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Litigation: Courts Award Sanctions for Unsuccessful Challenges to Arbitral Awards

Although there is a statute that authorizes federal courts to sanction lawyers and parties for bringing baseless lawsuits or motions (28 U.S.C. ? 1927), it is very rare that courts actually invoke the statute. One area, however, in which parties and lawyers risk being sanctioned is in connection with challenges to arbitral awards that amount to nothing more than an argument that the arbitrator reached an incorrect result.

B.L. Harbert International LLC v. Hercules Steel Co., 441 F.3d 905 (11th Cir.2006) was a case in which the plaintiff challenged an adverse arbitration award arising out of a dispute over a construction project. The challenge was on the ground that the arbitrator manifestly disregarded the law. The district court disagreed and entered judgment enforcing the award. The plaintiff appealed. The Eleventh Circuit explained that the plaintiff's argument was nothing more than a disagreement with the arbitrator's decision, which is not a basis for vacating an arbitral award.

David Zaslowsky

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