Manifest Disregard of the Law Again

Failure to Provide Citations in Award Explanation Is Not Evidence of Manifest Disregard of the Law

BUNZL DISTRIBUTION v. DEWBERRY, No. 00-2325 (8th Cir., 6/11/01):

Claims of manifest disregard, based upon an alleged failure to apply applicable law, will not be presumed by an omission to cite the law. The Eighth Circuit follows a manifest disregard analysis in its review of a wrongful discharge arbitration Award. Importantly, it reaffirms the right of Arbitrators not to supply an explanation of the Award and refuses to hold such silence against the Award.

The district court upheld the Award, but, in doing so, evidently stated that “the arbitrator’s silence on this issue was not enough to conclude that the arbitrator based his decision on a manifest disregard of the law.” (underscoring added).

The Eight Circuit observed on this point that “Arbitrators are not required to elaborate their reasoing supporting an award, and to allow a court to conclude that it may substitute its own judgment for the arbitrator’s whenever the arbitrator chooses not to explain the award would improperly subvert the proper functioning of the arbitral process.”

What about the instance where an Arbitrator does speak to the issues, but neglects to include mention of a case or statute argued by the objecting party? Does that constitute manifest disregard? In this case, the Eighth Circuit deals with that argument and answers in the negative. (SAC Ed: Good thing, too! Arbitrators who do care to supply some rationale should not have to choose between silence or a full-blown Opinion.) (SAC Ref. No. 01-27-03)

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Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.

Securities Attorney at Sallah Astarita & Cox | 212-509-6544 | | Website | + posts

Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.

He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page -, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.