In exchange for a speedy, economical dispute resolution process, parties that submit to binding arbitration assume the risk that an arbitrator might misapply the law. United States Supreme Court precedent and federal law favor agreements to arbitrate by limiting judicial review of arbitral awards and requiring courts to "rigorously enforce arbitration agreements." These judicial constraints support the arbitral goals of efficiency and finality by reducing the risk that arbitral awards will be vacated on appeal. To balance the risk that arbitrators may abuse this standard of review, courts have supplemented restricted judicial review with a doctrine that allows an arbitral award to be vacated in circumstances where the arbitrator manifestly disregarded the law.4 Sawtelle v. Waddell & Reed reaches the outer limits of this doctrine by demonstrating how the courts can use the doctrine to engage in a heightened form of judicial review of arbitral awards.
Courts Have the Final Say: Does the Doctrine of Manifest Disregard Promote Lawful Arbitral Awards or Disguise Unlawful Judicial Review,
2006 J. Disp. Resol.
Available at: https://scholarship.law.missouri.edu/jdr/vol2006/iss2/12