A landmark decision is awaited in the US Supreme Court case of Hall Street v Mattel. This case questions the limits of a court's power to review arbitral decisions. According to the Federal Arbitration Act of 1925, courts can only review arbitration awards in certain narrowly defined circumstances.
Upon publication of an arbitral award granted in favour of Mattel, Hall Street applied to the district court for a motion to 'vacate' the award (according to US procedure) on the basis that the arbitrator had wrongly applied the law. Although this ground was set out in the parties' arbitration agreement as a ground for reviewing the award, it is not one of the grounds for review provided in the Act.
The federal district judge granted Hall Street's motion and sent it back to the arbitrator who issued an award in favour of Hall Street. Following the reversal of this decision by the Court of the 9th Circuit on appeal, Hall Street has now appealed to the Supreme Court for a definitive ruling.
The ongoing Supreme Court case has given rise to much debate as to whether provisions allowing wider judicial review of awards are enforceable essentially as contract rights, rather than as rights under the Act. Whatever the ultimate decision, this case will impact not only on the enforcement of arbitral awards in the United States, but also potentially on decisions made by courts worldwide. (Hall Street Associates, L.L.C. v. Mattel, Inc. 9th Cir. R. 36-3).