Author: Hans Smit**
Published: March 1999
Costs and Damages
Description: The courts continue to find it difficult to leave arbitral awards alone. In Asturiana De Zinc Marketing, Inc. v. LaSalle Rolling Mills, Inc., Judge Rakoff reduced an arbitral award by the amount the arbitrator had awarded for attorneys’ fees. He ruled that the arbitration clause provided that “any dispute relating to or arising out of this sale [the subject of the arbitration] shall be submitted to arbitration before the American Arbitration Association(“AAA”) in New York City and shall be subject to the substantive laws of New York State without reference to conflict of laws principles,” that N.Y. C.P.L.R. 75133 provides that attorneys’ fees shall not be awarded in arbitration unless provided for in the agreement to arbitrate, and that the provision in AAA Rule 43 giving arbitrators the authority to grant “any remedy or relief that the arbitrator deems just and equitable” did not constitute an agreement of the kind contemplated by Sec. 7513 of the New York Civil Practice Law and Rules. This being so, he ruled, the arbitrators manifestly disregarded the law and their award of attorneys’ fees should be set aside.
*Arbitral & Judicial Decisions
**Stanley H. Fuld Professor of Law and Director of the Center for International Arbitration and Litigation Law, Columbia University.