In B. L. Harbert International, LLC. v. Hercules Steel Co., decided in February 2006, the Eleventh Circuit Court of Appeals took the opportunity to express its "exasperation" with the growing tendency of losing parties in arbitration disputes to take a "never-say-die attitude" in the pursuit of vacatur of arbitral decisions "without any real legal basis for doing so" and its concern for the concomitant threat to the underlying purposes of the Federal Arbitration Act (FAA).
Applying the Harbert "any real legal basis" requirement raises several concerns that can be assuaged only by courts' commitment to focus on balancing following two competing public policy goals: the need to protect the purposes and benefits of arbitration under the FAA; and the need to protect parties' right to test the boundaries of the general rule that arbitration awards are final. In Part II, this article examines the Harbert decision in detail, both with respect to the underlying facts of the case and from the standpoint of its legal underpinnings. Part III briefly examines the history of sanctions imposed in connection with attempts to vacate arbitration decisions pursuant to Rule 11 of the Federal Rules of Civil Procedure, Rule 38 of the Federal Rules of Appellate Procedure, and 28 U.S.C. § 1927. Inasmuch as the analysis of the efficacy of the sanctions proposed by the Harbert court hinges on the "legal basis" for challenging arbitral decisions, the historical perspectives underlying the purpose of the FAA, together with federal statutory and common law limitations on vacatur of arbitral decisions are examined in Part IV. Part V reviews Arkansas statutory and case law related to the vacation of arbitration awards. Finally, Part VI contains concluding thoughts and recommendations regarding the appropriate use of sanctions in connection with arbitration vacatur.
Stanley A. Leasure,
Vacatur of Arbitration Awards: The Poor Loser Problem or Loser Pays?,
29 U. Ark. Little Rock L. Rev. 489
Available at: https://lawrepository.ualr.edu/lawreview/vol29/iss3/2