Garrett Lent

First Paragraph

In Wachovia Securities v. Brand, the Fourth Circuit held that arbitrators do not act in manifest disregard of the law by failing to adhere to state procedural laws where state substantive laws govern the underlying dispute. The Fourth Circuit reasoned that the national policy favoring arbitration, at least in part, favors the expedited nature of arbitration proceedings. Accordingly, where an arbitration agreement mandates that state substantive law governs the underlying dispute, the arbitrator may elect not to adhere to the law’s procedural provisions, unless ignoring those provisions unduly prejudices the parties. In drawing its conclusion, the Fourth Circuit assessed manifest disregard of the law as a grounds for vacating arbitral awards, concluding that the legitimacy of the doctrine remained unclear in United States arbitration law. While immaterial to the disposition of the case, the Fourth Circuit’s indecision provided ambiguous guidance to the lower courts, which must continue to grapple with inconsistent precedent when determining whether and how to apply the manifest disregard doctrine. The resulting intra-jurisdictional variability frustrates the Supreme Court’s efforts to federalize U.S. arbitration law.



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.