Understanding the Manifest-Disregard Doctrine in Arbitration Law

Definition & Meaning

The manifest-disregard doctrine is a legal principle that allows a court to vacate an arbitration award if the arbitrator has shown a clear disregard for the law. For an arbitrator's decision to qualify as manifest disregard, it must not only be incorrect but must also contradict well-established legal precedents. Essentially, this means that if an arbitrator ignores a legal principle that is clearly defined and widely accepted, their decision may be overturned. This doctrine serves as a nonstatutory basis for vacating arbitration awards.

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Legal Use & context

The manifest-disregard doctrine is primarily used in arbitration cases, particularly in civil law contexts. It applies when parties have agreed to resolve disputes through arbitration rather than in court. If an arbitrator's decision is believed to ignore established law, affected parties may seek to have the award vacated. Users can manage related forms and procedures through resources like US Legal Forms, which offers templates for arbitration agreements and motions to vacate awards.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Example 1: In a contract dispute, an arbitrator awards damages based on a legal principle that is clearly established but fails to apply it correctly. If the parties can demonstrate that the arbitrator ignored this principle, they may seek to vacate the award.

Example 2: An arbitrator decides a case involving employment law but disregards a well-established precedent about employee rights. The affected party could argue that the decision should be overturned due to manifest disregard of the law.

Relevant laws & statutes

While there is no specific statute that defines the manifest-disregard doctrine, it has been referenced in various court cases, including:

Hall Street Associates, L.L.C. v. Mattel, Inc., 128 S. Ct. 1396 (2008) - This case limited the grounds for vacating arbitration awards under the Federal Arbitration Act, implying that manifest disregard is not an independent ground for vacatur.
Coffee Beanery, Ltd. v. WW, L.L.C., 300 Fed. Appx. 415 (6th Cir. Mich. 2008) - This case acknowledged the concept of manifest disregard in the context of judicial review of arbitration awards.

State-by-state differences

State	Manifest Disregard Application
California	Recognizes manifest disregard but applies it sparingly.
New York	Has a more established precedent for applying manifest disregard in arbitration.
Texas	Generally does not apply manifest disregard as a separate ground for vacatur.

This is not a complete list. State laws vary, and users should consult local rules for specific guidance.

Comparison with related terms

Term	Definition	Difference
Vacatur	The annulment of a legal judgment or order.	Manifest disregard is a specific ground for vacatur related to arbitration awards.
Arbitration	A method of resolving disputes outside of court.	Manifest disregard applies to the decisions made during arbitration.

Common misunderstandings

What to do if this term applies to you

If you believe that an arbitrator has manifestly disregarded the law in your case, consider the following steps:

Review the arbitration award and identify specific legal principles that were ignored.
Consult with a legal professional who can advise you on the viability of a motion to vacate the award.
Explore US Legal Forms for templates related to arbitration and vacatur motions, which can help streamline the process.

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Quick facts

Typical Fees: Varies by jurisdiction and complexity of the case.
Jurisdiction: Federal and state courts.
Possible Penalties: If vacated, the arbitration award may be nullified, and the case may be sent back for re-arbitration.