Enforcement by Faithfully Implementing the Purposes and Objectives of the Federal Arbitration Act

November 12th, 2013 Arbitration Agreements, Arbitration Practice and Procedure, Awards, General, Judicial Review of Arbitration Awards, Small Business B-2-B Arbitration Comments Off on Improving Arbitration-Award Making and Enforcement by Faithfully Implementing the Purposes and Objectives of the Federal Arbitration Act

Part I:

An Introduction to the Problem and its Solution

Arbitration can be a very effective way of resolving a wide range of disputes arising out of many legal and commercial relationships. It can benefit the parties if they make informed decisions about agreeing to it, and craft their agreement accordingly. It can benefit the courts and the general public by shifting to the private sector dispute-resolution costs that the public-sector would otherwise bear.

Arbitration is not a perfect form of dispute resolution (and none is, including court litigation). That is so even when parties carefully draft their arbitration agreements, and the parties, arbitrators, arbitration service providers and courts do their best to ensure the integrity and reliability of the process and otherwise strive to protect the legitimate expectations of the parties. But at least over the last couple of decades or so, arbitration has, in the opinion of many, become a less attractive alternative to court litigation than it was intended to be, could be and once was. Continue Reading »