There is a whole world of automobile service contracts sold by car dealers that are sometimes “reinsured” by affiliated reinsurers. Many disputes have arisen out of these deals and many of these disputes are arbitrated.
In a recent case in Georgia, an arbitration award in an auto service contract dispute was issued and confirmed by the court. On appeal, the court of appeals vacated the arbitration award based on manifest disregard of the law. The Georgia Supreme Court took the case on certiorari and reversed the court of appeals and remanded the matter.
Losing parties in arbitrations often seek to vacate the arbitration award claiming that the arbitrator was guilty of misconduct or manifestly disregarded the law. Convincing a court to vacate an arbitration award is not easy and is not typically successful. Under US law, particularly the Federal Arbitration Act (“FAA”), there is no appeal from an arbitration award and the bases to vacate the award are narrow and limited. SeeFAA, § 10.
In a recent Summary Order, the Second Circuit Court of Appeals, reiterated these principles, although the court did grant some relief to the party seeking vacatur.