On May 29, 2009 we discussed Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), which held that “manifest disregard of the law” is not an independent basis for vacating an arbitration award foreclosed by Hall Street, but one encompassed within Section 10(a)(4)’s prohibition against arbitrators “exceed[ing] their powers. . . .” This morning the United States Supreme Court granted certiorari in Stolt-Nielsen to decide whether imposing class arbitration on parties whose arbitration clauses are silent on that issue is consistent with the Federal Arbitration Act. The Second Circuit found that the arbitrators did not exceed their powers when they ordered a class action arbitration, even though the contract was concededly silent on whether class arbitrations were permitted.
We shall post in the not too distant future an analysis of the issue the United States Supreme Court will decide, as its resolution potentially has important implications on the powers of arbitrators to consolidate arbitrations or order class-action arbitration proceedings.
Stay tuned. . . .
