Commercial Division Blog
Arbitral Award Vacated for Failure to Enforce Settlement Agreement
On April 9, 2015, the First Department issued a decision in Matter of Citigroup Global Markets, Inc. v. Fiorilla, 2015 NY Slip Op. 03056, affirming a decision vacating an arbitral award.
In Matter of Citigroup Global Markets, the First Department affirmed a trial court order vacating an arbitral award, explaining:
The motion court properly vacated the arbitration award based on a prior settlement agreement. The arbitrators manifestly disregarded the law by failing to enforce the settlement that respondent and petitioner Citigroup Global Markets, Inc. entered into on April 29, 2012. Notably, petitioners provided the relevant law regarding the enforcement of settlement agreements in their motions to enforce the agreement, but the arbitrators ignored the law and denied the motions without explanation. Although arbitrators have no obligation to explain their awards, when a reviewing court is inclined to hold that an arbitration panel manifestly disregarded the law, the failure of the arbitrators to explain the award can be taken into account.
(Internal quotations and citations omitted) (emphasis added). This decision shows that despite the extremely high formal standard for vacating an award, courts will find a way to vacate in cases they find sympathetic.