In the Third Circuit, the Deference Given to Arbitration Awards is Almost Unparalleled.

Posted by Timothy P. PolishanJul 30, 2022

The Third Circuit has held that the “deference given to arbitration awards is almost unparalleled.” Verizon v. Commc'ns Workers, 13 F.4th 300, 303 (3d Cir. 2021). There is a “strong presumption” in favor of enforcing arbitration awards, to preserve finality. Mut. Fire, Marine v. Norad Reins, 868 F.2d 52, 56 (3d Cir. 1989). Vacatur is appropriate in “exceedingly narrow” circumstances. Metromedia Energy v. Enserch, 409 F.3d 574, 578 (3d Cir. 2005). An award is “presumed valid unless it is affirmatively shown to be otherwise.” Brentwood v. UMW, 396 F.3d 237, 241 (3d Cir. 2005).

It is “well established” that the “court's function on confirming or vacating a commercial [arbitration] award is severely limited.” Mut. Fire 868 F.2d at 56. Judicial consideration of speculation about how and why the award was decided is prohibited as it would force courts to “sit as the panel did and reexamine the evidence under the guise of determining whether the arbitrators exceeded their powers.” Mut. Fire at 56. Where the court concludes the arbitrators committed serious error, the award must still be enforced unless there is “absolutely no support at all in the record justifying the arbitrator's determinations.” United Transp. v. Suburban, 51 F.3d 376, 379 (3d Cir. 1995).

The “sole question” is “whether the arbitrator (even arguably) interpreted the parties' contract, not whether he got its meaning right or wrong.” Oxford Health v. Sutter, 569 U.S. 564, 568–69 (2013) (“If parties could take `full-bore legal and evidentiary appeals,' arbitration would become `merely a prelude to a more cumbersome and time-consuming judicial review process'”). Courts do not “correct factual or legal errors made by an arbitrator,” and will uphold an award even if the arbitrator engaged in “improvident, even silly, factfinding,” so long as the arbitrator was not “completely irrational.” Ario v. Underwriting Members, 618 F.3d 277, 296 (3d Cir. 2010).