Can the Arbitrator Enforce the Favorable Arbitration Award I Obtained? Favorable arbitration awards are wonderful things, but they are not self-enforcing. Sometimes the other side voluntarily complies, but if not, there is really not much of anything the arbitrator can do to help.
Arbitrators are not judges and do not have the authority to garnish wages, seize property, foreclose on encumbered property, freeze bank accounts, impose contempt sanctions, and so forth. Parties can delegate to arbitrators broad adjudicatory and remedial authority, but that is relevant only to the nature and scope of their awards, and does not confer power on the arbitrators to enforce their awards coercively.
Apart from its potential preclusive effect in subsequent litigation or arbitration, an arbitration award stands on the same footing as any other privately prepared legal document, and for all intents and purposes it is a contract made for the parties by their joint agent of sorts—the arbitrator or arbitration panel. It may be intended by the arbitrator or panel, and at least one of the parties, to have legal effect, but it is up to a court to say what legal effect it has, and, if necessary, to implement that legal effect through coercive enforcement.
A judgment, by contrast, is an official decree by a governmental body (the court) that not only can be coercively enforced through subsequent summary proceedings in the same or other courts (including courts in other states and federal judicial districts), but is, to some extent, self-enforcing. A judgment, for example, can ordinarily be filed as a statutory lien on real property, and applicable state or federal law may, for example, authorize attorneys to avail their clients of certain judgment-enforcement-related remedies without prior judicial authorization.
Suppose you or your business have obtained an arbitration award directing an individual or entity to pay you a sum of money, say, for breach of contract. The first step in enforcing that judgment against your adversary is to have a court “confirm” that award, that is, to enter judgment upon it. Does the Federal Arbitration Act Authorize Courts to Confirm Arbitration Awards? The Federal Arbitration Act, and most or all state arbitration statutes, provide for enforcement of arbitration awards through a procedure by which a party may request a court to enter judgment on the award, that is to “confirm” it. Once an award has been reduced to judgment, it can be enforced to the same extent as any other judgment. See, e.g., 9 U.S.C. § 13 (Under Federal Arbitration Act, judgment on award “shall have the same force and effect, in all respects, as, and be subject to all the provisions of law relating to, a judgment in an action; and it may be enforced as if it had been rendered in an action in the court in which it is entered”); Fla. Stat. § 682.15(1)( “The judgment may be recorded, docketed, and enforced as any other judgment in a civil action.”); N.Y. Civ. Prac. L. & R. § 7514(a) (“A judgment shall be entered upon the confirmation of an award.”).
Chapter One of The Federal Arbitration Act (the “FAA”), and most or all state arbitration statutes, authorize courts to confirm domestic awards in summary proceedings. State arbitration-law rules, procedures, limitation periods, and the like vary from state to state and frequently from the FAA, and state courts may apply them to FAA-governed awards (provided doing so does not frustrate the purposes and objectives of the FAA). And Chapter 2 of the FAA provides some different rules that apply to the confirmation of domestic arbitration awards that fall under the Convention on the Recognition of Foreign Arbitral Awards (the “Convention”), and the enforcement of non-domestic arbitration awards falling under the Convention (i.e., awards made in territory of a country that is a signatory to the Convention.
But let's keep things simple, and take a brief look at the FAA's requirements for confirming arbitration awards, as applicable in federal court for domestic awards not falling under Chapter Two of the Federal Arbitration Act in situations where there is no prior pending action related to the arbitration, and there are no issues concerning federal subject-matter jurisdiction, personal jurisdiction, sufficiency or service of process, venue (i.e., whether the suit should have been brought in a different federal judicial district), or the applicability of Chapter One of the FAA (9 U.S.C. §§ 1-16). We'll also discuss how applications to confirm are supposed to be summary proceedings, why timing of an application is important, and how courts decide them. What are the Requirements for Confirming Arbitration Awards under the Federal Arbitration Act? Like most other issues arising under the FAA, whether a court should confirm an award depends on what the parties agreed. Section 9 of the FAA, which governs confirmation of awards, says—with bracketed lettering added, and in pertinent part: “[A] If the parties in their agreement have [B] agreed that a judgment of the court shall be entered upon [C] the award made pursuant to the arbitration, and [D] shall specify the court, then [E] at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and [F] thereupon the court must grant such an order unless [G] the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title.” 9 U.S.C. § 9. Items [A] through [D] above each concern party consent as evidenced by the parties' arbitration agreement.
The key substantive requirements for confirming arbitration awards are thus:
1. The existence of a written pre- or post-dispute arbitration agreement falling under Section 2 of the FAA ([A], above; 9 U.S.C. § 2);
2. Consent to confirmation in a particular court, or at least in any court of competent jurisdiction ([B] and [D], above); and
3. A final arbitration award resulting from the parties' submission of a dispute or disputes to arbitration pursuant to the arbitration agreement ([A] and [C], above).
