July 1, 2011

Maritime Arbitration After Stolt-Nielsen v. Animalfeeds: Is 'Exceeding Powers' the New Trend for Award Vacatur?

ABA Tort Trial & Insurance Practice Section, Admiralty and Maritime Committee Newsletter
Christopher R. Nolan

Maritime Partner Christopher Nolan authored an ABA Tort Trial & Insurance Practice Section, Admiralty and Maritime Committee Newsletter article titled "Maritime Arbitration After Stolt-Nielsen v. Animalfeeds: Is 'Exceeding Powers' the New Trend for Award Vacatur?"

In Stolt-Nielsen S.A. v. Animalfeeds Int'l Corp., the Court ruled that in the absence of express enabling language in an arbitration clause, arbitrators do not have the power to impose a class action arbitration on a party objecting to such relief. In so holding, the majority sent a shot across arbitrators' bows: when arbitrators impose their own views of sound policy rather than applying well-settled law, they open themselves up to collateral court appeals of the arbitration awards where it is charged that they exceeded their powers.

Mr. Nolan measures the impact of Stolt-Nielsen on arbitrators by considering court decisions and published arbitration awards that have addressed the ruling. Though the record is short, Stolt-Nielsen was decided one year before the article's date of publication, Mr. Nolan believes that there is reason to believe vacatur petitions will only increase in the years to come.

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