FAA Vacatur Standards Properly Applied, Court Rules

PHILADELPHIA - The 3rd Circuit U.S. Court of Appeal has affirmed confirmation of an arbitration award that relieved foreign reinsurers of liability to two insolvent insurers under certain reinsurance treaties, ruling that the lower court properly applied the vacatur standards set forth in the Federal Arbitration Act. Ario v. Lloyd's Syndicate 53, No. 09-2991 (3rd Cir.).

On Aug. 18, the appellate majority rejected the liquidator's argument that the parties had selected the Pennsylvania Uniform Arbitration Act to govern the arbitration and, in doing so, had opted out of the FAA. However, the appellate court reversed sanctions imposed against the liquidator.