An Opportunity Lost: The Supreme Court’s Failure to Recognize the Implications of Its Holding in Hall Street Associates, L.L.C. v. Mattel, Inc.

Eric S. Chafetz, Brooklyn Law School

Abstract

The Supreme Court of the United States, in Hall Street Associates, L.L.C. v. Mattel, Inc., 128 S.Ct. 1396 (2008), finally addressed whether parties can contract to expand the judicial review provisions in sections 10 and 11 of Article 1 of the Federal Arbitration Act (“FAA”), which governs domestic arbitration awards. Although the Supreme Court resolved this specific issue in the negative, its analysis was incomplete, as it did not recognize how the meaning of the language included in section 9 of Article 1 of the FAA was very similar to that in section 207 of Article 2 of the FAA. Additionally, the Hall decision creates unnecessary confusion in this area of the law, by leaving several other related issues unresolved. Those issues include: (i) which provisions in Article 1 of the FAA parties can and cannot agree to change; (ii) whether parties can agree to apply vacatur provisions from state arbitration schemes to arbitrations governed by Article 1 of the FAA; (iii) whether the Hall majority’s decision only applies to manifest disregard of the law, or, if parties can still agree to have their awards reviewed under additional grounds of review not enumerated in sections 10 and 11 of Article 1 of the FAA; (iv) whether parties can agree that select or none of the grounds of review in sections 10 and 11 of Article 1 of the FAA must be applied to their awards; and (v) the Hall decision’s impact on whether parties can contract to expand the judicial review provisions in Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which applies to Article 2 of the FAA and governs non-domestic arbitration awards.