Completing the trifecta of arbitration decisions this week, the Sixth Circuit handed down Physicians Insurance Capital v. Praesidium Alliance Group in which it affirmed confirmation of an arbitration award. Two points of note from this opinion, which is unpublished. First, the Court seemed to lend credence to the notion that manifest disregard to the law endures as a standard for vacating arbitration awards. That currently is an open question in light of recent Supreme Court decisions, but the Court seemed to suggest that it does represent an independent basis for vacating arbitration awards. At the same time, however, since it did not actually vacate the award, the Court analysis in this respect is arguably dicta.
Second, this case provided an illustration of what not to do if you want to try to get an arbitration award vacated. Apparently the losing party never had a transcript made of the arbitration proceedings. As a result, it was left scrambling to gather affidavits in an attempt to recreate a record for judicial review. Relatedly, the parties did not request a reasoned award, and as a result it did not receive one. These two factors, working in tandem, provided a very limited basis upon which the Court could review the arbitration award. As a result, it is little wonder that the Court affirmed confirmation of the award.
Consistent with several of the arbitration decisions have been coming out of the Circuit recently, this decision highlights some best practices that could be taken but were not. If a party desires to preserve its ability to challenge an arbitration award, it is incumbent upon the party to ensure that an accurate record is established. With no transcript and no reasoned award, it is difficult for a court to second-guess an arbitration decision, particularly in light of the high standard.
