Parties can waive their right to challenge an allegedly “untimely” arbitration award if they do not object during the arbitration proceedings

Posted by Timothy P. PolishanAug 02, 2022

When, prior to issuance of an arbitration award, a party knows—or has reason to know—prospective grounds for challenging the coming award but waits to object until after it loses the arbitration, a party can waive its right to challenge the award on those grounds. Goldman Sachs v. Athena, 803 F.3d 144 (3d Cir. 2015); E.g., Simons v. Brown, 444 F. Supp. 3d 642, 653 (E.D. Pa. 2020), aff'd, No. 20-1814, 2022 WL 296636 (3d Cir. Feb. 1, 2022)(“Importantly, at no time during the arbitration process did Simons challenge Weintraub's supposed exclusion of evidence on procedural grounds. Instead, he waited to raise his objections on review of the Award. The Third Circuit has held [in Goldman Sachs] that a party waives its right to seek vacation of an award on grounds…where it had constructive knowledge [of those grounds]…during the [arbitration] proceedings and chose not to challenge it at that point”).

In this vein, courts hold that parties waive their right to challenge an allegedly “untimely” award when they do not object during the arbitration proceedings, but rather wait until filing a motion in district court seeking vacatur of the award pursuant to the FAA—particularly when time is not of the essence in the  parties' arbitration agreement, and there is no showing of prejudice caused by the delay. E.g., Davis v. Producers, 762 F.3d 1276 (11th Cir. 2014), cert. den. 575 U.S. 913 (Party waived right to challenge arbitration award as untimely where he did not object during arbitration but waited until filing in district court seeking vacatur of award pursuant to FAA, and failed to show he was prejudiced by delay); Hasbro v. Catalyst, 367 F.3d 689 (7th Cir. 2004) (Time was not of essence in parties' arbitration agreement, precluding vacatur of arbitration award on grounds arbitrators had exceeded powers by taking too long to render award; neither arbitration agreement nor governing rules stated time was of essence, and conduct of parties did not indicate differently); Success Village v. Amalgamated Local 376, 380 F.Supp.2d 95 (D. Conn. 2005) (Arbitration panel's failure to render timely arbitration award did not warrant vacating award, where there was no showing that party objected to the delay prior to issuance of the award, or suffered actual harm stemming from delay); In re A.H. Robins Co., 211 B.R. 199 (E.D. Va. 1997), affirmed 166 F.3d 331, cert. denied 528 U.S. 1082 (Allegation of arbitrator error in failing to render timely decision did not warrant vacating award given lack of evidence claimant was prejudiced by arbitrator's delay).