The key procedural requirements for confirming arbitration awards are:
1. The party seeking confirmation must apply for it “within one year after the award is made. . .” ([E], above); and
2. The “court must grant” confirmation “unless the award is vacated, modified or corrected” under Section 10 or 11 of the FAA ([F] and [G], above). Do I have to File a Full-Blown Lawsuit to Confirm an Award? Fortunately, the answer is no. Like all other applications for relief under the FAA, an application to confirm an award is a summary or expedited proceeding, not a regular lawsuit. Rule 81(a)(6)(B) of the Federal Rules of Civil Procedure provides that the Federal Rules “to the extent applicable, govern proceedings under the following laws, except as these laws provide for other procedures. . . (B) 9 U.S.C., relating to arbitration. . . .”
Section 6 of the FAA “provide[s] for. . . procedures” other than those applicable to ordinary civil actions because it requires applications for relief under the FAA to be made and heard as motions:
Any application to the court hereunder shall be made and heard in the manner provided by law for the making and hearing of motions, except as otherwise . . . expressly provided [in the FAA].
9 U.S.C. § 6.
An action commenced to confirm an award is, of course, “[a]n application to the court” under the FAA, and thus, unless the FAA otherwise provides, must be “made and heard in the manner provided by law for the making and hearing of motions. . . .” What Papers Must I File to Apply for Confirmation of an Award? What courts usually expect the award proponent file and serve is not a summons and complaint, but a summons, notice of application or notice of petition, an application or petition, a brief in support (which in most cases need not be longer than a few pages or so) and any affidavits or certifications that may be required (typically an affidavit or certification from counsel, the client or another appropriate person authenticating the agreement, award and any other pertinent documents is all that's necessary in this context). The summons, notice of application and petition should, among other things, inform the other party of the date responding papers are due under applicable motion rules. The petition or application is usually in the form of a pleading (including jurisdictional allegations, allegations about the applicability of the FAA and so forth). The brief should set forth the legal basis for the application, including the basis for federal subject matter jurisdiction and the reasons the FAA applies. What Papers does the Opposing Party File to Respond to the Application? A party opposing a motion to confirm should oppose it like it would any other motion, provided there are colorable grounds for doing so. Assuming there are no issues concerning the timeliness of the application or the existence of an arbitration agreement, then generally the only grounds for opposing the application are those set forth in FAA Sections 10 and 11, which govern applications to vacate awards and applications to modify or correct them. Those grounds are limited and generally difficult to establish. If the opposing party believes there are such grounds, then ordinarily it will raise them by cross-application or cross-motion. What are the Time Limits for Filing an Application to Confirm? Section 9 of the Federal Arbitration Act requires applications to confirm to be brought “within one year after the award is made.” 9 U.S.C. § 9. Can the Opposing Party Move to Vacate, Modify, or Correct the Award? That depends on when a party files its application to confirm the award. While a party applying to confirm an award has one year to make its application, a party that wants to vacate, modify or correct one has to assert its grounds within three-months. See 9 U.S.C. § 12. If the party seeking confirmation makes its application after that three-month period elapses, then the opposing party cannot, as a matter of law, assert Section 10's or 11's grounds for vacating, modifying or correcting an award, even as affirmative defenses to the application to confirm. See, e.g., Florasynth, Inc. v. Pickholz, 750 F.2d 171, 175-76 (2d Cir. 1984). How do Courts Decide Applications to Confirm? They decide them like motions. As previously discussed confirmation- or vacatur-related applications, supporting affidavits, cross-applications, responses and replies are presented to the court in the form of motions. And like most other motions, courts ordinarily decide them on the papers, sometimes (but not always) holding oral argument. Occasionally, one cross-moving to vacate can make a successful application for some limited discovery, an evidentiary hearing, or both. To do so, however, the party seeking discovery and a hearing must show “clear evidence of impropriety” by one or more of the arbitrators. Andros Compania Maritima, S.A. v. Marc Rich & Co., 579 F.2d 691, 701, 702 (2d Cir. 1978).
Accordingly, the parties must ordinarily establish their competing claims for confirmation and vacatur through affidavits, documentary evidence and briefs, without any fact development through discovery or an evidentiary hearing. In most cases, that is a relatively simple task for the party seeking confirmation, but a difficult one for the party requesting vacatur, modification, or correction of the award.
If there is a cross-motion to vacate, modify, or correct the award (or a cross-motion to confirm if the party seeking vacatur is the first to file), each side usually gets to respond to the other side's motion or application and submit a reply in support of its own motion or application. If the briefing schedule is properly set, that usually means each side files two sets of papers (the second set is a combined response and reply). If there is no motion or cross-motion to vacate, then the other side simply responds to the motion to confirm and typically the party seeking confirmation gets to file reply papers, if necessary.
