It is universally recognized that one of the most important benefits of arbitration is finality. As recognized by the United States Court of Appeals for the Second Circuit in Florasynth v. Pickholz (2d Cir. 1984) "parties choose to arbitrate because they want quick and final resolution of their disputes." The statutes governing arbitration practice and procedure – the Federal Arbitration Act ("the FAA"), the New York Convention, the Uniform Arbitration Act ("the UAA"), and New York Civil Practice Law and Rules ("CPLR") Article 75 – each embody the principle of finality by providing narrow grounds upon which an arbitration award may be vacated or modified, and by establishing truncated time frames in which to do so. Underscoring the importance of the finality of arbitration awards, the Supreme Court held in Hall Street Associates, LLC v. Mattel, Inc. (2008) that Sections 9-11 of the FAA (concerning the confirmation, modification and vacatur of arbitration awards) substantiate "a national policy favoring arbitration with just the limited review needed to maintain arbitration's essential virtue of resolving disputes straightaway."
Despite the bedrock principle of finality of arbitration awards, more and more parties are attempting to avoid unfavorable awards, most often through motions to vacate. What happens when efforts to vacate an unfavorable award fail, or there is no attempt made to vacate an award within the applicable timeframe? The answer would appear to be that the award (now a judgment) is final and binding. This article addresses the finality of arbitration awards post-confirmation, and whether parties can nonetheless obtain a second bite at the apple through the commencement of a second arbitration.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
