Published: January 2009
Review on the Merits
Description: “Even when laws have been written down, they ought not always to remain unaltered.”
Concerning the standards of review available under the Federal Arbitration Act (“FAA”), it seems that federal courts in the United States have regularly followed this admonition of Aristotle. Whether it be creating non-statutory grounds of review or refusing to clarify those grounds, both the Supreme Court and the circuit courts have created a patchwork of non-statutory grounds for challenging an arbitration award. For many foreign attorneys, these non-statutory grounds not only infuse uncertainty into the law, but they represent an increased level of judicial review generally avoided in the international arbitration community. When choosing to hold arbitration in a particular country, parties seek a court system that allows for quick and fair enforcement of arbitral awards. The non-statutory grounds in American law present an unnecessary obstacle, especially when the FAA explicitly directs courts to enforce arbitral awards unless they can be vacated under narrow statutory grounds.
But the landscape appears to be changing with the recent decision of the Supreme Court in Hall Street Associates v. Mattel. It appears that, for the first time in 55 years, the Court has revisited the logic that underlies the non-statutory standards of review and indicated that it is time to move towards a more limited form of review. The decision should signal a shift in this area of arbitral jurisprudence, and it should provide hope that the United States will follow the path of other jurisdictions towards clearer standards of review.
To discuss appropriately the Hall Street decision and its ramifications, this comment will begin with a brief overview of the landscape of arbitration law in the United States as compared to the international community, followed by a discussion of the decision and its procedural history, and finally the comment will discuss the reaction of the arbitral community in the context of the overall policy that the U.S. Supreme Court seems to be following.
*Mauricio Gomm-Santos is a Foreign Legal Consultant with Buchanan, Ingersoll & Rooney PC in Miami, FL, a partner of Seleme, Lara, Coelho, & Gomm Santos, Advogados, in Curitiba, Brazil, and Professor of Law at the University of Miami.
**Quinn Smith is an associate at Polenberg Cooper, P.A. in Ft. Lauderdale, FL.