The briefing can often be completed within two months or less. Once the briefing is complete, the case is submitted (subject to the possibility of oral argument), and the Court will decide the competing motions and issue an opinion, order and judgment. (Sometimes local rules call for the parties to submit proposed judgments or the court may request that a party do so.) How long do Courts Typically take to Decide Applications to Confirm? If the motion to vacate is not particularly persuasive, then typically the party seeking confirmation will receive judgment in its favor in a relatively short period, depending on the state of the assigned judge's docket. If the motion or cross-motion to vacate has more substance, then it might (or not) take the court longer to decide it.
In a large majority of (but not all) cases, the motion to vacate will be denied and the motion to confirm granted. Will there be an Appeal? Appeals to the appropriate Circuit Court of Appeals are not unusual in cases involving the grant or denial of a motion to vacate, modify, or correct an award, but all other things being equal, if the only motion made was one to confirm, and there are no potentially controversial issues presented, then an appeal is less likely (but not out of the question). Do I need an Attorney to Confirm an Award? Depending on applicable state law, if you are an artificial entity that operates through agents, such as a corporation or LLC, then ordinarily you will need to hire an attorney to represent you in court. It might be permissible for the attorney to be an officer of the corporation, for example, provided that he or she is licensed to practice in the court where the application is pending. If you are an individual acting solely on your own behalf (i.e., not an artificial entity), then you can generally appear pro se if you desire. Always consult applicable state law on issues like this, most preferably with the assistance of an attorney licensed to practice in the relevant jurisdiction.
While we have accurately portrayed the confirmation process as ordinarily a relatively straightforward procedure, we speak from the standpoint of lawyers who are familiar with, and experienced in, arbitration law, practice and procedure. Its relative simplicity does not mean that it is supposed to be a "do-it-yourself" process.” And while the confirmation process can be relatively straightforward, it becomes strikingly less so when the other side has an arguable basis on which to challenge the award. In any event, this guide is not intended to be a “do-it-yourself” guide for pro se litigants. .
So if you need to confirm an arbitration award, make sure you are represented by counsel (unless you are an individual, you truly can't afford one, and you have no choice but to try to go it alone). You should consider asking the attorney or law firm that represented you in the arbitration to represent you, or retaining an arbitration lawyer for that purpose.
In terms of whether you want the lawyer or firm that represented you in the arbitration proceeding to handle the post-arbitration FAA litigation, you'll need to consider whether they (or others in their firm) are experienced in handling FAA enforcement proceedings, and what your fee will likely be. If you believe you might be able to save some money by hiring a reasonably priced arbitration lawyer or firm, then you can either hire one for the limited purpose of assisting your existing counsel with the confirmation proceedings, or handling all of the required FAA enforcement work, including any appeals. One of those two options might be particularly attractive if you anticipate a motion to vacate that might have some merit and want the benefit of an arbitration lawyer who has experience making and opposing such motions. Such a lawyer should, in exchange for a reasonable fee, be able to devise what appears to be the best strategy and present to the court your arguments in a clear, concise, and fully-supported manner. Do Confirmation Proceedings Provide Opportunities for Alternative Billing Arrangements, such as Proj Whenever you hire an attorney (or ask your attorney to undertake more work), you should manage your costs. One of the attractive features of FAA-related litigation is that, for the most part, it can generally be divided into a series of discrete projects. The preparation, service and filing of the papers might be one discrete project. Where a motion to vacate is made, preparation, service and filing of the responding papers would be another, which, with the right briefing schedule, may be combined with the reply papers in support of the application to confirm as one submission. Preparing for and handling the oral argument, if any, might be another discrete project.
That means that motions to confirm may be good candidates for alternative billing arrangements. For example, you might be able to obtain a fixed-fee for each discrete project, which is set once the lawyer can make a reasonable estimate of the time required to complete it.
Whenever you hire an attorney (or ask your attorney to undertake more work), you should manage your costs. One of the attractive features of FAA-related litigation is that, for the most part, it can generally be divided into a series of discrete projects. The preparation, service and filing of the papers might be one discrete project. Where a motion to vacate is made, preparation, service and filing of the responding papers would be another, which, with the right briefing schedule, may be combined with the reply papers in support of the application to confirm as one submission. Preparing for and handling the oral argument, if any, might be another discrete project.
That means that motions to confirm may be good candidates for alternative billing arrangements. For example, you might be able to obtain a fixed-fee for each discrete project, which is set once the lawyer can make a reasonable estimate of the time required to complete it. What Should my Expectations be Concerning the Fees I'll have to Pay? If no motion to vacate is made, you should expect that the fees you will have to pay to be lower. Whether you are charged on a fixed-fee, fee-cap or hourly basis, the additional fee you should expect to pay will likely depend on the strength of the grounds asserted by the party challenging confirmation. Briefing a motion to confirm in a case where the other party has no legitimate defenses or only a few weak ones ordinarily takes less effort than it does when, for example, the other party asserts some potentially viable grounds for vacatur, especially where those grounds are fact-intensive, raise legal questions that are not necessarily settled, or both.