New York courts regularly hear cases involving the enforcement of commercial arbitral awards. They vacate or refuse enforcement of awards only on limited grounds, as required under the Federal Arbitration Act (the FAA) and New York CPLR Article 75. New York courts also regularly consider issues arising under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the New York Convention, which governs the enforcement of foreign and “nondomestic” arbitration awards and agreements. And in that context as well, the New York courts have generally taken a pro-arbitration approach.
A series of decisions in a long-running investor-broker dispute, however, is counter to those trends. In Fiorilla v. Citigroup Global Markets, the New York County Commercial Division, and the Appellate Division, First Department, vacated a FINRA arbitration award on the ground that the arbitrators manifestly disregarded the law because, the courts concluded, the arbitrators had wrongly rejected a motion to enforce a putative settlement agreement between the parties. Later in the case, those courts also enjoined the investor from seeking to enforce the FINRA award outside the United States. These decisions establish unfortunate precedent for domestic and international arbitration in New York state courts.
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