USA Law and Practice Contributed by: Matthew Kirtland, Timothy Tyler, Katie Connolly and Taylor LeMay, Norton Rose Fulbright US LLP
violate US public policy. For example, in Hardy Expl . & Prod . ( India ), Inc . v Gov ’ t of India , Ministry of Petro- leum & Nat . Gas , a district court refused to recognise an award that ordered specific performance in India, finding that doing so would violate US public policy recognising a state’s sovereignty and the right to con - trol its lands and natural resources. 10.3 Recovering Interest and Legal Costs The FAA is silent on costs, and courts diverge on the question of how the costs of arbitration proceedings should be estimated and allocated. Costs are gen - erally handled as a matter of contractual agreement between the parties or according to the institutional rules that govern a proceeding. Generally, the US fol - lows the “American Rule” – ie, each party bears its own costs absent a contractual or statutory basis to the contrary. The FAA is also silent on interest. However, US courts have generally held that, unless parties have speci - fied otherwise in their agreement, arbitrators have the authority to award interest and to determine the amount of interest and the date from which the inter - est should be calculated. Moreover, in the United States, unless specified oth - erwise in the parties’ arbitration agreement or ordered by the confirming court, once an award is confirmed, post-award interest will be governed by the federal post-judgment interest statute, 28 USC Section 1961. This is because the United States has adopted the doctrine of merger, whereby once a claim (or award) is reduced to a judgment, the original claim is extin - guished and a new claim, called a judgment debt, arises.
• the award was procured by corruption, fraud or undue means; • there was evident arbitrator partiality or corruption; • the arbitrators were guilty of misconduct in refus - ing to postpone the hearing or in refusing to hear evidence pertinent and material to the controversy, or were guilty of any other misbehaviour by which the rights of any party have been prejudiced; or • the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made. These statutory grounds for vacatur/set aside can - not be varied by party agreement. As a matter of the common law within some court of appeals circuits of the United States, vacatur is available on the non- statutory ground of “manifest disregard of the law”. Other circuit courts of appeals have held that mani - fest disregard of the law is shorthand for the reasons for vacatur in the FAA. An applicant for vacatur must establish both that (i) the arbitrators knew of a govern - ing legal principle yet refused to apply it or ignored it altogether, and (ii) the law ignored by the arbitrators was well defined, explicit and clearly applicable to the case. A court may modify or correct an award where: • there was an evident material miscalculation of fig - ures or an evident material mistake in the descrip - tion of any person, thing or property referred to in the award; • the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affect - ing the merits of the decision upon the matter submitted; and • the award is imperfect in matter of form not affect - ing the merits of the controversy. Such an application may be brought either in the district where the award was made or in any district proper under the general venue statute. If a court vacates an arbitration award, and the arbi - tration agreement is still valid, the court may direct rehearing by the arbitrators.
11. Review of an Award 11.1 Grounds for Appeal
The FAA does not entitle parties to appeal arbitra - tion awards. Under the FAA, there are very limited circumstances in which a party may apply to have an award vacated, modified and/or corrected. A court may vacate an award where:
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